Chapter 704 Oregon Laws 1999

Session Law

AN ACT

HB 2249

Relating to State Scholarship Commission; creating new provisions; and amending ORS 329.757, 329.765, 329.775, 329.780, 348.040, 348.115, 348.405, 348.410, 348.427, 348.505, 348.510, 348.570, 348.599, 348.625, 348.696, 352.720, 399.245, 411.894, 442.550, 442.555 and 461.543.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 348.510 is amended to read:

348.510. (1) There is created [a State Scholarship] an Oregon Student Assistance Commission consisting of seven members, appointed by the Governor.

(2) The term of office of a member of the commission is four years, except that the term for a student member shall be two years, and, after confirmation of the appointment by the Senate, the member shall serve at the pleasure of the Governor. Before the expiration of the term of a member, the Governor shall appoint a successor to succeed the member whose term is expiring. A successor appointed for a full term shall assume commission member duties on July 1 following the appointment. A member is eligible for reappointment. A student member is limited to reappointment to one two-year term. In case of a vacancy on the commission for any cause, except where the vacancy is caused by the normal expiration of a member's term, the Governor shall make an appointment to become immediately effective for the unexpired term.

(3) The appointment of a member of the commission is subject to confirmation by the Senate in the manner provided in ORS 171.562 and 171.565.

(4) Two members of the commission shall be students at institutions of higher education or community colleges in Oregon at the time of appointment, with the duly organized and recognized entities of student government at each institution of higher education or community college submitting the name of one student to the Governor to assist the Governor in making the appointments. Other members of the commission shall be citizens of the state chosen for their knowledge of and interest in education, but these other members shall not be persons employed by any institution of higher education or community college located in the state.

SECTION 2. (1) The amendments to ORS 348.510 by section 1 of this 1999 Act are intended to change the name of the State Scholarship Commission to the Oregon Student Assistance Commission.

(2) For the purpose of harmonizing and clarifying statute sections published in Oregon Revised Statutes, the Legislative Counsel may substitute for words designating the State Scholarship Commission, wherever they occur in Oregon Revised Statutes, other words designating the Oregon Student Assistance Commission.

SECTION 3. ORS 348.570 is amended to read:

348.570. (1) There is established in the State Treasury a fund, separate and distinct from the General Fund, to be known as the ["State Scholarship Commission Fund"] Oregon Student Assistance Fund for investment as provided by ORS 293.701 to 293.820 and for the payment of the expenses of the [State Scholarship] Oregon Student Assistance Commission in carrying out the purposes of ORS 348.210 to 348.250, 348.505 to 348.615, 348.696 and 348.992. Interest earned by the fund shall be credited to the fund.

(2) There is established in the State Treasury a fund, separate and distinct from the General Fund, to be known as the ["]Student Loan Guarantee Fund,["] which may be invested in the same manner as the [State Scholarship Commission] Oregon Student Assistance Fund. This fund shall receive funds from federal, state or private sources for the purpose of guarantying payment of loans made by eligible lending institutions to student residents of the State of Oregon who are enrolled or accepted for enrollment at any eligible institution, nonresident students enrolled or accepted for enrollment in an institution of higher education or community college in Oregon, and parents of those students, under the provisions of the Higher Education Act of 1965 as amended and for administrative expenses of guarantying loans. This fund, including the interest earnings on the fund, if any, is continuously appropriated to the commission for those purposes for which such funds were provided to, received or collected by the commission.

(3) There is established in the State Treasury a fund, separate and distinct from the General Fund, to be known as the ["]Alternative Student Loan Program Fund["] for investments as provided by ORS 293.701 to 293.820 and the payment of expenses by the [State Scholarship] commission in carrying out the purposes of ORS 348.625 to 348.695. This fund, including the interest earnings on the fund, if any, is continuously appropriated to the commission for those purposes for which such funds were provided to, received or collected by the commission.

SECTION 4. (1) The amendments to ORS 348.570 by section 3 of this 1999 Act are intended to change the name of the State Scholarship Commission Fund to the Oregon Student Assistance Fund.

