Alternative Methods for Highway Funding/Study.

2025-2026 Session Introduced by Jay Adams and 12 co-sponsors

HB 837 directs a consultant-led study to explore alternative highway funding (VMT fees, annual access charges) to replace or supplement the gas tax, with a report due May 1, 2026.

Serial Referral To Finance Stricken

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Purpose

HB 837 directs the Legislative Services Officer (LSO), working with the Joint Legislative Transportation Oversight Committee (JLTOC), to commission an independent consultant to study alternative methods for funding State highways and related infrastructure. The study is intended to identify options to supplement or replace the traditional motor fuel (gas) tax, and to provide legislative recommendations.

Key provisions

Directs LSO and JLTOC to issue a Request for Proposals (RFP) and select a consultant to conduct the study.

Scope of study must include, at minimum:

Fee structures for electric and hybrid vehicles to ensure equitable road-funding contributions. This includes examining Vehicle Miles Traveled (VMT) fees (based on odometer readings or other measurement methods) and alternate approaches such as a flat annual fee tied to average miles traveled.
The concept of an annually assessed State Highway “Access User Fee” applied to all vehicles registered in North Carolina that are not diesel-powered, to be used in lieu of State gas tax payments and current EV/hybrid vehicle fees.

Reporting requirements:

Consultant must report findings and any legislative recommendations to the chairs of the JLTOC, the chairs of the House and Senate Transportation Appropriations Committees, and the Fiscal Research Division.
Deadline for the consultant’s report: May 1, 2026.

Procurement and schedule:

RFP must be issued by November 1, 2025.
Consultant must be selected by January 1, 2026.

Budgetary/fiscal provision:

Directs the Department of Transportation to transfer $125,000 from the Highway Fund to the General Assembly for selection and retention of the consultant.
Funds remain available until the conclusion of the study; any unused funds revert to the Highway Fund.

Who is affected

State entities: LSO, JLTOC, Department of Transportation, General Assembly (budget/oversight committees), Fiscal Research Division.

Private sector: consultants responding to the RFP.

Indirectly affected stakeholders: vehicle owners (particularly electric/hybrid vehicle owners), local governments, transportation planners, and the general public should legislative changes be proposed based on the study.

Timeline / procedural notes

Effective date in the bill text: July 1, 2025.

RFP deadline: November 1, 2025; consultant selected by January 1, 2026.

Final report due: May 1, 2026.

Study is limited to producing findings and recommendations; the bill does not itself change tax or fee law. Any subsequent policy or statutory changes would require separate legislation.

Potential issues the study will inform

Equity between gasoline-powered and non–gasoline-powered vehicle owners in funding roads.

Administrative feasibility, cost, and privacy concerns associated with VMT-based fees.

Revenue stability and predictability compared with the gas tax.

Legal, technical, and enforcement challenges for alternative fee structures.

This bill initiates a time-limited, consultant-led analysis to inform policymakers about viable alternatives to the gas tax and to produce legislative recommendations for North Carolina.

Bill