Enacts new GS Chapter 115C, Article 39, Part 2A, Scholarship Grants, comprising new Sections GS 115C-562.1 through GS 115C-562.7.

GS 115C-562.1 (Definitions), providing the terms and definitions for use in this section, including authority, eligible students, Division, local school administrative unit, nonpublic school, and scholarship grants.

GS 115C-562.2 (Scholarship grants) provides that the State Education Assistance Authority (Authority) will, no later than June 1 of each year, make applications available to eligible students for the award of scholarship grants to attend any nonpublic school. Sets out the processes and procedures for the awarding of the scholarships. Establishes that scholarship grants will not exceed 90% of the required tuition and fees for the nonpublic school, up to $4,200 per year per eligible student. Sets out what the required tuition and fees can include as well as the ability of an eligible student to enroll in a different nonpublic school and remain eligible or receive a pro rata share of the unexpended portion of the grant. Directs the Authority to establish rules and regulations for the administration and awarding of scholarship grants.

GS 115C-562.3 (Verification of eligibility) provides that the Authority can seek verification of information on any application from eligible students. A random sample of no less than 6% of applications will be selected and verified annually. Sets out the processes and procedures for carrying out the random verifications as well as the requirements of household members of the applicants for the scholarship grants.

GS 115C-562.4 (Identification of nonpublic schools and distribution of scholarship grant information) provides that the Division of Nonpublic Education (Division) will provide to the Authority, no later than June 1 of each year, a list of all nonpublic schools operating in North Carolina that meet the requirements of GS Chapter 115C, Article 39, Part 1 and Part 2. The Authority will be notified within five business days of the determination that a school on the list has become ineligible. Directs the Authority to provide information about the scholarship grant program to the Division, including applications and the obligations of nonpublic schools that accept eligible students receiving the grant.

GS 115C-562.5 (Obligations of nonpublic schools accepting eligible students receiving scholarship grants) sets out six requirements that nonpublic schools accepting eligible students receiving scholarship grants are required to comply with, including, but not limited to, that they provide the Authority with documentation for required tuition and fees charged to the student, and that they provide graduation rates of the students receiving scholarship grants in a manner consistent with nationally recognized standards.  Provides that nonpublic schools that accept students with the scholarship grants cannot require any additional fees based on the status of the student as a grant recipient. Sets out other reporting requirements and the processes and procedures for cases of noncompliance with the requirements.

GS 115C-562.6 (Scholarship endorsement) directs the Authority to remit, at least two times each school year, scholarship grant funds awarded to eligible students to the nonpublic school for endorsement by at least one of the student's parents or guardians. Provides additional requirements and limitations involving the endorsement of grant funds by the parents or guardians, as well as the penalty for failing to comply with the requirements, which results in a forfeiture of the scholarship grant.

GS 115C-562.7 (Authority reporting requirements) directs the Authority to report to the Department of Public Instruction (Department) each year by August 1 on the number of students who have received scholarship grants for the current school year and were enrolled the prior semester in a local school administrative unit or charter school by the previously attended local school administrative unit or charter school. Establishes the standards and procedure for adjusting the allotments of local school administrative units and charter schools.

Directs the Authority to report each year by March 1 to the Joint Legislative Education Oversight Committee (Committee) on specified criteria, including, but not limited to, the total amount of scholarship grant funding awarded, and the nonpublic schools deemed ineligible to receive scholarships. Also directs the Authority to report to the Department and the Committee, no later than December 1 of each year, on the learning gains of students receiving scholarship grants. Sets outs the standards and requirements of the report, such as being conducted by an independent research organization selected by the Authority.

Amends GS 110-86(2), the definition of child care, providing that nonpublic schools described in GS Chapter 115C, Article 39, Part 2, that are accredited by national or regional accrediting agencies with early childhood standards and that operate a child care facility as defined in subdivision (3) of this section for less than six and one-half hours per day either on or off the school site, are not considered child care (was, accredited by the Southern Association of Colleges and Schools).

Amends GS 115C-555 (Qualification of nonpublic schools), providing that the provisions of GS 115C-555, Part 2, apply to any nonpublic school that has one or more of the following characteristics:

(1) It is accredited by the State Board of Education.

(2) It is accredited by a national or regional accrediting agency.

(3) It is an active member of the North Carolina Association of Independent Schools.  

(4) It receives no funding from the state of North Carolina. For purposes of this article, scholarship grant funds awarded pursuant to Part 2A of this article to eligible students attending a nonpublic school are not considered funding from the state of North Carolina.

Amends GS 116-204 (Powers of Authority), expanding the powers of the Authority to include administering the awarding of scholarship grants to students attending nonpublic schools, as provided in GS 115C, Articel 39, Part 2A.

Appropriates from the General Fund to the Authority $40 million for the 2013-14 fiscal year and $50 million for the 2014-15 fiscal year in recurring funds to be awarded to eligible students as scholarship grants. Provides that the Authority can retain up to 1% for administrative costs associated with the scholarship grant program. This section and appropriations are only effective if authorized by the General Assembly in the Current Operations and Capital Improvements Appropriations Act of 2013.

Provides that notwithstanding the requirements of GS 115C-562.1(2)b., for the 2013-14 school year, a student must reside in a household with an income level not in excess of 225% of the federal poverty level to qualify as an eligible student. Notwithstanding the requirement to make applications available by June 1 in GS 115C-562.2, applications for the 2013-14  school year shall be made available no later than August 1, 2013. The Authority will select an independent research organization, as required by GS 115C-562.5, beginning with the 2016-17 school year. The first financial review for a nonpublic school that accepts scholarship grant funds, as required by GS 115C-562.3, will not be required until the 2014-15 school year. The first learning gains report required by GS 115C-562.7 will not be due until December 1, 2017.

Effective when the becomes law and applies beginning with the 2013-14 school year.