SB 178

                                1  SENATE BILL 178
                                2      57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4  George K. Muñoz
                                5
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                                10  AN ACT
                                11   RELATING TO PUBLIC SCHOOL FINANCE; REQUIRING THAT SCHOOL
                                12   DISTRICTS ENROLLING MORE THAN TWO THOUSAND STUDENTS ALLOCATE AT
                                13   LEAST NINETY PERCENT OF THE MONEY A PUBLIC SCHOOL GENERATES
                                14   THROUGH THE STATE EQUALIZATION GUARANTEE DISTRIBUTION TO THAT
                                15   PUBLIC SCHOOL; LIMITING THE UNRESTRICTED CASH BALANCES OF
                                16   SCHOOL DISTRICTS THAT FAIL TO MEET THE ALLOCATION REQUIREMENT;
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                                17   REQUIRING SCHOOL DISTRICTS AND CHARTER SCHOOLS TO USE
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                                18   EVIDENCE-BASED SPENDING PLANS TO IMPROVE ACADEMIC OUTCOMES OF
                                19   AT-RISK STUDENTS; ALLOWING THE PUBLIC EDUCATION DEPARTMENT TO
                                20   INTERVENE IN PUBLIC SCHOOLS THAT FAIL TO MAKE PROGRESS ON
                                21   IMPROVING OUTCOMES.
                                22
                                23   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                24        SECTION 1.   A new section of the Public School Finance Act
                                25   is enacted to read:
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                                1  "[NEW MATERIAL] BUDGETS--PERCENTAGE OF STATE EQUALIZATION
                                2    GUARANTEE DISTRIBUTION TO GENERATING SCHOOLS.--
                                3  A.   For each school district that has a student
                                4    population of more than two thousand, the local school board
                                5    shall:
                                6  (1)   calculate the number of program units that
                                7    are generated by each public school in the school district
                                8    through the state equalization guarantee distribution; and
                                9  (2)   allocate to each public school within the
                                10   school district a minimum of ninety percent of the state
                                11   equalization guarantee distribution generated by that public
                                12   school's program units.
                                13  B.   In any year in which a school district fails to
                                14   meet the allocation requirement required by the provisions of
                                15   this section, that school district shall be subject to the
                                16   following limits on that school district's unrestricted
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                                17   operational cash balance at the end of the fiscal year:
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                                18  (1)   if the current year program cost is less
                                19   than seven million five hundred thousand dollars ($7,500,000),
                                20   eighteen percent of the budgeted expenditures;
                                21  (2)   if the current year program cost is seven
                                22   million five hundred thousand dollars ($7,500,000) or more but
                                23   less than fifteen million dollars ($15,000,000), twelve percent
                                24   of the budgeted expenditures;
                                25  (3)   if the current year program cost is
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                                1    fifteen million dollars ($15,000,000) or more but less than
                                2    thirty-five million dollars ($35,000,000), ten percent of the
                                3    budgeted expenditures;
                                4  (4)   if the current year program cost is
                                5    thirty-five million dollars ($35,000,000) or more but less than
                                6    three hundred million dollars ($300,000,000), eight percent of
                                7    the budgeted expenditures; and
                                8  (5)   if the current year program cost is three
                                9    hundred million dollars ($300,000,000) or more, five percent of
                                10   the budgeted expenditures."
                                11        SECTION 2.    A new section of the Public School Finance Act
                                12   is enacted to read:
                                13        "[NEW MATERIAL] EVIDENCE-BASED SPENDING PLANS TO IMPROVE
                                14   ACADEMIC OUTCOMES FOR AT-RISK STUDENTS.--
                                15  A.   Each school district and charter school shall
                                16   submit a three-year evidence-based spending plan that describes
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                                17   how the funding the school district or charter school receives
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                                18   from the state equalization guarantee distribution will be used
                                19   to provide culturally and linguistically relevant education
                                20   that improves academic outcomes for Native American students,
                                21   low-income students, English learner students and special
                                22   education students at each public school.    The department shall
                                23   provide a tool to assist school districts and charter schools
                                24   in developing an evidence-based spending plan for each public
                                25   school that is aligned to culturally and linguistically
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                                1    relevant goals and metrics.
