HB0425

HOUSE BILL 425

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Rebecca Dow

AN ACT

RELATING TO HIGHER EDUCATION; ENACTING THE LEGISLATIVE LOTTERY TUITION LOAN FOR SERVICE ACT; PROVIDING TUITION LOANS TO ENABLE QUALIFIED STUDENTS TO RECEIVE POST-SECONDARY EDUCATION; ALLOWING STUDENTS TO REPAY TUITION LOANS WITH PUBLIC SERVICE IN NEW MEXICO; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 7 of this act may be cited as the "Legislative Lottery Tuition Loan for Service Act".

SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Legislative Lottery Tuition Loan for Service Act:

A. "community college" means a branch community college of a four-year state educational institution, a two-year state educational institution or a community college or technical and vocational institute established pursuant to Chapter 21, Article 13 or 16 NMSA 1978, respectively;

B. "comprehensive institution" means eastern New Mexico university, western New Mexico university, New Mexico highlands university or northern New Mexico college;

C. "department" means the higher education department;

D. "full time" means fifteen or more credit hours each semester of the regular academic year in state educational institutions and twelve or more credit hours each semester of the regular academic year in community colleges;

E. "fund" means the lottery tuition loan for service fund;

F. "loan program semesters" means those semesters for which a qualified student may receive a tuition loan at a public post-secondary educational institution;

G. "public post-secondary educational institution" means a four-year state educational institution or a community college;

H. "public service" means full-time employment within New Mexico with:

(1) an organization that is exempt from taxation pursuant to Section 501(c)(3) of Title 26 of the United States Code in an area of New Mexico designated as underserved by the workforce solutions department or in an in-demand occupation as identified by that department; or

(2) a federal, state, local or tribal government or a political subdivision of one of those governments;

I. "qualified student" means a full-time student who graduated from a public or accredited private New Mexico high school or who received a high school equivalency credential while maintaining residency in New Mexico and who:

(1) either:

(a) immediately upon graduation or receipt of a credential was accepted for entrance to and attended a public post-secondary educational institution; or

(b) within one hundred twenty days of completion of a high school curriculum or receipt of a high school equivalency credential began service in the United States armed forces and within one year of completion of honorable service or medical discharge from the service, attended a public post-secondary educational institution; and

(2) successfully completed the first semester at a public post-secondary educational institution with a grade point average of 2.5 or higher on a 4.0 scale during the first semester of full-time enrollment;

J. "research institution" means the university of New Mexico, New Mexico state university or New Mexico institute of mining and technology;

K. "state educational institution" means an institution of higher education enumerated in Article 12, Section 11 of the constitution of New Mexico; and

L. "tuition loan" means the loan that provides tuition assistance per program semester for a qualified student attending a public post-secondary educational institution.

SECTION 3. [NEW MATERIAL] TUITION LOANS AUTHORIZED-- QUALIFIED STUDENTS.--

A. To the extent that funds are made available by the legislature from the fund, the department shall award tuition loans in department-approved amounts to qualified students attending their respective public post-secondary educational institutions.

B. Beginning in fiscal year 2018, a qualified student is eligible to receive the tuition loan for a maximum of seven program semesters and in an amount determined pursuant to the provisions of Section 4 of the Legislative Lottery Tuition Loan for Service Act.

C. Except as otherwise provided in this section, a tuition loan may be awarded to a qualified student who:

(1) maintains residency in New Mexico;

(2) maintains a grade point average of 2.5 or higher on a 4.0 scale; and

(3) completes:

(a) for a student attending a four-year public post-secondary educational institution, fifteen or more credit hours per program semester; and

(b) for a student attending a two-year public post-secondary educational institution, twelve or more credit hours per program semester.

D. For students with disabilities who may require accommodations, the department, in consultation with the student and the office at the public post-secondary educational institution that serves students with disabilities, shall review both the definition of "full time" and the maximum number of consecutive program semesters of eligibility and adjust either or both as deemed reasonable and appropriate, based on the student's disability needs. In no case, however, shall "full time" mean fewer than six credit hours per semester, and in no case shall eligibility extend beyond fourteen consecutive program semesters.

SECTION 4. [NEW MATERIAL] TUITION LOAN AMOUNT--FUND.--

A. Prior to June 1 of each year, based on the amount appropriated by the legislature from the fund, on the projected enrollment at all public post-secondary educational institutions and on the amount of loan repayment received by the fund during the current fiscal year, the department shall:

(1) determine the total amount of money available for all tuition loans for qualified students;

(2) determine the uniform percentage by which to calculate tuition loans for qualified students attending any public post-secondary educational institution; and

(3) notify all public post-secondary educational institutions of the determinations made pursuant to Paragraphs (1) and (2) of this subsection.

B. In determining distribution and award amounts for the tuition loan program, the department shall:

(1) maintain the minimum fund balance pursuant to Section 5 of the Legislative Lottery Tuition Loan for Service Act;

(2) distribute to all public post-secondary educational institutions an amount not to exceed the remaining balance in the fund; and

(3) subject to the provisions of Paragraphs (1) and (2) of this subsection, distribute to each public post-secondary educational institution an amount based on:

(a) the projected enrollment at each four-year public post-secondary educational institution of qualified students in their first through seventh program semesters, including qualified students in their fourth through seventh program semesters who transferred from community colleges;

(b) the projected enrollment at each community college of qualified students in their first through third program semesters; and

(c) a uniform percentage of the average of in-state tuition costs charged by: 1) research institutions for each research institution; 2) comprehensive institutions for each comprehensive institution; and 3) community colleges for each community college, except that the uniform percentage for a two-year state educational institution shall be based on the uniform percentage for community colleges.

