Mecklenburg Transportation Referendum.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 145

Short Title: Mecklenburg Transportation Referendum. (Local)
Sponsors: Senators Rabon, Craven, and Sawyer (Primary Sponsors).
Referred to: Rules and Operations of the Senate
February 25, 2025
*S145-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO AUTHORIZE SUPPLEMENTAL SOURCES OF REVENUE FOR 2
MECKLENBURG COUNTY F OR LOCAL GOVERNMENT TRANSPORTATION 3
SYSTEM FINANCING. 4
The General Assembly of North Carolina enacts: 5
6
PART I. LEGISLATIVE FINDINGS 7
SECTION 1.1. The General Assembly makes the following findings: 8
(1) Transportation plays a vital role in the State's economy; it makes economic 9
activity possible (e.g., connecting producers to raw materials, workers, and 10
customers) and is a major economic activity in its own right. 11
(2) Multiple research studies show a link between access to transportation and 12
economic mobility. 13
(3) Sound transportation investments lower the costs of moving people and goods, 14
thereby increasing economic productivity and improving standards of living. 15
(4) Some studies have suggested that traffic congestion costs the United States 16
economy over one hundred twenty billion dollars ($120,000,000,000) 17
annually. 18
(5) Potential costs of congestion include those related to increased travel time, 19
added fuel costs, increased unreliability, emissions and environmental 20
damage, excess vehicle operating costs, loss of productivity, increased 21
inventory costs, and higher frequency of cargo delays. 22
(6) Research studies have linked traffic congestion to highe r rates of depression 23
and anxiety, lower job and overall satisfaction, and even increased rates of 24
domestic violence. 25
(7) Traffic congestion is typically a bigger problem in more urbanized and rapidly 26
growing areas. 27
(8) North Carolina is home to urbanized and rapidly growing areas that are 28
experiencing the negative effects of traffic congestion. 29
(9) Congestion begins slowing the employment growth rate in a region at 30
approximately 37 annual hours of commuter delay and halts growth altogether 31
at 180 annual hours of commuter delay. 32
(10) According to the Texas A&M Transportation Institute, the 33
Charlotte-Concord-Gastonia MSA reached 38 annual hours of commuter 34
delay in 2000 and climbed to 53 hours in 2019. 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 145-First Edition
(11) In 20 years, the Charlotte region's population will grow by fifty percent (50%) 1
from 2,600,000 today to 4,100,000 in 2045. 2
(12) As congestion continues to increase, it is estimated that up to 126,100 jobs 3
and three billion dollars ($3,000,000,000) in tax receipts could go unrealized 4
by the end of 2050 in the Charlotte-Concord-Gastonia MSA. 5
(13) Additional sources of transportation funding are needed to help these areas 6
address congestion so as not to impede future economic growth. 7
8
PART II. REVISIONS T O CURRENT MECKLENBUR G COUNTY SALES TAX F OR 9
PUBLIC TRANSPORTATION 10
SECTION 2.1. Reserved. 11
SECTION 2.2. G.S. 105-507.2 reads as rewritten: 12
"§ 105-507.2. Levy and collection Levy, collection, and repeal of sales and use tax. 13
(a) If the majority of those voting in a referendum held pursuant to G.S. 105-507.1 vote 14
for the levy of the tax, the board of commissioners of the county may, by resolution, levy one-half 15
percent (½%) local sales and use taxes in addition to any other State and local sales and use taxes 16
levied pursuant to law. Except as provided in this Part, the adoption, levy, collection, 17
administration, and repeal of these additional taxes shall be in accordance with Article 39 of this 18
Chapter. In applying the provisions of Article 39 of this Chapter to this Part, references to 'this 19
Article' mean 'Part 1 of Article 43 of Chapter 105 of the General Statutes'. 20
(b) No action by a county to repeal a tax levied under this Part may become effective 21
while previously issued or, as provided in this subsection, refinanced, bonds, notes, or other 22
financing secured or payable by receipts derived from the tax allocated to a municipality or a 23
transportation authority by the county remain outstanding. Nothing in this Part obligates a county 24
to exercise any power of taxation or restricts the ability of the county to repeal the tax previously 25
levied. If a county repeals a tax levied under this Part, a municipality or transportation authority 26
may refinance previously issued bonds, notes, or other financing that are secured or payable by 27
