A BILL TO BE ENTITLED
AN ACT to grant additional budget flexibility to local school administrative units to enable them to maximize student achievement.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 115C‑105.25 reads as rewritten:
"§ 115C‑105.25.  Budget flexibility.
(a)	Consistent with improving student performance, a local board shall provide maximum flexibility to schools in the use of funds to enable the schools to accomplish their goals.
(b)	The State Board of Education shall grant maximum flexibility to local school administrative units regarding the expenditure of State funds. Local boards of education may make transfers between funding allotment categories subject to the following limitations:
			(3)	No funds shall be transferred into the central office administration allotment category.
(4)	Funds allotted for children with disabilities may be transferred only as permitted by federal law and the conditions of federal grants.(5)	Funds allotted for classroom teachers may be transferred only to the teacher assistant category.
(5a)	Positions allocated for classroom teachers may be converted to dollar equivalents to contract for visiting international exchange teachers. These positions shall be converted at the statewide average salary for classroom teachers, including benefits. The converted funds shall be used only to cover the costs associated with bringing visiting international exchange teachers to the local school administrative unit through a State‑approved visiting international exchange teacher program and supporting the visiting exchange teachers.
(5b)	Funds allotted for teacher assistants may be transferred only to the classroom teacher allotment category.
(6)	Funds allotted for career and technical education may be transferred only as permitted by federal law and the conditions of federal grants.			"
SECTION 2.  G.S. 115C‑301 reads as rewritten:
"§ 115C‑301.  Allocation of teachers; class size.
(a)	Request for Funds. – The State Board of Education, based upon the reports of local boards of education and such other information as the State Board may require from local boards, shall determine for each local school administrative unit the number of teachers and other instructional personnel to be included in the State budget request.
(b)	Allocation of Positions. – The State Board of Education is authorized to adopt rules to allot instructional personnel and teachers, within funds appropriated.
(c)	Maximum Class Size. – The average class size for kindergarten through third grade in a local school administrative unit shall at no time exceed the funded allotment ratio of teachers to students in kindergarten through third grade. At the end of the second school month and for the remainder of the school year, the size of an individual class in kindergarten through third grade shall not exceed the allotment ratio by more than three students.  In grades four through 12, local school administrative units shall have the maximum flexibility to use allotted teacher positions to maximize student achievement.		(f)	Second Month Reports. – At the end of the second month of each school year, each local board of education, through the superintendent, shall file a report for each school within the school unit with the State Board of Education. The report shall be filed in a format prescribed by the State Board of Education and shall include the organization for each school, the duties of each teacher, the size of each class, and such other information as the State Board may require. As of February 1 each year, local boards of education, through the superintendent, shall report all exceptions to individual class size maximums in kindergarten through third grade that occur at that time.
(g)	Waivers and Allotment Adjustments. – Local boards of education shall report exceptions to the class size standards set out for kindergarten through third grade and significant increases in class size at other grade levels to the State Board and shall request allotment adjustments at any grade level, waivers from the standardsfor kindergarten through third grade, or both. Within 45 days of receipt of reports, the State Board of Education, within funds available, may grant waivers for the excess class size  in kindergarten through third grade. The State Board may also allot additional positions if (i) a significant increase in students at any grade level resulted from exceptional circumstances, emergencies, acts of God, large changes in student population, organizational problems caused by remote geographic location, or classes organized for a solitary curricular area and (ii) the local board cannot organizationally manage the increase.
		
(h)	State Board Rules. – The State Board of Education shall adopt rules necessary for the implementation of the class size and allotment adjustment provisions.
(i)	Penalty for Noncompliance. – If the State Board of Education determines that a local superintendent has willfully failed to comply with the requirements of this section, no State funds shall be allocated to pay the superintendent's salary for the period of time the superintendent is in noncompliance."
SECTION 3.  G.S. 115C‑47(10) reads as rewritten:
"§ 115C‑47.  Powers and duties generally.
In addition to the powers and duties designated in G.S. 115C‑36, local boards of education shall have the power or duty:
…
(10)	To Assure Appropriate Class Size. – It shall be the responsibility of local boards of education to assure that the class size requirements set forth in G.S. 115C‑301 for kindergarten through third grade are met. Any teacher who believes that the requirements of G.S. 115C‑301 have not been met shall make a report to the principal and superintendent, and the superintendent shall immediately determine whether the requirements have in fact not been met. If the superintendent determines the requirements have not been met, he shall make a report to the next local board of education meeting. The local board of education shall take action to meet the requirements of the statute. If the local board cannot organizationally correct the exception, it shall immediately apply to the State Board of Education for additional personnel or a waiver of the class size requirements, as provided in G.S. 115C‑301(g).
		Upon notification from the State Board of Education that the reported exception does not qualify for an allotment adjustment or a waiver under provisions of G.S. 115C‑301, the local board, within 30 days, shall take action necessary to correct the exception.
		At the end of the second month of each school year, the local board of education, through the superintendent, shall file a report with the State Board of Education, in a format prescribed by the State Board of Education, describing the organization of each school, the duties of each teacher, and the size of each class. As of February 1 each year, local boards of education, through the superintendent, shall report all exceptions to individual class size maximums that exist at that time.
		In addition to assuring that the requirements of G.S. 115C‑301 are met, each local board of education shall also have the duty to provide an adequate number of classrooms to meet the requirements of that statute."
SECTION 4.  G.S. 115C‑276(k) reads as rewritten:
"(k)	To Submit Organization Reports and Other Information to the State Board. – Each year the superintendent of each local school administrative unit shall submit to the State Board of Education statistical reports, certified by the chairman of the board of education, showing the organization of the schools in his unit and any additional information the State Board may require. At the end of the second month of school each year, local boards of education, through the superintendent, shall report school organization, employees' duties, and class sizes to the State Board of Education. As of February 1 each year, local boards of education, through the superintendent, shall report all exceptions to individual class size maximums in kindergarten through third grade that occur at that time."
SECTION 5.  This act becomes effective July 1, 2013.