Part I

Repeals Subsection 8.3(b) of SL 2011-145 (requiring the State Board of Community Colleges [SBCC] to allocate formula funds appropriated to support curriculum instruction and the occupational education component of continuing education in a certain way). Repeals Subsection 10.4(a) of SL 2013-360 (establishing community college funding as based on the number of full-time equivalent (FTE) students).

Requires the SBCC to revise the funding formula for community colleges and allocate funds accordingly, beginning with the 2025-26 fiscal year, according to the following minimum criteria: (1) each community college will continue to receive a base allocation of funds; (2) in addition to the base allocation of funds, funds shall be provided to community colleges based on the number of FTE students enrolled in the following: (i) curriculum, workforce continuing education, and Basic Skills courses and (ii) courses and programming conducted under the Customized Training Program and the Small Business Center Network; and (3) funds allocated according to prong two must be weighted based on the workforce sector of each course, as determined by the SBCC. In making its determinations, the SBCC must consider salary data and labor market demand for the applicable workforce sector. Amends GS 115D-5 (administration of institutions by SBCC) to require the SBCC to review and revise, as necessary, its workforce sector designations for curriculum, workforce continuing education, and Basic Skills courses at community colleges by January 15, 2027, and every two years thereafter. 

Amends GS 115D-31 (state financial support of institutions), when receipts for community college tuition and fees exceed the amount certified in General Fund Codes at the end of a fiscal year, to allow SBCC to allocate those receipts to the community colleges for operating costs according to a formula adopted by the SBCC (currently, requires the SBCC to transfer the amount of receipts and fees above those budgeted to the Enrollment Growth Reserve). Makes conforming changes.

Appropriates $94 million in recurring funds for 2025-26 from the General Fund to the Community Colleges System Office for implementation of these provisions.

Enacts new GS 115D-31.4, establishing the Enrollment Increase Reserve (Reserve), to be administered by the SBCC. Specifies the purpose of the Reserve is to allow the SBCC to provide funds to community colleges to account for enrollment increases beyond budgeted enrollment levels.  Provides for monies in the Reserve to consist of funds appropriated by the General Assembly  in its Current Operations Appropriations Act for a fiscal year. Directs the SBCC to include in its annual enrollment request the appropriation to the Reserve needed to fund enrollment increases in the next fiscal year. Allows the SBCC to allocate monies from the Reserve to a community college with an eligible increase in FTE enrollment according to a formula adopted by the SBCC.  Specifies that an increase in FTE enrollment is either (1) an increase in FTE enrollment of more than 325 students or (2) an increase in FTE enrollment of more than 5% of the budgeted enrollment level in any of the following course categories: curriculum, workforce continuing education, or basic skills. Specifies that monies in the Reserve do not revert but instead remain available for the specified purposes. Makes conforming changes to GS 115D-31 (State financial support for community colleges) to include reference to the Reserve. Appropriates $6 million from the General Fund to the Reserve, for 2025-26, for the purposes describe in this statute.

Part II.

Adds new GS 115C-238.54A (concerning cooperative innovative high schools funding based on county development tier designations) as follows.  Designates three development tier areas mirroring the development tiers areas created by GS 143B-437 (defining a development tier one area as a county whose annual ranking is one of the 40 highest in the State. A development tier two area is a county whose annual ranking is one of the next 40 highest in the State. A development tier three area is a county that is not in a lower-numbered development tier.) Requires the Department of Public Instruction (DPI) to allocate the following amounts from the cooperative innovative high school supplemental allotment to a local school administrative unit located in a development tier one area with a cooperative innovative high school that was approved by the State Board of Education (Board):

• $740,000 in recurring funds for the first cooperative innovative high school approved by the Board.
• $370,000 in recurring funds for each subsequent cooperative innovative high school approved by the Board.
• For a virtual cooperative innovative high school, requires DPI to allocate $200,000 in recurring funds from the cooperative innovative high school supplemental allotment to the local school administrative unit for each fiscal year.
• For the Northeast Regional School of Biotechnology and Agriscience, requires DPI to allocate $310,000 in recurring funds from the regional school supplemental allotment for the school for each fiscal year.

For development tier two areas, requires DPI to allocate the following amounts from the cooperative innovative high school supplemental allotment to a local school administrative unit located in a development area with a cooperative innovative high school that was approved by the Board:

• $590,000 in recurring funds for the first cooperative innovative high school approved by the Board.
• $295,000 in recurring funds for each subsequent cooperative innovative high school approved by the Board.
• For a virtual cooperative innovative high school, requires DPI to allocate $200,000 in recurring funds from the cooperative innovative high school supplemental allotment to the local school administrative unit for each fiscal year.

For development tier three areas, requires DPI to allocate the following amounts from the cooperative innovative high school supplemental allotment to a local school administrative unit located in a development area with a cooperative innovative high school that was approved by the Board:

• $550,000 in recurring funds for the first cooperative innovative high school approved by the Board.
• $275,000 in recurring funds for each subsequent cooperative innovative high school approved by the Board.
• For a virtual cooperative innovative high school, requires DPI to allocate $200,000 in recurring funds from the cooperative innovative high school supplemental allotment to the local school administrative unit for each fiscal year.

Appropriates $40 million from the General Fund to DPI in recurring funds for 2025-26 to implement this section. 

Part III.

Appropriates $30 million in recurring funds from the General Fund to DPI for 2025-26 to create a grant program in collaboration with the Community Colleges System Office for public school units to promote science, technology, engineering, and math (STEM) education. Requires the grants to be used for professional development, classroom technology, lab upgrades, or coding programs for teachers teaching STEM courses. Requires DPI to make grant applications available to public school units before August 1 of each school year and requires applications to be submitted by October 1 of each school year. Requires DPI to determine grant recipients by November 1 of each school year and disburse grants funds within 60 days.

Appropriates $20 million in recurring funds from the General Fund to DPI for 2025-26 to create a grant program in collaboration with the Community Colleges System Office for public school units to expand career and technical education course offerings, dual enrollment opportunities, and certification pathways for students in grades 9-12. Requires DPI to make the grant applications available to public school units before August 1 of each school year and for applications to be submitted by October 1 of each school year. Requires DPI to decide on grant recipients by November 1 of each school year and disburse grants funds within 60 days.

Appropriates $25 million in recurring funds from the General Fund to DPI for 2025-26 to create a grant program in collaboration with the Community Colleges System Office for public school units to create industry-school partnerships to facilitate internships, apprenticeships, and project-based learning opportunities. Requires DPI to make grant applications available to public school units before August 1 of each school year and for applications to be submitted by October 1. Requires the application to include at least one industry partner that the public school unit intends to collaborate with to achieve program goals. Requires DPI to determine grant recipients by November 1 of each school year and disburse grants funds within 60 days.

Part IV.

Appropriates $10 million in recurring funds from the General Fund to DPI for 2025-26 for DPI to collaborate with the Community Colleges System Office to create an awareness campaign in public school units to promote enrollment in community colleges, including informing students and parents of career pathways, internships, apprenticeships, dual enrollment opportunities, and certification pathways available through the Community College System.

Part V.

Effective July 1, 2025.