A BILL TO BE ENTITLED
an act to reform the state's annexation laws.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143B‑437.04 reads as rewritten:
"§ 143B‑437.04.  Community development block grants.
(a)	The Department of Commerce shall adopt guidelines for the awarding of Community Development Block Grants to ensure that:
(1)	No local match is required for grants awarded for projects located in counties that have one of the 25 highest rankings under G.S. 143B‑437.08 or counties that have a population of less than 50,000 and more than nineteen percent (19%) of its population below the federal poverty level according to the most recent federal decennial census.
(2)	To the extent practicable, priority consideration for grants is given to projects located in counties that have met the conditions of subdivision (a)(1) of this section or in urban progress zones that have met the conditions of subsection (b) of this section.
(3)	Priority consideration is given to projects located in areas annexed by a municipality under Article 4A of Chapter 160A of the General Statutes in order to provide water or sewer services to low‑income residents. For purposes of this provision, low‑income residents are those with a family income that is fifty percent (50%) or less of median family income.
(b)	In order to qualify for the benefits of this section, after an area is designated an urban progress zone under G.S. 143B‑437.09, the governing body of the city in which the zone is located must adopt a strategy to improve the zone and establish an urban progress zone committee to oversee the strategy. The strategy and the committee must conform with requirements established by the Secretary of Commerce."
SECTION 2.  G.S. 159G‑23 reads as rewritten:
"§ 159G‑23.  Common criteria for loan or grant from Wastewater Reserve or Drinking Water Reserve.
The criteria in this section apply to a loan or grant from the Wastewater Reserve or the Drinking Water Reserve. The Division of Water Quality and the Division of Environmental Health must each establish a system of assigning points to applications based on the following criteria:
(1)	Public necessity. – An applicant must explain how the project promotes public health and protects the environment. A project that improves a system that is not in compliance with permit requirements or is under orders from the Department, enables a moratorium to be lifted, or replaces failing septic tanks with a wastewater collection system has priority.
(2)	Effect on impaired waters. – A project that improves designated impaired waters of the State has priority.
(3)	Efficiency. – A project that achieves efficiencies in meeting the State's water infrastructure needs or reduces vulnerability to drought consistent with Part 2A of Article 21 of Chapter 143 of the General Statutes by one of the following methods has priority:
a.	The combination of two or more wastewater or public water systems into a regional wastewater or public water system by merger, consolidation, or another means.
b.	Conservation or reuse of water, including bulk water reuse facilities and waterlines to supply reuse water for irrigation and other approved uses.
c.	Construction of an interconnection between water systems intended for use in drought or other water shortage emergency.
d.	Repair or replacement of leaking waterlines.
e.	Replacement of meters and installation of new metering systems.
(4)	Comprehensive land‑use plan. – A project that is located in a city or county that has adopted or has taken significant steps to adopt a comprehensive land‑use plan under Article 18 of Chapter 153A of the General Statutes or Article 19 of Chapter 160A of the General Statutes has priority over a project located in a city or county that has not adopted a plan or has not taken steps to do so. The existence of a plan has more priority than steps taken to adopt a plan, such as adoption of a zoning ordinance. A plan that exceeds the minimum State standards for protection of water resources has more priority than one that does not. A project is considered to be located in a city or county if it is located in whole or in part in that unit. A land‑use plan is not considered a comprehensive land‑use plan unless it has provisions that protect existing water uses and ensure compliance with water quality standards and classifications in all waters of the State affected by the plan.
(5)	Flood hazard ordinance. – A project that is located in a city or county that has adopted a flood hazard prevention ordinance under G.S. 143‑215.54A has priority over a project located in a city or county that has not adopted an ordinance. A plan that exceeds the minimum standards under G.S. 143‑215.54A for a flood hazard prevention ordinance has more priority than one that does not. A project is considered to be located in a city or county if it is located in whole or in part in that unit. If no part of the service area of a project is located within the 100‑year floodplain, the project has the same priority under this subdivision as if it were located in a city or county that has adopted a flood hazard prevention ordinance. The most recent maps prepared pursuant to the National Flood Insurance Program or approved by the Department determine whether an area is within the 100‑year floodplain.
(6)	Sound management. – A project submitted by a local government unit that has demonstrated a willingness and ability to meet its responsibilities through sound fiscal policies and efficient operation and management has priority.
(7)	Capital improvement plan. – A project that implements the applicant's capital improvement plan for the wastewater system or public water system it manages has priority over a project that does not implement a capital improvement plan. To receive priority, a capital improvement plan must set out the applicant's expected water infrastructure needs for at least 10 years.
(8)	Coastal habitat protection. – A project that implements a recommendation of a Coastal Habitat Protection Plan adopted by the Environmental Management Commission, the Coastal Resources Commission, and the Marine Fisheries Commission pursuant to G.S. 143B‑279.8 has priority over other projects that affect counties subject to that Plan.
(9)	A project that is located in an area annexed by a municipality under Article 4A of Chapter 160A of the General Statutes in order to provide water or sewer services to low‑income residents has priority. For purposes of this provision, low‑income residents are those with a family income that is fifty percent (50%) or less of median family income."
SECTION 3.  G.S. 160A‑31 reads as rewritten:
"§ 160A‑31.  Annexation by petition.
(a)	The governing board of any municipality may annex by ordinance any area contiguous to its boundaries upon presentation to the governing board of a petition signed by the owners of all the real property located within such area. The petition shall be signed by each owner of real property in the area and shall contain the address of each such owner. 
(b)	The petition shall be prepared in substantially the following form:
DATE:
To the ______________ (name of governing board) of the (City or Town) of ______________
1. We the undersigned owners of real property respectfully request that the area described in paragraph 2 below be annexed to the (City or Town) of______________
2. The area to be annexed is contiguous to the (City or Town) of ________ and the boundaries of such territory are as follows:
(c)	Upon receipt of the petition, the municipal governing board shall cause the clerk of the municipality to investigate the sufficiency thereof and to certify the result of his investigation. Upon receipt of the certification, the municipal governing board shall fix a date for a public hearing on the question of annexation, and shall cause notice of the public hearing to be published once in a newspaper having general circulation in the municipality at least 10 days prior to the date of the public hearing; provided, if there be no such paper, the governing board shall have notices posted in three or more public places within the area to be annexed and three or more public places within the municipality.
(d)	At the public hearing all persons owning property in the area to be annexed who allege an error in the petition shall be given an opportunity to be heard, as well as residents of the municipality who question the necessity for annexation. The governing board shall then determine whether the petition meets the requirements of this section. Upon a finding that the petition meets the requirements of this section, the governing board shall have authority to pass an ordinance annexing the territory described in the petition. The governing board shall have authority to make the annexing ordinance effective immediately or on any specified date within six months from the date of passage of the ordinance.
(e)	From and after the effective date of the annexation ordinance, the territory and its citizens and property shall be subject to all debts, laws, ordinances and regulations in force in such municipality and shall be entitled to the same privileges and benefits as other parts of such municipality. Real and personal property in the newly annexed territory on the January 1 immediately preceding the beginning of the fiscal year in which the annexation becomes effective is subject to municipal taxes as provided in G.S. 160A‑58.10. If the effective date of annexation falls between June 1 and June 30, and the effective date of the privilege license tax ordinance of the annexing municipality is June 1, then businesses in the area to be annexed shall be liable for taxes imposed in such ordinance from and after the effective date of annexation.
(f)	For purposes of this section, an area shall be deemed "contiguous" if, at the time the petition is submitted, such 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 the right‑of‑way of a railroad or other public service corporation, lands owned by the municipality or some other political subdivision, or lands owned by the State of North Carolina. A connecting corridor consisting solely of a street or street right‑of‑way may not be used to establish contiguity to an outlying, noncontiguous area. In describing the area to be annexed in the annexation ordinance, the municipal governing board may include within the description any territory described in this subsection which separates the municipal boundary from the area petitioning for annexation.
(g)	The governing board may initiate annexation of contiguous property owned by the municipality by adopting a resolution stating its intent to annex the property, in lieu of filing a petition. The resolution shall contain an adequate description of the property, state that the property is contiguous to the municipal boundaries and fix a date for a public hearing on the question of annexation. Notice of the public hearing shall be published as provided in subsection (c) of this section. The governing board may hold the public hearing and adopt the annexation ordinance as provided in subsection (d) of this section.
