Senate committee substitute to the 1st edition makes the following changes.

Amends proposed GS 143-64.18A by no longer requiring a governmental unit to consider the following when determining which qualified provider best meets the governmental unit's needs: (1) the technical feasibility of the proposal; (2) the life cycle cost analysis; (3) certification by a licensed professional engineer that the proposed measurement and verification protocol, to be used as the basis of the annual reconciliation statement, is capable of measuring actual savings in accordance with the specified methods; and (4) the total project costs, inclusive of all financing options. Makes conforming changes. Removes the requirement that the qualified provider make a pre-award report. Removes the provisions: (1) allowing a local government to waive the investment grade audit for a contract with a total cost below $250,000, (2) allowing a State governmental unit to terminate the project based on audit results; and (3) allowing local government units to terminate the project based on certain variance thresholds. Limits the requirement for a qualified reviewer to provide an evaluation of specified matters concerning the negotiated scope, saving methodology, and impact of changes on projected savings and risk profile, to the award of a State government unit's award.

Amends GS 143-64.18B by removing the proposed $1,000 administrative fee for reviewing and administering the program under a guaranteed energy savings contract.

Makes the Department of Environmental Quality, instead of the Department of Administration responsible for adopting rules to implement Section 1-3 of the act.

Removes Section 5 of the act concerning implementation of the Financing Disclosure Rule.

Removes Section 6 of the act concerning implementation of the Federal Funds Certification Rule. 

Adds the following content. 

Section 7 

Amends GS 62-110 by providing that for a leased mobile home in a mobile home park or a tiny home, as defined, within a tiny home community where the lessor determines it is impractical or not economic to measure the lessee’s total water usage, the lessor may allocate the cost for water and sewer service to the lessee using either: (1) equipment that measures the lessee’s hot water usage, using the described process to calculate billing or (2) a ratio utility billing system or other allocation billing system that does not rely on individually submetered hot water usage to determine the allocation of costs. Specifies that the conditions of (1a) b. through e. (concerning billing for common areas or leaks, equipment for measuring usage, record keeping, and information that must be in bill) apply. Makes conforming changes. 

Section 8 

Amends GS 74-49, which defines terms as they are used in Article 7 (The Mining Act of 1971) of GS Chapter 74, by excluding from the definition of mining activities undertaken at any time within the mine permit boundaries for the production and harvesting of timber and timber products and conducted according to standards defined by the Forest Practice Guidelines Related to Water Quality, as adopted by the Department of Agriculture and Consumer Services. 

Amends GS 74-50 by amending the timing by which requests must be made for public hearings on proposed new or modified mining operations that add land to the permitted area, so that requests must be made within 30 days of the later of the issuance of the notice or receipt of the application (was, within 30 days of issuance of the notice). Requires that if the Department of Environmental Quality (DEQ) is noticed of pending cancellation of the operator’s bond by the surety and the bond is replaced within 45 days of receiving notice, then the permit to which the bond applies is automatically revoked. Prohibits DEQ from extending or altering public comment periods and time frames for conducting public hearings under Article 7. Specifies that when there is a public hearing under GS 74-51(c) (when significant public interest exists in an application for a new mining permit or for a modification of a mining permit to add land to the permitted area), the 60-day technical review period does not end until the later of 30 days following the hearing or the original 60-day technical review period. 

Amends GS 74-51 by removing the specified time limitations for deciding on mining permits, leaving the requirement that they be granted or denied as expeditiously as possible. Prohibits refusing to accept an application for, nor refusing to issue, a new, modified, or transferred mining permit only because of the applicant’s failure to obtain another permit, authorization, or certification required for the same project (specifies that such failure does not include denial based on the standards for approval of the permit, authorization, or certification provided by law). Requires DEQ to act on a permit application as quickly as possible. Allows conducting any necessary inquiry or investigation before acting on the application and allows requiring an application to submit additional information. Deems an application approved without modification if DEQ fails to act on an application for a new, modified, or transferred mining permit as required by the statute after the applicant submits all of the information required by DEQ. Requires reviewing an application for completeness within ten working days and then sets out additional deadlines for the start of the technical review period depending on completeness. Requires DEQ to develop an application package checklist. Requires an application to be approved when, during the 60-day technical review period, DEQ determines that the application meets the standards for issuance of a new, modified, or transferred mining permit. Sets out steps that must be taken when, during the 60-day technical review period, DEQ determines that additional information is needed to process the application. Allows a permit to be denied if the applicant failed to pay the application processing fee within 30 days of DEQ receiving the application. Automatically denies a permit if the operator fails to deposit the required bond or security within 60 days after DEQ mails a notice of the required bond to the operator. 

