A BILL TO BE ENTITLED
AN ACT to amend the annexation laws to require meaningful services and meaningful oversight.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 2 of Article 4A of Chapter 160A of the General Statutes is repealed.
SECTION 2.  Part 3 of Article 4A of Chapter 160A of the General Statutes reads as rewritten:
"Part 3. Annexation by Cities.
"§ 160A‑45.  Declaration of policy.
It is hereby declared as a matter of State policy:
(1)	That sound urban development is essential to the continued economic development of North Carolina;
(2)	That municipalities are created to provide the governmental services essential for sound urban development and for the protection of health, safety and welfare in areas being intensively used for residential, commercial, industrial, institutional and governmental purposes or in areas undergoing such development;
(3)	That municipal boundaries should be extended in accordance with legislative standards applicable throughout the State, to include such areas and to provide the high quality of meaningful governmental services if needed therein for the public health, safety and welfare;
(4)	 That city initiated annexation of unincorporated land has significant affects on the land use and finances of county government and county landowners and therefore requires review and approval by all parties affected.
(5)	That areas annexed to municipalities in accordance with such uniform legislative standards should receive  meaningful services provided by the annexing municipality in accordance with G.S. 160A‑47(3).
"§ 160A‑46.  Authority to annex.
The governing board of any municipality may extend the corporate limits of such municipality to include contiguous areas in need of meaningful urban services which cannot be resolved without extension of municipal services under the procedure set forth in this Part.
"§ 160A‑47.  Prerequisites to annexation; ability to serve; report and plans.
A municipality exercising authority under this Part shall show that previous annexations made under this Part are successfully completed and shall make plans for the extension of meaningful services to the area in need of meaningful services 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 and shall deliver this report to the board of commissioners of the county where the territory being considered for annexation under this Part is located. 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, sewer interceptors and outfalls, sewer lines and waterlines, and the proposed extensions of such mains and outfalls and all necessary sewer lines and waterlines 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 water and sewer services, police protection, fire protection, solid waste collection and street maintenance services to the area to be annexed on the date of annexation on 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 the sheriff for additional police patrol by the sheriff's department shall not qualify as provision of police protection for the purpose of this Part. A contract with a rural fire department to provide fire protection shall be an acceptable method of providing fire  protection only 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 service only if such a contract is the method of solid waste collection services throughout the municipality at the time of the resolution of consideration to annex.
b.	Provide for extension of major trunk water mains and sewer outfall lines, and all necessary sewer lines and waterlines, 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. In areas where the municipality is required to extend sewer service according to its policies, but the installation of sewer is not e physically feasible or would be environmentally damaging due to the unique topography or environmental qualities 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 three years of the effective date of annexation. A contract with a county authority or other third party water and/or sewer authority shall not qualify under this Part as provision of meaningful services by the municipality considering annexation.
d.	Set forth the method under which the municipality plans to finance extension of all meaningful urban 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‑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. 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.
"§ 160A‑47.1.  Limitation on change in financial participation prior to annexation.
For purposes of the extension of water and sewer services required under G.S. 160A‑47, no ordinance or policy substantially diminishing the financial participation of a municipality in the construction of water or sewer facilities required under this Article may apply to an area being annexed unless the ordinance or policy became effective at least 180 days prior to the date of adoption by the municipality of the resolution giving notice of intent to consider annexing the area under G.S. 160A‑49(a).
"§ 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 standards of subsection (b), and
(2)	Every part of which meets the requirements of subsection (c) and if needed, subsection (d).
(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-third of the aggregate external boundaries of the area must coincide with the municipal boundary.
(3)	No part of the area shall be included within the boundary of another incorporated municipality.
(4)	A majority of property owners have existing water service, sewer or septic service, police protection, or fire protection that is inadequate and clearly poses a threat to the health and safety of the area, and the property owners could not reasonably address the threat themselves through private or public means.
(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 and must be in need of meaningful urban services as defined in G.S. 160A‑53(4). 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:
	(2)	Has a total resident population equal to at least four persons 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 residential 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‑half 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 commercial, industrial, institutional or governmental purposes, and at least twenty percent (20%) of the total number of lots and tracts in the area at the time of the annexation are used for residential purposes and consist of lots and tracts one‑half acre or less. 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
	(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  	 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.
