Requires the Department of Public Instruction (DPI) to establish a grant program for local school administrative units to apply for funds from the Special State Reserve Fund (SSRF) for children with disabilities, beginning with the 2023-24 fiscal year, to cover extraordinary costs of certain students with disabilities, including costs associated with the placement of students in private schools with approved nonpublic education programs providing special education in accordance with a student's individualized education program (IEP). Requires the program to provide funds for students with disabilities on an ongoing basis according to the students' IEPs. Specifies that the funds supplement and not supplant existing federal, State, and local funding for children with disabilities.

Allows a local school administrative unit to apply for grant funds for a student with disabilities served by the unit for extraordinary costs (as defined) associated with services provided to the student. Requires the unit to demonstrate that the total cost of the services equals or exceeds four times the State average per pupil expenditure for children with disabilities in the prior fiscal year. Requires that the student's IEP support the determination of the services. Grants are student-specific and follow the student for special education and related services provided within the State. Sets out documentation requirements. Allows for grant renewals. Requires reimbursement of 75% of the extraordinary costs and disburses funds quarterly. 

Requires DPI to ensure that, if a student who is covered by grant funds is placed in a private school that has an approved nonpublic education program providing special education in accordance with a student's individualized education program (IEP), that the school is approved by DPI as adhering laws governing education services for students with disabilities and governing seclusion and restraint of students. Continues the local school administrative unit's liability for ensuring the student is receiving a free appropriate public education (FAPE) in the least restrictive environment (LRE) while the student is placed in the private school, and requires annual review of the student's IEP and any interim reviews requested by the student's parent or legal guardian for purposes of educational decision making. Sets out conditions to be met before the grant is renewed. 

Appropriates $1 million in recurring funds for 2023-24 from the General Fund to the SSRF for the grant program.

Requires DPI to report by March 15, 2024, to the specified NCGA committees and division on the amount of grant applications for the 2023-24 school year, amount of funds awarded, types of out-of-school system placements and service providers, and the type of extraordinary costs reimbursed.

Amends GS 115C-107.5 to add to the items that the State Board of Education must include in its annual report to the specified NCGA committee on children with disabilities, to also include a summary analysis of of the following to be monitored and collected monthly by DPI on students with disabilities in each local school administrative unit: (1) the number of new and continued homebound placements; (2) the number of new and continued modified day placements; (3) the number of new and continued Home/Hospital, Separate Schools, and Residential placements; and (4) the number of new and continued PRTF placements. Sets out requirements for the data and report. Requires this information to be submitted beginning with the report submitted to the NCGA committee by October 15, 2024.

Effective July 1, 2023.