by James DeChene
This week saw action on bills important to the Chamber. First, SB74 provides employers taking advantage of the New Economy Jobs credit to prorate the credit over 12 months, rather than using the calendar year (Chamber supports). This would allow employers making hires at the end of the year a full 12 months to spread out the credit. SB21, creating the Transportation Infrastructure Investment Fund was released from House Transportation Committee (Chamber supports). A bill banning certain flame retardants in consumer products (HB117-Chamber opposes) was tabled in committee. A bill banning single use plastic bags (HB130) passed the House and now goes to the Governor for signature. The effective date for implementation is January 1, 2021.
This session’s HB110, an act to legalize recreational marijuana, was introduced this week. As drafted the Chamber still opposes the language and will be working to insert language to protect employers. As previously noted, 71% of Chamber members oppose legalization.
Last week the Chamber attended a working group focused on what the next round of renewable portfolio standard goals would be post-2025. The Chamber expressed concerns over how increasing renewables would impact Delaware commercial energy users, and to make sure that as technology continues to improve, Delaware doesn’t lock itself in to a certain type of renewable source.
The General Assembly is off for the next two weeks before returning for all of June.
by James DeChene
This week marked the first of the General Assembly’s two-week Easter break. DEFAC met this week and revised its forecast by an additional $42.8 million for this year, and roughly $16 million for FY20. Each of DEFAC’s meetings this year have seen revisions upwards. A reminder that the Governor has urged the General Assembly to set aside any such increases to be used for savings for future years and on one-time expenditures, like the Bond Bill.
This week and next, I’ll give updates on the status of bills so far this session that have an impact to Chamber members:
SB61 is a Chamber-supported bill that would create a Transportation Infrastructure Investment Fund (TIIF). It passed the Senate and now heads to the House for committee assignment. The bill creates a fund to help offset the cost of providing transportation-related improvements for commercial and industrial development projects, which will also help speed the process to project completion.
SB65, the FAST bill, heads to the Senate for a vote. The bill provides up to $9K to Delaware high school graduates to obtain a non-degree certification. The Delaware Workforce Development Board will create an approved list of certifications, and the Chamber supports the bill.
SS1 to SB 48, a bill to require apprentice and craft training on prevailing wage jobs, was released from the House Labor committee, and is ready to be voted on in the House. The Chamber opposes the bill as drafted and is working to amend it prior to the vote in the House.
HB15 is a bill the Chamber opposes and would create two new top tax brackets: 7.1% for earners making $125K and over, and 7.85% for earners making $250K and over.
SS2 for SB50 directs money from the bond bill to be issued to DelTech, along with bonding authority, to help address the college’s deferred maintenance issues reported on before. The bill’s main difference from the original SB50 is the removal of the statewide property tax provision as a revenue source. The bill is ready to be signed by the Governor.
SS1 for SB25 was passed and the age to purchase tobacco is now 21 in Delaware.
by James DeChene
This week in Dover saw action in the Senate on a number of bills related to business. First, SS2 for SB50 directs money from the bond bill to be issued to DelTech, along with bonding authority, to help address the college’s deferred maintenance issues reported on before. The bill’s main difference from the original SB50 is the removal of the statewide property tax provision as a revenue source.
Also in the Senate was SS1 for SB48, which mandates journeyman and apprentice craft training for those who work on publics works projects. The Chamber, ABC, Drive Delaware Forward, and others, worked unsuccessfully to modify the bill so that its passage would not adversely impact small businesses, or those businesses located where no training programs exist within reasonable distances (in some cases, apprentices must travel 80 miles each way to receive certified training). The bill now moves to the House where efforts to modify the bill will continue.
Next week the General Assembly is out of session for JFC and Bond break. Upon their return, work will continue on criminal justice reforms, including the introduction of a revamp of Delaware’s criminal code.
Stay updated on legislative issues through our Chamber Action Network video series as well. Sponsored by Ruggerio Willson.
by James DeChene
This week’s focus in Dover was on two bills directed toward the 500 federal workers living in Delaware currently furloughed. The first bill, which passed both the House and Senate, allows these workers to petition the court to halt eviction and/or loss of insurance policies or automobiles due to non-payment for the duration of the federal shutdown and for a duration of 120 days after. It would also limit the amount loan holders could charge during this time period, capped at 6%, no matter the original loan terms. The second bill, which passed the House, but failed in the Senate, would provide furloughed workers the opportunity to apply for state backed, low interest loans.
