CHAPTER 211
FORMERLY
SENATE BILL NO. 457
AS AMENDED BY
SENATE AMENDMENT NO. 1
AN ACT TO AMEND CHAPTER 19, TITLE 14 OF THE DELAWARE CODE, TO PROVIDE FOR THE ESTABLISHMENT OF TAX RATES IN SCHOOL DISTRICTS CREATED AFTER FEBRUARY 1, 1978, BUT PRIOR TO JULY 30, 1978.
WHEREAS, the General Assembly wholeheartedly supports continued appeals and the prosecution of the pending appeal by the State Board of Education in the case of Evans v. Buchanan; and
WHEREAS,• the Court in Evans v. Buchanan on January 9, 1978 ordered that eleven school districts in northern New Castle County County be consolidated into one large school district and authorized the school board of the new district to levy and collect taxes for current operating expenditures upon the assessed value of real estate in such district up to a maximum authorized rate of $1.91 per $100 of assessed valuation; and
WHEREAS, in calculating the maximum rate of $1.91 the Opinion of the Court indicates that the decision to authorize a rate of up
to $1.91 was based, in part, on a desire to follow certain provisions of Delaware law; and
WHEREAS, the Court's Opinion in Evans v. Buchanan further states that "Authorization to set a school tax rate is properly a product of the political process" and that the Court is authorizing the school board of the new district to establish a tax rate not greater than the certain maximums specified by the Court "with the understanding that the Legislature can alter the parameters authorized" and further that "Because state political processes are preferred over even limited intervention by a Federal Court, the Delaware Legislature may raise or lower the tax authorization established here" (Evans v. Buchanan, January 9, 1978 Opinion at pages 98, 100-101); and
WHEREAS, the Court in Evans v. Buchanan cautions that "any Legislative action that lowers the established tax rate below a generally acceptable rate to a point at which the desegregation process would be imperiled will be received skeptically," and "the usual presumption of legislative regularity will not attach" (Evans v. Buchanan, January 9, 1978 Opinion at pages 100-101); and
WHEREAS, the Court in Evans v. Buchanan recognizes "that the beleaguered taxpayer ought to incur a tax increase beyond that absolutely essential for effective reorganization" (Evans v. Buchanan, January 9, 1978 Opinion at page 108); and
WHEREAS, the General Assembly is of the opinion that the provisions of Delaware law to which the Court in Evans v. Buchanan refers in authorizing a maximum tax rate for locally funded current operation expenditures of $1.91 per $100 of assessed valuation are not fair or appropriate as applied in this instance because those provisions in the present special and peculiar situation result in the imposition of an increase in the maximum authorized tax rate for locally funded current operating expenses in ten of the eleven component districts which increase is beyond that absolutely essential for effective reorganization of the eleven districts by the Federal Courts; and
WHEREAS, the General Assembly believes it is reasonable and appropriate to tie maximum authorized tax rates for locally funded current operating expenses for the new district or districts to the average locally funded per pupil expenditure level for current operating expenses in the eleven component districts involved in the Court consolidation because that average results from the composite of educational financial support decisions made by the eleven districts, rather than the decisions on educational financial support made by only one of eleven districts; and
WHEREAS, the General Assembly believes that it is reasonable and appropriate to fix maximum authorized tax rates for locally funded current operating expenses for the new district or districts at rates which will be designed to produce in total revenues one hundred ten percent (110%) of the aggregate or total amount obtained by multiplying such average locally funded per pupil expenditure level by the total number of public school pupils anticipated for each new district for the next succeeding school year; and
WHEREAS, the General Assembly does not intend by this legislation to impede or interfere with the desegregation process of the Federal Courts, but the General Assembly does desire to reduce the financial impact of such desegregation process upon the citizens in the•desegregation area as much as possible, consistent, however, with not imperiling or making ineffective such desegregation process; and
WHEREAS, the provisions of this Bill will therefore set a method of establishing a maximum authorized tax rate for locally funded current operating expenses for each new district which maximum authorized rate will be designed to produce in total revenues one hundred ten percent (110%) of the dollar product reached by multiplying (1) the average locally funded per pupil expenditure level for current operating expenses of the eleven component districts in the year in which the Federal Court is ordering consolidation by (2) the total number of public school students anticipated for each new district for the next succeeding school year; and
WHEREAS, the General 'Assembly believes that such a maximum authorized tax rate for locally funded current expenses does not lower the authorized maximum tax rate for locally funded current operating expenses in the new district below a generally acceptable rate nor to a point at which the desegregation process of the Federal Courts would be imperiled or rendered ineffective, and the General Assembly is advised that the Court's Opinion of January 9, 1978 indicates and suggests that the Court's view is similar; and
WHEREAS, the General Assembly believes that a fair and reasonable and adequate maximum authorized tax rate for locally funded current operating expenses for the new district might very well be less than such a rate which will be established by the provisions of this legislation, but in view of the cautionary language in the Court's Opinion quoted above, the General Assembly feels compelled to assure at this point in time that it not provide for such a rate lower than that provided for in this legislation, although the General Assembly believes (and is advised that the Court's Opinion indicates the Court believes) that the establishment of such a maximum authorized tax rate is most properly and preferably a function of the General Assembly; and
WHEREAS, although the General Assembly continues to believe that no unconstitutional segregation exists in the area ordered to be consolidated by the Court in Evans v. Buchanan and that no reassignment of students or changes in governance structure should be required by Court Order, the General Assembly recognizes that the Court Order, including its tax provisions, has the force of law and that the new district will be a reality for the next succeeding public school years until and unless the Court Order is stayed or reversed, and thus this legislation is necessary to avoid the possiblity of a current operating expenses tax rate of $1.91 per $100 of assessed valuation in the consolidated area; and
WHEREAS, it is the intent of the General Assembly that this legislation be adopted without prejudice to the appellate and legal positions and contentions of the Defendants in the case of Evans v. Buchanan, and the General Assembly is advised that the passage of this Bill with these Recitals to it and with the express reservation
of all legal and appellate contentions and positions of the Defendants in the case of Evans v. Buchanan will not jeopardize or adversely affect such contentions and positions, and it is only with such reservation and because of such advise that the General Assembly is enacting this legislation at this time, hereby declaring that it is enacted with such reservation and without prejudice to the appellate and legal positions and contentions of the Defendants in the case of Evans v. Buchanan.
