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North Carolina Senate Bill S389

North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S389 Compare Versions

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11 GENERAL ASSEMBLY OF NORTH CAROLINA
22 SESSION 2025
3-S 1
4-SENATE BILL 389
3+S D
4+SENATE BILL DRS35167-MTa-43
5+
56
67
78 Short Title: Add Home Schools to Opportunity Scholarships. (Public)
89 Sponsors: Senator Burgin (Primary Sponsor).
9-Referred to: Rules and Operations of the Senate
10-March 25, 2025
11-*S389 -v-1*
10+Referred to:
11+
12+*DRS35167 -MTa-43*
1213 A BILL TO BE ENTITLED 1
1314 AN ACT TO PERMIT OPPORTUNITY SCHOLARSHIPS TO BE AWARDED TO 2
1415 STUDENTS IN HOME SCHOOL S AND TO APPROPRIATE FUNDS FOR THAT 3
1516 PURPOSE. 4
1617 The General Assembly of North Carolina enacts: 5
1718 SECTION 1.(a) G.S. 115C-562.1 reads as rewritten: 6
1819 "§ 115C-562.1. Definitions. 7
1920 The following definitions apply in this Part: 8
2021 (1) Authority. – The State Education Assistance Authority. 9
2122 (2) Division. – The Division of Nonpublic Education, Department of 10
2223 Administration. 11
2324 (3) Repealed by Session Laws 2023-134, s. 8A.6(a), effective July 1, 2023. 12
2425 (3a) Eligible student. – A student residing in North Carolina who has not yet 13
2526 received a high school diploma and who meets all of the following 14
2627 requirements: 15
2728 a. Is eligible to attend a North Carolina public school pursuant to Article 16
2829 25 of this Chapter. A child who is the age of 4 on or before April 16 is 17
2930 eligible to attend the following school year if the principal, or 18
3031 equivalent, of the school in which the child seeks to enroll finds that 19
3132 the student meets the requirements established by the Authority 20
3233 pursuant to G.S. 115C-562.2(d) and those findings are submitted to the 21
3334 Authority. 22
3435 b. Has not been enrolled in a postsecondary institution as a full-time 23
3536 student taking at least 12 hours of academic credit. 24
3637 c. Has not been placed in a nonpublic school or facility by a public 25
3738 agency at public expense. 26
3839 (3c) Repealed by Session Laws 2023-134, s. 8A.6(a), effective July 1, 2023. 27
3940 (3d) Home school. – A nonpublic school that meets the requirements of Part 3 of 28
4041 Article 39 of this Chapter, as identified by the Division. 29
4142 (4) Local school administrative unit. – A local school administrative unit, charter 30
4243 school, or regional school. 31
4344 (5) Nonpublic school. – A school that meets the requirements of Part 1 or Part 2 32
4445 Part 1, Part 2, or Part 3 of this Article as identified by the Division. 33
4546 (5c) Repealed by Session Laws 2023-134, s. 8A.6(a), effective July 1, 2023. 34
4647 (5d) Private school. – A school that meets the requirements of Part 1 or Part 2 of 35
47-this Article as identified by the Division. 36 General Assembly Of North Carolina Session 2025
48-Page 2 Senate Bill 389-First Edition
48+this Article as identified by the Division. 36
49+FILED SENATE
50+Mar 24, 2025
51+S.B. 389
52+PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
53+Page 2 DRS35167-MTa-43
4954 (5e) Reserve. – The Opportunity Scholarship Grant Fund Reserve established 1
5055 under G.S. 115C-562.8. 2
5156 (6) Scholarship grants. – Grants awarded annually by the Authority to eligible 3
5257 students." 4
5358 SECTION 1.(b) G.S. 115C-562.2 reads as rewritten: 5
5459 "§ 115C-562.2. Scholarship grants. 6
5560 (a) The Authority shall make available no later than February 1 annually applications to 7
5661 eligible students for the award of scholarship grants to attend any nonpublic school on a full- or 8
5762 part-time basis. Information about scholarship grants and the application process shall be made 9
5863 available on the Authority's Web site. Beginning March 15, the Authority shall begin awarding 10
5964 scholarship grants to students who have applied by March 1 in the following order: 11
6065 (1) Eligible students who received a scholarship grant for the school year prior to 12
6166 the school year for which the students are applying. 13
6267 (2) Eligible students qualifying for a scholarship grant in the amount provided 14
6368 under subdivision (1) of subsection (b2) of this section.residing in households 15
6469 with an income level not in excess of the amount required for the student to 16
6570 qualify for the federal free or reduced-price lunch program. 17
6671 (3) Eligible students qualifying for a scholarship grant in the amount provided 18
