SB 82
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AN ACT
RELATING TO PUBLIC SCHOOL CAPITAL OUTLAY; EXTENDING THROUGH
FISCAL YEAR 2027 THE PROVISION THAT REDUCES LOCAL SHARES BY
ONE-THIRD FOR SOME SCHOOL DISTRICTS AND ONE-HALF FOR CERTAIN
SMALL SCHOOL DISTRICTS; ELIMINATING SOME OF THE CRITERIA THE
PUBLIC SCHOOL CAPITAL OUTLAY COUNCIL IS REQUIRED TO CONSIDER
BEFORE MAKING AN ADJUSTMENT TO A SCHOOL DISTRICT'S LOCAL
SHARE; MAKING CONFORMING AMENDMENTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 22-24-5 NMSA 1978 (being Laws 1975,
Chapter 235, Section 5, as amended) is amended to read:
"22-24-5. PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS--
APPLICATION--GRANT ASSISTANCE.--
A. Applications for grant assistance, approval of
applications, prioritization of projects and grant awards
shall be conducted pursuant to the provisions of this
section.
B. Except as provided in Sections 22-24-4.3,
22-24-5.4 and 22-24-5.6 NMSA 1978, the following provisions
govern grant assistance from the fund for a public school
capital outlay project not wholly funded pursuant to
Section 22-24-4.1 NMSA 1978:
(1) all school districts are eligible to
apply for funding from the fund, regardless of percentage of SB 82
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indebtedness;
(2) priorities for funding shall be
determined by using the statewide adequacy standards
developed pursuant to Subsection C of this section; provided
that:
(a) the council shall apply the
standards to charter schools to the same extent that they are
applied to other public schools;
(b) the council may award grants
annually to school districts for the purpose of repairing,
renovating or replacing public school building systems in
existing buildings as identified in Section 22-24-4.6
NMSA 1978;
(c) the council shall adopt and apply
adequacy standards appropriate to the unique needs of the
constitutional special schools; and
(d) in an emergency in which the health
or safety of students or school personnel is at immediate
risk or in which there is a threat of significant property
damage, the council may award grant assistance for a project
using criteria other than the statewide adequacy standards;
(3) the council shall establish criteria to
be used in public school capital outlay projects that receive
grant assistance pursuant to the Public School Capital
Outlay Act. In establishing the criteria, the council shall SB 82
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consider:
(a) the feasibility of using design,
build and finance arrangements for public school capital
outlay projects;
(b) the potential use of more durable
construction materials that may reduce long-term operating
costs;
(c) concepts that promote efficient but
flexible utilization of space; and
(d) any other financing or construction
concept that may maximize the dollar effect of the state
grant assistance;
(4) no more than ten percent of the combined
total of grants in a funding cycle shall be used for
retrofitting existing facilities for technology
infrastructure;
(5) no later than May 1 of each calendar
year, the phase two formula value shall be calculated for
each school district in accordance with the following
procedure:
(a) the sum of the final prior five
years net taxable value for a school district multiplied by
nine ten-thousandths for that school district is calculated
for each school district;
(b) the maximum allowable gross square SB 82
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foot per student multiplied by the replacement cost per
square foot divided by forty-five is calculated for each
school district;
(c) the value calculated pursuant to
Subparagraph (a) of this paragraph divided by the value
calculated pursuant to Subparagraph (b) of this paragraph is
calculated for each school district;
(d) in those instances in which the
calculation pursuant to Subparagraph (c) of this paragraph
yields a value equal to or greater than one, the phase two
formula value shall be zero for the subject school district;
(e) in those instances in which the
calculation pursuant to Subparagraph (c) of this paragraph
yields a value of ninety-hundredths or more but less than
one, the phase two formula value shall be one minus the value
calculated in Subparagraph (c) of this paragraph; and
(f) in those instances in which the
calculation pursuant to Subparagraph (c) of this paragraph
yields a value less than ninety-hundredths, the phase two
formula value shall be one minus the value calculated in
Subparagraph (c) of this paragraph plus the school district
population density factor;
(6) the state share of a project approved by
the council shall be funded within available resources
pursuant to the provisions of this paragraph. Except as SB 82
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provided in Section 22-24-5.7 NMSA 1978 and except as
adjusted pursuant to Paragraph (8), (9) or (10) of this
subsection, the amount to be distributed from the fund for an
approved project shall equal the total project cost
multiplied by the following percentage, except that in no
case shall the state share be less than six percent:
(a) for fiscal year 2024 through fiscal
