Legislative Update - May 18th, 2020

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Legislative Update
May 18, 2020
The U.S. House of Representatives Narrowly Passed a Fifth Coronavirus Relief Bill: Prospects for the Bill in the Senate are Dubious
  • On Friday, May 15, the House passed a $3 trillion aid package aimed at combatting the economic impacts of the Coronavirus pandemic.   The legislation passed 208-to-199.  14 Democrats, most of whom were from swing districts voted against the measure. Among key provisions of the House Bill included another round of cash payments into Americans’ bank accounts, extension of the duration of jobless benefits, aid to assist in coverings some rents and mortgages and student loan forgiveness.  Among the more contentious aspects of the bill was a provision which would allow limited assistance to undocumented workers who have a tax identification number.
  • The Delaware General Assembly will reconvene session, via Zoom, on May 26 and 27.  The primary focus will be on meeting Delaware’s constitutional requirement to pass a balanced budget for FY 2021, which begins on July 1. May revenue forecasts and indications from Congress and the Trump Administration as to whether Delaware can count on federal aid to close a more than $700 million structural shortfall will be key determinants in how policy makers shape the budget package. 
    • Congressional Democrats favor providing states will $500 billion in aid, with an additional $500 billion allocated to relief for county and municipal governments.  
  • Legislative leadership is relying on legal advice and the Delaware Constitution concerning the mode and means employed for the upcoming legislative days:
    • Article II, § 5. Place of meeting. Section 5. The General Assembly shall meet and sit in Dover, the capital of the State; provided, however, that in periods of emergency resulting from enemy attack, terrorism, disease, accident, or other natural or man-made disaster the General Assembly may temporarily meet and sit elsewhere.
  • Governor Carney has announced that Delaware beaches and public pools may re-open, subject to considerable restrictions and public health requirements, on Friday, May 22.  Ice cream shops and ice cream trucks will also be allowed to open, with limitations. https://news.delaware.gov/2020/05/14/governor-carney-announces-reopening-of-beaches-to-delawareans/
  • The Delaware Department of Labor indicates that jobless claims have slowed slightly last week, from 6,183 to 5,197.  The Delaware Department of Labor’s Division of Unemployment Insurance has received 90,027 claims since mid-March – a figure which exceeded the prior 33 months of claim volume combined. 
  • Nationally, roughly 3 million new unemployment claims were filed last week.  More than 33 million have been filed since mid-March.
  • Monthly retail sales for April 2020, are expected to show a contraction of more than 12 percent from a month prior.  March saw a nearly 9 percent decline.  The figures constitute a record month-over month decline.  Retail sales data are comprised of purchasing at stores, gas stations, restaurants, bars and online, account for one quarter of all consumer spending.  Consumer spending accounts for two-thirds of U.S. economic output. 
  • Leading economists are forecasting a “U-shaped” recovery, as opposed to a “V-shaped” recovery – the latter is preferable.  The following are explanations of the two phenomena from Investopedia (There are other types of recovery, these are the two most broadly discussed in the current context):  
    •  U-shaped recovery is so-called because major measures of economic performance take on the shape of the letter “U” during these periods.
      • U-shaped recoveries happen when a recession occurs and the economy does not immediately bounce back, but tumbles along the bottom for a few quarters. 
      • Examples of U-shaped recoveries are the 1973-73 Nixon recession and the 1990-91 recession following the S&L crisis. 
    • A V-shaped recovery is characterized by a sharp economic decline followed by a quick and sustained recovery. The recession of 1953 is an example of a V-shaped recovery.
  • Tax breaks on the order of roughly $650 billion are going to large corporations as part of Coronavirus relief efforts.  Publicly traded firms such as Disney, Chipotle, Valero Energy and others are large recipients.  Substantial tax breaks will also be afforded to some large companies which are not publicly traded and, therefore do not have to disclose such breaks publicly, as would publicly traded firms.
  • Federal Reserve Chairman Jerome Powell has warned of potentially permanent damage to the U.S. economy should Congress fail to act to stem job losses and a coming wave of personal and commercial bankruptcies.
  • The Wisconsin Supreme Court struck down an extension of their governor’s shelter in place order on procedural grounds.  While allusions were made to potential constitutional issues, the court focused on procedural flaws in the governor’s approach in their ruling.
  • Last week, Governor Carney indicated that the target date for the beginning of phase I of reopening Delaware’s economy is June 1
  • Chamber Lobbyist Joe Fitzgerald, of Fitzgerald Consulting, participates in a series of weekly calls with government officials, chambers of commerce and other trade associations to share information and advocate for Chamber members.  Among the most helpful calls is the Tuesday afternoon conference call with the chairman of the House Economic Development, Banking, Insurance and Commerce Committee, Representative Bill Bush (D-Dover) and the chairman of the Senate Banking, Business and Insurance Committee, Senator Trey Paradee (D-Dover).  Joe is in nearly daily contact with the governor’s office and the Division of Small Business, an agency which is a core part of the governor’s response to the current crisis from a economic standpoint. 
  • Chamber President Bob Chadwick and Joe Fitzgerald participated in a call with Governor Carney and the presidents of all 14 chambers of commerce in the state on Wednesday, May 13.  The NCC Chamber is working collaboratively with other chambers and business organizations, while maintaining an individual advocacy approach tailored to the needs of our membership.
  • The New Castle County Chamber’s effort to extend comment period on proposed regulations during the crisis, was largely successful.  In early April, the New Castle County Chamber of Commerce became aware that state agencies were continuing to issue regulations (other than those necessary to deal with the Coronavirus emergency) per their regular practice. 
    • Generally, state agencies which have been delegated regulatory promulgation authority by statute in a given area will issue draft regulations for public review and comment.  The comment period is typically 30 days.
    • On April 8Chamber President Bob Chadwick wrote to Governor Carney formally requesting that the comment period for regulations, other than those which pertain to the Coronavirus state of emergency, be extended until at least one month after the conclusion of the state of emergency.  The Chamber feels strongly that businesses and other stakeholders are not in a position at this time to adequately review and comment on regulations which could significantly impact them.
    • Chairman of the House Economic Development, Banking, Insurance and Commerce Committee, Representative Bill Bush (D-Dover) brought these concerns to Governor Carney and his senior staff.  Representative Bush, Jamie Nutter of Parkowski, Guerke and Swayze and the Chamber’s lobbyist, Joe Fitzgerald, raised this issue in a number of (virtual) meetings. 
    • The Governor saw merit in our suggestion and, in the 12th modification to his executive order, Governor Carney indicated the following:  “And [this modification] allows state agencies and members of the public additional time to consider rules and regulations, giving agencies discretion to extend public comment periods for 30 days from the date the State of Emergency is rescinded.”
    • While the Chamber would have preferred that agencies be required to extend comment periods, rather than have the discretion to do so, it is still good that this language was included in the modification.  In instances where agencies are not inclined to extend a comment period, parties seeking an extension should cite this language, to someone at a senior level in the agency, and advise the Office of the Governor of their concerns.
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