Sound Basic Education for Every Child.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1017

Short Title: Sound Basic Education for Every Child. (Public)
Sponsors: Representatives von Haefen, Ball, Hawkins, and Prather (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
April 22, 2026
*H1017-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO PROVIDE FO R A SOUND BASIC EDUC ATION FOR EVERY CHIL D IN 2
NORTH CAROLINA. 3
The General Assembly of North Carolina enacts: 4
5
PART I. WELL -PREPARED, HIGH -QUALITY, AND SUPPORTED TEACHER I N 6
EVERY CLASSROOM 7
8
PEPSC POSITIONS 9
SECTION 1.1. There is appropriated from the General Fund to the Department of 10
Public Instruction the sum of two hundred thousand dollars ($200,000) in recurring funds for the 11
2026-2027 fiscal year to support two additional positions for the Professional Educator 12
Preparation and Standards Commission (Commission) to increase the capacity of the 13
Commission to coordinate efforts to recruit, prepare, retain, and support the State's teaching 14
workforce on behalf of the State Board of Education and the Department of Public Instruction. 15
16
EDUCATOR LICENSURE AND COMPENSATION REFORM PLAN 17
SECTION 1.2.(a) The State Board of Education shall develop a plan for 18
implementing a teacher licensure and compensation reform model designed to restore respect for 19
the teaching profession; to build a more diverse, quality teaching force; to increase instructional 20
capabilities of teachers; and to entice more young professionals, mid -career professionals, and 21
out-of-state individuals into the teaching profession. The plan shall include at least the following 22
components: 23
(1) Offer early, inclusive, and clear pathways into the profession. 24
(2) Reward excellence and advancement among teachers. 25
(3) Encourage retention in the profession. 26
The State Board of Education shall submit details on the plan and any recommended 27
legislative changes to implement the plan to the Joint Legislative Education Oversight 28
Committee, the Fiscal Research Division, and the Office of State Budget and Management by 29
March 15, 2027. 30
SECTION 1.2.(b) There is appropriated from t he General Fund to the Department 31
of Public Instruction the sum of fifty thousand dollars ($50,000) in nonrecurring funds for the 32
2026-2027 fiscal year to develop the plan required by subsection (a) of this section. 33
34
EDUCATOR PREPARATION PROGRAM CAPACITY STUDY 35
General Assembly Of North Carolina Session 2025
Page 2 House Bill 1017-First Edition
SECTION 1.3.(a) The State Board of Education, in consultation with The University 1
of North Carolina System Office, shall conduct a study to identify the resources and structures 2
that educator preparation programs at the constituent institutions of Th e University of North 3
Carolina need to be able to do the following: 4
(1) Increase capacity in educator preparation programs to recruit, prepare, 5
support, and graduate at least 5,000 in-State trained teachers annually. 6
(2) Increase capacity in educator prepa ration programs to recruit, prepare, 7
support, and graduate more educators of color annually. 8
The State Board of Education shall report on the findings of this study to the Joint 9
Legislative Education Oversight Committee, the Fiscal Research Division, and t he Office of 10
State Budget and Management by March 15, 2027. 11
SECTION 1.3.(b) There is appropriated from the General Fund to the Department 12
of Public Instruction the sum of twenty-five thousand dollars ($25,000) in nonrecurring funds for 13
the 2026-2027 fiscal year to conduct the study required by subsection (a) of this section. 14
15
ALTERNATIVE PATHWAYS TEACHER RECRUITMENT MODELS 16
SECTION 1.4.(a) There is appropriated from the General Fund to the Department 17
of Public Instruction the sum of five million eight hundred thousand dollars ($5,800,000) in 18
recurring funds for the 2026 -2027 fiscal year to support research -based Grow-Your-Own and 19
2+2 teach er recruitment education programs in all regions of the State, including high 20
school-based career academy programs, the North Carolina Teacher Cadet Program, the 21
Teaching as a Profession program, and the TA to Teachers program. 22
SECTION 1.4.(b) There is appropriated from the General Fund to the Department 23
of Public Instruction the sum of one million dollars ($1,000,000) in recurring funds for the 24
2026-2027 fiscal year to establish new Grow-Your-Own and 2+2 teacher recruitment education 25
programs in high-need public school units. 26
27
STUDY ON CONSOLIDATING AND COORDINATING TEACHER RECRUITMENT 28
AND RETENTION EFFORTS 29
SECTION 1.5.(a) The State Board of Education shall develop a plan to implement 30
and fund a statewide system or entity to coordinate, enhance, and evaluate efforts to recruit, place, 31
and retain teacher candidates and beginning teachers between institutions of higher education 32
and local school administrative units. This study shall focus on, but not be limited to, how best 33
to consolidate and coordinate statewide teacher recruitment and retention efforts. The State Board 34
of Education shall submit details on the plan and any recommended legislative changes to 35
implement the plan to the Joint Legislative Education Oversight Committee, the Fiscal Research 36
Division, and the Office of State Budget and Management by March 15, 2027. 37
SECTION 1.5.(b) There is appropriated from the General Fund to the Department 38
of Public Instruction the sum of twenty-five thousand dollars ($25,000) in nonrecurring funds for 39
the 2026-2027 fiscal year to be used to support the development of the plan required by this 40
section. 41
42
EXPAND NC TEACHING FELLOWS PROGRAM 43
SECTION 1.6.(a) Part 3 of Article 23 of Chapter 116 of the General Statutes reads 44
as rewritten: 45
"Part 3. North Carolina Teaching Fellows Program. 46
"§ 116-209.60. Definitions. 47
The following definitions apply in this Part: 48
(1) Commission. – The North Carolina Teaching Fellows Commission. 49
(2) Director. – The Director of the North Carolina Teaching Fellows Program. 50
(3) Forgivable loan. – A forgivable loan made under the Program. 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 3
(4) Program. – The North Carolina Teaching Fellows Program. 1
(5) Public school. – An elementary or secondary school located in North Carolina 2
that is governed by a local board of education, charter school b oard of 3
directors, regional school board of directors, or University of North Carolina 4
laboratory school board of trustees. 5
(5a) Qualifying licensure area. – A teacher licensure area in one of the following 6
subjects: 7
a. Either of the following, as identified pursuant to G.S. 116-209.62(h): 8
1. Special education. 9
2. STEM. 10
b. Elementary education (K-6). 11
(5b) Qualifying teacher. – A teacher in a North Carolina public school who meets 12
the following criteria: 13
a. Received a forgivable loan under the Program. 14
b. Graduated within 10 years from an educator preparation program 15
leading to teacher licensure, excluding any authorized deferment for 16
extenuating circumstances. 17
c. Serves as a teacher in a qualifying licensure area. 18
(6) STEM. – Science, technology, engineering, and mathematics. 19
(7) Trust Fund. – The North Carolina Teaching Fellows Program Trust Fund. 20
… 21
"§ 116-209.62. North Carolina Teaching Fellows Program established; administration. 22
(a) Program. – There is established the North Carolina Teaching F ellows Program to be 23
administered by the System Office of The University of North Carolina, in conjunction with the 24
Authority and the Commission. The purpose of the Program is to recruit, prepare, and support 25
students residing in or attending institutions of higher education located in North Carolina for 26
preparation as highly effective teachers in qualifying licensure areas in the State's public schools. 27
The Program shall be used to provide a forgivable loan to individuals interested in preparing to 28
teach in the public schools of the State in qualifying licensure areas.State. 29
(b) Trust Fund. – There is established the North Carolina Teaching Fellows Program 30
Trust Fund to be administered by the Authority, in conjunction with the System Office of The 31
University of North Carolina. All funds (i) appropriated to, or otherwise received by, the Program 32
for forgivable loans and other Program purposes, (ii) received as repayment of forgivable loans, 33
and (iii) earned as interest on these funds shall be placed in the Tr ust Fund. The purpose of the 34
Trust Fund is to provide financial assistance to qualified students for completion of teacher 35
education and licensure programs to fill qualifying licensure areas teach in the public schools of 36
the State. 37
… 38
(d) Director of the P rogram. – The Board of Governors of The University of North 39
Carolina shall appoint a Director of the Program. The Director shall appoint staff to the 40
Commission and shall be responsible for recruitment and coordination of the Program, including 41
proactive, aggressive, and strategic recruitment of potential recipients. Efforts shall include 42
identifying and encouraging student s of color and students who may not otherwise consider a 43
career in teaching to enter the Program. Recruitment activities shall include a broad-based 44
strategy (i) targeting regions of the State with the highest teacher attrition rates and teacher 45
recruitment challenges, challenges and (ii) actively engaging with educators, business leaders, 46
experts in human resources, elected officials, and other community leaders throughout the State, 47
and (iii) attracting candidates in qualifying licensure areas to the Program. State to attract a 48
diverse pool of applicants. The Director shall report to the President of The University of North 49
Carolina. The Authority shall provide office space and clerical support staff, as necessary, to the 50
Director for the Program. 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 1017-First Edition
(e) Student Selection Criteria for Forgivable Loans. – The Commission shall adopt 1
stringent standards for awarding forgivable loans based on multiple measures to ensure that only 2
the strongest applicants receive them, including the following: 3
(1) Grade point averages. 4
(2) Performance on relevant career and college readiness assessments. 5
(3) Experience, accomplishments, and other criteria demonstra ting qualities 6
positively correlated with highly effective teachers, including excellent verbal 7
and communication skills. 8
(4) Demonstrated commitment to serve in a qualifying licensure area in North 9
Carolina public schools. 10
(f) Program Selection Criteria. – The Authority shall administer the Program in 11
cooperation with up to 10 institutions of higher education with approved educator preparation 12
programs selected by the Commission that represent a diverse selection of both postsecondary 13
constituent institutions of The University of North Carolina and private postsecondary 14
institutions operating in the State. State, including minority -serving institutions. The 15
Commission shall adopt stringent standards for selection of the most effective educator 16
preparation programs, including the following: 17
(1) Demonstrates high rates of educator effectiveness on value-added models and 18
teacher evaluations, including using performance -based, subject -specific 19
assessment and support systems, such as edTPA or other metrics of evaluating 20
candidate effectiveness that have predictive validity. 21
(2) Demonstrates measurable impact of prior graduates on student learning, 22
including impact of graduates teaching in qualifying licensure areas.learning. 23
(3) Demonstrates high rates of graduates passing exams required for teacher 24
licensure. 25
(4) Provides curricular and co-curricular enhancements in leadership, facilitates 26
learning for diverse learners, and promotes community engagement, 27
classroom management, and reflection and assessment. 28
(5) Requires at least a minor concentration of study in the subject area that the 29
candidate may teach. 30
(6) Provides early and frequent internship or practical experiences, including the 31
opportunity for participants to perform practicums in diverse school 32
environments. 33
(7) Is approved by the State Board of Education as an educator prepa ration 34
program. 35
(8) For an educator preparation program enrolling loan recipients in a program of 36
study leading to licensure in elementary education (K -6), provides training 37
that is aligned with the Science of Reading in accordance with 38
G.S. 115C-269.20. The Commission shall contract with a third-party entity to 39
biennially evaluate whether a program identified in this subdivision is 40
providing training that is aligned with the Science of Reading. 41
(g) Awards of Forgivable Loans. – The Program shall provide forgivable loans to selected 42
students to be used at up to 10 selected institutions for completion of a program leading to initial 43
teacher licensure as follows: 44
(1) North Carolina high school seniors. – Forgivable loans of up to five thousand 45
dollars ($5,000) per semester for up to eight semesters. 46
(2) Students applying for transfer to a selected educator preparation program at 47
an institution of higher education. – Forgivable loans of up to five thousand 48
dollars ($5,000) per semester for up to six semesters. 49
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 5
(3) Individuals currently holding a bachelor's degree seeking preparation for 1
teacher licensure. – Forgivable loans of up to five thousand dollars ($5,000) 2
per semester for up to four semesters. 3
(4) Students matriculating at institutions of higher education who are changing to 4
an approved program of study at a selected educator preparation program. – 5
Forgivable loans of up to five thousand dollars ($5,000) per semester for up 6
to four semesters. 7
Forgivable loans may be used for tuition, fees, the cost of book s, and expenses related to 8
obtaining licensure. 9
(g1) Extracurricular Enhancement Activities. – The Program shall provide planning, 10
training, and ongoing support for Program leaders and recipients, including training on topics 11
such as culturally responsive teaching, teaching students with disabilities, and trauma-informed 12
teaching. 13
(h) Identification of STEM and Special Education Licensure Areas. – The Superintendent 14
of Public Instruction shall identify and provide to the Commission and the Authority a list of 15
STEM and special education licensure areas and shall annually provide to the Commission the 16
number of available positions in each qualifying licensure area relative to the number of current 17
and anticipated teachers in that area of licensure. The Commiss ion shall make the list of STEM 18
and special education licensure areas readily available to applicants. 19
… 20
(j) Annual Report. – The Commission, in coordination with the Authority, the 21
Department of Public Instruction, and the selected educator education programs participating in 22
the Program shall report no later than January 1, 2019, and annually thereafter, to the Joint 23
Legislative Education Oversight Committee regarding the following: 24
(1) Forgivable loans awarded from the Trust Fund, including the following: 25
a. Demographic information regarding recipients. 26
b. Number of recipients by institution of higher education and program. 27
c. Information on number of recipients by anticipated qualifying 28
licensure area. 29
(2) Placement and repayment rates, including the following: 30
a. Number of graduates who have been employed in a qualifying 31
licensure area within two years of program completion. 32
b. Number of graduates who accepted employment at a low -performing 33
school identified under G.S. 115C-105.37 as part of their years of 34
service. 35
c. Number of graduates who have elected to do loan repayment and their 36
years of service, if any, prior to beginning loan repayment. 37
d. Number of graduates employed in a qualifying licensure area who 38
have received an overall rating of at least accomplished and have met 39
expected growth on applicable standards of the teacher evaluation 40
instrument. 41
e. Aggregate information on student growth and proficiency in courses 42
taught by graduates who have fulfilled service requirements through 43
employment in a qualifying licensure area.employment. 44
…." 45
SECTION 1.6.(b) There is appropriated from the General Fund to the North Carolina 46
Teaching Fellows Program Trust Fund the sum of thirty -seven million dollars ($37,000,000) in 47
recurring funds for the 2026 -2027 fiscal year to revise and expand the NC Teaching Fellows 48
Program in accordance with subsection (a) of this section. 49
SECTION 1.6.(c) Subsection (a) of this section applies to applications for the award 50
of funds beginning in the 2026-2027 academic year. 51
General Assembly Of North Carolina Session 2025
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1
RECRUITMENT BONUS PILOT PROGRAM FOR TEACHERS IN LOW -WEALTH, 2
LOW-PERFORMING, OR HIGH-NEED SCHOOLS 3
SECTION 1.7.(a) Purpose. – The State Board of Education shall establish a grant 4
program to assist local school administrative units in providing multiyear recruitment bonuses to 5
certified teachers who commit to teach multiple years in a low -performing or high-need school. 6
Bonuses awarded as part of this grant program shall include, but are not limited to, the following 7
components: 8
(1) Awards over multiple years with a r equirement that teachers remain in the 9
school over multiple years to receive the bonus. 10
(2) Awards to licensed teachers who commit to teach in a school identified as 11
low-performing, as defined in G.S. 115C-105.37, a school identified as 12
continually low -performing, as defined in G.S. 115C-105.37A, or a school 13
where seventy-five percent (75%) or greater of students qualify for free or 14
reduced-price lunch under the National School Lunch Program. 15
SECTION 1.7.(b) Request for Proposal. – By September 1, 2026, and annually 16
thereafter, the State Board of Education shall issue a request for proposal (RFP) for the grant 17
program. Local boards of education shall submit their proposals by December 1, 2026. The RFP 18
shall require that proposals include the following information at a minimum: 19
(1) Description of the proposal, including details on targeted schools for the 20
bonuses and how the bonus program will be structured. 21
(2) Evidence-based research that supports the proposal. 22
(3) Implementation time line for the plan. 23
(4) Plans for financial sustainability once grant money is no longer available. 24
SECTION 1.7.(c) Grant Awards. – By February 15, 2027, the State Board of 25
Education shall review the proposals submitted by local boards of education and select up to 10 26
local school administrative units for grant awards. The State Board of Education may make grant 27
awards for up to three years. A local school administrative unit may not receive more than five 28
hundred thousand dollars ($500,000) in a single fiscal year from the grant program. 29
SECTION 1.7.(d) Evaluation and Reporting. – Of the funds appropriated by this 30
section, the State Board of Education may use up to three hundred thousand dollars ($300,000) 31
to contract with an in dependent research organization to evaluate the impact of this grant 32
program. The independent research organization shall report the results of this evaluation to the 33
Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Of fice 34
of State Budget and Management by September 1, 2029. The Department of Public Instruction 35
shall report annually on the implementation of this grant program beginning March 15, 2027. 36
SECTION 1.7.(e) Appropriation. – There is appropriated from the General Fund to 37
the Department of Public Instruction the sum of seven million seven hundred thousand dollars 38
($7,700,000) in recurring funds for the 2026-2027 fiscal year to implement the grant program in 39
accordance with this section. 40
SECTION 1.7.(f) Carryforward. – Any unexpended funds appropriated under this 41
section at the end of the 2026 -2027 fiscal year shall not revert to the General Fund but shall 42
remain available for the purposes set forth in this section. 43
44
TEACHER PREPARATION RESIDENCY PILOT GRANT PROGRAM 45
SECTION 1.8.(a) Purpose. – The State Board of Education shall establish a grant 46
program to assist local school administrative units in the development of teacher preparation 47
residency pilot programs. Teacher preparation residency programs pr ovide the necessary 48
preparation and induction supports to teacher preparation candidates pursuing a continuing 49
professional license. Teacher preparation residency programs eligible to receive grant funding 50
through this program shall include, at a minimum, the following components: 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 7
(1) Coursework in the candidate's area of licensure. 1
(2) Tuition and stipends. 2
(3) Faculty advising. 3
(4) Clinical training experiences. 4
(5) Ongoing induction support. 5
Residency programs eligible for this grant program may include partnerships between 6
local school administrative units, educator preparation programs, local community colleges or 7
universities, and other community organizations. Grant funds awarded to local school 8
administrative units under this program shall be matched by the local school administrative units 9
on the basis of one dollar ($1.00) in non-grant funds for every one dollar ($1.00) in grant funds. 10
SECTION 1.8.(b) Request for Proposal. – By October 1, 2026, the State Board of 11
