HOUSE BILL 306
52nd legislature - STATE OF NEW MEXICO - second session, 2016
INTRODUCED BY
John L. Zimmerman
AN ACT
RELATING TO HIGHER EDUCATION; EXPANDING STUDENT LOAN FOR SERVICE ELIGIBILITY TO NEW MEXICO RESIDENTS WHO ARE ENROLLED IN A SCHOOL OR COLLEGE OF OSTEOPATHIC MEDICINE AND WHO DECLARE AN INTENTION TO PRACTICE WITHIN A DESIGNATED HEALTH PROFESSIONAL SHORTAGE AREA.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 21-22-1 NMSA 1978 (being Laws 1975, Chapter 244, Section 1, as amended) is amended to read:
"21-22-1. SHORT TITLE.--Chapter 21, Article 22 NMSA 1978 may be cited as the "Medical and Osteopathic Student Loan for Service Act"."
SECTION 2. Section 21-22-2 NMSA 1978 (being Laws 1975, Chapter 244, Section 2, as amended) is amended to read:
"21-22-2. PURPOSE.--The purpose of the Medical and Osteopathic Student Loan for Service Act is to meet the emergency currently existing resulting from the shortage of medical doctors, osteopathic physicians and physician assistants in the less populated areas of the state by increasing the number of practitioners in rural areas through a program of loans for medical, osteopathic and physician assistant students. The program shall require as a condition of each loan that the student declare [his] the intent that after licensure [he] the student will commence [his] the practice of medicine or osteopathic medicine within one of the areas of the state designated by the [commission] department."
SECTION 3. Section 21-22-3 NMSA 1978 (being Laws 1975, Chapter 244, Section 3, as amended) is amended to read:
"21-22-3. DEFINITIONS.--As used in the Medical and Osteopathic Student Loan for Service Act:
A. ["commission"] "department" means the [commission on] higher education department;
B. "loan" means a grant of funds to defray the costs incidental to a medical or osteopathic education, under a contract between the [commission] department and a [medical] student, requiring either repayment with interest or repayment in services; [and]
C. "physician assistant" means a person licensed pursuant to the provisions of the Physician Assistant Act or the Osteopathic Physicians' Assistants Act; and
[C.] D. "student" means a resident of New Mexico who is a student enrolled in a school or college of medicine or
osteopathic medicine."
SECTION 4. Section 21-22-4 NMSA 1978 (being Laws 1975, Chapter 244, Section 4, as amended) is amended to read:
"21-22-4. MEDICAL AND OSTEOPATHIC STUDENT LOANS--[COMMISSION ON HIGHER EDUCATION] DEPARTMENT AUTHORIZED--QUALIFICATIONS.--
A. The [commission] department is authorized to grant a loan to defray the expenses of the medical or osteopathic education of a student deemed qualified by the [commission] department to receive the medical or osteopathic education, upon such terms and conditions as may be imposed by regulations of the [commission] department.
B. The [commission] department shall only receive, pass upon and allow or disallow those applications for loans made by those students enrolled or accepted by schools or colleges of medicine or osteopathic medicine who are bona fide citizens and residents of the United States and of New Mexico and who declare their intent to practice as physicians, osteopathic physicians or physician assistants within designated areas of the state.
C. The [commission] department shall make a full and careful investigation of the ability, character and qualifications of each applicant and determine [his] the applicant's fitness to become a recipient of a student loan. The investigation of each applicant shall include an investigation of the ability of the applicant and [his] the applicant's parents or guardians to pay the applicant's expenses for a medical or osteopathic education. The [commission] department shall give preference to qualified applicants who are unable, or whose parents or guardians are unable, to pay the applicant's expenses in obtaining a medical or osteopathic education.
D. The [commission] department shall arrange for loan recipients to receive assistance in locating, planning and implementing the establishment and maintenance of a medical or osteopathic practice in a designated underserved area."
SECTION 5. Section 21-22-6 NMSA 1978 (being Laws 1975, Chapter 244, Section 6, as amended by Laws 2005, Chapter 321, Section 2 and by Laws 2005, Chapter 323, Section 1) is amended to read:
"21-22-6. MEDICAL AND OSTEOPATHIC STUDENT LOANS--CONTRACT TERMS--REPAYMENT.--
A. Each applicant who is approved for a loan by the [commission] department may be granted a loan, in such amounts and for such periods as determined by the [commission] department, with which to defray expenses incurred in obtaining a medical or osteopathic education at any reputable and accredited [medical school] school or college of medicine or osteopathic medicine in the United States if the applicant files with the [commission] department a declaration of [his] intent to practice [his profession] as a licensed physician, osteopathic physician or physician assistant in [areas] an area of New Mexico designated as [not being adequately served by medical practitioners] a health professional shortage area.
