House committee substitute makes the following changes to the 2nd edition.

Deletes the proposed changes to GS 115C-269.35(a) regarding performance standards for educator preparation programs (EPPs). Current law requires the performance standards to include proficiency and growth of students taught by educators holding an initial professional license, requiring EVAAS data to be used to measure student proficiency and growth. Now only requires EVAAS data to be used to measure student growth. Further, now requires the performance standards to include the two-year retention rate for individuals who completed an EPP and became initially licensed and employed in an NC public school. Deletes the inclusion of the quality of students entering the EPP from the information the performance standards must be based on, and instead requires this information be included in the EPP's annual performance report under subsection (b). Makes conforming changes.

Further amends GS 115C-269.35(b) regarding indicators that must be included in EPP annual performance reports. Makes several clarifying changes. In addition to existing required indicators and information, now requires the reports to include: the number of graduates of the EPP licensed in the State; the number of graduates of the EPP employed in the State; the number and percentage of students who convert from a residency license to either an initial professional license or a continuing professional license; pass rates (was, average scores) of graduates on professional, pedagogy, and content area exams for the purpose of licensure; the activities offered by the EPP designed to prepare educators to effectively teach students with disabilities and students of limited English proficiency (previously did not specify activities designed to prepare); and the retention of beginning educators in the profession for at least three years after licensure. Removes from the required reporting: the number of students retained; the amount of time required by students employed as beginning teachers under residency licenses to be issued initial professional licenses; and time to graduation rates.

Modifies proposed GS 115C-269.45, concerning the small group exception to performance assessment and assignment of sanctions, to require the State Board of Education (State Board) to adopt a rule to establish a small group exception for circumstances in which there is a risk of identifying individual program participants (was, circumstances in which disaggregation of performance data with respect to race, sex, or ethnicity is not possible due to the small number of program participants in a demographic group). Maintains the deadline of October 1, 2019, by which the State Board must adopt the rule. Now requires the State Board to apply the rule beginning with the data collected from the 2018-19 academic year for purposes of the annual reports made available to the public by December 15, 2019 (was, 2020), and annually thereafter, pursuant to GS 115C-269.50.