New Mexico 2025 Regular Session

New Mexico House Bill HB388 Compare Versions

Only one version of the bill is available at this time.

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28	28	HOUSE BILL 388
29	29	57
30	30	TH LEGISLATURE
31	31	-
32	32
33	33	STATE
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35	35	OF
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37	37	NEW
38	38
39	39	MEXICO
40	40
41	41	-
42	42	FIRST SESSION
43	43	,
44	44
45	45	2025
46	46	INTRODUCED BY
47	47	Rebecca Dow and Rod Montoya and Jonathan A. Henry
48	48	and Harlan Vincent
49	49	AN ACT
50	50	RELATING TO EDUCATION; ENACTING THE LOW-INCOME EDUCATION
51	51	OPPORTUNITY ACCOUNT ACT; PROVIDING POWERS AND DUTIES; PROVIDING
52	52	FOR LOW-INCOME EDUCATION OPPORTUNITY ACCOUNTS; PROVIDING INCOME
53	53	ELIGIBILITY REQUIREMENTS; PROVIDING ALLOWABLE USES; PROVIDING
54	54	PROCEDURES AND APPLICATION REQUIREMENTS FOR PARENTS AND
55	55	EDUCATION SERVICE PROVIDERS; CREATING A REVIEW COMMISSION;
56	56	MAKING APPROPRIATIONS.
57	57	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
58	58	SECTION 1. A new section of the Public School Code is
59	59	enacted to read:
60	60	"[NEW MATERIAL] SHORT TITLE.--This act may be cited as the
61	61	"Low-Income Education Opportunity Account Act"."
62	62	SECTION 2. A new section of the Public School Code is
63	63	enacted to read:
64	64	.229900.3 underscored material = new
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91	91	"[NEW MATERIAL] DEFINITIONS.--As used in the Low-Income
92	92	Education Opportunity Account Act:
93	93	A. "curriculum" means a complete course of study
94	94	for a particular primary or secondary content area or grade
95	95	level;
96	96	B. "education" means a primary or secondary
97	97	education;
98	98	C. "education service provider" means a private
99	99	school located in New Mexico that is qualified to provide
100	100	educational goods and services to participating students and
101	101	that receives payments from low-income education opportunity
102	102	accounts; provided that "education service provider" does not
103	103	mean an online school;
104	104	D. "eligible student" means a school-age person:
105	105	(1) who is a resident of New Mexico;
106	106	(2) who has not received a high school diploma
107	107	or a high school equivalency credential;
108	108	(3) who is eligible for enrollment or re-
109	109	enrollment in a public school; and
110	110	(4) whose household income is less than two
111	111	hundred percent of the federal poverty level;
112	112	E. "low-income education opportunity account" means
113	113	the account into which money is deposited by the department to
114	114	pay for qualifying education expenses of a participating
115	115	student;
116	116	.229900.3
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144	144	F. "participating student" means a student who is
145	145	participating in the program; and
146	146	G. "program" means the low-income education
147	147	opportunity account program."
148	148	SECTION 3. A new section of the Public School Code is
149	149	enacted to read:
150	150	"[NEW MATERIAL] LOW-INCOME EDUCATION OPPORTUNITY ACCOUNT
151	151	PROGRAM--CREATED--FUNDING USES.--
152	152	A. The "low-income education opportunity account
153	153	program" is created in the department to allow the department,
154	154	in contract with parents of participating students, to pay for
155	155	private school and other eligible expenses through "low-income
156	156	education opportunity accounts". The department:
157	157	(1) shall establish low-income education
158	158	opportunity accounts for students who qualify for the program;
159	159	(2) shall determine the amount each
160	160	participating student is eligible to receive, which amount is
161	161	equal to the average amount spent by school districts and
162	162	charter schools on public school students in the same grade,
163	163	weighted by special education and at-risk program units, if
164	164	applicable; provided that a participating student shall not
165	165	receive more than the student's qualifying educational
166	166	expenses;
167	167	(3) shall make monthly deposits into each low-
168	168	income education opportunity account; and
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197	197	(4) may contract for financial management
198	198	services for low-income education opportunity accounts.
