FILED SENATE
Apr 6, 2023
GENERAL ASSEMBLY OF NORTH CAROLINA
S.B. 743
SESSION 2023 PRINCIPAL CLERK
S D
SENATE BILL DRS35254-MG-107A
Short Title: Transformational Investments in NC Health. (Public)
Sponsors: Senators Hise and Krawiec (Primary Sponsors).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT MAKING TRANSFORMATIONAL INVESTMENTS IN NORTH CAROLINA'S
3 HEALTH BY CLARIFYING THE AUTHORITY OF THE UNIVERSITY OF NORTH
4 CAROLINA HEALTH CARE SYSTEM (THE SYSTEM) TO CONDUCT OPERATIONS
5 IN THE BEST INTERESTS OF THE STATE FOR THE PURPOSE OF CREATING A
6 STATEWIDE HEALTH SYSTEM OF HIGH QUALITY; EXPANDING THE SYSTEM'S
7 OPERATING AUTHORITIES AND PERSONNEL FLEXIBILITIES; AND MAKING
8 NECESSARY CONFORMING CHANGES.
9 The General Assembly of North Carolina enacts:
10
11 PART I. CLARIFICATION OF THE AUTHORITY OF THE UNIVERSITY OF NORTH
12 CAROLINA HEALTH CARE SYSTEM WITH RESPECT TO OPERATIONS AND
13 PERSONNEL FLEXIBILITIES
14 SECTION 1.1.(a) G.S. 116-37 and G.S. 116-37.2 are repealed.
15 SECTION 1.1.(b) Chapter 116 of the General Statutes is amended by adding a new
16 Article to read:
17 "Article 37.
18 "University of North Carolina Health Care System.
19 "Part 1. Health Care System.
20 "§ 116-350. Definitions.
21 The following definitions shall apply in this Article:
22 (1) Board or Board of Directors. – The Board of Directors of the University of
23 North Carolina Health Care System.
24 (2) Chief Executive Officer. – The executive and administrative head of the
25 University of North Carolina Health Care System.
26 (3) Component unit. – Any of the following:
27 a. The University of North Carolina Hospitals at Chapel Hill.
28 b. A clinical patient care program established or maintained by the
29 School of Medicine of the University of North Carolina at Chapel Hill.
30 (4) System affiliate. – Any corporation, partnership, limited liability company,
31 joint venture, association business trust or similar entity organized under the
32 laws of the United States of America or any state thereof, whether for profit
33 or nonprofit, if a majority of the members of the governing body are one of
34 the following:
35 a. The same as the members of the Board of the System.
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1 b. Subject, directly or indirectly, to election or appointment by the Board
2 of the System.
3 (5) The University of North Carolina Health Care System or System. – The
4 University of North Carolina Hospitals at Chapel Hill and the clinical patient
5 care programs established or maintained by the School of Medicine of the
6 University of North Carolina at Chapel Hill.
7 "§ 116-350.5. University of North Carolina Health Care System.
8 (a) Establishment of System. – Effective November 1, 1998, the University of North
9 Carolina Health Care System is established. The System is a State agency and political
10 subdivision governed and administered as an affiliated enterprise of The University of North
11 Carolina in accordance with the provisions of this Article. The System shall provide patient care;
12 facilitate the education of physicians and other health care providers in partnership with the
13 University of North Carolina at Chapel Hill School of Medicine and other health sciences schools
14 affiliated with the constituent institutions of The University of North Carolina System; conduct
15 research collaboratively with the health sciences schools of the University of North Carolina at
16 Chapel Hill and other institutions; facilitate clinical collaboration with and financial
17 sustainability of the University of North Carolina at Chapel Hill School of Medicine; render other
18 services designed to promote the health and well-being of the citizens of North Carolina; and
19 drive innovation and transformation in health care services delivery.
20 (b) Transfer of Rights. – As of November 1, 1998, all of the rights, privileges, liabilities,
21 and obligations of the Board of the University of North Carolina Hospitals at Chapel Hill, not
22 inconsistent with the provisions of this Article, shall be transferred to and assumed by the Board
23 of the System.
