Significant addition to State’s leading role in corporate law

Governor Jack Markell today joined members of the General Assembly to announce legislation enabling the formation of public benefit corporations in Delaware. Public benefit corporations are a new kind of socially conscious for-profit corporation intended to operate in a responsible and sustainable manner. They are to be managed for the benefit not only of stockholders, but also for other people, the community and public interests. The creation of public benefit corporations in Delaware is a significant addition to the state’s long- standing leadership in the development of corporate law worldwide.

“Delaware is rightfully recognized worldwide for its leading role in corporate law,” said Governor Jack Markell. “With the addition of Public Benefit Corporations, Delaware will continue to be a leader and support a new movement of  social entrepreneurs and investors who are stepping forward to meet high standards of corporate purpose, accountability and transparency.”

Delaware is the legal home of more than one million legal entities including many of the nation’s largest businesses. The State’s recognition of this new type of corporation whose end objective is to create a positive impact on society and the environment is expected to have a significant effect on the development of this area of corporate law. The bill requires directors of a Delaware public benefit corporation to balance the interests of stockholders with the best interests of those materially affected by the corporation’s conduct and the specific public benefits identified by the corporation.

Senate Bill 47 was introduced today in the Delaware General Assembly with bi-partisan support.

“I am proud to sponsor legislation which gives corporations a way to rebuild public trust in business by ensuring that the benefits of their work extend beyond their stockholders and managers,” said Sen. David Sokola, D-Newark, who is sponsoring the bill.

Rep. Bryon Short, who chairs the House Small Business Caucus and the House Economic Development Committee, is the lead House sponsor of the legislation. “The establishment of benefit corporations is a positive step forward for the role of corporations in our communities,” said Rep. Short, D-Highland Woods. “Their missions go beyond the historical board-stockholder relationship to create specific public benefits. Delaware’s unique role in the corporate world makes us an ideal place for Benefit Corporations to incorporate. I’m happy to support this legislation and help guide it toward becoming law.”

B Lab, a non-profit organization whose mission is to use the power of business to solve social and environmental problems, is the nation’s leading advocate for benefit corporation legislation. B Lab also certifies hundreds of companies that meet rigorous standards of social and environmental performance, accountability and transparency including more than 70 firms that are already incorporated in Delaware. According to Jay Coen Gilbert, co-founder of B Lab, “Delaware’s introduction of benefit corporation legislation is a tipping point in the acceleration of a global movement to redefine success in business.  We are deeply appreciative of the commitment that Delaware had made to this important issue and thank Governor Markell, the bill’s sponsors, the Delaware State Bar Association, the Delaware Court of Chancery, and the Secretary of State for their leadership in supporting legislation that will work in Delaware.”

A public benefit corporation (PBC) will be formed in the same manner as any other corporation formed under the Delaware General Corporation Law. However, in order to be a PBC, the corporation’s certificate of incorporation must identify one or more specific public benefits and must have a name that clearly identifies its status as a PBC. Public benefits for which corporations may be formed under the proposed law include, but are not limited to, those of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technical nature.

At least once every two years, a public benefit corporation must send its stockholders a statement with respect to its promotion of the public benefit(s) identified in its charter, as well as its promotion of the best interests of those materially affected by the corporation’s conduct.

John Grossbauer, Vice Chair of the Council of the Corporation Law Section of the Delaware State Bar Association, stated “I’m pleased to represent the Delaware State Bar Association in endorsing this legislation which will provide corporations, entrepreneurs and investors who wish to pursue these goals the ability to rely on a long tradition of Delaware corporate law that provides both the stability and predictability that businesses have come to rely upon.”

If enacted, corporations would become eligible to form, convert or merge into a public benefit corporation beginning August 1, 2013.

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Video from the event is available online.

Legislation requires criminal history checks in connection with virtually all gun sales

(Dover, DE)  Governor Markell issued the following statement after the passage of House Bill 35 in the Delaware House of Representatives:

“Delaware is a step closer to making our citizens safer by requiring a background check on nearly every gun purchase or transfer. The litany of tragic shootings in other states and in our own state should be all the impetus we need to do more to keep guns out of the hands of people who shouldn’t have them. But this is also a common sense measure that is supported by an overwhelming 88 percent of Delawareans.  The changes that were made to the bill today show that Representative Valerie Longhurst and other legislators are listening to the concerns of the community and are willing to make reasonable accommodations. They also made clear that this bill is not about taking people’s guns or about gun registration. I appreciate and thank the legislators, law enforcement officers, and everyday Delawareans who supported HB 35.”

