A323

An Act concerning loan redemption for certain veterinarians and supplementing chapter 71C of Title 18A of the New Jersey Statutes.

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

1. a. There is established a Veterinary Medicine Loan Redemption Program within the Higher Education Student Assistance Authority to provide for the redemption of eligible qualifying loan expenses of program participants who work in the State for five years of service at an approved site in the State.

b. The Secretary of Agriculture, in consultation with the New Jersey Horse Council, the New Jersey Association of Equine Practitioners, and the New Jersey Farm Bureau, shall annually establish a list of State designated veterinary underserved areas. The Secretary of Agriculture shall transmit the list of State designated veterinary underserved areas to the authority by January 1 of each year, except that the first list shall be transmitted not later than 90 days after the effective date of this act.

2. As used in this act:

"Approved site" means a site located within a State designated veterinary underserved area or within five miles of a State designated veterinary underserved area.

"Authority" means the Higher Education Student Assistance Authority.

"Eligible qualifying loan expenses" means the cumulative outstanding balance of student loans covering the cost of attendance in an undergraduate degree program of an institution of higher education and a graduate degree program of an accredited school of veterinary medicine, including the following: tuition; educational expenses and fees; and room and board. Interest paid or due on qualifying loans that an applicant has taken out for use in paying the cost of attendance in an undergraduate degree program of an institution of higher education and a graduate degree program of an accredited school of veterinary medicine shall be considered an eligible qualifying loan expense for reimbursement under the program.

"Executive director" means the executive director of the Higher Education Student Assistance Authority.

“Full-time” means a minimum of 40 hours per week for a minimum of 45 weeks per year.

“Half-time” means a minimum of 20 hours per week, not to exceed 39 hours per week, for a minimum of 45 weeks per year.

"Loan redemption benefits" mean any benefits provided to a program participant under the Veterinary Medicine Loan Redemption Program established pursuant to this act.

"Loan redemption program" or "program" means the Veterinary Medicine Loan Redemption Program established pursuant to this act.

"Program participant" means a veterinarian who contracts with the authority to engage in the practice of veterinary medicine, a majority of which activity is dedicated to the protection and enhancement of large animal health and productivity, at an approved site in exchange for the redemption of eligible qualifying loan expenses provided under the program.

"State designated veterinary underserved area" means a geographic area designated in this State by the Secretary of Agriculture pursuant to subsection b. of section 1 of this act, on the basis of a large animal veterinarian shortage affecting the area.

"Total and permanent disability" means a physical or mental disability that is expected to continue indefinitely or result in death and renders a participant in the program unable to perform that person's service obligation, as determined by the executive director or the executive director’s designee.

3. To be eligible to participate in the program, a program participant shall:

a. be a resident of the State;

b. be a graduate of an accredited school of veterinary medicine approved by the State Board of Veterinary Medical Examiners for the purpose of licensure and receive a recommendation from the school’s veterinary medicine staff concerning participation in the loan redemption program;

c. be a veterinarian licensed to practice in this State; and

d. agree to practice at an approved site.

Nothing in this section shall prohibit a program participant from initiating the program’s application process and identifying and committing to employment at an approved site prior to the establishment of State residency or being issued a State veterinary license.

4. a. In administering the program, the authority or its designated agent shall contract only with a veterinarian.

b. The contract shall require a program participant to serve at least a five-year period at an approved site in the full-time or half-time service of a veterinary medicine practice, of which a majority of the service at that practice is dedicated to the protection and enhancement of large animal health and productivity.

c. The contract shall also specify the applicant's dates of required service, the total amount of eligible qualifying loan expenses to be redeemed by the State in return for service, and the schedule of payments for the term of the contract.

