CHAPTER 256

FORMERLY

SENATE SUBSTITUTE NO. 1

FOR

SENATE BILL NO. 1

AN ACT TO AMEND TITLES 14 AND 29 OF THE DELAWARE CODE RELATING TO SCHOOL TAXES

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 (q) to read as follows:

"(q)

(1) A special fund of the State is created in the Department of Finance to be known as the “Elderly Property Tax Relief and Education Expense Fund” to which shall be deposited $13 million received in any revenue source not otherwise committed to a special fund, from which shall be paid claims made under this subsection and § 1919 of Title 14. Should such claims exceed $13 million during any fiscal year, 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 Elderly Property Tax Relief and Education Expense Fund the amount of such reasonably foreseen additional claims. Any balance remaining in the Elderly Property Tax Relief and Education Expense Fund at the conclusion of any fiscal year shall revert to the General Fund.

(2) Sums appropriated pursuant to this Act shall be allocated to school districts using a method that recognizes factors including, but not limited to, the number of primary residential households owned by persons 65 or over in each school district, the relative value of residential property owned by persons 65 and over, the relative property values of each school district, the school tax rates of each school district, and the average rate of application for tax relief pursuant to this Act. The final method and allocation of these monies shall be approved by the Secretary of Finance, in consultation with the Controller General.

(3) Local school boards shall decide, through majority vote of the whole school board, whether to authorize a credit against taxation imposed pursuant to Chapter 19 of Title 14 on the valuation of any qualified property, as defined herein, owned by a person who, as of the beginning of the tax year, is of the age of 65 or more. The maximum such credit shall be the lesser of 50% of such tax remaining after taking into account any exemption pursuant to Title 9 and Title 22; or $500. The receiver of taxes and county treasurer shall apply such credit after any change to the current expense tax rate pursuant to §6102 of Title 29. Shall the local school board decide to authorize less than the maximum amount of credit against taxation, the local school board shall develop a plan for using monies received pursuant to this subsection, provide appropriate and reasonable public notice and comment on the proposed plan, and approve the plan through majority vote of the local school board. Local school boards shall submit the approved plan to the Secretary of Finance, the Secretary of Education, the Budget Director, and the Controller General. In the event that local school boards choose not authorize the aforementioned credit against taxation, the sums appropriated herein will result in increased State funding for education-related expenses of the school districts. Education-related expenses for the purposes of this subsection shall be defined as including, but not limited to, computer hardware and software, library resources and other instructional materials, and minor capital improvements to school facilities. 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 Finance and the Controller General as soon as such conditions are met. 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.”.

Section 3. Amend § 1917(a), Title 14 of the Delaware Code, by striking the first sentence of said subsection in its entirety and substituting in lieu thereof the following sentence: "The receiver of taxes and county treasurer shall collect school taxes in the same manner and at the same time as provided by law for the collection of taxes for other purposes, and, except as provided in subsection (c) of this section, shall allow no abatement or discount upon any taxes levied for school purposes required to be collected by them.".

Section 4. Amend § 1917, Title 14 of the Delaware Code, by adding to said section a new subsection (c) to read as follows:

"(c)

(1) If authorized by majority vote of the whole school board of the local school district pursuant to §6102(q) of Title 29, there shall be allowed a credit against taxation imposed pursuant to this chapter on the valuation of any qualified property. For purposes of this subsection, ‘qualified property’ shall mean property owned and occupied as a dwelling by, and as the principal residence of, a qualified person. A ‘qualified person’ is a person who, as of the beginning of the tax year, is of the age of 65 or more. The maximum such credit authorized by vote of local school boards shall be the lesser of:

(A) 50% of such tax remaining after taking into account any exemption pursuant to Title 9 and Title 22 and any tax reduction pursuant to §6102 of Title 29; or

(B) $500.

The receiver of taxes and county treasurer shall apply such credit after any change to the current expense tax rate pursuant to §6102 of Title 29.

(2) No credit against taxation on the valuation of real property as provided in this subsection shall be allowed except in accordance with a form of written application prescribed by the Secretary of Finance in consultation with the receiver of taxes and county treasurer and provided by the receiver of taxes and county treasurer for use by the claimants under this subsection. Such application shall be filed with the receiver of taxes or county treasurer as follows:

(A) For tax years beginning on or after May 1, 1999, but before May 1, 2000, in accordance with rules and deadlines established by the Secretary of Finance ; and

(B) For all subsequent tax years, no later than the date of application for similar tax exemption programs for persons 65 and over offered by the county in which the qualified property exists.

