HB0622

HOUSE BILL 622

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Mimi Stewart

AN ACT

RELATING TO PUBLIC SCHOOLS; MAKING CHARTER SCHOOLS LOCAL EDUCATIONAL AGENCIES; CLARIFYING THE STATUS OF CHARTER SCHOOLS VIS A VIS FEDERAL AND STATE LAWS; CLARIFYING WHO MAY START A CHARTER SCHOOL; REQUIRING ALL CHARTERS TO BE STATE CHARTERED; CLARIFYING THAT A GOVERNING BODY AND CHARTER SCHOOL EMPLOYEES MUST MANAGE AND ADMINISTER THE SCHOOL AND ITS EDUCATIONAL PROGRAM; PROVIDING FOR APPEALS FROM DECISIONS OF THE PUBLIC EDUCATION COMMISSION; TRANSFERRING THE CHARTER SCHOOLS DIVISION OF THE PUBLIC EDUCATION DEPARTMENT TO THE COMMISSION; REQUIRING DATA-SHARING AGREEMENTS BETWEEN THE COMMISSION AND THE DEPARTMENT; TRANSFERRING FUNCTIONS, APPROPRIATIONS, MONEY, RECORDS, OTHER PROPERTY, CONTRACTUAL OBLIGATIONS AND STATUTORY REFERENCES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 22-8B-2 NMSA 1978 (being Laws 1999, Chapter 281, Section 2, as amended) is amended to read:

"22-8B-2. DEFINITIONS.--As used in the Charter Schools Act:

A. "charter school" means a conversion school or start-up school authorized by the [chartering authority] commission to operate as a public school;

[B. "chartering authority" means either a local school board or the commission;

C. "commission" means the public education commission;

D.] B. "conversion school" means an existing public school within a school district that was authorized by a local school board to become a charter school prior to July 1, 2007;

[E.] C. "division" means the charter schools division of the [department] commission;

[F.] D. "governing body" means the governing structure of a charter school as set forth in the school's charter; and

[G.] E. "start-up school" means a public school developed by one or more parents, teachers or community members authorized by the [chartering authority] commission to become a charter school."

SECTION 2. Section 22-8B-3 NMSA 1978 (being Laws 1999, Chapter 281, Section 3, as amended) is amended to read:

"22-8B-3. PURPOSE.--The Charter Schools Act is enacted to enable individual schools to structure their educational curriculum to encourage the use of different and innovative teaching methods that are based on reliable research and effective practices or have been replicated successfully in schools with diverse characteristics; to allow the development of different and innovative forms of measuring student learning and achievement; to address the needs of all students, including those determined to be at risk; to create new professional opportunities for teachers, including the opportunity to be responsible for the learning program at the school site; to improve student achievement; to provide parents and students with an educational alternative to create new, innovative and more flexible ways of educating children within the public school system; to encourage parental and community involvement in the public school system; to develop and use site-based budgeting; [and] to hold charter schools accountable for meeting the department's educational standards and fiscal requirements; and to comply with federal and state laws."

SECTION 3. Section 22-8B-4 NMSA 1978 (being Laws 1999, Chapter 281, Section 4, as amended) is amended to read:

"22-8B-4. CHARTER SCHOOLS' RIGHTS AND RESPONSIBILITIES--OPERATION.--

A. A charter school [shall be] is subject to all federal and state laws and constitutional provisions prohibiting discrimination on the basis of disability, physical or mental handicap, serious medical condition, race, creed, color, sex, gender identity, sexual orientation, spousal affiliation, national origin, religion, ancestry or need for special education services.

B. A charter school is subject to all federal and state laws pertaining to educating students with disabilities.

[B.] C. A charter school shall be governed by a governing body in the manner set forth in the charter contract; provided that a governing body shall have at least five members, all of whom are residents of New Mexico; and provided further that no member of a governing body for a charter school that is initially approved on or after July 1, 2005 or whose charter is renewed on or after July 1, 2005 shall serve on the governing body of another charter school. No member of a local school board shall be a member of a governing body for a charter school or employed in any capacity by [a locally chartered] another charter school [located within the local school board's school district] during the term of office for which the member was elected or appointed.

[C.] D. A charter school shall be responsible for: (1) its own operation, including preparation of a budget, subject to audits pursuant to the Audit Act; and

(2) contracting for services and personnel matters.

E. A charter school is an independent local educational agency for purposes of the federal Individuals with Disabilities Education Act.

[D.] F. A charter school may contract with a school district, a university or college, the state, another political subdivision of the state, the federal government or one of its agencies, a tribal government or any other third party for the use of a facility, its operation and maintenance and the provision of any service or activity that the charter school is required to perform in order to carry out the educational program described in its charter contract. Facilities used by a charter school shall meet the standards required pursuant to Section 22-8B-4.2 NMSA 1978.

