A1151

ASSEMBLY, No. 1151

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblymen COHEN and MORAN

An Act establishing a program of community service in exchange for the redemption of the loans of certain pharmacists and supplementing Title 18A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

"Eligible student loan expenses" means the cumulative total of the annual student loans covering the cost of attendance at a school or college of pharmacy approved by the Board of Pharmacy of the State of New Jersey. Interest paid or due on student loans that an applicant has taken out for use in paying the costs of undergraduate pharmacist education shall be considered eligible for reimbursement under the program. The Executive Director of Student Assistance Programs may establish a limit on the total amount of student loans which may be redeemed for participants under the program, provided that the total redemption of student loans does not exceed $70,000.

"Exective Director" or "director" means the Excutive Director of the Office of Student Assistance.

"Office of Student Assistance" or "office" means the Office of Student Assistance as constituted in, but not of, the Department of the Treasury pursuant to section 17 of the "Higher Education Restructuring Act of 1994," P.L.1994, c.48 (C.18A:3B-17).

"Pharmacist Loan Redemption Program" or "program" means a program which provides for the redemption of the eligible student loan expenses of its participants.

"Undergraduate pharmacist education" means the period of time between entry into a school or college of pharmacy and the award of a B.S. in pharmacy (B.S.) or a doctorate in pharmacy (Pharm. D.).

"Underserved area" means an urban or rural area, which need not conform to the geographic boundaries of a political subdivision within the State, but which shall be defined in terms of census tracts, if possible, which is a rational area for the delivery of pharmacy services and which has a pharmacist manpower shortage as determined by the Commissioner of Health; or a population group which the commissioner determines has a pharmacist manpower shortage; or a public or nonprofit private health care facility or other facility which is so designated.

2. There is established a Pharmacist Loan Redemption Program within the Office of Student Assistance. The program shall provide for the redemption of a portion of the eligible student loan expenses of program participants for each year of service in an underserved area of the State as designated by the Commissioner of Health.

3. To be eligible to participate in the Pharmacist Loan Redemption Program, an applicant shall:

a. Be a resident of the State;

b. Be a graduate of a school or college of pharmacy approved by the Board of Pharmacy of the State of New Jersey for the purpose of registration and receive a recommendation from the school's pharmacy staff concerning participation in the loan redemption program; and

c. Agree to practice pharmacy in an underserved area of the State.

4. The Commissioner of Health, after consultation with the Commissioner of Corrections and the Commissioner of Human Services, shall designate and establish a ranking of underserved areas of the State. The criteria used by the Commissioner of Health in designating underserved areas shall include, but not be limited to:

a. the ratio of the supply of pharmacists to the population under consideration, with a goal of meeting current standards for pharmacist to population ratios;

b. the financial resources of the population under consideration;

c. the population's access to pharmacy services; and

d. appropriate pharmacist staffing ratios in State, county, municipal and private nonprofit health care facilities.

The commissioner shall annually transmit the list of underserved areas and the number of positions needed in each area to the executive director.

5. A pharmacy student who is eligible and interested in participating in the loan redemption program shall sign a nonbinding agreement with the Office of Student Assistance upon completion of the final year of undergraduate pharmacist training. At the end of the final year of undergraduate pharmacist training, the applicant shall sign a contractual agreement with the office. The agreement shall specify the applicant's length of required service and the total amount of eligible student loan expenses to be redeemed by the State in return for service. The agreement shall also stipulate that the applicant has knowledge of and agrees to the six-month probationary period required prior to final acceptance into the program pursuant to section 7 of this act.

6. Maximum redemption of loans under the loan redemption program shall amount to 15% of principal and interest of eligible student loan expenses in return for one full year of service in a designated underserved area of the State, an additional 20% for a second full year of service, an additional 25% for a third full year of service and an additional 40% for a fourth full year of service for a total redemption of eligible student loan expenses of up to, but not to exceed, $70,000. Service in an underserved area shall begin immediately upon completion of undergraduate pharmacist training or residency training if such training is required of a pharmacist.

