A BILL TO BE ENTITLED
AN ACT to establish the North Carolina Education Endowment Committee and to provide for the award of funds to local school administrative units and charter schools for providing bonuses and salary supplements for teachers.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 32E of Chapter 115C of the General Statutes is amended by adding new sections to read:
"§ 115C‑472.17.  Purpose and administration of the North Carolina Education Endowment Fund.
(a)	Purpose and Intent. – The purpose of the North Carolina Education Endowment Fund, as created by G.S. 115C‑472.16, is to establish a Fund whereby the State's highest performing teachers are rewarded monetarily for outstanding work that increases student performance and provides local school administrative units and charter schools greater ability to recruit high performing teachers to their schools. It is the intent of the General Assembly that the expenditures from the Fund be substantially less than revenues available in the Fund until such time as the Fund becomes self‑sustaining.
(b)	Oversight of the Fund. – There is established the North Carolina Education Endowment Committee to provide oversight regarding expenditures and revenues of the Fund. The Committee shall be a Board as defined in G.S. 138A‑3. The Committee shall consist of nine members as follows:
(1)	The Lieutenant Governor or designee.
(2)	The State Treasurer or designee.
(3)	One member appointed by the State Board of Education.
(4)	Two members appointed by the Governor.
(5)	Two members appointed by the Speaker of the House of Representatives.
(6)	Two members appointed by the President Pro Tempore of the Senate.
(c)	Committee Structure and Member Terms. – The Lieutenant Governor shall serve as chair of the Committee. In addition to the Committee members set forth under subsection (b) of this section, the Superintendent of Public Instruction or designee shall serve as a nonvoting ex officio member of the Committee and shall serve as secretary to the Committee. No member of the General Assembly shall be eligible to serve on the Committee as appointed members. The Committee shall be housed within the Department of Administration.
Members of the Committee shall serve two‑year terms, except that members initially appointed pursuant to subdivisions (b)(4), (b)(5), and (b)(6) of this section shall serve one‑year terms. Vacancies among appointed members shall be filled by the appointing entity and shall serve for the remainder of the vacant term. Vacancies appointed by the General Assembly shall be filled in accordance with G.S. 120‑122. Members may be removed solely for the grounds set forth in subsections (b), (c), and (d) of G.S. 143B‑13 and only by a vote of two‑thirds of the members of the Committee present at a regular or specially called meeting of the Committee.
Members of the Committee may receive only per diem and allowances in accordance with G.S. 138‑5.
(d)	Meetings of the Committee. – The Committee shall meet at least quarterly upon the call of the chair. Special meetings of the Committee may be set at any regular meeting or may be called by the chair. A majority of the appointed members of the Committee shall constitute a quorum for the transaction of business.
(e)	Duties of the Committee. – The Committee shall have the following duties:
(1)	Monitoring and oversight of the Fund, including investment of the Fund's revenues so as to maximize returns on the Fund while taking appropriate measures to ensure the viability of the Fund.
(2)	Making annual recommendations to the General Assembly regarding appropriations to the Fund and appropriations from the Fund for the purposes set forth in this section and G.S. 115C‑472.16.
(3)	Providing an annual report to the General Assembly on the state of the Fund, including interest earnings and corporate and individual donations to the Fund.
(4)	Consulting and coordinating with the North Carolina nonprofit corporation that the Committee enters into a cooperative agreement with under subsection (g) of this section to solicit monies for the Fund from non‑government sources.
(5)	Receiving and soliciting proposals from local school administrative units and charter schools for uses of the Fund for teacher compensation related directly to improving student academic outcomes in cooperation with the nonprofit corporation that the Committee enters into a cooperative agreement with under subsection (g) of this section.
(6)	Any other duties deemed necessary by the Committee regarding the Fund.
(f)	Committee Consultation with a Nonprofit Corporation. – In making the recommendations as required by subdivision (e)(2) of this section, the Committee shall consider the amounts collected by a North Carolina nonprofit corporation that meets the criteria set forth in subsection (g) of this section. The terms of the cooperative agreement between the Committee and the nonprofit corporation shall be as agreed upon by the parties in a manner not inconsistent with this section or other applicable law. The cooperative agreement does not require consideration to be effective.
(g)	Cooperative Agreement with a Nonprofit Corporation. – The Committee shall enter into a cooperative agreement with a nonprofit corporation to administer the provisions of G.S. 115C‑472.18. A nonprofit corporation entering into a cooperative agreement with the Committee shall adhere to the following governance provisions:
(1)	The nonprofit corporation shall be a nonprofit corporation organized pursuant to Chapter 55A of the General Statutes and shall comply at all times with the provisions of section 501(c)(3) of the Internal Revenue Code.
(2)	The board of the nonprofit corporation shall be comprised of 13 members, which shall be appointed as follows:
a.	Three members appointed by the Governor, one of whom shall be appointed chair of the board of the nonprofit corporation.
b.	Three members appointed by the Speaker of the House of Representatives.
c.	Three members appointed by the President Pro Tempore of the Senate.
d.	One member appointed by the Lieutenant Governor.
e.	One member appointed by the Superintendent of Public Instruction.
f.	One member appointed by the State Treasurer.
g.	One member appointed by the State Board of Education.
(3)	The nonprofit corporation shall comply with the limitations on lobbying set forth in section 501(c)(3) of the Internal Revenue Code.
(4)	No State officer or employee may serve on the board of the nonprofit corporation.
(5)	The board of the nonprofit corporation shall meet at least quarterly at the call of its chair.
