§ 160A-33.  Declaration of policy.

It is hereby declared as a matter of State policy:

(1)       That sound urban development is essential to the continued economic development of North Carolina;

(2)       That municipalities are created to provide the governmental services essential for sound urban development and for the protection of health, safety and welfare in areas being intensively used for residential, commercial, industrial, institutional and government purposes or in areas undergoing such development;

(3)       That municipal boundaries should be extended, in accordance with legislative standards applicable throughout the State, to include such areas and to provide the high quality of governmental services needed therein for the public health, safety and welfare; and

(4)       That new urban development in and around municipalities having a population of less than 5,000 persons tends to be concentrated close to the municipal boundary rather than being scattered and dispersed as in the vicinity of larger municipalities, so that the legislative standards governing annexation by smaller municipalities can be simpler than those for larger municipalities and still attain the objectives set forth in this section;

(5)       That areas annexed to municipalities in accordance with such  uniform legislative standards should receive the services provided by the annexing municipality in accordance with G.S. 160A‑35(3). (1959, c. 1010, s. 1; 1973, c. 426, s. 74; 1983, c. 636, s. 8.)

According to Nolan v Village of Marvin ,  

This is not normally done by towns. They annex with no consideration as to why they were given the power of annexation in the first place.

From the 1959 study commission report:

"Therefore, we have concluded that for many purposes the distinguishing feature of a city is the existence of, and need for, large-scale and expensive community facilities. And since it is not fair for people to help build facilities that will give them no benefit, or at most an indirect regional benefit, the dividing line between a city and its rural and suburban periphery can be based on the idea that only the land and its people who need such facilities, now or in the near future, should be within the city."

§ 160A‑34.  Authority to annex.

The governing board of any municipality having a population of less than 5,000 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). (1959, c. 1010, s. 2; 1973, c. 426, s. 74; 1985, c. 92, s. 1.)

Notice that parts of Craven County cannot apply this law, despite: 

NC Constitution Article 1: Sec. 19. Law of the land; equal protection of the laws.

No person shall be taken, imprisoned, or disseized of his freehold, liberties, or privileges, or outlawed, or exiled, or in any manner deprived of his life, liberty, or property, but by the law of the land. No person shall be denied the equal protection of the laws; nor shall any person be subjected to discrimination by the State because of race, color, religion, or national origin.

§ 160A‑35.  Prerequisites to annexation; ability to serve; report and plans.

A municipality exercising authority under this Part shall make plans for the extension of services to the area proposed to be annexed and shall, prior to the public hearing provided for in G.S. 160A‑37, prepare a report setting forth such plans to provide services to such area. The report shall include:

      (1)       A map or maps of the municipality and adjacent territory to show the following information:

       a.         The present and proposed boundaries of the municipality.

       b.         The proposed extensions of water mains and sewer outfalls to serve the annexed area, if such utilities are operated by the municipality. The water and sewer map must bear the seal of a registered professional engineer or a licensed surveyor.

b. The town itself need not be the provider of services, it only has to insure that the services provided within the town are provided likewise in the annexed area.

      (3)       A statement setting forth the plans of the municipality for extending to the area to be annexed each major municipal service performed within the municipality at the time of annexation. Specifically, such plans shall:

       a.         Provide for extending police protection, fire protection, solid waste collection and street maintenance services to the area to be annexed on the date of annexation on substantially the same basis and in the same manner as such services are provided within the rest of the municipality prior to annexation. A contract with a rural fire department to provide fire protection shall be an acceptable method of providing fire protection. If a water distribution system is not available in the area to be annexed, the plans must call for reasonably effective fire protection services until such time as waterlines are made available in such area under existing municipal policies for the extension of waterlines. A contract with a private firm to provide solid waste collection services shall be an acceptable method of providing solid waste collection services.      

(3)a. This is the easiest statement for a municipality. If a city already provides those services it is easy to claim extension of these basic services. If they do not provide them within the city, they do not have to extend them.

(3)b. This is the hardest statement to comply with as it is the most costly. Again, if the muni does not provide water/sewer, it does not have to extend either. This flies in the face of the Policy of the state seen above.

