Delaware Senate approves fee increases after extended debate over constitutional vote threshold

The Delaware Senate on May 12 passed House Bill 400 with House Amendment 2, a package of increases to a broad set of Secretary of State fees that the sponsor said would raise a projected $140,000,000.

Sponsor Senator Townsend urged the chamber to approve the changes as necessary updates to fees that have not risen in many years. "In total, the fee package will raise a projected $140,000,000 moving forward," Townsend said.

Why it matters: the measure touches multiple code titles and includes changes to fee provisions referenced in Title 8, the portion of state law dealing with corporate governance. That prompted sustained legal debate on the Senate floor about the applicable constitutional supermajority for statutes that amend corporate-related provisions.

On one side, Mark Catrona of the Division of Legislative Services testified that the functional nature of the changes—fees for state services—supports applying the three-fifths vote threshold that the constitution requires for fee increases. "These are fees that are being imposed for the use of the state," Catrona said. "Therefore... my opinion is that this is a three-fifths vote." (Mark Catrona, Division of Legislative Services)

A differing view came from Anthony DelCollo, who told senators that the plain language of Article IX, Section 1 of the Delaware Constitution treats amendments to general corporate law as requiring a two-thirds majority. "This is plainly enacting a general corporation law," DelCollo said, and argued that a court would likely apply the higher threshold.

Senators pressed both witnesses about precedent and the risk of a later legal challenge. Catrona noted earlier judicial opinions and explained the court's evolving approach to the enrolled-bill doctrine and severability, saying a court would examine whether individual provisions are severable from the remainder of a measure.

Policy details and questions: sponsor Townsend and others said the increases realign fees to where they would have been if prior cycles had not been skipped; senators asked for line-item revenue breakdowns from the Controller General's Office. Questions also focused on which entities would shoulder the cost: Townsend said most affected filers are entities formed in Delaware but not physically located there, and that about 1.6–1.8 million entities could be implicated in some categories.

Vote and next steps: the Senate treated the bill as requiring a three-fifths vote and, after debate, approved House Bill 400 with House Amendment 2 on a roll call of 15 yes and 6 no. The legislation was declared passed to the Senate (returned from the House with amendment) and will proceed as required by legislative process.

What remains unresolved: floor debate made clear that reasonable legal arguments exist on both sides about whether Title 8 fee-related text requires a two-thirds majority; witnesses said the question has been treated inconsistently over time and could be subject to judicial review. Senate leaders said they would obtain additional fiscal detail and noted the presence of a general severability provision in Title 1 that courts use when assessing challenges.

The Senate adjourned after completing its agenda; sponsors said implementing guidance and line-item fiscal details would be provided to members and committee staff working on budget and oversight duties.