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

Makes technical corrections toclarify that changes to GS 115C-296, regarding teacher licensure requirements, reports, lateral entry, and mentor programs apply beginning with the 2013-14 school year as this provision is amended in Section 3.(a) of this act, and thatother changes to GS 115C-296 set out in Section3.(b) of this act apply beginning with the 2014-15 school year.Also makes technical corrections toclarify that for teachers in the fourth or fifth year of their current five-year license renewal cycle, the changes required by GS 115C-296(b)(1)b. as amended in Section 3.(a) and again in Section 3.(b) of this act apply beginning with the first year of their next five-year renewal cycle.

Amends the school performance elements in the college/career readiness category (new GS 115C-83.11(d)(2)). Amends GS 115C-12(9)c1. to clarify that as part of the annual "report card" for each LEA, the SBE will award a separate indicator reflecting a measure of student growth earned by each school within the LEA.Makes a conforming change toGS 115C-47(58)regarding the content of the overall school performance to be displayed by the local board on the website for its LEA. Also makes conforming changes to GS 115C-238.29F(1) regarding North Carolina report cards for charter schools and GS 115C-238.66(11) regarding state report cards for regional schools. Applies beginning with the 2012-13 school year.

Amends new GS 115C-325.1 to provide that "demote," as it applies to this section, does not include any reduction of pay as compared to a prior term of contract. Clarifies that "demote" does mean toreduce the salary of a person classified or paid by the SBE as a classroom teacher or as a school administrator duringthe time of the contract. Adds a definition for year,meaning a calendar year beginning July 1 and ending June 30.

Requires in GS 115C-325.3 a superintendent who recommends that a local board not offer a renewed contract to a teacher to give the teacher written notice no later than June 1 (was, May 15). Provides that a teacher has the right to petition the local board no later than 10 days after receiving the written notice (was, no later than June 1). Requires the local board to provide nonrenewal notification within 10 days of the hearing (was, by July 1) or on a later date with the written consent of the teacher and the superintendent. Requires that a decision not to offer a teacher a renewed contract cannot be arbitrary, capricious, discriminatory, or for personal or political reasons. Enacts new subsection regarding the failure to offer a contract or provide notice of nonrenewal of a contract to a teacher. Provides options which the local board may exercise upon discovery of the absence of a contract. Provides that an individual that mutually modifies a contract with the local board to permit part-time employment or who enters into a part-time contract is not a teacher as defined in new GS 115C-325.1(5).

Amends GS 115C-325.4 to providethatgrounds for dismissal or demotion of a teacher includea justifiable decrease in the number of positions due to district reorganization, decreased enrollment, or decreased funding.

Makes an organizational change, combining, in GS 115C-325.7,the guidelines for a local board hearing regardingthe nonrenewal of a teacher's contract with the guidelines that apply for a board hearing for (1) dismissal, (2) demotion, (3)reduction to part-time employment for disciplinary reasons, or (4) disciplinary suspension without pay. Amends newGS 115C-325.8 to provide fora right of appeal from a final decision ofthe local board to the superior court of the state based on one or more specified grounds.

Adds provision directing the State Board of Education (SBE) to develop by rule as provided in Article 2A of GS Chapter 150B a model contract for local boards to use in awarding teacher contracts. Allows the SBE to adopt a temporary rule for a model contract as provided in GS 150B-21.1 so as to provide a contract to local boards no later than January 1, 2013, but directs the SBE to replace the temporary rule with a permanent rule as soon as is practical.

Repeals GS 115C-325(c)(1) effective May 1, 2013. Provides that individuals who have not received career status before the 2012-13 school year will not be granted career status during the 2012-13 school year. Provides that all teachers without career status prior to the 2012-13 school year will be offered only one-year contracts, except for qualifying teachers offered a four-year contract as provided in new Section 6.(g) of this act. Provides specifications as to the review, by the superintendent,of the performance and evaluations of all teachers employed by the local board for at least three consecutive years and the awarding of four-year contracts to at least 25% of those teachers employed by the local board for three consecutive years beginning with the 2014-15 school year. Provides that teachers employed on a four-year contract by a local board of education will receive a $500 annual payraise for each year of the four-year contract, beginning with the 2014-15school year.

Section 6.(a) of this act repeals GS 115C-325 effective June 30, 2018. Provides that GS 115C-325 only applies to teachers with career status after June 30, 2014. Makes Section 6.(b), dealing with teacher contracts effective July 1, 2014. Provides that GS 115C-325.1 through GS 115C-325.13, as enacted by this act, apply to all teachers on one- or four-year contracts beginning July 1, 2014. Provides that GS 115C-325.1 and GS 115C-325.13 apply to all teachers employed by local boards or the state on July 1, 2018. Makes Section 6.(c), amending GS 115C-45(c) regarding appeals to a local board of education and to superior court, and Section 6.(d), amending GS 115C-287.1 regarding the method of employment of principals, assistant principals, supervisors, and directors, effective July 1, 2014, and applies to all employees employed on or after that date.

