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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
SESSION LAW 2026-9
HOUSE BILL 1123
*H1123-v-7*
AN ACT TO MAKE VARIOUS CHANGES RELATED TO THE UNIVERSITY OF NORTH
CAROLINA AND UPDATES TO STATUTES RELATED TO CONTRACTING FOR
CAPITAL PROJECTS.
The General Assembly of North Carolina enacts:
PART I. 2026 UNC SELF-LIQUIDATING PROJECTS
SECTION 1.1. The purpose of this Part is to authorize the financing of the capital
improvement projects listed in this Part for the respective institutions of The University of North
Carolina with funds available to the institutions from gifts, grants, receipts, self -liquidating
indebtedness, Medicare reimbursements for education costs, hospital receipts from patient care,
or other funds, or any combination of these funds, but not including funds received for tuition or
appropriated from the General Fund or State Capital and Infrastructure Fund of the State unless
previously authorized by General Statute.
SECTION 1.2. The capital improvement projects, and their respective costs,
authorized by this Part to be financed as provided in Section 1.1 of this Part including by revenue
bonds, by special obligation bonds as authorized in Section 1.4 of this Part, or by both, are as
follows:
North Carolina Central University
Richmond Residence Hall Renovation – Phase I $20,000,000
North Carolina State University
Cates West Development – Phase I $295,000,000
University of North Carolina at Chapel Hill
New Residence Hall I $141,200,000
Parker & Teague Halls – Demolition and Replacement $112,000,000
University of North Carolina at Charlotte
Witherspoon Residence Hall Renovation $48,430,000
University of North Carolina at Wilmington
Parking Deck IV $20,357,028
SECTION 1.3. At the request of the Board of Governors of The University of North
Carolina and upon determining that it is in the best interest of the State to do so, the Director of
the Budget may authorize an increase or decrease in the cost of, or a change in the m ethod of,
funding the projects listed in this Part. In determining whether to authorize a change in cost or
funding, the Director of the Budget may consult with the Joint Legislative Commission on
Governmental Operations.
Page 2 Session Law 2026-9 House Bill 1123
SECTION 1.4. Pursuant to G.S. 116D-26, the Board of Governors may issue, subject
to the approval of the Director of the Budget, at one time or from time to time, special obligation
bonds of the Board of Governors for the purpose of paying all or any part of the cost of acquiring,
constructing, or providing for the projects listed in Section 1.2 of this Part. The maximum
principal amount of bonds to be issued shall not exceed the specified amounts in Section 1.2 of
this Part plus five percent (5%) of such amount to pay issuance expenses, fund reserve funds, pay
capitalized interest, and pay other related additional costs plus any increase in the specific project
costs authorized by the Director of the Budget pursuant to Section 1.3 of this Part. The amounts
specified in Section 1.2 of this P art are not inclusive of other amounts that may have been
authorized by an act of the General Assembly for the projects listed.
SECTION 1.5. This Part is effective when it becomes law.
PART II. STANDARDIZE THE RESIDENCY DETER MINATION PROCESS FOR
ADMISSION TO THE NORTH CAROL INA SCHOOL OF SCIENC E AND
MATHEMATICS
SECTION 2.1.(a) G.S. 116-235(b)(1) reads as rewritten:
"(1) Admission of Students. – The School shall admit students in accordance with
criteria, standards, and procedures established by the Board of Trustees.
Trustees, as follows:
a. To be eligible to be considered for admission, an applicant must be
either a legal resident of the State, as defined by G.S. 116-143.1(a)(1),
or a shall be one of the following:
1. A student who is a resident for tuition purposes, as defined in
G.S. 116-143.1(b), who has established legal residence
(domicile) in North Carolina and maintained that legal
residence for at least 12 months immediately prior to his or her
classification as a resident for tuition purposes . This
determination shall be made by the coordinated and centralized
residency determination process administered by the State
Education Assistance Authority.
