April 20, 2012 – Week 15

Dear [[FIRSTNAME]],

Legislative Session Nears Adjournment
This report may be our last report of the session, given the target date of adjournment of next Friday. It is looking more like the session will end some time the following week. At this point, bills are moving too quickly and being changed by conference committees on an hourly basis, so a weekly report would be outdated soon after publication. Look for our Legislative Summary the Friday after adjournment for a complete report of what happened and how it may affect your business.

Renewable Bill Falters
The Statehouse was buzzing at the end of last week with a surprising turn of events on H. 468, this year’s renewable energy bill. The bill will enact a renewable portfolio standard in Vermont and expand the standard offer program. The Senate Natural Resources Committee voted against moving the bill with Senator Mark MacDonald (D-Orange Co.) joining Senators Randy Brock (R-Franklin Co.) and Joe Benning (R-Caledonia Co.) in voting down the bill. The move left many wondering about the fate of the legislation which is a priority for the Shumlin Administration as well as many members of the House. There were two options for the bill to move forward. One, Senator MacDonald could change his mind. Another option would have been to incorporate pieces of the bill in another bill. In the end, the Committee amended the bill and voted it out with Senator MacDonald voting to move the bill forward. The bill now goes to the Finance Committee, where there could be additional opportunity to make changes to the bill to reduce its impact on electric rates.

Health Care Reform Moves Ahead
The Senate Finance Committee completed their work on H. 559, this year's health care reform bill. The central issue in the bill for the business community is whether the health insurance exchange will be voluntary or mandatory. The exchange will be an online marketplace where small businesses and individuals will go to purchase health insurance starting in 2014. The Shumlin Administration would like the exchange to be mandatory, meaning that small businesses would only be able to buy insurance through the exchange and would no longer be able to buy insurance through a broker, a chamber of commerce or any other source from which they currently purchase coverage. The House endorsed the Shumlin Administration’s plan in H.559 and this week the Senate Finance Committee also voted to make the exchange mandatory.

While the Chamber and GBIC support health care reform, we are concerned that making the exchange mandatory will place undue burden on our small businesses.  The lion's share of our members will be eligible to purchase insurance in the Exchange and the level of change that these small businesses will see is enormous. Our members have indicated that they prefer a voluntary exchange because they feel it might give them other options that they would not otherwise have. They state that those options might allow them to maintain a similiar coverage to what they currently offer and additional choices are reassuring when considering such a wholesale change. Futhermore, we feel that if the exchange is competitively priced then businesses will gravitate towards it. However, to make small businesses the test case could potentially put them in a uniquely difficult position. While our organizations support health care reform as health care is a significant expense for our members, allowing businesses choices over the type of coverage they purchase as reform takes place, does not mean that reform cannot move forward.

Labor Bills Considered
It was a story of two labor bills this week at the Statehouse. The House gave final approval to H.762, an omnibus labor bill, on a unanimous roll call vote. The bill includes a provision which will allow single independent contractors to register as “sole contractors” allowing businesses to hire them without needing to cover them on unemployment and workers’ compensation insurance. Fixing the issues our members have encountered with regard to using independent contractors has been a priority of our organizations. We believe this bill is a good first step in doing that. We wish to thank Representatives Heidi Scheuermann (R-Stowe) and Chip Conquest (D-Newbury) for their hard work to ensure this progress was made as well as all of the members of the House Commerce Committee. The bill now moves to the Senate.

Meanwhile, the Senate’s omnibus labor bill, S. 137, encountered problems on the Senate floor. The Senate attempted to take up S. 137 at the end of last week but it was quickly passed over after several objections were raised about provisions in the bill. The bill contains several controversial items including requiring non-union school and municipal employees to pay a fair share agency fee and changes to workers’ compensation insurance. Amendments to unionize childcare workers are also likely to be offered. The measure is very contentious. As such, Senate President Pro Tem John Campbell delayed consideration of the bill until the end of the week to allow the Senate to act on less controversial measures.

