NO. 63. AN ACT MAKING APPROPRIATIONS FOR THE SUPPORT OF GOVERNMENT.

(H.485)

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

Sec. 1. SHORT TITLE

   (a) This bill may be referred to as the BIG BILL - Fiscal Year 2002 Appropriations Act.

Sec. 2. PURPOSE

   (a) The purpose of this act is to provide appropriations for the operations of state government during fiscal year 2002. It is the express intent of the legislature that activities of the various agencies, departments, divisions, boards, and commissions be limited to those which can be supported by funds appropriated in this act or other acts passed prior to June 30, 2001. Agency and department heads are directed to implement staffing and service levels at the beginning of fiscal year 2002 so as to meet this condition unless otherwise directed by specific language in this act.

Sec. 3. APPROPRIATIONS

   (a) The sums herein stated are appropriated for the purposes specified in the following sections of this act. When no time is expressly stated during which any of the appropriations are to continue, the appropriations are declared to be single-year appropriations, and only for the purpose indicated. These appropriations shall be the only appropriations available, notwithstanding any other acts or laws. If in this act there is an error in either addition or subtraction, the totals shall be adjusted accordingly. Apparent errors in referring to section numbers of statutory titles within this act may be disregarded by the commissioner of finance and management.

Sec. 4. TIME AVAILABLE

   (a) The sums appropriated in this act, unless otherwise designated, shall be available only during the fiscal year ending June 30, 2002. The balance of any appropriations made in this act remaining unexpended and unencumbered at the end of the fiscal year shall revert to the appropriate fund balance unless otherwise specified in this act. Refunds of expenditures and reimbursements, except liability insurance premiums, which have been paid from the appropriations of a prior year, shall be credited to the appropriate fund and not to appropriation accounts in the current fiscal year, unless those refunds or reimbursements were previously paid from federal grants-in-aid or from appropriations whose unexpended balances are reappropriated by law. Refunds of liability insurance premiums paid in prior fiscal years are hereby available to reduce subsequent liability insurance premiums. Nothing contained in this act shall limit the time within which an appropriation to be raised by the issue of bonds may be expended.

Sec. 5. DEFINITIONS

   (a) For the purposes of this act:

(1) “Personal services” means wages and salaries, consulting services, personnel benefits, personal injury benefits under section 636 of Title 21 and similar items.

(2) “Operating expenses” means supplies - food, medical, clothing, educational, fuel, highway materials and similar items; contractual services - postage, telephone, travel expenses, light, heat and power, rentals, insurance and other similar items; equipment articles of substantial value which have a long period of usefulness - desks, computers, typewriters, furniture, motor vehicles and similar items.

(3) “Land, structures & improvements” means expenditures for the purchase of land, construction of new buildings and permanent improvements, highway construction and similar items.

(4) “Grants” means subsidies, aid or payments to local governments, to community and quasi-public agencies for providing local services, and to persons who are not wards of the state for services or supplies, and cash or other direct assistance, including pension contributions.

(5) “Encumbrances” means a portion of an appropriation reserved for the subsequent payment of existing purchase orders or contracts. The commissioner of finance and management shall make final decisions on the appropriateness of encumbrances.

Sec. 5a. FISCAL YEAR 2003 BUDGET PRESENTATION

   (a) By January 15, 2002, the secretary of administration shall ensure that each agency, department, division or office includes supplemental information so the following items are included with any budget documents submitted to support fiscal year 2003 appropriation requests.

(1) Detailed description of any consulting service expenses contained in any budget documents submitted for fiscal year 2003. Such detail should include fiscal year 2003 estimated cost, type of service, contractor name, start date, and end date.

(2) Detailed description of any grants included in form 14 or elsewhere that are estimated to be available to local, regional or statewide organizations. Such detail shall include fiscal year 2003 estimated grant amount, source of funds, grantee name and grantee location.

(3) Detailed description of any grants included in form 11 of budget documents or elsewhere that are estimated to be available to departments to support the budget in fiscal year 2003. Such detail shall include fiscal year 2003 grant amount, source of grant funds, a brief description of purpose and the time period for which the grant is available.

Sec. 6. SOURCE OF FUNDS

   (a) The appropriations made in this act are made for the fiscal year ending June 30, 2002, except as provided in this act, and are to be paid from funds shown as the source of funds.

Sec. 7. Secretary of administration - secretary’s office

		Personal services		729,637
		Operating expenses		59,136
			Total	788,773
	Source of funds
		General fund		403,886
		Transportation fund		61,034
		Federal funds		84,469
		Interdepartmental transfer		239,384
			Total	788,773

   (a) The establishment of one (1) new classified position - Webmaster - is authorized in fiscal year 2002.

Sec. 8. Secretary of administration - GOVNet

		Personal services		442,819
		Operating expenses		1,247,181
			Total	1,690,000
	Source of funds
		Internal service funds		1,690,000

Sec. 9. Finance and management - budget and management

		Personal services		701,198
		Operating expenses		57,275
			Total	758,473
	Source of funds
		General fund		618,663
		Transportation fund		129,810
		Interdepartmental transfer		10,000
			Total	758,473

Sec. 10. Finance and management - financial operations

		Personal services		1,102,408
		Operating expenses		93,535
			Total	1,195,943
	Source of funds
		General fund		716,440
		Transportation fund		350,080
		Federal funds		5,000
		Special funds		124,423
			Total	1,195,943

   (a) The establishment of one (1) new classified position - Information Technology Specialist II - is authorized in fiscal year 2002.

Sec. 11. Personnel - operations

		Personal services		2,329,784
		Operating expenses		632,906
			Total	2,962,690
	Source of funds
		General fund		1,971,434
		Transportation fund		636,891
		Special funds		223,000
		Internal service funds		75,000
		Interdepartmental transfer		56,365
			Total	2,962,690

   (a) The establishment of one (1) new classified position - Paralegal Technician II - is authorized in fiscal year 2002.

Sec. 12. Personnel - employee benefits

		Personal services		786,045
		Operating expenses		259,330
			Total	1,045,375
	Source of funds
		Internal service funds		1,045,375

Sec. 13. Buildings and general services - administrative

		Personal services		884,248
		Operating expenses		134,103
			Total	1,018,351
	Source of funds
		General fund		454,101
		Transportation fund		65,203
		Interdepartmental transfer		499,047
			Total	1,018,351

Sec. 13a. PILOT FUNDING REQUIREMENT STUDY

(a) As part of the implementation of the fee for space program under Sec. 269 of Act 152 of the Acts of 2000, the secretary of administration and the commissioner of general services shall study the potential and develop a proposal, for consideration as part of the fiscal year 2003 budget for charges to agencies to reflect full PILOT obligations under section 3703 of Title 32. Specifically, the study shall consider a requirement that, over a four-year implementation period, payment in lieu of taxes under section 3703 of Title 32, which is allocable to the portion of state-owned property used by agencies and departments, shall be billed as space costs within agency budgets. The study shall have as a goal full recognition of PILOT costs in agency budgets by fiscal year 2007. A progress report on this study shall be presented to the joint fiscal committee at its September meeting.

Sec. 13b. SPECIAL COMMITTEE ON VERMONT DEPARTMENT OF BUILDINGS AND GENERAL SERVICES

(a) A special legislative committee on buildings and general services management operations is hereby established. Said committee shall consist of five members, one member each from the senate and house committees on appropriations and institutions, and the secretary of administration or her designee. The house members shall be appointed by the speaker of the house, and the senate members by the committee on committees. The committee shall remain in existence until January 1, 2002. The committee shall meet no more than four times to:

(1) Conduct a review of the department of buildings and general services management operations; including sources of funding, utilization of budgeted funds, bill payment practices;

(2) Assess the efficiency in building management and resource utilization as well as the process for assessing values of buildings that the state intends to purchase and the valuation for state-owned property;

(3) Develop standardized performance benchmarks.

(b) The staff of the joint fiscal committee, the legislative council, the commissioner of buildings and general services and the commissioner of finance and management shall provide assistance to the committee.

Sec. 14. Buildings and general services - facilities operations

		Personal services		5,799,014
		Operating expenses		6,566,915
			Total	12,365,929
	Source of funds
		General fund		10,260,631
		Transportation fund		1,805,298
		Interdepartmental transfer		300,000
			Total	12,365,929

   (a) The following positions are authorized to replace ongoing contractual services. The establishment of twenty-nine (29) new classified positions - Building Custodian A - is authorized in fiscal year 2002.

Sec. 15. Buildings and general services - engineering

		Personal services		1,433,994
		Operating expenses		189,741
			Total	1,623,735
	Source of funds
		General fund		1,464,859
		Transportation fund		93,876
		Interdepartmental transfer		65,000
			Total	1,623,735

Sec. 16. Buildings and general services - property management

		Personal services		683,901
		Operating expenses		3,179,090
			Total	3,862,991
	Source of funds
		Internal service funds		3,862,991

Sec. 17. Buildings and general services - postal

		Personal services		541,531
		Operating expenses		375,203
			Total	916,734
	Source of funds
		General fund		108,082
		Transportation fund		65,291
		Internal service funds		743,361
			Total	916,734

Sec. 18. Buildings and general services - supply center

		Personal services		222,497
		Operating expenses		263,751
			Total	486,248
	Source of funds
		Internal service funds		486,248

Sec. 19. Buildings and general services - copy center

		Personal services		605,964
		Operating expenses		868,261
			Total	1,474,225
	Source of funds
		Internal service funds		1,474,225

Sec. 20. Buildings and general services - purchasing

		Personal services		665,877
		Operating expenses		134,416
			Total	800,293
	Source of funds
		General fund		540,229
		Transportation fund		260,064
			Total	800,293

Sec. 21. Buildings and general services - public records

		Personal services		672,259
		Operating expenses		202,969
			Total	875,228
	Source of funds
		General fund		617,026
		Transportation fund		87,992
		Special funds		170,210
			Total	875,228

Sec. 22. Buildings and general services - communications & information technology

		Personal services		2,563,658
		Operating expenses		3,241,746
			Total	5,805,404
	Source of funds
		Internal service funds		5,805,404

Sec. 23. Buildings and general services - state surplus property

		Personal services		42,351
		Operating expenses		38,957
			Total	81,308
	Source of funds
		Internal service funds		81,308

Sec. 24. Buildings and general services - federal surplus property

		Personal services		39,485
		Operating expenses		88,951
			Total	128,436
	Source of funds
		Enterprise funds		128,436

Sec. 25. Buildings and general services - workers’ compensation insurance

		Personal services		685,949
		Operating expenses		259,817
			Total	945,766
	Source of funds
		Internal service funds		945,766

Sec. 26. Buildings and general services - general liability insurance

		Personal services		295,114
		Operating expenses		466,003
			Total	761,117
	Source of funds
		Internal service funds		761,117

Sec. 27. Buildings and general services - all other insurance

		Personal services		28,880
		Operating expenses		21,048
			Total	49,928
	Source of funds
		Internal service funds		49,928

Sec. 28. Buildings and general services - information centers

		Personal services		2,562,603
		Operating expenses		672,997
		Grants		255,000
			Total	3,490,600
	Source of funds
		General fund		94,138
		Transportation fund		3,332,724
		Special funds		63,738
			Total	3,490,600

Sec. 29. Tax - administration/collection

		Personal services		9,299,907
		Operating expenses		2,331,700
			Total	11,631,607
	Source of funds
		General fund		10,852,482
		Transportation fund		258,427
		Special funds		347,698
		Tobacco funds		58,000
		Interdepartmental transfer		115,000
			Total	11,631,607

(a) The establishment of one (1) new classified position – Examiner III – is authorized in fiscal year 2002.

Sec. 30. Libraries

		Personal services		1,718,485
		Operating expenses		1,127,342
		Grants		446,503
			Total	3,292,330
	Source of funds
		General fund		2,022,117
		Federal funds		1,082,913
		Special funds		51,300
		Interdepartmental transfer		136,000
			Total	3,292,330

Sec. 31. Geographic information system

		Grants		376,992
	Source of funds
		Special funds		376,992

Sec. 32. Auditor of accounts

		Personal services		1,396,008
		Operating expenses		115,252
			Total	1,511,260
	Source of funds
		General fund		458,905
		Transportation fund		69,490
		Special funds		50,525
		Internal service fund		932,340
			Total	1,511,260

Sec. 33. State treasurer

		Personal services		2,043,046
		Operating expenses		334,276
			Total	2,377,322
	Source of funds
		General fund		520,989
		Transportation fund		121,214
		Special funds		1,103,769
		Expendable trust		631,350
			Total	2,377,322

   (a) The establishment of one (1) new classified position - Program Services Clerk - is authorized in fiscal year 2002.

Sec. 34. Vermont state retirement system

		Personal services		14,198,400
		Operating expenses		129,115
			Total	14,327,515
	Source of funds
		Special funds		14,327,515

Sec. 35. Municipal employees’ retirement system

		Personal services		956,000
		Operating expenses		43,848
			Total	999,848
	Source of funds
		Special funds		999,848

Sec. 36. State labor relations board

		Personal services		152,911
		Operating expenses		23,540
			Total	176,451
	Source of funds
		General fund		165,531
		Transportation fund		5,412
		Special funds		5,508
			Total	176,451

Sec. 37. Executive office

		Personal services		1,032,240
		Operating expenses		225,987
		Grants		51,978
		Unrestricted fund		13,000
			Total	1,323,205
	Source of funds
		General fund		1,027,311
		Transportation fund		183,709
		Special funds		3,185
		Interdepartmental transfer		109,000
			Total	1,323,205

Sec. 38. Executive office - national and community service

		Personal services		172,171
		Operating expenses		95,855
		Grants		1,523,643
			Total	1,791,669
	Source of funds
		General fund		61,403
		Federal funds		1,730,266
			Total	1,791,669

Sec. 39. VOSHA review board

		Personal services		28,403
		Operating expenses		4,020
			Total	32,423
	Source of funds
		General fund		15,000
		Federal funds		17,423
			Total	32,423

Sec. 40. Use tax reimbursement fund - municipal current use

		Grants		4,750,000
	Source of funds
		General fund		2,311,600
		Transportation fund		2,438,400
			Total	4,750,000

   (a) Notwithstanding section 3760 of Title 32, for fiscal year 2002 only, the current use reimbursement paid by the state to a municipality affected by Secs. 106e and 106f of Act 1 of 1999 for any parcel which was part of land in excess of 100,000 acres listed to a single owner on the 1998 statewide equalized education property tax grand list shall be calculated based upon the parcel’s 2001 tax year current use enrollment status.

(b) Notwithstanding any other provision of law, the balance of the appropriation made in Sec. 263b(d) of Act 62 of 1999 to the agency of natural resources for the proration of property taxes on the so-called “Champion Land” shall be available for transfer to the use tax reimbursement fund for payment in accordance with subsection (a) of this section in fiscal year 2002.

Sec. 40a. STUDY ON LAND USE IMPLICATIONS OF TAX POLICY

CHANGES

(a) The legislative council shall procure and manage consultant services to address and report back to the general assembly by January 15, 2002, with findings and recommendations with respect to the land use impacts that would occur from:

(1) Revisions to the current use program:

(A) to provide that the land use change tax be assessed with regard to the length of time the property has been enrolled in the program;

(B) to change the amount of the land use change tax;

(C) to eliminate the school tax on current use land or farm buildings.

(2) Expanding the size of the homestead in Act 60.

(b) The study shall examine the land use and public benefits implications of these tax policies, their equity and efficiency, whether they are consistent with each other, and the extent to which they are consistent with the goals of supporting productive use of farm and forest lands.

Sec. 41. Lieutenant governor

		Personal services		101,794
		Operating expenses		9,650
			Total	111,444
	Source of funds
		General fund		89,400
		Transportation fund		22,044
			Total	111,444

Sec. 42. Legislature

		Personal services		2,605,030
		Operating expenses		1,869,900
			Total	4,474,930
	Source of funds
		General fund		3,617,993
		Transportation fund		856,937
			Total	4,474,930

Sec. 43. Legislative council

		Personal services		1,635,449
		Operating expenses		18,842
			Total	1,654,291
	Source of funds
		General fund		1,384,238
		Transportation fund		270,053
			Total	1,654,291

Sec. 44. Sergeant at arms

		Personal services		271,778
		Operating expenses		48,000
			Total	319,778
	Source of funds
		General fund		271,935
		Transportation fund		47,843
			Total	319,778

   (a) The establishment of one (1) new exempt position - Capitol Security Officer - is authorized in fiscal year 2002.

Sec. 45. Joint fiscal committee

		Personal services		757,503
		Operating expenses		35,783
			Total	793,286
	Source of funds
		General fund		634,915
		Transportation fund		158,371
			Total	793,286

Sec. 46. Lottery commission

		Personal services		1,008,812
		Operating expenses		734,900
			Total	1,743,712
	Source of funds
		Enterprise funds		1,743,712

Sec. 47. Payments in lieu of taxes

		Grants		1,850,000
	Source of funds
		General fund		1,450,000
		Special funds		400,000
			Total	1,850,000

   (a) The above appropriation is for state payments in lieu of property taxes under subchapter 4 of chapter 123 of Title 32 and said payments shall be calculated in addition to, and without regard to, the appropriations in Secs. 48 and 49 of this act.

   (b) Of the above general fund appropriation, $1,200,000.00 shall be considered a one-time appropriation.

