A BILL TO BE ENTITLED
AN ACT to increase the maximum amount at which projects may undergo an informal bidding process and CLARIFY the application of this PROCESS, to continue the Department of transportation's program for participation of disadvantaged minority‑owned and women‑owned businesses, and to amend various statutes in chapter 136 of the general statutes to conform with the department's focus on all modes of transportation infrastructure.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 136‑28.1 reads as rewritten:
"§ 136‑28.1.  Letting of contracts to bidders after advertisement; exceptions.
(a)	All contracts over one million two hundred thousand dollars ($1,200,000) that the Department of Transportation may let for construction, maintenance, or repair necessary to carry out the provisions of this Chapter shall be let to a responsible bidder after public advertising under rules and regulations to be made and published by the Department of Transportation. The right to reject any and all bids shall be reserved to the Board of Transportation. Contracts for construction or repair for federal aid projects entered into pursuant to this section shall not contain the standardized contract clauses prescribed by 23 U.S.C. § 112(e) and 23 C.F.R. § 635.109 for differing site conditions, suspensions of work ordered by the engineer or significant changes in the character of the work. For those federal aid projects, the Department of Transportation shall use only the contract provisions for differing site conditions, suspensions of work ordered by the engineer, or significant changes in the character of the work developed by the North Carolina Department of Transportation and approved by the Board of Transportation.
(b)	In those cases in which the amount of work to be let to contract for highway construction or repair is one million two hundred thousand dollars ($1,200,000) or less, and for highway maintenance, excluding resurfacing, that is one million two hundred thousand dollars ($1,200,000) per year or less, at least three informal bids shall be solicited. The term "informal bids" is defined as bids in writing, received pursuant to a written request, without public advertising. All such contracts shall be awarded to the lowest responsible bidder. The Secretary of Transportation shall keep a record of all bids submitted, which record shall be subject to public inspection at any time after the bids are opened.
(c)	The construction, maintenance, and repair of ferryboats and all other marine floating equipment and the construction and repair of all types of docks by the Department of Transportation shall be deemed highway construction, maintenance, or repair for the purpose of G.S. 136‑28.1 and Chapter 44A and Chapter 143C of the General Statutes, the State Budget Act. In cases of a written determination by the Secretary of Transportation that the requirement for compatibility does not make public advertising feasible for the repair of ferryboats, the public advertising as well as the soliciting of informal bids may be waived.
(d)	The construction, maintenance, and repair of the highway rest area buildings and facilities, weight stations and the Department of Transportation's participation in the construction of welcome center buildings shall be deemed highway construction, maintenance, or repair for the purpose of G.S. 136‑28.1 and 136‑28.3 and Chapter 143C of the General Statutes, the State Budget Act.
(e)	The Department of Transportation may enter into contracts for construction, maintenance, or repair without complying with the bidding requirements of this section upon a determination of the Secretary of Transportation or the State Highway Administrator that an emergency exists and that it is not feasible or not in the public interest for the Department of Transportation to comply with the bidding requirements.
(f)	Notwithstanding any other provision of law, the Department of Transportation may solicit proposals under rules and regulations adopted by the Department of Transportation for all contracts for professional engineering services and other kinds of professional or specialized services necessary in connection with the planning, design, maintenance, repair, and construction of transportation infrastructure. In order to promote engineering and design quality and ensure maximum competition by professional firms of all sizes, the Department may establish fiscal guidelines and limitations necessary to promote cost‑efficiencies in overhead, salary, and expense reimbursement rates. The right to reject any and all proposals is reserved to the Board of Transportation.
(g)	The Department of Transportation may enter into contracts for research and development with educational institutions and nonprofit organizations without soliciting bids or proposals.
(h)	The Department of Transportation may enter into contracts for applied research and experimental work without soliciting bids or proposals; provided, however, that if the research or work is for the purpose of testing equipment, materials, or supplies, the provisions of Article 3 of Chapter 143 of the General Statutes shall apply. The Department of Transportation is encouraged to solicit proposals when contracts are entered into with private firms when it is in the public interest to do so.
(i)	The Department of Transportation may negotiate and enter into contracts with public utility companies for the lease, purchase, installation, and maintenance of generators for electricity for its ferry repair facilities.
(j)	Repealed by Session Laws 2002‑151, s. 1, effective October 9, 2002.
(k)	The Department of Transportation may accept bids under this section by electronic means and may issue rules governing the acceptance of these bids. For purposes of this subsection "electronic means" is defined as means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(l)	The Department of Transportation may enter into as many as two pilot contracts for public private participation in providing litter removal from State right‑of‑way. Selection of firms to perform this work shall be made using a best value procurement process and shall be without regard to other provisions of law regarding the Adopt‑A‑Highway Program administered by the Department. Acknowledgement of sponsors may be indicated by appropriate signs that shall be owned by the Department of Transportation. The size, style, specifications, and content of the signs shall be determined in the sole discretion of the Department of Transportation. The Department of Transportation may issue rules and policies necessary to implement this section.
(m)	The Department of Transportation may enter into as many as two pilot contracts for public‑private participation in providing real‑time traveler information at State‑owned rest areas. Selection of firms to perform this work shall be made using a best value procurement process. Recognition of sponsors in the program may be indicated by appropriate acknowledgment for any services provided. The size, style, specifications, and content of the acknowledgment shall be determined in the sole discretion of the Department. Revenues generated pursuant to a contract initiated under this subsection shall be shared with Department of Transportation at a predetermined percentage or rate, and shall be earmarked by the Department to maintain the State owned rest areas from which the revenues are generated. The Department of Transportation may issue guidelines, rules, and policies necessary to administer a pilot program initiated under this subsection."