(h)	A city council which receives a petition for annexation under this section may by ordinance require that the petitioners file a signed statement declaring whether or not vested rights with respect to the properties subject to the petition have been established under G.S. 160A‑385.1 or G.S. 153A‑344.1. If the statement declares that such rights have been established, the city may require petitioners to provide proof of such rights. A statement which declares that no vested rights have been established under G.S. 160A‑385.1 or G.S. 153A‑344.1 shall be binding on the landowner and any such vested right shall be terminated.
(i)	Using the procedures under this section, the governing board of any municipality may annex by ordinance any distressed area contiguous to its boundaries upon presentation to the governing board of a petition signed by seventy‑five percent (75%) of the resident households located within such area. For purposes of this subsection, a "distressed area" is defined as an area in which a majority of the households to be annexed have incomes that are fifty percent (50%) or less of median family income."
SECTION 4.  G.S. 160A‑34 reads as rewritten:
"§ 160A‑34.  Authority to annex.
The governing board of any municipality having a population of less than 10,000 persons according to the last federal decennial census may extend the corporate limits of such municipality under the procedure set forth in this Part, except that this Part does not apply to any municipality in Craven County having a population of less than 500 persons according to the last federal decennial census unless that municipality provides at least six of the seven categories of municipal services listed in G.S. 136‑41.2(c). This Part does not apply to any municipality unless it provides, at the time of adoption of the resolution of intent, at least two of the four major municipal services listed in G.S. 160A‑35(3)a. To qualify under this section, the service must be provided directly by the municipality, provided by a joint agency or authority of which the municipality is a full participating member, or provided by contract between the municipality and a third party. In the case of police protection provided by contract between the municipality and the sheriff's department, to qualify under this section the contract must establish a higher level of service than is otherwise provided in the area, such as a designated deputy or increased patrols."
SECTION 5.  G.S. 160A‑35 reads as rewritten:
"§ 160A‑35.  Prerequisites to annexation; ability to serve; report and plans.
A municipality exercising authority under this Part shall make plans for the extension of services to the area proposed to be annexed and shall, prior to the public hearing provided for in G.S. 160A‑37, prepare a report setting forth such plans to provide services to such area. The report shall include:
(1)	A map or maps of the municipality and adjacent territory to show the following information:
a.	The present and proposed boundaries of the municipality.
b.	The proposed extensions of water mains and sewer outfalls to serve the annexed area, if such utilities are operated by the municipality. The water and sewer map must bear the seal of a registered professional engineer or a licensed surveyor.
(2)	A statement showing that the area to be annexed meets the requirements of G.S. 160A‑36.
(3)	A statement setting forth the plans of the municipality for extending to the area to be annexed each major municipal service performed within the municipality at the time of annexation. Specifically, such plans shall:
a.	Provide for extending police protection, fire protection, solid waste collection and street maintenance services to the area to be annexed on the date of annexation on substantially the same basis and in the same manner as such services are provided within the rest of the municipality prior to annexation. A contract with a rural fire department to provide fire protection shall be an acceptable method of providing fire protection. If a water distribution system is not available in the area to be annexed, the plans must call for reasonably effective fire protection services until such time as waterlines are made available in such area under existing municipal policies for the extension of waterlines. A contract with a private firm to provide solid waste collection services shall be an acceptable method of providing solid waste collection services.
b.	Provide for extension of water mains and sewer lines into the area to be annexed so that property owners in the area to be annexed will be able to secure public water and sewer services according to the policies in effect in such municipality for extending water and sewer lines to individual lots or subdivisions. If the municipality must, at its own expense, extend water and/or sewer mains into the area to be annexed before property owners in the area can, according to municipal policies, make such connection to such lines, then the plans must call for contracts to be let and construction to begin on such lines within one year following the effective date of annexation. In areas where the installation of sewer is not economically feasible due to the unique topography of the area, the municipality may agree to provide septic system maintenance and repair service until such time as sewer service is provided to properties similarly situated.
c.	Set forth the method under which the municipality plans to finance extension of services into the area to be annexed.
(4)	A statement of the impact of the annexation on any rural fire department providing service in the area to be annexed and a statement of the impact of the annexation on fire protection and fire insurance rates in the area to be annexed, if the area where service is provided is in an insurance district designated under G.S. 153A‑233, a rural fire protection district under Article 3A of Chapter 69 of the General Statutes, or a fire service district under Article 16 of Chapter 153A of the General Statutes. The rural fire department shall make available to the city not later than 30 days following a written request from the city all information in its possession or control, including but not limited to operational, financial and budgetary information, necessary for preparation of a statement of impact. The rural fire department forfeits its rights under G.S. 160A‑37.1 and G.S. 160A‑37.2 if it fails to make a good faith response within 45 days following receipt of the written request for information from the city, provided that the city's written request so states by specific reference to this section.
(5)	A statement showing how the proposed annexation will affect the city's finances and services, including city revenue change estimates. Estimates must include projections for at least a five‑year period beyond the first year that expenditures are to be made for the provision of city services to the annexed area, with accounting by revenue source and category of expenditure. This statement shall be delivered to the clerk of the board of county commissioners at least 30 days before the date of the public informational meeting on any annexation under this Part."
SECTION 6.  G.S. 160A‑36 reads as rewritten:
"§ 160A‑36.  Character of area to be annexed.
(a)	A municipal governing board may extend the municipal corporate limits to include any area which meets the general standards of subsection (b), and which meets the requirements of subsection (c) of this section or that is completely surrounded by the municipality's primary corporate limits.
(b)	The total area to be annexed must meet the following standards:
(1)	It must be adjacent or contiguous to the municipality's boundaries at the time the annexation proceeding is begun, except if the entire territory of a county water and sewer district created under G.S. 162A‑86(b1) is being annexed, the annexation shall also include any noncontiguous pieces of the district as long as the part of the district with the greatest land area is adjacent or contiguous to the municipality's boundaries at the time the annexation proceeding is begun.
(2)	At least one eighth of the aggregate external boundaries of the area must coincide with the municipal boundary. A connecting corridor consisting solely of a public street or street right‑of‑way shall not be used to establish contiguity to an outlying, noncontiguous area.
(3)	No part of the area shall be included within the boundary of another incorporated municipality.
(c)	The area to be annexed must be developed for urban purposes at the time of approval of the report provided for in G.S. 160A‑35. For purposes of this section, a lot or tract shall not be considered in use for a commercial, industrial, institutional, or governmental purpose if the lot or tract is used only temporarily, occasionally, or on an incidental or insubstantial basis in relation to the size and character of the lot or tract. For purposes of this section, acreage in use for commercial, industrial, institutional, or governmental purposes shall include acreage actually occupied by buildings or other man‑made structures together with all areas that are reasonably necessary and appurtenant to such facilities for purposes of parking, storage, ingress and egress, utilities, buffering, and other ancillary services and facilities. Area of streets and street rights‑of‑way shall not be used to determine total acreage under this section. An area developed for urban purposes is defined as:
(1)	Any area which is so developed that at least sixty percent (60%) of the total number of lots and tracts in the area at the time of annexation are used for residential, commercial, industrial, institutional or governmental purposes, and is subdivided into lots and tracts such that at least sixty percent (60%) of the total acreage, not counting the acreage used at the time of annexation for commercial, industrial, governmental or institutional purposes, consists of lots and tracts three acres or less in size.
(1a)	An area with a total resident population equal to at least two and three‑tenths persons for each acre of land included within its boundaries.
(2)	An area so developed that, at the time of the approval of the annexation report, all tracts in the area to be annexed are used for commercial, industrial, governmental, or institutional purposes.
(3)	The entire area of any county water and sewer district created under G.S. 162A‑86(b1), but this subsection only applies to annexation by a municipality if that:
a.	Municipality has provided in a contract with that district that the area is developed for urban purposes; and
b.	Contract provides for the municipality to operate the sewer system of that county water and sewer district;
provided that the special categorization provided by this subsection only applies if the municipality is annexing in one proceeding the entire territory of the district not already within the corporate limits of a municipality.
(d)	In fixing new municipal boundaries, a municipal governing board shall use recorded property lines and streets as boundaries. Some or all of the boundaries of a county water and sewer district may also be used when the entire district not already within the corporate limits of a municipality is being annexed.
(e)	The area of an abolished water and sewer district shall be considered to be a water and sewer district for the purpose of this section even after its abolition under G.S. 162A‑87.2(b)."
SECTION 7.  G.S. 160A‑37 reads as rewritten:
"§ 160A‑37.  Procedure for annexation.