Also this week the Governor announced his recommended budget. Of note to Chamber members was the outlining of how a newly created infrastructure fund ($10 million dollars) would be managed, allocating $15 million to colleges and universities toward economic development initiatives; adding $7 million additional funding in the Bond bill to UD, DSU and DelTech, allocated for deferred maintenance; and setting aside $12.5 million to Delaware’s Strategic Fund.
The General Assembly will be in recess throughout February as the Joint Finance Committee will meet to hold budget markup sessions. They will return March 5.
By James DeChene
The Public Service Commission (PSC) and the Delaware Public Advocate (DPA) have directed Delmarva Power & Light (DP&L) to modify the way in which they charge their gas transport fees, including what’s known as “balancing”, plus assessing user fees on infrastructure purchased from other companies. DP&L contends that the change is needed to more appropriately allocate the “balancing fee” to all customers the costs for storage and swing capacity and pressure support associated with the Eastern Shore contract (the 3rd party pipeline that DP&L uses to transport the resource to meet all its customer demand).
Simply put, the Public Service Commission (PSC) and Delaware Public Advocate (DPA) are urging DP&L to (1) increase the “balancing fee” for transport customers and (2) create a “pressure support fee”.
The “balancing” fee is both the overage and underage of usage a company is charged on their gas usage, and a company can lower this fee if they become better “guess-timators” or “predictors” on what their usage will be on a given day. This is also known as ‘nominations’ or when a company predicts their usage for the following day or week. Transport customers can be industrial users, e.g., chemical companies, but also restaurants, apartment complexes and schools. PSC staff and DPA are concerned that residential customers are presently subsidizing 150 transport customers in the amount of $2.3M/year. The goal is to redistribute this $2.3M.
Via this regulatory change, the balancing fee is projected to increase from $0.34 per mcf to $0.55 per mcf. Residential GCR customers create about 65% of the annual imbalance, but according to the report have been paying 90% of the balancing fee. Additionally, the user fee for transport on infrastructure will be a set rate of $.19 per mcf total used. The pressure support fee is associated with the support of the infrastructure for the Eastern Shore pipeline, which DP&L uses to transport gas. All users must contribute to this maintenance. The total bill spread across users is $4.3M/year.
DP&L indicated that transport customers can minimize the impact of the increase in balancing fees by more accurately predicting their nominations.
The State Chamber encourages all affected parties to attend a workshop on Tuesday, August 4th at PSC headquarters in Dover beginning at 9:30am.
In anticipation of next week’s workshop, companies can assess how this change will affect their bottom lines by utilizing the following formula:
1) Proposed $0.55 Balancing Rate X Company Balancing Volume (Can be found on utility bill)
2) $0.19 Fixed Pressure Support Fee X Total Natural Gas Usage
Compared to current costs, you will get the total financial impact. We recommend that each member apply this formula to their own companies and share with the State Chamber their total overall impact so that we can reiterate the average impact to the PSC and DPA next Tuesday.
By James DeChene
The State House of Representatives today took the first official step in reaching a proposed $100 million total infrastructure deal. Tasked by Governor Markell to find $50 million, the first bill in a package of legislation was heard in, and released from, the House Revenue and Finance Committee.
Why is this important? Delaware’s infrastructure is suffering from a lack of investment over the years due to a number of factors, including a tough economy, cars and trucks getting better fuel mileage (less gas tax paid at the pump), and the number of projects outstripping overall funding (DELDOT faces a $800 million shortfall over the next 5 years as projects continue to pile up).
The money in the state Highway Trust fund goes to more than just roads. All projects undertaken by DELDOT are funded through the HTF, including rail, bridge, road and drainage pipe work, among others.
HB 140 raises $23 million in new revenue by raising .5% the fee paid on the sale of automobiles, along with a range of DMV fee increases. The bill will be heard on the floor tomorrow, where it will be voted on by the House. The next steps, if passed, are to go through the Senate committee and floor vote, where it will be signed by the Governor.
2 remaining pieces are awaiting action, including the transfer of DELDOT operating expenses out of the Highway Trust Fund and into the General Fund, as well as some sort of tax on gasoline, either at the wholesaler level, or at the pump.
James DeChene is the Chamber's Senior Vice President of Government Affairs.