H 1178

GENERAL ASSEMBLY OF NORTH CAROLINA
  SESSION 2025
 H  1
  HOUSE BILL 1178
 Short Title:    The NC Teacher Pay Competitiveness Act.  (Public)
 Sponsors:      Representatives Rubin, Prather, R. Pierce, and F. Jackson (Primary Sponsors).
  For a complete list of sponsors, refer to the North Carolina General Assembly web site.
 Referred to:   Rules, Calendar, and Operations of the House
  May 4, 2026
1A BILL TO BE ENTITLED
2 AN ACT TO INCREASE TEACHER COMPENSATION AND ESTABLISH A PHASED
3     FRAMEWORK FOR CONTINUED COMPENSATION INCREASES FOR TEACHERS
4     OVER TIME IN ORDER TO COMPETE WITH PEER STATES IN THE
5     SOUTHEASTERN UNITED STATES AND TO REVISE ELIGIBILITY
6     REQUIREMENTS AND REDUCE FUNDS FOR THE OPPORTUNITY SCHOLARSHIP
7     PROGRAM.
8Whereas, the North Carolina General Assembly has demonstrated a dangerous
9 inability to enact a comprehensive biennial State budget prior to the start of the fiscal year; and
10Whereas, operating under the budget continuation statute due to legislative gridlock
11 leaves critical investments in our public workforce frozen, including stagnant and unfunded
12 salaries for public school educators; and
13Whereas, in contrast, funding for private school vouchers through the Opportunity
14 Scholarship program has been statutorily codified to expand automatically, fully insulating
15 private school subsidies from the very budget impasses that freeze funding for public schools;
16 and
17Whereas, the unchecked, automatic diversion of increasingly vast sums of public
18 taxpayer dollars to private institutions threatens the State's ability to fulfill its constitutional
19 obligation to provide every child with a sound, basic education; and
20Whereas, average public school teacher compensation in North Carolina currently
21 lags behind every bordering state, severely undermining this State's ability to recruit and retain
22 highly qualified educators; and
23Whereas, it is the intent of the General Assembly to demonstrate to the teachers of
24 this State that it will invest in their long-term growth in this State, as they serve the vast majority
25 of students in North Carolina; and
26Whereas, this act will establish a phased, legally protected escalation of funding
27 designed to ensure that North Carolina, at minimum, continues to stay competitive in the
28 southeastern United States, as defined by the Department of Public Instruction, for teacher pay
29 through at least the 2032-2033 school year; Now, therefore,
30 The General Assembly of North Carolina enacts:
31
32 PART I. PERMANENT TEACHER RAISES
33SECTION 1.(a) Article 20 of Chapter 115C of the General Statutes is amended by
34 adding the following new sections to read:
35 "§ 115C-302.5A. Teacher salary schedules.
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 General Assembly Of North Carolina  Session 2025
1     (a)     The following monthly teacher salary schedule shall apply for the 2026-2027 fiscal
2 year to licensed personnel of the public schools who are classified as teachers. The salary
3 schedule is based on years of teaching experience.
42026-2027 Teacher Monthly Salary Schedule
5Years of Experience  "A" Teachers
60  $4,387
71  $4,467
82  $4,548
93  $4,628
104  $4,708
115  $4,788
126  $4,892
137  $4,989
148  $5,086
159  $5,183
1610  $5,280
1711  $5,377
1812  $5,474
1913  $5,570
2014  $5,668
2115-24  $5,765
2225+  $5,987
23     (b)     Beginning with the 2027-2028 fiscal year and ending with the 2032-2033 fiscal year,
24 the Department of Public Instruction shall raise the monthly amounts for each step of the teacher
25 salary schedule each fiscal year by three and sixty-seven hundredths percent (3.67%).
26     (c)     Beginning in the 2033-2034 fiscal year and annually thereafter, the Department of
27 Public Instruction shall raise the monthly amounts for each step of the teacher salary schedule
28 for each fiscal year by the sum of one plus the 12-month percent change in the second quarter
29 Employment Cost Index for elementary and secondary school workers as reported by the Federal
30 Bureau of Labor Statistics.
31     (d)     Salary Supplements for Teachers Paid on This Salary Schedule. –
32(1)    Licensed teachers who have NBPTS certification shall receive a salary
33supplement each month of twelve percent (12%) of their monthly salary on
34the "A" salary schedule.
