CHAPTER 439

An Act to amend and reenact §§ 28-85.3 and 28-35.5, as amended, of the
Code of Virginia, relating to the authorization of medical and dental
scholarships, providing for written contracts therefor and prescribing
relief from obligations under such contracts. g

[S 210]

Approved March 31, 1960

Be it enacted by the General Assembly of Virginia:
1. That §§ 23-35.3 and 23-35.5, as amended, of the Code of Virginia, be
amended and reenacted as follows:

23-35.3. (a) Before any scholarship is awarded under the provisions
of § 93-35.1 (a), the applicant must sign a written contract, under the terms
of which he agrees to pursue the medical course of the school awarding
the scholarship, or the medical course at the school at which the scholar-
ship is awarded, until his graduation and, upon graduating and completing
a term not to exceed two years as an interne at some hospital or in-
stitution approved by the school, shall promptly begin and thereafter
engage continuously in the general practice of medicine in a rural com-
munity in Virginia of his selection, but his selection shall be from one
approved by the State Health Commissioner and by the State Board
of Health, for a period of years equal in number to the years which
he has been a beneficiary of such scholarship, provided that one year’s
internship in any rural hospital in the State of Virginia selected by the
State Health Commissioner and approved by the State Board of Health or
in any institution operated by the Department of Mental Hygiene and
Hospitals shall be considered equivalent to one year’s practice of medicine
in a rural community. The foregoing shall apply only to contracts made
or entered into prior to July 1, 1954.

(b) Before any scholarship is awarded under the provisions of
§ 23-35.1 (b), the applicant must sign a written contract, under which he
agrees to pursue the dental course of the school awarding the scholarship,
or the dental course at the school at which the scholarship is awarded,
until his graduation and, upon graduating shall promptly begin and there-
after engage continuously in the general practice of dentistry in some
mental institution, or in the public health service or as an employee of the
State Health Department in the State of Virginia, for a period of years
equal in number to the years which he has been a beneficiary of such
scholarship; provided that if the Commissioner of Mental Hygiene and
Hospitals certifies that no suitable vacancy exists in any State mental
institution, then the obligation of such contract may be discharged by
compliance with the conditions set forth in paragraph (a) of this section.

(c) Each recipient, when such scholarship is awarded, shall be re-
quired to insure his life, for the benefit of the school awarding the scholar-
ship, in a sum equal at least to the value of each scholarship awarded him,
the insurance policy to contain a specific provision that the school bene-
ficiary shall not be changed without the consent of the beneficiary. Upon
cancellation of each note executed by the recipient as hereinbefore pro-
vided, the school beneficiary shall consent to such change in the beneficiary
of the corresponding insurance policy as may be designated by the re-
cipient. Upon the failure of the recipient to discharge his obligation either
by service or payment, as herein required, or by reason of his death or by
any other cause, the policy or policies and any and all proceeds derived
therefrom shall become the property of the school beneficiary. All
premiums on the insurance policy or policies shall be paid by the recipient
of the scholarship.

(d) After July 1, 1954, no scholarship shall be awarded under the
provisions of § 23-35.1 (a) unless and until the applicant shall have signed
a written contract under the terms of which he agrees to pursue the
medical course of the school awarding the scholarship, or the medical
course at the school for which the scholarship is awarded, until his gradu-
ation and upon graduation and completing a term not to exceed two years
as an interne at some hospital or institution approved by the school, shall
promptly begin and thereafter engage continuously in the general practice
of medicine in a rural community of Virginia for a period of years equal
to the number of years which he has been a beneficiary of such scholar-
ship. As used herein the terms “general practice of medicine” and “rural
community” shall conform to definitions thereof promulgated by the State
Health Commissioner. The State Health Commissioner may, in his dis-
cretion, direct that all or any portion of the obligations imposed by such
contract be discharged by appointment and service in the public health
service of the State or by service in any institution operated by the De-
partment of Mental Hygiene and Hospitals. The provisions of paragraph
(c) herein shall not apply to scholarships awarded after July 1, 1954.

§ 23-35.5. Any such contract made and entered into before July one,
nineteen hundred and fifty-four shall have a clause under which the holder
may be relieved of his obligation to practice in a rural section or in a
mental institution, as the case may be, if, at the end of two scholastic
years, he has demonstrated a peculiar and unusual ability and aptitude in
a special branch of the medical sciences and, in the opinion of the faculty,
would be a loss to the field of medical research and science if he did not go
into that branch of medical science for which he has demonstrated extra-
ordinary ability. In such case, upon certificate of a faculty committee, the
contract shall provide that he may be released from his obligation and
continue his course without a scholarship, and shall be under no obligation
to engage in general practice in a rural section or in a mental institution
of Virginia for a period equal to that during which he has received such
scholarship; provided that he makes satisfactory arrangements for re-
imbursing the State for the amount he has received on account of such
scholarships. Any such contract made and entered into after July one,
nineteen hundred fifty-four shall have a clause under which the holder
may be relieved of his obligation to practice medicine in a rural community
or a mental institution or to serve in the public health service of the State
as the case may oe if, at any time the holder fails to maintain a scholastic
standard at least equal to the standard required of the general student
body in such school or if the holder, at any time, becomes permanently
disabled so as not to be able to engage in the practice of medicine or if
at any time the holder demonstrates a peculiar and unusual ability and
aptitude in a special branch of the medical sciences and, in the opinion of
the faculty or the State Health Commissioner would be a loss to the field
of medical research and science if he did not go into that branch of medical
science for which he has demonstrated extraordinary ability. In such
case, upon certificate of a faculty committee or the State Health Com-
missioner the contract shall provide that the holder shall be relieved of
his obligation to engage in the general practice of medicine, or to serve
in the public health service of the State or to practice in a mental institu-
tion for a period equal to that during which he has been a beneficiary of
such scholarship. Any applicant, upon being so relieved from the obli-
gations imposed by such contract shall arrange to reimburse the State
within a reasonable time for the amount he has received on account of
such scholarship plus interest on such amount computed at the prevailing
rate charged on student loans at the school attended by the applicant.
Provided, however, if such applicant, or any applicant who for any reason
repays all or any part of the amount received of such scholarships, after
reimbursing such amount plus interest to the State, later fulfills the terms
of his contract by completing his studies and engaging in general practice
ina rural section as provided in § 28-385.38 or in a mental institution of
Virginia or service with State Health Department for a period equal to
that during which he received such scholarship, such applicant shall have
reimbursed to him, from the general fund of the State treasury, the
amount of the scholarship and interest previously repaid to the State.
This reimbursement shall be made on any contract whether heretofore or
hereafter made under the provisions of this section.

Any contract made under this chapter may be terminated after two
years in school after notice, upon repayment of the entire loan with in-
terest at the rate charged on student loans.