HOUSE BILL NO. 193 "An Act relating to financial assistance for students attending certain graduate education programs; and providing for an effective date." REPRESENTATIVE CON BUNDE spoke in support of the legislation. He observed that the WAMI Medical Education Program is subsidized by the state of Alaska. He noted that not all WAMI students return to Alaska. He emphasized that the State invests approximately $150 thousand dollars in each student. He contended that the State would not run out of doctors without an entirely subsidized program. Representative Bunde maintained that the legislation allows Alaska to reap the just reward of its investment in WAMI students. Students who practice in Alaska for five years would not be impacted. He observed that the majority of physicians live in the state where they did their residency. Representative Bunde provided members with an amendment (copy on file). The amendment would add intent language to clarify that the first year is not included in the repayment requirement. It would also add "or participating" on page 2, line 5. Representative Bunde noted that Alaskan physicians have access to WAMI computer files. He asserted that physicians should be require to pay for this access. Representative Martin stated that the amendment should not be in the form of intent language. He suggested that the language be inserted into statute. LYNNE SMITH, STAFF, REPRESENTATIVE BUNDE clarified that students already in the program would not be affected by the legislation. Representative Davies noted that the effective date should be changed to 1998. Representative Bunde did not think that additional restrictions to assure participation by Alaskan students were needed. He explained that the program already requires students to be Alaskan residents. He stated that residency requirements could be tightened. He acknowledged that 12 of the 40 students that participated in the program, from 1989 to the current year, did not graduate from an Alaskan high school. WENDY REDMAN, VICE PRESIDENT, STATEWIDE PROGRAMS, UNIVERSITY of Alaska stated that the University does not support the implementation of a surcharge. She maintained that a surcharge would negatively affect low-income students. She observed that 8 of the 12 students that graduated from out- of-state high schools were attending prep schools, while their parents lived in state. Ms. Redman spoke in support of the WAMI program. She asserted that the program is an integral part of the University's Health Science program. She observed that the University receives federal research funding as a result of its participation in the WAMI program. She pointed out that the associated residency program has brought over $5 million dollars to Anchorage. She emphasized that there are more applicants than the program can accommodate. She spoke against the amendment. She observed that students have a debt load of approximately $80 thousand dollars without the additional $59 thousand dollar liability proposed by the legislation. She observed that 49 percent of Alaskan students return to the State. The national average is 40 percent. Seventy percent of all WAMI students, who come to Alaska, through rotations and residencies, return to Alaska. She clarified that students would be liable for an additional repayment of $13 thousand dollars if the first year was included in the repayment. Co-Chair Hanley questioned if there is a shortage of doctors in Anchorage. Ms. Redman noted that according to the Washington Journal of Medicine, Anchorage has a 42.75 percent shortage of primary doctors. The statewide shortage is 30.95 percent. Ms. Redman noted that the state of Alaska pays to reserve 10 spots for Alaskan students at the University of Washington. DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION COMMISSION, DEPARTMENT OF EDUCATION clarified that the program costs approximately $1.35 million dollars for the second, third and fourth years. Representative Bunde maintained that rural Alaskans would be better served by placing some of the money into a nurse practitioner program. Ms. Barrans pointed out that the current population of doctors in Alaska is aging. The average Alaskan physician is over 40 years of age. Representative Davies emphasized that other students are subsidized by the state of Alaska. Representative Davis noted that the program provides other benefits to the State. He pointed out that there are medivac provisions between WAMI states. Co-Chair Therriault maintained that the state of Alaska would continue to draw students to its residency program. Representative Bunde asserted that the legislation is an attempt to save the WAMI program. He reiterated that the legislation will only impact students that do not return to the State. Co-Chair Hanley felt that the rural areas would benefit more from a nursing program. SUSAN TRYK, UNIVERSITY OF WASHINGTON observed that the University of Washington School of Medicine is partnering with the University of Alaska, Anchorage to develop a physician assistant program, which will be partly in Alaska and partly in the state of Washington. She did not think the program would require additional state funding. Co-Chair Therriault MOVED to ADOPT an amended effective date of 1998. There