Sec. 48. Payments in lieu of taxes - Montpelier

		Grants		184,000
	Source of funds
		General fund		184,000

Sec. 49. Payments in lieu of taxes - correctional facilities

		Grants		40,000
	Source of funds
		General fund		40,000

Sec. 50. Total general government				95,689,610
	Source of funds
		General fund		41,157,308
		Transportation fund		11,320,163
		Federal funds		2,920,071
		Special funds		18,247,711
		Enterprise funds		1,851,148
		Expendable trust		631,350
		Internal service funds		17,953,063
		Tobacco funds		58,000
		Interdepartmental transfer		1,529,796
			Total	95,689,610

Sec. 51. Protection to persons and property - Attorney general

		Personal services		4,265,712
		Operating expenses		612,492
			Total	4,878,204
	Source of funds
		General fund		2,171,788
		Transportation fund		81,696
		Federal funds		460,000
		Special funds		902,978
		Tobacco funds		290,000
		Interdepartmental transfer		971,742
			Total	4,878,204

   (a) The following position is authorized to replace ongoing temporary services. The establishment of one (1) new classified position - Administrative Secretary - is authorized in fiscal year 2002.

   (b) The establishment of one (1) new exempt position - Assistant Attorney General - is authorized in fiscal year 2002.

Sec. 52. Vermont court diversion

		Grants		1,063,335
	Source of funds
		General fund		615,531
		Transportation fund		177,804
		Special funds		270,000
			Total	1,063,335

Sec. 53. Center for crime victims services

		Personal services		545,000
		Operating expenses		205,000
		Grants		4,670,294
			Total	5,420,294
	Source of funds
		General fund		753,379
		Federal funds		3,568,125
		Special funds		1,098,790
			Total	5,420,294

Sec. 54. State’s attorneys

		Personal services		6,657,340
		Operating expenses		863,583
		Grants		120,000
			Total	7,640,923
	Source of funds
		General fund		5,381,074
		Transportation fund		436,856
		Federal funds		288,385
		Special funds		107,071
		Interdepartmental transfer		1,427,537
			Total	7,640,923

   (a) Of the above appropriation, $30,000.00 shall be used to support a half-time temporary Deputy State’s Attorney position in Orleans County.

Sec. 55. Sheriffs

		Personal services		2,137,669
		Operating expenses		243,947
			Total	2,381,616
	Source of funds
		General fund		1,713,195
		Transportation fund		668,421
			Total	2,381,616

   (a) Of the above appropriation, $15,000.00 shall be transferred to the state’s attorneys office as reimbursement for the cost of the executive director’s salary.

Sec. 56. Defender general - public defense

		Personal services		4,761,822
		Operating expenses		440,724
			Total	5,202,546
	Source of funds
		General fund		4,200,764
		Transportation fund		623,234
		Federal funds		40,500
		Special funds		338,048
			Total	5,202,546

Sec. 57. Defender general - assigned counsel

		Personal services		2,241,438
		Operating expenses		34,505
			Total	2,275,943
	Source of funds
		General fund		2,015,937
		Transportation fund		260,006
			Total	2,275,943

   (a) The establishment of six (6) new exempt limited service positions – three (3) Assigned Counsel Serious Felony Defender and three (3) Assigned Counsel Serious Crime Defender Assistant – is authorized in fiscal year 2002.

Sec. 58. Military - administrative

		Personal services		369,212
		Operating expenses		227,101
		Grants		200,000
			Total	796,313
	Source of funds
		General fund		796,313

   (a) Of the above appropriation, $200,000.00 shall be transferred to the Vermont student assistance corporation for the national guard scholarship program.

   (b) Total grants under 16 V.S.A. chapter 87, subchapter 4A shall not exceed $200,000.00 in fiscal year 2002, nor shall commitments or obligations be made for expenditure amounts above $200,000.00 in fiscal year 2003.

   (c) The Youth Challenge Academy Program shall not be started without legislative approval.

Sec. 59. Military - veterans’ affairs

		Personal services		108,322
		Operating expenses		21,265
		Grants		78,350
			Total	207,937
	Source of funds
		General fund		207,937

Sec. 60. Military - army service contract

		Personal services		1,551,426
		Operating expenses		2,162,200
			Total	3,713,626
	Source of funds
		General fund		129,827
		Federal funds		3,583,799
			Total	3,713,626

Sec. 61. Military - air service contract

		Personal services		2,791,776
		Operating expenses		706,473
			Total	3,498,249
	Source of funds
		General fund		300,480
		Federal funds		3,197,769
			Total	3,498,249

Sec. 62. Military - building maintenance

		Personal services		817,685
		Operating expenses		412,953
			Total	1,230,638
	Source of funds
		General fund		1,195,638
		Special funds		35,000
			Total	1,230,638

Sec. 63. Labor and industry

		Personal services		4,181,059
		Operating expenses		1,053,900
		Grants		26,850
			Total	5,261,809
	Source of funds
		General fund		791,503
		Federal funds		525,109
		Special funds		3,895,197
		Interdepartmental transfer		50,000
			Total	5,261,809

   (a) The establishment of one (1) new classified position - Administrative Assistant A - is authorized in fiscal year 2002.

Sec. 64. Criminal justice training council

		Personal services		757,000
		Operating expenses		305,411
			Total	1,062,411
	Source of funds
		General fund		150,255
		Transportation fund		346,281
		Special funds		444,675
		Interdepartmental transfer		121,200
			Total	1,062,411

Sec. 65. Liquor control - enforcement and licensing

		Personal services		1,346,283
		Operating expenses		302,475
			Total	1,648,758
	Source of funds
		Tobacco funds		309,000
		Enterprise funds		1,339,758
			Total	1,648,758

Sec. 65a. 7 V.S.A. § 658(c) is amended to read:

(c) A person who violates subsection (a) of this section shall be fined not less than $500.00 nor more than $2,000.00 or imprisoned not more than two years, or both. However, an employee of a *[second class]* licensee or an employee of a state-contracted liquor agency, who in the course of employment violates subdivision (a)(1) of this section:

(1) during a compliance check conducted by a law enforcement officer as defined in 20 V.S.A. § 2358: *[(1)]*(A) shall be assessed a civil penalty of not more than $100.00 for the first violation, and a civil penalty of not less than $100.00 nor more than $500.00 for a second violation that occurs more than one year after the first violation. *[(2)]*(B) shall be subject to the criminal penalties provided in this subsection for a second violation within a year of the first violation, and for a third or subsequent violation within three years of the first violation. *[(3)]*(2) may plead as an affirmative defense that:

(A) the purchaser exhibited and the employee carefully viewed photographic identification that complied with section 602 of this title and indicated the purchaser to be 21 or older; and

(B) an ordinary prudent person would believe the purchaser to be of legal age to make the purchase; and

(C) the sale was made in good faith, based upon the reasonable belief that the purchaser was of legal age to purchase alcoholic beverages.

Sec. 66. Liquor control - administration

		Personal services		1,548,720
		Operating expenses		709,536
			Total	2,258,256
	Source of funds
		Enterprise funds		2,258,256

Sec. 67. Vermont racing commission

		Personal services		2,500
		Operating expenses		4,500
			Total	7,000
	Source of funds
		General fund		7,000

Sec. 68. Secretary of state

		Personal services		2,396,258
		Operating expenses		788,650
		Grants		106,037
			Total	3,290,945
	Source of funds
		General fund		504,676
		Federal funds		38,037
		Special funds		2,680,232
		Interdepartmental transfer		68,000
			Total	3,290,945

   (a) The establishment of one (1) new classified position - Account Clerk - is authorized in fiscal year 2002.

Sec. 69. Medical practice board

		Personal services		506,578
		Operating expenses		116,195
			Total	622,773
	Source of funds
		Special funds		622,773

   (a) The following position is authorized to replace ongoing contractual services. The establishment of one (1) new classified position - Medical Licensing Board Field Investigator - is authorized in fiscal year 2002.

Sec. 70. Banking, insurance, securities, and health care administration - administration

		Personal services		642,471
		Operating expenses		35,000
			Total	677,471
	Source of funds
		Special funds		677,471

   (a) The commissioner of the department of banking, insurance, securities, and health care administration shall submit reports in September 2001, and March 2002, to the secretary of administration and the joint fiscal committee on employee out-of-state travel. This report shall contain trips taken, purposes, costs incurred and source of funding.

Sec. 71. Banking, insurance, securities, and health care administration - banking

		Personal services		1,002,301
		Operating expenses		328,612
			Total	1,330,913
	Source of funds
		Special funds		1,330,913

   (a) Notwithstanding 9 V.S.A. § 4230(b), in fiscal year 2002, the commissioner of banking, insurance, securities, and health care administration may transfer up to $200,000.00 from the securities regulation and supervision fund to the financial institutions supervision fund established in 8 V.S.A. § 504(d).

Sec. 72. Banking, insurance, securities, and health care administration - insurance

		Personal services		2,833,223
		Operating expenses		561,242
			Total	3,394,465
	Source of funds
		Special funds		3,394,465

Sec. 73. Banking, insurance, securities, and health care administration - securities

		Personal services		462,753
		Operating expenses		133,150
			Total	595,903
	Source of funds
		Special funds		595,903

Sec. 74. Banking, insurance, securities, and health care administration - captive

		Personal services		1,354,401
		Operating expenses		274,814
			Total	1,629,215
	Source of funds
		Special funds		1,629,215

   (a) The establishment of two (2) new classified positions - one (1) Insurance Examiner II/III and one (1) Insurance Examiner-In-Charge - is authorized in fiscal year 2002.

Sec. 75. Banking, insurance, securities, and health care administration - health care administration

		Personal services		2,338,328
		Operating expenses		385,249
			Total	2,723,577
	Source of funds
		General fund		562,148
		Special funds		2,161,429
			Total	2,723,577

Sec. 76. Public safety - state police

		Personal services		28,635,894
		Operating expenses		5,239,163
		Grants		1,881,030
			Total	35,756,087
	Source of funds
		General fund		7,576,187
		Transportation fund		20,225,592
		Federal funds		3,449,666
		Special funds		2,697,252
		Interdepartmental transfer		1,807,390
			Total	35,756,087

   (a) The department of public safety shall provide business manager services for the Vermont criminal justice training council and for the Vermont fire service training council.

   (b) Of the above appropriation, $35,000.00 shall be available for statewide snowmobile law enforcement activities and $35,000.00 shall be available to the Southern Vermont wilderness search and rescue team, which is comprised of state police, department of fish and wildlife, county sheriffs and local law enforcement personnel in Bennington, Windham and Windsor counties, for snowmobile enforcement.

   (c) The establishment of one (1) new classified position - Accountant B - is authorized in fiscal year 2002.

Sec. 77. Public safety - criminal justice services

		Personal services		4,816,550
		Operating expenses		3,202,600
		Grants		4,559,466
			Total	12,578,616
	Source of funds
		General fund		135,000
		Transportation fund		3,659,682
		Federal funds		7,243,792
		Special funds		966,898
		Interdepartmental transfer		573,244
			Total	12,578,616

   (a) The Vermont center for justice research is designated as the state’s instrumentality to receive statistical analysis center federal funds.

   (b) The establishment of one (1) new classified position - Information Technology Specialist II - is authorized in fiscal year 2002.

Sec. 78. Public safety - emergency management

		Personal services		910,068
		Operating expenses		682,360
		Grants		1,249,247
			Total	2,841,675
	Source of funds
		General fund		93,930
		Transportation fund		63,969
		Federal funds		2,328,044
		Special funds		355,732
			Total	2,841,675

Sec. 79. Agriculture, food and markets - administration

		Personal services		610,945
		Operating expenses		98,450
		Grants		609,871
			Total	1,319,266
	Source of funds
		General fund		877,830
		Federal funds		250,000
		Special funds		67,365
		Interdepartmental transfer		124,071
			Total	1,319,266

   (a) Of the above appropriation, $100,000.00 shall be transferred to the State’s Ratification Committee for the purpose of supporting reauthorization efforts of the New England Dairy Compact.

Sec. 80. Agriculture, food and markets - agriculture development

		Personal services		638,761
		Operating expenses		261,469
		Grants		155,842
			Total	1,056,072
	Source of funds
		General fund		623,487
		Special funds		332,585
		Interdepartmental transfer		100,000
			Total	1,056,072

Sec. 81. Agriculture, food and markets - animal and dairy

		Personal services		1,368,070
		Operating expenses		248,238
		Grants		1,492
			Total	1,617,800
	Source of funds
		General fund		1,035,872
		Federal funds		499,128
		Special funds		66,200
		Interdepartmental transfer		16,600
			Total	1,617,800

Sec. 82. [Omitted.]

Sec. 83. Agriculture, food and markets - plant industry, labs and consumer assurance

		Personal services		2,400,199
		Operating expenses		440,403
			Total	2,840,602
	Source of funds
		General fund		983,875
		Transportation fund		45,013
		Federal funds		319,633
		Special funds		1,302,215
		Interdepartmental transfer		189,866
			Total	2,840,602

   (a) The establishment of two (2) new classified positions - one (1) Conservation Reserve Enhancement Program Coordinator and one (1) Plant Industry Agent - is authorized in fiscal year 2002.

Sec. 84. Agriculture, food and markets - state stipend

		Grants		175,000
	Source of funds
		General fund		175,000

Sec. 85. Agriculture, food and markets - mosquito control

		Grants		90,000
	Source of funds
		Special funds		90,000

Sec. 86. Public service - regulation and energy

		Personal services		4,221,216
		Operating expenses		700,626
		Grants		565,000
			Total	5,486,842
	Source of funds
		Federal funds		1,230,500
		Special funds		4,231,342
		Interdepartmental transfer		25,000
			Total	5,486,842

   (a) The establishment of one (1) new classified position - Economics and Policy Analyst - is authorized in fiscal year 2002.

Sec. 87. Public service - purchase and sale of power

		Personal services		7,824
		Operating expenses		365
			Total	8,189
	Source of funds
		Special funds		8,189

Sec. 88. Enhanced 9-1-1 Board

		Personal services		2,103,853
		Operating expenses		254,633
			Total	2,358,486
	Source of funds
		Special funds		2,358,486

Sec. 89. Public service board

		Personal services		2,158,763
		Operating expenses		290,000
			Total	2,448,763
	Source of funds
		Special funds		2,448,763

Sec. 90. Judiciary

		Personal services		20,366,895
		Operating expenses		3,011,000
			Total	23,377,895
	Source of funds
		General fund		17,290,775
		Transportation fund		3,565,620
		Special funds		420,000
		Federal funds		147,000
		Interdepartmental transfer		1,954,500
			Total	23,377,895

(a) The establishment of two new exempt limited service positions - one (1) Coordinator of Family Court Mediation Program and one (1) Guardian Ad Litem Coordinator - is authorized in fiscal year 2002.

(b) The establishment of two (2) new exempt positions - one (1) Clerk to the Board of Bar Examiners and one (1) Paralegal - is authorized in fiscal year 2002.

(c) The establishment of one (1) new exempt position - Trial Court Law Clerk - is authorized in fiscal year 2002.

(d) The establishment of two (2) new exempt positions - Security Officer - is authorized in fiscal year 2002.

(e) The establishment of one (1) new exempt position - Clerk - is authorized in fiscal year 2002.

(f) The establishment of two new exempt positions - one (1) Director of Family Court Services and one (1) Docket Clerk - is authorized in fiscal year 2002.

(g) There is established the Attorneys’ Admission, Licensing and Professional Responsibility Fund which shall be managed in accordance with Title 32, chapter 7, subchapter 5 of the Vermont Statutes Annotated. Fees collected for licensing of attorneys, administration of the bar exam, admitting attorneys to practice in Vermont, and administration of mandatory continuing legal education shall be deposited in and credited to this fund. This fund shall be available to the judicial branch to offset the cost of operating the professional responsibility board, the board of bar examiners, the judicial conduct board, the committee on character and fitness, and the mandatory continuing legal education program for attorneys.

Sec. 91. 4 V.S.A. § 71(a) is amended to read:

   (a) There shall be *[14]* 15 superior judges, whose terms of office shall, except in the case of an appointment to fill a vacancy or unexpired term, begin on April 1 in the year of their appointment or retention, and continue for six years.

Sec. 92. Human rights commission

		Personal services		286,104
		Operating expenses		74,125
			Total	360,229
	Source of funds
		General fund		254,928
		Federal funds		105,300
		Special funds		1
			Total	360,229

Sec. 93. Vermont radiological emergency response plan fund

		Personal services		200,000
		Operating expenses		200,000
			Total	400,000
	Source of funds
		Special funds		400,000

Sec. 94. Vermont fire service training council

		Personal services		631,557
		Operating expenses		206,747
			Total	838,304
	Source of funds
		General fund		140,312
		Transportation fund		98,994
		Federal funds		105,000
		Special funds		363,160
		Interdepartmental transfer		130,838
			Total	838,304

Sec. 95. Total protection to persons and property				156,366,946
	Source of funds
		General fund		50,684,641
		Transportation fund		30,253,168
		Federal funds		27,379,787
		Special funds		36,292,348
		Tobacco funds		599,000
		Enterprise funds		3,598,014
		Interdepartmental transfer		7,559,988
			Total	156,366,946

Sec. 96. Human services - agency of human services - central office

		Personal services		3,519,193
		Operating expenses		946,481
		Grants		6,617,602
			Total	11,083,276
	Source of funds
		General fund		3,963,424
		Federal funds		6,448,852
		Special funds		100,000
		Tobacco funds		125,000
		Interdepartmental transfer		446,000
			Total	11,083,276

   (a) Notwithstanding any other provisions of law, workers employed by persons who receive assistance from the agency of human services to procure attendant, personal care, or respite services or who utilize a qualified intermediary service organization providing services on behalf of the state shall not be considered state employees except for purposes of 21 V.S.A. chapter 17.

