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Senate Labor Committee Meeting 1 Senate Labor Committee Meeting Official Minutes 151st General Assembly First Session Committee Meeting Wednesday, January 27, 2021 1:00 p.m. Virtual Zoom Meeting Meeting Attendance Committee Members Present: Senator John Walsh [email protected] Senator Nicole Poore Nicole [email protected] Senator Colin Bonini [email protected] Senator Bruce Ennis [email protected] Senator Spiros Mantzavinos [email protected] Senator Bryant Richardson [email protected] Absent: None Staff: Venessa Karpeh [email protected] Abigail Armstrong [email protected] Attendees: Organization: Patrick Allen Allen Strategies Alexa Adams Senator Nicole Poore Bailey Brooks Ruggerio Willson Edward Capodanno ABC Delaware Geoffrey Christ Department of Safety Mary Davis Ned Davis Associates, Inc. Julie Fedele Controller General’s Office Cara Gannon Controller General’s Office Rick Geisenberger Department of Finance Scott Goss Delaware Senate Majority Caucus Michael Hackendorn Plumbers and Pipefitters Local 74 Michael Hill-Shaner Senator Bruce Ennis Jaci Hugg Senator Bruce Ennis Sydney Hyer DCADV Minutes prepared by Abigail Armstrong 2 Lizzie Lewis Hamilton Goodman Partners Steve Lex Pettinaro Construction Co. Inc. David Mangler Department of State Carl Marenco Wohlsen Contruction Melissa Marlin Department of Finance Howard Morrison Environmental Services Inc. Bobby Murrian International Brotherhood of Electrical Workers Virginia Nobles Easterseals Delaware & Maryland’s Eastern Shore James Nutter Parkowski, Guerke & Swayze, P.A. Robert Overmiller PDO Refrigeration Sen. Nicole Poore Delaware Senate Matt Revel Senate Minority Caucus Roger Roy Roy Associates Darryl Scott Delaware Division of Unemployment Insurance Bryon Short DCA Rachel Turney Department of Labor Agenda: House Bill 65 Senate Bill 48 Senate Bill 51 Senator Walsh convened the meeting at 1:09 p.m. I. HB 65 – Rep. Osienski – AN ACT TO AMEND TITLES 19, 29, AND 30 OF THE DELAWARE CODE RELATING TO COVID-19 RELATED UNEMPLOYMENT BENEFITS, ASSESSMENTS, AND RULEMAKING AUTHORITY. SYNOPSIS: This bill provides COVID-19 related relief to both claimants receiving unemployment benefits and employers who are assessed unemployment taxes, and extends the end date of the Secretary of Labor’s COVID-19 related rulemaking authority. Section 1 waives the 13-week waiting period for the state to "trigger on" to pay extended unemployment benefits in periods of high unemployment. Section 2 establishes the 2021 new employer assessment rate, average industry assessment rate, and average construction industry assessment rate at the same rate as 2020 in order to avoid an increase in these rates as a result of the increase in unemployment claims due to COVID-19. Section 3 extends the provisions in H.B. 352 from the 150th General Assembly authorizing the Delaware Secretary of Labor to issue emergency rules amending the Delaware Unemployment Insurance Code to deal with the effects of COVID-19 and implement federal programs providing unemployment benefits to respond to COVID-19. Section 4 exempts unemployment compensation benefits received in 2020 from the calculation of Delaware adjusted gross income so that Minutes prepared by Abigail Armstrong 3 unemployment claimants will not have to pay state taxes on the benefits they received during the pandemic. Senator Walsh, a sponsor of the legislation, provided a summary. The legislation unanimously passed in the House of Representatives. A record amount of more than 100,000 Delawareans filed for unemployment with the Delaware Division of Unemployment Insurance. The Division of Unemployment Insurance paid more than $965 Million in 2020 compared to a usual volume of $67 Million in 2019. Unlike previous years, unemployment remains high and job opportunity remains low which has caused many benefits to be extended longer than normal. Section 1 of the legislation waives the 13 week waiting period for Delaware to pay extended unemployment benefits in specific periods of high unemployment. Section 2 establishes the 2021 new average employer assessment rate, average industry assessment rate, and average construction industry assessment rate at the same as the 2020 rates to avoid an increase in unemployment claims due to COVID-19. According to the Division of Unemployment Insurance, maintaining the employer rate is expected to benefit more than 2,000 businesses, and maintaining the new employer tax rate at 1.8% will save employers up to $264 per employee in 2021. Maintaining the new construction industry rate at 2.3% will save employers up to $165 per employee in 2021. Section 3 extends provisions in HB 352 from the 150th General Assembly authorizing the Delaware Secretary of Labor to issue emergency rules