(2) For the purpose of harmonizing and clarifying statute sections published in Oregon Revised Statutes, the Legislative Counsel may substitute for words designating the State Scholarship Commission Fund, wherever they occur in Oregon Revised Statutes, other words designating the Oregon Student Assistance Fund.

SECTION 5. ORS 329.757 is amended to read:

329.757. (1) There is hereby created an Oregon Teacher Corps program within the Oregon Student Assistance Commission to encourage the entry of certain qualified persons into the teaching profession through the use of forgivable student loans for those who complete three years of successful teaching in a public school in this state.

(2) All programs in ORS 329.757 to 329.780 are subject to the availability of funds appropriated therefor.

SECTION 6. ORS 329.765 is amended to read:

329.765. (1) The [State Scholarship] Oregon Student Assistance Commission shall administer the Oregon Teacher Corps program insofar as practicable in the same manner as the loan program under ORS 348.050 is administered and make rules for the selection of qualified applicants.

(2) Eligibility for the Oregon Teacher Corps is limited to those prospective teachers whom the [State Scholarship] Oregon Student Assistance Commission determines to have graduated, or currently rank, in the top 20 percent of their high school or college class. The commission shall assess each applicant's potential for teaching through such means as essays written by the applicant, letters of recommendations from teachers and others, descriptions of relevant teaching experiences, and other appropriate measures. Allowance shall be given for those applicants whom the commission determines to be in at least one of the following categories:

(a) Minority individuals as defined in ORS 200.005;

(b) Prospective teachers in scarce indorsement areas, as defined by the Teacher Standards and Practices Commission; or

(3) Recipients of loans under ORS 329.757 to 329.780 shall be enrolled at least half time in an approved teacher education program at an Oregon institution of higher education.

SECTION 7. ORS 329.775, as amended by section 8, chapter 383, Oregon Laws 1997, is amended to read:

329.775. (1) Upon approval of the loan application of an eligible student by the [State Scholarship] Oregon Student Assistance Commission, the commission may [loan] lend an amount from the Oregon Teacher Corps Account to the student in compliance with this section. The loan shall be evidenced by a written obligation but no additional security shall be required. Notwithstanding any provision in this section, the commission may require cosigners on the loans.

(2) Loans granted under this section to eligible students by the commission shall:

(a) Not exceed $2,000 in a single academic year to an undergraduate student enrolled in a teacher education program leading to a basic or initial license.

(b) Not exceed $4,000 in a single academic year to a graduate student enrolled in a teacher education program leading to a basic or initial license.

(3) Borrowers are required to pay at least seven percent interest per annum on the unpaid balance from the date of the loan as provided in subsection (4) of this section.

(4)(a) Repayment of the principal and accruing and deferred interest on loans shall be commenced not later than 12 months after the student's completion of the teacher education program or other termination of the student's education. Repayment of loans under ORS 329.765 shall be delayed for the period of time the student is teaching at least half time in a public school in this state but becomes payable under the usual terms if the student ceases teaching before completing three full years. Repayment of loans shall be delayed up to three years upon application of the borrower showing inability to locate suitable employment.

(b) Repayment shall be completed in a maximum of 120 months from the time repayment is commenced. However, nothing in this section is intended to prevent repayment without penalty at an earlier date than provided in this section or to prohibit the commission from extending the repayment period to a date other than permitted by this subsection.

(5)(a) An eligible student who receives a loan under this section, preparing to be an elementary or secondary school teacher in this state, is not required to repay a loan made under this section if the student completes:

(A) At least three years of equivalent full-time teaching in a public elementary or secondary school within the five-year period following completion of the teacher education program in this state; or

(B) At least three years of teaching under a full-time contract working at least three-fourths time in classroom teaching and no more than one-fourth time not in classroom teaching duties during regular school hours in a public elementary or secondary school within the five-year period following completion of the teacher education program in this state, as approved by the [State Scholarship] Oregon Student Assistance Commission upon written request of the borrower.

(b) Repayment of remaining principal and interest shall be waived upon the death or total and permanent disability of the borrower.

