A BILL TO BE ENTITLED
AN ACT to restore the State sales tax refund for schools; extend the state board of education rule making dates; provide for a Rule making exemption for teacher licensure; expand the use of funds in the textbook and digital resources allotment to include electronic devices; and modify certain provisions related to class size, as recommended by the State Board of Education.
The General Assembly of North Carolina enacts:

Part I. State Sales Tax Refund for Schools
SECTION 1.1.  Subdivision (2b) of subsection (c) of G.S. 105‑164.14 is reenacted as it existed immediately before its repeal.
SECTION 1.2.  Subdivision (2c) of subsection (c) of G.S. 105‑164.14 is reenacted as it existed immediately before its repeal.
SECTION 1.3.  G.S. 105‑467(b) reads as rewritten:
"(b)	Exemptions and Refunds. – The State exemptions and exclusions contained in Article 5 of Subchapter I of this Chapter, except for the exemption for food in G.S. 105‑164.13B, apply to the local sales and use tax authorized to be levied and imposed under this Article. The State refund provisions contained in G.S. 105‑164.14 and G.S. 105‑164.14A apply to the local sales and use tax authorized to be levied and imposed under this Article. A refund of an excessive or erroneous State sales tax collection allowed under G.S. 105‑164.11 and a refund of State sales tax paid on a rescinded sale or cancelled service contract under G.S. 105‑164.11A apply to the local sales and use tax authorized to be levied and imposed under this Article. The aggregate annual local refund amount allowed an entity under G.S. 105‑164.14(b) for the State's fiscal year may not exceed thirteen million three hundred thousand dollars ($13,300,000). A 
request for a refund is due in the same time and manner as provided in G.S. 105‑164.14(c). Refunds applied for more than three years after the due date are barred."
SECTION 1.4.  Effective July 1, 2019, G.S. 105‑164.44H is repealed.
SECTION 1.5.  Except as otherwise provided, this Part becomes effective July 1, 2019, and applies to sales made on or after that date.

Part II. State Board of Education Rule Making
SECTION 2.1.  G.S. 150B‑1(d) reads as rewritten:
"(d)	Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:
…
(30)	The State Board of Education in administering the provisions of Article 17E of Chapter 115C of the General Statutes."
SECTION 2.2.  G.S. 115C‑2 reads as rewritten:
"§ 115C‑2.  Administrative procedure.
With the exception of action taken by the State Board of Education in administering the provisions of Article 17E of this Chapter, all action of agencies taken pursuant to this Chapter, as agency is defined in G.S. 150B‑2, is subject to the requirements of the Administrative Procedure Act, Chapter 150B of the General Statutes."
SECTION 2.3.  Section 27(b) of S.L. 2018‑114 reads as rewritten:
"SECTION 27.(b)  The General Assembly finds that the North Carolina Supreme Court, in North Carolina State Board of Education v. State of North Carolina and North Carolina Rules Review Commission, No. 110PA16‑2 (June 8, 2018), affirmed the authority of the General Assembly to delegate authority to the Rules Review Commission to review and approve the administrative rules that are proposed by the State Board of Education for codification. To ensure that administration of the free public schools shall continue without interruption, the existing policies of the State Board of Education subject to rule making as provided in Chapter 150B of the General Statutes shall be deemed interim rules so long as they do not conflict with any provisions of the General Statutes. Any interim rule authorized by this section shall become null and void May 30, 2020, if the State Board of Education has failed to publish a notice of text in the North Carolina Register to adopt that interim rule as a permanent rule, as required by G.S. 150B‑21.2. Any interim rule authorized by this section shall become null and void May 30, 2021, if the State Board of Education has failed to adopt that interim rule as a permanent rule by that date in accordance with Article 2A of Chapter 150B of the General Statutes."

