Housecommittee substitutemakes the following changes to the 1st edition.

Repeals SL 2011-259, which was amended in the 1st edition, to select four charter schools, with at least one located in Mecklenburg County, in whichto establish Dropout Prevention and Recovery Pilot Programs. Instead, directs the State Board of Education (SBE) to approve and select three charter schools to provide the educational services and programming and to establish a Dropout Prevention and Recovery Pilot Program (DPRP) in Mecklenburg County. Sets out requirements for the program substantively identical to the proposed language in the first edition, with changes indicated below. Requires that all teachers employed by the participating charter schools must be licensed teachers under GS 115C-296.

Clarifies that course content, online courses, and student performance data must be in compliance withstate lawand the Department of Public Instruction's policies. Directs the charter schools in the pilot to use the SBE's Ready Accountability Model and to follow current charter school funding guidelines under GS 115C-238.29H with the following three exceptions during the initial operation of the participating charter schools: (1) an increase in enrollment is not a material revision to the charter school's application, (2) funding for the charter schools will be based on the projected average daily membership (ADM)anticipated for the final month of the upcoming school year, but there will be an adjustment to the allotment based on the first month's actual ADM and any reductions to the allotment will be transferred to the ADM Contingency Reserve, and (3) additional funding to a charter school for increased ADM would come from funds that had reverted to the ADM Contingency Reserve.

Requires the SBE to report to the Joint Legislative Education Oversight Committee on the implementation and success of the pilot program on or before October 15, 2015 (was, March 15, 2014).

Amends the title. Deletes the appropriation of $1 million in recurring funds from the General Fund to the SBE for the purpose of providing additional funds for the ADM Contingency Reserve.

Effective whenthe actbecomes law and applies to the 2014-15 school year (was, applies to schools selected by the SBE on or after July 1, 2013).