GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	2 

SENATE BILL 3
Education Committee Substitute Adopted 5/29/91

Short Title:  School Improvement Act.	(Public)
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Sponsors:
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Referred to:  
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January 30, 1991

A BILL TO BE ENTITLED
AN ACT TO ENACT THE SCHOOL IMPROVEMENT AND ACCOUNTABILITY ACT OF 1991.
The General Assembly of North Carolina enacts:
Section 1.  This act may be cited as the School Improvement and Accountability Act of 1991.
Sec. 2.  G.S. 115C-12(9) reads as rewritten:
"(9)	Miscellaneous Powers and Duties. – All the powers and duties exercised by the State Board of Education shall be in conformity with the Constitution and subject to such laws as may be enacted from time to time by the General Assembly. Among such duties are:
a.	To certify and regulate the grade and salary of teachers and other school employees.
b.	To adopt and supply textbooks.
c.	To adopt rules requiring all local boards of education to implement the Basic Education Program on an incremental basis within funds appropriated for that purpose by the General Assembly and by units of local government.
		The Board shall develop a State accreditation program that meets or exceeds the standards and requirements of the Basic Education Program. The Board shall require each local school administrative unit to comply with the State accreditation program to the extent that funds have been made available to the local school administrative unit for implementation of the Basic Education Program.
		The Board shall use the State accreditation program to monitor the implementation of the Basic Education Program.
c1.	To issue an annual ‘report card' for the State and for each local school administrative unit, assessing each unit's efforts to improve student performance and taking into account progress over the previous years' level of performance and the State's performance in comparison with other states.  This assessment shall take into account demographic, economic, and other factors that have been shown to affect student performance.
c2.	To develop management accountability indicators to measure the efficiency and appropriate use of staff in each school and at the administrative office.  Staff development for school administrators shall be a high priority of the Department of Public Instruction.
c3.	To develop an outcome-based education program that may be implemented as part of a local school improvement plan developed pursuant to G.S. 115C-238.3.  An outcome-based education program is a program in which expectations for student achievement are clearly stated in terms of knowledge, skills and attitudes.  Students develop skills and attitudes to maximize the acquisition of knowledge. The program recognizes that achievement occurs as a result of individual and developmental progress towards goals, and reflects that students learn at different rates using varying learning styles.  Outcome-based education measures achievement periodically throughout the learning process and is the criteria for high school graduation. Measurement of student achievement is implemented by teachers to complement varied learning growth and styles.  The results of those measurements are used to determine when a student understands and has mastered the material and is ready to move forward in the learning process.
		As part of the outcome-based education program, the State Board of Education shall adopt expectations for student achievement necessary for students to function successfully in the next century. These expectations shall be consistent with national education goals recommended by the National Governors' Association in 1990.
		The State Board of Education, in consultation with the Board of Governors of The University of North Carolina, and the State Board of Community Colleges shall develop a mechanism by which the institutions of higher education accept certification of proficiencies on high school transcripts in lieu of Carnegie units.
		The State Board of Education may establish rules, policies and procedures as it deems necessary to develop an outcome-based education program.
d.	To formulate rules and regulations for the enforcement of the compulsory attendance law.
e.	To manage and operate a system of insurance for public school property, as provided in Article 38 of this Chapter.
		In making substantial policy changes in administration, curriculum, or programs the Board should conduct hearings throughout the regions of the State, whenever feasible, in order that the public may be heard regarding these matters."
Sec. 3. Chapter 116 of the General Statutes is amended by adding the following new section to read:
"§ 116-11.2. Duties regarding programs in education administration.
The Board of Governors shall direct the constituent institutions with programs in education administration to evaluate these programs and to take the necessary steps to ensure adequate management training for public school principals and administrators."
Sec. 4.  The General Assembly urges private colleges and universities with programs in education administration to evaluate these programs and to take the necessary steps to ensure adequate management training for public school principals and administrators.
