HOUSE BILL 47
56th legislature - STATE OF NEW MEXICO - first session, 2023
INTRODUCED BY
Marian Matthews
FOR THE LEGISLATIVE HEALTH AND HUMAN SERVICES COMMITTEE
AN ACT
RELATING TO HEALTH; AUTHORIZING THE NEW MEXICO FINANCE AUTHORITY TO MAKE RURAL HEALTH CARE PROJECT LOANS; ESTABLISHING TERMS FOR RURAL HEALTH CARE PROJECT LOANS; CREATING THE RURAL HEALTH CARE PROJECT REVOLVING FUND; PROVIDING POWERS AND DUTIES; REQUIRING REPORTS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] RURAL HEALTH CARE PROJECT LOANS--TERMS--REPAYMENT--CONSTRUCTION.--
A. The New Mexico finance authority shall receive and review applications for rural health care project loans pursuant to this section. The authority may make loans to qualifying rural health care providers; provided that funds are available and that the qualifying rural health care provider satisfies credit and identification criteria, as determined by the authority. The New Mexico finance authority shall adopt rules to govern the application procedures and requirements for disbursing loans under this section for determining the eligibility of qualifying rural health care providers for loans.
B. The New Mexico finance authority shall evaluate an application based on information received from the applicant as well as third-party credit and identification reports. The authority may consult with the human services department and the department of health in evaluating applications; provided that a final determination shall be made solely by the authority.
C. The New Mexico finance authority shall make rural health care project loans in accordance with the following:
(1) the loan amount shall be in an amount not to exceed five hundred thousand dollars ($500,000);
(2) the terms of the loan shall require that:
(a) the proceeds of the loan shall only be used for the planning, development and operation of a rural health care project or the purchase of an existing medical practice in a rural community, including legal fees, accounting fees, costs associated with leasing or purchasing a location or property for the rural health care project, equipment costs and staffing costs; provided that no more than twenty percent of the proceeds of the loan may be used as compensation for employees who own equity in the rural health care project;
(b) the loan recipient provides a written certification signed by an appropriate officer of the qualifying rural health care provider that certifies that: 1) the officer understands that the provider is receiving a loan that must be repaid by the provider with interest under the terms of the loan agreement; 2) all documents submitted in support of the loan application and all statements and certifications made in the loan application are true and accurate to the best of the officer's knowledge; 3) the provider is current on all state and federal tax obligations; and 4) all loan proceeds will be used for purposes as provided in this section, including that no more than twenty percent of the proceeds of the loan may be used as compensation for employees who own equity in the rural health care project; and
(c) the loan recipient provides the New Mexico finance authority with ongoing information relevant to the reporting requirements of the authority provided in Section 2 of this 2023 act; and
(3) the loan shall define specific guidelines related to personal guarantees or collateral, as determined by the authority.
D. Loans made pursuant to this section shall be made for loan periods not to exceed ten years, as determined by the New Mexico finance authority in coordination with the qualifying rural health care provider. The loans shall bear an annual interest rate equal to one-half of the Wall Street Journal prime rate on the date the loan is made; provided that no interest shall accrue during the first year of the loan.
E. Interest shall begin to accrue on a rural health care project loan on the first anniversary of the funding date of the loan. Thereafter, for the next two years, the New Mexico finance authority shall require interest-only payments on a schedule determined by the authority. Beginning on the third anniversary of the funding date of the loan, payment on the outstanding principal and interest on the loan shall be due on a schedule determined by the authority for the remainder of the loan period.
F. Receipts from the repayment of principal or interest accrued on the rural health care project loans made pursuant to this section shall be deposited in the rural health care project revolving fund.
G. No provision in a rural health care project loan or the evidence of indebtedness of the loan shall include a penalty or premium for prepayment of the balance of the indebtedness.
H. The New Mexico finance authority may exercise any power provided to the authority in the New Mexico Finance Authority Act to assist in the administration of this section; provided that the power is consistent with the provisions of that act.
