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NO. 119. AN ACT RELATING TO ASSURING A LIVABLE INCOME FOR ALL WORKING VERMONTERS.

(H.837)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. LEGISLATIVE FINDINGS AND PURPOSES

(a) The General Assembly finds that any Vermonter, employer or employee, who works full-time should receive wages and employment benefits that are fairly commensurate with the value of the services rendered. Wages and employment benefits together with supplemental public benefits should provide an income sufficient to pay for basic human needs.

(b) There are still many public policy and economic questions that require further research and analysis in order to find ways, both legislative and otherwise, to reduce or eliminate the livable income gap for Vermonters without creating negative economic or fiscal impacts.

(c) Extensive and appropriate statistical data on employment, taxes, education, workforce training and economic development issues is needed to make informed policy decisions. To this end, it is necessary to establish standardized benchmarks, using consistent methodology, with which to measure progress toward a state economy that can support a livable income for all Vermont wage earners.

Sec. 2. 32 V.S.A. § 5828b is amended to read:

§ 5828b. EARNED INCOME TAX CREDIT

(a) A resident individual or part-year resident individual who is entitled to an earned income tax credit granted under the laws of the United States shall be entitled to a credit against the tax imposed for each year by section 5822 of this title. The credit shall be the greater of

(1) the applicable percentage; or

(2) *[25]* 32 percent

of the earned income tax credit granted to the individual under the laws of the United States, multiplied by the percentage which the individual's earned income that is earned or received during the period of the individual's residency in this state bears to the individual's total earned income. For purposes of this section, "applicable percentage" means the percentage of federal income tax liability specified in section 5822 of this title, as amended from time to time.

* * *

Sec. 3. 32 V.S.A. § 9775 is amended to read:

§ 9775. RETURNS

(a) Every person required to collect or pay tax under this chapter shall, where the sales and use tax liability under this chapter for the immediately preceding calendar year has been (or would have been in cases when the business was not operating for the entire year) $1,000.00 or less, pay the tax imposed by this chapter in quarterly installments on or before the 25th day of the calendar month succeeding the quarter ending on the last day of March, June, September and December of each year. In all other cases, except as provided in subsection (e) of this section, the tax imposed by this chapter shall be due and payable monthly on or before the 25th (23rd of February) day of the month following the month for which the tax is due. Payment by electronic funds transfer does not affect the requirement to file returns. The return of a vendor of tangible personal property shall show his receipts from sales and also the aggregate value of tangible personal property sold by him, the use of which is subject to tax under this chapter. The return of a recipient of amusement charges shall show all those charges and the amount of tax thereon. The return of a telecommunications service provider shall show all receipts on which a tax must be paid by a purchaser and the amount of tax thereon.

* * *

(e) A person who otherwise is required to file returns and pay tax monthly and who, upon annual application to the commissioner on or before June 1 of each year, demonstrates to the satisfaction of the commissioner that at least 50 percent of its sales during the immediately preceding calendar year were sales of building materials to contractors for the improvement of real estate, and that those sales were made on credit terms by the person required to collect the tax with an average credit period of at least 40 days, may, upon approval by the commissioner, file and pay taxes in quarterly installments from July 1 of that year to June 30 of the following year, as provided in subsection (a) of this section. If a person with such approval fails to timely file or pay any such quarterly return and installment, that person’s approval to file quarterly shall be deemed immediately revoked, and that person shall thereafter file returns and pay tax monthly as provided in subsection (a) of this section.

Sec. 3a. 32 V.S.A. § 5914(c) is amended to read:

(c) With respect to each of its nonresident shareholders, an S corporation shall for each taxable period be liable for all income taxes, together with related interest and penalties, imposed on the shareholder by Vermont with respect to the income of the S corporation. An S corporation shall declare estimated tax, and shall pay estimated tax, including applicable interest and penalties, on such liability in the manner and at the times specified for individuals in subchapter 5 of this chapter; provided, however, that an S corporation with a single shareholder and a tax liability under this section of $250.00 or less in the prior year, and an S corporation with two or more shareholders and a tax liability under this section of $500.00 or less in the prior year, may file the entire estimated amount on or before the fourth payment date, January 15. For purposes of this subsection, "estimated tax" means an amount equal to the highest federal marginal tax rate in effect for individuals multiplied by the rate prescribed under section 5822 of this title multiplied by the shareholder's pro rata share of the income attributable to Vermont.

