GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2017

 

SESSION LAW 2017-57

SENATE BILL 257

 

 

AN ACT TO MAKE BASE BUDGET APPROPRIATIONS FOR CURRENT OPERATIONS OF STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES.

 

The General Assembly of North Carolina enacts:

 

PART I. TITLE OF ACT AND INTRODUCTION

 

TITLE OF ACT

SECTION 1.1.  This act shall be known as the "Current Operations Appropriations Act of 2017."

 

INTRODUCTION

SECTION 1.2.  The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget in accordance with the State Budget Act. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes, and the savings shall revert to the appropriate fund at the end of each fiscal year, except as otherwise provided by law.

 

PART II. CURRENT OPERATIONS AND EXPANSION GENERAL FUND

 

CURRENT OPERATIONS AND EXPANSION/GENERAL FUND

SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, are made for the fiscal biennium ending June 30, 2019, according to the following schedule:

 

Current Operations – General Fund                                    FY 2017‑2018         FY 2018‑2019

 

EDUCATION

 

Community Colleges System Office                                    $ 1,121,815,001       $ 1,141,757,845

 

Department of Public Instruction                                            9,046,403,622          9,425,109,426

 

Appalachian State University                                                     134,672,993             134,672,993

East Carolina University

      Academic Affairs                                                                 214,598,809             214,598,809

      Health Affairs                                                                         74,373,798               75,014,745

Elizabeth City State University                                                    31,964,712               31,154,712

Fayetteville State University                                                        52,116,162               52,116,162

NC A&T State University                                                            92,703,482               92,703,482

NC Central University                                                                  83,243,559               83,243,559

NC State University

      Academic Affairs                                                                 410,148,050             407,648,050

      Agricultural Extension                                                            39,095,231               39,195,231

      Agricultural Research                                                             52,636,905               52,636,905

UNC‑Asheville                                                                             38,750,625               38,750,625

UNC‑Chapel Hill

      Academic Affairs                                                                 252,574,119             251,809,119

      Health Affairs                                                                       195,665,032             195,305,973

      AHEC                                                                                     48,783,693               48,783,693

UNC‑Charlotte                                                                           226,376,692             226,376,692

UNC‑Greensboro                                                                        150,156,774             150,156,774

UNC‑Pembroke                                                                            53,711,549               53,715,428

UNC‑School of the Arts                                                               30,424,499               30,424,499

UNC‑Wilmington                                                                       120,327,946             120,327,946

Western Carolina University                                                         89,729,461               89,730,641

Winston‑Salem State University                                                   64,717,512               64,717,512

General Administration                                                                42,172,369               42,172,369

University Institutional Programs                                               108,655,110             173,791,646

Related Educational Programs                                                   109,968,501             109,968,501

NC School of Science & Math                                                     20,958,012               20,959,212

Aid to Private Institutions                                                          155,249,754             167,799,754

 

Total University of North Carolina – Board of Governors     2,893,775,349          2,967,775,032

 

HEALTH AND HUMAN SERVICES

 

Department of Health and Human Services

      Central Management and Support                                        117,155,209             122,769,405

      Division of Aging & Adult Services                                      46,076,033               45,149,105

      Division of Blind Services/Deaf/HH                                        8,446,767                 8,507,081

      Division of  Child Development & Early Education            268,428,501             278,332,315

      Division of Health Service Regulation                                   18,773,807               19,396,718

      Division of Medical Assistance                                         3,690,755,171          3,801,681,212

      Division of Mental Health, Developmental Disabilities,

            & Substance Abuse Services                                          696,268,319             705,030,589

      NC Health Choice                                                                       459,248                    396,409

      Division of Health Benefits                                                      9,735,051                 9,779,090

      Division of Public Health                                                     157,394,523             154,985,218

      Division of Social Services                                                   200,973,125             205,204,844

      Division of Vocational Rehabilitation                                    38,833,788               39,055,491

Total Health and Human Services                                           5,253,299,542          5,390,287,477

 

NATURAL AND ECONOMIC RESOURCES

 

Department of Agriculture and Consumer Services                   133,669,904             122,853,685

 

Department of Commerce

      Commerce                                                                             140,649,732             130,158,878

      Commerce State‑Aid                                                              20,100,810               16,155,810

 

Wildlife Resources Commission                                                   11,178,987               10,843,541

 

Department of Environmental Quality                                         78,170,327               77,012,714

 

Department of Labor                                                                    17,614,979               17,819,951

 

Department of Natural and Cultural Resources                         185,613,349             174,477,424

Department of Natural and Cultural

      Resources – Roanoke Island                                                        555,571                    555,571

 

JUSTICE AND PUBLIC SAFETY

 

Department of Public Safety                                                   2,002,700,046          2,020,592,037

 

Judicial Department                                                                    530,239,572             539,023,422

 

Judicial Department – Indigent Defense                                    121,304,090             122,280,359

 

Department of Justice                                                                   47,711,294               46,511,531

 

GENERAL GOVERNMENT

 

Department of Administration                                                     63,691,021               63,396,752

 

Office of Administrative Hearings                                                 5,962,480                 6,010,687

 

Office of State Auditor                                                                13,828,208               13,780,531

 

Office of State Controller                                                             20,873,868               23,243,476

 

State Board of Elections                                                                 6,624,283                 6,686,614

 

General Assembly                                                                         65,975,613               65,973,007

 

Office of the Governor                                                                   5,374,977                 4,976,409

 

Office of the Governor – Special Projects                                                    0                               0

 

Office of State Budget and Management

      Office of State Budget and Management                                8,180,546                 8,255,244

      OSBM – Reserve for Special Appropriations                           8,740,000                 2,000,000

 

Housing Finance Agency                                                              14,609,159               30,660,000

 

Department of Insurance                                                              48,838,212               48,314,700

 

Office of Lieutenant Governor                                                          793,708                    771,497

 

Department of Military and Veterans Affairs                              11,457,358                 8,960,743

 

Department of Revenue                                                                84,645,611               85,483,970

 

Department of Secretary of State                                                 13,104,311               13,314,943

 

Department of State Treasurer

      State Treasurer                                                                          4,813,596                 4,832,053

      State Treasurer – Retirement for Fire

            and Rescue Squad Workers                                              27,861,861               28,211,861

 

DEPARTMENT OF INFORMATION TECHNOLOGY     51,500,581               51,646,845

 

RESERVES, ADJUSTMENTS, AND DEBT SERVICE

 

Contingency & Emergency Fund                                                                 0                               0

Classification and Compensation System                                       3,900,000                 7,800,000

Workers' Compensation Settlement Reserve                                  2,000,000                               0

Salary Adjustment Fund                                                                 5,000,000                 5,000,000

Pay Plan Reserve                                                                            9,688,494                               0

University System Enrollment Reserve                                        46,571,112               94,734,518

Public Schools Average Daily Membership Reserve                                    0               48,410,289

NC Promise Tuition Plan                                                                              0               11,000,000

Film and Entertainment Grant Fund                                            15,000,000               31,000,000

Pending Legislation (Supplemental Disaster

      Recovery Funds and House Bill 589,

      Competitive Energy Solutions for N.C.)                              100,150,000                    500,000

Enterprise Resource Planning                                                         3,000,000               10,000,000

 

Debt Service

      General Debt Service                                                            727,166,339             770,458,736

      Federal Reimbursement                                                            1,616,380                 1,616,380

 

TOTAL CURRENT OPERATIONS –

      GENERAL FUND                                                     $ 22,975,769,893     $ 23,650,253,958

 

GENERAL FUND AVAILABILITY STATEMENT

SECTION 2.2.(a)  The General Fund availability used in developing the 2017‑2019 fiscal biennial budget is shown below:

 

                                                                                                 FY 2017‑2018          FY 2018‑2019

Unappropriated Balance                                                          $ 208,607,416          $ 499,303,328

Disaster Recovery Appropriations (S.L. 2016‑124)                  (200,928,370)                              0

Transfer From Savings Reserve                                                  100,928,370                               0

Revised Unappropriated Balance                                            108,607,416             499,303,328

 

Over Collections FY 2016‑17                                                     580,600,000                               0

Reversions FY 2016‑17                                                              271,000,000                               0

Replenish Savings Reserve (S.L. 2016‑124)                             (100,928,370)                              0

Earmarkings of Year End Fund Balance:

      Savings Reserve                                                                   (263,000,000)                              0

      Repairs and Renovations                                                     (125,000,000)                              0

Beginning Unreserved Fund Balance                                     471,279,046             499,303,328

 

Revenues Based on Existing Tax Structure                       22,303,700,000        23,299,200,000

 

Non‑tax Revenues

Investment Income                                                                       60,100,000               60,600,000

Judicial Fees                                                                                240,900,000             240,500,000

Disproportionate Share                                                               164,700,000             149,600,000

Insurance                                                                                       75,500,000               75,500,000

Master Settlement Agreement (MSA)                                        127,200,000             127,200,000

Other Non‑Tax Revenues                                                           180,600,000             182,900,000

Subtotal Non‑tax Revenues                                                      849,000,000             836,300,000

 

Total General Fund Availability                                         23,623,979,046        24,634,803,328

 

Adjustments to Availability:  2017 Session

Tax Law Changes                                                                          (6,900,000)           (521,800,000)

Transfer of Taxes From Short‑Term Lease

      or Rental of Motor Vehicles to Highway Fund                    (10,000,000)             (10,000,000)

Transfer to Savings Reserve (S.L. 2017‑5)                                                   0              (72,090,000)

Transfer Additional MSA funds to Golden L.E.A.F.                   (7,500,000)               (7,500,000)

Transfer to Medicaid Transformation Fund                                (75,000,000)                              0

Transfer from Contingency and Emergency Fund                         7,000,000                               0

Transfer from Department of Insurance                                         3,655,405                 4,026,728

Transfer from the Department of the State Treasurer                   (5,453,230)               (5,434,773)

 

Subtotal Adjustments to Availability:  2017 Session               (94,197,825)           (612,798,045)

 

Revised General Fund Availability                                 $ 23,529,781,221     $ 24,022,005,283

 

Less General Fund Net Appropriations                                (23,030,477,893)      (23,652,171,951)

 

Unappropriated Balance Remaining                                   $ 499,303,328          $ 369,833,332

 

SECTION 2.2.(b)  Notwithstanding the provisions of G.S. 143C‑4‑3(a), the State Controller shall transfer a total of one hundred twenty-five million dollars ($125,000,000) from the unreserved fund balance to the Repairs and Renovations Reserve on June 30, 2017. This subsection becomes effective June 30, 2017. Funds transferred under this section to the Repairs and Renovations Reserve are appropriated for the 2017‑2018 fiscal year and shall be used in accordance with Section 36.5 of this act.

SECTION 2.2.(c)  Notwithstanding G.S. 143C‑4‑2, the State Controller shall transfer a total of three hundred sixty‑three million nine hundred twenty‑eight thousand three hundred seventy dollars ($363,928,370) from the unreserved fund balance to the Savings Reserve Account on June 30, 2017. This transfer is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2017.

SECTION 2.2.(d)  The State Controller shall reserve from funds available in the General Fund the sum of seventy‑five million dollars ($75,000,000) in nonrecurring funds for the 2017‑2018 fiscal year. The funds reserved in this subsection shall be transferred and deposited in the Medicaid Transformation Fund established in Section 12H.29 of S.L. 2015‑241. Funds deposited in the Medicaid Transformation Fund do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

SECTION 2.2.(e)  Funds reserved in the Medicaid Contingency Reserve established in Section 12H.38 of S.L. 2014‑100 do not constitute an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.

SECTION 2.2.(f)  G.S. 105‑187.9(a) reads as rewritten:

"(a)      Distribution. – Taxes Of the taxes collected under this Article at the rate of eight percent (8%) (8%), the sum of ten million dollars ($10,000,000) shall be credited annually to the Highway Fund, and the remainder shall be credited to the General Fund. Taxes collected under this Article at the rate of three percent (3%) shall be credited to the North Carolina Highway Trust Fund."

SECTION 2.2.(g)  Subsection (f) of this section is effective when this act becomes law and applies to taxes collected on or after that date.

 

PART III. CURRENT OPERATIONS/HIGHWAY FUND

 

CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2019, according to the following schedule:

 

Current Operations – Highway Fund                                  FY 2017‑2018          FY 2018‑2019

 

Department of Transportation

      Administration                                                                     $ 96,416,366            $ 94,370,410

 

Division of Highways

      Administration                                                                        34,782,224               34,782,224

      Construction                                                                           89,600,000               88,250,000

      Maintenance                                                                       1,353,550,193          1,393,296,676

      Planning and Research                                                                            0                               0

      OSHA Program                                                                           358,030                    358,030

 

State Aid to Municipalities                                                         147,500,000             147,500,000

 

Intermodal Divisions

      Ferry                                                                                        47,983,375               44,983,375

      Public Transportation                                                              93,777,592               94,277,592

      Aviation                                                                                100,495,773             129,012,773

      Rail                                                                                          43,659,362               43,850,362

      Bicycle and Pedestrian                                                                724,032                    724,032

 

Governor's Highway Safety                                                              255,367                    255,367

Division of Motor Vehicles                                                        130,482,054             127,946,774

 

Other State Agencies, Reserves, Transfers                                   39,762,702               41,673,366

 

Capital Improvements                                                                   11,616,700               10,216,707

 

Total Highway Fund Appropriations                               $ 2,190,963,770       $ 2,251,497,688

 

HIGHWAY FUND AVAILABILITY STATEMENT

SECTION 3.2.  The Highway Fund availability used in developing the 2017‑2019 fiscal biennial budget is shown below:

 

Highway Fund Availability Statement                                  FY 2017‑2018         FY 2018‑2019

Unreserved Fund Balance                                                   $                       0      $                       0

Estimated Revenue                                                                  2,179,096,441          2,237,763,031

Adjustment to Revenue Availability:

      Division of Motor Vehicles Hearing Fees                                1,867,329                 3,734,657

      Highway Use Tax Lease Proceeds                                         10,000,000               10,000,000

 

Total Highway Fund Availability                                      $ 2,190,963,770       $ 2,251,497,688

 

Unappropriated Balance                                                      $                       0      $                       0

 

PART IV. HIGHWAY TRUST FUND APPROPRIATIONS

 

HIGHWAY TRUST FUND APPROPRIATIONS

SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2019, according to the following schedule:

 

Current Operations – Highway Trust Fund                        FY 2017‑2018          FY 2018‑2019

 

Program Administration                                                            $ 35,156,560            $ 35,156,560

Debt Service                                                                                 52,160,868               50,036,452

Turnpike Authority                                                                       49,000,000               49,000,000

State Ports Authority                                                                    45,000,000               45,000,000

Transfer to Highway Fund                                                                400,000                    400,000

FHWA State Match                                                                        4,640,000                 4,640,000

Strategic Prioritization Funding Plan for

      Transportation Investments                                               1,360,770,863          1,401,591,150

 

Total Highway Trust Fund Appropriations                     $ 1,547,128,291       $ 1,585,824,162

 

HIGHWAY TRUST FUND AVAILABILITY STATEMENT

SECTION 4.2.  The Highway Trust Fund availability used in developing the 2017‑2019 fiscal biennial budget is shown below:

 

Highway Trust Fund Availability                                         FY 2017‑2018          FY 2018‑2019

 

Unreserved Fund Balance                                                   $                       0      $                       0

Estimated Revenue                                                                  1,547,614,829          1,586,320,316

Adjustment to Revenue Availability:

      Title Fees (Mercury Switch Removal)                                        (486,538)                  (496,154)

 

Total Highway Trust Fund Availability                            $ 1,547,128,291       $ 1,585,824,162

 

Unappropriated Balance                                                      $                       0      $                       0

 

PART V. OTHER APPROPRIATIONS

 

CASH BALANCES AND OTHER APPROPRIATIONS

SECTION 5.1.(a)  Cash balances, federal funds, departmental receipts, grants, and gifts from the General Fund, revenue funds, enterprise funds, and internal service funds are appropriated for the 2017‑2019 fiscal biennium as follows:

(1)        For all budget codes listed in the Governor's Recommended Budget for the 2017‑2019 fiscal biennium, dated March 2017, and in the Budget Support Document, fund balances and receipts are appropriated up to the amounts specified, as adjusted by the General Assembly, for the 2017‑2018 fiscal year and the 2018‑2019 fiscal year. Funds may be expended only for the programs, purposes, objects, and line items or as otherwise authorized by the General Assembly. Expansion budget funds listed in those documents are appropriated only as otherwise provided in this act.

(2)        Notwithstanding the provisions of subdivision (1) of this subsection:

a.         Any receipts that are required to be used to pay debt service requirements for various outstanding bond issues and certificates of participation are appropriated up to the actual amounts received for the 2017‑2018 fiscal year and the 2018‑2019 fiscal year and shall be used only to pay debt service requirements.

b.         Other funds, cash balances, and receipts of funds that meet the definition issued by the Governmental Accounting Standards Board of a trust or agency fund are appropriated for and in the amounts required to meet the legal requirements of the trust agreement for the 2017‑2018 fiscal year and the 2018‑2019 fiscal year.

SECTION 5.1.(b)  Receipts collected in a fiscal year in excess of the amounts appropriated by this section shall remain unexpended and unencumbered until appropriated by the General Assembly, unless the expenditure of overrealized receipts in the fiscal year in which the receipts were collected is authorized by the State Budget Act. Overrealized receipts are appropriated in the amounts necessary to implement this subsection.

SECTION 5.1.(c)  Notwithstanding subsections (a) and (b) of this section, there is appropriated from the Reserve for Reimbursements to Local Governments and Shared Tax Revenues for each fiscal year an amount equal to the amount of the distributions required by law to be made from that reserve for that fiscal year.

 

OTHER RECEIPTS FROM PENDING GRANT AWARDS

SECTION 5.2.(a)  Notwithstanding G.S. 143C‑6‑4, State agencies may, with approval of the Director of the Budget, spend funds received from grants awarded subsequent to the enactment of this act for grant awards that are for less than two million five hundred thousand dollars ($2,500,000), do not require State matching funds, and will not be used for a capital project. State agencies shall report to the Joint Legislative Commission on Governmental Operations within 30 days of receipt of such funds.

State agencies may spend all other funds from grants awarded after the enactment of this act only with approval of the Director of the Budget and after consultation with the Joint Legislative Commission on Governmental Operations.

SECTION 5.2.(b)  The Office of State Budget and Management shall work with the recipient State agencies to budget grant awards according to the annual program needs and within the parameters of the respective granting entities. Depending on the nature of the award, additional State personnel may be employed on a time‑limited basis. Funds received from such grants are hereby appropriated and shall be incorporated into the authorized budget of the recipient State agency.

SECTION 5.2.(c)  Notwithstanding the provisions of this section, no State agency may accept a grant not anticipated in this act if acceptance of the grant would obligate the State to make future expenditures relating to the program receiving the grant or would otherwise result in a financial obligation as a consequence of accepting the grant funds.

 

EDUCATION LOTTERY FUNDS/CHANGES TO REVENUE ALLOCATIONS/NEEDS‑BASED PUBLIC SCHOOL CAPITAL FUND

SECTION 5.3.(a)  The appropriations made from the Education Lottery Fund for the 2017‑2019 fiscal biennium are as follows:

                                                                                                 FY 2017‑2018          FY 2018‑2019

 

Noninstructional Support Personnel                                         $383,888,897           $385,914,455

Prekindergarten Program                                                              78,252,110               78,252,110

Public School Building Capital Fund                                         100,000,000             100,000,000

Needs‑Based Public School Capital Fund                                    30,000,000               75,000,000

Scholarships for Needy Students                                                 30,450,000               30,450,000

UNC Need‑Based Financial Aid                                                  10,744,733               10,744,733

LEA Transportation                                                                      43,277,192                 1,386,090

 

TOTAL APPROPRIATION                                                 $676,612,932           $681,747,388

 

SECTION 5.3.(b)  G.S. 18C‑163(b) reads as rewritten:

"(b)      Expenses of the lottery shall also include a all of the following:

(1)        A transfer of two million one hundred thousand dollars ($2,100,000) annually to the Department of Public Safety, Alcohol Law Enforcement Branch, for gambling enforcement activities.

(2)        Advertising costs."

SECTION 5.3.(c)  G.S. 18C‑164 reads as rewritten:

"§ 18C‑164.  Transfer of net revenues.

(b)        From the Education Lottery Fund, the Office of State Budget and Management shall transfer a sum equal to five percent (5%) of the net revenue of the prior year to the Education Lottery Reserve Fund. A special revenue fund for this purpose shall be established in the State treasury to be known as the Education Lottery Reserve Fund, and that fund shall be capped at fifty million dollars ($50,000,000). Monies in the Education Lottery Reserve Fund may be appropriated only as provided in subsection (e) of this section.

(b1)      Net revenues credited to the Education Lottery Fund shall be appropriated in an amount equal to the amount appropriated from the Education Lottery Fund in the Current Operations and Capital Improvements Appropriations Act of 2017.

(b2)      The Office of State Budget and Management shall transfer any net revenues remaining in the Education Lottery Fund after the appropriations made pursuant to subsection (b1) of this section to the Education Lottery Reserve Fund, a special revenue fund, necessary to maintain a minimum balance of twenty‑five million dollars ($25,000,000).

(b3)      Any net revenues remaining after appropriation pursuant to subsection (b1) of this section and transfer pursuant to subsection (b2) of this section are hereby appropriated to the Needs‑Based Public School Capital Fund.

(b4)      Notwithstanding subsection (b2) of this section, the minimum balance of the Education Lottery Reserve Fund may be less than twenty‑five million dollars ($25,000,000) if funds are necessary to meet the amount of net revenues appropriated pursuant to subsection (b1) of this section.

(e)        If the actual net revenues are less than the appropriation provided in subsection (b1) of this section for that given year, then the Governor may transfer from the Education Lottery Reserve Fund an amount sufficient to equal the appropriation by the General Assembly.provided by subsection (b1) of this section.

(f)        Actual net revenues in excess of the amounts appropriated in a fiscal year shall remain in the Education Lottery Fund."

SECTION 5.3.(d)  It is the intent of the General Assembly to increase the amount of North Carolina Education Lottery net lottery revenue collected that is dedicated to assist local governments in meeting local school capital needs from sixteen and nine‑tenths percent (16.9%) of net lottery revenue collected in the 2016‑2017 fiscal year to forty percent (40%) of net lottery revenue collected no later than the 2028‑2029 fiscal year. To that end, there is created the Needs‑Based Public School Capital Fund to be administered by the Superintendent of Public Instruction. The Needs‑Based Public School Capital Fund shall be used to award grants to counties designated as a development tier one area or a development tier two area, as defined by G.S. 143B‑437.08, to assist with their critical public school building capital needs. The Superintendent of Public Instruction shall award grants to counties in accordance with the following priorities:

(1)        Counties designated as development tier one areas.

(2)        Counties with greater need and less ability to generate sales tax and property tax revenue.

(3)        Counties with a high debt‑to‑tax revenue ratio.

(4)        The extent to which a project will address critical deficiencies in adequately serving the current and future student population.

SECTION 5.3.(e)  Grant funds awarded under this section shall be subject to a matching requirement from the recipient county as follows:

(1)        For a county designated as a development tier one area, the grant shall not exceed three dollars ($3.00) in grant funds for every one dollar ($1.00) provided by the county. Grant funds awarded to a tier one county shall not exceed fifteen million dollars ($15,000,000).

(2)        For a county designated as a development tier two area, the grant shall not exceed one dollar ($1.00) for every one dollar ($1.00) in grant funds provided by the county. Grant funds awarded to a tier two county shall not exceed ten million dollars ($10,000,000).

Grant funds shall be used for new capital projects only. Grant funds shall not be used for real property acquisition or for operational lease agreements. Notwithstanding subdivision (2) of this subsection, grant funds shall only be awarded to development tier one counties until the 2020‑2021 fiscal year. Grant funds shall not be awarded to any county that has received over eight million seven hundred fifty thousand dollars ($8,750,000) in funds from the Public School Building Capital Fund from the 2012‑2013 fiscal year to the 2016‑2017 fiscal year.

SECTION 5.3.(f)  G.S. 115C‑546.2 is amended by adding a new subsection to read:

"(f)       If a county has received a grant fund award from the Needs‑Based Public School Capital Fund, that county shall be ineligible to receive allocations from the Public School Building Capital Fund for a period of five years from the date the grant funds were awarded."

SECTION 5.3.(g)  On or before April 1 of each year, a grant recipient shall submit to the Superintendent of Public Instruction an annual report for the preceding year that describes the progress of the project for which the grant was received. The grant recipient shall submit a final report to the State Superintendent of Public Instruction within three months of the completion of the project.

SECTION 5.3.(h)  On or before May 1 of each year, the Superintendent of Public Instruction shall submit a report to the chairs of the Senate Appropriations Committee on Education/Higher Education, the chairs of the House Appropriations Committee on Education, and the Fiscal Research Division. The report shall contain at least all of the following information for the fiscal year:

(1)        Number and description of projects awarded.

(2)        Total cost of each project and amount supported by the Needs‑Based Public School Capital Fund.

(3)        Projections for local school administrative unit capital needs for the next 30 years, based upon present conditions and estimated demographic changes.

(4)        Any legislative recommendations for improving the Needs‑Based Public School Capital Fund program.

 

CIVIL PENALTY AND FORFEITURE FUND

SECTION 5.4.(a)  Appropriations are made from the Civil Penalty and Forfeiture Fund for the fiscal biennium ending June 30, 2019, as follows:

 

                                                                                                  FY 2017‑2018          FY 2018‑2019

School Technology Fund                                                            $18,000,000             $18,000,000

Drivers Education                                                                         27,393,768               27,393,768

State Public School Fund                                                           134,784,022             128,341,640

Total Appropriation                                                               $180,177,790           $173,735,408

 

SECTION 5.4.(b)  Excess receipts realized in the Civil Penalty and Forfeiture Fund in each year of the 2017‑2019 fiscal biennium shall remain unspent until appropriated by a further act of the General Assembly.

SECTION 5.4.(c)  Notwithstanding Section 5.3(b) of S.L. 2015‑241, the sum of six million four hundred forty‑two thousand three hundred eighty‑two dollars ($6,442,382) of excess receipts realized in the Civil Penalty and Forfeiture Fund for the 2016‑2017 fiscal year shall be allocated to the State Public School Fund for the 2017‑2018 fiscal year.

SECTION 5.4.(d)  G.S. 20‑88.03(b) reads as rewritten:

"(b)      Proceeds. – The clear proceeds of any late fee charged under this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2. The clear proceeds of the late fee charged under this section shall be used to provide a dedicated source of revenue for the drivers education program administered by the Department of Public Instruction in accordance with G.S. 115C‑215."

 

INDIAN GAMING EDUCATION REVENUE FUND

SECTION 5.5.  Notwithstanding G.S. 143C‑9‑7, the sum of six million dollars ($6,000,000) in each year of the 2017‑2019 fiscal biennium is transferred from the Indian Gaming Education Revenue Fund to the Department of Public Instruction, Textbooks, and Digital Resources Allotment.

 

PART VI. GENERAL PROVISIONS

 

CONTINGENCY AND EMERGENCY FUND LIMITATION AND TRANSFER

SECTION 6.1.(a)  Limitation. – For the 2017‑2019 fiscal biennium, and notwithstanding the provisions of G.S. 143C‑4‑4(b), funds appropriated to the Contingency and Emergency Fund may be used only for expenditures required (i) by a court or Industrial Commission order, (ii) to respond to events as authorized under G.S. 166A‑19.40(a) of the North Carolina Emergency Management Act, (iii) by the State Treasurer to pay death benefits as authorized under Article 12A of Chapter 143 of the General Statutes, (iv) by the Office of the Governor for crime rewards in accordance with G.S. 15‑53 and G.S. 15‑53.1, (v) by the Industrial Commission for supplemental awards of compensation, or (vi) by the Department of Justice for legal fees. These funds shall not be used for other statutorily authorized purposes or for any other contingencies and emergencies.

SECTION 6.1.(b)  Transfer. – Notwithstanding any provision of law to the contrary, seven million dollars ($7,000,000) from the Contingency and Emergency Fund reserve shall be transferred to the State Controller to be deposited as a nontax revenue in the General Fund. Any funds remaining in the Contingency and Emergency Fund reserve may be used in accordance with the provisions of subsection (a) of this section and G.S. 143C‑4‑4(c).

 

ESTABLISHING OR INCREASING FEES

SECTION 6.2.(a)  Notwithstanding G.S. 12‑3.1, an agency is not required to consult with the Joint Legislative Commission on Governmental Operations prior to establishing or increasing a fee to the level authorized or anticipated in this act.

SECTION 6.2.(b)  Notwithstanding G.S. 150B‑21.1A(a), an agency may adopt an emergency rule in accordance with G.S. 150B‑21.1A to establish or increase a fee as authorized by this act if the adoption of a rule would otherwise be required under Article 2A of Chapter 150B of the General Statutes.

 

EXPENDITURES OF FUNDS IN RESERVES LIMITED

SECTION 6.3.  Article 4 of Chapter 143C of the General Statutes is amended by adding a new section to read:

"§ 143C‑4‑8.  Use of funds appropriated to a reserve.

All funds appropriated into a reserve by a Current Operations Appropriations Act or other act of the General Assembly may be expended only for the purpose or purposes for which the reserve was established."

 

CAP STATE‑FUNDED PORTION OF NONPROFIT SALARIES

SECTION 6.4.  No more than one hundred twenty thousand dollars ($120,000) in State funds, including any interest earnings accruing from those funds, may be used for the annual salary of any individual employee of a nonprofit organization.

 

MSA FUND/INCREASE APPROPRIATION TO GOLDEN L.E.A.F.

SECTION 6.5.  G.S. 143C‑9‑3(a1) reads as rewritten:

"(a1)    Each year, the sum of tenseventeen million five hundred thousand dollars ($10,000,000)($17,500,000) from the Settlement Reserve Fund is appropriated to The Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., a nonprofit corporation, and these funds shall not be subject to G.S. 143C‑6‑23. The remainder of the funds credited to the Settlement Reserve Fund each fiscal year shall be transferred to the General Fund and included in General Fund availability as nontax revenue."

 

CLARIFY BASE BUDGET DEFINITION

SECTION 6.6.(a)  G.S. 143C‑1‑1(d) reads as rewritten:

"(d)      Definitions. – The following definitions apply in this Chapter:

(1)        Appropriation. – An enactment by the General Assembly authorizing the withdrawal of money from the State treasury. An enactment by the General Assembly that authorizes, specifies, or otherwise provides that funds may be used for a particular purpose is not an appropriation.

(1c)      Base Budget. – That part of the recommended State budget that provides the baseline for the next biennium. The base budget for each State agency shall be the authorized budget for that agency with adjustments only for the following:

a.         Annualization of programs and positions.

b.         Reductions to adjust for items funded with nonrecurring funds during the prior fiscal biennium.

c.         Increases to adjust for nonrecurring reductions during the prior fiscal biennium.

d.         Adjustments for federal payroll tax changes.

e.         Rate increases in accordance with the terms of existing leases of real property.

f.          Adjustments to receipt projections, made in accordance with G.S. 143C‑3‑5(b)(2)c.

g.         Reconciliation of intragovernmental and intergovermental transfers.

h.         Adjustments for statutory appropriations and other adjustments as directed by the General Assembly.

(6)        Capital Improvements Appropriations Act. – An act of the General Assembly containing appropriations for one or more capital improvement projects.

(9)        Current Operations Appropriations Act. – An act of the General Assembly estimating revenue availability for and appropriating money for the current operations and capital improvement needs of State government during one or more budget years.

(28)      Statutory appropriation. – An appropriation enacted by the General Assembly in the General Statutes that authorizes the current and future withdrawal of funds from the State treasury during fiscal years extending beyond the current fiscal biennium, current and future fiscal years, without further act of the General Assembly.

…."

SECTION 6.6.(b)  G.S. 115C‑562.8(b) reads as rewritten:

"(b)      The General Assembly finds that, due to the critical need in this State to provide opportunity for school choice for North Carolina students, it is imperative that the State provide an increase of funds of at least ten million dollars ($10,000,000) each fiscal year for 10 years to the Opportunity Scholarship Grant Fund Reserve. Therefore, there is appropriated from the General Fund to the Reserve the following amounts for each fiscal year to be used for the purposes set forth in this section:

Fiscal Year                                                                            Appropriation

2017‑2018                                                                                   $44,840,000

2018‑2019                                                                                   $54,840,000

2019‑2020                                                                                   $64,840,000

2020‑2021                                                                                   $74,840,000

2021‑2022                                                                                   $84,840,000

2022‑2023                                                                                   $94,840,000

2023‑2024                                                                                 $104,840,000

2024‑2025                                                                                 $114,840,000

2025‑2026                                                                                 $124,840,000

2026‑2027                                                                                 $134,840,000

For the 2027‑2028 fiscal year and each fiscal year thereafter, there is appropriated from the General Fund to the Reserve the sum of one hundred forty‑four million eight hundred forty thousand dollars ($144,840,000) to be used for the purposes set forth in this section. When developing the base budget, as defined by G.S. 143C‑1‑1, for each fiscal year specified in this subsection, the Director of the Budget shall include the appropriated amount specified in this subsection for that fiscal year."

SECTION 6.6.(c)  G.S. 143C‑3‑5 reads as rewritten:

"§ 143C‑3‑5.  Budget recommendations and budget message.

(b)        Odd‑Numbered Years. – In odd‑numbered years the budget recommendations shall include the following components:

(3)        A Current Operations Appropriations Act that makes appropriations for each fiscal year of the upcoming biennium for the operating and capital expenses of all State agencies as contained in the Recommended State Budget, together with a Capital Improvements Appropriations Act that authorizes any capital improvements projects.Budget.

(c)        Even‑Numbered Years. – In even‑numbered years, the Governor may recommend changes in the enacted budget for the second year of the biennium. These recommendations shall be presented as amendments to the enacted budget and shall be incorporated in a recommended Current Operations Appropriation Act and a recommended Capital Improvements Appropriations Act as necessary. Appropriations Act. Any recommended changes shall clearly distinguish program reductions, program eliminations, program expansions, and new programs, and shall explain all proposed capital improvements in the context of the Six‑Year Capital Improvements Plan and as required by G.S. 143C‑8‑6. The Governor shall provide sufficient supporting documentation and accounting detail, consistent with that required by G.S. 143C‑3‑5(b), corresponding to the recommended amendments to the enacted budget.

…."

SECTION 6.6.(d)  G.S. 143C‑5‑1 reads as rewritten:

"§ 143C‑5‑1.  Rules for the introduction of the Governor's appropriations bills.

The Current Operations Appropriations Act recommended by the Governor and the Capital Improvements Appropriations Act recommended by the Governor shall be introduced by the chairs of the committee on appropriations in each house of the General Assembly. This section shall be considered and treated as a rule of procedure in the Senate and House of Representatives unless provided otherwise by a rule of either branch of the General Assembly."

SECTION 6.6.(e)  G.S. 143C‑5‑5 reads as rewritten:

"§ 143C‑5‑5.  Committee report used to construe intent of budget acts.

A committee report incorporated by reference in the Current Operations Appropriations Act or the Capital Improvements Appropriations Act and distributed on the floor of the House of Representatives and of the Senate as part of the explanation of the act is to be construed with the appropriate act in interpreting its intent. If a report conflicts with the act, the act prevails. The Director of the Fiscal Research Division of the Legislative Services Commission shall send a copy of the reports to the Director."

SECTION 6.6.(f)  G.S. 143C‑6‑1 reads as rewritten:

"§ 143C‑6‑1.  Budget enacted by the General Assembly; certified budgets of State agencies.

(a)        Governor to Administer the Budget as Enacted by the General Assembly. – In accordance with Section 5(3) of Article III of the North Carolina Constitution, the Governor shall administer the budget as enacted by the General Assembly. All appropriations of State funds now or hereafter made to the State agencies and non‑State entities authorize expenditures only for the (i) purposes or programs and (ii) objects or line items enumerated in the Recommended State Budget and the Budget Support Document recommended to the General Assembly by the Governor, as amended and enacted by the General Assembly in the Current Operations Appropriations Act, the Capital Improvements Appropriations Act, Act or any other act affecting the State budget. The Governor shall ensure that appropriations are expended in strict accordance with the budget enacted by the General Assembly.

(b)        Departmental Receipts. – Departmental receipts collected to support a program or purpose shall be credited to the fund from which appropriations have been made to support that program or purpose. A State agency shall expend departmental receipts first, including receipts in excess of the amount of receipts budgeted in the certified budget for the program or purpose, and shall expend other funds appropriated for the purpose or program only to the extent that receipts are insufficient to meet the costs anticipated in the certified budget.

Except as authorized in G.S. 143C‑6‑4, excess departmental receipts shall not be used to increase expenditures for a purpose or program.

(c)        Certification of the Budget. – The Director of the Budget shall certify to each State agency the amount appropriated to it for each program and each object from all funds included in the budget as defined in G.S. 143C‑3‑5(d). The certified budget for each State agency shall reflect the total of all appropriations enacted for each State agency by the General Assembly in the Current Operations Appropriations Act, the Capital Improvements Appropriations Act, Act and any other act affecting the State budget. The certified budget for each State agency shall follow the format of the Budget Support Document as modified to reflect changes enacted by the General Assembly."

SECTION 6.6.(g)  Section 11A.3(i) of S.L. 2016‑94 reads as rewritten:

"SECTION 11A.3.(i)  Subsections (a) and (b) of this section apply beginning with the 2016‑2017 school year. Subsections (g) andSubsection (h) of this section becomebecomes effective July 1, 2017."

SECTION 6.6.(h)  Subsection (a) of this section becomes effective July 1, 2017, and applies beginning with the base budget developed for the 2018‑2019 fiscal year. The remainder of this section is effective when it becomes law.

 

USE OF STATE FUNDS FOR EMPLOYMENT OF OUTSIDE COUNSEL/GENERAL ASSEMBLY RIGHT TO INTERVENE

SECTION 6.7.(a)  G.S. 147‑17 reads as rewritten:

"§ 147‑17.  May employ counsel in cases wherein State is interested.

(a)        No department, officer, agency, institution, commission, bureau or other organized activity of the State which receives support in whole or in part from the State shall employ any private counsel, except with the approval of the Governor. The Governor shall give his approval only if the Attorney General has advised him, as provided in subsection (b) of this section, that it is impracticable for the Attorney General to render the legal services. In any case or proceeding, civil or criminal, in or before any court or agency of this State or any other state or the United States, or in any other matter in which the State of North Carolina is interested, the Governor may employ such special private counsel as he may deem proper or necessary to represent the interest of the State, and may fix the compensation for their services.services, subject to the provisions of subsection (c1) of this section.

(b)        The Attorney General shall be counsel for all departments, officers, agencies, institutions, commissions, bureaus or other organized activities of the State which receive support in whole or in part from the State. Whenever the Attorney General shall advise the Governor that it is impracticable for him to render legal services to any State agency, officer, institution, commission, bureau or other organized activity, or to defend a State employee or former employee as authorized by Article 31A of Chapter 143 of the General Statutes, the Governor may authorize the employment of such private counsel, as in his judgment, should be employed to render such services, and may fix the compensation for their services.

(c)        The Subject to the provisions of subsection (c1) of this section, the Governor may direct that the compensation fixed under this section for special private counsel shall be paid out of appropriations or other funds credited to the appropriate department, agency, institution, commission, bureau, or other organized activity of the State or out of the Contingency and Emergency Fund.

(c1)      Notwithstanding subsection (c) of this section and G.S. 143C‑4‑4(b), no State funds shall be withdrawn from the State treasury to pay for litigation services provided by private counsel except as expressly authorized by an appropriation of the General Assembly. As used in this subsection, litigation services include legal work conducted in anticipation of, or in preparation for, any suit or action. As used in this section, private counsel includes any licensed attorney retained by, engaged by, or otherwise representing a department, officer, agency, institution, commission, bureau, or other organized activity of the State but does not include a licensed attorney who holds a permanent budgeted position in either the Department of Justice or the applicable department, officer, agency, institution, commission, bureau, or other organized activity of the State.

(d)       In those instances when a department, officer, agency, institution, commission, bureau, or other organized activity of the State which receives support in whole or in part from the State shall employ private counsel other than the Attorney General as permitted by law, such employed counsel shall allocate authority between counsel and the State client in conformance with Rule 1.2 of the North Carolina Rules of Professional Conduct. In those instances where more than one counsel is providing legal representation, counsel, or service on a legal matter on behalf of a State client, the client shall designate in writing which of its legal counsel possesses final decision‑making authority on behalf of the State client, and other co‑counsel shall, consistent with the Rules of Professional Conduct, cooperate with such designated lead counsel."

SECTION 6.7.(b)  G.S. 114‑2.3 reads as rewritten:

"§ 114‑2.3.  Use of private counsel limited.

(a)        Every agency, institution, department, bureau, board, or commission of the State, authorized by law to retain private counsel, shall obtain written permission from the Attorney General prior to employing private counsel. This section does not apply to counties, cities, towns, other municipal corporations or political subdivisions of the State, or any agencies of these municipal corporations or political subdivisions, or to county or city boards of education.

(b)        Article 2A of this Chapter applies to any contract to retain private counsel authorized by the Attorney General under this section.

(c)        Except as provided in G.S. 147‑17, the Attorney General shall represent the State in any action requiring the State to be a party under G.S. 1‑72.3.

(d)       No State funds shall be withdrawn from the State treasury to pay for litigation services provided by private counsel except as expressly authorized by an appropriation of the General Assembly. As used in this subsection, litigation services include legal work conducted in anticipation of, or in preparation for, any suit or action. As used in this section, private counsel includes any licensed attorney retained by, engaged by, or otherwise representing a department, officer, agency, institution, commission, bureau, or other organized activity of the State but does not include a licensed attorney who holds a permanent budgeted position in either the Department of Justice or the applicable department, officer, agency, institution, commission, bureau, or other organized activity of the State."

SECTION 6.7.(c)  G.S. 136‑18.03(b) reads as rewritten:

"(b)      Authorization. – The Department of Transportation may engage the services of private counsel with the pertinent expertise to provide legal services related to any project undertaken by the Department. The Department shall supervise and manage the private counsel engaged under this section and, excluding legal services related to workers' compensation claims brought by Department employees, shall not be required to obtain written permission or approval from the Attorney General under G.S. 114‑2.3. G.S. 147‑17(c1) and G.S. 114‑2.3(d) do not apply to this section."

SECTION 6.7.(d)  G.S. 20‑194(b) reads as rewritten:

"(b)      In the event that a member of the Highway Patrol or any other State law‑enforcement officer is sued in a civil action as an individual for acts occurring while such member was alleged to be acting within the course and scope of his office, employment, service, agency or authority, which was alleged to be a proximate cause of the injury or damage complained of, the Attorney General is hereby authorized to defend such employee through the use of a member of his staff or, in his discretion, employ private counsel, subject to the provisions of Article 31A of Chapter 143 of the General Statutes and G.S. 147‑17. G.S. 147‑17(a) through (c) and (d). Any judgment rendered as a result of said civil action against such member of the Highway Patrol or other State law‑enforcement officer, for acts alleged to be committed within the course and scope of his office, employment, service, agency or authority shall be paid as an expense of administration up to the limit provided in the Tort Claims Act."

SECTION 6.7.(e)  G.S. 143B‑30.1(g) reads as rewritten:

"(g)      In the discretion of the Commission, G.S. 114‑2.3 and G.S. 147‑17(a) through (c) (c1) shall not apply to the Commission if the Commission is being sued by another agency, institution, department, bureau, board, or commission of the State, whether such body is created by the Constitution or by statute. The chairman, upon approval of a majority of the Commission, may retain private counsel to represent the Commission to be paid with available State funds to defend such litigation either independently or in cooperation with the Department of Justice. If private counsel is to be so retained to represent the Commission, the chairman shall designate lead counsel who shall possess final decision‑making authority with respect to the representation, counsel, or service for the Commission. Other counsel for the Commission shall, consistent with the Rules of Professional Conduct, cooperate with such designated lead counsel."

SECTION 6.7.(f)  G.S. 143C‑6‑9 reads as rewritten:

"§ 143C‑6‑9.  Use of lapsed salary savings.

(a)        Lapsed salary savings may be expended only for nonrecurring purposes or line items.

(b)        Lapsed salary savings shall not be used to pay for litigation services provided by private counsel. As used in this subsection, litigation services and private counsel are as defined in G.S. 147‑17(c1) and G.S. 114‑2.3(d)."

SECTION 6.7.(g)  G.S. 120‑32.6(a) reads as rewritten:

"(a)      Use of Private Counsel. – G.S. 114‑2.3 and G.S. 147‑17 G.S. 114‑2.3, 143C‑6‑9(b), and 147‑17 (a) through (c)(c1) shall not apply to the General Assembly."

SECTION 6.7.(h)  G.S. 116‑11 is amended by adding a new subdivision to read:

"§ 116‑11.  Powers and duties generally.

The powers and duties of the Board of Governors shall include the following:

(13b)    Subject to the approval required in G.S. 114‑2.3(a) and G.S. 147‑17(a), the Board may authorize the expenditure of funds to hire private counsel to represent the Board, The University of North Carolina, and any constituent institution. G.S. 114‑2.3(d), 143C‑6‑9(b), and 147‑17(c1) shall not apply to these expenditures.

…."

SECTION 6.7.(i)  G.S. 1‑72.2 reads as rewritten:

"§ 1‑72.2.  Standing of legislative officers.

(a)        It is the public policy of the State of North Carolina that in any action in any North Carolina State court in which the validity or constitutionality of an act of the General Assembly or a provision of the North Carolina Constitution is challenged, the General Assembly, jointly through the Speaker of the House of Representatives and the President Pro Tempore of the Senate, constitutes the legislative branch of the State of North Carolina and the Governor constitutes the executive branch of the State of North Carolina, and when the State of North Carolina is named as a defendant in such cases, both the General Assembly and the Governor constitute the State of North Carolina. It is the public policy of the State of North Carolina that in any action in any federal court in which the validity or constitutionality of an act of the General Assembly or a provision of the North Carolina Constitution is challenged, the General Assembly, jointly through the Speaker of the House of Representatives and the President Pro Tempore of the Senate, constitutes the legislative branch of the State of North Carolina; the Governor constitutes the executive branch of the State of North Carolina; that, when the State of North Carolina is named as a defendant in such cases, both the General Assembly and the Governor constitute the State of North Carolina; and that a federal court presiding over any such action where the State of North Carolina is a named party is requested to allow both the legislative branch and the executive branch of the State of North Carolina to participate in any such action as a party.

(b)        The Speaker of the House of Representatives and the President Pro Tempore of the Senate, as agents of the State, by and through counsel of their choice, including private counsel, shall jointly have standing to intervene on behalf of the General Assembly as a party in any judicial proceeding challenging a North Carolina statute or provision of the North Carolina Constitution. The procedure for interventions at the trial level in State court shall be that set forth in Rule 24 of the Rules of Civil Procedure. The procedure for interventions at the appellate level in State court shall be by motion in the appropriate appellate court or by any other relevant procedure set forth in the Rules of Appellate Procedure.Intervention pursuant to this section shall be effected upon the filing of a notice of intervention of right in the trial or appellate court in which the matter is pending regardless of the stage of the proceeding. Notwithstanding any other provision of law to the contrary, the participation of the Speaker of the House of Representatives and the President Pro Tempore of the Senate in any action, State or federal, as a party or otherwise, shall not constitute a waiver of legislative immunity or legislative privilege of any individual legislator or legislative officer or staff of the General Assembly."

SECTION 6.7.(j)  G.S. 1A‑1, Rule 19, is amended by adding a new subsection to read:

"(d)      Necessary Joinder of House of Representatives and Senate. – The Speaker of the House of Representatives and the President Pro Tempore of the Senate, as agents of the State through the General Assembly, must be joined as defendants in any civil action challenging the validity of a North Carolina statute or provision of the North Carolina Constitution under State or federal law."

SECTION 6.7.(k)  G.S. 1A‑1, Rule 24(c), reads as rewritten:

"(c)      Procedure. – A person desiring to intervene shall serve a motion to intervene upon all parties affected thereby. The motion shall state the grounds therefor and shall be accompanied by a pleading setting forth the claim or defense for which intervention is  sought. The same procedure shall be followed when a statute gives a right to intervene, except when the statute prescribes a different procedure. Intervention as of right by both the Speaker of the House of Representatives and the President Pro Tempore of the Senate pursuant to G.S. 1‑72.2 shall be effected upon the filing of a notice of intervention of right in the trial or appellate court in which the matter is pending regardless of the stage of the proceeding."

SECTION 6.7.(l)  G.S. 120‑32.6, as amended by subsection (g) of this section, reads as rewritten:

"§ 120‑32.6.  Certain employment authority.

(a)        Use of Private Counsel. – G.S. 114‑2.3, 143C‑6‑9(b), and 147‑17(a) through (c1) shall not apply to the General Assembly.

(b)        General Assembly as Client of Attorney General by Operation of Law. Acting on Behalf of the State of North Carolina in Certain Actions. – Whenever the validity or constitutionality of an act of the General Assembly or a provision of the Constitution of North Carolina is the subject of an action in any State or federal court, if the General Assembly hires outside counsel to represent the General Assembly in connection with that action, the General Assembly shall also be the Speaker of the House of Representatives and the President Pro Tempore of the Senate, as agents of the State through the General Assembly, shall be necessary parties and shall be deemed to be a client of the Attorney General for purposes of that action as a matter of law. Nothing herein shall (i) impair or interfere with the rights of other named parties to appear in and to be represented by the Attorney General or outside counsel as authorized by law or (ii) impair the right of the Governor to employ counsel on behalf of the State pursuant to G.S. 147‑17. law and pursuant to Section 7(2) of Article III of the North Carolina Constitution. In such cases, the General Assembly shall be deemed to be the State of North Carolina to the extent provided in G.S. 1‑72.2(a) unless waived pursuant to this subsection. Additionally, in such cases, the General Assembly through the Speaker of the House of Representatives and President Pro Tempore of the Senate jointly shall possess final decision‑making authority with respect to the defense of the challenged act of the General Assembly or provision of the North Carolina Constitution. In any such action, the General Assembly, through the Speaker of the House of Representatives and the President Pro Tempore of the Senate, may waive such representation and decline to participate in the action by written notice to the Attorney General.

(c)        General Assembly Counsel Shall Be Lead Counsel. – In those instances when the General Assembly employs counsel in addition to or other than the Attorney General, the Speaker of the House of Representatives and the President Pro Tempore of the Senate may jointly designate the counsel employed by the General Assembly as lead counsel for the General Assembly. in the defense of the challenged act of the General Assembly or provision of the North Carolina Constitution. The lead counsel so designated shall possess final decision‑making authority with respect to the representation, counsel, or service for the General Assembly. Other counsel for the General Assembly shall, consistent with the Rules of Professional Conduct, cooperate with such designated lead counsel.

(d)       The rights provided by this section shall be supplemental to those provided by any other provision of law.

(e)        Notwithstanding any other provision of law, the participation of the Speaker of the House of Representatives and the President Pro Tempore of the Senate in any action challenging the validity of a North Carolina statute or provision of the North Carolina Constitution under State or federal law, as a party or otherwise, shall not constitute a waiver of legislative immunity or legislative privilege of any individual legislator or legislative officer or staff of the General Assembly."

SECTION 6.7.(m)  G.S. 114‑2 reads as rewritten:

"§ 114‑2.  Duties.

It Pursuant to Section 7(2) of Article III of the North Carolina Constitution, it shall be the duty of the Attorney General:

(9)        To notify the Speaker of the House of Representatives and the President Pro Tempore of the Senate whenever an action is filed in State or federal court that challenges the validity of a North Carolina statute or provision of the North Carolina Constitution under State or federal law.

(10)      Pursuant to G.S. 120‑32.6, to represent upon request and otherwise abide by and defer to the final decision‑making authority exercised by the Speaker of the House of Representatives and the President Pro Tempore of the Senate, as agents of the State through the General Assembly, in defending any State or federal action challenging the validity or constitutionality of an act of the General Assembly or a provision of the North Carolina Constitution. If for any reason the Attorney General cannot perform the duty specified herein, the Attorney General may recuse personally from such defense but shall appoint another attorney employed by the Department of Justice to act at the direction of the Speaker of the House of Representatives and the President Pro Tempore of the Senate."

SECTION 6.7.(n)  The President Pro Tempore of the Senate and the Speaker of the House of Representative continue to have the authority to represent and articulate the institutional position of the General Assembly in the action known as Berger v. Price, 5:17‑cv‑00025‑FL (E.D.N.C.).

SECTION 6.7.(o)  Subsections (i) through (n) of this section are effective when this act becomes law and apply to pending and future actions.

 

PENDING LITIGATION

SECTION 6.8.  Any reference to either the State Board of Elections or the State Ethics Commission in either this act or the Committee Report described in Section 39.2 of this act does not constitute a waiver by the General Assembly regarding the validity and constitutionality of S.L. 2017‑6.

 

REPORT ON USE OF LAPSED SALARY FUNDS

SECTION 6.12.(a)  The Office of State Budget and Management (OSBM) in conjunction with State agencies, as defined in G.S. 143C‑1‑1(d)(24), shall report on the use of lapsed salary funds for fiscal year 2016‑2017 and fiscal year 2017‑2018. State agencies shall report to the OSBM on the use of lapsed salary, including all of the following:

(1)        The total amount of accrued lapsed salary funds by funding source.

(2)        The total number of full‑time equivalent positions comprising the lapsed salary funds.

(3)        The total expenditure of lapsed salaries by purpose.

(4)        The legal authorization to expend lapsed salary funds.

SECTION 6.12.(b)  The OSBM shall report to the Joint Legislative Oversight Committees on Health and Human Services; Education; Justice and Public Safety; Transportation; Information Technology; General Government; and Agriculture and Natural and Economic Resources and the Fiscal Research Division on the use of lapsed salary funds as prescribed in subsection (a) of this section as follows:

(1)        By making a final report on fiscal year 2016‑2017, no later than October 1, 2017.

(2)        By submitting preliminary reports on fiscal year 2017‑2018 data, no later than January 31, 2018, and May 1, 2018, and making a final report on fiscal year 2017‑2018 data, no later than September 1, 2018.

 

NON‑STATE ENTITIES/REPORT AND REVERSION REQUIREMENTS

SECTION 6.13.(a)  Definition. – For purposes of this section, the term "non‑State entity" is as defined in G.S. 143C‑1‑1.

SECTION 6.13.(b)  Reporting Requirement. – Unless required to report on the use of funds under another provision of law, and by no later than June 30, 2018, each non‑State entity receiving expansion funds appropriated in this act for the 2017‑2018 fiscal year shall submit a report to the Office of State Budget and Management that provides all of the following information:

(1)        A description of how the funds are used or are to be used, including outcomes and specific deliverables achieved.

(2)        The amount of State funds received and expended during the 2017‑2018 fiscal year.

(3)        The amount of State funds expended for administrative purposes during the 2017‑2018 fiscal year, including the amount of State funds expended for salaries and benefits.

(4)        For each employee, the amount of State funds used for the employee's annual salary.

SECTION 6.13.(c)  Funds Shall Not Revert. – Notwithstanding the date set forth in G.S. 143C‑6‑23(f1)(1), expansion funds from the net General Fund appropriations or allocations in this act to a non‑State entity shall not be subject to the return requirement set forth in G.S. 143C‑6‑23(f1)(1) until June 30, 2019.

 

PART VII. PUBLIC SCHOOLS

 

FUNDS FOR CHILDREN WITH DISABILITIES

SECTION 7.1.(a)  The State Board of Education shall allocate additional funds for children with disabilities on the basis of four thousand one hundred twenty‑five dollars and twenty‑seven cents ($4,125.27) per child for fiscal years 2017‑2018 and 2018‑2019. Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities or (ii) twelve and seventy‑five hundredths percent (12.75%) of its 2017‑2018 allocated average daily membership in the local school administrative unit. The dollar amounts allocated under this section for children with disabilities shall also be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve children with disabilities.

SECTION 7.1.(b)  G.S. 115C‑105.25(b) reads as rewritten:

"(b)      Subject to the following limitations, local boards of education may transfer and may approve transfers of funds between funding allotment categories:

(1)        Repealed by Session Laws 2013‑360, s. 8.14, effective July 1, 2013.

(1a)      Funds for children with disabilities, careercareer and technical education,education and other purposes may be transferred only as permitted by federal law and the conditions of federal grants or as provided through any rules that the State Board of Education adopts to ensure compliance with federal regulations.

(1b)      No funds shall be transferred out of the children with disabilities allotment category.

…."

 

FUNDS FOR ACADEMICALLY GIFTED CHILDREN

SECTION 7.2.(a)  The State Board of Education shall allocate additional funds for academically or intellectually gifted children on the basis of one thousand three hundred fourteen dollars and fifty‑six cents ($1,314.56) per child for fiscal years 2017‑2018 and 2018‑2019. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2017‑2018 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The dollar amounts allocated under this section for academically or intellectually gifted children shall also be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children.

SECTION 7.2.(b)  G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:

"(3b)    No funds shall be transferred out of the academically or intellectually gifted children allotment category."

SECTION 7.2.(c)  Subsection (b) of this section becomes effective July 1, 2018.

 

SUPPLEMENTAL FUNDING IN LOW‑WEALTH COUNTIES

SECTION 7.3.(a)  Use of Funds for Supplemental Funding. – All funds received pursuant to this section shall be used only (i) to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, school computer technicians, instructional supplies and equipment, staff development, and textbooks and digital resources and (ii) for salary supplements for instructional personnel and instructional support personnel. Local boards of education are encouraged to use at least twenty‑five percent (25%) of the funds received pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades three through eight.

SECTION 7.3.(b)  Definitions. – As used in this section, the following definitions apply:

(1)        Anticipated county property tax revenue availability. – The county‑adjusted property tax base multiplied by the effective State average tax rate.

(2)        Anticipated total county revenue availability. – The sum of the following:

a.         Anticipated county property tax revenue availability.

b.         Local sales and use taxes received by the county that are levied under Chapter 1096 of the 1967 Session Laws or under Subchapter VIII of Chapter 105 of the General Statutes.

c.         Fines and forfeitures deposited in the county school fund for the most recent year for which data are available.

(3)        Anticipated total county revenue availability per student. – The anticipated total county revenue availability for the county divided by the average daily membership of the county.

(4)        Anticipated State average revenue availability per student. – The sum of all anticipated total county revenue availability divided by the average daily membership for the State.

(5)        Average daily membership. – Average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual adopted by the State Board of Education. If a county contains only part of a local school administrative unit, the average daily membership of that county includes all students who reside within the county and attend that local school administrative unit.

