STATE AND LOCAL FUNDS FOR CHARTER SCHOOLS.

View NCGA Bill Details2015-2016 Session
House Bill 1111 (Public) Filed Tuesday, May 10, 2016
AN ACT TO CHANGE THE STATE AND LOCAL FUNDING METHOD FOR CHARTER SCHOOLS AND TO APPROPRIATE ADDITIONAL FUNDS NECESSARY TO IMPLEMENT THE CHANGE.
Intro. by Jeter, L. Johnson, Daughtry, Reives.

Status: Ref To Com On Rules, Calendar, and Operations of the House (House Action) (May 11 2016)

Bill History:

H 1111

Bill Summaries:

  • Summary date: May 11 2016 - More information

    Part I: State Funds for Charter Schools

    Current GS 115C-218.105 directs the State Board of Education (Board) to allocate to each charter school funds as specified in subsection (a). This act changes the title of GS 115C-218.105 to State funds for a charter school (was, State and local funds for a charter school). Amends the statute to require the Board to allocate funds to each charter school on the same basis as the Board allocates funds to each city school administrative unit, with exceptions as follows. (1) For the central office administration allotment category, the allocation of funds to a charter school is that, for charter schools with an average daily membership of less than or equal to 1,000, the Board must allocate $140,000 to the charter school each fiscal year, and for charter schools with an average daily membership of greater than 1,000, the Board must allocate $400,000 to the charter school each fiscal year. (2) A charter school with an average daily membership of less than 500 must receive an amount equal to half the amount the charter school would otherwise have received under the Disadvantaged Student Supplemental Funding Allotment formula. (3) Charter schools are not eligible to receive funds from the transportation allotment category, but the Board may, subject to the availability of funds, establish a grant program to allow charter schools to apply for grant funds for transportation services provided to students. (4) Charter schools are not eligible to receive funds from the driver training allotment category.

    Amends and moves existing language of subsection (a) to new subsection (a1), to provide that in accordance with subsections (e) and (f) of GS 115C-218.5 (concerning material revisions of charter school applications; was, in accordance with GS 115C-218.5(d), concerning initial grant and renewal of charters), the Board must allow for annual adjustments to the amount allocated to a charter school based on its enrollment growth in school years subsequent to the initial year of operation. Eliminates the language of subsection (a) that requires a charter school to return a pro rata amount of funds allocated for a child, in the event a child with disabilities leaves the charter school and enrolls in a public school during the first 60 days in the school year, to the Board, and requires the Board to reallocate those funds to the local school administrative unit in which the public school is located. Also eliminated the language requiring the Board to allocate to a charter school the pro rata amount of additional funds for children with disabilities in the event a child with disabilities enrolls in the charter school during the first 60 school days.

    Eliminates subsections (c), (d), and (e) of GS 115C-218.105, which concern provisions requiring the local school administrative unit where a student attends a charter school to provide funds to the charter school on a per pupil share and the process and remedies provided in the event of a dispute between the local school administrative unit and the charter school. Enacts new provisions concerning local funds for charter schools in Part II of the act in GS 115C-218.106.

    Amends GS 115C-546.2(d) to bar the use of funds appropriated from the Education Lottery Fund to the Public School Building Capital Fund by a county to pay for charter school construction projects or to retire indebtedness incurred for charter school construction projects.

    Appropriates $47,333,214 from the General Fund to the Department of Public Instruction in recurring funds for the 2016-17 fiscal year to implement the requirements of GS 115C-218.105, as amended, except to the extent transportation grant funds are provided to charter schools.

    Part II: Local Funds for Charter Schools

    Amends GS 105-487(a), allowing specified revenue from taxes to be used by the county for public school capital outlay purposes or to retire any indebtedness incurred by the county for those purposes, to establish that nothing in the statute is to be construed to allow revenue to be used for charter school capital needs.

    Amends GS 105-502(a), requiring specified revenue for public school capital outlay purposes or to retire any indebtedness incurred by the county for those purposes during the period of five years prior to the date the taxes took effect, to establish that nothing in the statute is to be construed to allow revenue to be used for charter school capital needs.

    Amends GS 115C-218.45(f), allowing a charter school to give enrollment priority to specified students, to establish a new category of students that may be given priority that include, notwithstanding any other provision of the statute, students who are residents of a local school administrative unit located in a county that has provided capital outlay funds under GS 115C-218.106(b), enacted in Part III of the act, or that has issued bonds and notes to finance the capital costs of a charter school facility in accordance with Article 4 of GS Chapter 159 (Local Government Bond Act) to the extent necessary to meet a student enrollment requirement.

    Amends GS 115C-218.100(b), which provides that upon dissolution of a charter school, all net assets of the charter school purchased with public funds are deemed the property of the local school administrative unit in which the charter school is located, by adding that for capital funds provided to a charter school by one or more counties pursuant to GS 115C-218.106(b), and all net assets purchased or improved with the capital funds, up to the total amount of the funds provided, 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.

    Enacts new GS 115C-218.106, titled Local funds for a charter school, as follows.

    Requires the board of county commissioners in which the local school administrative unit is located where a student enrolled in a charter school resides to appropriate, for each student enrolled in a charter school, to the charter school an amount equal to the per pupil appropriation from the county to the locals school administrative unit. Directs that, by October 1 of each school year, the total membership of the charter school of students residing in the county for the budget year must be determined and certified to the charter school and the board of county commissioners by the State Board of Education (Board). Requires that the amount of the per pupil appropriation that consists of revenue derived from supplemental taxes can only be provided to a charter school located in the tax district for which those taxes are levied and in which the student resides.