Education shall issue a request for proposal (R FP) for the grant program. Local boards of 12
education shall submit their proposals by January 15, 2027. The RFP shall require that proposals 13
include the following information at a minimum: 14
(1) Description of the proposal, including the number of teacher prepara tion 15
candidates to be served. 16
(2) Evidence-based research that supports the proposal. 17
(3) Implementation time line for the plan. 18
(4) Plans for financial sustainability once grant money is no longer available. 19
SECTION 1.8.(c) Grant Awards. – By April 15, 2027, the State Board of Education 20
shall review the proposals submitted by local boards of education and shall select up to 10 local 21
school administrative units for grant awards. The State Board of Education may make grant 22
awards for up to three years. A local school administrative unit may not receive more than five 23
hundred thousand dollars ($500,000) in a single fiscal year from this grant program. 24
SECTION 1.8.(d) Evaluation and Reporting. – Of the funds appropriated by thi s 25
section, the State Board of Education may use up to three hundred thousand dollars ($300,000) 26
to contract with an independent research organization to evaluate the impact of this grant 27
program. The independent research organization shall report the results of this evaluation to the 28
Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office 29
of State Budget and Management by September 1, 2030. The Department of Public Instruction 30
shall report annually on the implementation of this grant program beginning March 15, 2027. 31
SECTION 1.8.(e) Appropriation. – There is appropriated from the General Fund to 32
the Department of Public Instruction the sum of twenty -five million dollars ($25,000,000) in 33
recurring funds for the 2026-2027 fiscal year to implement the grant program in accordance with 34
this section. 35
SECTION 1.8.(f) Carryforward. – Any unexpended funds appropriated under this 36
section at the end of the 2026 -2027 fiscal year shall not revert to the General Fund but shall 37
remain available for the purposes set forth in this section. 38
39
EXPAND PARTNERSHIP TEACH 40
SECTION 1.9. There is appropriated from the General Fund to the Board of 41
Governors of The University of North Carolina the sum of two hundred thousand dollars 42
($200,000) in recurring funds for the 2026-2027 fiscal year to expand Partnership Teach to up to 43
two additional hub sites, including providing funds for staffing, fellowship support, mentoring, 44
and increasing recruitment capacity. 45
46
DEVELOPING A REPRESENTATIVE AND INCLUSI VE VISION FOR EDUCATION 47
(DRIVE) GRANT PROGRAM 48
SECTION 1.10.(a) Purpose. – The State Board of Education, in consultation with 49
the Office of the Governor, The University of North Carolina System Office, and the Community 50
College System Office, shall establi sh a grant program to support strategic partnerships 51
General Assembly Of North Carolina Session 2025
Page 8 House Bill 1017-First Edition
committed to increasing the pipeline of educators of color across the State. As an extension of 1
the recommendations and strategies presented by the Governor's DRIVE Task Force on January 2
1, 2021, the gra nts shall be provided to local school administrative units, institutions of higher 3
education, and community organizations to implement innovative initiatives that support the 4
recruitment, preparation, support, and retention of racially, ethnically, and lin guistically diverse 5
educators. The purpose of this program shall be to do at least the following: 6
(1) Increase the diversity of the educator workforce across the State through novel 7
recruitment efforts. 8
(2) Strengthen the pipeline of aspiring teachers of c olor across the State through 9
traditional and alternative certification pathways. 10
(3) Provide mechanisms to support and retain educators of color currently serving 11
in elementary and secondary public schools. 12
(4) Promote collaboration between school systems, institutions of higher 13
education, and community and nonprofit organizations to diversify the 14
educator workforce. 15
SECTION 1.10.(b) Applications. – Applicants for grants shall demonstrate at least 16
the following for grant award consideration: 17
(1) A partnership between at least two of the following entities: local school 18
administrative units, Historically Black Colleges and Universities, 19
Historically Minority -Serving Institutions, educator preparation programs, 20
alternative certification programs, public and private colleges and universities, 21
community colleges, and community or nonprofit organizations. 22
(2) Proposals for strategies that address one or more of the following components 23
of the educator development continuum as highlighted by the DRIVE Task 24
Force's 2021 Report to the Governor: recruitment, placement and induction, 25
and support and retention of educators of color. 26
SECTION 1.10.(c) Use of Funds. – Grant funds may be used for the following 27
activities: 28
(1) Strengthening existing high school dual enr ollment programs to offer 29
education-based college credit or honors courses as streamlined pathways for 30
future careers in education. 31
(2) Implementing targeted school system-level and community-based recruitment 32
programs for aspiring educators of color intereste d in traditional and 33
alternative educator preparation programs. 34
(3) Utilizing and leveraging existing financial aid programs that include 35
scholarships, loan forgiveness, and tuition reimbursement that reduce the 36
disproportionate financial burden incurred by aspiring candidates of color. 37
(4) Increasing preparation and supporting preservice educators of color through 38
paid clinical learning experiences, with a commitment to teaching in North 39
Carolina public schools. 40
(5) Offering support for job placement and licensure for candidates of color after 41
completing their educator preparation program. 42
(6) Providing induction and mentoring programs that address the needs of 43
educators of color and that include sustaining networking and professional 44
learning communities or affinity groups. 45
(7) Encouraging and financially supporting educators of color interested in 46
joining national professional organizations or attending national conferences. 47
SECTION 1.10.(d) Request for Proposal. – By October 1, 2026, the State Board of 48
Education shall issue a request for proposal (RFP) for the grant program. Applicants shall submit 49
their proposals by December 1, 2026. The RFP shall require that proposals include the following 50
information at a minimum: 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 9
(1) Description of the proposal. 1
(2) Evidence-based research that supports the proposal. 2
(3) An implementation time line for the plan. 3
(4) Plans for financial sustainability once grant money is no longer available. 4
SECTION 1.10.(e) Selection. – By February 1, 2027, a selection committee shall 5
select up to five grantees, making the effort to ensure that there is representation across the State 6
as reflected by rural and urban districts, institutions of higher education, and community -based 7
partners. Any grants awarded may be spent over a five-year period from the initial award. Grants 8
may be awarded for new or existing projects. 9
SECTION 1.10.(f) Reporting Requirements. – No later than September 1 of each 10
year, grant recipients shall submit to the State Board of Education an annual report for the 11
preceding grant year that describes the implementation of the program. This report must include 12
qualitative and quantitative data to demonstrate program effectiveness. 13
SECTION 1.10.(g) Evaluation and Reporting. – Of the funds appropriated by this 14
section, the State Board of Education may use up to three hundred thousand dollars ($300,000) 15
to contract with an independent research organization to evaluate the impact of this grant 16
program. The independent research organization shall report the results of this evaluation to the 17
Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office 18
of State Budget and Management by September 1, 2028. The State Board of Education shall 19
report annually on the implementation of this grant program beginning on January 1, 2028. 20
SECTION 1.10.(h) Appropriation. – There is appropriated from the General Fund 21
to the Department of Public Instruction the sum of two million dollars ($2,000,000) in recurring 22
funds for the 2026 -2027 fiscal year to implement the grant program in accordanc e with this 23
section. 24
SECTION 1.10.(i) Carryforward. – Any unexpended funds at the end of the 25
2026-2027 fiscal year from the funds appropriated for the grant program under this section shall 26
not revert to the General Fund but shall remain available for exp enditure for the purposes set 27
forth in this section. 28
29
ANNUAL EDUCATOR DIVERSITY REPORT 30
SECTION 1.11.(a) G.S. 115C-12(22) reads as rewritten: 31
"(22) Duty to Monitor the State of the Teaching and School Administration 32
Professions and Educator Diversity in North Carolina. – The State Board of 33
Education shall monitor and compile an annual report reports on the 34
following: 35
a. The state of the teaching and school administration professions in 36
North Carolina, as provided in G.S. 115C-289.2 and G.S. 115C-299.5. 37
b. Educator diversity in North Carolina, as provided in 38
G.S. 115C-299.7." 39
SECTION 1.11.(b) Article 20 of Chapter 115C of the General Statutes is amended 40
by adding a new section to read: 41
"§ 115C-299.7. Duty to monitor educator diversity. 42
(a) Definitions. – As used in this section, the following definitions apply: 43
(1) Diversity categories. – Race and ethnicity. 44
(2) Education entity. – Any of the following: 45
a. A public school unit, as defined in G.S. 115C-5(7a). 46
b. An educator preparation program, as defined in G.S. 115C-269.1(10). 47
(3) Educators. – Teachers employed by a public school unit. 48
(4) Future educators. – Students enrolled in an educator preparation program. 49
(5) Grade level. – Where applicable, the grade level taught by an educator and the 50
grade level attended by a future educator. 51
General Assembly Of North Carolina Session 2025
Page 10 House Bill 1017-First Edition
(6) Mobility rates. – The percentage of educators who move from one school or 1
public school unit to another. 2
(7) Qualitative data. – Information collected via questionnaire, interview, and 3
other nonquantitative methods. 4
(b) Education Entity Diversity Report. – No later than July 30, 202 7, and annually 5
thereafter, each education entity shall report to the Department of Public Instruction the following 6
information regarding the diversity of educators and future educators in the entity from the 7
previous school year, disaggregated by diversity category and, where applicable, by grade level: 8
(1) Total number of educators and future educators. 9
(2) The number of persons who apply to work in or attend the education entity as 10
an educator or future educator. 11
(3) The number of educators and future educators who are employed by or 12
enrolled in an education entity. 13
(4) Retention rates of educators. 14
(5) Mobility rates of educators between schools in a public school unit. 15
(6) The number of future educators who do the following: 16
a. Complete an educator preparation program. 17
b. Become licensed in North Carolina. 18
c. Become employed in a public school unit. 19
(7) Qualitative data from educators and future educators on the diversity and 20
inclusiveness of the education entity , including applicable information on 21
recruitment, educator preparation, retention, mobility, and turnover. This 22
information should include related reasons for educator attrition provided on 23
educator workforce reports. 24
(8) Recommendations from the entity to improve diversity of educators and future 25
educators, including strategies to recruit and retain a diverse pool of educators 26
and future educators. 27
(c) Statewide Diversity Report. – No later than October 15, 2027, and annually thereafter, 28
the Department of Public Instruction shall collect the information provided pursuant to 29
subsection ( b) of this section and report that information, organized to include at least the 30
following, to the Joint Legislative Education Oversight Committee, disaggregated by diversity 31
category and, where applicable, by grade level: 32
(1) Statewide data for each education entity, including mobility rates of educators 33
between public school units. 34
(2) Recommendations from the Department to improve diversity among 35
educators and future educators in education entities, including strategies to 36
recruit and retain a diverse pool of educators and future educators. 37
(d) Statistical Profile. – The Department of Public Instruction sha ll include the 38
information regarding public school units collected pursuant to this section in the statistical 39
profile of public schools maintained on its website. 40
(e) Certain Information Excluded. – Nothing in this section shall be construed to require 41
an education entity or the Department of Public Instruction to report any data that reveals 42
confidential or personally identifiable information about an educator or future educator." 43
44
ESTABLISH THE OFFICE OF EQUITY AFFAIRS WITHIN THE DEPARTMENT OF 45
PUBLIC INSTRUCTION 46
SECTION 1.12.(a) Chapter 115C of the General Statutes is amended by adding a 47
new Article to read: 48
"Article 6E. 49
"Office of Equity Affairs. 50
"§ 115C-64.35. Establishment, purpose, and duties of Office of Equity Affairs. 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 11
(a) There is established within the Department of Public Instruction the Office of Equity 1
Affairs. The purpose of the Office of Equity Affairs is to provide internal oversight within the 2
Department of Public Instruction and the State Board of Education specific to compliance with 3
the State's constitutional role to provide each child the opportunity to receive a sound basic 4
education and to direct the recruitment and retention of a diverse educator workforce. 5
(b) The Office of Equity Affairs shall review educational policies, programs, and 6
initiatives and shall provide an independent, objective source of information to be used in 7
evaluating substantial compliance with sound basic education standards and the goal of recruiting 8
and retaining a diverse educator workforce , giving special attention and consideration to 9
outcomes for at -risk students. The Office of Equity Affairs may suggest adjustments to the 10
content and delivery of educational policies, programs, and initiatives to improve their efficacy. 11
The authority of the Office of Equity Affairs to evaluate and advise shall extend to all policies, 12
programs, and initiatives related to ensuring that all students have access to a sound basic 13
education and to the goal of recruiting and retaining a diverse educator workforce. 14
(c) In carrying out its duties, the Office of Equity Affairs has authority to obtain full and 15
unrestricted access to all records, information, and data in the possession of or legally available 16
to the Department of Public Instruction or State Board of Education. 17
(d) Beginning no later than January 15 immediately following the effective date of this 18
section, and semiannually thereafter, the Office of Equity Affairs shall submit a report to the 19
Joint Legislative Education Oversight Committee on the (i) implementation of its duties as set 20
forth in this Article, (ii) progress of the Department of Public Instruction and the State Board of 21
Education in effectively providing each child the opportunity to receive a sound basic education, 22
and (iii) diversity of the educator workforce. Prior to the reporting of any deficiencies in progress, 23
the Office of Equity Affairs shall give to the Department of Public Instruction and the State Board 24
of Education ample notice of the deficien cies and an opportunity to correct or improve the 25
deficiencies and shall include in the report any efforts to do so. The report shall in clude any 26
recommended legislation. 27
"§ 115C-64.36. Administrative organization; organizational independence. 28
(a) There is established within the Department of Public Ins truction the position of 29
Deputy Superintendent of Equity Affairs who shall serve as the chief officer of the Office of 30
Equity Affairs. The Deputy Superintendent shall have professional, administrative, technical, and 31
clerical personnel as may be necessary in carrying out the duties of the position. 32
(b) The Superintendent of Public Instruction shall recommend to the State Board of 33
Education the individual to be appointed as Deputy Superintendent of Equity Affairs, and t he 34
recommended appointee shall be appointed upon approval by the State Board of Education. The 35
Deputy Superintendent shall report to the Superintendent of Public Instruction and the State 36
Board of Education jointly and may be removed only upon the joint agreement of the 37
Superintendent of Public Instruction and a majority of the members of the State Board of 38
Education. The Deputy Superintendent shall be organizationally situated to avoid impairments 39
to independence of the Deputy Superintendent 's professional judgment on how to best 40
accomplish the purposes of the Office of Equity Affairs." 41
SECTION 1.12.(b) There is appropriated from the General Fund to the Department 42
of Public Instruction for the 2026 -2027 fiscal year the sum of four hundred thousand dollars 43
($400,000) in recurring funds to permit the Deputy Superintendent of Equity Affairs, as 44
established by this section, to appoint up to four full -time staff to assist in the administration of 45
the Deputy Superintendent's duties under Article 6E of Chapter 115C of the General Statutes, as 46
enacted by this section. Personnel appointed to these positions shall report solely to the Deputy 47
Superintendent of Equity Affairs. The appointments shall not be subject to approval or 48
disapproval by the Superintendent of Public Instruct ion or the State Board of Education. Of the 49
four time-limited positions, one shall be an administrative assistant position and at least one shall 50
be an attorney position. 51
General Assembly Of North Carolina Session 2025
Page 12 House Bill 1017-First Edition
1
NORTH CAROLINA NEW TEACHER SUPPORT PROGRAM 2
SECTION 1.13. There is appropriated from the General Fund to the Board of 3
Governors of The University of North Carolina the sum of forty -eight million five hundred 4
thousand dollars ($48,500,000) in recurring funds for the 2026 -2027 fiscal year for the New 5
Teacher Support Program to provide mentoring and coaching support to beginning teachers who 6
are employed in public schools identified as low -performing or high -poverty at no cost to the 7
local school administrative units. 8
9
ADVANCED TEACHING ROLES CHANGES 10
SECTION 1.14.(a) G.S. 115C-310.7(a) reads as rewritten: 11
"(a) Class Size Flexibility. – Notwithstanding G.S. 115C-301, with the approval of the 12
State Board of Education, ATR schools may exceed the maximum class size requirements for 13
kindergarten through third grade during any term of up to three y ears in which State funds are 14
awarded to the ATR unit where the school is located. At the conclusion of the term, any class 15
size flexibility approved for an ATR school pursuant to this subsection shall expire.grade." 16
SECTION 1.14.(b) This section is effec tive beginning July 1, 2026, and applies 17
beginning with the 2026-2027 school year. 18
19
EDUCATOR PROFESSIONAL DEVELOPMENT ALLOTMENT 20
SECTION 1.15.(a) Effective July 1, 2026, there is established the Educator 21
Professional Development Allotment in the State Publ ic School Fund. The State Board of 22
Education shall establish the purposes for which the funds within the new Educator Professional 23
Development Allotment may be used, including at least the following: 24
(1) Educator professional development for targeted publi c school units and 25
schools requiring multitiered support for prekindergarten through grade three, 26
including the following: 27
a. Child development. 28
b. Early literacy. 29
c. Social and emotional learning. 30
d. Family engagement. 31
(2) Implementation of literacy training. 32
(3) Mentoring programs for beginning educators. 33
SECTION 1.15.(b) There is appropriated from the General Fund to the Department 34
of Public Instruction the sum of one hundred twenty -eight million four hundred fifty thousand 35
dollars ($128,450,000) in recurring funds for the 2026 -2027 fiscal year to be used to fund the 36
Educator Professional Development Allotment. Funds shall be allotted to local school 37
administrative units based on average daily membership. 38
39
REPORT FINDINGS OF COMPENSATION STUDY 40
SECTION 1.16. The Department of Public Instruction shall report to the Joint 41
Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of 42
State Budget and Management (OSBM) by March 1, 2027, on the findings of the compensation 43
study it conducted on alternative teacher compensation models and advanced teaching roles using 44
funds awarded by OSBM from the North Carolina Evaluation Fund. 45
46
TEACHER SALARY SCHEDULE 47
SECTION 1.17.(a) The following monthly teacher salary schedule shall apply for 48
the 2026 -2027 fiscal year to licensed personnel of the public schools who are classified as 49
teachers. The salary schedule is based on years of teaching experience. 50
2026-2027 Teacher Monthly Salary Schedule 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 13
