BILL REQ. #:  S-1491.1 

Read first time 02/14/2005.   Referred to Committee on Early Learning, K-12 & Higher Education.

     AN ACT Relating to the University of Washington school of law public service legal loan repayment assistance program; adding a new chapter to Title 28B RCW; and making appropriations.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   It is the intent of the legislature to provide access to legal education and to ensure equal access to the justice system for the residents of the state of Washington. The University of Washington law school is the only law school in the state and one of only a few top ranked public law schools that does not currently have a loan repayment assistance program in place for graduates who enter public interest law. The nationwide decline in the percentage of new lawyers choosing to enter public interest law fields, from 5.4 percent to 2.9 percent in the last thirty years, can be substantially attributed to dramatic increases in higher education debt coupled with wide discrepancies between public and private salaries for new lawyers. Today, more than three-quarters of all low-income households in Washington experience at least one civil legal problem each year. Low-income residents face more than eighty-five percent of their legal problems without help from an attorney.
     Therefore, the legislature finds that it is in the best interest of the state to contribute funding to create a loan repayment assistance program at the University of Washington law school. It is the intent of the legislature in enacting this legislation to provide for the partial or full repayment of educational loans of University of Washington law school graduates who provide legal services in a public service area of the law.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Applicant" means an individual who applies for assistance from the University of Washington public service legal loan repayment assistance program.
     (2) "Eligible educational debt" includes school-approved undergraduate, graduate, and law school loans owed to government and commercial lending institutions or educational institutions. Educational loans extended by a private individual or family are not considered eligible educational debt for purposes of this chapter.
     (3) "Eligible employment" means those areas of legal practice determined by the joint administrators to serve the public interest, including but not limited to providing legal assistance to low-income persons through a nonprofit organization or legal services as an employee of a local, state, or federal governmental entity.
     (4) "Endowment" means the University of Washington public service legal loan repayment assistance endowment created in section 7 of this act and established at the University of Washington to support the University of Washington public service legal loan repayment assistance program.
     (5) "Joint administrators" means the University of Washington school of law's public interest law association board of directors and the dean of the University of Washington school of law.
     (6) "Licensed lawyer" means a lawyer licensed to practice law in the state of Washington.
     (7) "Participant" means a lawyer who is receiving loan repayment assistance through the University of Washington public service legal loan repayment assistance program.
     (8) "Program" means the University of Washington public service legal loan repayment assistance program.
     (9) "Total income" includes income from sources identified by the joint administrators as income.

NEW SECTION.  Sec. 3   The University of Washington public service legal loan repayment assistance program is created at the University of Washington. The program shall provide loan repayment assistance to lawyers who graduated from the University of Washington school of law and practice in public service positions, as defined by the joint administrators of the program. The program shall provide loans to participants for the purpose of repaying educational loans and, upon a participant's completion of the required service obligation, shall forgive the loans. The program shall be jointly administered by the dean of the University of Washington school of law and the University of Washington school of law's public interest law association board of directors.

NEW SECTION.  Sec. 4   The joint administrators shall adopt rules necessary to implement this chapter. The rules shall establish:
     (1) Eligibility criteria for participation in the program based upon the following:
     (a) The applicant's need, which shall be based on salary, total income, and eligible educational debt as defined in section 2 of this act;
     (b) The applicant's eligible employment, as defined in section 2 of this act;
     (c) The applicant must be a member in good standing of the bar of the state of Washington;
     (2) Guidelines pertaining to:
     (a) Maximum amount of annual assistance to be provided by the endowment to each participant;
     (b) Maximum amount of cumulative total assistance for program participants;
     (c) A procedure and schedule for the provision of program assistance to participants;
     (3) Any other rules necessary to implement this chapter.

NEW SECTION.  Sec. 5   Participants in the program who are awarded loan repayment assistance shall receive amounts from the program for the purpose of repaying both principal and interest on eligible educational debt.
     (1) Participants shall agree to meet the required service obligation by providing legal services in eligible employment, as defined by the joint administrators.
     (2) Participants shall sign a promissory note setting forth their obligation to the program to repay assistance loans that are not subsequently forgiven.
     (3) Participants shall agree to allow the joint administrators to review loan records and to obtain information from lenders necessary to verify eligibility and to determine assistance payment amounts.
     (4) Payment of loan repayment assistance under this chapter shall begin no later than ninety days after an individual becomes a participant. Provided that there is sufficient funding in the University of Washington public service legal loan repayment assistance endowment, assistance payments shall be made quarterly to the participant until eligible educational debt is repaid or until the participant is no longer engaged in eligible employment, whichever comes first.
     (5) Assistance payments under the program shall cease on the date that the participant discontinues eligible employment. The joint administrators shall determine the amount owed to the program by participants who serve less than the required service obligation.

NEW SECTION.  Sec. 6   (1) The program is intended to enhance, and not to replace, existing loan repayment programs from other sources. An applicant must first apply for any educational loan assistance from his or her employer or other sources for which he or she may qualify. Only if an applicant has received no loan repayment assistance, or only partial assistance, from other sources, may he or she apply to the program for assistance in repaying the balance of his or her eligible educational debt.
     (2) A participant shall contribute at least five percent of his or her monthly salary toward the repayment of his or her loans. The exact percentage obligation shall be determined by the joint administrators.

NEW SECTION.  Sec. 7   The University of Washington public service legal loan repayment assistance endowment shall be established by the joint administrators at the University of Washington to fund the University of Washington public service legal loan repayment assistance program created in this chapter. Money in the endowment may be spent without appropriation and only to fund the program and the administration of the program.
     (1) The joint administrators shall deposit in the endowment account all money received for the program. The endowment account shall be self-sustaining and consist of funds appropriated by the legislature for the program and private contributions to the program.
     (2) If the program's mission ever changes, all private contributions in the endowment must be transferred to a nonprofit organization with a mission similar to the program or returned to the private donors.
     (3) With the exception of the operating costs associated with the management of the endowment, the endowment account shall be credited with all investment income earned by the endowment account.
     (4) In addition to any funds specifically appropriated for the program, all moneys received from any other source such as contributions or supplements for the program and any interest or income earned shall be paid into the endowment.
     (5) Money in the endowment account may be spent only for the purposes of the program as specified in this chapter. Disbursements from the endowment account shall be made only on the authorization of the joint administrators.

NEW SECTION.  Sec. 8    (1) The sum of five hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2006, from the general fund to the University of Washington school of law public service legal loan repayment assistance program for the purposes of this act.
     (2) The sum of five hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2007, from the general fund to the University of Washington school of law public service legal loan repayment assistance program for the purposes of this act.

NEW SECTION.  Sec. 9   Sections 1 through 7 of this act constitute a new chapter in Title 28B RCW.