HB0273

HOUSE BILL 273

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

James E. Smith and Daniel A. Ivey-Soto

AN ACT

RELATING TO PUBLIC EDUCATION; AMENDING A SECTION OF THE AUDIT ACT TO INCLUDE CHARTER SCHOOLS IN THE DEFINITION OF "AGENCY"; AMENDING THE PUBLIC SCHOOL CODE TO ALLOW A HIGH-PERFORMING CHARTER SCHOOL TO HAVE ITS CHARTER RENEWED THROUGH A STREAMLINED RENEWAL APPLICATION PROCESS, OPEN MULTIPLE SITES AND EXPAND ITS ENROLLMENT; TO REMOVE THE LIMITS ON THE NUMBER OF CHARTER SCHOOLS THAT MAY BE ESTABLISHED EACH YEAR; TO PROVIDE FOR THE AUTOMATIC CLOSURE OF A POORLY PERFORMING CHARTER SCHOOL; TO SPECIFY THE TIME PERIOD IN WHICH A CHARTER SCHOOL MUST PROVIDE INFORMATION ABOUT CAPITAL IMPROVEMENTS TO A SCHOOL DISTRICT FOR PROPERTY TAX IMPOSITION PURPOSES; TO REMOVE THE LOCAL MATCH REQUIREMENT FOR CHARTER SCHOOL CAPITAL OUTLAY GRANTS; TO CLARIFY REQUIREMENTS FOR CHARTER SCHOOL BUDGETS AND SIZE ADJUSTMENT, ENROLLMENT GROWTH AND AT-RISK FACTORS; TO ESTABLISH A FUNDING FORMULA COST DIFFERENTIAL FOR NEW CHARTER SCHOOLS; AND TO MAKE TECHNICAL CORRECTIONS TO SECTIONS OF THE CHARTER SCHOOLS ACT; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.

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

SECTION 1. Section 12-6-2 NMSA 1978 (being Laws 1969, Chapter 68, Section 2, as amended) is amended to read:

"12-6-2. DEFINITIONS.--As used in the Audit Act:

A. "agency" means:

(1) any department, institution, board, bureau, court, commission, district or committee of the government of the state, including district courts, magistrate or metropolitan courts, district attorneys and charitable institutions for which appropriations are made by the legislature;

(2) any political subdivision of the state, created under either general or special act, that receives or expends public money from whatever source derived, including counties, county institutions, boards, bureaus or commissions; municipalities; drainage, conservancy, irrigation or other special districts; and school districts and charter schools;

(3) any entity or instrumentality of the state specifically provided for by law, including the New Mexico finance authority, the New Mexico mortgage finance authority and the New Mexico lottery authority; and

(4) every office or officer of any entity listed in Paragraphs (1) through (3) of this subsection; and

B. "local public body" means a mutual domestic water consumers association, a land grant, an incorporated municipality or a special district."

SECTION 2. Section 22-8-6.1 NMSA 1978 (being Laws 1993, Chapter 227, Section 8, as amended) is repealed and a new Section 22-8-6.1 NMSA 1978 is enacted to read:

"22-8-6.1. [NEW MATERIAL] CHARTER SCHOOL BUDGETS.--

A. Each charter school shall submit a school-based budget to its authorizer for review or amendment in accordance with the Public School Finance Act and the Charter Schools Act. The approval or amending authority of the charter school's authorizer as it relates to the charter school's budget shall be limited to ensuring that sound fiscal practices are followed in the development of the budget and the budget is within available resources. The authorizer shall have no veto authority over individual line items within the charter school's proposed budget.

B. Upon final approval of the charter school budget by its authorizer:

(1) the budget of each locally chartered charter school shall be included separately in the school district budget submission in accordance with the Public School Finance Act and the Charter Schools Act; and

(2) the budget of each state-chartered charter school shall be submitted to the department in accordance with the Public School Finance Act and the Charter Schools Act.

C. For the first year of its operation, the budget of each charter school shall be based on the projected number of program units generated by that charter school and its students using the at-risk index and the instructional staff training and experience index of the school district in which the charter school is geographically located and shall be adjusted using the qualified MEM on the first reporting date of the current school year. For the second and subsequent school years of operation, the budget of each charter school shall be based upon the number of program units generated using the average of the qualified MEM on the second and third reporting dates of the prior year and its own at-risk index and instructional staff training and experience index unless otherwise provided in the Public School Finance Act."

SECTION 3. Section 22-8-23 NMSA 1978 (being Laws 1975, Chapter 119, Section 1, as amended) is amended to read:

"22-8-23. SIZE ADJUSTMENT PROGRAM UNITS.--

A. An approved public school with a MEM of less

than 400, including early childhood education full-time-equivalent MEM but excluding membership in class C and class D programs and excluding full-time-equivalent membership in three- and four-year-old developmentally disabled programs, is eligible for additional program units. [Separate schools established to provide special programs, including but not limited to vocational and alternative education, shall not be classified as public schools for purposes of generating size adjustment program units.] Schools that are co-located in a single facility or located on the same campus shall be considered one school for the purpose of calculating size adjustment program units; provided that if a charter school is co-located in a single facility or located on the campus of another school, each charter school or school district shall be entitled to a share of the size adjustment program units in proportion to the size adjustment units generated by all schools that are included in the calculation as if the size adjustment units have been calculated separately. The number of additional program units to which a school district or charter school is entitled under this subsection is the sum of elementary-junior high units and senior high units computed in the following manner; provided that any school located within the boundaries of a school district with a MEM of 2,800 or more on the first reporting date shall generate eighty percent of the following calculations:

Elementary-Junior High Units

200 - MEM

_________ x 1.0 x MEM = Units

200

where MEM is equal to the membership of an approved elementary or junior high school, including early childhood education full-time-equivalent membership but excluding membership in class C and class D programs and excluding full-time-equivalent membership in three- and four-year-old developmentally disabled programs;

Senior High Units

200 - MEM

_________ x 2.0 x MEM = Units

200

; or

Senior High Units

400 - MEM

_________ x 1.6 x MEM = Units

400

whichever calculation for senior high units is higher, where

MEM is equal to the membership of an approved senior high

school excluding membership in class C and class D programs.

B. A school district with total MEM of less than 4,000, including early childhood education full-time-equivalent MEM, is eligible for additional program units. The number of additional program units to which a school district is entitled under this subsection is the number of district units computed in the following manner:

District Units

4,000 - MEM

___________ x 0.15 x MEM = Units

4,000

where MEM is equal to the total district membership,

including early childhood education full-time-equivalent membership.

C. A school district with over 10,000 MEM with a ratio of MEM to senior high schools of less than 4,000:1 is eligible for additional program units based on the number of approved regular senior high schools that are not eligible for senior high units under Subsection A of this section. The number of additional program units to which an eligible school district is entitled under this subsection is the number of units computed in the following manner:

4,000 - MEM

___________ x 0.50 = Units

Senior High Schools

where MEM is equal to the total district membership, including early childhood education full-time-equivalent membership, and where senior high schools are equal to the number of approved regular senior high schools in the school district.

