A BILL TO BE ENTITLED
AN ACT to codify the north carolina virtual public school program; to Provide a tuition waiver for nonpublic school students for a maximum of two North Carolina virtual public school courses per School year; and to appropriate funds to implement this act, as recommended by the Joint Legislative Program Evaluation Oversight Committee.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  Subsections (a) through (k) of Section 7.22 of S.L. 2011‑145, as amended by Section 7.12 of S.L. 2012‑142, are repealed.
SECTION 1.(b)  Section 8.9(b) of S.L. 2013‑360 is repealed.
SECTION 1.(c)  Article 16 of Chapter 115C of the General Statutes is amended by adding a new Part to read:
"Part 11. North Carolina Virtual Public School Program.
"§ 115C‑238.74.  Definitions.
The following definitions apply in this Part:
(1)	ADM. – Average daily membership.
(2)	NCVPS. – The North Carolina Virtual Public School program, as established by this Part.
(3)	Nonpublic school student. – A student enrolled in a school that meets the requirements of Part 1, 2, or 3 of Article 39 of this Chapter as identified by the Division of Nonpublic Education, Department of Administration.
(4)	Out‑of‑state student. – A student who is not qualified to be assigned to a public school in a local school administrative unit in North Carolina pursuant to G.S. 115C‑366.
"§ 115C‑238.75.  Administration of the North Carolina Virtual Public School program.
(a)	NCVPS shall be administered by the Department of Public Instruction in accordance with this Part.
(b)	NCVPS shall be responsible for the following:
(1)	Ensuring access to e‑learning course offerings for students residing in rural and low‑wealth county local school administrative units, in order to expand available instructional opportunities.
(2)	Providing e‑learning instructional opportunities for courses required as part of the standard course of study for high school graduation and for Advanced Placement (AP) offerings when not otherwise available to students.
(3)	Establishing course quality standards for e‑learning opportunities that meet the standards set by the State Board of Education.
(4)	Eliminating course duplication by consolidating e‑learning opportunities offered by State‑funded entities to public school students under NCVPS. This consolidation shall not apply to e‑learning opportunities solely offered to students enrolled in a single school.
(5)	Aligning all courses offered through NCVPS with the North Carolina Standard Course of Study.
(c)	NCVPS shall use available funds to provide NCVPS courses at no cost to all students in North Carolina who are enrolled in North Carolina's public schools, Department of Defense schools, and schools operated by the Bureau of Indian Affairs.
(d)	NCVPS shall implement a plan, approved by the State Board of Education, to generate revenue from the sale of courses to out‑of‑state educational entities. Revenue generated by NCVPS under this section shall be used to offset instructional costs to local school administrative units and charter schools pursuant to G.S. 115C‑238.76(d)(3).
"§ 115C‑238.76.  Allotment formula; adjustments to other allotments; enrollment reserve.
(a)	The State Board of Education shall implement an allotment formula for NCVPS as follows:
(1)	Project NCVPS student enrollment by semester and year‑long course types for each local school administrative unit and charter school.
(2)	Establish a per course teacher payment structure for the instructional costs of NCVPS. In establishing this payment structure, the State Board shall consider the following:
a.	The payment structure shall be based on a total compensation analysis to ensure NCVPS teacher pay has parity with similar programs. The total compensation analysis shall take into account salaries, benefits, and work effort to ensure valid comparisons between occupations.
b.	The effects any change in NCVPS teacher payments may have on the attraction and retention of NCVPS teachers.
(3)	Develop a per student fee structure for in‑State students that is based on the per course teacher pay structure. The fee structure for in‑State students shall ensure that the projected cost for local school administrative units and charter schools equals the projected instructional cost for NCVPS courses. The State Board of Education shall consider recommendations from the NCVPS Advisory Board and the Office of the Governor's eLearning Commission in establishing a per student fee structure.
(4)	Multiply the per course fees for in‑State students by the projected enrollment by course type to determine the total instructional cost for each local school administrative unit and charter school.
(5)	Transfer a dollar amount equal to seventy‑five percent (75%) of the local school administrative unit's or charter school's projected instructional cost from the classroom teacher allotment to NCVPS.
(6)	No later than February 28 of each year, calculate the actual instructional cost for each local school administrative unit and charter school based upon actual NCVPS enrollment as of that date.
(7)	Subtract the amount transferred pursuant to subdivision (5) of this subsection from the actual instructional cost for each local school administrative unit or charter school and transfer the remaining dollar amount owed, up to a maximum of one hundred percent (100%) of the projected cost.
(8)	Develop and implement a policy regarding returning funds to local school administrative units and charter schools in cases where the amount transferred pursuant to subdivision (5) of this subsection exceeds the actual instructional costs.
(b)	The State Board of Education shall reduce each local school administrative unit's or charter school's classroom teacher allotment, or other allotment, as determined by the State Board of Education, on the basis of ADM in grades six through 12 to support the State‑level operations and administration of NCVPS. The allotment reduction to support the State‑level operations and administration of NCVPS shall be based on the reduction taken from the prior fiscal year but shall be adjusted annually based upon the percentage growth in NCVPS enrollment to ensure the expansion of services due to increased student enrollment in NCVPS courses.
(c)	An NCVPS enrollment reserve fund shall be maintained in an amount of at least two million dollars ($2,000,000). For each fiscal year, the State Board of Education shall reduce each local school administrative unit's or charter school's classroom teacher allotment, or other allotment, as determined by the State Board of Education, on the basis of ADM in grades six through 12 by an amount that is the difference between two million dollars ($2,000,000) and the balance of the NCVPS enrollment reserve. The funds in the NCVPS enrollment reserve fund shall not revert and shall be used to cover the NCVPS instructional costs of students enrolled in (i) traditional public schools or charter schools with enrollments exceeding projected NCVPS enrollment, (ii) nonpublic schools pursuant to G.S. 115C‑238.77(b), (iii) Department of Defense schools, and (iv) schools operated by the Bureau of Indian Affairs.