SECTION 2.  G.S. 136‑28.10(a) reads as rewritten:
"(a)	Notwithstanding the provisions of G.S. 136‑28.4(b), for Highway Fund or Highway Trust Fund construction and repair projects of five hundred thousand dollars ($500,000) or less, and maintenance projects of five hundred thousand dollars ($500,000) or less per year, the Board of Transportation may, after soliciting at least three informal bids in writing from Small Business Enterprises, award contracts to the lowest responsible bidder. The Department of Transportation may identify projects likely to attract increased participation by Small Business Enterprises, and restrict the solicitation and award to those bidders. The Board of Transportation may delegate full authority to award contracts, adopt necessary rules, and administer the provisions of this section to the Secretary of Transportation."
SECTION 3.  The title of Chapter 136 of the General Statutes reads as rewritten:
"Chapter 136.
Transportation."
SECTION 4.  Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136‑4A.  Transportation system.
For the purpose of this Chapter, transportation system is defined as all modes of transportation infrastructure owned and maintained by the North Carolina Department of Transportation, including roads, highways, rail, ferry, aviation, public transportation, and bicycle and pedestrian facilities."
SECTION 5.  G.S. 136‑18(2) reads as rewritten:
"§ 136‑18.  Powers of Department of Transportation.
The said Department of Transportation is vested with the following powers:
…
(2)	To take over and assume exclusive control for the benefit of the State of any existing county or township roads, and to locate and acquire rights‑of‑way for any new roads that may be necessary for a State highway system, and subject to the provisions of G.S. 136‑19.5(a) and (b) also locate and acquire such additional rights‑of‑way as may be necessary for the present or future relocation or initial location, above or below ground, of telephone, telegraph, broadband communications, electric and other lines, as well as gas, water, sewerage, oil and other pipelines, to be operated by public utilities as defined in G.S. 62‑3(23) and which are regulated under Chapter 62 of the General Statutes, or by municipalities, counties, any entity created by one or more political subdivisions for the purpose of supplying any such utility services, electric membership corporations, telephone membership corporations, or any combination thereof, with full power to widen, relocate, change or alter the grade or location thereof and to change or relocate any existing roads that the Department of Transportation may now own or may acquire; to acquire by gift, purchase, or otherwise, any road or highway, or tract of land or other property whatsoever that may be necessary for a State transportation system and adjacent utility rights‑of‑way: Provided, all changes or alterations authorized by this subdivision shall be subject to the provisions of G.S. 136‑54 to 136‑63, to the extent that said sections are applicable: Provided, that nothing in this Chapter shall be construed to authorize or permit the Department of Transportation to allow or pay anything to any county, township, city or town, or to any board of commissioners or governing body thereof, for any existing road or part of any road heretofore constructed by any such county, township, city or town, unless a contract has already been entered into with the Department of Transportation."
SECTION 6.  G.S. 136‑19 reads as rewritten:
"§ 136‑19.  Acquisition of land and deposits of materials; condemnation proceedings; federal parkways.
(a)	The Department of Transportation is vested with the power to acquire either in the nature of an appropriate easement or in fee simple such rights‑of‑way and title to such land, gravel, gravel beds or bars, sand, sand beds or bars, rock, stone, boulders, quarries, or quarry beds, lime or other earth or mineral deposits or formations, and such standing timber as it may deem necessary and suitable for transportation infrastructure construction, including road construction, maintenance, and repair, and the necessary approaches and ways through, and a sufficient amount of land surrounding and adjacent thereto, as it may determine to enable it to properly prosecute the work, by purchase, donation, or condemnation, in the manner hereinafter set out. If the Department of Transportation acquires by purchase, donation, or condemnation part of a tract of land in fee simple for highway right‑of‑way as authorized by this section and the Department of Transportation later determines that the property acquired for transportation infrastructure, including highway right‑of‑way, or a part of that property, is no longer needed for infrastructure right‑of‑way, then the Department shall give first consideration to any offer to purchase the property made by the former owner. The Department may refuse any offer that is less than the current market value of the property, as determined by the Department. Unless the Department acquired an entire lot, block, or tract of land belonging to the former owner, the former owner must own the remainder of the lot, block, or tract of land from which the property was acquired to receive first consideration by the Department of their offer to purchase the property.
(b)	Notwithstanding the provisions of subsection (a), if the Department acquires the property by condemnation and determines that the property or a part of that property is no longer needed for highway right‑of‑way or other transportation project, the Department of Transportation may reconvey the property to the former owner upon payment by the former owner of the full price paid to the owner when the property was taken, the cost of any improvements, together with interest at the legal rate to the date when the decision was made to offer the return of the property. Unless the Department acquired an entire lot, block, or tract of land belonging to the former owner, the former owner must own the remainder of the lot, block, or tract of land from which the property was acquired to purchase the property pursuant to this subsection.
(c)	The requirements of this section for reconveying property to the former owner, regardless of whether such property was acquired by purchase, donation, or condemnation, shall not apply to property acquired outside the right‑of‑way as an "uneconomic remnant" or "residue".
(d)	The Department of Transportation is also vested with the power to acquire such additional land alongside of the rights‑of‑way for transportation projects, including roads as in its opinion may be necessary and proper for the protection of the transportation projects, including roads and roadways, and such additional area as may be necessary as by it determined for approaches to and from such material and other requisite area as may be desired by it for working purposes. The Department of Transportation may, in its discretion, with the consent of the landowner, acquire in fee simple an entire lot, block or tract of land, if by so doing, the interest of the public will be best served, even though said entire lot, block or tract is not immediately needed for right‑of‑way purposes.
