CHAPTER 127 Substitute for HOUSE BILL No. 2872 (Amends Chapter 42) An  Act concerning postsecondary education; establishing the workforce development loan
program and a tuition waiver program; concerning such loan; creating a workforce de-
velopment loan fund and a tuition waiver gifts, grants and reimbursements fund; pro-
viding for workforce development loan repayment, forgiveness and administration
thereof; amending K.S.A. 72-4433, as amended by section 1 of 2002 House Bill No.
2821, and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:

      New Section  1. (a) This section and sections 2 through 9, and amend-
ments thereto, shall be known and may be cited as the workforce devel-
opment loan program act.

      (b) As used in the workforce development loan act, ``postsecondary
educational institution'' shall have the meaning ascribed thereto by K.S.A.
2001 Supp. 74-3201b, and amendments thereto.

      (c) Within the limits of appropriations and private contributions
therefor, and in accordance with the provisions of this act, the state board
of regents may award such loans to Kansas residents who are enrolled in
or admitted to an area vocational technical school, technical college, com-
munity college, vocational school coordinated under the state board of
regents or associate degree programs at postsecondary educational insti-
tutions and who enter into a written agreement with the state board of
regents as provided in section 2 and amendments thereto.

      (d) The board of regents may accept any private contributions to the
program. The chief executive officer of the board of regents shall turn
such contributions over to the state treasurer who shall deposit such mon-
eys into the workforce development loan fund.

      (e) After consultation with the secretaries of the departments of hu-
man resources, social and rehabilitation services and commerce and hous-
ing, the board may establish a list of education programs in which an
applicant must enroll to be eligible for a loan under this program.

      (f) The loans shall be awarded on a priority basis to qualified appli-
cants who have the greatest financial need with the highest priority given
to those applicants with the greatest financial need who were in foster
care on or before their 18th birthday or were released from foster care
prior to their 18th birthday after having graduated from high school or
completing the requirements for a general educational development
(GED) certificate while in foster care. All loans shall be awarded to res-
ident students attending area vocational technical schools, technical col-
leges, community colleges, area vocational schools or associate degree
programs at postsecondary educational institutions. Special preference
shall also be established for residents drawing unemployment compen-
sation or such residents who were laid off from employment within the
prior six months. The board may also establish preferences for workers
deemed to be eligible for North American free trade agreement transition
assistance under United States department of labor standards or the Kan-
sas department of human resources standards.

      (g) Loans awarded under this program shall be awarded on an annual
basis and shall be in effect for one year unless otherwise terminated be-
fore the expiration of such period of time. Such loans shall be awarded
for the payment of tuition, fees, books, room and board and any other
necessary school related expenses.

      New Sec.  2. (a) The applicant for a workforce development loan shall
provide to the board of regents on forms provided by such board all
information requested by such board.

      (b) As a condition to awarding such loan, the state board of regents
and the recipient of such loan shall enter into an agreement which shall
require the person receiving the loan to:

      (1) Complete the required course of instruction and receive the des-
ignated degree, certificate or diploma for that course of instruction;

      (2) continue to live and work in Kansas, after the recipient's course
of instruction is completed, in a field of work for which the recipient was
trained using the skills attained under the course of instruction for which
a loan was received, until the loan is totally forgiven. Agree that for each
year of living and working in Kansas, 1/4 of the total loan amount's principal
and interest that accrued during the prior year shall be forgiven for the
first three years and upon completion of the fourth year, the remaining
balance of principal and interest of the loan shall be forgiven;

      (3) agree that the service commitment for each agreement entered
into under this section is in addition to the service commitment contained
in any other agreement which has been or may be entered into under
this section for the purpose of obtaining a loan;

      (4) maintain records and make annual reports to the chief executive
officer of the board of regents or such executive officer's designee as
required to document the satisfaction of the agreement terms of the loan;
and

      (5) repay any amounts required upon the recipient's failure to com-
plete the terms of the agreement.

      (c) Such agreement shall establish a repayment schedule requiring
the recipient to begin making payments one year after the discontinuance
of the recipient's enrollment in a postsecondary educational institution,
either by failure to attend, completion of the program or at such other
times as the board deems appropriate.

      New Sec.  3. (a) Upon completion of the recipient's program of study,
the recipient shall be eligible for forgiveness of the loan by living and
working in Kansas.

      (b) By annually providing to the board of regents the required doc-
umentation certifying that the recipient worked and lived in Kansas
throughout the prior year. Such documentation shall be provided to the
board of regents within 30 days of the annual due date calculated from
the completion of the course of study.

      (c) If the required documentation certifying that the recipient lived
and worked in Kansas is not received in the prescribed time by the board,
the remaining loan amount shall be due and payable as prescribed under
section 4, and amendments thereto.

