The 1990s have seen enormous changes in public school law. The General Assembly has acted on a wide range of issues, including a statewide school accountability program, administrator contracts, teacher tenure and dismissal, student discipline, funds for facilities and technology, authority and flexibility for local school units and individual schools, and charter schools.

In 1998 the General Assembly seemed willing to catch its breath and focus on amending programs already in place. Instead of adopting any major new reform effort, the General Assembly modified the accountability program, the discipline statutes, and the state's testing program, among others. This year, legislation with a significant impact on local school boards often was in areas not directly tied to school personnel, curriculum, or student issues. Examples include eligibility for sales tax refunds for school administrative units, changes in the driving while impaired (DWI) and purchasing statutes, and recodification of the Juvenile Code.

The School-Based Management and Accountability Act, Article 8B of G.S. Chapter 115C, seeks to improve student learning and achievement. Although the ABCs of Public Education program (the ABCs) is not named in the act, its principles of accountability, focus on basic subjects, and local control are incorporated in it. The ABCs focuses on individual schools and the growth in each school's student performance as measured by annual standardized tests. The State Board of Education sets annual performance standards for each school and then classifies schools annually based on how well an individual school meets the state-defined expected growth in school performance. In schools in which students perform sufficiently well above expectations that the school meets a level of high performance set by the board, school staff receive bonuses. Schools in which student performance is well below expectations may receive special assistance and intervention.

As part of the ABCs, the State Board of Education was authorized to provide incentive funding for schools that meet or exceed the projected levels of improvement in student performance. Section 9.2 of S.L. 1998-212 (S 1366) requires the State Board of Education to provide this incentive funding and removes from the law a specific amount of money for bonuses.

As part of its school improvement and accountability efforts, the State Board of Education identifies certain schools as "low-performing" schools and some schools as "at-risk" schools. Section 9.4 of S.L. 1998-212 specifies that funds appropriated for these schools must be used for services to elementary and middle schools at which 48 percent or more of the students were below grade level during the 1996-97 and 1997-98 school years or during the 1997-98 school year; the 5 percent of high schools that have the lowest composite scores on the ABCs accountability measures; and high schools the State Board of Education identifies as low-performing through the ABCs program. After consulting with the faculty and site-based management team, the principal of a school eligible for funds must develop a plan for spending them. The plan must be consistent with the local board's plan (G.S. 115C-105.37) and must include whole-staff training. The local school board must approve the plan before it is submitted to the State Board of Education, which must approve or reject the plan or delegate this responsibility to the State Superintendent of Public Instruction. If a plan is approved, the local school board will receive funds for both salary-related and nonsalary items.

S.L. 1998-131 (H 1477) applies the principles of the ABCs to the four residential schools operated by the Department of Health and Human Services (DHHS) for students who are sight-impaired or hearing-impaired. Under new Part 3A, Article 3, of G.S. Chapter 143B, the State Board of Education will establish performance standards for the schools, recognize the superintendent and instructional personnel in schools that achieve or exceed the expected level of growth (including financial recognition), identify low-performing schools, and assign assistance teams to low-performing schools. The Secretary of Health and Human Resources will also be empowered to identify low-performing schools and to assign assessment teams to low-performing schools without assistance teams.

An important element of the state's ongoing efforts to improve student learning is the use and development of appropriate tests to measure that learning. Section 9.15 of S.L. 1998-212 appropriates $2 million for the 1998-99 fiscal year to cover cost increases caused by enrollment and for the reestablishment and development of high school end-of-course tests and the development of alternative assessments for children with special needs.

The best time to begin giving students standardized tests is a subject of ongoing discussion and research. Section 9.12 of S.L. 1998-212 amends G.S. 115C-174.11(c)(1) to direct the State Board of Education to study whether a test in or at the end of second grade is more reliable than a test at the start of third grade for setting a baseline to measure academic growth at the end of third grade. The board may allow selected volunteer local school units to give a standardized test to second-graders in May, which is twelve months before the third grade end-of-grade test is given. If the State Board of Education determines that a test at the end of second grade is more reliable, the board may change the test date for additional school units. Baseline measurements of second-graders are not public records.

S.L. 1998-220 (S 1125) amends G.S. 115C-174.11(c) to provide that students who do not pass tests adopted for eighth grade must be given remedial instruction in the ninth grade. This assistance must be designed to prepare the students to pass the competency test administered in the ninth grade.

High school students have been required to participate in the Competency Testing Program beginning in the tenth grade. S.L. 1998-220 amends G.S. 115C-174.11(b) to provide that these tests must be given annually to ninth graders. Remedial efforts for students who do not meet the minimum standard for graduation will now begin in the ninth grade.

Everyone agrees that schools should be safe and orderly. In response, the General Assembly in recent years has made several significant changes to the statutes governing student suspension and expulsion. S.L. 1998-220 makes several additional changes to the suspension statutes.