NOW, THEREFORE:
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Subchapter I, Chapter 19, Title 14 of the Delaware Code, by adding a new §1924 thereto to read as follows:
§1924. Tax Rates in Districts Resulting from Consolidation Pursuant to Court Order or Created after February 1, 1978, but Prior to July 30, 1978
(a) For the purpose of this Section:
(1) The term reorganized school district shall mean any school district created by consolidation of whole existing school districts or parts of existing school districts or any combination thereof pursuant to Court Order or created by consolidation of whole exisiting school districts or parts of existing school districts or any combination thereof which occurs after February 1, 1978, but prior to July 30, 1978, except for consolidation of districts created specifically to administer a system of vocational and/or technical education.
(2) The term 'consolidated area' shall refer to a contiguous geographical area in which all school districts (except vocational technical school districts unless specifically included by the Court or the consolidation) are being organized into one or more reorganized school districts.
(b) The Interm Board of Education or Board of Education or other authority mandated by the Court or by this Title for each reorganized school district may annually set a tax rate for current operating expenses not greater than a maximum rate to be determined by the State Board
of Education in accordance with the following mathematical procedure:
(1) Determine the total aggregate dollar amount of local tax funded current operating cost expenditure in the school districts (except vocational technical school districts unless such districts are included in the consolidation) of the consolidated area in the year prior to consolidation. In determining such total amount the State Board shall take the known total aggregate dollar amount of local tax funded current operating cost expenditure in the fiscal year preceding the year prior to consolidation and shall adjust this amount to take into account historic annual percentage changes in such total dollar amounts.
(2) Calculate the average per pupil local tax funded operating cost expenditure by dividing the dollar amount determined in part (1) by the total number of students resident in the consolidated area who attend public schools of the districts (except vocational technical school districts unless such districts are included in the consolidation) within the consolidated area on September 30 of the year prior to consolidation.
(3) Multiply the per pupil figure determined in part (2) by the projected number of pupils expected to attend school in the reorganized school district in the first year of consolidation, such projected number to be determined by the State Board of Education by whatever tests or standards it finds appropriate.
(4) Determine the tax rate which, when multiplied by the total assessed value of all taxable real estate in the reorganized school district at the time the maximum is calculated, except taxable real estate which is exempt from county taxation, as determined and fixed for county tax purposes, would yield tax dollars collectible equal to 110 per cent of the total dollar amount determined in part (3).
(c) The maximum rate of tax authorized in accordance with subsection (b) hereof includes the percentage for delinquencies and costs of collection provided for in Section 1913 of this Title.
(d) The Interim Board of Education or the Board of Education or other authority mandated by the Court or by this Title for each reorganized school district may at an appropriate time during each fiscal year set a tax rate for debt service for the next fiscal year that shall be adequate to make the payments for principal and interest on debts evidenced by bonds or bond obligations of the reorganized district and bonds or bond obligations in each of the whole component school districts included in the reorganized district and for that fraction of the bond obligation of each component school district partially included in the reorganized district equal to the fraction of the assessed value (except taxable real estate which is exempt from county taxation, as determined and fixed for county tax purposes) of such partially included district located in the reorganized district.
(e) The Interim Board of Education or Board of Education or other authority mandated by the Court or by this Title for each reorganized school district may each fiscal year determine and set tax rates for tuition and for minor capital improvements for the next fiscal year.
(f) Each reorganized school district may annually levy and collect taxes at rates set in accordance with this section upon the assessed value of all taxable real estate in such district, except taxable real estate which is exempt from county taxation, as determined and fixed for county tax purposes. Whenever this section provides for a maximum rate of tax, the levy of any taxes in excess of such maximum rate of tax shall in all respects be subject to the provisions of this Subchapter, notwithstanding the provisions of this Section."
Section 2. If Evans v. Buchanan is reversed, in whole or in part, so that the eleven districts consolidated pursuant to the Court Order are permitted to regain their identity and status, the tax rates set by the reorganized school district or school districts shall not be authorized in the component districts, and the tax rates authorized in each of the eleven districts shall be the rates authorized prior
to the consolidation, until changed pursuant to the provisions of Title 14, Chapter 19, Subchapter I. Nothing herein is intended to invalidate any taxes levied pursuant to the authorization of Section 1 of this Act. Taxes levied pursuant to the authorization of Section 1 of this Act shall remain collectible.
Approved February 9, 1978.