45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO EDUCATION; ENACTING THE TEACHER LOAN FOR SERVICE ACT; PRESCRIBING POWERS AND DUTIES; PROVIDING FOR CONTRACTS AND THEIR ENFORCEMENT; CREATING A FUND; MAKING AN APPROPRIATION.

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

Section 1. SHORT TITLE.--This act may be cited as the "Teacher Loan for Service Act".

Section 2. PURPOSE.--The purpose of the Teacher Loan for Service Act is to proactively address New Mexico's looming teacher shortage by providing students with the financial means to complete their post-secondary teacher preparation education.

Section 3. DEFINITIONS.--As used in the Teacher Loan for Service Act:

A. "commission" means the commission on higher education;

B. "loan" means a payment of money under contract between the commission and a student that defrays the costs incidental to a teacher preparation program offered in a regionally accredited post-secondary educational institution in New Mexico and that requires repayment in services;

C. "qualifying public school" means a public school in New Mexico in which either eighty percent or more of the students are receiving federal assistance under the National School Lunch Act or seventy percent or more of the students are of Hispanic, African-American, Native American or Asian heritage; and

D. "student" means a resident of New Mexico who has completed a high school curriculum at a public or accredited private New Mexico high school or received a graduate equivalent diploma while a New Mexico resident and who is enrolled in or accepted by an undergraduate or graduate degree teacher preparation program at a regionally accredited post-secondary educational institution in New Mexico.

Section 4. TEACHER STUDENT LOANS AUTHORIZED--QUALIFICATIONS.--

A. The commission may grant a loan to a student deemed qualified by the commission upon such terms and conditions as may be imposed by rule of the commission.

B. The commission shall only receive, pass upon and allow or disallow an application for a loan made by a student who declares his intent to serve as a teacher at a qualifying public school.

C. The commission shall make a full and careful investigation of the ability and qualifications of each applicant to become a recipient of a loan. The commission shall give preference to qualified applicants who demonstrate financial need.

D. The commission and the state department of public education shall arrange for loan recipients to receive assistance in locating employment with qualifying public schools.

Section 5. DELEGATION OF DUTIES TO OTHER STATE AGENCIES.--The commission may arrange with other agencies for the performance of services required by the provisions of Section 4 of the Teacher Loan for Service Act.

Section 6. TEACHER LOANS--CONTRACT TERMS--REPAYMENT.--

A. Each applicant who is approved for a loan by the commission may be granted a loan in such amounts and for such periods as the commission determines. The loan shall not exceed the necessary expenses incurred while attending a teacher preparation program.

B. Unless forgiven pursuant to Subsection E of this section, a loan shall bear interest at the rate of eight percent per year.

C. The loan shall be evidenced by a contract between the loan recipient and the commission 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 teacher preparation program and shall be conditioned on the repayment of the loan to the state, together with interest, over a period established by the commission after the completion of the teacher preparation program and any postgraduate study or internship required to complete the loan recipient's education. The contract shall further provide that immediately upon completion or termination of the loan recipient's education, all interest then accrued shall be capitalized.

D. A loan made to a recipient who fails to complete his teacher preparation program shall become due, together with interest, immediately upon termination of his teacher preparation program. The commission, in consultation with the loan recipient, shall establish terms of repayment, alternate service or cancellation terms.

E. The contract shall provide that the commission shall forgive the loan principal and interest if the loan recipient is employed as a teacher in a qualifying public school for five consecutive years.

F. A loan recipient shall serve a complete contract year in order to receive credit for that year. The minimum credit for a year shall be established by the commission.

G. The commission shall adopt and promulgate rules to implement the provisions of this section. The rules may provide for the repayment of loans in annual or other periodic installments.

Section 7. CONTRACTS--LEGAL ASSISTANCE--ENFORCEMENT.--The general form of the contract shall be prepared and approved by the attorney general and signed by the loan recipient and a designee of the commission on behalf of the state. The commission is vested with full and complete authority and power to sue in its own name for any balance due the state from a loan recipient on a contract.

Section 8. FUND CREATED--METHOD OF PAYMENT.--The "teacher loan for service fund" is created in the state treasury. Money appropriated for loans pursuant to the Teacher Loan for Service Act; earnings from investment of the fund; gifts, grants and donations to the fund; and all payments of principal and interest on loans made pursuant to that act shall be deposited in the fund. Money in the fund is appropriated to the commission for purposes of making loans pursuant to the Teacher Loan for Service Act. Money in the fund shall not revert at the end of a fiscal year. The fund shall be administered by the commission. All payments of money for loans shall be made on warrants drawn by the secretary of finance and administration pursuant to vouchers signed by the commission's designated representative.

Section 9. CANCELLATION.--The commission may cancel a contract between it and a loan recipient for any reasonable cause deemed sufficient by the commission.

Section 10. REPORTS.--The commission shall report annually by January 1 to the governor and the legislature on its activities pursuant to the Teacher Loan for Service Act, including the loans granted, the names and addresses of loan recipients, the teacher preparation programs loan recipients are attending and the names and locations of practice of loan recipients who have completed their teacher preparation education and are teaching.

Section 11. CONTINUING APPROPRIATION.--Each fiscal year, one million two hundred thousand dollars ($1,200,000) is appropriated from the tobacco settlement program fund to the teacher loan for service fund for purposes of making loans pursuant to the Teacher Loan for Service Act. The appropriations shall not revert.

Section 12. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2001.