Years of Experience "A" Teachers 1
0 $5,120 2
1 $5,160 3
2 $5,200 4
3 $5,240 5
4 $5,280 6
5 $5,320 7
6 $5,360 8
7 $5,400 9
8 $5,440 10
9 $5,480 11
10 $5,520 12
11 $5,560 13
12 $5,600 14
13 $5,640 15
14 $5,680 16
15-24 $5,720 17
25+ $5,920 18
SECTION 1.17.(b) Salary Supplements for Teachers Paid on This Salary Schedule. 19
– 20
(1) Licensed teachers who have NBPTS certification shall receive a salary 21
supplement each month of twelve percent (12%) of their monthly salary on 22
the "A" salary schedule. 23
(2) Licensed teachers who are classified as "M" teachers shall receive a salary 24
supplement each month of ten percent (10%) of their monthly salary on the 25
"A" salary schedule. 26
(3) Licensed teachers with licensure based on academic preparation at the 27
six-year degree level sha ll receive a salary supplement of one hundred 28
twenty-six dollars ($126.00) per month in addition to the supplement provided 29
to them as "M" teachers. 30
(4) Licensed teachers with licensure based on academic preparation at the 31
doctoral degree level shall recei ve a salary supplement of two hundred 32
fifty-three dollars ($253.00) per month in addition to the supplement provided 33
to them as "M" teachers. 34
(5) Certified school nurses shall receive a salary supplement each month of ten 35
percent (10%) of their monthly salary on the "A" salary schedule. 36
(6) School counselors who are licensed as counselors at the master's degree level 37
or higher shall receive a salary supplement of one hundred dollars ($100.00) 38
per month. 39
SECTION 1.17.(c) For school psychologists, school spe ech pathologists who are 40
licensed as speech pathologists at the master's degree level or higher, and school audiologists 41
who are licensed as audiologists at the master's degree level or higher, the following shall apply: 42
(1) The first step of the salary schedule shall be equivalent to the sixth step of the 43
"A" salary schedule. 44
(2) These employees shall receive the following salary supplements each month: 45
a. Ten percent (10%) of their monthly salary, excluding the supplement 46
provided pursuant to sub-subdivision b. of this subdivision. 47
b. Five hundred dollars ($500.00). 48
(3) These employees are eligible to receive salary supplements equivalent to those 49
of teachers for academic preparation at the six -year degree level or the 50
doctoral degree level. 51
General Assembly Of North Carolina Session 2025
Page 14 House Bill 1017-First Edition
(4) The twenty -sixth step of the salary schedule shall be seven and one -half 1
percent (7.5%) higher than the salary received by these same employees on 2
the twenty-fifth step of the salary schedule. 3
SECTION 1.17.(d) Beginning with the 2014 -2015 fiscal year, in lieu of pr oviding 4
annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those 5
longevity payments are included in the monthly amounts under the teacher salary schedule. 6
SECTION 1.17.(e) A teacher compensated in accordance with thi s salary schedule 7
for the 2026-2027 school year shall receive an amount equal to the greater of the following: 8
(1) The applicable amount on the salary schedule for the applicable school year. 9
(2) For teachers who were eligible for longevity for the 2013 -2014 school year, 10
the sum of the following: 11
a. The salary the teacher received in the 2013-2014 school year pursuant 12
to Section 35.11 of S.L. 2013-360. 13
b. The longevity that the teacher would have received under the longevity 14
system in effect for the 2013 -2014 school year provided in Section 15
35.11 of S.L. 2013-360 based on the teacher's current years of service. 16
c. The annual bonus provided in Section 9.1(e) of S.L. 2014-100. 17
(3) For teachers who were not eligible for longevity for the 2013 -2014 school 18
year, the sum of the salary and annual bonus the teacher received in the 19
2014-2015 school year pursuant to Section 9.1 of S.L. 2014-100. 20
SECTION 1.17.(f) As used in this section, the term "teacher" shall also include 21
instructional support personnel. 22
SECTION 1.17.(g) There is appropriated from the General Fund to the Department 23
of Public Instruction for the 2026 -2027 fiscal year the sum of seven hundred thirty -one million 24
eight hundred thousand dollars ($731,800,000) in recurring funds to implement the teacher raises 25
provided in this section. 26
SECTION 1.17.(h) It is the intent of the General Assembly to adjust compensation 27
for teachers in the 2027 -2028 fiscal year and subsequent fiscal years in accordance with 28
information provided by the Department of Public I nstruction in March of 2027 pursuant to the 29
compensation study referenced in Section 1.16 of this act. 30
31
FUNDS FOR NATIONAL BOARD CERTIFICATION APPLICATION FEE 32
SECTION 1.18. There is appropriated from the General Fund to the Department of 33
Public Instruction the sum of nine hundred thousand dollars ($900,000) in recurring funds for the 34
2026-2027 fiscal year to provide additional grants for reimbursement of the cost of the 35
participation fee for National Board for Professional Teaching Standards (NBPTS) certif ication 36
pursuant to G.S. 115C-296.2A. 37
38
PART II. WELL -PREPARED, HIGH -QUALITY, AN D SUPPORTED PRINCIPA L IN 39
EVERY SCHOOL 40
41
EXPANSION OF THE NORTH CAROLINA PRINCIPAL FELLOWS PROGRAM 42
SECTION 2.1. There is appropriated from the General Fund to the North Carolina 43
Principal Fellows Trust Fund the sum of thirteen million two hundred thousand dollars 44
($13,200,000) in recurring funds for the 2026 -2027 fiscal year to be used to provide forgivable 45
loans for additional principal candidates through principal preparation programs that are provided 46
grants under the North Carolina Principal Fellows Program (Program) established pursuant to 47
Article 5C of Chapter 116 of the General Statutes. 48
49
STATEWIDE SCHOOL LEADERSHIP ACADEMY 50
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 15
SECTION 2.2.(a) The State Board of Education shall develop a plan for the creation 1
of a School Leadership Academy to provide initial and ongoing support to the State's local school 2
administrative units and school leaders. The plan for the School Leadership Academy shall 3
include at least the following components: 4
(1) Equity training for all local school administrative units and school leaders. 5
(2) Training and ongoing support for local board of education members focused 6
on the needs of successful schools and turnaround schools. 7
(3) Mentorship and individual ized coaching for novice principals and for 8
experienced principals in high -need schools focused on dismantling 9
impediments to student success in their schools. 10
(4) Peer support networks, such as facilitated partnership networks and rapid 11
response hotlines that provide immediate assistance. 12
(5) Aligned, ongoing, research-driven professional learning. 13
The State Board shall take into consideration any existing school administrator 14
leadership training opportunities when creating this plan. 15
SECTION 2.2.(b) By February 15, 2027, the State Board shall report to the Joint 16
Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of 17
State Budget and Management on its proposal for the School Leadership Academy, including the 18
plan for implementation and an estimation of costs. 19
SECTION 2.2.(c) Beginning with the 2027 -2028 school year, the Department of 20
Public Instruction shall operate and support the School Leadership Academy according to the 21
plan developed by the State Board of Education pursuant to subsection (a) of this section. 22
23
PRINCIPAL SALARY SCHEDULE 24
SECTION 2.3.(a) The following annual salary schedule for principals shall apply 25
for the 2026-2027 fiscal year beginning July 1, 2026: 26
2026-2027 Principal Annual Salary Schedule 27
Avg. Daily Membership Base Met Growth Exceeded Growth 28
0-200 $84,934 $93,425 $101,920 29
201-400 $89,179 $98,097 $107,015 30
401-700 $93,425 $102,769 $112,112 31
701-1,000 $97,674 $107,439 $117,208 32
1,001-1,600 $101,920 $112,112 $122,304 33
1,601+ $106,165 $116,782 $127,399 34
A principal's placement on the salary schedule shall be determined according to the 35
average daily membership of the school supervised by the principal, as described in subsection 36
(b) of this section, and the school growth scores, calculated pursuant to G.S . 115C-83.15(c), for 37
each school the principal supervised in at least two of the prior three school years, as described 38
in subsection (c) of this section, regardless of a break in service, and provided the principal 39
supervised each school as a principal for at least a majority of the school year, as follows: 40
(1) A principal shall be paid according to the Exceeded Growth column of the 41
schedule if the school growth scores show the school or schools exceeded 42
expected growth in at least two of the prior three school years. 43
(2) A principal shall be paid according to the Met Growth column of the schedule 44
if any of the following apply: 45
a. The school growth scores show the school or schools met expected 46
growth in at least two of the prior three school years. 47
b. The school growth scores show the school or schools met expected 48
growth in at least one of the prior three school years and exceeded 49
expected growth in one of the prior three school years. 50
General Assembly Of North Carolina Session 2025
Page 16 House Bill 1017-First Edition
c. The principal supervised a school in at least two of the prior three 1
school years that was not eligible to receive a school growth score. 2
(3) A principal shall be paid according to the Base column if any of the following 3
apply: 4
a. The school growth scores show the school or schools did not meet 5
expected growth in at least two of the prior three school years. 6
b. The principal has not supervised any school as a principal for a 7
majority of the school year in at least two of the prior three school 8
years. 9
SECTION 2.3.(b) For purposes of determining the average daily membership of a 10
principal's school, the allotted average daily membership for the school for the applicable school 11
year shall be used. For purposes of this section, the allotted average daily membership of a 12
principal's school shall include any prekindergarten students in membership at that school. 13
SECTION 2.3.(c) For purposes of determining the school growth scores for each 14
school the principal supervised in one or more prior school years, the following school growth 15
scores shall be used during the following time periods: 16
(1) For the first six months of the applicable fiscal year, the school growth scores 17
from the first, second, and third years. 18
(2) For the second six months of the applicable fiscal year, the school growth 19
scores from the second, third, and fourth years. 20
(3) If a principal does not have a school growth score from any of the school years 21
identified in this subsection, the most recent available growth scores, up to the 22
fourth year, shall be used. 23
SECTION 2.3.(d) Beginning with the 2017 -2018 fiscal year, in lieu of providing 24
annual longevity payments to principals paid on the principal salary schedule, the amounts of 25
those longevity payments are included in the annual amounts under the principal salary schedule. 26
SECTION 2.3.(e) A principal compensated in accordance with this section for the 27
2026-2027 fiscal year shall receive an amount equal to the greater of the following: 28
(1) The applicable amount on the principal salary schedule for the applicable 29
fiscal year. 30
(2) For principals who were eligible for longevity in the 2016 -2017 fiscal year, 31
the sum of the following: 32
a. The salary the principal received in the 2016-2017 fiscal year pursuant 33
to Section 9.1 or Section 9.2 of S.L. 2016-94. 34
b. The longevity that the principal would have received as provi ded for 35
State employees under the North Carolina Human Resources Act for 36
the 2016 -2017 fiscal year based on the principal's current years of 37
service. 38
(3) For principals who were not eligible for longevity in the 2016 -2017 fiscal 39
year, the salary the principal received in the 2016-2017 fiscal year pursuant to 40
Section 9.1 or Section 9.2 of S.L. 2016-94. 41
SECTION 2.3.(f) For purposes of this section, the following definitions apply: 42
(1) First year. – The school year immediately preceding the second year. 43
(2) Fourth year. – The school year immediately preceding the applicable school 44
year. 45
(3) Second year. – The school year immediately preceding the third year. 46
(4) The applicable fiscal year. – The 2026-2027 fiscal year. 47
(5) The applicable school year. – The 2026-2027 school year. 48
(6) Third year. – The school year immediately preceding the fourth year. 49
SECTION 2.3.(g) There is appropriated from the General Fund to the Department 50
of Public Instruction for the 2026-2027 fiscal year the sum of thirty million five hundred thousand 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 17
dollars ($30,500,000) in recurring funds to increase salaries for principals in accordance with this 1
section. 2
SECTION 2.3.(h) It is the intent of the General Assembly to adjust compensation 3
for principals in the 2027 -2028 fiscal year and su bsequent fiscal years in accordance with any 4
information provided by the Department of Public Instruction in March of 2027 pursuant to the 5
compensation study referenced in Section 1.16 of this act. 6
7
ASSISTANT PRINCIPAL SALARIES 8
SECTION 2.4.(a) For the 2026-2027 fiscal year, beginning July 1, 2026, assistant 9
principals shall receive a monthly salary based on the salary schedule for teachers who are 10
classified as "A" teachers plus nineteen percent (19%). An assistant principal shall be placed on 11
the step on the salary schedule that reflects the total number of years of experience as a certified 12
employee of the public schools. For purposes of this section, an administrator with a one -year 13
provisional assistant principal's certificate shall be considered equivalent to an assistant principal. 14
SECTION 2.4.(b) Assistant principals with certification based on academic 15
preparation at the six -year degree level shall be paid a salary supplement of one hundred 16
twenty-six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary 17
supplement of two hundred fifty-three dollars ($253.00) per month. 18
SECTION 2.4.(c) Participants in an approved full -time master's in school 19
administration program shall receive up to a 10-month stipend during the internship period of the 20
master's program. The stipend shall be at the beginning salary of an assistant principal or, for a 21
teacher who becomes an intern, at least as much as that person would earn as a teacher on the 22
teacher salary schedule. The North Carolina Principal Fellows Program or the school of education 23
where the intern participates in a full-time master's in school administration program shall supply 24
the Department of Public Instruction with certification of eligible full-time interns. 25
SECTION 2.4.(d) Beginning with the 2017 -2018 fiscal year, in lieu of providing 26
annual longevity payments to assistant principals on the assistant principal salary schedule, the 27
amounts of those longevity payments are included in the monthly amounts provided to assistant 28
principals pursuant to subsection (a) of this section. 29
SECTION 2.4.(e) An assistant principal compensated in accordance with this section 30
for the 2026-2027 fiscal year shall receive an amount equal to the greater of the following: 31
(1) The applicable amount on the salary schedule for the applicable year. 32
(2) For assistant principals who were eligible for longevity in the 2016-2017 fiscal 33
year, the sum of the following: 34
a. The salary the assistant principal received in the 2016-2017 fiscal year 35
pursuant to Section 9.1 or Section 9.2 of S.L. 2016-94. 36
b. The longevity that the assistant principal would have received as 37
provided for State employees under the North Carolina Human 38
Resources Act for the 2016 -2017 fiscal year based on the assistant 39
principal's current years of service. 40
(3) For assistant principals who were not eligible for longevity in the 2016 -2017 41
fiscal year, the salary the assistant principal received in the 2016 -2017 fiscal 42
year pursuant to Section 9.1 or Section 9.2 of S.L. 2016-94. 43
SECTION 2.4.(f) There is appropriated from the General Fund to the Department of 44
Public Instruction for the 2026 -2027 fiscal year the sum of fourteen million three hundred 45
thousand dollars ($14,300,000) in recurring funds to increase salaries for assistant princi pals in 46
accordance with this section. 47
SECTION 2.4.(g) It is the intent of the General Assembly to adjust compensation 48
for assistant principals in the 2027 -2028 fiscal year and subsequent fiscal years in accordance 49
with any information provided by the Depa rtment of Public Instruction in March of 2027 50
pursuant to the compensation study referenced in Section 1.16 of this act. 51
General Assembly Of North Carolina Session 2025
Page 18 House Bill 1017-First Edition
1
PLAN FOR SCHOOL-BASED ADMINISTRATOR GRANT PROGRAM 2
SECTION 2.5.(a) No later than March 15, 2027, the State Board of Education shall 3
develop and report to the Joint Legislative Education Oversight Committee and the Fiscal 4
Research Division a plan to implement and evaluate the effectiveness of incentive programs to 5
encourage well-qualified principals and assistant principals to work in high-need schools. These 6
programs may include salary supplements for principals who take positions in chronically 7
low-performing schools, protection for principals against salary reduction for working in 8
high-need or low -performing schools, and rewards for pr incipals and assistant principals for 9
making progress on school performance. 10
SECTION 2.5.(b) It is the intent of the General Assembly to implement advisable 11
components of the plan developed pursuant to subsection (a) of this section. 12
SECTION 2.5.(c) There is appropriated from the General Fund to the Department 13
of Public Instruction for the 2026-2027 fiscal year the sum of fifty thousand dollars ($50,000) in 14
nonrecurring funds to develop and report the plan described in subsection (a) of this section. 15
16
RECOMMENDATIONS FOR ADDITIONAL AUTONOMY AND RESOURCES FOR 17
PRINCIPALS AND SUPERINTENDENTS IN LOCAL SCHOOL ADMINISTRATIVE 18
UNITS 19
SECTION 2.6.(a) No later than November 15, 2027, the Department of Public 20
Instruction shall survey local school administrative un its on recommendations to increase 21
autonomy and resources for principals and superintendents. No later than February 15, 2028, the 22
Department shall compile responses from this survey and report them to the Joint Legislative 23
Education Oversight Committee and the Fiscal Research Division. 24
SECTION 2.6.(b) It is the intent of the General Assembly to implement advisable 25
recommendations submitted to the Department pursuant to subsection (a) of this section in the 26
2028-2029 fiscal year and subsequent fiscal years. 27
28
PART III. FINANCE SY STEM THAT PROVIDES A DEQUATE, EQUITABLE, AND 29
EFFICIENT RESOURCES 30
31
BUDGET FLEXIBILITY FOR LOCAL BOARDS OF EDUCATION 32
SECTION 3.1.(a) G.S. 115C-105.25(b) reads as rewritten: 33
"(b) Subject to the following limitations, local boards of edu cation may transfer and may 34
approve transfers of funds between funding allotment categories: 35
(1) Repealed by Session Laws 2013-360, s. 8.14, effective July 1, 2013. 36
(1a) Funds for career and technical education and other purposes may be 37
transferred only as permitted by federal law and the conditions of federal 38
grants or as provided through any rules that the State Board of Education 39
adopts to ensure compliance with federal regulations. 40
(1b) No funds shall be transferred out of the children with disabilities allotment 41
category. 42
(2), (2a) Repealed by Session Laws 2013-360, s. 8.14, effective July 1, 2013. 43
(3) No funds shall be transferred into the central office administration allotment 44
category. 45
(3a) No funds shall be transferred out of the teacher assistants allotment category. 46
(3b) No funds shall be transferred out of the academically or intellectually gifted 47
children allotment category. 48
(4), (5) Repealed by Session Laws 2013-360, s. 8.14, effective July 1, 2013. 49
(5a) No positions shall be transferred out of the allocation for classroom teachers 50
for kindergarten through twelfth grade, except as provided in this subdivision. 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 19
Positions allocated for classroom teachers may be converted to dollar 1
equivalents to contract for visiting international exchange teachers through a 2
visiting international exchange teacher program approved by the State. These 3
positions shall be converted at the statewide average salary for classroom 4
teachers, including benefits. The converted funds shall be used only to provide 5
visiting international exchange teachers with salaries commensurate with their 6
experience levels, to provide any State -approved bonuses, and to cover the 7
costs associated with supporting visiting international exchange teachers 8
within the local school administrative unit, including programming and 9
related activities, background checks, medical coverage, and other program 10
administration services in accordance with the federal regulations for the 11
Exchange Visitor Program, 22 C.F.R. Part 62. 12
(5b) Positions allocated Except as provided in subdivision (5a) of this subsection, 13
positions allocated for classroom teachers and for instructional support 14
