A BILL TO BE ENTITLED
AN ACT to MAKE VARIOUS CHANGES TO THE LAWs AFFECTING CHARTER SCHOOLS.
The General Assembly of North Carolina enacts:

PART I. CLARIFY REQUIREMENTS OF CHARTER APPLICATION AND RENEWAL
SECTION 1.(a)  G.S. 115C‑218.5(a) reads as rewritten:
"(a)	The State Board may grant final approval of an application if it finds the following:
(1)	The application meets the requirements set out in this Article and such other requirements as may be adopted by the State Board of Education.
(2)	The applicant has the ability to operate the school and would be likely to operate the school in an educationally and economically sound manner.
(3)	Granting the application would achieve one or more of the purposes set out in G.S. 115C‑218.
In reviewing applications for the establishment of charter schools within a local school administrative unit, the State Board is encouraged to give preference to applications that demonstrate the capability to provide comprehensive learning experiences to students identified by the applicants as at risk of academic failure. The Board shall not consider any alleged impact on the local school administrative unit or units in the area served by a charter school when deciding whether to grant, renew, amend, or terminate a charter."
SECTION 1.(b)  G.S. 115C‑218.6(b)(2) reads as rewritten:
"(2)	The charter school's student academic outcomes for the immediately preceding three years have not been comparable to the academic outcomes of students in the local school administrative unit in which the charter school is located. For purposes of this section, if a school's charter results in it providing services to certain targeted subgroups, the school's academic performance shall be judged in comparison to the academic outcomes of students in the same subgroups in the local school administrative unit where the school is located."

PART II. LIMIT ENROLLMENT CAPS TO LOW‑PERFORMING SCHOOLS
SECTION 2.(a)  G.S. 115C‑218.7 reads as rewritten:
"§ 115C‑218.7.  Material revisions of charters.
(a)	A material revision of the provisions of a charter shall be made only upon the approval of the State Board of Education.
(b)	If a charter school has been identified as low‑performing under G.S. 115C‑105.37A, then it shall be considered a material revision of the school's charter to increase its maximum authorized enrollment by more than twenty percent (20%) of the previous year's maximum authorized enrollment. For the purposes of this section, maximum authorized enrollment is as defined in G.S. 115C‑218.8.

	

	

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SECTION 2.(b)  G.S. 115C‑218.8 reads as rewritten:
"§ 115C‑218.8.  Nonmaterial revisions of charters.
It shall not be considered a material revision of a charter and shall not require prior approval of the State Board for a charter school to do any of the following:
(1)	Increase its maximum authorized enrollment during the charter school's second year of operation and annually thereafter, provided the school is not identified as low‑performing under G.S. 115C‑105.37A. The maximum authorized enrollment is the target enrollment number identified in a school's charter. The maximum authorized enrollment may only be updated once per year and shall not decrease based on actual enrollment.
(2)	If a school is low‑performing under G.S. 115C‑105.37A and has planned growth authorized in its charter, increase its maximum authorized enrollment during the charter school's second year of operation and annually thereafter in accordance with planned growth as authorized in its charter.
(3)	Expand to offer one grade higher or lower than the charter school currently offers if the charter school has (i) operated for at least three years, (ii) has not been identified as continually low‑performing as provided in G.S. 115C‑218.94, and (iii) has been in financial compliance as required by the State Board."