Effective July 1, 2014, amends GS 115C-105.38A(d) to provide thatif alicensed staff membertaking the general knowledge test for a second time after completing the remediation planfails topass the test on the second attempt, the SBEof is required to begin a dismissal proceeding under GS 115C-325(q)(2a) or GS 115C-325.13.Further amends GS 115C-105.38A(d), effective June 30, 2018,to provide that theSBE is to begin dismissal proceedings solely under GS 115C-325.13. Effective July 1, 2014, makes conforming changes to GS 115C-105.38A(f) to provide that nothing in this section is to be construed as restricting or postponing dismissal actions under new GS 115C-325.13 or GS 115C-325.4. Effective June 30, 2018, further amends GS 115C-105.38A(f) to provide for the dismissal of a teacher, assistant principal, director, or supervisor only under GS 115C-325.13 and to provide for the dismissal or demotion of an employeefor any of the grounds listed under GS 115C-325.4.

Also makes conforming changes to GS 115C-105.39(b), effective July 1, 2014,to allow dismissal under GS 115C-325.13 or GS 115C-325(q)(2)of teachers, assistant principals, directors, and supervisors assigned to a school identified as low-performing in accordance witheither of those statutes.Effective June 30, 2018, provides that the SBEmay proceed with dismissal under GS 115C-325.13of teachers, assistant principals, directors, and supervisors assigned to a school identified as low-performing under GS 115C-325.13.

Effective July 1, 2014, amends GS 115C-238.68(3) to reinsert language that permits a career status teacher who receives a leave of absence to teach at a regional school to return to a public school in the LEA with career status at the end of the leave of absence or the end of employment at the public school. Also reinserts provision that the teacher's name be placed on a list of available teachers in accordance with GS 115C-325(e)(2), if an appropriate position is not available. Effective June 30, 2018, deletes the aforementioned reinserted provisions.

Current law requires that LEAs conduct at minimum an annual evaluation of all licensed employees at a school identified as low-performing. Effective July 1, 2014, amends GS 115C-333 to provide that if the employee is a teacher (1) with career status as defined under GS 115C-325(a)(6) or (2) a teacher as defined under GS 115C-325.1(5), either the principal, assistant principal who supervises the teacher, oran assistance team is toevaluate the teacher.Also provides that if a licensed employee who receives a below proficient, unsatisfactory, or below standard rating on an evaluation and the employee is a career status teacher, the evaluation team or individual is to recommend to the superintendent that the superintendent recommend to the local board that the career status teacher be dismissed or demoted. Provides that if an employee upon subsequent evaluation fails to become proficient in the performance standards in the mandatory improvement plan, if the employee is a teacher with career status, the career status teacher is to be demoted or dismissed under GS 115C-325 or if the employee is a teacher on contract, the contract is not to be renewed. Requires annual notice to the SBE by a local board that dismisses a career status teacherof a low-performing school for any reason except a reduction in force under GS 115C-325(e)(1)1. or dismisses a contract teacher for cause. Directs the SBE not maintain the dismissed employee's name on a list distributed to local boards if the employee is subsequently employed and receives a proficient rating on all of the performance standards identified as areas of concern on the mandatory improvement plan unless the employee is a career status teacher subsequently dismissed under GS 115C-325 except for a reduction in force or a contract teacher subsequently dismissed under GS 115C-325.4.

Effective July 1, 2014, amends GS 115C-333.1 torequire career status teachers with a four-year contract (was,who have been employed for three years)and assigned to schools not identified as low-performing tobe evaluated annually unless the localboard determines otherwise. Provides criteria for dismissal or demotion of career status teachers and contract teachers that mirror the criteria for career status and contract teachers at low-performing schools. Provides that the absence of a mandatory improvement plan does not prohibit a superintendent from initiating a dismissal proceeding under GS 115C-325 or GS 115C-325.4 (was, under GS 115C-325). Also requires notice to the SBE of a local board's dismissal of a career status teacher for any reason other than a reduction in force and of the dismissal of a contract teacher for cause.

Amends GS 115C-404(b), effective July 1, 2014, to clarify that failing to maintain the confidentiality of documents received under this section (regarding juvenile court information) is grounds for dismissal for employees not employed on contract, employees who are employed on contract, and employees who have attained career teacher status in accordance with GS 115C-325(e)(1)i.Effective June 30, 2018, amends GS 115C-404(b) to apply this section to employees not employed on contractand contract employeesand eliminates reference to career status teachers.

Effective June 30, 2018, further amends GS 115C-333.1to provide for annual evaluations of all teachers who have been employed for three or more years assigned to schools that are not identified as low-performing. Also provides that upon reassessment, if the teacher fails to show proficiency in the required performance measures, the teacher's contract may not be renewed. Requires notice to the SBE of a dismissal by a local board of a teacher for cause or an election to not renew a teacher's contract based on the recommendation of the superintendent.

Amends provisions of GS 143B-146.8, effective July 1, 2014,regarding evaluation of licensed personnel and principals for education programs in residential schoolsto make them applicable to teachers with career status as defined under GS 115C-325(a)(6) and contract teachers as defined in GS 115C-325.1(5). Makes further conforming changes regarding action plans andreevaluation in education programs at residential schools. Effective June 30, 2018, amends GS 143B-146.8, to make distinctions only as to teachers with three or more years of experience and those with less than three years of experience for evaluation purposes at low-performing schoolsand eliminates distinctions based on career status or contract status.

Amends GS 143B-146.7(b), effective June 30, 2018, to provide thatafter identifying a school as low-performing, the SBE is to proceed under GS 115C-325.11 to dismiss licensed instructional personnel assigned to that school (effective July 1, 2014, the SBE is to proceed under GS 115C-325(p1) or GS 115C-325.11).

Except as otherwise provided, this act is effective when it becomes law.