Journal of the Senate

________________

Wednesday, May 19, 2004

The Senate was called to order by the President.

Devotional Exercises

A moment of silence was observed in lieu of devotions.

Pledge of Allegiance

The President then led the members of the Senate in the Pledge of Allegiance.

Joint Resolution Adopted in Concurrence

J.R.H. 76.

Joint resolution originating in the House of the following title was read and adopted in concurrence and is as follows:

Joint resolution urging the federal government not to reduce funding for federal housing support programs nor convert the Section 8 housing voucher program into a block grant.

Whereas, affordable housing is a critical component of both a healthy economy and healthy community, and

Whereas, the availability of affordable housing has become a critical problem for Vermonters of modest means, and

Whereas, there is a great need to use scarce public resources to increase the supply of affordable housing and improve the condition of Vermont’s existing housing stock, and

Whereas, the Section 8 housing voucher program has been a cornerstone of federal housing policy since its creation under President Nixon 30 years ago, and

Whereas, 6,079 Vermont households are able to afford their homes only because of federal Section 8 vouchers, and

Whereas, the federal budget deficit has created severe pressures on the budget of the U.S. Department of Housing and Urban Development (HUD), and

Whereas, HUD has proposed funding cuts to the Section 8 voucher program that will potentially result in 737 Vermont households losing assistance in 2005, which represents approximately 12 percent of the total Section 8-funded households in Vermont, and

Whereas, 63 percent of Vermont’s Section 8 recipients are elderly or disabled and live on fixed incomes, 24 percent are working families, and only 13 percent receive Temporary Aid to Needy Families, and

Whereas, cuts of this size would cost Vermont renters, homeowners, and landlords $4.3 million in federal assistance in FY 05 alone, and

Whereas, HUD has also proposed turning its Section 8 voucher program into a block grant program, which would decrease future federal housing support to the state, and

Whereas, were the proposed Section 8 reduction to take effect, in the year 2009, an estimated 1,769 Vermont households, or 29 percent of the state's total Section 8 recipients would be removed from the program, and

Whereas, administrative reductions beyond those proposed in the funds Section 8 recipients receive, and averaging an estimated 45 percent statewide will cripple the capacity of Vermont’s 11 public housing authorities to serve the poorest Vermonters, and

Whereas, the state of Vermont lacks the fiscal capacity to absorb these significant reductions without compromising its ability to fund other important housing and public needs, and

Whereas, the loss of these federal funds will result in an increase in homelessness among Vermont’s most vulnerable families, seniors, and people with disabilities, and

Whereas, this result is unacceptable and contravenes the federal government’s requirement that Vermont plans to end homelessness within 10 years, and

Whereas, an increase in homelessness will exacerbate pressures on the state’s budget, especially that of the Agency of Human Services, and

Whereas, HUD's block grant proposal also eliminates many fundamental protections for those receiving Section 8 assistance, including elimination of the standard by which households pay no more than 30 percent of their income for their housing costs, elimination of policies that target assistance to those most in need, and elimination of the fair market rent standard, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly thanks Vermont’s Congressional Delegation for its past efforts on behalf of preserving the Section 8 program and urges it to continue to do everything within its power to prevent the proposed reductions to Section 8 and its conversion to a block grant program, and be it further

Resolved:  That the General Assembly requests the National Associations of State Legislatures to urge Congress to reject all proposed cuts in Section 8 appropriations levels and the proposal to convert Section 8 into a block grant program, and be it further

Resolved:  That the General Assembly urges the governor to communicate to U.S. Department of Housing and Urban Development Secretary Alphonso Jackson the state of Vermont’s opposition to these funding cuts and other changes to the Section 8 program, and be it further

Resolved:  That the General Assembly also urges the governor to work through the New England Governors’ Conference and the National Governors’ Association to assure that housing programs vital to Vermonters, especially the Section 8 program, and other critical U.S. Department of Housing and Urban Development grant programs, including Community Development Block Grants and the HOME program, are not harmed in the federal budget process and that Vermonters continue to receive at least the current level of service from the department’s programs, and be it further

Resolved:  That the Secretary of State be directed to send a copy of this resolution to the governor, U.S. Secretary of Housing and Urban Development Jackson, and to the members of the Vermont Congressional Delegation.

Senate Resolution Adopted

Senate resolution of the following title was offered, read and adopted, and is as follows:

By Senators Collins and Kittell,

S.R. 32.  Senate resolution urging the province of Quebec to complete construction of highway 35 between the Vermont-Quebec border and Iberville, Quebec.

Whereas, it is important for the purposes of regional economic development that a safe, fast, and completed highway link exist between the cities of Boston and Montreal, and

Whereas, it is in the common economic interest of both the state of Vermont and the province of Quebec that, in the event of a terrorist attack, there exist a border crossing for the passage of goods and individuals other than the crossing at Lacolle, Quebec, and

Whereas, the highway link between Boston and Montreal is primarily a limited access highway, and

Whereas, the Vermont segment of the highway, designated as Interstate 89, is complete, and the state of Vermont has assumed the responsibility for maintaining this road, and

Whereas, the segment of the Boston to Montreal highway located between the international border at Swanton, Vermont and Iberville, Quebec is a dangerous three‑lane road designated as R-133, and

Whereas, R-133 has been the site of many automobile accidents involving Americans and some of these have involved fatalities, and

Whereas, from Iberville north to the city of Montreal there exists a limited access highway designated as highway 35 that is safe and fast, and

Whereas, it is imperative for reasons of economic development and motorists’ personal safety that highway 35 be completed from the international border at Swanton to Iberville, and

Whereas, the province of Quebec must recognize the urgency of completing highway 35, now therefore be it

Resolved by the Senate:

That this legislative body urges Jean Rioux, a member of the Quebec National Assembly representing Iberville riding to continue his effort to secure the necessary funding for the completion of highway 35, and be it further

Resolved:  That the Secretary of the Senate be directed to send a copy of this resolution to Quebec Premier Jean Charest in Quebec City.

Proposals of Amendment; Third Reading Ordered

H. 754.

Senator Mullin, for the Committee on Government Operations, to which was referred House bill entitled:

An act relating to the creation of a fire safety division within the department of public safety.

Reported recommending that the Senate propose to the House to amend the bill as follows:

First:  In Sec. 11, in the last sentence, by striking out the date: “October 1, 2004” and inserting in lieu thereof the date: July 1, 2004

Second:  In Sec. 14, subsection (a), by striking out the second sentence in its entirety and inserting in lieu thereof a new second sentence to read as follows: The task force shall solicit input from local officials, fire safety officials, firefighters, the community of regulated contractors, real estate developers, building owners, the access community, the bed and breakfast and lodging community, community development officials, downtown organizations, historic preservation interests, the petroleum industry, the propane industry, the natural gas utility, the boiler industry, the plumbing industry, the affordable housing community, and any other person the task force deems appropriate.

Third:  In Sec. 14, subsection (a), by striking out subdivision (4) in its entirety and inserting in lieu thereof a new subdivision (4) to read as follows:

(4)  a representative of the Vermont league of cities and towns;

Fourth:  In Sec. 15 (Effective Date) in subdivision (2), by striking out the date: “October 1, 2004” and inserting in lieu thereof the date:  July 1, 2004

And that the bill ought to pass in concurrence with such proposals of amendment.

Senator Shepard, for the Committee on Finance, to which the bill was referred, reported the bill without recommendation.

Senator Gossens, for the Committee on Appropriations, to which the bill was referred, reported recommending that the bill be amended as recommended by the Committee on Government Operations with the following amendments thereto:

First:  In Sec. 11, in the second sentence, by striking out the figure “$70,000” and inserting in lieu thereof the figure  $93,000

Second:  In Sec. 14, subsection (a), at the end of the subsection by adding a new subdivision (16) to read as follows:

(16)  a representative of the plumbing and heating industry.

And that the bill ought to pass in concurrence with such proposals of amendment.

Thereupon, the bill was read the second time by title only pursuant to Rule 43, and the recommendation of proposal of amendment of the Committee on Government Operations was amended as recommended by the Committee on Appropriations.

Thereupon, the proposals of amendment recommended by the Committee on Government Operations, as amended, were agreed to and third reading of the bill was ordered.

Proposals of Amendment; Consideration Interrupted

H. 784.

Senator Cummings, for the Committee on Finance, to which was referred House bill entitled:

An act relating to income tax.

Reported recommending that the Senate propose to the House to amend the bill by striking out all after the enacting clause and inserting in lieu thereof the following:

* * * Corporate Income Tax and Other Corporate Taxes * * *

Sec. 1.  STATEMENT OF INTENT

In recognition of the fact that corporate business is increasingly conducted on a national and international basis, it is the intent of the general assembly to adopt a unitary combined system of income tax reporting for corporations, and as an integral part of this proposal, to lower the corporate income tax rates.  Vermont’s separate accounting system is inadequate to measure accurately the income of a corporation with non-Vermont affiliates and creates tax disadvantages for Vermont corporations which compete with multistate and multinational corporations doing business in Vermont.  It is the intent of the general assembly, in adopting a unitary combined reporting system, to put all corporations doing business in Vermont on an equal income tax footing, and with the revenue from the expanded and more accurate tax base, to lower Vermont’s corporate income tax rates.

Sec. 2.  32 V.S.A. § 5811 is amended to read:

§ 5811.  DEFINITIONS

The following definitions shall apply throughout this chapter unless the context requires otherwise:

* * *

(18)  “Vermont net income” means, for any taxable year and for any corporate taxpayer, :

(A)  the taxable income of the taxpayer for that taxable year under the laws of the United States, without regard to Section 168(k) of the Internal Revenue Code, and excluding income which under the laws of the United States is exempt from taxation by the states, :

(A)(i)  increased by:

(I)  the amount of any deduction for state and local taxes on or measured by income, franchise taxes measured by net income, franchise taxes for the privilege of doing business and capital stock taxes; and

(B)(II)  to the extent such income is exempted from taxation under the laws of the United States by the amount received by the taxpayer on and after January 1, 1986 as interest income from state and local obligations, other than obligations of Vermont and its political subdivisions, and any dividends or other distributions from any fund to the extent such dividend or distribution is attributable to such Vermont state or local obligations.  However, “Vermont net income” shall not include; and

(ii)  decreased by:

(I)  the “gross-up of dividends” required by the federal Internal Revenue Code to be taken into taxable income in connection with the taxpayer’s election of the foreign tax credit or ; and

(II)  the amount of income which results from the required reduction in salaries and wages expense for corporations claiming the Targeted Job or WIN credits.

(B)  In the case of an “electing small business corporation” (“Subchapter S Corporation”) under the laws of the United States, “Vermont net income” shall include only the Vermont net income of the corporation (as defined in this section) which is taxable to the corporation under the provisions of the Internal Revenue Code.

(C)  For a taxable corporation that is a member of an affiliated group and that is engaged in a unitary business with one or more other members of that affiliated group, “Vermont net income” is the allocable share of the combined net income of the group.

* * *

(22)  “Affiliated group” means a group of two or more corporations in which more than 50 percent of the voting stock of each member corporation is directly or indirectly owned by a common owner or owners, either corporate or noncorporate, or by one or more of the member corporations, but shall exclude overseas business organizations or corporations taxable under section 6014 of Title 8.

(23)  “Unitary business” means one or more related business organizations engaged in business activity both within and without the state among which there exists a unity of ownership, operation, and use; or an interdependence in their functions.

(24)  “Overseas business organization” means a business organization that ordinarily has 80 percent or more of its payroll and property outside the 50 states and the District of Columbia.

