Budget & Taxes

This bill allocates state funds to cover government operations for the fiscal year ending June 30, 2027, directly affecting all state agencies and departments. It establishes specific rules and limits on how these funds can be spent and updates related state laws to reflect these financial constraints. The legislation has been passed by both the Senate and the House of Representatives, moving it closer to becoming law.

This Act recognizes that the Public Education Funding Committee’s (PEFC) recommended hybrid model formula to determine public education funding is good public policy and that implementation of the hybrid model should not be delayed any longer than absolutely necessary. As such, this Act provides authority for the Department of Education (Department) to begin making the changes to systems that are necessary to implement the hybrid model for Fiscal Year 2028. This Act also encourages that, in collaboration with the PEFC, the Department incorporate elements of the hybrid model in the development of the Governor’s Recommended Budget for Fiscal Year 2028 for consideration by the 154th General Assembly. However, during this transition, a school district or charter school should not receive a state appropriation for Fiscal Year 2028 that is lower than the amount that school received in Fiscal Year 2027. The PEFC was established under Senate Concurrent Resolution No. 201 (152nd General Assembly) on June 27, 2024, and then re-established under House Concurrent Resolution No. 2 (153rd General Assembly) on January 21, 2025, to conduct a comprehensive review of public education funding for all students and populations served by school districts and charter schools (public schools) and develop a roadmap of recommendations to implement improvements to the public education funding system. The PEFC’s recommends adopting a new public education funding framework, known as the “hybrid model”, that combines the current, resource-based funding formula with a student-based, weighted funding model. The hybrid model will improve equity in public school funding and facilitate gains in student achievement by increasing flexibility in how public schools may use appropriated money. The PEFC recommendations include accountability measures as an important balance to the increased flexibility and that the equalization formula must be modernized.

This Act provides a roadmap via an observational study on a small but representative group of diabetic patients to change standard healthcare from current reactive “sick care” to proactive “well care”. This will be accomplished by using a Delaware health system combined with a technology partner to regularly test, measure and manage, and incentivize diabetic patients and their providers to improve the health outcomes for Delawareans and drive down healthcare costs. The length of the observational study will be 3 years. During that time, data analysis will track results to determine if this Pilot Program shall be renewed and expanded. This Act requires no fiscal note in that this Pilot Program is to be federally funded through the Federal Rural Health Transformation Program.

This Act amends the Town of Smyrna Charter as follows: (1) Authorizes the Town to impose school impact fees on new development and construction as long as the impact fees do not exceed the impact fee that would otherwise be imposed by Kent County or New Castle County on development in unincorporated areas. (2) Authorizes the Board of Elections, and not the Town Council, to hear and decide challenges that are raised to the qualifications of candidates for the office of mayor and council. (3) Specifies that a vacancy in a council seat caused by the council member being elected as mayor is to be filled by the Town Council if less than a year is left on the term or by a special election if more than 1 year is left on the term. (4) Clarifies the standards to be used when determining the domicile of a prospective voter or candidate for office. (5) Establishes a 3-year term of office for the Board of Elections and clarifies that a tie vote for an office shall be resolved by the toss of a coin. (6) Eliminates the requirement that the Town Council meet the first and third Monday of each month and authorizes the Town Council to determine the day and frequency of monthly meetings at the annual organizational meeting. (7) Revises the annual audit deadline from June 30 to August 31.

This Act removes the up to 10% increase in school property taxes allowed after reassessment This Act takes effect July 1, 2025, and applies to all public school tax rates after July 1, 2025.

HB 73 increases Delaware's maximum annual property tax credit for seniors from $500 to $1,000. This change directly benefits eligible Delaware seniors who pay property taxes by allowing them to receive up to $1,000 in tax relief each year. The bill amends specific sections of Delaware Code (Titles 14 and 29) to adjust the credit cap without altering eligibility requirements. This policy change provides greater financial relief for seniors with property tax burdens.

Chapter 35 of Title 19 prohibits an employer from improperly classifying an individual who is an employee as an independent contractor. Not only is this improper classification unfair to employees because it violates state and federal laws related to income tax withholding, unemployment insurance, wage laws, and workers’ compensation, it is also unfair to contractors who comply with Chapter 35 and these other employment laws. When employers who violate Chapter 35 are subcontractors who have not registered as contractors as required under Chapter 36 of Title 19, the Department of Labor (Department) has no recourse for enforcing compliance with Chapter 35. This Act makes a general contractor responsible for a subcontractor’s compliance with Chapter 35 by making the general contractor jointly and severally liable for restitution and penalties assessed against the subcontractor. This Act also allows the Department to deny, suspend, or revoke the certificate of registration of a contractor who contracts with a subcontractor who has not registered on any project. In addition, Section 3 of this Act makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.

