Legislative Updates for the 2017 Session
Use Tax ‘Hold Harmless’ Option May be Cheaper
The House Ways and Means Committee is considering a proposal from the Vermont Department of Taxes to reduce the amount of use tax a person can pay without providing records to prove his or her tax liability. The rate would drop from 0.20 percent of adjusted gross income to 0.10 percent, but would still be the highest such assessment in the nation.
Under current law, taxpayers are supposed to calculate the amount of “use” tax that is due for on-line and out-of-state purchases on which the vendor does not collect the tax. Residents are required to remit it when they file their income tax returns. Only ten percent of taxpayers admit that they have bought anything without paying either the sales or use tax, according to the tax department. The department says much more is owed and is considering ways to crack down on delinquent shoppers.
To encourage compliance, the department offers a “hold harmless table” where taxpayers can remit a fixed share of their adjusted gross income under the assumption that the amount approximates what is due. By making the payment, individuals would not have to prove what they spent and thus would be immune from prosecution.
Professional tax preparers who use the table now say the amount due is always higher that the amount their clients actually owe. By cutting the 0.20 percent rate in half the department hopes to greatly improve compliance.
Senate Committee Approves Economic Development Bill
A Senate committee has put together a broad-ranging economic development bill, S.135, that makes modest changes to economic development programs, includes a study of how changes to the minimum wage affect the “benefits cliff” and a study of the risks and rewards of new developments in the field of financial technology. The Senate Economic Development, Housing and General Affairs Committee approved the bill on a 5-0 vote on Friday morning.
The bill requires a company receiving incentives under the Vermont Economic Growth Incentive program to attest that it meets all regulatory requirements of Vermont law. The bill would clarify the confidentiality of company records submitted as part of the program. It directs the state to establish a public retirement plan and encourages workforce development. The bill would allocate an additional $750,000 toward staffing in the Small Business Development Center and marketing the state as a place to live and work.
Far-Reaching Toxic Chemical Bill Takes Smaller Bite
A toxic chemical bill that incorporates recommendations of a working group on the use of chemicals of “emerging” concern has been narrowed to include a provision that would create an Interagency Committee on Chemical Management and another that would require testing of groundwater before it is used as a potable water supply. The bill, which originally called for granting authority to private citizens to sue companies for enforcement of environmental laws and pay for medical monitoring of exposed citizens, was pared from 81 pages to 13.
The resulting bill recognizes that manufacturers, laboratories and other entities that use toxic chemicals are already required to report on their toxicity, volume and use under as many as 24 state and federal programs; but the information is uncoordinated, widely inaccessible to the public and difficult to interpret. The goal of the interagency committee will be to make existing programs meaningful and recommend future improvements.
Commission on Act 250: The Next 50 Years
The House Natural Resources, Fish and Wildlife Committee worked late on Friday to approve a bill, H.424, that recognizes the historical significance of the state’s first land use control law, Act 250, and creates a commission to recommend revisions aimed at development in the next 50 years. Act 250 was enacted in 1970. If the commission succeeds in substantially rewriting the iconic statute, it would achieve what many panels over the past 50 years have tried and failed to do.
The committee considered enacting a number of minor changes to the law – such as one governing the siting of temporary meteorological stations – but opted instead to establish a commission and await further recommendations. The commission will hold meetings around the state and its mission will including looking at some common questions, such as whether appeals should be heard as new cases (de novo) or on the record of earlier proceedings. It would also include some new twists such as how to address climate change and how to manage habitat connectivity. The report would be due in January, 2019.
Employee Use of Social Media Topic of Debate
An employee’s right to use his or her own blog, Facebook account or electronic device without oversight by an employer is the topic of a bill approved late today by the House Commerce and Economic Development Committee. The bill, H.462, also attempts to articulate when and how an employer is entitled to request access to information when its legal rights or proprietary information is compromised.
The bill also attempts to navigate around the need for law enforcement agencies to screen potential employees for “sensitive positions,” but it does not extend the same rights to employers of other persons performing sensitive work.
Committee Raises Age for Tobacco Purchases
The Senate Health and Welfare Committee gave its unanimous approval on Friday to a bill, S.88, that would increase the minimum age for tobacco purchases from 18 to 21.
Erin Sigrist, president of the Vermont Retail and Grocers Association, testified against the measure on Wednesday, saying that the association opposed the bill based “strictly on its financial impact.” She said her border state members would be the most adversely impacted by the bill, but also acknowledged that her membership was divided in its position.
The Joint Fiscal Office estimated on Friday that the state would lose $742,500 in tax revenue next year from the proposal. That struck some as a preposterously high tax bill for a relatively small cohort of mostly teenage smokers. Nonetheless, unlike its federal counterpart at the Congressional Budget Office, the JFO’s figures are accepted as fact by the legislature.
The bill will be considered by the full Senate next week. A similar bill passed the House last year, so the legislation is likely to reach the governor’s desk this year.