      (d) Interest rates on the loan shall be determined by the state trea-
surer according to the interest rate received on the state idle funds plus
3%.

      New Sec.  4. (a) Except as otherwise provided in section 5, and
amendments thereto, upon the failure of any person to satisfy an obli-
gation incurred under the loan agreement as provided in section 2, and
amendments thereto, such person shall repay to the state treasurer an
amount equal to the total of (1) the amount of money received by such
person pursuant to such agreement, plus (2) accrued interest, calculated
at the interest rate on the state idle funds plus 3%, from the date such
money was received.

      (b) Each person required to repay any amount under this section shall
repay an amount totaling the entire amount to be repaid under all such
agreements for which obligations are not satisfied, including all amounts
of interest at the rate prescribed in subsection (a). Except as otherwise
provided in this section, such repayment shall be made in installment
payments determined by the state board of regents as provided in sub-
section (c) of the section 2, and amendments thereto.

      (c) All installment payments under this section shall commence six
months after the date of the action or circumstance that causes the failure
of the person to satisfy the obligations of such agreements, as determined
by the state board of regents based upon the circumstances of each in-
dividual case. If an installment payment becomes 91 days overdue, the
entire amount outstanding shall become immediately due and payable,
including all amounts of interest at the rate prescribed.

      (d) The total repayment obligation imposed under all agreements en-
tered into as provided in section 2, and amendments thereto, may be
satisfied at any time prior to graduation by making a single lump-sum
payment equal to the total of (1) the entire amount to be repaid under
all such agreements upon failure to satisfy the obligations under such
agreements to practice in Kansas, plus (2) all amounts of interest accrued
thereon at the rate prescribed in subsection (a).

      (e) The state board of regents is authorized to turn any delinquent
repayment account arising under the workforce development loan pro-
gram to a designated loan servicer or collection agency, the state not being
involved other than to receive payments from the loan servicer or collec-
tion agency at the interest rate prescribed under this section.

      New Sec.  5. (a) There is hereby established in the state treasury the
workforce development loan fund. The state board of regents shall remit
all moneys received under this act to the state treasurer at least monthly.
Upon receipt of each such remittance the state treasurer shall deposit the
entire amount thereof in the state treasury, and such amount shall be
credited to the workforce development loan fund.

      (b) The state treasurer, upon receipt of moneys from persons making
payments under sections 2, 3 and 4, and amendments thereto, shall de-
posit the entire amount thereof in the state treasury, and such amount
shall be credited to the workforce development loan fund. Moneys from
the fund may be used to administer the workforce development loan
program as authorized by appropriations acts.

      (c) All expenditures from the workforce development loan fund shall
be made for the purposes of this act and shall be made in accordance
with appropriation acts upon warrants of the director of accounts and
reports issued pursuant to vouchers approved by the executive officer of
the state board of regents or such executive officer's designee.

      New Sec.  6. (a) The state treasurer shall be the receiving agent for
loan payments and credits received under the provisions of this act. The
state treasurer shall keep a record of payments received from each person
and credited to such person's account obligation.

      (b) The state treasurer shall send all accounts which are three or more
months delinquent to the executive officer of the state board of regents.

      (c) The state treasurer shall adopt rules and regulations to administer
the state treasurer's duties under the provisions of this act.

      New Sec.  7. (a) Except as otherwise specified in the agreement, an
obligation under any agreement entered into under the workforce de-
velopment loan program shall be postponed: (1) During any required
period of active military service; (2) during any period of temporary med-
ical disability during which the person obligated is unable to work; (3)
during any period of time the person is on job-protected leave under the
federal family and medical leave act of 1993; or (4) during any period of
time the state board of regents determines that the person obligated is
unable to work because of special circumstances. Under clause (1), an
obligation to work and live in Kansas in accordance with an agreement
under section 2, and amendments thereto, shall not be postponed more
than five years from the time the person's obligation to work and live in
Kansas was to commence under any such agreement. An obligation to
work and live in Kansas in accordance with an agreement under section
2, and amendments thereto, shall be postponed under clause (2) during
the period of time the medical disability exists. An obligation to work and
live in Kansas in accordance with an agreement under section 2, and
amendments thereto, shall be postponed under clause (3) during the pe-
riod of time the person obligated remains on family and medical leave
act leave. An obligation to work and live in Kansas in accordance with an
agreement under section 2, and amendments thereto, shall be postponed
under clause (4) during the period of time the state board of regents
determines that the special circumstances exist. The state board of re-
gents shall adopt rules and regulations prescribing criteria or guidelines
for determination of the existence of special circumstances causing an
inability to work and live in Kansas and shall determine the documenta-
tion required to prove the existence of such circumstances.

