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H259: 2023 Appropriations Act. Latest Version

Session: 2023 - 2024

House

Passed 1st Reading

Rules

Committee

Passed 3rd Reading

Senate

Passed 1st Reading

Rules

Committee

Passed 3rd Reading

Ch. SL 2023-134

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2023

SESSION LAW 2023-134

HOUSE BILL 259

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

The General Assembly of North Carolina enacts:

PART I. Title and Introduction

TITLE OF ACT

SECTION 1.1. This act shall be known as the Current Operations Appropriations Act of 2023.

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

GENERAL FUND APPROPRIATIONS

SECTION 2.1.(a) Appropriations from the General Fund for the budgets of the State departments, institutions, and agencies, and for other purposes as enumerated, are made for each year of the 2023‑2025 fiscal biennium, according to the following schedule:

Current Operations - General Fund FY 2023‑2024 FY 2024‑2025

EDUCATION

North Carolina Community College System

Requirements 1,877,925,960 1,902,511,556

Less: Receipts 403,685,353 388,408,799

Net Appropriation 1,474,240,607 1,514,102,757

Department of Public Instruction

Requirements 13,492,320,541 13,699,714,749

Less: Receipts 1,927,760,615 1,750,698,621

Net Appropriation 11,564,559,926 11,949,016,128

THE UNIVERSITY OF NORTH CAROLINA

East Carolina Univ. - Academic Affairs

Requirements 431,788,788 432,957,458

Less: Receipts 167,185,795 168,350,410

Net Appropriation 264,602,993 264,607,048

East Carolina Univ. - Health Affairs

Requirements 110,410,728 114,341,160

Less: Receipts 19,020,872 13,587,770

Net Appropriation 91,389,856 100,753,390

Elizabeth City State University

Requirements 49,820,539 50,985,154

Less: Receipts 3,660,169 4,824,784

Net Appropriation 46,160,370 46,160,370

Fayetteville State University

Requirements 90,646,751 91,811,366

Less: Receipts 11,935,205 13,099,820

Net Appropriation 78,711,546 78,711,546

Appalachian State University

Requirements 311,994,580 313,413,598

Less: Receipts 124,504,307 124,504,786

Net Appropriation 187,490,273 188,908,812

NC A&T University

Requirements 244,098,043 240,062,658

Less: Receipts 87,678,145 88,842,760

Net Appropriation 156,419,898 151,219,898

NC School of Science and Mathematics

Requirements 45,595,072 45,331,072

Less: Receipts 3,555,677 3,291,677

Net Appropriation 42,039,395 42,039,395

NC State University - Academic Affairs

Requirements 955,054,072 954,304,072

Less: Receipts 438,387,357 438,387,357

Net Appropriation 516,666,715 515,916,715

NC State University - Ag. Research

Requirements 78,878,032 79,228,032

Less: Receipts 19,124,784 19,124,784

Net Appropriation 59,753,248 60,103,248

NC State University - Coop. Extension

Requirements 64,983,558 64,983,558

Less: Receipts 18,874,550 18,874,550

Net Appropriation 46,109,008 46,109,008

North Carolina Central University

Requirements 143,519,077 144,633,692

Less: Receipts 51,895,844 53,010,459

Net Appropriation 91,623,233 91,623,233

UNC at Asheville

Requirements 72,301,113 73,465,728

Less: Receipts 21,876,242 23,040,857

Net Appropriation 50,424,871 50,424,871

UNC at Chapel Hill - Academic Affairs

Requirements 762,333,122 723,833,122

Less: Receipts 376,959,533 376,959,533

Net Appropriation 385,373,589 346,873,589

UNC at Chapel Hill - Area Health Ed.

Requirements 56,271,874 56,271,874

Less: Receipts 1,000,000 0

Net Appropriation 55,271,874 56,271,874

UNC at Chapel Hill - Health Affairs

Requirements 371,568,724 369,568,724

Less: Receipts 140,758,876 138,758,876

Net Appropriation 230,809,848 230,809,848

UNC at Charlotte

Requirements 485,592,624 486,757,239

Less: Receipts 178,652,793 179,817,408

Net Appropriation 306,939,831 306,939,831

UNC at Greensboro

Requirements 313,725,257 314,889,872

Less: Receipts 116,192,973 117,357,588

Net Appropriation 197,532,284 197,532,284

UNC at Pembroke

Requirements 124,344,011 125,508,626

Less: Receipts 26,162,155 27,326,770

Net Appropriation 98,181,856 98,181,856

UNC at Wilmington

Requirements 313,631,547 314,796,162

Less: Receipts 114,684,281 115,848,896

Net Appropriation 198,947,266 198,947,266

UNC BOG - Aid to Private Institutions

Requirements 2,709,300 1,209,300

Less: Receipts 1,500,000 0

Net Appropriation 1,209,300 1,209,300

UNC BOG - Institutional Programs

Requirements 379,975,287 431,005,955

Less: Receipts 78,686,295 51,750,000

Net Appropriation 301,288,992 379,255,955

UNC BOG - Related Ed. Programs

Requirements 699,765,350 810,451,818

Less: Receipts 153,888,975 167,855,939

Net Appropriation 545,876,375 642,595,879

UNC School of the Arts

Requirements 56,488,236 56,488,236

Less: Receipts 17,148,612 17,148,612

Net Appropriation 39,339,624 39,339,624

UNC System Office

Requirements 47,640,384 47,640,384

Less: Receipts 259,217 259,217

Net Appropriation 47,381,167 47,381,167

Western Carolina University

Requirements 185,596,722 186,734,561

Less: Receipts 29,507,260 30,671,875

Net Appropriation 156,089,462 156,062,686

Winston-Salem State University

Requirements 91,945,473 93,110,088

Less: Receipts 22,435,103 23,599,718

Net Appropriation 69,510,370 69,510,370

HEALTH AND HUMAN SERVICES

Aging and Adult Services

Requirements 163,902,299 163,989,332

Less: Receipts 110,387,749 110,359,697

Net Appropriation 53,514,550 53,629,635

Central Management and Support

Requirements 455,836,489 516,342,065

Less: Receipts 237,329,668 290,358,595

Net Appropriation 218,506,821 225,983,470

Child and Family Well-Being

Requirements 598,235,409 598,865,804

Less: Receipts 538,497,331 538,307,550

Net Appropriation 59,738,078 60,558,254

Child Development and Early Education

Requirements 895,306,625 893,346,831

Less: Receipts 640,981,831 638,948,539

Net Appropriation 254,324,794 254,398,292

Emp. & Indep. for People with Disabilities

Requirements 186,405,070 184,426,242

Less: Receipts 142,882,705 140,253,360

Net Appropriation 43,522,365 44,172,882

Health Benefits

Requirements 28,737,477,319 31,608,353,002

Less: Receipts 23,269,219,375 25,823,717,053

Net Appropriation 5,468,257,944 5,784,635,949

Health Services Regulation

Requirements 81,765,736 82,341,123

Less: Receipts 56,854,010 56,649,546

Net Appropriation 24,911,726 25,691,577

Mental Hlth./Dev. Disabl./Subs. Use Serv.

Requirements 1,913,498,634 1,955,920,868

Less: Receipts 1,070,836,251 1,102,274,961

Net Appropriation 842,662,383 853,645,907

Public Health

Requirements 490,574,984 497,375,103

Less: Receipts 361,050,412 362,909,576

Net Appropriation 129,524,572 134,465,527

Services for the Blind/Deaf/Hard of Hearing

Requirements 45,351,158 45,470,847

Less: Receipts 36,012,108 35,981,255

Net Appropriation 9,339,050 9,489,592

Social Services

Requirements 2,205,426,974 2,214,193,327

Less: Receipts 1,983,851,401 1,993,537,351

Net Appropriation 221,575,573 220,655,976

AGRICULTURE, NATURAL, AND ECONOMIC RESOURCES

Agriculture and Consumer Services

Requirements 276,985,638 274,102,971

Less: Receipts 96,058,772 91,858,909

Net Appropriation 180,926,866 182,244,062

Commerce

Requirements 544,903,642 642,797,732

Less: Receipts 370,622,400 439,193,455

Net Appropriation 174,281,242 203,604,277

Environmental Quality

Requirements 312,486,149 299,399,902

Less: Receipts 203,784,374 189,844,998

Net Appropriation 108,701,775 109,554,904

Labor

Requirements 43,902,629 44,468,963

Less: Receipts 18,291,651 18,112,941

Net Appropriation 25,610,978 26,356,022

Natural and Cultural Resources

Requirements 351,947,543 336,533,868

Less: Receipts 63,129,682 54,842,950

Net Appropriation 288,817,861 281,690,918

Wildlife Resources Commission

Requirements 114,715,321 98,586,402

Less: Receipts 96,502,052 81,855,762

Net Appropriation 18,213,269 16,730,640

JUSTICE AND PUBLIC SAFETY

Indigent Defense Services

Requirements 164,439,200 170,714,444

Less: Receipts 14,589,207 13,962,679

Net Appropriation 149,849,993 156,751,765

Department of Public Safety

Requirements 931,448,939 932,942,136

Less: Receipts 245,702,873 237,764,523

Net Appropriation 685,746,066 695,177,613

Department of Adult Correction

Requirements 2,032,822,259 2,070,615,156

Less: Receipts 36,165,743 24,612,230

Net Appropriation 1,996,656,516 2,046,002,926

Administrative Office of the Courts

Requirements 763,146,146 785,128,108

Less: Receipts 12,441,730 6,210,166

Net Appropriation 750,704,416 778,917,942

Department of Justice

Requirements 111,302,130 112,115,754

Less: Receipts 45,605,802 45,147,562

Net Appropriation 65,696,328 66,968,192

GENERAL GOVERNMENT

Administration

Requirements 78,838,024 80,145,616

Less: Receipts 12,893,084 12,636,055

Net Appropriation 65,944,940 67,509,561

Administrative Hearings

Requirements 9,280,684 9,449,343

Less: Receipts 1,268,311 1,216,625

Net Appropriation 8,012,373 8,232,718

Auditor

Requirements 25,780,581 26,171,092

Less: Receipts 7,029,524 6,899,163

Net Appropriation 18,751,057 19,271,929

Budget and Management

Requirements 22,353,628 12,567,620

Less: Receipts 11,110,708 1,036,517

Net Appropriation 11,242,920 11,531,103

Budget and Management - Special Approp.

Requirements 1,384,305,000 57,275,000

Less: Receipts 1,344,205,000 46,725,000

Net Appropriation 40,100,000 10,550,000

Controller

Requirements 36,259,940 36,837,536

Less: Receipts 1,071,185 875,957

Net Appropriation 35,188,755 35,961,579

Elections

Requirements 17,841,169 9,861,207

Less: Receipts 5,763,121 102,000

Net Appropriation 12,078,048 9,759,207

General Assembly

Requirements 100,869,872 100,286,556

Less: Receipts 1,180,928 561,000

Net Appropriation 99,688,944 99,725,556

Governor

Requirements 7,638,436 7,771,765

Less: Receipts 1,045,683 1,000,730

Net Appropriation 6,592,753 6,771,035

Housing Finance Agency

Requirements 55,660,000 55,660,000

Less: Receipts 45,000,000 45,000,000

Net Appropriation 10,660,000 10,660,000

Human Resources

Requirements 16,653,363 11,252,211

Less: Receipts 5,767,638 100,888

Net Appropriation 10,885,725 11,151,323

Industrial Commission

Requirements 24,334,029 24,516,649

Less: Receipts 20,556,516 20,739,136

Net Appropriation 3,777,513 3,777,513

Insurance

Requirements 57,332,708 58,428,398

Less: Receipts 5,493,452 5,140,347

Net Appropriation 51,839,256 53,288,051

Lieutenant Governor

Requirements 1,322,435 1,343,471

Less: Receipts 9,756 0

Net Appropriation 1,312,679 1,343,471

Military and Veterans Affairs

Requirements 14,131,285 11,642,217

Less: Receipts 54,662 0

Net Appropriation 14,076,623 11,642,217

Revenue

Requirements 189,349,897 189,810,136

Less: Receipts 70,984,788 68,697,348

Net Appropriation 118,365,109 121,112,788

Secretary of State

Requirements 19,301,082 19,574,159

Less: Receipts 457,008 330,036

Net Appropriation 18,844,074 19,244,123

Treasurer

Requirements 74,082,340 74,099,682

Less: Receipts 73,873,266 73,890,608

Net Appropriation 209,074 209,074

Treasurer - Other Retirement Plans/Benefits

Requirements 22,773,708 22,923,708

Less: Receipts 0 0

Net Appropriation 22,773,708 22,923,708

INFORMATION TECHNOLOGY

Department of Information Technology

Requirements 141,695,168 110,450,423

Less: Receipts 60,392,638 31,479,233

Net Appropriation 81,302,530 78,971,190

RESERVES AND LOTTERY

General Fund Reserve

Requirements 450,000 117,743,582

Less: Receipts 0 0

Net Appropriation 450,000 117,743,582

Total Requirements 65,583,058,407 67,791,850,165

Less: Total Receipts 35,875,935,383 36,968,536,167

Total Net Appropriation 29,707,123,024 30,823,313,998

SECTION 2.1.(b) For purposes of this act and the Committee Report described in Section 43.2 of this act, the requirements set forth in this section represent the total amount of funds, including agency receipts, appropriated to an agency, department, or institution.

GENERAL FUND AVAILABILITY

SECTION 2.2.(a) General Fund Availability. – The General Fund availability derived from State tax revenue, nontax revenue, and other adjustments used in developing the budget for each year of the 2023‑2025 fiscal biennium is as follows:

FY 2023‑2024 FY 2024‑2025

Unappropriated Balance Remaining FY 2022-23 818,331,123 1,564,437,931

Actual/Anticipated Reversions 1,021,600,829 300,000,000

Actual FY 2022-23 Overcollections 3,025,504,013 -

S.L. 2023-11, 2022 Budget Technical Corrections (26,207,523) -

Tech. Adj., FY 2022-23 Unfunded Liability

Solvency Reserve 10,000,000 -

Total, Prior Year-End Fund Balance 4,849,228,442 1,864,437,931

Revised Consensus Revenue Forecast

Tax Revenue 32,115,800,000 32,395,200,000

Non-Tax Revenue 1,723,100,000 1,480,100,000

Total, Tax and Non-Tax Revenue 33,838,900,000 33,875,300,000

Revenue Adjustments

Adjustments to Tax Revenue (193,077,000) (606,540,000)

Adjustments to Non-Tax Revenue (3,379,984) (1,931,189)

S.L. 2023-7, Access to Healthcare Options 79,775,000 67,674,000

S.L. 2023-42, Sport Wagering/Horse Racing Wagering 8,500,000 36,100,000

S.L. 2023-93, Treasury Administrative Changes Act (5,056,718) (5,056,718)

Total, Revenue Adjustments (113,238,702) (509,753,907)

Reservations of Revenue, Statutory* and Discretionary

State Capital and Infrastructure Fund (SCIF)* (1,412,592,500) (1,461,333,238)

Additional Transfer to SCIF (1,050,000,000) (700,000,000)

Savings Reserve - (125,000,000)

Clean Water and Drinking Water Reserve (1,000,000,000) (1,000,000,000)

Regional Economic Development Reserve (1,250,000,000) -

Economic Development Project Reserve (630,000,000) (100,000,000)

Medicaid Contingency Reserve (400,000,000) (250,000,000)

Medicaid Transformation Reserve (5,000,000) -

State Emergency Response and Disaster Relief Fund (75,000,000) (75,000,000)

Information Technology Reserve (450,000,000) -

Federal Infrastructure Match Reserve (50,000,000) -

Housing Reserve (45,000,000) (45,000,000)

Retiree Supplement Reserve (145,600,000) -

Transportation Reserve (450,000,000) (100,000,000)

NCInnovation Reserve (250,000,000) (250,000,000)

Tech. Adj., Unfunded Liability Solvency Reserve (10,000,000) -

Total, All Reservations of Revenue (7,223,192,500) (4,106,333,238)

Revised Total General Fund Availability 31,351,697,240 31,123,650,786

General Fund Net Appropriations

S.L. 2023-14, Care for Women, Children, and Families Act (80,136,285) (79,336,285)

H.B. 259, 2023 Appropriations Act (29,707,123,024) (30,823,313,998)

Total, General Fund Net Appropriations (29,787,259,309) (30,902,650,283)

Unappropriated Balance Remaining 1,564,437,931 221,000,503

SECTION 2.2.(b) SCIF. – In addition to the amount required under G.S. 143C‑4‑3.1, the State Controller shall transfer to the State Capital and Infrastructure Fund established under G.S. 143C‑4‑3.1 the sum of one billion fifty million dollars ($1,050,000,000) in the 2023‑2024 fiscal year and the sum of seven hundred million dollars ($700,000,000) in the 2024‑2025 fiscal year.

SECTION 2.2.(c) Medicaid Contingency Reserve. – The State Controller shall reserve to the Medicaid Contingency Reserve described in G.S. 143C‑4‑11 from funds available in the General Fund the sum of four hundred million dollars ($400,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of two hundred fifty million dollars ($250,000,000) in nonrecurring funds for the 2024‑2025 fiscal year.

SECTION 2.2.(d) IT Reserve. – The State Controller shall reserve to the Information Technology Reserve established in Section 2.2(h) of S.L. 2021‑180 from funds available in the General Fund the sum of four hundred fifty million dollars ($450,000,000) in nonrecurring funds for the 2023‑2024 fiscal year. The State Controller shall transfer funds available in the Information Technology Reserve to State agencies and departments for information technology projects in accordance with the following schedule, and the funds transferred are appropriated for the fiscal year in which they are transferred:

State Agency or Department 2023‑2024 2024‑2025

(1) Department of Information Technology

(Budget Code: 14660) $43,546,653 $14,806,653

(2) Department of Environmental Quality

(Budget Code: 14300) 7,500,000 2,500,000

(3) Department of Environmental Quality‑Spec. Rev.

(Budget Code: 24317) 5,510,000 5,510,000

(4) General Assembly

(Budget Code: 21000) 15,000,000 0

(5) Department of Public Safety

(Budget Code: 14550) 3,000,000 0

(6) Department of Health and Human Services

(Budget Code: 14440) 8,180,000 680,000

(7) Department of Health and Human Services

(Budget Code: 14410) 14,177,000 0

(8) University of North Carolina – BOG Instit. Pgms.

(Budget Code: 16011) 3,250,000 0

(9) University of North Carolina – BOG Related Ed. Pgms.

(Budget Code: 16012) 22,622,000 25,518,000

(10) State Board of Elections

(Budget Code: 18025) 5,600,000 0

(11) Office of State Human Resources

(Budget Code: 14111) 5,600,000 0

(12) NC Community College System

(Budget Code: 26802) 0 15,000,000

(13) State Capital and Infrastructure Fund

(Budget Code: 24001) 8,000,000 0

(14) Revenue

(Budget Code: 14700) 1,650,000 0

(15) Administrative Office of the Courts

(Budget Code: 12000) 5,000,000 5,000,000

SECTION 2.2.(e) SERDRF. – The State Controller shall reserve to the State Emergency Response and Disaster Relief Fund established in G.S. 166A‑19.42 from funds available in the General Fund the sum of seventy‑five million dollars ($75,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of seventy‑five million dollars ($75,000,000) in nonrecurring funds for the 2024‑2025 fiscal year. The State Controller shall transfer funds available in the State Emergency Response and Disaster Relief Fund to State agencies and departments for the purposes described in Section 5.6 of this act and in accordance with the following schedule. The funds transferred are appropriated for the five‑year period ending June 30, 2028.

State Agency or Department 2023‑2024 2024‑2025

(1) Emergency Management

(Budget Code: 24552) $174,601,092 $0

(2) Office of State Budget and Management – Special

Appropriations (Budget Code: 13085) 22,255,000 0

(3) DACS–Soil & Water Conservation

(Budget Code: 23704) 20,000,000 0

(4) Department of Insurance

(Budget Code: 63903) 20,000,000 0

(5) Department of Environmental Quality

(Budget Code: 14300) 7,500,000 0

(6) Department of Environmental Quality – Disaster

(Budget Code: 24310) 10,493,953 987,906

(7) Wildlife Resources Commission

(Budget Code: 14350) 11,000,000 0

(8) DEQ – Special Revenue

(Budget Code: 24317) 10,000,000 10,000,000

(9) UNC at Chapel Hill – Academic Affairs

(Budget Code: 16020) 330,000 330,000

(10) NC School of Science & Math

(Budget Code: 16094) 264,000 0

(11) North Carolina Central University

(Budget Code: 16090) 50,000 0

SECTION 2.2.(f) Retiree Supplement Reserve. – There is established in the General Fund a Retiree Supplement Reserve to provide funds for a four percent (4%) retiree supplement. The State Controller shall reserve to the Retiree Supplement Reserve from funds available in the General Fund the sum of one hundred forty‑five million six hundred thousand dollars ($145,600,000) in nonrecurring funds for the 2023‑2024 fiscal year. The State Controller shall transfer to State agencies and departments the funds needed to provide the four percent (4%) supplement as provided in Section 39.27 of this act, and the funds transferred are appropriated for the fiscal year in which they are transferred.

SECTION 2.2.(g) Clean Water and Drinking Water Reserve. – The State Controller shall reserve to the Clean Water and Drinking Water Reserve established in Section 2.2(p) of S.L. 2022‑74 from funds available in the General Fund the sum of one billion dollars ($1,000,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of one billion dollars ($1,000,000,000) in nonrecurring funds for the 2024‑2025 fiscal year. The State Controller shall transfer to the Department of Environmental Quality the funds needed for clean water and drinking water projects in accordance with Section 12.2 of this act, and the funds transferred are appropriated for the fiscal year in which they are transferred.

SECTION 2.2.(h) Economic Development Project Reserve. – The State Controller shall reserve to the Economic Development Project Reserve established in Section 2.2 of S.L. 2021‑180 from funds available in the General Fund the sum of six hundred thirty million dollars ($630,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of one hundred million dollars ($100,000,000) for the 2024‑2025 fiscal year. The State Controller shall transfer funds available in the Economic Development Project Reserve to State agencies and departments for economic development initiatives in accordance with the following schedule, and the funds transferred are appropriated for the fiscal year in which they are transferred:

State Agency or Department 2023‑2024 2024‑2025

(1) Department of Commerce

(Budget Code: 14601) $10,000,000 $0

(2) Department of Commerce

(Budget Code: 14602) 10,600,000 108,400,000

(3) Department of Environmental Quality

(Budget Code: 14300) 1,000,000 0

SECTION 2.2.(i) Housing Reserve. – The State Controller shall reserve to the Housing Reserve established in Section 2.2(k) of S.L. 2022‑74 from funds available in the General Fund the sum of forty‑five million dollars ($45,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of forty‑five million dollars ($45,000,000) in nonrecurring funds for the 2024‑2025 fiscal year. The State Controller shall transfer funds available in the Housing Reserve to the Housing Finance Agency (Budget Code: 13010) in the sum of forty‑five million dollars ($45,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of forty‑five million dollars ($45,000,000) in nonrecurring funds for the 2024‑2025 fiscal year, and those funds are appropriated for the fiscal year in which they are transferred.

SECTION 2.2.(j) Transportation Reserve. – There is established in the General Fund a Transportation Reserve. The State Controller shall reserve to the Transportation Reserve from funds available in the General Fund the sum of four hundred fifty million dollars ($450,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of one hundred million dollars ($100,000,000) in nonrecurring funds for the 2024‑2025 fiscal year. Funds transferred under this subsection are appropriated to the Department of Transportation (Budget Code: 84210) for the fiscal year in which they are transferred to be used in accordance with this act.

SECTION 2.2.(k) NCInnovation. – There is established in the General Fund an NCInnovation Reserve to make funds available for NCInnovation, Inc. (NCInnovation), a North Carolina nonprofit corporation, for the purposes set out in Section 11.9 of this act. The State Controller shall reserve to the NCInnovation Reserve from funds available in the General Fund the sum of two hundred fifty million dollars ($250,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of two hundred fifty million dollars ($250,000,000) in nonrecurring funds for the 2024‑2025 fiscal year. The State Controller shall transfer portions of the funds in the NCInnovation Reserve to the Department of Commerce (Department) as provided in this subsection, and these funds are hereby appropriated to the Department for allocation to NCInnovation for purposes consistent with Section 11.9 of this act. The required transfers are as follows:

(1) Two hundred fifty million dollars ($250,000,000) upon the Department certifying to the State Controller that NCInnovation has met the requirements set out in Article 76B of Chapter 143 of the General Statutes, as enacted by Section 11.9 of this act.

(2) Two hundred fifty million dollars ($250,000,000) upon the later of July 1, 2024, or the Department certifying to the State Controller that NCInnovation has met the following requirements:

a. NCInnovation has established a network of regional innovation hubs with at least four regional innovation hubs.

b. NCInnovation has completed (i) research, technology, and innovation studies of the four regional innovation hubs to maximize local educational research efforts and the commercialization of those efforts to meet regional needs and (ii) a statewide strategic technology development plan.

c. NCInnovation has produced and provided to the Joint Legislative Commission on Governmental Operations detailed spending plans and performance management programs for awarding funds.

d. NCInnovation has received written commitments for private contributions totaling at least twenty‑five million dollars ($25,000,000) to be received within four years of receipt of the endowment.

e. NCInnovation has reported, at least semiannually, to the Joint Legislative Commission on Governmental Operations on the progress of meeting the requirements of this subdivision.

SECTION 2.2.(l) World University Games Reserve. – Section 2.2(j) of S.L. 2022‑74 reads as rewritten:

SECTION 2.2.(j) There is established in the General Fund a World University Games Reserve to make funds available to support the State of North Carolina as a host of the ~~2027~~ 2029 World University Games upon an act of appropriation by the General Assembly. The State Controller shall reserve to the World University Games Reserve from funds available in the General Fund the sum of twenty‑five million dollars ($25,000,000) in nonrecurring funds for the 2022‑2023 fiscal year. Funds in the reserve that have not been appropriated by ~~June 30, 2026,~~ June 30, 2024, shall revert to the General Fund and the World University Games Reserve shall be eliminated.

SECTION 2.2.(m) World University Games Appropriation. – The State Controller shall transfer to the Department of Commerce (Budget Code: 14602) the sum of twenty‑five million dollars ($25,000,000) in the 2023‑2024 fiscal year from the World University Games Reserve, and the funds transferred are appropriated for the fiscal year in which they are transferred. The Department shall annually report no later than October 1 following the conclusion of any fiscal year in which funds appropriated by this section are expended or encumbered on activities and programs supported by the funds. Funds appropriated by this subsection that have not been expended or encumbered by June 30, 2024, shall revert to the General Fund.

SECTION 2.2.(n) Regional Economic Development Reserve. – There is established in the General Fund a Regional Economic Development Reserve. The State Controller shall reserve to the Regional Economic Development Reserve from funds available in the General Fund the sum of one billion two hundred fifty million dollars ($1,250,000,000) in nonrecurring funds for the 2023‑2024 fiscal year and shall transfer funds available in the Reserve in accordance with the following schedule, and the funds transferred are appropriated for the fiscal year in which the funds are transferred:

State Agency or Department 2023‑2024 2024‑2025

(1) Office of State Budget and Management – Spec. Approp.

(Budget Code: 13085) $1,245,350,000 $4,650,000

SECTION 2.2.(p) Federal Infrastructure Match Reserve. – The State Controller shall reserve to the Federal Infrastructure Match Reserve established in Section 2.2(m) of S.L. 2022‑74 from funds available in the General Fund the sum of fifty million dollars ($50,000,000) in nonrecurring funds for the 2023‑2024 fiscal year. The State Controller shall transfer funds available in the Federal Infrastructure Match Reserve to agencies and departments as needed to draw down federal funds in accordance with the following schedule, and the funds transferred are appropriated for the fiscal year in which the funds are transferred:

State Agency or Department 2023‑2024 2024‑2025

(1) Department of Commerce

(Budget Code: 14600) $250,000 $250,000

(2) Department of Environmental Quality

(Budget Code: 14300) 850,000 850,000

(3) Department of Environmental Quality

(Budget Code: 24300) 1,388,921 1,388,921

(4) Department of Environmental Quality

Budget Code: 64305) 500,000 500,000

(5) Department of Environmental Quality

(Budget Code: 64311) 3,975,123 8,675,950

(6) Department of Environmental Quality

(Budget Code: 64320) 6,605,875 14,417,727

(7) Office of State Budget and Management

(Budget Code: 13005) 10,000,000 0

SECTION 2.2.(q) Medicaid Transformation Reserve. – The State Controller shall reserve to the Medicaid Transformation Reserve from funds available in the General Fund the sum of five million dollars ($5,000,000) in nonrecurring funds for the 2023‑2024 fiscal year. The State Controller shall transfer the sum of one hundred million dollars ($100,000,000) for the 2023‑2024 fiscal year and the sum of sixty million six hundred forty‑two thousand one hundred seventy dollars ($60,642,170) for the 2024‑2025 fiscal year from funds available in the Medicaid Transformation Reserve in the General Fund to the Medicaid Transformation Fund, established under Section 12H.29 of S.L. 2015‑241.

SECTION 2.2.(r) Savings Reserve. – Notwithstanding G.S. 143C‑4‑2, the State Controller shall transfer to the Savings Reserve the sum of one hundred twenty‑five million dollars ($125,000,000) in nonrecurring funds in the 2024‑2025 fiscal year.

SECTION 2.2.(s) Golden LEAF. – G.S. 143C‑9‑3(a1) reads as rewritten:

(a1) Each year, the sum of ~~seventeen million five hundred thousand dollars ($17,500,000)~~ twenty‑five million dollars ($25,000,000) 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.

SECTION 2.2.(t) Directives to Controller. – The State Controller shall ensure that the funds directed to be reserved in the 2023‑2024 fiscal year under this section are completed as soon as practicable but no later than the end of the 2023‑2024 fiscal year and the funds directed to be reserved in the 2024‑2025 fiscal year under this section are completed as soon as practicable but no later than the end of the 2024‑2025 fiscal year. In making the transfers required under this section, the State Controller shall prioritize transfers to Reserves that support expenditures occurring in the 2023‑2025 fiscal biennium.

SECTION 2.2.(u) Reservations Not Appropriation. – Except as otherwise specifically provided, nothing in this section shall be construed as appropriating funds reserved pursuant to this section. Funds reserved pursuant to this section 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.

PART III. Highway Fund and Highway Trust 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, 2025, according to the following schedule:

Highway Fund FY 2023‑24 FY 2024‑25

Administration $117,336,157 $117,336,157

Division of Highways

Administration 58,305,975 57,986,424

Construction 81,043,078 77,543,078

Maintenance 1,893,649,560 2,165,993,362

Governor's Highway Safety Program 324,111 324,111

OSHA 358,030 358,030

Aid to Municipalities 170,375,000 185,875,000

Intermodal Divisions

Ferry 74,029,849 64,679,849

Public Transportation, Bicycle

and Pedestrian 79,510,286 69,510,286

Aviation 184,174,429 179,374,429

Rail 45,299,938 45,299,938

Division of Motor Vehicles 172,914,364 147,883,896

Other State Agencies, Reserves, Transfers 59,459,404 72,817,577

Capital Improvements 29,819,819 10,571,863

Highway Fund Total $2,966,600,000 $3,195,554,000

HIGHWAY FUND AVAILABILITY

SECTION 3.2. The Highway Fund availability used in developing the 2023‑2025 fiscal biennial budget is shown below:

FY 2023‑2024 FY 2024‑2025

Beginning Balance $0 $0

Consensus Revenue Forecast

Motor Fuels Tax 1,805,200,000 1,827,700,000

Licenses and Fees 895,100,000 1,053,300,000

Short‑Term Lease 116,700,000 121,500,000

Investment Income 40,700,000 35,700,000

Sales Tax Transfer 106,300,000 163,000,000

Adjustments to Availability

Aviation Fuels Tax Changes 0 (11,100,000)

Sales Tax Changes (100,000) (300,000)

Title Fees – Transfer from Highway Trust Fund 1,500,000 1,954,000

Electric Vehicle Registration Fee Increase 500,000 2,000,000

Plug‑In Hybrid Registration Fee 700,000 1,800,000

Total Highway Fund Availability $2,966,600,000 $3,195,554,000

HIGHWAY TRUST FUND APPROPRIATIONS

SECTION 3.3. Appropriations from the State Highway Trust Fund for construction, for operations of the Department of Transportation, and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2025, according to the following schedule:

Highway Trust Fund FY 2023‑24 FY 2024‑25

Program Administration 42,017,311 42,017,311

Bond 121,439,825 121,436,775

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

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

FHWA State Match 6,070,440 6,176,440

Strategic Prioritization Funding

Plan for Transportation Investments 2,044,867,396 2,181,475,474

Transfer to Visitor Center 640,000 640,000

Highway Trust Fund Total $2,309,034,972 $2,445,746,000

HIGHWAY TRUST FUND AVAILABILITY

SECTION 3.4. The Highway Trust Fund availability used in developing the 2023‑2025 fiscal biennial budget is shown below:

FY 2023‑2024 FY 2024‑2025

Beginning Balance $0 $0

Unspent Advance Acquisition Hardship Funds 109,834,972 0

Consensus Revenue Forecast

Highway Use Tax 1,112,400,000 1,160,800,000

Motor Fuels Tax 598,900,000 602,500,000

Fees 142,100,000 170,900,000

Investment Income 28,900,000 25,300,000

Sales Tax Transfer 318,800,000 489,200,000

Adjustments to Availability

Sales Tax Changes (400,000) (1,000,000)

Title Fees – Transfer to Highway Fund (1,500,0000) (1,954,000)

Total Highway Trust Fund Availability $2,309,034,972 $2,445,746,000

PART IV. Other Availability and Appropriations

OTHER APPROPRIATIONS

SECTION 4.1.(a) State funds, as defined in G.S. 143C‑1‑1(d)(25), are appropriated for each year of the 2023‑2025 fiscal biennium, as follows:

(1) All budget codes listed in the Governor's Recommended Base Budget for the 2023‑2025 fiscal biennium, submitted pursuant to G.S. 143C‑3‑5, are appropriated up to the amounts specified, as adjusted by the General Assembly in this act and as delineated in the Committee Report described in Section 43.2 of this act, or in another act of the General Assembly.

(2) Agency receipts up to the amounts needed to implement the legislatively mandated salary increases and employee benefit increases provided in this act for each year of the 2023‑2025 fiscal biennium.

SECTION 4.1.(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 G.S. 143C‑6‑4. Overrealized receipts are appropriated in the amounts necessary to implement this subsection.

SECTION 4.1.(c) Funds may be expended only for the specified programs, purposes, objects, and line items or as otherwise authorized by the General Assembly.

OTHER RECEIPTS FROM PENDING AWARD GRANTS

SECTION 4.2.(a) Notwithstanding G.S. 143C‑6‑4, State agencies may, with approval of the Director of the Budget, spend funds received from grants awarded after the enactment of this act for grant awards that are for less than two million five hundred thousand dollars ($2,500,000). State agencies shall report to the Joint Legislative Commission on Governmental Operations, the chairs of the Senate Committee on Appropriations/Base Budget, the chairs of the House Appropriations Committee, and the Fiscal Research Division within 30 days of receipt of such funds.

State agencies may spend up to the greater of one percent (1%) or ten million dollars ($10,000,000) of the total amount of grants awarded after the enactment of this act to respond to an emergency, as defined in G.S. 166A‑19.3, with the approval of the Director of the Budget. State agencies shall report to the Joint Legislative Commission on Governmental Operations, the chairs of the Senate Committee on Appropriations/Base Budget, the chairs of the House Appropriations Committee, and the Fiscal Research Division within 30 days of receipt of such funds, including specifying the total amount of grants awarded to respond to the emergency.

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 4.2.(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 up to the applicable amount set forth in subsection (a) of this section and shall be incorporated into the authorized budget of the recipient State agency.

SECTION 4.2.(c) Notwithstanding the provisions of this section, no State agency may accept a grant not anticipated in this act if (i) 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 or (ii) the grant funds will be used for a capital project.

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

SECTION 4.3.(a) The allocations made from the Education Lottery Fund for the 2023‑2025 fiscal biennium are as follows:

FY 2023‑2024 FY 2024‑2025

Noninstructional Support Personnel $385,914,455 $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 254,252,612 258,252,612

Public School Repair & Renovation 50,000,000 50,000,000

Scholarship Reserve Fund for Public Colleges

and Universities 41,194,733 41,194,733

LEA Transportation 21,386,090 21,386,090

TOTAL ALLOCATION $931,000,000 $935,000,000

SECTION 4.3.(b) Article 38B of Chapter 115C of the General Statutes reads as rewritten:

Article 38B.

Needs‑Based Public School Capital Fund.

§ 115C‑546.10. Fund created; purpose; prioritization.

There is created the Needs‑Based Public School Capital Fund as an interest‑bearing, nonreverting special fund in the Department of Public Instruction. The State Treasurer shall be the custodian of the Needs‑Based Public School Capital Fund and shall invest its assets in accordance with the provisions of G.S. 147‑69.2 and G.S. 147‑69.3. The Department of Public Instruction shall award grants from the Fund to counties to assist with their critical public school building capital needs 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.

(5) Projects with new construction or complete renovation of existing facilities.

(6) Projects that will consolidate two or more schools into one new facility.

(7) Counties that have not received a grant under this Article in the previous three years.

§ 115C‑546.11. Matching requirement; use of funds; maximum awards; project review.

(a) An eligible county awarded a grant under this Article shall provide local matching funds from county funds, other non‑State funds, or a combination of these sources for the grant as provided in this section. An eligible county is a county with an adjusted market value of taxable real property of less than forty billion dollars ($40,000,000,000). The adjusted market value of taxable property in a county is equal to the county's assessed taxable real property value, using the latest available data published by the Department of Revenue, divided by the county's sales assessment ratio determined under G.S. 105‑289(h). The amount of matching funds for a county awarded a grant shall be published annually by the Department of Public Instruction prior to any application period. The local match requirement applied to the project shall be based on the match requirement effective at the time of the grant award. The local match requirement is calculated as follows:

Adjusted Market Value of Taxable Real Property

Over Up to Percentage Match

$0 $2 billion 0%

$2 billion $10 billion 5%

$10 billion $20 billion 15%

$20 billion $30 billion 25%

$30 billion $40 billion 35%

(b) Grant funds shall be used only for the construction of new school buildings and additions, repairs, and renovations. Grant funds shall not be used for real property acquisition or for capital improvements to administrative buildings. Grant funds shall be disbursed in a series of payments based on the progress of the project. To obtain a payment, the grantee shall submit a request for payment along with documentation of the expenditures for which the payment is requested and evidence that the matching requirement contained in subsection (a) of this section has been met. No portion of grant funds may be used to acquire a Leadership in Energy and Environmental Design (LEED) certification.

(1) Up to ~~thirty~~ forty‑two million dollars ~~($30,000,000)~~ ($42,000,000) for an elementary school.

(2) Up to ~~forty~~ fifty‑two million dollars ~~($40,000,000)~~ ($52,000,000) for a middle school or a combination of an elementary and middle school.

(3) Up to ~~fifty~~ sixty‑two million dollars ~~($50,000,000)~~ ($62,000,000) for a high school.

(d) The Department of Public Instruction shall review projected enrollment to evaluate the reasonableness of a project's size and scope. A county may include in a grant application a minimum grant amount that would enable the project to proceed. A grant application that proposes to consolidate two or more schools by (i) making additions or renovations at one or more school facilities and (ii) closing one or more existing school facilities may be submitted and considered by the Department of Public Instruction as a single project. Each application for a grant under this Article shall be evaluated independent of other grant applications submitted. A county may not apply for projects that exceed an aggregate amount greater than the maximum grant award amounts listed in subsection (c) of this section in any single year. The Department of Public Instruction shall not award a grant to an applicant at less than the requested amount or less than the maximum grant amounts listed in subsection (c) of this section for the purpose of reserving the amount of grant funds available for other grant applications. If a county declines or otherwise forfeits a grant awarded under this section, the Department shall not award additional grants to that county for 24 months from the date the grant award was declined or forfeited.

§ 115C‑546.12. Grant agreement; requirements.

(a) A county receiving grant funds pursuant to this Article shall enter into an agreement with the Department of Public Instruction detailing the use of grant funds. The agreement shall contain at least all of the following:

(1) A requirement that the grantee seek planning assistance and plan review from the School Planning Section of the Department of Public Instruction.

(2) A progress payment provision governing disbursements to the county for the duration of the school construction project based upon the construction progress and documentation satisfactory to the Department that the matching requirement in G.S. 115C‑546.11 has been met.

(3) A provision requiring periodic reports to the Department of Public Instruction on the use of disbursed grant funds and the progress of the school construction project.

(4) A requirement that matching funds paid by the county pursuant to G.S. 115C‑546.11 must be derived from non‑State and nonfederal funds.

(5) A provision requiring repayment in full of awarded grant funds in the event the grant recipient declines the grant award or the grant is forfeited.

(b) Project construction must be initiated within 24 months of the award of grant funds. The Superintendent of Public Instruction may grant a 12‑month extension under extraordinary circumstances.

(1) Project construction is not initiated on time.

(2) Project scope changes significantly from what was outlined in the grant agreement.

(3) Any statement or information provided in the grant application is later determined to be materially false.

(4) Local funding is subsequently decreased from the amount provided in the grant application.

(d) For grant awards that, due to extraordinary circumstances, are forfeited or declined, the Department of Public Instruction may deduct reasonable administrative costs incurred by the grant recipient in connection with the project from grant funds disbursed to the grant recipient in the calculation of fund repayment. A grant recipient shall provide documentation satisfactory to the Department to support any administrative costs to be deducted.

§ 115C‑546.13. Lease exception; requirements.

(a) Notwithstanding any provision of this Article to the contrary, a county may utilize grant funds for a lease agreement if all of the following criteria are met:

(1) Ownership of the subject property on which the leased school is constructed shall be retained by the county.

(2) The lease agreement shall include a repairs and maintenance provision that requires the landlord to bear the entire expense of all repairs, maintenance, alterations, or improvements to the basic structure, fixtures, appurtenances, and grounds of the subject property for the term of the lease.

(3) The lease agreement shall be for a term of at least 15 years and no more than 25 years.

(4) In lieu of the progress payment requirement provided in G.S. 115C‑546.11(b), a county that has entered into a lease agreement shall provide a copy of the lease agreement to the Department of Public Instruction and shall be periodically reimbursed upon submission of documentation satisfactory to the Department that the matching requirement of this section has been met.

(b) For the purposes of this section, the term lease agreement shall include any ancillary agreements or predevelopment agreements entered into in anticipation of or in accordance with a lease. A lease agreement entered into pursuant to this subsection shall be subject to the requirements of Article 8 of Chapter 159 of the General Statutes. In determining whether the lease agreement is necessary or expedient pursuant to G.S. 159‑151(a)(1) and G.S. 159‑151(b)(1), the Local Government Commission may consider any other relevant construction and financing methods available to the county.

§ 115C‑546.14. Reporting.

(a) On or before April 1 of each year, a grant recipient shall submit to the Department 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 Department of Public Instruction within three months of the completion of the project.

(b) On or before May 1 of each year, the Department 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, description, and geographic distribution 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.

SECTION 4.3.(c) The Department of Public Instruction may award additional grant funds for new construction, up to the maximum amounts provided in subsection (a) of this section, to a county that received an award for new construction under G.S. 115C‑546.11(c) during the 2022‑2023 fiscal year, provided that the county has not yet begun construction on the project. A county seeking additional funding pursuant to this subsection shall request additional funds from the Department in an amount not exceeding twelve million dollars ($12,000,000) by June 30, 2024, and shall provide actual bids or other documentation of cost increases satisfactory to the Department based upon the original project scope outlined in the grant agreement to support the requested additional funding. The additional grant awards provided pursuant to this subsection shall be subject to the same local matching requirement applicable when the previous grant was awarded. The Department may amend any existing agreements entered into with grant recipients from the initial grant award to accommodate the increased grant funding provided in this subsection. The Department may award additional grant funds under this subsection outside of the regular application process and time line; provided, however, all additional grant funds shall be awarded no later than June 30, 2025.

SECTION 4.3.(d) No later than January 1, 2024, the Department of Public Instruction shall publish guidelines for the Needs‑Based Public School Capital Fund program specifying the following:

(1) The extraordinary circumstances justifying an extension for the initiation of project construction.

(2) The criteria to determine if the project scope has changed significantly.

(3) The criteria to determine material falsehood in an application.

(4) The time line for repayment of forfeited grant awards.

(5) The extraordinary circumstances justifying a deduction of reasonable expenses incurred by a grant recipient from disbursed funds repayment due to forfeiture or declining a grant award.

LIMIT ONLINE LOTTERY GAMES

SECTION 4.3A.(a) G.S. 18C‑103(4) reads as rewritten:

(4) Game or lottery game means any procedure or amusement authorized by the Commission where prizes are distributed among persons who have paid, or unconditionally agreed to pay, for tickets or shares that provide the opportunity to win those prizes and does not utilize a video gaming machine as defined in G.S. 14‑306.1(c). The term does not include in‑person casino‑style table games or an online interactive version of any casino‑style table game that is all of the following:

a. Provided via computerized, digital simulation, or virtual versions of the casino‑style table game, or is conducted by one or more live persons.

b. Played in the same manner as the casino‑style table game.

c. Subject to commonly utilized rules of play for that casino‑style table game, including methods and factors for determining winners, prizes, or bonuses.

d. Made available to players through use of the internet via computers, mobile applications, or other interactive means.

e. Played upon payment, including acceptance of money or other compensation, by a server‑based gaming system located at the premises of a hosting facility or other similar technology.

SECTION 4.3A.(b) G.S. 18C‑130 reads as rewritten:

§ 18C‑130. Types of lottery games; lottery games and lottery advertising; certain disclosures and information to be provided.

(a) The Commission shall determine the types of lottery games that may be used in the ~~Lottery. Games~~ Lottery, which may include instant ~~lotteries,~~ lottery games, online lottery games, lottery games played on computer terminals or other devices, and other lottery games traditional to a lottery or that have been conducted by any other state government‑operated lottery.

(b) In lottery games using tickets, each ticket in a particular game shall have printed on it a unique number distinguishing it from every other ticket in that lottery game and an abbreviated form of the game‑play rules, including resources for responsible gaming information. In lottery games using tickets, each ticket may have printed on it a depiction of one or more cartoon characters, whose primary appeal is not to minors. In lottery games using tickets with preprinted winners, the overall estimated odds of winning prizes shall be printed on each ticket. No name or photograph of a current or former elected official shall appear on the tickets of any lottery game.

(c) In lottery games using electronic computer terminals or other devices to play the lottery games, no ~~coins or currency~~ coins, currency, or redemption ticket shall be dispensed to players from those electronic computer terminals or devices.

(d) No lottery games shall be based on the outcome of a particular sporting event or on the results of a series of sporting events. Sports wagers shall be governed by Article 9 of this Chapter.

(e) Lottery advertising shall be tastefully designed and presented in a manner to minimize the appeal of lottery games to minors. The use of cartoon characters or of false, misleading, or deceptive information in lottery advertising is prohibited. All advertising promoting the sale of lottery tickets or shares for a particular game shall include the actual or estimated overall odds of winning the game.

(f) The Commission shall make available a detailed tabulation of the estimated number of prizes of each particular prize denomination that are expected to be awarded in each lottery game or the estimated odds of winning these prizes at the time that lottery game is offered for sale to the public.

(g) The Commission shall, in consultation with the Department of Health and Human Services, develop and provide information to the public about gambling addiction and treatment.

SECTION 4.3A.(c) This section is effective when it becomes law and applies to any lottery game played on or after that date.

INDIAN GAMING EDUCATION REVENUE FUND APPROPRIATIONS/CLARIFY INDIAN GAMING LAWS TO MAKE CONSISTENT WITH COMPACT

SECTION 4.4.(a) Allocations are made from the Indian Gaming Education Revenue Fund for the fiscal biennium ending June 30, 2025, as follows:

FY 2023‑2024 FY 2024‑2025

Textbook and Digital Resources Allotment $10,000,000 $10,000,000

Classroom Materials 11,000,000 1,000,000

Total Appropriation $21,000,000 $11,000,000

SECTION 4.4.(b) G.S. 143C‑9‑7(b) reads as rewritten:

(b) Upon appropriation by the General Assembly, funds received in the Indian Gaming Education Revenue Fund shall be allocated quarterly by the State Board of Education to local school administrative units, charter schools, and regional schools on the basis of allotted average daily membership. The funds allotted by the State Board of Education pursuant to this section shall be nonreverting. Funds received pursuant to this section by local school administrative units in this State shall be expended for ~~classroom teachers, teacher assistants, classroom materials or supplies, or textbooks.~~the sole purpose of educating children in the classroom.

CIVIL PENALTY AND FORFEITURE FUND

SECTION 4.5. Allocations are made from the Civil Penalty and Forfeiture Fund for the fiscal biennium ending June 30, 2025, as follows:

FY 2023‑2024 FY 2024‑2025

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

Drivers Education 31,493,768 31,493,768

State Public School Fund 226,041,640 166,041,640

Total Appropriation $275,535,408 $215,535,408

CORONAVIRUS CAPITAL PROJECTS FUND RESERVE TRANSFER ADJUSTMENT

SECTION 4.6. Section 4.12 of S.L. 2021‑180 reads as rewritten:

SECTION 4.12. The State Controller shall transfer the sum of ~~two hundred seventy‑seven million sixty thousand eight hundred fifty‑five dollars ($277,060,855)~~ two hundred seventy‑three million five hundred eighty‑three thousand one hundred seventy‑nine dollars ($273,583,179) to align with the federal award letter received for the 2021‑2022 fiscal year from the Coronavirus Capital Projects Reserve, established in Section 2.3 of S.L. 2021‑25, to the Coronavirus Capital Projects Fund, established in Section 2.4 of S.L. 2021‑25.

GENERAL PROVISIONS FOR AMERICAN RESCUE PLAN ACT OF 2021 FUNDING

SECTION 4.7.(a) Definitions. – The definitions in S.L. 2021‑25 and the following definitions apply in this section:

(1) American Rescue Plan Act or ARPA. – The American Rescue Plan Act of 2021, as defined in S.L. 2021‑25.

(2) ARPA Temporary Savings Fund. – As established in Section 1.3 of S.L. 2023‑7.

(3) State Fiscal Recovery Fund. – As established in Section 2.2 of S.L. 2021‑25.

(4) State Fiscal Recovery Reserve. – As established in Section 2.1 of S.L. 2021‑25.

SECTION 4.7.(b) Guidance. – OSBM shall work with the recipient State agencies to budget receipts awarded pursuant to ARPA to allow for the tracking of such funds through either separate accounts or fund codes according to the program needs and within the parameters of the respective granting entities and applicable federal laws and regulations. State agencies shall not use funds received pursuant to ARPA for recurring purposes. Depending on the nature of the award, additional State personnel may be employed on a temporary or time‑limited basis.

SECTION 4.7.(c) Disbursement. – OSBM shall allocate State Fiscal Recovery Fund funds to State agencies and departments upon justification from the agency or department and only as needed to implement the provisions of this act. State Fiscal Recovery Fund funds shall be allocated to nonprofit organizations on a quarterly basis unless OSBM determines that cash flow or the nature of the program being funded requires otherwise.

SECTION 4.7.(d) Interest. – All interest earned on funds held in the State Fiscal Recovery Fund through June 30, 2025, shall be transferred to the State Fiscal Recovery Reserve. Effective July 1, 2025, all interest earned on funds held in the State Fiscal Recovery Fund shall be transferred to the General Fund. In accordance with version 5.1 of the Compliance and Reporting Guidance, issued on June 6, 2023, by the United States Department of Treasury (Treasury), Coronavirus State and Local Fiscal Recovery Funds (SLFRF) payments made to recipients are not subject to the requirements of the federal Cash Management Improvement Act and the Treasury's implementing regulations at 31 C.F.R. Part 205 or 2 C.F.R. § 200.305(b)(8) and (b)(9). As such, recipients (i) may place funds in interest‑bearing accounts, (ii) do not need to remit interests to the Treasury, and (iii) are not limited to using that interest for eligible uses under the SLFRF award.

SECTION 4.7.(e) Administration. – For administrative expenses related to administration of a provision allocating ARPA funds in this act, a State agency may, of ARPA funds allocated to it under this act, use up to the lesser of (i) the amount allowed by federal law or guidance or (ii) ten percent (10%) of ARPA funds allocated to it under this act. When utilizing the authority set forth in this subsection, a State agency shall not reduce funds earmarked in this act, or the Committee Report described in Section 43.2 of this act, for a particular local government project or non‑State entity project.

SECTION 4.7.(f) Accounting. – A State agency receiving State Fiscal Recovery Fund funds shall track such funds separately from other funds by use of either separate accounts or fund codes.

SECTION 4.7.(g) Reports. – In addition to any report required under this section or any other law, OSBM shall provide a quarterly report to the Senate Committee on Appropriations/Base Budget, the House Appropriations Committee, and the Fiscal Research Division, beginning October 15, 2023, detailing the use of State Fiscal Recovery Fund funds allocated under this act. The report required from OSBM under this section shall include, for the preceding quarter, the amount of funds disbursed to each State agency, State department, and nonprofit organization; the amount of funds remaining to be disbursed to each State agency, State Department, and nonprofit organization; and how the funds were used by each State agency, State department, and nonprofit organization.

SECTION 4.7.(h) Audit. – The State Auditor shall conduct biennial preliminary financial audits and a final performance audit of the State Fiscal Recovery Fund no later than 90 days following the latest date on which expenditures may be made under applicable federal law or guidance.

SECTION 4.7.(i) Reversion. – The funds appropriated from the State Fiscal Recovery Fund in this act and in prior enactments of the General Assembly shall not revert at the end of each fiscal year of the 2023‑2025 fiscal biennium but shall remain available to expend and appropriate until the date set by applicable federal law or guidance.

SECTION 4.7.(j) Exclusion. – This section does not apply to funds allocated in this act from the ARPA Temporary Savings Fund or to the Department of Health and Human Services with regard to any federal receipts arising from the enhanced federal medical assistance percentage (FMAP) available to the State under section 9814 of ARPA or any savings realized as a result of those receipts.

TRANSFER OF STATE FISCAL RECOVERY FUNDS FROM STATE FISCAL RECOVERY RESERVE

SECTION 4.8. The State Controller shall transfer the sum of twenty million one hundred two thousand two hundred fifty‑three dollars ($20,102,253) for the 2023‑2024 fiscal year and ten million three hundred ninety‑seven thousand seven hundred forty‑seven dollars ($10,397,747) for the 2024‑2025 fiscal year from the State Fiscal Recovery Reserve to the State Fiscal Recovery Fund and shall transfer funds from the State Fiscal Recovery Fund to State agencies and departments in accordance with the following schedule:

State Agency or Department 2023‑2024 2024‑2025

(1) Department of Information Technology $16,250,000 $10,397,747

(Budget Code: 14660)

(2) Office of State Budget & Management–Spec. Approp. 50,000 0

(Budget Code: 13085)

TRANSFER OF INTEREST EARNED FROM STATE FISCAL RECOVERY RESERVE

SECTION 4.8A.(a) The State Controller shall transfer interest earned from State Fiscal Recovery Funds in the State Fiscal Recovery Reserve to State agencies and departments in accordance with the following schedule:

State Agency or Department 2023‑2024 2024‑2025

(1) Department of Information Technology

(Budget Code: 14660) $0 $5,852,253

(2) Department of Commerce

(Budget Code: 14602) 4,000,000 0

(3) Department of Commerce

(Budget Code: 14601) 7,000,000 0

(4) Department of Commerce

(Budget Code: 14600) 40,000 0

(5) Department of Agriculture & Consumer Services

(Budget Code: 23704 3,500,000 0

(6) Department of Agriculture & Consumer Services

(Budget Code: 63701) 10,000,000 15,000,000

(7) Department of Agriculture & Consumer Services

(Budget Code: 13700) 19,118,172 15,808,853

(8) Department of Environmental Quality

(Budget Code: 24300) 850,000 0

(9) Department of Natural & Cultural Resources

(Budget Code: 24820) 12,500,000 0

(10) Department of Natural & Cultural Resources

(Budget Code: 24817) 24,500,000 17,500,000

(11) Department of Natural & Cultural Resources

(Budget Code: 14800) 7,000,000 0

(12) Department of Public Safety

(Budget Code: 14550) 1,295,918 0

(13) Wildlife Resources Commission

(Budget Code: 14350) 3,580,369 0

(14) Appalachian State University

(Budget Code: 16080) 2,416,888 1,477,752

(15) UNC BOG – Institutional Programs

(Budget Code: 16011) 5,000,000 5,000,000

(16) UNC at Greensboro

(Budget Code: 16040) 11,000,000 11,000,000

(17) Department of Public Instruction

(Budget Code: 13510) 10,000,000 0

(18) Department of Transportation

Budget Code: 84210) 14,000,000 0

(19) Office of State Budget & Management–Spec. Approp.

