HOUSE APPROPRIATIONS AND FINANCE COMMITTEE SUBSTITUTE FOR
HOUSE BILL 348
51st legislature - STATE OF NEW MEXICO - second session, 2014
AN ACT
RELATING TO HIGHER EDUCATION; ENACTING THE LEGISLATIVE LOTTERY TUITION WAIVER ACT; PROVIDING FOR A TUITION WAIVER CONDITIONED ON THE ATTAINMENT OF A DEGREE OR CERTIFICATE; PROVIDING FUNDING FOR TUITION WAIVERS FROM THE LOTTERY TUITION FUND; AMENDING, REPEALING, RECOMPILING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 10 of this act may be cited as the "Legislative Lottery Tuition Waiver Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Legislative Lottery Tuition Waiver Act:
A. "community college" means a branch community college of a 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. "degree" includes a degree or certificate earned at a public post-secondary educational institution;
D. "department" means the higher education department;
E. "fiscal agent" means the chief financial officer of a public post-secondary educational institution designated by the department;
F. "fund" means the lottery tuition fund;
G. "legislative lottery tuition waiver" means a conditional waiver for tuition costs incurred by a qualified student attending any public post-secondary educational institution;
H. "public post-secondary educational institution" means a community college, comprehensive institution, research institution or state educational institution;
I. "qualified student" means a student who meets eligibility requirements pursuant to the Legislative Lottery Tuition Waiver Act and department rules; who graduated with a diploma from a public or accredited private New Mexico high school; who completed a home school program in the state; or who received a high school equivalency credential in the state and, within thirty months, the student:
(1) was accepted for entrance to and attended a public post-secondary educational institution; or
(2) 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;
J. "research institution" means the university of New Mexico, New Mexico state university or New Mexico institute of mining and technology; and
K. "state educational institution" means an institution of higher education enumerated in Article 12, Section 11 of the constitution of New Mexico.
SECTION 3. [NEW MATERIAL] LEGISLATIVE LOTTERY TUITION WAIVER--APPLICATION BY STUDENT.--Prior to consideration for a legislative lottery tuition waiver each year, a student shall timely:
A. submit to the intended public post-secondary educational institution a signed form requesting a legislative lottery tuition waiver; and
B. file a free application for federal student aid provided pursuant to the federal Higher Education Act of 1965.
SECTION 4. [NEW MATERIAL] LEGISLATIVE LOTTERY TUITION WAIVER--FORM--DEPARTMENT DETERMINATION.--
A. By August 1, 2014, the department shall develop and provide to all public post-secondary educational institutions a printed and electronic form for requesting a legislative lottery tuition waiver.
B. No later than May 1, 2015 and no later than May 1 of each subsequent year, based on the amount appropriated by the legislature from the fund and on the projected enrollment at all public post-secondary educational institutions, the department shall:
(1) determine the total amount of money available for legislative lottery tuition waivers at all public post-secondary educational institutions to award the maximum amount available while maintaining the solvency of the fund as projected in the most recent actuarial evaluation of the fund; and
(2) provide to each qualified student a legislative lottery tuition waiver in an amount that:
(a) includes a tuition offset from all other state and federal scholarships and grants-in-aid awarded; and
(b) is allowable pursuant to the determination made pursuant to Paragraph (1) of this subsection.
SECTION 5. [NEW MATERIAL] LEGISLATIVE LOTTERY TUITION WAIVER--AUTHORIZED--QUALIFIED STUDENTS--CONDITIONS OF WAIVER.--
A. To the extent that funds are made available by the legislature from the fund, the boards of regents or governing bodies of public post-secondary educational institutions shall provide legislative lottery tuition waivers to qualified students attending their respective public post-secondary educational institutions:
(1) after completion of the first semester of full-time enrollment with a grade point average of 2.5 or higher on a 4.0 scale at a public post-secondary educational institution;
(2) for a maximum of seven semesters of attendance at a comprehensive institution, research institution or state educational institution or three semesters of attendance at a community college followed by four semesters of attendance at a comprehensive institution, research institution or state educational institution; provided that the seven semesters of eligibility for legislative lottery tuition waivers may be completed in up to five academic years;
(3) for each semester that the qualified student:
(a) maintains residency in New Mexico;
(b) maintains a grade point average of 2.5 or higher on a 4.0 scale;
(c) completes twelve or more credit hours; and
(d) meets any additional eligibility requirements established in rule by the department; and
(4) provided that the qualified student signs a contract:
(a) acknowledging that the legislative lottery tuition waiver is conditioned upon the qualified student's attainment of a degree within five academic years of initial enrollment at a public post-secondary educational institution; and
(b) agreeing to the terms of repayment in the event the qualified student fails to earn a degree within two years after the last date of enrollment at a public post-secondary educational institution.