(d)	Only the following funds shall be used to cover the instructional costs of NCVPS:
(1)	Funds provided through the NCVPS Allotment Formula, as established by subsection (a) of this section.
(2)	Funds provided through the NCVPS enrollment reserve, as set forth in subsection (c) of this section.
(3)	Funds from the sale of courses to out‑of‑state educational entities, pursuant to G.S. 115C‑238.75(d).
(4)	Local funds, including funds from private sources.
(5)	Federal funds.
(6)	The Special State Reserve Funds for Children and Youth with Disabilities.
(7)	The ADM Contingency Reserve.
"§ 115C‑238.77.  Tuition for out‑of‑state and nonpublic school students.
(a)	The State Board of Education shall establish a separate per student tuition rate for out‑of‑state students and nonpublic school students, which shall be adjusted upward from the in‑State student fee structure, as established under G.S. 115C‑238.76(a)(3), by an amount determined appropriate by the State Board. The State Board of Education shall consider recommendations from the NCVPS Advisory Board and the Office of the Governor's eLearning Commission in establishing student tuition rates.
(b)	Tuition shall be waived for nonpublic school students for a maximum of two NCVPS courses each school year. Nonpublic school students enrolling in more than two NCVPS courses during the school year shall be charged tuition for those additional courses per the rates for nonpublic school students established by the State Board pursuant to this section.
(c)	The tuition waiver for a NCVPS course provided pursuant to subsection (b) of this section shall not be available to a nonpublic school student who attends a nonpublic school under Part 1 or Part 2 of Article 39 of this Chapter if (i) the course or a substantially similar course is offered at the school attended by the student in the current or prior school year or (ii) the student attends a nonpublic school that delivers instruction solely through an online format.
(d)	The Department of Public Instruction shall require the parent of the nonpublic school student at the time of enrollment to demonstrate that if the parent is requesting a tuition waiver of a NCVPS course pursuant to subsection (b) of this section that the course is eligible for the waiver under this section.
"§ 115C‑238.78.  NCVPS Advisory Board.
The State Board of Education shall establish the NCVPS Advisory Board to review NCVPS strategic planning, operational initiatives, and readiness for 21st century online learning. The membership of the Advisory Board, as appointed by the State Board, shall consist of key stakeholders across the State with expertise in online learning from a variety of fields, including elementary and secondary education, business, universities and colleges, and the community at large.
"§ 115C‑238.79.  Reporting requirements.
The Department of Public Instruction shall submit an annual report on the operation of NCVPS to the State Board of Education no later than December 1 of each year. The report shall use data from the previous fiscal year and shall include statistics on actual versus projected costs to local school administrative units and charter schools, student enrollment, including enrollment of nonpublic school students and out‑of‑state students, measures of academic achievement, virtual teacher salaries, and the sale of courses to out‑of‑state educational entities."
SECTION 2.(a)  G.S. 115C‑551 reads as rewritten:
"§ 115C‑551.  Voluntary participation in the State programs.
(a)	Any such school may, on a voluntary basis, participate in any State operated or sponsored program which would otherwise be available to such school, including but not limited to the high school competency testing and statewide testing programs.
(b)	Any student enrolled in a school under this Part shall be eligible for a tuition waiver for a maximum of two courses offered by the North Carolina Virtual Public School program each school year pursuant to G.S. 115C‑238.77(b)."
SECTION 2.(b)  G.S. 115C‑559 reads as rewritten:
"§ 115C‑559.  Voluntary participation in the State programs.
(a)	Any such school may, on a voluntary basis, participate in any State operated or sponsored program which would otherwise be available to such school, including but not limited to the high school competency testing and statewide testing programs.
(b)	Any student enrolled in a school under this Part shall be eligible for a tuition waiver for a maximum of two courses offered by the North Carolina Virtual Public School program each school year pursuant to G.S. 115C‑238.77(b)."
SECTION 2.(c)  Part 3 of Article 39 of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C‑565.1.  Enrollment in North Carolina Virtual Public School courses.
A student receiving academic instruction by a homeschool pursuant to this Part shall be eligible for a tuition waiver for a maximum of two courses offered by the North Carolina Virtual Public School program each school year pursuant to G.S. 115C‑238.77(b)."
SECTION 3.  There is appropriated from the General Fund to the Department of Public Instruction the sum of two million six hundred fifty‑five thousand dollars ($2,655,000) for the 2014‑2015 fiscal year in recurring funds to provide for increased enrollment in the North Carolina Virtual Public School program (NCVPS) by nonpublic school students and to cover the instructional costs for up to two NCVPS courses per nonpublic school student for the school year as provided for in this act.
SECTION 4.  The allotment reduction to support the State‑level operations and administration of the NCVPS required by G.S. 115C‑238.76(b), as enacted by this act, shall be in the amount of at least two million eight hundred sixty‑six thousand nine hundred twenty‑three dollars ($2,866,923), as was effective for the 2011‑2012 fiscal year. In accordance with G.S. 115C‑238.76(b), this allotment reduction amount shall be adjusted annually based upon the percentage growth in NCVPS enrollment to ensure the expansion of services due to increased student enrollment in NCVPS courses.
SECTION 5.  This act becomes effective July 1, 2014, and applies beginning with the 2014‑2015 school year.