2017 Vermont Legislative Session | The Year in Review - DRM's Government & Public Affairs Team Final Analysis

by Downs Rachlin Martin PLLC
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Downs Rachlin Martin PLLC

A May 18th adjournment brought to a close the first half of the 74th biennial session of the Vermont General Assembly. Drama awaits as Gov. Phil Scott has threatened to veto H.518, the fiscal year 2018 budget, over an unrelated matter regarding health insurance for teachers. The veto session is not expected to affect the results described in this final report.

 

COMMERCE & ECONOMIC DEVELOPMENT

Bonding for Affordable Housing

H.518

Early in the session, Gov. Phil Scott asked the legislature to redirect $2.5 million from the Vermont Housing and Conservation Fund to finance $35 million in state-supported bonding for construction of affordable housing. After much deliberation, the legislature redirected $1.5 million of existing revenue from the property transfer tax and diverted $1 million of $5 million collected from a property transfer tax surcharge to the 20-year plan. The program was added to the budget before final passage. It is expected to also draw down between $35 million and $70 million in federal funding.

The final proposal attracted significant push-back from environmental advocates, because the entire amount of the 0.2 percent property transfer tax surcharge is currently dedicated to a fund to remediate impaired surface water. Lawmakers concluded that the Scott Administration’s dedication of $46 million in capital funds, $8 million in General Funds and $11 million in Transportation Funds to clean water programs was adequate.

Home Loan Escrow Accounts

H.136

Vermont Legal Aid proposed legislation that would have added significant new escrow requirements on residential lenders, but the legislature rejected most of them and adopted relatively minor changes that were accepted by the banking industry.

Under H.136 as approved, a lender will be required to conduct an annual escrow account analysis to determine a borrower’s monthly escrow payment for the next computation year. The analysis must be based on the borrower’s current tax liability if made available to the lender by the borrower or municipality, after any applicable income-based adjustment.

A lender will also be required to conduct a new escrow analysis and reduce a borrower’s monthly payment upon receipt of a revised and lowered property tax bill.

Independent Contractors

H.119H.323

In an example of “déjà vu all over again,” the House Commerce and Economic Development Committee spent months attempting to draft legislation to clarify the rules governing independent contractors under the workers’ compensation system, only to see the effort suffer the same tortured fate that befell similar efforts in the prior four sessions.

The business community has been generally united in seeking repeal of the requirement that a subcontractor be considered an employee of a general contractor if he or she is in a similar line of work. Several committee members proposed various alternatives that retained that requirement, but only as one of many factors to be considered. That approach has been endorsed by representatives of organized labor.

The issue came to a head near the end of the session when Committee Chair Rep. Bill Botzow, D-Pownal, pulled the plug on an effort to force a vote, and Rep. Paul Poirier, I-Barre, erupted in anger and never returned to the committee.

Omnibus Economic Development Bill

S.135

Workforce development, affordable housing, restructuring government and stimulating growth in semi-rural hub communities were common themes throughout the legislative session. A comprehensive economic development bill, S.135, originated in the Senate Economic Development, Housing and General Affairs Committee and its final provisions address each of those issues.

On workforce development, the bill directs the chair of the Workforce Development Board to convene a task force to look at all of the training and development programs across state government and recommend strategies to develop skilled workers. It establishes a new position of Career Pathways Coordinator and calls for a memorandum of understanding between career and technical education centers and higher education to encourage new collaboration over non-degree programs.

To address affordable housing, the bill allows construction of certain new housing projects to avoid Act 250 jurisdiction in certain downtowns, expands downtown development tax credits, and allows up to six new tax increment financing districts. Municipalities will be required to make a bigger commitment to retire borrowed TIF money, and a slightly larger share of incremental revenues will go to the state’s Education Fund.

Among other provisions in the 94-page bill are new ways for rural communities to collaborate for economic development, support for a training program for heating equipment technicians, authorization for the State Treasurer to establish a public retirement plan and minor changes to the Vermont Economic Growth Incentive Program.

Rural Economic Development

S.34

The Senate Agriculture Committee was charged by Senate President Pro Tem Tim Ashe, D/P – Chittenden, with crafting an economic development bill to help “the other Vermont,” where rural communities struggle to produce local jobs. The result was S.34, a bill that took aim at high permitting fees, a need for more development expertise in rural areas, the impact of high energy costs and a slump in the forest economy.

Although S.34 struck out in a number of unusual directions, the bill that passed will provide more grant writing expertise in rural communities, restructure some of the programs run by the state’s primary energy efficiency utility and boost forestry by exempting forestry equipment from the state’s six percent sales tax. Passage of the bill was a victory of sorts for Ashe and for Sen. Bobby Starr, D-Essex/Orleans, who undertook the task of forging a bill that addresses economic development from an atypical direction.

Rural Economic Development Districts

S.135

The legislature approved the creation of rural economic development districts, which are special municipal districts that will have authority to finance, own and maintain infrastructure with the intent of providing economic development opportunities in rural areas. Districts may be created by the legislative bodies of municipalities. They will not have authority to assess property taxes or to levy service charges or fees upon any underlying municipality.

Rural economic development districts will have the power to install, own and operate infrastructure promoting economic development; enter into municipal financing agreements; purchase and sell real property; hire employees; adopt ordinances; and engage in a variety of other powers.

Real Estate Appraisal Management Companies

H.506

The federal Dodd-Frank Act established minimum standards if states choose to regulate real estate appraisal management companies, entities that contract with lenders to provide lower cost and higher-quality appraisals. The House-passed version of H.506 would have delegated that decision to the Real Estate Appraisal Board, which AMCs argued was akin to turning the chicken house over to the foxes.