The bill was unveiled by the Governor during a news conference with former Congressman and Governor Mike Castle earlier this month.

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Governor Markell recently spoke about Delaware’s proposed gun safety legislation during an interview on MSNBC’s Morning Joe.

Enacts Balanced Budget, Governor’s Legislative Priorities

DOVER – Capping a legislative session that saw his legislative priorities implemented, Governor Jack Markell Saturday night signed a balanced budget that supports the goals he set forth in his State of the State address: capitalizing on our economic strengths, creating and supporting the workforce of tomorrow through stronger schools, governing responsibly and enhancing Delawareans quality of life.

“This session provided an opportunity for us to build on our existing strengths and to make sound choices to keep Delaware moving forward,” said Markell. “We created more opportunities to put Delawarean’s back to work, invested in our classrooms and our students and we stayed fiscally responsible while remaining committed to the safety and well-being of all Delawareans.”

The Governor thanked legislators for their efforts, which wrapped up after midnight.

“Our strength resides in the capacity of our people, even in challenging times, to work with a common purpose,” said Markell. “I want to thank our legislators for, once again, putting aside their differences and partisanship and instead focusing on how we can create a greater State in which to work, live and visit.”

Two significant achievements during this legislative session focused on increasing government transparency. With broad bipartisan support, the Lobbying Disclosure Bill (SB 185) shines critical sunlight on the lawmaking process and dramatically expands disclosure requirements for lobbyists.  Similarly, the Delaware Elections Disclosure Act (HB 300/310) requires prompt reporting of third-party spending on advertisements during an election season days before they go to the polls. The Act also enhances disclaimer requirements for third parties.

Legislative Highlights

The 2012 Legislative Session saw Governor Markell’s legislative priorities pass, including:

Creating more jobs.

• The FY 2013 budget bill, signed by Governor Markell, fully funds the Strategic Fund, which last year helped several successful companies expand their business in Delaware. Examples of strategic fund investments include:
  • JP Morgan Chase plans to expand its operations in Delaware and add up to 1,200 new jobs in the state. The proposed expansion is one of many announcements of job creation in Delaware’s financial services industry this year. In February, Citibank celebrated the grand opening of its new facility in Wilmington, where 260 people will be employed. Bank of America committed to adding more than 500 jobs over the next three years. M&T Bank is building a new data center in Millsboro adding 50 more jobs to its 450 current workforce there.  Capital One plans to expand by 500 jobs in Delaware, as part of a proposed agreement that was announced last fall. Also supported through a FY12, $1 million investment from the Strategic Fund is the Delaware Rural Irrigation Program (DRIP). DRIP is an economic development and agricultural loan program launched this fiscal year that will help provide irrigation to more than 850 acres of Delaware farmland.  Bloom Energy, which will build its first East-Coast manufacturing center on the 272-acre site formerly occupied by a Chrysler assembly plant, and now owned by the University of Delaware.  Additionally, Amazon is in the process of building a 1 million?square?foot fulfillment center in Middletown, which will bring over 850 jobs to the area.

• Significant progress was also made on important efforts through bipartisan legislative support and authorization.  They include:
  • Executive Order #36, which the Governor signed this spring to tackle outdated, ineffective and redundant regulations while giving a boost to small business.
  • The Veterans Opportunity Tax Credit (HB 275), a new effort to help put recent combat veterans to work when they return from service. It gives companies a $1,500 annual tax credit for each recent veteran they hired.
  • The Governor also signed an agreement with local municipalities to reduce municipal electric rates, therefore attracting new jobs in Delaware. The memorandum, which was also signed by Patrick McCullar, President and CEO of the Delaware Municipal Electric Corporation (“DEMEC”), and the Mayors or town officials of Newark, New Castle, Middletown, Clayton, Smyrna, Dover, Milford, Lewes and Seaford, underscores their shared commitment toward making municipal energy rates more competitive in order to spur job creation, while preserving the core functions and services provided to residents and businesses in the municipal service territories.
  • The budget supports the Delaware Young Farmers Program, a no-interest loan program launched in July 2011 as a way to reduce the capital investment for young people looking to set up agribusiness operations. New farms will be started as a result of the program’s first year.
  • To protect jobs at our state’s three racinos, the Delaware Gaming Competitiveness Act of 2012 (HB 333) improves the ability of the Delaware Lottery and Delaware’s video lottery agents to offer services to lottery players in an increasingly competitive marketplace. The Act authorizes internet gaming under the control and operation of the Delaware Lottery.
  • FY 2013 budget funding for employment and training to support workforce investment and job search efforts; and funding to increase participants in the Department of Labor’s Summer Youth program.