(Budget Code: 13085) 38,500,000 8,000,000

SECTION 4.8A.(b) Funds allocated from interest earned from the State Fiscal Recovery Reserve shall be disbursed as follows: (i) allocations of one hundred thousand dollars ($100,000) or less are to be made in a single payment, (ii) allocations of more than one hundred thousand dollars ($100,000) shall be made in quarterly payments. A State agency administering an allocation shall begin disbursement of funds to a non‑State entity that meets all applicable requirements as soon as practicable, but no later than 100 days after the date this act becomes law.

STATE FISCAL RECOVERY FUNDS FOR BONUSES ADJUSTMENT

SECTION 4.8B. Allocation of Funds. – Section 39.2(f) of S.L. 2021‑180 reads as rewritten:

SECTION 39.2.(f) Of the funds appropriated in this act from the State Fiscal Recovery Fund, the sum of five hundred ~~forty‑five~~ twenty‑three million eight hundred two thousand two hundred fifty‑three dollars ~~($545,000,000)~~ ($523,802,253) for the 2021‑2022 fiscal year is allocated to provide the one‑time, lump sum bonuses authorized in this section to State employees and local education employees for work performed during the COVID‑19 pandemic.

ARPA TEMPORARY SAVINGS FUND

SECTION 4.9.(a) General. – Funds appropriated in this act from the ARPA Temporary Savings Fund, established in Section 1.3(a) of S.L. 2023‑7, to State agencies and departments shall be used for the purposes described in this act, or in the Committee Report described in Section 43.2 of this act, for the fiscal year in which they are appropriated. Funds appropriated in this act from the ARPA Temporary Savings Fund shall not revert.

SECTION 4.9.(b) Availability of Funds and Timing of Disbursements. – The funds appropriated in this act from the ARPA Temporary Savings Fund shall become available during the course of the 2023‑2025 fiscal biennium as the funds are deposited into that Fund. The Department of Health and Human Services (DHHS) shall not disburse allocations of the funds appropriated in this act from the ARPA Temporary Savings Fund until the funds are available within that Fund. After funds begin to be deposited to the Fund, DHHS shall disburse funds on at least a quarterly basis, or more frequently, provided funds are available within the Fund. Funds allocated as described in this act, or in the Committee Report described in Section 43.2 of this act, shall be disbursed as directed under subsections (c) and (d) of this section.

SECTION 4.9.(c) Priority of Disbursement of Funds in the 2023‑2024 Fiscal Year. – For the 2023‑2024 fiscal year, funds appropriated in this act from the ARPA Temporary Savings Fund and allocated as described in this act, or in the Committee Report described in Section 43.2 of this act, shall be disbursed in the following order:

(1) The Department of Public Instruction (Budget Code 13510) for Health Career Promotion.

(2) The Department of Health and Human Services, Division of Health Benefits, (Budget Code 14445) for Rates for Durable Medical Equipment.

(3) The Department of Health and Human Services, Division of Health Benefits, (Budget Code 14445) for Federally Qualified Health Centers and Rural Health Clinics.

(4) East Carolina University – Health Affairs (Budget Code 16066) for ECU Primary Care Programs Expansion.

(5) UNC BOG – Related Education Programs (Budget Code 16012) for Primary Care Providers and Psychiatrists Forgivable Loan Program.

(6) The Department of Health and Human Services, Division of Health Benefits, (Budget Code 14445) for Rates for Personal Care Services.

(7) The Department of Public Instruction (Budget Code 13510) for School Health Personnel Allotment.

(8) UNC at Pembroke (Budget Code 16082) for UNCP Health Sciences.

(9) NC Community College System (Budget Code 16800) for Nursing and Health‑Related Workforce Programs Start‑up Funds.

(10) UNC BOG – Institutional Programs (Budget Code 16011) for Rural Residency Medical Education and Training Fund.

(11) The Department of Health and Human Services, Division of Health Benefits, (Budget Code 14445) for Medicaid Rebase.

(12) The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Use Services, (Budget Code 14460) for State Facility Workforce Investment.

(13) The Department of Health and Human Services, Central Management and Support, Office of Rural Health (Budget Code 14410) for Incentives for Health Providers in Rural and Underserved Areas.

(14) The Department of Health and Human Services, Division of Health Benefits, (Budget Code 14445) for Rates for Skilled Nursing Facilities.

(15) In order of least to most, all remaining allocations that are not allocations made through funds appropriated to the State Capital and Infrastructure Fund.

(16) In order of least to most, allocations made through funds appropriated to the State Capital and Infrastructure Fund.

If there are two or more allocations in subdivision (15) or subdivision (16) of this subsection that are of equal amounts, then the funds for those allocations shall be disbursed in the order determined by the Secretary of DHHS, taking into account any time lines for the use of the funds, the best interest of the citizens of the State, and the avoidance of any disruption in services to those citizens.

SECTION 4.9.(d) Priority of Disbursement of Funds in the 2024‑2025 Fiscal Year. – For the 2024‑2025 fiscal year, funds appropriated in this act from the ARPA Temporary Savings Fund and allocated as described in this act, or in the Committee Report described in Section 43.2 of this act, shall be disbursed in the following order:

(1) East Carolina University – Health Affairs (Budget Code 16066) for ECU Primary Care Programs Expansion.

(2) The Department of Public Instruction (Budget Code 13510) for Health Career Promotion.

(3) UNC BOG – Institutional Programs (Budget Code 16011) for Rural Residency Medical Education and Training Fund.

(4) The Department of Health and Human Services, Division of Health Benefits, (Budget Code 14445) for Federally Qualified Health Centers and Rural Health Clinics.

(5) UNC BOG – Related Education Programs (Budget Code 16012) for Primary Care Providers and Psychiatrists Forgivable Loan Program.

(6) UNC at Pembroke (Budget Code 16082) for UNCP Health Sciences.

(7) NC Community College System (Budget Code 16800) for Nursing and Health‑Related Workforce Programs Start‑up Funds.

(8) The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Use Services, (Budget Code 14460) for State Facility Workforce Investment.

(9) The Department of Health and Human Services, Central Management and Support, Office of Rural Health (Budget Code 14410) for Incentives for Health Providers in Rural and Underserved Areas.

(10) In order of least to most, all remaining allocations that are not allocations made through funds appropriated to the State Capital and Infrastructure Fund.

(11) In order of least to most, allocations made through funds appropriated to the State Capital and Infrastructure Fund.

If there are two or more allocations in subdivision (10) or subdivision (11) of this subsection that are of equal amounts, then the funds for those allocations shall be disbursed in the order determined by the Secretary of DHHS, taking into account any time lines for the use of the funds, the best interest of the citizens of the State, and the avoidance of any disruption in services to those citizens.

SECTION 4.9.(e) Administrative Costs. – State agencies and departments and any non‑State entities receiving funds from the ARPA Temporary Savings Fund may use a portion of those funds for administrative costs, including time‑limited positions, related to the designated purpose of the funds. Unless otherwise specified, the amount of funds from the ARPA Temporary Savings Fund used for administrative costs for each purpose designated for the allocation described in this act, or in the Committee Report described in Section 43.2 of this act, may not exceed the lesser of the following amounts:

(1) Up to five percent (5%) of the amount of funds allocated specifically to that designated purpose.

(2) One million dollars ($1,000,000).

This subsection does not apply to any funds appropriated to the State Capital and Infrastructure Fund.

SECTION 4.9.(f) Reporting. – Beginning October 1, 2024, and annually thereafter, in addition to any report required under this act or any other law, State agencies and departments and any non‑State entities receiving funds from the ARPA Temporary Savings Fund shall submit a report to the Fiscal Research Division detailing the use of funds appropriated in this act from the ARPA Temporary Savings Fund for the previous fiscal year until the funds received are fully expended. The report required under this section shall include the amount of funds received to date, how the funds were used during the previous fiscal year, and the amount of funds that remained unspent at the end of the previous fiscal year. This subsection does not apply to any funds appropriated to the State Capital and Infrastructure Fund.

statewide mental health legislative budget priorities

SECTION 4.9C. The General Assembly finds that prioritizing mental healthcare in this State offers significant benefits to North Carolina's citizens of all ages and has positive impacts on a multitude of factors impacting those citizens, including overall health and well‑being, education, business, workforce development, and the justice system. The General Assembly supports the comprehensive plan to strengthen North Carolina's mental health and substance use disorder treatment system developed by the Department of Health and Human Services and is providing funding for initiatives contained within that plan. Further demonstrating a commitment to mental healthcare in this State, the General Assembly is also providing funding for additional mental and behavioral healthcare facilities, projects, programs, and services that will impact a diverse array of State departments and agencies, as well as local entities and enterprises in this State, thereby benefitting citizens statewide.

TRANSFORMATIONAL INVESTMENTS IN NORTH CAROLINA HEALTH

CLARIFICATION OF THE AUTHORITY OF THE UNIVERSITY OF NORTH CAROLINA HEALTH CARE SYSTEM AND EAST CAROLINA UNIVERSITY HEALTH CARE operations WITH RESPECT TO OPERATIONal AND PERSONNEL FLEXIBILITIES

SECTION 4.10.(a) G.S. 116‑37, 116‑37.2, 116‑36.6, 116‑40.4, and 116‑40.6 are repealed. Notwithstanding the repeal of G.S. 116‑37, if Senate Bill 512, 2023 Regular Session, becomes law, then subsections (b) through (e) of Section 8.1 of said Senate Bill 512, 2023 Regular Session, pertaining to the terms and appointments of members of the Board of Directors of the University of North Carolina Health Care System shall remain in effect.

SECTION 4.10.(b) Chapter 116 of the General Statutes is amended by adding the following new Articles to read:

Article 38.

University of North Carolina Health Care System.

Part 1. Health Care System.

§ 116‑350. Definitions.

The following definitions shall apply in this Article:

(1) Board or Board of Directors. – The Board of Directors of the University of North Carolina Health Care System.

(2) Chief Executive Officer. – The executive and administrative head of the University of North Carolina Health Care System.

(3) Component unit. – Any of the following:

a. The University of North Carolina Hospitals at Chapel Hill.

b. A clinical patient care program established or maintained by the School of Medicine of the University of North Carolina at Chapel Hill.

(4) System affiliate. – Any corporation, partnership, limited liability company, joint venture, association business trust, or similar entity organized under the laws of the United States of America or any state thereof, whether for profit or nonprofit, if a majority of the members of the governing body or of its partnership or membership interests are one of the following:

a. The same as the members of the Board of the System.

b. Subject, directly or indirectly, to election or appointment by the Board of the System.

(5) The University of North Carolina Health Care System or System. – The entity created pursuant to G.S. 116‑350.5, the component units of which include the University of North Carolina Hospitals at Chapel Hill and the clinical patient care programs established or maintained by the School of Medicine of the University of North Carolina at Chapel Hill.

§ 116‑350.5. University of North Carolina Health Care System.

(a) Establishment of System. – Effective November 1, 1998, the University of North Carolina Health Care System is established. The System is a State agency and political subdivision governed and administered as an affiliated enterprise of The University of North Carolina in accordance with the provisions of this Article. The System shall provide patient care; facilitate the education of physicians and other health care providers in partnership with the University of North Carolina at Chapel Hill School of Medicine and other health sciences schools affiliated with the constituent institutions of The University of North Carolina System; conduct research collaboratively with the health sciences schools of the University of North Carolina at Chapel Hill and other institutions; facilitate clinical collaboration with and financial sustainability of the University of North Carolina at Chapel Hill School of Medicine; render other services designed to promote the health and well‑being of the citizens of North Carolina; and drive innovation and transformation in health care services delivery.

(b) Transfer of Rights. – As of November 1, 1998, all of the rights, privileges, liabilities, and obligations of the Board of the University of North Carolina Hospitals at Chapel Hill, not inconsistent with the provisions of this Article, shall be transferred to and assumed by the Board of the System.

(c) Governance. – The Board of the System shall govern and administer The University of North Carolina Hospitals at Chapel Hill, the clinical patient care programs established or maintained by the School of Medicine of the University of North Carolina at Chapel Hill, and such other entities and functions as (i) the General Assembly may assign to the System or (ii) the Board may decide, within the limitations of its statutory powers and duties, to establish, administer, or acquire for the purpose of rendering services designed to promote the health and well‑being of the citizens of North Carolina.

(d) With respect to G.S. 116‑350.30, 116‑350.35, 116‑350.40, 116‑350.45, and 116‑350‑65, the Board may adopt policies that make the authorities and responsibilities established by one or more of said sections applicable to the University of North Carolina Hospitals at Chapel Hill, to the clinical patient care programs of the School of Medicine of the University of North Carolina at Chapel Hill, to both, or to other persons or entities affiliated with or under the control of the University of North Carolina Health Care System.

§ 116‑350.10. Board of Directors.

(a) The Board shall be composed of 25 members as follows:

(1) Five ex officio members as follows:

a. The President of The University of North Carolina or the President's designee.

b. The Chief Executive Officer of the University of North Carolina Health Care System.

c. The Chancellor of the University of North Carolina at Chapel Hill.

d. Two individuals designated by the Chief Executive Officer who meet the following criteria:

1. Both designees must be members of the executive staff of the University of North Carolina Health Care System.

2. At least one of the two designees must be a permanent member of the faculty of the School of Medicine of the University of North Carolina at Chapel Hill.

3. One of the designees must have primary responsibility for hospital leadership.

4. One of the designees must have primary responsibility for physician leadership.

(2) Eight members at large shall be appointed by the General Assembly as follows:

a. One member shall be appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives annually.

b. One member shall be appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate annually.

(3) Twelve members at large shall be appointed by the President of The University of North Carolina and confirmed by the Board of Governors. The President shall appoint a slate of three members annually for confirmation by the Board of Governors.

(4) All at‑large positions shall serve four‑year terms beginning November 1 of the year of appointment. At‑large positions shall be filled by the appointment of persons from the business and professional public at large who have special competence in business management, hospital administration, health care delivery, or medical practice or who otherwise have demonstrated dedication to the improvement of health care in North Carolina. At‑large positions shall not be filled by any of the following:

a. Members of the Board of Governors.

b. Members of the board of trustees of a constituent institution of The University of North Carolina.

c. Officers or employees of the State.

d. Individuals required by Chapter 120C of the General Statutes to register as lobbyists on or during any of the following:

1. The two years immediately preceding the effective date of appointment.

2. The effective date of the appointment.

3. At any point during the term of appointment.

(5) No member may be appointed to more than two full four‑year terms in succession.

(6) Any vacancy in an unexpired term shall be filled by the appointing authority for the remainder of the unexpired term. Vacancies for members appointed by the General Assembly shall be filled as provided in G.S. 120‑122. Vacancies for members appointed by the President of The University of North Carolina shall be confirmed by the Board of Governors.

(7) Whenever an at‑large member shall fail, for any reason other than ill health or service in the interest of the State or nation, to be present for three successive regular meetings of the Board of Directors, that at‑large member's place as a member shall be deemed vacant.

(b) The Board, with each ex officio and at‑large member having a vote, shall elect a chair only from among the at‑large members for a term of two years. Notwithstanding the foregoing limitation, the Chancellor of the University of North Carolina at Chapel Hill may serve as chair. No person shall be eligible to serve as chair for more than three terms in succession.

(c) The Board shall meet at least every 60 days and may hold special meetings at any time and place within the State at the call of the chair. Board members, other than ex officio members, shall receive the same per diem and reimbursement for travel expenses as members of the State boards and commissions generally.

(d) The Board's action on matters within its jurisdiction is final, except that appeals may be made, in writing, to the Board of Governors with a copy of the appeal to the Chancellor of the University of North Carolina at Chapel Hill. The Board shall keep the Board of Governors and the board of trustees of the University of North Carolina at Chapel Hill fully informed about health care policy and recommend changes necessary to maintain adequate health care delivery, education, and research for improvement of the health of the citizens of North Carolina.

§ 116‑350.12. Operational principles of the Board of Directors.

The Board of Directors shall operate according to the following principles:

(1) All members of the Board of Directors shall be considered fiduciaries of the University of North Carolina Health Care System and shall be responsible for the following:

a. Discharging their duties to the System with care, skill, prudence, and diligence.

b. Acting in good faith and in the best interests of the System.

c. Conducting themselves, at all times, in furtherance of the System's organizational goals and not the member's personal or business interests.

d. Providing oversight to ensure that the System's resources are dedicated to the fulfillment of its mission.

e. Becoming knowledgeable about issues that affect the System.

(2) The authority of board members shall be collective, not individual, and shall only arise from each member's participation with other members of the Board of Directors when officially convened. Individual board members shall hold no authority to exercise administrative or executive functions on behalf of the System, which shall be vested in the Chief Executive Officer of the System. Individual board members may not bind the Board of Directors or the System, enter into contracts on behalf of the Board of Directors or the System, or otherwise act on behalf of or in the name of the Board of Directors or the System unless authorized to do so by official action of the Board of Directors or the Chief Executive Officer.

(3) Board members shall adhere to the highest standards of ethical conduct by complying with laws, regulations, and System policies applicable to their service.

§ 116‑350.15. Powers and duties of the Board of Directors.

(a) Contracting Authority. – The Board may authorize the System or any component unit of the System to contract in its individual capacity, subject to such policies and procedures as the Board may direct.

(b) Agreements with Constituent Institutions. – The Board may enter into formal agreements with constituent institutions of The University of North Carolina with respect to the provision of clinical experience for students and for the provision of maintenance and supporting services.

(c) General Powers and Duties. – The Board is authorized to exercise such authority and responsibility and adopt such policies, rules, and regulations as it deems necessary or convenient, not inconsistent with the provisions of this Article, to carry out the patient care, education, research, and public service mission of the System, including, but not limited to, authority to do the following:

(1) Construct, plan, create, equip, operate, and maintain health care facilities and ancillary enterprises.

(2) Collect, manage, and control all receipts generated through its clinical operations and other activities.

(3) Issue bonds and notes as provided in G.S. 116‑350.55.

(4) Acquire and dispose of real or personal property, including existing public or private hospital and health care facilities, by purchase, grant, gift, devise, lease, or otherwise.

(5) Enter into partnerships, affiliations, and other combinations or arrangements with other hospitals or health care entities, as it deems appropriate, including arrangements for management services, to achieve its missions of patient care, education, research, and public service.

(6) Contract with or enter into any arrangement, including through interlocal cooperation agreements under Part 1 of Article 20 of Chapter 160A of the General Statutes, with other public hospitals of this or other states, federal or public agencies, or with any person, private organization, or nonprofit corporation for the provision of health care.

(7) Insure property or operations of the System against risks as the Board may deem advisable.

(8) Except as provided in G.S. 116‑350.40, to invest any funds held in reserves or sinking funds, or any funds generated from operations, in property or securities in which trustees, executors, or others acting in a fiduciary capacity may legally invest funds under their control.

(9) Exercise the following powers conferred upon municipal hospitals and hospital authorities under Article 2 of Chapter 131E of the General Statutes:

a. The power to enter into agreements with other hospital entities subject to Article 2 of Chapter 131E of the General Statutes to jointly exercise the powers, privileges, and authorities granted by Article 2 of Chapter 131E of the General Statutes.

b. The power to lease any hospital facility, or any part of a hospital facility, to a nonprofit corporation, provided that the terms and conditions of such lease are consistent with the public purposes described in G.S. 131E‑12.

c. The power to acquire an ownership interest, in whole or in part, in a nonprofit or for‑profit managed care company, as provided in G.S. 131E‑7.1.

d. All powers set forth in G.S. 131E‑23 that are not otherwise addressed by this Part.

(10) Exercise any or all powers conferred upon the Board, either generally or with respect to any specific health care facility or other operations, through or by designated agents, including private corporations, nonprofit corporations, or limited liability companies formed under the laws of the State.

(11) Have the powers of a body corporate and politic, including the power to sue and be sued, to make contracts, and to adopt and use a common seal and to alter the same as may be deemed expedient.

(d) Limitations. – Notwithstanding the powers and duties provided in this section, the Board shall not relinquish to another entity more than fifty percent (50%) of control of either the UNC Hospitals or the System.

§ 116‑350.20. Reports due from the Board of Directors.

The Chief Executive Officer and the President of The University of North Carolina jointly shall report by December 31 of each year on the operations and financial affairs of the System to the Joint Legislative Commission on Governmental Operations and the Board of Governors of The University of North Carolina. The report shall include actions taken by the Board under the authority granted by G.S. 116‑350.35.

§ 116‑350.25. System Officers and their staff.

(a) Chief Executive Officer. – The executive and administrative head of the University of North Carolina Health Care System shall have the title of Chief Executive Officer. The Board of Directors, the board of trustees, and the Chancellor of the University of North Carolina at Chapel Hill, following such search process as the boards and the Chancellor deem appropriate, shall identify two or more persons as candidates for the office, who, pursuant to criteria agreed upon by the boards and the Chancellor, have the qualifications for both the positions of Chief Executive Officer of the University of North Carolina Health Care System and Vice‑Chancellor for Medical Affairs of the University of North Carolina at Chapel Hill. The names of the candidates so identified, once approved by the Board of Directors and the board of trustees, shall be forwarded by the Chancellor to the President of The University of North Carolina, who if satisfied with the quality of one or more of the candidates, will nominate one as Chief Executive Officer, subject to selection by the Board of Governors. The individual serving as Chief Executive Officer shall have complete executive and administrative authority to formulate proposals for, recommend the adoption of, and implement policies governing the programs and activities of the University of North Carolina Health Care System, subject to all requirements of the Board of Directors. That same individual, when serving as Vice‑Chancellor for Medical Affairs, shall have all authorities, rights, and responsibilities of a vice‑chancellor of the University of North Carolina at Chapel Hill.

(b) President of UNC Hospitals. – The executive and administrative head of the University of North Carolina Hospitals at Chapel Hill shall have the title of President of the University of North Carolina Hospitals at Chapel Hill. The Board of Directors shall elect, on nomination of the Chief Executive Officer, the President of the University of North Carolina Hospitals at Chapel Hill.

(c) Administrative and Professional Staff. – The Board of Directors shall elect, on nomination of the Chief Executive Officer, such additional administrative and professional staff employees of the University of North Carolina Health Care System as may be deemed necessary to assist in fulfilling the duties of the office of the Chief Executive Officer, all of whom shall serve at the pleasure of the Chief Executive Officer.

§ 116‑350.30. Personnel.

(a) Employment Authority. – The System may employ a workforce to conduct its operations. Employees who are employed directly by the System, and not by a System affiliate, are State employees whose terms and conditions of employment, including benefit plans and programs, are determined by the Board. Only Articles 5, 6, 7, and 14 of Chapter 126 of the General Statutes, the State Human Resources Act, apply to these State employees. The Board of the System may authorize the System to employ the faculty and staff of the University of North Carolina School of Medicine as well as other health affairs schools and components of the University of North Carolina at Chapel Hill subject to the provisions of this subsection, provided that any employees who are faculty members shall remain subject to the faculty policies of the University of North Carolina at Chapel Hill, as established or adopted pursuant to delegation from the Board of Governors of The University of North Carolina. A State employee employed by the System immediately prior to January 1, 2024, has the right to (i) continued State employment if the employee remains in the employee's current role or position, unless terminated in accordance with the terms of employment that existed immediately prior to January 1, 2024, subject to all relevant provisions of State and federal law and (ii) continued participation in the State Teachers' and State Employees' Retirement System if the employee was enrolled in the Retirement System immediately prior to January 1, 2024, and maintains State employee status.

(b) Certain Career State Employees. – Notwithstanding subsection (a) of this section, a State employee who achieved career State employee status by October 31, 1998, shall remain subject to the rules regarding discipline or discharge that were effective on October 31, 1998, and shall not be subject to the rules regarding discipline or discharge adopted after that date.

§ 116‑350.35. Finances.

(a) System Budgeting. – The System, the UNC Hospitals, and designated component parts of The University of North Carolina shall not be subject to the provisions of the State Budget Act, except for General Fund appropriations, or otherwise subject to the authority, oversight, or control of the Office of the State Controller. The System, the UNC Hospitals, and designated component parts of The University of North Carolina shall be subject to the authority and oversight of the Office of the State Auditor. The Chief Executive Officer, subject to the Board, shall be responsible for all aspects of budget preparation, budget execution, and expenditure reporting for the System. Separate auditable accounts under the control of the Board shall be maintained for the UNC Hospitals and the clinical patient care programs of the School of Medicine of the University of North Carolina at Chapel Hill. Except for General Fund appropriations, all receipts of the UNC Hospitals may be invested pursuant to G.S. 116‑350.40. General Fund appropriations for support of the UNC Hospitals shall be budgeted in a General Fund code under a single purpose, Contribution to University of North Carolina Hospitals at Chapel Hill Operations and be transferable to a special fund operating code as receipts. All revenues generated from operations, appropriations, or funds otherwise under the control of the Board shall exclusively be used in furtherance of the missions and goals of the System as determined or approved by the Board.

(b) Patient/Health Care System Benefit. – The Chief Executive Officer, or the Chief Executive Officer's designee, may expend operating budget funds, including State funds, of the System for the direct benefit of a patient, when, in the judgment of the Chief Executive Officer or the Chief Executive Officer's designee, the expenditure of these funds would result in a financial benefit to the System. Any such expenditures are declared to result in the provision of medical services and create charges of the University of North Carolina Health Care System for which the health care system may bill and pursue recovery in the same way as allowed by law for recovery of other health care systems' charges for services that are unpaid.

These expenditures shall be restricted (i) to situations in which a patient is financially unable to afford ambulance or other transportation for discharge; (ii) to afford placement in an after‑care facility; (iii) to assure availability of a bed in an after‑care facility after discharge from the hospitals; (iv) to secure equipment or other medically appropriate services after discharge; or (v) to pay health insurance premiums. The Chief Executive Officer or the Chief Executive Officer's designee shall reevaluate at least once a month the cost effectiveness of any continuing payment on behalf of a patient.

To the extent that the System advances anticipated government entitlement benefits for a patient's benefit, for which the patient later receives a lump sum back pay award from an agency of the State, whether for the current admission or subsequent admission, the State agency shall withhold from this back pay an amount equal to the sum advanced on the patient's behalf by the System, if, prior to the disbursement of the back pay, the applicable State program has received notice from the System of the advancement.

§ 116‑350.40. Regulation of UNC Hospitals funds.

(a) Definition of Funds. – As used in this section, funds means:

(1) Moneys, or the proceeds of other forms of property, received by the UNC Hospitals as gifts or devises.

(2) Moneys received by the UNC Hospitals pursuant to grants from, or contracts with, the United States government or any agency or instrumentality thereof.

(3) Moneys received by the UNC Hospitals pursuant to grants from, or contracts with, any State agencies, any political subdivisions of the State, any other states or nations or political subdivisions thereof, or any private entities whereby the UNC Hospitals undertakes, subject to terms and conditions specified by the entity providing the moneys, to conduct research, training, or public service programs.

(4) Moneys received from or for the operation by the UNC Hospitals of any of its self‑supporting auxiliary enterprises, including the Liability Insurance Trust Fund.

(5) Moneys received for services UNC Hospitals and the patient care programs established or maintained by the School of Medicine of the University of North Carolina at Chapel Hill render in its hospital, clinics, and other operations.

(6) Moneys received by the UNC Hospitals in respect to borrowings for capital equipment or construction projects to further services it renders in either or both of its hospital or clinical operations.

(7) The net proceeds from the disposition effected pursuant to Article 7 of Chapter 146 of the General Statutes of any interest in real property owned by or under the supervision and control of the UNC Hospitals if the interest in real property had first been acquired by gift or devise or through expenditure of moneys defined in this section, except the net proceeds from the disposition of an interest in real property first acquired by the UNC Hospitals through expenditure of moneys received as a grant from a State agency or General Fund appropriations.

(b) Fund Management. – The Board of the System is responsible for the custody and management of the funds of the UNC Hospitals. The Board shall adopt uniform policies and procedures applicable to the deposit, investment, and administration of these funds, which shall assure that the receipt and expenditure of such funds is properly authorized and that the funds are appropriately accounted for. The Board may delegate authority, through the Chief Executive Officer, to the President of the UNC Hospitals, when such delegation is necessary or prudent to enable the UNC Hospitals to function in a proper and expeditious manner.

(c) Fund Expenditure. – Funds under this section and investment earnings thereon are available for expenditure by the UNC Hospitals and are hereby appropriated by the General Assembly.

(d) Fund Oversight. – Funds under this section are subject to the oversight of the State Auditor pursuant to Article 5A of Chapter 147 of the General Statutes are not subject to the provisions of the State Budget Act, except for operating and capital funds appropriated from the General Fund.

(e) Fund Reporting. – The UNC Hospitals shall submit such reports or other information concerning its fund accounts under this section as may be required by the Board.

(f) Funds Supplemental. – Funds under this section, or the investment income therefrom, shall not take the place of State appropriations or any part thereof, but any portion of these funds available for general institutional purposes shall be used to supplement State appropriations to the end that the UNC Hospitals may improve and increase their functions, may enlarge their areas of service, and may become more useful to a greater number of people.

(g) Fund Investment. – The Board may deposit or invest the funds under this section in interest bearing accounts and other investments in the exercise of its sound discretion, without regard to any statute or rule of law relating to the investment of funds by fiduciaries.

§ 116‑350.45. Purchases.

Notwithstanding the provisions of Articles 3, 3A, and 3C of Chapter 143 of the General Statutes and G.S. 143‑341(8)(i) of the General Statutes, the Board shall establish policies and regulations governing the purchasing requirements of the System. These policies and regulations shall provide for requests for proposals, competitive bidding or purchasing by means other than competitive bidding, contract negotiations, and contract awards for purchasing supplies, materials, equipment, and services which are necessary and appropriate to fulfill the clinical, educational, research, and community service missions of the System.

The Board of Directors shall submit all initial policies and regulations adopted pursuant to this section to the Division of Purchase and Contract for review upon adoption by the Board. Any subsequent changes to these policies and regulations adopted by the Board shall be submitted to the Division of Purchase and Contract for review. Any comments by the Division of Purchase and Contract shall be submitted to the Chief Executive Officer and to the President of The University of North Carolina.

§ 116‑350.50. Real property.

(a) Acquisition and Disposition. – The Board shall establish policies for acquiring and disposing of any interest in real property by the System and the UNC Hospitals. These policies shall specify procedures for evaluating, negotiating, and approving the acquisition or disposition of an interest in real property by purchase, gift, lease, or rental, but not by condemnation or exercise of eminent domain. Acquisitions and dispositions of interests in real property pursuant to this section shall not be subject to statutes applicable to the acquisition or disposition of interest in real property by or on behalf of State agencies, including, without limitation, the provisions of Article 36 of Chapter 143 of the General Statutes or Chapter 146 of the General Statutes.

(b) Design and Construction. – The Board may, subject to rules and regulations generally applicable to hospital facilities in the State, adopt policies and procedures that exclusively govern the design, construction, and renovation of buildings, infrastructure, utilities, and other property developments of the System and the UNC Hospitals, including all aspects of vendor selections, contracting, negotiation, and approvals. Design and construction for the System and the UNC Hospitals shall be subject to the requirements of G.S. 44A‑26 and G.S. 133‑1.1 but shall not otherwise be subject to the provisions of statutes applicable to design and construction projects by or on behalf of State agencies.

(c) Plan Review and Code Enforcement of Certain Construction Projects. – Notwithstanding any other provision of law to the contrary, a local building code inspection department has general authority over plan review and administration, and enforcement, of all sections of the North Carolina State Building Code for construction or renovation projects undertaken by the System or its component units that are on or within privately owned real property leased by the System, or its component units, within its jurisdiction. Nothing in this subsection shall be construed to abrogate the authority of the Department of Labor under G.S. 143‑139(c) and (d).

§ 116‑350.55. Bonds and notes.

(a) Bonds and Notes. – In addition to the provisions of Article 3 of Chapter 116D of the General Statutes, the System shall be authorized to issue bonds and notes on behalf of itself or any component units or System affiliate in accordance with the provisions of Article 3 of Chapter 116D of the General Statutes, in the same manner and for the same purposes as the Board of Governors of The University of North Carolina may issue bonds and notes as provided for therein. In doing so, the System shall have the same powers conferred upon the Board of Governors by such Article and, for purposes of this section, references in such Article to the Board of Governors shall mean and be deemed to include the System.

(b) Notwithstanding subsection (a) of this section, in connection with the issuance of bonds or notes of the System in accordance with this section and Article 3 of Chapter 116D of the General Statutes, the following provisions apply:

(1) Institutions within the meaning of G.S. 116D‑22 include the System and any component unit or System affiliate.

(2) The approval of the Director of the Budget, as provided in G.S. 116D‑26, 116D‑27, 116D‑29, and 116D‑30, does not apply to bonds or notes issued by the System pursuant to this section and Article 3 of Chapter 116D of the General Statutes.

(3) The first paragraph of G.S. 116D‑26(b) does not apply to bonds or notes issued by the System pursuant to this section and Article 3 of Chapter 116D of the General Statutes.

(4) Nothing herein shall limit or restrict the right of the System to obtain a loan from a financial institution, provided that the System may not pledge real property owned by the State of North Carolina as collateral.

§ 116‑350.60. Nonprofit merger authority.

The University of North Carolina Health Care System and any domestic nonprofit corporation may merge in the manner provided in G.S. 55A‑11‑09, except that the merger need not comply with G.S. 55A‑11‑02 as required by G.S. 55A‑11‑09(b)(3). For the purposes of this section, the University of North Carolina Health Care System is deemed an unincorporated business entity as defined in G.S. 55A‑11‑09(a) and the University of North Carolina Health Care System or the University of North Carolina Hospitals is the surviving business entity of any merger effected pursuant to this section. For any plan of merger pursuant to this section, along with the applicable items set forth in the articles of merger under G.S. 55A‑11‑09(d), the University of North Carolina Health Care System shall set forth reference to this section. G.S. 55A‑11‑09(e1) does not apply to a merger under this section.

§ 116‑350.65. Public records.

The following records of the System are not public records under Chapter 132 of the General Statutes:

(1) Records related to patient care and patient services, including, but not limited to, patient records, vendor contracts, quality initiatives, quality measures, and reports related to quality requirements; provided, however, that any contracts with other State agencies or documents publicly reported to government regulatory or oversight bodies shall be considered public records.

(2) Records related to strategic planning or initiatives, including potential affiliations and new services or businesses.

(3) Consultations with the Joint Legislative Commission on Governmental Operations as provided by law.

Part 2. Liability Insurance or Self‑Insurance.

§ 116‑350.100. Authorization to secure insurance or provide self‑insurance.

The Board is authorized through the purchase of contracts of insurance or the creation of self‑insurance trusts, or through combination of such insurance and self‑insurance, to provide the System, UNC Hospitals, System affiliates, and individual health care practitioners with coverage against claims of personal or entity liability based on conduct within the course and scope of health care functions undertaken by such entities or individuals as employees, agents, or officers of (i) the System, (ii) the University of North Carolina Hospitals at Chapel Hill, or (iii) any health care institution, agency, or entity which has an affiliation agreement with the System or with the University of North Carolina Hospitals at Chapel Hill. The types of health care practitioners to which the provisions of this Part may apply include, but are not limited to, medical doctors, dentists, nurses, residents, interns, medical technologists, nurses' aides, and orderlies. Subject to all requirements and limitations of this Article, the coverage to be provided, through insurance or self‑insurance or combination thereof, may include provision for the payment of expenses of litigation, the payment of civil judgments in courts of competent jurisdiction, and the payment of settlement amounts, in actions, suits, or claims to which this Part applies.

§ 116‑350.105. Establishment and administration of self‑insurance trust funds; rules and regulations; defense of actions against covered persons; application of G.S. 143‑300.6.

(a) In the event the Board elects to act as self‑insurer of a program of liability insurance, it may establish one or more insurance trust accounts to be used only for the purposes authorized by this Article; provided, however, said program of liability insurance shall not be subject to regulation by the Commissioner of Insurance. The Board is authorized to receive and accept any gift, donation, appropriation, or transfer of funds made for the purposes of this section and to deposit such funds in the insurance trust accounts. All expenses incurred in collecting, receiving, and maintaining such funds and in otherwise administering the self‑insured program of liability insurance shall be paid from such insurance trust accounts.

(b) Subject to all requirements and limitations of this Article, the Board is authorized to adopt rules for the establishment and administration of the self‑insured program of liability insurance, including, but not limited to, rules and regulations concerning the eligibility for and terms and conditions of participation in the program, the assessment of charges against participants, the management of the insurance trust accounts, and the negotiation, settlement, litigation, and payment of claims.

(c) The Board is authorized to create a UNC Health Liability Insurance Trust Fund Council composed of not more than 13 members; one member each shall be appointed by the State Attorney General, the State Insurance Commissioner, the Director of the Office of State Budget and Management, and the State Treasurer; the remaining members shall be appointed by the Board. Subject to all requirements and limitations of this Article and to any rules and regulations adopted by the Board under the terms of subsection (b) of this section, the Board may delegate to the UNC Health Liability Insurance Trust Fund Council responsibility and authority for the administration of the self‑insured liability insurance program and of the insurance trust accounts established pursuant to such program.

(d) Defense of all suits or actions against an individual health care practitioner who is covered by a self‑insured program of liability insurance established by the Board under the provisions of this Article may be provided by the Attorney General in accordance with the provisions of G.S. 143‑300.3 of Article 31A of Chapter 143; provided, that in the event it should be determined pursuant to G.S. 143‑300.4 that defense of such a claim should not be provided by the State, or if it should be determined pursuant to G.S. 143‑300.5 and G.S. 147‑17 that counsel other than the Attorney General should be employed or, if the individual health care practitioner is not an employee of the State as defined in G.S. 143‑300.2, then private legal counsel may be employed by the UNC Health Liability Insurance Trust Fund Council and paid for from funds in the insurance trust accounts.

(e) For purposes of the requirements of G.S. 143‑300.6, the coverage provided State employees by any self‑insured program of liability insurance established by the Board pursuant to the provisions of this Article shall be deemed to be commercial liability insurance coverage within the meaning of G.S. 143‑300.6(c).

(f) By rules adopted by the Board in accordance with subsection (b) of this section, the Board may provide that funds maintained in insurance trust accounts under such a self‑insured program of liability insurance may be used to pay any expenses, including damages ordered to be paid, which may be incurred by the System or the University of North Carolina Hospitals at Chapel Hill with respect to any claim, based on alleged negligent acts in the provision of health care services, which may be prosecuted under the provisions of Article 31 of Chapter 143 of the General Statutes.

§ 116‑350.110. Funding of self‑insurance program.

(a) If the Board elects to establish a self‑insurance trust fund, the initial contribution to the fund shall be determined by an independent actuary but shall be no less than three hundred thousand dollars ($300,000). Annual contributions to said fund shall be made in an amount to be determined each year by the UNC Health Liability Insurance Trust Fund Council upon the advice of an independent actuary and shall include amounts necessary to pay all costs of administration of the self‑insurance program and claims adjustment, including litigation in addition to amounts necessary to pay claims. Contributions shall be no less than one hundred fifty percent (150%) of the amounts actually paid each year on medical malpractice claims until such time as the UNC Health Liability Insurance Trust Fund Council, with the advice of an independent actuary and the approval of the Board, determines that an annual contribution in a lesser amount will not impair the adequacy of the fund to satisfy existing and potential health care malpractice claims for a period of one year.

(b) Claims certified to be paid from the fund shall be paid in the order of award or settlement. In the event that the fund created hereunder shall at any time have insufficient funds to assure that both existing and future claims will be paid, the Board is hereby authorized to borrow necessary amounts up to thirty million dollars ($30,000,000) per established self‑insurance trust fund account to replenish the fund. The Board shall maintain funds in each self‑insurance trust at no less than one hundred thousand dollars ($100,000) at all times.

(c) Funds borrowed by the Board to replenish the trust fund account may be secured by pledging noncapital assets of the members. Members shall mean those entities, agencies, departments, or divisions of the System which directly contribute funds to the self‑insurance trust. In no event shall individual health care providers be deemed members for the purposes of this section.

(d) Obligations issued under the provisions of this Part shall not be deemed to constitute a debt, liability, or obligation of the State or of any political subdivision thereof or a pledge of the faith and credit of the State or of any such political subdivision but shall be payable solely from the revenues or assets of the members. Each obligation issued under this Part shall contain on the face thereof a statement to the effect that the System shall not be obligated to pay the same nor the interest thereon except from the revenues or assets pledged therefor and that neither the faith and credit nor the taxing power of the State or of any political subdivision thereof is pledged to the payment of the principal of or the interest on such obligation.

§ 116‑350.115. Termination of fund.

Any fund created hereunder may be terminated by the Board upon their determination that other satisfactory and adequate arrangements have been made to assure that both existing and future health care malpractice claims or judgments against the participants in the self‑insurance program will be paid and satisfied. Upon the termination of any fund pursuant to this section, the full amount remaining in such fund upon termination less any outstanding indebtedness shall promptly be repaid to the System and allocated among the participating entities according to their respective contributions as determined by the Board.

§ 116‑350.120. Sovereign immunity.

Nothing in this Article shall be deemed to waive the sovereign immunity of the State.

§ 116‑350.125. Confidentiality of records.

Records pertaining to the liability insurance program, including all information, correspondence, investigations, or interviews concerning or pertaining to claims or potential claims against participants in the self‑insurance program or to the program or applications for participation in the program shall not be considered public records under Chapter 132 of the General Statutes and shall not be subject to discovery under the Rules of Civil Procedure, Chapter 1A of the General Statutes.

§ 116‑350.130. Further action.

The Board is hereby authorized to take all action necessary to effectuate the purposes and provisions of this Part.

§ 116‑350.135. Appropriation.

The funds described by this Part are appropriated and shall be used only as provided by this Part.

§§ 116‑350.136 to 116‑359. Reserved for future codification purposes.

Article 39.

East Carolina University Health Care Operations.

§ 116‑360.5. Definitions.

The following definitions apply in this Article:

(1) Board of Trustees. – The Board of Trustees of East Carolina University.

(2) Career State employee status. – As defined in G.S. 126‑1.1.

(3) Chancellor. – The Chancellor of East Carolina University.

(4) ECU Dental School Clinical Operations. – A division of the School of Dental Medicine at East Carolina University that operates clinical programs and facilities in Greenville, North Carolina, and across the State for the purpose of providing medical care to the general public and training dentists and other health care professionals.

(5) Medical Faculty Practice Plan. – A division of the School of Medicine of East Carolina University that operates clinical programs and facilities for the purpose of providing medical care to the general public and training physicians and other health care professionals.

(6) President. – The President of The University of North Carolina.

(7) School of Medicine. – The Brody School of Medicine of East Carolina University.

§ 116‑360.10. East Carolina University School of Medicine; establishment; mission.

(a) Establishment. – The Board of Trustees of East Carolina University is hereby authorized to establish a school of medicine at East Carolina University, Greenville, North Carolina. The school of medicine shall meet all requirements and regulations of the Council on Medical Education and Hospitals of the American Medical Association, the Association of American Medical Colleges, and other such accrediting agencies whose approval is normally required for the establishment and operation of a two‑year medical school.

(b) Mission. – The School of Medicine shall provide instruction and training leading to a medical degree, advanced and doctoral degrees in biomedical sciences and related fields, and other credentials; facilitate the education of physicians and other health care providers in partnership with schools and colleges within East Carolina University, The University of North Carolina System, and its affiliated enterprises; provide patient care and facilitate the financial sustainability of East Carolina University's School of Medicine and health sciences programs through clinical collaboration with and joint operation of health care facilities with one or more hospitals or health systems; engage in research and render other services designed to promote the health and well‑being of the citizens of North Carolina, with particular focus on rural areas of the State; and drive innovation and transformation in health care services delivery, with particular focus on rural health care services delivery.

§ 116‑360.15. Personnel and operations.

(a) Employment Authority. – East Carolina University School of Medicine may employ a workforce to conduct its operations of the Medical Faculty Practice Plan and the ECU Dental School Clinical Operations. Employees who are employed directly by Medical Faculty Practice Plan and the ECU Dental School Clinical Operations, and not by an affiliated hospital or health system, are State employees whose terms and conditions of employment, including benefit plans and programs, are determined by the Chancellor, subject to the direction of the President. Only Articles 5, 6, 7, and 14 of Chapter 126 of the General Statutes, the State Human Resources Act, apply to these State employees. Subject to the approval of the President, the Chancellor may authorize East Carolina University to employ the faculty and staff of the School of Medicine and other health affairs schools and components of East Carolina University, subject to the provisions of this section. All employees who are faculty members shall remain subject to the faculty policies of East Carolina University, as established or adopted pursuant to delegation from the Board of Governors of The University of North Carolina. A State employee employed by East Carolina University as part of the Medical Faculty Practice Plan or ECU Dental School Clinical Operations prior to January 1, 2024, has the right to (i) continued State employment if the employee remains in the employee's current role or position, unless terminated in accordance with the terms of employment that existed immediately prior to January 1, 2024, subject to all relevant provisions of State and federal law and (ii) continued participation in the State Teachers' and State Employees' Retirement System if the employee was enrolled in the Retirement System immediately prior to January 1, 2024, and maintains State employee status.

(b) Certain Career State Employees. – Notwithstanding subsection (a) of this section, all of the following applies:

(1) For employees of the Medical Faculty Practice Plan. – The compensation of a State employee who achieved career State employee status by October 31, 1998, shall not be reduced as a result of this section and that employee shall (i) remain subject to the rules regarding discipline or discharge that were effective on October 31, 1998, and (ii) not be subject to the rules regarding discipline or discharge adopted after that date.

(2) For employees of the ECU Dental School Clinical Operations. – The compensation of a State employee who achieved career State employee status by June 30, 2022, shall not be reduced as a result of this section and that employee shall (i) remain subject to the rules regarding discipline or discharge that were effective on June 30, 2022, and (ii) not be subject to the rules regarding discipline or discharge adopted after that date.

(c) Subject to the direction of the President and so long as it is to the benefit of the School of Medicine, East Carolina University, or The University of North Carolina System, the Chancellor may take any of the following actions:

(1) Enter into partnerships, affiliations, joint operating agreements, and other arrangements with hospitals, health systems, and other health care partners on behalf of the School of Medicine or East Carolina University.

(2) Assign employees to assist with the establishment and operation of any partnerships, affiliations, joint operating agreements, and other arrangements entered into pursuant to this subsection.

(3) Make available office space, equipment, supplies, and other related resources as part of any partnerships, affiliations, joint operating agreements, and other arrangements entered into pursuant to this subsection.

§ 116‑360.20. Finances.

(a) Budgeting. – The School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations, shall not be subject to the provisions of the State Budget Act, except for General Fund appropriations, or otherwise subject to the authority, oversight, or control of the Office of the State Controller. The School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations shall be subject to the authority and oversight of the Office of the State Auditor. The Chancellor, subject to the direction of the President, shall be responsible for all aspects of budget preparation, budget execution, and expenditure reporting for the School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations. Except for General Fund appropriations, all receipts for the Medical Faculty Practice Plan and ECU Dental School Clinical Operations may be invested pursuant to G.S. 116‑36.1. General Fund appropriations for support of the Medical Faculty Practice Plan shall be budgeted in a General Fund code under a single purpose, Contributions to Medical Faculty Practice Plan at East Carolina University, and be transferable to a special fund operating code as receipts. All revenues generated from operations, appropriations, or funds of the Medical Faculty Practice Plan shall exclusively be used in furtherance of the missions and goals of the Medical Faculty Practice Plan and School of Medicine as determined or approved by the Chancellor.

(b) Medicare Receipts. – The East Carolina University School of Medicine shall request, on a regular basis consistent with the State's cash management plan, funds earned by the School from Medicare reimbursements for education costs. Upon receipt, these funds are appropriated and shall be allocated as follows:

(1) The portion of the Medicare reimbursement generated through the effort and expense of the School of Medicine's Medical Faculty Practice Plan shall be transferred to the appropriate Medical Faculty Practice Plan account within the School of Medicine. The Medical Faculty Practice Plan shall assume responsibility for any of these funds that subsequently must be refunded due to final audit settlements.

(2) Funds that were received pursuant to this section prior to July 1, 2005, and that were transferred to a special fund account on deposit with the State Treasurer are appropriated to the Brody School of Medicine at East Carolina University and may be expended by the Brody School of Medicine for the family medicine center and for purposes consistent with its stated mission.

§ 116‑360.25. Purchases.

Notwithstanding the provisions of Articles 3, 3A, and 3C of Chapter 143 of the General Statutes to the contrary, the Chancellor shall establish policies and regulations governing the purchasing requirements of the School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations. These policies and regulations shall provide for requests for proposals, competitive bidding, or purchasing by means other than competitive bidding, contract negotiations, and contract awards for purchasing supplies, materials, equipment, and services which are necessary and appropriate to fulfill the clinical and educational missions of the School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations. Pursuant to such policies and regulations, purchases for the School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations shall be effected by East Carolina University.

The Chancellor shall submit all initial policies and regulations adopted under this section to the Division of Purchase and Contract for review upon adoption by the Chancellor. Any subsequent changes to these policies and regulations adopted by the Chancellor shall be submitted to the Division of Purchase and Contract for review. Any comments by the Division of Purchase and Contract shall be submitted to the Chancellor of East Carolina University and to the President of The University of North Carolina.

§ 116‑360.30. Public records.

The following records of East Carolina University School of Medicine and ECU Dental School Clinical Operations are not public records under Chapter 132 of the General Statutes:

(1) Records related to research, patient care, and patient services, including, but not limited to, patient records, vendor contracts, quality initiatives, quality measures, and reports related to quality requirements; provided, however, that any contracts with other State agencies or documents publicly reported to government regulatory or oversight bodies shall be considered public records.

(2) Records related to strategic planning or initiatives, including potential affiliations and new services or businesses.

(3) Consultations with the Joint Legislative Commission on Governmental Operations as provided by law.

§ 116‑360.35. Real property.

(a) Acquisition and Disposition. – The Chancellor of East Carolina University shall establish rules and regulations for acquiring or disposing of any interest in real property for the use of the School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations. These rules and regulations shall include provisions for development of specifications, advertisement, and negotiations with owners for acquisition of an interest in real property by purchase, gift, lease, or rental, but not by condemnation or exercise of eminent domain, on behalf of the School of Medicine, the Medical Faculty Practice Plan, and ECU Dental School Clinical Operations. Acquisitions and dispositions of interests in real property pursuant to this section shall not be subject to State laws applicable to the acquisition or disposition of interest in real property by or on behalf of State agencies, including, without limitation, the provisions of Article 36 of Chapter 143 of the General Statutes or the provisions of Chapter 146 of the General Statutes.

(b) Design and Construction. – The Chancellor may, subject to rules and regulations generally applicable to educational facilities and health care facilities in the State, adopt policies and procedures that shall exclusively govern the design, construction, and renovation of buildings, infrastructure, utilities, and other property developments of the School of Medicine, including all aspects of vendor selections, contracting, negotiation, and approvals. Design and construction for the School of Medicine are subject to the requirements of G.S. 44A‑26 and G.S. 133‑1.1 but are otherwise exempt from other State laws applicable to design and construction projects by or on behalf of State agencies.

(c) Plan Review and Code Enforcement of Certain Construction Projects. – Notwithstanding any other provision of law to the contrary, a local building code inspection department has general authority over plan review, administration, and enforcement of all sections of the North Carolina State Building Code with respect to construction or renovation projects undertaken by the School of Medicine, the Medical Faculty Practice Plan, or ECU Dental Clinical Operations that are on or within privately owned real property leased by the School of Medicine, the Medical Faculty Practice Plan, or ECU Dental Clinical Operations within the jurisdiction of the local building code inspection department. Nothing in this subsection shall be construed to abrogate the authority of the Department of Labor under subsections (c) and (d) of G.S. 143‑139.

conforming and other changes

SECTION 4.10.(c) G.S. 66‑58 reads as rewritten:

§ 66‑58. Sale of merchandise or services by governmental units.

(a) Except as ~~may be~~ provided in this section, it ~~shall be~~ is unlawful for any unit, ~~department~~ department, or agency of the State government, or any division or subdivision of the unit, ~~department~~ department, or agency, or any individual employee or employees of the unit, ~~department~~ department, or agency in his, or her, or their capacity as employee or employees ~~thereof,~~ thereof to engage directly or indirectly in the sale of goods, ~~wares~~ wares, or merchandise in competition with citizens of the State, or to engage in the operation of restaurants, cafeterias or other eating places in any building owned by or leased in the name of the State, or to maintain service establishments for the rendering of services to the public ordinarily and customarily rendered by private enterprises, or to provide transportation services, or to contract with any person, ~~firm~~ firm, or corporation for the operation or rendering of the businesses or services on behalf of the unit, ~~department~~ department, or agency, or to purchase for or sell to any person, ~~firm~~ firm, or corporation any article of merchandise in competition with private enterprise. The leasing or subleasing of space in any building owned, ~~leased~~ leased, or operated by any unit, ~~department or agency or division or subdivision thereof~~ department, agency, division, or subdivision of the State for the purpose of operating or rendering of any of the businesses or services ~~herein~~ referred to in this section is ~~hereby~~ prohibited.

(b) ~~The provisions of subsection~~ Subsection (a) of this section ~~shall~~ does not apply ~~to:~~to any of the following:

…

(8) The University of North Carolina with regard ~~to:~~to all of the following:

…

e. The hospital and Medical School of the University of North Carolina.

e1. The University of North Carolina Health Care System.

….

SECTION 4.10.(d) G.S. 116‑30.3A reads as rewritten:

§ 116‑30.3A. Availability of excess receipts.

Notwithstanding the provisions of Chapter 143C of the General Statutes, receipts within The University of North Carolina realized in excess of budgeted levels shall be available, up to a maximum of ten percent (10%) above budgeted levels, for each Budget Code, in addition to appropriations to support the operations generating the receipts as approved by the Director of the Budget. Notwithstanding the provisions of Chapter 143C of the General Statutes, receipts within The University of North Carolina Health Care System realized in excess of budgeted levels shall be available above budgeted levels, for each Budget Code, in addition to appropriations to support the operations generating the receipts as approved by the Director of the Budget.

SECTION 4.10.(e) G.S. 116‑219 reads as rewritten:

§ 116‑219. Authorization to secure insurance or provide self‑insurance.

The Board of Governors of the University of North Carolina (hereinafter referred to as the Board) is authorized through the purchase of contracts of insurance or the creation of self‑insurance trusts, or through combination of such insurance and self‑insurance, to provide individual health‑care practitioners with coverage against claims of personal tort liability based on conduct within the course and scope of health‑care functions undertaken by such individuals as employees, agents, or officers of (i) the University of North Carolina, (ii) any constituent institution of the University of North Carolina, ~~(iii) the University of North Carolina Hospitals at Chapel Hill,~~ or ~~(iv)~~ (iii) any health‑care institution, agency or entity which has an affiliation agreement with the University of North ~~Carolina,~~ Carolina or with a constituent institution of the University of North ~~Carolina, or with the University of North Carolina Hospitals at Chapel Hill.~~ Carolina. The types of health‑care practitioners to which the provisions of this Article may apply include, but are not limited to, medical doctors, dentists, nurses, residents, interns, medical technologists, nurses' aides, and orderlies. Subject to all requirements and limitations of this Article, the coverage to be provided, through insurance or self‑insurance or combination thereof, may include provision for the payment of expenses of litigation, the payment of civil judgments in courts of competent jurisdiction, and the payment of settlement amounts, in actions, suits or claims to which this Article applies.

SECTION 4.10.(f) G.S. 116‑220(f) reads as rewritten:

(f) By rules or regulations adopted by the Board in accordance with G.S. 116‑220(b) of this Article, the Board may provide that funds maintained in insurance trust accounts under such a self‑insured program of liability insurance may be used to pay any expenses, including damages ordered to be paid, which may be incurred by the University of North ~~Carolina,~~ Carolina or a constituent institution of the University of North ~~Carolina, or the University of North Carolina Hospitals at Chapel Hill~~ Carolina with respect to any tort claim, based on alleged negligent acts in the provision of health‑care services, which may be prosecuted under the provisions of Article 31 of Chapter 143 of the General Statutes.

SECTION 4.10.(g) G.S. 116D‑1(11) reads as rewritten:

(11) University. – The University of North Carolina and its constituent and affiliated institutions, including, without limitation, the University of North Carolina Center for Public Television, ~~the University of North Carolina Health Care System,~~ the North Carolina School of Science and Mathematics, and the North Carolina Arboretum.

