A BILL TO BE ENTITLED
AN ACT to create a north carolina lottery for education.
The General Assembly of North Carolina enacts:
SECTION 1.  The General Statutes of North Carolina are amended by adding a new Chapter to read:
"Chapter 143D.
"North Carolina State Lottery for Education.
"§ 143D‑101.  Citation.
This Chapter shall be known and may be cited as the North Carolina State Lottery for Education Act.
"§ 143D‑102.  Purpose and intent.
The General Assembly declares that the purpose and intent of this Chapter is to provide additional monies to benefit education purposes through the implementation of a State‑operated lottery without the imposition of additional or increased taxes. The lottery shall be initiated at the earliest practical time, and it shall be operated to maximize new revenue to the State. That new revenue shall be raised in a manner consistent with the dignity of the State and the general welfare of the people and in a manner consistent with effective business practices.
"§ 143D‑103.  Laws not affected.
In the event of a conflict between the provisions of this Chapter and any other laws, including Article 37 of Chapter 14 of the General Statutes, the provisions of this Chapter shall govern.
"§ 143D‑104.  Commission a self‑supporting agency.
It is the intent of this Chapter that the Commission established by this Chapter shall be an independent, self‑supporting, and revenue‑raising agency of State government.
"§ 143D‑105.  Public purposes to benefit from lottery.
The net proceeds from the North Carolina State Lottery for Education shall be used to provide scholarships for citizens of this state to attend colleges and universities located within this state. The funds from the North Carolina State Lottery for Education shall supplement and not supplant other State funds appropriated for scholarships and tuition assistance.
"§ 143D‑106.  Allocation of revenues.
(a)	As nearly as practical, revenues shall be allocated in the following manner:
(1)	At least fifty percent (50%) of the total annual revenues, as described in this Chapter, shall be returned to the public in the form of prizes as described in this Chapter.
(2)	At least thirty‑four percent (34%) of the total annual revenues, as described in this Chapter, shall be used for the public purposes described in G.S. 143D‑119.
(3)	No more than sixteen percent (16%) of the total annual revenues, as described in this Chapter, shall be allocated for payment of expenses of the Commission as described in this Chapter.
(b)	Unclaimed prize money held by the Commission in the Lottery Fund, as described in this Chapter, may be used by the Commission to enhance prizes in other lottery games.
(c)	To the extent that the expenses of the Commission are less than sixteen percent (16%) of total annual revenues, any surplus funds may be allocated, in any proportion:
(1)	To increase prize payments; or
(2)	To the benefit of the public purposes as described in this Chapter.
"§ 143D‑107.  Creation of Commission.
(a)	There is created a North Carolina State Lottery for Education Commission which shall consist of seven members, three of whom shall be appointed by the Governor, two of whom shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, and two of whom shall be appointed by the General Assembly upon the recommendations of the Speaker of the House of Representatives.
(b)	Of the initial appointees of the Governor, two members shall serve terms of three years and one member shall serve a term of five years. Of the initial appointees of the General Assembly upon the recommendation of the President Pro Tempore of the Senate, one member shall serve a term of three years, and one member shall serve a term of five years. Of the initial appointees of the General Assembly upon the recommendation of the Speaker of the House of Representatives, one member shall serve a term of three years, and one member shall serve a term of five years. All succeeding appointments shall be for terms of five years.
(c)	All initial appointments shall be made within 30 days of the effective date of this Chapter.
(d)	Vacancies shall be filled within 30 days of their occurrence by the appointing authority for the unexpired portion of the term in which they occur.
(e)	All appointments made by the General Assembly shall be made in accordance with the applicable sections of Article 16 of Chapter 120 of the General Statutes.
"§ 143D‑108.  Powers and duties of the Commission.
The Commission shall exercise all powers necessary to effectuate the purposes of this Chapter, including the issuance of rules and the establishment of licensing and contracting requirements and procedures.
"§ 143D‑109.  Annual selection of chairman.
The initial chairman shall be selected, and thereafter the Commission shall annually select a chairman from its membership.
"§ 143D‑110.  Meetings; records.
(a)	Meetings of the Commission shall be open and public in accordance with Article 33C of Chapter 143 of the General Statutes.
(b)	Records of the Commission shall be open and available to the public in accordance with the provisions of Chapter 132 of the General Statutes.
(c)	The Commission shall meet with the Director at least quarterly to make recommendations and set policy, to approve or reject reports of the Director, to issue rules, and to transact any other business that may properly be brought before it. Regular meetings shall be held no more often than monthly, unless required by an emergency.