• Investing in our state’s infrastructure is critical to getting people to work and products to customers. The budget makes a strong commitment to that end. Projects finished with last year’s appropriations included:
  • The re-opening of the I-95 Toll Plaza and the establishment of High-Speed E-Z Pass Lanes, a $32 million project fully funded through the American Recovery and Reinvestment Act.
  • Opening the Indian River Inlet Bridge to passenger traffic. The $150 million bridge was erected by Skanska Southeast under a design-build contract with DelDOT. Sixty Delaware business have been suppliers to the project. The bridge is 2,600 feet long, 108 feet wide and situated 45 feet above the inlet.
  • Support for the Newark Regional Transportation Center Station Improvement Project, which puts Delaware on a fast track for economic growth while protecting and improving our quality of life.

Making our schools stronger and more competitive.

• Statewide investments in FY 2012 to strengthen Delaware’s public school system have resulted in significant gains.
  • The budget continues to support investments in early childhood education, including matching last year’s new, $22 million investment, which was a key factor in Delaware receiving $49 million through the federal Race To The Top – Early Learning Challenge Grant. The money will allow Delaware to raise the percentage of high-need children in quality-rated early childhood programs from 20% to nearly 80% over the next four years.
  • The budget supports progress in strengthening student achievements. This past spring, the Governor along with DOE Secretary Mark Murphy announced preliminary results from the Delaware Comprehensive Assessment System (DCAS), which show statewide student gains in reading and math in every grade band.
  • In addition to monetary investments, Governor Markell also invested in educators, signing two bills into law this legislative session that will help districts recruit great teachers. SB 164, sponsored by Sen. Dave Sokola and Rep. Terry Schooley, gives school districts confidence to offer jobs earlier in the year to quality teachers, extending the program another two years. HB 239, also sponsored by Rep. Schooley and Sen. Sokola, extends for three years the state’s authorization in the Teach For America program, offering incentives to place some of the country’s brightest college graduates in the toughest schools.

• Budgetary Highlights in education for FY 2013
  • $27.4 million in Education Sustainment Fund to maintain funding level from loss of Federal Education Jobs Fund Act support.
  • $8.7 million to maintain school classroom size and fully fund unit count (111 units); and fund step increases for School District and Delaware Tech employees and to fund increases for Paraprofessionals.
  • $1.5 million in School Improvement Funds to support grants to low achieving non-Title I schools in accordance with the waiver for No Child Left Behind (NCLB).
  • $920,000 to fully fund the Student Excellence Equals Degree (SEED) and Inspire Scholarship Program for Higher Education.
  • HB 317, which provides that the Department of Education establish a statewide readiness tool that will review a child’s readiness for learning when they enter kindergarten. The tool will be phased in starting in fall 2012 with statewide implementation no later than fall 2015.
  • SB 233, which requires the Department of Safety and Homeland Security to work with schools, districts and first responders to develop a comprehensive school safety plan for each public school and district. The FY 2013 budget includes $400,000 to fund the development of school safety plans.