   (b) Notwithstanding any other provisions of law, the state may provide workers’ compensation coverage to workers employed by persons who receive assistance from the agency of human services to procure attendant, personal care, or respite services, and the state shall not be considered their employer. The state may also either permit a qualified intermediary service organization to purchase group insurance policies for persons served by their organization, or deem such persons to be members of an association and eligible for self-insurance under 21 V.S.A. § 687a for purposes of providing workers’ compensation. This provision is intended solely to reduce costs of providing workers’ compensation and shall not be considered for any other purpose.

(c) The secretary shall have direct oversight of all agreements or memoranda of understanding between the agency or any of its component departments and another component of state government. The secretary shall review all proposals by the agency or its component departments to modify, terminate or withdraw from such cooperative agreements or memoranda of understanding to assess whether the proposed change will have an adverse effect on other components of state government or upon the programs or activities which are the subject of the agreement or memoranda.

Sec. 97. 3 V.S.A. § 3026 is added to read:

§ 3026. PARTNERSHIPS FOR CHILDREN, FAMILIES AND INDIVIDUALS

(a) The secretary of human services, the commissioner of education, and the president of the University of Vermont shall establish a research partnership to study and make recommendations for improving the effectiveness of state and local health, human services, and education programs. Critical program outcomes relating to the well-being of Vermonters that should be addressed by the research partnership may include, without limitation, the following:

(1) Children, families and individuals are engaged in and contribute to their community’s decisions and activities.

(2) Pregnant woman and children thrive.

(3) Children are ready for school.

(4) Children succeed in school.

(5) Children live in stable, supported families.

(6) Youth choose healthy behaviors.

(7) Youth successfully transition to adulthood.

(8) Elders and people with disabilities live with dignity and independence in settings they prefer.

(9) Families and individuals live in safe and supportive communities.

(b) The secretary of human services and the commissioner of education shall collaborate with regional partnerships for children, families and individuals in each of the geographical regions of the state. Regional partnerships consist of citizens, consumers of health, human services and education programs, family members, governmental agencies and nongovernmental organizations providing health, education and human services, economic development representatives and business leaders, and any other individuals and groups who can contribute to the activities of the regional partnership. Regional partnerships shall develop and implement local strategies for improving the social well-being of Vermonters, and shall advise the agency of human services and the department of education concerning effective implementation of state and local health, human services, and education programs.

(c) The secretary of human services and the commissioner of education shall collaborate with the state team for children, families and individuals, consisting of representatives of the agencies and departments of state government which serve children, families and individuals, state coordinators of interagency teams, directors of private sector service and advocacy organizations, institutions of higher education, coordinators for the regional partnerships, and any other individual or group who can contribute to the activities of the state team. The state team shall support the activities of the regional partnerships, and participate in the development and implementation of state policies and programs designed to improve the well-being of Vermonters.

(d) Annually, on or before February 15, the secretary of human services, the commissioner of education, and the president of the University of Vermont shall report to the general assembly and the governor, concerning:

(1) the activities of the state, regional and research partnerships for children, families and individuals established under this section;

(2) the well-being of Vermonters;

(3) the results of any outcome research completed in the preceding calendar year; and

(4) any other findings or recommendations relating to improving the effectiveness of state and local health, human services, and education programs.

Sec. 98. Rate setting

		Personal services		594,288
		Operating expenses		58,970
			Total	653,258
	Source of funds
		Interdepartmental transfer		653,258

Sec. 99. 33 V.S.A. § 904 is amended to read:

§ 904. RATE SETTING

   (a) The director shall establish by rule procedures for determining payment rates for care of state-assisted persons to nursing homes and to such other providers as the secretary shall direct. The secretary shall have the authority to establish rates that the secretary deems sufficient to ensure that the quality standards prescribed by section 7117 of this title are maintained, subject to the provisions of section 906 of this title. Beginning in state fiscal year 2003, the Medicaid budget for care of state-assisted persons in nursing homes shall employ an annual inflation factor which is reasonable and which adequately reflects economic conditions, in accordance with the provisions of Section 5.8 of the regulations promulgated by the division of rate setting (“Methods, Standards, and Principles for Establishing Medicaid Payment Rates for Long-Term Care Facilities”).

* * *

Sec. 99a. 33 V.S.A. § 1956 is amended to read:

§ 1956. HEALTH CARE TRUST FUND

* * *

(b) All monies received from or generated to the fund shall be used for the state portion of Medicaid expenditures and for administration of provisions of this subchapter under subsection 1952(c) of this title. Of the net revenues generated by the *[$1,534.25]* $2,768.69 per bed annual assessment on nursing homes, the net revenues generated $200.00 per bed shall be used for home- and community-based Medicaid waiver services and the net revenues generated by *[$534.25]* $1,768.69 per bed, less the total amount of the state share of the inflation factor adjustments for state fiscal year 2002, as calculated by the division of rate setting pursuant to subsection 905(c) of this title, shall be used solely for Medicaid nursing home reimbursement as follows:

      (1) Beginning on July 1, 1999, until such time as all cost categories have been rebased pursuant to section 905(c) of this title on a base year no earlier than *[2000]* 2002, wage supplements shall be paid on a schedule to be determined by the commissioner. Such supplements shall be based on the change in expenditures incurred on or after January 1, 1999, as determined by the division of rate setting, for wages, salaries and fringe benefits incurred by nursing homes for direct care staff and for other employee groups in nursing homes, other than owners and administrators (net expenditures). The division of rate setting shall annually calculate the net expenditures for each nursing home. Notwithstanding subsection 905(c) of this title or any other provision of law, the change of base year for any component of the nursing home payment rate shall not be made later than January 1, 2005.

* * *

   (e) The general assembly shall appropriate funds from the health care trust fund to the department of prevention, assistance, transition, and health access, the department of aging and disabilities, and the department of developmental and mental health services, and such funds shall be transferred to the departments’ Medicaid and administrative appropriations as requested by the departments to carry out the purposes of this subchapter.

Sec. 100. Human services board

		Personal services		223,161
		Operating expenses		16,972
			Total	240,133
	Source of funds
		General fund		92,754
		Federal funds		111,836
		Interdepartmental transfer		35,543
			Total	240,133

Sec. 101. Corrections - administration

		Personal services		1,717,486
		Operating expenses		322,087
		Grants		3,506,298
			Total	5,545,871
	Source of funds
		General fund		1,975,871
		Federal funds		3,550,000
		Special funds		20,000
			Total	5,545,871

Sec. 102. Corrections - parole board

		Personal services		213,735
		Operating expenses		70,555
			Total	284,290
	Source of funds
		General fund		284,290

Sec. 103. Corrections - corrections services

		Personal services		47,644,756
		Operating expenses		24,670,716
		Grants		467,000
			Total	72,782,472
	Source of funds
		General fund		70,362,241
		Transportation fund		1,402,578
		Federal funds		551,156
		Special funds		274,500
		Interdepartmental transfer		191,997
			Total	72,782,472

   (a) The following position is authorized to replace ongoing temporary services. The establishment of one (1) new classified position - District Office Clerk II - is authorized in fiscal year 2002.

   (b) Of the above general fund appropriation, $67,000.00 shall be used as a grant to Dismas House.

   (c) The commissioner shall ensure that any rental housing that is procured with funds appropriated to the department shall meet all health and safety standards. The rental rate paid by the department shall not exceed market rate for housing of similar location, size, condition and lease term. Each housing unit shall be inspected no less than annually by a community corrections superintendent or similar position to ensure the housing unit is in habitable condition.

Sec. 104. [Omitted.]

Sec. 105. Corrections - correctional facilities - recreation

		Personal services		306,762
		Operating expenses		226,900
			Total	533,662
	Source of funds
		Special funds		533,662

Sec. 106. Corrections - correctional education

		Personal services		2,350,278
		Operating expenses		430,107
			Total	2,780,385
	Source of funds
		General fund		2,362,743
		Interdepartmental transfer		417,642
			Total	2,780,385

   (a) The establishment of three (3) new classified positions - Correctional Instructor - is authorized in fiscal year 2002.

Sec. 107. Corrections - Vermont correctional industries

		Personal services		1,153,558
		Operating expenses		725,000
			Total	1,878,558
	Source of funds
		Internal service funds		1,878,558

Sec. 108. Developmental disabilities council

		Personal services		102,515
		Operating expenses		35,558
		Grants		265,020
			Total	403,093
	Source of funds
		Federal funds		403,093

Sec. 109. Health - administration and support

		Personal services		2,602,471
		Operating expenses		964,299
			Total	3,566,770
	Source of funds
		General fund		1,350,003
		Federal funds		2,145,860
		Special funds		56,807
		Interdepartmental transfer		14,100
			Total	3,566,770

Sec. 110. Health - health protection

		Personal services		3,200,742
		Operating expenses		694,600
		Grants		147,200
			Total	4,042,542
	Source of funds
		General fund		1,560,925
		Federal funds		1,241,362
		Special funds		903,500
		Interdepartmental transfer		336,755
			Total	4,042,542

Sec. 111. Health - health surveillance

		Personal services		5,278,618
		Operating expenses		1,686,525
		Grants		2,532,663
			Total	9,497,806
	Source of funds
		General fund		3,614,389
		Federal funds		5,007,364
		Special funds		786,488
		Interdepartmental transfer		81,565
		Expendable trust		8,000
			Total	9,497,806

   (a) Of the above general fund appropriation, $300,000.00 shall be used for existing AIDS service organizations, peer-run AIDS organizations, and IMANI for direct client-based case management or directly related support services.

(b) Of the above federal fund appropriation, no less than $296,241.00 shall be used for existing AIDS service organizations, peer-run AIDS organizations and IMANI for direct client-based case management or directly related support services. The department shall follow federal guidelines and shall be advised by the newly convened HIV/AIDS Service Advisory Council (HASAC) for the purpose of prioritization of the use of these funds. Criteria shall be developed by the department in collaboration with the HASAC to govern situations when the department must select providers outside of the existing ASO network to receive part of this federal fund appropriation of $296,241.00 for the provision of specific services that cannot be provided by the ASO network.

(c) The grants in subsections (a) and (b) of this section to existing AIDS service organizations for case management services shall be awarded equitably on a per client basis and shall be used for services only, not administrative or other purposes. The method by which AIDS service organizations’ clients are counted shall be determined by mutual agreement of the department of health, and the AIDS service organizations.

Sec. 112. HIV/AIDS MEDICAL ASSISTANCE PROGRAM

   (a) Of the general fund appropriation in Sec. 111 of this act, $200,000.00 shall be used for all aspects of the HIV/AIDS medication assistance program (AMAP), including the costs of prescribed medications, related laboratory testing, nutritional supplements and maximum cost-effectiveness for the program.

   (b) The secretary of human services shall immediately notify the joint fiscal committee if, at any time, there are insufficient funds in AMAP to assist all eligible individuals. The secretary shall work in cooperation with the persons living with HIV/AIDS to develop a plan to continue access to AMAP medications until such time as the legislature can take action.

   (c) The secretary of human services shall convene an AMAP advisory committee comprised of no less than 50 percent members who are living with HIV. The committee shall make recommendations regarding the program’s formulary of approved medications, related laboratory testing, nutritional supplements and eligibility for the program.

Sec. 113. Health - health improvement

		Personal services		6,357,938
		Operating expenses		1,096,473
		Grants		8,664,405
			Total	16,118,816
	Source of funds
		General fund		3,176,390
		Federal funds		7,817,825
		Special funds		801,101
		Tobacco fund		4,175,000
		Interdepartmental transfer		148,500
			Total	16,118,816

   (a) The department of health may carry forward any unspent portion of funds designated for health professional loan repayment. These funds may be used either alone or to match Federal National Health Service Corps loan repayment funds, local funds, or private funds, and shall be made available to primary care providers and licensed nurses who agree to practice for a prescribed period of time in the state, serving a portion of the state designated as a health professional shortage population, or other rural or underserved areas. Educational scholarships, loan repayment grants, loan deferment payments and payments of taxes due on the award may be considered for payment.

   (b) Of the above general fund appropriation, $300,000.00 is to support the Vermont coalition of clinics for the uninsured health care and dental services provided by clinics for uninsured individuals and families. The coalition shall report to the general assembly on or before January 1 of each year with a fiscal and program accounting of expenditures made with the monies appropriated by the general assembly.

   (c) Of the above tobacco fund appropriation in this section, the following shall be utilized according to the provision of chapter 225 of Title 18 as follows:

      (1) community-based activities - $1,100,000.00;

      (2) countermarketing - $1,000,000.00;

      (3) tobacco cessation programs - $1,275,000.00;

      (4) statewide programs - $200,000.00; and

      (5) fund surveillance and evaluation - $600,000.00.

Sec. 113a. 18 V.S.A. § 10 is added to read:

§ 10. EDUCATIONAL ASSISTANCE; INCENTIVES; NURSES

(a) A Vermont resident enrolled in an accredited registered nursing or licensed practical nursing program in Vermont, is eligible for a loan of up to $6,000.00 per year, provided:

(1) graduation from the program will result in eligibility to sit for the NCLEX-RN nursing examination in the case of a registered nurse or the NCLEX-PN in the case of a licensed practical nurse; and

(2) the student is enrolled as a full-time student in the program.

(b) The amount of up to $6,000.00 of a loan awarded under this section shall be cancelled and forgiven for each year the student is employed as a registered nurse or licensed practical nurse. Eligibility for this program shall be determined by the Area Health Education Center (AHEC). The commissioner may require certification of compliance with this subsection prior to forgiving all or a portion of the loan.

(c) The commissioner shall award up to $6,000.00 per year for up to four years, to any licensed registered nurse or practical nurse who has not received or is not eligible to receive loan forgiveness under subsection (b) of this section, for each year the nurse is employed as a registered or practical nurse. Eligibility for this program shall be determined by AHEC. The commissioner may require certification of compliance with this subsection prior to making an award.

(d) In any year in which the commissioner does not have sufficient funds to carry out the provisions of this section, the commissioner shall use funds appropriated first to provide loans and loan forgiveness pursuant to subsections (a) and (b) of this section. Remaining funds shall be used to provide awards pursuant to subsection (c) of this section, giving priority to those nurses serving in an undersupplied nursing specialty or in a geographic area of Vermont which is underserved.

(e) This program shall apply to registered nurses or licensed practical nurses who have graduated on or after April 1, 2001.

(f) This section shall be repealed effective June 30, 2005.

Sec. 114. Health - community public health

		Personal services		9,535,600
		Operating expenses		1,429,261
		Grants		11,305,521
			Total	22,270,382
	Source of funds
		General fund		4,275,576
		Federal funds		17,464,045
		Special funds		406,800
		Interdepartmental transfer		123,961
			Total	22,270,382

Sec. 115. Health - alcohol and drug abuse programs

		Personal services		2,246,994
		Operating expenses		494,959
		Grants		10,512,081
			Total	13,254,034
	Source of funds
		General fund		3,809,406
		Federal funds		7,709,128
		Special funds		650,500
		Tobacco funds		1,075,000
		Interdepartmental transfer		10,000
			Total	13,254,034

   (a) Of the above appropriation, Maple Leaf Farm shall be reimbursed for Medicaid and uninsured (ADAP grant) at a combined rate of $157.00 per day for primary and residential care. On or before February 1, 2002, Maple Leaf Farm shall submit a report to the house and senate committees on appropriations setting forth the percentage of utilization of the primary care unit by both primary care unit patients and residential care unit patients, and an assessment of the need for the primary care unit.

(b) For the purpose of meeting need for outpatient substance abuse services when the preferred provider system has a waiting list of five days or more, or there is a lack of qualified clinicians to provide services in a region of the state, a state-qualified alcohol and drug counselor may apply to the department of health’s division of alcohol and drug abuse programs for time-limited authorization to participate as a Medicaid provider to deliver clinical and case coordination services as authorized.

(c) Of the above tobacco fund appropriation, $500,000.00 shall be granted for opiate treatment programs.

Sec. 115a. OPIATE ADDICTION TREATMENT

(a) Notwithstanding the provisions of 18 V.S.A. § 4702(b)(7), the commissioner of health may approve up to five opiate addiction treatment programs operated by, and located outside of a hospital or medical school, after consideration of the space requirements and space availability at the hospital or medical school, provided that the program is located in a multi-use building, so that the purpose for which a person is entering or leaving the building is not obvious. Programs approved by the commissioner shall be located in close proximity to other medical and social services and shall not be geographically located in isolated community settings.

Sec. 115b. COST-BASED REIMBURSEMENT FOR OPIATE ADDICTION TREATMENT PROGRAMS

(a) The commissioner shall establish, after conducting negotiations with hospitals and medical schools, reasonable cost-based reimbursement rates for opiate addiction treatment programs authorized by 18 V.S.A. chapter 92.

Sec. 116. COMMISSION ON TOBACCO, ALCOHOL AND SUBSTANCE ABUSE ADDICTION

(a) The commission on tobacco, alcohol and substance abuse addiction is created for the purpose of studying and making recommendations for the development of a coordinated, effective and adequately funded system for preventing tobacco, alcohol and substance abuse addiction and treating such addictions, when they occur, in a humane, caring and effective manner.