Sec. 5.  Part 4 of Article 16 of Chapter 115C of the General Statutes reads as rewritten:
"Part 4.  Performance-based Accountability Program.
"§ 115C-238.1.  Performance-based Accountability Program; development and implementation by State Board.
The State Board of Education shall develop and implement a Performance-based Accountability Program. The primary goal of the Program shall be to improve student performance.  The State Board of Education shall adopt:
(1)	Procedures and guidelines through which, beginning with the 1990-91 fiscal year, local school administrative units may participate in the Program;
(2)	Guidelines for developing local school improvement plans with three-to-five year student performance goals and annual milestones to measure progress in meeting those goals; and
(3)	A set of student performance indicators for measuring and assessing student performance in the participating local school administrative units.  These indicators may include attendance rates, dropout rates, test scores, parent involvement, and post-secondary outcomes.
"§ 115C-238.2.  Local participation in the Program voluntary; the benefits of local participation.
(a)	Local school administrative units may, but are not required to, participate in the Performance-based Accountability Program.
(b)	Local school administrative units that participate in the Performance-based Accountability Program:
(1)	Are exempt from State requirements to submit reports and plans, other than local school improvement plans, to the Department of Public Education; they are not exempt from federal requirements to submit reports and plans to the Department.
(2)	Are subject to the performance standards but not the opportunity standards or the staffing ratios of the State Accreditation Program. The performance standards in the State Accreditation Program, modified to reflect the results of end-of-course and end-of-grade tests, may serve as the basis for developing the student performance indicators adopted by the State Board of Education pursuant to G.S. 115C-238.1.
(3)	May receive funds for differentiated pay for teachers and administrators, in accordance with G.S. 115C-238.4, if they elect to participate in a differentiated pay plan.
(4)	May be allowed increased flexibility in the expenditure of State funds, in accordance with G.S. 115C-238.5.
(4a)	Shall receive flexibility with regard to certain State laws, regulations, and policies, in accordance with G.S. 115C-238.6(a1), and may exercise such flexibility if, in their estimation, the flexibility will enable them to (i) deliver education in a more effective manner or (ii) organize their schools in a more efficient or economical fashion.
(5)	May be granted waivers of certain State laws, regulations, and policies that inhibit their ability to reach local accountability goals, in accordance with G.S. 115C-238.6(a2).
	"§ 115C-238.3.  Elements of local plans.
(a)	The board of education of a local school administrative unit that elects to participate in the Program shall submit a local school improvement plan to the State Superintendent of Public Instruction before April 15 of the fiscal year preceding the fiscal year in which participation is sought.  The local board of education shall actively involve a substantial number of teachers, school administrators, and other school staff in developing the local school improvement plan.  It is the intent of the General Assembly that teachers have a major role in developing the local school improvement plan; therefore, at least half of the staff members involved in developing the local plan shall be teachers.  The teachers at each school shall select the teachers from that school who are involved in developing the local plan.
(b)	If the local school administrative unit is not currently meeting the highest level for accreditation for ninety-five percent (95%) or more of the student performance indicators adopted by the State Board of Education, the local school improvement plan shall set forth (i) the student performance goals established by the local board of education for the local school administrative unit and (ii) the unit's strategies and plans for attaining them.
The performance goals for the local school administrative unit shall address specific, measurable goals for all student performance indicators adopted by the State Board.  Factors that determine gains in achievement vary from school to school; therefore, socioeconomic factors and previous student performance indicators shall be used as the basis of the local school improvement plan.
The strategies for attaining the local student performance goals shall be based on plans for each individual school in the local school administrative unit.  The principal of each school and his staff shall develop a plan to address student performance goals appropriate to the school from those established by the local board of education.
