Veterinary Medicine Loan Repayment Program (VMLRP), 32788-32798 [E9-15596]

Agencies

• DEPARTMENT OF AGRICULTURE
• Cooperative State Research, Education, and Extension Service

[Federal Register Volume 74, Number 130 (Thursday, July 9, 2009)]
[Rules and Regulations]
[Pages 32788-32798]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-15596]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Cooperative State Research, Education, and Extension Service

7 CFR Part 3431

RIN 0524-AA43


Veterinary Medicine Loan Repayment Program (VMLRP)

AGENCY: Cooperative State Research, Education, and Extension Service, 
USDA.

ACTION: Interim final rule and request for comments.

-----------------------------------------------------------------------

SUMMARY: This interim final rule establishes the process and procedures 
for designating veterinarian shortage situations, specifically for the 
Veterinary Medicine Loan Repayment Program (VMLRP) authorized by the 
National Veterinary Medical Service Act (NVMSA) and administered by the 
Cooperative State Research, Education, and Extension Service (CSREES) 
of the U.S. Department of Agriculture. CSREES will designate geographic 
and practice areas that have a shortage of food supply veterinarians in 
order to carry out the VMLRP goals of strengthening the nation's animal 
health infrastructure and supplementing the Federal response during 
animal health emergencies. CSREES will carry out NVMSA by entering into 
educational loan repayment agreements with veterinarians who agree to 
provide veterinary services in veterinarian shortage situations for a 
determined period of time. CSREES is establishing Subpart A for the 
designation of the veterinarian shortage situations and Subpart B for 
the administration of the VMLRP.

DATES: This rule is effective July 9, 2009. The Agency must receive 
comments by September 8, 2009 for them to be considered in the final 
rule.

ADDRESSES: You may submit comments, identified by RIN 0524-AA43, by any 
of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: vmlrp@csrees.usda.gov. Include Regulatory Information 
Number (RIN) number 0524-AA43 in the subject line of the message.
    Fax: 202-401-7752.
    Mail: Paper, disk or CD-ROM submissions should be submitted to 
Cooperative State Research, Education, and Extension Service; U.S. 
Department of Agriculture, STOP 2299, 1400 Independence Avenue, SW., 
Washington, DC 20250-2299.
    Hand Delivery/Courier: Cooperative State Research, Education, and 
Extension Service, U.S. Department of Agriculture, Room 2258, 
Waterfront Centre, 800 9th Street, SW., Washington, DC 20024.
    Instructions: All submissions received must include the agency name 
and the RIN for this rulemaking. All comments received will be posted 
without change to https://www.regulations.gov, including any personal 
information provided.

FOR FURTHER INFORMATION CONTACT: Gary Sherman, National Program Leader, 
Veterinary Science, Cooperative State Research, Education, and 
Extension Service, U.S. Department of Agriculture, STOP 2220, 1400 
Independence Avenue, SW., Washington, DC 20250-2220; Voice: 202-401-
4952; Fax: 202-401-6156; e-mail: gsherman@csrees.usda.gov.

SUPPLEMENTARY INFORMATION:

Background and Purpose

    In January 2003, the National Veterinary Medical Service Act 
(NVMSA) was passed into law, adding section 1415A to the National 
Agricultural Research, Extension, and Teaching Policy Act of 1997 
(NARETPA). This law established a new Veterinary Medicine Loan 
Repayment Program (7 U.S.C. 3151a) authorizing the Secretary of 
Agriculture to carry out a program of entering into agreements with 
veterinarians under which they agree to provide veterinary services in 
veterinarian shortage situations. In November 2005, the Agriculture, 
Rural Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 2006 (Pub. L. 109-97) appropriated $495,000 for 
CSREES to implement the Veterinary Medicine Loan Repayment Program and 
represented the first time funds had been appropriated for this 
program. In February 2007, the Revised Continuing Appropriations 
Resolution, 2007 (Pub. L. 110-5) appropriated an additional $495,000 to 
CSREES for support of the program, and in December 2007, the

[[Page 32789]]

Consolidated Appropriations Act, 2008 appropriated an additional 
$868,875 to CSREES for support of this program. On March 11, 2009, the 
Omnibus Appropriations Act, 2009 (Pub. L. 111-8) was enacted, providing 
an additional $2,950,000 for the VMLRP. Consequently, there is a 
cumulative total of approximately $4.8 million available for CSREES to 
administer this program. Funding for future years will be based on 
annual appropriations and balances from prior years, and will likely 
vary from year to year.
    Section 7105 of the Food, Conservation, and Energy Act of 2008, 
Public Law 110-246 (FCEA) amended section 1415A to revise the 
determination of veterinarian shortage situations to consider (1) 
geographical areas that the Secretary determines have a shortage of 
veterinarians; and (2) areas of veterinary practice that the Secretary 
determines have a shortage of veterinarians, such as food animal 
medicine, public health, epidemiology, and food safety. This section 
also added that priority should be given to agreements with 
veterinarians for the practice of food animal medicine in veterinarian 
shortage situations.
    NARETPA section 1415A requires the Secretary, when determining the 
amount of repayment for a year of service by a veterinarian, to 
consider the ability of USDA to maximize the number of agreements from 
the amounts appropriated and to provide an incentive to serve in 
veterinary service shortage areas with the greatest need. This section 
also provides that loan repayments may consist of payments of the 
principal and interest on government and commercial loans received by 
the individual for the attendance of the individual at an accredited 
college of veterinary medicine resulting in a degree of Doctor of 
Veterinary Medicine or the equivalent. Please note that this program is 
not authorized to provide repayments for any government or commercial 
loans incurred during the pursuit of another degree, such as an 
associate or bachelor degree and, consequently, any consolidated loans 
(e.g., combined loans for bachelor and Doctor of Veterinary Medicine 
degrees). Loans eligible for repayment include educational loans made 
for one or more of the following: Loans for tuition expenses; other 
reasonable educational expenses, including fees, books, and laboratory 
expenses, incurred by the individual; and reasonable living expenses as 
determined by the Secretary. In addition, the Secretary is directed to 
make such additional payments to participants as the Secretary 
determines appropriate for the purpose of providing reimbursements to 
participants for individual tax liability resulting from participation 
in this program. Finally, this section requires USDA to promulgate 
regulations within 270 days of the enactment of FCEA (i.e., June 18, 
2008). The Secretary delegated the authority to carry out this program 
to CSREES.