2. student A student who is not a res ident for tuition purposes
under sub -sub-subdivision 1. of this sub -subdivision whose
parent is an active duty member of the Armed Forces, as
defined by G.S. 116-143.3(a)(2), who is abiding in this State
incident to active military duty at the time the application is
submitted, provided the student shares the abode of that parent;
parent.
b. eligibility Eligibility to remain enrolled in the School shall terminate
at the end of any school year during which a student becomes a
nonresident of the State.
c. The Board of Trustees shall ensure, insofar as possible To the extent
practicable without jeopardizing admission standards, that an equal
number of qualified applicants is shall be admitted to the program and
to the residential summer institutes in science and mathematics from
each of North Carolina's congressional d istricts. In no event shall the
differences in the number of qualified applicants offered admission to
the program from each of North Carolina's congressional districts be
more than two and one -half percentage points from the average
number per district who are offered admission."
House Bill 1123 Session Law 2026-9 Page 3
SECTION 2.1.(b) This section is effective when it becomes law and applies
beginning with applications for admission to the North Carolina School of Science and
Mathematics for the 2027-2028 school year.
PART III. REVISE TUITION GRANTS FOR NCSSM AND UNCSA GRADUATES
SECTION 3.1.(a) Part 6 of Article 23 of Chapter 116 of the General Statutes reads
as rewritten:
"Part 6. Tuition Grant for High School Graduates of the North Carolina School of Science and
Mathematics and the University of North Carolina School of the Arts.
"§ 116-209.89. Definitions.Definitions; purpose.
(a) Definitions. – The following definitions apply in this Part:
(1) Academic term. – Any of the following:
a. One fall semester.
b. One spring semester.
c. One summer term.
(1a) Eligible graduate. – A graduate of either of the following:
a. The North Carolina School of Science and Mathematics.
b. The University of North Carolina School of the Arts.
(1b) Eligible student. – A student who meets the requirements of subsection (a) of
G.S. 116-209.90.
(1c) Program. – The Program established in this Part to provide tuition grants to
high school graduates of the North Carolina School of Science and
Mathematics and the University of North Carolina School of the Arts.
(2) Summer term. – All instruction received in one summer between academic
years.
(b) Purpose. – The purpose of the Program is to provide financial assistance to eligible
students who graduated from the North Carolina School of Science and Mathematics and the
University of North Carolina School of the Arts to promote the retention of th ose
high-performing students in this State.
"§ 116-209.90. Tuition grants for graduates to attend a constituent institution.
(a) Within the funds available, an eligible graduate in each school year who meets the
following conditions shall qualify for a tuition grant awarded under this Part:
(1) Is at the time of application for the initial tuition grant a resident for tuition
purposes under the criteria set forth in G.S. 116-143.1 and in accordance with
the coordinated and centralized residency determination process administered
by the Authority.
(2) Enrolls as a full-time student in a constituent institution of The University of
North Carolina in the next academic year after graduation. The Authority shall
have the discretion to postpone this requirement for up to one academic year
after graduation if the student is able to demonstrate that any of the following
have substantially disrupted or interrupted the student's ability to e nroll as a
full-time student:
a. A military service obligation.
b. Serious medical debilitation.
c. A short-term or long-term disability.
d. Other extraordinary hardship.
(3) Submits a completed Free Application for Federal Student Aid (FAFSA)
form.
(b) Students who receive initial tuition grants as a cohort of a high school graduating class
of NCSSM or UNCSA shall also be eligible to apply for tuition grants for subsequent academic
Page 4 Session Law 2026-9 House Bill 1123
terms for up to a total of eight academic terms, provided that tuition gran ts are only used for
undergraduate tuition.
(b1) A student An eligible student must be continuously enrolled full time in an
undergraduate program at a constituent institution of The University of North Carolina after the
award of the initial tuition grant to be eligible for tuition grants in subsequent academic terms.
The Authority shall have the discretion to waive this requirement if the student is able to
demonstrate that any of the following have substantially disrupted or interrupted the student's
pursuit of a degree:
(1) A military service obligation.
(2) Serious medical debilitation.
(3) A short-term or long-term disability.
(4) Other extraordinary hardship.
(c) The amount of the tuition grant to each graduate shall be determined and distributed
as provided in G.S. 116-209.91.
"§ 116-209.91. Administration of tuition grants.
