The NC Teacher Pay Competitiveness Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1178

Short Title: The NC Teacher Pay Competitiveness Act. (Public)
Sponsors: Representatives Rubin, Prather, R. Pierce, and F. Jackson (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
May 4, 2026
*H1178-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO INCREASE T EACHER COMPENSATION AND ESTABLISH A PHAS ED 2
FRAMEWORK FOR CONTIN UED COMPENSATION INC REASES FOR TEACHERS 3
OVER TIME IN ORDER T O COMPETE WITH PEER STATES IN THE 4
SOUTHEASTERN UNITED STATES AND TO REVISE ELIGIBILITY 5
REQUIREMENTS AND REDUCE FUNDS FOR THE OP PORTUNITY SCHOLARSHIP 6
PROGRAM. 7
Whereas, the North Carolina General Assembly has demonstrated a dangerous 8
inability to enact a comprehensive biennial State budget prior to the start of the fiscal year; and 9
Whereas, operating under the budget continuation statute due to legislative gridlock 10
leaves critical investments in our public workforce frozen, including stagnant and unfunded 11
salaries for public school educators; and 12
Whereas, in contrast, funding for private scho ol vouchers through the Opportunity 13
Scholarship program has been statutorily codified to expand automatically, fully insulating 14
private school subsidies from the very budget impasses that freeze funding for public schools; 15
and 16
Whereas, the unchecked, autom atic diversion of increasingly vast sums of public 17
taxpayer dollars to private institutions threatens the State's ability to fulfill its constitutional 18
obligation to provide every child with a sound, basic education; and 19
Whereas, average public school teac her compensation in North Carolina currently 20
lags behind every bordering state, severely undermining this State's ability to recruit and retain 21
highly qualified educators; and 22
Whereas, it is the intent of the General Assembly to demonstrate to the teachers of 23
this State that it will invest in their long-term growth in this State, as they serve the vast majority 24
of students in North Carolina; and 25
Whereas, this act will establish a phased, legally protected escalation of funding 26
designed to ensure that North Carolina, at minimum, continues to stay competitive in the 27
southeastern United States, as defined by the Department of Public Instruction, for teacher pay 28
through at least the 2032-2033 school year; Now, therefore, 29
The General Assembly of North Carolina enacts: 30
31
PART I. PERMANENT TEACHER RAISES 32
SECTION 1.(a) Article 20 of Chapter 115C of the General Statutes is amended by 33
adding the following new sections to read: 34
"§ 115C-302.5A. Teacher salary schedules. 35
General Assembly Of North Carolina Session 2025
Page 2 House Bill 1178-First Edition
(a) The following monthly teacher salary schedule shall apply for the 2026-2027 fiscal 1
year to licensed personnel of the public schools who are classified as teachers. The salary 2
schedule is based on years of teaching experience. 3
2026-2027 Teacher Monthly Salary Schedule 4
Years of Experience "A" Teachers 5
0 $4,387 6
1 $4,467 7
2 $4,548 8
3 $4,628 9
4 $4,708 10
5 $4,788 11
6 $4,892 12
7 $4,989 13
8 $5,086 14
9 $5,183 15
10 $5,280 16
11 $5,377 17
12 $5,474 18
13 $5,570 19
14 $5,668 20
15-24 $5,765 21
25+ $5,987 22
(b) Beginning with the 2027-2028 fiscal year and ending with the 2032-2033 fiscal year, 23
the Department of Public Instruction shall raise the monthly amounts for each step of the teacher 24
salary schedule each fiscal year by three and sixty-seven hundredths percent (3.67%). 25
(c) Beginning in the 2033 -2034 fiscal year and annually thereafter, the Department of 26
Public Instruction shall raise the monthly amounts for each step of the teacher salary schedule 27
for each fiscal year by the sum of one plus the 12-month percent change in the second quarter 28
Employment Cost Index for elementary and secondary school workers as reported by the Federal 29
Bureau of Labor Statistics. 30
(d) Salary Supplements for Teachers Paid on This Salary Schedule. – 31
(1) Licensed teachers who have NBPTS certification shall receive a salary 32
supplement each month of twelve percent (12%) of their monthly salary on 33
the "A" salary schedule. 34
(2) Licensed teachers who are classified as "M" teachers shall receive a salary 35
supplement each month of ten percent (10%) of their monthly salary on the 36
"A" salary schedule. 37
(3) Licensed teachers with licensure based on academic preparation at the 38
six-year degree level shall receive a salary supplement of one hundred 39
twenty-six dollars ($126.00) per month in addition to the supplement provided 40
to them as "M" teachers. 41
(4) Licensed teachers with licensure based on academic preparation at the 42
doctoral degree level shall receive a salary supplement of two hundred 43
fifty-three dollars ($253.00) per month in addition to the supplement provided 44
