CHAPTER 6

FORMERLY

HOUSE BILL NO. 42

AS AMENDED BY HOUSE AMENDMENT NOS. 2, 3 AND 4

AN ACT TO AMEND TITLE 14 OF THE DELAWARE CODE RELATING TO SCHOOL PROPERTY.

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

Section 1. Amend 14 Del. C. §1056(e) by deleting the first sentence thereof in its entirety and inserting in lieu thereof the following:

"A school board shall permit the use of property under its jurisdiction free of charge, except, however, for the expense of custodial salaries, heating and lighting in excess of the school's normal operations, whenever the entity seeking to use the property is an educational, cultural, civic, political or recreational entity, organized or operating primarily within the boundaries of the district, provided there is no monetary gain to the individuals or organization using such property as a result of such use, except as provided for in subsection (d)(4) of this section."

Section 2. Amend 14 Del, C. §1056(e) by deleting the phrase "determined by a school board, subject to the approval of the State Board of Education" and all text that follows through the end of Subsection (e), and by inserting in lieu thereof the following:

"adopted by a school board in accordance with the applicable provisions of this title and Title 29. All such fees collected by a school board shall be retained by the school district to be used as local funds for any permissible educational purpose."

Section 3. Amend 14 Del. C. §1057(b) by deleting Subsection (b) in its entirety, and by inserting in lieu thereof the following:

"(b)(1) Notwithstanding any provision of §1056 of this title, when any real property or part thereof of any reorganized school district is not then deemed necessary 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. The leasing person or organization 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.

(2) Any funds raised from rent or charges collected by the school district on any lease for a period of ten years or less shall be retained by the school district to be used as local funds for any permissible educational purpose. Any funds raised from rent or charges collected by the school district on any lease for a period of more than ten years 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 paragraph (15) of subsection (a) of this section.

(B) Notwithstanding the provisions of paragraph (A) of this subsection, in the that there is any outstanding, unpaid, bonded indebtedness held by the State with respect to the building or grounds leased by a local district in accordance with the provisions of this section, or any identifiable portion thereof, a pro-rated portion of the lease proceeds in excess of the cost of custodial salaries and utilities associated with the lease shall be turned over to the State Treasurer during any period of the lease that the bonded indebtedness held by the State remains outstanding and unpaid. The amount of such excess lease revenues payable to the State shall be equal to the lesser of: 1) the actual debt service payable by the State during any period covered by the lease, or 2) the amount of the excess revenues generated by the lease during any period that the bonded indebtedness held by the State remains outstanding and unpaid multiplied by a fraction equal to the State share in the major capital project or projects for which the outstanding, unpaid, bonded indebtedness was originally issued. In the event that the outstanding, unpaid bonded indebtedness relates only to an identifiable portion of the leased facility, the amount payable to the State Treasurer shall be the amount calculated in accordance with the preceding sentence multiplied by a fraction, the numerator of which shall be the gross square footage of the identifiable portion of the leased facility which is included in the lease, and the denominator of which shall be the gross square footage of the entire identifiable portion of the leased facility to which the outstanding, unpaid bonded indebtedness relates.

(3) Before leasing such property or part thereof to any person or organization for any period in excess of twelve (12) months, and before renewing any existing lease where the original term was for twelve -(12) months or less but the original term(s) together with the proposed renewal period(s) will exceed twelve (12) months:

(A) The school district board of education shall first offer to lease the property to State agencies. If, as a result of the public hearing, sufficient objections to the use of the property by a State agency have been raised, then the school district board of education may refuse to lease to a State agency.

(B) If no agency of State government declares an intent to lease the property within 30 days of the offer, or if the lease by a requesting State agency is denied, the school district board of education shall offer to lease the property to the local government in whose jurisdiction the property is located. If, as a result of the public hearing, sufficient objections to the use of the property by the local government have been raised, then the school district board of education may refuse to lease to the local government.

(C). If such local government does not declare an intent to lease the property within 30 days of the offer, or if the lease by a requesting local government is denied, the school district board of education may proceed either to offer to lease the property on the open market or enter into an agreement with a lessee, the terms of which are supported by an independent appraisal. If, as a result of the public hearing, sufficient objections to the use of the property by such third party lessee have been raised, then the school district board of education may refuse leasing to such third party lessee.

(4) No lease of property pursuant to this subsection shall be negotiated until the school district board of education has complied with the procedures set forth in Paragraphs (1) through (5) of Subsection (a) of this section.

(5) No lease of property pursuant to this subsection shall be entered into unless the proposed use of the property is compatible with the characteristics of the neighborhood in which the property is located.

(5) Should a school district contract with any person or organization to lease a classroom building during the regular school year, and specifically during normal operating hours, the State of Delaware shall not be obligated to build or construct any additional space that may be needed by the school district as a result of entering into such lease."

Approved February 11, 1997