Applies to permit applications filed on or after October 1, 2026. 

Section 8.5

Amends GS 130A-295.2 to exempt from financial assurance requirements the owner or operator of a permitted Small or Large Type 1, 2, or 3 compost facility if: (1) the facility does not accept mixed municipal solid waste, post-collection separated or processed waste, industrial solid waste, sewage sludge, biosolids, septage, or any other feedstock that would cause the facility to be classified as a Type 4 facility, (2) the facility is in substantial compliance with its permit, the Article, and rules, and (3) the facility has not been abandoned. Allows the Department of Health and Human Services to require financial assurance for a facility if it has been abandoned, failed to meet closure requirements, caused or contributed to release of pollutants, or has a history of significant or repeated violations. Exempts from these new provisions, a Type 4 compost facility, sanitary landfill, transfer station, septage management facility, or any other solid waste management facility located on the same site as an exempt facility unless the other solid waste management facility is independently exempt. Requires DHHS, when requested by an owner or operator, to release or authorize cancellation of any financial assurance instrument required solely for closure of the compost facility.

Section 9 

Amends the definition of lead poisoning hazard in GS 130A-131.7 so that the concentration of lead dust on floors is equal to or greater than five micrograms (was, 10 micrograms) and interior windowsills is equal to or greater than 40 micrograms (was, 100, micrograms); retains the specified amounts for vinyl miniblinds, bathtubs, kitchen sinks, and lavatories. Also amends the definition so that the concentration for any lead-based paint or their substance containing lead on a friction or impact surface subject to abrasion, rubbing, binding, or damage by repeated contact and where the lead dust concentrations on the nearest horizontal surface underneath the friction or impact surface are equal to or greater than five micrograms (was, 40 micrograms) per square foot on floors or 40 micrograms (was, 250 micrograms) per square foot on interior windowsills.

Amends GS 130A-131.9C by requiring that remediation plans require that the lead poisoning hazards be reduced to less than five micrograms (was, less than 10 micrograms) per square foot for lead dust on floors, less than 40 micrograms (was, less than 100 micrograms) per square foot for lead dust on interior windowsills, and less than 100 micrograms (was, less than 400 micrograms) per square foot for lead dust on window troughs. 

Effective January 1, 2027.

Section 10 

Requires DEQ to approve for use as a new stormwater technology any prefabricated permeable block panel system approved for use in the state. Requires that the Minimum Design Criteria follows the manufacturer's installation and service requirements as closely as possible while still complying with federal requirements. Provides that when it is used in traffic areas, a professional engineer may use the approved prefabricated permeable block panel system after showing that the system meets H-20 structural loading requirements.  

Section 11 

Amends GS 87-43.1 by exempting from Article 4, Electrical Contractors, of GS Chapter 87 a person temporarily attaching listed single 3-prong receptacles or power taps to existing temporary luminaries or lighting fixtures and plugging those luminaries or fixtures into exiting permanent receptacles, only when the three listed conditions apply, including that a valid electrical permit is obtained from the local authority having jurisdiction before the work. 

Section 12 

Requires the Building Code Council and the Residential Code Council (Council) and local governments enforcing the North Carolina State Building Code collection, and amendments to the Code, to adhere to the following as it relates to the R402 (provisions and tables within Section 402, Building Thermal Envelope, North Carolina-–Residential Provisions, of the North Carolina Energy Conversation Code) rules within the North Carolina Energy Conservation Code. Provides that when Table R402.1.2, Insulation and Fenestration Requirements by Component, requires wood frame wall R-Values, installing air-impermeable spray foam insulation as cavity insulation, which meets R13 in climate zones 3 and 4, and R-15 insulation in climate zone 5, without installation of additional continuous insulation, will be deemed to satisfy the R-value requirements for the wood frame wall in the appropriate climate zone, so long as the building envelope obtains an ACH50 blower door test result of less than or equal to 3.0. Requires the Council to adopt rules to amend the R402 Rules to be consistent with this provision. 