5. a. Maximum redemption of a loan under the loan redemption program shall be 100 percent of the eligible qualifying loan expenses for full-time service and 50 percent of the eligible qualifying loan expenses for half-time service in return for five years of service at an approved site , except that the amount of eligible qualifying expenses which may be redeemed for a participant under the program shall not exceed $20,000 in any year for full-time service or $10,000 in any year for half-time service. No amount of eligible qualifying loan expenses shall be redeemed for services performed for less than a full year.

b. The principal and interest that are eligible qualifying loan expenses shall be reimbursed as follows:

(1) with respect to full-time service

(a) first year of service, 12 percent of principal and interest,

(b) second year of service, 20 percent of principal and interest,

(d) fourth year of service, 24 percent of principal and interest, and

(e) fifth year of service, 24 percent of principal and interest; and

(2) with respect to half-time service

(a) first year of service, six percent of principal and interest,

(b) second year of service, 10 percent of principal and interest,

(d) fourth year of service, 12 percent of principal and interest, and

(e) fifth year of service, 12 percent of principal and interest.

6. The executive director or the executive director’s designee, in consultation with the Secretary of Agriculture, shall match program participants to State designated veterinary underserved areas. Nothing in this section shall prohibit a program applicant or participant from identifying an approved site for consideration and designation as a State designated veterinary underserved area under the program.

7. The executive director or the executive director’s designee shall select the program participants from among those applicants who meet the eligibility criteria established pursuant to section 3 of this act, subject to available funds and available approved sites. The executive director or the executive director’s designee shall accord priority to applicants in the following manner:

a. first, to any applicant who is willing to fill openings at an approved site with the most significant veterinary medicine shortages;

b. second, to any applicant whose residence in the State at the time of initiating application was within a State designated veterinary underserved area or within five miles of a State designated veterinary underserved area; and

c. third, to any applicant who graduated from a high school or institution of higher education located in New Jersey.

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

8. a. A program participant, as a condition of participation, shall be required to adhere to performance standards established by the executive director or the executive director’s designee.

b. The standards shall include, but not be limited to, requirements that a participant:

(1) maintain residency in the State;

(2) maintain a license or certification to practice veterinary medicine in the State;

(3) remain current with payments on student loans;

(4) enter into a mutually acceptable contract with an approved site;

(5) maintain satisfactory performance of services rendered at an approved site; and

(6) report to the authority or its designee, on a form and in a manner prescribed by the authority or its designee, on the program participant's performance of services rendered at an approved site prior to repayment of the annual amount eligible for redemption.

9. A program participant who has previously entered into a contract with the authority may nullify the agreement by notifying the authority in writing and reassuming full responsibility for the remaining outstanding balance of the loan debt. In no event shall service at an approved site for less than the full calendar year of each period of service entitle the program participant to any benefits under the program. A program participant seeking to nullify the contract before completing the fifth full year of service shall be required to pay 50 percent of the redeemed portion of indebtedness in not more than one year following nullification of the agreement.

10. In the case of a program participant's death or total and permanent disability, the authority or its designee shall nullify the service obligation of the program participant. The nullification shall terminate the authority's obligations under the loan redemption contract. In the event of a program participant's death or total and permanent disability, the authority shall not require repayment of the prior redeemed portion of indebtedness.

11. A person who knowingly or willfully furnishes any false or misleading information for the purpose of receiving loan redemption benefits under the program is guilty of a crime of the fourth degree.

12. a. The executive director or the executive director’s designee is authorized to terminate the program participant's service in the program in the case of:

(1) a program participant's conviction of a crime or an act of gross negligence in the performance of service obligations;

(2) suspension or revocation of the program participant's license or certification to practice; or

(3) a program participant's breach of the performance standards established pursuant to section 8 of this act.

b. A program participant who fails to repay an amount due the authority under the program may be subject to actions initiated by the authority or its designee, which may include, but are not limited to:

(1) recovery of the amount due by an action brought in a court of competent jurisdiction or through the offset of State tax refunds or rebates;

(2) making this information available to credit reporting agencies;

(3) exclusion from eligibility for any student assistance benefits administered by the authority;

(4) action by the federal government, to the extent that any loan redemption benefits are federally funded, to recover any amount due it as permitted by federal law.

c. In any action brought by the authority or its designee in a court of competent jurisdiction pursuant to subsection b. of this section , the program participant shall be liable for:

(1) the debt incurred;

(2) interest on the debt at the maximum legal prevailing rate as determined by the United States Treasurer; and

(3) the administrative and court costs associated with collection of the debt.

