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UNOFFICIAL COPY 26 RS BR 2482
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AN ACT relating to medical school loan repayment. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 164 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) The General Assembly hereby establishes the physician recruitment and retention 5
program to encourage Kentucky medical school students to stay in Kentucky to 6
practice medicine upon graduation. 7
(2) As used in this section: 8
(a) "Authority" means the Kentucky Higher Education Assistance Authority; 9
(b) "Eligible medical institution" means a nonprofit medical institution located 10
in Kentucky; 11
(c) "Eligible medical school" means a public medical school in Kentucky; 12
(d) "Eligible medical student" means a student who: 13
1. Is a citizen or permanent resident of the United States; 14
2. Is a Kentucky resident, as determined by the participating institution 15
in accordance with criteria established by the Council on 16
Postsecondary Education for the purposes of admission and tuition 17
assessment; 18
3. Has graduated or is graduating from an eligible medical school; and 19
4. Meets any other criteria established in administrative regulations 20
promulgated by the authority; and 21
(e) "Qualified medical service" means full -time employment of forty (40) or 22
more hours per week as a physici an providing medical services at an 23
eligible medical institution. 24
(3) The authority may, to the extent of appropriations and other funds available to it 25
pursuant to subsection (8) of this section, award medical school loan interest 26
amounts to an eligible m edical student for the first five (5) years after medical 27
UNOFFICIAL COPY 26 RS BR 2482
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school completion and award a sum of twenty percent (20%) of the loan principal 1
and interest amounts for each of the subsequent five (5) years in accordance with 2
subsection (4) of this section. Each award shall be evidenced by a promissory 3
note that requires repayment or cancellation pursuant to subsection (5) of this 4
section. 5
(4) Physician recruitment and retention program awards shall be provided to eligible 6
medical students who agree to qualified medical service. To the extent funds are 7
available, the authority shall provide eligible medical students a maximum award, 8
not to exceed the medical student's total cost of attendance minus other financial 9
assistance received or expected to be received by the medical student during 10
medical school. 11
(5) (a) The authority shall disburse awards to eligible medical students who agree 12
to render qualified medical service and provide documentation of such 13
service by the eligible medical institution. 14
(b) An award sh all not be provided or a promissory note cancellation shall not 15
be granted to any person who is in default on any obligation to the authority 16
under any program administered by the authority pursuant to KRS 164.740 17
to 164.7870 until financial obligations to the authority are satisfied, except 18
that ineligibility for this reason may be waived by the authority for cause. 19
(c) Recipients shall render ten (10) years of qualified medical service. 20
(d) If the recipient of an award fails to render qualified medical se rvice and the 21
failure is not temporarily waived for cause by the authority, the recipient 22
shall immediately become liable to the authority for repayment of the sum 23
of all outstanding promissory notes and interest accrued. Persons liable for 24
repayment of aw ards under this paragraph shall be liable for interest 25
accruing from the date on which the recipient ceases to render qualified 26
medical service. 27
UNOFFICIAL COPY 26 RS BR 2482
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(e) The authority shall establish, by administrative regulation promulgated in 1
accordance with KRS Chapter 13A, the terms and conditions, cancellation, 2
and repayment of awards, including but not limited to the selection criteria, 3
eligibility for renewal, amount of payments, deferments, the rate of 4
repayment, and the interest rate thereon. 5
(f) Notwithstanding any ot her statute to the contrary, the maximum interest 6
rate applicable to repayment of a promissory note under this section shall be 7
eight percent (8%) per annum, except that if a judgment is rendered to 8
recover payment, the judgment shall bear interest at the rate of five percent 9
(5%) greater than the rate actually charged on the promissory note. 10
(6) A repayment obligation imposed by this section shall not be voidable by reason of 11
the age of the recipient at the time of receiving the award. 12
(7) Failure to meet repayment obligations imposed by this section may be cause for 13
the revocation of a person's medical license, subject to the discretion of the 14
Kentucky Board of Medical Licensure. 15
(8) All moneys repaid to the authority under this section shall be added to t he 16
appropriations made for purposes of this section, and the funds and unobligated 17
appropriations shall not lapse. 18
(9) The authority may execute appropriate contracts and promissory notes for 19
administering this section. 20
(10) Notwithstanding any other statu te to the contrary, if available funds are 21
insufficient for all requested awards for eligible medical students during any 22
fiscal year, the authority shall give priority consideration to eligible medical 23
students who previously received awards under this section. 24
(11) The authority shall submit a report on the number of physician recruitment and 25
retention program awards provided in each fiscal year, the eligible medical 26
institutions at which recipients are employed, recipient retention rates, total 27
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number o f applications, and recruitment strategies to the Legislative Research 1
Commission for referral to the Interim Joint Committees on Education and 2
Health Services by December 1 of each year. 3