Part I.

Repeals Section 8.3(b), SL 2011-145, requiring the State Board of Community Colleges (State Board) to allocate formula funds appropriated to support curriculum instruction and the occupational education component of continuing education through a formula that provides an instructional base allocation to all colleges and allocates remaining funds on a weighted full-time equivalent (FTE) basis.

Repeals Section 10.4(a), SL 2013-360, requiring community colleges to receive funding based on the number of full-time equivalent (FTE) students enrolled in curriculum, continuing education, and Basic Skills courses, by tiered funding level. 

Directs the State Board to revise its funding formula for community colleges and allocate funds under the revised formula beginning with the 2025-26 fiscal year. Establishes minimum criteria for the revised formula, including that (1) each community college receives a base allocation of funds (2) additional funds be provided based on the number of FTE students enrolled in either curriculum, workforce continuing education, and Basic Skills courses or courses and programming conducted under the Customized Training Program and the Small Business Center Network, and (3) the additional funds be weighted based on the workforce sector of each course as determined by the State Board's consideration of salary data and labor market demand.

Amends GS 115D-5 to require the State Board to review and revise its workforce sector designations for curriculum, workforce continuing education, and Basic Skills courses by July 15, 2028, and every three years thereafter.

Directs the Community College System Office to report to the specified NCGA committee by April 1, 2027, on its revised funding formula, the formula's implementation, and any recommended changes to the revised formula.

Appropriates $93,019,556 in recurring funds to the State Board for 2025-26 to implement the revisions to the funding formula.

Part II.

Amends GS 115D-31 to permit the State Board to allocate receipts from tuition and fees that exceed the amount certified in General Fund Codes at the end of the fiscal year to the community colleges for operating costs according to a formula adopted by the State Board (previously, required those amounts be transferred to the Enrollment Growth Reserve). Specifies that the funds do not revert. Makes conforming deletions.

Enacts GS 115D-31.4, establishing the Enrollment Increase Reserve (Reserve). States the Reserve's purpose, monies, and budget requirements. Authorizes the State Board to allocate monies from the Reserve to a community college with an eligible increase in FTE enrollment, defined as either a 5% or more increase of the budgeted enrollment level in curriculum, workforce continuing education, or Basic Skills courses, or a more than 325 student increase in total FTE enrollment, according to a formula adopted by the State Board. States that the funds do not revert.

Adds to GS 115D-31 to require the State Board to administer the Reserve.

Appropriates $6 million in recurring funds to the Reserve for 2025-26 to be used in accordance with new GS 115D-31.4.

Part III.

Enacts GS 115D-39.2, authorizing a community college to implement a surcharge of up to 10% for tuition for curriculum courses and registration fees for workforce continuing education courses, applicable to all students except those for whom tuition and registration are waived by law or regulation. Requires funds collected to be used to support instruction in curriculum, workforce continuing education, or Basic Skills courses; prohibits use for noninstructional purposes. Directs the State Board to annually report to the specified NCGA committee, beginning February 15, 2026, on expenditures made with funds collected from the surcharge. Details required content of the report. Directs the State Board to adopt implementing rules. Makes clarifying change to the caption of GS 115D-39.1.

Part IV.

Effective July 1, 2025.