Legislature(2003 - 2004)

05/14/2003 08:50 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 211                                                                                                            
     An Act relating to a student  loan repayment program for                                                                   
     nurses, and amending the  duties of the Board of Nursing                                                                   
     that  relate  to  this  program  and  providing  for  an                                                                   
     effective date.                                                                                                            
REPRESENTATIVE  PEGGY WILSON  explained that  Alaska and  the                                                                   
nation are experiencing a severe  shortage of nurses.  HB 211                                                                   
would establish  the Alaska Nurse Recruitment  Loan Repayment                                                                   
Program, which could help to change  that.  The program would                                                                   
offer up to $2,000 per year, not  to exceed $10,000 total for                                                                   
nurses to repay nursing loans.   Hopefully the incentive will                                                                   
attract new  nurses to  the State  and encourage Alaskans  to                                                                   
pursue nursing vocations here in Alaska.                                                                                        
In 2002,  the Alaska Colleagues  in Caring, in  collaboration                                                                   
with  the  Alaska  Hospital  and   Nursing  Home  Association                                                                   
(AHNHA),  surveyed  facilities  in Alaska  regarding  nursing                                                                   
workforce  needs.   Results  showed  that vacancy  rates  for                                                                   
Registered  Nurses (RN) had  increased from  5.7% in  2000 to                                                                   
11.5% in 2002,  with increasing vacancy rates  projected into                                                                   
the  future.    Facilities in  western  and  northern  Alaska                                                                   
reported  a  vacancy  rate  of  over  20%  and  according  to                                                                   
information  from other  sources,  the vacancy  rate in  some                                                                   
remote areas of Alaska is as high as 35 percent.                                                                                
Representative  Wilson  stated   that  to  qualify  for  loan                                                                   
reimbursement,  the individual  must be hired  as a  nurse in                                                                   
Alaska on or after  July 1, 2003, be licensed  to practice as                                                                   
a nurse  in Alaska, work as  a nurse in the  State throughout                                                                   
the loan repayment  period, and have outstanding  educational                                                                   
loans  from a  recognized  lending institution.    Additional                                                                   
eligibility  criteria  and guidelines  for  the loan  program                                                                   
would be set in regulations adopted  by the Board of Nursing,                                                                   
in consultation  with the Alaska Commission  on Postsecondary                                                                   
Education.   That  could include  guidelines on  establishing                                                                   
priorities for  participation in  the loan repayment  program                                                                   
if  funding for  the program  was  not adequate  to meet  the                                                                   
need.   The guidelines  may include  determinations  based on                                                                   
areas  of  the  State and  nursing  specialties  affected  by                                                                   
Representative Wilson commented  that funding for the program                                                                   
might  be  appropriated  from the  Student  Loan  Corporation                                                                   
dividend (the return of contributed  capital authorized in AS                                                                   
14.42.295(a))  or  alternate  State,  federal,  and/or  other                                                                   
sources.  The executive director  of the Alaska Commission on                                                                   
Postsecondary Education would administer the program.                                                                           
Vice  Chair  Meyer  noted that  outside  testimony  had  been                                                                   
closed on HB 211 and if there  were questions, the Department                                                                   
could respond.                                                                                                                  
Representative Hawker  understood that the  legislation would                                                                   
provide  a fund  to repay  qualifying  educational loans  for                                                                   
students entering  the nursing  program.   He asked  if there                                                                   
were any "sidebars"  regarding what education  loans might be                                                                   
paid.  Representative Wilson replied  that they would have to                                                                   
be nursing loans  for classes to become a nurse.   There is a                                                                   
criterion established.   The  guidelines would be  determined                                                                   
by  the Board  of  Nursing in  consultation  with the  Alaska                                                                   
Commission on Postsecondary Education.   If the funds are not                                                                   
available, then  who receives the  loans would be  limited to                                                                   
the areas most critical need.                                                                                                   
Representative Hawker  asked if it would make  any difference                                                                   
at  what  institution   the  nurse  received   their  degree.                                                                   
Representative Wilson explained  that the regulations are not                                                                   
yet  known  and   that  the  Board  of  Nursing   and  Alaska                                                                   
Postsecondary would address those concerns.                                                                                     
DIANE  BARRANS, EXECUTIVE  DIRECTOR, POSTSECONDARY  EDUCATION                                                                   
COMMISSION, DEPARTMENT  OF EDUCATION, advised that  there are                                                                   
no  constraints  on where  the  student goes,  however,  they                                                                   
would have to be pursuing education  in nursing.  It would be                                                                   
a loan to an individual to attend  wherever they choose if it                                                                   
were  an accredited  institution  that leads  to the  nursing                                                                   
Representative Hawker inquired  if there was any incentive to                                                                   
achieve their education in an  Alaskan facility.  Ms. Barrans                                                                   
replied  that language  had  not been  specifically  included                                                                   
