Vermont Legislative Update 5-4-18 - An analysis from DRM's Government & Public Affairs Team

Downs Rachlin Martin PLLC

Downs Rachlin Martin PLLC

Medical Monitoring Bill Moves On

The House Judiciary Committee sent a version of S.197 to the Senate floor that eliminates the Senate-passed provisions creating strict, joint and several liability for release of harmful substances, but advances a new right to unlimited medical monitoring for persons exposed to harmful substances. The bill passed the full House on Friday.

To qualify for monitoring under the House bill a person would need to be exposed to greater than background levels of a harmful substance and face a greater risk than the general public of contracting a disease. The exposure would qualify if a substance is on one of several government lists, or if an expert witness can determine that it might be harmful. The person does not need to show he or she has symptoms or that a disease is likely to develop.

Provisions of the Senate bill dealing with strict liability were modified in the House committee and appended to the Senate-passed S.123. That bill is expected to be referred to the House Commerce Committee for a closer look at insurance impacts.

A conference committee is likely to be appointed with the Senate on S.197, and senators are expected to push for the addition of the strict liability provisions.

Senate Nixes House Education Income Tax Surcharge Plan

The Senate has rejected an idea that came from the House Ways and Means Committee to create a new income tax surcharge for education funding and reduce residential property taxes. The changes in the bill, H.911, will lead to a conference committee between the House and Senate on education funding.

H.911 as amended in the Senate accepts most of the administration’s proposal to make changes in the personal income tax to avoid an unintended $30 million increase borne by middle-income families. The Senate version would extend a five percent tax credit on charitable contributions to all such contributions, instead of limiting it to $10,000 per taxpayer as in the House plan. The bill also reduces across-the-board tax cuts of 0.2 percent to 0.1 percent for the highest two income brackets. Neither bill deals with a projected $58 million shortfall in the statewide Education Fund.

Bill to Outlaw Negligence Waiver Clauses Nears Final Approval

Both the House and Senate have given preliminary approval to a bill, S.105, that would label unconscionable a variety of provisions that are commonly included in standard form contracts between businesses and individuals.

There has been surprisingly little opposition to a bill that would essentially outlaw the common “waiver of negligence” forms that are widely used in the recreation and non-profit fundraising industries. Among the contract provisions that would be deemed presumptively unconscionable:

  • A requirement that resolution of legal claims take place in an inconvenient venue.
  • A waiver of the individual’s right to assert claims or seek remedies provided by State or federal statute.
  • A waiver of the individual’s right to seek punitive damages as provided by law.

Although courts would evaluate whether such terms are enforced, few organizations will likely include them, since the risk of losing would mean the payment of additional penalties and attorneys fees.

Vermont courts have evaluated the validity of negligence waiver clauses on a case-by-case basis. The genesis of S.105 is unclear, but is strongly supported by the Vermont association of plaintiffs’ attorneys. Opponents have requested that Gov. Phil Scott veto the bill.

Contract Renewal Bill Passes House and Senate

The House and Senate have tentatively approved a bill, H.593, that would add additional requirements for contracts that automatically renew for one year or more. The House added an unrelated bill dealing with debt collections before sending it back to the Senate on Wednesday.

Several Vermont technology companies made a last-ditch plea to the House Commerce and Economic Development Committee over the last two weeks, arguing that the measure would impose unique costs on them that no other state imposes. In addition to regulating agreements with individual consumers, the bill would also regulate the automatic renewal terms that are included in business-to-business agreements. One company suggested it would move out-of-state if the measure passes.

While the legislature often professes support for the technology sector, those pleas fell largely on deaf ears. The Commerce Committee made a token change, agreeing to extend the effective date until July, 2019, thereby giving companies the opportunity to make their case to the legislature next year that the law should not take effect. The Senate has yet to agree to the extended effective date.

Paid Family Leave Passes Another Panel

With little time left in the session, the Senate Committee on Finance on Thursday amended and passed H.196, the paid family leave bill, by a vote of 6-1.

An updated fiscal note prompted the committee to amend the proposal by reducing the 0.141 percent payroll tax that will fund it to 0.136 percent. The Department of Taxes reported that first-year program implementation will cost $500,000, $2 million less than the previous estimate, prompting the committee to reduce the payroll tax on employees. The committee also clarified the roles that the Department of Taxes and the Department of Labor will have in administering the program.  

