Final bill helps universities market goods

For 76 years, UNC-system campuses have been barred from offering certain services to the broader community, but now they have a little more leeway.

The N.C. General Assembly ratified an amendment to the Umstead Act on Aug. 23 altering the act so that universities can provide goods and services to the community that are not already available.

“With the Umstead Act, (we’ve) always had a cloud hanging over us that makes it so our faculty are timid to get out there and create businesses,” said Mark Fleming, UNC-system vice president for government relations.

A goal of the bill is to clarify the rules universities abide by when providing services to the community, said Rep. Bill Daughtridge, R-Nash, a primary sponsor of the legislation.

He said the original Umstead Act was ambiguous, and university faculty hesitated in marketing products to the community for fear of competing with private businesses — a violation of the law.

The amendments to the original Umstead Act allow the universities to aid North Carolina in becoming a leader in new industries, such as biotechnology, Daughtridge said.

“We want to encourage the faculty to be thinking entrepreneurially and to be thinking about how the research they are doing … could create a new product that could employ people in North Carolina,” Fleming said.

Daughtridge said universities often have access to new technology before the rest of the community.

“The universities all have some expertise in technology that they can use and help businesses and the community,” he said.

Daughtridge and Fleming said the amendment to the Umstead Act was one of the most important UNC system-based bills to pass the General Assembly this session.

But community members, who were concerned about wording in the bill that would have allowed the university to market products to anyone, had to be convinced that the legislation was sound.

The Chapel Hill-Carrboro Chamber of Commerce formed the Coalition for Small Businesses and Fair Competition and campaigned to limit the liberties given to universities in the new legislation.

“If we could have waved the magic wand, we would have done it a little differently, but we are pleased that (the bill) has been narrowed,” said Aaron Nelson, executive director of the chamber.

Nelson said he was worried about potential effects of the legislation.

“We think the impact that this will now have on our business community has been diminished,” he said.

“What we really wanted was to say that the university can provide these services unless otherwise available,” he added.

The first copy of the bill stated that goods and services could “primarily (serve) students, employees or alumni of the University.”

The coalition wanted the bill to be limited to just students, alumni and faculty.

Nelson, said that without the limitation, universities would be using taxpayers’ money to compete against taxpayers.

For example, UNC-Chapel Hill would have been allowed to sell logo merchandise to anyone via a Web site.

“They could have sold it to all five billion people on the planet,” Nelson said.

Taking away from local business was not the purpose of the bill, and legislators had no qualms with making the change, Daughtridge said.

“We wanted to accommodate them and give them some feeling of confidence that this was not what the intent of the bill was,” he said.

The legislation also allows the 16-campus system to open facilities to the public as long as there is no competition with local commerce.

For example, Cullowhee, home of Western Carolina University, does not have a theater, but the university does. Now the theater will be available for citizen use, Daughtridge said.

The legislation aims to ensure that the universities and their surrounding communities are satisfied.

A nine-person panel was created to review actions of the university and hear concerns from the universities or the communities. Also, any community member can sign up to receive e-mail notification of university actions pertaining to the Umstead Act.

“With all of those controls in place we expect to be pretty pleased with how (UNC-CH) chooses to exercise its power,” Nelson said.

Senior writer Eric Johnson contributed to this article.

Contact the State & National Editor at stntdesk@unc.edu.