March 18, 2011 – Week 10

The House Health Care Committee is expected to vote out H. 202 by the end of this week. The Committee heard from three Chamber members about their concerns with the bill. The Chamber and GBIC also furnished the committee with our thoughts on the legislation. Specifically, the Chamber and GBIC understand that our current spending on health care is not sustainable and that changes to our system could be beneficial. However, the Committee heard from our members: Al Gobeille with Gobeille Hospitality Group, Christopher Leff with Paul, Frank + Collins, and Mike Sessions with Pizzagalli Construction Company that they find it difficult to judge the impact the reforms in this bill will have on their businesses, their employees, and Vermont’s economy. The Chamber and GBIC cannot judge the proposal without understanding the cost of a new system and the effect it could have on our members’ ability to create and retain jobs.

The Senate Health and Welfare Committee is scheduling public hearings on the health care reform bill in advance of receiving the bill from the House. The public hearing for employers is next Thursday, March 24 from 6:00 to 8:00 p.m. at the State House in Montpelier. Do you have questions about the bill or the impact it might have on your business or your employees? Consider attending the hearing and sharing your thoughts with the Committee. Want more information? Contact Cathy Davis at cathy@vermont.org.

Significant changes to the state’s tax policy that will affect business are close to being adopted by the House Ways and Means Committee. Proposed changes include:
• Moving to an adjusted gross income tax
• Eliminating capital gains exemptions and itemized deductions
• Moving to three tax brackets with a lower top rate of 7.95%
• Providing some income tax credits
• Increasing the tobacco tax
• Changes to tax increment finance provisions that will make it more difficult to gain approval as a financing technique for community infrastructure

The Committee is also considering a three-year review cycle of tax expenditures, a change to the household income definition, and a study of our education finance system.

Our organizations have expressed concern about what appears to be a piecemeal approach to tax reform and inconsistencies with the recommendations of the Blue Ribbon Tax Structure Commission. Our tax position can be found by clicking here.

The House Ways and Means Committee is considering a proposal to increase a health care insurance claims assessment in order to raise state revenue. The current .002% assessment is used to fund health care technology improvements. This proposal would increase the current assessment to between .01% and .013%. The increased assessment is projected to raise more than $10 million, which would be used to fund the state’s Medicaid program.

The cost of the assessment charged on all health insurance claims in Vermont would likely be passed on to employers by health insurance companies through increased health insurance rates. Self-insured employers would be responsible for remitting the assessment, which would mean a direct increase in their costs. Chamber member, Jerry Tarrant, with MyWebGrocer, testified with concerns about the proposal encouraging the committee to look for more creative solutions to save costs within the state’s budget, adding that raising the assessment “is a very finite proposal and you’ll be in the same spot again ten years from now.”

Senate bill S. 78, the telecommunications bill, is making its way through the Senate. The Senate Economic Development Committee spent much of the session developing the bill, which includes provisions to speed deployment of telecommunications infrastructure in line with Governor Shumlin’s goal of statewide coverage. Late last week, the Senate Natural Resources Committee, chaired by Senator Ginny Lyons (D-Chittenden Co.), voted the bill out. Among their proposed amendments were:

• A proposed facility would not have an undue adverse effect on the public’s use and enjoyment of the I-89 or I-91 scenic corridors.
• Applicants intending to make very minimal modifications to existing structures would have to provide written notice to a variety of parties including landowners of adjoining properties. 

Following the Natural Resources Committee’s review of the bill, it was referred to the Senate Finance Committee, which will continue its work on the bill next week. 

H.41, which would require employers to provide a half hour of break time to an employee for each six hours worked was voted out of the House General, Housing and Military Affairs Committee on a 5-3 vote late last week and brought to the floor this week. The bill has changed significantly since the original draft and would no longer specify when breaks could be taken and would allow the half-hour break to be taken in increments throughout the shift. The Chamber and GBIC remained concerned about the impact the bill could have on very small employers or employers where job duties might not allow 30 minutes of break time on a particular day. The bill was passed over on Wednesday allowing the Committee time to consider amendments. An amendment to exempt places of employment where the nature of the work done by the employees allows them frequent breaks during the day was expected to be accepted on the House floor prior to passage of the bill.

House Commerce Chair Bill Botzow (D-Pownal) described the Jobs Bill, H.287, as an initiative that cuts across a variety of state agencies and calls for closer collaboration between agencies and the state’s economic development partners. Before passage, House Republicans expressed concern about the cost of the initiatives (estimated at $550,000) and the need to address other important issues such as regulatory reform and energy costs. The bill includes:

• Incentives for Vermont companies that recruit an out-of state company to Vermont.
• A statewide internship program.
• Incentives for loan repayments for qualified students and the hiring of long-term unemployed Vermonters.
• Extension of the Vermont Employment Growth Incentive program to July of 2012, to allow for a complete evaluation of the program.
• Long-term economic development planning by an interagency work group chaired by the Secretary of the Agency of Commerce and Community Development.
• Implementation of a variety of initiatives designed to support agriculture.
• A new office to support the development of the creative economy.

The House Judiciary Committee is working on potential changes to Act 157, which was passed last year. The law, which is aimed at preventing crimes against children and vulnerable adults, was passed last year. It would require employers to maintain personnel files for ten years and provide extensive information on former employees. Many of the state’s large employers, such as universities, private employers, school districts, and hospitals have expressed concerns that the law will be very difficult to implement and may not accomplish the intended goal. One solution proposed by some following the bill would be to provide employers with immunity so that they would be freer to share concerns about a former employee with a prospective employer.

Per a ruling by the Environmental Protection Agency, the state must provide for more public participation in enforcement actions for federally delegated programs such as 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 for all programs, including Act 250. Our Government Affairs team was successful in making these changes to the bill:

• Allows for a 30-day public notification and comment period on Agency of Natural Resources settlements and tickets.
• Narrows the ability to intervene from the original open-ended standard to a permissive standard. The new aggrieved person standard is fair and is consistent with federal law and the current Environmental Court standing requirement.
• It grants no right of appeal to interveners in any proceedings once the Environmental Court makes a final decision

The bill passed out of the Natural Resources Committee and still goes beyond what the EPA requires by including Act 250 and also includes a cost recovery provision when funds are needed to remediate an environmental violation.

Items of Note:

• Members of the Vermont Citizens Advisory Committee for Lake Champlain appeared before a joint meeting of Senate and House Natural Resources Committees to present their 2011 Action Plan.  Many of their priorities to improve the quality and health of Lake Champlain align well with the Chamber’s goals for the Lake.
• S.9, a bill that would allow wine retailers to ship in and out of Vermont, was passed by the Senate Economic Development Committee and referred to the Senate Finance Committee.
• S.95, a bill that would allow a training period before an employer’s unemployment account was charged for the termination of an employee, was referred to the Senate Finance Committee.
• H.406 would allow a municipality to receive growth center designation for commercial/industrial zones.
• H.416 authorizes the creation of job opportunity zones.
• H.254 proposes to implement consumer protections relating to goods and services appearing on a telephone bill, discount membership programs and security breach notices as well as provisions for deceptive advertising for florists.

Bills can be found online by clicking here.