AN ACT

RELATING TO LEGAL EDUCATION; ESTABLISHING A LEGAL EDUCATION LOAN REPAYMENT PROGRAM FOR ATTORNEYS SERVING IN PUBLIC SERVICE EMPLOYMENT; CREATING A PUBLIC SERVICE LAW ADVISORY COMMITTEE.

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

     Section 1. SHORT TITLE.--This act may be cited as the "Public Service Law Loan Repayment Act".

     Section 2. PURPOSE.--The purpose of the Public Service Law Loan Repayment Act is to improve access to the justice system in New Mexico by increasing the number of attorneys in public service employment through a legal education loan repayment program.

     Section 3. DEFINITIONS.--As used in the Public Service Law Loan Repayment Act:

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

          B. "committee" means the public service law advisory committee;

          C. "legal education" means education at an accredited law school and any bar review preparation courses for the state bar examination;

          D. "loan" means money allocated to defray the costs incidental to a legal education under a contract between the federal government or a commercial lender and a law school student, requiring either repayment of principal and interest or repayment in services;

          E. "participating attorney" means an attorney who receives a loan repayment award from the commission pursuant to the provisions of the Public Service Law Loan Repayment Act; and

          F. "public service employment" means employment with:

                (1) an organization that is exempt from taxation pursuant to Section 501(c)(3) of Title 26 of the United States Code and that provides for the care and maintenance of indigent persons in New Mexico through civil legal services;

                (2) the public defender department; or

                (3) a New Mexico district attorney's office.

     Section 4. COMMISSION--POWERS AND DUTIES.--

          A. The commission may:

                (1) grant an award to repay loans obtained for legal education expenses of a participating attorney as consideration and inducement to the attorney to engage in public service employment; and

                (2) delegate to other agencies or contract for the performance of services required by the provisions of the Public Service Law Loan Repayment Act.

          B. The commission shall make a full and careful investigation of the ability, character and qualifications of each applicant and determine fitness to become a participating attorney in the public service law loan repayment program.

     Section 5. LOAN REPAYMENT PROGRAM--PARTICIPANT ELIGIBILITY--AWARD CRITERIA.--

          A. An applicant shall be licensed to practice in New Mexico as an attorney and shall declare an intent to practice as an attorney in public service employment.

          B. Prior to submitting an application to the public service law loan repayment program, an applicant shall apply to all available legal education loan repayment programs offered by the applicant's law school for which the applicant qualifies.

          C. An applicant who intends to practice as an attorney in a public service employment position that earns more than forty-five thousand dollars ($45,000) per year is not eligible for participation in the public service law loan repayment program.

          D. Prior to receiving a loan repayment award, the applicant shall file with the commission:

                (1) a declaration of intent to practice as an attorney in public service employment;

                (2) proof of prior application to all legal education loan repayment programs offered by the applicant's law school for which the applicant qualifies; and

                (3) documentation that includes the applicant's total legal education debt, salary, any amounts received by the applicant from other law loan repayment programs and other sources of income deemed by the commission as appropriate for consideration.

          E. Award criteria shall provide that:

                (1) preference in making awards shall be to applicants who:

                     (a) have graduated from the university of New Mexico law school;

                     (b) have the greatest financial need based on legal education indebtedness and salary;

                     (c) work in public service employment that has the lowest salaries; and

                     (d) work in public service employment in underserved areas of New Mexico that are in greatest need of attorneys practicing in public service employment;

                (2) an applicant's employment as an attorney in public service employment prior to participation in the public service law loan repayment program shall not count as time spent toward the minimum three-year period of service requirement pursuant to the contract between the participating attorney and the commission acting on behalf of the state;

                (3) award amounts are dependent upon the applicant's total legal education debt, salary and other sources of income deemed by the commission as appropriate for consideration;

                (4) award amounts may be modified based upon available funding or other special circumstances;                          (5) an award shall not exceed the total legal education debt of any participant; and

                (6) award amounts shall be reduced by the sum of the total award amounts received by the participant from other legal education loan repayment programs.

