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AN ACT

RELATING TO PUBLIC SCHOOLS; ALLOWING CHARTER SCHOOLS TO

DECIDE THEIR CHARTERING AUTHORITY; ALLOWING CHARTER SCHOOLS

TO CHANGE THEIR CHARTERING AUTHORITY WHEN RENEWING THEIR

CHARTERS; CREATING A CHARTER SCHOOLS DIVISION IN THE PUBLIC

EDUCATION DEPARTMENT; PROVIDING POWERS AND DUTIES; PROVIDING

FOR APPROVAL, DENIAL, RENEWAL, SUSPENSION OR REVOCATION OF

STATE-CHARTERED CHARTER SCHOOLS BY THE PUBLIC EDUCATION

COMMISSION; MAKING STATE-CHARTERED CHARTER SCHOOLS

INDEPENDENT OF SCHOOL DISTRICTS; REQUIRING STATE-CHARTERED

CHARTER SCHOOLS TO BE BOARDS OF FINANCE; CLARIFYING

RESPONSIBILITIES OF CHARTER SCHOOLS AND GOVERNING BODIES;

CHANGING FUNDING PROVISIONS; RECONCILING MULTIPLE AMENDMENTS

TO THE SAME SECTION OF LAW IN LAWS 2005 BY REPEALING LAWS

2005, CHAPTER 176, SECTION 12; AMENDING, REPEALING AND

ENACTING SECTIONS OF THE NMSA 1978.

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

Section 1. Section 9-24-4 NMSA 1978 (being Laws 2004,

Chapter 27, Section 4, as amended) is amended to read:

"9-24-4. DEPARTMENT CREATED.--

A. The "public education department" is created in

the executive branch. The department is a cabinet department

and includes the following divisions:

(1) the administrative services division;

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(2) the assessment and accountability

division;

(3) the charter schools division;

(4) the educator quality division;

(5) the Indian education division;

(6) the information technology division;

(7) the instructional support and vocational

education division;

(8) the program support and student

transportation division;

(9) the quality assurance and systems

integration division;

(10) the rural education division; and

(11) the vocational rehabilitation division.

B. The secretary may organize the department and

divisions of the department and may transfer or merge

functions between divisions and bureaus in the interest of

efficiency and economy."

Section 2. Section 22-8-2 NMSA 1978 (being Laws 1978,

Chapter 128, Section 3, as amended) is amended to read:

"22-8-2. DEFINITIONS.--As used in the Public School

Finance Act:

A. "ADM" or "MEM" means membership;

B. "membership" means the total enrollment of

qualified students on the current roll of a class or school

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on a specified day. The current roll is established by the

addition of original entries and reentries minus withdrawals.

Withdrawals of students, in addition to students formally

withdrawn from the public school, include students absent

from the public school for as many as ten consecutive school

days; provided that withdrawals do not include truants and

habitual truants the school district is required to intervene

with and keep in an educational setting as provided in

Section 22-12-9 NMSA 1978;

C. "basic program ADM" or "basic program MEM"

means the MEM of qualified students but excludes the

full-time-equivalent MEM in early childhood education and

three- and four-year-old students receiving special education

services;

D. "cost differential factor" is the numerical

expression of the ratio of the cost of a particular segment

of the school program to the cost of the basic program in

grades four through six;

E. "department" or "division" means the public

education department;

F. "early childhood education ADM" or "early

childhood education MEM" means the full-time-equivalent MEM

of students attending approved early childhood education

programs;

G. "full-time-equivalent ADM" or

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"full-time-equivalent MEM" is that membership calculated by

applying to the MEM in an approved public school program the

ratio of the number of hours per school day devoted to the

program to six hours or the number of hours per school week

devoted to the program to thirty hours;

H. "operating budget" means the annual financial

plan required to be submitted by a local school board or

governing body of a state-chartered charter school;

I. "program cost" is the product of the total

number of program units to which a school district is

entitled multiplied by the dollar value per program unit

established by the legislature;

J. "program element" is that component of a public

school system to which a cost differential factor is applied

to determine the number of program units to which a school

district is entitled, including but not limited to MEM,

full-time-equivalent MEM, teacher, classroom or public

school;

K. "program unit" is the product of the program

element multiplied by the applicable cost differential

factor;

L. "public money" or "public funds" means all

money from public or private sources received by a school

district or state-chartered charter school or officer or

employee of a school district or state-chartered charter

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school for public use;

M. "qualified student" means a public school

student who:

(1) has not graduated from high school;

(2) is regularly enrolled in one-half or

more of the minimum course requirements approved by the

department for public school students; and

(3) is at least five years of age prior to

12:01 a.m. on September 1 of the school year; or

(4) is at least three years of age at any

time during the school year and is receiving special

education services pursuant to rules of the department; or

(5) has not reached the student's

twenty-second birthday on the first day of the school year

and is receiving special education services pursuant to rules

of the department; and

N. "state superintendent" means the secretary of

public education or the secretary's designee."

Section 3. Section 22-8-6.1 NMSA 1978 (being Laws 1993,

Chapter 227, Section 8, as amended) is amended to read:

"22-8-6.1. CHARTER SCHOOL BUDGETS.--

A. Each state-chartered charter school shall

submit to the charter schools division of the department a

school-based budget. For fiscal year 2008, and for the first

year of operation in any fiscal year thereafter, the budget

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of every state-chartered 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 it is geographically located. For

second and subsequent fiscal years of operation, the budgets

of state-chartered charter schools shall be based on the

number of program units generated using the average of the

eightieth and one hundred twentieth day MEM of the prior year

and its instructional staff training and experience index and

the at-risk index of the school district in which the

state-chartered charter school is geographically located.

The budget shall be submitted to the division for approval or

amendment pursuant to the Public School Finance Act and the

Charter Schools Act.

B. Each locally chartered charter school shall

submit to the local school board a school-based budget. For

fiscal year 2008, and for the first year of operation in any

fiscal year thereafter, the budget of every locally chartered

charter school shall be based on the projected number of

program units generated using the average of the eightieth

and one hundred twentieth day MEM of the prior year, using

the at-risk index and the instructional staff training and

experience index of the school district in which it is

geographically located. For second and subsequent fiscal

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years of operation, the budgets of locally chartered charter

schools shall be based on the prior year program units

generated by that locally chartered charter school and its

students and its instructional staff training and experience

index and the at-risk index of the school district in which

the locally chartered charter school is geographically

located. The budget shall be submitted to the local school

board for approval or amendment. The approval or amendment

authority of the local school board relative to the charter

school budget is limited to ensuring that sound fiscal

practices are followed in the development of the budget and

that the charter school budget is within the allotted

resources. The local school board shall have no veto

authority over individual line items within the charter

school's proposed budget, but shall approve or disapprove the

budget in its entirety. Upon final approval of the local

budget by the local school board, the individual charter

school budget shall be included separately in the budget

submission to the department required pursuant to the Public

School Finance Act and the Charter Schools Act."

Section 4. Section 22-8-7 NMSA 1978 (being Laws 1967,

Chapter 16, Section 61, as amended) is amended to read:

"22-8-7. BUDGETS--FORM.--All budgets submitted to the

department by a school district or state-chartered charter

school shall be in a form specified by the department."

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Section 5. Section 22-8-11 NMSA 1978 (being Laws 1967,

Chapter 16, Section 66, as amended) is amended to read:

"22-8-11. BUDGETS--APPROVAL OF OPERATING BUDGET.--

A. The department shall:

(1) on or before July 1 of each year,

approve and certify to each local school board and governing

body of a state-chartered charter school an operating budget

for use by the school district or state-chartered charter

school; and

(2) make corrections, revisions and

amendments to the operating budgets fixed by the local school

boards or governing bodies of state-chartered charter schools

and the secretary to conform the budgets to the requirements

of law and to the department's rules and procedures.

B. No school district or state-chartered charter

school or officer or employee of a school district or state-

chartered charter school shall make any expenditure or incur

any obligation for the expenditure of public funds unless

that expenditure or obligation is made in accordance with an

operating budget approved by the department. This

prohibition does not prohibit the transfer of funds pursuant

to the department's rules and procedures.

C. The department shall not approve and certify an

operating budget of any school district or state-chartered

charter school that fails to demonstrate that parental

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involvement in the budget process was solicited."

Section 6. Section 22-8-12 NMSA 1978 (being Laws 1967,

Chapter 16, Section 67, as amended) is amended to read:

"22-8-12. OPERATING BUDGETS--AMENDMENTS.--Operating

budgets shall not be altered or amended after approval and

certification by the department, except for the following

purposes and according to the following procedure:

A. upon written request of a local school board or

governing body of a state-chartered charter school, the

secretary may authorize transfer within the budget, or

provide for items not included, when the total amount of the

budget will not be increased thereby;

B. upon written request of a local school board or

governing body of a state-chartered charter school, the

secretary, in conformance with the rules of the department,

may authorize an increase in any budget if the increase is

necessary because of the receipt of revenue that was not

anticipated at the time the budget was fixed and if the

increase is directly related to a special project or program

for which the additional revenue was received. The secretary

shall make a written report to the legislative finance

committee of any such budget increase;

C. upon written request of a local school board or

governing body of a state-chartered charter school, the

secretary may authorize an increase in a budget of not more

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than one thousand dollars ($1,000); or

D. upon written request of a local school board or

governing body of a state-chartered charter school, the

secretary, after notice and a public hearing, may authorize

an increase in a school budget in an amount exceeding one

thousand dollars ($1,000). The notice of the hearing shall

designate the school district that proposes to alter or amend

its budget, together with the time, place and date of the

hearing. The notice of the hearing shall be published at

least once a week for two consecutive weeks in a newspaper of

general circulation in the county in which the school

district is situated. The last publication of the notice

shall be at least three days prior to the date set for the

hearing. The charter schools division shall establish how a

state-chartered charter school notifies the parents of its

students of proposed increases in a charter school budget."

