News from the Vermont State House - An analysis from DRM's Government & Public Affairs Team - March 2017

Downs Rachlin Martin PLLC

Downs Rachlin Martin PLLC

House Commerce Considers Independent Contractors, Again

Vermont's business community continues to plead with lawmakers to update the statute defining independent contractors, arguing that current law is costly and confusing. The House Commerce Committee responded last year by unanimously passing a bill that would have created clear standards. That bill was tabled when it reached the floor due to organized labor opposition.

On Thursday, the committee began again in earnest as it heard testimony from organized labor and business groups on three bills, H.119, H.223 and H.323.  

Current law defines “employee” expansively, which labor lobbyists argue is necessary to guarantee workers the protections that are afforded by employment, such as workers’ compensation and unemployment compensation.

Representatives of the Vermont Insurance Agents Association and the Vermont League of Cities and Towns testified that current law is confusing and hard to interpret. They urged the committee to adopt a clear standard that allows employers and employees to know at the outset what the law requires.

Jeff Couture of the Vermont Technology Alliance testified that the law needs to be updated to reflect the market realities of the technology sector, which is a growing part of Vermont’s economy. Couture argued that current law defines nearly all independent contractors as employees.

Vermont Businesses for Social Responsibility lobbyist Dan Barlow took a somewhat different tack from the other business groups. He argued that the legislature should adopt the U.S. Department of Labor’s Economic Realities test, which requires balancing six factors. He argued that the “nature of the business test,” which other business groups abhor, should be part of the analysis. Attorney Heather Wright, advising VBSR, said that “some level of lack of clarity” is necessary. Absolute clarity, she said, creates risks, and it is better to give up some clarity and allow for a consideration of the parties intentions.

More testimony is expected during the week of March 13th.


Health Care Committee Approves Expanded Workers’ Comp Mental Health Benefits

With no testimony from private insurers or business groups, the House Health Care Committee approved a bill this week, H.197, which creates a presumption that post-traumatic stress disorders suffered by a public safety officer is work-related. The bill creates an entitlement of eligibility if PTSD is diagnosed within three years of employment that would significantly increase costs for municipal workers’ compensation plans.

The bill also expands the definition of “occupational disease” for all employees to include work-related mental conditions that are either sudden or gradual in onset.

The dramatic increase in coverage for PTSD claims would mostly fall to the Vermont League of Cities and Towns, which insures most municipalities. Dave Sichel of the VLCT’s risk management division testified that the legislature should create a general-fund program to support public safety PTSD victims, but that approach received no support.

The bill is expected to be referred to the House Commerce and Economic Development Committee, which will likely give the proposal a more thorough vetting.


Committee Considers Replacing Universal Pre-K Program

The House Education Committee is considering a proposal that would repeal Act 166, the recently-enacted Universal Pre-Kindergarten law. The program provides a voucher to all three- to five-year-old Vermont children to pay for up to ten hours of pre-k education per week for 35 weeks per year at a public or private pre-school.

The committee has been reviewing the implementation of Act 166 for the past month, and some members believe the new program is not increasing low-income pre-k student enrollment, a stated goal of the law. All children are eligible for the same amount to pay for their ten hours of pre-k each week, regardless of financial need, an approach that some on the committee believe misdirects limited education funds to those who don’t need it. Committee Chair Rep. David Sharpe, D-Bristol, characterizes the program as “universal vouchers, not universal access.”

To fix what Sharpe says are “serious problems with the system in place,” the committee is considering a substitute program that would allow parents or guardians to enroll a three or four-year-old child in their local public pre-k program for free, or in any other public pre-k program, space permitting. Parents may also choose to enroll their child in a private high-quality child development program (4 or 5 STAR pre-school) and receive an income-based sliding scale subsidy based on the market rate. Sharpe believes that the cost of the program would be similar to the cost of the current Universal Pre-K program.

The committee has requested more detailed information regarding the impact of changing the current system and the feasibility of increasing low-income families’ access to quality early education. The committee will continue to explore the issue after Town Meeting break.


Push Continues for Universal Primary Care

A bill that would establish a system of universal, publicly-financed primary care for Vermonters beginning in 2019 was subject to a hearing in the Senate Health and Welfare Committee on Thursday. Introduced by 13 senators, S.53 is intended to provide all Vermonters with primary care without financial barriers that discourage access. The bill details the services to be included, as well as the providers who would be covered.