B. Notwithstanding the eligibility provisions for a qualified student set forth in this section, the department, in consultation with a student with disabilities and the office at a public post-secondary educational institution that serves students with disabilities, shall review the minimum credit hours and the maximum number of consecutive semesters required for eligibility in this section and adjust either or both as deemed reasonable and appropriate, based on the needs of the student with disabilities who requires and requests an accommodation. In no case, however, shall fewer than six credit hours per semester be required, and in no case shall eligibility extend beyond fourteen consecutive semesters.
SECTION 6. [NEW MATERIAL] LEGISLATIVE LOTTERY TUITION WAIVER--CONTRACT FOR CONDITIONAL WAIVER--TERMS.--
A. The legislative lottery tuition waiver shall be evidenced by a contract between the qualified student and the department acting on behalf of the state. The contract shall provide for the payment by the state of the costs of tuition and shall be conditioned on the qualified student's attainment of a degree pursuant to Section 5 of the Legislative Lottery Tuition Waiver Act.
B. In the event a student fails to meet the requirements of Section 5 of the Legislative Lottery Tuition Waiver Act, the amount of waived tuition costs shall become payable:
(1) as a loan with principal bearing interest at the rate of seven percent per year;
(2) two years after the last date of enrollment at a public post-secondary educational institution;
(3) in monthly increments in the amount and for the term set by the department in each contract; and
(4) with such other provisions and conditions as determined by the department and contained in the contract.
C. For the purpose of the Legislative Lottery Tuition Waiver Act, a qualified student has the capacity to contract and is bound by any contract executed by the student; the defense that the student was a minor at the time the student executed a contract is not available to the student in any action arising on the contract.
SECTION 7. [NEW MATERIAL] LEGISLATIVE LOTTERY TUITION WAIVER--DUTIES OF THE FISCAL AGENT.--
A. The fiscal agent shall collect from a student all interest and principal payments payable by the student under the terms of the student's contract to the fund in accordance with the provisions of Subsection B of Section 6 of the Legislative Lottery Tuition Waiver Act. In the event of default of payment, the fiscal agent shall declare the full amount of remaining principal and interest due and payable immediately and undertake collection and, in the event of failure to collect after such reasonable efforts as are prescribed by federal regulations or by the department, shall file a claim for payment under the terms of the student's contract. All payments received by the fiscal agent shall be remitted to the state treasurer for the credit of the fund.
B. Accounts of the fiscal agent shall be audited annually by the state auditor.
SECTION 8. [NEW MATERIAL] LEGISLATIVE LOTTERY TUITION WAIVER--REIMBURSEMENT OF THE FISCAL AGENT.--The fiscal agent shall be reimbursed by the department for expenses connected with the agent's duties under the terms of an agreement negotiated annually with the department with the approval of the state board of finance. Reimbursement shall include a reasonable overhead in addition to direct costs. An annual appropriation to the department for the cost of collecting all interest and principal payments payable in accordance with the provisions of Subsection B of Section 6 of the Legislative Lottery Tuition Waiver Act shall be made from the general fund. Any part of this appropriation not needed for the reimbursement of the fiscal agent shall revert to the general fund at the end of each fiscal year.
SECTION 9. [NEW MATERIAL] DEPARTMENT RULEMAKING AND REPORTING.--
A. The department shall promulgate rules setting forth explicit criteria for:
(1) student qualification and continuing eligibility; and
(2) guidelines for the administration of the legislative lottery tuition waiver program.
B. Immediately after promulgation, the department shall distribute the rules to boards of regents and governing boards of public post-secondary educational institutions.
