HB0253

HOUSE BILL 253

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Joy Garratt and Susan K. Herrera and William P. Soules

AN ACT

RELATING TO PUBLIC SCHOOLS; AMENDING THE PUBLIC SCHOOL FINANCE ACT; REQUIRING SCHOOL DISTRICTS AND CHARTER SCHOOLS TO REPORT MEMBERSHIP ESTIMATES OF STUDENTS TO BE ENROLLED AS DISTANCE LEARNING STUDENTS; REQUIRING SCHOOL DISTRICTS AND CHARTER SCHOOLS TO MAINTAIN CERTAIN RECORDS REGARDING STUDENTS ENROLLED IN A DISTANCE LEARNING PROGRAM; EXCLUDING A SCHOOL DISTRICT'S MEMBERSHIP OF STUDENTS ENROLLED IN DISTANCE LEARNING PROGRAMS FROM THE CALCULATION FOR SIZE ADJUSTMENT PROGRAM UNITS; AMENDING THE STATEWIDE CYBER ACADEMY ACT AND RENAMING THAT ACT THE "DISTANCE LEARNING ACT"; REMOVING EXISTING DEFINITIONS AND DEFINING NEW TERMS IN THE PUBLIC SCHOOL FINANCE ACT AND THE DISTANCE LEARNING ACT; REMOVING THE REQUIREMENT THAT THE STATEWIDE CYBER ACADEMY BE A COLLABORATIVE PROGRAM; PROVIDING ALL-NEW REQUIREMENTS FOR SCHOOL DISTRICTS AND CHARTER SCHOOLS THAT OPERATE DISTANCE LEARNING PROGRAMS; PLACING RESTRICTIONS ON STUDENT ENROLLMENT IN DISTANCE LEARNING PROGRAMS AND PROVIDING EXCEPTIONS; CLARIFYING THE REQUIREMENTS OF SCHOOL DISTRICTS AND CHARTER SCHOOLS REGARDING DISTANCE LEARNING AND STUDENTS WITH DISABILITIES; REQUIRING PUBLIC EDUCATION DEPARTMENT APPROVAL OF DISTANCE LEARNING PROGRAMS; PROVIDING A PROCESS FOR SCHOOL DISTRICTS AND CHARTER SCHOOLS TO APPLY FOR APPROVAL OF A PROGRAM; MAKING CONFORMING AMENDMENTS; ENACTING TEMPORARY PROVISIONS RELATING TO THE PUBLIC SCHOOL FINANCE ACT; ENACTING TEMPORARY PROVISIONS RELATING TO THE DISTANCE LEARNING ACT; REPEALING SECTION 22-30-8 NMSA 1978 (BEING LAWS 2007, CHAPTER 292, SECTION 7 AND LAWS 2007, CHAPTER 293, SECTION 7); DECLARING AN EMERGENCY.

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

SECTION 1. Section 22-8-2 NMSA 1978 (being Laws 1978, Chapter 128, Section 3, as amended) is amended to read:

"22-8-2. DEFINITIONS.--As used in the Public School Finance Act:

A. "ADM" or "MEM" means membership;

B. "membership" means the total enrollment of qualified students on the current roll of a class or school on a specified day. The current roll is established by the addition of original entries and reentries minus withdrawals. Withdrawals of students, in addition to students formally withdrawn from the public school, include students absent from the public school for as many as ten consecutive school days; provided that withdrawals do not include students who are in need of intervention or who are chronically or excessively absent;

C. "basic program ADM" or "basic program MEM" means the MEM of qualified students but excludes the full-time-equivalent MEM in early childhood education and three- and four-year-old students receiving special education services;

D. "cost differential factor" is the numerical expression of the ratio of the cost of a particular segment of the school program to the cost of the basic program in grades four through six;

E. "department" or "division" means the public education department;

F. "distance learning student" means a qualified student enrolled in a full-time distance learning program in accordance with the Distance Learning Act;