      (b) An obligation to work and live in Kansas in accordance with an
agreement under section 2, and amendments thereto, shall be satisfied:
(1) If the obligation to work and live in Kansas has been completed in
accordance with the agreement; (2) if the person obligated dies; and (3)
if, because of permanent physical disability, the person obligated is unable
to work and live in Kansas.

      New Sec.  8. If a person fails to satisfy an obligation to work and live
in Kansas for the required period of time under an agreement entered
into as provided in section 2, and amendments thereto, because such
person is working in or working and living in a state other than Kansas,
and if such person is subject to or currently making repayments under
such agreement, and if such person subsequently commences working
and living in this state in compliance with the agreement, the balance of
the repayment amount, including the interest thereon, from the time of
commencement of working and living in Kansas until the obligation of
such person is satisfied or until such time as such person again becomes
subject to repayments, shall be waived. All repayment amounts due prior
to commencement of working and living in this state again, including
interest thereon, shall continue to be payable as provided under the
agreement. If subsequent to commencement of working and living in this
state, the person fails to satisfy the obligation to work and live in this state
for the period of time specified in the agreement, the person again shall
be subject to repayments, including interest thereon, as provided in the
agreement.

      New Sec.  9. The state board of regents shall adopt rules and regu-
lations for administration of the workforce development loan program
and shall establish terms, conditions and obligations which shall be in-
corporated into the provisions of any agreement under this act.

      New Sec.  10. Financing of the workforce development loan program
act shall be from moneys made available from the Kansas department of
human resources received from the United States department of labor
and the Kansas department of social and rehabilitation services received
from the United States department of health and human services in ac-
cordance with the provisions of this section and in accordance with and
subject to the provisions of Kansas appropriation acts.

      The Kansas department of human resources shall provide funding for
the purpose of this act which shall be limited to the use of federal de-
partment of labor workforce investment act funds which are returned to
the state as unspent local WIA program year adult, youth and dislocated
worker funds. Such unspent funds shall be converted to and identified as
state-level set-aside funds for use in carrying out activities as provided
under this act. The annual amount of such funds shall not exceed
$500,000. The WIA set-aside funds shall be made available subject to the
written approval from the United States department of labor authorizing
the use of such for the purpose of this act and appropriated by the United
States congress. Funding for this act by the Kansas department of human
resources shall be contingent on the availability of WIA funding and shall
terminate on or before the final WIA authorization date of June 30, 2005.
Due to restrictions placed on the transfer of unspent federal funds to the
state treasury and the need for timely disbursement of federal funds for
WIA expenditures, the Kansas department of human resources shall de-
velop in cooperation with the Kansas board of regents, a system for the
reimbursement of actual expenses incurred pursuant to this act. Such
reimbursement procedures shall be in compliance with acceptable federal
department of labor and office of management and budget procedures
established for the draw down and disbursement of federal WIA funds.

      The secretary of the department of social and rehabilitation services
shall cooperate in the administration of the workforce development loan
program act which may be funded with the $500,000 which is to be con-
tributed annually by the Kansas department of social and rehabilitation
services in accordance with and subject to the provisions of appropriation
acts. When there is a candidate that appears to meet the eligibility guide-
lines for federal funding administered by the Kansas department of social
and rehabilitation services, the Kansas board of regents shall notify the
Kansas department of social and rehabilitation services. Upon the Kansas
department of social and rehabilitation service's approval of the candi-
date's eligibility, the director of accounts and reports shall transfer fund-
ing from the appropriate federal source as identified by the Kansas de-
partment of social and rehabilitation services to the Kansas state treasurer.
All receipts and interest collected from repayments of federal funds trans-
ferred under the authority of this section shall be returned to the director
of accounts and reports for reposit to the originating federal funding
source.

      Sec.  11. K.S.A. 72-4433, as amended by section 1 of 2002 House Bill
No. 2821, is hereby amended to read as follows: 72-4433. Different rates
per hour of tuition, fees and charges shall be fixed by each local board for
the different postsecondary programs administered by such board. The
rate per hour of tuition for postsecondary students shall be fixed by each
local board shall be subject to approval of the state board of regents by
the commencement of each school year.

      New Sec.  12. (a) As used in this section:

      (1) ``Kansas educational institution'' means and includes area voca-
tional schools, area vocational-technical schools, community colleges,
state educational institutions and technical colleges.

      (2) ``State board'' means the state board of regents.

