A BILL TO BE ENTITLED
AN ACT to clarify signatories on voluntary annexation requests; to require voluntary annexation on request of seventy‑five percent of property owners in distressed areas; to permit voluntary annexation on request of seventy‑five percent of resident householdS in distressed areas; to prohibit the use of streets or street right‑of‑ways to establish contiguity for purposes of voluntary and involuntary annexation; to increase from five thousand to ten thousand the municipal population threshold for determining the procedure for involuntary annexation; to require the provision of at least two meaningful services within existing corporate boundaries prior to initiating an involuntary annexation; to require the extension of water and sewer lines within three years of the annexation to all properties within the annexed area; to require financial impact statements submitted with a proposed annexation to be based upon a five‑year period; to allow involuntary annexation of areas completely surrounded by the municipal corporate limits; to prohibit involuntary annexation of areas being served by a water and sewer system operated by a municipality other than the annexing municipality; to increase the urban density standards for involuntary annexation by municipalities by requiring at least sixty‑five percent of the lots to be in use and the residential lots to be at least two and one‑half acres in size; by adding an urban density test of residential population equal to at least two and three‑tenths persons per acre for involuntary annexation by small municipalities; to require all of a subdivision to be annexed if the annexation is involuntary; to amend the procedure for annexation to clarify the time line and provide additional information to the property owners at the public hearing and public informational meeting; to require the notice of public hearing to be sent to property owners by certified mail; To require the effective date of voluntary contiguous and involuntary annexation to be the June 30 next following the adoption of the annexation; to require municipalities to report to the local government commission on the provision of meaningful services following the adoption of an annexation ordinance; to extend the time period a property owner may appeal to the courts following an involuntary annexation ordinance from sixty days to ninety days; TO ALLOW THE COURT TO ACCEPT ARGUMENT REGARDING THE PROVISION OF MEANINGFUL SERVICE TO THE NEWLY ANNEXED AREA; TO PROVIDE OVERSIGHT OF INVOLUNTARY ANNEXATION THROUGH A REFERENDUM, that must coincide with a general municipal election, OF REGISTERED VOTERS OF THE MUNICIPALITY AND THE PROPOSED ANNEXATION AREA UPON A VERIFIED PETITION signed by at least fifteen percent of the total of the registered voters of the municipality and the proposed annexation area as shown by the registration; to require oversight of involuntary annexations by the local government commission by requiring a fiscal feasibility assessment; to require the local government commission to prohibit further annexation if the annexing municipality does not provide services in accordance with an involuntary annexation within three years; to require the local government commission to abate property taxes for property owners without the required services within three years of an involuntary annexation; to require the local government commission to report annually to the general assembly on involuntary annexations; to authorize municipalities to contract with property owners for the extension of water service and sewer service and nonappeal of an involuntary annexation, which may run with the land; TO AUTHORIZE CITIES AND COUNTIES TO DEVELOP BINDING UTILITY SERVICE PLANS; to permit the payment of assessments for the installation of water or sewer service following an involuntary annexation over a twenty‑year period; to allow the payment of tap fees over a five‑year period; to give priority to a municipality annexing a distressed area when that municipality applies for community development block grants and loans or grants from the wastewater reserve or drinking water reserve.
The General Assembly of North Carolina enacts:
SECTION 1.  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. The petition need not be signed by the owners of real property that is wholly exempt from property taxation under the Constitution and laws of North Carolina.
(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:
(b1)	Notwithstanding the provisions of subsections (a) and (b) of this section, if fifty‑one percent (51%) of the households in an area petitioning for annexation pursuant to this section have incomes that are two hundred percent (200%) or less than the most recently published United States Census Bureau poverty thresholds, the governing board of any municipality shall annex by ordinance any area one‑eighth of the aggregate external boundaries of which are contiguous to its boundaries upon presentation to the governing board of a petition signed by the owners of at least seventy‑five percent (75%) of the parcels of real property in that area.