Section 7. Section 22-8-12.1 NMSA 1978 (being Laws

1978, Chapter 128, Section 5, as amended) is amended to read:

"22-8-12.1. MEMBERSHIP PROJECTIONS AND BUDGET

REQUESTS.--

A. Each local school board or governing body of a

state-chartered charter school shall submit annually, on or

before October 15, to the department:

(1) an estimate for the succeeding fiscal

year of:

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(a) the membership of qualified

students to be enrolled in the basic program;

(b) the full-time-equivalent membership

of students to be enrolled in approved early childhood

education programs; and

enrolled in approved special education programs;

(2) all other information necessary to

calculate program costs; and

(3) any other information related to the

financial needs of the school district or state-chartered

charter school as may be requested by the department.

B. All information requested pursuant to

Subsection A of this section shall be submitted on forms

prescribed and furnished by the department and shall comply

with the department's rules and procedures.

C. The department shall:

(1) review the financial needs of each

school district or state-chartered charter school for the

succeeding fiscal year; and

(2) submit annually, on or before November

30, to the secretary of finance and administration the

recommendations of the department for:

(a) amendments to the public school

finance formula;

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(b) appropriations for the succeeding

fiscal year to the public school fund for inclusion in the

executive budget document; and

fiscal year for pupil transportation and instructional

materials."

Section 8. Section 22-8-13 NMSA 1978 (being Laws 1974,

Chapter 8, Section 3, as amended) is amended to read:

"22-8-13. REPORTS.--

A. Each public school in a school district and

each state-chartered charter school shall keep accurate

records concerning membership in the public school. The

superintendent of each school district or head administrator

of a state-chartered charter school shall maintain the

following reports for each twenty-day reporting period:

(1) the basic program MEM by grade in each

public school;

(2) the early childhood education MEM;

(3) the special education MEM in each public

school in class C and class D programs as defined in Section

22-8-21 NMSA 1978;

(4) the number of class A and class B

programs as defined in Section 22-8-21 NMSA 1978; and

(5) the full-time-equivalent MEM for

bilingual multicultural education programs.

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B. The superintendent of each school district and

the head administrator of each state-chartered charter school

shall furnish to the department reports of the information

required in Paragraphs (1) through (5) of Subsection A of

this section for the first forty days of the school year.

The forty-day report and all other reports required by law or

by the department shall be furnished within five days of the

close of the reporting period.

C. All information required pursuant to this

section shall be on forms prescribed and furnished by the

department. A copy of any report made pursuant to this

section shall be kept as a permanent record of the school

district or charter school and shall be subject to inspection

and audit at any reasonable time.

D. The department shall withhold allotments of

funds to any school district or state-chartered charter

school where the superintendent or head administrator has

failed to comply until the superintendent or head

administrator complies with and agrees to continue complying

with requirements of this section.

E. The provisions of this section may be modified

or suspended by the department for any school district or

school or state-chartered charter school operating under the

Variable School Calendar Act. The department shall require

MEM reports consistent with the calendar of operations of

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such school district or school or state-chartered charter

school and shall calculate an equivalent MEM for use in

projecting school district revenue."

Section 9. Section 22-8-14 NMSA 1978 (being Laws 1967,

Chapter 16, Section 69, as amended) is amended to read:

"22-8-14. PUBLIC SCHOOL FUND.--

A. The "public school fund" is created.

B. The public school fund shall be distributed to

school districts and state-chartered charter schools in the

following parts:

(1) state equalization guarantee

distribution;

(2) transportation distribution; and

(3) supplemental distributions:

(a) out-of-state tuition to school

districts;

(b) emergency; and

C. The distributions of the public school fund

shall be made by the department within limits established by

law. The balance remaining in the public school fund at the

end of each fiscal year shall revert to the general fund,

unless otherwise provided by law."

Section 10. Section 22-8-15 NMSA 1978 (being Laws 1967,

Chapter 16, Section 70, as amended) is amended to read:

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"22-8-15. ALLOCATION LIMITATION.--

A. The department shall determine the allocations

to each school district and charter school from each of the

distributions of the public school fund, subject to the

limits established by law.

B. The local school board in each school district

with locally chartered charter schools shall allocate the

appropriate distributions of the public school fund to

individual locally chartered charter schools pursuant to each

locally chartered charter school's school-based budget

approved by the local school board and the department. The

appropriate distribution of the public school fund shall flow

to the locally chartered charter school within five days

after the school district's receipt of the state equalization

guarantee for that month."

Section 11. Section 22-8-17 NMSA 1978 (being Laws 1974,

Chapter 8, Section 7, as amended) is amended to read:

"22-8-17. PROGRAM COST DETERMINATION--REQUIRED

INFORMATION.--

A. The program cost for each school district and

charter school shall be determined by the department in

accordance with the provisions of the Public School Finance

Act.

B. The department is authorized to require from

each school district and charter school the information

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necessary to make an accurate determination of the district's

or charter school's program cost."

Section 12. Section 22-8-18 NMSA 1978 (being Laws 1974,

Chapter 8, Section 8, as amended) is amended to read:

"22-8-18. PROGRAM COST CALCULATION--LOCAL

RESPONSIBILITY.--

A. The total program units for the purpose of

computing the program cost shall be calculated by multiplying

the sum of the program units itemized as Paragraphs (1)

through (5) in this subsection by the instructional staff

training and experience index and adding the program units

itemized as Paragraphs (6) through (10) in this subsection.

The itemized program units are as follows:

(1) early childhood education;

(2) basic education;

(3) special education, adjusted by

subtracting the units derived from membership in class D

special education programs in private, nonsectarian,

nonprofit training centers;

(4) bilingual multicultural education;

(5) fine arts education;

(6) size adjustment;

(7) at-risk program;

(8) enrollment growth or new district

adjustment;

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(9) special education units derived from

membership in class D special education programs in private,

nonsectarian, nonprofit training centers; and

(10) national board for professional

teaching standards certification.

B. The total program cost calculated as prescribed

in Subsection A of this section includes the cost of early

childhood, special, bilingual multicultural, fine arts and

vocational education and other remedial or enrichment

programs. It is the responsibility of the local school board

or governing body of a charter school to determine its

priorities in terms of the needs of the community served by

that board. Funds generated under the Public School Finance

Act are discretionary to local school boards and governing

bodies of charter schools, provided that the special program

needs as enumerated in this section are met."

Section 13. Section 22-8-23.1 NMSA 1978 (being Laws

1990 (1st S.S.), Chapter 3, Section 7, as amended by Laws

2003, Chapter 156, Section 1 and by Laws 2003, Chapter 386,

Section 1) is amended to read:

"22-8-23.1. ENROLLMENT GROWTH PROGRAM UNITS.--

A. A school district or charter school 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 increase in MEM shall be

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calculated as follows:

(Current Year MEM - Previous Year MEM)

Previous Year MEM

X 100 = Percent Increase.

The number of additional program units shall be calculated as

follows:

((Current Year MEM - Previous Year MEM) - (Current Year

MEM x .01)) X 1.5 = Units.

B. In addition to the units calculated in

Subsection A of this section, a school district or charter

school 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 increase in

MEM shall be calculated in the following manner:

(Current Year MEM - Previous Year MEM)

Previous Year MEM

X 100 = Percent Increase.

The number of additional program units to which an eligible

school district or charter school is entitled under this

subsection is the number of units computed in the following

manner:

(Current Year MEM - Previous Year MEM) X .50 = Units.

C. As used in this section:

(1) "current year MEM" means MEM on the

fortieth day of the current year;

(2) "MEM" means the total school district or

charter school membership, including early childhood

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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 pursuant to Subsection D of Section

22-13-3.2 NMSA 1978; and

(3) "previous year MEM" means MEM on the

fortieth day of the previous year."

Section 14. Section 22-8-23.4 NMSA 1978 (being Laws

2003, Chapter 144, Section 2 and Laws 2003, Chapter 152,

Section 9) is amended to read:

"22-8-23.4. NATIONAL BOARD FOR PROFESSIONAL TEACHING

STANDARDS--CERTIFIED TEACHERS PROGRAM UNITS.--The number of

program units for teachers certified by the national board

for professional teaching standards is determined by

multiplying by one and one-half the number of teachers

certified by the national board for professional teaching

standards employed by the school district or charter school

on or before the fortieth day of the school year and verified

by the department. Department approval of these units shall

be contingent on verification by the school district or

charter school that these teachers are receiving a one-time

salary differential equal to or greater than the amount

generated by the units multiplied by the program unit value

during the fiscal year in which the school district or

charter school will receive these units."

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Section 15. A new section of the Public School Finance

Act is enacted to read:

"CHARTER SCHOOL STUDENT ACTIVITIES PROGRAM UNIT.--The

charter school student activities program unit for a school

district is determined by multiplying the number of charter

school students who are participating in school district

activities governed by the New Mexico activities association

by the cost differential factor of 0.1. The student

activities program unit shall be paid to the school district

in which it is generated. A charter school student is

eligible to participate in school district activities at the

public school in the attendance zone in which the student

resides, according to the New Mexico activities association

guidelines. If the student chooses to participate at a

public school other than the one in the attendance zone in

which the student resides, the student shall be subject to

New Mexico activities association transfer guidelines."

Section 16. Section 22-8-25 NMSA 1978 (being Laws 1981,

Chapter 176, Section 5, as amended by Laws 2005, Chapter 176,

Section 12 and by Laws 2005, Chapter 291, Section 1) is

amended to read:

"22-8-25. STATE EQUALIZATION GUARANTEE DISTRIBUTION--

DEFINITIONS--DETERMINATION OF AMOUNT.--

A. The state equalization guarantee distribution

is that amount of money distributed to each school district

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to ensure that its operating revenue, including its local and

federal revenues as defined in this section, is at least

equal to the school district's program cost. For

state-chartered charter schools, the state equalization

guarantee distribution is the difference between the

state-chartered charter school's program cost and the two

percent withheld by the department for administrative

services.

B. "Local revenue", as used in this section, means

seventy-five percent of receipts to the school district

derived from that amount produced by a school district

property tax applied at the rate of fifty cents ($.50) to

each one thousand dollars ($1,000) of net taxable value of

property allocated to the school district and to the assessed

value of products severed and sold in the school district as

determined under the Oil and Gas Ad Valorem Production Tax

Act and upon the assessed value of equipment in the school

district as determined under the Oil and Gas Production

Equipment Ad Valorem Tax Act.