35(2)    Licensed teachers who are classified as "M" teachers shall receive a salary
36supplement each month of ten percent (10%) of their monthly salary on the
37"A" salary schedule.
38(3)    Licensed teachers with licensure based on academic preparation at the
39six-year degree level shall receive a salary supplement of one hundred
40twenty-six dollars ($126.00) per month in addition to the supplement provided
41to them as "M" teachers.
42(4)    Licensed teachers with licensure based on academic preparation at the
43doctoral degree level shall receive a salary supplement of two hundred
44fifty-three dollars ($253.00) per month in addition to the supplement provided
45to them as "M" teachers.
46(5)    Certified school nurses shall receive a salary supplement each month of ten
47percent (10%) of their monthly salary on the "A" salary schedule.
48(6)    School counselors who are licensed as counselors at the master's degree level
49or higher shall receive a salary supplement each month of one hundred dollars
50($100.00).
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1     (e)     For school psychologists, school speech pathologists who are licensed as speech
2 pathologists at the master's degree level or higher, and school audiologists who are licensed as
3 audiologists at the master's degree level or higher, the following shall apply:
4(1)     The first step of the salary schedule shall be equivalent to the sixth step of the
5"A" salary schedule.
6(2)     These employees shall receive the following salary supplements each month:
7a.      Ten percent (10%) of their monthly salary, excluding the supplement
8provided pursuant to sub-subdivision b. of this subdivision.
9b.      Three hundred fifty dollars ($350.00).
10(3)     These employees are eligible to receive salary supplements equivalent to those
11of teachers for academic preparation at the six-year degree level or the
12doctoral degree level.
13(4)     The twenty-sixth step of the salary schedule shall be seven and one-half
14percent (7.5%) higher than the salary received by these same employees on
15the twenty-fifth step of the salary schedule.
16     (f)     Beginning with the 2014-2015 fiscal year, in lieu of providing annual longevity
17 payments to teachers paid on the teacher salary schedule, the amounts of those longevity
18 payments are included in the monthly amounts under the teacher salary schedule.
19     (g)     A teacher compensated in accordance with this salary schedule shall receive an
20 amount equal to the greater of the following:
21(1)     The applicable amount on the salary schedule for the applicable school year.
22(2)     For teachers who were eligible for longevity for the 2013-2014 school year,
23the sum of the following:
24a.      The salary the teacher received in the 2013-2014 school year pursuant
25to Section 35.11 of S.L. 2013-360.
26b.      The longevity that the teacher would have received under the longevity
27system in effect for the 2013-2014 school year provided in Section
2835.11 of S.L. 2013-360 based on the teacher's current years of service.
29c.      The annual bonus provided in Section 9.1(e) of S.L. 2014-100.
30(3)     For teachers who were not eligible for longevity for the 2013-2014 school
31year, the sum of the salary and annual bonus the teacher received in the
322014-2015 school year pursuant to Section 9.1 of S.L. 2014-100.
33     (h)     No later than February 15, 2027, and annually thereafter, the Department of Public
34 Instruction shall report to the Joint Legislative Education Oversight Committee and publish on
35 its website the teacher salary schedule developed for the upcoming fiscal year in accordance with
36 this section and any other enactment of the General Assembly.
37     (i)     As used in this section, the term "teacher" shall also include instructional support
38 personnel.
39 "§ 115C-302.5C. Teacher Salary Reserve.
40     (a)     The Teacher Salary Reserve is established as a reserve to be administered by the
41 Department of Public Instruction for the purpose of providing teacher raises in accordance with
42 G.S. 115C-302.5A. The Reserve shall consist of monies appropriated from the General Fund to
43 the Reserve by the General Assembly and any interest accrued to it thereon. The Department
44 shall only use monies in the Reserve in accordance with the purposes set forth in this section.