Sec. 3b. 32 V.S.A. § 5920(c) is amended to read:

(c) With respect to each of its nonresident partners or nonresident members, a partnership or limited liability company shall for each taxable period be liable for all income taxes, together with related interest and penalties, imposed on the partner or member by Vermont with respect to the income of the partnership or limited liability company. A partnership or limited liability company shall declare estimated tax, and shall pay estimated tax, including applicable interest and penalties, on such liability in the manner and at the times specified in subchapter 5 of this chapter; provided, however, that a partnership or limited liability company with a single partner or member and a tax liability under this section of $250.00 or less in the prior year, and a partnership or limited liability company with two or more partners or members and a tax liability under this section of $500.00 or less in the prior year, may file the entire estimated amount on or before the fourth payment date, January 15. For purposes of this subsection, "estimated tax" as used in subchapter 5 of this chapter shall mean an amount equal to the highest federal marginal tax rate in effect for individuals multiplied by the rate prescribed under section 5822 of this title, multiplied by the partner's or member's pro rata share of the income attributable to Vermont, reflected on the partnership's or limited liability company's declaration of estimated tax of the taxable period.

Sec. 4. BASIC NEEDS BUDGET CALCULATIONS; JOINT FISCAL OFFICE

The joint fiscal office shall issue a report on or before January 15 of each year until January 15, 2004 that includes a computation of base line data of the cost of living in Vermont and the current wage levels within various sectors of the economy, using the methodology of the report prepared for the livable income study committee issued on November 9, 1999. The report shall include:

(1) A set of “basic needs budgets” for various household configurations for the previous year. The “basic needs budgets” are calculations of the amount of money needed by various household configurations to maintain a decent standard of living in Vermont, using current state and federal data sources for determining such basic monthly expenses as food, housing, transportation, child care, utilities, personal expenses and health care.

(2) A review of current state wage distributions.

(3) Changes in the federal minimum wage and in the minimum wage rates of surrounding and comparable states.

Sec. 5. 10 V.S.A. § 542 is amended to read:

§ 542. REGIONAL WORKFORCE INVESTMENT BOARDS

* * *

(b) Members of each regional workforce investment board shall include individuals or representatives of employers and employees from large and small businesses, secondary and post-secondary educational institutions, regional technical centers, economic development organizations or chambers of commerce, or both, workforce education and training organizations, and public agencies with work force education and training responsibilities. The human resources investment council shall review the regional workforce investment board membership to ensure a balance between employers, employees and workforce program providers with 51 percent of membership representing employers. Members shall not receive compensation or reimbursement for expenses.

* * *

(d) *[Each workforce]* Subject to available resources, each investment board shall report to the human resources investment council in the manner described by the council. The report shall include the following:

(1) A comprehensive regional workforce development strategic plan that addresses the region’s economic development, education and training, and employment needs, including a plan for outreach to workers who earn less than a livable income, which for the purposes of this section means the equivalent of the annual basic needs budget for a single person without dependents, as computed pursuant to annual calculations performed by the joint fiscal office. The strategic plan shall be updated biennially or as requested by the human resources investment council.

(2) An annual workforce development work plan that describes the efforts of its members to implement the goals of the strategic plan, including the following:

(A) Specific training solutions and programs that address the needs identified in the strategic plan.

(B) Work opportunities that help increase the income of workers who earn less than a livable income.

(C) Proposed outcomes and accountability measures for determining whether the objectives described in the regional workforce development strategic plan have been met.

