GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 1084*

Short Title:  Annexation Changes/Smaller Cities.	(Public)

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Sponsors: Representatives Ellis; Allred, Brawley, Cansler, Justus, Preston, Pulley, J. Robinson, Sexton, and Sherrill.

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Referred to:  Finance.

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May 14, 1996

A BILL TO BE ENTITLED
AN ACT TO CHANGE THE LAWS GOVERNING ANNEXATION BY CITIES WITH A POPULATION OF LESS THAN FIVE THOUSAND.
The General Assembly of North Carolina enacts:
Section 1.  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. If water, sewer, or paving services specified in the report for the area to be annexed are not provided within two years of the effective date of the annexation, the owner of the property that has not received the water, sewer, or paving service shall be reimbursed for all ad valorem taxes paid to the municipality, and shall not be liable for future ad valorem taxes until the services are provided.
c.	Set forth the method under which the municipality plans to finance extension of services into the area to be annexed.
d.	Provide for paving all public roads within the area to be annexed, which are both under the control of the city and which meet the city standards for paving, within two years of the effective date of the annexation.
e.	Provide a specific statement as to how the city plans to provide the required services.
(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 detailed statement as to how the city classified each lot or tract in the area to be annexed as to use and size.
(6)	A statement notifying persons affected by the annexation of their right to appeal under G.S. 160A-38.
(7)	A statement showing how the proposed annexation will affect the county's financing and services.  This statement shall include changes in county revenues:  local sales taxes, shares of beverage taxes, inspection fees, real estate transfer taxes, hotel occupancy taxes, water and sewer revenues, solid waste revenues, and any district property tax revenues where the county board of commissioners levies the tax.  The statement shall also include changes in county services:  water, sewer, law enforcement, fire, parks and recreation, inspections, land-use regulation, animal control, solid waste collection and disposal, solid waste franchises, rescue services, and emergency medical services.  This statement shall be delivered to the clerk of the board of county commissioners at least 60 days before the date of any public hearing on any annexation under this Part."
Sec. 2.  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).
(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.
(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. An area developed for urban purposes is defined as 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 seventy percent (70%) 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. An area developed for urban purposes is also the entire area of any county water and sewer district created under G.S. 162A-86(b1), but this sentence only applies to annexation by a municipality if that:
(1)	Municipality has provided in a contract with that district that the area is developed for urban purposes; and
(2)	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 sentence 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.  Any contiguous land in common ownership and common use shall be deemed to be one 'lot or tract' as the term is used in this subsection.  An easement for public utility or railroad purposes may be classified as an industrial, commercial, or governmental use, as appropriate, buy only as to the extent of the easement, and such classification does not extend to the remainder of the tract solely because of the easement.
(d)	In fixing new municipal boundaries, a municipal governing board shall, wherever practical, use natural topographic features such as ridge lines and streams and creeks as boundaries, and may use streets and municipal or county limits 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)."
Sec. 3.  G.S. 160A-37(j) is repealed.
Sec. 4.  G.S. 160A-38 is amended by adding a new subsection to read:
"( k)	Prior to filing an appeal under this section, a person eligible to appeal must first present a request to the Local Government Commission for an analysis of the municipal governing board's actions under this Part and have received the analysis. Filing of such request tolls any applicable deadlines under this Part until the analysis is delivered.  The Local Government Commission shall deliver to the municipal governing board and the requester within 90 days of the request its analysis, and if it finds any defect in the procedure, it may remand the ordinance to the municipal governing board which may correct any defect."
Sec. 5.  G.S. 160A-38 is amended by adding a new subsection to read:
"( 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."
Sec. 6.  G.S. 160A-41(2) reads as rewritten:
"(2)	'Used for residential purposes' shall mean any lot or tract three acres or less in size on which is constructed a habitable dwelling unit."
Sec. 7.  G.S. 160A-42 is repealed.
Sec. 8.  This act becomes effective October 1, 1996.  Section 5 of this act is effective on and after January 1, 1996.