(a) The Except as otherwise provided in this subsection, the Authority shall administer
the tuition grants provided for in this Part pursuant to guidelines and procedures establi shed by
the Authority consistent with its practices for administering State -funded financial aid. The
guidelines and procedures shall include an application process and schedule, notification and
disbursement procedures, standards for reporting, and standards for return of tuition grants when
a student withdraws. The Authority shall also require students to submit (i) a completed Free
Application for Federal Student Aid (FAFSA) form or (ii) other documentation, as necessary, to
administer and award the tuition grant. The Authority shall not approve any grant until it receives
proper certification from the appropriate constituent institution that the student applying for the
grant is an eligible student. Upon receipt of the certification, the Authority sh all remit, at the
times it prescribes, the tuition grant to the constituent institution on behalf, and to the credit, of
the eligible student. In the event a student on whose behalf a tuition grant has been paid is not
enrolled in an undergraduate program and carrying a minimum academic load as of the tenth
classroom day following the beginning of the school term for which the tuition grant was paid,
the constituent institution shall refund the full amount of the tuition grant to the Authority.
(b) Except as otherwise provided in this section, the amount of the grant awarded to a an
eligible student under the Program shall cover the tuition cost at the constituent institution in
which the eligible student is enrolled. No tuition grant awarded to a an eligible student under this
section shall exceed the cost of attendance at a constituent institution for which the eligible
student is enrolled.
(c) If a student, who is eligible for a tuition grant under this section, an eligible student
also receives a scholarship or other grant covering the cost of attendance at the constituent
institution for which the tuition grant is awarded, then the amount of the tuition grant shall be
reduced by an appropriate amount determined by the Authority so that the total amount of
scholarships and grants received by the eligible student does not exceed the cost of attendance
for the institution. The cost of attendance shall be determined by the Authority for each
constituent institution.
(c1) The Authority s hall place all funds appropriated to, or otherwise received by, the
Authority for the award of tuition grants under this Part into an institutional trust fund established
in accordance with the provisions of G.S. 116-36.1. All interest earned on these funds shall also
be placed in the institutional trust fund established pursuant to this subsection. The monies in the
institutional trust fund may be used only for the purposes set forth in this Part.
(d) In the event there are not sufficient funds to provide each eligible student who has
applied in accordance with the application process and the schedule established by the Authority
with a full tuition grant as provided by this Part, each eligible student shall receive a pro rata
House Bill 1123 Session Law 2026-9 Page 5
share of funds available for the academic term covered by the appropriation in the preceding
fiscal year.
(e) The Authority may use up to five percent (5%) of the funds appropriated each year
for tuition grants under this Part for the administrative costs.costs of the Program."
SECTION 3.1.(b) This section is effective when it becomes law and applies
beginning with the award of tuition grants for the 2026-2027 academic year.
PART IV. UNC BOARD OF GOVERNORS APPROVAL/CAPITAL EXPENDITURES
SECTION 4.1.(a) G.S. 116-31.11 reads as rewritten:
"§ 116-31.11. Powers of Board regarding certain fee negotiations, contracts, and capital
improvements.
(a) Notwithstanding G.S. 143-341(3) and G.S. 143-135.1, the Board shall, with respect
to the design, construction, or renovation of buildings, utilities, and other property developments
of The University of North Carolina requiring the estimated expenditure of public money of four
million dollars ($4,000,000) or less:
(1) Conduct the fee negotiations for all design contracts and supervise the letting
of all construction and design contracts.
(2) Develop procedures governing the responsibilities of The University of North
Carolina and its affiliated and constituent institutions to perform the duties of
the Department of Administration and the Director or Office of State
Construction under G.S. 133-1.1(d) and G.S. 143-341(3).
(3) Develop procedures and reasonable limitations governing the use of open-end
design agreements, subject to G.S. 143-64.34 and the approval of the State
Building Commission.
(4) Use existing plans and specifications for construction projects, where feasible.
Prior to designing a project, the Board shall consult with the Department of
Administration on the availability of existing plans and specifications and the
feasibility of using them for a project.
(b) The Board may delegate its authority under subsection (a) of this section to a
constituent or affiliated institution if the institution is qualified under guidelines adopted by the
Board and approved by the State Building Commission and the Director of the Budget.
(c) The University shall use the standard contracts for design and construction currently
in use for State capital improvement projects by the Office of State Construct ion of the
Department of Administration.
(d) A contract may not be divided for the purpose of evading the monetary limit under
this section.
(e) Notwithstanding any other provision of this Chapter, the Department of
Administration shall not be the awarding authority for contracts awarded pursuant to this section.