(d)	The chairman or a majority of the members of the Commission shall have the power to call special meetings of the Commission upon advance written notice to all of the members of the Commission and the Director.
"§ 143D‑111.  Quorum; voting.
A majority of the total membership of the Commission constitutes a quorum. All decisions of the Commission shall be made by a majority vote at a meeting at which a quorum is present.
"§ 143D‑112.  Reports.
The Commission shall make quarterly and annual reports on the operations of the Commission to the Governor, Attorney General, State Treasurer, and to the Joint Legislative Commission on Governmental Operations. The reports shall include full and complete statements of lottery revenues, prize disbursements, expenses, net revenues, and all other financial transactions involving lottery funds.
"§ 143D‑113.  Operation of the North Carolina State Lottery for Education.
The Commission shall establish policies and issue rules for the operation of the North Carolina State Lottery for Education for the benefit of the general welfare of the public including the following:
(1)	Appointment of a lottery director and other Commission personnel.
(2)	Contracting with lottery vendors and retailers.
(3)	Operation of lottery games.
(4)	Payment of lottery prizes.
(5)	All other matters for the efficient, effective, and secure operation of the lottery."§ 143D‑114. North Carolina State Lottery for Education Fund; Lottery Scholarship Fund.
(a)	An enterprise fund, to be known as the 'North Carolina State Lottery for Education Fund', is created within the State treasury. The North Carolina State Lottery for Education Fund is continuously appropriated to the Commission for the purposes of operating the Commission and the lottery games.
(b)	A special revenue fund, to be known as the 'Lottery Scholarship Fund', is created within the State treasury. The Lottery Scholarship Fund is continuously appropriated to the State Education Assistance Authority for the purposes set forth in G.S. 143D‑119.
"§ 143D‑115.  Types of income to the North Carolina State Lottery for Education Fund.
The North Carolina State Lottery for Education Fund shall receive all of the following monies:
(1)	All proceeds from the sale of lottery tickets or shares.
(2)	The funds for initial start‑up costs provided by the State.
(3)	All other monies credited to the Commission from any source.
"§ 143D‑116.  Types of disbursements from the North Carolina State Lottery for Education Fund.
Disbursements shall be made from the North Carolina State Lottery for Education Fund for any of the following purposes:
(1)	The payment of prizes to the holders of valid winning lottery tickets or shares.
(2)	Expenses of the Commission, including initial start‑up costs.
(3)	Transfer of funds from the North Carolina State Lottery for Education Fund to the Lottery Scholarship Fund.
"§ 143D‑117.  Prize payments of the lottery.
(a)	As nearly as practical, at least fifty percent (50%) of the total projected revenue as computed on a year‑round basis for the total of all lottery games, accruing from the sales of all lottery tickets or shares from lottery games, shall be allocated for payment of prizes for lottery games.
(b)	The Commission may allocate a larger percentage of the total projected revenue for a lottery game to prizes if it concludes that the total annual net revenues from the lottery game will be enhanced by that prize percentage.
"§ 143D‑118.  Expenses of the lottery.
(a)	Expenses of the lottery may include any of the following:
(1)	The costs incurred in the operation and administration of the Commission, including initial start‑up costs.
(2)	The costs resulting from any contracts entered into for the purchase or lease of goods or services required by the Commission.
(3)	The compensation paid to lottery game retailers.
(4)	The costs of supplies, materials, tickets, independent studies, data transmission, advertising, promotion, incentives, public relations, communications, bonding for lottery game retailers, printing, and distribution of tickets and shares.
(5)	The costs of reimbursing other governmental entities for services provided to the Commission.
(6)	The costs for any other goods and services needed to accomplish the purposes of this Chapter.
(b)	As nearly as practical, no more than sixteen percent (16%) of the total annual revenues accruing from the sale of all lottery tickets and shares from all lottery games shall be expended for the payment of expenses of the Commission.
"§ 143D‑119.  Transfer of net revenues.
(a)	The funds remaining in the North Carolina State Lottery for Education Fund after receipt of all revenues to the Lottery Fund and after accrual of all obligations of the Commission for prizes and expenses shall be deemed to be the net revenues of the Lottery Fund. On or before the fifteenth day of each quarter, the net revenues from the preceding quarter shall be transferred to the Lottery Scholarship Fund.
(b)	The Lottery Scholarship Fund shall be used to provide scholarships for citizens of this State to attend colleges and universities located within this State pursuant to Article 35A of Chapter 115C of the General Statutes. The funds from the North Carolina State Lottery for Education shall supplement and not supplant other State funds appropriated for scholarships and tuition assistance. 