[F.] G. "early childhood education ADM" or "early childhood education MEM" means the full-time-equivalent MEM of students attending approved early childhood education programs;

[G.] H. "family income index rate" means the percentage of students in a school district or charter school that is identified as either extremely low income or very low income by the family income index;

[H.] I. "full-time-equivalent ADM" or "full-time- equivalent MEM" is that membership calculated by applying to the MEM in an approved public school program the ratio of the number of hours per school day devoted to the program to six hours or the number of hours per school week devoted to the program to thirty hours;

[I.] J. "operating budget" means the annual financial plan and educational plan required to be submitted by a local school board or governing body of a state-chartered charter school;

[J.] K. "performance measure" means a quantitative indicator used to assess the output or outcome of an approved program;

[K.] L. "performance target" means the expected level of performance of a program's performance measure;

[L.] M. "program cost" is the product of the total number of program units to which a school district is entitled multiplied by the dollar value per program unit established by the legislature;

[M.] N. "program element" is that component of a public school system to which a cost differential factor is applied to determine the number of program units to which a school district is entitled, including MEM, full-time-equivalent MEM, teacher, classroom or public school;

[N.] O. "program unit" is the product of the program element multiplied by the applicable cost differential factor;

[O.] P. "public money" or "public funds" means all money from public or private sources received by a school district or state-chartered charter school or officer or employee of a school district or state-chartered charter school for public use;

[P.] Q. "qualified student" means a public school student who:

(1) has not graduated from high school;

(2) is regularly enrolled in one-half or more of the minimum course requirements approved by the department for public school students; and

(3) in terms of age and other criteria:

(a) is at least five years of age prior to 12:01 a.m. on September 1 of the school year;

(b) is at least three years of age at any time during the school year and is receiving special education services pursuant to rules of the department;

(c) except as provided in Subparagraph (d) of this paragraph, has not reached the student's twenty-second birthday on the first day of the school year; or

(d) has reached the student's twenty-second birthday on the first day of the 2019-2020 school year, is counted in a school district's or charter school's MEM on the third reporting date of the 2018-2019 school year, has been continuously enrolled in the same public school since that reporting date and is still enrolled in that school;

[Q.] R. "rural population rate" means that proportion of the total population within a school district's geographic boundaries that lives in a rural area and not in an urban area as defined by the United States census bureau;

[R.] S. "staffing cost multiplier" means the teacher cost index; and

[S.] T. "state superintendent" or "secretary" means the secretary of public education or the secretary's designee."

SECTION 2. Section 22-8-12.1 NMSA 1978 (being Laws 1978, Chapter 128, Section 5, as amended) is amended to read:

"22-8-12.1. MEMBERSHIP PROJECTIONS AND BUDGET

REQUESTS.--

A. On or before October 15 of each year, each local school board or governing body of a state-chartered charter school shall submit [annually, on or before October 15] to the department:

(1) an estimate for the succeeding fiscal year of:

(a) the membership of qualified students to be enrolled in the basic program;

(b) the membership of students to be enrolled as distance learning students;

[(b)] (c) the full-time-equivalent membership of students to be enrolled in approved early childhood education programs; and

[(c)] (d) the membership of students to be enrolled in approved special education programs;

(2) all other information necessary to calculate program costs; and

(3) any other information related to the financial needs of the school district or state-chartered charter school as may be requested by the department.

B. [All] The information [requested] submitted pursuant to Subsection A of this section shall be submitted on forms prescribed and furnished by the department and [shall comply] in accordance with the department's rules and procedures.

C. The department shall:

(1) review the financial needs of each school district or state-chartered charter school for the succeeding fiscal year;

(2) [submit annually] on or before September 1 of each year, submit to the department of finance and administration, the legislative finance committee and the legislative education study committee the department's recommendations [of the department] for:

(a) amendments to the public school finance formula;

(b) appropriations for the succeeding fiscal year to the public school fund; and

(3) [submit annually] on or before November 30 of each year, submit to the department of finance and administration, the legislative finance committee and the legislative education study committee any adjustments to the department's recommendations [of the department] for appropriations related to additional enrollment growth program units pursuant to Section 22-8-23.1 NMSA 1978."

