In late June, the Supreme Court of the United States released their decision on the highly publicized King v. Burwell case regarding the Patient Protection and Affordable Care Act.  The Court considered two possible scenarios in its decision:

1. Adhere to the strict reading of the law that subsidies may only be available in exchanges established by each state. This would leave consumers of states that opted into the federal exchange unable to apply for tax credits.
2. Rule based on the intent of the law for universal availability of subsidies in all states and all exchanges. This would allow all eligible consumers whose coverage is through the exchange to apply for tax credits.

The Court’s decision states that subsidies will continue to be available for all eligible consumers who purchase health insurance through the exchange in all states, not just in those with state-based exchanges.  Delaware has a “partnership” exchange where the state and federal government work together.  There are a significant number of Delawareans currently receiving tax credits to reduce their insurance premiums for the plans purchased through the FFM (Federally-Facilitated Marketplace exchange).  Delawareans were at risk of losing their tax credits had the Court ruled under the strict reading of the law.
Now, consumers who purchase health insurance coverage on their own need to focus on what to do next.  Here are key dates that consumers should discuss with their agent or broker:

• November 1st, 2015: Is the beginning of the “open enrollment” period where consumers can select and enroll in a 2016 plan.  It is also the time for currently enrolled consumers to make changes to their plan for 2016.
• December 15th, 2015: Is generally the last day to enroll in a new plan that will begin on January 1st, 2016.
• January 31st, 2016: Is the last day of the “open enrollment” period.  There will not be another opportunity to purchase coverage without a “qualifying life event” until the following year’s open enrollment.

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)
PLUS
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

As previously reported in 2014, the General Assembly passed a bill (HB 295) that created new rules for businesses for how they handle consumer’s personal data (name, social security number, address, credit card info, etc.). Stemming from a news report out of Philadelphia of an identity theft conducted with documentation found in a trash can outside of a business, this bill directed all businesses in Delaware to properly erase or destroy any and all data that falls under this category.

The State Chamber worked with the bill sponsor, Rep. Stephanie Bolden, to ease the onus placed on businesses including language involving “reasonable steps” to destroy the data, and also sets the standard for bringing a lawsuit as requiring a “reckless or intentional” violation by the business. Going further in the 148th Session, another bill was introduced (HB 18) that clarified that these provisions only affect those companies that do business in Delaware, not all businesses either registered only here, or those that conduct business with Delawareans, such as a wood carver from Vermont selling to a Delaware resident.

by Matt Amis, Senior Communications Officer, Rodel Foundation

Ernie Dianastasis—perhaps more than ever—is eager to go back to school this fall.

The longtime business leader and education advocate serves as chairman of the Vision Coalition Leadership Team, a cadre of local influencers who work collaboratively and cooperatively to improve Delaware schools.
This month, the coalition releases Student Success 2025. Like its well-known predecessor, Vision 2015, Student Success 2025 is an ambitious 10-year plan designed to boost Delaware’s public education system to world-class status.

Delaware Business caught up with Dianastasis—who, when he’s not leading his CAI (Computer Aid, Inc.) global IT firm, also leads the Delaware Business Roundtable Education Committee—to talk about the plan and the vision for the future of Delaware schools.

Tell us about a little about Student Success 2025.
This is a 10-year vision for public education in Delaware. We started back in 2014 by asking a question: What are the skills and attributes that an educated Delawarean needs to have by the year 2025?—and worked backward from there to develop the strategies to achieve that vision. And we’re not just jumping straight to 2025—these are issues we can begin working on today.

The plan itself deals primarily with six core areas: quality early learning, personalized learning, postsecondary and career attainment, educator support, school funding, and governance. The thinking is, by aligning those six areas better, Delaware can build a more modern and seamless education system, and our kids can take advantage of that in numerous ways.

So whose vision is this, exactly?
The ideas in this report don’t come from me. They don’t come from the Department of Education. Over the last few years, our group talked and collaborated with more than 4,000 Delawareans—including 1,300 students. They reached out online, in surveys, at community meetings, cups of coffee—you name it. The people of Delaware told us where they think we need to go as a state. They told us their hopes for providing more social and emotional support for kids, and for more collaboration between families and schools. And the kids themselves said they wanted more real-life career experiences and flexibility in their school experience. We took the student input very seriously. They’re at the center of this whole thing.

We also called upon leading experts in Delaware, across the country, and around the world—to help inform our thinking.