45     (b)     The General Assembly finds that, due to the unacceptable failure of the General
46 Assembly to timely pass the Current Operations Appropriations Act in recent years, as required
47 of the General Assembly, it is imperative that the State provide funds for increased teacher
48 salaries over time, similar to funds provided for opportunity scholarship grants under
49 G.S. 115C-562.8, as it existed immediately prior to its repeal, to protect against future failures to
50 pass a Current Operations Appropriations Act. The General Assembly further finds that the
51 State's continued low pay for teachers represents a strategic threat to the future prosperity of the
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1 people of this State, and it is therefore imperative that North Carolina reach the average of teacher
2 salary in the southeastern United States by 2032. Therefore, there is appropriated from the
3 General Fund to the Reserve the following amounts for each fiscal year to be used for the
4 purposes set forth in this section:
5Fiscal Year  Appropriation
62026-2027  $825,100,000
72027-2028  $1,048,200,000
82028-2029  $1,271,300,000
92029-2030  $1,494,400,000
102030-2031  $1,717,500,000
112031-2032  $1,940,600,000
122032-2033  $2,163,700,000
13     For each fiscal year after the 2032-2033 fiscal year, the amount appropriated from the General
14 Fund to the Reserve shall be increased by the sum of two hundred eighty-three million two
15 hundred thousand dollars ($283,200,000) over the amount appropriated under this subsection for
16 the preceding fiscal year. When developing the base budget, as defined by G.S. 143C-1-1, for
17 each fiscal year specified in this subsection, the Director of the Budget shall include the
18 appropriated amount specified in this subsection for that fiscal year.
19 "§ 115C-302.6. Supplemental funds for teacher compensation.
20     (a)     Use of Funds. – To the extent funds are made available for this purpose, except as
21 provided in subsection (g) of this section, the State Board of Education shall allocate funds
22 pursuant to this section to eligible local school administrative units to provide salary supplements
23 to teachers and qualifying school administrators in those units. Allocation of salary supplements
24 among teachers and qualifying school administrators within each eligible local school
25 administrative unit, including whether a teacher or qualifying school administrator receives a
26 salary supplement and the amount of the supplement provided to that person, shall be determined
27 in the discretion of the local board of education of the eligible unit, except that no individual
28 salary supplement shall exceed the per teacher funding amount awarded to that unit pursuant to
29 subdivision (4) of subsection (c) of this section.
30     (b)     Definitions. – As used in this section, the following definitions shall apply:
31(1)     Adjusted market value of taxable real property. – A county's assessed taxable
32real property value, using the latest available data published by the
33Department of Revenue, divided by the county's sales assessment ratio
34determined under G.S. 105-289(h).
35(2)     Composite value. – For each eligible county, the sum of the following:
36a.       The taxable real property factor multiplied by sixty-five percent
37(65%).
38b.       The median household income factor multiplied by twenty-five
39percent (25%).
40c.       The effective tax rate factor multiplied by ten percent (10%).
41(3)     County allocation factor. – For each eligible county, the supplement factor for
42that county divided by the sum of all supplement factors for the State.
43(4)     Effective tax rate. – The actual county tax rate multiplied by the most recent
44annual sales assessment ratio for that county.
45(5)     Effective tax rate factor. – For each eligible county, the effective tax rate for
46that county divided by the median effective tax rate in the State.
47(6)     Eligible county. – A county that has an adjusted market value of taxable real
48property of less than fifty billion nine hundred million dollars
49($50,900,000,000).
50(7)     Eligible local school administrative unit. – A local school administrative unit
51located in whole or in part in an eligible county.
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1(8)     Eligible school. – A public school that is located in an eligible county and
2governed by a local school administrative unit.
3(9)      Maintenance of effort amount. – For each local school administrative unit in
4each fiscal year the total non-State funds expended for salary supplements for
5teachers in the 2020-2021 fiscal year.
6(10) Median household income. – A county's median household income for the
7most recent 12 months for which data are available, as that term is used in
8G.S. 143B-437.08.
9(11) Median household income factor. – For each eligible county, the median
10household income in the State divided by the median household income for
11that county.
12(12) Non-State funds. – Any funds held by a local school administrative unit, other
13than nonrecurring federal funds received as a result of legislation enacted by
14Congress in response to COVID-19, that are not State funds.
15(13) Qualifying school administrator. – Any of the following:
16a.       Assistant principals paid pursuant to G.S. 115C-285(a)(8).
17b.       Principals paid pursuant to G.S. 115C-285(a)(8a).
