HOUSE SUBSTITUTE NO. 1
HOUSE BILL NO. 1
AN ACT TO AMEND TITLE 14 AND TITLE 29 OF THE DELAWARE CODE RELATING TO EDUCATION, THE ESTABLISHMENT OF A SCHOOL PROPERTY TAX REDUCTION PROGRAM AND SCHOOL CONSTRUCTION CAPITAL IMPROVEMENTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1. Amend §6102, Title 29 of the Delaware Code by adding to said section a new subsection (r) to read as follows:
(1) A special fund of the State is created in the Department of Finance to be known as the “Education Expense and Property Tax Relief Fund” to which shall be deposited $17.5 million received in any revenue source not otherwise committed to a special fund, from which shall be paid education-related expenses and tax claims made under this subsection. Should claims against this fund exceed $17.5 million, the Secretary of Finance, with the approval of the Budget Director and Controller General, may transfer from the general contingency line in the Department of Education to the Education Expense and Property Tax Relief Fund the amount of such reasonably foreseen additional claims.
(2) Sums authorized by this subsection shall be allocated such that, when considered in combination with other monies appropriated therein, total funds available for each school district and each special school shall be done consistent with §1707 of Title 14 of the Delaware Code adjusted as follows:
(i) School district current expense revenue for the purposes of these funds shall be as defined by §1707(b)(8), Title 14 of the Delaware Code except that it shall exclude tuition tax expenditures for the local cost of private placement/unique alternative programs and Part I of the Student Discipline Program.
(ii) State average effort as defined in §1707(b)(10) of Title 14 of the Delaware Code shall be the authorized amount times 61.6% divided by the State average ability.
(iii) In §1707(c) and §1707(d) of Title 14 of the Delaware Code, the number “.72” shall be replaced with “.616”.
(iv) For the monies allocated under this subsection, the limitation contained in §1707 that precludes any districts from receiving more than 110% of the per unit allocation shall not apply.
(v) Notwithstanding the provisions of this subsection, no local school district with less than average ability as defined by §1707 of Title 14 shall receive an allocation from this fund that is less than $125,000. This provision shall not apply to state administered special schools.
The final allocation of these monies shall be approved by the Budget Director and the Controller General each fiscal year. Any balance remaining in the Education Expense and Property Tax Relief Fund at the conclusion of any fiscal year shall revert to the General Fund.
(3) Funds received pursuant to this Act may be used by local school districts to increase support for education including, but not limited to, computer hardware and software, library resources and other instructional materials, and minor capital improvements to school facilities, or to offset, and thereby allow reduction of, local current expense taxes on residential properties in those districts to the extent that monies received under this section would be or would raise the effort index, if allocated through §1707 of Title 14, of the local school district above 1.00 or the local current expense effort plus their share of equalization funds under §1707 of Title 14 raises more than $27,000 per unit. Notwithstanding any of the foregoing to the contrary, funds received pursuant to this Act shall not be used for major capital improvements or debt service.
(4) Local school boards shall develop a plan for using monies received pursuant to this Act, provide appropriate and reasonable public notice and comment on the proposed plan, and approve the plan through majority vote of the whole school board. Local school boards shall submit the approved plan to the Secretary of Education, the Budget Director, and the Controller General. Local school boards and all other responsible parties under this paragraph are hereby directed to undertake and cause such conditions to be met as soon as practicable after the enactment of this Act, but in no event later than October 30, 1999, and shall notify the Secretary of Education, the Budget Director, the receiver of taxes and county treasurer, and the Controller General as soon as such conditions are met.
(5) To the extent that local school districts are eligible to reduce local current expense taxes on residential properties under paragraph (3) of this subsection, and the local school board approves the reduction pursuant to paragraph (4) of this subsection, the local school districts shall report to the receiver of taxes and county treasurer the change in current expense tax rate (in terms of cents per $100 of assessed value) on residential property in the district equal to the value of the tax reduction approved by the local school board. The receiver of taxes and county treasurer shall apply the change in current expense tax rate before any property tax reduction under §1917(c) of Title 14.
(6) For tax years beginning on or after May 1, 1999 and before May 1, 2000, each receiver of taxes and county treasurer shall, no later than January 31, 2000, submit a list to the Secretary of Finance of taxpayers living in local school districts that have authorized reduction in current expense tax rate pursuant to this subsection, the amount of school tax paid by said taxpayer and the school tax that would have been due taking into account the authorized reduction approved by the local school board under this subsection. For tax years beginning on or after May 1, 2000 and each year thereafter, local school districts shall report to each receiver of taxes and county treasurer the current expense tax rate taking into account any reductions authorized pursuant to this subsection.
(7) For tax years beginning on or after May 1, 1999 and before May 1, 2000, the Secretary of Finance shall refund to taxpayers living in local schools districts that have authorized reduction in current expense tax rate pursuant to this subsection an amount equal to the school tax paid by said taxpayer less the school tax that would have been due taking into account reductions authorized pursuant to this subsection. The Secretary of Finance may use an amount from the Education Expense and Property Tax Refund Fund established pursuant to this subsection to offset administrative costs up to 5% of the value of credits claimed, but not to exceed $100,000.
(8) The Secretary of Finance may promulgate such rules and regulations and prescribe such forms and reports as the Secretary of Finance shall deem necessary to implement this subsection.”.
Approved August 05,1999