(b) The commission shall consist of the following 16 members or their designees:

(1) the commissioner of health;

(2) the director of the office of alcohol and drug abuse programs;

(3) the director of tobacco control programs;

(4) the commissioner of social and rehabilitation services;

(5) the commissioner of public safety;

(6) a representative of local law enforcement selected by the Vermont Chiefs of Police Association;

(7) the chair of the Vermont tobacco evaluation and review board;

(8) the commissioner of corrections;

(9) the commissioner of education;

(10) a representative of a community-based prevention program appointed by the governor; and

(11) six legislative members, including three members from the House appointed by the Speaker of the House and three members of the Senate appointed by the Committee on Committees. Members appointed from each body shall not be all of the same political party. The chair of the commission shall be a legislator elected by the six legislative members.

(c) The commission shall have the assistance and cooperation of all agencies and instrumentalities of the state, which shall provide to the commission such information and analysis as the commission determines is necessary for the performance of its duties, subject to applicable laws of privilege and confidentiality. The commission may meet for no more than eight meetings or public hearings, and shall have such powers as are needed to carry out the purposes of this section.

(d) The legislative council and the joint fiscal office shall provide professional and administrative support for the committee. Legislative members shall be entitled to per diem compensation and reimbursement of expenses in accordance with 2 V.S.A. § 406. Members who do not represent governmental agencies shall be entitled to per diem compensation and reimbursement of expenses in accordance with 32 V.S.A. § 1010.

(e) The commission shall report its findings and recommendations to the governor and the general assembly on or before November 1, 2001, whereupon it shall cease to exist. The report shall:

(1) identify existing agencies and instrumentalities of the state and nongovernmental organizations engaged in preventing and treating tobacco, alcohol and substance abuse addiction, together with the programs, the personnel, and the financial resources and funding sources of such entities;

(2) consider how to coordinate and make the most effective use of Vermont’s resources allocated to addressing tobacco, alcohol and substance abuse addiction, including consideration of whether any organizational restructuring should take place;

(3) recommend whether tobacco trust fund monies should be spent to address alcohol and substance abuse addiction as well as tobacco prevention, cessation and control activities;

(4) make recommendations for the development of a coordinated, effective and adequately funded system for preventing and treating tobacco, alcohol and substance abuse addiction;

(5) include legislative and fiscal proposals to implement the commission findings and recommendations; and

(6) make such other findings and recommendations necessary to carry out the purposes of this section.

(f) In developing its recommendations, the commission shall include as specific goals: strategies and measurable actions directed at preventing and reducing the incidence of tobacco, alcohol and substance abuse; strategies and actions directed at interdicting the sale and distribution of illegal substances, including alcohol and tobacco, for underage users; and strategies and the development of effective treatment techniques and programs which recognize the myriad factors and variables essential to effective treatment and rehabilitation. In its deliberations, the commission shall recognize that prevention, enforcement and treatment services must meet the needs of the abusers, family and community, and that the structure and organization of tobacco, alcohol and substance abuse programs must reflect what is essential to meet these goals.

Secs. 117-119. [Omitted.]

Sec. 120. Prevention, assistance, transition, and health access - administration

		Personal services		28,271,044
		Operating expenses		12,695,541
		Grants		6,140,470
			Total	47,107,055
	Source of funds
		General fund		14,577,976
		Federal funds		28,744,393
		Special funds		3,784,686
			Total	47,107,055

Sec. 121. Prevention, assistance, transition, and health access - Reach Up

		Grants		36,637,653
	Source of funds
		General fund		15,542,899
		Federal funds		18,894,754
		Special funds		2,200,000
			Total	36,637,653

   (a) An 18-year-old dependent child who is a full-time student in a secondary school, or attending an equivalent level of vocational or technical training, and reasonably expected to complete the program before reaching age 19 or not expected to complete the program before reaching age 19 solely due to a documented disability, may remain on the Reach Up grant. Coverage of disabled 18 year olds shall remain in effect for so long as required by court decision.

Sec. 122. Prevention, assistance, transition, and health access - aid to aged, blind and disabled

		Grants		9,574,128
	Source of funds
		General fund		9,574,128

Sec. 123. Prevention, assistance, transition, and health access - Medicaid

		Grants		444,656,748
	Source of funds
		General fund		81,736,536
		Federal funds		278,959,202
		Special funds		66,711,010
		Tobacco fund		17,250,000
			Total	444,656,748

   (a) HIV/AIDS health insurance assistance program.

      (1) The department of prevention, assistance, transition, and health access, in cooperation with the department of health, shall operate an HIV/AIDS insurance assistance program.

      (2) The program shall pay all or a portion of continuation health insurance premiums for those eligible individuals with HIV/AIDS for whom it can be determined that continuation of private insurance coverage is less costly to the state than other alternatives.

      (3) Eligibility for this program shall be limited to individuals whose household income does not exceed 200 percent of the federal poverty level, after deducting unreimbursed medical expenses and health insurance premiums from gross income, and whose assets, exclusive of the primary residence and certain other exclusions to be defined by the department of prevention, assistance, transition, and health access, do not exceed $10,000.00.

      (4) Expenditures under this program shall not exceed $55,000.00 in fiscal year 2002.

   (b) Subject to approval by the federal Health Care Financing Administration, the department of prevention, assistance, transition, and health access is authorized to amend the rules for the Medicaid and VHAP-Pharmacy programs to require beneficiaries to pay a copayment of $3.00 per prescription or a refill on prescriptions whose cost is equal to or exceeds $50.00.

(c) Subject to approval by the federal Health Care Financing Administration, the department of prevention, assistance, transition, and health access is authorized to amend the rules for the Medicaid and VHAP programs to require beneficiaries enrolled in managed care to pay authorized copayments for pharmacy services.

   (d) Notwithstanding Sec. 12 of No. 14 of the Acts of 1995, the department of prevention, assistance, transition, and health access is authorized to amend the rules for the VScript program to require, for beneficiaries whose household income exceeds 150 percent of the federal poverty level and is less than or equal to 175 percent of the federal poverty level a copayment of $2.00 for prescriptions costing $29.99 or less and $4.00 for prescriptions costing $30.00 or more. Implementation of these requirements is subject to approval by the federal Health Care Financing Administration.

   (e) Subject to approval by the federal Health Care Financing Administration, the department of prevention, assistance, transition, and health access is authorized to amend the benefit plan for the VHAP program to eliminate coverage of dental services.

(f) At least $850,730 of the above appropriation shall be used to target payments to procedure codes to increase rates up to 85 percent of Medicare level. This shall be done in consultation with the Vermont medical society physician bargaining group and shall take into consideration: (1) codes with the greatest differential between Medicare and Medicaid; and (2) the volume of services provided.

   (g) The Medicaid inpatient per diem rate shall be increased to the peer group median for any Vermont hospital that is at a competitive disadvantage, as determined by the commissioner, with a hospital in the same peer group and with a similar service mix that is situated within ten miles from the Vermont border and less than 18 miles from the Vermont hospital.

(h)(1) In addition to any other inflationary increases, $1,345,000.00 of the above appropriation shall be used to increase reimbursement for hospitals and other health care providers as defined in subdivision 9402(6) of Title 18. These funds shall be allocated as follows: 44 percent to hospitals, of which the initial portion shall be to fulfil the requirements of subsection (g) above; 34 percent for physicians; five percent for dentists; and 17 percent for other providers.

   (2) During fiscal year 2002, increased Medicaid payments made to hospitals under this section shall be used to promote appropriate utilization of services, increased efficiencies, and other quality improvements provided to Medicaid beneficiaries. The department of PATH shall collaborate with the Vermont Association of Hospitals and Health Systems and the Vermont Program for Quality in Health Care in determining the programs and facilities that best qualify for such payments

(i) PATH is instructed to file for an amendment to its Medicaid waiver to allow for additional payments to providers to eliminate cost shifting.

(j) The rules for Medicaid payments for nursing homes shall be amended, effective July 1, 2001, to raise the limit on recognition of base year indirect per diem costs to 137 percent of the median of base year indirect per diem costs of all private nursing homes participating in the Vermont Medicaid program, for hospital-based nursing homes that meet all the following criteria on the date of passage of this act: (1) are physically integrated as part of a hospital building with at least one common wall and direct internal access between the hospital and the nursing home; (2) are part of a single corporation that governs both the hospital and the nursing home; and (3) file one Medicare cost report for both the hospital and the nursing home.

(k) Notwithstanding any other provisions of law, the rule change in subsection (j) of this section shall be adopted as soon as practicable after passage of this act and shall be exempt from the procedural requirements of

3 V.S.A. chapter 25, except that the agency of human services shall make reasonable efforts to ensure that the change is made known to persons who may be affected by it.

(l) In addition to any other inflationary increase or other reimbursement rate increases, $750,000.00 of the above appropriation shall be used to institute a supplemental dental bonus program based proportionately on the level of participation of dental practices enrolled in the Medicaid program. The bonus program shall be submitted to the joint fiscal committee by July 1, 2001. The department shall report to the general assembly by January 2002 with recommendations for increasing dental reimbursements to market levels over the next three years.

(m) The commissioner of the department of PATH shall conduct a study to determine if the addition of the $750,000.00 in subsection (l) of this section resulted in increased access to dental services for Medicaid patients. The study shall be submitted to the House and Senate committees on appropriations by January 15, 2003.

(n)(1) The commissioner of prevention, assistance, transition, and health access shall establish a pharmacy best practices and cost control program designed to reduce the cost of providing prescription drugs, while maintaining high quality in prescription drug therapies. The program shall include a preferred list of covered prescription drugs that identifies preferred choices within therapeutic classes for particular diseases and conditions, including generic alternatives, utilization review procedures, including a prior authorization review process, and any other cost containment activity adopted by rule by the commissioner, designed to reduce the cost of providing prescription drugs while maintaining high quality in prescription drug therapies.

   (2) The commissioner may implement all or a portion of this program through a contract with a third party with expertise in the management of pharmacy benefits.

   (3) The commissioner shall implement the program for Medicaid and VScript, and may implement the program for any other public or private health benefit plan within or outside of this state that agrees to participate in the program, and may enroll in the program individuals without adequate public or private coverage for prescription drugs.

   (4) For HIV and AIDS-related medications used by individuals with HIV or AIDS, the preferred drug list and any utilization review procedures shall not be more restrictive than the drug list and the application of the list used for the State of Vermont AIDS Medication Assistance Program.

(o)(1) The department shall provide information on how beneficiaries enrolled in a pharmacy benefit plan participating in the pharmacy best practices and cost control program authorized in subsection (n) of this section can obtain a copy of the preferred drug list, whether any change has been made to the preferred drug list since it was last issued, and the process by which exceptions to the preferred list may be made.

(2) The pharmacy best practices and cost control program shall authorize pharmacy benefit coverage when a patient’s health care provider prescribes a prescription drug not on the preferred drug list, or a prescription drug which is not the list’s preferred choice:

(A) under the same terms as coverage for preferred choice drugs if:

(i) the preferred choice has not been effective, or with reasonable certainty is not expected to be effective, in treating the patient’s condition; or

(ii) the preferred choice causes or is reasonably expected to cause adverse or harmful reactions in the patient; or

(B) if the patient agrees to pay any additional cost in excess of the benefits provided by the patient’s health benefit plan if allowed under the legal requirements applicable to the plan, otherwise to pay the full cost for the higher priced drug.

(3)(A) In connection with the pharmacy best practices and cost control program, the commissioner of prevention, assistance, transition, and health access shall report for review by the health access oversight committee, prior to initial implementation, and prior to any subsequent modifications:

(i) the compilation that constitutes the preferred drug list or list of drugs subject to prior authorization or any other utilization review procedures;

(ii) any utilization review procedures, including any prior authorization procedures; and

(iii) the procedures by which drugs will be identified as preferred on the preferred drug list, and the procedures by which drugs will be selected for prior authorization or any other utilization review procedure.

(B) The health access oversight committee shall closely monitor implementation of the preferred drug list and utilization review procedures to ensure that the consumer protection standards enacted pursuant to subdivision (2) of this subsection are not diminished as a result of implementing the preferred drug list and the utilization review procedures, including any unnecessarily delay in access to appropriate medications. The committee shall ensure that all affected interests, including consumers, health care providers, pharmacists, and others with pharmaceutical expertise have an opportunity to comment on the preferred drug list and procedures reviewed under this subdivision (3).

(4) The commissioner of prevention, assistance, transition, and health access shall report quarterly to the health access oversight committee concerning the following aspects of the pharmacy best practices and cost control program:

(A) the efforts undertaken to educate health care providers about the preferred drug list and the program’s utilization review procedures;

(B) the number of prior authorization requests made, the number of requests denied, the number of denial appeals, and the result of such appeals; and

(C) the number of utilization review events (other than prior authorization requests), the number of such cases in which coverage of a drug is denied, the number of denial appeals, and the results of such appeals.

(5) On or before January 1, 2002, and on or before January 1 of each year for the duration of the pharmacy benefit manager contract, the commissioner of prevention, assistance, transition, and health access shall report to the house and senate committees on health and welfare, and to the health access oversight committee concerning implementation of any pharmacy benefit manager contract entered into by the pharmacy best practices and cost control program. The report shall include:

(A) a description of the activities of the pharmacy benefit manager;

(B) an analysis of the success of the pharmacy benefit manager in achieving each of the department’s public policy goals, together with the pharmacy benefit manager’s report of its activities and achievements;

(C) an assessment of Medicaid and VScript program administrative costs relating to prescription drug benefits, including any recommendations for increasing the administrative efficiency of such programs;

(D) a fiscal report on the state fiscal costs and savings to Vermont of the pharmacy benefit manager contract, including an accounting of any payments, fees, offsets, savings and other financial transactions or accountings; and

(E) any recommendations for enhancing the benefits of the pharmacy benefit manager contract, and an identification of, and any recommendations for minimizing any problems with the contract; and

(F) if the department has not entered into a contract with a pharmacy benefit manager, or if any such contract has been rescinded, any recommendations for pursuing Vermont’s public policy goals relating to pharmaceutical costs, quality and access through other means.

(6)(A) The fiscal report required by subdivision (5)(D) of this subsection shall include the disclosure, in a manner that preserves the confidentiality of any proprietary information as determined by the commissioner, of:

(i) any agreements enter into by the pharmacy benefit manager identified in subsection (d) of this section; and

(ii) the financial impact of such agreements on Vermont, and on Vermont beneficiaries.

(B) The commissioner shall not enter into a contract with a pharmacy benefit manager unless the pharmacy benefit manager has agreed to disclose to the commissioner the terms, and the financial impact on Vermont and on Vermont beneficiaries of:

(i) any agreement with a pharmaceutical manufacturer to favor the manufacturer’s products over a competitor’s products, or to place the manufacturer’s drug on the pharmacy benefit manager’s preferred list or formulary, or to switch the drug prescribed by the patient’s health care provider with a drug agreed to by the pharmacy benefit manager and the manufacturer;

(ii) any agreement with a pharmaceutical manufacturer to share manufacturer rebates and discounts with the pharmacy benefit manager, or to pay “soft money” or other economic benefits to the pharmacy benefit manager;

(iii) any agreement or practice to bill Vermont health benefit plans for prescription drugs at a cost higher than the pharmacy benefit manager pays the pharmacy;

(iv) any agreement to share revenue with a mail order or internet pharmacy company;

(v) any agreement to sell prescription drug data concerning Vermont beneficiaries, or data concerning the prescribing practices of the health care providers of Vermont beneficiaries; or

(vi) any other agreement of the pharmacy benefit manager with a pharmaceutical manufacturer, or with wholesale and retail pharmacies affecting the cost of pharmacy benefits provided to Vermont beneficiaries.

(C) The commissioner shall not enter into a contract with a pharmacy benefit manager which has entered into an agreement or engaged in a practice described in subdivision (B) unless the commissioner determines, and certifies in the fiscal report required by subdivision (5)(D) of this subsection, that such agreement or practice furthers the financial interests of Vermont, and does not adversely affect the medical interests of Vermont beneficiaries.

(p) The commissioner of prevention, assistance, transition, and health access shall develop procedures for the coordination of VScript and Medicaid benefits with pharmaceutical manufacturer patient assistance programs offering free or low cost prescription drugs, including the development of a proposed single application form for such programs. The commissioner may contract with a nongovernmental organization to develop the single application form.

(q) The pharmacy best practices and cost control program shall establish procedures for the timely review of prescription drugs newly approved by the federal Food and Drug Administration, including procedures for the review of newly approved prescription drugs in emergency circumstances.

(r) The department of prevention, assistance, transition, and health access is authorized to amend the rules for the Medicaid program to establish a new optional coverage category, adding coverage for women who: (1) have been screened for and found to have breast or cervical cancer, including pre-cancerous conditions, through the National Breast and Cervical Cancer Early Detection Program (NBCCEDP); (2) are under 65; and (3) are uninsured and other wise not eligible for Medicaid.

(s) The department shall increase the benefit as of July 2001 for individuals enrolled in VScript who have incomes greater than 175 percent and equal to or less than 225 percent of the federal poverty level to secure the discount available in the Pharmacy Discount Program proportionate to the beneficiary’s coinsurance payment for maintenance treatment prescription drugs.

Sec. 123a. EQUITABLE MEDICAID REIMBURSEMENT AND THE MEDICAID FISCAL DEFICIT

   The General Assembly finds that:

1) While Vermont has been a leader in expanding access to health care coverage through its Medicaid programs (including traditional Medicaid, the Dr. Dynasaur program, the Vermont Health Access Plan, VHAP-Pharmacy and VScript), and has a high quality and low cost health care system as recognized by federal measurement, Vermont has not adopted fiscal policies adequate to sustain program costs.

