SENATE BILL 237

55th legislature - STATE OF NEW MEXICO - first session, 2021

INTRODUCED BY

Linda M. Lopez

AN ACT

RELATING TO CHARTER SCHOOLS; CLARIFYING THE POWERS AND DUTIES OF CHARTERING AUTHORITIES IN MONITORING CHARTER SCHOOLS; ALLOWING A CHARTERING AUTHORITY TO SANCTION A GOVERNING BODY, WHICH MAY INCLUDE CORRECTIVE ACTION AND SUSPENSION; CLARIFYING THE PUBLIC SCHOOL CODE PROHIBITION AGAINST NEPOTISM.

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

     SECTION 1. 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--NEPOTISM PROHIBITED.--

          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 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, 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 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.

          D. A head administrator or governing body shall not initially employ or approve the initial employment in any capacity of a person who is an immediate family member of the head administrator or a member of the governing body or a charter school employee who would be a direct supervisor of the immediate family member. This provision shall not be waived for employments after the effective date of this 2021 act. A charter school that has employed an immediate family member of the head administrator, member of the governing body or a direct supervisor shall notify the chartering authority of those employees and their relationship with the head administrator, member of the governing body or supervisor. The chartering authority shall work with the charter school to alleviate or mitigate the effects of the nepotism, including identifying who the supervisor of record will be.

          [D.] E. 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 2. Section 22-8B-5.3 NMSA 1978 (being Laws 2011, Chapter 14, Section 8) is amended to read:

     "22-8B-5.3. CHARTERING AUTHORITY--POWERS--DUTIES--LIABILITY.--A chartering authority 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 authority;

          G. oversee the governing body's compliance with federal and state laws and, if necessary, take action following the appropriate steps when the governing body is not operating pursuant to law or is violating policies and procedures in the charter;

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

          [H.] I. 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;

                (5) governing body monitoring and intercession with a governing body, as necessary; and

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

     SECTION 3. 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 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 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 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 duties to the charter school and liabilities of the chartering authority as provided in Section 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 will use for ongoing oversight of operational, financial and academic performance of the charter school;

                (8) a detailed description of how the chartering authority will use the withheld two percent of the school-generated program cost as provided in Section 22-8B-13 NMSA 1978 to monitor and oversee the charter school and the governing body;

                (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 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 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 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;

                     (c) a procedure for selection of a neutral third party to assist in resolving the 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, 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, the criteria and procedures for the chartering authority 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, any request for release from department rules or the Public School Code shall be delivered by the local school board to the department. If the department grants the request, it shall notify the local school board and the charter school of its decision. If the department denies the request, it shall notify the local school board 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;

                (18) a listing of the charter school's nondiscretionary waivers; and

                (19) 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 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 4. Section 22-8B-10 NMSA 1978 (being Laws 1999, Chapter 281, Section 10, as amended) is amended to read:

     "22-8B-10. CHARTER SCHOOLS--EMPLOYEES.--

          A. A charter school shall hire its own employees. The provisions of the School Personnel Act shall apply to such employees. The head administrator of the charter school shall employ, fix the salaries of, assign, terminate and discharge all employees of the charter school.

          B. The head administrator of a charter school shall not initially employ or approve the initial employment in any capacity of a person who is the spouse, father, father-in-law, mother, mother-in-law, son, son-in-law, daughter, daughter-in-law, brother, brother-in-law, sister or sister-in-law of a member of the governing body, [or] the head administrator [The governing body may waive the nepotism rule for family members of a head administrator] or would-be direct supervisor.

          C. Nothing in this section shall prohibit the continued employment of a person employed on or before July 1, 2008."

     SECTION 5. 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.

          B. During the planning year, the charter school shall file a minimum of three status reports with the chartering authority 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 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 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 may conduct or require oversight activities that allow the chartering authority to fulfill its responsibilities under the Charter Schools Act, including conducting appropriate inquiries and investigations; provided that the chartering authority 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 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 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 shall promptly notify the governing body of the charter school of the unsatisfactory review and the perceived problem 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 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 may include requiring a governing body to develop and execute a corrective action plan with the chartering authority that sets forth time frames for compliance. The chartering authority shall follow its own policy on suspension, revocation or nonrenewal.

          G. Every chartering authority shall submit an annual report to the division, 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 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 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 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 standards of excellence 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;

                (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; and

                (7) for charter schools located on tribal land, documentation of ongoing consultation pursuant to the Indian Education Act.

          K. A charter may be suspended, revoked or not renewed by the chartering authority if the chartering authority 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 standards of excellence or student performance standards identified in the charter contract;

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

                (4) for a charter school located on tribal land, failed to comply with ongoing consultations pursuant to the Indian Education Act; or

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

          L. The chartering authority 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 action; and

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

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

          N. If a chartering authority suspends, revokes or does not renew the charter of a charter school located on tribal land, the chartering authority and charter school shall consult with the tribe pursuant to Subsections C and D of Section [3 of this 2019 act] 22-8B-12.2 NMSA 1978.

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

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