CHAPTER 460
FORMERLY
HOUSE SUBSTITUTE NO. 1
FOR
HOUSE BILL NO. 698
AN ACT TO AMEND CHAPTER 20, TITLE 30 OF THE DELAWARE CODE RELATING TO BUSINESS TAX CREDITS AND DEDUCTIONS; CHAPTER 55, TITLE 30 OF THE DELAWARE CODE, RELATING TO PUBLIC UTILITIES TAXES; CHAPTER 50, TITLE 29 OF THE DELAWARE CODE, RELATING TO INDUSTRIAL TRAINING FOR ECONOMIC DEVELOPMENT; AND TITLE 19 OF THE DELAWARE CODE RELATING TO UNEMPLOYMENT COMPENSATION.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fourths of all members elected to each house thereof concurring therein):
Section 1. Amend paragraph (1), Subsection (b), Section 2011, Chapter 20, Title 30 of the Delaware Code by striking the date 'July 1, 1984' wherever it appears therein and substituting in lieu thereof the date 'January 1, 1985'.
Section 2. Amend Chapter 20, Title 30 of the Delaware Code by striking the present Subchapter II (as amended by Section 1 of this Act) in its entirety and substituting in lieu thereof a new Subchapter II to read as follows:
"Subchapter II. Tax Credit and License Fee Reduction for Creation of employment and Qualified Investment in Business Facilities.
§2010. Definitions. As used in this Subchapter and in Subchapter III of this Chapter:
(1) 'Qualified facility' is any qualified property located within this State that constitutes a new facility or an expanded facility and that is used by the taxpayer in or in connection with a qualified activity.
(2) 'Qualified property' is:
Any building and its structural components and any other improvement to real property;
The land on which such building or other improvement is located; and
Any machinery, equipment and other tangible personal property (other than inventory and property held by the taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or business) located in such building or other improvement or located on such land.
If any property is owned, leased or subleased by the taxpayer in common with any other person or persons, such property may constitute 'qualified property' only to the extent of the taxpayer's proportionate interest.
(3) 'Qualified activity' is:
Any activity constituting manufacturing within the meaning of §2701(2) of this Title (other than any repair, refurbishing, retooling (such as retooling by an automobile manufacturer), recycling or other similar process or procedure that merely preserves or restores the value of a product or that does not change the inherent nature of a product or material);
Engaging in business as a wholesaler, as defined in §2901(7) of this Title or as a drayman as defined in §2301(aX25) of this Title;
The operation of any laboratory or other similar facility for the purpose of scientific, agricultural or industrial research, development or testing;
The administration or management of any activity described in clauses a. through c. of this paragraph; or
Any combination of the activities described in clauses a. through d. of this
(4) 'New facility' is any qualified property (other than an expanded facility or a replacement facility) placed in service by the taxpayer as owner, lessee or sublessee after December 31, 1984, and before January 1, 1990; provided, however, that such phrase shall not include any property the original use of which commenced prior to the time the taxpayer placed such property in service if at any time within one (1) year after the date the taxpayer placed such property in service, the taxpayer or a related person uses such property in or in connection with any qualified activity, and such property was used by any person, at any time within the 1-year period ending on the date the taxpayer placed such property in service, in the same or substantially the same qualified activity.
(5) 'Expanded facility' is any qualified property (other than a replacement facility) resulting from the acquisition, construction, reconstruction, installation or erection of improvements or additions to existing property [not including any improvement or addition resulting from a repair, refurbishing, retooling (such as retooling by an automobile manufacturer), recycling or other similar process or procedure that merely preserves or restores the value of an existing facility, and not including any improvement or addition that, In the determination of the Secretary, does not constitute an integral part of a qualified activity], if such improvements or additions are placed in service by the taxpayer as owner, lessee or sublessee after December 31, 1984, and before January 1, 1990, but only to the extent of the taxpayer's qualified investment in such improvements or additions.
(6) 'Replacement facility' is any property (other than an expanded facility) that replaces or supersedes any other property located within this State that (a) the taxpayer or a related person used in or in connection with any activity for more than two (2) years during the period of the five (5) consecutive years ending on the date the replacement or superseding property is placed in service by the taxpayer, and (b) is not used by the taxpayer or a related person in or in connection with any qualified activity for a continuous period of one (1) year or more commencing with the date the replacement or superseding property is placed in service by the taxpayer.
(7) 'Placed in service' and 'original use' shall have the meanings ascribed to such phrases under §167 of the Internal Revenue Code [26 U.S.C.A. §167) and regulations promulgated thereunder.