• An amendment to G.S. 115C-391(d) permits the local school superintendent as well as the local board of education to suspend a student who brings a weapon onto school property for 365 days.
• G.S. 115C-391(d2) now makes the superintendent, not the local board of education, responsible for suspending or removing to an alternative educational setting a student who commits an assault under circumstances covered by this statute.
• G.S. 115C-391(e) now provides that a superintendent's decision under G.S. 115C-391(c) (suspension longer than ten days), 115C-391(d1)(suspension for bringing a weapon), or 115C-391(d2) (suspension or removal to an alternative educational setting for certain assaults) may be appealed to the local board of education. Expulsion [G.S. 115C-391(d)] remains a decision of the local board of education.
• Superintendents had been required to keep data on all students who were expelled or suspended. G.S. 115C-276(r) now provides that superintendents must keep data on students who are expelled or suspended for more than ten days.

Children with limited proficiency in English are enrolling in record numbers across the state. School boards vary greatly in their level of experience serving these students and in the number of these students in their schools. Section 9.20 of S.L. 1998-212 (S 1366) directs the State Board of Education to develop guidelines for identifying and serving these students. Section 9.20 also enacts provisions to assist school boards, including a review of certification requirements for English as a Second Language (ESL) teachers, consideration of new programs for in-service, noncertificate training for instructional personnel, and additional funding. The State Board of Education will allocate funds to school units and charter schools that enroll at least twenty students with limited English proficiency or to schools in which these students comprise at least 2.5 percent of the average daily membership of the school unit or charter school. These funds may not be used for other purposes.

Many students transfer from one school system to another every year. To appropriately place entering students, the new school needs to have the child's records from his or her former school. Unfortunately, student records have been withheld for a variety of reasons, including attempts to recover small amounts of money owed to the former school. For several years, G.S. 115C-403(b) has made the new school responsible for obtaining the child's record from the former school, but there was no corresponding obligation on the former school. S.L. 1998-220 (S 1125) deals with this problem by amending G.S. 115C-288 to provide that the former school's principal may not withhold the transfer of student records except as authorized by the federal Family Educational Rights and Privacy Act.

In 1997 the General Assembly amended G.S. 20-11 by adding a new requirement for minors seeking a limited learner's permit or a provisional driver's license. A minor must have a driving eligibility certificate or a high school diploma or its equivalent. Section 9.21 of S.L. 1998-212 (S 1366) amends G.S. 115C-566 to require the Secretary of Administration to issue rules describing how a person who is or was enrolled in an educational program found by a court, before July 1, 1998, to comply with the compulsory attendance law may obtain a driving eligibility certificate. These rules must state the requirements for the eligibility certificate. An amendment to G.S. 20-11(n), which sets out conditions that a driving eligibility certificate must meet, incorporates this change.

The Juvenile Justice Reform Act, S.L. 1998-202 (S 1260), is a complete rewrite of the Juvenile Code, which is now codified as G.S. Chapter 7B and which becomes effective July 1, 1999. Chapter 13 (Juvenile Law) explains all of these changes in detail. Several provisions that affect schools directly are discussed below.

New G.S. 7B-3100 permits the Office of Juvenile Justice, after consultation with the Conference of Chief District Court Judges, to adopt rules designating certain local agencies that are authorized to share information about juveniles. Upon request, these agencies must share with one another information they possess that is relevant to any case in which a petition is filed alleging that a juvenile is abused, neglected, dependent, undisciplined, or delinquent. This sharing of information must continue until the juvenile is no longer subject to the jurisdiction of juvenile court. Local school administrative units are among the agencies authorized to share information. Agencies may use this shared information only for the protection of the juvenile or others or to improve the educational opportunities of the juvenile and may release the information only in accordance with the federal Family Educational Rights and Privacy Act.

New G.S.7B-3101, which requires notification of school principals in certain circumstances involving juveniles, does not change the law specifying when schools will receive notice. It simply recodifies former law (G.S. 7A-675.2) and directs principals to handle any notification in accordance with G.S. 115C-404, as amended by S.L. 1998-202. The principal must destroy documents received in accordance with G.S. 7B-3101 when the principal receives notification that the court has dismissed the petition, transferred jurisdiction over the student to superior court, or granted the student's petition for expunction of the records. The principal must destroy all information gained from examination of juvenile records in accordance with G.S. 7B-3101 when the principal finds that the school no longer needs the information to protect the safety of or improve educational opportunities for the student or others. If the student graduates, withdraws from school, is suspended for the remainder of the school year, is expelled, or transfers to another school, the principal must return all remaining documents to the juvenile court counselor. Information gained by the school in accordance with G.S. 7B-3101 may not be the sole basis for a decision to suspend or expel a student.

G.S. 7B-1301 requires the State Board of Education, through the Department of Public Instruction, to implement the Program on Prevention of Abuse and Neglect. The board must contract with public or private nonprofit organizations, agencies, schools, or individuals to operate community-based educational and service programs designed to prevent abuse and neglect. The programs and services should impact juveniles and families before any substantiated incident of abuse or neglect has occurred. These programs may include community-based educational programs on prenatal care, perinatal bonding, child development, basic child care, care of children with special needs, and coping with family stress; community-based programs relating to crisis care; and support groups for families experiencing stress. Funding for the prevention programs will come from the Children's Trust Fund in the Department of State Treasurer. In addition, the State Board of Education must develop a state plan for the prevention of abuse and neglect for submission to the Governor, President of the Senate, and Speaker of the House of Representatives.

S.L. 1998-202 requires the State Board of Education to study the feasibility and advisability of delaying the start of the school day. If the board recommends starting school later in the morning, it must consider whether schools should provide early morning supervision for students whose parents work and do not have child care available.

