CHARTER SCHOOLS & NMFA

HB0149

HOUSE BILL 149

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

INTRODUCED BY

Joy Garratt
and
Kristina Ortez
and
D. Wonda Johnson

and
William E. Sharer

AN ACT

RELATING TO CHARTER SCHOOLS; AMENDING THE DEFINITION FOR
"QUALIFIED ENTITY" IN THE NEW MEXICO FINANCE AUTHORITY ACT TO
INCLUDE A NONPROFIT FOUNDATION OR SUPPORT ORGANIZATION
AFFILIATED WITH A CHARTER SCHOOL; AUTHORIZING THE NEW MEXICO
FINANCE AUTHORITY TO MAKE LOANS FROM THE CHARTER SCHOOL
FACILITY REVOLVING FUND TO NONPROFIT FOUNDATIONS OR SUPPORT
ORGANIZATIONS AFFILIATED WITH CHARTER SCHOOLS; REQUIRING THAT
THE AMOUNT OF A GRANT FROM THE PUBLIC SCHOOL CAPITAL OUTLAY
FUND FOR LEASE ASSISTANCE TO A CHARTER SCHOOL BE THE GREATEST
OF THE POSSIBLE AUTHORIZED AMOUNTS; LIMITING A CHARTER SCHOOL'S
LOCAL SHARE OF A PUBLIC SCHOOL CAPITAL OUTLAY PROJECT QUALIFIED
UNDER THE EDUCATIONAL ADEQUACY CATEGORY TO TEN PERCENT; MAKING
CONFORMING AMENDMENTS; MAKING A TRANSFER FROM THE PUBLIC SCHOOL
CAPITAL OUTLAY FUND TO THE CHARTER SCHOOL FACILITY REVOLVING
FUND.

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

SECTION 1.
Section 6-21-3 NMSA 1978 (being Laws 1992,
Chapter 61, Section 3, as amended) is amended to read:

"6-21-3. DEFINITIONS.--As used in the New Mexico Finance
Authority Act:

A. "authority" means the New Mexico finance
authority;

B. "bond" means any bonds, notes, certificates

of participation or other evidence of indebtedness;

C. "bondholder" or "holder" means a person who

is the owner of a bond, whether registered or not;

D. "emergency public project" means a public
project:

(1) made necessary by an unforeseen occurrence
or circumstance threatening the public health, safety or
welfare; and

(2) requiring the immediate expenditure

of money that is not within the available financial resources

of the qualified entity as determined by the authority;

E. "public project" means the acquisition,
construction, improvement, alteration or reconstruction of
assets of a long-term capital nature by a qualified entity,
including land; buildings; water rights; water, sewerage and
waste disposal systems; streets; housing; airports; municipal
utilities; public recreational facilities; public
transportation systems; parking facilities; and machinery,
furniture and equipment. "Public project" includes all
proposed expenditures related to the entire undertaking.
"Public project" also includes the acquisition, construction or
improvement of real property, buildings, facilities and other
assets by the authority for the purpose of leasing the
property;

F. "qualified entity" means the state or an

agency or institution of the state or a county;
a
municipality;

a
school district;
a
two-year public post-secondary educational
institution;
a
charter school;
a
land grant corporation;
an

acequia association;
a
public improvement district;
a
federally
chartered college located in New Mexico;
an
intercommunity
water or natural gas supply association or corporation;
a

special water,
a
drainage,
an
irrigation or
a
conservancy
district or other special district created pursuant to law;
a

rural electric cooperative pursuant to the Rural Electric
Cooperative Act;
a
nonprofit foundation or other support
organization affiliated with a public university, college or
other higher educational institution located in New Mexico,
including a university research park corporation;
a nonprofit
foundation or other support organization affiliated with a
charter school and organized for the purpose of acquiring,
developing, financing or improving the charter school's
facility
; a nonprofit housing developer; an Indian nation,
tribe or pueblo located wholly or partially in New Mexico,
including a political subdivision or a wholly owned enterprise
of an Indian nation, tribe or pueblo or a consortium of those
Indian entities; or a consortium of any two or more qualified
entities created pursuant to law; and

G. "security" or "securities", unless the context
indicates otherwise, means bonds, notes or other evidence of
indebtedness
that are
issued by a qualified entity or leases or
certificates or other evidence of participation in the lessor's
interest in and rights under a lease with a qualified entity
and that are payable from taxes, revenues, rates, charges,
assessments or user fees or from the proceeds of funding or
refunding bonds, notes or other evidence of indebtedness of a
qualified entity or from certificates or evidence of
participation in a lease with a qualified entity."

