AN ACT TO REFORM THE INVOLUNTARY ANNEXATION LAWS OF NORTH CAROLINA. Summarized in Daily Bulletin 4/8/11, 5/3/11, 5/11/11, and 6/15/11. Enacted July 1, 2011. Effective July 1, 2011. Annexations initiated prior to the effective date of this act by any action under Part 2 or Part 3 of Article 4A of GS 160A, but for which an annexation ordinance has not been adopted, shall terminate and may be reinitiated in compliance with Part 7 of Article 4A of GS 160A as enacted by this act.
Bill Summaries: H845 ANNEXATION REFORM ACT OF 2011 (NEW).
Summary date: Jul 1 2011 - View Summary
Senate committee substitute, reported in on 6/14/11, makes the following changes to 3rd edition. Changes made by the Senate committee substitute include the following changes with respect to annexations initiated by municipalities: (1) clarifies that the extension of water and sewer services to each annexed parcel is required if the owner provides an installation easement; (2) amends proposed GS 160A-58.55(b) to provide that if a proposed annexation extends into a county other than a county where the majority of the area of the existing municipality is located, a copy of the resolution of consideration must be mailed by first-class mail within 30 days after the adoption of the resolution of consideration to the clerk of the board of county commissioners of that county; (3) amends proposed GS 160A-58.55(f) to provide that the explanation of the provision of services made at the public informational meeting by the city must mention the opportunity the owner of annexed property has for the installation of a residential connection; (4) amends GS 160A-58.55(h) to provide that an adopted annexation ordinance, along with a list of property owners to which a hearing notice was mailed also be delivered within five business days to the board of elections of the county in which a majority of the municipality lies; (5) amends GS 160A-58.55(i) (petition to deny annexation ordinance) to provide that the board of elections rather than the tax assessor is to prepare petitions for property owners to sign opposing the annexation, to mail a petition to the address of record within five business days of receipt of the list of owners, and to carry out other duties previously assigned to the tax assessor; (6) deletes proposed GS 160A-58.55(k) and (l), which would have postponed the effective date of annexation with respect to certain agrarian lands that qualify for present-use-value assessment for property tax purposes and other certain lands; (7) amends GS 160A-58.56(a) (concerning provision of water and sewer service to annexed areas) to provide that a municipality has no financial responsibility for extending lines if (a) service within the city is provided in part by a nonprofit (b) the annexing city does not provide the service inside its limits (c) the area to be annexed is already served by a public system or (d) the city by contract with the public system has no responsibility for providing such service; (8) adds new GS 160A-58.56(e1) to provide that the initial installation of water or sewer connection lines must be completed without charge to the property owner, but title to and responsibility for lines is vested in the owner; and (9) adds new GS 160A-58.56(e2) to allow a city to petition the Local Government Commission for a reasonable time extension if the city is unable to provide service as required because of permitting delays that are caused through no fault of the city.
Senate amendment makes the following changes to 4th edition. Makes technical change only.
Summary date: May 11 2011 - View Summary
House committee substitute makes the following changes to 2nd edition.
Adds that the term “used for residential purposes” includes any lot or tract used in common for social or recreational purposes by either owners of lots with habitable dwelling units or owners of lots intended for occupation by dwelling units and the lot owners have a real property interest in the commonly used property that attaches to or is appurtenant to the owners’ lots. Makes other clarifying changes to the definitions in proposed GS 160A-58.51. Clarifies that the annexation ordinance must fix the effective date for annexation as June 30 next following the adoption of the ordinance or the second June 30 following adoption. Clarifies and reorganizes the procedures that apply to petitions to deny annexation ordinances, and directs the municipality to reimburse the tax assessor for the costs of the petition process. Clarifies that the municipality must report to the Local Government Commission within six months (rather than 30 days) after the effective date of the annexation ordinance as to whether the extension of water and sewer lines was completed within the specified time period. Amends proposed GS 160A-58.56(f)(2) to clarify, within the definition of “at no cost other than periodic user fees,” that the property owner may be charged no more than as provided in GS 160A-58.56(d) (previously granted the owner a certain credit). Amends proposed GS 160A-58.60(i) to clarify that if part or all of the area annexed is the subject of an appeal on the effective date of the annexation ordinance, then the ordinance will be deemed amended to make the effective date the first June 30th at least six months after the date of the final judgment, or the first June 30th at least six months from the date the municipal governing board completes action to conform to the court’s instructions.
