Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 22.1-199.8 as follows:

§22.1-199.8. Certain public elementary and secondary schools; alternative supervision.

A. As used in this section:

"Operating entity" means any not-for-profit entity that enters into an operating contract with a school board pursuant to subsection B.

"Qualified school" means a public elementary or secondary school (i) in which at least 50 percent of enrolled students are eligible for free or reduced price lunch and (ii) that is under the supervision of an operating entity pursuant to an operating contract.

"Qualified services" means services that contribute to a clean and safe environment for in-person instruction in a qualified school during a pandemic or nutritional support, after-school academic and mentorship services, health care support by licensed nurse practitioners or doctors, and dental care by dental hygienists or dentists made available to each student enrolled in a qualified school.

B. Any school board may enter into an operating contract with an operating entity that:

1. Provides the authority to supervise a qualified school to the operating entity, including its authority relating to personnel and curriculum, for an initial period of at least two years, provided, however, that the qualified school shall be subject to all federal and state accountability requirements prescribed by law or regulation;

2. Requires the operating entity to provide qualified services;

3. Permits the operating entity to seek reimbursement under Medicaid for all qualified services provided to eligible students;

4. Requires the operating entity to establish performance metrics for the qualified school and biannually report to the school board on its compliance with such metrics; and

5. Requires the supervision of the qualified school to be transferred back to the school board if the operating entity breaches the operating contract or fails to meet the performance metrics established in the operating contract.

C. Any operating contract entered into pursuant to subsection B may contain provisions for the use of local school division services for the qualified school, including transportation, food services, and extracurricular activities.

D. Each operating entity is entitled, in addition to any other state or local funds that it receives from the school board in support of the qualified school, to matching state funds pursuant to the general appropriation act in an amount equal to 25 percent of all funds that the operating entity invests to provide qualified services in the qualified school.

E. Notwithstanding any other provision of law to the contrary, no operating entity that receives state funds in accordance with subsection D is eligible to receive a Neighborhood Assistance Act Tax Credit pursuant to Article 13.2 (§58.1-439.18 et seq.) of Chapter 3 of Title 58.1.