Sec. 3.  32 V.S.A. § 5832 is amended to read:

§ 5832.  TAX ON INCOME OF CORPORATIONS

A tax is imposed for each calendar year, or fiscal year ending during that calendar year, upon the income earned or received in that taxable year by every taxable corporation, such tax being the greater of

(1)  an amount determined in accordance with the following schedule:

Vermont net income of the                

corporation for the taxable

year allocated or appor-

tioned to Vermont under

section 5833 of this title                    Tax

       0-10,000.00                                7.00% 6.00%

   $ 10,001.00-25,000.00                   $700.00 plus 8.10% of the excess

over $10,000.00

$600.00 plus 7.0% of the excess over

$10,000.00

       25,001.00-250,000.00               $1,915.00 plus 9.20% of the excess

over $25,000.00

$1,650.00 plus 8.75% of the excess over

$25,000.00

     250,001.00 and over                   $22,615.00 plus 9.75% of the

excess over $250,000.00

$19,688.00 plus 8.90% of the excess over

$250,000.00;

or

* * *

Sec. 4.  32 V.S.A. § 5832 is amended to read:

§ 5832.  TAX ON INCOME OF CORPORATIONS

A tax is imposed for each calendar year, or fiscal year ending during that calendar year, upon the income earned or received in that taxable year by every taxable corporation, such tax being the greater of

(1)  an amount determined in accordance with the following schedule:

Vermont net income of the corporation

for the taxable year allocated or appor-

tioned to Vermont under section 5833

of this title                                           Tax

                    0-10,000.00                     6.00%

   $ 10,001.00-25,000.00                     $600.00 plus 7.0% of the excess over

                                                            $10,000.00

    25,001.00-250,000.00 and over      $1,650.00 plus 8.75% 8.5% of the

                                                            excess over $25,000.00;

250,001.00 and over $19,688.00 plus 8.90% of the excess over

$250,000.00

or

* * *

Sec. 5.  32 V.S.A. § 5833(a) is amended to read:

(a)  If the income of a taxable corporation is derived from any trade, business, or activity conducted entirely within this state, the Vermont net income of the corporation shall be allocated to this state in full. If the income of a taxable corporation is derived from any trade, business or activity conducted both within and without this state, the amount of the corporation’s Vermont net income which shall be apportioned to this state, so as to allocate to this state a fair and equitable portion of that income, shall be determined by multiplying that Vermont net income by the arithmetic average of the following factors, with the sales factor described in subdivision (3) double‑weighted:

* * *

Sec. 6.  REPEAL

32 V.S.A. § 5836(e) (bank franchise tax limitation by federal taxable income) is repealed upon passage of this act, and no limit on bank franchise tax shall be available based on federal taxable income for a corporate taxable year ending on or after the effective date of this act.

Sec. 7.  32 V.S.A. § 5862(d) is added to read:

(d)  A taxable corporation which is part of an affiliated group engaged in a unitary business shall file a group return containing the combined net income of the affiliated group and such other informational returns as the commissioner shall require by rule.

Sec. 8.  REPEAL

32 V.S.A. § 5837 (limiting corporate income tax on holding companies to minimum tax) is repealed for taxable years beginning on or after January 1, 2006.

Sec. 9.  REPEAL

Subchapter 3 of chapter 211 of Title 32 (franchise tax on car and transportation companies) is repealed for taxable years beginning on or after January 1, 2006.

Sec. 10.  32 V.S.A. § 8522(c) is amended to read:

(c)  For any taxable year, a taxpayer shall give notice of its election to pay the tax imposed by this section by filing a quarterly gross receipts tax return no later than 25 days following the last day of the third month of the taxable year. Once made, an election shall remain in effect for at least three full taxable ears. No election to pay the tax imposed by this section shall be made by a taxpayer that did not make the election in the previous year.

* * * Amusement Machines * * *

Sec. 11.  REPEAL

Chapter 201 of Title 32 (amusement machines) is repealed.

Sec. 12.  32 V.S.A. § 9771 is amended to read:

Except as otherwise provided in this chapter, there is imposed a tax on retail sales in this state.  The tax shall be paid at the rate of six percent of the sales price charged for the following:

(1)  Tangible personal property sold at retail in this state.

* * *

(4)  Admission to places of amusement, including athletic events, exhibitions, dramatic and musical performances, motion pictures, golf courses and ski areas, and access to cable television systems or other audio or video programming systems that operate by wire, coaxial cable, lightwave, microwave, satellite transmission, or by other similar means, and access to any game or gaming or amusement machine, apparatus or device, excluding video game, pinball, musical, vocal or visual entertainment machines which are operated by coin, token or bills.

* * *

* * * Taxation of Lottery Prizes * * *

Sec. 13.  REPEAL

31 V.S.A. § 664 and § 674(s) (lottery prize income tax exemption) are repealed for taxable years beginning on or after January 1, 2005.

Sec. 14.  32 V.S.A. § 5823(b) is amended to read:

(b)  For any taxable year, the Vermont income of a nonresident individual, estate or trust is the sum of the following items of income to the extent they are required to be included in the adjusted gross income of the taxpayer for the taxable year:

* * *

(6)  Proceeds from any Vermont state lottery, tri-state lottery or multijurisdictional lottery ticket paid to a person who purchased the ticket in Vermont, including payments received from a third party for the transfer of the rights to future proceeds related to the ticket, and the commissioner may require withholding of any taxes due to the state under this subdivision from payments of lottery proceeds.

* * * Streamlined Sales Tax * * *

Sec. 15.  24 V.S.A. § 138(a) is amended to read:

§ 138.  LOCAL OPTION TAXES

* * *

(2)  a municipality opting to impose a local option tax may do so prior to July 1, 1998 to be effective beginning January 1, 1999, and anytime after December 1, 1998 a local option tax shall be effective beginning on the next tax quarter following 30 90 days’ notice to the department of taxes of the imposition; and all authority to opt to impose a local option tax under this section shall terminate September 1, 2007, and all authority to impose a local option tax shall terminate on December 31, 2008; and

* * *

Sec. 16.  32 V.S.A. § 9701(20), (22), and (29) are amended to read:

(20)  Vermont service address: means the location in Vermont of communications services equipment from which the telecommunications services are originated or at which communications services are received by a purchaser.  In the event this may not be a defined location, as in the case of maritime systems, air-to-ground systems and the like, Vermont service address shall mean the location in Vermont of a taxpayer’s primary use of the communications services equipment as defined by telephone number authorization code, or location in this state where bills are sent. In the case of charges for mobile telecommunications services, Vermont service address shall mean the location in Vermont of the customer’s place of primary use.

(22)  Place of primary use: means place of primary use as defined in 4 U.S.C. § 124.

(29)  Drug: means a compound, substance, or preparation, and any component of a compound, substance, or preparation, including blood, blood plasma, insulin, and oxygen, but not including food and food ingredients, dietary supplements, alcoholic beverages, or grooming and hygiene products, that is:

* * *

Sec. 17.  32 V.S.A. § 9741(2) is amended to read:

(2)  Drugs intended for human use, durable medical equipment, mobility enhancing equipment, and prosthetic devices and supplies, including blood, blood plasma, insulin, and medical oxygen, used in treatment intended to alleviate human suffering or to correct, in whole or in part, human physical disabilities.

Sec. 18.  32 V.S.A. § 9771(5) is amended to read:

(5)  Telecommunications service provided to a Vermont service address.

Sec. 19.  32 V.S.A. § 9772(a) is amended to read:

(a)  For the purpose of adding and collecting the tax imposed by this chapter, or an amount equal as nearly as possible or practicable to the average equivalent thereof, to be reimbursed to the vendor by the purchaser, the vendor shall use either the calculation in subdivision (1) of this subsection or the formula in subdivision (2).  The tax required to be remitted shall be the rate specified in section 9771 of this title multiplied by the total sales price of all the taxable transactions; provided, however, the tax required to be remitted shall be no more than the amount required to be collected.  The vendor shall be entitled to retain any amount lawfully collected by the person in excess of the tax imposed by this chapter.

(1)  The total sales price of the transaction multiplied by the rate specified in section 9771 of this title carried to the third decimal place and rounded up to the nearest whole cent if the third decimal point is greater than four and rounded down to the nearest whole cent if the third decimal point is four or less.  The tax may be computed on either the total invoice amount or on each taxable item.

* * *

Sec. 20.  32 V.S.A. § 9703(d) is added to read:

(d)  A person required to collect the tax may also refund or credit to the purchaser any tax erroneously, illegally, or unconstitutionally collected.  No cause of action that may exist under state law shall accrue against the seller for the tax collected unless the purchaser has provided written notice to a seller, and the seller has had 60 days to respond.  Such notice must contain such information necessary to determine the validity of the request.  A seller who uses either a provider or a system, including a proprietary system, that is certified by the state and who has remitted to the state all taxes collected less any deductions, credits, or collected allowances shall be presumed to have a reasonable business practice.

Sec. 21.  32 V.S.A. § 3201(e) is added to read:

(e)  Agreements with certified service providers.  The commissioner may enter into agreements with certified service providers, sellers using certified automated systems, and voluntary sellers for monetary allowances.  The tax required to be paid to the department shall be net of monetary allowances.

(1)  The allowance for a certified service provider shall be funded entirely from money collected by the provider and shall be either a base rate applied to taxable transactions processed by the provider or, for a period not to exceed 24 months following a voluntary seller’s registration through the streamlined sales tax agreement central registration process, a percentage of tax revenue generated for the state for which the seller does not have a requirement to register to collect the tax, or both.

(2)  The allowance for a seller using a certified automated system shall be for a period not to exceed 24 months following a seller’s voluntary registration and may include a base rate applied to taxable transactions and a percentage of tax revenue generated for the state for which the seller does not have a requirement to register to collect the tax.

(3)  The allowance for a voluntary seller shall be for a period not to exceed 24 months following a seller’s voluntary registration and shall be based on a percentage of tax revenue generated for the state for which the seller does not have a requirement to register to collect the tax.

* * * Report * * *

Sec. 22.  REPORT; RECOMMENDATION

The Department of Taxes shall report to the House Committee on Ways and Means and the Senate Committee on Finance by February 1, 2005, on the department’s proposed rules and its recommendations for legislation with respect to implementation of unitary combined reporting.  The department shall also include in its report (1) proposed details on the inclusion of subpart F, corporate inversion, or other tax-haven deemed income in the unitary tax base; (2) an estimate of the cost and effects of allowing a double-weighting of the sales factor in corporate income apportionment, a recommendation of whether the throwback rule for taxation of sales income should be retained and if not, whether it should be replaced with any other method of taxation; and (3) alternative measures for encouraging business growth which are estimated to cost the same as allowing double-weighting of the sales factor.

* * * Effective Dates * * *

Sec. 23.  EFFECTIVE DATES

This act shall take effect upon passage, except:

(1)  Secs. 2, 3, and 7 (unitary combined reporting and tax rates) shall apply to taxable years beginning on or after January 1, 2006.

(2)  Sec. 4 (corporate tax rates) shall apply to taxable years beginning on or after January 1, 2007.

(3)  Sec. 5 (double-weighting of sales factor) shall apply to taxable years beginning on or after January 1, 2006.

(4)  Sec. 14 (taxation of lottery proceeds) shall apply to taxable years beginning on or after January 1, 2005.

(5)  Secs. 15 through 22 (streamlined sales tax conforming technical amendments) shall take effect on the first day of the second quarter following the date of Vermont’s membership in the multistate streamlined sales and use tax agreements, but no earlier than April 1, 2005.

* * *Update of Link to Federal Laws* * *

Sec. 24.  32 V.S.A. § 5824 is amended to read:

§ 5824.  ADOPTION OF FEDERAL INCOME TAX LAWS

The statutes of the United States relating to the federal income tax, as in effect for taxable year 2002 2003, but without regard to federal income tax rates under Section 1 of the Internal Revenue Code, are hereby adopted for the purpose of computing the tax liability under this chapter.     

Sec. 25.  32 V.S.A. § 7475 is amended to read:

§ 7475.  ADOPTION OF FEDERAL ESTATE AND GIFT TAX LAW

The laws of the United States, relating to the federal estate and gift taxes as in effect on January 1, 2003 2004, are hereby adopted for the purpose of computing the tax liability under this chapter, except with the credit for state death taxes under Sections 2011 and 2604 as in effect on January 1, 2001, of the Internal Revenue Code, and without any deduction for state death taxes under Section 2058 of the Internal Revenue Code.