personnel may be converted to dollar equivalents for any purpose authorized 15
by the policies of the State Board of Education. These positions shall be 16
converted at the salary on the first step of the "A" Teachers Salary Schedule. 17
Certified position allotments shall not be transferred to dollars to hire the same 18
type of position. 19
(5c) Funds allocated for school building administration may be converted for any 20
purpose authorized by the policies of the State Board of Education. For funds 21
related to principal positions, the salary transferred shall be based on the first 22
step of the Base column of the Principal Salary Schedule. For funds related to 23
assistant principal months of employment, the salary transferred shall be based 24
on the first step of the "A" Teachers Salary Schedule at the salary level for 25
assistant principals. Certified position a llotments shall not be transferred to 26
dollars to hire the same type of position. 27
(5d) No positions shall be transferred out of the allocation for program 28
enhancement teachers for kindergarten through fifth grade except as provided 29
in this subdivision. Positions allocated for program enhancement teachers for 30
kindergarten through fifth grade may be converted into positions allocated for 31
classroom teachers for kindergarten through twelfth grade. For the purposes 32
of this subdivision, the term "program enhanceme nt" is as defined in 33
G.S. 115C-301(c2). 34
(6) through (9) Repealed by Session Laws 2013 -360, s. 8.14, effective July 1, 35
2013. 36
(10) Funds to carry out the elements of the Excellent Public Schools Act that are 37
contained in Section 7A.1 of S.L. 2012-142 shall not be transferred. 38
(10a) No funds shall be transferred out of the limited English proficiency allotment 39
category. 40
(11) No funds shall be transferred into or out of the driver education allotment 41
category. 42
(12) Funds allotted for textbooks and digital resou rces may only be used for the 43
purchase of textbooks and digital resources. These funds shall not be 44
transferred out of the allotment for any other purpose. 45
(13) No positions shall be transferred out of the allocation for school health 46
personnel except as provided in this subdivision. Positions allocated for school 47
health personnel may be converted to dollar equivalents for contracted 48
services directly related to school psychology, school counseling, school 49
nursing, and school social work. These positions sh all be converted at the 50
minimum salary for the position on the "A" Teachers Salary Schedule." 51
General Assembly Of North Carolina Session 2025
Page 20 House Bill 1017-First Edition
SECTION 3.1.(b) This section applies beginning with the 2026-2027 school year. 1
2
FUNDS FOR CHILDREN WITH DISABILITIES 3
SECTION 3.2.(a) G.S. 115C-111.05 reads as rewritten: 4
"§ 115C-111.05. Funding for children with disabilities. 5
To the extent funds are made available for this purpose, the State Board shall allocate funds 6
for children with disabilities to each local school administrative unit on a per child basis. Each 7
local school administrative unit shall receive funds for the lesser of (i) all children who are 8
identified as children with disabilities or (ii) thirteen percent (13%) of its allocated average daily 9
membership in the local school administrative unit for the current school year.on the basis of the 10
reported cost of the services provided." 11
SECTION 3.2.(b) There is appropriated from the General Fund to the Department 12
of Public Instruction the sum of four hundred fifty million three hundred twenty -four thousand 13
two hundred seventy -three dollars ($450,324,273) in recurring funds for the 2026 -2027 fiscal 14
year to implement the plan for weighted funding for children with disabilities on the basis of the 15
reported cost of services provided developed by the Depart ment of Public Instruction pursuant 16
to Section 7.7 of S.L. 2023-134. The Department shall begin distributing funds for children with 17
disabilities based on this model beginning with the 2026-2027 school year. 18
19
REVISE SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES 20
SECTION 3.3.(a) Subsections (d) and (e) of G.S. 115C-472.22 read as rewritten: 21
"(d) Allocation of Funds. – Except as provided in subsection (f) of this section, the amount 22
received per average daily membership for a county shall be the difference between one hundred 23
ten percent (110%) of the State average current expense appropriations pe r student and the 24
current expense appropriations per student that the county could provide given the county's 25
wealth and an average effort to fund public schools. To derive the current expense appropriations 26
per student that the county could be able to pro vide given the county's wealth and an average 27
effort to fund public schools, multiply the county's wealth as a percentage of State average wealth 28
by the State average current expense appropriations per student. The funds for the local school 29
administrative units located in whole or in part in the county shall be allocated to each local 30
school administrative unit located in whole or in part in the county based on the average daily 31
membership of the county's students in the school units. If the funds appropri ated for 32
supplemental funding are not adequate to fund the formula fully, each local school administrative 33
unit shall receive a pro rata share of the funds appropriated for supplemental funding. 34
(e) Formula for Distribution of Supplemental Funding Pursuant to This Section Only. – 35
The formula in this section is solely a basis for distribution of supplemental funding for 36
low-wealth counties and is not intended to reflect any measure of the adequacy of the educational 37
program or funding for public schools. The formula is also not intended to reflect any 38
commitment by the General Assembly to appropriate any additional supplemental funds for low-39
wealth counties. counties. It is the intent of the General Assembly to incrementally increase 40
appropriations for the low-wealth allotment to provide eligible counties supplemental funding 41
equal to one hundred ten percent (110%) of the statewide local revenue per student by fiscal year 42
2027-2028. The State Board of Education shall adjust the formula to ensure each local scho ol 43
administrative unit receives a pro rata share of the additional funds appropriated for the 44
low-wealth allotment in this section for supplemental funding." 45
SECTION 3.3.(b) There is appropriated from the General Fund to the Department 46
of Public Instruction the sum of one hundred fifty -four million one hundred thousand dollars 47
($154,100,000) in recurring funds for the 2026-2027 fiscal year to implement the changes to the 48
low-wealth allotment enacted by this section. 49
50
FUNDING FOR LIMITED ENGLISH PROFICIENCY STUDENTS 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 21
SECTION 3.4.(a) The title of Article 32F of Chapter 115C of the General Statutes 1
reads as rewritten: 2
"Supplemental School Funding.Funding and Other Allotments." 3
SECTION 3.4.(b) Article 32F of Chapter 115C of the General Statutes is amended 4
by adding a new section to read: 5
"§ 115C-472.30. Limited English proficient allotment. 6
(a) To the extent funds are made available for this purpose, the State Board of Education 7
shall allocate funds to local school administrative units, charter schools, region al schools, and 8
laboratory schools operated under Article 29A of Chapter 116 of the General Statutes to provide 9
services to students with limited English proficiency. The State Board shall allocate these funds 10
under a formula that is based on the average number of students in the units , charter schools, 11
regional schools, or laboratory schools over the past three years who have limited English 12
proficiency. 13
(b) Local school administrative units shall use funds allocated to them to pay for 14
classroom teachers, teacher assistants, tutors, instructional materials, transportation costs, and 15
professional development of teachers for students with limited English proficiency. 16
(c) A county in which a local school administrative unit receives funds under this section 17
shall use the funds to supplement local current expense funds and shall not supplant local current 18
expense funds." 19
SECTION 3.4.(c) Subsection (a) of Section 7.9 of S.L. 2007-323 is repealed. 20
SECTION 3.4.(d) There is appropriated from the General Fund to the Department 21
of Public Instruction the sum of one hundred eighty -one million dollars ($181,000,000) in 22
recurring funds for the 2026-2027 fiscal year to implement the requirements of this section. 23
24
TEACHER ASSISTANT ALLOTMENT 25
SECTION 3.5.(a) Section 8.47(b) of S.L. 2015-241 is repealed. 26
SECTION 3.5.(b) Article 21 of Chapter 115C of the General Statutes is amended by 27
adding a new section to read: 28
"§ 115C-316.6. Teacher assistant allotment. 29
(a) To the extent funds are made available, the State Board of Education shall establish a 30
funding allotment for teacher assistant positions. The State Board is authorized to adopt rules for 31
the allocation of teacher assistant positions pursuant to this allotm ent. Funds allocated pursuant 32
to this section shall be distributed based on the following: 33
(1) An estimated statewide average salary and benefits per teacher assistant 34
position. 35
(2) The requirements of subsection (d) of this section. 36
(b) Beginning with the 2026-2027 fiscal year, t here is appropriated from the General 37
Fund to the Department of Public Instruction for the following fiscal years the following amounts 38
to the teacher assistant allotment: 39
Fiscal Year Appropriation 40
2026-2027 $201,500,000 41
2027-2028 and each subsequent fiscal year thereafter $280,300,000 42
(c) When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year 43
specified in subsection ( b) of this section, the Director of the Budget shall include the 44
appropriated amount for that fiscal year. 45
(d) Funds appropriated pursuant to subsection (b) of this section shall be allocated to local 46
school administrative units to increase positions for teacher assistants in the following fiscal years 47
to the following statewide ratios of teacher assistants to students in kindergarten through grade 48
three: 49
Fiscal Year Teacher Assistants 50
2026-2027 1:30 51
General Assembly Of North Carolina Session 2025
Page 22 House Bill 1017-First Edition
2027-2028 and each subsequent fiscal year thereafter 1:27." 1
2
INCREASE FUNDING FOR INSTRUCTIONAL SUPPORT PERSONNEL 3
SECTION 3.6.(a) G.S. 115C-316.5 reads as rewritten: 4
"§ 115C-316.5. School health personnel allotment. 5
(a) For the purposes of this section, the term "school health personnel" refers to the same 6
positions listed in G.S. 115C-316.2(a). 7
(b) To the extent funds are made available, the The State Board of Education shall 8
establish a funding allotment for school health personnel positions. There is appropriated from 9
the General Fund to the Department of Public Instruction to fund the allotment the following 10
amounts in the fiscal years identified: 11
Fiscal Year Appropriation 12
2026-2027 $614,800,000 13
2027-2028 and each subsequent fiscal year thereafter $796,600,000 14
(b1) When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year 15
specified in subsection (b) of this section, the Director of the Budget shall include the 16
appropriated amount for that fiscal year. 17
(b2) The State Board is authorized to shall adopt rules for the allocation of school health 18
personnel positions pursuant to this allotment. Rules adopted by the State Board pursuant to this 19
section shall include, at a minimum, the following requirements: 20
(1) School health personnel positions are allocated on the basis of average daily 21
membership. 22
(2) Each local school administrative unit receives sufficient fundi ng for at least 23
one school psychologist position. to fulfill the position -to-student ratios 24
identified in subsection (c) of this section. 25
(3) Local school administrative units are encouraged to fill positions under this 26
allotment with full -time, permanent employees. If the local school 27
administrative unit is unable to fill these positions by hiring a full -time, 28
permanent employee, the allocation for the position may be converted to a 29
dollar equivalent for the unit to contract with a third party to provide t he 30
relevant services for an amount of hours equivalent to the hours a full -time 31
position employee would provide. 32
(c) Local school administrative units shall increase school health personnel positions 33
each fiscal year until the 2028-2029 fiscal year at the following position-to-student ratios: 34
Fiscal Year Nurses Counselors Social Workers Psychologists 35
2026-2027 1:657 1:275 1:496 1:885 36
2027-2028 37
and each subsequent 38
fiscal year thereafter 1:574 1:250 1:400 1:700." 39
SECTION 3.6.(b) Article 21 of Chapter 115C of the General Statutes is amended by 40
adding a new section to read: 41
"§ 115C-316.7. Instructional support allotment. 42
(a) Beginning with the 20 26-2027 fiscal year, t here is appropriated from the General 43
Fund to the Department of Public Instruction for the following fiscal years the following amounts 44
to the instructional support allotment: 45
Fiscal Year Appropriation 46
2026-2027 $49,400,000 47
2027-2028 and each subsequent fiscal year thereafter $73,400,000 48
(b) When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year 49
specified in subsection (a) of this section, the Director of the Budget shall include the 50
appropriated amount for that fiscal year. 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 23
(c) Funds appropriated pursuant to subsection (a) of this section shall be allocated to local 1
school administrative units to increase instructional support personnel positions each fiscal year 2
until the 2028-2029 fiscal year at the following position-to-student ratios: 3
Fiscal Year Media Coordinators 4
2026-2027 1:608 5
2027-2028 and each subsequent fiscal year thereafter 1:547." 6
7
CONSOLIDATE ALLOTMENTS INTO A SINGLE ALLOTMENT 8
SECTION 3.7. The Department of Public Instruction shall report to the Joint 9
Legislative Education Oversight Committee on a method to combine all dollar allotments 10
currently distributed on the basis of average daily membership into a single allotment. The 11
Department shall submit the report no later than February 15, 2027. 12
13
INCREASE ALLOTTED ASSISTANT PRINCIPAL MONTHS OF EMPLOYMENT 14
SECTION 3.8. There is appropriated from the General Fund to the Department of 15
Public Instruction the recurring sum of twenty -four million e ight hundred thousand dollars 16
($24,800,000) in the 2026 -2027 fiscal year to increase the school building administration 17
allotment. These funds shall be used to increase the ratio of assistant principals to students in all 18
local school administrative units. 19
20
INCREASE FUNDING FOR CENTRAL OFFICE STAFF 21
SECTION 3.9. There is appropriated from the General Fund to the Department of 22
Public Instruction the recurring sum of twenty -nine million three hundred fifty -five thousand 23
three hundred fifty-five dollars ($29,355,355) in the 2026-2027 fiscal year to increase the central 24
office administration allotment. These funds shall be used to support additional personnel and 25
services provided by central office staff in local school administrative units. 26
27
CENTRAL OFFICE SALARIES 28
SECTION 3.10.(a) The monthly salary maximums that follow apply to assistant 29
superintendents, associate superintendents, directors/coordinators, supervisors, and finance 30
officers for the 2026-2027 fiscal year beginning July 1, 2026: 31
2026-2027 Fiscal Year 32
Maximum 33
School Administrator I $7,800 34
School Administrator II $8,265 35
School Administrator III $8,757 36
School Administrator IV $9,099 37
School Administrator V $9,463 38
School Administrator VI $10,023 39
School Administrator VII $10,424 40
The local board of education shall determine the appropriate category and placement 41
for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or 42
finance officer within the maximums and within funds appropriated by the General Assembly 43
for central office administrators and superintendents. The category in which an employee is 44
placed shall be included in the contract of any employee. 45
SECTION 3.10.(b) The monthly salary maximums that follow apply to 46
superintendents for the 2026-2027 fiscal year beginning July 1, 2026: 47
2026-2027 Fiscal Year 48
Maximum 49
Superintendent I $11,049 50
Superintendent II $11,707 51
General Assembly Of North Carolina Session 2025
Page 24 House Bill 1017-First Edition
Superintendent III $12,410 1
Superintendent IV $13,156 2
Superintendent V $13,947 3
The local board of education shall determine the appropriate category and placement 4
for the superintendent based on the average daily membership of the local school administrative 5
unit and within funds appropriated by the General Assembly for central office administrators and 6
superintendents. 7
SECTION 3.10.(c) Longevity pay for superintendents, assistant superintendents, 8
associate superintendents, directors/coordinators, supervisors, and finance officers shall be as 9
provided for State employees under the North Carolina Human Resources Act. 10
SECTION 3.10.(d) Superintendents, assistant superintendents, associate 11
superintendents, directors/coordinators, supervisors, and finance officers with certification based 12
on academic preparation at the six -year degree level shall receive a salary supplement of one 13
hundred twenty -six dollar s ($126.00) per month in addition to the compensation provided 14
pursuant to this section. Superintendents, assistant superintendents, associate superintendents, 15
directors/coordinators, supervisors, and finance officers with certification based on academic 16
preparation at the doctoral degree level shall receive a salary supplement of two hundred 17
fifty-three dollars ($253.00) per month in addition to the compensation provided for under this 18
section. 19
SECTION 3.10.(e) The State Board of Education shall not permi t local school 20
administrative units to transfer State funds from other funding categories for salaries for public 21
school central office administrators. 22
23
ESTABLISH MECHANISM TO CONTINUALLY UPDATE STATE SPENDING FOR 24
INFLATION AND ENROLLMENT GROWTH 25
SECTION 3.11. The Department of Public Instruction, when submitting budget 26
adjustment requests to the General Assembly and the Office of State Budget and Management, 27
shall include adjustments for inflation and other rising costs associated with providing a sound 28
basic education. 29
30
APPROPRIATE FUNDS DIRECTLY TO CHARTER SCHOOLS 31
SECTION 3.12.(a) G.S. 115C-218.105 reads as rewritten: 32
"§ 115C-218.105. State and local funds for a charter school. 33
(a) The State Board of Education shall allocate to each charter school: 34
(1) An amount equal to the average per pupil allocation for average daily 35
membership from the local school administrative unit allotments for the local 36
school administrative unit in which the charter school is located for each child 37
attending the charter school except for the allocation for children with 38
disabilities and for the allocation for children with limited English 39
proficiency;school. 40
(2) An additional amount for each child attending the charter school who is a child 41
with disabilities; anddisabilities. 42
(3) An additional amount for children with limited English proficiency attending 43
the charter school, based on a formula adopted by the State Board. 44
In accordance with G.S. 115C-218.7 and G.S. 115C-218.8, the State Board shall allow for 45
annual adjustments to the amount allocated to a charter school based on its enrollment growth in 46
school years subsequent to the initial year of operation. 47
In the event a child with disabilities leaves the charter school and enrolls in a public school 48
during the first 60 school days in the school year, the charter school shall return a pro rata amount 49
of funds allocated for that child to the State Board, and the State Board shall reallocate those 50
funds to the local school administrative unit in which the public school is located. In the event a 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 25
child with disabilities enrolls in a charter school during the first 60 school days in the school year, 1
the State Board shall allocate to the charter school the pro rata amount of additional funds for 2
children with disabilities. 3
… 4
(b1) Counties may provide direct capital funds to charter schools by direct appropriation 5
as set forth in G.S. 153A-461. These funds shall be used only for the following purposes: 6
… 7
(b2) If a charter school uses funds provided in receives direct capital fund s under 8
subsection (b1) of this section to acquire or improve property, the amount provided by the county 9
shall be evidenced by a promissory note and secured by a deed of trust on the property acquired 10
or improved by the funds. The county may subordinate the deed of trust to other liens to facilitate 11
the acquisition or improvement of the property secured by the deed of trust. In the event that a 12
charter school repays the county in the amount of the capital funds provided, the county shall, 13
for the property acquired or improved by the funds, execute and file a deed of release or other 14
documentation of satisfaction showing the charter school repaid the county in the amount of the 15
capital funds provided. 16
(b3) For each child attending a charter school, the count y in which the child resides shall 17