(8) 'Qualified employee' is a person employed within this State on a regular and full-time basis.
(9) 'Qualified investment' for any taxable year is the value of a qualified facility as of the last business day of such taxable year. Such value during any taxable year of the taxpayer shall be:
If the qualified facility is owned by the taxpayer, the original cost of such facility to the taxpayer; or
If the qualified facility is leased or subleased by the taxpayer, eight (8) times the net annual rent paid or incurred by the taxpayer for such facility. The net annual rent shall be the gross rent paid or incurred by the taxpayer for such facility during the taxable year, less any gross rental income received by the taxpayer from sublessees of any portion of such facility during such taxable year.
(10) 'Related person' means:
A corporation, partnership, association or trust controlled by the taxpayer;
An individual, corporation, partnership, association or trust that is in control of the taxpayer; or
A corporation, partnership, association or trust controlled by an individual, corporation, partnership, association or trust that is In control of the taxpayer.
For purposes of this paragraph, 'control' with respect to a corporation means ownership, directly or indirectly, of stock possessing fifty (50) percent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote and fifty (50) percent or more of the total number of shares of all other classes of such corporation's stock; 'control' with respect to a trust means ownership, directly or indirectly, of fifty (50) percent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial Interest In a trust shall be determined in accordance with the rules for constructive ownership of stock provided in §267(c) of the Internal Revenue Code [26 U.S.C.A. §267(c)) other than paragraph (3) of such Section.
(11) 'Qualified facility gross receipts' means the total Delaware gross receipts (as defined and computed under those provisions of Chapter 23, 27 or 29 of this Title that apply to the qualified activity in question), attributable to and derived by the taxpayer from the operation of the qualified facility in question.
(12) 'Secretary' means the Secretary of Finance or her delegate.
(13) 'Taxpayer' means any corporation subject to the tax imposed by Chapter 19 of this Title (relating to corporation income tax).
§2011. Investment and employment credit against concretion income tax.
(a) Any taxpayer (other than a public utility as defined in Chapter 1 of Title 26 of the Delaware Code) that (1) for any taxable year has qualified investment in an amount equal to or exceeding Two Hundred Thousand Dollars (8200,000.00) in a qualified facility that is placed in service by the taxpayer during such taxable year, and (2) employs five (5) or more qualified employees during such taxable year, shall (except as otherwise provided in Subsection 2011(e) be allowed a credit against the tax imposed by Chapter 19 of this Title for such taxable year and for any of the nine (9) following taxable years in which such facility is a qualified facility with respect to the taxpayer on the last business day thereof. The amount of such credit for any such year shall be the amount determined under Subsection (b).
(b) Subject to the limitations contained in Subsections (c) and (d), the amount of the credit allowable under Subsection (a) with respect to any qualified facility for each of the taxable years falling within the 10-year life of such credit shall be the sum of:
Two Hundred Fifty Dollars ($250.00) multiplied by that number that is the difference between (i) the number of qualified employees employed by the taxpayer on the last business day of the taxable year in which such qualified facility is placed in service by the taxpayer, and (ii) the sum of the number of qualified employees, if any, that were employed by the taxpayer and by any related person on July 1, 1984; provided, that no credit shall be allowable under this paragraph (1) with respect to any qualified employee except to the extent the qualified investment in such qualified facility equals or exceeds Forty Thousand Dollars (540,000) per qualified employee; and provided further, that no credit shall be allowable under this paragraph (1) with respect to any qualified employee to the extent a credit was claimed by the taxpayer or any related person under this paragraph (1) for such qualified employee with respect to any other qualified facility placed in service in the same or a prior taxable year; plus
Two Hundred Fifty Dollars (5250.00) multiplied by each One Hundred Thousand Dollars (5100,000)(or major fraction thereof) of qualified investment in such qualified facility.
(c) If the number of qualified employees employed by the taxpayer during any taxable year of the taxpayer later than the taxable year in which such qualified facility was placed in service by the taxpayer shall be less than ninety (90) percent of the number of qualified employees that were taken into account under Subsection (b), the amount of the credit otherwise allowable under Subsection (b) for such later taxable year shall be reduced by one (1) percent for each full percentage point that the number of such qualified employees in such later taxable year is less than the number of qualified employees that were taken into account under Subsection (b).
(d) The amount of the credit allowable under this section for any taxable year shall not exceed fifty (50) percent of the amount of tax imposed upon the taxpayer by Chapter 19 of this Title for such taxable year (computed without regard to this Section)
(e) No credit shall be allowable under Subsection (a) unless at least twenty-five (25) percent of all qualified employees employed by the taxpayer on the date a qualified facility is placed in service by the taxpayer are residents of this State on such date.