The Juvenile Justice Reform Act, S.L. 1998-202, also requires the State Board of Education, through the Department of Public Instruction, to study ways to provide an alternative educational program for any student who is suspended or expelled from school. The study must include

• a review of safe school plans and alternative educational programs;
• an analysis of data on suspension and expulsions;
• an assessment of federal, state, local, and private resources available for alternative programs;
• research on other education programs offered by other state agencies;
• a review of the law relating to suspension and expulsion and the right to a public education;
• a recommended plan for offering all suspended and expelled students alternative programs;
• a review of policies and procedures for transporting aggressive or assaultive students with other students and development of a plan to insure the protection of all students from physical harm caused by aggressive or assaultive students.

The State Board of Education must report the results of its study to the Joint Legislative Education Oversight Committee by May 1, 1999.

All children need an education, but all children do not learn in the same way. Some students who have problems learning in a traditional public school classroom might do well in an alternative learning program. Other students who are disruptive in a regular class interfere with the learning opportunities of other students or may pose a threat to safety at school. Merely moving the problem from the school to the street by suspending or expelling disruptive students does not serve the student's or the state's long-term interest.

In recent years, an increasing number of school boards have developed alternative learning programs or alternative schools. Section 12 of S.L. 1998-202 (S 1260) amends G.S. 115C-47 to encourage local boards of education to establish these programs. If a board does establish alternative programs, it must also adopt guidelines for assigning students to them. These guidelines must include a description of the programs and services; a process for ensuring that an assignment is appropriate for the student and that the student's parents are involved in the decision; and strategies for providing alternative learning programs, when feasible and appropriate, for students subject to long-term suspension or expulsion. Local boards are also encouraged to consider guidelines developed by the State Board of Education. Once a local board has adopted guidelines, the board is encouraged to incorporate them in its safe schools plans.

G.S. 66-58, known as the Umstead Act, is designed to prohibit the government from competing with the private sector. It specifically prohibits any unit of government, including a local board of education, from providing transportation services in competition with private enterprise. Section 9.9 of S.L. 1998-212 amends G.S. 66-58(c) to allow "a nonprofit corporation or a unit of local government to use a public school activity bus to transport school-aged and preschool-aged children, their caretakers, and their instructors to or from activities being held on the property of a nonprofit corporation or a unit of local government." For example, the school board is authorized to lease an activity bus to the local YMCA to operate a vacation program for children at the Y. As owner of the bus, the school board must ensure that the lessee has adequate liability insurance to cover the use and operations of the leased bus and that anyone who drives the bus is licensed to operate the bus.

Cities and counties have long had the authority to use "quick take" in condemnation actions. Quick take allows the governmental entity to take immediate possession of the property being condemned once the entity has placed in escrow an amount that is estimated to be just compensation for the property. School boards now have that same option. Section 9.10 of S.L. 1998-212 amends G.S. 40A-42(a) to provide that when a local board of education is condemning property for any purpose in G.S. 115C-517, title to the property and the right to immediate possession of the property vest in the board of education after it files the complaint and makes a deposit in accordance with G.S. 115C-40A-41, unless the property owner has initiated an action for injunctive relief.

In 1997, major changes in the DWI laws required local school boards to take responsibility for the storage and sale of vehicles that were seized because of a driver's impaired driving. School boards found this responsibility to be costly and burdensome. The General Assembly addressed these problems by enacting S.L. 1998-182 (S 1336), as amended by S.L. 1998-217 (S 1279). Chapter 19 (Motor Vehicles) explains these changes in detail; the most significant allows the Department of Public Instruction to administer statewide or regional contracts for the towing, storage, and sale of seized vehicles. Changes that relate to contracting by local school administrative units in connection with the storage and sale of seized vehicles are also discussed in Chapter 21 (Public Purchasing and Contracting).

Several acts amend the purchasing and contracting statutes affecting local school boards. The new laws offer a new option for awarding school construction contracts and increase school flexibility in purchasing supplies and equipment. They are discussed in detail in Chapter 21 (Public Purchasing and Contracting).

G.S. 115C-12(18) requires the State Board of Education to develop and implement a Uniform Education Reporting System for local school administrative units. Section 9.23 of S.L. 1998-212 (S 1366) requires the State Board of Education to modify the current system to provide clear, accurate, and standard information on the use of funds at the unit and school level. Any new system must allow tracking of expenditures for personnel, textbooks, educational supplies and equipment, capital outlay, at-risk students, and other purposes. The revised system must be implemented in the 1999-2000 school year.

Schools collect an enormous amount of information about students. Because of new recording and reporting requirements and new technology, this is an appropriate time to reexamine the way schools collect and store information. Section 9.26 of S.L. 1998-212 directs the State Board of Education to begin developing a replacement for the existing student information system. The board must give priority to developing applications that maintain student records, maintain ABCs accountability data, allow the transfer of student records between local school units, and facilitate the transfer to transcripts to institutions of higher education.