The bill as approved by the legislature requires the board to adopt regulations, but also allows it to make recommendations as to whether the real estate appraisal industry should be deregulated.

Transportation Network Companies

H.143

The House and Senate passed separate versions of H.143, a bill to regulate ride-sharing services such as Lyft and Uber, but the differences were never resolved so the bill was not passed.

The House bill adopted minimum insurance requirements for the companies. Those requirements were consistent with a national model bill that has been adopted by most states. The Senate added several provisions that were anathema to ride-sharing companies, including extensive and annual background check requirements.

A House-Senate conference committee is likely to resolve the differences between the two bills next year.

 

EDUCATION

First Amendment Rights for Students

S.18, H.513

It was a big year for professional journalists due to the Media Shield Law, and the legislature also affirmed the right of freedom of expression for student journalists at the secondary school and college levels by passing the Students’ Freedom of Expression Bill.

The bill allows student journalists publishing in school-sponsored media to exercise the right to freedom of speech and freedom of the press, as long as the published material meets certain legal, personal safety and ethical standards. It was promoted by groups of students from the University of Vermont and Burlington High School, endorsed by the Vermont Press Association, and ultimately supported by the Vermont Principal’s Association.

Miscellaneous Education Bill

H.513

After abandoning a plan to restructure the state’s universal pre-kindergarten program earlier this session, the House Education Committee joined the Senate Education Committee in spending much of the session reviewing potential small tweaks to Act 46 to facilitate school district mergers.

The final omnibus education bill approved by the legislature allows for greater flexibility in the merger procedures established by Act 46 and creates a study committee to examine controversial draft rules of the State Board of Education that require private schools to offer open enrollment if they want to receive public tuition dollars. The bill also requires the Agency of Education and Agency of Human Services to work together to resolve issues with fingerprint background checks for pre-kindergarten employees. S.18, a bill that provides broad protection for student journalists’ freedom of expression, was also incorporated into the final bill.

 

EMPLOYMENT & LABOR

Accommodations for Pregnant Employees

H.136

The legislature passed a bill that imposes new state requirements for employers to accommodate pregnant and lactating women in the workplace. Employers will be required to make "reasonable accommodations" for a person whose abilities are limited by pregnancy, childbirth or a related condition. The Senate added language to the bill clarifying that the rights covered by the new requirements would be similar to those of a person with a disability.

Child Care Funding

H.518

The annual budget bill includes $2.5 million in new funding for child care programs. The bill increases funding for family subsidies by $300,000 and includes a new $2.2 million grant program that was included in the Senate-passed bill. Under the new Early Care and Development Program grant, 70 percent of grant money, or $1.54 million, will designated for center-based programs. The money will be allocated based on the percentage of enrollees receiving state subsidies as well as the average number of enrolled infants and toddlers.

Multiple Employer Public Retirement Plan

S.135

The legislature authorized State Treasurer Beth Pearce to develop a statewide public retirement plan available to workplaces with 50 or fewer workers. The plan, which is called a Multiple Employer Plan, will be self-funded and operated by a third party vendor.

The plan is intended to provide a low-cost option for employees of organizations that are too small to dedicate resources to running a retirement plan and with too few employees to make it attractive to third-party providers. Employers will be responsible for withholding payroll deductions from participating workers, a board will oversee operation of the plan, and a third party vendor will operate the pooled system.

The plan will not be implemented until 2019, after a Public Retirement Plan Study Committee develops specific recommendations concerning its design, creation, and implementation.

Paid Family Leave

H.196

Overriding concerns about the potentially high cost to the state and higher payroll taxes for employees, the House passed legislation to create a state-run insurance program to provide paid family and parental leave to employees.

Under the bill, employees would be entitled to as many as six weeks of paid leave at 80 percent of their normal wage when taking time off from work for the birth of a child or illness of a close relative. The bill exempts businesses with ten or fewer employees and would require employees to work for at least one year before qualifying for the benefit. Financing for the plan would come from an employee payroll tax of 0.141 percent of wages up to $150,000. Employers could opt to pay the tax for their employees. Tax collection would begin on July 1, 2018, and the benefit would be first available on Oct. 1, 2019.

The bill is expected to be taken up by the Senate next session.

Social Media Privacy for Employees

H.462

Employers will generally be prohibited from asking for access to their employees’ private social media accounts under a bill that is on its way to the governor for signature. H.462 prohibits an employer from requiring a worker to provide his or her username and password to a private social media account, but it also allows access to accounts provided by the employer and access to information needed to meet state or federal requirements, such as oversight of brokerage activity. It would not allow an employer to require access to private postings, but would allow employers to request voluntary access.

Testimony revealed that more and more employees are using personal electronic devices to access programs and applications that are maintained by employers for business reasons. The bill distinguishes between personal use and use that is central to performing a job.

 

ENERGY & TELECOMMUNICATIONS

Codifying Legacy Net Metering Rules

H.411

A bill that was aimed at maintaining existing federal energy efficiency standards for appliances in view of a skeptical Congress became the vehicle to solve a more local energy problem. The bill, H.411, locks in existing energy efficiency standards for appliances, and also became the means to deal with legacy net metering systems.

