Bill Analysis — House Bill 602, UNC Legislative Priorities/HR/Reports (April 22, 2021)

Summary

A bill analysis of the PCS to the first edition of House Bill 602, UNC Legislative Priorities/HR/Reports, 2021-2022 General Assembly, prepared by Brian Gwyn for the House Education - Universities committee and dated April 22, 2021 (H602-CSBE-17). The analysis states that the first edition would exempt finance, business office, and auditor professionals of The University of North Carolina from most provisions of the North Carolina Human Resources Act and consolidate and eliminate certain reports. It describes the elimination of the primary care plan requirements for the medical schools it names. It states that the PCS would require each State agency to submit a quarterly report to the Office of State Budget and Management on capital projects authorized for a total project cost of at least $10 million.

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Full text

HOUSE BILL 602:
UNC Legislative Priorities/HR/Reports.
2021-2022 General Assembly
Committee: House Education - Universities. If favorable, Date: April 22, 2021
re-refer to Rules, Calendar, and Operations of
the House
Introduced by: Reps. Hardister, Pickett, Arp, K. Smith Prepared by: Brian Gwyn
Analysis of: PCS to First Edition Committee Co-Counsel
H602-CSBE-17

OVERVIEW: The 1st edition of HB 602 would do the following:
• Exempt finance, business office, and auditor professionals of The University of North Carolina
(UNC) from most provisions of the North Carolina Human Resources Act (NCHRA)
• Consolidate and eliminate certain reports
• Make changes for in-State tuition for veterans to comply with federal law
Additionally, the PCS would codify reporting requirements for capital projects and make various
clarifying and technical changes.

PART I: EXEMPT UNC FINANCE PROFESSIONALS, BUSINESS OFFICE PROFESSIONALS,
AND AUDITOR PROFESSIONALS FROM MOST PROVISIONS OF THE NORTH CAROLINA
HUMAN RESOURCES ACT
CURRENT LAW: The NCHRA (Chapter 126 of the General Statutes) creates a system of personnel
administration for all State employees not expressly exempted from the act, as well as certain local employees.
G.S. 126-5(c1)(8) and (9) exempt certain UNC employees from the NCHRA, except with regards to Article 6
("Equal Employment and Compensation Opportunity; Assisting in Obtaining State Employment") and Article
7 ("The Privacy of State Employee Personnel Records"). Examples of UNC employees exempted from much
of the NCHRA by these provisions include: UNC instructional and research staff, as well as chancellors, vice-
chancellors, senior academic and administrative officers, and persons have permanent tenure at constituent
institutions.
G.S. 126-5(c16) exempts commissioned police officer positions of UNC from the NCHRA, except with
regards to Article 6 ("Equal Employment and Compensation Opportunity; Assisting in Obtaining State
Employment"), Article 7 ("The Privacy of State Employee Personnel Records"), and Article 8 ("Employee
Appeals of Grievances and Disciplinary Action").
BILL ANALYSIS: Section 1 would exempt finance professionals, business office professionals, and auditor
professionals of UNC from the NCHRA, except with regards to Article 6 ("Equal Employment and
Compensation Opportunity; Assisting in Obtaining State Employment") and Article 7 ("The Privacy of State
Employee Personnel Records").

Legislative Analysis
Jeffrey Hudson
Division
Director H602-SMBE-39(CSBE-17)-v-4 919-733-2578
This bill analysis was prepared by the nonpartisan legislative staff for the use of legislators in their deliberations and does not constitute an official statement of legislative intent.
House PCS 602
Page 2

PART II: UNC REPORT MODIFICATIONS/ELIMINATIONS
Eliminate primary care plans and modify graduate report
CURRENT LAW: G.S. 143-613 requires Bowman Gray School of Medicine (Wake Forest), Duke University
School of Medicine, University of North Carolina at Chapel Hill School of Medicine, East Carolina University
School of Medicine, and State-operated health professional schools to develop plans on increasing the
percentage of graduates who enter residencies, clinical programs, and careers in primary care. Updated plans
must be sent to the Joint Legislative Education Oversight Committee (JLEOC) every two years.
Additionally, the UNC Board of Governors must annually monitor private and State-operated medical schools,
and State-operated health professional schools for progress towards increasing the number and proportion of
graduates entering primary care. The Board of Governors must annually certify data on graduates, along with
their residencies, clinical training programs, and subsequent careers by November 15.
BILL ANALYSIS: Sec. 2.1 would eliminate the primary care plan requirements for Bowman Gray School
of Medicine, Duke University School of Medicine, University of North Carolina at Chapel Hill School of
Medicine, East Carolina University School of Medicine, and State-operated health professional schools. The
annual progress certification requirement would remain in place, but the deadline would change from
November 15 to April 15, beginning April 2022.