The 1998 Appropriations Act, S.L. 1998-212 (S 1366), appropriates to the Department of Public Instruction $139,465,944 for 1998-99 in addition to the $4,493,184,418 appropriated in 1997 for 1998-99. Section 8.1 of S.L. 1998-212 establishes the Juvenile Justice Reserve Fund of over $17 million, $700,000 of which is allocated to the Department of Public Instruction for the Communities in Schools Program, a public-private partnership working with at-risk students. Section 9 of the 1998 Appropriations Act allocates funds from unexpended 1997-98 General Fund appropriations as follows: $17.1 million for school employees who qualified for performance bonuses for the 1997-98 school year under the ABCs program, $9.0 million for longevity payments, $24.2 million for school buses, and $4.7 million for the State School Technology Fund.

Section 9.27 of S.L. 1998-212 directs the State Board of Education to allocate funds appropriated for small school system supplemental funding according to the formula in this section. These funds must be used to supplement local current expense funds.

Article IX, Section 7, of the N.C. Constitution provides that the "clear proceeds of all penalties and forfeitures and of all fines collected in the several counties for any breach of the penal laws of the State, shall belong to and remain in the several counties, and shall be faithfully appropriated and used exclusively for maintaining free public schools." In Craven County Board of Education v. Boyles, 343 N.C. 87, 468 S.E.2d 50 (1996), the N. C. Supreme Court made it clear that this provision covers penalties paid to a state agency. In response, the General Assembly created the Civil Penalty and Forfeiture Fund, G.S. 115C-457.1 through 115C-457.3, in 1997. This fund consists of the clear proceeds of civil penalties and civil forfeitures that are collected by a state agency and are subject to Article IX, Section 7, of the state constitution and allocates these proceeds to local school units on the basis of average daily membership. S.L. 1998-215 (S 882) amends many civil penalty statutes to require named state agencies to deposit the clear proceeds of civil penalties and civil forfeitures into the fund. Apparently this act covers only those penalties that the State agrees are subject to Article IX, Section 7 of the constitution; the disposition of some remaining penalties is still under discussion.

Counties receive the proceeds of three separate local sales and use taxes: a one percent tax dating from the early 1970s, a one-half percent tax authorized in 1983, and a one-half percent tax authorized in 1986. Since their inception, counties have been required to earmark some of the proceeds from these taxes for school capital outlay. S.L. 1998-186 (S 1150) extends that earmarking. Now at least 30 percent of a county's proceeds from the 1983 tax must be used for school capital outlay for twenty-eight years after the tax was first enacted in that county. At least 60 percent of the 1986 tax must be used for school capital outlay for twenty-five years after that tax was first enacted in the county. Thus, the earmarking on these two taxes extends until at least 2011.

In the past, counties have been eligible for refunds of sales taxes paid by their contractors on county construction projects; school units have not been eligible for these refunds. School boards and counties had cooperated in order to take advantage of the county's eligibility. If the county was listed in G.S. 153A-158.1, a school unit in that county could convey property to the county, and the county would then construct the school building. Under these circumstances the Department of Revenue was willing to refund the sales taxes paid as part of the project.

This year the General Assembly eliminated the need for this indirect route to the sales tax refund. Section 29A.4 of S.L. 1998-212 amends G.S. 105-164.14 to include school administrative units among the entities eligible for sales tax refunds, and they will receive refunds on all their purchases, not just on those associated with construction projects. G.S. 153A-158.1 also allows named counties to finance school construction projects through installment financing. This statute must still be used for that purpose.

For many years, individual school principals have been required to design school bus routes, assign students to those routes, and identify employees who may ride the bus. Principals also were to coordinate bus routes when a bus was assigned to two or more schools. S.L. 1998-220 (S 1125) amends G.S. 115C-244 to transfer that responsibility to the superintendent or his or her designee. The superintendent or the superintendent's designee, not the principal, is responsible for assigning bus drivers and appointing bus monitors. Monitors serve at the pleasure of the superintendent or the superintendent's designee.

G.S. 143-300.1(a) authorizes the North Carolina Industrial Commission to hear tort claims against a local school board because of an accident involving a school bus or other school transportation service vehicle. This statute has long allowed claims based on an allegation of negligence on the part of maintenance personnel or the bus driver paid from the State Public School Fund. Section 9.17 of S.L. 1998-212 amends the statute to provide that a claim may be made when the driver is a school board employee and is paid or authorized to be paid by that board. Section 9.17 also allows claims of negligence by a transportation safety assistant employed and acting in accordance with G.S. 115C-245(e) or a bus monitor appointed and acting in accordance with G.S. 115C-245(d).

The Attorney General has the authority to defend civil actions brought against a driver, transportation safety assistant, monitor, or mechanic in conformity with G.S. 143-400.1(a). When a student is injured or killed while riding on, boarding, or alighting from a school bus operated by a local school unit, any claim for medical expenses is limited by G.S. 115C-257. Section 9.17 of S.L. 1998-212 (S 1366) amends G.S. 143-400.1(d) to raise the maximum amount of medical expenses the Attorney General may pay in response to a claim from $600 to $3,000.

S.L. 1998-133 (H 1478) directs the Department of Public Instruction to form a task force to identify barriers that prevent school systems from offering year-round schools for all grade levels and ways that local boards or the State Board of Education could minimize or remove those barriers.

Private postsecondary institutions have been able to have tax-exempt financing for facilities under G.S. Ch. 115E. S.L. 1998-124 (S 1556) extends the possibility of tax-exempt financing for facilities to private institutions for elementary and secondary education. To be eligible, a school must be "a nonprofit institution within North Carolina authorized by law and engaged or to be engaged in the providing of kindergarten, elementary, or secondary education, or any combination thereof."

