House committee substitute makes the following changes to the 1st edition.

2013-14 School Year.Adds specific provisions applicable only to the awarding of scholarship grants of up to $4,200toeligible studentsto attend nonpublic schoolsfor the 2013-14school year. Requires the State Education Assistance Authority (Authority) to make applications for those eligible students availableno later than August 1, 2013, and to begin awarding grants no later than August 15, 2013, for the 2013-14 school year. Specifies that the nonpublic schools at which the eligible students wish to use their scholarship grants must meet the requirements of Article 39 of GS Chapter 115C. Requires that information on grants and applications be available on the Authority's web site.

Applicable only to the 2013-14 school year, sets two criteria, both of which must be met for a student to be eligible to receive a grant: (1)must reside in a household with an income level that is not in excess of the amount required for the student to qualify for the federal free or reduced price lunch(FRPL) program; and (2) must be a full-time student who has not received a high school diploma and is assigned to and attending a public school pursuant to GS 115C-366 during the 2013 spring semester. Also requires the Authority to establish temporary rules for the administration and awarding of grants for 2013-14 which may include a process for awarding grants via a lottery system.

Provides that theprovisions innew GS 115C-562.3 through new GS 115C-562.7 also apply to any scholarship grant awarded for the 2013-14 school year.

2014-15 School Year and Thereafter.Provides that beginning with the 2014-15 school year and thereafter, the scholarship grants are to be awarded based on the criteria in Part 2A of Article 39 of GS Chapter 115C as enacted in this act.

Amends new GS 115C-562.1 to remove children of active duty military members as a category for qualification as an eligible student. Additionally amends the definition of eligible students to apply to a student who resides in a household with an income level that is not in excess of 133% of the amount for the student to qualify for the federal FRPL program (was, not in excess of 300% of the federal poverty level).

Requires the Authority to make applications available annually to eligible students no later than February 1 (was, June 1). Directs that beginning March 1, the Authority is to begin awarding grants and specifies criteria under which the grants must be awarded. Requires that first priority begiven (was, may be given) to eligible students who received a scholarship grant during the previous school year, if those students have applied by March 1.

Limits the amount of scholarship grants awarded to eligible students residing in households with an income level in excess of the amount required for the student to qualify for the FRPL to not more than 90% of the required tuition and fees for the nonpublic school that the eligible child will attend. Prohibits a scholarship grant from being more than the amount required for tuition and fees at the nonpublic school the eligible child will attend. Authorizes theAuthority to include among its rules and regulationsa lottery process for selecting scholarship grant recipients.

Directs the Division of Nonpublic Education, Department of Administration (Division), to provide annually by February 1 (was, June 1) a list to the Authorityof all public schools operating in the state that meet the requirements of Part 1 or Part 2 of Article 39 of GS Chapter 115C.

Requires annual administration of a nationally standardized test orother nationally standardized equivalent measurement to students enrolled in grades three and higher. Specifies achievement areas to be measured. Provides that aggregated test performance data that does not contain personally identifiable data is a public record under GS Chapter 132.

Amends language in new GS 115C-562.7(c) to require that the Authority's annual report to the Department of Public Instruction and the Joint Legislative Education Oversight Committee provide information on the learning gains or losses of students receiving scholarship grants (was, report on the learning gains). Provides that the first learning gains report is due December 1, 2017.

Appropriates $10 million (was, $40 million) from the General Fund to the Authority for the 2013-14 fiscal year and $40 million (was, $50 million) for the 2014-15 fiscal year in recurring funds. Declares that it is the intent of the General Assembly to appropriate $50 million in recurring funds beginning in the 2015-16 fiscal year to be awarded to eligible students as scholarship grants. Additionally, declares that it is the intent of the General Assembly to appropriate funds to public schools for assistance to students atrisk of academic failure and to community organizations serving the educational needs of those at-risk students still enrolled in public schools beginning in the 2014-15 fiscal year in an amount equal to the cost savings created by the award of opportunity scholarship grants.

Makes additional technical changes.