House committee substitute to the 1st edition makes the following changes. Deletes the provisions of the 1st edition and replaces it with the following.

Strategic Prioritization Funding Plan for Transportation Investments. Creates new Article 14B, Strategic Prioritization Funding Plan for Transportation Investments, in GS Chapter 136. Creates the new Transportation Investment Strategy Formula (formula), applicable to Highway Trust Fund funds and federal aid funds. Lists funds excluded from the formula. Provides that bridge replacement, interstate maintenance, and highway safety improvement are included in the applicable formula category but are subject to the prioritization criteria. Provides that 40% of the funds are to be used for statewide strategic mobility projects (defined in the act), 40% are to be used for regional impact projects (defined in the act) and allocated by population of distribution regions, and 20% is to be allocated in equal share to each of the Department of Transportation (DOT) divisions and used for division need projects (defined in the act). Establishes criteria for using funds under each of the project types. Nonhighway projects are to be evaluated through a separate prioritization process that complies with specified requirements. Sets out requirements that must be met before varying from the formula. Allows DOT to revise highway project selection ratings based on local government funding initiatives and capital construction funding directly attributable to highway toll revenue. Provides that projects authorized for construction after November 1, 2013, and contained in the 10-year DOT work program are eligible for a bonus allocation. Allows the Metropolitan Planning Organization, Rural Transportation Planning Organization, or the local government to choose to apply its bonus allocation in one or more of the following: statewide strategic mobility projects, regional impact projects, or division needs projects. Effective July 1, 2013.

Effective July 1, 2019, further amends GS 136-189.11(e)(2) to amend the provisions for calculating the variance.

Requires DOT to issue a draft revision to the State Transportation Improvement Program no later than January 1, 2015, and requires the Board of Transportation to approve the revised program no later than July 1, 2015.

Secondary Road Changes. Amends GS 20-85 to delete the requirement that $15 of each title fee be added to the amount allocated for secondary roads.

Amends GS 136-44.2 to include improvement programs to those for which the Director of the Budget is to include in the appropriation act an enumeration of the purposes or objects of the proposed expenditure. Makes conforming changes. Effective July 1, 2013, and expires June 30, 2014.

Effective July 1, 2014, amends GS 136-44.2 to no longer require construction projects to be included in the appropriations act, leaving only maintenance and improvement.

Amends GS 136-44.2A to require an annual allocation from the Highway Fund to the DOT for secondary road construction programs (was, for secondary road improvement programs in a sum equal to the allocation made from the Highway Fund under GS 136-414.1(a)). Makes conforming changes, deleting specified sum to be allocated among counties. Effective July 1, 2013, and expires June 30, 2014. Repeals GS 136-44.2A entirely effective July 1, 2014.

Repeals GS 136-44.2C (special appropriations for state construction).

Enacts new GS 136-44.2D requiring DOT to expend funds allocated to the paving of unpaved secondary roads for the paving of unpaved secondary roads based on a statewide prioritization. Provides that the section does not require DOT to pave any roads that do not meet secondary road system addition standards. Prohibits using the Highway Trust Fund from funding the paving of unpaved secondary roads.

Amends GS 136-44.5 to require that the amounts appropriated by law for secondary road construction, excluding unpaved secondary road funds, are to be allocated among counties abased on the total number of secondary miles in a county in proportion to the total state-maintained secondary road mileage. Makes conforming changes. Effective July 1, 2013, and expires June 30, 2014. Repeals GS 136-44.5 in its entirety, effective July 1, 2014.

Amends GS 136-44.6 to require DOT to develop a uniformly applicable formula for the allocation of secondary roads improvement funds. Provides that the statute does not apply to projects to pave unpaved roads.

Appropriates $15 million for 2013-14 from the Highway Fund for the secondary road construction program and $12 million in recurring funds for 2013-14 from the Highway Fund for the paving of unpaved roads.

Amends GS 136-44.7 to delete the provision making DOT responsible for developing criteria for improvements and maintenance of secondary roads. Authorizes the Divisions Engineer to reduce the width of a right-of-way to less than 60 feet to pave an unpaved secondary road with allocated funds, as long as the safety of the public is not compromised and the minimum accepted design practice is satisfied.

Amends GS 136-44.8 to require DOT to provide the board of county commissioners in each county with the proposed secondary road construction program and a list of roads proposed for the annual paving program. Deletes other provisions concerning providing notice of secondary road-paving projects and related meetings. Requires that the DOT follow the secondary road construction program and unpaved roads paving program adopted by the Board of Transportation. Makes conforming changes. Effective July 1, 2013, and expires June 30, 2014.