Section 12.5

Specifies that there is no requirement that that building thermal envelope meets or exceeds the levels of efficiency and Solar Heat Gain Coefficients in tables R406.2.1 and R406.2.2, which must be deleted from the R406 Rules (as defined). Requires that the minimum standards associated with compliance must be the ANSI RESNET ICC Standard 301-2022. Requires the Building Code Council and the Residential Code Council to adopt rules to amend R406 Rules consistent with this provision.

Section 13 

Amends GS 143-755 by prohibiting a development permit applicant from selecting a version of an erosion and sediment control permit or a stormwater permit that does not comply with federal law. Amends the definitions of the following terms as they are used in the statute. Amends the definition of development permit so that it includes legislative approval (in addition to the already included administrative or quasi-judicial approval) required before commencing development or undertaking a specific activity, project, or development proposal and expands upon the list of those items to include conditional zoning, rezoning, and stormwater permits. No longer requires the approval to be in writing. Amends the definition of land development regulation by expanding upon the examples of statutes, rules, or regulations, or local ordinances affecting the development or use of real property meeting the definition to also include conditional zoning, rezoning, and stormwater permits. Makes conforming changes. 

Section 14 

Clarifies that the authority granted by GS Chapter 160D is development regulation authority (was, regulatory authority). Lays out a time period for approval of an application for a development approval. Establishes a 7-day period within which a local government or its designated staff must determine whether an application for a development approval is complete and notify the applicant of the application's completeness or deficiencies. Establishes a second 7-day period within which a determination of completeness must be made for amended applications or supplemental information submitted to cure identified deficiencies. Requires the local government or its designated staff to issue a receipt letter or electronic response upon the date the application is deemed complete, starting a review period that must meet the specified deadlines. Permits extension of the review period up to six months only by agreement with the applicant and due to circumstances beyond the control of local government. Deems failure to act within the review period to constitute approval of the application, requiring written approval be issued upon demand by the applicant. 

Enacts GS 160D-707 (concerning applications for amendment of a zoning map or zoning regulations), establishing a 7-day period within which a local government or its designated staff must determine whether an application for an amendment of a zoning map or zoning regulations is complete and notify the applicant of the application's completeness or deficiencies. Establishes a second 7-day period within which a determination of completeness must be made for amended applications or supplemental information submitted to cure identified deficiencies. Requires the local government or its designated staff to issue a receipt letter or electronic response upon the date the application is deemed complete, starting a review period that must meet the specified deadlines. Permits extension of the review period up to six months only by agreement with the applicant and due to circumstances beyond the control of local government. Deems failure to act within the review period to constitute approval of the application, requiring written approval be issued upon demand by the applicant. 

Applies to applications, approvals, and actions filed on or after August 1, 2026. 

Section 15 

Amends GS 160D-944, adding new criteria for the designation of a historic district. Now requires that 50% of the property owners in the proposed district sign a petition requesting designation of the district. Adds a new requirement for the governing board of the local government to approve the adoption of the district by at least a three-fifths vote of a quorum.   

Section 16 

Amends GS 160D-102 to define dwelling unit to mean a single unit, subject to the North Carolina Residential Code, providing complete, independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation.  

Amends GS 160D-703, adding a new requirement for local governments to classify residential zoning districts based only on the number of dwelling units allowed per acre and prohibits classification based on the minimum lot size allowed. Specifies that this does not: (1) authorize development in an area that may not be developed under State or federal law or (2) limit the authority or duty of a local government to adopt or enforce a regulation required as a condition of a federally delegated or approved program, including those specified.  

