Bill
HB 1123
The bill broadens UNC capital project funding and oversight tools while standardizing NCSSM residency rules and expanding tuition grants for NCSSM/UNCSA graduates.
Proposed by: Representative Arp (with co-sponsors)
Effective date: Generally upon becoming law; Part VI Section 6.2(b) specifies a July 1, 2026 effective date for the capital project management funding provision. Part II (residency determination standardization for NCSSM) applies beginning with the 2027-2028 admissions cycle. Other parts state they become law when enacted unless otherwise noted.
Overall purpose
- The bill consolidates and updates UNC capital project financing and contracting rules, standardizes residency-related admission criteria for the NC School of Science and Mathematics (NCSSM), revises tuition-grant provisions for NCSSM and UNCSA graduates, tweaks capital-improvement thresholds and contracting requirements, and expands UNC Board of Governors oversight and authorization for certain expenditures and projects.
Key provisions by part
PART I — 2026 UNC Self-Liquidating Projects
- Allows UNC system institutions to finance listed capital improvements using funds such as gifts, grants, self-liquidating indebtedness, Medicare reimbursements for education costs, hospital receipts, etc. Not allowed to use General Fund or State Capital and Infrastructure Fund funds unless previously authorized.
- Authorized projects (with indicative costs):
- NCCU: Richmond Residence Hall Renovation – Phase I ($20,000,000)
- NC State University: Cates West Development – Phase I ($295,000,000)
- UNC-Chapel Hill: New Residence Hall I ($141,200,000); Parker & Teague Halls – Demolition and Replacement ($112,000,000)
- UNC Charlotte: Witherspoon Residence Hall Renovation ($48,430,000)
- UNC Wilmington: Parking Deck IV ($20,357,028)
- The UNC Board of Governors may adjust costs or funding methods for these projects with Budget Director approval and may consult the Joint Legislative Commission on Governmental Operations.
- Allows issuing special obligation bonds up to the listed amounts plus 5% to cover issuance costs, reserves, capitalized interest, etc., plus any Director-approved cost increases.
PART II — Standardize Residency Determination for NCSSM Admissions
- Rewrites G.S. 116-235(b)(1) to standardize eligibility/criteria for NCSSM admissions and retention, requiring:
- Eligibility primarily based on NC residency (as defined by state law) or specific tuition-residency criteria, or a parent’s active military duty in-state with shared abode.
- Enrollment status to remain through the program is contingent on maintaining residency; nonresidency terminates eligibility.
- Aims for geographically diverse admission across NC congressional districts with caps on district variance (differences not exceeding 2.5 percentage points from district average).
- Effective date: Applies to applications for the 2027-2028 school year.
PART III — Revise Tuition Grants for NCSSM and UNCSA Graduates
- Creates/renames a dedicated tuition-grant program for graduates of NCSSM and UNCSA.
- Definitions and program purpose clarified; grants cover undergraduate tuition up to cost of attendance, with adjustments if other aid/scholarships exist.
- Eligibility requires:
- Residency for tuition purposes per the centralized process.
- Enrollment as a full-time undergraduate at a UNC constituent institution in the following academic year; extension of up to one year for certain hardships (military service, serious medical issues, disability, other extraordinary hardship).
- FAFSA submission.
- Grants may be used for up to eight terms (undergraduate only) for cohort graduates; continuous full-time enrollment required unless waivers granted.
- Funds are deposited into an institutional trust fund; pro rata distribution if funds are insufficient.
- Administrative cost cap: up to 5% of funds for program administration.
- Effective: Subsection (a) applies to 2025-2026 awards.
PART IV — Capital Improvement Threshold Changes
- Adjusts several capital-contracting thresholds, particularly:
- Definition of “capital improvement” increases from $100,000 to $150,000 in some contexts.
- Requires architect/engineer seals on plans over new thresholds for both repairs and new construction, with district-specific triggers.
- Revises bid thresholds and retainage allowances (e.g., retainage and bidding requirements adjust with new dollar figures).
- Creates conditions for compliance without registered architect/engineer when certain exemptions apply, with exceptions for specific project types and cost caps.
- UNC and its institutions retain some carve-outs for smaller or structured projects.
PART V — Use of Capital Funds for Public-Private Partnerships
- Clarifies rules for disbursement of capital funds and requirements related to self-liquidating vs. direct appropriations.
- Establishes a prohibition on using state funds for non-authorized public-private partnership (PPP) projects without explicit General Assembly authorization.
- Governs equipment funding and requires Director of the Budget review for equipment-related spending.
- States that projects authorized by law must be completed within the authorized cost envelope.
PART VI — UNC Board of Governors Approval and Capital Expenditures
- Expands UNC Board of Governors authority to:
- Negotiate fees for design contracts and supervise construction/design contract letting for projects up to $4,000,000.
- Develop procedures related to responsibilities of UNC and affiliated institutions regarding state construction oversight and use of existing plans where feasible.
- Restrict use of open-end design agreements and ensure plans are consistent with state processes.
- Board may delegate authority to qualified institutions.
- Requires use of state-standard design/construct contracts and prohibits contract splitting to evade monetary limits.
- Board must report annually to the State Building Commission on governed projects, costs, awardees, and minority-status compliance.
- Additional appropriation: $1,000,000 (nonrecurring) from the State Capital and Infrastructure Fund in FY 2026-2027 to support time-limited capital project management positions at the UNC System Office.
- Effective date for this section: July 1, 2026.
PART VII– Severability
- If any provision is unconstitutional, it does not affect the rest of the act.
PART VIII– Effective Date
- Generally effective upon enactment; certain sections have specific operative dates.
Potential impact and considerations
- Financing: Increases flexibility for UNC capital projects via self-liquidating funds and bonds, with explicit oversight and reporting to the State Building Commission.
- Governance: Bolsters UNC Board of Governors’ role in design/contracting oversight, potentially reducing reliance on state-level administrations for project-by-project decisions.
- Admissions and affordability: Standardizes NCSSM residency criteria and expands tuition grants for NCSSM and UNCSA graduates, potentially improving retention of high-performing in-state students but with budgetary implications.
- Capital program thresholds: Raises thresholds for professional design requirements and bidding, which could affect project timelines and procurement practices.
- PPPs: Tightens controls on using capital funds for PPPs, ensuring legislative authorization for certain arrangements.
Notes
- The bill is labeled as an omnibus touching UNC capital contracting, admissions-related standards for NCSSM, and tuition grants for NCSSM/UNCSA graduates.
- Some provisions become effective in 2026-2027 or 2027-2028, aligning with academic or fiscal cycles.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
