HOUSE BILL 512
57th legislature - STATE OF NEW MEXICO - first session, 2025
INTRODUCED BY
Gail Armstrong and Alan T. Martinez and Tanya Mirabal Moya
and Mark Duncan and Mark B. Murphy
AN ACT
RELATING TO HIGHER EDUCATION; ENACTING THE MEDICAL RESIDENCY LOAN REPAYMENT ACT; GRANTING LOAN REPAYMENT AWARDS TO CERTAIN MEDICAL RESIDENTS AND MEDICAL FELLOWS; PROVIDING FOR CONTRACTS, CONTRACT CANCELLATIONS AND CONTRACT ENFORCEMENT; CREATING A FUND; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of Chapter 21 NMSA 1978 is enacted to read:
"[NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Medical Residency Loan Repayment Act"."
SECTION 2. A new section of Chapter 21 NMSA 1978 is enacted to read:
"[NEW MATERIAL] DEFINITIONS.--As used in the Medical Residency Loan Repayment Act:
A. "applicant" means a person applying for an award;
B. "award" means the grant of money to repay loans;
C. "department" means the higher education department;
D. "fund" means the medical residency loan repayment fund;
E. "loan" means a grant of money pursuant to a contract between a medical resident or a medical fellow and the federal government, the state government or a commercial lender to defray the costs incidental to an undergraduate or medical education and that requires either repayment of principal and interest or repayment in services;
F. "medical fellow" means an individual who has completed a medical fellowship in an institution of higher education in New Mexico;
G. "medical resident" means an individual who has completed a medical residency in an institution of higher education in New Mexico; and
H. "program" means the medical residency loan repayment program, which provides money to repay undergraduate
education student loans and loans for medical training."
SECTION 3. A new section of Chapter 21 NMSA 1978 is enacted to read:
"[NEW MATERIAL] POWERS AND DUTIES.--The department may:
A. grant an award to repay loans obtained for
undergraduate education and medical training obtained by a medical resident or medical fellow upon such terms and conditions as may be imposed by rule of the department; and
B. delegate to other agencies or contract for the
performance of services required by the program."
SECTION 4. A new section of Chapter 21 NMSA 1978 is enacted to read:
"[NEW MATERIAL] AWARDS--CRITERIA--CONTRACT TERMS.--
A. An applicant shall have completed a medical residency or medical fellowship program before applying for an award and agreed to work as a physician in New Mexico for five consecutive years upon receiving an award.
B. Prior to receiving an award, a medical resident or medical fellow shall file an application with the department that meets the criteria established by rule of the department.
C. An award recipient shall certify on at least an
annual basis the recipient's continued employment as a physician practicing medicine in New Mexico.
D. The following debts are not eligible for repayment pursuant to the Medical Residency Loan Repayment Act:
(1) amounts incurred as a result of participation in state loan-for-service programs or other state programs the purposes of which state that service be provided in exchange for financial assistance;
(2) scholarships that have a service component or obligation;
(3) personal loans from friends or relatives;
(4) loans that exceed individual standard school expense levels; and
(5) loans that are eligible for another state or federal loan repayment program.
E. Award criteria shall provide that:
(1) the applicant shall have graduated from a medical school accredited by the liaison committee on medical education or the commission on osteopathic college accreditation;
(2) the applicant shall be licensed to practice in New Mexico as a licensed physician;
(3) the applicant shall have completed a medical residency or post-residency fellowship program offered by a New Mexico medical school within the year prior to submitting the application;
(4) the applicant agrees to practice medicine in New Mexico for a minimum of five consecutive years upon receiving an award;
(5) award amounts may be modified based on available funding or other special circumstances; and
(6) an award for an approved applicant shall be in an annual amount to repay the applicant's loan indebtedness within three years.
F. Every loan repayment award shall be evidenced by a contract between the medical resident or medical fellow and the department on behalf of the state. The contract shall provide for the payment by the state of a stated sum to the medical resident's or medical fellow's federal government lender, state government lender or commercial lender and shall state the obligations of the medical resident or medical fellow under the program as established by the department.
G. A contract between a medical resident or medical fellow and the department shall provide that if the medical resident or medical fellow does not comply with the terms of the contract, the medical resident or medical fellow shall reimburse the department for all loan payments made on the medical resident's or medical fellow's behalf plus
reasonable interest at a rate to be determined by the
department unless the department finds acceptable extenuating
circumstances for why the medical resident or medical fellow cannot serve or comply with the terms of the contract.
H. Awards shall be in the form of payments from the fund directly to the federal government lender, state government lender or commercial lender for a medical resident or medical fellow who has received the award and shall be considered a payment on behalf of the medical resident or medical fellow pursuant to the contract between the department and the medical resident or medical fellow. An award shall not obligate the state or the department to a medical resident's or medical fellow's lender for any other payment and shall not be considered to create any privity of contract between the state or the department and the lender.
I. The department shall adopt rules to implement the provisions of the Medical Residency Loan Repayment Act. The rules:
(1) shall provide a procedure for determining
the amount of the loan that will be repaid; and
(2) may provide for the disbursement of awards to the lender in annual or other periodic installments."
SECTION 5. A new section of Chapter 21 NMSA 1978 is enacted to read:
"[NEW MATERIAL] CONTRACTS--ENFORCEMENT--CANCELLATION.--
A. The general form of a contract required pursuant to the Medical Residency Loan Repayment Act shall be
prepared and approved by the department's general counsel, and each contract shall be signed by the medical resident or medical fellow and the secretary of higher education or the secretary's authorized representative on behalf of the state. The department is vested with full and complete authority and power to sue in its own name for any balance due to the state from a medical resident or medical fellow under a loan repayment contract.
B. The department may cancel a contract made between the department and a medical resident or medical fellow pursuant to the Medical Residency Loan Repayment Act for any reasonable cause deemed sufficient by the department."
SECTION 6. A new section of Chapter 21 NMSA 1978 is enacted to read:
"[NEW MATERIAL] MEDICAL RESIDENCY LOAN REPAYMENT
FUND CREATED.--The "medical residency loan repayment fund" is created in the state treasury. The fund consists of appropriations, repayment of awards and interest received by the department, income from investment of the fund, gifts, grants and donations. The fund shall be administered by the department, and money in the fund is appropriated to the department to make awards pursuant to the Medical Residency Loan Repayment Act. Money in the fund at the end of a fiscal year shall not revert to any other fund. All payments for awards shall be made on warrants of the secretary of finance and administration pursuant to vouchers signed by the secretary of higher education or the secretary's authorized representative."
SECTION 7. A new section of Chapter 21 NMSA 1978 is enacted to read:
"[NEW MATERIAL] REPORTS.--The department shall submit annual reports to the governor and the legislature prior to each regular legislative session of the department's activities, the awards granted and the job title and duties of each loan recipient. The report shall also include any contract cancellations and enforcement actions the department has taken."
SECTION 8. APPROPRIATION.--Three million dollars ($3,000,000) is appropriated from the general fund to the medical residency loan repayment fund for expenditure in fiscal year 2026 and subsequent fiscal years for the purposes of the medical residency loan repayment fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
SECTION 9. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2025.
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