This is a follow-up to Vision 2015. Did that plan work? Is this the sequel?
 Vision 2015 came out in 2006, and since its release around 75 percent of its recommendations have been acted upon in Delaware. That includes higher academic standards overall, new investments in teacher prep programs, and huge increases in the number of children enrolled in high-quality early learning environments. We have more kids than ever taking and passing AP courses, taking foreign language immersion classes, applying to college, and participating in career pathways.

So, I’d say it has worked, but to be candid some things simply haven’t—like improvements to our funding system, and big shifts that we didn’t anticipate a decade ago, like the explosion of technology in our daily lives. When the community sees Student Success 2025, they will see that we looked to address those gaps and build on the foundation we started. There’s still so much more we can do to support our schools and our kids. We also need to remember that transforming a multi-century old system does not happen overnight. It is a multi-year journey with many phases. There is no finish line where we declare victory. Rather, it is a life-long commitment to excellence that we must all embrace.

What happens next? How do you transition the plan into action?
Well, we’ll officially release the report on September 16 at a special event at the Del Tech Dover campus, and from there, we’ll follow up with our Annual Conference on October 28, where we’ll try to reenergize Delawareans around these issues and keep the momentum going. From there, we’ll establish some dedicated implementation teams to dig in on putting these recommendations into practice. Some will be easier than others, and some of them are already underway. That said, at the end of the day, this is about results, so we are going to hold ourselves accountable by producing a report card on the progress we make every fall. We hope the Chamber and the community as a whole keeps the pressure on to make sure we collectively deliver on what we’ve promised. We all need to own this.

We haven’t seen a whole lot of harmony when it comes to education policy in Delaware lately. What makes this any different?
I think it goes back to the collaborative nature of the plan. At the end of the day, of course we will need political and legislative action to enact some of these recommendations. And we know the state is facing some major revenue issues. But the truth is, we aren’t all going to agree on everything. As a group, the coalition is committed to working on the 80 percent or more that we all agree on, and keep the work moving forward. We accept that there will be real disagreements on the margins, but we can’t let that slow us down.
And in fact, everyone in Delaware can play a part. You already have members of the business community energized around career pathways for students; you have all these wonderful family and community organizations providing support; you have school districts collaborating on things like personalized learning. There are already so many great things happening in pockets throughout Delaware, so our biggest challenge right now is connecting them all together across the state, and doing more of what works. Let’s focus on the things we already agree on, and work toward this vision for the future. It’s closer than we think.

For more info on Student Success 2025, visit www.visioncoalitionde.org.

Our Superstars in Business awards application deadline is about a month away and we would like to open the application process to a wider variety of businesses across the state. Marvin S. Gilman Superstars in Business Awards program, now in its 17th year. As the Chamber’s most visible and important tribute to small business, the Superstars in Business program is seeking outstanding small businesses to award.

The application form is now available and can be completed online at ssb.dscc.com. Printed copies are also available by emailing Kelly Wetzel at [email protected] or calling (302) 576-6564. Winners will be judged in four different categories: companies with 1-24 employees, 25-59 employees, 60-150 employees and nonprofit organizations. Awards of excellence will also be given to deserving companies.

The Delaware State Chamber of Commerce launched the Marvin S. Gilman Superstars in Business Awards program in 1998 to recognize extraordinary small businesses and nonprofit organizations in the state. The winning Superstars in Business companies have been heralded as models of small business excellence, commended for their first-rate performance in such areas as strategic marketing, customer service, quality control and financial performance. They also excel as good stewards of the community, giving back and paying forward through leadership and employee involvement.

This year’s winners will be awarded during a luncheon ceremony on November 10th at the Hotel du Pont’s Gold Ballroom. The keynote speaker will be Hal Real, a seasoned entrepreneur with a passion for new ideas and a history of transforming those ideas into successful businesses. In October 2004, Hal delivered the first installment of that promise by opening World Cafe Live, a nationally-acclaimed live music venue, restaurant and events complex in Philadelphia. In 2011, Hal and his WCL team opened World Cafe Live at the Queen Theater in Wilmington, Delaware.

By Michael Houghton

On June 16, 2015, Senate Bill No. 141 was introduced in the Delaware State Senate.  In the early morning hours of July 1, 2015 (with the Delaware “legislative calendar” still reading June 30, 2015) this legislation, which had already passed the State Senate, passed the Delaware House and awaits Governor Jack Markell’s signature.  The speed with which this legislation passed indicates that Delaware is serious about reforming its Unclaimed Property Program.