(f) The amount of the credit determined under Subsections (b) and (c) for any taxable year that is not allowable for such taxable year solely as a result of the limitation contained in Subsection (d) shall be a credit carryover to each of the following taxable years that fall within the 10-year life of the credit specified in Subsection (a). The entire amount of the credit that is not so allowable shall be carried to the earliest of the taxable years to which such credit may be carried, and the portion of such credit that shall be carried to each of the other taxable years to which such credit may be carried shall be the excess, if any, of such credit over the mini of the credits allowable under this Section (including Subsection (d)) for each of the prior taxable years to which such credit may be carried. In applying the limitation contained in Subsection (d) to any taxable year to which a credit may be carried wider this Subsection, any credit carryovers to such taxable year shall be considered to be applied in reduction of the tax imposed by Chapter 19 of this Title for such taxable year in the order of the taxable years from which such credits are carried over, beginning with the credit carryover from the earliest taxable year, and only after all such credit carryovers to such taxable year have been allowed in full shall any credit that would be allowable in such taxable year without regard to this Subsection be allowed.
(g) If any facility for which a credit was allowable to the taxpayer under Subsection (a) is not a qualified facility with respect to the taxpayer on the last business day of any taxable year during the 10-year life of the credit specified in Subsection (a), and if on the last business day of any later taxable year ending after the expiration of such 10-year life such facility again constitutes a qualified facility with respect to the taxpayer (whether u a result of the same qualified activity or a different qualified activity), the Secretary may, upon application of the taxpayer filed on or before the first day of the fourth month following the close of such later taxable year (and filed in such form and manner as may be prescribed in regulations by the Secretary), allow a credit for such later taxable year and for each of that number of the following taxable years as shall be equal to the difference between nine (9) and the number of prior taxable years for which a credit was allowable to the taxpayer for such qualified facility. The amount of the credit, for such later taxable year and for each such following taxable year, shall be the amount of the credit determined under Subsection (b) for the taxable year such qualified facility was first placed in service by the taxpayer, but subject in such later taxable year and in each such following taxable year to the limitations contained in Subsections (c) and (d). The Secretary shall allow such credit if she determines that the resumption of a qualified activity with respect to such qualified facility will provide increased opportunities for employment in this State and will result in a meaningful contribution to the economy of this State.
§2012. Reduction in license fees for investment and employment.
Any taxpayer that satisfies the requirements contained in §2011(a) of this Title for the allowance of a credit against the tax imposed by Chapter 19 of this Title (relating to corporation income tax) for the taxable year of the taxpayer in which a qualified facility is placed in service by the taxpayer shall also be allowed a reduction in any license fee imposed upon the taxpayer's gross receipts by any provision of Chapter 27 of this Title or by §2301(d), §2902, §2903 or §2904 of this Title for each taxable period used in computing the amount of such license fee that ends within or with such taxable year of the taxpayer and for each such taxable period that ends within or with any of the nine (9) following taxable years in which such facility is a qualified facility with respect to the taxpayer on the last business day thereof. The amount of each such reduction in such license fee shall be determined under Subsection (b).
The reduction in the license fee allowable by Subsection (a) shall be that percentage of such license fee (computed without regard to this Section) imposed upon the taxpayer's qualified facility gross receipts attributable to the operation of such qualified facility (as determined under §2010(11) of this Title) as shall be determined in accordance with the following table:
If the number of full calendar months The license fee (computed without elapsed since such qualified facility was regard to this Section) shall
placed in service by the taxpayer is; be reduced by the following percentage:
1 through 12 90%
13 through 24 80%
25 through 36 70%
37 through 48 60%
49 through 60 50%
61 through 72 40%
73 through 84 30%
85 through 96 20%
97 through 108 10%
109 through 120 5%
Over 120 0%
§2013. Rules and regulations.
The Secretary shall prescribe such rules and regulations as she may deem necessary to carry out the purposes of Subchapters II and III of Chapter 20, Title 30 of the Delaware Code.
§2014. Report on effect of this Act.
In each year after the effective date of Subchapters II and III of Chapter 20, Title 30 of the Delaware Code and before 1989, the Secretary's annual report required by Section 8313 of Title 29 of the Delaware Code shall include an analysis of the business activity generated by these Subchapters.
Prior to February 15, 1989, the Secretary and the Director of the Delaware Development Office shall prepare and submit to the Governor and the General Assembly a joint report on the effectiveness of Subchapters II and III of Chapter 20, Title 30 of the Delaware Code in generating business activity within this State. Such report shall contain an analysis of the effects of these Subchapters on economic development and State revenues and shall include recommendations for extension, modification or termination of these Subchapters."