C. "Federal revenue", as used in this section,

means receipts to the school district, excluding amounts

that, if taken into account in the computation of the state

equalization guarantee distribution, result, under federal

law or regulations, in a reduction in or elimination of

federal school funding otherwise receivable by the school

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district, derived from the following:

(1) seventy-five percent of the school

district's share of forest reserve funds distributed in

accordance with Section 22-8-33 NMSA 1978; and

(2) seventy-five percent of grants from the

federal government as assistance to those areas affected by

federal activity authorized in accordance with Title 20 of

the United States Code, commonly known as "PL 874 funds" or

"impact aid".

D. To determine the amount of the state

equalization guarantee distribution, the department shall:

(1) calculate the number of program units to

which each school district or charter school is entitled

using an average of the MEM on the eightieth and one hundred

twentieth days of the prior year; or

(2) calculate the number of program units to

which a school district or charter school operating under an

approved year-round school calendar is entitled using an

average of the MEM on appropriate dates established by the

department; or

(3) calculate the number of program units to

which a school district or charter school with a MEM of two

hundred or less is entitled by using an average of the MEM on

the eightieth and one hundred twentieth days of the prior

year or the fortieth day of the current year, whichever is

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greater; and

(4) using the results of the calculations in

Paragraph (1), (2) or (3) of this subsection and the

instructional staff training and experience index from the

October report of the prior school year, establish a total

program cost of the school district or charter school;

(5) for school districts, calculate the

local and federal revenues as defined in this section;

(6) deduct the sum of the calculations made

in Paragraph (5) of this subsection from the program cost

established in Paragraph (4) of this subsection;

(7) deduct the total amount of guaranteed

energy savings contract payments that the department

determines will be made to the school district from the

public school utility conservation fund during the fiscal

year for which the state equalization guarantee distribution

is being computed; and

(8) deduct ninety percent of the amount

certified for the school district by the department pursuant

to the Energy Efficiency and Renewable Energy Bonding Act.

E. Reduction of a school district's state

equalization guarantee distribution shall cease when the

school district's cumulative reductions equal its

proportional share of the cumulative debt service payments

necessary to service the bonds issued pursuant to the Energy

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Efficiency and Renewable Energy Bonding Act.

F. The amount of the state equalization guarantee

distribution to which a school district is entitled is the

balance remaining after the deductions made in Paragraphs (6)

through (8) of Subsection D of this section.

G. The state equalization guarantee distribution

shall be distributed prior to June 30 of each fiscal year.

The calculation shall be based on the local and federal

revenues specified in this section received from June 1 of

the previous fiscal year through May 31 of the fiscal year

for which the state equalization guarantee distribution is

being computed. In the event that a school district or

charter school has received more state equalization guarantee

funds than its entitlement, a refund shall be made by the

school district or charter school to the state general fund."

Section 17. Section 22-8-26 NMSA 1978 (being Laws 1967,

Chapter 16, Section 76, as amended) is amended to read:

"22-8-26. TRANSPORTATION DISTRIBUTION.--

A. Money in the transportation distribution of the

public school fund shall be used only for the purpose of

making payments to each school district or state-chartered

charter school for the to-and-from school transportation

costs of students in grades kindergarten through twelve

attending public school within the school district or

state-chartered charter school and of three- and

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four-year-old children who meet the department approved

criteria and definition of developmentally disabled and for

transportation of students to and from their regular

attendance centers and the place where vocational education

programs are being offered.

B. In the event a school district's or state-

chartered charter school's transportation allocation exceeds

the amount required to meet obligations to provide

to-and-from transportation, three- and four-year-old

developmentally disabled transportation and vocational

education transportation, fifty percent of the remaining

balance shall be deposited in the transportation emergency

fund.

C. Of the excess amount retained by the school

district or state-chartered charter school, at least

twenty-five percent shall be used for to-and-from

transportation-related services, excluding salaries and

benefits, and up to twenty-five percent may be used for other

transportation-related services, excluding salaries and

benefits as defined by rule of the department.

D. In the event the sum of the proposed

transportation allocations to each school district or state-

chartered charter school exceeds the amounts in the

transportation distribution, the allocation to each school

district or state-chartered charter school shall be reduced

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in the proportion that the school district or state-chartered

charter school allocation bears to the total statewide

transportation distribution.

E. A local school board or governing body of a

state-chartered charter school, with the approval of the

state transportation director, may provide additional

transportation services pursuant to Section 22-16-4 NMSA 1978

to meet established program needs.

F. Nothing in this section prohibits the use of

school buses to transport the general public pursuant to the

Emergency Transportation Act."

Section 18. Section 22-8-27 NMSA 1978 (being Laws 1967,

Chapter 16, Section 77, as amended) is amended to read:

"22-8-27. TRANSPORTATION EQUIPMENT.--

A. The department shall establish a systematic

program for the purchase of necessary school bus

transportation equipment.

B. In establishing a system for the replacement of

school-district-owned buses, the department shall provide for

the replacement of school buses on a twelve-year cycle.

School districts requiring additional buses to accommodate

growth in the school district or to meet other special needs

may petition the department for additional buses. Under

exceptional circumstances, school districts may also petition

the department for permission to replace buses prior to the

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completion of a twelve-year cycle or to use buses in excess

of twelve years contingent upon satisfactory annual safety

inspections.

C. In establishing a system for the use of

contractor-owned buses by school districts or state-chartered

charter schools, the department shall establish a schedule

for the payment of rental fees for the use of

contractor-owned buses. The department shall establish

procedures to ensure the systematic replacement of buses on a

twelve-year replacement cycle. School districts requiring

additional buses to accommodate growth in the school district

or to meet other special needs may petition the department

for additional buses. Under exceptional circumstances,

school districts may also petition the department for

permission to replace buses prior to the completion of a

twelve-year cycle or to use buses in excess of twelve years

contingent upon satisfactory annual safety inspections. No

school district shall pay rental fees for any one bus for a

period in excess of five years. In the event a school bus

service contract is terminated, the department shall

calculate the remaining number of years that a bus could be

used based on a twelve-year replacement cycle and calculate a

value reflecting that use. The school district shall deduct

an amount equal to that value from any remaining amount due

on the contract or if no balance remains on the contract, the

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contractor shall reimburse the school district an amount

equal to the value calculated."

Section 19. Section 22-8-29 NMSA 1978 (being Laws 1967,

Chapter 16, Section 78, as amended) is amended to read:

"22-8-29. TRANSPORTATION DISTRIBUTIONS--REPORTS--

PAYMENTS.--

A. Prior to November 15 of each year, each local

school board of a school district and governing body of a

state-chartered charter school shall report to the state

transportation director, upon forms furnished by the state

transportation director, the following information concerning

the school district's or state-chartered charter school's

operation on the fortieth day of school:

(1) the number and designation of school bus

routes in operation in the school district;

(2) the number of miles traveled by each

school bus on each school bus route, showing the route

mileage in accordance with the type of road surface traveled;

(3) the number of students transported on

the fortieth day of school and adjusted for special education

students on December 1;

(4) the projected number of students to be

transported in the next school year;

(5) the seating capacity, age and mileage of

each bus used in the school district for student

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transportation; and

(6) the number of total miles traveled for

each school district's or state-chartered charter school's

per capita feeder routes.

B. Each local school board of a school district

and governing body of a state-chartered charter school

maintaining a school bus route shall make further reports to

the state transportation director at other times specified by

the state transportation director.

C. The state transportation director shall certify

to the secretary that the allocations from the transportation

distributions to each school district and state-chartered

charter school are based upon the transportation distribution

formula established in the Public School Code. The

allocations for the first six months of a school year shall

be based upon the tentative transportation budget of the

school district or state-chartered charter school for the

current fiscal year. Allocations to a school district or

state-chartered charter school for the remainder of the

school year shall adjust the amount received by the school

district or state-chartered charter school so that it equals

the amount the school district or state-chartered charter

school is entitled to receive for the entire school year

based upon the November 15 report and subject to audit and

verification.

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D. The department shall make periodic installment

payments to school districts and state-chartered charter

schools during the school year from the transportation

distributions, based upon the allocations certified by the

state transportation director."

Section 20. Section 22-8-29.1 NMSA 1978 (being Laws

1995, Chapter 208, Section 10, as amended) is amended to

read:

"22-8-29.1. CALCULATION OF TRANSPORTATION ALLOCATION.--

A. As used in this section:

(1) "annual variables" means the

coefficients calculated by regressing the total operational

expenditures from two years prior to the current school year

for each school district and state-chartered charter school

using the number of students transported and the numerical

value of site characteristics;

(2) "base amount" means the fixed amount

that is the same for all school districts and an amount

established by rule for state-chartered charter schools;

(3) "total operational expenditures" means

the sum of all to-and-from school transportation

expenditures, excluding expenditures incurred in accordance

with the provisions of Section 22-8-27 NMSA 1978; and

(4) "variable amount" means the sum of the

product of the annual variables multiplied by each school

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district's or state-chartered charter school's numerical

value of the school district's and state-chartered charter

school's site characteristics multiplied by the number of

days of operation for each school district or state-chartered

charter school.

B. The department shall calculate the

transportation allocation for each school district and

state-chartered charter school.

C. The base amount is designated as product A.

Product A is the constant calculated by regressing the total

operations expenditures from the two years prior to the

current school year for school district or state-chartered

charter school operations using the numerical value of site

characteristics approved by the department. The legislative

education study committee and the legislative finance

committee may review the site characteristics developed by

the state transportation director prior to approval by the

department.

D. The variable amount is designated as product B.

Product B is the predicted additional expenditures for each

school district or state-chartered charter school based on

the regression analysis using the site characteristics as

predictor variables multiplied by the number of days.

E. The allocation to each school district and

state-chartered charter school shall be equal to product A

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plus product B.

F. For the 2001-2002, 2002-2003 and 2003-2004

school years, the transportation allocation for each school

district shall not be less than ninety-five percent or more

than one hundred five percent of the prior school year's

transportation expenditure.

G. The adjustment factor shall be applied to the

allocation amount determined pursuant to Subsections E and F

of this section."