Click here to read the full Morris Nichols analysis.

By James DeChene

This weekend the News Journal reported on a lawsuit brought by Belgian scientists whose stock in their company was escheated ultimately to Delaware resulting in a $12 million dollar loss for each. This is the latest in a series of lawsuits brought against the State of Delaware involving how abandoned property is collected and treated, and follows in a long line of cautions the State Chamber has relayed to the Department of Finance and the Secretary of State’s office.

At issue here is how property, in this case stocks, are classified as abandoned. If an account holder does not make contact with their financial institution every three years, the assets can be considered abandoned and reported to the State for collection. Again, in this case, it appears that the account holders were holding onto the stock long-term, and would have automatically benefited from their company’s merger with Merck, which would have borne a significant financial boon to the pair. Instead, the State paid them the market value of the stock at the time of escheat, which was significantly less than the future value they would have seen.  The lawsuit brought against the State claims that the escheating of funds such as these is unconstitutional under both state and federal law.

As of now, abandoned property represents approximately $550 million, or 14% of Delaware’s operating budget.  Its continued existence faces an uncertain future in light of the mounting litigation against the State of Delaware, with no ready alternative poised to take its place should the program be deemed unconstitutional.

By Meg Campbell
​
Secretary of State Jeffrey Bullock recently met with executives from the Bank of China to discuss ways that companies from China and Delaware can work together.

Secretary Bullock and team members from Global Delaware, the State’s initiative for promoting Delaware abroad, talked to bank executives and Chinese entrepreneurs about opportunities for collaboration, from a distributor looking for food safety products to sell in China to a manufacturer seeking advanced training opportunities in the U.S.

“There are so many opportunities for both sides,” Bullock noted. “Delaware companies can leverage their industry expertise by partnering with Chinese investors; they can develop distribution networks to sell their products and services in China; they can meet with Chinese companies looking to come to the U.S. and need distribution and support here. Forging a special relationship with the Bank of China makes so many options possible.”

Over the last several months, Global Delaware has developed a strong working relationship with the Bank of China, one of the country’s largest and most important banks. As a result of these efforts, the State has been selected to showcase Delaware businesses at the Sino-US SME Forum in New York City on September 28, 2015. This is the first event of its kind in the U.S., and Delaware is one of only a few states invited to participate.

The forum is an opportunity for Delaware companies to explore how to grow their business through collaboration with Chinese trading and/investment partners who are clients of the Bank of China. Chinese investment into the U.S. totaled nearly $50 billion in 2014 and could reach $200 billion by the end of the decade.

More than 40 Chinese business partners and investors will be at the event and available to meet with Delaware companies. After initial pre-qualification discussions, the Bank of China will set up one-on-one partnering meetings. Professional translation services and free consulting will be provided. There is no cost to participate for qualifying companies from Delaware.

“This event is a tremendous opportunity for Delaware companies and organizations of all kinds, from traditional manufacturers and service companies to entrepreneurs, nonprofits and educational institutions,” explained Secretary Bullock, noting that the Bank of China has already had great success with these events in Europe. “New York City is so close. We are so pleased that Bank of China has invited our businesses to be included in this important event.”

Global Delaware plans to charter a bus and escort the group up to NYC for this event, and lunch and dinner will be included.

Interested companies should contact a Global Delaware team member at [email protected] as soon as possible, as spaces will fill quickly.

By James DeChene

Louisiana Senator David Vitter, Chairman of the U.S. Senate Committee on Small Business and Entrepreneurship will be introducing this week legislation aimed at assisting the Small Business Community.  Contained in the legislation are a variety of tax reform measures, and as a precursor to introducing the bill, Senator Vitter reached out to the Delaware State Chamber of Commerce, and its Tax Committee, for feedback.  While the Committee agreed with the bulk of the legislation, there were a few technical corrections and other suggestions regarding tax filing dates, extensions and other nuanced submissions to help make the legislation stronger.

This type of exercise is not new to Tax Committee Chairman Jordon Rosen, or to other members of the Committee.  They regularly are asked for feedback from Rep. Carney and other state and municipal leaders for their thoughts on tax reform proposals.  For more information, or if you have an interest in serving on the Tax Committee, contact James DeChene at [email protected]