(a)	Resolution of Consideration. – Any municipal governing board desiring to annex territory under the provisions of this Part shall first pass a resolution identifying the area as being under consideration for annexation. The resolution of consideration may have a metes and bounds description or a map and shall remain effective for two years after adoption and shall be filed with the city clerk. A new resolution of consideration adopted before expiration of the two‑year period for a previously adopted resolution covering the same area shall relate back to the date of the previous resolution. Adoption of a resolution of consideration shall not confer prior jurisdiction over the area as to any other city. A notice of adoption of the resolution of consideration shall be published once a week for two successive weeks, with each publication being on the same day of the week, in a newspaper having general circulation in the municipality. The second publication shall be no more than 30 days following adoption of the resolution. The notice shall contain a map or description of the area under consideration and a summary of the annexation process and time lines.
(a1)	Resolution of Intent. – At least one year after adoption of the resolution of consideration, the municipal governing body may adopt a resolution stating the intent of the municipality to proceed with annexation of some or all of the area described in a resolution of consideration. Such resolution of intent shall describe the boundaries of the area intended for annexation, fix a date for the public informational meeting, and fix a date for a public hearing on the question of annexation. The date for the public informational meeting shall be not less than 45 days and not more than 55 days following passage of the resolution. The date for the public hearing to be not less than 60 days and not more than 90 days following passage of the resolution of intent.
(b)	Notice of Public Hearing. – The notice of public hearing shall:
(1)	Fix the date, hour and place of the public informational meeting and the date, hour, and place of the public hearing.
(2)	Describe clearly the boundaries of the area under consideration, and include a legible map of the area.
(3)	State that the report required in G.S. 160A‑35 will be available at the office of the municipal clerk at least 30 days prior to the date of the public informational meeting.
(4)	Include an explanation of an owner's rights pursuant to subsection (f1) and (f2) of this section.
(5)	Include a summary of the annexation process and time lines and a summary of available statutory remedies for contesting the annexation and the failure to provide services.
Such notice shall be given by publication once a week for at least two successive weeks prior to the date of the informational meeting, with each publication being on the same day of the week, in a newspaper having general circulation in the municipality and, in addition thereto, if the area to be annexed lies in a county containing less than fifty percent (50%) of the land area of the municipality, in a newspaper having general circulation in the area of proposed annexation. If there be no such newspaper, the municipality shall post the notice in at least five public places within the municipality and at least five public places in the area to be annexed for 30 days prior to the date of public informational meeting. In addition, notice shall be mailed at least four weeks prior to date of the informational meeting, by first class mail, postage prepaid to the owners as shown by the tax records of the county of all freehold interests in real property located within the area to be annexed. The person or persons mailing such notices shall certify to the governing board that fact, and such certificate shall become a part of the record of the annexation proceeding and shall be deemed conclusive in the absence of fraud. If the notice is returned to the city by the postal service by the tenth day before the informational meeting, a copy of the notice shall be sent by certified mail, return receipt requested, at least seven days before the informational meeting. Failure to comply with the mailing requirement of this subsection shall not invalidate the annexation unless it is shown that the requirements were not substantially complied with.
If the governing board by resolution finds that the tax records are not adequate to identify the owners of some or all of the parcels of real property within the area it may in lieu of the mail procedure as to those parcels where the owners could not be so identified, post the notice at least 30 days prior to the date of public informational meeting on all buildings on such parcels, and in at least five other places within the area to be annexed. In any case where notices are placed on property, the person placing the notice shall certify that fact to the governing board.
(c)	Action Prior to Informational Meeting. – At least 30 days before the date of the public informational meeting, the governing board shall approve the report provided for in G.S. 160A‑35, and shall make it available to the public at the office of the municipal clerk. In addition, the municipality may prepare a summary of the full report for public distribution. In addition, the city shall post in the office of the city clerk at least 30 days before the public informational meeting a legible map of the area to be annexed and a list of the persons holding freehold interests in property in the area to be annexed that it has identified.
(c1)	Public Informational Meeting. – At the public informational meeting a representative of the municipality shall first make an explanation of the report required in G.S. 160A‑35. Following such explanation, all persons resident or owning property in the territory described in the notice of public hearing, and all residents of the municipality, shall be given the opportunity to ask questions and receive answers regarding the proposed annexation. A summary of the annexation process and time lines and a summary of available statutory remedies for contesting the annexation and the failure to provide services shall be distributed at the public informational meeting.
(d)	Public Hearing. – At the public hearing a representative of the municipality shall first make an explanation of the report required in G.S. 160A‑35. Following such explanation, all persons resident or owning property in the territory described in the notice of public hearing, and all residents of the municipality, shall be given an opportunity to be heard. A summary of the annexation process and time lines and a summary of available statutory remedies for contesting the annexation and the provision of services shall be distributed at the public hearing.
(e)	Passage of the Annexation Ordinance. – The municipal governing board shall take into consideration facts presented at the public hearing and shall have authority to amend the report required by G.S. 160A‑35 to make changes in the plans for serving the area proposed to be annexed so long as such changes meet the requirements of G.S. 160A‑35. At any regular or special meeting held no sooner than the tenth day following the public hearing and not later than 90 days following such public hearing, the governing board shall have authority to adopt an ordinance extending the corporate limits of the municipality to include all, or such part, of the area described in the notice of public hearing which meets the requirements of G.S. 160A‑36 and which the governing board has concluded should be annexed. The ordinance shall:
(1)	Contain specific findings showing that the area to be annexed meets the requirements of G.S. 160A‑36. The external boundaries of the area to be annexed shall be described by metes and bounds. In showing the application of G.S. 160A‑36(c) and (d) to the area, the governing board may refer to boundaries set forth on a map of the area and incorporate same by reference as a part of the ordinance.
(2)	A statement of the intent of the municipality to provide services to the area being annexed as set forth in the report required by G.S. 160A‑35.
(3)	A specific finding that on the effective date of annexation the municipality will have funds appropriated in sufficient amount to finance construction of any water and sewer lines found necessary in the report required by G.S. 160A‑35 to extend the basic water and/or sewer system of the municipality into the area to be annexed, or that on the effective date of annexation the municipality will have authority to issue bonds in an amount sufficient to finance such construction. If authority to issue such bonds must be secured from the electorate of the municipality prior to the effective date of annexation, then the effective date of annexation shall be no earlier than the day following the statement of the successful result of the bond election.
(4)	Fix the effective date for annexation. The effective date of annexation shall be fixed as the June 30 next following the adoption of the ordinance.
(f)	Effect of Annexation Ordinance. – Except as provided in subsection (f1) of this section, from and after the effective date of the annexation ordinance, the territory and its citizens and property shall be subject to all debts, laws, ordinances and regulations in force in such municipality and shall be entitled to the same privileges and benefits as other parts of such municipality. (f1)	Property Subject to Present‑Use Value Appraisal. – If an area described in an annexation ordinance includes agricultural land, horticultural land, or forestland that meets either of the conditions listed below on the effective date of annexation, then the annexation becomes effective as to that property pursuant to subsection (f2) of this section:
(1)	The land is being taxed at present‑use value pursuant to G.S. 105‑277.4.
(2)	The land meets both of the following conditions:
a.	On the date of the resolution of intent for annexation it was being used for actual production and is eligible for present‑use value taxation under G.S. 105‑277.4, but the land had not been in use for actual production for the required time under G.S. 105‑277.3.
b.	The assessor for the county where the land subject to annexation is located has certified to the city that the land meets the requirements of this subdivision.
(f2)	Effective Date of Annexation for Certain Property. – Annexation of property subject to annexation under subsection (f1) of this section becomes effective as provided in this subsection:
(1)	Upon the effective date of the annexation ordinance, the property is considered part of the city only (i) for the purpose of establishing city boundaries for additional annexations pursuant to this Article and (ii) for the exercise of city authority pursuant to Article 19 of this Chapter.
(2)	For all other purposes, the annexation becomes effective as to each tract of the property or part thereof on the last day of the month in which that tract or part thereof becomes ineligible for classification pursuant to G.S. 105‑277.4 or no longer meets the requirements of subdivision (f1)(2) of this section. Until annexation of a tract or a part of a tract becomes effective pursuant to this subdivision, the tract or part of a tract is not subject to taxation by the city under Article 12 of Chapter 105 of the General Statutes nor is the tract or part of a tract entitled to services provided by the city. Upon the effective date of annexation, taxation of real and personal property is subject to the provisions of G.S. 160A‑58.10.