(b2)	The petition under subsection (b1) of this section 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 believe that the area described in paragraph 2 below meets the requirements of G.S. 160A‑31(b1) and 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 the investigation. For petitions received under subsection (b1) or (i) of this section, the clerk shall receive the report from the Department of Revenue as provided in subsection (k) of this section before certifying the sufficiency of the petition. 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 persons resident or owning property in the area described in the petition and persons resident or owning property in the municipality 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 the June 30 next following  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 at least one adult resident of at least 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 at least fifty‑one percent (51%) of the households in the area petitioning to be annexed have incomes that are two hundred percent (200%) or less than the most recently published United States Census Bureau poverty thresholds. The municipality may require reasonable proof that the petitioner in fact resides at the address indicated.
(j)	The petition under subsection (i) of this section 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 residents of real property believe that the area described in paragraph 2 below meets the requirements of G.S. 160A‑31(i) and 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:
(k)	For purposes of determining whether the percentage of households in the area petitioning for annexation meets the poverty thresholds under subsections (b1) and (i) of this section, the petitioners shall submit to the municipal governing board any reasonable evidence that demonstrates the area in fact meets the income requirements of that subsection. The evidence presented may include data from the most recent federal decennial census, other official census documents, signed affidavits by at least one adult resident of the household attesting to the household size and income level, or any other documentation verifying the incomes for a majority of the households within the petitioning area. Petitioners may select to submit name, address, and social security number to the clerk, who shall in turn submit the information to the Department of Revenue. Such information shall be kept confidential and is not a public record. The Department shall provide the municipality with a summary report of income for households in the petitioning area. Information for the report shall be gleaned from income tax returns, but the report submitted to the municipality shall not identify individuals or households."
SECTION 2.(a)  Part 2 of Article 4A of Chapter 160A of the General Statutes reads as rewritten:
"Part 2. Annexation by Cities of Less than10,000."
SECTION 2.(b)  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 meaningful services within its existing corporate boundaries. To qualify under this section, the meaningful 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 3.  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 meaningful 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 meaningful 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, sewer outfall lines, sewer lines, and waterlines 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 meaningful 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, sewer outfall lines, sewer lines, and waterlines 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 prior to annexation. 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 fiscally feasible or would be environmentally damaging due to the unique topography or environmental qualities 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. In any event, the plans shall call for construction to be completed within three years of the effective date of annexation.
c.	Set forth the method under which the municipality plans to finance extension of each meaningful service  into the area to be annexed. In calculating the cost of extending water or sewer services to the area to be annexed, the municipality shall include the cost of extending water and sewer lines to individual lots of property owners and may estimate the number of eligible property owners that will request to tap into the extended water and sewer lines.
(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 4.  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) of this section and 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‑fifth 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 may 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.
(4)	No part of the area may be served by a water and sewer system operated by a municipality other than the annexing municipality, unless in accordance with an annexation agreement in effect under Part 6 of this Article, or the system is operated pursuant to an interlocal agreement under Article 20 of this Chapter to which the annexing municipality is a party, or the system is operated by an authority or joint agency of which the annexing municipality is a full participating member.
(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 any of the following:
(1)	Any area which is so developed that at least sixty‑five percent (65%) 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 two and one‑half 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).
(f)	If the area includes any residential lot that is shown on a subdivision plat approved and recorded as a final plat pursuant to an ordinance adopted under Article 18 of Chapter 153A of the General Statutes or under Article 19 of this Chapter, the area must include all other residential lots shown on the same recorded final subdivision plat, except for lots already included in the corporate limits of the annexing municipality or another municipality. If the subdivision is in more than one county, the annexation area need not include lots across the county line. For purposes of this section, if the subdivision was approved as a phased development, each phase may be considered a separate subdivision."
SECTION 5.  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 Information Meeting and Public Hearing. – The notice of public information meeting and public hearing shall be a combined notice that includes at least all of the following:
(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 with time lines and a summary of available statutory remedies for contesting the annexation and the failure to provide services.
(6)	Include information on how to request to become a customer of the water service or sewer service, the cost of requesting that service along with the option of paying that cost in accordance with G.S. 160A‑232(c), and any forms to request that service.
(7)	Describe clearly the distinction between the public informational meeting and the public hearing.
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 certified mail 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.
(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 with 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, and information regarding including any forms for requesting water service or sewer service to individual lots shall be distributed at the public informational meeting.