amending the Delaware unemployment insurance code. This authorization will help to deal with COVID-19 effects and to implement federal programs providing unemployment in response to COVID-19. Section 4 exempts 2020 unemployment compensation benefits from Delaware’s adjusted gross income calculation so that unemployment claimants will not pay state taxes from the benefits received during COVID-19. Notably, this legislation does not affect the federal tax structure, solely the state taxes. This exemption would keep $21 Million in the possession of more than 100,000 Delawareans who filed for unemployment in 2020. This would allow those Delaware citizens to pay rent, buy groceries, and pay for utilities. Senator Walsh recognized Secretary Rick Geisenberger. Rick Geisenberger, Secretary of Finance, thanked Senator Walsh and the Committee members. It is critical to pass this legislation in January because individuals will be filing taxes in February. The Department of Labor circulated a notice with the 1099 forms that this legislation is under consideration. Assuming the legislation passes individuals will have to take proactive action when filing. Notably, this legislation does not forgive the federal taxes on unemployment insurance benefits. This will explain how to deduct those benefits from their state taxes, which will require a special entry. The Department of Finance is also working with H&R Block and TurboTax. Also, the estimated loss of this revenue will be included in the Governor’s financial plan. Senator Walsh recognized Senator Bonini. Minutes prepared by Abigail Armstrong 4 Senator Bonini thanked the Secretary and others who worked on the legislation. It is certainly the right thing to do and Senator Bonini is glad for the quick formation. Senator Bonini hopes the legislation will pass unanimously. It will not be a lot of money for individual taxpayers, but in the current climate, every little bit helps. Senator Walsh stated the creation of this legislation looked at both the business and individual side of it. Senator Walsh thanked the Committee, Secretary Geisenberger, and Darryl Scott, Director of the Division of Unemployment Insurance. This legislation is moving quickly to help both individuals and businesses during the COVID-19 pandemic. SB 65 – Reported out of the Committee – 3= Favorable 3= on its Merits 0= Unfavorable II. SS-SB 48 – Sen. Walsh – AN ACT TO AMEND TITLE 24 OF THE DELAWARE CODE RELATING TO DISCIPLINARY SANCTIONS BY THE BOARD OF ELECTRICAL EXAMINERS. SYNOPSIS: This Act increases the maximum monetary penalty for a sanction by the Board of Electrical Examiners’ from $1,500 to not less than $4,500. This Act makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual. Senator Walsh, the prime sponsor of the legislation, stated it is similar to SB 51, the main difference is it affects a different trade. SB 48 affects the electrical and SB 51 affects the plumbing and HVAC portions of the legislation. Reasons for this legislation are significant time has passed since the fees were increased, the enforcement is more costly for Delaware, and the fees are less of a deterrent. The HVAC fines have not increased over the last 20 years since 1997 and the electrical license violations have not increased in over three years. The current fines are outdated and ineffective. Increasing the fines will not affect any law-abiding contractor but will deter unlicensed plumbing and HVAC. This deterrent will mainly be directed at out-of-state contractors. These contractors have increased activity in Delaware and are taking jobs from the licensed workers in Delaware. While many in-state contractors abide by these rules many out-of- state contractors do not. These increased fines are to help deter those activities from occurring and protect the safety of workers and the public. Increasing these fines will decrease the illegal work within the plumbing and HVAC trades and eliminate contractor misconduct. Senator Walsh recognized Robert Overmiller. Robert Overmiller, licensed master electrician in Delaware, supports the legislation. Senator Walsh recognized Geoffrey Christ. Geoffrey Christ, Director of the Delaware Division of Professional Regulation, stated the Division supports the legislation. Complaints on non-licensed plumbers and electricians have increased, so this legislation will help with enforcing and deterring that action. Minutes prepared by Abigail Armstrong 5 Senator Walsh recognized Edward Capodanno. Edward Capodanno, President of the Associated Builders and Contractors (ABC), shared some concerns. Contractors are attempting to keep people employed during the pandemic. The organization is a supporter of licensing contractors, however, there are delays
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