Solicitation of Stakeholder Input

    On August 29, 2008, CSREES published a Federal Register notice [73 
FR 50928-50929] announcing a public meeting to be held on Monday, 
September 15, 2008, at the Waterfront Centre in Washington, DC, to 
solicit stakeholder input as well as the instructions on how to submit 
written comments by Tuesday, September 30, 2008, on the implementation 
of VMLRP.
    CSREES received oral and written comments from the following 
veterinary professional associations and organizations: American 
Veterinary Medical Association (AVMA), Association of American 
Veterinary Medical Colleges (AAVMC), American College of Veterinary 
Microbiologists (ACVM), American Association of Veterinary Laboratory 
Diagnosticians (AAVLD), American College of Veterinary Pathologists 
(ACVP), National Cattlemen's Beef Association (NCBA), Texas Cattle 
Feeders Association (TCFA), and Ohio's Cattlemen Association (OCA) as 
well as a comprehensive joint statement from AVMA and the AAVMC. In 
addition, CSREES received 27 comments from individuals, most of whom 
were students at veterinary colleges. CSREES considered all comments 
received in the development of this interim rule.
    As the trade association of America's cattle farmers and ranchers, 
the NCBA commented that the implementation of VMLRP would ``ease the 
shortage of veterinarians in rural areas, encourage more veterinarians 
to go into food animal practice, retain food animal veterinarians in 
rural practices, and help better protect our nation's livestock 
herds.'' The NCBA further commented that livestock producers rely on 
their local veterinarian for guidance to ensure herd management, 
disease control, and food product safety; and that the increased 
complexity of pharmaceutical and biological product use requires 
additional veterinarian supervision for producers. The NCBA believes 
that practicing food animal veterinarians is the veterinarian shortage 
situation with the greatest need. In addition, NCBA feels strongly that 
the program must be simple and uncomplicated and that administrative 
costs must be minimized to maximize the number of agreements executed. 
The TCFA submitted a comment stating that they agree with and support 
the NCBA comments.
    The OCA urged USDA not to stray from the original intent of the 
legislation to increase the number of practicing food animal 
veterinarians in rural areas. OCA also stated that Ohio has a very 
significant shortage of food animal veterinarians and that this program 
would provide an incentive for veterinarians to practice in underserved 
rural areas. OCA encouraged flexibility in determining the veterinarian 
shortage situation as sometimes the lack of food animal veterinarians 
actually contributes to a reduced number of livestock in the area. 
Finally, OCA commented on the important role that food animal 
veterinarians play in the production of a safe and wholesome food 
supply.
    The ACVM, the AAVLD, and the ACVP commented that there are acute 
shortages of trained veterinarians in disciplines such as pathology, 
microbiology, toxicology, and parasitology and that often these 
specialized disciplines require an additional three years of study 
which contributes to the student debt load, thus presenting a potential 
barrier to students wishing to pursue further study in these 
disciplines. These disciplines contribute to the animal, human, and 
environmental health and the economic well-being of society by engaging 
in some of the following objectives and activities: Diagnosing disease 
in food-producing and companion animals (i.e., pets); ensuring safety 
in food, pharmaceuticals and biological products; and maintaining 
vigilance against outbreaks of new and emerging diseases. The AAVLD 
commented that it has recognized for a number of years a severe 
shortage of veterinarians to staff its diagnostic laboratories. AAVLD 
laboratories work with USDA in surveillance for, response to, and 
recovery from foreign animal diseases, and recognition of emerging 
diseases, primarily through the National Animal Health Laboratory 
Network (NAHLN). According to AAVLD, many of its laboratories work 
closely with the Center for Disease Control (CDC) in the Laboratory 
Response Network (LRN), or with the Food and Drug Administration (FDA) 
in the Food Emergency Response Network (FERN). All three organizations 
commented that they wished the VMLRP would be made available to 
veterinarians willing to pursue residencies or advanced degrees in the 
above-mentioned disciplines.
    In their joint comprehensive set of comments, the AVMA and the 
AAVMC

[[Page 32790]]

stated that it is essential for the nation to address the well 
documented critical workforce shortages in veterinarians pursuing 
careers in food animal science, food safety, and public health. They 
continued their veterinary shortage discussion by commenting that the 
VMLRP will help address the growing disparities in the numbers and 
types of veterinarians practicing in rural and other underserved 
locations across the country as well as in areas of veterinary practice 
with a shortage of veterinarians. According to the statistics provided 
by the AVMA and the AAVMC, only about 10 percent of the veterinarians 
practicing in the United States today work in the food animal practice 
versus 100 percent at the beginning of the last century. In addition, 
there will continue to be a shortage of veterinarians in food safety 
and public health. They also cited the significant number of new 
veterinarians electing to enter companion animal medicine for several 
reasons, one of which is that the salary level is often higher than in 
food animal medicine. AVMA and AAVMC also stated that ``one of the most 
daunting obstacles standing in the way of students pursuing a career in 
food animal medicine is educational debt.'' They noted that the average 
student debt for a veterinary school graduate exceeded $106,000 in 2007 
and to repay that sum over a 10-year period would average about $1,200 
a month. The AVMA and AAVMC concluded their discussion of the need for 
the VMLRP by stating that the highest paying jobs in each of the 
practice categories are typically determined by geography and that jobs 
in rural areas, where most of the food animal practitioners are in the 
highest demand, often pay less due to demographics and other economic 
conditions.
    The AVMA and the AAVMC recommended that the loan repayment 
agreements be for four years with the average annual loan repayment 
(exclusive of payments for tax liability) ranging from $25,000 to 
$40,000 per year over the agreement period. They recommended that 90 
percent of the agreements be targeted to veterinarians practicing food 
animal medicine in any underserved area and to food animal medicine 
veterinarians practicing in rural areas (i.e., with a mixed practice in 
which at least 30 percent of the practice is devoted to food animals). 
They further recommended that 10 percent be used to attract and retain 
veterinarians to critical veterinarian shortage situations in food 
safety and public health.
    The AVMA and the AAVMC recommended that the Secretary, under the 
guidance of the Federal and state veterinarians, designate the 
veterinary shortage situations. They felt that these shortage 
situations are best determined at the state level. With regard to 
designation of a veterinary shortage situation, the AVMA and the AAVMC 
recommended that the nominations for these situations address risk, 
activity, and objective. They recommended CSREES assemble an official 
review panel of qualified individuals to review the nominations for 
designation of various shortage situations submitted by the states. In 
2007, the AVMA compiled the Food Supply Veterinary Medicine Data Maps 
which can be found at https://www.avma.org/fsvm/maps/default.asp. As 
part of their joint comments, AVMA suggested that the data compiled in 
these maps may be useful in designating veterinarian shortage areas, 
particularly those related to food animal practices, and they stated 
that they were committed to keeping this information up-to-date. AVMA 
and AAVMC also made specific comments on the solicitation, selection 
criteria, and the administration of these loan repayment agreements, 
particularly the terms and conditions of these awards. For example, 
they recommended that eligibility not be limited to recent graduates 
and that CSREES explore the possibility of entering into an agreement 
with a service provider to administer the program.
    Twenty-three of the 27 comments received were from veterinary 
medical students who discussed at great length their significant future 
debt loads after graduation, averaging from $100,000 to more than 
$300,000 in some cases when combined with the debt incurred during 
their undergraduate education. Most student respondents would be 
willing to locate to an underserved rural area or other critical 
veterinarian shortage situation (e.g., food safety or public health) to 
practice food animal medicine. They also would be willing on average to 
agree to serve in that area from three to six years if a significant 
amount of their student loan debt was repaid through this program, at 
the rate of $20,000 per year. Many felt that the combined financial 
commitment by USDA and a time commitment by the veterinarian to 
practicing in the veterinarian shortage situation would result in the 
practicing veterinarian making a long-term commitment to the community. 
Most student respondents either had a desire or a potential interest in 
practicing food animal medicine full-time or in a mixed animal 
practice. Most indicated that they would probably continue serving in 
the community after the expiration of their service agreement. Most 
indicated that the looming debt and the monthly payments as well as 
their start-up costs (personal and professional) were driving them to 
consider other practices and other geographic areas to attain a certain 
level of income sufficient to make their monthly student loan payments.
    One student recommended that the loan repayments be tax free. 
However, the authorizing act, National Veterinary Medicine Service Act, 
while not making these payments non-taxable, does include a provision 
for USDA to pay the tax liability incurred by VMLRP participants as a 
result of receiving these loan repayments. There was also a suggestion 
to allow participants to transfer from one shortage situation to 
another within the period of the service agreement.
    In response to stakeholder input, CSREES will be awarding VMLRP 
loan repayment agreements in amounts ranging up to $25,000 for the 
first three or four years (with a minimum of three years). In addition, 
CSREES will be paying an amount up to 39 percent of the total amount of 
loan repayments made in a calendar year to reimburse program 
participants for the tax liability incurred as a result of their 
participation in VMLRP. Consequently, for each VMLRP participant, the 
loan repayment amounts plus the tax liability payments would be 
reported as income on the form 1099-G, Certain Government Payments, 
each calendar year.
    In addition, CSREES is considering a small pilot program to 
implement the service in an emergency component of the VMLRP for a 
limited number of agreements. Potential agreements will be identified 
during the designation of the veterinary shortage situations. The 
emergency situations referred to in this Part are emergencies related 
to pandemics, zoonotic outbreaks, or other food supply emergencies, as 
determined by the Secretary, and do not include emergencies related to 
armed conflict. Successful applicants for these annual agreements may 
receive an additional loan repayment amount of up to $5,000 per year, 
plus an amount up to 39 percent of the amount of annual loan repayment 
made under the program, and will be required to serve no more than 60 
days per year. Emergency responders will receive a salary for the 
period of emergency service, as determined by the Secretary, and will 
be reimbursed for travel and per diem expenses as appropriate for the 
duration of service. These agreements will be in addition to the 
primary VMLRP agreement. CSREES will identify which veterinarian 
shortage situations are