There is an exception to having to provide water/sewer. If the topography of the land makes extension economically infeasible, the town does not have to provide water and sewer, only septic tank pumping service. Again this flies in the face of the Policy. Additionally, it is left to the town itself to decide if it is not feasible, and they are not required to elaborate on why they feel it is not feasible. (See Princeton's 2008 annexation.) The courts have ruled that if a town provides the service under the same circumstance (topography) elsewhere, that economics is no longer a factor. In other words if you can do it over there, you have to do it over here too.

Briggs v City of Asheville, COA (02-1296) 08-05-2003 (excerpt)

… Asheville also contends that because it is economically infeasible to extend the major sewer outfall lines into the annexed area, the statute enables it to provide septic system services in lieu of sewer service. We disagree.
N.C. Gen. Stat. § 160A-47(3)(b) provides that “in areas where the municipality is required to extend sewer services according to its policies, but the installation of sewer is not is not economically feasible due to the unique topography of the area, the municipality shall provide septic system maintenance and repair service until such time as sewer service is provided to properties similarly situated.” (Emphasis supplied). Moreover, under § 160A- 47(3)(b), the connection of individual lots to the main sewer outfall line is governed by the city's policies. In short, subsection (3)(b) allows the city to provide septic system maintenance (1) when the unique topography of the land makes it economically infeasible to connect an individual lot to the main sewer outfall line, and (2) “until such time as sewer service is provided to properties similarly situated.”
    In this case, John Echeverri, the assistant city engineer, testified that Asheville could service the area to be annexed with a pump station. He indicated that sewer service is provided to the northern side of Lake Julian , an area similar in topography to the southeastern side of Lake Julian where the property to be annexed is located. Thus, even assuming it was economically infeasible to extend the sewer lines to the individual homes, Mr. Echeverri's testimony establishes that sewer service is already being provided to a “similarly situated” area.
    Moreover, the record shows that with the exception of a few isolated properties on the northern side of the lake, residents on the northern, eastern, and western sides of Lake Julian had sewer service. On the southern side, all of the annexation area residents had sewer service with the exception of approximately 35 to 40 residences in the Old Shoals area. Since the record shows that sewer service is already being provided to an area similarly situated to the area to be annexed, we hold that Asheville failed to create an annexation services plan that complies with N.C. Gen. Stat. § 160A-47(3)(b). See Wallace v. Town of Chapel Hill, 93 N.C. App. 422, 428, 378 S.E.2d 225, 228 (1989) (“The purpose of [G.S. 160A-47] is to insure that major municipal services are provided to newly annexed areas on a nondiscriminatory basis.”).
    Reversed and remanded.
    Judges McCULLOUGH and ELMORE concur. (emphasis added)  

§ 160A‑35.1.  Limitation on change in financial participation prior to annexation.

For purposes of the extension of water and sewer services required under G.S. 160A‑35, no ordinance or policy substantially diminishing the financial participation of a municipality in the construction of water or sewer facilities required under this Article may apply to an area being annexed unless the ordinance or policy became effective at least 180 days prior to the date of adoption by the municipality of the resolution giving notice of intent to consider annexing the area under G.S. 160A‑37(a). (1991, c. 25, s. 1; c. 761, s. 30; 1998‑150, s. 5.)

§ 160A‑36.  Character of area to be annexed.

(a)       A municipal governing board may extend the municipal corporate limits to include any area which meets the general standards of subsection (b), and which meets the requirements of subsection (c).

(b)       The total area to be annexed must meet the following standards:

     (1)       It must be adjacent or contiguous to the municipality's boundaries at the time the annexation proceeding is begun, except if the entire territory of a county water and sewer district created under G.S. 162A‑86(b1) is being annexed, the annexation shall also include any noncontiguous pieces of the district as long as the part of the district with the greatest land area is adjacent or contiguous to the municipality's boundaries at the time the annexation proceeding is begun.

     (2)       At least one eighth of the aggregate external boundaries of the area must coincide with the municipal boundary.

(c)² It is not unusual for an annexation report to not remove this acreage from calculations

Then add all the acreage of the lots that are not commercial, industrial, governmental and institutional (i.e. churches) acreage. Add all of these lots that are 3 acres or smaller. Is this number at least 60% of the acreage.