24 (c) Governance. – The Board of the System shall govern and administer The University
25 of North Carolina Hospitals at Chapel Hill, the clinical patient care programs established or
26 maintained by the School of Medicine of the University of North Carolina at Chapel Hill, and
27 such other entities and functions as (i) the General Assembly may assign to the System or (ii) the
28 Board may decide, within the limitations of its statutory powers and duties, to establish,
29 administer, or acquire for the purpose of rendering services designed to promote the health and
30 well-being of the citizens of North Carolina.
31 (d) With respect to G.S. 116-350.30, 116-350.35, 116-350.40, 116-350.45, and
32 116-350-65, the Board may adopt policies that make the authorities and responsibilities
33 established by one or more of said sections applicable to the University of North Carolina
34 Hospitals at Chapel Hill, to the clinical patient care programs of the School of Medicine of the
35 University of North Carolina at Chapel Hill, to both, or to other persons or entities affiliated with
36 or under the control of the University of North Carolina Health Care System.
37 "§ 116-350.10. Board of Directors.
38 (a) The Board shall be composed of 24 members as follows:
39 (1) Eight members ex officio shall be the President of The University of North
40 Carolina (or the President's designee); the Chief Executive Officer of the
41 University of North Carolina Health Care System; the Chancellor of the
42 University of North Carolina at Chapel Hill and one additional administrative
43 officer of the University of North Carolina at Chapel Hill designated by the
44 Chancellor; the President of the University of North Carolina Hospitals; the
45 President of the UNC Faculty Physicians; and two members of the faculty of
46 the School of Medicine of the University of North Carolina at Chapel Hill
47 designated by the Dean of the School of Medicine. If the Dean of the School
48 of Medicine of the University of North Carolina at Chapel Hill does not also
49 hold one of the positions designated as an ex officio member of the Board, the
50 Dean shall serve in one of the positions reserved for a member of the faculty.
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1 (2) Sixteen members at large shall be appointed for four-year terms, commencing
2 on November 1 of the year of appointment. Twelve of the members at large
3 shall be appointed by the Board of Governors after consultation with the
4 President of The University of North Carolina. Four of the members at large
5 shall be appointed by the Board of Directors.
6 (3) The initial class of at-large members shall be composed of the following
7 individuals:
8 a. The persons who hold the appointed memberships on the Board of
9 Directors as of October 31, 2012, and whose terms do not expire on
10 that date. The terms of membership for these at-large members will
11 expire on the last day of October of the year in which their term would
12 have expired.
13 b. Three persons appointed by the Board of Governors after consultation
14 with the President of The University of North Carolina whose terms
15 will commence on November 1, 2012, and will expire on October 31,
16 2016.
17 c. One person appointed by the Board of Directors whose term will
18 commence on November 1, 2012, and will expire on October 31, 2016.
19 The Board of Governors shall appoint successor at-large members
20 for those members whose terms end on October 31, 2013, October 31,
21 2014, and four of the five members whose terms end on October 31,
22 2016. The Board of Directors shall appoint successor at-large
23 members for those members whose terms end on October 31, 2015,
24 and one of the five members whose terms end on October 31, 2016.
25 (4) All at-large positions shall be filled by the appointment of persons from the
26 business and professional public at large who have special competence in
27 business management, hospital administration, health care delivery, or
28 medical practice or who otherwise have demonstrated dedication to the
29 improvement of health care in North Carolina, and who are neither members
30 of the Board of Governors, members of the board of trustees of a constituent
31 institution of The University of North Carolina, nor officers or employees of
32 the State. No member may be appointed to more than two full four-year terms
33 in succession, including members serving as of June 30, 2012. Any vacancy
34 in an unexpired term shall be filled by the appointing authority for the balance
35 of the term remaining.
36 (b) The Board, with each ex officio and at-large member having a vote, shall elect a chair
37 only from among the at-large members for a term of two years. Notwithstanding the foregoing
38 limitation, the Chancellor of the University of North Carolina at Chapel Hill may serve as chair.
39 No person shall be eligible to serve as chair for more than three terms in succession.
40 (c) The Board shall meet at least every 60 days and may hold special meetings at any
41 time and place within the State at the call of the chair. Board members, other than ex officio
42 members, shall receive the same per diem and reimbursement for travel expenses as members of
43 the State boards and commissions generally.