18(14) Supplement factor. – For each eligible county, the composite value multiplied
19by the number of State-funded teachers employed in a school in the county
20that is governed by a local school administrative unit.
21(15) Taxable real property factor. – For each eligible county, the median adjusted
22market value of taxable real property in the State divided by the adjusted
23market value of taxable real property for that county.
24(16) Teacher. – Teachers and instructional support personnel.
25    (c)     Allocation of Funds. – The State Board of Education shall allocate funds for salary
26 supplements to eligible local school administrative units according to the following procedure:
27(1)      County allocation. – For each eligible county, the State Board shall determine
28a county allocation by multiplying the county allocation factor for that county
29by the funding amount appropriated pursuant to this section for the applicable
30fiscal year.
31(2)      Per teacher funding amount. – For each eligible county, the State Board shall
32determine a per teacher funding amount by dividing the county allocation
33amounts determined pursuant to subdivision (1) of this subsection by the total
34number of State-funded teachers employed in all eligible schools in that
35county.
36(3)      Unit funding amount. – For each eligible local school administrative unit, the
37State Board shall determine the funding amount for that unit based on the per
38teacher funding amount or amounts for the eligible county or counties where
39the unit is located. For each county with an eligible school governed by the
40unit, the State Board shall multiply the applicable per teacher funding amount
41for that county determined pursuant to subdivision (2) of this subsection by
42the number of State-funded teachers employed in the eligible school in that
43county. If the unit is located in multiple eligible counties, the State Board shall
44aggregate those amounts.
45(4)      Allocation and funding cap. – The State Board shall allocate the amount
46determined pursuant to subdivision (3) of this subsection to each eligible local
47school administrative unit for each applicable fiscal year, up to a maximum of
48five thousand dollars ($5,000) per State-funded teacher.
49    (d)     Charter Schools. – Funds appropriated to the Department of Public Instruction
50 pursuant to this section shall be subject to the allocation of funds for charter schools described in
51 G.S. 115C-218.105. The General Assembly encourages charter schools receiving funds pursuant
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1 to this section to provide salary supplements to teachers and qualifying school administrators in
2 the charter school in accordance with the requirements of this section.
3     (e)      Formula for Distribution of Supplemental Funding Pursuant to this Section Only. –
4 The formula in this section is solely a basis for distribution of supplemental funding to eligible
5 local school administrative units and is not intended to reflect any measure of the adequacy of
6 the educational program or funding for public schools. The formula is also not intended to reflect
7 any commitment by the General Assembly to appropriate any additional supplemental funds for
8 eligible local school administrative units.
9     (f)      Nonsupplant Requirement. – A local school administrative unit that receives funds
10 under this section shall use those funds to supplement non-State funds provided for salary
11 supplements for teachers and qualifying school administrators and shall not use any State funds,
12 including funds received under this section, Section 3.3 of S.L. 2025-89, Section 7A.4 of S.L.
13 2023-134, or Section 7A.12 of S.L. 2021-180, to supplant non-State funds provided for salary
14 supplements for teachers and qualifying school administrators. For purposes of this section, a
15 local school administrative unit has supplanted non-State funds if the State Board finds that the
16 amount of non-State funds expended by the unit for salary supplements was less than ninety-five
17 percent (95%) of the maintenance of effort amount for the local school administrative unit.
18     (g)      Nonsupplant Enforcement. – The State Board of Education shall not allocate any
19 funds under this section to a local school administrative unit if it determines that the unit has
20 supplanted non-State funds in violation of subsection (f) of this section.
21     (h)      Reports. – No later than April 15 of each year funds are provided under this section,
22 the State Board of Education shall report the following information for the applicable fiscal year
23 to the Joint Legislative Education Oversight Committee and the Fiscal Research Division:
24(1)    A list of all eligible counties and eligible local school administrative units.
25(2)    Funds allocated to each eligible local school administrative unit.
26(3)    The percentage and amount of teachers and qualifying school administrators
27in each eligible local school administrative unit receiving salary supplements.
28(4)    The average salary supplement amount in each eligible local school
29administrative unit.
30(5)    The range of salary supplement amounts in each eligible local school
31administrative unit.
32(6)    The effect of the salary supplements on the retention of teachers and
33qualifying school administrators in eligible local school administrative units.