because of the  University of Alaska's ability  to compete on                                                                   
a low cost basis with other institutions.                                                                                       
Representative Hawker  inquired if there were  an anticipated                                                                   
number of  people applying for  the benefits under  the bill.                                                                   
Ms.  Barrans responded  that  nurses in  the  program at  the                                                                   
University  of Alaska  would  100% qualify  as  long as  they                                                                   
remain in Alaska and practice in the State.                                                                                     
Representative  Hawker noted  the costs  associated with  the                                                                   
program.   He  agreed  with the  overriding  social need  and                                                                   
seriousness of  the consideration, but questioned  the fiscal                                                                   
reimbursement estimate  for education from the  University of                                                                   
TAPE HFC 03 - 91, Side A                                                                                                      
Ms. Barrans  replied that 25%  would be an educated  guess of                                                                   
the  number  of nursing  professionals  that  the  University                                                                   
currently has capacity for.  In  the current graduating year,                                                                   
there  may  be 150  nurses.    That number  is  progressively                                                                   
increasing to 220  within the next three years.   The numbers                                                                   
reflect the capacity of Alaska to produce nurses.                                                                               
Representative  Berkowitz   pointed  out  that   one  of  the                                                                   
critical components of the University's  budget this year had                                                                   
to do  the expansion of the  nursing program.   He emphasized                                                                   
that it is critical that the State  should help subsidize the                                                                   
nursing crisis.  The State needs more nurses.                                                                                   
Representative  Hawker  pointed  out  that  the  fiscal  note                                                                   
indicates  an  escalation  of   costs  in  the  future.    He                                                                   
questioned  how the escalation  had been  determined  and how                                                                   
much of that would  come from the University of  Alaska.  Ms.                                                                   
Barrans  expected that  number to  remain at  the 25%  level.                                                                   
The fiscal  note projects the  number of new  nurses entering                                                                   
the  program to  be  459 the  first  year and  to  grow at  a                                                                   
slightly  larger  participation  rate during  the  next  four                                                                   
years.   To the extent that  the University can  produce some                                                                   
portion of that,  in 2004, perhaps 200 nurses  would graduate                                                                   
from the  program.   The maximum  capacity  would be 220  per                                                                   
Representative  Berkowitz voiced  appreciation  for the  work                                                                   
done on the proposed legislation.                                                                                               
Ms.  Barrans advised  that the  funding for  the fiscal  note                                                                   
would  come  from  general  funds.    Those  funds  would  be                                                                   
earmarked on an  annual basis and appropriated  to that fund.                                                                   
Finances for  FY04 have  been otherwise appropriated  through                                                                   
the Capital  budget.   She reiterated that  for at  least the                                                                   
first  year,  the fiscal  note  calls  for general  funds  to                                                                   
capitalize the project.                                                                                                         
Representative Hawker  questioned if there would  be a sunset                                                                   
on  the program.    Ms. Barrans  responded  that the  program                                                                   
would continue to operate as long  as the appropriations were                                                                   
placed into the fund.                                                                                                           
Representative  Hawker recommended a  sunset clause  be added                                                                   
in  order that  the Legislative  Budget  and Audit  Committee                                                                   
could  provide  an evaluation  of  program performance.    He                                                                   
inquired if  the sponsor  would be  receptive to adding  that                                                                   
Representative  Kerttula  interjected  that the  State  could                                                                   
always  repeal   the  program.     Placing  a   sunset  could                                                                   
discourage  participants  from  becoming  a nurse;  when  the                                                                   
students see that possibly coming, they might opt out.                                                                          
Representative Wilson  emphasized that studies  indicate that                                                                   
in the next seven  years, the State is going  to need another                                                                   
4,100  nurses.    She  pointed  out that  this  is  a  crisis                                                                   
situation and  the legislation is conditional  if the funding                                                                   
is there.                                                                                                                       
CAMILLE SOLEIL, (TESTIFIED VIA  TELECONFERENCE), ALASKA NURSE                                                                   
ASSOCIATION,  ANCHORAGE, offered to  answer questions  of the                                                                   
Representative Foster  MOVED to report  CS HB 211  (HESS) out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying fiscal notes.                                                                                                      
Representative Hawker OBJECTED  for a comment.  He noted that                                                                   
he  would  consider prior  comments  made  by  Representative                                                                   
Kerttula.    Representative Hawker  WITHDREW  his  OBJECTION.                                                                   
There being NO further OBJECTION, it was so ordered.                                                                            
CS HB  211 (HESS) was  reported out of  Committee with  a "do                                                                   
pass" recommendation and with  zero note #1 by the Department                                                                   
of Community & Economic Development  and a new fiscal note by                                                                   
the Alaska Postsecondary Commission.                                                                                            

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