A BILL TO BE ENTITLED
AN ACT TO establish a legislative tuition grant program for PRIVATE SCHOOL STUDENTS.
The General Assembly of North Carolina enacts:
SECTION 1.  Subchapter X of Chapter 115C of the General Statutes is amended by adding a new Article to read:
"Article 39A.
"Legislative Tuition Grant Program for Private School Students.
"§ 115C‑567.1.  Legislative tuition grant program.
(a)	Administration of Program. – The Legislative Tuition Grant Program for Private School Students is established in the Department of Administration. The Division of Nonpublic Education, Department of Administration, shall administer the program.
(b)	Purpose. – The purpose of the program is to provide tuition grants to public school‑aged children who attend participating private schools. The grant program shall be phased in beginning with the 2007‑2008 kindergarten class and subsequent kindergarten classes.
(c)	Definitions. – As used in this Article:
(1)	An "eligible student" is a student who (i) enters or entered kindergarten during the 2007‑2008 school year or a subsequent school year and (ii) is eligible to attend a public school in the State.
(2)	A "participating private school" is a private church school, a school of religious charter, or a qualified nonpublic school that elects to participate in the program and that complies with the requirements of the program and the provisions of Article 39 of this Chapter.
(d)	Grants. – An eligible student shall receive a tuition grant of one thousand eight hundred dollars ($1,800) per year for each year the eligible student attends a participating private school. The tuition grant is the entitlement of the eligible student under the supervision of the student's parent or guardian and not that of any school.
A participating school shall not refund, rebate, or share a student's tuition grant with a parent, guardian, or student. A student's tuition grant shall only be used for educational purposes.
(e)	Admission to Participating Schools. – Participating schools that have more eligible students applying than spaces available shall fill the available spaces by a random selection process, except that participating schools may give preference to siblings of enrolled students and previously enrolled tuition grant students under this Subchapter.
If a student is denied admission to a participating school because it has too few available spaces, the eligible student may transfer his or her tuition grant to a participating school that has spaces available.
(f)	Responsibilities of Participating Schools. – All participating schools shall:
(1)	Certify that they will not discriminate in admissions on the basis of race, color, national origin, religion, or disability;
(2)	Demonstrate their financial accountability by:
a.	Submitting a financial information report for the school that complies with accounting standards established by the Department and that was conducted by an accountant; and
b.	Having the auditor certify that the report is free of material misstatements. The auditor's report shall be limited in scope to those records that are necessary for the Department to make payments to participating schools on behalf of parents for tuition grants;
(3)	Demonstrate their financial viability by showing they can repay any funds that might be owed the State, if they are to receive fifty thousand dollars ($50,000) or more during the school year by:
a.	Filing with the Department prior to the start of the school year a surety bond payable to the State in an amount equal to the aggregate amount of the tuition grants expected to be paid during the school year to students admitted; or
b.	Filing with the Department prior to the start of the school year financial information that demonstrates the school has the ability to pay an aggregate amount equal to the tuition grants expected to be paid for students admitted at the participating school; and
(4)	Regularly report to the parent on the student's academic progress at the school.
(g)	Autonomy of Participating Schools. – A participating school is autonomous and not an agent of the State or federal government and therefore:
(1)	No State agency shall in any way regulate the educational program of a participating school;
(2)	The creation of this program does not expand the regulatory authority of the State or any unit of local government to impose any additional regulation of private schools beyond those necessary to enforce the requirements of the program; and
(3)	Participating schools shall be given the maximum freedom to provide an educational program to their students without governmental control.
(h)	Responsibilities of the Department. – The Department shall:
(1)	Ensure that eligible students and their parents are informed annually of which schools will be participating in the tuition grant program.
(2)	Create a standard application that students interested in the tuition grant program can use to submit to participating schools to establish their eligibility and apply for admissions. Participating schools may require supplemental information from applicants. The Department shall ensure that the application is readily available to interested families through various sources, including the Internet.
(i)	Disqualification of Participating Schools. – The Department may bar a school from participation in the program if the Department establishes that the participating school has:
(1)	Intentionally and substantially misrepresented information required under this section;
(2)	Routinely failed to comply with requirements of this section; or
(3)	Failed to refund to the State any tuition grant overpayments in a timely manner.
If the Department decides to bar a participating school from the program, it shall notify eligible students and their parents of this decision as quickly as possible.
(j)	Rule making. – The Department shall adopt rules and procedures as necessary for the administration of the program, including rules regarding:
(1)	The eligibility and participation of private schools, including time lines that will maximize student and private school participation;
(2)	The distribution of tuition grants to eligible students; and
(3)	The application and approval procedures for tuition grants for eligible students and participating schools.
(k)	Responsibility of Local School Administrative Units. – Local school administrative units shall provide to participating schools that have admitted eligible students under this program with a complete copy of the students' school records while complying with the Family Educational Rights and Privacy Act of 1974 (20 U.S.C. Section 1232g)."
SECTION 2.(a)  The Legislative Services Commission may contract with one or more qualified researchers who have previous experience evaluating school choice programs to conduct a study of the program if nonpublic funds are available for this purpose. The Legislative Services Commission may accept private funds to conduct this study.
SECTION 2.(b)  The study shall assess:
(1)	The level of parental satisfaction with the program;
(2)	The level of participating students' satisfaction with the program;
(3)	The impact of the program and the resulting competition from private schools on the resident school districts, public school students, and quality of life in a community;
(4)	The impact of the program on public and private school capacity, availability, and quality; and
(5)	Participating students' academic performance and graduation rates in comparison to students who applied for a tuition grant under this program but did not receive one because of random selection.
SECTION 2.(c)  The researchers who conduct the study shall:
(1)	Apply appropriate analytical and behavioral science methodologies to ensure public confidence in the study.
(2)	Protect the identity of participating schools and students by, among other things, keeping anonymous all disaggregated data other than that for the categories of grade level, gender, race, and ethnicity.
(3)	Provide the General Assembly with a final copy of the evaluation of the program.
SECTION 2.(d)  The participating private schools shall cooperate with the research effort by providing student assessment results and any other data necessary to complete this study.
SECTION 2.(e)  The study shall cover a period of thirteen years. The General Assembly may require periodic reports from the researchers. After publishing their results, the researchers shall make their data and methodology available for public review while complying with the requirements of FERPA (20 U.S.C. Section 1232g).
SECTION 3.  There is appropriated from the General Fund to the Department of Administration the sum of twenty‑two million one hundred eighty thousand sixty‑two dollars ($22,180,062) for the 2007‑2008 fiscal year and the sum of forty‑four million seven hundred seventy‑eight thousand five hundred three dollars ($44,778,503) for the 2008‑2009 fiscal year to implement the provisions of this act.
SECTION 4.  This act is effective when it becomes law.