The Vermont Public Service Board recently rewrote the rules for net metering systems and disallowed existing systems the right to be paid for the portion of their electric bill that covers the cost of poles and wires to deliver it after 10 years. Although rules for new systems state as such, many legacy systems allow the cost of energy sold back into the grid from renewable energy systems to cover non-electricity costs.

Some members of the Legislative Committee on Administrative Rules felt the board had made changes to existing rules without authority. A majority of the legislature disagreed, and the net metering language in H.411 codifies the board rules.

Electricity Storage on the Grid

S.52

Legislators were impressed by the advancing technology that allows for the storage of electricity on the grid and wanted to encourage its growth, but utilities said it was premature to enact legislation. Thus, they passed a study.

S.52 requires the Department of Public Service to submit a report by Nov. 15, 2017, on the issue of deploying energy storage on the electric transmission and distribution system. Among other items, the report is required to:

  • summarize existing state, regional and national actions affecting deployment of energy storage;
  • identify and summarize federal and state jurisdictional issues regarding deployment of energy storage;
  • identify the opportunities for, the benefits of, and the barriers to deploying energy storage;
  • identify and evaluate regulatory options and structures available to foster energy storage, including the potential cost to ratepayers; and
  • assess potential methods for fostering the development of cost-effective energy storage in Vermont and identify challenges and opportunities.

New Directions for Efficiency Vermont

S.34

The legislature continues to focus on the value commercial and industrial customers receive for their investments in the state’s main energy efficiency utility and how its programs can be improved. In testimony this winter in the Senate Agriculture Committee, directors of several regional development corporations complained about high energy efficiency and energy demand costs relative to other states and perceptions of a low return on investment by commercial payers.

Complaints about the program were detailed in a January 22, 2016 report by the Vermont Department of Public Service. A provision in the Rural Economic Development bill, S.34, will lead to both another report and a new pilot project. The report will detail how companies can manage their own efficiency programs. The pilot will study how the energy efficiency investment can be applied against total energy consumption.

Telecommunications Plan and Lifeline

H.347

A bill that originated in the House Energy and Technology Committee, H.347, adds requirements to the surveys that the Department of Public Service must conduct in preparation of its 10-year Telecommunication Plan, a process that is currently underway at the department. The bill mandates surveys of service needs in the sectors of education, health care and human services, public safety, and workforce training and development.

The bill also includes changes to the state’s Lifeline program, which provides telephone subsidies to low-income Vermonters. Federal regulations have significantly increased the administrative requirements for the Lifeline program, so the state is transferring operation of the program to private carriers, who will be eligible to receive federal funds for administrative costs. Under the bill, private carriers will be required to make eligibility determinations.

Telecommunications Tower Siting

H.50

The legislature extended the sunset of a statute, known as section 248a, that provides for the permitting of telecommunications facilities by the Public Service Board. The law now expires on July 1, 2020. The bill also includes a requirement that notices to the legislative body and planning commission of a municipality of a permit application itemize the rights and opportunities that are available to those bodies, as well as informs them of a guide prepared by the DPS that outlines the 248a process.t

Telemarketers, Data Brokers and Telecommunications Privacy Rules

S.72

Telemarketers will be required to make available their caller identification and, if made available by the caller’s carrier, the caller’s name, following the passage of S.72.
 
The legislature added to the bill a study of data brokers, which are entities that package and sell consumer data. The bill requires the Department of Financial Regulation and the Attorney General to prepare a report to the legislature that defines data brokers and makes any recommendations for the regulation of the industry.

The bill also includes a requirement that the Attorney General make recommendations to the legislature concerning whether the state should adopt privacy and data security rules applicable to telecommunications service providers that are subject to the jurisdiction of the Public Service Board.

 

ENVIRONMENT

50th Anniversary of Act 250

H.424

Vermont’s venerable land use law known as Act 250 will be 50 years old in the spring of 2020, and many lawmakers feel that it is due for a facelift as the state looks ahead to development over the next 50 years. H.424 establishes a “Commission on Act 250: The Next 50 Years.” The commission, comprising seven legislators, will review a laundry list regarding the goals, accomplishments and operation of the land use law.

An advisory committee made up of a wide range of state officials and private interests will advise the group, and it will hold meetings around the state to hear from the public. Topics to be considered include perennial favorites, such as whether review of disagreements should be “de novo” or “on the record,” and new topics, such as how the law will address the reality of climate change. A report with proposed legislation is due to the General Assembly in December, 2018.

Carbon Tax and Carbon Cap and Trade

Various Bills

The idea of enacting a tax on the carbon content of petroleum-based fuels has generate a great deal of publicity during the past few sessions and this one was no different. At least five bills were introduced calling for a carbon tax, and the topic was the focus of news conferences in and outside of the Statehouse where Vermont lawmakers claimed to be leading the way. None of the bills, however, were approved.

Several of the bills and some of the rhetoric called for transforming the existing Regional Greenhouse Gas Initiative carbon cap and trade program to include transportation and petroleum heating fuels. A resolution that calls on the governor to lead that effort, JRH. 6, remains pinned to the wall in the House Natural Resources, Fish and Wildlife Committee.

Contamination of Potable Water with PFOA

S.10

A bill aimed at forcing the Saint-Gobain company to pay for the extension of water lines to homes whose wells were contaminated with the chemical perfluorooctanoic acid in Bennington and North Bennington passed both Houses and will be sent to Gov. Scott. The bill, S.10, grants the Secretary of Natural Resources the option of determining whether a party has released PFOA into the land, air and water, whether it pollutes or threatens a potable water supply and whether the responsible party should be required to pay for the costs of extending municipal water lines to the property.