(e)	Notwithstanding any other provisions of law or eminent domain powers of utility companies, utility membership corporations, municipalities, counties, entities created by political subdivisions, or any combination thereof, and in order to prevent undue delay of highway projects because of utility conflicts, the Department of Transportation may condemn or acquire property in fee or appropriate easements necessary to provide transportation project rights‑of‑way for the relocation of utilities when required in the construction, reconstruction, or rehabilitation of a State transportation project. The Department of Transportation shall also have the authority, subject to the provisions of G.S. 136‑19.5(a) and (b), to, in its discretion, acquire rights‑of‑way necessary for the present or future placement of utilities as described in G.S. 136‑18(2).
(f)	Whenever the Department of Transportation and the owner or owners of the lands, materials, and timber required by the Department of Transportation to carry on the work as herein provided for, are unable to agree as to the price thereof, the Department of Transportation is hereby vested with the power to condemn the lands, materials, and timber and in so doing the ways, means, methods, and procedure of Article 9 of this Chapter shall be used by it exclusively.
(g)	The Department of Transportation shall have the same authority, under the same provisions of law provided for construction of State transportation projects, for acquirement of all rights‑of‑way and easements necessary to comply with the rules and regulations of the United States government for the construction of federal parkways and entrance roads to federal parks in the State of North Carolina. The acquirement of a total of 125 acres per mile of said parkways, including roadway and recreational, and scenic areas on either side thereof, shall be deemed a reasonable area for said purpose. The right‑of‑way acquired or appropriated may, at the option of the Department of Transportation, be a fee‑simple title. The said Department of Transportation is hereby authorized to convey such title so acquired to the United States government, or its appropriate agency, free and clear of all claims for compensation. All compensation contracted to be paid or legally assessed shall be a valid claim against the Department of Transportation, payable out of the State Highway Fund. Any conveyance to the United States Department of Interior of land acquired as provided by this section shall contain a provision whereby the State of North Carolina shall retain concurrent jurisdiction over the areas conveyed. The Governor is further authorized to grant concurrent jurisdiction to lands already conveyed to the United States Department of Interior for parkways and entrances to parkways.
(h)	The action of the Department of Transportation heretofore taken in the acquirement of areas for the Blue Ridge Parkway in accordance with the rules and regulations of the United States government is hereby ratified and approved and declared to be a reasonable exercise of the discretion vested in the said Department of Transportation in furtherance of the public interest.
(i)	When areas have been tentatively designated by the United States government to be included within a parkway, but the final survey necessary for the filing of maps as provided in this section has not yet been made, no person shall cut or remove any timber from said areas pending the filing of said maps after receiving notice from the Department of Transportation that such area is under investigation; and any property owner who suffers loss by reason of the restraint upon his right to use the said timber pending such investigation shall be entitled to recover compensation from the Department of Transportation for the temporary appropriation of his property, in the event the same is not finally included within the appropriated area, and the provisions of this section may be enforced under the same law now applicable for the adjustment of compensation in the acquirement of rights‑of‑way on other property by the Department of Transportation."
SECTION 7.  G.S. 136‑19.3 reads as rewritten:
"§ 136‑19.3.  Acquisition of buildings.
Where the right‑of‑way of a proposed highway or other transportation project necessitates the taking of a portion of a building or structure, the Department of Transportation may acquire, by condemnation or purchase, the entire building or structure, together with the right to enter upon the surrounding land for the purpose of removing said building or structure, upon a determination by the Department of Transportation based upon an affidavit of an independent real estate appraiser that the partial taking will substantially destroy the economic value or utility of the building or structure and (i) that an economy in the expenditure of public funds will be promoted thereby; or (ii) that it  is not feasible to cut off a portion of the building without destroying the entire building; or (iii) that the convenience, safety or improvement of the transportation project will be promoted thereby; provided, nothing herein contained shall be deemed to give the Department of Transportation authority to condemn the underlying fee of the portion of any building or structure which lies outside the right‑of‑way of any existing or proposed transportation project, including a public road, street or highway."
SECTION 8.  G.S. 136‑19.5 reads as rewritten:
"§ 136‑19.5.  Utility right‑of‑way agreements.
(a)	Before the Department of Transportation acquires or proposes to acquire additional rights‑of‑way for the purpose of accommodating the installation of utilities as authorized by G.S. 136‑18 and G.S. 136‑19, there shall first be voluntary agreements with the appropriate utilities regarding the acquisition and use of the particular right‑of‑way and requiring the payment to the Department of Transportation for or recapture of all of its costs associated with that acquisition, including the use of funds allocated to such acquisition. Such agreements may take into account the fact that more than one utility can make use of the right‑of‑way. No such agreement shall constitute a sale of the right‑of‑way and all such rights‑of‑way shall remain under the control of the Department of Transportation.
(b)	A prior agreement between the Department of Transportation and the affected utilities may be entered into but is not required when the acquisition of right‑of‑way is for the purpose of relocation of utilities due to construction, reconstruction, or rehabilitation of a State transportation project. The Department of Transportation shall notify the affected utility whose facilities are being relocated and the affected utility may choose not to participate in the proposed plan for right‑of‑way acquisition. The decision not to participate in the proposed plan of right‑of‑way acquisition shall not affect any other rights the utility may have as a result of the relocation of its lines or pipelines.
(c)	Whenever the Department of Transportation requires the relocation of utilities located in a right‑of‑way for which the utility owner contributed to the cost of acquisition, the Department of Transportation shall reimburse the utility owner for the cost of moving those utilities.
(d)	Any additional right‑of‑way obtained pursuant to this section which is part of a railroad right‑of‑way shall be returned to the railroad or its successor in interest when the Department of Transportation and the affected utilities agree that the additional right‑of‑way is no longer useful for utility purposes and the Department of Transportation determines that it is no longer useful for transportation purposes."
