CHAPTER 209

FORMERLY

HOUSE BILL NO. 353

AS AMENDED BY HOUSE AMENDMENT NO. 1

HOUSE AMENDMENT NO. I TO HOUSE AMENDMENT NO. 1

HOUSE AMENDMENT NOS. 2, 3, 4, 9 AND SENATE AMENDMENT NO. 3

AN ACT TO AMEND TITLE 14 AND TITLE 7 OF THE DELAWARE CODE TO PROVIDE A MECHANISM BY WHICH SCHOOL DISTRICTS MAY DISPOSE OF UNNEEDED BUILDINGS AND LAND BY SALE OR LEASE.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Delaware Code, Title 7, §4518 (d) by inserting In that paragraph (d) immediately after the words "herein above set forth" the words "and except lands or buildings for which title is held by a reorganized school district".

Section 2. Amend Delaware Code, Title 14, §1057 by deleting the title of that section and inserting in lieu thereof a new title as follows:

"Sale or lease of property and disposition of proceeds"

Section 3. Amend Delaware Code, Title 14, §1057 by striking paragraphs (a) and (b) of that section in their entirety and substituting in lieu thereof new paragraphs (a) and (b) as follows:

(a) When any real property, title to which is held by a reorganized school district, is no longer needed for school purposes, it may be sold by the school district subject to the following:

(1) The board of education of the school district shall receive documented recommendations from the superintendent of schools of the district showing why the property Is no longer needed for school district purposes.

(2) The board shall take action to consider such recommendations.

(3) The board shall release the recommendations for public review and shall announce by 10 days' notice in a news release to print and electronic media covering the district the time and place of a public hearing on the recommendation to dispose of the property in question.

(4) The board shall conduct the public hearing as announced.

(5) The board shall within 60 days of said hearing take action to accept, reject, or modify the recommendation and proceed according to the terms of the recommendation In its current status. If the recommendation was rejected, no further action is required pending any future recommendation.

(6) Except for property acquired or constructed with 100% state funds upon affirmative decision to sell a property the board shall retain the services of one or more licensed real estate brokers or realtors who are not associated with any member of the board of education of that district and who shall determine a minimum price at which the property is to be offered for sale. In the event the property was acquired or constructed with 100% state funding, then paragraph (a)(6) of this section shall not apply.

(7) The property for sale shall first be offered to other state agencies at the price determined in subsection (6) above.

(8) Such offer to other state agencies shall be made through the Secretary of Administrative Services who shall in turn confer with the Director of the Delaware Development Office and the State Board of Education. Together, they shall approve a purchase under subsection (7) above or release the district to proceed with another sale within 30 days of the offer by the board of education to the Secretary of Administrative Services.

(9) A state agency may negotiate to the extent feasible and practical to assume the state share in such property by transfer of the debt service obligation to the account of that agency without payment of cash for that share of the price set.

(10) If no other agency of state government declares an intent to purchase the property, the Board of Education shall proceed to offer said property to the local government in whose jurisdiction the property is located. Such an offer shall be made to the chief elected official of that local government. If the offer is not accepted within 30 days, the board may proceed to offer the property on the open market.

(11) Sale of the property on the open market must be advertised at least once a week for two consecutive weeks in a newspaper published or circulated in each county of the State. Such sale may be conducted by the Board and administrative staff of the district or through a licensed realtor or agency who is not associated with the appraiser or any member of the board of education of that district. Any final contract for such sale shall be approved within a period of 60 (sixty) days by the Secretary of Administrative Services, who shall confer with the Director of the Delaware Development Office and the State Board of Education. Approval will not be withheld unless the contract is found by the Secretary to be unreasonable, in which event the Secretary shall disapprove the sale and make specific written findings for such disapproval.

(12) When an offer to purchase the property at a price not less than fixed pursuant to subsection (aX6) is accepted by the board, the Secretary of Administrative Services shall direct that an appraisal be prepared by two independent appraisers licensed in Delaware who are from different firms.

