Identical to S 406, filed 3/29/23.

Part I.

Repeals GS 115C-562.1(3), (3c), (5c), and (5e), thereby removing the definitions of eligible students, full-time student, part-time student, and reserve for opportunity scholarships. Amends GS 151C-562.1 to define eligible student for the opportunity scholarships as a student residing in state who has not yet received a high school diploma and meets the following: (1) is eligible to attend a North Carolina public school, provides that a child who is age 4 on or before April 16 is eligible to attend the following school year if the principal, or equivalent, of the school in which the child seeks to enroll finds that  the student meets the requirements and those findings are submitted to the State Education Assistance Authority (Authority); (2) has not been enrolled in a postsecondary institution as a full-time student taking at least 12 hours of academic credit; and (3) has not been placed in a nonpublic school or facility by a public agency at public expense.

Amends GS 115C-562.2 to allow scholarships to be used to attend any nonpublic school on either a full or part-time basis. Amends the amounts of the scholarships so that they are now as follows, beginning with the 2023-24 school year: (1) for students residing in households with an income level not in excess of the amount required for the student to qualify for the federal free or reduced-price lunch program, per year per eligible student, an amount of up to 100% of the average State per pupil allocation for average daily  membership in the prior fiscal year; (2) for students residing in households with an income level between the amount required for the student to qualify for the federal free or reduced-price lunch program and not in excess of 200% of that amount, per year per eligible student, an amount of up to 90% of the average State per pupil allocation for average daily membership in the prior fiscal year; (3) for students residing in households with an income level of between 200% of the amount required for the student to qualify for the federal free or reduced-price lunch program and not in excess of 450% of that amount, per year per eligible student, an amount of up to 60% of the average State per pupil allocation for average daily membership in the prior fiscal year; and (4) for all students, per year per eligible student, an amount of up to 45% of the average State per pupil allocation for average daily membership in the prior fiscal year, unless the student qualifies for a higher amount above. Caps grants per year per eligible student, at 100% of the average State per pupil allocation for average daily membership in the prior fiscal year, and prohibits a grant from exceeding the required tuition and fees for the nonpublic school the eligible student will attend. Allows tuition and fees for a nonpublic school to include tuition and fees for books, transportation, equipment, or other required items.

Amends GS 115C-562.3 to require the Authority to establish a domicile determination system to verify the domicile requirements of GS 115C-366 (concerning the assignment of student to a particular school) and requires the establishment of rules for the determination of domicile. Requires the specified divisions, departments, board, and individuals to cooperate with the Authority in verifying evidence submitted to the Authority for the purposes of establishing the required domicile for State residency. Sets out items that the Authority must accept as evidence of domicile in the state. Requires the Authority to select and verify 4% (was, 6%) of applications for scholarship grant funds. Makes conforming changes.

Amends GS 115C-562.8 by changing the Opportunity Scholarship Grant Fund Reserve to the Opportunity Scholarship Grant Fund (Grant Fund). Increases the amounts that are to be appropriated from the General Fund to the Grant Fund for fiscal years 2025-26 and thereafter. Makes additional clarifying and technical changes.

Requires as part of a student's application for a scholarship grant for the 2023-24 and 2024-25 school years, a parent to certify to the Authority that the domicile requirements are met for eligibility purposes in lieu of submitting evidence to the Authority through a domicile determination system. Requires the Authority to select 6% of the applications for the 2023-24 and 2024-25 school years to verify the domicile requirements are met. Specifies what documents the Authority may accept. Allows revoking the scholarship if a parent does not cooperate with verification. Subjects a parent to administrative, civil, or criminal penalties for falsifying information. 

Requires the Authority, by October 15, 2023, to transfer any unexpended balance remaining in the Opportunity Scholarship Grant Fund Reserve, as of June 30, 2023, to the Opportunity Scholarship Grant Fund. Requires for the 2023-24 year that these funds be used for the purposes in GS 115C-562.8 (the Opportunity Scholarship Grant Fund Reserve). Requires for the 2023-24 fiscal year, that any funds remaining in the Grant Fund following (1) the award of scholarship grants to all eligible students for the  2023-24 school year and (2) the use of funds as provided in GS 115C-562.8(d)(1) at the end of the fiscal year are not carried forward and instead revert to the General Fund.

Appropriates $121 million from the General Fund to the Opportunity Scholarship Grant Fund for the 2024-25 fiscal year.

Effective June 30, 2023, and applies to applications for scholarship grants beginning with the 2023-24 school year.

Part II.

Amends GS 115C-12(9d)a, which allows the State Board of Education (Board) to develop exit standards for graduation from high school, by adding the requirement that the Board develop a sequence of courses available in all public school units to allow a student to complete the credits required for graduation in three years. Requires a student's transcript to indicate if the student graduates from a public high school within three years of entering the ninth grade. Prohibits requiring any additional credits beyond those mandated by the Board. 

Repeals GS 115C-47(54a), which prohibited a local board of education from requiring a high school graduation project as a condition of graduation from high school unless the board provides from local funds a method of reimbursement of up to $75 for expenses related to the high school graduation project for any student identified as an economically disadvantaged student. Makes conforming changes to GS 115C-12.

Amends GS 115C-12 by amending the State Board's duty to encourage early entry of motivated students into college programs to also include two-year, in addition to four-year, postsecondary programs. Also requires directing school guidance counselors to make students aware of the new early graduate scholarships.

Amends GS 115C-47, applicable to local boards of education; GS 115C-218.85, applicable to charter schools; and GS 115C-238.66 applicable to regional schools, to require offering a sequence of courses in accordance with GS 115C-12(9d) and advise students using this sequence to graduate within three years of entering the ninth grade of the availability of early graduate scholarships.

Requires the governing body of a public school unit to report to the Department of Public Instruction on the number of rising eleventh graders using the course sequence to graduate in a three-year period by May 15, 2025, and May 15, 2026, and requires DPI to then report to the Fiscal Research Division by June 1, 2025, and June 1, 2026.

Requires the State Board to adopt an emergency rule by August 1, 2023, to establish the graduation requirements and sequence of courses. Requires governing bodies of public school units to advise students beginning with the 2023-24 school year of this sequence, the option to graduate within three years of entering the ninth grade, and the availability of early graduate scholarships. Makes students enrolled in the tenth grade during the 2023-24 school year who complete the sequence of courses for  graduation in three years eligible to graduate in the 2024-25 school year.

Part III.

Enacts new Part 6, in Article 23 of GS Chapter 116, establishing the early graduate scholarship program (program). Sets out eligibility requirements, including that the student seeking a degree, diploma, or certificate at an eligible postsecondary institution graduate from an NC public high school within three years of entering the ninth grade. Limits scholarship eligibility to no more than two semesters in the two academic years immediately following high school graduation. 

Sets out requirements for establishing the amount of the scholarship. Sets out the priority of awards when there are not sufficient funds to provide each eligible student with a full scholarship.

Requires the Authority to administer the program and to adopt rules. Requires the Authority to report annually beginning in 2026 to the specified NCGA committee. Species that scholarship funds unexpended remain available for future scholarships.

Establishes the Reserve Fund for Early Graduate Scholarships consisting of: (1) funds appropriated by the NCGA for the Program from the General Fund and (2) interest earned on these funds. Allows the Authority to use up to 1.5% of the funds for administrative costs.

Requires scholarships to be awarded for use in the 2025-26 school year.