receipts for the tax revenue under this Part to reduce debt service as allowed under the law so 28
long as the refinancing does not extend the date of maturity for the previously issued bonds, 29
notes, or other financing." 30
SECTION 2.3. Reserved. 31
SECTION 2.4. G.S. 105-507.3 reads as rewritten: 32
"§ 105-507.3. Distribution and use of taxes. 33
(a) Distribution. – The Secretary shall, on a monthly basis, allocate to each taxing county 34
the net proceeds of the tax levied under this Part by that county. If the Secretary collects taxes 35
under this Part in a month and the taxes cannot be identified as being attributable to a particular 36
taxing county, the Secretary shall allocate these taxes among the taxing counties, in proportion 37
to the amount of taxes collected in each county under this Part in that month and s hall include 38
them in the monthly distribution. 39
The Secretary shall distribute the net proceeds of the tax levied by a county on a per capita 40
basis among the county and the units of local government in the county that operate public 41
transportation systems. to the largest transportation authority that includes the county. No 42
proceeds shall be distributed to a county that does not operate a public transportation system or 43
to a unit of local government transportation authority that does not operate a public transportation 44
system. 45
(b) Use. – A county must allocate the net proceeds distributed to it in accordance with its 46
financial plan adopted pursuant to G.S. 105 -507 and use the net proceeds only for financing, 47
constructing, operating, and maintaining local publ ic transportation systems. Any other unit of 48
local government transportation authority may use the net proceeds distributed to it under this 49
Part only for financing, constructing, operating, and maintaining local public transportation 50
General Assembly Of North Carolina Session 2025
Senate Bill 145-First Edition Page 3
systems. Every unit of government shall use the net proceeds to supplement and not to supplant 1
or replace existing funds or other resources for public transportation systems." 2
SECTION 2.5. Section 2.4 of this act becomes effective only if Mecklenburg County 3
levies a tax authorized under Part IV of this act. If Mecklenburg County levies a tax authorized 4
under Part IV of this act, then Section 2.4 of this act is effective on the same date th at the tax 5
levied under that Part becomes effective. The remainder of this Part is effective when it becomes 6
law. 7
8
PART III. REVISIONS TO CURRENT MECKLENBURG COUNTY U-DRIVE-IT TAX 9
SECTION 3.1. Section 3.1 of S.L. 1997 -417, as added by Section 30 of S.L. 10
2006-162 and amended by Section 2(h) of S.L. 2009-527, reads as rewritten: 11
"SECTION 3.1. A county authorized to impose a tax under Part 2 of Article 43 of Chapter 12
105 of the General Statutes is considered an authority under Article 50 of Chapter 105 of the 13
General Statutes, as enacted by Section 3 of this act, and the board of commissioners of that 14
county is considered the board of trustees of the authority under Article 50. G.S. 105-554 of 15
Article 50 does not apply to the proceeds of a tax imposed by a cou nty considered an authority 16
under this section. The proceeds of a tax imposed by a county considered an authority under this 17
section must be transferred to the largest city in metropolitan public transportation authority 18
including that county operating a p ublic transportation system and used only for financing, 19
constructing, operating, and maintaining a public transportation system. The proceeds may 20
supplant existing funds allocated for a public transportation system. The term 'public 21
transportation system' has the same meaning as defined in G.S. 105-506.1." 22
SECTION 3.2. This Part becomes effective only if Mecklenburg County levies a tax 23
authorized under Part IV of this act. If Mecklenburg County levies a tax authorized under Part 24
IV of this act, then this Part is effective on the same date that the tax levied under that Part 25
becomes effective. 26
27
PART IV. ADDITIONAL MECKLENBURG COUNTY R OADWAY SYSTEMS AND 28
PUBLIC TRANSPORTATION SYSTEMS SALES TAX 29
SECTION 4.1. Title. – This Part is the Mecklenburg County Roadway Systems and 30
Public Transportation Systems Sales Tax Act and may be cited by that name. This Part gives 31
Mecklenburg County an opportunity to obtain an additional source of revenue with which to meet 32
its needs for financing roadway systems and public transportation systems. It provides the County 33
