House committee substitute amends the 1st edition as follows.

Part I.

Further amends the definition of eligible students, as it applies to opportunity scholarship grants, set out in GS 115C-562.1(3) to include a child whose parent or legal guardian receives an honorable discharge as an active duty member from the uniformed service of the United States within 18 months prior to application. Applies beginning with applications for scholarship funds for the spring semester of the 2021-22 school year. Makes conforming organizational changes.

Further amends GS 115C-562.1(3) to expand the statutory eligibility criteria for eligible students for scholarships to also include a child in foster care (current criteria requires that the child reside in a household with an income level that does not exceed 150% of the amount required for qualification for the federal free or reduced-price lunch program). Prohibits the State Education Assistance Authority from considering the household income of the foster parent in determining eligibility of a foster care child under this provision. Applies beginning with applications for scholarship funds for the 2022-23 school year.

Deletes and replaces the proposed changes to GS 115C-562.8, which governs the Opportunity Scholarship Grant Fund Reserve. Adds provisions to require the Authority to use up to $500,000 of funds appropriated in a particular fiscal year to be used for the award of scholarships in the following fiscal year that are unexpended at the end of the fiscal year in which the funds were appropriated to contract with a nonprofit representing parents and families for outreach and scholarship education and application assistance for parents and students, with remaining funds required to be carried forward for one fiscal year and used to award scholarships pursuant to the statute before reverting any unexpended funds to the General Fund (current law only provides for carrying forward unexpended appropriations for one year to award scholarship grants).

Makes a technical change regarding new GS 115C-567.1 regarding the Authority's authority to contract with a nonprofit for outreach and assistance for students and parents. Places the new statute in new Part 4A (was 5) of Article 39. Makes a technical change.

Part II.

Makes the following changes to Article 41 of GS Chapter 115C concerning Personal Education Student Accounts for Children with Disabilities.

Amends GS 115C-592 by specifying that an eligible student may be awarded scholarship funds from the NC Personal Education Student Accounts for Child with Disabilities Program if the student has been determined to have one or more of the specified disabilities as a primary or secondary disability on the student’s eligibility determination form from the local education agency at the time of application (previously did not refer to the form).

Amends GS 115C-595 by amending the qualifying education expense for which the funds may be used, as follows. (1) Allows the funds deposited into a personal education student account to be used for tuition and fees for a GS 115C-526.5 (appears to intend GS 115C-562.5) compliant school (was, tuition and fees for a nonpublic school). Defines a GS 115C-562.5 compliant school in GS 115C-591 as a Part 1 or 2 nonpublic school that consents to comply with the requirements of GS 115C-562.5 (which sets out the obligations of a nonpublic school that accepts eligible students receiving scholarship grants). Defines a Part 1 or 2 nonpublic school as a nonpublic school that meets the requirements of Part 1 (Private Church Schools and Schools of Religious Charter) or Part 2 (Qualified Nonpublic Schools) of Article 39 of GS Chapter 115C, as identified and deemed eligible by the Division of Nonpublic Education. (2) Allows the funds to be used by a parent of an eligible student to pay tuition to a Part 1 or Part 2 nonpublic school that is not a GS 115C-526.5 (appears to intend GS 115C-562.5) compliant school (was, to pay tuition to certain schools) with funds other than funds available in the personal education student account and then request reimbursement from scholarship funds if the parent complies with specified requirements.

Amends GS 115C-595(a1) concerning the disbursement of funds, to require the method by which the State Education Assistance Authority disburses scholarship funds for tuition at a nonpublic school be based upon whether the school is a GS 115C-562.5 compliant school (was, required funds to be disbursed based on whether the nonpublic school elects scholarship endorsement for tuition or reimbursement for tuition). Makes conforming changes by making the process for scholarship endorsement for tuition applicable to eligible students who attend GS 115C-562.5 compliant schools and the process for tuition reimbursement applicable to parents or guardians of an eligible student enrolled in a Part 1 or 2 nonpublic school that is not a GS 115C-562.5 compliant school. Makes conforming changes to an internal cross-reference.

Part III.

Replaces the provisions of proposed GS 153A-460 with the following. Authorizes counties to appropriate up to $1,000 per child residing in the county who is enrolled in a nonpublic school located within the county to supplement the qualifying child's K-12 scholarship award for the school year. Defines a K-12 scholarship as a State-funded scholarship awarded to a student for educational purposes in accordance with Part 2A of Article 39 (nonpublic school scholarship grants) or Article 41 (personal education savings accounts) [the previous edition also included scholarships awarded under Part 1H of Article 9 (special education scholarships for children with disabilities)]. Authorizes counties to annually request de-identified data from the Authority to use as a basis for determining the amount of funds to appropriate for award of supplemental funds for the following fiscal year. Allows counties to award supplemental funds for eligible students receiving scholarships under one or both qualifying K-12 scholarships. Requires counties appropriating supplemental funds to annually remit the funds to the Authority by July 15, with the Authority acting as the fiscal agent for the county in the disbursement of funds to eligible students. Makes conforming changes to no longer amend GS 115C-112.6 concerning special education scholarships, or amend new GS 153-460, effective July 1, 2022, concerning special education scholarships.

Makes the following changes to proposed GS 115C-562.2(f), concerning nonpublic school scholarship grants, and GS 115C-592(f), concerning personal education savings accounts, to provide for the supplemental county scholarships' requirements and disbursement by the Authority under each scholarship program. Adds that the Authority must require applicants to state their county of residence in the application and verify residency as provided in state law. Makes conforming changes regarding the Authority's duty to provide de-identified data for the current school year to a requesting county by February 15, if requested by January 15 (as required in new GS 153A-460 as amended). Mandates that the funds cannot supplant State funds. Requires rather than authorizes the Authority to adopt rules for the disbursement of funds. Makes further technical and clarifying changes. 

Now provides for the above changes beginning with county budget ordinances adopted for the 2022-23 fiscal year (was 2021-22 fiscal year) that provide funds for students receiving scholarship funds for the 2022-23 school year (was 2021-22 school year).

Effective June 30, 2021, authorizes the Authority to use up to $300,000 of any unexpended funds appropriated in the 2019-20 fiscal year for the award of scholarship grants for the 2020-21 school year under GS 115C-562.8 to establish the infrastructure for the supplemental local scholarship funds for the 2021-22 fiscal year.