SECTION 4.10.(h) G.S. 116D‑22(2) reads as rewritten:

(2) Institution. – Each of the institutions enumerated in G.S. 116‑2, and any affiliated institutions of the University, including, without limitation, the University of North Carolina Center for Public Television, ~~the University of North Carolina Health Care System,~~ the North Carolina School of Science and Mathematics, and the North Carolina Arboretum.

SECTION 4.10.(i) G.S. 126‑5(c8) reads as rewritten:

(c8) Except as to Articles 5, 6, 7, and 14 of this Chapter, this Chapter does not apply to any of the following:

(1) Employees of the University of North Carolina Health Care System.

(2) Employees of the University of North Carolina Hospitals at Chapel ~~Hill, as may be provided pursuant to G.S. 116‑37(a)(4).~~Hill.

(3) Employees of the clinical patient care programs of the School of Medicine of the University of North Carolina at Chapel ~~Hill as may be provided pursuant to G.S. 116‑37(a)(4).~~Hill.

….

SECTION 4.10.(j) G.S. 131E‑13 is amended by adding a new subsection to read:

(i) This section does not apply to a transaction that is part of an agreement between a municipality or hospital authority and the University of North Carolina Health Care System for the lease, sale, or conveyance of a hospital facility, or part of a hospital facility, to the University of North Carolina Health Care System.

SECTION 4.10.(k) G.S. 135‑1(10) reads as rewritten:

(10) Employee shall mean all full‑time employees, agents or officers of the State of North Carolina or any of its departments, bureaus and institutions other than educational, whether such employees are elected, appointed or employed: Provided that the term employee shall not include employees of the University of North Carolina Health Care System who are not eligible for participation under G.S. 135‑5.6, employees of the East Carolina University School of Medicine or Dental School of Medicine who are not eligible for participation under G.S. 135‑5.7, any person who is a member of the Consolidated Judicial Retirement System, any member of the General Assembly or any part‑time or temporary employee. Notwithstanding any other provision of law, employee shall include all employees of the General Assembly except participants in the Legislative Intern Program, pages, and beneficiaries in receipt of a monthly retirement allowance under this Chapter who are reemployed on a temporary basis. Employee also includes any participant whose employment is interrupted by reason of service in the Uniformed Services, as that term is defined in section 4303(16) of the Uniformed Services Employment and Reemployment Rights Act, Public Law 103‑353, if that participant was an employee at the time of the interruption; if the participant does not return immediately after that service to employment with a covered employer in this System, then the participant shall be deemed in service until the date on which the participant was first eligible to be separated or released from his or her involuntary military service. In all cases of doubt, the Board of Trustees shall determine whether any person is an employee as defined in this Chapter. Employee shall also mean every full‑time civilian employee of the North Carolina National Guard who is employed pursuant to section 709 of Title 32 of the United States Code and paid from federal appropriated funds, but held by the federal authorities not to be a federal employee: Provided, however, that the authority or agency paying the salaries of such employees shall deduct or cause to be deducted from each employee's salary the employee's contribution in accordance with applicable provisions of G.S. 135‑8 and remit the same, either directly or indirectly, to the Retirement System; coverage of employees described in this sentence shall commence upon the first day of the calendar year or fiscal year, whichever is earlier, next following the date of execution of an agreement between the Secretary of Defense of the United States and the Adjutant General of the State acting for the Governor in behalf of the State, but no credit shall be allowed pursuant to this sentence for any service previously rendered in the above‑described capacity as a civilian employee of the North Carolina National Guard: Provided, further, that the Adjutant General, in the Adjutant General's discretion, may terminate the Retirement System coverage of the above‑described North Carolina National Guard employees if a federal retirement system is established for such employees and the Adjutant General elects to secure coverage of such employees under such federal retirement system. Any full‑time civilian employee of the North Carolina National Guard described above who is now or hereafter may become a member of the Retirement System may secure Retirement System credit for such service as a North Carolina National Guard civilian employee for the period preceding the time when such employees became eligible for Retirement System coverage by paying to the Retirement System an amount equal to that which would have constituted employee contributions if the employee had been a member during the years of ineligibility, plus interest. Employees of State agencies, departments, institutions, boards, and commissions who are employed in permanent job positions on a recurring basis must work at least 30 hours per week for nine or more months per calendar year in order to be covered by the provisions of this subdivision. On and after August 1, 2001, a person who is a nonimmigrant alien and who otherwise meets the requirements of this subdivision shall not be excluded from the definition of employee solely because the person holds a temporary or time‑limited visa.

SECTION 4.10.(l) G.S. 135‑1(11) reads as rewritten:

(11) Employer shall mean the State of North Carolina, the county board of education, the city board of education, the State Board of Education, the board of trustees of the University of North Carolina, the University of North Carolina Health Care System, the board of trustees of other institutions and agencies supported and under the control of the State, or any other agency of and within the State by which a teacher or other employee is paid. For purposes of reporting under the pronouncements by the Governmental Accounting Standards Board, the Retirement System is a multi‑employer plan.

SECTION 4.10.(m) G.S. 135‑3(8)f. is recodified as G.S. 135‑3(d).

SECTION 4.10.(n) G.S. 135‑3, as amended by subsection (m) of this section, reads as rewritten:

§ 135‑3. Membership.

(a) The membership of this Retirement System shall be composed as follows:

…

~~(8a)~~(b) Notwithstanding the provisions of ~~paragraphs c and d~~ sub‑subdivsions c. and d. of subdivision (8) of this section to the contrary, a beneficiary who was a beneficiary retired on an early or service retirement with the Law Enforcement Officers' Retirement System at the time of the transfer of law enforcement officers employed by the State and beneficiaries last employed by the State to this Retirement System on January 1, 1985, and who also was a contributing member of this Retirement System on January 1, 1985, shall continue to be paid his or her retirement allowance without restriction and may continue as a member of this Retirement System with all the rights and privileges appendant to membership.

~~(9)~~(c) Members who are participating in an intergovernmental exchange of personnel under the provisions of Article 10 of Chapter 126 may retain their membership status and receive all benefits provided by this Chapter during the period of the exchange provided the requirements of Article 10 of Chapter 126 are met; provided further, that a member participating in an intergovernmental exchange of personnel under Article 10 of Chapter 126 shall, notwithstanding whether he the member and ~~his~~ the member's employer are making contributions to the member's account during the exchange period, be entitled to the death benefit if he the member otherwise qualifies under the provisions of this Article and provided further that no duplicate benefits shall be paid.

(d) ~~Should~~ If a beneficiary who retired on an early or service retirement allowance under this Chapter be is reemployed by, or otherwise engaged to perform services for, an employer participating in the Retirement System on a part‑time, temporary, interim, or on a fee for service basis, whether contractual or otherwise at any time during the six months immediately following the effective date of retirement, then the option of the ~~two listed below~~ following subdivisions that has the lesser financial impact on the member, as determined by the Retirement System, shall be applied:

1.(1) The member's retirement ~~shall be~~ is deemed effective the month after the last month the member performed services for a participating employer, and the member shall repay all retirement benefits paid up to the deemed effective date, provided the member thereafter has satisfied the six‑month separation required by G.S. 135‑1(20).

2.(2) The member shall make a lump‑sum payment to the Retirement System equal to three times the amount of compensation earned during the six months immediately following the effective date of retirement.

(e) Notwithstanding any other provision of this Article to the contrary, if a member who retires on an early or service retirement as an employee of the University of North Carolina Health Care System or the East Carolina University School of Medicine or School of Dental Medicine is subsequently employed by a non‑State entity affiliated with the University of North Carolina Health Care System or East Carolina University School of Medicine, then that member shall continue to be paid the member's retirement allowance without restriction. For the purposes of this subsection, non‑State entity means an entity that does not satisfy the requirements of being an employer pursuant to G.S. 135‑1(11).

SECTION 4.10.(o) G.S. 135‑5.1 reads as rewritten:

§ 135‑5.1. Optional retirement program for The University of North Carolina.

(a) An Optional Retirement Program provided for in this section is authorized and established and shall be implemented by the Board of Governors of The University of North Carolina. The Optional Retirement Program shall be underwritten by the purchase of annuity contracts, which may be both fixed and variable contracts or a combination thereof, or financed through the establishment of a trust, for the benefit of participants in the Program. Participation shall be limited to (i) University personnel who are eligible for membership in the Teachers' and State Employees' Retirement Program or (ii) individuals eligible under G.S. 135‑5.6 or G.S. 135‑5.7, and ~~who are:~~who, in either case, also meet any of the following criteria:

(1) Administrators and faculty of The University of North Carolina with the rank of instructor or ~~above;~~above.

(2) The President and employees of The University of North Carolina who are appointed by the Board of Governors on recommendation of the President pursuant to G.S. 116‑11(4), 116‑11(5), and 116‑14 or who are appointed by the Board of Trustees of a constituent institution of The University of North Carolina upon the recommendation of the Chancellor pursuant to ~~G.S. 116‑40.22(b);~~G.S. 116‑40.22(b).

(3) Nonfaculty instructional and research staff who are exempt from the North Carolina Human Resources Act, as defined by the provisions of G.S. 126‑5(c1)(8), and the faculty of the North Carolina School of Science and ~~Mathematics; and~~Mathematics.

(4) Field faculty of the Cooperative Agriculture Extension Service, and tenure track faculty in North Carolina State University agriculture research programs who are exempt from the North Carolina Human Resources Act and who are eligible for membership in the Teachers' and State Employees' Retirement System pursuant to G.S. 135‑3(1), who in any of the cases described in this subsection (i) had been members of the Optional Retirement Program under the provisions of Chapter 338, Session Laws of 1971, immediately prior to July 1, 1985, or (ii) have sought membership as required in subsection (b), below. Under the Optional Retirement Program, the State and the participant shall contribute, to the extent authorized or required, toward the purchase of such contracts or deposited in such trust on the participant's behalf.

(5) ~~Employees~~ To the extent allowed under G.S. 135‑5.6, employees of The University of North Carolina Health Care System, subject to rules for eligibility and participation as may be adopted by the Board of Governors in the Optional Retirement Program plan document.

(6) Employees hired on or after January 1, 2013.

(b) Participation in the Optional Retirement Program shall be governed as follows:

(1) Those participating in the Optional Retirement Program immediately prior to July 1, 1985, under the provisions of Chapter 338, Session Laws of 1971, are deemed automatically enrolled in the Program as established by this section.

(2) Eligible ~~employees~~ University personnel initially appointed on or after July 1, 1985, shall at the same time of entering upon eligible employment elect (i) to join the Retirement System in accordance with the provisions of law applicable thereto or (ii) to participate in the Optional Retirement Program. This election shall be in writing and filed with the Retirement System and with the employing institution and shall be effective ~~as of~~ on the date of entry into eligible service. For purposes of this provision, the Optional Retirement Program shall be permitted to file individual election forms with the Retirement System using electronic transmission.

(3) An Except as provided under G.S. 135‑5.6 and G.S. 135‑5.7, an election to participate in the Optional Retirement Program shall be irrevocable. An eligible employee failing to elect to participate in the Optional Retirement Program at the time of entry into eligible service shall automatically be enrolled as a member of the Retirement System.

…

(c) Each employing institution shall contribute on behalf of each participant in the Optional Retirement Program an amount equal to a percentage of the participant's compensation as established from time to time by the General Assembly. Each participant shall contribute the amount which he or she would be required to contribute if a member of the Retirement System. Contributions authorized or required by the provisions of this subsection on behalf of each participant shall be made, consistent with Section 414(h) of the Internal Revenue Code, by salary reduction according to rules and regulations established by The University of North Carolina. Additional personal contributions may also be made by a participant by payroll deduction or salary reduction to an annuity or retirement income plan established pursuant to G.S. 116‑17. Payment of contributions shall be made by the employing institution to the designated company or companies underwriting the annuities or the trustees for the benefit of each participant, and this employer contribution shall not be subject to any State tax if made under the Optional Retirement Program or, otherwise, by salary reduction.

…

(g) No retirement benefit, death benefit, or other benefit under the Optional Retirement Program shall be paid by the State of North Carolina, or The University of North Carolina, the University of North Carolina Health Care System, or the Board of Trustees of the Teachers' and State Employees' Retirement System with respect to any employee selecting and participating in the Optional Retirement Program or with respect to any beneficiary of that employee. Benefits shall be payable to participants or their beneficiaries only by the designated company in accordance with the terms of the contracts or trust agreement.

(h) The Board of Governors of The University of North Carolina shall ensure that the Optional Retirement Program contains benefit forfeiture provisions equivalent to those contained in G.S. 135‑18.10A for University personnel who are eligible for membership in the Teachers' and State Employees' Retirement System and have elected participation in the Optional Retirement Program. Any funds forfeited shall be deposited in the Optional Retirement Program trust fund(s).

SECTION 4.10.(p) Article 1 of Chapter 135 of the General Statutes is amended by adding the following new sections to read:

§ 135‑5.6. Employees of the University of North Carolina Health Care System.

(a) All employees of the University of North Carolina Health Care System who are (i) employed before January 1, 2024, and (ii) are members of either the Retirement System or the Optional Retirement Program before January 1, 2024, shall retain membership in that Retirement System or that Optional Retirement Program unless the member makes a one‑time, irrevocable election to cease membership in the Retirement System or the Optional Retirement Program in favor of a similar benefit offered by the University of North Carolina Health Care System pursuant to G.S. 116‑350.30.

(b) Employees of the University of North Carolina Health Care System who are hired on or after January 1, 2024, shall not be eligible for membership in the Retirement System. The University of North Carolina Health Care System shall offer employees of the System who are hired on or after January 1, 2024, any of the following benefits:

(1) Membership in the Optional Retirement System.

(2) Enrollment in a similar benefit to the Optional Retirement System pursuant to G.S. 116‑350.30.

(3) A choice between the options provided in subdivision (1) and subdivision (2) of this subsection.

(c) If any individual ceases to be employed by the University of North Carolina Health Care System on or after January 1, 2024, and is later rehired by the University of North Carolina Health Care System, then that individual shall be treated as an employee newly hired on or after January 1, 2024, for the purposes of this section.

(d) The University of North Carolina Health Care System shall continue to report the payroll of employees employed as of December 31, 2023, and shall continue to remit the employee and employer contributions for all employees retaining membership in the Retirement System or the Optional Retirement Program until none exist.

§ 135‑5.7. Certain employees of East Carolina University.

(a) As used in this section, the terms Medical Faculty Practice Plan and ECU Dental School Clinical Operations have the same meaning as in G.S. 116‑360.5.

(b) All employees of the Medical Faculty Practice Plan and the ECU Dental School Clinical Operations who are (i) employed before January 1, 2024, and (ii) are members of either the Retirement System or the Optional Retirement Program before January 1, 2024, shall retain membership in that Retirement System or that Optional Retirement Program unless the member makes a one‑time, irrevocable election to cease membership in the Retirement System or the Optional Retirement Program in favor of a similar benefit offered by the East Carolina University School of Medicine, the Medical Faculty Practice Plan, or the ECU Dental School Clinical Operations pursuant to G.S. 116‑360.15.

(c) Employees of the Medical Faculty Practice Plan or the ECU Dental School Clinical Operations hired on or after January 1, 2024, shall not be eligible for membership in the Retirement System. East Carolina University shall offer employees of the Medical Faculty Practice Plan and employees of the ECU Dental School Clinical Operations who are hired on or after January 1, 2024, any of the following benefits:

(1) Membership in the Optional Retirement System.

(2) Enrollment in a similar benefit to the Optional Retirement System pursuant to G.S. 116‑360.15.

(3) A choice between the options provided in subdivision (1) and subdivision (2) of this subsection.

(d) If any individual ceases to be employed by the Medical Faculty Practice Plan or the ECU Dental School Clinical Operations on or after January 1, 2024, and is later rehired by the Medical Faculty Practice Plan or the ECU Dental School Clinical Operations, then that individual shall be treated as an employee newly hired on or after January 1, 2024, for the purposes of this section.

(e) East Carolina University School of Medicine shall continue to report the payroll of employees employed as of December 31, 2023, and shall continue to remit the employee and employer contributions for all employees retaining membership in the Retirement System or the Optional Retirement Program until none exist.

SECTION 4.10.(q) G.S. 135‑48.1(11) reads as rewritten:

(11) Employing Unit. – A North Carolina School System; Community College; State Department, Agency, or Institution; the University of North Carolina Health Care System; Administrative Office of the Courts; or Association or Examining Board whose employees are eligible for membership in a State‑Supported Retirement System. An employing unit also shall mean (i) a charter school in accordance with Article 14A of Chapter 115C of the General Statutes whose board of directors elects to become a participating employer in the Plan under G.S. 135‑48.54 or (ii) a local government unit that participates in the Plan under G.S. 135‑48.47 or under any other law. Bona fide fire departments, rescue or emergency medical service squads, and National Guard units are deemed to be employing units for the purpose of providing benefits under this Article.

SECTION 4.10.(r) G.S. 135‑48.40(b) reads as rewritten:

(b) Partially Contributory Coverage. – The following persons are eligible for coverage under the Plan, on a partially contributory basis, subject to the provisions of G.S. 135‑48.43:

(1) All permanent full‑time employees of an employing unit who meet ~~either~~ any of the following conditions:

a. ~~Paid~~ The employee is paid from general or special State funds.

b. ~~Paid~~ The employee is paid from non‑State funds and in a group for which his or her employing unit has agreed to provide coverage.

Employees of State agencies, departments, institutions, boards, and commissions not otherwise covered by the Plan who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.

This subdivision shall not apply to employees enrolled in a comprehensive health benefit plan offered by East Carolina University pursuant to G.S. 116‑360.15 or the University of North Carolina Health Care System pursuant to G.S. 116‑350.30.

….

SECTION 4.10.(s) G.S. 143‑56 reads as rewritten:

§ 143‑56. Certain purchases excepted from provisions of Article.

Unless as may otherwise be ordered by the Secretary of Administration, the purchase of supplies, materials and equipment through the Secretary of Administration shall be mandatory in the following cases:

(1) Published books, manuscripts, maps, pamphlets and periodicals.

(2) Perishable articles such as fresh vegetables, fresh fish, fresh meat, eggs, and others as may be classified by the Secretary of Administration.

Purchase through the Secretary of Administration shall not be mandatory for information technology purchased in accordance with Article 15 of Chapter 143B of the General Statutes, for a purchase of supplies, materials or equipment for the General Assembly if the total expenditures is less than the expenditure benchmark established under the provisions of G.S. 143‑53.1, for group purchases made by hospitals, developmental centers, neuromedical treatment centers, and alcohol and drug abuse treatment centers through a competitive bidding purchasing program, as defined in G.S. 143‑129, by the University of North Carolina Health Care System pursuant to ~~G.S. 116‑37(h),~~ G.S. 116‑350.45, by the University of North Carolina Hospitals at Chapel Hill pursuant to ~~G.S. 116‑37(a)(4),~~ G.S. 116‑350.15(d), by the University of North Carolina at Chapel Hill on behalf of the clinical patient care programs of the School of Medicine of the University of North Carolina at Chapel Hill pursuant to ~~G.S. 116‑37(a)(4),~~ G.S. 116‑350.15(d), or by East Carolina University on behalf of the Medical Faculty Practice Plan pursuant to ~~G.S. 116‑40.6(c).~~G.S. 116‑360.25.

All purchases of the above articles made directly by the departments, institutions and agencies of the State government shall, whenever possible, be based on competitive bids. Whenever an order is placed or contract awarded for such articles by any of the departments, institutions and agencies of the State government, a copy of such order or contract shall be forwarded to the Secretary of Administration and a record of the competitive bids upon which it was based shall be retained for inspection and review.

SECTION 4.10.(t) G.S. 143‑596 reads as rewritten:

§ 143‑596. Definitions.

As used in this Article, unless the context clearly provides otherwise:

…

(1c) Medical Faculty Practice Plan. – As defined in ~~G.S. 116‑40.6.~~Article 39 of Chapter 116 of the General Statutes.

…

(8) The University of North Carolina Health Care System. – As defined in ~~G.S. 116‑37.~~Article 38 of Chapter 116 of the General Statutes.

SECTION 4.10.(u) G.S. 143C‑1‑3 reads as rewritten:

§ 143C‑1‑3. Fund types.

…

(c) Notwithstanding subsections (a) and (b) of this section, funds established for The University of North Carolina and its constituent institutions pursuant to the following statutes are exempt from Chapter 143C of the General Statutes and shall be accounted for as provided by those statutes, except that the provisions of Article 8 of Chapter 143C of the General Statutes shall apply to the funds: G.S. 116‑35, 116‑36, 116‑36.1, 116‑36.2, 116‑36.4, 116‑36.5, ~~116‑36.6,~~ 116‑44.4, 116‑68, 116‑220, 116‑235.

(d) Notwithstanding subsections (a) and (b) of this section, funds established for the University of North Carolina Health Care System pursuant to G.S. 116‑350.40 are exempt from Chapter 143C of the General Statutes and shall be accounted for as provided by those statutes.

SECTION 4.10.(v) G.S. 143C‑8‑7(a) reads as rewritten:

(a) No State agency may expend funds for the construction or renovation of any capital improvement project except as needed to comply with this Article or otherwise authorized by the General Assembly. Funds that become available by gifts, ~~excess patient receipts above those budgeted at the University of North Carolina Hospitals at Chapel Hill,~~ federal or private grants, receipts becoming a part of special funds by act of the General Assembly, or any other funds available to a State agency or institution may be utilized for advanced planning through the working drawing phase of capital improvement projects, upon approval of the Director of the Budget.

SECTION 4.10.(w) G.S. 143C‑8‑8 reads as rewritten:

§ 143C‑8‑8. When a State agency may increase the cost of a capital improvement project.

Upon the request of the administration of a State agency, the Director of the Budget may, when in the Director's opinion it is in the best interest of the State to do so, increase the cost of a capital improvement project. Provided, however, that if the Director of the Budget increases the cost of a project, the Director shall report that action to the Joint Legislative Commission on Governmental Operations at its next meeting. The increase may be funded from gifts, federal or private grants, special fund receipts, ~~excess patient receipts above those budgeted at the University of North Carolina Hospitals at Chapel Hill,~~ or direct capital improvement appropriations to that department or institution.

SECTION 4.10.(x) G.S. 146‑22(c) reads as rewritten:

(c) Acquisitions on behalf of the University of North Carolina Health Care System shall be made in accordance with ~~G.S. 116‑37(i),~~ G.S. 116‑350.50, acquisitions on behalf of the University of North Carolina Hospitals at Chapel Hill shall be made in accordance with ~~G.S. 116‑37(a)(4),~~ G.S. 116‑350.15(d), acquisitions on behalf of the clinical patient care programs of the School of Medicine of The University of North Carolina at Chapel Hill shall be made in accordance with ~~G.S. 116‑37(a)(4),~~ G.S. 116‑350.15(d), and acquisitions on behalf of the Medical Faculty Practice Plan of the East Carolina University School of Medicine shall be made in accordance with ~~G.S. 116‑40.6(d).~~G.S. 116‑360.35(a).

SECTION 4.10.(y) G.S. 147‑69.2(a)(16a) reads as rewritten:

(16a) The University of North Carolina Hospitals at Chapel Hill funds, except appropriated funds, deposited with the State Treasurer pursuant to ~~G.S. 116‑37.2.~~G.S. 116‑350.40.

APPROPRIATIONS and reporting requirements for the nc care initiative

SECTION 4.10.(z) The General Assembly makes the following findings:

(1) North Carolina's rural population is among the largest in the United States and is in need of dedicated effort and investment to help improve health outcomes in many of the State's rural communities.

(2) The East Carolina University Brody School of Medicine, the University of North Carolina School of Medicine, University Health Systems of Eastern Carolina, Inc., a nonprofit corporation doing business as ECU Health (ECU Health), and the University of North Carolina Health Care System are dedicated to extending and improving health care services and health provider education for the benefit of North Carolina citizens and communities; delivering care close to where citizens live and work; and transforming rural health care for the benefit of North Carolina.

SECTION 4.10.(aa) It is the intent of the General Assembly that ECU Health, UNC Health Care System, and their affiliated schools of medicine (East Carolina University Brody School of Medicine and the University of North Carolina School of Medicine) will collaborate to establish a new initiative to be known as NC Care. The purpose of the NC Care initiative is to improve access to high quality health care for citizens and communities located in rural areas of North Carolina by establishing outcome driven regional systems of care, beginning in eastern North Carolina. To that end, of the funds authorized in this act or appropriated in this act to the Board of Governors of The University of North Carolina over the 2023‑2025 fiscal biennium, a total of four hundred twenty million dollars ($420,000,000) is provided for investment in the NC Care initiative as follows:

(1) The sum of ten million dollars ($10,000,000) for Clinically Integrated Network.

(2) The sum of two hundred ten million dollars ($210,000,000) for three health clinics, of which the sum of one hundred five million dollars ($105,000,000) has been appropriated.

(3) The sum of one hundred fifty million dollars ($150,000,000) for hospital investment.

(4) The sum of fifty million dollars ($50,000,000) for a regional behavioral health hospital.

SECTION 4.10.(bb) The University of North Carolina Health Care System and ECU Health, through the NC Care initiative, shall use the funds allocated under subsection (aa) of this section to do the following:

(1) Invest in strengthening and providing operational support for community hospitals affiliated with the University of North Carolina Health Care System and ECU Health that will be integrated into the new regional systems of care developed through the NC Care initiative.

(2) Clinically integrate these community hospitals into the new regional systems of care developed through the NC Care initiative.

SECTION 4.10.(cc) By April 1, 2024, and every six months thereafter, ECU Health and the University of North Carolina Health Care System shall jointly report to the Senate Committee on Appropriations/Base Budget, the House Appropriations Committee, and the Fiscal Research Division regarding the NC Care initiative. The report shall include at least all of the following:

(1) Progress on the development and implementation of the NC Care initiative.

(2) Plans developed through the NC Care initiative for the establishment of new regional systems of care, new rural care centers, or both. The report shall include the location and projected cost of any new regional systems of care, new rural care centers, or both; and the location and projected cost for each.

(3) Plans developed through the NC Care initiative for investments in strengthening and providing operational support for community hospitals affiliated with the University of North Carolina Health Care System and ECU Health. The report shall include the amount of funds appropriated by this act that are used for these purposes, broken down by hospital name, hospital location, and the purpose of the investment; and information about how these community hospitals will be integrated into the new regional systems of care developed through the NC Care initiative.

(4) The implementation status of the UNC Health and ECU Health Clinically Integrated Network funded by this act.

(5) Progress on capital projects and grant projects funded by the State Capital Infrastructure Fund pursuant to Section 40.1 of this act.

(6) Any other information the University of North Carolina Health Care System and ECU Health deem necessary for the General Assembly to evaluate the effectiveness of the NC Care initiative.

effective date of section

SECTION 4.10.(dd) Subsections (z) through (cc) of this section are effective July 1, 2023. The remainder of this section is effective when it becomes law.

PART V. General Provisions

UNEXPENDED DIRECTED GRANTS APPROPRIATED IN 2022‑2023 FISCAL YEAR DO NOT REVERT

SECTION 5.1.(a) This section applies to any directed grants appropriated as nonrecurring funds in S.L. 2021‑180 for the 2022‑23 fiscal year that (i) remain unexpended as of the effective date of this section and (ii) are subject to reversion at the end of the 2022‑23 fiscal year. Notwithstanding any provision of law to the contrary, the grants described by this section shall not revert at the end of the 2022‑23 fiscal year and shall remain available for expenditure for the purpose for which the funds were appropriated until the earlier of the date the funds are expended or the date the funds revert pursuant to subsection (b) of this section.

SECTION 5.1.(b) Any funds described in subsection (a) of this section that remain unexpended as of June 30, 2023, shall revert to the appropriate fund at the end of the 2023‑24 fiscal year.

SECTION 5.1.(c) This section becomes effective June 30, 2023.

UNEXPENDED DIRECTED GRANTS APPROPRIATED IN 2021‑2022

SECTION 5.1B.(a) This section applies to any directed grants appropriated as nonrecurring funds in S.L. 2021‑180 for the 2021‑2022 fiscal year that (i) remain unexpended as of the effective date of this section and (ii) are subject to reversion at the end of the 2022‑2023 fiscal year. Notwithstanding any provision of law to the contrary, the grants described by this section shall not revert at the end of the 2022‑2023 fiscal year and shall remain available for expenditure for the purpose for which the funds were appropriated until the earlier of the date the funds are expended or March 31, 2024.

SECTION 5.1B.(b) Any funds described in subsection (a) of this section that remain unexpended as of March 31, 2024, shall revert to the appropriate fund at the end of the 2023‑2024 fiscal year.

SECTION 5.1B.(c) This section is effective June 30, 2023.

ESTABLISHING OR INCREASING FEES

SECTION 5.2.(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 5.2.(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.

DIRECTED GRANTS TO NON‑STATE ENTITIES

SECTION 5.3.(a) Definitions. – For purposes of this act and the Committee Report described in Section 43.2 of this act, the following definitions apply:

(1) Directed grant. – Nonrecurring funds allocated by a State agency to a non‑State entity as directed by an act of the General Assembly.

(2) Non‑State entity. – As defined in G.S. 143C‑1‑1.

SECTION 5.3.(b) Requirements. – Nonrecurring funds appropriated in this act as directed grants are subject to all of the following requirements:

(1) Directed grants are subject to the provisions of subsections (b) through (k), except for subdivision (1) of (f1), of G.S. 143C‑6‑23.

(2) Directed grants of one hundred thousand dollars ($100,000) or less may be made in a single annual payment in the discretion of the Director of the Budget. Directed grants of more than one hundred thousand dollars ($100,000) shall be made in quarterly or monthly payments in the discretion of the Director of the Budget. A State agency administering a directed grant shall begin disbursement of funds to a non‑State entity that meets all applicable requirements as soon as practicable, but no later than 100 days after the date this act becomes law. Full disbursement of funds to a non‑State entity that meets all applicable requirements shall be completed no later than nine months after the date this act becomes law.

(3) Beginning on the first day of a quarter following the deadline provided in subdivision (2) of this subsection and quarterly thereafter, State agencies administering directed grants shall report to the Fiscal Research Division on the status of funds disbursed for each directed grant until all funds are fully disbursed. At a minimum, the report required under this subdivision shall include updates on (i) the date of the initial contact, (ii) the date the contract was sent to the entity receiving the funds, (iii) the date the disbursing agency received the fully executed contract back from the entity, (iv) the contract execution date, and (v) the payment date.

(4) Notwithstanding any provision of G.S. 143C‑1‑2(b) to the contrary, nonrecurring funds appropriated in this act for the 2023‑2024 fiscal year as directed grants shall not revert until two years after this act becomes law, and nonrecurring funds appropriated in this act for the 2024‑2025 fiscal year as directed grants shall not revert until June 30, 2026.

(5) Directed grants to nonprofit organizations are for nonsectarian, nonreligious purposes only.

SECTION 5.3.(c) This section expires on June 30, 2026.

CAP STATE‑FUNDED PORTION OF NONPROFIT SALARIES

SECTION 5.4. No more than one hundred forty thousand dollars ($140,000) 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.

RECOMMENDATION ON PEN‑AND‑INK SIGNATURES

SECTION 5.5. The General Statutes Commission shall review all provisions in the General Statutes that require that documents have pen‑and‑ink signatures. The Commission may recommend a bill for the 2024 Regular Session of the 2023 General Assembly to allow for both pen‑and‑ink and electronic signatures, where appropriate.

DISASTER RELIEF AND RECOVERY/MITIGATION/RESILIENCY

SECTION 5.6.(a) Recapture of Unused Funds. – The State Controller shall transfer fifty‑two million seven hundred eighty‑four thousand four hundred forty‑seven dollars ($52,784,447) in remaining funds appropriated or allocated for the listed agencies, as referenced below, to the State Emergency Response and Disaster Relief Fund, in the following amounts:

(1) Forty‑four million three hundred forty‑six thousand two hundred forty‑nine dollars ($44,346,249) for the Department of Agriculture and Consumer Services:

a. Section 4.1(10) of S.L. 2016‑124.

b. Funds remaining in Item 23 of the Committee Report referenced in Section 6.1 of S.L. 2018‑136.

c. Section 1.3(3) of S.L. 2018‑138.

d. Section 5.9A(c)(2) of S.L. 2021‑180.

(2) Three million three hundred ninety‑nine thousand four dollars ($3,399,004) for the North Carolina Community College System:

a. Section 5.3(f) of S.L. 2018‑136.

b. Funds remaining in Items 8, 9, and 10 of the Committee Report as referenced in Section 6.1 of S.L. 2018‑136.

c. Section 2.1(1) of S.L. 2019‑224.

(3) Two million two hundred forty‑nine thousand two hundred forty‑five dollars ($2,249,245) for the Department of Health and Human Services from funds remaining in Items 16 and 17 of the Committee Report as referenced in Section 6.1 of S.L. 2018‑136.

(4) One million nine hundred eighty‑four thousand four hundred ninety‑nine dollars ($1,984,499) for The University of North Carolina System from funds remaining in Item 7 of the Committee Report as referenced in Section 6.1 of S.L. 2018‑136.

(5) Six hundred seventy‑three thousand six hundred thirteen dollars ($673,613) for the Department of Insurance from funds remaining in Item 26 of the Committee Report as referenced in Section 6.1 of S.L. 2018‑136.

(6) One hundred twenty‑seven thousand six hundred thirty‑four dollars ($127,634) for the Department of Environmental Quality:

a. Section 7 of S.L. 2005‑1.

b. Funds remaining in Item 19 of the Committee Report as referenced in Section 6.1 of S.L. 2018‑136.

c. Section 1.3(5) of S.L. 2018‑138.

(7) Four thousand two hundred three dollars ($4,203) for the North Carolina Office of Recovery and Resiliency from Section 2.1(4)c. of S.L. 2019‑224.

SECTION 5.6.(b) Small Project Mitigation and Recovery Program Modification. – Section 5.9(a) of S.L. 2021‑180 reads as rewritten:

SECTION 5.9.(a) Allocations. – The funds appropriated in Section 2.2(j) of this act for disaster relief, recovery, mitigation, and resiliency shall be allocated as follows:

…

(5) $25,000,000 to the Office of State Budget and Management for Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., a nonprofit corporation, to establish and administer the Small Project Mitigation and Recovery Program (Program) in accordance with this subdivision. The Program shall disburse grants up to ~~two hundred fifty thousand dollars ($250,000)~~ two million dollars ($2,000,000) to units of local government for flood mitigation and recovery projects. These funds may be used for planning or as matching funds when applicable.

….

SECTION 5.6.(c) Previous Allocations Reversion Modification. – Notwithstanding Sections 5.9(b) and 5.9A(e) of S.L. 2021‑180, funds allocated in Sections 5.9 and 5.9A of S.L. 2021‑180, as amended by Section 1.4 of S.L. 2021‑189, Section 1.2 of S.L. 2022‑6, Section 5.4 of S.L. 2022‑74, and Sections 1.2 and 1.3 of S.L. 2023‑11, shall not revert to the Disaster Relief and Mitigation Fund but instead shall revert to the State Emergency Response and Disaster Relief Reserve if the funds are not expended or encumbered by June 30, 2026. Funds allocated in Section 5.4 of S.L. 2022‑74 shall revert to the State Emergency Response and Disaster Relief Reserve if the funds are not expended or encumbered by June 30, 2027.

SECTION 5.6.(d) Stoney Creek Allocation Transfer. – The State Controller shall transfer the allocation of five million dollars ($5,000,000) under Section 5.9(a)(23) of S.L. 2021‑180 for Stoney Creek acquisitions from the North Carolina Office of Recovery and Resiliency to the Department of Environmental Quality to expand the Stoney Creek pilot project effort authorized in Section 5.9(a)(9) of S.L. 2021‑180.

SECTION 5.6.(e) Mitigation Buyouts Modification. – The funds allocated to the Department of Public Safety, Office of Recovery and Resiliency (NCORR), under Section 2.1(4)a. of S.L. 2019‑224, as amended, for mitigation buyouts and other various purposes shall be instead used by NCORR for mitigation buyouts, relocations, rehabilitations, reconstructions, and for the purchase of manufactured housing units in order to serve homeowners and communities affected by Hurricanes Matthew and Florence.

SECTION 5.6.(f) Allocations. – The funds appropriated in Section 2.2(e) of this act for disaster relief, recovery, mitigation, and resiliency shall be allocated as follows:

(1) Thirty million seventy thousand two hundred fifty dollars ($30,070,250) to the Department of Public Safety, Division of Emergency Management, for long‑term recovery and mitigation grants. The Division of Emergency Management shall combine the Disaster Relief and Mitigation Fund established in subsection 5.9(f) of S.L. 2021‑180 and the Transportation Infrastructure Resiliency Fund established in subsection 5.9(g) of S.L. 2021‑180 and use the remaining unencumbered balances of both funds as well as the funds allocated by this subdivision to provide disaster mitigation grants and local matching grants to State agencies, units of local government, nonprofit organizations, and public authorities, as defined in G.S. 159‑7. These funds shall be used for (i) the purposes set forth in subsections 5.9(f) and 5.9(h) of S.L. 2021‑180 and (ii) local matching grants to draw down federal funds for mitigation projects. At least five million dollars ($5,000,000) of the funds allocated in this subdivision shall be used for transportation resiliency projects.

(2) Twenty million dollars ($20,000,000) to the Department of Insurance for the State Property Fire Insurance Fund to help cover the budget gap from increases in expenditures related to recent natural disasters.

(3) Twenty million dollars ($20,000,000) to the Department of Agriculture and Consumer Services to be used for the Streamflow Rehabilitation Assistance Program for purposes consistent with Article 6 of Chapter 139 of the General Statutes.

(4) Twenty million dollars ($20,000,000) to the Department of Environmental Quality for the Coastal Storm Damage Mitigation Fund. These funds shall be allocated in equal amounts each year of the 2023‑2025 fiscal biennium and used for the purposes set forth in G.S. 143‑215.73M.

(5) Ten million dollars ($10,000,000) to the Department of Environmental Quality, Division of Coastal Management, for the Resilient Coastal Communities Program to provide funding for the implementation or construction of planned, prioritized, and engineered resilience projects in the 20 coastal counties of the State. These counties are listed in G.S. 113A‑103(2).

(6) Ten million dollars ($10,000,000) to the Wildlife Resources Commission for the Lake Mattamuskeet outfall canal.

(7) Five million dollars ($5,000,000) to the Department of Public Safety, Division of Emergency Management, for the Local Disaster Shelter Capacity Grant Program in accordance with subsection (g) of this section.

(8) Five million dollars ($5,000,000) to the Department of Public Safety, Division of Emergency Management, to conduct flood studies, risk assessment, and building mitigation strategies through the State Floodplain Mapping Program. Funds will be prioritized to map non‑encroachment areas of the State and to provide for information sharing through the State's Flood Risk Information System.

(9) Three million three hundred twenty‑seven thousand five hundred dollars ($3,327,500) to the Department of Public Safety, Division of Emergency Management, for detailed mapping and risk impact studies for 250 existing flood gauges to provide baseline information on those gauges for use in the Division's Flood Inundation Mapping and Alert Network.

(10) One million four hundred eighty‑one thousand eight hundred fifty‑nine dollars ($1,481,859) to the Department of Environmental Quality to provide funding for six time‑limited positions beginning on January 1, 2024, to continue implementation of the Flood Resiliency Blueprint described in Section 5.9(c) of S.L. 2021‑180, as amended. Four hundred ninety‑three thousand nine hundred fifty‑three dollars ($493,953) of these funds are allocated for the 2023‑2024 fiscal year, and the remaining funds for the 2024‑2025 fiscal year. Notwithstanding any provision of law to the contrary, the Office of State Human Resources shall allow the Department to post these positions up to 180 days prior to their starting date.

(11) One million dollars ($1,000,000) to the Wildlife Resources Commission to provide a grant to the Nature Conservancy, a nonprofit corporation, for a pilot project to protect and restore critically important peatlands in eastern North Carolina for the purpose of increasing community flood resilience, improving water quality and wildlife habitat, and reducing wildfire risk.

(12) Three hundred forty thousand dollars ($340,000) to the North Carolina Collaboratory at the University of North Carolina at Chapel Hill (Collaboratory) for the FerryMon program. These funds will be allocated in equal amounts to each year of the 2023‑2025 fiscal biennium.

(13) Three hundred twenty thousand dollars ($320,000) to the Collaboratory for the ModMon program. These funds will be allocated in equal amounts to each year of the 2023‑2025 fiscal biennium.

(14) Two hundred sixty‑four thousand dollars ($264,000) to The University of North Carolina Board of Governors for North Carolina School of Science and Math storm damage.

(15) Fifty thousand dollars ($50,000) to The University of North Carolina Board of Governors for North Carolina Central University storm damage funding.

(16) Twenty‑two million two hundred fifty‑five thousand dollars ($22,255,000) to the Office of State Budget and Management to provide directed grants to the following entities for the following purposes:

a. Seven million dollars ($7,000,000) to Pilot View Resource Conservation and Development, Inc., a nonprofit corporation, for stormwater and stream rehabilitation.

b. Five million dollars ($5,000,000) to Baptists on Mission, a nonprofit corporation, to respond to natural disasters. These funds shall be expended only for natural disaster response in this State. The recipient of these funds shall report to the chairs of the Joint Legislative Emergency Management Oversight Committee and the Fiscal Research Division on the expenditure of these funds annually beginning on October 1, 2024, until October 1, 2028, or until the entirety of the funds are expended, whichever is earlier.

c. Three million dollars ($3,000,000) to Blue Ridge Resource Conservation and Development Council, a nonprofit corporation, for stormwater and stream rehabilitation.

d. Two million dollars ($2,000,000) to the North Carolina Insurance Underwriting Association for the Coastal Resilient Roof Grant Pilot Program, consistent with the purposes set forth in Section 5.9(i) of S.L. 2021‑180.

e. One million five hundred thousand dollars ($1,500,000) to Southwestern North Carolina Resource Conservation and Development Council, Inc., a nonprofit corporation, for dam removal and stream restoration.

f. One million dollars ($1,000,000) to North Carolina Resource Conservation and Development Association for flood mitigation projects.

g. One million dollars ($1,000,000) to Montreat Conference Center Development Foundation, Inc., a nonprofit corporation, for Lake Susan dredging and flood control.

h. One million dollars ($1,000,000) to The Methodist University, Inc., for resilience.

i. Seven hundred fifty‑five thousand dollars ($755,000) to United Way of Coastal Carolina, Inc., a nonprofit corporation, to support the Pamlico County Disaster Recovery Coalition.

(17) Seven million five hundred thousand dollars ($7,500,000) to the Department of Environmental Quality to provide directed grants to North Carolina Coastal Federation, Inc. (Federation), a nonprofit corporation, for the following purposes:

a. Five million dollars ($5,000,000) for the Stormwater Retrofit Pilot Cost‑Share Program, in accordance with subsection (h) of this section.

b. Two million dollars ($2,000,000) to provide up to a fifty percent (50%) match for federal, State, or private funds for living shoreline projects in coastal counties. Private residents applying for funds for these purposes shall demonstrate a public purpose and benefit for the requested project prior to the Federation committing the funds.

c. Five hundred thousand dollars ($500,000) for (i) the Federation's Lost Fishery Gear Recovery Program, which employs coastal fishermen and other private partners to remove debris from coastal waters, and (ii) the investigation, removal, and disposal of abandoned and derelict vessels in public trust waters of the State located in coastal counties. For purposes of this sub‑subdivision, the phrase abandoned and derelict vessel has the meaning set forth in subdivision 2.1(10) of S.L. 2019‑224, as rewritten by Section 4 of S.L. 2020‑74. The Federation may use these funds to contract with any federal or State agency or unit of local government or to match federal grant funds.

(18) Eight hundred forty‑two thousand five hundred ninety‑two thousand dollars ($842,592) to the Department of Public Safety, Division of Emergency Management, for Hyde County as a directed grant to continue the deployment of the emergency communications assets system for Ocracoke Island described in sub‑subdivision 5.4.(a)(3)k. of S.L. 2022‑74 by adding to the deployed system the ability for Ocracoke citizens, residents, businesses, and homeowners to make emergency 9‑1‑1 calls. The Division of Emergency Management and Hyde County shall include in the report required by sub‑subdivision 5.4.(a)(3)k. of S.L. 2022‑74 an update on deployment of the additional system capabilities funded by this subdivision, and shall also submit no later than July 1, 2025, a final report on deployment and performance of the deployed system and lessons learned for broader deployment of the system in other parts of the State to the Joint Legislative Emergency Management Oversight Committee and the Fiscal Research Division.

(19) One hundred thirty million three hundred sixty thousand seven hundred fifty dollars ($130,360,750) to the Department of Public Safety as directed grants for recipients as listed in the Committee Report described in Section 43.2 of this act.

SECTION 5.6.(g) Local Emergency Shelter Capacity Grant Program. – The Division of Emergency Management shall administer a grant program using funds allocated in subdivision (f)(2) of this section to provide grants to support local communities in upgrading structures identified by the community as an emergency shelter location (i) to meet weather‑related structural requirements such as windspeed ratings of roofs and windows and (ii) to upgrade electrical systems of the structure to install emergency generators or provide for quick hookup locations for emergency generators. The program shall prioritize public buildings, but if no public building is suitable for use as an emergency shelter in a particular community, the Division may upon request of a unit of local government consider a grant application for a nonpublic building. The Division shall also in awarding grants consider steps taken by the local government to obtain alternative sources of funding such as insurance policies, private grant funding, or available federal aid programs.

SECTION 5.6.(h) Stormwater Retrofit Pilot Cost‑Share Program. – The North Carolina Coastal Federation, Inc., a nonprofit corporation, shall establish the Stormwater Retrofit Pilot Cost‑Share Program. The Federation shall adopt guidelines to administer the Program and consult with the Department of Environmental Quality in the development of the Program. The purpose of the Program is to provide grants to eligible permittees. Grants are limited to stormwater permittees who demonstrate that they would experience a significant economic hardship based on such factors as the Department of Environmental Quality may specify in financing upgrades and repairs to their stormwater control measures to meet the more stringent of (i) current standards if the permittee was building a new system or (ii) the terms of the permit. The Coastal Federation shall report to the chairs of the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources by March 1, 2024, on the implementation of this Program. The report shall include, at a minimum, the continued need for the pilot program to operate through the 2024‑2025 fiscal year and whether the Program should be expanded or terminated.

SECTION 5.6.(i) HFA Funding Reallocation. – Funds allocated to the Housing Finance Agency for a multifamily affordable housing project by Section 5.9(a)(18) of S.L. 2021‑180, as amended by Section 5.4(j) of S.L. 2022‑74, shall instead be used by the Agency to provide a grant to Robeson County for the development of an elderly housing project to support low‑ and moderate‑income senior citizens displaced by natural disaster from the Dunn Road area of Lumberton, North Carolina. To be eligible for funding, a project must have received required zoning approvals by the City of Lumberton prior to April 1, 2022. Funds reallocated by this subsection shall not revert and shall remain available for expenditure until June 30, 2025. This subsection becomes effective June 30, 2023.

SECTION 5.6.(j) Allocation Reporting Requirements. – The Office of State Budget and Management shall report to the chairs of the House and Senate Appropriations Committees and to the Fiscal Research Division of the General Assembly on the implementation of this section on a quarterly basis and shall also provide any additional reports or information requested by the Fiscal Research Division. Each report required by this section shall include information about all funds expended or encumbered pursuant to this section as of the date of the report, regardless of which State agency, federal agency, or non‑State entity administers the funds. Non‑State entities that administer or receive any funds appropriated in this section shall assist and fully cooperate with the Office of State Budget and Management in meeting the Office's obligations under this section.

SECTION 5.6.(k) Limitation on Funds. – The Governor may not use the funds described in this section, including the funds transferred under subsection (a) of this section, to make budget adjustments under G.S. 143C‑6‑4 or to make reallocations under G.S. 166A‑19.40(c). Nothing in this section shall be construed to prohibit the Governor from exercising the Governor's authority under these statutes with respect to funds other than those described in this section.

The Governor shall also ensure that funds allocated in this section are expended in a manner that does not adversely affect any person's or entity's eligibility for federal funds that are made available, or that are anticipated to be made available, as a result of natural disasters. The Governor shall also, to the extent practicable, avoid using State funds to cover costs that will be, or likely will be, covered by federal funds.

SECTION 5.6.(l) Reversion. – Funds allocated in this section that are not expended or encumbered by June 30, 2028, shall revert to the State Emergency Response and Disaster Relief Reserve. This subsection supersedes the reversion dates for directed grants specified in Section 5.3(b)(4) of this act, but nothing in this section shall be construed or is intended to waive or supersede any other requirement for directed grants set forth in Section 5.3 of this act.

STATE BUDGET ACT/FUNDS CARRYFORWARD

SECTION 5.7.(a) G.S. 143C‑1‑1 reads as rewritten:

§ 143C‑1‑1. Purpose and definitions.

…

(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.

…

(6a) Carryforward. – The balance of a General Fund operating budget appropriation which would otherwise revert at the close of the fiscal year but instead is made available in the succeeding fiscal year as is specified in law or to liquidate an encumbrance of the prior fiscal year. Funds may not be carried forward for any other purpose.

…

(12) Encumbrance. – A financial obligation created by a purchase order, contract, ~~salary commitment,~~ unearned or prepaid collections for services provided by the State, or other legally binding agreement.

….

SECTION 5.7.(b) Part 1 of Article 6 of Chapter 143C of the General Statutes is amended by adding a new section to read:

§ 143C‑6‑4.1. Carryforward of funds.

(a) Unless otherwise specified by law, funds carried forward at the end of the fiscal year may only be spent in the succeeding fiscal year for the purpose for which they were carried forward. Carryforward funds that have not been liquidated in the year in which they were carried forward shall revert at the end of the fiscal year.

(b) Unless otherwise specified by law, funds carried forward under this authorization may not be transferred, or otherwise moved, out of the General Fund. This subsection does not apply to The University of North Carolina System.

(c) Funds carried forward to support encumbrances are subject to cash availability. If there is insufficient cash to support all allowable carryforward, the Director of the Budget shall prioritize funds specified in law over funds necessary to liquidate an encumbrance.

MEDICAL FREEDOM/COVID‑19 VACCINATIONS

SECTION 5.8.(a) Article 10 of Chapter 143 of the General Statutes is amended by adding a new section to read:

§ 143‑162.10. Discrimination against persons based on refusal of COVID‑19 vaccination and exemption.

(a) No State agency, city, county, or political subdivision of the State shall deny or refuse employment to any person or discharge any person from employment due to the person's refusal to provide proof of a COVID‑19 vaccination or the person's refusal to submit to a COVID‑19 vaccination or a series of COVID‑19 vaccinations, unless the exemption in subsection (c) of this section applies. This section shall not be construed to prevent the person from being discharged for cause. As used in this section, the term COVID‑19 means the coronavirus disease of 2019.

(b) No State agency, city, county, or political subdivision of the State shall discriminate or take any retaliatory action against an employee because the employee in good faith does or threatens to file a claim or complaint; initiate any inquiry, investigation, inspection, proceeding, or other action; or testify or provide information to any person with respect to the provisions of subsection (a) of this section.

(1) Any employee, vendor, volunteer, trainee, or student that is required by a facility certified by the Centers for Medicare and Medicaid Services to show proof of a COVID‑19 vaccination, or to submit to a COVID‑19 vaccination or COVID‑19 series of vaccinations.

(2) An employee employed by any entity that receives federal funding if complying with subsection (a) or (b) of this section would result in the loss of that federal funding.

(3) An employee employed by the Department of Health and Human Services in the Division of State Operated Healthcare Facilities if the Department requires the COVID‑19 vaccination or series of vaccinations for that employee.

SECTION 5.8.(b) Part 2 of Article 6 of Chapter 130A of the General Statutes is amended by adding a new section to read:

§ 130A‑158.3. COVID‑19 vaccination requirement prohibited; exemption.

(a) Notwithstanding any provision of this Chapter or Chapter 166A of the General Statutes to the contrary, no State or local public health agency or public health official may require any person, including an applicant for employment or an employee, to provide proof of a COVID‑19 vaccination or to submit to a COVID‑19 vaccination or series of COVID‑19 vaccinations unless the exemption in subsection (b) of this section applies. For purposes of this section, the following definitions apply:

(1) Applicant for employment. – Any person who seeks to be permitted, required, or directed by a State or local public health agency, or any person employed by a State or local public health agency, to engage in employment in consideration of direct or indirect gain or profit.

(2) COVID‑19. – The coronavirus disease of 2019.

(3) Employee. – Any individual employed by a State or local public health agency.

(4) State or local public health agency. – Includes the following:

a. The Department or any of its divisions.

b. The Commission for Public Health or any district created by the Commission pursuant to subsection (d) of G.S. 130A‑29.

c. A local health department as defined in subdivision (5) of G.S. 130A‑2.

(5) State or local public health official. – Includes the following:

a. The Secretary or a designee.

b. The State Health Director or a designee.

c. The head of any State or local public health agency or a designee.

(b) An exemption to subsection (a) of this section applies to the following:

(2) An employee employed by any entity that receives federal funding if complying with subsection (a) of this section would result in the loss of that federal funding.

SECTION 5.8.(c) Article 23 of Chapter 153A of the General Statutes is amended by adding a new section to read:

§ 153A‑465. COVID‑19 vaccination requirement prohibited; exemption.

(a) No county may require any person, including an applicant for employment or an employee, to provide proof of a COVID‑19 vaccination or to submit to a COVID‑19 vaccination or a series of COVID‑19 vaccinations, unless the exemption in subsection (b) of this section applies. For purposes of this section, the following definitions apply:

(1) Applicant for employment. – Any person who seeks to be permitted, required, or directed by a county or any person employed by a county to engage in employment in consideration of direct or indirect gain or profit.

(2) COVID‑19. – The coronavirus disease of 2019.

(3) Employee. – As defined in G.S. 153A‑99(b)(1).

(b) An exemption to subsection (a) of this section applies to the following:

(2) An employee employed by any entity that receives federal funding if complying with subsection (a) of this section would result in the loss of that federal funding.

SECTION 5.8.(d) Article 21 of Chapter 160A of the General Statutes is amended by adding a new section to read:

§ 160A‑499.10. COVID‑19 vaccination; requirement prohibited and exemption.

(a) No city may require any person, including an applicant for employment or an employee, to provide proof of a COVID‑19 vaccination or to submit to a COVID‑19 vaccination or a series of COVID‑19 vaccinations, unless the exemption in subsection (b) of this section applies. For purposes of this section, the following definitions apply:

(1) Applicant for employment. – Any person who seeks to be permitted, required, or directed by a city or any person employed by a city to engage in employment in consideration of direct or indirect gain or profit.

(2) COVID‑19. – The coronavirus disease of 2019.

(3) Employee. – As defined in G.S. 160A‑169(b)(1).

(b) An exemption to subsection (a) of this section applies to the following:

(2) An employee employed by any entity that receives federal funding if complying with subsection (a) of this section would result in the loss of that federal funding.

SECTION 5.8.(e) G.S. 130A‑152 reads as rewritten:

§ 130A‑152. Immunization required.

(a) Every child present in this State shall be immunized against diphtheria, tetanus, whooping cough, poliomyelitis, red measles (rubeola) and rubella. In addition, except as provided in subsection (f) of this section, every child present in this State shall be immunized against any other disease upon a determination by the Commission that the immunization is in the interest of the public health. Every parent, guardian, person in loco parentis and person or agency, whether governmental or private, with legal custody of a child shall have the responsibility to ensure that the child has received the required immunization at the age required by the Commission. If a child has not received the required immunizations by the specified age, the responsible person shall obtain the required immunization for the child as soon as possible after the lack of the required immunization is determined.

…

(f) Notwithstanding this section or other applicable State law, the Commission for Public Health, public school units, community colleges, constituent institutions of The University of North Carolina, and any private colleges or universities receiving State funds are prohibited from requiring a student to provide proof of vaccination against the coronavirus disease of 2019 (COVID‑19) or to submit to a COVID‑19 vaccination or series of COVID‑19 vaccinations unless the requirement for vaccination or proof of vaccination is required for participating in a program of study, or fulfilling education requirements for a program, that requires working, volunteering, or training in a facility certified by the Centers for Medicare and Medicaid Services.

SECTION 5.8.(f) This section becomes effective January 1, 2024.

PREEMPTION OF CERTAIN LOCAL GOVERNMENT ACTIONS

SECTION 5.9.(a) G.S. 95‑25.1 reads as rewritten:

§ 95‑25.1. Short title and legislative ~~purpose.~~purpose; local governments preempted.

(a) This Article shall be known and may be cited as the Wage and Hour Act.

(b) The public policy of this State is declared as follows: The wage levels of employees, hours of labor, payment of earned wages, and the well‑being of minors are subjects of concern requiring legislation to promote the general welfare of the people of the State without jeopardizing the competitive position of North Carolina business and industry. The General Assembly declares that the general welfare of the State requires the enactment of this law under the police power of the State.