(e)	Passage of the Annexation Ordinance. – Subject to the provisions of G.S. 160A‑58.11, 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 stated 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 meaningful 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 meaningful 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 meaningful 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.
		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.
(l)	The city shall report to the Local Government Commission as to whether the extension of water and sewer lines was completed within the three‑year time period specified in G.S. 160A‑35(3). If the extension is 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 120 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)."
SECTION 6.  G.S. 160A‑38 reads as rewritten:
"§ 160A‑38.  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 the person 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 that person's 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  any of the following:
(1)	That the statutory procedure was not followed.(2)	That the provisions of G.S. 160A‑35 were not met.
(3)	That the provisions of G.S. 160A‑36 have not been met.
(4)	That the municipality has proven that the municipality is providing meaningful service to the property owners.
(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 7.(a)  Part 3 of Article 4A of Chapter 160A of the General Statutes reads as rewritten:
"Part 3. Annexation by Cities of 10,000 or More."
SECTION 7.(b)  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 meaningful services within its existing corporate boundaries. To qualify under this section, the meaningful 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 8.  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 meaningful 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 and water and sewer lines 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 meaningful 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, sewer outfall lines, waterlines, and sewer lines into the area to be annexed. In areas where the municipality is required to extend sewer service according to its policies, but the installation of sewer is not fiscally 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.	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.
d.	Set forth the method under which the municipality plans to finance extension of each meaningful service into the area to be annexed. In calculating the cost of extending water or sewer services to the area to be annexed, the municipality shall include the cost of extending water and sewer lines to individual lots of property owners and may estimate the number of eligible property owners that will request to tap into the extended water and sewer lines.
(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 9.  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 that complies with the following:
(1)	Which meets the general standards of subsection (b) of this section.
(2)	Every part of which meets the requirements of any of the following:
a.	Subsection (c) of this section.
b.	Subsection (d) of this section.
c.	Is completely surrounded by the municipality's primary corporate limits.
(b)	The total area to be annexed must meet all of 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‑fifth 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 may 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.
(4)	No part of the area may be served by a water and sewer system operated by a municipality other than the annexing municipality, unless in accordance with an annexation agreement in effect under Part 6 of this Article, or the system is operated pursuant to an interlocal agreement under Article 20 of this Chapter to which the annexing municipality is a party, or the system is operated by an authority or joint agency of which the annexing municipality is a full participating member.
(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.
(2)	Has a total resident population equal to at least two and one‑half 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 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.
(3)	Is so developed that at least sixty‑five percent (65%) 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 two and one‑half 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.
(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).
(g)	If the area includes any residential lot that is shown on a subdivision plat approved and recorded as a final plat pursuant to an ordinance adopted under Article 18 of Chapter 153A of the General Statutes or under Article 19 of this Chapter, the area must include all other residential lots shown on the same recorded final subdivision plat, except for lots already included in the corporate limits of the annexing municipality or another municipality. If the subdivision is in more than one county, the annexation area need not include lots across the county line. For purposes of this section, if the subdivision was approved as a phased development, each phase may be considered a separate subdivision."
SECTION 10.  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 Information Meeting and Public Hearing. – The notice of public information meeting and public hearing shall be a combined notice that includes at least all of the following information:
(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 to become a customer of the water and sewer service in accordance with the policies in effect in the municipality for such services, the cost of requesting that service along with the option of paying that cost in accordance with G.S. 160A‑232(c), and any forms to request that service.
(5)	Include an explanation of a property owner's rights pursuant to subsections (f1) and (f2) of this section.
(6)	Include information on how to request to become a customer of the water service or sewer service, the cost of requesting that service along with the option of paying that cost in accordance with G.S. 160A‑232(c), and any forms to request that service.
(7)	Describe clearly the distinction between the public informational meeting and the public hearing.
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 certified mail 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.
(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. – Subject to the provisions of G.S. 160A‑58.11, 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, sewer outfalls and water and sewer lines as stated 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 meaningful 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 meaningful 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. 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 the extension of water and sewer lines was completed within the three‑year time period specified in G.S. 160A‑47(3)c. If the extension is 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 120 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)	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 11.  G.S. 160A‑50 reads as rewritten:
"§ 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 the person 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 that person's 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 any of the following:
(1)	That the statutory procedure was not followed.
