A BILL TO BE ENTITLED
AN ACT to authorize cities to establish a municipal service district for the purpose of converting private residential streets to public streets and to authorize related community associations to transfer planned community property to cities.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 160A‑536(a) is amended by adding a new subdivision to read:
"(a)	Purposes. – The city council of any city may define any number of service districts in order to finance, provide, or maintain for the districts one or more of the following services, facilities, or functions in addition to or to a greater extent than those financed, provided or maintained for the entire city:
…
(6)	Converting private residential streets to public streets as provided in subsection (e) of this section."
SECTION 2.  G.S. 160A‑536 is amended by adding a new subsection to read:
"(e)	Converting Private Residential Streets to Public Streets. – A city may establish a municipal service district for the purpose of converting private residential streets to public streets under the following conditions:
(1)	The street‑related common elements are conveyed to the city.
(2)	The converted streets will be accepted by the city for perpetual public maintenance.
(3)	Notwithstanding G.S. 160A‑542, property taxes may not be levied within any district established pursuant to this Article in excess of thirty percent (30%) of the ad valorem tax rate in effect in the city in the fiscal year prior to the establishment of the municipal service district.
(4)	The tax levied under this Article for the municipal service district may only be used to pay the costs related to causing the transfer of ownership of the roadways, evaluation of the condition of the private roadways, and the design and construction costs related to improving the roadways to meet public streets standards as approved by the governing board.
(5)	After all such streets have been upgraded to meet public street standards and all costs have been recovered from the tax in the district, no further tax may be levied in the district and the city council shall proceed to abolish the municipal service district as provided by G.S. 160A‑541.
Notwithstanding (i) the provisions of the North Carolina Planned Community Act, Chapter 47F of the General Statutes, (ii) related articles of declaration, (iii) deed covenants, or (iv) any other similar document recorded with the Register of Deeds, the executive boards of owners' associations located within a municipal service district established under subdivision (a)(6) of this section may transfer street‑related common elements to the municipality if a majority of the lot owners of the owners' association have signed a petition requesting the city to establish a municipal service district for the purpose of paying the costs related to converting private residential streets to public streets. 
Notwithstanding G.S. 160A‑299, if the city abandons the certain streets and associated rights‑of‑way, the street‑related common elements shall be returned to the Planned Community association(s) in a manner that makes the associations' holdings in common elements as they were prior to the establishment of the municipal service district."
SECTION 3.  This act is affective when it becomes law.