(a) This section shall be known and may be cited as the “Tennessee Rural Health Act of 2008.”

(b) There shall be established a five-year pilot program to encourage health care providers and dentists to locate and practice in Tennessee health resource shortage areas after becoming licensed to practice by providing financial assistance for medical or dental education through Tennessee rural health scholarships funded from net lottery proceeds.

(c) As used in this section, “health resource shortage area” means an area determined as a health resource shortage area by the department of health, office of rural health.

(d) To be eligible for a Tennessee rural health scholarship, a student shall:

(1) Not be ineligible for the scholarship under § 49-4-904;

(2) Be classified as an in-state student under the rules of the board of regents or the University of Tennessee system on the date of application for the scholarship and on the date of reapplication for the scholarship each academic year;

(3) Be admitted to and enroll in an eligible postsecondary institution that:

(A) Has a school of medicine providing a program of study accredited by the Liaison Committee on Medical Education, or its successor, as a full-time student seeking the degree doctor of medicine (M.D.);

(B) Has a school of medicine providing a program of study accredited by the Bureau of Professional Education of the American Osteopathy Association, or its successor, as a full-time student seeking the degree doctor of osteopathic medicine (D.O.);

(C) Offers a physician assistant program that is accredited by the Accreditation Review Commission on Education for the Physician Assistant, or its successor, as a full-time student seeking to become a physician assistant;

(D) Offers a nurse practitioner program that is accredited by the National League for Nursing Accrediting Commission, Inc., or its successor, or the Commission on Collegiate Nursing Education, or its successor, as a full-time student seeking to become a nurse practitioner; or

(E) Has a school of dentistry providing a program of study accredited by the Commission on Dental Accreditation, or its successor, as a full-time student seeking the degree doctor of dental surgery (D.D.S.) or the degree doctor of dental medicine (D.M.D.);

(4) Maintain satisfactory progress in the program of study in which the student is enrolled;

(5)

(A) Agree to practice medicine in a health resource shortage area after becoming a Tennessee licensed physician, osteopathic physician or physician assistant or receiving a Tennessee certificate of fitness as a nurse practitioner one (1) year for each year of funding provided by a Tennessee rural health scholarship; or

(B) Agree to practice dentistry in a health resource shortage area after becoming a Tennessee licensed dentist one (1) year for each year of funding provided by a Tennessee rural health scholarship;

(6) Not accept any other financial assistance that carries with it a service obligation after graduation and receipt of the applicable license to practice medicine or dentistry, except for a service obligation in the United States armed forces reserve or the national guard; and

(7) Sign a promissory note each year the scholarship is awarded that stipulates the cash repayment obligation incurred if the medical or dental service is not fulfilled. If a scholarship recipient obligates to a service commitment under another loan-scholarship program other than a service commitment permitted under subdivision (d)(6), fails to complete the medical or dental program the recipient enrolled in or fails to practice medicine or dentistry in a health resource shortage area for the number of years required to fulfill the recipient's obligation pursuant to the award of a Tennessee rural health scholarship, then all funds obtained from the award of the scholarship shall be repaid with interest; provided, however, that no repayment shall be due if TSAC finds that it is impossible for the recipient to fulfill the service obligation because of death or permanent disability of the recipient.

(e) A scholarship recipient shall not be required to fulfill the service requirement of subdivision (d)(5) or make any repayment of scholarship funds during any period of training required for licensure, including, but not limited to, internship or residency, or during active duty service in the United States armed forces or mobilization as a member of the reserve components, but the period shall not exceed six (6) years.

(f) A Tennessee rural health scholarship shall not exceed twelve thousand dollars ($12,000) per academic year or the cost of tuition, mandatory fees, books and equipment for the program of study in which the recipient is enrolled, whichever is less.

(g) No more than twenty-five (25) students shall be awarded Tennessee rural health scholarships in the first year of the pilot program and no more than fifty (50) students shall be awarded Tennessee rural health scholarships in the second year of the program. No student shall be awarded a rural health scholarship if the program of study in which the student is enrolled cannot be completed by the end of the fifth year of the pilot program.

(h) In the first and fifth years of the pilot program, no more than three hundred thousand dollars ($300,000) shall be expended from the lottery for education account to fund the program. In the second, third and fourth years of the pilot program, no more than six hundred thousand dollars ($600,000) shall be expended from the lottery for education account to fund the program.

(i) TSAC, in consultation with the department of health, the board of medical examiners, the board of osteopathic examination, the committee on physician assistants, the board of nursing and the board of dentistry, is authorized to promulgate rules and regulations for the management and administration of the program, including the payment of the awards, execution of appropriate contracts and promissory notes, the terms of promissory notes, cancellation of the notes and deferment of repayment and, should a scholarship recipient be required to repay a promissory note, the rate of interest and terms of repayment, and to otherwise effectuate the purposes of this section. Notwithstanding the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, TSAC is authorized to promulgate emergency rules to implement this section.

(j) THEC and the department of health shall study and evaluate the effectiveness of the Tennessee rural health scholarship pilot program and shall report to the education committees of the senate and the house of representatives. A preliminary report shall be filed with the committees by October 1, 2010. Additional reports shall be filed with the committees by October 1, 2012, and October 1, 2013.

(k) No retroactive award of a Tennessee rural health scholarship shall be made under this section.

(l) Scholarships awarded under this section shall commence with the 2008-2009 academic year.