SECTION 5. [NEW MATERIAL] LOTTERY TUITION LOAN FOR SERVICE FUND CREATED--PURPOSE.--

A. The "lottery tuition loan for service fund" is created in the state treasury. The fund shall be administered by the department. The fund shall consist of transfers from the lottery tuition fund, income from the investment of the fund and gifts, grants and donations to the fund. The transfer shall be fifty percent of the distribution to the lottery tuition fund from the New Mexico lottery authority. The fund shall maintain an annual average balance of two million dollars ($2,000,000), and any balance in the fund at the end of any fiscal year shall remain in the fund for appropriation by the legislature as provided in this section.

B. Money in the fund shall be appropriated by the legislature to the department for distribution to New Mexico's public post-secondary educational institutions to provide tuition assistance for qualified students as provided in the Legislative Lottery Tuition Loan for Service Act.

SECTION 6. [NEW MATERIAL] DEPARTMENT RULEMAKING AND REPORTING.--

A. The department shall promulgate rules setting forth explicit criteria in accordance with the Legislative Lottery Tuition Loan for Service Act for:

(1) student qualification and continuing eligibility; and

(2) calculating the tuition loan award amount pursuant to Section 4 of the Legislative Lottery Tuition Loan for Service Act and guidelines for the administration of the tuition loan program.

B. The department shall report by November 1 of each year to the legislative finance committee and the department of finance and administration on:

(1) the status of the fund;

(2) tuition loan program participation data aggregated for each public post-secondary educational institution to show:

(a) the number of qualified students who received tuition loans in the prior twelve-month period;

(b) the total number of qualified students enrolled in the prior twelve-month period;

(c) for each semester, the amount of tuition loans funded and the amount of tuition costs that were not offset by the tuition loans; and

(d) the number of qualified students who graduated with a degree and, for each qualified student, the number of semesters attended prior to graduation;

(3) the rate of completion of contract by public service, the rate of completion of service by repayment and the rate of default; and

(4) any additional information required or requested by the legislative finance committee or the department of finance and administration.

SECTION 7. [NEW MATERIAL] TUITION LOANS--CONTRACT TERMS--REPAYMENT.--

A. Each qualified student who is approved for a tuition loan by the department shall be provided a tuition loan in such amounts for such periods as determined by the department; provided that the applicant files with the department a declaration of intent to provide public service in New Mexico.

B. The tuition loans shall not exceed the necessary expenses incurred while the person is a qualified student and, if the tuition loan recipient completes the education at a public post-secondary educational institution and no portion of the principal and interest is forgiven pursuant to Subsection F of this section, shall bear interest at a rate set by the department, not to exceed:

(1) three percent per year if the tuition loan recipient works full time for a for-profit employer in New Mexico or in the uniformed services; and

(2) ten percent per year if the tuition loan recipient works outside of New Mexico and not in the uniformed services.

C. Loans made pursuant to the Legislative Lottery Tuition Loan for Service Act shall not accrue interest until the department, in consultation with the public post-secondary educational institution:

(1) determines that the tuition loan recipient has terminated the recipient's education prior to completion;

(2) determines that the tuition loan recipient has failed to fulfill the recipient's obligation to provide public service in New Mexico; or

(3) cancels a contract between a tuition loan recipient and the department pursuant to the Legislative Lottery Tuition Loan for Service Act.

D. The tuition loan shall be evidenced by a contract between the tuition loan recipient and the department acting on behalf of the state.

E. Loans made to tuition loan recipients who fail to complete their education shall become due immediately upon termination of the education toward which the loan was made. The department, in consultation with the tuition loan recipient and the public post-secondary educational institution, shall establish terms of repayment with the department.

F. The contract shall provide that the department shall forgive the tuition loan upon completion of six months of public service in New Mexico by the tuition loan recipient for every tuition loan term of one year.

G. The department shall adopt rules to implement the provisions of this section.

SECTION 8. Section 21-21N-2 NMSA 1978 (being Laws 2014, Chapter 80, Section 2, as amended) is amended to read:

"21-21N-2. DEFINITIONS.--As used in the Legislative Lottery Tuition Scholarship Act:

B. "comprehensive institution" means eastern New Mexico university, western New Mexico university, New Mexico highlands university or northern New Mexico college;

C. "department" means the higher education department;

E. "fund" means the lottery tuition fund;

F. "legacy student" means a full-time resident student who has received for three or more program semesters by the end of fiscal year 2014 the legislative lottery scholarship awarded pursuant to the former provisions of Sections 21-1-4.3, 21-13-10 and 21-16-10.1 NMSA 1978 prior to the enactment of the Legislative Lottery Tuition Scholarship Act;

G. "program semesters" means those semesters for which a legacy or qualified student may receive a tuition scholarship and excludes the first semester of attendance at a public post-secondary educational institution;

H. "public post-secondary educational institution" means a four-year state educational institution or a community college;

I. "qualified student" means a full-time student who, prior to June 30, 2017, graduated from a public or accredited private New Mexico high school or who received a high school equivalency credential while maintaining residency in New Mexico and who:

(1) either:

(a) immediately upon graduation or receipt of a credential was accepted for entrance to and attended a public post-secondary educational institution; or

J. "research institution" means the university of New Mexico, New Mexico state university or New Mexico institute of mining and technology;

K. "state educational institution" means an institution of higher education enumerated in Article 12, Section 11 of the constitution of New Mexico; and

L. "tuition scholarship" means the scholarship that provides tuition assistance per program semester for a qualified student or legacy student attending a public post-secondary educational institution."

SECTION 9. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2017.

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