B. The loans shall not exceed the necessary expenses incurred while attending a medical school or college of osteopathic medicine and shall bear interest at the rate of:
(1) eighteen percent per year if the student completes [his] the student's medical or osteopathic education and no portion of the principal and interest is forgiven pursuant to Subsection F of this section; and
(2) seven percent per year in all other cases.
C. Loans made pursuant to the Medical and Osteopathic Student Loan for Service Act shall not accrue interest until the department:
(1) [the commission] determines the loan recipient has terminated the recipient's medical or osteopathic education prior to completion;
(2) [the commission] determines the loan recipient has failed to fulfill the recipient's obligation to serve in a health professional shortage area; or
(3) [the commission] cancels a contract between a student and the [commission] department pursuant to Section 21-22-9 NMSA 1978.
D. The loan shall be evidenced by a contract between the student and the [commission] department acting on behalf of the state. The contract shall provide for the payment by the state of a stated sum covering the costs of a medical or osteopathic education and shall be conditioned upon the repayment of the loan to the state over a period established by the [commission] department in consultation with the student after completion of the student's medical [school and] or osteopathic education, including any period of internship or residency required to complete the student's education.
E. Loans made to students who fail to complete their medical or osteopathic education shall become due immediately upon termination of their medical or osteopathic education. The [commission] department, in consultation with the student, shall establish terms of repayment, alternate service or cancellation terms.
F. The contract shall provide that the [commission] department shall forgive a portion of the loan for each year that a loan recipient practices [his profession] as a licensed physician, osteopathic physician or physician assistant in areas approved by the [commission] department as [not being adequately served by medical practitioners] health professional shortage areas. The loan shall be forgiven as follows:
(1) loan terms of one year shall require one year of practice in a designated health professional shortage area. Upon completion of service, one hundred percent of the loan shall be forgiven;
(2) loan terms of two years shall require one year of practice in a designated health professional shortage area for each year of the loan. Upon completion of the first year of service, fifty percent of the loan shall be forgiven. Upon completion of the second year of service, the remainder of the loan shall be forgiven; and
(3) for loan terms of three years or more, forty percent of the loan shall be forgiven upon completion of the first year of service in a designated health professional shortage area, thirty percent of the loan shall be forgiven upon completion of the second year of service and the remainder of the loan shall be forgiven upon completion of the third year of service.
G. Recipients shall serve a complete year in order to receive credit for that year. The minimum credit for a year shall be established by the [commission] department.
H. If a loan recipient completes [his] the recipient's professional education and does not serve in a health professional shortage area, the [commission] department shall assess a penalty of up to three times the principal due, plus eighteen percent interest, unless the [commission] department finds acceptable extenuating circumstances for why the student cannot serve. If the [commission] department does not find acceptable extenuating circumstances for the student's failure to carry out [his] the declared intent to serve in a health professional shortage area in the state, the [commission] department shall require immediate repayment of the loan plus the amount of any interest and penalty assessed pursuant to this subsection.
I. The [commission] department shall adopt [regulations] rules to implement the provisions of this section. The [regulations] rules may provide for the repayment of medical and osteopathic student loans in annual or other periodic installments."
SECTION 6. Section 21-22-8 NMSA 1978 (being Laws 1975, Chapter 244, Section 8, as amended) is amended to read:
"21-22-8. FUND CREATED--METHOD OF PAYMENT.--There is created in the state treasury the "medical and osteopathic student loan for service fund". All money appropriated for loans to medical and osteopathic students under the Medical and Osteopathic Student Loan for Service Act shall be credited to the fund. All payments of principal and interest on loans made pursuant to that act received by the [commission] department shall be deposited with the state treasurer to the credit of the fund. All payments of funds for loans shall be made upon vouchers signed by the designated representatives of the [commission] department."
SECTION 7. Section 21-22-10 NMSA 1978 (being Laws 1975, Chapter 244, Section 10, as amended) is amended to read:
"21-22-10. REPORTS.--The [commission] department shall make annual reports to the governor and to the legislature, prior to each regular session, of its activities, the loans granted, the names and addresses of persons to whom loans were granted and the [medical] schools or colleges of medicine or osteopathic medicine attended by those receiving the loans, together with a list of the names and locations of practice of those students who have completed their education and have become licensed physicians, osteopathic physicians or physician assistants in New Mexico as a result of a student loan pursuant to the Medical and Osteopathic Student Loan for Service Act."
SECTION 8. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2016.
- 9 -