In 1997, the General Assembly, in its passage of the Excellent Schools Act, made significant changes in all aspects of public school employment: teacher preparation, certification, performance evaluation, acquisition of tenure, employee demotions and suspensions, dismissal procedures, and salaries. In 1998, through a hodgepodge of session laws and special provisions in the 1998 Appropriations Act, the General Assembly modified some of 1997's innovations, such as the requirement of a general knowledge test for some teachers, and added some new elements, such as provisions for the employment of uncertified teachers.

How the 1997 Provisions Were to Be Applied. The School-Based Management and Accountability Program, enacted in 1996 and commonly known as the ABCs program, called for the classification of schools based on certain measures tied to student performance on particular standardized tests. Some schools, as a result of those measures, are classified as "low-performing." The State Board of Education assigns outside help in the form of assistance teams to some of the low-performing schools.

The 1997 Excellent Schools Act added new G.S. 115C-105.38A requiring, at the end of the 1997-98 school year, all certified staff members (with some exemptions for previously tested teachers) employed in a low-performing school to which an assistance team had been assigned to take a general knowledge test designed by the state board. A certified staff member who failed the test would be offered remediation (including, perhaps, leave with pay) and a chance to take the test again. Upon a second failure, the staff member would be offered further remediation and another chance to take the test. Upon a third failure, the staff member would be dismissed. The first of the general knowledge tests was to be administered at the end of the 1997-98 school year.

Changes in the 1998 Session. As the time approached for administration of the tests, the General Assembly responded to criticism that the administration of the test to employees in low-performing schools was unfair when there was no indication with respect to a particular employee's lack of general knowledge. S.L. 1998-5 (S 1126), enacted June 9, 1998, required that the assistance team assigned to a low-performing school review the evaluations of all certified staff members in the school who had been designated by the assistance team as "category 3 teachers" (meaning that they had received a certain low level of scores on their performance evaluations) and determine whether, for each such person, a lack of general knowledge contributed to the category 3 designation. If so, that person was required to take the test administered at the end of the 1997-98 school year.

S.L. 1998-5 provided further that for the 1998-99 school year and subsequent years, the procedure would be different. Either the principal assigned to a low-performing school or the assistance team assigned to the school may determine that a certified staff member's performance (whether category 3 or not) is impaired by the staff member's lack of general knowledge and may recommend to the state board that the staff member be tested. The state board must then administer the general knowledge test before the end of the fiscal year to all staff members so identified.

In two further changes, S.L. 1998-5 removed the exemption for previously tested teachers and provided that remediation would follow only the first failure of the test and that dismissal would follow the second. Teachers would not be allowed to take the test a third time.

In S.L. 1998-5 (S 1126), the General Assembly rewrote the statutes governing performance evaluations for certified employees in the public schools, repealing G.S. 115C-326 (which was the chief performance evaluation statute) and replacing it with new G.S. 115C-333 through 115C-335.

Teachers in Low-Performing Schools. New G.S. 115C-333(a) requires that local boards of education provide for the annual evaluation of all certified employees (not just teachers) in schools that have been classified as low-performing and for which no assistance team has been assigned by the state. For teachers, the evaluation will be performed by the school principal or the assistant principal who supervises the teacher, or the assessment team assigned to the school by the school board.

If a certified employee in a low-performing school receives a rating of "unsatisfactory" or "below standard" on any function of the evaluation that is related to the employee's instructional duties, the person or assessment team that conducted the evaluation must recommend to the superintendent either (1) that the employee receive an action plan designed to improve his or her performance or (2) that the superintendent recommend to the school board that the employee be dismissed or demoted. The superintendent chooses which.

If the decision is for an action plan, it is developed by the person who conducted the evaluation or the employee's supervisor, unless the evaluation was conducted by an assessment team, in which case the plan is developed by the team in cooperation with the supervisor. Action plans must be designed to be completed within ninety instructional days or by the beginning of the next school year.

Once the employee has completed the action plan, he or she will be evaluated a second time, by the superintendent, the superintendent's designee, or the assessment team. If on the second evaluation the employee receives one "unsatisfactory" or two "below standard" ratings on any function related to his or her instructional duties, the superintendent must recommend dismissal or demotion. The results of the second evaluation will constitute substantial evidence of the employee's inadequate performance within the meaning of the Teacher Tenure Act, G.S. 115C-325.

If a school is classified as low-performing, the state may assign an "assistance team" to the school. The consequences of the assignment of an assistance team were laid out in 1996 in the legislation putting the ABCs program into place. One consequence is that teachers whose performance evaluations are unsatisfactory may be dismissed from employment by the State Board of Education (rather than the local board of education).

But what about low-performing schools for which the state does not assign an assistance team? New G.S. 115C-334 directs local school boards to assign to such schools an "assessment team," with members trained in the proper administration of employee evaluations. (If service on the assessment team is an additional duty for an employee of a local school board, the board may pay the employee for the additional work.) The assessment team then conducts the performance evaluations of the certified employees in the low-performing schools and develops the action plans.