SECTION 2.
Section 6-21-6.16 NMSA 1978 (being Laws 2022,
Chapter 19, Section 1) is amended to read:

"6-21-6.16. CHARTER SCHOOL FACILITY LOANS--CHARTER SCHOOL
FACILITY REVOLVING FUND--CREATED--REPORTS.--

A. The [
New Mexico finance
] authority may receive
and review applications for charter school facility loans
pursuant to this section. The authority shall adopt rules to
govern the application procedures and requirements for
disbursing charter school facility loans and for determining
the eligibility of charter schools for loans. The authority
may make loans to a
qualified entity that is a
charter school

or a nonprofit foundation or support organization affiliated
with a charter school
for the purchase, construction, expansion
or renovation of facilities or to pay off lease-purchase
agreements; provided that an application shall include:

(1) evidence that any lease-purchase
agreements are in accordance with the Public School Lease
Purchase Act;

(2) evidence that a charter school's charter
has been renewed at least once; and

(3) a review of the last two audits of the
charter school
or nonprofit foundation or support organization
.

B.
If applicable
, the authority may consult with
the applicant's authorizer in evaluating applications; provided
that a final determination shall be made solely by the
authority.

C. Receipts from the repayment of principal or
interest accrued on the charter school facility loans made and
other fees or charges paid to the [
New Mexico finance
]
authority in connection with charter school facility loans
shall be deposited in the charter school facility revolving
fund.

D. The "charter school facility revolving fund" is
created within the [
New Mexico finance
] authority. The fund
consists of appropriations, gifts, grants, donations and money
otherwise accruing to the fund. The fund shall be administered
by the authority as a separate account and may consist of such
subaccounts as the authority deems necessary to carry out the
purposes of the fund. The authority may establish procedures
for administering the fund in accordance with the provisions of
this section. Balances in the fund at the end of a fiscal year
shall not revert to any other fund.

E. Money in the charter school facility revolving
fund is appropriated to the [
New Mexico finance
] authority to
make charter school facility loans and to pay the reasonably
necessary administrative and other costs incurred by the
authority in evaluating, processing, originating and servicing
loans.

F. Money in the charter school facility revolving
fund that is not needed for immediate disbursement, including
money held in reserve, may be deposited or invested in the same
manner as other funds administered by the [
New Mexico finance
]
authority.

G. Prior to December 1, 2023 and each December 1
thereafter, the [
New Mexico finance
] authority shall submit a
report to the New Mexico finance authority oversight committee.
The report shall provide details regarding any loans made
pursuant to this section.

H. The [
New Mexico finance
] authority may exercise
any power provided to the authority in the New Mexico Finance
Authority Act to assist in the administration of this section;
provided that the power is consistent with the provisions of
that act."

SECTION 3.
Section 22-24-4 NMSA 1978 (being Laws 1975,
Chapter 235, Section 4, as amended) is amended to read:

"22-24-4. PUBLIC SCHOOL CAPITAL OUTLAY FUND CREATED--USE.--

A. The "public school capital outlay fund" is
created. Balances remaining in the fund at the end of each
fiscal year shall not revert.

B. Except as provided in Subsections G and I
through N of this section, money in the fund may be used only
for capital expenditures deemed necessary by the council for an
adequate educational program.

C. The council may authorize the purchase by the
authority of portable classrooms to be loaned to school
districts to meet a temporary requirement. Payment for these
purchases shall be made from the fund. Title to and custody of
the portable classrooms shall rest in the authority. The
council shall authorize the lending of the portable classrooms
to school districts upon request and upon finding that
sufficient need exists. Application for use or return of
state-owned portable classroom buildings shall be submitted by
school districts to the council. Expenses of maintenance of
the portable classrooms while in the custody of the authority
shall be paid from the fund; expenses of maintenance and
insurance of the portable classrooms while in the custody of a
school district shall be the responsibility of the school
district. The council may authorize the permanent disposition
of the portable classrooms by the authority with prior approval
of the state board of finance.

