Modernized Children with Disabilities Funding.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 960

Short Title: Modernized Children with Disabilities Funding. (Public)
Sponsors: Senator Grafstein (Primary Sponsor).
Referred to: Rules and Operations of the Senate
May 4, 2026
*S960-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO RAISE THE CAP ON THE MAXIMUM P ERCENTAGE OF STUDENTS FOR 2
WHICH A PUBLIC SCHOO L UNIT CAN RECEIVE F UNDS, TO PROVIDE 3
ADDITIONAL SUPPORT FOR HIGH-COST DISABILITIES, AND TO APPROP RIATE 4
FUNDS FOR THOSE PURPOSES. 5
Whereas, North Carolina public schools are required under federal law through the 6
Individuals with Disabilities Education Act (IDEA) to provide appropriate educational services 7
to all eligible students with disabilities; and 8
Whereas, the current State funding formula for Exceptional Children services caps 9
funding at 13% of a school district's Average Daily Membership (ADM); and 10
Whereas, many North Carolina school districts now serve a higher percentage of 11
students with disabilities than the current funding cap reflects; and 12
Whereas, when State funding does not align with the number of students requiring 13
services, school districts must redirect funds from general classroom instruction to meet federally 14
mandated special education obligations; Now, therefore, 15
The General Assembly of North Carolina enacts: 16
SECTION 1.(a) G.S. 115C-111.05 reads as rewritten: 17
"§ 115C-111.05. Funding for children with disabilities. 18
To the extent funds are made available for this purpose, the State Board shall allocate funds 19
for children with disa bilities to each local school administrative unit on a per child basis. Each 20
local school administrative unit shall receive funds for the lesser of (i) all children who are 21
identified as children with disabilities or (ii) thirteen sixteen percent (13%) (16%) of its allotted 22
average daily membership in the local school administrative unit for the current school year." 23
SECTION 1.(b) There is appropriated from the General Fund to the Department of 24
Public Instruction the sum of eighty -two million eight hundred thousand dollars ($82,800,000) 25
in recurring funds beginning with the 2026 -2027 fiscal year for funding for children with 26
disabilities. 27
SECTION 2.(a) Part 1F of Article 9 of Chapter 115C of the General Statutes is 28
amended by adding a new section to read: 29
"§ 115C-111.11. High-Cost Disabilities Support Fund. 30
(a) The Department of Public Instruction shall maintain a High-Cost Disabilities Support 31
Fund (HCDSF) to be used to provide funds to local school administrative units and charter 32
schools for the extraordinary costs associated with educating children with disabilities who 33
require intensive and specialized services. The Department shall allocate funds for the following 34
purposes: 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 960-First Edition
(1) To provide additional State reimbursement for students whose specia l 1
education services exceed a cost threshold determ ined by the State Board of 2
Education. 3
(2) To help districts support students with complex needs while maintaining 4
stability in local budgets. 5
(3) To ensure that districts do not incur undue financial hards hip for serving 6
students requiring the most intensive services. 7
(b) The State Board of Education shall adopt rules governing the use of funds from the 8
HCDSF consistent with the requirements of this section, including at least the following: 9
(1) Eligibility to receive funds. 10
(2) Reimbursement thresholds for specific uses of funds. 11
(3) Reporting requirements for uses of funds." 12
SECTION 2.(b) There is appropriated from the General Fund to the Department of 13
Public Instruction the sum of fifteen million dollars ($15,000,000) in recurring funds beginning 14
with the 2026-2027 fiscal year to be used for the purposes set out in G.S. 115C-111.11, as enacted 15
by this act. 16
SECTION 3. This act becomes effective July 1, 2026, and applies to funds allocated 17
for children with disabilities beginning with the 2026-2027 school year. 18