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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

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F I S C A L I M P A C T R E P O R T

SPONSOR Nava

ORIGINAL DATE

LAST UPDATED

1/25/2008

2/5/2008 HB

SHORT TITLE New Mexico School For the Arts Act

SB 34/aSEC/aSFC

ANALYST Escudero/Aguilar

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY08

FY09

FY10 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$0.1

$0.1 Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department (PED)

SUMMARY

Synopsis of SFC Amendment

The Senate Finance Committee amendment to Senate Bill 34 strikes the appropriation from the

bill.

The Senate Education Committee Amendment added a new section eight and directed

renumbering of the bill. References to striking “Section nine" refers to that section of the bill

making the appropriation.

Synopsis of SEC Amendment

The Senate Education Committee Amendment inserts into the body of the act:

Senate Bill 34/aSEC/aSFC – Page

2

2

1. On page 1, line 16, after the semicolon insert "REQUIRING PRIVATE FUNDING FOR

ROOM AND BOARD COSTS AND OUTREACH ACTIVITIES;".

2. On page 3, line 6, before the quotation marks insert:

"The school shall be supported by state funds in the same manner as other charter high schools

authorized by the commission.".

3. On page 5, between lines 15 and 16, insert the following new section:

"Section 8. A new section of the Public School Code is enacted to read:

"[NEW MATERIAL

] ROOM AND BOARD COSTS--OUTREACH ACTIVITIES--

PRIVATE FUNDING REQUIRED.--The school shall, either through a foundation or other

private funding sources, obtain gifts, grants and donations to ensure that the school has adequate

revenue to pay for all expenses associated with outreach activities provided for in Section 6 of

the New Mexico School for the Arts Act and for room and board costs for those students who are

not able to pay the full cost of room and board as provided in Section 7 of that act. The school

shall separately account for the costs of outreach activities and room and board and for the

revenue received from private sources to pay those costs. The school shall not use money

received from the state for these purposes. Failure of the school to secure adequate funding for

these purposes shall be grounds for denial or revocation of a charter."".

4. Renumber the succeeding sections accordingly.

SIGNIFICANT ISSUES

This Amendment is adding a new Section entitled, “Room and Board costs-Outreach Activities

and Private Funding Required". This amendment is requiring the school to separately account

for the costs of outreach activities and room and board and for the revenue received from private

sources to pay those costs. Failure of the school to secure adequate funding for these purposes

shall be grounds for denial or revocation of a charter.

Synopsis of Original Bill

Senate Bill 34 appropriates $450 thousand from the general fund for expenditure in FY09 to the

Public Education Department to provide financial support for initial start-up costs, including

planning and outreach Activities for the New Mexico School for the Arts.

The bill would create the New Mexico School for the Arts as a statewide residential charter

school. Provisions in the bill exempt the school from prohibitions on charter school admissions

and enrollment, directs that the school be chartered by the Public Education Department (PEC)

and requires outreach activities throughout the state.

The bill further provides for the school to charge residential students a fee to cover the cost of

room and board, to establish a sliding-fee scale based on a student’s ability to pay for the total

cost of room and board.

Senate Bill 34/aSEC/aSFC – Page

3

3

FISCAL IMPLICATIONS

The appropriation of $450,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY09 shall revert to the

general fund.

SIGNIFICANT ISSUES

The school shall be governed by a board of at least five members constituted as provided in the

school’s application for a charter, prohibits members of the board from serving on the governing

board of any other charter school. The bill includes a provision which expands the current

Section 22-8B-4(O) of the Charter Schools Act language to permit the board to use gifts, grants

and donations to further the purposes of the school and to assist the school in providing free or

reduced-fee room and board for those residential students who cannot pay all or part of the

residential costs.

The school would be free and available to students who have demonstrated artistic abilities and

potential who are state residents and who meet admissions criteria and standards of the school,

with the goal of an equal number of students being admitted from each of the state’s

congressional districts.

PED reports that on January 25, 2007, the Attorney General issued an opinion stating that the

creation of a statewide charter school for the arts would not violate the New Mexico

Constitution. However, various federal laws, including the statutes authorizing the charter

schools grant program, rely on a definition of a charter school that requires that the school admit

students on the basis of a lottery, if more students apply for admission than can be

accommodated. For this reason, this school would not be eligible for any federal charter school

funds.

ADMINISTRATIVE IMPLICATIONS

PED notes that:

“The school would require administrative oversight by the PED’s Charter Schools

Division as required for all state-chartered charter schools. Furthermore, there will be

administrative burdens relative to the disbursement of the start-up appropriation

requested in this bill. In order to defray some of the administrative costs, Section 22-8B-

13(A) (2007) permits the PED to withhold 2% of the school-generated program cost for

administrative support."

TECHNICAL ISSUES

In its analysis, PED submits the following recommendations:

Page 2, Line 21: For consistency with the intent of the bill, the sponsor may consider revising

line 21 as follows: “The commission may charter a the “New Mexico school . . . . “

Page 3, Lines 3 and 4 and Line 25: The bill’s sponsor may consider moving part of Lines 3 and

4 to become sub-section A on Line 25 and re-lettering the existing subsection A as B:

Senate Bill 34/aSEC/aSFC – Page

4

4

Lines 3 and 4: provisions of the Charter Schools Act. Except Subsection K of Section 22-8B-4

NMSA 1978 and Section 22-8B-4.1 NMSA 1978. The

Line 25: A. The school shall be exempt from Subsection K of Section 22-8B-4 NMSA 1978

and Section 22-8B-4.1 NMSA 1978.

The current letter A would then become letter B, the current letter B would become C, and so

forth.

Page 4, Line 13: the bill’s sponsor may consider revising line 13 as follows: “. . . charter schools

division and the commission that includes. . . ." This would eliminate the requirement to submit

an annual report to both the charter schools division and the commission.

On Page 5, Lines 6 and 8: recommend the word “charges" be replaced by “rates".

Page 5, Lines 6 through 9, the bill’s sponsor may consider redirecting the approval process for

room and board charges to the PED Administrative Services Division instead of the PEC

(reference Administrative Implications section above).

LB:PME/bb