NURSE LOAN REPAYMENT ACT

SB0011

SENATE BILL 11

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Linda M. López
and
Micaelita Debbie O’Malley
and
Cindy Nava

and
Angel M. Charley
and
Antoinette Sedillo Lopez

AN ACT

RELATING TO HIGHER EDUCATION; ENACTING THE NURSE LOAN REPAYMENT
ACT; PROVIDING POWERS AND DUTIES; ESTABLISHING SELECTION
CRITERIA AND ELIGIBILITY REQUIREMENTS; PROVIDING FOR CONTRACTS
BETWEEN RECIPIENTS AND THE HIGHER EDUCATION DEPARTMENT;
CREATING A FUND; PRESCRIBING A PENALTY; MAKING AN
APPROPRIATION.

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

SECTION 1.
[
NEW MATERIAL
] SHORT TITLE.--This act may be
cited as the "Nurse Loan Repayment Act".

SECTION 2.
[
NEW MATERIAL
] DEFINITIONS.--As used in the
Nurse Loan Repayment Act:

A. "award" means the loan repayment award granted
to a recipient;

B. "committee" means the nurse selection committee;

C. "department" means the higher education
department;

D. "designated underserved area" means a
municipality or county designated by the committee that does
not have a sufficient number of nurses for the needs of the
service area;

E. "loan" means a grant of money to defray the cost
of tuition and fees for a nursing education pursuant to a
contract between the federal government or a commercial lender
and a nursing student requiring repayment of principal and
interest;

F. "nurse" means a person licensed as a registered
nurse or licensed practical nurse pursuant to the Nursing
Practice Act; and

G. "recipient" means a nurse selected to
participate in the nurse loan repayment program.

SECTION 3.
[
NEW MATERIAL
] DEPARTMENT--POWERS AND DUTIES--DESIGNATED UNDERSERVED AREAS--COMMITTEE--ELIGIBILITY AND
SELECTION--APPLICANT QUALIFICATIONS.--

A. The department may:

(1) promulgate rules to implement the
provisions of the Nurse Loan Repayment Act, including the
factors to be used to identify designated underserved areas of
the state;

(2) delegate to other agencies or contract for
the performance of services required by the Nurse Loan
Repayment Act; and

(3) grant an award to repay loans to a
recipient on such terms and conditions as determined by rule of
the department.

B. The department, delegated agency or contractor
shall participate in any federal programs that support the
repayment of education loans incurred by nurses and agree to
the conditions of a federal program.

C. The department shall appoint an ongoing "nurse
selection committee" composed of the secretary of health care
authority, the secretary of health, the dean of the New Mexico
college of nursing producing the highest number of graduates
and the chair of the board of nursing, or their respective
designees, who all serve ex officio. The committee shall:

(1) identify designated underserved areas of
the state and rank them as to need; and

(2) assist the department in determining
eligibility and selection criteria for applicants and
recipients.

D. An applicant shall:

(1) be a citizen or lawful permanent resident
of the United States;

(2) be licensed as a nurse in New Mexico; and

(3) either:

(a) provide nursing services in
designated underserved areas; or

(b) be employed as a faculty member in
clinical nursing or serve as a nursing student preceptor for a
post-secondary educational institution in New Mexico offering
nursing degrees or certifications.

E. The department, with the assistance of the board
of nursing, shall make a full and careful investigation of the
training, ability, character and other pertinent qualifications
of each applicant and determine fitness to be a recipient.

F. The board of nursing shall maintain and make
available on a public website a database of employment
opportunities for nurses in designated underserved areas.

SECTION 4.
[
NEW MATERIAL
] AWARD CRITERIA--CONTRACT--TERMS--PAYMENT--PENALTY.--

A. Award criteria shall provide that:

(1) preference in making awards shall be to
persons who have graduated from a post-secondary educational
institution that gives preferential enrollment to New Mexico
residents;

(2) award amounts may be modified based on
available funding or other special circumstances;

(3) an award shall not exceed the total
nursing education indebtedness of the recipient; and

(4) awards shall be paid on an annual basis
over a period not to exceed four years.

