HB0229

RELATING TO PUBLIC SCHOOL FINANCE; MAKING CHANGES TO THE PUBLIC SCHOOL FUNDING FORMULA; REQUIRING PERFORMANCE-BASED BUDGETS; PROVIDING FOR LEGISLATIVE APPROVAL FOR NEW CHARTER SCHOOLS; PROVIDING FOR FIRST-YEAR OPERATIONAL FUNDING; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION OF LAW IN LAWS 1999.

SECTION 1. Section 22-8-2 NMSA 1978 (being Laws 1978, Chapter 128, Section 3, as amended) is amended to read:

B. "membership" means the total enrollment of qualified students on the current roll of a class or school 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 Withdrawals of students, in addition to students formally withdrawn from the public school, include students absent from the public school for as many as ten consecutive school days; provided that withdrawals do not include students in need of early intervention 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;

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 "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,

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 school for public use;

(2) is regularly enrolled full time in [one-half or more of] the minimum course requirements approved by the department for public school students; and

(a) is at least five years of age prior to 12:01 a.m. on September 1 of the school year;

(b) 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

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 2. Section 22-8-6 NMSA 1978 (being Laws 1967, Chapter 16, Section 60, as amended by Laws 1999, Chapter 281, Section 21 and by Laws 1999, Chapter 291, Section 2) is amended to read:

A. Prior to April 15 of each year, each local school board shall submit to the department an operating budget for the school district and any charter [schools] school in the school district for the ensuing fiscal year. Upon written approval of the [state superintendent] secretary, the date for the submission of the operating budget as required by this section may be extended to a later date fixed by the [state superintendent] secretary.

(1) estimates of the cost of insurance policies for periods up to five years if a lower rate may be obtained by purchasing insurance for the longer term; or

(2) estimates of the cost of contracts for the transportation of students for terms extending up to four years.

C. The operating budget required by this section shall include a budget for each charter school of the membership projected for each charter school, the total program units generated at that charter school and approximate anticipated disbursements and expenditures at each charter school.

D. If a local school board fails to submit a budget pursuant to this section, the department shall prepare the operating budget for the school district for the ensuing fiscal year. A local school board shall be considered as failing to submit a budget pursuant to this section if the budget submitted exceeds the total projected resources of the school district or if the budget submitted does not comply with the law or with rules and procedures of the department.

E. Beginning with the 2013-2014 school year, all school districts shall submit performance-based budgets that comply with the requirements of the Accountability in Government Act on forms prescribed by the department."

SECTION 3. Section 22-8-18 NMSA 1978 (being Laws 1974, Chapter 8, Section 8, as amended) is amended to read:

A. Except as otherwise provided in this section, 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 (6)] and (2) in this subsection by the instructional staff training and experience index and adding the program units itemized as Paragraphs [(7)] (3) through (13) in this subsection. The itemized program units are as follows:

(3) special education, adjusted by subtracting the units derived from membership in class D special education programs in private, nonsectarian, nonprofit training centers;

(10) special education units derived from membership in class D special education programs in private, nonsectarian, nonprofit training centers;

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. Except as otherwise provided in this section, 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; and provided [however] further that if a public school has been rated D or F for two consecutive years, the department shall ensure that the local school board or governing body of a charter school is prioritizing resources for the public school toward proven programs and methods linked to improved student achievement until the public school earns a C or better for two consecutive years.

C. The total program cost for a charter school shall not exceed that of the school district in which it is located."

SECTION 4. Section 22-8-21 NMSA 1978 (being Laws 1974, Chapter 8, Section 11, as amended) is amended to read:

A. For the purpose of the Public School Finance Act, special education programs for exceptional children are those approved by the department and classified as follows:

(1) class A programs, in which department- certified individuals provide services to children whose individualized education programs require a minimal amount of special education and in which the ratio of students to professionals is regulated by the [state board] department;

(2) class B programs, in which department- certified individuals provide services to children whose individualized education programs require a moderate amount of special education and in which the ratio of students to professionals is regulated by the [state board] department;

(3) class C programs, in which department- certified individuals provide services to children whose individualized education programs require an extensive amount of special education and in which the ratio of students to professionals is regulated by the [state board] department;

(4) class D programs, in which department- certified individuals provide services to children whose

individualized education programs require a maximum amount of special education and in which the ratio of students to professionals is regulated by the [state board] department. Students in class D programs may be enrolled in private, nonsectarian, nonprofit educational training centers in accordance with the provisions of Section 22-13-8 NMSA 1978; and

(5) programs for developmentally disabled three- and four-year-old children meeting standards approved by the [state board] department.

B. All students assigned to the programs for exceptional children classified in Subsection A of this section shall have been so assigned as a result of diagnosis and evaluation performed in accordance with the standards of the department before the students may be counted in the determination of special education program units as provided in Subsection C of this section.

(1) the MEM in approved class A and B programs as defined in Subsection A of this section multiplied by the cost differential factor .7;

(2) the MEM in approved class C programs as defined in Subsection A of this section multiplied by the cost differential factor 1.0;

(3) the MEM in approved class D programs as defined in Subsection A of this section multiplied by the cost differential factor 2.0;

(4) the MEM for developmentally disabled three- and four-year-old children as defined in Subsection A of this section multiplied by the cost differential factor 2.0; provided that no developmentally disabled three- or four-year- old student shall be counted for additional ancillary service units; and

(5) for related services ancillary to providing special education, the number of full-time-equivalent certified or licensed ancillary service and diagnostic service personnel multiplied by the cost differential factor 25.0; provided that the number of full-time-equivalent licensed ancillary service and diagnostic service personnel multiplied by the cost differential factor shall not exceed 1.0.