(b1)	If the local school administrative unit is currently meeting the highest level of accreditation for ninety-five percent (95%) or more of the student performance indicators adopted by the State Board of Education, the local school improvement plan may continue to set forth (i) the student performance goals established by the local board of education for the local school administrative unit and (ii) the unit's strategies and plans for attaining them, in accordance with subsection (b) of this section.  If the unit chooses to concentrate on locally designed accountability goals focused on such things as thinking and reasoning skills, improving the school climate, and improving parental or student satisfaction levels, the local school improvement plan may set forth (i) the locally designed accountability goals and (ii) the unit's strategies and plans for attaining them.
The strategies for attaining the local student performance goals or the locally designed accountability goals shall be based on plans for each individual school in the local school administrative unit.  The principal of each school and his staff shall develop a plan to address student performance goals or the locally designed accountability goals appropriate to the school from those established by the local board of education.
If at the end of any school year, the unit failed to meet the highest level for accreditation for ninety-five percent (95%) or more of the student performance indicators adopted by the State Board of Education, the local unit shall develop a new plan in accordance with subsection (b) of this section.
(c)	The local school administrative unit shall consider a plan for differentiated pay.  The local plan shall include a plan for differentiated pay, in accordance with G.S. 115C-238.4, unless the local school administrative unit elects not to participate in any differentiated pay plan.
(d)	The local plan may include a request for a waiver of State laws, regulations, or policies.  The request for a waiver shall identify the State laws, regulations, or policies that inhibit the local unit's ability to reach its local accountability goals and shall explain how a waiver of those laws, regulations, or policies will permit the local unit to reach its local goals.
	(e)  Support among affected staff members is essential to successful implementation of a local school improvement plan; therefore, a local board of education that decides to participate in the Program shall present a proposed local school improvement plan, including waiver requests, to its teachers and administrators for their review.  Any modifications to an existing plan, including waiver requests, shall also be presented by the local board to its teachers and administrators for their review.
(f)	At the end of the first year of implementation of a local school improvement plan or in December 1991, whichever is later, and every three years after the end of the first year of implementation, the teachers in the local school administrative unit shall be surveyed regarding their attitudes about the plan and educational reform in the local school administrative unit.  The survey instrument shall be developed by the State Board of Education, after consultation with the Joint Legislative Education Oversight Committee.  The State Board of Education shall report the results of the surveys to the Joint Legislative Education Oversight Committee and to the Joint Legislative Commission on Governmental Operations.
This subsection shall be implemented within funds available to the State Board of Education for aid to local school administrative units.
"§ 115C-238.4.  Differentiated pay.
(a)	Local school administrative units may include, but are not required to include, a differentiated pay plan for certified instructional staff, certified instructional support staff, and certified administrative staff as a part of their local school improvement plans.  Units electing to include differentiated pay plans in their school improvement plans shall base their differentiated pay plans on:
(1)	The Career Development Pilot Program, G.S. 115C-363 et seq.;
(2)	The Lead Teacher Pilot Program, G.S. 115C-363.28 et seq.;
(3)	A locally designed school-based performance program, subject to limitations and guidelines adopted by the State Board of Education;
(4)	A differentiated pay plan that the State Board of Education finds has been successfully implemented in another state; 
(5)	A locally designed plan including any combination or modification of the foregoing plans; or
(6)	A unique plan designed by their administrators and teachers.
(a1)	A differentiated pay plan may authorize the use of up to one-third of all State differentiated pay funds for staff development and planning activities and for paying substitute teachers as is necessary to provide time for staff development and planning activities.  A differentiated pay plan may also authorize extending the use of differentiated pay funds to include noncertified employees in the plan.
(b)	Support among affected staff members is essential to successful implementation of a differentiated pay plan; therefore, a local board of education that decides that a differentiated pay plan should be included in its local school improvement plan shall present a proposed differentiated pay plan to affected staff members for their review and vote.  The vote shall be by secret ballot.  The local board of education shall include the proposed differentiated pay plan in its local school improvement plan only if the proposed plan has the approval of a majority of the affected paid certificated instructional and instructional support staff and a majority of the affected certificated administrators.