I. As used in this section:
(1) "health care services" means services for the diagnosis, prevention, treatment, cure or relief of a physical, dental, behavioral or mental health condition, substance use disorder, illness, injury or disease, which services include procedures, products, devices or medications; but does not include services offered by a licensed hospital or a dispenser pursuant to the Controlled Substances Act;
(2) "health care underserved area" means a geographic area or practice location in which it has been determined by the department of health, through the use of indices or other standards set by the department of health, that sufficient health care services are not being provided;
(3) "qualifying rural health care provider" means an individual, foreign or domestic corporation, general partnership, limited liability company, limited partnership, professional corporation, joint venture, business trust, public benefit corporation, nonprofit entity or other private business entity or combination thereof that has made a legal commitment to the New Mexico finance authority to plan and develop a rural health care project, if approved for a rural health care project loan, but does not include an entity licensed as a hospital in this state or any other business entity with annual gross revenue that exceeds fifty million dollars ($50,000,000);
(4) "rural community" means an area or location identified by the department of health as falling outside of an urban area that has also been determined by the department of health to be a health care underserved area; and
(5) "rural health care project" means a business entity that provides health care services to individuals within a rural community, as determined by the New Mexico finance authority.
SECTION 2. [NEW MATERIAL] RURAL HEALTH CARE PROJECT LOANS--REPORTS--CONFIDENTIALITY.--
A. Prior to October 1, 2024 and each October 1 thereafter, the New Mexico finance authority shall submit a report to the department of health, the human services department, the legislature, the legislative finance committee, the New Mexico finance authority oversight committee and any other appropriate legislative interim committee. The report shall provide details regarding any loans made pursuant to Section 1 of this 2023 act. The report shall include:
(1) the total number of loans made pursuant to Section 1 of this 2023 act and the individual amount of each loan;
(2) the total number of loan applications;
(3) the average and median amount of money provided to loan recipients;
(4) the total amount of principal and interest repaid by loan recipients;
(5) the total number of loans and the amount of those loans, if any, in a delinquent status or default;
(6) the total number of loan recipients that are in the process of filing or have filed for bankruptcy;
(7) the total number of full-time employees and part-time employees currently employed by a loan recipient; and
(8) an overview of the communities served and the health care services provided by loan recipients.
B. Information obtained by the New Mexico finance authority regarding individual loan applicants and recipients, including information used to analyze a loan application, is confidential and not subject to inspection pursuant to the Inspection of Public Records Act; provided that nothing in this section shall prevent the authority from disclosing broad demographic information and information relating to the total amount of loans made, the total outstanding balance of loans made and the names of the loan recipients.
SECTION 3. [NEW MATERIAL] RURAL HEALTH CARE PROJECT REVOLVING FUND.--
A. The "rural health care project revolving fund" is created within the New Mexico finance authority. The fund shall be administered by the authority as a separate account and may consist of such subaccounts as the authority deems necessary to carry out the purposes of the fund. The authority may establish procedures for administering the fund in accordance with the provisions of Section 1 of this 2023 act.
B. Money from payments of principal of, interest on and other fees or charges paid to the New Mexico finance authority in connection with loans made pursuant to Section 1 of this 2023 act shall be deposited in the rural health care project revolving fund.
C. Money in the rural health care project revolving fund is appropriated to the New Mexico finance authority to:
(1) pay the reasonably necessary administrative and other costs incurred by the authority in evaluating, processing, originating and servicing loans made pursuant to Section 1 of this 2023 act; and
(2) make loans in accordance with the provisions of Section 1 of this 2023 act.
D. Money in the rural health care project revolving fund that is not needed for immediate disbursement, including money held in reserve, may be deposited or invested in the same manner as other funds administered by the New Mexico finance authority.
SECTION 4. APPROPRIATION.--Seven million five hundred thousand dollars ($7,500,000) is appropriated from the general fund to the rural health care project revolving fund for expenditure in fiscal year 2024 and subsequent fiscal years by the New Mexico finance authority for the purposes of carrying out the provisions of Section 1 of this 2023 act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
SECTION 5. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2023.
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