The bill follows discovery of significant PFOA in the ground and water at the site, where Teflon coatings were once applied to manufactured products. Saint-Gobain never operated the facility, but purchased it from a prior owner and moved the operations elsewhere.

PFOA was also used as a firefighting compound and has been found elsewhere in the state; but only the Bennington sites are known to be relevant to the bill. Scott is expected to sign it.

Investing in Clean Water

H.519 Various Bills

The state will invest more than $110 million in state and federal resources through July 2019 toward remediating impaired waters across the state and to comply with an agreement with the U.S. EPA to mitigate pollution in Lake Champlain. Nearly half of that will come from a pair of significant investments contained in the Capital Appropriations Bill, H.519. Over the next two years, approximately $25 million per year will be spent on municipal programs for storm water mitigation and pollution control. Other significant investments combine state and federal funding in the transportation area.

One area of water funding that received attention was the approved diversion of $1 million of the $5 million raised annually by a 0.2 percent property transfer tax surcharge away from clean water and into affordable housing via the budget bill. Environmental advocates at first reacted strongly against the proposal, but backed down when the total commitment to water funding was enumerated.

Preventing Exposure to Toxic Substances

S.103

After PFOA was discovered in Bennington and at other sites across the state, the legislature charged a summer study committee with evaluating potential exposures to toxic chemicals and the protections afforded by existing laws. The task force was charged with making recommendations to the General Assembly on ways to improve chemical protection.

The Act 154 Task Force Report included a laundry list of recommendations, many of them drawn from wish list of activist groups. While some of the recommendations were approved by a majority of the task force members, they did not necessarily represent consensus recommendations.

Ideas included in the report ranged from better coordination among regulatory programs dealing with chemicals to allowing citizens to file enforcement actions and forcing potentially responsible parties to pay for regular medical monitoring of persons who might have been exposed to chemicals. The Senate pared the list down to a series of practical steps aimed at coordinating existing programs, but the House attempted to reach beyond consensus recommendations to amend a highly controversial law aimed at protecting children from chemical risks in children’s products. The move proved too bold for the Senate too late in the session, and S.103 failed to receive final consideration this year.

 

GENERAL GOVERNMENT

Budget

H.518

After nearly unanimous votes in the House and the Senate, the fiscal year 2018 state budget sits in limbo and has not yet been sent to the governor’s desk for action. Gov. Phil Scott said that he will veto the bill since the legislature did not act on his proposal to move teacher health care negotiations to the state level to net $26 million in savings. House and Senate leaders have argued that the proposal infringes on teacher collective bargaining rights. Adjournment was delayed for two weeks while the administration and House and Senate leadership tried to reach a compromise over the contentious issue. Despite many proposals from both sides, an agreement was not reached and the House and Senate proceeded with final action on the budget.

Legislative leaders are expected to continue negotiations with the Scott Administration prior to reconvening on June 21 for a veto session. Scott has indicated a willingness to sign the budget as is if necessary to avoid shutting down state government on July 1.

The $5.83 billion budget agreed to by the House and the Senate is a 1.3 percent increase over current year spending and includes no new taxes or fees. Provisions include:

  • $8.37 million to increase salaries for Designated Agency mental health workers;
  • $2.5 million in new child care funding to bring family eligibility levels up to the current federal poverty level;
  • A $3 million base increase to the Vermont State Colleges and a one-time $500,000 payment for a campus merger;
  • A shift of the Teacher’s Retirement Contribution from the General Fund to the Education Fund;
  • $250,000 from Vermont Training Program funds to market Vermont as a place to work, and,
  • $150,000 in additional funding for counselors in the Small Business Development Center regional offices.

Combining Lottery and Liquor Control

H.238

One of Scott’s reorganizational priorities will likely become law during the next session after the proposed merger of the Department of Liquor Control and the Lottery Commission was dismissed by the House as coming too late for full consideration. The proposal, which has been introduced in the House several times in the last few years, would combine two small areas of state government that involve controlled inventories and regulated sale as well as a state-run distribution, promotion and marketing system.

The proposal was hotly debated, and rejected, on the House floor in mid-session, but a provision that would get the ball rolling was added to S.238, a bill that would update and modernize laws related to the DLC. The provision establishes a task force to study how the two departments can be combined and directs the group to submit a draft bill this fall to accomplish the merger in the next legislature. The departments would be combined as of July 1, 2018.

Front and Rear License Plates Required

S.127

It has been nearly forty years since any of the 31 states that require front and rear license plates on pleasure cars dropped the front plate requirement. Within three years the two states that dropped the requirement – Massachusetts and Connecticut – each repealed the one-plate law. This year the need for front and rear license plates was a matter of contention between the House and Senate. The two-plate provision prevailed.

After the single plate provision passed the Senate with little notice and little testimony, police and public safety organizations came out in force to explain why front plates are critical to law enforcement. Rear plates may obscured by snow, eluding identification. Surveillance is required at border crossings for homeland security reasons. Automatic plate readers monitor oncoming traffic for sought vehicles at the rate of 10,000 images per day, and surveillance cameras monitoring front plates often prevent losses at convenience stores. The House Transportation Committee voted unanimously to maintain the two plate standard, and Senate conceded in a committee of conference.

Marijuana Legalization

S.22

An effort to legalize marijuana appeared doomed for much of the session given the dramatic differences between the House and Senate, but a compromise was developed and passed in the final days of the session. On Wednesday, the governor vetoed the bill, but left open the possibility of signing a revised bill if certain specific objections are addressed.