(2) The Vermont Medicaid program is part of the larger health care cost escalation landscape, where Vermont and the nation are experiencing a crisis in health care affordability affecting businesses large and small, state employee and teacher benefit plan costs, as well as the cost of the Medicaid program.

(3) Expenditure growth in Vermont’s Medicaid program is particularly acute because of increased enrollments following program expansions, and because of rising prescription drug costs that affect the traditional Medicaid program and program expansions such as VHAP-Pharmacy and VScript.

(4) Medicaid costs paid by the state are substantially higher than they otherwise would be if enhanced federal financial participation (e.g. SCHIP) were available for more of Vermont’s programs.

(5) Vermont’s fiscal options for Medicaid programs are further limited, absent a federal waiver, by federal Medicaid rules that do not permit significant cost sharing by most program beneficiaries, and by federal Medicaid rules that mandate a specific, comprehensive health benefit coverage.

(6) The federal Medicaid financial participation rate does not reward Vermont’s achievement as a relatively low cost, high quality health care system, since federal financial participation is based solely on per capita income, rather than on the performance of our health care system.

(7) Vermont Medicaid program reimbursement generally is lower than reimbursement paid by commercial insurers, by self insured plans, and by the Medicare program. The Vermont Medicaid program generally does not provide revenue adequate to recover the estimated cost of service.

(8) Cost shifting occurs in the health care financing system when different purchasers pay different amounts for the same service. Medicaid cost shifting occurs when hospitals and some large physician groups are paid by non-Medicaid payers for part of the costs incurred in providing services to Medicaid beneficiaries. Many physicians and other health care providers are unable to shift the cost of providing Medicaid services to other payers.

(9) Medicaid is not the only health benefit plan whose reimbursement policies result in cost shifting: for example, hospitals shift costs incurred in providing Medicare services to other health benefit plans; many health benefit plans secure steep discounts from retail pharmacies that result in higher costs for uninsured individuals; and the cost of hospital free care is recovered from public and private health benefit plans.

(10) Inadequate Medicaid reimbursement is a public policy problem in connection with hospital reimbursement (and perhaps with large provider group reimbursement) because hospitals respond with a cost shift that results in health insurance premiums that are higher than they otherwise would be.

(11) Inadequate Medicaid reimbursement is a public policy problem in connection with physician and other health care provider reimbursement because providers who are inadequately compensated either may face financial difficulties operating a health care practice in Vermont, or may deny health care access to Medicaid beneficiaries. For example, many dentists restrict access to Medicaid beneficiaries. Furthermore, recruitment and retention of certain providers has become a serious problem in geographic areas or specialties with high Medicaid enrollment.

(12) Medicare reimbursement principles have been accepted by many as an appropriate standard that should be adopted for Medicaid reimbursement. Medicare reimbursement is reasonable because Vermont’s federal allocation per patient is well below the national average, reflecting our relatively low-cost system, and the Congress has adopted mechanisms to insure that Medicare reimbursement is appropriate and fair. Establishing a Vermont-specific “reasonable cost” standard would require the development of a significant, new regulatory system to identify reasonable and appropriate costs, and to establish the level of payment needed to ensure access to services by Medicaid beneficiaries.

(13) Federal budget neutrality requirements imposed on the VHAP program constrain Vermont’s ability to quickly eliminate the Medicaid cost shift, since VHAP program costs in excess of the budget neutrality standard will be ineligible for federal financial participation.

(14) Eliminating the Medicaid cost shift by reaching parity with the Medicare reimbursement standard would require substantial new Medicaid revenue: $12 to 19 million for Vermont hospitals; $4 to 6 million for Dartmouth Hitchcock; and $11 to 13 million for physicians.

(15) Most health care issues are inter-related; they cannot be solved in isolation. Eliminating the Medicaid cost shift is a goal that should be considered together with an integrated approach to other Medicaid issues such as establishing equitable Medicaid reimbursement policies, implementing effective cost containment strategies, and creating an adequate, equitable and economically efficient Medicaid financing system.

(16)(A) The state of Vermont shall adopt a fiscal strategy and appropriations to achieve the following goals:

(i) eliminate, within a period of time no longer than four years, cost shifting and under-reimbursement in the Medicaid program, with data developed by the joint fiscal office with the cooperation and assistance of the agency of human services;

(ii) reimburse health care providers in the Medicaid program at least at the federal Medicare level, or some other agreed-to payment structure to attempt to insure access and a stable delivery system; and

(iii) assure that Medicaid costs should continue to be consistent with Vermont’s relatively low cost and efficient delivery system.

(B) To achieve the goals established in subdivision (A) of this subdivision (16) the state of Vermont should consider the following:

(i) A comprehensive strategy to align Medicaid program expenditures and revenues.

(ii) Progressively higher reimbursement levels until parity with the Medicare standard, where applicable, or some other equitable reimbursement standard is attained.

(iii) Monitoring the fiscal soundness and cost effectiveness of the program in consideration of effective utilization and quality programs, and greater federal flexibility in cost sharing and benefit plan design.

(iv) More equitable federal financial participation, by capitalizing on higher federal financial participation rates in other federal programs for existing VHAP beneficiaries, recognizing Vermont’s high quality, low cost system as we approach universal access.

(v) A federal partnership to support pharmaceutical assistance programs, through greater cost sharing or a federal demonstration project.

(17)(A) On or before January 1 of each year until January 1, 2005, the secretary of human services, in consultation with, and with the cooperation of, the joint fiscal committee, shall recommend to the general assembly what steps need to be taken to achieve the commitment stated in subdivision (16) of this section to eliminate the Medicaid cost shift by January 1, 2005.

(B) The commissioner of banking, insurance, securities, and health care administration, the commissioner of personnel, each acute care hospital providing services to Vermont Medicaid beneficiaries, and health insurers, as defined in subdivision 9402(7) of Title 18 and as requested by the secretary, shall provide to the secretary such available information and reasonable assistance as is necessary for the secretary to make its recommendations as required by this subdivision.

(C) Sec. 117b of Act No. 152 of the 2000 Session of the General Assembly (Medicaid Cost Shift Reporting) is repealed.

Sec. 123b. 18 V.S.A. § 9456(b) and (c) are amended to read:

   (b) In conjunction with budget reviews, the commissioner shall:

      (1) review utilization information;

      (2) consider the goals and recommendations of the health resource management plan or state health plan, whichever applies;

      (3) consider the expenditure analysis for the previous year and the proposed expenditure analysis for the year under review;

      (4) consider any reports from professional review organizations;

      (5) solicit public comment on all aspects of hospital costs and use and on the budgets proposed by individual hospitals;

      (6) meet with hospitals to review and discuss hospital budgets for the forthcoming fiscal year;

      (7) give public notice of the meetings with hospitals, and invite the public to attend and to comment on the proposed budgets; *[and]*

      (8) consider the extent to which costs incurred by the hospital in connection with services provided to Medicaid beneficiaries are being charged to non-Medicaid health benefit plans and other non-Medicaid payers;

      (9) require each hospital to file an analysis that reflects a reduction in net revenue needs from non-Medicaid payers equal to any anticipated increase in Medicaid reimbursements resulting from appropriations designed to reduce the Medicaid cost shift; and

      *[(8)]*(10) seek the advice and recommendations of the public oversight commission.

   (c) Individual hospital budgets established under this section shall:

      (1) be consistent with the health resource management plan or state health plan, whichever applies;

      (2) take into consideration national, regional or instate peer group norms, according to indicators, ratios and statistics established by the commissioner;

      (3) promote efficient and economic operation of the hospital; *[and]*

      (4) reflect budget performances for prior years; and

      (5) include a finding that the analysis provided in subdivision (b)(9) of this section is a reasonable methodology for reflecting a reduction in net revenues for non-Medicaid payers.

Sec. 123c. FEDERALLY-QUALIFIED HEALTH CENTERS

(a) It is the purpose of this section to assist Vermonters to purchase prescription drugs at the lowest possible cost, and to advance Vermont’s goal of affordable access to quality health care for all Vermonters through the expansion and development of federally-qualified health centers throughout this state. The general assembly finds that an appropriate expansion of federally-qualified health centers can:

(1) empower communities to create a system of universal access to primary health care that people need;

(2) create a partnership between Vermonters who use health care services and the providers of those services;

(3) reduce health care costs for patients through administration of an income-based sliding scale fee schedule for primary health care services;

(4) expand access to health care in medically-underserved areas, and reduce cost shifting to private health insurance plans through a service-based reimbursement schedule for primary health care providers that is determined by the reasonable cost of the services provided; and

(5) reduce health care costs for individuals, businesses and government through access to the substantially discounted prescription drug prices available pursuant to federal law.

(b) Within 120 days of passage of this act, the governor is directed to request from the federal government medically-underserved area designations, and any other designation or approval needed to establish federally-qualified health centers or other entities permitted to access substantially discounted prescription drug prices available pursuant to federal law in all appropriate regions of the state of Vermont not so designated on the effective date of this act, and to take all steps necessary to secure such designations and approvals.

(c) Within 30 days of passage of this act, the department of health shall award a contract to implement the provisions of this section, and shall award to the contractor such funds as are appropriated by the general assembly to carry out the purpose of this section.

(d) The contract awarded by the department of health to carry out the purposes of this section shall provide for the following:

(1) the development and implementation of a plan to create an appropriate number of federally-qualified health center administrative entities statewide, with such satellite facilities as the federally-qualified health center administrative entities may determine are necessary to meet the health care needs of the community;

(2) technical assistance, by contract or other means, to rural health centers and health care providers seeking federal approval as a federally-qualified health center;

(3) grants not to exceed $10,000.00 to rural health centers and health care providers, matched by the grant recipient at 50 percent of the grant amount, to support all or a portion of the expenses associated with conversion to a federally-qualified health center;

(4) grants not to exceed $10,000.00 to nonprofit community organizations, matched by the grant recipient at 50 percent of the grant amount, to support all or a portion of the expenses associated with the establishment of federally-qualified health center administrative entities;

(5) the development and implementation of plans to ensure that each federally-qualified health center operating in this state provides access to prescription drugs to patients of the center at substantially discounted prices available pursuant to federal law, through contracts with existing community retail pharmacies and in conformity with any applicable requirements of the federal health resources and services administration, or through a health center dispensary if a contract with a community pharmacy is not feasible; and

(6) the development of and participation in one or more pilot or demonstration projects by hospital and physician groups and others, in accordance with applicable federal laws and regulations, to expand the benefits of federally-qualified health centers to a greater number of Vermonters.

(e) The commissioner of health and its contractor shall report to the general assembly on or before January 15 of each year with its progress in implementing the provisions of this section, and with an accounting of its use of grant funds.

(f) Vermont’s Congressional Delegation is urged to take all actions necessary and desirable in securing designations, approvals and other actions by the federal government required to carry out the purposes of this section.

(g) The commissioner of health may exercise sole source contracting authority to carry out the provisions of this section.

Sec. 124. 18 V.S.A. chapter 91 is amended to read:

CHAPTER 91. GENERIC DRUGS

§ 4601. DEFINITIONS

For the purposes of this chapter, unless the context otherwise clearly requires:

(1) “Brand name” means the registered trademark name given to a drug product by its manufacturer or distributor;

(2) “Generic name” means the official name of a drug product as established by *[the United States Pharmacopoeia or National Formulary or their successors]* the United States Adopted Names Council (USAN) or its successor, if applicable;

(3) “Pharmacist” means a natural person licensed by the state board of pharmacy to prepare, compound, dispense and sell drugs, medicines, chemicals and poisons;

(4) *[“Formulary” means a list of generic names, each of which represents a number of drug products or brand names considered by the committee to be chemically and therapeutically equivalent]* “Generic drug” means a drug listed by generic name and considered to be chemically and therapeutically equivalent to a drug listed by brand name, as both names are identified in the most recent edition of the federal Food and Drug Administration’s “Orange Book” of approved drug products;

(5) “Prescriber” means any duly licensed physician, dentist, veterinarian or other practitioner licensed to write prescriptions for the treatment or prevention of human disease in man or animal. *[§ 4602. FORMULARY; CREATION]* *[The secretary of the agency of human services is responsible for developing a formulary within 180 days of the effective date of this chapter. The secretary shall appoint a committee to establish and maintain a formulary, which committee shall consist of six members who shall be residents of the state of Vermont. The committee shall consist of one member of the faculty of the department of pharmacology of the college of medicine at the University of Vermont; one member of the faculty of another department of the college of medicine at the University of Vermont who is experienced in the evaluation of clinical trials and research methodology; one member of the board of pharmacy; one member of the medical profession, primarily engaged in the practice of medicine, other than a member of the board of medical examiners, to be appointed from a list of names submitted by the Vermont state medical society; one member who is a pharmacist, other than a member of the board of pharmacy, to be appointed from a list of names submitted by the Vermont pharmaceutical association; and one public member who is not a member of any health profession to represent the consumer.]* *[§ 4603. COMMITTEE: RULES]* *[(a) The committee shall elect a chairman from its members.]* *[(b) A majority of the members of the committee shall constitute a quorum. The committee shall act only by vote of a majority of its members present. Meetings shall be called by the chairman upon adequate notice to all members.]* *[(c) The secretary of the agency of human services shall, under chapter 25 of Title 3, adopt rules of procedure.]* *[(d) Members of the committee shall be entitled to $30.00 per diem and their necessary and actual expenses.]* *[(e) The committee shall meet as often as the chairman considers necessary but in no event less than twice each year.]* *[§ 4604. DUTIES OF COMMITTEE]* *[(a) The committee shall establish and maintain a formulary as defined in subdivision (4) of section 4601 of this title which shall be approved by the secretary of the agency of human services.]* *[(b) The committee shall update the formulary at least annually.]* *[(c) If the committee adopts in whole or in part formularies adopted by other states and federal agencies, it must satisfy itself that such formularies are based on valid scientific evidence of chemical and therapeutic equivalence.]* *[(d) The formulary or updates as provided under subsections (a) and (b) of this section shall, whenever the committee updates the formulary, be distributed by the secretary in cooperation with the appropriate Vermont professional boards to all pharmacies and prescribers in Vermont.]* *[(e) Each year, on or before January 15, the committee shall submit a written report describing its activities of the previous year to the house and senate committees on government operations.]*

§ 4605. ALTERNATIVE DRUG SELECTION

   (a) When a pharmacist receives a prescription for a drug which is listed either by generic name or brand name *[on the Vermont state formulary, he]* in the most recent edition of the federal Food and Drug Administration’s “Orange Book” of approved drug products, the pharmacist shall select the lowest priced drug from *[the formulary]* such list which *[in his professional judgment]* is chemically and therapeutically equivalent and which *[he]* the pharmacist has in stock, unless otherwise instructed by the *[purchaser or]* prescriber, or by the purchaser if the purchaser agrees to pay any additional cost in excess of the benefits provided by the purchaser’s health benefit plan if allowed under the legal requirements applicable to the plan, otherwise to pay the full cost for the higher priced drug.

(b) The purchaser shall be informed by the pharmacist or his representative that an alternative selection as provided under subsection (a) of this section will be made unless the purchaser *[chooses to refuse the substitution]* agrees to pay any additional cost in excess of the benefits provided by the purchaser’s health benefit plan if allowed under the legal requirements applicable to the plan, otherwise to pay the full cost for the higher priced drug.

(c) When refilling a prescription, pharmacists shall receive the consent of the *[patient and]* prescriber to dispense a drug different from that originally dispensed, and shall inform the purchaser that a generic substitution shall be made unless the purchaser agrees to pay any additional cost in excess of the benefits provided by the purchaser’s health benefit plan if allowed under the legal requirements applicable to the plan, otherwise to pay the full cost for the higher priced drug.

(d) Any pharmacist substituting a generically equivalent drug shall charge no more than the usual and customary retail price for that selected drug. This charge shall not exceed the usual and customary retail price for the prescribed brand.

§ 4606. BRAND CERTIFICATION

If the prescriber does not wish substitution to take place, he or she shall write “brand necessary” or “no substitution” in his or her own handwriting on the prescription blank, together with a written statement that the generic equivalent has not been effective, or with reasonable certainty is not expected to be effective, in treating the patient’s medical condition or causes or is reasonably expected to cause adverse or harmful reactions in the patient. In the case of an unwritten prescription, there shall be no substitution if the prescriber expressly indicates to the pharmacist that the brand name drug is necessary and substitution is not allowed because the generic equivalent has not been effective, or with reasonable certainty is not expected to be effective, in treating the patient’s medical condition or causes or is reasonably expected to cause adverse or harmful reactions in the patient.

§ 4607. INFORMATION; LABELING

   (a) Every pharmacy in the state shall have posted a sign in a prominent place that is in clear unobstructed view which shall read: “Vermont law requires pharmacists in some cases to select a less expensive generic equivalent for the drug prescribed unless you or your physician direct otherwise. Substitution will be noted on your prescription label by an “S” in the lower left corner. Ask your pharmacist.”

   (b) The label of the container of all drugs dispensed by a pharmacist under this chapter shall indicate the generic name using an abbreviation if necessary, the strength of the drug and the name or number of the manufacturer or distributor.

   (c) If a generically equivalent substitution has been made, an “S” will be noted in the lower left corner of the prescription label.

§ 4608. LIABILITY

   (a) Nothing in this chapter shall affect a licensed hospital with the development and maintenance of a hospital formulary system in accordance with that institution’s policies and procedures that pertain to its drug distribution system developed by the medical staff in cooperation with the hospital’s pharmacist and administration.

   (b) The substitution of a drug by a pharmacist under the provisions of this chapter does not constitute the practice of medicine.

