(a) Any school district which provides funds from local taxation for current operating expenses in excess of basic state appropriations, under Divisions I and II of this chapter, shall be eligible for state funds on a matching basis in accordance with this section.

(b) In the application of the formula, the following definitions shall apply:

(1) “Ability index” means the school district ability divided by the state average ability. In the case of a school district created under the provisions of § 1028(k) of this title, 2 ability indices shall be computed. “Tax district ability index” shall be computed by dividing the tax district ability by the state average ability. “Individual district ability index” shall be computed by dividing the individual district ability by the state average ability.

(2) “Authorized amount” means $29,650 for fiscal year 2006 and as established in the annual State Budget Appropriation Act thereafter.

(3) “Effort index” means the school district effort divided by the state average effort. The effort index for any school district shall not be greater than 1.00. In the case of a school district created under the provisions of § 1028(k) of this title, 2 effort indices shall be computed. “Tax district effort index” shall be computed by dividing the tax district effort by the state average effort. “Individual district effort index” shall be computed by dividing the individual district effort by the state average effort.

(4) “Local district effort index” applies only to school districts created under the provisions of § 1028(k) of this title and means the lesser of 1 minus the tax district effort index or the individual district effort index, but shall be a number at least equal to zero.

(5) “School district ability” means the total full valuation of all taxable real property within the school district as of July 1 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated, divided by the number of units of pupils, excluding those units in special schools administered by a school district which are supported by a tuition tax, in the public schools of the school district as of September 30 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated. In the case of a vocational-technical school district, the school district ability shall be determined by dividing the total full valuation of all taxable real property located within the vocational-technical school district by the total number of units in the public schools located in the vocational-technical school district’s attendance area, excluding those units assigned to special schools as defined herein and those units assigned to the vocational-technical school district, as of September 30 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated. In the case of a school district created under the provisions of § 1028(k) of this title, 2 school district abilities shall be computed. “Tax district ability” shall be computed by dividing the total full valuation of all taxable real property located in the school tax district in the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated, by the number of units of pupils, excluding those units in special schools administered by all school districts in the school tax district, in the public schools of the school tax district as of September 30 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated. “Individual district ability” shall be computed as specified in the first sentence of this paragraph.

(6) “School district current expense revenue” means the product of the school district’s current operating expense real estate tax rate times the total assessed valuation as of July 1 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated, plus the product of the school district’s capitation tax for current operating expense, times the number of capitations as of July 1 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated. In the case of a school district created under the provisions of § 1028(k) of this title, 2 values for current expense revenues shall be computed “Tax district current expense revenue” shall be computed by multiplying the current operating expense real estate tax rate for the school tax district by the total assessed valuation of the school tax district as of July 1 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated. “Individual district current expense revenue” shall be computed as specified in the first sentence of this paragraph.

(7) “School district effort” means the school district’s current expense revenue divided by the school district’s total full valuation as of July 1 in the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated. In the case of a county vocational-technical school district, the school district effort means the school district’s current expense revenue divided by the total number of units of pupils in the district in the year immediately preceding the fiscal year for which Division III funds are appropriated divided by the school district ability. In the case of a school district created under the provisions of § 1028(k) of this title, 2 values of school district effort shall be computed. “Tax district effort” shall be computed by dividing tax district current expense revenue by the total full valuation of taxable property in the school tax district as of July 1 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated. “Individual district effort” shall be computed by dividing individual district current expense revenue by the total full valuation of the school district as of July 1 in the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated.

(8) “State average ability” means the total full valuation of all taxable real property in the State as of July 1 in the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated divided by the total number of units of pupils in the public schools of the State, excluding those units assigned to vocational-technical school districts and those assigned to special schools as defined in paragraph (b)(5) of this section, as of September 30 of the fiscal year immediately preceding the fiscal year for which Division III funds are appropriated.

(9) “State average effort” means the authorized amount times 68.1% divided by the State average ability.

(10) “Total assessed valuation” means the official total assessed value of taxable real property appearing on the assessment rolls of appropriate county governing body or bodies as the case may be.

(11) “Total full valuation” means the total assessed valuation of taxable property divided by the average of the 3 most current assessment to sales price ratios. The Office of Management and Budget shall conduct, in accordance with nationally accepted standards and practices, an assessment to sales price study, by school district, on an annual basis in order to establish the most current ratios and such studies shall be open to public review. Each county is required to make available to the Office of Management and Budget, at the cost of reproduction only, machine-readable copies of its assessment and sales transactions files. In the event a county completes a general reassessment during the period between studies, the county’s assessment to sales price ratio shall be equal to its rate of assessment, until a subsequent assessment to sales price study is completed.

(12) “Units of pupils” means the total number of Division I units as specified in § 1703 of this title.