SECTION 8. ORS 329.780 is amended to read:

329.780. (1) There is established in the State Treasury separate from the General Fund an account to be known as the Oregon Teacher Corps Account into which shall be deposited all repayments of loans with interest to the [State Scholarship] Oregon Student Assistance Commission pursuant to ORS 329.775. Any interest accruing to the account shall be credited thereto.

(2) Amounts in the account established under subsection (1) of this section are continuously appropriated to the [State Scholarship] Oregon Student Assistance Commission for the purposes of ORS 329.757 to 329.780 and the need grant program under ORS 348.260.

SECTION 9. ORS 348.040 is amended to read:

348.040. As used in ORS 348.040 to 348.070, unless the context requires otherwise:

(1) "Commission" means the Oregon Student Assistance Commission.

[(1)] (2) "Eligible student" means a person who is a resident of this state, as determined by the [State Scholarship] Oregon Student Assistance Commission, at the time of application for a loan under ORS 348.040 to 348.070:

(a) Who is enrolled in or has applied for enrollment in a qualified school;

(b) Who has demonstrated a satisfactory level of achievement in the high school or other school on the record of which the application for enrollment is based or in which the applicant is enrolled; and

[(2)] (3) "Qualified school" means a school within this state which is a:

(a) Four-year, nonprofit, generally accredited institution of higher education;

(b) Accredited public or private community college or education center, or one recognized by a state educational agency;

(d) Medical or dental program offered by the Oregon Health Sciences University;

(e) Veterinary program offered by Oregon State University; or

(f) Institution which is, in the opinion of the [State Scholarship] commission, comparable to such institutions, colleges, centers or schools.

[(3)] (4) When the [State Scholarship] commission certifies that the course is not available within this state, a qualified school may include an institution, college, center or school not located in this state.

SECTION 10. ORS 348.115 is amended to read:

348.115. (1) In addition to any other financial aid provided by law, the [State Scholarship] Oregon Student Assistance Commission, pursuant to rule, may award loans to a qualified resident of this state upon the resident's acceptance and entry into a baccalaureate or associate degree nursing program at a post-secondary institution in Oregon. The loans may be forgiven upon fulfillment of the requirements of subsection (4) of this section.

(2) The loans authorized by subsection (1) of this section:

(a) Shall be made based on achievement, ability, need and motivation;

(b) Shall be made on an annual basis subject to renewal upon satisfactory performance for the duration of the nursing program; and

(c) Shall be made in annual amounts not to exceed 50 percent of the sum of tuition, fees and room and board for each participating student.

(3) Priority in awarding loans shall be given to:

(a) A resident employed in the health care field at the time of application; and

(b) A resident who agrees to practice in an area where there is a critical shortage of nurses, as determined annually by the Oregon State Board of Nursing in consultation with the Office of Rural Health.

(4) The resident receiving a loan under this section must agree to practice nursing full-time in an area described in subsection (3)(b) of this section or in an area of specialty that is underserved for one calendar year for each academic year for which the loan is received. If the resident does not fulfill the practice requirement within five years of graduation, the amount received shall be considered a loan, repayable as provided in ORS 348.117, for each year for which the practice requirement is not met.

SECTION 11. ORS 348.405 is amended to read:

348.405. As used in ORS 348.405 to 348.425:

(1) "Commission" means the [State Scholarship] Oregon Student Assistance Commission.

(2) "Eligible institution" means any educational institution in Oregon certified as an eligible institution for student aid programs under Title IV, Part B, of the Higher Education Act of 1965 as amended, but only for undergraduate programs.

(3) "Eligible voucher recipient" means any Oregon resident who:

(a) Is 14 to 19 years of age, inclusive;

(b) Completes community service work in human interaction activities within a nonprofit social service agency whose nonprofit status is verified; and

(4) "Human interaction activities" means activities of social service agencies similar to, but not limited to, the provision of literacy education, family or parenting counseling, peer arbitration, victim advocacy, emergency hotline services, tutoring and mentoring, and assistance in Head Start programs with emphasis on programs aimed at drug-free teenagers.