D. A school district, as defined in Subsection R of Section 22-1-2 NMSA 1978, with a MEM of less than 200, including early childhood education full-time-equivalent MEM, is eligible for additional program units; provided that the department certifies that the school district has implemented practices to reduce scale inefficiencies, including shared service agreements with regional education cooperatives or other school districts for noninstructional functions and distance education. The number of additional program units to which a school district is entitled under this subsection is the number of units computed in the following manner:

200 - MEM = Units

where MEM is equal to the total district MEM, including early childhood education full-time-equivalent MEM."

SECTION 4. A new section of the Public School Finance Act is enacted to read:

"[NEW MATERIAL] NEW CHARTER SCHOOL PROGRAM UNITS.--

A. Notwithstanding the provisions of Section 22-8-23 NMSA 1978, a charter school in its first year of operation shall not generate size adjustment program units but shall generate new charter school program units equal to eighty percent of the units the school would have generated in accordance with the calculation in Section 22-8-23 NMSA 1978.

B. Notwithstanding the provisions of Section 22-8-23 or 22-8-23.1 NMSA 1978, a charter school that is in its second or subsequent years of operation that phases in additional grade levels on a year-by-year basis shall not be able to generate size adjustment program units or enrollment growth program units while it is phasing in grade levels but shall generate new charter school program units and is eligible for additional program units equal to eighty percent of the units the school would have generated in accordance with the calculation in Section 22-8-23 NMSA 1978 and eighty percent of the units that would have been generated in accordance with the calculation in Section 22-8-23.1 NMSA 1978."

SECTION 5. Section 22-8-23.1 NMSA 1978 (being Laws 1990 (1st S.S.), Chapter 3, Section 7, as amended) is repealed and a new Section 22-8-23.1 NMSA 1978 is enacted to read:

"22-8-23.1. [NEW MATERIAL] ENROLLMENT GROWTH PROGRAM UNITS.--

A. A school district or charter school with a MEM of less than 1,500 on the first reporting date of the current year with an increase in MEM equal to or greater than one percent, when compared with the immediately preceding year, is eligible for additional program units. The number of additional program units shall be calculated by adding the results of the following calculations:

(1) ((Current Year MEM - Previous Year MEM) - (Current Year MEM x. 03)) x 1.5 = Units; and

(2) (Current Year MEM - Previous Year MEM) x .50 = Units.

B. A school district or charter school with a MEM of 1,500 or more on the first reporting date of the current year with an increase in MEM equal to or greater than one percent, when compared with the immediately preceding year, is eligible for additional program units. The number of additional program units shall be calculated by adding the results of the following calculations:

(1) ((Current Year MEM - Previous Year MEM) - (Current Year MEM x .05)) x 1.5 = Units; and

(2) (Current Year MEM - Previous Year MEM) x .50 = Units.

C. The increase in MEM shall be calculated as follows:

(Current Year MEM - Previous Year MEM)

______________________________________

Previous Year MEM x 100 = Percent Increase.

D. As used in this section:

(1) "current year MEM" means MEM on the first reporting date of the current school year minus MEM reported on the first reporting date of the current school year that is included in the calculation of a school district's or charter school's program cost;

(2) "MEM" means the total school district or charter school membership, including early childhood education full-time-equivalent membership and special education membership, but excluding full-day kindergarten membership for the first year that full-day kindergarten is implemented in a school in accordance with Subsection D of Section 22-13-3.2 NMSA 1978; and

(3) "previous year MEM" means MEM on the first reporting date of the previous school year."

SECTION 6. Section 22-8-23.3 NMSA 1978 (being Laws 1997, Chapter 40, Section 7, as amended) is amended to read:

"22-8-23.3. AT-RISK PROGRAM UNITS.--

A. A school district is eligible for additional program units if it establishes within its department-approved educational plan identified services to assist students to reach their full academic potential. A school district receiving additional at-risk program units shall include a report of specified services implemented to improve the academic success of at-risk students. The report shall identify the ways in which the school district and individual schools use funding generated through the at-risk index and the intended outcomes. For purposes of this section, "at-risk student" means a student who meets the criteria to be included in the calculation of the three-year average total rate in Subsection [B] C of this section. The number of additional units to which a school district is entitled under this section is computed in the following manner:

At-Risk Index x MEM = Units

where MEM is equal to the total district membership, including early childhood education, full-time-equivalent membership and special education membership and where the at-risk index is calculated in the following manner:

Three-Year Average Total Rate x 0.106 = At-Risk Index.

B. A charter school shall be eligible to generate additional program units if the charter school establishes within its department-approved budget identified services to assist students to reach their full academic potential. Such a charter school that is eligible for additional program units shall include a report of specific services implemented to impose the academic success of at-risk students. The report shall identify the ways in which the charter school uses funding generated through the at-risk index and the intended outcomes. For purposes of this section, "at-risk student" means a student who meets the criteria to be included in the calculation of the three-year average total rate in Subsection C of this section. The number of additional program units to which a charter school is entitled to generate under this subsection shall be computed in the following manner:

At-Risk Index x MEM = Units

where MEM is equal to the total charter school membership, including early childhood education, full-time-equivalent membership and special education membership, and where the at-risk index is calculated in the following manner:

Three-Year Average Total Rate x 0.106 = At-Risk Index.

[B.] C. To calculate the three-year average total rate, the department shall compute a three-year average of the school district's or charter school's percentage of membership used to determine its Title I allocation, a three-year average of the percentage of membership classified as English language learners using criteria established by the federal office of civil rights and a three-year average of the percentage of student mobility. The department shall then add the three-year average rates. The number obtained from this calculation is the three-year average total rate; provided that:

(1) for the first year of its operation, a charter school's three-year average total rate shall be the three-year average total rate of the school district in which it is geographically located;

(2) for the second year of operation, a charter school's three-year average total rate shall be based on the prior year's data;

(3) for the third year of operation, a charter school's three-year average total rate shall be based on the average of the previous two years' data; and

(4) for the fourth and subsequent years of operation, a charter school's three-year average total rate shall be based on the average of the previous three years' data.

[C.] D. The department shall recalculate the at-risk index for each school district or charter school every year."

SECTION 7. Section 22-8B-4 NMSA 1978 (being Laws 1999, Chapter 281, Section 4, as amended) is amended to read:

"22-8B-4. CHARTER SCHOOLS' RIGHTS AND RESPONSIBILITIES--OPERATION.--

A. A charter school [shall be] is subject to all federal and state laws and constitutional provisions prohibiting discrimination on the basis of disability, physical or mental handicap, serious medical condition, race, creed, color, sex, gender identity, sexual orientation, spousal affiliation, national origin, religion, ancestry or the need for special education services.

B. A charter school shall be governed as set forth in the school's charter contract by a governing body [in the manner set forth in the charter contract; provided that a governing body shall have] that has at least five members, [and provided further that] no member of [a governing body] which, for a charter school that is initially approved on or after July 1, 2005 or whose charter is renewed on or after July 1, 2005, [shall serve] serves on the governing body of another charter school. [No] A member of a local school board shall [be] not serve as a member of a governing body for a charter school or be employed in any capacity by a locally chartered charter school located within the local school board's school district during the term of office for which the member was elected or appointed.

