SENATE BILL 1114
48th legislature - STATE OF NEW MEXICO - first session, 2007
INTRODUCED BY
Gerald P. Ortiz y Pino
AN ACT
RELATING TO PUBLIC SERVICE; ENACTING THE SOCIAL WORKER LOAN FOR SERVICE ACT; 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 "Social Worker Loan for Service Act".
Section 2. DEFINITIONS.--As used in the Social Worker Loan for Service Act:
A. "department" means the higher education department;
B. "loan" means a payment of money under contract between the department and a student that defrays the costs incidental to a social worker preparation program offered in a regionally accredited post-secondary educational institution in New Mexico and that requires repayment in services;
C. "social worker preparation program" means a program that is accredited by the council on social work education; and
D. "student" means a United States citizen who is enrolled in or accepted by an undergraduate or graduate social worker preparation program at a regionally accredited post-secondary educational institution in New Mexico.
Section 3. LOANS AUTHORIZED--QUALIFICATIONS.--
A. The department may grant a loan to a student deemed qualified by the department upon such terms and conditions as may be imposed by rule of the department.
B. The department shall only receive, pass upon and allow or disallow an application for a loan made by a student who declares an intent to serve as a social worker in a designated social worker shortage area of New Mexico. Social worker shortage areas may be either geographic-or discipline-specific.
C. The department shall make a full and careful investigation of the ability and qualifications of each applicant to become a recipient of a loan. The department shall give preference to qualified applicants who demonstrate financial need.
Section 4. SOCIAL WORKER LOANS--CONTRACT TERMS--REPAYMENT.--
A. Each applicant who is approved for a loan by the department may be granted a loan in such amounts and for such periods as the department determines. The loan shall not exceed the necessary expenses incurred while attending a social worker preparation program.
B. A loan shall bear interest at the rate of:
(1) eighteen percent per year if the loan recipient completes a social worker preparation program and no portion of the principal and interest is forgiven pursuant to Subsection F of this section; or
(2) seven percent per year in all other cases.
C. Loans made pursuant to the Social Worker Loan for Service Act shall not accrue interest until:
(1) the department determines the loan recipient has terminated the recipient's social worker preparation program prior to completion;
(2) the department determines the loan recipient has failed to fulfill the recipient's obligation to practice as a licensed social worker in New Mexico; or
(3) the department cancels a contract between a student and the department pursuant to Section 7 of the Social Worker Loan for Service Act.
D. The loan shall be evidenced by a contract between the loan recipient and the 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 social worker preparation program and shall be conditioned on the repayment of the loan to the state over a period established by the department after the completion of the social worker preparation program and any post-graduate study or internship required to complete the loan recipient's education.
E. A loan made to a recipient who fails to complete the social worker preparation program shall become due immediately upon termination of the social worker preparation program. The department, in consultation with the loan recipient, shall establish terms of repayment, alternate service or cancellation terms.
F. The contract shall provide that the department shall forgive a portion of the loan for each year that the loan recipient practices as a licensed social worker in a designated social worker shortage area in New Mexico. The loan shall be forgiven as follows:
(1) loan terms of one year shall require one year of practice. 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 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, 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. 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 department.
H. If a loan recipient completes a social worker preparation program and does not serve as a social worker, the department shall assess a penalty of up to three times the principal due, plus eighteen percent interest, unless the department finds acceptable extenuating circumstances that prevent the loan recipient from serving. If the department does not find acceptable extenuating circumstances for the loan recipient's failure to carry out the recipient's declared intent to serve, the department shall require immediate repayment of the loan plus the amount of any interest and penalty assessed pursuant to this section.
I. The department 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 5. 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 department 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 the state from a loan recipient on a contract.
Section 6. FUND CREATED--METHOD OF PAYMENT.--The "social worker loan for service fund" is created in the state treasury. Money appropriated for loans pursuant to the Social Worker 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 shall not revert at the end of a fiscal year. The fund shall be administered by the department. 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 secretary of higher education or the secretary's designated representative.
Section 7. CANCELLATION.--The department may cancel a contract between it and a loan recipient for any reasonable cause deemed sufficient by the department.
Section 8. REPORTS.--The department shall report annually by January 1 to the governor and the legislature on its activities pursuant to the Social Worker Loan for Service Act, including the loans granted, the names and addresses of loan recipients, the social worker preparation programs loan recipients are attending and the names and locations of practice of loan recipients who have completed their social worker preparation education and are practicing as licensed social workers in New Mexico.
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