AN ACT to increase accountability AND REPORTING STANDARDS FOR NONPUBLIC SCHOOLS RECEIVING OPPORTUNITY SCHOLARSHIP FUNDS AND TO REQUIRE THE STATE AUDITOR TO ANNUALLY review audits of at least three nonpublic schools receiving opportunity scholarship funds.

The General Assembly of North Carolina enacts:

PART I. ACCOUNTABILITY and reporting FOR OPPORTUNITY SCHOLARSHIP SCHOOLS

SECTION 1.(a)  G.S. 115C‑562.5 reads as rewritten:

§ 115C‑562.5.  Obligations of nonpublic schools accepting eligible students receiving scholarship grants.

(a)        A nonpublic school that accepts eligible students receiving scholarship grants shall comply with the following:

(1)        Provide Annually provide to the Authority documentation for required tuition and fees charged to the student by the nonpublic school.

(2)        Provide to the Authority a criminal background check conducted for the staff member with the highest decision‑making authority, as defined by the bylaws, articles of incorporation, or other governing document. For all teachers, the nonpublic school shall adopt a policy requiring criminal history checks under G.S. 115C‑332. Each nonpublic school shall apply its policy uniformly in requiring applicants for employment to be checked for a criminal history before the applicant is given an unconditional job offer. A nonpublic school may employ an applicant conditionally while the board is checking the person's criminal history and making a decision based on the results of the check. The nonpublic school may adopt a policy providing for periodic checks of criminal history of teachers. A nonpublic school shall indicate, upon the inquiry by any other public school unit or nonpublic school in the State, as to the reason for an employee's resignation or dismissal, if an employee's criminal history was relevant to the employee's resignation or dismissal. Information provided to the Authority in accordance with this subdivision is otherwise privileged information and is not a public record but is for the exclusive use of the Authority.

(3)        Provide to the parent or guardian of an eligible student, whose tuition and fees are paid in whole or in part with a scholarship grant, an annual written explanation of the student's progress, including the student's scores on standardized achievement tests.

(4)        Administer, at least once in each school year, tests as provided in this subdivision. Test performance data shall be submitted to the Authority by July 15 of each year. Test performance data reported to the Authority under this subdivision is not a public record under Chapter 132 of the General Statutes. Tests shall be administered to all eligible students enrolled in grades three and higher whose tuition and fees are paid in whole or in part with a scholarship grant as follows:

a.         The nationally standardized test designated by the Authority in grades three and through eight.

b.         The ACT in grade 11.

c.         A nationally standardized test or other nationally standardized equivalent measurement selected by the chief administrative officer of the nonpublic school in all other grades four and higher. For grades four through seven, the nationally standardized test or other equivalent measurement selected must measure achievement in the areas of English grammar, reading, spelling, and mathematics. For grades nine, 10, and 12, the nationally standardized test or other equivalent measurement selected must measure either (i) achievement in the areas of English grammar, reading, spelling, and mathematics or (ii) competencies in the verbal and quantitative areas.

(5)        Provide to the Authority graduation rates of the students receiving scholarship grants grants, including four‑year cohort graduation rates, in a manner consistent with nationally recognized standards.Title I of the Elementary and Secondary Education Act of 1965, as amended, and any associated federal regulations.

(6)        Contract with a certified public accountant to perform a financial review, an audit, consistent with generally accepted methods of accounting or any other comprehensive basis of accounting recognized by the American Institute of Certified Public Accountants (AICPA) for each school year in which the school enrolls 70 or more students receiving scholarship grants or scholarship funds awarded by the Authority.accepts students receiving one hundred thousand dollars ($100,000) or more in scholarship grants awarded under this Part. If a school accepts students receiving less than one hundred thousand dollars ($100,000), it shall contract pursuant to this subdivision for an audit every three years. A nonpublic school shall report the results of an audit conducted under this subdivision to the Authority and the State Auditor by December 31 of the year in which the audit is conducted.

(7)        Maintain a school facility within the State where in‑person instruction is provided. This subdivision does not prohibit a school from offering remote‑only courses of instruction in addition to in‑person instruction.

(8)        Provide the following information annually to the Division:

a.         Name and address of the school, including physical location address. A school with more than one physical location shall establish a separate notice of intent for each physical location and shall provide all information required by this subdivision for each physical location.

b.         The name of the owners and chief administrator.

c.         Number of students in attendance at the school as of October 1.

d.         All attendance records of students receiving scholarship grants from the previous school year.

e.         The percentage of teachers with a teacher license.

f.          Whether the nonpublic school is accredited and, if so, the identity of that accreditor.

g.         Documentation of a competed fire inspection in the previous 365 days.

h.         Curriculum used by the nonpublic school for each grade level.

i.          The number of students receiving scholarship grants for the first time who attended a public school unit in the previous school year.

j.          The number of students receiving scholarship grants who attended a public school unit in the previous school year.

(9)        To the extent permitted by federal law and to the extent this information can be provided without permitting the personally identifiable information of a student to be revealed, report to the Authority on the following information:

a.         The number of children enrolled at the school who are recipients of scholarship funds and who have a disability and an Individualized Education Plan (IEP).

b.         If there are any children enrolled at the school who are recipients of scholarship funds and who have a disability and an IEP, whether the nonpublic school is educating each child in compliance with his or her IDEA, as defined in G.S. 115C‑106.3(6), and applicable policies adopted by the State Board of Education for local school administrative units under Article 9 of Chapter 115C of the General Statutes.

