Senate Transportation panel approves amendment sending remaining motor-vehicle excise revenue to DOT flexible fund; bill referred to Appropriations

The Senate Transportation Committee approved an amendment to Senate Bill 2,142 that moves the remaining share of motor-vehicle excise tax revenue out of the general fund and into the Department of Transportation’s flexible fund, then voted to pass the bill as amended and refer it to the Appropriations Committee.

Senator Grama said he prepared the amendment (filed as Amendment 25.0818.01001) to ensure excise-tax revenue that historically was used for roads and bridges is routed to the DOT rather than remaining in the general fund. “Those funds should be used for roads and bridges. That was always the intent of that excise tax,” Grama said, arguing that the flexible fund would allow the DOT and appropriators to prioritize the worst roads and bridges across townships and counties.

The amendment responds to concerns that strict eligibility rules in the bill would exclude townships that have not levied exactly an 18-mill property tax. Grama said state tax department data show 433 townships do not meet an 18-mill threshold as currently written and three counties — Rowlett County, Trail County and Steele County — had not yet submitted required data to the state tax department. “If I have some at 17.99 in 2024 yet…they will be excluded,” Grama said.

Larry Sievers, identified in testimony as representing the North Carolina Township Officers Association, said the association “really fervently hopes that…Senate Bill 2,142 remains as a formula fund, as opposed to any grant funding.” Sievers also said townships do not qualify for federal grants and that prior attempts to use federal matching funds required changes in 2023.

Committee members discussed the tradeoffs between a formula allocation to townships and counties and a flexible pool administered by the DOT and overseen through appropriations. Senator Klein and others said appropriators are already working on a broader DOT funding package and could fold the excise-tax stream into that larger prioritization process. Committee members and staff noted other revenue streams under consideration, including legacy-earnings streams that some members estimated might produce additional hundreds of millions for transportation over time and a separate 1% stream that had been described as producing roughly $100 million in future sessions.

The committee first approved Amendment 25.0818.01001 on a roll call that recorded yes votes from Senator Paulson, Senator Romo, Chairman Clemens, Vice Chair Corey, Senator Hogan and Senator Klein. The tally on the amendment was 6 yes, 0 no (recorded names as read by the clerk). The committee then approved final passage of Senate Bill 2,142 as amended and immediately referred the bill to the Appropriations Committee; recorded yes votes included Senator Grama, Chairman Clemens, Vice Chair Corey, Senator Hogan, Senator Klein and Senator Paulson (6 yes, 0 no as read by the clerk).

Supporters said routing the funds into the DOT flexible fund would let appropriators and DOT staff “rack and stack” statewide road and bridge projects and better target limited dollars to the worst segments. Opponents or concerned members pressed that the bill’s original language would exclude townships that narrowly miss the 18-mill threshold and urged clearer eligibility language or additional time for counties to submit tax data.

The committee did not adopt language in the bill to grandfather or otherwise include townships that miss the 18-mill levy by a small margin; members discussed instead referring the matter to appropriations so the larger funding package can be set there. The committee also discussed related bills and revenue streams that Appropriations is handling, and members pointed to an appropriations bill by Senator Thomas that committee members expect will shape final distribution rules.

Votes at a glance: The committee earlier took a separate procedural vote to give a "do pass as amended" recommendation on a bill referenced in the record as Senate Bill 2,381 (the clerk recorded aye votes from Vice Chair Corey, Senator Hogan, Senator Klein, Senator Paulson, Senator Rummel and Chairman Clemens). The committee also recorded a separate vote to "do not pass" on an item listed in the transcript as 02/1991; that motion was moved by Senator Hogan, seconded by Senator Paulson, and the clerk recorded yes votes from Senator Romo, Chairman Clemens, Vice Chair Corey, Senator Hogan, Senator Klein and Senator Paulson; the motion for "do not pass" carried. Those votes were recorded during the same meeting and are reflected in the clerk’s roll calls.

The committee chair said the panel will send Senate Bill 2,142 as amended to the Appropriations Committee for final allocation decisions. No effective dates or implementation schedules were specified in committee action; appropriations will address distribution criteria and the broader DOT budget before the funds are spent.