CHAPTER 349

FORMERLY

HOUSE BILL NO. 757

AN ACT TO AMEND TITLES 9,22, AND 30 RELATING TO THE TAXATION OF REAL PROPERTY AND THE USES OF PROCEEDS THEREFROM AND TO MAKE A SUPPLEMENTAL APPROPRIATION TO THE STATE TREASURER FOR THE FISCAL YEAR ENDING JUNE 30, 1998 TO DEFEASE THE LAND AND WATER CONSERVATION TRUST FUND BONDS AT THE DIRECTION OF THE SECRETARY OF FINANCE.

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

Section 1. Amend § 5402 (a), Title 30, Delaware Code to insert after the phrase such document," the phrase "unless the municipality or county where the property is located has enacted the full one and one half percent realty transfer tax authorized by § 1601, Title 22 or § 8102, Title 9 of the Delaware Code, in which case 1 and /2 percent,".

Section 2. Amend § 5402(d), Title 30, Delaware Code to insert after the phrase "such document," the phrase "unless the municipality or county where the property is located has enacted the full one and one half percent realty transfer tax authorized by § 1601, Title 22 or § 8 1 02, Title 9 of the Delaware Code, in which case 1 and 1/2 percent,".

Section 3. Amend § 5421, Title 30, Delaware Code to delete subsections (1 ), (2), (3), (8), and (10) and to renumber the remaining subsections accordingly.

Section 4. Amend § 5422, Title 30, Delaware Code to delete the phrase "proceeds from the sale of revenue bonds,".

Section 5. Amend § 5423 (a), Title 30, Delaware Code to insert the word "and" between the second comma "," and "an" in the second sentence thereof and to delete the words "and a 'Revenue Account".

Section 6. Amend § 5423(b), Title 30, Delaware Code by denominating the existing text as subsection "(b)(1)", and by deleting the text of the last sentence of "(b)( I )" between the word "invaded" and the period ".".

Section 7. Amend § 5423(b), Title 30, Delaware Code to insert new subsections "(b)(2)" and "(b)(3)" to read as follows:

"(b)(2). At the close of each fiscal year, the State shall transfer $7.0 million of realty transfer taxes to the Endowment Account until such account reaches $60 million as hereinafter provided."

(b)(3). After the amount in the Endowment Account equals $60 million or on July 1, 2005, whichever occurs sooner, no further transfers of realty transfer taxes shall be made into the Endowment Account or the Project Account."

Section 8. Amend § 5423(c), Title 30 Delaware Code by denominating the existing text as subsection "(c)(1)" and by deleting the second sentence and replacing it with "The Project Account shall be funded by a transfer of $3.0 million of realty transfer taxes at the close of each fiscal year until such time as the Endowment Account reaches $60 million as heretofore provided, from other state funds as the General Assembly may from time to time determine, and from any other public and private sources which may from time to time be made available."

Section 9. Amend § 5423(c), Title 30, Delaware Code to insert a new subsection "(c)(2)" to read as follows:

"(c)(2). It is intended that property acquired or improved with funds from the Project Account shall remain in public outdoor recreation and conservation use in perpetuity. Said property may not be converted to other uses without a subsequent act of the General Assembly. If the General Assembly approved the sale or lease of any project or portion thereof, the State shall receive its pro rata share of net sale and/or lease income. Said funds shall be deposited in the Project Account to be immediately available for other projects."

Section 10. Amend § 5423(c), Title 30, Delaware Code to insert a new subsection "(c)(3)" to read as follows:

"(c)(3). The Secretary, in his discretion, may transfer up to an additional $1 million from the Project Account to the Earnings Account based on demand for acquisition and development of property for counties, municipal governments, and local park districts."

Section 11. Amend § 5423(e), Title 30, Delaware Code to delete it in its entirety.

Section 12. Amend §§ 5424-5425, Title 30, Delaware Code to delete them in their entirety.

Section 13. Amend § 8102(a), Title 9, Delaware Code to replace the phrase "1 percent" with the phrase "1 and 1/2 percent".

Section 14. Amend § 8102(c), Title 9, Delaware Code to delete it in its entirety and to replace it with a new subsection "(c)" to read as follows:

"(c). Any funds realized by a county pursuant to this section shall be segregated from the county's general fund and the funds, and all interest thereon, shall be expended solely for the capital and operating costs of public safety services, economic development programs, public works services, capital projects and improvements, infrastructure projects and improvements, and debt reduction."

Section 15. Amend Title 22, Delaware Code to add a new Chapter 16 entitled "Municipal Realty Transfer Tax" and by adding a new "§ 1601" as follows:

§ 1601. Realty Transfer Tax.

(a). Notwithstanding any statute or municipal charter to -the contrary, any municipality of this State shall have the power by ordinance to impose and collect a tax, to be paid by the transferor or transferee as determined by the municipality, upon the transfer of real property within the municipality; provided however, that any realty transfer tax which is imposed by any municipal government shall not be greater than 1 and 1/4 percent of the value of the real property as represented by the document transferring the property.

(b). The provisions of §§ 5401 and 5403 of Title 30 shall apply with respect to any realty transfer tax imposed by a municipal government pursuant to authority granted in this section.

(c). Any funds realized by a municipality pursuant to this section shall be segregated from the municipality's general fund and the funds, and all interest thereon, shall be expended solely for the capital and operating costs of public safety services, economic development programs, public works services, capital projects and improvements, infrastructure projects and improvements, and debt reduction."

Section 16. The sum of twelve million seven-hundred thousand dollars ($12,700,000) is hereby appropriated to the State Treasurer, Debt Management (12-05-03) for Fiscal Year 1998 Land and Water Conservation Trust Fund Bond Defeasance.

Section 17. The Secretary of Finance is hereby authorized on behalf of the State to apply funds herein appropriated to undertake a defeasance of Delaware Land and Water Conservation Revenue Bonds issued by the State of Delaware. The funds appropriated hereby shall be applied to the purchase of direct obligations of the U.S. Government, or other essentially risk-free securities to be deposited in trust to accomplish an "in substance" defeasance of said bonds in accordance with "Statement of Financial Accounting Standards No. 76, Extinguishment of Debt" which shall cause designated bonds to be deemed retired for the purposes of Chapter 54 of Title 30, Delaware Code, or to the transaction costs associated with accomplishing said defeasance.

Section 18. This Act is a supplementary appropriation- and the funds herein appropriated shall be paid to the State Treasurer from the General Fund of the State of Delaware from funds not otherwise appropriated.

Section 19. This Act shall not become effective until the later of the time: i) when the conditions permitting such reduction in the State's rate of transfer tax, as set forth in Title 30, § 5425 of the Delaware Code, are met with respect to the Series 1991 and Series 1993 State of Delaware Realty Transfer Tax Revenue Bonds (Land and Water Conservation Trust Fund Program) or ii) July 1, 1998. The Secretary of Finance is hereby directed to undertake and cause such conditions to be met as soon as possible after the enactment of this Act, and shall notify the counties and municipalities as soon as such conditions are met.

Approved July 1, 1998