BILL ANALYSIS �
AB 1677
Page 1
Date of Hearing: April 1, 2014
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 1677 (Gomez) - As Amended: March 17, 2014
SUBJECT : Nursing education: service in public hospitals and
veterans' facilities.
SUMMARY : Establishes a loan assumption program for employees
of eligible public facilities, as defined; specifies that the
California Student Aid Commission (CSAC) shall award no more
than the number of warrants that are authorized in the Budget
Act for that fiscal year for the assumption of the loans; and,
appropriates 48 million dollars from the General Fund (GF) to
CSAC to be expended for the purposes of CSAC issuing loan
assumption awards beginning with the 2015-2016 fiscal year to
the 2021-22 fiscal year, as specified. Specifically, this bill :
1)Specifies that any person enrolled in an eligible institution,
or any person who agrees to work full time as a registered
nurse or a licensed vocational nurse in an eligible public
facility that employs registered nurses or licensed vocational
nurses, may be eligible to enter into an agreement for loan
assumption, to be redeemed, as specified, upon becoming
employed as a clinical registered nurse or licensed vocational
nurse in an eligible public facility that employs registered
nurses or licensed vocational nurses.
2)Stipulates that in order to be eligible to enter into an
agreement for a loan assumption, an applicant shall satisfy
all of the following conditions:
a) The applicant has been admitted to, or is enrolled in,
or has successfully completed, an accredited program of
professional preparation for licensing as a registered
nurse or vocational nurse in California;
b) The applicant is currently enrolled, or has been
admitted to a program in which he or she will be enrolled,
on a full-time basis, as determined by the participating
institution and the applicant shall agree to maintain
satisfactory academic progress and a minimum of full-time
enrollment, as defined by the participating eligible
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institution;
c) The applicant has been judged by his or her
postsecondary educational institution to have outstanding
ability on the basis of criteria that may include, but need
not be limited to, any of the following:
i) Grade point average;
ii) Test scores;
iii) Faculty evaluations;
iv) Interviews; and
v) Other recommendations.
d) The applicant has received, or is approved to receive, a
loan under one or more of the following designated loan
programs:
i) The federal Family Education Loan Program; and,
ii) Any loan program approved by CSAC.
e) The Applicant has agreed to work full time for at least
four consecutive years as a clinical registered nurse or
licensed vocational nurse in an eligible public facility
that employs registered nurses or licensed vocational
nurses.
3)Stipulates that no applicant who has completed few than 60
semester units, or the equivalent, shall be eligible to
participate in the loan assumption program as established by
this measure.
4)Defines "eligible institution" to mean a postsecondary
institution that is determined by CSAC to meet both of the
following requirements:
a) The institution is eligible to participate in state and
federal financial aid programs; and,
b) The institution maintains an accredited program of
professional preparation for licensing as a registered
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nurse or vocational nurse in California.
5)Defines "eligible public facility" to mean any of the
following:
a) A state hospital administered by the State Department of
State Hospitals (DSH);
b) A state veterans' home, as defined in existing law;
c) A public hospital that is a member of the California
Association of Public Hospitals and Health Systems (CAPH);
d) A facility administered by the federal Veterans Health
Administration and located in California; and,
e) A health care district located in California.
6)Stipulates that a person participating in the program shall
not enter into more than one agreement.
7)Specifies that a person who is currently employed as a
registered nurse or licensed vocational nurse in an eligible
public facility may be eligible to enter into an agreement for
loan assumption under existing law, but is not eligible to
enter into an agreement for loan assumption under this
measure.
8)Authorizes CSAC to issue loan assumption payments, as
specified, upon verification that the applicant has fulfilled
all of the following:
a) The applicant has become a registered nurse or
vocational nurse licensed to practice in California;
b) The applicant is working full time as a clinical
registered nurse or licensed vocational nurse in an
eligible public facility that employs registered nurses or
licensed vocational nurses; and,
c) The applicant has met the requirements of the agreement
and all other pertinent conditions, as specified.
