[caption id="attachment_188115" align="alignright" width="501"] Delaware's Legislative Hall | DBT PHOTO BY JACOB OWENS[/caption]
DOVER – From legalizing recreational marijuana to establishing a paid family and medical leave program, several bills that could greatly impact the private sector are still waiting for a vote after the 151st General Assembly wrapped up its first year on June 30.Legislators have until the end of June 2022 – when the current legislative session concludes – to consider any bills that weren’t already passed, defeated or withdrawn this year.Here’s a look at where five of those bills stand:
House Bill 150: Recreational cannabis legalization
Introduced by Newark Rep. Ed Osienski in March, House Bill 150 would allow adults over age 21 to buy up to an ounce of marijuana in Delaware, open the market to recreational cultivation, manufacturing, testing and retail stores; and establish a 15% tax on all recreational cannabis products.Osienski pulled HB150 from the agenda in June, after he was unable to garner enough support to pass it this year due to last-minute amendments and other issues raised by his colleagues.A central component of HB150 was a social equity clause for people who were negatively impacted by marijuana criminalization. Under the act, eligible applicants can qualify for reduced license fees, filing assistance and opportunities for grants and low-interest loans to start their own cannabis business in Delaware.“The social equity part of the bill is crucial,” Osienski said. “It’s the right thing to do. The laws that were created with the prohibition on marijuana negatively impacted communities of color, did not follow science and were unjust.”The grant funding proposal also meant the bill required 75% approval, not just 60% – a fact the bill’s sponsors realized late into session.
[caption id="attachment_209182" align="aligncenter" width="928"] A recent report from State Auditor Kathy McGuiness estimated that the annual sales of recreational marijuana could top $200 million in Delaware, leading to a potentially lucrative tax stream. | PHOTO COURTESY OF BUDDING/UNSPLASH[/caption]
Osienski amended the bill in June to replace the social equity section with language that would instead give the Marijuana Control Commissioner “the authority to investigate” such funding opportunities – and lower the vote requirement to 60%. That last-minute change caused Osienski to lose needed votes though, he said.Osienski said he’ll work with his colleagues to clarify the social equity clause, address other issues in the bill and ensure he has enough support to pass HB150 through both chambers next year.
[caption id="attachment_209183" align="alignright" width="200"] State Rep. Ed Osienski[/caption]
Osienski said it was “disappointing” that a vote on pot legalization would have to wait – especially since nearby states like New Jersey legalized recreational use and are preparing to open dispensaries by 2022 – but he’s hopeful he can gain enough votes.“The 125 business licenses that are initially in this legislation, that’s 125 businesses that will come about. That’s a lot of jobs,” Osienski said. “My main goal has always been undoing the prohibition and creating an industry in Delaware that doesn’t exist. It’s a commitment to creating jobs in Delaware.”Even with enough votes, HB150 might be killed next year if Gov. John Carney, who has publicly voiced his opposition to recreational cannabis due to health concerns, vetoes the bill. In June, Carney called pot legalization a “bad idea” during a COVID-19 briefing.“There are some flaws with the legislation itself and so we’ll have to see what the legislature does and take it at that point,” he added.If Carney does veto the bill next year, Osienski said he would draft another bill when lawmakers convene for the 152nd General Assembly in 2023 should the votes not exist for an override.
Senate Bill 1: Paid family and medical leave
State Sen. Sarah McBride’s landmark paid family and medical leave bill is on hold until at least next year.