SECTION 3. Section 22-8-13 NMSA 1978 (being Laws 1974, Chapter 8, Section 3, as amended) is amended to read:

"22-8-13. REPORTS.--

A. Each public school shall keep accurate records concerning membership in the public school.

B. The dates for which MEM is reported are as follows:

(1) the first reporting date is the second Wednesday in October of each year;

(2) the second reporting date is December 1 or the first working day in December of each year; and

(3) the third reporting date is the second Wednesday in February of each year.

C. The superintendent of each school district or head administrator of [a] each state-chartered charter school shall maintain the following reports for each reporting period:

(1) the basic program MEM by grade in each public school;

(2) the early childhood education MEM;

(3) the special education MEM in each public school in class C and class D programs as defined in Section 22-8-21 NMSA 1978;

(4) the number of class A and class B programs as defined in Section 22-8-21 NMSA 1978; [and]

(5) the full-time-equivalent MEM for bilingual multicultural education programs; and

(6) the distance-learning-student MEM by grade in each public school.

D. The superintendent of each school district and the head administrator of each state-chartered charter school shall furnish all reports required by law or the department to the department [within ten working days of] on or before the close of each reporting period or as otherwise requested by the department. Failure of the department to approve timely submissions shall not cause a school district or charter school to be found noncompliant with the requirements of this section.

E. For purposes of this section, "working day" means every calendar day excluding Saturdays, Sundays and legal holidays.

[E. All] F. The information required pursuant to this section shall be [on forms] submitted in a manner prescribed [and furnished] by the department. A copy of any report made pursuant to this section shall be kept as a permanent record of the school district or charter school and shall be subject to inspection and audit at any reasonable time.

[F.] G. The department may withhold up to one hundred percent of allotments of funds to any school district or state-chartered charter school where the superintendent or head administrator has failed to comply with the requirements of this section. The withholding may continue until the superintendent or head administrator complies with and agrees to continue complying with the requirements of this section.

[G.] H. The provisions of this section may be modified or suspended by the department for any school district, [or] school or state-chartered charter school operating under the Variable School Calendar Act. The department shall require MEM reports consistent with the calendar of operations of such school district, [or] school or state-chartered charter school and shall calculate an equivalent MEM for use in projecting school district or charter school revenue."

SECTION 4. Section 22-8-23 NMSA 1978 (being Laws 1975, Chapter 119, Section 1, as amended by Laws 2019, Chapter 206, Section 14 and by Laws 2019, Chapter 207, Section 14) is amended to read:

"22-8-23. SIZE ADJUSTMENT PROGRAM UNITS.--

A. An approved public school [including a charter school] with a MEM of fewer than four hundred, including early childhood education full-time-equivalent MEM but excluding membership in class C and class D programs and excluding full-time-equivalent membership in three- and four-year-old developmentally disabled programs, that is geographically located in a school district with fewer than two thousand MEM, is eligible for additional program units. Separate schools established to provide special programs, including [but not limited to] vocational and alternative education, shall not be classified as public schools for purposes of generating size adjustment program units. The number of additional program units to which a school district or charter school is entitled under this subsection is the sum of elementary-junior high units and senior high units computed in the following manner:

Elementary-Junior High Units

200 - MEM

_________ x 1.0 x MEM = Units

200

where MEM is equal to the membership of an approved elementary or junior high school, including early childhood education full-time-equivalent membership but excluding membership in class C and class D programs and excluding full-time-equivalent membership in three- and four-year-old developmentally disabled programs;

Senior High Units

200 - MEM

_________ x 2.0 x MEM = Units

200

or,

Senior High Units

400 - MEM

_________ x 1.6 x MEM = Units

400

whichever calculation for senior high units is higher, where

MEM is equal to the membership of an approved senior high

school, excluding membership in class C and class D programs.