Sec. 26.  EFFECTIVE DATES

Sec. 24 of this act (update of link to Federal income tax laws) shall apply to taxable years beginning on and after January 1, 2003; and Sec. 25 of this act (update of link to Federal estate and gift tax laws) shall apply to estates of decedents with a date of death on or after, and gifts made on or after, January 1, 2004.

Sec. 27. Sec. 87, subdivision (17) of No. 68 of the Acts of 2003 is amended to read:

(17)  Secs. 51-67, relating to streamlined sales tax provisions, including provisions relating to alcoholic beverages, clothing, and $20.00 telecommunications credit, and provisions relating to local option taxation of telecommunications and exemption of clothing, shall take effect on the first day of the second quarter following the date of Vermont’s membership in the multistate streamlined sales and use tax agreement, but no earlier than January 1, 2005 April 1, 2005.

And that the bill ought to pass in concurrence with such proposals of amendment.

Thereupon, the bill was read the second time by title only pursuant to Rule 43, and pending the question, Shall the Senate propose to the House to amend the bill as recommended by the Committee on Finance?, Senator Shepard moved to amend the proposal of amendment of the Committee on Finance as follows:

First:  By striking out Secs. 3 and 4 and by inserting in lieu thereof a new Sec. 3, to read as follows:

Sec. 3.  32 V.S.A. § 5832 is amended to read:

§ 5832.  TAX ON INCOME OF CORPORATIONS

A tax is imposed for each calendar year, or fiscal year ending during that calendar year, upon the income earned or received in that taxable year by every taxable corporation, such tax being the greater of

(1)  an amount determined in accordance with the following schedule:

Vermont net income of the                

corporation for the taxable

 year allocated or appor-

tioned to Vermont under

section 5833 of this title                    Tax

       0-10,000.00                                7.00% 5.70%

   $ 10,001.00-25,000.00                   $700.00 plus 8.10% of the excess

over $10,000.00

$570.00 plus 6.6% of the excess over $10,000.00

       25,001.00-250,000.00               $1,915.00 plus 9.20% of the excess

over $25,000.00

$1560.00 plus 7.6% of the excess over $25,000.00

     250,001.00 and over                   $22,615.00 plus 9.75% of the

excess over $250,000.00

$18,660.00 plus 8.0% of the excess over $250,000.00;

or

* * *

Second:  Sec. 23 is amended as follows:

     By striking out subdivision (2) in its entirety.

Thereupon, without objection consideration of the bill was interrupted.

Rules Suspended; Bill Passed in Concurrence with Proposals of Amendment; Bill Messaged

H. 754.

Pending entry on the Calendar for action tomorrow, on motion of Senator Welch, the rules were suspended and House bill entitled:

An act relating to the creation of a fire safety division within the department of public safety.

Was placed on all remaining stages of its passage in concurrence with proposals of amendment forthwith.

Thereupon, the bill was read the third time and passed in concurrence with proposals of amendment.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Committee of Conference Appointed

H. 272.

An act relating to nutrition policy in Vermont schools.

Was taken up.  Pursuant to the request of the House, the President announced the appointment of

                                         Senator Collins

                                         Senator Maynard

                                         Senator Mullin

as members of the Committee of Conference on the part of the Senate to consider the disagreeing votes of the two Houses.

Rules Suspended; Report of Committee of Conference Accepted and Adopted on the Part of the Senate; Bill Messaged

H. 632.

Appearing on the Calendar for notice, on motion of Senator Welch, the rules were suspended and the report of the Committee of Conference on House bill entitled:

An act relating to workers’ compensation.

Was taken up for immediate consideration.

Senator Greenwood, for the Committee of Conference, submitted the following report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon House bill entitled:

H. 632.  An act relating to workers’ compensation.

Respectfully reports that it has met and considered the same and recommends that the Senate recede from its proposal of amendment and that the bill be further amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  WORKERS’ COMPENSATION ISSUES; ANALYSIS; LABOR AND INDUSTRY

(a)  The Department of Labor and Industry shall issue a report to the general assembly on or before February 1, 2005, in which the department analyzes the following: 

(1)  Assuring workers’ compensation coverage compliance by Vermont employers.

(2)  Prevention and enforcement of workers’ compensation fraud.

(3)  Compensability under workers’ compensation for heart attacks suffered by firefighters and police officers in the line of duty.

(4)  Establishment of an ombudsman position within the workers’ compensation division to assist unrepresented employees and employers to navigate and understand the workers’ compensation system, including helping with issues relating to safety, benefits, medical benefits, vocational rehabilitation and return to work, and minimizing employee and employer fraud.

(5)  Costs, benefits, and approaches for apportioning aggravating injuries and preexisting conditions.

(b)  The commissioner shall consult with and make progress reports to the advisory committee established in Sec. 73(a) of No. 66 of the Acts of  2003, during the analysis and report preparation required in subsection (a) of this section.  The commissioner shall meet at least twice with the advisory committee.

Sec. 2.  WORKERS’ COMPENSATION PREMIUM STABILIZATION OR REDUCTION; BANKING, INSURANCE, SECURITIES, AND HEALTH CARE ADMINISTRATION

The Department of Banking, Insurance, Securities, and Health Care Administration shall issue a report to the General Assembly by February 1, 2005, that includes findings and proposals in regard to the following:

(1)  Additional regulation of the insurance industry in Vermont including:

(A)  Higher performance standards for adjusting claims.

(B)  Implementing caseload maximums for adjusters.

(2)  Techniques to stabilize rates and create predictability in workers’ compensation insurance premiums, including extending the time period for amortizing extraordinarily high claims.

Sec. 3.  21 V.S.A. § 642 is amended to read:

§ 642.  TEMPORARY TOTAL DISABILITY BENEFITS

Where the injury causes total disability for work, during such disability, but not including the first three days, the day of the accident to be counted as the first day, unless the employee received full wages for that day, the employer shall pay the injured employee a weekly compensation equal to two-thirds of the employee’s average weekly wages, but not more than the maximum nor less than the minimum weekly compensation, provided that the weekly compensation shall not be greater than the injured employee’s weekly net income.  In addition, the injured employee, during the disability period shall receive $10.00 a week for each dependent child who is unmarried and under the age of 21 years, provided that weekly benefits under this section shall not exceed the employee’s weekly net income, and provided that no other injured worker is receiving the same benefits on behalf of the dependent child or children.  However, in no event shall an employee’s total weekly wage replacement benefits, including any payments for a dependent child, exceed 90 percent of the employee’s average weekly wage prior to applying any applicable cost of living adjustment.  The amount allowed for dependent children shall be increased or decreased weekly to reflect the number of dependent children extant during the week of payment.  If the total disability continues after the third day for a period of seven consecutive calendar days or more, compensation shall be paid for the whole period of the total disability. 

Sec. 4.  21 V.S.A. § 601(19) and (21) are amended and (24) is added to read:

(19)  “Minimum weekly compensation” shall mean a sum of money equal to 50 percent of the average compensation, rounded to the next higher dollar.  However, solely for the purposes of determining permanent total or partial disability compensation where the employee’s average weekly wage computed under section 650 of this title is lower than the minimum weekly compensation, the employee’s weekly compensation shall be the full amount of the employee’s average weekly wages.  For the purpose of determining temporary total or temporary partial disability compensation where the employee’s average weekly wage computed under section 650 of this title is lower than the minimum weekly compensation, the employee’s weekly compensation shall be the employee’s weekly net income 90 percent of the employee’s average weekly wage prior to any cost of living adjustment calculated under subsection 650(d) of this title.

(21)  “Weekly net income” shall mean the average weekly wage as computed under section 650 of this title, less the amount of state and federal income tax and FICA which the employee would pay or have withheld if the standard state and federal deductions or credits to which the employee is entitled were taken.

(24)  “Evidence that reasonably supports an action” means, for the purposes of section 643a and subsections 650(e) and 662(a) of this title, relevant evidence that a reasonable mind might accept as adequate to support a conclusion that must be based on the record as a whole, and take into account whatever in the record fairly detracts from its weight.

Sec. 5.  21 V.S.A. § 650(e) is added to read:

(e)  If weekly compensation benefits or weekly accrued benefits are not paid within 21 days after becoming due and payable pursuant to an order of the commissioner, or in cases in which the overdue benefit is not in dispute, ten percent of the overdue amount shall be added and paid to the employee, in addition to interest and any other penalties.  In the case of an initial claim, benefits are due and payable upon entering into an agreement pursuant to subsection 662(a) of this title, upon issuance of an order of the commissioner pursuant to subsection 662(b) of this title, or if the employer has not denied the claim within 21 days after the claim is filed.  Benefits are in dispute if the claimant has been provided actual written notice of the dispute within 21 days of the benefit being due and payable and the evidence reasonably supports the denial.  Interest shall accrue and be paid on benefits that are found to be compensable during the period of nonpayment.

Sec. 6.  21 V.S.A. § 660(a) is amended to read:

(a)  A notice given under the provisions of this chapter shall not be held invalid or insufficient by reason of any inaccuracy in stating the time, place, nature, or cause of the injury, or otherwise, unless it is shown that the employer was in fact misled to the injury as a result of the inaccuracy.  Want of or delay in giving notice, or in making a claim, shall not be a bar to proceedings under the provisions of this chapter, if it is shown that the employer, the employer’s agent, or representative, had knowledge of the accident or that the employer has not been prejudiced by the delay or want of notice.  Proceedings to initiate a claim for benefits a work‑related injury pursuant to this chapter may not be commenced after six three years from the date of injury.  This section shall not be construed to limit subsequent claims for benefits stemming from a timely filed work-related injury claim.

Sec. 7.  21 V.S.A. § 641(a) is amended to read: 

(a)  When as a result of an injury covered by this chapter, an employee is unable to perform work for which the employee has previous training or experience, the employee shall be entitled to vocational rehabilitation services, including retraining and job placement, as may be reasonably necessary to restore the employee to suitable employment.  Vocational rehabilitation services shall be provided as follows:

(1)  The employer shall designate a vocational rehabilitation provider from a list provided by the commissioner to initially provide services.  Thereafter, the employee may select another vocational rehabilitation provider from a list provided by the commissioner upon giving the employer written notice of the employee’s reasons for dissatisfaction with the designated provider and the name and address of the provider selected by the employee.

(2)  The department shall provide an injured worker with a form that includes information and employee rights.  The form shall clearly and simply explain the worker’s rights, including the choice of provider, the right to challenge a determination, and reimbursement for related expenses.  The worker shall sign the form and return it to the department.

(3)  The commissioner shall adopt rules to assure that a worker who requests services or who has received more than 90 days of continuous temporary total disability benefits is timely and cost‑effectively screened for benefits under this section.  An injured worker who is determined to be eligible for benefits shall have an appropriate initial vocational assessment and be offered appropriate vocational rehabilitation services.  The commissioner shall adopt rules to provide a mechanism for periodic review of injured workers who are initially found not to be ready or eligible for vocational rehabilitation services.

(4)  If these services are not voluntarily offered and accepted by the employee, the commissioner, if necessary through informal hearing, may refer the employee to a qualified physician or appropriate facility for evaluation of the practicability of, need for, and kind of service, treatment, or training necessary and appropriate to render the employee fit for a remunerative occupation.  Upon receipt of findings and after affording the parties an opportunity to be heard, the commissioner may order that the services and treatment recommended, or such other rehabilitation treatment or service the commissioner may deem necessary be provided at the expense of the employer.  When vocational rehabilitation requires residence at or near a facility or institution, away from the employee’s customary residence, the reasonable cost of board, lodging, or travel, or both, shall be paid for by the employer.  In addition, the employer shall pay reasonable costs of books, tools, or other basic materials required in such rehabilitation process.  Refusal to accept vocational rehabilitation pursuant to an order of the commissioner may result in loss of compensation for each week of the refusal, if the commissioner so directs.

