LOCAL ED. FUNDING DISPUTE PROCESS.

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View NCGA Bill Details2017-2018 Session
House Bill 1031 (Public) Filed Tuesday, May 29, 2018
AN ACT REPEALING THE STATUTORY AUTHORITY FOR A LOCAL BOARD OF EDUCATION TO FILE A LEGAL ACTION CHALLENGING THE SUFFICIENCY OF THE FUNDS APPROPRIATED BY THE BOARD OF COUNTY COMMISSIONERS, PROVIDING A FORMULA FOR DETERMINING THE AMOUNT OF FUNDS TO BE APPROPRIATED IN THE EVENT A BUDGET DISPUTE CANNOT BE RESOLVED BY MEDIATION, AND ESTABLISHING A WORKING GROUP TO ADDRESS FUND BALANCES MAINTAINED BY LOCAL BOARDS OF EDUCATION, AS RECOMMENDED BY THE JOINT LEGISLATIVE PROGRAM EVALUATION OVERSIGHT COMMITTEE.
Intro. by Horn, Hurley, Lucas.

Status: Ch. SL 2018-83 (House Action) (Jun 25 2018)
H 1031/S.L. 2018-83

Bill Summaries:

  • Summary date: Jun 26 2018 - View Summary

    AN ACT REPEALING THE STATUTORY AUTHORITY FOR A LOCAL BOARD OF EDUCATION TO FILE A LEGAL ACTION CHALLENGING THE SUFFICIENCY OF THE FUNDS APPROPRIATED BY THE BOARD OF COUNTY COMMISSIONERS, PROVIDING A FORMULA FOR DETERMINING THE AMOUNT OF FUNDS TO BE APPROPRIATED IN THE EVENT A BUDGET DISPUTE CANNOT BE RESOLVED BY MEDIATION, AND ESTABLISHING A WORKING GROUP TO ADDRESS FUND BALANCES MAINTAINED BY LOCAL BOARDS OF EDUCATION, AS RECOMMENDED BY THE JOINT LEGISLATIVE PROGRAM EVALUATION OVERSIGHT COMMITTEE. Enacted June 25, 2018. Effective June 25, 2018.


  • Summary date: Jun 13 2018 - View Summary

    House amendment to the 2nd ed. revises the bill as follows: 

    Modifies the new GS 115C-431(b1)(2) to clarify that the percent change calculation is based on the twelve-month percent change, and makes identical change in subsection (b2)(2).

    Makes grammatical changes to GS 115C-431(c) and clarifies that the court or jury is required to find the amount of money necessary from the board of county commissioners for buildings and equipment as required by GS 115C-521.


  • Summary date: Jun 13 2018 - View Summary

    House committee substitute makes the following changes to the 1st ed.:

    Adds new subsection (b1) that embodies the provisions of the new subsection (f) in the previous edition, and modifies those provisions to clarify that the subject of mediation is the amount of money appropriated to the local current expense fund.  Modifies the formula for the sum to be appropriated for the fiscal year in dispute to now include, as the initial calculation in a new subdivision (1), the amount appropriated to the local current expense fund in the prior fiscal year that is expended in that year by the LEA or transferred as required by law divided by the sum of the average daily membership of the LEA plus the share of average daily membership of any innovative, charter, regional, or laboratory school whose students reside in the LEA for the prior school year.  Further modifies the formula calculation in subdivision (3) to provide that the amount calculated under that subdivision shall be multiplied by the sum of the allotted average daily membership for the school year plus the share of the average daily membership of any innovative, charter, regional, or laboratory school whose students reside in the LEA for the budget year in dispute.

    Adds new subsection (b2) that embodies the provisions of the new subsection (g) in the previous edition, and makes identical changes to the formula for calculating the amount to be appropriated to the local current expense fund under that subsection.

    Adds new subsection (b3) that embodies the provisions of the new subsection (h) in the previous edition and clarifies that the subsection applies only to the local current expense fund and not the capital outlay fund.

    Eliminates repeal of subsection (c) and clarifies that that this subsection applies to mediation and legal challenges related to the amount of moneys to be appropriated to the capital outlay fund.

    Eliminates repeal of subsection (d) and makes technical changes.

    Eliminates repeal of subsection (e) and makes technical changes.

    Modifies amendment to GS 115C-432(a) to clarify that this section applies to the capital outlay fund.

    Expands the study to be conducted by the Local Government Commission and the School of Government to include disputes related to the capital outlay fund.


  • Summary date: Jun 12 2018 - View Summary

    House committee substitute is to be summarized.


  • Summary date: May 29 2018 - View Summary

    Amends GS 115C-431, providing the procedure for resolving a funding dispute between a local board of education and its respective board of county commissioners. Eliminates the existing provisions set out in subsections (c), (d), and (e) that authorized the local board of education to file a legal action challenging the amount of money appropriated to the local current expense fund and/or the capital outlay fund by the board of county commissioners is not sufficient to support a system of free public schools when mediation fails to resolve the dispute. Also eliminates the appeal procedure set out for judgments rendered on actions authorized by the statute. Instead adds new subsections (f) and (g), establishing two formulas for determining the amount of funds to be appropriated for the budget year in dispute in the event an agreement is not reached in mediation. Provides that the formula in subsection (g) is to be used when the amount to be appropriated has not been calculated pursuant to the formula in subsection (f) for longer than the prior year, while the formula in subsection (g) is to be used when the amount to be appropriated has been calculated pursuant to the formula in subsection (f) for the prior two years. Directs the board of county commissioners to appropriate the sum determined by the appropriate formula to the local board of education for the budget year in dispute. Prohibits the local board of education and the board of county commissioners from filing any legal action challenging the determination as to the funds to be appropriated by the board of county commissioners to the local current expense fund and/or the capital outlay fund in accordance with the formulas set out in new subsections (f) and (g).

    Makes conforming change to GS 115C-432, removing the reference to the appeal procedure eliminated from GS 115C-431 described above.

    Applies beginning with budget ordinances adopted on or after the date the act becomes law.

    Directs the Local Government Commission and the School of Government at UNC-Chapel Hill to convene a working group to develop and recommend statutory parameters for fund balances maintained by local boards of education. Provides for membership of the working group to include representatives from the NC Association of County Commissioners, the NC School Boards Association, and the NC Association of School Business Officers. Requires the working group to produce findings and recommendations on: (1) the minimum and maximum fund balances, with a focus on unencumbered funds; (2) appropriate uses of fund balances; (3) annual reporting requirements for fund balances; (4) a process for factoring fund balances into annual local education budgets; and (5) the role of boards of county commissioners, if any, in determining the use of fund balances. Directs the working group to report its findings and recommendations to the Joint Legislative Oversight Committee no later than March 30, 2019.