North Carolina HB 1094: Ferry Division Audit/DOT Omnibus.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2026-46
HOUSE BILL 1094

*H1094-v-7*
AN ACT TO DIRECT THE OFFICE OF THE STATE AUDITOR TO CONDUCT A
PERFORMANCE AUDIT OF THE FERRY DIVISION OF THE DEPARTMENT OF
TRANSPORTATION, AS RECOMMENDED BY THE JOINT LEGISLATIVE
TRANSPORTATION OVERSIGHT COMMITTEE, AND TO MAKE OTHER CHANGES
TO LAWS RELATED TO MOTOR VEHICLES AND TRANSPORTATION.

The General Assembly of North Carolina enacts:

FERRY DIVISION PERFORMANCE AUDIT
SECTION 1.(a) The Office of the State Auditor shall conduct a performance audit
of the Ferry Division of the Department of Transportation, which shall include all of the
following:
(1) A financial audit of the Division's operations and maintenance spending and
budget practices.
(2) An evaluation of the Division's operations, capital project, and maintenance
activities, and suggestions for long-term strategies to maximize revenue and
reduce costs.
(3) An evaluation of the current route system and potential route and schedule
adjustments to maximize revenue and reduce costs.
(4) An evaluation of potential options to diversify revenue to support ferry capital
project needs and recoup operating costs.
(5) Other items the State Auditor deems relevant to evaluate.
SECTION 1.(b) No later than January 15, 2027, the State Auditor shall provide a
report of the performance audit required by this section to the Joint Legislative Transportation
Oversight Committee and the Fiscal Research Division.

DIVISION OF MOTOR VEHICLES PERCENTAGE-BASED FUNDING MODEL
STUDY
SECTION 2.(a) The Department of Transportation, Division of Motor Vehicles
(Division), shall study the feasibility of transitioning Division funding to a
percentage-of-revenue-based model. The study shall include an evaluation of:
(1) The advantages and disadvantages of the current fixed-budget appropriation
model, including its limitations in responding to fluctuations in Division
services demand.
(2) The feasibility of implementing a percentage-of-revenue-based model (i)
under which the Division's budget authority is tied to revenue sources
collected by the Division and (ii) under which the Division would have
authority to adjust operational and staffing expenditures to adjust with demand
for services and collection of revenue.
(3) Funding models used by motor vehicle agencies in other states, including
models that incorporate:
a. Percentage-of-revenue-based appropriations or models.

Page 2 Session Law 2026-46 House Bill 1094
b. Fee retention or enterprise-style funding structures.
c. Demand-driven or workload-based budgeting.
(4) Legal or budgetary constraints related to a change in funding models. In
evaluating this, the Division shall consult with the Office of State Budget and
Management (OSBM) to determine the impact of a new funding model on:
a. Budget adjustment practices set forth in the State Budget Act, Chapter
143C of the General Statutes.
b. The fiscal impact on the Department of Transportation and the
Division of having a percentage-of-revenue-based funding model
rather than a fixed-budget appropriation.
(5) The fiscal impact of the quadrennial adjustment to fees and rates pursuant to
G.S. 20-4.02, on the Division's budget, assuming a
percentage-of-revenue-based funding model.
(6) Potential impacts of a percentage-of-revenue-based model on the Division's:
a. Customer service levels and wait times.
b. Staffing and operational capacity.
c. Technology modernization efforts.
d. Accountability and legislative oversight.
(7) Potential fiscal impacts of a percentage-of-revenue-based model for the
Division on the Department of Transportation's budgeting and funding of
other Department operations.
(8) Performance-based pay structure for drivers license examiners.
(9) Any other information relevant to this study.
SECTION 2.(b) The Division shall submit a report of its findings and
recommendations, including legislative recommendations necessary to implement a
percentage-of-revenue-based funding model, to the Joint Legislative Transportation Oversight
Committee, the House of Representatives Appropriations Committee on Transportation, the
Senate Appropriations Committee on the Department of Transportation, the Fiscal Research
Division, and OSBM no later than January 1, 2027.

ALLOW EARLY RENEWALS OF DRIVERS LICENSES
SECTION 3.(a) G.S. 20-7(f)(3a) reads as rewritten:
"(3a) When to renew. – A person may apply to the Division to renew a license
during the 180-day period at any time before the license expires. The Division
may not accept an application for renewal made before the 180-day period
begins.The fee for a regular drivers license renewed during the 180-day period
before the license expires is the fee set out in subsection (i) of this section.
The fee for a regular drivers license renewed more than 180 days before the
license expires is the fee for a duplicate license set out in G.S. 20-14, plus the
fee for a regular drivers license set out in subsection (i) of this section, minus
the per