Bill Summary – FastDemocracy

H.B. 243
                           GENERAL ASSEMBLY OF NORTH CAROLINA
                                                                                                Mar 9, 2021
                                       SESSION 2021                                       HOUSE PRINCIPAL CLERK
     H                                                                                                   D
                                   HOUSE BILL DRH30085-MKa-40A
     Short Title:    UNC Legislative Priorities/COVID-19 Impacts.                                  (Public)
     Sponsors:       Representatives Hardister, Hurley, Pickett, and Terry (Primary Sponsors).
     Referred to:
                                A BILL TO BE ENTITLED
 AN ACT TO PROVIDE EFFICIENCY AND FLEXIBILITY TO THE UNIVERSITY OF
    NORTH CAROLINA TO ADDRESS BUDGETARY AND OTHER IMPACTS OF
    COVID-19 THROUGH TEMPORARY SALARY REDUCTIONS, EARLY
    RETIREMENT INCENTIVES, REDUCTION IN FORCE APPROVAL AUTHORITY,
    COVID-19 LEAVE FLEXIBILITY, AND TO PROVIDE STATE HEALTH PLAN
    PREMIUM PAYMENTS FOR CERTAIN EMPLOYEES PLACED ON EMERGENCY
    TEMPORARY FURLOUGHS, EXPAND CARRYFORWARD AUTHORITY, AND TO
    MODIFY APPLICATION OF STUDENT INTEREST CHARGES ON PAST DUE
    ACCOUNTS.
 The General Assembly of North Carolina enacts:
12
 PART I. AUTHORITY FOR TEMPORARY SALARY REDUCTIONS AND FLEXIBLE
 LEAVE
             SECTION 1.(a) The President of The University of North Carolina shall have the
 authority to implement a temporary salary reduction for employees, or delegate that authority to
 a chancellor of a constituent institution, to offset budget reductions or other reductions in revenue
 at a constituent institution. For the purposes of this section, a "salary reduction" means a
 temporary reduction in the annual compensation of an employee of The University of North
 Carolina that is ordered by the President of The University of North Carolina, or by a chancellor
 when delegated, and is not in connection with a reassignment, demotion, or other disciplinary
 action of an employee. A salary reduction shall either be implemented across-the-board to affect
 an entire constituent institution or major subdivision of a constituent institution, such as a specific
 department or school of an institution.
             SECTION 1.(b) In implementing a salary reduction authorized by this section, the
 following shall apply:
             (1)     A salary reduction shall not result in an annual salary for any employee of less
                     than forty-five thousand dollars ($45,000).
             (2)     In no event shall a salary reduction be greater than twenty percent (20%) of
                     an employee's annual base salary within any 12-month period.
             (3)     Paid leave shall not be used to offset all or any portion of a salary reduction
                     that includes a corresponding reduction to an employee's regularly scheduled
                     hours.
             (4)     A temporary reduction in an employee's salary may, at the discretion of the
                     chancellor of a constituent institution, be accompanied by the granting of
                     "flexible leave" to affected employees in an amount equivalent to the forfeited
                                   *DRH30085-MKa-40A*
     General Assembly Of North Carolina                                                     Session 2021
                     salary consistent with the requirements of this section. Flexible leave provided
                     to an employee shall comply with the following:
                     a.      Flexible leave shall be accounted for separately from other leave
                             accruals and shall remain available during the length of the employee's
                             employment, notwithstanding any other limitation on the total number
                             of days of annual leave that may be carried forward. Part-time
                             permanent employees shall receive a pro rata amount of flexible leave.
                     b.      Flexible leave shall have no cash value and is not eligible for cash in.
                             If not used prior to the time of separation or retirement, flexible leave
                             cannot be paid out and is lost.
                     c.      Notwithstanding any provision of G.S. 126-8 to the contrary, any
                             vacation leave remaining on December 31 of each year in excess of 30
                             days shall be reduced by the amount of flexible leave awarded in this
                             subdivision that was actually used by the employee during the year
                             such that the calculation of vacation leave days that would convert to
                             sick leave shall reflect a deduction of the amount of flexible leave
                             awarded in this subdivision that was used by the employee during the
                             year.
                     d.      The amount of flexible leave awarded pursuant to this subdivision that
                             carries forward to each following year shall equal the flexible leave
                             awarded pursuant to this subdivision remaining on December 31 of
                             each year plus the amount of flexible leave awarded pursuant to this
                             subdivision that was deducted from vacation leave in excess of 30 days
                             for the calculation of sick leave.
                     e.      No employee may be required to take the flexible leave awarded by
                             this subdivision.
             SECTION 1.(c) The President shall report quarterly to the Department of the State
 Treasurer, the Director of the Office of State Human Resources, the Director of the Budget, and
 the Fiscal Research Division of the General Assembly on any reduction in salary that occurred
 in the prior quarter with at least the following:
             (1)     The specifics of the reduction in salary and the dates of the reduction in salary.