[E.] G. A conversion school chartered before July 1, 2007 may choose to continue using the school district facilities and equipment it had been using prior to conversion, subject to the provisions of Subsection [F] H of this section.

[F.] H. The school district in which a charter school is geographically located shall provide a charter school with available facilities for the school's operations unless the facilities are currently used for other educational purposes. An agreement for the use of school district facilities by a charter school may provide for reasonable lease payments; provided that the payments do not exceed the sum of the lease reimbursement rate provided in Subparagraph (b) of Paragraph (1) of Subsection I of Section 22-24-4 NMSA 1978 plus any reimbursement for actual direct costs incurred by the school district in providing the facilities; and provided further that any lease payments received by a school district may be retained by the school district and shall not be considered to be cash balances in any calculation pursuant to Section 22-8-41 NMSA 1978. The available facilities provided by a school district to a charter school shall meet all occupancy standards as specified by the public school capital outlay council. As used in this subsection, "other educational purposes" includes health clinics, daycare centers, teacher training centers, school district administration functions and other ancillary services related to a school district's functions and operations.

[G.] I. A [locally chartered] charter school may pay the costs of operation and maintenance of its facilities or may contract with the school district to provide facility operation and maintenance services.

[H. Locally chartered] J. Charter school facilities are eligible for state and local capital outlay funds and shall be included in the school district's five-year facilities plan.

[I.] K. A [locally chartered] charter school [shall] may negotiate with a school district to provide transportation to students eligible for transportation under the provisions of the Public School Code. The school district, in conjunction with the charter school, may establish a limit for student transportation to and from the charter school site not to extend beyond the school district boundary.

[J.] L. A charter school shall be a nonsectarian, nonreligious and non-home-based public school and shall not be managed or administered by a private entity or allow its educational program to be managed or administered by a private entity.

[K.] M. Except as otherwise provided in the Public School Code, a charter school shall not charge tuition or have admission requirements.

[L.] N. With the approval of the [chartering authority] commission, a single charter school may maintain separate facilities at two or more locations within the same school district; but, for purposes of calculating program units pursuant to the Public School Finance Act, the separate facilities shall be treated together as one school.

[M.] O. A charter school shall be subject to the provisions of Section 22-2-8 NMSA 1978, [and] the Assessment and Accountability Act and the Audit Act.

[N.] P. Within constitutional and statutory limits, a charter school may acquire and dispose of property; provided that, upon termination of the charter, all assets of the [locally chartered] charter school shall revert to the [local school board and all assets of the state-chartered charter school shall revert to the] state, except that if all or any portion of a [state-chartered] charter school facility is financed with the proceeds of general obligation bonds issued by a local school board, the facility shall revert to the local school board.

[O.] Q. The governing body of a charter school may accept or reject any charitable gift, grant, devise or bequest; provided that no such gift, grant, devise or bequest shall be accepted if subject to any condition contrary to law or to the terms of the charter. The particular gift, grant, devise or bequest shall be considered an asset of the charter school to which it is given.

[P.] R. The governing body may contract and sue and be sued. A local school board shall not be liable for any acts or omissions of the charter school.

[Q.] S. A charter school shall comply with all state and federal health and safety requirements applicable to public schools, including those health and safety codes relating to educational building occupancy.

[R.] T. A charter school is a public school that may contract with a school district or other party for provision of financial management, food services, transportation, facilities, education-related services or other services; provided that a charter school shall not contract in such a manner that the administration is not responsible for the day-to-day operations of the charter school and the governing body is not responsible for the development and implementation by employees of the charter school of school and educational policies. The governing body shall not contract with a for-profit entity for the management or administration of the charter school or its educational program.

[S.] U. To enable [state-chartered] charter schools to submit required data to the department, an accountability data system shall be maintained by the department.

[T.] V. A charter school shall comply with all applicable state and federal laws and rules related to providing special education services. Charter school students with disabilities and their parents retain all rights under the federal Individuals with Disabilities Education Act and its implementing state and federal rules. Each charter school is responsible for identifying, evaluating and offering a free appropriate public education to all eligible children who are accepted for enrollment in that charter school. The [state-chartered] charter school, as a local educational agency, shall assume responsibility for determining students' needs for special education and related services. The division may promulgate rules to implement the requirements of this subsection."

SECTION 4. Section 22-8B-5 NMSA 1978 (being Laws 1999, Chapter 281, Section 5, as amended) is amended to read:

"22-8B-5. CHARTER SCHOOLS--STATUS--LOCAL SCHOOL BOARD AUTHORITY.--

[A. The local school board may waive only locally imposed school district requirements for locally chartered charter schools.

B.] A. A [state-chartered] charter school is exempt from school district requirements. A [state-chartered] charter school is responsible for developing its own written policies and procedures in accordance with this section.

