H539 [Edition 2]

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2015

H 2

HOUSE BILL 539

Senate Finance Committee Substitute Adopted 9/21/15

Short Title: Charter School Funding.		(Public)
Sponsors:
Referred to:

April 6, 2015

A BILL TO BE ENTITLED

AN ACT to PROVIDE FOR DAMAGES WHEN FUNDS ARE NOT TRANSFERRED WITHIN REQUIRED TIME LINES BETWEEN LOCAL SCHOOL ADMINISTRATIVE UNITS AND CHARTER SCHOOLS and modify charter school funding and the uniform budget format for local school ADMINISTRATIVE units.

The General Assembly of North Carolina enacts:

SECTION 1.(a) G.S. 115C‑218.105(e) reads as rewritten:

"(e) Prior to commencing an action under subsection (c) of this section, the complaining party shall give the other party 15 days' written notice of the alleged violation. The court shall award the prevailing party reasonable attorneys' fees and court costs incurred in an action under subsection (c) of this section. The court shall also award the prevailing party liquidated damages in an amount equal to five percent (5%) of the monies that should have been transferred under subsection (c) of this section as compensation for administrative expenses incurred by the prevailing party due to the unavailability of those monies. The court shall order any delinquent funds, court costs, fees, liquidated damages, and interest to be paid in equal monthly installments and shall establish a time for payment in full that shall be no later than one year from the entry of any judgment."

SECTION 1.(b) This section is effective when it becomes law and applies to any actions filed on or after that date.

SECTION 2.(a) G.S. 115C‑218.105(c) reads as rewritten:

"(c) If a student attends a charter school, the local school administrative unit in which the child resides shall transfer to the charter school an amount equal to the per pupil share of the local current expense fund of the local school administrative unit for the fiscal year. The per pupil share of the local current expense fund shall be transferred to the charter school within 30 days of the receipt of monies into the local current expense fund. The local school administrative unit and charter school may use the process for mediation of differences between the State Board and a charter school provided in G.S. 115C‑218.95(d) to resolve differences on calculation and transference of the per pupil share of the local current expense fund. The amount transferred under this subsection that consists of revenue derived from supplemental taxes shall be transferred only to a charter school located in the tax district for which these taxes are levied and in which the student resides."

SECTION 2.(b) G.S. 115C‑426 reads as rewritten:

"§ 115C‑426. Uniform budget format.

…

(1) The State Public School Fund.

(2) The local current expense fund.

(3) The capital outlay fund.

In addition, other funds may be used to account for reimbursements, including indirect costs, fees for actual costs, tuition, sales tax revenues distributed using the ad valorem method pursuant to G.S. 105‑472(b)(2), sales tax refunds, gifts and grants restricted as to use, trust funds, federal appropriations made directly to local school administrative units, and funds received for prekindergarten programs. In addition, the appropriation or use of fund balance or interest income by a local school administrative unit shall not be construed as a local current expense appropriation included as a part of the local current expense fund.

(c1) In addition to the requirements of subsection (c) of this section, other funds may be used only for the following:

(1) Moneys received for prekindergarten programs.

(2) Moneys received for the federal Junior Reserve Officer Training Corps program.

(3) Federal grants that are restricted as to use and required by the donor to be held in a specific fund.

(4) Rental fees for the use of facilities of public schools other than charter schools.

(5) Sales tax refunds.

(6) Tuition.

(7) Gifts or grants (i) that expressly exclude charter schools; (ii) that have been expressly restricted by the donor or grantor to an individual school; or (iii) that were given or pledged prior to July 1, 2015.

(8) Enterprise funds where the local school administrative unit collects a fee for service.

(9) Fund balances used or accruing for the local school administrative unit's current operating expenses.

(10) Interest income.

(c2) Each local school administrative unit shall maintain those funds shown in the uniform budget format that are applicable to its operations.

…

(e) The local current expense fund shall include appropriations sufficient, when added to appropriations from the State Public School Fund, for the current operating expense of the public school system in conformity with the educational goals and policies of the State and the local board of education, within the financial resources and consistent with the fiscal policies of the board of county commissioners. These appropriations shall be funded by revenues accruing to the local school administrative unit by virtue of Article IX, Sec. 7 of the Constitution, moneys made available to the local school administrative unit by the board of county commissioners, supplemental taxes levied by or on behalf of the local school administrative unit pursuant to a local act or G.S. 115C‑501 to 115C‑511, State money disbursed directly to the local school administrative unit, and other moneys made available or accruing to the local school administrative unit for the current operating expenses of the public school system.

(e1) As used in subsection (e) of this section, the phrase "other moneys made available or accruing to the local school administrative unit" shall include, but is not limited to, all of the following:

(1) Moneys received for indirect costs.

(2) Reimbursements, except for Medicare and Medicaid reimbursements for a particular student.

(3) Fees for actual costs.

(4) Sales tax revenues regardless of how they are distributed.

(5) Gifts and grants not subject to the restrictions set forth in subdivision (3) or subdivision (7) of subsection (c1) of this section.

(6) Federal appropriations made directly to local school administrative units."

SECTION 3. Except as otherwise provided, this act becomes effective July 1, 2016, and applies beginning with the 2016‑2017 school year.