Every three years after a differentiated pay plan receives such approval, the local board of education shall present a proposed plan to continue, discontinue, or modify that differentiated pay plan to affected staff members for their review and vote.  The vote shall be by secret ballot.  The local board of education shall include the proposed plan in its local school improvement plan only if the proposed plan has the approval of a majority of the affected paid certificated instructional and instructional support staff and a majority of the affected certificated administrators.
(c)	Local school administrative units electing to participate in a differentiated pay plan shall receive State funds according to the terms of the plan but not to exceed:
(1)	1990-91: two percent (2%) of teacher and administrator salaries, and the employer's contributions for social security and retirement;
(2)	1991-92: three percent (3%) of teacher and administrator salaries, and the employer's contributions for social security and retirement;
(3)	1992-93: four percent (4%) of teacher and administrator salaries, and the employer's contributions for social security and retirement;
(4)	1993-94: five and one-half percent (5 1/2%) of teacher and administrator salaries, and the employer's contributions for social security and retirement; and
(5)	1994-95 and thereafter: seven percent (7%) of teacher and administrator salaries, and the employer's contributions for social security and retirement.
Any differentiated pay plan developed in accordance with this section shall be implemented within State and local funds available for differentiated pay.
(d)	Attainment of the equivalent of Career Status I shall be rewarded through a new salary schedule that provides a salary differential when a certified educator successfully completes his probationary period.
(e)	Any additional compensation received by an employee as a result of the unit's participation in the Program shall be paid as a bonus or supplement to the employee's regular salary.  If an employee in a participating unit does not receive additional compensation, such failure to receive additional compensation shall not be construed as a demotion, as that term is used in G.S. 115C-325.
Payments of bonuses or supplements shall be made no more frequently than once every calendar quarter: Provided, however, prior to the 1994-95 school year, payments in the career development pilot units may be made on a monthly basis.
(f)	If a local school administrative unit bases its differentiated pay plan on a locally designed school-based performance program, pursuant to subdivision (a)(3) of this section, the plan shall provide that following the attainment of the local school goals, the local board of education shall make a determination of which certified staff members contributed to the attainment of those goals.  Differentiated pay bonuses shall then be distributed to those designated employees.  The local board of education shall make the determination upon recommendation of (i) the superintendent and (ii) any other person or committee designated in the local differentiated pay plan.  The other person or committee designated in the local differentiated pay plan may be the principal, a school-based committee, or any other person or local committee.
"§ 115C-238.5.  Flexible funding.
For fiscal years beginning with the 1991-92 fiscal year, the State Board of Education, only upon the recommendation of the State Superintendent, shall increase flexibility in the use of State funds for schools by:
(1)	Combining into a single funding category the existing categories for instructional materials, supplies and equipment, textbooks, testing support, and drivers education except for funds for classroom teachers of drivers education;
(2)	Except as provided by subdivision (1) of this section, combining allotment categories for State aid to public schools into (i) principals and assistant principals, (ii) instructional personnel, (iii) instructional support personnel, (iv) instructional support items, (v) general administration, (vi) auxiliary services, and (vii) transportation categories: Provided, however, all personnel paid with State funds shall be paid on a State-adopted salary schedule;
(3)	Continuing non-State aid in a separate allotment for categorical programs and consolidating the administration of these programs to the extent permitted by federal laws and regulations;
(4)	Authorizing local school administrative units to transfer positions and funds from one combined category to another: Provided, however, no more than five percent (5%) of the total positions or funds initially allotted to the category shall be transferred without the prior permission of the State Board of Education; and
(5)	Authorizing local school administrative units to transfer positions and funds from the general administration category to other combined allotment categories: Provided, however, units shall not transfer positions or funds from other categories to general administration.