The bill as passed would have legalized the possession of one ounce or less of marijuana and two mature and four immature marijuana plants, which was the House approach. To mollify the Senate, the bill created a nine-member Marijuana Regulatory Commission, which was charged with developing legislation to establish a comprehensive regulatory and revenue system for marijuana legalization and submitting recommended legislation by Nov. 1, 2017.

Media Privilege Law

S.96

Some members of the news media stepped out from behind the pen and the camera to act as their own advocates in passing the state’s first Media Shield Law, a measure that will protect a reporters’ confidential notes, drafts and sources under most conditions.

Under a new two-tiered system, a court will not be allowed to compel a journalist to disclose information obtained from a confidential source or the identity of the source if the information was obtained confidentially. A court may compel a journalist to disclose certain non-confidential information if the information is highly material to a significant legal matter and cannot be obtained any other way. Scott signed the bill on May 17.

Reorganizing Vital Records

H.111

Until now, researchers looking for birth, death, marriage, divorce and similar records for either personal or legal reasons needed to understand an unorganized system where some records were held by town clerks, some were held by the State Archivist and some were held by the courts. H.111, a bill that evolved from a 2016 vital records study committee, aims to centralize the management of most vital records in a single Statewide Registration System.

A State Registrar of Vital Records will oversee the new system and will be the sole official repository of data from vital event certificates issued after Jan. 1, 1909. Town clerks will be identified as designated agents and allowed to issue both certified and non-certified copies of records. The bill also creates a single statute to deal with criminal penalties for vital record-related offenses.

Restructuring of Labor and Commerce

S.135

Matching the needs of employers with an array of workforce training programs provided by various state agencies was the aim of an administration proposal to merge most of the Department of Labor with the Agency of Commerce and Community Development into an Agency of Economic Opportunity. The proposal was summarily dismissed by the Senate Economic Development, Housing and Community Affairs Committee, which feared a loss of emphasis on the needs of workers.

The matter generated a nearly session-long debate as well as a counter-proposal by Senate President Tim Ashe, D/P-Chittenden, to combine programs within the Labor Department instead, an idea that spawned immediate pushback from the business community over its support for economic development programs such as the Vermont Economic Growth Incentive program and the Vermont Training Program. In the end, the legislature charged the head of the Workforce Development Board with forming a task force to study the matter and make recommendations.

 

HEALTH CARE

Access to Cannabidiol Medication

H.503

Lawmakers approved language that ensures patients immediate access to any Food and Drug Administration cannabidiol prescription medication being developed for the treatment of intractable childhood epilepsies. The provision will allow a provider to prescribe and a pharmacist to dispense the product upon FDA approval. The amendment was added to H.503 and was ratified by lawmakers in the waning days of the session.

Accountable Care Organization Open Board Meetings

S.4

The legislature approved a bill to require the governing board meetings of an accountable care organization or an organization acting on behalf of two or more ACOs be open to the public. An ACO is a group of providers who voluntarily come together to provide coordinated care to their patients. The bill allows a board to convene executive sessions when considering contracts, personnel matters, trade secrets, confidential attorney-client communications, and information prohibited from public disclosure by a data use contract. The bill also requires the ACO governing board to provide public notice of its meetings.

ACO Pilot

Act 25/H.507

The Department of Vermont Health Access will be required to provide periodic reports on the implementation of the Next Generation Medicaid Accountable Care Organization pilot contract with OneCare Vermont, the state’s largest ACO, under Act 25. An ACO is a group of providers who voluntarily come together to give coordinated care to their patients. The act also requires the Green Mountain Care Board to provide a progress report on benchmarks identified for implementing the all-payer model and its preparations for regulating ACOs.

The act extends for two years the deadline for the administration to apply for a federal waiver of certain federal exchange plan requirements as they relate to bronze plans. It also extends through the 2019 plan year the authority for exchange-plan carriers to offer one or more bronze plans with a higher out-of-pocket prescription drug limit than the limit in Vermont law. It extends the duration of an advisory group through the 2019 plan year and directs the group to look at whether there should be flexibility in bronze plan design after plan year 2019 and to provide recommendations for providing flexibility while still offering protection from high out-of-pocket prescription drug costs.

Since implementation of the out-of-pocket limit, health insurers have claimed that it has become increasingly difficult to develop bronze exchange policies that include the state-mandated prescription drug cap while also meeting federal guidelines.

Adverse Childhood Experiences

H.508

House and Senate health care committees spent significant time on legislation addressing the impact of adverse childhood experiences on the ability of Vermont children to flourish. The Department of Mental Health, the Department of Children and Family Services, and mental health service representatives told the committees that increased ACEs such as separated or divorced parents, substance abuse, mental health issues, and food and housing insecurity are affecting children’s ability to succeed in school and is increasing DCF caseload.

As a result, the legislature passed a bill that adopts principles to strengthen Vermont’s response to trauma and toxic stress during childhood, sets up an ACE Working Group to survey and report on current state practices and needs and recommend legislation, and calls upon the Agency of Human Services to create an action plan based upon the working group report. The bill also recommends that the Vermont State Colleges and the University of Vermont include ACE information in their health program curricula.

Age 21 for Tobacco Purchases

S.88

The Senate was deeply divided this session over whether to increase the legal age for purchase of tobacco products from 18 to 21. The bill was unanimously approved by the Senate Health and Welfare Committee, but was opposed by members of the Appropriations Committee, who feared a revenue loss from the change, and by an odd coalition of Republicans and Progressives who believe that 18 should consistently be the age of majority. The bill was defeated by a vote of 13-16.