(6)        County‑adjusted property tax base. – Computed as follows:

a.         Subtract the present‑use value of agricultural land, horticultural land, and forestland in the county, as defined in G.S. 105‑277.2, from the total assessed real property valuation of the county.

b.         Adjust the resulting amount by multiplying by a weighted average of the three most recent annual sales assessment ratio studies.

c.         Add to the resulting amount the following:

1.         Present‑use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105‑277.2.

2.         Value of property of public service companies, determined in accordance with Article 23 of Chapter 105 of the General Statutes.

3.         Personal property value for the county.

(7)        County‑adjusted property tax base per square mile. – The county‑adjusted property tax base divided by the number of square miles of land area in the county.

(8)        County wealth as a percentage of State average wealth. – Computed as follows:

a.         Compute the percentage that the county per capita income is of the State per capita income and weight the resulting percentage by a factor of five‑tenths.

b.         Compute the percentage that the anticipated total county revenue availability per student is of the anticipated State average revenue availability per student and weight the resulting percentage by a factor of four‑tenths.

c.         Compute the percentage that the county‑adjusted property tax base per square mile is of the State‑adjusted property tax base per square mile and weight the resulting percentage by a factor of one‑tenth.

d.         Add the three weighted percentages to derive the county wealth as a percentage of the State average wealth.

(9)        Effective county tax rate. – The actual county tax rate multiplied by a weighted average of the three most recent annual sales assessment ratio studies.

(10)      Effective State average tax rate. – The average of effective county tax rates for all counties.

(11)      Local current expense funds. – The most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447.

(12)      Per capita income. – The average for the most recent three years for which data are available of the per capita income according to the most recent report of the United States Department of Commerce, Bureau of Economic Analysis, including any reported modifications for prior years as outlined in the most recent report.

(13)      Sales assessment ratio studies. – Sales assessment ratio studies performed by the Department of Revenue under G.S. 105‑289(h).

(14)      State average adjusted property tax base per square mile. – The sum of the county‑adjusted property tax bases for all counties divided by the number of square miles of land area in the State.

(15)      State average current expense appropriations per student. – The most recent State total of county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447.

(16)      Supplant. – To decrease local per student current expense appropriations from one fiscal year to the next fiscal year.

(17)      Weighted average of the three most recent annual sales assessment ratio studies. – The weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.

SECTION 7.3.(c)  Eligibility for Funds. – Except as provided in subsection (g) of this section, the State Board of Education shall allocate these funds to local school administrative units located in whole or in part in counties in which the county wealth as a percentage of the State average wealth is less than one hundred percent (100%).

SECTION 7.3.(d)  Allocation of Funds. – Except as provided in subsection (f) of this section, the amount received per average daily membership for a county shall be the difference between the State average current expense appropriations per student and the current expense appropriations per student that the county could provide given the county's wealth and an average effort to fund public schools. To derive the current expense appropriations per student that the county could be able to provide given the county's wealth and an average effort to fund public schools, multiply the county's wealth as a percentage of State average wealth by the State average current expense appropriations per student. The funds for the local school administrative units located in whole or in part in the county shall be allocated to each local school administrative unit located in whole or in part in the county based on the average daily membership of the county's students in the school units. If the funds appropriated for supplemental funding are not adequate to fund the formula fully, each local school administrative unit shall receive a pro rata share of the funds appropriated for supplemental funding.

SECTION 7.3.(e)  Formula for Distribution of Supplemental Funding Pursuant to This Section Only. – The formula in this section is solely a basis for distribution of supplemental funding for low‑wealth counties and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for low‑wealth counties.

SECTION 7.3.(f)  Minimum Effort Required. – A county shall receive full funding under this section if the county (i) maintains an effective county tax rate that is at least one hundred percent (100%) of the effective State average tax rate in the most recent year for which data are available or (ii) maintains a county appropriation per student to the school local current expense fund of at least one hundred percent (100%) of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools. A county that maintains a county appropriation per student to the school local current expense fund of less than one hundred percent (100%) of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools shall receive funding under this section at the same percentage that the county's appropriation per student to the school local current expense fund is of the current expense appropriations per student to the school local current expense fund that the county could provide given the county's wealth and an average effort to fund public schools.

SECTION 7.3.(g)  Nonsupplant Requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2017‑2019 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if all of the following criteria apply:

(1)        The current expense appropriations per student of the county for the current year is less than ninety‑five percent (95%) of the average of local current expense appropriations per student for the three prior fiscal years.

(2)        The county cannot show (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.

The State Board of Education shall adopt rules to implement the requirements of this subsection.

SECTION 7.3.(h)  Counties Containing a Base of the Armed Forces. – Notwithstanding any other provision of this section, for the 2017‑2019 fiscal biennium, counties containing a base of the Armed Forces of the United States that have an average daily membership of more than 23,000 students shall receive the same amount of supplemental funding for low‑wealth counties as received in the 2012‑2013 fiscal year.

SECTION 7.3.(i)  Funds for EVAAS Data. – Notwithstanding the requirements of subsection (a) of this section, local school administrative units may utilize funds allocated under this section to purchase services that allow for extraction of data from the Education Value‑Added Assessment System (EVAAS).

SECTION 7.3.(j)  Reports. – For the 2017‑2019 fiscal biennium, the State Board of Education shall report to the Fiscal Research Division prior to May 15 of each year if it determines that counties have supplanted funds.

SECTION 7.3.(k)  Department of Revenue Reports. – The Department of Revenue shall provide to the Department of Public Instruction a preliminary report for the current fiscal year of the assessed value of the property tax base for each county prior to March 1 of each year and a final report prior to May 1 of each year. The reports shall include for each county the annual sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real property represented by the present‑use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105‑277.2, (iii) property of public service companies determined in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.

 

SMALL COUNTY SCHOOL SYSTEM SUPPLEMENTAL FUNDING

SECTION 7.4.(a)  Allotment Schedule for the 2017‑2019 Fiscal Biennium. – Except as otherwise provided in subsection (d) of this section, each eligible county school administrative unit shall receive a dollar allotment according to the following schedule:

Allotted ADM                             Small County Allotment

                                 0‑600                                       $1,710,000

                          601‑1,300                                       $1,820,000

                       1,301‑1,700                                       $1,548,700

                       1,701‑2,000                                       $1,600,000

                       2,001‑2,300                                       $1,560,000

                       2,301‑2,600                                       $1,470,000

                       2,601‑2,800                                       $1,498,000

                       2,801‑3,200                                       $1,548,000

SECTION 7.4.(b)  Phase‑Out Provision for the 2017‑2018 Fiscal Year. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (a) of this section in the 2017‑2018 fiscal year, funding for that unit shall be phased out over a five‑year period. Funding for such local school administrative units shall be reduced in equal increments in each of the five years after the unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local school administrative unit becomes ineligible.

Allotments for eligible local school administrative units under this subsection shall not be reduced by more than twenty percent (20%) of the amount received in fiscal year 2016‑2017 in any fiscal year. A local school administrative unit shall not become ineligible for funding if either the highest of the first two months total projected average daily membership for the current year or the higher of the first two months total prior year average daily membership would otherwise have made the unit eligible for funds under the schedule in subsection (a) of this section.

SECTION 7.4.(c)  Phase‑Out Provision for the 2018‑2019 Fiscal Year. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (a) of this section in the 2018‑2019 fiscal year, funding for that unit shall be phased out over a five‑year period. Funding for such local school administrative units shall be reduced in equal increments in each of the five years after the unit becomes ineligible. Funding shall be eliminated in the fifth fiscal year after the local administrative unit becomes ineligible.

Allotments for eligible local school administrative units under this subsection shall not be reduced by more than twenty percent (20%) of the amount received in fiscal year 2017‑2018 in any fiscal year. A local school administrative unit shall not become ineligible for funding if either the highest of the first two months total projected average daily membership for the current year or the higher of the first two months total prior year average daily membership would otherwise have made the unit eligible for funds under the schedule in subsection (a) of this section.

SECTION 7.4.(d)  Nonsupplant Requirement for the 2017‑2019 Fiscal Biennium. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2017‑2019 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year or the year for which the most recent data are available, if all of the following criteria apply:

(1)        The current expense appropriation per student of the county for the current year is less than ninety‑five percent (95%) of the average of local current expense appropriation per student for the three prior fiscal years.

(2)        The county cannot show (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.

The State Board of Education shall adopt rules to implement the requirements of this subsection.

SECTION 7.4.(e)  Reports. – For the 2017‑2019 fiscal biennium, the State Board of Education shall report to the Fiscal Research Division prior to May 15 of each fiscal year if it determines that counties have supplanted funds.

SECTION 7.4.(f)  Use of Funds. – Local boards of education are encouraged to use at least twenty percent (20%) of the funds they receive pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades three through eight.

Local school administrative units may also utilize funds allocated under this section to purchase services that allow for extraction of data from the Education Value‑Added Assessment System (EVAAS).

 

DISADVANTAGED STUDENT SUPPLEMENTAL FUNDING (DSSF)

SECTION 7.5.(a)  Funds appropriated in this act for disadvantaged student supplemental funding shall be used, consistent with the policies and procedures adopted by the State Board of Education, only to do the following:

(1)        Provide instructional positions or instructional support positions.

(2)        Provide professional development.

(3)        Provide intensive in‑school or after‑school remediation, or both.

(4)        Purchase diagnostic software and progress‑monitoring tools.

(5)        Provide funds for teacher bonuses and supplements. The State Board of Education shall set a maximum percentage of the funds that may be used for this purpose.

The State Board of Education may require local school administrative units receiving funding under the Disadvantaged Student Supplemental Fund to purchase the Education Value‑Added Assessment System (EVAAS) in order to provide in‑depth analysis of student performance and help identify strategies for improving student achievement. This data shall be used exclusively for instructional and curriculum decisions made in the best interest of children and for professional development for their teachers and administrators.

SECTION 7.5.(b)  Disadvantaged student supplemental funding (DSSF) shall be allotted to a local school administrative unit based on (i) the unit's eligible DSSF population and (ii) the difference between a teacher‑to‑student ratio of 1:21 and the following teacher‑to‑student ratios:

(1)        For counties with wealth greater than ninety percent (90%) of the statewide average, a ratio of 1:19.9.

(2)        For counties with wealth not less than eighty percent (80%) and not greater than ninety percent (90%) of the statewide average, a ratio of 1:19.4.

(3)        For counties with wealth less than eighty percent (80%) of the statewide average, a ratio of 1:19.1.

(4)        For local school administrative units receiving DSSF funds in fiscal year 2005‑2006, a ratio of 1:16. These local school administrative units shall receive no less than the DSSF amount allotted in fiscal year 2006‑2007.

For the purpose of this subsection, wealth shall be calculated under the low‑wealth supplemental formula as provided for in this act.

SECTION 7.5.(c)  If a local school administrative unit's wealth increases to a level that adversely affects the unit's disadvantaged student supplemental funding (DSSF) allotment ratio, the DSSF allotment for that unit shall be maintained at the prior year level for one additional fiscal year.

 

UNIFORM EDUCATION REPORTING SYSTEM (UERS) FUNDS

SECTION 7.6.  Funds appropriated in this act for the Uniform Education Reporting System (UERS) for the 2017‑2019 fiscal biennium shall not revert at the end of each fiscal year but shall remain available until expended.

 

BUDGET REDUCTIONS/DEPARTMENT OF PUBLIC INSTRUCTION

SECTION 7.7.(a)  Notwithstanding G.S. 143C‑6‑4, the Department of Public Instruction may, after consultation with the Office of State Budget and Management and the Fiscal Research Division, reorganize the Department, if necessary, to implement the budget reductions for the 2017‑2019 fiscal biennium. Consultation shall occur prior to requesting budgetary and personnel changes through the budget revision process. The Department of Public Instruction shall provide a current organization chart and the proposed organization chart clearly identifying the changes for the Department in the consultation process and shall report to the Joint Legislative Commission on Governmental Operations on any reorganization, including any movement of positions and funds between fund codes on a recurring basis.

SECTION 7.7.(b)  In implementing budget reductions for the 2017‑2019 fiscal biennium, the Department of Public Instruction shall make no reduction to funding (i) for the State Public School Fund, including for the following residential schools: Eastern North Carolina School for the Deaf, the North Carolina School for the Deaf, and the Governor Morehead School, and (ii) for any budget expansion item funded by an appropriation to the Department of Public Instruction by this act for the 2017‑2019 fiscal biennium. The Department shall also make no transfers from or reduction to funding or positions for any of the following:

(1)        Communities in Schools of North Carolina, Inc.

(2)        Teach For America, Inc.

(3)        Beginnings for Parents of Children Who are Deaf or Hard of Hearing, Inc.

(4)        The Excellent Public Schools Act, Read to Achieve Program, initially established under Section 7A.1 of S.L. 2012‑142.

(5)        The North Carolina School Connectivity Program.

(6)        The North Carolina Center for the Advancement of Teaching.

(7)        The North Carolina Innovative School District.

(8)        Eastern North Carolina STEM.

(9)        Positions appointed by and with a direct report to the State Superintendent of Public Instruction, including those positions described in Section 7.10 of this act.

 

DPI/ALIGNMENT OF FEDERAL FUNDS

SECTION 7.8.  The Department of Public Instruction, in consultation with the Office of State Budget and Management, shall align federal funds to accurately reflect the amount projected to be spent by the Department in each year of the 2017‑2019 fiscal biennium in accordance with the State Budget Act, Chapter 143C of the General Statutes, as part of the certification of the budget for the 2017‑2019 fiscal biennium.

 

ADMINISTRATION OF THE EXCELLENT PUBLIC SCHOOLS ACT

SECTION 7.9.(a)  From the funds appropriated to implement Section 7A.1 of S.L. 2012‑142, as amended, for the 2017‑2019 fiscal biennium only, the Department of Public Instruction shall use those funds for the following 13 time‑limited positions that support the kindergarten through third grade assessments pursuant to G.S. 115C‑174.11:

Position                                                                 Title

65017164                                                  Project Administrator

65017165                                                  Project Lead

65017166                                                  Project Lead

65017167                                                  Program Assistant V

65017169                                                  Northeast Consultant

65017170                                                  Southeast Consultant

65017171                                                  North Central Consultant

65017172                                                  Sandhills Consultant

65017173                                                  Piedmont Triad Consultant

65017174                                                  Southwest Consultant

65017250                                                  Northwest Consultant

65017251                                                  Western Consultant

65021990                                                  Project Coordinator

SECTION 7.9.(b)  The positions listed in subsection (a) of this section shall be in addition to the 11 permanent, full‑time positions authorized by Section 7A.12 of S.L. 2012‑142.

SECTION 7.9.(c)  This section expires June 30, 2019.

 

SUPERINTENDENT OF PUBLIC INSTRUCTION SUPPORT STAFF

SECTION 7.10.  Of the funds appropriated by this act to the Department of Public Instruction for the 2017‑2019 fiscal biennium, the Superintendent of Public Instruction may use up to seven hundred thousand dollars ($700,000) to appoint, in addition to any other personnel appointed by the Superintendent, up to 10 full‑time equivalent exempt policy‑making positions, as defined in G.S. 126‑5(b)(3), to staff the office of the Superintendent and assist in the administration of the Superintendent's duties under Article III and Section 4(2) of Article IX of the North Carolina Constitution as an elected officer and member of the Council of State and as secretary and chief administrative officer of the State Board of Education. Personnel appointed to these positions shall be exempt from the North Carolina Human Resources Act and shall report solely to the Superintendent of Public Instruction. The Superintendent of Public Instruction shall fix the salaries of the personnel for the office of the Superintendent within the funds available as provided by this section. The personnel for the office of the Superintendent of Public Instruction within the Department of Public Instruction shall be in addition to any staff appointed to the Department in accordance with G.S. 115C‑21(a)(1). The appointments shall not be subject to approval or disapproval by the State Board of Education.

 

CARRYFORWARD OF CERTAIN DPI FUNDS

SECTION 7.11.(a)  Section 8.7(g) of S.L. 2016‑94 reads as rewritten:

"SECTION 8.7.(g)  Of the funds appropriated to the Department of Public Instruction by this act for the 2016‑2017 fiscal year to support teacher compensation models and advanced teaching roles, the Department may use up to two hundred thousand dollars ($200,000) for the State Board of Education to contract with an independent research organization for the pilot evaluations. Any remaining funds may be used to award funds to selected local school administrative units for the implementation of the pilots in accordance with this section. Funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year for the pilot and for the evaluation of the pilot shall not revert at the end of the fiscal year but shall remain available until expended."

SECTION 7.11.(b)  Section 8.27(i) of S.L. 2016‑94 reads as rewritten:

"SECTION 8.27.(i)  Use of Funds. – Of the funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year to implement the LATP programs, the Department may use up to two hundred thousand dollars ($200,000) in nonrecurring funds for the State Board of Education to contract with the independent research organization as required by this section. Any remaining funds shall be used to award one‑year grants to each LATP program selected under subsection (c) of this section for the purposes of implementing the program. Each selected LATP program shall be awarded a proportional amount of the funds available. Funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year to implement the LATP programs and for the evaluation of the LATP programs shall not revert at the end of the fiscal year but shall remain available until expended."

SECTION 7.11.(c)  Section 5 of S.L. 2016‑110 reads as rewritten:

"SECTION 5. There is appropriated from the General Fund to the Department of Public Instruction four hundred thousand dollars ($400,000) in recurring funds for the 2016‑2017 fiscal year for salary and benefits for the ASDISD Superintendent, staff, and other expenses associated with the ASD.ISD. Any funds appropriated for this purpose that are unexpended at the end of the 2016‑2017 fiscal year shall not revert but shall remain available for one‑time, start‑up expenses of the ISD until the end of the 2017‑2018 fiscal year. There is appropriated from the General Fund to the Department of Public Instruction five hundred thousand dollars ($500,000) for the 2016‑2017 fiscal year to contract with an independent research organization to conduct the evaluation required in Section 4 of this act. Funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year for the evaluation shall not revert at the end of the fiscal year but shall remain available until expended."

SECTION 7.11.(d)  Funds appropriated to the Department of Public Instruction for the 2016‑2017 fiscal year by S.L. 2016‑94 and funds appropriated to the Department by this act for the 2017‑2019 fiscal biennium for allocation to local school administrative units and charter schools to bring high‑quality, reliable internet connectivity to the classroom level shall not revert at the end of each fiscal year but shall remain available until the end of the 2018‑2019 fiscal year.

SECTION 7.11.(e)  This section becomes effective June 30, 2017.

 

PROHIBIT TRANSFER OF LIMITED ENGLISH PROFICIENCY FUNDS

SECTION 7.12.  G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:

"(10a)  No funds shall be transferred out of the limited English proficiency allotment category."

 

PROHIBIT TRANSFER OF TEXTBOOKS AND DIGITAL RESOURCES FUNDS

SECTION 7.13.(a)  G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:

"(12)    Funds allotted for textbooks and digital resources may only be used for the purchase of textbooks and digital resources. These funds shall not be transferred out of the allotment for any other purpose."

SECTION 7.13.(b)  G.S. 115C‑105.25(c)(4) is repealed.

SECTION 7.13.(c)  This section becomes effective July 1, 2018.

 

CLASS SIZE FLEXIBILITY FOR CURRENT PILOT PROGRAMS AND DUAL LANGUAGE IMMERSION CLASSES

SECTION 7.15.(a)  Section 8.7(i) of S.L. 2016‑94 is repealed.

SECTION 7.15.(b)  Notwithstanding G.S. 115C‑301 or Section 1(b) of S.L. 2017‑9, local school administrative units approved by the State Board of Education to participate in the teacher compensation models and advanced teaching roles pilot program established under Section 8.7 of S.L. 2016‑94 may allow a certain number of schools that were identified in their proposals to exceed individual class size requirements in kindergarten through third grade for the duration of the pilot program ending with the 2019‑2020 school year as follows:

(1)        Chapel‑Hill Carrboro City Schools: 20 schools.

(2)        Charlotte‑Mecklenburg Schools: 46 schools.

(3)        Edgecombe County Schools: 14 schools.

(4)        Pitt County Schools: four schools.

(5)        Vance County Schools: three schools.

(6)        Washington County Schools: five schools.

SECTION 7.15.(c)  In addition to the schools listed in subsection (b) of this section, schools participating in the following programs may exceed individual class size requirements in kindergarten through third grade for the duration of the programs:

(1)        The existing Project LIFT, Inc., program in Charlotte‑Mecklenburg Schools (CMS). The schools participating in the Project LIFT, Inc., program are those schools within the feeder area for West Charlotte High School governed by the collaborative agreement between the CMS Board of Education and Project Leadership and Investment for Transformation.

(2)        The R3: Career Pathways Program in Pitt County Schools. The schools participating in the R3: Career Pathways Program are funded in part by a multiyear federal Teacher Incentive Fund (TIF) grant.

SECTION 7.15.(d)  G.S. 115C‑301, as amended by Section 2 of S.L. 2017‑9, is amended by adding a new subsection to read:

"(c1)    Class size requirements for kindergarten through third grade provided in subsection (c) of this section shall not apply to dual language immersion classes. For the purposes of this subsection, dual language immersion classes are classes in which (i) at least one‑third of the students' dominant language is English and (ii) instruction involves both English and a target foreign language with a minimum of fifty percent (50%) of core content taught in the target foreign language in order to promote dual language proficiency for all students."

SECTION 7.15.(e)  Subsection (b) of this section expires June 30, 2020. Subsection (d) of this section applies beginning with the 2017‑2018 school year.

 

IMPROVE EDUCATION FINANCIAL AND INFORMATION TRANSPARENCY

SECTION 7.16.(a)  The Department of Public Instruction shall implement the School Business System Modernization Plan, as proposed by the State Board of Education in the report required by Section 8.15(b) of S.L. 2016‑94, using the funds appropriated by this act for that purpose. It is the intent of the General Assembly to fund a multiphase, multiyear project to (i) modernize State and local education financial, human capital, and school information systems, (ii) provide for a common reporting system and analytics system, (iii) integrate financial, payroll, human resources, and related human capital systems through the use of a new software as a service enterprise resource planning (ERP) solution, make enhancements to existing local systems, or both, and (iv) link the State licensure system with the upgraded local systems. The State Superintendent of Public Instruction (State Superintendent) shall review and improve business processes in the Department of Public Instruction, as appropriate, and modernize State systems at the Department.

SECTION 7.16.(b)  The State Superintendent shall work with the Friday Institute for Educational Innovation at North Carolina State University, the Government Data Analytics Center (GDAC), local superintendents, charter school leadership, and local school administrative unit personnel administrators and finance officers to establish common data reporting requirements consistent with the Uniform Education Reporting System established by the State Board of Education. All local school administrative units and charter schools shall comply with the reporting requirements.

SECTION 7.16.(b1)  The State Superintendent shall work with the Friday Institute for Educational Innovation at North Carolina State University, GDAC, and other State agencies to improve communication between computer systems. The State Superintendent shall ensure, to the extent practicable, that its modernized computer systems are able to share data with computer systems at other State agencies, community colleges, and constituent institutions of The University of North Carolina.

SECTION 7.16.(c)  Of the funds appropriated to the Department of Public Instruction by this act for the school business system modernization plan for the 2017‑2019 fiscal biennium, the Department may use the sum of up to one million four hundred thirty thousand dollars ($1,430,000) in the 2017‑2018 fiscal year and one million four hundred twenty thousand dollars ($1,420,000) in the 2018‑2019 fiscal year to establish positions, to contract for services, or both for business‑specific project management. The State Superintendent shall be responsible for the implementation of the activities specified under this subsection and may appoint one of the positions established pursuant to Section 7.10 of this act to oversee the business‑specific project management required to implement the school business system modernization plan and other operating costs as necessary.

SECTION 7.16.(d)  Of the funds appropriated to the Department of Public Instruction by this act for the school business system modernization plan for the 2017‑2019 fiscal biennium, the Department shall transfer up to three million two hundred fifty thousand dollars ($3,250,000) for the 2017‑2018 fiscal year and up to two hundred fifty thousand dollars ($250,000) for the 2018‑2019 fiscal year to GDAC to leverage existing public‑private partnerships for the development and deployment of a data integration service that consolidates data from financial, human resources, licensure, student information, and related systems. Implementation shall also include development and deployment of a modern analytical platform and reporting environment. By December 1, 2017, GDAC shall execute any contractual agreements and interagency data sharing agreements necessary to develop the reporting system established by this section.

SECTION 7.16.(e)  As required by Section 8.15(c) of S.L. 2016‑94, the State Superintendent shall issue a Request for Proposal for an ERP software as a service solution by October 1, 2017. The State Superintendent may issue additional requests for proposals as needed to complete the requirements of subsection (a) of this section. The State Superintendent shall select the vendors for the development and implementation of the ERP and other enhancement solutions.

SECTION 7.16.(f)  Prior to executing any contractual agreements and interagency data sharing agreements necessary to develop the financial reporting system as provided for in this section, the State Superintendent shall submit to the Joint Legislative Education Oversight Committee (Committee) and the Fiscal Research Division an initial report by September 15, 2017, on the progress of GDAC's development and deployment of a data integration service that consolidates data from financial, human resources, licensure, student information, and related systems. The State Superintendent shall also submit an interim report to the Committee and the Fiscal Research Division by January 30, 2018, on the selection of a vendor for an ERP software as a service solution. Thereafter, the State Superintendent shall submit annual reports to the Committee and the Fiscal Research Division by March 15 of each year on the expenditure of funds for the project and progress of implementation until the completion of the project.

SECTION 7.16.(g)  Funds appropriated to the Department of Public Instruction for the 2017‑2019 fiscal biennium to implement the school business modernization system shall not revert at the end of the fiscal year but shall remain available until expended.

 

OFFICE OF CHARTER SCHOOLS/WEB‑BASED RECORD AND DATA MANAGEMENT

SECTION 7.17.(a)  The Department of Public Instruction shall use up to two hundred thousand dollars ($200,000) each fiscal year of the 2017‑2019 fiscal biennium to support the purchase of a Web‑based electronic records and data reporting management system to automate and streamline reporting and accountability requirements to assist the Office of Charter Schools (OCS) in complying with the annual reporting obligations of charter schools from the following available funds:

(1)        For the 2017‑2018 fiscal year, the Department shall use funds appropriated to the Department for the Uniform Education Reporting System (UERS) by S.L. 2015‑241 for the 2016‑2017 fiscal year that were unexpended and did not revert at the end of the 2016‑2017 fiscal year in accordance with Section 8.7 of that act.

(2)        For the 2018‑2019 fiscal year, the Department shall use funds appropriated to the Department for UERS by this act for the 2017‑2018 fiscal year that are unexpended and do not revert at the end of the 2017‑2018 fiscal year in accordance with Section 7.6 of this act.

SECTION 7.17.(b)  The Department shall purchase a system pursuant to subsection (a) of this section that meets all of the following requirements:

(1)        Allows OCS to develop and assign submission types to manage compliance with applicable law, control document transparency reporting, and create and manage users and roles throughout the system.

(2)        Controls collections of documents to assist in core authorizing functions, including the charter school application and charter school renewal processes.

(3)        Provides for the visualization of academic, financial, and demographic information for either an individual school or a portfolio of charter schools.

(4)        Provides for the safe and secure electronic storage of documents in a Tier 3 datacenter that meets the following standards:

a.         Sarbanes‑Oxley Act (SOX) compliant, including Statement on Auditing Standards (SAS) No. 70, Statement on Standards for Attestation Engagements (SSAE) No. 16, Service Organization Control (SOC) No. 1, and SOC No. 2.

b.         Health Insurance Portability and Accountability Act (HIPAA) compliant, including the Office for Civil Rights (OCR) HIPAA Audit Protocol.

c.         Payment Card Industry (PCI) Data Security Standard (DSS) compliant.

d.         Safe Harbor certification program compliant.

 

STATE BOARD OF EDUCATION/USE OF STATE FUNDS

SECTION 7.18.(a)  Article 2 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑13.5.  Prohibition on use of State funds to employ private counsel in litigation.

As provided in G.S. 114‑2.3(d) and G.S. 147‑17(c1), the State Board of Education shall not use any State funds to employ private counsel to provide litigation services to the State Board of Education. As used in this section, litigation services include legal work conducted in anticipation of or in preparation for any suit or action. As used in this section, private counsel includes any licensed attorney retained, engaged, or otherwise representing the State Board of Education but does not include a licensed attorney who holds a permanent budgeted position in either the Department of Justice or the State Board of Education."

SECTION 7.18.(b)  The State Board of Education may only appoint the following personnel positions to support the meetings and direct operations of the office of the State Board of Education:

Position number                         Title

(1)     65023576                             Attorney I.

(2)     60009384                             Attorney II.

(3)     65003194                             Paralegal II.

(4)     60095070                             Administrative Assistant I.

(5)     60009395                             Legislative Specialist.

(6)     60009391                             Director of State Board Operations.

(7)     65023814                             Planning and Development Consultant.

(8)     60009394                             Legislative and Community Affairs Director.

The State Board of Education may utilize other staff employed through the Department of Public Instruction to provide administrative and technical assistance to the State Board and to carry out the directives of the State Board.

SECTION 7.18.(c)  Subsection (a) of this section shall not apply to State funds that are encumbered for the 2016‑2017 fiscal year for the purposes of employing private counsel to represent the State Board of Education.

 

TEACHERS/ISOLATED K‑12 SCHOOLS

SECTION 7.19.  G.S. 115C‑301, as amended by S.L. 2017‑9, is amended by adding a new subsection to read:

"(g1)    Notwithstanding any other provision of this section, the State Board of Education shall allot additional classroom teachers to schools containing grades kindergarten through 12 when consolidation is not feasible due to the geographic isolation of the school and the school meets at least one of the following criteria for geographic isolation:

(1)        The school is located in a local school administrative unit in which the average daily membership is less than 1.5 per square mile.

(2)        The school is located in a local school administrative unit for a county containing more than 150,000 acres of national forest owned by the federal government and managed by the United States Forest Service pursuant to G.S. 104‑5.

The State Board shall allot teachers to geographically isolated schools pursuant to this subsection on the basis of one classroom teacher per grade level and shall allot teachers to the remainder of the local school administrative unit in accordance with the formulas for the regular classroom teacher allotment."

 

TURNING TAS INTO TEACHERS PILOT EXPANSION/STUDENT TEACHER EMPLOYMENT

SECTION 7.20.(a)  Section 8.29 of S.L. 2016‑94 reads as rewritten:

"TEACHER ASSISTANT TUITION REIMBURSEMENT PILOT PROGRAM

"SECTION 8.29.(a)  Purpose. – The purpose of this section is to establish a pilot program for for, beginning with the 2016‑2017 fiscal year, the local boards of education of the Anson County, Franklin County, Moore County, Richmond County, and Scotland County school administrative units and, beginning with the 2017‑2018 fiscal year, the local boards of education of the Alamance‑Burlington Schools, Beaufort County Schools, Bertie County Schools, Duplin County Schools, Edenton‑Chowan Schools, Edgecombe County Schools, Guilford County Schools, Halifax County Schools, Nash‑Rocky Mount Schools, Northampton County Schools, Randolph County Schools, Tyrrell County Schools, Vance County Schools, and Washington County Schools to provide tuition assistance awards to part‑time or full‑time teacher assistants working in those local school administrative units to pursue a college degree that will result in teacher licensure. Tuition assistance awards under the program may be provided for part‑time or full‑time coursework. A local board of education may grant a teacher assistant academic leave to pursue coursework that may only be taken during working hours. A teacher assistant receiving an award under the program shall fulfill the student teaching requirements of an educator preparation program by working in the teacher assistant's employing local school administrative unit. A teacher assistant shall continue to receive salary and benefits while student teaching in the local school administrative unit in accordance with G.S. 115C‑310(b).

"SECTION 8.29.(d)  The local boards of education participating in the pilot program for the 2016‑2017 fiscal year shall jointly report to the Joint Legislative Education Oversight Committee by September 1, 2017, 2017. All of the local boards of education participating in the pilot program shall jointly report to the Joint Legislative Education Oversight Committee by September 1, 2018, and by September 1 of each year thereafter on the results of the pilot program, including at least the following information:

(1)        The number and amount of funds in tuition assistance awards provided to teacher assistants.

(2)        The number of teacher assistant recipients who achieved teacher licensure, including the period of time from the issue of an initial tuition assistance award to the time of achieving licensure.

(3)        The number of recipients who remained employed in the local school administrative unit after achieving teacher licensure."

SECTION 7.20.(b)  G.S. 115C‑310 reads as rewritten:

"§ 115C‑310.  Teacher assistants engaged in student teaching.

(a)        The State Board of Education shall adopt a program to facilitate the process by which teacher assistants may become teachers.

Teacher assistants who participate in this program:program shall meet the following requirements:

(1)        Shall beBe enrolled in an approved teacher education program in a North Carolina institution of higher education; andeducation.

(2)        Shall beBe employed in a North Carolina public school.

Local school administrative units are encouraged to assign teacher assistants to a different classroom during student teaching than the classroom they are assigned to as a teacher assistant. To the extent possible, they may be assigned to another school within the same local school administrative unit.

(b)        At the discretion of the local school administrative unit, teacher assistants mayTeacher assistants shall continue to receive their salary and benefits while student teaching in the same local school administrative unit where they are employed as a teacher assistant.

(c)        The State Board of Education shall consult with the Board of Governors of The University of North Carolina and the North Carolina Independent Colleges and Universities in the development of the program. Each approved teacher education program and each local school administrative unit shall administer this program beginning with the 2005‑2006 academic year."

SECTION 7.20.(c)  Subsection (b) of this section applies beginning with the 2017‑2018 school year.

 

COOPERATIVE INNOVATIVE HIGH SCHOOL FUNDING CHANGES

SECTION 7.22.(a)  Legislative Findings. – The General Assembly finds the following in regard to the State's long‑term, ongoing investment in providing high school students with opportunities to obtain postsecondary credit and career credentials at no cost to the student in order to maximize cost savings to students in obtaining a postsecondary education:

(1)        Dual enrollment opportunities for high school students have been available in the State for many years but began to significantly grow in the early‑ to mid‑2000s as a result of the General Assembly's enactment of the Innovative Education Initiatives Act and the establishment of the cooperative innovative high school program pursuant to Part 9 of Article 16 of Chapter 115C of the General Statutes. This act demonstrated the State's commitment in prioritizing cooperative efforts between secondary schools and institutions of higher education so as to reduce the high school dropout rate, increase high school and college graduation rates, decrease the need for remediation in institutions of higher education, and raise certificate, associate, and bachelor degree completion rates.

(2)        To ensure continued efficiency in the investment of State funds to provide postsecondary dual enrollment programs for high school students, the General Assembly directed the State Board of Education and the State Board of Community Colleges to jointly establish the Career and College Promise Program pursuant to Section 7.1A of S.L. 2011‑145, effective January 1, 2012, to consolidate existing cooperative efforts between secondary schools and institutions of higher education by providing (i) for specific pathways for obtaining college credit that is transferable to community colleges and institutions of higher education, (ii) for college credit leading to a subject‑area certificate, diploma, or degree, and (iii) through enrollment at a cooperative innovative high school, enabling students to concurrently obtain a high school diploma and to begin or complete an associate degree program, master a certificate or vocational program, or earn up to two years of college credit within five years.

(3)        The recent growth in the establishment of cooperative innovative high school programs has resulted in a steady increase in full‑time equivalent (FTE) student enrollment at community colleges due to the maturation of those programs, including an increase of one hundred forty percent (140%) in FTE enrollment for these students between 2008‑2009 and 2013‑2014.

(4)        The implementation of other Career and College Promise pathways enabling certain traditional high school students to concurrently enroll in postsecondary courses leading to a defined academic goal has also resulted in a recent rise in student enrollment at community colleges with a thirty percent (30%) increase in the College Transfer pathway and a twenty‑one percent (21%) increase in the Career and Technical Education pathway between 2012‑2013 and 2013‑2014.

(5)        For the 2013‑2014 academic year, the General Assembly appropriated fifty‑seven million dollars ($57,000,000) in State funds to cover community college FTE for 11,389 students during the first year of full implementation of the Career and College Promise Program.

(6)        For the 2015‑2016 fiscal year, the General Assembly appropriated the following amounts to cover the cost of cooperative innovative high schools and other Career and College Promise programs:

a.         For the cooperative innovative high school allotment, the sum of twenty‑five million four hundred eighty‑eight thousand seven hundred twenty‑five dollars ($25,488,725).

b.         For community college FTE for the following:

1.         For students enrolled in cooperative innovative high schools, the sum of forty‑two million two hundred ninety‑one thousand three hundred eighty‑six dollars ($42,291,386).

2.         For students enrolled in courses that count toward the College Transfer pathway, the sum of twenty‑one million three hundred forty‑three thousand five hundred seven dollars ($21,343,507).

3.         For students enrolled in courses that count toward the Career and Technical Education pathway, the sum of twenty‑one million seven hundred eight thousand nine hundred thirty‑two dollars ($21,708,932).

c.         For the reimbursement of tuition for constituent institutions of The University of North Carolina as a partner institution of higher education to a cooperative innovative high school, the sum of one million nine hundred forty‑five thousand two hundred one dollars ($1,945,201).

d.         For the reimbursement of tuition for private colleges located in North Carolina that are a partner institution of higher education to a cooperative innovative high school, the sum of four hundred fifty‑seven thousand six hundred thirty‑nine dollars ($457,639).

(7)        Since considerable State funds have been appropriated on an ongoing basis to cover the cost of high school student enrollment at community colleges, constituent institutions, and approved private colleges pursuant to G.S. 115C‑238.54 and G.S. 115D‑5(b)(12) as part of the Career and College Promise programs, it is necessary to examine the total cost of these programs and prioritize the appropriation of State funds to achieve the General Assembly's goal of maximizing cost savings to students in obtaining a postsecondary education. This shall include modifying the amount of funds allocated to local school administrative units for the cooperative innovative high school allotment.

SECTION 7.22.(b)  Study. – In accordance with the legislative finding set forth in subdivision (7) of subsection (a) of this section, by February 15, 2018, the State Board of Community Colleges, the Board of Governors of The University of North Carolina, and the State Board of Education shall study and report to the Senate Appropriations Committee on Education/Higher Education, the House Appropriations Committee on Education, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee on the costs associated with the Career and College Promise Program, including operation of cooperative innovative high schools and the cost of concurrent enrollment in the high school and the institution of higher education, student outcomes related to the Program, and any legislative recommendations on modifications to the administration and funding for the Program. Legislative recommendations shall also specifically address the use of the funds for the cooperative innovative high school allotment, whether the allotment is necessary for the operation of the schools, and how modification or discontinuation of the allotment would impact the programs.

SECTION 7.22.(c)  Cooperative Innovative High Schools Located in Tier I Areas. – Of the funds appropriated to the Department of Public Instruction by this act for the 2017‑2019 fiscal biennium, the Department shall allocate the sum of two hundred seventy‑five thousand dollars ($275,000) in recurring funds for each fiscal year from the cooperative innovative high school supplemental allotment to a local school administrative unit located, as of July 1, 2017, in a development tier one area as defined in G.S. 143B‑437.08, with a cooperative innovative high school that was approved by the State Board of Education under G.S. 115C‑238.51A(c), except as follows:

(1)        For a virtual cooperative innovative high school, the Department shall allocate the sum of two hundred thousand dollars ($200,000) in recurring funds from the cooperative innovative high school supplemental allotment to the local school administrative unit for each fiscal year.

(2)        For the Northeast Regional School of Biotechnology and Agriscience, the Department shall allocate the sum of three hundred ten thousand dollars ($310,000) in recurring funds from the regional school supplemental allotment for the school for each fiscal year.

SECTION 7.22.(d)  Cooperative Innovative High Schools Located in Tier II Areas. – Of the funds appropriated to the Department of Public Instruction by this act for the 2017‑2019 fiscal biennium, the Department shall allocate the sum of two hundred thousand dollars ($200,000) in recurring funds for each fiscal year from the cooperative innovative high school supplemental allotment to a local school administrative unit located, as of July 1, 2017, in a development tier two area as defined in G.S. 143B‑437.08, with a cooperative innovative high school that was approved by the State Board of Education pursuant to G.S. 115C‑238.51A(c), including a virtual cooperative innovative high school.

SECTION 7.22.(e)  Cooperative Innovative High Schools Located in Tier III Areas. – Of the funds appropriated to the Department of Public Instruction by this act for the 2017‑2019 fiscal biennium, the Department shall allocate the following amounts from the cooperative innovative high school supplemental allotment to a local school administrative unit located, as of July 1, 2017, in a development tier three area as defined in G.S. 143B‑437.08, with a cooperative innovative high school that was approved by the State Board of Education pursuant to G.S. 115C‑238.51A(c):

(1)        For the 2017‑2018 fiscal year, the Department shall allocate the sum of one hundred eighty thousand dollars ($180,000) in recurring funds and twenty thousand dollars ($20,000) in nonrecurring funds from the cooperative innovative high school supplemental allotment.

(2)        For the 2018‑2019 fiscal year, the Department shall allocate the sum of one hundred eighty thousand dollars ($180,000) in recurring funds from the cooperative innovative high school supplemental allotment.

SECTION 7.22.(f)  Applicability of Funds Allocated Pursuant to This Section. – The allotment of funds to local school administrative units pursuant to the provisions of subsections (c), (d), and (e) of this section shall include a cooperative innovative high school approved by the State Board of Education pursuant to G.S. 115C‑238.51A(c) since July 1, 2015, that is operated by a local school administrative unit but that has not received the cooperative innovative high school allotment in a prior fiscal year. Funds shall not be allocated to local school administrative units for cooperative innovative high schools approved by the State Board pursuant to G.S. 115C‑238.51A(b).

SECTION 7.22.(g)  Reporting Requirement on the Career and College Promise Programs. – G.S. 115D‑5 is amended by adding a new subsection to read:

"(x)      In addition to the evaluation of cooperative innovative high schools by the State Board of Education pursuant to G.S. 115C‑238.55, the State Board of Community Colleges, in conjunction with the State Board of Education and the Board of Governors of The University of North Carolina, shall evaluate the success of students participating in the Career and College Promise Program, including the College Transfer pathway and the Career and Technical Education pathway. Success shall be measured by high school retention rates, high school completion rates, high school dropout rates, certification and associate degree completion, admission to four‑year institutions, postgraduation employment in career or study‑related fields, and employer satisfaction of employees who participated in the programs. The Boards shall jointly report by January 15 of each year to the Joint Legislative Education Oversight Committee."

 

PREPARING FUTURE WORKFORCE IN CODING AND MOBILE APP DEVELOPMENT GRANT PROGRAM

SECTION 7.23.(a)  Program Purpose. – The Department of Public Instruction shall establish the Coding and Mobile Application Grant Program (Program) to develop industry partnerships with local school administrative units and charter schools to design and implement computer science, coding, and mobile application development curricular programs for middle school and high school students. Funds appropriated for the Program shall be used to award competitive grants of up to four hundred thousand dollars ($400,000) each fiscal year to grant recipients. Grant funds shall be used for the purchase of equipment, digital materials, and related capacity building activities, which may include teacher professional development for coding, computer science, and mobile application development initiatives. Grant recipients shall use no more than five percent (5%) of the grant award each fiscal year for administrative costs.

SECTION 7.23.(b)  Program Criteria and Guidelines; Applications. – By August 15, 2017, the Superintendent of Public Instruction shall establish criteria and guidelines for grant applications and Program requirements for local school administrative units and charter schools, including sufficient curricular rigor for courses offered to students. The Department of Public Instruction shall accept applications for the first year of the Program until October 15, 2017. For subsequent fiscal years in which funds are available for new applications to the Program, the Department shall accept applications until May 15 of that year. Grant applicants shall submit at least the following information in their applications:

(1)        A description of how the proposed partnership initiative will provide increased career opportunities for students to engage in high‑wage, high‑skill, and high‑demand occupations.

(2)        Demonstrated evidence of employer demand for the partnership initiative and related career and technical education (CTE) training, including documentation of industry involvement in the partnership initiative.

(3)        A proposed budget for the partnership initiative, including demonstrated commitment of local or regional partners to sustain the programs beyond the initial grant funding.

(4)        A description of how the proposed initiative aligns with other programs, including CTE, Career and College Pathways, and postsecondary programs and, if appropriate, how equipment necessary for the initiative will be utilized by partners.

(5)        A description of how the project will create innovative, nontraditional, and immediate career pathways for students to enter high demand jobs in the development of mobile software applications.

SECTION 7.23.(c)  Selection of Recipients. – In selecting recipients for the Program, the Superintendent of Public Instruction shall consider diversity among the pool of applicants, including geographic location, the positive impact on the community of industry partnerships, and the size of the student population served by the recipient, in order to award funds to the extent possible to grant recipients that represent different characteristics of the State. The Superintendent of Public Instruction shall select initial grant recipients by November 15, 2017, to begin implementation of the partnership initiatives under the Program as early as the spring semester of the 2017‑2018 school year. For subsequent fiscal years in which funds are available for new applications to the Program, the Superintendent shall select grant recipients by July 15 of that year.

SECTION 7.23.(d)  Reporting Requirements. – By August 1 of each year of the Program, grant recipients shall submit a report to the Department of Public Instruction, beginning with an initial report by August 1, 2018, for the preceding year in which grant funds were expended that provides at least the following information on the partnership initiative:

(1)        The use of grant funds.

(2)        The number of students by grade level participating in the partnership initiative.

(3)        The number of students who subsequently participated in work‑based opportunities, internships, or apprenticeship programs and a description of the types of opportunities for those students.

(4)        Student outcome data regarding job attainment and postsecondary opportunities as a result of the partnership initiative.

(5)        Any other information the Superintendent of Public Instruction deems necessary.

By September 15 of each year of the Program, the Department shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division, beginning with an initial report by September 15, 2018, on grant recipients and implementation of the program, including the information required to be reported to the Department pursuant to this subsection and any legislative recommendations for modifications or expansion of the Program.

 

EXPAND SCHOOL CONNECTIVITY INITIATIVE/CYBERSECURITY AND RISK MANAGEMENT

SECTION 7.23A.(a)  The State Board of Education and the Department of Public Instruction, in collaboration with the Friday Institute at North Carolina State University, shall expand the School Connectivity Initiative client network engineering to include cybersecurity and risk management services supporting local school administrative units and charter schools. The expansion shall include the following:

(1)        Continuous monitoring and risk assessment. – Cloud‑based solutions to discover assets, assess their security posture, and recommend corrective actions based on real‑world risk reduction.

(2)        Security advisory and consulting services. – Five regional security consultants working with schools to assess security posture and develop and implement improvement plans. The plans shall include security policy, building security programs, implementing effective security controls, and ongoing support for operating security governance.

(3)        Security training and education services. – Security training and education for teachers, staff, and administrators.

SECTION 7.23A.(b)  Of the funds appropriated by this act to the Department of Public Instruction for the Digital Learning Plan for the 2017‑2019 fiscal biennium, the Department shall use up to two hundred thousand dollars ($200,000) for each fiscal year of the 2017‑2019 fiscal biennium to develop and implement the new cybersecurity and risk management services to support public school cybersecurity and risk management service operations.

 

REPORT ON CURSIVE WRITING AND MULTIPLICATION TABLES

SECTION 7.23B.  The State Board of Education and the Department of Public Instruction shall report to the Joint Legislative Education Oversight Committee by March 30, 2018, regarding the measures taken by each local school administrative unit to implement the requirements regarding cursive writing and memorization of the multiplication tables pursuant to G.S. 115C‑81(k) and (l) and to ensure that those requirements are met.

 

JOINT LEGISLATIVE TASK FORCE ON EDUCATION FINANCE REFORM

SECTION 7.23D.(a)  There is created the Joint Legislative Task Force on Education Finance Reform (Task Force).

SECTION 7.23D.(b)  The Task Force shall consist of nine members of the Senate appointed by the President Pro Tempore of the Senate and nine members of the House of Representatives appointed by the Speaker of the House of Representatives. The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each appoint a cochair of the Task Force from among its membership. These appointments shall be made no later than September 1, 2017.

It is expected that the makeup of the Task Force reflect geographic and urban/rural diversity. At least one member of the House of Representatives and at least one member of the Senate shall be from the minority party of their respective chambers.

SECTION 7.23D.(c)  In consultation with the State Board of Education and the Department of Public Instruction, the Task Force shall study various weighted student formula funding models and develop a new funding model for the elementary and secondary public schools of North Carolina based on a weighted student formula. As a part of this process, the Task Force shall do all of the following:

(1)        Review the State's current public school allotment system and undertake an in‑depth study of various types of weighted student formula funding models. In its study, the Task Force is encouraged to consider models used by other states.

(2)        Determine the base amount of funds that must be distributed on a per student basis to cover the cost of educating a student in the State.

(3)        Identify the student characteristics eligible for weighted funding and the associated weights for each of these characteristics.

(4)        Resolve the extent to which the base amount of funds to be distributed would be adjusted based on the characteristics of each local school administrative unit.

(5)        Decide which funding elements, if any, would remain outside the base of funds to be distributed under a weighted student formula.

(6)        Study other funding models for elementary and secondary public schools, including public charter schools, in addition to the weighted student funding formula.

(7)        Study funding models to provide children with disabilities with a free appropriate public education. This shall include a consideration of economies of scale, the advisability and practicality of capping additional funding for children with disabilities, and additional costs associated with services required for particular disabilities.

(8)        Study any other issue the Task Force considers relevant.

SECTION 7.23D.(d)  The Task Force shall meet upon the call of its cochairs. A quorum of the Task Force is a majority of its members. No action may be taken except by a majority vote at a meeting at which a quorum is present. The Task Force, while in the discharge of its official duties, may exercise all powers provided for under G.S. 120‑19 and G.S. 120‑19.1 through G.S. 120‑19.4. The Task Force may contract for professional, clerical, or consultant services, as provided by G.S. 120‑32.02. If the Task Force hires a consultant, the consultant shall not be a State employee or a person currently under contract with the State to provide services. Members of the Task Force shall receive per diem, subsistence, and travel allowance as provided in G.S. 120‑3.1. The expenses of the Task Force shall be considered expenses incurred for the joint operation of the General Assembly.

SECTION 7.23D.(e)  The Legislative Services Officer shall assign professional and clerical staff to assist the Task Force in its work. The Director of Legislative Assistants of the House of Representatives and the Director of Legislative Assistants of the Senate shall assign clerical support to the Task Force.

SECTION 7.23D.(f)  Meetings of the Task Force shall begin no later than October 1, 2017. The Task Force shall submit a final report on the results of its study and development, including proposed legislation, to the Joint Legislative Education Oversight Committee on or before October 1, 2018, by filing a copy of the report with the Office of the President Pro Tempore of the Senate, the Office of the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Legislative Library. The Task Force shall terminate on October 1, 2018, or upon the filing of its final report, whichever comes first.

 

ELIMINATE ANALYSIS OF STUDENT WORK PROCESS FOR TEACHER EVALUATIONS

SECTION 7.23E.(a)  The State Board of Education shall eliminate the use of the analysis of student work process and shall prohibit use of an analysis of student work process to assess teacher performance and professional growth as part of the North Carolina Teacher Evaluation System.

SECTION 7.23E.(b)  The consolidated State plan to be submitted by the State Board of Education and the Department of Public Instruction to the U.S. Department of Education as required by the Elementary and Secondary Education Act of 1965, 20 U.S.C. § 6301, et seq., as amended by the Every Student Succeeds Act, P.L. 114‑95, shall reflect the requirements of subsection (a) of this section.

SECTION 7.23E.(c)  G.S. 115C‑296(e) reads as rewritten:

"(e)      The State Board of Education shall develop a mentor program to provide ongoing support for teachers entering the profession. In developing the mentor program, the State Board shall conduct a comprehensive study of the needs of new teachers and how those needs can be met through an orientation and mentor support program. For the purpose of helping local boards to support new teachers, the State Board shall develop and distribute guidelines which address optimum teaching load, extracurricular duties, student assignment, and other working condition considerations. These guidelines shall provide that initially licensed teachers not be assigned extracurricular activities unless they request the assignments in writing and that other noninstructional duties of these teachers be minimized. The State Board shall develop and coordinate a mentor teacher training program. The State Board shall develop criteria for selecting excellent, experienced, and qualified teachers to be participants in the mentor teacher training program, including requiring that mentor teachers have been rated, through formal evaluations, at least at the "accomplished" level as part of the North Carolina Teacher Evaluation System and have met expectations for student growth.System."

SECTION 7.23E.(d)  G.S. 115C‑296.11(b)(3) reads as rewritten:

"(3)      Educator preparation programs shall ensure clinical educators who supervise students in residencies or internships meet the following requirements:

a.         Be professionally licensed in the field of licensure sought by the student.

b.         Have a minimum of three years of experience in a teaching role.

c.         Have been rated, through formal evaluations, at least at the "accomplished" level as part of the North Carolina Teacher Evaluation System and have met expectations as part of student growth System in the field of licensure sought by the student."

SECTION 7.23E.(e)  This section applies beginning with the 2017‑2018 school year.

 

SIXTH AND SEVENTH GRADE CTE PROGRAM EXPANSION GRANT PROGRAM

SECTION 7.23F.(a)  G.S. 115C‑64.15 reads as rewritten:

"§ 115C‑64.15.  North Carolina Education and Workforce Innovation Commission.

(d)       The Commission shall develop and administer the Education and Workforce Innovation Program, as established under G.S. 115C‑64.16, and make awards of grants under the Program. The Commission shall work closely with the North Carolina New Schools in administering the program.

(d1)     The Commission shall develop and administer, in coordination with the State Board of Education and the Superintendent of Public Instruction, the Career and Technical Education Grade Expansion Program, as established under G.S. 115C‑64.17, and shall make awards of grants under the Program.

(e)        The Commission shall publish a report on the Education and Workforce Innovation Program and the Career and Technical Education Grade Expansion Program on or before April 30 of each year. The report shall be submitted to the Joint Legislative Education Oversight Committee, the State Board of Education, the State Board of Community Colleges, and the Board of Governors of The University of North Carolina. The report shall include at least all of the following information:

(1)        An accounting of how funds and personnel resources were utilized for each program and their impact on student achievement, retention, and employability.

(2)        Recommended statutory and policy changes.

(3)        Recommendations for improvement of the each program.

(4)        For the Career and Technical Education Grade Expansion Program, recommendations on increasing availability of grants after the first two years of the program to include additional local school administrative units or providing additional grants to prior recipients."

SECTION 7.23F.(b)  Article 6C of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑64.17.  The Career and Technical Education Grade Expansion Program.

(a)        Program Establishment. – There is established the Career and Technical Education Grade Expansion Program (Program) to expand career and technical education (CTE) programs by prioritizing the inclusion of students in sixth and seventh grade through grant awards provided to selected local school administrative units for up to seven years. Funds appropriated for the Program shall be allocated to selected local school administrative units as competitive grants of (i) up to seven hundred thousand dollars ($700,000) for the 2017‑2018 fiscal year and (ii) to the extent funds are available, up to one million dollars ($1,000,000) for the 2018‑2019 fiscal year and subsequent fiscal years. Grant funds shall be used only for employing additional licensed personnel in career and technical education areas, career development coordination areas, and support service areas necessary for expanding the CTE program to sixth and seventh grade students. The funds may be used for CTE programs at one or more schools in the local school administrative unit. Grant funds allocated to the local school administrative unit each fiscal year under the Program shall not revert but shall be available for the purpose of the grant program until expended.

(b)        Consideration of Factors in Awarding of Grants. – Local school administrative units applying for the Program shall submit an application that includes at least the following information:

(1)        A plan for expansion of the CTE program to sixth and seventh grade students, including the specific programs that will be expanded, the significance of CTE in the local school administrative unit, and how a grade expansion would enhance the education program and the community.

(2)        A request for the amount of funds, a description of how the funds will be used, and any other sources of funds available to accomplish the purposes of this program.

(3)        A proposed budget for seven years that provides detail on the use of the amount of funds to add personnel, increase career development efforts, and provide support services.

(4)        A strategy to achieve meaningful analysis of program outcomes due to the receipt of grant funds under this section.

(c)        Selection of Recipients. – For the 2017‑2018 fiscal year, the Commission shall accept applications for a grant until November 1, 2017. For subsequent fiscal years that funds are made available for the Program, the Commission shall accept applications for a grant until August 1 of each year. The Commission shall select recipients in a manner that considers diversity among the pool of applicants, including geographic location, location of industries in the area in which a local school administrative unit is located, and the size of the student population served by the unit, in order to award funds to the extent possible to grant recipients that represent different regions and characteristics of the State. The Commission shall recommend recipients of the grants to the State Board of Education. The State Board, upon consultation with the Superintendent of Public Instruction, shall approve the recipients of grant awards.

(d)       Allocation of Funds. – Of the funds available for the Program in each fiscal year, the Commission shall first allocate funds to applicants who received grant funds for the prior fiscal year for up to seven years. After funds are allocated to prior fiscal year grant recipients, any remaining funds may be used by the Commission to select new grant recipients. The Commission, in consultation with the Superintendent of Public Instruction, shall establish rules regarding any requirements for grant recipients to continue eligibility to receive funds each fiscal year, including timely and accurate reporting as required under subsection (e) of this section.

(e)        Reporting Requirements. – No later than August 1 of each year, for up to seven years after the initial grant award, a grant recipient shall submit to the Department of Public Instruction, Local Planning Systems Regional Services staff within the Division of Career and Technical Education, an annual report for the preceding year in which grant funds were expended that provides at least the following information on the program for sixth and seventh grade students:

(1)        The use of grant funds, including the CTE programs and courses that have been expanded in the local school administrative unit to include sixth and seventh grade students.

(2)        The number of students enrolled in CTE courses as part of the expansion.

(3)        The number of students who subsequently enrolled in CTE courses in high school.

(4)        The number of students who subsequently participated in internships, cooperative education, or apprenticeship programs.

(5)        The number of students who subsequently earned (i) college credit and (ii) approved industry certification and credentials.

(6)        Any other information the Division of Career and Technical Education deems necessary.

The Superintendent of Public Instruction shall provide a report to the Commission by October 15 of each year based on the information reported to the Local Planning Systems Regional Services staff under this subsection, including how the grant recipients compare to CTE programs statewide and whether the programs are aligned with the Master Plan for Career and Technical Education adopted by the State Board."

SECTION 7.23F.(c)  For the 2017‑2019 fiscal biennium, the following funds shall be allocated to the North Carolina Education and Workforce Innovation Commission (Commission) established in G.S. 115C‑64.15, as amended by Section 7.23G of this act, for the award of grants to grant recipients for the Career and Technical Education Grade Expansion Program in accordance with G.S. 115C‑64.17, as enacted by this section:

(1)        Of the funds appropriated by this act to the Department of Public Instruction for the 2017‑2019 fiscal biennium, the Department shall allocate the sum of seven hundred thousand dollars ($700,000) each fiscal year to the Commission.

(2)        Of the funds appropriated by this act to the Department of Public Instruction for the 2017‑2018 fiscal year, the Department of Public Instruction shall allocate the sum of three million five hundred thousand dollars ($3,500,000) for the 2017‑2018 fiscal year to the Commission.