allocate to the charter school an amount equal to the average per pupil allocation for average 18
daily membership, as determined in accordance with G.S. 115C-430. 19
(b4) Counties shall allocate funds to charter schools in accordance with G.S. 115C-437. 20
…." 21
SECTION 3.12.(b) G.S. 115C-218.105(c) through G.S. 115C-218.105(e) are 22
repealed. 23
SECTION 3.12.(c) G.S. 115C-423 reads as rewritten: 24
"§ 115C-423. Definitions. 25
The words and phrases defined in this section have the meanings indicated when used in this 26
Article, unless the context clearly requires another meaning: 27
(1) "Budget" is a Budget. – A plan proposed by a board of education for raising 28
and spending money for specified school programs, functions, activities, or 29
objectives during a fiscal year. 30
(2) "Budget resolution" is a Budget resolution. – A resolution adopted by a board 31
of education that appropriates revenues for specified school programs, 32
functions, activities, or objectives during a fiscal year. 33
(3) "Budget year" is the Budget year. – The fiscal year for which a budget is 34
proposed and a budget resolution is adopted. 35
(4) "Fiscal year" is the Fiscal year. – The annual period for the compilation of 36
fiscal operations. The fiscal year begins on July 1 and ends on June 30. 37
(5) "Fund" is an Fund. – An independent fiscal and accounting entity consisting 38
of cash and other resources together with all related liabilities, obligations, 39
reserves, and equities which are segregated by appropriate accounting 40
techniques for the purpose of carrying on specific activities or attaining certain 41
objectives in accordance with established legal regulations, restrictions or 42
limitations. 43
(6) "Vending facilities" has the same meaning as it does in Local schools. – All 44
local school administrative units located in a county, plus any charter schools 45
that are attended by children residing in the county. 46
(7) Vending facilities. – As defined in G.S. 111-42(d), but also means any 47
mechanical or electronic device dispensing items or s omething of value or 48
entertainment or services for a fee, regardless of the method of activation, and 49
regardless of the means of payment, whether by coin, currency, tokens, or 50
other means." 51
General Assembly Of North Carolina Session 2025
Page 26 House Bill 1017-First Edition
SECTION 3.12.(d) G.S. 115C-430 reads as rewritten: 1
"§ 115C-430. Apportionment of county appropriations among local school administrative 2
units.schools. 3
If there is more than one local school administrative unit in a county, all All appropriations 4
by the county to the local current expense funds of the units, schools, except appropriations 5
funded by supplemental taxes levied less than countywide pursuant to a local act of 6
G.S. 115C-501 to 115C -511, must be apportioned according to the membership of each unit. 7
average daily membership. County appropriations are properly apportioned when the dollar 8
amount obtained by dividing the amount so appropriated to each unit appropriated to each local 9
school administrative unit in the county and each chart er school a resident child is attending by 10
the total membership of the unit or number of resident charter school attendees is the same for 11
each unit. The total membership of the local school administrative unit is the unit's average same. 12
Average daily membership for the budget year to shall be determined by and certified to the unit 13
local schools and the board of county commissioners by the State Board of Education." 14
SECTION 3.12.(e) G.S. 115C-431 reads as rewritten: 15
"§ 115C-431. Procedure for resolution of dispute between board of education the governing 16
body of a local school and a board of county commissioners. 17
(a) If the board of education governing body of a local school determines that the amount 18
of money appropriated to the local current expense fund, or the capital outlay fund, or both, by 19
the board of county commissioners to a local school administrative unit or charter school is not 20
sufficient to support a system of free public schools, then the chairman of the board of education 21
governing body of the local school and the chairman of the board of county commissioners shall 22
arrange a joint meeting of the two boards to be held within seven days after the day of the county 23
commissioners' decision on the school appropriations. 24
Prior to the joint meeting, the Senior Resident Superior Court Judge shall appoint a mediator 25
unless the boards agree to jointly select a mediator. The mediator shall preside at the joint meeting 26
and shall act as a neutral facilitator of disclosures of factual information, statements of positions 27
and contentions, and efforts to negotiate an agreement settling the boards' differences. 28
At the joint meeting, the entire school budget shall be considered carefully and judiciously, 29
and the two boards shall make a good -faith attempt to resolve the differences that have arisen 30
between them. 31
(b) If no agreement is reached at the joint meeting of the two boards, the mediator shall, 32
at the request of either board, commence a mediation immediately or within a reasonable period 33
of time. The mediation shall be held in accordance with rules and standards of conduct adopted 34
under Chapter 7A of the General Statutes governing mediated settlement conferences but 35
modified as appropriate and suitable to the resolution of the particular issues in disagreement. 36
Unless otherwise agreed upon by both boards, the following individuals shall constitute the 37
two working groups empowered to represent their respective boards during the mediation: 38
(1) The chair of each board or the chair's designee;designee. 39
(2) The superintendent of the local school administrative unit or the chairman of 40
the charter school board of directors, and the county manager manager, or 41
either's designee;any of their designees. 42
(3) The finance officer of each board; andboard. 43
(4) The attorney for each board. 44
Members of both the boards, their chairs, and representatives shall cooperate with and respond 45
to all reasonable requests of the mediator to participate in the mediation. Notwithstanding Article 46
33C of Chapter 143 of the General Statutes, the mediation proceedings involving the two working 47
groups shall be conducted in private. Evidence of statements made and conduct occurring in a 48
mediation are not subject to discovery and are inadmissible in any court action. However, no 49
evidence otherwise discoverable is inadmissible merely because it is presented or discussed in a 50
mediation. The mediator shall not be compelled to testify or produce evidence concerning 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 27
statements made and conduct occurring in a mediation in any civil proceeding for any purpose, 1
except disciplinary hearings before the State Bar or any agency established to enforce standards 2
of conduct for mediators. Reports by members of either working group to their respective boards 3
shall be made in compliance with Article 33C of Chapter 143 of the General Statutes. 4
Unless both boards agree otherwise, or unless the boards have already resolved their dispute, 5
the mediation shall end no later than August 1. The mediator shall have the authority to determine 6
that an impasse exists and to discontinu e the mediation. The mediation may continue beyond 7
August 1 provided both boards agree. If both boards agree to continue the mediation beyond 8
August 1, the board of county commissioners shall appropriate to the local school administrative 9
unit for deposit in the local current expense fund or to a charter school a sum of money sufficient 10
to equal the local contribution to this fund for the previous year. 11
If the working groups reach a proposed agreement, the terms and conditions must be 12
approved by each board. If no agreement is reached, the mediator shall announce that fact to the 13
chairs of both boards, the Senior Resident Superior Court Judge, and the public. The mediator 14
shall not disclose any other information about the mediation. The mediator shall not ma ke any 15
recommendations or public statement of findings or conclusions. 16
The local board of education governing body of the local school and the board of county 17
commissioners shall share equally the mediator's compensation and expenses. The mediator's 18
compensation shall be determined according to rules adopted under Chapter 7A of the General 19
Statutes. 20
(b1) If agreement is not reached in mediation on the amount of money appropriated to the 21
local current expense fund, fund or charter school , and the amount to be appropriated has not 22
been calculated pursuant to this subsection for longer than the prior year, the sum to be 23
appropriated for the budget year in dispute shall be calculated as follows: 24
(1) The amount of moneys appropriated to the local current expense fund by the 25
board of county commissioners in the prior fiscal year that are expended in 26
that year by the local school administrative unit or transferred as required by 27
G.S. 115C-75.10, 115C-218.105, 115C-238.70, and 116 -239.11 shall be 28
divided by the sum of the following: the average daily membership of the local 29
school administrative unit plus the share of the average daily membership of 30
any innovative, charter, regional, or laboratory school whose students reside 31
in the local school administrative unit f or the prior school year. For charter 32
schools, the amount of moneys appropriated to the charter school in the prior 33
fiscal year that are expended in that year divided by the average daily 34
membership of the charter school. 35
(2) The amount from subdivision (1 ) of this subsection, rounded to the nearest 36
penny, shall then be multiplied by the sum of one plus the twelve month 37
percent change in the second quarter Employment Cost Index for elementary 38
and secondary school workers as reported by the Federal Bureau of Labor 39
Statistics. 40
(3) The amount from subdivision (2) of this subsection, rounded to the nearest 41
penny, shall then be multiplied by the sum of the following: the allotted 42
average daily membership for the school year plus the share of the average 43
daily membership of any innovati ve, charter, regional, or laboratory school 44
whose students reside in the local school administrative unit for the budget 45
year in dispute. For charter schools, the amount shall be multiplied by the 46
allotted average daily membership for the school year. 47
The board of county commissioners shall appropriate to the local current expense fund or the 48
charter school the sum from subdivision (3) of this subsection, rounded to the nearest penny, to 49
the local board of education for the budget year in dispute. 50
General Assembly Of North Carolina Session 2025
Page 28 House Bill 1017-First Edition
(b2) If agreement is not reached in mediation, and the amount to be appropriated has been 1
calculated pursuant to subsection (b1) of this section to the local current expense fund for the 2
prior two years, the sum to be appropriated for the budget year in dispute shall be calculated as 3
follows: 4
(1) The amount of moneys appropriated to the local current expense fund by the 5
board of county commissioners in the prior fiscal year that are expended in 6
the prior fiscal year by the local school administrative unit and tr ansferred as 7
required by G.S. 115C-75.10, 115C-218.105, 115C-238.70, and 116 -239.11 8
shall be divided by the sum of the following: the average daily membership 9
plus the share of the average daily membership of any innovative, charter, 10
regional, or laborator y school whose students reside in the local school 11
administrative unit for the prior school year. For charter schools, the amount 12
of moneys appropriated to the charter school in the prior fiscal year that are 13
expended in that year divided by the average daily membership of the charter 14
school. 15
… 16
(4) The amount from subdivision (3) of this subsection shall then be multiplied 17
by the sum of the following: the allotted average daily membership for the 18
school year plus the share of the average daily membership of any innovative, 19
charter, regional, or laboratory school whose students reside in the local 20
school administrative unit for the budget year in dispute. For charter schools, 21
the amount shall be multiplied by the funded average daily membership for 22
the school year. 23
The board of county commissioners shall appropriate to the local current expense fund or to 24
the charter school the sum from subdivision (4) of this subsection, rounded to the nearest penny, 25
to the local board of education for the budget year in dispute. 26
(b3) Neither the local board of education governing body of the local school nor the board 27
of county commissioners shall file any legal action challenging the determination as to the funds 28
to be appropriated by the board of county commissioners to the local current expense fund in 29
accordance with under the formulas found in subsections (b1) and (b2) of this section. 30
…." 31
SECTION 3.12.(f) G.S. 115C-437 reads as rewritten: 32
"§ 115C -437. Allocation of revenues to the local school administrative unit by th e 33
county.schools. 34
Revenues accruing to the local school administrative unit schools by virtue of Article IX, 35
Sec. 7, of the Constitution and taxes levied by or on behalf of the a local school administrative 36
unit pursuant to a local act or G.S. 115C-501 to 115C-511 shall be remitted to the school finance 37
officer by the officer having custody thereof within 10 days after the close of the calendar month 38
in which the revenues were received or collected. The clear proceeds of all penalties and 39
forfeitures and of all fines collected for any breach of the penal laws of the State, as referred to 40
in Article IX, Sec. 7 of the Constitution, shall include the full amount of all penalties, forfeitures 41
or fines collected under authority conferred by the State, diminished only by the actual costs of 42
collection, not to exceed ten percent (10%) of the amount collected. Revenues appropriated to 43
the local school administrative unit a local school by the board of county commissioners from 44
general county revenues shall be made available to the school finance officer by such procedures 45
as may be mutually agreeable to the board of education governing body of the local school and 46
the board of county commissioners, but if no such agreement is reached, these funds shall be 47
remitted to the school finance officer by the county finance officer in monthly installments 48
sufficient to meet its lawful expenditures from the county appropriation until the county 49
appropriation to the local school administrative unit is exhausted. Each installment shall be paid 50
not later than 10 days after the close of each calendar month. When revenue has been appropriated 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 29
to the local school administrative unit by the board of county commissioners from funds which 1
carry specific restrictions binding upon the county as recipient, the board of commissioners must 2
inform the local school administrative unit in writing of those restrictions." 3
SECTION 3.12.(g) G.S. 115C-448(d) reads as rewritten: 4
"(d) Special funds of individual schools shall not be included as part of the local current 5
expense fund of a local school administrative unit for the purposes of determining in determining 6
the per pupil share of the local current expense fund transferred amount to be appropriated from 7
the county to a charter school pursuant to G.S. 115C-218.105(c).G.S. 115C-218.105(b3)." 8
SECTION 3.12.(h) G.S. 153A-461 reads as rewritten: 9
"§ 153A-461. Charter schools. 10
(a) Each county shall appropriate to a charter school the average per pupil allocation, as 11
determined by G.S. 115C-430, for each child that resides in the county and attends that charter 12
school. 13
(b) Each county is authorized to appropriate direct capital funds and lease real property 14
to schools chartered under Article 14A of Chapter 115C of the General Statutes. Counti es may 15
provide direct capital funds only for the purposes set forth in G.S. 115C-218.105(b1)." 16
17
ISSUE CAPITAL BONDS 18
SECTION 3.13.(a) Purpose. – It is the intent of the General Assembly by this section 19
to provide, subject to a vote of the qualified voters of the State, for the issuance of four billion 20
dollars ($4,000,000,000) general obligation bonds of the State for the purpose of providing funds, 21
with any other available funds, for public school facilities through grants to counties for public 22
school capital outlay projects, repairs, and renovations. 23
SECTION 3.13.(b) Definitions. – Unless the context otherwise requires, the 24
following definitions apply in this section: 25
(1) Bonds. – Bonds issued under this section. 26
(2) Cost. – Without intending thereby to limit or restrict any proper definition of 27
this term in financing the cost of any capital outlay projects as authorized by 28
this section, any of the following: 29
a. The cost of constructing, reconstructing, enlarging, acquiring, and 30
improving projects and acquiring equipment and land therefor. 31
b. The cost of engineering, architectural, and other consulting services as 32
may be required. 33
c. Administrative expenses and charges, including expenses related to 34
determining compliance with applicable requirements of federal law 35
and expenses relating to issuance. Nothing in this section shall permit 36
use of bond funds to pay salaries or fees for bond administration; such 37
salaries and fees shall come from funds appropriated by the General 38
Assembly. 39
d. Finance charges and interest prior to and during construction and, if 40
deemed advisable by the State Treasurer, for a period not exceeding 41
three years after the estimated date of completion of construction. 42
e. The cost of bond insurance, investment contracts, credit enhancement 43
and liquidity facilities, interest rate swap agreements or other 44
derivative products, financial and legal consultants, and related costs 45
of bond and note issuance, and costs incurred by the State in 46
administering the bond issues, including costs of trus tees, escrow 47
agents, arbitrage rebate liability consultants, securities disclosure 48
counsel or similar securities disclosure consultants, tax consultants 49
and financial advisors, to the extent and as determined by the State 50
Treasurer. 51
General Assembly Of North Carolina Session 2025
Page 30 House Bill 1017-First Edition
f. The cost of reimbursing the State for any payments made for any cost 1
described in this subdivision. 2
g. Any other costs and expenses necessary or incidental to the purposes 3
of this subdivision. 4
Allocations in this section of proceeds of bonds to the costs of a project or 5
undertaking in each case may include allocations to pay the costs set forth in 6
sub-subdivisions c. through g. of this subdivision in connection with the 7
issuance of bonds for the project or undertaking. 8
(3) Credit facility agreement. – An agreement entered into by the State Treasurer 9
on behalf of the State with a bank, savings and loan association, or other 10
banking institution; an insurance company, reinsurance company, surety 11
company, or other insurance institution; a corporation, investment banking 12
firm, or ot her investment institution; or any financial institution or other 13
similar provider of a credit facility agreement, which provider may be located 14
within or without the United States of America, such agreement providing for 15
prompt payment of all or any part of the principal or purchase price (whether 16
at maturity, presentment or tender for purchase, redemption, or acceleration), 17
redemption premium, if any, and interest on any bonds or notes payable on 18
demand or tender by the owner, in consideration of the State agreeing to repay 19
the provider of the credit facility agreement in accordance with the terms and 20
provisions of such agreement. 21
(4) Notes. – Notes issued under this section. 22
(5) Par formula. – Any provision or formula adopted by the State to provide for 23
the adjustment, from time to time, of the interest rate or rates borne by any 24
bonds or notes, including the following: 25
a. A provision providing for such adjustment so that the purchase price 26
of such bonds or notes in the open market would be as close to par as 27
possible; 28
b. A provision providing for such adjustment based upon a percentage or 29
percentages of a LIBOR rate, a prime rate, or base rate, which 30
percentage or percentages may vary or be applied for different periods 31
of time; or 32
c. Such other provision as the State Treasurer may determine to be 33
consistent with this and will not materially and adversely affect the 34
financial position of the State and the marketing of bonds or notes at a 35
reasonable interest cost to the State. 36
(6) Public school capital outlay project. – A project for any of the following: 37
a. Construction of one or more new public school buildings. 38
b. Renovation of one or more existing public school buildings. 39
c. Construction, acquisition, and installation of technology infrastructure 40
for a public school building. 41
d. Acquisition and installation of equipment or fixtures to ensure 42
building security for a public school building. 43
e. Acquisition and installation of equipment for a public school building 44
that will be used for an instructional or related purpose. 45