             (2)     The positions affected, including the applicable reduction in salary.
             (3)     Information on the offset of the budget reduction or reduction in revenue
                     accomplished with the salary reduction.
             SECTION 1.(d) The authority granted to the President of The University of North
 Carolina pursuant to subsection (a) of this section expires December 31, 2022.
37
 PART II. EARLY RETIREMENT INCENTIVE PROGRAM FOR UNC
             SECTION 2.(a) The Board of Governors of The University of North Carolina may
 authorize the adoption of an early retirement incentive program to provide long-term cost-savings
 to The University of North Carolina and improved operational efficiencies for The University of
 North Carolina to remain in effect until December 31, 2022. The University of North Carolina
 System Office shall develop policies and regulations for the early retirement incentive program
 that shall provide, at a minimum, the following:
             (1)     To participate in the program, an employee must be eligible for early or full
                     service retirement if participating in the Teachers' and State Employees'
                     Retirement System of North Carolina (TSERS) or must be at least age 55 and
                     vested in the Optional Retirement Program (ORP).
             (2)     Employees approved for the early retirement incentive program may receive
                     a severance payment of not less than one month of an employee's annual base
                     salary and not greater than six months of the annual base salary, based on
     Page 2                                                                       DRH30085-MKa-40A
     General Assembly Of North Carolina                                                       Session 2021
                     criteria to be established by the President and on availability of funds. This
                     severance payment shall be exempt from payroll deductions for retirement
                     contributions and shall not be considered compensation for the purposes of
                     the supplemental plans administered by the Supplemental Retirement Board
                     of Trustees established in G.S. 135-96.
            (3)      If an employee who is approved for the early retirement incentive does not
                     qualify for the full employer premium contribution for retiree health coverage
                     provided under TSERS or ORP, then the constituent institution may, at its
                     option, provide the employee an amount equivalent to 12 months of the full
                     employer contribution to the employee health insurance premium.
            (4)      The program may be provided to employees both subject to and exempt from
                     the North Carolina Human Resources Act. The program shall not be made
                     available to employees receiving disability or workers' compensation benefits.
            SECTION 2.(b) By October 1, 2021, and December 1, 2022, if an early retirement
 incentive program is implemented under this section at The University of North Carolina, The
 University of North Carolina System Office shall report to the Department of the State Treasurer
 and the Fiscal Research Division of the General Assembly on implementation of the early
 retirement incentive program, including the number of employees participating by each
 constituent institution and total amount paid out by the program.
            SECTION 2.(c) This section expires December 31, 2022.
21
 PART III. HUMAN RESOURCES POLICY FLEXIBILITY/REORGANIZATIONS FOR
 UNC SYSTEM EMPLOYEES SUBJECT TO THE NORTH CAROLINA HUMAN
 RESOURCES ACT
             SECTION 3. G.S. 116-14 is amended by adding a new subsection to read:
     "(b3) The President shall have the authority to approve a reduction in force for positions
 subject to the North Carolina Human Resources Act in accordance with the reduction in force
 policies of the Office of State Human Resources without further approval by any other State
 agency. The President may delegate this authority to approve a reduction in force to a chancellor
 of a constituent institution. The authority to approve a reduction in force may include
 reorganization and payment of severance with non-State funds. The President and any chancellor
 of a constituent institution who approves a reduction in force pursuant to this section shall comply
 with the following:
             (1)     Submit an annual informational report to the Office of State Human Resources
                     on all approved reductions in force, reorganizations, and severance payments
                     for employees who are subject to the North Carolina Human Resources Act
                     under this section.
             (2)     If State funds are used for payment of severance in connection with a
                     reduction in force under this section, the payment of the severance shall be
                     subject to any required preapproval by the Office of State Budget and
                     Management."
42
 PART IV. PROVIDE TEMPORARY EXCEPTION TO LEAVE RULES FOR STATE
 EMPLOYEES
             SECTION 4.(a) Employees of The University of North Carolina who are subject to
 the North Carolina Human Resources Act may use accrued sick, vacation, and bonus leave for
 any coronavirus disease 2019 (COVID-19) related absences, including child care or inability to
 telework. This section does not apply to leave options related to (i) terminal leave payouts for
 transfers, separations, or reductions in force, (ii) terminal use of leave prior to retirement, or (iii)
 unpaid time due to placement on a temporary emergency furlough.
             SECTION 4.(b) This section expires December 31, 2021.