Enhancing the safety and quality of life for Delawareans and its visitors

• A new investment for FY13 of $13.3 million will go to enhance statewide trails and pathways, an important investment in positioning Delaware as a desirable place to live.
• A $20 million investment in the FY13 budget in Open Space and Agricultural Land Preservation. Last year’s investment in these projects yielded:
  • The purchase of 339 Acres of Sussex County forestland that will now be part of the 12,400-acre Redden State Forest near Georgetown. This purchase marks the latest phase of the multi-year Green Horizons Project to protect working forests, water quality, and wildlife habitat in key environmental regions on the Delmarva Peninsula. The U.S. Forest Service’s Forest Legacy Program provided 75 percent of the funding and the Delaware Open Space Program contributed 25 percent.
  • The launch of the Delaware Bayshore Initiative, part of the national vision for America’s Great Outdoors, which will enhance and promote the Bayshore area as a world-class conservation and low-impact recreation area, strengthen historic local communities, and improve the quality of life for all Delawareans.
  • The preservation of 100,000 acres of farmland, a milestone that protects a fifth of all agricultural land in the state. The average farm size in the program is 159 acres, at an average cost of $1,741 per acre.
• Support for housing, including $3.0 million for State Rental Assistance Program (SRAP) to meet increasing demand. The program assists low-income individuals who require affordable housing and supportive services to live safely and independently in the community. Within the first five months of the program, 129 applications were received and 88 SRAP vouchers were approved. Governor Markell and Attorney General Beau Biden also unveiled a plan that will use the funds the state is receiving from the National Mortgage Foreclosure Settlement to help Delawareans who have been hurt by the housing crisis.

• Operational Achievements/Highlights
  • In an effort to protect the financial safety of Delawareans, the Governor signed a bill (HB 289) that limits the number of so-called payday loans; changes the definition of a short-term loan; establishes a database to track the number of short-term consumer loans an individual obtains over the course of a year and calls for the Banking Commissioner to provide a report on the prevalence of these loans to the General Assembly.
  • SB 226, which implements the recommendations of the Justice Reinvestment Task Force created by Executive Order No. 27. It promotes informed decision-making in the criminal justice system by institutionalizing the use of evidenced-based practices in decisions concerning bail, rehabilitation and probation supervision and helps ensure scarce resources are focused on higher-risk offenders.
  • The passing of SB 160 made permanent a ban imposed last September on a class of designer drugs popularly known as “bath salts.” The new law also gives police and prosecutors more flexibility in dealing with the dangerous drugs.

Governing Responsibly & Transparency

• Serving as good fiscal stewards of public dollars is a key component of governing responsibly. The FY 2013 Budget Bill highlights Governor Markell’s ongoing commitment towards this effort.  For example, the FY13 operating budget:
  • Only appropriated 98% of revenue.
  • Fully funded Rainy Day Fund.
  • Adhered to three-part debt limit.
  • Maintained AAA-bond rating.
  • Invested one-time revenues in infrastructure and economic development.
• Budgetary Highlights for FY 2013 included funding for:
  • Medicaid to address caseload and inflationary growth.
  • The Department of Health and Social Services to support additional community placements and community housing supports.
  • Contributions to the State’s OPEB Trust Fund.
  • The Department of Health and Social Services, Division of Developmental Disabilities Services to support additional community placements and special school graduates.
  • The Department of Services for Children, Youth and Their Families to meet increasing demand for inpatient mental health services.
  • The Elder Tax Relief and Education Expense Fund.
  • The Department of Agriculture for Poultry Disease Research and the Diagnostic Poultry Program.
  • An investment in Agricultural Lands Preservation, including the Delaware Young Farmer Program.
  • The Drinking Water State Revolving Fund, leveraging federal funds as well.
  • The Clean Water State Revolving Fund, leveraging $6.5 million in federal funds.
  • Funds will also support additional State Police vehicles for the Department of Safety and Homeland Security; new Troop 3 in Camden and new Troop 7 in Lewes; and new kitchen construction for Howard R. Young Correctional Institution.

Rep. Schooley, Sens. Henry and Sokola sponsoring measure to increase reporting of bullying, promote Attorney General’s bullying hotline

Wilmington – Noting that one out of every three middle and high school students report being bullied but many other incidents go unreported, Lt. Gov. Matt Denn, Attorney General Beau Biden and legislative leaders unveiled legislation on Friday that would protect students against bullying and add consistency in how such incidents are reported.

Nationally, 8.2 million students are bullied each year and 1 million are cyber-bullied. About 160,000 students stay home from school on any given day because they’re afraid of being bullied. In Delaware, nearly 20 percent of students surveyed last year reported that another student issued a verbal threat against them, while 30 percent reported that they said something to another student to hurt them.