[[Page 32791]]

eligible for this type of agreement in the Request for Applications 
(RFA) for the VMLRP loan repayment applications from individual 
veterinarians.
    Based on the stakeholder input received, the available funding for 
the program at this time, experiences of other Federal loan repayment 
programs, such as the NIH Division of Loan Repayment extramural 
programs, and the goals of the VMLRP program, CSREES believes that 
$25,000, per year in loan repayments for a minimum of three or four 
years, plus an amount sufficient to cover the additional tax liability, 
is an adequate incentive for VMLRP participants to relocate to 
veterinarian shortage situations critical to the security of our 
Nation's food supply and the health and safety of people, food animals, 
and the environment. CSREES anticipates that about 40 VMLRP agreements 
with be executed the first year. This approach will allow individual 
participants to reduce their qualifying educational debt within a 3- or 
4-year time period and meet their additional tax liability while 
serving in shortage areas with the greatest need.
    As recommended by AVMA and AAVMC, CSREES is negotiating with the 
National Institutes of Health (NIH) Division of Loan Repayment (DLR) to 
provide certain administrative services and support. These services may 
include the receipt of individual applications, initial administrative 
review of applications, verification and certification of selected 
applicants as being eligible to participate, payments to actual loan 
providers, tax liability payments, and monitoring and reporting 
functions. CSREES has entered into an interagency agreement with the 
NIH DLR to determine the feasibility of NIH DLR performing some of 
these functions for CSREES. The NIH DLR currently manages a portfolio 
of eight NIH loan repayment programs, five of which are extramural 
programs, with an annual budget of approximately $75 million. For the 
NIH extramural programs, the NIH DLR received over 3,000 applications 
and made over 1,600 awards in fiscal year (FY) 2007. The NIH DLR 
maintains a state-of-the-art system that manages the entire process 
from application through close-out. CSREES feels that it is in the best 
interest of potential applicants and VMLRP participants, as well as the 
Federal government, for CSREES to work with the NIH DLR on this 
initiative. Please note that CSREES will still be responsible for the 
determination of the veterinarian shortage situations, peer review of 
the individual VMLRP applications, and overall oversight and 
coordination of the VMLRP. The CSREES Web site for the VMLRP is 
available at https://wwww.csrees.usda.gov/nea/education/in_focus/vmlrp/html and will be updated, as appropriate. Please note that any VMLRP 
applicant and participant interfaces will be conducted via the CSREES 
Web site. Additional information about the NIH DLR is available at 
https://www.lrp.nih.gov.

Consideration of Stakeholder Input and the Interim Process and 
Procedures for the Designation of Veterinarian Shortage Situations

