Bill Summary for H 32 (2021-2022)

Summary date: 

Jan 28 2021

Bill Information:

View NCGA Bill Details2021
House Bill 32 (Public) Filed Thursday, January 28, 2021
AN ACT TO ENACT THE EQUITY IN OPPORTUNITY ACT.
Intro. by Arp, Blackwell, Lambeth, Saine.

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Bill summary

Part I.

Amends the definition of eligible students, as it applies to opportunity scholarship grants, set out in GS 115C-562.1 to include a student residing in the State who is eligible to enter kindergarten, first grade, or second grade under Article 25 of the Chapter (previously, this particular eligibility criteria was limited to students entering either prekindergarten or the first grade). Adds that a child who is four on or before April 16 is eligible to attend the following school year with the respective principal (or the equivalent) submitting findings of the student satisfying the specified requirements with the child's application to the State Education Assistance Authority (Authority). Applies beginning with applications for scholarship funds for the spring semester of the 2021-22 school year. 

Establishes additional eligibility criteria to receive scholarships for 2021-22, deeming students eligible who meet the following criteria: (1) enrollment in a NC public school or a Department of Defense school located in NC for the fall semester of the 2019-20 school year; (2) enrollment in a nonpublic school that meets specified state law requirements for the spring semester of the 2019-20 school year and the entire 2020-21 school year; (3) meets the eligibility requirements of GS 115C-562.1(3)a1. (has not enrolled in a postsecondary institution in a matriculated status eligible for enrollment for 12 hours of academic credit) or b. (resides in a household with an income level not in excess of 133% of the amount required for the student to qualify for the federal free or reduced-price lunch program); and (4) submits an application for the 2021-22 school year. Mandates students deemed eligible solely by this provision be given first priority in scholarship awards in the same manner as those previously awarded scholarships. 

Amends GS 115C-562.1 to expand the statutory eligibility criteria for eligible students for scholarships to include a child residing in the State who was enrolled in a nonpublic school that meets specified state law the spring semester prior to the school year for which the student is applying, and was enrolled for the fall semester prior to the spring semester in a public school or Department of Defense school in NC. 

Amends GS 115C-562.2, modifying the scholarship grant cap (per year, per eligible student) to an amount equal to 70% of the average State per pupil allocation in the prior fiscal year (was, $4,200). 

Amends GS 115C-562.3 to require the Department of Public Instruction (DPI) to provide the Authority with public school enrollment information needed for determining eligibility under the established criteria. Also requires DPI to annually provide the Authority the average per pupil allocation for that fiscal year to determine the scholarship grant cap in the following fiscal year. 

Makes the above provisions applicable beginning with the applications for scholarships for the 2022-23 school year. 

Further amends GS 115C-562.2, as amended, increasing the scholarship grant cap from 70% to 80% of the average State per pupil allocation in the prior fiscal year. Applies beginning with applications for scholarship funds for the 2023-24 school year. 

Amends GS 115C-562.8, which governs the Opportunity Scholarship Grant Fund Reserve. Restricts the Authority from expending funds that are carried forward for a fiscal year until the funds from the prior year appropriation to be used to award scholarships are expended. Adds a provision allowing for unexpended funds from funds carried forward for one fiscal year to be used to contract with a nonprofit corporation for outreach, education, and application assistance for parents and students, up to $500,000. Requires any remaining funds to revert to the General Fund (previously, all funds carried forward that have not been spent within one fiscal year revert to the General Fund). Makes conforming changes. Effective June 30, 2021.

Enacts GS 115C-567.1 to authorize the Authority to contract with a nonprofit corporation representing parents and families for outreach, education, program promotion, and application assistance for parents and students regarding the scholarship programs for eligible students. Details requirements of potential contractors, including complying with lobbying limitations. Provides for the contracting process and terms of the contract, including confidentiality requirements. Provides for the Authority sharing certain contact information of parents during the contract, with an opt-out option for parents. 

Amends GS 115C-562.8, modifying the amount of funds the Authority is authorized to use of its State appropriated funding for administrative costs of the scholarship grant program, now authorizing the Authority to retain 2.5% of funds appropriated, rather than the lesser of up to 4% of the funds appropriated or $1.5 million each fiscal year. 

Part II.