44 (d) The Board's action on matters within its jurisdiction is final, except that appeals may
45 be made, in writing, to the Board of Governors with a copy of the appeal to the Chancellor of the
46 University of North Carolina at Chapel Hill. The Board shall keep the Board of Governors and
47 the board of trustees of the University of North Carolina at Chapel Hill fully informed about
48 health care policy and recommend changes necessary to maintain adequate health care delivery,
49 education, and research for improvement of the health of the citizens of North Carolina.
50 "§ 116-350.15. Powers and duties of the Board of Directors.
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1 (a) Contracting Authority. – The Board may authorize any component unit of the System
2 to contract in its individual capacity, subject to such policies and procedures as the Board may
3 direct.
4 (b) Agreements with Constituent Institutions. – The Board may enter into formal
5 agreements with constituent institutions of The University of North Carolina with respect to the
6 provision of clinical experience for students and for the provision of maintenance and supporting
7 services.
8 (c) General Powers and Duties. – The Board is authorized to exercise such authority and
9 responsibility and adopt such policies, rules, and regulations as it deems necessary or convenient,
10 not inconsistent with the provisions of this Article, to carry out the patient care, education,
11 research, and public service mission of the System, including, but not limited to, authority to do
12 the following:
13 (1) Construct, plan, create, equip, operate, and maintain health care facilities and
14 ancillary enterprises.
15 (2) Collect, manage, and control all receipts generated through its clinical
16 operations and other activities.
17 (3) Issue bonds and notes as provided in G.S. 116-350.55.
18 (4) Acquire and dispose of real or personal property, including existing public or
19 private hospital and health care facilities, by purchase, grant, gift, devise,
20 lease, or otherwise.
21 (5) Enter into partnerships, affiliations, and other combinations or arrangements
22 with other hospitals or health care entities, as it deems appropriate, including
23 arrangements for management services, to achieve its missions of patient care,
24 education, research, and public service.
25 (6) Contract with or enter into any arrangement, including through interlocal
26 cooperation agreements under Part 1 of Article 20 of Chapter 160A of the
27 General Statutes, with other public hospitals of this or other states, federal or
28 public agencies, or with any person, private organization, or nonprofit
29 corporation for the provision of health care.
30 (7) Insure property or operations of the System against risks as the Board may
31 deem advisable.
32 (8) Except as provided in G.S. 116-350.40, to invest any funds held in reserves or
33 sinking funds, or any funds generated from operations, in property or
34 securities in which trustees, executors, or others acting in a fiduciary capacity
35 may legally invest funds under their control.
36 (9) Exercise the following powers conferred upon municipal hospitals and
37 hospital authorities under Article 2 of Chapter 131E of the General Statutes:
38 a. The power to enter into agreements with other hospital entities subject
39 to Article 2 of Chapter 131E of the General Statutes to jointly exercise
40 the powers, privileges, and authorities granted by Article 2 of Chapter
41 131E of the General Statutes.
42 b. The power to lease any hospital facility, or any part of a hospital
43 facility, to a nonprofit corporation, provided that the terms and
44 conditions of such lease are consistent with the public purposes
45 described in G.S. 131E-12.
46 c. The power to acquire an ownership interest, in whole or in part, in a
47 nonprofit or for-profit managed care company, as provided in
48 G.S. 131E-7.1.
49 d. All powers set forth in G.S. 131E-23 that are not otherwise addressed
50 by this Part.
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1 (10) Exercise any or all powers conferred upon the Board, either generally or with
2 respect to any specific health care facility or other operations, through or by
3 designated agents, including private corporations, nonprofit corporations, or
4 limited liability companies formed under the laws of the State.
5 (11) Have the powers of a body corporate and politic, including the power to sue
6 and be sued, to make contracts, and to adopt and use a common seal and to
7 alter the same as may be deemed expedient.
8 (d) Limitations. – Notwithstanding the powers and duties provided in this section, the
9 Board shall not relinquish to another entity more than fifty percent (50%) of control of either the
10 UNC Hospitals or the System.
11 "§ 116-350.20. Reports due from the Board of Directors.
12 The Chief Executive Officer and the President of The University of North Carolina jointly
13 shall report by December 31 of each year on the operations and financial affairs of the Syst