Teachers Not in Low-Performing Schools. Former G.S. 115C-326 required probationary teachers (that is, those teachers who have not acquired tenure or "career status") to be evaluated at least four times annually. Three of the evaluations were by a qualified school administrator or designee (with at least one by the administrator himself or herself) and one was by a teacher. Tenured ("career status") teachers were evaluated at least once annually, unless the local school board adopted a policy calling for evaluations more or less frequently.

New G.S. 115C-333(a) continues, with one change, these performance evaluation provisions for teachers who do not teach in low-performing schools. The new statute specifies that the three evaluations of a probationary teacher must be performed by a principal or the principal's designee (with at least one by a principal himself or herself).

The new statute also requires that local school boards adopt policies requiring action plans for certified employees who receive an "unsatisfactory" or "below standard" rating on a performance evaluation (unless, of course, the superintendent is recommending dismissal, demotion, or nonrenewal of the employee). The statute does not contain guidance regarding the contents of such a policy. For example, it does not specify a ninety-day completion provision like that specified in the statute for teachers in low-performing schools, nor does it require second evaluations, like that for teachers in low-performing schools. On the other hand, it does not prohibit such provisions.

Teachers and Superintendents of DHHS Schools. S.L. 1998-131 (H 1477) requires evaluations of certificated personnel in low-performing residential schools operated by the state Department of Health and Human Services (DHHS) for sight- and hearing-impaired students that are very similar to those required for teachers in low-performing public schools. They impose employment consequences for superintendents of low-performing DHHS schools that are very similar to those imposed on principals of low-performing public schools, and they impose employment consequences for certificated personnel that are very similar to those imposed on teachers in low-performing public schools (including the adoption of action plans).

Immunity from Liability Arising from Performance Evaluations. New G.S. 115C-333(c) provides that no board of education or employee of a board may be held liable for negligence arising out of any action taken or omission in connection with performance evaluations of employees. The immunity does not extend to gross negligence, wanton conduct, or intentional wrongdoing and may be waived by the purchase of liability insurance.

Evaluations of Some Superintendents. New G.S. 115C-333(f) requires a local board of education to conduct an evaluation of its superintendent if during a year the state board has designated as low-performing one or more schools in a unit with ten or fewer schools, two or more in a unit up to twenty schools, or three or more in a unit with more than twenty schools.

S.L. 1998-5 (S 1126) adds a new section, G.S. 115C-333(d), providing that if a board of education dismisses any employee (though it apparently intends to apply only to employees with instructional duties) for any reason other than a reduction in force, it must notify the State Board of Education and the state board must annually provide to all local boards the names of those individuals. If another local board hires one of these individuals, the superintendent (or designee) in the system that hires the employee must, within sixty days, observe the employee, develop an action plan for the employee, and submit the plan to the state board. The state board must review the plan and may provide comments and suggestions to the superintendent.

If on the next evaluation the employee receives at least a "satisfactory" rating on all functions related to the employee's instructional duties, the local board must notify the state board that the employee is in good standing and the state board will not continue to send the individual's name out to local boards. If, however, on that next evaluation the employee receives an "unsatisfactory" or "below standard" rating on any function that is related to the employee's instructional duties, the local board must notify the state board and the state board must revoke the employee's certificate [under newly-added G.S. 115C-296(d)].

S.L. 1998-131 (H 1477) authorizes computerized criminal history checks for applicants for employment in residential schools operated by the state DHHS for sight- and hearing-impaired students that are similar to those authorized for employees in the public schools.

The General Assembly in 1998 made several changes related to the employment of administrators in the public schools. The most significant concerned the employment consequences to principals whose schools are classified as low-performing.

Dismissal of Principals of Low-Performing Schools. As part of the enactment of the ABCs program in 1996, the General Assembly enacted G.S. 115C-105.39(a) and 115C-325(q)(1) providing for the dismissal of principals from low-performing schools. Under those provisions, as soon as a school was identified as low-performing and an assistance team was assigned by the state, the State Board of Education was required to suspend the principal of the school if he or she had been principal of the school for at least two years (and permitted the suspension of the principal if he or she had been there for less than two years). The statute then required, within sixty days, a hearing before a panel composed of three members of the state board to determine whether the principal should be dismissed. Unless the principal could establish at the hearing that the factors that led to the school's identification as low-performing did not include his or her inadequate performance, the panel was required to order the dismissal of the principal.

S.L. 1998-59 (S 1129) amends both G.S. 115C-105.39(a) and 115C-325(q)(1) to make several changes in this procedure for dismissal of principals from low-performing schools.

The 1996 provisions related only to schools which were both (1) identified by the state as low-performing and (2) assigned an assistance team by the state. As amended in 1998, G.S. 115C-105.39(a) and new G.S. 115C-105.37(a1) require local boards of education to identify low-performing schools themselves and makes the new principal dismissal procedures applicable to schools identified as low-performing by either the state or the local school board.

Under amended G.S. 115C-105.39(a), once a school is identified as low-performing, the superintendent has four options.

