Rep. Sean Lynn

Section 1 of the Act amends subsection (b)(1) of section 12A-103 of Title 6 to remove a reference to testamentary trusts that is either a redundancy or otherwise might conflict with new section 3550 of Title 12 (which is a part of the Act). Section 2 of the Act addresses statutes under Chapter 33 of Title 12 and (i) amends section 3315(b) to make clear that a discretionary interest in a trust is not a property right and to define more clearly what constitutes a discretionary interest, and also to make clear that these clarifications do not affect the standard of review applicable to the discretion of a trustee or other fiduciary; (ii) amends section 3326 to expand its application to the resignation of officeholders (such as advisers under section 3313 or designated representatives under section 3339) and not just to the resignation of trustees; (iii) amends section 3327 to expand its application to the removal of officeholders (such as advisers under section 3313 or designated representatives under section 3339) and not just to the removal of trustees, and to permit other officeholders (in addition to trustors and beneficiaries) to petition to remove an officeholder; (iv) amends section 3331 to expand its application to governing instruments (beyond just wills and trust instruments, such that it is not intended to change the statute’s application to wills and trust instruments); (v) amends section 3339 to make clear that a designated representative begins to serve when the representative is appointed (and not merely when authorized) and has accepted the role (whether by written acceptance or through service or other action signifying acceptance), to prioritize appointment methods (that is, to provide that certain appointment methods are available if a designated representative is not appointed under previously-enumerated methods), to define for what purposes a designated representative may be appointed, to provide that the surviving parent or parents or custodial parent of a minor for whom a designated beneficiary has been appointed must be given notice of such appointment, to enable a trustor to appoint a designated representative to represent and bind beneficiaries who are minors or are otherwise described in paragraph (b)(2) of section 3339 in any nonjudicial matter, to enable a beneficiary to appoint a designated representative to represent and bind such beneficiary in any nonjudicial matter, and to provide that a person accepting appointment as a designated representative submits to personal jurisdiction in this State regarding any matter involving the trust (without precluding other methods of obtaining jurisdiction over the designated representative); (vi) amends section 3342 to make clear that, consistent with section 3303 of Title 12, a trustor may opt out of the application of section 3342 by express reference; and (vii) amends section 3344 to make clear that the statute applies unless a governing instrument expressly provides that a trustor may not be reimbursed by the trust for the trustor’s income tax liability, to expand the scope of permissible reimbursement to include county, metropolitan-region, city, local, foreign, and other income taxes (in addition to state income taxes), and to make clear that the statute does not apply if it would eliminate or reduce a marital or charitable deduction available to any person for state or federal income, gift, or estate tax purposes. Section 3 of the Act addresses statutes under Chapter 35 of Title 12 and (i) amends section 3536 to add to the flush language of subsection (c) to provide that a person who becomes a beneficiary of a trust due to the exercise of a power of appointment by someone other than such person is not considered under this title to be a trustor of a trust—even if the person who so became the beneficiary created and funded the trust and granted the power of appointment of another, such that if the trustor did not otherwise retain a beneficial interest in the trust that was otherwise reachable (e.g., the trustor did not name himself as a beneficiary of the trust at the time it was created), the mere fact that some other person exercises a power of appointment to later make the trustor a beneficiary will not create an interest that is reachable by the trustor’s creditors—which change would abrogate the common law relation back doctrine as it pertains to who is to be deemed the trustor of a trust created upon exercise of a power of appointment, if such doctrine were extant in Delaware, although the applicability of the common law relation back doctrine to this particular issue does not appear to have been adjudicated or acknowledged in any decisional case law in Delaware; (ii) amends section 3545 to add a new subsection (c), which confirms that other writings that create, modify, or revoke trusts and that are not described in subsection (a) of section 3545 are validly executed if they are executed in conformity with subsection (a), but also confirms that subsection (c) does not limit the creation, modification, or revocation of a trust by other means that Delaware law permits, and further confirms that subsection (c) does not apply to trusts formed under Delaware’s Statutory Trust Act and other trusts formed for the purpose of consummating a commercial transaction; and (iii) adds a new section 3550 providing that governing instruments and certain other trust-related documents, if validly executed under the sections of the Delaware Code that apply to those documents, may also be executed under Chapter 12A of Title 6 of the Delaware Code (the Uniform Electronic Transactions Act). Section 4 of the Act provides that Sections 2 and 3 apply to trust whenever created.