B. An approved public school with a MEM of fewer than four hundred, including early childhood education full-time-equivalent MEM but excluding MEM in class C and class D programs and excluding full-time-equivalent MEM in three- and four-year-old developmentally disabled programs, geographically located in a school district with two thousand MEM or more is eligible for additional program units computed in the following manner:

(1) for fiscal year 2020, eighty percent of the sum of elementary-junior high units and senior high units as prescribed in Subsection A of this section;

(2) for fiscal year 2021, sixty percent of the sum of elementary-junior high units and senior high units as prescribed in Subsection A of this section;

(3) for fiscal year 2022, forty percent of the sum of elementary-junior high units and senior high units as prescribed in Subsection A of this section;

(4) for fiscal year 2023, twenty percent of the sum of elementary-junior high units and senior high units as prescribed in Subsection A of this section; and

(5) for fiscal year 2024 and subsequent fiscal years, no elementary-junior high units and senior high units as prescribed in Subsection A of this section.

C. A school district with total MEM of fewer than four thousand, including early childhood education full-time-equivalent MEM, is eligible for additional program units. The number of additional program units to which a school district is entitled under this subsection is the number of district units computed in the following manner:

District Units

4,000 - MEM

___________ x 0.15 x MEM = Units

4,000

where MEM is equal to the total district membership,

including early childhood education full-time-equivalent membership.

D. A school district [as defined in Subsection R of Section 22-1-2 NMSA 1978] with a MEM of fewer than two hundred, including early childhood education full-time-equivalent MEM, is eligible for additional program units if the department certifies that the school district has implemented practices to reduce scale inefficiencies, including shared service agreements with regional education cooperatives or other school districts for noninstructional functions and distance education. The numbers of additional program units to which a school district is entitled under this subsection is the number of units computed in the following manner:

200 - MEM = Units

where MEM is equal to the total district MEM, including early childhood education full-time-equivalent MEM.

E. A school district with a rural population rate greater than forty percent or a charter school initially chartered before July 1, 2018 and geographically located in a school district with a rural population rate greater than forty percent is eligible for additional program units. The number of additional program units to which a school district or charter school is entitled pursuant to this subsection is determined by multiplying the full-time-equivalent MEM by the rural population rate and the cost differential factor of [0.03 for fiscal year 2020, 0.06 for fiscal year 2021, 0.09 for fiscal year 2022, 0.12 for fiscal year 2023 and 0.15 for fiscal year 2024 and subsequent fiscal years] 0.15; provided that the full-time-equivalent MEM used for this determination does not include membership derived from distance learning students."

SECTION 5. Section 22-30-1 NMSA 1978 (being Laws 2007, Chapter 292, Section 1 and Laws 2007, Chapter 293, Section 1) is amended to read:

"22-30-1. SHORT TITLE.--[Sections 1 through 7 of this act] Chapter 22, Article 30 NMSA 1978 may be cited as the ["Statewide Cyber Academy Act"] "Distance Learning Act"."

SECTION 6. Section 22-30-2 NMSA 1978 (being Laws 2007, Chapter 292, Section 2 and Laws 2007, Chapter 293, Section 2) is amended to read:

"22-30-2. DEFINITIONS.--As used in the [Statewide Cyber Academy Act:

A. "course provider" means a person that supplies educational course content for distance learning courses;

B. "distance learning course" means an educational course that is taught where the student and primary instructor are separated by time or space and linked by technology;

C. "distance learning student" means a qualified student as defined in Section 22-8-2 NMSA 1978 who is enrolled in one or more distance learning courses for credit;

D. "learning management system" means a software application that facilitates online instruction and interaction between teachers and distance learning students;

E. "local distance learning site" means a school district or charter school that offers and grants credit for distance learning courses to distance learning students enrolled in the school district or charter school;

F. "primary enrolling district" means the school district or charter school in which the distance learning student is enrolled;

G. "regional host" means an educational institution, school district or other entity selected by the statewide cyber academy to coordinate the delivery of distance learning courses within a broad geographic region of the state;

H. "service center" means the single central facility where administrative and management functions of the statewide cyber academy are physically located in New Mexico; and

I. "statewide cyber academy" means the department's collaborative program that offers distance learning courses to all local distance learning sites] Distance Learning Act:

A. "distance learning course" means an educational course provided through virtual instruction;

B. "distance learning student" means a qualified student in accordance with the provisions of the Public School Finance Act who is enrolled in a full-time distance learning program; and

C. "full-time distance learning program" means a public school instructional program in which students receive virtual instruction and are not required to attend school at a school building."