34(7)    The identity of any local school administrative unit that the State Board
35determines has supplanted funds."
36SECTION 1.(b) Section 3.3 of S.L. 2025-89 reads as rewritten:
37     "SECTION 3.3. Notwithstanding subdivisions (5) and (6) of G.S. 143C-5-4(b), during the
38 period of continuing budget authority that begins July 1, 2025, all of the following apply:
39…
40(6)    Supplemental funds for teacher compensation for the 2025-2026 fiscal year
41are authorized pursuant to the requirements of Section 7A.4 of S.L. 2023-134,
42as amended by Section 1.7B of S.L. 2024-39, notwithstanding any limitation
43to the 2023-2025 fiscal biennium."
44SECTION 1.(c) This section becomes effective July 1, 2026, and applies beginning
45 with the 2026-2027 school year.
46
47 PART II. REVISE ELIGIBILITY REQUIREMENTS AND REDUCE FUNDS FOR THE
48 OPPORTUNITY SCHOLARSHIP PROGRAM
49SECTION 2.(a) G.S. 115C-562.1 reads as rewritten:
50 "§ 115C-562.1. Definitions.
51     The following definitions apply in this Part:
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1…
2(3a)    Eligible student. – A student residing in North Carolina who has not yet
3received a high school diploma and who meets all of the following
4requirements:
5a.      Is eligible to attend a North Carolina public school pursuant to Article
625 of this Chapter. A child who is the age of 4 on or before April 16 is
7eligible to attend the following school year if the principal, or
8equivalent, of the school in which the child seeks to enroll finds that
9the student meets the requirements established by the Authority
10pursuant to G.S. 115C-562.2(d) and those findings are submitted to the
11Authority.
12b.      Has not been enrolled in a postsecondary institution as a full-time
13student taking at least 12 hours of academic credit.
14c.      Has not been placed in a nonpublic school or facility by a public
15agency at public expense.
16…
17(3d)    Eligible student. – A student residing in North Carolina who has not yet
18received a high school diploma and who meets all of the following
19requirements:
20a.      Meets one of the following criteria:
211.     Was a student (i) assigned to and attending a public school
22full-time pursuant to G.S. 115C-366 or (ii) enrolled full-time
23in a Department of Defense Elementary and Secondary School,
24established pursuant to 10 U.S.C. § 2164 and located in North
25Carolina, during the spring semester prior to the school year
26for which the student is applying.
272.     Received a scholarship grant for the school year prior to the
28school year for which the student is applying.
293.     Is eligible to enter kindergarten, first grade, or second grade
30pursuant to Article 25 of this Chapter. A child who is the age
31of 4 on or before April 16 is eligible to attend the following
32school year if the principal, or equivalent, of the school in
33which the child seeks to enroll finds that the student meets the
34requirements established by the Authority pursuant to
35G.S. 115C-562.2(d) and those findings are submitted to the
36Authority with the child's application.
374.     Is a child in foster care as defined in G.S. 131D-10.2(9).
385.     Is a child whose adoption decree was entered not more than
39one year prior to submission of the scholarship grant
40application.
416.     Is a child whose parent or legal guardian (i) is on full-time duty
42status in the active uniformed service of the United States,
43including members of the National Guard and Reserve on
44active duty orders pursuant to 10 U.S.C. § 12301, et seq., and
4510 U.S.C. § 12401, et seq., or (ii) receives an honorable
46discharge as an active duty member from the uniformed service
47of the United States within 12 months prior to application.
487.     Is a child who meets both of the following:
49I.       Was enrolled in a nonpublic school that meets the
50requirements of Part 1 and Part 2 of this Article during
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1the spring semester prior to the school year for which
2the student is applying.
3II.      Was enrolled for the entire school year immediately
4prior to the school year in which the student enrolled in
5the nonpublic school in one of the following:
6A.      A North Carolina public school.
7B.      A Department of Defense Elementary and
8Secondary School established pursuant to 10
9U.S.C. § 2164 and located in North Carolina.
10a1.     Has not enrolled in a postsecondary institution in a matriculated status
11eligible for enrollment for 12 hours of academic credit.