The legislation would create a Universal Primary Care Fund financed by General Fund appropriations, new taxes, waivers from federal law that support primary care for beneficiaries through Vermont Health Connect, and proceeds from grants and donations.

Steve Klein, chief fiscal officer for the Joint Fiscal Office, and Senior Fiscal Analyst Nolan Langweil said that before embarking on a financing plan the committee should consider potential federal action on the Affordable Care Act and potential restructuring of the Internal Revenue Service. Sen. Ginny Lyons, D-Chittenden, asked what steps the legislature could take to move universal primary care forward. Langweil and Klein suggested addressing primary care workforce issues.

Vermont Businesses for Social Responsibility Public Policy Manager Dan Barlow said his organization supports the bill. VBSR believes the state can no longer depend on employer-sponsored insurance. Barlow said businesses have coped with double-digit increases in health care premiums almost annually, and they support de-coupling health insurance from employment as well as public financing based on ability to pay. He said the current employer-based system results in uneven coverage for employees and an uneven playing field for employers.


House Takes up PFOA Bill

The House Natural Resources, Fish and Wildlife Committee heard testimony on Thursday on S.10, a Senate-passed bill that would require companies responsible for the release of PFOA in potable water supplies to connect affected residents to a municipal water system. The bill is aimed at helping homeowners in North Bennington whose wells have been polluted with the chemical. The homes are located near the former ChemFab manufacturing facility, which used the chemical as a coating.

In testimony on Thursday, Bennington County Sen. Brian Campion, D-Bennington, told the committee the bill is needed to make residents whole after their health and property values were compromised by PFOA release. Committee Lawyer Michael O'Grady told the committee the bill would be a tool for the Agency of Natural Resources to use in addressing PFOA pollution with a responsible party, but would not necessarily be invoked.


Governor Opposes House Water Funding Bill

Gov. Phil Scott issued a news release on Tuesday opposing a measure adopted by the House Natural Resources, Fish and Wildlife Committee which recommends a package of tax increases to finance the state's Clean Water Fund. Scott said it is too soon to determine that the work required to clean up Lake Champlain cannot come from existing resources, and his spokesman said he would not sign any bill that adds new taxes fees or surcharges, even if they aren't effective until later.

The package prepared by the committee was transmitted as a suggested draft to the House Ways and Means Committee. It recommends increasing the rooms, meals and alcohol tax by one percent, extending the 0.2 percent surcharge on property transfers and assessing a "clean water fee" of $10 per year on motor vehicle registrations. The draft omits increases in the gasoline and diesel taxes, which was included in earlier versions.

Scott said the first two years of the water program have been funded through a combination of General Fund and capital fund allocations, and that a significant amount of money would be available from an agreement with a developer who is laying an electric transmission line along the floor of Lake Champlain. He also said the Trump Administration may provide some funding through a proposed infrastructure investment program.

On Friday, House Ways and Means Chair Rep. Janet Ancel, D-Calais, said that committee is unlikely to act on the matter before the crossover date.


Senate Agriculture Committee Drafting Economic Development Bill

Senate Agriculture Committee Chairman Sen. Bobby Starr, D-Essex/Orleans, said this week that the committee will pass its own economic development bill aimed at stimulating growth in rural areas. The five-member committee has been quietly meeting with state officials, some business groups and several regional development corporations to develop a list of ideas.

Among the items being considered are hiring grant writers to help RDCs in rural areas apply for federal funding, easing environmental permit requirements, and making it easier for small and medium sized businesses to apply portions of the energy efficiency charge to projects within their companies, instead of paying the tax to Efficiency Vermont.

Meanwhile, the Senate Economic Development, Housing and General Affairs Committee worked all week on a draft economic development bill of its own. A new draft was released Friday for members to study over the week-long break. The committee also posted an updated draft of bill that would create a new Agency of Economic Opportunity.


Panel Delays Vote on Mental Health Crisis Response Commission

The House Health Care Committee spent considerable time this week on H.145, a bill that establishes a Mental Health Crisis Response Commission within the Office of Attorney General. The commission would review fatalities and serious bodily injuries that occur during interactions between law enforcement and persons demonstrating symptoms of mental illness. The bill was introduced in response to an incident in Burlington in which police fatally shot an individual experiencing a psychiatric crisis.