(2)	That the provisions of G.S. 160A‑47 were not met.
(3)	That the provisions of G.S. 160A‑48 have not been met.
(4)	That the municipality has proven that the municipality is providing meaningful service to property owners.
(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 thirtieth 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 12.(a)  G.S. 160A‑41 is amended by adding a new subdivision to read:
"(3)	"Meaningful service" shall mean any one of the following:
a.	Police protection.
b.	Fire protection.
c.	Solid waste collection services.
d.	Street maintenance.
e.	Water service.
f.	Sewer service."
SECTION 12.(b)  G.S. 160A‑53 is amended by adding a new subdivision to read:
"(3)	"Meaningful service" shall mean any one of the following:
a.	Police protection.
b.	Fire protection.
c.	Solid waste collection services.
d.	Street maintenance.
e.	Water service.
f.	Sewer service."
SECTION 12.(c)  G.S. 160A‑33(5) reads as rewritten:
"(5)	That areas annexed to municipalities in accordance with such  uniform legislative standards should receive the meaningful services provided by the annexing municipality in accordance with G.S. 160A‑35(3)."
SECTION 12.(d)  G.S. 160A‑45(5) reads as rewritten:
"(5)	That areas annexed to municipalities in accordance with such  uniform legislative standards should receive the meaningful services provided by the annexing municipality in accordance with G.S. 160A‑47(3)."
SECTION 13.(a)  Part 5 of Article 4A of Chapter 160A of the General Statutes reads as rewritten:
"Part 5. Property Tax Liability of Newly Annexed Territory; Oversight of Involuntary Annexation."
SECTION 13.(b)  Part 5 of Article 4A of Chapter 160A of the General Statutes is amended by adding a new section to read:
"§ 160A‑58.11.  Referendum upon petition of registered voters before involuntary annexation ordinance.
(a)	After the adoption of the resolution of consideration under Part 2 or Part 3 of this Article, any registered voter of the annexing municipality or the proposed annexation area of an involuntary annexation may request a referendum petition from the municipal governing board containing the description and a legible map of the area to be annexed. The municipal governing board shall provide the registered voter requesting the referendum petition forms with referendum petition forms that meet all of the following criteria:
(1)	Be dated on the date of issuance. 
(2)	Be addressed to the annexing municipal governing board.
(3)	Contain a clear description of the boundaries of the proposed annexation area.
(4)	Have attached a legible map of the proposed annexation area, with a clear showing of the boundary with the existing corporate limits.
(5)	Contain the place and time that the report in G.S. 160A‑35 or G.S. 160A‑47, as applicable, can be reviewed and copied.
(6)	Contain a general statement of the request for a referendum on the proposed involuntary annexation.
(7)	Provide a place for signatures, which includes the printed name and address of the registered voter.
(b)	Upon receiving a request for a referendum petition, the municipal governing board shall notify the board of elections of the request and provide the board of elections with a legible map and clear written description of the proposed annexation area.
(c)	To be effective, the referendum petition in subsection (a) of this section must be returned to the municipal governing board before the tenth day following the public hearing required by G.S. 160A‑35 or G.S. 160A‑47, as applicable. To be sufficient, a referendum petition must bear the signatures of at least fifteen percent (15%) of the total of the registered voters of the municipality and the proposed annexation area as shown by the registration. The municipal governing board shall forward the referendum petition to the board of elections for verification as provided in this section. Upon receipt by the municipal governing board, the time frames in G.S. 160A‑35(e) or G.S. 160A‑47(e), as applicable, shall be tolled until the referendum is verified and any election, if needed, is conducted.
(d)	The signatures to the referendum petition need not all be appended to one paper. Each signer shall add his or her signature and the signer's place of residence, giving the residence address. One of the signers of each paper shall take an oath before an officer competent to administer oaths that each signature to the paper appended is the genuine signature of the person whose name it purports to be.
