Bill Summary for S 356 (2019-2020)

Summary date: 

Nov 13 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 356 (Public) Filed Tuesday, March 26, 2019
AN ACT TO MAKE REVENUE ADJUSTMENTS, IMPLEMENT BUDGET STABILIZATION MEASURES, AND ENHANCE TRANSPARENCY AND ACCOUNTABILITY AT THE DEPARTMENT OF TRANSPORTATION.
Intro. by Wells, Brown.

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Bill summary

Conference report deletes the provisions of the 4th edition and now provides the following.

Part I.

Section 1.1

Directs the Department of State Treasurer to authorize the issuance and sale of Build NC Bonds in the amount of $400 million for the 2019-20 fiscal year. Maintains the Build NC Bonds limit set in specified state law.

Section 1.2

Directs the Department of Transportation (DOT) to transfer $100 million in nonrecurring funds as a loan from the Highway Trust Fund to the Highway Fund pursuant to the following schedule: $50 million on or before February 1, 2020; and $50 million on or before May 1, 2020. Requires DOT to repay the Highway Trust Fund loan according to a repayment schedule approved by the Department of State Treasurer.

Section 1.3

States the legislative intent to restrict the use of the Transportation Emergency Reserve to major disasters only.

Enacts GS 136-44.2E, establishing the Transportation Emergency Reserve (Reserve) as a special fund in DOT. Requires DOT to annually transfer from the Highway Fund to the Reserve $125 million, deemed appropriated for expenses related to an emergency, as defined by specified state law. Restricts use of Reserve funds to after a presidential declaration that a major disaster exists in the State. Charges the DOT Secretary with statutory compliance. Caps the Reserve at $125 million, and provides for reduction of mandated transfers to comply with the Reserve's cap amount. Establishes a biennial reporting requirement for DOT to report on the Reserve, beginning no later than February 1 of the first year of the 2021-23 fiscal biennium, to the specified NCGA committees and division. Requires the report to include an evaluation to determine the minimum amount of funds needed in the Reserve, based on a methodology developed by the Office of State Budget and Management (OSBM) and DOT.

Enacts GS 143C-6-11(d1) to allow DOT to reduce its budget for every departmental division, grant-in-aid, and category of expenditures, excluding salaries, to pay for unanticipated expenditures from snow and ice removal and emergencies when all funds allocated for those expenses have been depleted for that fiscal year. Requires DOT to report to the specified NCGA committee and division within 30 days of making such an adjustment. 

Directs the State Controller to transfer from the unreserved balance of the General Fund to the Reserve $64 million no later than 30 days from the date the act becomes law.

Requires DOT to consult with OSBM to revise its base budget to increase the amount of funds available for snow and ice removal and emergency expenditures.

Section 1.4

Establishes a $150 million cap each fiscal year on the compensation DOT can pay for damages arising from recordation of a transportation corridor map under GS Chapter 135, Article 2E (Map Act). Excludes compensation for Map Act damages arising from a Turnpike project, as defined in specified state law. Effective December 1, 2019, and applies to all pending and future claims and causes of action arising from the recordation of a corridor map pursuant to the Map Act.

Amends GS 136-113 to specify that interest added to damages, with regard to just compensation, is to be calculated at the legal rate on the amount of damages awarded from the date of taking to the date of satisfaction of the judgment (was, the date of the judgment). Additionally, establishes that an amount awarded as damages must bear simple, not compounding, interest. Applies to causes of action filed on or after January 1, 2020.

Section 1.5

Requires DOT to expeditiously seek reimbursement from the federal government for all qualifying natural disaster expenditures. Directs DOT to submit a monthly report to the specified NCGA committee and division that contains an itemized list of all qualifying disaster expenditures with pending federal reimbursement with specified accompanying information. 

Section 1.6

Amends Section 7 of SL 2019-15 to no longer require DOT to transfer $90 million to the State Controller for deposit in the Savings Reserve upon the earlier of the cap set for the Disaster Relief Cash Flow Loan Fund being met or June 30, 2021.

Section 1.7

Appropriates $36 million from the General Fund to DOT (in addition to any other appropriations during the 2019-20 fiscal year) to be allocated in the following amounts: $30 million for current and future activities related to recovery from Hurricane Dorian, $2 million for the Living Shoreline projects, $2 million to expand the Flood Inundation Mapping Alert Network for Transportation, and $2 million for a Flood Risk and Vulnerability Assessment on the Strategic Highway Corridor System.

Part II.

Amends GS 143C-6-11 to require DOT to report to the specified NCGA committee and division no later than the fifteenth day of the month following a month where the combined average daily cash balance (cash balance) is outside of the target range already established in the statute, on why the cash balance is outside of the target range, the actions to be taken to bring the cash balance into the target range, and the estimated amount of time it will take for the cash balance to return to the target range. Requires DOT to publish public weekly reports of DOT’s cash position, to be issued as a press release to all interested parties, posted on the DOT’s website, and submitted to the specified NCGA committee and division. Also requires the report to include the following (with each item to include specified items): (1) beginning combined cash balance total; (2) less disbursements; (3) ending combined cash balance total; and (4) reserved cash.  Requires DOT to monthly submit a balance sheet report of all assets, debits, liabilities, and fund balances with an explanation of significant changes from the prior month to the specified NCGA committee and division. Repeals subsection (c) of Section 34.23 of SL 2014-100, which required DOT to report to the specified entities in any month in which DOT’s total cash balance on hand from the Highway Fund and the Highway Trust Fund exceeded $1 billion, on its cash balance no later than the 15th day of the following month; the report was required to include an explanation from DOT of the reasons the cash balance has exceeded the amount specified, the actions to be taken by DOT to reduce the cash balance, and the estimated amount of time it will take to bring the cash balance to the specified statutory target.

Requires the Office of the State Auditor to conduct a performance audit of DOT, including examination of: (1) budget adherence by department, division, and highway division; (2) timeliness of federal reimbursement requests and timeliness of DOT’s responses to any federal requests for additional information or action; (3) DOT controls and oversight of divisions and highway divisions as to cash management, project coordination and delivery, and budget adherence; (4) efficacy of communication and coordination within DOT; (5) efficacy of cash management by DOT; and (6) other items the State Auditor deems relevant. Requires a report by March 1, 2020, to the specified NCGA commissions and division on the performance audit and DOT’s plan of action in response to the performance audit.

Requires DOT, by January 15, 2020, to submit a report to the specified NCGA committee and division 12 specified items, including: (1) internal management by department, division, and highway division of cash and finances, including all financial controls, policies, and approval processes for contracts and expenses; (2) projected total cost of remaining Map Act claims and an assessment of Map Act settlement costs versus total litigation exposure of every remaining claim exceeding $1 million; (3) factors taken into consideration and justification for DOT employee salary adjustments; (4) the total amount of funds loaned from the Highway Trust Fund to the Highway Fund, the legal authority to make the loans, the justification for the loans, the use of the loaned funds, and DOT’s plan to restore the funds to the Highway Trust Fund; (5) an assessment of DOT’s contracting procedures, proposed changes to increase the Department's contract flexibility in addressing cash flow variances, and any legal or regulatory obstacles impeding the proposed changes; and (6) DOT internal audits: history, frequency, and findings.

Part III.

Unless otherwise indicated, effective when the act becomes law.

Makes conforming changes to the act's titles.

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