Summary — HB 948: Projects for Advancing Vehicle‑Infrastructure Enhancements (P.A.V.E.) Act
Status: Ratified (Session Law 2025‑39); Presented to Governor / Signed 7/1/2025
Primary sponsor: Rep. Cotham (NC) — multiple committee actions and amendments; enrolled 6/26/2025; ratified 6/30/2025; signed 7/1/2025.
Note: The document provided also contains unrelated HB 948 texts from other states (an Illinois technical amendment to the Lobbyist Registration Act and a Maryland noise‑abatement bill). This summary focuses on the North Carolina P.A.V.E. Act (HB 948 / SL 2025‑39).
Purpose and intent
- To authorize and revise the statutory framework for a local sales‑and‑use tax dedicated to public transportation in Mecklenburg County (the P.A.V.E. Act), modernize definitions for “public transportation system” and “transportation authority,” and revise how proceeds from related local taxes are distributed and used. It also revises provisions governing the county’s “U‑Drive‑It” tax proceeds.
Key provisions and changes
- Definitions (G.S. 105‑506.1): Expands/clarifies the definition of “public transportation system” to expressly include various modes and infrastructure (e.g., tunnels, automated transport, interconnected bicycle/pedestrian infrastructure, bus lanes and busways) while excluding general streets/roads except where dedicated to transit or necessary for access.
- Local transit sales tax (G.S. 105‑507.2 and G.S. 105‑507.3):
- Provides that, following a county referendum that approves it, the Mecklenburg County Board of Commissioners may levy a local sales and use tax of one‑half percent (0.5%) in addition to other State/local sales taxes.
- Preserves bondholder protections: a county cannot repeal such a tax while bonds, notes, or other financing secured by tax receipts remain outstanding (or refinanced under specified limits).
- Distribution: The Secretary of Revenue will allocate net proceeds monthly. The bill modifies distribution language so proceeds are directed to the “largest transportation authority that includes the county” (rather than per‑capita among county and local units that operate transit), and disallows distribution to counties/units that do not operate public transportation systems or to authorities that do not operate such systems.
- Use restrictions: Net proceeds may be used only to finance, construct, operate, and maintain local public transportation systems and must supplement — not supplant — existing funding. Funds distributed to units other than the levying county may be treated as revenues under G.S. 159‑81(4).
- Effective timing: Key distribution language (Section 2.4) becomes effective only if Mecklenburg County actually levies the tax under Part IV of the Act; otherwise, the rest of the Part is effective upon enactment.
- U‑Drive‑It tax revisions (Part III / S.L. 1997‑417 as amended): Clarifies that a county imposing the Part 2 tax is considered an “authority” under Article 50; proceeds of the U‑Drive‑It tax imposed by such a county must be transferred to the largest city in the metropolitan public transportation authority that includes the county (text amended from prior law).
- Administrative and finance provisions remain consistent with Article 39 and other applicable statutes, with cross‑references to implementation and rehearing/appeal processes implied in the bill text.
Who is affected
- Primary: Mecklenburg County residents and businesses (the 0.5% local sales tax applies only if a local referendum approves it).
- Local governments and transit entities: the county, municipalities within Mecklenburg, and regional or metropolitan transportation authorities that include Mecklenburg County (allocation rules may shift where funds flow — e.g., to a central transportation authority).
- Bondholders/financiers: protections preserved for debt serviced by tax receipts.
- Transit systems and riders: increased or reorganized funding for planning, capital projects, operations, maintenance, and integrated multimodal infrastructure, if the tax is levied.
Procedural/timeline highlights
- Introduced and moved through multiple committee stages, received committee substitutes and amendments (A1), passed both chambers (final legislative activity June 24–26, 2025).
- Enrolled and ratified late June 2025; signed by Governor July 1, 2025; enacted as Session Law 2025‑39.
- Certain provisions (notably the revised distribution rule) are expressly conditioned to become effective only if Mecklenburg County levies the tax authorized under the Act (i.e., implementation depends on local referendum/levy choices and subsequent county action).
Potential impacts and considerations
- If Mecklenburg voters approve the referendum and the county levies the 0.5% tax, the law creates a stable local revenue source for public transit projects and operations and may increase the county/authority’s ability to issue transit‑backed bonds.
- The shift toward routing proceeds to the “largest transportation authority” could centralize funding and change allocations to municipalities or smaller transit operators; legal and fiscal coordination among county, municipalities, and authorities will be required.
- The requirement that proceeds supplement — not supplant — existing funds aims to preserve baseline local transit funding levels.
- Taxpayer impact is a potential 0.5% increase in local sales tax only upon referendum approval.
For full statutory text and enacted language, see Session Law 2025‑39 (HB 948 — P.A.V.E. Act) and the amended sections of G.S. 105‑506.1, 105‑507.2, and 105‑507.3.
