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 shortages. 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 credential. 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 Alaska. 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 year. 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 language. 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 Committee. 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.