(c)	A scholarship shortfall reserve subaccount shall be maintained within the Lottery Scholarship Fund. An amount equal to five percent (5%) of the total amount of net revenues disbursed during the preceding fiscal year in the form of scholarships and grants for higher education shall be deposited from the net revenues each year until the reserve amount equals fifty percent (50%) of the disbursements for the previous fiscal year. Thereafter, only an amount necessary to maintain the scholarship shortfall reserve subaccount in an amount equal to fifty percent (50%) of the amount of net revenues disbursed during the preceding fiscal year shall be deposited into the subaccount.
After the scholarship shortfall reserve subaccount has been funded equal to fifty percent (50%)of the disbursements for the previous fiscal year, the subaccount may be used to supplement the scholarship disbursements in a fiscal year where the net revenue available for scholarships is less than seventy‑five percent (75%) of the disbursements for the previous fiscal year. An amount necessary to equal the disbursements for the previous fiscal year may be used from the subaccount. However, funds from the subaccount may not be used more than two years consecutively. 
(d)	At the end of each fiscal year, if the scholarship shortfall reserve subaccount is fully funded, any funds remaining after funding the scholarship program shall be transferred to the Savings Reserve Account established by G.S. 143‑15.3.
"§ 143D‑120.  Sales to persons under the age of 18.
(a)	No tickets or shares in lottery games shall be sold to persons under the age of 18 years. Selling tickets or shares to a person under the age of 18 years shall be a Class 1 misdemeanor.
(b)	To prevent the sale of lottery tickets or shares to persons under the required age, the Commission shall issue rules prescribing the procedures to be followed by lottery retailers in determining the age of potential lottery purchasers.
(c)	It shall be a defense to violation of subsection (a) of this section if the retailer does either of the following:
(1)	Shows that the purchaser produced a drivers license, a special identification card issued under G.S. 20‑37.7, a military identification card, or a passport, showing his age to be at least the required age for purchase and bearing a physical description of the person named on the card reasonably describing the purchaser.
(2)	Produces evidence of other facts that reasonably indicated at the time of sale that the purchaser was at least the required age.
(d)	Nothing in this Article shall be construed to prevent any person 18 years or older from giving or assigning lawfully purchased lottery tickets or shares to another person of any age.
"§ 143D‑121.  Taxes.
No sales taxes shall be imposed on the sale of lottery tickets or shares of lottery games established by this Chapter.
"§ 143D‑122.  Preemption of local regulation.
All matters relating to the operation of the Commission and lottery games established by this Chapter shall be governed solely by the provisions of this Chapter and shall be free from regulation or legislation by local governments, including cities and counties.
"§ 143D‑123.  Lawful activity.
Any other State or local law, ordinance, or regulation providing any penalty, disability, restriction, regulation, or prohibition for the manufacture, transportation, storage, distribution, advertising, possession, or sale of any lottery tickets or shares or for the operation of any lottery game shall not apply to the operation of the Commission or lottery games established by this Chapter."
SECTION 2.  Chapter 115C of the General Statutes is amended by adding a new Article to read:
"Article 35A.
College Scholarships and Grants.
"§ 115C‑499.1.  Definitions.
The following definitions apply to this Article:
(1)	Academic year. – A period of time, typically nine months, in which a full‑time student is expected to complete the equivalent of at least two semesters' or three quarters' academic work.
(2)	Certificate. – A credential other than a degree, indicating satisfactory completion of training in a program of study offered by an institution of the North Carolina System of Community Colleges.
(3)	Eligible high school. – A public school in North Carolina, or a nonpublic secondary school which is:
(a)	Located in North Carolina  and meets the requirements of Part 1 or Part 2 of Article 39 of Chapter 115C of the General Statutes; or
(b)	Located in another state and accredited by one of the following regional agencies:
a.	The Southern Association of Colleges and Schools;
b.	The New England Association of Schools and Colleges;
c.	The Middle States Association of Colleges and Schools;
d.	The North Central Association of Colleges and Schools; 
e.	The Northwestern Association of Schools and Colleges; 
f.	The Western Association of Schools and Colleges; 
g.	The Alabama Independent School Association; or
h.	The Southern Association of Independent Schools. 
(4)	Eligible postsecondary institution. – A school which is: 
(a)	A constituent institution of The University of North Carolina;
(b)	An institution of the North Carolina Community College System;
(c)	A nonpublic postsecondary educational institution licensed pursuant to G.S. 116‑15.(5)	Freshman student. – A student at a postsecondary institution who has attempted less than 46 quarter hours or less than 31 semester hours.