(e)	The board of elections shall investigate the sufficiency of any petition and certify the results of the investigation to the municipal governing board. The board of elections may employ persons as it deems necessary to undertake such investigation. The municipal governing board shall reimburse the board of elections for the reasonable cost of the investigation. The board of elections may adopt rules concerning the validation of signatures appearing on the referendum petition.
(f)	The board of elections shall complete its investigation and issue its certification of the results of the investigation within 15 days after the filing of any referendum petition.
(g)	Upon a determination that a sufficient referendum petition has been submitted, the municipal governing body may either abandon the proposed involuntary annexation by resolution or adopt a resolution setting the date for the referendum to coincide with the next general municipal election and so notify the board of elections. If the municipality's next general election is to be held more than two years from the determination and the municipality does not abandon the proposed involuntary annexation, the resolution setting the date for the referendum shall make that date coincide with the next countywide general election.
(h)	The board of elections shall cause legal notice of the election to be published. That notice shall include the general statement of the referendum. The referendum shall be conducted, returned, and the results declared as in other municipal elections in the municipality. Registered voters of the municipality and the proposed annexation area shall be allowed to vote on the referendum. The reasonable costs of the referendum shall be reimbursed to the board of elections by the municipal governing board.
(i)	The referendum of any number of proposed involuntary annexations may be submitted at the same election. But as to each proposed involuntary annexation, a separate petition shall be filed and there shall be an entirely separate ballot.
(j)	The ballots used in a referendum shall submit the following proposition:
"[ ] FOR	[ ] AGAINST
The annexation of (clear description of the proposed annexation area)."
(k)	If a majority of such votes cast on the referendum are for annexation, the annexing municipality shall proceed with the adoption of the annexation ordinance as provided in G.S. 160A‑35 or G.S. 160A‑47, as applicable. If less than a majority of the votes cast on the referendum are for annexation, the municipal governing body may not proceed with the adoption of the annexation ordinance or begin a separate involuntary annexation process with respect to that proposed annexation area for at least 60 months from the date of the referendum. If the results are a tie, the municipal governing body may not proceed with the adoption of the annexation ordinance or begin a separate involuntary annexation process with respect to that proposed annexation area for at least 60 months from the date of the referendum."
SECTION 13.(c)  Part 5 of Article 4A of Chapter 160A of the General Statutes is amended by adding a new section to read:
"§ 160A‑58.12.  Local Government Commission oversight of annexation.
(a)	The Local Government Commission shall provide oversight of annexation under Part 2 and Part 3 of this Article. In carrying out that responsibility, the Local Government Commission shall do all of the following:
(1)	Assess the fiscal feasibility of all proposed annexations, by determining whether the projected expenses to be incurred as a result of the annexation, including the amount of proposed debt, are reasonable for the purposes for which the expenses are to be incurred and by determining the extent to which the probable net revenues resulting from the annexation and other revenue sources proposed by the municipality will be sufficient to meet these expenses and service any proposed debt.
(2)	Prohibit further annexation by any municipality that has not provided services in accordance with statutory requirements to any other area annexed by that municipality with an effective date more than 12 months prior to the proposed annexation until such time as the municipality demonstrates to the Commission that such requirements have been met.
(3)	Prohibit further annexation by the municipality and abate all ad valorem property taxes levied on the newly annexed territory if the municipality has not provided the meaningful services as stated in the annexation ordinance within three years of the effective date of the annexation ordinance, until such time as the municipality demonstrates to the Commission that such requirements have been met.
(b)	Following approval of the report required under G.S. 160A‑35 or G.S. 160A‑47, the municipality shall submit it to the Commission for review. The Commission shall make an administrative determination regarding the fiscal feasibility of the proposed annexation. The Commission shall report findings regarding the fiscal feasibility of the proposed annexation within 60 days of receipt of the report.
(c)	In order to effectuate the purposes of this section, the Commission may delegate its authority and responsibilities under this section to the staff of the State and Local Government Finance Division of the Department of State Treasurer.
(d)	The Commission may charge a reasonable fee to recover the cost for services rendered in connection with the fiscal feasibility review required by subdivision (1) of subsection (a) of this section.
(e)	The Local Government Commission shall report to the regular session of the General Assembly every two years, on or before the date of convening set in G.S. 120‑11.1, the following information:
(1)	The number of involuntary annexations proposed each year.
