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Bill Summary · HB 652

Summary — HB 652: Transportation Goods Unit Pricing Cost (North Carolina)

Status: Introduced; text amends G.S. 136‑18.05(b)(1a)
Effective date (per bill): July 1, 2025

Purpose / Intent

The bill updates how the North Carolina Department of Transportation (NCDOT) establishes baseline unit prices and targets for “transportation goods” (materials/supplies used in highway maintenance and construction). The intent is to make baseline pricing reflect more recent, averaged data so unit‑price targets better track current costs and drive savings from efficiencies.

Key provisions

  • Revises G.S. 136‑18.05(b)(1a) to change the method for forming baseline unit prices and annual targets:
    • Current statute: baseline prices were to be formed using each Highway Division’s expenditures from the 2015–2016 fiscal year (with baseline set by Dec 1, 2015).
    • Bill change: baseline unit prices and future targets are to be formed “based upon a rolling average of the three previous fiscal years.”
  • Retains the existing 10% maximum variance rule:
    • Beginning Jan 1, 2016 (statutory reference retained), no Highway Division may exceed a 10% variance over the baseline unit price for the year.
    • The 10% allowance is explicitly intended to account for regional differences in product mixes.
  • Reporting and oversight:
    • NCDOT must monitor unit pricing annually.
    • If a Highway Division exceeds the 10% threshold, NCDOT must report (by Feb 15 following the calendar year end) to:
    • Joint Legislative Transportation Oversight Committee
    • Fiscal Research Division of the General Assembly
    • Chairs of the House and Senate Appropriations Committees on the Department of Transportation
    • Report must explain reasons for the variance and steps to return the Division to compliance.
  • Encourages annual reductions in unit pricing as efficiencies are realized (“In order to drive savings, unit pricing may be reduced annually as efficiencies are achieved.”)

Who is affected

  • Primary: North Carolina Department of Transportation and its Highway Divisions (procurement, budget, and operations for highway materials).
  • Secondary: Contractors and suppliers whose pricing and contracts may be affected by updated baselines and targets.
  • Legislative oversight bodies that receive required reports.

Potential impact

  • Administrative: NCDOT will adjust data collection and baseline-calculation processes to compute three‑year rolling averages; continued annual tracking and reporting duties remain.
  • Financial: Baselines that reflect recent multi‑year averages could be higher or lower than the prior 2015–16 single year baseline, affecting allowable unit‑price targets and potential savings goals. The change aims to better align targets with current costs and encourage cost-reduction over time.
  • Operational: Highway Divisions that experience short‑term price spikes may be required to justify variances and take corrective actions to return within the 10% threshold.

Effective date and procedural note

  • Bill text sets the act to become effective July 1, 2025.

Compiled from official sources — confirm details with the bill’s official record.

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