KRS 164.7891: Osteopathic Medicine Scholarship Program.

(1) It is the intent of the General Assembly to establish a scholarship program to

provide eligible Kentucky students the opportunity to attend an accredited

osteopathic school of medicine located in the Commonwealth and become certified

practitioners rendering medical service in the Commonwealth.

(2) The Kentucky Higher Education Assistance Authority may award scholarships, to

the extent funds are available for that purpose, to persons who declare an intent to

become osteopaths and practice in the Commonwealth and who are eligible under

subsection (4) of this section.

(3) The authority may award scholarships to students who meet the following criteria:

(a) Kentucky residents who are United States citizens as determined by the

institution in accordance with crit eria established by the Council on

Postsecondary Education for the purposes of admission and tuition

assessment;

(b) Students who are enrolled or accepted for enrollment in an eligible program of

study accredited by the Bureau of Professional Education of the American

Osteopathy Association or its successor, on a full -time basis, or eligible

students who have a disability defined by Title II of the Americans with

Disabilities Act, 42 U.S.C. secs. 12131 et seq., certified by a licensed

physician to be unable to attend the eligible program of study full -time

because of the disability;

(c) Students who agree to render one (1) year of qualified service in the

Commonwealth for each year the scholarship was awarded. "Qualified

service" means a full -time practice i n the Commonwealth of Kentucky as a

licensed doctor of osteopathy for a majority of the calendar year in the fields

of family practice, general practice, general internal medicine, general

pediatrics, general obstetrics, or gynecology, except that an indiv idual having

a disability defined by Title II of the Americans with Disabilities Act, 42

U.S.C. secs. 12131 et seq., whose disability, certified by another licensed

physician, prevents him or her from practicing full -time, shall be deemed to

perform qualified service by practicing the maximum time permitted by the

attending physician; and

(d) Students who sign a promissory note as evidence of the scholarship awarded

and the obligation to repay the scholarship amount or render medical service

as agreed in lieu of payment.

(4) The amount of the scholarship awarded to an eligible student by the authority shall

be equal to the difference between:

(a) The average of the prevailing amount charged for in -state tuition at the

University of Kentucky School of Medicin e and the University of Louisville

School of Medicine; and

(b) The prevailing amount charged for tuition at the osteopathic school of

medicine in which the student is enrolled.

(5) The authority shall require a promissory note to be executed by the student as

evidence of the obligation. The recipient shall render one (1) year of qualified

service for each year the scholarship was awarded. Upon completion of each year of

qualified service, the authority shall cancel the appropriate number of promissory

notes. Promissory notes shall be canceled by qualified service in the order in which

the promissory notes were executed. Service credit shall not include residency

service. In the event a recipient fails to complete an eligible program of study, or

fails to render qualified medical service as a primary care physician as agreed in

subsection (3) of this section, the recipient shall be liable for the total repayment of

the sum of all outstanding promissory notes and accrued interest.

(6) A scholarship shall not be awarded or a promissory note cancellation shall not be

granted to any person who is in default on any obligation to the authority under any

program administered by the authority un der KRS 164.740 to 164.785 until

financial obligations to the authority are satisfied, except that ineligibility for this

reason may be waived by the authority for cause.

(7) A repayment obligation imposed by this section shall not be voidable by reason of

the age of the recipient at the time of executing the promissory note.

(8) Failure to meet repayment obligations imposed by this section shall be cause for the

revocation of the scholarship recipient's license to practice medicine, subject to the

procedures set forth in KRS Chapter 311.

(9) Notwithstanding KRS 164.753(3), the authority shall establish by administrative

regulation procedures or the terms of promissory notes for the administration of this

program, including the execution of appropriate contr acts and promissory notes,

cancellation of the obligation, the rate of repayment and deferment of repayment of

outstanding debt, and the priority of awarding scholarships if funds are insufficient

to honor all requests.

(10) Notwithstanding any other statu te to the contrary, the maximum interest rate

applicable to repayment of a promissory note under this section shall be twelve

percent (12%) per annum, except that if a judgment is rendered to recover payment,

the judgment shall bear interest at the rate of five percent (5%) greater than the rate

actually charged on the promissory note.

(11) (a) The "Osteopathic Medicine Scholarship Program" is hereby created as a

special trust fund in the State Treasury administered by the Kentucky Higher

Education Assistan ce Authority for the purpose of providing funds for

scholarships to eligible students studying osteopathic medicine in schools in

the Commonwealth.

(b) Funding shall be transferred to the special trust fund from the coal severance

tax revenues levied under KRS 143.020 in an amount that permits each

Kentucky resident eligible under subsection (3) of this section to be awarded a

scholarship in the amount established under subsection (4) of this section. No

more than four percent (4%) of the coal severance tax revenues levied under

KRS 143.020 and collected annually shall be transferred to the trust fund. To

the extent this appropriation and other funds are available, the authority shall

award scholarships to all renewal applicants and eligible students in

accordance with the formula for determining the amount of the scholarship

award established in this section.

(c) The trust fund may also receive state appropriations, gifts, and grants from

public and private sources, and federal funds. Any unallotted or

unencumbered balances in the trust fund shall be invested as provided in KRS

42.500(9). Income earned from the investments shall be credited to the trust

fund. Any fund balance at the close of the fiscal year shall not lapse but shall

be carried forward to the next fiscal year and continuously appropriated only

for the purposes specified in this section. A general statement that all

continuing appropriations are repealed, discontinued, or suspended shall not

operate to repeal, discontinue, or suspend this fund or to repeal this section.

(d) All moneys repaid to the authority under this section shall be added to the

appropriations made for purposes of this section, and the funds and

unobligated appropriations shall not lapse.

(12) On or before August 1 of each yea r, sixty -five percent (65%) of the amount of

funding provided in subsection (11)(b) of this section shall be transferred to the

special trust fund and the remaining thirty -five percent (35%) shall be transferred

on or before December 1 of each year. The re venue transfers shall be based upon

the revenue estimates prevailing at the time each transfer is due.