(6)	Full‑time student. – A matriculated student attending a postsecondary educational institution and enrolled for at least 12 semester hours or the equivalent in any given semester or quarter.
(7)	Grade point average. – The numbered grade average calculated using a 4.0 scale.
(8)	Grant. – A grant for education awarded pursuant to G.S. 115C‑499.4.
(9)	Half‑time student. – A matriculated student attending a postsecondary educational institution and enrolled for six to 11 semester hours or the equivalent in any given semester or quarter.
(10)	Junior student. – A student at a postsecondary institution who has attempted at least 91 quarter hours but less than 136 quarter hours or at least 61 semester hours but less than 91 semester hours.
(11)	Mandatory fees. – Fees that are charged by a postsecondary institution to every student enrolled in that institution, regardless of the student's program of study.
(12)	Matriculated status. – Being recognized as a student in a defined program of study leading to a degree, diploma, or certificate at a postsecondary institution.
(13)	Part‑time student. – A matriculated student attending a postsecondary educational institution and enrolled for less than 12 semester hours or the equivalent in any given semester or quarter and who has never been enrolled for 12 or more semester hours or the equivalent in any given semester or quarter.
(14)	Quarter hours. – Each quarter hour attempted, whether remedial or for credit toward a degree, certificate, or diploma.
(15)	Scholarship. – A scholarship for education awarded pursuant to G.S. 115C‑499.2 or G.S.º115C‑499.3.
(16)	Semester hours. – Each semester hour attempted, whether remedial or for credit toward a degree, certificate, or diploma.
(17)	Senior student. – A student at a postsecondary institution who has attempted at least 136 quarter hours but less than 191 quarter hours or at least 91 semester hours but less than 128 semester hours.
(18)	Sophomore student. – A student at a postsecondary institution who has attempted at least 46 quarter hours but less than 91 quarter hours or at least 31 semester hours but less than 61 semester hours.
(19)	Title IV. – Title IV of the Higher Education Act of 1965, as amended, 20 U.S.C § 1070, et seq.
"§ 115C‑499.2.  Eligibility requirements for a scholarship at a constituent institution of The University of North Carolina; scholarship amount.
(a)	To be eligible for a scholarship, an entering freshman student seeking an associate or baccalaureate degree at a constituent institution of The University of North Carolina shall:
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina.
(2)	Meet achievement standards by:
a.	Having graduated from an eligible high school while meeting the curriculum requirements of his or her program of study in 2007 or after and meeting the requirements set out in G.S. 115C‑499.5. 
b.	In the case of a student who is otherwise qualified but: 
1.	Did not graduate from high school or complete a home study program meeting the requirements of Part 3 of Article 39 of Chapter 115C of the General Statutes, having received the general educational development (GED) diploma awarded by the North Carolina Community College System after June 30, 2007, provided that such student shall only be eligible for a scholarship pursuant to subsection (e) of this section; 
2.	Completed a home study program meeting the requirements of Part 3 of Article 39 of Chapter 115C of the General Statutes in lieu of graduating from an eligible high school, earning a cumulative grade point average of at least 3.0 at a constituent institution of The University of North Carolina at the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours, provided that such student shall be eligible to receive a retroactive scholarship for such student's freshman year to be paid at the end of the freshman year; or 3. Graduated from a high school which is not an eligible high school, earning a cumulative grade point average of at least 3.0 at a constituent institution of The University of North Carolina at the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours, provided that such student shall be eligible to receive a retroactive scholarship for such student's freshman year to be paid at the end of the freshman year; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status. 
(b)	To be eligible for a scholarship, a sophomore student seeking an associate or baccalaureate degree at a constituent institution of The University of North Carolina shall:
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina.
(2)	Meet achievement standards by meeting the following criteria:
a.	Earning a cumulative grade point average of at least 3.0 at a postsecondary institution: 
1.	At the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours if such student is a full‑time student; or
2.	At the end of three consecutive quarters or semesters if such student is a part‑time student and has maintained part‑time student status for three consecutive quarters or semesters; and
b.	Maintaining satisfactory academic progress in a course of study in accordance with the standards and practices used for federal Title IV programs by the postsecondary institution in which the student is enrolled; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status or, in the case of an otherwise eligible student who is classified as a professional level student rather than an undergraduate student, being accepted into the professional level program of study prior to receiving a baccalaureate degree. 
(c)	To be eligible for a scholarship, a junior student seeking a baccalaureate degree at a constituent institution of The University of North Carolina shall: 
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina.