PART III. CHARTER SCHOOLS MAY ADOPT A MICRO SCHOOL PROGRAM
SECTION 3.(a)  Article 14A of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C‑218.87.  Micro school program.
(a)	For purposes of this section, a "micro school" is a group of students enrolled in a charter school that have been assigned to attend the school in accordance with this section.
(b)	A charter school may establish a micro school program by including the information required by this section in the school's application submitted under G.S. 115C‑218.1 or, for an existing charter school that does not currently have a micro school program, by submitting a revision to the school's charter containing the information required by this section.
(c)	The State Board of Education shall adopt the rules necessary to delegate to the Office of Charter Schools the authority to approve a revision of an existing school's charter that establishes a micro school program.
(d)	A charter school electing to establish a micro school program shall identify the following in their charter:
(1)	The number and grade level of students that will comprise a micro school, which may combine students of varying grade levels.
(2)	The method of instruction for the micro school which may be conducted in any one or combination of the following methods:
a.	On the charter school campus.
b.	At a location other than the charter school campus.
c.	Through virtual instruction.
(3)	Any specialized curriculum or program to be provided to a micro school.
(4)	The process by which students may be assigned to or withdrawn from a micro school. At a minimum, the process shall include the following:
a.	How a parent may request a student be assigned to a micro school.
b.	The criteria the school will use to determine whether the parent's request for assignment will be granted or denied.
c.	How the school will make a recommendation to a parent that the student be assigned to a micro school.
d.	How a parent may consent to or reject the school's recommendation that the student be assigned. No student shall be assigned to a micro school without parental consent.
(e)	Students and teachers assigned to micro schools are subject to all provisions of the school's charter, except for those provisions which are in conflict with this section.
(f)	No more than fifty percent (50%) of the charter school's total enrollment may be assigned to micro schools."
SECTION 3.(b)  G.S. 115C‑84.3(a) is amended by adding a new subdivision to read:
"(6)	Instruction provided to a micro school under G.S. 115C‑218.87."
SECTION 3.(c)  G.S. 115C‑218.1(b) is amended by adding a new subdivision to read:
"(13a)	If the school intends to have a micro school program, the details of the program as required by G.S. 115C‑218.87."

PART IV. ADD ADMISSIONS PREFERENCES FOR GRADUATES OF CERTAIN PRE‑K PROGRAMS AND FOR CHILDREN OF MILITARY FAMILIES
SECTION 4.  G.S. 115C‑218.45(f) is amended by adding two new subdivisions to read:
"(2b)	Limited to no more than ten percent (10%) of the school's total enrollment, a student who was enrolled for at least 75 consecutive days in the prior semester in a preschool program operated by an entity other than the charter school and the charter school has a written enrollment articulation agreement with the program operator to give the program's students enrollment priority.
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(8)	A student whose parent or legal guardian is on active military duty."

PART V. PROHIBIT DISCRIMINATION OF CHARTER SCHOOL STUDENTS
SECTION 5.  G.S. 115C‑218.45 is amended by adding a new subsection to read:
"(b1)	No local board of education shall discriminate against students applying for admission to any school or special program operated by the local board of education based on the fact that a student is currently attending, or has attended, a charter school."

PART VI. AUTHORIZE COUNTIES TO PROVIDE CAPITAL FUNDS TO CHARTER SCHOOLS
SECTION 6.(a)  G.S. 115C‑218.100(b) reads as rewritten:
"(b)	Distribution of Assets. – Upon dissolution of a charter school, all net assets of the charter school purchased with public funds shall be deemed the property of the local school administrative unit in which the charter school is located, except capital‑sourced assets. For purposes of this subsection, capital‑sourced assets include (i) capital funds provided to a charter school by one or more counties pursuant to G.S. 115C‑218.105(b1) and (ii) net assets purchased or improved with such funds, up to the total amount of the funds provided. Capital‑sourced assets shall be deemed the property of the county or counties providing the funding and, if applicable, divided between the counties in proportion to the funds provided."
SECTION 6.(b)  G.S. 115C‑218.105 is amended by adding the following new subsections to read:
"(b1)	Counties may provide funds to charter schools by direct appropriation as set forth in G.S. 153A‑461. These funds shall be used only for the following purposes:
(1)	The acquisition of real property for school purposes, including, but not limited to, school sites, playgrounds, and athletic fields.
(2)	The acquisition, construction, reconstruction, enlargement, renovation, or replacement of buildings and other structures, including, but not limited to, buildings for classrooms and laboratories, physical and vocational educational purposes, libraries, auditoriums, and gymnasiums.
(3)	The acquisition or replacement of furniture and furnishings, instructional apparatus, technology, data processing equipment, business machines, and similar items of furnishings and equipment.
(b2)	If a charter school uses funds provided in subsection (b1) of this section to acquire or improve property, the amount provided by the county shall be evidenced by a promissory note and secured by a deed of trust on the property acquired or improved by the funds. The county may subordinate the deed of trust to other liens to facilitate the acquisition or improvement of the property secured by the deed of trust. In the event that a charter school repays the county in the amount of the capital funds provided, the county shall, for the property acquired or improved by the funds, execute and file a deed of release or other documentation of satisfaction showing the charter school repaid the county in the amount of the capital funds provided."
SECTION 6.(c)  G.S. 153A‑149(c) reads as rewritten:
"(c)	Each county may levy property taxes for one or more of the purposes listed in this subsection up to a combined rate of one dollar and fifty cents ($1.50) on the one hundred dollars ($100.00) appraised value of property subject to taxation. Authorized purposes subject to the rate limitation are:
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(38)	Charter Schools. – To provide capital funds for charter schools as authorized by G.S. 153A‑461."
SECTION 6.(d)  Article 23 of Chapter 153A of the General Statutes is amended by adding a new section to read:
"§ 153A‑461.  Charter schools.
Each county is authorized to appropriate funds and lease real property to schools chartered under Article 14A of Chapter 115C of the General Statutes. Counties may provide funds only for the purposes set forth in G.S. 115C‑218.105(b1)."