[C.] B. The department shall waive requirements or rules and provisions of the Public School Code pertaining to individual class load, teaching load, length of the school day, staffing patterns, subject areas, purchase of instructional material, evaluation standards for school personnel, school principal duties and driver education. The department may waive requirements or rules and provisions of the Public School Code pertaining to graduation requirements. Any waivers granted pursuant to this section shall be for the term of the charter granted [but may be] unless suspended or revoked earlier by the department.

[D.] C. A charter school shall be a public school accredited by the department and shall be accountable to the [chartering authority] commission for purposes of ensuring compliance with applicable laws, rules and charter provisions.

[E.] D. A local school board shall not require any employee of the school district to be employed in a charter school.

[F.] E. A local school board shall not require any student residing within the geographic boundary of its district to enroll in a charter school.

[G.] F. A student who is suspended or expelled from a charter school shall be deemed to be suspended or expelled from the school district in which the student resides."

SECTION 5. Section 22-8B-5.2 NMSA 1978 (being Laws 2011, Chapter 14, Section 7) is amended to read:

"22-8B-5.2. GOVERNING BODY CONFLICTS OF INTEREST.--

A. A person shall not serve as a member of a governing body of a charter school if the person or an immediate family member of the person is an owner, agent of, contractor with or otherwise has a financial interest in [a for-profit or nonprofit] an entity with which the charter school contracts directly for professional services, goods or facilities. A violation of this subsection renders the contract between the person or the person's immediate family member and the charter school voidable at the option of the [chartering authority] commission, the department or the governing body. A person who knowingly violates this subsection may be individually liable to the charter school for any financial damage caused by the violation.

B. No member of a governing body or employee, officer or agent of a charter school shall participate in selecting, awarding or administering a contract with the charter school if a conflict of interest exists. A conflict of interest exists when the member, employee, officer or agent or an immediate family member of the member, employee, officer or agent has a financial interest in the entity with which the charter school is contracting. A violation of this subsection renders the contract voidable.

C. Any employee, agent or board member of the [chartering authority] commission who participates in the initial review, approval, ongoing oversight, evaluation or charter renewal process of a charter school is ineligible to serve on the governing body of the charter school chartered by the [chartering authority] commission.

D. As used in this section, "immediate family member" means spouse, father, father-in-law, mother, mother-in-law, son, son-in-law, daughter, daughter-in-law, brother, brother-in-law, sister, sister-in-law or any other relative who is financially supported."

SECTION 6. Section 22-8B-5.3 NMSA 1978 (being Laws 2011, Chapter 14, Section 8) is amended to read:

"22-8B-5.3. [CHARTERING AUTHORITY] COMMISSION--POWERS--DUTIES--LIABILITY.--[A chartering authority] The commission shall:

A. evaluate charter applications;

B. actively pursue the [utilization] use of charter schools to satisfy identified education needs and promote a diversity of educational choices;

C. approve charter applications that meet the requirements of the Charter Schools Act;

D. decline to approve charter applications that fail to meet the requirements of the Charter Schools Act or are otherwise inadequate;

E. negotiate and execute, in good faith, charter contracts that meet the requirements of the Charter Schools Act with each approved charter school;

F. monitor, in accordance with the requirements of the Charter Schools Act and the terms of the charter contract, the performance and legal compliance of charter schools under [their] its authority;

G. determine whether a charter school merits suspension, revocation or nonrenewal; and

H. develop and maintain chartering policies and practices consistent with nationally recognized principles and standards for quality charter authorizing in all major areas of authorizing, including:

(1) organizational capacity and infrastructure;

(2) evaluating charter applications;

(3) performance contracting;

(4) charter school oversight and evaluation; and

(5) charter school suspension, revocation and renewal processes."

SECTION 7. Section 22-8B-6 NMSA 1978 (being Laws 1999, Chapter 281, Section 6, as amended) is amended to read:

"22-8B-6. CHARTER SCHOOL REQUIREMENTS--APPLICATION PROCESS--AUTHORIZATION--STATE BOARD OF FINANCE DESIGNATION

REQUIRED--PUBLIC HEARINGS--SUBCOMMITTEES.--

[A. A local school board has the authority to approve the establishment of a charter school within the school district in which it is located.

B.] A. No later than the second Tuesday of January of the year in which an application will be filed, the organizers of a proposed charter school shall provide written notification to the commission and the school district in which the charter school is proposed to be located of their intent to establish a charter school. Failure to notify may result in an application not being accepted.

[C.] B. A charter school applicant shall apply to [either a local school board or] the commission for a charter. If an application is submitted, [to a chartering authority, it] the commission must process the application. Applications for initial charters shall be submitted between June 1 and July 1 to be eligible for consideration for the following fiscal year; provided that the July 1 deadline may be waived upon agreement of the applicant and the [chartering authority] commission.