(2)	The number of involuntary annexations for which the assessment of the fiscal feasibility showed that the involuntary annexation was not fiscally feasible.
(3)	The number and character of reports made to the Local Government Commission under G.S. 160A‑37(k).
(4)	The number and character of reports made to the Local Government Commission under G.S. 160A‑49(k), and the number of abatements granted under that statute.
(5)	The number of reports made to the Local Government Commission under G.S. 160A‑49(l).
(6)	The number of prohibitions on further annexation issued by the Local Government Commission.
(7)	The number of abatement of taxes under subdivision (3) of subsection (a) of this section."
SECTION 14.(a)  Part 6 of Article 4A of Chapter 160A of the General Statutes reads as rewritten:
"Part 6. Annexation Agreements Between Municipalities."
SECTION 14.(b)  Article 4A of Chapter 160A of the General Statutes 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.
(c)	A contract under this section may be part of a development agreement under Part 3D of Article 19 of this Chapter or Part 3A of Article 18 of Chapter 153A of the General Statutes."
SECTION 14.5.  Article 4A of Chapter 160A of the General Statutes is amended by adding a new Part to read:
"Part 8. City‑County Utility Service Plans.
"§ 160A‑58.31.  Purpose.
It is the purpose of this Part to authorize municipalities and counties to develop binding plans concerning the provision of water and sewer services to enhance land-use planning and growth.
"§ 160A‑58.32.  Definitions.
The following terms where used in this Part shall have the following meanings, except where the context clearly indicates a different meaning:
(a)	"Utility services" shall mean water and sewer services.
(b)	"Future utility service area" shall mean an area subject to joint city and county utility services plan authority. Future utility service area is as follows:
(1)	Under 10,000 municipal population, according to the last federal decennial census, within one mile of the primary corporate limits.
(2)	10,000‑25,000 municipal population, according to the last federal decennial census, within two miles of the primary corporate limits.
(3)	Greater than 25,000 municipal population, according to the last federal decennial census, within three miles of the primary corporate limits.
"§ 160A‑58.33.  Utility service plans authorized.
A city may enter into a utility services plan with a county for a period not to exceed 20 years which shall be approved by ordinance of each governing board.
"§ 160A‑58.34.  Procedure.
(a)	A county must adopt a resolution declaring its intent to develop a utility services plan with one or more municipalities and provide written notice return receipt requested to those municipalities no later than January 1, 2010.
(b)	In the event that an agreement concerning the utility services plan is not reached within 90 days following receipt of notification, the authority to enter into an agreement under this Part is terminated, unless the time period is extended by mutual agreement.
(c)	During the initial 90-day period following receipt of notification, a municipality may not adopt an annexation ordinance under Part 1 or Part 4 of this Article, or a resolution of intent under Part 2 or Part 3 of this Article.
(d)	Nothing in this section shall limit the authority of cities and counties to form interlocal agreements subject to Article 20 of this Chapter.
"§ 160A‑58.35.  Contents of utility services plan.
(a)	The utility services plan shall contain at least all of the following:
(1)	State the duration of the utility services plan.
(2)	Describe the area subject to the utility services plan.
(3)	Describe the territory within which each jurisdiction may provide utility services.
(4)	State the effective date of the utility services plan.
(5)	Require each participating city which proposes any annexation within the territory covered by the utility services plan to give written notice to all other parties to the utility services plan at least 60 days before the adoption of any annexation ordinance. Provided, however, that the utility services plan may provide for a waiver of this time period by the notified party. The written notice shall describe the area to be annexed by a legible map that clearly and accurately shows the boundaries of the area to be annexed in relation to the area covered by the utility services plan. 
(6)	Include any other necessary or proper matter.
(b)	No utility services plan may be entered into under this Part unless each participant has held a public hearing prior to adopting the ordinance approving the utility services plan. The governing boards of the participants may hold a joint public hearing if desired. Notice of the public hearing shall be published once in a newspaper having general circulation in the county at least 10 days prior to the date of the public hearing.
