First Substitute H.B. 416

Representative Kenneth W. Sumsion proposes the following substitute bill:

1 TEACHER LOAN PROGRAM
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Lynn N. Hemingway
5 Senate Sponsor: Gene Davis
6
7 LONG TITLE
8 General Description:
9 This bill creates a loan program for teachers.
10 Highlighted Provisions:
11 This bill:
12 . creates a loan program for teachers;
13 . establishes program funding requirements; and
14 . requires the State Board of Education to adopt administrative rules to implement the
15 program.
16 Monies Appropriated in this Bill:
17 This bill appropriates:
18 . as an ongoing appropriation subject to future budget constraints, $1,500,000 from
19 the Uniform School Fund for fiscal year 2007-08 to the State Board of Education.
20 Other Special Clauses:
21 This bill takes effect on July 1, 2007.
22 Utah Code Sections Affected:
23 ENACTS:
24 53A-1a-801, Utah Code Annotated 1953
25

26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 53A-1a-801 is enacted to read:
28 Part 8. Teacher Loan Program
29 53A-1a-801. Teacher Loan Program.
30 (1) There is created the Teacher Loan Program, to be administered by the State Board
31 of Education.
32 (2) The Board of Education shall:
33 (a) award appropriated loan funds to individual teachers who:
34 (i) teach full time in a school district within the state;
35 (ii) have obtained a teaching license for the first time within the prior five years;
36 (iii) except as provided in Subsection (4), have not previously received a program loan;
37 and
38 (iv) demonstrate a desire to pursue a teaching career and purchase a home within the
39 state;
40 (b) provide a program loan of $15,000 to a selected loan recipient, to be used for the
41 purchase of the loan recipient's primary residence;
42 (c) require a loan recipient to make interest payments at least annually on the
43 outstanding loan balance, at a fixed interest rate equal to the state treasurer's Utah Public
44 Treasurers Investment Fund interest rate for the January prior to loan issuance, rounded to the
45 nearest tenth of a percent;
46 (d) forgive:
47 (i) $5,000 of the loan principal if the teacher teaches in a school district for five
48 consecutive years following receipt of the loan; and
49 (ii) the remaining amount of the loan principal if the teacher teaches in a school district
50 for ten consecutive years following receipt of the loan;
51 (e) require a loan recipient who:
52 (i) does not teach in a school district for five consecutive years after receiving the loan
53 to repay the entire $15,000 in loan principal, in addition to loan interest payments, over a
54 period not to exceed five years after discontinuing teaching in a school district; or
55 (ii) teaches in a school district for more than five consecutive years but less than ten
56 consecutive years to repay the portion of the loan principal remaining after the forgiveness

57 under Subsection (2)(d), in addition to loan interest payments, over a period not to exceed to
58 five years after discontinuing teaching in a school district;
59 (f) allow a principal prepayment at any time; and
60 (g) allocate repayment, interest, and appropriation funds for new loans.
61 (3) The consecutive years of teaching requirements of this section are based on the
62 time period a teacher teaches in any school district or combination of school districts in the
63 state during the relevant time period.
64 (4) The State Board of Education may award one additional loan to a loan recipient
65 who:
66 (a) sold the primary residence that served as collateral for the program loan within ten
67 years of receiving the loan;
68 (b) repaid the loan principal and outstanding interest in full upon sale of the home; and
69 (c) continues to meet the other eligibility requirements of this section.
70 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
71 Board of Education shall make rules to:
72 (a) establish loan recipient selection criteria, including credit worthiness; and
73 (b) establish procedures for application, loan funding, and repayment, which shall
74 include procedures to:
75 (i) secure the program loan with the primary residence of the loan recipient as
76 collateral; and
77 (ii) require full repayment of the outstanding loan principal and interest if the primary
78 residence is sold within 10 years of loan issuance.
79 Section 2. Appropriation.
80 As an ongoing appropriation subject to future budget constraints, there is appropriated
81 from the Uniform School Fund for fiscal year 2007-08, $1,500,000 to the State Board of
82 Education to fund the Teacher Loan Program established in Section 53A-1a-801 .
83 Section 3. Effective date.
84 This bill takes effect on July 1, 2007.