(c) The formula for determining the sums to be allocated in Division III, to school districts other than those created under the provisions of § 1028(k) of this title, shall be as provided in this subsection. The State share per unit is equal to the authorized amount times the effort index times the quantity of 1 minus .75 times the ability index; provided, that in no case shall the State share be less than the equivalent of 5% of the authorized amount times the effort index. The State share per unit in any fiscal year shall not be less than 95% or more than 105% of the State share per unit in the preceding fiscal year, except as provided in subsection (e) of this section. In fiscal years 2004 through and including fiscal year 2010, the State share per unit for those districts who are entitled to the formula minimum of 5% of the authorized amount times the effort index shall be 80% of the State share per unit in the preceding fiscal year.

(d) The formula for determining the sums to be allocated in Division III, to school districts created under the provisions of § 1028(k) of this title, shall be provided in this subsection. The State share per unit is equal to the sum of the 2 amounts defined as follows. The “tax district share” is equal to the authorized amount times the tax district effort index times the quantity of 1 minus .75 times the tax district ability index; provided, that in no case shall the tax district share be less than the equivalent of 5% of the authorized amount times the tax district effort index. The “individual district share” is equal to the authorized amount times the local district effort index times the quantity of 1 minus .75 times the individual district ability index; provided, that in no case shall the individual district share be less than the equivalent of 5% of the authorized amount times the individual district ability index. The State share per unit, the sum of the tax district share and the individual district share, in any fiscal year shall not be less than 95% or more than 105% of the State share per unit in the preceding fiscal year, except as provided in subsection (e) of this section.

(e) In the case of a school district with an effort index less than 1.00, or a district created under § 1028(k) of this title where the sum of the tax district effort index and the individual district effort index is less than 1.00, that passes a current expense tax referendum to increase taxes in the fiscal year preceding the fiscal year for which Division III funds are appropriated, the State share per unit shall be determined as provided in this subsection. The State share per unit shall first be computed in accordance with the provisions of subsection (c) or subsection (d) of this section, whichever calculation is appropriate for a particular school district, excluding the 105% provision. The State share per unit shall then be calculated a second time using the appropriate formula from subsection (c) or subsection (d) except that the current expense tax rate or rates for real estate and capitation for the current fiscal year shall replace the rates for the immediately preceding fiscal year throughout the calculation. The 105% maximum provision shall also be excluded in this second calculation. The State share per unit shall be equal to the amount computed in the second calculation; provided, that in no case shall the State share per unit be greater than the State share per unit under the second calculation minus the State share per unit under the first calculation plus 105% of the State share per unit in the preceding fiscal year.

(f) The 95% provision contained in subsection (c) and subsection (d) assumes that a school district does not reduce its current expense revenue by reducing current expense tax rates on real estate or capitations. In the event that a school district does reduce its current expense tax rate or rates, the 95% minimum shall not apply and the school district shall qualify for a State share per unit based upon the formula in subsection (c) or subsection (d) only.

(g) Total State equalization shall be computed by multiplying the State share per unit times the number of units of pupils enrolled in the school district, the vocational school district, or the special school in the fiscal year for which the Division III funds are appropriated.

(h) Division III funds shall be utilized to supplement funds appropriated under Division I, including legal expenses associated with collective bargaining, and Division II for the purpose of advancing education beyond the level authorized through the basic appropriations in Divisions I and II or through any other state or federal appropriation.

(i) A committee, composed of not less than 10 or more than 15 members, shall be appointed by the Secretary of the Department of Education to annually review and make recommendations on the equalization formula. The committee shall also be empowered to analyze other issues and concerns related to equalization that impact the State’s ability to achieve the basic purpose of equalization for Delaware’s school districts. The committee shall include at least the following:

47 Del. Laws, c. 364, §§ 2C, 2D; 14 Del. C. 1953, § 1707; 49 Del. Laws, c. 286; 56 Del. Laws, c. 292, § 22; 57 Del. Laws, c. 114, §§ 1, 2; 59 Del. Laws, c. 465, § 1; 59 Del. Laws, c. 553, § 1; 63 Del. Laws, c. 438, § 1; 64 Del. Laws, c. 314, § 1; 66 Del. Laws, c. 85, § 255; 67 Del. Laws, c. 26, § 1; 67 Del. Laws, c. 393, § 1; 69 Del. Laws, c. 64, §§ 286-289; 70 Del. Laws, c. 118, §§ 271-275; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 425, §§ 297, 298; 70 Del. Laws, c. 473, § 97; 71 Del. Laws, c. 132, §§ 313-316; 71 Del. Laws, c. 180, § 105; 71 Del. Laws, c. 354, §§ 332-335; 72 Del. Laws, c. 94, § 332; 72 Del. Laws, c. 395, §§ 389-391; 74 Del. Laws, c. 68, §§ 296-300; 74 Del. Laws, c. 307, §§ 333, 334; 75 Del. Laws, c. 88, § 21(7); 75 Del. Laws, c. 89, §§ 371-375; 75 Del. Laws, c. 350, §§ 379, 380; 76 Del. Laws, c. 80, §§ 364-366; 76 Del. Laws, c. 280, § 361; 77 Del. Laws, c. 84, § 348; 78 Del. Laws, c. 5, § 56.