[D.] C. An application shall include the total number of grades the charter school proposes to provide, either immediately or phased. A charter school may decrease the number of grades it eventually offers, but it shall not increase the number of grades or the total number of students proposed to be served in each grade.

[E.] D. An application shall include a detailed description of the charter school's projected facility needs, including projected requests for capital outlay assistance that have been approved by the director of the public school facilities authority or the director's designee. The director shall respond to a written request for review from a charter applicant within forty-five days of the request.

[F.] E. An application may be made by one or more teachers, parents or community members or by a public post-secondary educational institution [or nonprofit organization]. Municipalities, counties, private post-secondary educational institutions and for-profit [business] or nonprofit entities are not eligible to apply for or receive a charter.

[G.] F. An initial application for a charter school shall not be made after June 30, 2007 if the proposed charter school's proposed enrollment for all grades or the proposed charter school's proposed enrollment for all grades in combination with any other charter school's enrollment for all grades would equal or exceed ten percent of the total MEM of the school district in which the charter school will be geographically located and that school district has a total enrollment of not more than one thousand three hundred students.

[H.] G. A [state-chartered] charter school shall not be approved for operation unless its governing body has qualified to be a board of finance.

[I.] H. The [chartering authority] commission shall receive and review all applications for charter schools submitted to it [The chartering authority] and shall not charge application fees.

[J.] I. The [chartering authority] commission shall hold at least one public hearing in the school district in which the charter school is proposed to be located to obtain information and community input to assist it in its decision whether to grant a charter school application. The [chartering authority] commission may designate a subcommittee of no fewer than three members to hold the public hearing, and, if so, the hearing shall be transcribed for later review by other members of the [chartering authority] commission. Community input may include written or oral comments in favor of or in opposition to the application from the applicant, the local community and, for [state-chartered] charter schools, the local school board and school district in whose geographical boundaries the charter school is proposed to be located.

[K.] J. The [chartering authority] commission shall rule on the application for a charter school in a public meeting by September 1 of the year the application was received; provided, however, that prior to ruling on the application for which a designated subcommittee was used, any member of the [chartering authority] commission who was not present at the public hearing shall receive the transcript of the public hearing together with documents submitted for the public hearing. [If not ruled upon by that date, the charter application shall be automatically reviewed by the secretary in accordance with the provisions of Section 22-8B-7 NMSA 1978.] The charter school applicant and the [chartering authority] commission may, however, jointly waive the deadlines set forth in this section.

[L. A chartering authority] K. The commission may approve, approve with conditions or deny an application. [A chartering authority] The commission may deny an application if:

(1) the application is incomplete or inadequate;

(2) the application does not propose to offer an educational program consistent with the requirements and purposes of the Charter Schools Act;

(3) the proposed head administrator or other administrative or fiscal staff was involved with another charter school whose charter was denied or revoked for fiscal mismanagement or the proposed head administrator or other administrative or fiscal staff was discharged from a public school for fiscal mismanagement;

(4) [for a proposed state-chartered] the charter school [it] does not request to have the governing body of the charter school designated as a board of finance or the governing body does not qualify as a board of finance; or

(5) the application is otherwise contrary to the best interests of the charter school's projected students, the local community or the school district in whose geographic boundaries the charter school applies to operate.

[M.] L. If the [chartering authority] commission denies a charter school application or approves the application with conditions, it shall state its reasons for the denial or conditions in writing within fourteen days of the meeting. If the [chartering authority] commission grants a charter, the approved charter shall be provided to the applicant together with any imposed conditions.

[N.] M. A charter school that has received a notice from the [chartering authority] commission denying approval of the charter [shall have a right to a hearing by the secretary as provided in Section 22-8B-7 NMSA 1978] may appeal the final decision of the commission as provided in Section 39-3-1.1 NMSA 1978."

SECTION 8. Section 22-8B-8 NMSA 1978 (being Laws 1999, Chapter 281, Section 8, as amended) is amended to read:

"22-8B-8. CHARTER APPLICATION--CONTENTS.--The charter school application shall include:

A. the mission statement of the charter school;

B. the goals, objectives and student performance outcomes to be achieved by the charter school;

C. a description of the charter school's educational program, student performance standards and curriculum that must meet or exceed the department's educational standards and must be designed to enable each student to achieve those standards;

D. a description of the way a charter school's educational program will meet the individual needs of the students, including those students determined to be at risk;

E. a description of the charter school's plan for evaluating student performance, the types of assessments that will be used to measure student progress toward achievement of the state's standards and the school's student performance outcomes, the time line for achievement of the outcomes and the procedures for taking corrective action in the event that student performance falls below the standards;