Sec. 125. Sec. 3 of No. 3 of the Acts of 1999, as amended by Sec. 118 of No. 152 of the Acts of 2000, is further amended to read:

Sec. 3. EFFECTIVE DATE

   This act shall be effective from the date of passage and shall be repealed on July 1, *[2001]* 2002.

Sec. 126. Prevention, assistance, transition, and health access - general assistance

		Grants		4,044,762
	Source of funds
		General fund		3,233,441
		Federal funds		811,320
		Special funds		1
			Total	4,044,762

   (a) Of the above appropriation, $400,000.00 in federal TANF funds is allocated specifically for assistance to families who demonstrate that they are faced with a reasonably preventable loss of housing and who meet state requirements for this assistance, as established by regulation effective July 1, 1998, including modifications effective July 1, 1999, and July 1, 2000. Assistance under this provision is not an entitlement, and shall cease upon expenditure of these allocated funds.

   (b) Of the above appropriation, an amount not to exceed $150,000.00 ($75,000.00 federal TANF funds and $75,000.00 general funds) may be expended for temporary housing assistance to individuals and families that have reached the 28-day maximum allowed under department regulations, and have a continued need for this type of emergency assistance. Assistance shall be limited to an additional 56 cumulative days beyond the current 28-day maximum. Assistance under this provision is not an entitlement, and shall cease upon expenditure of these allocated funds.

Sec. 127. Prevention, assistance, transition, and health access - food stamp cash out

		Grants		4,519,544
	Source of funds
		Federal funds		4,519,544

Sec. 128. Prevention, assistance, transition, and health access - home heating fuel assistance/LIHEAP

		Personal services		20,000
		Operating expenses		90,000
		Grants		5,752,075
			Total	5,862,075
	Source of funds
		Special funds		5,862,075

Sec. 129. PREVENTION, ASSISTANCE, TRANSITION, AND HEALTH ACCESS - HOME HEATING FUEL ASSISTANCE/LIHEAP

   (a) All federal funds granted to the state for home heating fuel assistance under the Low Income Home Energy Assistance Program (LIHEAP) or other similar federal program in fiscal year 2002, and all unexpended LIHEAP funds granted to the state in fiscal year 2001, are hereby transferred to the home heating fuel assistance trust fund for the provision of home heating fuel assistance, including program administration, under chapter 26 of Title 33.

(b) For the purposes of a crisis set-aside, seasonal home heating fuel assistance through December 31, 2001, and program administration, the commissioner of finance and management shall transfer $2,550,000.00 from the home weatherization assistance trust fund to the home heating fuel assistance trust fund to the extent that federal LIHEAP or similar federal funds are not available. An equivalent amount shall be returned to the home weatherization trust fund from the home heating fuel assistance trust fund to the extent that federal LIHEAP or similar federal funds are received. Should a transfer of funds from the home weatherization assistance trust fund be necessary for the 2001-2002 crisis set-aside and seasonal home heating fuel assistance through December 31, 2001, and LIHEAP funds awarded as of December 31, 2001 for fiscal year 2002 do not exceed $2,550.000.00, subsequent payments under the home heating fuel assistance program shall not precede January 30, 2002. Notwithstanding any other provision of law, payments authorized by the office of home heating fuel assistance shall not exceed funds available except that for fuel assistance payments made through December 31, 2001, the commissioner of finance and management may anticipate receipts into the home weatherization assistance trust fund.

   (c) Of the funds appropriated in Sec. 128 of this act, no more than $900,000.00 shall be expended for crisis fuel assistance benefits, crisis fuel direct service/administration, and crisis fuel after-hours assistance. In the 2001-2002 fuel season, in the event that $900,000.00 is insufficient to fund the crisis component of the fuel program, as defined above, and inadequate federal LIHEAP emergency contingency funding is released to the state during the 2001-2002 program year, the home weatherization assistance trust fund may be the source, consistent with 33 V.S.A. § 2502(d), of the additional funds required.

Sec. 129a. 33 V.S.A. § 2602(c) is added to read:

   (c) The secretary shall engage in cost-effective purchasing practices to maximize the purchasing power of public funds used in connection with the home heating fuel assistance program. Such practices shall include, but not be limited to, preseason purchases of fuel, and negotiations with fuel suppliers on behalf of program recipients for additional fuel price discounts. The practices authorized by this subsection shall be used in connection with all applicable fuels purchased by program beneficiaries. The secretary shall make available to program recipients the list of fuel suppliers who have agreed to provide fuel discounts.

Sec. 129b. 33 V.S.A. § 2603(d) is added to read:

   (d) The secretary may spend, in anticipation of federal receipts into the home heating fuel assistance trust fund established under this section, a sum no greater than 75 percent of the federal block grant funds allocated to Vermont for the current federal fiscal year under the Low Income Home Energy Assistance Program (LIHEAP), for the purpose of permitting preseason purchases of fuel and other cost-effective purchasing practices authorized by subsection 2602(c) of this title, in accordance with rules adopted by the secretary.

Sec. 129c. 33 V.S.A. § 2502(e) is added to read:

   (e) The emergency board may direct that a portion of the amounts raised by the gross receipts on retail sales of fuel imposed by section 2503 of this title be used for energy assistance to low income persons and deposited into the home heating fuel assistance trust fund, for the purpose of meeting the home heating fuel assistance needs of the program recipients under chapter 26 of this title, provided that the emergency board determines such transfer does not reduce the fiscal capacity of the state office of economic opportunity to meet the budgeted obligations of the weatherization program set forth in this chapter.

Sec. 129d. INVESTIGATION OF COST-EFFECTIVE NATURAL GAS PURCHASING

   The department of public service shall conduct financial analyses, and shall conduct negotiations with natural gas companies under the jurisdiction of the public service board, to determine the cost-effectiveness of any purchasing practices authorized under subsection 2602(c) of Title 33 (home heating fuel assistance program).

Sec. 129e. EXPEDITED RULES

(a) Notwithstanding any other provision of the law, for the purpose of an expeditious implementation of cost effective purchasing practices for the 2001-2002 heating season only, the secretary shall adopt such rules as are necessary to implement the provisions of Secs. 129a and 129b of this act. The rule change shall be adopted as soon as practicable after the passage of this act and shall be exempt from the procedural requirements of 3 VSA chapter 25, except that the agency shall make reasonable efforts to ensure that the change is known to persons who may be affected by it. Any such rules filed by the secretary of human services with the secretary of state and the legislative committee on administrative rules shall be deemed to be in full compliance with 3 V.S.A. § 843, and shall be accepted by the secretary of state if filed with a certification by the secretary of human services that the rule is required to meet the purposes of this subsection.

(b) The public service department shall request the commencement of any proceedings before the public service board as it deems necessary to implement cost-effective natural gas purchasing practices.

Sec. 130. ADOPTION OF PREVENTION, ASSISTANCE, TRANSITION, AND HEALTH ACCESS RULES

   (a) The secretary of human services is authorized to adopt rules under the expeditious rule-making procedures provided in this section in order that changes reflected in this act to programs administered by the department of prevention, assistance, transition, and health access may be implemented by July 1, 2001. Notwithstanding the provisions to the contrary of 3 V.S.A. chapter 25, the agency of human services may file prior to and adopt, effective July 1, 2001, all rules necessary to do the following:

      (1) Implement Medicaid, VHAP, VHAP-Pharmacy, and VScript policies as specified in this act.

      (2) Exempt all individuals domiciled in the state of Vermont from the implementation of Sec. 115(a) of Public Law 104-193 through June 30, 2002.

   (b) Such rules may be adopted by filing them in final form with the secretary of state and the legislative committee on administrative rules under 3 V.S.A. § 841, after only such publication, notice, and public input as is deemed adequate and feasible by the secretary of human services. The legislative committee on administrative rules shall review and may approve or object to the final proposed rules under the provisions of 3 V.S.A. § 842, except that its action shall be completed within 15 days or June 22, 2001, whichever is sooner. Rules so adopted may be effective as soon as four days after adoption, and have the full force and effect of rules adopted pursuant to 3 V.S.A. chapter 25 and may supersede or amend existing rules. Any such rules filed by the secretary of human services with the secretary of state shall be deemed to be in full compliance with 3 V.S.A. § 843, and shall be accepted by the secretary of state, if filed with a certification by the secretary of human services that the rule is required to meet the purposes of this section.

Sec. 131. Office of economic opportunity

		Personal services		489,332
		Operating expenses		86,924
		Grants		9,198,110
			Total	9,774,366
	Source of funds
		General fund		1,004,950
		Federal funds		4,349,207
		Special funds		4,047,844
		Interdepartmental transfer		372,365
			Total	9,774,366

   (a) Of the above general fund appropriation, $500,000.00 shall be granted to community agencies for homeless assistance by preserving existing services. These funds may be granted alone or in conjunction with federal McKinney emergency shelter funds. Grant decisions shall be made with assistance from the coalition of homeless Vermonters.

Sec. 132. Office of child support services

		Personal services		6,096,719
		Operating expenses		3,411,704
			Total	9,508,423
	Source of funds
		General fund		964,111
		Federal funds		7,983,087
		Special funds		454,125
		Interdepartmental transfer		107,100
			Total	9,508,423

   (a) The establishment of two (2) new limited service classified positions - Microphotographer - is authorized in fiscal year 2002.

Sec. 133. Social and rehabilitation services - administrative and support services

		Personal services		1,761,606
		Operating expenses		223,690
			Total	1,985,296
	Source of funds
		General fund		890,896
		Federal funds		1,094,400
			Total	1,985,296

Sec. 134. Social and rehabilitation services - disability determination services

		Personal services		2,649,156
		Operating expenses		477,364
			Total	3,126,520
	Source of funds
		Federal funds		2,881,375
		Interdepartmental transfer		245,145
			Total	3,126,520

Sec. 135. Social and rehabilitation services - social services

		Personal services		14,906,163
		Operating expenses		2,062,366
		Grants		48,999,616
			Total	65,968,145
	Source of funds
		General fund		24,285,079
		Federal funds		40,573,419
		Special funds		1,109,647
			Total	65,968,145

   (a) The following positions are authorized to replace ongoing contractual services. The establishment of two (2) new classified positions - one (1) Grants Program Manager and one (1) Program Services Clerk - is authorized in fiscal year 2002.

Sec. 136. Social and rehabilitation services - Woodside juvenile rehabilitation center

		Personal services		1,983,000
		Operating expenses		259,384
			Total	2,242,384
	Source of funds
		General fund		2,211,783
		Interdepartmental transfer		30,601
			Total	2,242,384

Sec. 137. Social and rehabilitation services - child care services

		Personal services		1,679,867
		Operating expenses		305,623
		Grants		29,034,723
			Total	31,020,213
	Source of funds
		General fund		7,190,187
		Transportation fund		75,000
		Federal funds		22,923,026
		Special funds		832,000
			Total	31,020,213

   (a) The division of child care services shall not impose a cap on the number of subsidized child care scale slots without prior review of program utilization during the fiscal year 2002 budget adjustment process.

(b) Of the above appropriation $150,000 is to provide grants to support before and after school child care programs for school age children. Programs qualifying for grants must offer services year-round, opening by 6:30 a.m. and remaining open until 6:00 p.m.; programs must be in the process of obtaining NSACCA accreditation; programs must be established or operated in conjunction with a community’s public schools or municipality; programs must participate in the school age network in Vermont; programs must develop services collaboratively with existing services and resources, including coordination of funding streams, to assure maximum utilization of resources; programs must give consideration to transportation needs between the child care provider and the school in both the morning and afternoon. Collaboratives that support family childcare homes which specialize in serving school age children only should be encouraged and supported with fiscal incentives.

Sec. 138. [Omitted.]

Sec. 139. Developmental and mental health services - central office

		Personal services		2,159,254
		Operating expenses		612,550
			Total	2,771,804
	Source of funds
		General fund		1,294,268
		Federal funds		1,477,536
			Total	2,771,804

   (a) The following positions are authorized to replace ongoing contractual services. The establishment of two (2) new classified positions - Acute Care Manager - is authorized in fiscal year 2002.

Sec. 140. Developmental and mental health services - community mental health

		Personal services		2,168,668
		Operating expenses		338,170
		Grants		70,100,675
			Total	72,607,513
	Source of funds
		General fund		23,354,507
		Federal funds		42,063,814
		Special funds		5,290,820
		Interdepartmental transfer		1,898,372
			Total	72,607,513

   (a) Of the above appropriation, $3,826,570.00 shall be used for compensation increases for mental health service providers, with due regard to the lowest income employees. Such increases shall extend to contract workers in the community mental health provider network, including home providers.

   (b) Of the above appropriation, $385,000.00 shall be used for benefit increases for mental health service providers.

Sec. 141. Developmental and mental health services - developmental services

		Personal services		2,811,280
		Operating expenses		416,522
		Grants		77,704,841
			Total	80,932,643
	Source of funds
		General fund		30,437,405
		Federal funds		49,422,432
		Special funds		579,506
		Interdepartmental transfer		493,300
			Total	80,932,643

   (a) Of the above appropriation, $3,132,695.00 shall be used for compensation increases for developmental service providers, with due regard to the lowest income employees. Such increases shall extend to contract workers in the developmental service provider network, including home providers.

   (b) Of the above appropriation, $425,250.00 shall be used for benefit increases for developmental service providers.

Sec. 142. Developmental and mental health services - Vermont state hospital

		Personal services		8,857,425
		Operating expenses		795,234
		Grants		143,000
			Total	9,795,659
	Source of funds
		General fund		2,839,487
		Federal funds		6,811,172
		Special funds		145,000
			Total	9,795,659

Sec. 143. Aging and disabilities - administration and support

		Personal services		14,822,317
		Operating expenses		1,957,593
			Total	16,779,910
	Source of funds
		General fund		7,042,974
		Federal funds		8,394,918
		Special funds		491,000
		Interdepartmental transfer		851,018
			Total	16,779,910

   (a) The establishment of one (1) new exempt position - Attorney - is authorized in fiscal year 2002.

   (b) Personal care attendants are exempt from 21 V.S.A. § 342 and shall not be construed as state employees except for purposes of 21 V.S.A. chapters 9 and 17.

   (c) Of the above appropriation, at least $10,000.00 shall be expended by the department for the support of “The Independent”, an independent newsletter to provide information and education on aging and disabilities issues.

   (d) The state shall allocate the appropriation for the traumatic brain injured waiver for fiscal year 2002 in the following manner: rehabilitation program, 77 slots; long-term program, 12 slots. The number of long-term program slots may be increased by no more than 18 if matching funds are available to support the additional slots.

Sec. 144. Aging and disabilities - vocational rehabilitation

		Grants		5,042,367
	Source of funds
		General fund		1,579,195
		Federal funds		3,433,172
		Special funds		10,000
		Interdepartmental transfer		20,000
			Total	5,042,367

Sec. 145. Aging and disabilities - blind and visually impaired

		Grants		1,365,933
	Source of funds
		General fund		540,106
		Federal funds		705,827
		Special funds		120,000
			Total	1,365,933

Sec. 146. Aging and disabilities - division of advocacy and independent living

		Grants		11,903,377
	Source of funds
		General fund		3,989,837
		Transportation fund		522,000
		Federal funds		6,289,240
		Special funds		1,042,300
		Interdepartmental transfer		60,000
			Total	11,903,377

   (a) Notwithstanding 32 V.S.A. § 706, the department may transfer up to $250,000.00 in general funds for the elderly mental health initiative to the department of developmental and mental health services to maximize the use of Medicaid funds.

(b) On or before December 15, 2001, the commissioner of the department of aging and disabilities, in consultation with the Vermont Alzheimer’s commission, the Vermont probate judges association, the Vermont long-term care ombudsman and the Vermont senior citizens law project, shall report to the general assembly on the effectiveness of the office of public guardianship in meeting its statutory responsibilities under 14 V.S.A. § 3091 et seq. The report shall include, but need not be limited to, assessments and recommendations regarding caseload limits; appropriate staffing levels; acceptable waiting list levels; the appropriateness and limits of developing and utilizing volunteer guardians; alternative approaches to meeting the needs of clients; and the cost-effectiveness of the office of public guardian in delaying or avoiding institutionalization.

(c) The establishment of one (1) new classified position - Public Guardian - is authorized in fiscal year 2002.

(d) Of the above appropriation, $801,427.00 shall be utilized for the Homemaker/Home Care Program.

Sec. 147. Children’s trust fund

		Grants		287,748
	Source of funds
		General fund		109,748
		Federal funds		88,000
		Special funds		90,000
			Total	287,748

   (a) At least 65 percent of the state appropriation for the Children’s Trust Fund will be awarded for community-based program activities for the broad range of child abuse and neglect prevention activities.

Sec. 148. Governor’s commission on women

		Personal services		188,801
		Operating expenses		37,875
		Grants		5,000
			Total	231,676
	Source of funds
		General fund		206,676
		Special funds		5,000
		Interdepartmental transfer		20,000
			Total	231,676

Sec. 149. Retired senior volunteer program

		Grants		136,880
	Source of funds
		General fund		136,880

Sec. 150. Disabled and needy veterans

		Personal services		1,850
		Operating expenses		900
		Grants		29,884
			Total	32,634
	Source of funds
		General fund		32,634

Sec. 151. Vermont veterans’ home - care and support services

		Personal services		8,946,901
		Operating expenses		2,594,100
			Total	11,541,001
	Source of funds
		General fund		1,085,254
		Federal funds		2,852,405
		Special funds		7,603,342
			Total	11,541,001

   (a) The following positions are authorized to replace ongoing contractual services. The establishment of three (3) new classified positions - Housekeeper - is authorized in fiscal year 2002.