(3) An annual evaluation and report on the success of the members in carrying out the following:

(A) The annual workforce development work plan, including information about the effectiveness and rate of workforce retention of any training programs implemented in the work plan.

(B) The workforce education training fund programs based on the indicators in the workforce investment act and any other performance indicators requested by the human resources investment council.

Sec. 6. STATE PROGRAM ANALYSES; INCOME IMPACTS

(a) Public assistance analysis. The Secretary of Human Services shall:

(1) Catalogue all income eligibility requirements of state and federal programs that assist Vermont residents.

(2) Analyze the relationship between basic needs budgets, as established in annual calculations performed by the joint fiscal office, and benefit levels to determine the combination of assistance programs that would be available to various-sized households with different incomes.

(3) Incorporate the information from the 2000 census into the public assistance analysis required by this subsection.

(b) Tax and fiscal analysis. The Secretary of Administration shall:

(1) Catalogue all income-sensitive tax programs.

(2) Analyze the relationships between basic needs budgets, as established in annual calculations performed by the joint fiscal office, and income-sensitive tax and credit provisions as they apply to various household sizes and income levels.

(c) The Secretary of Human Services and the Secretary of Administration shall jointly recommend modifications to existing public assistance and tax programs, both federal and state, to create a graduated, equitable, comprehensive and integrated approach to help working Vermonters meet their basic needs budgets, and to preserve financial incentives to work, advance and improve workplace skills. The secretaries shall report their findings and recommendations to the Governor, the General Assembly and the Vermont Congressional Delegation annually on January 15, until January 15, 2004. The reports shall include proposed changes to:

(1) Eligibility criteria or benefit amount, or both, of the various public assistance programs to assure that any working Vermonter receives sufficient income to meet the basic needs budget; and that a substantial percentage of any wage increase remains with the worker.

(2) Tax programs, with the goal of eliminating state income tax liability for individuals who are not dependents of another taxpayer and who do not receive a livable income, which for the purposes of this section means the annual basic needs budget for a single person without dependents, as computed pursuant to annual calculations performed by the joint fiscal office, while increasing or maintaining financial incentives to work and advance by ensuring that after-tax income substantially reflects wage increases.

Sec. 7. 21 V.S.A. § 384(a) is amended to read:

(a) An employer shall not employ an employee *[at a rate less than $5.25 an hour, and after September 30, 1999,]* at a rate less than $5.75 an hour, and after December 31, 2000, at a rate less than $6.25 an hour. If the minimum wage rate established by the United States government is greater than the rate established for Vermont for any year, the minimum wage rate for that year shall be the rate established by the United States government.

Sec. 8. HEALTH CARE COVERAGE; COST REDUCTION DESIGN

The Secretary of Human Services in consultation with the Commissioner of Banking, Insurance, Securities, and Health Care Administration shall recommend in writing to the General Assembly by January 15, 2001, workable designs, including a cost-benefit analysis for each, for health care plan purchasing pools or other benefit plans that could offer lower cost health care coverage in order to help Vermont employers provide affordable health care coverage to their employees. The proposed designs and analyses shall focus particularly on the needs of small businesses, employees of nonprofit organizations and the adjunct faculty of the Vermont State College system.

Sec. 9. WAGE AND BENEFIT INFORMATION

(a) The Commissioner of Employment and Training shall:

(1) Provide to the General Assembly detailed wage and employee benefit information maintained by the department and by the federal Bureau of Labor Statistics.

(2) Report to the General Assembly by January 15, 2001, on the feasibility and cost of collecting and providing annual wage data, broken down into 50-cent increments, and two- or three-digit industry groups, hours worked, gender, occupation, county, benefit coverage for health care, child care, transportation and retirement, to the extent the benefit is paid by the employer.

(3) Request federal agencies to grant increased access to unpublished data sources maintained by the department of employment and training and the federal Bureau of Labor Statistics, such as “ES-202” and “occupational employment survey” data, for specific analytic purposes, such as minimum wage impact analysis.