(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.

(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). (1959, c. 1010, s. 4; 1973, c. 426, s. 74; 1985, c. 757, s. 205(c); 1993 (Reg. Sess., 1994), c. 696, s. 6; c. 714, s. 6; 1998‑150, s. 6.)

§ 160A‑37.  Procedure for annexation.

(a)       Notice of Intent. – Any municipal governing board desiring to annex territory under the provisions of this Part shall first pass a resolution stating the intent of the municipality to consider annexation. Such resolution shall describe the boundaries of the area under consideration, 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.

(b)       Notice of Public Hearing. – The notice of public hearing shall:

(1)       Fix the date, hour and place of the public informational meeting and the date, hour, and place of the public hearing.

(4)       Include an explanation of an owner's rights pursuant to subsection (f1) and (f2) of this section.

Such notice shall be given by publication once a week for at least two successive weeks prior to the date of the informational meeting in a newspaper having general circulation in the municipality and, in addition thereto, if the area to be annexed lies in a county containing less than fifty percent (50%) of the land area of the municipality, in a newspaper having general circulation in the area of proposed annexation. The period from the date of the first publication to the date of the last publication, both dates inclusive, shall be not less than eight days including Sundays, and the date of the last publication shall be not more than seven days preceding the date of public informational meeting. If there be no such newspaper, the municipality shall post the notice in at least five public places within the municipality and at least five public places in the area to be annexed for 30 days prior to the date of public informational meeting. In addition, notice shall be mailed at least four weeks prior to date of the informational meeting, by first class mail, postage prepaid to the owners as shown by the tax records of the county of all freehold interests in real property located within the area to be annexed. The person or persons mailing such notices shall certify to the governing board that fact, and such certificate shall become a part of the record of the annexation proceeding and shall be deemed conclusive in the absence of fraud. If the notice is returned to the city by the postal service by the tenth day before the informational meeting, a copy of the notice shall be sent by certified mail, return receipt requested, at least seven days before the informational meeting. Failure to comply with the mailing requirement of this subsection shall not invalidate the annexation unless it is shown that the requirements were not substantially complied with.

If the governing board by resolution finds that the tax records are not adequate to identify the owners of some or all of the parcels of real property within the area it may in lieu of the mail procedure as to those parcels where the owners could not be so identified, post the notice at least 30 days prior to the date of public informational meeting on all buildings on such parcels, and in at least five other places within the area to be annexed. In any case where notices are placed on property, the person placing the notice shall certify that fact to the governing board.

(c)       Action Prior to Informational Meeting. – At least 30 days before the date of the public informational meeting, the governing board shall approve the report provided for in G.S. 160A‑35, and shall make it available to the public at the office of the municipal clerk. In addition, the municipality may prepare a summary of the full report for public distribution. In addition, the city shall post in the office of the city clerk at least 30 days before the public informational meeting a legible map of the area to be annexed and a list of the persons holding freehold interests in property in the area to be annexed that it has identified.

(e)       Passage of the Annexation Ordinance. – The municipal governing board shall take into consideration facts presented at the public hearing and shall have authority to amend the report required by G.S. 160A‑35 to make changes in the plans for serving the area proposed to be annexed so long as such changes meet the requirements of G.S. 160A‑35. At any regular or special meeting held no sooner than the tenth day following the public hearing and not later than 90 days following such public hearing, the governing board shall have authority to adopt an ordinance extending the corporate limits of the municipality to include all, or such part, of the area described in the notice of public hearing which meets the requirements of G.S. 160A‑36 and which the governing board has concluded should be annexed. The ordinance shall:

(1)       Contain specific findings showing that the area to be annexed meets the requirements of G.S. 160A‑36. The external boundaries of the area to be annexed shall be described by metes and bounds. In showing the application of G.S. 160A‑36(c) and (d) to the area, the governing board may refer to boundaries set forth on a map of the area and incorporate same by reference as a part of the ordinance.

(4)       Fix the effective date for annexation. The effective date of annexation may be fixed for any date not less than 40 days nor more than 400 days from the date of passage of the ordinance.