(5) "VISTO" means Volunteers in Service to Oregon.

SECTION 12. ORS 348.410 is amended to read:

348.410. To encourage community service volunteerism among Oregon's youth 14 to 19 years of age inclusive, there is established a post-secondary education voucher program within the [office of the State Scholarship Commission which] Oregon Student Assistance Commission that shall be known as Volunteers in Service to Oregon.

SECTION 13. ORS 348.427 is amended to read:

348.427. (1) To encourage community service participation among students in institutions of higher education, there is established a higher education community service voucher program within the [office of the State Scholarship] Oregon Student Assistance Commission. The commission shall allocate the amount available to it for the purposes under ORS 348.427 to 348.433 by awarding the institution's share of the amount to each institution of higher education in this state that is eligible for or whose students are eligible for financial aid under Title IV, Part B, of the Higher Education Act of 1965 as amended. The institution's share shall be based on the proportion of its enrollment of full-time students to the enrollment of full-time students in all institutions of higher education in this state.

(2) An institution of higher education in this state that receives an amount under subsection (1) of this section shall award amounts from the institution's share to various academic departments in the institution. Vouchers awarded to eligible voucher recipients shall be in $35 denominations for each eight hours of eligible community service. Priority shall be given to otherwise eligible applicants who have applied previously but not been awarded a place in the voucher program.

(3) In order to be eligible, a voucher recipient must perform approved services for at least 20 hours per week in one term for a state or local government entity or a nonprofit social service agency recognized as tax-exempt under section 501(c)(3) of the Internal Revenue Code of 1986. However, a voucher recipient shall not be assigned duties that are performed by a public employee if the assignment would displace the public employee. A voucher recipient may be assigned within the institution to assist in maintaining the program authorized by ORS 348.427 to 348.433.

(4) A voucher recipient is eligible for the voucher awards for only one term as an undergraduate student. In addition to the vouchers, the recipient shall receive graded academic credit to be determined by the institution. However, participation in the program does not replace any practicum or internship required for a degree.

SECTION 14. ORS 348.505 is amended to read:

348.505. As used in ORS 348.393 to 348.399 and 348.505 to 348.695:

(1) "Commission" means the [State Scholarship] Oregon Student Assistance Commission.

(2) "Financial aid" includes loans, grants, scholarships, work opportunities and other forms of financial aid to assist students in completing their post-high school education.

SECTION 15. ORS 348.599 is amended to read:

348.599. The Office of Degree Authorization is created within the [State Scholarship] Oregon Student Assistance Commission. The commission shall appoint an administrator of the office.

SECTION 16. ORS 348.625, as amended by section 96, chapter 59, Oregon Laws 1999 (Enrolled Senate Bill 564), is amended to read:

348.625. As used in ORS 348.570 and 348.625 to 348.695:

(1) "Alternative student loan program" means a program established by the [State Scholarship] Oregon Student Assistance Commission to fund loans to eligible students, or to qualifying parents of eligible students, to help meet expenses of eligible students of attending post-secondary educational institutions; provided, however, that alternative student loan program loans may be made only to students who have applied for student financial aid under Title IV, Part B of the Higher Education Act of 1965, as amended, and have received information on their eligibility for programs under that Act, or the parents of students who have made such application and received such information.

(2) "Eligible student" means a student enrolled in an eligible post-secondary educational institution located in Oregon or a student who is an Oregon resident and who is enrolled in an eligible post-secondary educational institution located outside of Oregon. The commission shall determine, among other things, what constitutes enrollment and which post-secondary educational institutions are eligible institutions under the alternative student loan program.

(3) "Lender" means an insured institution as defined in ORS 706.008 that is authorized to do business in Oregon and which has entered into an agreement with the commission to originate, service and administer alternative student loans in the manner authorized by ORS 348.570 and 348.625 to 348.695.