                                2  B.   The department shall require that school
                                3    districts and charter schools track and report academic
                                4    outcomes tied to program funding for Native American students,
                                5    low-income students, English learner students and special
                                6    education students at each public school.    If adequate
                                7    progress, as determined by the department, for the target
                                8    students at each public school has not been made in a school
                                9    year, the school district shall implement training, reassess
                                10   curriculum and provide high-quality instructional materials as
                                11   deemed appropriate by the department for that public school.
                                12   If a public school has not made adequate progress for at least
                                13   one of the target student groups for three years in a row, as
                                14   determined by the department, the secretary shall contract with
                                15   a level 3A teacher or 3B school administrator, who may have
                                16   recently retired but had held such license, who has expertise
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                                17   in the issues and needs of at-risk student populations and has
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                                18   experience improving academic outcomes for at-risk student
                                19   populations to revamp programming provided to those students,
                                20   including curriculum, instructional material, class scheduling,
                                21   extended time offerings, professional development for evidence-
                                22   or research-based or innovative pedagogical methods and any
                                23   other changes to improve outcomes.
                                24  C.   If a public school has met or exceeded adequate
                                25   progress as determined by the department, the school shall be
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                                1    eligible to receive available discretionary funding for
                                2    enhanced or additional programming for Native American
                                3    students, low-income students, English learner students and
                                4    special education students at that public school."
                                5  SECTION 3.    Section 22-8-13.2 NMSA 1978 (being Laws 2011,
                                6    Chapter 12, Section 1) is amended to read:
                                7  "22-8-13.2.    FINANCIAL REPORTING.--
                                8  A.   Each local superintendent or person in charge of
                                9    the fiscal management of a charter school shall provide
                                10   quarterly reports on the financial position of the school
                                11   district or charter school, as applicable, to the local school
                                12   board [of the school district] or the governing body [of the
                                13   charter school] for use in reviewing the financial status of
                                14   the school district or charter school.    The department shall
                                15   develop the forms to be used for the financial reporting
                                16   required under this section.    The forms shall provide for at
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                                17   least the following:
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                                18  (1)   a report on the budget status of the
                                19   [local] school district or charter school, including the
                                20   approved operating budget for revenues and expenses compared
                                21   with year-to-date actual revenue and expenses;
                                22  (2)   a statement of any budget adjustment
                                23   requests;
                                24  (3)   cash reports, including revenue, expenses,
                                25   temporary loans and cash balances for operational, state and
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                                1    federal grants, capital outlay and debt service funds;
                                2  (4)   voucher reports, including a list of
                                3    issued warrants or checks;
                                4  (5)   reports listing procurement, travel [or]
                                5    and gas card expenses; [and]
                                6  (6)   investment reports; and
                                7  (7)   for school districts with student
                                8    populations of more than two thousand, a report on how the
                                9    school district is allocating the state equalization guarantee
                                10   distribution or other revenue at each public school to improve
                                11   the academic outcomes of Native American students, low-income
                                12   students, English learner students and special education
                                13   students at the public school.
                                14  B.    School districts and charter schools shall post
                                15   the reports required [under] by Subsection A of this section on
                                16   the school district's or charter school's [web site] website.
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                                17  [C.    As used in this section:
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                                18  (1)   "charter school" means a school organized
                                19   as a charter school pursuant to the provisions of the Charter
                                20   Schools Act; and
                                21  (2)   "governing body" means the governing
                                22   structure of a charter school as set forth in the school's
                                23   charter.]"
                                24        SECTION 4.      APPLICABILITY.--The provisions of this act
                                25   apply to the 2026-2027 through 2030-2031 school years.
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                                1  SECTION 5.   DELAYED REPEAL.--Sections 1 and 2 of this act
                                2    are repealed effective July 1, 2031.
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