The Senate later in the session approved age 21 as the lawful age for purchase of marijuana, but the inconsistency went largely unnoticed.

Circulating Nurses

S.31

The Senate passed a bill to require a circulating nurse to be present in hospital operating rooms during invasive or surgical procedures. Federal regulations do not require a circulating nurse to be present in the operating room, but require one to be immediately available. Vermont hospitals generally have one present in the room. This bill incorporates model language that has been proposed across the country by the Association of Perioperative Registered Nurses. The bill was referred to the House Committee on Health Care, which opted not to act on the bill before the end of the session.

Disproportionate Share Hospital Payments

H.518

A provision adopted in the state appropriations bill reduces Disproportionate Share Hospital payments by $10 million. DSH payments are made to hospitals that serve a large number of Medicaid and uninsured individuals. The reduction was made to cover a gap in the state budget and to increase Medicaid payments to designated mental health agencies and specialized service agencies. Lawmakers made it clear that it is the responsibility of each agency to use the increases to raise the hourly wages of its workforce and the salaries of crisis response teams.

The total amount of DSH funds available to the state is $37 million. The governor proposed in his budget reducing DSH payments by 10 percent, saying that the reduction is appropriate in light of significant investment in reducing uncompensated care through the Affordable Care Act and related state investments. The House proposed a 20 percent reduction to fund a number of mental health priorities. The final agreement reduced payments by $10 million.

Duty to Warn

S.3

The legislature approved a bill that clarifies when mental health professionals must disclose information concerning a dangerous client or patient. The bill, S.3, states that a mental health professionals’ duty to warn is established as provided in common law by Peck v. Counseling Service of Addison County. That case held that a mental health professional who knows that his or her patient poses a serious risk of danger to an identifiable victim has a duty to exercise reasonable care to protect him or her from that danger by informing the identified victim or law enforcement of the risk.

S.3 was passed in response to the Vermont Supreme Court decision Kuligoski v. Brattleboro Retreat and Northeast Kingdom Human Services, which expanded the duty to warn. The Kuligoski decision required mental health providers to give “reasonable information” to those in the “zone of danger,” including caretakers, to warn them of a patient’s risk of violence. Since the ruling in September 2016, emergency department wait times have increased, residential programs have taken longer to release patients, and community providers have been less likely to take on challenging clients, creating a backlog in care.

The language approved:

  • Explicitly negates Kuligoski and establishes Peck as the only standard applicable to a duty to warn;
  • Affirms that a mental health professionals’ duty to warn is established in common law by Peck;
  • References the comprehensive regulatory process and federal rules that apply to all discharge plans; and
  • States that people who are diagnosed with mental illness are no more likely to be violent than any other person.

Evaluation of Suicide Profiles

Act 34/H.184

The Agency of Human Services will be required to evaluate and report to the legislature the factors related to each suicide in the state under Act 34. The new law requires reporting on the trends and patterns of suicide deaths, the prevalence of risk factors for preventable deaths, and the risk factors or gaps in systematic responses that create barriers to safety for individuals at risk of suicide. The agency is in the first year of a five-year Centers for Disease Control grant that requires much of the same reporting. The agency is required to report annually on its progress and how relevant data will be continued once the grant expires.

Suicide was the eighth leading cause of death among Vermont residents in 2013 and the tenth leading cause of death in the United States. Vermont has seen an increase in suicides from 75 in 2005 to 114 in 2014. Lawmakers believe the state needs to identify the gaps and barriers for suicide prevention activities.

GMCB Bill-Back Authority

H.516

The miscellaneous tax bill adopts a new allocation methodology for the insurer portion of the Green Mountain Care Board’s bill-back authority. The GMCB has the authority to bill certain costs to the entities it regulates. Presently, the bill-back is spread across four industry categories: hospitals, nonprofit hospitals, medical service corporations and health insurance companies. At the request of MVP, lawmakers agreed to create only two categories – hospitals and insurers. The allocation will be for one year only and will be as follows: 40 percent by the State, 15 percent by the hospitals, and 45 percent by health insurance companies based on market share.

The GMCB’s fiscal year 2018 budget called for an 80 percent increase in bill-backs due partly to a request by the administration to use the revenue mechanism more heavily to support the board’s oversight activities. After pushback from hospitals and insurers on the significant increase, lawmakers agreed to let the GMCB convene a workgroup to review the entire bill-back mechanism and make a legislative proposal next session.

Interchangeable Biologics

S.92

A bill to allow pharmacists to substitute a lower-cost interchangeable biologic product for another biologic passed the Senate but was not acted on by the House. The language as passed by the Senate states that any product under consideration for substitution must be approved by the U.S. Food and Drug Administration as interchangeable. It details that when a pharmacist receives a prescription he or she must select the lowest-cost product that is listed as interchangeable unless otherwise instructed by the prescriber or by the purchaser.

Despite broad support from a number of organizations, the House did not see a need for the bill since there currently are no products available on the market.

Meals for Health Care Providers at Conferences

S.45

A bill that would allow health care providers to accept modest meals at conferences that offer a significant educational, medical, scientific, or policymaking benefit that does not promote specific products quickly passed the Senate but stalled in the House.

Legislation was passed in 2009 that banned drug manufacturers from paying for gifts, including meals and travel, to health providers. Some providers have said that they are not welcome to attend dinners at conferences because of current Vermont law.

