SB 154-NURSE EDUC LOAN REPAYMENT PROGRAM  CHAIR BUNDE announced SB 154 to be up for consideration. SENATOR FRENCH, sponsor, told members: SB 154 addresses one big issue, which is the shortage of nurses in the State of Alaska. According to the Alaska Community Health and Emergency Management Services, about 30 communities in Alaska are designated as federal health professional shortage areas. Another study by the Alaska Colleagues in Caring showed a vacancy rate for RNs across the state of 11.5% in 2002 and in other parts of the state as a 20.8% vacancy rate. The rate of turnovers in RNs in Alaska is 24% and probably most interestingly, in the year 2001, about 18% of RNs working in Alaska were non-residents, i.e. traveling nurses and about 52% of the RNs were over 45 years old. The need for nurses is going to double by the year 2010. We've got about 4,500 nurses employed in the state right now; the number is going to go to 8,500. In the face of that growing problem, we looked at ways to increase the number of nurses in the state so that our citizens would have adequate health care should they need it. We mulled over a bunch of different possibilities and arrived at this one after discussions with a variety of interested groups. The idea is to pay money each year to nurses employed in the state in qualifying positions and correct qualifying education, to pay them up to 20% of their student loan or $2,000, whichever is less. The idea is to string those payments out over a period of five years so as to keep folks who come here who may see this as an incentive to move to the state, who come here and take up jobs and get them to spend a long enough time here so that they'll grow to love it like most of the rest of us have and keep them here when their five-year period is up. The idea is, frankly, workforce development and to use a little bit of government stimulus to increase the number of nurses working here in the state. The University of Alaska has recently gotten money to double the size of its nursing program. Nevertheless, that program is going to graduate, even once it's fully up and running, about 220 nurses a year, which is nowhere near the number the state needs to maintain an adequate nursing population.... SENATOR STEVENS asked if the goal is to attract people from other states. SENATOR FRENCH answered that is correct and, according to the Department of Labor and Workforce Development, the nursing shortage is nationwide. Alaska must compete for RNs or educate its own nurses to keep up with demand caused by an aging society and the aging of RNs. SENATOR STEVENS asked what percentage is traveling nurses. SENATOR FRENCH replied 17.7% of the RNs working in Alaska are non-residents. MS. CATHY GIESSEL, Alaska Nurse Practitioners Association, said that Senator French did a great job of portraying the problem and that they support SB 154. She asked the committee to remember that when there aren't enough nurses to fill the jobs, less qualified personnel fill them and in many cases those employees give medications. She said she gets recruiting calls from the Lower 48 and noted, "I believe this bill would be a wonderful recruitment device." MS. GIESSEL said that Florida, South Dakota and Virginia have loan repayment program offers for nurses. CHAIR BUNDE noted that in two years this bill, if passed, would cost the state about $3 million and, in five years, would cost over $5 million. MS. CAMILLE SOLEIL, Executive Director, Alaska Nurses Association, agreed with previous testimonies and supported SB 154. She really likes the discretion given to the Board of Nursing that allows it to target the funds toward the areas of need and set up appropriate criteria. It doesn't guarantee the right to the loan forgiveness. The average graduating nurse is looking at $20,000 to $40,000 in student loans that need to be repaid. Nurses like to retire between the ages of 55 and 60, especially out of acute care where they are needed the most. CHAIR BUNDE noted the discretionary part of any potential state subsidy soon disappears in the public's mind. When the longevity bonus first passed, it was said in the record that in 15 or 20 years, if the state can't afford it, it can just cut it out. MS. LARAINE DERR, President, Alaska State Hospital and Nursing Home Association, said she has talked to the legislature in previous years about the impending nursing shortage crisis. She is in the process of doing a survey and has results from seven of 17 hospitals. Last year they spent $16 million on traveling nurses. That money doesn't necessarily stay in the state. She said the University is doubling the number of nurses it graduates by 2006 and industry is donating more than $2.3 million over the next three years, however there is a problem in finding the faculty, as there is a shortage there as well. SENATOR STEVENS said the loans would repay not only Alaska student loans, but out-of-state loans as well. MS. DERR replied that is correct. SENATOR FRENCH said he contemplated setting the forgiveness provision up for Alaska residents who, for example, went outside to school and came back, but that wouldn't supply enough nurses to fill the vacancies. CHAIR BUNDE asked how he defines a resident. SENATOR FRENCH replied that tying eligibility to the Permanent Fund is a possibility. He