	The purpose of this subsection is to permit municipal governing boards to extend corporate limits to include all nearby areas developed for urban purposes that are in need of meaningful services as described in G.S. 160A‑53(4), 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 fifteen percent (15%) 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).
"§ 160A‑49.  Procedure for annexation.
(a)	Notice of Consideration, County Approval, and Notice of Intent. – Any municipal governing board desiring to annex territory under the provisions of this Part shall first pass a resolution of consideration and send notification to the board of commissioners of the county in which the territory to be annexed is located and to the affected property owners by certified mail. Such resolution shall describe the boundaries of the area under consideration by metes and bounds and include a legible map. The municipal governing body shall fix a date for a public informational meeting  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 board of commissioners of the county in which the territory proposed to be annexed is located shall fix a date for a public hearing on the question of annexation. The date for the public hearing to be not less than 60 days and not more than 90 days following passage of the resolution.
(b)	Notice of Public Hearing. – The notice of public hearing shall:
	(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.
	(5)	Include an explanation of a property owner's rights pursuant to subsections (f1) and (f2) of this section.
Such notices shall be given by publication once a week for at least two successive weeks prior to the date of the informational meeting 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. The period from the date of the first publication to the date of the last publication, both dates inclusive, shall be not less than eight days including Sundays, and the date of the last publication shall be not more than seven days preceding the date of public informational meeting. If there be no such newspaper, the municipality and the county shall post the notice in at least five public places within the municipality and the county 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 certified 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 posted on the property 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, shall provide the report to the board of commissioners of the county or counties where the municipality is located, and to the board of commissioners of the county where the property to be annexed is located, if different, 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.
The notice of the public informational meeting shall:
(1)	State 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 proposed for annexation, and include a legible map of the area.
(3)	State that the report required by 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 the property owner's rights to receive water and sewer service in accordance with G,S. 160A‑47.
(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. The board of commissioners of the county shall hear all public comments and will thereafter certify and state findings of fact to show whether annexation of the areas described in the resolution of consideration is reasonable, financially sound, necessary for the extension of meaningful services, in the best interests of the residents of the area being considered for annexation, and does not adversely affect the administration or the finances of the county or the municipality considering the annexation. If objections to the annexation are presented at the public hearing, before approval of the annexation, the board of commissioners of the county shall call a referendum on the question. Additionally, if a petition is presented at the public hearing signed by at least fifteen percent (15%) of the qualified voters of the municipality asking for a referendum on the issue of annexation, the question of annexation shall also be held separately within the municipality. The board of commissioners of the county shall notify the county board or county boards of election to fix a date of an election to vote to approve or disapprove of the annexation. Ballots, voting systems, or both may be used in accordance with Chapter 163 of the General Statutes. The question to appear shall be
"[ ]FOR	[ ]AGAINST
Extension.
If at such election, a majority of the votes cast from the area proposed for annexation shall be 'For Extension,' and, in the event an election is held in the municipality, the majority of the votes cast in the municipality shall also be 'For Extension,' then from and after the later of the date of the declaration of the result of such election or the effective date contained in the annexation ordinance, the territory and its citizens and property shall be subject to all the debts, laws, ordinances, and regulations in force in said city or town and shall be entitled to the same privileges and benefits as other parts of said city or town. The newly elected territory shall be subject to city taxes as provided by this Article.
(e)	Passage of the Annexation Ordinance. – After securing approval of the board of commissioners of the county in which the area proposed for annexation is located under subsection (d) of this section, and approval by the voters if required under subsection (d) of this section, and after the elapsing of at least one year since the date of adoption of the resolution of consideration, the municipal governing board may adopt a resolution stating its intent to consider annexation of the approved territory. At any regular or special meeting held no sooner than the tenth day following adoption of the resolution of intent, and not later than 90 days following such adoption of the resolution of intent, 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 including approval of the county board of commissioners and a referendum if also required, 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 meaningful services to the area in need of meaningful service 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 adoption of the resolution of intent 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 may be fixed for any date not less than 70 days nor more than 400 days from the date of passage 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. 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. 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. 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.