(2)	Meet achievement standards by meeting the following criteria: 
a.	Earning a cumulative grade point average of at least 3.0 at a postsecondary institution at the end of the quarter or semester in which the student has attempted 90 quarter hours or 60 semester hours; and
b.	Maintaining satisfactory academic progress in a course of study in accordance with the standards and practices used for federal Title IV programs by the postsecondary institution in which the student is enrolled; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status or, in the case of an otherwise eligible student who is classified as a professional level student rather than an undergraduate student, being accepted into the professional level program of study prior to receiving a baccalaureate degree. 
(d)	To be eligible for a scholarship, a senior student seeking a baccalaureate degree at a constituent institution of The University of North Carolina shall:
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina. 
(2)	Meet achievement standards by meeting the following criteria: 
a.	Earning a cumulative grade point average of at least 3.0 at a postsecondary institution at the end of the quarter or semester in which the student has attempted 135 quarter hours or 90 semester hours; and
b.	Maintaining satisfactory academic progress in a course of study in accordance with the standards and practices used for federal Title IV programs by the postsecondary institution in which the student is enrolled; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status or, in the case of an otherwise eligible student who is classified as a professional level student rather than an undergraduate student, being accepted into the professional level program of study prior to receiving a baccalaureate degree. 
(e)	A full‑time student who fails to maintain a cumulative grade point average of at least 3.0 at the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours may attend the next 45 quarter or 30 semester hours without a scholarship. 
(1)	An otherwise eligible full‑time student who regains a cumulative grade point average of at least 3.0 at the end of a quarter or semester in which the full‑time student has attempted 90 or 135 quarter hours or 60 or 90 semester hours may requalify for a  scholarship. 
(2)	An otherwise eligible part‑time student who regains or attains a cumulative grade point average of at least 3.0 at the end of a quarter or semester in which the part‑time student has attempted 45, 90, or 135 quarter hours or 30, 60, or 90 semester hours may attain or requalify for a  scholarship. 
(3)	In addition to other requirements, and regardless of quarter hours or semester hours of coursework attempted, a student who fails to possess a cumulative grade point average of at least 3.0 at the end of each spring quarter or semester or at the end of three consecutive quarters or semesters for a part‑time student pursuant to subdivision (2) of subsection (b) of this section shall be ineligible for a scholarship until such time as the student regains or attains a cumulative grade point average of at least 3.0 at one of the 45, 90, or 135 quarter hour grade point average checkpoints or at one of the 30, 60, or 90 semester hour grade point average checkpoints, at which time the student will regain or attain eligibility if other terms and conditions in this section are also satisfied.
(f)	For students eligible for a scholarship under this section, no minimum number of hours of enrollment is required. 
(g)	Except as set out in subsection (h) of this section, a student may receive the  scholarship until the first of these events: 
(1)	The student has earned a baccalaureate degree; or
(2)	The student has attempted at any postsecondary institution a total of 190 quarter hours or 127 semester hours.
(h)	Notwithstanding subsection (g) of this section, a student enrolled in an undergraduate degree program designed to be more than 190 quarter hours or 127 semester hours in length is eligible to receive the scholarship for the lesser of: 
a.	A total of 225 attempted quarter hours or 150 attempted semester hours; or
b.	The number of hours required for graduation if the student has a cumulative grade point average of at least 3.0 after the term in which the student attempted 190 quarter hours or 127 semester hours. 
(i)	Subject to the amount of net income available pursuant to G.S. 143D‑119, a scholarship awarded under this section shall include tuition, approved mandatory fees, and a book allowance not to exceed one hundred dollars ($100.00) per quarter or one hundred fifty dollars ($150.00) per semester. 
"§ 115C‑499.3.  Eligibility requirements for a scholarship at a nonpublic postsecondary institution; scholarship amount.
(a)	To be eligible for a scholarship, an entering freshman student seeking an associate or baccalaureate degree at an eligible nonpublic postsecondary institution shall:
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina. 
(2)	Meet achievement standards by:
a.	Having graduated from an eligible high school while meeting the curriculum requirements of his or her program of study in 2007 or after and meeting the requirements set out in G.S. 115C‑499.5. 
b.	In the case of a student who is otherwise qualified but: 
1.	Did not graduate from high school or complete a home study program meeting the requirements of Part 3 of Article 39 of Chapter 115C of the General Statutes, having received the general educational development (GED) diploma awarded by the North Carolina Community College System after June 30, 2007, provided that such student shall only be eligible for a scholarship pursuant to subsection (e) of this section;
2.	Completed a home study program meeting the requirements of Part 3 of Article 39 of Chapter 115C of the General Statutes in lieu of graduating from an eligible high school, earning a cumulative grade point average of at least 3.0 at an eligible nonpublic postsecondary institution at the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours, provided that such student shall be eligible to receive a retroactive scholarship for such student's freshman year to be paid at the end of the freshman year; or
3.	Graduated from a high school which is not an eligible high school, earning a cumulative grade point average of at least 3.0 at an eligible nonpublic postsecondary institution at the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours, provided that such student shall be eligible to receive a retroactive scholarship for such student's freshman year to be paid at the end of the freshman year; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status. 
