Part I

Repeals Subsection 8.3(b) of SL 2011-145 (requiring the State Board of Community Colleges [SBCC] to allocate formula funds appropriated to support curriculum instruction and the occupational education component of continuing education in a certain way). Repeals Subsection 10.4(a) of SL 2013-360 (establishing community college funding as based on the number of full-time equivalent (FTE) students).

Requires the SBCC to revise the funding formula for community colleges and allocate funds accordingly, beginning with the 2024-25 fiscal year, according to the following minimum criteria: (1) each community college will continue to receive a base allocation of funds; (2) in addition to the base allocation of funds, funds shall be provided to community colleges based on the number of FTE students enrolled in the following: (i) curriculum, workforce continuing education, and Basic Skills courses and (ii) courses and programming conducted under the Customized Training Program and the Small Business Center Network; and (3) funds allocated according to prong two must be weighted based on the workforce sector of each course, as determined by the SBCC. In making its determinations, the SBCC must consider salary data and labor market demand for the applicable workforce sector.  Amends GS 115D-5 (administration of institutions by SBCC), to require the SBCC to review and revise, as necessary, its workforce sector designations for curriculum, workforce continuing education, and Basic Skills courses at community colleges by July 15, 2027, and every three years thereafter.  Requires the Community Colleges System Office (Office), by April 1, 2026, to report to the specified NCGA committee on the revisions to its funding formula, including the structure of the revised formula, the process for implementing the revised formula, and any recommended changes to the revised formula. Appropriates $93,019,556 from the General Fund to the SBCC for the 2024-25 fiscal year in recurring funds to implement the revisions to the funding formula required above.

Part II

Amends GS 115D-31 (state financial support of institutions), when receipts for community college tuition and fees exceed the amount certified in General Fund Codes at the end of a fiscal year, to allow SBCC to allocate those receipts to the community colleges for operating costs according to a formula adopted by the SBCC (currently, requires the SBCC to transfer the amount of receipts and fees above those budgeted to the Enrollment Growth Reserve). Makes conforming changes.

Adds new GS 115D-31.4, establishing the Enrollment Increase Reserve (Reserve), to be administered by the SBCC. Specifies the purpose of the Reserve is to allow the SBCC to provide funds to community colleges to account for enrollment increases beyond budgeted enrollment levels.  Provides for monies in the Reserve to consist of funds appropriated by the General Assembly  in its Current Operations Appropriations Act for a fiscal year. Directs the SBCC to include in its annual enrollment request the appropriation to the Reserve needed to fund enrollment increases in the next fiscal year. Allows the SBCC to allocate monies from the Reserve to a community college with an eligible increase in FTE enrollment according to a formula adopted by the SBCC.  Specifies that an increase in FTE enrollment is either (1) an increase in FTE enrollment of more than 325 students or (2) an increase in FTE enrollment of more than 5% of the budgeted enrollment level in any of the following course categories: curriculum, workforce continuing education, or basic skills. Specifies that monies in the Reserve do not revert but instead remain available for the specified purposes. Makes conforming changes to GS 115D-31 (State financial support for community colleges) to include reference to the Reserve. Appropriates $6 million in nonrecurring funds for 2024-25 from the General Fund to the Reserve to be used in accordance with the act.

Part III

Adds new GS 115D-39.2, concerning local tuition fee surcharges, allowing a community college to implement a surcharge for tuition for curriculum courses and registration fees for workforce continuing education courses of up to 10% of the statewide tuition rate or fee rate. Specifies that all students enrolled in a course are subject to the surcharge, except for students for whom tuition and registration are waived by law or regulation. Specifies that the funds collected can only be used to support instruction in curriculum, workforce continuing education, or Basic Skills courses. Requires the SBCC, beginning by no later than February 15, 2025, and annually thereafter, to report to the specified NCGA committee on all expenditures made with the funds collected pursuant to GS 115D-39.2, including at minimum an analysis of expenditures disaggregated on the basis of curriculum, workforce continuing education, and Basic Skills courses. Requires the SBCC to adopt rules to implement GS 115D-39.2.

Changes the title of GS 115D-39.1 from “Tuition surcharge” to “Tuition surcharge for a new instructional program.”

Effective July 1, 2024.