Section 1 of the Act amends § 160(c) to clarify that shares of a corporation's capital stock held by any other entity (whether a corporation or non-corporate entity) are not entitled to be either voted or counted for quorum purposes if the corporation directly or indirectly holds a majority of such other entity's voting power entitled to vote generally in the election of, or is otherwise entitled to appoint or act as, the governing body of such entity. This amendment to § 160(c) should not be construed to create any negative implication with respect to the inclusion or exclusion of non-corporate entities in connection with any other section of the DGCL. Section 2 of this Act provides that the effective date for Section 1 of this Act is to be August 1, 2021.

Currently, blood lead level screening and testing rates are well below what the Division of Public Health would expect them to be based on the risk factors that determine when screening or testing is necessary. This Act simplifies the requirements and process for health-care providers and eliminates confusion that may be causing the low compliance rate for screening or testing. Specifically, this Act does the following: (1) Defines “screening” and “testing” for clarity. (2) Mandates screening, defined as a capillary blood test, at or around 12 and 24 months of age. (3) Clarifies insurance coverage for the costs of compliance with the Act. (4) Directs the Division of Public Health to report on elevated blood lead levels to the General Assembly annually and to develop regulations to implement and enforce the Act within 12 months of being enacted. (5) Makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.

This bill clarifies that the definition of employees who receive gratuities also includes employees that receive tips, that these employees earn more than 50% of their income from tips or gratuities. This bill clarifies that employers may continue to pay a tipped minimum wage to primary direct service employees under this bill. Employers cannot direct employees to engage in tip pooling in Delaware—tip pooling arrangements must be controlled by the employees themselves. It also clarifies that tips automatically added to a bill or added to credit card charges are to be treated like tips or gratuity and must be paid by the employer directly to the employee at the next pay period as opposed to being held by the employer waiting to receive payment from the credit card company and that the employer may not deduct service fees from the employees tips or gratuities.

This bill continues the practice of amending periodically the Delaware Revised Uniform Limited Partnership Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act. Section 1. This section amends Section 17-106 of the Act to add subsection (e) to provide a safe harbor procedure for ratifying acts or transactions that may be taken by or in respect of a limited partnership under the Act or a limited partnership agreement that are void or voidable and waiving failures to comply with requirements of a partnership agreement that make such acts and transactions void or voidable. New subsection (e) is intended to provide a rule different from the rule applied in Composecure, L.L.C. v. Cardux, LLC, 206 A.3d 807 (Del. 2018), and Absalom Absalom Trust v. Saint Gervais LLC, 2019 WL 2655787 (Del. Ch. June 27, 2019), that acts or transactions determined to be void generally may not be ratified. The penultimate sentence of new subsection (e) confirms that void or voidable actions may be ratified or requirements may be waived by other means permitted by law, and accordingly, new subsection (e) is not intended to preempt or restrict other valid means of ratifying acts or transactions or waiving requirements or to impair the effectiveness of any valid ratification or waiver previously effected. Section 2. This section amends Section 17-220 of the Act to make a conforming change. Section 3. This section amends Section 17-305 of the Act to make certain clarifying and conforming changes, and to provide that when a limited partner is entitled to obtain information for a stated purpose (whether pursuant to Section 17-305 or a partnership agreement), the limited partner’s right shall be to obtain such information as is necessary and essential to achieving that purpose, unless such right has been expanded or restricted in the partnership agreement. The first sentence of subsection (f) is intended to (i) change current law, as set forth in Murfey v. WHC Ventures, LLC, 236 A.3d 337 (Del. 2020), that the “necessary and essential” test does not apply by default to a limited partner’s contractual right to obtain information from a limited partnership for a stated purpose, and (ii) clarify that the “necessary and essential” test applies to a limited partner’s right under Section 17-305(a) of the Act to obtain information from a limited partnership for a purpose reasonably related to the limited partner’s interest as a limited partner. Section 4. This section amends Section 17-403(c) of the Act to provide that a general partner may delegate any of its rights, powers or duties irrespective of whether it has a conflict of interest with respect to the matter as to which such rights, powers or duties are being delegated, and that the person or persons to whom any such rights, powers or duties are being delegated shall not be deemed conflicted solely by reason of the conflict of interest of the general partner. The amendments to Section 17-403(c) create a different rule than the rule applied in cases such as Wenske v. Bluebell Creameries, Inc., 214 A.3d 958 (Del. Ch. 2019), that a conflicted principal is legally disabled from delegating authority over the subject matter as to which the principal is conflicted even to an independent delegatee. Section 5. This section amends Section 17-1201 of the Act to clarify the effect of subchapter XII of the Act and to provide for the manner in which a limited partnership may become a statutory public benefit limited partnership. Section 6. This section amends Section 17-1202(a) of the Act to provide that a partnership agreement of a statutory public benefit limited partnership must state that the limited partnership is a statutory public benefit limited partnership and must set forth the specific public benefit or benefits to be promoted by the limited partnership, to provide that the partnership agreement shall control as among the partners and other persons who are party to or otherwise bound by the partnership agreement in the event of any inconsistency between the public benefit(s) as set forth in such agreement and the certificate of limited partnership, to require amendment of the certificate of limited partnership of a statutory public benefit limited partnership in specified circumstances, and to clarify the effect of subchapter XII of the Act. Section 7. This section repeals Section 17-1203 of the Act. Section 8. This section amends Section 17-1204 of the Act to make conforming changes. Section 9. This section amends Section 17-1205 of the Act to make a conforming change. Section 10. This section provides that the proposed amendments to the Act shall become effective August 1, 2021.