[caption id="attachment_192840" align="alignleft" width="203"] State Senator Sarah McBride[/caption]
The Healthy Delaware Families Act would require employers to provide up to 12 weeks of paid family and medical leave through a state social insurance program.With President Joe Biden’s federal proposal for a similar program, Delaware may not need its own, per a Senate Democrats spokesperson. If there is no movement on the federal level, Delaware lawmakers are likely to move forward with SB1 next year.“I am grateful to President Biden for becoming the first president in U.S. history to put forward a plan to create a comprehensive paid leave program at the national level,” Sen. McBride said in a statement when she introduced Senate Bill 1 in May. “It is long past time that we put this policy in place for all Americans. For me, the only unacceptable outcome is for Delawareans to be forced to go without this critical benefit any longer. If Washington doesn’t get it done, Delaware will.”McBride claimed the program would be “little or no cost” to businesses, amounting to about a cup of coffee a week per employee. The Department of Labor would collect a paid leave premium of 0.8% of an employee’s gross wages, similar to how Social Security and unemployment programs work. Employers would split those contributions evenly with their workers, though businesses with less than 20 employees can opt out of the employer portion.Eligible Delaware workers could receive up to 80% of their average weekly wages through the state insurance program.“With more and more large employers providing this benefit, a paid family and medical leave insurance program will level the playing field for small businesses that would otherwise struggle to provide this benefit on their own,” McBride said during a press conference in May.
House Bill 94: Eliminating the tipped minimum wage
Rep. Kim Williams (D-Newport) sponsored House Bill 94 to raise Delaware’s hourly pay for tipped workers from a fixed rate of $2.23 to 65% of the state’s minimum wage, which is currently $9.25.That means employers would be required to pay servers, bartenders and other tipped workers just over $6 an hour. And since Delaware lawmakers recently passed legislation that will raise the state minimum wage to $15 by 2025, the base pay for tipped employees would also increase.Currently, employers are required to pay their tipped workers minimum wage if their tips and base rate aren’t enough.Williams filed a new version of the bill via House Substitution 1 for HB 94 on June 30, suggesting she is intent on moving forward with the effort next session.
House Bill 256: Changing Delaware’s income tax structure
[caption id="attachment_23587" align="alignleft" width="194"] State Rep. John Kowalko[/caption]
After nearly a decade of trying to update Delaware’s income tax structure, Newark Rep. John Kowalko has filed a new bill that would create tax brackets for higher earners.The highest tier is currently set at $60,000. Kowalko’s legislation, House Bill 256, would raise that threshold to $250,000 while combining some of the lower brackets and thus keeping the structure at six total tiers.“The purpose of additional brackets is that we can no longer have someone making $60,000 pay the same percentage as someone making a million dollars,” Kowalko said. “It’s not fair. It’s not equitable.”Kowalko said people making less than $60,000 would pay less in taxes under the new structure, while the wealthiest would pay “a little bit” more.The proposed structure would raise $10 million less in tax revenue than the current formula, Kowalko said per a Secretary of Finance projection.Kowalko had introduced a different version of the income structure via House Bill 64, but it was criticized for having too many tiers and never made it out of committee, so he struck that bill and introduced HB256.It’s too early to tell how much support he has for HB256, but Kowalko is pushing to get it on the agenda next year.
House Bill 205: EARNS Act, Establishing a state-facilitated retirement savings program
Delaware could soon implement a state-run retirement plan for the more than 200,000 residents who currently lack one through their employer.Introduced by Claymont Rep. Larry Lambert in May, the Delaware Expanding Access for Retirement and Necessary Savings (EARNS) would automatically enroll employees into a state-facilitated retirement savings plan, unless they opt out.The state treasurer’s office would manage the program through a payroll process that requires businesses with more than five employees to participate in, save for those that already offer a retirement option.“I want to do everything I can to help Delawareans make retirement more secure without putting undue burden on employers,” Delaware State Treasurer Colleen Davis said in a statement.HB205 has bipartisan support and is backed by AARP Delaware.“We fully support DE EARNS because AARP believes in planning now, so we have financial security in the future,” said AARP Delaware State Director Lucretia Young in a statement. “While Social Security is a critical piece of the puzzle, it’s not enough to ensure secure financial resilience as we move into our next chapter of life.”If HB205 becomes law, covered employees could start making contributions by Jan. 1, 2025.The bill cleared the House Labor Committee and will next be heard by the Appropriations Committee when lawmakers return to session in January.