Section 17 

Enacts new GS 160D-402.1 requiring local governments to prominently display their current fee schedules on their website. Requires the website to be updated to reflect any changes to fees, rates, or methods used to develop fees and rates within 30 days of adopting an ordinance that makes the changes. Requires local governments to report annually on fee schedules, fee collections, and compliance with this statute to the Local Government Commission, which must publish and display on its website a statewide report of local governments' current fee schedules. Requires local governments to give the fee schedule and a fee estimate to an applicant before a development approval; requires that the information be provided within 10 days of an application being completed. Also sets the deadline for providing an updated estimate when the project materially changes. Prohibits requiring the fee to be paid before providing an estimate. Requires local governments to give applicants a written, final, binding fee statement when a development approval is issued and prohibits the final fee from exceeding the most recent estimate, unless the local government adopts a new fee schedule by ordinance. Allows applicants to pursue a civil action to compel a local government to comply with this statute. 

Specifies that this section does not limit or affect the power or authority of a local government to impose fees consistent with its statutory authority or constitutional requirements. Also specifies that this section does not require the disclosure of confidential information. 

Section 18 

Amends GS 160D-108, concerning development permit choice and vested rights, by adding to the conditions under which the 24-hour discontinuance period that follows the expiration of the vesting for an uncompleted development project that has been discontinued for no less than 24 consecutive months is automatically tolled so that it is tolled during the duration of an emergency declaration for which the defined emergency area includes the property. Makes conforming and organizational changes. 

Section 19 

Amends Section 1D.3.(b) of SL 2024-75, as amended, which concerns extension of certain development approvals in the area impacted by Hurricane Helene, by suspending the development approval and any associated vested right development approvals that are current and valid at any point from January 1, 2024, through December 31, 2027, within the affected area during the period beginning January 1, 2024, and ending December 31, 2030 (was, 2027). 

Changes the effective date of the changes to (b) to when the act becomes law (was, effective retroactively to December 11, 2024, and applies only to development approvals issued by local governments located in the affected area that qualify, in whole or in part, for FEMA Public Assistance Categories C through G). 

Section 20 

Changes certain powers of the unit owners’ association (Association) under the NC Condominium Act (GS 47C-3-102) or a homeowners’ association (HOA) under the NC Planned Community Act (GS 47F-3-102) as follows. Allows imposing a reasonable charge for providing copies of records. Requires the Association/HOA to provide a fair, reasonable, and expeditious procedure for making a decision pertaining to a proposed change to a unit or limited common element. Requires that the Association/HOA decision be in writing, made in good faith, and not be unreasonable, arbitrary, or capricious. Requires that the procedure be set forth in the Association/HOA's governing documents. Provides for timeframe on decision and a procedure for reconsideration of the decision if disapproved by the Association/HOA executive board. 

Amends GS 47C-3-107.1 (process for fines collected by an Association) and GS 47F-3-107.1 (same--HOA) to require a written notice of hearing to be sent to a unit owner not less than 10 days prior to the hearing date to be heard on any charges by the Association/HOA. Requires the executive board or adjudicatory panel, no less than two days before the hearing, to give the unit/lot owner the name of the person whose testimony it intends to offer in support of the charge and any documents, photos, and exhibits it intends to submit in support of the charge. Caps any fines imposed without further hearing on the violation at $2,500 for continuing violations.   

Amends GS 47C-3-116 (pertaining to liens imposed for sums due to condominium owners’ associations) and GS 47F-3-116 (pertaining to liens imposed by homeowners’ associations in planned communities) to require that a claim of lien securing a debt consisting of fines or fine-related charges (as defined) be filed separately from a claim of lien securing other sums owed to the association and within 90 days after the date the fine was imposed. Requires the unit owners’/homeowners’ association to provide proper notice of delinquent assessment to the unit/lot owner before filing a claim of lien. Sets forth rules related to notice and requires the association to send a statement of the assessment amount via electronic mail, in addition to first class mail, if the owner has designated an email address; makes conforming changes. Extinguishes a lien securing a debt consisting of fines or fine-related charges unless proceedings to enforce the lien are instituted within one year after the filing of the claim of lien in the office of the clerk of superior court. 

Amends the provisions concerning the recovery of attorneys' fees, to allow the court, in its discretion, the association to recover the reasonable attorneys’ fees and costs incurred in connection with collecting any sums due. 