This bill continues the practice of amending periodically the Delaware Limited Liability Company Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act. Section 1. This section amends Section 18-106 of the Act to add subsection (e) to provide a safe harbor procedure for ratifying acts or transactions that may be taken by or in respect of a limited liability company under the Act or a limited liability company agreement that are void or voidable and waiving failures to comply with requirements of a limited liability company agreement that make such acts and transactions void or voidable. New subsection (e) is intended to provide a rule different from the rule applied in Composecure, L.L.C. v. Cardux, LLC, 206 A.3d 807 (Del. 2018), and Absalom Absalom Trust v. Saint Gervais LLC, 2019 WL 2655787 (Del. Ch. June 27, 2019), that acts or transactions determined to be void generally may not be ratified. The penultimate sentence of new subsection (e) confirms that void or voidable actions may be ratified or requirements may be waived by other means permitted by law, and accordingly, new subsection (e) is not intended to preempt or restrict other valid means of ratifying acts or transactions or waiving requirements or to impair the effectiveness of any valid ratification or waiver previously effected. Section 2. This section amends Section 18-217 of the Act to make a conforming change. Section 3. This section amends Section 18-305 of the Act to make certain clarifying and conforming changes, and to provide that when a member is entitled to obtain information for a stated purpose (whether pursuant to Section 18-305 or a limited liability company agreement), the member’s right shall be to obtain such information as is necessary and essential to achieving that purpose, unless such right has been expanded or restricted in the limited liability company agreement. To the extent current law is that the “necessary and essential” test does not apply by default to (i) a member’s right under Section 18-305(a) of the Act to obtain information from a limited liability company for a purpose reasonably related to the member’s interest as a member, or (ii) a member’s right under a limited liability company agreement to obtain information from a limited liability company for a stated purpose, the first sentence of subsection (g) is intended to change that law. Section 4. This section amends Section 18-407 of the Act to provide that a member or manager may delegate any of its rights, powers or duties irrespective of whether it has a conflict of interest with respect to the matter as to which such rights, powers or duties are being delegated, and that the person or persons to whom any such rights, powers or duties are being delegated shall not be deemed conflicted solely by reason of the conflict of interest of the member or manager. The amendments to Section 18-407 create a different rule than the rule applied in cases such as Wenske v. Bluebell Creameries, Inc., 214 A.3d 958 (Del. Ch. 2019), that a conflicted principal is legally disabled from delegating authority over the subject matter as to which the principal is conflicted even to an independent delegatee. Section 5. This section amends Section 18-1201 of the Act to clarify the effect of subchapter XII of the Act and to provide for the manner in which a limited liability company may become a statutory public benefit limited liability company. Section 6. This section amends Section 18-1202(a) of the Act to provide that a limited liability company agreement of a statutory public benefit limited liability company must state that the limited liability company is a statutory public benefit limited liability company and must set forth the specific public benefit or benefits to be promoted by the company, to provide that the limited liability company agreement shall control as among the members, the managers and other persons who are party to or otherwise bound by the liability company agreement in the event of any inconsistency between the public benefit(s) as set forth in such agreement and the certificate of formation, to require amendment of the certificate of formation of a statutory public benefit limited liability company in specified circumstances, and to clarify the effect of subchapter XII of the Act. Section 7. This section repeals Section 18-1203 of the Act. Section 8. This section amends Section 18-1204 of the Act to make conforming changes. Section 9. This section amends Section 18-1205 of the Act to make a conforming change. Section 10. This section provides that the proposed amendments to the Act shall become effective August 1, 2021.