   (b) The establishment of six (6) new classified positions - Housekeeper - is authorized in fiscal year 2002.

Sec. 151a. Sec. 143 of No. 152 of the Acts of 2000 is amended to read:

Sec. 143. Vermont veterans’ home - care and support services

* * *

   (a) *[All]* Notwithstanding the provisions of Sec. 2 of No. 53 of the Acts of 1971 relating to holding and management of funds, all funds not already managed in accordance with subchapter 1 of chapter 7 of Title 32, except residents’ funds in subsection *[(c)]*(e) of this section, currently being administered by the Board of Trustees of the Vermont veterans’ home (hereafter called the Vermont veterans’ home) shall, as of the effective date of this act, be transferred to the state treasurer, to be credited to appropriate accounts established in compliance with subsection 401(a) of Title 32. Such funds may be expended by the Vermont veterans’ home upon submittal of vouchers to the commissioner of finance and management in compliance with section 463 of Title 32, and issuance of warrants pursuant to sections 461 and 465 of Title 32. *[Funds transferred pursuant to this section shall be administered pursuant to subchapter 5 of chapter 7 of Title 32 and interest earned by these funds shall be credited to the special fund.]*

(b) There is created a donations fund, to be administered pursuant to subchapter 5 of chapter 7 of Title 32. To this fund shall be credited those donations transferred to the state treasurer in subsection (a) of this section and any future donations to the Vermont veterans’ home with specific restrictions on their use. Interest both prospectively and retrospectively earned on the fund established pursuant to this *[section]* subsection shall be credited to the donations fund.

   (c) There is created a trustees’ fund, to be administered pursuant to subchapter 5 of chapter 7 of Title 32. To this fund shall be credited those donations transferred to the state treasurer in subsection (a) of this section and any future donations to the Vermont veterans’ home without specific restrictions on their use. The trustees’ fund shall be administered for the benefit of the Vermont veterans’ home or its residents, within the conditions of the Vermont veterans’ home charter and the Trenor W. Park deed. Interest both prospectively and retrospectively earned on the fund established pursuant to this subsection shall be credited to the trustees’ fund.

(d) The so-called “endowment” fund shall be treated as a trust fund from which the principal cannot be expended (a “nonexpendable” trust) until the composition of the fund can be determined, in consultation with the Office of the State Attorney General, by an auditor engaged by the Vermont veterans’ home. Such determination shall be made by October 1, 2001. Any “endowment” funds determined to be trust funds in accordance with law shall be designated as nonexpendable or expendable according to the terms and conditions of the respective trusts. Any “endowment” funds not determined to be trust funds shall be transferred to the donations or trustees’ funds established in subsections (b) and (c) of this section. Interest both prospectively and retrospectively earned on the “endowment” fund shall be credited to that fund. Interest earned on the trust funds designated following the determination in this subsection shall be credited to the trust funds and shall be considered expendable unless contravened by the terms and conditions of the respective trusts. *[(c)]*(e) Notwithstanding subchapter 1 of chapter 7 of Title 32, the Vermont veterans’ home is authorized to retain those funds wherein it is acting in a trustee capacity for residents of the Vermont veterans’ home. Establishing and maintenance of these accounts shall be pursuant to section 431 of Title 32.

   (*[d)]*(f) Prior gifts received and included in the transfer in subsection (a) of this section to the state treasurer, and not previously subjected to section 5 of Title 32, are hereby accepted. Notwithstanding subdivision 5(a)(3) of Title 32, the $1,000.00 limit for reporting pursuant to that subdivision shall be $5,000.00 as applied to the Vermont veterans’ home.

Sec. 152. Vermont association for blind and visually impaired, Inc.

		Grants		24,885
	Source of funds
		General fund		24,885

Sec. 153. Total human services				1,054,416,690
	Source of funds
		General fund		330,713,854
		Transportation fund		1,999,578
		Federal funds		585,722,764
		Special funds		104,911,714
		Tobacco fund		22,625,000
		Internal service funds		1,878,558
		Interdepartmental transfer		6,557,222
		Expendable trust		8,000
			Total	1,054,416,690

Sec. 154. Employment and training

		Personal services		19,378,377
		Operating expenses		7,899,762
		Grants		1,502,000
			Total	28,780,139
	Source of funds
		General fund		837,453
		Federal funds		24,201,686
		Special funds		130,000
		Interdepartmental transfer		3,611,000
			Total	28,780,139

Sec. 155. Total employment and training				28,780,139
	Source of funds
		General fund		837,453
		Federal funds		24,201,686
		Special funds		130,000
		Interdepartmental transfer		3,611,000
			Total	28,780,139

Sec. 156. Education - finance and administration

		Personal services		3,078,513
		Operating expenses		667,979
		Grants		11,100,000
			Total	14,846,492
	Source of funds
		General fund		2,361,228
		Federal funds		12,475,459
		Special funds		9,805
			Total	14,846,492

Sec. 157. Education - standards and assessment

		Personal services		2,736,656
		Operating expenses		368,842
		Grants		261,506
			Total	3,367,004
	Source of funds
		General fund		2,503,211
		Federal funds		819,121
		Special funds		44,672
			Total	3,367,004

Sec. 158. Education - education quality

		Personal services		6,310,144
		Operating expenses		2,061,930
		Grants		88,282,845
			Total	96,654,919
	Source of funds
		General fund		6,429,793
		Transportation fund		639,932
		Education fund		7,540,457
		Federal funds		79,981,188
		Special funds		1,010,285
		Interdepartmental transfer		1,053,264
			Total	96,654,919

   (a) The appropriations in this section shall be authorized notwithstanding sections 1564, 1565, 1566, and 1567 of Title 16.

Sec. 159. 16 V.S.A. § 1567(a) is amended to read:

§ 1567. OVERHEAD COSTS

   (a) In addition to tuition assistance provided under section 1561 of this title, assistance shall be paid to receiving districts in the amount of overhead costs calculated in accordance with this chapter for the school year two years prior to the year of payment. Where new construction or renovations in any fiscal year have resulted in a 25 percent or greater increase in the square footage of a technical center, the commissioner shall include the additional square footage in the calculation of overhead assistance for the year in which the newly constructed or renovated space is occupied. If the space is occupied after the first student attendance day for that year, the assistance shall be prorated accordingly.

Sec. 160. Education - Act 117 Cost Containment

		Personal services		986,344
		Operating expenses		39,656
		Grants		65,000
			Total	1,091,000
	Source of funds
		Federal funds		1,091,000

Sec. 161. Education - adult basic education

		Grants		3,449,321
	Source of funds
		General fund		2,589,321
		Federal funds		860,000
			Total	3,449,321

   (a) The department shall develop a system of standards and accountability for adult basic education and shall begin the implementation of such a system by the end of fiscal year 2002.

Sec. 162. Education - school-based anti-tobacco, alcohol and substance abuse programs

		Personal services		140,000
		Operating expenses		35,000
		Grants		750,000
			Total	925,000
	Source of funds
		Tobacco fund		925,000

   (a) The establishment of one (1) permanent classified position – Substance Abuse Prevention Coordinator - is authorized in fiscal year 2002.

   (b) The establishment of two (2) new classified positions – Regional Substance Abuse Prevention Coordinator – is authorized in fiscal year 2002.

   (c) The establishment of one (1) new classified position – Administrative Assistant – is authorized in fiscal year 2002.

Sec. 163. FUND APPROPRIATIONS AND TRANSFERS

   (a) There is appropriated in fiscal year 2002 from the general fund for transfer to the education fund the amount of $246,363,322.00.

(b) There is appropriated in fiscal year 2002, and each year thereafter, from the education fund to the commissioner of education $450,000.00 for the purpose of awarding grants to technical centers for up to three years to support innovative program development responding to emerging technologies and providing high-skill, high-wage employment.

(c) There is appropriated $50,000.00 in fiscal year 2002 from the general fund to the fiscal review panel established under 16 V.S.A. § 2974(e).

(d) There is appropriated in fiscal year 2002 from the general fund to the commissioner of education $17,000.00 for the purpose of civic education pursuant to Sec 158a of No. 62 of the Acts of 1999.

(e) In fiscal year 2003, there shall be appropriated and transferred from the general fund to the education fund the amount transferred in subsection (a) of this section, increased by 3.5 percent.

Sec. 163a. 32 V.S.A. § 5404 is amended by designating the existing provisions as subsection “(a)”, and by adding subsections (b), (c) and (d) to read:

   (b) Annually, on or before July 15, the clerk of a municipality, or the supervisor of an unorganized town or gore, shall transmit to the director in an electronic format as prescribed by the director: education and municipal grand list data, including exemption information and grand list abstracts; tax rates; and the total amount of taxes assessed in the town or unorganized town or gore. The data transmitted shall identify each parcel by a parcel identification number assigned under a numbering system prescribed by the director. Municipalities may continue to use existing numbering systems in addition to, but not in substitution for, the parcel identification system prescribed by the director. If changes or additions to the grand list are made by the listers or other officials authorized to do so after such abstract has been so transmitted, such clerks shall forthwith certify the same to the director.

   (c) If a town clerk or the legislative body fails without good cause, as determined by the commissioner, to transmit the grand list data or the tax data in a timely manner and in the format required by the director, the commissioner shall notify the secretary of transportation and the commissioner of education, who shall withhold all general and other aid payments owing to the municipality until the grand list information is filed as required by the director under subsection (b) of this section. Federal funds are exempt from withholding if the secretary or commissioner has an opinion of counsel that withholding would be a violation of federal law.

   (d) Municipalities shall include, on all property tax bills, the parcel identification number prescribed in subsection (b) of this section.

Sec. 163b. 32 V.S.A. § 6061 is amended to read:

§ 6061. DEFINITIONS

* * *

(6) “Property tax” means the amount of ad valorem taxes, exclusive of special assessments, interest, penalties, and charges for service, assessed *[in the]* *[fiscal year]* on real property in this state used as the claimant’s homestead.

(A) “Statewide property tax” means the tax assessed under chapter 135 of this title *[in the fiscal year]* on real property in this state used as the claimant’s homestead.

(B) “Local share property tax” means the tax assessed under section 428 or 511 of Title 16 *[in the fiscal year]* on real property in this state used as the claimant’s homestead.

* * *

      *[(10) “Fiscal year” means the municipal fiscal year which began in the taxable year.]*

Sec. 163c. 32 V.S.A. § 6066(a)(3) is amended to read:

(3) a claimant whose household income does not exceed $47,000.00 shall also be entitled to a credit against the claimant’s tax liability under chapter 151 of this title equal to the amount by which the property taxes for the municipal fiscal year which began in the taxable year upon the claimant’s homestead, adjusted under subdivisions (1) and (2) of this subsection, exceeds a percentage of the claimant’s household income for the taxable year as follows:

* * *

Sec. 163d. 32 V.S.A. § 6066a is amended to read:

§ 6066a. PAYMENT OF PROPERTY TAX ADJUSTMENTS *[(a) Preliminary tax adjustment.]* Annually, the commissioner shall pay to each claimant the excess, if any, of the statewide and local share property tax on the homestead for the fiscal year beginning in the calendar year in which the claim is filed over the adjusted property tax of the claimant for the fiscal year, as determined under section 6066(a)(1)*[,]* and (2) *[and (3)]* of this title. The payment shall be made by the latest of: *[July 1]* August 1, for claims filed by April 15; 45 days after the claim is filed, for claims filed after April 15; or 30 days prior to the first education property tax installment date for the claimant’s municipality in the fiscal year which begins in the calendar year in which the claim is filed under section 6068 of this title; or 25 days after the grand list has been transmitted in accordance with section 5404 (b) of this title. *[The preliminary tax adjustment amount determined under this subsection shall be the “subsection (a) amount.”]* *[(b) Final property tax adjustment. In order to correct the preliminary tax adjustment, so that it equals the full income sensitivity property tax adjustment due to the claimant for the prior year, a final property tax adjustment is made as follows:]* *[(1) A claimant shall also be entitled to a credit against his or her income tax liability under chapter 151 of this title. The amount of the credit shall be the excess, if any, of the subsection (a) amount for the current claim year over the subsection (a) amount paid in the prior year. If the credit exceeds the income tax liability, the difference shall be paid to the claimant, without interest.]*

      *[(2) The claimant shall pay to the commissioner the excess, if any, of the subsection (a) amount paid in the prior year over the subsection (a) amount for the current claim year. The payment under this subdivision shall be due on or before the due date for filing the Vermont income tax return, with extension, and shall be subject to the enforcement and collection provisions of chapter 151 of this title, and shall bear interest at the rate determined under section 3108 of this title from the due date for the income tax return, without]* *[extension. Any income tax refund due to a taxpayer shall be reduced by any amount owed by the taxpayer under this subdivision.]*

Sec. 163e. REPEAL

   (a) 32 V.S.A. §§ 3462 (reports by town clerk and appraisers); 4158 (transmission to director, changes, remedy); and 4341 (automatic extensions for filing grand lists) are repealed.

Sec. 163f. ADJUSTMENTS; TRANSITION

   (a) For fiscal year 2003, notwithstanding anything to the contrary in 32 V.S.A. §§ 6066 and 6066a, the amount of property tax adjustment available to claimants shall be paid by the commissioner to each claimant based upon the household income of the claimant for 2001, the grand list values of April 1, 2001, and the education property tax liability of the town school district for fiscal year 2003, and shall not be subject to reconciliation.

Sec. 163g. PREBATE APPROPRIATION

   (a) There is appropriated from the education fund to the department of taxes for fiscal year 2002 the amount of $1,700,000.00 for information system changes and programming required for the administration of Secs. 163a, 163b, 163c, 163d, 163e, and 163f of this act. This appropriation from the education fund shall be deemed to be in accord with the provisions of 16 V.S.A. § 4025, limiting uses and purposes of education fund expenditures.

Sec. 164. Education - small school grants

		Grants		4,632,403
	Source of funds
		Education fund		4,632,403

   (a) Notwithstanding 16 V.S.A. § 4015(a), the town of Athens is eligible for the small school support grant in the fiscal year 2001. This subsection shall be effective on passage.

Sec. 164a. 16 V.S.A. § 1546(b) is amended to read:

(b) A comprehensive high school shall charge and receive tuition pursuant to section 824 of this title. A comprehensive high school shall be a technical center for the purposes of receiving funding for grants per full-time equivalent student under 16 V.S.A. § 1561, for tryout classes under 16 V.S.A. § 1562, for equipment replacement under 16 V.S.A. § 1564, for incentive grants under 16 V.S.A. § 1566, and for reporting requirements under 16 V.S.A. § 1568 *[except that a comprehensive high school need not report direct and overhead costs]*. Funds received under this section shall be used for support of technical education programs within the comprehensive high school.

Sec. 164b. 16 V.S.A. § 1561 is amended to read:

§ 1561. TUITION REDUCTION

(a) For the purpose of reducing the amount of tuition charged to Vermont residents under section 1552 of this title, technical centers shall receive assistance as provided in this section. In this section,

(1) “Student” means a Vermont secondary student without a diploma regardless of age and regardless of whether the student is enrolled in a high school in Vermont; and

(2) “Full-time equivalent student” means the average of a Vermont school district’s three prior years’ full-time equivalent enrollment of students in the technical center.

(b) A technical center shall receive from the education fund for each full-time equivalent student sent from a school district within Vermont, 100 percent of the per equalized pupil general state support grant and an equivalent amount shall be subtracted from the amount due to the sending district under section 4011 of this title.

(c) *[Annually, each technical center shall receive from the education fund, a ]*Annually, the general assembly shall appropriate funds to pay for a supplemental assistance grant per full-time equivalent student. The amount of the grant shall be equal to *[$2,254,628.00 in 1998 dollars increased annually by the appropriate annual index for state and local government purchases of goods and services, and divided by the number of full-time equivalent students enrolled in all regional technical centers]* 40 percent of the per equalized pupil general state support grant for that year.

Sec. 164c. 16 V.S.A. § 1568(a) is amended to read:

(a) Annually, in accordance with a time line, format and process established by the state board by rule, each technical center shall report its *[direct and overhead]* costs and student enrollment, achievement and performance measures to the commissioner. Technical center financial accounts shall be kept separately from those of the host high school in accordance with rules adopted by the state board which shall establish clear delineation of relevant costs and revenues.

Sec. 164d. REPEAL

(a) 16 V.S.A. §§ 1522(8) and (9) (definitions of technical training “direct costs” and “overhead costs”) and 1567 (overhead costs) are repealed.

Sec. 165. Education - special education: formula grants

		Grants		63,980,005
	Source of funds
		Education fund		63,980,005

   (a) Notwithstanding the provisions of 16 V.S.A. § 2969 or any other provisions of law, the reimbursements and grants pursuant to 16 V.S.A. § 2967 for fiscal year 2002 costs incurred by school districts shall be paid partially from the fiscal year 2002 appropriation and partially from the fiscal year 2003 appropriation. The fiscal year 2002 appropriation will cover the final reimbursements for fiscal year 2001 with the remainder available for reimbursements for fiscal year 2002 grants and reimbursements. Funds distributed to school districts for fiscal year 2002 expenses but to which the school districts were not entitled based on final reports for fiscal year 2002 shall not be considered as part of the total expenditures for fiscal year 2002 under the 60 percent state funding provision of 16 V.S.A. § 2967, as limited by Sec. 10 of No. 117 of the Acts of 2000. Such funds held by local school districts shall be treated as expenditures in fiscal year 2003.