6772 under subdivision (2) of subsection (b2) of this section.residing in households 19
6873 with an income level between the amount required for the student to qualify 20
6974 for the federal free or reduced-price lunch program and not in excess of two 21
7075 hundred percent (200%) of that amount. 22
7176 (4) Eligible students qualifying for a scholarship grant in the amount provided 23
7277 under subdivision (3) of subsection (b2) of this section.residing in households 24
7378 with an income level of between two hundred percent (200%) of the amount 25
7479 required for the student to qualify for the federal free or reduced-price lunch 26
7580 program and not in excess of four hundred fifty percent (450%) of that 27
7681 amount. 28
7782 (5) All other students. 29
7883 … 30
7984 (b2) Scholarship grants shall be awarded to eligible students as follows: 31
8085 (1) For students enrolled in private schools: 32
8186 (1)a. For students residing in households with an income level not in excess 33
8287 of the amount required for the student to qualify for the federal free or 34
8388 reduced-price lunch program, per year per eligible student, an amount 35
8489 of up to one hundred percent (100%) of the average State per pupil 36
8590 allocation for average daily membership in the prior fiscal year. 37
8691 (2)b. For students residing in households with an income level between the 38
8792 amount required for the student to qualify for the federal free or 39
8893 reduced-price lunch program and not in excess of two hundred percent 40
8994 (200%) of that amount, per year per eligible student, an amount of up 41
9095 to ninety percent (90%) of the average State per pupil allocation for 42
9196 average daily membership in the prior fiscal year. 43
9297 (3)c. For students residing in households with an income level of between 44
9398 two hundred percent (200%) of the amount required for the student to 45
9499 qualify for the federal free or reduced-price lunch program and not in 46
95100 excess of four hundred fifty percent (450%) of that amount, per year 47
96101 per eligible student, an amount of up to sixty percent (60%) of the 48
97102 average State per pupil allocation for average daily membership in the 49
98103 prior fiscal year. 50 General Assembly Of North Carolina Session 2025
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104+DRS35167-MTa-43 Page 3
100105 (4)d. For all students, per year per eligible student, an amount of up to 1
101106 forty-five percent (45%) of the average State per pupil allocation for 2
102107 average daily membership in the prior fiscal year, unless the student 3
103108 qualifies for a higher amount under this subsection. 4
104109 (2) For students enrolled in home schools, per year per eligible student, an amount 5
105110 of up to twenty-five percent (25%) of the average State per pupil allocation 6
106111 for average daily membership in the prior fiscal year. 7
107112 (b3) Tuition Scholarship grant funds may be used for tuition and fees for a nonpublic 8
108113 school of a private school and required costs of a home school. Tuition and fees of a private 9
109114 school may include tuition and fees for books, transportation, equipment, or other items required 10
110115 by the nonpublic private school. Required costs of a home school include costs for books, 11
111116 equipment, and other required items, but do not include tuition, fees, or transportation. 12
112117 (b4) No scholarship grant shall exceed the required tuition and fees for the private school 13
113118 the eligible student will attend. No scholarship grant shall exceed, per year per eligible student, 14
114119 any of the following: 15
115120 (1) For students in private school, an amount equal to one hundred percent (100%) 16
116121 of the average State per pupil allocation for average daily membership in the 17
117122 prior fiscal year, and no scholarship grant shall exceed the required tuition and 18
118123 fees for the nonpublic school the eligible student will attend.year. 19
119124 (2) For students in home school, an amount equal to twenty-five percent (25%) 20
120125 of the average State per pupil allocation for average daily membership in the 21
121126 prior fiscal year. 22
122127 …." 23
123128 SECTION 1.(c) G.S. 115C-562.4 reads as rewritten: 24
124129 "§ 115C-562.4. Identification of nonpublic schools and distribution of scholarship grant 25
125130 information. 26
126131 (a) The Division shall provide annually by December 31 to the Authority a list of all 27
