For the purposes of this chapter, the following terms shall have the following meanings respectively ascribed to them:

(1) BOARD or BOARD OF HEALTH. The Alabama State Board of Health.

(2) DEPARTMENT. The Alabama Department of Public Health.

(3) RURAL AREA or UNDERSERVED AREA. Any county in the State of Alabama in which a city or municipality is located which has a single hospital serving such city or municipality where the average daily census for such hospital is 25 or less, or a county meeting such other definition of 'rural area' or 'underserved area' as the board may adopt.

(4) NURSING DEGREE. A degree granted by an appropriately accredited institution of higher learning following at least a two year full- time course of study and entitling the recipient to be examined for certification as a registered professional nurse by the Alabama State Board of Nursing.

The Legislature of Alabama finds that there exists a critical shortage of registered nurses who are willing and able to provide health care to citizens in rural areas of Alabama. Such shortage is particularly acute in rural areas, and has a negative impact on the availability of care to low income and indigent citizens of Alabama who reside in rural areas. The Legislature further finds that there are many dedicated employees of the Alabama Department of Public Health who are disqualified from training as registered nurses solely by reason of their inability to finance the cost of attending school to obtain the requisite degree. Such employees are also prevented or retarded in career advancement because of a lack of education. It is the intent of the Legislature in adopting this chapter to address the nursing shortage in County Health Departments and in federally-funded Community Health Centers in rural areas and to provide opportunities for career advancement for employees of the health department. Such a program will benefit both the State of Alabama and private sector employers by increasing the pool of nursing school graduates available to provide health care in Alabama.

(a) Within the limits of the funds appropriated for or otherwise available to the loan program, the board shall be authorized to grant to each applicant deemed by the board to be qualified, a loan for the purposes of acquiring a nursing degree as defined in Section 22-4B-1, upon such terms and conditions as may be imposed by the board and as provided for in this section.

(b) In order to be eligible, a loan applicant must:

(1) Be a citizen and a bona fide resident of the State of Alabama;

(2) At the time of application, have been an employee of the department for at least three years in a position not requiring a nursing degree;

(3) Be accepted by and attend an accredited school of nursing approved and designated by the board; and

(4) Agree to work as a nurse for the department or for a federally-funded community health center in an underserved or rural area of Alabama for not less than two years for each year of education financed by the board after obtaining certification as a registered professional nurse. The rural county health department or community health center in which the employee must work after graduation shall be designated by the board either in advance of enrollment or after graduation of the employee.

(c) Before being granted a loan, each applicant shall enter into a written obligation to the board, which shall be deemed legally binding on the applicant, setting forth the conditions upon which the loan shall be granted to the applicant. The obligation shall include all terms and conditions specified in this chapter. The obligation shall be signed by the State Health Officer, or his designee, and by the applicant.

(d) The board shall have the authority to cancel any loan for good cause shown.

(e) The board is vested with full power and authority to sue in its own name any recipient for any balance due the state under the terms of this chapter. Any funds recovered by the board pursuant to such legal actions shall be deposited to the credit of the board and are hereby appropriated to the Board of Health to carry out the provisions of this chapter.

Any recipient who is granted a loan by the board shall be granted a loan in an amount authorized by the board, not to exceed $20,000.00, plus the employee's salary, if paid by the board while the employee attends school. This maximum loan amount may be adjusted upward by the board not more than once every two years. When the number of qualified applicants for loans exceeds the availability of funds, loans shall be granted by the board based upon an assessment of needs by rural or underserved areas for registered nurses, and based upon an assessment by the board of the merits of each individual application. Any loan made and granted to a recipient shall be made based upon the following conditions of repayment:

(1) The loan recipient shall repay the loan by working for the department or for a federally-funded community health center designated by the board after licensure as a registered professional nurse for a period of two full years for each year of full-time course of study financed by the board. Repayment shall be as follows: under a formula to be determined by the board, a proportionate share of the principal of the loan and of all interest accrued shall be forgiven and shall be deemed paid in full after completion of each full year of such service in the department or community health center in a rural area designated by the board.

(2) If the recipient does not remain employed by the department or a designated community health center for the full commitment period after licensure as a nurse, the remaining unpaid principal of the loan shall become due and payable on demand, with interest accruing at the rate of 12 percent per year from the date the loan obligation was signed by the recipient. In addition, there shall be included in any loan obligation a provision for liquidated damages in an amount equal to $2,000.00 per year for each year remaining to be served under the obligation. Recipients who resign or who are discharged for cause shall be deemed to not remain employed by the department. The board is authorized to rescind any obligation, or to suspend payment thereon, if it is owed by a recipient who becomes unable to perform employment duties due to a reduction in force, or who becomes disabled due to death, illness, injury, or infirmity.

(3) If the recipient fails or withdraws from school at any time before completing nursing training, or if the board cancels the loan for good cause, the principal of the loan shall become due and payable on demand with interest accruing at the rate of twelve per cent per annum from the date the recipient signed the obligation to repay the loan.

The Board of Health is hereby authorized to expend available funds to offer loans and pay salaries to employees attending nursing school under such loan program as provided in this chapter.

At the option of the board, recipients attending nursing school may be granted paid educational leave during times of such attendance. Employees attending school full-time shall be assigned duties in the health department on weekdays, except state holidays, when school is not in session, or shall be charged with annual leave or sick leave, as appropriate. Employees attending school part-time shall perform duties in the health department except when scheduled for class. Educational institutions approved by the board for participation in the program shall be required, as a condition of such approval, to submit monthly attendance reports to the department for all loan recipients. Employees granted paid educational leave shall be charged for annual leave for each school day or portion thereof when not in attendance. Repeated unexcused absences shall be sufficient cause for the board to cancel the loan agreement. Employees receiving salaries while attending school shall be required to repay as principal the total amount loaned for tuition, books, and other expenses, plus the total amount of their salaries paid while in attendance at school, in the event repayment is required under the provisions of Section 22-4B-4.

Loan funds shall not be disbursed directly to loan recipients. The board shall enter into agreements with all participating approved educational institutions whereby such institution shall be periodically reimbursed for tuition, books, fees, uniforms, and other associated costs incurred by loan recipients.