f. Purchase of land necessary for construction to commence within 24 46
months of one or more public school buildings. 47
g. Other related capital outlay projects to provide facilities for individual 48
public schools that are used for instructional or related purposes. 49
The term does not include projects for facilities for centralized administration, 50
trailers, relocatable classrooms, or mobile classrooms. 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 31
(7) State. – The State of North Carolina. 1
SECTION 3.13.(c) Authorization of Bonds and Notes. – Subject to a favorable vote 2
of a majority of the qualified voters of the State who vote on the question of issuing bonds for 3
public school capital outlay projects in the election called and held as provided in this sec tion, 4
the State Treasurer is hereby authorized, by and with the consent of the Council of State, to issue 5
and sell, at one time or from time to time, general obligation bonds of the State to be designated 6
"State of North Carolina Education Bonds," with any additional designations as may be 7
determined to indicate the issuance of bonds from time to time, or notes of the State as provided 8
in this section, in an aggregate principal amount not exceeding four billion dollars 9
($4,000,000,000) for the purpose of pr oviding funds, with any other available funds, for the 10
purposes authorized in this section. In determining whether this limit has been reached, the 11
issuance of a note or bond to pay an outstanding note is not considered an issuance. 12
SECTION 3.13.(d) Use of Education Bond and Note Proceeds. – 13
(1) Subject to the provisions of subdivision (2) of this subsection, four billion 14
dollars ($4,000,000,000) of the proceeds of education bonds and notes, 15
including premium thereon, if any, shall be used for the purpose of making 16
grants to counties for paying the cost of public school capital outlay projects, 17
repairs, and renovations. Proceeds of education bonds and notes shall be 18
distributed to public school units as if they were funds in the Needs -Based 19
Public School Capital Fund, except there shall be no matching requirements 20
imposed on the public school units. 21
Any additional monies that may be received by means of a grant or grants 22
from the United States of America or any agency or department thereof or 23
from any other source to aid in financing the cost of public school capital 24
outlay projects authorized by this section may be placed by the State Treasurer 25
in the Education Bonds Fund or in a separate account or fund and shall be 26
disbursed, to the extent permitted by the terms of the grant or grants, without 27
regard to limitations imposed by this section. 28
(2) The State Board of Education shall also require counties to report annually on 29
the impact of funds provided under this section on the property tax rate for 30
that year. These reports shall be public documents and shall be furnished to 31
any citizen upon request. 32
(3) The General Assembly encourages, in projects for which bond proceeds are 33
allocated, consideration by counties and local school administrative units of 34
projects that primarily involve materially improving the energy efficiency of 35
the school facility. 36
SECTION 3.13.(e) Allocation and Tracking of Proceeds. – 37
(1) Education bonds. – The proceeds of education bonds and notes, including 38
premium thereon, if any, except the proceeds of bonds, the issuance of which 39
has been anticipated by bond anticipation notes or the proceeds of refunding 40
bonds or notes, shall be placed by the State Treasurer in a special fund to be 41
designated "Education Bonds Fund," which may include su ch appropriate 42
special accounts therein as may be determined by the State Treasurer and shall 43
be disbursed as provided in this section. Monies in the Education Bonds Fund 44
shall be allocated and expended as provided in this section. 45
Any additional monies that may be received by means of a grant or grants 46
from the United States of America or any agency or department thereof or 47
from any other source for deposit to the Education Bonds Fund may be placed 48
in the Education Bonds Fund or in a separate account or fu nd and shall be 49
disbursed, to the extent permitted by the terms of the grant or grants, without 50
regard to any limitations imposed by this section. 51
General Assembly Of North Carolina Session 2025
Page 32 House Bill 1017-First Edition
Monies in the Education Bonds Fund or any separate account established 1
under this section may be invested from time to time by the State Treasurer in 2
the same manner permitted for investment of monies belonging to the State or 3
held in the State treasury, except with respect to grant money to the extent 4
otherwise directed by the terms of the grant. Investment earn ings, except 5
investment earnings with respect to grant monies to the extent otherwise 6
directed or restricted by the terms of the grant, may be (i) credited to the 7
Education Bonds Fund or (ii) used to satisfy compliance with applicable 8
requirements of the federal tax law. 9
The proceeds of education bonds and notes, including premium thereon, 10
if any, may be used with any other monies made available by the General 11
Assembly for funding the projects authorized by this section, including the 12
proceeds of any other State bond issues, whether heretofore made available or 13
that may be made available at the session of the General Assembly at which 14
this section is ratified or any subsequent sessions. The proceeds of education 15
bonds and notes, including premium thereon, if any, shall be expended and 16
disbursed under the direction and supervision of the Director of the Budget. 17
The funds provided by this section shall be disbursed for the purposes 18
provided in this section upon warrants drawn on the State Treasurer by the 19
State Controller, which warrants shall not be drawn until requisition has been 20
approved by the Director of the Budget and which requisition shall be 21
approved only after full compliance with the State Budget Act, Chapter 143C 22
of the General Statutes. 23
(2) Tracking of bond proceeds. – The State Treasurer or the State Treasurer's 24
designee is hereby authorized and directed to set up a comprehensive system 25
of tracking the proceeds of the education bonds and notes, including premium 26
thereon, if any, to the extent neces sary to enable the State Treasurer or the 27
State Treasurer's designee to properly account for the use of such proceeds for 28
compliance with applicable requirements of the federal tax law or otherwise. 29
All recipients of such proceeds shall comply with any tra cking system 30
implemented by the State Treasurer or the State Treasurer's designee for this 31
purpose. The State Treasurer may withhold proceeds if the recipient fails to 32
comply with this subdivision. 33
(3) Costs. – Allocations to the costs of a capital improve ment or undertaking in 34
each case may include allocations to pay the costs set forth in sub-subdivisions 35
(b)(2)c. through (b)(2)g. of this section in connection with the issuance of 36
bonds for that capital improvement or undertaking. 37
SECTION 3.13.(f) Election. – The question of the issuance of the bonds authorized 38
by this section shall be submitted to the qualified voters of the State at the time of the election in 39
2026 when voters of this State are given an opportunity to express their preference for the person 40
to be the presidential candidate of their political party. Any other primary, election, or 41
referendum, validly called or scheduled by law at the time the election on the bond question 42
provided for in this subsection is held, may be held as called or scheduled. Notice of the election 43
shall be given in the manner and at the times required by G.S. 163-33(8). The election and the 44
registration of voters therefor shall be held under and in accordance with the general laws of the 45
State. Absentee ballots shall be authorized in the election. 46
Ballots, voting systems authorized by Article 14A of Chapter 163 of the General 47
Statutes, or both may be used in accordance with rules prescribed by the State Board. The bond 48
question to be used in the ballots or voting systems shall be in substantially the following form: 49
"[ ] FOR [ ] AGAINST 50
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 33
The issuance of four billion dollars ($4,000,000,000) State of North Carolina 1
Education Bonds constituting general obligation bonds of the State secured by a pledge of the 2
faith and credit and taxing power of the State for the purpose of providing funds, with any other 3
available funds, to fund capital improvements, construction of new facilities, and the renovation 4
and rehabilitation of existing facilities for the State's kindergarten th rough grade 12 public 5
education system." 6
If a majority of those voting on a bond question in the election vote in favor of the 7
issuance of the bonds described in the question, those bonds may be issued as provided in this 8
section. If a majority of those voting on the bond question in the election do not vote in favor of 9
the issuance of the bonds described in the question, those bonds shall not be issued. 10
The results of the election shall be canvassed and declared as provided by law for 11
elections for State officers; the results of the election shall be certified by the State Board to the 12
Secretary of State in the manner and at the time provided by the general election laws of the 13
State. 14
SECTION 3.13.(g) Issuance of Bonds and Notes. – 15
(1) Terms and conditions. – Bonds or notes may bear such date or dates, may be 16
serial or term bonds or notes, or any combination thereof, may mature in such 17
amounts and at such time or times, not exceeding 40 years from their date or 18
dates, may be payable at such place or places, either within or without the 19
United States of America, in such coin or currency of the United States of 20
America as at the time of payment is legal tender for payment of public and 21
private debts, may bear interest at such rate or rates, which may vary from 22
time to time, and may be made redeemable before maturity, at the option of 23
the State or otherwise as may be provided by the State, at such price or prices, 24
including a price less than the face amount of the bonds or notes, and under 25
such terms and conditions, all as may be determined by the State Treasurer by 26
and with the consent of the Council of State. 27
(2) Signatures; form and denomination; registration. – Bonds or notes may be 28
issued as certificated or uncertificated obligations. If issued as certificat ed 29
obligations, bonds or notes shall be signed on behalf of the State by the 30
Governor or shall bear the Governor's facsimile signature, shall be signed by 31
the State Treasurer or shall bear the State Treasurer's facsimile signature, and 32
shall bear the Great Seal of the State of North Carolina or a facsimile thereof 33
shall be impressed or imprinted thereon. If bonds or notes bear the facsimile 34
signatures of the Governor and the State Treasurer, the bonds or notes shall 35
also bear a manual signature, which may b e that of a bond registrar, trustee, 36
paying agent, or designated assistant of the State Treasurer. Should any officer 37
whose signature or facsimile signature appears on bonds or notes cease to be 38
such officer before the delivery of the bonds or notes, the s ignature or 39
facsimile signature shall nevertheless have the same validity for all purposes 40
as if the officer had remained in office until delivery, and bonds or notes may 41
bear the facsimile signatures of persons who at the actual time of the execution 42
of the bonds or notes shall be the proper officers to sign any bond or note, 43
although at the date of the bond or note such persons may not have been such 44
officers. The form and denomination of bonds or notes, including the 45
provisions with respect to registrati on of the bonds or notes and any system 46
for their registration, shall be as the State Treasurer may determine in 47
conformity with this section; provided, however, that nothing in this section 48
shall prohibit the State Treasurer from proceeding, with respect to the issuance 49
and form of the bonds or notes, under the provisions of Chapter 159E of the 50
General Assembly Of North Carolina Session 2025
Page 34 House Bill 1017-First Edition
General Statutes, the Registered Public Obligations Act, as well as under this 1
section. 2
(3) Manner of sale; expenses. – Subject to the consent of the Council of State, the 3
State Treasurer shall determine the manner in which bonds or notes shall be 4
offered for sale, whether at public or private sale, whether within or without 5
the United States of America, and whether by publishing notices in certain 6
newspapers and fin ancial journals, mailing notices, inviting bids by 7
correspondence, negotiating contracts of purchase, or otherwise, and the State 8
Treasurer is authorized to sell bonds or notes at one time or from time to time 9
at such rate or rates of interest, which may vary from time to time, and at such 10
price or prices, including a price less than the face amount of the bonds or the 11
notes, as the State Treasurer may determine. All expenses incurred in 12
preparation, sale, and issuance of bonds or notes shall be paid by the State 13
Treasurer from the proceeds of bonds or notes or other available monies. 14
(4) Notes; repayment. – 15
a. Subject to the consent of the Council of State, the State Treasurer is 16
hereby authorized to borrow money and to execute and issue notes of 17
the State for the same, but only in the following circumstances and 18
under the following conditions: 19
1. For anticipating the sale of bonds to the issuance of which the 20
Council of State shall have given consent if the State Treasurer 21
shall deem it advisable to postpone the issuance of the bonds. 22
2. For the payment of interest on or any installment of principal 23
of any bonds then outstanding if there shall not be sufficient 24
funds in the State treasury with which to pay the interest or 25
installment of principal as they respectively become due. 26
3. For the renewal of any loan evidenced by notes herein 27
authorized. 28
4. For the purposes authorized in this section. 29
5. For refunding bonds or notes as herein authorized. 30
b. Funds derived from the sale of bonds or notes may be used in the 31
payment of any bond anticipation notes issued under this section. 32
Funds provided by the General Assembly for the payment of interest 33
on or principal of bonds shall be used in paying the interest on or 34
principal of any notes and any renewals thereof, the proceeds of which 35
shall have been used in paying interest on or principal of the bonds. 36
(5) Refunding bonds and notes. – By and with the consent of the Council of State, 37
the State Treasurer is authorized to issue and sell refunding bonds and notes 38
pursuant to the provisions of the State Refunding Bond Act for the purpose of 39
refunding bonds or notes issued pursuant to this section. The refunding bonds 40
and notes may be combined with any other issues of State bonds and notes 41
similarly secured. 42
(6) Tax exemption. – Bonds and notes shall be exempt from all State, county, and 43
municipal taxation or assessment, direct or indirect, general or special, 44
whether imposed for the purpose of general revenue or otherwise, excluding 45
inheritance and gift taxes, income taxes on the gain from the transfer of bonds 46
and notes, and franchise taxes. The interest on bonds and notes shall not be 47
subject to taxation as to income. 48
(7) Investment eligibility. – Bonds and notes are hereby made securities in which 49
all public officers, a gencies, and public bodies of the State and its political 50
subdivisions; all insurance companies, trust companies, investment 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 35
companies, banks, savings banks, savings and loan associations, credit unions, 1
pension or retirement funds, other financial institu tions engaged in business 2
in the State; executors, administrators, trustees, and other fiduciaries may 3
properly and legally invest funds, including capital in their control or 4
belonging to them. Bonds and notes are hereby made securities that may 5
properly and legally be deposited with and received by any officer or agency 6
of the State or political subdivision of the State for any purpose for which the 7
deposit of bonds, notes, or obligations of the State or any political subdivision 8
of the State is now or may hereafter be authorized by law. 9
(8) Faith and credit. – The faith and credit and taxing power of the State are hereby 10
pledged for the payment of the principal of and the interest on bonds and notes. 11
In addition to the State's right to amend any provision of this section to the 12
extent it does not impair any contractual right of a bond owner, the State 13
expressly reserves the right to amend any provision of this section with respect 14
to the making and repayment of loans, the disposition of any repayments of 15
loans, and any intercept provisions relating to the failure of a local government 16
unit to repay a loan, the bonds not being secured in any respect by loans, any 17
repayments thereof, or any intercept provisions with respect thereto. 18
SECTION 3.13.(h) Variable Interest Rates. – In fixing the details of bonds and notes, 19
the State Treasurer may provide that any of the bonds or notes may: 20
(1) Be made payable from time to time on demand or tender for purchase by the 21
owner thereof, provided a credit facility agreeme nt supports the bonds or 22
notes, unless the State Treasurer specifically determines that a credit facility 23
agreement is not required, upon a finding and determination by the State 24
Treasurer that the absence of a credit facility agreement will not materially or 25
adversely affect the financial position of the State and the marketing of the 26
bonds or notes at a reasonable interest cost to the State; 27
(2) Be additionally supported by a credit facility agreement; 28
(3) Be made subject to redemption or a mandatory tend er for purchase prior to 29
maturity; 30
(4) Bear interest at a rate or rates that may vary for such period or periods of time, 31
all as may be provided in the proceedings providing for the issuance of the 32
bonds or notes, including, without limitation, such variat ions as may be 33
permitted pursuant to a par formula; and 34
(5) Be made the subject of a remarketing agreement whereby an attempt is made 35
to remarket bonds or notes to new purchasers prior to their presentment for 36
payment to the provider of the credit facility agreement or to the State. 37
If the aggregate principal amount repayable by the State under a credit facility 38
agreement is in excess of the aggregate principal amount of bonds or notes secured by the credit 39
facility agreement, whether as a result of the inc lusion in the credit facility agreement of a 40
provision for the payment of interest for a limited period of time or the payment of a redemption 41
premium or for any other reason, then the amount of authorized but unissued bonds or notes 42
during the term of such credit facility agreement shall not be less than the amount of such excess, 43
unless the payment of such excess is otherwise provided for by agreement of the State executed 44
by the State Treasurer. 45
SECTION 3.13.(i) Interpretation of Section. – 46
(1) Additional method. – The foregoing subsections of this section shall be 47
deemed to provide an additional and alternative method for the doing of the 48
things authorized thereby and shall be regarded as supplemental and 49
additional to powers conferred by other laws and shall not be regarded as in 50
derogation of any powers now existing. 51
General Assembly Of North Carolina Session 2025
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(2) Statutory references. – References in this section to specific sections or 1
Chapters of the General Statutes or to specific acts are intended to be 2
references to these sections, Chapter s, or acts as they may be amended from 3
time to time by the General Assembly. 4
(3) Broad construction. – This section, being necessary for the health, welfare, 5
and advancement of the people of the State, shall be broadly construed to 6
affect the purposes thereof. 7
(4) Inconsistent provisions. – Insofar as the provisions of this section are 8
inconsistent with the provisions of any general laws, or parts thereof, the 9
provisions of this section shall be controlling. 10
(5) Severability. – If any provision of this section or the application thereof to any 11
person or circumstance is held invalid, such invalidity shall not affect other 12
provisions or applications of the section that can be given effect without the 13
invalid provision or application and, to this end, the provisions of this section 14
are declared to be severable. 15
SECTION 3.13.(j) Other Agreements. – The State Treasurer may authorize, execute, 16
obtain, or otherwise provide for bond issuance, investment contracts, credit and liquidity 17
facilities, interest rate swap agreements and other derivative products, and any other related 18
instruments and matters the State Treasurer determines to be desirable in connection with the 19
issuance of bonds and notes. 20
SECTION 3.13.(k) Each entity, upon receiving the proceeds of education bonds and 21
notes, including premium thereon, if any, issued pursuant to and for purposes listed in subsection 22
(a) of this section, shall administer, supervise, and ensure that use of the proceeds comports with 23
