by James DeChene
This week the General Assembly passed the Angel Investor tax credit bill, and it is on its way to Governor Carney for his signature. You may recall that the bill provides a tax incentive for investors to fund Delaware startups. The Chamber is supportive of the legislation and is looking forward to hearing success stories in the future. SB170, which would raise the minimum wage in Delaware in increments topping out at $10.25, was heard in committee this week and is currently awaiting further action. The Chamber, other business groups, and business owners testified against the legislation. It is unclear on the timing of when it will reach the Senate floor for a full vote. The Committee also released SS1 for SB76, which mandates employers working on certain public works projects have Department of Labor certified apprenticeship training programs in place. The bill, opposed by the Chamber, would disproportionally hurt small businesses and companies that are open shop. The General Assembly is in next week, and will then break for three weeks, returning June 5. The Chamber’s Small Business Day in Dover is next Thursday, May 10. Click here to register.
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by James DeChene This week, the Senate passed an amended version of the Angel Investor tax credit legislation, and it’s on its way back to the House for a vote. The bill would provide a refundable tax credit for qualified investors investing in qualified Delaware companies, and is meant to encourage investment in startups. The State Chamber has been supportive of the bill and is looking forward to House passage. In the House Labor Committee, the vote was deferred on legislation mandating employee sexual harassment training. Concerns were raised on proposed length of training time, how training would take place, liability protections for employers, as well as how independent contractors would be trained and protocol for their would-be-new ability to bring a complaint against a contract holder. The bill sponsor is working on an amendment, and the Chamber will continue to provide feedback through this process. Next week Senate Labor committee will hear SB170, the latest version of a minimum wage increase. by James DeChene
This was another week where the primary focus was firearm legislation, but a few bills of note related to business have been either acted on or introduced. Of note, a new minimum wage bill was introduced this week, SB170. This would raise the minimum wage $.50 a year, starting in 2018, for 4 years, bringing the wage to $10.25 in 2021. Also, rumor has it a bill raising the rate to $15 will be introduced later in session. A bill offering a tax credit to businesses that supply a defibrillator in the workplace made it through the Senate and out of House Committee. It sits on the House ready list awaiting action. The bill offers a one-time $100 tax credit for companies that purchase a machine. The General Assembly is on Easter Break for two weeks and will return on April 17. by James DeChene
This week’s legislative work was cut short a day to due weather. Bills that were to be heard in committee will be heard in the coming weeks. Of note, on Tuesday the Senate defeated SB10, which, as amended, would have raised the minimum wage by $1.00 over two years. It is expected that after work is completed providing casinos tax relief, the minimum wage bill will be reintroduced and voted on. Stay tuned. In other news, DEFAC met earlier in the week and added $101 million in additional revenues for FY2018 and projected 2019. It is rumored that in the next meetings that number could grow even larger. This means a new round of budget fights this year—only this time on how to spend this windfall. It is worth noting, however, that the two primary increases came from personal income tax (PIT), and fewer claims on abandoned property. The abandoned property money is already earmarked for returns, no matter the pace, and is not what you base a budget around. As PIT has increased from the federal GOP tax plan, corporate taxes (CIT) have declined. One bright side is that Delaware may be due a onetime windfall as companies bring back money parked overseas to take advantage of the lowered US corporate tax rate. The IRS is still working to publish guidelines on how this tax money will reach the states. More to come. by James DeChene
This week in Dover the focus was on legislation related to firearms. There was little of note for the business community this week, except the final meeting of the taskforce charged with researching the impact of legalizing recreational marijuana. The taskforce narrowly voted to release their report to the members of the General Assembly, and the co-chairs, Rep. Keeley and Sen. Henry, have pledged to modify their legalization bill, HB110, and continue down the path towards legalization. Also of note are a few bills beginning to circulate, including HB321 related to “evergreen” contract clauses. Companies that provide merchandise (in this case the definition is very broad), and have contracts that auto renew, would have to proactively notify their customers of a pending contract ending, and then the customer would have to respond back affirmatively in writing they wish to renew the contract. This would apply for services like Netflix, Amazon Prime, cable, and perhaps even other services like EZ-Pass and legal representation on retainer. There is also a bill to be submitted on predictive scheduling, that focuses on food service industry and retail workers employed by a chain. The bill would mandate employers post employee schedules 14 days in advance, and puts in punitive measures for noncompliance, limits how and when employees can be called in, or sent home, and would drastically change how these companies operate. The minimum wage bill was once again removed from the Senate agenda as work remains to be completed related to casino relief, which isn’t expected to happen until later in the spring. by James DeChene