For the 1991-93 fiscal biennium, local school administrative units and local boards of education are required to report the use of funds to the State of North Carolina using the 1990-91 fiscal year's reporting systems.  The uniform procedures established by G.S. 115C-426 and G.S. 115C-12(18)	for the 1990-91 fiscal year shall be continued.
Only local school administrative units electing to participate in the Performance-based Accountability Program shall be eligible to receive this flexible funding.
Local boards of education shall provide maximum flexibility in the use of funds to individual schools to enable them to accomplish their individual schools' goals.
"§ 115C-238.6.  Approval of local school administrative unit plans by the State Superintendent; conditions for continued participation.
(a)	Prior to June 30 each year, the State Superintendent shall review local school improvement plans submitted by the local school administrative units in accordance with policies and performance indicators adopted by the State Board of Education.  If the State Superintendent approves the plan for a local school administrative unit, that unit shall participate in the Program for the next fiscal year.
(a1)	If the State Superintendent approves the plan for a local school administrative unit, that unit shall receive flexibility with regard to State laws, regulations, and policies pertaining to:
(1)	Assignment, allocation, reduction, and use of positions for teacher assistants;
(2)	Class size: Provided, however, local school administrative units shall report on class size as required by the State Board;
(3)	Employee certification, so as to permit the use of noncertified personnel for teaching and administrative roles if their academic and professional backgrounds demonstrate potential: Provided, however, that the Department of Public Instruction shall assess the relevant work experience of any such noncertified employee and shall place any such noncertified employee on the teacher salary schedule:  Provided, further, that units exercising flexibility in this area shall perform annual evaluations certifying that students are being well served, as evidenced by student achievement;
(4)	Evaluation of career status teachers and administrators, so as to allow the development of an alternative procedure to be used in lieu of the Teacher Performance Appraisal Instrument: Provided, however, any such alternative procedure shall not be referred to as the Teacher Performance Appraisal Instrument or TPAI;
(5)	The scheduling of the instructional school day, as defined by the State Board of Education, and the school year as long as (i) changes are made through the normal process of calendar development and (ii) students receive more than 990 hours of annual contact time per academic year, which is the equivalent of more that 180 school days;
(6)	The provision of driver education services so as to limit access to students who (i) are meeting reasonable local attendance standards, (ii) are making progress toward high school graduation, and (iii) have not dropped out of school;
(7)	The use of staff development funds;
(8)	Traditional class units and the scheduling of end-of-course and end-of-grade testing so as to (i) enable students who can demonstrate mastery of a course to move into more demanding course work at a faster pace, (ii) enable slower students more than a traditional one-year course to master the course content required, (iii) aid the transition to year-round schooling, and (iv) aid in the implementation of an outcome-based education program as defined by the rules, policies, and procedures established pursuant to G.S. 115C-12(9)(c3);
(9)	The obligation of offering summer school by authorizing the substitution of after-school or Saturday remedial or tutorial programs for at-risk students: Provided, however, students who fail to meet promotion standards for grades three, six, and eight shall be eligible for summer school;
(10)	The use of State-provided buses for field trips or for transporting parents and under-school-aged children if the transportation will enhance a local school administrative unit's educational program: Provided, however, that any additional insurance and operating costs for the buses shall be paid with non-State funds;
(11)	The placement of additional students in individual classes of academically gifted programs if the programs for State-identified gifted children are not over-enrolled;
(12)	The system of calculating graduation requirements so as to enable schools (i) to implement an outcome-based accountability program as defined by the rules, policies, and procedures established pursuant to G.S. 115C-12(9)(c3), or, (ii) to count advanced course work toward graduation regardless of the grade level at which the courses were taken, or whether the courses were taken through a cooperative program with a community college or a four-year college: Provided, however, this subdivision is not intended to reduce the requirement that all high school students shall take three units of mathematics during the high school years.