199	199	B. Money in a participating student's low-income
200	200	education opportunity account shall be used by the department,
201	201	in contract with parents of participating students, only in
202	202	accordance with the provisions of the Low-Income Education
203	203	Opportunity Account Act and only for the following qualifying
204	204	education expenses:
205	205	(1) tuition and fees at a private elementary
206	206	or secondary school that teaches, among other courses, reading,
207	207	language arts, mathematics, science and social studies
208	208	appropriate for the grade level of the participating student;
209	209	(2) tutoring services provided by a qualified
210	210	person;
211	211	(3) textbooks and other instructional
212	212	materials, including computer hardware and software, required
213	213	by the education service provider to deliver education to the
214	214	participating student;
215	215	(4) fees for nationally standardized
216	216	assessments, advanced placement examination fees and other
217	217	assessments required by the education service provider;
218	218	(5) tuition or fees for summer and after-
219	219	school elementary or secondary programs;
220	220	(6) public transportation to and from school;
221	221	and
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250	250	(7) other educational charges approved by the
251	251	department.
252	252	C. The department and the parent of a participating
253	253	student shall enter into an annual contract that specifies what
254	254	qualifying education expenses will be purchased each semester
255	255	or other term, the cost of the educational services to be
256	256	provided and by whom the educational services will be provided.
257	257	The department shall not deposit into a low-income education
258	258	opportunity account more than the combined cost of educational
259	259	services provided to the participating student in that year. A
260	260	parent shall not pay more for educational services than the
261	261	parent of a similarly situated school-age person pays. Money
262	262	in a low-income education opportunity account shall not be
263	263	refunded, rebated or shared with a parent or participating
264	264	student in any manner. A refund or rebate for educational
265	265	services purchased through a low-income education opportunity
266	266	account shall be credited directly to that account. A parent
267	267	may make payments for the cost of educational services not
268	268	covered by a low-income education opportunity account, but in
269	269	no case shall a parent deposit personal funds into a
270	270	participating student's account.
271	271	D. Money in a participating student's low-income
272	272	education opportunity account shall be issued at the direction
273	273	of the participating student's parent to an education service
274	274	provider, in the name of the student.
275	275	.229900.3
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303	303	E. If an education service provider requires
304	304	partial payment of tuition or fees prior to the start of the
305	305	academic year to reserve space for a participating student
306	306	admitted to the education service provider, such partial
307	307	payment may be paid by the department prior to the start of the
308	308	school year in which the low-income education opportunity
309	309	account is awarded and deducted in an equitable manner from
310	310	subsequent monthly account deposits to ensure that adequate
311	311	funds remain available throughout the school year; provided
312	312	that if the participating student does not attend the education
313	313	service provider to which partial payment was made, the partial
314	314	payment shall be returned to the department by the education
315	315	service provider for credit to the account.
316	316	F. Funds deposited in a low-income education
317	317	opportunity account shall not constitute taxable income for
318	318	state tax purposes of the parent or the participating student.
319	319	G. Except as provided in Subsection H of this
320	320	section, any unexpended or unencumbered balance in a low-income
321	321	education opportunity account may remain in the account until
322	322	one of the following occurs, at which time the department shall
323	323	close the account and the unexpended or unencumbered balance
324	324	shall revert to the general fund:
325	325	(1) the parent withdraws the participating
326	326	student from the program;
327	327	(2) the student graduates from high school; or
328	328	.229900.3
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356	356	(3) the account is closed by the department
357	357	because of misuse of funds as determined by the department.
358	358	H. The department shall revert unexpended or
359	359	unencumbered balances every two years unless it waives the
360	360	reversion of a specific low-income education opportunity
361	361	account for extenuating circumstances.