The amount of this confirmatory appraisal will be the average of the two appraisals. Any offer to purchase the property, including offers from state agencies or local governments, at a price not less than that fixed pursuant to subsection (a)(6) may be accepted by the board provided that the purchase price specified in the offer is either not less than the amount established by the confirmatory appraisal or is amended to increase to the amount established by the confirmatory appraisal.

(1) The rights of bond holders shall not be Jeopardized through such sale. This Act shall be construed so as not to impair the rights of any bondholder, and all bonds outstanding shall remain in full force and effect accoring to the terms thereof.

(2) No sales agreement shall be entered into until it can be demonstrated that the purchaser of the property will use the property for purposes authorized according to the zoning requirements, if any, for the area in which the property is located. If any modification of zoning requirements is necessary, those modifications must he certified to by the appropriate zoning authority prior to the conclusion of the sale.

(3) Proceeds from such a sale shall be deposited in the account of the school district for disposition in the following manner and in the following order of priority:

a. Payment of fees and/or taxes, if any connected with the appraisal and/or sale and found to be the responsibility of the seller.

b. Any residual funds shall be distributed to the state (and deposited in the school bond reversion account) and to the district (and deposited in the local school district debt service account or for districts formed under the provisions of §1028 (k) of this Title in the school tax district debt service account) in the same proportion as the state and the district participated in the purchase, construction and/or additions or alternations to the property being sold.

(i) if documentation to show the portion of investment by the state and local school district cannot be established, then the distribution of residual fund shall be 60% state, 40% local school district.

(ii) If the 'local share' of funds for purchase, construction or alteration of the property was from a municipality or county, that portion of the residual shall be assigned to the school district.

c. Notwithstanding the provisions of subsection b. above, when it can be documented that the building - all or part - was a gift to a reorganized school district, or its antecedent, the portion of the residual representing the gift shall be assigned to the school district to be used at the discretion of the local board of education. That portion not identifiable as a gift shall be distributed and deposited as in b. above.

(b) Notwithstanding any provision of §1056 of this Title when any real property or part thereof, of any reorganized school district is no longer needed for school purposes, temporarily or permanently, the board of education of the district may lease such property or part thereof to any person or organization who may be required to pay a rental or fee to be determined by the board and to assume Sole responsibility for the complete maintenance and preservation of the property, including compliance with all applicable building and housing codes so that there will be no cost or obligation to the school district for the continued ownership of such property. Any funds raised from rent or charges collected by the school district shall be applied to the costs of maintaining and operating the leased property, if any, with the balance to be turned over to the State Treasurer to be assigned to the State and the school district according to the provisions of subsection (a) (15) of this Section. Before leasing such property or part thereof to any person or organization, the Board of Education shall first offer to lease the property to the local government in whose jurisdiction the property is located."

Section 4. Amend Delaware Code, Title 14, §1057 (c) by adding to that paragraph (c) a sentence as follows:

"Assignment of funds to bond payment shall occur according to the priority schedule in item (a) (15) of this Section."

Section 5. Amend Delaware Code, Title 14, Chapter 1057 by adding thereto new subsections (c) and (d) to read as follows:

"(c) No sales agreement, lease or donation of real property described within this section shall be negotiated when such property contains or is an integral part of recreational facilities, such as athletic fields or playgrounds, unless and until the Board has made specific findings with respect to such facilities after discussion thereof in public forum as described in subsection (a)(3) of this Section. In the event the property was acquired or constructed with 100% state funding, then this subsection shall not apply.

(d) Any purchases, leases or donations not finalized as of the effective date of this Act shall be subject to all the terms and conditions described herein."

Section 8. If any provision of this Act is held invalid, the other provisions of this Act shall not be affected thereby. If the application of this Act or any of its provisions to any person or circumstance is held invalid, the application of this Act and its provisions to other persons or circumstances shall not be affected thereby.

Section 7. Nothing contained in this Act shall be construed as repealing any section of Delaware law except as specifically provided in this Act.

Approved April 8, 1982.