HOUSE EDUCATION COMMITTEE SUBSTITUTE FOR

HOUSE BILL 158

51st legislature - STATE OF NEW MEXICO - first session, 2013

AN ACT

RELATING TO PUBLIC SCHOOLS; AMENDING THE PUBLIC SCHOOL FINANCE ACT TO REQUIRE PERFORMANCE-BASED BUDGETS FOR SCHOOL DISTRICTS AND CHARTER SCHOOLS AND TO MODIFY AND UPDATE THE AT-RISK FACTOR IN THE FUNDING FORMULA; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION OF LAW IN LAWS 1999.

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

     SECTION 1. 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:

     "22-8-6. BUDGETS--SUBMISSION--FAILURE TO SUBMIT.--

          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.

          B. The operating budget required by this section may include:

                (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 2014-2015 school year, all school districts shall submit performance-based budgets that comply with the requirements of the Accountability in Government Act and shall be in a form specified by the department."

     SECTION 2. 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 the first year of operation, the budget 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 MEM on the second and third reporting dates of the prior year and its own 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. Beginning with the 2014-2015 school year, all state-chartered charter schools shall submit performance-based budgets that comply with the requirements of the Accountability in Government Act and shall be in a form specified by the department.

          [B.] C. Each locally chartered charter school shall submit to the local school board a school-based budget. For the first year of operation, the budget of every locally chartered charter school shall be based on the projected number of program units generated by the 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 locally chartered charter schools shall be based on the number of program units generated using the average of the MEM on the second and third reporting dates of the prior year and its own 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.

          D. Beginning with the 2014-2015 school year, all locally chartered charter schools shall submit performance-based budgets that comply with the requirements of the Accountability in Government Act and shall be in a form specified by the department.

          [C.] E. For the first year of operation after a locally chartered charter school converts to a state-chartered charter school or a state-chartered charter school converts to a locally chartered charter school, the charter school's budget shall be based on the number of program units generated using the average of the MEM on the second and third reporting dates of the prior year and the instructional staff training and experience index and the at-risk index of the school district in which it is geographically located. For second and subsequent fiscal years of operation, the charter school shall follow the provisions of Subsection A or [B] C of this section, as applicable.

          [D. Notwithstanding the provisions of Subsections A through C of this section, each charter school that was in existence in fiscal year 2009 shall be held harmless in the calculation of its instructional staff training and experience index for two fiscal years. For fiscal years 2010 and 2011, the department shall use the greater of the charter school's 2008-2009 funded instructional staff training and experience index or the charter school's own instructional staff training and experience index. Beginning in fiscal year 2012, each charter school shall use its own instructional staff training and experience index.]"

     SECTION 3. Section 22-8-7 NMSA 1978 (being Laws 1967, Chapter 16, Section 61, as amended) is amended to read:

     "22-8-7. BUDGETS--FORM.--Beginning with the 2014-2015 school year, budgets submitted to the department by a school district or state-chartered charter school, or budgets submitted by a locally chartered charter school to its chartering school district, shall be performance-based budgets that comply with requirements of the Accountability in Government Act and shall be in a form specified by the department."

     SECTION 4. Section 22-8-23.3 NMSA 1978 (being Laws 1997, Chapter 40, Section 7, as amended) is amended to read:

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

          A. A school district is eligible for additional program units if it establishes within its [state board] department-approved educational plan identified services to assist students to reach their full academic potential. A school district receiving additional at-risk program units shall include a report of specified services [in its annual accountability report pursuant to Section 22-1-6 NMSA 1978], including, but not limited to, reading coaches and interventionists, reduced class size at high-poverty schools, additional instructional time, tutoring and school- and student-level interventions to improve academic proficiency, and intended outcomes as a supplement to its performance-based budget in a form specified by the department. The number of additional units to which a school district is entitled under this section is computed in the following manner:

At-Risk Index x MEM = Units

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

     Three-Year Average Total Rate x [0.0915] 0.1050 = At-Risk Index.

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

          [C. The department shall recalculate the at-risk index for each school district every year. For the 2002-2003, 2003-2004 and 2004-2005 school years, a school district shall not receive less than ninety percent of the at-risk funding generated in fiscal year 2001.]"

     SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of Section 4 of this act is July 1, 2014.

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