362	362	I. Nothing in the Low-Income Education Opportunity
363	363	Account Act shall be construed to require a participating
364	364	student to be enrolled only in a private school, but the
365	365	participating student shall be in compliance with the
366	366	Attendance for Success Act."
367	367	SECTION 4. A new section of the Public School Code is
368	368	enacted to read:
369	369	"[NEW MATERIAL] LOW-INCOME EDUCATION OPPORTUNITY
370	370	ACCOUNT--APPLICATION PROCESS--RENEWAL--SUSPENSION.--
371	371	A. A parent may apply to the department to
372	372	establish a low-income education opportunity account for an
373	373	eligible student.
374	374	B. The department shall accept and approve
375	375	applications year-round and shall establish procedures and
376	376	rules for approving applications in an expeditious manner.
377	377	C. The department shall create a standard form that
378	378	parents shall submit to establish a student's eligibility for
379	379	the program and shall ensure that the application is publicly
380	380	available and may be submitted through various sources,
381	381	.229900.3
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409	409	including the internet.
410	410	D. The department shall approve an application for
411	411	a low-income education opportunity account if:
412	412	(1) the parent submits an application for a
413	413	low-income education opportunity account in accordance with the
414	414	application procedures established by the department;
415	415	(2) the student, on whose behalf the parent is
416	416	applying, is an eligible student;
417	417	(3) funds are available for the program or the
418	418	low-income education opportunity account; and
419	419	(4) the parent signs a contract with the
420	420	department agreeing:
421	421	(a) to provide an education for the
422	422	participating student in at least the subjects of reading,
423	423	language arts, mathematics, science and social studies;
424	424	(b) not to enroll the student as a
425	425	full-time student in a public school while participating in the
426	426	program;
427	427	(c) to use the funds in the low-income
428	428	education opportunity account only for qualifying education
429	429	expenses to educate the student; and
430	430	(d) to comply with the rules and
431	431	requirements of the program.
432	432	E. The department shall annually renew a student's
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462	462	available.
463	463	F. Upon notice to the department, a participating
464	464	student may choose to stop receiving low-income education
465	465	opportunity account funding and enroll full time in a public
466	466	school. Enrolling as a full-time student in a public school
467	467	shall result in the immediate suspension of payment of
468	468	additional funds into the student's low-income education
469	469	opportunity account; provided that, for low-income education
470	470	opportunity accounts that have been open for at least one full
471	471	school year, the department may allow a low-income education
472	472	opportunity account to remain open and active for the parent to
473	473	pay qualifying education expenses to educate the student from
474	474	money remaining in the account. The department shall revert
475	475	unexpended or unencumbered balances in a student's low-income
476	476	education opportunity account and close the low-income
477	477	education opportunity account at the beginning of the next
478	478	school year if the student is enrolled in a public school.
479	479	G. If an eligible student decides to return to the
480	480	program, payments into the student's low-income education
481	481	opportunity account may resume if the low-income education
482	482	opportunity account is still open and active. A new low-income
483	483	education opportunity account may be established if the
484	484	student's low-income education opportunity account is closed.
485	485	H. The department may adopt rules to provide the
486	486	least disruptive process for a student who chooses to stop
487	487	.229900.3
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515	515	participating in the program and enroll full time in a public
516	516	school."