(g)	Simultaneous Annexation Proceedings. – If a municipality is considering the annexation of two or more areas which are all adjacent to the municipal boundary but are not adjacent to one another, it may undertake simultaneous proceedings under authority of this Part for the annexation of such areas.
(h)	Remedies for Failure to Provide Services. – If, not earlier than one year from the effective date of annexation, and not later than 15 months from the effective date of annexation, any person owning property in the annexed territory shall believe that the municipality has not followed through on its service plans adopted under the provisions of G.S. 160A‑35(3) and subsection (e) of this section, the person may apply for a writ of mandamus under the provisions of Article 40, Chapter 1 of the General Statutes. Relief may be granted by the judge of superior court
(1)	If the municipality has not provided the services set forth in its plan submitted under the provisions of G.S. 160A‑35(3)a on substantially the same basis and in the same manner as such services were provided within the rest of the municipality prior to the effective date of annexation, and
(2)	If at the time the writ is sought such services set forth in the plan submitted under the provisions of G.S. 160A‑35(3)a are still being provided on substantially the same basis and in the same manner as on the date of annexation of the municipality.
Relief may also be granted by the judge of superior court
(1)	If the plans submitted under the provisions of G.S. 160A‑35(3)b. require the construction of major trunk water mains and sewer outfall lines and
(2)	If contracts for such construction have not yet been let.
If a writ is issued, costs in the action, including a reasonable attorney's fee for such aggrieved person, shall be charged to the municipality.
		(k)	The city shall report to the Local Government Commission as to whether police protection, fire protection, solid waste, or street maintenance services were provided in accordance with G.S. 160A‑35(3)a. within 60 days after the effective date of the annexation.  Such report shall be filed no more than 30 days following the expiration of the 60‑day period. If a city fails to deliver police protection, fire protection, solid waste or street maintenance services as provided for in G.S. 160A‑35(3)a. within 60 days after the effective date of the annexation, the owner of the property may petition the Local Government Commission for abatement of taxes to be paid to the city for taxes that have been levied as of the end of the 60‑day period, if the petition is filed not more than 120 days after the expiration of the 60‑day period. If the Local Government Commission finds that services were not extended by the end of the 60‑day period, it shall enter an order directing the city not to levy any further ad valorem taxes on the property until the fiscal year commencing after extension of the municipal services."
SECTION 8.  G.S. 160A‑38 reads as rewritten:
"§ 160A‑38.  Appeal.
(a)	Within 75 days following the passage of an annexation ordinance under authority of this Part, any person owning property in the annexed territory who shall believe that he will suffer material injury by reason of the failure of the municipal governing board to comply with the procedure set forth in this Part or to meet the requirements set forth in G.S. 160A‑36 as they apply to his property may file a petition in the superior court of the county in which the municipality is located seeking review of the action of the governing board.
(b)	Such petition shall explicitly state what exceptions are taken to the action of the governing board and what relief the petitioner seeks. Within 10 days after the petition is filed with the court, the person seeking review shall serve copies of the petition by registered mail, return receipt requested, upon the municipality.
(c)	Within 15 days after receipt of the copy of the petition for review, or within such additional time as the court may allow, the municipality shall transmit to the reviewing court
(1)	A transcript of the portions of the municipal journal or minute book in which the procedure for annexation has been set forth and
(2)	A copy of the report setting forth the plans for extending services to the annexed area as required in G.S. 160A‑35.
(d)	If two or more petitions for review are submitted to the court, the court may consolidate all such petitions for review at a single hearing, and the municipality shall be required to submit only one set of minutes and one report as required in subsection (c).
(e)	At any time before or during the review proceeding, any petitioner or petitioners may apply to the reviewing court for an order staying the operation of the annexation ordinance pending the outcome of the review. The court may grant or deny the stay in its discretion upon such terms as it deems proper, and it may permit annexation of any part of the area described in the ordinance concerning which no question for review has been raised.
(f)	The court shall fix the date for review of annexation proceedings under this Chapter, which review date shall preferably be within 30 days following the last day for receiving petitions to the end that review shall be expeditious and without unnecessary delays. The review shall be conducted by the court without a jury. The court may hear oral arguments and receive written briefs, and may take evidence intended to show either
(1)	That the statutory procedure was not followed or
(2)	That the provisions of G.S. 160A‑35 were not met, or
(3)	That the provisions of G.S. 160A‑36 have not been met.
(g)	The court may affirm the action of the governing board without change, or it may
(1)	Remand the ordinance to the municipal governing board for further proceedings if procedural irregularities are found to have materially prejudiced the substantive rights of any of the petitioners.
(2)	Remand the ordinance to the municipal governing board for amendment of the boundaries to conform to the provisions of G.S. 160A‑36 if it finds that the provisions of G.S. 160A‑36 have not been met; provided, that the court cannot remand the ordinance to the municipal governing board with directions to add area to the municipality which was not included in the notice of public hearing and not provided for in plans for service.
(3)	Remand the report to the municipal governing board for amendment of the plans for providing services to the end that the provisions of G.S. 160A‑35 are satisfied.
(4)	Declare the ordinance null and void, if the court finds that the ordinance cannot be corrected by remand as provided in subdivisions (1), (2), or (3) of this subsection.
If any municipality shall fail to take action in accordance with the court's instructions upon remand within 90 days following entry of the order embodying the court's instructions, the annexation proceeding shall be deemed null and void.
(h)	Any party to the review proceedings, including the municipality, may appeal to the Court of Appeals from the final judgment of the superior court under rules of procedure applicable in other civil cases. The superior court may, with the agreement of the municipality, permit annexation to be effective with respect to any part of the area concerning which no appeal is being made and which can be incorporated into the city without regard to any part of the area concerning which an appeal is being made.
(i)	If part or all of the area annexed under the terms of an annexation ordinance is the subject of an appeal to the superior court, Court of Appeals or Supreme Court on the effective date of the ordinance, then the ordinance shall be deemed amended to make the effective date with respect to such area the last day of the next full calendar month following the date of the final judgment of the superior court, Court of Appeals or Supreme Court, whichever is appropriate, or the date the municipal governing board completes action to make the ordinance conform to the court's instructions in the event of remand. Upon the effective date of annexation, taxation of real and personal property is subject to the provisions of G.S. 160A‑58.10. The municipal governing board may, however, adopt a resolution prior to the date the annexation would become effective under this subsection, setting the effective date for the 30th day of June next following the date of the final judgment. For the purposes of this subsection, a denial of a petition for a rehearing or for discretionary review shall be treated as a final judgment.(j)	The provisions of subsection (i) of this section shall apply to any judicial review authorized in whole or in part by G.S. 160A‑37.1(i) or G.S. 160A‑37.3(g).
(k)	In any proceeding related to an annexation ordinance appeal under this section, a city shall not state a claim for lost property tax revenue caused by the appeal. Nothing in this Article shall be construed to mean that as a result of an appeal a municipality may assert a claim for property tax revenue lost during the pendency of the appeal.
(l)	Any settlement agreed to by all parties in an appeal under this section may be presented to the superior court in the county in which the municipality is located. If the superior court, in its discretion, approves the settlement, it shall be binding on all parties without the need for approval by the General Assembly."
SECTION 9.  G.S. 160A‑46 reads as rewritten:
"§ 160A‑46.  Authority to annex.
The governing board of any municipality having a population of 10,000 or more persons according to the last federal decennial census may extend the corporate limits of such municipality under the procedure set forth in this Part. This Part does not apply to any municipality unless it provides, at the time of adoption of the resolution of intent, at least two of the four major municipal services listed in G.S. 160A‑47(3)a. To qualify under this section, the service must be provided directly by the municipality, provided by a joint agency or authority of which the municipality is a full participating member, or provided by contract between the municipality and a third party. In the case of police protection provided by contract between the municipality and the sheriff's department, to qualify under this section the contract must establish a higher level of service than is otherwise provided in the area, such as a designated deputy or increased patrols."
SECTION 10.  G.S. 160A‑47 reads as rewritten:
"§ 160A‑47.  Prerequisites to annexation; ability to serve; report and plans.
A municipality exercising authority under this Part shall make plans for the extension of services to the area proposed to be annexed and shall, prior to the public hearing provided for in G.S. 160A‑49, prepare a report setting forth such plans to provide services to such area. The report shall include:
(1)	A map or maps of the municipality and adjacent territory to show the following information:
a.	The present and proposed boundaries of the municipality.
b.	The present major trunk water mains and sewer interceptors and outfalls, and the proposed extensions of such mains and outfalls as required in subdivision (3) of this section. The water and sewer map must bear the seal of a registered professional engineer.
c.	The general land use pattern in the area to be annexed.
