SANTA FE, N.M. – The measure is part of Gov. Susana Martinez's educational improvement agenda during the legislative session.
Supporters say the grades can help parents by providing a more understandable rating of schools than those used under the federal No Child Left Behind Act.
The legislation cleared the House on a 46-22 vote Thursday and goes to the Senate, which has approved a similar proposal. The two chambers must pass the same bill before it goes to the governor.
The grading system will consider results of standardized tests taken by students and yearly growth of student performance.
Opponents questioned whether the school grading system will improve student achievement.