F. evidence that the plan for the charter school is economically sound, including a proposed budget for the term of the charter and a description of the manner in which the annual audit of the financial and administrative operations of the charter school is to be conducted;

G. evidence that the fiscal management of the charter school complies with all applicable federal and state laws and rules relative to fiscal procedures;

[H. evidence of a plan for the displacement of students, teachers and other employees who will not attend or be employed in the conversion school;

I.] H. a description of the governing body and operation of the charter school, including:

(1) how the governing body will be selected; (2) qualification and terms of members, how vacancies on the governing body will be filled and procedures for changing governing body membership; and

(3) the nature and extent of parental, professional educator and community involvement in the governance and operation of the school;

[J.] I. an explanation of the relationship that will exist between the proposed charter school and its employees, including evidence that the terms and conditions of employment will be addressed with affected employees and their recognized representatives, if any;

[K.] J. the employment and student discipline policies of the proposed charter school;

[L.] K. an agreement between the charter school and the [chartering authority] commission regarding their respective legal liability and applicable insurance coverage;

[M.] L. a description of how the charter school plans to meet the transportation and food service needs of its students;

[N.] M. a description of both the discretionary waivers and the waivers provided for in Section 22-8B-5 NMSA 1978 that the charter school is requesting or that will be provided [from the local school board or] by the department and the charter school's plan for addressing and using these waiver requests; [and

O.] N. a description of the facilities the charter school plans to use; and

O. a statement that the charter school will not contract for the management or administration of the charter school or its education program."

SECTION 9. Section 22-8B-9 NMSA 1978 (being Laws 1999, Chapter 281, Section 9, as amended) is amended to read:

"22-8B-9. CHARTER SCHOOL CONTRACT--CONTENTS--RULES.--

A. The [chartering authority] commission shall enter into a contract with the governing body of the applicant charter school within thirty days of approval of the charter application. The charter contract shall be the final authorization for the charter school and shall be part of the charter. [If the chartering authority and the applicant charter school fail to agree upon the terms of or enter into a contract within thirty days of the approval of the charter application, either party may appeal to the secretary to finalize the terms of the contract; provided that such appeal must be provided in writing to the secretary within forty-five days of the approval of the charter application.] Failure to enter into a charter contract [or appeal to the secretary pursuant to this section] precludes the [chartering authority] commission from chartering the school.

B. The charter contract shall include:

(1) all agreements regarding the release of the charter school from department [and local school board] rules and policies, including discretionary waivers and waivers provided for in Section 22-8B-5 NMSA 1978;

(2) any material term of the charter application as determined by the parties to the contract;

(3) the mission statement of the charter school and how the charter school will report on implementation of its mission;

(4) the [chartering authority's] commission's duties to the charter school and liabilities of the [chartering authority] commission as provided in Section [8 of this 2011 act] 22-8B-5.3 NMSA 1978;

(5) a statement of admission policies and procedures;

(6) signed assurances from the charter school's governing body members regarding compliance with all federal and state laws governing organizational, programmatic and financial requirements applicable to charter schools;

(7) the criteria, processes and procedures that the [chartering authority] commission will use for ongoing oversight of operational, financial and academic performance of the charter school;

(8) a detailed description of how the [chartering authority] commission will use the withheld two percent of the school-generated program cost as provided in Section 22-8B-13 NMSA 1978;

(9) the types and amounts of insurance liability coverage to be obtained by the charter school;

(10) the term of the contract;

(11) the process and criteria that the [chartering authority] commission intends to use to annually monitor and evaluate the fiscal, overall governance and student performance of the charter school, including the method that the [chartering authority] commission intends to use to conduct the evaluation as required by Section 22-8B-12 NMSA 1978;

(12) the dispute resolution processes agreed upon by the [chartering authority] commission and the charter school, provided that the processes shall, at a minimum, include:

(a) written notice of the intent to invoke the dispute resolution process, which notice shall include a description of the matter in dispute;

(b) a time limit for response to the notice and cure of the matter in dispute;

(d) a process for apportionment of all costs related to the dispute resolution process; and

(e) a process for final resolution of the issue reviewed under the dispute resolution process;

(13) the criteria, procedures and time lines, agreed upon by the charter school and the [chartering authority] commission, addressing charter revocation and deficiencies found in the annual status report pursuant to the provisions of Section 22-8B-12 NMSA 1978;

(14) if the charter school contracts with a third-party provider for services that do not constitute the management or administration of the charter school or its educational program, the criteria and procedures for the [chartering authority] commission to review the provider's contract and the charter school's financial independence from the provider;

(15) all requests for release of the charter school from department rules or the Public School Code. Within ten days after the contract is approved by the [local school board] commission, any request for release from department rules or the Public School Code shall be delivered by the [local school board] charter school to the department. If the department grants the request, it shall notify the [local school board] commission and the charter school of its decision. If the department denies the request, it shall notify the [local school board] commission and the charter school that the request is denied and specify the reasons for denial;

(16) an agreement that the charter school will participate in the public school insurance authority;

(17) [if the charter school is a state-chartered charter school] a process for qualification of and review of the school as a qualified board of finance and provisions for assurance that the school has satisfied any conditions imposed by the commission; and

(18) any other information reasonably required by either party to the contract.

