NC H638

Creates the Needs-Based Public School Capital Fund administered by the Superintendent of Public Instruction to award grants to counties in development tier one and two areas for critical school building capital needs, with priority given to tier one counties and those with greater need and less ability to generate tax revenue.

Establishes matching requirements for grant recipients: tier one counties must match $1 in state grants for every $2 provided, and tier two counties must match $1 for every $1; limits individual county grants to $10 million annually and total fund grants to $100 million annually.

Appropriates $75 million in recurring funds from the Education Lottery Fund to the Public School Capital Fund for fiscal year 2017-2018.

Increases the advertising cost limit for the North Carolina Education Lottery from 1% to 2% of total annual revenues and moves advertising costs from the 8% operational expense cap to a separate expense category.

Makes mandatory a Governor's transfer from the Education Lottery Reserve Fund to meet General Assembly appropriations when actual net revenues fall short of budgeted amounts.