SECTION 7.23F.(d)  The funds allocated to the Commission under subsection (c) of this section shall not revert at the end of each fiscal year but shall remain available until expended.

 

TRANSFER EDUCATION AND WORKFORCE INNOVATION COMMISSION TO DPI

SECTION 7.23G.(a)  The North Carolina Education and Workforce Innovation Commission (Commission) is hereby transferred to the Department of Public Instruction. This transfer shall have all of the elements of a Type II transfer, as described in G.S. 143A‑6, except that the management functions of the Commission, except for the provision of technical assistance and administrative assistance, including staff, shall not be performed under the direction and supervision of the Department of Public Instruction.

SECTION 7.23G.(b)  G.S. 115C‑64.15(a) reads as rewritten:

"(a)      There is created the North Carolina Education and Workforce Innovation Commission (Commission). The Commission shall be located administratively in the Office of the GovernorDepartment of Public Instruction but shall exercise all its prescribed powers independently of the Office of the Governor.Department of Public Instruction. Of the funds appropriated for the Education and Workforce Innovation Program established under G.S. 115C‑64.16, up to two hundred thousand dollars ($200,000)ten percent (10%) of those funds each fiscal year may be used by the Office of the GovernorDepartment of Public Instruction to provide technical assistance and administrative assistance, including staff, to the Commission and for reimbursements and expenses for the Commission.Commission for the Education and Workforce Innovation Program and the Career and Technical Education Grade Expansion Program."

SECTION 7.23G.(c)  Section 23.1(a) of S.L. 2014‑100 is repealed.

 

FUTURE READY STUDENTS

SECTION 7.23H.(a)  G.S. 115C‑47 reads as rewritten:

"§ 115C‑47.  Powers and duties generally.

In addition to the powers and duties designated in G.S. 115C‑36, local boards of education shall have the power or duty:

(30)      To Appoint Advisory Councils. – Local boards of education are authorized to appoint advisory councils as provided in G.S. 115C‑55.G.S. 115C‑55 and Article 10 of this Chapter.

(34a)    To Establish Work‑Based Opportunities and Encourage High School to Work Partnerships. – Each local board of education shall offer at least two work‑based learning opportunities that are related to career and technical education instruction in the local school administrative unit as required by G.S. 115C‑157. Local boards of education shall also encourage high schools and local businesses to partner, specifically to target students who may not seek higher education, and facilitate high school to work partnerships. Local businesses shall be encouraged to work with local high schools to create opportunities for students to complete a job shadow, internship, or apprenticeship. Students may also be encouraged to tour the local business or clinic, meet with employees, and participate in career and technical student organizations. Waiver forms may shall be developed in collaboration with participating businesses for the protection of both the students and the businesses.

Each local board of education shall encourage high schools to designate the Career Development Coordinator or other designee of the local Career and Technical Education administrator to be the point person for local businesses to contact. If the person selected is a teacher, the teacher shall work with the principal and the local Career and Technical Education administrator to find time in the school day to contact businesses and develop opportunities for students. The high school shall include a variety of trades and skilled labor positions for students to interact with and shadow and shall encourage students who may be interested in a job‑shadowing opportunity to pursue and set up the job shadow.

Each local board of education shall develop a policy with provisions for students who are absent from school while doing a job shadow to make up the work. Students shall not be counted as absent when participating in these work‑based learning opportunities or in Career and Technical Education student organization activities. Local boards may determine maximum numbers of days to be used for job‑shadowing activities.

…."

SECTION 7.23H.(b)  G.S. 115C‑55 reads as rewritten:

"§ 115C‑55.  Advisory councils.

A board of education may appoint an advisory council for any school or schools within the local school administrative unit. The purpose and function of an advisory council shall be to serve in an advisory capacity to the board on matters affecting the school or schools for which it is appointed. The Except as otherwise provided under Part 4 of Article 10 of this Chapter for business advisory councils, the organization, terms, composition and regulations for the operation of such advisory council shall be determined by the board."

SECTION 7.23H.(c)  G.S. 115C‑81(a1) reads as rewritten:

"(a1)    The Basic Education Program shall describe the education program to be offered to every child in the public schools. It shall provide every student in the State equal access to a Basic Education Program. Instruction shall be offered in the areas of arts, communication skills, physical education and personal health and safety, mathematics, media and computer skills, science, second languages, social studies, and vocational career and technical education.

Instruction in vocational career and technical education under the Basic Education Program shall be based on factors including:

(1)        The integration of academic and vocational career and technical education;education.

(2)        A sequential course of study leading to both academic and occupational competencies;competencies.

(3)        Increased student work skill attainment and job placement;placement.

(4)        Increased linkages, where geographically feasible, between public schools and community colleges, so the public schools can emphasize academic preparation and the community colleges can emphasize specific job training; andtraining.

(5)        Instruction and experience, to the extent practicable, in all aspects of the industry the students are prepared to enter."

SECTION 7.23H.(d)  G.S. 115C‑81.1 reads as rewritten:

"§ 115C‑81.1.  Basic Education Program Funds not to supplant Local funds for schools.

It is the intent of the General Assembly that budget funds appropriated by the General Assembly for vocational career and technical education programs and clerical personnel to implement the Basic Education Program be used to supplement and not supplant existing State and local funding for the public schools. Therefore, to the extent that local school administrative units receive additional State funds for vocational career and technical education programs and clerical personnel positions that were previously funded in whole or in part with nonstate funds, the local governments shall continue to spend for public school operating or capital purposes in the local school administrative units the amount of money they would have spent to provide the vocational career and technical education programs and the school clerical personnel previously funded with nonstate funds.

Priority shall be given to funding capital needs, particularly those resulting from implementation of the Basic Education Program."

SECTION 7.23H.(e)  Article 10 of Chapter 115C of the General Statutes reads as rewritten:

"Article 10.

"Vocational Career and Technical Education.

"Part 1. Vocational Career and Technical Education Programs.

"§ 115C‑151.  Statement of purpose.

It is the intent of the General Assembly that vocational career and technical education be an integral part of the educational process. The State Board of Education shall administer through local boards of education a comprehensive program of vocational career and technical education that shall be available to all students, with priority given to students in grades eight through 12, who desire it in the public secondary schools and middle schools of this State. The purposes of vocational career and technical education in North Carolina public secondary schools shall be:be as follows:

(1)        Occupational Skill Development. – To prepare individuals for paid or unpaid employment in recognized occupations, new occupations, and emerging occupations.

(2)        Preparation for Advanced Education. – To prepare individuals for participation in advanced or highly skilled vocational career and technical education.

(3)        Career Development; Introductory. – To assist individuals in the making of informed and meaningful occupational choices.

It is also legislative intent to authorize the State Board of Education to support appropriate vocational career and technical education instruction and related services for individuals who have special vocational career and technical education needs which can be fulfilled through a comprehensive vocational career and technical education program as designated by State Board of Education policy or federal vocational career and technical education legislation.

"§ 115C‑152.  Definitions.

The State Board of Education shall provide appropriate definitions to vocational career and technical education programs, services, and activities in grades 6‑12 five through 12 not otherwise included in this Part. As used in this Part, the following definitions apply, unless the context requires otherwise:

(1)        "Career development; introductory" introductory; or career awareness program" means an instructional program, service, or activity designed to familiarize individuals with the broad range of occupations for which special skills are required and the requisites for careers in such occupations. A career awareness program offered to elementary school students shall encourage students to explore career pathways and prepare students for the transition to middle school career planning.

(2)        "Comprehensive vocational career and technical education" means instructional programs, services, or activities directly related to preparation for and placement in employment, for advanced technical preparation, or for the making of informed and meaningful educational and occupational choices.

(3)        "Occupational skill development" means a program, service, or activity designed to prepare individuals for paid or unpaid employment as semiskilled or skilled workers, technicians, or professional‑support personnel in recognized occupations and in new and emerging occupations including occupations or a trade, technical, business, health, office, homemaking, homemaking‑related, agricultural, marketing, and other nature. Instruction is designed to fit individuals for initial employment in a specific occupation or a cluster of closely related occupations in an occupational field. This instruction includes education in technology, manipulative skills, theory, auxiliary information, application of academic skills, and other associated knowledges.abilities.

(4)        "Preparation for advanced education" means a program, service, or activity designed to prepare individuals for participation in advanced or highly skilled post‑secondary and technical education programs leading to employment in specific occupations or a cluster of closely related occupations and for participation in vocational career and technical education teacher education programs.

"§ 115C‑153.  Administration of vocational career and technical education.

The State Board of Education shall be the sole State agency for the State administration of vocational career and technical education at all levels, shall be designated as the State Board of Vocational Career and Technical Education, and shall have all necessary authority to cooperate with any and all federal agencies in the administration of national acts assisting vocational career and technical education, to administer any legislation pursuant thereto enacted by the General Assembly of North Carolina, and to cooperate with local boards of education in providing vocational career and technical education programs, services, and activities for youth and adults residing in the areas under their jurisdiction.

"§ 115C‑154.  Duties of the State Board of Education.

In carrying out its duties, the State Board of Education shall develop and implement any policies, rules, regulations, and procedures as necessary to ensure vocational career and technical education programs of high quality. The State Board of Education shall prepare a Master Plan for Vocational Career and Technical Education. The plan, to be updated periodically, shall ensure minimally that:that, at a minimum, the following activities are accomplished:

(1)        Articulation shall occur with institutions, agencies, councils, and other organizations having responsibilities for work force preparedness.

(2)        Business, industrial, agricultural, and lay representatives, including parents of students enrolled in Vocational and Technical Education courses, representatives organized as business advisory committees councils under Part 4 of this Article have been utilized in the development of decisions affecting vocational career and technical education programs and services.

(3)        Public hearings are conducted annually to afford the public an opportunity to express their views concerning the State Board's plan and to suggest changes in the plan.

(4)        The plan describes the State's policy for vocational career and technical education and the system utilized for the delivery of vocational career and technical education programs, services, and activities. The policy shall include priorities of curriculum, integration of vocational career and academic education, technical preparation, and youth apprenticeships.

(5)        A professionally and occupationally qualified staff is employed and organized in a manner to assure efficient and effective State leadership for vocational career and technical education. Provisions shall be made for such functions as: planning, administration, supervision, personnel development, curriculum development, vocational career and technical education student organization and coordination research and evaluation, and such others as the State Board may direct.

(6)        An appropriate supply of qualified personnel is trained for program expansion and replacements through cooperative arrangements with institutions of higher education and other institutions or agencies, including where necessary financial support of programs and curriculums designed for the preparation of vocational career and technical education administrators, supervisors, coordinators, instructors, and support personnel.

(7)        Minimum standards shall be prescribed for personnel employed at the State and local levels.

(8)        Local boards of education submit to the State Board of Education a local plan for vocational career and technical education that has been prepared in accordance with the procedures set forth in the Master Plan for Vocational Career and Technical Education.

(9)        Appropriate minimum standards for vocational career and technical education programs, services, and activities shall be established, promulgated, supervised, monitored, and maintained. These standards shall specify characteristics such as program objectives, competencies, course sequence, program duration, class size, supervised on‑the‑job experiences, vocational career and technical education student organization, school‑to‑work transition programs, qualifications of instructors, and all other standards necessary to ensure that all programs conducted by local school administrative units shall be of high quality, relevant to student needs, and coordinated with employment opportunities.

(10)      A system of continuing qualitative and quantitative evaluation of all vocational career and technical education programs, services, and activities supported under the provisions of this Part shall be established, maintained, and utilized periodically. One component of the system shall be follow‑up studies of employees and former students of vocational career and technical education programs who have been out of school for one year, and for five years to ascertain the effectiveness of instruction, services, and activities.

"§ 115C‑154.1.  Approval of local vocational career and technical education plans or applications.

The State Board of Education shall not approve any local vocational board of education career and technical education plans or applications unless:unless the plan or application meets all of the following conditions:

(1)        The programs are in accordance with the purposes of G.S. 115C‑151;G.S. 115C‑151.

(2)        The vocational career and technical education programs and courses are not duplicated within a local school administrative unit, unless the unit has data to justify the duplication or the unit has a plan to redirect the duplicative programs within three years;years.

(3)        For all current job skill programs, there is a documented need, based on labor market data or follow‑up data, or there is a plan to redirect the program within two years;years.

(4)        New vocational career and technical education programs show documented need based on student demand, or for new job skill programs, based on student and labor market demand; anddemand.

(5)        All programs are responsive to technological advances, changing characteristics of the work force, and the academic, technical, and attitudinal development of students.

(6)        The local board of education establishes a business advisory council in accordance with Part 4 of this Article. The local board of education shall submit information regarding ongoing consultation with the advisory council as part of the career and technical education local planning system maintained by the State Board of Education and the Department of Public Instruction.

Local programs using the cooperative vocational career and technical education method shall be approved subject to students enrolled being placed in employment commensurate with the respective program criteria.

"§ 115C‑154.2.  Vocational Career and technical education equipment standards.

The State Board of Education shall develop equipment standards for each vocational career and technical education program level and shall assist local school administrative units in determining the adequacy of equipment for each vocational career and technical education program available in each local school administrative unit.

The State Board shall also develop a plan to assure that minimum equipment standards for each program are met to the extent that State, local, and federal funds are available for that purpose. The State Board shall consider all reasonable and prudent means to meet these minimum equipment standards and to ensure a balanced vocational career and technical education program for students in the public schools.

"§ 115C‑155.  Acceptance of benefits of federal vocational career and technical education acts.

The State of North Carolina, through the State Board of Education, may accept all the provisions and benefits of acts passed by the Congress of the United States providing federal funds for vocational career and technical education programs: Provided, however, that the State Board of Education shall not accept those funds upon any condition that the public schools of this State shall be operated contrary to any provision of the Constitution or statutes of this State.

"§ 115C‑156.  State funds for vocational career and technical education.

It is the intent of the General Assembly of North Carolina to appropriate funds for each fiscal year to support the purposes of vocational career and technical education as set forth in G.S. 115C‑151. From funds appropriated, the State Board of Education shall establish a sum of money for State administration of vocational career and technical education and shall allocate the remaining sum on an equitable basis to local school administrative units, except that a contingency fund is established to correct excess deviations that may occur during the regular school year. In the administration of State funds, the State Board of Education shall adopt such policies and procedures as necessary to ensure that the funds appropriated are used for the purpose stated in this Part and consistent with the policy set forth in the Master Plan for Vocational Career and Technical Education.

"§ 115C‑156.2.  Industry certifications and credentials program.

(a)        It is the intent of the State to encourage students to enroll in and successfully complete rigorous coursework and credentialing processes in career and technical education to enable success in the workplace. To attain this goal, to the extent funds are made available for this purpose, students shall be supported to earn State Board of Education approved industry certifications and credentials:credentials as follows:

(1)        Students enrolled in public schools and in career and technical education courses shall be exempt from paying any fees for one administration of examinations leading to industry certifications and credentials pursuant to rules adopted by the State Board of Education.

(2)        Each school year, at such time as agreed to by the Department of Commerce and the State Board of Education, the Department of Commerce shall provide the State Board of Education with a list of those occupations in high need of additional skilled employees. If the occupations identified in such list are not substantially the same as those occupations identified in the list from the prior year, reasonable notice of such changes shall be provided to local school administrative units.

(3)        Local school administrative units shall consult with their local industries, employers, business advisory councils, and workforce development boards to identify industry certification and credentials that the local school administrative unit may offer to best meet State and local workforce needs.

(b)        Beginning in 2014,2017, the State Board of Education shall report to the Joint Legislative Education Oversight Committee by September November 15 of each year on the number of students in career and technical education courses who earned (i) community college credit and (ii) related industry certifications and credentials.

"§ 115C‑157.  Responsibility of local boards of education.

(a)        Each local school administrative unit, shall provide free appropriate vocational career and technical education instruction, activities, and services in accordance with the provisions of this Part for all youth, with priority given to youth in grades eight through 12, who elect the instruction and shall have responsibility for administering the instruction, activities, and services in accordance with federal and State law and State Board of Education policies.

(b)        Each local school administrative unit shall offer as part of its career and technical education program at least two work‑based learning opportunities that are related to career and technical education instruction. A work‑based learning opportunity shall consist of on‑the‑job training through an internship, cooperative education, or an apprenticeship program meeting the requirements of Chapter 115D of the General Statutes.

(c)        Each local board of education is encouraged to implement a career awareness program for students in grade five to educate students on the career and technical education programs offered in the local school administrative unit. A local board of education that adopts a career awareness program for fifth grade students shall report on program activities and student outcomes from the prior school year to the State Board of Education by October 1 of each year. By November 15 of each year, the State Board shall submit a consolidated report to the Joint Legislative Education Oversight Committee on program outcomes and any legislative recommendations based on local board of education reports.

"§ 115C‑157.5.  Extended year agriculture education program; evaluation of career and technical education agriculture teacher personnel.

Except as otherwise provided in G.S. 115C‑302.1(b2), local boards of education shall provide career and technical education agriculture teacher personnel with adequate resources to provide a career and technical education agriculture education program for 12 calendar months, which includes work‑based learning services and instructional and leadership development. A local board of education shall require that career and technical education agriculture teacher personnel who are employed for 12 calendar months, pursuant to G.S. 115C‑302.1, are evaluated  in the same manner as teachers evaluated in accordance with G.S. 115C‑333 or G.S. 115C‑333.1, as applicable.

"§ 115C‑158.  Federal funds division.

The division between secondary and post‑secondary educational systems and institutions of federal funds for which the State Board of Vocational Career and Technical Education has responsibility shall, within discretionary limits established by law, require the concurrence of the State Board of Education and the State Board of Community Colleges on and after January 1, 1981. The portion of the approved State Plan for post‑secondary vocational career and technical education required by G.S. 115C‑154 shall be as approved by the State Board of Community Colleges.

"Part 2. Vocational Career and Technical Education Production Work Activities.

"§ 115C‑159.  Statement of purpose.

It is the intent of the General Assembly that practical work experiences within the school and outside the school, which are valuable to students and which are under the supervision of a teacher, should be encouraged as a part of vocational career and technical education instruction in the public secondary schools and middle schools when those experiences are organized and maintained to the best advantage of the vocational career and technical education programs. Those activities are a part of the instructional activities in the vocational career and technical education programs and are not to be construed as engaging in business. Those services, products, and properties generated through these instructional activities are exempt from the requirements of G.S. 115C‑518; the local board G.S. 115C‑518. Local boards of education shall adopt rules for the disposition of these services, products, and properties. Local boards of education may use available financial resources to support that instruction.

"§ 115C‑160.  Definitions.

The State Board of Education shall provide appropriate definitions necessary to this part of vocational career and technical education instruction not otherwise included in this Part. As used in this Part, the following definitions apply, unless the context requires otherwise:

(1)        The term "building trades training" means the development of vocational career skills through the construction of dwellings or other buildings and related activities by students in vocational career and technical education programs.

(2)        The term "production work" means production activities and services performed by vocational students in career and technical education classes under contract with a second party for remuneration.

"§ 115C‑161.  Duties of the State Board of Education.

The State Board of Education is authorized and directed to establish, maintain, and implement such policies, rules, regulations, and procedures not in conflict with State law or other State Board policies as necessary to assist local boards of education in the conduct of production work experiences performed in connection with approved State Board of Education vocational career and technical education programs.

"§ 115C‑162.  Use of proceeds derived from production work.

Unless elsewhere authorized in these statutes, local boards of education shall deposit to the appropriate school account, no later than the end of the next business day after receipt of funds, all proceeds derived from the sale of products or services from production work experiences. These proceeds shall be established as a revolving fund to be used solely in operating and improving vocational career and technical education programs.

"§ 115C‑163.  Acquisition of land for agricultural education instructional programs.

Local boards of education may acquire by gift, purchase, or lease for not less than the useful life of any project to be conducted upon the premises, a parcel of land suitable for a land laboratory to provide students with practical instruction in soil science, plant science, horticulture, forestry, animal husbandry, and other subjects related to the agriculture curriculum.

Each deed, lease, or other agreement for land shall be made to the respective local board of education in which the school offering instruction in agriculture is located; and title to such land shall be examined and approved by the school local board of education's attorney.

Any land laboratory thus acquired shall be assigned to the agricultural education program of the school, to be managed with the advice of an agricultural education advisory committee.committee or a specialized subcommittee of a business advisory council as provided under Part 4 of this Article.

The products of the land laboratory not needed for public school purposes may be sold to the public: Provided, however, that all proceeds from the sale of products shall be deposited in the appropriate school account no later than the end of the next business day after receipt of funds. The proceeds shall be established as a revolving fund to be used solely in operating and improving vocationalcareer and technical education programs.

"§ 115C‑164.  Building trades training.

In the establishment and implementation of production work experience policies, the State Board of Education shall be guided as follows:

(1)        Local boards of education may use supplementary tax funds or other local funds available for the support of vocational career and technical education to purchase and develop suitable building sites on which dwellings or other buildings are to be constructed by vocational career and technical education trade classes of each public school operated by local boards of education. Local boards of education may use these funds for each school to pay the fees necessary in securing and recording deeds to these properties for each public school operated by local boards of education and to purchase all materials needed to complete the construction of buildings by vocational career and technical education trade classes and for development of site and property by other vocational career and technical education classes. Local boards of education may use these funds to acquire skilled services, including electrical, plumbing, heating, sewer, water, transportation, grading, and landscaping needed in the construction and completion of buildings, that cannot be supplied by the students in vocational career and technical education trade classes.

(2)        Local boards of education may, in conjunction with or in lieu of subdivision (1) of this section, contract with recognized building trades educational foundations or associations in the purchase of land for the construction and development of buildings: Provided however, that all contracts shall be in accordance with the requirements set forth by the State Board of Education.

"§ 115C‑165.  Advisory committee on production work activities.

The local board of education of each local school administrative unit in which the proposed production work activities are to be undertaken shall appoint appropriate workforce production advisory committees of no less than three persons residing within that administrative unit for each program (or in the case of Trade and Industrial Education, for each specialty) for the purpose of reviewing and making recommendations on such production work activities. Workforce production advisory committees, including agricultural education advisory committees under G.S. 115C‑163, may be established as specialized subcommittees of the business advisory councils as provided under Part 4 of this Article. Respective advisory committee members shall be lay persons who are actively involved in the appropriate business or trade. No production work activity shall be undertaken without the involvement of the appropriate advisory committee.

"Part 3. Eye Safety Devices Required.

"§ 115C‑166.  Eye protection devices required in certain courses.

The governing board or authority of any public or private school or educational institution within the State, wherein shops or laboratories are conducted providing instructional or experimental programs involving:programs, shall provide for and require that every student and teacher wear industrial‑quality eye protective devices at all times while participating in a program that involves any of the following:

(1)        Hot solids, liquids or molten metals;metals.

(2)        Milling, sawing, turning, shaping, cutting, or stamping of any solid materials;materials.

(3)        Heat treatment, tempering, or kiln firing of any metal or other materials;materials.

(4)        Gas or electric arc welding;welding.

(5)        Repair or servicing of any vehicle; orvehicle.

(6)        Caustic or explosive chemicals or materials,materials.

shall provide for and require that every student and teacher wear industrial‑quality eye protective devices at all times while participating in any such program. These industrial‑quality eye protective devices shall be furnished free of charge to the student and teacher.

"§ 115C‑167.  Visitors to wear eye safety devices.

Visitors to such shops and laboratories subject to the requirements of G.S. 115C‑166 shall be furnished with and required to wear such industrial‑quality eye safety protective devices while such instructional or experimental programs are in progress.

"Part 4. Business Advisory Councils.

"§ 115C‑170.  Business advisory councils established; members; selection; duties.

(a)        Purpose. – Each local board of education shall be assisted by a business advisory council in the performance of its duties to provide career and technical education instruction, activities, and services in accordance with this Article. The business advisory council shall serve local boards of education by identifying economic and workforce development trends related to the training and educational needs of the local community and advocating for strong, local career and technical education programs, including career pathway development that provides work‑based learning opportunities for students and prepares students for post‑secondary educational certifications and credentialing for high‑demand careers. A business advisory council established under this Part may serve more than one local board of education in a region of the State upon the agreement of the members of the council and all of the local boards of education to be served by that council.

(b)        Workforce Production Subcommittees. – A business advisory council may form a subcommittee of the council for the purposes of advising a local board of education on workforce production activities under Part 2 of this Article.

(c)        Membership. – Each business advisory council shall have at least nine members. The council shall be composed of members who reasonably reflect the education, business, and community makeup of the local school administrative unit that it serves. A majority of the membership of the council shall be composed of business, industry, and community members appointed in accordance with subdivision (2) of this subsection, and the remaining members shall consist of education representatives as follows:

(1)        Education representatives. – The following members shall serve ex officio on the council to represent each local school administrative unit that the council serves:

a.         The superintendent of the local school administrative unit or his or her designee.

b.         The career and technical education program director of the local school administrative unit as a nonvoting member.

c.         The president of the community college that serves the area in which the local school administrative unit is located, in whole or in part, or his or her designee.

d.         A principal of a school located within the local school administrative unit, as assigned by the superintendent.

(2)        Business, industry, and community representatives. – At least five other members shall serve on the council to represent business and industry located within each local school administrative unit that the council serves and the community. Members shall be business, industry, and workforce and economic development stakeholders in the community, and community members, including any of the following:

a.         Local business and industry owners.

b.         Representatives from local manufacturing centers and factories.

c.         Human resource directors employed at businesses and industries in the community.

d.         Representatives from community‑based organizations.

e.         Representatives from economic and workforce development organizations.

f.          Parents of students enrolled in career and technical education courses.

g.         Representative or manager of the local apprenticeship coalition.

(d)       Initial Terms and Appointments. – Each local board of education shall make the initial appointment of members of the business advisory council under subdivision (2) of subsection (c) of this section for terms beginning January 1, 2018. The local board of education shall divide the initial appointments into three groups if there are only three appointments, and into four groups as equal in size as practicable if there are more than three appointments, and shall designate appointments in group one to serve four‑year terms, in group two to serve three‑year terms, in group three to serve two‑year terms, and in group four to serve one‑year terms.

(e)        Subsequent Terms and Appointments. – As terms expire for members appointed as provided in subsection (d) of this section, the business advisory council shall appoint subsequent members of the business advisory council under subdivision (2) of subsection (c) of this section for four‑year terms. The local board of education shall establish a policy on the appointment of subsequent members to the council, including procedures for increasing the number of members serving on the council. Any vacancies in seats appointed to the council shall be filled by the remaining members of the council.

(f)        Council Secretary. – The career and technical education program director shall serve as secretary to the council. If the council serves more than one local board of education, the program director of each local school administrative unit shall serve as secretary for a period of time as determined by the members of the council.

(g)        Bylaws. – Each business advisory council shall adopt bylaws establishing procedures for conducting the business of the council, which shall include at least the following:

(1)        A chair of the business advisory council shall be elected annually by the members of the council from among the business and industry representative members of the council.

(2)        A majority of the members shall constitute a quorum.

(3)        The business advisory council shall meet at least biannually.

(4)        The chair or three of the members may call a special meeting of the council.

(5)        Procedures for appointing members to the council that are consistent with the policy adopted by the local board of education under subsection (e) of this section.

(h)        Public Records. – A business advisory council is subject to the Public Records Act, Chapter 132 of the General Statutes, and the Open Meetings Law, Article 33C of Chapter 143 of the General Statutes.

(i)         Expenses. – The local board of education shall provide for meeting space and assignment of necessary administrative staff to the business advisory council."

SECTION 7.23H.(f)  G.S. 115C‑174.25 reads as rewritten:

"§ 115C‑174.25.  WorkKeys.

To the extent funds are made available for this purpose, the State Board shall plan for and require local school administrative units to make available the appropriate WorkKeys tests for all students who complete the second level of vocational/career a concentration in career and technical education courses."

SECTION 7.23H.(g)  G.S. 115C‑302.1 reads as rewritten:

"§ 115C‑302.1.  Salary.

(b)        Salary Payments. – State‑allotted teachers shall be paid for a term of 10 months. Except for career and technical education agriculture teacher personnel positions as provided for in this subsection, State‑allotted months of employment for vocationalcareer and technical education to local boards shall be used for the employment of teachers of vocationalcareer and technical education for a term of employment to be determined by the local boards of education. However, local boards shall not reduce the term of employment for any vocational agriculture teacher personnel position that was 12 calendar months for the 1982‑83 school year for any school year thereafter. In addition, local boards shall not reduce the term of employment for any vocational agriculture teacher personnel position that was 12 calendar months for the 2003‑2004 school year for any school year thereafter.Beginning with the 2018‑2019 school year, career and technical education agriculture teacher personnel positions serving students in grades nine through 12 shall be for a term of employment for 12 calendar months. A local board of education may fund these positions using any combination of State funds, local funds, or any other funds available to the local board.

Each local board of education shall establish a set date on which monthly salary payments to State‑allotted teachers shall be made. This set pay date may differ from the end of the month of service. The daily rate of pay for teachers shall equal midway between one twenty‑first and one twenty‑second of the monthly rate of pay. Except for teachers employed in a year‑round school or paid in accordance with a year‑round calendar, or both, the initial pay date for teachers shall be no later than August 31 and shall include a full monthly payment. Subsequent pay dates shall be spaced no more than one month apart and shall include a full monthly payment.

Teachers may be prepaid on the monthly pay date for days not yet worked. A teacher who fails to attend scheduled workdays or who has not worked the number of days for which the teacher has been paid and who resigns, is dismissed, or whose contract is not renewed shall repay to the local board any salary payments received for days not yet worked. A teacher who has been prepaid and continues to be employed by a local board but fails to attend scheduled workdays may be subject to dismissal under G.S. 115C‑325 or other appropriate discipline.

Any individual teacher who is not employed in a year‑round school may be paid in 12 monthly installments if the teacher so requests on or before the first day of the school year. The request shall be filed in the local school administrative unit which employs the teacher. The payment of the annual salary in 12 installments instead of 10 shall not increase or decrease the teacher's annual salary nor in any other way alter the contract made between the teacher and the local school administrative unit. Teachers employed for a period of less than 10 months shall not receive their salaries in 12 installments.

Notwithstanding this subsection, the term "daily rate of pay" for the purpose of G.S. 115C‑12(8) or for any other law or policy governing pay or benefits based on the teacher salary schedule shall not exceed one twenty‑second of a teacher's monthly rate of pay.

(b2)      Waiver of 12 Months of Employment for Career and Technical Education Agriculture Teacher Personnel. – Notwithstanding subsection (b) of this section, a local board of education may apply on an annual basis to the Department of Public Instruction and the North Carolina State University, Agricultural and Extension Education, for a waiver of the months of employment requirement for any upcoming school year when it is impracticable for the local board to provide adequate funds to support 12 months of employment for career and technical agriculture teachers.

(c)        Vacation. – Included within the 10‑month term shall be annual vacation leave at the same rate provided for State employees, computed at one‑twelfth of the annual rate for State employees for each month of employment. Local boards shall provide at least 10 days of annual vacation leave at a time when students are not scheduled to be in regular attendance. However, instructional personnel who do not require a substitute may use annual vacation leave on days that students are in attendance. Vocational Career and technical education teachers who are employed for 11 or 12 months may, with prior approval of the principal, work on annual vacation leave days designated in the school calendar and may use those annual vacation leave days during the eleventh or twelfth month of employment. Local boards of education may adopt policies permitting instructional personnel employed for 11 or 12 months in year‑round schools to, with the approval of the principal, take vacation leave at a time when students are in attendance; local funds shall be used to cover the cost of substitute teachers.

On a day that pupils are not required to attend school due to inclement weather, but employees are required to report for a workday, a teacher may elect not to report due to hazardous travel conditions and to take an annual vacation day or to make up the day at a time agreed upon by the teacher and the teacher's immediate supervisor or principal. On a day that school is closed to employees and pupils due to inclement weather, a teacher shall work on the scheduled makeup day.

All vacation leave taken by the teacher will be upon the authorization of the teacher's immediate supervisor and under policies established by the local board of education. Annual vacation leave shall not be used to extend the term of employment.

Notwithstanding any provisions of this subsection to the contrary, no person shall be entitled to pay for any vacation day not earned by that person.

…."

SECTION 7.23H.(h)  G.S. 115C‑426(f)(2) reads as rewritten:

"(2)      The acquisition, construction, reconstruction, enlargement, renovation, or replacement of buildings and other structures, including but not limited to buildings for classrooms and laboratories, physical and vocational career and technical educational purposes, libraries, auditoriums, gymnasiums, administrative offices, storage, and vehicle maintenance."

SECTION 7.23H.(i)  Local school administrative units are encouraged to complete the application process for the NCWorks Work Ready Certified Communities initiative in cooperation with local workforce development boards, local economic development boards, chambers of commerce, business and industry employers, and local community college leaders. The NCWorks Certified Work Ready Communities initiative encourages local participation to assist with the following:

(1)        Informing business and industry employers on the foundational skills necessary for a productive workforce and providing a method for employers to communicate their needs.

(2)        Providing individuals with an understanding on the skills required by employers and how to prepare for success.

(3)        Providing reliable data for the evaluation of the skills gap in a timely manner at the national, State, and local levels.

(4)        Informing educators on how to close the skills gap using tools integrated into career pathways with stackable industry‑recognized credentials.

(5)        Providing economic developers an on‑demand reporting tool to market the quality of their workforce.

SECTION 7.23H.(j)  Of the funds appropriated by this act to the Department of Public Instruction for the 2017‑2019 fiscal biennium, the Department shall establish two new full‑time equivalent positions within the Division of Career and Technical Education dedicated to assisting local school administrative units in developing business advisory councils in accordance with Part 4 of Article 10 of Chapter 115C of the General Statutes, as enacted by subsection (e) of this section, local career pathways, work‑based learning opportunities, and elementary school career awareness curriculum.

SECTION 7.23H.(k)  Subsections (a) through (h) of this section apply beginning with the 2017‑2018 school year.

 

ESTABLISH B‑3 INTERAGENCY COUNCIL

SECTION 7.23I.(a)  Chapter 115C of the General Statutes is amended by adding a new Article to read:

"Article 6D.

"B‑3 Interagency Council.

"§ 115C‑64.25.  Establishment and membership of B‑3 Interagency Council.

(a)        There is established the B‑3 Interagency Council. The Council is a joint council between the Department of Health and Human Services and the Department of Public Instruction and shall consist of 12 voting members and four nonvoting advisory members as follows:

(1)        The Superintendent of Public Instruction or the Superintendent's designee shall serve ex officio, with the same rights and privileges, including voting rights, as other members.

(2)        The Associate Superintendent of Early Education at the Department of Public Instruction shall serve ex officio, with the same rights and privileges, including voting rights, as other members.

(3)        The Secretary of Health and Human Services or the Secretary's designee shall serve ex officio, with the same rights and privileges, including voting rights, as other members.

(4)        The Deputy Secretary of Human Services at the Department of Health and Human Services shall serve ex officio, with the same rights and privileges, including voting rights, as other members.

(5)        Four public members appointed by the Speaker of House of Representatives who represent organizations that focus on early childhood education and development, one of whom shall be a representative of Smart Start.

(6)        Four public members appointed by the President Pro Tempore of the Senate who represent organizations that focus on early childhood education and development, one of whom shall be a representative of the North Carolina Partnership for Children.

(7)        Two members of the House of Representatives appointed by the Speaker of the House of Representatives to serve as nonvoting advisory members.

(8)        Two members of the Senate appointed by the President Pro Tempore of the Senate to serve as nonvoting advisory members.

The Deputy Secretary of Human Services and the Associate Superintendent of Early Education shall serve as cochairs of the Council. Members of the Council shall receive per diem, subsistence, and travel allowance, as provided in G.S. 120‑3.1, 138‑5, or 138‑6, as appropriate.

(b)        Terms for all public members and advisory members except for the initial appointments shall be for four years. Two of the public members appointed by the Speaker of the House of Representatives pursuant to subdivision (5) of subsection (a) of this section and one of the advisory members appointed by the Speaker of the House of Representatives pursuant to subdivision (7) of subsection (a) of this section shall be appointed for an initial term of two years. Two of the public members appointed by the President Pro Tempore of the Senate pursuant to subdivision (6) of subsection (a) of this section and one of the advisory members appointed by the President Pro Tempore of the Senate pursuant to subdivision (8) of subsection (a) of this section shall be appointed for an initial term of two years. Terms for members shall begin on November 1. Members shall serve until their successors are appointed. Any vacancy in the membership of the Council shall be filled in the same manner as the original appointment.

(c)        The Council shall have as its charge establishing a vision and accountability for a birth through grade three system of early education that addresses all of the following:

(1)        Standards and assessment.

(2)        Data‑driven improvement and outcomes, including shared accountability measures such as the NC Pathways to Grade‑Level Reading.

(3)        Teacher and administrator preparation and effectiveness.

(4)        Instruction and environment.

(5)        Transitions and continuity.

(6)        Family engagement.

(7)        Governance and funding.

"§ 115C‑64.26.  Powers and duties of B‑3 Interagency Council.

The B‑3 Interagency Council shall have the following powers and duties:

(1)        Facilitating the development and implementation of an interagency plan for a coordinated system of early care, education, and child development services with a focus on program outcomes in satisfying the developmental and educational needs of all children from birth to eight years of age that includes at least the following:

a.         Any recommendations to the Secretary of Health and Human Services and the Superintendent of Public Instruction on necessary organizational changes needed within the Departments of Health and Human Services and Public Instruction to be more responsive to and supportive of the birth to grade three continuum of early learning and development in an effort to optimize learning gains realized in the prekindergarten years.

b.         An early childhood information system that facilitates and encourages the sharing of data between and among early childhood service providers and State agencies.

c.         An early childhood accountability plan that includes identification of appropriate population indicators and program and system performance measures of early success of children such as the NC Pathways to Grade‑Level Reading.

(2)        Implementing a statewide longitudinal evaluation of the educational progress of children from prekindergarten programs through grade 12.

(3)        Collaborating with the Department of Public Instruction, the Department of Health and Human Services, the North Carolina Partnership for Children, and other relevant early childhood stakeholders, including members of the North Carolina Early Childhood Advisory Council, to achieve the goal of a coordinated system of early care, education, and child development services for children from birth to eight years of age.

"§ 115C‑64.27.  Reporting requirement.

The Deputy Secretary of Human Services and the Associate Superintendent of Early Education shall report on a quarterly basis to the Secretary of Health and Human Services and the Superintendent of Public Instruction on the progress and implementation of any of the duties and responsibilities of the Council as set forth in this Article.

"§ 115C‑64.28.  Establish position of Associate Superintendent of Early Education to serve as chief academic officer of early education.

(a)        There is established within the Department of Public Instruction the position of Associate Superintendent of Early Education who shall serve as the chief academic officer of early education. The Associate Superintendent shall have professional, administrative, technical, and clerical personnel as may be necessary to assist in carrying out his or her duties. The Associate Superintendent shall co‑lead the work of the B‑3 Interagency Council and oversee the Department of Public Instruction's prekindergarten through third grade initiatives.

(b)        The Associate Superintendent shall be appointed by the Superintendent of Public Instruction at a salary established by the Superintendent of Public Instruction within the funds appropriated for that purpose. The Associate Superintendent may be removed from the position by the Superintendent of Public Instruction in the event of the Associate Superintendent's incapacity to serve. The Associate Superintendent shall be exempt from the provisions of Chapter 126 of the General Statutes, except for Articles 6 and 7 of Chapter 126 of the General Statutes.

All other staff shall be appointed, supervised, and directed by the Associate Superintendent and shall be subject to the provisions of Chapter 126 of the General Statutes. Except for the Associate Superintendent, salaries and compensation of all staff personnel shall be fixed in the manner provided by law for fixing and regulating salaries and compensation by other State agencies."

SECTION 7.23I.(b)  G.S. 126‑5(c1) is amended by adding a new subdivision to read:

"(35)    The Associate Superintendent of Early Education who serves as chief academic officer of early education."

SECTION 7.23I.(c)  The B‑3 Interagency Council, established under G.S. 115C‑64.25, as enacted by this section, shall undertake a rigorous review of the recommendations developed by the Departments of Health and Human Services and Public Instruction, pursuant to Section 12B.5 of S.L. 2016‑94, on (i) the development and implementation of a statewide vision for early childhood education and (ii) the development and implementation of a program for transitioning children from preschool to kindergarten. In its review, the B‑3 Interagency Council shall report to the General Assembly and the Governor suggested modifications, if any, to those recommendations. The B‑3 Interagency Council shall also, if deemed necessary, make suggestions on alternative organizational structures to achieve greater efficiency and effective delivery of early childhood services, including a consolidation and restructuring of State agency divisions and offices located within the Department of Public Instruction and the Department of Health and Human Services into a centralized agency or office. The Council shall consider at least the following in conducting the review and study:

(1)        The delivery of educational services to young children and their families to ensure optimal learning for each young child.

(2)        The collaboration and sharing of data elements necessary to perform quality assessments and longitudinal analysis across early childhood education and development services.

(3)        The coordination of a comprehensive statewide system of professional development for providers and staff of early care and education and child development programs and services.

(4)        Areas of duplication in regulating and monitoring of early care and education and child development programs and services.

(5)        The coordination and support of public and private partnerships to aid early childhood initiatives.

SECTION 7.23I.(d)  By April 15, 2018, the B‑3 Interagency Council shall submit a report to the Joint Legislative Education Oversight Committee, the Joint Legislative Oversight Committee on Health and Human Services, and the Joint Legislative Commission on Governmental Operations on the initial results of the review and study required under subsection (c) of this section. By February 15, 2019, the B‑3 Interagency Council shall submit a report to the Joint Legislative Education Oversight Committee, the Joint Legislative Oversight Committee on Health and Human Services, and the Joint Legislative Commission on Governmental Operations on (i) the final results of the review and study, including its recommendations and any proposed legislation, and (ii) progress on the development and implementation of a plan for a coordinated system of early care, education, and child development services and any other activities prescribed under G.S. 115C‑64.26, as enacted by this section.

SECTION 7.23I.(e)  Notwithstanding G.S. 115C‑64.28, as enacted by this section, the Superintendent of Public Instruction shall appoint an Associate Superintendent of Early Education within 60 days of the date this section becomes law.

SECTION 7.23I.(f)  Notwithstanding G.S. 115C‑64.27, as enacted by this section, the B‑3 Interagency Council shall submit its initial quarterly report to the Superintendent of Public Instruction and the Secretary of the Department of Health and Human Services by May 15, 2018.

 

ALLOTMENT TRANSFER REPORT

SECTION 7.23J.(a)  G.S. 115C‑105.25 reads as rewritten:

"§ 115C‑105.25.  Budget flexibility.

(a)        Consistent with improving student performance, a local board shall provide maximum flexibility to schools in the use of funds to enable the schools to accomplish their goals.

(c)        To ensure that parents, educators, and the general public are informed on how State funds have been used to address local educational priorities, each local school administrative unit shall publish the following information from the prior fiscal year on its Web site by October 15 of each year:year, as follows:

(1)        A description of each program report code, written in plain English, and a summary of the prior fiscal year's expenditure of State funds within each program report code.

(2)        A description of each object code within a program report code, written in plain English, and a summary of the prior fiscal year's expenditure of State funds for each object code.

(3)        A description of each allotment transfer that increased or decreased the initial allotment amount by more than five percent (5%) and the (5%), including all of the following information:

a.         The amount of the transfer.

b.         The allotment category into which the funds were transferred.

c.         The purpose code for the funds following the transfer.

d.         A description of any teacher positions fully or partially funded as a result of the transfer, including all subject areas taught by the teacher in the position.

e.         The educational priorities that necessitated the transfer.

(5)        A chart that clearly reflects how the local school administrative unit spent State funds.

(c1)      The local school administrative unit shall maintain information published pursuant to subsection (c) of this section on its Web site for at least three years after it is published.

(d)       No later than December 1 of each year, the Department of Public Instruction shall collect the information reported by local school administrative units pursuant to subsection (c) of this section and report the aggregated information, including available data from the two previous fiscal years, to the Joint Legislative Education Oversight Committee and the Fiscal Research Division."

SECTION 7.23J.(b)  This section applies beginning with the use of funds during the 2014‑2015 fiscal year.

 

DIGITAL LEARNING PLAN/PROGRAMS/FUNDS

SECTION 7.23K.(a)  As part of continuing the implementation of the Digital Learning Plan in North Carolina in accordance with Section 8.23 of S.L. 2016‑94, the State Board of Education, the Department of Public Instruction, the Friday Institute for Educational Innovation at North Carolina State University (Friday Institute), and The University of North Carolina educator preparation programs shall collaborate to develop and implement a comprehensive professional development strategy and solution for teachers and for students in UNC educator preparation programs for the use of technology and digital resources as teaching tools for K‑12 students. Specifications for any products and services that are required to implement the professional development strategy and solution, including selection of a professional development provider, if necessary, shall be procured through a competitive process. The professional development strategy and solution shall include the following:

(1)        Competency‑based measurement of the technological and pedagogical skills of each teacher or teacher candidate that identifies strengths and gaps according to the NC Digital Learning Competencies for Educators and informs the use of a personalized professional development plan.

(2)        Delivery of professional development that is flexible to ensure the greatest possible coverage and convenience for teachers and teacher candidates.

SECTION 7.23K.(b)  The State Board of Education, the Department of Public Instruction, the Friday Institute, UNC educator preparation programs, and local boards of education of local school administrative units located within counties determined to be the most economically distressed by the Department of Commerce shall collaborate to assess current efforts to provide student digital literacy instruction in kindergarten through eighth grade in those local school administrative units and to develop a plan to strengthen such efforts. Specifications for any products and services that are required to implement digital literacy instruction, including selection of a digital literacy curriculum provider, if necessary, shall be procured through a competitive process. The assessment and plan shall address at least the following:

(1)        Provide opportunity for students to learn essential digital literacy skills, including computer fundamentals, computational thinking, keyboarding, digital citizenship and online safety, Web browsing, e‑mail and online communication, visual mapping, word processing, spreadsheets, databases, and presentations.

(2)        Provide teachers with the ability to assess student digital literacy growth.

(3)        Facilitate Project‑Based Learning (PBL) and other research‑based instructional frameworks to enable educators to integrate instruction on digital literacy into core and supplemental subjects, such as mathematics, English language arts, science, social studies, music, and art.

(4)        Resources that provide teachers with instructional support and supplemental and extension options to address all students, including students with special needs and students who are English language learners.

(5)        Accommodate English language learners with Spanish language instruction.

SECTION 7.23K.(c)  Of the six million four hundred twenty thousand dollars ($6,420,000) in recurring funds appropriated to the Department of Public Instruction to accelerate implementation of the State's Digital Learning Plan, as set out in S.L. 2016‑94, beginning with the 2017‑2018 fiscal year, the Department shall use up to one million eight hundred thousand dollars ($1,800,000) to implement the requirements of this section.

 

AUDIT OF THE DEPARTMENT OF PUBLIC INSTRUCTION

SECTION 7.23L.  The Superintendent of Public Instruction shall select an independent research organization that is a public or private entity or university for the 2017‑2018 fiscal year to conduct an organizational, functional, and business‑process audit of the Department of Public Instruction. The selected organization shall have experience and special expertise in performing the type of audit described above. No later than May 1, 2018, the Department shall submit a report to the General Assembly, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division with the results of the audit including, at a minimum, all of the following information:

(1)        Identification of cost saving measures that could be implemented within the Department.

(2)        A statement regarding the minimum funding necessary to ensure that federal grant funds do not constitute more than fifty percent (50%) of the budget of the Department.

(3)        All maintenance of effort requirements related to federal grants administered by the Department and the financial impact of failing to meet those requirements.

(4)        Any activities for which the Department uses State funds that are not related to federal or State law or policy.

(5)        Identification of programs, services, or divisions within the Department that could be consolidated or reorganized.

(6)        Any positions within the Department that are unnecessary, duplicative, or unrelated to the implementation of federal or State law or policy.

(7)        Any programs that are ineffective, cumbersome, or no longer functioning as intended by federal or State law or policy.

(8)        Any recommendations for legislative action.

 

EXTENDED LEARNING AND INTEGRATED STUDENT SUPPORTS COMPETITIVE GRANT PROGRAM

SECTION 7.24.(a)  Of the funds appropriated by this act for the At‑Risk Student Services Alternative School Allotment for the 2017‑2019 fiscal biennium, the Department of Public Instruction shall use up to six million dollars ($6,000,000) for the 2017‑2018 fiscal year and up to six million dollars ($6,000,000) for the 2018‑2019 fiscal year for the Extended Learning and Integrated Student Supports Competitive Grant Program (Program). Of these funds, the Department of Public Instruction may use up to two hundred thousand dollars ($200,000) for each fiscal year to administer the Program.

SECTION 7.24.(b)  The purpose of the Program is to fund high‑quality, independently validated extended learning and integrated student support service programs for at‑risk students that raise standards for student academic outcomes by focusing on the following:

(1)        Use of an evidence‑based model with a proven track record of success.

(2)        Inclusion of rigorous, quantitative performance measures to confirm effectiveness of the program.

(3)        Deployment of multiple tiered supports in schools to address student barriers to achievement, such as strategies to improve chronic absenteeism, anti‑social behaviors, academic growth, and enhancement of parent and family engagement.

(4)        Alignment with State performance measures, student academic goals, and the North Carolina Standard Course of Study.

(5)        Prioritization in programs to integrate clear academic content, in particular, science, technology, engineering, and mathematics (STEM) learning opportunities or reading development and proficiency instruction.

(6)        Minimization of student class size when providing instruction or instructional supports and interventions.

(7)        Expansion of student access to high‑quality learning activities and academic support that strengthen student engagement and leverage community‑based resources, which may include organizations that provide mentoring services and private‑sector employer involvement.

(8)        Utilization of digital content to expand learning time, when appropriate.

SECTION 7.24.(c)  Grants shall be used to award funds for new or existing eligible programs for at‑risk students operated by (i) nonprofit corporations and (ii) nonprofit corporations working in collaboration with local school administrative units. Grant participants are eligible to receive grants for up to two years in an amount of up to five hundred thousand dollars ($500,000) each year. Programs should focus on serving (i) at‑risk students not performing at grade level as demonstrated by statewide assessments, (ii) students at‑risk of dropout, and (iii) students at‑risk of school displacement due to suspension or expulsion as a result of anti‑social behaviors. Priority consideration shall be given to applications demonstrating models that focus services and programs in schools that are identified as low‑performing pursuant to G.S. 115C‑105.37.

A grant participant shall provide certification to the Department of Public Instruction that the grants received under the program shall be matched on the basis of three dollars ($3.00) in grant funds for every one dollar ($1.00) in nongrant funds. Matching funds shall not include other State funds. The Department shall also give priority consideration to an applicant that is a nonprofit corporation working in partnership with a local school administrative unit resulting in a match utilizing federal funds under Part A of Title I of the Elementary and Secondary Education Act of 1965, as amended, or Title IV of the Higher Education Act of 1965, as amended, and other federal or local funds. Matching funds may include in‑kind contributions for up to fifty percent (50%) of the required match.

SECTION 7.24.(d)  A nonprofit corporation may act as its own fiscal agent for the purposes of this Program. Grant recipients shall report to the Department of Public Instruction for the year in which grant funds were expended on the progress of the program, including alignment with State academic standards, data collection for reporting student progress, the source and amount of matching funds, and other measures, before receiving funding for the next fiscal year. Grant recipients shall also submit a final report on key performance data, including statewide test results, attendance rates, graduation rates, and promotion rates, and financial sustainability of the program.

SECTION 7.24.(e)  The Department of Public Instruction shall provide an interim report on the Program to the Joint Legislative Education Oversight Committee by September 15, 2018, with a final report on the Program by September 15, 2019. The final report shall include the final results of the Program and recommendations regarding effective program models, standards, and performance measures based on student performance, leveraging of community‑based resources to expand student access to learning activities, academic and behavioral support services, and potential opportunities for the State to invest in proven models for future grants programs.

 

LIFE CHANGING EXPERIENCES SCHOOL PILOT PROGRAM

SECTION 7.25.(a)  Of the funds appropriated to the Department of Public Instruction by this act for the Life Changing Experiences School Pilot Program for the 2017‑2019 fiscal biennium, the Department shall use up to three hundred sixty thousand dollars ($360,000) for each year of the 2017‑2019 fiscal biennium to contract with the Children and Parent Resource Group, Inc., to design, implement, and evaluate a two‑year Life Changing Experiences School Pilot Program (Project), beginning with the 2017‑2018 school year and ending with the 2018‑2019 school year. The Project shall be operated and administered for students in grades six through 11 in the following local school administrative units: Mitchell County Schools, Pitt County Schools, Wayne County Schools, and Winston‑Salem/Forsyth County Schools. These contract funds shall not be used for any purpose other than to implement the Project in the local school administrative units, which consists of traveling three‑dimensional, interactive, holistic, and evidence‑based multimedia education in‑school programs. The Project includes theme‑specific programs screened as school assemblies and additional follow‑up applications that address dangerous life and community threatening activities that negatively impact teenagers, including alcohol and other drugs, dangerous driving, violence, and bullying. The goal of these programs is to increase positive intentions and behavioral outcomes by teaching students the techniques and skills that empower them to reach meaningful life goals, employ positive behaviors, and start businesses and social enterprises.

SECTION 7.25.(b)  The Children and Parent Resource Group, Inc., in consultation with the Department of Public Instruction, shall submit an initial report on the Project authorized by subsection (a) of this section by March 1, 2018, and a final report by March 1, 2019, to the Joint Legislative Education Oversight Committee and the Fiscal Research Division. The report shall include an accounting of expenditures and student outcome data related to the operation of the Project.

 

SCHOOL PERFORMANCE GRADES/ESSA COMPLIANCE

SECTION 7.26.(a)  G.S. 115C‑12(9)c1. reads as rewritten:

"c1.      To issue an annual "report card" for the State and for each local school administrative unit, assessing each unit's efforts to improve student performance based on the growth in performance of the students in each school and taking into account progress over the previous years' level of performance and the State's performance in comparison with other states. This assessment shall take into account factors that have been shown to affect student performance and that the State Board considers relevant to assess the State's efforts to improve student performance. As a part of theThe annual "report card" for each local school administrative unit,unit shall include the following:

1.         theThe State Board shall award, in accordance with G.S. 115C‑83.15, an overall numerical school achievement, growth, and performance score on a scale of zero to 100 and a corresponding performance letter grade of A, B, C, D, or F earned by each school within the local school administrative unit. The school performance score and grade shall reflect student performance on annual subject‑specific assessments, college and workplace readiness measures, and graduation rates.rates, and student progress in achieving English language proficiency. In addition, the State Board shall award separate performance scores and grades for the following:

I.          School performance of certain subgroups of students as provided in G.S. 115C‑83.15.

II.        For schools serving students in any grade from kindergarten to eighth grade, separate performance scores and grades shall also be awarded based on theschool performance in reading and mathematics respectively.

2.         The annual "report card" forFor schools serving students in third grade also shall includegrade, the number and percentage of third grade students who (i) take and pass the alternative assessment of reading comprehension; (ii) were retained in third grade for not demonstrating reading proficiency as indicated in G.S. 115C‑83.7(a); and (iii) were exempt from mandatory third grade retention by category of exemption as listed in G.S. 115C‑83.7(b).

3.         The annual "report card" forFor high schools shall also includeschools, measures of Advanced Placement course participation and International Baccalaureate Diploma Programme participation and Advanced Placement and International Baccalaureate examination participation and performance."

SECTION 7.26.(b)  G.S. 115C‑47(58) reads as rewritten:

"(58)    To Inform the Public About the North Carolina School Report Cards Issued by the State Board of Education. – Each local board of education shall ensure that the report card issued for it by the State Board of Education receives wide distribution to the local press or is otherwise provided to the public. Each local board of education shall ensure that the overall school performance score and grade earned by each school in the local school administrative unit for the current and previous four school years is prominently displayed on the Web site of the local school administrative unit. If any school in the local school administrative unit is awarded a earned an overall school performance grade of D or F, the local board of education shall provide notice of the grade in writing to the parent or guardian of all students enrolled in that school."

SECTION 7.26.(c)  G.S. 115C‑83.15 reads as rewritten:

"§ 115C‑83.15.  School achievement, growth, performance scores, and grades.

(a)        School Scores and Grades. – The State Board of Education shall award school achievement, growth, and performance scores and an associated performance grade as required by G.S. 115C‑12(9)c1., and calculated as provided in this section. The State Board of Education shall enter all necessary data into the Education Value‑Added Assessment System (EVAAS) in order to calculate school performance scores and grades.

(b)        Calculation of the School Achievement Score. – In calculating the overall school achievement score earned by schools, the State Board of Education shall total the sum of points earned by a school as follows:

(1)        For schools serving any students in kindergarten through eighth grade, the State Board shall assign points on all of the following indicators that are measuredmeasures available for that school:

(1)a.     One point for each percent of students who score at or above proficient on annual assessments for mathematics in grades three through eight. For the purposes of this Part, an annual assessment for mathematics shall include any mathematics course with an end‑of‑course test.

(2)b.     One point for each percent of students who score at or above proficient on annual assessments for reading in grades three through eight.

(3)c.     One point for each percent of students who score at or above proficient on annual assessments for science in grades five and eight.

d.         One point for each percent of students who progress in achieving English language proficiency on annual assessments in grades three through eight.

(2)        For schools serving any students in ninth through twelfth grade, the State Board shall assign points on the following measures available for that school:

(4)a.     One point for each percent of students who score at or above proficient on either the Algebra I or Integrated Math I end‑of‑course test.test or, for students who completed Algebra I or Integrated Math I before ninth grade, another mathematics course with an end‑of‑course test.

(5)b.     One point for each percent of students who score at or above proficient on the English II end‑of‑course test.

(6)c.     One point for each percent of students who score at or above proficient on the Biology end‑of‑course test.

(7)d.    One point for each percent of students who complete Algebra II or Integrated Math III with a passing grade.

(8)e.     One point for each percent of students who achieve the minimum score required for admission into a constituent institution of The University of North Carolina on a nationally normed test of college readiness.

(9)f.     One point for each percent of students enrolled in Career and Technical Education courses who meet the standard when scoring at Silver, Gold, or Platinum levels on a nationally normed test of workplace readiness.

(10)g.   One point for each percent of students who graduate within four years of entering high school.

h.         One point for each percent of students who progress in achieving English language proficiency.