(b)	To be eligible for a scholarship, a sophomore student seeking an associate or baccalaureate degree at an eligible nonpublic postsecondary institution shall:
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina.
(2)	Meet achievement standards by meeting the following criteria: 
a.	Earning a cumulative grade point average of at least 3.0 at a postsecondary institution: 
1.	At the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours if such student is a full‑time student; or
2.	At the end of three consecutive quarters or semesters if such student is a part‑time student and has maintained part‑time student status for three consecutive quarters or semesters; and
b.	Maintaining satisfactory academic progress in a course of study in accordance with the standards and practices used for federal Title IV programs by the postsecondary institution in which the student is enrolled; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status or, in the case of an otherwise eligible student who is classified as a professional level student rather than an undergraduate student, being accepted into the professional level program of study prior to receiving a baccalaureate degree. 
(c)	To be eligible for a scholarship, a junior student seeking a baccalaureate degree at a nonpublic postsecondary institution shall: 
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina. 
(2)	Meet achievement standards by meeting the following criteria: 
a.	Earning a cumulative grade point average of at least 3.0 at a postsecondary institution at the end of the quarter or semester in which the student has attempted 90 quarter hours or 60 semester hours; and
b.	Maintaining satisfactory academic progress in a course of study in accordance with the standards and practices used for federal Title IV programs by the postsecondary institution in which the student is enrolled; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status or, in the case of an otherwise eligible student who is classified as a professional level student rather than an undergraduate student, being accepted into the professional level program of study prior to receiving a baccalaureate degree. 
(d)	To be eligible for a scholarship, a senior student seeking a baccalaureate degree at a nonpublic postsecondary institution shall:
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina.
(2)	Meet achievement standards by meeting the following criteria: 
a.	Earning a cumulative grade point average of at least 3.0 at a postsecondary institution at the end of the quarter or semester in which the student has attempted 135 quarter hours or 90 semester hours; and
b.	Maintaining satisfactory academic progress in a course of study in accordance with the standards and practices used for federal Title IV programs by the postsecondary institution in which the student is enrolled; and
(3)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status or, in the case of an otherwise eligible student who is classified as a professional level student rather than an undergraduate student, being accepted into the professional level program of study prior to receiving a baccalaureate degree. 
(e)	A full‑time student who fails to maintain a cumulative grade point average of at least 3.0 at the end of the quarter or semester in which the student has attempted 45 quarter hours or 30 semester hours may attend the next 45 quarter or 30 semester hours without a scholarship. 
(1)	An otherwise eligible full‑time student who regains a cumulative grade point average of at least 3.0 at the end of a quarter or semester in which the full‑time student has attempted 90 or 135 quarter hours or 60 or 90 semester hours may requalify for a  scholarship. 
(2)	An otherwise eligible part‑time student who regains or attains a cumulative grade point average of at least 3.0 at the end of a quarter or semester in which the part‑time student has attempted 45, 90, or 135 quarter hours or 30, 60, or 90 semester hours may attain or requalify for a scholarship. 
(3)	In addition to other requirements, and regardless of quarter hours or semester hours of coursework attempted, a student who fails to possess a cumulative grade point average of at least 3.0 at the end of each spring quarter or semester or at the end of three consecutive quarters or semesters for a part‑time student pursuant to subsubsection (b)(2) of this section shall be ineligible for a scholarship until such time as the student regains or attains a cumulative grade point average of at least 3.0 at one of the 45, 90, or 135 quarter hour grade point average checkpoints or at one of the 30, 60, or 90 semester hour grade point average checkpoints, at which time the student will regain or attain eligibility if other terms and conditions in this section are also satisfied.
(f)	For students eligible for a scholarship under this section, no minimum number of hours of enrollment is required. 
(g)	Except as set out in subsection (h) of this section, a student may receive the scholarship until the first of these events: 
(1)	The student has earned a baccalaureate degree; or
(2)	The student has attempted at any postsecondary institution a total of 190 quarter hours or 127 semester hours.