(e1) The Board shall be responsible for making the final determination on all expenditures
and project scope for capital improvement projects at The University of North Carolina and its
constituent institutions.
(f) The Board of Governors shall annually report to the State Building Commission the
following:
(1) A list of projects governed by this section.
(2) The estimated cost of each project along with the actual cost.
(3) The name of each person awarded a contract under this section.
(4) Whether the person or business awarded a contract under this section meets
the definition of "minority business" or "minority person" as defined in
G.S. 143-128.2(g)."
SECTION 4.1.(b) This section is effective when it becomes law.
Page 6 Session Law 2026-9 House Bill 1123
PART V. CAPITAL IMPROVEMENT THRESHOLD CHANGES
SECTION 5.1.(a) G.S. 143C-1-1(d)(5) reads as rewritten:
"(5) Capital improvement. – A term that includes real property acquisition, new
construction or rehabilitation of existing facilities, and repairs and renovations
over one hundred fifty thousand dollars ($100,000) ($150,000) in value."
SECTION 5.1.(b) G.S. 133-1.1 reads as rewritten:
"§ 133-1.1. Certain buildings involving public funds to be designed, etc., by architect or
engineer.
(a) In the interest of public health, safety and economy, every officer, board, department,
or commission charged with the duty o f approving plans and specifications or awarding or
entering into contracts involving the expenditure of public funds in excess of:shall require that
such plans and specifications be prepared by a registered architect, in accordance with the
provisions of Chapter 83A of the General Statutes, or by a registered engineer, in accordance
with the provisions of Chapter 89C of the General Statutes, or by both architect and engineer,
particularly qualified by training and experience for the type of work involved, and that the North
Carolina seal of such architect or engineer together with the name and address of such architect
or engineer, or both, be placed on all these plans and specifications, when the contract meets any
of the following criteria:
(1) Three In excess of three hundred thousand dollars ($300,000) for the repair of
public buildings where such repair does not include major structural change
in framing or foundation support systems, or five hundred thousand dollars
($500,000) for the repair of public buildings by The University of North
Carolina or its constituent institutions where such repair does not include
major structural change in framing or foundation support systems,systems.
(1a) One In excess of one hundred fifty thousand dollars ($100,000) ($150,000)
for the repair of public buildings affecting life safety systems,systems.
(2) One In excess of one hundred thirty-five fifty thousand dollars ($135,000)
($150,000) for the repair of public buildings where such repair includes major
structural change in framing or foundation support systems, orsystems.
(3) One In excess of one hundred thirty-five fifty thousand dollars ($135,000)
($150,000) for the construction of, or additions to, public buildings or
State-owned and operated utilities, shall require that such plans and
specifications be prepared by a registered architect, in accordance with the
provisions of Chapter 83A of the General Statutes, or by a registered engineer,
in accordance with the provisions of Chapter 89C of the General Statute s, or
by both architect and engineer, particularly qualified by training and
experience for the type of work involved, and that the North Carolina seal of
such architect or engineer together with the name and address of such architect
or engineer, or both, be placed on all these plans and specifications.utilities.
…
(d) On projects on which no registered architect or engineer is required pursuant to the
provisions of this section, the governing board or awarding authority shall require a certificate of
compliance with the State Building Code from the city or county inspector for the specific trade
or trades involved or from a registered architect or engineer, except that the provisions of this
subsection shall not apply to projects where any of the following apply:
(1) The plans and specifications are approved by the Department of
Administration, Division of State Construction, and the completed project is
inspected by the Division of State Construction and the State Electrical
Inspector.
(2) The project is exempt from the State Building Code.
House Bill 1123 Session Law 2026-9 Page 7
(3) The project has a total projected cost of less than $100,000 one hundred fifty
thousand dollars ($150,000) and does not alter life safety systems.
…."
SECTION 5.1.(c) G.S. 143-134.1(b1) reads as rewritten:
"(b1) No retainage on periodic or final payments made by the owner or prime contractor
shall be allowed on public construction contracts in which the total project costs are less than one
hundred fifty thousand dollars ($100,000). ($150,000). Retainage on periodic or final payments
on public construction contracts in which the total project costs are equal to or greater than one
hundred fifty thousand dollars ($100,000) ($150,000) is allowed as follows:
…."
SECTION 5.1.(d) G.S. 143-129 reads as rewritten:
"§ 143-129. Procedure for letting of public contracts.
