(b) Contracts shall be approved by the Attorney General and shall be:

1. (1) Signed by the Chair of the Osteopathic Rural Medical Practice Student Loan and Scholarship Board;
2. (2) Countersigned by the Secretary of the Osteopathic Rural Medical Practice Student Loan and Scholarship Board; and
3. (3) Signed by the applicant.

(c) Each applicant receiving an osteopathic rural medical practice loan granted by the Osteopathic Rural Medical Practice Student Loan and Scholarship Board shall execute a written loan contract that incorporates the following obligations and conditions:

1. (1) The recipient shall agree to practice primary care medicine full time in a qualified rural community upon completion of:

   1. (A) Medical internship of one (1) year undertaken immediately following earning a degree of Doctor of Osteopathic Medicine;
   2. (B) Four (4) additional years of medical training beyond the internship if:

(i) The training has been approved in advance by the Osteopathic Rural Medical Practice Student Loan and Scholarship Board; and

1. (ii) Includes practice experience in a rural community; or

   1. (C)

      1. (i) At the request of the loan recipient, the Osteopathic Rural Medical Practice Student Loan and Scholarship Board may approve practice in more than one (1) qualified rural community to meet the obligation to practice full time.
      2. (ii) This requires an Osteopathic Rural Medical Practice Student Loan and Scholarship Board determination that either:

(b) (b) Other compelling circumstances exist;

1. (2) The recipient of a loan shall agree that for each year's loan that he or she shall practice medicine in accordance with subdivision (c)(1) of this section for a whole year; and

2. (3)

   1. (A) For each continuous whole year of medical practice, subject to reasonable leave periods, including without limitation vacation, sick leave, continuing medical education, jury duty, funerals, holidays, or military service, the Osteopathic Rural Medical Practice Student Loan and Scholarship Board shall cancel, by converting to a scholarship grant, the full amount of one (1) year's loan plus accrued interest.
   2. (B) Loans made for subsequent years will be converted in like manner, one (1) year of service for each year of assistance until the loan obligation is retired.

   3. (C) Requests for deferment of payment must be approved by the Osteopathic Rural Medical Practice Student Loan and Scholarship Board on an annual basis, however, allowance is made for involuntary military service.

      1. (d)
3. (1) The recipient of an osteopathic rural medical practice loan or loans shall agree that not engaging in the practice of medicine in accordance with this part may result in suspension of his or her license to practice medicine in this state.

4. (2) The recipient's medical license may not be suspended unless:

   1. (A) Recipient's contract contained a specific term that loss of license was a consequence of breach; and
   2. (B) Recipient signed a written acknowledgment that the suspension of license was explained orally as a potential consequence of breaching the contractual provisions.
5. (3) The suspension may be for a period of years equivalent to the number of years recipient is obligated to practice medicine in a rural area, but has not so practiced, and until the loan with interest together with any civil money penalties, as reduced by each full year of medical practice according to the terms of the loan contract, is paid in full.

(e) Any communication from a medical school in Arkansas that is not the University of Arkansas for Medical Sciences with any state medical licensing board shall include a notation that:

1. (1) The recipient of an osteopathic rural medical practice loan has a contract with Arkansas to practice medicine in a rural community; and
2. (2) Breach of contract may result in suspension of recipient's Arkansas medical license.

(f)

1. (1) If any loan recipient does not engage in the practice of medicine in accordance with the terms of this part and recipient’s loan contract to have the loan contract recognized as a scholarship, the recipient shall remain obligated to repay the loan or loans received, together with interest at the maximum rate allowed by Arkansas law or the federal discount rate plus five percent (5%) per annum, whichever is the lesser, the interest to accrue from the date each payment of funds was received by the recipient.
2. (2) Neither interest nor the obligation to repay the principal sums accrued shall accrue during any one (1) period of time that the recipient involuntarily serves on active duty in the United States Armed Forces.

3. (3) Repayment of principal with interest shall be due and payable in full at the earliest to occur of the following events:

   1. (A) Failure to remain enrolled in a medically underserved and rural practice curriculum;
   2. (B) Failure to remain in enrollment status continuously to completion of the degree of Doctor of Osteopathic Medicine for any reason other than temporary personal illness;
   3. (C) Failure to complete the internship;

   4. (D)

      1. (i) Failure to engage in the full-time practice of medicine while residing in a qualified rural community.
      2. (ii) However, the Osteopathic Rural Medical Practice Student Loan and Scholarship Board may waive the residency requirement on a case-by-case basis; and
   5. (E) Failure to establish a practice as required in this part within six (6) months following either internship or four (4) additional years of medical education that includes practice experience in a rural community.
4. (4) In the event of the death of the recipient, the entire loan amount that has not been converted to a scholarship grant pursuant to the terms of the loan contract shall be due and payable.

(g) Medical school alternate's contracts shall contain an additional term that breach of the contract may result in civil money penalties in the amount of one hundred percent (100%) of the loan amount if:

1. (1) An alternate on the waiting list for acceptance to an osteopathic medical school in Arkansas enters into an osteopathic rural medical practice program contract conditioned only upon the applicant's being accepted for admission to the college;
2. (2) The alternate otherwise meets the requirements of this part; and

3. (3)

   1. (A) The applicant is moved to the top of the waiting list pursuant to 6 CAR § 407-109.

   2. (B) This shall not prohibit the Osteopathic Rural Medical Practice Student Loan and Scholarship Board from considering and entering a negotiated settlement with the loan recipient involving:

      1. (i) The license suspension;
      2. (ii) The amount of the civil money penalty; and
      3. (iii) The terms of repayment of the loan.

(h)

1. (1) The Osteopathic Rural Medical Practice Student Loan and Scholarship Board may amend agreements entered into with any loan recipient at any time prior to full performance of the recipient's contractual obligations.

2. (2)

   1. (A) A loan recipient may apply to an osteopathic medical school in Arkansas for a waiver of the contractual provisions set forth in subsection (d) of this section.
   2. (B) If the osteopathic medical school determines that exigent circumstances warrant a waiver, the loan recipient shall be notified in writing.
   3. (C) The osteopathic medical school in Arkansas shall immediately notify the Arkansas State Medical Board of such a determination.