Emergency Responders Seek Coverage for PTSD Claims
The House Commerce Committee spent two days this week considering a bill, H.197, that would create a presumption that post-traumatic stress suffered by police officers, ambulance workers and firefighters is work-related and therefore compensable under the workers’ compensation system. The bill would also lower the threshold of compensability for mental health claims submitted by all workers.
The committee heard testimony from a number of emergency responders who argued that due to the nature of their jobs, a certain percentage of workers will suffer from PTSD. Under the state Supreme Court case of Crosby v. City of Burlington, such claims are not compensable unless the stress that is suffered is greater than that experienced by employees in similar jobs.
In addition to creating a presumption of compensability for PTSD claims by emergency responders, H.197 would also overturn the Crosby decision for all mental health claims.
The Vermont League of Cities and Towns argued that the bill would increase costs by as much as five percent, but perhaps higher, for municipalities. Private insurers testified that the bill would also have a significant impact on all employers.
The bill has the strong support of House Speaker Mitzi Johnson, D-South Hero, and Senate President Tim Ashe, D/P-Chittenden, so passage of some version is preordained. Nonetheless, Committee Chair Bill Botzow, D-Pownal, indicated his intention to perform due diligence on the bill, and tasked a variety of parties with refining the cost estimates and considering alternatives.
Committee Declines Effort to Create New Telecom Merger Standard
The House Energy and Technology Committee took testimony this week on H.392, a bill that would have required any merger or consolidation of telecommunications companies be consistent with the state’s telecommunications plan. As drafted, the bill would have applied to the proposed merger of FairPoint and Consolidated Communications, which is pending approval by the Public Service Board.
Public Service Department Director of Telecommunications Jim Porter expressed concern about the bill, saying that its application to a pending docket is “problematic,” and he was not sure what the bill would accomplish given existing review standards. He said federal law would preempt Vermont from imposing broadband standards that are included in the plan. And he acknowledged that the state is an outlier in its regulation of the telecommunications industry, as most other states have deregulated this market.
Porter said he could live with the bill if it was applied prospectively, and the committee appears likely to make that change if the bill comes up again. The bill’s sponsor, Rep. Laura Sibilia, I-Windham-Bennington, said her proposal would be “best tackled in the second year of the biennium,” so the measure is unlikely to be considered further this year.
Changes Approved for Telephone Lifeline Program
The House Energy and Technology Committee approved legislation this week, H.216, that makes changes in the state’s Lifeline program in response to changes in federal regulations.
Department of Children and Families Commissioner Ken Schatz said federal regulations have significantly increased the administrative requirements for the Lifeline program. Private carriers are eligible to receive federal funds for administrative costs, while the state is not. DCF has been able to administer the program within its existing budget, but Schatz said it would need additional appropriations from the legislature if it was to continue making eligibility determinations. Under the bill, private carriers will be required to make these determinations, although DCF will still make determinations based on categorical eligibility.
Commerce Recommits to Independent Contractor Reform
Mid-week rumors of the death of independent contractor legislation turned out to be unfounded. After a long and divisive hearing on Tuesday, it was reported that House Commerce Committee Chair Rep. Bill Botzow, D-Pownal, had thrown in the towel until the various parties could reach agreement. On Friday, however, Botzow recommitted to solving the thorny problem.
Committee members seemed to agree that the Department of Labor should have rulemaking authority, perhaps hoping to delegate to the agency the elusive task of defining precisely who is an “independent contractor” and who is an “employee.” Several members are eager to jettison the so-called “nature of the business” test that now applies; a standard with such broad reach that many independent businesses are deemed to be employees by virtue of the type of work they perform.
Additional hearings next week are likely.
Panel Advances ACO Governance Bill
The Senate passed S.4 this week after a unanimous vote by the Senate Health and Welfare Committee on Tuesday. The bill would require meetings of an accountable care organization board of directors to be open to the public. ACOs are groups of health care providers who come together voluntarily to provide coordinated care to patients.
The bill requires that the meetings be open except when an organization is considering business related to contracts, proprietary information, prosecution or civil litigation, personnel matters, or information prohibited from disclosure by the Health Insurance Portability and Accountability Act. ACOs will be required to post a notice of board meeting schedules at least one week prior to meetings and agendas at least 48 hours before meetings. Minutes or recordings must also be available to the public.
OneCare Vermont, the office of health care advocate, and the American Civil Liberties Union worked on compromise language during Town Meeting Day break. Health Care Advocate Michael Fisher said he was not completely satisfied with the bill, but it is a valuable step forward.
Hospitals May be Required to Employ Sexual Assault Nurses
The Senate Health and Welfare Committee on Friday passed S.95, a bill that would require all critical access hospitals to offer patients care from an employee who is also a certified sexual assault nurse examiner or have access to a shared regional staffing pool that provides that service. It also would require appropriate emergency department personnel at all hospitals to receive annual training regarding standards for care of sexual assault patients. The goal is to provide timely, compassionate, patient-centered care in private settings that provide emotional support and reduce further trauma to the patient.