Section 3. Tax Credits and License Fee Reductions in Targeted Areas.
Amend Chapter 20, Title 30 of the Delaware Code by adding thereto a new Subchapter III to read as follows:
"Subchapter III. Tax Credit and License Fee Reduction for Creation of Employment and Qualified Investment in Targeted Areas.
§2020. Definitions.
As used in this Subchapter: (1) 'Targeted area' is :
Any real property located within this State that is owned by the State, any
political subdivision of the State or any agency or Instrumentality of the State or its political subdivisions;
Any real property located within this State that is owned by an organization described in §501(c) (3) of the Internal Revenue Code [26 U.S.C.A. § 501(c) (3)1 which is organized and operated, and which holds such real property, solely for the purpose of fostering economic development within this State;
Any area located within this State that has been approved by the United States Department of Commerce as a general purpose Foreign Trade Zone; or
Any of the following 1980 Delaware Census Tracts, as defined by the United States Department of Commerce. Bureau of the Census:
(i) Within the City of Wilmington, 1980 Delaware Census Tracts 006.01,
006.02, 007, 009, 015, 016, 017, 019, 021 and 022;
(J) Within New Castle County (other than the City of Wilmington), 1980 Delaware Census Tracts 107, 122. 124. 129, 137, 151. 155, 162, 165 and 167;
(Ili) Within Kent County. 1980 Delaware Census Tracts 406, 414, 425. 428 and
429; and
(iv) Within Sussex County, 1980 Delaware Census Tracts 502, 508, 514,
515 and 518.
Any term or phrase defined in §2010 of this Title shall have the meaning ascribed to it therein.
'Commercial activity' is any activity constituting an occupation listed and defined in §2301(a) of this Title, other than in paragraph (2). (3), (7), (8), (13), (21), (27). (28). (29). (31). (35). (43). (49), (51), (56), (61), (67) or (70) thereof.
'Retail activity' is engaging in business as a retailer, as defined in §2901(5) of this Title, other than by providing retail food and beverage services (including eating and drinking places, but excluding grocery and convenience stores), engaging in automobile sales or providing recreation or entertainment.
§2021. Credit against corporation income tax for investment and employment in targeted areas.
In the case of any taxpayer that (i) places in service within any targeted area as defined by §2020(1) a. through d. a qualified facility in which the taxpayer is engaged in a qualified activity described in §2010(3) of this Title, and (II) thereby satisfies the requirements contained in §2011(a) of this Title for the allowance of a credit against the tax imposed by Chapter 19 of this Title (relating to corporation income tax) for the taxable year of the taxpayer in which such qualified facility is placed in service by the taxpayer, §2011 of this Title shall be applied with respect to such qualified facility by substituting 'Five Hundred Dollars ($500.00)' for 'Two Hundred Fifty Dollars ($250.00)' in §2011(b) (1) and (2).
In the case of any taxpayer that (I) places in service only within any of the targeted areas as defined by §2020(1)d a facility in which the taxpayer is engaged In a commercial activity or retail activity, and (U) would thereby satisfy the requirements contained in §2011(a) of this Title for the allowance of a credit against the tax imposed by Chapter 19 of this Title (relating to corporation income tax) for the taxable year of the taxpayer in which such facility Is placed in service by the taxpayer if such facility were a qualified facility by virtue of its use by the taxpayer in or in connection with such commercial activity or retail activity, §2011 of this Title shall be applied with respect to such facility by treating it as a qualified facility.
§2022. Reduction in license fees for investment and employment in targeted areas.
