In late 1996, the legislature passed a charter school law that requires charter schools to enroll at least 65 students and employ at least three teachers. All charter schools are required to be non-sectarian. Any individual, group, or nonprofit corporation may apply for a charter, and current public schools may convert to charter schools if the conversion has the support of a majority of the school's teachers and a significant number of parents. The number of charter schools is capped at five per district per year, with a maximum of 100 for the state, and each charter has a five-year term.
Funding is set at the per-pupil cost for the district in which the school is located.
A provision to allow public school teachers who teach in charter schools to retain their retirement benefits was approved in 1997. A 1998 survey of North Carolina business executives found that 77 percent strongly support the concept of charter schools and would like to see the state's charter school law broadened. The survey, conducted by the North Carolina Smart Schools Alliance, asked education-related questions of members of the largest statewide business organization, North Carolina Citizens for Business and Industry, and various local chambers of commerce throughout the state. About 72 percent of those surveyed said the state should consider a school successful if at least 90 percent of the students are performing at grade level. Although the state does not have a publicly sponsored private school choice program, several private programs offer parents more choice.