Amends GS 136-44.8, effective July 1, 2014, removing new language concerning the secondary road construction program.

Repeals GS 136-182 (supplement for secondary road construction).

State Aid to Municipalities/Powell Bill Changes. Amends GS 136-41.1 to annually appropriate from the State Highway Fund an amount equal to 10.4% of the net amount after refunds that was produced during the fiscal year by the fuel tax imposed under Article 36C and on the equivalent amount of alternative fuel taxed under Article 36D of GS Chapter 105. Deletes the provision concerning additional revenue allocation. Requires the funds allocated under the statute to be paid to the municipalities on or before October 1 and January 1 of each year.

Repeals GS 136-181 (supplement for city streets).

Conforming Changes. Amends GS 105-187.9 to delete the provision that required the transfer of specified amounts from the taxes deposited into the Trust Fund to the General Fund and concerning the transfer of funds from the Trust Fund to the Mobility Fund.

Amends GS 136-18 to provide that the infrastructure banking program  must not modify the formula for the distribution funds established by GS 136-189.10 (was, not modify the regional distribution formula for the distribution of funds under GS 136-17.2A).

Repeals GS 136-17.2A (Distribution formula for funds expended on Intrastate System and Transportation Improvement Program).

Amends GS 136-44.50(a) to provide that a transportation corridor official map may be adopted or amended by the Wilmington Urban Area Metropolitan Planning Organization for projects R-3300 and U-4751 (was, for any project that is within its urbanized boundary and identified in GS 136-179).

Amends GS 136-66.3 to delete the provision prohibiting a Transportation Improvement Plan (TIP) disadvantage for participating in a state transportation system improvement project, and the provision limiting agreements for additional total funding for highway construction in exchange for participation in any project contained in the TIP. Provides that any state or federal funds allocated to a project that are made available by county or municipal participation in a project contained in the TIP are subject to GS 136-189.11 (was, must remain in the same funding region that the funding was allocated to under the distribution formula).

Amends GS 136-89.192 to replace references to the distribution formula with the formula under GS 136-189.11.

Amends GS 136-175 to remove the definition for intrastate system.

Amends GS 136-176 to delete the provisions requiring that specified funds be used for specified purposes. Deletes the reporting requirements. Provides that a sum, in the amount appropriated by law, may be used each fiscal year by the DOT for expenses to administer the Trust Fund (was, a sum not to exceed 4.8% of the amount of revenue deposited in the Trust Fund). Specifies that funds remaining in the Trust Fund are to be allocated and used as specified in GS 136-189.11 and deletes the specified allocations. Decreases the annual appropriation for the Turnpike Authority from the Highway Fund from $112 million to $49 million and deletes specified funding for the Mid-Currituck Bridge and for the Garden Parkway. Deletes the provision that if funds are received under 23 USC Chapter 1 for a project for which funds in the Trust Fund may be used, the amount of federal funds received plus the amount of any Highway Funds that were used to match the federal funds may be transferred from the Trust Fund to the Highway Fund for projects in the TIP.

Repeals the following: GS 136-177 (Limitation on funds obligated from Trust Fund), GS 136-177.1 (Requirement to use federal funds for Intrastate System projects and urban loops), GS 136-178 (Purpose and description of Intrastate System), GS 136-179 (Projects of Intrastate System funded from Trust Fund), GS 136-180 (Urban loops), GS 136-184 (Reports by Department of Transportation), GS 136-185 (Maintenance reserve created in certain circumstances), GS 136-187 (Creation of the North Carolina Mobility Fund), GS 136-188 (Use of North Carolina Mobility Fund), and GS 136-189 (Reports by Department of Transportation).

