A BILL TO BE ENTITLED
AN ACT to amend the highway trust fund to authorize the use of Highway Trust fund funds to match federal‑aid highway funds, as recommended by the Joint LEGISLATIVE Transportation oversight committee.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 136‑176 reads as rewritten:
"§ 136‑176. Creation, revenue sources, and purpose of North Carolina Highway Trust Fund.
(a)	A special account, designated the North Carolina Highway Trust Fund, is created within the State treasury. The Trust Fund consists of the following revenue:
(1)	Motor fuel, alternative fuel, and road tax revenue deposited in the Fund under G.S. 105‑449.125, 105‑449.134, and 105‑449.43, respectively.
(2)	Motor vehicle use tax deposited in the Fund under G.S. 105‑187.9.
(3)	Revenue from the certificate of title fee and other fees payable under G.S. 20‑85.
(4)	Repealed by Session Laws 2001, c. 424, s. 27.1.
(5)	Interest and income earned by the Fund.
(a1)	The Department may use two hundred twenty million dollars ($220,000,000) in fiscal year 2001‑2002, two hundred twelve million dollars ($212,000,000) in fiscal year 2002‑2003, and two hundred fifty‑five million dollars ($255,000,000) in fiscal year 2003‑2004 of the cash balance of the Highway Trust Fund for the following purposes:
(1)	For primary route pavement preservation. – One hundred seventy million dollars ($170,000,000) in fiscal year 2001‑2002, and one hundred fifty million dollars ($150,000,000) in each of the fiscal years 2002‑2003 and 2003‑2004. Up to ten percent (10%) of the amount for each of the fiscal years 2001‑2002, 2002‑2003, and 2003‑2004 is available in that fiscal year, at the discretion of the Secretary of Transportation, for:
a.	Highway improvement projects that further economic growth and development in small urban and rural areas, that are in the Transportation Improvement Program, and that are individually approved by the Board of Transportation; or
b.	Highway improvements that further economic development in the State and that are individually approved by the Board of Transportation.
(2)	For preliminary engineering costs not included in the current year Transportation Improvement Program. – Fifteen million dollars ($15,000,000) in each of the fiscal years 2001‑2002, 2002‑2003, and 2003‑2004.
(3)	For computerized traffic signal systems and signal optimization projects. – Fifteen million dollars ($15,000,000) in each of the fiscal years 2001‑2002, 2002‑2003, and 2003‑2004.
(4)	For public transportation twenty million dollars ($20,000,000) in fiscal year 2001‑2002, twenty‑five million dollars ($25,000,000) in fiscal year 2002‑2003, and seventy‑five million dollars ($75,000,000) in fiscal year 2003‑2004.
(5)	For small urban construction projects. – Seven million dollars ($7,000,000) in fiscal year 2002‑2003.
(a2)	The Department shall certify to the Joint Legislative Transportation Oversight Committee each year, on or before November 1, that use of the Highway Trust Fund cash balances for these purposes will not adversely affect the delivery schedule of Highway Trust Fund projects in the 2002‑2008 Transportation Improvement Program.
(b)	Funds in the Trust Fund are annually appropriated to the Department of Transportation to be allocated and used as provided in this subsection. A sum, not to exceed four and one‑half percent (4.5%) of the amount of revenue deposited in the Trust Fund under subdivisions (a)(1), (2), and (3) of this section, may be used each fiscal year by the Department for expenses to administer the Trust Fund. Operation and project development costs of the North Carolina Turnpike Authority are eligible administrative expenses under this subsection. Any funds allocated to the Authority pursuant to this subsection shall be repaid by the Authority from its toll revenue as soon as possible, subject to any restrictions included in the agreements entered into by the Authority in connection with the issuance of the Authority's revenue bonds. Beginning one year after the Authority begins collecting tolls on a completed Turnpike Project, interest shall accrue on any unpaid balance owed to the Highway Trust Fund at a rate equal to the State Treasurer's average annual yield on its investment of Highway Trust Fund funds pursuant to G.S. 147‑6.1. Interest earned on the unpaid balance shall be deposited in the Highway Trust Fund upon repayment. The sum up to the amount anticipated to be necessary to meet the State matching funds requirements to receive federal-aid highway trust funds for the next fiscal year may be set aside for that purpose. The rest of the funds in the Trust Fund shall be allocated and used as follows:
(1)	Sixty‑one and ninety‑five hundredths percent (61.95%) to plan, design, and construct the projects of the Intrastate System described in G.S. 136‑179 and to pay debt service on highway bonds and notes that are issued under the State Highway Bond Act of 1996 and whose proceeds are applied to these projects.
(2)	Twenty‑five and five hundredths percent (25.05%) to plan, design, and construct the urban loops described in G.S. 136‑180 and to pay debt service on highway bonds and notes that are issued under the State Highway Bond Act of 1996 and whose proceeds are applied to these urban loops.
(3)	Six and one‑half percent (6.5%) to supplement the appropriation to cities for city streets under G.S. 136‑181.
(4)	Six and one‑half percent (6.5%) for secondary road construction as provided in G.S. 136‑182 and to pay debt service on highway bonds and notes that are issued under the State Highway Bond Act of 1996 and whose proceeds are applied to secondary road construction.
The Department must administer funds allocated under subdivisions (1), (2), and (4) of this subsection in a manner that ensures that sufficient funds are available to make the debt service payments on bonds issued under the State Highway Bond Act of 1996 as they become due.
(b1)	The Secretary may authorize the transfer of funds allocated under subdivisions (1) through (4) of subsection (b) of this section to other projects that are ready to be let and were to be funded from allocations to those subdivisions. The Secretary shall ensure that any funds transferred pursuant to this subsection are repaid promptly and in any event in no more than four years. The Secretary shall certify, prior to making any transfer pursuant to this subsection, that the transfer will not affect the delivery schedule of Highway Trust Fund projects in the current Transportation Improvement Program. No transfers shall be allowed that do not conform to the applicable provisions of the equity formula for distribution of funds, G.S. 136‑17.2A. If the Secretary authorizes a transfer pursuant to this subsection, the Secretary shall report that decision to the next regularly scheduled meetings of the Joint Legislative Commission on Governmental Operations, the Joint Legislative Transportation Oversight Committee, and to the Fiscal Research Division.
(c)	If funds are received under 23 U.S.C. Chapter 1, Federal‑Aid Highways, for a project for which funds in the Trust Fund may be used, the amount of federal funds received plus the amount of any funds from the Highway Fund that were used to match the federal funds may be transferred by the Secretary of Transportation from the Trust Fund to the Highway Fund and used for projects in the Transportation Improvement Program.
(d)	A contract may be let for projects funded from the Trust Fund in anticipation of revenues pursuant to the cash‑flow provisions of G.S. 143‑28.1 only for the two bienniums following the year in which the contract is let."
SECTION 2.  This act becomes effective July 1, 2003.