those purposes. Each local school administra tive unit, along with the corresponding board of 24
county commissioners, shall jointly submit to the State Board of Education a plan for the 25
distribution of the proceeds of education bonds and notes pursuant to this section. After the State 26
Board of Education determines that a local school administrative unit's planned expenditure of 27
part or all of the proceeds is within the purposes provided in this section, the State Board of 28
Education shall make the proceeds to which the plans apply available to the local school 29
administrative unit. Each local school administrative unit receiving the proceeds of education 30
bonds and notes, including premium thereon, if any, issued pursuant to subsection (a) of this 31
section shall report by January 1, 2027, and quarterly thereafter, to the State Board of Education 32
on the projects funded from education general obligation bonds authorized by subsection (a) of 33
this section, and the State Board of Education shall combine the reports and submit them to the 34
Joint Legislative Capital Oversight Committee, the House of Representatives Appropriations 35
Committee, and the Senate Committee on Appropriations/Base Budget. Each report shall include 36
the total project costs, the amount to be funded from the bonds, the expenditures to date from the 37
bonds and other sources, and the percentage of each project completed. 38
SECTION 3.13.(l) Projects funded in whole or in part with the proceeds of education 39
bonds and notes, including premium thereon, if any, issued pursuant to this section, and that 40
portion of funds estimated to be needed for escalation of costs shall remain with the Office of 41
State Budget and Management and shall be disbursed only for the following purposes: 42
(1) To address unforeseen contingencies related to the specific project for which 43
the funds were made available. 44
(2) To address inflation costs related to that specific project. 45
SECTION 3.13.(m) Any funds retained by the Office of State Budget and 46
Management pursuant to subsection (l) of this section at the time a project is completed shall be 47
retained by the Office of State Budget and Management. The Office of State Budget and 48
Management shall report on any funds retained pursuant to this subsection within 90 days of a 49
project's completion. 50
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 37
SECTION 3.13.(n) Any funds from the Educati on Bond expended for school 1
technology for public schools shall be reported to the State Board of Education and shall be 2
credited against the judgment in N.C. Sch. Bds. Ass'n. v. Moore, No. 98-CVS-14159 (N.C. Super. 3
Ct.). 4
5
DISADVANTAGED STUDENT SUPPLEMENTA L FUNDING (DSSF)/AT -RISK 6
STUDENT SERVICES/ALTERNATIVE SCHOOLS 7
SECTION 3.14.(a) Beginning with the 2026 -2027 fiscal year, the State Board of 8
Education shall transfer the At -Risk Student Services/Alternative Schools allotment into the 9
DSSF allotment, as established by G.S. 115C-472.24. The State Board of Education shall allocate 10
these funds to local school administrative units under a formula that provides that no local school 11
administrative unit receives a decrease in combined funding. Reallocated at-risk funding must be 12
counted as an independent supplement to existing DSSF funds. 13
SECTION 3.14.(b) G.S. 115C-472.24 reads as rewritten: 14
"§ 115C-472.24. Disadvantaged Disadvantaged/at-risk student supplemental funding. 15
(a) To the extent funds are made available for this purpose, funds appropriated for 16
disadvantaged or at-risk student supplemental funding shall be used, consistent with the policies 17
and procedures adopted by the State Board of Education, only to do the following: 18
(1) Provide instructional positions or instructional support positions. 19
(2) Provide professional development. 20
(3) Provide intensive in-school or after-school remediation, or both. 21
(4) Purchase diagnostic software and progress-monitoring tools. 22
(5) Provide funds for teacher bonuses and supplements. The State Board of 23
Education shall set a maximum percentage of the funds that may be used for 24
this purpose. 25
(6) Provide funds for alternative learning and at -risk student programs in 26
accordance with G.S. 115C-12(24). 27
The State Board of Education may require local school administrative units receiving funding 28
under the Disadvantaged Student Supplemental Fund to purchase the Education Value -Added 29
Assessment System (EVAAS) in order to provide in -depth analysis of student performance and 30
help identify strategies for improving student achievement. This data shall be used exclusively 31
for instructional and curriculum decisions made in the best interest of children and for 32
professional development for their teachers and administrators. 33
…." 34
SECTION 3.14.(c) There is appropriated from the General Fund to the Department 35
of Public Instruction the sum of nine hundred forty -four million three hundred thousand dollars 36
($944,300,000) in recurring funds for the 2026 -2027 fiscal year to implement the provisions of 37
this section. 38
39
INCREASE FUNDING FOR CLASSROOM SUPPLIES 40
SECTION 3.15. There is appropriated from the General Fund to the Department of 41
Public Instruction the sum of ninety -six million seven hundred thousand dollars ($96, 700,000) 42
in recurring funds for the 2026-2027 fiscal year to increase the Classroom Materials/Instructional 43
Supplies/Equipment Allotment. 44
45
DEPARTMENT OF PUBLIC INSTRUCTION TO STUDY WEIGHTED STUDENT 46
FUNDING MODEL 47
SECTION 3.16.(a) The Department of Public I nstruction shall study methods of 48
implementing a weighted student funding formula that retains existing guaranteed position 49
allotments. The Department may contract with a third party to conduct this study. The 50
General Assembly Of North Carolina Session 2025
Page 38 House Bill 1017-First Edition
Department shall report the Department's recom mendations to implement such a model to the 1
Joint Legislative Education Oversight Committee by March 15, 2027. 2
SECTION 3.16.(b) There is appropriated from the General Fund to the Department 3
of Public Instruction the sum of five hundred thousand dollars ($500,000) in nonrecurring funds 4
for the 2026-2027 fiscal year to perform the study required by this section. 5
6
PART IV. ASSESSMENT AND ACCOUNTABILITY S YSTEM THAT RELIABLY 7
ASSESSES MULTIPLE MEASURES OF STUDENT PERFORMANCE 8
9
ADJUST WEIGHTING BETWEEN PROFICIENCY AND GROWTH 10
SECTION 4.1.(a) G.S. 115C-83.15(d) reads as rewritten: 11
"(d) Calculation of the Overall School Performance Scores and Grades. – The State Board 12
of Education shall calculate the overall school performance score by adding the school 13
achievement score, as provided in subsection (b) of this section, and the school growth score, as 14
determined using EVAAS as provided in subsection (c) of this section, earned by a school. The 15
school achievement score shall account for eighty fifty-one percent (80%), (51%), and the school 16
growth score shall account for twenty forty-nine percent (20%) (49%) of the total sum. For all 17
schools, the total school performance score shall be converted to a 100 -point scale and used to 18
determine an overall school performance grade. The overall school performance grade shall be 19
based on the following scale and shall not be modified to add any other designation related to 20
other performance measures, such as a "plus" or "minus": 21
…." 22
SECTION 4.1.(b) The Department of Public Instruction shall amend the State plan 23
under the Elementary and Secondary Education Act of 1965, as amended by the Every Student 24
Succeeds Act, to reflect the changes to achievement and growth score weighting in this section. 25
SECTION 4.1.(c) This section applie s beginning with school performance scores 26
issued based on data from the 2026-2027 school year. 27
28
STUDY ON ADDITIONAL MEASURES IN THE SCHOOL ACCOUNTABILITY 29
SYSTEM 30
SECTION 4.2. The State Board of Education, in consultation with the Department 31
of Public Inst ruction, shall study methods of adding to the State school accountability system 32
indicators that provide information on the opportunity of students to access a sound basic 33
education. Additional indicators recommended shall not be inconsistent with the requirements of 34
the Elementary and Secondary Education Act of 1965, as amended by the Every Student 35
Succeeds Act, and shall not replace indicators included in the State school accountability system 36
under Part 1B of Article 8 of Chapter 115C of the General Statutes. The State Board of Education 37
shall submit a report with its recommended changes regarding the school accountability system 38
to the Joint Legislative Education Oversight Committee on or before June 15, 2027. 39
40
PART V. ASSISTANCE A ND TURNAROUND FUNCTI ON THAT PROVIDES 41
NECESSARY SUPPORT TO LOW-PERFORMING SCHO OLS AND 42
LOW-PERFORMING LOCAL SCHOOL ADMINISTRATIVE UNITS 43
44
DISTRICT AND REGIONAL SUPPORT MODEL 45
SECTION 5.1. There is appropriated from the General Fund to the Department of 46
Public Instruction the sum of nineteen million dollars ($19,000,000) in recurring funds for the 47
2026-2027 fiscal year to be used to continue to implement the District and Regional Support 48
model developed by the State Board of Education to support the improvement of low-performing 49
and high-poverty schools. Implementation shall (i) provide support in needed content areas and 50
instructional and leadership coaching and (ii) include direct, compre hensive, and progressive 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 39
turnaround assistance to the State's chronically low -performing schools and low -performing 1
districts. 2
3
REVIEW AND UPDATE CURRICULUM ADOPTION PROCESSES 4
SECTION 5.2.(a) Before March 15, 2027, the State Board of Education shall review, 5
update, and strengthen the State -level process for reviewing and adopting core curriculum 6
resources. The State Board of Education shall provide statewide and regional support, resources, 7
and professional learning opportunities to assist schools and districts in selecting and successfully 8
employing high-quality, standards-aligned, culturally responsive, evidence-based resources and 9
practices to assist educators in applying innovative practices that promote continuous 10
improvement. No later than June 30, 2027, the Department of Public Instruction shall provide a 11
model implementation plan to each local school administrative unit. 12
SECTION 5.2.(b) There is appropriated from the General Fund to the Department 13
of Public Instruction the sum of two hundred fifty t housand dollars ($250,000) in nonrecurring 14
funds for the 2026-2027 fiscal year to implement the provisions of this section. 15
16
SUPPORT FOR HIGH-POVERTY SCHOOLS 17
SECTION 5.3.(a) Article 13 of Chapter 115C of the General Statutes is amended by 18
adding a new section to read: 19
"§ 115C-209.2. Community schools support program. 20
(a) Program Established. – The Department of Public Instruction shall establish a 21
program (Program) to provide support to high -poverty schools that adopt a community school 22
model or other evidence-based models to address out-of-school barriers to learning. 23
(b) Definitions. – The following definitions shall apply in this section: 24
(1) Community school model. – The model following the Department of Public 25
Instruction's Whole School, Whole Community, Whole Child model based on 26
the Centers for Disease Control and Prevention's guidance. 27
(2) Evidence-based model. – Any model established using evidence -based 28
methods that, in the discretion of the State Board of Education, achieve the 29
goals set in the Whole School, Whole Community, Whole Child model. 30
(c) Participation. – The Department of Public Instruction shall disseminate an application 31
form for participation in the Program for the following school year no later than June 1 of each 32
year. No later than July 1, any school that uses a community school model or other 33
evidence-based model to address out -of-school barriers to learning may apply to participate in 34
the Program. No later than August 1 of each school year that funds are made available for th is 35
purpose, the Department of Public Instruction shall select geographically and culturally diverse 36
schools from among the applicants for that school year to participate in the Program. Priority 37
shall be given to schools that have high rates of student poverty. 38
(d) Implementation. – Each participating local school administrative unit shall hire one 39
full-time school-based coordinator per participating school. The school -based coordinator shall 40
assess local needs and assets and organize the integration of social, academic, and health supports 41
in coordination with school support personnel. The school-based coordinator shall also assess the 42
school's access to technical assistance and professional support to effectively plan and implement 43
the community school model or other evidence-based model. No later than July 15 of each school 44
year that a school participates in the Program, the school -based coordinator shall submit to the 45
Department of Public Instruction a request for funds for goods or services beneficial to meeting 46
the goals of the community school model or other evidence-based model for the following school 47
year. No later than August 15 of each school year, the Department of Public Instruction shall 48
evaluate each funding request and allocate funds as it deems necessary. 49
General Assembly Of North Carolina Session 2025
Page 40 House Bill 1017-First Edition
(e) Report. – No later than October 15 of each school year, the Department of Public 1
Instruction, in consultation with each school-based coordinator, shall provide a report to the Joint 2
Legislative Education Oversight Committee on the following: 3
(1) The amount of funds requested by each school. 4
(2) The purposes of funds requested by each school. 5
(3) The amount of funds allocated to each school. 6
(4) The use of funds allocated to each school. 7
(5) Any effects of the model on school outcomes, i ncluding attendance rates, 8
academic outcomes, or any other measure the school-based coordinator or the 9
Department deems relevant. 10
(6) Any other information the Department deems relevant." 11
SECTION 5.3.(b) Appropriation. – There is appropriated from the General Fund to 12
the Department of Public Instruction the sum of sixty-five million five hundred thirteen thousand 13
six hundred twenty-one dollars ($65,513,621) in recurring funds for the 2026-2027 fiscal year to 14
implement the Program established by this section. 15
SECTION 5.3.(c) This section applies beginning with the 2026-2027 school year. 16
17
SCHOOL MEAL DEBT REPORT 18
SECTION 5.4. Part 2 of Article 17 of Chapter 115C of the General Statutes is 19
amended by adding a new section to read: 20
"§ 115C-264.6. School meal debt report. 21
No later than October 15 of each year, the State Board of Education shall report to the Joint 22
Legislative Education Oversight Committee on unpaid meal charges in local school 23
administrative units. At a minimum, the report shall include the following information: 24
(1) The percentage of students in each grade level in each local school 25
administrative unit who carry unpaid meal debt. 26
(2) The total amount of funds received by each local school administrative unit 27
related to unpaid meal charges. 28
(3) Summaries of approaches adopted by each local school administrative unit 29
regarding unpaid meal charges. 30
(4) Options for a statewide policy on the uniform administration of unpaid meal 31
charges in local school administrative units." 32
33
CEP MEAL PROGRAM INCENTIVE 34
SECTION 5.5.(a) Part 2 of Article 17 of Chapter 115C of the General Statutes is 35
amended by adding a new section to read: 36
"§ 115C-264.15. CEP meal program supplement. 37
(a) Any public school unit or school within a public school unit that is operating a school 38
nutrition program that is eligible for the federal Community Eligibility Provision (CEP) program 39
shall participate in the CEP program to increase the number of students with access to healthy, 40
cost-free school breakfast and lunch. Schools participating in the CEP program shall have an 41
innovative breakfast option available where students have access to breakfast and are allowed to 42
consume breakfast in the classroom. 43
(b) To the extent funds are made available for the purpose, the Department of Public 44
Instruction shall issue State reimbursements to participating public school units and schools to 45
supplement federal reimbursements of school meals. State reimbursement shall e qual the 46
difference between the federal free rate and the federal paid rate for the number of meals served 47
at the participating schools equal to a 0.2 multiplier of the Identified School Percentage (ISP) for 48
the participating schools. State and federal reimbursements shall not exceed one hundred percent 49
(100%) of the federal free rate of meals served. If funds provided for the purpose are insufficient, 50
the Department shall distribute available funds pro rata on the basis of average daily membership. 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 41
(c) No later than January 1 of each year, the Department shall report to the Joint 1
Legislative Education Oversight Committee at least the following information: 2
(1) The number of schools participating in the CE P program and the number of 3
students served by use of the program. 4
(2) The amount of federal and State money participating public school units and 5
schools received. 6
(3) Any noted changes in student performance due to the increased availability of 7
nutrition services." 8
SECTION 5.5.(b) There is appropriated from the General Fund to the Department 9
of Public Instruction the sum of ninety-two million five hundred thousand dollars ($92,500,000) 10
in recurring funds for the 2026 -2027 fiscal year for the Department to provide State 11
reimbursements to schools participating in the CEP program pursuant to G.S. 115C-264.15, as 12
enacted by this act. 13
SECTION 5.5.(c) This section becomes effective July 1, 2026, and applies 14
beginning with the 2026-2027 school year. 15
16
PART VI. SYSTEM OF EARLY EDUC ATION THAT PROVIDES ACCESS TO 17
HIGH-QUALITY PREKIND ERGARTEN AND OTHER E ARLY CHILDHOOD 18
LEARNING OPPORTUNITIES 19
20
EXPAND NC PREKINDERGARTEN (NC PRE-K) PROGRAM 21
SECTION 6.1.(a) Appropriation. – There is appropriated from the General Fund to 22
the Department of Health and Human Services, Division of Child Development and Early 23
Education, the sum of three hundred thirty -three million four hundred thousand dollars 24
($333,400,000) in recurring funds for the 2026-2027 fiscal year for the purpose of expanding the 25
NC Prekindergarten (NC Pre -K) program for eligible children who are 4 years of age by 26
allocating funds for each of the following: 27
(1) Incrementally increase State funding for each NC Pre-K slot with the goal of 28
paying one hundred percent (100%) of the actual cost by the end of the 29
2027-2028 fiscal year. 30
(2) Gradually increase the number of eligible children able to be served in the NC 31
Pre-K program with the goal of reaching at least seventy -five percent (75%) 32
of eligible children in each county by the end of the 2027-2028 fiscal year. 33
(3) Raise the rate for the county administrator to provide oversight, monitoring, 34
enrollment, and support to ten percent (10%) by the end of the 2026 -2027 35
fiscal year. 36
(4) Phase extension of the NC Pre -K program yea r from 10 to 12 months in 37
accordance with subsection (b) of this section. 38
SECTION 6.1.(b) Extend NC Pre-K Program Year to 12 Months. – Section 9D.1 of 39
S.L. 2023-134 is amended by adding a new subsection to read: 40
"SECTION 9D.1.(h) Extend NC Pre -K Program Year. – It is the intent of the General 41
Assembly to gradually extend the NC Pre -K program to cover 12 months of the program year 42
with full implementation statewide by the end of the 2027 -2028 fiscal year. To that end, the 43
Division of Child Development and Early Education (Division) shall develop and implement a 44
plan that (i) includes establishing a pilot program to extend the NC Pre-K program year from 10 45
to 12 months and (ii) is based on county capacity to implement the extension. The Division shall 46
select up to three counties to participate in the pilot program that includes , at a minimum, 47
representation from a private classroom setting, a public classroom setting that operates on a 48
year-round basis, and an underserved area. The Division shall submit a report to the Joint 49
Legislative Oversight Committee on Health and Human Services and the Fiscal Research 50
Division by December 31, 2027. The report shall include each of the following: 51
General Assembly Of North Carolina Session 2025
Page 42 House Bill 1017-First Edition
(1) The number of students participating in the pilot program. 1
(2) The number of students participating who are in an NC Pre-K classroom in a 2
child care center versus those in an NC Pre-K classroom in a public school. 3
(3) The number of schools and child care centers participating in the program , 4
including identifying those that are private and those that are public. 5
(4) The number of NC Pre-K classrooms participating in the program. 6
(5) The additional costs needed to implement the program. 7
(6) The challenges and successes of implementing the program in both NC Pre-K 8
classrooms in child care centers and NC Pre-K classrooms in public schools." 9