(c)	Any utility services plan entered into under this Part may be modified or terminated by a subsequent agreement entered into by all participating parties to the utility services plan. The subsequent agreement shall be approved by ordinance after a public hearing or hearings pursuant to subsection (b) of this section.
(d)	A participating party may terminate a utility services plan unilaterally or withdraw itself from the utility services plan by repealing the ordinance by which it approved the plan and providing five years' written notice to the other participants.
"§ 160A‑58.36.  Limitation on annexation.
(a)	No municipality may annex in its future utility service area unless one of the following applies:
(1)	The county waives its authority to initiate a negotiation over the formation of a utility services plan with one or more cities.
(2)	The parties, having made a good-faith effort to negotiate a utility services plan, fail to agree to a services plan in accordance with G.S. 160A‑58.34.
(3)	The utility services plan has been adopted by the parties and has not been repealed by the annexing municipality or the county.
(b)	If in the event the future utility service areas of multiple municipalities overlap, the utility services plan must be agreed to by the affected county or counties and all the affected municipalities.
"§ 160A‑58.37.  Effect of utility services plan.
From and after the effective date of the utility services plan, participants in the utility services plan are limited to establishing utility services in the area covered by the utility services plan only as described in that plan.
"§ 160A‑58.38.  Relief.
(a)	Each provision of a utility services plan shall be binding upon the parties. Not later than 30 days following an action to provide services in territory subject to the utility services plan, or the expiration of the initial 90-day period following notification where it is alleged that a party failed to make a good-faith effort to negotiate a utility services plan, a party which believes that another party has violated this Part or the utility services plan may file a petition in the superior court of the county where any of the territory is located seeking review of the action alleged to have violated this Part or the utility plan.
(b)	Within five days after the petition is filed with the court, the petitioning party shall serve copies of the petition by certified mail, return receipt requested, upon the respondent party.
(c)	The review shall be conducted by the court without a jury.
(d)	At anytime before or during the review proceeding, any party subject to the utility services plan may apply to the reviewing court for an order staying the action to provide utility services pending the outcome of the review. At any time before or during the review proceeding, any party subject to the utility services plan negotiation may apply to the reviewing court for an order staying the adoption of an annexation ordinance under Part 1 or Part 4 of this Article, or a resolution of intent under Part 2 or Part 3 of this Article, if it is alleging that the party failed to make a good-faith effort to negotiate a utility services plan during the initial 90-day period following notification.
(e)	Upon a finding that the action to provide utility services was inconsistent with the utility services plan, the court may issue an order to require the party to stop the action and direct the party to restore conditions to what they were prior to the action.
(f)	Upon a finding that the party failed to make a good-faith effort to negotiate a utility services plan during the initial 90-day period following notification, the court may order a new 90-day period to negotiate a utility services plan, during which annexation ordinances under Part 1 or Part 4 of this Article, or resolutions of intent under Part 2 or Part 3 of this Article may not be adopted. The court may also stay the operation of annexation ordinances under Part 1 or Part 4 of this Article, or resolutions of intent under Part 2 or Part 3 of this Article that were adopted following the expiration of the initial 90-day period following notification."
SECTION 15.  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 as a result of an annexation under Part 2 or Part 3 of Article 4A of this Chapter, the owners of assessed property shall pay the assessment in 20 annual installments, but they shall have the option, within 30 days after the publication of the notice that the assessment roll has been confirmed, of paying the assessment in cash. No owner may be assessed a penalty for paying the amounts due early. With respect to payment by installment, the council may provide any of the following:
(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.
(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.
(c)	The city shall also allow the payment of tap fees in annual installments for a period of up to five years. The city may provide that such unpaid fee shall be a lien on the property served."
SECTION 16.  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 section, 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 17.  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)	Low‑income residents. – 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 section, low‑income residents are those with a family income that is fifty percent (50%) or less of median family income."
SECTION 18.  This act becomes effective October 1, 2009, and applies to annexations for which a resolution of intent has been adopted under Part 2 or Part 3 of Article 4A of Chapter 160A of the General Statutes on or after that date and to annexation for which a petition has been received under Part 1 or Part 4 of Article 4A of Chapter 160A of the General Statutes on or after that date.