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Yes: 542 • No: 24
North CarolinaHB 9482025-2026 SessionHouseWALLET
AN ACT TO ENACT THE PROJECTS FOR ADVANCING VEHICLE-INFRASTRUCTURE ENHANCEMENTS (PAVE) ACT.
Sponsored By: Tricia Ann Cotham (Republican)
Signed by Governor
AUTHORITIESCOMMERCECOUNTIESCOUNTY COMMISSIONERSELECTIONSINFRASTRUCTURELOCAL GOVERNMENTMASS TRANSITPRESENTEDPUBLICPUBLIC TRANSPORTATIONRATIFIEDRETAILINGROADS & HIGHWAYSSESSION LAWSTAXATIONTAXES, SALES & USETRANSPORTATIONMECKLENBURG COUNTYCHAPTEREDMETRO TRANSPORT AUTHORITY
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Bill Overview
Analyzed Economic Effects
16 provisions identified: 6 benefits, 1 costs, 9 mixed.
CATS moves and tax proceeds shift
When Mecklenburg County’s new Part IV sales tax takes effect, the Authority receives those tax proceeds and related local transit taxes. On that date, the City must transfer CATS operations to the Authority and start moving other CATS assets under their agreements. The City keeps any CATS assets pledged for debt until the debt is paid. The Authority must cover current‑year debt service on schedule and reimburse the City for buying the Norfolk Southern O‑Line as agreed. The City must keep a $30,000,000 CATS reserve; if used for current‑year debt, the Authority must restore it to $30,000,000. The 1999 interlocal agreement ends and the Metropolitan Transit Commission is dissolved when the tax starts.
More ways to fund transit projects
The State and local governments may give money or property to support the Authority, and DOT may allocate transit funds. The Authority can sell revenue bonds and finance equipment with leases or trust certificates paid from its own transit revenues. Starting July 1, 2025, the Authority can get State matching agreements for federally backed rail projects after required studies, and the State can fund non‑federal fixed guideway projects, including DOT’s admin costs. From July 1, 2025, metro transit authorities can use certain DOT distributions, receive member towns’ allocated funds by agreement, and issue bonds for capital costs. The Authority can also claim annual refunds of sales and use taxes it pays on direct purchases.
Stronger financing and purchasing tools for transit
The Authority’s property and income are exempt from State taxes, and interest on its bonds is State tax‑free; private lessees remain taxable on their leaseholds and income. Cities may treat certain local tax receipts as project revenues and issue or secure bonds for transit with system revenues or collateral. A metropolitan transit authority counts as a “Municipality” under the bond law, broadening access to these finance tools. The definition of public transportation now includes micro‑transit, bike and pedestrian links, bus lanes, and some tunnels. The Authority may buy supplies from vendors who won comparable public bids within 60 months if prices are as good or better and the board approves.
CATS workers move to the new Authority
If the 1% Mecklenburg tax takes effect, most CATS employees transfer from the City to the Authority on the tax’s start date. Some positions or named people may be excluded by law or agreement. Check whether your job is listed for exclusion.
New metropolitan transit authority and board
The law authorizes a Metropolitan Public Transportation Authority for a single county over 1,000,000 people with light rail (such as Mecklenburg). The county forms it by resolution after a public hearing; changing the articles or bylaws needs a 75% board vote. The Authority’s area starts as the county and can add a neighboring county only if both boards approve by at least 75%. It cannot take over an existing system without the owner’s consent. A 27‑member board represents the county, the largest city, other towns, and State appointees; members must meet term, residency, experience, and ethics limits. The Authority may receive federal transit funds as a Designated Recipient. If this Article conflicts with another law, this Article controls, and the law clarifies which type of authority each tax Part covers.
Land and utility moves for transit
The Authority can get property for transit by purchase, lease, or eminent domain under State law. It can require utilities and railroads to relocate lines or equipment where the system will run. The Authority must provide new locations and pay relocation costs, after subtracting salvage value and any added capacity.