(d) The provisions of this Article supersede and preempt any ordinance, regulation, resolution, or policy adopted or imposed by a unit of local government or other political subdivision of the State that regulates or imposes any requirement upon an employer pertaining to compensation of employees, such as the wage levels of employees, hours of labor, payment of earned wages, benefits, leave, or well‑being of minors in the workforce. This subsection shall not apply to any of the following:

(1) A local government regulating, compensating, or controlling its own employees.

(2) Economic development incentives awarded under Chapter 143B of the General Statutes.

(3) Economic development incentives awarded under Article 1 of Chapter 158 of the General Statutes.

(4) A requirement of federal community development block grants.

(5) Programs established under G.S. 160D‑1311.

SECTION 5.9.(b) G.S. 153A‑449(a) reads as rewritten:

(a) Authority. – A county may contract with and appropriate money to any person, association, or corporation, in order to carry out any public purpose that the county is authorized by law to engage in. A county may not require a private contractor under this section to abide by any restriction that the county could not impose on all employers in the county, such as paying minimum wage higher than the statewide wage in Chapter 95 of the General Statutes or providing paid sick leave to its employees, as a condition of bidding on a contract.

SECTION 5.9.(c) G.S. 160A‑20.1(a) reads as rewritten:

(a) Authority. – A city may contract with and appropriate money to any person, association, or corporation, in order to carry out any public purpose that the city is authorized by law to engage in. A city may not require a private contractor under this section to abide by any restriction that the city could not impose on all employers in the city, such as paying minimum wage higher than the statewide wage in Chapter 95 of the General Statutes or providing paid sick leave to its employees, as a condition of bidding on a contract.

SECTION 5.9.(d) Article 6 of Chapter 153A of the General Statutes is amended by adding a new section to read:

§ 153A‑145.11. Limitations on regulations of auxiliary containers; shopping carts.

(a) Except as provided under subsection (b) of this section, no county may adopt an ordinance, resolution, regulation, or rule to:

(1) Restrict, tax, charge a fee, prohibit, or otherwise regulate the use, disposition, or sale of an auxiliary container.

(2) Regulate the use of shopping carts, including the imposition of a fee or fine on a business for failure to take possession of a shopping cart that was removed from the premises of the business.

(b) A county is authorized to:

(1) Operate a recycling program, a composting program, and a solid waste disposal program as authorized by law.

(2) Regulate the use of auxiliary containers on property owned or maintained by the county.

(1) Auxiliary container. – A bag, cup, package, container, bottle, device, or other packaging made of cloth, paper, plastic, foamed plastic, fiber, expanded plastic, cardboard, corrugated material, aluminum, glass, post‑consumer recycled material, or similar coated or laminated material that is designed for the consumption, transportation, or protection of merchandise, food, or beverage at a food service facility, manufacturing facility, distribution facility, processing facility, or retail facility.

(2) Shopping cart. – As defined in G.S. 14‑72.3(a)(1).

SECTION 5.9.(e) Article 8 of Chapter 160A of the General Statutes is amended by adding a new section to read:

§ 160A‑205.6. Limitations on regulations of auxiliary containers; shopping carts.

(a) Except as provided under subsection (b) of this section, no city may adopt an ordinance, resolution, regulation, or rule to:

(1) Restrict, tax, charge a fee, prohibit, or otherwise regulate the use, disposition, or sale of an auxiliary container.

(2) Regulate the use of shopping carts, including the imposition of a fee or fine on a business for failure to take possession of a shopping cart that was removed from the premises of the business.

(b) A city is authorized to:

(1) Operate a recycling program, a composting program, and a solid waste disposal program as authorized by law.

(2) Regulate the use of auxiliary containers on property owned or maintained by the city.

(2) Shopping cart. – As defined in G.S. 14‑72.3(a)(1).

SECTION 5.9.(f) G.S. 130A‑290(a)(35) is amended by adding a new sub‑subdivision to read:

h. An auxiliary container, as defined in G.S. 153A‑145.11(c)(1) or G.S. 160A‑205.6(c)(1).

PART VI. Community College System

SURRY COMMUNITY COLLEGE NORTHERN REGIONAL HOSPITAL MOU

SECTION 6.1.(a) Of the funds appropriated in this act from the ARPA Temporary Savings Fund to the Community Colleges System Office for the 2023‑2025 fiscal biennium, the System Office shall allocate the sum of one million dollars ($1,000,000) in nonrecurring funds in each year of the 2023‑2025 fiscal biennium to Surry Community College to enter into a memorandum of understanding (MOU) with Northern Regional Hospital in Mount Airy, North Carolina, to train and employ up to eight licensed nurse educators each year. Nurse educators employed by Northern Regional Hospital with these funds shall provide clinical instruction services for nursing students on a full‑time basis for affiliated nursing programs.

SECTION 6.1.(b) No later than March 15, 2024, the Community Colleges System Office shall report to the Joint Legislative Education Oversight Committee on the MOU and the resulting impact of the clinical instruction services provided by nurse educators for nursing students.

HIGH‑COST HEALTHCARE WORKFORCE PROGRAMS START‑UP FUNDS

SECTION 6.2.(a) Establishment of the Fund. – Of the funds appropriated in this act from the ARPA Temporary Savings Fund to the Community Colleges System Office for the 2023‑2025 fiscal biennium, the System Office shall establish the Fund for High‑Cost Healthcare Workforce Programs (Fund). The Fund shall be used to assist community colleges in starting new programs in high‑demand healthcare career fields that require significant start‑up funds. Monies shall be allocated from the Fund in each fiscal year of the 2023‑2025 fiscal biennium only for programs related to healthcare, including nursing.

SECTION 6.2.(b) Applications. – The System Office shall establish an application process for community colleges to apply for awards from the Fund no later than the beginning of each fiscal year of the 2023‑2025 fiscal biennium. To be eligible to receive funds, colleges shall submit to the System Office a completed application, which shall include at least the following information:

(1) A description of the proposed new program requiring start‑up funds.

(2) Documentation of industry demand for the program or documentation of future local, regional, or statewide employment needs that will be met by the program.

(3) Total cash cost to start the program and maintain the program over two fiscal years.

(4) A plan for the fiscal sustainability of the new program.

SECTION 6.2.(c) Limitation on the Use of Funds. – A community college may only apply for the award of funds to support one new program in each fiscal year. Funds shall remain available to the community college for a period of two fiscal years.

SECTION 6.2.(d) Matching Funds. – A community college identified below shall be required to match a percentage of the total cash cost of the program with non‑State funds based on a college's total full‑time equivalents (FTE) according to the following:

(1) Community colleges with a total FTE greater than 6,500 shall be required to match fifteen percent (15%) of the cost.

(2) Community colleges with a total FTE between 2,500 and 6,500 shall be required to match ten percent (10%) of the cost.

SECTION 6.2.(e) Administration. – The System Office may adopt any regulations, policies, or procedures regarding the application process, use of funds, eligibility requirements, and any other rules necessary related to the administration of the Fund. The System Office may use up to one hundred thousand dollars ($100,000) each fiscal year for administrative costs for establishing and implementing the program.

SECTION 6.2.(f) Report. – The System Office shall submit an initial report to the Joint Legislative Education Oversight Committee by December 1, 2024, and an annual report thereafter for each year the System Office provides funds to community colleges from the Fund on the programs receiving the funds, which shall include at least the following information:

(1) The community colleges that received funds, the amount of funds, and the types of healthcare programs started.

(2) The use of funds by community colleges receiving awards, including costs associated with student instruction, faculty salaries, instructional supplies, related instructional equipment, and accreditation costs.

(3) Evaluation of the success of the new community college healthcare programs receiving funds.

REPORT ON CERTAIN RECURRING PROGRAMS

SECTION 6.3. Article 4A of Chapter 115D of the General Statutes is amended by adding a new section to read:

§ 115D‑58.17. Report on certain recurring programs.

(a) No later than February 15, 2024, and annually thereafter, the State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on outcomes related to the following recurring programs:

(1) Minority male mentoring programs, including the Minority Male Success Initiative.

(2) The Rowan‑Cabarrus Community College Biotechnology Training Center and Greenhouse at the North Carolina Research Campus in Kannapolis.

(b) Each report required pursuant to this section shall include at least the following information from the prior fiscal year:

(1) Program activities, objectives, and accomplishments.

(2) Itemized expenditures and fund sources.

(3) The impact of the program on its intended purpose.

NC COMMUNITY COLLEGE SHORT‑TERM WORKFORCE DEVELOPMENT GRANTS

SECTION 6.5. Article 1 of Chapter 115D of the General Statutes is amended by adding a new section to read:

§ 115D‑5.1A. Short‑Term Workforce Development Grant Program.

(a) Program Established. – There is established the North Carolina Community College Short‑Term Workforce Development Grant Program (Program) to be administered by the State Board of Community Colleges. The State Board shall adopt rules for the disbursement of the grants pursuant to this section.

(b) Programs of Study. – The State Board of Community Colleges, in collaboration with the Department of Commerce, shall determine the eligible programs of study for the Program, according to the occupations that are in the highest demand in the State. The eligible programs of study shall include programs such as architecture and construction, health sciences, information technology, electrical line worker, and manufacturing programs and may include other programs to meet local workforce needs.

(c) Award Amounts. – To the extent funds are made available for the Program, the State Board of Community Colleges shall award grants in an amount of up to seven hundred fifty dollars ($750.00) to students pursuing short‑term, noncredit State and industry workforce credentials. The State Board of Community Colleges shall establish criteria for initial and continuing eligibility for students. At a minimum, students shall be required to qualify as a resident for tuition purposes under the criteria set forth in G.S. 116‑143.1 and in accordance with the coordinated and centralized residency determination process administered by the State Education Assistance Authority.

(d) Report. – The State Board shall submit a report by April 1, 2024, and annually thereafter, on the Program to the Joint Legislative Education Oversight Committee and the Fiscal Research Division. The report shall contain, for each academic year and by programs of study, the amount of grant funds disbursed and the number of eligible students receiving funds.

EXTEND RISE UP TRAINING AND CREDENTIALING PROGRAM

SECTION 6.8. Section 6.8 of S.L. 2021‑180, as amended by Section 6.1 of S.L. 2022‑74, reads as rewritten:

SECTION 6.8.(a) The Community Colleges System Office shall partner with the North Carolina Retail Merchants Association and the Retail Consumer Alliance Foundation to implement the RISE Up credentialing program for the 2021‑2023 fiscal biennium to teach foundational skills to students attending community colleges and cooperative innovative high schools for career success in the retail industry, customer service, and sales, which may include inventory management and profitability, as well as supply chain warehouse, inventory, and logistics. The RISE Up credentialing program offers all of the following: (i) opportunities for the industry to share the skills valued in job candidates and employees, (ii) valuable skills needed in any industry, particularly customer service, sales, and skills to run a business, (iii) job readiness skills, such as resume preparation, interviewing strategies, professionalism in the workplace, and soft skills, including listening and problem solving, (iv) an understanding of the retail industry and its wide variety of jobs, and (v) preparation for students for the nearly 130,000 retail establishments and more than 1,000,000 retail jobs in North Carolina.

SECTION 6.8.(b) The RISE Up credentialing program shall be offered to students at community colleges and cooperative innovative high schools through each partner community college with the opportunity for up to four different levels of the RISE Up credentials that include the following:

(1) Retail Industry Fundamentals.

(2) Customer Service & Sales.

(3) Operations and Profit.

(4) Supply Chain: Warehouse, Inventory, & Logistics.

SECTION 6.8.(b1) For any credentials remaining in the 2023‑2025 fiscal biennium, the North Carolina Retail Merchants Association and the Retail Consumer Alliance Federation shall implement the RISE Up credentialing program as described in subsections (a) and (b) of this section for any individuals that meet the eligibility requirements for the program, including, but not limited to, students at community colleges and cooperative innovative high schools.

SECTION 6.8.(c) The System Office, in collaboration with the North Carolina Retail Merchants Association and the Retail Consumer Alliance Foundation, shall submit an initial report by December 1, 2022, and a final report by December 1, 2023, to the Joint Legislative Education Oversight Committee, the Senate Appropriations Committee on Education/Higher Education, the House Appropriations Committee on Education, and the Fiscal Research Division on the results of implementing the RISE Up credentialing programs, including at least the following information:

(1) The number of students who received or are in the process of receiving credentials, by type of credential.

(2) Student outcomes related to the credentialing.

(3) A list of the community colleges and cooperative innovative high schools participating in the program.

SECTION 6.8.(d) The North Carolina Retail Merchants Association and the Retail Consumer Alliance Federation shall submit an initial report by December 1, 2024, and a final report by December 1, 2025, to the Joint Legislative Education Oversight Committee on the results of implementing the RISE Up credentialing program in the 2023‑2025 fiscal biennium, including at least the following information:

(1) The number of individuals who received or are in the process of receiving credentials, by type of credential.

(2) Individual outcomes related to the credentialing.

(3) A list of the educational institutions participating in the program, including community colleges and cooperative innovative high schools.

COMMUNITY COLLEGE PROGRAMS SERVING IDD STUDENTS

SECTION 6.9.(a) Article 3 of Chapter 115D of the General Statutes is amended by adding a new section to read:

§ 115D‑44. Training programs for students with intellectual and developmental disabilities.

(a) The State Board of Community Colleges shall establish a community college training program for up to 15 community colleges. The program shall provide opportunities for micro‑credentials or other credentials that lead to increased employment outcomes for individuals with intellectual and developmental disabilities (IDD). To the extent funds are appropriated for this purpose, the program shall improve the ability of participating community colleges to offer training and educational components that include improving employability skills and providing on‑the‑job training and apprenticeships with business and industry for individuals with IDD. The goal of the program shall be to inform community colleges and address cross‑departmental supports within the individual community colleges on programs for individuals with IDD related to at least the following:

(1) Establishing best practices for providing vocational training for individuals with IDD.

(2) Providing financial and benefits counseling.

(3) Developing strategies on integrating assistive technology.

(4) Maximizing access, with supports, to credential and degree programs, including micro‑credentials that are established by the State Board.

(5) Identifying methods to increase orientation and integration of individuals with IDD into the college community to the greatest extent possible.

(6) Determining a needs assessment, marketing, and evaluation to serve a broad array of individuals with developmental and other similar disabilities or learning challenges to assure adequate demand for new or existing programs.

(b) No later than May 1 of each year, the Community Colleges System Office shall report on the funds appropriated to the System Office for the purposes of this section to the Joint Legislative Education Oversight Committee and the Fiscal Research Division. At a minimum, the report shall address the impact of the program, the use of any additional positions created at community colleges, professional development training for staff, and funding sources identified for individuals with IDD to build programs at community colleges that support postsecondary trainings and certifications that enable individuals with IDD to engage in competitive, sustainable employment.

SECTION 6.9.(b) Of the recurring funds appropriated in this act to the Community Colleges System Office for the 2023‑2025 fiscal biennium to support increasing program offerings for individuals with IDD pursuant to G.S. 115D‑44, as enacted by this section, the System Office shall establish at least two statewide positions for program support, provide professional development training for college advising staff to assist students with IDD for career pathway exploration and the identification of credentials leading to competitive employment, and explore funding sources to sustain programs for students with IDD.

CAREER ACADEMIES FOR AT‑RISK STUDENTS

SECTION 6.9A.(a) Program Established. – There is established a program for the 2023‑2025 fiscal biennium between Cape Fear Community College (CFCC), New Hanover County Schools, and Pender County Schools to meet the needs of underserved students in seventh through ninth grade through an opportunity for extended time on CFCC's campus in various career and technical education programs. The goals of the program shall include (i) exposing students from underperforming schools and underserved populations to career training opportunities available at CFCC, (ii) guiding students toward successful career outcomes, (iii) providing support services to students, including academic tutoring, academic counseling, personal mentoring, and financial support through financial aid and scholarships, and (iv) increasing graduation and postsecondary outcomes for these students.

SECTION 6.9A.(b) Components of the Program. – CFCC, New Hanover County Schools, and Pender County Schools shall offer a summer career academy program to at‑risk students from each local school administrative unit for a total of up to 300 students in seventh through ninth grade. The career academy program shall introduce students to life on a college campus with the goal of creating a familiarity with and positive experience in the postsecondary environment. Students shall visit two career and technical education programs per day for five consecutive days for two consecutive weeks in different subject areas, such as welding, marine technology and boat building, electrical, culinary, medical assisting, public safety, arts, veterinary assisting, and chemical technology. The career academy program shall include speakers and support for financial aid and scholarship opportunities and an introduction to the Career and College Promise Program.

CFCC shall also hire career liaisons in time‑limited positions for placement in certain middle schools in New Hanover County Schools and Pender County Schools to support at‑risk students. The goal of adding career liaisons to the schools shall be to provide students with exposure to career and technical education opportunities that otherwise would not be available to them.

SECTION 6.9A.(c) Report. – CFCC, in collaboration with New Hanover County Schools and Pender County Schools, shall submit an initial report by October 1, 2024, and annually thereafter while funds are expended under the program, to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the results of the pilot program and the placement of the career liaisons in schools to support at‑risk students, including the number of students who enrolled in Career and College Promise Program pathways following completion of the career academy program and other relevant student outcome data for at‑risk students.

SECTION 6.9A.(d) Carryforward. – The nonrecurring funds appropriated to the Community Colleges System Office in this act for the 2023‑2025 fiscal biennium for the program shall not revert at the end of each fiscal year but shall remain available until expended.

COMMUNITY COLLEGE SYSTEM GOVERNANCE AND AUTHORITY CHANGES

SECTION 6.10.(a) G.S. 115D‑3 reads as rewritten:

§ 115D‑3. Community Colleges System Office; staff; reorganization authority.

(a) The Community Colleges System Office shall be a principal administrative department of State government under the direction of the State Board of Community Colleges, and shall be separate from the free public school system of the State, the State Board of Education, and the Department of Public Instruction. The State Board has authority to adopt and administer all policies, regulations, and standards which it deems necessary for the operation of the System Office.

(a1) ~~The~~ Subject to confirmation by the General Assembly in accordance with G.S. 115D‑3.1, the State Board shall elect a President of the North Carolina ~~System of~~ Community Colleges System who shall serve as chief administrative officer of the Community Colleges System Office. The State Board shall use the following process to elect a President:

(1) At least three final candidates shall be submitted to the full State Board from which the full State Board shall make its election.

(2) The State Board shall conduct a vote on the election of the President, and the candidate who receives a majority of votes of the entire State Board shall be elected President.

(a2) The compensation of this position shall be fixed by the State Board from funds provided by the General Assembly in the Current Operations Appropriations Act.

(a3) The President shall be assisted by such professional staff members as may be deemed necessary to carry out the provisions of this Chapter, who shall be elected by the State Board on nomination of the President. The compensation of the staff members elected by the Board shall be fixed by the State Board of Community Colleges, upon recommendation of the President of the Community ~~College~~ Colleges System, from funds provided in the Current Operations Appropriations Act. These staff members shall include such officers as may be deemed desirable by the President and State Board. Provision shall be made for persons of high competence and strong professional experience in such areas as academic affairs, public service programs, business and financial affairs, institutional studies and long‑range planning, student affairs, research, legal affairs, health affairs and institutional development, and for State and federal programs administered by the State Board. In addition, the President shall be assisted by such other employees as may be needed to carry out the provisions of this Chapter, who shall be subject to the provisions of Chapter 126 of the General Statutes. The staff complement shall be established by the State Board on recommendation of the President to insure that there are persons on the staff who have the professional competence and experience to carry out the duties assigned and to insure that there are persons on the staff who are familiar with the problems and capabilities of all of the principal types of institutions represented in the system. The State Board of Community Colleges shall have all other powers, duties, and responsibilities delegated to the State Board of Education affecting the Community Colleges System Office not otherwise stated in this Chapter.

….

SECTION 6.10.(b) Chapter 115D of the General Statutes is amended by adding a new section to read:

§ 115D‑3.1. General Assembly confirmation of the President.

(a) The State Board shall submit the name of the person elected as President for confirmation to the presiding officers of the Senate and the House of Representatives of the General Assembly on or before the fifteenth day following the election. The General Assembly shall adopt a joint resolution to either (i) confirm or (ii) deny confirmation, subject to the following:

(1) The person elected by the State Board shall not serve as President but may serve as interim‑President until the General Assembly adopts a joint resolution.

(2) If the General Assembly fails to adopt a joint resolution confirming the person by the date that either chamber reaches the thirtieth legislative day following the receipt of the name by the presiding officers, it shall be deemed that the General Assembly has denied confirmation.

(b) A person denied confirmation shall not serve as President or interim‑President.

SECTION 6.10.(c) Chapter 115D of the General Statutes is amended by adding a new section to read:

§ 115D‑10. Limitation on judicial review of State Board actions.

State Board actions affecting a local board of trustees or a person elected as a president or chief administrative officer of an institution under any of the following statutes are not subject to judicial review:

(1) G.S. 115D‑6.

(2) G.S. 115D‑6.5.

(3) G.S. 115D‑19.

SECTION 6.10.(d) G.S. 115D‑20 reads as rewritten:

§ 115D‑20. Powers and duties of trustees.

The trustees of each institution shall constitute the local administrative board of such institution, with such powers and duties as are provided in this Chapter and as are delegated to it by the State Board of Community Colleges. The powers and duties of trustees shall include the following:

(1) To elect a president or chief administrative officer of the institution for such term and under such conditions as the trustees may 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~~ Colleges 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 and reelection of a president or chief administrative officer shall be subject to the approval of the State Board of Community Colleges.

….

SECTION 6.10.(e) G.S. 115D‑2.2 reads as rewritten:

§ 115D‑2.2. State Board of Community Colleges.

(a) The State Board of Community Colleges is established.

(b) The State Board of Community Colleges shall consist of 22 members, as follows:

(1) The Lieutenant Governor or the Lieutenant Governor's designee shall be a member ex officio.

(2) The Treasurer of North Carolina or the Treasurer's designee shall be a member ex officio.

(3) The Commissioner of Labor or the Commissioner's designee shall be a member ex officio.

~~(4)~~ The Governor shall appoint to the State Board four members from the State at large and one member from each of the six Trustee Association Regions defined in G.S. 115D‑62. Each appointment by the Governor shall be for a term of four years and until a successor is appointed and qualifies. Any vacancy occurring among the Governor's appointees before the expiration of term shall be filled by appointment of the Governor. The member appointed to fill a vacancy shall meet the same residential qualification, if any, as the vacating member and shall serve for the remainder of the unexpired term of that member.

(5) The General Assembly shall elect ~~eight~~ 18 members of the State Board from the State at large to a term of four years beginning July 1 of an odd‑numbered year and until a successor is elected and qualifies. The Senate shall elect ~~four~~ nine members and the House of Representatives shall elect ~~four~~ nine members in accordance with subsection (c) of this section.

(6) The person serving as president of the North Carolina Comprehensive Community College Student Government Association shall be an ex officio member of the State Board. If the president of the Association is unable for any reason to serve as the student member of the State Board, then pursuant to the constitution of the Association, the vice‑president of the Association shall serve as the student member of the State Board. Any person serving as the student member of the State Board must be a student in good standing at a North Carolina community college. The student member of the State Board shall have all the rights and privileges of membership, except that the student member shall not have a vote.

(c) At each session of the General Assembly held in an odd‑numbered year, the Senate and the House of Representatives shall elect from a slate of candidates made in each chamber. The slate shall be prepared as provided by resolution in each chamber. If a sufficient number of nominees who are legally qualified are submitted, then the slate of candidates shall list at least twice the number of candidates for the total seats open. All qualified candidates shall compete against all other qualified candidates. All candidates shall submit a statement of economic interest to the State Ethics Commission for review under G.S. 138A‑24.

…

(h) At its first meeting after July 1 of each odd‑numbered year, the State Board shall elect from its membership a ~~chair~~ chair, vice‑chair, and such other officers as it may deem necessary.

(i) The State Board of Community Colleges shall meet at stated times established by the State Board, but not less frequently than 10 eight times a year. The State Board of Community Colleges shall also meet with the State Board of Education and the Board of Governors of The University of North Carolina at least once a year to discuss educational matters of mutual interest and to recommend to the General Assembly such policies as are appropriate to encourage the improvement of public education at every level in this State; these joint meetings shall be hosted by the three Boards according to the schedule set out in G.S. 115C‑11(b1). Special meetings of the State Board may be set at any regular meeting or may be called by the chair. A majority of the qualified members of the State Board shall constitute a quorum for the transaction of business.

….

SECTION 6.10.(f) G.S. 115D‑2.2, as amended by this section, reads as rewritten:

§ 115D‑2.2. State Board of Community Colleges.

…

(b) The State Board of Community Colleges shall consist of 22 19 members, as follows:

~~(1)~~ ~~The Lieutenant Governor or the Lieutenant Governor's designee shall be a member ex officio.~~

~~(2)~~ ~~The Treasurer of North Carolina or the Treasurer's designee shall be a member ex officio.~~

~~(3)~~ ~~The Commissioner of Labor or the Commissioner's designee shall be a member ex officio.~~

(5) The General Assembly shall elect 18 members of the State Board from the State at large to a term of four years beginning July 1 of an odd‑numbered year and until a successor is elected and qualifies. The Senate shall elect nine members and the House of Representatives shall elect nine members in accordance with subsection (c) of this section.

…

(d) When a vacancy ~~occurs among the members elected by the two chambers of the General Assembly,~~ occurs, the chair of the State Board shall inform the chamber that originally elected the vacating ~~member~~ member. The chamber shall elect a person to fill the vacancy in the same manner as required for election under subsection (c) of this section when the General Assembly next convenes. The election shall be for the remainder of the unexpired term.

…

~~(j)~~ ~~Whenever any vacancy shall occur in the appointed or elected membership of the State Board, the chair shall inform the appropriate appointing or electing authority of the vacancy.~~

(k) The State Board of Community Colleges may declare vacant the office of an ~~appointed or~~ elected member who does not attend three consecutive scheduled meetings without justifiable excuse. The chair of the State Board shall notify the ~~appropriate appointing or electing authority~~ chamber that elected the member of any vacancy.

SECTION 6.10.(g) Notwithstanding G.S. 115D‑2.2, as amended by this section, the current members serving on the State Board as of the effective date of this section shall serve the remainder of their terms.

SECTION 6.10.(h) When the State Board of Community Colleges elects a chair in accordance with G.S. 115D‑2.2(h) in 2025, the chair shall be elected from the members elected by the Senate. When the State Board of Community Colleges elects a chair in accordance with G.S. 115D‑2.2(h) in 2027, the chair shall be elected from the members elected by the House of Representatives.

SECTION 6.10.(i) Notwithstanding G.S. 115D‑2.2, as amended by this section, the General Assembly shall elect members in 2023 as follows:

(1) The House of Representatives shall elect one member to a term ending June 30, 2025.

(2) The Senate shall elect two members to terms ending June 30, 2025.

SECTION 6.10.(j) For elections to terms beginning July 1, 2025, and every four years thereafter, the following applies:

(1) The House of Representatives shall elect four members.

(2) The Senate shall elect five members.

SECTION 6.10.(k) For elections to terms beginning July 1, 2027, and every four years thereafter, the following applies:

(1) The House of Representatives shall elect five members.

(2) The Senate shall elect four members.

SECTION 6.10.(l) G.S. 115D‑62 is repealed.

SECTION 6.10.(m) G.S. 115D‑79 reads as rewritten:

§ 115D‑79. Open meetings.

All official meetings of the State Board of Community Colleges and of local boards of trustees shall be open to the public in accordance with the provisions of ~~G.S. 143‑318.1 through 143‑318.7.~~G.S. 143‑318.9.

SECTION 6.10.(n) G.S. 115D‑12 reads as rewritten:

§ 115D‑12. Each institution to have board of trustees; selection of trustees.

(a) Each community college established or operated pursuant to this Chapter shall be governed by a board of trustees consisting of 13 members, or of additional members if selected according to the special procedure prescribed by the third paragraph of this subsection, who shall be selected by the following agencies. No member of the General Assembly may be appointed to a local board of trustees for a community college.composed as follows:

(1) Eight trustees appointed by the General Assembly under G.S. 120‑121. The General Assembly shall appoint two members annually. One member shall be appointed upon the recommendation of the Speaker of the House of Representatives and one member shall be appointed upon the recommendation of the President Pro Tempore of the Senate.

(2) Four trustees elected by the board of commissioners of the county in which the main campus of the institution is located, one of whom may be a county commissioner. In addition, each board of commissioners of any other county in the administrative area that provides plant funds to the institution shall elect two additional trustees to the board, one of whom may be a county commissioner. A board of commissioners may delegate the election of one or more of its trustees to a board of education of a local school administrative unit located in the administrative area of the institution. If the board delegates its authority to elect, the following conditions apply:

a. The delegation shall expire at the end of the term of office of the trustee but may be renewed by the board of commissioners.

b. If an institution's administrative area contains more than one local school administrative unit, the board of commissioners may delegate the election to the boards of education of those units jointly.

c. If the delegated election has not occurred by May 1 of the year in which the election is to be made, the board of commissioners shall revoke the delegation and shall elect the trustee or trustees.

(3) The president of the student government or the chair of the executive board of the student body of each community college may be an ex officio nonvoting member if the board of trustees of the community college agrees.

(a1) No member of the General Assembly shall be a trustee of a local board of trustees.

Group One – four trustees, elected by the board of education of the public school administrative unit located in the administrative area of the institution. If there are two or more public school administrative units, whether city or county units, or both, located within the administrative area, the trustees shall be elected jointly by all of the boards of education of those units, each board having one vote in the election of each trustee, except as provided in G.S. 115D‑59. No board of education shall elect a member of the board of education or any person employed by the board of education to serve as a trustee, however, any such person currently serving on a board of trustees shall be permitted to fulfill the unexpired portion of the trustee's current term.

Group Two – four trustees, elected by the board of commissioners of the county in which the institution is located. Provided, however, if the administrative area of the institution is composed of two or more counties, the trustees shall be elected jointly by the boards of commissioners of all those counties, each board having one vote in the election of each trustee. Provided, also, the county commissioners of the county in which the community college has established a satellite campus may elect an additional two members if the board of trustees of the community college agrees. No more than one trustee from Group Two may be a member of a board of county commissioners. Should the boards of education or the boards of commissioners involved be unable to agree on one or more trustees the senior resident superior court judge in the superior court district or set of districts as defined in G.S. 7A‑41.1 where the institution is located shall fill the position or positions by appointment.

~~Group Three – four trustees, appointed by the Governor.~~

Group Four – the president of the student government or the chairman of the executive board of the student body of each community college established pursuant to this Chapter shall be an ex officio nonvoting member of the board of trustees of each said institution.

(b) All trustees shall be residents of the administrative area of the institution for which they are selected or of counties contiguous ~~thereto with the exception of members provided for in subsection (a) of this section, Group Four.~~to the administrative area.

(b1) No person who has been employed full time by the community college within the prior 5 years and no spouse or child of a person currently employed full time by the community college shall serve on the board of trustees of that college.

(c) Vacancies occurring in a seat appointed by the General Assembly shall be filled as provided in G.S. 120‑122. Vacancies occurring in ~~any group for whatever reason~~ a seat elected by a board of county commissioners shall be filled for the remainder of the unexpired term ~~by the agency or agencies authorized to select trustees of that group and~~ in the manner in which regular selections are made. Should the selection of a trustee not be made by the agency or agencies having the authority to do so within 60 days after the date on which a vacancy occurs, whether by creation or expiration of a term or for any other reason, the Governor shall fill the vacancy by appointment for the remainder of the unexpired term.

SECTION 6.10.(o) G.S. 115D‑13 reads as rewritten:

§ 115D‑13. Terms of office of trustees.

(a) The regular terms of trustees appointed in 1981 and trustees appointed in 1987 shall be extended for one year. The term of one or more trustees, as appropriate, elected pursuant to G.S. 115D‑12 may be extended for one year so that these terms will be staggered, unless they are already staggered.

(b) Except for the one year extensions of terms set forth in subsection (a) of this section, and for the ex officio member, as the terms of trustees currently in office expire, their successors shall be appointed for four‑year terms.

(d) Each local board of trustees shall submit the following to the Legislative Library of the General Assembly by August 1 annually:

(1) The name and address of each trustee.

(2) The county of residence of each trustee.

(3) The appointing or electing entity of each trustee.

(4) If a trustee is filling a vacancy, the name of the trustee replaced.

(5) The date each trustee's term begins.

(6) The date each trustee's term ends.

SECTION 6.10.(p) Notwithstanding G.S. 115D‑12, as amended by this section, the current members serving on a board of trustees of a community college as of the effective date of this section shall serve the remainder of their terms. Thereafter, as terms expire, the members shall be appointed or elected in accordance with G.S. 115D‑12, as amended by this section. When a vacancy occurs in a seat that was elected by a local board of education or appointed by the Governor, the vacancy shall be filled as provided in G.S. 120‑122 and as follows:

(1) If the vacancy occurs in a term expiring in an odd‑numbered year, and the General Assembly is not in a regular or extra session at the time of the vacancy, the Governor shall consult with the Speaker of the House of Representatives before making the appointment as required by G.S. 120‑122.

(2) If the vacancy occurs in a term expiring in an even‑numbered year, and the General Assembly is not in a regular or extra session at the time of the vacancy, the Governor shall consult with the President Pro Tempore of the Senate before making the appointment as required by G.S. 120‑122.

(3) Notwithstanding G.S. 120‑122, after receiving the written recommendation for the appointment to fill the vacancy, the Governor shall appoint the person recommended within 30 days and shall not reject the recommendation. Upon the expiration of the term, the seat shall be filled in accordance with G.S. 115D‑12, as amended by this section.

SECTION 6.10.(q) The following are repealed:

(1) S.L. 1997‑12.

(2) Section 2 of S.L. 1999‑60.

(3) Section 2 of S.L. 2011‑175.

(4) S.L. 2014‑73.

(5) S.L. 2015‑12.

(6) Section 1 of S.L. 2015‑167.

(7) S.L. 2015‑243.

(8) Section 2 of S.L. 2015‑252.

(9) S.L. 2018‑15.

(10) S.L. 2020‑20.

(11) Section 1 of S.L. 2021‑52.

(12) Section 5 of S.L. 2021‑102.

(13) S.L. 2022‑10.

SECTION 6.10.(r) Notwithstanding G.S. 115D‑12(a)(2), as amended by this section, for the Mayland Community College Board of Trustees, the Avery County Board of Commissioners, Mitchell County Board of Commissioners, and Yancey County Board of Commissioners shall each elect two trustees. Each board of commissioners may elect up to one commissioner as a trustee.

SECTION 6.10.(s) Notwithstanding G.S. 115D‑12(a)(2), as amended by this section, for the South Piedmont Community College Board of Trustees, the Union County Board of Commissioners shall elect three trustees, one of whom may be a county commissioner, and the Anson County Board of Commissioners shall elect two trustees, one of whom may be a county commissioner.

SECTION 6.10.(t) Notwithstanding G.S. 115D‑12(a)(2), as amended by this section, for the Vance‑Granville Community College Board of Trustees, the following shall be the trustees elected by the boards of county commissioners in the administrative area of the institution:

(1) Four trustees elected by the Vance County Board of Commissioners, one of whom may be a county commissioner.

(2) Three trustees elected by the Granville County Board of Commissioners, one of whom may be a county commissioner.

(3) Two trustees elected by the Franklin County Board of Commissioners, one of whom may be a county commissioner.

(4) One trustee elected by the Warren County Board of Commissioners, who may be a county commissioner.

SECTION 6.10.(u) Subsection (f) of this section is effective July 1, 2027. The remainder of this section is effective the date this act becomes law.

VOCATIONAL REHABILITATION PILOT PROGRAM

SECTION 6.11.(a) Program; Purpose. – The State Board of Community Colleges shall establish the Vocational Rehabilitation Pilot Program (Program) for the 2023‑2024 to 2025‑2026 academic years. The purpose of the Program is to provide support services to community college students with intellectual and developmental disabilities to help the students reach their goals for employment and independence without duplicating the existing vocational support network.

SECTION 6.11.(b) Use of Funds; Selection. – Community colleges may apply to the State Board of Community Colleges to participate in the Program. The State Board, in consultation with the Division of Vocational Rehabilitation Services of the Department of Health and Human Services (DVR), shall select community colleges to participate in the Program. As part of the Program, the Community Colleges System Office shall contract with DVR to place student counselors at selected community colleges in the State. Funds provided for this purpose may be used to meet any applicable federal matching requirements for student counselors and for costs related to administration of the Program.

SECTION 6.11.(c) Report. – No later than March 15, 2024, and each year thereafter in which funds are expended during the Program, the State Board of Community Colleges, in consultation with DVR, shall report on the impact of the Program on participants, including at least the following information:

(1) The mental health and well‑being of participants.

(2) Job placements of participants.

SECTION 6.11.(d) Funds. – The nonrecurring funds appropriated in this act to the Community Colleges System Office for the 2023‑2024 fiscal year for the Program shall not revert at the end of the 2023‑2024 fiscal year but shall remain available until the end of the 2025‑2026 fiscal year.

REVISE MULTICAMPUS CENTER REQUIREMENTS

SECTION 6.12. G.S. 115D‑5(o) reads as rewritten:

(o) All multicampus centers approved by the State Board of Community Colleges shall receive funding under the same formula. The State Board of Community Colleges shall not approve any additional multicampus centers without identified recurring sources of funding. A community college facility shall be considered a multicampus center if it meets all of the following criteria:

(1) Is at least 4 miles away from the main campus of the community college and other multicampus center locations.

(2) Any other criteria established by the State Board.

AUTHORIZE THE STATE BOARD OF COMMUNITY COLLEGES TO IMPLEMENT AN IN‑STATE TUITION PILOT PROGRAM FOR RESIDENTS OF CERTAIN GEORGIA COUNTIES

SECTION 6.13.(a) Pilot Program. – Notwithstanding G.S. 115D‑39(a) and G.S. 116‑143.1, the State Board of Community Colleges shall establish and implement an in‑State tuition pilot program for certain border counties in the State of Georgia. The pilot program shall allow Tri‑County Community College to offer in‑State tuition to up to 100 residents of the following Georgia counties:

(1) Fannin County.

(2) Rabun County.

(3) Towns County.

(4) Union County.

No out‑of‑state student eligible for in‑State tuition due to this pilot program shall displace a North Carolina resident eligible for in‑State tuition who is seeking to enroll in a program offered by Tri‑County Community College.

SECTION 6.13.(b) Report. – By September 30, 2024, and annually thereafter for the duration of the pilot program, the State Board of Community Colleges shall report the results of the pilot program to the Joint Legislative Education Oversight Committee and the Fiscal Research Division of the General Assembly. This report shall include information about the number of out‑of‑state students who enrolled at the in‑State tuition rate, the programs that these students chose, any programs unavailable to these students due to potential displacement of North Carolina residents, any indicators of increased economic development as a result of this program, and the number of out‑of‑state students enrolled who do not qualify for the in‑State tuition rate.

SECTION 6.13.(c) Expiration. – The pilot program required by this section shall expire at the end of the 2026‑2027 academic year.

SECTION 6.13.(d) Effective Date. – This section is effective when this act becomes law and applies beginning with the 2023‑2024 academic year.

PART VII. Public Instruction

CODIFY FUNDING FOR CHILDREN WITH DISABILITIES

SECTION 7.1. Part 1F of Article 9 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑111.05. Funding for children with disabilities.

To the extent funds are made available for this purpose, the State Board shall allocate funds for children with disabilities to each local school administrative unit on a per child basis. Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities or (ii) thirteen percent (13%) of its allocated average daily membership in the local school administrative unit for the current school year.

CODIFY FUNDING FOR ACADEMICALLY OR INTELLECTUALLY GIFTED STUDENTS

SECTION 7.2.(a) Article 9B of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑150.9. Funding for academically or intellectually gifted students.

To the extent funds are made available for this purpose, the State Board shall allocate funds for academically or intellectually gifted students on a per child basis. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its allocated average daily membership for the current school year, regardless of the number of students identified as academically or intellectually gifted in the unit.

SECTION 7.2.(b) Prior to determining the allocation of funds for the 2024‑2025 school year, the Department of Public Instruction shall develop a uniform definition for academically or intellectually gifted student to be used throughout the State.

CODIFY BOILERPLATE

SECTION 7.3. Chapter 115C of the General Statutes is amended by adding a new Article to read:

Article 32F.

Supplemental School Funding.

§ 115C‑472.17. Supplemental funding in low‑wealth counties.

(a) Use of Funds for Supplemental Funding. – To the extent funds are made available for this purpose, 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.

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

(3) 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.

(4) 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.

(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.

(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%).

(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.

(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.

(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.

(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. 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.

(h) Counties Containing a Base of the Armed Forces. – Notwithstanding any other provision of this section, counties containing a base of the Armed Forces of the United States that have an average daily membership of more than 17,000 students shall receive whichever is the higher amount in each fiscal year as follows: either the amount of supplemental funding the county received as a low‑wealth county in the 2012‑2013 fiscal year or the amount of supplemental funding the county is eligible to receive as a low‑wealth county pursuant to the formula for distribution of supplemental funding under the other provisions of this section.

(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).

(j) Reports. – 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.

(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.

§ 115C‑472.18. Small county school system supplemental funding.

(a) Allotment Schedule. – Except as otherwise provided in subsection (c) of this section, each eligible county school administrative unit shall receive a dollar allotment according to the following schedule, on the basis of allotted ADM for the county school administrative unit, to the extent funds are made available for this purpose:

Allotted ADM Small County Allotment

0‑1,300 $1,820,000

1,301‑1,700 $1,774,700

1,701‑2,000 $1,729,400

2,001‑2,300 $1,684,100

2,301‑2,600 $1,638,800

2,601‑2,800 $1,593,500

2,801‑3,300 $1,548,200

(b) Phase‑Out Provision. – If a local school administrative unit becomes ineligible for funding under the schedule in subsection (a) of this section, 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 school administrative unit becomes ineligible.

Allotments for eligible local school administrative units under this subsection shall not be reduced in any fiscal year by more than twenty percent (20%) of the amount received during the fiscal year when the local school administrative unit became ineligible to receive funds under this section. 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.

(c) 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. 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.

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

(d) Reports. – 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.

(e) 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).

§ 115C‑472.19. Disadvantaged student supplemental funding.

(a) To the extent funds are made available for this purpose, funds appropriated 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.

(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 that received 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 Article.

(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.

RECLASSIFY DPI POSITIONS

SECTION 7.4.(a) Notwithstanding G.S. 143C‑6‑4, the Department of Public Instruction shall reclassify at least the following full‑time equivalent positions within the Department:

(1) One position to be a teaching compensation and advanced teaching roles consultant.

(2) One position to be a Read to Achieve Charter School Coordinator.

(3) One position to be a Director of American Indian Education Services.

SECTION 7.4.(b) In making the changes identified in subsection (a) of this section, the Department of Public Instruction shall not do either of the following:

(1) Reduce funding for any of the following:

a. The State Public School Fund, including for the following residential schools:

1. The Eastern North Carolina School for the Deaf.

2. The North Carolina School for the Deaf.

3. The Governor Morehead School.

b. Any budget expansion item funded by an appropriation to the Department of Public Instruction by this act for the 2023‑2025 fiscal biennium.

(2) Transfer from or reduce funding or positions for any of the following:

a. Communities in Schools of North Carolina, Inc.

b. Teach for America, Inc.

c. Beginnings for Parents of Children Who are Deaf or Hard of Hearing, Inc.

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

e. The North Carolina School Connectivity Program.

f. The North Carolina Center for the Advancement of Teaching.

g. The Schools That Lead Program.

h. The Center for Safer Schools.

REQUIRED TRAINING TO COUNT TOWARD CONTINUING EDUCATION UNITS

SECTION 7.5.(a) G.S. 115C‑270.30 reads as rewritten:

§ 115C‑270.30. Licensure renewal.

…

(b) Teacher Licensure Renewal. – Rules for continuing licensure for teachers shall include the following:

(1) For all teachers, at least eight continuing education credits with at least three credits required in a teacher's academic subject area.

(2) For elementary school teachers, at least three continuing education credits related to literacy. Literacy renewal credits shall include evidence‑based assessment, diagnosis, and intervention strategies for students not demonstrating reading proficiency. Oral language, phonemic and phonological awareness, phonics, vocabulary, fluency, and comprehension shall be addressed in literacy‑related activities leading to license renewal for elementary school teachers.

(2a) For all teachers, hours spent attending mandatory training programs shall contribute toward the calculation for continuing education credits if all of the following apply:

a. The mandatory training program is required by State law or by a local board of education as a condition of employment.

b. The teacher has otherwise met any applicable requirements for literacy renewal credits, credits required in a teacher's academic subject area, digital teaching or learning, or other licensure renewal requirements adopted by the State Board pursuant to this section.

…

(c) License Renewal Rules Review. – The rules for licensure renewal shall be reviewed at least once every five years by the State Board to do the following:

…

(3) Integrate digital teaching and learning into the requirements for licensure renewal. The State Board of Education shall not require the completion of continuing education credits solely related to digital teaching and learning but may require completion of up to two continuing education credits that include pedagogy on digital teaching and learning as a component of a general or content‑specific continuing education credit.

SECTION 7.5.(b) This section is effective when it becomes law and applies to licenses renewed on or after that date.

WEIGHTED FUNDING FOR EC STUDENTS

SECTION 7.7. The Department of Public Instruction shall develop a model, based on the study conducted pursuant to Section 7.44 of S.L. 2021‑180, for funding children with disabilities services on the basis of the reported cost of the services provided. The Department shall report to the Joint Legislative Education Oversight Committee by January 15, 2024, on the model of funding developed pursuant to this section and a comparison by public school unit of funds provided under the existing model and the model developed pursuant to this section.

ABOLISH CERTAIN UNFILLED POSITIONS

SECTION 7.12. The following positions vacant for longer than two years are abolished as of July 1, 2023:

(1) 60009659.

(2) 60009654.

(3) 60009651.

(4) 60009667.

The Department may reestablish these or create substantially similar positions as needed within funds available pursuant to G.S. 115C‑546.2(e).

CAREER EXPLORATION AND DEVELOPMENT PLANS

SECTION 7.13.(a) Part 1 of Article 8 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑81.12. Career pathways course.

The State Board shall develop standards for an elective middle school course in which students investigate and learn about career pathways. The standards shall align with the requirements for career development plans under G.S. 115C‑158.10(c) and include a focus on experiential and hands‑on learning.

SECTION 7.13.(b) Article 10 of Chapter 115C of the General Statutes is amended by adding a new Part to read:

Part 1A. Career Development Plans.

§ 115C‑158.10. Career development plans.

(a) All middle and high school students enrolled in a local school administrative unit shall complete a career development plan that meets the requirements of this section. The local board of education shall ensure that students are provided assistance in completion of the plan as well as instruction on how to access that plan throughout the student's enrollment. A student shall not be promoted from seventh grade until a career development plan is created and shall not be promoted from tenth grade until the career development plan is revised. Local boards of education are encouraged to require more frequent revisions as appropriate. Charter schools are encouraged to require participation in career development plans for students in accordance with this section.

(b) Local boards of education shall ensure that career development plans are easily accessible to students and parents and shall provide parents written notice of the initial creation of a career development plan and information on how to access the plan.

(c) The State Board of Education shall adopt rules establishing minimum requirements for career development plans and shall require local boards of education to provide access to all career development plans through a designated electronic application. Career development plans shall include at least the following:

(1) Self‑assessment of the student's aptitudes, skills, values, personality, and career interests.

(2) Exploration and identification of pathways for careers aligned with the student's self‑assessment that include the following for each career:

a. Identification of needed education, training, and certifications.

b. Information on the most cost‑efficient path to entry.

c. Opportunities within the school setting to explore and prepare for the career.

(3) Alignment of academic courses and extracurricular activities with the student's identified career interests, including the following:

a. Inventory of aligned courses in middle and high school in grades six through 10, and development of best strategies for course selection in grades 11 and 12 to achieve identified career interests, including courses that may lead to college credit.

b. Available record of the following:

1. Completed Advanced Placement, International Baccalaureate, Cambridge Advanced International Certificate of Education (AICE), and dual‑enrollment courses that may lead to college credit in high school.

2. Extracurricular activities.

3. Awards and recognitions.

(4) Creation of a career portfolio, which may include items such as the following:

a. Documentation of postsecondary plans.

b. Completion of the Free Application for Federal Student Aid with parental consent.

c. Résumé.

d. Occupational outlook for identified career interests.

SECTION 7.13.(c) G.S. 115C‑218.75 is amended by adding a new subsection to read:

(k) Career Development Plans. – A charter school is encouraged to adopt a policy to require all middle and high school students to complete a career development plan in accordance with G.S. 115C‑158.10.

SECTION 7.13.(d) The State Board of Education shall establish a pilot of at least 20 local school administrative units during the 2023‑2024 school year to develop the plan requirements and professional development necessary for successful statewide implementation of career development plans in the 2024‑2025 school year. The State Board of Education shall direct the Department of Public Instruction to develop and provide a career development plan electronic application to local boards of education and participating charter schools no later than the 2024‑2025 school year that will provide access for all students and parents to the student's career development plan and will integrate with career information available through other State agencies.

SECTION 7.13.(e) The Department of Public Instruction and the local boards of education, as appropriate, shall provide or cause to be provided, prior to the start of the 2024‑2025 school year, curriculum content for the course required in subsection (a) of this section and professional development to ensure that the intent and provisions of this section are carried out.

SECTION 7.13.(f) Subsections (a), (b), (c), and (e) of this section become effective beginning with the 2024‑2025 school year. The remainder of this section becomes effective July 1, 2023.

REMAINING ESSER FUNDS FOR VARIOUS PROGRAMS

SECTION 7.15.(a) Section 2.1 of S.L. 2023‑11 is repealed.

SECTION 7.15.(b) Notwithstanding any provision of law to the contrary, the Department of Public Instruction shall use funds provided pursuant to Section 3.5(a)(10) of S.L. 2021‑25, as amended by S.L. 2021‑180, for the following purposes in response to the COVID‑19 pandemic:

(1) Up to four hundred thousand dollars ($400,000) and any remaining available funds appropriated for the purpose provided in Section 3.5(a)(23) of S.L. 2021‑25, as amended by S.L. 2021‑180, to continue to provide options for students outside traditional classroom instruction through the 2024‑2025 fiscal year. The Department shall transfer these funds to the North Carolina Hospitality Education Foundation (Foundation) to develop or continue programs in CTE with a focus on developing critical skills necessary for students to succeed in the hospitality sector that received funds pursuant to Section 3.5(a)(23) of S.L. 2021‑25, as amended by S.L. 2021‑180. The Foundation shall use the funds to support instructor and student training and testing in public school units and increase the State's skilled workforce in the hospitality sectors.

(2) Up to three hundred thousand dollars ($300,000) to contract with JFL ENTERPRISES, INC., to continue the Failure Free Reading program created by Section 3.5(a)(26) of S.L. 2021‑25, as enacted by S.L. 2021‑180, to address learning loss due to the COVID‑19 pandemic. Of the funds appropriated from the General Fund to the Department of Public Instruction, the sum of one million seven hundred thousand dollars ($1,700,000) shall be used to assist in continuing this program. Any school that was eligible to receive funds to participate in the Failure Free Reading program under Section 3.5(a)(26) of S.L. 2021‑25, as enacted by S.L. 2021‑180, shall be eligible to receive funds pursuant to this subdivision.

(3) Up to two million one hundred thousand dollars ($2,100,000) for the Department to contract with Liminex, Inc., d/b/a GoGuardian, to provide technology and services to mitigate cyberbullying, monitor student internet activity, and assist with suicide prevention services.

(4) Up to two million two hundred thousand dollars ($2,200,000) for the Department to contract with Gaggle.Net, Inc., to provide technology and services to mitigate cyberbullying, monitor student internet activity, and assist with suicide prevention services.

(5) Up to one million dollars ($1,000,000) to provide funds for the Educational and Competitive After‑School Robotics Grant Program established in Section 7.23 of this act.

(6) Up to one million dollars ($1,000,000) to continue to contract with Betabox, Inc., to mitigate learning loss in the areas of science, technology, engineering, and mathematics by providing students in public school units with experiences, curriculum, instructional coaching, hands‑on equipment, and other needed resources.

(7) Up to one million dollars ($1,000,000) to Communities in Schools of North Carolina, Inc., to continue to provide services, expand services, or provide for the extension of nine‑month contracts for its employees for the purpose of providing assistance and enrichment activities over the summers for students in kindergarten through grade 12 experiencing learning loss and negative impacts from the COVID‑19 pandemic.

(8) Up to one million dollars ($1,000,000) to provide funds for the 2023‑2024 fiscal year for the National Board for Professional Teaching Standards certification participation fee grant program established pursuant to G.S. 115C‑296.2A.

ONLINE DIGITAL INSTRUCTION

SECTION 7.17. Subsection (c) of Section 7.23K of S.L. 2017‑57 reads as rewritten:

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~~ 2023‑2024 fiscal year, the Department shall use up to ~~one million eight hundred thousand dollars ($1,800,000)~~ four million dollars ($4,000,000) to continue to contract with Learning.com to implement the requirements of this section.

CTE GRANTS FOR HOMEBUILDING PROGRAMS

SECTION 7.19.(a) Of the funds appropriated to the Department of Public Instruction in this act from the General Fund, the Department shall use up to two hundred thousand dollars ($200,000) in recurring funds to provide grants to assist public school units with program costs associated with CTE programs related to homebuilding. The Department of Public Instruction shall permit high schools within public school units to use the U.S. Department of Labor approved Pre‑Apprenticeship Certificate Training (PACT) program, developed by the Home Builders Institute as an approved curriculum for CTE programs. A public school unit or a regional partnership of more than one public school unit may apply to receive funds. When awarding grants under this subsection, the Department shall prioritize public school units (i) located, in whole or in part, in a county with at least one local school administrative unit that received low‑wealth supplemental funding in the previous fiscal year and (ii) that have a high population of at‑risk students or students with disabilities.

SECTION 7.19.(b) The Department shall create and make available an application for grants under this section no later than 30 days after this bill becomes law. The Department shall make the application available for both years of the 2023‑2025 fiscal biennium. Applicants shall submit their application to receive grant funds to the Department no later than 60 days after the application is made available for submission for each school year of the 2023‑2025 fiscal biennium. The Department shall approve or deny each application within 30 days of receipt.

SECTION 7.19.(c) All recipients of grants under this section for each school year of the biennium shall submit a report to the Department no later than October 15 of each year of the biennium on the outcomes of any programs funded by grants received under this section, including data collection methods for reporting on student outcomes, impacts of the program, and use of State funds. The Department shall then submit a report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the overall outcomes of the grant programs no later than December 15 of each year of the 2023‑2025 fiscal biennium.

DPI FUNDING IN ARREARS

SECTION 7.20.(a) The Department of Public Instruction shall develop a model to fund public school units whose funding is based on average daily membership (ADM) to be based on the actual ADM from the prior school year instead of projections for the upcoming school year. The Department shall include in the model a method to account for newly formed charter schools to ensure the charter schools receive adequate funding to operate before prior year ADM data is available or representative of the student population. The Department shall propose technical adjustments for public school funding to the State Board of Education for approval before submitting the model to the Director of the Budget, pursuant to G.S. 143C‑3‑3. The Department shall also submit the model to the Fiscal Research Division no later than February 15, 2024. The technical adjustments shall include a list of any laws that would need to be adjusted or repealed to allow for the new funding model to be implemented as well as a comparison of funding received under the old model and the recommended new model, sorted by public school unit.

SECTION 7.20.(b) Beginning with the 2024‑2025 school year, the Department of Public Instruction shall distribute funds to public school units whose funding is based on ADM based on the actual ADM from the prior school year in accordance with the model developed pursuant to subsection (a) of this section. The Department shall provide funds from the ADM Contingency Reserve to fund public school units whose actual ADM for the current school year is higher than the actual ADM from the prior school year.

SECTION 7.20.(c) Section 7.15(b) of S.L. 2007‑323 is repealed.

SECTION 7.20.(d) Subsections (b) and (c) of this section become effective July 1, 2024. The remainder of this section is effective when it becomes law.

INCREASING ENGAGEMENT IN STEM

SECTION 7.22.(a) Program; Purpose. – The Superintendent of Public Instruction shall establish the Increasing Engagement in STEM Program (Program) for the 2023‑2024 fiscal year. The purpose of the Program is to provide grant funds to public school units to engage in experiential science, technology, engineering, and math (STEM) education programs.

SECTION 7.22.(b) Grant Application Time Line. – The Superintendent shall develop and publish an application for the Program on or before November 15, 2023. Public school units may submit applications for this grant until January 15, 2024. The Superintendent shall select recipients of the grants by February 15, 2024.