SECTION 6.1.(c) There is appropriated from the General Fund to the Department 10
of Health and Human Services, Division of Child Development and Early Education (Division), 11
the sum of three hundred thousand dollars ($300,000) in recurring funds for the 2026-2027 fiscal 12
year to increase State-level NC Pre-K staffing to manage the planned expansion of the NC Pre-K 13
program, provide policy development and program oversight, ensure program quality, and 14
manage any new, required studies. 15
SECTION 6.1.(d) There is appropriated from the General Fund to the Department 16
of Health and Human Services, Division of Child Development and Early Education (Division), 17
the sum of forty -eight million four hundred thousand dollars ($48,400,000) in recurring funds 18
for the 2026-2027 fiscal year to provide transportation to all participants enrolled in the NC Pre-K 19
program. 20
21
INCREASE HIGH -QUALITY EARLY LEARNING OPPORTUNITIES FOR 22
CHILDREN FROM BIRTH/INCREASE FUNDS FOR CHILD CARE SUBSIDY 23
SECTION 6.2.(a) There is appropriated from the General Fund to the Department 24
of Health and Human Services, Division of Child Development and Early Education (Division), 25
the sum of ten million dollars ($10,000,000) in recurring funds for the 2026 -2027 fiscal year to 26
increase funds for the child care subsidy program and provide for program improvements, 27
including, but not limited to, increasing compensation for the child care workforce and ensuring 28
that eligible families receive assistance through the elimination of waitlists. 29
SECTION 6.2.(b) There is appropriated from the General Fund to the Department 30
of Health and Human Services, Division of Child Development and Early Education (Division), 31
the sum of seventy -eight million seven hundred thousand dollars ($78,700,000) i n recurring 32
funds for the 2026-2027 fiscal year to expand the Family Connects universal home visiting model 33
to local agencies statewide that choose to implement the program for their community through 34
local health departments or local Smart Start partnerships. Family Connects is an evidence-based 35
model that provides one to three home visits from a registered nurse to all families who have 36
newborns and live in a defined service area. 37
SECTION 6.2.(c) There is appropriated from the General Fund to the Departm ent 38
of Health and Human Services, Division of Child Development and Early Education (Division), 39
the sum of forty million dollars ($40,000,000) in recurring funds for the 2026-2027 fiscal year to 40
conduct a pilot program of a State model for high -quality early learning programs for eligible 41
children from birth to 3 years of age, for 1,000 children each year, with the intent to expand the 42
program to additional locations. The pilot program and any subsequent expansion of the pilot 43
program shall focus on high-poverty school districts across the State. 44
45
EXPAND AND IMPROVE ACCESS TO INDIVIDUALIZED EARLY INTERVENTION 46
SERVICES FOR ELIGIBLE CHILDREN/NC INFANT-TODDLER PROGRAM 47
SECTION 6.3.(a) Funds for NC Infant -Toddler Program. – There is appropriated 48
from the General Fund to the Department of Health and Human Services, Division of Child and 49
Family Well-Being, Early Intervention Section, the sum of twenty million dollars ($20,000,000) 50
in recurring funds for the 2026 -2027 fiscal year to provide funds for the North Carol ina 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 43
Infant-Toddler Program, a program that provides support and services for families and their 1
children, from birth to 3 years of age, who have special needs. These funds shall be used to take 2
steps toward doing the following: 3
(1) Increasing State and local staffing in the provision of services to families with 4
infants and toddlers with developmental delays and established medical 5
conditions who are eligible for the NC Infant-Toddler Program. 6
(2) Expanding funding for interpreter services. 7
(3) Establishing a centralized provider network system. 8
(4) Providing professional development focused on early childhood mental 9
health. 10
(5) Addressing salary inequities affecting provider retention and recruitment. 11
SECTION 6.3.(b) Feasibility Study & Infrastructure Read iness 12
Assessment/Expansion of NC Infant-Toddler Program. – There is appropriated from the General 13
Fund to the Department of Health and Human Services, Division of Child and Family 14
Well-Being, Early Intervention Section, the sum of two hundred fifty thousan d dollars 15
($250,000) in nonrecurring funds for the 2026-2027 fiscal year to be allocated as follows: 16
(1) One hundred fifty thousand dollars ($150,000) to conduct a feasibility study 17
to examine eligibility criteria and cost implications for expansion of the NC 18
Infant-Toddler Program. 19
(2) One hundred thousand dollars ($100,000) to conduct a system and 20
infrastructure readiness assessment to determine areas of need and system 21
challenges that need to be addressed before expanding the NC Infant-Toddler 22
Program. The Division of Public Health shall solicit public input and feedback 23
on the plan developed pursuant to this subdivision. 24
SECTION 6.3.(c) Scale Up Early Intervention Services. – There is appropriated 25
from the General Fund to the Department of Health and Human Services, Division of Child and 26
Family Well-Being, Early Intervention Section, the sum of one hundred sixty -two million five 27
hundred thousand dollars ($162,500,000) in recurring funds for the 2026 -2027 fiscal year to 28
provide high -quality early interven tion services and supports for up to an additional 30,000 29
children from birth to 3 years of age, who meet expanded eligibility criteria for the Infant and 30
Toddler Program implemented as a result of the feasibility study conducted pursuant to 31
subdivision (b)(1) of this section. The Early Intervention Section may use up to five percent (5%) 32
of these allocated funds to conduct a public awareness campaign regarding expansion of 33
eligibility for the NC Infant and Toddler Program, to increase efforts to identify children eligible 34
to receive services under this expanded program, and to create partnerships with family support 35
agencies. 36
37
INCREASE SMART START FUNDING 38
SECTION 6.4. There is appropriated from the General Fund to the Department of 39
Health and Human Service s, Division of Child Development and Early Education, the sum of 40
four hundred nineteen million six hundred thousand dollars ($419,600,000) in recurring funds 41
for the 2026 -2027 fiscal year to gradually increase funding for the North Carolina Partnership 42
for Children, Inc., (Smart Start), with the goal of fully funding Smart Start by the end of the 43
2027-2028 fiscal year. Funds allocated to the North Carolina Partnership for Children, Inc., 44
pursuant to this section, shall be distributed to Smart Start local partnerships to improve statewide 45
early child system infrastructure and support a cohesive continuum of services for families and 46
children from birth through 5 years of age. 47
48
INCREASE EARLY CHILDHOOD EDUCATOR WORKFORCE 49
SECTION 6.5.(a) Funds for WAGE$ and AW ARD$ Programs. – There is 50
appropriated from the General Fund to the Department of Health and Human Services, Division 51
General Assembly Of North Carolina Session 2025
Page 44 House Bill 1017-First Edition
of Child Development and Early Education, the sum of thirty-two million dollars ($32,000,000) 1
in recurring funds for the 2026-2027 fiscal year to increase funding for and expand participation 2
statewide in the Child Care WAGE$ program and the Infant -Toddler Educator AWARD$ 3
program, both of which provide salary supplements for early childhood educators. 4
SECTION 6.5.(b) Recruitment Strategies and Professional Development. – There is 5
appropriated from the General Fund to the Department of Health and Human Services, Division 6
of Child Development and Early Education, the sum of seven million three hundred thousand 7
dollars ($7,300,000) in recurring funds for the 2026-2027 fiscal year to implement strategies to 8
recruit early childhood educators and provide ongoing professional development, including 9
coaching, technical assistance, assistance with degree attainment, and licensure support. 10
11
FACILITATE RELIABLE ACCESS TO HIGH -QUALITY DATA SUPPORTING 12
EARLY CHILDHOOD EDUCATION 13
SECTION 6.6.(a) Real-Time Workforce Data System. – There is appropriated from 14
the General Fund to the Department of Health and Human Services, Division of Child 15
Development and Earl y Education, the sum of five hundred thousand dollars ($500,000) in 16
recurring funds for the 2026 -2027 fiscal year to develop and implement a real -time workforce 17
data system that supports building a pipeline of early childhood educators. 18
SECTION 6.6.(b) Expand and Improve Current Early Childhood Data Systems. – 19
There is appropriated from the General Fund to the Department of Health and Human Services, 20
Division of Child Development and Early Education (Division), the sum of five hundred 21
thousand dollars ($50 0,000) in recurring funds for the 2026 -2027 fiscal year to expand and 22
improve the North Carolina Early Childhood Integrated Data System (NC ECIDS) and the North 23
Carolina Early Childhood Action plan data dashboards to track child outcomes and provide 24
access to State data for State and local users and researchers with the goal of connecting this data 25
to the NC Longitudinal Data System (NCLDS). 26
SECTION 6.6.(c) Build Local Capacity/Early Childhood Data. – There is 27
appropriated from the General Fund to the Department of Health and Human Services 28
(Department), Division of Child Development and Early Education (Division), the sum of one 29
hundred fifty thousand doll ars ($150,000) in recurring funds for the 2026 -2027 fiscal year to 30
collaborate with the Divisions of Social Services and Public Health, as appropriate, in developing 31
and implementing a plan to provide technical assistance to build local capacity to use qua lity 32
early childhood data across child health, child welfare, and early childhood education for local 33
planning. 34
SECTION 6.6.(d) Real-Time Data Collection/Children Eligible for Early Childhood 35
Services. – There is appropriated from the General Fund to the Department of Health and Human 36
Services, Division of Child Development and Early Education, the sum of five hundred thousand 37
dollars ($500,000) in nonrecurring funds for the 2026 -2027 fiscal year and the sum of two 38
hundred fifty thousand dollars ($250,000) in recurring funds for the 2026 -2027 fiscal year to 39
develop and implement a real -time data collection and sharing process to identify children 40
eligible for early childhood programs, including the North Carolina Prekindergarten (NC Pre-K) 41
program and Early Intervention program, that allows for each of the following: 42
(1) The disaggregation along multiple variables, such as race, ethnicity, and 43
geography. 44
(2) The identification of the children most vulnerable to build a more equitable 45
early learning system. 46
47
PREKINDERGARTEN TO KINDERGARTEN TRANSITIONS 48
SECTION 6.7. There is appropriated from the General Fund to the Department of 49
Health and Human Services, Division of Child Development and Early Education (Division), the 50
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 45
sum of five million dollars ($5,000,000) in recurring funds for the 2026 -2027 fiscal year to 1
incrementally scale up the Pre-K to K Transitions program to serve all districts. 2
3
COLLABORATIVE FAMILY ENGAGEMENT PLANS 4
SECTION 6.8. There is appropriated from the General Fund to the Department of 5
Health and Human Services, Division of Child Development and Early Education (Division), the 6
sum of three hundred twenty thousand dollars ($320,000) in recurring funds for the 2026 -2027 7
fiscal year to provide ongoing support and technical assistance for estab lishing local 8
collaborative family engagement plans for birth through third grade. 9
10
REQUIRE LICENSURE FOR NC PRE-K LEAD TEACHERS 11
SECTION 6.9. By July 1, 2027, the Department of Health and Human Services, 12
Division of Child Development and Early Education, shall implement a policy to require that all 13
NC Prekindergarten (NC Pre -K) lead teachers hold an appropriate State teaching license as 14
specified by NC Pre-K policy. The policy shall also require that NC Pre-K lead teachers be paid 15
according to the State public school salary schedule by the 2027-2028 fiscal year. 16
17
PART VII. ALIGNMENT OF HIGH SCHOOL TO POSTSECONDARY AND CAREER 18
EXPECTATIONS FOR ALL STUDENTS 19
20
REVISE NCVPS FUNDING 21
SECTION 7.1. There is appropriated from the General Fund to the Department of 22
Public Instruction the sum of sixteen million seven hundred thousand dollars ($16,700,000) in 23
nonrecurring funds for the 2026-2027 fiscal year to offset the costs for local administrative units 24
and charter schools to remove barriers to student participation i n North Carolina Virtual Public 25
Schools. The funds shall be allocated with a priority to cover the costs of courses for students 26
enrolled in public schools located in low-wealth counties. 27
28
SCHOOL CALENDAR FLEXIBILITY/CC CALENDAR 29
SECTION 7.2.(a) G.S. 115C-84.2(d) reads as rewritten: 30
"(d) Opening and Closing Dates. – Local boards of education shall determine the dates of 31
opening and closing the public schools under subdivision (a)(1) of this section. Except for 32
year-round schools, the opening date for students shall be no earlier than the Monday closest to 33
August 26, and the closing date for students shall be no later than the Friday closest to June 11. 34
On a showing of good cause, the State Board of Education may waive the requirement that the 35
opening date for students be no earlier than the Monday closest to August 26 and may allow the 36
local board of education to set an opening date no earlier than the Monday closest to August 19, 37
to the extent that school calendars are able to provide sufficient days to accommodate anticipated 38
makeup days due to school closings. A local board may revise the scheduled closing date if 39
necessary in order to comply with the minimum requirements for instructional days or 40
instructional time. For purposes of this subsection, the ter m "good cause" means that schools in 41
any local school administrative unit in a county have been closed eight days per year during any 42
four of the last 10 years because of severe weather conditions, energy shortages, power failures, 43
or other emergency situations. 44
The required opening and closing dates under this subsection shall not apply to any school 45
that a local board designated as having a modified calendar for the 2003 -2004 school year or to 46
any school that was part of a planned program in the 2003 -2004 school year for a system of 47
modified calendar schools, so long as the school operates under a modified calendar. 48
Notwithstanding the required opening and closing dates under this subsection, a local board 49
of education may align the calendar of schools in the local school administrative unit with the 50
calendar of a community college serving the city or county in which the unit is located." 51
General Assembly Of North Carolina Session 2025
Page 46 House Bill 1017-First Edition
SECTION 7.2.(b) This section is effective when it becomes law and applies 1
beginning with the 2026-2027 school year. 2
3
COLLEGE ADVISING CORPS/COLLEGE ADVISERS IN THE PUBLIC SCHOOLS 4
SECTION 7.3.(a) Purpose of the College Advising Corps Program. – From the funds 5
appropriated in subsection (b) of this section, the Board of Governors of The University of North 6
Carolina shall make funds available to the National College Advising Corps, Inc., (CAC) to 7
support an expansion of the placement of college advisers in North Carolina public schools 8
through their program over a three -year period. CAC is a college access nonprofit organiz ation 9
with the mission to increase the number of underrepresented, low -income, or first -generation 10
postsecondary degree or certificate students entering and completing their postsecondary 11
education at community colleges and universities. In furthering this mission, CAC operates an 12
innovative model of partnering with schools, communities, families, and postsecondary 13
institutions, including providing for a two -year service opportunity to recent college graduates 14
as near -peer college advisers working full time in the public schools, with an emphasis on 15
engaging college advisers who have similar backgrounds to the students the program seeks to 16
serve. Near -peer college advisers perform various services for those students that are key 17
components to the proven success of the program, including (i) attending postsecondary campus 18
visits, fairs, and workshops with students, (ii) assisting with registering for college entrance 19
exams, (iii) assisting with Free Application for Federal Student Aid (FAFSA) registrations and 20
completions, (iv) identifying available scholarships, (v) assisting with postsecondary 21
applications, and (vi) engaging with parents. 22
SECTION 7.3.(b) Funds for the Program. – Due to the effectiveness of the 23
innovative model operated by CAC and the potential for significantly impacting the highest-need 24
students as described in subsection (a) of this section, the sum of three million dollars 25
($3,000,000) in recurring funds is appropriated from the General Fund to the Board of Governors 26
of The University of North Carolina for the 2026-2027 fiscal year to be provided to CAC for the 27
purpose of expanding the placement of college advisers in accordance with the requirements of 28
this section. 29
SECTION 7.3.(c) Use of Funds. – CAC shall focus the first two years of th e 30
expansion of its program using the funds provided to it under this section by placing college 31
advisers in counties designated as tier one and tier two. For the third year of the expansion, CAC 32
shall use the funds provided to it to place college advisers in the remaining counties designated 33
as tier three in order to achieve placement of college advisers in all 100 counties of the State. In 34
addition, CAC shall select at least three additional postsecondary institutions to partner with in 35
order to increase the number of recent graduates working as near -peer college advisers to meet 36
the needs of the program expansion. Once CAC has reached the goal of placement of college 37
advisers in 100 counties, the funds provided to it for the program shall be used to contin ue the 38
mission of the program to increase access for North Carolina public school students to 39
postsecondary degree or certificate attainment at community colleges and universities. 40
SECTION 7.3.(d) Reporting Requirements. – CAC shall submit a report by Jun e 1 41
of each year in which CAC spends State funds made available to it pursuant to this section to the 42
Joint Legislative Education Oversight Committee and the Fiscal Research Division on the 43
progress of expanding the placement of college advisers, data on the effectiveness of the program 44
in increasing access for students to postsecondary education, and the use of State funds. 45
46
CAREER DEVELOPMENT COORDINATORS 47
SECTION 7.4. There is appropriated from the General Fund to the Department of 48
Public Instruction the sum of one hundred thousand dollars ($100,000) in recurring funds for the 49
2026-2027 fiscal year for a Career and Postsecondary Planning Director position in the 50
Department's career and technical education division to focus on career planning in grades fiv e 51
General Assembly Of North Carolina Session 2025
House Bill 1017-First Edition Page 47
through 12. There is also appropriated the sum of eighty -seven million dollars ($87,000,000) in 1
recurring funds for the 2026 -2027 fiscal year to increase the number of school -based career 2
development coordinators for grades six through 12. 3
4
FUNDS TO REMO VE BARRIERS FOR ECONOMICALLY DISADVANTAGED 5
STUDENTS TO PARTICIPATE IN THE CAREER AND COLLEGE PROMISE 6
TRANSFER PATHWAY PROGRAM 7
SECTION 7.5. There is appropriated from the General Fund to the Department of 8
Public Instruction the sum of five million dollars ($5,000,000) in recurring funds for the 9
2026-2027 fiscal year to fund additional costs for all economically disadvantaged students 10
enrolled in the Career and College Promise Transfer Pathway Program, including at least the full 11
costs of textbooks, transpor tation, meals on college campuses, fees, and technology. If these 12
funds are insufficient, the Department shall use additional unspent funds in the State Public 13
School Fund to fulfill this purpose. 14
15
PART VIII. MISCELLANEOUS 16
17
STATE BUDGET ACT APPLIES 18
SECTION 8.1. The provisions of the State Budget Act, Chapter 143C of the General 19
Statutes, are reenacted and shall remain in full force and effect and are incorporated in this act 20
by reference. 21
22
EFFECT OF HEADINGS 23
SECTION 8.2. The headings to the Parts, subpart s, and sections of this act are a 24
convenience to the reader and are for reference only. The headings do not expand, limit, or define 25
the text of this act, except for effective dates referring to a Part or subpart. 26
27
SEVERABILITY CLAUSE 28
SECTION 8.3. If any section or provision of this act is declared unconstitutional or 29
invalid by the courts, it does not affect the validity of this act as a whole or any part other than 30
the part so declared to be unconstitutional or invalid. 31
32
EFFECTIVE DATE 33
SECTION 8 .4. Except as otherwise provided, this act becomes effective July 1, 34
2026. 35