(6)	The nonprofit corporation shall have the following duties if it enters into a cooperative agreement with the Committee:
a.	Provide assistance and recommendations to the Committee on its duties.
b.	Assist the Committee in raising funds for the Fund from corporate and individual donors.
c.	Provide a financial report of the nonprofit corporation to the Committee.
(h)	State Funds for the Nonprofit Corporation. – The amount of State funds that may be used for the annual salary of any one officer or employee of the nonprofit corporation entering into a cooperative agreement with the Committee shall not exceed the greater of (i) one hundred twenty thousand dollars ($120,000) or (ii) the amount most recently set by the General Assembly in a Current Operations and Capital Improvement Appropriations Act. State funds may only be used by the nonprofit corporation that are appropriated by the General Assembly for that purpose.
(i)	Applicable Laws. – The nonprofit corporation with which the Committee enters into a cooperative agreement pursuant to this section is subject to the requirements of (i) Chapter 132 of the General Statutes and (ii) Article 33C of Chapter 143 of the General Statutes. Officers, employees, and members of the governing board of the nonprofit corporation shall be considered public servants, as defined in G.S. 138A‑3, and are subject to the requirements of Chapter 138A of the General Statutes. Officers, members of the governing board, and employees of the nonprofit corporation whose annual compensation is equal to or greater than sixty thousand dollars ($60,000) are subject to the provisions of G.S. 138A‑22. The Committee is subject to (i) Chapter 132 of the General Statutes and (ii) Article 33C of Chapter 143 of the General Statutes.
(j)	Benefits. – An officer, employee, or member of a governing board of a nonprofit corporation that enters into a cooperative agreement with the Committee pursuant to this section is not a State employee, is not covered by Chapter 126 of the General Statutes, and is not entitled to State‑funded employee benefits, including membership in the Teachers' and State Employees' Retirement System and the State Health Plan for Teachers and State Employees.
"§ 115C‑472.18.  Procedure for Appropriation Requests from the North Carolina Education Endowment Fund.
(a)	Requests for Nominations or Recruitment Funds. – No later than August 15 of each calendar year, the nonprofit corporation that enters into a cooperative agreement with the North Carolina Education Endowment Committee pursuant to G.S. 115C‑472.17 shall submit a request to each local school administrative unit and charter school operating in the State for nominations of teachers for appropriations of bonuses or supplemental pay from the North Carolina Education Endowment Fund. The nonprofit corporation shall also submit a request to each local school administrative unit operating in the State for requests for recruitment funds for the recruiting of specific teaching positions needed in the schools of that unit or charter school.
(b)	Submission of Nominations or Requests for Recruitment Funds. – Beginning in 2015, no later than October 31 of each calendar year, local school administrative units and charter schools shall submit to the nonprofit corporation any nominations or requests for recruitment funds as provided for in subsection (a) of this section.
(c)	Limitation on Nominations. – No local school administrative unit may submit nominations as described in subsection (a) of this section for more than 15 teachers employed in the local school administrative unit or ten percent (10%) of the teachers employed in the local school administrative unit, whichever is less. No charter school may submit nominations for more than two teachers employed by the charter school.
(d)	Format of Nominations and Requests for Recruitment Funds – The format of the nominations and requests for recruitment funds shall be in the format provided by the nonprofit corporation. Such format shall include at least the name of the local school administrative unit or charter school making the nomination or recruitment request, the name of the teacher nominated or a description of the position for which recruitment funds are requested, and a narrative description of how the teacher has increased student performance or how the recruitment of a new teacher would increase student performance.
(e)	Beginning in 2016, no later than January 31 of each calendar year, the nonprofit corporation shall submit a report containing recommendations on appropriations from the Fund for use by local school administrative units and charter schools to the Committee.
(f)	Beginning in 2016, no later than March 31 of each calendar year, the Committee shall review the nonprofit corporation's report and make its recommendations for appropriations from the Fund to the Senate Appropriations Committee on Education/Higher Education and the House Appropriations Committee on Education.
"§ 115C‑472.19.  Requirement of local matching funds.
For all appropriations awarded to local school administrative units and charter schools from the North Carolina Education Endowment Fund by the General Assembly, each local school administrative unit or charter school receiving funds shall match the appropriation for the teacher bonus, supplemental pay, or recruitment request according to the following:
(1)	For local school administrative units and charter schools located in tier 1 counties as defined in G.S. 143B‑437.08 for the year immediately preceding the appropriation, the matching funds shall be in an amount equal to ten percent (10%) of the amount of funds awarded to the unit or charter school.
(2)	For local school administrative units and charter schools located in tier 2 counties as defined in G.S. 143B‑437.08 for the year immediately preceding the appropriation, the matching funds shall be in amount equal to twenty‑five percent (25%) of the amount of funds awarded to the unit or charter school.
(3)	For local school administrative units and charter schools located in tier 3 counties as defined in G.S. 143B‑437.08 for the year immediately preceding the appropriation, the matching funds shall be in an amount equal to forty percent (40%) of the amount of funds awarded to the unit or charter school.
"§ 115C‑472.20.  Manner of payment to teachers.
Teacher bonuses or salary supplements paid from an appropriation from the North Carolina Education Endowment Fund shall be paid separately from any other compensation received by the teacher and the teacher shall be notified that the bonus or supplement was paid from the North Carolina Education Endowment Fund by an appropriation of the General Assembly and the applicable matching funds by the local school administrative unit or charter school in accordance with G.S. 115C‑472.19."
SECTION 2.  This act is effective when it becomes law.