SECTION 9.  G.S. 136‑26 reads as rewritten:
"§ 136‑26.  Closing of State transportation infrastructure during construction; injury to barriers, warning signs, etc.
If it shall appear necessary to the Department of Transportation, its officers, or appropriate employees, to close any transportation infrastructure coming under its jurisdiction so as to permit of proper completion of work which is being performed, the Department of Transportation, its officers or employees, may close, or cause to be closed, the whole or any portion of transportation infrastructure deemed necessary to be excluded from public travel. While any transportation infrastructure, or portion thereof, is so closed, or while any transportation infrastructure,  or portion thereof, is in process of construction or maintenance, the Department of Transportation, its officers or appropriate employees, or its contractor, under authority from the Department of Transportation, may erect, or cause to be erected, suitable barriers or obstruction thereon; may post, or cause to be posted, conspicuous notices to the effect that the transportation infrastructure, or portion thereof, is closed; and may place warning signs, lights and lanterns on transportation infrastructure, or portions thereof. When infrastructure is closed to the public or in process of construction or maintenance, as provided herein, any person who willfully drives into new construction work, breaks down, removes, injures or destroys any such barrier or barriers or obstructions on the road closed or being constructed, or tears down, removes or destroys any such notices, or extinguishes, removes, injures or destroys any such warning lights or lanterns so erected, posted or placed, shall be guilty of a Class 1 misdemeanor."
SECTION 10.  G.S. 136‑27.1 reads as rewritten:
"§ 136‑27.1.  Relocation of water and sewer lines of municipalities and nonprofit water or sewer corporations or associations.
The Department of Transportation shall pay the nonbetterment cost for the relocation of water and sewer lines, located within the existing State transportation project right‑of‑way, that are necessary to be relocated for a State transportation improvement project and that are owned by: (i) a municipality with a population of 5,500 or less according to the latest decennial census; (ii) a nonprofit water or sewer association or corporation; (iii) any water or sewer system organized pursuant to Chapter 162A of the General Statutes; (iv) a rural water system operated by county as an enterprise system; (v) any sanitary district organized pursuant to Part 2 of Article 2 of Chapter 130A of the General Statutes; or (vi) constructed by a water or sewer system organized pursuant to Chapter 162A of the General Statutes and then sold or transferred to a municipality with a population of greater than 5,500 according to the latest decennial census."
SECTION 11.  G.S. 136‑27.2 reads as rewritten:
"§ 136‑27.2.  Relocation of county‑owned natural gas lines located on Department of Transportation right‑of‑way.
The Department of Transportation shall pay the nonbetterment cost for the relocation of county‑owned natural gas lines, located within the existing State transportation project right‑of‑way, that the Department needs to relocate due to a State transportation improvement project."
SECTION 12.  G.S. 136‑28.2 reads as rewritten:
"§ 136‑28.2.  Relocated transportation infrastructure; contracts let by others.
The Department of Transportation is authorized to permit power companies and governmental agencies, including agencies of the federal government, when it is necessary to relocate transportation infrastructure by reason of the construction of a dam, to let contracts for the construction of the relocated transportation infrastructure. The construction shall be in accordance with the Department of Transportation standards and specifications. The Department of Transportation is further authorized to reimburse the power company or governmental agency for betterments arising out of the construction of the relocated transportation infrastructure, provided the bidding and the award is in accordance with the Department of Transportation's regulations and the Department of Transportation approves the award of the contract."
SECTION 13.  G.S. 136‑28.4 reads as rewritten:
"§ 136‑28.4.  State policy concerning participation by disadvantaged minority‑owned and women‑owned businesses in transportation contracts.
(a)	It is the policy of this State, based on a compelling governmental interest, to encourage and promote participation by disadvantaged minority‑owned and women‑owned businesses in contracts let by the Department pursuant to this Chapter for the planning, design, preconstruction, construction, alteration, or maintenance of State highways, roads, streets, bridges, and other transportation systems and in the procurement of materials for these projects. All State agencies, institutions, and political subdivisions shall cooperate with the Department of Transportation and among themselves in all efforts to conduct outreach and to encourage and promote the use of disadvantaged minority‑owned and women‑owned businesses in these contracts.
(b)	At least every five years, the Department shall conduct a study on the availability and utilization of disadvantaged minority‑owned and women‑owned business enterprises and examine relevant evidence of the effects of race‑based or gender‑based discrimination upon the utilization of such business enterprises in contracts for planning, design, preconstruction, construction, alteration, or maintenance of State highways, roads, streets, bridges, and other transportation systems and in the procurement of materials for these projects. Should the study show a strong basis in evidence of ongoing effects of past or present discrimination that prevents or limits disadvantaged minority‑owned and women‑owned businesses from participating in the above contracts at a level which would have existed absent such discrimination, such evidence shall constitute a basis for the State's continued compelling governmental interest in remedying such race and gender discrimination in transportation contracting. Under such circumstances, the Department shall, in conformity with State and federal law, adopt by rule and contract provisions a specific program to remedy such discrimination. This specific program shall, to the extent reasonably practicable, address each barrier identified in such study that adversely affects contract participation by disadvantaged minority‑owned and women‑owned businesses.
