HB 360 – Direct Surplus Rebate Payments to Delaware Residents

Lawmakers filed a bipartisan bill Friday, House Bill 360, that is designed to help offset residents’ recent hardships and ease the financial burden many are facing.

Under the bill, Delawareans who filed 2020 income taxes would receive payments automatically; they would not have to take any action to receive the money.

The 2022 Delaware Relief Rebate Program would create a relief rebate – a one-time direct payment of $300 per Delaware resident taxpayer who filed personal income tax returns for tax year 2020 and adult residents who did not file a 2020 tax return. The rebate would not be subject to Delaware income taxes.

Payments to more than 600,000 resident taxpayers – the vast majority of recipients – could be distributed about six weeks after the bill is signed into law.

The bill also would instruct the Department of Finance to establish a process to provide the relief rebate to resident adults who did not file a 2020 state income tax return – such as seniors and lower-income residents – by identifying adult residents through existing databases held by other state agencies, such as the Division of Motor Vehicles. Those residents would receive their rebate as they are identified.

House Bill 360 Sponsors	Yes Votes	No Votes
Longhurst, Schwartzkopf, Mitchell, Baumbach, Bennett, Bentz, Bolden, Bush, Carson, Cooke, Dorsey Walker, Freel, Griffith, Heffernan, K.Johnson, Kowalko, Lambert, Lynn, Matthews, Minor-Brown, S.Moore, Morrison, Osienski, K.Williams, D.Short, Dukes, Yearick
Townsend, Sokola, Lockman, Ennis, Gay, Hansen, Paradee, Sturgeon, Hocker, Pettyjohn
Current Status:

The Department of Finance would then work with the Department of Technology and Information to implement a process by which eligible residents who have not been identified by other means could apply for and receive the relief rebate, subject to verification of their identity and eligibility.

As part of the economic recovery, the state has experienced a significant revenue surplus, which the General Assembly has used to provide record funding for the state’s capital budget, known as the Bond Bill. These investments in infrastructure mean that roads and bridges are being repaired, schools and libraries are being built, and broadband internet is being spread to all corners of the state.

But with a projected fiscal 2023 budget surplus approaching $1 billion, lawmakers determined that providing direct relief to residents is the best way address the economic hardships that rising prices at the grocery store and gas pump are creating.

With gas prices climbing well north of $4 per gallon, lawmakers considered a gas tax holiday. However, tax revenue from the gas tax is pledged to our bonds in the Transportation Trust Fund making a holiday difficult because the state would be in immediate default of its bond agreements. Further, there is no guarantee that the entire savings would be passed onto the consumer, nor would a gas tax holiday help lower-income residents who rely on public transportation.

The relief rebate would provide a direct payment to residents and allow them to use those funds to offset additional expenses.

Providing a $300 rebate for each of the more than 600,000 Delawareans who filed a 2020 tax return would cost more than $180 million. Another $50 million would be appropriated from fiscal 2023 funds to cover the estimated 150,000 residents who did not file 2020 taxes but are still eligible for the relief rebate.

Last week, the Delaware Economic and Financial Advisory Council met to review updated revenue projections for the current fiscal 2022. DEFAC is projecting an additional $206 million in revenue for this fiscal year above previous estimates, which would be used to fully fund the rebate program.

HB 360 has been assigned to the House Administration Committee and will be heard in committee today.