PART VII. COMPARABLE PER STUDENT FUNDING
SECTION 7.(a)  Article 14A of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C‑218.107.  Charter school funding comparability.
It is the intent of the General Assembly to ensure that State and local funds for students attending charter schools shall be provided in a manner that results in per‑pupil funding approximately equal to that provided for students attending other public school units."
SECTION 7.(b)  G.S. 115C‑218.105 reads as rewritten:
"§ 115C‑218.105.  State and local funds for a charter school.
(a)	The State Board of Education shall allocate to each charter school:
(1)	An amount equal to the average per pupil allocation for average daily membership from the local school administrative unit allotments in which the charter school is located for the number of students actually enrolled in the school, up to the maximum authorized enrollment, except for the allocation for children with disabilities and for the allocation for children with limited English proficiency;
(2)	An additional amount for each child attending the charter school who is a child with disabilities; and
(3)	An additional amount for children with limited English proficiency attending the charter school, based on a formula adopted by the State Board.
In accordance with G.S. 115C‑218.7 and G.S. 115C‑218.8, the State Board shall allow for annual adjustments to the amount allocated to a charter school based on actual enrollment, up to the maximum authorized enrollment.
In the event a child with disabilities leaves the charter school and enrolls in a public school during the first 60 school days in the school year, the charter school shall return a pro rata amount of funds allocated for that child to the State Board, and the State Board shall reallocate those funds to the local school administrative unit in which the public school is located. In the event a child with disabilities enrolls in a charter school during the first 60 school days in the school year, the State Board shall allocate to the charter school the pro rata amount of additional funds for children with disabilities.
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(c)	If a student attends a charter school, the local school administrative unit in which the child resides shall transfer to the charter school an amount equal to the per pupil share of the local current expense fund of the local school administrative unit for the fiscal year. The per pupil share of the local current expense fund shall be transferred to the charter school within 30 days of the receipt of monies into the local current expense fund. The local school administrative unit and charter school may use the process for mediation of differences between the State Board and a charter school provided in G.S. 115C‑218.95(d) to resolve differences on calculation and transference of the per pupil share of the local current expense fund."
SECTION 7.(c)  G.S. 115C‑426(c) reads as rewritten:
"(c)	The uniform budget format shall require the following funds:
(1)	The State Public School Fund.
(2)	The local current expense fund.
(3)	The capital outlay fund.
In addition, other funds may be used to account for trust funds, federal grants restricted as to use, and special programs.
Each local school administrative unit shall maintain those funds shown in the uniform budget format that are applicable to its operations."

PART VIII. EFFECTIVE DATE
SECTION 8.  This act is effective when it becomes law and applies beginning with the 2023‑2024 school year.