Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Gonzales
LAST UPDATED
ORIGINAL DATE 2/28/25
SHORT TITLE Recruit & Retain Rural Health Providers
BILL
NUMBER Senate Bill 338
ANALYST Klundt
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$5,000.0 Nonrecurring General fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected DOH $100.0 $100.0 $200.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Department of Health (DOH) Health Care Authority (HCA)
SUMMARY
Senate Bill 338 (SB338) appropriates $5 million from the general fund in fiscal years 2026 and
2027 to the Department of Health (DOH) for Health Service Corps to support the recruitment
and retention of health care providers who treat rural or underserved populations or patients of
Federally Qualified Health Centers (FQHCs). No more than $200 thousand may be expended on
administrative costs.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The appropriation of $5 million contained in this bill is a nonrecurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of FY27 shall revert to the
general fund. Senate Bill 338 – Page 2
DOH reports the department would require one FTE and approximately $100 thousand annually
to implement this bill.
SIGNIFICANT ISSUES
DOH reported struggles to provide adequate healthcare to its rural and underserved populations
due to low population density and a shortage of medical providers. Many counties are designated
as medically underserved areas. To address these challenges, the New Mexico Health Service
Corps was established to recruit and retain healthcare professionals in rural areas. The program
includes a stipend program, which provides financial support to medical and dental students in
exchange for service in underserved communities, and a community practice site support
program, which offers grants to healthcare facilities.
In FY15, the Health Service Corps had a budget of $750 thousand. Following cuts in FY17, the
budget was reduced to $230 thousand for the stipend program, which now serves fewer
participants. DOH notes that between FY21 and FY24, an average of seven participants per year
received stipends, down from 27 in FY16.
New Mexico has 16 FQHCs and four FQHC look-alikes (community-based health care providers
that meet the requirements of the health center program but do not receive funding) that operate
over 200 clinics offering primary care services, including dental care, throughout the state.
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