(3)

(A) Where title to property on which a credit is claimed is held by claimant and another or others, either as tenants in common or as joint tenants, claimant shall not be allowed a credit against his interest in said property in excess of the assessed valuation of his proportionate share in said property, which proportionate share, for the purposes of this subsection, shall be deemed to be equal to that of each of the other tenants, unless it is shown that the interests in question are not equal, in which event claimant's proportionate share shall be as shown.

(B) Nothing in this subsection shall preclude more than 1 tenant, whether title be held in common or joint tenancy, from claiming a credit against the property so held, but no more than the equivalent of 1 full credit in regard to such property shall be allowed in any year, and in any case in which the claimants cannot agree as to the apportionment thereof, the credit shall be apportioned between or among them in proportion to their interests. Property held by husband and wife, as tenants by the entirety, shall be deemed wholly owned by each tenant, but not more than 1 credit in regard to such property shall be allowed in any year.

(C) Right to claim a credit under this subsection shall extend to property the title to which is held by a partnership to the extent of the claimant's interest as a partner therein, and by a guardian, trustee, committee, conservator or other fiduciary for any person who would otherwise be entitled to claim a credit under this subsection, but not to property the title to which is held by a corporation.

(4) The Secretary of Finance may, in consultation with the receiver of taxes and county treasurer, promulgate such rules and regulations and prescribe such forms as the Secretary shall deem necessary to implement this subsection. The Secretary may require that any return or other writing required to be filed with respect to the credit allowed under authority of this subsection be signed by the maker of such return or writing under oath or affirmation, subject to the penalties of perjury.

(5) An aggrieved taxpayer may appeal from the disposition of a claim for credit under this subsection in the same manner as provided for appeals from property tax assessments generally.

(6) Whenever the Secretary of Finance shall determine that a credit has been claimed in disregard of the conditions under which such claims may be made and for which he has authorized payment under § 1919(c) or § 1919(d) of this Title, the Secretary may assess such claimant for the amount of the credit and, unless it is shown that such disregard is due to reasonable cause and not due to willful neglect, with a penalty of 20% of the credit claimed along with interest at 1% for any month or fraction of a month commencing on the date on which the claim for credit was filed.".

Section 5. Amend § 1919, Title 14 of the Delaware Code, by adding to said section a new subsection (c) to read as follows:

“(c)

(1) For tax years beginning on or after May 1, 1999, but before May 1, 2000, each receiver of taxes and county treasurer shall, in accordance with rules and deadlines established by the Secretary of Finance, report to the Secretary of Finance the amount of credits allowed under § 1917(c) for the current tax year. Credits shall be allowed and reported to the Secretary of Finance only in the event the claimant has paid the school tax due for the tax year.

(2) The Secretary of Finance shall, after receiving the report required under paragraph (1) of this subsection, pay over to each receiver of taxes and county treasurer an amount from the Elderly Property Tax Relief and Education Expense Fund established pursuant to § 6102(q) of Title 29, Delaware Code, to offset administrative costs to each county an amount up to 5% of the value of credits claimed, but not to exceed $50,000. The Secretary of Finance may use an amount from the Elderly Property Tax Relief and Education Expense Fund established pursuant to §6102(q) of Title 29, Delaware Code to offset administrative costs up to 5% of the value of credits claimed, but not to exceed $50,000.

(3) 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 qualifying and approved for the credit under § 1917(c) of this Title, the amount equal of the school tax paid by said taxpayer, and the school tax that would have been due taking into account the credit under § 1917(c), along with such other information as deemed appropriate by the Secretary of Finance.”.

(4) For tax years beginning on or after May 1, 1999 and before May 1, 2000, the Secretary of Finance shall refund to taxpayers qualifying and approved for the credit under §1917(c) of this Title an amount equal to the school tax paid by said taxpayer less the school tax that would have been due taking into account the credit under §1919(c).

(5) 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.”.

Section 6. Amend § 1919, Title 14 of the Delaware Code, by adding to said section a new subsection (d) to read as follows:

"(d) For tax years beginning on or after May 1, 2000, each receiver of taxes and county treasurer shall, once each calendar month, report to the Secretary of Finance the amount of credits allowed under § 1917(c) of this Title which have not been previously reported to the Secretary, and such reports shall contain such further information and in such form as the Secretary shall prescribe. Credits shall be allowed and reported to the Secretary of Finance only in the event the claimant has paid the school tax due for the tax year determined after taking into account the credit provided by §1917(c). The Secretary shall pay over to the State Treasurer, no later than 30 days following receipt of such report, an amount from the Elderly Property Tax Relief and Education Expense Fund established pursuant to § 6102 (q) of Title 29, Delaware Code equal to the allowable credits which shall be deposited into a separate account in the depository for other school moneys to the credit of the district.".

Section 7. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to that end the provisions of this Act are declared to be severable.

Approved August 05,1999