March 11, 2011 – Week 9

The House Natural Resources Committee was expected to pass out a renewable energy bill, H.56, later today. The bill, which has changed significantly from earlier versions, still includes provisions of interest to our members. The bill would require utilities to provide an added financial incentive to customers who install solar electric panels. The bill would also establish a new 55-cent per customer per month charge to fund the Clean Energy Development Fund. Contributions to the fund currently come from Entergy Vermont Yankee. The charge would raise $2.38 million and includes an expiration date of this assessment. A provision that utilities purchase 35 megawatts of biomass energy from two proposed plants was removed from the bill but a provision that they purchase 20 megawatts from an existing facility in Ryegate, Vermont remains.

The House Health Care Committee had to reschedule their public hearing on H.202 to Monday, March 14 due to Monday’s snowstorm. The Committee continued to take testimony on the bill this week. They will hear from a number of Chamber members today, including Al Gobeille, owner of Gobeille Hospitality Group, Christopher Leff with Paul, Frank + Collins, and Mike Sessions, Senior Vice President with Pizzagalli Construction. While the Chamber understands that our current health care system is not sustainable, H. 202 does not include a financing mechanism for the single payer framework it sets up. We need to be able to judge how any such proposal will affect our members’ ability to remain in Vermont, create jobs and start new companies. To read our health care principles click here.

Members should contact their legislators with questions or concerns on the health care reform bill since the bill will likely be on the House floor in the next week or two. To find your legislator’s contact information, click here.

The House passed H.143, a bill modeled after a New York law requiring cyber retailers to collect the state’s sales tax for online sales. Representative Jeff Wilson (D-Manchester) cited the inequitable playing field between our brick and mortar stores and cyber retailers who don’t collect a sales tax. He also noted the concerns of affiliates that have relationships with companies such as Amazon.com, and therefore, the bill’s effective date is postponed to July 1, 2012. This date will allow more time to review the legal landscape in other states as well as the potential impacts on affiliates. Representative Wilson called for Vermont to join the growing movement of states adopting this practice so as to provide tax fairness for mom and pop stores competing against online retailers. The bill now moves onto the Senate.

Win Smith, Chamber Board Vice-Chair and CEO of Sugarbush Resort, provided our organizations’ position on the Blue Ribbon Tax Structure Commission’s report to the House Ways and Means Committee. This position can be found by clicking here.

Smith asked legislators to put themselves in the mindset of business people who must make 5-10 year investment decisions and need predictability in tax policy. He also called for recognition that top wage earners and second homeowners are mobile and the state could attract more revenues to pay for social service needs by having competitive tax rates that encourage these individuals to live here full-time.

The Ways and Means Committee has spent much of the session digesting the Commission’s report and considering changes to the tax system. Speaker Shap Smith paid a visit to the Committee and expressed his support for the Governor’s framework of budget reductions as well as taxing health care providers to make up a $170 million budget gap. He encouraged legislators to avoid a soda tax or increases to the income tax. The Committee has been considering various models for moving to an adjusted gross income base for income taxes and eliminating the capital gains exemption. The Committee is also poised to recommend a three-year review cycle of tax expenditures, despite business concerns about tax policy predictability.

The Chamber was asked by area florists to assist them with a bill to prohibit deceptive advertising practices in the floral industry. Steve Juiffre of Chappell’s Florist provided testimony to the House Commerce Committee in support of H.160, co-sponsored by Representatives Ann Pugh and Helen Head (D-So. Burlington), which is designed to prohibit out-of-state floral businesses from advertising as a local florist. This bill will be folded into a larger consumer protection bill (H.254). The Committee is supportive of addressing the issue and the Attorney General’s office has also been helpful in refining bill language.

The House Education Committee has been taking testimony on changing Vermont’s state education structure such that the Education Commissioner would become a Cabinet-level position, appointed by the Governor instead of the Board of Education. We support this change, as we believe it will increase the accountability of the position and elevate the importance of education in a Governor’s agenda.

The Environmental Protection Agency has ruled that the State must provide for more public participation in enforcement actions pursuant to the Clean Water Act. As originally drafted, H.258 took the approach of expanding public participation by allowing public intervention as a right in the state’s enforcement process. Our Government Affairs team has been working with the Agency of Natural Resources to allow a public notification and comment period, but having the public process subject to certain standards and permission to minimize frivolous appeals and intervention.

The Jobs bill, H.287, was reviewed by the House Ways and Means Committee due to the number of tax incentives provided by the bill. These incentives include:
• A Vermont Business Partner Incentive for a Vermont company that brings an out-of state company to Vermont.
• Qualified new employees hired into Science, Technology, Engineering and Math positions could receive a $1,500 per year payment toward a student loan.
• Employers hiring long-term unemployed Vermonters could receive a $500 incentive not to exceed $5,000 per year per employee.
• The Vermont Employment Growth Incentive program was scheduled to sunset at the end of this year, but the bill extends the program to July of 2012, to allow for its complete evaluation.

Tim Banks, co-owner of Dedalus Wine Shop in Burlington, testified before the Senate Economic Development Committee in support of S.9 which would allow wine retailers in Vermont to ship wine in and out of state. The bill was introduced by Senators Hinda Miller and Tim Ashe. Banks indicated that he believes the bill would add to state revenues through additional sales tax and distributor tax collection and create jobs due to the expected increase in sales. The Committee was expected to vote on the bill this morning.

Representative Heidi Scheuermann (R-Stowe) presented her bill, H.247, to the other members of the House Commerce Committee this week. The bill establishes a common definition of independent contractor for the purposes of unemployment and workers’ compensation insurance. The Committee seemed willing to explore the issue and Representative Scheuermann is hopeful that her bill can serve as a starting point for the discussion. The Vermont Department of Labor is considering independent contractors as employees and is ordering employers to pay unemployment and workers’ compensation insurance on those individuals. Further, the Department is considering other companies to be employees when work is subcontracted and requiring employers to cover them on these insurances even when those companies are covered by their own insurance. If you have had experience with this issue or would like to learn more, please contact Cathy Davis at cathy@vermont.org.

Representative Jim Condon (D- Colchester) introduced H.429, An Act Relating to Capital Gain Exclusion For Sale of a Business To Employees. The bill, developed in partnership with the Chamber and the Vermont Employee Ownership Center, would provide a capital gains tax exemption for business owners who sell their business to their employees.  The Chamber supports the provision as a way to retain jobs in Vermont.

The Senate Economic Development Committee took testimony on a draft unemployment bill this week. The bill includes a provision developed by the Chamber and GBIC that would exempt from an employer’s unemployment insurance experience rating, a termination where the employee earned less than $500. The Committee may increase that amount to $1000 in order to give an employer and employee a longer test period. The goal is to allow employers to give a potential employee an opportunity to work with them without being penalized if it becomes clear early on that the person is not the right fit for the job.

Bills of Note
H.406 would allow a municipality to receive growth center designation for commercial/industrial zones.
H.416 authorizes the creation of job opportunity zones.

Bills can be found by clicking here.