7. Each program participant shall serve a six-month probationary period upon initial placement in a service site within the underserved area. During that period, the pharmacy staff of the service site shall evaluate the suitability of the placement for the participant. At the end of the probationary period, the pharmacy staff shall recommend the continuation of the program participant's present placement, a change in placement, or its determination that the participant is an unsuitable candidate for the loan redemption program. If the pharmacy staff of the service site recommends a change in placement, then the executive director shall place the program participant in an alternate placement within an underserved area. If the pharmacy staff determines that the program participant is not a suitable candidate for the program, then the executive director shall take this recommendation into consideration in regard to the participant's final acceptance into the program. No loan redemption payment shall be made during the six-month probationary period; however, a program participant shall receive credit for this six-month period in calculating the first year of required service under the loan redemption contract.

8. The executive director, in consultation with the Commissioner of Health, shall match program participants to underserved areas based upon the ranking of the underserved areas established by the commissioner and on the basis of participant preference.

9. The executive director shall annually determine the number of program positions available on the basis of the need for pharmacists in underserved areas of the State as determined by the Commissioner of Health and the State and federal funds available for the program. Once the number of program positions has been determined, the executive director shall select the program participants from among those students who have applied to the program and who meet the criteria established pursuant to section 3 of this act. In selecting program participants, the executive director shall accord priority to applicants in the following manner:

a. First, to any applicant who is completing a fourth, third or second year of a loan redemption contract;

b. Second, to any applicant whose residence in the State at the time of entry into post secondary education was within an underserved area; and

c. Third, to any applicant according to the severity of the pharmacist shortage in the area selected by the applicant.

In the event that there are more applicants who have the same priority than there are program positions, the executive director shall select participants by means of a lottery or other form of random selection.

10. A pharmacist who has previously entered into a contract with the office may nullify the agreement by notifying the office in writing and assuming full responsibility for repayment of principal and interest at the appropriate market rate of the full amount of the eligible student loan expenses or that portion of the loan which has not been redeemed by the State in return for partial fulfillment of the contract. In no event shall service in an underserved area for less than the full calendar year of each period of service entitle the participant to any benefits under the loan redemption program. A participant seeking to nullify the contract shall be required to pay the unredeemed portion of indebtedness in not more than 10 years following termination of the contract minus the years of service already served under the contract.

11. In case of a program participant's death or total or permanent disability, the executive director shall nullify the service obligation of the student, thereby terminating the student's obligation to repay the unpaid balance of the redeemable portion of the loan and the accrued interest thereon; or where continued enforcement of the contract may result in extreme hardship, the executive director may nullify or suspend the service obligation of the student.

12. In case of a program participant's conviction of a felony or misdemeanor or an act of gross negligence in the performance of service obligations or where the license to practice has been suspended or revoked, the executive director shall have the authority to terminate the participant's service in the program and request repayment of the outstanding debt.

13. Prior to repayment of the annual amount eligible for redemption, each program participant shall report to the office in such manner and form as it shall prescribe, information on the participant's performance of service in the underserved area as required under the contract.

14. The executive director and the Commissioner of Health shall jointly establish a procedure for the recruitment of program applicants at schools and colleges of pharmacy and health centers. The procedure shall provide for the participation of the pharmacy staff of those facilities in the selection of appropriate applicants for the program.

15. The office shall annually apply for any federal funds and shall make use of any State funds which may be available to implement the provisions of this act.

16. The executive director shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as may be necessary to implement the provisions of this act.

17. This act shall take effect immediately.

STATEMENT

This bill establishes a Pharmacist Loan Redemption Program within the Office of Student Assistance, now in, but not of, the Department of the Treasury.. The program is to provide for the redemption of a portion of the eligible student loan expenses of qualified pharmacy students for each year of service in an underserved area of the State as designated by the Commissioner of Health. The maximum redemption of loans under the program shall be 15% of principal and interest of eligible student loan expenses in return for one full year of service in a designated underserved area of the State, an additional 20% for a second full year of service, an additional 40% for a fourth full year of service, for a total redemption of eligible student loan expenses of up to, but not to exceed, $70,000. The bill directs the Office of Student Assistance to annually apply to the federal government for any federal funds which may be available to implement the loan redemption program and to make use of available State funds.

Establishes a community service/loan redemption program for pharmacists.