North Carolina authorizes $900 million in transportation GARVEE bonds

News AASHTO Journal October 05, 2005
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North Carolina Gov. Mike Easley recently signed a bill authorizing $900 million in grant anticipation revenue and vehicle (GARVEE) bonds that will be used to help pay for federally-funded transportation projects across the state.

In addition to that measure—House Bill 254—Easley also signed House Bill 750, which lets the North Carolina Department of Transportation (NCDOT) expand the Secondary Roads Construction Program over the next four years from pavement of unpaved roads to a comprehensive modernization program.

“North Carolina’s transportation needs continue to outpace available resources and these two bills will help significantly address that gap,” Easley said. “Our citizens will benefit with safer and better roads, and new jobs and economic development opportunities will be generated across the state.”

The governor’s office said the GARVEE bonds will be issued by the State Treasurer’s Office and approved by the Council of State. Use of the bonds will let highway projects be built sooner and save money by garnering current construction prices. The projects to be funded through the bonds have not yet been identified. The use of GARVEE bonds for larger projects will also free other funding for smaller projects across the state. The bonds are backed by federal revenue and will not affect the state’s credit rating.

H.B. 750 enables NCDOT to continue its emphasis on paving unpaved state-maintained secondary roads, but beginning in 2006, it also provides $68.6 million in secondary road funds to be used for maintenance and modernization projects on paved secondary roads. Additionally, the bill requires $5 million to be set aside until Fiscal Year 2009-10 to pave any unpaved secondary road previously deemed ineligible for paving.

The governor’s office said secondary roads comprise nearly 64,000 miles of North Carolina’s more than 78,000-mile highway system, and only about 4,400 miles of those roads are unpaved. A recent condition assessment projected a $121 million gap between available funds and secondary-road maintenance needs.

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