C. The process for revision or amendment to the terms of the charter contract shall be made only with the approval of the [chartering authority] commission and the governing body of the charter school. [If they cannot agree, either party may appeal to the secretary as provided in Subsection A of this section.]"

SECTION 10. Section 22-8B-9.1 NMSA 1978 (being Laws 2011, Chapter 14, Section 4) is amended to read:

"22-2B-9.1. PERFORMANCE FRAMEWORK.--

A. The performance provisions in the charter contract shall be based on a framework that clearly sets forth the academic and operations performance indicators, measures and metrics that will guide the [chartering authority's] commission's evaluation of each charter school. The performance framework shall include indicators, measures and metrics for, at a minimum:

(1) student academic performance;

(2) student academic growth;

(3) achievement gaps in both proficiency and growth between student subgroups;

(4) attendance;

(5) recurrent enrollment from year to year;

(6) if the charter school is a high school, post-secondary readiness;

(7) if the charter school is a high school, graduation rate;

(8) financial performance and sustainability; and

(9) governing body performance, including compliance with all applicable laws, rules and terms of the charter contract.

B. Annual performance targets shall be set by [each chartering authority] the commission in consultation with its charter schools and shall be designed to help each charter school meet applicable federal, state and [chartering authority] commission expectations as set forth in the charter contracts [to which the authority is a party].

C. The performance framework shall allow for the inclusion of additional rigorous, valid and reliable indicators proposed by a charter school to augment external evaluations of its performance, provided that the [chartering authority] commission shall approve the quality and rigor of such proposed indicators and the indicators are consistent with the purposes of the Charter Schools Act.

D. The performance framework shall require the disaggregation of all student performance data collected in compliance with this section by student subgroup, including gender, race, poverty status, special education or gifted status and English language learner.

E. The [chartering authority] commission shall collect, analyze and report all data from state assessment tests in accordance with the performance framework set forth in the charter contract for each charter school [overseen by that chartering authority]."

SECTION 11. Section 22-8B-12 NMSA 1978 (being Laws 1999, Chapter 281, Section 12, as amended) is amended to read:

"22-8B-12. CHARTER SCHOOLS--TERM--OVERSIGHT AND CORRECTIVE ACTIONS--SITE VISITS--RENEWAL OF CHARTER--GROUNDS FOR NONRENEWAL OR REVOCATION.--

A. A charter school may be approved for an initial term of six years; provided that the first year shall be used exclusively for planning and not for completing the application. A charter may be renewed for successive periods of five years each. Approvals of less than five years may be agreed to between the charter school and the [chartering authority] commission.

B. During the planning year, the charter school shall file a minimum of three status reports with the [chartering authority] commission and the department for the purpose of demonstrating that the charter school's implementation progress is consistent with the conditions, standards and procedures of its approved charter. The report content, format and schedule for submission shall be agreed to by the [chartering authority] commission and the charter school and become part of the charter contract.

C. Prior to the end of the planning year, the charter school shall demonstrate that its facilities meet the requirements of Section 22-8B-4.2 NMSA 1978.

D. [A chartering authority] The commission shall monitor the fiscal, overall governance and student performance and legal compliance of the charter schools that it oversees, including reviewing the data provided by the charter school to support ongoing evaluation according to the charter contract. [Every chartering authority] The commission may conduct or require oversight activities that allow the [chartering authority] commission to fulfill its responsibilities under the Charter Schools Act, including conducting appropriate inquiries and investigations; provided that the [chartering authority] commission complies with the provisions of the Charter Schools Act and the terms of the charter contract and does not unduly inhibit the autonomy granted to the charter schools that it governs.

E. As part of its performance review of a charter school, [a chartering authority] the commission shall visit a charter school under its authority at least once annually to provide technical assistance to the charter school and to determine the status of the charter school and the progress of the charter school toward the performance framework goals in its charter contract.

F. If, based on the performance review conducted by the [chartering authority] commission pursuant to Subsection D of this section, a charter school's fiscal, overall governance or student performance or legal compliance appears unsatisfactory, the [chartering authority] commission shall promptly notify the governing body of the charter school of the unsatisfactory review and provide reasonable opportunity for the governing body to remedy the problem; provided that if the unsatisfactory review warrants revocation, the revocation procedures set forth in this section shall apply. [A chartering authority] The commission may take appropriate corrective actions or exercise sanctions, as long as such sanctions do not constitute revocation, in response to the unsatisfactory review. Such actions or sanctions by the [chartering authority] commission may include requiring a governing body to develop and execute a corrective action plan with the [chartering authority] commission that sets forth time frames for compliance.