year 2027, the percentage shall be the phase two formula
value plus a percentage equal to one-third of the difference
between one and the phase two formula value; provided that,
for school districts with fewer than 200 MEM, the percentage
shall be the phase two formula value plus a percentage equal
to one-half of the difference between one and the phase two
formula; and
(b) for fiscal year 2028 and
thereafter, the percentage shall be the phase two formula
value;
(7) as used in this subsection:
(a) "governmental entity" includes an
Indian nation, tribe or pueblo;
(b) "phase two formula value" for a
state-chartered charter school means the phase two formula
value calculated pursuant to Paragraph (5) of this subsection
for the school district in which the state-chartered charter
school is physically located; SB 82
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(c) "subject school district" means the
school district that has submitted the application for
funding and in which the approved public school capital
outlay project will be located; and
(d) "total project cost" means the
total amount necessary to complete the public school capital
outlay project less any insurance reimbursement received by
the school district for the project;
(8) the amount calculated pursuant to
Paragraph (6) of this subsection may be increased by an
additional five percent if the council finds that the subject
school district has been exemplary in implementing and
maintaining a preventive maintenance program. The council
shall adopt such rules as are necessary to implement the
provisions of this paragraph;
(9) the council may adjust the amount of a
school district's local share otherwise required if it
determines that the school district has made a good-faith
effort to use all of its local resources. Before making any
adjustment to the local share, the council shall consider
whether:
(a) the school district has
insufficient bonding capacity over the next four years to
provide the local match necessary to complete the project
and, for all educational purposes, has a residential property SB 82
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tax rate of at least ten dollars ($10.00) on each one
thousand dollars ($1,000) of taxable value, as measured by
the sum of all rates imposed by resolution of the local
school board plus rates set to pay interest and principal on
outstanding school district general obligation bonds; or
(b) the school district has fewer than
an average of one thousand five hundred full-time-equivalent
students on the second and third reporting dates of the prior
school year and, for all educational purposes, has a
residential property tax rate of at least seven dollars
($7.00) on each one thousand dollars ($1,000) of taxable
value, as measured by the sum of all rates imposed by
resolution of the local school board plus rates set to pay
interest and principal on outstanding school district general
obligation bonds;
(10) the local match for the constitutional
special schools shall be set at fifty percent for projects
that qualify under the educational adequacy category and one
hundred percent for projects that qualify in the support
spaces category; provided that the council may adjust or
waive the amount of any direct appropriation offset to or
local share required for the constitutional special schools
if an applicant constitutional special school has
insufficient or no local resources available; and
(11) no application for grant assistance SB 82
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from the fund shall be approved unless the council determines
that:
(a) the public school capital outlay
project is needed and included in the school district's
five-year facilities plan among its top priorities;
(b) the school district has used its
capital resources in a prudent manner;
(c) the school district has provided
insurance for buildings of the school district in accordance
with the provisions of Section 13-5-3 NMSA 1978;
(d) the school district has submitted a
five-year facilities plan that includes: 1) enrollment
projections; 2) a current preventive maintenance plan that
has been approved by the council pursuant to Section
22-24-5.3 NMSA 1978 and that is followed by each public
school in the district; 3) the capital needs of charter
schools located in the school district; and 4) projections
for the facilities needed in order to maintain a full-day
kindergarten program;
(e) the school district is willing
and able to pay any portion of the total cost of the
public school capital outlay project that, according to
Paragraph (6), (8) or (9) of this subsection, is not funded
with grant assistance from the fund;
(f) the application includes the SB 82
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capital needs of any charter school located in the school
district or the school district has shown that the facilities
of the charter school have a smaller deviation from the
statewide adequacy standards than other district facilities
included in the application; and
(g) the school district has agreed, in
writing, to comply with any reporting requirements or
conditions imposed by the council pursuant to
Section 22-24-5.1 NMSA 1978.