   (b) The determination of annual special education expenditure targets pursuant to Sec. 10 of No. 117 of the Acts of 2000 shall be made by the commissioner of education for the following fiscal year and announced as part of the determinations made in September and presented to the general assembly pursuant to 16 V.S.A. § 4027(a).

   (c) For the purpose of implementing Sec. 10 (a)(1) of No. 117 of the Acts of 2000, for fiscal year 2002, the annual special education expenditure target shall be set at 10.12 percent.

Sec. 165a. 16 V.S.A. § 4027 is amended to read:

§ 4027. DETERMINATION OF YIELD AMOUNT AND AMOUNTS DUE TO OR FROM THE EDUCATION FUND

* * *

(c) *[For purposes of this calculation, if, by June 1, any school district has failed to adopt a budget for the school year beginning the next July 1, the commissioner shall use the local education spending portion of the school district’s most recently adopted budget. If a union school district or joint contract district of which the school district is a member has failed to adopt a budget by June 1, the commissioner shall use the most recently adopted union or joint contract budget allocated according to the current year’s apportionment, to determine the assessment portion of local education spending. If a school district, union school district or joint contract district subsequently adopts a budget in a different amount,]*

   *[(1) a district which is due money from the fund shall receive the lesser of the amount due based on the former year’s budget or the amount due based on the actual budget voted; and]*

   *[(2) district which is required to pay money into the fund shall pay the greater of the amount due based on the former year’s budget or the amount due based on the actual budget voted.]*

(d) On or before*[,]* June 30, the commissioner of education shall inform each school district which *[has]*, by May 1, voted a budget with local education spending in excess of the general state support grant and for which no petition for reconsideration has been filed, how much it will owe to the education fund or how much it will receive from the fund. If a petition for reconsideration has been filed, or the district has not voted a budget by May 1, and subsequently votes a budget with local education spending in excess of the general state support grant, the commissioner shall inform the district how much it will owe to or receive from the fund within 10 days of receiving a report from the superintendent pursuant to subsection (e) of this section.

(e) Annually, on or before June 1, each superintendent shall report to the department of education, on a form prescribed by the commissioner, each local education budget *[adopted]* which was adopted by May 1 for the following fiscal year by the member districts of the supervisory union and for which no petition for reconsideration has been filed. A superintendent shall report a budget adopted following May 1, to the department of education, between 30 to 40 days following adoption, or, if a petition for reconsideration has been filed, within 10 days of final adoption of the budget.

Sec. 166. EDUCATION - SPECIAL EDUCATION; SUCCESS BEYOND SIX

   (a) Education funds of the appropriation for special education - formula grants, or other funds eligible to be used for matching federal funds - may be used by each supervisory union to participate in the success beyond six program. The purpose of the program is to expand local partnerships to enhance the educational opportunities of students who are at risk of failure in school. The services are to be supplied through contracts with community-based Medicaid providers. The form and substance of the contracts shall be established as part of the overall agreement for the implementation of the program to be executed between the commissioner of education and the secretary of human services.

Sec. 167. Education - state-placed students

		Grants		10,402,407
	Source of funds
		Education fund		10,402,407

Sec. 168. Education - capital debt service aid

		Grants		3,482,659
	Source of funds
		Education fund		3,482,659

Sec. 169. Education - transportation

		Grants		12,458,850
	Source of funds
		Education fund		12,458,850

Sec. 170. EDUCATION - EDUCATION GRANTS

   (a) There is appropriated from the education fund for fiscal year 2002 to the department of education $594,300,000.00 for education grants to school districts. The general state support grants under 16 V.S.A. § 4011, the standard mainstream block grant under 16 V.S.A. § 2961, and the essential early education grant under 16 V.S.A. § 2948(c) shall be included in this amount. Also included in this amount are funds to the department of education for fiscal year 2001 data corrections to education grants to school districts under 16 V.S.A. § 4030 and for a National Teacher of the Year Grant to Middlebury Union High School and a grant in the amount of $5,000.00 to the Rutland High School to defer costs incurred in the school band’s participation in the presidential inauguration of 2001.

Sec. 170a. Sec. 252 of No. 152 of the Acts of 2000 is amended to read:

Sec. 252. FY 2000 SURPLUS ONE-TIME APPROPRIATIONS

* * *

      (46) To the *[department of education]* Vermont state colleges for the *[establishment of a]* “Coming Home” endowment. $100,000

* * *

Sec. 170b. 16 V.S.A. § 4011(a) is amended to read:

(a) Annually, the general assembly shall appropriate funds to pay for a general state support grant for each equalized pupil and a portion of a general state support grant for each adult diploma student. In fiscal year 2002, the general state support grant for each equalized pupil shall be $5,448.00. For each following fiscal year, the general state support grant shall be increased by the most recent cumulative price index, as of December 1, for state and local government purchases of goods and services from fiscal year 2002 through the following fiscal year, as provided through the state’s participation in the New England Economic Project.

Sec. 170c. 16 V.S.A. § 2948(c) is amended to read:

(c) Each school district shall receive an essential early education grant each school year. Grants shall be distributed according to the estimated number of children from three through five years of age. The state board by rule shall encourage coordination of services and may set other terms of the grant. Each district shall be responsible for the remainder of the costs of providing necessary services under section 2956 of this title. Annually, for each following fiscal year, the essential early education grant shall be increased by the most recent cumulative price index, as of December 1, for state and local government purchases of goods and services from fiscal year 2002 through that following fiscal year, as provided through the state’s participation in the New England Economic Project.

Sec. 170d. REPEAL

(a) Sec. 24(a) of No. 60 of the Acts of 1997 (establishing the block grant), as amended in Sec. 100 of No. 71 of the Acts of 1998 and Sec. 32 of No. 49 of the Acts of 1999, is repealed as of July 1, 2002.

Sec. 171. EDUCATION - LOCAL SHARE PROPERTY TAX

   (a) There is appropriated from the education fund for fiscal year 2002 $39,500,000.00 or such other amount to be paid to districts adopting budgets with local education spending in excess of the general state support grant and that are able to raise less than the predictable yield amount. The sum of $36,000,000.00 from the education fund is allocated to fund the fiscal year 2002 predicted yield calculated pursuant to 16 V.S.A. § 4027.

Sec. 172. PREDICTED YIELD FOR FISCAL YEAR 2003 AND BEYOND

(a) There is hereby allocated $36,000,000.00 within the education fund that the commissioner shall utilize in calculating the fiscal year 2003 predictable yield.

   (b) It is the intent of the legislature that, barring further legislative action, the education fund contribution to the yield pool shall remain at $36,000,000.00. This shall enable the predictable yield to grow as grand list values grow.

Sec. 173. [Omitted.]

Sec. 174. State teachers’ retirement system

		Personal services		8,790,500
		Operating expenses		150,663
		Grants		20,446,282
			Total	29,387,445
	Source of funds
		General fund		20,446,282
		Special funds		8,941,163
			Total	29,387,445

Sec. 175. 16 V.S.A. § 1944(c)(12) is amended to read:

(12) Payment of a portion of the cost of health and medical benefits provided by section 1942(p) of this title for retired members shall be made from the pension accumulation fund. The board *[may]* shall pay up to the amount determined by the board to be equal to *[fifty percent (50%)]* eighty percent (80%) of the cost of the applicable standard plan for retired members. The board shall pay an equal dollar amount for eligible retirees regardless of the plan selected. All eligible retirees may select health plan coverage from a range of plans approved by the board. Retired members may authorize deductions to be made from their monthly retirement allowance for the balance of the cost of such benefits *[and the full cost of such benefits for dependents.]* for the retired members and their dependents. The board shall determine annually that part of the cost of the applicable standard plan in excess of fifty percent (50 percent) of the cost for retirees, allocate forty-one and one-half percent (41.5 percent) of that amount to active members, and adjust the members’ contribution rate accordingly. Periodically, the board shall approve the following:

   (A) a standard plan for retirees who are not yet eligible for Medicare, which plan shall provide first dollar coverage for subscribers;

   (B) a standard plan for retirees who are eligible for Medicare, which plan shall provide first dollar coverage for subscribers;

   (C) a range of plans that may be selected by retirees, including the standard applicable plans; and

   *[(D) the cost of health plan coverage to be paid from the fund.]*

   (D) for fiscal year 2002, the applicable standard plan shall not exceed the cost of the $250.00 comprehensive plan offered by the board.

Sec. 176. TAX DEPARTMENT - REAPPRAISAL AND LISTING PAYMENTS

   (a) The amount of $2,320,000.00 in education funds is appropriated in fiscal year 2002 to implement 32 V.S.A. § 4041(a), relating to payments to municipalities for reappraisal costs and 32 V.S.A. § 5405(f), relating to payments of $1.00 per grand list parcel.

Sec. 176a. 16 V.S.A. § 777D. is amended to read:

D. Authorization Proceedings

An interstate district shall authorize the incurring of debts to finance capital projects by a majority vote of the district passed at an annual or special district meeting. Such vote shall be taken by secret ballot after full opportunity for debate, and any such vote shall be subject to reconsideration and further action by the district at the same meeting or at an adjourned session thereof. As an alternative, an interstate district may provide in its articles of agreement that such a vote be conducted by Australian or official balloting under procedures as set forth in the articles of agreement, and that such vote be subject to any method of reconsideration, if any, the interstate district sets forth in the articles of agreement.

Sec. 177. Tax department - homestead property tax income sensitivity adjustments

		Grants		83,702,004
	Source of funds
		General fund		5,343,272
		Transportation fund		4,031,009
		Education fund		74,327,721
			Total	83,702,004

Sec. 178. Total general education and property tax support				1,213,079,831
	Source of funds
		General fund		287,103,431
		Transportation fund		4,670,941
		Education fund		815,094,502
		Federal funds		95,226,768
		Special funds		10,005,925
		Tobacco fund		925,000
		Interdepartmental transfer		1,053,264
			Total	1,213,079,831

Sec. 179. University of Vermont

		Grants		35,058,595
	Source of funds
		General fund		35,058,595

   (a) The commissioner of finance and management shall issue warrants to pay one-twelfth of the appropriation to the University of Vermont on or about the 15th of each calendar month of the year.

(b) Of the above appropriation, $340,000.00 shall be transferred to ESPCoR for the purpose of complying with state matching fund requirements necessary for the receipt of available federal or private funds, or both.

Sec. 180. University of Vermont - Morgan horse farm

		Grants		1
	Source of funds
		General fund		1

Sec. 181. Vermont public television

		Grants		613,336
	Source of funds
		General fund		613,336

Sec. 182. Vermont state colleges

		Grants		20,115,985
	Source of funds
		General fund		20,115,985

   (a) The commissioner of finance and management shall issue warrants to pay one-twelfth of the appropriation to the Vermont state colleges on or about the 15th of each calendar month of the year.

(b) Of the above appropriation, $100,000.00 shall be reserved for use as the state’s fiscal year 2002 contribution toward the growth of the endowment fund for the Vermont state colleges. The state’s funds are to serve as a challenge match to enhance the state colleges’ ability to secure endowment contributions from alumni and other interested parties. The intent is that the fiscal year 2002 appropriation will be the first of five annual appropriations through fiscal year 2006 totaling $500,000.00. The conditions of this challenge match are that the state colleges are required to raise three dollars for each dollar appropriated by the state. A method for accounting for the state colleges’ share has been agreed to between the state colleges and the commissioner of finance and management. Transfers to the state colleges’ endowment fund shall be under the condition that only the interest accruing to the fund will be available for purposes as designated by the board of trustees of the state colleges. By June 30, 2006, any remaining state appropriations designated for the state colleges’ endowment fund that have not been matched by the state colleges shall revert to the general fund. The funds appropriated for this purpose shall be retained by the state.

(c) Of the above appropriation, $393,000.00 shall be transferred to the Vermont Manufacturing Extension Center for the purpose of complying with state matching fund requirements necessary for the receipt of available federal or private funds, or both.

Sec. 183. Vermont state colleges - practical nursing schools

		Grants		578,232
	Source of funds
		General fund		578,232

Sec. 184. Vermont interactive television

		Grants		868,947
	Source of funds
		General fund		868,947

Sec. 185. Vermont student assistance corporation

		Grants		15,841,811
	Source of funds
		General fund		15,841,811

   (a) Not less than 100 percent of grants shall be used for direct student aid.

Sec. 186. New England higher education compact

		Operating expenses		77,809
	Source of funds
		General fund		77,809

Sec. 186a. Education commission of the states

		Operating expenses		39,600
	Source of funds
		General fund		39,600

Sec. 187. Total higher education and other				73,154,716
	Source of funds
		General fund		73,154,716

Sec. 188. Natural resources - agency of natural resources - administration,

management and planning

		Personal services		2,619,783
		Operating expenses		1,434,578
		Grants		40,000
			Total	4,094,361
	Source of funds
		General fund		2,227,105
		Federal funds		103,500
		Special funds		884,934
		Interdepartmental transfer		878,822
			Total	4,094,361

Sec. 189. Connecticut river watershed advisory commission

		Grants		40,500
	Source of funds
		General fund		25,000
		Federal funds		15,500
			Total	40,500

Sec. 190. Citizens’ advisory committee on Lake Champlain’s future

		Grants		10,000
	Source of funds
		General fund		10,000

Sec. 191. Natural resources - state land local property tax assessment

		Operating expenses		1,215,783
	Source of funds
		General fund		691,468
		Transportation fund		262,815
		Interdepartmental transfer		261,500
			Total	1,215,783

   (a) An amount of up to $15,000.00 of the available carry forward funds from the fiscal year 2000, natural resources - state local property tax assessment appropriation, shall be available for transfer to the use tax reimbursement fund for payment in accordance with Sec. 40(a) of this act.

Sec. 192. Environmental conservation - commissioner’s office

		Personal services		974,463
		Operating expenses		97,922
			Total	1,072,385
	Source of funds
		General fund		374,954
		Federal funds		536,191
		Special funds		161,240
			Total	1,072,385

Sec. 193. Environmental conservation - environmental assistance

		Personal services		1,256,431
		Operating expenses		172,285
		Grants		25,000
			Total	1,453,716
	Source of funds
		General fund		405,135
		Federal funds		247,318
		Special funds		801,263
			Total	1,453,716

Sec. 194. Environmental conservation - office of air and waste management

		Personal services		4,694,767
		Operating expenses		1,114,103
		Grants		508,500
			Total	6,317,370
	Source of funds
		General fund		406,554
		Transportation fund		39,320
		Federal funds		2,486,185
		Special funds		3,235,311
		Interdepartmental transfer		150,000
			Total	6,317,370

Sec. 195. Environmental conservation - office of water programs

		Personal services		9,623,351
		Operating expenses		1,213,897
		Grants		2,711,345
			Total	13,548,593
	Source of funds
		General fund		3,620,274
		Transportation fund		177,264
		Federal funds		6,711,178
		Special funds		2,749,877
		Interdepartmental transfer		290,000
			Total	13,548,593

   (a) The establishment of two (2) new classified positions – one (1) Environmental Scientist III and one (1) Environmental Analyst III - is authorized in fiscal year 2002.

Sec. 196. Environmental conservation - various environmental special funds

		Grants		4,838,362
	Source of funds
		Special funds		4,838,362

Sec. 197. Fish and wildlife - support and field services

		Personal services		8,719,408
		Operating expenses		4,295,870
		Grants		237,450
			Total	13,252,728
	Source of funds
		Fish and wildlife fund		12,702,728
		Interdepartmental transfer		550,000
			Total	13,252,728

   (a) The establishment of five (5) new classified positions - Fish and Wildlife Warden - is authorized in fiscal year 2002.

Sec. 198. Fish and wildlife - land acquisition

		Operating expenses		66,785
	Source of funds
		Fish and wildlife fund		66,785

Sec. 199. Fish and wildlife - watershed improvement

		Grants		45,000
	Source of funds
		Fish and wildlife fund		45,000

Sec. 200. Fish and wildlife - wildlife management area projects

		Operating expenses		93,000
	Source of funds
		Fish and wildlife fund		55,500
		Fish and wildlife/federal funds		37,500
			Total	93,000

Sec. 201. Fish and wildlife - conservation

		Operating expenses		667,000
	Source of funds
		Fish and wildlife/federal funds		667,000

Sec. 202. Fish and wildlife - recovery planning

		Personal services		103,870
	Source of funds
		Fish and wildlife fund		103,870

Sec. 203. Forests, parks and recreation - administration

		Personal services		656,956
		Operating expenses		317,239
		Grants		1,041,300
			Total	2,015,495
	Source of funds
		General fund		721,995
		Federal funds		945,000
		Special funds		348,500
			Total	2,015,495

   (a) One-half of federal land and water conservation funds (LWCF) received by the state shall be allocated for competitive grants for recreation projects at the community level.

Sec. 204. Forests, parks and recreation - lands administration

		Personal services		332,230
		Operating expenses		39,000
			Total	371,230
	Source of funds
		General fund		371,230

Sec. 205. Forests, parks and recreation - forest highway maintenance

		Personal services		2,539
		Operating expenses		404,000
		Grants		200,000
			Total	606,539
	Source of funds
		Transportation fund		606,539

Sec. 206. Forests, parks and recreation - forestry

		Personal services		3,919,753
		Operating expenses		584,100
		Grants		380,000
			Total	4,883,853
	Source of funds
		General fund		3,004,653
		Transportation fund		21,500
		Federal funds		1,184,000
		Special funds		386,700
		Interdepartmental transfer		282,000
		Expendable trust		5,000
			Total	4,883,853