with authority to levy sales and use taxes. All such taxes must be approved in a referendum. 34
SECTION 4.2. Definitions. – The definitions in G.S. 105-164.3, G.S. 105-506.1, 35
and the following definitions apply in this Part: 36
(1) Eligible municipality. – Any of the following municipalities in Mecklenburg 37
County: the City of Charlotte and the Towns of Cornelius, Davidson, 38
Huntersville, Matthews, Mint Hill, and Pineville. 39
(2) Red Line. – A rail project that includes, at a minimum, service from the center 40
of the City of Charlotte through the towns of Cornelius, Davidson, and 41
Huntersville and, provided that agreement is obtained from applicable local 42
governments outside of Mecklenburg County, continues to a point north of 43
the jurisdiction of the Town of Davidson, and in no event shall the terminus 44
be in the Town of Davidson's jurisdiction unless approved by the Town of 45
Davidson. 46
(3) Roadway system. – A roadway together with appurtenances to a roadway 47
which includes, but is no t limited to, plans, designs, and related studies; 48
rights-of-way, whether conveyed by deed or easement; construction, 49
maintenance, and improvements to streets and highways, intersections, 50
streetscapes and landscaping, pedestrian facilities, bicycle facilit ies, parking 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 145-First Edition
lots, curbs, gutters, storm drainage, bridges, overpasses, grade crossings, street 1
lighting, and traffic control devices; utility relocations; publicly accessible 2
electric vehicle charging infrastructure, hydrogen fueling infrastructure, 3
propane fueling infrastructure, natural gas fueling infrastructure, and 4
vehicle-to-grid infrastructure; current and emerging intelligent transportation 5
technologies, including the ability of vehicles to communicate with 6
infrastructure, buildings, and other road users; projects that facilitate 7
intermodal connections between emerging transportation technologies, such 8
as magnetic levitation and hyperloop; protective features, including natural 9
infrastructure, to enhance the resilience of a transportation facility; and 10
measures to protect a roadway system from cybersecurity threats. 11
SECTION 4.3. Exemption of Food. – A tax levied under this Part does not apply to 12
the sales price of food that is exempt from tax pursuant to G.S. 105-164.13B or to the sales price 13
of a bundled transaction taxable pursuant to G.S. 105-467(a)(5a). 14
SECTION 4.4.(a) Advisory Referendum. – The Mecklenburg County Board of 15
Commissioners may direct the county board of elections to conduct an advisory referendum 16
within the County on the question of whether a local sales and use tax at the rate of one percent 17
(1%) may be levied in accordance with this Part. The election shall be held in accordance with 18
the procedures of G.S. 163-287. The Board of Commissioners shall hold a public hearing on the 19
question at least 30 days before the date the election is to be held. 20
SECTION 4.4.(b) Ballot Question. – The form of the question to be presented on a 21
ballot for a special election concerning the levy of a tax authorized by this Part shall be: 22
"[ ] FOR [ ] AGAINST 23
One percent (1%) local sales and use taxes, in addition to the current local sales and 24
use taxes, to be used only for roadway systems and public transportation systems." 25
SECTION 4.5. Levy of Tax. – The Board of Commissioners may, by resolution, 26
levy one percent (1%) local sales and use taxes in addition to any other State and local sales and 27
use taxes levied pursuant to law only if all of the following conditions are satisfied: 28
(1) The majority of those voting in a referendum held pursuant to Section 4.4(a) 29
of this Part vote for the levy of the tax. 30
(2) The General Assembly has enacted authorizing legislation that would allow a 31
public transportation authority (hereafter "the Authority ") that includes 32
Mecklenburg County to be established, and the Authority has been 33
established. 34
(3) At least one eligible municipality or an Authority maintains a public 35
transportation system in the County. 36
SECTION 4.6. Administration. – Except as otherwise provided in this Part, the 37
adoption, levy, collection, administration, and repeal of these additional taxes shall be in 38
accordance with Article 39 of Chapter 105 of the General Statutes. Nothing in this Part obligates 39
Mecklenburg County to exercise any power of taxation or restricts the ability of the County to 40
repeal the tax previously levied. 41
SECTION 4.7. Distribution. – The Secretary of Revenue shall, on a monthly basis, 42