1. The superintendent may recommend that the principal be retained in position without remediation. That option is available only if the principal was in that position for no more than two years when the school was identified as low-performing.
2. The superintendent may recommend that the principal be retained in position with a plan of remediation.
3. The superintendent may recommend to the school board that the principal be transferred to another position. This option is available only if the transfer is to another principal position in a classification where the principal previously demonstrated two years of success, there is a plan to evaluate and provide remediation to the principal for at least a year after the transfer, the parents of the students at the new school are notified, and the new school is not a low-performing school.
4. The superintendent may proceed with the dismissal or demotion of the principal, as discussed in the next sections. The superintendent must notify the local board of his or her intent to recommend dismissal or demotion, and the local board must notify the state board.

If the superintendent decides to proceed with the dismissal or demotion of the principal, then there is no further state board involvement (whether or not the state eventually assigns an assistance team to the school) and the local board takes the action it deems appropriate with respect to the principal's demotion or dismissal. The statute does not specify the procedures that the local board must follow in such a case, but presumably the procedures applicable to the dismissal of a teacher under the Teacher Tenure Act apply.

If the superintendent has decided not to recommend the dismissal or demotion of the principal and the state assigns an assistance team to the school, the statute calls for a different procedure. The state board must review what action the local board has taken and vote to accept, reject, or modify it. If the state board rejects or modifies the local board's action but does not recommend dismissal of the principal, the local board may either implement the state board recommendations or demand a hearing by the state board, after which the state board will issue a final decision that is binding on the local board. If, on the other hand, the state board in rejecting or modifying the local board's action does determine that dismissal is appropriate, then the state board proceeds directly with dismissal under G.S. 115C-325(q)(1), as amended by S.L. 1998-59.

Under G.S. 115C-325(q)(1), as amended by S.L. 1998-59, there are three circumstances in which a principal of a low-performing school may be dismissed by the State Board of Education.

1. The state board or its designee may make a recommendation of dismissal before the assistance team assigned to the school has conducted an evaluation of the principal. In that case, the principal is suspended with pay and, within sixty days, a panel of three members of the state board conducts a hearing. After that hearing, the panel may order the dismissal of the principal if the panel determines that the low performance of the school is due to the principal's inadequate performance. The burden of proof is on the principal to establish that the factors leading to the school's low performance were not due to his or her inadequate performance.
2. The state board or its designee must make a recommendation of dismissal if it receives two consecutive evaluations by the assistance team "regarding the principal's inadequate performance." As in the first case, a panel of three members conducts a hearing. The panel must order dismissal of the principal if it determines that that the low performance of the school is due to the principal's inadequate performance. Once again, the burden is on the principal.
3. A panel may order dismissal if it determines that the school has not made satisfactory improvement after the assignment of the assistance team and the assistance team has made a recommendation to dismiss the principal for one or more grounds established by the Teacher Tenure Act, G.S. 115C-325, for the dismissal of career employees. In this third situation, the burden of proof at the hearing is on the state board to establish that the school failed to make satisfactory improvement and that one or more of the grounds for dismissal under the Teacher Tenure Act exist.

In all hearings, two consecutive evaluations that include written findings and recommendations regarding the principal's inadequate performance are substantial evidence of inadequate performance.

Timing of Administrator Term Contracts. G.S. 115C-287.1 provides that principals, assistant principals, supervisors, and directors (other than those who previously achieved tenure) are employed under contracts with a duration of two to four years, ending on June 30 of the final twelve months. S.L. 1998-220 (S 1125) amends the statute to provide that in the case of an initial contract the first year may be for less than twelve months if the contract became effective on or before September 1.

Administrator Certification. S.L. 1998-220 amends G.S. 115C-290.8 to provide that a person is exempted from taking the North Carolina Public School Administrator Exam if, in the five years preceding January 1, 1998, he or she obtained or renewed a North Carolina administrator/supervisor certificate. The act also directs the State Board of Education to adopt policies for the certification of individuals who hold administrator certificates issued in other states. S.L. 1998-16 (H 989) amends G.S. 115C-290.5 and 115C-290.7 to repeal the $150 fee for taking the administrator exam.

Section 9.29 of S.L. 1998-212 provides that for the 1998-99 school year, a school unit may employ a person who is not certified as an assistant principal in an assistant principal position if the person is a part-time student in an approved master's in school administration program and the employment is during the one-year internship in the program.

S.L. 1998-226 (S 1124) enacts a new statute, G.S. 115C-296.1, permitting a local board of education to employ as teachers individuals who do not meet the qualifications for initial or continuing certification if the board determines that there is or will be a shortage of qualified teachers with North Carolina certificates available to teach specified subjects or grade levels. Three categories of individuals may be employed under this provision. All of these persons must have at least a bachelor's degree and must be eligible for reemployment by their prior employers. For each person employed, the local board must (1) have a plan to determine the person's competence as a teacher, including a review of the performance of the students taught by the person, (2) provide a mentor teacher if the person does not have a year of classroom teaching experience, and (3) provide the observations and evaluations required by G.S. 115C-333. New G.S. 115C-296.1 expires September 1, 2002, but remains effective with respect to individuals employed under it before that date.

Individuals Licensed in Another State. A person who holds an out-of-state certificate authorizing him or her to teach the relevant grade or subject and who has at least one year of classroom teaching experience may be employed under this new provision. If such person is reemployed after a year, he or she is deemed to have satisfied the academic and professional preparation required to receive an initial or continuing North Carolina certificate and need not take the certification exam.