In Chapter 70, Subchapter V of Title 25, the Manufactured Home Relocation Trust Fund was established. It is administered by a Board of Directors. The Board was directed to set a monthly assessment for deposit in the Trust Fund for each rented lot in a manufactured home community. This Act removes the cap of the Trust Fund, currently set at $15 million. This Act also raises the amount of the tenant portion of the monthly assessment to be redirected to the Delaware Manufactured Home Owner Attorney Fund from 50 cents of the tenant portion to $1.50. This Act takes effect on the date of enactment.

This Act establishes an independent and nonpartisan Office of the Inspector General (OIG) and the position of the Inspector General. Under this Act, the OIG would be unique in state government as a non-political agency with a sole mission to investigate and prevent fraud, waste, mismanagement, corruption, and other abuse of governmental resources. The OIG will protect the health and safety of Delaware residents, assist in the recovery of misspent or inappropriately paid funds, and strengthen government integrity and the public trust in government operations by doing all of the following: 1. Investigating the management and operation of state agencies to determine if there has been waste, fraud, abuse, mismanagement, corruption, or other abuse of governmental resources that is harmful to the public interest, including the General Assembly’s management of governmental resources and routine administrative operations, such as requirements related to employment practices and procurement. The OIG authority in regard to the General Assembly is limited under the Delaware Constitution and thus cannot include the General Assembly’s legislative functions or disciplinary authority which are governed by the Delaware Constitution and the rules of proceedings adopted under § 9 of Article II of the Delaware Constitution. 2. Coordinating with other investigative and law-enforcement agencies, including the Attorney General and the Auditor of Accounts (Auditor). 3. Recommending corrective actions and statutory revisions, and, if necessary, make referrals to other law-enforcement agencies. 4. Providing reports to the Governor, Attorney General, and General Assembly, and these reports will be available to the public on the OIG website. The Inspector General will not duplicate the work of the Auditor, Attorney General, Public Integrity Commission, or other investigative or law-enforcement agencies and will work collaboratively, including through memoranda of understanding, with these agencies for the purposes of efficiency and coordination. Specifically, the Inspector General can be distinguished from these agencies as follows: • Under the generally accepted government auditing standards in the Yellow Book produced by the U.S. Government Accountability Office, both financial and performance audits are only designed to detect fraud, illegal activity, noncompliance, abuse, and waste. An auditor determines whether the subject matter meets criteria, reaches reasonable assurance, and follows directive standards. If an auditor detects fraud or other bad behavior, they must report it to an investigation agency. • The OIG will be an entirely independent investigation agency, charged with gathering evidence to identify the individual responsible for the bad behavior identified through an audit and prove that it occurred. For complaints the received from other sources, the OIG will investigate to determine if there is or has been bad behavior. In addition to proving instances of bad behavior, these investigations may also prove that an allegation is false or incorrect. • The OIG will not duplicate the work of existing ombudsperson offices because the OIG is primarily concerned with detecting and preventing fraud, waste, mismanagement, corruption, and abuse of governmental resources while ombuds programs are concerned with violations of the rights and treatment of specific populations. • If the OIG believes, based on an investigation, that there has been or continues to be significant problem regarding fraud, waste, mismanagement, corruption, or evidence of a crime, the Inspector General must report the finding to the Department of Justice (DOJ). If the DOJ does not take action on a referral, the OIG may pursue a civil action on behalf of the State. • The OIG will be unique in State government because the Inspector General is not elected and will be an entirely independent agency. The Inspector General will be selected through a process that requires a Selection Panel to provide 3 names to the Governor for consideration. The Governor will select a nominee from these 3 names for appointment as Inspector General and submit the nominee to the Senate for confirmation. Once confirmed, the Inspector General serves a term of 5 years. In addition, the DOJ is not responsible for providing legal advice, counsel, services, and representation to the OIG. In other states, the financial impact of investigations by the Office of Inspector General has exceeded the annual budget for that office by millions of dollars. Some examples of conduct that have been identified in states where an Inspector General has responsibilities similar to those under this Act include the following: • In Georgia, an agency administrator who faked multiple pregnancies, receiving 265 hours of leave for which she was not otherwise eligible to receive. • Massachusetts has recovered more than $245,000 from 13 former troopers within the State Police for overtime pay they received for hours they did not actually work. • In Indiana, a Department of Child Services worker was found to have falsified case notes regarding child welfare assessments. • In Louisiana, state agencies were found to have wasted more than $500,000 in non-refundable airline tickets that were allowed to expire and lose value. Under this Act, the selection process for the Inspector General begins within 60 days of enactment. This Act also makes corresponding clarifications to existing law and technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.

This Act requires the tax collecting authority of each county, in the first tax year following a general reassessment, to allow the payment of school taxes under a payment plan of at least 3 equal installments for a residential taxpayer, in a primary residence, whose tax bill increases by $300 or more over the prior year. No late fees, interest, or penalties may be assessed to a taxpayer who enters and complies with a payment plan. The Act also reduces late payment penalties for school taxes in New Castle County to 1% per month, the current penalty for late payment in Kent and Sussex. This Act sunsets 3 years after its enactment into law.