ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 2801

with committee amendments

STATE OF NEW JERSEY

DATED:  SEPTEMBER 23, 2024

      The Assembly Appropriations Committee reports favorably and with committee amendments Assembly Bill No. 2801.

      This bill renames and broadens eligibility for the Primary Care Practitioner Loan Redemption Program established within the Higher Education Student Assistance Authority (HESAA).

      The bill specifically:

· renames the program as the Health Care Professional Loan Redemption Program;

· provides for the participation in the program of psychiatrists and other health professionals working in fields designated by the Commissioner of Health for inclusion in the program;

· permits the Commissioner of Health, after consultation with the Commissioner of Labor and Workforce Development and the Director of Consumer Affairs, to designate additional health care fields experiencing critical Statewide labor shortages for inclusion in the program;

· requires the HESSA to annually submit a report on the Health Care Professional Loan Redemption Program to the Governor and the Legislature no later than August 1 of each year;

· increases the maximum loan redemption amount under the program from $120,000 to $200,000;

· expands the definition of “State designated medically underserved area” to include municipalities where more than 50 percent of households are at or below 185 percent of the federal poverty line and municipalities with a medically underserved area or population designation reflecting health status and economic indicators as determined by the United States Health Resources and Services Administration;

· permits a program participant to identify an approved site for designation and approval under the program;

· establishes criteria for a site to be automatically designated as an approved site under the program; and

· establishes eligibility requirements for approved sites and prohibits the HESAA from requiring any additional eligibility requirements for approved sites.

COMMITTEE AMENDMENTS:

      The committee amended the bill to:

· rename “State designated underserved area” as “State designated medically underserved area;”

· remove a provision in the bill that would have required the Commissioner of Health to transmit the data source used to determine State designated underserved areas and the data source used to determine the total percentage of Medicaid enrollees and uninsured persons in each county;

· require the Commissioner of Human Services to transmit the total percentage of Medicaid enrollees in each county to the executive director by January 1 of each year;

· clarify that the executive director is to accord first priority to an applicant who is employed by an approved site, in addition to an applicant who has an offer at a site;

· modify the criteria by which a site will be automatically deemed an approved site; and

· repeal a section of current law that directs 25 percent of the funds appropriated for the Primary Care Practitioner Loan Redemption Program, which is to be renamed under this bill, to the Nursing Faculty Loan Redemption Program. 

FISCAL IMPACT:

      The Office of Legislative Services (OLS) estimates that this bill will result in a State cost increase of up to $1.9 million over the first four years associated with expanding eligibility for the Primary Care Practitioner Loan Redemption Program, remained the Health Care Professional Loan Redemption Program, and increasing the maximum loan amount eligible for redemption under the program.  Based on current cohort sizes, not taking into account any change in participation that may occur as a result of this bill, and assuming that every participant has the maximum eligible loan amount redeemed, the actual increases in costs in each fiscal year are likely to be $144,000 in the first year, $352,000 in the second year, $576,000 in the third year, and $800,000 in the fourth year and each subsequent year. 

      By the fourth year, inclusive of the incremental spending resulting from the bill, total annual expenditures on the Health Care Professional Loan Redemption Program would be approximately $2.0 million.  The OLS notes that the FY 2024 and FY 2024 appropriations acts included budget language and funding to increase the maximum loan redemption amounts in accordance with the provisions of this bill.

      Additionally, the OLS notes that the bill would repeal a section of law that provides that 25 percent of the funds appropriated for the Primary Care Practitioner Loan Redemption Program are to be used for the Nursing Faculty Loan Redemption Program.  As a result, this could result in a change in funding for either program, contingent on the amounts appropriated in the annual appropriations acts.  The FY 2025 Appropriations Act including separate funding for each program and included language prohibiting the use of funds appropriated for the Primary Care Practitioner Loan Redemption Program for the Nursing Faculty Loan Redemption Program.