(f)        Effect of Annexation Ordinance. – Except as provided in subsection (f1) of this section, from and after the effective date of the annexation ordinance, the territory and its citizens and property shall be subject to all debts, laws, ordinances and regulations in force in such municipality and shall be entitled to the same privileges and benefits as other parts of such municipality. Real and personal property in the newly annexed territory on the January 1 immediately preceding the beginning of the fiscal year in which the annexation becomes effective is subject to municipal taxes as provided in G.S. 160A-58.10. 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.

(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.

(2) If the lot looses it PUV, by the end of the month it fully becomes part of the town and can be taxed.

This is where it is stated that the lot is not subject to taxation by the town and that the lot is not entitled to city services.

(h)       Remedies for Failure to Provide Services. – If, not earlier than one year from the effective date of annexation, and not later than 15 months from the effective date of annexation, any person owning property in the annexed territory shall believe that the municipality has not followed through on its service plans adopted under the provisions of G.S. 160A-35(3) and subsection (e) of this section, the person may apply for a writ of mandamus under the provisions of Article 40, Chapter 1 of the General Statutes. Relief may be granted by the judge of superior court

(1)       If the municipality has not provided the services set forth in its plan submitted under the provisions of G.S. 160A-35(3)a on substantially the same basis and in the same manner as such services were provided within the rest of the municipality prior to the effective date of annexation, and

(2)       If at the time the writ is sought such services set forth in the plan submitted under the provisions of G.S. 160A-35(3)a are still being provided on substantially the same basis and in the same manner as on the date of annexation of the municipality.

Relief may also be granted by the judge of superior court

(1)       If the plans submitted under the provisions of G.S. 160A-35(3)b. require the construction of major trunk water mains and sewer outfall lines and

(2)       If contracts for such construction have not yet been let.

If a writ is issued, costs in the action, including a reasonable attorney's fee for such aggrieved person, shall be charged to the municipality.

(j)        Subsection (i) of this section shall not apply to the annexation of any area if the resolution of intent describing the area and the ordinance annexing the area both provide that the effective date of the annexation shall be at least one year from the date of passage of the annexation ordinance.

§ 160A‑37.1.  Contract with rural fire department.

(a)       If the area to be annexed described in a resolution of intent passed under G.S. 160A‑37(a) includes an area in an insurance district defined under G.S. 153A‑233, a rural fire protection district under Article 3A of Chapter 69 of the General Statutes, or a fire service district under Article 16 of Chapter 153A of the General Statutes, and a rural fire department was on the date of adoption of the resolution of intent providing fire protection in the area to be annexed, then the city (if the rural fire department makes a written request for a good faith offer, and the request is signed by the chief officer of the fire department and delivered to the city clerk no later than 15 days before the public hearing) is required to make a good faith effort to negotiate a five‑year contract with the rural fire department to provide fire protection in the area to be annexed.

(b)       If the area is a rural fire protection district or a fire service district, then an offer to pay annually for the term of the contract the amount of money that the tax rate in the district in effect on the date of adoption of the resolution of intent would generate based on property values on January 1 of each year in the area to be annexed which is in such a district is deemed to be a good faith offer of consideration for the contract.

(c)       If the area is an insurance district but not a rural fire protection district or fire service district, then an offer to pay annually over the term of the contract the amount of money which is determined to be the equivalent of the amount which would be generated by multiplying the fraction of the city's general fund budget in that current fiscal year which is proposed to be expended for fire protection times the tax rate for the city in the current year, and multiplying that result by the property valuation in the area to be annexed which is served by the rural fire department is deemed to be a good faith offer of consideration for the contract; Provided that the payment shall not exceed the equivalent of fifteen cents (15¢) on one hundred dollars ($100.00) valuation of annexed property in the district according to county valuations for the current fiscal year.

(d)       Any offer by a city to a rural fire department which would compensate the rural fire department for revenue loss directly attributable to the annexation by paying such annually for five years, is deemed to be a good faith offer of consideration for the contract.

(e)       Under subsections (b), (c), or (d) of this section, if the good faith offer is for first responder service, an offer of one‑half the calculated amount under those subsections is deemed to be a good faith offer.