B. The following education debts are not eligible
for repayment pursuant to the Nurse Loan Repayment Act:

(1) amounts incurred as a result of
participation in state loan-for-service programs or other state
financial aid programs that require that service be provided in
exchange for financial assistance;

(2) scholarships;

(3) personal loans; and

(4) loans that exceed individual standard
school expense levels.

C. The award shall be evidenced by a contract
between the recipient and the department acting on behalf of
the state. The general form of the contract required shall be
approved by the attorney general and signed by the recipient
and the department or the designated representative of the
department on behalf of the state.

D. The contract shall provide for the payment by
the state of a stated sum to the recipient's debtors and shall
state the obligations of the recipient under the program,
including a minimum four-year period of service, quarterly
reporting requirements and any other obligations established by
department rule.

E. Recipients shall serve a complete calendar year
in order to receive credit for that year. The annual award
shall be established by the department but shall not exceed
seven thousand five hundred dollars ($7,500) for each of the
first two years and ten thousand dollars ($10,000) for each of
the second two years, for a total not to exceed thirty-five
thousand dollars ($35,000) over a total of not more than four
years per contract; provided, however, that a recipient may
apply for a second four-year contract.

F. If a recipient does not comply with the terms of
the contract, the department shall assess a penalty of up to
the amount of the award disbursed plus fifteen percent
interest, unless the department finds acceptable extenuating
circumstances as to why the recipient cannot serve or comply
with the terms of the contract. If the department does not
find acceptable extenuating circumstances for the recipient's
failure to comply with the contract, the department shall
require immediate repayment plus the amount of the penalty.

G. A recipient of an award shall not be in
violation of the recipient's contract if the recipient
transitions to part-time employment, which part-time employment
shall be at least fifty percent of full-time employment. A
recipient who transitions to part-time employment shall be
required to extend the recipient's contract for the period of
time necessary to make up for the time period of less-than-
full-time employment due to the part-time employment.

H. The department shall adopt rules to implement
the provisions of this section. The rules may provide for the
disbursement of awards to the lenders of recipients in annual
or other periodic installments.

SECTION 5.
[
NEW MATERIAL
] CONTRACT CANCELLATION--ENFORCEMENT.--

A. The department may cancel the contract between
the department and the nurse for any reasonable cause deemed
sufficient by the department.

B. A decision regarding the cancellation of a
contract is a final agency decision and may be appealed to the
district court as provided in Section 39-3-1.1 NMSA 1978.

C. The department is vested with full and complete
authority and power to sue in its own name for the balance due
the state from any recipient on a loan repayment contract.

SECTION 6.
[
NEW MATERIAL
] FUND CREATED.--The "nurse loan
repayment fund" is created as a nonreverting fund in the state
treasury. The fund consists of appropriations, gifts, grants,
donations and income from investment of the fund. Money in the
fund is appropriated to the department to make awards to
recipients who are in compliance with the recipients'
contracts, the Nurse Loan Repayment Act and rules promulgated
in accordance with that act. Expenditures from the fund shall
be on warrant of the secretary of finance and administration
pursuant to vouchers signed by the secretary of higher
education or the secretary's authorized representative.

SECTION 7.
[
NEW MATERIAL
] REPORTS.--The department shall
make annual reports to the governor and the legislature prior
to each regular legislative session of the department's
activities, including cohort data and annual and total program
data that shows:

A. the number and amount of awards given;

B. the service period completion rate of recipients
in the program and, as of the date of the report, the number of
recipients who completed the program and remain in New Mexico
and the number of those recipients who are practicing in a
designated underserved area;

C. the amounts repaid and amounts owed on
educational loans and the total number and total amount of
penalties assessed against and collected from recipients who
left the program;

D. the service locations of current and former
recipients in New Mexico;

E. for each designated underserved area in the
state, the number of recipients who are serving or have served
in the area and whether there are recipients who are not
employed or not employed full time in the area; and

F. other information determined by the department.

SECTION 8.
APPROPRIATION.--Five million dollars
($5,000,000) is appropriated from the general fund to the nurse
loan repayment fund for expenditure in fiscal year 2027 and
subsequent fiscal years to carry out the purposes of the fund.
Any unexpended balance remaining at the end of a fiscal year
shall not revert to the general fund.

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