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.