Sen. Ray Seigfried

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 is a substitute for and differs from Senate Bill No. 202 by requiring only New Castle County to prepare and submit reports on a quarterly basis. The substitute bill also replaces language of the original bill that referenced property parcels “sold” and their “purchased value” with more precise terms consistent with language used on the realty transfer tax return such as “consideration.”

This Act establishes a new state-level Department of Veterans Affairs led by a cabinet-level Secretary to advocate for and administer programs relating to veterans in the State of Delaware. It is the intent of this legislation that current staff of the Delaware Commission of Veterans Affairs and the Office of Veterans Affairs will continue their work, but as part of the new Department of Veterans Affairs, with the potential for expanded staff and duties in accordance with annual appropriations. The Department will hire veterans wherever possible. The Commission of Veterans Affairs will continue in its current form. It will continue to oversee the Delaware Veterans Home and will serve in an advisory role to the new Secretary and Department on other matters relating to veterans. The new Department is tasked with developing and proposing strategies for the provision of alternative elder care or the establishment of one or more additional veterans homes to serve the aging veteran population. House Substitute No. 1 to House Bill No. 1 differs from the original in that the Department of Veterans Affairs will for the present remain a part of the Department of State for budgetary, administrative, and operational purposes. The Secretary of Veterans Affairs, in consultation with other executive branch officials, is directed to develop a transition plan to separate from the Department of State and operate as a separate Department by July 1, 2030, or such time as there will be no negative impacts to the funding for veterans programs in Delaware. The plan must be presented to the General Assembly as a Transition Report and approved through a concurrent resolution.

This Senate Concurrent Resolution calls for an immediate review of the recent statewide property reassessment by the members of the General Assembly, in collaboration with state, local, and school district officials, to develop legislative and operational measures that ensure future reassessments are conducted fairly, transparently, and equitably.

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.

This Act codifies Delaware’s longstanding common law recognition of the authority of Delaware counties and municipalities to separately tax different classes of real property if the classification is reasonable and, under § 1 of Article VIII of the Delaware Constitution, the tax rates are uniform for all real property in each classification. See Green v. Sussex County, 668 A.2d 770, 776 (Del. Super. Ct. 1995), aff’d 667 A.2d 1319 TABLE (Del. 1995); Aetna Cas. & Sur. Co. v. Smith, 131 A.2d 168, 177-78 (Del. 1957); Phila. B & W R. Co. v. Mayor & Council of Wilm., 57 A.2d 759, 765-66 (Del. Ch. 1948); Conrad v. State, 16 A.2d 121, 125-26 (Del. 1940). As this Act is a codification of longstanding authority of taxing authorities to separately tax different classes of real property, Section 5 of this Act makes clear that this Act applies to county tax rates retroactively and prospectively.

This Act allows any school district located in New Castle County to reset its tax rates for the 2025-2026 tax year and to reissue a tax warrant using different residential and non-residential tax rates. The non-residential tax rate must be at least equal to the residential tax rate and may not be more than 2 times the residential tax rate. The total amount of revenue projected to be collected through use of the residential and non-residential tax rates may not exceed the total amount of revenue the district was projected to collect under its original tax warrant. The districts have 10 business days from the enactment of this Act to reset the rates and issue a new tax warrant to New Castle County. Upon receipt of a new tax warrant, New Castle County will supplement any tax bill already issued for taxpayers in that district and adjust tax bills with an extended deadline for payment of October 30, 2025 for tax bills that change. For any taxpayer who submits payment under the original tax bill and whose total school tax liability is adjusted downward, the difference will be credited against future tax liability unless the taxpayer submits a written request for a refund, in which case New Castle County shall issue a refund. A school district that resets its rates in accordance with this Act may request and borrow from State Division I funds in the event of a cash flow shortfall of local school funds due to the extension of the deadline for tax payments for the 2026 fiscal year.

This Act requires a county to issue a refund to a taxpayer for property tax determined to have been overpaid for that year after an assessment appeal if the amount is $50 or greater. A county may elect to refund or credit the amount against future taxes due when the overpayment is less than $50. Amounts in school taxes determined to have been overpaid by a taxpayer after an assessment appeal will be refunded by the county following the same rule.

Section 1 of this Act requires modifications to exemptions from county taxation to reasonably reflect changes in property value and inflation. This Act also requires New Castle County to use the same eligibility criteria and calculation formula for exemption from school taxes that it used for county taxes as of June 1, 2025. Section 2 of this Act provides that upon passage of House Bill No. 242 of the 153rd General Assembly, the expanded school tax exemption will be applied during the 2025-2026 tax year in any New Castle County School district that reissues its tax warrant in accordance with House Bill No. 242.

This Act authorizes school districts to set different tax rates for residential and non-residential property. The non-residential rate must be at least as great as the residential rate and may be no more than twice the residential rate. The school district must set both rates so that it is not realizing any more revenue than it was authorized to collect by law if it were using a single tax rate. This Act also makes a change to the additional amount a school board may approve to the tax rate to account for delinquencies and costs of collection. Under current law a school board is required to add 10% to its authorized tax rate for delinquencies and costs of collection. This Act allows, but does not require, a school board to add up to 10% to its tax rate for delinquencies and costs of collection. Technical corrections are also made to align these sections with the Delaware Legislative Drafting Manual.