HB 63/a
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AN ACT
RELATING TO PUBLIC SCHOOL FINANCE; MAKING CHANGES TO THE
PUBLIC SCHOOL FUNDING FORMULA; INCREASING THE BASIC PROGRAM
UNIT FOR SIXTH THROUGH TWELFTH GRADES; DEFINING THE FAMILY
INCOME INDEX RATE; CHANGING THE AT-RISK PROGRAM UNIT;
CALCULATING THE AT-RISK INDEX FOR CHARTER SCHOOLS ON THEIR
MEMBERSHIP AFTER THE FIRST YEAR OF OPERATION; CREATING AN
ENGLISH LEARNER PROGRAM UNIT; PROVIDING A HOLD HARMLESS
PROVISION FOR FORMULA CHANGES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 22-8-2 NMSA 1978 (being Laws 1978,
Chapter 128, Section 3, as amended by Laws 2019, Chapter 206,
Section 6 and by Laws 2019, Chapter 207, Section 6) 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
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withdrawn from the public school, include students absent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 HB 63/a
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days; provided that withdrawals do not include students who
are in need of intervention or who are chronically or
excessively absent;
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. "family income index rate" means the percentage
of students in a school district or charter school that is
identified as either extremely low income or very low income
by the family income index;
H. "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 HB 63/a
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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;
I. "operating budget" means the annual financial
plan and educational plan required to be submitted by a local
school board or governing body of a state-chartered charter
school;
J. "performance measure" means a quantitative
indicator used to assess the output or outcome of an approved
program;
K. "performance target" means the expected level
of performance of a program's performance measure;
L. "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;
M. "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 MEM, full-time-equivalent
MEM, teacher, classroom or public school;
N. "program unit" is the product of the program
element multiplied by the applicable cost differential
factor;
O. "public money" or "public funds" means all HB 63/a
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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;
P. "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) in terms of age and other criteria:
(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;
(c) except as provided in Subparagraph
(d) of this paragraph, has not reached the student's twenty-
second birthday on the first day of the school year; or
(d) has reached the student's twenty-
second birthday on the first day of the 2019-2020 school
year, is counted in a school district's or charter school's
MEM on the third reporting date of the 2018-2019 school year,
has been continuously enrolled in the same public school
since that reporting date and is still enrolled in that HB 63/a
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school;
Q. "rural population rate" means that proportion
of the total population within a school district's geographic
boundaries that lives in a rural area and not in an urban
area as defined by the United States census bureau;
R. "staffing cost multiplier" means the teacher
cost index; and
S. "state superintendent" means the secretary of
public education or the secretary's designee."
SECTION 2. Section 22-8-6.1 NMSA 1978 (being Laws 1993,
Chapter 227, Section 8, as amended by Laws 2019, Chapter 206,
Section 9 and by Laws 2019, Chapter 207, Section 9) is
amended to read:
"22-8-6.1. CHARTER SCHOOL OPERATING BUDGETS--MAXIMUM
MEM.--
A. Each state-chartered charter school shall
submit to the charter schools division of the department a
school-based operating budget. The operating budget shall be
submitted to the division for approval or amendment pursuant
to the Public School Finance Act and the Charter Schools Act.
Thereafter, the operating budget shall be submitted to the
commission for review.
B. Each locally chartered charter school shall
submit to the local school board a school-based operating
budget for approval or amendment. The approval or amendment HB 63/a
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authority of the local school board relative to the charter
school operating budget is limited to ensuring that sound
fiscal practices are followed in the development of the
operating budget and that the charter school operating 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 financial budget or over
any item in the educational plan but shall approve or
disapprove the operating budget in its entirety. Upon final
approval of the charter school operating budget by the local
school board, the individual charter school operating 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.
C. For its first year of operation, a charter
school's operating budget shall be based on the projected
number of program units generated by the school and its
students using the at-risk index, the English learner three-
year average rate and the staffing cost multiplier of the
school district in which the charter school is located, and
the charter school's operating budget shall be adjusted using
the qualified MEM on the first reporting date of the current
school year. For its second and third fiscal year of
operation, a charter school's operating budget shall be based
on the number of program units generated by the school and HB 63/a
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its students using the average of MEM on the second and third
reporting dates of the prior year, the at-risk index and
English learner three-year average rate of the school
district in which the charter school is located and the
charter school's staffing cost multiplier. For its fourth
and subsequent fiscal years of operation, a charter school's
operating budget shall be based on the number of program
units generated by the charter school and its students using
the average of the MEM on the second and third reporting
dates of the prior year, the charter school's at-risk index,
the charter school's English learner three-year average rate
and the charter school's staffing cost multiplier."
SECTION 3. 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) and
(2) in this subsection by the staffing cost multiplier and
adding the program units itemized as Paragraphs (3) through
(16) in this subsection. The itemized program units are as
follows:
(1) early childhood education;
(2) basic education; HB 63/a
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(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) elementary physical education;
(7) size adjustment;
(8) at-risk;
(9) enrollment growth or new district
adjustment;
(10) special education units derived from
membership in class D special education programs in private,
nonsectarian, nonprofit training centers;
(11) national board for professional
teaching standards certification;
(12) home school student;
(13) home school student activities;
(14) charter school student activities;
(15) K-12 plus; and
(16) English learners.