to them as "M" teachers. 45
(5) Certified school nurses shall receive a salary supplement each month of ten 46
percent (10%) of their monthly salary on the "A" salary schedule. 47
(6) School counselors who are licensed as counselors at the master's degree level 48
or higher shall receive a salary supplement each month of one hundred dollars 49
($100.00). 50
General Assembly Of North Carolina Session 2025
House Bill 1178-First Edition Page 3
(e) For school psychologists, school speech pathologists who are licensed as speech 1
pathologists at the master 's degree level or higher, and school audiologists who are licensed as 2
audiologists at the master's degree level or higher, the following shall apply: 3
(1) The first step of the salary schedule shall be equivalent to the sixth step of the 4
"A" salary schedule. 5
(2) These employees shall receive the following salary supplements each month: 6
a. Ten percent (10%) of their monthly salary, excluding the supplement 7
provided pursuant to sub-subdivision b. of this subdivision. 8
b. Three hundred fifty dollars ($350.00). 9
(3) These employees are eligible to receive salary supplements equivalent to those 10
of teachers for academic preparation at the six -year degree level or the 11
doctoral degree level. 12
(4) The twenty -sixth step of the salary schedule shall be seven and one -half 13
percent (7.5%) higher than the salary received by these same employees on 14
the twenty-fifth step of the salary schedule. 15
(f) Beginning with the 2014 -2015 fiscal year, in lieu of providing annual longevity 16
payments to teachers paid on the teacher salary schedule, the amounts of those longevity 17
payments are included in the monthly amounts under the teacher salary schedule. 18
(g) A teacher compensated in accordance with this salary schedule shall receive an 19
amount equal to the greater of the following: 20
(1) The applicable amount on the salary schedule for the applicable school year. 21
(2) For teachers who were eligible for longevity for the 2013 -2014 school year, 22
the sum of the following: 23
a. The salary the teacher received in the 2013-2014 school year pursuant 24
to Section 35.11 of S.L. 2013-360. 25
b. The longevity that the teacher would have received under the longevity 26
system in effect for the 2013 -2014 school year provided in Section 27
35.11 of S.L. 2013-360 based on the teacher's current years of service. 28
c. The annual bonus provided in Section 9.1(e) of S.L. 2014-100. 29
(3) For teachers who were not eligible for longevity for the 2013 -2014 school 30
year, the sum of the salary and annual bonus the teacher received in the 31
2014-2015 school year pursuant to Section 9.1 of S.L. 2014-100. 32
(h) No later than February 15, 2027, an d annually thereafter, the Department of Public 33
Instruction shall report to the Joint Legislative Education Oversight Committee and publish on 34
its website the teacher salary schedule developed for the upcoming fiscal year in accordance with 35
this section and any other enactment of the General Assembly. 36
(i) As used in this section, the term "teacher" shall also include instructional support 37
personnel. 38
"§ 115C-302.5C. Teacher Salary Reserve. 39
(a) The Teacher Salary Reserve is established as a reserve to be administered by the 40
Department of Public Instruction for the purpose of providing teacher raises in accordance with 41
G.S. 115C-302.5A. The Reserve shall consist of monies appropriated from the Gen eral Fund to 42
the Reserve by the General Assembly and any interest accrued to it thereon. The Department 43
shall only use monies in the Reserve in accordance with the purposes set forth in this section. 44
(b) The General Assembly finds that, due to the unaccept able failure of the General 45
Assembly to timely pass the Current Operations Appropriations Act in recent years, as required 46
of the General Assembly , it is imperative th at the State provide funds for increased teacher 47
salaries over time , similar to funds provided for opportunity scholarship grants under 48
G.S. 115C-562.8, as it existed immediately prior to its repeal, to protect against future failures to 49
pass a Current Operations Appropriations Act . The General Assembly further finds that t he 50
State's continued low pay for teachers represents a strategic threat to the future prosperity of the 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 1178-First Edition
people of this State, and it is therefore imperative that North Carolina reach the average of teacher 1
salary in the southeastern United States by 203 2. Therefore, there is appropriated from the 2
General Fund to the Reserve the following amounts for each fiscal year to be used for the 3
purposes set forth in this section: 4
Fiscal Year Appropriation 5
2026-2027 $825,100,000 6
2027-2028 $1,048,200,000 7