Amends GS 160A-31, as amended by Section 3 of SL 2011-57, by removing previously added language stating that the petition need not be signed by owners of real property wholly exempt from property taxation under the Constitution and laws of North Carolina. Amends GS 160A-31(b1) by reducing the number of households with incomes that are 200% or less than the most recently published poverty threshold needed to petition for annexation, from 2/3 to 51%. Directs, in addition to previous limitations, that the governing board of any municipality annex by ordinance any area the population of which is no more than 10% of that municipality, as specified. Provides that a municipality is not required to adopt more than one ordinance under the subsection in a 36-month period. Amends GS 160A-31(d) by deleting a provision requiring residents of a municipality who question the necessity for annexation to be heard at the public hearing. Creates new subsection (d1) authorizing a governing body to adopt an annexation ordinance with an effective date no later than 24 months after the adoption of the ordinance, upon finding that a petition submitted under subsection (j) meets requirements.. Creates new subsection (d2) to direct, upon a finding that a petition submitted under (b1) meets the requirements of the statute, the governing body, within 60 days of the finding, to estimate the capital costs to the municipality of extending water and sewer lines to all parcels within the area covered by the petition and to estimate the annual debt service payment that would be required if those costs were financed by a 20 year bond. Provides guidelines a governing body must follow to adopt, based on the above estimations, an annex ordinance or a resolution declining to annex the area. Creates new subsection (d3) to require municipal services be provided to an area annexed under subsections (b1) and (j) in accordance with the requirements of Part 7 of the Article.
Amends GS 143B-437.04(a) regarding the requirement that the Department of Commerce adopt guidelines for awarding Community Development Block Grants by adding a new subdivision (3) to require that those guidelines ensure that priority consideration is given to projects located in areas annexed by a municipality under Article 4A of GS Chapter 160A in order to provide water or sewer services to low-income residents. Defines low-income residents as those with a family income that is 80% or less of median family income. Also amends GS 159G-23 to add a new subdivision (9) to direct the Division of Water Quality and the Division of Environmental Health to each establish a system of assigning points to applications based on the criteria that the location of a project is in an area providing water or water services to low-income residents as prescribed in GS 143B-437.04(a), as amended in this act. Provides that this act does not apply to any municipality that requires in its charter that an annexation be approved by (1) either the voters in a referendum or the request of a majority of the property owners, (2) the voters in a referendum, or (3) the request of a majority of the property owners, except for the sections that amend GS 143B-437.04(a), GS 159G-23, and GS 160A-31. Makes a conforming change to provide that this act applies to petitions for annexations under Part I and Part 4 of GS Chapter 160A, Article 4A (was, Part 1).
Makes additional clarifying changes.
Summary date: May 3 2011 - View Summary
House committee substitute makes the following changes to 1st edition.
Recodifies selected provisions of Part 3 of Article 4A of GS Chapter 160A (Annexation by cities of 5,000 or more) and places those provisions in the new Part 7 created in Section 8 of this act as follows: (1) GS 160A 49.1 as GS 160A 58.57, (2) GS 160A 49.2 as GS 160A 58.58, (3) GS 160A 49.3 as GS 160A 58.59, (4) GS 160A 51 as GS 160A 58.61, and (5) GS 160A 52 as GS 160A 58.62. Repeals the remaining provisions of Part 3 of Article 4A in GS Chapter 160A. Provides that the proposed new Part 7 of Article 4A of GS Chapter 160A created by this act is as amended by the recodified provisions of Part 3 of Article 4A.
Retitles new Part 7 as Annexations Initiated by Municipalities (was, Involuntary Annexation by Municipalities). Adds provision to proposed GS 160A-58.50 (Declaration of Policy) declaring it to be essential for citizens to have an effective voice in annexations that are initiated by municipalities.
Amends the definition for contiguous area to clarify that contiguity cannot be established by a connecting corridor that consists solely of a street or street right-of-way. Adds definitions for (1) eligible property owner, (2) necessary land connection, (3) and property owner. Clarifies that among the prerequisites for annexation, the municipality exercising its authority to annex an area provide a statement setting forth the plans for providing the area proposed to be annexed each major municipal service on substantially the same basis and in the same manner as those services are provided within the rest of the municipality prior to the annexation. Directs a municipality to provide, in a timely fashion, information requested by a rural fire department (providing service in the area to be annexed) in order to respond to the municipality’s written request for a statement of the impact of the annexation on the department.
Amends the conditions with which a municipality is required to comply when fixing new boundaries to add the requirement that if any portion of a parcel of property is used, the entire parcel of real property as recorded in the deed transferring the title is to be included. Makes organizational and clarifying changes to the conditions with which a municipal governing board must comply in fixing new municipal boundaries. Moves the term necessary land connection to the definitions section in proposed GS 160A-58.51.