(2)	A statement showing that the area to be annexed meets the requirements of G.S. 160A‑48.
(3)	A statement setting forth the plans of the municipality for extending to the area to be annexed each major municipal service performed within the municipality at the time of annexation. Specifically, such plans shall:
a.	Provide for extending police protection, fire protection, solid waste collection and street maintenance services to the area to be annexed on the date of annexation on substantially the same basis and in the same manner as such services are provided within the rest of the municipality prior to annexation. A contract with a rural fire department to provide fire protection shall be an acceptable method of providing fire protection. If a water distribution system is not available in the area to be annexed, the plans must call for reasonably effective fire protection services until such time as waterlines are made available in such area under existing municipal policies for the extension of waterlines. A contract with a private firm to provide solid waste collection services shall be an acceptable method of providing solid waste collection services.
b.	Provide for extension of major trunk water mains and sewer outfall lines into the area to be annexed so that when such lines are constructed, property owners in the area to be annexed will be able to secure public water and sewer service, according to the policies in effect in such municipality for extending water and sewer lines to individual lots or subdivisions. If requested by the owner of an occupied dwelling unit or an operating commercial or industrial property in writing on a form provided by the municipality, which form acknowledges that such extension or extensions will be made according to the current financial policies of the municipality for making such extensions, and if such form is received by the city clerk no later than 30 days after the public hearing, provide for extension of water and sewer lines to the property or to a point on a public street or road right‑of‑way adjacent to the property according to the financial policies in effect in such municipality for extending water and sewer lines. If any such requests are timely made, the municipality shall at the time of adoption of the annexation ordinance amend its report and plan for services to reflect and accommodate such requests, if an amendment is necessary. In areas where the municipality is required to extend sewer service according to its policies, but the installation of sewer is not economically feasible due to the unique topography of the area, the municipality shall provide septic system maintenance and repair service until such time as sewer service is provided to properties similarly situated.
c.	If extension of major trunk water mains, sewer outfall lines, sewer lines and water lines is necessary, set forth a proposed timetable for construction of such mains, outfalls and lines as soon as possible following the effective date of annexation. In any event, the plans shall call for construction to be completed within two years of the effective date of annexation.
d.	Set forth the method under which the municipality plans to finance extension of services into the area to be annexed. In calculating the cost of extending water and sewer services to the area to be annexed, the municipality shall base its estimates upon the assumption that all eligible property owners will request the extension of water and sewer lines to their individual lots under sub‑subdivision (3)b. of this subdivision.
(4)	A statement of the impact of the annexation on any rural fire department providing service in the area to be annexed and a statement of the impact of the annexation on fire protection and fire insurance rates in the area to be annexed, if the area where service is provided is in an insurance district designated under G.S. 153A‑233, a rural fire protection district under Article 3A of Chapter 69 of the General Statutes, or a fire service district under Article 16 of Chapter 153A of the General Statutes. The rural fire department shall make available to the city not later than 30 days following a written request from the city all information in its possession or control, including but not limited to operational, financial and budgetary information, necessary for preparation of a statement of impact. The rural fire department forfeits its rights under G.S. 160A‑49.1 and G.S. 160A‑49.2 if it fails to make a good faith response within 45 days following receipt of the written request for information from the city, provided that the city's written request so states by specific reference to this section.
(5)	A statement showing how the proposed annexation will affect the city's finances and services, including city revenue change estimates. Estimates must include projections for at least a five‑year period beyond the first year that expenditures are to be made for the provision of city services to the annexed area, with accounting by revenue source and category of expenditure. This statement shall be delivered to the clerk of the board of county commissioners at least 30 days before the date of the public informational meeting on any annexation under this Part."
SECTION 11.  G.S. 160A‑48 reads as rewritten:
"§ 160A‑48.  Character of area to be annexed.
(a)	A municipal governing board may extend the municipal corporate limits to include any area
(1)	Which meets the general standards of subsection (b), and
(2)	Every part of which meets the requirements of either subsection (c) or subsection (d) of this section or every part of which is completely surrounded by the municipality's primary corporate limits.
(b)	The total area to be annexed must meet the following standards:
(1)	It must be adjacent or contiguous to the municipality's boundaries at the time the annexation proceeding is begun, except if the entire territory of a county water and sewer district created under G.S. 162A‑86(b1) is being annexed, the annexation shall also include any noncontiguous pieces of the district as long as the part of the district with the greatest land area is adjacent or contiguous to the municipality's boundaries at the time the annexation proceeding is begun.
(2)	At least one eighth of the aggregate external boundaries of the area must coincide with the municipal boundary. A connecting corridor consisting solely of a public street or street right‑of‑way shall not be used to establish contiguity to an outlying, noncontiguous area.
(3)	No part of the area shall be included within the boundary of another incorporated municipality.
(c)	Part or all of the area to be annexed must be developed for urban purposes at the time of approval of the report provided for in G.S. 160A‑47. Area of streets and street rights‑of‑way shall not be used to determine total acreage under this section. An area developed for urban purposes is defined as any area which meets any one of the following standards:
(1)	Has a total resident population equal to at least two and three‑tenths persons for each acre of land included within its boundaries; or
(2)	Has a total resident population equal to at least one person for each acre of land included within its boundaries, and is subdivided into lots and tracts such that at least sixty percent (60%) of the total acreage consists of lots and tracts three acres or less in size and such that at least sixty‑five percent (65%) of the total number of lots and tracts are one acre or less in size; or
(3)	Is so developed that at least sixty percent (60%) of the total number of lots and tracts in the area at the time of annexation are used for residential, commercial, industrial, institutional or governmental purposes, and is subdivided into lots and tracts such that at least sixty percent (60%) of the total acreage, not counting the acreage used at the time of annexation for commercial, industrial, governmental or institutional purposes, consists of lots and tracts three acres or less in size. For purposes of this section, a lot or tract shall not be considered in use for a commercial, industrial, institutional, or governmental purpose if the lot or tract is used only temporarily, occasionally, or on an incidental or insubstantial basis in relation to the size and character of the lot or tract. For purposes of this section, acreage in use for commercial, industrial, institutional, or governmental purposes shall include acreage actually occupied by buildings or other man‑made structures together with all areas that are reasonably necessary and appurtenant to such facilities for purposes of parking, storage, ingress and egress, utilities, buffering, and other ancillary services and facilities; or
(4)	Is the entire area of any county water and sewer district created under G.S. 162A‑86(b1), but this subdivision only applies to annexation by a municipality if that:
a.	Municipality has provided in a contract with that district that the area is developed for urban purposes; and
b.	Contract provides for the municipality to operate the sewer system of that county water and sewer district;
provided that the special categorization provided by this subdivision only applies if the municipality is annexing in one proceeding the entire territory of the district not already within the corporate limits of a municipality; or
(5)	Is so developed that, at the time of the approval of the annexation report, all tracts in the area to be annexed are used for commercial, industrial, governmental, or institutional purposes.
(d)	In addition to areas developed for urban purposes, a governing board may include in the area to be annexed any area which does not meet the requirements of subsection (c) if such area either:
(1)	Lies between the municipal boundary and an area developed for urban purposes so that the area developed for urban purposes is either not adjacent to the municipal boundary or cannot be served by the municipality without extending services and/or water and/or sewer lines through such sparsely developed area; or
(2)	Is adjacent, on at least sixty percent (60%) of its external boundary, to any combination of the municipal boundary and the boundary of an area or areas developed for urban purposes as defined in subsection (c).
The purpose of this subsection is to permit municipal governing boards to extend corporate limits to include all nearby areas developed for urban purposes and where necessary to include areas which at the time of annexation are not yet developed for urban purposes but which constitute necessary land connections between the municipality and areas developed for urban purposes or between two or more areas developed for urban purposes. For purposes of this subsection, "necessary land connection" means an area that does not exceed twenty‑five percent (25%) of the total area to be annexed.
(e)	In fixing new municipal boundaries, a municipal governing board shall use recorded property lines and streets as boundaries. Some or all of the boundaries of a county water and sewer district may also be used when the entire district not already within the corporate limits of a municipality is being annexed.
(f)	The area of an abolished water and sewer district shall be considered to be a water and sewer district for the purpose of this section even after its abolition under G.S. 162A‑87.2(b)."
SECTION 12.  G.S. 160A‑49 reads as rewritten:
"§ 160A‑49.  Procedure for annexation.