2028-2029 $1,271,300,000 8
2029-2030 $1,494,400,000 9
2030-2031 $1,717,500,000 10
2031-2032 $1,940,600,000 11
2032-2033 $2,163,700,000 12
For each fiscal year after the 2032-2033 fiscal year, the amount appropriated from the General 13
Fund to the Reserve shall be increased by the sum of tw o hundred eighty -three million two 14
hundred thousand dollars ($283,200,000) over the amount appropriated under this subsection for 15
the preceding fiscal year. When developing the base budget, as defined by G.S. 143C-1-1, for 16
each fiscal year specified in this subsection, the Director of the Budget shall include the 17
appropriated amount specified in this subsection for that fiscal year. 18
"§ 115C-302.6. Supplemental funds for teacher compensation. 19
(a) Use of Funds. – To the extent funds are made available for this purpose , except as 20
provided in subsection ( g) of this section, the State Board of Education shall allocate funds 21
pursuant to this section to eligible local school administrative units to provide salary supplements 22
to teachers and qualifying school administrators in those units. Allocation of salary supplements 23
among teachers and qualifying school administrators within each eligible local school 24
administrative unit, including whether a teacher or qualifying school administrator receives a 25
salary supplement and the amount of the supplement provided to that person, shall be determined 26
in the discretion of the local board of education of the eligible unit , except that no individual 27
salary supplement shall exceed the per teacher funding amount awarded to that unit pursuant to 28
subdivision (4) of subsection (c) of this section. 29
(b) Definitions. – As used in this section, the following definitions shall apply: 30
(1) Adjusted market value of taxable real property. – A county's assessed taxable 31
real property value, using the latest available data published by the 32
Department of Revenue, divided by the county 's sales assessment ratio 33
determined under G.S. 105-289(h). 34
(2) Composite value. – For each eligible county, the sum of the following: 35
a. The taxable real property factor multiplied by sixty -five percent 36
(65%). 37
b. The median household income factor multiplied by twenty -five 38
percent (25%). 39
c. The effective tax rate factor multiplied by ten percent (10%). 40
(3) County allocation factor. – For each eligible county, the supplement factor for 41
that county divided by the sum of all supplement factors for the State. 42
(4) Effective tax rate. – The actual county tax rate multiplied by the most recent 43
annual sales assessment ratio for that county. 44
(5) Effective tax rate factor. – For each eligible county, the effective tax rate for 45
that county divided by the median effective tax rate in the State. 46
(6) Eligible county. – A county that has an adjusted market value of taxable real 47
property of less than fifty billion nine hundred million dollars 48
($50,900,000,000). 49
(7) Eligible local school administrative unit. – A local school administrative unit 50
located in whole or in part in an eligible county. 51
General Assembly Of North Carolina Session 2025
House Bill 1178-First Edition Page 5
(8) Eligible school. – A public school that is located in an eligible county and 1
governed by a local school administrative unit. 2
(9) Maintenance of effort amount. – For each local school administrative unit in 3
each fiscal year the total non-State funds expended for salary supplements for 4
teachers in the 2020-2021 fiscal year. 5
(10) Median household income. – A county's median household income for the 6
most recent 12 months for which data are available, as that term is used in 7
G.S. 143B-437.08. 8
(11) Median household income factor. – For each eligible county, the median 9
household income in the State divided by the median household income for 10
that county. 11
(12) Non-State funds. – Any funds held by a local school administrative unit, other 12
than nonrecurring federal funds received as a result of legislation enacted by 13
Congress in response to COVID-19, that are not State funds. 14
(13) Qualifying school administrator. – Any of the following: 15
a. Assistant principals paid pursuant to G.S. 115C-285(a)(8). 16
b. Principals paid pursuant to G.S. 115C-285(a)(8a). 17
(14) Supplement factor. – For each eligible county, the composite value multiplied 18
by the number of State -funded teachers employed in a school in the county 19
that is governed by a local school administrative unit. 20
(15) Taxable real property factor. – For each eligible county, the median adjusted 21
market value of taxable real property in the State divided by the adjusted 22
market value of taxable real property for that county. 23
(16) Teacher. – Teachers and instructional support personnel. 24