(a) Bidding Required. – No construction or repair work requiring the estimated
expenditure of public money in an amount equal to or more than five hundred thousand dollars
($500,000) or purchase of apparatu s, supplies, materials, or equipment requiring an estimated
expenditure of public money in an amount equal to or more than ninety thousand dollars
($90,000) may be performed, nor may any contract be awarded therefor, by any board or
governing body of the S tate, or of any institution of the State government, or of any political
subdivision of the State, unless the provisions of this section are complied with; provided that
The University of North Carolina and its constituent institutions may award contracts for
construction or repair work that requires an estimated expenditure of less than one million five
hundred thousand dollars ($500,000) ($1,500,000) without complying with the provisions of this
section.
For purchases of apparatus, supplies, materials, or equipment, the governing body of any
political subdivision of the State may, subject to any restriction as to dollar amount, or other
conditions that the governing body elects to impose, delegate to the manager, school
superintendent, chief purchasing off icial, or other employee the authority to award contracts,
reject bids, or readvertise to receive bids on behalf of the unit. Any person to whom authority is
delegated under this subsection shall comply with the requirements of this Article that would
otherwise apply to the governing body.
…."
SECTION 5.1.(e) G.S. 143-64.34 reads as rewritten:
"§ 143-64.34. Exemption of certain projects.
State capital improvement projects under the jurisdiction of the State Building Commission,
capital improvement project s of The University of North Carolina, and community college
capital improvement projects, where the estimated expenditure of public money is less than one
million five hundred thousand dollars ($500,000), ($1,500,000), are exempt from the provisions
of this Article."
SECTION 5.1.(f) G.S. 143-128 reads as rewritten:
"§ 143-128. Requirements for certain building contracts.
…
(g) Exceptions. – This section shall not apply to:
(1) The to the purchase and erection of prefabricated or relocatable buildings or portions
thereof, except that portion of the work which must be performed at the construction site.
(2) The erection, construction, alteration, or repair of a building when the cost
thereof is three hundred thousand dollars ($300,000) or less.
(3) The erection, construction, alteration, or repair of a building by The University
of North Carolina or its constituent institutions when the cost thereof is five
hundred thousand dollars ($500,000) or less.
Notwithstanding the other provisions of this subsecti on, subsection (f1) of this section shall
apply to any erection, construction, alteration, or repair of a building by a public entity."
Page 8 Session Law 2026-9 House Bill 1123
PART VI. USE OF CAPITAL FUNDS FOR PUBLIC-PRIVATE PARTNERSHIPS
SECTION 6.1. Article 8 of Chapter 143C of the General St atutes is amended by
adding a new section to read:
"§ 143C-8-7.2. Use of capital funds for public-private partnership projects.
(a) For the purposes of this section, the term "public-private partnership project" means
a capital improvement project undertaken for the benefit of a governmental entity and a private
entity that may involve a contract, a financing arrangement, or other agreement and includes
construction of a public facility or other improvements, inc luding paving, grading, utilities,
infrastructure, reconstruction, or repair, and may include both public and private facilities.
(b) A State agency, including a constituent institution of The University of North
Carolina, shall not use State funds appropriated to the State agency in conjunction with or for the
benefit of a public -private partnership project for either of the following without express
authorization by an act of the General Assembly:
(1) A capital improvement project that is not a public-private partnership project.
(2) A self-liquidating project that is not a public-private partnership project.
(c) This section does not apply to any of the following:
(1) The entity created pursuant to G.S. 116-350.5.
(2) The Department of Transportation."
PART VII. SEVERABILITY CLAUSE
SECTION 7.1. If any section or provision of this act is declared unconstitutional or
invalid by the courts, it does not affect the validity of this act as a whole or any part other than
the part so declared to be unconstitutional or invalid.
House Bill 1123 Session Law 2026-9 Page 9
PART VIII. EFFECTIVE DATE
SECTION 8.1. Except as otherwise provided, this act is effective when it becomes
law.
In the General Assembly read three times and ratified this the 18th day of June, 2026.
s/ Rachel Hunt
President of the Senate
s/ Donna McDowell White
Presiding Officer of the House of Representatives
s/ Josh Stein
Governor
Approved 3:27 p.m. this 19th day of June, 2026