Amends Article 41 of GS Chapter 115C as follows. Renames the North Carolina Personal Education Savings Accounts Program as the North Carolina Personal Education Student Accounts for Children with Disabilities Program. Defines eligible students as a student residing in State who has not yet received a high school diploma and who: (1) is eligible to attend a North Carolina public school under Article 25 of GS Chapter 115C (was, under GS 115C-336) and specifies that a child who is four years old on or before April 16 is eligible to attend the following school year if the principal of the school where the child seeks to enroll finds that the student meets the requirements of GS 115C-364(d) (concerning enrollment of gifted and mature four year olds in kindergarten) and submits those findings with the child’s application; (2) has not been enrolled in a postsecondary institution as a full time student taking at least 12 hours of credit; (3) is a child with a disability; and (4) has not been placed in a nonpublic school or facility by a public agency at public expense. Defines child with a disability as one who (1) meets the definition in GS 115C-106.3(1); and/or (2) was enrolled in a public school during the previous semester and was provided a section 504 plan by the public school. Amends the definition of Personal Education Savings Account (now, Personal Education Student Account) to provide that they are electronic accounts (was, bank account) holding scholarship funds.

Requires that the scholarships be awarded for applications received by March 1 of each year (removes the requirement that the recipients be selected beginning March 15). Changes the amount of the scholarship which was $9,000 per eligible student, to the following. Sets the scholarship in an amount per year per eligible student, of up to the sum of the following from the prior fiscal year: the State allocation per funded child with disabilities plus 85% of the average State per pupil allocation, except for the allocation for children with disabilities, for the school year for which the application is received. Sets out an amended formula for part-time students. Requires funds remaining on a debit card or in an electronic account at the end of a school year to be returned to the Authority. Adds a new provision awarding an eligible student with a scholarship of up to $17,000 for each school year if the student has one or more of the following as a primary or secondary disability at the time of application: autism; hearing impairment; moderate or severe intellectual or developmental disability; multiple, permanent orthopedic impairments; or visual impairment (makes a conforming repeal of special education scholarship program for children with disabilities in Part IH of Article 9 of GS Chapter 115C). Allows students qualifying for these funds to carry forward no more than $4,500 of funds remaining on a debit card or electronic account at the end of the school year upon renewal of the account.

Makes changes throughout that conform with the repeal of Part IH of Article 9 of GS Chapter 115C, which is effective July 1, 2022.

Limits the use of the scholarship funds to tuition and qualifying education expenses (as defined in GS 115C-595). Now distributes the funds each semester instead of quarterly; makes conforming changes. Requires that parents receive a debit card or electronic account at the beginning of the school year instead of fiscal year.

Amends GS 115C-593 by adding that when a student has a section 504 plan, the local education agency must assess if the student continues to be a child with a disability and verify the outcome on a form provided to the Authority.

Amends GS 115C-594 by no longer requiring the verification of 6% of applications annually. Adds a requirement that the Department of Public Instruction annually, by December 1, provide the Authority the State allocation per funded with disabilities and the average State per pupil allocation for that fiscal year in order to determine the maximum scholarship amount.

Amends GS 115C-595 as follows. Adds transaction or merchant fees not to exceed 2.5% of the cost of the item or service to the allowable use of the scholarship funds. Sets out the procedure under which the Authority disburses funds for tuition to the school and sets out conditions under which reimbursement of tuition is allowed.

Amends GS 115C-597 to require the Authority to provide scholarship recipients with the annual list of defined educational technology for which scholarship funds can be used. Deletes the provision allowing the Authority to retain the specified amount for administrative costs (conforms to change made new GS 115C-600, see below).

Enacts new GS 115C-599 requiring the State Board to ensure that local education agencies: (1) timely conduct evaluations requested by a child's parent or guardian of suspected children with disabilities; and (2) provide assessments for continuing eligibility to identified children with disabilities receiving scholarship funds at the request of the parent or guardian. Requires the Authority, in conjunction with the Department of Public Instruction, to annually analyze past trends in scholarship data to ensure that the amount of funds transferred each fiscal year for reevaluations by local school administrative units of eligible students are sufficient and based on actual cost.