SECTION 7. Section 22-30-3 NMSA 1978 (being Laws 2007, Chapter 292, Section 3 and Laws 2007, Chapter 293, Section 3) is amended to read:

"22-30-3. STATEWIDE CYBER ACADEMY CREATED.--The "statewide cyber academy" [program] is created as a program in the department. [The statewide cyber academy is a collaborative program among the department, the higher education department, telecommunications networks and representatives of other state agencies engaged in providing distance education.] The statewide cyber academy [shall] may provide distance learning courses for [grades six through twelve] sixth grade through twelfth grade and professional development for teachers, instructional support providers and school administrators."

SECTION 8. Section 22-30-4 NMSA 1978 (being Laws 2007, Chapter 292, Section 4 and Laws 2007, Chapter 293, Section 4) is amended to read:

"22-30-4. DEPARTMENT RULES.--The department shall promulgate rules to carry out the provisions of the [Statewide Cyber Academy] Distance Learning Act."

SECTION 9. Section 22-30-5 NMSA 1978 (being Laws 2007, Chapter 292, Section 5 and Laws 2007, Chapter 293, Section 5) is amended to read:

"22-30-5. [STATEWIDE CYBER ACADEMY] FULL-TIME DISTANCE LEARNING PROGRAM--DUTIES.--[The statewide cyber academy shall:

A. establish a distance learning course delivery system that is efficient and cost-effective and that uses a statewide service center and regional hosts to provide approved distance learning courses;

B. select regional hosts based on pre-existing experience and capacity to facilitate the delivery of distance educational programs, including public post-secondary educational institutions, regional education cooperatives and school districts;

C. provide technical and program support to regional hosts and local distance learning sites;

D. ensure that all distance learning courses offered by course providers are taught by highly qualified teachers or members of the faculty of accredited post-secondary educational institutions and meet state academic content and performance standards;

E. provide for reasonable and equitable means to allocate the costs of distance learning courses among the statewide cyber academy, the course providers and the school districts whose students are enrolled in a distance learning course;

F. give first priority to the delivery of distance learning courses for credit to distance learning students who have the greatest need because of geographic location or circumstances in which a school district may have difficulty delivering essential course instruction due to financial restraints or lack of highly qualified teachers; provided that in fiscal year 2008 the statewide cyber academy shall include, among those distance learning students who are determined to have the greatest need, distance learning students served by school districts that are members of regional education cooperatives three, eight and nine;

G. ensure that the statewide cyber academy's learning management system is compatible with school district and department data collection, analysis and reporting systems;

H. ensure that all deficiencies in the infrastructure, hardware and software in the statewide cyber academy are corrected in accordance with educational technology adequacy standards pursuant to Section 22-15A-11 NMSA 1978;

I. comply with all rules governing privacy and confidentiality of student records for secure record storage;

J. offer distance learning courses to distance learning students;

K. offer professional development via distance learning, using a learning management system;

L. assist the council on technology in education in its development of the statewide plan required by Section

22-15A-7 NMSA 1978, including a statewide cyber academy plan that addresses short- and long-range goals;

M. define and coordinate the roles and responsibilities of the collaborating agencies to establish a distance learning governance and accountability framework; and

N. conduct an annual evaluation and provide an annual report to the department and the legislature that includes a detailed report of expenditures; a description of services provided, including the number and location of local distance learning sites, public schools and distance learning students served; the courses offered; the credits generated by local distance learning sites; and student and teacher accountability reporting data.]