Part III. expand Textbook and Digital Resources Allotment to include electronic devices
SECTION 3.1.  G.S. 115C‑105.25(b)(12) reads as rewritten:
"(12)	Funds allotted for textbooks and digital resources may only be used to acquire, by purchase, rental, or lease, (i) textbooks, which includes technology‑based programs, (ii) other digital resources to be used in the learning process, and (iii) electronic equipment used to access technology‑based programs and digital resources, such as online curriculum and instructional content. These funds shall not be transferred out of the allotment for any other purpose."
SECTION 3.2.  Section 8.18(b) of S.L. 2015‑241 reads as rewritten:
"SECTION 8.18.(b)  The State Board of Education shall establish the purposes for which the funds within the new Textbooks and Digital Resources funding allotment may be used for as follows: to acquire by purchase, rental, or lease, (i) textbooks, which includes technology‑based programs, (ii) other digital resources to be used in the learning process, and (iii) electronic equipment used to access technology‑based programs and digital resources, such as online curriculum and instructional content."
SECTION 3.3.  This Part becomes effective July 1, 2019.
part iv. class size changes
SECTION 4.1  G.S. 115C‑301 reads as rewritten:
"§ 115C‑301.  Allocation of teachers; class size.
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(c)	Maximum Class Size for Kindergarten Through Third Grade. – The average class size for kindergarten through third grade in a local school administrative unit shall not 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. Additionally, 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. The funded class size allotment ratio for kindergarten through third grade shall be as follows:
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(g)	Waivers and Allotment Adjustments. – Local boards of education shall report exceptions to the class size requirements 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 requirements for kindergarten through third grade, or both. Within 45 days of receipt of reports, the State Board of Education, within funds available, may allot additional positions at any grade level. The State Board shall not grant waivers for excess class size in kindergarten through third grade, except under the following circumstances:
(1)	Inadequate classroom space or facilities that would require a facility expansion or relocation.
(2)	An unanticipated increase in student population of an individual school in excess of two percent (2%) of the average daily membership of that school.
(3)	Organizational problems in geographically isolated local school administrative units in which the average daily membership is less than one and one‑half per square mile.
(4)	Classes organized for a solitary curricular area.
(5)	A charter school closure.
(6)	A shortage of qualified, licensed teachers available to teach in the grade level for the number of classrooms required at the individual school.
The State Board shall report on all waivers to the Joint Legislative Commission on Governmental Operations within 30 days of the grant of the waiver. The report shall include the local school administrative unit, school, and class or classes for which the waiver was granted, the statutory grounds for the waiver, and the terms of the waiver. A waiver for excess class size in kindergarten through third grade shall not become effective until the State Board submits the report to the Joint Legislative Commission on Governmental Operations.
Upon notification from the State Board that the reported exception does not qualify for an allotment adjustment or a waiver, the local board of education shall take action to correct the exception within 30 days. Within 60 days of notification by the State Board, the Superintendent of Public Instruction shall request an updated report from the local board of education on the size of each class in kindergarten through third grade for each school within the local school administrative unit. If the Superintendent of Public Instruction finds that a local board of education is continuing to exceed class size requirements, the State Board may impose the penalty set forth in subsection (j) of this section until such time the schools in the unit meet the class size requirements for kindergarten through third grade.
…."
SECTION 4.2  Section 2(b) of S.L. 2018‑2 reads as rewritten:
"SECTION 2.(b)  Notwithstanding G.S. 115C‑301, as amended by this act, and any other provision of law, for the 2019‑2020 school year, the average class size for kindergarten through third grade in a local school administrative unit shall not exceed one teacher per 19 students at the end of the second school month and for the remainder of the school year. Additionally 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 one teacher per 22 students."
SECTION 4.3  Section 2(c) of S.L. 2018‑2 reads as rewritten:
"SECTION 2.(c)  Notwithstanding G.S. 115C‑301, as amended by this act, and any other provision of law, for the 2020‑2021 school year, the average class size for kindergarten through third grade in a local school administrative unit shall not exceed one teacher per 18 students at the end of the second school month and for the remainder of the school year. Additionally, 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 one teacher per 21 students."
SECTION 4.4  This part becomes effective July 1, 2019. Section 4.1 of this part applies beginning with the 2019‑2020 school year.

Part v. Effective Date
SECTION 5.  Except as otherwise provided, this act is effective when it becomes law.