The bill would require a person who possesses information or records relevant to the fatality or serious injury to provide that information as soon as practicable to the commission. A person who provides the information would not be criminally or civilly liable for providing the information. All proceedings and records of the commission would be confidential and not subject to subpoena or discovery.

The committee will hear from law enforcement after Town Meeting break on questions they have on the bill before taking a formal vote.


Panel Passes Bill to Evaluate Deaths by Suicide

The House Health Care Committee on Friday unanimously passed H.184, a bill that requires the Agency of Human Services to evaluate the profile and factors related to each suicide in the state and report the findings annually. Suicide was the eighth leading cause of death among Vermont residents in 2013 and the tenth leading cause of death in the United States in 2013. Vermont has seen an increase in suicides from 75 in 2005 to 114 in 2014.

Bill sponsor Rep. Anne Donahue, D-Northfield, said it is important for the state to go beyond demographic data and identify the gaps and barriers for suicide prevention activities. Risk factors for suicide include depression and substance-abuse disorders, often in combination with mental health disorders. Males are more likely to die by suicide than females. The most common method of suicide death among Vermont residents was gunshot wound (50 percent).

Department of Mental Health Deputy Director Mourning Fox said the department supports the bill, but it is limited in the information to which it has access. Death certificates provide only basic vital information. Fox said making in-depth recommendations on improvements to suicide prevention based on death certificates is not recommended. The department committed to exploring other data sources and reporting back to the committee.


Panel Releases Draft Mental Health Bill

The Senate Health and Welfare Committee on Friday released a new draft bill that examines various aspects of the mental health system in order to improve access to care and care coordination. The committee combined the ten studies reported on in last week’s update into one action plan to be provided by the Agency of Human Services.

The current draft includes new appropriations of $30 million of Medicaid Global Commitment funds for the Department of Mental Health to increase salaries for direct care workers at designated agencies and for specialized service agency employees and contractors. The proposal would allow workers to receive at least 85 percent of the salaries earned by equivalent state, health care, and school-based positions with equal lengths of employment. Committee Chair Sen. Claire Ayer, D-Addison, expressed surprise at the high cost of the proposal, but said she is prepared to defend the request to the appropriations committee.


Panel Proposes DSH to Fund Mental Health Priorities

The House Health Care Committee spent considerable time this week identifying its budget priorities for the House Appropriations Committee. On a 10-1 vote on Friday, the committee recommended that Disproportionate Share Hospital payments be reduced even further from the governor’s recommendation of 10 percent to 20 percent in order to fund a number of mental health initiatives. The state makes the federally matched payments to hospitals to cover their uncompensated patient costs.

The committee identified the following mental health priorities and allocation of the $3.35 million of Medicaid Global Commitment funds:

  • $2.45 million to increase salaries for crisis service clinicians, increase crisis service clinician positions, and to the extent crisis beds are unavailable due to lack of staffing, increase crisis bed staffing salaries to a sufficient level;
  • $500,000 to establish pilot projects in nursing homes or residential care facilities to accept geriatric residents with psychiatric care needs; and
  • $400,000 for ten additional Pathways for Housing-funded slots for patients recently discharged from inpatient psychiatric hospital units.

The committee also recommended that the Green Mountain Care Board use its bill-back authority for the entities it regulates. The board’s proposed budget would shift some of its funding from the General Fund by billing back hospitals, insurers and other entities. The committee requested the board to explore ways to adjust industry bill-back allocations in a more equitable manner and to consider whether accountable care organizations should be subject to bill-back.


Senate Approves Circulating Nurse Bill

The Senate has passed S.31, a bill that would 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. Best practice in Vermont hospitals is currently to 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.


Draft DMV Measure Would Eliminate Front License Plates

The Senate Transportation Committee is considering a draft bill that would remove a requirement that motor vehicles registered in the state bear both front and rear license plates. The committee is expected to act on the measure after the Town Meeting Day break.

Vermont is one of 31 states that require vehicles to display both a front and rear license plate. Occasionally, it has allowed a special purpose plate, such as one celebrating the state's bicentennial, to be temporarily placed over the front plate.

Single plate laws have been vigorously opposed by law enforcement officials, who believe the front plate is critical to monitoring oncoming traffic. The committee is expected to vote on the measure after the Town Meeting Day break.

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