April 29, 2011 – Week 16

The time for bills to move is running out as the Legislature’s target adjournment date, May 7, draws nearer. House Republicans have indicated that they will not vote to suspend rules, which is required in order to act on a bill before it appears on the calendar for second reading. House Minority Leader, Don Turner (R-Milton), believes bills deserve a thorough vetting and that legislators should have sufficient time to consider them before casting a vote. This turn of events could make the May 7 date a more difficult target to reach. With that said, this report is expected to be our last weekly legislative update. Once the Legislature adjourns, look for our Legislative Summary for a comprehensive account of actions taken by the Legislature that may affect your business.

The Senate took up H. 202, the single payer health care bill, this week. The bill has three main components:

• It sets up a health care exchange, per the federal Affordable Care Act, whereby small businesses and individuals would compare and purchase insurance plans. The bill does not determine whether businesses with fewer than 50 or 100 employees would purchase plans in the exchange. The bill does state the exchange should include plans offered by at least two insurers but it is unclear whether insurance will be available outside of the exchange and whether these small employers will be able to access federal tax credits if they purchase insurance outside the exchange.
• It continues Vermont’s efforts to reduce health care costs through reform of payment to providers and looks at new opportunities for savings through efforts like administrative reductions.
• It creates a five person board to plan for, and implement, a single payer system of health care for all Vermonters by 2017. As part of that process, the Secretary of Administration would be required to provide the legislature with a plan to pay for the system by January 2013.

During the Senate’s consideration of the bill, several amendments were offered. Senator Illuzzi (R-Essex/Orleans Co.) offered two amendments to the bill with regard to the health care exchange. One would have limited businesses who would purchase in the exchange to those with 50 or fewer employees and the second would have allowed the purchase of plans both in, and outside, of the exchange. Neither amendment was adopted. Senator Snelling (R-Chittenden Co.) offered an amendment to remove language referencing who should purchase in the exchange in order to allow the issue to be considered more fully. The amendment was adopted, as was one offered by Senator Miller (D-Chittenden Co.)  to study the advantages and disadvantages of allowing the purchase of insurance only within the exchange, or outside of it as well. In explaining her amendment, Senator Miller talked about her support for changes in our health care system but noted “if we don’t listen to the valid concerns of our employers, we are not doing our jobs.”

The Senate passed H. 202, as amended, on a 21 to 9 vote. Senator Snelling (R-Chittenden Co.) and Senator Mazza (D-Grand Isle/Chittenden Co.) both voted against the bill. In explaining her vote, Senator Snelling mentioned her concern that there are too many unanswered questions and that she remained unconvinced that it was necessary to move so fast on the bill. The bill is now in conference committee but is not expected to be changed significantly.

H.436, known as the Miscellaneous Tax Bill, is the Legislature’s annual opportunity to tinker with the state’s revenues and taxation policies. This bill is now in conference committee. The tax bill passed by the Senate includes the following:

• A one cent increase in property tax rates ($0.87 for homesteads and $1.36 for nonresidential) and a base education payment of $8,544
• A 53 cent increase in the cigarette tax, versus 27 cents proposed by the House
• Increases in health care provider assessment and claims assessments of 0.9 for health and dental claims
• Establishment of a five member State Revenue System Review Commission charged with reviewing recommendations of Blue Ribbon Tax Structure Commission and offering their own recommendations based on an integrated evaluation of the state’s revenue system including the financing of education. (Recommended by your Chamber)
• An examination of Renewable Energy Property Tax issues
• An exclusion of amounts paid by self-employed people for health insurance premiums from the definition of household income for purposes of income sensitivity
• Requirements for S corporations and limited liability companies to file composite returns if they have more than 100 nonresident shareholders
• Removal of House passed tax increment finance (TIF) provisions for Colchester which will make it easier to use the financing technique for community infrastructure, but addition of audit provisions for all TIFs.
• A change to the date that Vermont Economic Growth Incentive claims must be filed from the last day of February to the last day of April
• Changes to Downtown and Village Center Tax Credits
• Raising the exemption for nonprofit ticket sales from the sales tax to $100,000
• Notification of Vermont sales tax due for online retailers and auction sites selling to Vermonters rather than an internet sales tax which was originally proposed by two different House and Senate bills
• A spirituous liquor tax is now a graduated tax based on amount of sales

The Jobs Bill, H.287, was being reviewed by the Senate Finance Committee and its contents remain uncertain. Many provisions could be deleted and end up being folded into the Budget bill. The bill includes a total amount of $525,000 to be allocated for:

• $25,000 to the department of labor for the long-term unemployed hiring incentive
• $475,000 to the agency of agriculture, food and markets for various programs to promote diversified agriculture including a local foods coordinator
• $25,000 to the Agency of Commerce and Community Development for the Vermont Employee Ownership Center

General Funds are also targeted specifically in support of economic development as follows:

• $100,000 for an office of the creative economy
• $75,000 for performance grants for regional workforce development activities
• $23,895 for Vermont career internship program
• $40,000 for econometric modeling to evaluate nets costs of government contracts to encourage in-state purchasing

After a very speedy consideration by the Senate Natural Resources and Energy Committee, H.56, this year's energy bill, stalled a bit in the Senate Finance Committee this week. While the bill has a couple of provisions that could put upward pressure on rates, a more robust energy bill is expected next year. The Department of Public Service is in the process of drafting a state energy plan that is expected to be available for review and comment in October, leaving time for it to be finalized prior to the start of the legislative session in January 2012. The legislature is likely to use the plan to develop a more comprehensive energy bill next year.

As mentioned in previous reports, the House passed H.450, the reference check bill, with widespread support for the changes in the bill. However, with Senate morning committees shut down, Senate Judiciary Committee Chair Sears (D-Bennington Co.) did not feel his Committee had sufficient time to do their due diligence on the bill. As such, the Committee included an extension of the implementation date of Act 157 to July of 2012 in another piece of legislation. Doing so should allow the legislature to reconsider the issue next year and prevent employers from having to implement the rigorous requirements that Act 157 would have imposed.

A bill about the permitting process, H.332, became a resolution (J.R.H.19) that asks the Administration to report back next year with recommendations to improve the process. This resolution passed the House, and is pending action in the Senate.

S.78, the telecommunications bill, has been passed out of the House Commerce Committee, with some minor changes.  Once the House passes the bill, it is likely that the Senate will concur with the changes in order to avoid a committee of conference.

Bills in Conference Committee

H.275, the Veteran’s Tax Credit
H.26, Phosphorus Use Restrictions
H.436, Tax bill
H.441, Budget bill
H.446, Capital budget
H.443, Transportation budget

Other Bills Still In Play

H.185, Fees and Charges for Propane tanks in Senate Finance
H.198, Complete streets for all transportation users, in Senate Transportation
S.49, Commercial vehicle operation on interstate system on Senate Calendar
S.53, PreKindergarten Limits on Average Daily Membership passed House
H.258, the Environmental Violations bill is in Senate Judiciary
H.160, a prohibition of deceptive advertising for florists is included in the Jobs bill

Bills can be found online by clicking here.