Under the Governor’s Eleventh Modification of the COVID-19 State of Emergency Declaration, and continuing upon passage of Senate Bill No. 247, remote notarization and witnessing by Delaware attorneys via audio-visual technology has been permitted. This provision is currently set to sunset on June 30, 2021. This Act extends the provision through June 30, 2022.

This Resolution: 1) Celebrates Senate Bill No. 56 and the immediate investment of targeted funding for student needs; 2) Describes the need for additional action from the General Assembly to update and modernize remaining underlying education funding issues; 3) Requires the Department of Education to report information to help illuminate systemic inequities in the current education funding system to inform future legislative proposals.

This bill continues the practice of amending periodically the Delaware Revised Uniform Partnership Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act. Section 1. This section amends Section 15-103 of the Act to confirm and clarify the effect of modifications provided in a statement of partnership existence or a statement of qualification and in a partnership agreement as contemplated by Sections 15-201(a), 15-203, and 15-501. Notwithstanding any modifications provided, such as, that a partnership is not a separate legal entity, all other provisions of this chapter, including Section 15-801, continue to apply, unless the partnership agreement provides that such other provisions do not apply. Section 2. This section amends Section 15-202 of the Act to add subsection (g) to provide a safe harbor procedure for ratifying acts or transactions that may be taken by or in respect of a partnership under the Act or a partnership agreement that are void or voidable and waiving failures to comply with requirements of a partnership agreement that make such acts and transactions void or voidable. New subsection (g) is intended to provide a rule different from the rule applied in Composecure, L.L.C. v. Cardux, LLC, 206 A.3d 807 (Del. 2018), and Absalom Absalom Trust v. Saint Gervais LLC, 2019 WL 2655787 (Del. Ch. June 27, 2019), that acts or transactions determined to be void generally may not be ratified. The penultimate sentence of new subsection (g) confirms that void or voidable actions may be ratified or requirements may be waived by other means permitted by law, and accordingly, new subsection (g) is not intended to preempt or restrict other valid means of ratifying acts or transactions or waiving requirements or to impair the effectiveness of any valid ratification or waiver previously effected. Section 3. This section amends Section 15-401(l) of the Act to provide that a partner may delegate any of its rights, powers or duties irrespective of whether it has a conflict of interest with respect to the matter as to which such rights, powers or duties are being delegated, and that the person or persons to whom any such rights, powers or duties are being delegated shall not be deemed conflicted solely by reason of the conflict of interest of the partner. The amendments to Section 15-401(l) create a different rule than the rule applied in cases such as Wenske v. Bluebell Creameries, Inc., 214 A.3d 958 (Del. Ch. 2019), that a conflicted principal is legally disabled from delegating authority over the subject matter as to which the principal is conflicted even to an independent delegatee. Section 4. This section amends Section 15-403 of the Act to make certain clarifying and conforming changes, and to provide that when a partner is entitled to obtain information for a stated purpose (whether pursuant to Section 15-403 or a partnership agreement), the partner’s right shall be to obtain such information as is necessary and essential to achieving that purpose, unless such right has been expanded or restricted in the partnership agreement. To the extent current law is that the “necessary and essential” test does not apply by default to (i) a partner’s right under Section 15-403(a) of the Act to obtain information from a partnership for a purpose reasonably related to the partner’s interest as a partner, or (ii) a partner’s right under a partnership agreement to obtain information from a partnership for a stated purpose, the first sentence of subsection (f) is intended to change that law. Section 5. This section provides that the proposed amendments to the Act shall become effective August 1, 2021.

The minimum wage for employees who receive tips or gratuities has not changed since 1983, when the overall state minimum wage was $3.35 per hour. Tipped wage workers at that time were paid a percentage – 66.67% – of the minimum wage, which was $2.23 per hour. In 1989, the General Assembly changed the hourly wage to a flat $2.23 per hour, where it has remained since. Had the calculation been left unchanged, the tipped wage would have increased along with the minimum wage. Therefore, this bill ensures that employees who receive tips or gratuities also receive a minimum wage increase when other employees in the State receive a minimum wage increase.