    CSREES was very appreciative of the stakeholder input that was 
received during the recent comment period. Based on these comments and 
other research and analysis conducted, CSREES has determined to issue 
two subparts for this Part: Subpart A, Designation of Veterinarian 
Shortage Situations, and Subpart B, Administration of the VMLRP. As 
recommended by the AVMA and the AAVMC, CSREES will solicit, via a 
notice (published in the Federal Register and on the CSREES Web site), 
the veterinarian shortage situations from the State animal health 
official in each state. Nominators will be requested to submit to a 
designated e-mail box a Form--CSREES XXXX, VMLRP Veterinarian Shortage 
Situation Nomination, which will be available on the CSREES Web site at 
https://www.csrees.usda.gov/nea/education/in_focus/vmlrp.html.
    Respondents will be required to identify the geographic location of 
the veterinarian shortage situation, as well as the area of practice. 
The area of practice includes private food animal science medicine (at 
least 80 percent of the practice), private mixed animal medicine (at 
least 30 percent of the practice dedicated to food animal medicine), 
food safety (identify employer and position), epidemiology (identify 
employer and position), public health (identify employer and position), 
and other (identify practice, employer, and position). The practice of 
private mixed animal medicine will only be considered for a 
veterinarian shortage situation in a rural area as defined in 7 CFR 
3431.3. For the purposes of the VMLRP, CSREES is adopting the 
definition of rural area found in section 343(a) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1991(a)(13)(A)). Respondents 
will then be requested to address four additional questions about the 
objectives, activities, and risk associated with the situation/position 
not being secured or retained as well as past efforts to recruit for 
and/or retain this position. Finally, respondents will be asked to 
identify if, how, and why this position may be considered for a 
secondary loan repayment agreement for service in an emergency.
    CSREES intends to solicit these nominations for a 60-day period. 
Shortly thereafter, CSREES will convene a panel of food supply 
veterinary medicine experts from Federal and state agencies, as well as 
institutions receiving Animal Health and Disease Research Program funds 
under section 1433 of NARETPA, who will review the nominations and make 
recommendations to the CSREES Program Manager. CSREES explored the 
possibly of including experts from professional organizations for this 
process, but under the National Agricultural Research, Extension, and 
Teaching Policy Act (NARETPA) section 1409A(e), panelists for the 
purposes of this process are limited to Federal and State agencies and 
cooperating state institutions (i.e., NARETPA section 1433 recipients).
    The VMLRP Program Manager will then review the recommendations and 
designate the VMLRP shortage situations. The list of shortage 
situations will be published in the Federal Register and will be made 
available on the CSREES Web site at https://csrees.usda.gov/nea/education/in_focus/vmlrp.html.
    Upon designation of the veterinarian shortage situations, CSREES 
will publish in the Federal Register and on the Agency's Web site a 
Request for Applications (RFA) for the VMLRP with applications due 
within 90 days. This is the same length of time that the NIH provides 
applicants under its loan repayment programs. Applicants would then 
submit an application through the CSREES VMLRP Web site. A loan 
repayment service provider will work with the CSREES Office of 
Extramural Programs (OEP), the office responsible for administration 
and payment of all CSREES Federal assistance awards, throughout the 
application and administration of the VMLRP. Ineligible applicants will 
be notified. Applications from eligible applicants will be forwarded to 
CSREES. CSREES will submit the applications to a peer review panel 
comprised of food supply veterinary medicine experts from the Federal 
and state agencies, colleges and universities, professional 
organizations, and other interested stakeholders. This peer review 
panel will review and evaluate applications from individual 
veterinarians and make recommendations to the VMLRP Program Manager. 
After the VMLRP

[[Page 32792]]

Program Manager prepares the final list of potential awardees for each 
shortage situation, a second level review is conducted to ensure 
fairness and integrity of the process. This final list of potential 
awardees is forwarded to OEP for a final administrative review and 
execution of the VMLRP loan repayment agreements. As noted previously, 
Subpart B of this Part will provide the policies and procedures from 
the RFA through the closeout of the agreement, such as tax liability 
payments, reporting, payment schedule, and terms and conditions for the 
agreements.
    For the purposes of this regulation, CSREES is adopting the 
definition of ``food supply veterinary medicine'' from the Food Supply 
Veterinary Medicine (FSVM) Coalition Report entitled ``Estimating FSVM 
Demand and Maintaining the Availability of Veterinarians for Careers in 
Food Supply Related Disciplines in the United States and Canada,'' and 
the ``practice of veterinary medicine'' from the Model Veterinary 
Practice Act (Approved by the AVMA Executive Board, November 2003, 
revised April 2007, November 2007). CSREES developed a definition of 
``practice of food supply veterinary medicine'' to include the 
practices contributing to the production of a safe and wholesome food 
supply and to animal, human, and environmental health. This definition 
incorporates the legislative intent of VMLRP and the adopted definition 
of ``food supply veterinary medicine.'' CSREES also adopted a 
definition of ``food animal'' for the purposes of this regulation so 
that it was clear to the public what is a ``food animal,'' while 
providing flexibility to the Secretary to consider other ``food 
animals,'' if appropriate.
    USDA appreciates the efforts of the AVMA in compiling the Food 
Supply Veterinary Medicine Data Maps which can be found at https://www.avma.org/fsvm/maps/default.asp and will be encouraging States to 
use the data contained in these maps to justify their veterinarian 
shortage situation.

Consideration of Stakeholder Input and Administration of the VMLRP

    CSREES considered and included many of the recommendations of the 
AVMA and the AAVMC in the development of the administrative provisions 
for the VMLRP. USDA is initially capping annual loan repayment of 
principal and interest of qualifying loans to $25,000 and the payments 
for the additional tax liability incurred to no more than 39 percent of 
the annual loan repayments. This will allow CSREES to maximize the 
number of service agreements in accordance with the authorizing program 
legislation, while providing sufficient debt relief to attract 
potential VMLRP participants committed to serve in veterinarian 
shortage situations. However, these interim regulations allow the 
Secretary of Agriculture to adjust the cap under Sec.  3431.13(b), if 
appropriate. Any changes in the caps will be addressed in the RFA.
    Please note that the solicitation for veterinary shortage 
situations and the VMLRP RFA will provide more specific details on the 
administration of the program. In addition, CSREES will establish a 
dedicated set of Web pages to the VMLRP similar to the Web pages 
established for the NIH loan repayment programs.

Timeline for Implementing the Program

    This regulation is being published as ``final interim'' to allow 
CSREES to implement the program immediately. CSREES felt confident that 
this was the best approach for all given the delays in program 
implementation; the statutory requirement to promulgate regulations 
within 270 days of the enactment of the FCEA; the consideration and 
adoption of the stakeholder input received during the public meeting 
and comment period; the adoption, to the extent practical, of the NIH 
DLR best business practices for loan repayment programs; and the 
potential partnering of CSREES with the NIH DLR on this effort. 
However, CSREES is soliciting comments to consider and incorporate in 
the final rule.
    CSREES anticipates soliciting for the veterinarian shortage 
situations via a Federal Register notice in September 2009 (open for 60 
days) after the conclusion of the comment period for the associated 
information collection and approval by OMB of this information 
collection. At the same time, CSREES will continue to work with the NIH 
DLR on adapting the NIH DLR application forms for use by VMLRP as well 
as developing the other associated business processes (e.g., reporting, 
payments). CSREES anticipates soliciting for VMLRP participants in late 
fall 2009 or early winter 2010 (open for 90 days).
    Although this interim regulation addresses most of the policies 
associated with this program, CSREES plans to create informational Web 
pages (providing detailed information and procedures) for the program 
similar to the pages created for the NIH DLR programs.