D. Applications for assistance from the fund shall
be made by school districts to the council in accordance with
requirements of the council. Except as provided in Subsection
K of this section, the council shall require as a condition of
application that a school district have a current five-year
facilities plan that shall include a current preventive
maintenance plan to which the school adheres for each public
school in the school district.

E. The council shall review all requests for
assistance from the fund and shall allocate funds only for
those capital outlay projects that meet the criteria of the
Public School Capital Outlay Act.

F. Money in the fund shall be disbursed by warrant
of the department of finance and administration on vouchers
signed by the secretary of finance and administration following
certification by the council that an application has been
approved or an expenditure has been ordered by a court pursuant
to Section 22-24-5.4 NMSA 1978. At the discretion of the
council, money for a project shall be distributed as follows:

(1) up to ten percent of the portion of the
project cost funded with distributions from the fund or five
percent of the total project cost, whichever is greater, may be
paid to the school district before work commences with the
balance of the grant award made on a cost-reimbursement basis;
or

(2) the council may authorize payments
directly to the contractor.

G. Balances in the fund may be annually
appropriated for the core administrative functions of the
authority pursuant to the Public School Capital Outlay Act,
and, in addition, balances in the fund may be expended by the
authority, upon approval of the council, for project management
expenses; provided that:

(1) the total annual expenditures from the
fund for the core administrative functions pursuant to this
subsection shall not exceed five percent of the average annual
grant assistance authorized from the fund during the five
previous fiscal years; and

(2) any unexpended or unencumbered balance
remaining at the end of a fiscal year from the expenditures
authorized in this subsection shall revert to the fund.

H. The fund may be expended by the council for
building system repair, renovation or replacement initiatives
with projects to be identified by the council pursuant to
Section 22-24-4.6 NMSA 1978; provided that money allocated
pursuant to this subsection shall be expended within three
years of the allocation.

I. The fund shall be expended annually by the
council for grants to school districts for the purpose of
making lease payments for facilities, including facilities
leased by charter schools. The grants shall be made upon
application by the school districts and pursuant to rules
adopted by the council; provided that an application on behalf
of a charter school shall be made by the school district; [
but
]

and provided further that
if the school district fails to make
an application on behalf of a charter school, the charter
school may submit its own application. The following criteria
[
shall apply
]
apply
to the grants:

(1) the amount of a grant to a school district
or charter school:

(a)
shall not exceed [
(a)
] the actual
annual lease payments owed for leasing a facility; [
or
]
and

(b) [
seven hundred dollars ($700)
]
shall
not be less than one thousand fifty-two dollars ($1,052)

multiplied by the MEM using the leased facilities; provided
that in fiscal year [
2009
]
2027
and in each subsequent fiscal
year, this amount shall be adjusted by the percentage change
between the penultimate calendar year and the immediately
preceding calendar year of the consumer price index for the
United States, all items, as published by the United States
department of labor;

(2) a grant received for the lease payments of
a charter school may be used by that charter school as a state
match necessary to obtain federal grants pursuant to the
federal Every Student Succeeds Act
or for the repayment of
principal or interest accrued on a charter school facility loan
made and other fees or charges imposed by the New Mexico
finance authority in connection with the charter school
facility loan
;

(3) at the end of each fiscal year, any
unexpended or unencumbered balance of the grant shall revert to
the fund;

(4) no grant shall be made for lease payments
due pursuant to a financing agreement under which the
facilities may be purchased for a price that is reduced
according to the lease payments made unless:

(a) the agreement has been approved
pursuant to the provisions of the Public School Lease Purchase
Act; and

(b) the facilities are leased by a
charter school;

(5) if the lease payments are made pursuant to
a financing agreement under which the facilities may be
purchased for a price that is reduced according to the lease
payments made, neither a grant nor any provision of the Public
School Capital Outlay Act creates a legal obligation for the
school district or charter school to continue the lease from
year to year or to purchase the facilities nor does it create a
legal obligation for the state to make subsequent grants
pursuant to the provisions of this subsection; and

(6) as used in this subsection:

(a) "MEM" means: 1) the average full-time-equivalent enrollment using leased facilities on the
second and third reporting dates of the prior school year; or
2) in the case of an approved charter school that has not
commenced classroom instruction, the estimated full-time-equivalent enrollment that will use leased facilities in the
first year of instruction, as shown in the approved charter
school application; provided that, after the second reporting
date of the current school year, the MEM shall be adjusted to
reflect the full-time-equivalent enrollment on that date; and

(b) "facilities" includes the space
needed for school activities.