127132 nonpublic schools operating in the State that meet both of the requirements of Part 1 or Part 2 of 28
128133 this Article and State and all nonpublic schools operating in the State that meet the requirements 29
129134 of G.S. 115C-562.5(a)(8). The Division shall notify the Authority of any schools included in the 30
130135 list that the Division has determined to be ineligible within five business days of the 31
131136 determination of ineligibility. The Division shall create, in collaboration with the Authority, a 32
132137 unique identifier for each nonpublic school and provide the unique identifiers to the Authority 33
133138 for all nonpublic schools that are registered with the Division. 34
134139 …." 35
135140 SECTION 1.(d) G.S. 115C-562.5 reads as rewritten: 36
136141 "§ 115C-562.5. Obligations of nonpublic schools accepting eligible students receiving 37
137142 scholarship grants. 38
138143 (a) A nonpublic school that accepts eligible students receiving scholarship grants shall 39
139144 comply with the following:comply with the requirements of this section as follows: 40
140145 (1) Provide A nonpublic school shall provide to the Authority documentation for 41
141146 the expenses of an eligible student as follows: 42
142147 a. The required tuition and fees charged to the student by the nonpublic 43
143148 private school. 44
144149 b. The required costs of the student in a home school. 45
145150 (2) Provide A private school shall provide to the Authority a criminal background 46
146151 check conducted for the staff member with the highest decision-making 47
147152 authority, as defined by the bylaws, articles of incorporation, or other 48
148153 governing document. Information provided to the Authority in accordance 49
149154 with this subdivision is privileged information and is not a public record but 50
150155 is for the exclusive use of the Authority. 51 General Assembly Of North Carolina Session 2025
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152157 (3) Provide A private school shall provide to the parent or guardian of an eligible 1
153158 student, whose tuition and fees are paid in whole or in part with a scholarship 2
154159 grant, an annual written explanation of the student's progress, including the 3
155160 student's scores on standardized achievement tests. 4
156161 (4) Administer, A nonpublic school shall administer, at least once in each school 5
157162 year, tests as provided in this subdivision. Test performance data shall be 6
158163 submitted to the Authority by July 15 of each year. Test performance data 7
159164 reported to the Authority under this subdivision is not a public record under 8
160165 Chapter 132 of the General Statutes. Tests shall be administered to all eligible 9
161166 students enrolled in grades three and higher whose tuition and fees are paid in 10
162167 whole or in part with a scholarship grant as follows: 11
163168 a. The nationally standardized test designated by the Authority in grades 12
164169 three and eight. 13
165170 b. The ACT in grade 11. 14
166171 c. A nationally standardized test or other nationally standardized 15
167172 equivalent measurement selected by the chief administrative officer of 16
168173 the nonpublic school private school or parent of the home school in all 17
169174 other grades four and higher. For grades four through seven, the 18
170175 nationally standardized test or other equivalent measurement selected 19
171176 must measure achievement in the areas of English grammar, reading, 20
172177 spelling, and mathematics. For grades nine, 10, and 12, the nationally 21
173178 standardized test or other equivalent measurement selected must 22
174179 measure either (i) achievement in the areas of English grammar, 23
175180 reading, spelling, and mathematics or (ii) competencies in the verbal 24
176181 and quantitative areas. 25
177182 (5) Provide A nonpublic school shall provide to the Authority graduation rates of 26
178183 the students receiving scholarship grants in a manner consistent with 27
179184 nationally recognized standards. 28
180185 (6) Contract A private school shall contract with a certified public accountant to 29
181186 perform a financial review, consistent with generally accepted methods of 30
182187 accounting or any other comprehensive basis of accounting recognized by the 31
183188 American Institute of Certified Public Accountants (AICPA) for each school 32