C. A charter school shall [be responsible] assume responsibility for:

(1) its own operation, including preparation of a budget, subject to audits [pursuant to] as required by the Audit Act; [and]

(2) contracting for services; and

(3) managing its own personnel [matters].

D. A charter school may contract with a school district, a university or college, the state, another political subdivision of the state, the federal government or one of its agencies, a tribal government or any other third party for the use of a facility, its operation and maintenance and the provision of any service or activity that the charter school is required to perform [in order] to carry out the educational program described in its charter contract. Facilities used by a charter school shall meet the standards required [pursuant to] by Section 22-8B-4.2 NMSA 1978.

E. A conversion school chartered before July 1, 2007 may choose to continue using the school district facilities and equipment it had been using [prior to] before conversion, subject to [the provisions of] Subsection F of this section.

F. The school district in which a charter school is geographically located shall provide [a] the charter school with available facilities for the school's operations unless the facilities are currently used for other educational purposes. An agreement for the use of school district facilities by a charter school may provide for reasonable lease payments [provided that the payments] that do not exceed the sum of the lease reimbursement rate provided in Subparagraph (b) of Paragraph (1) of Subsection I of Section 22-24-4 NMSA 1978 plus any reimbursement for actual direct costs incurred by the school district in providing the facilities [and provided further that]. Any such lease payments received by a school district may be retained by the school district and [shall not be] are not considered [to be] cash balances in any calculation [pursuant to] as provided in Section 22-8-41 NMSA 1978. The available facilities provided by a school district to a charter school shall meet all occupancy standards as specified by the public school capital outlay council. As used in this subsection, "other educational purposes" includes health clinics, daycare centers, teacher training centers, school district administration functions and other ancillary services related to a school district's functions and operations.

G. A locally chartered charter school may pay the costs of operation and maintenance of its facilities or may contract with the school district to provide facility operation and maintenance services.

H. Locally chartered charter school facilities are eligible for state and local capital outlay funds and shall be included in the school district's five-year facilities plan.

I. A locally chartered charter school shall negotiate with a school district to provide transportation to students eligible for transportation under [the provisions of] the Public School Code. The school district, in conjunction with the charter school, may establish a limit for student transportation to and from the charter school site not to extend beyond the school district boundary.

J. A charter school shall be a nonsectarian, nonreligious and non-home-based public school.

K. Except as otherwise provided in the Public School Code, a charter school shall not charge tuition or have admission requirements.

L. With the approval of the chartering authority, a single charter school may maintain separate facilities at [two or more locations within the same school district] more than one site within the jurisdiction of the school's chartering authority, but, for purposes of calculating program units [pursuant to] as provided in the Public School Finance Act, the separate facilities shall be treated together as one school.

M. A charter school [shall be] is subject to [the provisions of] Section 22-2-8 NMSA 1978 and the Assessment and Accountability Act.

N. Within constitutional and statutory limits, a charter school may acquire and dispose of property [provided that]. Upon the termination of [the] a charter, all assets of the locally chartered charter school shall revert to the local school board and all assets of the state-chartered charter school shall revert to the state, except that, if all or any portion of a state-chartered charter school facility is financed with the proceeds of general obligation bonds issued by a local school board, the facility shall revert to the local school board.

O. The governing body of a charter school may [accept or] reject any charitable gift, grant, devise or bequest [provided that no such] or accept a charitable gift, grant, devise or bequest [shall be accepted] if it is not subject to [any] a condition contrary to law or to the terms of the school's charter. [The particular] Any accepted charitable gift, grant, devise or bequest shall be considered an asset of the charter school to which it is given.

P. The governing body of a charter school may contract and sue and be sued. A local school board [shall not be] is not liable for any acts or omissions of the charter school.

Q. A charter school shall comply with all state and federal health and safety requirements applicable to public schools, including those health and safety codes relating to educational building occupancy.

R. A charter school is a public school that may contract with a school district or other party for the provision of financial management, food services, transportation, facilities, education-related services or other services. The governing body of a charter school shall not contract with a for-profit entity for the management of the charter school.

S. To enable state-chartered charter schools to submit [required] data [to] required by the department, the department shall maintain an accountability data system [shall be maintained by the department].

T. A charter school shall comply with all applicable state and federal laws and rules related to providing special education services. Charter school students with disabilities and their parents retain all rights under the federal Individuals with Disabilities Education Act and its implementing state and federal rules. Each charter school is responsible for identifying, evaluating and offering a free, appropriate public education to all [eligible] children [who are] eligible and accepted for enrollment in that charter school. [The] A state-chartered charter school, as a local educational agency, shall assume responsibility for determining its students' needs for special education and related services. The division may promulgate rules to implement the requirements of this subsection.

U. The governing body of a charter school, without approval of the chartering authority, may open an additional site of the school within the jurisdiction of the school's chartering authority if, for each of the three prior years, the department assigned the school a letter grade of A or B under the A-B-C-D-F Schools Rating Act."

SECTION 8. Section 22-8B-5.3 NMSA 1978 (being Laws 2011, Chapter 14, Section 8) is amended to read:

"22-8B-5.3. CHARTERING AUTHORITY--POWERS--DUTIES--LIABILITY.--A chartering authority shall:

A. evaluate charter applications;

B. actively pursue the utilization of charter schools to satisfy identified education needs and promote [a] diversity [of] in educational choices;

C. approve charter applications that meet the requirements of the Charter Schools Act;

D. decline to approve charter applications that fail to meet the requirements of the Charter Schools Act or are otherwise inadequate;

E. negotiate and execute, in good faith, charter contracts that meet the requirements of the Charter Schools Act with each approved charter school;

F. monitor, in accordance with the requirements of the Charter Schools Act and the terms of the charter contract, the performance and legal compliance of charter schools under their authority;

G. determine whether a charter school merits suspension, revocation or nonrenewal; and

H. develop and maintain chartering policies and practices consistent with nationally recognized principles and standards for quality charter authorizing in all major areas of authorizing, including:

(1) organizational capacity and infrastructure;

(2) evaluating charter applications;

(3) performance contracting;

(4) charter school oversight and evaluation; and

(5) charter school suspension, revocation and renewal processes."

SECTION 9. Section 22-8B-6 NMSA 1978 (being Laws 1999, Chapter 281, Section 6, as amended) is amended to read:

"22-8B-6. CHARTER SCHOOL REQUIREMENTS--APPLICATION PROCESS--AUTHORIZATION--STATE BOARD OF FINANCE DESIGNATION REQUIRED--PUBLIC HEARINGS--SUBCOMMITTEES.--

A. A local school board [has the authority to] may approve the establishment of a locally chartered charter school within that local school board's district.

B. No later than the second Tuesday [of] in January of the year in which an application to establish a charter school will be filed, the organizers of a proposed charter school shall provide written notification to the commission and the school district in which the charter school is proposed to be located of their intent to establish a charter school. Failure to notify may result in an application not being accepted.