In calculating the overall school achievement score earned by schools, the State Board of Education shall (i) use a composite approach to weigh the achievement elements based on the number of students measured by any given achievement element and (ii) proportionally adjust the scale to account for the absence of a school achievement element for award of scores to a school that does not have a measure of one of the school achievement elements annually assessed for the grades taught at that school. The overall school achievement score shall be translated to a 100‑point scale and used for school reporting purposes as provided in G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(c)        Calculation of the School Growth Score.Score as a Measure of School Quality and Student Success. – Using EVAAS, the State Board shall calculate the overall growth score earned by schools.schools as a measure of school quality and student success. In calculating the total growth score earned by schools, the State Board of Education shall weight student growth on the achievement indicators as provided in subsection (b) of this section that have available growth values. The numerical values used to determine whether a school has met, exceeded, or has not met expected growth shall be translated to a 100‑point scale and used for school reporting purposes as provided in G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(d)       Calculation of the Overall School Performance Scores and Grades. – The State Board of Education shall use EVAAS to calculate the overall school performance score by adding the school achievement score, as provided in subsection (b) of this section, and the school growth score, as provided in subsection (c) of this section, earned by a school. The school achievement score shall account for eighty percent (80%), and the school growth score shall account for twenty percent (20%) of the total sum. If a school has met expected growth and inclusion of the school's growth score reduces the school's performance score and grade, a school may choose to use the school achievement score solely to calculate the performance score and grade. For all schools, the total school performance score shall be converted to a 100‑point scale and used to determine a an overall school performance gradegrade. The overall school performance grade shall be based on the following scale:scale and shall not be modified to add any other designation related to other performance measures, such as a "plus" or "minus":

(1)        A school performance score of at least 90 is equivalent to an overall school performance grade of A.

(2)        A school performance score of at least 80 is equivalent to an overall school performance grade of B.

(3)        A school performance score of at least 70 is equivalent to an overall school performance grade of C.

(4)        A school performance score of at least 60 is equivalent to an overall school performance grade of D.

(5)        A school performance score of less than 60 points is equivalent to an overall school performance grade of F.

(d1)     Establishment of Subgroups of Students. – The State Board shall establish the minimum number of students in a subgroup served by a school that is necessary to disaggregate information on student performance and to determine a subgroup performance score and grade for the following subgroups of students:

(1)        Economically disadvantaged students.

(2)        Students from major racial and ethnic groups.

(3)        Children with disabilities.

(4)        English learners.

(d2)     Calculation of the School Performance Scores and Grades for Certain Subgroups of Students Served by a School. – In addition to the overall school performance scores and grades awarded under this section, for each school that serves a minimum number of students in a subgroup of students listed in subsection (d1) of this section, the State Board of Education shall use EVAAS to calculate school performance scores and shall determine a corresponding school performance grade for each subgroup using the same method as set forth in subsection (d) of this section. School performance scores for subgroups of students shall not be included in the calculation of the overall school performance scores and grades under subsection (d) of this section.

(d3)     Report of Subgroup Performance Scores and Grades. – The subgroup performance scores and grades shall be reported separately on the annual school report card provided under G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8 in a way that provides the following information:

(1)        For the current year and the previous two years, the achievement score for each subgroup of students defined in subsection (d1) of this section for the school.

(2)        The statewide average achievement score for each subgroup defined in subsection (d1) of this section.

(3)        The difference between the achievement score for all students in the school and the achievement score for each subgroup that meets the minimum number of students defined in subsection (d1) of this section.

(4)        Based on the information reported in subdivision (3) of this subsection, the State Board shall determine and identify schools that are closing achievement gaps, experiencing a widening of gaps, or seeing no significant gap changes.

(e)        Elementary and Middle School Reading and Math Achievement Scores. – For schools serving students in kindergarten through eighth grade, the school achievement scores in reading and mathematics, respectively, shall be reported separately on the annual school report card provided under G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(f)        Indication of Growth. – In addition to awarding the overall school scores for achievement, growth, and performance and the performance grade, using EVAAS, the State Board shall designate that a school has met, exceeded, or has not met expected growth. The designation of student growth shall be clearly displayed in the annual school report card provided under G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8.

(g)        Access to Annual Report Card Information on the Department's Web Site. – Beginning with data collected in the 2017‑2018 school year, the State Board of Education shall provide user‑friendly access to the public on the annual report cards issued for local school administrative units and individual schools provided under G.S. 115C‑12(9)c1., 115C‑218.65, 115C‑238.66, and 116‑239.8 through the Department of Public Instruction's Web site. The annual report card shall be designed and organized to display the following information more prominently than any other information:

(1)        A summary for each local school administrative unit and for each individual school of the school performance grades, whether the school has met, exceeded, or has not met expected growth, and any other information required to be provided as part of the annual report card.

(2)        The percentage of schools receiving an overall school performance letter grade of A, B, C, D, or F earned by each school located within a local school administrative unit and statewide.

(3)        The number of schools that have met, exceeded, or have not met expected growth by each school located within a local school administrative unit and statewide.

(4)        A Web page for each individual school that prominently displays the school's performance grades, whether the school has met, exceeded, or has not met expected growth, and the school's performance and growth scores in a way that is easy for the user to read.

(5)        The ability to easily compare annual report card information, including school performance grades and whether schools have met, exceeded, or have not met expected growth, for local school administrative units and for individual schools for a time span of at least three years."

SECTION 7.26.(d)  Part 1B of Article 8 of Chapter 115C of the General Statutes is amended by adding new sections to read:

"§ 115C‑83.16.  School performance indicators for the purpose of compliance with federal law.

The State Board of Education shall use the school performance scores and grades as calculated under G.S. 115C‑83.15 to satisfy the federal requirement under the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act (ESSA), P.L. 114‑95, to meaningfully differentiate the performance of schools on an annual basis. The State Board shall weigh the measures in accordance with the requirements of G.S. 115C‑83.15. For the purpose of compliance with federal law, the indicators shall be defined as follows:

(1)        For schools serving any students in kindergarten through eighth grade, the State Board shall define the indicators as follows:

a.         Academic indicators. –

1.         The academic achievement indicator shall include the following measures:

I.          Proficiency on annual assessments for mathematics in grades three through eight.

II.        Proficiency on annual assessments for reading in grades three through eight.

2.         The other academic indicator shall include the following measures:

I.          Proficiency on annual assessments for science in grade five.

II.        Proficiency on annual assessments for science in grade eight.

3.         The English language proficiency indicator shall be the percentage of students who progress in achieving English language proficiency on annual assessments in grades three through eight.

b.         School quality and student success indicator. – The measure of school quality and student success shall be the growth score earned by schools.

(2)        For schools serving any students in ninth through twelfth grade, the State Board shall define the indicators as follows:

a.         Academic indicators. –

1.         The academic achievement indicator shall include the following measures:

I.          Proficiency on either the Algebra I or Integrated Math I end‑of‑course test or, for students who completed Algebra I or Integrated Math I before ninth grade, another mathematics course with an end‑of‑course test.

II.        Proficiency on the English II end‑of‑course test.

2.         The other academic indicator shall include the following measures:

I.          Proficiency on the Biology end‑of‑course test.

II.        The percentage of students who complete Algebra II or Integrated Math III with a passing grade.

III.       The percentage of students who achieve the minimum score required for admission into a constituent institution of The University of North Carolina on a nationally normed test of college readiness.

IV.       The percentage of students enrolled in Career and Technical Education courses who meet the standard when scoring at Silver, Gold, or Platinum levels on a nationally normed test of workplace readiness.

3.         The graduation rate indicator shall be the percentage of students who graduate within four years of entering high school.

4.         The English language proficiency indicator shall be the percentage of students who progress in achieving English language proficiency.

b.         School quality and student success indicator. – The measure of school quality and student success shall be the growth score earned by schools.

"§ 115C‑83.17.  Definitions.

The following definitions apply in this Part:

(1)        Achievement score. – A numerical score on a scale of zero to 100 that is based on the sum of points earned by a school or by a subgroup of students pursuant to G.S. 115C‑83.15.

(2)        Growth score. – A numerical score measuring student growth calculated for a school or for a subgroup of students pursuant to G.S. 115C‑83.15.

(3)        Overall school performance grade. – The letter grade earned by a school for all students served by a school pursuant to G.S. 115C‑83.15(d).

(4)        Overall school performance score. – The numerical score earned by a school that is calculated by adding the school achievement score and the school growth score earned by a school pursuant to G.S. 115C‑83.15(d).

(5)        Subgroup performance grade. – The letter grade earned by a school for a subgroup of students served by the school pursuant to G.S. 115C‑83.15(d2).

(6)        Subgroup performance score. – The numerical score earned by a school that is calculated by adding the subgroup achievement score and the subgroup growth score earned by a school pursuant to G.S. 115C‑83.15(d2)."

SECTION 7.26.(e)  G.S. 115C‑75.5(5) reads as rewritten:

"(5)      Qualifying school. – A low‑performing school, as defined in G.S. 115C‑105.37, that meets one of the following criteria:

a.         The school received aearned an overall school performance score in the lowest five percent (5%) of all schools in the prior school year that meet all of the following requirements:

1.         The school includes all or part of grades kindergarten through fifth.

2.         The school did not exceed growth in at least one of the prior three school years and did not meet growth in at least one of the prior three school years.

3.         One of the models established in G.S. 115C‑105.37B for continually low‑performing schools had not been adopted for that school for the immediately prior school year.

…."

SECTION 7.26.(f)  G.S. 115C‑105.37 reads as rewritten:

"§ 115C‑105.37.  Identification of low‑performing schools.

(a)        Identification of Low‑Performing Schools. – The State Board of Education shall identify low‑performing schools on an annual basis. Low‑performing schools are those that receive aearn an overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" as defined by G.S. 115C‑83.15.

(b)        Parental Notice of Low‑Performing School Status. – Each school that the State Board identifies as low‑performing shall provide written notification to the parents and guardians of students attending that school within 30 days of the identification that includes the following information:

(1)        A statement that the State Board of Education has found that the school has "received" aearned an overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and has been identified as a low‑performing school as defined by G.S. 115C‑105.37." The statement shall include an explanation of the school performance grades and growth scores.

(2)        The school performance grade and growth score received.earned.

(3)        Information about the preliminary plan developed under subsection (a1) of this section and the availability of the final plan on the local school administrative unit's Web site.

(4)        The meeting date for when the preliminary plan will be considered by the local board of education.

(5)        A description of any additional steps the school is taking to improve student performance."

SECTION 7.26.(g)  G.S. 115C‑105.39A reads as rewritten:

"§ 115C‑105.39A.  Identification of low‑performing local school administrative units.

(a)        Identification of Low‑Performing Local School Administrative Units. – The State Board of Education shall identify low‑performing local school administrative units on an annual basis. A low‑performing local school administrative unit is a unit in which the majority of the schools in that unit that received aearned an overall school performance grade and school growth score as provided in G.S. 115C‑83.15 have been identified as low‑performing schools, as provided in G.S. 115C‑105.37.

(c)        Parental Notice of Low‑Performing Local School Administrative Unit Status. – Each local school administrative unit that the State Board identifies as low‑performing shall provide written notification to the parents and guardians of all students attending any school in the local school administrative unit within 30 days of the identification that includes the following information:

(1)        A statement that the State Board of Education has found that a majority of the schools in the local school administrative unit have "received" aearned an overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and have been identified as low‑performing schools as defined by G.S. 115C‑105.37." The statement shall also include an explanation of the school performance grades and school growth scores.

(2)        The percentage of schools identified as low‑performing.

(3)        Information about the preliminary plan developed under subsection (b) of this section and the availability of the final plan on the local school administrative unit's Web site.

(4)        The meeting date for when the preliminary plan will be considered by the local board of education.

(5)        A description of any additional steps the local school administrative unit and schools are taking to improve student performance.

(6)        For notifications sent to parents and guardians of students attending a school that is identified as low‑performing under G.S. 115C‑105.37, a statement that the State Board of Education has found that the school has "received aearned an overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" and has been identified as a low‑performing school as defined by G.S. 115C‑105.37." This notification also shall include the overall school performance grade and school growth score the school receivedearned and an explanation of the school performance grades and school growth scores."

SECTION 7.26.(h)  G.S. 115C‑218.65 reads as rewritten:

"§ 115C‑218.65.  North Carolina School Report Cards.

A charter school shall ensure that the report card issued for it by the State Board of Education receives wide distribution to the local press or is otherwise provided to the public. A charter school shall ensure that the overall school performance score and grade earned by the charter school for the current and previous four school years is prominently displayed on the school Web site. If a charter school is awarded aearned an overall school performance grade of D or F, the charter school shall provide notice of the grade in writing to the parent or guardian of all students enrolled in that school."

SECTION 7.26.(i)  G.S. 115C‑218.94(a) reads as rewritten:

"(a)      Identification of Low‑Performing Charter Schools. – The State Board of Education shall identify low‑performing charter schools on an annual basis. Low‑performing charter schools are those that receive aearn an overall school performance grade of D or F and a school growth score of "met expected growth" or "not met expected growth" as defined by G.S. 115C‑83.15."

SECTION 7.26.(j)  G.S. 115C‑238.66(11) reads as rewritten:

"(11)    North Carolina School Report Cards. – A regional school shall ensure that the report card issued for it by the State Board of Education receives wide distribution to the local press or is otherwise provided to the public. A regional school shall ensure that the overall school performance score and grade earned by the regional school for the current and previous four school years is prominently displayed on the school Web site. If a regional school is awarded aearned an overall school performance grade of D or F, the regional school shall provide notice of the grade in writing to the parent or guardian of all students enrolled in that school."

SECTION 7.26.(k)  G.S. 116‑239.8(14) reads as rewritten:

"(14)    North Carolina school report cards. – A lab school shall ensure that the report card issued for it by the State Board of Education receives wide distribution to the local press or is otherwise provided to the public. A lab school shall ensure that the overall school performance score and grade earned by the lab school for the current and previous four school years is prominently displayed on the school Web site. If a lab school is awarded aearned an overall school performance grade of D or F, the lab school shall provide notice of the grade in writing to the parent or guardian of all students enrolled in that school."

SECTION 7.26.(l)  This section applies beginning with the 2017‑2018 school year.

 

CLARIFY STUDENT CONSENT TO RECEIVE COLLEGE, UNIVERSITY, AND SCHOLARSHIP INFORMATION

SECTION 7.26A.  G.S. 115C‑401.2(e) reads as rewritten:

"(e)      Permissible Operator Actions. – This section does not prohibit an operator from doing any of the following:

(6)        Using a student's information, including covered information, solely to identify or display information on nonprofit institutions of higher education or scholarship providers to the student if the provider secures the express written consent of the parent or student who is at least 13 years of age given in response to clear and conspicuous notice."

 

CAREER AND COLLEGE READY LITERACY SKILLS/READING IMPROVEMENT COMMISSION

SECTION 7.26B.(a)  High School Diploma Endorsements. – G.S. 115C‑12(40) reads as rewritten:

"(40)    To Establish High School Diploma Endorsements. – The State Board of Education shall establish, implement, and determine the impact of adding (i) college, (ii) career, and (iii) college and career endorsements to high school diplomas to encourage students to obtain requisite job skills necessary for students to be successful in a wide range of high‑quality careers and to reduce the need for remedial education in institutions of higher education. These endorsements shall reflect courses completed, overall grade point average, reading achievement, and other criteria as developed by the State Board of Education. A student shall only receive a high school diploma endorsement if that student receives on a nationally norm‑referenced college admissions test for reading, either administered under G.S. 115C‑174.11(c)(4) or as an alternative nationally norm‑referenced college admissions test approved by the State Board, at least the benchmark score established by the testing organization that represents the level of achievement required for students to have approximately a fifty percent (50%) chance of obtaining a grade B or higher or a seventy‑five percent (75%) chance of obtaining a grade C or higher in a corresponding credit‑bearing, first‑year college course. A student may retake a nationally norm‑referenced test as many times as necessary to achieve the required benchmark score for reading in order to receive a high school diploma endorsement prior to the student's graduation. The State Board of Education shall report annually to the Joint Legislative Education Oversight Committee on (i) the impact of awarding these endorsements on high school graduation, college acceptance and remediation, and post‑high school employment rates.rates; (ii) the number of students who had to retake a nationally norm‑referenced college admissions test to meet the reading benchmark score required by this subdivision to receive a high school diploma endorsement; and (iii) the number of students who were not awarded a high school diploma endorsement solely because of the inability to meet the benchmark score for reading as required by this subdivision."

SECTION 7.26B.(b)  Reading Improvement Commission. – The Superintendent of Public Instruction shall establish a Reading Improvement Commission (Commission) within the Department of Public Instruction to study and make recommendations on best practices for public schools in the State to improve reading comprehension, understanding, and application for students in grades four through 12 to ensure that students complete high school with literacy skills necessary for career and college readiness. The Commission shall develop recommendations on appropriate methods to monitor student progress and provide appropriate and timely remediation to students to ensure success on nationally norm‑referenced college admissions tests. The Superintendent of Public Instruction may appoint superintendents, principals, reading instructors, representatives from research institutions, and other individuals as determined by the Superintendent to the Commission. Of the funds appropriated to the Department of Public Instruction for the 2017‑2018 fiscal year, the Superintendent of Public Instruction may use up to two hundred thousand dollars ($200,000) in nonrecurring funds for the 2017‑2018 fiscal year for the work of the Reading Improvement Commission. The Superintendent may also use these funds to contract with an independent research organization to assist in the study. The Superintendent of Public Instruction shall report to the Joint Legislative Education Oversight Committee, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the State Board of Education on the study, including any findings and recommendations, no later than January 15, 2019. The State Board of Education may use the findings and recommendations to inform the State Board's policies and may submit additional comments on the report to the Joint Legislative Education Oversight Committee, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives no later than February 15, 2019.

SECTION 7.26B.(c)  Subsection (a) of this section applies beginning with high school diploma endorsements awarded in the 2019‑2020 school year.

 

NATIONALLY NORM‑REFERENCED COLLEGE ADMISSIONS TEST

SECTION 7.26C.(a)  G.S. 115C‑174.11(c)(4) reads as rewritten:

"(4)      To the extent funds are made available, the State Board of Education shall plan for and require the administration of the ACT test for use a competitive bid process to adopt one nationally norm‑referenced college admissions test to make available to local school administrative units, regional schools, and charter schools to administer to all students in the eleventh grade unless the student has already taken a comparable test and scored at or above a level set by the State Board. The State Board of Education shall require the administration of an alternate to the ACT nationally norm‑referenced college admissions test or an alternate to the PLAN precursor test to the ACTto the nationally norm‑referenced college admissions test to a student who (i) exhibits severe and pervasive delays in all areas of conceptual, linguistic, and academic development and in adaptive behaviors, including communication, daily living skills, and self‑care, (ii) is following the extended content standards of the Standard Course of Study as provided in G.S. 115C‑81, or is following a course of study that, upon completing high school, may not lead to admission into a college‑level course of study resulting in a college degree, and (iii) has a written parental request for an alternate assessment.

The State Board of Education shall ensure that parents of students enrolled in all public schools, including charter and regional schools, have the necessary information to make informed decisions regarding participation in the ACT and the PLAN precursor test to the ACT.nationally norm‑referenced college admissions test and precursor test.

Alternate assessment and ACTnationally norm‑referenced college admissions test assessment results of students with disabilities shall be included in school accountability reports, including charter and regional schools, provided by the State Board of Education."

SECTION 7.26C.(b)  G.S. 115C‑174.22 reads as rewritten:

"§ 115C‑174.22.  Tools for student learning.

To the extent funds are made available for this purpose, and except as otherwise provided in G.S. 115C‑174.11(c)(4), the State Board shall plan for and require the administration of diagnostic tests in the eighth and tenth grades that align to the ACT test in order nationally norm‑referenced college admissions test adopted by the State Board through the competitive bid process pursuant to G.S. 115C‑174.11(c)(4). The results of the tests shall be used to help diagnose student learning and provide for students an indication of whether they are on track to be remediation‑free at a community college or university."

SECTION 7.26C.(c)  The State Board of Education shall solicit bids through a competitive bid process to adopt one nationally norm‑referenced college admissions test as required by G.S. 115C‑174.11(c)(4), as amended by subsection (a) of this section, to be administered beginning with the 2019‑2020 school year. The State Board of Education shall report on the results of the competitive bid process to the Joint Legislative Education Oversight Committee and the Fiscal Research Division no later than May 15, 2019.

SECTION 7.26C.(d)  Subsections (a) and (b) of this section apply beginning with the 2019‑2020 school year.

 

NORTH CAROLINA INNOVATIVE SCHOOL DISTRICT

SECTION 7.26E.(a)  Article 7A of Chapter 115C of the General Statutes reads as rewritten:

"Article 7A.

"Achievement North Carolina Innovative School District and Innovation Zones.

"§ 115C‑75.5.  Definitions.

The following definitions apply in this Article:

(1)        Achievement Innovative school. – A qualifying school selected by the State Board of Education under the supervision of the Achievement North Carolina Innovative School District.

(2)        Achievement North Carolina Innovative School District or ASD.ISD. – The statewide school unit established pursuant to this Article.

(3)        Achievement Innovative school operator or AS IS operator. – An entity selected by the State Board of Education upon the recommendation of the ASD ISD Superintendent to operate an achievement innovative school. The Department of Public Instruction may not be selected as an AS IS operator.

(4)        ASDISD Superintendent. – The superintendent of the ASDISD appointed by the Superintendent of Public Instruction in accordance with G.S. 115C‑75.6(b).G.S. 115C‑75.6.

(5)        Qualifying school. – A low‑performing school, as defined in G.S. 115C‑105.37, that meets one of the following criteria:

b.         The school received a school performance score in the lowest ten percent (10%) of all schools that include all or part of grades kindergarten through fifth in the prior school year and has been designated by the local board of education for consideration by the State Board of Education as an achievementinnovative school.

"§ 115C‑75.6.  AchievementNorth Carolina Innovative School District.

(a)        There is established the AchievementNorth Carolina Innovative School District (ASD)(ISD) under the administration of the State Board of Education and the Superintendent of Public Instruction. The ASDISD shall assume the supervision, management, and operation of elementary and secondary schools that have been selected as achievementinnovative schools pursuant toas provided in this Article. For the purposes of federal law and administration of State law, the ISD shall be considered a local school administrative unit.

(b)        Repealed by Session Laws 2016‑126, s. 15.

(c)        The Superintendent of Public Instruction shall appoint a superintendent to serve as the executive officer of the ASD.ISD. The ASDISD Superintendent shall serve at the pleasure of the Superintendent of Public Instruction at a salary established by the Superintendent of Public Instruction within the funds appropriated for this purpose. The ASDISD Superintendent shall have qualifications consistent with G.S. 115C‑271(a) and report directly to the Superintendent of Public Instruction.

(d)       By January 15 annually, the State Board of Education, Superintendent of Public Instruction, and the ASDISD Superintendent shall report to the Joint Legislative Education Oversight Committee on all aspects of operation of ASD,the ISD, including the selection of achievementinnovative schools and their progress.

"§ 115C‑75.7.  Selection of achievement innovative schools.

(a)        State Board Selection. – The State Board of Education is authorized to select, upon the recommendation of the ASD ISD Superintendent, no more than five qualifying elementary schools to transfer to the ASD ISD as achievement innovative schools. The five qualifying schools selected for inclusion in the ASD ISD should represent geographic diversity, including urban and rural schools. The State Board of Education shall select no more than one qualifying school per local school administrative unit, unless the local board of education consents.

(b)        Selection Process. – The selection of qualifying schools shall be based on an analysis of performance over the most recent three‑year period. Prior to recommendation of selection of a qualifying school, the ASD ISD Superintendent shall conduct an evaluation of the school to determine the factors contributing to the school's performance and shall confer with the school principal, local board of education members, the local school superintendent, and the local board of county commissioners to share the findings of the evaluation. The school selection process shall also include a public hearing to allow for parent and community input. The ASD ISD Superintendent shall evaluate and identify the qualifying schools to recommend for selection as prospective achievement innovative schools no later than NovemberOctober 15 prior to the initial school year in which the school may operate as an achievement innovative school and shall notify the local boards of education where prospective achievement innovative schools are located by that date. The State Board of Education shall select the prospective achievement innovative schools no later than JanuaryDecember 15.

(c)        Local Board Response. – Upon notification by the ASD ISD Superintendent of selection by the State Board of Education of the qualifying school as a prospective achievement innovative school, the local board of education shall determine whether to (i) close the selected qualifying school or (ii) transfer the school into the ASD. ISD. The local board shall not be required to undertake the study required by G.S. 115C‑72 before closing the school. Before the adoption of a resolution, the local board of education shall provide for a public hearing in regard to the proposed transfer or closure, at which hearing the public shall be afforded an opportunity to express their views. No later than MarchFebruary 1, the local board of education shall adopt a resolution either (i) consenting to transfer of the selected qualifying school to the ASD ISD as an achievement innovative school or (ii) closing that school at the conclusion of that school year. The State Board of Education may delay the transfer of a selected school to the ASD ISD for one year only upon the recommendation of the ASD ISD Superintendent.

(d)       Public Notification. – The list of qualifying schools and selected achievement innovative schools shall be made publically available on a Web site maintained by the ASD.ISD.

(e)        Waivers for Achievement Innovative Schools. – The ASD ISD Superintendent may waiverequest a waiver from the State Board of Education of State Board of Education rules, regulations, policies, and procedures, or the provisions of this Chapter for achievement innovative schools; however, achievement innovative schools shall be required to comply with, at a minimum, the statutory requirements for charter schools as provided in Article 14A of this Chapter. The goal for each waiver shall be improvement of student performance. All achievementinnovative schools shall comply with all applicable constitutional and statutory nondiscrimination requirements. Notwithstanding G.S. 115C‑105.26, the State Board of Education may grant a requested waiver of State laws or rules for an innovative school pursuant to this subsection, except for a waiver of State laws or rules applicable to children with disabilities and any of the other requirements set forth in this subsection.

"§ 115C‑75.8.  Selection of AS IS operators.

(a)        The State Board of Education may select an AS IS operator for a prospective achievement innovative school by January 15 and shall select an AS IS operator for a prospective school no later than February 15.

(b)        Upon the recommendation of the ASD ISD Superintendent, the State Board of Education shall only select an entity to contract as an AS IS operator if that entity demonstrates one of the following:

(1)        The entity has a record of results in improving performance of persistently low‑performing schools or improving performance of a substantial number of persistently low‑performing students within a school or schools operated by the entity in this State or other states.

(2)        The entity has a credible and specific plan for dramatically improving student achievement in a low‑performing school and provides evidence that the entity, or a contractual affiliate of such an entity, is either currently operating a school or schools in this State that provide students a sound, basic education or demonstrating consistent and substantial growth toward providing students a sound, basic education in the prior three school years.

(c)        The selected AS IS operator is encouraged to hold public informational sessions and other outreach to the community, prospective achievement innovative school, and local board of education of a prospective achievement innovative school prior to a local board's adoption of the resolution required by G.S. 115C‑75.7(c).

(d)       The contract between the State Board of Education and AS IS operator shall require, as a minimum, that the AS IS operator meet the same requirements as established for charter schools in the following statutes:

(1)        G.S. 115C‑218.20 (Civil liability and insurance requirements).

(2)        G.S. 115C‑218.25 (Open meetings and public records).

(3)        G.S. 115C‑218.30 (Accountability; reporting requirements to State Board of Education).

(4)        G.S. 115C‑218.50 (Charter school nonsectarian).

(5)        G.S. 115C‑218.55 (Nondiscrimination in charter schools).

(6)        G.S. 115C‑218.60 (Student discipline).

(7)        G.S. 115C‑218.65 (North Carolina School Report Cards).

(8)        G.S. 115C‑218.75 (General operating requirements).

(9)        G.S. 115C‑218.85 (Course of study requirements).

"§ 115C‑75.9.  Management of achievement innovative schools.

(a)        Direct Management by AS IS Operator. – An achievement innovative school shall be subject to direct management by an AS IS operator selected by the State Board of Education, upon the recommendation of the ASD ISD Superintendent, for a five‑year contract.

(b)        Role of AS IS Operator. – The AS IS operator shall be authorized to have a direct role in making decisions about school finance, human capital, and curriculum and instruction for the achievement innovative school while developing the leadership capacity in such schools.

(c)        Assignment to Achievement Innovative Schools. – All achievement innovative schools shall remain open to enrollment in the same manner with the same attendance zone as prior to becoming an achievement innovative school. If a local board of education's reassignment of students within the local school administrative unit due to student population changes or openings or closures of other schools impacts the achievement innovative school, the AS IS operator may appeal to the ASD ISD Superintendent and request a hearing before the State Board of Education regarding the reassignment. Notwithstanding G.S. 115C‑366, the State Board of Education shall, after hearing from both the local board of education and AS IS operator, determine whether the reassignment of students impacting the achievement innovative school may proceed.

(d)       Facility and Capital Expenditures. – Facility and capital expenditures shall be provided as follows:

(1)        In addition to the transfer of funds as provided in G.S. 115C‑75.10, the local board of education shall be responsible for facility and capital expenditures at the qualifying school.

(2)        All AS IS operators and local boards of education shall enter into an occupancy agreement establishing the terms of occupancy for the AS IS operator not otherwise addressed in statute. If the parties are unable to reach agreement, either party may petition the State Board of Education to resolve any issues in dispute.

(3)        The AS IS operator shall have first priority in use of the facility for any purpose related to the operation of the achievement innovative school. The local board of education may allow use of the facility by governmental, charitable, civic, or other organizations for activities within the community and may retain any funds received for such use for any time the AS IS operator has not provided written notice to the local board of its use of the facility during that time for a purpose related to the operation of the achievement innovative school.

For the purposes of this subsection, facility and capital expenditures include routine maintenance and repair, and capital expenditures include building repair and maintenance, furniture, furnishings, and equipment.

(e)        Transportation. – The local board of education shall provide transportation of all students assigned to the achievement innovative school in the same manner as provided for other schools in the local school administrative unit in that school year.

(f)        Memorandums of Understanding for Alternate Arrangements. – Notwithstanding this section, the AS IS operator, in consultation with the ASD ISD Superintendent, may elect to enter into a memorandum of understanding for alternate arrangements with the local board of education to address any of the following:

(1)        Facility and capital expenditures.

(2)        Transportation services.

(3)        Services for Children with Disabilities.

If the AS IS operator elects to use a memorandum of understanding for alternate arrangements, the AS IS operator and local board of education shall finalize the memorandum of understanding within 30 days of the initial request by the AS IS operator. If the parties have not completed the memorandum of understanding within 30 days, the State Board of Education shall resolve any issues in dispute.

(g)        Student Records. – The local board of education shall make available in a timely fashion all student records to the achievement innovative school at no cost for all students of that school.

(h)        Achievement Innovative School Employees. – The AS IS operator shall select and hire the school principal for an achievement innovative school. Within the limits of the school budget, the ASIS operator or its designee shall select staff members in accordance with guidance from the ASDISD Superintendent. Before finalizing staffing recommendations, the ASIS operator and the ASDISD Superintendent or the Superintendent's designee shall interview all existing staff members at the qualifying school and review student growth and performance data for those staff members for whom it is available. Notwithstanding Article 21A of this Chapter, the ASIS operator and the ASDISD Superintendent shall be permitted to examine personnel files of existing staff members for the qualifying school. The ASIS operator shall have the authority to decide whether any administrator, teacher, or staff member previously assigned to a qualifying school selected to become an achievementinnovative school shall continue as an employee of the achievementinnovative school. Any such employees retained shall become employees of the ASD.ISD. An employee hired to work in an achievementinnovative school shall be an employee of the ASD,ISD, and the employees shall be under the exclusive control of the ASD.ISD. All employees of the ASDISD shall be eligible for enrollment in the Teachers' and State Employees' Retirement System of North Carolina, the State Health Plan, and other benefits available to State employees. The ASIS operator shall provide funds to the ASDISD in an amount sufficient to provide salary and benefits for employees of the ASDISD working in the achievementinnovative school based on the terms of employment established by the ASIS operator.

(i)         Criminal History Checks. – The State Board of Education shall require applicants for employment with the ASD ISD to be checked for criminal histories using the process provided in G.S. 115C‑297.1. The State Board of Education shall provide the criminal history it receives to the ASD ISD Superintendent and AS IS operator.

(j)         Employees of Local Board of Education. – The transfer of a qualifying school shall be deemed a reorganization of the local school administration unit resulting in a reduction in force. If an employee is not given the option to continue as an employee for the achievement innovative school, the local board of education may, in its discretion, do any of the following:

(1)        Continue the employee's employment with the local board of education.

(2)        Dismiss the employee due to a reduction in force as provided in Article 22 of this Chapter.

(3)        Dismiss the employee as otherwise provided in Article 22 of this Chapter.

(k)        Liability Insurance. – The AS IS operator shall maintain reasonable amounts and types of liability insurance as established by the State Board of Education. No civil liability shall attach to the State Board of Education, the Department of Public Instruction, the ISD Superintendent, or a local board of education or to any of itstheir members or employees, individually or collectively, for any acts or omissions of the AS IS operator.

(l)         School Nutrition Program. – The achievement innovative school shall participate in the National School Lunch Program, as provided in G.S. 115C‑264.

(m)       Cooperation with ASD ISD Superintendent. – The local board of education shall cooperate with the ASD ISD Superintendent in carrying out his or her powers and duties as necessary in accordance with this Chapter.

"§ 115C‑75.10.  Achievement Innovative schools funds.

(a)        Funding Allocation Selection. – State and local funding for an achievement innovative school shall be allocated as provided in subsection (b) or subsection (c) of this section. The AS IS operator shall select one of the allocation methods as the method to be used for the achievement innovative school.

(b)        Designated Funding. – Funding shall be allocated to the ASD ISD for the achievement innovative school by the State Board of Education and local board of education as follows:

(1)        The State Board of Education shall allocate the following to the ASD ISD for each achievement innovative school:

a.         An amount equal to the average per pupil allocation for average daily membership from the local school administrative unit allotments in which the achievement innovative school was located for each child attending the achievement innovative school except for the allocations for (i) children with disabilities, (ii) children with limited English proficiency, and (iii) transportation. The State Board of Education shall provide the allocation for transportation to the local school administrative unit in which the achievement innovative school is located.

b.         An additional amount for each child attending the achievement innovative school who is a child with disabilities.

c.         An additional amount for children with limited English proficiency attending the achievement innovative school, based on a formula adopted by the State Board of Education.

(2)        The local school administrative unit in which the achievement innovative school is located shall transfer to the ASD ISD for the achievement innovative 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 ASD ISD for the achievement innovative school within 30 days of the receipt of monies into the local current expense fund. The local school administrative unit and ASD ISD may use the process for mediation of differences between the State Board of Education 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 an achievement innovative school located in the tax district for which these taxes are levied and in which the student resides. The local school administrative unit shall also provide the ASD ISD with all of the following information within the 30‑day time period provided in this subsection:

a.         The total amount of monies the local school administrative unit has in each of the funds listed in G.S. 115C‑426(c).

b.         The student membership numbers used to calculate the per pupil share of the local current expense fund.

c.         How the per pupil share of the local current expense fund was calculated.

d.         Any additional records requested by the ASD ISD from the local school administrative unit in order for the ASD ISD to audit and verify the calculation and transfer of the per pupil share of the local current expense fund.

(c)        Funding Memorandum of Understanding. – The AS IS operator, in consultation with the ASD ISD Superintendent, may enter into a funding memorandum of understanding with the local board of education of the local school administrative unit where the achievement innovative school is located for all student support and operational services and instructional services to be provided by the local board of education in the same manner and degree as in the prior school year or funding in an amount equivalent to the amount the local board of education would have expended on those services if provided. For the purposes of this subsection, student support and operational services include cafeteria services, custodial services, broadband and utilities, and student information services, and instructional services include alternative education, special education services, test administration services, textbooks, technology, media resources, instructional equipment, and other resources. The AS IS operator and local board of education shall finalize the funding memorandum of understanding within 30 days of the initial request for the memorandum by the AS IS operator. If the parties have not completed the funding memorandum of understanding within 30 days, the State Board of Education shall resolve any issues in dispute.

(d)       The ASD ISD may seek, manage, and expend federal money and grants, State funding, and other funding with the same authority as a local school administrative unit, including decisions related to allocation of State funds among achievement schools.innovative schools, and shall be considered a local school administrative unit for all federal funding purposes.

"§ 115C‑75.11.  Accountability and governance for achievement innovative schools.

(a)        The AS IS operator shall set clear goals related to higher academic outcomes for students, safe and positive learning environments for children, parent and community engagement, and the efficient and effective use of taxpayer dollars, empower and equip teachers and school leaders to meet the goals, and hold such teachers and school leaders accountable to meet the goals. The AS IS operator shall apply to the ASD ISD Superintendent for appropriate waivers for the achievement innovative school pursuant to G.S. 115C‑75.7(e).

(b)        The AS IS operator shall select, approve, or remove the school principal of an achievement innovative school that it is managing in accordance with this Article.

(c)        The AS IS operator shall enter into an agreement with the school principal regarding specific goals for the achievement innovative school related to higher academic outcomes for students, safe and positive learning environments for children, parent and community engagement, and the efficient and effective use of taxpayer dollars. The agreement shall be made publicly available on the ASD ISD Web site.

(d)       An achievement innovative school shall not be included in any State evaluation or performance models used for the local school administrative unit in which the school is located but shall be considered a part of the ASD ISD for all evaluation purposes.

"§ 115C‑75.12.  Term of supervision for an achievement innovative school.

(a)        An achievement innovative school shall remain under the supervision of the ASD ISD for a minimum of five consecutive years through a contract with an AS IS operator. The following shall apply to the term of a contract with an AS IS operator of an achievement innovative school:

(1)        Early termination of contract based on performance. – If, during the five‑year contract, the achievement innovative school's annual percentage growth does not exceed the average annual percentage growth of other qualifying schools for three consecutive years, the State Board of Education, upon the recommendation of the ASD ISD Superintendent, may terminate the contract at the conclusion of the academic year and select another AS IS operator in accordance with G.S. 115C‑75.8 to assume the remainder of the five‑year contract and any occupancy agreements or memorandums of understanding with the local board of education at the beginning of the next academic year.

(2)        Nonrenewal of contract based on performance. – If, by the end of the five‑year contract, the achievement innovative school's average annual percentage growth during the term of the contract does not exceed the average annual percentage growth of other qualifying schools during the same term, the State Board of Education shall not renew the contract of the AS IS operator and develop a transition plan to return the school to the local school administrative unit.

(3)        State Board of Education optional extension of contract for three years. – If, by the end of the five‑year contract, the achievement innovative school remains a qualifying school but has exceeded the average annual percentage growth of other qualifying schools and has shown growth over the term of the contract, the State Board of Education, upon the recommendation of the ASD ISD Superintendent in his or her discretion, may continue the contract with the AS IS operator for an additional three‑year term. The ASD ISD Superintendent and AS IS operator shall engage the school, the school community, and the school's local board of education in developing a transition plan for the school to leave the supervision of the ASD ISD at the conclusion of the three‑year extension of the contract. If the State Board of Education does not elect to continue the contract, the State Board of Education may do any of the following:

a.         Select another AS IS operator for a three‑year contract.

b.         Close the school as provided in subdivision (2) of this subsection.

c.         Develop a transition plan to return the school to the local school administrative unit for the next school year.

(4)        AS IS operator option to extend contract for three years. – If, by the end of the five‑year contract, the achievement innovative school receives a grade of C or higher under G.S. 115C‑12(9)c1., the AS IS operator shall have the option to extend the contract for another three‑year term. The ASD ISD Superintendent and AS IS operator shall engage the school, the school community, and the school's local board of education in developing a transition plan for the school to leave the supervision of the ASD ISD at the conclusion of the three‑year extension of the contract. Options at the conclusion of the contract shall include the following:

a.         Conversion to charter. – If, in the development of the transition plan, a local board of education indicates by resolution to the State Board of Education that the local board of education elects to not receive the transfer of the achievement innovative school back to the local school administrative unit, the AS IS operator may apply to convert the school to a charter school under Article 14A of this Chapter. If a charter is awarded, the charter board of directors may request to use the facility as provided in G.S. 115C‑218.35. If the AS IS operator does not seek conversion to a charter school or fails to receive a charter, the State Board of Education may close the school as provided in subdivision (2) of this subsection.

b.         Alternate as operator or return to local school administrative unit. – If the AS IS operator does not elect to continue the contract, the State Board of Education may select another AS IS operator for a three‑year contract or may develop a transition plan to return the school to the local school administrative unit for the next school year.

(5)        Termination of contract on other grounds. – The State Board of Education, upon the recommendation of the ASD ISD Superintendent, may terminate a contract with an AS IS operator at any time during the contract for financial mismanagement, noncompliance with federal or State laws, failure to comply with the terms of the contract, or evidence of criminal activity. The State Board of Education shall develop a transition plan to return the school to the local school administrative unit.

(b)        An achievement innovative school shall remain under the supervision of the ASD ISD for no more than eight years.

(c)        The State Board of Education shall make all decisions related to contracts for AS IS operators no later than May 1, except as provided in subdivision (5) of subsection (a) of this section.

"§ 115C‑75.13.  Innovation zones.

(a)        If a local board of education transfers a qualifying school to the ASD,ISD, the local board of education may ask the State Board of Education to be allowed to create an innovation zone (i) for up to three continually low‑performing schools within its local school administrative unit.or (ii) if the local school administrative unit has more than thirty‑five percent (35%) of the schools identified in the unit as low‑performing, for all of the low‑performing schools located in the unit.

The State Board of Education shall grantgrant, upon recommendation of the ISD Superintendent, such requests for the creation of an innovation zone. The State Board of Education shall also authorize the local board of education the flexibility to operate the schools within the innovation zone with the same exemptions from statutes and rules as a charter school authorized under Article 14A of this Chapter and with exemptions from local board of education policies as needed to ensure autonomy under the guidance of the innovation zone office for financial, programmatic, staffing, and time allocation decisions.

(b)        The innovation zone created by a local board of education must include all of the following:

(1)        Development of a clear and specific plan for improving schools within the innovation zone.

(2)        Establishment of an innovation zone office with a leader recommended by the ISD Superintendent to be appointed by the local board of education and approved by the State Board of Education to govern and lead the schools in the innovation zone.

(3)        Attraction of high‑quality staff at schools in the innovation zone through the use of incentives, favorable working conditions, and development of partnerships to develop human capital.

(4)        Accountability for those schools based on established benchmarks and goals for student achievement and for support services provided by the local school administrative unit based on metrics established by the innovation zone office for effective and efficient delivery.

(5)        Support for those schools by the innovation zone office to ensure priority in services from the local school administrative unit, pursuit of outside funding, and technical support, including support from external partners.

(c)        A local board of education may maintain an innovation zone created as provided in subsection (a) for up to five consecutive years. The State Board of Education may terminate the innovation zone as follows:

(1)        Early termination of innovation zone based on performance. – If, during the five‑year period, the average of the annual percentage growth of the schools within the innovation zone does not exceed the average annual percentage growth of other continually low‑performing schools for three consecutive years, the State Board of Education, upon the recommendation of the ASD ISD Superintendent, may terminate the innovation zone at the conclusion of the academic year.

(2)        Nonrenewal of innovation zone based on performance. – If, by the end of the five‑year period, the average annual percentage growth of the schools within the innovation zone over the five‑year period does not exceed the average annual percentage growth of other continually low‑performing schools during the same term, the State Board of Education shall not permit the local board of education to continue the innovation zone.

(3)        State Board of Education optional extension of innovation zone for three years. – If, by the end of the five‑year period, the schools within the innovation zone remain continually low‑performing schools but have exceeded the average annual percentage growth of other continually low‑performing schools, the State Board of Education, upon the recommendation of the ASD ISD Superintendent in his or her discretion, may allow continuation of the innovation zone for an additional three years.

(4)        Local board of education option to extend innovation zone for three years. – If, by the end of the five‑year period, the schools within the innovation zone receive a grade of C or higher under G.S. 115C‑12(9)c1., the local board of education shall have the option to extend the innovation zone for another three years.

(d)       A low‑performing school in an innovation zone, created as provided in clause (ii) of subsection (a) of this section, shall become an innovative school if that low‑performing school does not exceed expected growth in the last two years of the five consecutive years in the innovation zone."

SECTION 7.26E.(b)  G.S. 115C‑105.37A(d) reads as rewritten:

"(d)      The State Board of Education shall report annually to the Superintendent of the Achievement North Carolina Innovative School District on any schools identified under this section as qualifying schools as defined in G.S. 115C‑75.5 for consideration to be selected as achievement innovative schools in accordance with Article 7A of this Chapter."

SECTION 7.26E.(c)  G.S. 115C‑321(a)(5) reads as rewritten:

"(5)      An achievement innovative school operator and the Superintendent of the Achievement North Carolina Innovative School District if the school where the individual is employed has been selected as an achievement innovative school as provided in Article 7A of this Chapter."

SECTION 7.26E.(d)  Section 4 of S.L. 2016‑110 reads as rewritten:

"SECTION 4. Evaluation of the Achievement Innovative School District and Other Innovation Models. – The State Board of Education shall contract during the 2016‑20172017‑2018 school year with an independent research organization to evaluate the implementation and effectiveness of the following:

(1)        The Achievement Innovative School District in turning around low‑performing schools beginning with the 2017‑20182018‑2019 school year through the 2021‑20222022‑2023 school year, including the innovation zone established in Section 4.5 of this act. The State Board of Education shall require AS IS operators to provide the independent research organization with requested data to conduct the evaluation. The independent research organization shall include an analysis on the impact of public versus private funding in the effectiveness of the Achievement Innovative School District.

(2)        Innovation zones in turning around low‑performing schools beginning with the 2016‑20172017‑2018 school year through the 2021‑20222022‑2023 school year. The State Board of Education shall require local boards of education granted innovation zones to provide the independent research organization with requested data to conduct the evaluation.

The independent research organization shall report its interim findings to the State Board of Education annually no later than February 15, beginning in 2017,2018, and shall submit a final report no later than February 15, 2023.2024. The State Board of Education shall provide the report of the independent research commission, along with any recommended legislative changes, to the Joint Legislative Education Oversight Committee annually no later than March 1, beginning in 20172018 until submission of the final report in 2023.2024."

SECTION 7.26E.(e)  Section 6 of S.L. 2016‑110 reads as rewritten:

"SECTION 6. It is the intent of the General Assembly to appropriate to the Department of Public Instruction four hundred fifty thousand dollars ($450,000) for the 2017‑2018 fiscal year and annually thereafter for innovation zone model grants. Upon appropriation of funds, the State Board of Education shallshall, upon recommendation of the ISD Superintendent, award innovation zone model grants of up to one hundred fifty thousand dollars ($150,000) per fiscal year for five years to local boards of education who (i) have been authorized to adopt the innovation zone model by the State Board of Education for up to three schools or for a local school administrative unit with more than thirty‑five percent (35%) of schools within the unit identified as low‑performing and (ii) provide a dollar‑for‑dollar match with non‑State funding for the requested grant amount. Innovation zone model grants shall be directed by local boards of educations to the innovation zone office to address specific issues in innovation zone schools."

SECTION 7.26E.(f)  Section 8 of S.L. 2016‑110 reads as rewritten:

"SECTION 8. This act is effective when it becomes law and supervision of achievement innovative schools by the Achievement Innovative School District shall begin with the 2017‑20182018‑2019 school year. In the discretion of the State Board of Education (i) the ASD ISD Superintendent may not be required during the 2016‑20172017‑2018 school year to recommend qualifying schools for inclusion in the ASD ISD for the 2017‑20182018‑2019 school year and (ii) the time line for selection of achievement innovative schools for the 2017‑20182018‑2019 school year provided in G.S. 115C‑75.7 may be varied, but in no event may the local board of education's decision occur later than April 1, 2017.2018. The State Board of Education may select up to five qualifying schools to transfer to the ASD ISD beginning with the 2017‑20182018‑2019 school year but shall select at least two qualifying schools to transfer to the ASD ISD no later than the 2018‑20192019‑2020 school year and shall have selected five qualifying schools for transfer to the ASD ISD no later than the 2019‑20202020‑2021 school year."

 

READ TO ACHIEVE DIAGNOSTIC CHANGES

SECTION 7.27.(a)  G.S. 115C‑83.6 reads as rewritten:

"§ 115C‑83.6.  Facilitating early grade reading proficiency.

(a)        Kindergarten, first, second, and third grade students shall be assessed with valid, reliable, formative, and diagnostic reading assessments made available to local school administrative units by the State Board of Education pursuant to G.S. 115C‑174.11(a). Difficulty with reading development identified through administration of formative and diagnostic assessments shall be addressed with instructional supports and services. Parents or guardians of first and second grade students demonstrating reading comprehension below grade level as identified through assessments administered pursuant to this subsection shall be encouraged to enroll their student in a reading camp provided by the local school administrative unit. Parents or guardians of a student identified as demonstrating reading comprehension below grade level shall make the final decision regarding a student's reading camp attendance.

(a1)      To the greatest extent possible, kindergarten Kindergarten through third grade reading assessments shall yield data that can be used with the Education Value‑Added Assessment System (EVAAS), or a compatible and comparable system approved by the State Board of Education, (EVAAS) to analyze student data to identify root causes for difficulty with reading development and to determine actions to address them.

(b)        Formative and diagnostic assessments and resultant instructional supports and services shall address oral language, phonological and phonemic awareness, phonics, vocabulary, fluency, and comprehension using developmentally appropriate practices. These assessments may be administered by computer or other electronic device.

(c)        Local school administrative units are encouraged to partner with community organizations, businesses, and other groups to provide volunteers, mentors, or tutors to assist with the provision of instructional supports and services that enhance reading development and proficiency."

SECTION 7.27.(b)  By October 1, 2017, the State Superintendent shall issue a Request for Proposals (RFP) to vendors of diagnostic reading assessment instruments to provide one or more valid, reliable, formative, and diagnostic reading assessment instrument or instruments for use pursuant to G.S. 115C‑174.11. At a minimum, the diagnostic reading assessment instrument or instruments provided by the selected vendor shall meet all of the following criteria:

(1)        Yield data that can be used with the Education Value‑Added Assessment System (EVAAS).

(2)        Demonstrate close alignment with student performance on State assessments, including all assessments required in kindergarten through third grade by Part 2 of Article 10A of Chapter 115C of the General Statutes.

(3)        Demonstrate high rates of predictability as to student performance on State assessments, including all assessments required in kindergarten through third grade by Part 2 of Article 10A of Chapter 115C of the General Statutes.

SECTION 7.27.(c)  The State Superintendent shall form and supervise an Evaluation Panel to review the proposals received pursuant to the RFP issued in accordance with subsection (b) of this section. The Evaluation Panel shall be composed of persons employed within the Department of Public Instruction. By March 1, 2018, the Evaluation Panel, with the approval of the State Superintendent, shall select one vendor to provide the assessment instrument or instruments for the 2018‑2019 school year. In determining which vendor to select, the Evaluation Panel shall consider, at a minimum, all of the following factors:

(1)        The time required to conduct formative and diagnostic assessments with the intention of minimizing the impact on instructional time.

(2)        The level of integration of assessment results with instructional support for teachers and students.

(3)        The timeliness in reporting assessment results to teachers and administrators.

(4)        The ability to provide timely assessment results to parents and guardians.

SECTION 7.27.(d)  Subsection (a) of this section applies beginning with the 2018‑2019 school year.

 

REIMBURSE INITIAL TEACHER LICENSURE FEE FOR CERTAIN NC TEACHING GRADUATES

SECTION 7.28.(a)  G.S. 115C‑296 is amended by adding a new subsection to read:

"(a4)    Notwithstanding subsection (a2) of this section, the State Board of Education shall reimburse the initial teacher licensure application fee for the first time an applicant submits an application for teacher licensure, if the applicant meets all of the following requirements:

(1)        The applicant is a graduate of an approved educator preparation program located in North Carolina.

(2)        The applicant has successfully earned an initial teaching license in North Carolina.

The State Board shall issue reimbursement to the applicant within 30 days of the date the applicant successfully earns an initial teaching license in North Carolina."

SECTION 7.28.(b)  This section applies to applications for licensure received on or after July 1, 2017.

 

TESTING TRANSPARENCY

SECTION 7.28A.(a)  The State Superintendent of Public Instruction shall study and make recommendations regarding the extent to which the SAT and ACT tests align with the English language arts and mathematics portions of the Standard Course of Study. By February 1, 2018, the Superintendent shall report findings and recommendations to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Joint Legislative Education Oversight Committee.

SECTION 7.28A.(b)  G.S. 115C‑174.12 reads as rewritten:

"§ 115C‑174.12.  Responsibilities of agencies.

(d)       By September 1October 1 of each year, each local board of education shall notify the State Board of Education of any local standardized testing to be administered to students by the local school administrative unit at the direction of the local board of education in its schools and the calendar for administering those tests. The local board of education shall include information on the the following information:

(1)        The source of funds supporting the local testing program.

(2)        The time allotted to administer each test.

(3)        Whether the test is a computer‑based test or a paper‑based test.

(4)        The grade level or subject area associated with the test.

(5)        The date the test results are expected to be available to teachers and parents.

(6)        The type of test, the purpose of the test, and the use of the test results.

(7)        Estimates of average time for administering tests required by the local board of education by grade level.

The local board of education shall meet the requirements of this subsection by inputting the information into the uniform calendar published by the Department of Public Instruction pursuant to subsection (e1) of this section.

(e)        By October 15November 1 of each year, the State Board of Education shall submit a report to the Joint Legislative Education Oversight Committee containing information regarding the statewide administration of the testing program, including the number and type of tests and the testing schedule, and a summary of any local testing programs reported by local boards of education to the State Board of Education in accordance with subsection (d) of this section.

(e1)      By September 1 of each year, the Superintendent of Public Instruction shall publish on the Web site of the Department of Public Instruction a uniform calendar that includes schedules for State‑required testing and reporting results of tests for at least the next two school years, including estimates of the average time for administering State‑required standardized tests. The uniform calendar shall be provided to local boards of education in an electronic format that allows each local board of education to populate the calendar with, at a minimum, the information required by subsection (d) of this section. The uniform calendar shall be searchable by local school administrative unit and denote whether a test on the calendar is required by the State or required by a local board of education."

SECTION 7.28A.(c)  Part 2 of Article 10A of Chapter 115C of the General Statutes is amended by adding two new sections to read:

"§ 115C‑174.15.  Report student performance on local standardized tests.

(a)        A local board of education shall provide a student's results on standardized tests required by the local board, as reported pursuant to G.S. 115C‑174.12(d), to the following persons and according to the following time lines:

(1)        To the student's teachers no later than one week after the standardized test is administered.

(2)        To the student's parents no later than 30 days after the standardized test is administered.

(b)        If the superintendent of the local school administrative unit determines in writing that extenuating circumstances exist and reports those circumstances to the local board of education, the local board may extend the above time lines in the discretion of the local board of education.

"§ 115C‑174.16.  Report student performance on statewide, standardized tests.

The Department of Public Instruction shall make available to local boards of education a student's results on all statewide, standardized tests in a timely manner and in an easy‑to‑read and understandable format a minimum of two weeks prior to the first day of attendance of the next school year. Local boards of education shall make those results available to both the student's teacher of record and parent or guardian prior to the first day of student attendance of the school year. These reports shall include all of the following information:

(1)        A clear explanation of the student's performance on the applicable statewide, standardized tests.

(2)        Information identifying the student's areas of strength and areas in need of improvement.

(3)        Intervention strategies and appropriate resources based on the student's areas of strength and areas in need of improvement, when available.

(4)        Longitudinal information on the student's progress in each subject area based on previous statewide, standardized test data, when available.

(5)        Information showing the student's score compared to other students in the local school administrative unit, in the State, or, if available, in other states.

(6)        Predictive information showing the linkage between the scores attained by the student on the statewide, standardized tests and the scores he or she may potentially attain on nationally recognized college entrance examinations, if available. This information shall be provided in a timely manner as it becomes available to the Department of Public Instruction but may be provided later than the beginning of the school year."

SECTION 7.28A.(d)  G.S. 115C‑81(b) reads as rewritten:

"(b)      The Basic Education Program shall include course requirements and descriptions similar in format to materials previously contained in the standard course of study study, and it shall provide:provide all of the following:

(1)        A core curriculum for all students that takes into account the special needs of children;children.

(2)        A set of competencies, by grade level, for each curriculum area;area.

(3)        A list of textbooks for use in providing the curriculum;curriculum.

(4)        Standards for student performance and promotion based on the mastery of competencies, including standards for graduation, that take into account children with disabilities and, in particular, include appropriate modifications;modifications.

(4a)      Standards for early promotion based on the mastery of competencies. These standards shall apply when early grade or course promotion based on the mastery of competencies is permitted in a school and shall include requirements for early promotion based on mastery of competencies, at a minimum, in the following subject areas and grade levels:

a.         For English language arts, at least grades three through 12.

b.         For mathematics, at least grades three through 12.

(5)        A program of remedial education;education.

(6)        Required support programs;programs.

(7)        A definition of the instructional day;day.

(8)        Class size recommendations and requirements;requirements.

(9)        Prescribed staffing allotment ratios;ratios.

(10)      Material and equipment allotment ratios;ratios.

(11)      Facilities guidelines that reflect educational program appropriateness, long‑term cost efficiency, and safety considerations; andconsiderations.

(12)      Any other information the Board considers appropriate and necessary.

The State Board shall not adopt or enforce any rule that requires Algebra I as a graduation standard or as a requirement for a high school diploma for any student whose individualized education program (i) identifies the student as learning disabled in the area of mathematics and (ii) states that this learning disability will prevent the student from mastering Algebra I.

The State Board shall not require any student to prepare a high school graduation project as a condition of graduation from high school; local boards of education may, however, require their students to complete a high school graduation project."

SECTION 7.28A.(e)  This section applies beginning with the 2018‑2019 school year.

 

WAIVE FEE FOR CAMBRIDGE AICE PROGRAM COURSE

SECTION 7.28D.(a)  G.S. 115C‑174.26(a) reads as rewritten:

"(a)      It is the intent of the State to enhance accessibility and encourage students to enroll in and successfully complete more rigorous advanced courses to enable success in postsecondary education for all students. For the purposes of this section, an advanced course is an Advanced Placement or course, an International Baccalaureate Diploma Programme course.course, or a Cambridge Advanced International Certificate of Education (AICE) course, including an AS‑Level or A‑Level course. To attain this goal, to the extent funds are made available for this purpose, students enrolled in public schools shall be exempt from paying any fees for administration of examinations for advanced courses and registration fees for advanced courses in which the student is enrolled regardless of the score the student achieves on an examination."

SECTION 7.28D.(b)  Section 8.27(d) of S.L. 2013‑360, as amended by Section 8.17 of S.L. 2014‑100, reads as rewritten:

"SECTION 8.27.(d)  Of the funds appropriated to the Department of Public Instruction to implement the requirements of this section, ten million eight hundred thirty‑one thousand one hundred eighty‑four dollars ($10,831,184) for the 2014‑2015 fiscal year shall be used to fund fees for testing in advanced courses and one million five hundred thousand dollars ($1,500,000) for each fiscal year shall be used by the North Carolina Advanced Placement Partnership to carry out its responsibilities as set forth in this section. Funding appropriated for professional development may be used by the State Board of Education to contract with an independent evaluator to assess the implementation and impact of advanced course programs in North Carolina. For the purposes of this section, until June 30, 2017, the term "advanced courses" means an Advanced Placement or International Baccalaureate Diploma Programme course. Beginning with the 2017‑2018 fiscal year, the term "advanced courses" means an Advanced Placement course, an International Baccalaureate Diploma Programme course, or a Cambridge Advanced International Certificate of Education (AICE) course, including an AS‑Level or A‑Level course.

