TOWN OF CHAPEL HILL

DRAFT POSITION PAPER

HOUSE BILL 2363 AND SENATE BILL 1894

CONGESTION RELIEF/INTERMODAL TRANSFER FUND

In 2007 the 21^st Century Transportation Committee was formed by North Carolina Governor Michael Easley. The committee was charged with the responsibility to study the transportation infrastructure needs of the state including the following activities:

• Innovative methods to fund transportation needs of the state including an examination of the traditional and non traditional methods of financing transportation infrastructure
• Local funding options for transportation.

The North Carolina legislature is now considering proposed legislation (H 2363 and Senate Bill 1894) that creates a fund for congestion relief to be distributed to eligible local governments and transportation authorities in the form of grants

About H 2363 and S 1894 – Congestion Relief / Intermodal Transfer Bill

. The Congestion Relief / Intermodal Transfer Fund (House Bill 2363) authorizes and outlines the procedures for local elections to adopt a sales and use tax with proceeds being used to support transportation authorities and systems. It also extends the authority for motor vehicle registration fees as well as the motor vehicle rental charge to additional counties

The basic provisions of the bill authorize several funding options at the local level and the creation of a capital fund at the state level for congestion mitigation. Under the proposed legislation the capital fund would be available to transit systems in the Triangle region of the state. Local funding options include:

1. Increasing vehicle registration fees from the current $5.00 to $7.00.
2. Authorizing a motor vehicle rental charge not to exceed 5% in several counties.
3. Authorizing a ½ cent sales tax to be introduced in the three largest urban areas of the state, one of them being the Triangle.
4. The authority to call for a referendum to level a ¼ cent sales tax in selected counties that are contiguous to the three urban areas in the state.

 Under House Bill 2363 the regional transit provider in the triangle area (Triangle Transit) would have the authority to seek a referendum to implement a ½ cent sales tax in the counties of Wake, Orange and Durham. It would be necessary to receive the concurrence of the County Boards of Commissioners in each county in order to offer the referendum. The sales tax will be levied on only non essential items excluding food and medicine.  The legislation also requires that a detailed financial plan for the use of the sales tax be prepared.

The Position of the Town of Chapel Hill

.   Chapel Hill supports legislation that provides funding or encourages public transportation initiatives at the federal, state or local level.  The Town of Chapel Hill believes the Congestion Relief / Intermodal Transfer Fund is a positive step toward the adopted goals of the 21^st Century Committee and is deserving of support.  Chapel Hill applauds the efforts to develop this legislation and supports the overall philosophy of H 2363.

 However, we believe that the legislation should provide the opportunity for predictable, consistent sources of funding for local urban transit systems to adequately plan for growth and service improvements. Systems within the Triangle Transit region like Chapel Hill find themselves at a disadvantage in that they don’t have the ability to utilize the financing mechanisms identified in H 2363 to provide long term predictable funding. We believe this is a short fall in the legislation that needs correction.

The following points are offered as improvements to H 2363 to ensure that there is a greater benefit to regional and local transit systems from this legislation.

1. Include provisions to allocate 20% of the local sales tax revenues to the local jurisdictions that operate urban transit systems.  In the event that the financial plan recommends a different funding allocation, the affected jurisdictions that operate the urban transit systems should approve the financial plan.
2. This source of alternative funding should not be used to supplant local funding already committed for public transit.
3. Include provisions for Wake Durham and Orange counties to initiate the ¼ cent sales tax if they opt out of the ½ cent sales tax.

The Congestion/Intermodal Transfer Fund has the potential to be significant legislation that could provide long term predictable funding to our state’s public transportation systems. We do not have an opportunity to support this type of legislation very often. It is imperative that this legislation be drafted in such a way that it provides a benefit to all transit systems.