NYS enacted a similar ban against NC (well, and we had one against Indiana but it was lifted when they changed their laws), and I will say it has been a PITA. It has meant that there has been conferences for major organizations people have not been able to attend; and yes, it also means that sports teams for college sports can not compete at tournaments.
I suspect the wording in the NC law is to make it clear that even if the money is from a grant (typically private funds) you still can;t use it – the money would be managed by the UC system, and they generally have to take an amount off the top for fees. In that sense, it becomes state money.