Permit Appeals Changes Controversial
 S.28, “an act relating to the permit process for protecting the environment” is being considered by the House Natural Resources Committee. Ernie Pomerleau testified on behalf of our members in support of the Administration’s proposal to have the Environmental Court review the record developed by the District Commission for Act 250 applications. He also made the case for changing the burden of proof to be on the appellant. Despite numerous meetings of stakeholders, it appears a compromise solution will not be achieved this session.

Cloud Computing Remains Foggy
The Senate Finance Committee took testimony from GBIC President, Frank Cioffi, regarding the cloud tax issue. The bill under consideration in this committee, S.173, is being championed by Senator. Illuzzi (R-Essex/Orleans) and Senator. Randy Brock (R-Franklin Co.) and includes:

• A refund for taxes paid after December 31, 2006 if a documented request is made of the commissioner of taxes
• A clarification that charges for remotely accessed software are not subject to a sales tax

Our organizations support S.173, as we believe the state should be positioning itself to be encouraging a sector of the economy that is increasing employment and providing well-paying, innovative jobs for Vermonters.

The Governor, in his weekly press conference suggested a three year moratorium on the issue may be the solution to allow the impacts of such a tax policy decision on job creation to be determined. As of this writing, no action had been taken by the Senate Finance Committee.

Credit Check Bill
The Senate Economic Development Committee took testimony on H.42, an act relating to employment decisions based on credit information. The bill would prohibit employers, unless specifically exempted, from performing credit checks on potential employees. The bill was passed by the House in 2011. The Chamber and GBIC Government Affairs staff testified with concerns about the bill explaining that employers use credit checks sparingly when they are hoping to hire someone and that the exemptions in the bill could lead to confusion amongst employers. Members of the Committee seemed to have a number of questions about the bill and at this late point in the session it seems unlikely that the bill will move forward.

Solid Waste Collection to be Expanded
H.485, the Solid Waste bill is on the Senate calendar for action and now includes bottle deposits on other beverage containers as well as a prohibition on the use of carryout nonrecyclable plastic bags. The Senate version of the bill calls for mandatory collection of recyclable materials after the first of July of 2014. The bill also calls for mandatory collection of leaf, wood and yard waste by July of 2015 and food residuals after July of 2018.

Education Bills Still in Play
The Senate amended H.440 which calls for a Secretary of Education to be appointed by the Governor following the recommendation of three candidates by the Board of Education and a confirmation of the Secretary by the Senate. The Board of Education’s role would be narrowed and they would be responsible for policy development involving citizen input.

S.233 was a bill that originally proposed to gradually increase the mandatory age of school attendance. It now includes provisions for dual enrollment of high school students in college courses and the encouragement of flexible pathways to increase Vermont’s secondary school completion rate. The Senate and House (H.776) are still trying to identify a funding source for this important initiative, but it appears concerns about its impact on the Education Fund will lead to the bill’s demise this session.

The Check is In the Mail?
The Senate Appropriations Committee is proposing to send surplus general fund revenues back to the taxpayers via rebate checks rather than the House proposal of shoring up the Education Fund. Senator Kitchell (D-Caledonia) wants to ensure a direct benefit to taxpayers rather than the hidden Education Fund transfer which is taken up by more school spending. According to initial Joint Fiscal Office projections, a two to three cent increase in the education property tax rate is needed this year and if schools continue to average two percent spending increases, the tax rate may need to increase by seven cents in 2014.

Revenues Looking Better
Administration Secretary Jeb Spaulding released new revenue numbers. Spaulding reported that after three consecutive months of below target revenues, the month of March raised nearly $7.5 million in revenues above the target for the General Fund. However, Transportation Fund revenues were 6.5 percent less than the target.

Other bills

Senator Illuzzi is proposing an amendment to the miscellaneous tax bill that would extend the successful Vermont Employment Growth Incentive Program by only one year instead of the five year period adopted by the House. Yet another study of the program is being requested as well.

S.237 establishes a Genuine Progress Indicator to measure Vermont’s economy while accounting for other environmental and social well-being factors. The bill passed by the House pared down the Senate version and appears to be headed for a conference committee.

H.496, a bill which seeks to preserve Vermont’s working landscape, was originally allocated $1.5 million from the Senate Agriculture Committee, but was stripped of funding by the Appropriations Committee.