Part I

Amends GS 115C-218.5 (pertaining to final approval of applications for charter schools) to prohibit the State Board of Education (Board) from considering any alleged impact on the local school administrative unit(s) in the area served by the charter school when deciding whether to grant, renew, amend, or terminate a charter. 

Amends GS 115C-218.6(b)(2), pertaining to when a charter school’s diminished academic outcomes would bar the Board from renewing a charter school’s charter because those outcomes have not been comparable to the academic outcomes of the students in the local school administrative unit, as follows. Specifies that, if a school's charter results in it providing services to certain targeted subgroups, the school's academic performance will 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

Amends GS 115C-218.7 (pertaining to material revisions of charters) as to limit enrollment caps to low-performing schools as follows. Deletes the entirety of the text in subsection GS115C-218.7(b)-(d) (barring enrollment growth of greater than 20% for a low-performing charter school and setting forth circumstances when enrollment growth will be allowed for high-performing charter schools, including formulae for determining actual enrollment and maximum allowed enrollment, documentation requirements, and requests for increased maximum enrollment requests due to capital expansions) and replaces it with the following subsection(b). Specifies that if a charter school has been identified as low-performing under state law, then it will be  considered a material revision of the school's charter to increase its maximum authorized enrollment by more than 20% of the previous year's maximum authorized enrollment. Incorporates new definition of maximum authorized enrollment from GS 115C-218.8 (pertaining to nonmaterial revisions of charters) as the target enrollment defined in a school’s charter. Makes conforming deletions.

Amends two of the circumstances under GS 115C-218.8 that describe nonmaterial changes to a charter school’s charter as follows. Amends GS 115C-218.8(1) to specify that it is not a material revision of a charter school’s charter to increase its maximum authorized enrollment during its second year of operation and annually thereafter so long as the charter school is not identified as low performing under GS 115C-105.37A (pertaining to continually low performing schools). Specifies that a charter school may only update its maximum authorized enrollment once per year and cannot decrease based on actual enrollment. Sets forth new definition of maximum authorized enrollment as discussed above. (Currently, that nonmaterial change is only if charter school increases its enrollment in accordance with the standards in procedures set forth in current version of GS 115C-218.7, which will be deleted by the act as specified above). Amends GS 115C-218.8(2) to specify that that if a school is designated as low performing under GS 105.37A and has a planned growth authorized in its charter, it is a nonmaterial change to the school’s charter if it increases its maximum authorized enrollment during the school’s second year of operation and annually thereafter in line with that planned growth. (Currently, there is no reference to low performing schools with a planned growth authorized in its charter or reference to maximum authorized growth in GS 115C-218.8(2)).

Part III

Enacts new GS 115C-218.87, establishing micro school programs in charter schools. Defines micro school as a group of students enrolled in a  charter school that have been assigned to attend the school in accordance with this statute. Specifies that no more than 50% of the charter school’s total enrollment may be assigned to micro schools.  Permits charter schools to apply for a micro school program either in its initial charter application or by a submitting a revision to the school’s charter including the following information: (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: (i) on the charter school campus. (ii) at a location other than the charter school campus; or (iii) 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. Specifies that at a minimum, the process will include the following: (i) how a parent may request a student be assigned to a micro school; (ii) the criteria the school will use to determine whether the parent's request for assignment will be granted or denied; (iii) how the school will make a recommendation to a parent that the student be assigned to a micro school; (iv) how a parent may consent to or reject the school's recommendation that the student be assigned. Specifies that no student will be assigned to a micro school without parental consent. Specifies that students and teachers assigned to micro schools must comply with the charter school’s charter, except those in conflict with GS 115C-218.87. Makes conforming changes to GS 115C-84.3 (remote instruction) and GS 115C-218.1 (charter school applications). Requires the Board to adopt rules to delegate to the Office of Charter Schools (OCS) the authority to approve a revision of an existing school’s charter that establishes a micro school program.

Part IV

Amends GS 115C-218.45(f) (pertaining to enrollment priority for charter schools) by enacting two new subdivisions that add admissions preferences for graduates of certain pre-k programs and for military families as follows. Specifies charter schools may give enrollment preferences to any 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 so long as the charter school has a written enrollment articulation agreement with the program operator to give the program’s students enrollment priority and such enrollments are limited to no more than 10% of the school’s total enrollment. Specifies that charter schools may give enrollment preference to a student whose parent or legal guardian is on active military duty. 

Part V

Enacts new subsection GS 115C-218.45(b1) which prohibits a local board of education from discriminating 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

Enacts new GS 153A-461 which authorizes counties to provide funds to charter schools by direct appropriation for certain specified purposes and to lease real property to those schools. Amends GS 115C-218.105 to enact subsections (b1) and (b2) as follows. Subsection (b1) sets forth the following sole purposes for which counties may provide funds discussed above to charter schools: (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. Subsection (b2) specifies promissory note and deed of trust requirements for when charter schools use funds for real property, including authority granted to the county to subordinate the deed to other liens. Provides for deed of release upon repayment by charter school.   

Amends GS 115C-218.100(b) (pertaining to distribution of assets upon dissolution of a charter school) as follows. Exempts capital-sourced assets from those net assets of a charter school that is deemed to be the property of a local school administrative unit in the district where the school is located upon dissolution of the charter school. Specifies that capital-source assets include (1) capital funds provided to a charter school by one or more counties under new subsection GS115C-218.105(b1), discussed above and (2) net assets purchased or improved with such funds, up to the total amount of the funds provided. Specifies that capital-sourced assets are deemed the property of the county or counties providing the funding and, if applicable, divided between the counties in proportion to the funds provided.

Makes conforming changes to GS 153A-149 (county property taxes) to allow property taxes to be used for capital funds to charter schools. 

Part VII

Enacts new GS 115C-218.107 pertaining to charter school funding comparability, setting forth the General Assembly’s intent that State and local funds for students attending charter schools is to be provided in a manner that results in per-pupil funding roughly equal to that provided to students attending other public school units. Amends GS 115C-218.105 (pertaining to state and local funds for a charter school) as follows. Changes the formula for the base amount that the Board must allocate to each charter school for students who are not disabled or who do not have limited English proficiency to be 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 based on the number of students actually enrolled in the school, up to the maximum authorized enrollment. (Currently, that formula is based on each child attending the charter school.) Specifies that the Board will allow for annual adjustments to the amount allocated to a charter school based on the number of students actually enrolled in the school, up to the maximum authorized enrollment. (Currently, the Board must allow for annual adjustments based on enrollment growth in school years following the school’s initial year of operation). Deletes provisions stipulating that if a local school unit is required to transfer funds to a charter school for a child attending that school, then any source of that funds that consists of revenue derived from supplemental taxes can only be transferred to a charter school located in the tax district for which those taxes are levied and where the student resides. Amends GS 115C-218.426(c) (pertaining to the uniform budget format) to narrow the scope of permitted uses for other funds to account for trust funds, federal grants restricted as to use, and special programs. (Currently, those funds may be used for reimbursements, including indirect costs, fees for actual costs, tuition, sales tax revenues distributed using the ad valorem method pursuant to state law (GS 105-472(b)(2)), sales tax refunds, gifts and grants restricted as to use, trust funds, federal appropriations made directly to local school administrative units, municipal appropriations made directly to local school administrative units under GS 160A-700 and funds received for prekindergarten programs.) Deletes language specifying that the appropriation or use of fund balance or interest income by a local school administrative unit is not construed as a local current expense appropriation included as a part of the local current expense fund.

Applies beginning with the 2023-2024 school year.