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HB 239

Reproductive Freedom Act.

2025 Regular Session Introduced by Ken Chestek and 7 co-sponsors

HB 239 adds scholarship recipients to the 13% cap for EC funding, reallocating per-LEA funds; $25M recurring to DPI for 2025–26, effective 7/1/2025.

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Bill Summary · HB 239

HB 239 — Change to Exceptional Children (EC) Funding Formula (North Carolina)

Status: Passed 1st Reading
Introduced: 2025-01-09 (filed earlier in 2024/2025 session materials)
Subject areas: Education; Children with disabilities; Funding; Department of Public Instruction; State Education Assistance Authority

Purpose / Intent

HB 239 modifies the State’s funding formula for children with disabilities (often called “exceptional children” or EC) to ensure certain students who receive scholarship grants are counted for EC funding purposes. The bill also provides a recurring appropriation to support the change for the 2025–2026 school year.

Key provisions

  • Amends G.S. 115C‑111.05 (Funding for children with disabilities).
    • Allocations are made on a per‑child basis to each local school administrative unit (LEA), to the extent funds are available.
    • Each LEA receives funding for the lesser of:
    • All children identified as children with disabilities in the LEA; or
    • 13% of the LEA’s allocated average daily membership (ADM) for the current year, plus the number of students who received scholarship grants under Part 2A of Article 39 of Chapter 115C in the most recent year for which data are available and who reside within the LEA’s boundaries.
  • Requires the State Education Assistance Authority to provide, by March 15 each year, the number of scholarship recipients (Part 2A, Article 39) who resided in each LEA during the most recent school year, to the Department of Public Instruction (DPI).
  • Appropriates $25,000,000 in recurring General Fund dollars to DPI for allocation to public school units for children with disabilities funding for the 2025–2026 fiscal year.
  • Effective date: July 1, 2025. Applies beginning with funding allocations for the 2025–2026 fiscal year.

Who or what is affected

  • Local school administrative units (LEAs) / public school units — allocation calculation changes and possible shifts in funding levels.
  • Students identified as children with disabilities in public schools.
  • Students who received scholarship grants under Part 2A of Article 39 (these scholarship recipients are now explicitly counted in the statute’s 13% funding cap calculation).
  • Department of Public Instruction (recipient and distributor of funds).
  • State Education Assistance Authority (required to supply scholarship counts annually).

Fiscal impact / potential effects

  • Direct appropriation: $25 million recurring to DPI for 2025‑26 (specified in Section 2).
  • The formula change increases the count used in the 13% cap by adding scholarship recipients residing in an LEA. For LEAs with significant numbers of such scholarship students, the statutory 13% cap will effectively allow funding for a larger number of students than under the prior wording.
  • Net distributional effects across LEAs will depend on (a) total statewide funds available, (b) local counts of identified EC students, and (c) numbers of scholarship recipients by LEA. If total funds are fixed, some LEAs could see increases while others could see reductions; the $25M appropriation increases the overall pool for 2025–26.

Procedural / timeline notes

  • Effective July 1, 2025; applies to allocations for the 2025–2026 fiscal year.
  • Annual data transfer requirement: the State Education Assistance Authority must provide scholarship recipient counts to DPI by March 15 each year to inform allocations.

Plain‑language takeaway

HB 239 adjusts North Carolina’s EC funding cap so that scholarship students (those who received Part 2A Article 39 grants and live in an LEA) are added to the 13% ADM measure used to cap EC funding per LEA. The bill also provides a $25 million recurring appropriation for EC funding in 2025–26 and requires annual reporting of scholarship counts to DPI. This aims to better align funding with student counts that impact LEAs’ responsibilities for children with disabilities.

Compiled from official sources — confirm details with the bill’s official record.

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