Section 21. Section 22-8-29.4 NMSA 1978 (being Laws

1995, Chapter 208, Section 13, as amended) is amended to

read:

"22-8-29.4. TRANSPORTATION DISTRIBUTION ADJUSTMENT

FACTOR.--

A. The department shall establish a transportation

distribution adjustment factor. The adjustment factor shall

be calculated as follows:

(1) calculate the unadjusted transportation

allocation for each school district and state-chartered

charter school, designated in Section 22-8-29.1 NMSA 1978 as

product A plus product B;

(2) the sum total of product A plus product

B in all school districts and state-chartered charter schools

added together equals product C; and

(3) subtract product C from the total

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operational transportation distribution for the current year

and divide the result by product C and then add 1 in the

following manner:

"[(total operational transportation distribution - C) � C]

+ 1". The result is the transportation distribution

adjustment factor.

B. As used in this section, "total operational

transportation distribution" means the total legislative

appropriation for the transportation distribution minus

amounts included for capital outlay expenses."

Section 22. Section 22-8-30 NMSA 1978 (being Laws 1974,

Chapter 8, Section 17, as amended) is amended to read:

"22-8-30. SUPPLEMENTAL DISTRIBUTIONS.--

A. The department shall make supplemental

distributions only for the following purposes:

(1) to pay the out-of-state tuition of

students subject to the Compulsory School Attendance Law who

are attending school out-of-state because school facilities

are not reasonably available in the school district of their

residence;

(2) to make emergency distributions to

school districts or state-chartered charter schools in

financial need, but no money shall be distributed to any

school district or state-chartered charter school having cash

and invested reserves, or other resources or any combination

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thereof, equaling five percent or more of the school

district's or state-chartered charter school's operational

budget;

(3) to make program enrichment distributions

in the amount of actual program expense to school districts

and state-chartered charter schools for the purpose of

providing specific programs to meet particular educational

requirements that cannot otherwise be financed;

(4) a special vocational education

distribution to area vocational schools or state-supported

schools with department-approved vocational programs to

reimburse those schools for the cost of vocational education

programs for those students subject to the Compulsory School

Attendance Law who are enrolled in such programs; and

(5) to make emergency capital outlay

distributions to school districts or state-chartered charter

schools that have experienced an unexpected capital outlay

emergency demanding immediate attention.

B. The department shall account for all

supplemental distributions and shall make full reports to the

governor, legislative education study committee and

legislative finance committee of payments made as authorized

in Subsection A of this section.

C. The department may divert any unused or

unneeded balances in any of the distributions made under the

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supplementary distribution authority to make any other

distribution made pursuant to the same authority."

Section 23. Section 22-8-38 NMSA 1978 (being Laws 1967,

Chapter 16, Section 96, as amended) is amended to read:

"22-8-38. BOARDS OF FINANCE--DESIGNATION.--

A. Upon written application to and approval of the

department, a local school board may be designated a board of

finance for public school funds of the school district. A

local school board designated as a board of finance may

require all funds distributed to, allocated to or collected

for the school district or the public schools under its

jurisdiction to be deposited with it. The department shall

designate a local school board as a board of finance if:

(1) the local school board shows to the

satisfaction of the department that it has personnel properly

trained to keep accurate and complete fiscal records;

(2) the local school board agrees to consult

with the department on any matters not covered by the manual

of accounting and budgeting before taking any action relating

to funds held by it as a board of finance;

(3) the persons handling these funds are

adequately bonded to protect the funds entrusted to them from

loss; and

(4) the local school board making

application has not been suspended and not reinstated as a

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board of finance within the past year.

B. A charter school applicant requesting a charter

from the commission shall submit a plan detailing how its

governing body will qualify for designation as a board of

finance for public school funds of the charter school. The

governing body of a proposed state-chartered charter school

shall qualify as a board of finance before the first year of

operation of the charter school. The governing body of a

state-chartered charter school designated as a board of

finance may require all funds distributed to, allocated to or

collected for the state-chartered charter school to be

deposited with the governing body. The commission shall

designate the governing body of a state-chartered charter

school as a board of finance if:

(1) the governing body shows to the

satisfaction of the commission that it has personnel properly

trained to keep accurate and complete fiscal records;

(2) the governing body agrees to consult

with the division on any matters not covered by the manual of

accounting and budgeting before taking any action relating to

funds held by it as a board of finance;

(3) the persons handling these funds are

adequately bonded to protect the funds entrusted to them from

loss; and

(4) the governing body was not a governing

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body of a charter school or does not have a member who was a

member of a governing body of a charter school that was

suspended and not reinstated as a board of finance.

C. Failure of the governing body of a proposed

state-chartered charter school to qualify for designation as

a board of finance constitutes good and just grounds for

denial, nonrenewal or revocation of its charter."

Section 24. Section 22-8-39 NMSA 1978 (being Laws 1967,

Chapter 16, Section 97, as amended) is amended to read:

"22-8-39. BOARDS OF FINANCE--SUSPENSION.--The

department may at any time suspend a local school board or

governing body of a state-chartered charter school from

acting as a board of finance if the department reasonably

believes there is mismanagement, improper recording or

improper reporting of public school funds under the local

school board's or governing body of a state-chartered charter

school's control. When a local school board or governing

body of a state-chartered charter school is suspended from

acting as a board of finance, the department shall:

A. immediately take control of all public school

funds under the control of the local school board or

governing body of a state-chartered charter school acting as

a board of finance;

B. immediately have an audit made of all funds

under the control of the local school board or governing body

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of a state-chartered charter school acting as a board of

finance and charge the cost of the audit to the school

district or state-chartered charter school;

C. act as a fiscal agent for the school district

or state-chartered charter school and take any action

necessary to conform the fiscal management of funds of the

school district or state-chartered charter school to the

requirements of law and good accounting practices;

D. report any violations of the law to the proper

law enforcement officers;

E. act as fiscal agent for the school district or

state-chartered charter school until the department

determines that the local school board or governing body of a

state-chartered charter school is capable of acting as a

board of finance or until the department determines that the

county treasurer should act as fiscal agent for the school

district or state-chartered charter school;

F. inform the local school board or governing

body of a state-chartered charter school in writing of the

department's determination as to who is to act as board of

finance or fiscal agent for the school district or

state-chartered charter school and also inform the county

treasurer in writing if it determines that the county

treasurer should act as fiscal agent for the school district

or state-chartered charter school; and

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G. consider commencing proceedings before the

commission to suspend, revoke or refuse to renew the charter

of the state-chartered charter school in the case of a

state-chartered charter school that has engaged in serious or

repeated mismanagement, improper recording or improper

reporting of public school funds under its control."

Section 25. Section 22-8-40 NMSA 1978 (being Laws

1977, Chapter 136, Section 2, as amended) is amended to read:

"22-8-40. DEPOSIT OF PUBLIC SCHOOL FUNDS--

DISTRIBUTION--INTEREST.--

A. All public money in the custody of school

districts or state-chartered charter schools that have been

designated as boards of finance shall be deposited in

qualified depositories in accordance with the terms of this

section.

B. Deposits of funds of the school district or

state-chartered charter school may be made in

noninterest-bearing checking accounts in one or more banks,

savings and loan associations or credit unions, as long as

the credit union deposits are insured by an agency of the

United States, located within the geographical limits of the

school district.

C. Deposits of funds of the school district or

state-chartered charter school may be made in

interest-bearing checking accounts, commonly known as "NOW"

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accounts, in one or more banks, savings and loan associations

or credit unions, as long as the credit union deposits are

insured by an agency of the United States, located within the

geographical limits of the school district.

D. Public money placed in interest-bearing

deposits, in banks and savings and loan associations, other

than interest-bearing checking accounts as defined in

Subsection C of this section, shall be equitably distributed

among all banks and savings and loan associations having

their main or manned branch offices within the geographical

boundaries of the school district that have qualified as

public depositories by reason of insurance of the account by

an agency of the United States or by depositing collateral

security or by giving bond as provided by law in the

proportion that each such bank's or savings and loan

association's net worth bears to the total net worth of all

banks and savings and loan associations having their main

office or a manned branch office within the geographical

boundaries of the school district. The net worth of the main

office of a savings and loan association and its manned

branch offices within the geographical boundaries of a school

district is the total net worth of the association multiplied

by the percentage that deposits of the main office and the

manned branch offices located within the geographical

boundaries of the school district are of the total deposits

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of the association. The net worth of each manned branch

office or aggregate of manned branch offices of a savings and

loan association located outside the geographical boundaries

of the school district in which the main office is located is

the total net worth of the association multiplied by the

percentage that deposits of the branch or aggregate of

branches located outside the geographical boundaries of the

school district in which the main office is located are of

the total deposits of the association. The director of the

financial institutions division of the regulation and

licensing department shall promulgate a formula for

determining the net worth of banks' main offices and branches

for the purposes of distribution of public money as provided

for by this section. "Net worth" means assets less

liabilities as reported by such banks and savings and loan

associations on their most recent semiannual reports to the

state or federal supervisory authority having jurisdiction.

E. Notwithstanding the provisions of Subsection D

of this section, public money may be placed in interest-

bearing deposits, other than interest-bearing checking

accounts as defined in Subsection C of this section, at the

discretion of the board of finance, in credit unions having

their main or manned branch offices within the geographical

boundaries of the school district to the extent such deposits

are insured by an agency of the United States.

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F. The rate of interest for all public money

deposited in interest-bearing accounts in banks, savings and

loan associations and credit unions shall be set by the state

board of finance, but in no case shall the rate of interest

be less than one hundred percent of the asked price on United

States treasury bills of the same maturity on the date of

deposit. Any bank or savings and loan association that fails

to pay the minimum rate of interest at the time of deposit

provided for herein for any respective deposit forfeits its

right to an equitable share of that deposit under this

section.

If the deposit is part or all of the proceeds of a bond issue

and the interest rate prescribed in this subsection

materially exceeds the rate of interest of the bonds, the

interest rate prescribed by this subsection shall be reduced

on the deposit to an amount not materially exceeding the

interest rate of the bonds if the bond issue would lose its

tax exempt status under Section 103 of the United States

Internal Revenue Code of 1954, as amended.