C. A charter school applicant shall apply to either a local school board or the commission for a charter. [If an application is submitted to a chartering authority, it must process the application.] Applications for initial charters shall be submitted by June 1 to be eligible for consideration for the following fiscal year [provided that the June 1] unless that deadline [may be] is waived [upon agreement of] by the applicant and the chartering authority.

D. An application shall include the total number of grades the charter school proposes to [provide] offer, either immediately or [phased] in phases. A charter school may decrease the number of grades it eventually offers, but it shall not increase the number of grades [or the total number of students proposed to be served in each grade]. Except for ensuring compliance with Subsection G of this section, a chartering authority shall not limit the total number of students served in a charter school.

E. An application shall include a detailed description of the charter school's projected facility needs, including projected requests for capital outlay assistance that have been approved by the director of the public school facilities authority or the director's designee. The director shall respond to a written request for review from a charter applicant within forty-five days of the request.

F. An application may be made by one or more teachers, parents or community members or by a public post-secondary educational institution or nonprofit organization. Municipalities, counties, private post-secondary educational institutions and for-profit business entities are not eligible to apply for or receive a charter.

G. An initial application for a charter school shall not be made [after June 30, 2007] if the proposed charter school's proposed enrollment for all grades or the proposed charter school's proposed enrollment for all grades in combination with any other charter school's enrollment for all grades would equal or exceed ten percent of the total MEM of the school district in which the charter school will be geographically located and that school district has a total enrollment of not more than one thousand [three] five hundred students.

H. A state-chartered charter school shall not be approved for operation unless its governing body has qualified to be a board of finance.

I. [The] A chartering authority shall receive and review all completed applications for charter schools submitted to it. The chartering authority shall not charge application fees.

J. The chartering authority shall hold at least one public hearing in the school district in which the charter school is proposed to be located to obtain information and community input to assist it in its decision whether to grant a charter [school application]. The chartering authority may designate a subcommittee of [no fewer than] at least three members to hold the public hearing, and, if [so] the subcommittee holds the hearing, the hearing shall be transcribed for later review by other members of the chartering authority. Community input may include written or oral comments in favor of or in opposition to the application from the applicant, the local community and, for state-chartered charter schools, the local school board and school district in whose geographical boundaries the charter school is proposed to be located.

K. The chartering authority shall rule on the application for a charter school in a public meeting by September 1 of the year the application was received. [provided, however, that prior to] Before ruling on the application for which a designated subcommittee was used, any member of the chartering authority who was [not present] absent at the public hearing shall receive the transcript of the public hearing together with documents submitted for the public hearing. If not ruled upon by that date, the secretary shall review the charter application [shall be automatically reviewed by the secretary] in accordance with [the provisions of] Section 22-8B-7 NMSA 1978. The charter school applicant and the chartering authority may, however, jointly waive the deadlines set forth in this section.

L. A chartering authority may approve, approve with conditions or deny an application. A chartering authority may deny an application if:

(1) the application is incomplete or inadequate;

(2) the application does not propose to offer an educational program consistent with the requirements and purposes of the Charter Schools Act;

(3) the proposed head administrator or other administrative or fiscal staff was involved with another charter school whose charter was denied or revoked for fiscal mismanagement or the proposed head administrator or other administrative or fiscal staff was discharged from a public school for fiscal mismanagement;

(4) for a proposed state-chartered charter school, it does not request to have the governing body of the charter school designated as a board of finance or the governing body does not qualify as a board of finance; or

(5) the application is otherwise contrary to the best interests of the charter school's projected students, the local community or the school district in whose geographic boundaries the charter school applies to operate.

M. If the chartering authority denies a charter school application or approves the application with conditions, it shall state its reasons for the denial or conditions in writing within fourteen days of the meeting. If the chartering authority grants a charter, the approved charter shall be provided to the applicant together with any imposed conditions.

N. A charter school that has received a notice from the chartering authority denying approval of the charter shall have a right to a hearing by the secretary as provided in Section 22-8B-7 NMSA 1978."

SECTION 10. Section 22-8B-9 NMSA 1978 (being Laws 1999, Chapter 281, Section 9, as amended) is amended to read:

"22-8B-9. CHARTER SCHOOL CONTRACT--CONTENTS--RULES.--

A. The chartering authority shall enter into a contract with the governing body of the applicant charter school within thirty days of approval of the charter application. The charter contract shall be the final authorization for the charter school and shall be part of the charter. If the chartering authority and the applicant charter school fail to agree upon the terms of or enter into a contract within thirty days of the approval of the charter application, either party may appeal to the secretary to finalize the terms of the contract; provided that such appeal must be provided in writing to the secretary within forty-five days of the approval of the charter application. Failure to enter into a charter contract or appeal to the secretary pursuant to this section precludes the chartering authority from chartering the school.

B. The charter contract shall include:

(1) all agreements regarding the release of the charter school from department and local school board rules and policies, including discretionary waivers provided for in Section 22-8B-5 NMSA 1978;

(2) any material term of the charter application as determined by the parties to the contract;

(3) the mission statement of the charter school and how the charter school will report on implementation of its mission;

(4) the chartering authority's duties to the charter school and liabilities of the chartering authority as provided in Section 22-8B-5.3 NMSA 1978;

(5) a statement of admission policies and procedures;

(6) signed assurances from the charter school's governing body members regarding compliance with all federal and state laws governing organizational, programmatic and financial requirements applicable to charter schools;

(7) the criteria, processes and procedures that the chartering authority will use for ongoing oversight of operational, financial and academic performance of the charter school;

(8) a detailed description of how the chartering authority will use the withheld two percent of the school-generated program cost as provided in Section 22-8B-13 NMSA 1978;

(9) the types and amounts of insurance liability coverage to be obtained by the charter school;

(10) the term of the contract;

(11) the process and criteria that the chartering authority intends to use to annually monitor and evaluate the fiscal, overall governance and student performance of the charter school, including the method that the chartering authority intends to use to conduct the evaluation as required by Section 22-8B-12 NMSA 1978;

(12) the dispute resolution processes agreed upon by the chartering authority and the charter school; provided that the processes shall, at a minimum, include:

(a) written notice of the intent to invoke the dispute resolution process, which notice shall include a description of the matter in dispute;

(b) a time limit for response to the notice and cure of the matter in dispute;

(d) a process for apportionment of all costs related to the dispute resolution process; and

(e) a process for final resolution of the issue reviewed under the dispute resolution process;

(13) the criteria, procedures and time lines, agreed upon by the charter school and the chartering authority, addressing charter revocation and deficiencies found in the annual status report pursuant to the provisions of Section 22-8B-12 NMSA 1978;

(14) if the charter school contracts with a third-party provider, the criteria and procedures for the chartering authority to review the provider's contract and the charter school's financial independence from the provider;

(15) all requests for release of the charter school from department rules or the Public School Code. Within ten days after the contract is approved by the local school board, any request for release from department rules or the Public School Code shall be delivered by the local school board to the department. If the department grants the request, it shall notify the local school board and the charter school of its decision. If the department denies the request, it shall notify the local school board and the charter school that the request is denied and specify the reasons for denial;

(16) an agreement that the charter school will participate in the public school insurance authority;

(17) if the charter school is a state-chartered charter school, a process for qualification of and review of the school as a qualified board of finance and provisions for assurance that the school has satisfied any conditions imposed by the commission; and

(18) a listing of the charter school's nondiscretionary waivers [and

(19) any other information reasonably required by either party to the contract].