Exempt UNC from report on government fees
CURRENT LAW: G.S. 143C-9-4 requires the Office of State Budget and Management (OSBM) to report
biennially on fees charged by each State department, bureau, division, board, commission, institution, and
agency during the previous two fiscal years.
G.S. 116-11(9b) requires the UNC Board of Governors to submit an annual report on the actions and
adjustments necessary to its budgetary policies, regulations, and standards resulting from the Current
Operations Appropriations Act for the administration and operation of UNC and the distribution of State and
federal funds to constituent institutions.
BILL ANALYSIS: Sec. 2.2 would exempt UNC from the OSBM report on fees, but information on
mandatory student fee revenue, student auxiliary revenue, and sales revenue would be required to be included
in the annual report required by G.S. 116-11(9b).

Modify report on research collaborations on military behavioral health
CURRENT LAW: Sec. 10 of S.L. 2011-185 requires the UNC System Office to work with various entities
to collaborate on research to address the behavioral health problems and challenges facing military personnel,
veterans, and their families. Sec. 10.(d) requires the UNC System Office to report annually on its findings to
the Joint Legislative Health Care Oversight Committee and the House of Representatives and Senate
Appropriations Subcommittees on Health and Human Services.
BILL ANALYSIS: Sec. 2.3 would modify the report on research collaborations on military behavioral health
to only be submitted to the House Homeland Security, Military, and Veterans Affairs Committee.

Educator preparation, recruitment, and effectiveness report consolidation
CURRENT LAW: G.S. 116-74.21 requires the UNC Board of Governors to report to JLEOC annually on
the supply and demand of school administrators to determine the number of school administrators to be trained
each year.
House PCS 602
Page 3

G.S. 116-41.30 establishes the Future Teachers of North Carolina program, which is a selective, application-
based symposium for high school juniors and seniors, offering a challenging introduction to teaching as a
profession. G.S. 116-41.32 requires the UNC System Office to report annually on information related to the
Future Teachers of North Carolina symposium.
Sec. 9.7(c) of S.L. 2008-107, as amended by Sec. 9.3 of S.L. 2010-31, requires UNC and the North Carolina
Community College System (NCCCS) to annually report to several entities on the implementation of the UNC-
NCCCS 2+2 E-Learning Initiative. A 2+2 program is where a student attends two years of community college
and then transfers to a four-year college or university for the remaining two years.
G.S. 116-11(12d) requires the Board of Governors to annually provide by April 15 a comprehensive annual
report on teacher education and recruitment efforts at UNC, including 2+2 initiatives, distance education
programs focuses on teacher education, and professional development programs for teachers and school
administrators.
BILL ANALYSIS: Sec. 2.4 would repeal UNC's role in the reporting requirements related to the following
programs:
• School administrator supply and demand
• The Future Teachers of North Carolina symposium
• UNC-NCCCS 2+2 E-Learning Initiative
Instead, this section would modify the comprehensive annual report on teacher education efforts at UNC to
cover educator preparation, including initiatives to improve educator quality, student success measures, and
strategic research and related efforts. Instead of being due by April 15, the report would be due October 15 of
each year.

Eliminate consultation with Gov Ops on debt for golf courses and transient accommodation facilities
CURRENT LAW: G.S. 66-58(h) requires the following entities to consult with and provide information to
the Joint Legislative Commission on Governmental Operations (Gov Ops) before issuing debt or executing a
contract for a golf course or for any transient accommodations facility, including a hotel or motel:
• UNC and its constituent institutions.
• The Centennial Campus of North Carolina State University.
• The Horace Williams Campus of the University of North Carolina at Chapel Hill.
• A Millennial Campus of a constituent institution.
• Any corporation or other legal entity created or directly controlled by an using land owned by UNC.
BILL ANALYSIS: Sec. 2.5 would repeal the Gov Ops consultation requirement in G.S. 66-58(h).

Eliminate report on UNC System President's Strategic Initiative Reserve funds for special projects
BILL ANALYSIS: Sec. 2.6 would prohibit The UNC System Office from being required to submit an annual
report to JLEOC on the use of funds from The University of North Carolina President's Strategic Initiative
Reserve. However, this information must be available upon request to the Fiscal Research Division of the
General Assembly.

Eliminate UNC enrollment growth projection report
CURRENT LAW: G.S. 116-30.7 requires the UNC System Office to submit by December 15 of each even-
numbered year a projection for the total student enrollment in UNC that is anticipated for the next biennium.
House PCS 602
Page 4

BILL ANALYSIS: Sec. 2.7 would repeal the enrollment growth projection report required by G.S. 116-30.7.