Any taxpayer that (i) places in service within any targeted area as defined by §2020(1) a. through d. of this Title a qualified facility in which the taxpayer is engaged in a qualified activity described in §2010(3) of this Title, and (ii) thereby satisfies the requirements contained in §2012(a) of this Title for the allowance of a reduction in any license fee imposed upon the taxpayer's gross receipts by any provision of Chapter 27 of this Title or by §2301(d), §2902, §2903 or §2904 of this Title for the taxable year of the taxpayer in which such qualified facility is placed in service by the taxpayer, shall be allowed, in lieu of the reduction in such license fee provided by §2012 of this Title, a reduction in such license fee for each taxable period used in computing the amount of such license fee that ends within or with such taxable year of the taxpayer and for each such taxable period that ends within or with any of the 14 following taxable years in which such facility is a qualified facility with respect to the taxpayer on the last business day thereof. The amount of each such reduction in such license fee shall be determined in the manner provided in §2012(b) of this Title, but by employing the following table in lieu of the table contained in §2012(b) of this Title:
If the number of The license fee (computed without regard
full calendar months elapsed to this Section) shall be reduced by the
since such qualified facility following percentage:
was placed in service by the
taxpayer is:
1 through 60 100%
61 through 72 90%
73 through 84 80%
85 through 96 70%
97 through 108 60%
109 through 120 50%
121 through 132 40%
133 through 144 30%
145 through 156 20%
157 through 168 10%
169 through 180 5%
Over 180 0%
In the case of any taxpayer that (i) places in service only within any of the targeted areas as defined by §2020(1)d of this Title a facility in which the taxpayer is engaged in a commercial activity or retail activity, and (U) would thereby satisfy the requirements contained in §2012(a) of this Title for the allowance of a reduction in any license fee imposed upon the taxpayer's gross receipts by any provision of Chapter 27 of this Title or by §2301(d), §2902, §2903 or § 2904 of this Title for any taxable period used in computing the amount of such license fee that ends within or with the taxable year of the taxpayer in which such facility is placed in service by the taxpayer if such facility were a qualified facility by virtue of its use by the taxpayer in or in connection with such commercial activity or retail activity, §2012 of this Title shall be applied with respect to such facility by treating it as a qualified facility."
Section 4. Modification of Public Utility Tax Bills
Amend Section 5502, Chapter 55, Title 30 of the Delaware Code by striking the present second sentence of Subsection (c) in its entirety and substituting in lieu thereof a new second sentence of Subsection (c) to read as follows:
"The tariff adjustments filed by such distributor and approved by the Public Service Commission shall not incorporate the tax in the charges for commodities and services, and the tax shall appear on the customer's bill as a separate item."
Section 5. Amend Chapter 55, Title 30 of the Delaware Code by adding thereto a new Section 5507 to read as follows:
"§5507. Rebate of tax for certain qualified activities.
(a) In the case of the tax imposed by this Chapter upon a distributor of gas or electricity commodities and services that is attributable to gross receipts or tariff charges received from a person engaging in this State in any qualified activity as defined by §2010(3) of Title 30 of the Delaware Code, the person engaging in such qualified activity shall be allowed a rebate of the tax payable by such distributor for each of such person's taxable years beginning after December 31, 1984, and on or before November 30, 1990. The amount of the rebate allowable to such person in each such taxable year shall be equal to ten (10) percent of the amount of the tax imposed by this chapter (computed without regard to this Section) upon such distributor that is attributable to that portion of the tariff or other similar charge paid to such distributor by such person during such taxable year that is allocable to the gas or electricity commodities and services consumed in such qualified activity.
(b) In the case of the tax imposed by this Chapter upon a distributor of gas or electricity commodities and services that is attributable to gross receipts or tariff charges received from a corporation that satisfies the requirements of §2011(a) of this Title for the allowance of a credit against the tax imposed by Chapter 19 of this Title (relating to corporation income tax) for the taxable year of such corporation in which a qualified facility (as defined in §2010(1) of this Title) Is placed in service by such corporation (within the meaning of §2010(7) of this Title), such corporation shall be allowed a rebate of the tax payable by such distributor for such corporation's taxable year In which such qualified facility is placed in service and for any of its 4 following taxable years in which such facility Is a qualified facility with respect to such corporation on the last business day thereof. The amount of the rebate allowable to such corporation in each such taxable year shall be equal to fifty (50) percent of the amount of the tax imposed by this chapter (computed without regard to this Subsection, but computed with regard to Subsection (a), if applicable) upon such distributor that Is attributable to that portion of the tariff or other similar charge paid or payable to such distributor by such corporation on account of such taxable year that (1). if such qualified facility Is a new facility within the meaning of §2010(4) of this Title, Is allocable to the volume of such gas and electricity commodities and services consumed in the operation of such new facility during such taxable year, or (2), if such qualified facility Is an expanded facility within the meaning of §2010(5) of this Title, is allocable to the excess, if any, of (I) the volume of such gas and electricity commodities and services consumed during such taxable year in the operation of that facility of which such expanded facility is a part, over (11) the volume, if any, of such commodities and services consumed by such corporation or a related person (within the meaning of §2010(10) of this Title) in the operation of that same facility during such corporation's taxable year immediately preceding its taxable year in which such qualified facility is placed in service by such corporation. For purposes of this Subsection, the amount of any tariff or other similar charge that shall be deemed allocable to the volume of any specific commodities and services shall be the excess of (1) the total amount of such tariff or charge, over (2) the amount of such tariff or charge computed without including such volume of commodities and services in the base for computing such tariff or charge.