added that the size of the loan could be lowered to reduce the impact to the state. SENATOR SEEKINS asked how the University plans to double the output of nurses with a zero budget increase. SENATOR FRENCH replied that the University got more money this year [for that program]. SENATOR SEEKINS said that issue is before the Finance Committee and cannot be counted on. TAPE 03-29, SIDE B    SENATOR SEEKINS asked if the money to be provided to the University program is matching money or what. MS. DERR replied that the University is going to match the $2.3 million. She explained that the University of Utah has been providing distance delivered nursing education here and through the process of getting more nurses, she realized that Alaska was paying money to Utah to educate our students. That is why they came up with the money and the University matched it. Utah has agreed that it will no longer be providing nursing education in the state when the University of Alaska takes it over. CHAIR BUNDE said he wished the university would use some of the $5 million they use on intercollegiate athletics for nursing. SENATOR STEVENS said he likes this bill because it is similar to one that he has been working on about forgiveness of teachers' loans. He said all the money in the fund is subject to appropriation by the legislature each year. MS. DIANE BARRANS, Executive Director, Alaska Postsecondary Education Commission (ACPE), supported SB 154. The Commission would administer the benefits as they are paid out to individuals who qualify under the criteria set by the Board of Nursing. Also, she suggested the legislature might look toward the Alaska Student Loan Corporation dividend for the funding, although the fiscal note calls for an appropriation from the general fund each year. CHAIR BUNDE asked what the fiscal note would be for the bill that Senator Stevens is working on. MS. BARRANS replied that those costs are somewhat comparable to this bill. CHAIR BUNDE asked if she worked with the Legislature a few years ago when the Washington, Alaska, Montana, Idaho Medical Education Program (WAMI), that subsidizes doctors, was restructured so those students had to repay some of their subsidy if they didn't come back to Alaska and work. MS. BARRANS replied that she did. CHAIR BUNDE asked her how effective that has been in bringing students back to Alaska to practice. MS. BARRANS replied at this point none of those students have reached the point in their careers yet where they would be returning to the state. She the suggested, to prevent putting the legislature in a position of being morally obligated to forgive loans, that ACPE solicit for participants, identify the amount of debt that would be repaid as a benefit, and reserve at the time they begin their service in Alaska the amount that would be paid to them. That way, they would not be saying to those participants the state can pay for their first year but not their second year, etc. In the years when no funding is available, they would shut off enrollment so no one would be enrolled for benefits that were, at best, speculative. Numbers would be revisited on an annual basis. CHAIR BUNDE said some places have provided substantial bonuses to attract people to come to work in an area of shortage, but after acquiring the bonuses they moved elsewhere. He asked if a nurse had to work here for five years, whether he or she would be free to move after that. MS. BARRANS said that is correct. CHAIR BUNDE asked if this bill would reimburse any originator. MS. BARRANS replied any commercial lender. CHAIR BUNDE asked how limiting this bill to only borrowers of Alaska loans would impact the fiscal note. MS. BARRANS guessed that it would potentially cut the fiscal note in half. MS. RHONDA RICHTSMEIER, Deputy Chief, Public Health Nursing, agreed with the nursing shortage estimates: in 2000, 30 states had significant nursing shortages and in 2020, 46 states are anticipated to have shortages. She said the reasons are multi- pronged. There is an aging population with more chronic disease and 71 percent of nurses in Alaska are 41 to 71 years of age; 25 percent of those are going to retire in the next 5 to 10 years. MS. RICHTSMEIER said fewer students are graduating from nursing schools. It is difficult to get people interested in nursing because a lot of alternative careers offer higher salaries. In addition, there aren't enough nursing instructors. Since 1995, there has been a 31% reduction in the number of students graduating from colleges of nursing. She believes there needs to be a multi-pronged approach to this multi-pronged problem. They need to address salary to bring new people into the profession and keep them in the profession. SENATOR DAVIS asked her to comment on the cost of training nurses instate and out-of-state. MS. RICHTSMEIER responded that she could only speak recently for instate and that UAA's four-year program costs around $20,000 just for tuition and books. SENATOR SEEKINS asked if the administration supports the bill as well. MS. RICHTSMEIER said she understood that to be the case. SENATOR DAVIS moved to pass SB 154 from committee with individual recommendations and the attached fiscal note. SENATORS FRENCH, STEVENS and DAVIS vote yea; SENATORS SEEKINS and BUNDE voted nay; and SB 154 passed from committee.