(b1)	Based upon the findings of the Department's Second Generation Disparity Study completed in 2004, hereinafter referred to as "Study", the program design shall, to the extent reasonably practicable, incorporate narrowly tailored remedies identified in the Study, and the Department shall implement a comprehensive antidiscrimination enforcement policy. As appropriate, the program design shall be modified by rules adopted by the Department that are consistent with findings made in the Study and in subsequent studies conducted in accordance with subsection (b) of this section. As part of this program, the Department shall review its budget and establish annual aspirational goals, not mandatory goals, in percentages, for the overall participation in contracts by disadvantaged minority‑owned and women‑owned businesses. These annual aspirational goals for disadvantaged minority‑owned and women‑owned businesses shall be established consistent with methodology specified in the Study, and they shall not be applied rigidly on specific contracts or projects. Instead, the Department shall establish contract‑specific goals or project‑specific goals for the participation of such firms in a manner consistent with availability of disadvantaged minority‑owned and women‑owned businesses, as appropriately defined by its most recent Study, for each disadvantaged minority‑owned and women‑owned business category that has demonstrated significant disparity in contract utilization. Nothing in this section shall authorize the use of quotas. Any program implemented as a result of the Study conducted in accordance with this section shall be narrowly tailored to eliminate the effects of historical and continuing discrimination and its impacts on such disadvantaged minority‑owned and women‑owned businesses without any undue burden on other contractors. The Department shall give equal opportunity for contracts it lets without regard to race, religion, color, creed, national origin, sex, age, or handicapping condition, as defined in G.S. 168A‑3, to all contractors and businesses otherwise qualified.
(c)	The following definitions apply in this section:
(1)	"Disadvantaged business" has the same meaning as "disadvantaged business enterprise" in 49 C.F.R. § 26.5 or any subsequently promulgated replacement regulation.
(2)	"Minority" includes only those racial or ethnicity classifications identified by a study conducted in accordance with this section that have been subjected to discrimination in the relevant marketplace and that have been adversely affected in their ability to obtain contracts with the Department.
(d)	The Department shall report semiannually to the Joint Legislative Transportation Oversight Committee on the utilization of disadvantaged minority‑owned businesses and women‑owned businesses and any program adopted to promote contracting opportunities for those businesses. Following each study of availability and utilization, the Department shall report to the Joint Legislative Transportation Oversight Committee on the results of the study for the purpose of determining whether the provisions of this section should continue in force and effect.
(e)	This section expires August 31, 2014."
SECTION 14.  G.S. 136‑28.6 reads as rewritten:
"§ 136‑28.6.  Participation by the Department of Transportation with private developers.
(a)	The Department of Transportation may participate in private engineering and construction contracts for State transportation systems.
(b)	In order to qualify for State participation, the project must be:
(1)	The construction of a transportation project on the Transportation Improvement Plan adopted by the Department of Transportation; or
(2)	The construction of a transportation project on a mutually adopted transportation plan that is designated a Department of Transportation responsibility.
(c)	Only those projects in which the right‑of‑way is furnished without cost to the Department of Transportation are eligible.
(d)	The Department's participation shall be limited to fifty percent (50%) of the amount of any engineering contract and/or any construction contract let for the project.
(e)	Department of Transportation participation in the contracts shall be limited to cost associated with normal practices of the Department of Transportation.
(f)	Plans for the project must meet Department of Transportation standards and shall be approved by the Department of Transportation.
(g)	Projects shall be constructed in accordance with the plans and specifications approved by the Department of Transportation.
(h)	The Secretary shall report in writing, on a quarterly basis, to the Joint Legislative Commission on Governmental Operations on all agreements entered into between a private developer and the Department of Transportation for participation in private engineering and construction contracts under this section.
(i)	Counties and municipalities may participate financially in private engineering, land acquisition, and construction contracts for transportation projects which meet the requirements of subsection (b) of this section within their jurisdiction."
SECTION 15.  G.S. 136‑28.9 reads as rewritten:
"§ 136‑28.9.  Retainage – construction contracts.
Notwithstanding the provisions of G.S. 147‑69.1, 147‑77, 147‑80, 147‑86.10, and 147‑86.11, or any other provision of the law, the Department of Transportation is authorized to enter into trust agreements with banks and contractors for the deposit of retainage and for the payment to contractors of income on these deposits, in connection with transportation construction contracts, in trust accounts with banks in accordance with Department of Transportation regulations, including deposit insurance and collateral requirements. The Department of Transportation may contract with those banks without trust departments in addition to those with trust departments. Funds deposited in any trust account shall be invested only in bonds, securities, certificates of deposits, or other forms of investment authorized by G.S. 147‑69.1 for the investment of State funds. The trust agreement may also provide for interest to be paid on uninvested cash balances."
SECTION 16.  G.S. 136‑29 reads as rewritten:
"§ 136‑29.  Adjustment and resolution of highway construction contract claim.
(a)	A contractor who has completed a contract with the Department of Transportation to construct a State transportation project and who has not received the amount he claims is due under the contract may submit a verified written claim to the State Highway Administrator for the amount the contractor claims is due. The claim shall be submitted within 60 days after the contractor receives his final statement from the Department and shall state the factual basis for the claim.
The State Highway Administrator shall investigate a submitted claim within 90 days of receiving the claim or within any longer time period agreed to by the State Highway Administrator and the contractor. The contractor may appear before the State Highway Administrator, either in person or through counsel, to present facts and arguments in support of his claim. The State Highway Administrator may allow, deny, or compromise the claim, in whole or in part. The State Highway Administrator shall give the contractor a written statement of the State Highway Administrator's decision on the contractor's claim.
(b)	A contractor who is dissatisfied with the State Highway Administrator's decision on the contractor's claim may commence a contested case on the claim under Chapter 150B of the General Statutes. The contested case shall be commenced within 60 days of receiving the State Highway Administrator's written statement of the decision.