SECTION 7.22.(c) Grant Applications. – The application created by the Superintendent shall require a plan of how the public school unit would use grant funds to increase STEM engagement of sixth, seventh, and eighth grade students. Applicant plans shall include the following:

(1) Evidence that the plan uses high‑quality instruction methods and includes research‑based best practices in the area of STEM education to further the purpose of the Program.

(2) How grant funds will be used to further the purpose of the Program. Allowable uses of funds include, but are not limited to, the following:

a. Stipends for teachers who participate with the Program.

b. Partnering with third‑party vendors to provide services or host competitions that further the purpose of the Program.

(3) How the public school unit would sustain their plan beyond the end of the grant period.

(4) Any other factors or criteria the Superintendent deems appropriate to advance the purpose of the Program.

SECTION 7.22.(d) Grant Recipients. – After reviewing the submitted applications, the Superintendent shall select applicants to receive grants for the Program. The Superintendent shall determine the size of grants awarded to each public school unit while ensuring a distribution of grant funds to each of the various sizes of public school units referenced in subdivision (3) of this subsection. When selecting applicants to receive grants, the Superintendent shall adhere to the following criteria:

(1) The total number of recipients shall not exceed 20 public school units.

(2) Recipients shall reflect the geographic diversity of the State.

(3) Recipients shall reflect the population diversity of public school units in the State by selecting recipients from the following:

a. Up to five public school units consisting of no more than one school.

b. Up to five units with an average daily membership from the previous school year of 4,000 students or fewer.

c. Up to five units with an average daily membership from the previous school year of between 4,001 and 20,000 students.

d. Up to five units with an average daily membership from the previous school year of 20,001 students or greater.

If there are fewer than five applicants in any of the categories listed in subdivision (3) of this subsection, the Superintendent may, in the Superintendent's discretion, award additional grants to applicants from other categories.

SECTION 7.22.(e) Initial Report. – The Superintendent of Public Instruction shall submit a report on the Program to the Joint Legislative Education Oversight Committee by December 15, 2024. The report shall include the following:

(1) A list of public school units that applied for grants.

(2) A list of public school units that received grants.

(3) A summary of how the grant funds were spent on Program activities.

(4) The number and percentage of students enrolled in the school who participated in the Program, including demographic data for participating students.

(5) Student performance data in STEM‑related courses.

(6) How public school units would continue to use grant funds in the future if the Program were to continue beyond the 2023‑2024 school year.

(7) Any recommendations by the Superintendent to modify the Program to be more effective at furthering the purpose of the Program.

SECTION 7.22.(f) Evaluation. – As a condition of receipt of grant funds, a public school unit shall designate both students who complete the grant‑funded activities in the Common Education Data Analysis and Reporting System and a matched set of students with similar demographic characteristics who did not complete the grant‑funded activities, when possible, in a manner directed by the Department of Public Instruction that will allow future analysis of outcomes for these students related to all of the following:

(1) Enrollment in STEM‑related elective clusters in high school.

(2) Graduation from high school within four years of entry.

(3) Enrollment in a postsecondary STEM‑related major, degree program, or certificate program within three years of high school graduation.

(4) Completion of a postsecondary STEM‑related major, degree program, or certificate program within six years of high school graduation.

(5) Employment in a STEM‑related field within eight years of high school graduation.

The North Carolina Longitudinal Data System shall, in cooperation with all agencies with relevant data, report annually to the Joint Legislative Education Oversight Committee on the outcomes for both groups of students on each available data point beginning December 15, 2028, and ending December 15, 2039.

AFTER‑SCHOOL ROBOTICS GRANT PROGRAM

SECTION 7.23.(a) Program; Purpose. – There is established the Educational and Competitive After‑School Robotics Grant Program (Program). The purpose of the Program shall be to (i) promote evidence‑based, after‑school programs for robotics education and competition and (ii) motivate students to pursue education and career opportunities in science, technology, engineering, and mathematics while building critical life and work‑related skills.

SECTION 7.23.(b) Eligibility. – Any public school unit is eligible to apply to the Department of Public Instruction for a grant to develop an educational and competitive after‑school robotics program with a robotics partner. As used in this subsection, the term robotics partner shall refer to a third‑party entity, such as a nonprofit organization or institution of higher education, approved by the Department of Public Instruction that is able to provide adequate support for an after‑school robotics program. In order to provide adequate support, a robotics partner must meet at least all of the following criteria:

(1) Have a national presence in robotics education and competition.

(2) Provide adequate instruction and programming for students and adult volunteers in (i) robotics education, (ii) project‑based learning, and (iii) competitive robotics.

(3) Promote a safe and equitable social environment.

SECTION 7.23.(c) Applications; Criteria and Guidelines. – No later than November 1, 2023, for the 2023‑2024 fiscal year, and August 1, 2024, for the 2024‑2025 fiscal year, the Department shall develop and publish criteria and guidelines for the application process for the Program in the upcoming school year, including any documentation required to be submitted by the applicants. The Department shall accept applications until December 31, 2023, for the 2023‑2024 fiscal year and September 30, 2024, for the 2024‑2025 fiscal year. Applications shall include, at a minimum, the following information:

(1) Evidence that the applicant has or will be able to establish a relationship with a robotics partner.

(2) A proposed budget for the educational and competitive after‑school robotics program.

SECTION 7.23.(d) Award and Use of Funds. – The Department shall award grants to the selected applicants by January 31, 2024, for the 2023‑2024 fiscal year, and October 31, 2024, for the 2024‑2025 fiscal year. Funds may be used for any of the following purposes:

(1) Establish a relationship with a robotics partner.

(2) Purchase robotics kits.

(3) Provide stipends for coaches.

(4) Make payments associated with participation in a robotics league or robotics competition.

(5) Pay fees incurred as part of the administration of a robotics team.

SECTION 7.23.(e) Reporting. – No later than February 15, 2024, for the 2023‑2024 fiscal year, and October 15, 2024, for the 2024‑2025 fiscal year, the Department shall report the following information from the prior school year to the Joint Legislative Education Oversight Committee and the Fiscal Research Division:

(1) Number and amounts of grants awarded.

(2) Identities of the public school units receiving grants.

(3) Identities of public school units that applied for grants but did not receive one.

(4) The extent to which students participating in after‑school robotics programs funded by the Program experienced measurable improvement in academic performance, if any.

REMOTE CHARTER ACADEMIES

SECTION 7.26.(a) Article 14A of Chapter 115C of the General Statutes is amended by adding a new Part to read:

Part 7. Remote Charter Academies.

§ 115C‑218.120. Remote charter academies.

(a) As part of an application or modification of a charter, a nonprofit may apply to the Review Board for approval to include a remote charter academy that meets the requirements of this Part as part of the nonprofit's charter. A charter that includes a remote charter academy may do any of the following:

(1) Provide only remote instruction to enrolled students served by the charter in accordance with this Part.

(2) Provide remote instruction to students enrolled in the remote charter academy and provide in‑person instruction to other students served by the charter.

(3) Provide enrolled students both remote instruction and in‑person instruction. A student who receives more than half of the student's instruction through remote instruction shall be classified as enrolled in the charter's remote charter academy.

(b) As part of the application or modification of a charter, the nonprofit shall designate which of the following enrollment areas the remote charter academy will use to enroll students:

(1) A statewide remote charter academy that admits students in accordance with G.S. 115C‑218.45.

(2) A regional remote charter academy that, notwithstanding G.S. 115C‑218.45(a), admits students only from the county in which the charter school facility is located and the counties of the State geographically contiguous to that county.

(c) A remote charter academy provides instruction primarily online through a combination of synchronous and asynchronous instruction delivered to students in a remote location outside of the charter school facility. A remote charter academy may include any combination of grade levels.

(d) Notwithstanding G.S. 115C‑84.3, an approved remote charter academy may satisfy the minimum required number of instructional days or hours for the school calendar through remote instruction.

§ 115C‑218.121. Remote charter academy enrollment.

(a) A student shall not be assigned to attend a remote charter academy without parental consent. A board of directors shall require an application to secure parental consent prior to enrollment of a student in a remote charter academy.

(b) A remote charter academy shall identify characteristics for successful remote learning and establish criteria for admittance to a remote charter academy and shall make that information available to parents.

(c) A student may not be denied admission to the remote charter academy solely on the basis that the student is a child with a disability. If a student is admitted to a remote charter academy, that student's IEP team, as defined in G.S. 115C‑106.3, or section 504 team, 29 U.S.C. § 794, must plan for a successful student entry and accommodations necessary to provide for a free appropriate public education in the remote charter academy.

(d) A charter that provides in‑person instruction may reassign a student to in‑person instruction during the school year if the board of directors determines that in‑person instruction would better ensure academic success for that student. The board of directors may delegate this authority to the chief administrator.

§ 115C‑218.122. Remote charter academy requirements.

(a) Except as provided in this Part, a remote charter academy shall meet the same requirements as for other charter schools established by this Article.

(b) A remote charter academy shall provide all of the following to enrolled students:

(1) Any hardware and software needed to participate in the remote charter academy. Students may not be charged rental fees but may be charged damage fees for abuse or loss of hardware or software under rules adopted by the State Board of Education.

(2) Access to a learning management platform that enables monitoring of student performance and school‑owned devices, as well as allows video conferencing and supervised text‑based chat for synchronous communication.

(3) Access to the internet that is available during instructional hours, evenings, and weekends.

(4) Technical support that is available during instructional hours.

(5) For children with an individualized education program (IEP), as defined in G.S. 115C‑106.3, or a section 504 plan, 29 U.S.C. § 794, adaptive or assistive devices, transportation, and in‑person services as required by that program or plan.

(c) A remote charter academy may require students to attend in person to fulfill State‑mandated student assessments. A remote charter academy may conduct optional in‑person meetings between students and instructors or parents and instructors at a charter school facility.

(d) The employees of a remote charter academy shall meet the same licensure and evaluation requirements as required by G.S. 115C‑218.90. The remote charter academy shall ensure sufficient digital teaching and learning support staff, including, at a minimum, the following:

(1) An instructional technology facilitator.

(2) A school library media coordinator.

(3) A data manager.

(4) Sufficient remote technicians to ensure technical support throughout the instructional day for staff and students.

§ 115C‑218.123. Remote charter academy approval process.

(a) A nonprofit seeking to provide a remote charter academy shall submit to the Review Board as part of the application for approval or modification of a charter a plan that provides for the following:

(1) Whether the enrollment area of the remote charter academy will be statewide or regional.

(2) The range of grades for which the remote charter academy will offer courses.

(3) The method by which the remote charter academy will monitor calendar compliance, enrollment, daily attendance, course credit accrual, progress toward graduation, and course completion.

(4) Hardware, software, and learning management platforms that support online learning.

(5) The measures used to ensure that both synchronous and asynchronous remote instruction time, practice, and application components support learning growth that continues toward mastery of student achievement goals for the charter's educational program.

(6) The professional development that will be provided to those teaching in the remote charter academy related to the pedagogy of providing remote instruction.

(7) The identified characteristics for successful remote learning and criteria for admission to the remote charter academy. The board of directors shall identify the means by which information will be communicated to the parents and legal guardians of prospective applicants and current enrollees about the remote charter academy and those characteristics and criteria to allow for informed decisions about enrollment.

(8) Any school nutrition services or transportation services that will be provided to students.

(b) The Review Board shall review and approve a charter or charter modification for the creation of a remote charter academy that meets the requirements established in this Part for a term of five years. The Review Board shall approve a minimum of two statewide remote charter academies that meet the qualifications of this Part for operation beginning with the 2026‑2027 school year and thereafter.

§ 115C‑218.124. Operation and renewal of remote charter academies.

(a) Each approved remote charter academy shall adhere to the plan submitted to and approved by the Review Board or the State Board of Education as part of the approved charter unless the board of trustees obtains a charter modification.

(b) Each approved remote charter academy shall receive a school code. A nonprofit that has a school code for in-person instruction in addition to a school code for a remote charter academy may provide all financial reporting for both school codes jointly in a form directed by the Department of Public Instruction.

(c) A nonprofit may apply for renewal of the remote charter academy for additional terms of five years. The Review Board shall consider compliance with the requirements of this Part and success of the remote charter academy in the prior five years in determining whether to approve a request for renewal of a remote charter academy.

§ 115C‑218.125. Evaluation.

The State Board of Education shall evaluate the success of remote charter academies approved under this Part. Success shall be measured by school performance scores and grades, retention rates, attendance rates, and, for grades nine through 12, high school completion and dropout rates. The Board shall report by November 15 of each year to the Joint Legislative Education Oversight Committee on the evaluation of these academies and on any recommended statutory changes.

SECTION 7.26.(b) G.S. 115C‑84.3(c) reads as rewritten:

(c) Except as provided in Part 7 of Article 14A or Part 3A of Article 16 of this Chapter or subsection (b) of this section, a public school unit shall not use remote instruction to satisfy the minimum required number of instructional days or hours for the school calendar.

SECTION 7.26.(c) G.S. 115C‑218, 115C‑218.1, 115C‑218.2, 115C‑218.3, 115C‑218.5, 115C‑218.6, 115C‑218.7, 115C‑218.8, and 115C‑218.9 are codified into Part 1 of Article 14A of Chapter 115C of the General Statutes, Governance and Applications for Charter Schools. G.S. 115C‑218.10, 115C‑218.15, 115C‑218.20, 115C‑218.25, 115C‑218.30, 115C‑218.35, 115C‑218.37, 115C‑218.40, 115C‑218.42, 115C‑218.45, 115C‑218.50, 115C‑218.55, 115C‑218.60, 115C‑218.65, 115C‑218.70, 115C‑218.75, 115C‑218.80, 115C‑218.85, and 115C‑218.90 are codified into Part 2 of Article 14A of Chapter 115C of the General Statutes, Operation of Charter Schools. G.S. 115C‑218.94, 115C‑218.95, and 115C‑218.100 are codified into Part 3 of Article 14A of Chapter 115C of the General Statutes, Evaluation of Charter Schools. G.S. 115C‑218.105 is codified into Part 4 of Article 14A of Chapter 115C of the General Statutes, Funding of Charter Schools. G.S. 115C‑218.110 is codified into Part 5 of Article 14A of Chapter 115C of the General Statutes, Reporting on Charter Schools. G.S. 115C‑218.115 is codified into Part 6 of Article 14A of Chapter 115C of the General Statutes, Charter Schools Pre‑K Programs.

SECTION 7.26.(d) Section 8.35 of S.L. 2014‑100, as amended by Section 8.13 of S.L. 2016‑94, Section 7.13 of S.L. 2018‑5, and Section 7.13 of S.L. 2022‑74, reads as rewritten:

SECTION 8.35.(a) Notwithstanding G.S. 115C‑218.5 or any other provision of law to the contrary, the State Board of Education shall establish a pilot program to authorize the operation of two virtual charter schools serving students in kindergarten through twelfth grade. The State Board shall establish an application process to allow student enrollment in the selected virtual charter schools beginning with the 2015‑2016 school year. A virtual charter school participating in the pilot may serve any grade span of students in kindergarten through twelfth grade. The pilot program shall continue for a period of 10 11 school years and shall end with the ~~2024‑2025~~ 2025‑2026 school year.

SECTION 8.35.(b) The virtual charter schools participating in the pilot program authorized by this section shall be subject to the statutes and rules applicable to charter schools pursuant to Article 14A of Chapter 115C of the General Statutes, except as follows:

(1) The maximum student enrollment in any participating school shall be no greater than 1,500 in its first year of operation and may increase by twenty percent (20%) for each participating school up to a maximum student enrollment of 2,592 in the fourth year of the pilot. The State Board of Education may waive this maximum student enrollment threshold, beginning in the fourth year of the school's operation, if the State Board determines that doing so would be in the best interest of North Carolina students.for the 2023‑2024 school year shall be the authorized student enrollment for that participating school for the 2021‑2022 school year plus enrollment growth of up to twenty percent (20%) of that enrollment. For the remaining years of the pilot, the participating schools may increase enrollment in accordance with G.S. 115C‑218.7(b).

…

SECTION 8.35.(e) The State Board of Education shall provide State funding to a virtual charter school participating in the pilot program as provided in G.S. 115C‑218.105(a) and G.S. 115C‑218.105(b). The amount allocated pursuant to G.S. 115C‑218.105(a)(1) shall not, however, include the allocation for low‑wealth counties supplemental funding and the allocation for small county supplemental funding. Virtual charter schools participating in the pilot program shall also be subject to the requirements in G.S. 115C‑218.105(c) through G.S. 115C‑218.105(e). The amount of local funds provided to participating schools pursuant to G.S. 115C‑218.105(c) shall be the lesser of seven hundred ninety dollars ($790.00) per pupil or the amount computed in accordance with G.S. 115C‑218.105(c).

….

SECTION 7.26.(e) A virtual charter school that participated in the pilot program authorized by Section 8.35 of S.L. 2014‑100, as amended by Section 8.13 of S.L. 2016‑94, Section 7.13 of S.L. 2018‑5, Section 7.13 of S.L. 2022‑74, and this section, shall be eligible to apply for a charter renewal as a remote charter academy as provided in Article 14A of Chapter 115C of the General Statutes.

SECTION 7.26.(f) This section is effective when it becomes law and applies beginning with the 2023‑2024 school year.

SCHOOL HEALTH PERSONNEL ALLOTMENT

SECTION 7.27.(a) G.S. 115C‑47(67) reads as rewritten:

(67) To Provide ~~at Least One School Psychologist.~~ School Health Services. – Local boards of education shall ~~ensure that each local school administrative unit employs at least one full‑time, permanent school psychologist.~~provide school health support services in accordance with G.S. 115C‑316.5.

SECTION 7.27.(b) G.S. 115C‑105.25(b)(13) reads as rewritten:

(13) No positions shall be transferred out of the allocation for school ~~psychologists~~ health personnel except as provided in this subdivision. Positions allocated for school ~~psychologists~~ health personnel may be converted to dollar equivalents for contracted services directly related to school ~~psychology.~~ psychology, school counseling, school nursing, and school social work. These positions shall be converted at the minimum salary for ~~school psychologists~~ the position on the A Teachers Salary Schedule.

SECTION 7.27.(c) G.S. 115C‑315 is amended by adding a new subsection to read:

(d2) School Nurses. – The State Board of Education, in accordance with subsection (d) of this section, may adopt rules to establish the qualifications and training required to be hired or contracted for as a certified school nurse except the Board may not require or impose a requirement that would require a nurse to obtain a four‑year degree as a condition of employment.

SECTION 7.27.(d) G.S. 115C‑315(d1) is repealed.

SECTION 7.27.(e) G.S. 115C‑316.1 reads as rewritten:

§ 115C‑316.1. Duties of school counselors.

(a) School counselors shall implement a comprehensive developmental school counseling program in their schools. Counselors shall spend at least eighty percent (80%) of their work time providing direct services to students. ~~Direct services do not include the coordination of standardized testing.~~ Direct services shall consist of:

(1) Delivering the school guidance curriculum through large group guidance, interdisciplinary curriculum development, group activities, and parent workshops.

(2) Guiding individual student planning through individual or small group assistance and individual or small group advisement.

(3) Providing responsive services through consultation with students, families, and staff; individual and small group counseling; crisis counseling; referrals; and peer facilitation.

(4) Performing other student services listed in the Department of Public Instruction school counselor job description that has been approved by the State Board of Education.

(b) School counseling program support activities do not include the coordination of standardized testing. During the remainder of their work time, school counselors may assist other staff with the coordination of standardized testing.School counselors shall not assist with the coordination or administration of standardized testing.

SECTION 7.27.(f) G.S. 115C‑316.2 reads as rewritten:

§ 115C‑316.2. School ~~mental~~ health ~~support~~ personnel reports.

(a) Definition. – For purposes of this section, the term school ~~mental~~ health ~~support~~ personnel refers to school psychologists, school counselors, school nurses, and school social workers.

….

SECTION 7.27.(g) G.S. 115C‑316.5 reads as rewritten:

§ 115C‑316.5. School ~~psychologists~~ health personnel allotment.

(a) For the purposes of this section, the term school health personnel refers to the same positions listed in G.S. 115C‑316.2(a).

(b) To the extent funds are made available, the State Board of Education shall establish a funding allotment for school ~~psychologist~~ health personnel positions. The State Board is authorized to adopt rules for the allocation of school ~~psychologist~~ health personnel positions pursuant to this allotment. Rules adopted by the State Board pursuant to this section shall include, at a minimum, the following requirements:

(1) School ~~psychologist~~ health personnel positions are allocated on the basis of average daily membership.

(2) Each local school administrative unit receives sufficient funding for at least one school psychologist ~~position in accordance with G.S. 115C‑47(67).~~position.

(3) Local school administrative units are encouraged to fill positions under this allotment with full‑time, permanent employees. If the local school administrative unit is unable to fill these positions by hiring a full‑time, permanent employee, the allocation for the position may be converted to a dollar equivalent for the unit to contract with a third party to provide the relevant services for an amount of hours equivalent to the hours a full‑time position employee would provide.

SECTION 7.27.(h) The State Board of Education has authority to adopt temporary rules to enact the provisions of this section until such a time as permanent rules can be adopted. The State Board shall also develop and distribute guidelines to all local school administrative units to assist with the implementation of this section. Each local board of education shall develop a transition plan for implementing this section within existing resources.

SUPPORT PROGRAM REPORTING

SECTION 7.28.(a) No later than December 31, 2023, Communities in Schools of North Carolina, Inc., shall report to the Joint Legislative Education Oversight Committee at least the following information from the prior fiscal year:

(1) A detailed accounting of how State funds were spent by the program.

(2) An accounting of any other funding received from other sources.

(3) Any planned expenditures or future uses of received funds not reflected in the accounting required by subdivision (1) of this subsection.

(4) The number of students served by the program, including generalized data on the age, grade level, and location of students served.

(5) A description of how the program evaluates the effectiveness of the program or student success.

(6) Outcomes achieved by the program.

(7) Any other information the program deems relevant for the Committee to know.

SECTION 7.28.(b) No later than December 31, 2023, Beginnings for Parents of Children Who are Deaf or Hard of Hearing, Inc., shall report to the Joint Legislative Education Oversight Committee at least the following information from the prior fiscal year:

(1) A detailed accounting of how State funds were spent by the program.

(2) An accounting of any other funding received from other sources.

(3) Any planned expenditures or future uses of received funds not reflected in the accounting required by subdivision (1) of this subsection.

(4) The number of students served by the program, including generalized data on the age, grade level, and location of students served.

(5) A description of how the program evaluates the effectiveness of the program or student success.

(6) Outcomes achieved by the program.

(7) Any other information the program deems relevant for the Committee to know.

CODIFY USE OF SPECIAL STATE RESERVE FUND FOR TRANSPORTATION/TRANSPORTATION RESERVE FUND FOR HOMELESS AND FOSTER STUDENTS

SECTION 7.30.(a) Part 1 of Article 17 of Chapter 115C of the General Statutes is amended by adding two new sections to read:

§ 115C‑250.3. Extraordinary Transportation Costs Grant.

(a) There is established the Extraordinary Transportation Costs Grant Program (Program). The Program shall use funds from the Special State Reserve Fund (SSRF) to cover extraordinary costs associated with the transportation of high‑needs students with disabilities.

(b) The Department of Public Instruction shall provide an application for local school administrative units and charter schools to apply for extraordinary transportation funds and may provide additional eligibility guidelines not inconsistent with this section. SSRF transportation funds shall be awarded to qualifying local school administrative units or charter schools consistent with the following:

(1) In determining extraordinary transportation costs, the Department shall consider total prior‑year transportation expenditures for high‑needs children with disabilities, including expenditures from local funds and all other funding sources, as a proportion of total expenditures.

(2) Applicants with highest extraordinary transportation costs shall receive highest priority in the award of grant funds.

(3) Funds may be awarded during the initial year of a high‑needs student's enrollment in the local school administrative unit or charter school or in subsequent years of the student's enrollment.

§ 115C‑250.5. Homeless and foster student transportation grant.

(a) There is established the Transportation Reserve Fund for Homeless and Foster Students to provide for a grant program to cover extraordinary school transportation costs for homeless and foster students. For the purposes of this section, homeless is defined in accordance with the definition in the federal McKinney‑Vento Homeless Assistance Act.

(b) The Department of Public Instruction shall provide an application process for local school administrative units and charter schools to apply for funds to cover extraordinary transportation costs for qualifying students. The Department shall establish eligibility guidelines and shall award funds consistent with the following requirements:

(1) In determining extraordinary transportation costs, the Department shall consider total prior‑year transportation expenditures for homeless and foster children, including expenditures from local funds and all other funding sources, as a proportion of total expenditures.

(2) Priority shall be given to applicants in proportion to the extent that their applications and prior‑year expenditures demonstrate use of available federal funds to cover the cost of transporting homeless and foster children.

(3) Awards shall not exceed fifty percent (50%) of extraordinary transportation costs as determined pursuant to this subsection.

(4) Awards shall not be issued on a pro rata basis to each eligible applicant.

SECTION 7.30.(b) Section 7.12(b) of S.L. 2021‑180 is repealed.

SCHOOL HEALTH PERSONNEL PROFESSION ENTRY REPORT

SECTION 7.31.(a) No later than January 15, 2024, the State Superintendent shall study and report the following to the Joint Legislative Education Oversight Committee and the Fiscal Research Division:

(1) Policies, practices, standards, and curriculum adopted or implemented, as appropriate, by the State Board of Education, the Department of Public Instruction, educator preparation programs, and public school units for persons to receive training, licensure, and employment as school health support personnel in public school units.

(2) Barriers persons face when entering each school health support profession because of the policies, practices, standards, and curriculum identified in subdivision (1) of this subsection.

(3) Recommendations and any actions already taken to (i) reduce and eliminate the barriers to entry identified in subdivision (2) of this subsection and (ii) improve the number and quality of school health support personnel employed in public school units.

SECTION 7.31.(b) For purposes of this section, the term school health personnel refers to school psychologists, school counselors, school nurses, and school social workers.

MEDICAID REIMBURSEMENT REQUIRED FOR RESIDENTIAL SCHOOLS

SECTION 7.32. Section 7.16(a) of S.L. 2021‑180 reads as rewritten:

SECTION 7.16.(a) The Department of Public Instruction shall enter into a contract with a third‑party entity for any administrative services necessary to receive maximum reimbursement for medically necessary health care services for which payment is available under the North Carolina Medicaid Program provided to eligible students attending the Governor Morehead School for the Blind, the Eastern North Carolina School for the Deaf, and the North Carolina School for the Deaf. The provisions of the contract shall ensure that the residential schools receive reimbursement for these services in a timely manner. If the Department of Public Instruction has not executed the contract required by this section by January 1, 2024, then the estimated amount that would have been reimbursed on a monthly basis had the contract been executed shall be deducted from the Department's budget and shall be appropriated directly to the residential schools until the contract is executed. Funds shall be deducted from Budget Code 13510, Fund Code 1000 of the Department's budget, except any funds appropriated for the Center for Safer Schools shall not be reduced, deducted, or transferred under this section.

DRIVER EDUCATION ADMINISTRATION FUNDS

SECTION 7.33. G.S. 115C‑215(g) reads as rewritten:

(g) The Department of Public Instruction shall have a full‑time director and other professional, administrative, technical, and clerical personnel as may be necessary for the statewide administration of the driver education program. Of the funds appropriated to the Department of Public Instruction each fiscal year pursuant to subsection (f) of this section, the Department may use up to ~~two percent (2%) of those funds~~ one hundred sixty‑four thousand six hundred ninety dollars ($164,690), as adjusted to reflect legislative salary increments, retirement rate adjustments, and health benefit adjustments, for the direct costs for the statewide administration of the program, including any necessary positions.

SCHOOL SAFETY GRANTS

SECTION 7.36.(a) Definitions. – For the purposes of this section, the following definitions shall apply:

(1) Community partner. – A public or private entity, including, but not limited to, a nonprofit corporation or a local management entity/managed care organization (LME/MCO), that partners with a public school unit to provide services or pay for the provision of services for the unit.

(2) School health support personnel. – School psychologists, school counselors, school nurses, and school social workers.

SECTION 7.36.(b) Program; Purpose. – The Superintendent of Public Instruction shall establish the School Safety Grants Program (Program) for the 2023‑2025 fiscal biennium. The purpose of the Program shall be to improve safety in public school units by providing grants in each fiscal year of the 2023‑2025 fiscal biennium for (i) services for students in crisis, (ii) school safety training, (iii) safety equipment in schools, and (iv) subsidizing the School Resource Officer Grants Program.

SECTION 7.36.(c) Grant Applications. – A public school unit may submit an application to the Superintendent of Public Instruction for one or more grants pursuant to this section in each year of the 2023‑2025 fiscal biennium. The application shall include an assessment, to be performed in conjunction with a local law enforcement agency, of the need for improving school safety within the public school unit that would receive the funding or services. The application shall identify current and ongoing needs and estimated costs associated with those needs.

SECTION 7.36.(d) Criteria and Guidelines. – By January 15, 2024, the Superintendent of Public Instruction shall develop criteria and guidelines for the administration and use of the grants pursuant to this section, including any documentation required to be submitted by applicants. In assessing grant applications, the Superintendent of Public Instruction shall consider at least all of the following factors:

(1) The level of resources available to the public school unit that would receive the funding.

(2) Whether the public school unit has received other grants for school safety.

(3) The overall impact on student safety in the public school unit if the identified needs are funded.

SECTION 7.36.(e) Grants for Students in Crisis. – Of the funds appropriated to the Department of Public Instruction by this act for the grants provided in this section, the Superintendent of Public Instruction, in consultation with the Department of Health and Human Services, shall award grants to public school units to contract with community partners to provide or pay for the provision of any of the following crisis services:

(1) Crisis respite services for parents or guardians of an individual student to prevent more intensive or costly levels of care.

(2) Training and expanded services for therapeutic foster care families and licensed child placement agencies that provide services to students who (i) need support to manage their health, welfare, and safety and (ii) have any of the following:

a. Cognitive or behavioral problems.

b. Developmental delays.

c. Aggressive behavior.

(3) Evidence‑based therapy services aligned with targeted training for students and their parents or guardians, including any of the following:

a. Parent‑child interaction therapy.

b. Trauma‑focused cognitive behavioral therapy.

c. Dialectical behavior therapy.

d. Child‑parent psychotherapy.

(4) Any other crisis service, including peer‑to‑peer mentoring, that is likely to increase school safety. Of the funds appropriated to the Department of Public Instruction by this act for the grants provided in this section, the Superintendent shall use no more than three hundred fifty thousand dollars ($350,000) in each year of the 2023‑2025 fiscal biennium for the services identified in this subdivision.

SECTION 7.36.(f) Grants for Training to Increase School Safety. – Of the funds appropriated to the Department of Public Instruction by this act for the grants provided in this section, the Superintendent of Public Instruction, in consultation with the Department of Health and Human Services, shall award grants to public school units to contract with community partners to address school safety by providing training to help students develop healthy responses to trauma and stress. The training shall be targeted and evidence‑based and shall include any of the following services:

(1) Counseling on Access to Lethal Means (CALM) training for school health support personnel, local first responders, and teachers on the topics of suicide prevention and reducing access by students to lethal means.

(2) Training for school health support personnel on comprehensive and evidence‑based clinical treatments for students and their parents or guardians, including any of the following:

a. Parent‑child interaction therapy.

b. Trauma‑focused cognitive behavioral therapy.

c. Behavioral therapy.

d. Dialectical behavior therapy.

e. Child‑parent psychotherapy.

(3) Training for students and school employees on community resilience models to improve understanding and responses to trauma and significant stress.

(4) Training for school health support personnel on Modular Approach to Therapy for Children with Anxiety, Depression, Trauma, or Conduct problems (MATCH‑ADTC), including any of the following components:

a. Trauma‑focused cognitive behavioral therapy.

b. Parent and student coping skills.

c. Problem solving.

d. Safety planning.

(5) Any other training, including the training on the facilitation of peer‑to‑peer mentoring, that is likely to increase school safety. Of the funds appropriated to the Department of Public Instruction by this act for the grants provided in this section, the Superintendent shall use no more than three hundred fifty thousand dollars ($350,000) in each year of the 2023‑2025 fiscal biennium for the services identified in this subdivision.

SECTION 7.36.(g) Grants for Safety Equipment. – Of the funds appropriated to the Department of Public Instruction by this act for the grants provided in this section, the Superintendent of Public Instruction shall award grants to public school units for (i) the purchase of safety equipment for school buildings and (ii) training associated with the use of safety equipment purchased pursuant to this subsection. Notwithstanding G.S. 115C‑218.105(b), charter schools may receive grants for school safety equipment pursuant to this subsection.

SECTION 7.36.(h) Artificial Intelligence (AI) Pilot. – Of the funds appropriated to the Department of Public Instruction by this act for the grants provided in this section for the 2023‑2024 fiscal year, the Department shall allocate (i) three million two hundred thousand dollars ($3,200,000) as a directed grant to New Hanover County Schools and (ii) two million dollars ($2,000,000) as a directed grant to Davidson County Schools for an AI School Safety Pilot Program. In conducting the Pilot Program, participating public school units shall comply with the following:

(1) Funds allocated for the Pilot Program shall be used for the implementation of a school safety system that integrates AI technology into existing access controls, alerting protocols, and intercom systems.

(2) No later than January 15, 2025, the participating public school units, in coordination with the Department of Public Instruction, shall report to the Joint Legislative Education Oversight Committee the following information:

a. The schools that participated in the Pilot Program.

b. How grant funds were spent.

c. The impact the Pilot Program had on school safety outcomes.

d. Any noted capabilities of the AI system that could not be accomplished by more traditional safety measures.

e. Any other information the participating public school units or the Department deem relevant to the report.

SECTION 7.36.(i) Subsidizing School Resource Officer Grants Program. – If the Superintendent of Public Instruction receives applications for grants for school resource officers under G.S. 115C‑105.60 in excess of the amount of funding appropriated for school resource officer grants in the 2023‑2025 fiscal biennium, the Superintendent may use the funds appropriated to the Department of Public Instruction for the grants provided for in this section to cover the unmet need for school resource officer grants.

SECTION 7.36.(j) Supplement Not Supplant. – Grants provided to public school units pursuant to the Program shall be used to supplement and not to supplant State or non‑State funds already provided for these services.

SECTION 7.36.(k) Administrative Costs. – Of the funds appropriated to the Department of Public Instruction by this act for the grants provided in this section, the Superintendent of Public Instruction may retain a total of up to one hundred thousand dollars ($100,000) in each fiscal year of the 2023‑2025 fiscal biennium for administrative costs associated with the Program.

SECTION 7.36.(l) Nonrevert. – Notwithstanding any provision of law to the contrary, the nonrecurring funds appropriated to the Department of Public Instruction in the 2022‑2023 fiscal year for the 2021‑2023 School Safety Grants Program under Section 7.19 of S.L. 2021‑180 and the nonrecurring funds appropriated by this act to the Department of Public Instruction for the 2023‑2025 School Safety Grants Program shall not revert to the General Fund but shall remain available for the purposes for which they were appropriated until June 30, 2025.

SECTION 7.36.(m) Program Report. – No later than April 1 of each fiscal year in which funds are awarded pursuant to this section, the Superintendent of Public Instruction shall report on the Program to the Joint Legislative Education Oversight Committee, the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Justice and Public Safety, the Joint Legislative Commission on Governmental Operations, the Senate Appropriations/Base Budget Committee, the House Committee on Appropriations, and the Fiscal Research Division. The report shall include at least the following information:

(1) The identity of each public school unit and community partner that received grant funds through the Program.

(2) The amount of funding received by each entity identified pursuant to subdivision (1) of this subsection.

(3) The services, training, and equipment purchased with grant funds by each entity that received a grant.

(4) Recommendations for the implementation of additional effective school safety measures.

SECTION 7.36.(n) Effective Date. – Subsection (l) of this section is effective June 30, 2023. The remainder of this section is effective when it becomes law.

LIFE CHANGING EXPERIENCES

SECTION 7.37.(a) Of the funds appropriated in this act to the Department of Public Instruction, the Department shall use the sum of five hundred thousand dollars ($500,000) in nonrecurring funds for each year of the 2023‑2025 fiscal biennium to contract with the Children and Parent Resource Group, Inc., to design, implement, and evaluate the Life Changing Experiences School Program (Project) in the 2023‑2024 and 2024‑2025 school years. The Project shall be operated and administered for students in grades six through 11 in at least the following local school administrative units: Cleveland County Schools, Greene County Schools, Lenoir County Public Schools, Lincoln County Schools, McDowell County Schools, Mitchell County Schools, and Pitt County Schools. The Department may select one or more additional local school administrative units to participate in the Project if the funds are sufficient to support additional units. 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 interactive, holistic, and evidence‑based multimedia education programs that are screened via in‑person school assemblies, internet‑based and synchronized remote access, or a combination of the two. The Project shall include theme‑specific programs and certain 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 7.37.(b) The Children and Parent Resource Group, Inc., in consultation with the Department of Public Instruction, shall submit a report on the Project authorized by subsection (a) of this section by March 15, 2024, 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.

NBPTS PARTICIPATION FEE GRANT PROGRAM

SECTION 7.40. Article 20 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑296.2A. National Board for Professional Teaching Standards certification participation fee grant program.

(a) Notwithstanding G.S. 115C‑296.2, to the extent the General Assembly provides funds for this purpose, the Department of Public Instruction shall establish a grant program for qualifying public schools to improve teacher quality and mitigate learning loss by reimbursing teachers for the cost of the participation fee for National Board for Professional Teaching Standards (NBPTS) certification.

(b) Definitions. – The following definitions shall apply in this section:

(1) Public school. – Any of the following:

a. A school in a public school unit.

b. A school providing elementary or secondary instruction operated by The University of North Carolina under Article 4 or Article 29 of Chapter 116 of the General Statutes.

(2) Qualifying public school. – A public school that meets any of the following criteria:

a. Is identified as a low‑performing school pursuant to G.S. 115C‑105.37 or G.S. 115C‑218.94.

b. Enrolled a student body in the school year prior to the application for reimbursement consisting of at least ten percent (10%) of students identified by the Department as at‑risk students.

(c) Grant Applications and Approval. – The governing board of a qualifying public school may apply to the Department of Public Instruction for grant funds to reimburse teachers employed in the qualifying public school for the cost of the participation fee for NBPTS certification. The Department shall develop criteria and guidelines for governing bodies of public schools that receive grant funds to follow when administering the reimbursements. The criteria shall include at least the following:

(1) Governing bodies of public schools receiving grant funds shall prioritize reimbursements for teachers based on the need of the school where the teacher is employed at the time of the reimbursement, including at least the following criteria:

a. A teacher employed in a qualifying public school with more qualifying factors, as identified in sub‑subdivisions a. and b. of subdivision (2) of subsection (b) of this section, shall receive priority over a teacher employed in a qualifying public school with fewer qualifying factors.

b. For teachers employed in qualifying schools pursuant to sub‑subdivision b. of subdivision (2) of subsection (b) of this section, teachers employed in schools with a higher percentage of at‑risk students shall receive priority over teachers employed in schools with a lower percentage of at‑risk students.

(2) Governing bodies of public schools receiving grant funds shall not require a teacher to complete the NBPTS certification process in order to receive a reimbursement.

(d) Report. – No later than January 15 of each year in which funds are awarded, the Department shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the impact of the program, including at least the following information:

(1) Governing bodies of public schools applying for and receiving grants.

(2) Number of teachers receiving reimbursements.

(3) Demographic information of teachers receiving reimbursements.

(4) Employment status of teachers receiving reimbursements, including the public school where the teacher is employed and whether the teacher remains employed with his or her original qualifying public school.

(5) Licensure areas of teachers receiving reimbursements.

(6) Effect of the program on the performance and growth of students taught by teachers receiving reimbursements.

REQUIRE CONFLICTS OF INTEREST TRAINING FOR CERTAIN PUBLIC SCHOOL EMPLOYEES

SECTION 7.41.(a) Article 22 of Chapter 115C of the General Statutes is amended by adding a new Part to read:

Part 10. Employee Conflicts of Interest Training.

§ 115C‑335.15. Conflicts of interest training for certain public school employees.

All employees of a local school administrative unit involved in the making or administering of contracts, as described in G.S. 14‑234, shall receive a minimum of two hours of conflicts of interest training regarding the making and administering of contracts, as follows:

(1) The training shall be required once in every odd‑numbered year.

(2) Upon assuming the responsibility of making or administering contracts, a school employee shall receive an initial training within 90 days and subsequent trainings in every odd‑numbered year thereafter.

(3) The training shall include position‑specific education on conflicts of interest and ethical standards of conduct.

(4) The training may be provided by any qualified source at the choice of the local board of education.

SECTION 7.41.(b) All employees of a local school administrative unit involved in the making or administering of contracts as of the effective date of this section shall receive an initial training to comply with G.S. 115C‑335.15, as enacted by subsection (a) of this section, within six months of the effective date of this section.

SECTION 7.41.(c) This section is effective when it becomes law.

COMBINING OF THE EDUCATION AND WORKFORCE INNOVATION COMMISSION GRANT PROGRAMS

SECTION 7.43. Article 6C of Chapter 115C of the General Statutes reads as rewritten:

Article 6C.

Education and Workforce Innovation and CTE Grade Expansion Program.

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

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

(b) The Commission shall consist of the following 14 members:

(1) The Secretary of Commerce or his or her designee.

(2) The State Superintendent of Public Instruction or his or her designee.

(3) The Chair of the State Board of Education or his or her designee.

(4) The President of The University of North Carolina or his or her designee.

(5) The President of the North Carolina Community College System or his or her designee.

(6) Three members appointed by the Governor who have experience in education.

(7) Three members appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives, as provided in G.S. 120‑121, who have experience in businesses operating in North Carolina.

(8) Three members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, as provided in G.S. 120‑121, who have experience in businesses operating in North Carolina.

(b1) Members appointed by the Governor or the General Assembly shall serve for three‑year terms commencing July 1 of the year of appointment and may serve successive terms.

(c) The Commission members shall elect a chair from the membership of the Commission. The Commission shall meet at least three times annually on the call of the Chair or as additionally provided by the Commission. A quorum is six members of the Commission. Members may not ~~send designees to Commission meetings nor may they~~ vote by proxy.

(d) The Commission shall develop and administer the Education and Workforce Innovation and CTE Grade Expansion Program, as established under G.S. 115C‑64.16, in collaboration with the North Carolina Career and Technical Education Foundation, Inc., and make awards of grants under the Program.

~~(d1)~~ The Commission shall develop and administer, in coordination with the State Board of Education and the Superintendent of Public Instruction, and in collaboration with the North Carolina Career and Technical Education Foundation, Inc., 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.

(d2) The North Carolina Career and Technical Education Foundation, Inc., shall ~~serve as a grant administrator by providing~~ provide assistance and support to grantees for initiating, expanding, improving, and promoting career and technical education initiatives.

(e) The ~~Commission, in consultation with the North Carolina Career and Technical Education Foundation, Inc.,~~ Commission shall publish a report on the Education and Workforce Innovation and CTE Grade Expansion 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 Senate Appropriations Committee on Education/Higher Education, the House Appropriations Committee on Education, the Fiscal Research Division, 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~~ the program and their impact on student achievement, retention, and employability.

(2) Recommended statutory and policy changes.

(3) Recommendations for improvement of ~~each~~ the program.

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

§ 115C‑64.16. The Education and Workforce Innovation ~~Program.~~and CTE Grade Expansion Program; innovation grants.

(a) Program Establishment. – There is established the Education and Workforce Innovation and CTE Grade Expansion Program (Program) to foster innovation in education that will lead to more students graduating career and college ~~ready.~~and to prioritize the inclusion of students in sixth and seventh grades through grant awards provided to selected local school administrative units and charter schools.

(a1) Types of Grant Awards. – Funds appropriated to the Program shall be used to award competitive grants depending on the needs of the State, as determined by the Commission, by dividing the grants between each type as innovation grants pursuant to the provisions of this section or as grants for grade expansion for career and technical education pursuant to the provisions of G.S. 115C‑64.17.

(a2) Innovation Grants. – Competitive grants shall be awarded to an a charter school, an individual ~~school,~~ school in a local school administrative unit, a local school administrative unit, or a regional partnership of more than one local school administrative unit to advance comprehensive, high‑quality education that equips teachers and other hired personnel with the knowledge and skill required to succeed with all students. Before receiving a an innovation grant, applicants must meet all of the following conditions:

(1) Form a partnership, for the purposes of the grant, with either a public or private university or a community college.

(2) Form a partnership, for the purposes of the grant, with regional businesses and business leaders.

(3) Demonstrate the ability to sustain innovation once grant funding ends.

(b) Applicant Categories and Specific ~~Requirements. –~~Requirements for Innovation Grants. –

(1) Individual schools. – ~~Individual public schools~~ Charter schools and individual public schools in local school administrative units must demonstrate all of the following in their applications:

a. Partnerships with business and industry to determine the skills and competencies needed for students' transition into growth sectors of the regional economy.

b. Aligned pathways to employment, including students' acquisition of college credit or industry recognized credentials.

c. Development of systems, infrastructure, capacity, and culture to enable teachers and school leaders to continuously focus on improving individual student achievement.

(2) Local school administrative units. – Local school administrative units must demonstrate all of the following in their applications:

a. Implementation of comprehensive reform and innovation.

b. Appointment of a senior leader to manage and sustain the change process with a specific focus on providing parents with a portfolio of meaningful options among schools.

(3) Regional partnerships of two or more local school administrative units. – Partnerships of two or more local school administrative units must demonstrate all of the following in their applications:

a. Implementation of resources of partnered local school administrative units in creating a tailored workforce development system for the regional economy and fostering innovation in each of the partnered local school administrative units.

b. Promotion of the development of knowledge and skills in career clusters of critical importance to the region.

c. Benefits of the shared strengths of local businesses and higher education.

d. Usage of technology to deliver instruction over large geographic regions and build networks with industry.

e. Implementation of comprehensive reform and innovation that can be replicated in other local school administrative units.

(c) Consideration of Factors in Awarding of Innovation Grants. – All applications must include information on at least the following in order to be considered for a an innovation grant:

(1) Describe the aligned pathways from school to high‑growth careers in regional economies.

(2) Leverage technology to efficiently and effectively drive teacher and principal development, connect students and teachers to online courses and resources, and foster virtual learning communities among faculty, higher education partners, and business partners.

(3) Establish a comprehensive approach to enhancing the knowledge and skills of teachers and administrators to successfully implement the proposed innovative program and to graduate all students ready for work and college.

(4) Link to a proven provider of professional development services for teachers and administrators capable of providing evidence‑based training and tools aligned with the goals of the proposed innovative program.

(5) Form explicit partnerships with businesses and industry, which may include business advisory councils, internship programs, and other customized projects aligned with relevant workforce skills.

(6) Partner with community colleges or public or private universities to enable communities to challenge every student to graduate with workplace credentials or college credit.

(7) Align K‑12 and postsecondary instruction and performance expectations to reduce the need for college remediation courses.

(8) Secure input from parents to foster broad ownership for school choice options and to foster greater understanding of the need for continued education beyond high school.

(9) Provide a description of the funds that will be used and a proposed budget for ~~five years.~~each of the grant years.

(10) Describe the source of matching funds required in subsection (d) of this section.

(11) Establish a strategy to achieve meaningful analysis of program outcomes due to the receipt of grant funds under this section.

(d) Matching Private and Local ~~Funds.~~ Funds for Innovation Grants. – All innovation grant applicants must match fifty percent (50%) of all State dollars. Matching funds shall not include other State funds. Matching funds may include in‑kind contributions.

(e) Awards for Innovation Grants. – Any innovation grants awarded by the Commission may be spent over a five‑year period from the initial award. Grants may be awarded for new or existing projects. Grant funds shall not revert but shall be available until expended.

(f) Innovation Grant Recipient Reporting Requirements. – No later than September 1 of each year, a an innovation grant recipient shall submit to the Commission an annual report for the preceding grant year that describes the academic progress made by the students and the implementation of program initiatives.

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

(a) ~~Program Establishment.~~ CTE Grade Expansion Grants. – ~~There is established the Career and Technical Education Grade Expansion Program (Program) to expand~~ Career and Technical Education Grade Expansion grants shall be awarded under the Program for the purpose of expanding 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 and charter schools for up to seven years. ~~Funds appropriated for the Program~~ Grant funds shall be allocated to selected local school administrative units and charter schools as competitive ~~grants of (i) up to seven hundred thousand dollars ($700,000) for the 2017‑2018 fiscal year and (ii)~~ grants, to the extent funds are available, of 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.~~ For a local school administrative unit, the funds may be used for CTE programs at one or more schools in the unit. Grant funds allocated to the local school administrative unit or charter school 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 CTE Grade Expansion Grants. – Local school administrative units and charter schools applying for ~~the Program~~ CTE grade expansion grants 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,~~ unit or charter school, 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 CTE Grade Expansion Grant Recipients. – For the 2017‑2018 fiscal year, the Commission shall accept applications for a grant until November 30, 2017. For subsequent fiscal years that funds are made available for the ~~Program,~~ CTE grade expansion grants, the Commission shall accept applications for a grant until August 1 of each year. The Commission shall consult with the North Carolina Career and Technical Education Foundation, Inc., to 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 or charter school is located, and the size of the student population served by the unit, or charter school, 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 CTE grade expansion 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.~~ recipients, as provided in G.S. 115C‑64.16(a1). The ~~Commission, in consultation with the Superintendent of Public Instruction,~~ Commission 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 CTE grade expansion 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 or charter school 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.

TEACHER ASSISTANT TUITION REIMBURSEMENT PROGRAM

SECTION 7.44.(a) Article 17D of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑269.31. Teacher Assistant Tuition Reimbursement Grant Program.

(a) Purpose. – The Department of Public Instruction shall establish the Teacher Assistant Tuition Reimbursement Grant Program (Program). The purpose of the Program is to provide tuition assistance to part‑time or full‑time teacher assistants working in local school administrative units to pursue a college degree that will result in teacher licensure.

(b) Applications; Grant Priority. – Local school administrative units may apply to participate in the Program pursuant to a process to be established by the Department of Public Instruction. The application shall identify current and ongoing needs for licensed teachers and the expected number of eligible teacher assistants that would participate in the Program. In evaluating applications, the Department shall prioritize local school administrative units according to the following order:

(1) Local school administrative units that received funds under the Teacher Assistant Tuition Reimbursement Pilot Program established in Section 8.29 of S.L. 2016‑94, as amended by Section 7.20 of S.L. 2017‑57, Section 6(m) of S.L. 2017‑189, and Section 7.21 of S.L. 2018‑5.

(2) Local school administrative units located, in whole or in part, in a county with at least one local school administrative unit that received low‑wealth supplemental funding in the previous fiscal year.

(3) All other local school administrative units.

(c) Award of Funds. – To the extent funds are made available for the Program, a local school administrative unit receiving funds under the Program shall provide a teacher assistant participating in the program an award of up to four thousand six hundred dollars ($4,600) per academic year per teacher assistant, up to four academic years to defray the costs of tuition and fees at an educator preparation program at an institution of higher education while employed in the local school administrative unit as a teacher assistant.

(d) Additional Criteria. – The following additional criteria shall apply under the Program:

(1) Tuition assistance awards granted under the Program may be provided for part‑time or full‑time coursework.

(2) A local board of education may grant a teacher assistant academic leave to pursue coursework that may only be taken during working hours.

(3) A teacher assistant shall fulfill the student teaching requirements of an educator preparation program by working as a teacher assistant at his or her employing local school administrative unit.

(4) A teacher assistant shall continue to receive salary and benefits while student teaching in the local school administrative unit as provided for teacher assistants in G.S. 115C‑269.30(c).

(e) Selection of Teacher Assistants. – The Department shall establish criteria for initial and continuing eligibility to participate in the Program. The Department shall adopt standards to ensure that only qualified, potential recipients receive an award of funds for tuition and fees under the Program. The standards shall include satisfactory academic progress toward achieving teacher licensure. Local school administrative units receiving grants pursuant to the Program shall select teacher assistants to receive funds under the Program and prioritize teacher assistants who received an award in the prior academic year and who are making satisfactory academic progress towards achieving teacher licensure. The Department of Public Instruction shall set criteria for the application and selection of teacher assistants to receive tuition assistance awards that includes at least the following:

(1) The teacher assistant shall be employed by the local board of education in the local school administrative unit.

(2) The teacher assistant shall be enrolled or provide a statement of intent to enroll in an accredited institution of higher education in North Carolina with an educator preparation program approved by the State Board of Education to pursue teacher licensure.

(3) The teacher assistant qualifies as a resident for tuition purposes under the criteria set forth in G.S. 116‑143.1 and in accordance with the coordinated and centralized residency determination process administered by the Authority.

(f) Endorsement of Tuition Assistance Awards for Recipients. – Each local board of education participating in the Program shall enter into a memorandum of understanding with the institution of higher education in which an award recipient under the Program is enrolled that includes procedures for at least the following:

(1) Remittance of the award from the local board of education to the institution of higher education.

(2) Endorsement of the funds awarded to the recipient to the institution of higher education for deposit into the account of the institution.

(3) Return of a pro rata share of funds to the local board of education in the event a recipient (i) withdraws from the institution of higher education prior to the end of a term or (ii) the recipient's employment with the local board of education is terminated. The return of funds shall be consistent with procedures used by the institution under federal Title IV programs.

(g) Local Report. – No later than September 1 of each school year following at least six months of participation in the Program for that year, local boards of education participating in the Program shall report at least the following information to the Department of Public Instruction:

(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.

(h) State Report. – No later than December 1, 2024, and annually thereafter for each year funds are awarded pursuant to the Program, the Department of Public Instruction shall aggregate the information provided pursuant to subsection (g) of this section and report that information to the Joint Legislative Education Oversight Committee.

SECTION 7.44.(b) Section 8.29 of S.L. 2016‑94, as amended by Section 7.20 of S.L. 2017‑57, Section 6(m) of S.L. 2017‑189, and Section 7.21 of S.L. 2018‑5, is repealed. Notwithstanding this subsection, the local boards of education identified in Section 8.29(d) of S.L. 2016‑94, as amended by Section 7.20(a) of S.L. 2017‑57 and Section 7.21 of S.L. 2018‑5, shall continue to provide the information identified in that subsection to the Joint Legislative Education Oversight Committee by September 1, 2023.

SECTION 7.44.(c) This section applies beginning with the 2023‑2024 school year.

TEACHER APPRENTICE GRANT PROGRAM

SECTION 7.44A. Article 17D of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑269.32. Teacher Apprentice Grant Program.

(a) Definitions. – The following definitions shall apply in this section:

(1) Eligible high school graduate. – A graduate of a high school in a local school administrative unit who was enrolled in a Career and College Promise Transfer Pathway Program leading to an associate degree in teacher preparation and earned one or more credits toward that degree.

(2) Eligible teacher apprentice. – An eligible high school graduate who meets the following criteria:

a. Is employed as a teacher apprentice in an elementary school in the same local school administrative unit where he or she graduated high school.

b. Is enrolled part time or full time in a recognized educator preparation program pursuing coursework toward a college degree that will result in teacher licensure.

c. Qualifies as a resident for tuition purposes under the criteria set forth in G.S. 116‑143.1 and in accordance with the coordinated and centralized residency determination process administered by the Authority.

(3) Program. – The Teacher Apprentice Grant Program.

(4) Teacher apprentice. – A teacher assistant who works with a teacher of record to develop an expertise in teaching by observing best education practices and gaining classroom experience with the goal of becoming a licensed teacher.

(b) Program Established. – The Department of Public Instruction shall establish the Teacher Apprentice Grant Program. The purpose of the Program is to provide grants to local school administrative units to award funds for (i) the cost of tuition at an educator preparation program for eligible teacher apprentices and (ii) salary supplements for teacher apprentices who become teachers in the unit.

(c) Applications. – Local school administrative units may submit applications to participate in the Program each year pursuant to a process to be established by the Department of Public Instruction. The application shall identify current and ongoing needs for licensed teachers and the expected number of eligible teacher apprentices that would participate in the Program.

(d) Award of Funds. – To the extent funds are made available for the Program, funds shall be awarded as follows:

(1) Funds for tuition. – Eligible teacher apprentices shall receive awards of up to four thousand six hundred dollars ($4,600) per academic semester, per eligible teacher apprentice, up to four academic years to defray the costs of tuition and fees for part‑time or full‑time coursework taken while employed in the local school administrative unit as an eligible teacher apprentice.

(2) Funds for salary supplements. – Notwithstanding any other provision of law, any eligible teacher apprentice who becomes a licensed teacher and accepts employment in the same local school administrative unit shall receive a salary supplement each month during his or her first four 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 four years of experience on the A Teachers Salary Schedule, as long as the teacher remains teaching in the same local school administrative unit.