(5)  The commissioner may set by rule reasonable reimbursement rates for vocational rehabilitation benefits and services, provided reasonable choices and access to benefits and services are maintained.

Sec. 8.  REPEAL

Workers’ Compensation Rule 30.1000, which requires an employer to refer an injured worker to vocational rehabilitation within 15 days of identifying an worker who has received temporary total disability benefits for 90 days or who is unable to return to suitable employment due to a work injury, is repealed.

Sec. 9.  21 V.S.A. § 618(a) is amended to read:

(a)(1)  If a worker receives a personal injury by accident arising out of and in the course of employment by an employer subject to this chapter, the employer or the insurance carrier shall pay compensation in the amounts and to the person hereinafter specified.  The compensation of a person who is under guardianship shall be paid to the person’s guardian.

* * *

(3)  An injury arising from an on-premises recreational activity shall be presumed to be compensable unless the activity is shown to be not reasonably related to employment duties, requirements or a regular incident of employment.

Sec. 10.  TEMPORARY TOTAL DISABILITY DURATION; ANNUAL REPORT BY INSURERS

Each workers’ compensation insurer shall file a report or reports annually regarding current workers’ compensation cases in which the temporary total disability compensation has been paid continuously for two or more years.  The reports shall be in a form and include data as required by the commissioner.

Sec. 11.  21 V.S.A. § 640 is amended to read: 

§ 640.  MEDICAL BENEFITS; ASSISTIVE DEVICES; HOME AND AUTOMOBILE MODIFICATIONS

(a)  An employer subject to the provisions of this chapter shall furnish to an injured employee reasonable surgical, medical and nursing services and supplies to an injured employee, including prescription drugs and durable medical equipment. The employer shall provide assistive devices and modification to vehicles and residences reasonably necessary to permit an injured worker who is determined to have or expected to suffer a permanent disability, such as an ambulatory disability as defined in section 271 of this title or blindness as defined in section 271, that substantially and permanently prevents or limits the worker’s ability to continue to live at home or perform basic life functions.  In determining what devices and modifications are reasonably necessary, consideration shall be given to factors that include ownership of the residence to be modified, the length of time the worker is expected to utilize and benefit from the devices or modifications, and the extent to which the devices or modifications enhance or improve the worker’s independent functioning.  The employer shall also furnish reasonable hospital services and supplies, including surgical, medical, and nursing services while the injured employee is confined in a hospital for treatment and care.

* * *

(d)  The liability of the employer to pay for medical, surgical, hospital, and nursing services and supplies, prescription drugs, and durable medical equipment provided to the injured employee under this section shall not exceed the maximum fee for a particular service, prescription drug, or durable medical equipment as provided by a schedule of fees and rates prepared by the commissioner.  The reimbursement rate for services and supplies in the fee schedule shall include consideration of medical necessity, clinical efficacy, cost‑effectiveness, and safety, and those services and supplies shall be provided on a nondiscriminatory basis consistent with workers’ compensation and health care law.  The commissioner shall authorize reimbursement at a rate higher than the scheduled rate if the employee demonstrates to the commissioner’s satisfaction that reasonable and necessary treatment, prescription drugs, or durable medical equipment is not available at the scheduled rate.  An employer shall establish direct billing and payment procedures and notification procedures as necessary for coverage of medically-necessary prescription medications for chronic conditions of injured employees, in accordance with rules adopted by the commissioner.

Sec. 12.  CONSTRUCTION

The purpose of the changes in 21 V.S.A. § 640(a) is to require employers to provide modification benefits to disabled employees who suffer a work injury on or after the effective date of this act and is not to be construed to affect current law as it provides for modifications to vehicles and residences.

Sec. 13.  MEDICAL, HOSPITAL, PHARMACEUTICAL, AND DURABLE MEDICAL EQUIPMENT FEE SCHEDULES; LABOR AND INDUSTRY

Pursuant to 21 V.S.A. § 640(d), which gives the commissioner the authority and responsibility to establish medical fee schedules, by February 1, 2005, the Commissioner of Labor and Industry, with assistance from the Commissioner of Banking, Insurance, Securities, and Health Care Administration, shall:

(1)  Develop and implement mechanisms designed to control medical costs while assuring injured workers’ access on a nondiscriminatory basis consistent with workers’ compensation and health care insurance law to medically necessary, clinically efficacious, and cost-effective quality medical care and treatment.  Mechanisms for reimbursement for medical services, hospital services, both inpatient and outpatient, and durable medical equipment may be based on Medicare reimbursement methodologies for each area, but may have a different base reimbursement rate.  These rates may be set as ratios to the base reimbursement rates.  The commissioner shall strive to reduce the overall costs of medical services and supplies under this chapter by at least four percent through the new cost control mechanisms and fee schedules for medical, surgical, hospital, and nursing services and supplies, prescription drugs, and durable medical equipment.

(2)  Investigate strategies for reducing prescription drug costs and report the results and proposals to the General Assembly by February 1, 2005.  The investigation shall include written information from the major workers’ compensation carriers in regard to market share.  The information requested shall describe the methodologies and practices used by the carrier to reduce prescription drug costs including utilization of any of the following:

(A)  A pharmacy benefits manager or administrator, and, if so, the name and contact information for the manager or administrator.

(B)  A preferred drug list, and if so, whether the preferred drug list includes over-the-counter drugs, the preferred prices are negotiated, and whether the list is proprietary.

(C)  Payment for over-the-counter drugs in lieu of prescription drugs.

(D)  Mail order purchase of prescription drugs, and if so, are community retail pharmacies permitted to fill prescriptions in the same manner as by mail order pharmacies with respect to the quantity of drugs or supply of drugs dispensed.

(3)  Consult with the Joint Fiscal Office, Legislative Council, and Drug Utilization Review Board and evaluate the practicality, legality, and usefulness of adopting prescription drug price cost reduction strategies for the workers’ compensation program and outline those strategies.

(4)  Consult with other state workers’ compensation programs to determine whether implementation of any of the prescription drug cost reduction strategies or creation of a multi-state purchasing program would benefit the Vermont workers’ compensation system.

(5)  Adopt medical fee schedules by an accelerated process.  The commissioner shall adopt the schedule of fees and rates required by 21 V.S.A. § 640(d) as expeditiously as possible following the passage of this act.  Prior to adoption of a comprehensive schedule for all medical services and equipment subject to 21 V.S.A. § 640(d), the commissioner shall develop and adopt an interim or partial schedule or schedules of maximum fees for those medical services and supplies deemed by the commissioner to be the most excessive and inconsistent with the fees for the same services and supplies paid by other commercial insurers and payers.  For the purpose of establishing an interim or partial schedule, the commissioner shall adopt an emergency rule pursuant to 3 V.S.A. § 844.

Sec. 14.  21 V.S.A. § 601(3) and (14) are amended to read:

(3)  “Employer” includes any body of persons, corporate or unincorporated, public or private, and the legal representative of a deceased employer, and includes the owner or lessee of premises or other person who is virtually the proprietor or operator of the business there carried on, but who, by reason of there being an independent contractor or for any other reason, is not the direct employer of the workers there employed.  If the employer is insured, “employer” includes his the employer’s insurer so far as applicable.  A person is not deemed to be an “employer” for the purposes of this chapter as the result of entering into a contract for services or labor with an individual who has knowingly and voluntarily waived coverage of this chapter pursuant to subdivision (14)(F) of this section.

(14)  “Worker” and “employee” means a person an individual who has entered into the employment of, or works under contract of service or apprenticeship with, an employer, but shall not include.  Any reference to a worker who has died as the result of a work injury shall include a reference to the worker’s dependents, and any reference to a worker who is a minor or incompetent shall include a reference to the minor’s committee, guardian, or next friend.  The term “worker” or “employee” does not include:

(A)  a person An individual whose employment is of casual nature, and not for the purpose of the employer’s trade or business;.

(B)  a person An individual engaged in amateur sports even if an employer contributes to the support of such sports;.

(C)  a person An individual engaged in agriculture or farm employment for an employer whose aggregate payroll is less than $2,000.00 $10,000.00 in a calendar year, unless such the employer notifies the commissioner that he the employer wishes to be included within the provisions of this chapter; the existence of a contract of insurance shall be considered sufficient notice;.

(D)  aA member of the employer’s family dwelling in his the employer’s house; but, if in any contract of insurance the wages or salary of such a member of the employer’s family dwelling in his house is included in the payroll on which the premium is based, then such person that family member shall, in the event of his sustaining an injury arising out of and in the course of his employment be deemed an employee and compensated accordingly; or.

(E)  any person Any individual engaged in any type of service in or about a private dwelling unless such the employer notifies the commissioner that he the employer wishes to be included within the provisions of this chapter; the existence of a contract of insurance shall be considered sufficient notice; or.

(F)  the The sole proprietor or partner owner or partner owners of an unincorporated business, unless such sole proprietor or partner notifies the commissioner of his or her wish to be included within the provisions of this chapter; the submission of a contract or an amendment to a contract to elect coverage of the sole proprietor or partner shall be considered sufficient notice. provided:

(i)  The individual performs work that is distinct and separate from that of the person with whom the individual contracts.

(ii)  The individual controls the means and manner of the work performed.

(iii)  The individual holds him or herself out as in business for him or herself.

(iv)  The individual holds him or herself out for work for the general public and does not perform work exclusively for or with another person.

(v)  The individual is not treated as an employee for purposes of income or employment taxation with regard to the work performed.

(vi)  The services are performed pursuant to a written agreement or contract between the individual and another person, and the written agreement or contract explicitly states that the individual is not considered to be an employee under this chapter, is working independently, has no employees, and has not contracted with other independent contractors.  The written contract or agreement shall also include information regarding the right of the individual to purchase workers’ compensation insurance coverage and the individual’s election not to purchase that coverage.  However, if the individual who is party to the agreement or contract under this subdivision is found to have employees, those employees may file a claim for benefits under this chapter against either or both parties to the agreement.

* * *

(H)  Any executive officer elected or appointed and empowered in accordance with the bylaws of the corporation shall be an employee of the corporation.  With the approval of the commissioner, an officer may elect not to come under the provisions of this chapter and if all officers of the corporation make such election and the corporation has no employees, the corporation shall not be required to purchase workers’ compensation coverage.  If after election, the officer suffers a personal injury and files a claim under this chapter, the employer shall have all the defenses available in a personal injury claim.  However, this election shall not prevent any other individual, other than the executive officer, found to be an employee of the corporation to recover workers’ compensation from either the corporation or the statutory employer.

Any reference to a worker who has been injured shall, where the worker is dead, include a reference to his dependents as herein defined, if the context so requires, or where the employee is a minor or incompetent, to his committee or guardian or next friend.  Every executive officer elected or appointed and empowered in accordance with the charter and bylaws of a corporation  shall be an employee of the corporation.  Subject to the written approval of the commissioner an officer of a corporation may elect not to come under the provisions of this chapter, then if an action is brought by the employee to recover damages for personal injury or by his personal representatives for damages on account of his death resulting from personal injuries sustained after the employee had so elected and arising out of and in the course of his employment, the employer shall have all the defenses which he would have had if the provisions of this chapter were not in force.

Sec. 15.  21 V.S.A. § 624(j) and (k) are added to read:

(j)  The commissioner shall determine, by rule, workplaces where an insured has demonstrated an unusually poor safety record, as defined by the commissioner.

(k)  Employers with unusually poor safety records, as defined by the commissioner, shall create workplace safety committees with balanced representation between management and employees and, with the assistance of the department, shall design and implement written accident prevention plans that shall be distributed to all employees.  The department shall issue bulletins of best safety practices.