(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.
(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 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 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 construction of major trunk water mains and sewer outfall lines and such water and sewer lines required in G.S. 160A‑47(3)b. has not been completed within three 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 and such water and sewer lines required in G.S. 160A‑47(3)b. within a certain time. 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 all necessary water or sewer lines are not complete at the end of three 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 three‑year period, if such petition is filed not more than 90 days after the expiration of the three‑year period. If the Local Government Commission finds that the extension to the property was not complete by the end of the three‑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 three‑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 three‑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)	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 90 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.
(m)	If a city fails to provide water and sewer, police protection, fire protection, solid waste or street maintenance services in the same manner and on the same basis as such services are provided to the municipality within three years, and at least twenty‑five percent (25%) of the property owners in the newly annexed area petition the county governing body for deannexation, the county governing board shall submit the question of removal from the corporate limits to a vote of the qualified voters of the newly annexed area, and the governing body may or may not cause the question to be submitted to the remaining residents of the municipality.
Ballots, voting systems, or both may be used in accordance with Chapter 163 of the General Statutes. The question to appear shall be
"[ ]FOR	[ ]AGAINST
Deannexation.
If at such election, a majority of the votes cast from the area proposed for removal from the corporate limits shall be 'For Deannexation,' and, in the event an election is held in the remainder of the municipality, the majority of the votes cast in the remainder of the municipality shall also be 'For Deannexation,' then from and after the 30th day of June next after certification of the results of the referendum, the territory and its citizens and property are removed from the corporate limits and shall no longer be subject to all the debts, laws, ordinances, and regulations in force in said city or town and shall no longer be entitled to the same privileges and benefits as other parts of said city or town. The newly deannexed territory shall no longer be subject to city taxes. The deannexation shall have no effect upon the validity of any liens of the municipality for unabated ad valorem taxes or special assessments outstanding before the effective date of the deannexation. Such liens may be collected or foreclosed upon after the effective date of the deannexation as though the property were still within the corporate limits.
"§ 160A‑49.1.  Contract with rural fire department.
(a)	If the area to be annexed described in a resolution of intent passed under G.S. 160A‑49(a) includes an area in an insurance district defined 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, and a rural fire department was on the date of adoption of the resolution of intent providing fire protection in the area to be annexed, then the city (if the rural fire department makes a written request for a good faith offer, and the request is signed by the chief officer of the fire department and delivered to the city clerk no later than 15 days before the public hearing) is required to make a good faith effort to negotiate a five‑year contract with the rural fire department to provide fire protection in the area to be annexed.
(b)	If the area is a rural fire protection district or a fire service district, then an offer to pay annually for the term of the contract the amount of money that the tax rate in the district in effect on the date of adoption of the resolution of intent would generate based on property values on January 1 of each year in the area to be annexed which is in such a district is deemed to be a good faith offer of consideration for the contract.
(c)	If the area is an insurance district but not a rural fire protection district or fire service district, then an offer to pay annually over the term of the contract the amount of money which is determined to be the equivalent of the amount which would be generated by multiplying the fraction of the city's general fund budget in that current fiscal year which is proposed to be expended for fire protection times the tax rate for the city in the current year, and multiplying that result by the property valuation in the area to be annexed which is served by the rural fire department is deemed to be a good faith offer of consideration for the contract; Provided that the payment shall not exceed the equivalent of fifteen cents (15¢) on one hundred dollars ($100.00) valuation of annexed property in the district according to county valuations for the current fiscal year.
(d)	Any offer by a city to a rural fire department which would compensate the rural fire department for revenue loss directly attributable to the annexation by paying such amount annually for five years, is deemed to be a good faith offer of consideration for the contract.
(e)	Under subsections (b), (c), or (d) of this section, if the good faith offer is for first responder service, an offer of one‑half the calculated amount under those subsections is deemed to be a good faith offer.
(f)	This section does not obligate the city or rural fire department to enter into any contract.
(g)	The rural fire department may, if it feels that no good faith offer has been made, appeal to the Local Government Commission within 30 days following the passage of an annexation ordinance. The rural fire department may apply to the Local Government Commission for an order staying the operation of the annexation ordinance pending the outcome of the review. The Commission 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, provided that no other appeal under G.S. 160A‑50 is pending.