The local school administrative unit may exercise such flexibility if, in the estimation of the local board of education, the flexibility will enable it to (i) deliver education in a more effective manner or (ii) organize its schools in a more efficient or economical fashion.
(a2)	If a local plan contains a request for a waiver of State laws, regulations, or policies, in accordance with G.S. 115C-238.3(d), the State Superintendent shall determine whether and to what extent the identified laws, regulations, or policies should be waived.  The State Superintendent shall present that plan and his determination to the State Board of Education.  If the State Board of Education deems it necessary to do so to enable a local unit to reach its local accountability goals, the State Board, only upon the recommendation of the State Superintendent, may grant waivers of:
(1)	State laws pertaining to teacher certification, the use of State-adopted textbooks, and the purposes for which State funds for the public schools may be used, and
(2)	All State regulations and policies, except those pertaining to State salary schedules and employee benefits for school employees, the instructional program that must be offered under the Basic Education Program, the system of employment for public school teachers and administrators set out in G.S. 115C-325, health and safety codes, compulsory school attendance, and the Uniform Education Reporting System.
The State Board shall either grant or deny each waiver within 90 days after it is requested.  The State Board shall provide a written explanation of why a waiver is denied.
If twenty-five percent (25%) of the local school administrative units in the State request a waiver of the same policy or regulation, the State Board shall assess whether the policy or regulation should be modified or deleted.
(b)	Local school administrative units shall continue to participate in the Program and receive funds for differentiated pay, if their local plans call for differentiated pay, so long as (i) they demonstrate satisfactory progress toward student performance goals set out in their local school improvement plans; or (ii) once their local goals are met, they continue to achieve their local goals and they otherwise demonstrate satisfactory performance, as determined by the State Superintendent in accordance with guidelines set by the State Board of Education.
If the local school administrative units do not achieve their goals after two years, the Department of Public Instruction shall provide them with technical assistance to help them meet their goals.  If after one additional year they do not achieve their goals, the State Board of Education shall decide what steps shall be taken to improve the education of students in the unit."
Sec. 6.  G.S. 115C-264 reads as rewritten:
"§ 115C-264.  Operation.
In the operation of their public school food programs, the public schools shall participate in the National School Lunch Program established by the federal government. The program shall be under the jurisdiction of the Division of School Food Services of the Department of Public Instruction and in accordance with federal guidelines as established by the Child Nutrition Division of the United States Department of Agriculture.
Each school may, with the approval of the local board of education, sell soft drinks to students so long as soft drinks are not sold (i)	during the lunch period, (ii) at elementary schools, or (iii) contrary to the requirements of the National School Lunch Program.
All school food services shall be operated on a nonprofit basis, and any earnings therefrom over and above the cost of operation as defined herein shall be used to reduce the cost of food, to serve better food, or to provide free or reduced-price lunches to indigent children and for no other purpose. The term ‘cost of operation' shall be defined as actual cost incurred in the purchase and preparation of food, the salaries of all personnel directly engaged in providing food services, and the cost of nonfood supplies as outlined under standards adopted by the State Board of Education. ‘Personnel' shall be defined as food service supervisors or directors, bookkeepers directly engaged in food service record keeping and those persons directly involved in preparing and serving food: Provided, that food service personnel shall be paid from the funds of food services only for services rendered in behalf of lunchroom services. Any cost incurred in the provisions and maintenance of school food services over and beyond the cost of operation shall be included in the budget request filed annually by local boards of education with boards of county commissioners. It shall not be mandatory that the provisions of G.S. 115C-522(a)	and 143-129 be complied with in the purchase of supplies and food for such school food services."
Sec. 7. Subchapter II of Chapter 115C of the General Statutes is amended by adding a new Article to read:
“ARTICLE 6A.
"State Assistance and Intervention in Low-Performing School Units.
"§ 115C-64.1.  Classification of low-performing school units; notification of the public, parents, and employees.