(a)	Resolution of Consideration. –  Any municipal governing board desiring to annex territory under the provisions of this Part shall first pass a resolution identifying the area as being under consideration for annexation. The resolution of consideration may have a metes and bounds description or a map and shall remain effective for two years after adoption and shall be filed with the city clerk. A new resolution of consideration adopted before expiration of the two‑year period for a previously adopted resolution covering the same area shall relate back to the date of the previous resolution. Adoption of a resolution of consideration shall not confer prior jurisdiction over the area as to any other city. A notice of adoption of the resolution of consideration shall be published once a week for two successive weeks, with each publication being on the same day of the week, in a newspaper having general circulation in the municipality. The second publication shall be no more than 30 days following adoption of the resolution. The notice shall contain a map or description of the area under consideration and a summary of the annexation process and time lines.
(a1)	Resolution of Intent. – At least one year after adoption of the resolution of consideration, the municipal governing body may adopt a resolution stating the intent of the municipality to proceed with annexation of some or all of the area described in the resolution of consideration. Such resolution of intent shall describe the boundaries of the area intended for annexation, fix a date for a public informational meeting, and fix a date for a public hearing on the question of annexation. The date for the public informational meeting shall be not less than 45 days and not more than 55 days following passage of the resolution. The date for the public hearing to be not less than 60 days and not more than 90 days following passage of the resolution of intent.
(b)	Notice of Public Hearing. – The notice of public hearing shall:
(1)	Fix the date, hour and place of the public informational meeting and the date, hour, and place of the public hearing.
(2)	Describe clearly the boundaries of the area under consideration, and include a legible map of the area.
(3)	State that the report required in G.S. 160A‑47 will be available at the office of the municipal clerk at least 30 days prior to the date of the public informational meeting.
(4)	Include a notice of a property owner's rights to request water and sewer service in accordance with G.S. 160A‑47(3)b. and a form for making the request. The form shall state that a request for extending water and sewer lines to an individual lot does not waive the right to contest the annexation, but the request shall be binding if the annexation becomes effective. The form shall state the municipality's policy for financial participation in the cost of the extension and the statutory time line for completion. The form shall further state the policy, with estimated time line, for extension of water and sewer lines to properties that do not request an individual extension as provided in G.S. 160A‑47(3)b.
(5)	Include an explanation of a property owner's rights pursuant to subsections (f1) and (f2) of this section.
(6)	Include a summary of the annexation process and time lines and a summary of available statutory remedies for contesting the annexation and the failure to provide services.
Such notice shall be given by publication once a week for at least two successive weeks prior to the date of the informational meeting, with each publication being on the same day of the week, in a newspaper having general circulation in the municipality and, in addition thereto, if the area to be annexed lies in a county containing less than fifty percent (50%) of the land area of the municipality, in a newspaper having general circulation in the area of proposed annexation. If there be no such newspaper, the municipality shall post the notice in at least five public places within the municipality and at least five public places in the area to be annexed for 30 days prior to the date of public informational meeting. In addition, notice shall be mailed at least four weeks prior to date of the informational meeting by first class mail, postage prepaid to the owners as shown by the tax records of the county of all freehold interests in real property located within the area to be annexed. The person or persons mailing such notices shall certify to the governing board that fact, and such certificate shall become a part of the record of the annexation proceeding and shall be deemed conclusive in the absence of fraud. If the notice is returned to the city by the postal service by the tenth day before the informational meeting, a copy of the notice shall be sent by certified mail, return receipt requested, at least seven days before the informational meeting. Failure to comply with the mailing requirements of this subsection shall not invalidate the annexation unless it is shown that the requirements were not substantially complied with. If the governing board by resolution finds that the tax records are not adequate to identify the owners of some or all of the parcels of real property within the area it may in lieu of the mail procedure as to those parcels where the owners could not be so identified, post the notice at least 30 days prior to the date of public informational meeting on all buildings on such parcels, and in at least five other places within the area to be annexed. In any case where notices are placed on property, the person placing the notices shall certify that fact to the governing board.
(c)	Action Prior to Informational Meeting. – At least 30 days before the date of the public informational meeting, the governing board shall approve the report provided for in G.S. 160A‑47, and shall make it available to the public at the office of the municipal clerk. In addition, the municipality may prepare a summary of the full report for public distribution. In addition, the city shall post in the office of the city clerk, at least 30 days before the public informational meeting, a legible map of the area to be annexed and a list of persons holding freehold interests in property in the area to be annexed that it has identified.
(c1)	Public Informational Meeting. – At the public informational meeting a representative of the municipality shall first make an explanation of the report required in G.S. 160A‑47. Following such explanation, all persons resident or owning property in the territory described in the notice of public hearing, and all residents of the municipality, shall be given the opportunity to ask questions and receive answers regarding the proposed annexation. A summary of the annexation process and time lines, a summary of available statutory remedies for contesting the annexation and the provision of services, and the form for requesting the extension of water and sewer lines to individual lots shall be distributed at the public informational meeting.
(d)	Public Hearing. – At the public hearing a representative of the municipality shall first make an explanation of the report required in G.S. 160A‑47. Following such explanation, all persons resident or owning property in the territory described in the notice of public hearing, and all residents of the municipality, shall be given an opportunity to be heard. A summary of the annexation process and time lines, a summary of available statutory remedies for contesting the annexation and the failure to provide services, and the form for requesting the extension of water and sewer lines to individual lots shall be distributed at the public hearing.
(e)	Passage of the Annexation Ordinance. – The municipal governing board shall take into consideration facts presented at the public hearing and shall have authority to amend the report required by G.S. 160A‑47 to make changes in the plans for serving the area proposed to be annexed so long as such changes meet the requirements of G.S. 160A‑47, provided that if the annexation report is amended to show additional subsections of G.S. 160A‑48(c) or (d) under which the annexation qualifies that were not listed in the original report, the city must hold an additional public hearing on the annexation not less than 30 nor more than 90 days after the date the report is amended, and notice of such new hearing shall be given at the first public hearing. At any regular or special meeting held no sooner than the tenth day following the public hearing and not later than 90 days following such public hearing, the governing board shall have authority to adopt an ordinance extending the corporate limits of the municipality to include all, or such part, of the area described in the notice of public hearing which meets the requirements of G.S. 160A‑48 and which the governing board has concluded should be annexed. The ordinance shall:
(1)	Contain specific findings showing that the area to be annexed meets the requirements of G.S. 160A‑48. The external boundaries of the area to be annexed shall be described by metes and bounds. In showing the application of G.S. 160A‑48(c) and (d) to the area, the governing board may refer to boundaries set forth on a map of the area and incorporate same by reference as a part of the ordinance.
(2)	A statement of the intent of the municipality to provide services to the area being annexed as set forth in the report required by G.S. 160A‑47.
(3)	A specific finding that on the effective date of annexation the municipality will have funds appropriated in sufficient amount to finance construction of any major trunk water mains and sewer outfalls and such water and sewer lines as required in G.S. 160A‑47(3)b found necessary in the report required by G.S. 160A‑47 to extend the basic water and/or sewer system of the municipality into the area to be annexed, or that on the effective date of annexation the municipality will have authority to issue bonds in an amount sufficient to finance such construction. If authority to issue such bonds must be secured from the electorate of the municipality prior to the effective date of annexation, then the effective date of annexation shall be no earlier than the day following the statement of the successful result of the bond election.
(4)	Fix the effective date for annexation. The effective date of annexation shall be fixed as the June 30 next following the adoption of the ordinance.
(f)	Effect of Annexation Ordinance. – Except as provided in subsection (f1) of this section, from and after the effective date of the annexation ordinance, the territory and its citizens and property shall be subject to all debts, laws, ordinances and regulations in force in such municipality and shall be entitled to the same privileges and benefits as other parts of such municipality. Provided that annexed property which is a part of a sanitary district, which has installed water and sewer lines, paid for by the residents of said district, shall not be subject to that part of the municipal taxes levied for debt service for the first five years after the effective date of annexation. If this proviso should be declared by a court of competent jurisdiction to be in violation of any provision of the federal or State Constitution, the same shall not affect the remaining provisions of this Part.(f1)	Property Subject to Present‑Use Value Appraisal. – If an area described in an annexation ordinance includes agricultural land, horticultural land, or forestland that on the effective date of annexation is:
(1)	Land that is being taxed at present‑use value pursuant to G.S. 105‑277.4; or
(2)	Land that:
a.	Was on the date of the resolution of intent for annexation being used for actual production and is eligible for present‑use value taxation under G.S. 105‑277.4, but the land has not been in use for actual production for the required time under G.S. 105‑277.3; and
b.	The assessor for the county where the land subject to annexation is located has certified to the city that the land meets the requirements of this subdivision
the annexation becomes effective as to that property pursuant to subsection (f2) of this section.