184189 year in which the school enrolls 70 or more students receiving scholarship 33
185190 grants or scholarship funds awarded by the Authority. 34
186191 (7) Maintain A nonpublic school shall maintain a school facility or home within 35
187192 the State where in-person instruction is provided. This subdivision does not 36
188193 prohibit a school from offering remote-only courses of instruction in addition 37
189194 to in-person instruction. 38
190195 (8) Provide A nonpublic school shall provide the following information annually 39
191196 to the Division: 40
192197 a. Name and address of the school, including physical location address. 41
193198 A school with more than one physical location shall establish a 42
194199 separate notice of intent for each physical location and shall provide 43
195200 all information required by this subdivision for each physical location. 44
196201 b. The name of the owners and chief administrator.administrator or of the 45
197202 parent or parents providing instruction. 46
198203 c. Number of students in attendance at the school as of October 1. 47
199204 (b) A nonpublic private school that accepts students receiving scholarship grants shall 48
200205 not require any additional fees based on the status of the student as a scholarship grant recipient. 49 General Assembly Of North Carolina Session 2025
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206+DRS35167-MTa-43 Page 5
202207 (c) A nonpublic private school enrolling more than 25 students in any grade whose tuition 1
203208 and fees are paid in whole or in part with a scholarship grant shall provide and retain information 2
204209 on student test performance in each grade with more than 25 students, as follows: 3
205210 (1) Report to the Authority on the aggregate standardized test performance of 4
206211 eligible students in grades three, eight, and 11. Aggregate test performance 5
207212 data reported to the Authority which does not contain personally identifiable 6
208213 student data shall be a public record under Chapter 132 of the General Statutes. 7
209214 Test performance data may be shared with public or private institutions of 8
210215 higher education located in North Carolina and shall be provided to an 9
211216 independent research organization selected by the Authority for research 10
212217 purposes as permitted by the Federal Education Rights and Privacy Act, 20 11
213218 U.S.C. § 1232g. 12
214219 (2) Retain standardized test performance data for eligible students in all other 13
215220 grades and annually certify to the Authority compliance with the requirements 14
216221 of subdivision (4) of subsection (a) of this section. 15
217222 (c1) A nonpublic school shall not discriminate with respect to the categories listed in 42 16
218223 U.S.C. § 2000d, as that statute read on January 1, 2014. 17
219224 (d) If the Authority determines that a nonpublic school is not in compliance with the 18
220225 requirements of this section, the nonpublic school shall be ineligible to receive future scholarship 19
221226 funds. The nonpublic A private school shall notify the parent or guardian of any enrolled student 20
222227 receiving a scholarship grant that the nonpublic private school is no longer eligible to receive 21
223228 future scholarship grants. The Authority shall establish by rule a process for a nonpublic school 22
224229 to appeal for reconsideration of eligibility after one year. To ensure compliance, the Board of 23
225230 Directors of the Authority shall review the criminal history provided under subdivision (2) of 24
226231 subsection (a) of this section to ensure that the person has not been convicted of any crime listed 25
227232 in G.S. 115C-332. The Board shall determine through this review whether the nonpublic private 26
228233 school is noncompliant with this section. The Board shall make written findings with regard to 27
229234 how the criminal history information was used when making the compliance determination. The 28
230235 Board of Directors may delegate any of the duties in this subsection to the Executive Director of 29
231236 the Authority. As part of its review, the Board shall determine whether the results indicate that 30
232237 the staff member has any of the following disqualifying characteristics: 31
233238 (1) Poses a threat to the physical safety of students or personnel. 32
234239 (2) Demonstrates that he or she does not have the integrity or honesty to fulfill his 33
235240 or her duties in overseeing State funds and the requirements of the scholarship 34