Administrative Requirements for the Interim Rulemaking

Executive Order 12866

    The Office of Management and Budget has reviewed this interim rule 
because while it is not economically significant, it partially 
implements the Veterinary Medicine Loan Repayment Program (VMLRP). This 
interim rule will not materially alter the budgetary impact of 
entitlements, grants, user fees, or loan programs; nor will it have an 
annual effect on the economy of $100 million or more; nor will it 
adversely affect the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities in a material way. 
Furthermore, it does not raise a novel legal or policy issue arising 
out of legal mandates, the President's priorities or principles set 
forth in the Executive Order.

Regulatory Flexibility Act of 1980

    This interim rule has been reviewed in accordance with the 
Regulatory Flexibility Act of 1980, as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601-612. The 
Department concluded that the rule does not involve regulatory and 
informational requirements regarding businesses, organizations, and 
governmental jurisdictions subject to regulation.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501, et seq.) and Office of Management and Budget (OMB) implementing 
regulations (5 CFR part 1320), this notice announces the Cooperative 
State Research, Education, and Extension Service's (CSREES) intention 
to request approval to establish an information collection for the 
purposes of submitting a nomination for the designation of a 
veterinarian shortage situation in response to a solicitation 
requesting nominations from the animal health official in each state.
    Written comments on this notice must be received by September 8, 
2009 to be assured of consideration. Comments received after that date 
will be considered to the extent practicable.
    You may submit comments, identified by Docket ID CSREES-
2009-0004, by any of the following methods: Federal eRulemaking Portal: 
https://regulations.gov. Follow the instructions for submitting 
comments. E-mail: jhitchcock@csrees.usda.gov; Mail: Jason Hitchcock, 
Information Systems and Technology Management, USDA/

[[Page 32793]]

CSREES, STOP 2216, 1400 Independence Avenue, SW., Washington, DC 20250-
2216; Hand Delivery/Courier: Jason Hitchcock, Information Systems and 
Technology Management, USDA/CSREES, 800 9th Street, SW., Room 4217, 
Waterfront Centre, Washington, DC 20024; Fax: 202-720-0857.

FOR FURTHER INFORMATION CONTACT: Jason Hitchcock, (202) 720-4343. 
Information is also available at https://www.csrees.usda.gov/nea/education/in_focus/vmlrp.html.
    Title: VMLRP Veterinarian Shortage Situation Nomination.
    OMB Number: 0524-00XX.
    Type of Request: Intent to request approval to establish an 
information collection.
    Abstract: CSREES is establishing the process and procedures for 
designating veterinarian shortage situations for the Veterinary 
Medicine Loan Repayment Program (VMLRP) as authorized under section 
1415A of the National Agricultural Research, Extension, and Teaching 
Policy Act of 1977 (NARETPA). This information collection applies to 
Subpart A of 7 CFR part 3431.
    Need and Use of the Information: CSREES will be requesting the 
animal health official in each state to submit the VMLRP Veterinarian 
Shortage Situation Nomination Form, for each situation or position for 
which there is a critical shortage of practicing veterinarians. CSREES 
plans to publish a solicitation for these veterinarian shortage 
situations, requesting that State animal health officials provide 
nominations by submitting this form. This form will be available at the 
CSREES Web site as a PDF-fillable document (to be e-mailed, faxed, or 
mailed), and includes questions requiring check boxes or text with a 
word limitation to minimize the burden. These nomination forms will be 
reviewed and evaluated by a panel according to the criteria identified 
in the published solicitation. From these evaluations, the VMLRP 
Program Director may designate the most highly recommended shortage 
situations according to criteria identified in the solicitation. These 
situations will later be identified in the Request for Applications 
(RFA) for VMLRP loan repayment applications (from individual 
veterinarians).
    Estimate of Burden: It is estimated that it will take approximately 
two hours to complete this PDF-fillable form with checkboxes and text-
limiting fields to minimize the overall burden.
    Respondents: Animal Health Official in each State.
    Estimated Number of Respondents: 57 respondents.
    Estimated Number of Responses: 114 responses (average of 2 per 
State).
    Estimated Total Annual Burden on Respondents: 228 hours.
    Comments: Comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions; (c) ways to enhance the 
quality, utility and clarity of the information to be collected; and 
(d) ways to minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology.
    Obtaining a Copy of the Information Collection: A copy of the 
information collection and related instructions may be obtained free of 
charge by contacting Jason Hitchcock by telephone, (202) 720-4343, or 
by e-mail, jhitchcock@csrees.usda.gov. Information also is available at 
https://www.csrees.usda.gov/nea/education/in_focus/lvmlrp.html. When 
the VMLRP application forms and participant reporting requirements 
(i.e., the information collection requirements under Subpart B) are 
finalized, CSREES intends to publish another Federal Register notice 
announcing its intent to seek OMB approval for the information 
collection requirements under Subpart B.

Catalog of Federal Domestic Assistance

    This interim regulation applies to the following Federal assistance 
program administered by CSREES, Catalog of Federal Domestic Assistance 
(CFDA) No. 10.313, Veterinary Medicine Loan Repayment Program (VMLRP).

Unfunded Mandates Reform Act of 1995 and Executive Order 13132

    The Department has reviewed this interim rule in accordance with 
the requirements of Executive Order No. 13132, 64 FR 43225 (August 10, 
1999) and the Unfunded Mandates Act of 1995, 2 U.S.C. 1501 et seq., and 
has found no potential or substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. As there is no Federal mandate contained herein that 
could result in increased expenditures by State, local tribal 
governments or by the private sector, the department has not prepared a 
budgetary impact statement.

Executive Order 13175: Consultation and Coordination With Indian Tribal 
Governments

    The Department has reviewed this interim rule in accordance with 
Executive Order 13175, 65 FR 67249 (Nov. 9, 2000), and has determined 
that it does not have ``tribal implications.'' The interim rule does 
not ``have substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and Indian Tribes, or 
on the distribution of power and responsibilities between the Federal 
government and Indian tribes.''

Clarity of This Regulation

    Executive Order 12866, 58 FR 51735 (September 30, 1993), and the 
President's memorandum of June 1, 1998, require each agency to write 
all rules in plain language. The Department invites comments on how to 
make this interim rule easier to understand.

List of Subjects in Part 3431

    Administrative practice and procedure; Agricultural research, 
education, extension; Veterinarians; Federal assistance.

0
For the reasons discussed in the preamble, the Cooperative State 
Research, Education, and Extension Service amends Chapter XXXIV of 
Title 7 of the Code of Federal Regulations to add Part 3431 to read as 
follows.