13. A veterinarian who is participating in the federally administered Veterinary Medicine Loan Repayment Program, established pursuant to section 1415a of the National Veterinary Medical Services Act (7 U.S.C. s.3151a), shall not be eligible to participate simultaneously in the Veterinary Medicine Loan Redemption Program established pursuant to this act.

14. a. In Fiscal Year 2023 and each fiscal year thereafter, there is appropriated from the General Fund to the Higher Education Student Assistance Authority the sum of $500,000 to effectuate the purposes of this act.

b. The Higher Education Student Assistance Authority shall accept and use exclusively for the program any donation of monies from private or nonprofit organizations.

15. This act shall take effect immediately and shall first apply to Fiscal Year 2022 , except that the Higher Education Student Assistance Authority and the Secretary of Agriculture may take such anticipatory administrative action in advance as shall be necessary for the implementation of the act.

STATEMENT

This bill establishes a Veterinary Medicine Loan Redemption Program to address the current large animal veterinarian shortage in this State. The program would be administered by the Higher Education Student Assistance Authority (HESAA).

Specifically, the bill provides for redemption of eligible qualifying loan expenses for veterinarians who work for no less than five years at an approved site. The bill defines “approved site” as a site located within a State designated veterinary underserved area or within five miles of a State designated veterinary underserved area. The bill defines “State designated veterinary underserved area” as a geographic area designated in the State by the Secretary of Agriculture on the basis of a large animal veterinarian shortage affecting the area. The bill directs the Secretary of Agriculture, in consultation with the New Jersey Horse Council, the New Jersey Association of Equine Practitioners, and the New Jersey Farm Bureau, to annually establish a list of State designated veterinary underserved areas and transmit that list to HESAA.

Program participants would be required to:

1) be State residents;

2) have graduated from a veterinary school approved by the State Board of Veterinary Medical Examiners for the purpose of licensure and receive a recommendation from the school’s veterinary medicine staff concerning participation in the loan redemption program;

3) be a veterinarian licensed to practice in this State; and

4) agree to practice at an approved site.

In return for this commitment, the program participant’s eligible qualifying loan expenses would be reimbursed. The maximum loan redemption under the bill is established at 100 percent of the eligible qualifying loan expenses for full-time service and 50 percent of the eligible qualifying loan expenses for half-time service in return for five years of service at an approved site, except that the amount of qualifying loans which may be redeemed for a participant under the program cannot not exceed $20,000 in any year for full-time service or $10,000 in any year for half-time service. No amount of eligible qualifying loan expenses would be redeemed for services performed for less than a full year.

The loan principal and interest would be reimbursed as follows with respect to full-time service:

(1) first year of service, 12 percent of principal and interest;

(2) second year of service, 20 percent of principal and interest;

(3) third year of service, 20 percent of principal and interest;

(4) fourth year of service, 24 percent of principal and interest; and

(5) fifth year of service, 24 percent of principal and interest.

The loan principal and interest would be reimbursed as follows with respect to half-time service:

(1) first year of service, six percent of principal and interest;

(2) second year of service, 10 percent of principal and interest;

(3) third year of service, 10 percent of principal and interest;

(4) fourth year of service, 12 percent of principal and interest; and

(5) fifth year of service, 12 percent of principal and interest.

The bill provides that in the case of a program participant's death or total and permanent disability, HESAA would nullify the service obligation of the program participant. The nullification would also terminate HESAA's obligations under the loan redemption contract. In the event of a program participant's death or total and permanent disability, HESAA would not require repayment of the prior redeemed portion of indebtedness.

The bill provides that in Fiscal Year 2023 and each fiscal year thereafter, $500,000 would be appropriated from the General Fund to HESAA for the Veterinary Medicine Loan Redemption Program.