J. In addition to other authorized expenditures
from the fund, up to one percent of the average grant
assistance authorized from the fund during the three previous
fiscal years may be expended in each fiscal year by the
authority to pay the state fire marshal, the construction
industries division of the regulation and licensing department
and local jurisdictions having authority from the state to
permit and inspect projects for expenditures made to permit and
inspect projects funded in whole or in part under the Public
School Capital Outlay Act. The authority may enter into
contracts with the state fire marshal, the construction
industries division or the appropriate local authorities to
carry out the provisions of this subsection. Such a contract
may provide for initial estimated payments from the fund prior
to the expenditures if the contract also provides for
additional payments from the fund if the actual expenditures
exceed the initial payments and for repayments back to the fund
if the initial payments exceed the actual expenditures. Money
distributed from the fund to the state fire marshal or the
construction industries division pursuant to this subsection
shall be used to supplement, rather than supplant,
appropriations to those entities.

K. Pursuant to guidelines established by the
council, allocations from the fund may be made to assist school
districts in developing and updating five-year facilities plans
required by the Public School Capital Outlay Act; provided
that:

(1) no allocation shall be made unless the
council determines that the school district is willing and able
to pay the portion of the total cost of developing or updating
the plan that is not funded with the allocation from the fund.
Except as provided in Paragraph (2) of this subsection, the
portion of the total cost to be paid with the allocation from
the fund shall be determined pursuant to the methodology in
Subsection B of Section 22-24-5 NMSA 1978; or

(2) the allocation from the fund may be used
to pay the total cost of developing or updating the plan if:

(a) the school district has fewer than
an average of six hundred full-time-equivalent students on the
second and third reporting dates of the prior school year; or

(b) the school district meets all of the
following requirements: 1) the school district has fewer than
an average of one thousand full-time-equivalent students on the
second and third reporting dates of the prior school year; 2)
the school district has at least seventy percent of its
students eligible for free or reduced-fee lunch; 3) the state
share of the total cost, if calculated pursuant to the
methodology in Subsection B of Section 22-24-5 NMSA 1978, would
be less than fifty percent; and 4) for all educational
purposes, the school district has a residential property tax
rate of at least seven dollars ($7.00) on each one thousand
dollars ($1,000) of taxable value, as measured by the sum of
all rates imposed by resolution of the local school board plus
rates set to pay interest and principal on outstanding school
district general obligation bonds.

L. Upon application by a school district,
allocations from the fund may be made by the council for the
purpose of demolishing abandoned school district facilities;
provided that:

(1) the costs of continuing to insure an
abandoned facility outweigh any potential benefit when and if a
new facility is needed by the school district;

(2) there is no practical use for the
abandoned facility without the expenditure of substantial
renovation costs; and

(3) the council may enter into an agreement
with the school district to fully fund the demolition of the
abandoned school district facility if Paragraphs (1) and (2) of
this subsection are satisfied.

M. The fund may be expended in each of fiscal years
2020 through 2024 for a pre-kindergarten classroom facilities
initiative project in accordance with Section 22-24-12 NMSA
1978.

N. The council may fund pre-kindergarten classrooms
with a qualifying, awarded standards-based project; provided
that pre-kindergarten classroom space shall not be included in
the project prioritization calculation adopted by the council
pursuant to Section 22-24-5 NMSA 1978. The council shall
develop pre-kindergarten classroom standards to use when
funding pre-kindergarten space."