If the funds appropriated for the 2014‑2015 fiscal year and subsequent fiscal years are insufficient, the Department of Public Instruction may use other funds within the State Public School Fund for these purposes."

 

FINANCIAL LITERACY ELECTIVE COURSE PILOT PROGRAM

SECTION 7.32.(a)  Purpose. – The Superintendent of Public Instruction (Superintendent) shall establish a three‑year Financial Literacy Elective Course Pilot Program (Program). The purpose of the Program is to determine the value of an in‑depth high school elective course on personal financial literacy and the extent to which the course can provide high school students with the detailed knowledge and skills needed to become self‑supporting and to make critical decisions regarding their personal finances.

SECTION 7.32.(b)  Participation. – The Superintendent shall select local school administrative units to participate in the Program. The selected local school administrative units collectively shall represent the geographic, economic, and social diversity of the State. Each selected local school administrative unit shall participate in the Program for three school years, beginning in the 2017‑2018 school year.

SECTION 7.32.(c)  Implementation. – The Program shall authorize and assist the selected local school administrative units in the implementation of a high school elective course on personal financial literacy. This course shall serve as an in‑depth supplement to the instruction in personal financial literacy required pursuant to G.S. 115C‑81(i). The components of the elective course shall include, at a minimum, detailed information on personal banking, credit card finance, student loan financing, mortgages, credit scoring and credit reports, borrowing money for an automobile or other large purchase, and best practices in personal finance.

Prior to selecting the pilot units, the State Board of Education, in consultation with the Superintendent, shall develop a curriculum, materials, qualifications for teaching the course, and guidelines for local boards of education to use in implementing the course.

SECTION 7.32.(d)  Reporting Requirement. – By November 15 of each year following the operation of the Program, the Department of Public Instruction shall report to the Joint Legislative Education Oversight Committee on the implementation and administration of the Program in the pilot units and any recommendations on the modification, continuation, and potential expansion of the Program statewide.

 

CHARTER SCHOOL TRANSPORTATION GRANT PILOT PROGRAM

SECTION 7.35.(a)  Purpose; Definition. – The Department of Public Instruction (Department) shall establish the Charter School Transportation Grant Pilot Program (Program). The purpose of the Program shall be to award grant funds to a charter school meeting the requirements of subsection (b) of this section for the reimbursement of up to sixty‑five percent (65%) of the eligible student transportation costs incurred by the school in accordance with the provisions of this section. For purposes of this section, the term "eligible student transportation costs" means costs incurred by the charter school for (i) transportation fuel, (ii) vehicle maintenance, and (iii) contracted transportation services.

SECTION 7.35.(b)  Program Eligibility. – If a charter school has a student enrollment of at least fifty percent (50%) of its students residing in households with an income level not in excess of the amount required for a student to qualify for the federal free or reduced price lunch program in a semester of the school year, the charter school may apply to the Department for grant funds under the Program for reimbursement of up to sixty‑five percent (65%) of the eligible student transportation costs incurred by the school for that semester.

SECTION 7.35.(c)  Applications. – By August 1, 2017, the Department shall establish the criteria and guidelines for the grant application process for the upcoming school year, including any documentation required to be submitted with the application. The Department shall accept applications until December 31, 2017, for eligible student transportation costs incurred during the fall semester of the school year and until May 30, 2018, for eligible student transportation costs incurred during the spring semester of the school year.

SECTION 7.35.(d)  Award of Funds. – From funds made available for the Program, the Department shall award grant funds under the Program to the selected charter schools by January 15, 2018, for eligible student transportation costs incurred during the fall semester of the school year and by June 15, 2018, for eligible student transportation costs incurred during the spring semester of the prior school year. The total amount of each grant awarded under the Program shall not exceed one hundred thousand dollars ($100,000).

SECTION 7.35.(e)  Reporting. – The Department shall provide a report by March 15, 2018, to the Fiscal Research Division, the Joint Legislative Transportation Oversight Committee, and the Joint Legislative Education Oversight Committee on the administration of the Program, including (i) the number of charter schools that received grant funds, (ii) the amount of grant funds awarded to those charter schools, (iii) whether implementing the Program has led to an increase in charter schools offering lunch, (iv) whether implementing the Program has led to an increase in student lunch participation at charter schools offering lunch, (v) whether implementing the Program has increased or expanded the offering of student transportation by charter schools, and (vi) the modes of student transportation offered by charter schools that received grant funds.

 

PART VIII. COMPENSATION OF PUBLIC SCHOOL EMPLOYEES

 

TEACHER SALARY SCHEDULE

SECTION 8.1.(a)  The following monthly teacher salary schedule shall apply for the 2017‑2018 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.

2017‑2018 Teacher Monthly Salary Schedule

Years of Experience                                                              "A" Teachers

0                                                                                         $3,500

1                                                                                         $3,600

2                                                                                         $3,630

3                                                                                         $3,730

4                                                                                         $3,730

5                                                                                         $3,830

6                                                                                         $3,830

7                                                                                         $3,930

8                                                                                         $3,930

9                                                                                         $4,055

10                                                                                       $4,055

11                                                                                       $4,205

12                                                                                       $4,205

13                                                                                       $4,355

14                                                                                       $4,355

15                                                                                       $4,555

16                                                                                       $4,630

17                                                                                       $4,730

18                                                                                       $4,730

19                                                                                       $4,830

20                                                                                       $4,830

21                                                                                       $4,930

22                                                                                       $4,930

23                                                                                       $5,000

24                                                                                       $5,000

25+                                                                                    $5,130.

SECTION 8.1.(b)  Salary Supplements for Teachers Paid on This Salary Schedule. –

(1)        Licensed teachers who have NBPTS certification shall receive a salary supplement each month of twelve percent (12%) of their monthly salary on the "A" salary schedule.

(2)        Licensed teachers who are classified as "M" teachers shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.

(3)        Licensed teachers with licensure based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the supplement provided to them as "M" teachers.

(4)        Licensed teachers with licensure based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the supplement provided to them as "M" teachers.

(5)        Certified school nurses shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.

SECTION 8.1.(c)  The first step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be equivalent to the sixth step of the "A" salary schedule. These employees shall receive a salary supplement each month of ten percent (10%) of their monthly salary and are eligible to receive salary supplements equivalent to those of teachers for academic preparation at the six‑year degree level or the doctoral degree level.

SECTION 8.1.(d)  The twenty‑sixth step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be seven and one‑half percent (7.5%) higher than the salary received by these same employees on the twenty‑fifth step of the salary schedule.

SECTION 8.1.(e)  Beginning with the 2014‑2015 fiscal year, in lieu of providing annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those longevity payments are included in the monthly amounts under the teacher salary schedule.

SECTION 8.1.(f)  A teacher compensated in accordance with this salary schedule for the 2017‑2018 school year shall receive an amount equal to the greater of the following:

(1)        The applicable amount on the salary schedule for the applicable school year.

(2)        For teachers who were eligible for longevity for the 2013‑2014 school year, the sum of the following:

a.         The salary the teacher received in the 2013‑2014 school year pursuant to Section 35.11 of S.L. 2013‑360.

b.         The longevity that the teacher would have received under the longevity system in effect for the 2013‑2014 school year provided in Section 35.11 of S.L. 2013‑360 based on the teacher's current years of service.

c.         The annual bonus provided in Section 9.1(e) of S.L. 2014‑100.

(3)        For teachers who were not eligible for longevity for the 2013‑2014 school year, the sum of the salary and annual bonus the teacher received in the 2014‑2015 school year pursuant to Section 9.1 of S.L. 2014‑100.

SECTION 8.1.(g)  As used in this section, the term "teacher" shall also include instructional support personnel.

SECTION 8.1.(h)  Section 9.1(i) of S.L. 2016‑94 is repealed.

SECTION 8.1.(i)  It is the intent of the General Assembly to implement the following base monthly teacher salary schedule for the 2018‑2019 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule would be based on years of teaching experience.

2018‑2019 Teacher Monthly Salary Schedule

Years of Experience                                                              "A" Teachers

0                                                                                         $3,500

1                                                                                         $3,600

2                                                                                         $3,700

3                                                                                         $3,800

4                                                                                         $3,900

5                                                                                         $4,000

6                                                                                         $4,100

7                                                                                         $4,200

8                                                                                         $4,300

9                                                                                         $4,400

10                                                                                       $4,500

11                                                                                       $4,600

12                                                                                       $4,700

13                                                                                       $4,800

14                                                                                       $4,900

15‑24                                                                                 $5,000

25+                                                                                    $5,130.

 

SUPPORT HIGHLY QUALIFIED NC TEACHING GRADUATES

SECTION 8.2.(a)  For purposes of this section, a "highly qualified graduate" or "graduate" is an individual entering the teaching profession who has graduated from an approved educator preparation program located in North Carolina (i) with a grade point average of 3.75 or higher on a 4.0 scale, or its equivalent, and (ii) with a score of 48 or higher on the edTPA assessment or an equivalent score on the nationally normed and valid pedagogy assessment used to determine clinical practice performance. Notwithstanding Section 8.1(a) of this act, a highly qualified graduate who is employed by a local board of education shall receive a salary supplement each month at the highest level for which the graduate qualifies, as follows:

(1)        A graduate accepts initial employment at a school identified as low‑performing by the State Board of Education pursuant to G.S. 115C‑105.37 shall receive a salary supplement during the graduate's first three years of employment as a teacher, without a break in service, equivalent to the difference between the State‑funded salary of the graduate and the State‑funded salary of a similarly situated teacher with three years of experience on the "A" Teachers salary schedule, as long as the graduate (i) remains teaching at the same school or (ii) accepts subsequent employment at another low‑performing school or local school administrative unit identified as low‑performing.

(2)        A graduate licensed and employed to teach in the areas of special education, science, technology, engineering, or mathematics shall receive a salary supplement during the graduate's first two years of employment as a teacher, without a break in service, equivalent to the difference between the State‑funded salary of the graduate and the State‑funded salary of a similarly situated teacher with two years of experience on the "A" Teachers salary schedule, as long as the graduate continues teaching in one of those areas.

(3)        All other graduates shall receive a salary supplement during the graduate's first year of employment as a teacher, without a break in service, equivalent to the difference between the State‑funded salary of the graduate and the State‑funded salary of a similarly situated teacher with one year of experience on the "A" Teachers salary schedule.

SECTION 8.2.(b)  This section applies to teachers entering the profession in the 2017‑2018 fiscal year.

 

PRINCIPAL SALARY SCHEDULE

SECTION 8.3.(a)  The following annual salary schedule for principals shall apply for the 2017‑2018 fiscal year, beginning July 1, 2017.

2017‑2018 Principal Annual Salary Schedule

Avg. Daily Membership              Base                      Met Growth         Exceeded Growth

0‑400                                       $61,751                 $67,926                 $74,101

401‑700                                   $64,839                 $71,322                 $77,806

701‑1,000                                $67,926                 $74,719                 $81,511

1,001‑1,300                             $71,014                 $78,115                 $85,216

1,301+                                     $74,101                 $81,511                 $88,921.

A principal's placement on the salary schedule shall be determined according to the average daily membership of the school supervised by the principal in the current school year and the school growth scores, calculated pursuant to G.S. 115C‑83.15(c), for each school the principal supervised in at least two of the prior three school years, regardless of a break in service, and provided the principal supervised each school as a principal for at least a majority of the school year, as follows:

(1)        A principal shall be paid according to the Exceeded Growth column of the schedule if the school growth scores show the school or schools exceeded expected growth in at least two of the prior three school years.

(2)        A principal shall be paid according to the Met Growth column of the schedule if any of the following apply:

a.         The school growth scores show the school or schools met expected growth in at least two of the prior three school years.

b.         The school growth scores show the school or schools met expected growth in at least one of the prior three school years and exceeded expected growth in one of the prior three school years.

c.         The principal supervised a school in at least two of the prior three school years that was not eligible to receive a school growth score.

(3)        A principal shall be paid according to the Base column if either of the following apply:

a.         The school growth scores show the school or schools did not meet expected growth in at least two of the prior three years.

b.         The principal has not supervised any school as a principal for a majority of the school year in at least two of the prior three school years.

SECTION 8.3.(b)  Beginning with the 2017‑2018 fiscal year, in lieu of providing annual longevity payments to principals paid on the principal salary schedule, the amounts of those longevity payments are included in the annual amounts under the principal salary schedule.

SECTION 8.3.(c)  A principal compensated in accordance with this section for the 2017‑2018 fiscal year shall receive an amount equal to the greater of the following:

(1)        The applicable amount determined pursuant to subsection (a) of this section.

(2)        For principals who were eligible for longevity in the 2016‑2017 fiscal year, the sum of the following:

a.         The salary the principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.

b.         The longevity that the principal would have received as provided for State employees under the North Carolina Human Resources Act for the 2016‑2017 fiscal year based on the principal's current years of service.

(3)        For principals who were not eligible for longevity in the 2016‑2017 school year, the salary the principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.

SECTION 8.3.(c1)  Subsection (c) of this section applies to the 2017‑2018 fiscal year only and shall not apply to subsequent fiscal years.

SECTION 8.3.(d)  G.S. 115C‑105.25(b)(5c) reads as rewritten:

"(5c)    Funds allocated for school building administration may be converted for any purpose authorized by the policies of the State Board of Education. For funds related to principal positions, the salary transferred shall be based on the first step of the Principal III Salary Schedule.the Base column of the Principal Salary Schedule. For funds related to assistant principal months of employment, the salary transferred shall be based on the first step of the Assistant Principal Salary Schedule."A" Teachers Salary Schedule at the salary level for assistant principals. Certified position allotments shall not be transferred to dollars to hire the same type of position."

 

PRINCIPAL BONUSES

SECTION 8.4.(a)  The Department of Public Instruction shall administer a bonus in the 2017‑2018 fiscal year to any principal who supervised a school as a principal for a majority of the previous school year if that school was in the top fifty percent (50%) of school growth in the State during the previous school year, calculated by the State Board pursuant to G.S. 115C‑83.15(c), as follows:

2017‑2018 Principal Bonus Schedule

Statewide Growth Percentage                                             Bonus

Top 5%                                                                        $5,000

Top 10%                                                                      $4,000

Top 15%                                                                      $3,000

Top 20%                                                                      $2,000

Top 50%                                                                      $1,000.

A principal shall receive no more than one bonus pursuant to this subsection. The bonus shall be paid at the highest amount for which the principal qualifies.

SECTION 8.4.(b)  In addition to the bonuses provided pursuant to subsection (a) of this section, the Department shall administer a bonus in the 2017‑2018 fiscal year to any principal who supervised the same school as a principal for a majority of the 2015‑2016 school year and the 2016‑2017 school year if the school was designated by the State Board of Education pursuant to G.S. 115C‑83.15(f) as having met expected growth or as having not met expected growth in the 2015‑2016 school year and was designated by the State Board as having exceeded expected growth in the 2016‑2017 school year. The bonus shall be the greater of the following:

(1)        Five thousand dollars ($5,000).

(2)        Ten thousand dollars ($10,000) for any principal who supervised a school during the 2015‑2016 school year with a school performance grade of D or F, as calculated by the State Board pursuant to G.S. 115C‑83.15(d).

SECTION 8.4.(c)  No principal shall receive more than two bonuses pursuant to this section. The bonus or bonuses awarded to a principal pursuant to this section shall be in addition to any regular wage or other bonus the principal receives or is scheduled to receive.

SECTION 8.4.(d)  Notwithstanding G.S. 135‑1(7a), the bonuses awarded in accordance with this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

SECTION 8.4.(e)  The bonuses awarded in accordance with this section do not apply to principals no longer employed as a principal due to resignation, dismissal, reduction in force, death, or retirement or whose last workday is prior to July 1, 2017.

SECTION 8.4.(f)  It is the intent of the General Assembly that funds provided to local school administrative units pursuant to this section will supplement principal compensation and not supplant local funds.

SECTION 8.4.(g)  The bonuses related to these funds shall be paid no later than October 31, 2017.

 

ASSISTANT PRINCIPAL SALARIES

SECTION 8.5.(a)  For the 2017‑2018 fiscal year, commencing July 1, 2017, assistant principals shall receive a monthly salary based on the salary schedule for teachers who are classified as "A" teachers plus seventeen percent (17%). Years of experience for an assistant principal on the salary schedule shall be measured by the total number of years the assistant principal has spent as a teacher, an assistant principal, or both. For purposes of this section, an administrator with a one‑year provisional assistant principal's certificate shall be considered equivalent to an assistant principal.

SECTION 8.5.(b)  Assistant principals with certification based on academic preparation at the six‑year degree level shall be paid a salary supplement of one hundred twenty‑six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary supplement of two hundred fifty‑three dollars ($253.00) per month.

SECTION 8.5.(c)  Participants in an approved full‑time master's in‑school administration program shall receive up to a 10‑month stipend at the beginning salary of an assistant principal during the internship period of the master's program. The stipend shall not exceed the difference between the beginning salary of an assistant principal plus the cost of tuition, fees, and books and any fellowship funds received by the intern as a full‑time student, including awards of the Principal Fellows Program. The Principal Fellows Program or the school of education where the intern participates in a full‑time master's in‑school administration program shall supply the Department of Public Instruction with certification of eligible full‑time interns.

SECTION 8.5.(d)  Beginning with the 2017‑2018 fiscal year, in lieu of providing annual longevity payments to assistant principals on the assistant principal salary schedule, the amounts of those longevity payments are included in the monthly amounts provided to assistant principals pursuant subsection (a) of this section.

SECTION 8.5.(e)  An assistant principal compensated in accordance with this section for the 2017‑2018 fiscal year shall receive an amount equal to the greater of the following:

(1)        The applicable amount determined pursuant to subsections (a) through (c) of this section.

(2)        For assistant principals who were eligible for longevity in the 2016‑2017 fiscal year, the sum of the following:

a.         The salary the assistant principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.

b.         The longevity that the assistant principal would have received as provided for State employees under the North Carolina Human Resources Act for the 2016‑2017 fiscal year based on the assistant principal's current years of service.

(3)        For assistant principals who were not eligible for longevity in the 2016‑2017 fiscal year, the salary the assistant principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.

SECTION 8.5.(f)  It is the intent of the General Assembly to compensate assistant principals in the 2018‑2019 fiscal year based on the salary schedule for teachers who are classified as "A" teachers, plus nineteen percent (19%).

 

CENTRAL OFFICE SALARIES

SECTION 8.6.(a)  The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2017‑2018 fiscal year, beginning July 1, 2017:

                                                                     2017‑2018 Fiscal Year

                                                               Minimum                     Maximum

School Administrator I                             $3,525           to           $6,501

School Administrator II                           $3,729           to           $6,888

School Administrator III                          $3,951           to           $7,300

School Administrator IV                          $4,104           to           $7,585

School Administrator V                           $4,265           to           $7,887

School Administrator VI                          $4,517           to           $8,356

School Administrator VII                        $4,693           to           $8,688.

The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents. The category in which an employee is placed shall be included in the contract of any employee.

SECTION 8.6.(b)  The monthly salary ranges that follow apply to public school superintendents for the 2017‑2018 fiscal year, beginning July 1, 2017:

                                                                     2017‑2018 Fiscal Year

                                                               Minimum                     Maximum

Superintendent I                                       $4,974           to           $9,209

Superintendent II                                     $5,273           to           $9,758

Superintendent III                                    $5,586           to         $10,344

Superintendent IV                                    $5,921           to         $10,965

Superintendent V                                     $6,277           to         $11,626.

The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.

SECTION 8.6.(c)  Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the North Carolina Human Resources Act.

SECTION 8.6.(d)  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the compensation provided pursuant to this section. Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the compensation provided for under this section.

SECTION 8.6.(e)  The State Board of Education shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.

 

NONCERTIFIED PERSONNEL SALARIES

SECTION 8.7.(a)  For the 2017‑2018 fiscal year, the annual salary for noncertified public school employees whose salaries are supported from State funds shall be increased as follows:

(1)        For permanent, full‑time employees on a 12‑month contract, by one thousand dollars ($1,000).

(2)        For the following employees, by a prorated and equitable amount based on the amount specified in subdivision (1) of this subsection:

a.         Permanent, full‑time employees on a contract for fewer than 12 months.

b.         Permanent, part‑time employees.

c.         Temporary and permanent hourly employees.

SECTION 8.7.(b)  Of the funds appropriated in this act for salary increases for noncertified personnel in the 2017‑2018 fiscal year, in lieu of the salary increases provided in subsection (a) of this section, the sum of sixteen million eight hundred fifty‑five thousand eighty‑one dollars ($16,855,081) shall be allocated to local boards of education to increase the average rates of pay for all school bus drivers in the local school administrative unit on an equitable basis.

 

SCHOOL BOARDS CREATE MINIMUM SALARY SCHEDULE FOR OCCUPATIONAL THERAPISTS AND PHYSICAL THERAPISTS

SECTION 8.8.  G.S. 115C‑316 is amended by adding a new subsection to read:

"(b1)    Every local board of education shall adopt a minimum salary schedule for occupational therapists and physical therapists employed in full‑time, permanent positions. The minimum salary schedule shall apply to positions paid from State, local, or federal funds. In accordance with the noncertified salary grades and ranges adopted by the State Board of Education, the minimum salary schedule shall differentiate salaries based on years of experience, but experience‑based intervals shall be no greater than five years. Local boards of education may compensate occupational therapists and physical therapists above the minimum salary schedule provided all State‑funded salaries are within the noncertified salary grades and ranges adopted by the State Board of Education."

 

VETERAN TEACHER BONUSES

SECTION 8.8A.(a)  By October 31 of each year of the 2017‑2019 fiscal biennium, the Department of Public Instruction shall administer a one‑time, lump sum bonus in the amount of three hundred eighty‑five dollars ($385.00) to any teacher with at least 25 years of teaching experience.

SECTION 8.8A.(b)  The bonuses awarded pursuant to this section shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

SECTION 8.8A.(c)  Notwithstanding G.S. 135‑1(7a), the bonuses awarded pursuant to this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

 

REVISE TEACHER BONUS PROGRAMS

SECTION 8.8B.(a)  Section 8.8 of S.L. 2016‑94 reads as rewritten:

"ADVANCED PLACEMENT/INTERNATIONAL BACCALAUREATE BACCALAUREATE/CAMBRIDGE AICE TEACHER BONUS PILOT PROGRAM

"SECTION 8.8.(a)  The State Board of Education shall establish the Advanced Placement/International Baccalaureate Pilot Baccalaureate/Cambridge AICE Program (pilot program) (program) to reward advanced course teacher performance and to encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay for two school years to licensed teachers of advanced courses, courses in public schools, including charter schools, beginning with data from the 2015‑2016 school year, in accordance with the following:

(1)        A bonus in the amount of fifty dollars ($50.00) for each student taught by an advanced course teacher in each advanced course who receives the following score:

a.         For Advanced Placement courses, a score of three or higher on the College Board Advanced Placement Examination.

b.         For International Baccalaureate Diploma Programme courses, a score of four or higher on the International Baccalaureate course examination.

c.         For the Cambridge Advanced International Certificate of Education (AICE) program, a score of "E" or higher on the Cambridge AICE program examinations.

(2)        No teacher shall be awarded a bonus pursuant to this subsection that exceeds two thousand dollars ($2,000)three thousand five hundred dollars ($3,500) in any given school year. The bonus awarded to a teacher pursuant to this subsection shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

(3)        For advanced course scores collected from the 2015‑2016 school year and the 2016‑2017 school year, bonuses Bonuses awarded pursuant to this subsection are payable in January 2017 and January 2018, respectively,January, based on data from the previous school year, to qualifying advanced course teachers who remain employed teaching advanced courses in the same local school administrative unit at least from the school year the data is collected until the corresponding school year that the bonus is paid.

"SECTION 8.8.(b)  For the purposes of this section, an "advanced course" shall mean an Advanced Placement or course, an International Baccalaureate Diploma Programme course.course, or a Cambridge AICE course.

"SECTION 8.8.(c)  Notwithstanding G.S. 135‑1(7a), the compensation bonuses awarded under this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

"SECTION 8.8.(d)  The State Board of Education shall report on and study the pilot program as follows:

(1)        The State Board shall report on study the effect of the program on advanced course teacher performance and retention. The State Board shall report the results of its findings and the amount of bonuses awarded to advanced course teachers, including the amount awarded for Advanced Placement courses and courses, the amount awarded for International Baccalaureate Diploma Programme courses, and the amount awarded for Cambridge AICE program courses, to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2017, and again by March 15, 2018.15 of each year.

(2)        The State Board shall study the effect of the pilot program on advanced course teacher performance and retention. The State Board shall report the results of its findings to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee by March 15, 2018.

"SECTION 8.8.(e)  For the 2017‑2018 fiscal year only, the Director of the Budget shall also include in the base budget, as defined by G.S. 143C‑1‑1(d)(1c), the amount of nonrecurring funds needed to support the pilot program.

"SECTION 8.8.(f)  This section expires June 30, 2018."

SECTION 8.8B.(b)  Section 8.9 of S.L. 2016‑94 reads as rewritten:

"INDUSTRY CERTIFICATIONS AND CREDENTIALS TEACHER BONUS PILOT PROGRAM

"SECTION 8.9.(a)  The State Board of Education, in collaboration with the Department of Commerce, shall establish the Industry Certifications and Credentials Teacher Bonus Pilot Program (pilot program)(program) to reward the performance of teachers in public schools, including charter schools, who teach students earning approved industry certifications or credentials consistent with G.S. 115C‑156.2 and to encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay for two school years to teachers in public schools, including charter schools, who teach students earning approved industry certifications or credentials, beginning with data from the 2015‑2016 school year, in accordance with the following:

(1)        For teachers who provide direct instruction to students, bonuses shall be provided in the following amounts:

a.         A bonus in the amount of twenty‑five dollars ($25.00) for each student taught by a teacher who provided instruction in a course that led to the attainment of an industry certification or credential with a twenty‑five‑dollar ($25.00) value ranking as determined under subdivision (3) of this subsection.

b.         A bonus in the amount of fifty dollars ($50.00) for each student taught by a teacher who provided instruction in a course that led to the attainment of an industry certification or credential with a fifty‑dollar ($50.00) value ranking as determined under subdivision (3) of this subsection.

(2)        No teacher shall be awarded a bonus pursuant to this subsection that exceeds two thousand dollars ($2,000)three thousand five hundred dollars ($3,500) in any given school year. The bonus awarded to a teacher pursuant to this subsection shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

(3)        The Department of Commerce, in consultation with the State Board, shall assign a value ranking for each industry certification and credential based on academic rigor and employment value in accordance with this subdivision. Fifty percent (50%) of the ranking shall be based on academic rigor and the remaining fifty percent (50%) on employment value. Academic rigor and employment value shall be based on the following elements:

a.         Academic rigor shall be based on the number of instructional hours, including work experience or internship hours, required to earn the industry certification or credential, with extra weight given for coursework that also provides community college credit.

b.         Employment value shall be based on the entry wage, growth rate in employment for each occupational category, and average annual openings for the primary occupation linked with the industry certification or credential.

(4)        For data on courses leading to student attainment of industry certifications and credentials collected from the 2015‑2016 school year and the 2016‑2017 school year, bonusesBonuses awarded pursuant to this subsection are payable in January 2017 and January 2018, respectively, to qualifying teachers who remain employed teaching students earning approved industry certifications or credentials in the same local school administrative unit at least from the school year the data is collected until the corresponding school year that the bonus is paid.

"SECTION 8.9.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonuses awarded under this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

"SECTION 8.9.(c)  The State Board of Education shall report on and study the pilot program as follows:

(1)        The State Board shall study the effect of the program on teacher performance and retention. The State Board shall report on the results of its findings, the amount of bonuses awarded to teachers who teach students earning approved industry certifications or credentials credentials, and the type of industry certifications and credentials earned by their students to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2017, and again by March 15, 2018.15 of each year.

(2)        The State Board shall study the effect of the pilot program on teacher performance and retention. The State Board shall report the results of its findings to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee by March 15, 2018.

"SECTION 8.9.(d)  For the 2017‑2018 fiscal year only, the Director of the Budget shall also include in the base budget, as defined by G.S. 143C‑1‑1(d)(1c), the amount of nonrecurring funds needed to support the pilot program.

"SECTION 8.9.(e)  This section expires June 30, 2018."

SECTION 8.8B.(c)  Section 9.7 of S.L. 2016‑94 reads as rewritten:

"THIRD GRADE READING READ TO ACHIEVE TEACHER PERFORMANCE PILOTBONUS PROGRAM

"SECTION 9.7.(a)  The State Board of Education shall establish the Third Grade Reading Read to Achieve Teacher Performance PilotBonus Program (program) to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay to licensed third grade teachers who have an Education Value‑Added Assessment System (EVAAS) student growth index score for third grade reading from the previous school year, beginning with the data from the 2015‑2016 school year, as follows:

(1)        Of the funds appropriated for this the program, five million dollars ($5,000,000) shall be allocated for bonuses to licensed third grade teachers who are in the top twenty‑five percent (25%) of teachers in the State according to the EVAAS student growth index score for third grade reading from the previous year. These funds shall be allocated equally among qualifying teachers.

(2)        Of the funds appropriated for this the program, five million dollars ($5,000,000) shall be allocated to pay bonuses to licensed third grade teachers who are in the top twenty‑five percent (25%) of teachers in their respective local school administrative units according to the EVAAS student growth index score for third grade reading from the previous year. These funds shall be split proportionally based on average daily membership for each local school administrative unit and then distributed equally among qualifying teachers in each local school administrative unit, subject to the following conditions:

a.         Teachers employed in charter schools and regional schools are not eligible to receive a bonus under this subdivision.

b.         Any teacher working in a local school administrative unit that employs three or fewer third grade teachers shall receive a bonus under this subdivision if that teacher has an EVAAS student growth index score for third grade reading from the previous school year that exceeds expected growth.

(3)        For EVAAS student growth index score data collected during the 2015‑2016 school year and the 2016‑2017 school year, bonuses awarded pursuant to subdivisions (1) and (2) of this subsection are payable in January of 2017 and January of 2018, respectively, to qualifying third grade teachers who remain employed teaching third grade in the same local school administrative unit at least from the school year the data is collected until the corresponding school year that the bonus is paid.

(4)        A teacher who is eligible to receive a bonus under both subdivisions (1) and (2) of this subsection shall receive both bonuses. The bonus or bonuses awarded to a teacher pursuant to this subsection shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

"SECTION 9.7.(b)  Notwithstanding G.S. 135‑1(7a), the compensation bonuses awarded by this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

"SECTION 9.7.(c)  The State Board of Education shall report on and study the Third Grade Reading Teacher Performance Pilot Program (Program) as follows:study the effect of the program on teacher performance and retention. The State Board shall report the results of its findings,

(1)        The State Board of Education shall report on the distribution of statewide bonuses as among local school administrative units units, and the distribution of bonuses within local school administrative units as among individual schools to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division on March 1, 2017, and again on March 1, 2018.15 of each year.

(2)        The State Board of Education shall study the effect of the Program on teacher performance and retention. The State Board of Education shall report the results of its findings to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee no later than March 1, 2018.

"SECTION 9.7.(d)  For the 2017‑2018 fiscal year only, the Director of the Budget shall also include in the Base Budget, as defined by G.S. 143C‑1‑1(d)(1c), the amount of nonrecurring funds needed to support the Program.program.

"SECTION 9.7.(e)  This section expires June 30, 2018."

SECTION 8.8B.(d)  This section applies beginning with bonuses awarded in January 2018.

 

THIRD GRADE READ TO ACHIEVE TEACHER BONUS PROGRAM FOR 2018‑2019

SECTION 8.8C.(a)  It is the intent of the State to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer the Third Grade Read to Achieve Teacher Bonus Program (program) for the 2018‑2019 fiscal year to qualifying teachers who have an Education Value‑Added Assessment System (EVAAS) student growth index score for third grade reading from the previous school year, as follows:

(1)        For purposes of this section, the following definitions shall apply:

a.         Eligible Teacher. – A teacher who meets one or both of the following criteria:

1.         Is in the top twenty‑five percent (25%) of teachers in the State according to the EVAAS student growth index score for third grade reading from the previous school year.

2.         Is in the top twenty‑five percent (25%) of teachers in the teacher's respective local school administrative unit according to the EVAAS student growth index score for third grade reading from the previous school year.

b.         Qualifying Teacher. – An eligible teacher who remains teaching in the same local school administrative unit at least from the school year the data for the EVAAS student growth index score for third grade reading is collected until the school year a bonus provided under this subsection is paid.

(2)        Of the funds appropriated for this program, the sum of five million dollars ($5,000,000) shall be allocated for bonuses to eligible teachers under sub‑sub‑subdivision (1)a.1. of this subsection. Funds appropriated for this purpose shall be distributed equally among qualifying teachers.

(3)        Of the funds appropriated for this program, the sum of five million dollars ($5,000,000) shall be allocated for bonuses to eligible teachers under sub‑sub‑subdivision (1)a.2. of this subsection. Funds allocated for this bonus shall be divided proportionally based on average daily membership in third grade for each local school administrative unit and then distributed equally among qualifying teachers in each local school administrative unit, subject to the following conditions:

a.         Teachers employed in charter schools, regional schools, and University of North Carolina laboratory schools are not eligible to receive a bonus under this subdivision.

b.         Any qualifying teacher who taught in a local school administrative unit that employed in the previous school year three or fewer total third grade teachers shall receive a bonus under this subdivision if that teacher has an EVAAS student growth index score for third grade reading from the previous school year of exceeded expected growth.

(4)        Bonuses awarded pursuant to subdivisions (2) and (3) of this subsection are payable in January to qualifying teachers based on EVAAS student growth index score data from the previous school year.

(5)        A qualifying teacher may receive a bonus under both subdivisions (2) and (3) of this subsection.

(6)        The bonus or bonuses awarded to a qualifying teacher pursuant to this section shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

(7)        A bonus awarded pursuant to either subdivision (2) or subdivision (3) of this subsection shall not exceed three thousand five hundred dollars ($3,500) in any given school year. No teacher shall receive more than seven thousand dollars ($7,000) in total bonus compensation for any given school year.

SECTION 8.8C.(b)  Notwithstanding G.S. 135‑1(7a), the bonuses awarded by this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

SECTION 8.8C.(c)  The State Board of Education shall study the effect of the bonuses awarded pursuant to this section and Section 9.7 of S.L. 2016‑94, as amended by Section 8.8B of this act, on teacher performance and retention. The State Board shall report the results of its findings, the distribution of statewide bonuses as among local school administrative units, and the distribution of bonuses within local school administrative units as among individual schools to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2019.

 

Fourth and Fifth Grade Reading Teacher Bonus Program for 2017‑2018

SECTION 8.8D.(a)  It is the intent of the State to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer the Fourth and Fifth Grade Reading Teacher Bonus Program (program) for the 2017‑2018 fiscal year to qualifying teachers who have an Education Value‑Added Assessment System (EVAAS) student growth index score for fourth or fifth grade reading from the previous school year, as follows:

(1)        For purposes of this section, the following definitions shall apply:

a.         Eligible Teacher. – A teacher who meets one or both of the following criteria:

1.         Is in the top twenty‑five percent (25%) of teachers in the State according to the EVAAS student growth index score for fourth or fifth grade reading from the previous school year.

2.         Is in the top twenty‑five percent (25%) of teachers in the teacher's respective local school administrative unit according to the EVAAS student growth index score for fourth or fifth grade reading from the previous school year.

b.         Qualifying Teacher. – An eligible teacher who remains teaching in the same local school administrative unit at least from the school year the data for the EVAAS student growth index score is collected until the school year a bonus provided under this subsection is paid.

(2)        Of the funds appropriated for this program, the Department of Public Instruction shall allocate the sum of four million seven hundred thirty‑five thousand four hundred sixteen dollars ($4,735,416) to award a bonus in the amount of two thousand one hundred fifty dollars ($2,150) to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision (1)a.1. of this subsection.

(3)        Of the funds appropriated for this program, the Department of Public Instruction shall allocate the sum of four million seven hundred thirty‑five thousand four hundred sixteen dollars ($4,735,416) to award a bonus in the amount of two thousand one hundred fifty dollars ($2,150) to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision (1)a.2. of this subsection, subject to the following conditions:

a.         Teachers employed in charter schools, regional schools, and University of North Carolina laboratory schools are not eligible to receive a bonus under this subdivision.

b.         Any qualifying teacher who taught in a local school administrative unit that employed in the previous school year three or fewer total teachers in the qualifying teacher's grade level shall receive a bonus under this subdivision if that teacher has an EVAAS student growth index score for fourth or fifth grade reading from the previous school year of exceeded expected growth.

(4)        Bonuses awarded pursuant to subdivisions (2) and (3) of this subsection are payable in January to qualifying teachers based on EVAAS student growth index score data from the previous school year.

(5)        A qualifying teacher may receive a bonus under both subdivisions (2) and (3) of this subsection.

(6)        The bonus or bonuses awarded to a qualifying teacher pursuant to this section shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

(7)        No teacher shall receive more than two bonuses pursuant to this section.

SECTION 8.8D.(b)  Notwithstanding G.S. 135‑1(7a), the bonuses awarded by this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

SECTION 8.8D.(c)  The State Board of Education shall study the effect of the bonuses awarded pursuant to this section on teacher performance and retention. The State Board shall report the results of its findings, the distribution of statewide bonuses as among local school administrative units, and the distribution of bonuses within local school administrative units as among individual schools to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2018.

 

Fourth to Eighth Grade Math Teacher Bonus Program for 2017‑2018

SECTION 8.8E.(a)  It is the intent of the State to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer the Fourth to Eighth Grade Mathematics Teacher Bonus Program (program) for the 2017‑2018 fiscal year to qualifying teachers who have an Education Value‑Added Assessment System (EVAAS) student growth index score for fourth, fifth, sixth, seventh, or eighth grade mathematics from the previous school year, as follows:

(1)        For purposes of this section, the following definitions shall apply:

a.         Eligible Teacher. – A teacher who meets one or both of the following criteria:

1.         Is in the top twenty‑five percent (25%) of teachers in the State according to the EVAAS student growth index score for fourth, fifth, sixth, seventh, or eighth grade mathematics from the previous school year.

2.         Is in the top twenty‑five percent (25%) of teachers in the teacher's respective local school administrative unit according to the EVAAS student growth index score for fourth, fifth, sixth, seventh, or eighth grade mathematics from the previous school year.

b.         Qualifying Teacher. – An eligible teacher who remains teaching in the same local school administrative unit at least from the school year the data for the EVAAS student growth index score is collected until the school year a bonus provided under this subsection is paid.

(2)        Of the funds appropriated for this program, the Department of Public Instruction shall allocate the sum of seven million nine hundred thirty‑five thousand one hundred seventy‑eight dollars ($7,935,178) to award a bonus in the amount of two thousand one hundred fifty dollars ($2,150) to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision (1)a.1. of this subsection.

(3)        Of the funds appropriated for this program, the Department of Public Instruction shall allocate the sum of seven million nine hundred thirty‑five thousand one hundred seventy‑eight dollars ($7,935,178) to award a bonus in the amount of two thousand one hundred fifty dollars ($2,150) to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision (1)a.2. of this subsection, subject to the following conditions:

a.         Teachers employed in charter schools, regional schools, and University of North Carolina laboratory schools are not eligible to receive a bonus under this subdivision.

b.         Any qualifying teacher who taught in a local school administrative unit that employed in the previous school year three or fewer total teachers in the qualifying teacher's grade level shall receive a bonus under this subdivision if that teacher has an EVAAS student growth index score for fourth, fifth, sixth, seventh, or eighth grade mathematics from the previous school year of exceeded expected growth.

(4)        Bonuses awarded pursuant to subdivisions (2) and (3) of this subsection are payable in January to qualifying teachers based on EVAAS student growth index score data from the previous school year.

(5)        A qualifying teacher may receive a bonus under both subdivisions (2) and (3) of this subsection.

(6)        The bonus or bonuses awarded to a qualifying teacher pursuant to this section shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive.

(7)        No teacher shall receive more than two bonuses pursuant to this section.

SECTION 8.8E.(b)  Notwithstanding G.S. 135‑1(7a), the bonuses awarded by this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

SECTION 8.8E.(c)  The State Board of Education shall study the effect of the bonuses awarded pursuant to this section on teacher performance and retention. The State Board shall report the results of its findings, the distribution of statewide bonuses as among local school administrative units, and the distribution of bonuses within local school administrative units as among individual schools to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by March 15, 2018.

 

SCHOOL BUS DRIVER COMPENSATION AND EMPLOYMENT STUDY

SECTION 8.10.  The Department of Public Instruction shall study the compensation of school bus drivers in the public schools and the challenges of recruiting and retaining school bus drivers. No later than April 1, 2018, the Department shall submit to the Joint Legislative Education Oversight Committee and the Fiscal Research Division a report containing, at a minimum, all of the following information:

(1)        A detailed explanation of how school bus drivers are compensated and employed in the public schools, including, at a minimum, the following information:

a.         Average driving experience of school bus drivers.

b.         Rates of retention of school bus drivers in local school administrative units.

c.         Average term of service for school bus drivers.

d.         Average hours worked by school bus drivers, per week.

e.         Career paths for school bus drivers within a local school administrative unit.

f.          Percentage of school bus drivers who work in the local school administrative unit in another capacity.

(2)        The challenges of recruiting and retaining school bus drivers faced by local school administrative units.

(3)        Recommendations, including input from local school administrators, on improving the process of recruiting and retaining school bus drivers.

 

PART IX. COMMUNITY COLLEGES

 

REORGANIZATION OF THE COMMUNITY COLLEGES SYSTEM OFFICE

SECTION 9.1.(a)  Notwithstanding any other provision of law and consistent with the authority established in G.S. 115D‑3, the President of the North Carolina Community College System may reorganize the System Office in accordance with recommendations and plans submitted to and approved by the State Board of Community Colleges.

SECTION 9.1.(b)  By April 1, 2018, the President of the North Carolina Community Colleges shall report any reorganization, including any movement of positions and funds between fund codes on a recurring basis, to the Joint Legislative Education Oversight Committee, the House Appropriations Committee on Education, the Senate Appropriations Committee on Education/Higher Education, and the Fiscal Research Division.

SECTION 9.1.(c)  Subsection (a) of this section expires June 30, 2018.

 

CARRYFORWARD OF COLLEGE INFORMATION SYSTEM FUNDS

SECTION 9.2.(a)  Of the funds appropriated to the Community Colleges System Office for the 2017‑2019 fiscal biennium for the College Information System, up to one million two hundred fifty thousand dollars ($1,250,000) shall not revert at the end of each fiscal year but shall remain available until expended. These funds may be used only to purchase periodic system upgrades and modernize the North Carolina Community College System's enterprise resource planning (ERP) system.

SECTION 9.2.(b)  The President of the North Carolina Community Colleges System shall work with the Friday Institute for Educational Innovation at North Carolina State University, the Government Data Analytics Center, and other State agencies to improve communication between computer systems. The President shall ensure, to the extent practicable, that its updated computer systems are able to share data with computer systems at the Department of Public Instruction, other State agencies, and constituent institutions of The University of North Carolina.

 

COMMUNITY COLLEGE WORKFORCE STUDY

SECTION 9.3.(a)  The State Board of Community Colleges shall study the costs of workforce training and academic instruction delivered by the community colleges. The study shall assess, at minimum, the various factors that affect instructional costs in these courses, including specialized equipment requirements, faculty salaries, and space requirements.

SECTION 9.3.(b)  By September 1, 2018, the State Board shall submit a report to the Office of State Budget and Management, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee on the results of the study, including any recommendations on the calculation of tiered funding rates and the classification of courses by tier.

 

START‑UP FUNDS FOR HIGH‑COST WORKFORCE COURSES

SECTION 9.5.(a)  The State Board of Community Colleges shall establish the Community College High‑Cost Workforce Program Grant to allocate funds to community colleges to establish new high‑cost workforce Tier 1A and Tier 1B courses that require significant start‑up funds. The State Board shall adopt an application process for community colleges to apply for the award of funds to establish new courses beginning with the 2018‑2019 fiscal year. To be eligible to receive the funds, community colleges shall submit to the State Board a completed application, which shall include at least the following information:

(1)        A description of the proposed program of study.

(2)        An impact assessment of implementing the proposed course on existing programs at contiguous colleges.

(3)        Documentation of student interest in the course.

(4)        Alignment of the course with the future employment needs within the area served by the community college and the State.

SECTION 9.5.(b)  The State Board of Community Colleges shall submit a report to the Joint Legislative Education Oversight Committee by March 1, 2019, on the implementation of the new high‑cost workforce Tier 1A and Tier 1B courses, including at least the following information:

(1)        The use of funds by community colleges participating in the grant program, including:

a.         Start‑up costs to establish new courses.

b.         Costs associated with student instruction, including faculty salaries, instructional supplies, and related instructional equipment.

(2)        Evaluation of the success of the community college courses, including:

a.         Student enrollment numbers.

b.         Student outcomes, including job attainment and placement data and completion of any certification, diploma, or associate degree programs.

 

SELECTION OF LOCAL COMMUNITY COLLEGE PRESIDENTS/CONSULTANT CONTRACTS

SECTION 9.7.(a)  G.S. 115D‑20(1) reads as rewritten:

"(1)      To elect a president or chief administrative officer of the institution for such term and under such conditions as the trustees may fix, such fix. If the board of trustees chooses to use a search consultant to assist with the election process, the board of trustees shall select the search consultant through a competitive request for proposals process. A search consultant selected pursuant to this subdivision who is collecting a fee for the consultant's services shall not be (i) an employee of a State agency, department, or institution, an appointed member of a State commission or board, or an elected official whose responsibilities include oversight or budgetary aspects of the Community College System, (ii) a lobbyist or lobbyist principal as defined in G.S. 120C‑100, or (iii) a State‑level community college board of trustees association or organization. A contract with a search consultant pursuant to this subdivision shall not be subject to Article 3C of Chapter 143 of the General Statutes. The election to of a president or chief administrative officer shall be subject to the approval of the State Board of Community Colleges."

SECTION 9.7.(b)  This section applies to consultant contracts entered into on or after the date this act becomes law.

 

CLARIFY YOUTH APPRENTICESHIP PROGRAM

SECTION 9.8.(a)  G.S. 115D‑5(b)(16) reads as rewritten:

"(16)    Courses provided to students who are participating in an a pre‑apprenticeship or apprenticeship program that meets all of the following criteria:

a.         Meets one of the following:

1.         Is a registered apprenticeship program recognized by the United States Department of Labor.

2.         Is a pre‑apprenticeship program recognized and approved by the State agency administering the statewide apprenticeship program.

b.         Has a documented plan of study with courses relating to a job‑specific occupational or technical skill.

c.         Requires the participants in the program to be North Carolina high school students when entering the program."

SECTION 9.8.(b)  This section applies retroactively beginning with the 2016 fall academic term.

 

CATAWBA VALLEY CC/MANUFACTURING CENTER

SECTION 9.9.  Chapter 115D of the General Statutes is amended by adding a new Article to read:

"Article 5B.

"Manufacturing Solutions Center at Catawba Valley Community College.

"§ 115D‑67.10.  Purpose of the Center.

The purpose of the Manufacturing Solutions Center at Catawba Valley Community College is to create and maintain jobs in North Carolina through support of traditional and emerging industries. The Center's services include training, testing, market development, entrepreneur support, product sourcing, prototyping, applied research, and managing a manufacturing business incubator.

"§ 115D‑67.11.  Director and other Center personnel.

The president of the Catawba Valley Community College shall appoint an individual to serve as the executive director of the Manufacturing Solutions Center. The executive director shall select other personnel of the Center, subject to the approval by the president of the Catawba Valley Community College. The executive director and other personnel of the Center are employees of Catawba Valley Community College and are subject to the personnel policies of the community college.

"§ 115D‑67.12.  Fees collected by the Center; use of Center funds.

Notwithstanding any other provision of law, all fees collected by the Manufacturing Solutions Center for services to industry, except for regular curriculum and continuing education tuition receipts, shall be retained by the Center and used for the operations of the Center. Purchases made by the Center using these funds are not subject to the provisions of Article 3 of Chapter 143 of the General Statutes. However, the Center shall (i) notify the Secretary of the Department of Administration or the Secretary's designee of the intent to enter into a contract for supplies, materials, printing, equipment, and contractual services that exceeds one million dollars ($1,000,000) as provided in G.S. 114‑8.3 and (ii) include in all agreements or contracts to be awarded by the Center under this section a standard clause which provides that the State Auditor and internal auditors of the Center may audit the records of the contractor during and after the term of the contract to verify accounts and data affecting fees and performance. The Center shall not award a cost plus percentage of cost agreement or contract for any purpose."

 

HS STUDENTS/NON‑CREDIT COURSES LEADING TO INDUSTRY CREDENTIALS

SECTION 9.10.(a)  G.S. 115D‑5(b)(12) reads as rewritten:

"(12)    All curriculum courses taken by high school students at community colleges, in accordance with G.S. 115D‑20(4) and this section."

SECTION 9.10.(b)  G.S. 115D‑20(4)a.2. reads as rewritten:

"2.        Academic transition pathways for qualified junior and senior high school students that lead to a career technical education certificate or diploma certificate, diploma, or State or industry‑recognized credential and academic transition pathways for qualified freshmen and sophomore high school students that lead to a career technical education certificate or diploma in (i) industrial and engineering technologies, (ii) agriculture and natural resources, or (iii) transportation technology."

SECTION 9.10.(c)  G.S. 115D‑5 is amended by adding a new subsection to read:

"(b2)    Beginning February 1, 2018, and annually thereafter, the State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on the number and type of waivers granted pursuant to subsection (b) of this section."

SECTION 9.10.(d)  This section applies beginning with the 2017‑2018 academic year.

 

ESTABLISH BOARD OF POSTSECONDARY EDUCATION CREDENTIALS

SECTION 9.11.(a)  Chapter 115D of the General Statutes is amended by adding a new Article to read:

"Article 9.

"Postsecondary Education Credentials.

"§ 115D‑100.  Board of Postsecondary Education Credentials.

(a)        Findings. – The General Assembly finds that, in today's economy, opportunities for North Carolina's citizens to reach the middle class with a high school level education or even less have significantly decreased. To be competitive and obtain better paying jobs that lead to a better quality of life in the State's current and future economy, most citizens will need some type of postsecondary education that qualifies them for employment. The General Assembly recognizes the importance of bringing together potential employers and providers of postsecondary education for the purpose of identifying workforce skills and training needs and developing courses of study and vocational training that meet the standards expected and required by industries, corporations, and other employers. The General Assembly further finds that the establishment of a permanent board with members who are knowledgeable about postsecondary education and workforce training needs will enable providers of postsecondary education to prepare and design training programs that are responsive to workforce needs and that will assist the State's citizens in securing the credentials required to obtain better paying jobs.

The General Assembly recognizes that postsecondary education opportunities should be easily available and accessible to all citizens. Therefore, the General Assembly encourages State educators, when designing the method and manner for delivering postsecondary educational programs, to take into account the varying income levels and economic circumstances of the State's citizens, transportation needs, and other unique challenges in both urban and rural areas of the State that affect accessibility to postsecondary education opportunities and to make genuine efforts to accommodate and address those factors.

The General Assembly also finds that most employers consider postsecondary credentials such as academic degrees and high‑quality, nondegree certifications awarded by institutions of higher education when determining whether a person has the expertise and skills required for a job. However, high‑quality credentials may also be obtained through other alternative models such as open‑source online programs, on‑the‑job training, and military experience. Therefore, it is essential that a system also be devised in which the meaning and validity of postsecondary credentials is clear and understandable to educators, employers, and students and that accurately conveys the knowledge, skills, and training obtained by an individual however and wherever it is obtained.

(b)        Board Established. – There is established the Board of Postsecondary Education Credentials to be located administratively under the Community Colleges System Office; however, the Board shall exercise all its prescribed powers independently of the Community Colleges System Office. The Board shall consist of the following members:

(1)        The Lieutenant Governor.

(2)        The President of The University of North Carolina or the President's designee.

(3)        The President of the North Carolina Community College System or the President's designee.

(4)        The Superintendent of Public Instruction or the Superintendent's designee.

(5)        The Commissioner of Labor or the Commissioner's designee.

(6)        The Secretary of Commerce or the Secretary's designee.

(7)        The President of North Carolina Independent Colleges and Universities or the President's designee.

(8)        The Executive Director of the Office of Proprietary Schools or the Executive Director's designee.

(9)        The President of the North Carolina Hospital Association or the President's designee.

(10)      The Executive Director of the North Carolina State Education Assistance Authority or the Executive Director's designee.

(c)        Purpose. – The purpose of the Board is to review and make recommendations for the development of a statewide system of postsecondary education that links industry, corporations, and businesses in this State with educators, government, and community organizations to identify workforce skills and training needs and to ensure that appropriate courses of study and vocational training are available to North Carolinians, including those preparing to pursue postsecondary education, entering the workforce, or seeking to update skills and training for purposes of retaining employment and advancing in the workforce.

In addition, the Board shall identify alternative ways in which people gain valuable workforce skills and experience, such as on‑the‑job training, that are not represented by four‑year or two‑year degrees and the types of credentials used to signify competence of a certain level upon successful completion of the alternative training experience. The Board shall review and make recommendations on those criteria to be used to determine the value of a nondegree credential, the competencies that it represents, and how it should be compared and valued with regard to other types of postsecondary credentials.

(d)       Duties. – The duties of the Board include the following:

(1)        Recommend State goals and a framework for achieving those goals among educators to ensure that, by 2025, the appropriate percentage, as recommended by the Board, of the State's adult citizens will hold degrees, certificates, or other high‑quality postsecondary credentials. The Board shall recommend a division of responsibility among The University of North Carolina System, the State's Community College System, and any other providers of postsecondary education credentials for achieving the goals recommended by the Board. The Board shall periodically review the progress made toward the recommended goals, evaluate the strategies developed and used toward attaining those goals, and may make additional recommendations.

(2)        Identify the credentials that are acceptable for meeting those recommended goals and recommend how the responsibility for providing the courses of study and training for those credentials should be assigned among the State's educators and others. In making these recommendations, consideration shall be given to the fact that the individuals who need these courses of study and training are of various economic levels and are also located in rural areas and metropolitan areas across the State. These factors shall be taken into account with regard to the location and delivery of the courses of study and training programs.

(3)        Address the issue of postsecondary credentials, the various levels of skill and knowledge those credentials signify, and how to accurately convey that information to employers, students and trainees, and providers of postsecondary education. The Board shall consider procedures and methods for recognizing skills and training needed in the workforce that an individual may have obtained through military experience, through on‑the‑job and employee‑proved training, or through other life experiences.

(e)        Chair. – The Lieutenant Governor shall serve as Chair of the Board.

(f)        Hire Staff and Consultants. – To the extent of funds available, the Chair of the Board may, with the approval of the Board, hire staff or consultants to assist the Board in carrying out its purpose and duties.

(g)        Travel and Subsistence. – Members, staff, and consultants of the Board shall receive travel and subsistence expenses in accordance with the provisions of G.S. 138‑5 or G.S. 138‑6, as appropriate.

(h)        Meeting Space. – With the approval of the Legislative Services Commission, space in the Legislative Building and the Legislative Office Building may be made available to the Board.

(i)         Frequency of Meetings and Quorum. – The Board shall meet upon the call of the Chair and shall have its first meeting no later than October 1, 2017. The Board shall meet at least quarterly. A majority of the members of the Board shall constitute a quorum for the transaction of business.

(j)         Reporting Requirement. – The Board shall submit to the Joint Legislative Education Oversight Committee an initial report no later than March 1, 2018, regarding the goals recommended by the Board pursuant to this section and the progress made toward meeting those goals. The Board shall submit a progress report to the Committee no later than March 1, 2019, regarding the progress made toward meeting the goals. The reports shall include any recommendations by the Board regarding legislation needed to implement this section."

SECTION 9.11.(b)  Subsection (a) of this section expires June 30, 2019.

SECTION 9.11.(c)  Of the funds appropriated by this act for the 2017‑2019 fiscal biennium to the Community Colleges System Office, the sum of three hundred fifty thousand dollars ($350,000) for the 2017‑2018 fiscal year and the sum of three hundred fifty thousand dollars ($350,000) for the 2018‑2019 fiscal year shall be allocated to the Board of Postsecondary Education Credentials to be used to cover operating expenses of the Board, including expenses for staff and consultants to assist the Board in carrying out its purpose and duties.

 

INVEST IN SHORT‑TERM WORKFORCE TRAINING

SECTION 9.14.(a)  Of the funds appropriated by this act to the Community Colleges System Office for the 2017‑2018 fiscal year, the System Office shall allocate funds to community colleges to support short‑term workforce training courses leading to industry credentials. The State Board of Community Colleges shall adopt an application process for community colleges to apply to receive these funds. These funds shall be allocated at the same full‑time equivalent (FTE) value as curriculum courses.

SECTION 9.14.(b)  By April 1, 2018, the State Board of Community Colleges shall submit a report on the implementation of this section to the Joint Legislative Education Oversight Committee, the House Appropriations Committee on Education, the Senate Appropriations Committee on Education/Higher Education, the Fiscal Research Division, and the Office of State Budget and Management.

 

RESTRICTION ON A CULINARY SCHOOL OR PROGRAM LOCATED OFF THE MAIN CAMPUS OF STANLY COMMUNITY COLLEGE

SECTION 9.15.(a)  G.S. 115D‑31(b1) reads as rewritten:

"(b1)    A local community college may use all State funds allocated to it, except for Literacy funds and Customized Training funds, for any authorized purpose that is consistent with the college's Institutional Effectiveness Plan.Plan, except that the State funds shall not be used to fund a culinary program located at a site other than the main campus of the college. The State Board of Community Colleges may authorize a local community college to use up to twenty percent (20%) of the State Literacy funds allocated to it to provide employability skills, job‑specific occupational and technical skills, and developmental education instruction to students concurrently enrolled in an eligible community college literacy course.

Each local community college shall include in its Institutional Effectiveness Plan a section on how funding flexibility allows the college to meet the demands of the local community and to maintain a presence in all previously funded categorical programs."

SECTION 9.15.(b)  Beginning with the 2017‑2018 fiscal year and subsequent fiscal years thereafter, the Stanly Community College Board of Trustees shall not operate a culinary school or program at a site other than on the main campus of Stanly Community College.

SECTION 9.15.(c)  Subsection (a) of this section applies only to Stanly Community College.