Enacts new GS 115C-600 establishing the Personal Education Student Account Fund Reserve (Reserve) to be administered by the UNC Board of Governors (BOG) for the purpose of allocating funds to the Authority for awarding scholarships under this article. The Reserve consists of appropriations from the General Fund and any accrued interest. Requires the funds to be used in the fiscal year following the fiscal year in which the funds were appropriated to the Reserve: (1) to award scholarship funds to eligible students for the school year that begins in the fiscal year following the fiscal year in which the funds were appropriated; (2) for administrative costs; and (3) for reevaluations by local school administrative units of eligible students. Funds that are unexpended at the end of the fiscal year following the fiscal year in which the funds were appropriated are carried forward for one fiscal year. Appropriates $17,043,166 from the General Fund to the BOG for the scholarship program for 2022-23 and increases the appropriated amount by $1 million each fiscal year until 2031-2032 (at that time and each fiscal year thereafter the amount of the appropriation is set at $26,043,166). Allows the Authority to retain up to 4% of the funds allocated to the Authority to award scholarships, to be used for administrative costs.

States the General Assembly’s intent to move the Special Education Scholarships for Children with Disabilities and the Personal Education Savings Account program funding, in addition to any other funds appropriated by the General Assembly for the Personal Education Student Accounts for Children with Disabilities Program, into the Personal Education Student Account Fund Reserve.

Appropriates $16,043,166 in nonrecurring funds for 2021-22 from the General Fund to the Personal Education Student Account Fund Reserve for awarding scholarship funds to students and administration of the Personal Education Student Accounts for Children with Disabilities Program for the 2022-23 school year.

Gives priority in awarding a scholarship for the 2022-23 school year to a student who was awarded scholarship funds for a PESA under Article 41 of GS Chapter 115C for the 2021-22 school year or a student who received a scholarship under Part 1H of Article 9 of GS Chapter 115C for the 2021-22 school year, if the student applies by March 1, 2022.

The above provisions become effective July 1, 2021, and apply to applications for scholarship funds beginning with the 2022-23 school year.

Provides that beginning with the 2022-23 fiscal year, of the funds appropriated from the General Fund to the BOG, the sum of (1) $13,043,166 in recurring funds for the Special Education Scholarship Program for Children with Disabilities established pursuant to Part 1H of Article 9 of GS Chapter 115C and (2) $3 million in recurring funds for the Personal Education Savings Account program must instead be appropriated to the Personal Education Student Account Fund Reserve. Amends GS 115C-555(4), GS 115C-567.1(a), and Section 5(b) of SL 2013-364, as amended, to conform to the repeal of Part 1H of Article 9 of GS Chapter 115C. Effective July 1, 2022.

Makes conforming changes to GS 105-153.5(b)(12), concerning deduction from income tax the amount deposited to a personal education student account. Applies to taxable years beginning on or after January 1, 2022.

Part III.

Amends GS 153A-149 to authorize counties to levy property taxes for the purpose of providing supplemental funds for K-12 students for educational purposes set forth in new GS 153A-60.

Enacts GS 153A-60, authorizing counties to appropriate funds to provide, per fiscal year, up to $1,000 per resident child who has received a scholarship grant from the State and is enrolled in a nonpublic school located within the county for the school year, as a supplement to the scholarship funds provided by the State. Limits the supplement to State scholarship funds awarded by programs under the following: Part 1H of Article 9 (special education scholarships for children with disabilities); Part 2A of Article 39 (nonpublic school scholarship grants); and Article 41 (personal education savings accounts). Provides for county determination of the amount of funds to appropriate based on the number of resident children who received scholarship grants for the immediately preceding school year. Requires requesting de-identified data from the Authority. Directs counties to remit the appropriated funds to the Authority for expenditure, with the Authority acting as the fiscal agent for the county for disbursement to eligible students. Amends GS 115C-112.6, GS 115C-562.2, and GS 115C-592 to provide for the supplemental county scholarships' requirements and disbursement under each scholarship program, including requiring the SEAA to return any unused funds at the end of each fiscal year to the respective county and authorizing the SEAA to adopt rules for the disbursement of funds. 

Provides for the above changes beginning with county budget ordinances adopted for the 2021-22 fiscal year that provide funds for students receiving scholarship funds for the 2021-22 school year. 

Amends new GS 153A-460, effective July 1, 2022, to no longer include special education scholarship recipients under Part 1H of Article 9 of GS Chapter 115C (conforms to the repeal in Part II of this act) as eligible children to receive county supplemental K-12 scholarships. Makes conforming changes. 

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