SECTION 4.
Section 22-24-5 NMSA 1978 (being Laws 1975,
Chapter 235, Section 5, as amended by Laws 2025, Chapter 16,
Section 1 and by Laws 2025, Chapter 82, Section 4) is amended
to read:

"22-24-5. PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS--APPLICATION--GRANT ASSISTANCE.--

A. Applications for grant assistance, approval of
applications, prioritization of projects and grant awards shall
be conducted pursuant to the provisions of this section.

B. Except as provided in Sections 22-24-4.3,
22-24-5.4 and 22-24-5.6 NMSA 1978, the following provisions
govern grant assistance from the fund for a public school
capital outlay project not wholly funded pursuant to Section
22-24-4.1 NMSA 1978:

(1) all school districts are eligible to apply
for funding from the fund, regardless of percentage of
indebtedness;

(2) priorities for funding shall be determined
by using the statewide adequacy standards developed pursuant to
Subsection C of this section; provided that:

(a) the council shall apply the
standards to charter schools to the same extent that they are
applied to other public schools;

(b) the council may award grants
annually to school districts for the purpose of repairing,
renovating or replacing public school building systems in
existing buildings as identified in Section 22-24-4.6 NMSA
1978;

(c) the council shall adopt and apply
adequacy standards appropriate to the unique needs of the
constitutional special schools; and

(d) in an emergency in which the health
or safety of students or school personnel is at immediate risk
or in which there is a threat of significant property damage,
the council may award grant assistance for a project using
criteria other than the statewide adequacy standards;

(3) the council shall establish criteria to be
used in public school capital outlay projects that receive
grant assistance pursuant to the Public School Capital Outlay
Act. In establishing the criteria, the council shall consider:

(a) the feasibility of using design,
build and finance arrangements for public school capital outlay
projects;

(b) the potential use of more durable
construction materials that may reduce long-term operating
costs;

(c) concepts that promote efficient but
flexible utilization of space; and

(d) any other financing or construction
concept that may maximize the dollar effect of the state grant
assistance;

(4) no more than ten percent of the combined
total of grants in a funding cycle shall be used for
retrofitting existing facilities for technology infrastructure;

(5) no later than May 1 of each calendar year,
the phase two formula value shall be calculated for each school
district in accordance with the following procedure:

(a) the sum of the final prior five
years net taxable value for a school district multiplied by
nine ten-thousandths for that school district is calculated for
each school district;

(b) the maximum allowable gross square
foot per student multiplied by the replacement cost per square
foot divided by forty-five is calculated for each school
district;

(c) the value calculated pursuant to
Subparagraph (a) of this paragraph divided by the value
calculated pursuant to Subparagraph (b) of this paragraph is
calculated for each school district;

(d) in those instances in which the
calculation pursuant to Subparagraph (c) of this paragraph
yields a value equal to or greater than one, the phase two
formula value shall be zero for the subject school district;

(e) in those instances in which the
calculation pursuant to Subparagraph (c) of this paragraph
yields a value of ninety-hundredths or more but less than one,
the phase two formula value shall be one minus the value
calculated in Subparagraph (c) of this paragraph; and

(f) in those instances in which the
calculation pursuant to Subparagraph (c) of this paragraph
yields a value less than ninety-hundredths, the phase two
formula value shall be one minus the value calculated in
Subparagraph (c) of this paragraph plus the school district
population density factor;

(6) the state share of a project approved by
the council shall be funded within available resources pursuant
to the provisions of this paragraph. Except as provided in
Section 22-24-5.7 NMSA 1978 and except as adjusted pursuant to
Paragraph (8), (9) or (10) of this subsection, the amount to be
distributed from the fund for an approved project shall equal
the total project cost multiplied by the following percentage;
[
except
]
provided
that in no case shall the state share be less
than six percent:

(a) for fiscal year 2024 through fiscal
year 2027, the percentage shall be the phase two formula value
plus a percentage equal to one-third of the difference between
one and the phase two formula value; provided that, for school
districts with fewer than 200 MEM, the percentage shall be the
phase two formula value plus a percentage equal to one-half of
the difference between one and the phase two formula; and

(b) for fiscal year 2028 and thereafter,
the percentage shall be the phase two formula value;

(7) as used in this subsection:

(a) "governmental entity" includes an
Indian nation, tribe or pueblo;