517	517	SECTION 5. A new section of the Public School Code is
518	518	enacted to read:
519	519	"[NEW MATERIAL] ADDITIONAL POWERS AND DUTIES--ALLOWABLE
520	520	USES OF FUNDS--EDUCATION SERVICE PROVIDERS.--
521	521	A. The department shall:
522	522	(1) maintain an updated list of qualified
523	523	education service providers and ensure that the list is
524	524	publicly available through various sources, including the
525	525	internet;
526	526	(2) provide parents with a written explanation
527	527	of the allowable uses of low-income education opportunity
528	528	account funds, the responsibilities of parents in ensuring the
529	529	education of their children, the duties of the department and
530	530	the role of any private financial management firms or other
531	531	private organizations that the department may contract with to
532	532	administer the program or any aspect of the program;
533	533	(3) ensure that parents of students with
534	534	disabilities receive notice that participation in the program
535	535	is a parental placement pursuant to the federal Individuals
536	536	with Disabilities Education Act, along with an explanation of
537	537	the rights that parentally placed students may possess under
538	538	federal law and any applicable state laws and rules;
539	539	(4) implement a commercially viable, cost-
540	540	.229900.3
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568	568	effective and user-friendly system for processing payments for
569	569	services from a low-income education opportunity account to an
570	570	education service provider by electronic or online funds
571	571	transfer; provided that the department:
572	572	(a) provides flexibility to parents by
573	573	facilitating direct payments to education service providers as
574	574	well as requests for preapproval of and reimbursements for
575	575	qualifying education expenses; and
576	576	(b) may contract with private
577	577	institutions to develop the payment system;
578	578	(5) implement, as soon as practicable, a
579	579	commercially viable, cost-effective and user-friendly system,
580	580	as part of the same system that facilitates the electronic or
581	581	online funds transfers, for parents to publicly rate, review
582	582	and share information about education service providers;
583	583	(6) continue making deposits into a student's
584	584	low-income education opportunity account until the:
585	585	(a) department has been notified or
586	586	determines that the student is no longer a participating
587	587	student;
588	588	(b) department determines that there was
589	589	misuse of the funds in the low-income education opportunity
590	590	account;
591	591	(c) student withdraws from the program;
592	592	(d) student enrolls full time in a
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621	621	public school; or
622	622	(e) student graduates from high school;
623	623	(7) audit individual low-income education
624	624	opportunity accounts;
625	625	(8) make a parent or participating student
626	626	ineligible for the program in the event of misuse of low-income
627	627	education opportunity account funds; provided that if a parent
628	628	is determined to be ineligible for the program and the
629	629	participating student is free from personal misconduct, that
630	630	student may be eligible for a low-income education opportunity
631	631	account if placed with a new guardian or other person with the
632	632	legal authority to act on behalf of the student;
633	633	(9) refer suspected cases of misuse of low-
634	634	income education opportunity account funds to law enforcement
635	635	if evidence of fraudulent use of low-income education
636	636	opportunity account funds exists;
637	637	(10) create procedures to ensure that a fair
638	638	process exists to determine whether a misuse of low-income
639	639	education opportunity account funds has occurred; and
640	640	(11) create procedures to ensure that a fair
641	641	process exists to determine whether an education service
642	642	provider may be barred from receiving payments from low-income
643	643	education opportunity accounts; provided that an education
644	644	service provider may appeal the department's decision to bar
645	645	the education service provider from receiving payments from
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674	674	low-income education opportunity accounts; and provided further
675	675	that if the department bars an education service provider from
676	676	receiving payments, the department shall notify parents of
677	677	participating students of the department's decision.
678	678	B. The department may:
679	679	(1) contract with private organizations to
680	680	administer the program or specific functions of the program,
681	681	including contracting with private financial management firms
682	682	to manage low-income education opportunity accounts;
683	683	(2) withhold from deposits or deduct from a
684	684	low-income education opportunity account an amount to cover the
685	685	costs of administering the program, in an amount up to a
686	686	maximum of five percent annually in the first two years of the
687	687	program and up to a maximum of three percent annually
688	688	thereafter;
689	689	(3) bar an education service provider from
690	690	accepting payments from low-income education opportunity
691	691	accounts if the department determines that the education
692	692	service provider has:
693	693	(a) substantially misrepresented
694	694	information or failed to refund any overpayments in a timely
695	695	manner; or
696	696	(b) failed to provide participating
697	697	students with sufficient educational goods or services;
698	698	(4) accept gifts, grants and donations from
699	699	.229900.3
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727	727	any source to cover administrative costs, to inform the public
728	728	about the program or to fund additional low-income education
729	729	opportunity accounts; and
730	730	(5) adopt rules in accordance with the State
731	731	Rules Act that are consistent with the Low-Income Education
732	732	Opportunity Account Act and necessary for the administration of
733	733	that act, including rules:
734	734	(a) establishing or contracting for the
735	735	establishment of an online anonymous fraud reporting service;
736	736	(b) establishing an anonymous telephone
737	737	hotline for fraud reporting;
738	738	(c) requiring a surety bond for
739	739	education service providers receiving more than one hundred
740	740	thousand dollars ($100,000) in low-income education opportunity
741	741	account funds; or
742	742	(d) for refunding payments from
743	743	education service providers to low-income education opportunity
744	744	accounts."