C. The process for revision or amendment to the terms of the charter contract shall be made only with the approval of the chartering authority and the governing body of the charter school. If they cannot agree, either party may appeal to the secretary as provided in Subsection A of this section."

SECTION 11. Section 22-8B-12 NMSA 1978 (being Laws 1999, Chapter 281, Section 12, as amended) is amended to read:

"22-8B-12. CHARTER SCHOOLS--TERM--RENEWAL OF CHARTER--OVERSIGHT AND CORRECTIVE ACTIONS--SITE VISITS--[RENEWAL OF CHARTER] GROUNDS FOR NONRENEWAL OR REVOCATION.--

A. A charter school may be approved for an initial term of six years, [provided that] the first year of which shall be used exclusively for planning and not for completing the application. [A charter may be renewed for successive periods of five years each. Approvals of less than five years may be agreed to between the charter school and the chartering authority.]

B. A chartering authority may renew a charter school's charter for successive periods, each of which spans:

(1) five years; or

(2) less than five years, if the period is agreed to by the authority and the school.

C. For the final three years of a charter school's charter term, the department shall establish a streamlined renewal application process for a charter school earning a letter grade of A or B for the previous three school years under the provisions of the A-B-C-D-F Schools Rating Act.

[B.] D. During the planning year, the charter school shall file a minimum of three status reports with the chartering authority and the department for the purpose of demonstrating that the charter school's implementation progress is consistent with the conditions, standards and procedures of its approved charter. The report content, format and schedule for submission shall be agreed to by the chartering authority and the charter school and become part of the charter contract.

[C.] E. Prior to the end of the planning year, the charter school shall demonstrate that its facilities meet the requirements of Section 22-8B-4.2 NMSA 1978.

[D.] F. A chartering authority shall monitor the fiscal, overall governance and student performance and legal compliance of the charter schools that it oversees, including reviewing the data provided by the charter school to support ongoing evaluation according to the charter contract. [Every] A chartering authority may conduct or require oversight activities that allow the chartering authority to fulfill its responsibilities under the Charter Schools Act, including conducting appropriate inquiries and investigations, [provided that] if, in so doing, the chartering authority complies with [the provisions of] the Charter Schools Act and the terms of the charter contract and does not unduly inhibit the autonomy granted to the charter schools that it governs.

[E.] G. As part of its performance review of a charter school, a chartering authority shall visit [a] each charter school under its authority at least once annually to provide technical assistance to the charter school and to determine the status of the charter school and the progress of the charter school toward the performance framework goals in its charter contract.

[F.] H. If, based on the performance review conducted by the chartering authority, [pursuant to Subsection D of this section] a charter school's fiscal, overall governance or student performance or legal compliance appears unsatisfactory, the chartering authority shall promptly notify the governing body of the charter school of the unsatisfactory review and provide reasonable opportunity for the governing body to remedy the problem [provided that]. If the unsatisfactory review warrants revocation of the school's charter, the revocation procedures set forth in this section [shall] apply. A chartering authority may take appropriate corrective actions or exercise sanctions, as long as such sanctions do not constitute immediate revocation, in response to the unsatisfactory review. Such actions or sanctions by the chartering authority may include requiring a governing body to develop and execute a corrective action plan with the chartering authority that sets forth time frames for compliance.

[G.] I. Every chartering authority shall submit an annual report to the division, including a performance report for each charter school that it oversees, in accordance with the performance framework set forth in the charter contract.

[H.] J. The department shall review the annual report received from the chartering authority to determine [if] whether the department or local school board rules and policies from which the charter school was released, [pursuant to the provisions of] as authorized by Section 22-8B-5 NMSA 1978, assisted or impeded the charter school in meeting its stated goals and objectives. The department shall use the annual reports received from the chartering authorities as part of its report to the governor, the legislative finance committee and the legislative education study committee as required by the Charter Schools Act.

[I. No later than] K. At least two hundred seventy days [prior to the date in which the] before its charter expires, [the] a governing body may submit a renewal application to the chartering authority. A [charter school] governing body may apply to a different chartering authority for renewal. The chartering authority shall rule in a public hearing on the renewal application [no later than] at least one hundred eighty days [prior to the expiration of] before the charter expires.

[J.] L. A charter school renewal application submitted to the chartering authority shall contain:

(1) a report on the progress of meeting the academic performance, financial compliance and governance responsibilities of the charter school, including achieving the goals, objectives, student performance outcomes, state standards of excellence and other terms of the charter contract, including the accountability requirements set forth in the Assessment and Accountability Act;

(2) a financial statement that discloses the costs of administration, instruction and other spending categories for the charter school that is understandable to the general public, that allows comparison of costs to other schools or comparable organizations and that is in a format required by the department;

(3) a copy of the charter contract executed in compliance with [the provisions of] Section 22-8B-9 NMSA 1978;

(4) a petition in support of the charter school renewing its charter status signed by [not less than] at least sixty-five percent of the employees [in] of the charter school;

(5) a petition in support of the charter school renewing its charter status signed by at least seventy-five percent of the households whose children are enrolled in the charter school; and

(6) a description of the charter school facilities and assurances that the facilities are in compliance with [the requirements of] Section 22-8B-4.2 NMSA 1978.

[K.] M. A charter may be suspended, revoked or not renewed by the chartering authority if the chartering authority determines that the charter school [did any of the following]:

(1) committed a material violation of any of the conditions, standards or procedures set forth in the charter contract;

(2) failed to meet or make substantial progress toward achievement of the department's standards of excellence or student performance standards identified in the charter contract;

(3) failed to meet generally accepted standards of fiscal management; or

(4) violated any provision of law from which the charter school was not specifically exempted.

[L.] N. The chartering authority shall develop processes for suspension, revocation or nonrenewal of a charter that:

(1) provide the charter school with timely notification of the prospect of suspension, revocation or nonrenewal of the charter and the reasons for such action;

(2) allow the charter school a reasonable amount of time to prepare and submit a response to the chartering authority's action; and

(3) require the final determination made by the chartering authority to be submitted to the department.

[M.] O. If a chartering authority suspends, revokes or does not renew a charter, the chartering authority shall state in writing its reasons for the suspension, revocation or nonrenewal.

[N.] P. A decision to suspend, revoke or not [to] renew a charter may be appealed by the governing body [pursuant to] in accordance with Section 22-8B-7 NMSA 1978."