Lt. Gov. Denn said the proposal contains an important provision requiring the Department of Education to annually audit schools to ensure that they are properly investigating and reporting bullying allegations.

“It’s not just having the numbers, though those are important. Letting parents of kids who were bullied know about it is obvious,” Lt. Gov. Denn said. “Less obvious, but just as important, is letting the parents of kids who are doing the bullying know what is going on. Many of these kids, perhaps most, come from families with interested and active parents, who want their kids to do the right thing in school. If those parents know that their kids are engaged in bullying, they will start taking some strong steps at home to deal with the problem.”

The legislation was developed from multiple community forums Attorney General Biden has held talking to students and parents about bullying, and from conversations he and Lt. Gov. Denn have had with district superintendents.

“Kids deserve to be safe at school, but we need to fully understand the challenges we face in order to hold bullies accountable, prevent future incidents, and help students – both bullies and victims – stay on the right path,” Attorney General Biden said. “This legislation addresses the gaps in Delaware’s law that have led to uneven and inaccurate reporting.”

The legislation, which will be filed next week, would address a lack of consistency in how bullying incidents are reported by school districts. For example, Laurel Middle School, which has a four-star commendable rating, had the highest number of incidents (38 in a 344-student school) during the 2010-11 school year, but William Penn High with 1,981 students had zero reported incidents. And only one incident was reported in the entire Smyrna School District.

Under the bill, school districts would be required to report unsubstantiated claims of bullying to the state Department of Education, in addition to the current requirement for reporting substantiated claims. The current law says substantiated claims must be reported within five business days. Often it takes longer than that for a school administrator to verify a student’s claim, so the incident never gets reported.

Additionally, DOE must audit the districts’ reports of bullying statistics annually. Lastly, the Attorney General’s Office’s bullying hotline (1-800-220-5414) must be posted on each school district’s website and in a conspicuous place in each school.

Rep. Terry Schooley, who is the lead House sponsor of the legislation, said that reducing the instance of bullying starts with everyone treating all instances of reported bullying seriously and not tolerating any form of bullying.

“We’re not talking about the old-fashioned ‘kids will be kids’ instances, these are serious situations that are putting kids at risk. Bullying creates fear and intimidation in our schools, and it leads to students performing poorly in school, not going to school for fear of being bullied or in some cases, committing suicide,” said Rep. Schooley, D-Newark. “There is a reluctance to report bullying, but we need everyone – parents, teachers, administrators and students – to say that they will not tolerate bullying and to report all instances, so we can better address this problem.”

Senate Majority Whip Sen. Margaret Rose Henry, one of the prime sponsors of the legislation, said that protecting children from bullying is paramount.

“There’s no magic fix for bullying, much as all of us wish there were one,” said Sen. Henry, D-Wilmington East, a longtime champion of anti-bullying measures. “But these changes will increase accountability on the part of our schools and conspicuous posting of the bullying hotline number, I think, will give parents another tool to address this problem.”

“Schools need to be a place where students feel safe, and all adults and students need to be willing to respond to any physical, verbal and cyber threats,” said Sen. David Sokola, D-Newark, chairman of the Senate Education Committee and a strong backer of anti-bullying measures.

WILMINGTON – Media are invited to join Lieutenant Governor Matt Denn, Attorney General Beau Biden and legislative leaders for a press conference on Friday, March 2, 2012, where they will unveil stronger anti-bullying legislation, discuss their work on cyber-bullying, and introduce Delawareans to a national Special Olympics program being rolled out in Delaware.

They will be joined by General Assembly sponsors Representative Terry Schooley (D-23rd Rep. District) and Senator Margaret Rose Henry (D-2nd Sen. District). Sen. Henry will be representing legislation sponsor Senator Dave Sokola (D – 8th Sen. District), who cannot attend due to a previous commitment in his role as Chair of the Senate’s Education Committee.

Other invited guests include the Delaware Department of Education, members of the General Assembly who are co-sponsors, members of the Delaware Bullying Prevention Association, Department of Justice, Prevent Child Abuse Delaware, Early Childhood Council, Department of Services for Children, Youth, and Their Families, and Special Olympics.

When: Friday, March 2, 2012
10:00am – 11:00am

Where: Attorney General’s Conference Room
Carvel State Office Building
820 N. French Street, 6th Floor
Wilmington