(h)	The Local Government Commission may affirm the ordinance, or if the Local Government Commission finds that no good faith offer has been made, it shall remand the ordinance to the municipal governing board for further proceedings, and the ordinance shall then not become effective unless the Local Government Commission finds that a good faith offer has been made.
(i)	Any party to the review under subsection (h) may obtain judicial review in accordance with Chapter 150B of the General Statutes.
"§ 160A‑49.2.  Assumption of debt.
(a)	If the city has annexed any area which is served by a rural fire department and which is in an insurance district defined 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, then upon the effective date of annexation if the city has not contracted with the rural fire department for fire protection, or when the rural fire department ceases to provide fire protection under contract, then the city shall pay annually a proportionate share of any payments due on any debt (including principal and interest) relating to facilities or equipment of the rural fire department, if the debt was existing at the time of adoption of the resolution of intent, with the payments in the same proportion that the assessed valuation of the area of the district annexed bears to the assessed valuation of the entire district on the date the annexation ordinance becomes effective or another date for valuation mutually agreed upon by the city and the fire department.
(b)	The city and rural fire department shall jointly present a payment schedule to the Local Government Commission for approval and no payment may be made until such schedule is approved.
"§ 160A‑49.3.  Contract with private solid waste collection firms.
(a)	If the area to be annexed described in a resolution of intent passed under G.S. 160A‑49(a) includes an area where a firm (i) meets the requirements of subsection (a1) of this section, (ii) on the ninetieth day preceding the date of adoption of the resolution of intent or resolution of consideration was providing solid waste collection services in the area to be annexed, (iii) on the date of adoption of the resolution of intent is still providing such services, and (iv) by reason of the annexation the firm's franchise with a county or arrangements with third parties for solid waste collection will be terminated, the city shall do one of the following:
(1)	Contract with the firm for a period of two years after the effective date of the annexation ordinance to allow the firm to provide collection services to the city in the area to be annexed for sums determined under subsection (d) of this section.
(2)	Pay the firm for the firm's economic loss, with one‑third of the economic loss to be paid within 30 days of the termination and the balance paid in 12 equal monthly installments during the next succeeding 12 months. Any remaining economic loss payment is forfeited if the firm terminates service to customers in the annexation area prior to the effective date of the annexation.
(3)	Make other arrangements satisfactory to the parties.
(a1)	To qualify for the options set forth in subsection (a) of this section, a firm must have done one of the following:
(1)	Subsequent to receiving notice of the annexation in accordance with subsection (b) of this section, filed with the city clerk at least 10 days prior to the public hearing a written request to contract with the city to provide solid waste collection services containing a certification, signed by an officer or owner of the firm, that the firm serves at least 50 customers within the county at that time.
(2)	Contacted the city clerk pursuant to public notice published by the city, pursuant to G.S. 160A‑49(b), at least 10 days before the hearing and provided to the city clerk a written request to contract with the city to provide solid waste collection services. The request must contain a certification signed by an officer or owner of the firm that the firm serves at least 50 customers within the county at that time.
(a2)	Firms shall file notice of provision of solid waste collection service with the city clerk of all cities located in the firm's collection area or within five miles thereof.
(b)	At least four weeks prior to the date of the informational meeting, the city shall provide written notice of the resolution of intent to all firms serving the area to be annexed. The notice shall be sent to all firms that filed notice in accordance with subsection (a2) of this section by certified mail, return receipt requested, to the address provided by the firm under subsection (a2) of this section.