          F. The following legal education debts are not eligible for repayment pursuant to the Public Service Law Loan Repayment Act:

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

                (2) scholarships that have a service component or obligation;

                (3) personal loans from relatives or friends; and

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

     Section 6. LOAN REPAYMENT CONTRACT TERMS--PAYMENT.--           A. The loan repayment award shall be evidenced by a contract between the participating attorney and the commission acting on behalf of the state. The contract shall state the amount of the award and the obligations of the participating attorney under the public service law loan repayment program, including a minimum three-year period of service, quarterly reporting requirements and other policies established by the commission.

          B. A participating attorney shall serve a complete year in order to receive credit for that year. The minimum credit for a year shall be established by the commission. The maximum credit for a year shall not exceed seven thousand two hundred dollars ($7,200).

          C. If a participating attorney does not comply with the terms of the contract, the commission shall require immediate repayment of the award plus eighteen percent interest and may assess a penalty of up to three times the amount of award disbursed, unless the commission finds acceptable extenuating circumstances for why the participating attorney cannot serve or comply with the terms of the contract. If the commission does not find acceptable extenuating circumstances for the participating attorney's failure to comply with the contract, the commission shall require immediate repayment of the award plus the amount of the penalty.

          D. The commission, in consultation with the committee, shall adopt rules to implement the provisions of this section. The rules may provide for the disbursement of loan repayment awards in annual or other periodic installments.

     Section 7. CONTRACTS--ENFORCEMENT.--The general form of the contract required shall be prepared and approved by the attorney general and the department of finance and administration and signed by the participating attorney and by the executive director of the commission or the executive director's designated representative 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 any attorney on any such contract.

     Section 8. PUBLIC SERVICE LAW ADVISORY COMMITTEE--CREATED--DUTIES.--

          A. The "public service law advisory committee" is created to advise the commission on matters relating to the administration of the Public Service Law Loan Repayment Act.

          B. The committee is composed of:

                (1) the dean of the university of New Mexico law school or the dean's designee;

                (2) the executive director of New Mexico legal aid or the director's designee who shall be an attorney employed with an organization that is exempt from taxation pursuant to Section 501(c)(3) of Title 26 of the United States Code and that provides civil legal services to indigent persons in New Mexico;

                (3) the chief public defender or the chief's designee;

                (4) a district attorney appointed by the New Mexico district attorneys association; and

                (5) a financial aid or career services officer of the university of New Mexico law school designated by the dean.

          C. The committee shall:

                (1) make recommendations to the commission on applicants for the public service law loan repayment program;

                (2) advise the commission on the adoption of rules to implement the provisions of the Public Service Law Loan Repayment Act; and

                (3) give advice or other assistance to the commission as requested.

     Section 9. FUND CREATED--METHOD OF PAYMENT.--The "public service law loan repayment fund" is created in the state treasury. All money appropriated for the public service law loan repayment program shall be credited to the fund and all payments for repayment of awards or penalties received by the commission shall be credited to the fund. All payments for loan repayment awards shall be by warrant of the secretary of finance and administration upon vouchers signed by the designated representative of the commission. Any unexpended or unencumbered balance remaining in the public service law loan repayment fund at the end of a fiscal year shall not revert to the general fund.

     Section 10. CANCELLATION.--The commission may cancel any contract made between it and any participating attorney for any reasonable cause deemed sufficient by the commission.

     Section 11. REPORTS.--The commission shall make an annual report to the governor and the legislature, prior to each regular session, of its activities, including the loan repayment awards granted, the names and addresses of participating attorneys and their employers who are in public service employment pursuant to the Public Service Law Loan Repayment Act and the names of participating attorneys who are not employed in public service employment, the reason they are not employed in public service employment and the amounts owed and paid on loans and loan repayment awards.