Sec. 16.  13 V.S.A. § 2024 is amended to read:

§ 2024.  WORKERS’ COMPENSATION FRAUD

Any person including an employee, employer, medical case manager, health care provider, vocational rehabilitation provider, or workers’ compensation insurance carrier who wilfully knowingly and with intent to defraud makes a false statement or representation for the purpose of obtaining, affecting, or denying any benefit or payment under the provisions of chapter 9 or 11 of Title 21, either for her or himself or for any other person, shall be fined not more than $10,000.00 and shall forfeit all benefits or payments obtained as a result of the false statement or representation and all or a portion of any right to compensation under the provisions of chapters chapter 9 and 11 of Title 21 as determined by the commissioner and:

(1)  For fraud involving $10,000.00 or more, be fined not more than $100,000.00 or imprisoned not more than three years, or both.

(2)  For fraud involving less than $10,000.00, be fined not more than $10,000.00 or imprisoned not more than two years, or both.

Sec. 17.  EFFECTIVE DATE

This act shall take effect on passage.

                                                                 JAMES H. GREENWOOD

                                                                 ANN E. CUMMINGS

                                                                 RODERICK M. GANDER

                                                      Committee on the part of the Senate

                                                                 JOYCE ERRECART

                                                                 ROBERT DOSTIS

                                                                 STEVEN E. LARRABEE, SR.

                                                      Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Report of Committee of Conference Accepted and Adopted on the Part of the Senate; Bill Messaged

H. 778.

Senator Kittell, for the Committee of Conference, submitted the following report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon House bill entitled:

An act relating to miscellaneous agricultural subjects.

Respectfully reports that it has met and considered the same and recommends that the House accede to the Senate proposal of amendment, and that it be further amended by striking out Secs. 1 and 4 and inserting in lieu thereof 12 new Secs. to read as follows:

* * * Animal Waste Management; Facility Siting * * *

Sec. 1.  6 V.S.A. chapter 215 is redesignated to read:

CHAPTER 215.  AGRICULTURAL NON-POINT SOURCES POLLUTION REDUCTION PROGRAM WATER QUALITY

Sec. 2.  6 V.S.A. chapter 215, subchapter 1 is added to read:

Subchapter 1.  General Provisions

§ 4801.  PURPOSE; STATE POLICY

It is the purpose of this chapter to ensure that agricultural animal wastes do not enter the waters of this state.  Therefore, it is state policy that:

(1)  All farms meet certain standards in the handling and disposal of animal wastes, as provided by this chapter and the cost of meeting these standards shall not be borne by farmers only, but rather by all members of society, who are in fact the beneficiaries.  Accordingly, state and federal funds shall be made available to farms, regardless of size, to defray the major cost of complying with the animal waste requirements of this chapter.  State and federal conservation programs to assist farmers should be directed to those farms that need to improve their infrastructure to prohibit direct discharges or bring existing water pollution control structures into compliance with United States Department of Agriculture (U.S.D.A.) Natural Resources Conservation Service standards.  Additional resources should be directed to education and technical assistance for farmers to improve the management of agricultural wastes and protect water quality.

(2)  Officials who administer the provisions of this chapter:

(A)  educate farmers and other affected citizens on requirements of this chapter through an outreach collaboration with farm associations and other community groups; and

(B)  in the process of rendering official decisions, afford farmers and other affected citizens an opportunity to be heard and give consideration to all interests expressed.

§ 4802.  DEFINITION

For purposes of this chapter, the word “secretary,” when used by itself, means the secretary of agriculture, food and markets.

Sec. 3.  6 V.S.A. chapter 215, subchapter 1 is redesignated to read:

Subchapter 1.  Program Policy and Implementation 2.  Water Quality; Accepted Agricultural Practices and Best Management Practices

Sec. 4.  6 V.S.A. § 4810 is amended to read:

§ 4810.  AUTHORITY; COOPERATION; COORDINATION

(a)  Agricultural land use practices.  In accordance with 10 V.S.A. § 1259(i) and to implement and enforce accepted agricultural practices as defined under 10 V.S.A. § 1259(f), the secretary of agriculture, food and markets shall develop adopt by rule, pursuant to chapter 25 of Title 3, and shall implement and enforce agricultural land use practices in order to reduce the amount of agricultural pollutants entering the waters of the state.  These agricultural land use practices shall be created in two categories, pursuant to subdivisions (1) and (2) of this subsection.

(1) One category shall consist of accepted agricultural practices as defined under subsection 1259(f) of Title 10.  These practices “Accepted Agricultural Practices” (AAPs) shall be standards to be followed in the conducting of farming agricultural activities in this state.  These standards shall address activities which have a potential for causing pollutants to enter the waters of this state, including dairy and other livestock operations plus all forms of crop and nursery operations.  The AAPs shall include practices for farmers in preventing pollutants from entering the waters of the state when engaged in, but not limited to, animal waste management and disposal, soil amendment applications, plant fertilization, and pest and weed control.  Persons engaged in farming, as defined in 10 V.S.A. § 6001 section 6001 of Title 10, who follow these practices shall be presumed to be in compliance with water quality standards.  AAPs shall be practical and cost effective to implement.

(2) The second category of agricultural land use practices shall consist of best management practices, which “Best Management Practices” (BMPs) may be required by the secretary of agriculture, food and markets on a case by case basis.  Before requiring best management practices BMPs, the secretary of agriculture, food and markets shall determine that sufficient financial assistance is available to assist farmers in achieving compliance with applicable best management practices BMPs. Both categories of agricultural land use practices BMPs shall be practical and cost effective to implement.

* * *

Sec. 5.  6 V.S.A. § 4851(a) and (b) are amended to read:

(a)  No person shall, without a permit from the secretary, construct a new barn, or expand an existing barn, designed to house more than 950 animal units of horses, cattle and sheep, or 2,375 swine each weighing over 25 kilograms, or 95,000 laying-hens or broilers (if the facility has a continual flow water system), or 28,500 laying-hens or broilers (if the facility has a liquid manure system), or 4,750 ducks, or 52,250 turkeys. 700 mature dairy animals, 1,000 cattle or cow/calf pairs, 1,000 veal calves, 2,500 swine weighing over 55 pounds, 10,000 swine weighing less than 55 pounds, 500 horses, 10,000 sheep or lambs, 55,000 turkeys, 30,000 laying hens or broilers with a liquid manure handling system, 82,000 laying hens without a liquid manure handling system, 125,000 chickens other than laying hens without a liquid manure handling system, 5,000 ducks with a liquid manure handling system, or 30,000 ducks without a liquid manure handling system.  No permit shall be required to replace an existing barn in use for livestock or domestic fowl production at its existing capacity. 

(b)  A person shall apply for a permit in order to operate a farm which exceeds 950 animal units of horses, cattle and sheep, or 2,375 swine each weighing over 25 kilograms, or 95,000 laying-hens or broilers (if the facility has a continual flow water system), or 28,500 laying-hens or broilers (if the facility has a liquid manure system), or 4,750 ducks, or 52,250 turkeys 700 mature dairy animals, 1,000 cattle or cow/calf pairs, 1,000 veal calves, 2,500 swine weighing over 55 pounds, 10,000 swine weighing less than 55 pounds, 500 horses, 10,000 sheep or lambs, 55,000 turkeys, 30,000 laying hens or broilers with a liquid manure handling system, 82,000 laying hens without a liquid manure handling system, 125,000 chickens other than laying hens without a liquid manure handling system, 5,000 ducks with a liquid manure handling system, or 30,000 ducks if the livestock or domestic fowl are in a barn or adjacent barns owned by the same person, or if the barns share a common border or have a common waste disposal system.  In order to receive this permit, the person shall demonstrate to the secretary that the farm has an adequately sized manure management system to accommodate the wastes generated and a nutrient management plan to dispose of wastes in accordance with accepted agricultural practices adopted under this chapter.

Sec. 6.  6 V.S.A. chapter 215, subchapter 2 is redesignated to read:

Subchapter 2. 3.  Water Quality; Financial and Technical Assistance

Sec. 7.  6 V.S.A. chapter 215, subchapter 3 is redesignated to read:

Subchapter 3. 4.  Regulation of Large Farm Operations

Sec. 8.  6 V.S.A. chapter 215, subchapter 5 is added to read:

Subchapter 5.  Regulation of Medium and Small Farm Operations

§ 4856.  RECYCLING ANIMAL WASTE NUTRIENTS

In order best to use the nutrients of animal waste generated by farms to which this subchapter applies, the agency of agriculture, food and markets, together with the department of public service, shall use available resources to inform operators of such farms of appropriate methods and resources available to digest and compost their animal wastes and to capture methane for beneficial uses.

§ 4857.  DEFINITIONS

For purposes of this subchapter:

(1)  “Animal feeding operation” (AFO) means a lot or facility where the livestock or domestic fowl have been, are, or will be stabled or confined and fed or maintained for a total of 45 days or more in any 12‑month period, and crops, vegetation, or forage growth are not sustained in the normal growing season over any portion of the lot or facility.  Two or more individual farms qualifying as an AFO which are under common ownership and which adjoin each other or use a common area or system for the disposal of waste, shall be considered to be a single AFO if the combined number of livestock or domestic fowl resulting qualifies as a medium farm as defined in subdivision (2) of this section.

(2)  “Medium farm” is an AFO which houses 200 to 699 mature dairy animals, 300 to 999 cattle or cow/calf pairs, 300 to 999 veal calves, 750 to 2,499 swine weighing over 55 pounds, 3,000 to 9,999 swine weighing less than 55 pounds, 150 to 499 horses, 3,000 to 9,999 sheep or lambs, 16,500 to 54,999 turkeys, 9,000 to 29,999 laying hens or broilers with a liquid manure handling system, 25,000 to 81,999 laying hens without a liquid manure handling system, 37,500 to 124,999 chickens other than laying hens without a liquid manure handling system, 1,500 to 4,999 ducks with a liquid manure handling system or 10,000 to 29,999 ducks without a liquid manure handling system.

(3)  “Small farm” is an AFO which houses no more than 199 mature dairy animals, 299 cattle or cow/calf pairs, 299 veal calves, 749 swine weighing over 55 pounds, 2,999 swine weighing less than 55 pounds, 149 horses, 2,999 sheep or lambs, 16,499 turkeys, 8,999 laying hens or broilers with a liquid manure handling system, 24,999 laying hens without a liquid manure handling system, 37,499 chickens other than laying hens without a liquid manure handling system, 1,499 ducks with a liquid manure handling system or 9,999 ducks without a liquid manure handling system.

(4)  “Domestic fowl” means laying hens, broilers, ducks, and turkeys.

(5)  “Livestock” means cattle, swine, sheep, and horses.

§ 4858.  ANIMAL WASTE PERMITS

(a)  No person shall operate a medium farm without authorization from the secretary pursuant to this section.  Under exceptional conditions, specified in subsection (e) of this section, authorization from the secretary may be required to operate a small farm.

(b)  Rules; general and individual permits.  The secretary shall establish by rule, pursuant to chapter 25 of Title 3, requirements for a “general permit” and “individual permit” to ensure that medium and small farms generating animal waste comply with the water quality standards of the state.

(1)  “General” and “individual” permits issued under this section shall be consistent with rules adopted under this section, shall include terms and conditions appropriate to each farm size category and each farm animal type as defined by section 4857 of this title and shall meet standards at least as stringent as those established by the U.S. Environmental Protection Agency for concentrated animal feeding operations, as set forth in USEPA National Pollutant Discharge Elimination System Permit Regulation and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations; Final Rule, 68 Fed. Reg. 7176 (2004) (to be codified at 40 C.F.R. Parts 9, 122, 123, 68, and 412).  Such standards shall address waste management, waste storage, development of nutrient management plans, carcass disposal and surface water and groundwater contamination, plus recordkeeping and reporting regarding such matters.

(2)  The rules adopted under this section shall also address permit administration, public notice and hearing, permit enforcement, permit transition, revocation, and appeals consistent with provisions of sections 4859, 4860, and 4861 of this title.