(c)	The city may require that the contract contain:
(1)	A requirement that the firm post a performance bond and maintain public liability insurance coverage;
(2)	A requirement that the firm agree to service customers in the annexed area that were not served by that firm on the effective date of annexation;
(3)	A provision that divides the annexed area into service areas if there were more than one firm being contracted within the area, such that the entire area is served by the firms, or by the city as to customers not served by the firms;
(4)	A provision that the city may serve customers not served by the firm on the effective date of annexation;
(5)	A provision that the contract can be cancelled in writing, delivered by certified mail to the firm in question with 30 days to cure substantial violations of the contract, but no contract may be cancelled on these grounds unless the Local Government Commission finds that substantial violations have occurred, except that the city may suspend the contract for up to 30 days if it finds substantial violation of health laws;
(6)	Performance standards, not exceeding city standards existing at the time of notice published pursuant to G.S. 160A‑49(b) with provision that the contract may be cancelled for substantial violations of those standards, but no contract may be cancelled on those grounds unless the Local Government Commission finds that substantial violations have occurred;
(7)	A provision for monetary damages if there are violations of the contract or of performance standards.
(d)	If the services to be provided to the city by reason of the annexation are substantially the same as rendered under the franchise with the county or arrangements with the parties, the amount paid by the city shall be at least ninety percent (90%) of the amount paid or required under the existing franchise or arrangements. If such services are required to be adjusted to conform to city standards or as a result of changes in the number of customers and as a result there are changes in disposal costs (including mileage and landfill charges), requirements for storage capacity (dumpsters and/or residential carts), and/or frequency of collection, the amount paid by the city for the service shall be increased or decreased to reflect the value of such adjusted services as if computed under the existing franchise or arrangements. In the event agreement cannot be reached between the city and the firm under this subsection, the matters shall be determined by the Local Government Commission.
(e),	(f) Repealed by Session Laws 2006‑193, s. 1, applicable to annexations for which a resolution of intent is adopted on or after January 1, 2007.
(g)	The firm may, if it contends that no contract has been offered, appeal to the Local Government Commission within 30 days following passage of an annexation ordinance. The firm may appeal to the Local Government Commission for an order staying the operation of the annexation ordinance pending the outcome of the review. The Commission may grant or deny the stay upon such terms as it deems proper. If the Local Government Commission finds that the city has not made an offer which complies with this section, it shall remand the ordinance to the municipal governing board for further proceedings, and the ordinance shall not become effective until the Local Government Commission finds that such an offer has been made. Either the firm or the city may obtain judicial review in accordance with Chapter 150B of the General Statutes.
(h)	A firm which has given notice under subsection (a) of this section that it desires to contract, and any firm that the city believes is eligible to give such notice, shall make available to the city not later than 30 days following a written request of the city, sent by certified mail return receipt requested, all information in its possession or control, including but not limited to operational, financial and budgetary information, necessary for the city to determine if the firm qualifies for the benefits of this section and to determine the nature and scope of the potential contract and/or economic loss. The firm forfeits its rights under this section if it fails to make a good faith response within 30 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.
(i)	As used in this section, the following terms mean:
(1)	Economic loss. – A sum equal to 15 times the average gross monthly revenue for the three months prior to the passage of the resolution of intent or resolution of consideration, as applicable under subsection (a) of this section, collected or due the firm for residential, commercial, and industrial collection service in the area annexed or to be annexed; provided that revenues shall be included in calculations under this subdivision only if policies of the city will provide solid waste collection to those customers such that arrangements between the firm and the customers will be terminated.
(2)	Firm. – A private solid waste collection firm.
"§ 160A‑50.  Appeal.
(a)	Within 90 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 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  county  governing board of the county where the territory is located 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 and county governing boards 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 and county governing  boards 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 and county 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 county and 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 county and 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 and county governing boards complete action to make the ordinance conform to the court's instructions in the event of remand. For the purposes of this subsection, a denial of a petition for rehearing or for discretionary review shall be treated as a final judgement.
(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.
"§ 160A‑51.  Annexation recorded.
Whenever the limits of a municipality are enlarged in accordance with the provisions of this Part, it shall be the duty of the mayor of the municipality to cause an accurate map of such annexed territory, together with a copy of the ordinance duly certified, to be recorded in the office of the register of deeds of the county or counties in which such territory is situated and in the office of the Secretary of State. The documents required to be filed with the Secretary of State under this section shall be filed not later than 30 days following the effective date of the annexation ordinance. All documents shall have an identifying number affixed thereto and shall conform in size in accordance with rules prescribed by the Secretary. Failure to file within 30 days shall not affect the validity of the annexation. Any annexation shall be reported as part of the Boundary and Annexation Survey of the United States Bureau of the Census.