(c)	As to any portion of a claim that is denied by the State Highway Administrator, the contractor may, in lieu of the procedures set forth in subsection (b) of this section, within six months of receipt of the State Highway Administrator's final decision, institute a civil action for the sum he claims to be entitled to under the contract by filing a verified complaint and the issuance of a summons in the Superior Court of Wake County or in the superior court of any county where the work under the contract was performed. The procedure shall be the same as in all civil actions except that all issues shall be tried by the judge, without a jury.
(d)	The provisions of this section shall be part of every contract for State transportation construction between the Department of Transportation and a contractor. A provision in a contract that conflicts with this section is invalid."
SECTION 17.  G.S. 136‑35 reads as rewritten:
"§ 136‑35.  Cooperation with other states and federal government.
It shall also be the duty of the Department of Transportation, where possible, to cooperate with the state highway commissions of other states and with the federal government in the correlation of roads and other transportation systems so as to form a system of intercounty, interstate, and national highways and transportation systems. The Department of Transportation may enter into reciprocal agreements with other states and the Federal Highway Administration to perform inspection work and to pay reasonable fees for inspection work performed by others in connection with supplies and materials used in transportation construction and repair."
SECTION 18.  The title of Article 2A of Chapter 136 of the General Statutes and G.S. 136-44.1 read as rewritten:
"Article 2A. 
State Transportation Generally. 
"§ 136‑44.1.  Statewide transportation system; policies.
The Department of Transportation shall develop and maintain a statewide system of roads, highways, and other transportation systems commensurate with the needs of the State as a whole and it shall not sacrifice the general statewide interest to the purely local desires of any particular area. The Board of Transportation shall formulate general policies and plans for a statewide transportation system. The Board shall formulate policies governing the construction, improvement and maintenance of roads, highways, and other transportation systems of the State with due regard to farm‑to‑market roads and school bus routes."
SECTION 19.  G.S. 136‑44.2 reads as rewritten:
"§ 136‑44.2.  Budget and appropriations.
The Director of the Budget shall include in the "Current Operations Appropriations Bill" an enumeration of the purposes or objects of the proposed expenditures for each of the construction and maintenance programs for that budget period for the State primary, secondary, State parks road systems, and other transportation systems. The State primary system shall include all portions of the State highway system located both inside and outside municipal corporate limits that are designated by N.C., U.S. or Interstate numbers. The State secondary system shall include all of the State highway system located both inside and outside municipal corporate limits that is not a part of the State primary system. The State parks system shall include all State parks roads and parking lots that are not also part of the State highway system. The transportation systems shall include state‑maintained, nonhighway modes of transportation as well.
All construction and maintenance programs for which appropriations are requested shall be enumerated separately in the budget. Programs that are entirely State funded shall be listed separately from those programs involving the use of federal‑aid funds. Proposed appropriations of State matching funds for each of the federal‑aid construction programs shall be enumerated separately as well as the federal‑aid funds anticipated for each program in order that the total construction requirements for each program may be provided for in the budget. Also, proposed State matching funds for the highway planning and research program shall be included separately along with the anticipated federal‑aid funds for that purpose.
Other program categories for which appropriations are requested, such as, but not limited to, maintenance, channelization and traffic control, bridge maintenance, public service and access road construction, transportation projects and systems, and ferry operations shall be enumerated in the budget.
The Department of Transportation shall have all powers necessary to comply fully with provisions of present and future federal‑aid acts. No federally eligible construction project may be funded entirely with State funds unless the Department of Transportation has first reported to the Joint Legislative Commission on Governmental Operations. For purposes of this section, "federally eligible construction project" means any construction project except secondary road projects developed pursuant to G.S. 136‑44.7 and 136‑44.8 eligible for federal funds under any federal‑aid act, whether or not federal funds are actually available.
The "Current Operations Appropriations Bill" shall also contain the proposed appropriations of State funds for use in each county for maintenance and construction of secondary roads, to be allocated in accordance with G.S. 136‑44.5 and 136‑44.6. State funds appropriated for secondary roads shall not be transferred nor used except for the construction and maintenance of secondary roads in the county for which they are allocated pursuant to G.S. 136‑44.5 and 136‑44.6.
If the unreserved credit balance in the Highway Fund on the last day of a fiscal year is greater than the amount estimated for that date in the Current Operations Appropriations Act for the following fiscal year, the excess shall be used in accordance with this paragraph. The Director of the Budget may allocate part or all of the excess among reserves for access and public roads, for unforeseen events requiring prompt action, or for other urgent needs. The amount not allocated to any of these reserves by the Director of the Budget shall be credited to a reserve for maintenance. The Board of Transportation shall report monthly to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division on the use of funds in the maintenance reserve.
The Department of Transportation may provide for costs incurred or accrued for traffic control measures to be taken by the Department at major events which involve a high degree of traffic concentration on State highways, and which cannot be funded from regular budgeted items. This authorization applies only to events which are expected to generate 30,000 vehicles or more per day. The Department of Transportation shall provide for this funding by allocating and reserving up to one hundred thousand dollars ($100,000) before any other allocations from the appropriations for State maintenance for primary, secondary, and urban road systems are made, based upon the same proportion as is appropriated to each system."
SECTION 20.  G.S. 136‑44.2C reads as rewritten:
"§ 136‑44.2C.  Special appropriations for State construction.
Special appropriations for the construction of State highways may be used for the planning, design, right‑of‑way acquisition, and construction of transportation projects for the State Transportation System and Federal Aid System, including secondary roads, contained in the Transportation Improvement Program prepared pursuant to G.S. 143B‑350(f)(4). Funding from the special appropriations used for secondary road projects in the Transportation Improvement Program is not subject to the allocation formula and restrictions of G.S. 136‑44.2, 136‑44.2A, or 136‑44.5."