(f2)	Effective Date of Annexation for Certain Property. – Annexation of property subject to annexation under subsection (f1) of this section shall become effective:
(1)	Upon the effective date of the annexation ordinance, the property is considered part of the city only (i) for the purpose of establishing city boundaries for additional annexations pursuant to this Article and (ii) for the exercise of city authority pursuant to Article 19 of this Chapter.
(2)	For all other purposes, the annexation becomes effective as to each tract of such property or part thereof on the last day of the month in which that tract or part thereof becomes ineligible for classification pursuant to G.S. 105‑277.4 or no longer meets the requirements of subdivision (f1)(2) of this section. Until annexation of a tract or a part of a tract becomes effective pursuant to this subdivision, the tract or part of a tract is not subject to taxation by the city under Article 12 of Chapter 105 of the General Statutes nor is the tract or part of a tract entitled to services provided by the city. Upon the effective date of annexation, taxation of real and personal property is subject to the provisions of G.S. 160A‑58.10.
(g)	Simultaneous Annexation Proceedings. – If a municipality is considering the annexation of two or more areas which are all adjacent to the municipal boundary but are not adjacent to one another, it may undertake simultaneous proceedings under authority of this Part for the annexation of such areas.
(h)	Remedies for Failure to Provide Services. – If, not earlier than one year from the effective date of annexation, and not later than 15 months from the effective date of annexation, any person owning property in the annexed territory shall believe that the municipality has not followed through on its service plans adopted under the provisions of G.S. 160A‑47(3) and 160A‑49(e), for any required service other than water and sewer services such person may apply for a writ of mandamus under the provisions of Article 40, Chapter 1 of the General Statutes. Relief may be granted by the judge of superior court
(1)	If the municipality has not provided the services set forth in its plan submitted under the provisions of G.S. 160A‑47(3)a on substantially the same basis and in the same manner as such services were provided within the rest of the municipality prior to the effective date of annexation, and
(2)	If at the time the writ is sought such services set forth in the plan submitted under the provisions of G.S. 160A‑47(3)a are still being provided on substantially the same basis and in the same manner as on the date of annexation of the municipality.
If, not earlier than 24 months from the effective date of the annexation, and not later than 27 months from the effective date of the annexation, any person owning property in the annexed area can show that the plans submitted under the provisions of G.S. 160A‑47(3)c require the construction of major trunk water mains and sewer outfall lines and if construction has not been completed within two years of the effective date of the annexation, relief may also be granted by the superior court by an order to the municipality to complete such lines and outfalls within a certain time. Similar relief may be granted by the superior court to any owner of property who made a timely request for a water or sewer line, or both, pursuant to G.S. 160A‑47(3)b and such lines have not been completed within two years from the effective date of annexation in accordance with applicable city policies and through no fault of the owner, if such owner petitions for such relief not earlier than 24 months following the effective date of annexation and not later than 27 months following the effective date of annexation.
If a writ is issued, costs in the action, including a reasonable attorney's fee for such aggrieved person, shall be charged to the municipality.
		(k)	If a valid request was made for extension of a water or sewer line under G.S. 
160A‑47(3)b., the city shall report to the Local Government Commission as to whether the extension was completed within the two‑year time period specified in G.S. 160A‑47(3)c. If a valid request for extension of a water or sewer line has been made under G.S. 160A‑47(3)b., and the extension is not complete at the end of two years after the effective date of the annexation ordinance, the owner of the property may petition the Local Government Commission for abatement of taxes to be paid to the city which have not been levied as of the expiration date of the two‑year period, if such petition is filed not more than 60 days after the expiration of the two‑year period. If the Local Government Commission finds that the extension to the property was not complete by the end of the two‑year period, it shall enter an order directing the city not to levy any further ad valorem taxes on the property until the fiscal year commencing after completion of the extension. In addition, if the Local Government Commission found that the extension to the property was not completed by the end of the two‑year period, and if it finds that for any fiscal year during the period beginning with the first day of the fiscal year in which the annexation ordinance became effective and ending the last day of the fiscal year in which the two‑year period expired, the city made an appropriation for construction, operation or maintenance of a water or sewer system (other than payments the city made as a customer of the system) from the fund or funds for which ad valorem taxes are levied, then the Local Government Commission shall order the city to release or refund an amount of the petitioner's property taxes for that year in question in proportion to the percentage of appropriations in the fund made for water and sewer services. By way of illustration, if a net amount of one hundred thousand dollars ($100,000) was appropriated for water or sewer construction, operation or maintenance from a fund which had total expenditures of ten million dollars ($10,000,000) and the petitioner's tax levy was one thousand dollars ($1,000), the amount of release or refund shall be ten dollars ($10.00).
(l)	The city shall report to the Local Government Commission as to whether police protection, fire protection, solid waste, or street maintenance services were provided in accordance with G.S. 160A‑47(3)a. within 60 days after the effective date of the annexation. Such report shall be filed no more than 30 days following the expiration of the 60‑day period. If a city fails to deliver police protection, fire protection, solid waste or street maintenance services as provided for in G.S. 160A‑47(3)a. within 60 days after the effective date of the annexation, the owner of the property may petition the Local Government Commission for abatement of taxes to be paid to the city for taxes that have been levied as of the end of the 60‑day period, if the petition is filed not more than 120 days after the expiration of the 60‑day period. If the Local Government Commission finds that services were not extended by the end of the 60‑day period, it shall enter an order directing the city not to levy any further ad valorem taxes on the property until the fiscal year commencing after extension of the municipal services."
SECTION 13.  G.S. 160A‑50 reads as rewritten:
"§ 160A‑50.  Appeal.
(a)	Within 75 days following the passage of an annexation ordinance under authority of this Part, any person owning property in the annexed territory who shall believe that he will suffer material injury by reason of the failure of the municipal governing board to comply with the procedure set forth in this Part or to meet the requirements set forth in G.S. 160A‑48 as they apply to his property may file a petition in the superior court of the county in which the municipality is located seeking review of the action of the governing board.
(b)	Such petition shall explicitly state what exceptions are taken to the action of the governing board and what relief the petitioner seeks. Within 10 days after the petition is filed with the court, the person seeking review shall serve copies of the petition by registered mail, return receipt requested, upon the municipality.
(c)	Within 15 days after receipt of the copy of the petition for review, or within such additional time as the court may allow, the municipality shall transmit to the reviewing court
(1)	A transcript of the portions of the municipal journal or minute book in which the procedure for annexation has been set forth and
(2)	A copy of the report setting forth the plans for extending services to the annexed area as required in G.S. 160A‑47.
(d)	If two or more petitions for review are submitted to the court, the court may consolidate all such petitions for review at a single hearing, and the municipality shall be required to submit only one set of minutes and one report as required in subsection (c).
(e)	At any time before or during the review proceeding, any petitioner or petitioners may apply to the reviewing court for an order staying the operation of the annexation ordinance pending the outcome of the review. The court may grant or deny the stay in its discretion upon such terms as it deems proper, and it may permit annexation of any part of the area described in the ordinance concerning which no question for review has been raised.
(f)	The court shall fix the date for review of annexation proceedings under this Part, which review date shall preferably be within 30 days following the last day for receiving petitions to the end that review shall be expeditious and without unnecessary delays. The review shall be conducted by the court without a jury. The court may hear oral arguments and receive written briefs, and may take evidence intended to show either
(1)	That the statutory procedure was not followed, or
(2)	That the provisions of G.S. 160A‑47 were not met, or
(3)	That the provisions of G.S. 160A‑48 have not been met.
(g)	The court may affirm the action of the governing board without change, or it may
(1)	Remand the ordinance to the municipal governing board for further proceedings if procedural irregularities are found to have materially prejudiced the substantive rights of any of the petitioners.
(2)	Remand the ordinance to the municipal governing board for amendment of the boundaries to conform to the provisions of G.S. 160A‑48 if it finds that the provisions of G.S. 160A‑48 have not been met; provided, that the court cannot remand the ordinance to the municipal governing board with directions to add area to the municipality which was not included in the notice of public hearing and not provided for in plans for service.