9)States the terms of a loan assumption shall be as follows,
subject to the specific terms of each agreement:
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a) After a program participant has completed one year of
full-time employment, as specified, CSAC shall assume up to
$15,000.00 of the participant's outstanding liability under
one or more of the designated loan programs;
b) After a program participant has completed two years of
full-time employment, as specified, CSAC shall assume up to
an additional $15,000.00 of the participant's outstanding
liability under one or more of the designated loan
programs, for a total loan assumption of up to $30,000.00;
c) After a program participant has completed three years of
full-time employment, as specified, CSAC shall assume up
to an additional $15,000.00 of the participant's
outstanding liability under one or more of the designated
loan programs, for a total loan assumption of up to
$45,000.00; and,
d) After a program participant has completed four years of
full-time employment, as specified, CSAC shall assume up to
an additional $15,000.00 of the participant's outstanding
liability under one or more of the designated loan
programs, for a total loan assumption of up to $60,000.00.
10)Stipulates that if a program participant fails to complete a
minimum of four consecutive years of full time employment as
required under the terms of the agreement, the participant
shall retain full liability for all student loan obligations
remaining after CSAC's assumption of loan liability for the
last year of qualifying clinical registered nursing or
licensed vocational nursing service.
11)Specifies that if a program participant becomes unable to
complete one of the four consecutive years of qualifying
clinical registered nursing or licensed vocational nursing
service due to serious illness, pregnancy, or other natural
causes, the term of the loan assumption agreement shall be
extended for a period not to exceed one year; and, that CSAC
shall make no further payments under the loan assumption
agreement until the applicable work requirements have been
satisfied.
12)Specifies that if a natural disaster prevents a program
participant from completing one of the required years of work
AB 1677
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due to the interruption of employment at the employing
eligible public facility, the term of the loan assumption
agreement shall be extended for the period of time equal to
the period from the interruption of employment at the
employing eligible public facility until the resumption of
employment; and, that CSAC shall make no further payments
under the loan assumption agreement until the applicable
employment requirements have been satisfied.
13)Authorizes CSAC to administer this loan assumption program
and to adopt rules and regulations for the purposes of
administering the program; and, specifies that the rules and
regulations shall include, but need not be limited to,
provisions regarding the period of time during which an
agreement shall remain valid, the reallocation of resources in
light of agreements that are not used by program participants,
the failure, for any reason, of a program participant to
complete a minimum of four consecutive years of qualifying
clinical registered nursing or licensed vocational nursing
service, and the development of projections for funding
purposes.
14) Specifies that if a provision is added to this article and
CSAC deems it necessary to adopt a rule or regulation in order
to implement the new provision, that CSAC shall develop and
adopt that rule or regulation no later than six months after
the operative date of the statute that adds the provision.
15) Requires CSAC, on or before January 31, 2016, and on or
before each January 31 thereafter until, and including January
31, 2020, to report annually to the Legislature regarding both
the following, on the basis of sex, age, and ethnicity:
a) The total number of program participants and the type of
program of professional preparation they are attending or
have attended; and,
b) The number of participants who complete one, two, three,
or four years of qualifying clinical registered nursing or
licensed vocational nursing service, respectively.
16)Requires the Legislative Analyst's Office, on or before May
1, 2019, to submit a report to the Legislature that includes
the finding and recommendations of the Legislative Analyst
with respect to the efficacy of the program.
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17)Specifies that the required reports shall be submitted
pursuant to existing law.
18)Authorizes CSAC, when selecting participants in this program,
to grant priority to applicants who, in the determination of
CSAC, are included in any of the following categories:
a) Persons who possess a baccalaureate degree at the time
of initial application;
b) Persons who are enrolled in an accelerated program of
professional preparation for licensing as a registered
nurse or vocational nurse in California; and,
c) Persons who are recipients of federally subsidized
student loans or other need-based student loans.
19)Specifies that in any fiscal year, CSAC shall award no more
than the number of warrants that are authorized in the annual
Budget Act for that fiscal year for the assumption of loans.
20)Appropriates 48 million dollars from the GF to CSAC to be
expended for the purposes of CSAC issuing loan assumption
awards beginning with the 2015-16 fiscal year (FY) to the
2021-22 FY, inclusive, as follows:
a) For the 2015-16 FY, CSAC may expend up to three million
dollars to award up to 200 awards as specified;
b) For the 2016-17 FY, CSAC may expend up to six million
dollars to award up to 400 awards as specified;
c) For the 2017-18 FY, CSAC may expend up to nine million
dollars to award up to 600 awards as specified;
d) For the 2018-19 FY, CSAC may expend up to 12 million
dollars to award up to 800 awards as specified;
e) For the 2019-20 FY, CSAC may expend up to nine million
dollars to award up to 600 awards as specified;
f) For the 2020-21 FY, CSAC may expend up to six million
dollars to award up to 400 awards as specified; and,
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g) For the 2021-22 FY, CSAC may expend up to three million
dollars to award up to 200 awards.
