Authorize Maint. Bonds/Subdivision Streets.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 685

Short Title: Authorize Maint. Bonds/Subdivision Streets. (Public)
Sponsors: Senator Smith (Primary Sponsor).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S685-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO IMPLEMENT MAINTENANCE AND ACCE PTANCE GUARANTEES FO R 2
SUBDIVISION DEVELOPM ENTS TO PREVENT THE CREATION OF 3
UNMAINTAINED PUBLICLY DEDICATED ROADS. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. Article 8 of Chapter 160D of the General Statutes is amended by 6
adding a new section to read: 7
"§ 160D-804.2. Maintenance and acceptance guarantees for subdivision streets. 8
(a) To ensure proper maintenance of publicly dedicated subdivision roadways and 9
compliance with G.S. 160D-804 and other development regulation requirements, a county may 10
require posting of a maintenance guarantee, by the developer, for any publicly dedicated roadway 11
to be transferred for public maintenance under G.S. 136-102.6 or under any applicable municipal 12
ordinance. 13
(b) For purposes of this section, the following definitions apply: 14
(1) Administering entity . – The Board of Transportation or a municipality, 15
whichever is applicable. 16
(2) Roadway system. – The State highway system or a municipal street system, 17
as each is defined in G.S. 136-66.1, whichever is applicable. 18
(c) For purposes of this section, all of the following apply with respect to maintenance 19
and acceptance guarantees: 20
(1) Type. – The type of maintenance and acceptance guarantee shall be at the 21
election of the developer. The term "maintenance and acceptance guarantee" 22
includes any of the following forms of guarantee: 23
a. Surety bond issued by any company authorized to do business in this 24
State. 25
b. Letter of credit issued by any financial institution licensed to do 26
business in this State. 27
c. Other forms of guarantee that provide equivalent security to a surety 28
bond or letter of credit. 29
(2) Use. – Maintenance and acceptance guarantees shall only be used to ensure 30
that a road or street meets the minimum standards set by the administering 31
entity prior to acceptance to the applicable roadway system. Once the road or 32
street meets all applicable requirements set by the administer ing entity, the 33
developer may utilize the maintenance and acceptance guarantee to meet 34
minimum standards for acceptance into the roadway system. If the developer 35
is unable, as determined by the county, to ensure the road meets minimum 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 685-First Edition
standards for accepta nce, the county may utilize the maintenance and 1
acceptance guarantee and bid, pursuant to Chapter 143 of the General Statutes, 2
for the repair of the roadway using funds from the maintenance and 3
acceptance guarantee in order to meet such minimum standards. 4
(3) Required acceptance. – If the road or street has not been accepted into the 5
applicable roadway system for maintenance for a period of four years after the 6
plat has been recorded in the office of the appropriate register of deeds, the 7
administering entity shall automatically accept the road or street into its 8
respective roadway system for maintenance. 9
(4) Petition. – Once the maintenance and acceptance guarantee has been used to 10
ensure the road or street meets the minimum standards of the respective 11
administering entity, the county shall submit a petition to the administering 12
entity for road addition to its roadway system within five days of completed 13
construction, in compliance with G.S. 136-102.6(d). 14
(5) Release. – The following apply to the return or release of any maintenance 15
and acceptance guarantee established under this section: 16
a. The maintenance and acceptance guarantee shall be returned or 17
released, as appropriate, including any funds not utilized, once the road 18
or street has been acc epted for maintenance by the administering 19
entity, within 30 days of acceptance. 20
b. If the road or street is accepted pursuant to subdivision (3) of this 21
subsection, the maintenance and acceptance guarantee shall be 22
released by the county to the respective administering entity in an 23
amount commensurate with the reasonable costs necessary for the road 24
or street to meet minimum standards for acceptance into the respective 25
roadway system. Any funds released under this sub-subdivision may 26
be utilized absent any occupancy requirement. 27
(6) Amount. – The posted amount of the maintenance and acceptance guarantee 28
shall be set by the county but shall not exceed twenty percent (20%) of the 29
reasonably estimated total cost of construction for the road or street secured 30
by the maintenance and acceptance guarantee, as determined by the county, 31
of the transportation improvements at the time the guarantee is issued. If the 32
maintenance and acceptance guarantee is not sufficient to cover the total costs 33
to ensure that the road meets the standards set by the administering entity, the 34
county or administering entity may use other funds to supplement the cost. 35
When calculating the estimated total cost of construction for the road or street, 36
the county shall include costs for labor and materials. Where applicable, the 37
costs shall be based on unit pricing. 38
(7) Timing. – A county, at its discretion, shall require the maintenance and 39
acceptance guarantee to be posted either at the time the plat is recorded or 40
prior to recordation of the plat. 41
(8) Legal responsibilities. – No person shall claim any rights under or to any 42
maintenance and acceptance guarantee provided pursuant to this section or in 43
the proceeds of any such maintenance and acceptance guarantee other than the 44
following: 45
a. The county for which the maintenance and acceptance guarantee is 46
provided. 47
b. The developer at whose request or for whose benefit the maintenance 48
and acceptance guarantee is given. 49
General Assembly Of North Carolina Session 2025
Senate Bill 685-First Edition Page 3
c. The person or entity issuing or providing the maintenance and 1
acceptance guarantee at the request of or for the benefit of the 2
developer. 3
d. The administering entity , pursuant to subdivision (3) of this 4
subsection. 5
(9) Multiple guarantees. – The developer shall have the option to post one type of 6
a maintenance and acceptance guarantee as provided for in subdivision (1) of 7
this subsection, in lieu of multiple bonds, letters of credit, or other equivalent 8
security, for all development matters related to the same project requiring 9
maintenance and acceptance guarantees." 10
SECTION 2. This act is effective when it becomes law. 11