(3)	Remand the report to the municipal governing board for amendment of the plans for providing services to the end that the provisions of G.S. 160A‑47 are satisfied.
(4)	Declare the ordinance null and void, if the court finds that the ordinance cannot be corrected by remand as provided in subdivisions (1), (2), or (3) of this subsection.
If any municipality shall fail to take action in accordance with the court's instructions upon remand within 90 days following entry of the order embodying the court's instructions, the annexation proceeding shall be deemed null and void.
(h)	Any party to the review proceedings, including the municipality, may appeal to the Court of Appeals from the final judgment of the superior court under rules of procedure applicable in other civil cases. The superior court may, with the agreement of the municipality, permit annexation to be effective with respect to any part of the area concerning which no appeal is being made and which can be incorporated into the city without regard to any part of the area concerning which an appeal is being made.
(i)	If part or all of the area annexed under the terms of an annexation ordinance is the subject of an appeal to the superior court, Court of Appeals or Supreme Court on the effective date of the ordinance, then the ordinance shall be deemed amended to make the effective date with respect to such area the last day of the next full calendar month following the date of the final judgment of the superior court or appellate division, whichever is appropriate, or the date the municipal governing board completes action to make the ordinance conform to the court's instructions in the event of remand. Upon the effective date of annexation, taxation of real and personal property is subject to the provisions of G.S. 160A‑58.10. The municipal governing board may, however, adopt a resolution prior to the date the annexation would become effective under this subsection, setting the effective date for the 30th day of June next following the date of the final judgment. For the purposes of this subsection, a denial of a petition for rehearing or for discretionary review shall be treated as a final judgment.(j)	If a petition for review is filed under subsection (a) of this section or an appeal is filed under G.S. 160A‑49.1(g) or G.S. 160A‑49.3(g), and a stay is granted, then the time periods of two years, 24 months or 27 months provided in G.S. 160A‑47(3)c, 160A‑49(h), or 160A‑49(j) are each extended by the lesser of the length of the stay or one year for that annexation.
(k)	The provisions of subsection (i) of this section shall apply to any judicial review authorized in whole or in part by G.S. 160A‑49.1(i) or G.S. 160A‑49.3(g).
(l)	In any proceeding related to an annexation ordinance appeal under this section, a city shall not state a claim for lost property tax revenue caused by the appeal. Nothing in this Article shall be construed to mean that as a result of an appeal a municipality may assert a claim for property tax revenue lost during the pendency of the appeal.
(m)	Any settlement reached by all parties in an appeal under this section may be presented to the superior court in the county in which the municipality is located. If the superior court, in its discretion, approves the settlement, it shall be binding on all parties without the need for approval by the General Assembly."
SECTION 14.  G.S. 160A‑58.10 reads as rewritten:
"§ 160A‑58.10.  Tax of newly annexed territory.
(a)	Applicability of Section. – This section applies to municipal taxation:(1)	In territory annexed pursuant to Part 1 or Part 4 of this Article with an effective date other than a date in the month of June;
(2)	In territory annexed subject to present value appraisal for which an annexation becomes effective pursuant to G.S. 160A‑37(f2) or G.S. 160A‑49(f2) on a date other than a date in the month of June;
(3)	In territory for which the effective date of annexation is deemed amended by a final judgment or remand pursuant to G.S. 160A‑38(i) or G.S. 160A‑50(i) and the date is other than a date in the month of June; and
(4)	In territory annexed pursuant to an act of the General Assembly with an effective date other than a date in the month of June.
(b)	Prorated Taxes. – Real and personal property in the newly annexed territory on the January 1 immediately preceding the beginning of the fiscal year in which the annexation becomes effective is subject to prorated municipal taxes levied for that fiscal year as provided in this subsection. The amount of municipal taxes that would have been due on the property had it been within the municipality for the full fiscal year shall be multiplied by the following fraction: the denominator shall be 12 and the numerator shall be the number of full calendar months remaining in the fiscal year, following the day on which the annexation becomes effective. The product of the multiplication is the amount of prorated taxes due. The lien for prorated taxes levied on a parcel of real property shall attach to the parcel taxed on the listing date, as provided in G.S. 105‑285, immediately preceding the fiscal year in which the annexation becomes effective. The lien for prorated taxes levied on personal property shall attach on the same date to all real property of the taxpayer in the taxing unit, including the newly annexed territory. If the annexation becomes effective after June 30 and before September 2, the prorated taxes shall be due and payable on the first day of September of the fiscal year for which the taxes are levied. If the annexation becomes effective after September 1 and before the following July 1, the prorated taxes shall be due and payable on the first day of September of the next succeeding fiscal year. The prorated taxes are subject to collection and foreclosure in the same manner as other taxes levied for the fiscal year in which the prorated taxes become due.
(c)	Taxes in Subsequent Fiscal Years. – In fiscal years subsequent to the fiscal year in which an annexation becomes effective, real and personal property in the newly annexed territory is subject to municipal taxes on the same basis as is the preexisting territory of the municipality.
(d)	Transfer of Tax Records. – For purposes of levying prorated taxes the municipality shall obtain from the county a record of property in the area being annexed that was listed for taxation on the January 1 immediately preceding the fiscal year for which the prorated taxes are levied. In addition, if the effective date of annexation falls between January 1 and June 30, the municipality shall, for purposes of levying taxes for the fiscal year beginning July 1 following the date of annexation, obtain from the county a record of property in the area being annexed that was listed for taxation as of said January 1.
(e)	Privilege License Taxes. – If the effective date of annexation falls between June 1 and June 30, and the effective date of the privilege license tax ordinance of the annexing municipality is June 1, then businesses in the area to be annexed shall be liable for taxes imposed in such ordinances from and after the effective date of annexation."
SECTION 15.  Part 6 of Article 4A of Chapter 160A reads as rewritten:
"Part 6. Annexation Agreements Between Municipalities."
SECTION 16.  Article 4A of Chapter 160A is amended by adding a new Part to read:
"Part 7. Annexation Agreements With Property Owners.
"§ 160A‑58.35. Annexation agreements.
(a)	A city may enter into contracts under which the city agrees to extend water service, sewer service, or both, to specific property and in return the owner or owners of the property agrees to either or both of the following:
(1)	To petition the city for annexation of the property pursuant to Part 1 or Part 4 of Article 4A of this Chapter, upon the city's request;
(2)	Not to join in any appeal if the city adopts an ordinance to annex the property that is served by water or sewer under the contract pursuant to Part 2 or Part 3 of Article 4A of this Chapter.
(b)	If the contract specifies that it runs with the land and is recorded in the office of the register of deeds of the county in which the property is located, the contract is enforceable against the city and against the person or persons who signed it and their heirs, assigns, and successors in interest. As long as the city continues to provide the contracted utility service to the property, the city may enforce the contract through an action for specific performance."
SECTION 17. G.S. 160A‑232 reads as rewritten:
"§ 160A‑232.  Payment of assessments in cash or by installments.
(a)	The owners of assessed property shall have the option, within 30 days after the publication of the notice that the assessment roll has been confirmed, of paying the assessment either in cash or in not more than 10 annual installments, as may have been determined by the council in the resolution directing the project giving rise to the assessment to be undertaken. With respect to payment by installment, the council may provide
(1)	That the first installment with interest shall become due and payable on the date when property taxes are due and payable, and one subsequent installment and interest shall be due and payable on the same date in each successive year until the assessment is paid in full, or
(2)	That the first installment with interest shall become due and payable 60 days after the date that the assessment roll is confirmed, and one subsequent installment and interest shall be due and payable on the same day of the month in each successive year until the assessment is paid in full.(b)	If property is assessed for water or sewer systems pursuant to an annexation under Part 2 or Part 3 of Article 4A of this Chapter, the owners of assessed property shall have the option, within 30 days after the publication of the notice that the assessment roll has been confirmed, of paying the assessment either in cash or in not more than 20 annual installments, as may have been determined by the council in the resolution directing the project giving rise to the assessment to be undertaken. With respect to payment by installment, the council may provide:
(1)	That the first installment with interest shall become due and payable on the date when property taxes are due and payable, and one subsequent installment and interest shall be due and payable on the same date in each successive year until the assessment is paid in full, or
(2)	That the first installment with interest shall become due and payable 60 days after the date that the assessment roll is confirmed, and one subsequent installment and interest shall be due and payable on the same day of the month in each successive year until the assessment is paid in full."
SECTION 18. This act is effective when it becomes law but does not apply to any annexation for which a resolution of intent was adopted prior to the date this act becomes law.