(3)  Each general permit issued pursuant to this section shall have a term of no more than five years.  Prior to the expiration of each general permit, the secretary shall review the terms and conditions of the general permit and may issue subsequent general permits with the same or different conditions as necessary to carry out the purposes of this subchapter.  Each general permit shall include provisions that require public notice of the fact that a medium farm has sought coverage under a general permit adopted pursuant to this section.  Each general permit shall provide a process by which interested persons can obtain detailed information about the nature and extent of the activity proposed to receive coverage under the general permit.

(c)  Medium farm general permit.  The owner or operator of a medium farm seeking coverage under a general permit adopted pursuant to this section shall certify to the secretary within a period specified in the permit, and in a manner specified by the secretary, that the medium farm does comply with permit requirements regarding an adequately sized and designed manure management system to accommodate the wastes generated and a nutrient management plan to dispose of wastes in accordance with accepted agricultural practices adopted under this chapter.

(d)  Medium and small farms; individual permit.  Upon determination by the secretary that a medium or small farm may be a significant contributor of pollutants to the waters of the state, the secretary may require the farm to obtain an individual permit in order to continue in operation.  To receive such a permit, an applicant shall in a manner prescribed by rule demonstrate that the farm has an adequately sized and designed manure management system to accommodate the wastes generated and a nutrient management plan to dispose of wastes in accordance with accepted agricultural practices adopted under this chapter, including setback requirements for waste application.  An individual permit shall be valid for no more than five years.

§ 4859.  PUBLIC NOTICE AND HEARING

The secretary shall issue public notices and conduct public hearings regarding the issuance of general or individual permits under this subchapter consistent with the requirements set forth in C.F.R. Part 124 of Title 40.

§ 4860.  REVOCATION; ENFORCEMENT

(a)  The secretary may revoke coverage under a general permit or an individual permit issued under this subchapter after following the same process prescribed by section 2705 of this title regarding the revocation of a handler’s license.  The secretary may also seek enforcement remedies under sections 1, 11, 12, 13, 16, and 17 of this title as well as assess an administrative penalty under section 15 of this title from any person who fails to comply with any permit provision as required by this subchapter or who violates the terms or conditions of coverage under any general permit or any individual permit issued under this subchapter.  However, notwithstanding provisions of section 15 of this title to the contrary, the maximum administrative penalty assessed for a violation of this subchapter shall not exceed $5,000.00 for each violation,
and the maximum amount of any penalty assessed for separate and distinct violations of this chapter shall not exceed $50,000.00.

(b)  Any person who violates any provision of this subchapter or who fails to comply with any order or the terms of any permit issued in accordance with this subchapter shall be fined not more than $10,000.00 for each violation.  Each violation may be a separate offense and, in the case of a continuing violation, each day’s continuance may be deemed a separate offense.

(c)  Any person who knowingly makes any false statement, representation,  or certification in any application, record, report, plan, or other document filed or required to be maintained by this subchapter or by any permit, rule, regulation, or order issued under this subchapter, or who falsifies, tampers with, or knowingly renders inaccurate any monitoring device or method required to be maintained by this subchapter or by any permit, rule, regulation, or order issued under this subchapter shall upon conviction be punished by a fine of not more than $5,000.00 for each violation.  Each violation may be a separate offense and, in the case of a continuing violation, each day’s continuance may be deemed a separate offense.

§ 4861.  APPEAL

A person aggrieved by a permit decision of the secretary under this subchapter may seek de novo review by the environmental court within 30 days of the decision of the secretary.  A person aggrieved by a final ruling of the secretary on an application for coverage under a general permit adopted pursuant to this section may appeal to the environmental court; provided, however, that the appeal shall be limited in scope to whether the medium farm complies with the terms and conditions of the general permit.  For purposes of this section, “a person aggrieved” means a person who alleges an injury to a particularized interest where the injury is attributable to an act or decision by the secretary under this subchapter and the injury can be redressed by the environmental court or the supreme court.

Sec. 9.  RULEMAKING FOR MEDIUM AND SMALL FARM ANIMAL WASTE PERMITS

Before filing under section 836 of Title 3, the secretary of agriculture, food and markets shall report to the general assembly a proposal for rules required by subsection 4853(b) of Title 6.  The house and senate committees on agriculture shall review the proposed rules and recommend whether the rules shall be approved.  Absent action by the general assembly, the secretary may file the proposed rules with the secretary of state after 30 legislative days from the day of the report.

Sec. 10.  COLLABORATION

The secretary of natural resources administers in the state the national pollutant discharge elimination system (NPDES) program approved by the U.S. Environmental Protection Agency under the federal Clean Water Act. The secretary of natural resources, in consultation with the secretary of agriculture, food and markets, shall explore a collaborative approach necessary for administering a permit program, including the possibility of a general permitting program for large farms, meeting the requirements of the U.S. Environmental Protection Agency under the U.S. Clean Water Act for the NPDES permit program for concentrated animal feeding operations in Vermont.  The secretary shall report to the house and senate committees on agriculture and on natural resources and energy by January 15, 2005.

Sec. 11.  32 V.S.A. § 3752(15) is added to read:

(15)  “Active use” of agricultural land includes that portion of otherwise eligible land that is enrolled in a conservation reserve enhancement program for agricultural lands through a contract with the state or federal government.

Sec. 14.  EFFECTIVE DATES

(a)  This act shall take effect on passage, except Sec. 13 which shall take effect on October 2, 2004.

(b)  The requirement of subsection 4858(d) of Title 6 that a medium or small farm seek an individual permit as a significant contributor of pollution shall take effect upon the effective date of rules adopted by the secretary of agriculture, food and markets pursuant to subsection 4858(b).

(c)  The requirement of subsection 4858(c) of Title 6 that a medium farm seek coverage under a general permit shall take effect on February 13, 2006, or on the later effective date of:

(1)  rules adopted by the secretary of agriculture, food and markets pursuant to subsection 4858(b); or

(2)  resolution of any state or federal court proceeding delaying implementation of subsection 4858(c) or (d).

     And by renumbering the current Secs. 2 and 3 of the Senate Proposal of Amendment to be Secs. 12 and 13

                                                                        SARA BRANNON KITTELL

                                                                        PETER F. WELCH

                                                                        JOHN H. BLOOMER, JR.

                                                                 Committee on the part of the Senate

                                                                        HARVEY T. SMITH

                                                                        ROBERT A. STARR

                                                                        WILLIAM F. JOHNSON

                                                                 Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Rules Suspended; House Proposal of Amendment Concurred In; Action Messaged

S. 76.

Appearing on the Calendar for notice, on motion of Senator Welch, the rules were suspended and House proposal of amendment to Senate bill entitled:

An act relating to the medical use of marijuana.

Was taken up for immediate consideration.

     The House proposes to the Senate to amend the bill by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  18 V.S.A. chapter 86 is amended to read:

CHAPTER 86.  THERAPEUTIC USE OF CANNABIS

Subchapter 1.  Research Program

§ 4471.  Cannabis therapeutic research program; establishment; participation

* * *

Subchapter 2.  Marijuana Use by Persons with Severe Illness

§ 4472.  DEFINITIONS

For the purposes of this subchapter:

(1)  “Bona fide physician-patient relationship” means a treating or consulting relationship of not less than six months duration, in the course of which a physician has completed a full assessment of the registered patient’s medical history and current medical condition, including a personal physical examination.

(2)  “Debilitating medical condition” means:

(A)  end of life care for cancer or acquired immune deficiency syndrome; or

(B)  cancer, acquired immune deficiency syndrome, positive status for human immunodeficiency virus, multiple sclerosis, or the treatment of these diseases or medical conditions if:

(i)  the disease or condition or its treatment results in severe, persistent, and intractable symptoms; and

(ii)  in the context of the specific disease or condition, reasonable medical efforts have been made over a reasonable amount of time without success in relieving the symptoms.

(3)  “Marijuana” shall have the same meaning as provided in subdivision 4201(15) of this title.

(4)  “Possession limit” means the amount of marijuana collectively possessed between the registered patient and the patient’s registered caregiver which is no more than one mature marijuana plant, two immature plants, and two ounces of usable marijuana.

(5)  “Physician” means a person who is licensed under chapter 23 or chapter 33 of Title 26, and is licensed with authority to prescribe drugs under Title 26.

(6)  “Registered caregiver” means a person who is at least 21 years old who has never been convicted of a drug-related crime and who has agreed to undertake responsibility for managing the well-being of a registered patient with respect to the use of marijuana for symptom relief.

(7)  “Registered patient” means a person who has been issued a registration card by the department of public safety identifying the person as having a debilitating medical condition pursuant to the provisions of this subchapter.

(8)  “Secure indoor facility” means a building or room equipped with locks or other security devices that permit access only by a registered caregiver or registered patient.

(9)  “Usable marijuana” means the dried leaves and flowers of marijuana, and any mixture or preparation thereof, and does not include the seeds, stalks, and roots of the plant.

(10)  “Use for symptom relief” means the acquisition, possession, cultivation, use, transfer, or transportation of marijuana or paraphernalia relating to the administration of marijuana to alleviate the symptoms or effects of a registered  patient’s debilitating medical condition which is in compliance with all the limitations and restrictions of this subchapter.  For the purposes of this definition, “transfer” is limited to the transfer of marijuana and paraphernalia between a registered caregiver and a registered patient.

§ 4473.  REGISTERED PATIENTS; QUALIFICATION STANDARDS AND PROCEDURES

(a)  To become a registered patient, a person must be diagnosed with a debilitating medical condition by a physician in the course of a bona fide physician-patient relationship. 

(b)  The department of public safety shall review applications to become a registered patient using the following procedures:

(1)  A patient with a debilitating medical condition shall submit, under oath, a signed application for registration to the department.  If the patient is under the age of 18 the application must be signed by both the patient and a parent or guardian.  The application shall require identification and contact information for the patient and the patient’s registered caregiver applying for authorization under section 4474 of this title, if any.  The applicant shall attach to the application a copy of relevant portions of the patient’s medical record sufficient to establish that the patient has a debilitating medical condition.

(2)  The department shall contact the physician for purposes of verifying the existence of a bona fide physician-patient relationship and the accuracy of the medical record.  The department may approve an application, notwithstanding the six-month requirement in subdivision 4472(1) of this title, if the department is satisfied that the debilitating medical condition is of recent or sudden onset and that the patient has not had a previous physician who is able to verify the nature of the disease and its symptoms.

(3)  The department shall approve or deny the application for registration in writing within 30 days from receipt of a completed registration application.  If the application is approved, the department shall issue the applicant a registration card which shall include the registered patient’s name and photograph, as well as a unique identifier for law enforcement verification purposes under section 4474d of this title.

(4)(A)  A review board is established.  The medical practice board shall appoint three physicians licensed in Vermont to constitute the review board.  If an application under subdivision (1) of this subsection is denied, within seven days the patient may appeal the denial to the board.  Review shall be limited to information submitted by the patient under subdivision (1) of this subsection, and consultation with the patient’s treating physician.  All records relating to the appeal shall be kept confidential.  An appeal shall be decided by majority vote of the members of the board.

(B)  The board shall meet periodically to review studies, data, and any other information relevant to the use of marijuana for symptom relief.  The board may make recommendations to the general assembly for adjustments and changes to this chapter.

(C)  Members of the board shall serve for three-year terms, beginning February 1 of the year in which the appointment is made, except that the first members appointed shall serve as follows:  one for a term of two years, one for a term of three years, and one for a term of four years.  Members shall be entitled to per diem compensation authorized under section 1010 of Title 32.  Vacancies shall be filled in the same manner as the original appointment for the unexpired portion of the term vacated.

§ 4474.  REGISTERED CAREGIVERS; QUALIFICATION STANDARDS AND PROCEDURES

(a)  A person may submit a signed application to the department of public safety to become a registered patient’s registered caregiver.  The department shall approve or deny the application in writing within 30 days.  The department shall approve a registered caregiver’s application and issue the person an authorization card, including the caregiver’s name, photograph, and a unique identifier, after verifying:

(1)  the person will serve as the registered caregiver for one registered patient only; and

(2)  the person has never been convicted of a drug‑related crime.