(a)	Effective July 1, 1992, any local school administrative unit that does not meet the minimum requirements for State accreditation, ranks below average in student achievement on the statewide school system Report Card, and, does not show improvement in student achievement at a rate that is at or above the statewide average shall be classified as a low-performing school unit.
(b)	The public shall be notified immediately by the local school board of the classification through the same process as for notification of meetings of the local board of education; parents of students attending schools in the local school administrative unit shall be notified in writing of the areas in which the unit fell substantially below measures reported (i) for other units in the State, (ii) and also for other units in the State with similar demographic characteristics.
(c)	Any school employee who has career status under G.S. 115C-325 shall be notified that the employee shall be reclassified as a first-year probationary employee if at the time of the unit's classification or during the 12-month period following the classification the employee is evaluated as needing improvement, and the unit continues to be classified as a low-performing school unit.
"§ 115C-64.2.  Efforts to meet minimum State accreditation requirements.
(a)	The Department of Public Instruction shall contact each low-performing school unit, notify it of the services available through the Department to assist the unit, and provide the unit with such assistance. Department services shall include assistance in developing a plan for improvement, monitoring the unit's progress, tutoring and counseling unit personnel in strategies to reach the unit's goals, and providing additional funds to the unit to attain accreditation status and to improve student achievement.
(b)	Each school administrative unit classified as a low-performing school unit shall develop a plan to attain accreditation status and to improve student achievement.  The unit shall submit the plan to the State Board of Education within three months of its classification as a low-performing school unit.
"§ 115C-64.3.  Review of plans by the State Board; appointment of management team.
(a)	If, within one year of being classified as a low-performing school unit, the unit does not meet the minimum requirements for State accreditation, continues to rank below average in student achievement on the statewide school system Report Card, and student achievement continues to fail to improve at a rate which is at or above the statewide average, (i) the unit shall lose all State funds for differentiated pay, (ii) all school employees who have career status under G.S. 115C-325 and who were evaluated as needing improvement at the time of the unit's classification or during the 12-month period following the classification of the unit shall be reclassified as first-year probationary employees, (iii) the local superintendent shall be placed on probation, and (iv) a three-member management team shall be appointed by the State Superintendent, subject to confirmation by the State Board, to oversee the unit.
If an employee is reclassified as a first-year probationary employee pursuant to this subsection, and subsequently the employee's evaluation improves to satisfactory or the school unit is no longer classified as a low-performing unit, the employee shall be reclassified as a career status employee.
(b)	The three-member management team shall act under the direction of the State Board of Education and shall be paid with State funds for aid to local school administrative units by the State Board of Education.  The management team shall modify and implement the unit's improvement plan as necessary to assist the unit in attaining accreditation and improving student achievement.
The State Board may assign any of the powers and duties of the local superintendent, the local finance officer, or the local board of education to the three-member management team as it deems necessary and appropriate to assist the unit in attaining accreditation requirements and to improve student achievement in the unit.  The management team shall perform all of such powers and duties.
(c)	Any funds that become unavailable to the unit as a consequence of sanctions set out in this Article shall be placed in a reserve under the control of the State Board.  The General Assembly shall also consider appropriating additional resources to the reserve for the purpose of improving the school unit.  The funds in the reserve may be expended, in the discretion of the State Board, for the purpose of improving the school unit.
(d)	If, within two years of being classified as a low-performing school unit, the unit does not meet the minimum requirements for State accreditation, continues to rank below average in student achievement on the statewide school system Report Card, and student achievement continues to fail to improve at a rate which is at or above the statewide average, the State Board may remove the local superintendent and the local finance officer with whom the local board of education entered into a contract after July 1, 1991. Neither party to any such contract shall be entitled to damages.
The State Board may also remove associate superintendents, assistant superintendents, and principals. Any administrator removed from office shall be ineligible for appointment to another position in the unit for a period of four years after removal.  The three-member management team shall appoint individuals to fill these positions.