This week, the last before the General Assembly returns post-Joint Finance Committee break, saw two meetings of interest to the Chamber. The first, was the Joint Sunset Committee hearing on Hazardous Substance Cleanup Act (HSCA) funding, which is used, in part, to incentivize the clean-up of brownfield sites. The Chamber has been supportive of this program due to its usefulness in helping to remediate and bring back into use dirty sites across Delaware, as well as the proven return on investment the program provides. According the University of Delaware, for every dollar spent in HSCA, there are over $17 dollars brought back in economic development. Funded by a tax on gasoline wholesalers, the program funding is generally spent as soon as appropriated in July. As gas prices remain down, there is a direct negative impact on the amount of funding the program receives. There is talk of working to create a mechanism that would include a floor and a ceiling for the tax rate, depending on the price of gas, in order to provide sustainable funding for HSCA. More to come on that. Also this week, the taskforce created to explore the legalization of marijuana in Delaware met, and there was some confusion during the meeting on how a vote for the release of the taskforce report would take place, and what, in fact, the vote would mean. Due to that confusion, the vote to release failed. There is another meeting next week, March 7, where there may be another vote held, but that remains to be seen. Next week, the General Assembly returns. There may be a Senate vote on SB10, the minimum wage bill. As of now, the latest amended version calls for a $.50 raise in October 2018, with another $.50 raise to take place in October 2019. Right now, the minimum wage stands at $8.25. The bill is expected to pass the Senate, and there will be the opportunity for businesses to be heard when it reaches committee in the House. More to come on that, too. by James DeChene
The General Assembly finished out, for the first time, in what is called “extraordinary session” early Monday morning by passing a budget, a revenue package to pay for it, grants-in-aid, and the bond bill. Some of the highlights from the last few days in Dover include:
Also of note was the passage of a number of State Chamber priorities, which provides good news for our members. They include:
An important item to note: None of these increases are structural changes or work to address Delaware’s long term revenue and spending issues. Many of the same issues the General Assembly faced this year remain, with the added complication of next year being an election year. It remains to be seen the impact this year will have on future budgets, but the expectation at this point is that next year will be another painful year. by James DeChene
Wrapping up the week, with seven legislative days left, the General Assembly still has much to do if they plan to adjourn on June 30th. The most important of those tasks remains hammering out a budget deal that can pass. Negotiations continue, but each side remains committed to issues difficult for the other to support. These items include removing prevailing wage from state contracted construction works projects for a period of three years, and raising the Personal Income Tax Rate, which would also include a new top rate of 6.96% for those with incomes above $150,000. Leadership meetings continue, and JFC still has a lot of work ahead of it. The final DEFAC numbers for this budget session come out on Monday June 20th. Barring significant increases to the Corporate Income or Corporate Franchise taxes, or a surprise escheat settlement, or some other unexpected windfall, revenues are expected to remain flat, meaning our budget gap will remain somewhere in the neighborhood of between $350-400 million. HB190, the bill to modernize the Coastal Zone Act is expected to see a House vote on Tuesday, and our hope is HB226, the bill to reorganize DEDO into a P3 will also see a House vote next week. SB10, the bill to increase Delaware’s minimum wage was taken off the Senate agenda and not voted on this week. SS1 for SB76 was heard in the Senate Labor Committee, which would require recognized apprenticeship training programs for companies performing state construction work. Much more to come next week. Stay tuned. by James DeChene
The 148th General Assembly closed out its session in the early hours of July 1st with its mandated legislation, notably the budget, bond bill and grants in aid, finalized. There were a few notable pieces of legislation important to economic development this year that passed, namely:
Budget In order to provide the bulk of the shortfall funds required in bond and grants in aid specifically, budget writers were forced to raid funds, rely on inversions from unspent accounts and to restrict new program spending to cover, including using the $6 million Governor Markell set aside to help cover redistricting costs associated with the Wilmington Redistricting plan. The main takeaway from the ending this year was that next year, especially the budget, will be difficult. Issues for Next Year: Economic Development – Coastal Zone Modernization, this year the State Chamber raised awareness of the need to modernize the Coastal Zone Act, specifically for sites located north of the C&D Canal to make Delaware more competitive with surrounding states to create jobs here. The issue gained no traction in the General Assembly this year, despite a broad coalition of businesses and business groups calling for action. The State Chamber, along with other coalition members, will continue the process into next year with the hopes of legislation passing. Budget and Tax Policy – The State Chamber’s Tax Committee is working this summer to help draft recommendations for the next governor to promote pro-growth policy for Delaware. With DEFAC projecting low revenue growth for the next few years, the time is ripe to review how Delaware collects and spends taxpayer dollars. by James DeChene
The week started off with the Delaware State Chamber and Delaware Manufacturing Association hosting the annual Legislative Brunch and Manufacturing Conference. Attended by over 200, along with two dozen state officials, the event highlighted recent manufacturing growth in Delaware. Remarks by Governor Markell touting this growth, along with the success the Pathways to Prosperity advanced manufacturing curriculum has had this year, capped off the brunch. At Legislative Hall this week, a bill to raise the state’s minimum wage was put into limbo in the House Economic Development/Banking/Insurance/Commerce committee. The bill will not likely see any further action this year, barring any last minute horse trading on June 30. Should the bill not see any further action, it would have to be reintroduced next year in the 149th General Assembly. The Delaware State Chamber will continue to monitor and provide updates as needed. A bill relating to parking lots, handicapped spaces and restriping was not released from the House Public Safety Committee. The bill, introduced and released from that Committee last June, was substitute language for the original bill. With input from the Counties and several Chambers, the bill was modified, but still not acceptable to the broader business community. It is unclear as of now whether the bill will be modified further, be “walked around” to release it from committee, or if it will remain in Committee seeing no further action this session, much like the Minimum Wage bill. The General Assembly is out for two weeks for Easter break, and returns on April 12. More updates from Dover upon their return. |
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