"§ 160A‑52.  Authorized expenditures.
Municipalities initiating annexations under the provisions of this Part are authorized to make expenditures for surveys required to describe the property under consideration or for any other purpose necessary to plan for the study and/or annexation of unincorporated territory adjacent to the municipality. In addition, following final passage of the annexation ordinance, the annexing municipality shall have authority to proceed with expenditures for construction of water and sewer lines and other capital facilities and for any other purpose calculated to bring services into the annexed area in a more effective and expeditious manner prior to the effective date of annexation.
"§ 160A‑53.  Definitions.
The following terms where used in this Part shall have the following meanings, except where the context clearly indicates a different meaning:
(1)	"Contiguous area" shall mean any area which, at the time annexation procedures are initiated, either abuts directly on the municipal boundary or is separated from the municipal boundary by a street or street right‑of‑way, a creek or river, the right‑of‑way of a railroad or other public service corporation, lands owned by the city or some other political subdivision, or lands owned by the State of North Carolina.
(2)	"Used for residential purposes" shall mean any lot or tract five acres or less in size on which is constructed a habitable dwelling unit.
(3)	"Meaningful services" shall mean central water and sewer service, police protection, or fire protection.
(4)	"Area in need of meaningful services" shall mean an area in which: (i) a majority of property owners have existing water service, sewer or septic service, police protection, or fire protection that is inadequate and clearly poses a threat to the health and safety of the area, and (ii) the property owners could not reasonably address the threat themselves through private or public means.
"§ 160A‑54.  Population and land estimates.
In determining population and degree of land subdivision for purposes of meeting the requirements of G.S. 160A‑48, the municipality shall use methods calculated to provide reasonably accurate results. In determining whether the standards set forth in G.S. 160A‑48 have been met on appeal to the superior court under G.S. 160A‑50, the reviewing court shall accept the estimates of the municipality unless the actual population, total area, or degree of land subdivision falls below the standards in G.S. 160A‑48:
(1)	As to population, if the estimate is based on the number of dwelling units in the area multiplied by the average family size in such area, or in the township or townships of which such area is a part, as determined by the last preceding federal decennial census; or if it is based on a new enumeration carried out under reasonable rules and regulations by the annexing municipality; provided, that the court shall not accept such estimates if the petitioners demonstrate that such estimates are in error in the amount of ten percent (10%) or more.
(2)	As to total area if the estimate is based on an actual survey, or on county tax maps or records, or on aerial photographs, or on some other reasonably reliable map used for official purposes by a governmental agency, unless the petitioners on appeal demonstrate that such estimates are in error in the amount of five percent (5%) or more.
(3)	As to degree of land subdivision, if the estimates are based on an actual survey, or on county tax maps or records, or on aerial photographs, or on some other reasonably reliable source, unless the petitioners on appeal show that such estimates are in error in the amount of five percent (5%) or more."
SECTION 3.(a)  G.S. 160A‑58.27(f)(1) reads as rewritten:
"(f)	Upon a finding that the respondent city has not violated this Part or the agreement, the court may affirm the action of the respondent city without change. Upon a finding that the respondent city has violated this Part or the agreement, the court may:
(1)	Remand to the respondent city's governing board any ordinance adopted pursuant to  Part 3 of this Article, as the same exists now or is hereafter amended, for amendment of the boundaries, or for such other action as is necessary, to conform to the provisions of this Part and the agreement.
…."
SECTION 3.(b)  G.S. 160A‑294(a) reads as rewritten:
"(a)	Whenever a city annexes any territory under  Part 3 of Article 4A of this Chapter, and because of the annexation the rural fire department must terminate the employment of any full‑time employee, then the annexing city must take one of the three actions listed below with respect to any person who has been in such full‑time employment for two years or more at the time of adoption of the resolution of intent:
(1)	The annexing city may offer employment without loss of salary or seniority and place the person in a position as near as possible in type to the position that was held in the rural fire department; or
(2)	The annexing city may offer employment in some other department of the city at a comparable salary and seniority; or
(3)	The city may choose to pay to the person a sum equal to the person's salary for one year as the equivalent of severance pay. For the purpose of this subsection, the person's salary was his total salary with the rural fire department for the 12‑month period ending on the last pay period before the resolution of consideration was adopted, plus any increased salary due to reasonable cost‑of‑living increases and bona fide promotions; provided that if no resolution of consideration was required to be adopted because of G.S. 160A‑49(j), or because the resolution of intent was adopted prior to July 1, 1984, the person's salary was his total salary with the rural fire department for the 12‑month period ending on the last pay period before the resolution of intent was adopted, plus any increased salary due to reasonable cost‑of‑living increases and bona fide promotions."