SECTION 12. Section 22-8B-12.1 NMSA 1978 (being Laws 2011, Chapter 14, Section 6) is amended to read:

"22-8B-12.1. CHARTER SCHOOL CLOSURE--AUTOMATIC FOR POOR PERFORMANCE--CHARTERING AUTHORITY PROTOCOLS--CHARTERING AUTHORITY DUTIES--DISTRIBUTION OF ASSETS.--

A. A chartering authority shall order the closure of any charter school under its authority, except for a supplemental accountability models school, to which the department assigned a letter grade of D or F under the A-B-C-D-F Schools Rating Act for each of the three prior years. The authority shall make the closure effective one year after the most recent D or F rating. As used in this subsection, a "supplemental accountability models school" means a school:

(1) whose primary mission is to address the needs of students at risk of educational failure, as indicated by poor grades, truancy, disruptive behavior, eligibility for special education services or other factors associated with temporary or permanent withdrawal from school; and

(2) that serves a student population in which:

(a) ten percent or more of the students are nineteen years of age or older; or

(b) twenty percent or more of the non-gifted students qualify for special educational services.

[A.] B. Prior to any charter school closure decision, the chartering authority shall develop a charter school closure protocol to ensure timely notification to parents, orderly transition of students and student records to new schools and proper disposition of school funds, property and assets in accordance with [the provisions of] Subsection [C] D of this section. The protocol shall specify tasks, time lines and responsible parties, including by delineating the respective duties of the charter school, the governing body and the chartering authority.

[B.] C. If a charter school is ordered closed for any reason, prior to closure, the chartering authority shall oversee and work with the closing school to ensure a smooth and orderly closure and transition for students and parents according to the closure protocol.

[C.] D. When a charter school is closed, the assets of the school shall be distributed first to satisfy outstanding payroll obligations for employees of the school, then to creditors of the school and then to the state treasury to the credit of the current school fund. If the assets of the school are insufficient to pay all parties to whom the schools owes compensation, the prioritization of the distribution of assets may be determined by decree of a court of law."

SECTION 13. Section 22-24-5 NMSA 1978 (being Laws 1975, Chapter 235, Section 5, as amended) is amended to read:

"22-24-5. PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS--APPLICATION--GRANT ASSISTANCE.--

A. Applications for grant assistance, approval of applications, prioritization of projects and grant awards shall be conducted pursuant to the provisions of this section.

B. Except as provided in Sections 22-24-4.3, 22-24-5.4 and 22-24-5.6 NMSA 1978, the following provisions govern grant assistance from the fund for a public school capital outlay project not wholly funded pursuant to Section 22-24-4.1 NMSA 1978:

(1) all school districts are eligible to apply for funding from the fund, regardless of percentage of indebtedness;

(2) priorities for funding shall be determined by using the statewide adequacy standards developed pursuant to Subsection C of this section; provided that:

(a) the council shall apply the standards to charter schools to the same extent that they are applied to other public schools;

(b) the council may award grants annually to school districts for the purpose of repairing, renovating or replacing public school building systems in existing buildings as identified in Section [3 of this 2015 act] 22-24-4.6 NMSA 1978;

(c) the council shall adopt and apply adequacy standards appropriate to the unique needs of the constitutional special schools; and

(d) in an emergency in which the health or safety of students or school personnel is at immediate risk or in which there is a threat of significant property damage, the council may award grant assistance for a project using criteria other than the statewide adequacy standards;

(3) the council shall establish criteria to be used in public school capital outlay projects that receive grant assistance pursuant to the Public School Capital Outlay Act. In establishing the criteria, the council shall consider:

(a) the feasibility of using design, build and finance arrangements for public school capital outlay projects;

(b) the potential use of more durable construction materials that may reduce long-term operating costs;

(d) any other financing or construction concept that may maximize the dollar effect of the state grant assistance;

(4) no more than ten percent of the combined total of grants in a funding cycle shall be used for retrofitting existing facilities for technology infrastructure;

(5) except as provided in Paragraph (6), (8), (9) or (10) of this subsection, the state share of a project approved and ranked by the council shall be funded within available resources pursuant to the provisions of this paragraph. No later than May 1 of each calendar year, a value shall be calculated for each school district in accordance with the following procedure:

(a) the final prior year net taxable value for a school district divided by the MEM for that school district is calculated for each school district;

(b) the final prior year net taxable value for the whole state divided by the MEM for the state is calculated;

(c) excluding any school district for which the result calculated pursuant to Subparagraph (a) of this paragraph is more than twice the result calculated pursuant to Subparagraph (b) of this paragraph, the results calculated pursuant to Subparagraph (a) of this paragraph are listed from highest to lowest;

(d) the lowest value listed pursuant to Subparagraph (c) of this paragraph is subtracted from the highest value listed pursuant to that subparagraph;

(e) the value calculated pursuant to Subparagraph (a) of this paragraph for the subject school district is subtracted from the highest value listed in Subparagraph (c) of this paragraph;

(f) the result calculated pursuant to Subparagraph (e) of this paragraph is divided by the result calculated pursuant to Subparagraph (d) of this paragraph;

(g) the sum of the property tax mill levies for the prior tax year imposed by each school district on residential property pursuant to Chapter 22, Article 18 NMSA 1978, the Public School Capital Improvements Act, the Public School Buildings Act, the Education Technology Equipment Act and Paragraph (2) of Subsection B of Section 7-37-7 NMSA 1978 is calculated for each school district;

(h) the lowest value calculated pursuant to Subparagraph (g) of this paragraph is subtracted from the highest value calculated pursuant to that subparagraph;

(i) the lowest value calculated pursuant to Subparagraph (g) of this paragraph is subtracted from the value calculated pursuant to that subparagraph for the subject school district;

(j) the value calculated pursuant to Subparagraph (i) of this paragraph is divided by the value calculated pursuant to Subparagraph (h) of this paragraph;

(k) if the value calculated for a subject school district pursuant to Subparagraph (j) of this paragraph is less than five-tenths, then, except as provided in Subparagraph (n) or (o) of this paragraph, the value for that school district equals the value calculated pursuant to Subparagraph (f) of this paragraph;

(l) if the value calculated for a subject school district pursuant to Subparagraph (j) of this paragraph is five-tenths or greater, then that value is multiplied by five-hundredths;

(m) if the value calculated for a subject school district pursuant to Subparagraph (j) of this paragraph is five-tenths or greater, then the value calculated pursuant to Subparagraph (l) of this paragraph is added to the value calculated pursuant to Subparagraph (f) of this paragraph. Except as provided in Subparagraph (n) or (o) of this paragraph, the sum equals the value for that school district;

(n) in those instances in which the calculation pursuant to Subparagraph (k) or (m) of this paragraph yields a value less than one-tenth, one-tenth shall be used as the value for the subject school district;

(o) in those instances in which the calculation pursuant to Subparagraph (k) or (m) of this paragraph yields a value greater than one, one shall be used as the value for the subject school district;

(p) except as provided in Section 22-24-5.7 NMSA 1978 and except as adjusted pursuant to Paragraph (6), (8), (9) or (10) of this subsection, the amount to be distributed from the fund for an approved project shall equal the total project cost multiplied by: 1) for a charter school, one; and 2) for a school district that is not a charter school, a fraction the numerator of which is the value calculated for the subject school district in the current year plus the value calculated for that school district in each of the two preceding years and the denominator of which is three; and

