2.__Application process.__Application for a loan must be made directly to the authority.

3.__Eligibility.__The following persons are eligible to participate in the program:

A.__A student applicant for a loan under subsection 1 who meets eligibility criteria established by rule of the authority, which at a minimum must require:

(1)__That the student be a resident;

(2)__That the student be enrolled in a professional nursing degree program; and

(3)__That priority be given to a student:

(a)__Who previously received a loan pursuant to this section;

(b)__Who exhibits financial need; and

(c)__Who demonstrates an interest in serving in the State; and

B.__An applicant for a loan repayment agreement under subsection 1 who meets eligibility criteria established by rule of the authority, which at a minimum must require:

(1)__That the applicant has an active professional nursing license in the State and is a resident;

(2)__That the applicant have outstanding nursing education loans; and

(3)__That the applicant be willing to serve in the State.

4.__Maximum amount.__The maximum loan or loan repayment amount available to each participant is $20,000 per year.

5.__Loan agreement; forgiveness.__A student receiving a loan under subsection 3, paragraph A shall enter into a loan agreement as set out in this subsection.

A.__Upon completion of professional education, the loan recipient shall repay the loan in accordance with this paragraph.

(1)__A loan recipient who does not obtain loan forgiveness pursuant to subparagraph (2) shall repay the entire principal of the loan, plus simple interest, at a rate to be determined by rule of the authority.

Interest does not begin to accrue until the loan recipient completes nursing education.

(2)__A loan recipient who, upon conclusion of the recipient's professional nursing education, including any fellowships, elects to serve as a professional nurse in the State is forgiven 25% of the original outstanding indebtedness for each calendar year served as a nurse.

B.__Loans must be repaid over a term no longer than 10 years, except that the chief executive officer may extend an individual's term as necessary to ensure repayment of the loan.__Repayment must commence when the loan recipient completes, withdraws from or otherwise fails to continue nursing education.

6.__Loan repayment agreement.__An applicant under subsection 3, paragraph B shall enter into a loan repayment agreement as set out in this subsection.

A.__An applicant will receive payment from the authority on the applicant's outstanding indebtedness for nursing education at a rate of $20,000 per calendar year of service as long as the applicant continues to serve as a practitioner of nursing in the State.

7.__Default.__A loan recipient under the program who agrees to practice in the State and who fails to complete the period of service required to pay off the loan is liable to the authority for an amount equal to the sum of the total amount paid by or on behalf of the authority to or on behalf of the recipient under the contract plus interest at a rate determined by the authority, minus credit for practice in the State, which will be awarded pursuant to subsection 5, paragraph A, subparagraph (2) for each calendar year served.__Exceptions may be made by the authority in accordance with subsection 8.

A loan recipient under the program may be granted permission to default without penalty from an agreement to serve in the State by petitioning the authority.__Grounds for permission to default without penalty include, but are not limited to, catastrophic circumstances that prevent the recipient from remaining in the State for the required period of time.__A recipient who has been granted permission to default may receive credit for the number of calendar months served, notwithstanding subsection 5, paragraph A, subparagraph (2), and the remaining financial obligation plus interest must be repaid to the authority in cash under the terms of the original agreement.

8.__Deferments.__Deferments on the repayment of a loan under the program may be granted for causes established by rule of the authority.__Interest at a rate to be determined by rule of the authority must be assessed during the deferment.__The student's total debt to the authority, including principal and interest, must be repaid either through service in the State or cash payments.__The chief executive officer shall make determinations of deferment on a case-by-case basis.__The decision of the chief executive officer is final.

§12153. Nonlapsing fund

A nonlapsing, interest-earning, revolving fund under the jurisdiction of the authority is created to carry out the purposes of this chapter.__Any unexpended balance in the fund carries over for continued use under this chapter.__The authority may receive, invest and expend, on behalf of the fund, money from gifts, grants, bequests and donations in addition to money appropriated or allocated by the State.__Loan repayments under this chapter or other repayments to the authority must be invested by the authority, as provided by law, with the earned income to be added to the fund.__Money received by the authority on behalf of the fund must be used for the designated purpose of the program.

§12154. Advisory Committee on Nursing Education

1.__Committee.__The Advisory Committee on Nursing Education, established pursuant to Title 5, section 12004-I, subsection 7-D, shall assist the chief executive officer in evaluating and improving the program.

2.__Members.__The Advisory Committee on Nursing Education consists of:

A.__Eight voting members appointed as follows:

(1)__One member, appointed by the President of the Senate, who represents a major statewide organization of consumers dedicated to the cause of affordable health care;

(2)__One member, appointed by the President of the Senate, who represents the State Board of Nursing;

(3)__One Senator appointed by the President of the Senate;

(4)__One member, appointed by the Speaker of the House, who represents a major statewide organization representing the majority of nurses in the State;

(5)__One member of the House of Representatives, appointed by the Speaker of the House; and

(6)__Three members appointed by the Governor from a list of candidates submitted to the Governor by a major statewide organization representing the majority of nurses in the State.__Each of these 3 members must represent a school of nursing at one of the following:

(a)__The University of Maine System;

(b)__The Maine Vocational Technical College System; and

(c)__Private postsecondary institutions in this State; and

B.__One nonvoting member representing the authority, appointed by the Speaker of the House.

3.__Vacancies.__In the case of a vacancy or resignation, an appointment must be made as for a new member to fill the vacancy until the expiration of the term.

4.__Terms.__The term of office for all appointees is 2 years.

§12155. Rules

The authority shall establish rules necessary to implement this chapter.__Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.

Sec. 3. Appropriation. The following funds are appropriated from the General Fund to carry out the purposes of this Act.

2002-03

FINANCE AUTHORITY OF MAINE

Nursing Education Loan Program

All Other $800,000

Provides funds for loans to Maine residents enrolled in a professional nursing degree program to repay loan agreements for nurses practicing in Maine from amounts available in the fund created under the Maine Revised Statutes, Title 20-A, section 12153. Money in the fund may not lapse but must be carried forward.

SUMMARY

This bill establishes the Nursing Education Loan Program. Under the program, the Finance Authority of Maine will award loans to Maine residents who have been accepted into a professional nursing degree program. The loans are available to persons seeking initial degrees or furthering their nursing education and seeking advanced nursing degrees. If, upon completing nursing education, a loan recipient elects to practice nursing in the State, the loan recipient may be forgiven a portion of the loan for each calendar year worked.

This bill also establishes a nonlapsing fund that may be used to make the loan.