CHAPTER 226

FORMERLY

HOUSE BILL NO. 444

AS AMENDED BY HOUSE AMENDMENT NOS. 1,2 AND 3

AN ACT TO AMEND TITLES 17 AND 29 OF THE DELAWARE CODE RELATING TO DELAWARE DEPARTMENT OF TRANSPORTATION ACQUISITION AND SALE OF REAL PROPERTY.

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

Section 1. Amend §9505, Title 29, Delaware Code by adding a new sentence at the end of §9505(2) to read as follows:

"The agency shall provide the owner with a copy of the agency's approved appraisal prior to initiation of negotiations for acquisition of the property."

Section 2. Amend §9505, Title 29, Delaware Code by adding new subsections (12) and (13) thereto to read as follows:

"(12) Purchase of title insurance in the acquisition of property by the Department of Transportation shall only be authorized upon written request of the Secretary of the Department with unanimous written approval of the co-chairs of the Joint Finance Committee, the Controller General and the Budget Director.

(13) When State funds are transferred into non State controlled escrow accounts in anticipation of property acquisitions by the Department of Transportation, the Department shall pursue the most cost-effective and timely means of effectuating said transfer of funds. Methods of funds transfer shall include, but not be limited to, the electronic transfer of funds.

Any funds escrowed for such purposes shall be subject to routine audit by the State Auditor."

Section 3. Amend §137, Title 17, Delaware Code, by striking subsection (b), (c) and (d) thereof and replacing it with a new subsection (b) to read as follows:

"(b) When any property heretofore or hereafter acquired by the Department by gift, devise, purchase or condemnation is no longer needed for transportation purposes the Department shall attempt to dispose of the property as follows:

(1) If at the time of the Department's determination to dispose of the property, the property is subject to a revenue producing lease agreement which has been in force for a period of at least five years, the Department shall, in writing, notify the tenant that the property is no longer needed for transportation purposes. Such notice shall inform the tenant of the Department's desire to sell the property, and include a copy of the Department's approved appraisal and a purchase agreement containing the terms and conditions for sale to the tenant. The sale price shall not be less than the approved appraised value. If the tenant elects to purchase the property, the tenant shall execute and return the purchase agreement to the Department within thirty days of such notice. Such notice is not required if the tenant has, in writing, waived any desire to purchase the property, or if the property is subject to multiple leases. Failure of the tenant to respond to the notice within thirty days shall constitute a waiver of the tenant's rights hereunder.

(0) If the provisions of paragraph (1) of this subsection do not apply, or were forfeited through lack of response, or were waived by the tenant, or the tenant fails to comply with the terms and conditions of the purchase agreement, the Department shall, in writing, notify the owner from whom the property was acquired, if the property had been acquired within the immediately preceding five years, that the property is no longer needed for transportation purposes. In the event that the previous owner is deceased, the Department may proceed with the provisions for sale identified in subsection (3) hereof. Such notice shall inform the prior owner of the Department's desire to sell the property at the approved appraised value, and shall include a copy of the Department's approved appraisal and a purchase agreement containing the terms and conditions for the sale to the prior owner. The sale price shall not be less than the approved appraised value. If the prior owner elects to purchase the property, he/she shall execute and return the purchase agreement to the Department within thirty days of such notice. Such notice is not required if the prior owner has, in writing, waived his/her right to repurchase the property. Failure of the prior owner to respond to the notice within thirty days shall constitute a waiver of their rights hereunder.

(3) If the provisions of paragraphs (1) and (2) of this subsection have been satisfied without sale, the Department shall determine if the property has independent utility and in such cases shall offer the property for sale to the general public at a public auction sale. The Department shall notify the public of the sale by posting a "Notice of Sale" on the property at least two weeks before the sale and by publishing a "Notice of Sale" for at least one day a week for two consecutive weeks in a newspaper having general circulation in the county where the property is located. The "Notice of Sale" shall describe the property to be sold, state the date, time, location of the sale, terms and conditions, and amount of the minimum acceptable bid. The public sale may be conducted by Department personnel or the Department may retain an outside contractor to handle the sale. At the conclusion of the sale, the Department's representative shall announce the name of the highest bidder and the amount of the bid. The Department's representative shall record the results of the sale including the name and amount of the next highest bid. The Department shall have the authority to accept or reject the highest bid as long as such bid is equal to or greater than eighty-five percent of the approved appraised value. The Department shall offer the property for sale at a price not less than eighty-five percent of the approved appraised value and shall reject any bid of a lesser amount. The Department may reject any bid for due cause. If the sale is confirmed and the highest bidder defaults, the Department may proceed to the next highest acceptable bidder. In the event that the Department does not receive an acceptable bid, the public sale shall be deemed concluded and the Department may proceed to market the property for sale in the open market for a price not less than eighty-five percent of the approved appraised value. In the event the property is not sold within twelve months of placing it for sale on the open market, then the Department may proceed to dispose of the property through absolute auction for whatever price can be obtained, subject, however, to unanimous written approval of the selling price from the Secretary of Administrative Services, the Controller General and the Budget Director.

