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ACT NO. 63


Omnibus Appropriations Act; Fiscal year 2002

This act is the Fiscal Year 2002 Omnibus Appropriations Act for the support of state government for fiscal year 2002. For details and summaries of the amounts appropriated, reference should be made to the explanatory documents and letter of intent prepared by the Joint Fiscal Office.

In addition to appropriating and conditioning the expenditure of funds, this act also makes significant amendments to some substantive laws and programs in the following manner:

Alcoholic beverages, furnishing to minors. Sec. 65a of the act amends 7 V.S.A. § 658(c) to provide that an employee of a first or third class licensee or of a state-contracted liquor agency is subject to the same penalties for serving alcohol to a minor during a compliance check conducted by law enforcement officers as would be applied to an employee of a second class licensee. These are a civil penalty for a first offense or for a second offense that occurs more than one year after the first offense. Also, the employee may plead certain affirmative defenses.

Opiate Addiction Treatment Provisions. Sec. 115a amends current law relating to the treatment of opiate addiction by permitting the Commissioner of Health to approve up to five treatment programs operated by hospitals or medical schools but located outside the hospital or medical school, provided the program is co-located with other programs and is not located in “isolated” community settings. Sec. 115b requires “reasonable, cost-based reimbursement rates” for opiate addiction treatment programs.

Pharmacy Best Practices and Cost Control program. Sec. 123 directs the Department of PATH to establish a Pharmacy Best Practices and Cost Control program authorizing PATH to contract with a Pharmacy Benefit Manager (PBM) to develop a “preferred list” or formulary for prescription drugs, with utilization review, including prior authorization procedures. The Best Practices and Cost Control program shall be implemented for Medicaid and Vscript beneficiaries, and may be implemented for any public or private plan within or outside the state that agrees to participate in the program, and for individual Vermonters without adequate public or private coverage for prescription drugs. The program’s consumer protections permit the patient’s doctor to require the dispensing of a higher cost drug if the lower cost drug is not effective or may result in adverse reactions. Special utilization rules are retained for HIV/AIDS patients.

Generic Drug Substitution laws. Sec. 124 amends Chapter 91 of Title 18, Vermont’s generic drug substitution law, to require generic substitution unless the brand-name drug is medically necessary, or unless the patient agrees to pay additional costs.

Home Heating Fuel Assistance. Secs. 129a, 129b, 129c, 129d and 129e amend provisions of Chapter 26 of Title 33, the Home Heating Fuel Assistance program, to allow the Secretary of AHS to engage in cost-effective purchasing practices, such as preseason fuel purchases, and to expend funds in anticipation of federal receipts for the purpose; and direct that a portion of the amounts raised by the fuel gross receipts tax imposed by 33 V.S.A. § 2503 be used for energy assistance.

Act 60, Income sensitivity payments. Secs. 163a – 163e of the act revise the method and payment dates for property tax adjustments (income sensitivity) under Act 60. Beginning in the summer of 2003, the new method will allow a single payment, without the need for a later reconciliation or “true-up” in the income tax return. In the summer of 2002, a transition-year payment will be made to claimants, and this payment will also not require any “true-up”. When the new system begins in July 2003 (FY04), property tax adjustment payments will be based on the current year’s education property tax liability of the town school district, the grand list values for the current year, and the household income of the claimant for the prior tax year. This new prebate system requires changes in how towns report their grand list data and tax rates to Property Valuation and Review (PVR), including a requirement that towns report information using a new statewide system of uniform parcel identification. PVR is required under this act to create the uniform parcel I.D. system in time for the April 2002 grand lists.

Act 60, Valuation appeals. Secs. 279 and 279a adjust a municipality’s education property tax liability if the education grand list of the municipality is reduced by at least one percent as a result of an appeal. These provisions take effect from passage, and apply only to appeals from grand lists of April 1, 2001 and thereafter. Sec. 279b, however, directs the Commissioner of Education to make certain compensatory payments to Stowe and Rutland Town for appeals resulting in changes in valuation in education tax liability prior to that effective date.

Studies and reports. The act also directs that the following studies be undertaken:

Sec. 13a. A PILOT funding requirement study by the Secretary of Administration and the Commissioner of Buildings and General Services relating to the fee-for-services program and PILOT funding obligations.

Sec. 13b. A Review of the Department of Buildings and General Services management and operations by the chairs of the Committees on Appropriations and Institutions and the Secretary of Administration.

Sec. 40a. A Study on land use implications of tax policy changes by the Legislative Council.

Sec. 97. A Study of Partnerships for children, families and individuals by the Secretary of Human Services, the Commissioner of Education and the President of UVM for improving the effectiveness of state and local health, human services, and education programs.

Sec. 116. A Commission on Tobacco, Alcohol and Substance Abuse Addiction to make recommendations for a coordinated, effective and adequately-funded system for prevention and treatment of addictions.

Sec. 280c. A Joint Legislative Study Committee on Vermont Teens and Youth Services composed of six legislators to assess the adequacy of services and programs provided for Vermont youth.

Sec. 280d. A Drug intervention docket for District and Family Courts to be planned by the Court Administrator and the Secretary of Services and presented to committees of the General Assembly by November 1, 2001.

Sec. 281. A Committee on Charter Schools to review and report on the operations of charter schools in other states and their benefits to children in Vermont.

Effective Date: Generally, July 1, 2001.