Enacts new GS 160A-58.55 (procedure for annexation) to require any municipal governing board to first pass a resolution of consideration identifying the proposed area as under consideration for annexation. States that the resolution may have a metes and bounds description or a map, remains effective for two years after adoption, and must be filed with the city clerk. Requires publication of the notice of adoption of the resolution of consideration once a week for two successive weeks, as specified, and requires mailing a copy of the resolution of consideration to all owners of real property in the area to be annexed.
Allows the municipal governing body to adopt a resolution of intent to proceed with annexation of some or all of the area described in the resolution at least one year after adoption of the resolution of consideration. Requires the resolution of intent to describe the boundaries of the areas considered for annexation. Requires that the notice of public informational meeting and public hearing be combined and include, among other items, information on becoming a customer and paying for water or sewer service and a clear description of the distinction between the informational meeting and the hearing. Requires publication for the informational meeting once a week for at least two successive weeks prior to the meeting, with publication on the same day each week, as specified. Requires notice of the meeting to be mailed by first class mail to the owners of real property located within the area to be annexed. Requires that a summary of the annexation and time lines, a summary of available statutory remedies, and the form for requesting extension of water and sewer lines be distributed at the public hearing. Permits the municipal governing board to adopt an annexation ordinance no sooner than the 10th day after the public hearing and no later than the 90th day following the public hearing. Requires the annexation ordinance to set the effective date for annexation on June 30 of either that year or the following year.
Provides that if the County Tax Assessor certifies that at least 60% of the real property owners have signed petitions to deny the annexation, then the annexation is terminated, and the municipality cannot begin the involuntary annexation process again on that area until 36 months have passed. Provides additional guidelines governing reporting to the Local Government Commission on the provision of services to the annexed area.
Generally requires that services must be provided on substantially the same basis and in the same manner as within corporate city limits. Provides that fire, police, solid waste collection, and street maintenance must be in place on the date of annexation. Requires that water and sewer service to the annexed area must be in place within three and one-half years of the effective date of the annexation ordinance. Sets out the process under which the municipality is to provide water and sewer line connections at no or reduced costs other than periodic fees to all property owners who request the service. Prohibits a municipality from charging any property owner within the annexation area for the installation or use of the water or sewer system unless the property is a customer of, or has requested to become a customer of, the water and sewer system. Provides additional timelines and details for services extended to the annexed area.
Makes conforming changes to GS 160A-58.57 (Contract with rural fire department) and GS 160A-58.59 (Contract with private solid waste collection firms).
Transfers the current process for appeal to superior court alleging material injury to the owner of real property within an annexation area due to the failure of the municipal governing board to comply with the annexation procedure or meet the requirements for annexation under GS 160A-58.50 through proposed GS 160A-58.60. Provides timelines for filing the petition, requirements as to the content of the petition, and criteria regarding requesting a stay of the operation of the annexation ordinance pending the outcome of the judicial review. Directs the court to review and take evidence on specified matters and provides possible remedies for the court. Provides that either party may appeal the final judgment of the superior court to the Court of Appeals under the Rules of Civil Procedure.
Enacts new GS 160A-58.63 to require the municipality to use methods calculated to provide reasonably accurate results in determining population and the degree of land subdivision for purposes of meeting the requirements in proposed GS 160A-58.54, regarding the character of the area to be annexed.
Amends GS 160A-31(a) (annexation by petition), adding that the petition presented to the governing board of a municipality need not be signed by the owners of real property if the real property is wholly exempt from property taxation under the Constitution and laws of North Carolina.
Enacts new subsection (b1) to GS 160A-31, directing the governing board of a municipality to annex by ordinance any area one-eighth of the aggregate external boundaries of which are contiguous to the municipality’s boundaries if (1) two-thirds of the households in an area petitioning for annexation under the statute have incomes that are 200% or less than the most recently published U.S. Census Bureau poverty thresholds and (2) the petition requesting annexation is signed by owners of at minimum 75% of the parcels of real property in the area. New GS 160A-31(b2) sets out the corresponding petition format.
Enacts new subsection (i) to GS 160A-31, authorizing the governing board of any municipality to annex by ordinance any distressed area, defined as an area in which at least 51% of the households have incomes 200% or less than the most recently published U.S. Census Bureau poverty thresholds, contiguous to the municipality’s boundaries upon presentation of a petition signed by at least one adult resident of at least two-thirds of the resident households in the relevant area. New GS 160A-31(j) sets out the corresponding petition format.
