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‑218.94, 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‑218.94. 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. allow charter schools to admit out‑of‑state students and foreign exchange students
SECTION 3.(a)  G.S. 115C‑218.45 is amended by adding the following new subsections to read:
"(h1)	Any charter school that is unable to fill its current enrollment with students qualified under the laws of this State for admission to a public school may enroll out‑of‑state students who are domiciliaries of other states. The charter school shall charge the out‑of‑state students a tuition amount of at least fifty percent (50%) of the total of the per pupil allocation of the local appropriation for the county in which the charter school is located and the per pupil State appropriation for that school year but no more than one hundred percent (100%) of the total of the per pupil allocation of the local appropriation for the county in which the charter school is located and the per pupil State appropriation for that school year. The number of out‑of‑state students who are domiciliaries of other states who are enrolled in a charter school may not exceed ten percent (10%) of the total number of students enrolled in the charter school.
(h2)	For the purposes of this subsection, a foreign exchange student is a student who is domiciled in a foreign country and has come to the United States on a valid student or exchange visa pursuant to the Immigration and Nationality Act, 8 U.S.C. § 1101, et seq. A charter school may enroll foreign exchange students as follows:
(1)	No more than two foreign exchange students per high school grades nine through 12 shall be enrolled in any given school year at the charter school.
(2)	The charter school may charge the foreign exchange students a tuition amount of at least fifty percent (50%) of the total of the per pupil allocation of the local appropriation for the county in which the charter school is located and the per pupil State appropriation for that school year but no more than one hundred percent (100%) of the total of the per pupil allocation of the local appropriation for the county in which the charter school is located and the per pupil State appropriation for that school year.
(3)	Foreign exchange students shall not count toward the enrollment capacity or cap for any program, class, building, or grade levels for grades nine through 12 and shall not be subject to any lottery process used by the charter school for enrollment."
SECTION 3.(b)  This section is effective when it becomes law and applies beginning with the admissions process for the 2024‑2025 school year.

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‑47 is amended by adding a new subdivision to read:
"(68)	To Provide Equal Access to All Residents of the Local School Administrative Unit. – A local board of education shall not consider a student's current or prior enrollment in a charter school in any criteria used by the local board for determination of admissions or eligibility to any school or special program."

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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PART VIII. classification of charter and nonpublic schools for interscholastic athletics
SECTION 8.(a)  G.S. 115C‑407.55 reads as rewritten:
"§ 115C‑407.55.  Rules for high school interscholastic athletic activities.
The State Board of Education shall adopt rules governing high school interscholastic athletic activities conducted by public school units that include the following:
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(5)	Administrative rules. – These rules shall govern classifications of schools into divisions and conferences, administration of games, and requirements for coaching, officiating, sportsmanship, and scheduling of seasons. The State Board may by rule delegate the authority to establish all or a portion of the administrative rules to an administering organization, however all rules shall be consistent with the requirements of this subdivision. The rules shall require that charter schools and nonpublic schools be classified as follows:
a.	The charter or nonpublic school shall determine, based on the address of the student, the school in the local school administrative unit the student would be assigned to attend by the local board of education. The charter or nonpublic school shall submit to the administering organization the following information:
1.	The names of all schools to which the students would have been assigned.
2.	The percentage of students who would have attended each of those schools.
b.	The charter or nonpublic school classification shall be based on the classification of the school or schools that the largest percentage of the student body of that school would have been assigned to attend in any local school administrative unit.
c.	A charter or nonpublic school may apply for a hardship waiver based on the school's classification made in accordance with this subdivision.
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SECTION 8.(b)  The State Board of Education shall adopt emergency rules to implement the requirements of this section for the 2023‑2024 school year.

PART IX. EFFECTIVE DATE
SECTION 9.  Except as otherwise provided, this act is effective when it becomes law and applies beginning with the 2023‑2024 school year.