Every claim for a rebate allowable under this Section for any taxable year shall be filed by the claimant with the Division of Revenue in writing (and in such form and manner as may be prescribed in regulations by the Secretary of Finance or her delegate) within three (3) years from the end of such taxable year and shall state the specific grounds upon which it Is founded. The Director of Revenue may grant the claimant, or his authorized representatives, an opportunity for an oral hearing if the claimant so requests. No rebate shall be allowed or made after the expiration of the period of limitations prescribed in this Subsection for the filing of a claim for rebate, unless a claim for rebate is filed by the claimant within such period. If the Director of Revenue disallows a claim for rebate in whole or in part or fails to act upon it within 6 months from the date of filing such claim, the claimant may obtain review by filing a petition with the Tax Appeals Board, in such form as the Tax Appeals Board may prescribe, within ninety (90) days from the date when the Director of Revenue malls written notice of disallowance of the claim, or within three (3) years from the date of filing the claim if the Director of Revenue fails to mail a notice of disallowance to the claimant. The determination of the Tax Appeals Board shall be subject to Judicial review as provided in §331 of this Title. No interest shall be payable on any rebate allowable under this Section.
For purposes of this Section, the taxable year of any person shall be the year used by such person in computing liability for Delaware income tax."
Section 6. Training for Economic Development.
Amend Title 29, Chapter 50 of the Delaware Code by adding a new Subchapter V. Delaware Economic Development Training Act, which shall read as follows:
"Subchapter V. Delaware Economic Develo Training Act.
§5070. Definitions.
(a) 'On-site Training' means the progressive development of skills associated with a defined set of work processes to be covered sequentially in the course of employment in an occupation,trade, or industry, and shall be consistent with a career pattern of advancement, as measured by skill proficiency and the progression of earnings and related benefits that is recognized within the occupation, trade, or industry.
'Entry level training' means instruction conducted in the classroom, work site, or in any combination thereof which is short-term in nature and is either preparatory for employment or an integral part of employment in an entry classification in a particular occupation or industry.
'Classroom instruction' means job-related instruction on or off the job site, the provision of which is normally outside of scheduled working hours and is neither in the course of production nor in the course of rendering a service. Classroom instruction can be used in coordination with on-site training so that the skills acquired both in the classroom and on the job are mutually reinforced in a manner that enhances the career education and the productivity of the trainee.
'Covered costs of classroom instruction' means costs incurred in the provision of classroom instruction for both entry level and on-site training, and may include specially identified costs incurred for instructors, classroom space and facilities, liability insurance, administrative support services, and related costs. To the extent possible, funds allocated from this source shall be utilized in the provision of classroom training. Costs such as those for specialized equipment and materials not appropriately attributable to classroom training shall not be allowed.
'Office' means the Delaware Development Office.
'Director' means the Director of the Delaware Development Office.
'Board' means the Economic Development Training Board.
'Eligible applicant' means an applicant who may apply for funds that are made available to fund the purposes of this Subchapter. Eligible applicants shall include, but not be limited to, local education agencies, employers, employee organizations, community based organizations, and other providers of training with demonstrated effectiveness, or any combination thereof. No party to a collective bargaining agreement shall be an eligible applicant unless all parties to the agreement apply in writing.
'Added cost to employers' means the actual increased costs incurred by employers when they assume the responsibility for career worksite training. Such increased costs must be specifically identified, and may include such costs as those incurred for training supervision, maintaining training records, monitoring the progress of training and implementing performance standards, additional costs of production time allocated for training on the job, wage subsidies to trainees, and similar functions essential to career worksite training programs.
§5071. Economic Development Traininit Board.
There is hereby created an Economic Development Training Board which shall be appointed by the Governor. The Director of the Delaware Development Office, the Secretary of the Department of Labor. the Chairman of the Senate Labor Committee and the Chairman of the House Labor Committee shall serve as ex-officio members with voting privileges. The Public members shall be: a union representative of the Private Industry Council; a representative of a public secondary vocational or comprehensive education facility; a representative of a public or private postsecondary education facility; a business representative of the Advisory Council on Career and Vocational Education; a representative of organized labor; and a representative of a public employees' union. Public members shall serve for a period of four years, except that members initially appointed to the Council shall serve as follows: two members shall serve for two years; two members shall serve for three years; and two members shall serve for four years. The Director of the Delaware Development Office or his designee shall act as Chairman of the Board.
The Board shall meet as required to review the activities of the Economic Development Training program, recommend policies for the implementation of skills training programs, and advise the Director in matters directly affecting the administration of said program.