(b)  Prior to acting on an application, the department shall obtain from the Vermont criminal information center a Vermont criminal record, an out-of-state criminal record, and a criminal record from the Federal Bureau of Investigation for the applicant.  For purposes of this subdivision, “criminal record” means a record of whether the person has ever been convicted of a drug-related crime.  Each applicant shall consent to release of criminal records to the department on forms substantially similar to the release forms developed by the center pursuant to section 2056c of Title 20.  The department shall comply with all laws regulating the release of criminal history records and the protection of individual privacy.  The Vermont criminal information center shall send to the requester any record received pursuant to this section or inform the department of public safety that no record exists.  If the department disapproves an application, the department shall promptly provide a copy of any record of convictions and pending criminal charges to the applicant and shall inform the applicant of the right to appeal the accuracy and completeness of the record pursuant to rules adopted by the Vermont criminal information center.  No person shall confirm the existence or nonexistence of criminal record information to any person who would not be eligible to receive the information pursuant to this subchapter.

(c)  A registered caregiver may serve only one registered patient at a time, and a registered patient may have only one registered caregiver at a time.

§ 4474a.  REGISTRATION; FEES

(a)  The department shall collect a fee of $100.00 for the application authorized by sections 4473 and 4474 of this title.  The fees received by the department shall be deposited into a registration fee fund and used to offset the costs of processing applications under this subchapter.

(b)  A registration card shall expire one year after the date of issue, with the option of renewal, provided the patient submits a new application which is approved by the department of public safety, pursuant to sections 4473 or 4474 of this title, and pays the fee required under subsection (a) of this section.

§ 4474b.  EXEMPTION FROM CRIMINAL AND CIVIL PENALTIES; SEIZURE OF PROPERTY

(a)  A person who has in his or her possession a valid registration card issued pursuant to this subchapter and who is in compliance with the requirements of this subchapter, including the possession limits in subdivision 4472(4) of this title, shall be exempt from arrest or prosecution under subsection 4230(a) of this title. 

(b)  A physician who has participated in a patient’s application process under subdivision 4473(b)(2) of this title shall not be subject to arrest, prosecution, or disciplinary action under chapter 23 of Title 26, penalized in any manner, or denied any right or privilege under state law, except for giving false information, pursuant to section 4474c(f) of this title.

(c)  No person shall be subject to arrest or prosecution for constructive possession, conspiracy, or any other offense for simply being in the presence or vicinity of a registered patient or registered caregiver engaged in use of marijuana for symptom relief.

(d)  A law enforcement officer shall not be required to return marijuana or paraphernalia relating to its use seized from a registered patient or registered caregiver. 

§ 4474c.  PROHIBITIONS, RESTRICTIONS, AND LIMITATIONS REGARDING THE USE OF MARIJUANA FOR SYMPTOM RELIEF

(a)  This subchapter shall not exempt any person from arrest or prosecution for:

(1)  Being under the influence of marijuana while:

(A)  operating a motor vehicle, boat, or vessel, or any other vehicle propelled or drawn by power other than muscular power;

(B)  in a workplace or place of employment; or

(C)  operating heavy machinery or handling a dangerous instrumentality.

(2)  The use or possession of marijuana by a registered patient or a registered caregiver:

(A)  for purposes other than symptom relief as permitted by this subchapter; or

(B)  in a manner that endangers the health or well-being of another person.

(3)  The smoking of marijuana in any public place, including:

(A)  a school bus, public bus, or other public vehicle;

(B)  a workplace or place of employment;

(C)  any school grounds;

(D)  any correctional facility; or 

(E)  any public park, public beach, public recreation center, or youth center.

(b)  This chapter shall not be construed to require that coverage or reimbursement for the use of marijuana for symptom relief be provided by:

(1)  a health insurer as defined by subdivision 9402(7) of this title, or any insurance company regulated under Title 8;

(2)  an employer; or

(3)  for purposes of worker’s compensation, an employer as defined in subdivision 601(3) of Title 21. 

(c)  A registered patient or registered caregiver who elects to grow marijuana to be used for symptom relief by the patient may do so only if the marijuana is cultivated in a single, secure indoor facility.

(d)  A registered patient or registered caregiver may not transport marijuana in public unless it is secured in a locked container. 

(e)  Within 72 hours after the death of a registered patient, the patient’s registered caregiver shall return to the department of public safety for disposal any marijuana or marijuana plants in the possession of the patient or registered caregiver at the time of the patient’s death.  If the patient did not have a registered caregiver, the patient’s next of kin shall contact the department of public safety within 72 hours after the patient’s death and shall ask the department to retrieve such marijuana and marijuana plants for disposal.

(f)  Notwithstanding any law to the contrary, a person who knowingly gives to any law enforcement officer false information to avoid arrest or prosecution, or to assist another in avoiding arrest or prosecution, shall be imprisoned for not more than one year or fined not more than $1,000.00 or both.  This penalty shall be in addition to any other penalties that may apply for the possession or use of marijuana.

§ 4474d.  LAW ENFORCEMENT VERIFICATION OF INFORMATION; RULEMAKING

(a)  The department of public safety shall maintain and keep confidential, except as provided in subsection (b) of this section and except for purposes of a prosecution for false swearing under section 2904 of Title 13, the records of all persons registered under this subchapter or registered caregivers in a secure database accessible by authorized department of health employees only.

(b)  In response to a person-specific or property-specific inquiry by a law enforcement officer or agency made in the course of a bona fide investigation or prosecution, the department may verify the identities and registered property addresses of the registered patient and the patient’s registered caregiver.

(c)  The department shall maintain a separate secure electronic database accessible to law enforcement personnel 24 hours a day that uses a unique identifier system to allow law enforcement to verify that a person is a registered patient or registered caregiver.

(d)  The department of public safety shall implement the requirements of this act within 120 days of its effective date.  The department may adopt rules under chapter 25 of Title 3 and shall develop forms to implement this act.

Sec. 2.  REPORT

The department of public safety, with input from the review board and the department of health, shall report by January 1, 2006 to the house and senate committees on health and welfare and judiciary on the use of marijuana for symptom relief.  The report shall include:

(1)  statistics regarding the number of people using marijuana for symptom relief, the number of applications received by the department for persons to become registered patients or registered caregivers, and the types of debilitating medical conditions presented in the applications;

(2)  a summary of the current research, including the conclusions of the Institute of Medicine, regarding whether there are legitimate medical uses of marijuana;

(3)  an evaluation of the costs of permitting the use of marijuana for symptom relief, including any costs to law enforcement officers and costs of any litigation;

(4)  an analysis of whether permitting the use of marijuana for symptom relief has made it more difficult to enforce criminal laws relating to substance abuse;

(5)  an analysis of whether permitting the use of marijuana for symptom relief has increased illegal marijuana use by creating a public perception that arrests for possession and use of marijuana have become less likely to occur and criminal charges have become more difficult to prosecute;

(6)  statistics regarding the number of prosecutions brought against doctors and other persons for violations of this act; and

(7)  whether the United States Food and Drug Administration has altered its position regarding the use of marijuana for medical purposes or has approved alternative delivery systems for marijuana.

     And by amending the title to read:

     AN ACT RELATING TO MARIJUANA USE BY PERSONS WITH SEVERE ILLNESS.

Thereupon, pending the question, Shall the Senate concur in the House proposal of amendment?, Senator Canns moved that the bill be ordered to lie.

Which was disagreed to.

Thereupon, the question, Shall the Senate concur in the House proposal of amendment?, was decided in the affirmative on a roll call, Yeas 20, Nays 7.

Senator Canns having demanded the yeas and nays, they were taken and are as follows:

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bloomer, Campbell, Collins, Condos, Cummings, Doyle, Dunne, Gander, Kittell, Lyons, MacDonald, Mayo, Miller, Munt, Scott, Sears, Snelling, Welch, White.

Those Senators who voted in the negative were: Canns, Gossens, Illuzzi, Maynard, Mazza, Mullin, Shepard.

Those Senators absent and not voting were: Bartlett, Greenwood, Leddy.

Thereupon, on motion of Senator Welch, the rules were suspended and action on the bill was ordered messaged to the House forthwith.

House Proposals of Amendment to Senate Proposals of Amendment Concurred In; Bill Messaged

H. 752.

House proposals of amendment to Senate proposals of amendment to House bill entitled:

An act relating to advance directives for health care.

Were taken up.

The House proposes to the Senate to amend the Senate proposal of amendment as follows:

First:  In Sec. 13, in the second sentence, before the words “and developing enhanced training in pain management,” by inserting the words: developing a program, subject to subsequent legislative authorization, for monitoring all prescription drug use in Vermont and tracking the prescribing patterns of providers of federally controlled substances;

Second:  By striking out Secs. 15, 16a, and 16b in their entirety and renumbering Sec. 17 to be Sec. 15

Thereupon, the question, Shall the Senate concur in the House proposals of amendment to the Senate proposals of amendment?, was decided in the affirmative on a roll call, Yeas 27, Nays 0.

Senator Shepard having demanded the yeas and nays, they were taken and are as follows:

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bloomer, Campbell, Canns, Collins, Condos, Cummings, Doyle, Dunne, Gander, Gossens, Greenwood, Illuzzi, Kittell, Lyons, MacDonald, Maynard, Mayo, Mazza, Miller, Mullin, Munt, Scott, Shepard, Snelling, Welch, White.

Those Senators who voted in the negative were: None.

Those Senators absent and not voting were: Bartlett, Leddy, Sears.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Recess

On motion of Senator Welch the Senate recessed until 2:00 P.M.

Called to Order

At 2:10 P.M. the Senate was called to order by the President.

Message from the House No. 78

     A message was received from the House of Representatives by Mr. Otterman, its Second Assistant Clerk, as follows:

Mr. President:

I am directed to inform the Senate the House has adopted Joint Resolutions of the following titles:

J.R.H. 72.  Joint resolution proposing the establishment of a model outdoor lighting policy.

J.R.H. 78.  Joint resolution urging the federal government to investigate the impact of high gasoline prices and to develop a comprehensive national energy policy.

In the adoption of which the concurrence of the Senate is requested.

The Governor has informed the House of Representatives that on the eighteenth day of May, 2004, he approved and signed a bill originating in the House of the following title:

H. 629.  An act relating to bullying prevention policies.

Message from the House No. 79

     A message was received from the House of Representatives by Mr. MaGill, its First Assistant Clerk, as follows:

Mr. President:

I am directed to inform the Senate the House  has considered the reports of the Committees of Conference upon the disagreeing votes of the two Houses on House bills of the following titles:

H. 79.  An act relating to prohibiting the disclosure of communications made to interpreters for hearing impaired persons.

H. 199. An act relating to photographs on driver licenses and learner permits.

H. 482.  An act relating to compensation for certain state employees.

H. 528.  An act relating to probation and pretrial detention.

H. 547.  An act relating to the confidentiality and noncommercial distribution of certain tax records and data.

And has adopted the same on its part.

Message from the House No. 80

     A message was received from the House of Representatives by Mr. Otterman, its Second Assistant Clerk, as follows:

Mr. President:

I am directed to inform the Senate the House has  considered the report of the Committees of Conference upon the disagreeing votes of the two Houses on House bills of the following titles:

H. 632.  An act relating to worker’s compensation.

H. 778.  An act relating to miscellaneous agricultural subjects.

And has adopted the same on its part.

     The House has considered Senate proposal of amendment to House bill of the following title:

     H. 754. An act relating to the creation of a fire safety division within the department of public safety.

     And has concurred therein.

Consideration Resumed; Bill Amended; Third Reading Ordered; Rules Suspended; Bill Passed in Concurrence with Proposals of Amendment; Bill Messaged

H. 784.

Consideration was resumed on House bill entitled:

An act relating to income tax.