 

PART X. UNIVERSITIES

 

FULL‑TIME STAFF FOR BOARD OF GOVERNORS

SECTION 10.1.  G.S. 116‑11 is amended by adding a new subdivision to read:

"(2a)    The Board of Governors of The University of North Carolina may hire staff members deemed necessary by the Board to report directly to the Board. The Board of Governors shall determine the job titles, responsibilities, and salaries and benefits for all staff members hired by and reporting directly to the Board. Salaries and benefits for staff members hired pursuant to this subdivision shall be competitive with other positions of similar level and authority within The University of North Carolina System.

When the Board of Governors hires a staff member pursuant to this subdivision, the Board shall submit a report within 60 days of the date of employment to the Joint Legislative Education Oversight Committee that provides at least the following information regarding the position: job title, description of the position, responsibilities that accompany the position, salary and benefits, and supervisor, if any, of the position."

 

ELIZABETH CITY STATE UNIVERSITY BUDGET STABILIZATION FUNDS REPORT

SECTION 10.2.  The President of The University of North Carolina shall report each quarter of the 2017‑2019 fiscal biennium to the Office of State Budget and Management and the Fiscal Research Division of the General Assembly on the status of budget stabilization funds appropriated to Elizabeth City State University by this act for the purpose of supporting temporary faculty, aviation science programs, and student success initiatives. The reports shall provide detailed descriptions of the scope of work that has been completed to date, anticipated activities for the next quarter, and a plan with time lines to complete the full scope of work. The reports shall also include outcomes achieved from improvements implemented using these funds. The first quarterly report required by this section shall be made no later than January 1, 2018.

 

INCREASE NUMBER OF MEDICAL STUDENT SLOTS

SECTION 10.3.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2017‑2018 fiscal year, a sum of at least one million dollars ($1,000,000) shall be used to increase the number of available medical student slots at the School of Medicine.

 

EXTEND CHALLENGE GRANT FOR COLLABORATORY AT UNC‑CHAPEL HILL

SECTION 10.4.(a)  Section 27.5 of S.L. 2016‑94 reads as rewritten:

"SECTION 27.5. Of the funds appropriated in this act to the Office of State Budget and Management, Special Appropriations, up to the sum of three million five hundred thousand dollars ($3,500,000) in nonrecurring funds for the 2016‑2017 fiscal year shall be allocated to the Board of Trustees of the University of North Carolina at Chapel Hill for operation of the North Carolina Policy Collaboratory. Allocations made pursuant to this section shall be matched by the Board of Trustees on the basis of one dollar ($1.00) in allocated funds for every one dollar ($1.00) in non‑State funds that the Board of Trustees raises by June 30, 2017,North Carolina Policy Collaboratory raises, or for every one dollar ($1.00) of fair market value for donations‑in‑kind of goods or services from non‑State entities to the Collaboratory, by June 30, 2019, for the purposes of operating the Collaboratory. Allocations made pursuant to this section shall also be eligible to match non‑State funds for research to be conducted by the Collaboratory so long as the non‑State‑to‑State ratio is equal to or greater than 2:1. These funds shall be in addition to any other funds appropriated in this act for the North Carolina Policy Collaboratory at the University of North Carolina at Chapel Hill. Availability of these matching funds shall not revert but shall continue to be available as provided by this section, and any funds disbursed as a match to the Collaboratory shall not revert and shall continue to remain available."

SECTION 10.4.(b)  This section becomes effective June 30, 2017.

 

WESTERN SCHOOL OF ENGINEERING AND TECHNOLOGY FUNDS

SECTION 10.5.(a)  Funds appropriated for project management and curriculum development at the Western School of Engineering and Technology which was funded in the Connect NC Bond for the 2016‑2017 fiscal year shall not revert and shall remain available for the 2017‑2019 fiscal biennium for the purpose of project management and curriculum development.

SECTION 10.5.(b)  This section becomes effective June 30, 2017.

 

ENHANCE UNC DATA SYSTEMS TO IMPROVE INSTITUTIONAL PERFORMANCE AND STUDENT SUCCESS

SECTION 10.6.(a)  The Board of Governors of The University of North Carolina shall use funds appropriated to the Board by this act to modernize business processes, increase standardization, and maximize State resources. The investment will enable better financial management of The University of North Carolina and should yield, at a minimum, but not limited to, cost‑per‑unit analysis, predictive modeling, and more timely access to actionable information. Funds shall also be used to enhance data systems for the following purposes: integrating financial, human resource, and student account systems across The University of North Carolina System; developing new data collections systems that track faculty and staff retention rates and post‑graduation student outcomes; and expanding "Know Before You Go" data reporting.

SECTION 10.6.(b)  The President of The University of North Carolina shall submit an initial report to the Joint Legislative Education Oversight Committee by March 1, 2018, regarding the plan to implement subsection (a) of this section and a progress report by March 1, 2019, regarding the status of the implementation of the projects. The initial report shall include at least the information set out in subdivisions (1) through (6) of this subsection for both the data modernization and integration (DMI) project and for the enterprise resource planning (ERP) modernization project. The following information shall be set out separately for each project.

(1)        The challenges and specific goals of the project. In addition, the outcomes expected from the project shall be specifically identified.

(2)        The management structure to be used in managing, operating, and executing the project. The report shall indicate whether a post‑project completion governance structure is needed to provide (i) oversight for the systems created for each project and (ii) service of the systems for each project. The report shall also indicate whether any additional funds may be needed to maintain the DMI systems created after initial completion and to maintain the ERP systems created after initial completion.

(3)        The sources and target for movement and transformation of data being sought to achieve the project's goals.

(4)        The proposed technical implementation plan for the project, including a description of the technical details of how the project will be implemented in the context of a specific set of vendor products and platforms. The proposed technical implementation plan shall also outline documented industry‑ and product‑specific best practices.

(5)        A detailed schedule for implementation and completion of the project.

(6)        Any additional information deemed relevant by the President or by the Committee.

 

UNC/ESCHEATS FUND FOR STUDENT FINANCIAL AID PROGRAMS

SECTION 10.7.(a)  The funds appropriated by this act from the Escheat Fund for the 2017‑2019 fiscal biennium for student financial aid shall be allocated in accordance with G.S. 116B‑7. Notwithstanding any other provision of Chapter 116B of the General Statutes, if the interest income generated from the Escheat Fund is less than the amounts referenced in this act, the difference may be taken from the Escheat Fund principal to reach the appropriations referenced in this act; however, under no circumstances shall the Escheat Fund principal be reduced below the sum required in G.S. 116B‑6(f). If any funds appropriated from the Escheat Fund by this act for student financial aid remain uncommitted aid as of the end of a fiscal year, the funds shall be returned to the Escheat Fund, but only to the extent the funds exceed the amount of the Escheat Fund income for that fiscal year.

SECTION 10.7.(b)  The State Education Assistance Authority (SEAA) shall conduct periodic evaluations of expenditures of the student financial aid programs administered by SEAA to determine if allocations are utilized to ensure access to institutions of higher learning and to meet the goals of the respective programs. The SEAA may make recommendations for redistribution of funds to the President of The University of North Carolina and the President of the Community College System regarding their respective student financial aid programs, who then may authorize redistribution of unutilized funds for a particular fiscal year.

 

UNC MANAGEMENT FLEXIBILITY REDUCTION

SECTION 10.8.(a)  The management flexibility reduction for The University of North Carolina shall not be allocated by the Board of Governors to the constituent institutions and affiliated entities using an across‑the‑board method but shall be done in a manner that recognizes the importance of the academic missions and differences among The University of North Carolina entities.

Before taking reductions in instructional budgets, the Board of Governors and the campuses of the constituent institutions shall consider all of the following:

(1)        Reducing State funding for centers and institutes, speaker series, and other nonacademic activities.

(2)        Faculty workload adjustments.

(3)        Restructuring of research activities.

(4)        Implementing cost‑saving span of control measures.

(5)        Reducing the number of senior and middle management positions.

(6)        Eliminating low‑performing, redundant, or low‑enrollment programs.

(7)        Using alternative funding sources.

(8)        Protecting direct classroom services.

The Board of Governors and the campuses of the constituent institutions also shall review the institutional trust funds and the special funds held by or on behalf of The University of North Carolina and its constituent institutions to determine whether there are monies available in those funds that can be used to assist with operating costs. In addition, the campuses of the constituent institutions also shall require their faculty to have a teaching workload equal to the national average in their Carnegie classification.

SECTION 10.8.(b)  In allocating the management flexibility reduction, no reduction in State funds shall be allocated in either fiscal year of the 2017‑2019 fiscal biennium to any of the following:

(1)        UNC Need‑Based Financial Aid.

(2)        North Carolina Need‑Based Scholarship.

(3)        Special Education Scholarships for Children with Disabilities.

(4)        North Carolina Personal Education Savings Accounts Program.

(5)        Opportunity Scholarship Program.

(6)        North Carolina State University Agricultural Research.

(7)        North Carolina School of Science and Mathematics.

(8)        University of North Carolina School of the Arts.

(9)        Any entity receiving less than one and one‑half percent (1.5%) of the annual net General Fund appropriation for The University of North Carolina.

(10)      Any budget expansion item funded by an appropriation to the Board of Governors of The University of North Carolina by this act for the 2017‑2019 fiscal biennium.

SECTION 10.8.(c)  The University of North Carolina shall report on the implementation of the management flexibility reduction in this section for the 2017‑2018 fiscal year to the Office of State Budget and Management and the Fiscal Research Division no later than April 1, 2018, and shall report on the implementation of the management flexibility reduction in this section for the 2018‑2019 fiscal year to the Office of State Budget and Management and the Fiscal Research Division no later than April 1, 2019.

The reports shall identify both of the following by campus:

(1)        The total number of positions eliminated by type (faculty/nonfaculty).

(2)        The low‑performing, redundant, and low‑enrollment programs that were eliminated.

 

FUTURE TEACHERS OF NORTH CAROLINA

SECTION 10.9.(a)  Article 1 of Chapter 116 of the General Statutes is amended by adding a new Part to read:

"Part 4B. Future Teachers of North Carolina.

"§ 116‑41.30.  Establishment of Future Teachers of North Carolina.

(a)        Purpose. – Future Teachers of North Carolina, hereinafter FTNC, is established to encourage high‑achieving high school students with strong academic, interpersonal, and leadership skills to consider teaching as a career.

(b)        Program. – FTNC shall be a program providing professional development and curricula for courses that provide a challenging introduction to teaching as a profession for high school students through courses offered by participating high schools in conjunction with college partners. FTNC courses shall include both content on pedagogy and the profession of teaching and field experiences for high school students.

"§ 116‑41.31.  Oversight of Future Teachers of North Carolina.

(a)        FTNC General Administration. – FTNC shall be administratively located in The University of North Carolina General Administration. The President shall select three constituent institutions with highly successful schools of education located in the western, central, and eastern regions of the State, respectively, to collaborate on development of curricula for FTNC and to provide professional development to high school teachers who will teach FTNC courses. The three constituent institutions shall also work with other constituent institutions and other institutions of higher education in the State to seek input in the development of curricula and professional development for FTNC and to create a network of college faculty to provide support to high schools offering FTNC courses.

(b)        FTNC Site Applications. – All high schools in the State are encouraged to offer FTNC courses to students. A high school shall apply to offer FTNC courses with the geographically appropriate constituent institution overseeing FTNC and shall ensure that all teachers teaching FTNC courses have received appropriate training. High schools shall also seek a partner institution of higher education to provide support from college faculty. High schools participating in the FTNC program shall report demographic, survey, and other available outcome data to The University of North Carolina General Administration as necessary for completion of the FTNC annual report required by G.S. 116‑41.32.

(c)        FTNC Institution of Higher Education Partners. – Constituent institutions that partner with high schools shall offer dual credit for high school students who successfully complete the FTNC course with a grade of "B" or higher. Other institutions of higher education that partner with high schools are encouraged to offer dual credit for high school students who successfully complete the FTNC course with a grade of "B" or higher. Constituent institutions shall provide annually to The University of North Carolina General Administration data on students who have received dual credit for completion of an FTNC course and students who applied for admission into an educator preparation program at a constituent institution who indicated in the application for admission that the student completed an FTNC course. Other institutions of higher education are encouraged to provide annually to The University of North Carolina General Administration data on students who have received dual credit for completion of an FTNC course and students who applied for admission into an educator preparation program at the institution of higher education who indicated in the application for admission that the student completed an FTNC course.

"§ 116‑41.32.  Future Teachers of North Carolina reporting.

The University of North Carolina General Administration shall report annually, beginning October 15, 2019, on the following:

(1)        Total number and names of local school administrative units with high schools participating in FTNC, total number and names of high schools offering FTNC, partner institution of higher education for each high school, and number of sections of the course being offered at each high school.

(2)        Demographic information of students enrolled in FTNC courses.

(3)        Percentage of students who, after completing the course, reported the following:

a.         The student plans to choose teaching as a profession.

b.         The course was very or somewhat effective in helping the student formulate a positive perception of the education profession.

c.         The coursework and activities increased the student's knowledge of the teaching profession and other careers in education.

d.         The field experience helped the student understand the many factors that contribute to effective teaching.

(4)        Percentage of students who completed an FTNC course who received dual credit for successful completion of the course, by institution.

(5)        Percentage of students who completed an FTNC course who applied for admission into an educator preparation program, by institution.

(6)        Number of teachers provided professional development for FTNC."

SECTION 10.9.(b)  The University of North Carolina General Administration shall report by October 15, 2018, on the number of site applications received, number of teachers provided professional development, number of local school administrative units and high schools offering FTNC, and number of sections of the course being offered for the 2018‑2019 school year.

SECTION 10.9.(c)  This section becomes effective July 1, 2017. The selected constituent institutions shall make available site applications and provide professional development to high school teachers no later than February 1, 2018.

 

UNC ENROLLMENT FUNDING/OSBM RESERVE ACCOUNT

SECTION 10.10.  Funds appropriated by this act for enrollment adjustments, including funds for the NC Promise Tuition Plan, shall be certified to a reserve account in the Office of State Budget and Management. The appropriation is made on an annual basis and shall be held in reserve until actual enrollment can be verified following the fall semester census. Funds for the spring semester shall be allocated using the actual enrollment from the fall semester and applying the three‑year average fall‑to‑spring retention of fundable credit hours. After verification, the Board of Governors, subject to the approval of the Director of the Budget, shall allocate the funds for the fiscal year to the constituent institutions based on the criteria set out in this section.

Upon authorization by the Director of the Budget, funds may be advanced to constituent institutions whose tuition receipts are insufficient to maintain operations until enrollment is verified. Any institutions receiving funds in advance shall report to the Office of State Budget and Management at the close of the semester to reconcile any differences between funding received for enrollment and actual enrollment. An allocation made pursuant to this section may result in an allocation to a constituent institution that is greater than or less than the amount originally requested for enrollment change funding at that institution. Pursuant to G.S. 116‑11(9)c., the Director of the Budget may, on recommendation of the Board, authorize transfer of appropriated funds from one institution to another to provide additional adjustments for over or under enrollment or may make any other adjustments among institutions that would provide for the orderly and efficient operation of institutions.

 

IN‑STATE TUITION FOR VETERANS/COMPLIANCE WITH FEDERAL LAW

SECTION 10.11.  G.S. 116‑143.3A reads as rewritten:

"§ 116‑143.3A.  Waiver of 12‑month residency requirement for certain veterans and other individuals entitled to federal education benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33.

(a)        Definitions. – The following definitions apply in this section:

(1)        Abode. – Has the same meaning as G.S. 116‑143.3(a)(1).

(2)        Armed Forces. – Has the same meaning as G.S. 116‑143.3(a)(2).

(3)        Veteran. – A person who served active duty for not less than 90 days in the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration and who was discharged or released from such service.

(b)        Waiver of 12‑Month Residency Requirement for Veteran. – Any veteran who qualifies for admission to an institution of higher education as defined in G.S. 116‑143.1(a)(3) is eligible to be charged the in‑State tuition rate and applicable mandatory fees for enrollment without satisfying the 12‑month residency requirement under G.S. 116‑143.1, provided the veteran meets all of the following criteria:

(1)        The veteran applies for admission to the institution of higher education and enrolls within three years of the veteran's discharge or release from the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration.

(2)        The veteran qualifies for and uses educational benefits pursuant to 38 U.S.C. Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance Program) or 38 U.S.C. Chapter 33 (Post‑9/11 Educational Assistance), as administered by the U.S. Department of Veterans Affairs.

(3)        The veteran's abode is North Carolina.

(4)        The veteran provides the institution of higher education at which the veteran intends to enroll a letter of intent to establish residence in North Carolina.

(c)        Eligibility of Other Individuals Entitled to Federal Educational Benefits Under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33. – Any person who is entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 is also eligible to be charged the in‑State tuition rate and applicable mandatory fees for enrollment without satisfying the 12‑month residency requirement under G.S. 116‑143.1, if the person meets all of the following criteria:

(1)        The person qualifies for admission to the institution of higher education as defined in G.S. 116‑143.1(a)(3) and and, with the exception of individuals described in subsections (c1) and (c2) of this section, enrolls in the institution of higher education within three years of the veteran's discharge or release from the Armed Forces, the Commissioned Corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration.

(2)        The person is the recipient of federal educational benefits pursuant to 38 U.S.C. Chapter 30 (Montgomery G.I. Bill Active Duty Education Assistance Program) or 38 U.S.C. Chapter 33 (Post‑9/11 Educational Assistance), as administered by the U.S. Department of Veterans Affairs.

(3)        The person's abode is North Carolina.

(4)        The person provides the institution of higher education at which the person intends to enroll a letter of intent to establish residence in North Carolina.

(c1)      Recipients using transferred Post‑9/11 GI Bill benefits (38 U.S.C. § 3319) while the transferor is on active duty in the Armed Forces, the commissioned corps of the U.S. Public Health Service, or the National Oceanic and Atmospheric Administration are eligible for the in‑State tuition rate, provided the recipient's abode is in North Carolina and the recipient provides the institution of higher education a letter of intent to establish residency in North Carolina.

(c2)      Recipients of the Marine Gunnery Sergeant John David Fry Scholarship (38 U.S.C. § 3311(b)(9)), whose parent or spouse died in the line of duty, without regard as to whether the death in the line of duty followed a period of active duty service of 90 days or more, are eligible to receive in‑State tuition under this section, provided the recipient's abode is in North Carolina and the recipient provides the institution of higher education a letter of intent to establish residency in North Carolina.

(d)       After the expiration of the three‑year period following discharge or death as described in 38 U.S.C. § 3679(c), any enrolled veteran entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 and any other enrolled individual described in subsection (c) of this section entitled to federal educational benefits under 38 U.S.C. Chapter 30 or 38 U.S.C. Chapter 33 who is eligible for in‑State tuition under this section shall continue to be eligible for the in‑State tuition rate so long as the covered individual remains continuously enrolled (other than during regularly scheduled breaks between courses, quarters, terms, or semesters) at that institution of higher education."

 

SENIOR CITIZENS MAY AUDIT COURSES AT UNC AND COMMUNITY COLLEGES

SECTION 10.12.(a)  Chapter 115B of the General Statutes is amended by adding a new section to read:

"§ 115B‑2.2.  Senior citizens may audit classes.

Any person who is at least 65 years old may audit courses offered at the constituent institutions of The University of North Carolina and the community colleges as defined in G.S. 115D‑2(2) without payment of any required registration fee or tuition for the audit provided the audit is approved in accordance with policies adopted by the Board of Governors and the State Board of Community Colleges for their respective institutions, and there is no cost to the State. A person shall be allowed to audit a class under this section only on a space available basis. Persons auditing classes under this section shall not be counted in the computation of enrollment for funding purposes. This section does not apply to audits of courses provided on a self‑supporting basis by community colleges."

SECTION 10.12.(b)  G.S. 115B‑4 reads as rewritten:

"§ 115B‑4.  Enrollment computation for funding purposes.

Persons Except as provided in G.S. 115B‑2.2, persons attending classes under the provisions of this Chapter, without payment of tuition, shall be counted in the computation of enrollment for funding purposes."

SECTION 10.12.(c)  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall adopt policies to implement this section.

SECTION 10.12.(d)  This section becomes effective July 1, 2017, and applies beginning with the 2017 fall academic semester.

 

STUDY/UNC EQUAL OPPORTUNITY COMPLIANCE OFFICERS

SECTION 10.13.(a)  The Board of Governors of The University of North Carolina shall study the equal opportunity policies, which include the policies related to diversity and nondiscrimination, adopted by each constituent institution, the implementation of those policies on each campus, and the services provided on each campus. In conducting the study, the Board of Governors shall review and evaluate the equal opportunity policies with a particular focus on transparency and effectiveness of the policies.

As part of the study, the Board of Governors shall direct each constituent institution to identify all staff positions on campus that include as part of the job duties any responsibility for the implementation, administration, or enforcement of policies intended to promote equal opportunity, diversity, or inclusiveness; indicate how those staff positions and the services offered through those positions fit within the organizational structure of the constituent institution; and indicate the direct and indirect costs related to those staff positions and services provided by those staff positions. This information shall include the number of part‑time and full‑time employees in these staff positions by each individual campus, descriptions of job duties of each of these employees, and the total costs of the positions.

The study shall also consider the feasibility of developing equal opportunity plans at each constituent institution that consolidate all equal opportunity services offered at each constituent institution into a single office headed by an equal employment officer designated by the Chancellor in order to promote effectiveness and efficiency.

SECTION 10.13.(b)  The Board of Governors of The University of North Carolina shall submit a report that includes its findings, recommendations, and policy changes to the Joint Legislative Education Oversight Committee by January 1, 2018. The Board of Governors shall approve the report prior to the submission to the Joint Legislative Education Oversight Committee.

 

BOARD OF GOVERNORS STUDIES/ESTABLISH SCHOOL OF HEALTH SCIENCES AND HEALTH CARE AT UNC‑PEMBROKE AND ESTABLISH PHYSICIAN ASSISTANT PROGRAM, CHIROPRACTIC MEDICINE PROGRAM, AND A PILOT PROGRAM FOR BASIC LAW ENFORCEMENT TRAINING AT WSSU

SECTION 10.14.(a)  The Board of Governors of The University of North Carolina shall study the feasibility of establishing a School of Health Sciences and Health Care at the University of North Carolina at Pembroke. In its study, the Board of Governors shall consider the health care needs of the region and what health science and health care programs would best serve the region and meet its health care needs. The Board of Governors shall also consider the costs and financial benefits of establishing a School of Health Sciences and Health Care.

The Board of Governors shall submit a report on the study, including its findings and recommendations, by March 1, 2018, to the members of the Senate and the House of Representatives, by filing a copy of the report with the Office of the President Pro Tempore of the Senate, the Office of the Speaker of the House of Representatives, and the Legislative Library.

SECTION 10.14.(b)  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina for the 2017‑2018 fiscal year, the Board may use up to one hundred thousand dollars ($100,000) to cover the costs of the study required by subsection (a) of this section.

SECTION 10.14.(c)  The Board of Governors of The University of North Carolina shall study the feasibility of establishing the following programs at Winston‑Salem State University: a Physician Assistant Program, a Chiropractic Medicine Program, and a pilot program for Basic Law Enforcement Training. In its study, the Board of Governors shall consider the costs and financial benefits of establishing these programs at Winston‑Salem State University.

The Board of Governors shall submit a report on the study, including its findings and recommendations, by March 1, 2018, to the members of the Senate and the House of Representatives, by filing a copy of the report with the Office of the President Pro Tempore of the Senate, the Office of the Speaker of the House of Representatives, and the Legislative Library.

 

UNC TO FUND NORTH CAROLINA RESEARCH CAMPUS

SECTION 10.15.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina, the Board of Governors shall use twenty‑nine million dollars ($29,000,000) for the 2017‑2018 fiscal year and twenty‑nine million dollars ($29,000,000) for the 2018‑2019 fiscal year to support UNC‑related activities at the North Carolina Research Campus at Kannapolis.

 

UNC COMPUTER COMPATIBILITY

SECTION 10.20.  The President of The University of North Carolina shall work with the Department of Information Technology to ensure, to the extent practicable, that The University of North Carolina computer systems are able to share data among computer systems at the constituent institutions, community colleges, Department of Public Instruction, and other State agencies.

 

UNC CYBERSECURITY

SECTION 10.21.(a)  The President of The University of North Carolina, in collaboration with the Department of Information Technology or other cybersecurity consultant selected by the President, shall review the existing security for the information technology systems and associated data of The University of North Carolina System to determine whether the cybersecurity and risk management services supporting the System's network are sufficient or whether expansion is needed. The review shall include an evaluation of all of the following: (i) continuous monitoring and risk assessment; (ii) security policy, implementation of security programs and effective security controls, and ongoing support for operating security governance; and (iii) security training and education services for faculty, staff, and administrators. The President shall take appropriate measures to address any potential problems or issues identified by the review.

SECTION 10.21.(b)  Each constituent institution shall conduct a review of the existing security for the information technology systems and associated data of the constituent institution to determine whether the cybersecurity and risk management services supporting the System's network are sufficient or whether expansion is needed. The review shall include an evaluation of (i) continuous monitoring and risk assessment; (ii) security policy, implementation of security programs and effective security controls, and ongoing support for operating security governance; and (iii) security training and education services for faculty, staff, and administrators. The Chancellor of the constituent institution shall take appropriate measures to address any potential problems or issues identified by the review.

 

MATCHING FUNDS FOR DEPARTMENT OF APPLIED PHYSICAL SCIENCES AT UNC‑CHAPEL HILL DO NOT REVERT

SECTION 10.23.(a)  Section 27.6 of S.L. 2016‑94 reads as rewritten:

"SECTION 27.6. Of the funds appropriated in this act to the Office of State Budget and Management, Special Appropriations, up to the sum of four million dollars ($4,000,000) in nonrecurring funds for the 2016‑2017 fiscal year shall be allocated to the Board of Trustees of the University of North Carolina at Chapel Hill for operation of the Department of Applied Physical Sciences. Allocations made pursuant to this section shall be matched by the Board of Trustees on the basis of one dollar ($1.00) in allocated funds for every one dollar ($1.00) in non‑State funds that the Board of Trustees raises by June 30, 2017,2019, for the purposes of operating the Department of Applied Physical Sciences. These funds shall not revert but shall continue to be available as matching funds for the 2017‑2019 fiscal biennium for the purposes of operating the Department of Applied Physical Sciences as provided by this section."

SECTION 10.23.(b)  This section becomes effective June 30, 2017.

 

FOOD SCIENCE INNOVation Advisory Committee

SECTION 10.24.(a)  There is created the Food Processing Innovation Center Committee (Committee), which shall be located administratively in the Department of Agriculture and Consumer Services. The Committee shall consist of 14 members, including:

(1)        The Commissioner of Agriculture or the Commissioner's designee, who will serve as chair.

(2)        The Secretary of Commerce or the Secretary's designee.

(3)        The President of the Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., or the President's designee.

(4)        Three members shall be appointed by the Speaker of the House of Representatives, at least one of whom shall be employed in the field of food manufacturing and at least one of whom shall be employed as a farmer or grower of crops.

(5)        Three members shall be appointed by the President Pro Tempore of the Senate, at least one of whom shall be employed in the field of food manufacturing and at least one of whom shall be employed as a farmer or grower of crops.

(6)        The Dean of the College of Agriculture and Life Science at North Carolina State University, or the Dean's designee.

(7)        The President of the Community Colleges System Office, or the President's designee.

(8)        The President and CEO of Economic Development Partnership of North Carolina (EDPNC), or the President's designee.

(9)        Agricultural Economist with expertise in food systems and agribusiness that could help in creation of a business plan for the initiative appointed upon the recommendation of the Commissioner of Agriculture.

(10)      One member who is a representative of the North Carolina Research Campus, who shall be a nonvoting member.

SECTION 10.24.(b)  The Committee shall study and make recommendations to the General Assembly on measures that will serve the following goals:

(1)        Increasing the employment and private capital investment in food manufacturing in North Carolina, with an emphasis on rural and economically distressed areas.

(2)        Increasing the use of North Carolina produced ingredients, agricultural products, equipment, and other products of food manufacturers located in this State.

(3)        Increasing the number and economic value of food manufacturing entrepreneurs and companies in North Carolina, with priority given to those entities located in rural and economically distressed areas.

(4)        Any other goal the Committee deems advantageous to the State.

SECTION 10.24.(c)  Appointments for all members shall be for terms of four years beginning within 30 days of when this act becomes law. Appointed members may be reappointed but shall not serve more than two consecutive terms of four years. Vacancies among appointed members shall be filled by the appointing entity and shall be for the remainder of the vacant term.

No member of the General Assembly, spouse of a member of the General Assembly, or officer or employee of the State shall be eligible to serve on the Committee as an appointed member.

The Committee shall meet at stated times established by the Committee but not less frequently than four times a year. Special meetings of the Committee may be set at any regular meeting or may be called by the chair. A majority of the appointed members of the Committee shall constitute a quorum for the transaction of business.

From funds available to the Department of Agriculture and Consumer Services, the Commissioner of Agriculture shall allocate monies to fund the work of the Committee. Members of the Committee shall receive subsistence and travel expenses, as provided in G.S. 120‑3.1 and G.S. 138‑5.

SECTION 10.24.(d)  Notwithstanding subsection (c) of this section, the six Committee members appointed pursuant to subdivisions (4) and (5) of subsection (a) of this section shall serve a first term beginning on the date of their designation and ending on December 31, 2020. Thereafter, they shall serve four‑year terms which shall begin on January 1, 2021.

SECTION 10.24.(e)  The Committee shall develop a business plan for the Food Processing Research Center at the North Carolina Research Campus (Center) to implement. The business plan required by this subsection shall include processes for designing and marketing the Center. Of the funds appropriated in this act to North Carolina State University for the Center, the University shall allocate not more than the sum of one hundred thousand dollars ($100,000) in nonrecurring funds for the 2017‑2018 fiscal year to the Committee to cover costs incurred by the Committee in developing a business plan required under this subsection. The business plan required under this subsection shall ensure all of the following:

(1)        The financial stability for the Center, including sources and uses for funds to operate the facility and maintain equipment for the Center.

(2)        The creation and implementation of revenue models that can be used to support the expenses of the facility with the goal of positioning the facility to ultimately cease to need State funds for continued operations.

(3)        The creation and implementation of policies that protect the State's investment in the initiative and provide for a return to the taxpayers by increasing job opportunities, private sector investment, and increased markets for value‑added agricultural products.

(4)        Any other provision the Committee deems necessary to carry out the intent and accomplish the goals established in this section.

Upon completion of the business plan required under this subsection, the Committee shall submit the business plan to the University.

SECTION 10.24.(f)  No less than 30 days prior to expending or encumbering any other funds provided in this act to the University for the Center, the University shall submit the business plan required under subsection (e) of this section to the Joint Legislative Commission on Government Operations.

SECTION 10.24.(g)  On or before September 1, 2018, and at least semiannually thereafter, the Committee shall submit a report to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources and the Fiscal Research Division with its activities, accomplishments, and recommendations based upon its study of the items listed in subsection (b) of this section.

SECTION 10.24.(h)  This section expires January 1, 2025.

 

ENERGY STORAGE STUDY

SECTION 10.25.  If House Bill 589, 2017 Regular Session, becomes law, then the North Carolina Policy Collaboratory (Collaboratory) at the University of North Carolina at Chapel Hill shall study energy storage technology as set forth in that act if the Collaboratory raises non‑State funds of at least seventy‑five thousand dollars ($75,000) to provide a one‑to‑one match from challenge grant funds administered by the Office of State Budget and Management as set forth in Section 27.5 of S.L. 2016‑94, as amended by this act.

 

ONE‑YEAR COLLEGE TUITION GRANTS FOR CERTAIN GRADUATES OF THE NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS WHO ATTEND A STATE UNIVERSITY

SECTION 10.26.(a)  Of the funds appropriated by this act to the Board of Governors for the 2017‑2018 fiscal year, the sum of one million five hundred thousand dollars ($1,500,000) shall be allocated to the State Education Assistance Authority to be held in reserve to provide tuition grants for one academic year to each State resident who graduates from the North Carolina School of Science and Mathematics at the end of the 2017‑2018 academic year and who enrolls as a full‑time student in a constituent institution of The University of North Carolina for the 2018‑2019 academic year. The amount of the grant awarded to each student shall cover the tuition cost at the constituent institution in which the student is enrolled.

SECTION 10.26.(b)  The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section. The State Education Assistance Authority shall not approve any grant until it receives proper certification from the appropriate constituent institution that the student applying for the grant is an eligible student. Upon receipt of the certification, the State Education Assistance Authority shall remit at the times it prescribes the grant to the constituent institution on behalf, and to the credit, of the student.

SECTION 10.26.(c)  Notwithstanding any other provision of this section, no tuition grant awarded to a student under this section shall exceed the cost of attendance at the constituent institution at which the student is enrolled. If a student, who is eligible for a tuition grant under this subsection, also receives a scholarship or other grant covering the cost of attendance at the constituent institution for which the tuition grant is awarded, then the amount of the tuition grant shall be reduced by an appropriate amount determined by the State Education Assistance Authority. The State Education Assistance Authority shall reduce the amount of the tuition grant so that the sum of all grants and scholarship aid covering the cost of attendance received by the student, including the tuition grant under this section, shall not exceed the cost of attendance for the constituent institution at which the student is enrolled. The cost of attendance, as used in this subsection, shall be determined by the State Education Assistance Authority for each constituent institution.

SECTION 10.26.(d)  The funds allocated by this section shall not revert at the end of the 2017‑2018 fiscal year but shall remain available until the end of the 2018‑2019 fiscal year to implement this section.

 

UNC/EXCELLENCE FUND FOR EXPERIENTIAL LEARNING AND LEADERSHIP DEVELOPMENT FOR THE RESERVE OFFICERS TRAINING CORPS

SECTION 10.27.  Of the funds appropriated by this act to the Board of Governors of The University of North Carolina, the sum of two hundred forty thousand dollars ($240,000) in nonrecurring funds for the 2017‑2018 fiscal year shall be allocated to the University of North Carolina at Chapel Hill to establish within the College of Arts and Sciences the Excellence Fund for Experiential Learning and Leadership Development for the Reserve Officers Training Corps. Subject to the approval of the Dean of the College of Arts and Sciences, monies from the Fund shall be used to support strategic investments in experiential learning and leadership development initiatives for UNC ROTC programs. The funds allocated under this section shall not revert at the end of the fiscal year but shall remain available to be expended as provided by this section.

 

UNC CORE/FUNDS FOR ACTIVE DUTY SERVICE MEMBERS AND VETERANS PROGRAMS

SECTION 10.28.(a)  The unexpended balance of the funds appropriated in the 2016‑2017 fiscal year for NC CORE in Budget Code 16020 shall not revert. Those funds shall be transferred to the Office of the Executive Vice Chancellor Provost at the University of North Carolina at Chapel Hill and shall be used to support programs for active duty service members and veterans at the University of North Carolina at Chapel Hill.

SECTION 10.28.(b)  This section becomes effective June 30, 2017.

 

SUBPART X‑A. UNIVERSITY/STATE EDUCATION ASSISTANCE AUTHORITY

 

SOFTWARE FOR ADMINISTRATION OF THE OPPORTUNITY SCHOLARSHIP AND SPECIAL EDUCATION SCHOLARSHIP PROGRAMS

SECTION 10A.1.(a)  Notwithstanding G.S. 115C‑562.8, of the funds appropriated by this act for the Opportunity Scholarship Grant Fund Reserve for the 2017‑2018 fiscal year, the State Education Assistance Authority (Authority) may use up to one million eight hundred thousand dollars ($1,800,000) in nonrecurring funds for the 2017‑2018 fiscal year to purchase software necessary to support the administration of the Opportunity Scholarship Grant Program and the Special Education Scholarships for Children with Disabilities Program. These funds may also be used for customization of the software, development of interfaces with other internal systems, conversion of data, and training for staff on the new software system.

SECTION 10A.1.(a1)  The Authority shall work with the Department of Information Technology to ensure, to the extent practicable, that the Authority's computer systems are able to share data among computer systems at The University of North Carolina and constituent institutions, the North Carolina Community College System, the Department of Public Instruction, and other State agencies.

SECTION 10A.1.(b)  The Authority shall report by October 1 of each year, beginning October 1, 2017, and ending October 1, 2018, to the Fiscal Research Division and the Joint Legislative Education Oversight Committee on the acquisition of software for administration of the program and all aspects of implementation of the software system and the expenditure of funds.

 

ELIMINATE SCHOOL SITE SCHOLARSHIP ENDORSEMENT REQUIREMENT

SECTION 10A.2.(a)  G.S. 115C‑112.6(b1)(1)a. reads as rewritten:

"a.        Scholarship endorsement for tuition. – The Authority shall remit, at least two times each school year, scholarship funds awarded to eligible students for endorsement by at least one of the student's parents or guardians for tuition to attend a nonpublic school that meets the requirements of Part 1 or Part 2 of Article 39 of this Chapter as identified by the Department of Administration, Division of Nonpublic Education, is deemed eligible by the Division, and is subject to the requirements of G.S. 115C‑562.5. The parent or guardian shall restrictively endorse the scholarship funds awarded to the eligible student to the school for deposit into the account of the school.nonpublic school to the credit of the eligible student. The parent or guardian shall not designate any entity or individual associated with the school as the parent's attorney‑in‑fact to endorse the scholarship funds but shall endorse the scholarship funds in person at the site of the school.funds. A parent's or guardian's failure to comply with this section shall result in forfeiture of the scholarship funds. A scholarship forfeited for failure to comply with this section shall be returned to the Authority to be awarded to another student."

SECTION 10A.2.(b)  G.S. 115C‑562.6 reads as rewritten:

"§ 115C‑562.6.  Scholarship endorsement.

The Authority shall remit, at least two times each school year, scholarship grant funds awarded to eligible students to the nonpublic school for endorsement by at least one of the student's parents or guardians. The parent or guardian shall restrictively endorse the scholarship grant funds awarded to the eligible student to the nonpublic school for deposit into the account of the nonpublic school.school to the credit of the eligible student. The parent or guardian shall not designate any entity or individual associated with the nonpublic school as the parent's attorney‑in‑fact to endorse the scholarship grant funds but shall endorse the scholarship grant funds in person at the site of the nonpublic school.funds. A parent's or guardian's failure to comply with this section shall result in forfeit of the scholarship grant. A scholarship grant forfeited for failure to comply with this section shall be returned to the Authority to be awarded to another student."

SECTION 10A.2.(c)  This section applies to scholarship funds awarded beginning with the 2017‑2018 school year.

 

NORTH CAROLINA TEACHING FELLOWS

SECTION 10A.3.(a)  Article 23 of Chapter 116 of the General Statutes is amended by adding a new Part to read:

"Part 3. North Carolina Teaching Fellows Program.

"§ 116‑209.60.  Definitions.

The following definitions apply in this Part:

(1)        Commission. – The North Carolina Teaching Fellows Commission.

(2)        Director. – The Director of the North Carolina Teaching Fellows Program.

(3)        Forgivable loan. – A forgivable loan made under the Program.

(4)        Program. – The North Carolina Teaching Fellows Program.

(5)        Public school. – An elementary or secondary school located in North Carolina that is governed by a local board of education, charter school board of directors, regional school board of directors, or University of North Carolina laboratory school board of trustees.

(6)        STEM. – Science, technology, engineering, and mathematics.

(7)        Trust Fund. – The North Carolina Teaching Fellows Program Trust Fund.

"§ 116‑209.61.  North Carolina Teaching Fellows Commission established; membership.

(a)        Commission Established. – There is established the North Carolina Teaching Fellows Commission. The Commission shall determine program and forgivable loan recipient selection criteria and selection procedures and shall select the recipients to receive forgivable loans under the North Carolina Teaching Fellows Program in accordance with the requirements of this Part. The Director of the North Carolina Teaching Fellows Program shall appoint staff to the Commission.

(b)        Membership. – The Commission shall consist of 14 members who shall be appointed or serve as ex officio members as follows:

(1)        The Board of Governors of The University of North Carolina shall appoint seven members to the Commission as follows:

a.         Two deans of approved schools of education at postsecondary constituent institutions of The University of North Carolina.

b.         The president of a North Carolina community college.

c.         A teacher who graduated from an approved educator preparation program located in the State within three years of appointment to serve on the Commission.

d.         A principal who graduated from an approved educator preparation program located in the State.

e.         A local board of education member.

f.          A member to represent business and industry in North Carolina.

(2)        The General Assembly shall appoint two members to the Commission in accordance with G.S. 120‑121 as follows:

a.         One dean of an approved school of education at a private postsecondary institution operating in the State upon the recommendation of the Speaker of the House of Representatives.

b.         One dean of an approved school of education at a private postsecondary institution operating in the State upon the recommendation of the President Pro Tempore of the Senate.

(3)        The following five members shall serve as ex officio members to the Commission:

a.         The North Carolina Teacher of the Year.

b.         The North Carolina Principal of the Year.

c.         The North Carolina Superintendent of the Year.

d.         The chair of the Board of the State Education Assistance Authority.

e.         The Director of the North Carolina Teaching Fellows Program.

(c)        Terms of Office. – Appointments to the Commission shall be for two‑year terms, expiring on July 1 in odd‑numbered years. Members serving ex officio, other than the chair of the Board of the State Education Assistance Authority and Director of the North Carolina Teaching Fellows Program, who have otherwise completed their term of service, shall continue to serve on the Commission until July 1, annually.

(d)       Vacancies. – Except as otherwise provided, if a vacancy occurs in the membership of the Commission, the appointing authority shall appoint another person meeting the same qualifications to serve for the balance of the unexpired term.

(e)        Chair; Meetings. – The Director of the Program shall call the first meeting of the Commission. The Commission members shall elect a chair and a vice‑chair from the membership of the Commission to serve one‑year terms. The Commission shall meet regularly at times and places deemed necessary by the chair or, in the absence of the chair, by the vice‑chair.

(f)        Conflict of Interest. – A member of the Commission shall abstain from voting on the selection of an educator preparation program of a postsecondary constituent institution of The University of North Carolina or a private postsecondary institution operating in the State under G.S. 116‑209.62(f) if the member is an officer or employee of the institution or sits as a member of the institution's board of directors.

(g)        Expenses. – Commission members shall receive per diem, subsistence, and travel allowances in accordance with G.S. 138‑5 or G.S. 138‑6, as appropriate.

"§ 116‑209.62.  North Carolina Teaching Fellows Program established; administration.

(a)        Program. – There is established the North Carolina Teaching Fellows Program to be administered by the General Administration of The University of North Carolina, in conjunction with the Authority and the Commission. The purpose of the Program is to recruit, prepare, and support students residing in or attending institutions of higher education located in North Carolina for preparation as highly effective STEM or special education teachers in the State's public schools. The Program shall be used to provide a forgivable loan to individuals interested in preparing to teach in the public schools of the State in STEM or special education licensure areas.

(b)        Trust Fund. – There is established the North Carolina Teaching Fellows Program Trust Fund to be administered by the Authority, in conjunction with the General Administration of The University of North Carolina. All funds (i) appropriated to, or otherwise received by, the Program for forgivable loans, (ii) received as repayment of forgivable loans, and (iii) earned as interest on these funds shall be placed in the Trust Fund. The purpose of the Trust Fund is to provide financial assistance to qualified students for completion of teacher education and licensure programs to fill STEM or special education licensure areas in the public schools of the State.

(c)        Uses of Monies in the Trust Fund. – The monies in the Trust Fund may be used only for (i) forgivable loans granted under the Program, (ii) administrative costs associated with the Program, including recruitment and recovery of funds advanced under the Program, and (iii) extracurricular enhancement activities of the Program. The Authority may use up to six hundred thousand dollars ($600,000) from the Trust Fund in each fiscal year for its administrative costs, the salary of the Director of the Program, expenses of the Commission, and to provide the Commission with funds to use for the extracurricular enhancement activities of the Program.

(d)       Director of the Program. – The Board of Governors of The University of North Carolina shall appoint a Director of the Program. The Director shall appoint staff to the Commission and shall be responsible for recruitment and coordination of the Program, including proactive, aggressive, and strategic recruitment of potential recipients. Recruitment activities shall include (i) targeting regions of the State with the highest teacher attrition rates and teacher recruitment challenges, (ii) actively engaging with educators, business leaders, experts in human resources, elected officials, and other community leaders throughout the State, and (iii) attracting candidates in STEM and special education licensure areas to the Program. The Director shall report to the President of The University of North Carolina. The Authority shall provide office space and clerical support staff, as necessary, to the Director for the Program.

(e)        Student Selection Criteria for Forgivable Loans. – The Commission shall adopt stringent standards for awarding forgivable loans based on multiple measures to ensure that only the strongest applicants receive them, including the following:

(1)        Grade point averages.

(2)        Performance on relevant career and college readiness assessments.

(3)        Experience, accomplishments, and other criteria demonstrating qualities positively correlated with highly effective teachers, including excellent verbal and communication skills.

(4)        Demonstrated commitment to serve in a STEM or special education licensure area in North Carolina public schools.

(f)        Program Selection Criteria. – The Authority shall administer the Program in cooperation with five institutions of higher education with approved educator preparation programs selected by the Commission that represent both postsecondary constituent institutions of The University of North Carolina and private postsecondary institutions operating in the State. The Commission shall adopt stringent standards for selection of the most effective educator preparation programs, including the following:

(1)        Demonstrates high rates of educator effectiveness on value‑added models and teacher evaluations, including using performance‑based, subject‑specific assessment and support systems, such as edTPA or other metrics of evaluating candidate effectiveness that have predictive validity.

(2)        Demonstrates measurable impact of prior graduates on student learning, including impact of graduates teaching in STEM or special education licensure areas.

(3)        Demonstrates high rates of graduates passing exams required for teacher licensure.

(4)        Provides curricular and co‑curricular enhancements in leadership, facilitates learning for diverse learners, and promotes community engagement, classroom management, and reflection and assessment.

(5)        Requires at least a minor concentration of study in the subject area that the candidate may teach.

(6)        Provides early and frequent internship or practical experiences, including the opportunity for participants to perform practicums in diverse school environments.

(7)        Is approved by the State Board of Education as an educator preparation program.

(g)        Awards of Forgivable Loans. – The Program shall provide forgivable loans to selected students to be used at the five selected institutions for completion of a program leading to teacher licensure as follows:

(1)        North Carolina high school seniors. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to four years.

(2)        Students applying for transfer to a selected educator preparation program at an institution of higher education. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to three years.

(3)        Individuals currently holding a bachelor's degree seeking preparation for teacher licensure. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to two years.

(4)        Students matriculating at institutions of higher education who are changing to enrollment in a selected educator preparation program. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to two years.

Forgivable loans may be used for tuition, fees, and the cost of books.

(h)        Identification of STEM and Special Education Licensure Areas. – The Superintendent of Public Instruction shall identify and provide to the Commission and the Authority a list of STEM and special education licensure areas and shall annually provide to the Commission the number of available positions in each licensure area relative to the number of current and anticipated teachers in that area of licensure. The Commission shall make the list of STEM and special education licensure areas readily available to applicants.

(i)         Administration of Forgivable Loan Awards. – Upon the naming of recipients of the forgivable loans by the Commission, the Commission shall transfer to the Authority its decisions. The Authority, in coordination with the Director, shall perform all of the administrative functions necessary to implement this Part, which functions shall include rule making, disseminating information, acting as a liaison with participating institutions of higher education, implementing forgivable loan agreements, loan monitoring, loan cancelling through service and collection, determining the acceptability of service repayment agreements, enforcing the agreements, and all other functions necessary for the execution, payment, and enforcement of promissory notes required under this Part.

(j)         Annual Report. – The Commission, in coordination with the Authority, shall report no later than January 1, 2019, and annually thereafter, to the Joint Legislative Education Oversight Committee regarding the following:

(1)        Forgivable loans awarded from the Trust Fund, including the following:

a.         Demographic information regarding recipients.

b.         Number of recipients by institution of higher education and program.

c.         Information on number of recipients by anticipated STEM and special education licensure area.

(2)        Placement and repayment rates, including the following:

a.         Number of graduates who have been employed in a STEM or special education licensure area within two years of program completion.

b.         Number of graduates who accepted employment at a low‑performing school identified under G.S. 115C‑105.37 as part of their years of service.

c.         Number of graduates who have elected to do loan repayment and their years of service, if any, prior to beginning loan repayment.

d.         Number of graduates employed in a STEM or special education licensure area who have received an overall rating of at least accomplished and have met expected growth on applicable standards of the teacher evaluation instrument.

e.         Aggregate information on student growth and proficiency in courses taught by graduates who have fulfilled service requirements through employment in a STEM or special education licensure area.

(3)        Selected school outcomes by program, including the following:

a.         Turnover rate for forgivable loan graduates.

b.         Aggregate information on student growth and proficiency as provided annually by the State Board of Education to the Commission in courses taught by forgivable loan graduates.

c.         Fulfillment rate of forgivable loan graduates.

"§ 116‑209.63.  Terms of forgivable loans; receipt and disbursement of funds.

(a)        Notes. – All forgivable loans shall be evidenced by notes made payable to the Authority that bear interest at a rate not to exceed ten percent (10%) per year as set by the Authority and beginning on the first day of September after the completion of the program leading to teacher licensure or 90 days after termination of the forgivable loan, whichever is earlier. The forgivable loan may be terminated upon the recipient's withdrawal from school or by the recipient's failure to meet the standards set by the Commission.

(b)        Forgiveness. – The Authority shall forgive the loan and any interest accrued on the loan if, within 10 years after graduation from a program leading to teacher licensure, exclusive of any authorized deferment for extenuating circumstances, the recipient serves as a teacher in a STEM or special education licensure area, as provided in G.S. 116‑209.62(h), for every year the teacher was awarded the forgivable loan, in any combination of the following:

(1)        One year at a North Carolina public school identified as low‑performing under G.S. 115C‑105.37 at the time the teacher accepts employment at the school or, if the teacher changes employment during this period, at another school identified as low‑performing.

(2)        Two years at a North Carolina public school not identified as low‑performing under G.S. 115C‑105.37.

The Authority shall also forgive the loan if it finds that it is impossible for the recipient to work for up to eight years, within 10 years after completion of the program leading to teacher licensure, at a North Carolina public school because of the death or permanent disability of the recipient. If the recipient repays the forgivable loan by cash payments, all indebtedness shall be repaid within 10 years after completion of the program leading to teacher licensure supported by the forgivable loan. If the recipient completes a program leading to teacher licensure, payment of principal and interest shall begin no later than the first day of September after the completion of the program. Should a recipient present extenuating circumstances, the Authority may extend the period to repay the loan in cash to no more than a total of 12 years."

SECTION 10A.3.(b)  Initial appointments to the North Carolina Teaching Fellows Commission shall be made no later than August 15, 2017. Initial appointments to the Commission shall expire July 1, 2019.

SECTION 10A.3.(c)  The Commission shall establish initial selection criteria for recipients and select the five institutions of higher education with approved educator preparation programs at which a recipient may use a forgivable loan no later than November 15, 2017, and shall make available applications to prospective students no later than December 31, 2017.

SECTION 10A.3.(d)  The Superintendent of Public Instruction shall establish the list of STEM and special education licensure areas and provide that information to the Commission and Authority no later than October 1, 2017.

SECTION 10A.3.(e)  The Commission shall select recipients and award the initial forgivable loans for the 2018‑2019 academic year no later than April 1, 2018.

SECTION 10A.3.(f)  G.S. 115C‑472.16(b) reads as rewritten:

"(b)      The General Assembly shall only appropriate moneys in the North Carolina Education Endowment Fund for teacher compensation that is related directly to improving student academic outcomes in the public schools of the State.the forgivable loans for the North Carolina Teaching Fellows Program and administration of the North Carolina Teaching Fellows Program under Part 3 of Article 23 of Chapter 116 of the General Statutes."

SECTION 10A.3.(g)  G.S. 116‑209.27(a) reads as rewritten:

"(a)      The Authority shall, as of March 1, 2015, administer all outstanding scholarship loans previously awarded by the former North Carolina Teaching Fellows Commission and subject to repayment under the former Teaching Fellows Program.Program administered pursuant to Part 2 of Article 24C of Chapter 115C of the General Statutes."

SECTION 10A.3.(h)  For the 2017‑2018 fiscal year, the Department of Public Instruction shall transfer the sum of four hundred fifty thousand dollars ($450,000) in nonrecurring funds from the North Carolina Education Endowment Fund to the Board of Governors of The University of North Carolina to allocate to the Authority to be used to implement the North Carolina Teaching Fellows Program (Program), as established by this section. Beginning with the 2018‑2019 fiscal year, the Department of Public Instruction shall transfer the sum of six million dollars ($6,000,000) in recurring funds from the North Carolina Education Endowment Fund to the Board of Governors to be allocated to the Authority for the operation of the Program and for the award of forgivable loans to selected recipients beginning with the 2018‑2019 academic year.

SECTION 10A.3.(i)  Notwithstanding G.S. 115C‑472.16, of the funds available in the North Carolina Education Endowment Fund (Fund) for the 2017‑2018 fiscal year, the sum of six million one hundred forty‑five thousand four hundred sixty‑one dollars ($6,145,461) in nonrecurring funds for the 2017‑2018 fiscal year shall be transferred from the Fund to the Department of Public Instruction to be used to support the supervision and administration of the public school system.

 

PERSONAL EDUCATION SAVINGS ACCOUNT PROGRAM

SECTION 10A.4.(a)  Chapter 115C of the General Statutes is amended by adding a new Article to read:

"Article 39A.

"Personal Education Savings Accounts.

"§ 115C‑567.5.  North Carolina Personal Education Savings Account Program established.

There is established the North Carolina Personal Education Savings Accounts Program to provide the option for a parent to better meet the individual educational needs of the parent's child.

"§ 115C‑567.6.  Definitions.

The following definitions apply in this Article:

(1)        Authority. – Defined in G.S. 116‑201.

(2)        Division. – The Division of Nonpublic Education, Department of Administration.

(3)        Eligible student. – A student residing in North Carolina who has not yet received a high school diploma and who meets all of the following requirements:

a.         Meets one of the following criteria:

1.         Was a full‑time student (i) assigned to and attending a public school pursuant to G.S. 115C‑366 or (ii) enrolled in a Department of Defense Elementary and Secondary School, established pursuant to 10 U.S.C. § 2164 and located in North Carolina, during the previous semester.

2.         Received scholarship funds for a personal education savings account during the previous school year.

3.         Is entering either kindergarten or the first grade.

4.         Is a child in foster care, as defined in G.S. 131D‑10.2(9).

5.         Is a child whose adoption decree was entered not more than one year prior to submission of the scholarship application.

6.         Is a child whose parent or legal guardian is on full‑time duty status in the active uniformed service of the United States, including members of the National Guard and Reserve on active duty orders pursuant to 10 U.S.C. § 12301, et seq., and 10 U.S.C. § 12401, et seq.

7.         Is a child enrolled part‑time in a public school and part‑time in a nonpublic school that exclusively provides services for children with disabilities.

b.         Has not enrolled in a postsecondary institution in a matriculated status eligible for enrollment for 12 hours of academic credit.

c.         Is a child with a disability, as defined in G.S. 115C‑106.3(1), including, for example, intellectual disability, hearing impairment, speech or language impairment, visual impairment, serious emotional disturbance, orthopedic impairment, autism, traumatic brain injury, other health impairments, specific learning disability, or disability as may be required to be included under IDEA.

(4)        Nonpublic school. – A school that meets the requirements of Part 1, 2, or 3 of Article 39 of this Chapter, as identified by the Division.

(5)        Parent. – A parent, legal guardian, or legal custodian of an eligible student.

(6)        Personal Education Savings Account or PESA. – A bank account provided to a parent for the purpose of holding scholarship funds awarded by the Authority for an eligible student to be used for qualifying education expenses under G.S. 115C‑567.10.

"§ 115C‑567.7.  Award of scholarship funds for a personal education savings account.

(a)        Application Selection. – The Authority shall make available no later than February 1 of each year applications to eligible students for the award of scholarship funds for a personal education savings account to be used for qualifying education expenses to attend a nonpublic school. Information about scholarship funds and the application process shall be made available on the Authority's Web site. Applications shall be submitted electronically. Beginning March 15, the Authority shall begin selecting recipients for scholarships according to the following criteria:

(1)        First priority shall be given to eligible students who were awarded scholarship funds for a PESA during the previous school year if those students have applied by March 1.

(2)        After funds have been awarded to prior recipients as provided in subdivision (1) of this subsection, any remaining funds shall be used to award scholarship funds for a PESA for all other eligible students.

(b)        Scholarship Awards. – Scholarships shall be awarded each year for an amount not to exceed nine thousand dollars ($9,000) per eligible student for the fiscal year in which the application is received. Recipients shall receive scholarship funds deposited in equal amounts to a PESA in each quarter of the fiscal year. The first deposit of funds to a PESA shall be subject to the execution of the parental agreement required by G.S. 115C‑567.10. The parent shall then receive a debit card with the prepaid funds loaded on the card at the beginning of the fiscal year. After the initial disbursement of funds, each subsequent, quarterly disbursement of funds shall be subject to the submission by the parent of an expense report. The expense report shall be submitted electronically and shall include documentation that the student received an education, as described in G.S. 115C‑567.10(a)(1), for no less than 35 days of the applicable quarter. The debit card shall be renewed upon the receipt of the parental agreement under G.S. 115C‑567.10 for recipients awarded scholarship funds in subsequent fiscal years. Any funds remaining on the card at the end of the fiscal year may be carried forward to the next fiscal year if the card is renewed. Any funds remaining on the card if an agreement is not renewed shall be returned to the Authority.

(c)        Eligibility for Other Scholarships. – Eligibility for the other scholarship programs is provided for as follows:

(1)        An eligible student under this Article may receive, in addition to a PESA, a scholarship under Part 2A of Article 39 of this Chapter.

(2)        An eligible student under this Article may receive, in addition to a PESA and a scholarship under Part 2A of Article 39 of this Chapter, a scholarship under the special education scholarship program for children with disabilities pursuant to Part 1H of Article 9 of this Chapter, only if that student has one or more of the following disabilities:

a.         Autism.

b.         Developmental disability.

c.         Hearing impairment.

d.         Moderate or severe intellectual disability.

e.         Multiple, permanent orthopedic impairments.

f.          Visual impairment.

(d)       Applications Not Public Records. – Applications for scholarship funds and personally identifiable information related to eligible students receiving funds shall not be a public record under Chapter 132 of the General Statutes. For the purposes of this section, personally identifiable information means any information directly related to a student or members of a student's household, including the name, birthdate, address, Social Security number, telephone number, e‑mail address, or any other information or identification number that would provide information about a specific student or members of a specific student's household.

"§ 115C‑567.8.  Student continuing eligibility.

After the initial disbursement of funds, the Authority shall ensure that the student's continuing eligibility is assessed at least every three years by one of the following:

(1)        The local education agency. – The local education agency shall assess if the student continues to be a child with a disability and verify the outcome on a form to be provided to the Authority.