(q) as used in this paragraph: 1) "MEM" means the average full-time-equivalent enrollment of students attending public school in a school district on the eightieth and one hundred twentieth days of the prior school year; and 2) "total project cost" means the total amount necessary to complete the public school capital outlay project less any insurance reimbursement received by the school district for the project; [and 3) in the case of a state-chartered charter school that has submitted an application for grant assistance pursuant to this section, the "value calculated for the subject school district" means the value calculated for the school district in which the state-chartered charter school is physically located]

(6) the amount calculated pursuant to Subparagraph (p) of Paragraph (5) of this subsection shall be reduced by the following procedure:

(a) the total of all legislative appropriations made after January 1, 2003 for nonoperating purposes either directly to the subject school district or to another governmental entity for the purpose of passing the money through directly to the subject school district, and not rejected by the subject school district, is calculated; provided that: 1) an appropriation made in a fiscal year shall be deemed to be accepted by a school district unless, prior to June 1 of that fiscal year, the school district notifies the department of finance and administration and the public education department that the school district is rejecting the appropriation; 2) the total shall exclude any education technology appropriation made prior to January 1, 2005 unless the appropriation was on or after January 1, 2003 and not previously used to offset distributions pursuant to the Technology for Education Act; 3) the total shall exclude any appropriation previously made to the subject school district that is reauthorized for expenditure by another recipient; 4) the total shall exclude one-half of the amount of any appropriation made or reauthorized after January 1, 2007 if the purpose of the appropriation or reauthorization is to fund, in whole or in part, a capital outlay project that, when prioritized by the council pursuant to this section either in the immediately preceding funding cycle or in the current funding cycle, ranked in the top one hundred fifty projects statewide; 5) the total shall exclude the proportionate share of any appropriation made or reauthorized after January 1, 2008 for a capital project that will be jointly used by a governmental entity other than the subject school district. Pursuant to criteria adopted by rule of the council and based upon the proposed use of the capital project, the council shall determine the proportionate share to be used by the governmental entity and excluded from the total; and 6) unless the grant award is made to the state-chartered charter school or unless the appropriation was previously used to calculate a reduction pursuant to this paragraph, the total shall exclude appropriations made after January 1, 2007 for nonoperating purposes of a specific state-chartered charter school, regardless of whether the charter school is a state-chartered charter school at the time of the appropriation or later opts to become a state-chartered charter school;

(b) the applicable fraction used for the subject school district and the current calendar year for the calculation in Subparagraph (p) of Paragraph (5) of this subsection is subtracted from one;

(c) the value calculated pursuant to Subparagraph (a) of this paragraph for the subject school district is multiplied by the amount calculated pursuant to Subparagraph (b) of this paragraph for that school district;

(d) the total amount of reductions for the subject school district previously made pursuant to Subparagraph (e) of this paragraph for other approved public school capital outlay projects is subtracted from the amount calculated pursuant to Subparagraph (c) of this paragraph; and

(e) the amount calculated pursuant to Subparagraph (p) of Paragraph (5) of this subsection shall be reduced by the amount calculated pursuant to Subparagraph (d) of this paragraph;

(7) as used in this subsection:

(a) "governmental entity" includes an Indian nation, tribe or pueblo; and

(b) "subject school district" means the school district that has submitted the application for funding and in which the approved public school capital outlay project will be located;

(8) for a school district that is not a charter school, the amount calculated pursuant to Subparagraph (p) of Paragraph (5) of this subsection, after any reduction pursuant to Paragraph (6) of this subsection, may be increased by an additional five percent if the council finds that the subject school district has been exemplary in implementing and maintaining a preventive maintenance program. The council shall adopt such rules as are necessary to implement the provisions of this paragraph;

(9) the council may [adjust] reduce the amount of local share otherwise required if it determines that a school district has made a good-faith effort to use all of its local resources. Before making any [adjustment] reduction to the local share, the council shall consider whether:

(a) the school district has insufficient bonding capacity over the next four years to provide the local match necessary to complete the project and, for all educational purposes, has a residential property tax rate of at least ten dollars ($10.00) on each one thousand dollars ($1,000) of taxable value, as measured by the sum of all rates imposed by resolution of the local school board plus rates set to pay interest and principal on outstanding school district general obligation bonds;

(b) the school district: 1) has fewer than an average of eight hundred full-time-equivalent students on the eightieth and one hundred twentieth days of the prior school year; 2) has at least seventy percent of its students eligible for free or reduced-fee lunch; 3) has a share of the total project cost, as calculated pursuant to provisions of this section, that would be greater than fifty percent; and 4) for all educational purposes, has a residential property tax rate of at least seven dollars ($7.00) on each one thousand dollars ($1,000) of taxable value, as measured by the sum of all rates imposed by resolution of the local school board plus rates set to pay interest and principal on outstanding school district general obligation bonds; or

(c) the school district: 1) has an enrollment growth rate over the previous school year of at least two and one-half percent; 2) pursuant to its five-year facilities plan, will be building a new school within the next two years; and 3) for all educational purposes, has a residential property tax rate of at least ten dollars ($10.00) on each one thousand dollars ($1,000) of taxable value, as measured by the sum of all rates imposed by resolution of the local school board plus rates set to pay interest and principal on outstanding school district general obligation bonds;

(10) the local match for the constitutional special schools shall be set at fifty percent for projects that qualify under the educational adequacy category and one hundred percent for projects that qualify in the support spaces category; provided that the council may adjust or waive the amount of any direct appropriation offset to or local share required for the constitutional special schools if an applicant constitutional special school has insufficient or no local resources available; and

(11) no application for grant assistance from the fund shall be approved unless the council determines that:

(a) the public school capital outlay project is needed and included in the school district's five- year facilities plan among its top priorities;

(b) the school district has used its capital resources in a prudent manner;

(c) the school district has provided insurance for buildings of the school district in accordance with the provisions of Section 13-5-3 NMSA 1978;

(d) the school district has submitted a five-year facilities plan that includes: 1) enrollment projections; 2) a current preventive maintenance plan that has been approved by the council pursuant to Section 22-24-5.3 NMSA 1978 and that is followed by each public school in the district; 3) the capital needs of charter schools located in the school district; and 4) projections for the facilities needed in order to maintain a full-day kindergarten program;

(e) the school district is willing and able to pay any portion of the total cost of the public school capital outlay project that, according to Paragraph (5), (6), (8) or (9) of this subsection, is not funded with grant assistance from the fund; provided that school district funds used for a project that was initiated after September 1, 2002 when the statewide adequacy standards were adopted, but before September 1, 2004 when the standards were first used as the basis for determining the state and school district share of a project, may be applied to the school district portion required for that project;

(f) the application includes the capital needs of any charter school located in the school district or the school district has shown that the facilities of the charter school have a smaller deviation from the statewide adequacy standards than other district facilities included in the application; and

(g) the school district has agreed, in writing, to comply with any reporting requirements or conditions imposed by the council pursuant to Section 22-24-5.1 NMSA 1978.

C. After consulting with the public school capital outlay oversight task force and other experts, the council shall regularly review and update statewide adequacy standards applicable to all school districts. The standards shall establish the acceptable level for the physical condition and capacity of buildings, the educational suitability of facilities and the need for education technology infrastructure. Except as otherwise provided in the Public School Capital Outlay Act, the amount of outstanding deviation from the standards shall be used by the council in evaluating and prioritizing public school capital outlay projects.