being NO OBJECTION, it was so ordered. Co-Chair Hanley MOVED to ADOPT Amendment 2# (copy on file). Amendment 2# would require repayment of the first year if the student did not return to practice in the state of Alaska for a minimum of five years. Representative Bunde spoke in support of the amendment. He observed that the amendment would require repayment of an additional $13 thousand dollars if the student did not return for a minimum of five years. He emphasized that physicians earn high salaries. He maintained that the amendment would aid the preservation of WAMI by encouraging students to return to the State. Those that do not return would have an additional liability of approximately $150 dollars a month. Representative Mulder disclosed that he attended a WAMI presentation in Seattle. Representative Mulder spoke in favor of the legislation, but against the amendment. He considered the first year's exclusion from repayment as a scholarship. He observed that the first year's funding goes to the state of Alaska. Ms. Redman clarified that WAMI students carry approximately $80 thousand dollars in debt at graduation, regardless of the legislation. If the legislation were enacted they would have an additional debt of $58 to $74 thousand dollars, depending on the repayment requirements. Representative Davies spoke against the amendment. He observed that, if the legislation were enacted, students would face a potential liability of $120 thousand dollars. The amendment would add another $13 thousand dollars. He feared that students would not want to take the risk. Representative Martin spoke in support of the amendment. He stressed that students can pay off their debt by working in Alaska for five years. He expressed concerns that out-of- state students come to Alaska to enter the WAMI program. (Tape Change, HFC 98 - 19, Side 2) Representative Martin stated that the amendment should clarify in statute that the first year is included in repayment. Ms. Barrans stated that the change to page 2, line 5 would clarify that a student who attended either the University of Alaska or the University of Washington would incur a debt obligation relative to that year. She felt that further clarification of "contracting" was necessary. The intent language was added to clarify that all 4 years would be included. Ms. Redman reiterated that of the 12 participating students, who did not graduate in Alaska, 8 were Alaskan students attending prep schools and 2 were military students. Only two students that did not graduate within the state of Alaska are not accounted for as Alaskan residents. Representative Davies provided members with Amendment 3# (copy on file). Amendment 3# would insert after "interest" on page 2, line 5, "but does not include costs for the first year of the program delivered at the University of Alaska, Anchorage." He observed that the amendment could be modified to state the opposite by deleting the "not" before "does". He clarified that he did not support such an amendment, but offered that it would clarify the intent of Amendment 2#. Co-Chair Hanley WITHDREW Amendment 2#. Representative Davies MOVED to ADOPT Amendment 3#. Co-Chair Hanley MOVED to AMEND Amendment 3# to: insert after "interest" on page 2, line 5, "and does include costs for the first year of the program delivered at the University of Alaska, Anchorage." Representative Davies OBJECTED to the Amendment to Amendment 3#. Ms. Redman clarified that the cost of running the medical program at the University of Alaska is $800 thousand dollars. In addition, the first year's out-of-state tuition is returned to the University of Alaska, Anchorage. Co-Chair Hanley summarized that the total cost of the WAMI program is approximately $2.1 million dollars for 40 students. Co-Chair Therriault stated that it costs $48.2 thousand dollars a year per student. Representative Bunde spoke in support of the amendment. He maintained that the payback provision needs to be fairly significant. He compared the salaries of an English teacher and a physician. He asserted that the payback requirement is not excessive. Representative Davies emphasized that, although salaries for some specialties are high, the family or rural practitioner's salary is not high. He stressed that the program focuses on the family practitioner. Representative Davies and Davis disclosed that they also attended WAMI presentations in Seattle. A roll call vote was taken on the motion. IN FAVOR: Davis, Grussendorf, Kelly, Martin, Hanley, Therriault OPPOSED: Mulder, Davies Representatives Foster, Kohring, and Moses were absent from the vote. The MOTION PASSED (6-2). There being NO OBJECTION, the motion to adopt Amendment 3# as amended was passed. Ms. Barrans discussed the fiscal noted by the Department of Education. She estimated that students would be tracked for 23 years. She noted that there would be costs associated with form development and administration. Co-Chair Hanley noted that there would be an increase in general funds of approximately $80 thousand dollars for each student that did not return to practice in Alaska. Representative Mulder MOVED to report CSHB 193 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 193 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Education.