The bill creates a Sexual Assault Evidence Kits Study Committee that will address:
• The current practices 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 from hospitals to the 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.
Unanimous Support for Mental Health Commission
The House Health Care Committee on Thursday unanimously approved H.145, a bill that would establish 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 who was 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 could not be criminally or civilly liable. All proceedings and records of the commission would be confidential and not subject to subpoena or discovery.
Vermont State Police St. Albans Station Commander Maurice Lamothe said the VSP supports the bill, but he requested that the commission review situations that result in death only and not bodily injury since the VSP already has a robust process for bodily injury reporting. The committee rejected that proposal.
Committee Advances Mental Health Legislation
The Senate Health and Welfare Committee unanimously approved a bill on Friday to examine various aspects of the mental health system in order to improve access to care and care coordination throughout the mental health system. The bill attempts to address hospital flow and other system pressures that have left individuals awaiting appropriate placement.
The bill includes $30 million in funding for salaries in the designated mental health agencies. The funding source remains unclear. Committee Chair Sen. Claire Ayer, D-Addison, intends to work with the finance and appropriations committees to find the money.
Panel Considers Bill Back Assessment
In 2012, the legislature authorized the Green Mountain Care Board to bill hospitals and insurance carriers for the cost of oversight and regulatory activities. As part of the GMCB’s budget presentation, the committee noted a significant increase in bill-back revenue. The committee asked the GMCB to review the statutory bill-back allocations between hospitals and insurance companies, craft proposals that provide for a more equitable allocation and report back to it. The committee also asked whether Accountable Care Organizations should be included in the assessment.
Executive Director Susan Barrett and Financial Director Kate Slocum said the board will bill back $3.4 million to regulated entities in 2018. Slocum provided scenarios based on the percentage of premiums for health insurers and net patient revenue for hospitals. The scenarios reduce the current four categories to two -- hospitals and commercial insurers. The GMCB said it is premature to bill back to ACOs since the board is unsure of the extent of the regulatory work that will be required and the potential for double payment by hospitals that are members of an ACO.
Slocum said whichever option the committee decides to proceed with, the Board would like a sunset of three years with the intent to revisit the industry membership at that time. Joint Fiscal Office Analyst Nolan Langweil said in addition to the proposals offered by the GMCB, the committee could shift the state’s 40 percent share downward and allocate a percentage to the ACOs even without knowing the amount of oversight needed.
Lawmakers May Exercise Oversight of ACOs
The House Health Care Committee on Friday passed a bill that would require the Department of Vermont Health Access to provide periodic reports to the Health Reform Oversight Committee and legislative committees of jurisdiction regarding the implementation of the one-year Medicaid Pilot Program contract with OneCare Vermont, the state’s largest accountable care organization.
The Department of Vermont Access and OneCare Vermont support the bill to the extent that it aligns with reporting already addressed in the Medicaid ACO contract.
Paid Family Leave Passes Committee
Over the objection of four committee members on Friday, the House Committee on General, Housing and Military Affairs passed H.196, a bill that would mandate the provision of 12 weeks of paid family leave for Vermont employees.
The proposal would expand the current unpaid family leave law by guaranteeing an employee his or her their job (or a comparable job) upon return from up to 12 weeks of fully paid leave for pregnancy, adoption, foster care, serious illness, or the serious illness of a family member. Employees will pay into a Family Leave Insurance Special Fund through a 0.93 percent payroll tax. Initial versions of the bill mandated a fifty percent employer contribution to the tax, but the committee made employer contributions voluntary. For state employees, Rep. Tom Stevens, D-Waterbury told the committee that it would likely become a part of the state employee bargaining process.
The bill does not exempt small businesses from providing the insurance, but does carry forward current unpaid leave law exceptions aimed at protecting small businesses. Additionally, employees utilizing the benefit must have worked in Vermont for six of the previous 12 months.
Committee Chair Rep. Helen Head D-South Burlington, said upon passage that she was “encouraged by the progress that this bill represents for our workers and how it improves their ability to bond with their loved ones and care for them.” Rep. Heidi Scheuermann, R-Stowe, countered by voicing extreme concern over the “$79.4 million payroll tax on Vermonters,” adding that “starting a new state program right now is not appropriate when we’re potentially facing massive federal budget cuts.”
The House Ways and Means began review of the bill this week in anticipation of its passage and will officially take up the bill next week.
Committee Requires 10-Year Telecom Plan to Consider Education, Public Safety, Health Care Needs
The House Energy and Technology Committee this week easily passed H.347, a bill that 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 committee heard testimony on Thursday from witnesses who emphasized the need for fiber optic and cell coverage in their areas, describing the current safety, communication and programming issues caused by black holes in coverage.
Jim Porter of the Public Service Department told the committee that it may be a good idea to have specific survey guidance.