distribute to Mecklenburg County the net proceeds of the tax levied under this Part. Mecklenburg 43
County must distribute forty percent (40%) of the net proceeds of a tax levied under this Part as 44
provided in Section 4.8 of this act and sixty percent (60%) of the net proceeds of a tax levied 45
under this Part as provided in Section 4.9 of this act. 46
SECTION 4.8. Roadway Distribution and Use. – Mecklenburg County must 47
distribute forty percent (40%) of the net proceeds of a tax levied under this Part among the eligible 48
municipalities as provided in this section. Each eligible municipality shall annually submit to the 49
County a copy of the statement certified by a registered engineer or surveyor that is submitted to 50
the Department of Transportation under G.S. 136-41.1(a) of the total number of miles of stree ts 51
General Assembly Of North Carolina Session 2025
Senate Bill 145-First Edition Page 5
in that municipality that are not part of the State highway system. The word "street" as used under 1
this section has the same definition as provided in G.S. 136-41.1(a). Each eligible municipality 2
shall use the net proceeds distributed to it under this section only for costs associated with 3
financing, constructing, operating, or maintaining roadway systems. 4
(1) Procedure. The following amounts must be computed before the distribution 5
of any tax proceeds under this section: 6
a. The monthly amount for each eligible municipality other than the City 7
of Charlotte is equal to one hundred twenty-five percent (125%) of the 8
greater of the following two amounts: 9
1. The amount generated by multiplying the net proceeds 10
distributed under this section during a month by the percentage 11
proportion that the mileage of streets in the eligible 12
municipality that do not form a part of the State highway 13
system bears to the total mileage of the streets that do not 14
constitute a part of the State highway system in all eligible 15
municipalities combined. 16
2. The sum of the following: 17
I. The amount generated by multiplying seventy -five 18
percent (75%) of the net proceeds distributed under this 19
section during a month by the percentage proportion 20
that the population of the eligible municipality bears to 21
the total population of all eligible municipalities 22
according to the most recent annual estimates of 23
population as certified to the Secretary of Revenue by 24
the State Budget Officer. 25
II. The amount generated by multiplying twenty -five 26
percent (25%) of the net proceeds distributed under this 27
section during a month in the percentage proportion 28
that the mileage of streets in each eligible municipality 29
that do not form a part of the State highway system 30
bears to the total mileage of the streets that do not 31
constitute a part of the State highway system in all 32
eligible municipalities combined. 33
b. The monthly amount for the City of Charlotte is the remainder of net 34
proceeds to be distributed under this section during a month after the 35
amounts for the oth er eligible municipalities are determined under 36
Section 4.8(1)a. of this act. 37
c. The annual amount for an eligible municipality is equal to the sum of 38
the 12 monthly amounts for that municipality. 39
d. The baseline amount for an eligible municipality other t han the City 40
of Charlotte is equal to the following: 41
1. For fiscal years beginning on or after the effective date of the 42
levy of the tax but prior to the first full fiscal year beginning 43
on or after one year after the effective date of the levy of the 44
tax, the baseline amount is zero. 45
2. For fiscal years beginning on or after at least one full fiscal 46
year after the effective date of the levy of the tax but before the 47
release of census data by the U.S. Census Bureau for the next 48
decennial census, the annual amount as calculated under 49
Section 4.8(1)c. of this act for the first full fiscal year beginning 50
on or after the effective date of the levy of the tax. 51
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 145-First Edition
3. For later fiscal years, the annual amount as calculated under 1
Section 4.8(1)c. of this act for the first fiscal year beginning on 2
or after the release of census data by the U.S. Census Bureau 3
for the most recent decennial census. 4
e. The baseline amount for the City of Charlotte is zero. 5
(2) Distribution. The distribution of net proceeds under this subdivi sion is as 6
follows: 7
a. For the first 11 months of the fiscal year, the County shall distribute 8