SECTION 17. ORS 348.696 is amended to read:

348.696. The Education Endowment Fund is established separate and distinct from the General Fund. Moneys in the fund shall be invested as provided in ORS 293.701 to 293.790. All earnings on moneys in the fund shall be transferred and appropriated continuously in the following amounts:

(1) 75 percent of the earnings to the State School Fund; and

(2) 25 percent of the earnings to the [State Scholarship] Oregon Student Assistance Commission for need grants awarded under ORS 348.260.

SECTION 18. ORS 348.696, as amended by section 11, chapter 612, Oregon Laws 1997, is amended to read:

(1) 75 percent of the earnings to the School Capital Construction, Maintenance and Technology Fund; and

(2) 25 percent of the earnings to the [State Scholarship] Oregon Student Assistance Commission for need grants awarded under ORS 348.260.

SECTION 19. Nothing in the amendments to ORS 348.696 by section 17 or 18 of this 1999 Act affects the operative date provisions of section 12, chapter 612, Oregon Laws 1997.

SECTION 20. ORS 352.720 is amended to read:

352.720. As used in ORS 352.710 to 352.760, unless the context requires otherwise:

(1) "Commission" means the [State Scholarship] Oregon Student Assistance Commission.

(2) "Private and independent institutions of higher education" or "institution" means any nonpublic and nonprofit college or university in the State of Oregon accredited by the Northwest Association of Schools and Colleges and any chiropractic college located in this state and accredited by the Commission on Accreditation of the Council on Chiropractic Education, or its successor.

(3) "Nonsectarian educational services" means the providing of instruction in secular subjects.

(4) "Secular subjects" means any course which is presented in the curriculum of a private and independent institution of higher education which is not hobby or recreational in nature or which does not advocate the religious teachings or the morals or forms of worship of any sect.

SECTION 21. ORS 399.245 is amended to read:

399.245. As used in ORS 399.245 to 399.265:

(1) "Commission" means the [State Scholarship] Oregon Student Assistance Commission.

(2) "Qualified applicant" means an Oregon resident who:

(a) Is a member of the Oregon National Guard;

(b) Maintains minimum academic standards at the qualified institution of higher education;

(d) Is a full-time student; and

(e) Serves one year in the Oregon National Guard for each year a scholarship is granted.

(3) "Qualified institution of higher education" means any two-year or four-year, nonprofit, generally accredited institution of higher education located in this state, including community colleges and accredited schools of nursing located in this state.

(4) "Scholarship" means a scholarship equal in value to $800 to be used to pay the educational expenses of the applicant at a qualified institution of higher education during the period for which the scholarship is granted, of which no more than 100 scholarships shall be awarded annually.

SECTION 22. ORS 411.894 is amended to read:

411.894. (1) The Oregon JOBS Individual Education Account is established in order to improve the position of JOBS Plus participants in the workforce by increasing their access to continuing education. Employer contributions to the account under this section shall be used to pay for education expenses for the individual as provided in subsection (2) of this section.

(2)(a) After the participant has participated in the JOBS Plus Program for 30 days, the employer shall pay, in addition to the participant wage, one dollar for each participant hour worked into the participant's individual education account. Contributions to such an account shall be tax deferred or tax-exempt to the extent permitted by federal and state law.

(b) Any participant for whom an Oregon JOBS Individual Education Account contribution is made shall be eligible for access to education benefits from that participant's individual education account for up to five years after the participant has left the JOBS Plus Program and has held a full-time, unsubsidized job for at least 30 days.

(c) When any participant has qualified for use of that participant's individual education account, an amount equal to that participant's individual education account balance shall be transferred to the [State Scholarship] Oregon Student Assistance Commission for that participant's use. Only one individual education account shall be created for any participant. Each account shall be administered by the [State Scholarship] Oregon Student Assistance Commission and shall be used for continuing education and training for the participant and the participant's immediate family.

(3) The [State Scholarship Commission] Oregon Student Assistance Commission may use any interest earned by the account for payment of expenses incurred by the commission in carrying out its duties under this section.

(4) Any unexpended or unobligated moneys remaining in an individual education account five years after the participant has left the JOBS Plus Program are appropriated and transferred to the Oregon State Need Grant Fund on that date.