G. Public money in excess of that for which banks

and savings and loan associations within the geographical

boundaries of the school district have qualified may be

deposited in qualified depositories, including credit unions,

in other areas within the state under the same requirements

for payment of interest as if the money were deposited within

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the geographical boundaries of the school district.

H. The board of finance of the school district or

state-chartered charter school may temporarily invest money

held in demand deposits and not immediately needed for the

operation of the school district or state-chartered charter

school. Such temporary investments shall be made only in

securities that are issued by the state or by the United

States government, or by their departments or agencies, and

that are either direct obligations of the state or the United

States or are backed by the full faith and credit of those

governments.

I. The department of finance and administration

may monitor the deposits of public money by school districts

or state-chartered charter schools to assure full compliance

with the provisions of this section."

Section 26. Section 22-8B-1 NMSA 1978 (being Laws

1999, Chapter 281, Section 1, as amended) is amended to read:

"22-8B-1. SHORT TITLE.--Chapter 22, Article 8B NMSA

1978 may be cited as the "Charter Schools Act"."

Section 27. Section 22-8B-2 NMSA 1978 (being Laws

1999, Chapter 281, Section 2) is amended to read:

"22-8B-2. DEFINITIONS.--As used in the Charter Schools

Act:

A. "charter school" means a conversion school or

start-up school authorized by the chartering authority to

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operate as a public school;

B. "chartering authority" means either a local

school board or the commission;

C. "commission" means the public education

commission;

D. "conversion school" means an existing public

school within a school district that was authorized by a

local school board to become a charter school prior to July

1, 2007;

E. "division" means the charter schools division

of the department;

F. "governing body" means the governing structure

of a charter school as set forth in the school's charter; and

G. "start-up school" means a public school

developed by one or more parents, teachers or community

members authorized by the chartering authority to become a

charter school."

Section 28. Section 22-8B-3 NMSA 1978 (being Laws

1999, Chapter 281, Section 3) is amended to read:

"22-8B-3. PURPOSE.--The Charter Schools Act is enacted

to enable individual schools to structure their educational

curriculum to encourage the use of different and innovative

teaching methods that are based on reliable research and

effective practices or have been replicated successfully in

schools with diverse characteristics; to allow the

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development of different and innovative forms of measuring

student learning and achievement; to address the needs of all

students, including those determined to be at risk; to create

new professional opportunities for teachers, including the

opportunity to be responsible for the learning program at the

school site; to improve student achievement; to provide

parents and students with an educational alternative to

create new, innovative and more flexible ways of educating

children within the public school system; to encourage

parental and community involvement in the public school

system; to develop and use site-based budgeting; and to hold

charter schools accountable for meeting the department's

educational standards and fiscal requirements."

Section 29. A new section of the Charter Schools Act

is enacted to read:

"PUBLIC EDUCATION COMMISSION--POWERS AND DUTIES.--The

commission shall receive applications for initial chartering

and renewals of charters for charter schools that want to be

chartered by the state and approve or disapprove those

charter applications. The commission may approve, deny,

suspend or revoke the charter of a state-chartered charter

school in accordance with the provisions of the Charter

Schools Act. The chartering authority for a charter school

existing on July 1, 2007 may be transferred to the

commission; provided, however, that if a school chartered

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under a previous chartering authority chooses to transfer its

chartering authority, it shall continue to operate under the

provisions of that charter until its renewal date unless it

is suspended or revoked by the commission. An application

for a charter school filed with a local school board prior to

July 1, 2007, but not approved, may be transferred to the

commission on July 1, 2007."

Section 30. A new section of the Charter Schools Act

is enacted to read:

"CHARTER SCHOOLS DIVISION--DUTIES.--The "charter

schools division" is created in the department. The division

shall:

A. provide staff support to the commission;

B. provide technical support to all charter

schools;

C. review and approve state-chartered charter

school budget matters; and

D. make recommendations to the commission

regarding the approval, denial, suspension or revocation of

the charter of a state-chartered charter school."

Section 31. 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 subject to all

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federal and state laws and constitutional provisions

prohibiting discrimination on the basis of disability, race,

creed, color, gender, national origin, religion, ancestry or

need for special education services.

B. A charter school shall be governed by a

governing body in the manner set forth in the charter;

provided that a governing body shall have at least five

members; and provided further that no member of a governing

body 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 on the governing body of another

charter school.

C. A charter school shall be responsible for:

(1) its own operation, including

preparation of a budget, subject to audits pursuant to the

Audit Act; and

(2) contracting for services and 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

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out the educational program described in its charter.

Facilities used by a charter school shall meet the standards

required pursuant to 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

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 charter school with

available facilities for the school's operations unless the

facilities are currently used for other educational purposes.

A charter school shall not be required to pay rent for the

school district facilities if the facilities can be provided

at no cost to the school district. If facilities are

available but cannot be provided at no cost to the school

district, the school district shall not charge more than the

actual direct cost of providing the facilities. 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

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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; but,

for purposes of calculating program units pursuant to the

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Public School Finance Act, the separate facilities shall be

treated together as one school.

M. A charter school shall be 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 termination of the 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.

O. The governing body of a charter school may

accept or reject any charitable gift, grant, devise or

bequest; provided that no such gift, grant, devise or bequest

shall be accepted if subject to any condition contrary to law

or to the terms of the charter. The particular gift, grant,

devise or bequest shall be considered an asset of the charter

school to which it is given.

P. The governing body may contract and sue and be

sued. A local school board shall not be 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.

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R. A charter school is a public school that may

contract with a school district or other party for provision

of financial management, food services, transportation,

facilities, education-related services or other services.

The governing body 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 the department, 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 accepted for enrollment in

that charter school. The state-chartered charter school, as

a local educational agency, shall assume responsibility for

determining students' needs for special education and related

services. The division may promulgate rules to implement the

requirements of this subsection."

Section 32. Section 22-8B-5 NMSA 1978 (being Laws

1999, Chapter 281, Section 5) is amended to read:

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"22-8B-5. CHARTER SCHOOLS--STATUS--LOCAL SCHOOL BOARD

AUTHORITY.--

A. The local school board may waive only locally

imposed school district requirements for locally chartered

charter schools.

B. A state-chartered charter school is exempt

from school district requirements. A state-chartered charter

school is responsible for developing its own written policies

and procedures in accordance with this section.

C. The department shall waive requirements or

rules and provisions of the Public School Code pertaining to

individual class load, teaching load, length of the school

day, staffing patterns, subject areas, purchase of

instructional material, evaluation standards for school

personnel, school principal duties and driver education. The

department may waive requirements or rules and provisions of

the Public School Code pertaining to graduation requirements.

Any waivers granted pursuant to this section shall be for the

term of the charter granted but may be suspended or revoked

earlier by the department.

D. A charter school shall be a public school

accredited by the department and shall be accountable to the

chartering authority for purposes of ensuring compliance with

applicable laws, rules and charter provisions.

E. A local school board shall not require any

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employee of the school district to be employed in a charter

school.

F. A local school board shall not require any

student residing within the geographic boundary of its

district to enroll in a charter school.

G. A student who is suspended or expelled from a

charter school shall be deemed to be suspended or expelled

from the school district in which the student resides."

Section 33. Section 22-8B-6 NMSA 1978 (being Laws

1998, Chapter 281, Section 6, as amended) is amended to read:

"22-8B-6. CHARTER SCHOOL REQUIREMENTS--APPLICATION

PROCESS--AUTHORIZATION--BOARD OF FINANCE DESIGNATION

REQUIRED.--

A. A local school board has the authority to

approve the establishment of a charter school within the

school district in which it is located.

B. At least one hundred eighty days prior to

initial application, 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 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.

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If an application is submitted to a chartering authority, it

must process the application. Applications for initial

charters shall be submitted by July 1 to be eligible for

consideration for the following fiscal year; provided that

the July 1 deadline may be waived upon agreement of the

applicant and the chartering authority.

D. An application shall include the total number

of grades the charter school proposes to provide, either

immediately or phased. 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.

E. An application shall include a detailed

description of the charter school's projected capital outlay

needs, including projected requests for capital outlay

assistance.

F. An application for a start-up school 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

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school's proposed 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 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 chartering authority shall receive and

review all 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 meeting 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. 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. The

chartering authority shall rule on the application for a

charter school in a public meeting within sixty days after

receiving the application. If not ruled upon within sixty

days, the charter application shall be automatically reviewed

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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.

K. 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

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geographic boundaries the charter school applies to operate.

L. 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.

M. 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 34. Section 22-8B-7 NMSA 1978 (being Laws

1999, Chapter 281, Section 7, as amended) is amended to read:

"22-8B-7. APPEAL OF DENIAL, NONRENEWAL, SUSPENSION OR

REVOCATION--PROCEDURES.--

A. The secretary, upon receipt of a notice of

appeal or upon the secretary's own motion, shall review

decisions of a chartering authority concerning charter

schools in accordance with the provisions of this section.

B. A charter applicant or governing body that

wishes to appeal a decision of the chartering authority

concerning the denial, nonrenewal, suspension or revocation

of a charter school or the imposition of conditions that are

unacceptable to the charter school or charter school

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applicant shall provide the secretary with a notice of appeal

within thirty days after the chartering authority's decision.

The charter school applicant or governing body bringing the

appeal shall limit the grounds of the appeal to the grounds

for denial, nonrenewal, suspension or revocation or the

imposition of conditions that were specified by the

chartering authority. The notice shall include a brief

statement of the reasons the charter school applicant or

governing body contends the chartering authority's decision

was in error. Except as provided in Subsection E of this

section, the appeal and review process shall be as follows

within sixty days after receipt of the notice of appeal, the

secretary, at a public hearing that may be held in the school

district in which the charter school is located or in which

the proposed charter school has applied for a charter, shall

review the decision of the chartering authority and make

findings. If the secretary finds that the chartering

authority acted arbitrarily or capriciously, rendered a

decision not supported by substantial evidence or did not act

in accordance with law, the secretary may reverse the

decision of the chartering authority and order the approval

of the charter with or without conditions. The decision of

the secretary shall be final.