D. The acquisition of a facility by a school district or charter school pursuant to a financing agreement that provides for lease payments with an option to purchase for a price that is reduced according to lease payments made may be considered a public school capital outlay project and eligible for grant assistance under this section pursuant to the following criteria:

(1) no grant shall be awarded unless the council determines that, at the time of exercising the option to purchase the facility by the school district or charter school, the facility will equal or exceed the statewide adequacy standards and the building standards for public school facilities;

(2) no grant shall be awarded unless the school district and the need for the facility meet all of the requirements for grant assistance pursuant to the Public School Capital Outlay Act;

(3) the total project cost shall equal the total payments that would be due under the agreement if the school district or charter school would eventually acquire title to the facility;

(4) the portion of the total project cost to be paid from the fund may be awarded as one grant, but disbursements from the fund shall be made from time to time as lease payments become due;

(5) the portion of the total project cost to be paid by the school district [or charter school] may be paid from time to time as lease payments become due; and

(6) neither a grant award nor any provision of the Public School Capital Outlay Act creates a legal obligation for the school district or charter school to continue the lease from year to year or to purchase the facility.

E. In order to encourage private capital investment in the construction of public school facilities, the purchase of a privately owned school facility that is, at the time of application, in use by a school district may be considered a public school capital outlay project and eligible for grant assistance pursuant to this section if the council finds that:

(1) at the time of the initial use by the school district, the facility to be purchased equaled or exceeded the statewide adequacy standards and the building standards for public school facilities;

(2) at the time of application, attendance at the facility to be purchased is at seventy-five percent or greater of design capacity and the attendance at other schools in the school district that the students at the facility would otherwise attend is at eighty-five percent or greater of design capacity; and

(3) the school district and the capital outlay project meet all of the requirements for grant assistance pursuant to the Public School Capital Outlay Act; provided that, when determining the deviation from the statewide adequacy standards for the purposes of evaluating and prioritizing the project, the students using the facility shall be deemed to be attending other schools in the school district.

F. It is the intent of the legislature that grant assistance made pursuant to this section allows every school district to meet the standards developed pursuant to Subsection C of this section; provided, however, that nothing in the Public School Capital Outlay Act or the development of standards pursuant to that act prohibits a school district from using other funds available to the district to exceed the statewide adequacy standards.

G. Upon request, the council shall work with, and provide assistance and information to, the public school capital outlay oversight task force.

H. The council may establish committees or task forces, not necessarily consisting of council members, and may use the committees or task forces, as well as existing agencies or organizations, to conduct studies, conduct surveys, submit recommendations or otherwise contribute expertise from the public schools, programs, interest groups and segments of society most concerned with a particular aspect of the council's work.

I. Upon the recommendation of the public school facilities authority, the council shall develop building standards for public school facilities and shall promulgate other such rules as are necessary to carry out the provisions of the Public School Capital Outlay Act.

J. No later than December 15 of each year, the council shall prepare a report summarizing its activities during the previous fiscal year. The report shall describe in detail all projects funded, the progress of projects previously funded but not completed, the criteria used to prioritize and fund projects and all other council actions. The report shall be submitted to the public education commission, the governor, the legislative finance committee, the legislative education study committee and the legislature."

SECTION 14. Section 22-24-6.1 NMSA 1978 (being Laws 2007, Chapter 214, Section 1, as amended) is amended to read:

"22-24-6.1. PROCEDURES FOR A STATE-CHARTERED CHARTER SCHOOL.--All of the provisions of the Public School Capital Outlay Act apply to an application by a state-chartered charter school for grant assistance for a capital project except:

A. the portion of the cost of the project to be paid from the fund shall be calculated pursuant to Paragraph (5) of Subsection B of Section 22-24-5 NMSA 1978 using data from the school district in which the state-chartered charter school is located; and

B. in calculating a reduction pursuant to Paragraph (6) of Subsection B of Section 22-24-5 NMSA 1978:

(1) the amount to be used in Subparagraph (a) of that paragraph shall equal the total of all legislative appropriations made after January 1, 2007 for nonoperating expenses either directly to the charter school or to another governmental entity for the purpose of passing the money through directly to the charter school, regardless of whether the charter school was a state-chartered charter school at the time of the appropriation or later opted to become a state-chartered charter school, except that the total shall not include any such appropriation if, before the charter school became a state-chartered charter school, the appropriation was previously used to calculate a reduction pursuant to Paragraph (6) of Subsection B of Section 22-24-5 NMSA 1978; and

(2) the amount to be used in Subparagraph (b) of that paragraph shall equal the total of all federal money received by the charter school for nonoperating purposes pursuant to Title XIV of the American Recovery and Reinvestment Act of 2009, regardless of whether the charter school was a state-chartered charter school at the time of receiving the federal money or later opted to become a state-chartered charter school, except that the total shall not include any such federal money if, before the charter school became a state-chartered charter school, the money was previously used to calculate a reduction pursuant to Paragraph (6) of Subsection B of Section 22-24-5 NMSA 1978 [and

C. if the council determines that the state-chartered charter school does not have the resources to pay all or a portion of the total cost of the capital outlay project that is not funded with grant assistance from the fund, to the extent that money is available in the charter school capital outlay fund, the council shall make an award from that fund for the remaining amount necessary to pay for the project. The council may establish, by rule, a procedure for determining the amount of resources available to the charter school and the amount needed from the charter school capital outlay fund]."

SECTION 15. Section 22-25-3 NMSA 1978 (being Laws 1975 (S.S.), Chapter 5, Section 3, as amended) is amended to read:

"22-25-3. AUTHORIZATION FOR LOCAL SCHOOL BOARD TO SUBMIT QUESTION OF CAPITAL IMPROVEMENTS TAX IMPOSITION.--

A. A local school board may adopt a resolution to submit to the qualified electors of the school district the question of whether a property tax should be imposed upon the net taxable value of property allocated to the school district under the Property Tax Code at a rate not to exceed that specified in the resolution for the purpose of capital improvements in the school district. The resolution shall:

(1) identify the capital improvements for which the revenue proposed to be produced will be used;

(2) specify the rate of the proposed tax, which shall not exceed two dollars ($2.00) on each one thousand dollars ($1,000) of net taxable value of property allocated to the school district under the Property Tax Code;

(3) specify the date an election will be held to submit the question of imposition of the tax to the qualified electors of the district; and

(4) limit the imposition of the proposed tax to no more than six property tax years.

B. [On or after July 1, 2009] A resolution submitted to the qualified electors [pursuant to] in accordance with Subsection A of this section shall include capital improvements funding for a locally chartered or state-chartered charter school located within the school district if the charter school [timely], within at least ninety days before the resolution, provides the necessary information to the school district for inclusion in the resolution that identifies the capital improvements of the charter school for which the revenue proposed to be produced will be used."

SECTION 16. REPEAL.--Section 22-8B-11 NMSA 1978 (being Laws 1999, Chapter 281, Section 11, as amended) is repealed.

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