N.C. law allows municipalities to extend their zoning regulations to cover neighboring unincorporated areas under certain circumstances. Under state law, cities and towns may do so without the consent of affected residents. The legality of one such extraterritorial jurisdiction extension was recently at issue before the state’s second highest court ruling that Alamance County acted improperly in attempting to stop the town of Green Level from extending its zoning to unincorporated areas.

Green Level is a town in Alamance County with a population of more than 2,000. In mid-July 2003, town officials began looking into extending the town’s extraterritorial jurisdiction to nearby unincorporated parts of the county. What the town was considering soon became public knowledge. In December 2003, Alamance County informed the town of its view that state law required Green Level to obtain county permission before extending its extraterritorial jurisdiction. Town officials, however, after researching the matter further, came to a different conclusion. Town and county officials met to discuss the issue, but they couldn’t reach an agreement.

Green Level planned a public hearing on extending its jurisdiction May 6, 2004, but changed it to April 22 when town officials learned that the county was taking steps to prevent the extensions. The town adopted an ordinance extending the jurisdiction the same day as the hearing.

The town’s pending move to extend its jurisdiction alarmed a number of people who would be affected but who would have no say in the matter. They formed a citizens group, Citizens Against ETJ Expansion, and asked Alamance County to “zone their property.”

At a public hearing April 19, three days before Green Level’s action, the Alamance County Commission heard from citizens who “want[ed] to live in a rural setting, not a town; that Green Level cannot control what it has; and that Green Level has nothing to offer except taxes.” The commission responded by amending its Watershed Protection Ordinance to provide greater zoning control.

Unsurprisingly, the dispute over whether the extraterritorial jurisdiction extension was valid ended up before the courts. Green Level challenged the county’s April 19 action and appealed after Superior Court Judge Narley Cashwell ruled in the county’s favor.

N.C. Gen. Stat. § 160A-360(e) lays out when a municipality may extend its ETJ:

“No city may hereafter extend its extraterritorial powers under this Article into any area for which the county at that time has adopted and is enforcing a zoning ordinance and subdivision regulations and within which it is enforcing the State Building Code. However, the city may do so where the county is not exercising all three of these powers, or when the city and the county have agreed upon the area within which each will exercise the powers conferred by this Article.”

The county and town both agreed that Alamance County did have subdivision regulations and was enforcing the State Building Code. At issue was whether the county had a valid zoning ordinance at the time Green Level tried to extend its jurisdiction. If the county had a zoning ordinance that it was enforcing, Green Level could not legally extend its jurisdiction. If county zoning did not exist, then Green Level’s adoption of extra-territorial jurisdiction was legal under state law.

Alamance County adopted a Watershed Protection Ordinance in 1987, which was modified in 1997. The 1997 revision defined a watershed critical district, the balance of the watershed district, and stream buffers. The county contended the 1997 revision amounted to zoning and applied to the area that Green Level was attempting to extend its jurisdiction to as it contained stream buffers.

The Court of Appeals was not persuaded by the county’s argument.

“In light of the text of the 1997 ordinance and the corresponding map, we cannot conclude that the 1997 ordinance extended zoning into the proposed ETJ area,” Judge Linda McGee wrote for a unanimous three-judge panel of the Court of Appeals.

“The language of Section 201 of the 1997 ordinance states that its purpose is to ‘list and describe’ the watershed zones established by the ordinance, yet nothing in that section refers to stream buffers. Moreover, the provisions, which follow Section 201, describe in detail the watershed critical area and the balance of watershed areas, and list allowed uses, prohibited uses, and density limits. No such description appears in the 1997 ordinance for stream buffers, which the County argues constituted zoning in the proposed ETJ area.”

The court also noted that the 1997 ordinance did not actually designate any part of the land at issue as a stream buffer or either of the two watershed classifications.

The Court of Appeals also rejected the county’s alternative argument that its 2004 ordinance should be considered to have extended zoning to the land at issue. The N.C. Supreme Court has held that “county commissioners are authorized to rezone property when reasonably necessary to promote the public health, safety, morals, and welfare; however, this authority may not be exercised in an arbitrary or capricious manner.”

The appeals court found that Alamance County’s 2004 ordinance failed to do so and thus was arbitrary and capricious. The court noted that there was no reference to the county’s comprehensive plan was found in the minutes of the county commission, the planning board, or the “agenda packets, public notice letters, or any other item . . . prepared in relation” to the 2004 ordinance.

The Court of Appeals also found lacking the county’s argument that the ordinance promoted the public welfare by preserving rural property uses. Craig Harmon, the county’s planning manager, testified that permitted uses under the ordinance would include automobile manufacturing plants, chemical manufacturing plants, meat-packing plants, and construction and debris landfills.

He admitted that “[s]ome of those uses [are] probably not” consistent with a rural community character.

“…[W]e conclude that the enactment of the 2004 ordinance was arbitrary and capricious and that the trial court erred by concluding otherwise,” McGee wrote. “Therefore, since the 1997 ordinance did not extend zoning into the proposed ETJ area, and the 2004 zoning ordinance was enacted arbitrarily and capriciously, we conclude that Green Level was not precluded from extending its ETJ pursuant to N.C. Gen. Stat. § 160A-360(e).”

N.C. Court of Appeals ruling are binding determinations of state law unless over-ruled by the N.C. Supreme Court. Because the Court of Appeals’ ruling was unanimous, the high court is not required to hear the case should Alamance County ask for its consideration.

The case is Town of Green Level v. Alamance County, (06-1304) and is available online at www.aoc.state.nc.us/www/public/coa/opinions/2007/061304-1.htm.

Michael Lowrey is an associate editor of Carolina Journal.