      (b) Subject to appropriations therefor and except as otherwise pro-
vided by this section, every Kansas educational institution shall provide
for enrollment without charge of tuition, undergraduate fees, including
registration, matriculation and laboratory fees for any eligible applicant.
No Kansas educational institution shall be required by this section to
provide for the enrollment of more than three new applicants in any
academic year. An applicant who was in the custody of social and reha-
bilitation services on the date such applicant reached 18 years of age and
who is accepted to a Kansas educational institution within two years fol-
lowing the date such applicant graduated from a high school or fulfilled
the requirements for a general educational development (GED) certifi-
cate shall be eligible for enrollment at a Kansas educational institution
without charge of tuition or such fees not to exceed eight semesters of
undergraduate instruction, or the equivalent thereof, at all such institu-
tions.

      (c) Subject to appropriations therefor, any Kansas educational insti-
tution which at the time of enrollment did not charge tuition or fees as
prescribed by subsection (b), and amendments thereto, of the eligible
applicant may file a claim with the state board for reimbursement of the
amount of such tuition and fees. The state board shall be responsible for
payment of reimbursements to Kansas educational institutions upon cer-
tification by each such institution of the amount of reimbursement to
which the educational institution is entitled. Such payments to Kansas
educational institutions shall be made upon vouchers approved by the
state board and upon warrants of the director of accounts and reports.
Payments may be made by issuance of a single warrant to each Kansas
educational institution at which one or more eligible applicants are en-
rolled for the total amount of tuition and fees not charged eligible appli-
cants for enrollment at that institution. The director of accounts and re-
ports shall cause such warrant to be delivered to the Kansas educational
institution at which such eligible applicant or applicants are enrolled. If
an eligible applicant discontinues attendance before the end of any se-
mester, after the Kansas educational institution has received payment
under this subsection, the institution shall pay to the state the entire
amount which such eligible applicant would otherwise qualify to have
refunded, not to exceed the amount of the payment made by the state
on behalf of such applicant for the semester. All amounts paid to the state
by Kansas educational institutions under this subsection shall be depos-
ited in the state treasury and credited to the tuition waiver gifts, grants
and reimbursements fund.

      (d) The chief executive officer of the state board shall submit a report
to the house and senate committees on education during the 2004 and
2006 regular session of the legislature on the results, outcomes and ef-
fectiveness of the tuition waiver program authorized by this section.

      (e) The state board is authorized to receive any grants, gifts, contri-
butions or bequests made for the purpose of supporting the tuition waiver
program authorized by this section and to expend the same.

      (f) There is hereby established in the state treasury the tuition waiver
gifts, grants and reimbursements fund. Expenditures from the fund may
be made for the purpose of payment of claims of Kansas educational
institutions pursuant to this section and for such purposes as may be
specified with regard to any grant, gift, contribution or bequest. All such
expenditures shall be authorized by the chief executive officer of the state
board, or such officer's designee and made upon warrants of the director
of accounts and reports issued pursuant to vouchers approved by the chief
executive officer of the state board, or such officer's designee.

      (g) During each year, the chief executive officer of the state board
shall make one or more certifications of the amount or amounts required
to pay claims received from Kansas educational institutions for tuition
and fees under this section to the director of accounts and reports and
the secretary of social and rehabilitation services. Upon receipt of each
such certification, the director of accounts shall transfer the amount cer-
tified from moneys received under the federal Chafee foster care inde-
pendence grant and credited to the foster care assistance federal fund of
the department of social and rehabilitation services to the tuition waiver
gifts, grants and reimbursements fund of the state board.

      (h) On or before the 10th of each month, the director of accounts
and reports shall transfer from the state general fund to the tuition waiver
gifts and grants fund interest earnings based on:

      (1) The average daily balance of moneys in the tuition waiver gifts
and grants fund for the preceding month; and

      (2) the net earnings rate for the pooled money investment portfolio
for the preceding month.

      (i) Applicants eligible for the benefits under this section shall be ex-
empt from the provisions of K.S.A. 76-717, and amendments thereto.

      (j) The state board shall adopt rules and regulations requiring eligible
applicants to be enrolled as a full-time undergraduate student in good
academic standing and to maintain part-time employment to remain eli-
gible and other rules and regulations, as appropriate, for administration
of the applicable provisions of this section and shall determine the eligi-
bility of applicants for the benefits provided under this section.

      (k) The provisions of this section shall expire on June 30, 2006, except
that any eligible applicant who received a tuition waiver before June 30,
2006, and is deemed by the state board to be eligible pursuant to this
section shall be allowed to remain eligible until such applicant completes
such applicant's course of study or becomes ineligible pursuant to the
provisions of this section. 
Sec.  13. K.S.A. 72-4433, as amended by section 1 of 2002 House Bill
No. 2821, is hereby repealed.
 Sec.  14. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 16, 2002.
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