SECTION 3.(c)  G.S. 162A‑93(b) reads as rewritten:
"(c)	Provision of public water and sewer services by a district under this Article to an area annexed by a city shall not satisfy the city's obligation to provide for water and sewer services under G.S. 160A‑47. The city may negotiate for purchase of the lines or systems owned and operated by the district."
SECTION 3.(d)  G.S. 105‑277.4(b) reads as rewritten:
"(b)	Appraisal at Present‑use Value. – Upon receipt of a properly executed application, the assessor must appraise the property at its present‑use value as established in the schedule prepared pursuant to G.S. 105‑317. In appraising the property at its present‑use value, the assessor must appraise the improvements located on qualifying land according to the schedules and standards used in appraising other similar improvements in the county. If all or any part of a qualifying tract of land is located within the limits of an incorporated city or town, or is property annexed subject to G.S. 160A‑49(f1), the assessor must furnish a copy of the property record showing both the present‑use appraisal and the valuation upon which the property would have been taxed in the absence of this classification to the collector of the city or town. The assessor must also notify the tax collector of any changes in the appraisals or in the eligibility of the property for the benefit of this classification. Upon a request for a certification pursuant to G.S.160A‑49(f1), or any change in the certification, the assessor for the county where the land subject to the annexation is located must, within 30 days, determine if the land meets the requirements of G.S. 160A‑49(f1)(2) and report the results of its findings to the city."
SECTION 3.(e)  G.S. 153A‑304.1(d) reads as rewritten:
"(d)	Whenever a city is required to make fire protection district tax payments by subsection (c) of this section, and the city has paid or has contracted to pay to a rural fire department funds under G.S. 160A‑49.1, the county shall pay to the city from funds of the county service district an amount equal to the amount paid by the city (or to be paid by the city) to a rural fire department under G.S. 160A‑49.1 on account of annexation of territory in the county service district for the number of months in that fiscal year used in calculating the numerator under subsection (c) of this section; provided that the required payments by the county to the city shall not exceed the total of fire protection district payments made to taxpayers in the district on account of that annexation."
SECTION 3.(f)  G.S. 69‑25.15(d) reads as rewritten:
"(d)	Whenever a city is required to make fire protection district tax payments by subsection (c) of this section, and the city has paid or has contracted to pay to a rural fire department funds under G.S. 160A‑49.1, the county shall pay to the city from funds of the rural fire protection district an amount equal to the amount paid by the city (or to be paid by the city) to a rural fire department under G.S. 160A‑49.1 on account of annexation of territory in the rural fire protection district for the number of months in that fiscal year used in calculating the numerator under subsection (c) of this section; provided that the required payments by the county to the city shall not exceed the total of fire protection district payments made to taxpayers in the district on account of that annexation."
SECTION 3.(g)  G.S. 160A‑327(g) reads as rewritten:
"(g)	This section shall not apply when a private company is displaced as the result of an annexation under Article 4A of Chapter 160A of the General Statutes or an annexation by an act of the General Assembly. The provisions of G.S. 160A‑49.3 or G.S. 160A‑324 shall apply."
SECTION 3.(h)  Any  reference in any local act listed below to Part 2 of Article 4A of Chapter 160A of the General Statutes is deemed to be a reference to Part 3 of Article 4A of Chapter 160A of the General Statutes:
(1)	Section 3 of S.L. 2007‑334.
(2)	Chapter 426 of the 1995 Session Laws.
(3)	Chapter 348 of the 1995 Session Laws.
SECTION 3.(i)  Chapter 92 of the 1985 Session Laws is repealed.
SECTION 4.  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.