(c) Allocation of Funds. – The State Board of Education shall allocate funds for salary 25
supplements to eligible local school administrative units according to the following procedure: 26
(1) County allocation. – For each eligible county, the State Board shall determine 27
a county allocation by multiplying the county allocation factor for that county 28
by the funding amount appropriated pursuant to this section for the applicable 29
fiscal year. 30
(2) Per teacher funding amount. – For each eligible county, the State Board shall 31
determine a per teacher funding amount by dividing the county allocation 32
amounts determined pursuant to subdivision (1) of this subsection by the total 33
number of State -funded teachers employed in all eligible schools in that 34
county. 35
(3) Unit funding amount. – For each eligible local school administrative unit, the 36
State Board shall determine the funding amount for that unit based on the per 37
teacher funding amount or amounts for the eligible county or counties where 38
the unit is located. For each county with an eligible school governed by the 39
unit, the State Board shall multiply the applicable per teacher funding amount 40
for that county determined pursuant to subdivision (2) of this subsection by 41
the number of State -funded teachers employed in the eligible school in that 42
county. If the unit is located in multiple eligible counties, the State Board shall 43
aggregate those amounts. 44
(4) Allocation and funding cap. – The State Board shall allocate the amount 45
determined pursuant to subdivision (3) of this subsection to each eligible local 46
school administrative unit for each applicable fiscal year, up to a maximum of 47
five thousand dollars ($5,000) per State-funded teacher. 48
(d) Charter Schools. – Funds appropriated to the Department of Public Instruction 49
pursuant to this section shall be subject to the allocation of funds for charter schools described in 50
G.S. 115C-218.105. The General Assembly encourages charter schools receiving funds pursuant 51
General Assembly Of North Carolina Session 2025
Page 6 House Bill 1178-First Edition
to this section to provide salary supplements to teachers and qualifying school administrators in 1
the charter school in accordance with the requirements of this section. 2
(e) Formula for Distribution of Supplemental Funding Pursuant to this Section Only. – 3
The formula in this section is solely a basis for distribution of supplemental funding to eligible 4
local school administrative units and is not intended to reflect any mea sure of the adequacy of 5
the educational program or funding for public schools. The formula is also not intended to reflect 6
any commitment by the General Assembly to appropriate any additional supplemental funds for 7
eligible local school administrative units. 8
(f) Nonsupplant Requirement. – A local school administrative unit that receives funds 9
under this section shall use those funds to supplement non -State funds provided for salary 10
supplements for teachers and qualifying school administrators and shall not use any State funds, 11
including funds received under this section , Section 3.3 of S.L. 2025 -89, Section 7A.4 of S.L. 12
2023-134, or Section 7A.12 of S.L. 2021 -180, to supplant non -State funds provided for salary 13
supplements for teachers and qualifying school administrators. For purposes of this section, a 14
local school administrative unit has supplanted non -State funds if the State Board finds that the 15
amount of non-State funds expended by the unit for salary supplements was less than ninety-five 16
percent (95%) of the maintenance of effort amount for the local school administrative unit. 17
(g) Nonsupplant Enforcement. – The State Board of Education shall not al locate any 18
funds under this section to a local school administrative unit if it determines that the unit h as 19
supplanted non-State funds in violation of subsection (f) of this section. 20
(h) Reports. – No later than April 15 of each year funds are provided under this section, 21
the State Board of Education shall report the following information for the applicable fiscal year 22
to the Joint Legislative Education Oversight Committee and the Fiscal Research Division: 23
(1) A list of all eligible counties and eligible local school administrative units. 24
(2) Funds allocated to each eligible local school administrative unit. 25
(3) The percentage and amount of teachers and qualifying school administrators 26
in each eligible local school administrative unit receiving salary supplements. 27
(4) The average salary supplement amount in each eligible local school 28
administrative unit. 29
(5) The range of salary supplement amounts in each eligible local school 30
administrative unit. 31
(6) The effect of the salary supplements on the retention of teachers and 32