(b) "phase two formula value" for a
state-chartered charter school means the phase two formula
value calculated pursuant to Paragraph (5) of this subsection
for the school district in which the state-chartered charter
school is physically located;

(c) "subject school district" means the
school district that has submitted the application for funding
and in which the approved public school capital outlay project
will be located; and

(d) "total project cost" means the total
amount necessary to complete the public school capital outlay
project less any insurance reimbursement received by the school
district for the project;

(8) the amount calculated pursuant to
Paragraph (6) of this subsection may be increased by an
additional five percent if the council finds that the subject
school district has been exemplary in implementing and
maintaining a preventive maintenance program. The council
shall adopt such rules as are necessary to implement the
provisions of this paragraph;

(9) the council may adjust the amount of a
school district's local share otherwise required if it
determines that the school district has made a good-faith
effort to use all of its local resources. Before making any
adjustment to the local share, the council shall consider
whether:

(a) the school district has insufficient
bonding capacity over the next four years to provide the local
match necessary to complete the project and, for all
educational purposes, has a residential property tax rate of at
least ten dollars ($10.00) on each one thousand dollars
($1,000) of taxable value, as measured by the sum of all rates
imposed by resolution of the local school board plus rates set
to pay interest and principal on outstanding school district
general obligation bonds; or

(b) the school district has fewer than
an average of one thousand five hundred full-time-equivalent
students on the second and third reporting dates of the prior
school year and
has
, for all educational purposes, [
has
] a
residential property tax rate of at least seven dollars ($7.00)
on each one thousand dollars ($1,000) of taxable value as
measured by the sum of all rates imposed by resolution of the
local school board plus rates set to pay interest and principal
on outstanding school district general obligation bonds;

(10) the local [
match
]
share
for the
constitutional special schools shall be set at fifty percent
for projects that qualify under the educational adequacy
category and one hundred percent for projects that qualify in
the support spaces category; provided that the council may
adjust or waive the amount of any direct appropriation offset
to or local share required for the constitutional special
schools if an applicant constitutional special school has
insufficient or no local resources available;

(11) a charter school's local share for a
project that qualifies under the educational adequacy category
shall not exceed ten percent, and the local share for all other
projects shall be calculated in accordance with Paragraph (5)
of this subsection
; and

[
(11)
]
(12)
no application for grant
assistance from the fund shall be approved unless the council
determines that:

(a) the public school capital outlay
project is needed and included in the school district's five-year facilities plan among its top priorities;

(b) the school district has used its
capital resources in a prudent manner;

(c) the school district has provided
insurance for buildings of the school district in accordance
with the provisions of Section 13-5-3 NMSA 1978;

(d) the school district has submitted

a five-year facilities plan that includes: 1) enrollment
projections; 2) a current preventive maintenance plan

that has been approved by the council pursuant to Section
22-24-5.3 NMSA 1978 and that is followed by each public school
in the district; 3) the capital needs of charter schools
located in the school district; and 4) projections for the
facilities needed in order to maintain a full-day kindergarten
program;

(e) the school district is willing and
able to pay any portion of the total cost of the public school
capital outlay project that, according to Paragraph (6), (8) or
(9) of this subsection, is not funded with grant assistance
from the fund;

(f) the application includes the capital
needs of any charter school located in the school district or
the school district has shown that the facilities of the
charter school have a smaller deviation from the statewide
adequacy standards than other district facilities included in
the application; and

(g) the school district has agreed, in
writing, to comply with any reporting requirements or
conditions imposed by the council pursuant to Section 22-24-5.1
NMSA 1978.

C. After consulting with the public school capital
outlay oversight task force and other experts, the council
shall regularly review and update statewide adequacy standards
applicable to all school districts. The standards shall
establish the acceptable level for the physical condition and
capacity of buildings, the educational suitability of
facilities and the need for career-technical education
facilities or classrooms. The council shall collaborate with
the office of broadband access and expansion in the development
of education technology infrastructure standards in accordance
with the provisions of the Broadband Access and Expansion Act
and apply those standards to the statewide adequacy standards.
Except as otherwise provided in the Public School Capital
Outlay Act, the amount of outstanding deviation from the
standards shall be used by the council in evaluating and
prioritizing public school capital outlay projects.

