Business owners in many areas of North Carolina are mobilizing to oppose a bill under consideration in the state Senate that they feel would make it easier for the University of North Carolina to compete unfairly with small businesses.
Mark Zimmerman, a Chapel Hill businessman and chairman of the Chapel Hill-Carrboro Chamber of Commerce’s Board of Directors, says the bill, which would amend the Umstead Act, could hinder businesses in Chapel Hill and other university communities. He mentioned specifically businesses on Franklin Street that sell UNC-Chapel Hill-related merchandise. If UNC is allowed to sell merchandise to alumni it could damage those companies.
“We are very, very concerned,” Zimmerman said. “There are real businesses and real people that will be affected by this.”
House Bill 1539, which House members approved overwhelmingly June 1, would amend the Umstead Act, the 76-year-old provision that prohibits unfair state-supported competition with private companies. The bill, listed as Senate Bill 758 in the state Senate, would allow UNC system schools to participate in business that would further the mission of the university, primarily serve the students or employees, provide a related university service to alumni, or enable the local community to use the university’s facilities, equipment, or expertise.
It would also establish a panel, within the Board of Governors, to review any claims that a university is participating in unfair competition with businesses.
The bill was sponsored by Rep. Bill Daughtridge, Rep. Harold Brubaker, Rep. Phillip Haire, and Rep. Douglas Yongue. It has yet to be taken up for a vote in the state Senate and could come up for a vote this session.
Daughtridge said he thinks the bill would allow the universities to help small businesses develop prototypes and other items by using expertise within the system. He said some of the provisions in the bill could have been implemented by the universities previously, but university officials where uneasy about doing them for fear of violating the Umstead Act.
“This is a clarification so [the universities] know where they stood,” Daughtridge said.
Joni Worthington, a spokeswoman with UNC-General Administration, said the bill would not allow UNC institutions to participate in “unfair competition.” Instead, she said it would open up the universities to offer their expertise to the community in an effort to enhance economic development. She said that opinions from the state Attorney General’s Office say that UNC has not violated the Umstead Act in the past.
This would not be the first time that the Umstead Act has been amended. Previous amendments have allowed UNC institutions to operate student health services, the Centennial Campus at North Carolina State University and dinning services. Zimmerman said that unlike those narrow changes, the ones proposed in the legislation are broad and would allow universities more authority to operate businesses in competition with small companies.
Daughtridge said he considers arguments against the bill’s language as not being a substantive complaint. He said the bill’s sponsors have work to do to make the bill more business friendly.
“It’s a whole more tightened up than it was before,” Daughtridge said.
However, that has not allayed concerns of some business owners and they have established an organization to fight the bill. Members of the Chapel Hill-Carrboro Chamber of Commerce organized the Coalition for Small Business and Fair Competition and drafted a resolution against the bill.
Other groups, such as the Orange County Economic Development Commission, the Chapel Hill Downtown Commission and the Hillsborough-Orange County Chamber of Commerce have joined the group. Organizations in Raleigh, Asheville, Cary, and Durham are considering joining the group, according to information provided by the Chapel Hill-Carrboro Chamber of Commerce.
“It just dropped in our laps,” said the Chapel Hill Chamber’s Zimmerman. “We started with those we know the best. There are 16 chambers of commerce that ought to pay attention to this.”
The group has also made their displeasure with the legislation known to members of the Senate, including Orange County’s Sen. Ellie Kinnaird.
In a letter to Kinnaird, dated June 16, Zimmerman said, “While this legislation may have been well intended, we believe that it is loosely written, poorly conceived, extremely broad in scope and effectively eliminates the protection for small businesses the Umstead Act sought to establish.”
Zimmerman said he hopes to work with legislators to alter the bill’s amendments or to defeat it all together.
“We just want to put the breaks on it for awhile,” Zimmerman said.
Shannon Blosser ([email protected]) is a staff writer with the John W. Pope Center for Higher Education Policy in Chapel Hill.