The North Carolina General Assembly routinely enacts legislation—sometimes referred to as the “UNC Omnibus” bill—that amends statutes affecting the UNC System and authorizes financing for capital improvement projects within the UNC System. This year, the UNC Omnibus bill was introduced as House Bill 1123 and became law as Session Law 2026-9 (S.L. 2026-9) when Governor Stein signed it on June 19, 2026.
The law primarily addresses the UNC system, but also includes several changes to statutes governing public building construction that apply to local governments immediately. This blog post summarizes the key changes that local governments need to know.[1]
Sealed Plans for Buildings, G.S. 133-1.1
To protect public safety and promote efficient construction, G.S. 133-1.1 requires that certain public building projects be designed by a North Carolina-licensed architect or engineer who prepares and seals the project plans and specifications.[2] Specifically, the statute establishes both the project types and dollar thresholds that trigger this requirement.
Section 5.1(b) of S.L. 2026-9 increases the dollar thresholds requiring sealed plans for public building projects undertaken by public entities and institutions within the UNC System. The table below compares the prior thresholds with amended thresholds for each applicable project type.
G.S. 133-1.1 also includes several exceptions to the sealed-plan requirements based on the use and occupation of a building or structure. Those exceptions, which are set out in subsection (c) of the statute, were not modified by S.L. 2026-9.
| Project Type | Threshold Prior to June 19, 2026 | Threshold as of June 19, 2026 |
| Repair of public buildings that does not include major structural change in framing or foundation support systems | $300,000 | $300,000 (Unchanged) |
| Repair of public buildings by the UNC system that does not include major structural change in framing or foundation support systems | $500,000 | $500,000 (Unchanged) |
| Repair of public buildings affecting life safety systems | $100,000 | $150,000 |
| Repair of public buildings where such repair includes major structural change in framing or foundation support systems | $135,000 | $150,000 |
| Construction of, or additions to, public buildings | $135,000 | $150,000 |
| Construction of, or additions to, State-owned and operated utilities | $135,000 | $150,000 |
Additionally, S.L. 2026-9 increased the threshold at which a certificate of compliance is required for projects without sealed plans that do not affect life safety systems. The prior threshold was $100,000 and the new threshold is $150,000.
Retainage, G.S. 143-134.1
Retainage is a percentage withheld from a construction contractor’s payments until a construction project is completed. Under G.S. 143-123.41(b1), a public owner may withhold up to five percent of periodic payments until a construction project is fifty percent complete, so long as the contractor is performing satisfactorily and has corrected any nonconforming work.
Since 2008, retainage has been allowed only for construction contracts where the total project costs are $100,000 or more. Section 5.1(c) of S.L. 2026-9 increases that threshold at which retainage is allowed to $150,000.
Requirements for Building Construction Contracts, G.S. 143-128
Under G.S. 143-128, contracts for the erection, construction, alteration, or repair of any buildings (referred to in this blog as “building construction contracts”) are subject to several significant statutory requirements. First, the statute requires separate specifications for each branch of trade work to be performed under the contract.[3] Second, the statute prescribes the procurement methods that may be used for these contracts, including traditional design-bid-build and alternative construction delivery methods, such as construction manager at risk (CMAR). Finally, the statute imposes a dispute resolution process that applies to all building construction contracts, regardless of the contract amount.
Before the enactment of S.L. 2026-9, the separate specifications requirement and the procurement method requirement applied only to building construction contracts of $300,000 or more. However, S.L. 2026-9, at Section 5.1(f), repealed subsection (g)(2) from the statute, thereby extending these two requirements to all building construction contracts undertaken by the State, or any county, municipality, or public body, regardless of the contract amount. The amendments also repealed subsection (g)(3) of the statute, which applied only to institutions within the UNC System.
As a practical matter, local governments must now include separate trade specifications in all building construction solicitations. However, smaller projects below $300,000 may not involve work in every building trade. For example, a county might renovate a 2,000-square-foot office area to create new workspace for staff. The project could include demolition of existing partitions, framing and drywall installation, painting, flooring replacement, and minor electrical work for lighting and outlets, but it might not include plumbing or HVAC work. Ultimately, under the amended statute, local governments are required to prepare separate trade specifications only for the trade work that will actually be performed.
The amendments may raise another question: Must local governments now competitively procure building construction contracts costing less than $30,000? Although S.L. 2026-9 does not address this issue directly, the answer is probably no. Historically, G.S. 143-128 has not independently imposed competitive bidding requirements. Instead, the statute has been understood as adding or overlaying requirements specific to building construction contracts that operate alongside the procurement requirements in G.S. 143-129 and G.S. 143-131. Nothing in S.L. 2026-9 appears to alter that longstanding interpretation.
A more difficult question is how local governments should comply with the separate specifications requirement for building construction contracts below $30,000, where no competitive process is required by statute. The amendments to G.S. 143-128 do not answer this question. To comply with the revised statute, public officials (and boards, departments, and commissions) responsible for preparing specifications, awarding contracts, or entering into building construction contracts below $30,000 should, at a minimum, identify and communicate the required work separately by trade when soliciting or discussing the project with potential contractors.
The Effective Date and Effects on Procurements or Contracts in Progress
The amendments described above took effect upon the Governor’s signature on June 19, 2026, and therefore applied to local governments immediately. However, the legislation does not address whether or how the changes to the law apply to existing contracts or procurements that were already underway when the law became effective.
Under North Carolina law, legislation is generally presumed to apply prospectively—that is, to future situations—rather than past events, unless the General Assembly clearly states otherwise or such intent is necessarily implied by the language of the statute. Bass v. Weinstein Mgmt. Co., 56 F.4th 355, 361 (4th Cir. 2022).
Applying this principle, along with broader legal protections for rights established under existing contracts, the amendments in S.L. 2026-9 likely do not apply to building construction contracts that were already in place when the legislation became effective. This conclusion is particularly relevant to the new retainage provisions.
The applicability of the amendments to procurements that were already underway is less certain. Because the new requirements apply at relatively low dollar thresholds where local governments are generally conducting informal competition for these projects, local governments should consider resoliciting ongoing procurements using separate trade specifications and revised retainage provisions. By contrast, the threshold amendments related to sealed plans are less restrictive and local governments can require sealed plans where they are not required by statute, so local governments likely do not need to resolicit a procurement solely to comply with those changes.
If you have any questions about the language in S.L. 2026-9, please email me at cuccaro@sog.unc.edu.
[1] This blog post does not summarize changes that apply only to State agencies or institutions within the UNC system, but readers should be aware that S.L. 2026-9 includes some additional changes specific to those entities.
[2] Technically, the statute mandates “[e]very officer, board, department, or commission charged with the duty of approving plans and specifications or awarding or entering into contracts” to require specifications and plans are prepared and sealed by a licensed architect or engineer at the applicable thresholds. For ease of reference, this blog uses the shorthand described in the text because it reflects the practical effect of the statute.
[3] Similar to G.S. 133-1.1, G.S. 143-128 imposes the statutory obligation for requiring separate specifications on “[e]very officer, board, department, commission or commissions charged with responsibility of preparation of specifications or awarding or entering into contracts for the erection, construction, alteration or repair of any buildings for the State, or for any county, municipality, or other public body.” Again, this blog simplifies that statutory requirement as stated in the text.