§5072. Powers and Duties.
The Director, at the direction of the Board, shall carry out the provisions of this Subchapter and adopt rules, regulations, and guidelines as necessary to implement and administer the program and may enter into contracts with eligible applicants for the purpose of funding approved programs. training providers, employee organizations, employers, and industry representatives, the Director shall appoint staff, employ consultants, and incur such other administrative expenses as are necessary to carry out the provisions of the Act.
The Director may contract with eligible applicants for amounts not in excess of One Hundred Thousand Dollars ($100,000.00) per contract provided, however, that such contracts shall be used exclusively for programs which are consistent with the provisions of this Subchapter and, provided further, that the contract is made only after:
Receipt of an application from the eligible applicant which contains a proposal for a program of skills training and education, including a description of the program, the type of skills training or education to be provided, a statement of the total cost of the program and a breakdown of the costs associated with equipment, personnel, facilities and materials, a statement from a designated business or industry of the employment need for the program and evidence in support thereof, a statement of the technical assistance and financial support for the program received or to be received from business and industry, assurance that at least twenty-five percent of the trainees are Delaware residents and such other Information as the Director shall request;
The commitment of financial support from business or industry shall be equal to the amount of the requested contract, except that the Director may waive the requirement for such matching financial support upon finding that the program funded by the contract will materially increase the employment opportunities for targeted individuals and that the businesses or industries participating in the program have agreed to contribute personnel, facilities, equipment, supplies, stipends or other items of value to the program in an amount approved by the Director.
Binding commitment shall be made to the Director by the applicant for adequate reporting of information and data regarding the program, particularly Information concerning the recruitment and employment of trainees and students, and including a requirement for a periodic audit of the books of the applicant directly related to the program, and such control on the part of the Director as he shall consider prudent over the management of the program, so as to protect the use of public funds including, at the discretion of the Director and without limitation, right of access to financial and other records of the applicant directly related to the program.
§5073. Annual Report.
The Board shall submit an annual report of activities conducted under this Subchapter to accompany the report of the Director required by Title 29, Section 5016(a) of the Delaware Code. The annual report .shall include, but not be limited to, descriptions of all programs funded, an evaluation of the performance of each program, a summary of the public monies expended, and an analysis of the participants in the programs, to include a report on the number of minority and economically disadvantaged individuals."
Section 7. Special Assessment for Counseling. Training, and Placement Activities.
Amend Subsection (a) of Section 3166 of Title 19, Delaware Code, by redesignating existing paragraph (3) thereof as paragraph (4) and by substituting a new paragraph (3) to read as follows:
"(3) All monies collected pursuant to Section 3401 of this Title:"
Section 8. Amend Subsection (c) of Section 3166 of Title 19, Delaware Code, by adding a new paragraph (6) thereto to read as follows:
"(6) The payment of the costs of programs to counsel, retrain and place dislocated workers, to assist in school-to-work transition activities, to provide industrial training, to provide career-ladder training for state employees, and the payment of the administrative costs of such programs. shall be from monies collected pursuant to Section 3401 of this Title."
Section 9. Amend Title 19, Delaware Code, by adding thereto a new Chapter 34 to read as follows:
"CHAPTER 34. COUNSELING. TRAINING AND PLACEMENT ACTIVITIES
§3401. Determination and Collection of Special Assessment.
(a) In addition to all other payments to the State due under this Title. each employer liable for assessments under Chapter 33 of this Title shall also be liable for a special assessment which shall be levied at the rate of one-tenth of one percent (0.1%) per year on all taxable wages, as defined in §3302(18) of this Title, payable by each such employer.
Each special assessment shall be billed to the employer by the Department of Labor, based on reported taxable wages or on assessed taxable wages as estimated and determined by the Department under the provisions of Section 3359 of this Title, for the period covering the two most recently completed calendar quarters prior to each billing.
Each employer shall be billed by the Department of Labor for the amount due under this Section not later than June 30 and December 31 of each year and such amount shall be considered delinquent 30 days thereafter. Interest shall accrue on all unpaid assessments as prescribed in Section 3357 of this Title and shall be collectible in the same manner.
The special assessment levied under this Section shall not affect the computation of any other assessments due under this Title.
§3402. Disbursement of Special Assessment Funds.
All monies collected under this Chapter shall be deposited in the Special Administration Fund of the Department of Labor and shall be dedicated to the establishment and implementation of programs to provide for the counseling, training and placement of dislocated workers, to assist in school-to-work transitition activities such as vocational guidance, training, placement and Job development. to provide for industrial training, to provide for career advancement training for state employees, and to pay the administrative costs of such programs.