the monthly amount to each eligible municipality. 9
b. For the final month of the fiscal year, the distribution is as follows: 10
1. If the total net proceeds distributed to the County for the fiscal 11
year are less than the total net proceeds distributed to the 12
County for the preceding fiscal year, the County shall 13
distribute the monthly amount to each eligible municipality. 14
2. If the total net proceeds distributed to the County for the fiscal 15
year are greater than the total net proceeds distributed to the 16
County for the preceding fiscal year, the County shall 17
distribute the proceeds as follows: 18
I. If the annual amount for each municipality is greater 19
than the baseline amount for that municipality, the 20
monthly amount. 21
II. Except as provided in Section 4.8(2)b.2.III. of this act, 22
if the annual amount for any municipality is less than 23
the baseline amount for that municipality, then the 24
following: 25
A. The amount to be distri buted to each eligible 26
municipality whose annual amount is less than 27
the baseline amount is the amount needed so 28
that the total amount distributed to that 29
municipality for the fiscal year is equal to the 30
baseline amount. 31
B. The amount to be distributed to the other 32
eligible municipalities is the monthly amount as 33
reduced by this sub -sub-sub-sub-subdivision. 34
The amount of the reduction is equal to the 35
difference between the annual amount and the 36
baseline amount for all eligible municipalities 37
combined that r eceive a distribution under 38
Section 4.8(2)b.2.II.A. of this act multiplied by 39
a percentage. The percentage is equal to the 40
percentage proportion that the population of the 41
eligible municipality bears to the total 42
population of all eligible municipalities subject 43
to distribution under this 44
sub-sub-sub-sub-subdivision according to the 45
most recent annual estimates of population as 46
certified to the Secretary of Revenue by the 47
State Budget Officer. 48
III. If the calculation required in Section 4.8(2)b.2.II.B. of 49
this act would result in the annual amount for any of 50
those eligible municipalities to be lower than that 51
General Assembly Of North Carolina Session 2025
Senate Bill 145-First Edition Page 7
municipality's baseline amount, then the County shall 1
distribute to each eligible municipality the monthly 2
amount. 3
SECTION 4.9. Public Transportation Distribution and Use. – Mecklenburg County 4
must distribute sixty percent (60%) of the net proceeds of the tax levied under this Part to the 5
Authority. The Authority shall use the net proceeds distributed to it under this section only for 6
costs associated w ith financing, acquiring, constructing, operating, and maintaining any 7
combination of real and personal property for a public transportation system. The Authority may 8
accomplish these purposes by undertaking these activities itself or by entering an interl ocal 9
agreement with a municipality in Mecklenburg County that operates a public transportation 10
system to use funds allocated under this section for those purposes as directed by the Authority 11
in the interlocal agreement. An interlocal agreement entered und er this section may include a 12
binding commitment on the part of the Authority to allocate all or a portion of these proceeds to 13
the municipality for a defined number of years or until a defined condition is met, such as the 14
satisfaction of any debt that wa s issued for public transportation systems. In addition, the 15
Authority may enter an agreement with a private entity whereby that entity uses these funds for 16
this purpose as directed by the Authority in the agreement. The net proceeds of a tax levied under 17
this Part that are distributed to the Authority may be included as revenues within the meaning of 18
G.S. 159-81(4), including any modifications of that statute. The following conditions apply to 19
the use of funds distributed under this section: 20
(1) No more th an two -thirds of these funds may be used for the capital and 21
operating costs of rail projects over any period of 30 calendar years combined. 22
Compliance with this section is first determined at the end of the first 30-year 23
period, and then annually thereaft er based on the previous 30 -year period. 24
Nothing in this section will be interpreted to adversely impact the rights of 25
bondholders to any funds distributed or pledged to secure bonds, notes, or 26
other obligations used to finance or refinance real and personal property for a 27
public transportation system. 28