G. [Every chartering authority] The commission shall submit an annual report to the [division] department, including a performance report for each charter school, [that it oversees] in accordance with the performance framework set forth in the charter contract.

H. The department shall review the annual report received from the [chartering authority] commission to determine if the department [or local school board] rules and policies from which the charter school was released pursuant to the provisions of Section 22-8B-5 NMSA 1978 assisted or impeded the charter school in meeting its stated goals and objectives. The department shall use the annual reports received from the [chartering authorities] commission as part of its report to the governor, the legislative finance committee and the legislative education study committee as required by the Charter Schools Act.

I. No later than two hundred seventy days prior to the date in which the charter expires, the governing body may submit a renewal application to the [chartering authority. A charter school may apply to a different chartering authority for renewal. The chartering authority] commission. The commission shall rule in a public hearing on the renewal application no later than one hundred eighty days prior to the expiration of the charter.

J. A charter school renewal application [submitted to the chartering authority] shall contain:

(1) a report on the progress of meeting the academic performance, financial compliance and governance responsibilities of the charter school, including achieving the goals, objectives, student performance outcomes, state minimum educational standards and other terms of the charter contract, including the accountability requirements set forth in the Assessment and Accountability Act;

(2) a financial statement that discloses the costs of administration, instruction and other spending categories for the charter school that is understandable to the general public, that allows comparison of costs to other schools or comparable organizations and that is in a format required by the department;

(3) a copy of the charter contract executed in compliance with the provisions of Section 22-8B-9 NMSA 1978;

(4) a petition in support of the charter school renewing its charter status signed by not less than sixty-five percent of the employees in the charter school;

(5) a petition in support of the charter school renewing its charter status signed by at least seventy-five percent of the households whose children are enrolled in the charter school; and

(6) a description of the charter school facilities and assurances that the facilities are in compliance with the requirements of Section 22-8B-4.2 NMSA 1978.

K. A charter may be suspended, revoked or not renewed by the [chartering authority] commission if the [chartering authority] commission determines that the charter school did any of the following:

(1) committed a material violation of any of the conditions, standards or procedures set forth in the charter contract;

(2) failed to meet or make substantial progress toward achievement of the department's minimum educational standards or student performance standards identified in the charter contract;

(3) failed to meet generally accepted standards of fiscal management; or

(4) violated any provision of law from which the charter school was not specifically exempted.

L. The [chartering authority] commission shall develop processes for suspension, revocation or nonrenewal of a charter that:

(1) provide the charter school with timely notification of the prospect of suspension, revocation or nonrenewal of the charter and the reasons for such action;

(2) allow the charter school a reasonable amount of time to prepare and submit a response to the [chartering authority's] commission's action; and

(3) require the final determination made by the [chartering authority] commission to be submitted to the department.

M. If [a chartering authority] the commission suspends, revokes or does not renew a charter, the [chartering authority] commission shall state in writing its reasons for the suspension, revocation or nonrenewal.

N. A decision to suspend, revoke or not to renew a charter may be appealed by the governing body pursuant to Section [22-8B-7] 39-3-1.1 NMSA 1978."

SECTION 12. Section 22-8B-12.1 NMSA 1978 (being Laws 2011, Chapter 14, Section 6) is amended to read:

"22-8B-12.1. CHARTER SCHOOL CLOSURE--[CHARTERING AUTHORITY] COMMISSION PROTOCOLS--[CHARTERING AUTHORITY] DUTIES--DISTRIBUTION OF ASSETS.--

A. Prior to any charter school closure decision, the [chartering authority] commission shall develop a charter school closure protocol to ensure timely notification to parents, orderly transition of students and student records to new schools and proper disposition of school funds, property and assets in accordance with the provisions of Subsection C of this section. The protocol shall specify tasks, time lines and responsible parties, including delineating the respective duties of the charter school, the governing body and the [chartering authority] commission.

B. If a charter school is ordered closed for any reason, prior to closure, the [chartering authority] commission shall oversee and work with the closing school to ensure a smooth and orderly closure and transition for students and parents according to the closure protocol.

C. When a charter school is closed, the assets of the school shall be distributed first to satisfy outstanding payroll obligations for employees of the school, then to creditors of the school and then to the state treasury to the credit of the current school fund; except that if all or any portion of a charter school facility was financed with the proceeds of general obligation bonds issued by a local school board, the facility shall revert to the school district. If the assets of the school are insufficient to pay all parties to whom the [schools] school owes compensation, the prioritization of the distribution of assets may be determined by decree of a court of law."

