Senate committee substitute to the 3rd edition makes the following changes. Amends GS 126-2 to provide that five (was, six) members of the State Personnel Commission constitute a quorum. Also deletes the proposed requirement that the Governor consider nominations submitted by the State Employees Association of North Carolina for the Commission member who was a veteran of the US Armed Forces.

Amends GS 126-1.1 by deleting the proposed changes to the definition of career state employee to now mean a state employee or employee of a local entity covered by GS Chapter 126 who is in a permanent position and has been continuously employed by that entity in a position subject to the State Personnel Act for the immediate 24 preceding months.

Amends GS 126-5(d)(1) by deleting the provision that allowed the Governor to designate up to 1% of the total number of full time positions in the Department of Public Safety, with a cap of 100, as exempt managerial positions and allowing the Governor to increase by five the number of exempt policy making positions at the Department, not to exceed 105 total exempt policy making positions.

Amends GS 126-34.01, concerning state employee grievances, to prohibit a proposed agency final decision from being issued or made final until it is approved by the Office of State Personnel. Requires the agency grievance procedure and Office of State Personnel review to be completed within 90 days from the filing of the grievance.

Amends GS 126-34.02 to allow an applicant for state employment, a state employee, or former state employee to file a contested case in the Office of Administrative Hearings (OAH) under GS Chapter 150B, Article 3, once a final agency decision has been issued (was, may file a grievance with the State Personnel Commission). Requires the contested case to be filed within 30 days of receiving the final agency decision. Requires that the OAH hear and issue a final decision within 180 days from the commencement of the case. Allows OAH to (1) reinstate any employee to the position the employee was removed from; (2) order the employment, promotion, transfer, or salary adjustment of any individual to whom it has been wrongfully denied; or (3) direct other suitable action to correct the abuse. Provides that an aggrieved party in a contested case is entitled to judicial review of a final decision through appeal to the Court of Appeals. Requires the appeal to be taken within 30 days of receiving the written notice of final decision. Makes conforming changes. Allows an employee to appeal an involuntary nondisciplinary separation due to an employee's unavailability as if it were a disciplinary action, but provides that the agency has only the burden to prove that the employee was unavailable. Adds that the remedies provided in this statute in a whistleblower appeal are the same as those in GS 126-87. Requires OAH to report on a semi-annual basis to the Office of State Personnel and the Joint Legislative Administrative Procedure Oversight Committee on the number of cases filed under this statute and the number of days between the filing and closing of each case. Makes conforming changes to GS 126-34.2. Deletes GS 126-36.1 (appeal to OAH by applicant for employment).

Amends GS 126-34.3 to provide that a decision by OAH on assessing or refusing to assess reasonable witness fees or attorneys' fees is subject to judicial review. Allows the reviewing court to reverse or modify the decision if it is unreasonable or the award is inadequate. Provides that an employee who obtains a reversal or modification of the OAH's decision in an appeal is entitled to recover court costs and reasonable attorneys' fees for representation on the appeal.

Amends GS 126-35, prohibiting the discharge, suspension, or demotion of a career state employee for disciplinary reasons, except for just cause, to give the employee 15 days from the date the statement is delivered to appeal to the head of the agency through the agency grievance procedure for a final agency decision. Provides that if the employee is not satisfied with the final agency decision or is unable, within a reasonable period of time to obtain a final agency decision, the employee may appeal to OAH. Deletes the provision prohibiting a reduction in pay or position which is not imposed for disciplinary reasons from being considered a disciplinary action; the provision treating an involuntary separation the same as a disciplinary action; and the provision placing the burden of showing a career state employee was discharged, suspended, or demoted for just cause on the department or agency employer.

Instead of amending GS 126-7.2, deletes the entire statute (concerning the time limit for appeals of applicants and noncareer state employees).

Makes conforming changes to GS 126-14.1 and GS 7A-29.

Specifies that Part VI (employee grievances) of the act applies to grievances filed on or after the date that the part becomes law.

Deletes proposed changes to GS 126-26 (changing term regulations to policies).

Amends GS 126-86 to allow any state employee injured by a violation of GS 126-85 who is not subject to Article 8, Employee Appeals of Grievances and Disciplinary Action, (was, any state employee) to maintain an action in superior court against the person or agency who committed the violation within one year after the occurrence of the violation.

Deletes Section 8.1, with specified reorganization actions that the Governor may take in order to provide for the most effective and efficient delivery of services and performance of functions by the executive branch. Makes clarifying changes to Section 8.2. Provides that severance and any other payments made under the implementation of the RTR program will not exceed funds appropriated for that purpose. Deletes Section 8.3, which allows selections for reductions in force based upon skills and qualifications for the positions if RTR is deployed and not enough employees volunteer. Makes Part 8 effective when it becomes law and sets it to expire June 30, 2014 (was, effective when the part becomes law and expired December 31, 2014). Requires the Office of State Personnel and the Office of State Budget and management to report to the Joint Legislative Commission on Governmental Operations on January 31, 2014; April 30, 2014; and September 1, 2014.