745	745	SECTION 6. A new section of the Public School Code is
746	746	enacted to read:
747	747	"[NEW MATERIAL] EDUCATION SERVICE PROVIDERS--
748	748	APPLICATIONS--AUTONOMY--NOT ACTING FOR THE STATE.--
749	749	A. The department by rule shall provide the
750	750	application process and procedures for prospective education
751	751	service providers to apply for listing as an eligible education
752	752	.229900.3
753	753	- 14 - underscored material = new
754	754	[bracketed material] = delete
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780	780	service provider. An application form signed by a prospective
781	781	education service provider warrants that the education service
782	782	provider:
783	783	(1) will not refund, rebate or share money
784	784	from low-income education opportunity accounts with parents or
785	785	participating students and shall return refunds to the
786	786	department; and
787	787	(2) will provide the educational services
788	788	contained in the agreement entered into with a parent.
789	789	B. An education service provider is not an agent of
790	790	the state or federal government, a local school board or school
791	791	district or governing authority or charter school. No action
792	792	of an education service provider shall be construed as an
793	793	action by the state or any of its departments, institutions or
794	794	political subdivisions.
795	795	C. An education service provider shall not be
796	796	required to alter its creed, practices, admissions policy or
797	797	curriculum to accept payments pursuant to the Low-Income
798	798	Education Opportunity Account Act except as provided in that
799	799	act."
800	800	SECTION 7. A new section of the Public School Code is
801	801	enacted to read:
802	802	"[NEW MATERIAL] STUDENT RECORDS.--Upon being notified that
803	803	a participating student is enrolled with an education service
804	804	provider, a public school that previously enrolled the
805	805	.229900.3
806	806	- 15 - underscored material = new
807	807	[bracketed material] = delete
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809	809	2
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833	833	participating student shall provide the education service
834	834	provider with the student's school records. The public school
835	835	and the education service provider shall comply with the
836	836	provisions of the federal Family Educational Rights and Privacy
837	837	Act of 1974 when sharing student records."
838	838	SECTION 8. A new section of the Public School Code is
839	839	enacted to read:
840	840	"[NEW MATERIAL] LOW-INCOME EDUCATION OPPORTUNITY REVIEW
841	841	COMMISSION.--
842	842	A. The department shall create the "low-income
843	843	education opportunity review commission" to assist the
844	844	department in determining what expenditures meet the
845	845	requirements to be considered qualifying education expenses to
846	846	educate a participating student and to provide recommendations
847	847	to the department on how to implement, administer and improve
848	848	the program.
849	849	B. The low-income education opportunity review
850	850	commission shall consist of nine voting members who shall be:
851	851	(1) five parents of participating students and
852	852	represent no fewer than four counties of the state; and
853	853	(2) four New Mexico licensed educators.
854	854	C. The voting members shall be appointed by the
855	855	secretary and shall serve at the pleasure of the secretary.
856	856	The secretary, or the secretary's designee, shall serve as the
857	857	nonvoting chair of the low-income education opportunity review
858	858	.229900.3
859	859	- 16 - underscored material = new
860	860	[bracketed material] = delete
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886	886	commission.