A. A school district or charter school that offers a full-time distance learning program shall:

(1) administer the program in compliance with the Public School Code, including Section 22-2-8.1 NMSA 1978 regarding required instructional hours and Section 22-10A-20 NMSA 1978 regarding class load and teaching load limits;

(2) administer the program in compliance with state and federal law regarding student privacy, student record confidentiality and secure student record storage;

(3) only provide distance learning courses that are taught by licensed teachers or faculty members of accredited post-secondary educational institutions and that meet the department's academic content and performance standards;

(4) on or before October 15 of each year, notify the department as to the number of students enrolled in the program and the grade level of the enrolled students; and

(5) maintain records of the district's or charter school's expenditures related to the program and furnish the records to the department at the department's request and in the manner prescribed by the department.

B. A school district or charter school that operates a full-time distance learning program shall not expand the program to an additional grade level unless the school district or charter school certifies to the department that the program has sufficient courses for a full instructional program for the additional grade level."

SECTION 10. Section 22-30-6 NMSA 1978 (being Laws 2007, Chapter 292, Section 6 and Laws 2007, Chapter 293, Section 6) is amended to read:

"22-30-6. DISTANCE LEARNING STUDENTS--ENROLLMENT.--

[A. A student must be enrolled in a public school or a state-supported school and must have the permission of the student's local distance education learning site to enroll in a distance learning course. A distance learning student shall only be counted in the student's primary enrolling district for the purpose of determining the membership used to calculate a school district's state equalization guarantee. A student shall have only one primary enrolling district.

B. A home school student may participate in the statewide cyber academy by enrolling for one-half or more of the minimum course requirements approved by the department for public school students in the school district in which the student resides; or, if the student is enrolled for less than one-half of the minimum course requirements, the student may participate in the statewide cyber academy by paying not more than thirty-five percent of the current unit value per curricular unit.

C. A student enrolled in a nonpublic school may participate in the statewide cyber academy if the school in which the student is enrolled enters into a contract with the school district in which the nonpublic school is located.

D. A student who is detained in or committed to a juvenile detention facility or a facility for the long-term care and rehabilitation of delinquent children may participate in the statewide cyber academy if the facility in which the student is enrolled enters into a contract with the school district in which the facility is located.]

A. A school district shall not:

(1) enroll a student in the district's full-time distance learning program if the student does not reside in the district; provided that the department may waive this requirement if the department determines that a waiver is in the student's best interest;

(2) require a student to enroll in a full-time distance learning program;

(3) enroll a student in a full-time distance learning program if the student is in kindergarten through fifth grade unless the student's enrollment in the program is required or otherwise authorized pursuant to the federal Individuals with Disabilities Education Act or Section 504 of the federal Rehabilitation Act of 1973; or

(4) enroll more than ten percent of the district's MEM in a full-time distance learning program.

B. A charter school shall not:

(1) require a student to enroll in a full-time distance learning program;

(2) enroll a student in a full-time distance learning program if the student is in kindergarten through fifth grade unless the student's enrollment in the program is:

(a) required or otherwise authorized pursuant to the federal Individuals with Disabilities Education Act or Section 504 of the federal Rehabilitation Act of 1973; or

(b) authorized pursuant to the charter school's charter or current charter contract; or

(3) enroll more than ten percent of the charter school's MEM in a full-time distance learning program unless authorized by the charter school's charter or current charter contract.

C. The provisions of Subsections A and B of this section do not apply to a school district or charter school if temporary enrollment of the district's or charter school's students in a full-time distance learning program is necessary or appropriate during a public health emergency declared pursuant to the Public Health Emergency Response Act."