(f)        This section does not obligate the city or rural fire department to enter into any contract.

(g)       The rural fire department may, if it feels that no good faith offer has been made, appeal to the Local Government Commission within 30 days following the passage of an annexation ordinance. The rural fire department may apply to the Local Government Commission for an order staying the operation of the annexation ordinance pending the outcome of the review. The Commission may grant or deny the stay in its discretion upon such terms as it deems proper, and it may permit annexation of any part of the area described in the ordinance concerning which no question for review has been raised, provided that no other appeal under G.S. 160A‑38 is pending.

(h)       The Local Government Commission may affirm the ordinance, or if the Local Government Commission finds that no good faith offer has been made, it shall remand the ordinance to the municipal governing board for further proceedings, and the ordinance shall then not become effective unless the Local Government Commission finds that a good faith offer has been made.

(i)        Any party to the review under subsection (h) may obtain judicial review in accordance with Chapter 150B of the General Statutes. (1983, c. 636, s. 20; 1987, c. 827, s. 1.)

§ 160A-37.2.  Assumption of debt.

(a)       If the city has annexed any area which is served by a rural fire department and which is in an insurance district defined under G.S. 153A-233, a rural fire protection district under Article 3A of Chapter 69 of the General Statutes or a fire service district under Article 17 of Chapter 153A of the General Statutes, then upon the effective date of annexation if the city has not contracted with the rural fire department for fire protection, or when the rural fire department ceases to provide fire protection under contract, then the city shall pay annually a proportionate share of any payments due on any debt (including principal and interest) relating to facilities or equipment of the rural fire department, if the debt was existing at the time of adoption of the resolution of intent, with the payments in the same proportion that the assessed valuation of the area of the district annexed bears to the assessed valuation of the entire district on the date the annexation ordinance becomes effective or another date for valuation mutually agreed upon by the city and the fire department.

(b)       The city and rural fire department shall jointly present a payment schedule to the Local Government Commission for approval and no payment may be made until such schedule is approved. (1983, c. 636, s. 22; 1998‑150, s. 8.)

§ 160A‑37.3.  Contract with private solid waste collection firm(s).

(a)       If the area to be annexed described in a resolution of intent passed under G.S. 160A‑37(a) includes an area where a firm (i) meets the requirements of subsection (a1) of this section, (ii) on the ninetieth day preceding the date of adoption of the resolution of intent or resolution of consideration was providing solid waste collection services in the area to be annexed, (iii) on the date of adoption of the resolution of intent is still providing such services, and (iv) by reason of the annexation the firm's franchise with a county or arrangements with third parties for solid waste collection will be terminated, the city shall do one of the following:

(1)       Contract with the firm for a period of two years after the effective date of the annexation ordinance to allow the firm to provide collection services to the city in the area to be annexed for sums determined under subsection (d) of this section.

(2)       Pay to the firm the firm's economic loss, with one‑third of the economic loss to be paid within 30 days of the termination and the balance paid in 12 equal monthly installments during the next succeeding 12 months. Any remaining economic loss payment is forfeited if the firm terminates service to customers in the annexation area prior to the effective date of the annexation.

(3)       Make other arrangements satisfactory to the parties.

(a1)     To qualify for the options set forth in subsection (a) of this section, a firm must have done one of the following:

(1)       Subsequent to receiving notice of the annexation in accordance with subsection (b) of this section, filed with the city clerk at least 10 days prior to the public hearing a written request to contract with the city to provide solid waste collection services containing a certification, signed by an officer or owner of the firm, that the firm serves at least 50 customers within the county at that time.

(2)       Contacted the city clerk pursuant to public notice published by the city, pursuant to G.S. 160A‑37(b), at least 10 days before the hearing and provided to the city clerk a written request to contract with the city to provide solid waste collection services. The request must contain a certification signed by an officer or owner of the firm that the firm serves at least 50 customers within the county at that time.

(a2)     Firms shall file notice of provision of solid waste collection service with the city clerk of all cities located in the firm's collection area or within five miles thereof.