(2) The Authority shall complete at least fifty percent (50%) of the Red Line as 29
evidenced by a scope of work schedule created and submitted by the general 30
contractor or construction manager on the project be fore the completion of 31
any other rail project, absent the existence or occurrence of force majeure 32
events that delay completion of the Red Line or make completion of the Red 33
Line impracticable. For the purposes of this section, a scope of work schedule 34
is defined as a listing of project tasks associated with a project time line that 35
is updated as the Red Line construction project progresses. For the purposes 36
of this section, force majeure events include fire, flood, earthquakes, other 37
elements of nature, acts of war, terrorism, riots, civil disorders, rebellions or 38
revolutions, nuclear or chemical contamination, epidemics, quarantines, acts 39
of the federal or State government, a declared state of emergency, strikes or 40
labor disruptions other than those specific to the Authority, or other conditions 41
beyond its reasonable control and which, by reasonable diligence, the 42
Authority is unable to prevent. Should a force majeure event delay or halt the 43
Red Line project, the Authority shall resume the original Red Line schedule 44
as soon as practicable when the force majeure event has ceased or subsided. 45
Planning, design, and construction work may occur simultaneously on other 46
rail projects, but only to the extent that those activities do not interfere with or 47
delay the completion of the Red Line. 48
(3) The Authority shall solicit input from the Towns of Cornelius, Davidson, and 49
Huntersville on all aspects of the Red Line design, including conceptual 50
General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 145-First Edition
design, construction drawings, and station location. If the Red Line extends to 1
the Town of Mooresville, the Authority shall also solicit input from that Town. 2
(4) The Authority shall reimburse the City of Charlotte for the acquisition of the 3
Norfolk Southern O-Line and related property. The amount to be reimbursed 4
may not be more than the cost to the City of Charlotte to acquire the property 5
from Norfolk Southern, including any costs for indebtedness incurred by the 6
City with respect to the acquisition. The Authority and the City of Charlotte 7
shall jointly agree to a schedule for reimbursement of these costs. 8
SECTION 4.10. Repeal of Tax. – The Mecklenburg County Board of 9
Commissioners may by resolution repeal the levy and imposition of the tax in the County as 10
provided in G.S. 105-473(c). The Board of Commissioners, upon adoption of a repeal resolution, 11
shall cause a certified copy of the resolution to be delivered immediately to the Secretary of 12
Revenue. No liability for any tax levied under this Part that attached prior to the effective date 13
on which a levy is repealed shall be discharged as a result of such repeal, and no right to a refund 14
of tax or otherwise that accrued prior to the effective date on which a levy is repealed shall be 15
denied as a result of such repeal. If a county repeals a tax levied under this Part, the Authority or 16
a municipality may refinance previously issued bonds, notes, or other financing that are secured 17
or payable by receipts for the tax revenue under this Part to reduce debt service as allowed under 18
the law so long as the refinancing does not extend t he date of maturity for the previously issued 19
bonds, notes, or other financing. No repeal of taxes levied and imposed under this Part shall be 20
effective until the latest of the following: 21
(1) The end of the fiscal year in which the repeal resolution was adopted. 22
(2) The date by which all previously issued or, as provided in this section, 23
refinanced bonds, notes, or other financing obtained by the Authority or a 24
municipality secured or payable by receipts from the tax levied under this Part 25
have been satisfied. 26
(3) The date by which the Authority has fully reimbursed the City for the purchase 27
of the O-Line as required by Section 4.9(4) of this act. 28
29
PART V. RESERVED 30
31
PART VI. RESERVED 32
33
PART VII. RESERVED 34
35
PART VIII. RESERVED 36
37
PART IX. MISCELLANEOUS PROVISIONS 38
SECTION 9.1. Reserved. 39
SECTION 9.2. This act becomes law only if the Current Operations Appropriations 40
Act for the 2025-2026 fiscal year becomes law. Except as otherwise provided, this act is effective 41
at the time the Current Operations Appropriations Act for the 2025 -2026 fiscal year becomes 42
law. 43