All monies collected under this Chapter shall, in a timely manner after deposit pursuant to Subsection (a) of this Section, be deposited to the following special funds in the following amounts and for the following purposes:
Twenty-five percent (25%) of the funds collected to a special fund of the State to be administered by the Delaware Development Office to be awarded to appropriate subgrantees for Industrial Training for Economic Development in accordance with Subchapter V, Chapter 50, Title 29 of the Delaware Code.
Of this twenty-five percent (25%) sum, not more than One Hundred Thousand Dollars (5100,000.00) shall be allocated for subgrants to fund career training for State employees. Appropriate regulations for the granting of these funds shall be developed by the Delaware Development Office, in cooperation with the State Personnel Office and a representative of a public employees' union representing State employees.
Of this same twenty-five percent (25%) sum, no more than five percent (5%) may be retained by the Delaware Development Office for the payment of administrative costs.
Seventy-five percent (75%) of the funds collected to a special fund to be administered by the Delaware Private Industry Council, Inc., to be awarded to appropriate subgrantees to provide for services to dislocated workers, to assist in school-to-work transition activities, and to underwrite such other innovative training programs as the Council may approve, under regulations promulgated by the Council in coordination with the Department of Labor.
Of this seventy-five percent (75%) sum, no more than one-half may be used for subgrants for school-to-work transition activities.
Of this same seventy-five percent (75%) sum, no more than One Hundred Twenty-five Thousand Dollars ($125,000) in the first year and five percent (5%) every year thereafter may be retained by the Department of Labor for the payment of administrative costs.
The special funds authorized by Subsections (b)(1) and (2) above shall be established pursuant to State accounting standards and balances on deposit at the end of any fiscal year shall not revert.
This Act shall apply to assessments due after confirmation from the U. S. Department of Labor that there is no debt outstanding to the account of the State of Delaware In the federal Unemployment Trust Fund, or December 31, 1984, whichever occurs later."
Section 10. Assessment of Unemployment Insurance Methods
At the present time, the method used by the State of Delaware for determining Delaware employers' tax liability for unemployment insurance, as approved by the U. S. Department of Labor, is the benefit wage ratio. The other approved methods are (1) the benefit ratio, (2) the reserve ratio, and (3) the payroll decline. Each of these methods offers relative benefits and liabilities to Delaware's employers and employees. A careful analysis of the determination of liability is now in order. By this Act, the Unemployment Compensation Advisory Council as established in Title 19, Chapter 31 of the Delaware Code, and with the addition of the Director of the Delaware Development Office to its membership. is empowered to determine whether or not Delaware should adopt an alternative method to the benefit wage ratio.
The Council shall research the methods of taxation approved by the U. S. Secretary of Labor and used in the other states, assess the costs to Delaware's employers of such other methods, analyze the impact of such alternative methods on Delaware's unemployment insurance fund balance and payment level and draw such other conclusions from data as are necessary to recommend the optimum taxation method for this state. The Council shall draw upon staff from the Departments of Labor and Finance and the Delaware Development Office to assist in the completion of its duties.
The Council shall make a final report on its findings and recommendations to the Governor and General Assembly no later than May 1, 1985.
Section 11. Severability.
If any provision of this Act, or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
Section 12. Effective Date Provisions.
Sections 1, 6, 7, 8, 9, 10, and 11 of this Act shall take effect upon the enactment of this Act into law.
Section 2 of this Act shall take effect upon January 1, 1985, and shall apply with respect to property placed in service by the taxpayer after December 31, 1984, and before January 1, 1990. The provisions of present Subchapter H of Chapter 20 of Title 30 of the Delaware Code shall not be revived on January 1, 1990, unless reenacted into law.
Section 3 of this Act shall take effect upon January 1, 1985, and shall apply with respect to property placed in service by the taxpayer after December 31, 1984, and before January 1, 1990.
Section 4 of this Act shall take effect upon January 1, 1985.
That portion of Section 5 of this Act which amends Section 5507(a) of Title 30 of the Delaware Code shall be effective with respect to taxable years beginning after December 31. 1984, and on or before November 30, 1990.
That portion of Section 5 of this Act which amends Section 5507(b) of Title 30 of the Delaware Code shall take effect upon January 1. 1985, and shall apply with respect to property placed in service by the taxpayer after December 31, 1984, and before January 1, 1990.
Those portions of Section 5 of this Act which amend Sections 5507(c) and (d) of Title 30 of the Delaware Code shall take effect upon January 1, 1985.
Approved August 13. 1984.