C. By November 1 of each year, the department shall report to the legislative finance committee and the department of finance and administration on:
(1) the status of the fund;
(2) legislative lottery tuition waiver program
participation data aggregated for each public post-secondary educational institution to show:
(a) the number of qualified students who received legislative lottery tuition waivers in the prior fiscal year;
(b) the total number of students, including qualified students, enrolled in the prior fiscal year;
(c) for each semester, the total amount of legislative lottery tuition waivers funded and the total amount of other financial assistance that students applied to tuition costs;
(d) the number of students whose waived tuition costs became payable as a loan pursuant to Section 6 of the Legislative Lottery Tuition Waiver Act;
(e) the amounts of waived tuition costs that became payable as a loan pursuant to Section 6 of the Legislative Lottery Tuition Waiver Act; and
(f) the amounts of principal or interest paid to the fund pursuant to Section 7 of the Legislative Lottery Tuition Waiver Act; and
(3) any additional information required or requested by the legislative finance committee and the department of finance and administration.
SECTION 10. Section 6-24-23 NMSA 1978 (being Laws 1995, Chapter 155, Section 23, as amended) is recompiled in the Legislative Lottery Tuition Waiver Act and is amended to read:
"LOTTERY TUITION FUND CREATED--PURPOSE.--
A. The "lottery tuition fund" is created in the state treasury. The fund shall be administered by the [commission on higher education] department. Earnings from investment of the fund shall accrue to the credit of the fund. 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 [lottery tuition] fund [is] shall be appropriated by the legislature to the [commission on higher education] department for distribution to New Mexico's public post-secondary educational institutions to provide tuition assistance for [New Mexico resident undergraduates as provided by law] qualified students as provided in the Legislative Lottery Tuition Waiver Act."
SECTION 11. Section 21-13-10 NMSA 1978 (being Laws 1963, Chapter 17, Section 9, as amended) is amended to read:
"21-13-10. BOARD DUTIES.--
A. It is the duty of the community college board to determine financial and educational policies of the community college. The community college board shall provide for the management of the community college and execution of these policies by selecting a competent president for the community college, and, upon the president's recommendation, the board shall employ other administrative personnel, instructional staff or other personnel as may be needed for the operation, maintenance and administration of the community college.
B. The community college board shall have the power to fix tuition and fee rates for resident and nonresident students of the community college district, to accept gifts, to accept federal aid, to purchase, hold, sell and rent property and equipment and to promote the general welfare of the institution for the best interest of educational service to the people of the community college district.
[C. To the extent that funds are made available by the legislature from the lottery tuition fund, the community college board shall award legislative lottery scholarships for qualified resident students attending their respective institutions.
D. The legislative lottery scholarships authorized in this section shall apply only to full-time resident students who, immediately upon completion of a high school curriculum at a public or accredited private New Mexico high school or upon receiving a graduate equivalent diploma, are accepted for entrance to and attend a community college. Each legislative lottery scholarship shall be awarded for up to two consecutive years beginning the second semester of the recipient's first year of enrollment, provided that the recipient has maintained residency in New Mexico and maintained a grade point average of 2.5 or higher on a 4.0 scale during the first semester of full-time enrollment.
E. The higher education department shall prepare guidelines setting forth explicit student continuing eligibility criteria and guidelines for administration of the legislative lottery scholarship program. Guidelines shall be distributed to community college boards to enable a uniform availability of the resident student lottery tuition scholarships.
F. For purposes of the legislative lottery scholarship program as it applies to students with disabilities who may require special accommodations, the higher education department, in consultation with the student and the office at the community college that serves students with disabilities, shall review both the definition of "full time" and the maximum number of consecutive 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 semesters.]"
SECTION 12. APPROPRIATION.--One hundred fifty thousand dollars ($150,000) is appropriated from the general fund to the lottery tuition fund for expenditure in fiscal year 2015 and subsequent fiscal years for legislative lottery tuition waivers. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
SECTION 13. REPEAL.--Sections 21-1-4.3, 21-1-4.4 and 21-16-10.1 NMSA 1978 (being Laws 1996, Chapter 71, Sections 3, 4 and 6, as amended) are repealed.
SECTION 14. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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