236241 grant program. 35
237242 (3) Has not fully satisfied the criminal sentencing obligations imposed following 36
238243 his or her conviction by a court of competent jurisdiction. 37
239244 (e) If a nonpublic school terminates operation during the school's regular schedule and 38
240245 fails to (i) report the date of the closure to the Division within 14 days and (ii) return funds owed 39
241246 to the Authority in a timely manner for students who received scholarship grants, any other 40
242247 nonpublic school opened during that school year or subsequent school years by an owner or chief 41
243248 administrator owner, chief administrator, or parent listed in the report submitted to the Division 42
244249 under subdivision (8) of subsection (a) of this section for that closed school shall be ineligible to 43
245250 receive scholarship grants until such time the Authority determines the obligation to return those 44
246251 funds has been satisfied." 45
247252 SECTION 1.(e) G.S. 115C-562.6 reads as rewritten: 46
248253 "§ 115C-562.6. Scholarship endorsement. 47
249254 The Authority shall remit, at least two times each school year, scholarship grant funds 48
250255 awarded to eligible students to the nonpublic school school. Scholarship grant funds awarded to 49
251256 eligible students to a private school shall be remitted for endorsement by at least one of the 50
252257 student's parents or guardians. The parent or guardian shall restrictively endorse the scholarship 51 General Assembly Of North Carolina Session 2025
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254259 grant funds awarded to the eligible student for deposit into the account of the nonpublic private 1
255260 school to the credit of the eligible student. The parent or guardian shall not designate any entity 2
256261 or individual associated with the nonpublic private school as the parent's attorney-in-fact to 3
257262 endorse the scholarship grant funds. A parent's or guardian's failure to comply with this section 4
258263 shall result in forfeit of the scholarship grant. A scholarship grant forfeited for failure to comply 5
259264 with this section shall be returned to the Authority to be awarded to another student." 6
260265 SECTION 2.(a) There is appropriated from the General Fund to the Opportunity 7
261266 Scholarship Grant Fund Reserve the following amounts in additional recurring dollars for each 8
262267 of the following fiscal years: 9
263268 Fiscal Year Appropriation 10
264269 2025-2026 $220,000,000 11
265270 2026-2027 $240,000,000 12
266271 SECTION 2.(b) G.S. 115C-562.8(b), as amended by Section 6.4(c) of S.L. 2024-55, 13
267272 reads as rewritten: 14
268273 "(b) The General Assembly finds that, due to the critical need in this State to provide 15
269274 opportunity for school choice for North Carolina students, it is imperative that the State provide 16
270275 an increase of funds for 15 years to the Opportunity Scholarship Grant Fund Reserve. Therefore, 17
271276 there is appropriated from the General Fund to the Reserve the following amounts for each fiscal 18
272277 year to be used for the purposes set forth in this section: 19
273278 Fiscal Year Appropriation 20
274279 2017-2018 $44,840,000 21
275280 2018-2019 $54,840,000 22
276281 2019-2020 $64,840,000 23
277282 2020-2021 $74,840,000 24
278283 2021-2022 $84,840,000 25
279284 2022-2023 $94,840,000 26
280285 2023-2024 $176,540,000 27
281286 2024-2025 $191,540,000 28
282287 2025-2026 $625,000,000 29
283288 2026-2027 $675,000,000 30
284289 2027-2028 $700,000,000$960,000,000 31
285290 2028-2029 $725,000,000$1,000,000,000 32
286291 2029-2030 $750,000,000$1,025,000,000 33
287292 2030-2031 $775,000,000$1,050,000,000 34
288293 2031-2032 $800,000,000$1,075,000,000 35
289294 For the 2032-2033 fiscal year and each fiscal year thereafter, there is appropriated from the 36
290295 General Fund to the Reserve the sum of eight hundred twenty-five million dollars ($825,000,000) 37
291296 one billion one hundred million dollars ($1,100,000,000) to be used for the purposes set forth in 38
292297 this section. When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year 39
293298 specified in this subsection, the Director of the Budget shall include the appropriated amount 40
294299 specified in this subsection for that fiscal year." 41
295300 SECTION 3. This act becomes effective July 1, 2025, and applies to applications 42
296301 for scholarship grants beginning with the 2026-2027 school year. 43