GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	1 

SENATE BILL 1551

Short Title:  Charter School Benefits.	(Public)

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Sponsors: Senator Gulley.

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Referred to:  Finance.

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June 1, 1998

A BILL TO BE ENTITLED
AN ACT TO GIVE CHARTER SCHOOLS THE SAME HIGHWAY USE TAX EXEMPTION AND MOTOR FUEL TAX EXEMPTION AS PUBLIC SCHOOLS, TO ALLOW CHARTER SCHOOLS TO ELECT TO PARTICIPATE IN THE NORTH CAROLINA TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, IN THE NORTH CAROLINA TEACHERS' AND STATE EMPLOYEES' MAJOR MEDICAL COMPREHENSIVE PLAN, OR BOTH, AND TO ESTABLISH A MEDIATION PROCESS BETWEEN CHARTER SCHOOLS AND LOCAL BOARDS OF EDUCATION.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-228.90(b) reads as rewritten:
"(b)	Definitions. – The following definitions apply in this Article:
(1)	Reserved.
(2)	Charter school board. – A nonprofit corporation that has a charter under G.S. 115D-238.29D to operate a charter school.
(3)  	City. – A city as defined by G.S. 160A-1(2). The term also includes an urban service district defined by the governing board of a consolidated city-county, as defined by G.S. 160B-2(1).
(4)	Code. – The Internal Revenue Code as enacted as of January 1, 1997, including any provisions enacted as of that date which become effective either before or after that date.
(5)	County. – Any one of the counties listed in G.S. 153A-10. The term also includes a consolidated city-county as defined by G.S. 160B-2(1).
(6)	Reserved. 
(7)	Electronic Funds Transfer. – A transfer of funds initiated by using an electronic terminal, a telephone, a computer, or magnetic tape to instruct or authorize a financial institution or its agent to credit or debit an account.
(8)	Reserved.
(9)	Person. – An individual, a fiduciary, a firm, an association, a partnership, a limited liability company, a corporation, a unit of government, or another group acting as a unit. The term includes an officer or employee of a corporation, a member, a manager, or an employee of a limited liability company, and a member or employee of a partnership who, as officer, employee, member, or manager, is under a duty to perform an act in meeting the requirements of Subchapter I, V, or VIII of this Chapter or of Article 3 of Chapter 119 of the General Statutes.
(10)	Secretary. – The Secretary of Revenue.
(11)	Tax. – A tax levied under Subchapter I, V, or VIII of this Chapter or an inspection tax levied under Article 3 of Chapter 119 of the General Statutes. Unless the context clearly requires otherwise, the terms "tax" and "additional tax" include penalties and interest as well as the principal amount.
(12)	Taxpayer. – A person subject to the tax or reporting requirements of Subchapter I, V, or VIII of this Chapter or of Article 3 of Chapter 119 of the General Statutes."
Section 2.  G.S. 105-187.6(a) reads as rewritten:
"(a)	Full Exemptions. – The tax imposed by this Article does not apply when a certificate of title is issued as the result of a transfer of a motor vehicle:
(1)	To the insurer of the motor vehicle under G.S. 20-109.1 because the vehicle is a salvage vehicle.
(2)	To either a manufacturer, as defined in G.S. 20-286, or a motor vehicle retailer for the purpose of resale.
(3)	To the same owner to reflect a change or correction in the owner's name.
(4)	By will or intestacy.
(5)	By a gift between a husband and wife, a parent and child, or a stepparent and a stepchild.
(6)	By a distribution of marital property as a result of a divorce.
(7)	To a handicapped person from the Department of Health and Human Services after the vehicle has been equipped by the Department for use by the handicapped.
(8)	To a local board of education or a charter school board for use in the driver education program of a public school or a charter school when the motor vehicle is transferred:
a.	By a retailer and is to be transferred back to the retailer within 300 days after the transfer to the board.
b.	By a local board of education or a charter school board."
Section 3.  G.S. 105-449.88 reads as rewritten:
"§ 105-449.88.  Exemptions from the excise tax.
The excise tax on motor fuel does not apply to the following:
(1)	Motor fuel removed, by transport truck or another means of transfer outside the terminal transfer system, from a terminal for export, if the supplier of the motor fuel collects tax on it at the rate of the motor fuel's destination state.
(2)	Motor fuel sold to the federal government.
(3)	Motor fuel sold to the State for its use.
(4)	Motor fuel sold to a local board of education for use in the public school system. 
(5)	Motor fuel sold to a charter school board for use for charter school purposes."
Section 4.   G.S. 115C-238.29B(b) is amended by adding the following new subdivision to read:
"(14)	A statement as to whether the school will elect to join the North Carolina Teachers' and State Employees' Retirement System under G.S. 138-5.3, the Teachers' and State Employees' Comprehensive Major Medical Plan under G.S. 135-40.3A, or both."
Section 5.  G.S. 115C-238.29F(e)(4) reads as rewritten:
"(4)	The employees of the charter school shall be deemed employees of the local school administrative unit for purposes of providing certain State-funded employee benefits, including membership in the Teachers' and State Employees' Retirement System and the Teachers' and State Employees' Comprehensive Major Medical Plan. The State Board of Education provides funds to charter schools, approves the original members of the boards of directors of the charter schools, has the authority to grant, supervise, and revoke charters, and demands full accountability from charter schools for school finances and student performance. Accordingly, it is the determination of the General Assembly that charter schools are public schools and that the employees of charter schools are public school employees.  Employees of charter schools that elect to join under G.S. 138-5.3 are 'teachers' for the purpose of membership in the North Carolina Teachers' and State Employees' Retirement System.  Employees of charter schools that elect to join under G.S. 135-40.3A are 'teachers' for the purpose of membership in the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan. In no event shall anything contained in this Part require the North Carolina Teachers' and State Employees' Retirement System to accept employees of a private employer as members or participants of the System."
Section 6.  Article 1 of Chapter 135 of the General Statutes is amended by adding the following new section:
"§ 135-5.3.  Optional participation for charter schools.
(a)	The board of directors of each charter school shall elect to join the Retirement System in accordance with the laws applicable to that System. This election shall be in writing, shall be made no later than September 1, 1998, and shall be filed with the Retirement System and with the State Board of Education.  This election is effective as of the date the board makes the election for each charter school employee who is employed on or before the date the board makes the election.  The election is effective as of the date of entry into eligible service for each charter school employee who is employed after the date the board makes the election.  This subsection applies only to charter schools that received State Board of Education approval under G.S. 115C-238.29D in 1997 or 1998.
(b)	No later than 30 days after both parties have signed the written charter under G.S. 115C-238.29E, the board of directors of a charter school shall elect to join the Retirement System in accordance with the laws applicable to that System.  This election shall be in writing and filed with the Retirement System and with the State Board of Education and is effective for each charter school employee as of the date of entry into eligible service.  This subsection applies to charter schools that receive State Board of Education approval under G.S. 115C-238.29D after 1998.
(c)	A board's election to join the Retirement System under this section is irrevocable and shall require all employees of the charter school to participate.
(d)	No retirement benefit, death benefit, or other benefit under the Retirement System shall be paid by the State of North Carolina or the Board of Trustees of the Teachers' and State Employees' Retirement System with respect to any employee of a charter school whose board does not elect to join the Retirement System under this section or with respect to any beneficiary of that employee.
(e)	The board of directors of each charter school shall notify each of its employees as to whether the board elected to join the Retirement System under this section.  This notification shall be in writing and shall be provided within 30 days of the board's election or at the time an initial offer for employment is made, whichever occurs last.  If the board did not elect to join the Retirement System, the notice shall include a statement that the employee shall have no legal recourse against the board or the State for any possible credit or reimbursement under the Retirement System.  The employee shall provide written acknowledgment of the employee's receipt of the notification under this subsection."
Section 7.  G.S. 135-4 is amended by adding the following new subsection to read:
"( bb)	Credit for Employment in Charter School. – Notwithstanding any other provision of this Chapter, any member in service with five or more years of credited membership service may purchase creditable service for periods of employment in a charter school that did not elect to participate in the Retirement System under G.S. 135-5.3.  The member shall purchase this service by making a lump sum payment together with interest and an administrative fee for such service, to the Retirement System of an amount equal to what the member would have contributed had the board of directors of the charter school elected under G.S. 135-5.3 to participate in the Retirement System."
Section 8.  G.S. 135-40.1(6) reads as rewritten:
"(6)	Employing Unit. – A North Carolina School System; Community College; State Department, Agency or Institution; Administrative Office of the Courts; or Association or Examining Board whose employees are eligible for membership in a State-Supported Retirement System. An employing unit also shall mean a charter school in accordance with Part 6A of Chapter 115C of the General Statutes whose board of directors elects to join the Plan under G.S. 135-40.3A."
Section 9.  Part 3 of Article 3 of Chapter 135 is amended by adding the following new section:
"§ 135-40.3A. Optional participation for charter schools.