qualifying school administrators in eligible local school administrative units. 33
(7) The ident ity of any local school administrative unit that the State Board 34
determines has supplanted funds." 35
SECTION 1.(b) Section 3.3 of S.L. 2025-89 reads as rewritten: 36
"SECTION 3.3. Notwithstanding subdivisions (5) and (6) of G.S. 143C-5-4(b), during the 37
period of continuing budget authority that begins July 1, 2025, all of the following apply: 38
… 39
(6) Supplemental funds for teacher compensation for the 2025 -2026 fiscal year 40
are authorized pursuant to the requirements of Section 7A.4 of S.L. 2023-134, 41
as amended by Section 1.7B of S.L. 2024-39, notwithstanding any limitation 42
to the 2023-2025 fiscal biennium." 43
SECTION 1.(c) This section becomes effective July 1, 2026, and applies beginning 44
with the 2026-2027 school year. 45
46
PART II. REVISE ELIGIBILITY REQUIREMENTS AND REDUCE FUNDS FOR THE 47
OPPORTUNITY SCHOLARSHIP PROGRAM 48
SECTION 2.(a) G.S. 115C-562.1 reads as rewritten: 49
"§ 115C-562.1. Definitions. 50
The following definitions apply in this Part: 51
General Assembly Of North Carolina Session 2025
House Bill 1178-First Edition Page 7
… 1
(3a) Eligible student. – A student residing in North Carolina who has not yet 2
received a high school diploma and who meets all of the following 3
requirements: 4
a. Is eligible to attend a North Carolina public school pursuant to Article 5
25 of this Chapter. A child who is the age of 4 on or before April 16 is 6
eligible to attend the following school year if the principal, or 7
equivalent, of the school in which the child seeks to enroll finds that 8
the student meets the requirements established by the Authority 9
pursuant to G.S. 115C-562.2(d) and those findings are submitted to the 10
Authority. 11
b. Has not been enrolled in a postsecondary institution as a full -time 12
student taking at least 12 hours of academic credit. 13
c. Has not been placed in a nonpublic school or facility by a public 14
agency at public expense. 15
… 16
(3d) Eligible student. – A student residing in North Carolina who has not yet 17
received a high school diploma and who meets all of the following 18
requirements: 19
a. Meets one of the following criteria: 20
1. Was a student (i) assigned to and attending a public school 21
full-time pursuant to G.S. 115C-366 or (ii) enrolled full -time 22
in a Department of Defense Elementary and Secondary School, 23
established pursuant to 10 U.S.C. § 2164 and located in North 24
Carolina, during the spring semester prior to the school year 25
for which the student is applying. 26
2. Received a scholarship grant for the school year prior to the 27
school year for which the student is applying. 28
3. Is eligible to enter kindergarten, first grade, or second grade 29
pursuant to Article 25 of this Chapter. A child who is the age 30
of 4 on or before April 16 is eligible to attend the following 31
school year if the principal, or equivalent, of the school in 32
which the child seeks to enroll finds that the student meets the 33
requirements established by the Authority pursuant to 34
G.S. 115C-562.2(d) an d those findings are submitted to the 35
Authority with the child's application. 36
4. Is a child in foster care as defined in G.S. 131D-10.2(9). 37
5. Is a child whose adoption decree was entered not more than 38
one year prior to submission of the scholarship grant 39
application. 40
6. Is a child whose parent or legal guardian (i) is on full-time duty 41
status in the active uniformed service of the United States, 42
including members of the National Guard and Reserve on 43
active duty orders pursuant to 10 U.S.C. § 12301, et seq. , and 44
10 U.S.C. § 12401, et seq., or (ii) receives an honorable 45
discharge as an active duty member from the uniformed service 46
of the United States within 12 months prior to application. 47
7. Is a child who meets both of the following: 48
I. Was enrolled in a no npublic school that meets the 49
requirements of Part 1 and Part 2 of this Article during 50
General Assembly Of North Carolina Session 2025
Page 8 House Bill 1178-First Edition
the spring semester prior to the school year for which 1
the student is applying. 2
II. Was enrolled for the entire school year immediately 3
prior to the school year in which the student enrolled in 4
the nonpublic school in one of the following: 5
A. A North Carolina public school. 6
B. A Department of Defense Elementary and 7
Secondary School established pursuant to 10 8
U.S.C. § 2164 and located in North Carolina. 9
a1. Has not enrolled in a postsecondary institution in a matriculated status 10
eligible for enrollment for 12 hours of academic credit. 11
b. Meets one of the following criteria: 12
1. Resides in a household with an income level not in excess of 13
two hundred percent (200%) of the amount required for the 14
student to qualify for the federal free or reduced -price lunch 15
