2003 -- H 5288

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LC01007

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2003

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A N A C T

RELATING TO EDUCATION

     Introduced By: Representatives Flaherty, and Wasylyk

     Date Introduced: January 29, 2003

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 16 of the General Laws entitled "Education" is hereby amended by

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adding thereto the following chapter:

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     CHAPTER 62.2

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REPAYMENT OF CERTAIN EDUCATION LOANS OWED BY STATE ATTORNEYS

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     16-62.2-1. Legislative findings. – The purpose of this chapter is to provide assistance to

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attorneys who are employed in state service. The general assembly has found that a law student

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will often incur high education loan debt, and as a result may feel compelled to accept higher

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paying private sector employment to pay off his or her debt, rather than working for the state of

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Rhode Island. The general assembly determines that it is in the public interest that the state

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provide assistance to attract and retain the most qualified attorneys.

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     16-62.2-2. Definitions. – For the purposes of this chapter, the following terms shall have

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the following meanings unless the context clearly requires otherwise:

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     (1) "Authority" means the governmental agency and public instrumentality authorized,

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created and established pursuant to section 16-62.2-4.

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     (2) "Eligible state attorney" or "attorney" means an individual who holds a valid Rhode

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Island license to practice law and is a full-time employee of the state of Rhode Island. An

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attorney must perform the service obligation under section 16-62.2-4 and document that the

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attorney meets additional requirements set forth by the authority pursuant to section 16-62.2-7.

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     (3) (i) "Eligible loan" may be any education loan received by the eligible state attorney

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through any lender, other than a private individual for: (A) education at a school of law

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authorized to award a degree that satisfies the law study requirements for licensure as an attorney

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in this state; or (B) undergraduate education at an institution of higher education or an accredited

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private or independent institution of higher education.

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     (ii) An eligible loan may not be an education loan that is in default at the time of the

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attorney's application.

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     (iii) Eligible loan may be further defined by the regulations of the authority promulgated

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pursuant to section 16-62.2-7.

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     (4) "Eligible employment" means employment by the state of Rhode Island, including,

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but not limited to, any state board, division, department or commission.

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     (5) "Repayment assistance" means that the authority may provide, in accordance with this

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chapter and authority regulations, assistance in the repayment of loans in the form of loan

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forgiveness for attorneys who apply and qualify for the assistance.

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     (6) "Total income" is the amount to be considered by the authority when allocating the

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annual amount of loan forgiveness to an applicant. Total income shall be determined by

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examining the applicant's most recent year's tax returns, and if married, the most recent year's tax

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returns of the applicant's spouse.

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     16-62.2-3. Forgiveness of loans. – An attorney shall be eligible to have a portion of the

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attorney's loans forgiven for each year that the attorney has eligible employment. An attorney

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may receive repayment assistance under this chapter in an amount not to exceed ten thousand

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dollars ($10,000) annually. The authority shall promulgate regulations pursuant to section 16-

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62.2-7 to create a formula in order to compute the amount of loan forgiveness. In its regulations,

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the authority may consider total educational debt versus total income.

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     16-62.2-4. Service obligation. – (a) For each year of repayment assistance, the attorney

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will be required to sign an agreement in the nature of a contract under which the attorney agrees

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to remain employed by the state for twelve (12) months for each year that repayment assistance is

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awarded.

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     (b) If the attorney does not fulfill the terms of the agreement then the repayment

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assistance becomes a loan and must be repaid. The agreement must include a promissory note

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acknowledging the conditional nature of the repayment assistance and promising to repay the

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amount of the loan forgiveness, applicable interest and reasonable collection costs if the attorney

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does not satisfy the applicable conditions. The authority shall determine the terms of the

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promissory note.

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     (c) The authority shall cancel the attorney's service obligation if the authority determines

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that the attorney: (1) has become permanently disabled so that attorney is not able to serve as an

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attorney with the state; or (2) has died.

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     (d) The authority shall grant the attorney additional time to complete the service

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obligation for good cause.

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     16-62.2-5. Funds. – (a) The general assembly shall transmit funds to the authority for the

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purposes of providing repayment assistance under this chapter.

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     (b) The authority may accept additional funds for purposes of repayment assistance from

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any school of law authorized to award a degree that satisfies the law study requirements for

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licensure as an attorney in this state or any other public or private source.

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     16-62.2-6. Repayment assistance. – (a) The authority shall deliver any repayment

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assistance made under this chapter in a lump sum payable to the lender and the attorney and in

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accordance with any applicable federal law.

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     (b) Repayment assistance received under this chapter may be applied to the principal

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amount of the loan and to interest that accrues.

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     16-62.2-7. Regulations. – The authority shall promulgate regulations necessary to

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implement the provisions of this repayment assistance program including additional eligibility

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criteria.

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     16-62.2-8. No adverse effect on authority's bond or rating. – Notwithstanding any

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provision of this chapter to the contrary, to the extent, if any, that this repayment assistance

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program shall have any material adverse effect on the authority's ability to issue negotiable bonds

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and notes, the authority shall be empowered to suspend this program on a prospective basis,

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provided that any individual who has previously been determined to be eligible for the program's

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benefits shall retain their eligibility.

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     16-62.2-9. Severability of provisions. – The provisions of this chapter are severable. If

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any provisions are deemed invalid by a court of competent jurisdiction, that determination shall

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not affect the validity of the remaining provisions.

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     SECTION 2. This act shall take effect upon passage.

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LC01007

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO EDUCATION

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     This act would provide loan repayment assistance to state attorneys.

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     This act would take effect upon passage.

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LC01007

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