SECTION 23. ORS 442.550 is amended to read:

442.550. As used in ORS 442.550 to 442.570:

(1) "Commission" means the [State Scholarship] Oregon Student Assistance Commission.

(2) "Nurse practitioner" means any person who is licensed under ORS 678.375.

(3) "Physician" means any person licensed to practice medicine under ORS chapter 677.

(4) "Physician assistant" means any such person registered under ORS 677.495 and 677.505 to 677.525.

(5) "Qualifying loan" means any loan made to a medical student, physician assistant student or nursing student under:

(a) Common School Fund loan program under ORS 348.040 to 348.090;

(b) Programs under Title IV parts B, D and E, of the Higher Education Act of 1965, as amended; and

(c) The Health Professions Student Loan, Nursing Student Loan and Health Education Assistance Loan programs administered by the United States Department of Health and Human Services.

SECTION 24. ORS 442.555 is amended to read:

442.555. (1) There is created the Rural Health Services Program, to be administered by the [State Scholarship] Oregon Student Assistance Commission, pursuant to rules adopted by the commission. The purpose of the program is to provide loan repayments on behalf of physicians, physician assistants and nurse practitioners who agree to practice in a medically underserved rural community in Oregon as determined in subsection (4) of this section.

(2) To be eligible to participate in the program, a prospective physician, physician assistant or nurse practitioner shall submit a letter of interest to the commission. Applicants who are selected for participation according to criteria adopted by the commission in consultation with the Office of Rural Health shall sign a letter of agreement stipulating that the applicant agrees to abide by the terms stated in ORS 442.560.

(3) Subject to available resources, the commission may enter into agreements with not to exceed 10 prospective physicians, 10 prospective physician assistants and 10 prospective nurse practitioners each year.

(4) The Office of Rural Health by rule shall adopt criteria to be applied to determine medically underserved communities for purposes of ORS 316.143 to 316.146, 353.450, 442.470, 442.503, 442.550 to 442.570 and for the purposes of compliance with federal Public Law 95-210, establishing rural health clinics.

SECTION 25. ORS 461.543 is amended to read:

461.543. (1) Except as otherwise specified in subsection (5) of this section, the Sports Lottery Account is continuously appropriated to and shall be used by the State Board of Higher Education to fund sports programs at state institutions of higher education. Seventy percent of the revenues in the fund shall be used to fund nonrevenue producing sports and 30 percent shall be used for revenue producing sports. Of the total amount available in the fund, at least 50 percent shall be made available for women's athletics.

(2) The State Board of Higher Education shall allocate moneys in the Sports Lottery Account among the institutions of higher education under its jurisdiction giving due consideration to:

(a) The athletic conference to which the institution belongs and the relative costs of competing in that conference.

(b) The level of effort being made by the institution to generate funds and support from private sources.

(3) As used in subsections (1) to (3) of this section, "revenue producing sport" is a sport that produces net revenue over expenditures during a calendar year or if its season extends into two calendar years, produces net revenue over expenditures during the season.

(4) An amount equal to the net proceeds of games provided for in ORS 461.213 (1) shall be allocated from the Administrative Services Economic Development Fund to the Sports Lottery Account.

(5) The amounts received by the Sports Lottery Account shall be allocated as follows:

(a) Eighty-eight percent for the purposes specified in subsections (1) to (3) of this section, but not to exceed $8 million annually, adjusted annually pursuant to the Consumer Price Index, as defined in ORS 327.006.

(b) Twelve percent for the purpose of scholarships, to be distributed equally between scholarships based on academic merit and scholarships based on need, as determined by rule of the State Board of Higher Education, but not to exceed $1,090,909 annually.

[(c) After the maximum allowable allocations under paragraphs (a) and (b) of this subsection are made, the next $3 million annually to the State Scholarship Commission for scholarships, as defined and administered in ORS 344.355.]

[(d)] (c) All additional money to the [State Scholarship] Oregon Student Assistance Commission for the need grant program under ORS 348.260.

Approved by the Governor July 14, 1999

Filed in the office of Secretary of State July 15, 1999

Effective date October 23, 1999

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