SECTION 21.  G.S. 136‑44.4 reads as rewritten:
"§ 136‑44.4.  Annual construction program; State primary and urban systems.
The Department of Transportation shall develop an annual construction program for the state‑funded improvements on the primary and urban system highways and for all other federal‑aid construction programs which shall be approved by the Board of Transportation. It shall include a statement of the immediate and long‑range goals. The Department shall develop criteria for determining priorities of projects to insure that the long‑range goals and the statewide needs as a whole are met, which shall be approved by the Board of Transportation. The annual construction program shall list all projects according to priority. A brief description of each project shall be given, identifying the highway number, county, nature of the improvement and the estimated cost of the project shall be indicated. Other transportation systems shall be similarly identified. Copies of the most recent annual work program shall be made available to any member of the General Assembly upon request. The Department of Transportation shall make annual reports after the completion of the fiscal year to be made available to the legislative committees and subcommittees for highway matters, county commissioners, and other persons upon request. These reports shall indicate the expenditure on each of the projects and the status of all projects set out in the work program."
SECTION 22.  The title of Article 3A of Chapter 136 of the General Statutes reads as rewritten:
"Article 3A.
Transportation Systems in and around Municipalities."
SECTION 23.  G.S. 136‑66.3 reads as rewritten:
"§ 136‑66.3.  Local government participation in improvements to the State highway system.
(a)	Municipal Participation Authorized. – A municipality may, but is not required to, participate in the right‑of‑way and construction cost of a State transportation improvement approved by the Board of Transportation under G.S. 143B‑350(f)(4) that is located in the municipality or its extraterritorial jurisdiction.
(b)	Process for Initiating Participation. – A municipality interested in participating in the funding of a State highway improvement project may submit a proposal to the Department of Transportation. The Department and the municipality shall include their respective responsibilities for a proposed municipal participation project in any agreement reached concerning participation.
(c)	Type of Participation Authorized. – A municipality is authorized and empowered to acquire land by dedication and acceptance, purchase, or eminent domain, and make improvements to portions of the State transportation system lying within or outside the municipal corporate limits utilizing local funds that have been authorized for that purpose. All improvements to State transportation systems shall be done in accordance with the specifications and requirements of the Department of Transportation.
(c1)	No TIP Disadvantage for Participation. – If a county or municipality participates in a State transportation system improvement project, as authorized by this section, or by G.S. 136‑51 and G.S. 136‑98, the Department shall ensure that the local government's participation does not cause any disadvantage to any other project in the Transportation Improvement Program under G.S. 143B‑350(f)(4).
(c2)	Distribution of State Funds Made Available by County or Municipal Participation. – Any State or federal funds allocated to a project that are made available by county or municipal participation in a project contained in the Transportation Improvement Program under G.S. 143B‑350(f)(4) shall remain in the same funding region that the funding was allocated to under the distribution formula contained in G.S. 136‑17.2A.
(c3)	Limitation on Agreements. – The Department shall not enter into any agreement with a county or municipality to provide additional total funding for highway construction in the county or municipality in exchange for county or municipal participation in any project contained in the Transportation Improvement Program under G.S. 143B‑350(f)(4).
(d)	Authorization to Participate in Development‑Related Improvements. – When in the review and approval by a local government of plans for the development of property abutting a State transportation system it is determined by the municipality that improvements to the State highway system are necessary to provide for the safe and orderly movement of traffic, the local government is authorized to construct, or have constructed, said improvements to the State transportation system in vicinity of the development. For purposes of this section, improvements include but are not limited to additional travel lanes, turn lanes, curb and gutter, drainage facilities, and other transportation system improvements. All improvements to a State transportation system shall be constructed in accordance with the specifications and requirements of the Department of Transportation and be approved by the Department of Transportation.
(e)	Authorization to Participate in Project Additions. – Pursuant to an agreement with the Department of Transportation, a county or municipality may reimburse the Department of Transportation for the cost of all improvements, including additional right‑of‑way, for a street, highway improvement projects, or other transportation system improvements approved by the Board of Transportation under G.S. 143B‑350(f)(4), that are in addition to those improvements that the Department of Transportation would normally include in the project.
(e1)	Reimbursement Procedure. – Upon request of the county or municipality, the Department of Transportation shall allow the local government a period of not less than three years from the date construction of the project is initiated to reimburse the Department their agreed upon share of the costs necessary for the project. The Department of Transportation shall not charge a local government any interest during the initial three years.
(f)	Report to General Assembly. – The Department shall report in writing, on a monthly basis, to the Joint Legislative Commission on Governmental Operations on all agreements entered into between counties, municipalities and the Department of Transportation. The report shall state in summary form the contents of such agreements.
(g)	Local Government Acquisition of Rights‑of‑Way. – In the acquisition of rights‑of‑way for any State street, highway, or other transportation project, the county or municipality shall be vested with the same authority to acquire such rights‑of‑way as is granted to the Department of Transportation in this Chapter. In the acquisition of such rights‑of‑way, counties and municipalities may use the procedures provided in Article 9 of this Chapter, and wherever the words "Department of Transportation" appear in Article 9 they shall be deemed to include "county," "municipality" or local governing body, and wherever the words "Administrator," "Administrator of Highways," "Administrator of the Department of Transportation," or "Chairman of the Department of Transportation" appear in Article 9 they shall be deemed to include "county or municipal clerk". It is the intention of this subsection that the powers herein granted to municipalities for the purpose of acquiring rights‑of‑way shall be in addition to and supplementary to those powers granted in any local act or in any other general statute, and in any case in which the provisions of this subsection or Article 9 of this Chapter are in conflict with the provisions of any local act or any other provision of any general statute, then the governing body of the county or municipality may in its discretion proceed in accordance with the provisions of such local act or other general statute, or, as an alternative method of procedure, in accordance with the provisions of this subsection and Article 9 of this Chapter.