(e) Additional Criteria. – The following additional criteria shall apply to funds awarded under the Program:

(1) A local board of education may grant an eligible teacher apprentice academic leave to pursue coursework that may only be taken during working hours.

(2) An eligible teacher apprentice shall fulfill the student teaching requirements of an educator preparation program by working as a teacher apprentice at his or her employing local school administrative unit.

(3) An eligible teacher apprentice shall continue to receive salary and benefits while student teaching in the local school administrative unit as provided for teacher assistants in G.S. 115C‑269.30(c).

(4) Local boards of education receiving grants under the Program shall make efforts to promote the Program to high school students enrolled in a Career and College Promise Transfer Pathway Program.

(f) Selection of Teacher Apprentices. – The Department shall establish criteria for initial and continuing eligibility to participate in the Program. The Department shall adopt standards to ensure that only qualified, potential recipients receive an award of funds for tuition and fees under the Program. The standards shall include satisfactory academic progress toward achieving teacher licensure. Local school administrative units receiving grants pursuant to the Program shall prioritize for the award of funds for eligible teacher apprentices who received an award in the prior academic year.

(g) Endorsement of Tuition Assistance Awards for Recipients. – Each local board of education participating in the Program shall enter into a memorandum of understanding with the institution of higher education in which an award recipient under the Program is enrolled that includes procedures for at least the following:

(1) Remittance of the award from the local board of education to the institution of higher education.

(2) Endorsement of the funds awarded to the recipient to the institution of higher education for deposit into the account of the institution.

(3) Return of a pro rata share of funds to the local board of education in the event (i) a recipient withdraws from the institution of higher education prior to the end of a term or (ii) the recipient's employment with the local board of education is terminated. The return of funds shall be consistent with procedures used by the institution under federal Title IV programs.

(h) Report to the General Assembly. – The Department shall report no later than May 15, 2024, and annually thereafter while funds are awarded under the Program, to the Joint Legislative Education Oversight Committee regarding the Program, including at least the following information:

(1) Funds awarded under the Program, including the following:

a. Demographic information regarding eligible teacher apprentices.

b. Number of award recipients by local school administrative unit and educator preparation program.

(2) Placement rates, including the number of award recipients who have been employed as licensed teachers in the same local school administrative unit in which they worked as a teacher apprentice and the time frame from the issuance of the initial award of funds to the time of achieving licensure.

(3) Recommendations to improve the Program and increase the number of teachers in North Carolina.

ECONOMICALLY DISADVANTAGED PUBLIC SCHOOL SUPPORT FUNDS

SECTION 7.45. Part 2 of Article 8B of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑105.34. Economically disadvantaged public school support funds.

(a) For purposes of this section, the following definitions shall apply:

(1) Curriculum. – Materials or programs related to courses offered by an economically disadvantaged public school.

(2) Economically disadvantaged public school. – A school in a local school administrative unit or a charter school with a student population that is composed of at least eighty percent (80%) of students identified by the Department of Public Instruction as economically disadvantaged students.

(3) Eligible employee. – Any full‑time or part‑time employee of a qualifying economically disadvantaged public school.

(4) Qualifying economically disadvantaged public school. – An economically disadvantaged public school that exceeded expected growth in the prior school year, as determined by the State Board of Education pursuant to G.S. 115C‑83.15(c).

(b) The Department of Public Instruction shall establish the Economically Disadvantaged Public Schools Support Program (Program) to provide funds to support the efforts of qualifying economically disadvantaged public schools to continue to exceed growth in subsequent school years. To the extent funds are provided to the Department for this purpose, the Department shall allocate these funds annually to each governing body of an economically disadvantaged public school based on the relative proportion of students in each qualifying economically disadvantaged public school governed by that body. The governing body shall allocate those funds to each qualifying economically disadvantaged public school based on the relative proportion of students in each school. The funds shall be used for curriculum, activities necessary to support students and instructional support personnel, and bonuses and retention programs for eligible employees, in the discretion of the governing body of the charter school or the school in the local school administrative unit, as appropriate.

(c) It is the intent of the General Assembly that funds provided pursuant to this section will supplement and not supplant local funds.

REVISE SCHOOL TRANSPORTATION FUNDS REQUIREMENTS

SECTION 7.47. G.S. 115C‑240(e) reads as rewritten:

(e) The State Board of Education shall allocate to the respective local boards of education funds appropriated from time to time by the General Assembly for the purpose of providing transportation to the pupils enrolled in the public schools within this State. Such funds shall be allocated by the State Board of Education ~~in accordance with~~ based on the efficiency of the local school administrative units in transporting pupils. The efficiency of the units shall be calculated using the number of pupils to be transported, the length of bus routes, road conditions and all other circumstances affecting the cost of the transportation of pupils by school bus to the end that the funds so appropriated may be allocated on a fair and equitable basis, according to the needs of the respective local school administrative ~~units and so as to provide the most efficient use of such funds.~~ units. Such allocation shall be made by the State Board of Education at the beginning of each fiscal ~~year, except that the~~ year, based on the most recently available data from a prior school year. The State Board may reserve for future allocation ~~from time to time within such fiscal year as the need therefor shall be found to exist,~~ a reasonable amount not to exceed ~~ten percent (10%)~~ five percent (5%) of the total funds available for transportation in such fiscal year from such appropriation. Prior to April 1 of the fiscal year in which the funds are reserved, the reserved funds shall be allocated only in the event of an emergency need of a local school administrative unit. In the event reserved funds remain by April 1 of that fiscal year, the State Board shall allocate the remaining funds to all local school administrative units based on the efficiency of the units in transporting pupils. If there is evidence of inequitable or inefficient use of funds, the State Board of Education shall be empowered to review school bus routes established by local boards pursuant to G.S. 115C‑246 as well as other factors affecting the cost of the transportation of pupils by school bus.

TWELFTH GRADE TRANSITION PROGRAM/SCHOLARPATH

SECTION 7.48. Of funds appropriated to the Department of Public Instruction by this act, the Department shall use up to two million five hundred thousand dollars ($2,500,000) in nonrecurring funds for each year of the 2023‑2025 fiscal biennium to contract with MyScholar, LLC, to use the ScholarPath platform to create the Twelfth Grade Transition Program for all high school students. The Program shall consist of an education planning and communication platform that helps students and parents prepare for transition to twelfth grade, regardless of public school unit participation. The platform shall utilize O*NET data and additional student surveys to connect and match students to pathways that meet the interests of the students, current workforce initiatives, and opportunities in high‑demand careers. The platform shall give students the ability to be connected to colleges, the workforce, and the military, while protecting student data through de‑individualized and encrypted methods. The platform shall be accessible by single sign‑on through any North Carolina school‑provided email. The data collected shall be able to be housed in the State and shall be used to help identify the workforce needs in the State. MyScholar, LLC, shall provide requested information to the Economic Development Partnership of North Carolina, Department of Labor, and the Department of Public Instruction.

STUDY FOR STUDENTS WITH EXTRAORDINARY COSTS/REPORT

SECTION 7.49. As used in this section, Approved School means a private school with approved nonpublic education programs providing special education for students with intensive needs. The Department of Public Instruction shall study the following and report any legislative recommendations based on the outcomes of the study to the House Appropriations Committee on Education, the Senate Appropriations Committee on Education/Higher Education, and the Joint Legislative Education Oversight Committee by January 15, 2024:

(1) A method of improving options for children with disabilities with intensive needs which require private placement in an Approved School consistent with the student's individualized education program (IEP).

(2) A method of determining that placement in an Approved School is the means that most appropriately suits the child's individual needs.

(3) Extraordinary costs incurred by the public school unit by student placement in Approved Schools.

(4) Methods of creating a network of Approved Schools into which a child with disabilities with intensive needs may be placed consistent with the student's IEP.

(5) A method of prioritizing dispersal of funds to public school units to assist with the cost associated with enrolling in an Approved School in early grades to incentivize public school units to enroll students in the Approved Schools at the earliest appropriate age.

(6) Recommendations on the proportion of a student's extraordinary cost to be paid from local, State, and federal sources, respectively, and to identify existing funds at each level that may be available for the purposes studied pursuant to this section.

(7) A method to monitor overidentification of children with disabilities with intensive needs.

(8) Methods to allow for Medicaid reimbursement for additional services, such as transportation, and expanding the eligible age range to receive reimbursement for services.

(9) An estimated range of costs associated with implementing the studied methods.

(10) The advisability of one or more pilot programs with one or more Approved Schools.

LEADERSHIP DASHBOARD AND LEARNING RECOVERY/SAS

SECTION 7.52.(a) Of the funds appropriated to the Department of Public Instruction by this act, the sum of four hundred sixty‑five thousand dollars ($465,000) in recurring funds for each year of the 2023‑2025 fiscal biennium shall be used to continue partnering with SAS Institute, Inc. (SAS), to continue funding the North Carolina Leadership Dashboard and to support SAS as it expands analytics work in cooperation with the Department.

SECTION 7.52.(b) Of the funds appropriated to the Department of Public Instruction by this act, the sum of five hundred fifty thousand dollars ($550,000) in nonrecurring funds for each year of the 2023‑2025 fiscal biennium shall be used to continue to partner with SAS to fund learning recovery analysis, student projections to pre‑pandemic expected performance, and web reporting on year‑over‑year modeling for learning recovery.

SPECIAL NEEDS PILOT PROGRAM

SECTION 7.53. Of the funds appropriated to the Department of Public Instruction, the sum of nine hundred seventy‑five thousand dollars ($975,000) in nonrecurring funds for each year of the 2023‑2025 fiscal biennium shall be used to contract with Amplio Learning Technologies, Inc., to create a new pilot program (Program) for a special education digital intervention software platform in Alamance County Schools, Catawba County Schools, and Nash County Schools to increase opportunities for students with special needs. The Program shall focus primarily on students receiving interventions for speech language and reading development, including English language learners, to provide more optimized progress for the interventions. To provide more effective and efficient opportunities for Medicaid billing for speech language pathologists (SLP) services and dyslexia‑related services, the platform chosen should include digital evidence‑based curricula specifically aligned to speech, language, and literacy intervention goals. The chosen solution should include real‑time automatic measurements, data collection, and documentation, as well as goal tracking and administrative dashboards. The platform chosen should be a web‑based application accessible on multiple devices allowing flexible application across classroom‑based, small group, and individual intervention models and utilized by a variety of intervention team members, including special educators, SLPs, Reading Interventionists, SLP assistants, and educational aides. The Department of Public Instruction shall report on the results of the Program to the Joint Legislative Oversight Committee and the Fiscal Research Division by October 15, 2025. The report shall include at least (i) a comparison of Medicaid reimbursements paid out to participating public school units compared against public school units that did not participate in the Program and (ii) a comparison of Medicaid reimbursements paid out to public school units after participating in the Program compared against Medicaid reimbursements paid out to participating public school units prior to their participation in the Program.

INCREASE AMOUNT FOR DEVELOPMENTAL DAY CENTERS/CARRY FORWARD GRANT RESERVE/REPORT

SECTION 7.54.(a) From funds available to the Developmental Day Center program, the Department of Public Instruction shall set the funding rate for each eligible student enrolled in a Center at up to a maximum of one thousand three hundred fifty dollars ($1,350) per month.

SECTION 7.54.(b) Any unexpended and unencumbered funds at the end of each fiscal year from the funds available to the Developmental Day Center program shall not revert to the General Fund but shall be transferred by the Department to a reserve to establish a grant program for Developmental Day Centers to be administered in accordance with subsection (c) of this section.

SECTION 7.54.(c) Beginning with the 2023‑2024 fiscal year, when the balance of the reserve provided for in subsection (b) of this section reaches the sum of at least fifty thousand dollars ($50,000) in a fiscal year, then the Department of Public Instruction shall solicit applications from licensed, community‑based Developmental Day Centers approved by the Department of Public Instruction, Exceptional Children Division, for grants to the Developmental Day Center. The grant application shall require documentation of the expenditures for which the grant is being requested and any other information requested by the Department. Local school administrative units shall not be eligible for the receipt of grant funds under this section. Any unexpended funds in the reserve shall be carried forward each fiscal year to be used for the purposes of subsections (b) and (c) of this section.

SECTION 7.54.(d) By March 15 of each fiscal year in which grants are awarded pursuant to subsection (c) of this section, the Department of Public Instruction shall report to the Joint Legislative Education Oversight Committee on at least the following:

(1) The Developmental Day Centers that received an award of a grant.

(2) The balance of the reserve.

(3) The number of grant recipients.

(4) The dollar amount of each grant.

(5) The type of expenditure covered by each grant.

SECTION 7.54.(e) Regardless of whether the Department awards any grants pursuant to subsection (c) of this section, the Department shall report by October 15 of each year funds are received for Developmental Day Centers to the Joint Legislative Education Oversight Committee on at least the following related to Developmental Day Centers:

(1) The number of students enrolled in Developmental Day Centers.

(2) The average funding rate for each eligible student enrolled in a Center.

(3) The percentage of eligible students enrolled in Centers that warranted dispersal of the maximum funding amount per month.

(4) The number of staffing vacancies in Centers, disaggregated by each Center.

(5) Any other information the Department deems relevant.

SECTION 7.54.(f) Subsection (b) of this section becomes effective June 30, 2023.

CTE MODERNIZATION AND EXPANSION

SECTION 7.55. Of the funds appropriated to the Department of Public Instruction by this act, up to two million dollars ($2,000,000) in nonrecurring funds for each year of the 2023‑2025 fiscal biennium shall be used to create a grant program for modernization of Career and Technical Education (CTE) programming, materials, training, and professional development for courses conducted in grades six through 12. The Department shall establish a grant program for each school year of the 2023‑2025 fiscal biennium to which a public school unit or regional partnership of more than one public school unit may apply to receive funds if a school within the unit or partnership has an existing CTE program. Grant recipients shall use the funds distributed to them under this section to procure and implement an online digital CTE learning platform containing comprehensive courses with lesson plans, media‑rich content and activities, and interactive assessments that align with the North Carolina Career and Technical Education Standards. The platform shall have modules that assist teachers in preparing students for high‑wage, high‑growth career areas. By December 15, 2023, the Department shall select approved providers to guarantee consistency throughout the State. Any selected digital CTE learning platform shall include at least all of the following components:

(1) Instructional strategies and guided lesson plans to assist teachers with classroom implementation and instructional differentiation.

(2) Media‑based instructional content for providing demonstrations and instruction on skills required for applicable career areas.

(3) Multiple methods of delivery of instruction, including at least face‑to‑face, self‑paced, and distance or hybrid learning.

(4) Guided projects and activities to incorporate hands‑on application of skills.

(5) A focus on mastery‑based learning.

(6) Reporting features to provide data on student progress.

(7) Guidance for students to obtain industry‑recognized certifications.

(8) Career connections to provide examples of career opportunities following graduation from high school.

DPI FUND CODE FLEXIBILITY

SECTION 7.56. As part of the certification of the budget for the 2023‑2025 fiscal biennium, the Department of Public Instruction, in consultation with the Office of State Budget and Management and the Fiscal Research Division, shall redefine the fund codes composing the State Public School Fund as necessary to facilitate effective public school unit budgeting and cash management in preparation for the implementation of the North Carolina Financial System. The Department, in consultation with the Office of State Budget and Management and the Fiscal Research Division, may also move the State Textbook Fund to Budget Code 23510 as necessary to facilitate effective public school unit budgeting and cash management in preparation for the implementation of the North Carolina Financial System.

ENHANCED SCHOOL BUS STOP ARM GRANTS

SECTION 7.57.(a) For the purposes of this section, the following definitions apply:

(1) Extended mechanical stop signal. – A mechanical stop signal that is a minimum of 60 inches away from the side of the school bus when extended, whether operated independently or in conjunction with a shorter mechanical stop signal.

(2) Illuminated mechanical stop signal. – A mechanical stop signal that is illuminated with a light‑emitting diode (LED) light source.

(3) Mechanical stop signal. – A retractable mechanical arm with a stop sign and red flashing lights attached to the end of the arm that is mounted to the driver side of a school bus and used to stop traffic while students disembark the bus, as referenced in G.S. 20‑217, and in conformity with Standard No. 131 of Part 571 of the Federal Motor Vehicle Safety Standards.

(4) School bus. – As defined in G.S. 20‑4.01(27).

SECTION 7.57.(b) With the funds appropriated to the Department of Public Instruction by this act for this purpose, the Superintendent of Public Instruction shall establish the Enhanced School Bus Stop Arm Grant Program (Program) for the 2023‑2024 fiscal year to administer funds to public school units to add, upgrade, or replace mechanical stop signals on school buses with either illuminated mechanical stop signals or extended mechanical stop signals to increase the safety of students when disembarking or boarding the bus.

SECTION 7.57.(c) The Superintendent shall develop the application process for the Program and inform public school units how to apply. At a minimum, the Superintendent shall consider the type and number of stop signal additions, upgrades, or replacements the public school unit proposes to complete and the number of bus routes or stops that are known to pose a significant safety risk.

SECTION 7.57.(d) No later than April 15, 2024, the Superintendent shall submit a report to the Joint Legislative Education Oversight Committee containing at least the following information:

(1) Which public school units received grants and in what amounts.

(2) Whether the public school unit purchased (i) extended mechanical stop signals, (ii) illuminated mechanical stop signals, or (iii) both.

(3) What outstanding need remains, if any, including the amount needed to fulfill remaining grant requests.

(4) The impact of the program on student safety.

(5) Recommendations for additional school bus mechanical stop signal technology or implementation.

ELIMINATE STUDENT COPAY FOR REDUCED‑PRICE MEALS

SECTION 7.58. Funds appropriated from the General Fund to the Department of Public Instruction by this act for reduced‑price school meal copays shall be used to provide school breakfasts and lunches at no cost to students of all grade levels that qualify for reduced‑price meals under the National School Lunch Program in the current school year. If the funds are insufficient to provide school meals at no cost to students qualifying for reduced‑price meals, the Department of Public Instruction may use funds appropriated to the State Aid for Public Schools fund for this purpose.

CEP MEAL PROGRAM INCENTIVE

SECTION 7.59.(a) Program; Purpose. – The Department of Public Instruction shall establish the CEP Meal Program Incentive for the 2023‑2025 fiscal biennium to expand public school participation in the federal Community Eligibility Provision (CEP) program to increase the number of students with access to healthy, cost‑free school breakfast and lunch. The incentive program shall be available to public school units for the 2024‑2025 fiscal year.

SECTION 7.59.(b) Eligibility. – A public school unit or school within a public school unit is eligible for the incentive program if the public school unit or a school within a public school unit qualifies for the CEP program and the qualifying public school unit or school did not participate in the CEP program in the 2023‑2024 fiscal year.

SECTION 7.59.(c) Application. – By January 15, 2024, the Department shall develop the application for the incentive program and make it available to public school units. Public school units or individual schools shall submit their applications by March 1, 2024. At a minimum, the application shall include the following information:

(1) The school or schools that will participate in the CEP program.

(2) The Identified Student Percentage (ISP) for the school or schools for the 2024‑2025 school year.

(3) The number of students enrolled in the school or schools for the 2024‑2025 school year.

(4) Participation rates in the National School Breakfast and Lunch programs for the 2023‑2024 school year for the schools requesting to receive the incentive.

SECTION 7.59.(d) Selection. – By April 30, 2024, the Department shall determine whether each applicant is eligible to participate in the incentive program. The Department shall then award grants to all eligible public school units and schools. If there are insufficient funds to award grants to all eligible public school units or schools, the Department shall first prioritize awarding grants to public school units and schools with an Identified Student Percentage (ISP) of greater than or equal to fifty‑five percent (55%) and then prioritize awarding grants to those schools that will draw the greatest federal match.

SECTION 7.59.(e) Grants. – The Department shall issue State reimbursements to participating public school units and schools to supplement federal reimbursements of school meals. State reimbursement shall equal the difference between the federal free rate and the federal paid rate for the number of meals served at the participating schools equal to a 0.2 multiplier of the ISP for the participating schools. State and federal reimbursements shall not exceed one hundred percent (100%) of the federal free rate of meals served. Schools utilizing the incentive shall offer breakfast after the bell and in the classroom.

SECTION 7.59.(f) Nonsupplant Requirement. – A public school unit or school that receives incentive funds shall use the funds to supplement and not supplant local current expense funds.

SECTION 7.59.(g) Report. – No later than January 1, 2025, the Department shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division at least the following information:

(1) The number of schools that utilized the incentive.

(2) The number of students that received free meals that would not have otherwise received free meals had the school not utilized the incentive.

(3) The amount of federal and State money participating public school units and schools received.

(4) Any increase on student success due to the school's utilization of the incentive and participation in the program.

SECTION 7.59.(h) Administration. – The Department may use up to five hundred thousand dollars ($500,000) of the funds appropriated to the Department for the administrative costs of running the incentive program.

NO ADMINISTRATIVE PENALTY FOR UNPAID MEAL DEBT

SECTION 7.60.(a) G.S. 115C‑264 is amended by adding a new subsection to read:

(d) Governing bodies of public school units shall not impose administrative penalties on a student for unpaid school meal debt. Administrative penalties include the following:

(1) Withholding student records, including transcripts, report cards, attendance records, and health records.

(2) Not allowing a student to participate in graduation or receive a diploma.

SECTION 7.60.(b) G.S. 115C‑218.75 is amended by adding a new subsection to read:

(n) Unpaid Meal Debt. – If a charter school participates in the school nutrition program, the charter school may not impose administrative penalties on a student for unpaid school meal debt in accordance with G.S. 115C‑264(d).

SECTION 7.60.(c) G.S. 115C‑238.66 is amended by adding a new subdivision to read:

(22) Unpaid meal debt. – If a regional school participates in the school nutrition program, the regional school may not impose administrative penalties on a student for unpaid school meal debt in accordance with G.S. 115C‑264(d).

SECTION 7.60.(d) G.S. 116‑239.8(b) is amended by adding a new subdivision to read:

(24) Unpaid meal debt. – If a laboratory school participates in the school nutrition program, the laboratory school may not impose administrative penalties on a student for unpaid school meal debt in accordance with G.S. 115C‑264(d).

HIGH SCHOOL REMOTE INSTRUCTION FLEXIBILITY PILOT

SECTION 7.61.(a) Notwithstanding G.S. 115C‑84.3(c), for the 2023‑2024 through 2027‑2028 school years, the Superintendent of Public Instruction shall select 10 local school administrative units to participate in a remote instruction flexibility pilot. The pilot shall authorize local boards of education to establish a school calendar for high schools that uses up to five days or 30 hours of remote instruction, as defined in G.S. 115C‑84.3, to ensure that all final examinations for the fall semester are administered to students prior to December 31 of the school year. The remote instruction days or hours used as part of the pilot shall be in addition to any days or hours authorized by G.S. 115C‑84.3(b).

SECTION 7.61.(b) The 10 local school administrative units that the Superintendent selects to participate in the pilot shall be geographically diverse. For purposes of this section, geographically diverse means a group of local school administrative units that represents the varying climates of the different regions of the State, including at least one local school administrative unit that would qualify for a good‑cause school calendar waiver under G.S. 115C‑84.2(d), regardless of whether the local school administrative unit has applied for the waiver for the current school year.

SECTION 7.61.(c) Each participating local board of education shall, beginning July 15, 2024, and ending July 15, 2028, annually report the following to the Superintendent of Public Instruction:

(1) The high schools that participated in the pilot.

(2) A copy of the high school calendars that designate all remote instruction time, including whether the instruction was remote under the pilot or due to an emergency as authorized under G.S. 115C‑84.3.

(3) The methods for providing instruction outside of the school facility.

(4) The impact on academic outcomes for students in comparison to the recent years where final examinations for the fall semester were administered after December 31.

(5) Identified advantages to using the pilot calendar and additional remote learning.

(6) Identified disadvantages to using the pilot calendar and additional remote learning.

SECTION 7.61.(d) The Superintendent of Public Instruction shall annually summarize the information provided by the participating local boards of education and provide a report of that information, including a copy of each participating local board of education's report, to the Joint Legislative Education Oversight Committee beginning September 15, 2024, and ending September 15, 2028.

SPARKNC PILOT FOR HIGH‑TECH LEARNING ACCELERATOR CREDIT

SECTION 7.62.(a) There is established the SparkNC Pilot Program (Program) for the 2023‑2025 fiscal biennium. The pilot program authorizes SparkNC, a North Carolina nonprofit corporation, in partnership with selected public school units, to develop a nontraditional, student‑driven pathway through which students may select and complete modular learning experiences that, when aggregated, will provide a competency‑based equivalency to a traditional elective course credit. SparkNC shall provide a menu of modular learning experiences that include opportunities for work‑based learning. The competency‑based elective credit shall be denoted on student transcripts as High‑Tech Learning Accelerator and focused on science, technology, engineering, and mathematics (STEM).

SECTION 7.62.(b) Each public school unit partnering with SparkNC in accordance with this section (partnering public school units) shall enter a memorandum of understanding with SparkNC to meet certain requirements for the Program. These requirements shall include the provision of a physical learning lab staffed by a learning lab facilitator that will provide a site for collaborative learning and virtual networking. Learning lab facilitators shall facilitate interdistrict instruction, provide student advising, design learning experiences, coordinate with industry partners, and validate student work.

SECTION 7.62.(c) Notwithstanding any State Board of Education rules, partnering public school units shall award the elective credit in High‑Tech Learning Accelerator to any student who completes a combination of modules determined by SparkNC to provide the competency‑based elective credit in that course upon verification of successful completion of the learning experiences and integrity of student work products by the learning lab facilitator. The elective credit shall be denoted as achieved mastery on the student's transcript. A student's participation in modules but failure to earn elective credit shall not be denoted as a fail on the student's transcript.

SECTION 7.62.(d) The following provisions shall apply to the Program:

(1) Notwithstanding G.S. 115C‑295 and any related State Board of Education rules, learning lab facilitators shall not be required to hold teacher licensure but shall meet the standards established by the memorandum of understanding. Learning lab facilitators shall be the teacher of record for students enrolled in the Program. Additional non‑licensed personnel may be contracted with on a full‑ or part‑time basis for the purpose of providing timely, real‑world content, industry expertise, and student learning experiences. Learning lab facilitators and contract personnel with the Program shall be subject to the requirements of Part 6 of Article 22 of Chapter 115C of the General Statutes (Criminal History Checks).

(2) For the purposes of student participation in the Program, the requirements of Part 2 of Article 8 of Chapter 115C of the General Statutes (Calendar) shall not apply. Students may continue to participate in the Program and aggregate learning experiences throughout the time the students are enrolled in the public school unit and shall not be limited to a semester or school year. Learning experiences may be provided to students in person, remotely, or through asynchronous modules.

(3) Notwithstanding G.S. 115C‑316 or any other law or rule to the contrary, public school units shall not be required to pay learning lab facilitators in accordance to the salary schedule used for other teachers employed by the public school unit.

(4) If a course in computer science is required for high school graduation, completion of the competency‑based elective credit of High‑Tech Learning Accelerator shall be deemed to satisfy that requirement if approved by the Superintendent of Public Instruction upon recommendation of the Department of Public Instruction that the course meets the required domains of computer science.

SECTION 7.62.(e) For the 2023‑2024 and 2024‑2025 school years, the following public school units may partner with SparkNC to participate in the Program:

(1) Asheboro City Schools

(2) Cabarrus County Schools

(3) Chapel Hill‑Carrboro City Schools

(4) Chatham County Schools

(5) Cumberland County Schools

(6) Edgecombe County Schools

(7) Elizabeth City‑Pasquotank Public Schools

(8) Granville County Schools

(9) Guilford County Schools

(10) Lexington City Schools

(11) Mt. Airy City Schools

(12) New Hanover County Schools

(13) Rockingham County Schools

(14) Rowan‑Salisbury Schools

(15) Scotland County Schools

(16) Vance County Schools

(17) Wake County Public School System

(18) Warren County Schools

SECTION 7.62.(f) The nonrecurring funds appropriated to the Department of Public Instruction by this act in the 2023‑2024 fiscal year to be used to contract with SparkNC to provide students a nontraditional pathway to earn a competency‑based High‑Tech Learning Accelerator elective credit shall not revert to the General Fund at the end of the 2023‑2024 fiscal year but shall remain available until the end of the 2024‑2025 fiscal year.

SECTION 7.62.(g) SparkNC, in consultation with the partnering public school units, shall provide an interim report to the Joint Legislative Education Oversight Committee by March 1, 2025, on the following information, disaggregated for each public school unit by grade level and school, when possible:

(1) Number and percentage of student participation in the Program.

(2) Student retention and persistence in the Program.

(3) Student completion of the High‑Tech Learning Accelerator elective credit.

(4) Student evaluation of the Program.

(5) Student interest in science, technology, engineering, and mathematics following participation in the Program.

(6) Cost per student for Program participation.

(7) The number and percentage of courses awarded credit that demonstrate concentration leading toward a career pathway.

(8) Public school unit persistence in the Program.

(9) Recommendations for Program changes, including recommended legislative changes and changes needed to ensure that federal funding for career and technical education can be used for the Program.

SECTION 7.62.(h) SparkNC, in consultation with the partnering public school units, shall provide a final report to the Joint Legislative Education Oversight Committee by March 1, 2026, on the following information, disaggregated for each public school unit by grade level and school, when possible:

(1) Number and percentage of student participation in the Program.

(2) Student retention and persistence in the Program.

(3) Student completion of the High‑Tech Learning Accelerator elective credit.

(4) Student evaluation of the Program.

(5) Student interest in science, technology, engineering, and mathematics following participation in the Program.

(6) Cost per student for Program participation.

(7) The number and percentage of courses awarded credit that demonstrate concentration leading toward a career pathway.

(8) Public school unit persistence in the Program.

(9) Recommendations for Program changes, including recommended legislative changes and changes needed to ensure that federal funding for career and technical education can be used for the Program.

(10) Recommendations on development of a mastery transcript.

EXTENDED LEARNING AND INTEGRATED STUDENT SUPPORTS COMPETITIVE GRANT PROGRAM

SECTION 7.63.(a) Of the funds appropriated by this act for the At‑Risk Student Services Alternative School Allotment for the 2023‑2025 fiscal biennium, the Department of Public Instruction shall use up to seven million dollars ($7,000,000) for the 2023‑2024 fiscal year and up to seven million dollars ($7,000,000) for the 2024‑2025 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 7.63.(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, antisocial 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 7.63.(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 antisocial 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 7.63.(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 7.63.(e) The Department of Public Instruction shall provide an interim report on the Program to the Joint Legislative Education Oversight Committee by September 15, 2024, with a final report on the Program by September 15, 2025. 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 grant programs.

PROHIBITION AGAINST THREE‑CUEING

SECTION 7.64.(a) G.S. 115C‑83.3 is amended by adding a new subdivision to read:

(9a) Three‑cueing system means a model of teaching students to read based on meaning, structure and syntax, and visual cues, also known as MSV.

SECTION 7.64.(b) G.S. 115C‑83.4B is amended by adding a new subsection to read:

(c) The Early Literacy Program shall not use a three‑cueing system, as defined in G.S. 115C‑83.3(9a), or a curriculum with visual memory as the primary basis for teaching word recognition in any instruction or intervention provided to students in an NC Pre‑K program.

SECTION 7.64.(c) Part 1A of Article 8 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑83.12. Prohibition against three‑cueing system model of teaching students to read.

Local school administrative units shall not use a three‑cueing system or a curriculum with visual memory as the primary basis for teaching word recognition in any instruction or intervention provided to students in grades kindergarten through three.

SECTION 7.64.(d) G.S. 115C‑150.12C is amended by adding a new subdivision to read:

(3a) Literacy instruction. – The board of trustees shall ensure that a three‑cueing system, as defined in G.S. 115C‑83.3(9a), or a curriculum with visual memory as the primary basis for teaching word recognition is not used in any instruction or intervention provided to students in grades kindergarten through three.

SECTION 7.64.(e) G.S. 115C‑218.85(b) is amended by adding a new subdivision to read:

(5) The charter school shall not use a three‑cueing system, as defined in G.S. 115C‑83.3(9a), or a curriculum with visual memory as the primary basis for teaching word recognition in any instruction or intervention provided to students in grades kindergarten through three.

SECTION 7.64.(f) G.S. 116‑239.8(b)(2) is amended by adding a new sub‑subdivision to read:

e. The chancellor shall ensure that a three‑cueing system, as defined in G.S. 115C‑83.3(9a), or a curriculum with visual memory as the primary basis for teaching word recognition is not used in any instruction or intervention provided to students in grades kindergarten through three.

SECTION 7.64.(g) G.S. 115C‑269.20(a)(2)a1. reads as rewritten:

a1. Coursework in the Science or Reading, as defined in G.S. 115C‑83.3. This coursework shall not include preparation to use a three‑cueing system, as defined in G.S. 115C‑83.3(9a), or a curriculum with visual memory as the primary basis for teaching word recognition to students in grades kindergarten through three.

SECTION 7.64.(h) This section is effective when it becomes law and applies beginning with the 2023‑2024 school year.

PROFESSIONAL DEVELOPMENT FOR HOLOCAUST EDUCATION FUNDS NOT TO REVERT

SECTION 7.65.(a) Notwithstanding any provision of law to the contrary, the nonrecurring funds appropriated to the Department of Public Instruction in S.L. 2021‑180 for the 2022‑2023 fiscal year for Holocaust and genocide education pursuant to Section 7.84 of S.L. 2021‑180 shall not revert to the General Fund at the end of the 2022‑2023 fiscal year, but shall remain available until the end of the 2023‑2024 fiscal year.

SECTION 7.65.(b) This section becomes effective June 30, 2023.

SALARY SUPPLEMENTS FOR TEACHERS IN ADVANCED TEACHING ROLES SCHOOLS

SECTION 7.66. Article 20 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑312. Salary supplements for teachers in Advanced Teaching Roles schools.

(a) For purposes of this section, the following definitions shall apply:

(1) Adult leadership teacher. – A teacher who meets the following criteria:

a. Works in the classroom providing instruction for at least thirty percent (30%) of the instructional day.

b. Leads a team of between three and eight teachers.

c. Shares responsibility for the performance of the students of all teachers on the team identified in sub‑subdivision b. of this subdivision.

d. Is not a school administrator.

(2) Advanced teaching role. – Additional responsibility for a teacher in an Advanced Teaching Roles school, as developed by a local board of education pursuant to G.S. 115C‑311.

(3) Advanced Teaching Roles unit. – A local school administrative unit with at least one Advanced Teaching Roles school.

(4) Classroom excellence teacher. – A teacher who meets the following criteria:

a. Is a teacher in an advanced teaching role.

b. Assumes and maintains responsibility for at least twenty percent (20%) of additional students as compared to the most recent prior school year in which the teacher did not receive a salary supplement pursuant to this section.

c. Is a member of a team of teachers led by an adult leadership teacher pursuant to sub‑subdivision b. of subdivision (1) of this subsection.

(5) Teacher. – A classroom teacher in an Advanced Teaching Roles school who is not instructional support personnel.

(b) Notwithstanding G.S. 115C‑311, to the extent funds are made available for this purpose, the State Board of Education shall award funds to local school administrative units for annual salary supplements for teachers in accordance with this section. Advanced Teaching Roles units shall designate up to fifteen percent (15%) of the teachers in each Advanced Teaching Roles school as adult leadership teachers and five percent (5%) of the teachers in each Advanced Teaching Roles school as classroom excellence teachers. Advanced Teaching Roles units shall provide salary supplements for those teachers as follows:

(1) Ten thousand dollars ($10,000) for adult leadership teachers.

(2) Three thousand dollars ($3,000) for classroom excellence teachers.

(1) Loss of a salary supplement received pursuant to this section for any reason shall not be considered a demotion under Part 3 of Article 22 of Chapter 115C of the General Statutes.

(2) A teacher is eligible to continue receiving a salary supplement pursuant to this section as long as he or she remains an adult leadership teacher or a classroom excellence teacher.

(3) A teacher is eligible to receive no more than one annual salary supplement pursuant to this section at any time.

REALIGN ADVANCED TEACHING ROLES

SECTION 7.67.(a) No later than 30 days after the date this act becomes law, the State Board of Education shall issue a new Request for Proposal (RFP) for local school administrative units to participate in the Advanced Teaching Roles Program pursuant to G.S. 115C‑311. As part of this new RFP, the State Board shall do the following:

(1) Take into account the additional recurring funds appropriated to the Department of Public Instruction in this act for the 2023‑2025 fiscal biennium.

(2) Make every effort to ensure that local school administrative units can participate in the Program.

(3) Maximize the diversity of geography and student population among participating local school administrative units.

SECTION 7.67.(b) Notwithstanding G.S. 115C‑311, beginning in the 2023‑2024 school year, as a part of the RFP required pursuant to subsection (a) of this section, the State Board of Education shall authorize New Hanover County Schools to participate in the Advanced Teaching Roles Program (Program) and, to the extent funds are available in the Program, award State funds to New Hanover County Schools for an initial term, if the following occur:

(1) New Hanover County Schools submits a proposal to participate in the Program by July 1, 2023.

(2) The proposal submitted pursuant to subdivision (1) of this subsection is consistent with the requirements of G.S. 115C‑311(b).

Daily Deposit Amount Adjustment

SECTION 7.68. G.S. 115C‑445 reads as rewritten:

§ 115C‑445. Daily deposits.

Except as otherwise provided by law, all moneys collected or received by an officer, employee or agent of a local school administrative unit or an individual school shall be deposited in accordance with this section. Each officer, employee and agent of a local school administrative unit or individual school whose duty it is to collect or receive any taxes or other moneys shall deposit his collections and receipts daily. If the board of education gives its approval, deposits shall be required only when the moneys on hand amount to as much as ~~two hundred fifty dollars ($250.00),~~ one thousand five hundred dollars ($1,500), but in any event a deposit shall be made on the last business day of the month. All deposits shall be made with the finance officer or in an official depository. Deposits in an official depository shall be immediately reported to the finance officer or individual school treasurer by means of a duplicate deposit ticket. The finance officer may at any time audit the accounts of any officer, employee or agent collecting or receiving any taxes or other moneys, and may prescribe the form and detail of these accounts. The accounts of such an officer, employee or agent shall be audited at least annually.

Plasma Games GRANT PROGRAM

SECTION 7.69.(a) The Department of Public Instruction shall create a grant program for public school units to apply for funds to contract with Plasma Games, Inc., for the use of educational software to be used in science, technology, engineering, and math (STEM) and career and technical education (CTE) courses. The Department shall make an application available to public school units by November 15, 2023, and August 1 of each year thereafter that funds are made available for this purpose. Public school units shall submit applications by January 15, 2024, and October 1 of each year thereafter that funds are available. The Department shall make determinations on grant recipients by March 15, 2024, and December 1 of each year thereafter that funds are made available. The Department shall prioritize issuing grants to public school units that participated in the pilot program created pursuant to Section 3.5(a)(25) of S.L. 2021‑25, as amended by S.L. 2021‑180, and are actively utilizing license grants pursuant to that pilot program.

SECTION 7.69.(b) The Department shall report to the Joint Legislative Education Oversight Committee beginning May 15, 2024, and each year thereafter that funds are made available for the program created by subsection (a) of this section, on the outcomes of the program. The report shall include at least the following:

(1) The number of public school units that submitted grant applications.

(2) The number of grants awarded.

(3) The percentage of grants that were awarded to public school units that participated in the pilot program created pursuant to Section 3.5(a)(25) of S.L. 2021‑25, as amended by S.L. 2021‑180. This subdivision applies only to the report for May 15, 2024.

(4) The average size of grants awarded.

(5) The average daily membership of each public school unit that received grant awards.

(6) The ratio of grant funds received by each public school unit to the average daily membership of the public school unit.

(7) The total number of licenses in active use in the State.

(8) Any other information the Department deems relevant.

NC Education Corps Reporting

SECTION 7.70. The North Carolina Education Corps shall report to the Joint Legislative Education Oversight Committee by February 15, 2024, on the results of the program created pursuant to Section 3.5(a)(7) of S.L. 2021‑25, as amended by S.L. 2021‑180. The report shall include at least the following:

(1) The number of tutors trained using funds provided.

(2) The number of students who worked with tutors trained by the program.

(3) The average amount of funding spent by the North Carolina Education Corps per tutor trained.

(4) The number of tutors hired by public school units after completion of the training provided by the program.

(5) Which public school units utilized tutors trained by the program.

(6) The impacts on student outcomes in public school units that utilized tutors trained by the program.

(7) The amount spent by each public school unit to hire tutors trained by the program.

(8) Any other information the North Carolina Education Corps deems relevant.

ALLOW NONPROFITS TO PROVIDE ABUSE/SEX TRAFFICKING TRAINING TO EDUCATORS

SECTION 7.71. G.S. 115C‑375.20 reads as rewritten:

§ 115C‑375.20. Child sexual abuse and sex trafficking training program required.

(a) Definitions. – The following definitions shall apply in this section:

(1) School personnel. – Teachers, instructional support personnel, principals, and assistant principals. This term may also include, in the discretion of the employing entity, other school employees who work directly with students in grades kindergarten through 12.

(b) Each employing entity shall adopt and implement a child sexual abuse and sex trafficking training program for school personnel who work directly with students in grades kindergarten through 12 that provides education and awareness training related to child sexual abuse and sex trafficking, including, but not limited to, best practices from the field of prevention, the grooming process of sexual predators, the warning signs of sexual abuse and sex trafficking, how to intervene when sexual abuse or sex trafficking is suspected or disclosed, legal responsibilities for reporting sexual abuse or sex trafficking, and available resources for assistance. This training may be provided by local nongovernmental organizations with expertise in these areas, local law enforcement ~~officers,~~ officers or other officers of the ~~court.~~ court, or nonprofit organizations with over 10 years of experience in providing research‑based child sexual abuse prevention curriculum. All school personnel who work with students in grades kindergarten through 12 shall receive two hours of training consistent with this section in even‑numbered years beginning in 2020.

(c) No entity required to adopt a child sexual abuse and sex trafficking training program by G.S. 115C‑47(64), 115C‑218.75(g), 115C‑238.66(15), or 116‑239.8(b)(17), or its members, employees, designees, agents, or volunteers, shall be liable in civil damages to any party for any loss or damage caused by any act or omission relating to the provision of, participation in, or implementation of any component of a child sexual abuse and sex trafficking training program required by this section, unless that act or omission amounts to gross negligence, wanton conduct, or intentional wrongdoing. Nothing in this section shall be construed to impose any specific duty of care or standard of care on an entity required to adopt a child sexual abuse and sex trafficking training program by G.S. 115C‑47(64), 115C‑218.75(g), 115C‑238.66(15), or 116‑239.8(b)(17).

HIGH SCHOOL DIPLOMA ENDORSEMENTS

SECTION 7.72.(a) Article 8 of Chapter 115C of the General Statutes is amended by adding a new Part to read:

Part 1D. High School Graduation.

§ 115C‑83.30. Reserved for future codification purposes.

§ 115C‑83.31. Exit standards and graduation requirements.

(a) The State Board of Education shall require the following for high school graduation:

(1) Successful completion of instruction in cardiopulmonary resuscitation as provided in G.S. 115C‑81.25(c)(10).

(2) A passing grade in the semester course on the Founding Principles of the United States of America and the State of North Carolina described in G.S. 115C‑81.45(d)(1).

(b) The following restrictions apply to the State Board of Education regarding Algebra I and high school graduation projects:

(1) The 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.

(2) The 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 as provided in G.S. 115C‑47(54a).

§ 115C‑83.32. High school diploma endorsements.

(a) 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. The Board shall develop criteria for receiving a diploma endorsement under this subsection that address the following:

(1) Courses completed by the student.

(2) Overall grade point average.

(3) Reading achievement, including the requirement that a student receive 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 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.

(4) Any additional criteria deemed necessary by the Board.

(b) The State Board of Education shall establish an arts proficiency high school diploma endorsement to encourage students to obtain a well‑rounded, high‑quality arts education. The Board shall create any form necessary for students to document their arts participation and shall provide this form to local boards of education. The Board shall develop criteria for receiving a diploma endorsement under this subsection that include the following:

(1) Completion of a minimum of four arts credits with an unweighted grade point average of 3.0 or higher in each arts credit completed by the student.

(2) Completion of a minimum of 40 hours of arts‑related extracurricular activities. To receive credit for completing these hours, a student shall meet all of the following requirements:

a. The student participates in an arts‑related extracurricular activity that is approved by the local board of education.

b. The student completes all of the required hours outside of instructional hours.

c. The student does not receive any course credit for participation in the activity.

d. The student documents the hours on the form provided by the Board to local boards of education.

(3) Any additional criteria deemed necessary by the Board.

(c) The State Board of Education shall establish a citizenship proficiency high school diploma endorsement to encourage students to demonstrate their understanding of the basics of the American government and civic life. The Board shall create any form necessary for students to document their civics participation and shall provide this form to governing bodies of local school administrative units. The Board shall develop criteria for receiving a diploma endorsement under this subsection that include at least a passing score on a civics test composed of questions from the pool of publicly available questions to be used for the civics test given by the U.S. Citizenship and Immigration Services (USCIS) as part of the naturalization interview and test issued by USCIS. The State Board shall determine the format of the civics test and the number of questions to be included in the civics test. The State Board shall require that all local school administrative units offer the civics test created pursuant to this subsection at least once per semester.

(d) The Board shall report annually to the Joint Legislative Education Oversight Committee on high school diploma endorsements as required by G.S. 115C‑156.2.

SECTION 7.72.(b) Subsection (a) of this section is effective when it becomes law. The State Board of Education shall make available arts proficiency and citizenship proficiency high school diploma endorsements, as provided under this section, to students graduating high school beginning with the 2023-2024 school year.

SECTION 7.72.(c) G.S. 115C‑12(9d) reads as rewritten:

(9d) Power to Develop Exit Standards and Graduation Requirements. –

a. ~~The Board~~ In accordance with G.S. 115C‑83.31, the Board shall require certain exit standards and may develop additional exit standards ~~that shall be~~ required for high school graduation. ~~The Board shall require the following for high school graduation:~~

1. ~~Successful completion of instruction in cardiopulmonary resuscitation as provided in G.S. 115C‑81.25(c)(10).~~

2. ~~A passing grade in the semester course on the Founding Principles of the United States of America and the State of North Carolina described in G.S. 115C‑81.45(d)(1).~~

b. ~~The following restrictions apply to the Board regarding Algebra I and high school graduation projects:~~

1. The 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.

2. The 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 as provided in G.S. 115C‑47(54a).

SECTION 7.72.(d) 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 high school diploma endorsements in accordance with G.S. 115C‑156.2.establish high school diploma endorsements as provided in G.S. 115C‑83.32.

SECTION 7.72.(e) G.S. 115C‑218.85 is amended by adding a new subsection to read:

(1) A charter school shall offer students the opportunity to earn a citizenship proficiency high school diploma endorsement consistent with G.S. 115C‑83.32(c).

(2) If necessary due to practical limitations at the charter school, a student may take the civics test required to earn the endorsement pursuant to G.S. 115C‑83.32(c) at the nearest high school to the charter school located within the local school administrative unit in which the charter school is located at the time that the nearest high school within the local school administrative unit is scheduled to offer the exam.

SECTION 7.72.(f) G.S. 115C‑156.2(b) reads as rewritten:

(b) ~~Beginning in 2019, the~~ The State Board of Education shall report to the Joint Legislative Education Oversight Committee by November 15 of each year on the following information:

(1) The number of students in career and technical education courses who earned (i) community college credit and (ii) related industry certifications and credentials.

(2) Implementation of high school diploma endorsements, including adding (i) college, (ii) career, and (iii) college and career endorsements to high school diplomas, through evaluation of at least the following data:

a. Impact on the rates of high school graduation, college acceptance and remediation, and post‑high school employment.

b. ~~Beginning with the 2019‑2020 school year, the~~ The number of students who had to retake a nationally norm‑referenced college admissions test to meet the reading benchmark score required by ~~G.S. 115C‑12(40)~~ G.S. 115C‑83.32(a) to receive a college or career high school diploma endorsement and the number of students who were not awarded a college or career high school diploma endorsement solely because of the inability to meet the benchmark score for reading required by ~~G.S. 115C‑12(40).~~G.S. 115C‑83.32(a).

c. The number of students receiving any high school diploma endorsement.

SECTION 7.72.(g) Except as otherwise provided, this section is effective when it becomes law. Subsection (f) of this section applies beginning with the report due to the Joint Legislative Education Oversight Committee on November 15, 2024.

Limited Teacher License Changes

SECTION 7.73.(a) G.S. 115C‑270.20(a)(4a) reads as rewritten:

(4a) Limited license. – A three‑year ~~nonrenewable~~ renewable license issued to an individual who meets the requirements of this subdivision. A limited license shall only be requested by the local board of education currently employing or seeking to employ the individual and shall be used for continued employment only in that local school administrative unit. The State Board shall not require individuals to demonstrate preparation through achieving a prescribed minimum score on a standardized examination for a limited license. To receive a limited license, one of the following shall be met:

a. In‑state licensee. – Both of the following are met:

1. The individual was issued an IPL or RL, but failed to fulfill examination requirements under G.S. 115C‑270.15 after three years of licensure.

2. The local board of education submits to the State Board an affidavit stating that the teacher is currently employed by that local board, is an effective teacher, and will be encouraged to continue to pursue a CPL. The affidavit shall be signed by both the principal and superintendent for the school to which the teacher is currently assigned.

b. Out‑of‑state licensee. – Both of the following are met:

1. The individual holds current teacher licensure in another state that is in good standing.

2. The local board of education submits to the State Board an affidavit stating that the local board seeks to employ the teacher, that the teacher has been employed as a licensed teacher in another state for at least three years, and that the teacher will be encouraged to pursue an IPL or CPL, as appropriate for that teacher. The affidavit shall be signed by the superintendent for the local board of education seeking to employ the teacher.

SECTION 7.73.(b) G.S. 115C‑270.30(b) is amended by adding a new subdivision to read:

(6) For a teacher renewing a limited license, an affidavit from the employing local board of education that is signed by both the principal and the superintendent for the school to which the teacher is currently assigned. The affidavit must state all of the following:

a. The teacher is currently employed by the local board of education.

b. The teacher is an effective teacher. For teachers who have available growth data under the Education Value‑Added Assessment System (EVAAS), the data must demonstrate that the teacher meets or exceeds expectations of growth.

c. The teacher will be encouraged to continue to pursue a CPL.

SECTION 7.73.(c) For limited license renewals that occur on or before July 1, 2025, the State Board of Education shall only require the teacher to meet the licensure renewal requirements in G.S. 115C‑270.30(b)(6), as enacted by subsection (b) of this section.

SECTION 7.73.(d) This section is effective when it becomes law and applies to renewal applications on or after that date.

Out‑of‑State Teacher License Reciprocity

SECTION 7.74.(a) G.S. 115C‑270.25 reads as rewritten:

§ 115C‑270.25. Out‑of‑state license applicants.

Initial applications for a continuing professional license from an individual with an out‑of‑state teacher's license shall require the applicant to provide evidence of that teacher's effectiveness, when available, as measured by the evaluation system used in that applicant's state of current licensure at the time of application, including any growth measures included in that evaluation system. An individual who does not include evidence of that teacher's effectiveness with the initial application shall only be eligible for an IPL or LL.The State Board of Education shall grant a CPL to a teacher licensed in another state with substantially similar licensure requirements who has at least three years of teaching experience and is in good standing with the other state.

SECTION 7.74.(b) This section is effective when it becomes law and applies to out‑of‑state applicants for a CPL on or after that date.

ALLOW HOME SCHOOL STUDENTS TO SIT FOR AP/PSAT EXAMS

SECTION 7.75.(a) G.S. 115C‑174.18 reads as rewritten:

§ 115C‑174.18. Opportunity to take Preliminary SAT/National Merit Scholarship Qualifying Test (PSAT/NMSQT).

Every student in the eighth through tenth grades who has completed Algebra I or who is in the last month of Algebra I shall be given an opportunity to take a version of either the Preliminary SAT/National Merit Scholarship Qualifying Test (PSAT/NMSQT) or the ~~PLAN precursor test to the ACT,~~ PreACT test, at the discretion of the local school administrative unit, one time at no cost to the student. A student receiving instruction through a home school, as provided by Part 3 of Article 39 of this Chapter, shall be eligible to participate in testing as provided in G.S. 115C‑565.1. The maximum amount of State funds used for this purpose shall be the cost of the PSAT/NMSQT.

SECTION 7.75.(b) 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 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. 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. A student receiving instruction through a home school, as provided by Part 3 of Article 39 of this Chapter, shall be eligible to participate in administration of examinations for advanced courses as provided in G.S. 115C‑565.1.

SECTION 7.75.(c) Part 3 of Article 39 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑565.1. Eligibility to participate in certain testing administration in local school administrative units.

(a) A student enrolled in a home school shall be allowed to participate in the administration of the Preliminary SAT/National Merit Scholarship Qualifying Test or the PreACT test, as offered by the local school administrative unit in accordance with G.S. 115C‑174.18, as follows:

(1) The student may take the test at a school within the local school administrative unit that the student would be assigned to if the student attended public school.

(2) The student shall have completed a course or test that shows equivalent competency to passing Algebra I.

(3) The student's parent shall be charged the cost of the test by the local school administrative unit.

(4) The student's parent, or other responsible adult designated by the parent, may be required by the local school administrative unit to serve as a proctor in order for the student to take the test, if the addition of the student would prevent the local school administrative unit from meeting the required proctor‑student ratio for that test at that school.

(b) A student enrolled in a home school shall be allowed to take any advanced course examination offered by a local school administrative unit in accordance with G.S. 115C‑174.26, as follows:

(1) The student may take the advanced course examination at a school within the local school administrative unit that the student would have been assigned to if the student attended public school.

(2) The student shall meet any requirements to take the advanced course examination established by the organization issuing that examination and the chief administrator of the home school. A local board of education shall not require the student to complete a specific advanced course to take the related examination.

(3) The student's parent shall be charged the cost of the test by the local school administrative unit.

(4) The student's parent, or other responsible adult designated by the parent, may be required by the local school administrative unit to serve as a proctor in order for the student to take the advanced course examination, if the addition of the student would prevent the local school administrative unit from meeting the required proctor‑student ratio for that examination at that school.

SEARCHES OF STUDENT'S PERSON

SECTION 7.76. Article 27 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑391.2. Searches of students.

(a) Policies adopted by governing bodies of public school units governing searches of a student's person or property shall be consistent with the provisions of this Article and the constitutions, statutes, and regulations of the United States and the State of North Carolina. All searches performed by school officials in accordance with the policies shall be executed using methods that are narrowly tailored to be minimally intrusive while investigating the suspected activity.

(b) Each policy adopted by a governing body of a public school unit in accordance with subsection (a) of this section shall require that searches of a student's person are conducted in private by one school official and one adult witness, both of whom shall be the same sex as the student. The policy may provide an exception to this requirement for searches conducted using a walk‑through metal detector, handheld wand, or other similar minimally intrusive device designed to detect weapons and regularly used for security scanning.

STATE OF THE SCHOOL ADMINISTRATION PROFESSION REPORT

SECTION 7.77.(a) G.S. 115C‑12(22) reads as rewritten:

(22) Duty to Monitor the State of the Teaching ~~Profession~~ and School Administration Professions in North Carolina. – The State Board of Education shall monitor and compile an annual report on the state of the teaching ~~profession~~ and school administration professions in North ~~Carolina that includes data on the decisions of teachers to leave the teaching profession and data on teaching positions that local boards of education are unable to fill,~~ Carolina, as provided in G.S. 115C‑289.2 and G.S. 115C‑299.5.

SECTION 7.77.(b) Article 19 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑289.2. Report on the state of the school administration profession in North Carolina.

(a) State of the School Administration Profession Report. – The State Board of Education shall monitor and compile an annual report by December 15 annually on school principals in North Carolina that includes data on the decisions of principals to leave the profession of school administration or move to a different position, as provided in subsection (b) of this section. The State Board shall adopt standard procedures for each local board of education to use in requesting information required by this report and shall require each local board of education to report the information to the State Board in a standard format adopted by the State Board.

(b) Principals Leaving Their Position. – The report shall include the following data on the decisions of principals to leave their position in the prior school year, including reasons for leaving their position:

(1) The number of principals who left the profession without remaining in the field of education.

(2) The number of principals who left their position for employment as a principal in another school in the State, including principals who left for employment within another local school administrative unit, a nonpublic school, or a charter school.

(3) The number of principals who left their position for another type of educational position and the type of educational position to which the principals moved.

(4) The number of principals who left their position in low‑performing schools as defined in G.S. 115C‑105.37.

(5) The number of principals who left their position in order to move to a low‑performing school, as defined in G.S. 115C‑105.37, and the impact of the principal recruitment supplement authorized in G.S. 115C‑285.1 on the principal's decision to accept the position at the low‑performing school.