PART 3431--VETERINARY MEDICINE LOAN REPAYMENT PROGRAM

Subpart A--Designation of Veterinarian Shortage Situations
Sec.
3431.1 Applicability of regulations.
3431.2 Purpose.
3431.3 Definitions and acronyms.
3431.4 Solicitation of stakeholder input.
3431.5 Solicitation of veterinarian shortage situations.
3431.6 Review of nominations.
3431.7 Notification and use of designated veterinarian shortage 
situations.
Subpart B--Administration of the Veterinary Medicine Loan Repayment 
Program
3431.8 Purpose and scope.
3431.9 Eligibility to apply.
3431.10 Eligibility to participate.
3431.11 Application.
3431.12 Selection of applicants.
3431.13 Terms of loan repayment and length of service requirements.
3431.14 Priority.
3431.15 Qualifying loans.
3431.16 Certifications and verifications.
3431.17 VMLRP service agreement offer.

[[Page 32794]]

3431.18 Service agreement.
3431.19 Payment and tax liability.
3432.20 Administration.
3432.21 Breach.
3432.22 Waiver.
3432.23 Service to Federal government in emergency situations.
3431.24 Reporting requirements, monitoring, and close-out.

    Authority:  7 U.S.C. 3151a; Public Law 106-107 (31 U.S.C. 6101 
note).


Sec.  3431.1  Applicability of regulations.

    This part establishes the process and procedures for designating 
veterinarian shortage situations as well as the administrative 
provisions for the Veterinary Medicine Loan Repayment Program (VMLRP) 
authorized by the National Veterinary Medical Service Act (NVMSA), 7 
U.S.C. 3151a.


Sec.  3431.2  Purpose.

    The Secretary will follow the processes and procedures established 
in Subpart A to designate veterinarian shortage situations for the 
VMLRP. Applications for the VMLRP will be accepted from eligible 
veterinarians who agree to serve in one of the designated shortage 
situations in exchange for the repayment of an amount of the principal 
and interest of the veterinarian's qualifying educational loans. The 
administrative provisions for the VMLRP, including the application 
process, are established in Subpart B.


Sec.  3431.3  Definitions and acronyms.

    (a) General definitions.
    Act means the National Veterinary Medical Service Act, as amended.
    Agency or CSREES means the Cooperative State Research, Education, 
and Extension Service.
    Department means the United States Department of Agriculture.
    Food animal means the following species: bovine, porcine, ovine/
camelid, cervid, poultry, and any other species as determined by the 
Secretary.
    Food supply veterinary medicine means all aspects of veterinary 
medicine's involvement in food supply systems, from traditional 
agricultural production to consumption.
    Insular area means the Commonwealth of Puerto Rico, Guam, American 
Samoa, the Commonwealth of the Northern Mariana Islands, the Federated 
States of Micronesia, the Republic of the Marshall Islands, the 
Republic of Palau, and the Virgin Islands of the United States.
    NVMSA means the National Veterinary Medicine Service Act.
    Practice of food supply veterinary medicine includes corporate/
private practices devoted to food animal medicine, mixed animal 
medicine located in a rural area (at least 30 percent of practice 
devoted to food animal medicine), food safety, epidemiology, public 
health, and other practices that contribute to the production of a safe 
and wholesome food supply.
    Practice of veterinary medicine means:
    (1) To diagnose, treat, correct, change, alleviate, or prevent 
animal disease, illness, pain, deformity, defect, injury, or other 
physical, dental, or mental conditions by any method or mode; 
including:
    (i) The prescription, dispensing, administration, or application of 
any drug, medicine, biologic, apparatus, anesthetic, or other 
therapeutic or diagnostic substance or medical or surgical technique, 
or
    (ii) The use of complementary, alternative, and integrative 
therapies, or
    (iii) The use of any manual or mechanical procedure for 
reproductive management, or
    (iv) The rendering of advice or recommendation by any means 
including telephonic and other electronic communications with regard to 
any of paragraphs (1)(i),(ii),(iii), or (iv) of this definition.
    Rural area means any area other than a city or town that has a 
population of 50,000 inhabitants and the urbanized area contiguous and 
adjacent to such a city or town.
    Secretary means the Secretary of Agriculture and any other officer 
or employee of the Department to whom the authority involved has been 
delegated.
    Service area means geographic area in which the veterinarian will 
be providing veterinary medical services.
    State means any one of the fifty states, the District of Columbia, 
and the insular areas of the United States, including the Commonwealth 
of Puerto Rico; Guam; American Samoa; the Commonwealth of the Northern 
Mariana Islands; the Federated States of Micronesia; the Republic of 
the Marshall Islands; the Republic of Palau; and the Virgin Islands of 
the United States.
    State animal health official means the State veterinarian, or 
equivalent, who will be responsible for nominating and certifying 
veterinarian shortage situations within the State.
    Veterinarian means a person who has received a professional 
veterinary medicine degree from an accredited college of veterinary 
medicine.
    Veterinary medicine means all branches and specialties included 
within the practice of veterinary medicine.
    Veterinary Medicine Loan Repayment Program or VMLRP means the 
Veterinary Medicine Loan Repayment Program authorized by the National 
Veterinary Medical Service Act.
    Veterinarian shortage situation means any of the following 
situations in which the Secretary, in accordance with the process in 
Subpart A, determines has a shortage of veterinarians:
    (1) Geographical areas that the Secretary determines have a 
shortage of food supply veterinarians; and
    (2) Areas of veterinary practice that the Secretary determines have 
a shortage of food supply veterinarians, such as food animal medicine, 
public health, epidemiology, and food safety.
    (b) Definitions applicable to Subpart B.
    Applicant means an individual who applies to and meets the 
eligibility criteria for the VMLRP.
    Breach of agreement results when a participant fails to complete 
the service agreement obligation required under the terms and 
conditions of the agreement and will be subject to assessment of 
monetary damages and penalties as determined in the service agreement, 
unless a waiver has been granted or an exception applies.
    Current payment status means that a qualified educational loan is 
not past due in its payment schedule as determined by the lending 
institution.
    Debt threshold means the minimum amount of qualified student debt 
an individual must have, on their program eligibility date, in order to 
be eligible for program benefits, as determined by the Secretary.
    Program eligibility date means the date on which an individual's 
VMLRP agreement is executed by the Secretary.
    Program participant means an individual whose application to the 
VMLRP has been approved and whose service agreement has been accepted 
and signed by the Secretary.
    Qualifying educational expenses means the costs of attendance of 
the applicant at an accredited college of veterinary medicine, 
exclusive of the tuition and reasonable living expenses. Educational 
expenses may include fees, books, laboratory expenses and materials, as 
required by an accredited college or school of veterinary medicine as 
part of a Doctor of Veterinary Medicine degree program, or the 
equivalent. The program participant must submit sufficient 
documentation, as required by the Secretary, to substantiate the school 
requirement for the educational expenses incurred by the program 
participant.
    Qualifying educational loans means loans that are issued by any 
U.S.