(4) Consult with the small business advisory commission in order to design and implement a system or method for electronic filing of information required by the department.

(b) The commissioner shall maintain the confidentiality of information referenced by this section using pre-disclosure review and pre-approval of data publication.

Sec. 10. 21 V.S.A. § 1314a(a) is amended to read:

(a) Effective with the calendar quarter ending September 30, 1986 and all subsequent calendar quarters, each employing unit which is an employer as defined in section 1301(5) of this chapter, having individuals in employment as defined in section 1301(6) of this chapter, shall file with the commissioner on forms to be supplied by the commissioner to each such employer a detailed wage report containing each individual worker's name, Social Security number, gross wages paid during each such calendar quarter and any other information the commissioner deems reasonably necessary in the administration of this chapter. Effective with the calendar quarter ending March 31, 2001, and all subsequent calendar quarters, in addition to other information required by this section, the wage reports required by this subsection shall include for each worker paid by the hour, the worker’s gender, the worker’s hourly wage and the average weekly hours worked during the quarter. The wage reports may be filed electronically.

Sec. 11. HEALTH CARE COVERAGE DATA COLLECTION

(a) It is critical that accurate data regarding the amount of money Vermonters pay annually for health care coverage be available in order to design a health care system that can provide quality, affordable health care for all Vermonters. The data regarding the annual expenditures by Vermonters for health care coverage premiums and deductibles must be collected in a manner that assures accuracy.

(b) The secretary of administration shall recommend a simple and efficient process or processes for collecting accurate and relevant health coverage data, not currently available, from the broadest possible population base while assuring the anonymity of the information. The secretary shall design a method to permit electronic filing of the data, and initially determine what relevant health care information is currently collected and available in order to minimize redundant data collection. The health care coverage data collection recommendations shall be presented in writing to the joint health care committee on or before November 1, 2000, for the committee’s consideration and approval.

Sec. 12. [Deleted.]

Sec. 13. UNIFIED BUSINESS APPLICATION FORM; DESIGN

The Secretary of Administration, in consultation with the small business advisory commission, shall:

(1) Design and implement a unified application form that permits a business to submit one simplified application form. The simplified form shall require all information needed for most licenses, permits or other governmental applications and forms. The purpose of the unified form is to reduce paper work and enhance efficiency for both business and government. The Secretary shall consult appropriate business organizations, municipal governments, and governmental subdivisions in this effort. The form shall be completed no later than January 1, 2001, and implemented by March 1, 2001.

(2) Review all license, permit and application fees required of businesses of various types and, no later than January 15, 2001, make recommendations to the General Assembly for specific fee reductions, the amount of reduction possible, the economic impact, and possibilities for consolidating fees and improving administrative efficiency, particularly for businesses with fewer than 20 full-time employees.

Sec. 14. COORDINATION OF ECONOMIC PROGRESS TOWARD A LIVABLE INCOME; SECRETARY OF ADMINISTRATION

The Secretary of Administration or designee shall coordinate and oversee the efforts and completion of activities required in Secs. 7, 9, 10, 13 and 14 of this act.

Sec. 15. SMALL BUSINESS ADVISORY COMMISSION; ESTABLISHED

(a) A small business advisory commission is established to be composed of 13 members, consisting of four officials or their designees: the Secretary of Administration, the Secretary of Commerce and Community Development, the Secretary of Natural Resources, the Commissioner of Taxes; a member of the House appointed by the Speaker; a member of the Senate appointed by the Committee on Committees; and each of the following organizations shall designate one of their members who is a business owner: National Federation of Independent Business, one member each from two local chambers of commerce selected by the state chamber of commerce, Vermont Businesses for Social Responsibility, the Vermont Retail Association and the Board of the Vermont Economic Progress Council. The Vermont Coalition for a Livable Wage shall also appoint a representative to the commission from among its members. The commission shall elect a chair and vice-chair.