(c) Principal and School Performance. – The State of the School Administration Profession Report prepared by the State Board of Education pursuant to this section shall analyze the relationship between the data included in subsection (b) of this section and student growth, student achievement, and school performance, as calculated by G.S. 115C‑83.15(c), including the extent to which principal attrition and mobility led to changes in school performance.

(d) Report Consolidation. – The report required by this section shall be consolidated with the report on the State of the Teaching Profession required by G.S. 115C‑299.5.

SECTION 7.77.(c) G.S. 115C‑299.5 is amended by adding a new subsection to read:

(g) Report Consolidation. – The report required by this section shall be consolidated with the State of the School Administration Profession Report required by G.S. 115C‑289.2.

SECTION 7.77.(d) This section is effective when it becomes law and applies beginning with the report due December 15, 2024.

STUDY STATUS AND COST OF CARBON MONOXIDE ALARMS AND RADON TESTING IN SCHOOLS

SECTION 7.78. The State Board of Education shall survey all identified public schools to determine the number of existing school buildings that are currently not equipped with carbon monoxide alarm and detection systems but would have to install those systems if required to be in compliance with the requirements for new buildings in Section 915 of the North Carolina State Building Code, Fire Prevention Code (non‑equipped buildings). The State Board of Education shall also survey all identified public schools to determine the need and implementation of radon gas testing. The State Board of Education shall report to the Joint Legislative Education Oversight Committee the following information no later than December 15, 2023:

(1) The number of non‑equipped buildings statewide, and by identified public school.

(2) The estimated cost statewide, and by the identified public school, to permit, install, and inspect all non‑equipped buildings with carbon monoxide alarm and detection systems and radon gas testing.

For purposes of this section, identified public schools shall refer to (i) schools in a public school unit, as defined in G.S. 115C‑5(7a), except charter schools, (ii) the North Carolina School of Science and Mathematics, (iii) the University of North Carolina School of the Arts, (iv) schools operated by the Department of Health and Human Services, and (v) schools operated by the Division of Juvenile Justice of the Department of Public Safety.

PROCEDURAL CORRECTION FOR S.L. 2023‑107

SECTION 7.79. Subsection (c) of Section 6 of S.L. 2023‑107 is reenacted.

CLARIFY THAT NONPUBLIC SCHOOLS MAY PROVIDE REMOTE INSTRUCTION and that a nonpublic school shall provide in‑person instruction to be eligible to receive students with scholarship grants

SECTION 7.80.(a) Part 1 of Article 39 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑550.5. Remote instruction.

A private church school or school of religious charter may provide remote instruction if the school maintains copies of all records required by this Chapter at an administrative office that is physically located in the State. For the purposes of this section, remote instruction means instruction delivered to students in a remote location outside of a school facility, whether synchronously or asynchronously.

SECTION 7.80.(b) Part 2 of Article 39 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑558.5. Remote instruction.

A qualified nonpublic school may provide remote instruction if the school maintains copies of all records required by this Chapter at an administrative office that is physically located in the State. For the purposes of this section, remote instruction means instruction delivered to students in a remote location outside of a school facility, whether synchronously or asynchronously.

SECTION 7.80.(c) G.S. 115C‑562.5(a) is amended by adding a new subdivision to read:

(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.

Adjustments to S.L. 2023‑106

SECTION 7.81.(a) G.S. 114A‑10(7), as enacted by S.L. 2023‑106, reads as rewritten:

(7) To prohibit the creation, sharing, or storage of a biometric scan of his or her child without the parent's prior written consent, except as for information stored within the United States in any of the following circumstances:

a. ~~authorized~~ When authorized pursuant to a court ~~order~~ order.

b. or When otherwise required by law, including G.S. 7B‑2102 and G.S. 7B‑2201.

c. When the biometric scan occurs in a place open to the public, whether it is publicly or privately owned, in which there is no expectation of privacy.

d. When the scan is used solely for security or surveillance of buildings, grounds, or school transportation.

SECTION 7.81.(b) G.S. 115C‑76.65(c), as enacted by S.L. 2023‑106, reads as rewritten:

(c) No Except for protected information surveys that are given as part of the Centers for Disease Control and Prevention's Youth Risk Behavior Surveillance System or National Youth Tobacco Survey, no student shall be permitted to participate in a protected information survey without the prior written or electronic consent of the parent or the adult student. A parent shall be provided notice of the opportunity to opt out of any protected information survey given as part of the Center for Disease Control and Prevention's Youth Risk Behavior Surveillance System or National Youth Tobacco Survey.

SECTION 7.81.(c) G.S. 115C‑375.1 reads as rewritten:

§ 115C‑375.1. To provide some medical care to students.

It Notwithstanding G.S. 90‑21.10B, it is within the scope of duty of teachers, including substitute teachers, teacher assistants, student teachers, or any other public school employee when authorized by the board of education or its designee, (i) to administer any drugs or medication prescribed by a doctor upon written request of the parents, (ii) to give emergency health care when reasonably apparent circumstances indicate that any delay would seriously worsen the physical condition or endanger the life of the pupil, and (iii) to perform any other first aid or lifesaving techniques in which the employee has been trained in a program approved by the State Board of Education. No employee, however, shall be required to administer drugs or medication or attend lifesaving techniques programs.

Any public school employee, authorized by the board of education or its designee to act under (i), (ii), or (iii) above, shall not be liable in civil damages for any authorized act or for any omission relating to that act unless the act or omission amounts to gross negligence, wanton conduct, or intentional wrongdoing. Any person, serving in a voluntary position at the request of or with the permission or consent of the board of education or its designee, who has been given the authority by the board of education or its designee to act under (ii) above shall not be liable in civil damages for any authorized act or for any omission relating to the act unless the act amounts to gross negligence, wanton conduct, or intentional wrongdoing.

At the commencement of each school year, but before the beginning of classes, and thereafter as circumstances require, the principal of each school shall determine which persons will participate in the medical care program.

SECTION 7.81.(d) Notwithstanding the time lines and requirements established by Section 2 of S.L. 2023‑106, for the 2023‑2024 school year the following shall apply:

(1) Public school units shall provide the parent guide to student achievement required by G.S. 115C‑76.30(c), as enacted by S.L. 2023‑106, to parents, students, and school personnel no later than the first day of school occurring after January 1, 2024.

(2) Governing bodies of public school units shall establish policies required by G.S. 115C‑76.35, as enacted by S.L. 2023‑106, that are effective no later than January 1, 2024.

(3) Public school units shall provide the notice of health care services and means for consent to parents required by G.S. 115C‑76.45(a)(1) and (a)(2), as enacted by S.L. 2023‑106, no later than the first day of school occurring after January 1, 2024.

(4) Governing bodies of public school units shall adopt the procedures and process required by G.S. 115C‑76.60, as enacted by S.L. 2023‑106, no later than December 15, 2023, and shall permit parents to begin using that process no later than January 1, 2024.

(5) The State Board of Education shall adopt emergency rules to be used for parental concern hearings required by G.S. 115C‑76.60, as enacted by S.L. 2023‑106, conducted during the 2023‑2024 school year. The State Board of Education shall receive requests for parental concern hearings beginning no later than January 30, 2024.

(6) Public school units shall submit the report required by G.S. 115C‑76.70(a), as enacted by S.L. 2023‑106, beginning September 15, 2024.

(7) The State Board of Education shall submit the report required by G.S. 115C‑76.70(b), as enacted by S.L. 2023‑106, beginning November 15, 2024.

SECTION 7.81.(e) This section is effective August 16, 2023.

OPPORTUNITY SCHOLARSHIP FINANCIAL IMPACT REPORT/REINVESTMENT IN PUBLIC SCHOOLS

SECTION 7.82.(a) G.S. 115C‑562.7 reads as rewritten:

§ 115C‑562.7. ~~Authority reporting~~ Reporting requirements.

…

(b) The Authority shall report annually, no later than October 15, to the Joint Legislative Education Oversight Committee on the following information from the prior school year:

…

(4) Nonpublic schools in which scholarship grant recipients are enrolled, including numbers of scholarship grant students at each nonpublic school.

…

(e) No later than October 15 of each year, the Authority shall provide the following information to the Department of Public Instruction:

(1) The information described in subdivision (4) of subsection (b) of this section.

(2) For each scholarship grant recipient, award amounts and sufficient personally identifiable information to track the recipient's continued enrollment in a nonpublic school. This information is confidential and not a public record under G.S. 132‑1.

(f) The Department of Public Instruction shall report no later than April 1 of each year to the Joint Legislative Education Oversight Committee on the cumulative difference in the current school year between the scholarship grant award amount for each prior public school attendee enrolled in a nonpublic school and the average State per pupil allocation for average daily membership for a student in a public school unit. For purposes of this subsection, a prior public school attendee is any scholarship grant recipient who was in membership in a public school unit for a majority of the first or second month of the school year immediately prior to enrollment in a nonpublic school, beginning with students enrolled in a public school unit the 2023‑2024 school year or subsequent school years.

SECTION 7.82.(b) Notwithstanding G.S. 115C‑562.7, as amended by subsection (a) of this section, the State Education Assistance Authority shall provide the first report required by G.S. 115C‑562.7(e) by October 15, 2024, and the Department of Public Instruction shall provide the first report required by G.S. 115C‑562.7(f) by April 1, 2025. The report required by G.S. 115C‑562.7(f) shall apply to all prior public school attendees enrolled in a nonpublic school in the 2024‑2025 school year who were enrolled in a public school unit in the 2023‑2024 school year.

SECTION 7.82.(c) It is the intent of the General Assembly to reinvest in the public schools any savings realized by the State each year, beginning in the 2025‑2026 school year, because of the transfer of a student from a public school unit to a nonpublic school where the student accepts an opportunity scholarship grant award that is less than one hundred percent (100%) of the average State per pupil allocation for average daily membership for a student in a public school unit.

CLARIFY MINIMUM SERVICE REQUIREMENTS FOR PAID PARENTAL LEAVE

SECTION 7.83.(a) G.S. 126‑8.6(c1) reads as rewritten:

(c1) The State Human Resources Commission shall adopt rules and policies providing for a period of minimum service before an employee becomes eligible for parental leave, the maximum number of uses of paid parental leave within a 12‑month period, and how much leave is to be provided in the event of miscarriage or the death of a child during birth. The rules shall provide that the period of minimum service may be met by aggregating employment at any of the following:

(1) State agencies, departments, and institutions, including The University of North Carolina.

(2) Public school units that provide paid parental leave in accordance with this section.

(3) Community colleges located in this State.

SECTION 7.83.(b) G.S. 115C‑218.90(a)(6) reads as rewritten:

(6) A board of directors may provide paid parental leave consistent with the requirements of G.S. 126‑8.6. If the board provides paid parental leave, it shall be eligible to receive funds as provided in G.S. 115C‑336.1(b). If the board does not provide paid parental leave, it shall provide written notice to individuals upon offering employment. The notice shall state that employment with the charter school will not count toward any minimum period of service established pursuant to G.S. 126‑8.6(c1).

LIMIT DISCRETION TO withhold or reduce CHARTER SCHOOL FUNDING TO REVIEW BOARD AND SUPERINTENDENT of public instruction

SECTION 7.84. G.S. 115C‑218.105, as amended by S.L. 2023‑110, reads as rewritten:

§ 115C‑218.105. State and local funds for a charter school.

(a) The State Board of Education shall allocate to each charter school:

(1) An amount equal to the average per pupil allocation for average daily membership from the local school administrative unit allotments in which the charter school is located for each child attending the charter school except for the allocation for children with disabilities and for the allocation for children with limited English proficiency;

(2) An additional amount for each child attending the charter school who is a child with disabilities; and

(3) An additional amount for children with limited English proficiency attending the charter school, based on a formula adopted by the State Board.

In accordance with G.S. 115C‑218.7 and G.S. 115C‑218.8, the State Board shall allow for annual adjustments to the amount allocated to a charter school based on its enrollment growth in school years subsequent to the initial year of operation.

In the event a child with disabilities leaves the charter school and enrolls in a public school during the first 60 school days in the school year, the charter school shall return a pro rata amount of funds allocated for that child to the State Board, and the State Board shall reallocate those funds to the local school administrative unit in which the public school is located. In the event a child with disabilities enrolls in a charter school during the first 60 school days in the school year, the State Board shall allocate to the charter school the pro rata amount of additional funds for children with disabilities.

(a1) The State Board shall not withhold or reduce distribution of funds to a charter school for any reason except as provided in subsection (a2) of this section.

(a2) The State Board shall withhold or reduce distribution of funds to a charter school if any of the following applies:

(1) The change in funding is due to an annual adjustment based on enrollment or is a general adjustment to allocations that is not specific to the charter or actions of that charter school.

(2) The Review Board notifies the State Board that the charter school has materially violated a term of its charter, has violated a State statute or federal law, or has had its charter terminated or nonrenewed.

(3) The Superintendent of Public Instruction notifies the State Board that the charter school has failed to meet generally accepted standards of fiscal management or has violated a State or federal requirement for receipt of funds.

….

PART VII‑A. Compensation of Public School Employees

TEACHER SALARY SCHEDULE

SECTION 7A.1.(a) The following monthly teacher salary schedule shall apply for the 2023‑2024 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.

2023‑2024 Teacher Monthly Salary Schedule

Years of Experience A Teachers

0 $3,900

1 $3,984

2 $4,085

3 $4,187

4 $4,289

5 $4,391

6 $4,481

7 $4,572

8 $4,662

9 $4,753

10 $4,843

11 $4,933

12 $5,024

13 $5,114

14 $5,205

15‑24 $5,306

25+ $5,510

SECTION 7A.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.

(6) School counselors who are licensed as counselors at the master's degree level or higher shall receive a salary supplement each month of one hundred dollars ($100.00).

SECTION 7A.1.(c) For school psychologists, school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and school audiologists who are licensed as audiologists at the master's degree level or higher, the following shall apply:

(1) The first step of the salary schedule shall be equivalent to the sixth step of the A salary schedule.

(2) These employees shall receive the following salary supplements each month:

a. Ten percent (10%) of their monthly salary, excluding the supplement provided pursuant to sub‑subdivision b. of this subdivision.

b. Three hundred fifty dollars ($350.00).

(3) These employees 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.

(4) The twenty‑sixth step of the salary schedule 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 7A.1.(d) 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 7A.1.(e) A teacher compensated in accordance with this salary schedule for the 2023‑2024 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 7A.1.(f) As used in this section, the term teacher shall also include instructional support personnel.

SECTION 7A.1.(g) It is the intent of the General Assembly to implement the following base monthly teacher salary schedule for the 2024‑2025 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.

2024‑2025 Teacher Monthly Salary Schedule

Years of Experience A Teachers

0 $4,100

1 $4,175

2 $4,250

3 $4,325

4 $4,400

5 $4,475

6 $4,572

7 $4,663

8 $4,753

9 $4,844

10 $4,935

11 $5,025

12 $5,116

13 $5,206

14 $5,297

15‑24 $5,388

25+ $5,595

CONSOLIDATED TEACHER BONUS PROGRAM

SECTION 7A.3.(a) Establish Consolidated Bonus Program. – The State Board of Education shall establish a consolidated teacher bonus program for the 2023‑2025 fiscal biennium to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay to qualifying teachers whose salaries are supported from State funds in January of 2024 and 2025, based on data from the 2022‑2023 and 2023‑2024 school years, respectively, in accordance with this section.

SECTION 7A.3.(b) Definitions. – For purposes of this section, the following definitions shall apply:

(1) Eligible advanced course teacher. – A teacher of Advanced Placement courses, International Baccalaureate Diploma Programme courses, or the Cambridge Advanced International Certificate of Education (AICE) program who meets the following criteria:

a. Is employed by, or retired having last held a position at, one or more of the following:

1. A qualifying public school unit.

2. The North Carolina Virtual Public School program.

b. Taught one or more students who received a score listed in subsection (c) of this section.

(2) Eligible career and technical education (CTE) teacher. – A teacher who meets the following criteria:

a. Is employed by, or retired having last held a position at, a qualifying public school unit.

b. Taught one or more students who attained approved industry certifications or credentials consistent with G.S. 115C‑156.2.

(3) Eligible growth teacher. – A teacher who meets at least one of the following criteria:

a. Is employed by, or retired having last held a position at, a qualifying public school unit and meets one 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 State according to the EVAAS student growth index score for fourth or fifth grade reading from the previous school year.

3. 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.

b. Is employed by, or retired having last held a position at, a local school administrative unit and meets one of the following criteria:

1. 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.

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.

3. 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.

c. Was employed by a local school administrative unit that employed in the previous school year three or fewer total teachers in that teacher's grade level as long as the teacher has an EVAAS student growth index score from the previous school year of exceeded expected growth in one of the following subject areas:

1. Third grade reading.

2. Fourth or fifth grade reading.

3. Fourth, fifth, sixth, seventh, or eighth grade mathematics.

(4) EVAAS. – The Education Value‑Added Assessment System.

(5) Qualifying public school unit. – Any of the following:

a. A local school administrative unit.

b. A charter school.

c. A regional school.

d. A school providing elementary or secondary instruction operated by The University of North Carolina under Article 29A of Chapter 116 of the General Statutes.

(6) Qualifying teacher. – An eligible teacher who meets one of the following criteria:

a. Remains employed teaching in the same qualifying public school unit, or, if an eligible advanced course teacher is only employed by the North Carolina Virtual Public School program, remains employed teaching in that program, at least from the school year the data is collected until January 1 of the corresponding school year that the bonus is paid.

b. Retired, between the last day of the school year in which the data is collected and January 1 of the corresponding school year in which the bonus is paid, after attaining one of the following:

1. The age of at least 65 with five years of creditable service.

2. The age of at least 60 with 25 years of creditable service.

3. Thirty years of creditable service.

SECTION 7A.3.(c) Advanced Course Bonuses. – A bonus in the amount of fifty dollars ($50.00) shall be provided to qualifying advanced course teachers for each student taught in each advanced course who receives the following score:

(1) For Advanced Placement courses, a score of three or higher on the College Board Advanced Placement Examination.

(2) For International Baccalaureate Diploma Programme courses, a score of four or higher on the International Baccalaureate course examination.

(3) For the Cambridge AICE program, a score of E or higher on the Cambridge AICE program examinations.

SECTION 7A.3.(d) CTE Bonuses. – For qualifying career and technical education teachers, bonuses shall be provided in the following amounts:

(1) 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 subsection (e) of this section.

(2) 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 subsection (e) of this section.

SECTION 7A.3.(e) CTE Course Value Ranking. – 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 subsection. 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:

(1) 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.

(2) 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.

SECTION 7A.3.(f) Statewide Growth Bonuses. – Of the funds appropriated in this act for the program, bonuses shall be provided to qualifying teachers who are eligible teachers under sub‑subdivision a. of subdivision (3) of subsection (b) of this section, as follows:

(1) The sum of five million dollars ($5,000,000) shall be allocated for bonuses to eligible teachers under sub‑sub‑subdivision a.1. of subdivision (3) of subsection (b) of this section. These funds shall be distributed equally among qualifying teachers.

(2) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision a.2. of subdivision (3) of subsection (b) of this section.

(3) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision a.3. of subdivision (3) of subsection (b) of this section.

SECTION 7A.3.(g) Local Growth Bonuses. – Of the funds appropriated in this act for the program, bonuses shall be provided to eligible teachers under sub‑subdivisions b. and c. of subdivision (3) of subsection (b) of this section, as follows:

(1) The sum of five million dollars ($5,000,000) shall be allocated for bonuses to eligible EVAAS teachers under sub‑sub‑subdivisions b.1. and c.1. of subdivision (3) of subsection (b) of this section. These funds shall be divided proportionally based on average daily membership in third grade for each local school administrative unit and then distributed equally among qualifying third grade reading teachers in each local school administrative unit.

(2) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision b.2. or c.2. of subdivision (3) of subsection (b) of this section.

(3) A bonus in the amount of two thousand dollars ($2,000) shall be awarded to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision b.3. or c.3. of subdivision (3) of subsection (b) of this section.

SECTION 7A.3.(h) Limitations and Other Criteria. – The following additional limitations and other criteria shall apply to the program:

(1) Bonus funds awarded to a teacher pursuant to subsection (c), subsection (d), subdivision (1) of subsection (f), and subdivision (1) of subsection (g) of this section shall not exceed three thousand five hundred dollars ($3,500) per subsection or subdivision in any given school year.

(2) A qualifying teacher who is an eligible teacher under sub‑sub‑subdivision a.1., b.1., or c.1. of subdivision (3) of subsection (b) of this section may receive a bonus under both subdivision (1) of subsection (f) and subdivision (1) of subsection (g) of this section but shall not receive more than seven thousand dollars ($7,000) pursuant to subdivision (1) of subsection (f) and subdivision (1) of subsection (g) of this section in any given school year.

(3) A qualifying teacher who is an eligible teacher under sub‑sub‑subdivision a.2., b.2., or c.2. of subdivision (3) of subsection (b) of this section may receive a bonus under both subdivision (2) of subsection (f) and subdivision (2) of subsection (g) of this section but shall not receive more than two bonuses pursuant to subdivision (2) of subsection (f) and subdivision (2) of subsection (g) of this section in any given school year.

(4) A qualifying teacher who is an eligible teacher under sub‑sub‑subdivision a.3., b.3., or c.3. of subdivision (3) of subsection (b) of this section may receive a bonus under both subdivision (3) of subsection (f) and subdivision (3) of subsection (g) of this section but shall not receive more than two bonuses pursuant to subdivision (3) of subsection (f) and subdivision (3) of subsection (g) of this section in any given school year.

SECTION 7A.3.(i) Bonuses Not Compensation. – Bonuses awarded to a teacher pursuant to this section shall be in addition to any regular wage or other bonus the teacher receives or is scheduled to receive. Notwithstanding G.S. 135‑1(7a), the bonuses awarded under this section are not compensation under Article 1 of Chapter 135 of the General Statutes, Retirement System for Teachers and State Employees.

SECTION 7A.3.(j) Study and Report. – The State Board of Education shall study the effect of the program on teacher performance and retention. The State Board shall report the results of its findings and the amount of bonuses awarded 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 of each year of the 2023‑2025 fiscal biennium. The report shall include, at a minimum, the following information:

(1) Number of students enrolled and taking examinations in each of the following categories of courses:

a. Advanced Placement.

b. International Baccalaureate Diploma Programme.

c. Cambridge AICE program.

d. Courses needed for the attainment of an industry certification or credential.

(2) Number of students receiving outcomes on examinations resulting in the award of a bonus for a teacher in each category of courses identified in sub‑subdivision a. of subdivision (1) of this subsection.

(3) Number of teachers receiving a bonus in each category of courses identified in sub‑subdivision a. of subdivision (1) of this subsection.

(4) The amounts awarded to teachers for each category of courses identified in sub‑subdivision a. of subdivision (1) of this subsection.

(5) The type of industry certifications and credentials earned by the students, the value ranking for each certification and credential, the number of bonuses earned for each certification or credential, and the total bonus amount awarded for each certification or credential.

(6) Average bonus amount awarded to each qualifying teacher who is an eligible teacher under sub‑sub‑subdivision a.1., b.1., or c.1. of subdivision (3) of subsection (b) of this section.

(7) The percentage of teachers who received a bonus pursuant to this section and were eligible to receive a bonus for teaching in the same grade level or course in January 2022 or January 2023, or both, where applicable, pursuant to one of the following programs:

a. The Advanced Course and CTE Bonus Program provided in Section 7A.4 of S.L. 2021‑180.

b. The Growth‑Based Teacher Bonus Program provided in Section 7A.2 of S.L. of 2022‑74.

(8) The percentage of teachers who received a bonus pursuant to this section and received a bonus for teaching in the same grade level or course in either January 2022 or January 2023 pursuant to one of the programs listed in subdivision (7) of this subsection.

(9) The percentage of teachers who received a bonus pursuant to this section and received a bonus for teaching in the same grade level or course in January 2022 or January 2023, or both, where applicable, pursuant to one of the programs listed subdivision (7) of this subsection.

(10) The statistical relationship between a teacher receiving a bonus in January 2024 or 2025 pursuant to this section and receiving a bonus pursuant to a predecessor bonus program. For purposes of this subdivision, the following are predecessor programs:

a. Bonuses awarded pursuant to Section 7A.4(c) of S.L. 2021‑180 are predecessors to bonuses awarded pursuant to subsection (c) of this section.

b. Bonuses awarded pursuant to Section 7A.4(d) of S.L. 2021‑180 are predecessors to bonuses awarded pursuant to subsection (d) of this section.

c. Bonuses awarded pursuant to subdivision (1) of subsection (c) and subdivision (1) of subsection (d) of Section 7A.2 of S.L. 2022‑74 are predecessors to bonuses awarded pursuant to subdivision (1) of subsection (f) and subdivision (1) of subsection (g) of this section.

d. Bonuses awarded pursuant to subdivision (2) of subsection (c) and subdivision (2) of subsection (d) of Section 7A.2 of S.L. 2022‑74 are predecessors to bonuses awarded pursuant to subdivision (2) of subsection (f) and subdivision (2) of subsection (g) of this section.

e. Bonuses awarded pursuant to subdivision (c)(3) and subdivision (d)(3) of Section 7A.2 of S.L. 2022‑74 are predecessors to bonuses awarded pursuant to subdivision (3) of subsection (f) and subdivision (3) of subsection (g) of this section.

(11) The distribution of statewide and local growth bonuses awarded pursuant to this section as among qualifying public school units and, where applicable, schools within those units.

SUPPLEMENTAL FUNDS FOR TEACHER COMPENSATION

SECTION 7A.4.(a) Use of Funds. – For each year of the 2023‑2025 fiscal biennium, except as provided in subsection (f1) of this section, the State Board of Education shall allocate funds pursuant to this section to eligible local school administrative units to provide salary supplements to teachers and qualifying school administrators in those units. Allocation of salary supplements among teachers and qualifying school administrators within each eligible local school administrative unit, including whether a teacher or qualifying school administrator receives a salary supplement and the amount of the supplement provided to that person, shall be determined in the discretion of the local board of education of the eligible unit, except that no individual salary supplement shall exceed the per teacher funding amount awarded to that unit pursuant to subdivision (4) of subsection (c) of this section.

SECTION 7A.4.(b) Definitions. – As used in this section, the following definitions shall apply:

(1) Adjusted market value of taxable real property. – A county's assessed taxable real property value, using the latest available data published by the Department of Revenue, divided by the county's sales assessment ratio determined under G.S. 105‑289(h).

(2) Composite value. – For each eligible county, the sum of the following:

a. The taxable real property factor multiplied by sixty‑five percent (65%).

b. The median household income factor multiplied by twenty‑five percent (25%).

c. The effective tax rate factor multiplied by ten percent (10%).

(3) County allocation factor. – For each eligible county, the supplement factor for that county divided by the sum of all supplement factors for the State.

(4) Effective tax rate. – The actual county tax rate multiplied by the most recent annual sales assessment ratio for that county.

(5) Effective tax rate factor. – For each eligible county, the effective tax rate for that county divided by the median effective tax rate in the State.

(6) Eligible county. – A county that has an adjusted market value of taxable real property of less than fifty billion nine hundred million dollars ($50,900,000,000).

(7) Eligible local school administrative unit. – A local school administrative unit located in whole or in part in an eligible county.

(8) Eligible school. – A public school that is located in an eligible county and governed by a local school administrative unit.

(9) Maintenance of effort amount. – For each local school administrative unit in each fiscal year, the supplant factor multiplied by the total State and non‑State funds expended for salaries for teachers from the fiscal year for which the most recent salary data are available.

(10) Median household income. – A county's median household income for the most recent 12 months for which data are available, as that term is used in G.S. 143B‑437.08.

(11) Median household income factor. – For each eligible county, the median household income in the State divided by the median household income for that county.

(12) Non‑State funds. – Any funds held by a local school administrative unit, other than nonrecurring federal funds received as a result of legislation enacted by Congress in response to COVID‑19, that are not State funds.

(13) Qualifying school administrator. – Any of the following:

a. Assistant principals paid pursuant to G.S. 115C‑285(a)(8).

b. Principals paid pursuant to G.S. 115C‑285(a)(8a).

(14) Supplant factor. – For each local school administrative unit in each fiscal year of the fiscal biennium, the total non‑State funds expended for salary supplements for teachers in the 2020‑2021 fiscal year divided by the total State and non‑State funds expended for salaries for teachers in the 2020‑2021 fiscal year.

(15) Supplement factor. – For each eligible county, the composite value multiplied by the number of State‑funded teachers employed in a school in the county that is governed by a local school administrative unit.

(16) Taxable real property factor. – For each eligible county, the median adjusted market value of taxable real property in the State divided by the adjusted market value of taxable real property for that county.

(17) Teacher. – Teachers and instructional support personnel.

SECTION 7A.4.(c) Allocation of Funds. – The State Board of Education shall allocate funds for salary supplements to eligible local school administrative units according to the following procedure:

(1) County allocation. – For each eligible county, the State Board shall determine a county allocation by multiplying the county allocation factor for that county by the funding amount appropriated pursuant to this section for the applicable fiscal year.

(2) Per teacher funding amount. – For each eligible county, the State Board shall determine a per teacher funding amount by dividing the county allocation amounts determined pursuant to subdivision (1) of this subsection by the total number of State‑funded teachers employed in all eligible schools in that county.

(3) Unit funding amount. – For each eligible local school administrative unit, the State Board shall determine the funding amount for that unit based on the per teacher funding amount or amounts for the eligible county or counties where the unit is located. For each county with an eligible school governed by the unit, the State Board shall multiply the applicable per teacher funding amount for that county determined pursuant to subdivision (2) of this subsection by the number of State‑funded teachers employed in the eligible school in that county. If the unit is located in multiple eligible counties, the State Board shall aggregate those amounts.

(4) Allocation and funding cap. – The State Board shall allocate the amount determined pursuant to subdivision (3) of this subsection to each eligible local school administrative unit for each applicable fiscal year, up to a maximum of five thousand dollars ($5,000) per State‑funded teacher.

SECTION 7A.4.(d) Charter Schools. – Funds appropriated to the Department of Public Instruction pursuant to this section shall be subject to the allocation of funds for charter schools described in G.S. 115C‑218.105. The General Assembly encourages charter schools receiving funds pursuant to this section to provide salary supplements to teachers and qualifying school administrators in the charter school in accordance with the requirements of this section.

SECTION 7A.4.(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 to eligible local school administrative units 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 eligible local school administrative units.

SECTION 7A.4.(f) Nonsupplant Requirement. – A local school administrative unit that receives funds under this section shall use those funds to supplement non‑State funds provided for salary supplements for teachers and qualifying school administrators and shall not use any State funds, including funds received under this section or Section 7A.12 of S.L. 2021‑180, to supplant non‑State funds provided for salary supplements for teachers and qualifying school administrators. For purposes of this section, a local school administrative unit has supplanted non‑State funds if the State Board finds that the amount of non‑State funds expended by the unit for salary supplements was less than ninety‑five percent (95%) of the maintenance of effort amount for the local school administrative unit.

SECTION 7A.4.(f1) Nonsupplant Enforcement. – If the State Board of Education determines that a local school administrative unit has supplanted non‑State funds in violation of subsection (f) of this section, the State Board of Education shall do the following:

(1) For the 2023‑2024 fiscal year, continue to allocate funds to the unit in accordance with subsection (c) of this section.

(2) For the 2024‑2025 fiscal year, not allocate any funds under this section to the unit.

SECTION 7A.4.(f2) Additional Penalty for Consecutive Supplanting. – It is the intent of the General Assembly that the State Board of Education will not allocate supplemental funds for teacher compensation to a local school administrative unit in the 2025‑2026 fiscal year if the State Board of Education determines that the local school administrative unit supplanted non‑State funds provided for salary supplements for teachers and qualifying school administrators with State funds in the 2021‑2022 fiscal year and the 2022‑2023 fiscal year. For the 2021‑2022 fiscal year, the State Board shall not deem a local school administrative unit to have supplanted non‑State funds for purposes of this subsection if the State Board determines that the unit supplanted non‑State funds solely with any State funds for which the allowable uses include salary supplements for teachers or qualifying school administrators.

SECTION 7A.4.(g) Reports. – No later than April 15 of each year of the 2023‑2025 fiscal biennium, the State Board of Education shall report the following information for the applicable fiscal year to the Joint Legislative Education Oversight Committee and the Fiscal Research Division:

(1) A list of all eligible counties and eligible local school administrative units.

(2) Funds allocated to each eligible local school administrative unit.

(3) The percentage and amount of teachers and qualifying school administrators in each eligible local school administrative unit receiving salary supplements.

(4) The average salary supplement amount in each eligible local school administrative unit.

(5) The range of salary supplement amounts in each eligible local school administrative unit.

(6) The effect of the salary supplements on the retention of teachers and qualifying school administrators in eligible local school administrative units.

(7) The identity of any local school administrative unit that the State Board determines has supplanted funds.

SMALL COUNTY AND LOW‑WEALTH SIGNING BONUS FOR TEACHERS

SECTION 7A.5.(a) Article 20 of Chapter 115C of the General Statutes is amended by adding a new section to read:

§ 115C‑302.8. Small county and low‑wealth signing bonus.

(a) Definitions. – For purposes of this section, the following definitions shall apply:

(1) Eligible employee. – A person who meets all of the following criteria:

a. Accepts employment as a teacher with an eligible employer.

b. Was not employed by the eligible employer identified in sub‑subdivision a. of this subdivision in the prior fiscal year.

c. Is employed by the eligible employer identified in sub‑subdivision a. of this subdivision as of October 1 of the school year for which the teacher accepts employment.

(2) Eligible employer. – The governing board of a local school administrative unit that receives at least one of the following in the year in which the teacher accepts employment pursuant to sub‑subdivision c. of subdivision (1) of this subsection:

a. Small county school system supplemental funding.

b. Supplemental funding for local school administrative units in low‑wealth counties.

(3) Local funds. – Matching funds provided by an eligible employer to enable an eligible employee to qualify for the signing bonus program established by this section.

(4) Teacher. – Teachers and instructional support personnel.

(b) Signing Bonus Program. – To the extent funds are provided for this purpose, the Department of Public Instruction shall establish and administer a signing bonus program for teachers. Signing bonuses shall be provided each school year to all eligible employees who are employed by an eligible employer as long as they are matched on the basis of one dollar ($1.00) in State funds for every one dollar ($1.00) in local funds, up to one thousand dollars ($1,000) in State funds.

(c) Limited Exclusion from Future Signing Bonuses. – A teacher who receives a signing bonus pursuant to this section is ineligible to receive another signing bonus pursuant to this section or a similar enactment of the General Assembly for at least two full school years. This section shall not apply to any legislatively mandated bonuses received by teachers that are not signing bonuses.

(d) Bonuses as Additions. – The bonuses awarded pursuant to this section shall be in addition to any regular wage or other bonus a teacher receives or is scheduled to receive.

(e) Not for Retirement. – 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, Retirement System for Teachers and State Employees.

SECTION 7A.5.(b) This section applies beginning with eligible employees who accept employment as a teacher with an eligible employer for the 2023‑2024 school year.

PRINCIPAL SALARY SCHEDULE

SECTION 7A.6.(a) The following annual salary schedule for principals shall apply for the 2023‑2024 fiscal year, beginning July 1, 2023:

2023‑2024 Principal Annual Salary Schedule

Avg. Daily Membership Base Met Growth Exceeded Growth

0‑200 $75,526 $83,078 $90,631

201‑400 $79,302 $87,232 $95,162

401‑700 $83,078 $91,386 $99,694

701‑1,000 $86,855 $95,540 $104,226

1,001‑1,600 $90,631 $99,694 $108,757

1,601+ $94,407 $103,848 $113,288

A principal's placement on the salary schedule shall be determined according to the average daily membership of the school supervised by the principal, as described in subsection (b) of this section, and the school growth scores, calculated pursuant to G.S. 115C‑83.15(c), for each school the principal supervised in one or more prior school years, as described in subsection (c) of this section, 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 as follows:

a. Between July 1, 2023, and December 31, 2023, if the school growth score shows the school exceeded expected growth.

b. Between January 1, 2024, and June 30, 2024, if the higher school growth score in one of the two prior school years shows that the school exceeded expected growth.

(2) A principal shall be paid according to the Met Growth column of the schedule as follows:

a. Between July 1, 2023, and December 31, 2023, if the school growth score shows the school met expected growth or the principal supervised a school in the prior school year that was not eligible to receive a school growth score.

b. Between January 1, 2024, and June 30, 2024, if any of the following apply:

1. The higher school growth score in one of the two prior school years shows that the school met expected growth.

2. The principal supervised a school in the two prior school years that was not eligible to receive a school growth score.

(3) A principal shall be paid according to the Base column, as follows:

a. Between July 1, 2023, and December 31, 2023, if the school growth score shows the school did not meet expected growth or the principal has not supervised any school as a principal for a majority of the prior school year.

b. Between January 1, 2024, and June 30, 2024, if any of the following apply:

1. The school growth scores from the two prior school years show that the school did not meet expected growth in both years.

2. The principal has not supervised any school as a principal for a majority of the two prior school years.

SECTION 7A.6.(b) For purposes of determining the average daily membership of a principal's school, the following amounts shall be used during the following time periods:

(1) Between July 1, 2023, and December 31, 2023, the average daily membership for the school from the 2022‑2023 school year. If the school did not have an average daily membership in the 2022‑2023 school year, the projected average daily membership for the school for the 2023‑2024 school year.

(2) Between January 1, 2023, and June 30, 2023, the average daily membership for the school for the 2023‑2024 school year.

SECTION 7A.6.(b1) Beginning in the 2024‑2025 fiscal year, it is the intent of the General Assembly to include in the calculation of the average daily membership of a principal's school the average daily membership of any prekindergarten students in membership at the school.

SECTION 7A.6.(c) For purposes of determining the school growth scores for each school the principal supervised in one or more prior school years, the following school growth scores shall be used during the following time periods:

(1) Between July 1, 2023, and December 31, 2023, the school growth score from the 2021‑2022 school year.

(2) Between January 1, 2023, and June 30, 2023, the school growth scores from the 2021‑2022 and 2022‑2023 school years.

SECTION 7A.6.(d) 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 7A.6.(e) A principal compensated in accordance with this section for the 2023‑2024 fiscal year shall receive an amount equal to the greater of the following:

(1) The applicable amount on the salary schedule for the applicable year.

(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 9.1 or 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 fiscal year, the salary the principal received in the 2016‑2017 fiscal year pursuant to Section 9.1 or Section 9.2 of S.L. 2016‑94.

SECTION 7A.6.(f) It is the intent of the General Assembly to implement the following annual salary schedule for principals for the 2024‑2025 fiscal year, beginning July 1, 2024:

2024‑2025 Principal Annual Salary Schedule

Avg. Daily Membership Base Met Growth Exceeded Growth

0‑200 $77,792 $85,570 $93,350

201‑400 $81,681 $89,849 $98,017

401‑700 $85,570 $94,128 $102,685

701‑1,000 $89,461 $98,406 $107,353

1,001‑1,600 $93,350 $102,685 $112,020

1,601+ $97,239 $106,963 $116,687

BONUSES FOR PRINCIPALS

SECTION 7A.7.(a) The Department of Public Instruction shall administer a bonus in the 2023‑2024 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:

2023‑2024 Principal Bonus Schedule

Statewide Growth Percentage Bonus

Top 5% $15,000

Top 10% $10,000

Top 15% $5,000

Top 20% $2,500

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 7A.7.(b) The bonus awarded pursuant to this section shall be in addition to any regular wage or other bonus the principal receives or is scheduled to receive.

SECTION 7A.7.(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, Retirement System for Teachers and State Employees.

SECTION 7A.7.(d) It is the intent of the General Assembly that funds provided pursuant to this section will supplement principal compensation and not supplant local funds.

SECTION 7A.7.(e) The bonus provided pursuant to this section shall be paid no later than October 31, 2023, to qualifying principals employed as of October 1, 2023.

ASSISTANT PRINCIPAL SALARIES

SECTION 7A.8.(a) For the 2023‑2024 fiscal year, beginning July 1, 2023, assistant principals shall receive a monthly salary based on the salary schedule for teachers who are classified as A teachers plus nineteen percent (19%). An assistant principal shall be placed on the step on the salary schedule that reflects the total number of years of experience as a certified employee of the public schools. 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 7A.8.(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 7A.8.(c) Participants in an approved full‑time master's in school administration program shall receive up to a 10‑month stipend during the internship period of the master's program. The stipend shall be at the beginning salary of an assistant principal or, for a teacher who becomes an intern, at least as much as that person would earn as a teacher on the teacher salary schedule. The North Carolina 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 7A.8.(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 to subsection (a) of this section.

SECTION 7A.8.(e) An assistant principal compensated in accordance with this section for the 2023‑2024 fiscal year shall receive an amount equal to the greater of the following:

(1) The applicable amount on the salary schedule for the applicable year.

(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 9.1 or 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 9.1 or Section 9.2 of S.L. 2016‑94.

CENTRAL OFFICE SALARIES

SECTION 7A.9.(a) For the 2023‑2024 fiscal year, beginning July 1, 2023, the annual salary for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers whose salaries are supported from State funds shall be increased by four percent (4%).

SECTION 7A.9.(b) It is the intent of the General Assembly to increase the annual salary for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers whose salaries are supported from State funds for the 2024‑2025 fiscal year, beginning July 1, 2024, by three percent (3%).

SECTION 7A.9.(c) The monthly salary maximums that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2023‑2024 fiscal year, beginning July 1, 2023:

2023‑2024 Fiscal Year

Maximum

School Administrator I $7,352

School Administrator II $7,790

School Administrator III $8,254

School Administrator IV $8,577

School Administrator V $8,919

School Administrator VI $9,448

School Administrator VII $9,825

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 maximums 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 7A.9.(d) The monthly salary maximums that follow apply to superintendents for the 2023‑2024 fiscal year, beginning July 1, 2023:

2023‑2024 Fiscal Year

Maximum

Superintendent I $10,415

Superintendent II $11,035

Superintendent III $11,698

Superintendent IV $12,401

Superintendent V $13,147

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 7A.9.(e) 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 7A.9.(f) 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 7A.9.(g) 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.

SECTION 7A.9.(h) It is the intent of the General Assembly that the monthly salary maximums that follow shall apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2024‑2025 fiscal year, beginning July 1, 2024:

2024‑2025 Fiscal Year

Maximum

School Administrator I $7,573

School Administrator II $8,024

School Administrator III $8,502

School Administrator IV $8,834

School Administrator V $9,187

School Administrator VI $9,731

School Administrator VII $10,120

SECTION 7A.9.(i) It is the intent of the General Assembly that the monthly salary maximums that follow shall apply to superintendents for the 2024‑2025 fiscal year, beginning July 1, 2024:

2024‑2025 Fiscal Year

Maximum

Superintendent I $10,727

Superintendent II $11,366

Superintendent III $12,049

Superintendent IV $12,773

Superintendent V $13,541

NONCERTIFIED PERSONNEL SALARIES

SECTION 7A.10.(a) For the 2023‑2024 fiscal year, beginning July 1, 2023, 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 four percent (4%).

(2) For the following employees, by an 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 7A.10.(b) Of the funds appropriated in this act to the Department of Public Instruction for the 2023‑2024 fiscal year, the sum of four million seven hundred sixteen thousand nine hundred thirty‑two dollars ($4,716,932) in recurring funds shall be allocated to local boards of education to increase the average rates of pay for school bus drivers. These funds shall be allocated on an equitable basis among all school bus drivers in the local school administrative unit. Compensation increases received by school bus drivers pursuant to this subsection shall be in addition to the increases provided for noncertified personnel pursuant to subsection (a) of this section.

SECTION 7A.10.(c) For the 2024‑2025 fiscal year, beginning July 1, 2024, it is the intent of the General Assembly to increase the annual salary for noncertified public school employees whose salaries are supported from State funds as follows:

(1) For permanent, full‑time employees on a 12‑month contract, by three percent (3%).

(2) For the following employees, by an 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.

PART VIII. The University of North Carolina System

UNC/ESCHEAT FUND FOR STUDENT FINANCIAL AID PROGRAMS

SECTION 8.1.(a) The funds appropriated by this act from the Escheat Fund for the 2023‑2025 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 8.1.(b) The State Education Assistance Authority (Authority) shall conduct periodic evaluations of expenditures of the student financial aid programs administered by the Authority to determine if allocations are utilized to ensure access to institutions of higher education and to meet the goals of the respective programs. The Authority 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 BUILDING RESERVE STUDY

SECTION 8.2.(a) For purposes of this section, the following definitions shall apply:

(1) Building. – A building that is operated or maintained by The University of North Carolina or a constituent institution of The University of North Carolina.

(2) Building reserve model. – The formula used by The University of North Carolina System Office to determine the operating and maintenance costs for buildings once construction of those buildings is complete.

SECTION 8.2.(b) No later than April 1, 2024, the Board of Governors of The University of North Carolina shall study and report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the building reserve model. At a minimum, the report shall include the following information:

(1) For all buildings, disaggregated by constituent institution and fund source, the following:

a. Expenditures related to operation and maintenance costs for the 2022‑2023 fiscal year, including expenditures disaggregated on the basis of at least the following building reserve model outputs and expenses:

1. Personnel and fringe benefits.

2. Utilities and insurance.

3. Custodial and supplies.

4. Facilities and maintenance.

5. Information technology.

b. The number of full‑time equivalent positions for building operation and maintenance used in the 2022‑2023 fiscal year, including at least positions that align with the following building reserve model outputs and expenses:

1. Building environmental service technician and supervisor.

2. Building environmental service supervisor.

3. Facilities maintenance technician mechanical.

4. Public safety officer.

5. Environmental health and safety professional.

6. Information technology networking analyst.

7. Information technology networking technician.

8. Facilities maintenance technician trades.

c. Recurring expenditures generated by the current building reserve model, taking into account all gross square feet and building types, for at least the outputs and expenses identified in sub‑subdivision a. of this subdivision.

d. The number of full‑time positions generated by the current building reserve model, taking into account all gross square feet and building types, for at least the outputs and expenses identified in sub‑subdivision b. of this subdivision.

(2) An analysis of the findings in subdivision (1) of this subsection, including at least the following information:

a. Any instances where the current building reserve model aligns or misaligns with full‑time equivalent positions and actual expenditures of the constituent institutions.

b. Any substantial differences among constituent institutions in actual operating and maintenance expenditures compared to projected expenditures under the building reserve model.

c. Recommendations to improve the process of providing operation and maintenance funds for buildings.

COMPLETION ASSISTANCE PROGRAMS

SECTION 8.3.(a) For purposes of this section, the term eligible constituent institutions refers to the following constituent institutions of The University of North Carolina:

(1) Elizabeth City State University.

(2) Fayetteville State University.

(3) North Carolina Agricultural and Technical State University.

(4) North Carolina Central University.

(5) The University of North Carolina at Asheville.

(6) The University of North Carolina at Greensboro.

(7) The University of North Carolina at Pembroke.

(8) Winston‑Salem State University.

SECTION 8.3.(b) For the 2023‑2025 fiscal biennium, the Board of Governors of The University of North Carolina shall establish a Completion Assistance Program (Program) at each eligible constituent institution. At a minimum, each Program shall meet the following criteria:

(1) A student enrolled in a Program established by this section may receive up to one thousand dollars ($1,000) per academic year under that Program to pay for the costs of continuing attendance and earning necessary credit hours at the eligible constituent institution.

(2) A student shall be eligible to receive funds under a Program if the student meets at least the following requirements:

a. Needs financial assistance to remain enrolled at the eligible constituent institution and earn credits necessary to graduate on time.

b. Is a resident for tuition purposes, as provided in G.S. 116‑143.1.

c. Meets satisfactory academic progress, as determined by the Board.

d. Has completed or is on track to complete at least 60 academic credit hours by the end of the semester in which the funds are provided.

e. Has completed the Free Application for Federal Student Aid (FAFSA) for the academic year in which the funds are provided.

f. Has an unpaid balance with the eligible constituent institution. This may include an unpaid balance for tuition, fees, room, board, or other expenses of attendance.

SECTION 8.3.(c) The Board of Governors of The University of North Carolina shall report on each Completion Assistance Program established pursuant to this section to the Joint Legislative Education Oversight Committee no later than March 15, 2025. The report shall include, at a minimum, an analysis of the impact of each Program on the following:

(1) On‑time graduation rates.

(2) Student debt at graduation.

SECTION 8.3.(d) Of the nonrecurring funds appropriated in this act to the Board of Governors of The University of North Carolina for each year of the 2023‑2025 fiscal biennium for Completion Assistance Programs, the Board shall allocate funds to each eligible constituent institution of The University of North Carolina proportional to the number of undergraduate students enrolled at each eligible constituent institution who are residents of North Carolina and recipients of a federal Pell Grant.

NC AHEC TO ESTABLISH TEAM‑BASED CARE CLINICAL TEACHING HUBS AND STUDY IMPEDIMENTS TO THE AVAILABILITY OF COMMUNITY‑BASED PRECEPTORS

SECTION 8.4.(a) Of the nonrecurring funds appropriated in this act from the ARPA Temporary Savings Fund in the 2023‑2024 fiscal year and the recurring funds appropriated in this act from the General Fund in the 2024‑2025 fiscal year to the Board of Governors of The University of North Carolina to be allocated to the University of North Carolina at Chapel Hill for the North Carolina Area Health Education Centers Program (NC AHEC) to create team‑based teaching sites, NC AHEC shall contract with up to five rural community‑based medical teaching practices for at least one hundred fifty thousand dollars ($150,000) per teaching practice per year to establish and maintain up to five outpatient, clinical, team‑based healthcare teaching sites across the rural areas of the State. At least one site shall be located in each of the three regions of the State. For purposes of this subsection, the regions of the State are the Western region, the Piedmont region, and the Eastern region. The teaching sites shall serve as team‑based locations for medical students to learn alongside nurse practitioners or physician assistants in rural clinical primary care rotations. Community‑based medical teaching practices receiving funds pursuant to this subsection shall contract with clinical preceptors to provide instruction, including significant time devoted to clinical instruction, to medical students and student nurse practitioners or student physician assistants. In establishing and maintaining these teaching sites, NC AHEC shall provide technical assistance to the teaching sites and consult, as appropriate, with schools within institutions of higher education that provide instruction for medical students, nurse practitioner students, and physician assistant students. No later than March 15 of each year funds are provided under this subsection, NC AHEC shall study the impact of the teaching sites and report at least the following information to the Joint Legislative Education Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services:

(1) The identity of the community‑based medical teaching practices receiving funds.

(2) An analysis of the financial impact of providing these services on a community‑based medical teaching practice.

(3) The impact of the teaching sites on (i) the learning and success of students and (ii) the health and well‑being of the respective service areas for each site.

SECTION 8.4.(b) Of the nonrecurring funds appropriated in this act from the ARPA Temporary Savings Fund in the 2023‑2024 fiscal year and the recurring funds appropriated in this act from the General Fund in the 2024‑2025 fiscal year to the Board of Governors of The University of North Carolina to be allocated to the University of North Carolina at Chapel Hill for the North Carolina Area Health Education Centers Program (NC AHEC), NC AHEC may use up to two hundred fifty thousand dollars ($250,000) in each year of the 2023‑2025 fiscal biennium to study (i) the availability of community preceptors in North Carolina and nearby states and (ii) the demand for those preceptors, including factors that influence the supply and barriers that community‑based outpatient clinicians face in teaching healthcare professional students. NC AHEC shall provide an interim report with its findings to the Joint Legislative Education Oversight Committee and the Joint Legislative Oversight Committee on Health and Human Services no later than April 1, 2024, and a final report no later than September 1, 2024. NC AHEC shall consult with other healthcare professional organizations and boards, including, but not limited to, the North Carolina Nurses Association, the North Carolina Academy of Family Physicians, the North Carolina Academy of Physician Assistants, the North Carolina Healthcare Association, the North Carolina Independent Colleges and Universities, the North Carolina Medical Society, the North Carolina Pediatric Society, The University of North Carolina, the North Carolina Board of Nursing, and the North Carolina Medical Board. As part of its study, NC AHEC shall do at least the following:

(1) Survey other states to identify the best innovative and effective approaches to address preceptor shortages for medical students, nurse practitioner students, physician assistant students, and prelicensure nursing students.

(2) Research and report on the current approaches to identifying, engaging, financing, and evaluating clinical training sites and how schools use tuition funding to cover their students' costs related to clinical placements and training. As part of this component of the study, NC AHEC shall consult with the Board of Governors of The University of North Carolina, the State Board of Community Colleges, and the North Carolina Independent Colleges and Universities.

(3) Assess the capacity of North Carolina and nearby states for clinical training sites, in consultation with the North Carolina Healthcare Association (NCHA), the North Carolina Community Health Center Association, and clinically integrated networks, including the following information:

a. The number and percentage of independent and health system practices that are currently clinical training sites in this State.

b. The number and percentage of independent and health system practices that could become clinical training sites in this State.

c. The impacts on the efficiency of clinical practices when or if they become clinical training sites.

d. The financial impact on an independent or health system practice if it precepts students in clinical rotations.

ESTABLISH THE SCHOOL OF CIVIC LIFE AND LEADERSHIP AT THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL

SECTION 8.5.(a) The Board of Trustees of the University of North Carolina at Chapel Hill, in consultation with the Board of Governors of The University of North Carolina, the Provost of the University of North Carolina at Chapel Hill, and faculty and administration officials at the University of North Carolina at Chapel Hill, shall establish the School of Civic Life and Leadership at the University of North Carolina at Chapel Hill (the School). The School shall meet at least the following requirements:

(1) Provide course opportunities for students. Courses may focus on the development of democratic competencies informed by American history and the American political tradition, with the purpose of fostering public discourse and civil engagement necessary to promote democracy and benefit society.

(2) Subject to approval of the Provost and the inaugural dean of the School, house the Program on Public Discourse.

(3) Develop programming to address the topics identified in subdivision (1) of this subsection and provide resources to students, faculty, and the general public, as needed.

(4) Hire at least 10 and no more than 20 faculty members from outside the University of North Carolina at Chapel Hill. These faculty members shall be hired with permanent tenure or be eligible to receive permanent tenure in accordance with policies adopted by The Board of Governors of The University of North Carolina and the University of North Carolina at Chapel Hill. The School shall not hire any faculty member without approval of the dean of the School. Faculty members may hold joint or courtesy appointments with other existing units of the University of North Carolina at Chapel Hill.

SECTION 8.5.(b) If the nonrecurring funds appropriated in this act to the Board of Governors of The University of North Carolina for the 2023‑2025 fiscal biennium to be allocated to the University of North Carolina at Chapel Hill for the School of Civic Life and Leadership are insufficient to establish the School pursuant to subsection (a) of this section, the University of North Carolina at Chapel Hill shall expend sufficient additional funds to achieve that purpose.

SECTION 8.5.(c) No later than December 31, 2023, the Provost of the University of North Carolina at Chapel Hill shall name the inaugural dean of the School, subject to the approval of the Board of Trustees.

SECTION 8.5.(d) No later than March 15, 2024, the Board of Trustees of the University of North Carolina at Chapel Hill shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on progress made toward establishing the School of Civic Life and Leadership and factors affecting the long‑term sustainability of the School.

REDUCE NUMBER OF REQUIRED UNC LABORATORY SCHOOLS FROM NINE TO EIGHT

SECTION 8.6.(a) G.S. 116‑239.5(a) reads as rewritten:

(a) The Board of Governors, upon recommendation by the President, shall designate constituent institutions to submit proposals to establish at least ~~nine~~ eight laboratory schools in total to serve public school students in accordance with the provisions of this Article. The Board of Governors shall select constituent institutions with high‑quality educator preparation programs as demonstrated by the annual performance measures reported by the constituent institutions in accordance with G.S. 115C‑296.35. The Board of Governors' Subcommittee on Laboratory Schools established under G.S. 116‑239.7 shall review the proposals and approve at least ~~nine~~ eight of the proposals to establish laboratory schools. The Subcommittee may select a constituent institution to operate more than one laboratory school. The Subcommittee shall oversee the operations of those laboratory schools to meet the purposes set forth in this Article.

SECTION 8.6.(b) G.S. 116‑239.7(a1) reads as rewritten:

(a1) Approval of Laboratory Schools. – The Board of Governors, upon the recommendation of the President, shall designate constituent institutions to establish and operate a total of at least ~~nine~~ eight laboratory schools. The chancellor of each constituent institution shall adopt and submit to the Subcommittee a proposal to operate one or more laboratory schools in one or more local school administrative units that meet the minimum threshold for the number of low‑performing schools located in a unit under G.S. 116‑239.6(4). The proposal shall include the governance structure of the laboratory school. The Subcommittee shall evaluate the proposals for approval or disapproval by considering the design components and the strategic focus of the laboratory school and any other standards developed by the Subcommittee to be applicable to all laboratory schools. The Subcommittee shall also consider the location of each laboratory school so that, to the extent possible, there is a geographically diverse distribution of the laboratory schools throughout the State. From the proposals submitted to the Subcommittee, the Subcommittee shall approve the establishment of at least ~~nine~~ eight laboratory schools.