Eliminate report on defaults on projects without performance bonds
CURRENT LAW: Under G.S. 44A-26, State departments, State agencies, and UNC and its constituent
institutions must require a performance and payment bond if the total amount of a construction contract
awarded for any one project exceeds $500,000.
Sec. 1.2 of S.L. 2010-148 requires the Department of Transportation, UNC and its constituent institutions, and
the Department of Administration to monitor projects that are let without a performance or payment bond to
determine the number of defaults on those projects, the cost to complete each defaulted project, and each
project's contract price. The agencies must report on this information to Gov Ops by March 1 each year.
BILL ANALYSIS: Sec. 2.8 would remove UNC's duty to report to Gov Ops on projects that are let without
a performance or payment bond under Sec. 1.2 of S.L. 2010-148.

Require UNC to adopt rules for reporting on certain contracts under a public-private partnership
CURRENT LAW: G.S. 143-133.1 requires governmental entities to report to the Department of
Administration on certain public-private partnerships no later than 12 months from the date the governmental
entity takes beneficial occupancy of the project.
BILL ANALYSIS: Sec. 2.9 would authorize the Board of Governors to adopt its own rules to implement the
public-private partnership reporting requirements. The rules must include that constituent institutions must
report on the required information to the Board of Governors on an annual basis.

PART III: IN-STATE TUITION/VETERANS/FEDERAL LAW COMPLIANCE
CURRENT LAW: In order to remain an approved course of education for students receiving federal
educational assistance benefits, 38 U.S.C. § 3679 requires institutions of higher education to charge in-State
tuition to covered individuals who are living in the state, regardless of legal residency status. The definition
of covered individual in 38 U.S.C. § 3679(c) includes individuals who are entitled to assistance under
Chapter 30 (Montgomery G.I. Bill), Chapter 31 (Vocational Rehabilitation and Employment), or Chapter 33
(Post-9/11 GI Bill).
Prior to 2021, federal law only required veterans to be entitled to in-State tuition in the three years following
discharge. In 2021, the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits
Improvement Act of 2020 (Public Law 116-315) eliminated the three-year limitation, requiring states to offer
in-State tuition to qualifying veterans regardless of the time from discharge.
To the extent required by 38 U.S.C. § 3679, North Carolina law (G.S. 116-143.3A) waives the 12-month
residency requirement for in-State tuition for any veteran, dependent of a veteran, or other qualifying individual
who is admitted to an institution of higher education and meets the following criteria:
• The individual's abode is in North Carolina.
• The individual provides a letter of intent to establish residence in North Carolina.
• The individual meets the definition of a "covered individual" under 38 U.S.C. § 3679(c).
After three years following discharge, an individual receiving in-State tuition because of G.S. 116-143.3A will
continue to be eligible for in-State tuition as long as the individual is continuously enrolled in the institution
of higher education.
House PCS 602
Page 5

BILL ANALYSIS: Sec. 3 would eliminate the requirement that individuals would only be eligible for in-
State tuition after three years from discharge if they remained continuously enrolled in the institution of higher
education. Therefore, covered veterans would be eligible for in-State tuition even after three years from
discharge without being continuously enrolled.

PART IV: CODIFY CAPITAL PROJECT REPORTING REQUIREMENTS
CURRENT LAW: G.S. 143C-1-1(d)(5) defines a capital improvement as "a term that includes real property
acquisition, new construction or rehabilitation of existing facilities, and repairs and renovations over one
hundred thousand dollars ($100,000) in value."
BILL ANALYSIS: Sec. 4 would require each State agency to submit a quarterly report to OSBM on the
status of agency capital projects that meet the following criteria:
• They are capital improvements as defined by G.S. 143C-1-1.
• They are funded in whole or in part with State funds, including receipts, non-General Fund sources, or
statutorily or constitutionally authorized indebtedness of any kind.
• They are not complete.
• They are authorized by the General Assembly for a total project cost of at least $10 million.
By October 1 and April 1 of each year, the following reports would be required to be submitted to the Joint
Legislative Oversight Committee on Capital Improvement and the Fiscal Research Division:
• OSBM would be required to report on the status of capital projects funded from the State Capital and
Infrastructure Fund or other State funds.
• Each State agency would be required to report on the status of agency capital projects funded from
non-State funds.
Additionally, the State Construction Office would be required to submit by April 1 each year to the Joint
Legislative Oversight Committee on Capital Improvements and the Fiscal Research Division a report that
includes the following:
• The status of the Facilities Condition Assessment Program (FCAP).
• The status of plan review, approval, and permitting for each State capital improvement project and
community college capital improvement project over which the Office exercises plan review, approval,
and permitting authority.

EFFECTIVE DATE: The PCS would be effective when it becomes law.

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