21) Sunsets on July 1, 2022, and, as of January 1, 2023, is
repealed, unless a later enacted statute, that becomes
operative on or before January 1, 2023, deletes or extends the
dates on which it becomes inoperative and is repealed.
EXISTING LAW :
1)Establishes CSAC as the primary state agency to administer
state-authorized student financial aid programs available to
eligible students attending all eligible segments of
postsecondary education (Education Code � 69510, et seq.).
2)Authorizes CSAC to administer the State Nursing Assumption
Program of Loans for Education (SNAPLE); lists specific
eligibility requirements for participation in SNAPLE; and,
specifies the terms of the loan assumptions granted (EC �
70100, et seq.).
FISCAL EFFECT : Unknown beyond the 48 million dollars
appropriated from the GF to CSAC to administer the loan
assumption program.
COMMENTS : Background . According to CSAC, recognizing the
growing need for new faculty members in the nursing field at
California's colleges and universities, the Legislature found
that "the rising costs of higher education, coupled with a shift
in available financial aid from scholarships and grants to
loans, made loan repayment options an important consideration in
a student's decision to pursue a graduate degree in nursing
education." With that in mind, Senate Bill 63 (Senate Budget
and Fiscal Review Committee, Chapter 73, Statutes of 2005),
enacted SNAPLE.
This program authorized CSAC to make payments for student loans
on behalf of program participants who took out those loans to
finance their graduate nursing education. The loan payments
would begin only after those program participants obtained their
graduate nursing degrees and after they complete an academic
year of full-time, or the part-time equivalent, teaching nursing
in an accredited California college or university. The students
were obligated to teach for three consecutive academic years of
full-time teaching, or five consecutive years of part-time
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teaching, to receive up to $25,000 in loan payments. CSAC was
required to select participants in the program from nominees
submitted by accredited colleges and universities.
SNAPLE went into effect on July 19, 2005 with a January 1, 2013
sunset; the 2012-13 Budget Act did not authorize any new SNAPLE
allocations for applicants.
Nursing shortage . The U. S. Department of Health and Human
Services has projected that by 2015, 400,000 new nurses will be
needed just to fill the vacancies left by retirees.
Additionally, by 2020, the U. S. Bureau of Labor Statistics
predicts that it will be short between 800,000 and one million
new and replacement nurses, including being short close to
117,000 in California alone.
According to a recent study by the University of California, San
Francisco, the supply and demand for nurses in California varies
by region. The report found that the Inland Empire region is
experiencing the hardest difficulties in their ability to hire
trained nurses. However, the San Francisco Bay region is
expected to have the largest regional decrease in overall hiring
of trained nurses. Additionally, the report found that many new
nurses in California are finding it more and more challenging to
find hospital nursing jobs.
Purpose of the bill . According to the author, veterans return
from duty with various needs. Two of the more prevalent needs
are access to quality medical care and jobs. The author states,
"In California, we have veterans' homes with nursing shortages
and, in 2012 California had an unemployment rate for veterans
that was 8.9%. With a population of more than 1.7 million
veterans in California, we need to increase our efforts to
provide quality medical care and jobs for our servicemen."
AB 1677 creates a loan assumption program for licensed
registered and vocational nurses who commit to working for four
years in a state hospital operated by the DSH, a state operated
veterans' home, a public hospital that is a member of CAPH,
and/or a California facility operated by the federal Veterans
Health Administration.
Eligible health institutions . It is presently unclear as to the
exact numbers of nursing shortfalls faced by the eligible health
institutions (that licensed registered and vocational nurses
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would have to commit to four years of full time employment in
order to participate in the loan assumption program), but
anecdotally, these institutions, which are located throughout
the entire state, including rural areas, are experiencing some
of the highest demands for licensed registered and vocational
nurses.
This measure would allow up to 800 participants in the loan
assumption program.
Related legislation . AB 697 (Gomez of 2013), which died in the
Assembly Health Committee, was similar in nature to this
measure.
SB 63 (Senate Budget and Fiscal Review Committee), Chapter 73,
Statutes of 2005, as described in the "background" section of
this analysis.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Jeanice Warden / HIGHER ED. / (916)
319-3960