(10)      Comply with the requirements of Article 8C of this Chapter, including the following:

a.         School Risk Management Plan. – The nonpublic school, in coordination with local law enforcement agencies, shall adopt a School Risk Management Plan (SRMP) relating to incidents of school violence. In constructing and maintaining these plans, the nonpublic school shall utilize the School Risk and Response Management System established pursuant to G.S. 115C‑105.49A. These plans are not considered a public record as the term public record is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6.

b.         Schematic diagrams and school crisis kits. – The nonpublic school shall provide schematic diagrams and keys to the main entrance of school facilities to local law enforcement agencies, in addition to implementing the provisions in G.S. 115C‑105.52.

c.         School safety exercises. – At least once a year, the nonpublic school shall hold a full school‑wide lockdown exercise with local law enforcement and emergency management agencies that are part of the school's SRMP.

d.         Safety information provided to the Department of Public Safety, Division of Emergency Management. – The nonpublic school shall provide the following: (i) schematic diagrams, including digital schematic diagrams, and (ii) emergency response information requested by the Division for the SRMP. The schematic diagrams and emergency response information are not considered public records as the term public record is defined under G.S. 132‑1 and shall not be subject to inspection and examination under G.S. 132‑6.

(b)        A nonpublic school that accepts students receiving scholarship grants shall not require any additional fees based on the status of the student as a scholarship grant recipient.

(c)        A nonpublic school enrolling more than 25 students in any grade whose tuition and fees are paid in whole or in part with a scholarship grant shall provide and retain information on student test performance in each grade with more than 25 students, as follows:

(1)        Report to the Authority on the aggregate standardized test performance of eligible students in grades three, eight, three through eight and 11. Aggregate test performance data reported to the Authority which does not contain personally identifiable student data shall be a public record under Chapter 132 of the General Statutes. Test performance data may be shared with public or private institutions of higher education located in North Carolina and shall be provided to an independent research organization selected by the Authority for research purposes as permitted by the Federal Education Rights and Privacy Act, 20 U.S.C. § 1232g.

(2)        Retain standardized test performance data for eligible students in all other grades and annually certify to the Authority compliance with the requirements of subdivision (4) of subsection (a) of this section.

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SECTION 1.(b)  Section 3J.23 of S.L. 2024‑57 reads as rewritten:

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SECTION 3J.23.(b)  The Office of Learning Research at The University of North Carolina, as established by Section 2A.8 of this act, shall study and report the following to the Joint Legislative Education Oversight Committee by December 31, 2025:

(1)        For the purpose of comparing student performance, recommendations for nationally standardized tests for use in third grade and through eighth grade that would be appropriate for administering to (i) students in nonpublic schools who are receiving Opportunity Scholarships beginning with the 2026‑2027 school year and (ii) students attending schools in public school units. To the extent practicable, the Office of Learning Research shall recommend only one test for use in third grade and one test for use in eighth grade.

(2)        Alignment between the nationally standardized tests selected pursuant to subdivision (1) of this subsection and the standard course of study for third grade and through eighth grade, respectively, including a crosswalk between the standards assessed by the nationally standardized tests and the standard course of study.

(3)        Feasibility of developing a through‑grade assessment for third and through eighth grade that would meet the following criteria:

a.         Assess mastery of the standard course of study.

b.         Consist of multiple testing events throughout the year that are aggregated into a summative score.

c.         Replace the current end‑of‑grade assessments for third and eighth grade.

d.         Yield data that can be used with the Education Value‑Added Assessment System (EVAAS).

e.         Comply with federal law.

SECTION 3J.23.(c)  The State Education Assistance Authority shall designate as the nationally standardized assessments to be administered by nonpublic schools, in accordance with G.S. 115C‑562.5(a)(4), the tests recommended by the Office of Learning Research at The University of North Carolina for use in third grade and through eighth grade in accordance with subsection (b) of this section.

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SECTION 1.(c)  Notwithstanding G.S. 115C‑562.5(a)(1), for the report required pursuant to G.S. 115C‑562.5(a)(1) for the 2025‑2026 school year, the nonpublic school shall also provide documentation for required tuition and fees charged to students receiving scholarship grant funds under Part 2A of Article 39 of Chapter 115C of the General Statutes by the nonpublic school for the 2023‑2024 and 2024‑2025 school years.

PART II. require the state auditor to annually review audits of at least three opportunity scholarship schools

SECTION 2.  G.S. 147‑64.6(c) reads as rewritten:

(c)      Responsibilities. – The Auditor is responsible for the following acts and activities:

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(24)      The Auditor shall review every year at least three completed audits of nonpublic schools that are reported to the Auditor pursuant to G.S. 115C‑562.5(a)(6). The Auditor shall report to the Joint Legislative Education Oversight Committee no later than March 15 of each year on the results of this review, including the uses of taxpayer funds by the nonpublic schools and academic outcomes of students receiving scholarship grants under Part 2A of Article 39 of Chapter 115C of the General Statutes.

part iii. effective date

SECTION 3.  Except as otherwise provided, this act is effective when it becomes law.