Rail incidents: insurance and claim limits
Once trains run, the Authority must carry at least $200,000,000 in liability insurance per accident. Policies can have a self‑insured part up to $5,000,000. The Authority is treated like a city for lawsuits and must carry at least $20,000,000 in coverage per incident. Total payouts for a single accident are capped at $200,000,000 or the insurance available. The Authority can contract with railroads to split who pays for claims.
Rail spending cap and Red Line first
No more than two‑thirds of the Authority’s funds can go to rail over any 30‑year period. The Authority must complete at least 50% of the Red Line before finishing any other rail project and must get design and station input from Cornelius, Davidson, and Huntersville (and Mooresville if extended). The Authority must repay Charlotte for buying the Norfolk Southern O‑Line up to the city’s actual cost on a jointly agreed schedule. The county cannot end the tax until tax‑backed debts are paid and Charlotte is fully reimbursed; ending the tax does not erase taxes due before repeal.
Transit service area and rates
The Authority runs public transit and can own, build, and operate transit facilities. Its board sets the service area; expanding in‑state needs approval from affected local boards. The Utilities Commission no longer sets the Authority’s rates, fees, routes, or schedules inside its area. Local transit and taxi rules stay in force unless the local government agrees to new rules. The Authority cannot use its equipment for charters or tours unless federal transit rules allow it. If the Authority takes over CATS operations, any lines outside its territory that already run can keep running without new votes.
How the new transit board works
The law sets clear rules for the transit board. A majority is a quorum, each trustee gets one vote, and the appointing body can remove a trustee and fill vacancies. The board may create advisory committees. The Authority must follow State fiscal control rules in Chapter 159. The board can end the Authority only when it has no debt and the county board ratifies it; assets then move to a local unit that accepts them. If Mecklenburg County creates the Authority, two trustee seats are picked on recommendations from the Charlotte Regional Business Alliance and the Foundation for the Carolinas.
Required studies and plans for CATS transfer
If Mecklenburg County creates the Authority, it must publish a legal and financial transfer study by January 1, 2026. Within one year of enactment, it must adopt bylaws and conflict rules, plan HR and pension steps to join the Local Government Employees’ Retirement System, and set a timeline to move CATS employees. It must prepare financial, operations, IT, cybersecurity, and asset transfer plans, seek needed approvals, and negotiate O‑Line reimbursement terms. Within one year, it must also complete a value‑engineering study for the Silver Line East and look at funding options like taxes, service districts, TIF, partnerships, ads, or donations. The Authority must finish all required environmental and economic studies for transit projects on time.
State audits and funding protections in Mecklenburg
Starting July 1, 2025, the State Auditor may review how Part IV tax money is used for projects in the State’s priority system; local governments and the DOT must give full access, and reports go to legislators within 30 days of finalization. Also starting July 1, 2025, DOT cannot cut Mecklenburg municipal or State‑project funding because of this law unless the General Assembly allows it. DOT may not lower highway project ratings for Charlotte, Cornelius, Davidson, Huntersville, Matthews, Mint Hill, or Pineville based on local funding participation.
Optional 0.5% county transit sales tax
A county may add a 0.5% local sales tax for transit if voters approve. You pay 0.5% more on taxable purchases in that county when it takes effect. The Secretary of Revenue sends net proceeds to the largest transit authority that serves the county, and not to any authority that does not run service. Counties that levy this tax must pass proceeds to the largest metropolitan transit authority, and those dollars may replace existing local transit funds. The tax cannot end while bonds or other debts backed by the tax are still unpaid; refinancing to lower payments is allowed without extending maturity.
