Authority: The Local Healthcare District Law, California Health & Safety Code, Section 32121.3 (a)(4), Physician Recruitment Incentives.

Program: Physician Practice Start-up Loans (forgivable). Proposed five hundred thousand dollar ($500,000) annual fund available for up to ten (10) fifty thousand dollar ($50,000) loans for use in establishing a community based practice. Repayment of the loans will be deferred and ultimately forgiven if the practitioner complies with community service requirements.

Physicians: Primary Care focus. Specialist recruitment loans only in the event no acceptable primary care candidates available. Primary care to be given a broad scope including, for example, family practice, internal medicine, obstetrics, pediatrics, and geriatrics.

Community Service Requirements: Primary private practice site in District for a minimum of four years from the making of the practice start-up loan. Maintenance of open practice for Medicare and Medi-Cal patients during the four-year commitment period. Compliance with all ethical and legal standards relating to the practice of medicine in California. Program eligibility and community service requirements will not be tied to hospital or medical group recruitment programs, but could involve physicians being recruited by a hospital or a medical group at the same time.

Loan terms: $50,000 lump sum loan to cover start-up practice expenses associated with new physician establishing practice in the community or a medical group's start-up costs associated recruiting the new practitioner. Evidenced by Promissory Note and Security Agreement and UCC 1 (practice income as security for repayment of Note). Note to incur interest from date of loan at market interest rates (prime plus two percent), repayable in 48 equal monthly installments, including accrued principal and interest, commencing at the beginning of the first month following a Repayment Event. A Repayment Event shall not occur as long as the community service commitment is met. One half of accrued principal and interest shall be forgiven upon the completion of two years of community service following the date of loan advance, seventy-five percent upon completion of three years, and the remainder upon completion of the full four year commitment.

Implementation: The District shall accept applications for start-up loans from individual physicians and medical groups and shall accept referrals of candidates from medical groups and Hospitals. The District shall initially screen all applications for compliance with Program criteria. A Board Committee shall evaluate applications and recommend approval to the full Board based on compliance with Program criteria and community need. The District shall verify candidate eligibility and compliance with community service based on information to be provided by the individual candidate and any affiliated Medical Groups or Hospitals.