C. The secretary, on the secretary's own motion,

may review a chartering authority's decision to grant a

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charter. Within sixty days after the making of a motion to

review by the secretary, the secretary, at a public hearing

that may be held in the school district in which the proposed

charter school that has applied for a charter will be

located, shall review the decision of the chartering

authority and determine whether the decision was arbitrary or

capricious or whether the establishment or operation of the

proposed charter school would:

(1) violate any federal or state laws

concerning civil rights;

(2) violate any court order; or

(3) threaten the health and safety of

students within the school district.

D. If the secretary determines that the charter

would violate the provisions set forth in Subsection C of

this section, the secretary shall deny the charter

application. The secretary may extend the time lines

established in this section for good cause. The decision of

the secretary shall be final.

E. If a chartering authority denies an

application or refuses to renew a charter because the public

school capital outlay council has determined that the

facilities do not meet the standards required by Section

22-8B-4.2 NMSA 1978, the charter school applicant or charter

school may appeal the decision to the secretary as otherwise

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provided in this section; provided that the secretary shall

reverse the decision of the chartering authority only if the

secretary determines that the decision was arbitrary,

capricious, not supported by substantial evidence or

otherwise not in accordance with the law.

F. A person aggrieved by a final decision of the

secretary may appeal the decision to the district court

pursuant to the provisions of Section 39-3-1.1 NMSA 1978."

Section 35. Section 22-8B-8 NMSA 1978 (being Laws

1999, Chapter 281, Section 8) is amended to read:

"22-8B-8. CHARTER APPLICATION--CONTENTS.--The charter

school application for a start-up school shall be a proposed

agreement between the chartering authority and the charter

school and shall include:

A. the mission statement of the charter school;

B. the goals, objectives and student performance

standards to be achieved by the charter school;

C. a description of the charter school's

educational program, student performance standards and

curriculum that must meet or exceed the department's

educational standards and must be designed to enable each

student to achieve those standards;

D. a description of the way a charter school's

educational program will meet the individual needs of the

students, including those students determined to be at risk;

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E. a description of the charter school's plan for

evaluating student performance, the types of assessments that

will be used to measure student progress toward achievement

of the state's standards and the school's student performance

standards, the time line for achievement of the standards and

the procedures for taking corrective action in the event that

student performance falls below the standards;

F. evidence that the plan for the charter school

is economically sound, including a proposed budget for the

term of the charter and a description of the manner in which

the annual audit of the financial and administrative

operations of the charter school is to be conducted;

G. evidence that the fiscal management of the

charter school complies with all applicable federal and state

laws and rules relative to fiscal procedures;

H. evidence of a plan for the displacement of

students, teachers and other employees who will not attend or

be employed in the conversion school;

I. a description of the governing body and

operation of the charter school, including:

(1) how the initial governing body will be

selected;

(2) qualification and terms of members, how

vacancies on the governing body will be filled and procedures

for changing governing body membership; and

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(3) the nature and extent of parental,

professional educator and community involvement in the

governance and operation of the school;

J. an explanation of the relationship that will

exist between the proposed charter school and its employees,

including evidence that the terms and conditions of

employment will be addressed with affected employees and

their recognized representatives, if any;

K. the employment and student discipline policies

of the proposed charter school;

L. for a locally chartered charter school, an

agreement between the charter school and the local school

board regarding their respective legal liability and

applicable insurance coverage;

M. a description of how the charter school plans

to meet the transportation and food service needs of its

students;

N. a description of the waivers that the charter

school is requesting from the local school board and the

department and the charter school's plan for addressing these

waiver requests;

O. a description of the facilities the charter

school plans to use; and

P. any other information reasonably required by

the chartering authority."

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Section 36. Section 22-8B-9 NMSA 1978 (being Laws

1999, Chapter 281, Section 9) is amended to read:

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

A. An approved charter application is a contract

between the charter school and the chartering authority.

B. The charter shall reflect all agreements

regarding the release of the charter school from department

rules and policies.

C. For locally chartered charter schools, the

contract between the charter school and the local school

board shall reflect 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.

D. The charter school shall participate in the

public school insurance authority.

E. Any revision or amendment to the terms of the

charter shall be made only with the approval of the

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chartering authority and the governing body of the charter

school.

F. For locally chartered charter schools, the

charter shall include procedures agreed upon by the charter

school and the local school board for the resolution of

disputes between the charter school and the local school

board. The charter shall include procedures that shall be

agreed upon by the charter school and the local school board

in the event that the board determines that the charter shall

be revoked pursuant to the provisions of Section 22-8B-12

NMSA 1978."

Section 37. Section 22-8B-10 NMSA 1978 (being Laws

1999, Chapter 281, Section 10) is amended to read:

"22-8B-10. CHARTER SCHOOLS--EMPLOYEES.--

A. A charter school shall hire its own employees.

The provisions of the School Personnel Act shall apply to

such employees; provided, however, that a charter school may

determine by indicating in its charter that either its

governing body or head administrator shall make all

employment decisions. The governing body shall be deemed to

be responsible for making all employment decisions if the

charter does not specify the decision maker.

B. A charter school shall not initially employ or

approve the initial employment of a head administrator who is

the spouse, father, father-in-law, mother, mother-in-law,

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son, son-in-law, daughter or daughter-in-law of a member of

the governing body. A charter school shall not initially

employ or approve the initial employment of a licensed school

employee who is the spouse, father, father-in-law, mother,

mother-in-law, son, son-in-law, daughter or daughter-in-law

of the head administrator. The governing body may waive the

nepotism rule for family members of a head administrator.

C. Nothing in this section shall prohibit the

continued employment of a person employed on or before July

1, 2007."

Section 38. Section 22-8B-11 NMSA 1978 (being Laws

1999, Chapter 281, Section 11) is amended to read:

"22-8B-11. CHARTER SCHOOLS--MAXIMUM NUMBER

ESTABLISHED.--

A. The commission shall authorize the approval of

start-up charter schools.

B. No more than fifteen start-up schools may be

established per year statewide. The number of charter school

slots remaining in that year shall be transferred to

succeeding years up to a maximum of seventy-five start-up

schools in any five-year period."

Section 39. 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--

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GROUNDS FOR NONRENEWAL OR REVOCATION.--

A. A charter school may be approved for an

initial term of six years; provided that the first year 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. 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.

C. Prior to the end of the planning year, a

state-chartered charter school shall demonstrate that it has

qualified as a board of finance and has satisfied any

conditions imposed by the commission before commencing full

operation for the remainder of its charter term. The

commission shall either issue or refuse to issue the

authorization to commence full operation within twenty-one

days of the request. If the commission refuses to issue the

authorization, it shall provide its reasons in writing to the

charter school.

D. No later than two hundred seventy days prior

to the date in which the charter expires, the governing body

may submit a renewal application to the chartering authority.

A charter school may apply to a different chartering

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authority for renewal. The chartering authority shall rule

in a public hearing on the renewal application no later than

one hundred eighty days prior to the expiration of the

charter.

E. A charter school renewal application submitted

to the chartering authority shall contain:

(1) a report on the progress of the charter

school in achieving the goals, objectives, student

performance standards, state minimum educational standards

and other terms of the initial approved charter application,

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) contents of the charter application set

forth in Section 22-8B-8 NMSA 1978;

(4) a petition in support of the charter

school renewing its charter status signed by not less than

sixty-five percent of the employees in the charter school;

(5) a petition in support of the charter

school renewing its charter status signed by at least

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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.

F. 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;

(2) failed to meet or make substantial

progress toward achievement of the department's minimum

educational standards or student performance standards

identified in the charter application;

(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.

G. 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.

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H. A decision to suspend, revoke or not to renew

a charter may be appealed by the governing body pursuant to

Section 22-8B-7 NMSA 1978."

Section 40. Section 22-8B-13 NMSA 1978 (being Laws

1999, Chapter 281, Section 13) is amended to read:

"22-8B-13. CHARTER SCHOOL FINANCING.--

A. The amount of funding allocated to a charter

school shall be not less than ninety-eight percent of the

school-generated program cost. The school district or

division may withhold and use two percent of the

school-generated program cost for its administrative support

of a charter school.

B. That portion of money from state or federal

programs generated by students enrolled in a locally

chartered charter school shall be allocated to that charter

school serving students eligible for that aid. Any other

public school program not offered by the locally chartered

charter school shall not be entitled to the share of money

generated by a charter school program.

C. When a state-chartered charter school is

designated as a board of finance pursuant to Section 22-8-38

NMSA 1978, it shall receive state and federal funds for which

it is eligible.

D. Charter schools may apply for all federal

funds for which they are eligible.

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E. All services centrally or otherwise provided

by a local school district, including custodial, maintenance

and media services, libraries and warehousing shall be

subject to negotiation between the charter school and the

school district. Any services for which a charter school

contracts with a school district shall be provided by the

district at a reasonable cost."

Section 41. Section 22-12-2 NMSA 1978 (being Laws

1967, Chapter 16, Section 170, as amended) is amended to

read:

"22-12-2. COMPULSORY SCHOOL ATTENDANCE--

RESPONSIBILITY.--

A. Any qualified student and any person who

because of the person's age is eligible to become a qualified

student as defined by the Public School Finance Act until

attaining the age of majority shall attend a public school, a

private school, a home school or a state institution. A

person shall be excused from this requirement if:

(1) the person is specifically exempted by

law from the provisions of this section;

(2) the person has graduated from a high

school;

(3) the person is at least seventeen years

of age and has been excused by the local school board or the

governing body of a state-chartered charter school or its

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authorized representative upon a finding that the person will

be employed in a gainful trade or occupation or engaged in an

alternative form of education sufficient for the person's

educational needs and the parent consents; or

(4) with consent of the parent of the

person to be excused, the person is excused from the

provisions of this section by the superintendent of schools

of the school district or by the head administrator of the

state-chartered charter school and the person is under eight

years of age.

B. A person subject to the provisions of the

Compulsory School Attendance Law shall attend school for at

least the length of time of the school year that is

established in the school district in which the person is a

resident or the state-chartered charter school in which the

person is enrolled.