1% sales tax for Mecklenburg transit and roads
Mecklenburg County may add a 1% local sales tax if voters approve, an Authority exists, and public transit is operating. You pay 1% more on taxable purchases; state‑exempt food stays exempt. Money goes out monthly: 60% to the transit Authority for public transit, and 40% to eligible towns for roads. Each town (except Charlotte) gets 125% of the larger of its street‑miles share or a weighted 75% population/25% miles share; Charlotte gets the rest. Towns must spend these funds only on roads and keep local road spending at least at their average from FY2014–15 through FY2023–24. Towns must file a yearly certified report of non‑state street miles. Recipients may count these funds as “revenues” under state local‑finance rules. If the referendum fails, CATS must publish a long‑term transit plan within one year, including frequent express service to the airport.
Faster RFP buying for transit agencies
Starting July 1, 2025, transit boards may use a formal RFP process instead of sealed bids. Boards must state why this method fits and certify they followed the rules. Proposals stay private until 14 days before award.
New reporting and tax data-sharing rules
Starting July 1, 2025, metro transit authority board appointments must be reported each year to the Secretary of State by September 1. Also starting July 1, 2025, county tax officials may share needed local income or receipts data with regional or metropolitan transit authorities to carry out required duties.
Sponsors & Cosponsors
Sponsor
Tricia Ann Cotham
Republican • House
Cosponsors
Mary Belk
Democratic • House
Laura Budd
Democratic • House
Becky Carney
Democratic • House
Carla D. Cunningham
Independent • House
Aisha O. Dew
Democratic • House
Julia Greenfield
Democratic • House
Pricey Harrison
Democratic • House
Beth Helfrich
Democratic • House
Jordan Lopez
Democratic • House
Nasif Majeed
Independent • House
Roll Call Votes
House vote • 6/26/2025
HB 948: The P.A.V.E. Act.
Yes: 101 • No: 5 • Other: 11
Senate vote • 6/26/2025
HB 948: The P.A.V.E. Act.
Yes: 39 • No: 3 • Other: 8
Senate vote • 6/25/2025
HB 948: The P.A.V.E. Act.
Yes: 46 • No: 0 • Other: 4
Senate vote • 6/25/2025
HB 948: The P.A.V.E. Act.
Yes: 42 • No: 4 • Other: 4
House vote • 6/24/2025
HB 948: The Projects for Advancing Vehicle-Infrastructure Enhancements (P.A.V.E.)
Yes: 104 • No: 5 • Other: 9
House vote • 6/18/2025
HB 948: The P.A.V.E. Act.
Yes: 108 • No: 1 • Other: 9
House vote • 6/18/2025
HB 948: The P.A.V.E. Act.
Yes: 102 • No: 6 • Other: 9
Actions Timeline
Ch. SL 2025-39
7/1/2025HouseSigned by Gov. 7/1/2025
7/1/2025HousePres. To Gov. 7/1/2025
7/1/2025HouseRatified
6/30/2025HouseOrdered Enrolled
6/26/2025HouseConcurred In S Com Sub
6/26/2025HouseAdded to Calendar
6/26/2025HouseSpecial Message Received For Concurrence in S Com Sub
6/26/2025HouseSpecial Message Sent To House
6/26/2025SenateEngrossed
6/26/2025SenatePassed 3rd Reading
6/26/2025SenatePassed 2nd Reading
6/25/2025SenateAmend Adopted A1
6/25/2025SenatePlaced on Today's Calendar
6/25/2025SenateReptd Fav
6/25/2025SenateRe-ref Com On Rules and Operations of the Senate
6/24/2025SenateCom Substitute Adopted
6/24/2025SenateReptd Fav Com Substitute
6/24/2025SenateRef to Finance. If fav, re-ref to Rules and Operations of the Senate
6/24/2025SenatePassed 1st Reading
6/24/2025SenateSpecial Message Received From House
6/24/2025SenateSpecial Message Sent To Senate
6/24/2025HouseOrdered Engrossed
6/24/2025HousePassed 3rd Reading
6/24/2025HousePlaced On Cal For 06/24/2025
6/18/2025House
Bill Text
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