887	887	D. The department may request that the low-income
888	888	education opportunity review commission meet, in person or
889	889	through a virtual or telephonic platform, to:
890	890	(1) determine whether an expenditure from a
891	891	low-income education opportunity account is or was a qualifying
892	892	expense; and
893	893	(2) review appeals of denials of an education
894	894	service provider and make a recommendation to the secretary.
895	895	E. When requested, the low-income education
896	896	opportunity review commission shall, by majority vote,
897	897	recommend to the department:
898	898	(1) if a particular use of funds constitutes a
899	899	qualifying expense; and
900	900	(2) if an education service provider should be
901	901	allowed to receive, or continue receiving, payments from low-
902	902	income education opportunity accounts."
903	903	SECTION 9. A new section of the Public School Code is
904	904	enacted to read:
905	905	"[NEW MATERIAL] REPORT TO LEGISLATURE AND GOVERNOR.--The
906	906	department shall report to the legislature and the governor by
907	907	December 1 of each year on the program and its participants.
908	908	The report shall include the number, grades and ages of
909	909	participating students and where they attend school or receive
910	910	other educational services; the geographic distribution of
911	911	.229900.3
912	912	- 17 - underscored material = new
913	913	[bracketed material] = delete
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939	939	participating students by county; other demographic and
940	940	economic data about participating students and parents; the
941	941	number and locations of education service providers, the
942	942	services they provide and the number of students they serve;
943	943	the total amount of deposits into low-income education
944	944	opportunity accounts and the cost of financial management
945	945	contracts; the total expenditures for education service
946	946	providers and the average cost of educational services being
947	947	provided to participating students, by type of service and
948	948	geographic region; and other information requested by the
949	949	legislature or governor and considered reportable by the
950	950	department."
951	951	SECTION 10. A new section of the Public School Code is
952	952	enacted to read:
953	953	"[NEW MATERIAL] LOW-INCOME EDUCATION OPPORTUNITY ACCOUNT
954	954	FUND--CREATED.--
955	955	A. The "low-income education opportunity account
956	956	fund" is created in the state treasury. The fund consists of
957	957	money appropriated by the legislature, federal money granted to
958	958	the state for the purposes of the fund, income from investment
959	959	of the fund and money otherwise accruing to the fund. Money in
960	960	the fund shall not revert to any other fund at the end of a
961	961	fiscal year. The department shall administer the fund, and
962	962	money in the fund is appropriated to the department to carry
963	963	out the purposes of the Low-Income Education Opportunity
964	964	.229900.3
965	965	- 18 - underscored material = new
966	966	[bracketed material] = delete
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992	992	Account Act.
993	993	B. Money in the fund shall be disbursed on warrants
994	994	signed by the secretary pursuant to vouchers signed by the
995	995	secretary or the secretary's authorized representative."
996	996	SECTION 11. APPROPRIATIONS.--
997	997	A. The following amounts are appropriated from the
998	998	general fund to the low-income education opportunity account
999	999	fund for expenditure in fiscal year 2026 and subsequent fiscal
1000	1000	years for the following purposes:
1001	1001	(1) five hundred eighty thousand dollars
1002	1002	($580,000) for the public education department to administer
1003	1003	the low-income education opportunity account program; and
1004	1004	(2) one hundred million dollars ($100,000,000)
1005	1005	to carry out the purposes of the Low-Income Education
1006	1006	Opportunity Account Act.
1007	1007	B. Any unexpended or unencumbered balance remaining
1008	1008	at the end of a fiscal year shall not revert to the general
1009	1009	fund.
1010	1010	SECTION 12. SEVERABILITY.--If any part or application of
1011	1011	the Low-Income Education Opportunity Account Act is held
1012	1012	invalid, the remainder or its application to other situations
1013	1013	or persons shall not be affected.
1014	1014	- 19 -
1015	1015	.229900.3