(4) Notwithstanding any other provisions of this section, the Department may determine that the property has minimal independent utility for reasons such as, but not limited to, lack of access, irregular shape, poor topography or hydrology, small size and nominal value (less than $3,000.00 in the opinion of the Department's Chief Review Appraiser). In such event the Department may, without having to perform an appraisal of the property, sell or otherwise convey such property to an adjoining property owner or an organized community civic association or maintenance association for use as community open space at a price to be negotiated by the parties. In cases where more than one adjoining property owner indicates an interest in purchasing the property, the Department may elect to offer the property for sale via sealed bid to the highest bidder, or to divide the property to accommodate the interests of all interested owners.

(5) Notwithstanding any other provisions of this section, the Department may convey property by direct sale or trade to an owner of other property which is being acquired for transportation purposes. Such sale shall not abridge the provisions of paragraphs (1) and (2) of this subsection. The Department shall receive in return a price and/or compensatory property valued at not less than the approved appraised value.

(6) Notwithstanding any other provisions of this section, the Department may convey property by direct sale to a public utility company when such property is needed for public utility purposes, provided the Department receives in return a price not less than the approved appraised value.

(7)(a) Notwithstanding any other provisions of this section, the Department may convey property to other governmental entities for public purposes, on terms acceptable to the Department and other agency.

(b) Notwithstanding any other provisions of this section or the provisions of Chapter 9, Title 3, the Department may convey property to the Delaware Agricultural Lands Preservation Foundation on terms acceptable to the Department and the Foundation.

(c) Notwithstanding any other provisions of this section or the provisions of Chapter 75, Title 7, the Department may convey property to the Delaware Open Space Council on terms acceptable to the Department and the Council.

(8) As used in this subsection, "approved appraised value" shall mean:

(a) When the estimated value of the property is not more than $10,000, an appraisal performed by a qualified Department employee or qualified independent appraiser, reviewed and approved by a qualified Department review appraiser; or

() When the estimated value of the property exceeds $10,000, an appraisal performed by a qualified independent appraiser, reviewed and approved by a qualified Department review appraiser.

(9) Property rights disposed of pursuant to this Section may be in fee simple absolute or such lesser interest as the Department may deem appropriate.

(10) 'Notice', as required in paragraphs (1) and (2) of this subsection, shall be sent by certified mail, return receipt requested, addressed to the tenant or previous owner at the last known postal address obtained after diligent inquiry. If after diligent inquiry a postal address cannot be found, the Department shall publish a notice for at least one day a week for two (2) consecutive weeks in a newspaper having general circulation in the county in which the property is located. Such published notice shall set forth the name or names of the tenant or previous owner to whom it is directed, that the Department desires to sell the property, a brief description of the property to be sold, and the date by which the Department must receive a response. The return receipt of the notice, whether signed, refused or unclaimed, or a copy of the published newspaper notice shall be held and considered to be prima facie evidence of the service of the notice.

(11) The Department shall provide to the Governor and the General Assembly on or before December 31 of each year, a report identifying by size and location all properties being held for projects, properties deemed surplus or excess properties, dates of acquisition, purchase price, previous owner, date the property was determined to be excess and/or surplus, dates and nature of actions undertaken to dispose of such surplus/excess properties and approximate fair market value of each. If properties are deemed non-marketable they shall be identified as such. The report shall further identify all properties disposed of during the previous year by size and location, date of disposition, appraised value if appraised, amount received from disposition and name of the purchaser(s) or owners, including, but not limited to equitable owners."

Section 4. The State Treasurer, in cooperation with the development of the Integrated Management System (IMS), shall actively pursue the automation of the Electronic Funds Transfer (EFT) component of the system. At such time as the automated EFT component of IMS is activated, the Department of Transportation shall utilize such transfer capability unless it is deemed less cost efficient than alternative means of funds transfers.

Approved February 4, 1998