SECTION 13. Section 22-8B-13 NMSA 1978 (being Laws 1999, Chapter 281, Section 13, as amended) is amended to read:

"22-8B-13. CHARTER SCHOOL FINANCING.--

A. The amount of funding allocated to a charter school shall be not less than ninety-eight percent of the school-generated program cost. The [school district or] division may withhold and use two percent of the school-generated program cost for its administrative support of a charter school.

B. That portion of money from state or federal programs generated by students enrolled in a [locally chartered] charter school shall be allocated to that charter school serving students eligible for that aid. Any other public school program not offered by the [locally chartered] charter school shall not be entitled to the share of money generated by [a charter school] that program.

C. When a [state-chartered] charter school is designated as a board of finance pursuant to Section 22-8-38 NMSA 1978, it shall receive state and federal funds for which it is eligible.

D. Charter schools may apply for all federal funds for which they are eligible.

E. All services centrally or otherwise provided by a [local] school district, including custodial, maintenance and media services, libraries and warehousing shall be subject to negotiation between the charter school and the school district. Any services for which a charter school contracts with a school district shall be provided by the school district at a reasonable cost."

SECTION 14. Section 22-8B-16 NMSA 1978 (being Laws 2006, Chapter 94, Section 29) is amended to read:

"22-8B-16. PUBLIC EDUCATION COMMISSION--POWERS AND DUTIES.--The commission shall receive applications for initial chartering and renewals of charters for charter schools [that want to be chartered by the state] and approve or disapprove those charter applications. The commission may approve, deny, suspend or revoke the charter of a [state-chartered] charter school in accordance with the provisions of the Charter Schools Act. The chartering authority for a charter school existing on July 1, [2007 may] 2013 shall be transferred to the commission [provided, however, that if a school chartered under a previous chartering authority chooses to transfer its chartering authority, it] and shall continue to operate under the provisions of that charter until its renewal date unless it is suspended or revoked by the commission. An application for a charter school filed with a local school board prior to July 1, [2007] 2013, but not approved, may be transferred to the commission on July 1, [2007] 2013."

SECTION 15. Section 22-8B-17 NMSA 1978 (being Laws 2006, Chapter 94, Section 30) is amended to read:

"22-8B-17. CHARTER SCHOOLS DIVISION--DUTIES.--

A. The "charter schools division" is created in the [department] commission. The division shall:

[A.] (1) provide staff support to the commission;

[B.] (2) provide technical support to all charter schools;

[C.] (3) review and approve [state-chartered] charter school budget matters; and

[D.] (4) make recommendations to the commission regarding the approval, denial, suspension or revocation of the charter of a [state-chartered] charter school.

B. The division is administratively attached to the department, and the department shall provide administrative services for the division. To contain costs, the division shall continue to use the department's information technology resources in the same way it had as a division of the department. The commission and the department shall enter into data-sharing agreements so that the commission and the division may have access to department data while ensuring the privacy of any person whose personally identifiable information is contained in the data."

SECTION 16. Section 22-8B-17.1 NMSA 1978 (being Laws 2011, Chapter 14, Section 9) is amended to read:

"22-8B-17.1. DIVISION--ANNUAL REPORT.--By December 1 annually, the division shall issue to the governor, the legislative finance committee and the legislative education study committee a report on the state's charter schools for the school year ending in the preceding calendar year, drawing from the annual reports submitted by every [chartering authority] charter school as well as any relevant data compiled by the division. The annual report shall include a comparison of the performance of charter school students with the performance of academically, ethnically and economically comparable groups of students in noncharter public schools. The report shall also include an assessment of the successes, challenges and areas for improvement in meeting the purposes of the Charter Schools Act, including the division's assessment of the sufficiency of funding for charter schools, the efficacy of the state formula for [chartering authority] commission and division funding and any suggested changes to state law or policy necessary to strengthen the state's charter schools. The annual report shall be published on the department's web site."

SECTION 17. TEMPORARY PROVISION--TRANSFERS OF FUNCTIONS, APPROPRIATIONS, MONEY, RECORDS AND OTHER PROPERTY--CONTRACTUAL OBLIGATIONS--STATUTORY REFERENCES.--

A. On July 1, 2013, all functions, appropriations, money, records, furniture, equipment, supplies and other property of the charter schools division of the public education department shall be transferred to the charter schools division of the public education commission.

B. On July 1, 2013, all contractual obligations of the charter schools division of the public education department shall be binding on the public education commission.

C. On July 1, 2013, all references in law to the charter schools division of the public education department shall be deemed to be references to the charter schools division of the public education commission.

SECTION 18. REPEAL.--Section 22-8B-7 NMSA 1978 (being Laws 1999, Chapter 281, Section 7, as amended) is repealed.

SECTION 19. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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