Medical Marijuana

S.16

The state’s four medical marijuana dispensaries will each be allowed to add one new retail operation under a bill that was approved by the legislature. The bill also authorizes the Department of Public Safety to license one new dispensary effective immediately, and another when the state’s registered patient population reaches 7,000.

The bill also allows dispensaries to convert from non-profit to for-profit entities, and expands the conditions for which medical marijuana may be authorized to include Crohn’s disease, Parkinson’s disease and post-traumatic stress disorder.

Mental Health Crisis Response Commission

H.145

Lawmakers approved a bill that establishes a Mental Health Crisis Response Commission within the Office of Attorney General. H.145 requires the commission to review fatalities and serious bodily injuries that occur during interactions between law enforcement officers and persons demonstrating symptoms of mental illness. The commission may also conduct reviews of interactions not resulting in death or serious bodily injuries. The bill was introduced in response to an incident in Burlington in which police fatally shot an individual who was experiencing a psychiatric crisis.

Mental Health Coordination

S.133

Lawmakers approved a bill that seeks to reduce emergency room waiting times at hospitals through a comprehensive examination of Vermont’s mental health system and the development of an action plan by the Agency of Human Services. The legislation attempts to reduce the number of individuals with a psychiatric condition waiting in emergency rooms for voluntary and involuntary inpatient psychiatric placement, to ease the shortage of mental health professionals at designated mental health agencies and specialized service agencies, and to develop a plan to increase payment rates to direct care workers at designated mental health agencies and specialized service agencies.

The bill:

  • Requires an analysis of the role of involuntary medication treatment and psychiatric medication play in inpatient emergency department wait times;
  • Requires the AHS and the Chief Superior Judge to report the role of involuntary treatment and medication in emergency department wait times, including concerns arising from judicial timelines and processes;
  • Charges the Department of Mental Health to collect and analyze data on why a person is being referred to a hospital emergency department, the rates at which patients brought to an emergency department for an emergency evaluation are in need of inpatient hospitalization, and the trends in inpatient length of stay and admission rates (data for persons under 18 will be analyzed separately);
  • Compels the AHS to develop a plan to integrate multiple sources of payments for designated mental health agencies and specialized service agencies and to increase efficiencies and reduce administrative burdens;
  • Requires the AHS to evaluate the potential benefits and costs to develop regional navigation and resource centers to improve access to appropriate levels of care;
  • Directs the Secretary of the AHS and hospitals with psychiatric units to evaluate opportunities for achieving parity for individuals presenting at hospitals regardless of whether for a psychiatric or physical condition; and
  • Requires the examination of facility options, such as nursing homes, forensic facilities, and a 23-hour bed evaluation center to prevent or divert individuals from the need to access the emergency department.

Mental Health Treatment for Minors

Act 35/H.230

Effective Jan. 1, 2018, minors will be allowed to consent to psychotherapy and other supportive counseling from a mental health professional without the consent of a parent or legal guardian. Act 35 was signed by the governor on May 22. The House had limited counseling services to LGBTQ minors. The Senate expanded it to include all minors.

Payment Parity

H.518

After a late push in the Senate, the House did not move forward with legislation that would have equalized payments among hospital-employed physicians and independent physicians. Led by Sen. Michael Sirotkin, D-Chittenden, and fully supported by Senate President Pro Tem Tim Ashe, D/P-Chittenden, the Senate proposal would have required insurance companies to reimburse medical practices the same amount of money for a given office visit or procedure, regardless of whether the doctor is self-employed or works for a hospital. It also would have prohibited insurance companies from increasing reimbursement rates to physician practices that are newly acquired by a hospital.

Sirotkin and Ashe voiced frustration that the legislature has passed pay parity bills three years in a row tasking the Green Mountain Care Board to address disparities, but no action has been taken. The state appropriations bill includes language requiring the GMCB to report to the Health Reform Oversight Committee in October on substantial changes to achieve payment parity.

Prescription Drug Pricing Resolution

JRS.19

The Senate passed JRS 19, a resolution that calls upon Vermont’s Congressional delegation to propose and seek passage of legislation that would require any pharmaceutical company that receives or benefits from any federal funding for pharmaceutical research and development to amortize all of the company’s research and development costs over the entire world market for prescription drugs. The House did not take up the resolution.

The resolution calls for the Centers for Medicare and Medicaid to negotiate with pharmaceutical companies for rebates and discounts in the Medicare Part D program. It also calls on the Food and Drug Administration to institute a moratorium on the promotion of prescription drugs directly to consumers and to promulgate more effective regulations to address prescription drug advertisements directed at consumers.

Sexual Assault Nurse Examiners

Act 39/S.95

Lawmakers approved a bill to create a Sexual Assault Nurse Examiners Board that will oversee the administration of a statewide SANE Program. The board will address standards of care for sexual assault patients, will develop and offer annual training regarding standards of care and forensic evidence collection, and will manage a system to ensure best practices. The legislation also requires the Vermont Association of Hospitals and Health Systems and the Vermont SANE Program to enter into a memorandum of understanding to ensure improved access to SANE for victims of sexual assault in underserved areas.

The bill also creates a Sexual Assault Evidence Kits Study Committee that will address:

  • the current practice for kit tracking;
  • the effectiveness and cost of a system allowing online completion of sexual assault evidence kit documentation;
  • the feasibility and cost of a web-based tracking system to allow agencies involved in the response and prosecution of sexual assault to track sexual assault evidence kits;
  • the effectiveness and challenges of the current system of police transport of evidence kits form hospitals to Vermont Forensic Lab; and
  • The feasibility and cost of alternative methods of transport of sexual assault evidence kits such as mail, delivery service, or courier.