program. The Authority shall not count any distribution from 16
the estate of a decedent in calculating the income level of the 17
applicant's household for the purposes o f determining 18
eligibility for a scholarship under this sub-sub-subdivision. 19
2. Is a child in foster care as defined in G.S. 131D-10.2. The 20
Authority shall not consider the household income of the foster 21
parent, as defined in G.S. 131D-10.2, in determining the 22
eligibility of a foster care child. 23
(3e) Full-time student. – A student enrolled exclusively in a nonpublic school for 24
elementary or secondary education whose parents have released the local 25
school administrative unit the student is eligible to attend under 26
G.S. 115C-366 of all obligations to educate the eligible student while the 27
eligible student is receiving a scholarship grant under this Part. 28
… 29
(5b) Part-time student. – A student enrolled part -time in a public school and 30
part-time in a nonpublic school. 31
…." 32
SECTION 2.(b) G.S. 115C-562.2 reads as rewritten: 33
"§ 115C-562.2. Scholarship grants. 34
(a) The Authority shall make available no later than February 1 annually applications to 35
eligible students for the award of scholarship grants to attend any nonpublic school on a full- or 36
part-time basis. school. Information about scholarship grants and the application process shall be 37
made available on the Authority's Web site. Beginning March 15, the Authority shall begin 38
awarding scholarship grants to students who have applied by March 1 in the following 39
order:according to the following criteria: 40
(1) Eligible First priority shall be given to eligible students who received a 41
scholarship grant for the school year prior to the school year for which the 42
students are applying.applying if those students have applied by March 1. 43
(2) Eligible students qualifying for a scholarship grant in the amount provided 44
under subdivision (1) of subsection (b2) of this section. After scholarship 45
grants have been awarded to prior recipients as provided in subdivision (1) of 46
this subsection, scholarships shall be awarded with remaini ng funds as 47
follows: 48
a. At least fifty percent (50%) of the remaining funds shall be used to 49
award scholarship grants to eligible students residing in households 50
General Assembly Of North Carolina Session 2025
House Bill 1178-First Edition Page 9
with an income level not in excess of the amount required for the 1
student to qualify for the federal free or reduced-price lunch program. 2
b. Any remaining funds shall be used to award scholarship grants to all 3
other eligible students. 4
(3) Eligible students qualifying for a scholarship grant in the amount provided 5
under subdivision (2) of subsection (b2) of this section. 6
(4) Eligible students qualifying for a scholarship grant in the amount provided 7
under subdivision (3) of subsection (b2) of this section. 8
(5) All other students. 9
(a1) Scholarship grants awarded to eligible students residing in households with an income 10
level not in excess of the amount required for the student to qualify for the federal free or 11
reduced-price lunch program shall be, per year per eligible student, in an amount of up to seven 12
thousand nine hundred forty-two dollars ($7,942) for full-time students or up to three thousand 13
nine hundred seventy-one dollars ($3,971) for part-time students. Scholarship grants awarded to 14
eligible students residing in households with an income level in excess of the amount required 15
for the student to qualify for the federal free or reduced-price lunch program shall be for amounts 16
of not more than seven thousand one hundred forty-eight dollars ($7,148) for full-time students 17
or three thousand five hundred seventy-four dollars ($3,574) for part-time students. Tuition and 18
fees for a nonpublic school may include tuition and fees for books, transportation, equipment, or 19
other items required by the nonpublic school. No scholarship grant shall exceed the required 20
tuition and fees for the nonpublic school the eligible student will attend. 21
… 22
(b2) Scholarship grants shall be awarded to eligible students as follows: 23
(1) For students residing in households with an income level not in excess of the 24
amount required for the student to qualify for the federal free or reduced-price 25
lunch program, per year per eligible student, an amount of up to one hundred 26
percent (100%) of the average State per pupil allocation for average daily 27
membership in the prior fiscal year. 28
(2) For students residing in households with an income level between the amount 29
required for the student to qualify for the federal free or reduced -price lunch 30
program and not in excess of two hundred percent (200%) of that amount, per 31
