House committee substitute makes the following changes to the 1st edition.

Rewrites Section 1 of the 1st edition, which states the purpose of this act is to create a positive transformational force for the quality of education that North Carolina students receive as a series of "whereas" clauses.

Codifies the provisions of this act with specified changes, adding a new Part 3, North Carolina Competitive Teaching Scholarship Loan Program, in Article 23 of GS Chapter 116. Defines the following terms as they apply in this Part: (1) Commission--the North Carolina Competitive Teaching Scholarship Loan Commission, (2) Director--the Director of the Commission, (3) Fund--the North Carolina Competitive Teaching Scholarship Loan Fund, and (4) Program--the North Carolina Competitive Teaching Scholarship Loan Program.

Enacts new GS 116-209.61 to establish the 11-member North Carolina Competitive Teaching Scholarship Loan Commission (Commission). Enacts new GS 116-209.62 to establish the North Carolina Competitive Teaching Scholarship Loan Program (Program).

Authorizes the Director of the Program to staff the Commission. Provides that the State Education Assistance Authority (Authority) is responsible for implementing scholarship loan agreements and enforcing the agreements for the Program scholarship loans. Authorizes the Authority's board of directors to appoint a Director of the Program. Provides that the Authority, in collaboration with the Commission, is to administer the Program (was, charged the Authority with responsibility for recruiting eligible individuals and awarding scholarship loans to those eligible persons).

Provides that the 11 members of the Commission are to be appointed or serve ex-officio. Sets two-year terms of office for appointments to the Commission, expiring on July 1 in odd-numbered years. Also sets terms for ex-officio members. Provides for the filling of vacancies, covering of expenses for commission members, and provides for regular meetings, at times and places as determined necessary by the chair.

Directs the Authority to administer the Program in cooperation with selected institutions of higher education programs selected by the Commission. Notes that these institutions of higher education should include North Carolina community colleges, post-secondary constituent institutions of the University of North Carolina, and private post-secondary institutions operating in the state. Directs the Commission to adopt stringent standards for selecting only the most effective teacher education preparation programs and provides specified criteria to be considered in the selection process.

Specifies that the Authority is to award scholarship loans to eligible students in the amount of $8,500 annually to (1) North Carolina high school seniors for up to four years; (2) community college students applying to transfer to an educator preparation program at an institution of higher education for up to two years; and (3) individuals who currently have a bachelor's degree and are seeking preparation for teacher certification for up to two years.

Directs the Authority, in coordination with the Director of the Commission, to perform all of the administrative functions necessary to implement the provisions of this act. Directs the Commission, in coordination with the Authority, to report, no later than January 1, 2017, and annually thereafter to the Joint Legislative Education Oversight Committee with data on loans awarded from the Fund, placement and repayment rates, and selected outcomes by program (was, required the Authority to report to the General Assembly by August 1, 2016, and annually thereafter).

Retains the provisions concerning loan forgiveness under specified conditions. Provides that if a loan recipient repays the scholarship loan with cash payments, all of the debt must be repaid within eight years after completing the teacher licensing program. Requires that the payment of the principal and interest must begin no later than 27 months after completing the teacher education program unless a recipient has extenuating circumstances, in which case the Authority may extend the time period to repay the loan in cash to no more than a total of 12 years.

Requires that all funds appropriated to or otherwise received by the Program for scholarships as repayment of scholarship loans and all interest earned on these funds are to be placed in the Fund. Restricts the use of the Fund to award scholarship loans under the Program and for administrative costs associated with the Program.

Appropriates $200,000 for the 2015-16 fiscal year from the General Fund to the Authority for the establishment of the Program. Appropriates $1 million in recurring funds for the 2016-17 fiscal year from the General Fund to the Authority to implement the requirements of this Part. Provides that beginning in 2016-17, the Authority may retain up to $200,000 of the appropriated funds for the salary of the Director of the Program and other administrative costs. Provides that any unspent funds are not to revert at the end of the fiscal year but are to remain available to award scholarship grants to eligible students. (Previous appropriation was $1 million for the 2015-16 fiscal year and $1 million for the 2016-17 fiscal year from the General Fund to the Board of Governors of the University of North Carolina to allocate to the Authority to implement the provisions of this act.)

Provides that initial appointments to the Commission are to be made no later than August 15, 2015, and that the initial appointments expire July 1, 2017.

Directs the Commission to establish initial selection criteria for recipients and institutions no later than November 15, 2015, and to make applications available to prospective students no later than December 31, 2015. Directs the State Board of Education to establish criteria and identify hard-to-staff areas of licensure and hard-to-staff schools by local administrative units and provide that information to the Authority and the Commission no later than November 1, 2015.

Requires the Commission to select recipients and award the initial scholarship loans for the 2016-17 school year no later than April 1, 2016.