SECTION 11. Section 22-30-7 NMSA 1978 (being Laws 2003, Chapter 162, Section 2) is amended to read:

"22-30-7. DISTANCE LEARNING AND COMPUTER-BASED COURSES.--[Public schools that offer distance learning and computer-based courses of study shall provide accompanying electronic formats that are usable by a person with a disability using assistive technology, and those formats shall be based on the American standard code for information interchange, hypertext markup language and extensible markup language] A school district or charter school that has a full-time distance learning program or offers distance learning courses or other computer-based courses of study shall provide accompanying instructional materials or other materials in an electronic format usable by a person with a disability or compatible with the person's assistive technology."

SECTION 12. A new section of the Distance Learning Act is enacted to read:

"[NEW MATERIAL] DEPARTMENT APPROVAL OF PROGRAMS.--

A. A school district or charter school may establish a full-time distance learning program only if the program is approved by the department.

B. A school district or charter school seeking to establish a full-time distance learning program shall submit an application to the department on or before October 15 of the school year immediately preceding the school year in which the district or charter school will begin operating the program.

C. The department shall approve or deny an application to establish a full-time distance learning program on or before January 30 of the school year in which the application was submitted.

D. The department may approve a school district's or charter school's full-time distance learning program if the department determines that the program is likely to improve learning opportunities for students and that the school district or charter school demonstrates the capacity of the program to comply with all provisions of the Public School Code. If the school district's or charter school's program will be managed or operated by a contracted third party, the department shall consider information about the third party's reputation, track record or past performance if such information is available.

E. The department's decision to deny an application to establish a full-time distance learning program is final and not subject to appeal.

F. The department shall review each approved full-time distance learning program at least once every three to five years to determine whether the program shall maintain the department's approval.

G. The Distance Learning Act shall not be construed to prohibit a charter or charter contract for a charter school that provides only virtual or online educational programming.

H. The department shall adopt rules for uniform requirements for full-time distance learning programs and for a uniform process for school districts or charter schools to apply to establish those programs."

SECTION 13. TEMPORARY PROVISIONS.--

A. On or before February 27, 2026, the secretary of public education may establish an adjusted unit value for use in accordance with the Public School Finance Act for the 2025-2026 school year. In establishing the adjusted unit value, the secretary shall consult with the department of finance and administration, the legislative education study committee and the legislative finance committee.

B. In fiscal years 2026 and 2027, a school district is not eligible for enrollment growth program units pursuant to Section 22-8-23.1 NMSA 1978 for students enrolled in a full-time distance learning program operated by a contracted third party that is a for-profit corporation.

C. In fiscal year 2027, a school district's MEM for use in accordance with the Public School Finance Act shall not include students who were enrolled in a full-time distance learning program in fiscal year 2026 if the program was operated by a contracted third party that is a for-profit corporation; provided that this section only applies to a school district with a MEM enrolled in full-time distance learning programs that accounts for more than seventy percent of the district's total MEM.

D. For fiscal year 2027, a student shall not enroll in a school district's or charter school's full-time distance learning program if the student was not enrolled in the program in fiscal year 2026 unless:

(1) the student's enrollment is required or otherwise authorized by the federal Individuals with Disabilities Education Act or Section 504 of the federal Rehabilitation Act of 1973; or

(2) the program is operated by a charter school that has a charter or current charter contract that includes full-time distance learning programs.

E. For fiscal year 2027, a school district or charter school shall not reorganize to create a school district, school or school program that has a majority of students enrolled in a full-time distance learning program. For fiscal year 2027, a school district or the public education commission shall not authorize a new charter school that will have a majority of students enrolled in a full-time distance learning program.

F. A school district or charter school operating a full-time distance learning program as of the effective date of this act shall submit an application to establish a full-time distance learning program in accordance with the Distance Learning Act.

G. As used in this section, "full-time distance learning program" means a public school instructional program in which students receive virtual instruction and are not required to attend school at a school building.

SECTION 14. REPEAL.--Section 22-30-8 NMSA 1978 (being Laws 2007, Chapter 292, Section 7 and Laws 2007, Chapter 293, Section 7) is repealed.

SECTION 15. EFFECTIVE DATE.--The effective date of the provisions of Sections 1 through 12 and 14 of this act is July 1, 2026.

SECTION 16. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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