D. For the purpose of calculating membership in class C and class D programs, students shall be counted in actual grade placement or according to chronological age if not in actual grade placement.

E. The department shall promulgate rules specifying minimum case loads for ancillary personnel for the purpose of determining special education program units."

SECTION 5. Section 22-8-23 NMSA 1978 (being Laws 1975, Chapter 119, Section 1, as amended) is amended to read:

than 400, including early childhood education full-time-equivalent MEM but excluding membership in class C and class D programs and excluding full-time-equivalent membership in three- and four-year-old developmentally disabled programs, is eligible for additional program units. Public schools that are co-located in the same facility or on the same campus or five miles or less from a similar public school shall not be classified as a small school for purposes of size adjustment program units. Separate schools established to provide special programs, including but not limited to vocational and alternative education, shall not be classified as public schools for purposes of generating size adjustment program units. The number of additional program units to which a school district is entitled under this subsection is the sum of elementary-junior high units and senior high units computed in the following manner:

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

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

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

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

SECTION 6. Section 22-8-24 NMSA 1978 (being Laws 1974, Chapter 8, Section 15, as amended by Laws 1993, Chapter 91, Section 1 and also by Laws 1993, Chapter 237, Section 3) is repealed and a new Section 22-8-24 NMSA 1978 is enacted to read:

A. For the purpose of calculating the index of staff qualifications, the following definitions and limitations apply:

(2) the number of instructional staff to be counted in calculating the index of staff qualifications is the actual number of full-time-equivalent instructional staff on the October payroll of the prior year;

(3) the number of years of experience to be used in calculating the index of staff qualifications is the number of years of experience as determined by the department; and

(4) the academic degree and additional credit hours to be used in calculating the index of staff qualifications are the degree and additional semester credit hours allowed for salary increment purposes on the salary schedule of the school district or charter school.

B. The factors for each classification of academic training by years of experience are as follows:

	Years of Experience
	Level I			Level II				Level III
Academic Classification	0-1	2-3	4-5	4-6	7-8	9-15	Over 15	7-8	9-15	Over 15
Bachelor's degree	0.64	0.67	0.71	0.76	0.82	0.93	1.04	0.90	1.02	1.17
Master's degree or national board certification	0.68	0.72	0.76	0.81	0.88	1.00	1.11	0.96	1.09	1.25
Master's degree plus 45 credit
hours or post-master's degree	0.71	0.75	0.79	0.85	0.92	1.05	1.16	1.01	1.14	1.31

C. The index of staff qualifications for each school district and charter school shall be calculated in accordance with instructions issued by the department. The following calculation shall be made to compute the value of the index of staff qualifications:

(1) multiply the number of full-time-equivalent teachers in each academic classification and level in the matrix by the numerical factor in the appropriate "years of experience" column provided in Subsection B of this section;

(2) add the adjusted full-time-equivalent teachers calculated in Paragraph (1) of this subsection; and

(3) divide the total obtained in Paragraph (2) of this subsection by the total number of full-time-equivalent instructional staff.

D. If the result of the calculation of the index of staff qualifications for a school district or charter school is less than 1.0, its factor shall be 1.0.

E. If a new school district is created, the index of staff qualifications for that school district for the first year of operation shall be 1.0.

F. If a school district's or charter school's index of staff qualifications is greater than 1.0, the index of staff qualifications formula adjustment used to determine the adjusted per-student cost is equal to the amount determined in Subsection C of this section multiplied by the percentage of the prior year's budget for instructional staff salaries and benefits plus a factor equal to one hundred percent minus the percentage of the prior year's budget for instructional staff salaries and benefits."

"[NEW MATERIAL] NEW SCHOOL FUND--PURPOSES.--The "new school fund" is created in the state treasury. Money in the fund reverts to the general fund at the end of a fiscal year. The fund shall be administered by the department and money in the fund is subject to appropriation by the legislature to fund the first year of operations of new charter schools. The operational cost of a new charter school is subject to the availability of funds appropriated by the legislature. The department shall include a request for an appropriation from the fund as part of the department's September 1 budget request for the succeeding fiscal year."

"[NEW MATERIAL] NEW CHARTER SCHOOLS--FISCAL IMPACT STUDY--LEGISLATIVE APPROVAL FOR FUNDING PRIOR TO FINAL AUTHORIZATION.--

A. The chartering authority shall conduct a fiscal impact study before approving a new charter school, including the fiscal impact of a new charter school on the school district in which it is located and the fiscal impact on the public school funding formula and the state equalization guarantee distribution for all public schools. The fiscal impact study shall be reviewed and approved by the department prior to issuance. The costs of a charter school's planning year and its first year of operation is subject to the availability of funds appropriated by the legislature.

B. A charter school shall not receive final authorization for establishment until the legislature has approved funding for the charter school. After final authorization for establishment by the chartering authority and after the charter school's planning year, the legislature shall fund the charter school through categorical funding and the charter school shall not receive a state equalization guarantee distribution for its first year of operation."