(b)       At least four weeks prior to the date of the informational meeting, the city shall provide written notice of the resolution of intent to all firms serving the area to be annexed. The notice shall be sent to all firms that filed notice in accordance with subsection (a2) of this section by certified mail, return receipt requested, to the address provided by the firm under subsection (a2) of this section.

(c)       The city may require that the contract contain:

(1)       A requirement that the firm post a performance bond and maintain public liability insurance coverage;

(2)       A requirement that the firm agree to service customers in the annexed area that were not served by that firm on the effective date of annexation;

(3)       A provision that divides the annexed area into service areas if there were more than one firm being contracted within the area, such that the entire area is served by the firms, or by the city as to customers not served by the firms;

(4)       A provision that the city may serve customers not served by the firm on the effective date of annexation;

(5)       A provision that the contract can be cancelled in writing, delivered by certified mail to the firm in question with 30 days to cure substantial violations of the contract, but no contract may be cancelled on these grounds unless the Local Government Commission finds that substantial violations have occurred, except that the city may suspend the contract for up to 30 days if it finds substantial violation of health laws;

(6)       Performance standards, not exceeding city standards existing at the time of notice published pursuant to G.S. 160A‑37(b), with provision that the contract may be cancelled for substantial violations of those standards, but no contract may be cancelled on those grounds unless the Local Government Commission finds that substantial violations have occurred;

(7)       A provision for monetary damages if there are violations of the contract or of performance standards.

(d)       If the services to be provided to the city by reason of the annexation are substantially the same as rendered under the franchise with the county or arrangements with the parties, the amount paid by the city shall be at least ninety percent (90%) of the amount paid or required under the existing franchise or arrangements. If such services are required to be adjusted to conform to city standards or as a result of changes in the number of customers, and as a result there are changes in disposal costs (including mileage and landfill charges), requirements for storage capacity (dumpsters and/or residential carts), and/or frequency of collection, the amount paid by the city for the service shall be increased or decreased to reflect the value of such adjusted services as if computed under the existing franchise or arrangements. In the event agreement cannot be reached between the city and the firm under this subsection, the matters shall be determined by the Local Government Commission.

(e),      (f) Repealed by Session Laws 2006‑193, s. 1, applicable to annexations for which a resolution of intent is adopted on or after January 1, 2007.

(g)       The firm may, if it contends that no contract has been offered, appeal to the Local Government Commission within 30 days following passage of an annexation ordinance. The firm may appeal to the Local Government Commission for an order staying the operation of the annexation ordinance pending the outcome of the review. The Commission may grant or deny the stay upon such terms as it deems proper. If the Local Government Commission finds that the city has not made an offer which complies with this section, it shall remand the ordinance to the municipal governing board for further proceedings, and the ordinance shall not become effective until the Local Government Commission finds that such an offer has been made. Either the firm or the city may obtain judicial review in accordance with Chapter 150B of the General Statutes.

(h)       A firm which has given notice under subsection (a) of this section that it desires to contract, and any firm that the city believes is eligible to give such notice, shall make available to the city not later than 30 days following a written request of the city, sent by certified mail return receipt requested, all information in its possession or control, including but not limited to operational, financial and budgetary information, necessary for the city to determine if the firm qualifies for the benefits of this section and to determine the nature and scope of the potential contract and/or economic loss. The firm forfeits its rights under this section if it fails to make a good faith response within 30 days following receipt of the written request for information from the city, provided that the city's written request states that statutory rights will be forfeited in the absence of a timely response and includes a specific reference to this section.

(i)        As used in this section, the following terms mean:

(1)       Economic loss. – A sum equal to 15 times the average gross monthly revenue for the three months prior to the passage of the resolution of intent or resolution of consideration, as applicable under subsection (a) of this section, collected or due the firm for residential, commercial, and industrial collection service in the area annexed or to be annexed; provided that revenue shall be included in calculations under this subdivision only if policies of the city will provide solid waste collection to those customers such that arrangements between the firm and the customers will be terminated.

(2)       Firm. – A private solid waste collection firm. (1985, c. 610, s. 3; 1987, c. 827, s. 1; 1989, c. 598, s. 6; 1998‑150, s. 9; 2006‑193, s. 1.)

§ 160A‑38.  Appeal.