(2)        A licensed psychologist with a school psychology focus or a psychiatrist. –The psychologist or psychiatrist shall assess, after review of appropriate medical and educational records, if the education and related services received by the student in the nonpublic school setting have improved the child's educational performance and if the student would continue to benefit from placement in the nonpublic school setting. The psychologist or psychiatrist shall verify the outcome of the assessment on a form to be provided to the Authority.

"§ 115C‑567.9.  Verification of eligibility.

(a)        Verification of Information. – The Authority may seek verification of information on any application for the award of scholarship funds for a personal education savings account. The Authority shall select and verify six percent (6%) of applications annually, including those with apparent errors on the face of the application. The Authority shall establish rules for the verification process. If a household fails to cooperate with verification efforts, the Authority shall revoke the award of scholarship funds for a PESA for the eligible student.

(b)        Access to Information. – Household members of applicants for the award of scholarship funds for a PESA shall authorize the Authority to access information needed for verification efforts held by other State agencies, including the Department of Health and Human Services and the Department of Public Instruction.

"§ 115C‑567.10.  Parental agreement; use of funds.

(a)        Parental Agreement. – The Authority shall provide the parent of a scholarship recipient with a written agreement, applicable for each year the eligible student receives scholarship funds under this Article, to be signed and returned to the Authority prior to receiving the scholarship funds. The agreement shall be submitted to the Authority electronically. The parent shall not designate any entity or individual to execute the agreement on the parent's behalf. A parent or eligible student's failure to comply with this section shall result in a forfeit of scholarship funds and those funds may be awarded to another eligible student. The parent shall agree to the following conditions in order to receive scholarship funds under this Article:

(1)        Use at least a portion of the scholarship funds to provide an education to the eligible student in, at a minimum, the subjects of English language arts, mathematics, social studies, and science.

(2)        Unless the student is an eligible student pursuant to G.S. 115C‑567.6(3)a.7., release a local education agency in which the student is eligible to attend under G.S. 115C‑366 of all obligations to educate the eligible student while the eligible student is receiving scholarship funds under this Article. A parent of a student, other than a student who is an eligible student pursuant to G.S. 115C‑567.6(3)a.7., who decides to enroll the student into the local education agency or other North Carolina public school during the term of the agreement shall notify the Authority to request a release from the agreement and shall return any unexpended funds to the Authority.

(3)        Use the scholarship funds deposited into a personal education savings account only for the following qualifying education expenses of the eligible student:

a.         Tuition and fees for a nonpublic school that meets the requirements of Part 1 or Part 2 of Article 39 of this Chapter and is subject to the requirements of G.S. 115C‑562.5.

b.         Textbooks required by a nonpublic school.

c.         Tutoring and teaching services provided by an individual or facility accredited by a State, regional, or national accrediting organization.

d.         Curricula.

e.         Fees for nationally standardized norm‑referenced achievement tests, advanced placement tests, or nationally recognized college entrance exams.

f.          Fees charged to the account holder for the management of the PESA.

g.         Fees for services provided by a public school, including individual classes and extracurricular programs.

h.         Premiums charged to the account holder for any insurance or surety bonds required by the Authority.

i.          Educational therapies from a licensed or accredited practitioner or provider.

j.          Educational technology defined by the Authority as approved for use pursuant to Part 1H of Article 9 of this Chapter.

k.         Student transportation, pursuant to a contract with an entity that regularly provides student transportation, to and from (i) a provider of education or related services or (ii) an education activity.

(4)        Not use scholarship funds for any of the following purposes:

a.         Computer hardware or other technological devices not defined by the Authority as educational technology approved for use pursuant to Part 1H of Article 9 of this Chapter.

b.         Consumable educational supplies, including paper, pen, or markers.

c.         Tuition and fees at an institution of higher education, as defined in G.S. 116‑143.1, or a private postsecondary institution.

d.         Tuition and fees for a nonpublic school that meets the requirements of Part 3 of Article 39 of this Chapter.

(b)        No Refunds to an Account Holder. – A nonpublic school or a provider of services purchased under subsection (a) of this section shall not refund or rebate any scholarship funds to a parent or eligible student in any manner. The parent shall notify the Authority if such a refund is required.

(c)        Funds in the PESA Not Taxable. – Funds received pursuant to this Article do not constitute taxable income to the parent, legal guardian, or legal custodian of an eligible student or to the eligible student.

"§ 115C‑567.11.  Identification of nonpublic schools and distribution of personal education savings account information.

(a)        List of Nonpublic Schools. – The Division shall provide annually by February 1 to the Authority a list of all nonpublic schools operating in the State that meet the requirements of Part 1, 2, or 3 of Article 39 of this Chapter.

(b)        Information on PESAs to the Division. – The Authority shall provide information about personal education savings accounts to the Division. The Division shall provide information about PESAs to all qualified nonpublic schools on an annual basis.

"§ 115C‑567.12.  Administration.

(a)        Rules and Regulations. – The Authority shall establish rules and regulations for the administration of the program, including the following:

(1)        The administration and awarding of scholarship funds, including a lottery process for the selection of recipients within the criteria established by G.S. 115C‑567.7(a), if necessary.

(2)        Requiring a surety bond or insurance to be held by account holders.

(3)        Use of the funds and the reporting of expenditures.

(4)        Monitoring and control of spending scholarship funds deposited in a personal education savings account.

(b)        Contract for Management of PESAs. – The Authority may contract with a private financial management firm or institution to manage PESAs in accordance with this Article.

(c)        Annual Audits. – The Authority shall conduct annual audits of PESAs and may audit a random sampling of PESAs as needed to ensure compliance with the requirements of this Article. The Authority may contract with an independent entity to conduct these audits. The Authority may remove a parent or eligible student from the program and close a personal education savings account for failure to comply with the terms of the parental agreement, for failure to comply with applicable laws, or because the student is no longer an eligible student.

(d)       Administration Costs. – Of the funds allocated to the Authority to award scholarship funds under this Article, the Authority may retain up to two hundred fifty thousand dollars ($250,000) each fiscal year for administrative costs associated with the program, including contracting with non‑State entities for administration of certain components of the program.

"§ 115C‑567.13.  Reporting requirements.

The Authority shall report annually, no later than September 1, to the Joint Legislative Education Oversight Committee on the following:

(1)        Total number, grade level, race, ethnicity, and sex of eligible students receiving scholarship funds.

(2)        Total amount of scholarship funding awarded.

(3)        Number of students previously enrolled in public schools in the prior semester by the previously attended local education agency.

(4)        Nonpublic schools in which scholarship recipients are enrolled, including numbers of scholarship recipients at each nonpublic school.

(5)        The number of substantiated cases of fraud by recipients and the number of parents or students removed from the program for noncompliance with the provisions of this Article."

SECTION 10A.4.(b)  G.S. 105‑153.5(b) is amended by adding a new subdivision to read:

"(12)    The amount deposited during the taxable year to a personal education savings account under Article 39A of Chapter 115C of the General Statutes."

SECTION 10A.4.(c)  G.S. 115C‑555 reads as rewritten:

"§ 115C‑555.  Qualification of nonpublic schools.

The provisions of this Part shall apply to any nonpublic school which has one or more of the following characteristics:

(4)        It receives no funding from the State of North Carolina. For the purposes of this Article, scholarship grant funds awarded pursuant to Part 2A of this Article Article, Article 39A of this Chapter, or Part 1H of Article 9 of this Chapter to eligible students attending a nonpublic school shall not be considered funding from the State of North Carolina."

SECTION 10A.4.(d)  Of the funds appropriated by this act for the Personal Education Savings Account Program in the 2017‑2018 fiscal year, the sum of four hundred fifty thousand dollars ($450,000) shall be allocated to the Authority to establish the Program. Of the funds appropriated by this act for the Personal Education Savings Account Program in the 2018‑2019 fiscal year, the sum of three million dollars ($3,000,000) shall be allocated to the Authority to award scholarship funds to eligible students in accordance with this section.

SECTION 10A.4.(e)  Subsection (a) of this section applies beginning with the 2018‑2019 school year. Subsection (b) of this section is effective for taxable years beginning on or after January 1, 2018.

 

AMEND TRANSFORMING PRINCIPAL PREPARATION

SECTION 10A.5.(a)  Section 11.9 of S.L. 2015‑241, as amended by Section 11A.4 of S.L. 2016‑94 and by Section 4.3 of S.L. 2016‑123, reads as rewritten:

"SECTION 11.9.(a)  Purpose. – The purpose of this section is to establish a competitive grant program for eligible entities to elevate educators in North Carolina public schools by transforming the preparation of principals across the State. The State Education Assistance Authority (Authority) shall administer this grant program through a cooperative agreement with a private, nonprofit corporation to provide funds for the preparation and support of highly effective future school principals in North Carolina.

"SECTION 11.9.(b)  Definitions. – For the purposes of this section, the following definitions apply:

(1)        Eligible entity. – A for‑profit or nonprofit organization or an institution of higher education that has an evidence‑based plan for preparing school leaders who implement school leadership practices linked to increased student achievement.

(2)        High‑need school. – A public school, including a charter school, that meets one or more of the following criteria:

a.         Is a school identified under Part A of Title I of the Elementary and Secondary Education Act of 1965, as amended.

b.         Is a persistently low‑achieving school, as identified by the Department of Public Instruction for purposes of federal accountability.

c.         A middle school containing any of grades five through eight that feeds into a high school with less than a sixty percent (60%) four‑year cohort graduation rate.

d.         A high school with less than a sixty percent (60%) four‑year cohort graduation rate.

(3)        Principal. – The highest administrative official in a public school building with primary responsibility for the instructional leadership, talent management, and organizational development of the school.

(4)        School leader. – An individual employed in a school leadership role, including principal or assistant principal roles.

(5)        Student achievement. – At the whole school level, after three years of leading a school, consistent and methodologically sound measures of:

a.         Student academic achievement.

b.         Aggregated individual student academic growth.

c.         Additional outcomes, such as high school graduation rates, the percentage of students taking advanced‑level coursework, or the percentage of students who obtain a career‑related credential through a national business certification exam.

"SECTION 11.9.(c)  Program Authorized. – The Authority shall award grants to eligible entities to support programs that develop well‑prepared school leaders in accordance with the provisions of this section. The Authority shall establish any necessary rules to administer the grant program.

"SECTION 11.9.(d)  Contract With a Nonprofit for Administration. – By November 1, 2015, the Authority shall issue a Request for Proposal (RFP) for a private, nonprofit corporation to contract with the Authority for the administration of the program, including making recommendations to the Authority for the award of grants, as authorized by this section. The nonprofit corporation applying to the Authority shall meet at least the following requirements:

(1)        The nonprofit corporation shall be a nonprofit corporation organized pursuant to Chapter 55A of the General Statutes and shall comply at all times with the provisions of section 501(c)(3) of the Internal Revenue Code.

(2)        The nonprofit corporation shall employ sufficient staff who have demonstrated a capacity for the development and implementation of grant selection criteria and a selection process to promote innovative school leader education programs, including:

a.         Focus on school leader talent.

b.         Expertise supporting judgments about grant renewal based on achievement of or substantial school leader progress toward measurable results in student achievement.

c.         Expectation of creating positive experiences working with the educational community in North Carolina to establish the foundation for successfully administering the programs set forth in this section.

(3)        The nonprofit corporation shall comply with the limitations on lobbying set forth in section 501(c)(3) of the Internal Revenue Code.

(4)        No State officer or employee may serve on the board of the nonprofit corporation.

(5)        The board of the nonprofit corporation shall meet at least quarterly at the call of its chair.

"SECTION 11.9.(e)  Report on Selection of the Nonprofit. – The Authority shall select a nonprofit corporation to enter into a contract with to administer the program by January 15, 2016. The Authority shall report to the Joint Legislative Education Oversight Committee on the selection of the nonprofit corporation by February 1, 2016.

"SECTION 11.9.(f)  Application Requirements. – The nonprofit corporation entering into a contract with the Authority under subsection (d) of this section shall issue an initial RFP with guidelines and criteria for the grants no later than March 1, 2016. The nonprofit corporation may issue additional RFPs for grant applicants as it may deem necessary, subject to available funds. An eligible entity that seeks a grant under the program authorized by this section shall submit to the nonprofit corporation an application at such time, in such manner, and accompanied by such information as the nonprofit may require. An applicant shall include at least the following information in its response to the RFP for consideration by the nonprofit corporation:

(1)        The extent to which the entity has a demonstrated record of preparing school leaders who implement school leadership practices linked to increased student achievement.

(2)        The extent to which the entity has a rigorous school leader preparation program design that includes the following research‑based programmatic elements:

a.         A proactive, aggressive, and intentional recruitment strategy.

b.         Rigorous selection criteria based on competencies that are predictive of success as a school leader, including, but not limited to, evidence of significant positive effect on student learning growth in the classroom, at the school‑level, and the local school administrative unit‑level, professional recommendations, evidence of problem solving and critical thinking skills, achievement drive, and leadership of adults.

c.         Alignment to high‑quality national standards for school leadership development.

d.         Rigorous coursework that effectively links theory with practice through the use of field experiences and problem‑based learning.

e.         Full‑time paid clinical practice of at least five months and 750 hours in duration in an authentic setting, including substantial leadership responsibilities where candidates are evaluated on leadership skills and effect on student outcomes as part of program completion.

f.          Multiple opportunities for school leader candidates to be observed and coached by program faculty and staff.

g.         Clear expectations for and firm commitment from school leaders who will oversee the clinical practice of candidates.

h.         Evaluation of school leader candidates during and at the end of the clinical practice based on the North Carolina School Executive Evaluation Rubric.

i.          A process for continuous review and program improvement based on feedback from partnering local school administrative units and data from program completers, including student achievement data.

j.          Established relationship and feedback loop with affiliated local school administrative units that is used to inform and improve programmatic elements from year to year based on units' needs.

"SECTION 11.9.(g)  Priorities. – The nonprofit corporation shall evaluate the applicants for grants by giving priority to an eligible entity with a record of preparing principals demonstrating the following:

(1)        Improvement in student achievement.

(2)        Placement as school leaders in eligible schools.

(3)        A proposed focus on and, if applicable, a record of serving high‑need schools, high‑need local school administrative units, or both.

(4)        A detailed plan and commitment to share lessons learned and to improve the capacity of other entities in reaching similar outcomes.

(5)        A service area that is underserved by existing principal preparation programs or demonstrates unmet need despite current available programs.

"SECTION 11.9.(h)  Uses of Funds. – By June 1, 2016, the nonprofit corporation shall recommend to the Authority the recipients of grants under the program. Each eligible entity that receives grant funds shall use those funds to carry out the following:

(1)        Recruiting and selecting, based on a rigorous evaluation of the competencies of the school leader candidates participating in the program and their potential and desire to become effective school leaders.

(2)        Operating a school leader preparation program that provides the opportunity for all candidates to earn a master's degree, if they do not already have one, and subsequent principal licensure by doing the following:

a.         Utilizing a research‑based content and curriculum, including embedded participant assessments to evaluate candidates before program completion, that prepares candidates to do the following:

1.         Provide instructional leadership, such as developing teachers' instructional practices and analyzing classroom and school‑wide data to support teachers.

2.         Manage talent, such as developing a high‑performing team.

3.         Build a positive school culture, such as building a strong school culture focused on high academic achievement for all students, including gifted and talented students, students with disabilities, and English learners, maintaining active engagement with family and community members, and ensuring student safety.

4.         Develop organizational practices, such as aligning staff, budget, and time to the instructional priorities of the school.

b.         Providing opportunities for sustained and high‑quality job‑embedded practice in an authentic setting where candidates are responsible for moving the practice and performance of a subset of teachers or for school‑wide performance as principal‑in‑planning or interim school leaders.

(3)        Collecting data on program implementation and program completer outcomes for continuous program improvement.

"SECTION 11.9.(i)  Duration of Grants. – The nonprofit corporation shall also recommend to the Authority the duration and renewal of grants to eligible entities according to the following:

(1)        The duration of grants shall be as follows:

a.         Grants shall be no more than five years in duration.

b.         The nonprofit corporation may recommend renewal of a grant based on performance, including allowing the grantee to scale up or replicate the successful program as provided in subdivision (2) of this subsection.

c.         The nonprofit shall develop a process with the Authority for early retrieval of grant funds from grant recipients due to noncompliance with grant terms, including participation in third‑party evaluation activities. Grantees shall develop and enforce requirements for program graduates to serve a minimum of four years as school‑based administrators in North Carolina. Requirements are subject to the approval of the nonprofit corporation.

(2)        In evaluating performance for purposes of grant renewal and making recommendations to the Authority, the nonprofit corporation shall consider:

a.         For all grantees, the primary consideration in renewing grants shall be the extent to which program participants improved student achievement in eligible schools.

b.         Other criteria from data received in the annual report in subsection (j) of this section may include the following:

1.         The percentage of program completers who are placed as school leaders in this State within three years of receiving a grant.

2.         The percentage of program completers who are rated proficient or above on the North Carolina School Executive Evaluation Rubric.

"SECTION 11.9.(j)  Reporting Requirements for Grant Recipients. – Recipients of grants under the program shall participate in all evaluation activities required by the nonprofit and submit an annual report to the nonprofit corporation contracting with the Authority, beginning in the third year of the grant, Authority with any information requested by the nonprofit corporation. The recipients shall comply with additional report requests made by the nonprofit. Whenever practicable and within a reasonable amount of time, grant recipients shall also make all materials developed as part of the program and with grant funds publically available to contribute to the broader sharing of promising practices. Materials shall not include personally identifiable information regarding individuals involved or associated with the program, including, without limitation, applicants, participants, supervisors, evaluators, faculty, and staff, without their prior written consent. The nonprofit corporation shall work with recipients and local school administrative units, as needed, to enable the collection, analysis, and evaluation of at least the following relevant data, within necessary privacy constraints:

(1)        Student achievement in eligible schools.

(2)        The percentage of program completers who are placed as school leaders within three years in the State.

(3)        The percentage of program completers rated proficient or above on school leader evaluation and support systems.

(4)        The percentage of program completers that are school leaders who have remained employed in a North Carolina public school for two or more years of initial placement.

"SECTION 11.9.(k)  Licensure Process. – By June 1, 2016, the State Board of Education shall adopt a policy to provide for a specific licensure process applicable to school administrators who provide documentation to the State Board of successful completion of a principal preparation program selected for a competitive grant in accordance with this section. Licensure shall include a requirement for candidates to hold a master's degree.

"SECTION 11.9.(l)  Evaluation and Revision of Program. – The nonprofit corporation administering the program shall provide the State Board of Education and the Joint Legislative Education Oversight Committee with the data collected in accordance with subsection (j) of this section on an annual basis. By September 15, 2021, the State Board of Education, in coordination with the Board of Governors of The University of North Carolina, shall revise, as necessary, the licensure requirements for school administrators and the standards for approval of school administrator preparation programs after evaluating the data collected from the grant recipients, including the criteria used in selecting grant recipients and the outcomes of program completers. The State Board of Education shall report to the Joint Legislative Education Oversight Committee by November 15, 2021, on any changes made to the licensure requirements for school administrators and the standards for approval of school administrator preparation programs in accordance with this section.

"SECTION 11.9.(m)  Of the funds appropriated by this act for the 2015‑2016 fiscal year for this program, the sum of five hundred thousand dollars ($500,000) shall be allocated to the State Education Assistance Authority to contract with the nonprofit corporation selected pursuant to subsection (e) of this section to establish and administer the program. The State Education Assistance Authority may use up to five percent (5%) of those funds for administrative costs.

Beginning with the 2017‑2018 fiscal year, of the funds appropriated each fiscal year for this program, the sum of three hundred eighty thousand dollars ($380,000) shall be allocated to the State Education Assistance Authority to contract with the nonprofit corporation selected pursuant to subsection (e) of this section to establish and administer the program. The State Education Assistance Authority may use up to fifteen thousand dollars ($15,000) of those funds for administrative costs.

"SECTION 11.9.(n)  Beginning with the 2016‑2017 fiscal year and for each subsequent fiscal year, of Of the funds appropriated for this program, program for the 2016‑2017 fiscal year, the sum of three hundred thousand dollars ($300,000) shall be allocated to the State Education Assistance Authority to contract with the nonprofit corporation selected pursuant to subsection (e) of this section to establish and administer the program, and the State Education Assistance Authority may use up to five percent (5%) of those funds for administrative costs. The remaining funds appropriated for a the fiscal year for this program shall be allocated to the State Education Assistance Authority to award grants to selected recipients.

"SECTION 11.9.(o)  Beginning with the 2017‑2018 fiscal year, of the funds appropriated for this program, the sum of four million two hundred thousand dollars ($4,200,000) shall be allocated each fiscal year to the State Education Assistance Authority to award grants to selected recipients. Any unexpended funds appropriated to award grants to selected recipients remaining at the end of each fiscal year shall revert to the General Fund, except that the Authority may carry forward for the next fiscal year an amount necessary to ensure that any outstanding allowable reimbursements can be disbursed in accordance with this section. Any funds carried forward for the purpose of meeting anticipated reimbursement obligations from the prior fiscal year that are not expended shall not be used to award additional grants to grant recipients but shall revert to the General Fund at the end of the fiscal year."

SECTION 10A.5.(b)  Pursuant to Chapter 143E of the General Statutes, the Program Evaluation Division is directed to conduct a measurability assessment of the Principal Preparation Program authorized in Section 11.9 of S.L. 2015‑241, as amended by Section 11A.4 of S.L. 2016‑94, Section 4.3 of S.L. 2016‑123, and subsection (a) of this section. The State Education Assistance Authority (hereinafter "Authority") and the nonprofit corporation establishing and administering the Program shall provide the Division and the independent assessor selected by the Division any requested written information, electronic data, and access to facilities and personnel appropriate for the measurability assessment. The assessment shall, in addition to requirements provided for in Chapter 143E of the General Statutes, include recommendations for periodic reporting of program output and program outcomes compared to objectives established for the Program. The recommendations shall include changes to the contract with the nonprofit by the Authority to effect periodic reporting. Periodic reports shall be made by the nonprofit to the Authority, State Board of Education, and Joint Legislative Education Oversight Committee. The Division shall furnish the measurability assessment to the Joint Legislative Program Evaluation Oversight and Joint Legislative Education Oversight Committee. The Division shall use funds available to it for such purposes to pay for the measurability assessment.

 

STUDY OF OPPORTUNITY SCHOLARSHIP STUDENT EVALUATIONS

SECTION 10A.6.(a)  The State Education Assistance Authority (Authority), in collaboration with the Department of Administration, Division of Nonpublic Education, and the Department of Public Instruction, shall establish a task force to study the evaluation of students receiving scholarship grants through the Opportunity Scholarship Grant Program pursuant to G.S. 115C‑562.7(c). The task force shall include representatives from various stakeholders and interested parties, including from at least the following groups:

(1)        Nonpublic schools accepting students who receive scholarship grants, including schools with a low percentage of those students in their overall student enrollment and a high percentage of those students in their overall student enrollment.

(2)        Organizations or associations representing parental school choice, such as Parents for Educational Freedom in North Carolina.

(3)        Organizations or associations representing nonpublic schools, including independent, religious, nonreligious, parochial, and nonparochial schools.

(4)        Independent research organizations specializing in K‑12 academic evaluations, including a college or university.

(5)        Public school leaders, including local superintendents and principals.

SECTION 10A.6.(b)  The task force shall study the most effective, valid, and reliable method of evaluating learning gains or losses of students receiving scholarship grants and comparing the learning gains or losses of those students to public school students with similar socioeconomic backgrounds, including the potential for adoption of a nationally normed common test for students participating in the evaluation. In doing so, the task force shall also consider the most reliable manner of establishing causal relationships to student performance outcomes while achieving minimal interference with the operation of the participating nonpublic and public schools, including limited sampling and other suitable research design methods.

SECTION 10A.6.(c)  By March 1, 2018, the Authority shall report to the Joint Legislative Education Oversight Committee on the results of the study required by this section, including any legislative recommendations from the task force on the evaluation of students receiving scholarship grants through the Opportunity Scholarship Grant Program.

 

PART XI. DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

SUBPART XI‑A. CENTRAL MANAGEMENT AND SUPPORT

 

HEALTH INFORMATION TECHNOLOGY

SECTION 11A.1.  Article 3 of Chapter 143B of the General Statutes is amended by adding a new section to read:

"§ 143B‑139.4D.  Department of Health and Human Services; coordination of health information technology.

(a)        The Department of Health and Human Services, in cooperation with the State Chief Information Officer, shall coordinate health information technology policies and programs within the State of North Carolina. The goal of the Chief Information Officer of the Department of Health and Human Services in coordinating State health information technology policy and programs shall be to avoid duplication of efforts and to ensure that each State agency, public entity, and private entity that undertakes health information technology activities does so within the area of its greatest expertise and technical capability and in a manner that supports coordinated State and national goals, which shall include at least all of the following:

(1)        Ensuring that patient health information is secure and protected, in accordance with applicable law.

(2)        Improving health care quality, reducing medical errors, reducing health disparities, and advancing the delivery of patient‑centered medical care.

(3)        Providing appropriate information to guide medical decisions at the time and place of care.

(4)        Ensuring meaningful public input into health information technology infrastructure development.

(5)        Improving the coordination of information among hospitals, laboratories, physicians' offices, and other entities through an effective infrastructure for the secure and authorized exchange of health care information.

(6)        Improving public health services and facilitating early identification and rapid response to public health threats and emergencies, including bioterrorist events and infectious disease outbreaks.

(7)        Facilitating health and clinical research.

(8)        Promoting early detection, prevention, and management of chronic diseases.

(b)        The Department, in cooperation with the Department of Information Technology, shall establish and direct a health information technology management structure that is efficient and transparent and that is compatible with the Office of the National Health Coordinator for Information Technology (National Coordinator) governance mechanism. The health information technology management structure shall be responsible for all of the following:

(1)        Developing a State Plan for implementing and ensuring compliance with national health information technology standards and for the most efficient, effective, and widespread adoption of health information technology.

(2)        Ensuring that (i) specific populations are effectively integrated into the State Plan, including aging populations, populations requiring mental health services, and populations utilizing the public health system, and (ii) unserved and underserved populations receive priority consideration for health information technology support.

(3)        Identifying all health information technology stakeholders and soliciting feedback and participation from each stakeholder in the development of the State Plan.

(4)        Ensuring that existing health information technology capabilities are considered and incorporated into the State Plan.

(5)        Identifying and eliminating conflicting health information technology efforts where necessary.

(6)        Identifying available resources for the implementation, operation, and maintenance of health information technology, including identifying resources and available opportunities for North Carolina institutions of higher education.

(7)        Ensuring that potential State Plan participants are aware of health information technology policies and programs and the opportunity for improved health information technology.

(8)        Monitoring health information technology efforts and initiatives in other states and replicating successful efforts and initiatives in North Carolina.

(9)        Monitoring the development of the National Coordinator's strategic plan and ensuring that all stakeholders are aware of and in compliance with its requirements.

(10)      Monitoring the progress and recommendations of the Health Information Technology Policy and Standards Committee and ensuring that all stakeholders remain informed of the Committee's recommendations.

(11)      Monitoring all studies and reports provided to the United States Congress and reporting to the Joint Legislative Oversight Committee on Information Technology and the Fiscal Research Division on the impact of report recommendations on State efforts to implement coordinated health information technology."

 

FUNDS FOR MEDICAID MANAGEMENT INFORMATION SYSTEM/ANALYTICS REPROCUREMENT

SECTION 11A.2.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of one hundred forty‑two thousand seven hundred dollars ($142,700) in prior year earned revenues for the 2017‑2018 fiscal year and the sum of two hundred forty‑three thousand nine hundred sixty‑seven dollars ($243,967) in prior year earned revenues for the 2018‑2019 fiscal year shall be used to match federal funds to (i) determine enhancements necessary or plan the strategy to align the Medicaid Management Information System (MMIS) and Reporting and Analytics systems with federal Medicaid Information Technology Architecture standards and (ii) prepare for the procurement of a new MMIS contract and a new Reporting and Analytics contract, all as required by the federal Centers for Medicare and Medicaid Services. This project shall not proceed until the business case has been approved by the Office of State Budget and Management and the State Chief Information Officer in the Enterprise Project Management Office Touchdown System. Upon such approval, funds may be budgeted and the Department may create up to 10 full‑time equivalent time‑limited positions dedicated to the project for the 2018‑2019 fiscal year.

SECTION 11A.2.(b)  Departmental receipts appropriated in this act in the sum of one million two hundred eighty‑four thousand three hundred dollars ($1,284,300) for the 2017‑2018 fiscal year and in the sum of two million one hundred ninety‑five thousand seven hundred three dollars ($2,195,703) for the 2018‑2019 fiscal year shall be used for the purposes described in subsection (a) of this section.

 

FUNDS FOR NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH TECHNOLOGY (NC FAST)

SECTION 11A.3.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of eight million nine hundred thousand dollars ($8,900,000) in nonrecurring funds for the 2017‑2018 fiscal year and the sum of eleven million one hundred nine thousand dollars ($11,109,000) in nonrecurring funds for the 2018‑2019 fiscal year, along with prior year earned revenue in the amount of eleven million nine hundred thousand dollars ($11,900,000) for each year of the 2017‑2019 fiscal biennium and the cash balance in Budget Code 24410 Fund 2411 shall be used to match federal funds to expedite the development and implementation of Child Services Case Management, additional Medicaid eligibility requirements, Enterprise Program Integrity, and Identity Proofing Feasibility components of the North Carolina Families Accessing Services through Technology (NC FAST) project. The Department shall report any changes in approved federal funding or federal match rates within 30 days after the change to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division. Departmental receipts appropriated in this act in the sum of one hundred three million four hundred fifty thousand dollars ($103,450,000) for the 2017‑2018 fiscal year and in the sum of seventy‑five million five hundred ninety‑one thousand dollars ($75,591,000) for the 2018‑2019 fiscal year shall be used to implement the components of the NC FAST project described in this subsection.

SECTION 11A.3.(b)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of one million nine hundred thousand dollars ($1,900,000) in recurring funds for the 2017‑2018 fiscal year and seven million seven hundred thousand dollars ($7,700,000) in recurring funds for the 2018‑2019 fiscal year shall be used to provide ongoing maintenance and operations for the NC FAST system, including the creation of 32 full‑time equivalent positions for the 2017‑2018 fiscal year and 54 full‑time equivalent positions for the 2018‑2019 fiscal year. Departmental receipts appropriated in this act in the sum of ten million five hundred thousand dollars ($10,500,000) for the 2017‑2018 fiscal year and in the sum of fifteen million dollars ($15,000,000) for the 2018‑2019 fiscal year shall be used for the purposes specified in this subsection.

 

HEALTH ANALYTICS PROGRAM

SECTION 11A.4.  The Department of Health and Human Services shall continue to coordinate with the Government Data Analytics Center (GDAC) to further develop and fully operationalize the Health Analytics Program for Medicaid claims analytics and population health management authorized by Section 12A.17 of S.L. 2015‑241, as amended by Section 12A.7 of S.L. 2016‑94. In fulfilling its responsibilities with respect to developing and operationalizing the Health Analytics Program, the Department of Health and Human Services shall comply with G.S. 143B‑1385(c)(2)f. The purpose of the Health Analytics Program is to apply analytics to Medicaid data available to GDAC through the Department in a manner that maximizes health care savings and efficiencies to the State, optimizes positive impacts on health outcomes, and assists in the transition to, and management of, the transformed North Carolina Medicaid and North Carolina Health Choice programs as described in S.L. 2015‑245, as amended by Section 2 of S.L. 2016‑121.

 

HEALTH INFORMATION EXCHANGE

SECTION 11A.5.(a)  Section 12A.5(a)(1) of S.L. 2015‑241 reads as rewritten:

"(1)      Establish a successor HIE Network to which (i) all Medicaid providers shall be connected by February 1, 2018, and (ii) all other entities that receive State funds for the provision of health services, including local management entities/managed care organizations, shall be connected by June 1, 2018.the following providers and entities shall be connected to the HIE Network and begin submitting data through the HIE Network pertaining to services rendered to Medicaid beneficiaries and to other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds in accordance with the following time line:

a.         The following providers of Medicaid services that have an electronic health record system shall begin submitting demographic and clinical data by June 1, 2018:

1.         Hospitals as defined in G.S. 131E‑176(13).

2.         Physicians licensed to practice under Article 1 of Chapter 90 of the General Statutes.

3.         Physician assistants as defined in 21 NCAC 32S .0201.

4.         Nurse practitioners as defined in 21 NCAC 36 .0801.

b.         Except as provided in sub‑subdivision c. of this subdivision, all other providers of Medicaid and State‑funded health care services shall submit demographic and clinical data by June 1, 2019.

c.         The following entities shall submit encounter and claims data, as appropriate, in accordance with the following time line:

1.         Prepaid Health Plans, as defined in S.L. 2015‑245, by the commencement date of a capitated contract with the Division of Health Benefits for the delivery of Medicaid and NC Health Choice services as specified in S.L. 2015‑245.

2.         Local management entities/managed care organizations, as defined in G.S. 122C‑3, by June 1, 2020."

SECTION 11A.5.(b)  G.S. 90‑414.4 reads as rewritten:

"§ 90‑414.4.  Required participation in HIE Network for some providers.

(a)        Findings. – The General Assembly makes the following findings:

(1)        That controlling escalating health care costs of the Medicaid program and other State‑funded health services is of significant importance to the State, its taxpayers, its Medicaid recipients, and other recipients of State‑funded health services.

(2)        That the State needs timely access to certain demographic and clinical information pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds in order to assess performance, improve health care outcomes, pinpoint medical expense trends, identify beneficiary health risks, and evaluate how the State is spending money on Medicaid and other State‑funded health services.

(3)        That making demographic and clinical information available to the State by secure electronic means as set forth in subsection (b) of this section will, with respect to Medicaid and other State‑funded health care programs, improve care coordination within and across health systems, increase care quality for such beneficiaries, enable more effective population health management, reduce duplication of medical services, augment syndromic surveillance, allow more accurate measurement of care services and outcomes, increase strategic knowledge about the health of the population, and facilitate health care cost containment.

(a1)      Mandatory Connection to HIE Network. – Notwithstanding the voluntary nature of the HIE Network under G.S. 90‑414.2, the following providers and entities shall be connected to the HIE Network and begin submitting data through the HIE Network pertaining to services rendered to Medicaid beneficiaries and to other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds in accordance with the following time line:

(1)        The following providers of Medicaid services that have an electronic health record system shall begin submitting demographic and clinical data by June 1, 2018:

a.         Hospitals as defined in G.S. 131E‑176(13).

b.         Physicians licensed to practice under Article 1 of Chapter 90 of the General Statutes.

c.         Physician assistants as defined in 21 NCAC 32S .0201.

d.         Nurse practitioners as defined in 21 NCAC 36 .0801.

(2)        Except as provided in subdivision (3) of this subsection, all other providers of Medicaid and State‑funded health care services shall begin submitting demographic and clinical data by June 1, 2019.

(3)        The following entities shall submit encounter and claims data, as appropriate, in accordance with the following time line:

a.         Prepaid Health Plans, as defined in S.L. 2015‑245, by the commencement date of a capitated contract with the Division of Health Benefits for the delivery of Medicaid and NC Health Choice services as specified in S.L. 2015‑245.

b.         Local management entities/managed care organizations, as defined in G.S. 122C‑3, by June 1, 2020."

(a2)      Extensions of Time for Establishing Connection to the HIE Network. – The Department of Information Technology, in consultation with the Department of Health and Human Services, may establish a process to grant limited extensions of the time for providers and entities to connect to the HIE Network and begin submitting data as required by this section upon the request of a provider or entity that demonstrates an ongoing good‑faith effort to take necessary steps to establish such connection and begin data submission as required by this section. The process for granting an extension of time must include a presentation by the provider or entity to the Department of Information Technology and the Department of Health and Human Services on the expected time line for connecting to the HIE Network and commencing data submission as required by this section. Neither the Department of Information Technology nor the Department of Health and Human Services shall grant an extension of time (i) to any provider or entity that fails to provide this information to both Departments or (ii) that would result in the provider or entity connecting to the HIE Network and commencing data submission as required by this section later than June 1, 2020. The Department of Information Technology shall consult with the Department of Health and Human Services to review and decide upon a request for an extension of time under this section within 30 days after receiving a request for an extension.

(b)        Mandatory Submission of Demographic and Clinical Data. – Notwithstanding the voluntary nature of the HIE Network under G.S. 90‑414.2 and and, except as otherwise provided in subsection (c) of this section, as a condition of receiving State funds, including Medicaid funds, the following entities shall submit at least twice daily, through the HIE network, demographic and clinical information pertaining to services rendered to Medicaid and other State‑funded health care program beneficiaries and paid for with Medicaid or other State‑funded health care funds, solely for the purposes set forth in subsection (a) of this section:

(1)        Each hospital, as defined in G.S. 131E‑76(3), G.S. 131E‑176(13) that has an electronic health record system.

(2)        Each Medicaid provider.

(3)        Each provider that receives State funds for the provision of health services.

(4)        Each local management entity/managed care organization, as defined in G.S. 122C‑3.

(c)        Exemption for Certain Records. – Providers with patient records that are subject to the disclosure restrictions of 42 C.F.R. § 2 are exempt from the requirements of subsection (b) of this section but only with respect to the patient records subject to these disclosure restrictions. Providers shall comply with the requirements of subsection (b) of this section with respect to all other patient records.

(d)       Method of Data Submissions. – The daily data submissions required under this subsection section shall be by connection to the HIE Network periodic asynchronous secure structured file transfer or any other secure electronic means commonly used in the industry and consistent with document exchange and data submission standards established by the Office of the National Coordinator for Information Technology within the U.S. Department of Health and Human Services."

SECTION 11A.5.(c)  G.S. 90‑414.3(13) reads as rewritten:

"(13)    Opt out. – An individual's affirmative decision communicated to the Authority in writing to disallow his or her protected health information maintained by the Authority from being disclosed by the Authority to other covered entities or other persons or entities through the HIE Network."

SECTION 11A.5.(d)  G.S. 90‑414.9 reads as rewritten:

"§ 90‑414.9.  Participation by covered entities.

(a)        Each covered entity that participates in the HIE Network shall enter into a HIPAA compliant business associate agreement described in G.S. 90‑414.5(b)(8)G.S. 90‑414.7(b)(8) and a written participation agreement described in G.S. 90‑414.5(b)(6)G.S. 90‑414.7(b)(6) with the Authority or qualified organization prior to submitting data through or in the HIE Network.

(b)        Each covered entity that participates in the HIE Network may authorize its business associates on behalf of the covered entity to submit data through, or access data stored in, the HIE Network in accordance with this Article and at the discretion of the Authority, as provided in G.S. 90‑414.5(b)(8).G.S. 90‑414.7(b)(8).

(c)        Notwithstanding any federal or State law or regulation to the contrary, each covered entity that participates in the HIE Network may disclose an individual's protected health information through the HIE Network to other covered entities for any purpose permitted by HIPAA, unless the individual has exercised the right to opt out.HIPAA."

SECTION 11A.5.(e)  G.S. 90‑414.10 reads as rewritten:

"§ 90‑414.10.  Continuing right to opt out; effect of opt out.

(b)        The Authority or its designee shall enforce an individual's decision to opt out or rescind an opt out prospectively from the date the Authority or its designee receives written notice of the individual's decision to opt out or rescind an opt out in the manner prescribed by the Authority. An individual's decision to opt out or rescind an opt out does not affect any disclosures made by the Authority or covered entities through the HIE Network prior to receipt by the Authority or its designee of the individual's written notice to opt out or rescind an opt out.

(e)        The protected health information of an individual who has exercised the right to opt out may be disclosed through the HIE Network in order to facilitate the provision of emergency medical treatment to the individual if all of the following criteria are met:

(1)        The reasonably apparent circumstances indicate to the treating health care provider that (i) the individual has an emergency medical condition, (ii) a meaningful discussion with the individual about whether to rescind a previous decision to opt out is impractical due to the nature of the individual's emergency medical condition, and (iii) information available through the HIE Network could assist in the diagnosis or treatment of the individual's emergency medical condition.

(2)        The disclosure through the HIE Network is limited to the covered entities providing diagnosis and treatment of the individual's emergency medical condition.

(3)        The circumstances and extent of the disclosure through the HIE Network is recorded electronically in a manner that permits the NC HIE or its designee to periodically audit compliance with this subsection."

SECTION 11A.5.(f)  G.S. 90‑414.3(6) is repealed.

SECTION 11A.5.(g)  The Department of Health and Human Services shall include as one of the terms and conditions of any contract it enters into on or after the effective date of this section with a local management entity/managed care organization (LME/MCO), as defined in G.S. 122C‑3, or Prepaid Health Plan (PHP), as defined in S.L. 2015‑245, a requirement that the LME/MCO or PHP comply with the provisions of G.S. 90‑414.4, as amended by this subsection (b) of this section.

SECTION 11A.5.(h)  The Department of Health and Human Services, the Department of Information Technology, and the Division in the Department of State Treasurer responsible for the State Health Plan for Teachers and State Employees shall conduct a joint study of the feasibility and appropriateness of providers and entities, other than those specified in subdivision (1) of subsection (a1) of G.S. 90‑414.4, as amended by subsection (b) of this section, connecting with and submitting demographic and clinical data through the HIE Network and the feasibility and appropriateness of providers and entities, other than those specified in subdivision (3) of G.S. 90‑414.4, as amended by subsection (b) of this section, connecting with and submitting encounter and claims data through the HIE Network. As part of this study, the Departments and the Division in the Department of State Treasurer responsible for the State Health Plan for Teachers and State Employees shall examine at least all of the following:

(1)        The availability of connection, exchange, and data submission standards established by the Office of the National Coordinator for Information Technology within the U.S. Department of Health and Human Services.

(2)        The adoption of national standards for the connection, exchange, and data submission standards by provider type.

(3)        Cost estimates by provider type to connect and submit data to the HIE and any availability of federal or State funds to meet connection or submission requirements.

(4)        Data captured in the treatment of patients, segmented by provider type.

(5)        Activity of other states and payor plans with respect to the establishment of an HIE Network.

(6)        Alternatives to the connection and submission of demographic, clinical, encounter, and claims data through the HIE Network.

By April 1, 2018, the Department of Health and Human Services, the Department of Information Technology, and the Division in the Department of State Treasurer responsible for the State Health Plan for Teachers and State Employees shall jointly submit a final report of their findings and recommendations to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Oversight Committee on Information Technology.

SECTION 11A.5.(i)  Funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the 2017‑2018 fiscal year for the Health Information Exchange Network shall be used as follows:

(1)        The sum of three million dollars ($3,000,000) in nonrecurring funds shall be transferred by November 1, 2017, to the Department of Information Technology, Government Data Analytics Center, and shall be used to support all activities related to upgrading the data exchange technical environment.

(2)        The sum of one million dollars ($1,000,000) in recurring funds shall be used to provide ongoing maintenance and operations of the new data exchange technical environment.

 

CONTROLLED SUBSTANCES REPORTING SYSTEM IMPROVEMENTS

SECTION 11A.6.(a)  It is the intent of the General Assembly to improve the security and functionality capabilities of the Controlled Substances Reporting System (CSRS) in order to provide additional value to practitioners and dispensers within their current clinical workflows. To that end, of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of one million two hundred thousand dollars ($1,200,000) in recurring funds for the CSRS for each fiscal year of the 2017‑2019 fiscal biennium shall be used to pay for contractual hours to develop and implement software via existing public‑private partnerships with the Government Data and Analytics Center (GDAC) for the performance of advanced analytics within the CSRS. These hours shall be used to achieve the purposes specified in G.S. 90‑113.71 and, more specifically, to accomplish at least all of the following:

(1)        To enhance and automate reports authorized under G.S. 90‑113.74.

(2)        To enhance the Department's ability to provide data to persons or entities authorized to receive information under G.S. 90‑113.74. In improving the CSRS as specified in this subdivision, the Department shall utilize subject matter expertise and technology available through existing GDAC public‑private partnerships. Upon development and implementation of the advanced analytics software for the CSRS, the Division of Central Management and Support shall coordinate with the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the Division of Public Health, and any other appropriate division within the Department of Health and Human Services to ensure that advanced analytics are developed and utilized in a manner that achieves the purposes specified in G.S. 90‑113.71.

(3)        To aggregate relevant data sources, including those available through the GDAC.

(4)        To enhance the Department's ability to generate and deploy advanced analytics in order to improve opioid prescribing practices, identify unusual prescribing patterns, and detect behavior indicative of misuse, addiction, or criminal activity.

SECTION 11A.6.(b)  By December 1, 2017, the Department of Health and Human Services shall execute any contractual agreements and interagency data sharing agreements necessary to complete the improvements to the CSRS described in subdivisions (1) through (4) of subsection (a) of this section.

SECTION 11A.6.(c)  To the extent allowable under federal and State laws and regulations, the Department of Information Technology shall coordinate with the Department of Health and Human Services, Division of Central Management and Support and Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, to develop an interface between the CSRS and the Health Information Exchange (HIE) Network and leverage the interfaces already developed between the HIE Network and health care entities as a method of providing CSRS data, reports, and analytic outputs to health care practitioners and dispensers.

SECTION 11A.6.(d)  This section is effective when this act becomes law.

 

DATA ANALYTICS AND PERFORMANCE ENHANCEMENTS

SECTION 11A.7.  Any enhancement of the State's data analytics capabilities utilizing funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for each fiscal year of the 2017‑2019 fiscal biennium shall be subject to applicable State laws requiring that these analytics be developed and implemented in collaboration with the Government Data Analytics Center.

 

COMMUNITY HEALTH GRANT PROGRAM CHANGES

SECTION 11A.8.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, Office of Rural Health, for Community Health Grants, the sum of seven million five hundred thousand dollars ($7,500,000) in recurring funds for the 2017‑2018 fiscal year and the sum of seven million five hundred thousand dollars ($7,500,000) in recurring funds for the 2018‑2019 fiscal year shall be used as follows:

(1)        Up to two hundred thousand dollars ($200,000) in recurring funds for each fiscal year of the 2017‑2019 fiscal biennium shall be used to establish four permanent, full‑time equivalent positions within the Office of Rural Health to support administration of the Community Health Grant Program.

(2)        Up to two hundred thousand dollars ($200,000) in recurring funds for each fiscal year of the 2017‑2019 fiscal biennium may be used for administrative purposes.

(3)        At least six million nine hundred fifty thousand dollars ($6,950,000) in recurring funds for each fiscal year of the 2017‑2019 fiscal biennium shall be used to award grants on a competitive basis to free and charitable clinics, federally qualified health centers, State‑designated rural health centers, local health departments, school‑based health centers, and other nonprofit organizations that (i) provide primary and preventative medical services to uninsured or medically indigent patients and (ii) serve as a medical home to these vulnerable populations, in order to accomplish any of the following purposes:

a.         Increase access to primary care and preventative health services for these vulnerable populations in existing primary care locations.

b.         Establish primary care and preventative health services in counties where no such services exist to serve these vulnerable populations.

c.         Create new services, sustain existing service levels, or augment existing services provided to these vulnerable populations, including primary care and preventative health services and including dental, pharmacy, and behavioral health services when integrated into the medical home.

d.         Increase primary care capacity to serve these vulnerable populations, including enhancing or replacing facilities, equipment, or technologies necessary to participate in the exchange of data and tools to monitor and improve the quality of care provided.

SECTION 11A.8.(b)  The Office of Rural Health shall work with the North Carolina Community Health Center Association, the North Carolina Association of Local Health Directors, the North Carolina Association of Free and Charitable Clinics, the North Carolina School‑Based Health Alliance, and other organizations representing eligible grant recipients to establish a Primary Care Advisory Committee to develop an objective and equitable process for grading applications for grants funded by this section and making recommendations to the Office of Rural Health for the award of grants funded by this section.

The Office of Rural Health shall make the final decision about awarding grants funded by this section, but no single grant award shall exceed one hundred fifty thousand dollars ($150,000) during the fiscal year. In awarding grants, the Office of Rural Health shall consider the availability of other funds for the applicant; the incidence of poverty in the area served by the applicant or the number of indigent clients served by the applicant; the availability of, or arrangements for, after‑hours care; and collaboration between the applicant and a community hospital or other safety‑net organizations.

SECTION 11A.8.(c)  Grant recipients shall not use these funds to do any of the following:

(1)        Enhance or increase compensation or other benefits of personnel, administrators, directors, consultants, or any other persons receiving funds for program administration; provided, however, funds may be used to hire or retain health care providers. The use of grant funds for this purpose does not obligate the Department of Health and Human Services to continue to fund compensation beyond the grant period.

(2)        Supplant existing funds, including federal funds traditionally received by federally qualified community health centers. However, grant funds may be used to supplement existing programs that serve the purposes described in subsection (a) of this section.

(3)        Finance or satisfy any existing debt.

SECTION 11A.8.(d)  The Office of Rural Health shall develop a standardized method for grant recipients to report objective, measurable quality health outcomes and shall require grant recipients to report these quality health outcomes to the Department. Beginning recipients of grant funds shall annually provide to the Office of Rural Health a written report detailing the number of patients that are cared for, the types of services that were provided, quality measures and outcomes, and any other information requested by the Office of Rural Health as necessary for evaluating the success of the Community Health Grant Program.

SECTION 11A.8.(e)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, Office of Rural Health, for the Community Health Grant Program, the sum of up to one hundred fifty thousand dollars ($150,000) in recurring funds for each fiscal year of the 2017‑2019 fiscal biennium shall be used to match federal funds to provide to safety net providers eligible to participate in the Community Health Grant Program, through the Rural Health Technology Team, ongoing training and technical assistance with respect to health information technology, the adoption of electronic health records, and the establishment of connectivity to the State's health information exchange network known as NC HealthConnex.

 

RURAL HEALTH LOAN REPAYMENT PROGRAMS

SECTION 11A.9.  Article 3 of Chapter 143B of the General Statutes is amended by adding a new section to read:

"§ 143B‑139.4C.  Office of Rural Health; administration of loan repayment programs.

(a)        The Department of Health and Human Services, Office of Rural Health, shall use funds appropriated to the Department for loan repayment to medical, dental, and psychiatric providers practicing in State hospitals or in rural or medically underserved communities in this State to combine the following loan repayment programs in order to achieve efficient and effective management of these programs:

(1)        The Physician Loan Repayment Program.

(2)        The Psychiatric Loan Repayment Program.

(3)        The Loan Repayment Initiative at State Facilities.

(b)        These funds may be used for the following additional purposes:

(1)        Continued funding of the State Loan Repayment Program for primary care providers and expansion of State incentives to general surgeons practicing in Critical Access Hospitals located across the State.

(2)        Expansion of the State Loan Repayment Program to include eligible providers residing in North Carolina who use telemedicine in rural and underserved areas."

 

REDUCTION OF FUNDS FOR PURCHASED SERVICES

SECTION 11A.10.  The Department of Health and Human Services, Division of Central Management and Support, shall achieve the required reduction in purchased services by reducing Fund Code 1910 by the sum of three million two hundred thousand dollars ($3,200,000) in recurring funds for the 2017‑2018 fiscal year and by the sum of three million two hundred thousand dollars ($3,200,000) in recurring funds for the 2018‑2019 fiscal year. In making the reductions required by this section, the Department may implement department‑wide reductions in purchased services but shall not reduce any funds (i) that impact direct services provided through contracts or (ii) used to support the 2012 settlement agreement entered into between the United States Department of Justice and the State of North Carolina to ensure that the State will willingly meet the requirements of the Americans with Disabilities Act of 1990, Section 504 of the Rehabilitation Act of 1973, and the United States Supreme Court decision in Olmstead v. L.C., 527 U.S. 581 (1999).

 

OFFICE OF PROGRAM EVALUATION REPORTING AND ACCOUNTABILITY

SECTION 11A.11.(a)  The Department of Health and Human Services shall not use any funds appropriated in this act for the Office of Program Evaluation Reporting and Accountability for any purpose other than to establish and administer that Office and to implement the provisions of Part 31A of Article 3 of Chapter 143B of the General Statutes.

SECTION 11A.11.(b)  By December 1, 2017, the Department of Health and Human Services shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division on the establishment and operation of the Office of Program Evaluation Reporting and Accountability. The report shall include at least all of the following:

(1)        A breakdown of all expenditures from the funds appropriated to the Department since the 2015‑2016 fiscal year for the establishment and administration of the Office.

(2)        All steps taken by the Department to establish the Office pursuant to Part 31A of Article 3 of Chapter 143B of the General Statutes.

(3)        An organizational chart of the Office that includes all employees.

(4)        A list of all assessments and evaluations conducted or in progress by the Office.

(5)        An explanation of any obstacles to establishment and operation of the Office or fulfillment by the Office of any of the duties prescribed in G.S. 143B‑216.56.

 

CONTRACTING SPECIALIST AND CERTIFICATION PROGRAM

SECTION 11A.12.(a)  By September 1, 2017, the Department of Health and Human Services shall submit to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division the proposal prepared pursuant to Section 12A.4 of S.L. 2016‑94 by the School of Government at the University of North Carolina at Chapel Hill, in collaboration with the Director of Procurement, Contracts and Grants for the Department of Health and Human Services, for the implementation and administration of a contracting specialist training program for management level personnel within the Department. The proposal shall include a detailed description of the proposed program curriculum along with budget estimates for program implementation and administration based on the requirements of the program design.

SECTION 11A.12.(b)  This section is effective when this act becomes law.

 

GRADUATE MEDICAL EDUCATION FUNDING/CAPE FEAR VALLEY MEDICAL CENTER

SECTION 11A.13.(a)  Calculation of Nonrecurring Payment of Funds. – Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, for the 2017‑2018 fiscal year for Graduate Medical Education, the sum of up to three million dollars ($3,000,000) in nonrecurring funds shall be allocated to Cape Fear Valley Medical Center (the Center) to support the establishment of residency programs affiliated with Campbell University School of Medicine. Subject to fulfillment of the conditions specified in subsection (b) of this section, the nonrecurring amount of funds allocated to the Center pursuant to this section shall be equal to the total amount of actual lost Medicare payments for admissions to the Center prior to October 1, 2017, attributed to the Center's reclassification by the federal Centers for Medicare and Medicaid Services (CMS) as a rural hospital or rural referral center or any other change approved by CMS, up to a maximum of three million dollars ($3,000,000).

SECTION 11A.13.(b)  Conditions for Payment of Funds. – No funds shall be paid to the Center pursuant to the calculation specified in subsection (a) of this section until the Office of State Budget and Management (OSBM) certifies, in writing, all of the following:

(1)        The amount of actual lost Medicare payments for admissions to the Center prior to October 1, 2017, attributed to the Center's reclassification by the federal Centers for Medicare and Medicaid Services (CMS) as a rural hospital or rural referral center or any other change approved by CMS.

(2)        That the Center has maintained approval from CMS for reclassification as a rural hospital or rural referral center.

(3)        That the Center has maintained approval from the Accreditation Council for Graduate Medical Education or the American Osteopathic Association for residency programs with a minimum of 130 additional residency slots.

SECTION 11A.13.(c)  Report on Use of Funds. – The Center shall report on or before April 1, 2018, to the House Appropriations Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal Research Division regarding its progress in establishing any residency programs funded by State appropriations.

SECTION 11A.13.(d)  Any funds not obligated or encumbered for the purposes specified in this section by June 30, 2018, shall revert to the General Fund.

SECTION 11A.13.(e)  Section 12A.8 of S.L. 2016‑94, as amended by Section 5.1 of S.L. 2016‑123, is repealed.

 

COMPETITIVE GRANTS/NONPROFIT ORGANIZATIONS

SECTION 11A.14.(a)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, the sum of ten million six hundred fifty‑three thousand nine hundred eleven dollars ($10,653,911) for each year of the 2017‑2019 fiscal biennium, the sum of four million five hundred twenty‑four thousand five hundred twenty‑five dollars ($4,524,525) for each year of the 2017‑2019 fiscal biennium appropriated in Section 11L.1 of this act in Social Services Block Grant funds, and the sum of one million six hundred thousand dollars ($1,600,000) for each year of 2017‑2019 fiscal biennium in Section 11L.1 of this act in Substance Abuse Prevention and Treatment Block Grant funds shall be used to allocate funds for nonprofit organizations.

SECTION 11A.14.(b)  The Department shall continue administering a competitive grants process for nonprofit funding. The Department shall administer a plan that, at a minimum, includes each of the following:

(1)        A request for application (RFA) process to allow nonprofits to apply for and receive State funds on a competitive basis. The Department shall require nonprofits to include in the application a plan to evaluate the effectiveness, including measurable impact or outcomes, of the activities, services, and programs for which the funds are being requested.

(2)        A requirement that nonprofits match a minimum of fifteen percent (15%) of the total amount of the grant award.

(3)        A requirement that the Secretary prioritize grant awards to those nonprofits that are able to leverage non‑State funds in addition to the grant award.

(4)        A process that awards grants to nonprofits that have the capacity to provide services on a statewide basis and that support any of the following State health and wellness initiatives:

a.         A program targeting advocacy, support, education, or residential services for persons diagnosed with autism.

b.         A system of residential supports for those afflicted with substance abuse addiction.

c.         A program of advocacy and supports for individuals with intellectual and developmental disabilities or severe and persistent mental illness, substance abusers, or the elderly.

d.         Supports and services to children and adults with developmental disabilities or mental health diagnoses.

e.         A food distribution system for needy individuals.

f.          The provision and coordination of services for the homeless.

g.         The provision of services for individuals aging out of foster care.

h.         Programs promoting wellness, physical activity, and health education programming for North Carolinians.

i.          The provision of services and screening for blindness.

j.          A provision for the delivery of after‑school services for apprenticeships or mentoring at‑risk youth.

k.         The provision of direct services for amyotrophic lateral sclerosis (ALS) and those diagnosed with the disease.

l.          A comprehensive smoking prevention and cessation program that screens and treats tobacco use in pregnant women and postpartum mothers.

m.        A program providing short‑term or long‑term residential substance abuse services. For purposes of this sub‑subdivision, "long‑term" means a minimum of 12 months.

n.         A program that provides year‑round sports training and athletic competition for children and adults with disabilities.

It is the intent of the General Assembly that annually the Secretary evaluate and prioritize the categories of health and wellness initiatives described under this subdivision to determine the best use of these funds in making grant awards, exclusive of direct allocations made by the General Assembly.

(5)        A process that ensures that funds received by the Department to implement the plan supplement and do not supplant existing funds for health and wellness programs and initiatives.

(6)        A process that allows grants to be awarded to nonprofits for up to two years.

(7)        A requirement that initial disbursement of the grants be awarded no later than 30 days after certification of the State budget for the respective fiscal year.

SECTION 11A.14.(c)  No later than July 1 of each year, as applicable, the Secretary shall announce the recipients of the competitive grant awards and allocate funds to the grant recipients for the respective grant period pursuant to the amounts designated under subsection (a) of this section. After awards have been granted, by September 1 of each year, the Secretary shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services on the grant awards that includes at least all of the following:

(1)        The identity and a brief description of each grantee and each program or initiative offered by the grantee.