Limits when the association may foreclose a claim of a lien securing a debt for sums due to the association so that it is only sums other than fines or fine-related charges, and requires that the delinquency have continued for 180 (was, 90) days or more. 

Expands upon the notice requirements in nonjudicial power of sale foreclosures of a claim of lien so that it references the owners’ right of redemption and so that it includes the association’s certification of the actions it has taken to give the owner notice of delinquent assessments. Requires the clerk to inquire as to whether the owner occupies the unit as their principal residence and, if so, about the efforts that have been made to resolve the matter voluntarily. Sets out conditions under which the clerk must order the hearing continued. 

Provides that a claim of lien securing a debt consisting of fines or fine-related charges may only be enforced by the filing of a civil action seeking a judgment. Under GS 47F-3-116, also adds that if before a hearing held pursuant to such a civil action, the lot owner satisfies the debt giving rise to the civil action, the association must dismiss the civil action and cancel the claim of lien; specifies that the lot owner has all rights granted under Article 4 of GS Chapter 45 to ensure the association's satisfaction of the claim of lien, and the association is not entitled to the collection or award of any attorneys' fees or court costs related to the dismissed civil action or cancelled claim of lien. 

Amends GS 47C-3-118 (condo association records) and GS 47F-3-118 (HOA records) to authorize a property owner or their authorized agent to inspect and copy, at a reasonable time and location specified by the association/HOA, any contract entered into by the association if the owner gives the association/HOA written notice of the demand at least five business days prior to the date on which the owner wishes to inspect and copy. Allows for reasonable attorneys’ fees and costs to the prevailing party if a motion to compel such records is filed. Also allows the court to order the association to pay an owner's costs incurred in obtaining an order when the association doesn't allow the owner to inspect and copy the requested contract and the court later enters an order compelling the association to do so. Requires that the statement, provided upon request, setting forth the amount of unpaid assessments and other charges be furnished within 10 days (was, 10 business days) after receiving the request; allows charging an additional expedited fee for the statement when it is requested to be furnished less than 10 days after receipt of the request (was, when the request is made within 48 hours of closing).  

Section 20.5

Amends GS 86B-32 by amending the exemption from Article 2, Barbers, of GS Chapter 86B, for a person whose duties are expressly confined to shampooing or blow drying of hair to no longer require that they be employed by a barbershop. Amends GS 88B-25 by amending the exemption from GS Chapter 88B for a person whose duties are expressly confined to shampooing or blow drying of hair to no longer require that they be employed in a cosmetic art shop and by removing the requirement that they comply with rules related to sanitary management of cosmetic art shops.

Section 21 

Amends GS 130A-280 to exclude from Part 10, Public Swimming Pools, of GS Chapter 130A, private pools serving a single family dwelling used by a person providing swim instruction, regardless of whether their guests or the swim instructor gain use of the private pool through a sharing economy platform or pay a fee for its use. Makes conforming changes. Amends GS 130A-39 by including in the prohibition on a local board of health from adopting a rule concerning a private pool serving a single family dwelling otherwise exempt from regulation under GS 130A-280, rules concerning the recreational or instructional use of the exempt private pool.  

Section 22 

Amends GS 20-171.15 to allow persons under age 16 to operate all-terrain vehicles if they: (1) are at least eight years old, (2) participate in or have completed the specified safety course, (3) it has been determined by a course instructor that they cannot safely operate an all-terrain vehicle that complies with the Age Restriction Warning label and that the vehicle to be operated is appropriate for the person, (4) that the person meets requirements related to brake reach, leg length, grip reach, and handlebar control, (5) operates the all-terrain vehicle while supervised by the safety course instructor while participating in the course, or after the course, under supervision of a person age 18 or older, and (6) comply with all other requirements of the Part.  

Amends GS 20-171.20 to allow an all-terrain vehicle safety certification issued to a person under age 16 to include a written rider-fit determination by the course instruction identifying the appropriate type or size of vehicle for the person.

Section 23 

Amends GS 87-22 to prohibit the Plumbing Board from charging a fee or payment associated with licensing except those expressly authorized by the statute. 

