North Carolina House Bill 163, Treasury Administrative Changes — Proposed Committee Substitute H163-CSSH-6 [v.7] (2021)

Summary

House Bill 163, Proposed Committee Substitute H163-CSSH-6 [v.7], dated 3/8/2021, General Assembly of North Carolina, Session 2021 (4 pages). Its short title is Treasury Administrative Changes, and it was referred on March 1, 2021. The bill makes clarifying and administrative changes in Parts I to III: the State Treasurer's investment programs, including investment in Sudan and South Sudan and the repeal of Article 6D of Chapter 147; the Local Government Commission, including preaudit rules and its authority over the books of units of local government, with a provision for the Towns of Eureka and Spencer Mountain; and a report by the University of North Carolina Health Care System to the Governor instead of the Council of State. It is effective when it becomes law.

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“North Carolina House Bill 163, Treasury Administrative Changes — Proposed Committee Substitute H163-CSSH-6 [v.7] (2021).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2009-09-03-h163-cssh-6-v7-7d85f2be9e/, SHA-256 91b85b356ab1306f548c8ed5e88d15edd2d725061da86a6ffce7fb020785338f.

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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2021
H D
HOUSE BILL 163
PROPOSED COMMITTEE SUBSTITUTE H163-CSSH-6 [v.7]
3/8/2021 4:50:27 PM
Short Title: Treasury Administrative Changes.-AB (Public)
Sponsors:
Referred to:
March 1, 2021

1 A BILL TO BE ENTITLED
2 AN ACT MAKING CLARIFYING AND ADMINISTRATIVE CHANGES TO LAWS
3 RELATING TO THE STATE TREASURER'S INVESTMENT PROGRAMS, THE LOCAL
4 GOVERNMENT COMMISSION, AND REPORTS SUBMITTED TO THE COUNCIL OF
5 STATE.
6 The General Assembly of North Carolina enacts:
7
8 PART I. CLARIFYING AND ADMINISTRATIVE CHANGES TO LAWS RELATING
9 TO THE STATE TREASURER'S INVESTMENT PROGRAMS
10 SECTION 1.(a) G.S. 147-69.3 reads as rewritten:
11 "§ 147-69.3. Administration of State Treasurer's investment programs.
12 …
13 (i3) The Treasurer may invest in the countries of Sudan and South Sudan to the extent not
14 prohibited by the United States Government, or to the extent that such investment is part of an
15 index or index replication strategy, a commingled fund, limited partnership, or similar investment
16 vehicle, or a derivative instrument.
17 …."
18 SECTION 1.(b) G.S. 147-86.57 reads as rewritten:
19 "§ 147-86.57. Definitions.
20 As used in this Article:
21 …
22 (3) "Investment" means a commitment or contribution of funds or property,
23 whatever the source, a loan or other extension of credit, and the entry into or
24 renewal of a contract for goods or services. It does not include beneficial
25 ownership through index funds, or index replication strategies, commingled
26 funds, limited partnerships, or similar investment vehicles, or derivative
27 instruments, or the like.instruments.
28 …."
29 SECTION 1.(c) Article 6D of Chapter 147 of the General Statutes is repealed.
30
31 PART II. CLARIFYING AND ADMINISTRATIVE CHANGES TO LAWS RELATING
32 TO THE LOCAL GOVERNMENT COMMISSION
33 SECTION 2. G.S. 143-128.1C reads as rewritten:
34 "§ 143-128.1C. Public-private partnership construction contracts.
35 …

*H163-CSSH-6*
General Assembly Of North Carolina Session 2021
1 (b) If the governmental entity determines in writing that it has a critical need for a capital
2 improvement project, the governmental entity may acquire, construct, own, lease as lessor or
3 lessee, and operate or participate in the acquisition, construction, ownership, leasing, and
4 operation of a public-private project, or of specific facilities within such a project, including the
5 making of loans and grants from funds available to the governmental entity for these purposes.
6 If the governmental entity is a public body under Article 33C of this Chapter, the determination
7 shall occur during an open meeting of that public body. The governmental entity may enter into
8 development contracts with private developers with respect to acquiring, constructing, owning,
9 leasing, or operating a project under this section. If the development contract is entered into by a
10 governmental entity that is a unit of local government as defined in G.S. 159-7, and the unit must
11 finance all or part of its portion of the cost of the project, then the amount financed by the unit is
12 subject to approval by the Local Government Commission as provided in Chapter 159 of the
13 General Statutes. Approval must be secured prior to the execution of the development contract.
14 The development contract shall specify the following:
15 (1) The property interest of the governmental entity and all other participants in
16 the development of the project.
17 (2) The responsibilities of the governmental entity and all other participants in the
18 development of the project.
19 (3) The responsibilities of the governmental entity and all other participants with
20 respect to financing of the project.
21 (4) The responsibilities to put forth a good-faith effort to comply with
22 G.S. 143-128.2, G.S. 143-128.4, and to recruit and select small business
23 entities.
24 …."
25 SECTION 3. G.S. 159-28 reads as rewritten:
26 "§ 159-28. Budgetary accounting for appropriations.
27 …
28 (a3) Use of Automated System for Preaudit. – An automated financial computer system
29 may be used to meet the requirements of subsection (a1) of this section if an annual certification
30 is filed with the Secretary of the Commission pursuant to subsection (a4) of this section. The
31 provisions of this subsection do not apply to transactions exempted by statute from the preaudit
32 requirement. The automated computer system must have all of the following:
33 (1) Embedded functionality that determines that there is an appropriation to the
34 department, function code, or project in which the transaction appropriately
35 falls.
36 (2) Functionality ensuring that unencumbered funds remain in the appropriation
37 to pay out any amounts that are expected to come due during the budgeted
38 period.
39 (3) Real-time visibility to budget compliance, alert threshold notifications, and
40 rules-based compliance measures and enforcement.
41 (a4) Annual Certification of Automated Preaudit System. – When an automated financial
42 computer system is used to meet the requirements of subsection (a1) of this section, the finance
43 officer shall certify to the Secretary of the Commission no later than 30 days after the start of the
44 unit's or public authority's fiscal year that the automated financial computer system meets all the
45 requirements of subsection (a3) of this section. The Secretary may reject or revoke the finance
46 officer's certification if the annual audit for the unit's or public authority's immediately preceding
47 fiscal year includes a finding of budgetary noncompliance or if the Secretary determines that the
48 automated financial computer system fails to meet the requirements of subsection (a3) of this
49 section.
50 …."
51 SECTION 4.(a) G.S. 159-181 reads as rewritten:

Page 2 House Bill 163 H163-CSSH-6 [v.7]
General Assembly Of North Carolina Session 2021
1 "§ 159-181. Enforcement of Chapter.
2 …
3 (c) The Local Government Commission shall have authority to impound the books and
4 records of any unit of local government or public authority and assume full control of all its
5 financial affairs (i) when the unit or authority defaults on any debt service payment or, in the
6 opinion of the Commission, will default on a future debt service payment if the financial policies
7 and practices of the unit or authority are not improved, or (ii) when the unit or authority persists,
8 after notice and warning from the Commission, in willfully or negligently failing or refusing to
9 comply with the provisions of this Chapter. Chapter, or (iii) when the General Assembly suspends
10 the charter of a municipality. When the Commission takes action under this section, the
11 Commission is vested with all of the powers of the governing board as to the levy of taxes,
12 expenditure of money, adoption of budgets, and all other financial powers conferred upon the
13 governing board by law. If the unit of local government or public authority failed to submit
14 annual audit reports as required by G.S. 159-34(a), the Commission may waive the audit
15 requirement in G.S. 159-34(a) for any or all of the missing reports provided that the use of all
16 grant funds and borrowed funds is documented to the satisfaction of the grantors and lenders. If
17 the Commission waives the annual audit requirement, the Commission shall consider making a
18 recommendation to the General Assembly or other organizing body for the revocation of the
19 charter or the dissolution of the unit of local government or public authority. This subsection (c)
20 does not apply to contractual obligations undertaken by a unit of local government in a debt
21 instrument issued pursuant to Chapter 159G of the General Statutes unless such debt instrument
22 is secured by a pledge of the faith and credit of the unit of local government.
23 …."
24 SECTION 4.(b) The Local Government Commission shall have the authority to
25 impound the books and records and take any other action authorized by G.S. 159-181, as
26 amended by subsection (a) of this section, with respect to the Towns of Eureka and Spencer
27 Mountain, whose charters were suspended in S.L. 2019-29 and S.L. 2016-45, as amended by S.L.
28 2019-29, respectively.
29 SECTION 5. G.S. 115C-218.30 reads as rewritten:
30 "§ 115C-218.30. Accountability; reporting requirements to State Board of Education.
31 (a) The school is subject to the financial audits, the audit procedures, and the audit
32 requirements adopted by the State Board of Education for charter schools. These audit
33 requirements may include the requirements of the School Budget and Fiscal Control Act.The
34 audit requirements shall not include submission to, review of, or approval by, the Local
35 Government Commission for any audit reports, audit contracts, or audit invoices, nor shall they
36 require any other authority, involvement, or oversight by the Local Government Commission
37 with regard to financial reporting, accountability requirements, or procedures.
38 (b) The school shall comply with the reporting requirements established by the State
39 Board of Education in the Uniform Education Reporting System.
40 (c) The school shall report at least annually to the State Board of Education the
41 information required by the State Board."
42
43 PART III. CLARIFYING AND ADMINISTRATIVE CHANGES TO A LAW RELATING
44 TO REPORTS SUBMITTED TO THE COUNCIL OF STATE
45 SECTION 6. G.S. 116-37 reads as rewritten:
46 "§ 116-37. University of North Carolina Health Care System.
47 …
48 (i) Property. – The board of directors shall establish rules and regulations for acquiring
49 or disposing of any interest in real property for the use of the University of North Carolina Health
50 Care System. These rules and regulations shall include provisions for development of
51 specifications, advertisement, and negotiations with owners for acquisition by purchase, gift,

H163-CSSH-6 [v.7] House Bill 163 Page 3
General Assembly Of North Carolina Session 2021
1 lease, or rental, but not by condemnation or exercise of eminent domain, on behalf of the
2 University of North Carolina Health Care System. This section does not authorize the board of
3 directors to encumber real property. The board of directors shall submit all initial policies and
4 regulations adopted pursuant to this subsection to the State Property Office for review upon
5 adoption by the board. Any subsequent changes to these policies and regulations adopted by the
6 board shall be submitted to the State Property Office for review. Any comments by the State
7 Property Office shall be submitted to the Chief Executive Officer and to the President of The
8 University of North Carolina. After review by the Attorney General as to form and after the
9 consummation of any such acquisition, the University of North Carolina Health Care System
10 shall promptly file a report concerning the acquisition or disposition with the Governor and
11 Council of State. Governor. Acquisitions and dispositions of any interest in real property pursuant
12 to this section shall not be subject to the provisions of Article 36 of Chapter 143 of the General
13 Statutes or the provisions of Chapter 146 of the General Statutes.
14 …."
15
16 PART IV. EFFECTIVE DATE
17 SECTION 7. This act is effective when it becomes law.

Page 4 House Bill 163 H163-CSSH-6 [v.7]

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