12b.      Meets one of the following criteria:
131.      Resides in a household with an income level not in excess of
14two hundred percent (200%) of the amount required for the
15student to qualify for the federal free or reduced-price lunch
16program. The Authority shall not count any distribution from
17the estate of a decedent in calculating the income level of the
18applicant's household for the purposes of determining
19eligibility for a scholarship under this sub-sub-subdivision.
202.      Is a child in foster care as defined in G.S. 131D-10.2. The
21Authority shall not consider the household income of the foster
22parent, as defined in G.S. 131D-10.2, in determining the
23eligibility of a foster care child.
24(3e)    Full-time student. – A student enrolled exclusively in a nonpublic school for
25elementary or secondary education whose parents have released the local
26school administrative unit the student is eligible to attend under
27G.S. 115C-366 of all obligations to educate the eligible student while the
28eligible student is receiving a scholarship grant under this Part.
29…
30(5b)    Part-time student. – A student enrolled part-time in a public school and
31part-time in a nonpublic school.
32…."
33SECTION 2.(b) G.S. 115C-562.2 reads as rewritten:
34 "§ 115C-562.2. Scholarship grants.
35     (a)     The Authority shall make available no later than February 1 annually applications to
36 eligible students for the award of scholarship grants to attend any nonpublic school on a full- or
37 part-time basis. school. Information about scholarship grants and the application process shall be
38 made available on the Authority's Web site. Beginning March 15, the Authority shall begin
39 awarding scholarship grants to students who have applied by March 1 in the following
40 order:according to the following criteria:
41(1)     Eligible First priority shall be given to eligible students who received a
42scholarship grant for the school year prior to the school year for which the
43students are applying.applying if those students have applied by March 1.
44(2)     Eligible students qualifying for a scholarship grant in the amount provided
45under subdivision (1) of subsection (b2) of this section.After scholarship
46grants have been awarded to prior recipients as provided in subdivision (1) of
47this subsection, scholarships shall be awarded with remaining funds as
48follows:
49a.      At least fifty percent (50%) of the remaining funds shall be used to
50award scholarship grants to eligible students residing in households
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1with an income level not in excess of the amount required for the
2student to qualify for the federal free or reduced-price lunch program.
3b.      Any remaining funds shall be used to award scholarship grants to all
4other eligible students.
5(3)     Eligible students qualifying for a scholarship grant in the amount provided
6under subdivision (2) of subsection (b2) of this section.
7(4)     Eligible students qualifying for a scholarship grant in the amount provided
8under subdivision (3) of subsection (b2) of this section.
9(5)     All other students.
10      (a1) Scholarship grants awarded to eligible students residing in households with an income
11 level not in excess of the amount required for the student to qualify for the federal free or
12 reduced-price lunch program shall be, per year per eligible student, in an amount of up to seven
13 thousand nine hundred forty-two dollars ($7,942) for full-time students or up to three thousand
14 nine hundred seventy-one dollars ($3,971) for part-time students. Scholarship grants awarded to
15 eligible students residing in households with an income level in excess of the amount required
16 for the student to qualify for the federal free or reduced-price lunch program shall be for amounts
17 of not more than seven thousand one hundred forty-eight dollars ($7,148) for full-time students
18 or three thousand five hundred seventy-four dollars ($3,574) for part-time students. Tuition and
19 fees for a nonpublic school may include tuition and fees for books, transportation, equipment, or
20 other items required by the nonpublic school. No scholarship grant shall exceed the required
21 tuition and fees for the nonpublic school the eligible student will attend.
22      …
23      (b2) Scholarship grants shall be awarded to eligible students as follows:
24(1)     For students residing in households with an income level not in excess of the
25amount required for the student to qualify for the federal free or reduced-price
26lunch program, per year per eligible student, an amount of up to one hundred
27percent (100%) of the average State per pupil allocation for average daily
28membership in the prior fiscal year.
29(2)     For students residing in households with an income level between the amount
30required for the student to qualify for the federal free or reduced-price lunch
31program and not in excess of two hundred percent (200%) of that amount, per
32year per eligible student, an amount of up to ninety percent (90%) of the
33average State per pupil allocation for average daily membership in the prior
34fiscal year.