(h)	Department Authority Concerning Rights‑of‑Way. – In the absence of an agreement, the Department of Transportation shall retain authority to pay the full cost of acquiring rights‑of‑way where the proposed project is deemed important to a coordinated State transportation system.
(i)	Changes to Local Government Participation Agreement. – Either the local government or the Department of Transportation may at any time propose changes in the agreement setting forth their respective responsibilities by giving notice to the other party, but no change shall be effective until it is adopted by both the municipal governing body and the Department of Transportation.
(j)	Local Governments Party to Rights‑of‑Way Proceeding. – Any municipality that agrees to contribute any part of the cost of acquiring rights‑of‑way for any State transportation system shall be a proper party in any proceeding in court relating to the acquisition of such rights‑of‑way.
(k)	Repealed by Session Laws 2008‑180, s. 6, effective August 4, 2008."
SECTION 24.  G.S. 136‑66.5 reads as rewritten:
"§ 136‑66.5.  Improvements in urban areas to reduce traffic congestion.
(a)	The Department of Transportation is authorized to enter into contracts with municipalities for improvement projects which are a part of an overall plan authorized under the provisions of section 135 of Title 23 of the United States Code, the purpose of which is to facilitate the flow of people and goods in urban areas. In connection with these contracts, the Department of Transportation and the municipalities are authorized to enter into contracts for improvement projects on the municipal system of streets, and pursuant  to contract with the municipalities, the Department of Transportation is authorized to construct or to let to contract the said improvement projects on streets on the municipal street system or other transportation system; provided that no portion of the cost of the improvements made on the municipal system shall be paid from Department of Transportation funds except the proportionate share of funds received from the U.S. Department of Transportation and allocated for the purposes set out in section 135 of Title 23 of the United States Code. Pursuant to contract with the Department of Transportation, the municipalities may construct or let to contract the said improvement projects on the municipal system and the Department of Transportation is authorized to pay over  to the municipalities the proportionate share of funds received pursuant to section 135 of Title 23 of the United States Code; provided that no portion of the costs of the improvements made on the municipal system shall be paid for from the State Highway Fund except those received from the U.S. Department of Transportation and allocated for the purpose set out in section 135 of Title 23 of the United States Code.
(b)	The municipalities are authorized to enter into contracts with the Department of Transportation for improvement projects which are a part of an overall plan authorized under the provisions of section 135 of Title 23 of the United States Code, the purpose of which is to facilitate the flow of traffic in urban areas, on the State highway system streets within the municipalities with the approval of the U.S. Department of Transportation. Pursuant to contract for the foregoing improvement projects, the municipalities are authorized to construct or let to contract the said improvement projects and the Department of Transportation is authorized to reimburse the municipalities for the cost of the construction of the said improvement projects.
(c)	The municipalities in which improvements are made pursuant to section 135 of Title 23 of the United States Code shall provide proper maintenance and operation of such completed projects and improvements on the municipal system streets and other transportation infrastructure or will provide other means for assuring proper maintenance and operation as is required by the Department of Transportation. In the event the municipality fails to maintain such project or provide for their proper maintenance, the Department of Transportation is authorized to maintain the said projects and improvements and deduct the cost from allocations to the  municipalities made under the provisions of G.S. 136‑41.1."
SECTION 25.  G.S. 136‑102.2 reads as rewritten:
"§ 136‑102.2.  Authorization required for test drilling or boring upon right‑of‑way; filing record of results with Department of Transportation.
No person, firm or corporation shall make any test drilling or boring upon the right‑of‑way of any transportation system, under the jurisdiction of the Department of Transportation, until written authorization has been obtained from the owner or the person in charge of the land on which the highway easement is located. A complete record showing the results of the test drilling or boring shall be filed forthwith with the chairman [Secretary] of the Department of Transportation and shall be a public record. This section shall not apply to the Department of Transportation making test drilling or boring for highway purposes only."
SECTION 26.  G.S. 136‑103.1 reads as rewritten:
"§ 136‑103.1.  Outside counsel.
The Attorney General is authorized to employ outside counsel as he deems necessary for the purpose of obtaining title abstracts and title certificates for transportation system rights‑of‑way and for assistance in the trial of condemnation cases involving the acquisition of rights‑of‑way and other interests in land for the purpose of transportation construction. Compensation, as approved by the Attorney General, shall be paid out of the appropriations from the Highway Fund."
SECTION 27.  G.S. 136‑177 reads as rewritten:
"§ 136‑177.  Limitation on funds obligated from Trust Fund.
In a fiscal year, the Department of Transportation may not obligate more Trust Fund revenue, other than revenue allocated for city streets under G.S. 136‑176(b)(3) or secondary roads under G.S. 136‑176(b)(4) and G.S. 20‑85(b), to construct or improve highways and other forms of transportation than the amount indicated in the following table:
Fiscal Year	Maximum Expenditure
1989‑90	$200,000,000
1990‑91	250,000,000
1991‑92	300,000,000
1992‑93	400,000,000
1993‑94	500,000,000
1994‑95 and following years	Unlimited
The amount of revenue credited to the Trust Fund in a fiscal year under G.S. 136‑176(a) that exceeds the maximum allowable expenditure set in the table above may be used only for preliminary planning and design and the acquisition of rights‑of‑way for scheduled highways and highway improvements to be funded from the Trust Fund."                           
SECTION 28.  This act becomes effective July 1, 2009.