Individuals with One-Year Community College, College, or University Teaching Experience. A person with one year of classroom teaching experience in a North Carolina community college, college, or university may be employed under this new provision. If such a person passes the certification exam during the first year and is reemployed for a second year, he or she will receive an initial teacher certificate. Otherwise, the person upon reemployment is treated as a lateral entry teacher.

Other Individuals. A person with three years of other experience may be employed under this new provision, provided that the board determines that both the individual's experience and postsecondary education are relevant to the grade and subject to be taught. If such a person passes the certification exam during the first year and is reemployed for a second year, he or she will receive an initial teacher certificate. Otherwise, the person upon reemployment is treated as a lateral entry teacher.

Section 18 of S.L. 1998-220 (S 1125) directs the State Board of Education and the University of North Carolina (UNC) Board of Governors to develop a proposal for a statewide lateral entry teacher licensure program and to report the proposal to the Joint Legislative Education Oversight Committee by September 1, 1999.

S.L. 1998-167 (S 1594) enacts a new statute, G.S. 115C-296(a2), setting the following fees for teacher certification and administrative changes:

• application for demographic or administrative changes to a certificate, $30;
• application for a duplicate certificate or for copies of documents in the certification files, $30;
• application for a renewal, extension, addition, upgrade, or variation to a certificate, $55;
• initial application for a new, in-state approved program graduate, $55;
• initial application for out-of-state certificate, $85; and
• all other applications, $85.

Section 9.16 of S.L. 1998-212 (S 1366) amends G.S. 115C-12(8) to set the minimum pay for substitute teachers who hold teacher certificates at 65 percent of the daily rate of an entry-level teacher with an "A" certificate and at 50 percent for substitutes without such certificates. The new provision also provides (1) that local boards may use state funds allocated for substitute teachers to hire full-time substitute teachers and (2) that in no case may pay for a noncertificated substitute exceed pay for certificated substitutes.

Section 27 of S.L. 1998-182 enacts a new statute, G.S. 20-138.2B, making it a Class 3 misdemeanor for a person to operate a school bus after having consumed sufficient alcohol so that his or her blood alcohol concentration is greater than 0.00 percent (that is, any at all). This legislation is discussed in more detail in Chapter 19 (Motor Vehicles).

S.L. 1998-153 (S 879) revises the teacher salary schedule for 1998-99. The schedule for "A" certificate teachers ranges from $23,100 for first-year teachers employed on a ten-month basis to $41,820 for teachers with twenty-nine years of experience. For "G" certificate teachers, the corresponding figures are $24,540 and $44,430. Certification based on the six-year degree level results in salary that is $1,260 higher than the "G" compensation, and certification at the doctorate level results in salary that is $2,530 higher. The average salary increase for public school teachers is approximately 6.5 percent. The act also sets out salary schedules for principals and assistant principals and salary ranges for other administrators.

In addition, the General Assembly enacted several other salary-related provisions:

1. Noncertificated employees received a 3 percent pay raise.
2. Some public school employees received a one-time, 1 percent bonus.
3. The General Assembly allocated $17,118,003 to fulfill the state's obligations to public school employees who qualified for bonuses for 1997-98 under the ABCs program.
4. The legislature authorized continuation of a maximum payment of $1,100 for service as a mentor teacher.
5. School nurses were placed on the "G" salary schedule.
6. An ongoing principals' salary study was revised to include the issues of whether the current relationship between the teacher and principal salary schedules should be increased to a 3 percent differential and whether assistant principals should be given additional steps for years of experience.
7. Legislators authorized the deduction of dues for membership in certain employee organizations from the retirement benefits of retired teachers.
8. The State Board of Education was directed to evaluate the provision by local boards of lump-sum, 1 percent payments to principals and assistant principals in schools found by the boards to meet the goals of local plans for maintaining safe and orderly schools.

Section 9.18 of S.L. 1998-212 (S 1366) makes three changes related to school calendars and leave for school employees.

First, with respect to the 1998-99 school year only, S.L. 1998-212 provides $4.25 million to pay teachers who have accumulated the maximum vacation leave accumulation for vacation days forfeited because they were required to attend required workdays on days that would otherwise have been vacation days. For 1998-99, these funds are available for two days scheduled by local boards of education and for four days scheduled by the local principal.

Second, an amendment to G.S. 115C-84.2(c) (effective with the 1999-2000 school year) requires that local boards and principals must give teachers at least fourteen calendar days' notice before requiring a teacher to work instead of taking vacation leave on teacher workdays.

And third, an amendment to G.S. 115C-84.2(b) (effective with the 1999-2000 school year) increases from thirty to forty-two days the consecutive period when (in traditional summer break) teacher attendance is not required and provides that, at the request of the local school board or principal, a teacher may elect to work on one of those forty-two days in lieu of another scheduled workday.

The General Assembly, in section 9.14A of S.L. 1998-212, has provided that the board of directors of each charter school operated by a private nonprofit corporation must make an irrevocable decision of whether the charter school will participate in the North Carolina Retirement System for Teachers and State Employees and in the North Carolina Comprehensive Major Medical Plan. G.S. 135-5.3 and 135-40.3A. The board of directors must make separate decisions with respect to participation in the retirement system and participation in the medical plan within thirty days of signing its written charter. If the board chooses not to participate, the employees of the charter school will have no claim against the state retirement system or medical plan.