Legislative Update, Week of February 13, 2023

DRAFT Regulations for the Adoption of Advanced Clean Car II, California Auto Emissions Standards Raises Concerns, Member Input Requested! 

The Department of Natural Resources and Environmental Control (DNREC) is in the process of promulgating regulations Zero Emissions Vehicles with the goal of scaling down the sale of fossil fuel- powered passenger cars, light-duty trucks, SUVs, etc. beginning in 2025, with a total ban on the sale of new gas and diesel-powered vehicles by 2035. Chamber Position: Under Review/Gathering Input/Seeking Changes to the DRAFT Regulations.  . Status: Public Comment Period Pending. The next phase, according to the DNREC’s materials provided during the December workshops, will involve an early-2023 public hearing, with a written comment deadline following 15 days after the hearing, with final adoption of regulations in mid-2023 with the program scheduled to begin in 2026 for model year 2027 vehicles. The current plan and draft regulations (pre-publication) have profound implications for businesses and households in our state.  The NCC Chamber is in the process of gathering input, formulating questions, and cataloguing concerns. Among those concerns are (not exhaustive): 

• Access to affordable transportation for Delawareans.
• Whether electrical grid capacity will be sufficient.
• Impact on Delaware energy markets – including the price per kilowatt-hour of electricity.
• Environmental concerns relating to electric vehicle batteries.
• Challenges in providing adequate charging infrastructure (citing of infrastructure, sufficiency, impact on the cost of new residential construction, etc.)

 For more information, please contact Joe Fitzgerald at fitzgeraldj@ncccc.com.  

NCC Chamber Seeking Member Input on DRAFT Paid Family and Medical Leave Regulations

The Department of Labor is seeking pre-publication input on DRAFT regulations arising from Senate Substitute 2 to Senate Bill 1 from last session (151^stG.A.). Shortly, the Department will publish them, with some changes based on stakeholder input, in the Register of Regulations, after which there will be a 30-day public comment period. (I am including the following link for clients/members in communications about these and other regulations to describe the process: https://regulations.delaware.gov/citizen.shtml.)

The NCC Chamber is working to make recommendations which would lessen administrative burdens on small businesses and which would provide sufficient liability protections for employers acting in good faith. Please note that the act requires that businesses adjudicate employee claims. The DRAFT regulations set forth the “Reasonable Person Standard” as the standard of liability for employers who are adjudicating claims in good faith. The Chamber is seeking input on whether that standard provides sufficient protection. 

Director Chris Counihan is leading the implementation of paid family and medical leave at the Department of Labor. The NCC Chamber is seeking to host a virtual discussion with him once the regulations are published. 

For more information, please contact Joe Fitzgerald at fitzgeraldj@ncccc.com. 

Legislation Raising the Maximum Weekly Benefit for Unemployment Insurance while Providing Temporary Tax Relief to Delaware Employers Enacted

House Bill 49 (Osienski) has passed both houses and been signed by Governor Carney. The act will increase the maximum weekly benefit available under Delaware’s Unemployment Insurance program from $400 to $450 per week. The legislation will also provide roughly $50 million in unemployment tax relief to Delaware employers this calendar year. There was broad support, though concerns were expressed that, given the challenges currently being faced by employers seeking to fill positions, an increase in the maximum weekly benefit was unwarranted. The bill was released from committee unanimously by the 8 out of 12 members present at the hearing (6 favorable, 2 on its merits) and passed the House 39-0.  The bill was introduced on Friday, January 13, heard by the House Labor Committee on Tuesday, January 17 and considered by the House on Wednesday January 18. The sponsor, Representative Ed Osienski (D-Newark), who also chairs the House Labor Committee, indicated that they were moving with bill quickly in order to get it to the governor’s desk before the end of January as they wanted to allow for employers to receive all 12 months of reduced assessments. The bill was heard by the Senate Labor Committee on Wednesday, January 25 and passed by the Senate the same day. Governor Carney signed the measure the next day. 

The NCC Chamber attended the hearing and sought additional clarification about the bill’s intent and effect and spoke with Deputy Secretary of Labor Rachel Turney and Director of the Division of Unemployment Insurance Darryl Scott. Based on conversations with the deputy secretary and division director, and the director’s testimony before the committee, our understanding is as follows: 

• The legislation increases the maximum weekly benefit from $400 to $450 under Delaware’s Unemployment Insurance program. Additionally, the legislation temporarily (for the entirety of CY 2023) simplifies the tax table and provides tax relief (for 2023) to Delaware employers of roughly $50 million. Delaware’s weekly maximum benefit is lower than that of surrounding states and has remained static since 2019
• The current Unemployment Insurance Trust Fund balance is more than $390 million versus a targeted minimum balance of $270 million based on USDOL standards and that a significant portion of that balance can be attributed to federal funds from the American Rescue Plan Act. 
• It is the Department’s assessment that this increase in the weekly maximum benefit (which only a segment of the UI claimant population receives) would not create imminent solvency concerns. 
• As to the question of whether the legislation could result in higher assessments in the foreseeable future, the director advised that the Department is in the process of developing a new UI tax assessment scheme, working with consultants and actuaries, which will employ ratings classifications (based on industry classification) and claims experience to set rates that are more correlated with individual employer and industry classification claims experience/system utilization. As a result, some employers will see their rates decrease, some will see their rates increase. (Presumably, some will see their rates remain the same.) 

The NCC Chamber has contacted by Director Scott and Deputy Secretary Turney with a follow-up email to confirm our understanding and to relate additional questions. As the Department/Division is in the process of redesigning the tax assessment structure for unemployment insurance, the NCC Chamber will be seeking additional information and will ask to be included in discussions on behalf of our members.