(a)       Within 60 days following the passage of an annexation ordinance under authority of this Part, any person owning property in the annexed territory who shall believe that he will suffer material injury by reason of the failure of the municipal governing board to comply with the procedure set forth in this Part or to meet the requirements set forth in G.S. 160A‑36 as they apply to his property may file a petition in the superior court of the county in which the municipality is located seeking review of the action of the governing board.

(b)       Such petition shall explicitly state what exceptions are taken to the action of the governing board and what relief the petitioner seeks. Within 10 days after the petition is filed with the court, the person seeking review shall serve copies of the petition by registered mail, return receipt requested, upon the municipality.

(c)       Within 15 days after receipt of the copy of the petition for review, or within such additional time as the court may allow, the municipality shall transmit to the reviewing court

(1)       A transcript of the portions of the municipal journal or minute book in which the procedure for annexation has been set forth and

(2)       A copy of the report setting forth the plans for extending services to the annexed area as required in G.S. 160A‑35.

(f)        The court shall fix the date for review of annexation proceedings under this Chapter, which review date shall preferably be within 30 days following the last day for receiving petitions to the end that review shall be expeditious and without unnecessary delays. The review shall be conducted by the court without a jury. The court may hear oral arguments and receive written briefs, and may take evidence intended to show either

(1)       That the statutory procedure was not followed or

(2)       That the provisions of G.S. 160A‑35 were not met, or

(3)       That the provisions of G.S. 160A‑36 have not been met.

(g)       The court may affirm the action of the governing board without change, or it may

(1)       Remand the ordinance to the municipal governing board for further proceedings if procedural irregularities are found to have materially prejudiced the substantive rights of any of the petitioners.

(2)       Remand the ordinance to the municipal governing board for amendment of the boundaries to conform to the provisions of G.S. 160A‑36 if it finds that the provisions of G.S. 160A‑36 have not been met; provided, that the court cannot remand the ordinance to the municipal governing board with directions to add area to the municipality which was not included in the notice of public hearing and not provided for in plans for service.

(3)       Remand the report to the municipal governing board for amendment of the plans for providing services to the end that the provisions of G.S. 160A‑35 are satisfied.

(4)       Declare the ordinance null and void, if the court finds that the ordinance cannot be corrected by remand as provided in subdivisions (1), (2), or (3) of this subsection.

If any municipality shall fail to take action in accordance with the court's instructions upon remand within 90 days following entry of the order embodying the court's instructions, the annexation proceeding shall be deemed null and void.

(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).

(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. (1959, c. 1010, s. 6; 1973, c. 426, s. 74; 1977, c. 148, ss. 6, 7; 1989, c. 598, s. 7; 1995 (Reg. Sess., 1996), c. 746, s. 4; 1998‑150, s. 10; 1999‑148, s. 2.

§ 160A‑39.  Annexation recorded.

Whenever the limits of a municipality are enlarged in accordance with the provisions of this Part, it shall be the duty of the mayor of the municipality to cause an accurate map of such annexed territory, together with a copy of the ordinance duly certified, to be recorded in the office of the register of deeds of the county or counties in which such territory is situated and in the office of the Secretary of State.  The documents required to be filed with the Secretary of State under this section shall be filed not later than 30 days following the effective date of the annexation ordinance.  All documents shall have an identifying number affixed thereto and shall conform in size in accordance with rules prescribed by the Secretary.  Failure to file within 30 days shall not affect the validity of the annexation.  Any annexation shall be reported as part of the Boundary and Annexation Survey of the United States Bureau of the Census. (1959, c. 1010, s. 7; 1973, c. 426, s. 74; 1987, c. 715, s. 7, c. 879, s. 3; 1989, c. 440, s. 8; 1991, c. 586, s. 2.)

§ 160A‑40.  Authorized expenditures.

Municipalities initiating annexations under the provisions of this Part are authorized to make expenditures for surveys required to describe the property under consideration or for any other purpose necessary to plan for the study and/or annexation of unincorporated territory adjacent to the municipality. In addition, following final passage of the annexation ordinance, the annexing municipality shall have authority to proceed with expenditures for construction of water and sewer lines and other capital facilities and for any other purpose calculated to bring services into the annexed area in a more effective and expeditious manner prior to the effective date of annexation. (1959, c. 1010, s. 8; 1973, c. 426, s. 74.)