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 HB 63/a
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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 pursuant to 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 further that
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."
SECTION 4. Section 22-8-20 NMSA 1978 (being Laws 1991,
Chapter 85, Section 3, as amended by Laws 1993, Chapter 2,
Section 1 and by Laws 1993, Chapter 226, Sections 21 and 22
and also by Laws 1993, Chapter 228, Sections 2 and 3) is
amended to read:
"22-8-20. BASIC PROGRAM UNITS.--The number of basic
program units is determined by multiplying the basic program
MEM in each grade by the corresponding cost differential
factor as follows:
Grades Cost Differential Factor
1 1.2
2 and 3 1.18
4 and 5 1.045 HB 63/a
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6 through 12 1.30."
SECTION 5. 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 or charter school is eligible
for additional program units if it establishes within its
department-approved educational plan identified services to
assist students to reach their full academic potential. A
school district or charter school receiving additional at-
risk program units shall include a report of specified
services implemented to improve the academic success of at-
risk students. The report shall identify the ways in which
the school district, charter school and individual public
schools use funding generated through the at-risk index and
the intended outcomes. For purposes of this section, "at-
risk student" means a student who meets the criteria to be
included in the calculation of the three-year average rate in
Subsection B of this section. The number of additional units
to which a school district or charter school 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 or charter school
membership, including early childhood education, full-time-
equivalent membership and special education membership and
where the at-risk index is calculated in the following HB 63/a
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manner:
Three-Year Average Rate x 0.40 = At-Risk Index.
B. To calculate the three-year average rate, the
department shall compute the preceding three-year average of
the school district's or charter school's family income index
rate.
C. The department shall recalculate the at-risk
index for each school district and charter school every year.
D. For purposes of this section, "services" means
research-based or evidence-based social, emotional or
academic interventions, such as:
(1) case management, tutoring, reading
interventions and after-school programs that are delivered by
social workers, counselors, teachers or other professional
staff;
(2) culturally relevant professional and
curriculum development, including those necessary to support
language acquisition, bilingual and multicultural education;
(3) additional compensation strategies for
high-need schools;
(4) whole school interventions, including
school-based health centers and community schools;
(5) educational programming intended to
improve career and college readiness of at-risk students,
including dual or concurrent enrollment, career and technical HB 63/a
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education, guidance counseling services and coordination with
post-secondary institutions; and
(6) services to engage and support parents
and families in the education of students."
SECTION 6. A new section of the Public School Finance
Act, Section 22-8-23.15 NMSA 1978, is enacted to read:
"22-8-23.15. ENGLISH LEARNER PROGRAM UNITS.--
A. A school district or charter school is eligible
for additional program units if it establishes identified
services to assist English learners to attain English
language proficiency in a reasonable period of time. The
number of additional units to which a school district or
charter school is entitled pursuant to this section is
computed in the following manner:
Three-Year Average Rate x MEM x 0.33 = Units.
B. To calculate the three-year average rate, the
department shall compute the preceding three-year average of
the school district's or charter school's percentage of MEM
that is classified as an English learner, using criteria
established by the office for civil rights of the United
States department of education. The three-year average rate
shall include students who have been reclassified as fluent
English proficient in the preceding two school years, as
determined by the department on the department-approved
English language proficiency assessment. HB 63/a
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C. The department shall recalculate the three-year
average rate for each school district and charter school
every year.
D. For the purposes of this section, "services"
means research- or evidence-based social, emotional or
academic interventions designed to improve student
achievement and sustain student progress, such as:
(1) culturally sustaining case management,
tutoring, language development interventions, out-of-school
time programs and student service-leadership development
opportunities;
(2) culturally sustaining professional
learning, coursework and curriculum development
opportunities;
(3) culturally and grade-level-appropriate
instructional materials;
(4) additional compensation strategies that
support high-quality, culturally and linguistically
sustaining instruction;
(5) innovative staffing, scheduling and
programming strategies that promote collaborative
instruction; and
(6) services to support and partner with
parents and families in the long-term success of students."
SECTION 7. TEMPORARY PROVISION--PROTECTION FROM PROGRAM HB 63/a
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COST REDUCTIONS.--
A. Using money appropriated by the legislature for
fiscal year 2026, the public education department shall
supplement a school district's or charter school's calculated
program cost in that fiscal year:
(1) if, for fiscal year 2026, the school
district's or charter school's calculated program units are
less than its final program units in fiscal year 2025, if the
reduction is attributable to the implementation of Sections 2
through 6 of this act, an amount equal to one hundred percent
of the reduction attributable to those sections; and
(2) if, in fiscal year 2026, the
appropriation for the purpose of implementing this subsection
is insufficient to supplement school districts and charter
schools in accordance with Paragraph (1) of this subsection,
then in an amount equal to the school district's or charter
school's prorated share of the total appropriation.
B. On or before January 31, 2026, the public
education department shall submit a report to the legislative
education study committee and the legislative finance
committee that states the need for a supplemental
appropriation for fiscal year 2026 that shows:
(1) the total sum needed to supplement
school districts and charter schools in accordance with this
section; and HB 63/a
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(2) the supplemental amount for each of
those school districts and charter schools.
SECTION 8. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.