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The Revised Annexation Laws

Article Date: Thursday, October 04, 2012

Written By: Toby Coleman

Over the last two years, the General Assembly has substantially revised the annexation laws. These revisions provide private landowners with new rights and impose new burdens and requirements on municipalities. What follows is a brief summary of what has changed, and what remains the same.


Involuntary Annexation
Locating the reorganized statutes. When the legislature revised the involuntary annexation laws, it also moved them. The involuntary annexation provisions previously found in Parts 2 and 3 of Article 4A of Chapter 160A (N.C. Gen. Stat. § 160A-33, et seq.) can now be found in Part 7 (N.C. Gen. Stat. § 160A-58.50 et seq.).

Most prerequisites were unchanged. Municipalities still must show that areas they seek to annex involuntarily are sufficiently contiguous and are developed for “urban purposes.” The standards for contiguity and the definition of what constitutes development for “urban purposes” are now set out in N.C. Gen. Stat. § 160A-58.54(a). (A non-urban area may be annexed under N.C. Gen. Stat. § 160A-58.54(b) if it is necessary to connect the municipality to a noncontiguous area developed for urban purposes.)

The Referendum Requirement. After a “petition to deny” procedure was struck down, the legislature added a referendum requirement to the involuntary annexation procedures. The bulk of the referendum requirement is codified at N.C. Gen. Stat. § 160A-58.64. It requires a referendum once a municipality adopts a resolution of intent to annex an area. The referendum can only be held during regular municipal elections, which in most cases are only in odd-numbered years. The only voters eligible to vote in the referendum are voters registered in the area proposed to be annexed. In order to proceed with the annexation, a majority of the votes cast in the referendum must be in favor of annexation. If the annexation is rejected, the municipality must wait three years before proceeding with the involuntary annexation.1

No Involuntary Annexation of Bona Fide Farms. N.C. Gen. Stat. § 160A-58.54 provides that municipalities cannot annex properties being used for “bona fide farm purposes” without the written consent of the owners. Under N.C. Gen. Stat. § 153-340(b), the term “bona fide farm purposes” encompasses a wide range of activities.

Obligation to Extend Water and Sewer Service. The legislature also added a provision obliging municipalities to extend water and sewer service to involuntary annexed properties at no charge, provided certain requirements are met. This new obligation is set forth in N.C. Gen. Stat. § 160A-58.56, and considered in detail in Karen Kemerait and Charlotte Mitchell’s article in the October 2011 edition of the Land Use Law Quarterly. In brief, a municipality is obligated to extend water and sewer lines to those properties whose owners request service within three and a half years of being annexed, provided that a majority of the parcels in the area to be annexed requested service within 65 days of notice.


Voluntary Annexation
Mostly Remains the Same. Other than a couple of new provisions providing for the annexation of economically “distressed” areas, the procedures and prerequisites that most petitioners for annexations (e.g. developers) must follow remain unchanged. Under N.C. Gen. Stat. §§ 160A-31 (governing annexations of contiguous areas) and 160A-58 et seq. (governing annexation of non-contiguous “satellite” areas), one hundred percent of the owners of an area sought to be annexed must petition for annexation. Petitioners seeking satellite annexation also must show that the area to be annexed meets the proximity requirements set out in N.C. Gen. Stat. § 160A-58.1.2

Annexation of “Distressed” Areas. The legislature added provisions that make it easier for owners and residents of properties in economically “distressed” areas to petition for city services via annexation. If petitioned to do so by the owners of at least 75 percent of the parcels in the area, municipalities are required by N.C. Gen. Stat. § 160A-31(b1) to annex economically “distressed” areas that meet certain contiguity and population requirements.3 Residents of economically “distressed” areas also now have the right to petition for annexation. Under N.C. Gen. Stat. § 160A-31(j), residents may validly petition for annexation if they collect signatures from an adult resident of at least two-thirds of the households in the area of the petition for annexation. Unlike the owners, residents do not have the power to force municipalities to annex their neighborhoods: Municipalities retain discretion in the face of such petitions.  •
 

Toby Coleman is an associate with Smith Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP. He focuses his practice in the areas of land use, litigation, and real estate. He can be reached at tcoleman@smithlaw.com.


End Notes
1. N.C. Gen. Stat. § 160A-58.64 provides that if an annexation is rejected by referendum voters, the municipality “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 36 months from the date of the referendum.” Though the intent of the statute appears to be to require municipalities to secure voter approval before completing an involuntary annexation, the language of the statute is ambiguous and creates a question about whether a municipality that completes the three-year waiting period can proceed without voters’ approval.   
2. N.C. Gen. Stat. § 160A-58.1(b) sets a 10 percent cap on the total area that a municipality can annex pursuant to satellite annexations. Only municipalities who have been granted exemptions by the legislature may exceed that cap.
3. To qualify for mandatory annexation under N.C. Gen. Stat. § 160A-31(b1), an area must have one-tenth or less of the population of the municipality. In addition, one-eighth of the area’s aggregate external boundaries must be contiguous with the municipality’s boundaries. Municipalities can only be required to annex property under this provision once every three years.

Views and opinions expressed in articles published herein are the authors' only and are not to be attributed to this newsletter, the section, or the NCBA unless expressly stated. Authors are responsible for the accuracy of all citations and quotations.