Telemedicine

S.50

Telemedicine services performed by health care providers who are outside of a health care facility will be reimbursed just as they would for an in-person appointment under the terms of S.50. The legislation states that health insurance plans cannot impose limitations on the number of telemedicine consultations that a person could receive in-person. It also prohibits a provider from recording a telemedicine consultation.

The bill requires providers to inform and obtain consent for the use of telemedicine prior to delivering services to patients. Providers must explain to patients the opportunities and limitations of delivering services through telemedicine. Providers must also inform patients if another individual will be observing a consultation. Finally, all services must be medically necessary and clinically appropriate to be delivered through telemedicine, and must be delivered over a secure connection that complies with patient privacy laws.

Universal Primary Care

S.53

After extensive consideration, the Senate Health and Welfare Committee decided a bill to guarantee universal primary care for all Vermonters would be tabled until next session. Committee Chair Sen. Claire Ayer, D-Addison, recognized that with the advent of accountable care organizations and the potential progression of the All Payer Model, implementation of universal primary care would not garner the dedication and attention needed for success.

In an attempt to continue the conversation, the chair asked Agency of Human Services Secretary Al Gobeille to provide a feasibility plan for a government-run primary care clinic accessible to all state employees. With the State of Montana as a successful model, Ayer believes this is an impactful first step towards improving access to primary care.

Vermont Practitioner Recovery Network

Act 39/S.14

The legislature enacted legislation to expand the Vermont Practitioner Recovery Network to offer support services to any Board of Medical Practice licensee who is experiencing an impaired ability to practice medicine with reasonable skill or safety. Previously, the program only evaluated and treated health care professionals who were impaired or at risk for impairment by the excessive use of drugs, including alcohol. The program will now also serve professionals needing help with a broader range of concerns, including depression, anxiety and cognitive decline due to aging.

 

INSURANCE

Workers’ Compensation for Mental Health Claims

S.56

Emergency responders engaged in a highly organized – and ultimately successful – lobbying campaign to create a presumption that post traumatic stress disorder suffered by police officers, ambulance workers and firefighters is work related upon diagnosis by a mental health professional. The presumption will continue for three years after the last date of service.

The bill also included a provision expanding mental health benefits for all employees. That provision got little attention from lawmakers, despite the arguments of some business and insurance groups that it could have a big impact on costs. The provision makes mental health claims compensable if the employee’s work-related stress was “extraordinary and unusual in comparison to pressures and tensions experienced by the average employee across all occupations.” Under current law, an employee must show that his or her stress is unusual compared to other employees in his or her line of work.

The bill requires the Department of Financial Regulation to conduct studies on ways to reduce costs for high-risk industries; on measures to encourage the creation of seasonal and short-term workers’ compensation policies; on the creation of a regional assigned risk pool; and on any cost savings that might result from the administration of the assigned risk pool by DFR and not by third party.

 

TAXATION

Miscellaneous Tax Bill

H.516

There are no new taxes and no new fees assessed in the Miscellaneous Tax Bill, H.516, but the legislature hopes it will raise at least $5 million through better compliance with tax laws.

The bill directs the Department of Taxes to use “new and existing strategies” to collect $3 million more from existing taxpayers in fiscal year 2018. Tax collectors also hope that by reducing the “hold harmless” rate for voluntary remittance of the use tax due from individuals ordering goods on-line from 0.2 percent to 0.1 percent of taxable income will help bring the tax yield up to a total of $5 million more than last year. Another provision changes the basis for the personal income tax from a taxpayer’s taxable federal income to adjusted gross income, but tax analysts say it will have no practical effect on taxpayers.

After years of singling out certain lines of business for special tax attention, such as audits on auctioneers or audits of records regarding equipment used in manufacturing, legislators expressed a desire for a better relationship with the business community. A provision in the bill requires the Taxpayer Advocate to convene a working group of interested stakeholders to examine ways the Department of Taxes can improve outreach and education to small business taxpayers. One of its jobs is to identify complex areas of law that could be simplified to enhance voluntary compliance.

Finally, the bill establishes a working group headed by the Secretary of the Agency of Natural Resources to develop long-term funding sources to support clean water efforts. Although State Treasurer Beth Pearce presented a comprehensive report to the legislature this session, a bundle of taxes proposed by the House Natural Resources, Fish and Wildlife Committee was ignored by the House Ways and Means Committee in light of the governor’s pledge to veto any new taxes and fees. The group is expected to focus on how to assess a per-parcel fee on real property.

Vermont Information Technology Leaders Funding

H.518/H.516

The legislature agreed to transfer $2.5 million from the Health Information Technology Fund to the Health Care Resources Fund to help finance the Medicaid program. The current HIT fund balance is $6 million. Since 2008, the state has assessed a 0.199 percent tax on all health insurance claims to support technology infrastructure to help doctors and hospitals share electronic medical records. The funds are directed to Vermont Information Technology Leaders, a private organization.

A provision in the miscellaneous tax bill extends the sunset on the health care claims tax for the health information technology fund for one year to July 1, 2018. The bill also requires the administration to evaluate how payments from the HIT fund have promoted advancement of heath information technology adoption, to recommend whether to continue the HIT fund with its current revenue source, to review the need for a state-sponsored HIT fund, and to recommend any changes to the structure of VITL, including whether it should be a public or private entity.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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