    Allows a charter school board of directors to request capital outlay funds from the board of county commissioners of any county in which the charter school receives funds under subsection (a) of the statute. Establishes that in order for a charter school to receive capital outlay funds under the statute, the charter school must enter into an agreement with the county that, until a time the charter school fully repays the county in the amount of the capital funds provided under the statute, the charter school must maintain a student enrollment of at least 50% of students who reside in a local school administrative unit located in the county, and, if the charter school facility no longer meets the student enrollment requirement or if the charter school facility is no longer used for public school purposes, then the charter school facility must revert to the county. Establishes that, if the charter school facility reverts to the county and more than one county has provided capital outlay funds, the property must be divided between the counties in proportion to the funds provided. Allows capital outlay funds to be used as follows: (1) for the acquisition of real property for school purposes including, but not limited to, school sites, playgrounds, athletic fields, administrative headquarters, and garages; (2) for 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, gymnasiums, administrative offices, storage, and vehicle maintenance; (3) for the acquisition or replacement of furniture and furnishings, instructional apparatus, data-processing equipment, business machines, and similar items of furnishings and equipment; (4) for the acquisition of school buses as additions to a school's fleet; and (5) for the acquisition of activity buses and other motor vehicles.

    Provides that, if a charter school uses funds provided in subsection (b) of the statute to acquire or improve property, the amount provided by the county must be evidenced by a promissory note and secured by a deed of trust on the property acquired or improved by the funds. Allows the county to subordinate the deed of trust to other liens to facilitate the acquisition or improvement of the property secured by the deed of trust. Provides that, in the event that a charter school fully repays one or more of the counties in the amount of the capital funds provided under subsection (b) of the statute, the county receiving the repayment must, 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 fully repaid the capital funds provided.

    Establishes that nothing in the statute is to be construed to place a duty on the board of county commissioners to fund a deficit incurred by a charter school through failure of the charter school to comply with the provisions of Article 14A of GS Chapter 115C (Charter Schools) or to provide moneys lost through misapplication of moneys by a bonded officer, employee, or agent of the charter school when the amount of the fidelity bond required by the charter school was manifestly insufficient.

    Establishes that nothing in the statute is to be construed to create a cause of action for a charter school against a board of county commissioners based on the amount of an appropriation to the charter school.

    Enacts GS 115C-218.107, titled County issuance of bonds for charter school capital projects, to allow a charter school receiving funds pursuant to GS 115C-218.106 to request that the board of county commissioners providing the funds issue bonds and notes to finance the capital costs of a charter school facility in accordance with Article 4 of GS Chapter 159 (Local Government Bond Act). Requires that, prior to the issuance of bonds or notes to finance the costs of a charter school facility, a county must enter into an agreement with the charter school that requires the charter school to maintain a student enrollment of at least 50% of students who reside in a local school administrative unit located in the county, the charter school cannot cease using the facility for public school purposes, and the facility must revert to the county if any requirement of the agreement is breached by the charter school.

    Amends GS 153A-149(b), authorizing each county to levy taxes without restriction as to rate or amount for the eight specified purposes, by amending the seventh purpose (Schools), establishing that a county may levy taxes without restriction to provide for the county's share of the cost of kindergarten, elementary, and secondary public schools, including charter schools chartered under Article 14A of GS Chapter 115C, and post-secondary schools (currently, does not include specification for secondary public schools including charter schools).

    Current GS 159-48(c) authorizes each county to borrow money and issue its bonds under Article 4 of GS Chapter 159 in evidence of the debt for the purpose of paying any capital costs of one or more of the purposes specified in subsubsections (1) through (4b). Amends the statute to establish that a county can also borrow money and issue bonds to pay capital costs for the purpose of new subsubsection (4c) to provide charter school facilities for charter schools that meet the requirements of GS 115C-218.107, including, without limitation, schoolhouses, buildings, plants and other facilities, physical and vocational educational buildings and facilities, including in connection therewith classrooms, laboratories, libraries, auditoriums, administrative offices, gymnasiums, athletic fields, lunchrooms, utility plants, garages, and school buses and other necessary vehicles.

    Enacts GS 159-48.5 to require that, until a charter school fully repays a county in the amount of capital costs financed in accordance with GS 159-48(c)(4c), if a charter school fails to meet the requirements of its agreement with the county under GS 115C-218.107, the charter school facility must revert back to the county or counties that borrowed money and issued bonds to pay capital costs for the facility. Provides that, if applicable, the facility must be divided between the counties in proportion to the capital funds provided.

    Part III: Conforming Changes

    Repeals GS 115C-448(d), which provided that special funds of individual schools are not to be included as part of the local current expense fund of a local school administrative unit for the purposes of determining the per pupil share of the local current expense fund transferred to a charter school pursuant to GS 115C-218.105(c) (statute is eliminated by the act). Makes conforming changes to SL 2014-100, Section 8.35(e) to conform statutory references to the act.

    Part IV: Effective Date

    Establishes that nothing in the act is to be construed to affect pending legislation.

    Effective July 1, 2016.


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