[[Page 32795]]

government (i.e., Federal, state, or local) entity, accredited U.S. 
academic institution(s), and/or commercial lender(s) that are subject 
to examination and supervision in their capacity as lending 
institutions by an agency of the United States or the state in which 
the lender has its principal place of business. Loans must have been 
made for one or more of the following: School tuition, other qualifying 
educational expenses, or reasonable living expenses relating to the 
obtainment of a degree of Doctor of Veterinary Medicine from an 
accredited college or school of veterinary medicine. Such loans must 
have documentation which is contemporaneous with the training received 
in a college or school of veterinary medicine. If qualifying 
educational loans are refinanced, the original documentation of the 
loan(s) will be required to be submitted to the Secretary to establish 
the contemporaneous nature of such loans.
    Reasonable living expenses means the ordinary living costs incurred 
by the program participant while attending the college of veterinary 
medicine, exclusive of tuition and educational expenses. Reasonable 
living expenses must be incurred during the period of attendance and 
may include food and lodging expenses, insurance, commuting and 
transportation costs. Reasonable living expenses must be equal to or 
less than the sum of the school's estimated standard student budgets 
for living expenses for the degree veterinary medicine for the year(s) 
during which the program participant was enrolled in the school. 
However, if the school attended by the program participant did not have 
a standard student budget or if a program participant requests 
repayment for living expenses which are in excess of the standard 
student budgets described in the preceding sentence, the program 
participant must submit documentation, as required by the Secretary, to 
substantiate the reasonableness of living expenses incurred. To the 
extent that the Secretary determines, upon review of the program 
participant's documentation, that all or a portion of the living 
expenses are reasonable, these expenses will qualify for repayment.
    Service agreement means the agreement, which is signed by an 
applicant and the Secretary for the VMLRP wherein the applicant agrees 
to accept repayment of qualifying educational loans and to serve in 
accordance with the provisions of NVMSA for a prescribed period of 
obligated service.
    Termination means a waiver of the service obligation granted by the 
Secretary when compliance by the participant is impossible, would 
involve extreme hardship, or where enforcement with respect to the 
individual would be unconscionable (see breach of agreement).
    Withdrawal means a request by a participant for withdrawal from 
participation in the VMLRP after signing the service agreement, but 
prior to VMLRP making the first annual payment on behalf of the 
participant. A withdrawal is without penalty to the participant and 
without obligation to the Program.


Sec.  3431.4  Solicitation of stakeholder input.

    The Secretary will solicit stakeholder input on the process and 
procedures used to designate veterinarian shortage situations prior to 
the publication of the solicitation for nomination of veterinarian 
shortage situations. A notice may be published in the Federal Register, 
on the Agency's Web site, or other appropriate format or forum. This 
request for stakeholder input may include the solicitation of input on 
the administration of VMLRP and its impact on meeting critical 
veterinarian shortage situations. All comments will be made available 
and accessible to the public.


Sec.  3431.5  Solicitation of veterinarian shortage situations.

    (a) General. The Secretary will follow the procedures described in 
this part to solicit veterinarian shortage situations as the term is 
defined in Sec.  3431.3.
    (b) Solicitation. The Secretary will publish a solicitation for 
nomination of veterinarian shortage situations in the Federal Register, 
on the Agency's Web site, or other appropriate format or forum.
    (c) Frequency. Contingent on the availability of funds, the 
Secretary will normally publish a solicitation on a biennial basis. 
However, the Secretary reserves the right to solicit veterinarian 
shortage situations every year or every three years, as appropriate.
    (d) Content. The solicitation will describe the nomination process, 
the review criteria and process, and include the form used to submit a 
nomination. The solicitation may specify the maximum number of 
nominations that may be submitted by each State animal health official.
    (e) Nominations. Nominations shall identify the veterinarian 
shortage situation and address the criteria in the nomination form 
which may include the objectives of the position, the activities of the 
position, and the risk posed if the position is not secured.
    (f) Nominating Official. The State animal health official in each 
state may nominate and certify veterinarian shortage situations within 
the State. It is anticipated that the State animal health official of 
each State will involve the leading health animal experts in the State 
in the nomination process.


Sec.  3431.6  Review of nominations.

    (a) Peer panel. State nominations will be evaluated by a peer panel 
of experts in animal health convened by the Secretary. The panel will 
evaluate nominations according to the criteria identified in the 
solicitation. The panel will consider the objectives and activities of 
the veterinarian position in the veterinary service shortage situation 
and the risks associated with not securing or retaining the position 
and make a recommendation regarding each nomination.
    (b) Agency review. The Secretary will evaluate the recommendations 
of the peer panel and designate shortage situations for the VMLRP.


Sec.  3431.7  Notification and use of designated veterinarian shortage 
situations.

    The Secretary will publish the designated veterinarian shortage 
situations on the Agency's Web site and will use the designated 
veterinarian shortage situations to solicit VMLRP loan repayment 
applications from individual veterinarians in accordance with Subpart 
B.

Subpart B--Administration of the Veterinary Medicine Loan Repayment 
Program


Sec.  3432.8  Purpose and scope.

    (a) Purpose. The regulations of this subpart apply to the award of 
veterinary medicine loan repayments under the Veterinary Medicine Loan 
Repayment Program (VMLRP) authorized by the National Veterinary 
Medicine Service Act, 7 U.S.C. 3151a.
    (b) Scope. Under the VMLRP, the Secretary enters into service 
agreements with licensed veterinarians to pay principal and interest on 
education loans of veterinarians who agree to work in veterinary 
shortage situations for a prescribed period of time. In addition, 
program participants may enter into an agreement to provide services to 
the Federal government in emergency situations in exchange for salary, 
travel, per diem expenses, and additional amounts of loan repayment 
assistance. The purpose of the program is to ensure an adequate supply 
of trained food animal veterinarians in shortage situations and provide 
USDA with a pool of veterinary specialists to assist in the control and 
eradication of animal disease outbreaks.

[[Page 32796]]

Sec.  3431.9  Eligibility to apply.

    (a) General. To be eligible to apply to the VMLRP an applicant 
must:
    (1) Have a degree of Doctor of Veterinary Medicine (DVM), or the 
equivalent, from an accredited college of veterinary medicine;
    (2) Have qualifying educational loan debt as defined in Sec.  
3431.3 of this title;
    (3) Secure an offer of employment or establish and/or maintain a 
practice in a veterinary shortage situation, as determined by the 
Secretary in accordance with the procedures in Subpart A, within the 
time period specified in the VMLRP service agreement offer; and
    (4) Provide certifications and verifications in accordance with 
Sec.  3431.16 of this Part.
    (b) Non-eligibility. The following individuals are ineligible to 
apply to the VLMRP:
    (1) An individual who owes an obligation for veterinary service to 
the Federal government, a State, or other entity under an agreement 
with such Federal, State, or other entity is ineligible for the VMLRP 
unless such obligation will be completely satisfied prior to the 
beginning of service under the VMLRP;
    (2) An individual who has a Federal judgment lien against his/her 
property arising from Federal debt; and
    (3) An individual who has consolidated qualifying loans with loans 
not qualifying for repayment under the VMLRP.