C. After consulting with the public school capital
outlay oversight task force and other experts, the council
shall regularly review and update statewide adequacy
standards applicable to all school districts. The standards
shall establish the acceptable level for the physical
condition and capacity of buildings, the educational
suitability of facilities, the need for career-technical
education facilities or classrooms and the need for education
technology infrastructure. Except as otherwise provided in
the Public School Capital Outlay Act, the amount of
outstanding deviation from the standards shall be used by the
council in evaluating and prioritizing public school capital
outlay projects.
D. The acquisition of a facility by a school
district or charter school pursuant to a financing agreement
that provides for lease payments with an option to purchase SB 82
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for a price that is reduced according to lease payments made
may be considered a public school capital outlay project and
eligible for grant assistance under this section pursuant to
the following criteria:
(1) no grant shall be awarded unless the
council determines that, at the time of exercising the option
to purchase the facility by the school district or charter
school, the facility will equal or exceed the statewide
adequacy standards and the building standards for public
school facilities;
(2) no grant shall be awarded unless the
school district and the need for the facility meet all of the
requirements for grant assistance pursuant to the Public
School Capital Outlay Act;
(3) the total project cost shall equal the
total payments that would be due under the agreement if the
school district or charter school would eventually acquire
title to the facility;
(4) the portion of the total project cost to
be paid from the fund may be awarded as one grant, but
disbursements from the fund shall be made from time to time
as lease payments become due;
(5) the portion of the total project cost to
be paid by the school district or charter school may be paid
from time to time as lease payments become due; and SB 82
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(6) neither a grant award nor any provision
of the Public School Capital Outlay Act creates a legal
obligation for the school district or charter school to
continue the lease from year to year or to purchase the
facility.
E. In order to encourage private capital
investment in the construction of public school facilities,
the purchase of a privately owned school facility that is, at
the time of application, in use by a school district may be
considered a public school capital outlay project and
eligible for grant assistance pursuant to this section if the
council finds that:
(1) at the time of the initial use by the
school district, the facility to be purchased equaled or
exceeded the statewide adequacy standards and the building
standards for public school facilities;
(2) at the time of application, attendance
at the facility to be purchased is at seventy-five percent or
greater of design capacity and the attendance at other
schools in the school district that the students at the
facility would otherwise attend is at eighty-five percent or
greater of design capacity; and
(3) the school district and the capital
outlay project meet all of the requirements for grant
assistance pursuant to the Public School Capital Outlay Act; SB 82
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provided that, when determining the deviation from the
statewide adequacy standards for the purposes of evaluating
and prioritizing the project, the students using the facility
shall be deemed to be attending other schools in the school
district.
F. It is the intent of the legislature that grant
assistance made pursuant to this section allows every school
district to meet the standards developed pursuant to
Subsection C of this section; provided, however, that nothing
in the Public School Capital Outlay Act or the development of
standards pursuant to that act prohibits a school district
from using other funds available to the district to exceed
the statewide adequacy standards.
G. Upon request, the council shall work with, and
provide assistance and information to, the public school
capital outlay oversight task force.
H. The council may establish committees or task
forces, not necessarily consisting of council members, and
may use the committees or task forces, as well as existing
agencies or organizations, to conduct studies, conduct
surveys, submit recommendations or otherwise contribute
expertise from the public schools, programs, interest groups
and segments of society most concerned with a particular
aspect of the council's work.
I. Upon the recommendation of the authority, the SB 82
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council shall develop building standards for public school
facilities and shall promulgate other such rules as are
necessary to carry out the provisions of the Public School
Capital Outlay Act.
J. No later than December 15 of each year, the
council shall prepare a report summarizing its activities
during the previous fiscal year. The report shall describe
in detail all projects funded, the progress of projects
previously funded but not completed, the criteria used to
prioritize and fund projects and all other council actions.
The report shall be submitted to the public education
commission, the governor, the legislative finance committee,
the legislative education study committee and the
legislature.
K. For any school district that received a
standards- or systems-based award from the council in fiscal
year 2023, the state share for any future phase of the
project for which funding has not yet been awarded shall be
the amount calculated pursuant to Subsection B of this
section for fiscal year 2024, regardless of the state share
at the time of the initial award.
L. As used in this section:
(1) "MEM" means membership; and
(2) "membership" means the total enrollment
of qualified students on the current roll of a class or school SB 82
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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 students in need of
early intervention and habitual truants the school district is
required to intervene with and keep in an educational
setting."