D. The acquisition of a facility by a school
district or charter school pursuant to a financing agreement
that provides for lease payments with an option to purchase for
a price that is reduced according to lease payments made may be
considered a public school capital outlay project and eligible
for grant assistance under this section pursuant to the
following criteria:

(1) no grant shall be awarded unless the
council determines that, at the time of exercising the option
to purchase the facility by the school district or charter
school, the facility will equal or exceed the statewide
adequacy standards and the building standards for public school
facilities;

(2) no grant shall be awarded unless the
school district and the need for the facility meet all of the
requirements for grant assistance pursuant to the Public School
Capital Outlay Act;

(3) the total project cost shall equal the
total payments that would be due under the agreement if the
school district or charter school would eventually acquire
title to the facility;

(4) the portion of the total project cost to
be paid from the fund may be awarded as one grant, but
disbursements from the fund shall be made from time to time as
lease payments become due;

(5) the portion of the total project cost to
be paid by the school district or charter school may be

paid from time to time as lease payments become due; and

(6) neither a grant award nor any provision of
the Public School Capital Outlay Act creates a legal obligation
for the school district or charter school to continue the lease
from year to year or to purchase the facility.

E. In order to encourage private capital investment
in the construction of public school facilities, the purchase
of a privately owned school facility that is, at the time of
application, in use by a school district may be considered a
public school capital outlay project and eligible for grant
assistance pursuant to this section if the council finds that:

(1) at the time of the initial use by the
school district, the facility to be purchased equaled or
exceeded the statewide adequacy standards and the building
standards for public school facilities;

(2) at the time of application, attendance at
the facility to be purchased is at seventy-five percent or
greater of design capacity and the attendance at other schools
in the school district that the students at the facility would
otherwise attend is at eighty-five percent or greater of design
capacity; and

(3) the school district and the capital outlay
project meet all of the requirements for grant assistance
pursuant to the Public School Capital Outlay Act; provided
that, when determining the deviation from the statewide
adequacy standards for the purposes of evaluating and
prioritizing the project, the students using the facility shall
be deemed to be attending other schools in the school district.

F. [
It is the intent of the legislature that
] Grant
assistance
is
made pursuant to this section [
allows every
]
to
allow a
school district to meet the standards developed
pursuant to Subsection C of this section; provided [
however
]
that nothing in the Public School Capital Outlay Act or the
[
development of
] standards
developed
pursuant to that act
prohibits a school district from using other funds available to
the district to exceed the statewide adequacy standards.

G. Upon request, the council shall work with, and
provide assistance and information to, the public school
capital outlay oversight task force.

H. The council may establish committees or task
forces, not necessarily consisting of council members, and may
use the committees or task forces, as well as existing agencies
or organizations, to conduct studies, conduct surveys, submit
recommendations or otherwise contribute expertise from the
public schools, programs, interest groups and segments of
society most concerned with a particular aspect of the
council's work.

I. Upon the recommendation of the authority, the
council shall develop building standards for public school
facilities and shall promulgate other such rules as are
necessary to carry out the provisions of the Public School
Capital Outlay Act.

J. No later than December 15 of each year, the
council shall prepare a report summarizing its activities
during the previous fiscal year. The report shall describe in
detail all projects funded, the progress of projects previously
funded but not completed, the criteria used to prioritize and
fund projects and all other council actions. The
council shall
submit the
report [
shall be submitted
]
to the public education
commission, the governor, the legislative finance committee,
the legislative education study committee and the legislature.

K. For any school district that received a
standards- or systems-based award from the council in fiscal
year 2023, the state share for any future phase of the project
for which funding has not yet been awarded shall be the amount
calculated pursuant to Subsection B of this section for fiscal
year 2024, regardless of the state share at the time of the
initial award.

L. As used in this section:

(1) "MEM" means membership; and

(2) "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 in need of
early intervention and habitual truants the school district is
required to intervene with and keep in an educational setting."

SECTION 5.
TRANSFER.--On the effective date of this act,
twenty million dollars ($20,000,000) is transferred from the
public school capital outlay fund to the charter school
facility revolving fund.