§ 160A‑41.  Definitions.

The following terms where used in this Part shall have the following meanings, except where the context clearly indicates a different meaning:

(1)       "Contiguous area" shall mean any area which, at the time annexation procedures are initiated, either abuts directly on the municipal boundary or is separated from the municipal boundary by a street or street right‑of‑way, a creek or river, the right‑of‑way of a railroad or other public service corporation, lands owned by the municipality or some other political subdivision, or lands owned by the State of North Carolina.

(2)       "Used for residential purposes" shall mean any lot or tract five acres or less in size on which is constructed a habitable dwelling unit. (1959, c. 1010, s. 9; 1973, c. 426, s. 74.)

§ 160A‑42.  Land estimates.

In determining degree of land subdivision for purposes of meeting the requirements of G.S. 160A‑36, the municipality shall use methods calculated to provide reasonably accurate results. In determining whether the standards set forth in G.S. 160A‑36 have been met on appeal to the superior court under G.S. 160A‑38, the reviewing court shall accept the estimates of the municipality as provided in this section unless the actual total area or degree of subdivision falls below the standards in G.S. 160A‑36:

(1)       As to total area if the estimate is based on an actual survey, or on county tax maps or records, or on aerial photographs, or on some other reasonably reliable map used for official purposes by a governmental agency unless the petitioners on appeal demonstrate that such estimates are in error in the amount of five percent (5%) or more.

(2)       As to degree of land subdivision, if the estimates are based on an actual survey, or on county tax maps or records, or on aerial photographs, or on some other reasonably reliable source, unless the petitioners on appeal show that such estimates are in error in the amount of five percent (5%) or more. (1959, c. 1010, s. 10; 1973, c. 426, s. 74; 1998‑150, s. 11.)

§ 160A-58.10.  Tax of newly annexed territory.

(a)       Applicability of Section. – Real and personal property in territory annexed pursuant to this Article is subject to municipal taxes as provided in this section.

(b)       Prorated Taxes. – Real and personal property in the newly annexed territory on the January 1 immediately preceding the beginning of the fiscal year in which the annexation becomes effective is subject to prorated municipal taxes levied for that fiscal year as provided in this subsection.  The amount of municipal taxes that would have been due on the property had it been within the municipality for the full fiscal year shall be multiplied by the following fraction: the denominator shall be 12 and the numerator shall be the number of full calendar months remaining in the fiscal year, following the day on which the annexation becomes effective.  The product of the multiplication is the amount of prorated taxes due.  The lien for prorated taxes levied on a parcel of real property shall attach to the parcel taxed on the listing date, as provided in G.S. 105‑285, immediately preceding the fiscal year in which the annexation becomes effective.  The lien for prorated taxes levied on personal property shall attach on the same date to all real property of the taxpayer in the taxing unit, including the newly annexed territory.  If the annexation becomes effective after June 30 and before September 2, the prorated taxes shall be due and payable on the first day of September of the fiscal year for which the taxes are levied.  If the annexation becomes effective after September 1 and before the following July 1, the prorated taxes shall be due and payable on the first day of September of the next succeeding fiscal year.  The prorated taxes are subject to collection and foreclosure in the same manner as other taxes levied for the fiscal year in which the prorated taxes become due.

(c)       Taxes in Subsequent Fiscal Years. – In fiscal years subsequent to the fiscal year in which an annexation becomes effective, real and personal property in the newly annexed territory is subject to municipal taxes on the same basis as is the preexisting territory of the municipality.

(d)       Transfer of Tax Records. – For purposes of levying prorated taxes the municipality shall obtain from the county a record of property in the area being annexed that was listed for taxation on the January 1 immediately preceding the fiscal year for which the prorated taxes are levied.  In addition, if the effective date of annexation falls between January 1 and June 30, the municipality shall, for purposes of levying taxes for the fiscal year beginning July 1 following the date of annexation, obtain from the county a record of property in the area being annexed that was listed for taxation as of said January 1. (1977, c. 517, s. 9.)