FUNDS FOR ATHLETIC DEPARTMENTS WITH APPROVED PLANS TO PROVIDE ECONOMIC BENEFITS

SECTION 8.7.(a) For each fiscal year funds are provided pursuant to subsection (b) of this section, the athletic department for each of the following constituent institutions shall develop and submit to the President of The University of North Carolina a plan to provide an economic benefit to the constituent institution and the service region of the constituent institution in that fiscal year:

(1) Elizabeth City State University.

(2) Fayetteville State University.

(3) North Carolina Agricultural and Technical State University.

(4) North Carolina Central University.

(5) The University of North Carolina at Asheville.

(6) The University of North Carolina at Greensboro.

(7) The University of North Carolina at Pembroke.

(8) The University of North Carolina at Wilmington.

(9) Western Carolina University.

(10) Winston‑Salem State University.

SECTION 8.7.(b) Of the nonrecurring funds appropriated in this act to the Board of Governors of The University of North Carolina for each fiscal year of the 2023‑2025 fiscal biennium for athletic department operating support, if the President of The University of North Carolina approves a plan submitted under subsection (a) of this section, the Board of Governors shall allocate one tenth of the funds provided in the fiscal year in which the plan is approved to that constituent institution to support its athletic department.

EDUCATIONAL OPPORTUNITIES PROGRAM

SECTION 8.8.(a) Program; Purpose. – The Board of Governors of The University of North Carolina shall establish a College of Educational Opportunities Program (Program) for eligible students with intellectual and developmental disabilities. North Carolina State University shall develop and operate the Program beginning in the 2023‑2024 fiscal year. North Carolina Central University shall adapt and operate the Program as developed by North Carolina State University for use beginning in the 2024‑2025 fiscal year. The purpose of the Program is to provide postsecondary opportunities for eligible students, including the following:

(1) A person‑centered planning process.

(2) The opportunity to pursue educational credentials, including degrees, certificates, and other nondegree credentials.

(3) Inclusive academic enrichment, socialization, independent living skills, and integrated work experiences to develop career skills that can lead to gainful employment.

(4) Individual supports and services for academic and social inclusion in academic courses, extracurricular activities, and other aspects of campus life.

SECTION 8.8.(b) Definition. – For purposes of this section, the term eligible student refers to a person who meets all of the following:

(1) Is 22 years of age or older.

(2) Is an adult with intellectual and developmental disabilities.

SECTION 8.8.(c) Funds. – Funds appropriated to the Board of Governors of The University of North Carolina in this act for the Program shall meet the following criteria:

(1) The funds may be used for any of the following purposes:

a. Administrative staff, including a director of the Program, and programmatic staff, including instructors and peer mentors.

b. Training for university faculty.

c. Improvements to existing assistive technologies and other academic support services offered by the university.

d. Scholarships for tuition and fees for economically disadvantaged students.

e. Additional supports, including counseling, mentoring, and transportation.

f. Outreach, including website design and recruitment.

(2) The funds shall be allocated in the below fiscal years as follows:

a. For the 2023‑2024 fiscal year, three million dollars ($3,000,000) in recurring funds shall be allocated to North Carolina State University to develop and operate the Program.

b. Beginning in the 2024‑2025 fiscal year, the following amounts in recurring funds shall be allocated:

1. Three million dollars ($3,000,000) to North Carolina State University to operate the Program.

2. Three million dollars ($3,000,000) to North Carolina Central University to adapt and operate the Program.

SECTION 8.8.(d) Report. – No later than May 15, 2024, and annually thereafter, the Board of Governors shall report to the Joint Legislative Education Oversight Committee on the impact of the Program, including the impact of the Program on the performance of eligible students.

CTE GRANTS FOR AGRICULTURE

SECTION 8.9.(a) Of the funds appropriated in this act to the Board of Governors of The University of North Carolina for each year of the 2023‑2025 fiscal biennium to be allocated to North Carolina State University, the Agriculture Extension shall use up to two million dollars ($2,000,000) in nonrecurring funds for the North Carolina Future Farmers of America (FFA) to provide and administer grants for the 2023‑2024 and 2024‑2025 academic years to fund items necessary for the agriculture education program operated as a part of the Career and Technical Education (CTE) program at a given middle or high school within a public school unit. For purposes of these grants, items necessary to the agriculture education program of a CTE program include greenhouses, animals and livestock, and power tools. FFA shall provide a full list of items that are eligible to be purchased with funds received pursuant to this program and make the list publicly available on its website. FFA may consult with the Department of Agriculture and Consumer Services when evaluating a grant for selection that includes the purchase of animals. A public school unit or a regional partnership of more than one public school unit may apply to receive funds. When awarding grants under this subsection, FFA shall prioritize public school units (i) located, in whole or in part, in a county with at least one local school administrative unit that received low‑wealth supplemental funding in the previous fiscal year and (ii) that have a high population of at‑risk students or students with disabilities. Grant recipients may make items purchased with grant funds available to any students within the public school unit or partnership regardless of whether the student is identified as at‑risk or a student with a disability. Funds provided pursuant to this section shall not revert to the General Fund but shall remain available for this purpose until June 30, 2025.

SECTION 8.9.(b) FFA shall create and make available an application for grants under this section no later than 30 days of this act becoming law. Applicants shall submit their application to receive grant funds to FFA no later than June 15, 2024. FFA shall approve or deny each application within 30 days of receipt.

SECTION 8.9.(c) All recipients of grants under this section for each school year shall submit a report to FFA no later than October 15, 2024, on the outcomes of any programs funded by grants received under this section, including data collection methods for reporting on student outcomes, impacts of the program, and use of State funds. FFA shall then submit a report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the overall outcomes of the grant program no later than December 15, 2024.

SECTION 8.9.(d) Of the funds allocated by this section for grants as provided by subsection (a) of this section, up to fifty thousand dollars ($50,000) in each fiscal year of the 2023‑2025 biennium may be retained by FFA to be used for administrative costs associated with the grant program.

BOARD OF GOVERNORS STUDY NEW TEACHER SUPPORT PROGRAM/ELIZABETH CITY STATE

SECTION 8.10. No later than December 15, 2023, the Board of Governors shall report to the Joint Legislative Education Oversight Committee on the advisability and feasibility of incorporating additional constituent institutions, including Elizabeth City State University, as administrators of the New Teacher Support Program.

COLLABORATORY REPORT ON RECOVERY COURT STUDY RESULTS

SECTION 8.11.(a) Of the funds appropriated in this act from the Opioid Abatement Reserve established pursuant to Section 9F.1 of S.L. 2021‑180, as amended by Section 9F.1 of S.L. 2022‑74, to the Board of Governors of The University of North Carolina to be allocated to the University of North Carolina at Chapel Hill for the North Carolina Collaboratory (Collaboratory), the Collaboratory shall study existing judicially managed accountability and recovery courts (JMARCs), including those drug treatment courts and JMARCs partially or fully exempted from Article 62 of Chapter 7A of the General Statutes under G.S. 7A‑802. These funds shall not revert at the end of the 2023‑2024 fiscal year but shall remain available until expended.

SECTION 8.11.(b) No later than October 1, 2024, the Collaboratory shall report on the results of the study required by subsection (a) of this section to the following entities:

(1) The Joint Legislative Oversight Committee on Health and Human Services.

(2) The Joint Legislative Oversight Committee on Justice and Public Safety.

(3) The Joint Legislative Education Oversight Committee.

(4) The chairs of the House and Senate Appropriations Committees on Health and Human Services.

(5) The chairs of the House and Senate Appropriations Committees on Justice and Public Safety.

(6) The chairs of the House and Senate Appropriations Committees on Education.

SECTION 8.11.(c) The report required by subsection (b) of this section shall include, at a minimum, each of the following:

(1) Executive summary of the study and its findings.

(2) Summary of each JMARC's operating model.

(3) Summary of each JMARC's funding sources.

(4) Analysis of demand and capacity for each JMARC.

(5) Summary of need and local interest for additional JMARCs.

(6) Feasibility of JMARCs operating across counties and across judicial districts.

(7) Proposed JMARC expansion plan.

(8) List of funding sources to support the expansion plan outlined in subdivision (7) of this subsection.

SECTION 8.11.(d) This section is effective when it becomes law.

REQUIRE COMPREHENSIVE TRANSITION POSTSECONDARY PROGRAMS REPORT AND ESTABLISH CTP PROGRAM AT UNC‑W

SECTION 8.12.(a) Article 35A of Chapter 116 of the General Statutes is amended by adding a new section to read:

§ 116‑298. Report.

The University of North Carolina System Office shall report to the Joint Legislative Education Oversight Committee by March 15 of each year on the impact on participants of CTP Programs at constituent institutions of The University of North Carolina. At a minimum, the report shall include the following information for each CTP Program at a constituent institution:

(1) Admissions requirements.

(2) Number of participants.

(3) Participant outcomes, including credits earned toward a degree, diploma, or certificate and job placements for participants and graduates.

SECTION 8.12.(b) Of the recurring funds appropriated in this act to the Board of Governors of The University of North Carolina for the 2023‑2025 fiscal biennium to be allocated to the University of North Carolina at Wilmington (UNC‑W), UNC‑W shall establish a certificate accomplishment program to be approved by the United States Department of Education as a Comprehensive Transition Postsecondary (CTP) Program (Program) for students with intellectual disabilities in accordance with the Higher Education Opportunity Act of 2008, 20 U.S.C. §§ 1140f through 1140i.

SECTION 8.12.(c) No later than March 15, 2025, UNC‑W shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on its progress in establishing the Program pursuant to subsection (b) of this section. The report shall include at least the following information:

(1) Steps taken and steps remaining to establish the Program.

(2) Proposed or actual admissions requirements for the Program.

(3) Support services to be provided by the Program, including the eligibility of participants to receive college credits.

(4) Actual or estimated number of participants in the Program.

(5) Estimated additional costs to provide scholarships to students participating in the Program under the Comprehensive Transition Postsecondary Scholarship Program established pursuant to Article 35A of Chapter 116 of the General Statutes.

(6) Whether the Program has been approved by the United States Department of Education and, if not, a time line for approval.

AGRICULTURE ANALYTICS PLATFORM INITIATIVE

SECTION 8.13.(a) Of the recurring funds appropriated in this act to the Board of Governors of The University of North Carolina to be allocated to North Carolina State University (NC State) and North Carolina Agricultural and Technical State University (NC A&T) to deploy an analytics platform for agriculture initiatives, NC State and NC A&T shall each contract with SAS Institute, Inc., to establish or maintain a software platform to use data collection and analytics to improve agricultural systems and agricultural profitability. Funds shall be used for software, equipment installation, cloud hosting, and technical support. NC State and NC A&T shall collaborate in the creation and use of these platforms as much as practicable.

SECTION 8.13.(b) No later than August 15, 2025, NC State and NC A&T shall jointly report to the Joint Legislative Education Oversight Committee on the impact of the Initiative on the following:

(1) The sustainability and profitability of agricultural systems in the State, including any improved efficiencies.

(2) Research grants secured by each constituent institution.

(3) Student and faculty recruitment and retention.

(4) Engagement and collaboration with private farmers in the State.

(5) Faculty research on agriculture.

(6) Collaboration between NC State and NC A&T.

UNIVERSITY OF NORTH CAROLINA SYSTEM FACULTY REALIGNMENT INCENTIVE PROGRAM

SECTION 8.14.(a) For purposes of this section, the term identified faculty member means a full‑time, tenured faculty member employed by a constituent institution of The University of North Carolina who meets all of the following criteria:

(1) Is at least 55 years of age.

(2) Meets either of the following criteria:

a. Is eligible to commence retirement with an early or service retirement allowance under the Teachers' and State Employees' Retirement System (TSERS).

b. Is vested in the Optional Retirement Program (ORP) for The University of North Carolina.

(3) Does not receive disability or workers' compensation benefits.

SECTION 8.14.(b) For the 2023‑2025 fiscal biennium, the Board of Governors of The University of North Carolina shall establish a Faculty Realignment Incentive Pilot Program (Program) for constituent institutions of The University of North Carolina to award severance payments to identified faculty members to provide long‑term cost‑savings and improved operational efficiencies for The University of North Carolina. Funds for the Program shall be distributed among constituent institutions based on criteria established by the President of The University of North Carolina. The Program shall meet at least the following requirements:

(1) An identified faculty member shall be selected to receive a payment under the Program in the discretion of the constituent institution where the identified faculty member is employed.

(2) Severance payments shall be equivalent to the identified faculty member's base salary from the prior academic year.

(3) Severance payments shall be exempt from payroll deductions for retirement contributions and shall not be considered compensation for purposes of the supplemental plans administered by The University of North Carolina or plans administered by the Supplemental Retirement Board of Trustees under G.S. 135‑96.

(4) If an identified faculty member does not qualify for the full employer premium contribution for retiree health coverage provided under TSERS or ORP, then the constituent institution where the identified faculty member is employed may provide the faculty member, in addition to a severance payment, an amount equivalent to 12 months of the full employer contribution to the employee health insurance premium.

SECTION 8.14.(c) By December 1, 2024, and annually thereafter, while funds are expended under the Program, the Board of Governors shall report at least the following information on the Program to the Joint Legislative Education Oversight Committee and the Fiscal Research Division, disaggregated by constituent institution:

(1) The number of identified faculty members that received funds under the Program.

(2) The total amount paid out by the Program.

SECTION 8.14.(d) The nonrecurring funds appropriated to the Board of Governors of The University of North Carolina in this act for the 2023‑2024 fiscal year for the University of North Carolina System Faculty Realignment Incentive Program, as enacted by this section, shall not revert to the General Fund at the end of the 2023‑2024 fiscal year but shall remain available until expended.

REVISE POSTSECONDARY ATTAINMENT GOAL REPORTING TIME

SECTION 8.15. Section 1(c) of S.L. 2019‑55 reads as rewritten:

SECTION 1.(c) Beginning ~~September 1, 2020,~~ March 1, 2024, and every ~~September~~ March 1 thereafter, the myFutureNC Commission, which is a statewide commission focusing on postsecondary educational attainment in North Carolina, shall report to the General Assembly, as provided by G.S. 120‑29.5, and to the Joint Legislative Education Oversight Committee on the progress of the State reaching the postsecondary attainment goal set forth in G.S. 116C‑10, as enacted by this act, and activities by the Commission to further North Carolina towards the postsecondary attainment goal.

WATER SAFETY ACT OF 2023

SECTION 8.16.(a) Water Research Funding. – Funds appropriated in this act to the North Carolina Collaboratory (Collaboratory) for the 2023‑2024 fiscal year for research and other programs related to per‑ and poly‑fluoroalkyl substances (PFAS) and the Collaboratory's general research programs shall be allocated as follows:

(1) Twenty million dollars ($20,000,000) in nonrecurring funds for programs related to management of aqueous film‑forming foams (AFFF) containing PFAS used by local fire departments and for other PFAS‑related research. For purposes of this act, local fire department means a fire department operated, regulated, or managed by one or more units of State or local government, including those located at or serving public airports. These funds are allocated to the Collaboratory for the following purposes:

a. To conduct a voluntary buyback program for stocks of PFAS‑containing AFFF owned or stored by local fire departments. The program may also include the purchase and distribution of replacement PFAS‑free foams.

b. To develop, acquire, analyze, and deploy facilities and technologies to safely store and destroy PFAS‑containing AFFF, including technologies available outside of the State.

c. To provide competitive research grants for (i) human exposure and other studies intended to assess the long‑term health risk to firefighters and other emergency response personnel and their family members from exposure to PFAS‑containing AFFF and related PFAS‑containing materials and (ii) other research related to PFAS in water and air, PFAS toxicology and human exposure, and the mitigation, removal, or destruction of PFAS and PFAS‑containing materials.

d. To fund upgrades to laboratory space at the Textile Protection and Comfort Center at North Carolina State University to accommodate aerosol studies that simulate airborne PFAS particulate exposure.

(2) Four million dollars ($4,000,000) in recurring funds for other PFAS research projects. In its expenditure of the funds allocated by this subsection, the Collaboratory may prioritize funding of a multiyear human exposure study related to per‑ and poly‑fluoroalkyl substances (PFAS) in North Carolina counties identified with higher than average PFAS exposure risks from inhalation, ingestion, and dermal exposure. Selection of study participants shall prioritize counties and communities (i) with a primary drinking water source from the Haw or the Cape Fear River, (ii) located near industrial processes that use or create PFAS or chemical precursors to PFAS that may become PFAS compounds once released, (iii) located within the Cape Fear and Lumber River Basins, and (iv) that may present a particularized risk, exposure, or other health factors deemed appropriate by the Collaboratory. The Collaboratory may also prioritize other discretionary PFAS‑related research deemed important to the State by the Collaboratory. The Collaboratory may engage expertise from the Departments of Environmental Quality and Health and Human Services and may utilize the Office of Strategic Partnerships within the Office of State Budget and Management to assist in working with State and local agencies.

(3) Two million dollars ($2,000,000) in recurring funds for water‑related research for emerging compounds, water quality improvements, or other discretionary research deemed important to the State by the Collaboratory.

SECTION 8.16.(b) Report. – The Collaboratory shall include in the report required by G.S. 116‑256 documentation of its use of the funds allocated by this section and updates regarding the research funded by this section.

SECTION 8.16.(c) HMSI Research Grants. – Section 8.9(a) of S.L. 2021‑180 reads as rewritten:

SECTION 8.9.(a) The North Carolina Collaboratory (Collaboratory), established pursuant to Article 31A of Chapter 116 of the General Statutes, shall establish a research grant program for the following constituent institutions of The University of North Carolina identified as Historically Minority‑Serving Institutions (HMSIs): Elizabeth City State University, Fayetteville State University, North Carolina Agricultural and Technical State University, North Carolina Central University, the University of North Carolina at Pembroke, and Winston‑Salem State University. The Collaboratory shall establish an application process and criteria for research grants that include a focus on areas within the Collaboratory's mission of facilitating research related to the environmental and economic components of the management of the natural resources within the State and of new technologies for habitat, environmental, and water quality improvements and other areas of public health.as set forth in G.S. 116‑255.

The Collaboratory may award one or more research grants each fiscal year to each of the six HMSI constituent institutions to be used to expand their research capacity while being in service to the needs of the State. Of the funds appropriated by this act for the research grant program, the Collaboratory shall determine the amount of the research grant for each HMSI constituent institution in a fiscal year.

SECTION 8.16.(d) Public Water Supply Fluoridation Study. – The Commission for Public Health shall perform a review of the National Toxicity Program's September 2022 draft report titled Monograph on the State of the Science Concerning Fluoride Exposure and Neurodevelopmental and Cognitive Health Effects: A Systematic Review, as well as the studies reviewed in the report, and any other studies the Commission finds relevant to an assessment of the association between fluoride exposure and IQ in children. Based on this review, the Commission shall determine whether sufficient evidence exists for a link between fluoride in the public water supply and cognitive decline or any other neurological detriment in children.

SECTION 8.16.(e) The Commission shall make a report to the General Assembly on or before February 1, 2024, of its findings and recommendations, including a recommendation on whether the current standard for fluoride established in the Commission's rules (i) is protective of public health and (ii) should be lowered. If the Commission makes the determination regarding a link between fluoride in public water supplies and neurological impacts in children as described in subsection (a) of this section, then the Commission shall direct the Department of Health and Human Services to create a list of the private and public water utilities in the State, their fluoride concentration, the number of children or households to which they provide water, and any other information that it deems pertinent. The Department shall include with the list a ranking of the risk to children of the water supplied by each utility.

SECTION 8.16.(f) Revenue Sharing and Funding Availability. – G.S. 116‑255(c) reads as rewritten:

…

(7) The Collaboratory may negotiate or impose data use, data management, and revenue sharing requirements for intellectual property developed through its research awards using State funds, including, but not limited to, contractual terms that provide for gross revenue distribution to the General Fund for future research and development projects.

(8) Funds appropriated by the General Assembly to the Collaboratory (i) shall not revert to the General Fund but shall remain available until expended and (ii) shall not apply to the carryforward limitation imposed on constituent institutions of The University of North Carolina by G.S. 116‑30.3.

SECTION 8.16.(g) Effective Date. – Subsections (a) and (b) of this section become effective July 1, 2023. The remainder of this section is effective when it becomes law.

UNC‑W RESEARCH PROGRAMS IN CRITICAL WORKFORCE AREAS FUNDS AND REPORT

SECTION 8.17. Of the recurring funds appropriated in this act to the Board of Governors of The University of North Carolina for the 2023‑2025 fiscal biennium to be allocated to the University of North Carolina at Wilmington (UNC‑W) for research programs, UNC‑W shall expand research programs in critical research areas to maintain its classification in the Carnegie Classification of Institutions of Higher Education as R2 – High Research Activity. UNC‑W shall use these funds only to expand relevant research programs in critical research areas and shall not supplant other funds already allocated for these purposes. By March 15, 2024, and every year thereafter in which these funds are provided, UNC‑W shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the use of the funds. The report shall include at least the following information:

(1) A detailed explanation of how the funds are used, including all expansions on research programs supported by these funds since the previous report and the nature of each expansion.

(2) All critical research areas at the university, as defined by UNC‑W.

(3) The impact of the expansions identified in subdivision (1) of this section on the critical research areas identified in subdivision (2) of this section, including the extent to which the expansions support the continued classification of UNC‑W as a High Research Activity institution.

(4) Recommended actions to maintain the classification of UNC‑W as a High Research Activity institution or to improve that classification to R1 – Very High Research Activity.

(5) Any other matter UNC‑W deems relevant to the efficient and effective expenditure of these funds.

REVISE DISTINGUISHED PROFESSORS ENDOWMENT TRUST FUND

SECTION 8.18.(a) Part 4A of Article 1 of Chapter 116 of the General Statutes reads as rewritten:

Part 4A. Distinguished Professors Endowment Trust Fund.

§ 116‑41.13. ~~Distinguished Professors Endowment Trust Fund; purpose.~~Purpose.

The General Assembly of North Carolina recognizes that the public university system would be greatly strengthened by the addition of distinguished ~~scholars.~~ scholars for degree programs in STEM subject areas. It further recognizes that private as well as State support is preferred in helping to obtain distinguished scholars for the State universities and that private support will help strengthen the commitment of citizens and organizations in promoting excellence throughout all State universities. It is the intent of the General Assembly to establish a trust fund to provide the opportunity to each State university to receive and match challenge grants to create endowments for selected distinguished professors for degree programs in STEM subject areas to occupy chairs within the university. The associated foundations that serve the universities shall solicit and receive gifts from private sources to provide for matching funds to the trust fund challenge grants for the establishment of endowments for chairs for degree programs in STEM subject areas within universities.

§ 116‑41.13A. ~~Distinguished Professors Endowment Trust Fund; definitions.~~Definitions.

The following definitions apply in this Part:

(1) ~~Focused growth institution means~~ Focused growth institution. – Any of the following:

a. Elizabeth City State ~~University,~~ University.

b. Fayetteville State ~~University,~~ University.

c. North Carolina Agricultural and Technical ~~University,~~ University.

d. North Carolina Central ~~University,~~ University.

e. The University of North Carolina at ~~Pembroke,~~ Pembroke.

f. Western Carolina ~~University, and~~ University.

g. Winston‑Salem State University.

(2) ~~Special needs institution means the~~ Special needs institution. – The North Carolina School of the Arts, redesignated effective August 1, 2008, as the University of North Carolina School of the Arts, and The University of North Carolina at Asheville.

(3) STEM subject area. – Any subject area in a field of scholarship related to science, technology, engineering, or mathematics. A subject area in a field of scholarship related to journalism or law is not a STEM subject area.

§ 116‑41.14. ~~Distinguished Professors Endowment Trust Fund; establishment;~~ Establishment of the Fund; maintenance.

There is established a Distinguished Professors Endowment Trust Fund to be maintained by the Board to provide challenge grants to the constituent institutions. All appropriated funds deposited into the trust fund shall be invested pursuant to G.S. 116‑36. Interest income accruing to that portion of the trust fund not matched shall increase the total funds available for challenge grants.

§ 116‑41.15. ~~Distinguished Professors Endowment Trust Fund; allocation;~~ Allocation; administration.

(a) For constituent institutions other than focused growth institutions and special needs institutions, the amount appropriated to the trust shall be allocated by the Board as follows:

(1) According to one of the following:

~~(1)~~a. On the basis of one three hundred thirty‑four thousand dollar ($334,000) challenge grant for each six hundred sixty‑six thousand dollars ($666,000) raised from private ~~sources; or~~sources.

~~(2)~~b. On the basis of one one hundred sixty‑seven thousand dollar ($167,000) challenge grant for each three hundred thirty‑three thousand dollars ($333,000) raised from private ~~sources; or~~sources.

~~(3)~~c. On the basis of one challenge grant of up to six hundred sixty‑seven thousand dollars ($667,000) for funds raised from private sources in twice the amount of the challenge grant.

(2) If an institution chooses to pursue the use of the allocated challenge grant funds described in either ~~subdivision (1), subdivision (2),~~ sub‑subdivision a., sub‑subdivision b., or ~~subdivision (3)~~ sub‑subdivision c. of subdivision (1) of this subsection, the challenge grant funds shall be matched by funds from private sources on the basis of two dollars of private funds for every one dollar of State funds.

(b) For focused growth institutions and special needs institutions, the amount appropriated to the trust shall be allocated by the Board as follows:

(1) According to one of the following:

~~(1)~~a. On the basis of one five hundred thousand dollar ($500,000) challenge grant for each five hundred thousand dollars ($500,000) raised from private ~~sources; or~~sources.

~~(2)~~b. On the basis of one two hundred fifty thousand dollar ($250,000) challenge grant for each two hundred fifty thousand dollars ($250,000) raised from private ~~sources; or~~sources.

~~(3)~~c. On the basis of one challenge grant of up to one million dollars ($1,000,000) for funds raised from private sources in the same amount as the challenge grant.

(2) If an institution chooses to pursue the use of the allocated challenge grant funds described in either ~~subdivision (1), subdivision (2),~~ sub‑subdivision a., sub‑subdivision b., or ~~subdivision (3)~~ sub‑subdivision c. of subdivision (1) of this subsection, the challenge grant funds shall be matched by funds from private sources on the basis of one dollar of private funds for every dollar of State funds.

(c) Matching funds shall come from contributions made after July 1, 1985, and pledged for the purposes specified by G.S. 116‑41.14. Each participating constituent institution's board of trustees shall establish its own Distinguished Professors Endowment Trust ~~Fund,~~ Fund and shall maintain it pursuant to the provision of G.S. 116‑36 to function as a depository for private contributions and for the State matching funds for the challenge grants. The State matching funds shall be transferred to the constituent institution's Endowment Fund upon notification that the institution has received and deposited the appropriate amount required by this section in its own Distinguished Professors Endowment Trust Fund. Only the net income from that account shall be expended in support of the distinguished professorship thereby created.

§ 116‑41.16. ~~Distinguished Professors Endowment Trust Fund; contribution~~ Contribution commitments.

(a) For constituent institutions other than focused growth institutions and special needs institutions, contributions may also be eligible for matching ~~if there is:~~as follows:

(1) If there is one of the following:

~~(1)~~a. A commitment to make a donation of at least six hundred sixty‑six thousand dollars ($666,000), as prescribed by G.S. 143C‑4‑5, and an initial payment of one hundred eleven thousand dollars ($111,000) to receive a grant described in ~~G.S. 116‑41.15(a)(1); or~~G.S. 116‑41.15(a)(1)a.

~~(2)~~b. A commitment to make a donation of at least three hundred thirty‑three thousand dollars ($333,000), as prescribed by G.S. 143C‑4‑5, and an initial payment of fifty‑five thousand five hundred dollars ($55,500) to receive a grant described in ~~G.S. 116‑41.15(a)(2); or~~G.S. 116‑41.15(a)(1)b.

~~(3)~~c. All of the following:

1. A commitment to make a donation in excess of six hundred sixty‑six thousand dollars ($666,000), as prescribed by ~~G.S. 143‑31.4, and an~~ G.S. 143C‑4‑5.

2. An initial payment of one‑sixth of the committed amount to receive a grant described in ~~G.S. 116‑41.15(a)(3); and if the~~ G.S. 116‑41.15(a)(1)c.

3. The initial payment is accompanied by a written pledge to provide the balance within five years after the date of the initial payment. Each payment on the balance shall be no less than the amount of the initial payment and shall be made on or before the anniversary date of the initial payment.

(2) Pledged contributions may not be matched prior to the actual collection of the total funds. Once the income from the institution's Distinguished Professors Endowment Trust Fund can be effectively used pursuant to G.S. 116‑41.17, the institution shall proceed to implement plans for establishing an endowed ~~chair.~~chair in a STEM subject area.

(b) For focused growth institutions and special needs institutions, contributions may also be eligible for matching ~~if there is:~~as follows:

(1) If all of the following occur:

a. One of the following occurs:

~~(1)~~1. A commitment to make a donation of at least five hundred thousand dollars ($500,000), as prescribed by G.S. 143C‑4‑5, and an initial payment of eighty‑three thousand three hundred dollars ($83,300) to receive a grant described in ~~G.S. 116‑41.5(b)(1); or~~G.S. 116‑41.15(b)(1)a.

~~(2)~~2. A commitment to make a donation of at least two hundred fifty thousand dollars ($250,000), as prescribed by G.S. 143C‑4‑5, and an initial payment of forty‑one thousand six hundred dollars ($41,600) to receive a grant described in ~~G.S. 116‑41.15(b)(2); or~~G.S. 116‑41.15(b)(1)b.

~~(3)~~3. A commitment to make a donation in excess of five hundred thousand dollars ($500,000), as prescribed by ~~G.S. 143‑31.4,~~ G.S. 143C‑4‑5, and an initial payment of one‑sixth of the committed amount to receive a grant described in ~~G.S. 116‑41.15(b)(3); and if the~~ G.S. 116‑41.15(b)(1)c.

b. The initial payment is accompanied by a written pledge to provide the balance within five years after the date of the initial payment. Each payment on the balance shall be no less than the amount of the initial payment.

§ 116‑41.17. ~~Distinguished Professors Endowment Trust Fund; establishment~~ Establishment of chairs.

(a) ~~When~~ The board of trustees may recommend to the Board, for its approval, the establishment of an endowed chair or chairs in a STEM subject area when the sum of the challenge grant and matching funds in the Distinguished Professors Endowment Trust Fund ~~reaches:~~reaches one of the following:

(1) One million dollars ($1,000,000), if the sum of funds described in ~~G.S. 116‑41.15(a)(1) or G.S. 116‑41.15(b)(1); or~~G.S. 116‑41.15(a)(1)a. or G.S. 116‑41.15(b)(1)a.

(2) Five hundred thousand dollars ($500,000), if the sum of funds described in ~~G.S. 116‑41.15(a)(2) or G.S. 116‑41.15(b)(2); or~~G.S. 116‑41.15(a)(1)b. or G.S. 116‑41.15(b)(1)b.

(3) An amount up to two million dollars ($2,000,000), if the sum of funds described in ~~G.S. 116‑41.15(a)(3) or G.S. 116‑41.15(b)(3);~~G.S. 116‑41.15(a)(1)c. or G.S. 116‑41.15(b)(1)c.

~~the board of trustees may recommend to the Board, for its approval, the establishment of an endowed chair or chairs.~~

(b) The Board, in considering whether to approve the ~~recommendation,~~ recommendation made pursuant to subsection (a) of this section, shall include in its consideration the programs already existing in The University of North Carolina. If the Board approves the recommendation, the chair or chairs shall be established. The chair or chairs, the property of the constituent institution, may be named in honor of a donor, benefactor, or honoree of the institution, at the option of the board of trustees.

§ 116‑41.18. ~~Distinguished Professors Endowment Trust Fund; selection~~ Selection of Distinguished Professors.

(a) Each constituent institution that receives, through private gifts and an allocation by the Board of Governors, funds for the purpose shall, under procedures established by rules of the Board of Governors and the board of trustees of the constituent institution, select a holder of the Distinguished ~~Professorship.~~ Professorship in a STEM area. Once given, that designation shall be retained by the distinguished professor as long as he the distinguished professor remains in the full‑time service of the institution as a faculty member, or for more limited lengths of time when authorized by the Board of Governors and the board of trustees at the institution when the Distinguished Professorship is originally established or vacated. When a distinguished professorship becomes vacant, it shall remain assigned to the institution and another distinguished professor shall be selected under procedures established by rules of the Board of Governors and the board of trustees of the constituent institution.

(a1) No rule shall prevent the constituent institutions of The University of North Carolina from selecting holders of Distinguished Professorships from among existing faculty members or newly hired faculty members.

(b) The Board of Governors of The University of North Carolina shall promulgate rules to implement this section.

(c) There is appropriated from the General Fund to the Board of Governors of The University of North Carolina the sum of two million dollars ($2,000,000) for fiscal year 1985‑86, and the sum of two million dollars ($2,000,000) for fiscal year 1986‑87, to implement this section.

§ 116‑41.19. ~~Distinguished Professors Endowment Trust Fund; promulgation of rules.~~Promulgation of rules; list of STEM subject areas.

(a) The Board of Governors of The University of North Carolina shall promulgate rules to implement this Part.

(b) No later than December 15, 2024, and annually thereafter, the Board of Governors shall identify and provide to the Joint Legislative Education Oversight Committee a list of degree programs in STEM subject areas and the number of distinguished professorships at each constituent institution funded pursuant to this Part in each STEM subject area. The Board of Governors shall make the list of degree programs in STEM subject areas available on its website.

SECTION 8.18.(b) The nonrecurring funds appropriated in this act to the Distinguished Professors Endowment Trust Fund for the 2023‑2025 fiscal biennium shall be used to provide matching funds only for selected distinguished professors in STEM subject areas, as defined by the Board of Governors, in accordance with Part 4A of Article 1 of Chapter 116 of the General Statutes, as amended by this section.

SECTION 8.18.(c) Subsection (a) of this section is effective when this act becomes law and applies to distinguished professorships established on or after that date.

COLLABORATORY STUDY NEXT‑GENERATION ENERGY AND RESEARCH DEVELOPMENT

SECTION 8.19.(a) Of the nonrecurring funds appropriated in this act for each year of the 2023‑2025 fiscal biennium to the Board of Governors of The University of North Carolina to be allocated to the University of North Carolina at Chapel Hill for the North Carolina Collaboratory (Collaboratory) for next‑generation energy and research development, the Collaboratory shall develop academic research partnerships with North Carolina businesses working in the field of next‑generation energies and shall leverage those partnerships to perform research and development on next‑generation energy technologies, including, but not limited to, lithium batteries; computer chip manufacturing; small modular‑ or micro‑nuclear technologies; hydrogen storage, production, and transportation; and grid modeling across numerous scenarios for power generation, storage, and distribution. These funds shall not revert at the end of each year of the 2023‑2025 fiscal biennium but shall remain available until expended.

SECTION 8.19.(b) The Collaboratory shall report on its activities pursuant to subsection (a) of this section by March 15, 2024, and annually thereafter while funds are expended under this section, to the Joint Legislative Education Oversight Committee. The report shall include, at a minimum, all academic research partnerships established pursuant to this section, the research and development projects undertaken alone or via those partnerships, and the results of those projects, if any.

REALLOCATION OF FUNDS BETWEEN PATRIOT STAR FAMILY SCHOLARSHIP NONPROFIT CORPORATIONS

SECTION 8.20.(a) Of the recurring funds appropriated in S.L. 2021‑180 from the General Fund to the Board of Governors of The University of North Carolina to be allocated to the Marine Corps Scholarship Foundation, Inc., in the 2021‑2023 fiscal biennium for the Patriot Star Family Scholarship Program (Program) pursuant to Section 8.3 of S.L. 2021‑180, the Marine Corps Scholarship Foundation shall transfer any unencumbered funds remaining at the end of the 2022‑2023 fiscal year to the Patriot Foundation in the 2023‑2024 fiscal year to be used to award scholarships pursuant to the Program. The Board of Governors shall assist the Marine Corps Scholarship Foundation to facilitate the transfer as needed.

SECTION 8.20.(b) Of the three million dollars ($3,000,000) in nonrecurring funds appropriated in S.L. 2021‑180 from the State Fiscal Recovery Fund to the Board of Governors of The University of North Carolina to be allocated to the Marine Corps Scholarship Foundation, Inc., for the North Carolina Patriot Star Family Recovery Scholarship Program (Program) pursuant to Section 8.19 of S.L. 2021‑180, the Board of Governors shall transfer any unexpended funds up to three million dollars ($3,000,000) in the 2023‑2024 fiscal year to the Patriot Foundation to award scholarships pursuant to the Program.

SECTION 8.20.(c) Subsection (a) of this section becomes effective June 30, 2023.

GREEN INDUSTRY ECONOMIC IMPACT STUDY/NCSU

SECTION 8.21. Of the nonrecurring funds appropriated to the Board of Governors of The University of North Carolina in this act for the 2023‑2024 fiscal year to be allocated to North Carolina State University for the College of Agriculture and Life Sciences (CALS), CALS shall study the statewide, regional, and county‑level economic impact of the green industry in the State. CALS shall perform the study in consultation with the Department of Agriculture and Consumer Services and The North Carolina Green Industry Council and shall report the results of its study by January 15, 2025, to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources. For purposes of the study required pursuant to this section, the green industry refers to the production, design, installation, maintenance, and sale of plants, including trees, shrubs, flowers, sod, and related goods and services, to enhance, beautify, and protect human environments and to provide jobs and economic growth, including at least the following:

(1) Nursery and tree production.

(2) Turfgrass production.

(3) Horticulture input and equipment suppliers.

(4) Landscaping and landscape design services.

(5) Nursery, florists, garden center, and farm supply retailers.

(6) Composting.

(7) Urban forestry.

(8) Parks and airports.

(9) Christmas tree production.

(10) Botanic gardens and arboretums.

CLARIFY DEFINITION OF ELIGIBLE PRIVATE INSTITUTIONS FOR PATRIOT SCHOLARSHIP PROGRAMS

SECTION 8.22.(a) Section 8.3(c)(4) of S.L. 2021‑180 reads as rewritten:

(4) Eligible postsecondary institution. – A school that is any of the following:

a. A constituent institution of The University of North Carolina.

b. A community college under the jurisdiction of the State Board of Community Colleges.

c. ~~A private educational institution as defined in G.S. 143B‑1224.~~A junior college, senior college, or university that meets all of the following requirements:

1. Is operated and governed by private interests not under the control of the federal government, the State, or any local government.

2. Has a main permanent campus, as defined in G.S. 116‑280(4), located within the State of North Carolina.

3. Does not operate for profit.

4. The curriculum is primarily directed toward the awarding of associate, baccalaureate, or graduate degrees.

5. Meets one of the following requirements:

I. Is a private educational institution, as defined in G.S. 143B‑1224.

II. Is accredited by an accrediting agency that is recognized by the United States Department of Education as a reliable authority concerning the quality of education or training offered by institutions of higher education.

d. A private vocational institution, including Federal Aviation Administration certificated aviation training programs.

SECTION 8.22.(b) Section 8.19(c)(4) of S.L. 2021‑180 reads as rewritten:

(4) Eligible postsecondary institution. – A school that is any of the following:

a. A constituent institution of The University of North Carolina.

b. A community college under the jurisdiction of the State Board of Community Colleges.

c. ~~A private educational institution as defined in G.S. 143B‑1224.~~A junior college, senior college, or university that meets all of the following requirements:

1. Is operated and governed by private interests not under the control of the federal government, the State, or any local government.

2. Has a main permanent campus, as defined in G.S. 116‑280(4), located within the State of North Carolina.

3. Does not operate for profit.

4. The curriculum is primarily directed toward the awarding of associate, baccalaureate, or graduate degrees.

5. Meets one of the following requirements:

I. Is a private educational institution, as defined in G.S. 143B‑1224.

d. A private vocational institution, including Federal Aviation Administration certificated aviation training programs.

SECTION 8.22.(c) This section is effective when this act becomes law and applies to applications for scholarship awards submitted on or after that date.

PART VIII‑A. University/State Education Assistance Authority

WASHINGTON CENTER INTERNSHIP SCHOLARSHIP PROGRAM

SECTION 8A.1.(a) Scholarship Program Established. – Of the funds appropriated in this act for the 2023‑2025 fiscal biennium to the Board of Governors of The University of North Carolina for the Washington Center Internship Scholarship Program, the State Education Assistance Authority (Authority) shall award scholarship grants to students who are residents of North Carolina and are enrolled in their second year or higher in a constituent institution of The University of North Carolina to attend a semester or summer term internship program or a shortened one‑ to four‑week public policy and career readiness seminar program at The Washington Center for Internships and Academic Seminars (Washington Center) located in Washington, D.C. The Authority shall administer the scholarship program pursuant to guidelines and procedures established by the Authority consistent with its practices for administering State‑funded financial aid. The guidelines and procedures shall include an application process and schedule, notification and disbursement procedures, standards for reporting, and standards for return of funds when a student withdraws from the program. A student who meets the eligibility criteria of the Washington Center to attend a semester or summer term internship program or a shortened one‑ to four‑week public policy and career readiness seminar program may apply to the Authority for a grant to cover costs related to the program. The Authority shall award grants to students in its discretion based on student demand. Grants awarded pursuant to the program shall be for the following amounts:

(1) For semester term internships, up to ten thousand dollars ($10,000).

(2) For summer term internships, up to eight thousand dollars ($8,000).

(3) For shortened seminar programs, up to four thousand dollars ($4,000).

SECTION 8A.1.(b) Limitations on Grant Amount. – If a student who is eligible for a grant pursuant to this section also receives a scholarship or other grant covering the cost of attendance for the program, then the amount of the State grant shall be reduced by an appropriate amount determined by the Authority. The Authority shall reduce the amount of the grant so that the sum of all grants and scholarship aid covering the cost of attendance shall not exceed the cost of attendance for the program, including program fees, housing, and incidental costs. The cost of attendance shall be established by the Authority in accordance with information provided to the Authority by the Washington Center.

SECTION 8A.1.(c) Internship Activities. – A student participating in the Washington Center's program shall (i) intern four days a week with a nonprofit corporation, private company, federal agency, or a member of the United States Congress, (ii) take an academic class taught by the Washington Center's faculty, (iii) participate in career readiness training programs, and (iv) be responsible for a final portfolio project outlining work completed during the program. Students from all academic majors can participate and benefit from the program.

SECTION 8A.1.(d) Academic Credit. – No later than December 1, 2023, the Board of Governors of The University of North Carolina shall develop and promulgate guidance to constituent institutions on a process for awarding up to three academic credit hours for participation in an internship in accordance with the scholarship program.

SECTION 8A.1.(e) Funds for the Program. – Any funds that are unencumbered for the program at the end of each fiscal year shall not revert to the General Fund but shall remain available for the purposes of this section. The Authority may use up to one percent (1%) of the funds appropriated each fiscal year for the program for administrative costs.

SECTION 8A.1.(f) Reporting. – By September 1, 2024, and each year thereafter in which grants are received under the program, the Authority, in consultation with the Washington Center, shall report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division on the implementation of the scholarship program, including the number of participating students and the amount of awards for each semester or summer term or shortened seminar program by constituent institution.

SECTION 8A.1.(g) This section applies beginning with the award of scholarship grants in the 2023‑2024 academic year.

STATE EDUCATION ASSISTANCE AUTHORITY DISBURSE STATE'S SCHOLARSHIPS FOR CHILDREN OF WARTIME VETERANS

SECTION 8A.2.(a) G.S. 116‑204 reads as rewritten:

§ 116‑204. Powers of Authority.

The Authority is hereby authorized and empowered:

…

(11a) To be responsible for the disbursement and accounting of funds for the State's Scholarships for Children of Wartime Veterans established by Part 2 of Article 14 of Chapter 143B of the General Statutes.

….

SECTION 8A.2.(b) G.S. 116B‑7 reads as rewritten:

§ 116B‑7. Distribution of fund.

…

(b) An amount specified in the Current Operations Appropriations Act shall be transferred annually from the Escheat Fund to the ~~Department of Military and Veterans Affairs~~ Board of Governors of The University of North Carolina to be allocated to the State Education Assistance Authority to partially fund the program of Scholarships for Children of War Veterans established by Part 2 of Article 14 of Chapter 143B of the General Statutes. Those funds may be used only for residents of this State who (i) are worthy and needy as determined by the Department of Military and Veterans Affairs and (ii) are enrolled in public institutions of higher education of this State.

SECTION 8A.2.(c) G.S. 143B‑1211 reads as rewritten:

§ 143B‑1211. Powers and duties of the Department of Military and Veterans Affairs.

It shall be the duty of the Department of Military and Veterans Affairs to do all of the following:

…

(11) Manage and maintain the State's Scholarships for Children of Wartime Veterans in accordance with Part 2 of Article 14 of Chapter 143B of the General Statutes and in support of the Veterans' Affairs ~~Commission.~~Commission; provided, however, the disbursement of scholarships to the children of wartime veterans shall be performed by the State Education Assistance Authority established pursuant to Article 23 of Chapter 116 of the General Statutes.

….

SECTION 8A.2.(d) G.S. 143B‑1220 reads as rewritten:

§ 143B‑1220. Veterans' Affairs Commission – creation, powers and duties.

There is hereby created the Veterans' Affairs Commission of the Department of Military and Veterans Affairs. The Veterans' Affairs Commission shall have the following functions and duties, as delegated by the Secretary of Military and Veterans Affairs:

…

(3) To promulgate rules and regulations concerning the awarding of scholarships for children of North Carolina veterans as provided by this Article. The Commission shall make rules and regulations consistent with the provisions of this Article. All rules and regulations not inconsistent with the provisions of this Chapter heretofore adopted by the State Board of Veterans' Affairs shall remain in full force and effect unless and until repealed or superseded by action of the Veterans' Affairs Commission. All rules and regulations adopted by the Commission shall be enforced by the Department of Military and Veterans ~~Affairs;~~ Affairs and, in the disbursement of scholarships, the Authority, as directed by the Department on behalf of the Commission; and

….

SECTION 8A.2.(e) G.S. 143B‑1224 reads as rewritten:

§ 143B‑1224. Definitions.

As used in this Part the terms defined in this section shall have the following meaning:

…

(2a) Authority means the State Education Assistance Authority established pursuant to Article 23 of Chapter 116 of the General Statutes.

….

SECTION 8A.2.(f) G.S. 143B‑1225 reads as rewritten:

§ 143B‑1225. Scholarship.

…

(b) The Veterans' Affairs Commission shall select recipients for scholarships and notify the Authority of the recipients for the disbursement of scholarships in accordance with the provisions of G.S. 143B‑1227. When notifying the Authority of the recipients, the Veterans' Affairs Commission shall indicate the recipients that qualify for scholarships funded with monies from the Escheat Fund. If a child is awarded a scholarship under this Part, the Commission shall notify the recipient by May 1st of the year in which the recipient enrolls in college.

SECTION 8A.2.(g) G.S. 143B‑1227 reads as rewritten:

§ 143B‑1227. Administration and funding.

(a) The administration of the scholarship program shall be vested in the Department of Military and Veterans Affairs, and the disbursing and accounting activities required shall be a the responsibility of the ~~Department of Military and Veterans Affairs.~~ Authority. The Veterans' Affairs Commission shall determine the eligibility of applicants, select the scholarship recipients, establish the effective date of scholarships, and may notify the Authority of the need to suspend or revoke scholarships if the Veterans' Affairs Commission finds that the recipient does not comply with the registration requirements of the Selective Service System or does not maintain an adequate academic status, or if the recipient engages in riots, unlawful demonstrations, the seizure of educational buildings, or otherwise engages in disorderly conduct, breaches of the peace or unlawful assemblies. The Department of Military and Veterans Affairs shall maintain the primary and necessary records, and the Veterans' Affairs Commission shall promulgate such rules and regulations not inconsistent with the other provisions of this Part as it deems necessary for the orderly administration of the program. It may require of State or private educational institutions, as defined in this Part, such reports and other information as it may need to carry out the provisions of this Part. The ~~Department of Military and Veterans Affairs~~ Authority shall disburse scholarship payments for recipients certified eligible by the Department of Military and Veterans Affairs upon certification of enrollment by the enrolling institution.

(b) Funds for the support of this program shall be appropriated to the ~~Department of Military and Veterans Affairs~~ Board of Governors of The University of North Carolina to be allocated to the Authority as a reserve for payment of the allocable costs for room, board, tuition, and other charges, and shall be placed in a separate budget code from which disbursements shall be made. Funds to support the program shall be supported by receipts from the Escheat Fund, as provided by G.S. 116B‑7, but those funds may be used only for worthy and needy residents of this State who are enrolled in public institutions of higher education of this State. In the event the said appropriation for any year is insufficient to pay the full amounts allocable under the provisions of this Part, such supplemental sums as may be necessary shall be allocated from the Contingency and Emergency Fund. The method of disbursing and accounting for funds allocated for payments under the provisions of this section shall be in accordance with those standards and procedures prescribed by the Director of the Budget, pursuant to the State Budget Act.

(c) Allowances for room and board in State educational institutions shall be at such rate as established by the Secretary of the Department of Military and Veterans Affairs.

(d) Scholarship recipients electing to attend a private educational institution shall be granted a monetary allowance for each term or other academic period attended under their respective scholarship awards. All recipients under Class I‑B scholarship shall receive an allowance at one rate, irrespective of course or institution; all recipients under Classes I‑A, II, III and IV shall receive a uniform allowance at a rate higher than for Class I‑B, irrespective of course or institution. The amount of ~~said~~ the allowances shall be determined by the Director of the Budget and made known prior to the beginning of each fall quarter or semester; provided that the Director of the Budget may change the allowances at intermediate periods when in his or her judgment such changes are necessary. Disbursements by the State shall be to the private institution concerned, for credit to the account of each recipient attending ~~said~~ the institution. The manner of payment to any private institution shall be as prescribed by the ~~Department of Military and Veterans Affairs.~~ Authority. The participation by any private institution in the program shall be subject to the applicable provisions of this Part and to examination by State auditors of the accounts of scholarship recipients attending or having attended private institutions. The ~~Veterans' Affairs Commission~~ Authority may defer making an award or may suspend an award in any private institution which does not comply with the provisions of this Part relating to ~~said~~ the institutions.

(e) Irrespective of other provisions of this Part, the ~~Veterans' Affairs Commission~~ Authority may prescribe special procedures for adjusting the accounts of scholarship recipients who for reasons of illness, physical inability to attend class or for other valid reason satisfactory to the ~~Veterans' Affairs Commission~~ Authority may withdraw from State or private educational institutions prior to the completion of the term, semester, quarter or other academic period being attended at the time of withdrawal. Such procedures may include, but shall not be limited to, paying the recipient the dollar value of his or her unused ~~entitlements~~ scholarship for the academic period being attended, with a corresponding deduction of this period from his or her remaining scholarship eligibility time.

(f) From the funds appropriated from the General Fund each fiscal year to support the program, the Authority may use up to one hundred fifty thousand dollars ($150,000) each fiscal year for administrative costs for the disbursement and accounting activities for the program.

SECTION 8A.2.(h) This section applies beginning with scholarships awarded for the 2024‑2025 academic year.

PERMIT NCSSM AND UNCSA TUITION SCHOLARSHIPS TO BE USED FOR SUMMER TUITION AND ESTABLISH INSTITUTIONAL TRUST FUND

SECTION 8A.3.(a) Part 6 of Article 23 of Chapter 116 of the General Statutes reads as rewritten:

Part 6. Tuition Grant for High School Graduates of the North Carolina School of Science and Mathematics and the University of North Carolina School of the Arts.

§ 116‑209.89. Definitions.

The following definitions apply in this Part:

(1) Academic term. – Any of the following:

a. One fall semester.

b. One spring semester.

c. One summer term.

(2) Summer term. – All instruction received in one summer between academic years.

§ 116‑209.90. Tuition grants for graduates to attend a constituent institution.

(a) Within the funds available, a high school graduate from the North Carolina School of Science and Mathematics (NCSSM) or the University of North Carolina School of the Arts (UNCSA) in each school year who meets the following conditions shall be eligible for a tuition grant awarded under this Part:

(1) Is a resident for tuition purposes under the criteria set forth in G.S. 116‑143.1 and in accordance with the coordinated and centralized residency determination process administered by the Authority.

(2) Enrolls as a full‑time student in a constituent institution of The University of North Carolina in the next academic year after graduation.

(b) Students who receive initial tuition grants as a cohort of a high school graduating class of NCSSM or UNCSA shall also be eligible to apply for tuition grants for subsequent academic ~~years~~ terms for up to a total of ~~four~~ eight academic ~~years,~~ terms, provided that tuition grants are only used for undergraduate tuition.

(b1) A student must be continuously enrolled in an undergraduate program at a constituent institution of The University of North Carolina after the award of the initial tuition grant to be eligible for tuition grants in subsequent academic ~~years.~~ terms. The Authority shall have the discretion to waive this requirement if the student is able to demonstrate that any of the following have substantially disrupted or interrupted the student's pursuit of a degree: (i) a military service obligation, (ii) serious medical debilitation, (iii) a short‑term or long‑term disability, or (iv) other extraordinary hardship.

§ 116‑209.91. Administration of tuition grants.

(a) The Authority shall administer the tuition grants provided for in this Part pursuant to guidelines and procedures established by the Authority consistent with its practices for administering State‑funded financial aid. The guidelines and procedures shall include an application process and schedule, notification and disbursement procedures, standards for reporting, and standards for return of tuition grants when a student withdraws. The 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 Authority shall remit, at the times it prescribes, the tuition grant to the constituent institution on behalf, and to the credit, of the student. In the event a student on whose behalf a tuition grant has been paid is not enrolled in an undergraduate program and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the tuition grant was paid, the constituent institution shall refund the full amount of the tuition grant to the Authority.

(b) Except as otherwise provided in this section, the amount of the grant awarded to a student shall cover the tuition cost at the constituent institution in which the student is enrolled. No tuition grant awarded to a student under this section shall exceed the cost of attendance at a constituent institution for which the student is enrolled.

(c) If a student, who is eligible for a tuition grant under this section, 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 Authority so that the total amount of scholarships and grants received by the student does not exceed the cost of attendance for the institution. The cost of attendance shall be determined by the Authority for each constituent institution.

(c1) The Authority shall place all funds appropriated to, or otherwise received by, the Authority for the award of tuition grants under this Part into an institutional trust fund established in accordance with the provisions of G.S. 116‑36.1. All interest earned on these funds shall also be placed in the institutional trust fund established pursuant to this subsection. The monies in the institutional trust fund may be used only for the purposes set forth in this Part.

(d) In the event there are not sufficient funds to provide each eligible student who has applied in accordance with the application process and the schedule established by the Authority with a full tuition grant as provided by this Part, each eligible student shall receive a pro rata share of funds available for the academic ~~year~~ term covered by the appropriation in the preceding fiscal year.

(e) The Authority may use up to five percent (5%) of the funds appropriated each year for tuition grants under this Part for administrative costs.

SECTION 8A.3.(b) G.S. 116‑209.90(a), as amended by subsection (a) of this section, reads as rewritten:

(a) Within the funds available, an eligible graduate in each school year who meets the following conditions shall qualify for a tuition grant awarded under this Part:

(2) Enrolls as a full‑time student in an eligible institution of higher education in the next academic year after graduation.

(3) Submits a completed Free Application for Federal Student Aid (FAFSA) form.

SECTION 8A.3.(c) G.S. 116‑209.91(c1), as enacted by subsection (a) of this section, becomes effective June 30, 2023. Subsection (b) of this section applies beginning with graduates from the 2023‑2024 school year. Except as otherwise provided, this section is effective when it becomes law and applies beginning with graduates of the North Carolina School of Science and Mathematics and the University of North Carolina School of the Arts from the 2022‑2023 school year.

REVISE TEACHING FELLOWS PROGRAM

SECTION 8A.4.(a) Part 3 of Article 23 of Chapter 116 of the General Statutes reads as rewritten:

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.

(5a) Qualifying licensure area. – A teacher licensure area in one of the following subjects:

a. Either of the following, as identified pursuant to G.S. 116‑209.62(h):

1. Special education.

2. STEM.

b. Elementary education (K‑6).

(5b) Qualifying teacher. – A teacher in a North Carolina public school who meets the following criteria:

a. Received a forgivable loan under the Program.

b. Graduated within 10 years from an educator preparation program leading to teacher licensure, excluding any authorized deferment for extenuating circumstances.

(6) STEM. – Science, technology, engineering, and mathematics.

(7) Trust Fund. – The North Carolina Teaching Fellows Program Trust Fund.

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