35(3)     For students residing in households with an income level of between two
36hundred percent (200%) of the amount required for the student to qualify for
37the federal free or reduced-price lunch program and not in excess of four
38hundred fifty percent (450%) of that amount, per year per eligible student, an
39amount of up to sixty percent (60%) of the average State per pupil allocation
40for average daily membership in the prior fiscal year.
41(4)     For all students, per year per eligible student, an amount of up to forty-five
42percent (45%) of the average State per pupil allocation for average daily
43membership in the prior fiscal year, unless the student qualifies for a higher
44amount under this subsection.
45      (b3) Tuition and fees for a nonpublic school may include tuition and fees for books,
46 transportation, equipment, or other items required by the nonpublic school.
47      (b4) No scholarship grant shall exceed, per year per eligible student, an amount equal to
48 one hundred percent (100%) of the average State per pupil allocation for average daily
49 membership in the prior fiscal year, and no scholarship grant shall exceed the required tuition
50 and fees for the nonpublic school the eligible student will attend.
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1     (b5) In addition to the amount of the scholarship grant, for any student receiving a
2 scholarship grant in grades three, eight, or 11, the Authority shall provide to the nonpublic school
3 an amount equal to the cost of the nationally standardized test required to be administered as
4 provided in G.S. 115C-562.5.
5     …."
6SECTION 2.(c) G.S. 115C-562.8 reads as rewritten:
7 "§ 115C-562.8. The Opportunity Scholarship Grant Fund Reserve.
8     …
9     (b)      The General Assembly finds that, due to the critical need in this State to provide
10 opportunity for school choice for North Carolina students, it is imperative that the State provide
11 an increase of funds for 15 years to the Opportunity Scholarship Grant Fund Reserve. Therefore,
12 there There is appropriated from the General Fund to the Reserve the following amounts for each
13 fiscal year to be used for the purposes set forth in this section:
14Fiscal Year Appropriation
15…
162027-2028       $700,000,000$320,000,000
172028-2029       $725,000,000$305,000,000
182029-2030       $750,000,000$280,000,000
192030-2031       $775,000,000$265,000,000
202031-2032       $800,000,000$250,000,000
21     For the 2032-2033 fiscal year and each fiscal year thereafter, there is appropriated from the
22 General Fund to the Reserve the sum of eight hundred twenty-five million dollars ($825,000,000)
23 two hundred thirty-five million dollars ($235,000,000) to be used for the purposes set forth in
24 this section. When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year
25 specified in this subsection, the Director of the Budget shall include the appropriated amount
26 specified in this subsection for that fiscal year.
27     …."
28SECTION 2.(d) Notwithstanding G.S. 115C-562.1 and G.S. 115C-562.2, as
29 amended by subsection (a) of this section, any eligible student who receives a scholarship
30 pursuant to Part 2A of Article 39 of Chapter 115C of the General Statutes in the 2026-2027
31 school year shall be eligible to receive a scholarship in the 2027-2028 fiscal year. The award
32 shall be at the same amount the student received in the 2026-2027 school year.
33SECTION 2.(e) Notwithstanding G.S. 115C-562.8 and any other provision of law
34 to the contrary, the unencumbered, nonrecurring funds available for the award of opportunity
35 scholarship grants pursuant to Part 2A of Article 39 of Chapter 115C of the General Statutes at
36 the end of the 2025-2026 fiscal year that would otherwise be carried forward in the 2026-2027
37 fiscal year pursuant to G.S. 115C-562.8(d)(2) shall be reduced by the sum of one hundred fifty
38 million dollars ($150,000,000) in nonrecurring funds.
39SECTION 2.(f) Notwithstanding any other provision of law to the contrary, the
40 funds appropriated for the 2026-2027 fiscal year to the Opportunity Scholarship Grant Fund
41 Reserve for the award of opportunity scholarship grants pursuant to Part 2A of Article 39 of
42 Chapter 115C of the General Statutes in the 2027-2028 fiscal year shall be reduced by the sum
43 of one hundred ten million dollars ($110,000,000) in recurring funds.
44SECTION 2.(g) This section is effective when it becomes law and applies beginning
45 with applications for the award of scholarship grants in the 2027-2028 school year.
46
47 PART III. EFFECTIVE DATE
48SECTION 3. Except as otherwise provided, this act is effective when it becomes
49 law.
 Page 10  House Bill 1178-First Edition