C. Any parent of a person subject to the

provisions of the Compulsory School Attendance Law is

responsible for the school attendance of that person.

D. Each local school board and each governing

body of a charter school or private school shall enforce the

provisions of the Compulsory School Attendance Law for

students enrolled in their respective schools."

Section 42. Section 22-12-3 NMSA 1978 (being Laws

1971, Chapter 238, Section 1, as amended) is amended to read:

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"22-12-3. RELIGIOUS INSTRUCTION EXCUSAL.--A student

may, subject to the approval of the school principal, be

excused from school to participate in religious instruction

for not more than one class period each school day with the

written consent of the student's parents at a time period not

in conflict with the academic program of the school. The

local school board or governing body of a charter school, and

its school employees, shall not assume responsibility for the

religious instruction or permit it to be conducted on school

property."

Section 43. Section 22-12-7 NMSA 1978 (being Laws

1967, Chapter 16, Section 175, as amended) is amended to

read:

"22-12-7. ENFORCEMENT OF ATTENDANCE LAW--HABITUAL

TRUANTS--PENALTY.--

A. Each local school board and each governing

body of a charter school or private school shall initiate the

enforcement of the provisions of the Compulsory School

Attendance Law for students enrolled in their respective

schools.

B. To initiate enforcement of the provisions of

the Compulsory School Attendance Law against an habitual

truant, a local school board or governing body of a charter

school or private school or its authorized representatives

shall give written notice of the habitual truancy by

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certified mail to or by personal service on the parent of the

student subject to and in noncompliance with the provisions

of the Compulsory School Attendance Law.

C. If unexcused absences continue after written

notice of habitual truancy as provided in Subsection B of

this section has occurred, the student shall be reported to

the probation services office of the judicial district where

the student resides for an investigation as to whether the

student shall be considered to be a neglected child or a

child in a family in need of services because of habitual

truancy and thus subject to the provisions of the Children's

Code. In addition to any other disposition, the children's

court may order the habitual truant's driving privileges to

be suspended for a specified time not to exceed ninety days

on the first finding of habitual truancy and not to exceed

one year for a subsequent finding of habitual truancy.

D. If, after review by the juvenile probation

office where the student resides, a determination and finding

is made that the habitual truancy by the student may have

been caused by the parent of the student, then the matter

will be referred by the juvenile probation office to the

district attorney's office or any law enforcement agency

having jurisdiction for appropriate investigation and filing

of charges allowed under the Compulsory School Attendance

Law. Charges against the parent may be filed in metropolitan

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court, magistrate court or district court.

E. A parent of the student who, after receiving

written notice as provided in Subsection B of this section

and after the matter has been reviewed in accordance with

Subsection D of this section, knowingly allows the student to

continue to violate the Compulsory School Attendance Law

shall be guilty of a petty misdemeanor. Upon the first

conviction, a fine of not less than twenty-five dollars

($25.00) or more than one hundred dollars ($100) may be

imposed, or the parent of the student may be ordered to

perform community service. If violations of the Compulsory

School Attendance Law continue, upon the second and

subsequent convictions, the parent of the student who

knowingly allows the student to continue to violate the

Compulsory School Attendance Law shall be guilty of a petty

misdemeanor and shall be subject to a fine of not more than

five hundred dollars ($500) or imprisonment for a definite

term not to exceed six months or both.

F. The provisions of this section shall apply

beginning July 1, 2004."

Section 44. Section 22-12-8 NMSA 1978 (being Laws

1985, Chapter 104, Section 1, as amended) is amended to read:

"22-12-8. EARLY IDENTIFICATION--UNEXCUSED ABSENCES AND

TRUANCY.--Notwithstanding the provisions of Section 22-12-7

NMSA 1978, if a student is truant, the school district or

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charter school shall contact the student's parent to inform

the parent that the student is truant and to discuss possible

interventions. The provisions of this section do not apply

to any absence if the parent has contacted the school to

explain the absence."

Section 45. Section 22-12-9 NMSA 1978 (being Laws

2004, Chapter 28, Section 1, as amended) is amended to read:

"22-12-9. UNEXCUSED ABSENCES AND TRUANCY--ATTENDANCE

POLICIES.--

A. As used in this section and Sections 22-12-7

and 22-12-8 NMSA 1978:

(1) "habitual truant" means a student who

has accumulated the equivalent of ten or more unexcused

absences within a school year;

(2) "truant" means a student who has

accumulated five unexcused absences within any twenty-day

period; and

(3) "unexcused absence" means an absence

from school or a class for which the student does not have an

allowable excuse pursuant to the Compulsory School Attendance

Law or rules of the local school board or governing authority

of a charter school or private school.

B. Each school district and charter school shall

maintain an attendance policy that:

(1) provides for early identification of

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students with unexcused absences, truants and habitual

truants and provides intervention strategies that focus on

keeping truants in an educational setting and prohibit

out-of-school suspension and expulsion as the punishment for

truancy;

(2) uses withdrawal as provided in Section

22-8-2 NMSA 1978 only after exhausting efforts to keep

students in educational settings; and

(3) requires that class attendance be taken

for every instructional day in every public school or school

program in the school district.

C. School districts and charter schools shall

report truancy and habitual truancy rates to the department

in a form and at such times as the department determines and

shall document efforts made to keep truants and habitual

truants in educational settings. Locally chartered charter

schools shall provide copies of their reports to the school

district."

Section 46. Section 22-13-3.7 NMSA 1978 (being Laws

1989, Chapter 113, Section 5, as amended) is amended to read:

"22-13-3.7. DISBURSEMENT OF FUNDS--APPROVED

PROJECTS.--

A. Any school district or state-chartered charter

school may apply for a grant from the literacy for children

at risk fund for the purpose of acquiring, equipping and

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staffing a learning laboratory.

B. The department shall adopt rules setting forth

the criteria that a school district or state-chartered

charter school shall meet in order to qualify for a grant

from the literacy for children at risk fund. The criteria to

qualify for a grant shall include, but are not limited to,

the following:

(1) the learning laboratory shall improve

the reading, writing or math literacy levels of children at

risk by at least one grade level per year, as demonstrated to

the department's satisfaction;

(2) the learning laboratory shall encompass

the teaching of children in kindergarten through grade twelve

who are reading below grade level;

(3) the learning laboratory shall have

reading diagnostic capabilities; and

(4) the learning laboratory shall have the

capability to self-monitor the performance of both the

learning laboratory and the children at risk using the

laboratory.

C. The amount of any grant awarded under

Subsections A and B of this section shall be equal to eighty

percent of the total cost of acquiring, equipping and

staffing a learning laboratory. Any grant awarded is

contingent upon the qualifying school district or

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state-chartered charter school demonstrating to the

department's satisfaction that it can pay for twenty percent

of the total cost of the learning laboratory.

D. Any school district or state-chartered charter

school that establishes a learning laboratory under this

section may use the laboratory for any other reading, writing

or math literacy program when it is not in use for the

purposes of the Literacy For Children At Risk Act.

E. The department, after approving the

application of a school district or state-chartered charter

school to receive a grant under the Literacy For Children At

Risk Act, shall authorize a disbursement of funds, in an

amount equal to the grant, from the literacy for children at

risk fund directly to the approved school district or charter

school."

Section 47. Section 22-15-2 NMSA 1978 (being Laws

1967, Chapter 16, Section 206, as amended) is amended to

read:

"22-15-2. DEFINITIONS.--As used in the Instructional

Material Law:

A. "division" or "bureau" means the instructional

material bureau of the department;

B. "director" or "chief" means the chief of the

bureau;

C. "instructional material" means school

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textbooks and other educational media that are used as the

basis for instruction, including combinations of textbooks,

learning kits, supplementary material and electronic media;

D. "multiple list" means a written list of those

instructional materials approved by the department;

E. "membership" means the total enrollment of

qualified students on the fortieth day of the school year

entitled to the free use of instructional material pursuant

to the Instructional Material Law;

F. "additional pupil" means a pupil in a school

district's, state institution's or private school's current

year's certified forty-day membership above the number

certified in the school district's, state institution's or

private school's prior year's forty-day membership; and

G. "school district" includes state-chartered

charter schools."

Section 48. Section 22-15C-1 NMSA 1978 (being Laws

2003, Chapter 149, Section 1) is amended to read:

"22-15C-1. SHORT TITLE.--Chapter 22, Article 15C NMSA

1978 may be cited as the "School Library Material Act"."

Section 49. Section 22-15C-2 NMSA 1978 (being Laws

2003, Chapter 149, Section 2) is amended to read:

"22-15C-2. DEFINITIONS.--As used in the School Library

Material Act:

A. "additional student" means a student in the

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certified forty-day membership of the current year for a

school district or state institution above the number

certified in the forty-day membership of the prior year for

the school district or state institution;

B. "bureau" means the instructional material

bureau of the department;

C. "fund" means the school library material fund;

D. "library material processing" means cataloging

of school library material, including in electronic format,

according to nationally accepted standards, and the

application of bar code labels and call-number classification

labels to the material;

E. "membership" means the total enrollment of

qualified students on the fortieth day of the school year

entitled to the free use of school library material pursuant

to the School Library Material Act;

F. "qualified student" means a public school

student who:

(1) has not graduated from high school;

(2) is regularly enrolled in one-half or

more of the minimum course requirements approved by the

department for public school students; and

(3) is at least five years of age prior to

12:01 a.m. on September 1 of the school year; or

(4) is at least three years of age at any

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time during the school year and is receiving special

education services pursuant to regulation of the department;

G. "school library material" means books and

other educational media, including online reference and

periodical databases, that are made available in a school

library to students for circulation and use in the library;

and

H. "school district" includes state-chartered

charter schools."

Section 50. Section 22-15D-1 NMSA 1978 (being Laws

2003, Chapter 152, Section 1) is amended to read:

"22-15D-1. SHORT TITLE.--Chapter 22, Article 15D NMSA

1978 may be cited as the "Fine Arts Education Act"."

Section 51. Section 22-15D-2 NMSA 1978 (being Laws

2003, Chapter 152, Section 2) is amended to read:

"22-15D-2. PURPOSE.--

A. The purpose of the Fine Arts Education Act is

to encourage school districts and state-chartered charter

schools to offer opportunities for elementary school students

to participate in fine arts activities, including visual

arts, music, theater and dance.