(h)	Notwithstanding subsection (g) of this section, a student enrolled in an undergraduate degree program designed to be more than 190 quarter hours or 127 semester hours in length is eligible to receive the scholarship for the lesser of: 
(1)	A total of 225 attempted quarter hours or 150 attempted semester hours; or
(2)	The number of hours required for graduation if the student has a cumulative grade point average of at least 3.0 after the term in which the student attempted 190 quarter hours or 127 semester hours. 
(i)	Subject to the amount of net income available pursuant to G.S. 143D‑119, a scholarship awarded under this section for any academic year shall be in an amount equivalent to tuition and mandatory fees at the University of North Carolina at Chapel Hill for full‑time enrollment and half that amount for half‑time enrollment and a book allowance not to exceed one hundred dollars ($100.00) per quarter or one hundred fifty dollars ($150.00) per semester.
"§ 115C‑499.4.  Eligibility requirements for a grant at an institution of the North Carolina Community College System; limitation on hours eligibility.
(a)	To be eligible for a grant, a student seeking a degree or certificate at an institution of the North Carolina Community College System shall: 
(1)	Meet residency requirements by meeting the requirements to be classified as a legal resident of North Carolina as established by the program regulations promulgated by the State Education Assistance Authority which shall be based upon the requirements for being considered a resident for tuition purposes by The University of North Carolina. 
(2)	Meet enrollment standards by being admitted, enrolled, and classified as an undergraduate student in a matriculated status in a program of study leading to a degree or certificate and maintaining satisfactory academic progress in accordance with the standards and practices used for federal Title IV programs by the institution at which the student is enrolled.
(b)	There is no minimum number of hours of enrollment required for eligibility for a  grant under this section. 
(c)	Subject to the provisions of subsection (e) of this section, an eligible student may receive grants for all coursework required by the institution for programs of study leading to a degree or certificate, including remedial or developmental studies. 
(d)	Subject to the amount of net income available pursuant to G.S. 143D‑119, a grant awarded under this section shall include tuition, approved mandatory fees, and a book allowance not to exceed one hundred dollars ($100.00) per quarter or one hundred fifty dollars ($150.00) per semester.
(e)	No student may receive grants for more than 95 quarter hours or 63 semester hours of attempted coursework, except as provided for in subsection (f) of this section. No student may receive more than a cumulative total of 190 quarter hours or 127 semester hours of combined scholarships and grants, unless in accordance with G.S. 115C‑499.2 and G.S. 115C‑499.3. 
(f)	A student enrolled in a degree or certificate program designed to be more than 95 quarter hours or 63 semester hours in length is eligible to receive a HOPE grant for the lesser of: 
(1)	A total of 130 attempted quarter hours or 86 attempted semester hours; or
(2)	The number of hours required for graduation.
"§ 115C‑499.5.  Uniform reporting system for scholarships and grants.
(a)	It is the intent of the General Assembly to establish a uniform reporting system to be used as one of the criteria to determine eligibility of students seeking scholarships or grants pursuant to this Article. 
(b)	Each school system and private school shall adopt the reporting system described in this subsection for purposes of identifying and qualifying graduating seniors for the scholarship and grant programs in this Article:
(1)	Each school system and private school shall transmit, in a manner and at times prescribed by the State Education Assistance Authority, a transcript of courses and course grades for each graduating senior that reflects the complete high school academic record of the student, including scores on any State tests required for graduation, the grading scales used by the school system or private school for the time periods referenced by the transcripts, and any other pertinent information as determined by the State Education Assistance Authority. Each grade reported by a school system or private school to the Authority for the purpose of calculating the grade point average for scholarship eligibility shall be the actual grade earned by the student, with no weighting or addition of points by the local school system or private school; 
(2)	The State Education Assistance Authority shall calculate a grade point average for the purpose of determining eligibility for the scholarship from these transcripts and shall notify students of their eligibility and high schools as to the eligibility of students;
(3)	For students otherwise qualified and enrolling as freshmen students in eligible public or nonpublic postsecondary institutions for the first time on May 1, 2007, or thereafter, the State Education Assistance Authority shall calculate grade point averages for determining eligibility for the scholarship as follows: 
a.	For students receiving a college or university preparatory diploma, each grade for a student in attempted coursework in English, mathematics, science, social studies, and foreign language that would, if successfully completed, satisfy a core graduation requirement for the college preparatory curriculum shall be equated to a grade on a 4.0 scale, such that a grade of 'A' = 4.0, a grade of 'B' = 3.0, a grade of 'C' = 2.0, a grade of 'D' = 1.0, and a grade of 'F' = 0; or
b.	For students receiving a career preparatory or college technical preparatory  diploma, each grade for a student in attempted coursework in English, mathematics, science, and social studies that would, if successfully completed, satisfy a core graduation requirement for the career/technical curriculum shall be equated to a grade on a 4.0 scale, such that a grade of 'A' = 4.0, a grade of 'B' = 3.0, a grade of 'C' = 2.0, a grade of 'D' = 1.0, and a grade of 'F' = 0. Grades for coursework that is classified as advanced placement or international baccalaureate shall be weighted by the State Education Assistance Authority in calculating the overall grade point averages for students, provided that the weighting of such course grades is uniformly applied to all students in the State taking the specified coursework. The sum of the equated grades shall be divided by the number of course grades, adjusted for term length, to yield a grade point average on a 4.0 scale. 