(b) The commission shall issue a report to the General Assembly on or before January 15, 2001. The report shall include the following recommendations:

(1) Approaches for establishing a cooperative and constructive relationship between state agencies and the small business community to expand statewide strategies that benefit small business and the Vermont economy in general, and a process by which the small business community can provide more input to the formulation of public policy as it affects its industry sector.

(2) Ways to help small businesses navigate the regulatory process.

(3) Approaches to enable small businesses provide more extensive employee benefits while competing with large multinational corporations that hire part-time employees and provide few if any employee benefits.

(4) Approaches to help small businesses derive greater benefit and participation from programs sponsored by VEPC, VEDA or any other business-related organization that could strengthen small Vermont businesses.

Sec. 16. EFFECTIVE DATES

This act shall take effect on passage, except that Sec. 2 of this act (earned income tax credit) shall apply to tax years beginning on and after January 1, 2000, and Sec. 3 of this act (relating to the tax returns) shall apply to sales made on or after January 1, 2001.

Sec. 17. 32 V.S.A. § 5842(a)(1) is amended to read:

(a) Every person required to deduct and withhold any amount under section 5841 of this title shall make return thereof and shall pay over that amount to the commissioner as follows:

(1) In quarterly payments to be made not later than 25 days following the last day of March, June, September and December of each year, if the person reasonably estimates that the amount to be deducted and withheld during that quarter will not exceed *[$600.00]* $2,500.00; or

Sec. 18. 32 V.S.A. § 9775(a) is amended to read:

(a) Every person required to collect or pay tax under this chapter shall, where the sales and use tax liability under this chapter for the immediately preceding calendar year has been (or would have been in cases when the business was not operating for the entire year) $500.00 or less, pay the tax imposed by this chapter in one annual payment on or before the 25th day of January of each year. Every person required to collect or pay tax under this chapter shall, where the sales and use tax liability under this chapter for the immediately preceding calendar year has been (or would have been in cases when the business was not operating for the entire year) *[$1,000.00 or less]* more than $500.00 but less than $2,500.00, pay the tax imposed by this chapter in quarterly installments on or before the 25th day of the calendar month succeeding the quarter ending on the last day of March, June, September and December of each year. In all other cases, the tax imposed by this chapter shall be due and payable monthly on or before the 25th (23rd of February) day of the month following the month for which the tax is due. Payment by electronic funds transfer does not affect the requirement to file returns. The return of a vendor of tangible personal property shall show his receipts from sales and also the aggregate value of tangible personal property sold by him, the use of which is subject to tax under this chapter. The return of a recipient of amusement charges shall show all those charges and the amount of tax thereon. The return of a telecommunications service provider shall show all receipts on which a tax must be paid by a purchaser and the amount of tax thereon.

Sec. 19. 21 V.S.A. § 342a is amended to read:

§ 342a. INVESTIGATION OF COMPLAINTS OF UNPAID WAGES

(a) Upon complaint to the department of labor and industry by an employee that wages have not been paid to *[him-by-an]* the employee by the employer, the commissioner of labor and industry or *[his]* the commissioner’s agent shall investigate the complaint, examine the employer’s records, attempt to arrange a settlement between the employer and the employee and, if the attempt fails, shall *[deliver the appropriate state’s attorney for his action]*, upon a finding based on clear and convincing evidence that unpaid wages are owed to the employee by the employer, collect from the employer the amounts due and remit them to the employee.

(b) If the commissioner finds that the unpaid wages were willfully withheld by the employer, the commissioner may collect from the employer an additional amount not to exceed twice the amount of the unpaid wages, one-half of which will be remitted to the employee and one-half of which shall be retained by the commissioner to offset estimated administrative and collection costs.

(c) The commissioner shall enforce an order for collection under this section in superior court. The commissioner may authorize *[his]* an agent to administer oaths and to compel testimony for the purposes of this section.

Sec. 20. REPEAL

21 V.S.A. § 342b (employees covered) is repealed.

Approved: May 18, 2000