B. Participation in fine arts programs encourages

cognitive and affective development by:

(1) focusing on a variety of learning

styles and engaging students who might otherwise fail;

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(2) training students in complex thinking

and learning;

(3) helping students to devise creative

solutions for problems;

(4) providing students new challenges; and

(5) teaching students how to work

cooperatively with others and to understand and value diverse

cultures."

Section 52. Section 22-15D-4 NMSA 1978 (being Laws

2003, Chapter 152, Section 4) is amended to read:

"22-15D-4. DEPARTMENT--POWERS AND DUTIES.--The

department shall issue guidelines for the development and

implementation of fine arts education programs. The

department shall:

A. administer and enforce the provisions of the

Fine Arts Education Act; and

B. assist school districts and charter schools in

developing and evaluating programs."

Section 53. Section 22-15D-5 NMSA 1978 (being Laws

2003, Chapter 152, Section 5) is amended to read:

"22-15D-5. PROGRAM PLAN AND EVALUATION.--

A. A school district or state-chartered charter

school may prepare and submit to the department a fine arts

education program plan in accordance with guidelines issued

by the department.

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B. At a minimum, the plan shall include the fine

arts education programs being taught, the ways in which the

fine arts are being integrated into the curriculum and an

evaluation component.

C. At yearly intervals, the school district or

state-chartered charter school, the department and a parent

advisory committee from the school district or charter school

shall review the goals and priorities of the plan and make

appropriate recommendations to the secretary."

Section 54. Section 22-20-1 NMSA 1978 (being Laws

1967, Chapter 16, Section 270, as amended) is amended to

read:

"22-20-1. SCHOOL CONSTRUCTION--APPROVAL OF THE PUBLIC

SCHOOL FACILITIES AUTHORITY--COMPLIANCE WITH STATEWIDE

ADEQUACY STANDARDS--STATE CONSTRUCTION AND FIRE STANDARDS

APPLICABLE.--

A. Each local school board or governing body of a

charter school shall secure the approval of the director of

the public school facilities authority or the director's

designee prior to the construction or letting of contracts

for construction of any school building or related school

structure or before reopening an existing structure that was

formerly used as a school building but that has not been used

for that purpose during the previous year. A written

application shall be submitted to the director requesting

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approval of the construction, and, upon receipt, the director

shall forward a copy of the application to the secretary.

The director shall prescribe the form of the application,

which shall include the following:

(1) a statement of need;

(2) the anticipated number of students

affected by the construction;

(3) the estimated cost;

(4) a description of the proposed

construction project;

(5) a map of the area showing existing

school attendance centers within a five-mile radius and any

obstructions to attending the attendance centers, such as

railroad tracks, rivers and limited-access highways; and

(6) such other information as may be

required by the director.

B. The director or the director's designee shall

give approval to an application if the director or designee

reasonably determines that:

(1) the construction will not cause an

unnecessary proliferation of school construction;

(2) the construction is needed in the

school district or by the charter school;

(3) the construction is feasible;

(4) the cost of the construction is

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reasonable;

(5) the construction project:

(a) is in compliance with the

statewide adequacy standards adopted pursuant to the Public

School Capital Outlay Act; and

(b) if relevant, is appropriately

integrated into the school district or charter school master

plan;

(6) the school district or charter school

is financially able to pay for the construction; and

(7) the secretary has certified that the

construction will support the educational program of the

school district or charter school.

C. Within thirty days after the receipt of an

application filed pursuant to this section, the director or

the director's designee shall in writing notify the local

school board or governing body of a charter school making the

application and the department of approval or disapproval of

the application.

D. A local school board or governing body of a

charter school shall not enter into a contract for the

construction of a public school facility, including contracts

funded with insurance proceeds, unless the contract contains

provisions requiring the construction to be in compliance

with the statewide adequacy standards adopted pursuant to the

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Public School Capital Outlay Act; provided that for a

contract funded in whole or in part with insurance proceeds:

(1) the cost of settlement of any insurance

claim shall not be increased by inclusion of the insurance

proceeds in the construction contract; and

(2) insurance claims settlements shall

continue to be governed by insurance policies, memoranda of

coverage and rules related to them.

E. Public school facilities shall be constructed

pursuant to state standards or codes promulgated pursuant to

the Construction Industries Licensing Act and rules adopted

pursuant to Section 59A-52-15 NMSA 1978 for the prevention

and control of fires in public occupancies. Building

standards or codes adopted by a municipality or county do not

apply to the construction of public school facilities, except

those structures constructed as a part of an educational

program of a school district or charter school.

F. The provisions of Subsection E of this section

relating to fire protection shall not be effective until the

public regulation commission has adopted the International

Fire Code and all standards related to that code.

G. As used in this section, "construction" means

any project for which the construction industries division of

the regulation and licensing department requires permitting."

Section 55. Section 22-20-2 NMSA 1978 (being Laws

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1967, Chapter 16, Section 271) is amended to read:

"22-20-2. SCHOOL BUILDING CONSTRUCTION--DISTANCE FROM

HIGHWAYS.--

A. No local school board or governing body of a

charter school shall construct or cause the construction of

any public school building within four hundred feet of any

main artery of travel without the prior written approval of

the department.

B. The district court may enforce the provisions

of this section by any appropriate civil remedy in an action

brought by an interested party.

C. As used in this section, "main artery of

travel" means any designated state or federal-aid highway

used primarily to accommodate transient motor traffic through

a municipality and any type of public highway used primarily

to accommodate transient motor traffic through a rural

community or area."

Section 56. Section 22-21-1 NMSA 1978 (being Laws

1967, Chapter 16, Section 282, as amended) is amended to

read:

"22-21-1. PROHIBITING SALES TO THE DEPARTMENT, TO

SCHOOL DISTRICTS AND TO SCHOOL PERSONNEL--EXCEPTION--

PENALTY.--

A. A member of the commission, a member of a

local school board, a member of the governing body of a

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charter school, the secretary, an employee of the department

or a school employee shall not, directly or indirectly, sell

or be a party to any transaction to sell any instructional

material, furniture, equipment, insurance, school supplies or

work under contract to the department, school district or

public school with which such person is associated or

employed. No such person shall receive any commission or

profit from the sale or any transaction to sell any

instructional material, furniture, equipment, insurance,

school supplies or work under contract to the department,

school district or public school with which the person is

associated or employed.

B. The provisions of this section shall not apply

to a person making a sale in the regular course of business

who complies with the provisions of Sections 13-1-21,

13-1-21.2 and 13-1-22 NMSA 1978. The provisions of this

section shall not apply in cases in which school employees

contract to perform special services with the department,

school district or public school with which they are

associated or employed during time periods wherein service is

not required under a contract for instruction, administration

or other employment.

C. No member of the commission, member of a local

school board, member of the governing body of a charter

school, the secretary, employee of the department or school

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employee shall solicit or sell or be a party to a transaction

to solicit or sell insurance or investment securities to any

employee of the department or any employee of the school

district whom such person supervises. Nothing in this

subsection shall prohibit a financial institution from

requiring the purchase of insurance in connection with a loan

or offering and selling such insurance in accordance with the

provisions of the New Mexico Insurance Code.

D. No state employee who supervises or exercises

control over school districts or charter schools, which

supervision or control includes but is not limited to school

programs, capital outlay and operating budgets, shall enter

into any business relationship with an employee of a local

school district or charter school over which the state

employee exercises supervision or control.

E. Any person violating any provision of this

section is guilty of a fourth degree felony under the

Criminal Code. The department may suspend or revoke the

licensure of a licensed school employee for violation of this

section."

Section 57. Section 22-23-2 NMSA 1978 (being Laws

1973, Chapter 285, Section 2, as amended) is amended to read:

"22-23-2. DEFINITIONS.--As used in the Bilingual

Multicultural Education Act:

A. "bilingual multicultural education program"

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means a program using two languages, including English and

the home or heritage language, as a medium of instruction in

the teaching and learning process;

B. "culturally and linguistically different"

means students who are of a different cultural background

than mainstream United States culture and whose home or

heritage language, inherited from the student's family, tribe

or country of origin, is a language other than English;

C. "department" means the public education

department;

D. "district" means a public school or any

combination of public schools in a district or a charter

school;

E. "English language learner" means a student

whose first or heritage language is not English and who is

unable to read, write, speak or understand English at a level

comparable to grade level English proficient peers and native

English speakers;

F. "heritage language" means a language other

than English that is inherited from a family, tribe,

community or country of origin;

G. "home language" means a language other than

English that is the primary or heritage language spoken at

home or in the community;

H. "school board" means a local school board or

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governing body of a state-chartered charter school; and

I. "standardized curriculum" means a district

curriculum that is aligned with the state academic content

standards, benchmarks and performance standards."

Section 58. Section 22-24-3 NMSA 1978 (being Laws

1975, Chapter 235, Section 3, as amended) is amended to read:

"22-24-3. DEFINITIONS.--As used in the Public School

Capital Outlay Act:

A. "council" means the public school capital

outlay council;

B. "fund" means the public school capital outlay

fund; and

C. "school district" includes state-chartered

charter schools."

Section 59. TEMPORARY PROVISION--CAPITAL OUTLAY

STUDY.--The public school capital outlay oversight task

force, in consultation with the public school capital outlay

council, the public education department and the public

school facilities authority, shall study statutory provisions

governing the funding of charter school capital outlay

facilities, transportation costs and any other capital outlay

issues concerning charter schools and shall make

recommendations to the legislative education study committee,

the legislative finance committee and the governor by

November 1, 2006.

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Section 60. REPEAL.--

A. Section 22-8B-15 NMSA 1978 (being Laws 1999,

Chapter 281, Section 15) is repealed.

B. Laws 2005, Chapter 176, Section 12 is

repealed.

Section 61. EFFECTIVE DATE.--The effective date of the

provisions of Section 59 of this act is May 17, 2006. The

effective date of the provisions of Sections 1 through 57 and

60 of this act is July 1, 2007.