(a)	The board of directors of each charter school shall elect to join the Plan in accordance with the laws applicable to that Plan. This election shall be in writing, shall be made no later than September 1, 1998, and shall be filed with the Executive Administrator and Board of Trustees and with the State Board of Education.  This election is effective as of the date the board makes the election for each charter school employee who is employed on or before the date the board makes the election.  The election is effective as of the date of entry into eligible service for each charter school employee who is employed after the date the board makes the election.  This subsection applies only to charter schools that received State Board of Education approval under G.S. 115C-238.29D in 1997 or 1998.
(b)	No later than 30 days after both parties have signed the written charter under G.S. 115C-238.29E, the board of directors of a charter school shall elect to join the Plan in accordance with the laws applicable to that Plan.  This election shall be in writing and filed with the Executive Administrator and Board of Trustees and with the State Board of Education and is effective for each charter school employee as of the date of entry into eligible service.  This subsection applies to charter schools that receive State Board of Education approval under G.S. 115C-238.29D after 1998.
(c)	A board's election to join the Plan under this section is irrevocable and shall require all employees of the charter school to participate.
(d)	If a charter school fails to elect to join the Plan under this section, that school's employees and the dependents of those employees shall not be eligible for any benefits under the Plan.
(e)	The board of directors of each charter school shall notify each of its employees as to whether the board elected to join the Plan under this section.  This notification shall be in writing and shall be provided within 30 days of the board's election or at the time an initial offer for employment is made, whichever occurs last.  If the board did not elect to join the Plan, the notice shall include a statement that the employee shall have no legal recourse against the board or the State for any possible benefit under the Plan.  The employee shall provide written acknowledgment of the employee's receipt of the notification under this subsection."
Section 10. G.S. 115C-238.29G reads as rewritten:
"§ 115C-238.29G.  Causes for nonrenewal or termination; disputes.
(a)	The State Board of Education, or a chartering entity subject to the approval of the State Board of Education, may terminate or not renew a charter upon any of the following grounds:
(1)	Failure to meet the requirements for student performance contained in the charter;
(2)	Failure to meet generally accepted standards of fiscal management;
(3)	Violations of law;
(4)	Material violation of any of the conditions, standards, or procedures set forth in the charter;
(5)	Two-thirds of the faculty and instructional support personnel at the school request that the charter be terminated or not renewed; or
(6)	Other good cause identified.
(b)	The State Board of Education shall develop and implement a process to address contractual and other grievances between a charter school and the entity to which the charter school is accountable  during the time of its charter.
(c)	The State Board and the charter school are encouraged to make a good-faith attempt to resolve the differences that may arise between them. Furthermore, the local board of the local school administrative unit in which the charter school is located and the charter school are encouraged to make a good-faith attempt to resolve any differences that may arise between them.  The parties in dispute may agree to jointly select a mediator. The mediator shall act as a neutral facilitator of disclosures of factual information, statements of positions and contentions, and efforts to negotiate an agreement settling the differences. The mediator shall, at the request of either party, commence a mediation immediately or within a reasonable period of time. The mediation shall be held in accordance with rules and standards of conduct adopted under Chapter 7A of the General Statutes governing mediated settlement conferences but modified as appropriate and suitable to the resolution of the particular issues in disagreement.
Notwithstanding Article 33C of Chapter 143 of the General Statutes, the mediation proceedings shall be conducted in private. Evidence of statements made and conduct occurring in a mediation are not subject to discovery and are inadmissible in any court action. However, no evidence otherwise discoverable is inadmissible merely because it is presented or discussed in a mediation. The mediator shall not be compelled to testify or produce evidence concerning statements made and conduct occurring in a mediation in any civil proceeding for any purpose, except disciplinary hearings before the State Bar or any agency established to enforce standards of conduct for mediators. The mediator may determine that an impasse exists and discontinue the mediation at any time. The mediator shall not make any recommendations or public statement of findings or conclusions. The parties in dispute shall share equally the mediator's compensation and expenses. The mediator's compensation shall be determined according to rules adopted under Chapter 7A of the General Statutes."
Section 11.  Sections 1 through 3 of this act become effective October 1, 1998.  The remainder of this act becomes effective July 1, 1998.