Sec.  3431.10  Eligibility to participate.

    To be eligible to participate in the VMLRP, a participant must meet 
the following criteria:
    (a) Meet the eligibility criteria of Sec.  3431.9 for applying to 
the VMLRP;
    (b) Be selected for participation by the Secretary pursuant to 
Sec.  3431.12.
    (c) Be a licensed veterinarian in the jurisdiction in which he or 
she proposes to practice;
    (d) Be a citizen, national, or permanent resident of the United 
States;
    (e) Sign a service agreement to provide veterinary services in one 
of the veterinarian shortage situations; and
    (f) Comply with the terms and conditions of the Service Agreement.


Sec.  3431.11  Application.

    Individuals who meet the eligibility criteria of Sec.  3431.9 may 
submit an online program application or any other application process 
provided by the Secretary.


Sec.  3431.12  Selection of applicants.

    (a) Review of applications. Upon receipt, applications for the 
VMLRP will be reviewed for eligibility and completeness by the 
appropriate staff as determined by the Secretary. Incomplete or 
ineligible applications will not be processed or reviewed.
    (b) Peer review. Applications for the VMLRP that are deemed 
eligible and complete will be referred to the VMLRP peer panel for peer 
review. In evaluating the application, reviewers are directed to 
consider the following components, as well as any other criteria 
identified in the RFA, and how they relate to the likelihood that the 
applicant will meet the terms and conditions of the VMLRP agreement, 
continue to serve in a veterinary shortage situation, or pursue a 
career in food animal veterinary medicine:
    (1) Major or emphasis areas(s) during formal post-secondary 
training (e.g., bachelors degree major, minor);
    (2) Major or emphasis area(s) during formal training for DVM/VMD 
degree;
    (3) Specialty training area/discipline (e.g., board certification 
or graduate degree);
    (4) Non-degree/non-board certification training or certifications 
(e.g., animal agrosecurity coursework and certifications);
    (5) Applicant's personal statement;
    (6) Awards;
    (7) Letters or recommendation, if applicable; and
    (8) Other documentation or criteria, as specified in the RFA.


Sec.  3431.13  Terms of loan repayment and length of service 
requirements.

    (a) Loan repayment. For each year of obligated service in a 
veterinary shortage situation, as determined by the Secretary, with a 
minimum of 3 years (and maximum of 4 years) of obligated service, the 
Secretary may pay:
    (1) An amount not exceeding $25,000 per year of a program 
participant's qualifying loans; and
    (2) An additional amount not exceeding $5,000 per year of a program 
participant's qualifying loans, if the program participant has already 
been selected for participation in the VMLRP and agrees to enter into a 
one-year agreement for each year of service to provide up to 60 days of 
obligated service to the Federal government in animal health emergency 
situations, as determined by the Secretary, provided the shortage 
situation in which the participant has agreed to serve has been 
designated as suitable for the Federal obligated service.
    (b) To maximize the number of agreements and to encourage qualified 
veterinarians to participate in the VMLRP, the Secretary may establish 
a loan repayment cap that differs from the cap established under 
paragraph (a)(1) and (a)(2) of this section when it is in the best 
interest of VMLRP. This will be identified in the RFA.
    (c) The Secretary will determine the debt threshold in the RFA.
    (d) Loan repayments will be made directly to the loan provider on a 
quarterly basis, starting with the end of the first quarter after the 
program eligibility date of the service agreement.
    (e) Once a service agreement has been signed by both parties, the 
Secretary will obligate such funds as will be necessary to ensure that 
sufficient funds will be available to make loan repayments and tax 
payments, as specified in the service agreement, for the duration of 
the period of obligated service. Reimbursements for tax liabilities in 
excess of the amount provided (not to exceed 39 percent of the amount 
of loan repayment) will be subject to the availability of funds. These 
additional tax payments, if available to the VMLRP participants, will 
be identified in the RFA and in the participant service agreement.
    (f) Participants are required to keep payments current on all 
qualifying VMLRP loans.
    (g) Travel expenditures. The VMLRP will not reimburse a program 
participant for expenses associated with traveling from the program 
participant's residence to the prospective practice site for the 
purpose of evaluating such site or the expenses of relocating from the 
program participant's temporary or permanent residence to a practice 
site.


Sec.  3431.14  Priority.

    Pursuant to NVMSA, the Secretary will give priority to agreements 
with veterinarians for the practice of food animal medicine in 
veterinarian shortage situations, as determined by the Secretary. The 
Secretary may establish additional criteria in the RFA for assigning 
priority levels to veterinarian shortage situations nominated for 
award.


Sec.  3431.15  Qualifying loans.

    (a) General. Loan repayments provided under the VMLRP may consist 
of payments on behalf of participating individuals of the principal and 
interest on qualifying educational loans received by the individual for 
attendance of the individual at an accredited college of veterinary 
medicine resulting in a degree of Doctor of Veterinary Medicine, or the 
equivalent, which loans were made for one or more of the following:
    (1) Tuition expenses;
    (2) All other reasonable educational expenses, as defined in this 
part and as determined by the Secretary; and

[[Page 32797]]

    (3) Reasonable living expenses, as defined in this part and as 
determined by the Secretary.
    (b) Non-eligible loans. The following loans are ineligible for 
repayment under the VMLRP:
    (1) Loans not obtained from a bank, credit union, savings and loan 
association, not-for-profit organization, insurance company, school, 
and other financial or credit institution which is subject to 
examination and supervision in its capacity as lending institution by 
an agency of the United States or of the State in which the lender has 
its principal place of business;
    (2) Loans for which supporting documentation is not available;
    (3) Loans that have been consolidated with loans of other 
individuals, such as spouses or children;
    (4) Loans that have been consolidated with loans obtained to attend 
an educational institution other than an accredited veterinary medical 
school;
    (5) Loans or portions of loans obtained for educational or living 
expenses which exceed the standard of reasonableness as determined by 
the participant's standard school budget for the year in which the loan 
was made, and are not determined by the Secretary to be reasonable 
based on additional documentation provided by the individual;
    (6) Loans, financial debts, or service obligations incurred under 
another loan repayment or scholarship program, or similar programs, 
which provide loans, scholarships, loan repayments, or other awards in 
exchange for a future service obligation;
    (