The payroll tax would be collected on the first $150,000 in employee wages and would cover 70 percent of wage replacement during leave taken under the program. An employee could receive up to 12 weeks of paid parental leave and six weeks of paid family leave. Unlike the House-passed version of the bill, grandparents would not qualify for paid leave. An employee who takes paid leave must be reinstated in the first available position comparable to the position that he or she held when the leave began. The employee would not be guaranteed his or her original job, and employers with fewer than 10 employees would be exempt.

Omnibus Environmental Bill Advances in Senate

The full Senate next week will consider H.559, a bill that combines a number of innocuous measures with one that would allow citizens to sue responsible parties and state government for the enforcement of water quality laws. That provision, aimed at the agricultural sector, is considered a “poison pill” if it remains in the bill when it reaches the governor’s desk. It also appeared in the Senate’s version of S.260 dealing with funding for water quality improvements, but it is not included in the House version.

Among the bills included in H.559 are H.881, a bill that would clarify that corrective action plans don’t require an amendment under Act 250 and H.549, extending the Petroleum Cleanup Fund for ten years beyond its current expiration date of June 30, 2019. Advocates of those bills are now pursuing alternative strategies for ultimate passage.

House Passes Medicaid Technical Bill

The House Health Care Committee on Wednesday passed S.262, a bill that proposes a number of technical changes on the operations of the Department of Vermont Health Access that in some instances brings the department in compliance with state or federal law.

The bill includes a provision that allows health insurance plans to offer at least one Bronze-level qualified health plan without a prescription drug maximum out-of-pocket limit. The department supports the change in order to allow an additional enrollment option for customers who do not benefit from the prescription drug limit and to promote stability and innovation in the qualified health plan market.

The bill also extends the timeframe for the department to hold a hearing on a provider tax appeal from 20 days to 90 days. The department collects taxes from Medicaid-enrolled providers. The change will alleviate the current time pressure facing DVHA and providers to find, examine, and prepare to present all of the evidence and witnesses that may be necessary for appeals and to provide a greater opportunity to reach a stipulated agreement.

Individual Mandate Goes to Conference

The House Health Care Committee on Tuesday reviewed the Senate’s changes to H.696, a bill that establishes a working group to make recommendations on how the state would administer and enforce an individual health insurance mandate. The Senate removed a requirement for Vermonters to buy health insurance by Jan. 1, 2019 because members felt that deadline was too soon since the state doesn’t know how the penalty would be enforced.

On Wednesday, the committee requested that a committee of conference be appointed to work out the differences in the bill.

Committee Contemplates Universal Primary Care

The House Appropriations Committee on Friday took testimony on S.53, a bill that would create and implement a universal primary care program for all Vermonters. The bill would require the Green Mountain Care Board to facilitate a working group that would develop a draft operational model by Jan. 1, 2019. The model would address who would be eligible for the program, which providers would deliver the care and how funds for primary care services would move through the health care system.

Department of Vermont Health Access Deputy Commissioner Michael Costa said the Administration opposes the bill. He expressed concern with a lack of alignment of universal primary care with other health care reform efforts. He said universal primary care doesn’t directly address the high cost of health care, which is the administration’s top priority. Costa said the bill could put those efforts and the all-payer model project at risk of failure. It also calls for new taxes which the Scott Administration adamantly opposes.

Joint Fiscal Office Analyst Nolan Langweil testified that the GMCB has estimated that it will need $740,000 to $830,000 for contracts and additional staff resources to develop a draft operational model. He said the GMCB has the authority to bill back for administrative expenses related to this project to the entities it regulates. These entities can in turn pass those costs on to consumers. The state’s portion of the bill-back is 40 percent or up to $350,000.

Panel Delays Vote on Opioid Tax

The Senate Finance Committee on Friday delayed action on a bill that would impose an assessment on manufacturers of prescription opioids dispensed in Vermont. The language is slated to be included in H.922, a bill that makes numerous changes to Vermont’s tax laws.

Committee Chair Ann Cummings, D-Washington, said the goal is to generate $3.1 million in revenue to fund substance use disorder prevention, treatment and recovery programs and activities. The assessment will be allocated proportionally based on each manufacturer’s share of dispensed opioids in Vermont. Manufacturers will be prohibited from increasing the price of a prescription opioid to recover the cost of the assessment. Opioids used in medication-assisted treatment for substance use disorder are exempt from the assessment.

Sen. Randy Brock, R-Franklin, raised concerns about the potential for increasing costs to necessary prescribed medications, as well as potential legal implications. The committee has asked for a legal opinion on the permissibility of imposing the tax.

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