Turnpike Authority Changes. Amends GS 136-89.183 to give the Turnpike Authority (Authority) the power to study, plan, develop, and undertake preliminary design work on up to nine (was, eight) Turnpike Projects. Provides that at the conclusion of these activities, the Authority is authorized to design, establish, purchase, construct, operate, and maintain the following: (1) Triangle Expressway, including segments known as NC 540, Triangle Parkway, Western Wake Freeway, and Southeast Extension ands specifies that these segments constitute four projects; deletes prohibition  on locating any portion of the Southeast Extension north of an existing protected corridor established by the DOT circa 1995 and (2) Monroe Connector/Bypass. Deletes authority for the Garden Parkway, Cape Fear Skyway, and a bridge of more than two miles in length going from the mainland to a peninsula bordering Virginia. Any other project proposed by the Authority in addition to the listed projects requires prior consultation with the Joint Legislative Commission on Governmental Operations no less than 180 days before initiating the process required by Article 7 of GS Chapter 159 (was, must be approved by the General Assembly before construction). Provides that with the exception of the Monroe Connector/Bypass and Triangle Expressway segments, the projects selected for construction by the Authority, before letting of a contract, must meet the following: (1) two of the projects must be ranked in the top 35 based on total score on the DOT produced list entitled Mobility Fund Project Scores dated June 6, 2012, and may be subject to GS 136-18(39a) (concerning the authority to enter into partnership agreements with private entities and authorizing political subdivisions to finance, by tolls, contracts, and other financing methods authorized by law, the cost of acquiring, constructing, equipping, maintaining, and operating transportation infrastructure in this State, and to plan, design, develop, acquire, construct, equip, maintain, and operate transportation infrastructure in this State); and (2) for the projects not ranked as provided, one may be subject to GS 136-18(39a).

Amends GS 136-18 to allow the DOT or the Authority, as applicable, to enter into up to three agreements with a private entity as provided under (39). Deletes references to a pilot project. Provides that Article 6H (Public Toll Roads and Bridges) of GS Chapter 136 applies to the DOT and to projects undertaken by the DOT under (39). Also allows DOT to assign its authority under that article to fix, revise, charge, retain, enforce, and collect tolls and fees to the private entity. Requires that any contract under GS 136-18(39a) or Article 6H for the development, construction, maintenance, or operation of a project provide for revenue sharing between the private party and the DOT. Excess toll revenues from a turnpike project are to be used for the funding or financing of transportation projects within the corridor where the turnpike project is located. Defines excess toll revenues and corridor. Agreements must comply with seven specified provisions including (1) being limited to no more than 50 years, (2) reporting specified information to the Joint Legislative Transportation Oversight Committee 60 days before signing of a concession agreement, and (3) developing and reporting on standards for entering into comprehensive agreements with private entities.

Amends GS 136-89.183 to make conforming changes.

Amends GS 136-89.188 to expand the activities that may be paid for with Turnpike Project revenue.

Enacts new GS 136-89.199 to allow the Authority to designate one or more lanes of a highway as high occupancy toll or other type of managed lanes, provided that the designation does not reduce the number of existing general purpose lanes.

Amends GS 136-89.212 to provide that if a person establishes that a vehicle was in the care, custody, and control of another person, the other person is liable for the payment of the toll and the Authority may send a bill. Provides that the other person may contest the toll.

Amends GS 136-89.213 to make conforming changes. Allows the Authority to assign its authority to fix, revise, charge, retain, enforce, and collect tolls and feeds to a private entity that has entered into a partnership agreement with the Authority. Provides that if a turnpike project uses an open road tolling system, the Authority must operate a facility that is in the immediate vicinity of the project or provide an alternative means to accept cash payment of the toll. Makes conforming changes.

Amends GS 136-89.214 to make conforming changes concerning the ability of the Authority to send a bill to a person identified as the one having care, custody, and control of the vehicle.

Amends GS 136-89.215 to require the Authority to set the processing fee at an amount that does not exceed the costs of collecting the unpaid toll (was, costs of identifying the owner subject to the unpaid toll and billing the owner).

Transition Study and Reporting Requirements. Requires the DOT to report to the Joint Legislative Transportation Oversight Committee (Committee) and the Fiscal Research Division no later than August 15, 2013, on the recommended formulas that will be used in the prioritization process to rank highway and nonhighway projects. Requires the DOT Prioritization Office to develop the process and formulas. Prohibits the DOT from finalizing the formula without consulting with the Committee. Requires consultation on the DOT recommendation 30 days after the report is received. Requires a final report to be submitted by January 1, 2014. Requires DOT to submit transition reports to members of the Joint Legislative Transportation Oversight Committee, House Appropriations Subcommittee on Transportation and Senate Committee on Appropriations on DOT, and the Fiscal Research Division on March 1, 2014, and November 1, 2014. Specifies information to be included in the report.

Effective Date. Unless otherwise indicated, effective July 1, 2013. The act is effective only if the General Assembly appropriates funds in the Current Operations Appropriation Act of 2013 to implement the act.