Enacts new subsection (k) to GS 160A-31, requiring petitioners petitioning under subsection (b1) or (i) to submit to the governing board any reasonable evidence to demonstrate the area meets the required poverty thresholds. Permits petitioners to submit names, addresses, and Social Security numbers to the clerk, who will submit the information to the Department of Revenue (Department). Directs the Department to provide a summary report to the municipality listing incomes for households in the petitioning area. Makes a conforming change to GS 160A-31(c), requiring the clerk to receive the Department’s report before certifying the petition. Amends GS 160A-31(d), clarifying that persons residing or owning property in or near the area described in the petition and persons residing or owning property in the municipality will have the opportunity to be heard at the public hearing. Authorizes the governing board to make the annexing ordinance effective immediately or on the next June 30 following the ordinance’s passage (currently, on any specified date within six months after passage). Amends GS 160A-31(f), clarifying that an area is contiguous if the area either abuts directly on the municipal boundary or is separated from the municipal boundary by the width of a street or street right-of-way, a creek, or river or one of the other listed structures. Adds that a connecting corridor consisting solely of a street or street right-of-way may not establish contiguity for annexation purposes. Makes other conforming changes.
Enacts new GS 160A-58.90 to require that annexations made under Article 4A of GS Chapter 160A be recorded and reported in the same manner as under GS 160A-29. Also requires any written agreement with a person having a freehold interest in real property to be recorded in the register of deeds office in the county where the real property is located in order for the agreement to be enforceable.
Includes a severability clause in the act.
Effective when the act becomes law (was, effective July 1, 2011) and applies to annexations initiated by municipalities on or after that date, and to petitions for annexation under Part 1 of Article 4A of GS Chapter 160A presented on or after that date (was, applies to annexations for which a petition has been received). Provides that annexations initiated by any action (was, annexations for which a resolution of intent has been adopted) prior to the effective date of this act, but for which no annexation ordinance has been adopted, must terminate; however, such annexations may be reinitiated in compliance with Part 7 of Article 4A of GS Chapter 160A as enacted by this act.
Summary date: Apr 8 2011 - View Summary
Repeals Part 2 of Article 4A in GS Chapter 160A (annexation by cities of less than 5,000). Enacts new Part 7, Involuntary Annexation by Municipalities, to Article 4A of GS Chapter 160A, authorizing the governing board of any municipality to extend the municipality’s corporate limits under proposed Part 7. Includes definitions applicable to Part 7. As prerequisites to annexation, requires a municipality exercising authority to annex under Part 7 to make plans to extend services to the area proposed to be annexed, and to prepare a report including the plans before the required public hearing. Requires that the report include: (1) a map or maps of the municipality and adjacent territory showing the present and proposed boundaries, the present locations and proposed extension of major trunk water mains and sewer lines, and the general land-use pattern in the area proposed to be annexed; (2) a statement that the area proposed to be annexed meets specified requirements; (3) a statement showing plans to extend each major municipal service and the method the municipality will use to finance the extension, as detailed; (4) a statement of the annexation impact on any rural fire department providing service in the area proposed to be annexed, and on fire protection and fire insurance rates, as specified; and (5) a statement showing how the proposed annexation will affect the municipality’s finances and services, as described.
Authorizes the municipal governing board to extend the municipal corporate limits to include any area that meets four detailed criteria as follows. Requires the area to be adjacent or contiguous to the municipality’s boundaries at the time the annexation proceeding begins, except as specified. Requires at least one-eighth of the aggregate external boundaries of the area to coincide with the municipal boundary. Specifies that no part of the area can be included within the boundary of another incorporated municipality. Requires the total area to be annexed to meet any of the following requirements: (1) part or all of the area must be developed for urban purposes, as specified; (2) part or all of the area either lies between the municipal boundary and an area developed for urban purposes, as described, or is adjacent, on at least 60% of its external boundary, to any combination of the municipal boundary and the boundary of areas developed for urban purposes, or (3) the total area is completely surrounded by the municipality’s primary corporate limits. Requires the municipality to comply with the following six conditions when fixing new boundaries: (1) use recorded property lines and streets as boundaries; (2) do not use a connecting corridor consisting solely of a street or street right-of-way to establish contiguity to a noncontiguous area; (3) do not consider property used for a commercial, industrial, institutional, or governmental purpose if the lot or tract is used only temporarily; (4) acreage used for commercial, industrial, institutional, or governmental purposes must include acreage actually occupied by buildings or other man-man structures, as specified; (5) “necessary land connection” means an area that does not exceed 25% of the total area to be annexed; and (6) the area of an abolished water and sewer district is considered to be a water and sewer district even after abolition under GS 162A-87.2(b).
The act becomes effective July 1, 2011, and applies to annexations for which a petition has been received under Part 1 (extension by petition) or Part 4 (annexation of noncontiguous areas) of Article 4A in GS Chapter 160A on or after that date. Annexations for which a resolution of intent has been adopted under Part 2 (annexation by cities of less than 5,000) or Part 3 (annexation by cities of 5,000 or more) of Article 4A in GS Chapter 160A before July 1, 2011, will terminate and may be reinitiated under new Part 7.