AN ACT to establish the primary care providers and psychiatrists Forgivable Loan program and reserve and to appropriate funds for that purpose.

The General Assembly of North Carolina enacts:

SECTION 1.  Part 1 of Article 23 of Chapter 116 of the General Statutes is amended by adding the following new sections to read:

§ 116‑209.47.  Primary Care Providers and Psychiatrists Forgivable Loan Program.

(a)        Definitions. – The following definitions apply in this section:

(1)        Authority. – The State Education Assistance Authority.

(2)        Eligible county. – A county designated as a development tier one or development tier two area in the annual ranking performed by the Department of Commerce pursuant to G.S. 143B‑437.08.

(3)        Eligible school. – A medical school at an institution of higher education that is any of the following:

a.         A postsecondary constituent institution of The University of North Carolina, as defined in G.S. 116‑2(4).

b.         An eligible private postsecondary institution, as defined in G.S. 116‑280(3).

(4)        Eligible student. – A person enrolled in an eligible school for the purpose of becoming licensed as a physician or psychiatrist under Article 1 of Chapter 90 of the General Statutes.

(5)        Loan. – A forgivable loan made under the Program.

(6)        Program. – Primary Care Providers and Psychiatrists Forgivable Loan Program.

(7)        Reserve. – The Primary Care Providers and Psychiatrists Forgivable Loan Program Reserve established under G.S. 116‑209.48.

(b)        Program; Purpose. – There is established the Primary Care Providers and Psychiatrists Forgivable Loan Program to be administered by the Authority. The purpose of the Program is to provide forgivable loans to eligible students who agree to practice primary care medicine or psychiatry on a full‑time basis in an eligible county.

(c)        Eligibility. – The Authority shall establish the criteria for initial and continuing eligibility to participate in the Program, as follows:

(1)        All loan recipients shall be residents of North Carolina and shall attend an eligible school.

(2)        The Authority shall adopt standards deemed appropriate by the Authority to ensure that only qualified, potential recipients receive a loan under the Program. The standards shall include priority for applicants from eligible counties and may include minimum grade point average and satisfactory academic progress.

(3)        To the extent funds provided pursuant to this act are insufficient to award forgivable loans to all interested eligible students, the Authority may establish a lottery process for selection of loan recipients from among qualified applicants within criteria established by this section.

(d)       Loan Terms and Conditions. – To the extent funds are made available for the Program, the following terms and conditions shall apply to each loan made pursuant to this section:

(1)        Promissory note. – All loans shall be evidenced by promissory notes made payable to the Authority.

(2)        Interest. – All promissory notes shall bear an interest rate established by the Authority that does not exceed ten percent (10%) and is in relation to the current interest rate for non‑need‑based federal loans made pursuant to Title IV of the Higher Education Act of 1965, as amended. Interest shall accrue from the date of disbursement of the loan funds.

(3)        Loan amount. – Loans shall be awarded to eligible students in an amount of one hundred thousand dollars ($100,000) per academic year, per eligible student, up to four hundred thousand dollars ($400,000).

(4)        Forgiveness and repayment. – The Authority shall forgive loans as follows:

a.         In an amount of eighty thousand dollars ($80,000) for each year that the recipient is licensed and practicing primary care medicine or psychiatry on a full‑time basis in an eligible county, up to a maximum of four hundred thousand dollars ($400,000) over five years.

b.         If a loan recipient is practicing in a county that loses its status as an eligible county before the recipient completes his or her service obligation, the Authority shall continue to provide loan forgiveness in accordance with this section as long as the recipient continues to practice in that county without a break in service.

c.         The Authority shall establish any other necessary criteria for loan forgiveness for qualifying employment in North Carolina. These criteria may provide for accelerated repayment and less than full‑time employment options.

d.         The Authority shall collect cash repayments when service repayment is not completed. The Authority shall establish the terms for cash repayment, including a minimum monthly repayment amount and maximum period of time to complete repayment.

(5)        Death and disability. – The Authority shall forgive all or part of a loan if it determines that it is impossible for the recipient to repay the loan in cash or service because of the death or disability of the recipient.

(6)        Hardship. – The Authority may grant a forbearance, a deferment, or both in hardship circumstances when a good‑faith effort has been made to repay the loan in a timely manner.

(7)        Other. – The Authority may establish other terms and conditions that are necessary or convenient to effectuate the Program.

(e)        Rulemaking Authority. – The Authority may adopt rules necessary to implement, administer, market, and enforce the provisions of this section.

(f)        Report to the General Assembly. – The Authority shall report no later than December 1, 2025, and annually thereafter while loans are held or forgiven by the Authority to the Joint Legislative Education Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services regarding the Program and loans awarded pursuant to the Program, including at least the following information:

(1)        Forgivable loans awarded from the Reserve, including the following:

a.         Demographic information regarding loan recipients.

b.         Number of loan recipients by eligible medical school.

(2)        Placement and repayment rates, including the following:

a.         Number of loan recipients who have been employed in primary care medicine or psychiatry on a full‑time basis in an eligible county within two years of graduation from an eligible medical school.

b.         Number of loan recipients who have elected cash repayment in lieu of service repayment and their years of service, if any, prior to beginning cash repayment.

(3)        The balance of the Reserve.

(4)        Recommendations to improve the Program and increase the number of licensed physicians practicing primary care medicine and psychiatry in eligible counties.

§ 116‑209.48.  Primary Care Providers and Psychiatrists Forgivable Loan Program Reserve.

(a)        The Primary Care Providers and Psychiatrists Forgivable Loan Program Reserve is established as a nonreverting reserve to be administered by the Board of Governors of The University of North Carolina for the purpose of allocating funds to the Authority for the award of scholarship grants in accordance with G.S. 116‑209.47 and associated administrative costs. The Reserve shall consist of monies appropriated from the General Fund to the Reserve by the General Assembly, all funds received as repayment of loans, and all interest earned on those funds. These funds shall not revert at the end of each fiscal year but shall remain available until expended.

(b)        The General Assembly finds that, due to the critical need in this State for primary care providers and psychiatrists in eligible counties, it is imperative that the State provide an increase of funds for four years to the Primary Care Providers and Psychiatrists Forgivable Loan Program Reserve. Therefore, there is appropriated from the General Fund to the Reserve the following amounts for each fiscal year to be used for the purposes set forth in this section:

Fiscal Year                                                                            Appropriation

2024‑2025                                                                                     $2,000,000

2025‑2026                                                                                     $4,000,000

2026‑2027                                                                                     $6,000,000

For the 2027‑2028 fiscal year and each fiscal year thereafter, there is appropriated from the General Fund to the Reserve the sum of eight million dollars ($8,000,000) to be used for the purposes set forth in this section. When developing the base budget, as defined by G.S. 143C‑1‑1, for each fiscal year specified in this subsection, the Director of the Budget shall include the appropriated amount specified in this subsection for that fiscal year.

(c)        Of the funds allocated to the Authority under this section to award forgivable loans, the Authority may retain up to four percent (4%) of the funds appropriated each fiscal year for administrative costs associated with the forgivable loan program.

SECTION 2.  This act becomes effective July 1, 2023, and applies beginning with applications and the disbursement of loans in the 2024‑2025 fiscal year.