(4)	Qualification for the scholarship shall be determined from the grade point average calculated as set out in subdivision (3) of this subsection. Students with grade point averages equal to or in excess of 3.0 on the 4.0 scale with a college or university preparatory diploma shall meet achievement standards for the scholarship; students receiving a career preparatory or college technical preparatory diploma shall meet achievement standards for the scholarship with a grade point average equal to or in excess of 3.2 on a 4.0 scale.
"§ 115C‑499.6.  Scholarship amounts dependent on net income available; restrictions on increase.
Subject to the maximum amounts provided in this Chapter, the State Education Assistance Authority shall have the power to determine the actual scholarship amounts disbursed to individuals in any given year, based on the amount of net income available pursuant to G.S. 143D‑119. If the net income available is not sufficient to fully fund the scholarships to the maximum amount, all scholarships shall be reduced equally so that every eligible applicant that is a full‑time student shall receive the same scholarship amount and every eligible applicant that is a half‑time student shall receive half that amount.
Notwithstanding G.S. 115C‑499.2(i), 115C‑499.3(i), and 115C‑499.4(d), if the net income available is sufficient to fully fund the scholarships, the amount of the individual scholarships shall not be increased more than three percent (3%) above the previous year's scholarship amount. However, the amount may be increased up to ten percent (10%) if the previous year's scholarship amount was more than twenty‑five percent (25%) below the maximum allowed by this Article due to insufficient net income available.
"§ 115C‑499.7.  Reporting requirements.
The State Education Assistance Authority shall report no later than June 1, 2008, and annually thereafter to the Joint Legislative Education Oversight Committee. The report shall contain, for the previous academic year, the amount of scholarship and grant money disbursed, the number of students eligible for the funds, the number of eligible students receiving the funds, and a breakdown of the postsecondary institutions that received the funds."
SECTION 3.  G.S. 116‑204 reads as rewritten:
"§ 116‑204.  Powers of Authority.
The Authority is hereby authorized and empowered:
(1)	To fix and revise from time to time and charge and collect fees for its acts and undertakings;
(2)	To establish rules and regulations concerning its acts and undertakings;
(3)	To acquire, hold and dispose of personal property in the exercise of its powers and the performance of its duties;
(4)	To make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this Article;
(5)	To employ, in its discretion, consultants, attorneys, accountants, and financial experts, superintendents, managers and such other employees and agents as may be necessary in its judgment, and to fix their compensation to be payable from funds made available to the Authority by law;
(6)	To receive and accept from any federal or private agency, corporation, association or person grants to be expended in accomplishing the objectives of the Authority, and to receive and accept from the State, from any municipality, county or other political subdivision thereof and from any other source aid or contributions of either money, property, or other things of value, to be held, used and applied only for the purposes for which such grants and contributions may be made;
(7)	To sue and to be sued; to have a seal and to alter the same at its pleasure; and to make and from time to time amend and repeal bylaws, rules and regulations not inconsistent with law to carry into effect the powers and purposes of the Authority;
(8)	To do all other acts and things necessary or convenient to carry out the powers expressly granted in this Article; provided, however, that nothing in this Article shall be construed to empower the Authority to engage in the business of banking or insurance.
(9)	To collect loan repayments for loans awarded under the Teaching Fellows Program pursuant to G.S. 115C‑363.23A if the loan repayment is outstanding for more than 30 days.
(10)	To collect loan repayments for loans awarded from the Scholarship Loan Fund for Prospective Teachers pursuant to Article 32A of Chapter 115C of the General Statutes if the loan repayment is outstanding for more than 30 days. 
(11)	To administer the Lottery Scholarship Fund pursuant to the provisions of Article 35A of Chapter 115C."
SECTION 4.  This act is effective when it becomes law.