(e)	After a management team has been appointed, the General Assembly shall consider, at its next session, the future governance of the identified school administrative unit.
(f)	The three-member management team shall have three years from the time of its appointment to cause the low-performing school unit to reach minimum State accreditation standards.  If minimum standards are not reached within three years, the management team shall be dissolved and funds allocated for the management team shall be allocated to the local board for its use in procuring outside assistance.
"§ 115C-64.4.  Adoption of rules.
Prior to December 1, 1991, the State Board of Education shall adopt rules, policies, and procedures that it deems necessary to implement this Article."
Sec. 8.  G.S. 120-30.9G reads as rewritten:
"§ 120-30.9G.  School Administrative Units; State Board of Education; Local Boards of Education Attorney.
(a)	The State Board of Education shall submit to the Attorney General of the United States within 30 days any rules, policies, procedures or actions taken pursuant to G.S. 115C-64.2(b) which could result in the appointment of a three-member management team to perform any of the powers and duties of a local board of education where that school administrative unit is covered by the Voting Rights Act of 1965.
(b)	The attorney for any local board of education where that school administrative unit is covered by the Voting Rights Act of 1965 shall submit to the Attorney General of the United States within 30 days of ratification any local acts of the General Assembly, or actions of the local boards of education which constitutes a ‘change affecting voting' under Section 5 of the Voting Rights Act of 1965 in that school administrative unit.  If the change affecting voting is a merger of two or more school administrative units, the change shall be submitted jointly by the attorneys of the school administrative units involved, or by one of them by agreement of the attorneys involved."
Sec. 9.  G.S. 115C-12 is amended by adding a new subdivision to read:
"(20)	Duty to report appointment of three-member management team. – Pursuant to G.S. 120-30.9G the State Board of Education shall submit to the Attorney General of the United States within 30 days any rules, policies, procedures or actions taken pursuant to G.S. 115C-64.2(b) which could result in the appointment of a three-member management team to perform any of the powers and duties of a local board of education where that school administrative unit is covered by the Voting Rights Act of 1965."
Sec. 10.  Upon ratification of this act, the State Board of Education shall submit, to the Attorney General of the United States for preclearance under the Voting Rights Act of 1965, Article 6A of Chapter 115C, as it is created by this act.
Sec. 11.  G.S. 115C-451 reads as rewritten:
"§ 115C-451.  Reports to State Board of Education; failure to comply with School Budget Act.
(a)	The State Board of Education shall have authority to require local school administrative units to make such reports as it may deem advisable with respect to the financial operation of the public schools.
(b)	The State Board of Education shall be responsible for assuring that local boards of education comply with State laws and regulations regarding the budgeting, management, and expenditure of funds.  When a local board of education willfully or negligently fails or refuses to comply with these laws and regulations, the State Board of Education shall issue a warning to the local board of education and direct it to take remedial action.
(c)	If the local board of education, after warning, persists in willfully or negligently failing or refusing to comply with these laws and regulations, the State Board of Education shall by resolution assume control of the financial affairs of the local board of education and shall appoint an administrator to exercise the powers assumed.  The adoption of a resolution shall have the effect of divesting the local board of education of its powers as to the adoption of budgets, expenditure of money, and all other financial powers conferred upon the local board of education by law."
Sec. 12.  If any section or provision of this act is declared invalid under Section 5 of the Voting Rights Act of 1965, or unconstitutional by the courts, it does not affect the validity of this act as a whole, or any part other than the part declared to be unconstitutional.
Sec. 13.  There is appropriated from the General Fund to the Department of Public Education the sum of $22,004,579 for the 1991-92 fiscal year and the sum of $47,400,038 for the 1992-93 fiscal year to provide funds for differentiated pay plans, in accordance with G.S. 115C-238.4(c).
Sec. 14.  Section 7 of this act becomes effective July 1, 1992.  The remainder of this act becomes effective July 1, 1991.