By John Trump
Carolina Journal News Service

RALEIGH — The state Senate’s main education committee has endorsed a bill that would penalize N.C. school systems for late payments to charter schools.

An amended version of House Bill 335 advanced through the Education/Higher Education Committee Wednesday. It previously cleared the House with a 117-2 vote.

“The name of the bill is Timely Local Payments to Charter Schools,” said Rep. John Bradford, R-Mecklenburg, the measure’s primary sponsor. “Current law requires [local education agencies] to transfer funds to charters within 30 days, and they need to do so on a timely basis.”

“I will tell you a lot of the LEAs do it, and there are some LEAs that are slower than others,” Bradford added. “While I don’t suggest that they’re intentionally punitive by any means, I will say sometimes you need a good incentive to make sure that they’re getting those payments over to charters. That’s exactly what this bill does.”

The original version of the bill would have assessed an 8% penalty on local school systems for late payments. Late payments also could be subjected to interest. An amendment in the House dropped the penalty to 5%.

Senators adopted their own amendment in committee. It would add a “notice and cure” provision. That would give school systems an additional 15 days to make payments before facing late fees and interest, said Sen. Michael Lee, R-New Hanover.

“To the extent that there’s a dispute as to how much is owed, that will not be assessed the fee,” Lee added.

“It’s noteworthy that this bill has been agreed to by both the N.C. School Boards Association and the N.C. Coalition of Charter Schools,” Bradford said. “That friendly amendment covered any open issues.”

Only Sen. Gladys Robinson, D-Guilford, questioned the bill in committee. She wanted to know what money school systems would be allowed to use to pay penalties and interest. Legislative staff responded that the payments likely would come from school systems’ local current expense funds. But the school districts could use any unencumbered funds.

“The greatest way not to have to pay a penalty is to pay it on time,” Bradford said.

Robinson also questioned how quickly state government is forwarding money to local school systems.

“I want to make sure that we are making sure LEAs have the funds that they need in order for them to transfer allotments on to charters,” she said. “We don’t want to rob one to pay the other one, and then neither one has any money.”

Bradford said H.B. 335 takes that issue into account. The 30-day timeline for paying charter schools starts only after local school systems have received money for local expenses, he said.

The bill heads next to the Senate Rules Committee. If the full Senate approves the measure, it would return to the House.

Bradford and his colleagues would decide whether to accept the Senate’s changes. If so, the measure would head to Gov. Roy Cooper.