year per eligible student, an amount of up to ninety percent (90%) of the 32
average State per pupil allocation for average daily membership in the prior 33
fiscal year. 34
(3) For students residing in households with an income level of between two 35
hundred percent (200%) of the amount required for the student to qualify for 36
the federal free or reduced -price lunch program and not in excess of four 37
hundred fifty percent (450%) of that amount, per year per eligible student, an 38
amount of up to sixty percent (60%) of the average State per pupil allocation 39
for average daily membership in the prior fiscal year. 40
(4) For all students, per year per eligible student, an amount of up to forty -five 41
percent (45%) of the average State per pupil allocation for average daily 42
membership in the prior fiscal year, unless the student qualifies for a higher 43
amount under this subsection. 44
(b3) Tuition and fees for a nonpublic school may include tuition and fees for bo oks, 45
transportation, equipment, or other items required by the nonpublic school. 46
(b4) No scholarship grant shall exceed, per year per eligible student, an amount equal to 47
one hundred percent (100%) of the average State per pupil allocation for average dail y 48
membership in the prior fiscal year, and no scholarship grant shall exceed the required tuition 49
and fees for the nonpublic school the eligible student will attend. 50
General Assembly Of North Carolina Session 2025
Page 10 House Bill 1178-First Edition
(b5) In addition to the amount of the scholarship grant, for any student receiving a 1
scholarship grant in grades three, eight, or 11, the Authority shall provide to the nonpublic school 2
an amount equal to the cost of the nationally standardized test required to be administered as 3
provided in G.S. 115C-562.5. 4
…." 5
SECTION 2.(c) G.S. 115C-562.8 reads as rewritten: 6
"§ 115C-562.8. The Opportunity Scholarship Grant Fund Reserve. 7
… 8
(b) The General Assembly finds that, due to the critical need in this State to provide 9
opportunity for school choice for North Carolina students, it is imperative that the State provide 10
an increase of funds for 15 years to the Opportunity Scholarship Grant Fund Reserve. Therefore, 11
there There is appropriated from the General Fund to the Reserve the following amounts for each 12
fiscal year to be used for the purposes set forth in this section: 13
Fiscal Year Appropriation 14
… 15
2027-2028 $700,000,000$320,000,000 16
2028-2029 $725,000,000$305,000,000 17
2029-2030 $750,000,000$280,000,000 18
2030-2031 $775,000,000$265,000,000 19
2031-2032 $800,000,000$250,000,000 20
For the 2032-2033 fiscal year and each fiscal year thereafter, there is appropriated from the 21
General Fund to the Reserve the sum of eight hundred twenty-five million dollars ($825,000,000) 22
two hundred thirty -five million dollars ($ 235,000,000) to be used for the purpo ses set forth in 23
this section. When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year 24
specified in this subsection, the Director of the Budget shall include the appropriated amount 25
specified in this subsection for that fiscal year. 26
…." 27
SECTION 2.(d) Notwithstanding G.S. 115C-562.1 and G.S. 115C-562.2, as 28
amended by subsection (a) of this section, any eligible student who receives a scholarship 29
pursuant to Part 2A of Article 39 of Chapter 115C of the General Statutes in the 2026 -2027 30
school year shall be eligible to receive a scholarship in the 2027 -2028 fiscal year. The award 31
shall be at the same amount the student received in the 2026-2027 school year. 32
SECTION 2.(e) Notwithstanding G.S. 115C-562.8 and any other provision of law 33
to the contrary, the unencumbered, nonrecurring funds available for the award of opportunity 34
scholarship grants pursuant to Part 2A of Article 39 of Chapter 115C of the General Statutes at 35
the end of the 2025 -2026 fiscal year that would otherwise be carri ed forward in the 2026 -2027 36
fiscal year pursuant to G.S. 115C-562.8(d)(2) shall be reduced by the sum of one hundred fifty 37
million dollars ($150,000,000) in nonrecurring funds. 38
SECTION 2.(f) Notwithstanding any other provision of law to the contrary, the 39
funds appropriated for the 2026 -2027 fiscal year to the Opportunity Scholarship Grant Fund 40
Reserve for the award of opportunity scholarship grants pursuant to Part 2A of Article 39 of 41
Chapter 115C of the General Statutes in the 2027 -2028 fiscal year shall be reduced by the sum 42
of one hundred ten million dollars ($110,000,000) in recurring funds. 43
SECTION 2.(g) This section is effective when it becomes law and applies beginning 44
with applications for the award of scholarship grants in the 2027-2028 school year. 45
46
PART III. EFFECTIVE DATE 47
SECTION 3. Except as otherwise provided, this act is effective when it becomes 48
law. 49