(2)        The amount of funding awarded to each grantee.

(3)        The number of persons served by each grantee, broken down by program or initiative.

SECTION 11A.14.(d)  No later than December 1 of each fiscal year, each nonprofit organization receiving funding pursuant to this section in the respective fiscal year shall submit to the Division of Central Management and Support a written report of all activities funded by State appropriations. The report shall include the following information about the fiscal year preceding the year in which the report is due:

a.         The entity's mission, purpose, and governance structure.

b.         A description of the types of programs, services, and activities funded by State appropriations.

c.         Statistical and demographical information on the number of persons served by these programs, services, and activities, including the counties in which services are provided.

d.         Outcome measures that demonstrate the impact and effectiveness of the programs, services, and activities.

e.         A detailed program budget and list of expenditures, including all positions funded, matching expenditures, and funding sources.

SECTION 11A.14.(e)  For the 2017‑2019 fiscal biennium only, from the funds identified in subsection (a) of this section, the Department shall make allocations as follows:

(1)        The sum of three hundred fifty thousand dollars ($350,000) in each year of the 2017‑2019 fiscal biennium to provide grants to Big Brothers Big Sisters. Big Brothers Big Sisters shall be required to seek future funding through the competitive grants process in accordance with subsection (b) of this section.

(2)        The sum of one million six hundred twenty‑five thousand dollars ($1,625,000) for each year of the 2017‑2019 fiscal biennium and the sum of one million six hundred thousand dollars ($1,600,000) in Section 11L.1 of this act in Substance Abuse Prevention and Treatment Block Grant funds in each year of the 2017‑2019 fiscal biennium to Triangle Residential Options for Substance Abusers, Inc., (TROSA) for the purpose of assisting individuals with substance abuse addiction. TROSA shall be required to seek future funding through the competitive grants process in accordance with subsection (b) of this section.

(3)        The sum of two million seven hundred fifty thousand dollars ($2,750,000) in each year of the 2017‑2019 fiscal biennium to provide grants to Boys and Girls Clubs across the State to implement (i) programs that improve the motivation, performance, and self‑esteem of youth and (ii) other initiatives that would be expected to reduce gang participation, school dropout, and teen pregnancy rates. Boys and Girls Clubs shall be required to seek future funding through the competitive grants process in accordance with subsection (b) of this section.

SECTION 11A.14.(f)  Funds appropriated pursuant to this section that have been awarded but not yet disbursed or encumbered at the end of each fiscal year shall not revert but shall remain available for expenditure.

SECTION 11A.14.(g)  G.S. 143B‑139.2A is repealed.

 

SUBPART XI‑B. DIVISION OF CHILD DEVELOPMENT AND EARLY EDUCATION

 

NC PRE‑K PROGRAM/STANDARDS FOR FOUR‑ AND FIVE‑STAR RATED FACILITIES

SECTION 11B.1.(a)  Eligibility. – The Department of Health and Human Services, Division of Child Development and Early Education, shall continue implementing the prekindergarten program (NC Pre‑K). The NC Pre‑K program shall serve children who are four years of age on or before August 31 of the program year. In determining eligibility, the Division shall establish income eligibility requirements for the program not to exceed seventy‑five percent (75%) of the State median income. Up to twenty percent (20%) of children enrolled may have family incomes in excess of seventy‑five percent (75%) of median income if those children have other designated risk factors. Furthermore, any age‑eligible child who is a child of either of the following shall be eligible for the program: (i) an active duty member of the Armed Forces of the United States, including the North Carolina National Guard, State military forces, or a reserve component of the Armed Forces who was ordered to active duty by the proper authority within the last 18 months or is expected to be ordered within the next 18 months, or (ii) a member of the Armed Forces of the United States, including the North Carolina National Guard, State military forces, or a reserve component of the Armed Forces who was injured or killed while serving on active duty. Eligibility determinations for NC Pre‑K participants may continue through local education agencies and local North Carolina Partnership for Children, Inc., partnerships.

Other than developmental disabilities or other chronic health issues, the Division shall not consider the health of a child as a factor in determining eligibility for participation in the NC Pre‑K program.

SECTION 11B.1.(b)  Multiyear Contracts. – The Division of Child Development and Early Education shall require the NC Pre‑K contractor to issue multiyear contracts for licensed private child care centers providing NC Pre‑K classrooms.

SECTION 11B.1.(b1)  Building Standards. – Notwithstanding G.S. 110‑91(4), private child care facilities and public schools operating NC Pre‑K classrooms shall meet the building standards for preschool students as provided in G.S. 115C‑521.1.

SECTION 11B.1.(c)  Programmatic Standards. – Except as provided in subsection (b1) of this section, entities operating NC Pre‑K classrooms shall adhere to all of the policies prescribed by the Division of Child Development and Early Education regarding programmatic standards and classroom requirements.

SECTION 11B.1.(d)  NC Pre‑K Committees. – Local NC Pre‑K committees shall use the standard decision‑making process developed by the Division of Child Development and Early Education in awarding NC Pre‑K classroom slots and student selection.

SECTION 11B.1.(e)  Reporting. – The Division of Child Development and Early Education shall submit an annual report no later than March 15 of each year to the Joint Legislative Oversight Committee on Health and Human Services, the Office of State Budget and Management, and the Fiscal Research Division. The report shall include the following:

(1)        The number of children participating in the NC Pre‑K program by county.

(2)        The number of children participating in the NC Pre‑K program who have never been served in other early education programs such as child care, public or private preschool, Head Start, Early Head Start, or early intervention programs.

(3)        The expected NC Pre‑K expenditures for the programs and the source of the local contributions.

(4)        The results of an annual evaluation of the NC Pre‑K program.

SECTION 11B.1.(f)  Audits. – The administration of the NC Pre‑K program by local partnerships shall be subject to the financial and compliance audits authorized under G.S. 143B‑168.14(b).

 

STATE AGENCY CONTINUED COLLABORATION ON EARLY CHILDHOOD EDUCATION/TRANSITION FROM PRESCHOOL TO KINDERGARTEN

SECTION 11B.2.(a)  The Department of Health and Human Services, in consultation with the Department of Public Instruction and any other agencies or organizations that administer, support, or study early education in this State, and within resources currently available, shall continue to collaborate on an ongoing basis in the development and implementation of a statewide vision for early childhood education. In collaborating in this effort, the agencies shall continue developing a comprehensive approach to early childhood education, birth through third grade, including creating cross agency accountability with a comprehensive set of data indicators, including consideration of the NC Pathways to Grade‑Level Reading, to monitor and measure success of the early childhood education systems.

SECTION 11B.2.(b)  The Department of Health and Human Services, the Department of Public Instruction, and any other agencies or organizations that administer, support, or study early education programs in this State shall submit a follow‑up report of their findings and recommendations, including any legislative proposals, on the statewide vision for early childhood education pursuant to subsection (a) of this section to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Education Oversight Committee on or before January 1, 2018, and may make any subsequent reports, annually, on or before January 1, as needed to those same committees.

SECTION 11B.2.(c)  The Department of Health and Human Services, in consultation with the Department of Public Instruction, shall continue developing a standardized program to transition children from preschool to kindergarten. In developing this standardized transition program, the Department of Health and Human Services shall identify, at a minimum:

(1)        Methods to standardize student transition information such that it is quantifiable.

(2)        Recommendations for sharing data contained in a student's transition plan between preschool teachers and either kindergarten teachers or the schools that receive the incoming kindergarten students.

(3)        Recommendations for sharing data contained in a student's transition plan between preschool teachers and the parents or guardians of the child who is transitioning to kindergarten.

(4)        Recommendations for preschool teacher training and continuing education to support their role in completing transition plans for preschool children.

(5)        Recommendations for baseline information that should be compiled in transition plans for students transitioning to kindergarten.

(6)        Procedures for the management of transition plan documents, including recommendations for the length of records retention, provisions for confidentiality, and proper disposal.

(7)        Any other components the Department deems appropriate in the provision of information between preschools, students' families, and kindergartens.

SECTION 11B.2.(d)  The Department of Health and Human Services shall report on the development of the standardized transition program required pursuant to subsection (c) of this section, including any findings and recommendations and any legislative proposals, to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Education Oversight Committee on or before January 1, 2018.

 

CHILD CARE SUBSIDY RATES

SECTION 11B.3.(a)  The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be determined based on a percentage of the federal poverty level as follows:

AGE                                                              INCOME PERCENTAGE LEVEL

0 – 5                                                                                        200%

6 – 12                                                                                      133%

The eligibility for any child with special needs, including a child who is 13 years of age or older, shall be two hundred percent (200%) of the federal poverty level.

SECTION 11B.3.(b)  Fees for families who are required to share in the cost of care are established based on ten percent (10%) of gross family income. When care is received at the blended rate, the co‑payment shall be eighty‑three percent (83%) of the full‑time co‑payment. Co‑payments for part‑time care shall be seventy‑five percent (75%) of the full‑time co‑payment.

SECTION 11B.3.(c)  Payments for the purchase of child care services for low‑income children shall be in accordance with the following requirements:

(1)        Religious sponsored child care facilities operating pursuant to G.S. 110‑106 and licensed child care centers and homes that meet the minimum licensing standards that are participating in the subsidized child care program shall be paid the one‑star county market rate or the rate they charge privately paying parents, whichever is lower, unless prohibited by subsection (f) of this section.

(2)        Licensed child care centers and homes with two or more stars shall receive the market rate for that rated license level for that age group or the rate they charge privately paying parents, whichever is lower, unless prohibited by subsection (g) of this section.

(3)        Nonlicensed homes shall receive fifty percent (50%) of the county market rate or the rate they charge privately paying parents, whichever is lower.

(4)        No payments shall be made for transportation services or registration fees charged by child care facilities.

(5)        Payments for subsidized child care services for postsecondary education shall be limited to a maximum of 20 months of enrollment.

(6)        The Department of Health and Human Services shall implement necessary rule changes to restructure services, including, but not limited to, targeting benefits to employment.

SECTION 11B.3.(d)  Provisions of payment rates for child care providers in counties that do not have at least 50 children in each age group for center‑based and home‑based care are as follows:

(1)        Except as applicable in subdivision (2) of this subsection, payment rates shall be set at the statewide or regional market rate for licensed child care centers and homes.

(2)        If it can be demonstrated that the application of the statewide or regional market rate to a county with fewer than 50 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low‑income children, then the county market rate may be applied.

SECTION 11B.3.(e)  A market rate shall be calculated for child care centers and homes at each rated license level for each county and for each age group or age category of enrollees and shall be representative of fees charged to parents for each age group of enrollees within the county. The Division of Child Development and Early Education shall also calculate a statewide rate and regional market rate for each rated license level for each age category.

SECTION 11B.3.(f)  The Division of Child Development and Early Education shall continue implementing policies that improve the quality of child care for subsidized children, including a policy in which child care subsidies are paid, to the extent possible, for child care in the higher quality centers and homes only. The Division shall define higher quality, and subsidy funds shall not be paid for one‑ or two‑star rated facilities. For those counties with an inadequate number of four‑ and five‑star rated facilities, the Division shall continue a transition period that allows the facilities to continue to receive subsidy funds while the facilities work on the increased star ratings. The Division may allow exemptions in counties where there is an inadequate number of four‑ and five‑star rated facilities for non‑star rated programs, such as religious programs.

SECTION 11B.3.(g)  Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statutes and facilities operated pursuant to G.S. 110‑106 may participate in the program that provides for the purchase of care in child care facilities for minor children of needy families. Except as authorized by subsection (f) of this section, no separate licensing requirements shall be used to select facilities to participate. In addition, child care facilities shall be required to meet any additional applicable requirements of federal law or regulations. Child care arrangements exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall meet the requirements established by other State law and by the Social Services Commission.

County departments of social services or other local contracting agencies shall not use a provider's failure to comply with requirements in addition to those specified in this subsection as a condition for reducing the provider's subsidized child care rate.

SECTION 11B.3.(h)  Payment for subsidized child care services provided with Temporary Assistance for Needy Families Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development and Early Education for the subsidized child care program.

SECTION 11B.3.(i)  Noncitizen families who reside in this State legally shall be eligible for child care subsidies if all other conditions of eligibility are met. If all other conditions of eligibility are met, noncitizen families who reside in this State illegally shall be eligible for child care subsidies only if at least one of the following conditions is met:

(1)        The child for whom a child care subsidy is sought is receiving child protective services or foster care services.

(2)        The child for whom a child care subsidy is sought is developmentally delayed or at risk of being developmentally delayed.

(3)        The child for whom a child care subsidy is sought is a citizen of the United States.

SECTION 11B.3.(j)  The Department of Health and Human Services, Division of Child Development and Early Education, shall require all county departments of social services to include on any forms used to determine eligibility for child care subsidy whether the family waiting for subsidy is receiving assistance through the NC Pre‑K Program or Head Start.

SECTION 11B.3.(k)  Department of Defense‑certified child care facilities licensed pursuant to G.S. 110‑106.2 may participate in the State‑subsidized child care program that provides for the purchase of care in child care facilities for minor children in needy families, provided that funds allocated from the State‑subsidized child care program to Department of Defense‑certified child care facilities shall supplement and not supplant funds allocated in accordance with G.S. 143B‑168.15(g). Payment rates and fees for military families who choose Department of Defense‑certified child care facilities and who are eligible to receive subsidized child care shall be as set forth in this section.

 

CHILD CARE SUBSIDY MARKET RATE INCREASES/CERTAIN AGE GROUPS AND COUNTIES

SECTION 11B.4.(a)  Beginning October 1, 2017, the Department of Health and Human Services, Division of Child Development and Early Education (Division), shall increase the child care subsidy market rates to the rates recommended by the 2015 Child Care Market Rate Study for school‑aged children in three‑, four‑, and five‑star‑rated child care centers and homes in tier one and tier two counties.

SECTION 11B.4.(b)  Beginning October 1, 2017, the Division shall increase the child care subsidy market rates to the rates recommended by the 2015 Child Care Market Rate Study for children birth through two years of age in three‑, four‑, and five‑star‑rated child care centers and homes in tier three counties.

SECTION 11B.4.(c)  For purposes of this section, tier one, tier two, and tier three counties shall have the same designations as those established by the N.C. Department of Commerce's 2015 County Tier Designations.

 

CHILD CARE ALLOCATION FORMULA

SECTION 11B.5.(a)  The Department of Health and Human Services, Division of Child Development and Early Education (Division), shall allocate child care subsidy voucher funds to pay the costs of necessary child care for minor children of needy families. The mandatory thirty percent (30%) North Carolina Partnership for Children, Inc., subsidy allocation under G.S. 143B‑168.15(g) shall constitute the base amount for each county's child care subsidy allocation. The Department of Health and Human Services shall use the following method when allocating federal and State child care funds, not including the aggregate mandatory thirty percent (30%) North Carolina Partnership for Children, Inc., subsidy allocation:

(1)        Funds shall be allocated to a county based upon the projected cost of serving children under age 11 in families with all parents working who earn less than the applicable federal poverty level percentage set forth in Section 11B.3(a) of this act.

(2)        The Division may withhold up to two percent (2%) of available funds from the allocation formula for (i) preventing termination of services throughout the fiscal year and (ii) repayment of any federal funds identified by counties as overpayments, including overpayments due to fraud. The Division shall allocate to counties any funds withheld before the end of the fiscal year when the Division determines the funds are not needed for the purposes described in this subdivision. The Division shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division, which report shall include each of the following:

a.         The amount of funds used for preventing termination of services and the repayment of any federal funds.

b.         The date the remaining funds were distributed to counties.

c.         As a result of funds withheld under this subdivision and after funds have been distributed, any counties that did not receive at least the amount the counties received the previous year and the amount by which funds were decreased.

The Division shall submit a report in each year of the 2017‑2019 fiscal biennium 30 days after the funds withheld pursuant to this subdivision are distributed but no later than April 1 of each respective year.

(3)        The Division shall set aside four percent (4%) of child care subsidy allocations for vulnerable populations, which include a child identified as having special needs and a child whose application for assistance indicates that the child and the child's family is experiencing homelessness or is in a temporary living situation. A child identified by this subdivision shall be given priority for receiving services until such time as set‑aside allocations for vulnerable populations are exhausted.

SECTION 11B.5.(b)  The Division may reallocate unused child care subsidy voucher funds in order to meet the child care needs of low‑income families. Any reallocation of funds shall be based upon the expenditures of all child care subsidy voucher funding, including North Carolina Partnership for Children, Inc., funds within a county. Counties shall manage service levels within the funds allocated to the counties. A county with a spending coefficient over one hundred percent (100%) shall submit a plan to the Division for managing the county's allocation before receiving any reallocated funds.

SECTION 11B.5.(c)  When implementing the formula under subsection (a) of this section, the Division shall include the market rate increase in the formula process rather than calculating the increases outside of the formula process. Additionally, the Department shall do the following:

(1)        Implement the final one‑third change in a county's allocation beginning fiscal year 2018‑2019. A county's initial allocation shall be the county's expenditure in the previous fiscal year or a prorated share of the county's previous fiscal year expenditures if sufficient funds are not available. With the exception of market rate increases consistent with any increases approved by the General Assembly, a county whose spending coefficient is less than ninety‑two percent (92%) in the previous fiscal year shall receive its prior year's expenditure as its allocation and shall not receive an increase in its allocation in the following year. A county whose spending coefficient is at least ninety‑two percent (92%) in the previous fiscal year shall receive, at a minimum, the amount it expended in the previous fiscal year and may receive additional funding, if available. The Division may waive this requirement and allow an increase if the spending coefficient is below ninety‑two percent (92%) due to extraordinary circumstances, such as a State or federal disaster declaration in the affected county. By October 1 of each year, the Division shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division the counties that received a waiver pursuant to this subdivision and the reasons for the waiver.

(2)        Effective immediately following the next new decennial census data release, implement (i) one‑third of the change in a county's allocation in the year following the data release, (ii) an additional one‑third of the change in a county's allocation beginning two years after the initial change under this subdivision, and (iii) the final one‑third change in a county's allocation beginning the following two years thereafter.

 

CODIFY CERTAIN CHILD CARE SUBSIDY PROVISIONS

SECTION 11B.6.  Article 3 of Chapter 143B of the General Statutes is amended by adding a new Part to read:

"Part 10C. Child Care Subsidy.

"§ 143B‑168.25.  Child care funds matching requirements.

No local matching funds may be required by the Department of Health and Human Services as a condition of any locality's receiving its initial allocation of child care funds unless federal law requires a match. If the Department reallocates additional funds above twenty‑five thousand dollars ($25,000) to local purchasing agencies beyond their initial allocation, local purchasing agencies must provide a twenty percent (20%) local match to receive the reallocated funds. Matching requirements shall not apply when funds are allocated because of an emergency as defined in G.S. 166A‑19.3(6).

"§ 143B‑168.26.  Child care revolving loan.

Notwithstanding any law to the contrary, funds budgeted for the Child Care Revolving Loan Fund may be transferred to and invested by the financial institution contracted to operate the Fund. The principal and any income to the Fund may be used to make loans, reduce loan interest to borrowers, serve as collateral for borrowers, pay the contractor's cost of operating the Fund, or pay the Department's cost of administering the program.

"§ 143B‑168.27.  Administrative allowance for county departments of social services; use of subsidy funds for fraud detection.

(a)        The Department of Health and Human Services, Division of Child Development and Early Education (Division), shall fund the allowance that county departments of social services may use for administrative costs at four percent (4%) of the county's total child care subsidy funds allocated in the Child Care and Development Fund Block Grant plan or eighty thousand dollars ($80,000), whichever is greater.

(b)        Each county department of social services may use up to two percent (2%) of child care subsidy funds allocated to the county for fraud detection and investigation initiatives.

(c)        The Division may adjust the allocations in the Child Care and Development Fund Block Grant according to (i) the final allocations for local departments of social services under subsection (a) of this section and (ii) the funds allocated for fraud detection and investigation initiatives under subsection (b) of this section. The Division shall submit a report on the final adjustments to the allocations of the four percent (4%) administrative costs to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than September 30 of each year."

 

CHILD CARE SUBSIDY RECIPIENTS TO COOPERATE WITH CHILD SUPPORT SERVICES/DEMONSTRATION PROJECT

SECTION 11B.7.(a)  Beginning January 1, 2018, or 30 days from the date the U.S. Department of Health and Human Services, Office of Child Care, approves the revised Child Care and Development Fund (CCDF) plan, or whichever occurs later, the Department of Health and Human Services, the Division of Child Development and Early Education (DCDEE) and the Division of Social Services (DSS), shall implement a one‑year statewide demonstration project in accordance with S.L. 2015‑51 requiring a custodial parent or other relative or person with primary custody of the child who is receiving child care subsidy payments to cooperate with the county child support services program as a condition of receiving child care subsidy payments. DCDEE and DSS shall conduct the demonstration project in at least three counties, but no more than six, that represent the three regions of the State in both rural and urban settings. DCDEE and DSS may solicit counties to volunteer for the demonstration project. In selecting counties to participate in the demonstration project, DCDEE and DSS shall (i) consider the various methods counties employ in receiving and processing child care subsidy applications and (ii) compare the data from the counties participating in the demonstration project to counties that are similarly sized and situated that do not participate in the demonstration project.

SECTION 11B.7.(b)  The statewide demonstration project shall include, at a minimum, the components described in Section 1(a) of S.L. 2015‑51, as well as any criteria DCDEE and DSS identified in its report as submitted to the Joint Legislative Oversight Committee on Health and Human Services dated February 1, 2016. Specifically, as identified in that report, DCDEE and DSS shall consider, at a minimum, each of the following factors in evaluating the demonstration project:

(1)        The number and percentage of applicants for whom the requirement to participate in child support services was presented who actually submitted a child support application and applied for and received subsidized child care assistance.

(2)        The number and percentage of families exempted from the requirement under subdivision (1) of this subsection through goodcause exceptions.

(3)        The number and percentage of families that initially receive child support payments but become ineligible for subsidized child care assistance as a result of their increased income or family status.

(4)        The number and percentage of families enrolled in the subsidized child care assistance program at the beginning of the demonstration project that exit the program due to imposed requirements for child support cooperation.

(5)        The number and percentage of applicants who declined to apply or withdrew their application as a result of the requirement to cooperate with child support services.

(6)        The number and percentage of child care subsidy recipients who begin receiving child support or, if receiving child support, the average increase in the recipients' child support received due to imposed requirements for child support cooperation.

SECTION 11B.7.(c)  The Division of Child Development and Early Education and the Division of Social Services shall report on the results of the demonstration project to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division no later than March 1, 2019, or if the CCDF plan is approved after January 1, 2018, no later than three months from the date the one‑year demonstration project is completed, whichever occurs later. The report shall include, at a minimum, each of the following:

(1)        The factors evaluated under subsection (a) of this section.

(2)        A detailed project plan and any costs associated with implementing the plan, specifically, any technology needs.

(3)        Any recommendations for or challenges with sustaining the plan long term.

 

SMART START INITIATIVES

SECTION 11B.8.(a)  Policies. – The North Carolina Partnership for Children, Inc., and its Board shall ensure policies focus on the North Carolina Partnership for Children, Inc.'s mission of improving child care quality in North Carolina for children from birth to five years of age. North Carolina Partnership for Children, Inc.‑funded activities shall include assisting child care facilities with (i) improving quality, including helping one‑, two‑, and three‑star‑rated facilities increase their star ratings, and (ii) implementing prekindergarten programs. State funding for local partnerships shall also be used for evidence‑based or evidence‑informed programs for children from birth to five years of age that do the following:

(1)        Increase children's literacy.

(2)        Increase the parents' ability to raise healthy, successful children.

(3)        Improve children's health.

(4)        Assist four‑ and five‑star‑rated facilities in improving and maintaining quality.

SECTION 11B.8.(b)  Administration. – Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships. For purposes of this subsection, administrative costs shall include costs associated with partnership oversight, business and financial management, general accounting, human resources, budgeting, purchasing, contracting, and information systems management. The North Carolina Partnership for Children, Inc., shall continue using a single statewide contract management system that incorporates features of the required standard fiscal accountability plan described in G.S. 143B‑168.12(a)(4). All local partnerships are required to participate in the contract management system and, directed by the North Carolina Partnership for Children, Inc., to collaborate, to the fullest extent possible, with other local partnerships to increase efficiency and effectiveness.

SECTION 11B.8.(c)  Salaries. – The salary schedule developed and implemented by the North Carolina Partnership for Children, Inc., shall set the maximum amount of State funds that may be used for the salary of the Executive Director of the North Carolina Partnership for Children, Inc., and the directors of the local partnerships. The North Carolina Partnership for Children, Inc., shall base the schedule on the following criteria:

(1)        The population of the area serviced by a local partnership.

(2)        The amount of State funds administered.

(3)        The amount of total funds administered.

(4)        The professional experience of the individual to be compensated.

(5)        Any other relevant factors pertaining to salary, as determined by the North Carolina Partnership for Children, Inc.

The salary schedule shall be used only to determine the maximum amount of State funds that may be used for compensation. Nothing in this subsection shall be construed to prohibit a local partnership from using non‑State funds to supplement an individual's salary in excess of the amount set by the salary schedule established under this subsection.

SECTION 11B.8.(d)  Match Requirements. – The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match one hundred percent (100%) of the total amount budgeted for the program in each fiscal year of the 2017‑2019 biennium. Of the funds the North Carolina Partnership for Children, Inc., and the local partnerships are required to match, contributions of cash shall be equal to at least thirteen percent (13%) and in‑kind donated resources shall be equal to no more than six percent (6%) for a total match requirement of nineteen percent (19%) for each year of the 2017‑2019 fiscal biennium. The North Carolina Partnership for Children, Inc., may carry forward any amount in excess of the required match for a fiscal year in order to meet the match requirement of the succeeding fiscal year. Only in‑kind contributions that are quantifiable shall be applied to the in‑kind match requirement. Volunteer services may be treated as an in‑kind contribution for the purpose of the match requirement of this subsection. Volunteer services that qualify as professional services shall be valued at the fair market value of those services. All other volunteer service hours shall be valued at the statewide average wage rate as calculated from data compiled by the Division of Employment Security of the Department of Commerce in the Employment and Wages in North Carolina Annual Report for the most recent period for which data are available. Expenses, including both those paid by cash and in‑kind contributions, incurred by other participating non‑State entities contracting with the North Carolina Partnership for Children, Inc., or the local partnerships also may be considered resources available to meet the required private match. In order to qualify to meet the required private match, the expenses shall:

(1)        Be verifiable from the contractor's records.

(2)        If in‑kind, other than volunteer services, be quantifiable in accordance with generally accepted accounting principles for nonprofit organizations.

(3)        Not include expenses funded by State funds.

(4)        Be supplemental to and not supplant preexisting resources for related program activities.

(5)        Be incurred as a direct result of the Early Childhood Initiatives Program and be necessary and reasonable for the proper and efficient accomplishment of the Program's objectives.

(6)        Be otherwise allowable under federal or State law.

(7)        Be required and described in the contractual agreements approved by the North Carolina Partnership for Children, Inc., or the local partnership.

(8)        Be reported to the North Carolina Partnership for Children, Inc., or the local partnership by the contractor in the same manner as reimbursable expenses.

Failure to obtain a nineteen‑percent (19%) match by June 30 of each year of the 2017‑2019 fiscal biennium shall result in a dollar‑for‑dollar reduction in the appropriation for the Program for a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in‑kind contributions into a report that is submitted to the Joint Legislative Oversight Committee on Health and Human Services in a format that allows verification by the Department of Revenue. The same match requirements shall apply to any expansion funds appropriated by the General Assembly.

SECTION 11B.8.(e)  Bidding. – The North Carolina Partnership for Children, Inc., and all local partnerships shall use competitive bidding practices in contracting for goods and services on contract amounts as follows:

(1)        For amounts of five thousand dollars ($5,000) or less, the procedures specified by a written policy as developed by the Board of Directors of the North Carolina Partnership for Children, Inc.

(2)        For amounts greater than five thousand dollars ($5,000), but less than fifteen thousand dollars ($15,000), three written quotes.

(3)        For amounts of fifteen thousand dollars ($15,000) or more, but less than forty thousand dollars ($40,000), a request for proposal process.

(4)        For amounts of forty thousand dollars ($40,000) or more, a request for proposal process and advertising in a major newspaper.

SECTION 11B.8.(f)  Allocations. – The North Carolina Partnership for Children, Inc., shall not reduce the allocation for counties with less than 35,000 in population below the 2012‑2013 funding level.

SECTION 11B.8.(g)  Performance‑Based Evaluation. – The Department of Health and Human Services shall continue to implement the performance‑based evaluation system.

SECTION 11B.8.(h)  Expenditure Restrictions. – The Department of Health and Human Services and the North Carolina Partnership for Children, Inc., shall ensure that the allocation of funds for Early Childhood Education and Development Initiatives for the 2017‑2019 fiscal biennium shall be administered and distributed in the following manner:

(1)        Capital expenditures are prohibited for the 2017‑2019 fiscal biennium. For the purposes of this section, "capital expenditures" means expenditures for capital improvements as defined in G.S. 143C‑1‑1(d)(5).

(2)        Expenditures of State funds for advertising and promotional activities are prohibited for the 2017‑2019 fiscal biennium.

For the 2017‑2019 fiscal biennium, local partnerships shall not spend any State funds on marketing campaigns, advertising, or any associated materials. Local partnerships may spend any private funds the local partnerships receive on those activities.

 

SMART START EARLY LITERACY INITIATIVE/DOLLY PARTON'S IMAGINATION LIBRARY

SECTION 11B.9.(a)  Funds allocated to the North Carolina Partnership for Children, Inc., from the Department of Health and Human Services, shall be used to increase access to Dolly Parton's Imagination Library, an early literacy program that mails age‑appropriate books on a monthly basis to children registered for the program, with the intent that, upon full implementation, access to the program shall be statewide.

SECTION 11B.9.(b)  The North Carolina Partnership for Children, Inc., may use up to two percent (2%) of the funds for program evaluation. Funds appropriated under this section shall not be subject to administrative costs requirements under Section 11B.8(b) of this act, nor shall these funds be subject to the child care services funding requirements under G.S. 143B‑168.15(b), child care subsidy expansion requirements under G.S. 143B‑168.15(g), or the match requirements under Section 11B.8(d) of this act.

SECTION 11B.9.(c)  The North Carolina Partnership for Children, Inc., shall report on the success of the early literacy initiative, including any recommendations, to the Joint Legislative Oversight Committee on Health and Human Services by March 1, 2018. The report shall include participation rates for Dolly Parton's Imagination Library.

 

SUBPART XI‑C. DIVISION OF SOCIAL SERVICES

 

TANF BENEFIT IMPLEMENTATION

SECTION 11C.1.(a)  The General Assembly approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan FY 2016‑2019," prepared by the Department of Health and Human Services and presented to the General Assembly. The North Carolina Temporary Assistance for Needy Families State Plan covers the period October 1, 2016, through September 30, 2019. The Department shall submit the State Plan, as revised in accordance with subsection (b) of this section, to the United States Department of Health and Human Services.

SECTION 11C.1.(b)  The counties approved as Electing Counties in the North Carolina Temporary Assistance for Needy Families State Plan FY 2016‑2019, as approved by this section, are Beaufort, Caldwell, Catawba, Lenoir, Lincoln, Macon, and Wilson.

SECTION 11C.1.(c)  Counties that submitted the letter of intent to remain as an Electing County or to be redesignated as an Electing County and the accompanying county plan for years 2016 through 2019, pursuant to G.S. 108A‑27(e), shall operate under the Electing County budget requirements effective July 1, 2017. For programmatic purposes, all counties referred to in this subsection shall remain under their current county designation through September 30, 2019.

SECTION 11C.1.(d)  For each year of the 2017‑2019 fiscal biennium, Electing Counties shall be held harmless to their Work First Family Assistance allocations for the 2016‑2017 fiscal year, provided that remaining funds allocated for Work First Family Assistance and Work First Diversion Assistance are sufficient for payments made by the Department on behalf of Standard Counties pursuant to G.S. 108A‑27.11(b).

SECTION 11C.1.(e)  In the event that departmental projections of Work First Family Assistance and Work First Diversion Assistance for the 2017‑2018 fiscal year or the 2018‑2019 fiscal year indicate that remaining funds are insufficient for Work First Family Assistance and Work First Diversion Assistance payments to be made on behalf of Standard Counties, the Department is authorized to deallocate funds, of those allocated to Electing Counties for Work First Family Assistance in excess of the sums set forth in G.S. 108A‑27.11, up to the requisite amount for payments in Standard Counties. Prior to deallocation, the Department shall obtain approval by the Office of State Budget and Management. If the Department adjusts the allocation set forth in subsection (d) of this section, then a report shall be made to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.

 

INTENSIVE FAMILY PRESERVATION SERVICES FUNDING AND PERFORMANCE ENHANCEMENTS

SECTION 11C.2.(a)  Notwithstanding the provisions of G.S. 143B‑150.6, the Intensive Family Preservation Services (IFPS) Program shall provide intensive services to children and families in cases of abuse, neglect, and dependency where a child is at imminent risk of removal from the home and to children and families in cases of abuse where a child is not at imminent risk of removal. The Program shall be developed and implemented statewide on a regional basis. The IFPS shall ensure the application of standardized assessment criteria for determining imminent risk and clear criteria for determining out‑of‑home placement.

SECTION 11C.2.(b)  The Department of Health and Human Services shall require that any program or entity that receives State, federal, or other funding for the purpose of IFPS shall provide information and data that allows for the following:

(1)        An established follow‑up system with a minimum of six months of follow‑up services.

(2)        Detailed information on the specific interventions applied, including utilization indicators and performance measurement.

(3)        Cost‑benefit data.

(4)        Data on long‑term benefits associated with IFPS. This data shall be obtained by tracking families through the intervention process.

(5)        The number of families remaining intact and the associated interventions while in IFPS and 12 months thereafter.

(6)        The number and percentage, by race, of children who received IFPS compared to the ratio of their distribution in the general population involved with Child Protective Services.

SECTION 11C.2.(c)  The Department shall establish a performance‑based funding protocol and shall only provide funding to those programs and entities providing the required information specified in subsection (b) of this section. The amount of funding shall be based on the individual performance of each program.

 

CHILD CARING INSTITUTIONS

SECTION 11C.3.  Until the Social Services Commission adopts rules setting standardized rates for child caring institutions as authorized under G.S. 143B‑153(8), the maximum reimbursement for child caring institutions shall not exceed the rate established for the specific child caring institution by the Department of Health and Human Services, Office of the Controller. In determining the maximum reimbursement, the State shall include county and IV‑E reimbursements.

 

USE OF FOSTER CARE BUDGET FOR GUARDIANSHIP ASSISTANCE PROGRAM

SECTION 11C.4.  Of the funds available for the provision of foster care services, the Department of Health and Human Services, Division of Social Services, may continue to provide for the financial support of children who are deemed to be (i) in a permanent family placement setting, (ii) eligible for legal guardianship, and (iii) otherwise unlikely to receive permanency. No additional expenses shall be incurred beyond the funds budgeted for foster care for the Guardianship Assistance Program (GAP). The Guardianship Assistance Program (GAP) shall include provisions for extending guardianship services for individuals who have attained the age of 18 years and opt to continue to receive guardianship services until reaching 21 years of age if the individual is (i) completing secondary education or a program leading to an equivalent credential, (ii) enrolled in an institution that provides postsecondary or vocational education, (iii) participating in a program or activity designed to promote, or remove barriers to, employment, (iv) employed for at least 80 hours per month, or (v) incapable of completing the educational or employment requirements of this section due to a medical condition or disability. The Guardianship Assistance Program rates shall reimburse the legal guardian for room and board and be set at the same rate as the foster care room and board rates in accordance with rates established under G.S. 108A‑49.1.

 

CHILD WELFARE POSTSECONDARY SUPPORT PROGRAM (NC REACH)

SECTION 11C.5.(a)  Funds appropriated from the General Fund to the Department of Health and Human Services for the child welfare postsecondary support program shall be used to continue providing assistance with the "cost of attendance" as that term is defined in 20 U.S.C. § 108711 for the educational needs of foster youth aging out of the foster care system and special needs children adopted from foster care after age 12. These funds shall be allocated by the State Education Assistance Authority.

SECTION 11C.5.(b)  Of the funds appropriated from the General Fund to the Department of Health and Human Services, the sum of fifty thousand dollars ($50,000) for the 2017‑2018 fiscal year and the sum of fifty thousand dollars ($50,000) for the 2018‑2019 fiscal year shall be allocated to the North Carolina State Education Assistance Authority (SEAA). The SEAA shall use these funds only to perform administrative functions necessary to manage and distribute scholarship funds under the child welfare postsecondary support program.

SECTION 11C.5.(c)  Of the funds appropriated from the General Fund to the Department of Health and Human Services, the sum of three hundred thirty‑nine thousand four hundred ninety‑three dollars ($339,493) for the 2017‑2018 fiscal year and the sum of three hundred thirty‑nine thousand four hundred ninety‑three dollars ($339,493) for the 2018‑2019 fiscal year shall be used to contract with an entity to administer the child welfare postsecondary support program described under subsection (a) of this section, which administration shall include the performance of case management services.

SECTION 11C.5.(d)  Funds appropriated to the Department of Health and Human Services for the child welfare postsecondary support program shall be used only for students attending public institutions of higher education in this State.

 

FEDERAL CHILD SUPPORT INCENTIVE PAYMENTS

SECTION 11C.6.(a)  Centralized Services. – The North Carolina Child Support Services Section (NCCSS) of the Department of Health and Human Services, Division of Social Services, shall retain up to fifteen percent (15%) of the annual federal incentive payments it receives from the federal government to enhance centralized child support services. To accomplish this requirement, NCCSS shall do the following:

(1)        In consultation with representatives from county child support services programs, identify how federal incentive funding could improve centralized services.

(2)        Use federal incentive funds to improve the effectiveness of the State's centralized child support services by supplementing and not supplanting State expenditures for those services.

(3)        Develop and implement rules that explain the State process for calculating and distributing federal incentive funding to county child support services programs.

SECTION 11C.6.(b)  County Child Support Services Programs. – NCCSS shall allocate no less than eighty‑five percent (85%) of the annual federal incentive payments it receives from the federal government to county child support services programs to improve effectiveness and efficiency using the federal performance measures. To that end, NCCSS shall do the following:

(1)        In consultation with representatives from county child support services programs, examine the current methodology for distributing federal incentive funding to the county programs and determine whether an alternative formula would be appropriate. NCCSS shall use its current formula for distributing federal incentive funding until an alternative formula is adopted.

(2)        Upon adopting an alternative formula, develop a process to phase in the alternative formula for distributing federal incentive funding over a four‑year period.

SECTION 11C.6.(c)  Reporting by County Child Support Services Programs. – NCCSS shall continue implementing guidelines that identify appropriate uses for federal incentive funding. To ensure those guidelines are properly followed, NCCSS shall require county child support services programs to comply with each of the following:

(1)        Submit an annual plan describing how federal incentive funding would improve program effectiveness and efficiency as a condition of receiving federal incentive funding.

(2)        Report annually on the following: (i) how federal incentive funding has improved program effectiveness and efficiency and been reinvested into their programs, (ii) provide documentation that the funds were spent according to their annual plans, and (iii) explain any deviations from their plans.

SECTION 11C.6.(d)  Reporting by NCCSS. – NCCSS shall submit a report on federal child support incentive funding to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by November 1 of each year. The report shall describe how federal incentive funds enhanced centralized child support services to benefit county child support services programs and improved the effectiveness and efficiency of county child support services programs. The report shall further include any changes to the State process the NCCSS used in calculating and distributing federal incentive funding to county child support services programs and any recommendations for further changes.

 

CHILD WELFARE SYSTEM CHANGES

SECTION 11C.7.(a)  Federal Improvement Plan Implementation. – The Department of Health and Human Services, Division of Social Services, shall continue implementing the requirements of the federal Program Improvement Plan to bring our State into compliance with national standards for child welfare policy and practices. The Division shall collaborate with county departments of social services to develop a model of oversight that supports program outcomes and a county's ability to meet performance standards as outlined in the Program Improvement Plan. Oversight may include support for continuous quality improvement, staff training, and data analysis.

Of the funds appropriated to the Division in each year of the 2017‑2019 fiscal biennium for the child welfare program improvement plan, the sum of sixty thousand dollars ($60,000) recurring in each year of the 2017‑2019 fiscal biennium shall be used by the Division, in collaboration with the North Carolina State Commission on Indian Affairs within the Department of Administration, for North Carolina State‑recognized tribes to assist in (i) recruiting foster parents, (ii) increasing the number of foster homes for children who are members of a North Carolina State‑recognized tribe, and (iii) providing training for staff of county departments of social services to ensure culturally appropriate services for children who are members of a North Carolina State‑recognized tribe.

The Division shall report on the implementation and outcomes of the Program Improvement Plan to the Joint Legislative Oversight Committee on Health and Human Services. The report shall be submitted semiannually on February 1 and August 1 of each year, with a final report on February 1, 2019.

SECTION 11C.7.(b)  Child Welfare/NC FAST. – The Department of Health and Human Services, Division of Social Services, shall continue toward completion of the child welfare component of the North Carolina Families Accessing Services Through Technology (NC FAST) system to (i) bring the State into compliance with the Statewide Information System systematic factor of the Child and Family Services Review (CFSR) and (ii) ensure that data quality meets federal standards and adequate information is collected and available to counties to assist in tracking children and outcomes across counties.

It is the intent of the General Assembly that the child welfare component of the NC FAST system be operational by December 31, 2017. To that end, the Department of Health and Human Services, Division of Social Services, shall report on the development, implementation, and outcomes of the child welfare component of the NC FAST system to the Joint Legislative Oversight Committee on Health and Human Services quarterly through April 1, 2019. The report shall include, at a minimum, each of the following:

(1)        The current time line for development and implementation of the child welfare component to NC FAST.

(2)        Any adjustments and justifications for adjustments to the time line.

(3)        Progress on the development and implementation of the system.

(4)        Address any identified issues in developing or implementing the child welfare component to NC FAST and solutions to address those issues.

(5)        The level of county participation and involvement in each phase of the project.

(6)        Any budget and expenditure reports, including overall project budget and expenditures, and current fiscal year budget and expenditures.

 

INCREASE ACCESS TO PUBLIC BENEFITS FOR OLDER DUAL ELIGIBLE SENIORS

SECTION 11C.8.(a)  The Department of Health and Human Services, Division of Social Services (Division), shall continue implementing an evidence‑based pilot program to increase access to public benefits for seniors aged 65 and older who are dually enrolled in Medicare and Medicaid to (i) improve the health and independence of seniors and (ii) reduce health care costs. The Division shall continue to partner with a not‑for‑profit firm for the purposes of engaging in a data‑driven campaign to help seniors aged 65 and older who are dually enrolled in Medicare and Medicaid meet their basic social needs. The not‑for‑profit firm shall have demonstrated experience in assisting with these types of services and the partnership shall accomplish each of the following:

(1)        Identify, through data sharing, dual eligible seniors aged 65 and older who qualify for the Supplemental Nutrition and Assistance Program (SNAP) but are not currently enrolled.

(2)        Conduct an outreach program toward those seniors for the purpose of enrolling them into SNAP.

(3)        Provide comprehensive application assistance through outreach specialists to complete public benefits application processes.

(4)        Evaluate project effectiveness and explore how data can be utilized to achieve optimal outcomes.

(5)        Make recommendations regarding policy options available to the State to streamline access to benefits.

SECTION 11C.8.(b)  The Division shall report to the Office of the Governor and the Joint Legislative Oversight Committee on Health and Human Services on its progress in the pilot program by February 1 following each year the pilot program is in place. The report shall, at a minimum, include the following:

(1)        The number of seniors age 65 and older who are dual eligibles but are not enrolled in SNAP.

(2)        The number of those identified that would be included in the sample population.

(3)        Methods of outreach toward those seniors in the sample population.

(4)        Number of to date enrollments in SNAP as a direct result of outreach during the pilot program.

(5)        Participation rate to date in SNAP of those seniors in the sample population.

(6)        Any other findings the Division deems relevant.

SECTION 11C.8.(c)  Any nonrecurring funds remaining in the 2016‑2017 fiscal year from implementation of the pilot program under this section shall not revert, but shall remain available for continued implementation of the pilot program, along with any private or nonprofit funding provided to the Division for use in the pilot program. If funding and capacity exist, the Division of Social Services may expand the pilot program to include other public benefits programs.

 

SUCCESSFUL TRANSITION/FOSTER CARE YOUTH/PERMANENCY INNOVATION INITIATIVE TECHNICAL CHANGE

SECTION 11C.9.(a)  There is created the Foster Care Transitional Living Initiative Fund to fund and support transitional living services that demonstrate positive outcomes for youth, attract significant private sector funding, and lead to the development of evidence‑based programs to serve the at‑risk population described in this section. The Fund shall support a demonstration project with services provided by Youth Villages to (i) improve outcomes for youth ages 17‑21 years who transition from foster care through implementation of outcome‑based Transitional Living Services, (ii) identify cost‑savings in social services and juvenile and adult correction services associated with the provision of Transitional Living Services to youth aging out of foster care, and (iii) take necessary steps to establish an evidence‑based transitional living program available to all youth aging out of foster care. In implementing these goals, the Foster Care Transitional Living Initiative Fund shall support the following strategies:

(1)        Transitional Living Services, which is an outcome‑based program that follows the Youth Villages Transitional Living Model. Outcomes on more than 7,000 participants have been tracked since the program's inception. The program has been evaluated through an independent Randomized Controlled Trial. Results indicate that Youth Villages Transitional Living Model had positive impacts in a variety of areas, including housing stability, earnings, economic hardship, mental health, and intimate partner violence in comparison to the control population.

(2)        Public‑Private Partnership, which is a commitment by private‑sector funding partners to match at least fifty percent (50%) of the funds appropriated to the Foster Care Transitional Living Initiative Fund for the 2017‑2019 fiscal biennium for the purposes of providing Transitional Living Services through the Youth Villages Transitional Living Model to youth aging out of foster care.

(3)        Impact Measurement and Evaluation, which are services funded through private partners to provide independent measurement and evaluation of the impact the Youth Villages Transitional Living Model has on the youth served, the foster care system, and on other programs and services provided by the State which are utilized by former foster care youth.

(4)        Advancement of Evidence‑Based Process, which is the implementation and ongoing evaluation of the Youth Villages Transitional Living Model for the purposes of establishing the first evidence‑based transitional living program in the nation. To establish the evidence‑based program, additional randomized controlled trials may be conducted to advance the model.

SECTION 11C.9.(b)  G.S. 131D‑10.9A(c) reads as rewritten:

"(c)      Purpose and Powers. – The Committee shall:

(1)        Design and implement a data tracking methodology to collect and analyze information to gauge the success of the initiative established under this section as well as an initiativeany initiatives for foster care youth transitioning to adulthood in accordance with Part 3 of this Article.adulthood.

(2)        Develop a methodology to identify short‑ and long‑term cost‑savings in the provision of foster care and foster care transitional living services and any potential reinvestment strategies.

(3)        Oversee program implementation to ensure fidelity to the program models identified under subdivisions (1) and (2) of G.S. 131D‑10.9B(a) and under subdivisions (1) through (4) of G.S. 131D‑10.9G(a).G.S. 131D‑10.9B(a).

(4)        Study, review, and recommend other policies and services that may positively impact permanency, well‑being outcomes, and youth aging out of the foster care system."

 

FINAL REPORT/EASTERN BAND OF CHEROKEE INDIANS ASSUMPTION OF SERVICES

SECTION 11C.10.(a)  The Department of Health and Human Services, Division of Social Services, shall submit a final report to the Joint Legislative Oversight Committee on Health and Human Services on the assumption of certain services by the Eastern Band of Cherokee Indians as implemented pursuant to Section 12C.10 of S.L. 2015‑241, as amended by Section 12C.2 of S.L. 2016‑94, when implementation is complete.

SECTION 11C.10.(b)  Section 12C.10(h) of S.L. 2015‑241 is repealed.

 

FAMILY AND CHILD PROTECTION AND ACCOUNTABILITY ACT

SECTION 11C.12.  Expenditure of the funds provided for in item number 55 of the Health and Human Services portion of the Committee Report described in Section 39.2 of this act is contingent upon passage of House Bill 630 of the 2017 Regular Session or any other substantially similar legislation adopted by the 2017 General Assembly.

 

TEMPORARY FINANCIAL ASSISTANCE FOR FACILITIES LICENSED TO ACCEPT STATE‑COUNTY SPECIAL ASSISTANCE

SECTION 11C.13.(a)  The following definitions apply in this section:

(1)        Facility licensed to accept State‑County Special Assistance payments or facility. – Any residential care facility that is (i) licensed by the Department of Health and Human Services and (ii) authorized to accept State‑County Special Assistance payments from its residents.

(2)        State‑County Special Assistance. – The program authorized by G.S. 108A‑40.

SECTION 11C.13.(b)  Nonrecurring funds appropriated in this act to the Department of Health and Human Services, Division of Social Services (DSS), for each year of the 2017‑2019 fiscal biennium for facilities licensed to accept State‑County Special Assistance payments shall be used to provide temporary financial assistance in the form of a monthly payment to these facilities on behalf of each resident who is a recipient of State‑County Special Assistance. The counties shall pay to the State fifty percent (50%) of the cost of providing these monthly payments to these facilities. The monthly payments provided by DSS to these facilities shall be subject to all of the following requirements and limitations:

(1)        The amount of the monthly payments authorized by this section is equal to thirty‑four dollars ($34.00) per month for each resident of the facility as of the first day of the month who is a recipient of State‑County Special Assistance.

(2)        A facility that receives the monthly payments authorized by this section shall not, under any circumstances, use these payments for any purpose other than to offset the cost of serving residents who are recipients of State‑County Special Assistance.

(3)        The DSS shall make monthly payments authorized by this section to a facility on behalf of a resident only for the period commencing July 1, 2017, and ending June 30, 2019.

(4)        The DSS shall make monthly payments authorized by this section only to the extent sufficient State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal biennium are available for this purpose.

(5)        The DSS shall not make monthly payments authorized by this section to a facility on behalf of a resident whose eligibility determination for State‑County Special Assistance is pending.

(6)        The DSS shall terminate all monthly payments pursuant to this section on the earlier of the following:

a.         June 30, 2019.

b.         Upon depletion of the State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal year for this purpose.

SECTION 11C.13.(c)  Notwithstanding any provision of this act or any other provision of law to the contrary, the DSS shall not be required to provide any temporary financial assistance to facilities beyond June 30, 2019, or upon depletion of the State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal biennium for this purpose, whichever is earlier.

SECTION 11C.13.(d)  If possible, the DSS shall use an existing mechanism to administer these funds in the least restrictive manner that ensures compliance with this section and timely and accurate payments to facilities. The DSS shall not, under any circumstances, use any portion of the State and county funds allocated to the DSS for each year of the 2017‑2019 fiscal biennium for the purpose of this section for any other purpose.

SECTION 11C.13.(e)  Nothing in this section shall be construed as an obligation by the General Assembly to appropriate funds for the purpose of this section, or as an entitlement by any facility, resident of a facility, or other person to receive temporary financial assistance under this section.

SECTION 11C.13.(f)  Of the funds appropriated in this act to the DSS for each year of the 2017‑2019 fiscal biennium for facilities licensed to accept State‑County Special Assistance payments, the DSS shall not use more than two hundred fifty thousand dollars ($250,000) in nonrecurring funds for each year of the 2017‑2019 fiscal biennium for administrative purposes.

SECTION 11C.13.(g)  This section expires on June 30, 2019.

 

ECKERD KIDS AND CARING FOR CHILDREN'S ANGEL WATCH PROGRAM/REPORT ON USE OF ADDITIONAL FUNDS

SECTION 11C.14.(a)  The Department of Health and Human Services, Division of Social Services, shall report on the use of additional funds provided in this act for each year of the 2017‑2019 fiscal biennium to provide continued support of the Eckerd Kids and Caring for Children's Angel Watch program, a foster care program for children who are ages zero to 10 who are not in the custody of a county department of social services and whose families are temporarily unable to care for them due to a crisis. The report shall, at a minimum, include each of the following:

(1)        The number of families and children served by the program, including the counties in which services are provided.

(2)        The number of children who enter foster care within six months after their family participates in the program.

(3)        A comparison of children with similar needs that do not participate in the program and the number of those children who enter into foster care.

(4)        Any other matters the Division deems relevant.

SECTION 11C.14.(b)  The Division shall submit the report required by subsection (a) of this section to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division by December 1, 2018.

SECTION 11C.14.(c)  G.S. 143C‑1‑2(b) shall not apply to funds appropriated for the 2016‑2017 fiscal year for Eckerd Kids and Caring for Children's Angel Watch program.

 

CHILD ADVOCACY CENTER FUNDING

SECTION 11C.15.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, for each year of the 2017‑2019 fiscal biennium for child advocacy centers, allocations shall be made as follows:

(1)        Up to one hundred thousand dollars ($100,000) for each child advocacy center in good standing with Children's Advocacy Centers of North Carolina, Inc.

(2)        One hundred thousand dollars ($100,000) to Children's Advocacy Centers of North Carolina, Inc., for its operations.

 

SUBPART XI‑D. DIVISION OF AGING AND ADULT SERVICES

 

STATE‑COUNTY SPECIAL ASSISTANCE

SECTION 11D.1.(a)  For each year of the 2017‑2019 fiscal biennium, the maximum monthly rate for residents in adult care home facilities shall be one thousand one hundred eighty‑two dollars ($1,182) per month per resident.

SECTION 11D.1.(b)  For each year of the 2017‑2019 fiscal biennium, the maximum monthly rate for residents in Alzheimer's/Dementia special care units shall be one thousand five hundred fifteen dollars ($1,515) per month per resident.

 

AUTHORIZATION FOR SECRETARY OF DHHS TO RAISE THE MAXIMUM NUMBER OF STATE‑COUNTY SPECIAL ASSISTANCE IN‑HOME PAYMENTS

SECTION 11D.1A.(a)  Notwithstanding the provisions of G.S. 108A‑47.1 or any other provision of law to the contrary, and within existing appropriations for State‑County Special Assistance, the Secretary of the Department of Health and Human Services may waive the fifteen percent (15%) cap on the number of Special Assistance in‑home payments, as the Secretary deems necessary.

SECTION 11D.1A.(b)  This section expires on June 30, 2019.

 

ALIGNMENT OF STATE AND FEDERAL AGING PLAN REPORTING DEADLINES

SECTION 11D.2.  G.S. 143B‑181.1A reads as rewritten:

"§ 143B‑181.1A.  Plan for serving older adults; inventory of existing data; cooperation by State agencies.

(a)        The Division of Aging,Aging and Adult Services of the Department of Health and Human Services shall submit a regularly updated plan to the General Assembly by March 1July 1 of every other odd‑numbered year, beginning March 1, 1995. This plan shall include:

(1)        A detailed analysis of the needs of older adults in North Carolina, based on existing available data, including demographic, geographic, health, social, economical,economic, and other pertinent indicators;indicators.

(2)        A clear statement of the goals of the State's long‑term public policy on aging;aging.

(3)        An analysis of services currently provided and an analysis of additional services needed; andneeded.

(4)        Specific implementation recommendations on expansion and funding of current and additional services and services service levels.

(b)        The Division of Aging,Aging and Adult Services of the Department of Health and Human Services,Services shall maintain an inventory of existing data sets regarding the elderly in North Carolina, in order to ensure that adequate demographic, geographic, health, social, economic, and other pertinent indicators are available to generate its regularly updated Plan for Serving Older Adults.

Upon request, the Division of Aging and Adult Services shall make information on these data sets available within a reasonable time.

All State agencies and entities that possess data relating to the elderly, including the Department of Health and Human Services' Division of Health Services, the Division of Administration and the Divisions of Public Health, Health Service Regulation, and the Division of Social Services, and the Department of Administration,Social Services of the Department of Health and Human Services, shall cooperate, upon request, with the Division of Aging and Adult Services in implementing this subsection."

 

RECOMMENDATION TO APPOINT A SUBCOMMITTEE ON AGING

SECTION 11D.3.(a)  Pursuant to the authority in G.S. 120‑208.2(d), the cochairs for the Joint Legislative Oversight Committee on Health and Human Services may consider appointing a subcommittee on aging to examine the State's delivery of services for older adults in order to (i) determine their service needs and to (ii) make recommendations to the Oversight Committee on how to address those needs. North Carolina currently ranks ninth in the nation for the size of the age 60 and older population and tenth in the nation for the age 85 and older population. From 2015 to 2035, the age 65 and older population is projected to increase sixty‑seven percent (67%) and the age 85 and older population is projected to increase one hundred two percent (102%). By 2019, North Carolina will have more people that are 60 years of age and older than children age zero to 17. It is recommended that the subcommittee examine the range of programs and services for older adults throughout the continuum of care. The subcommittee is encouraged to seek input from a variety of stakeholders and interest groups, including the Division of Aging and Adult Services and the Division of Social Services, Department of Health and Human Services; the North Carolina Coalition on Aging; the North Carolina Senior Tarheel Legislature, and the Governor's Advisory Council on Aging.

SECTION 11D.3.(b)  If a subcommittee on aging is appointed, the subcommittee shall submit an interim report of its findings and recommendations, including any proposed legislation, to the Joint Legislative Oversight Committee on Health and Human Services on or before March 1, 2018, and shall submit a final report of its findings and recommendations, including any proposed legislation, on or before November 1, 2018, at which time it shall terminate unless reappointed by the cochairs of the Oversight Committee under the authority granted in G.S. 120‑208.2(d).

 

SUBPART XI‑E. Division of Public Health

 

FUNDS FOR SCHOOL NURSES

SECTION 11E.1.  Part 1 of Article 1 of Chapter 130A of the General Statutes is amended by adding a new section to read:

"§ 130A‑4.3.  State funds for school nurses.

(a)        The Department shall use State funds appropriated for the School Nurse Funding Initiative to supplement and not supplant other State, local, or federal funds appropriated or allocated for this purpose. The Department shall ensure that communities maintain their current level of effort and funding for school nurses. These funds shall not be used to fund nurses for State agencies. These funds shall be distributed to local health departments according to a formula that includes all of the following:

(1)        School nurse‑to‑student ratio.

(2)        Percentage of students eligible for free or reduced‑price meals.

(3)        Percentage of children in poverty.

(4)        Per capita income.

(5)        Eligibility as a low‑wealth county.

(6)        Mortality rates for children between one and 19 years of age.

(7)        Percentage of students with chronic illnesses.

(8)        Percentage of county population consisting of minority persons.

(b)        The Division of Public Health shall ensure that school nurses funded with State funds (i) do not assist in any instructional or administrative duties associated with a school's curriculum and (ii) perform all of the following with respect to school health programs:

(1)        Serve as the coordinator of the health services program and provide nursing care.

(2)        Provide health education to students, staff