Section 24-Section 29

Creates exemptions to the statutory due dates for the annual reports that must be filed by corporations (new GS 55-16-22.3), LLCs (new GS 57D-2-26), and limited liability partnerships (new GS 59-84.6) under State law for those entities owned by deployed members of the Armed Forces, as follows.  For corporations and limited liability partnerships, specifies that a deployed member of the Armed Forces is a member of the United States Air Force, Army, Coast Guard, Marine Corps, Navy, or Space Force or a member of any reserve component, who is removed from his or her county of residence pursuant to an official order for a deployment period that ends on or after the ninetieth day preceding the due date of the annual report. For LLCs the deployment period is one that ends on or after the ninetieth day preceding the due date of the annual report. Deems an annual report timely filed for corporations and limited liability partnerships if it is filed by the requisite entity in which more than 50% of the ownership interest is owned by one or more deployed members and within 90 business days of the end of the deployment period. Imposes the same ownership requirements on LLCs owned by deployed members of the Armed Forces, but deems the date of timely filing April 15 of the year immediately following the end of the deployment period. Requires the corporation/LLC/limited liability partnership (collectively, the businesses) to electronically file a sworn affidavit of deployment with the Secretary of State prior to the start of the deployment. Provides for extensions if the deployment is extended; requires filing a sworn affidavit of extended deployment. Only allows for dissolution if the period of delinquency for the applicable ground is 180 days or more past the end of the deployment period indicated in the affidavit of deployment. Waives document fees and the filing fee for the report due after the end of deployment for the businesses. Makes conforming changes to GS 55-16-22 (annual report--corporations); GS 57D-2-24 (annual reports--LLCs); and GS 59-84.4 (annual reports--limited liability partnerships). Effective October 1, 2026. 

Amends GS 132-1.2 making confidential information that reveals information contained in an affidavit of deployment or an affidavit of extended deployment under the statutes above. Effective October 1, 2026. 

Effective when the act becomes law, requires the Secretary of State to make the notice of deployment forms available by October 1, 2026. 

Section 29.2

Enacts new GS 90-624.1 providing that a person providing only stretching services is not required to be licensed as a massage and bodywork therapist. Allows a massage and bodywork therapy establishment to employ or contract with one or more person to provide stretching services. Specifies that establishment’s license does not extend any authorization to practice massage and bodywork therapy to a person providing only stretching services at the establishment, and the person is not authorized to practice massage and bodywork therapy under the establishment’s license. Amends GS 90-632.16 concerning the prohibition of unlicensed massage and bodywork therapy at establishments by adding that the statute does not prohibit a massage and bodywork therapy establishment from employing or contracting with a person to provide only stretching services and specifies that for the purposes of the statute, a person providing only stretching services is not employed or contracted to provide massage and bodywork therapy. Amends GS 90-624 by adding that the Article does not prohibit or affect providing stretching services by a person providing only those services. Amends GS 90-622 by adding and defining the terms active stretching, active-assisted stretching, passive stretching, and stretching services.

Section 29.3

Enacts new GS 160D-702.1 providing as follows. Prohibits a local government from adopting or enforcing a glazing requirement requiring glazing, transparency, windows, doors, storefront glass, faux windows, or other transparent or translucent facade materials to exceed 35% of the ground-floor facade area (was defined) of a commercial or mixed use building. Defines glazing requirement. Provides that for portions of a commercial or mixed-use building used primarily for non-storefront purposes, local governments are prohibited from adopting or enforcing a glazing requirement that requires glazing or transparency to exceed 20% of the ground-floor facade area; includes a list of eight items that are considered non-storefront uses. Specifies that these limitations apply only to glazing or transparency required by a local government; voluntary glazing is not limited by this statute and local governments may not condition development approvals on voluntary glazing in excess of the statutes’ limits. Sets out eight areas not impacted by this statute. Effective July 1, 2026, and voids any development regulation that is inconsistent with GS 160D-702.1 on or after that date to the extent of the inconsistency. Specifies that this does not affect the validity of a development approval issued, or an application for a development approval submitted before the July 1, 2026, effective date.

Section 30 

Includes a severability clause.