     DRH30085-MKa-40A                                                                                Page 3
     General Assembly Of North Carolina                                                    Session 2021
 1
 PART V. PROVIDE STATE HEALTH PLAN PREMIUM PAYMENTS FOR CERTAIN
 EMPLOYEES PLACED ON EMERGENCY TEMPORARY FURLOUGHS
             SECTION 5. The Board of Governors of The University of North Carolina may
 allocate non-State funds to pay the employee portion of the monthly premiums for participation
 in the State Health Plan for Teachers and State Employees that would have been paid if (i) the
 participating employee is currently on an emergency temporary furlough and (ii) the emergency
 temporary furlough places the employee below half-time employment for a calendar month. The
 Board of Governors shall not provide for more than 12 months of employee premiums for
 employees on furlough between June 1, 2020, and December 31, 2021. The employee shall not
 be required to repay The University of North Carolina for any monthly premiums paid in
 accordance with this section.
13
 PART VI. AMEND CARRYFORWARD AUTHORITY TO ALLOW FOR ONE-TIME
 EXPENDITURES
             SECTION 6. G.S. 116-30.3 reads as rewritten:
 "§ 116-30.3. Reversions.
     (a)     Of the General Fund current operations appropriations credit balance remaining at the
 end of each fiscal year in each of the budget codes listed in this subsection, any amount of the
 General Fund appropriation for that budget code for that fiscal year (i) may be carried forward
 to the next fiscal year in that budget code, (ii) is appropriated in that budget code, and (iii) may
 be used for the purpose purposes set out in subsection (f) of this section. However, the amount
 carried forward in each budget code under this subsection shall not exceed five percent (5.0%)
 of the General Fund appropriation in that budget code. The Director of the Budget, under the
 authority set forth in G.S. 143C-6-2, shall establish the General Fund current operations credit
 balance remaining in each budget code.
     The budget codes that may carry forward a General Fund current operations appropriations
 credit balance remaining at the end of each fiscal year pursuant to this section are the budget
 codes for each of the following:
             (1)     Each special responsibility constituent institution.
             (2)     The Area Health Education Centers of the University of North Carolina at
                     Chapel Hill.
             (3)     University of North Carolina System Office Budget Code 16010.
     Each budget code in subdivisions (1) through (3) of this subsection may retain a carryforward
 amount of up to two and one-half percent (2.5%). One-half of any amounts carried forward
 exceeding two and one-half percent (2.5%) shall be distributed to The University of North
 Carolina System Office, to be disbursed to the constituent institutions at the discretion of the
 Board of Governors, with the remaining amount being retained in that budget code.
     (b)     Repealed by Session Laws 1998-212, s. 11(b).
     (c)     Repealed by Session Laws 1998-212, s. 11(a).
     (d)     Repealed by Session Laws 1998-212, s. 11(b).
     (e)     Repealed by Session Laws 2014-100, s. 11.17(a), effective July 1, 2014.
     (f)     Funds carried forward pursuant to subsection (a) of this section shall be used for
 projects that are eligible to receive funds under G.S. 143C-8-13(a). Expenditures may be used
 for one-time expenditures; provided, however, expenditures authorized by this subsection shall
 not impose additional financial obligations on the State and shall not be used to support
 positions."
48
 PART VII. RETROACTIVELY EXTEND WAIVER OF INTEREST CHARGES ON
 PAST-DUE ACCOUNTS
        SECTION 7. Section 2.28 of S.L. 2020-3 reads as rewritten:
     Page 4                                                                      DRH30085-MKa-40A
    General Assembly Of North Carolina                                           Session 2021
     "SECTION 2.28. Notwithstanding G.S. 147-86.23, a constituent institution of The
 University of North Carolina shall not accrue or charge any interest to a past-due account
 receivable held by a student between March 13, 2020, and September 15, 2020.December 31,
 2021."
5
 PART VIII. EFFECTIVE DATE
         SECTION 8. This act is effective when it becomes law.
    DRH30085-MKa-40A                                                                   Page 5
Statutes affected: 
Filed: 116-14, 116-30.3
Edition 1: 116-14, 116-30.3
Edition 2: 116-14, 116-30.3
Edition 3: 116-14
Edition 4: 116-14
Edition 5: 116-14
Ratified: 116-143.11, 143B-135.5, 7A-133, 7A-271, 7A-272, 15A-1340.11, 15A-1340.16, 15A-1341, 15A-1343, 15A-1343.2, 15A-1344, 20-135.2A, 20-140.4, 15A-601, 120-76, 120-77, 143-341, 20-79.4, 20-79.6, 90A-25, 90A-40, 163-111, 163-82.6, 163-302, 105-130.5, 105-153.5, 93B-2, 62-110
SL 2022-6: 116-143.11, 143B-135.5, 7A-133, 7A-271, 7A-272, 15A-1340.11, 15A-1340.16, 15A-1341, 15A-1343, 15A-1343.2, 15A-1344, 20-135.2A, 20-140.4, 15A-601, 120-76, 120-77, 143-341, 20-79.4, 20-79.6, 90A-25, 90A-40, 163-111, 163-82.6, 163-302, 105-130.5, 105-153.5, 93B-2, 62-110