Thereupon, pending the question, Shall the proposal of amendment of the Committee on Finance be amended as recommended by Senator Shepard?, Senator Shepard requested and was granted leave to withdraw the proposal of amendment.

Thereupon, the recurring question, Shall the Senate propose to the House to amend the bill as recommended by the Committee on Finance?, was decided in the affirmative.

Thereupon, third reading of the bill was ordered on a roll call, Yeas 28, Nays 0.

Senator Welch having demanded the yeas and nays, they were taken and are as follows:

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bartlett, Bloomer, Campbell, Canns, Collins, Condos, Cummings, Doyle, Dunne, Gander, Gossens, Greenwood, Illuzzi, Kittell, Lyons, MacDonald, Maynard, Mayo, Mazza, Miller, Mullin, Munt, Scott, Shepard, Snelling, Welch, White.

Those Senators who voted in the negative were: None.

Those Senators absent and not voting were: Leddy, Sears.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was placed on all remaining stages of its passage in concurrence with proposals of amendment forthwith.

Thereupon, the bill was read the third time and passed in concurrence with proposals of amendment.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Rules Suspended; Reports of Committee of Conference Accepted and Adopted on the Part of the Senate; Bills Messaged

H. 272.

Pending entry on the Calendar for notice, on motion of Senator Welch, the rules were suspended and the report of the Committee of Conference on House bill entitled:

An act relating to nutrition policy in Vermont schools.

Was taken up for immediate consideration.

Senator Collins, for the Committee of Conference, submitted the following report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon House bill entitled:

H. 272.  An act relating to nutrition policy in Vermont schools.

Respectfully reports that it has met and considered the same and recommends that the House concur with the Senate proposal of amendment and that the bill be further amended as follows:

First:  In Sec. 2, 16 V.S.A. § 216(c) following subdivision (4) by adding a new subdivision (5) to read:

(5)  Create a process for schools to share with the department of health any data collected about the height and weight of students in kindergarten through grade six.  The commissioner of health may report any data compiled under this subdivision on a county‑wide basis.  Any reporting of data must protect the privacy of individual students and the identity of participating schools.

Second:  In Sec. 3(a)(1) following the words “A definition of nutritious foods, nutritional guidelines, and” by inserting the clause , to the extent financially feasible,

Third:  In Sec. 3(a)(5) by striking the subdivision in its entirety and inserting in lieu thereof a new subdivision (5) to read:

(5)  A process for reporting to the community on the health status of students.

                                                                        DONALD E. COLLINS

                                                                         HULL P. MAYNARD, JR.

                                                                        KEVIN J. MULLIN

                                                                 Committee on the part of the Senate

                                                                        CAROLYN BRANAGAN

                                                                        HARRY CHEN

                                                                        ROSEMARY McLAUGHLIN

                                                                 Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

H. 294.

Pending entry on the Calendar for notice, on motion of Senator Welch, the rules were suspended and the report of the Committee of Conference on House bill entitled:

An act relating to a contractor’s lien for labor or materials.

Was taken up for immediate consideration.

Senator Campbell, for the Committee of Conference, submitted the following report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon House bill entitled:

H. 294.  An act relating to a contractor’s lien for labor or materials.

Respectfully reports that it has met and considered the same and recommends that the Senate recede from its proposals of amendment, and that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  9 V.S.A. § 1921 is amended to read:

§ 1921.  EXTENT OF LIEN; NOTICE

* * *

(b)  A person who by virtue of a contract or agreement, either in writing or parol, with an agent, contractor, or subcontractor of the owner thereof, performs labor or furnishes materials for erecting, repairing, moving, or altering such improvements shall have a lien, to secure the payment of the same upon such improvements and the lot of land upon which the same stand, by giving notice in writing to such owner or his or her agent having charge of such property that he or she shall claim a lien for labor or material.  The notice shall include the date that payment is due, if known.  Such lien shall extend to the portions of the contract price remaining unpaid at the time such notice is received.

(c)  A lien herein provided for shall not continue in force for more than one hundred and twenty 180 days from the time when payment became due for the last of such labor performed or materials furnished unless a notice of such lien is filed in the office of the town clerk as hereinafter provided.

* * *

Sec. 2.  9 V.S.A. § 1922 is amended to read:

§ 1922.  EFFECT OF LIEN

Unless he a person has satisfied or paid the claim upon which such lien is founded after he the person has received written notice of a lien as provided for in section subsection 1921(b) of this title, or unless the lien has not been perfected within the time required under section 1924 of this title, such person shall not deed, mortgage, or otherwise convey property which is subject to a lien as provided herein without disclosing such lien to the vendee or mortgagee in writing or stating the existence of the same in the instrument conveying or mortgaging such property.  If he the person shall fail so to disclose such lien, he or she shall be liable to the person injured in a civil action on this statute for the damages so sustained.

Sec. 3.  9 V.S.A. § 1924 is amended to read:

§ 1924.  ACTION TO ENFORCE LIEN

Within three months 180 days from the time of filing such memorandum, if such payment is due at the time of such filing and within three months 180 days from the time such payment becomes due, if not due at the time of such filing, such person may commence his or her action for the same, and cause such real estate or other property to be attached thereon.  If he or she obtains judgment in the action, the record of such judgment shall contain a brief statement of the contract upon which the same is founded.

                                                                        JOHN F. CAMPBELL

                                                                        JOHN H. BLOOMER, JR.

                                                                        MATT DUNNE

                                                                 Committee on the part of the Senate

                                                                        MARGARET K. FLORY

                                                                        DUNCAN F. KILMARTIN

                                                                        WILLEM JEWETT

                                                                 Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

H. 566.

Pending entry on the Calendar for notice, on motion of Senator Welch, the rules were suspended and the report of the Committee of Conference on House bill entitled:

An act relating to civil monetary penalty for welfare fraud.

Was taken up for immediate consideration.

Senator Sears, for the Committee of Conference, submitted the following report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon House bill entitled:

H. 566.  An act relating to civil monetary penalty for welfare fraud.

Respectfully reports that it has met and considered the same and recommends that the House accede to the Senate’s proposal of amendment and that the bill be amended by changing the title of the bill to read:  AN ACT RELATING TO MEDICAID FRAUD

                                                                        RICHARD W. SEARS

                                                                        JOHN H. BLOOMER, JR.

                                                                        SUSAN J. BARTLETT

                                                                 Committee on the part of the Senate

                                                                        MICHAEL KAINEN

                                                                        RICHARD MAREK

                                                                        WILLIAM LIPPERT

                                                                 Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Rules Suspended; Report of Committee of Conference Not Accepted and Adopted on the Part of the Senate; Second Committee of Conference Requested; Second Committee of Conference Appointed; Bill Messaged

H. 35.

Pending entry on the Calendar for notice, on motion of Senator Welch, the rules were suspended and the report of the Committee of Conference on House bill entitled:

An act relating to child support, custody, and visitation.

Was taken up for immediate consideration.

Senator Sears, for the Committee of Conference, submitted the following report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon House bill entitled:

An act relating to child support, custody, and visitation.

Respectfully reports that it has met and considered the same and recommends that the that the Senate recede from its proposals of amendment and that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  15 V.S.A. § 656 is amended to read:

§ 656.  COMPUTATION OF PARENTAL SUPPORT OBLIGATION

* * *

(c)  If the noncustodial parent’s available income is greater than the self‑support reserve but payment of a child support order based on application of the guideline would reduce the noncustodial parent’s income below the self‑support reserve, the noncustodial parent’s share of the total support obligation shall be presumed to be the difference between the self-support reserve and his or her available income.  If the noncustodial parent owes arrears to the custodial parent, the court shall not order the payment of arrears in an amount that, by itself or in combination with the noncustodial parent’s share of the total support obligation, would reduce the noncustodial parent’s income below the self-support reserve, unless the custodial parent can show good cause why the payment of arrears should be ordered despite the fact that such an order would drop the noncustodial parent’s income below the self‑support reserve.  Such arrears shall remain the responsibility of the noncustodial parent and be subject to repayment at a time when the noncustodial parent’s income is above the self-support reserve.

Sec. 2.  15 V.S.A. § 663(e) is added to read:

§ 663.  SUPPORT ORDERS; REQUIRED CONTENTS

* * *

(e)  A child support order shall include the following language:  “A PARENT OR ANY OTHER PERSON TO WHOM SUPPORT HAS BEEN GRANTED, OR ANY PERSON CHARGED WITH SUPPORT, MAY FILE A MOTION FOR A MODIFICATION OF A CHILD SUPPORT ORDER UNDER 15 V.S.A. § 660.  A MODIFICATION MAY BE GRANTED UPON A REAL, SUBSTANTIAL, AND UNANTICIPATED CHANGE OF CIRCUMSTANCES, INCLUDING LOSS OF EMPLOYMENT OR A CONSIDERABLE REDUCTION OR INCREASE IN SALARY OR WAGES.  AN OBLIGOR IS RESPONSIBLE FOR ANY REQUIRED PAYMENTS SET FORTH IN AN ORDER UNLESS THE ORDER IS VACATED OR MODIFIED BY A COURT.  THUS, ANY SUBSEQUENT AGREEMENT BETWEEN THE PARTIES THAT DIFFERS FROM THE ORDER IS NOT LEGALLY BINDING, AND THE OBLIGOR IS STILL LEGALLY REQUIRED TO PAY THE AMOUNT ORDERED BY THE COURT.”

Sec. 3.  15 V.S.A. § 668a is amended to read:

§ 668a.  ENFORCEMENT OF VISITATION

(a)  When a noncustodial parent who is ordered to pay child support or alimony and who is awarded visitation rights fails to pay child support or alimony, the custodial parent shall not refuse to honor the noncustodial parent’s visitation rights.

(b)  When a custodial parent refuses to honor a noncustodial parent’s visitation rights, the noncustodial parent shall not fail to pay any ordered child support or alimony.

(c)  If a custodial parent refuses to honor a noncustodial parent’s visitation rights without proper cause, the court may restore shall enforce such rights unless it finds good cause for the failure or that a modification of the visitation rights is in the best interests of the child.  Unless restoration of the visitation is not in the best interests of the child, enforcement of the visitation rights shall include the restoration of the amount of visitation improperly denied.  When a party files a motion for enforcement of parent‑child contact under this subsection, the court shall conduct a hearing within 30 days of service of the motion.

(d)  A person who violates this section may be punished by contempt of court or other remedies as the court deems appropriate, including awarding attorney’s fees and costs to the prevailing party.

(e)  If a custodial parent refuses to honor a noncustodial parent’s visitation rights without good cause, the court may modify the parent-child contact order if found to be in the best interests of the child.  Good cause shall include a pattern or incidence of domestic or sexual violence, a history of failure to honor the visitation schedule agreed to in the parent-child contact order, or reasonable fear for the child or the custodial parent’s safety.

(f)  All parent-child contact orders issued by the family court in connection with a divorce or parentage proceeding shall bear the following statement:  “A PERSON WHO FAILS TO COMPLY WITH ALL TERMS OF THE CURRENT ORDER GOVERNING PARENT-CHILD CONTACT MAY BE SUBJECT TO CONTEMPT OF COURT CHARGES.  THE COURT MAY IMPOSE ADDITIONAL REMEDIES, INCLUDING A MODIFICATION OF THE CURRENT PARENT-CHILD CONTACT ORDER IF FOUND TO BE IN THE BEST INTERESTS OF THE CHILD.”

Sec. 4.  15 V.S.A. § 606 is amended to read:

§ 606.  ACTION TO RECOVER MAINTENANCE, CHILD SUPPORT, AND SUIT MONEY; SANCTION FOR NONCOMPLIANCE

* * *

(d)  In lieu of interest on unpaid child support which has accrued under a child support order, a child support surcharge shall be imposed on past-due child support.  The surcharge shall be computed and assessed monthly at a rate of one percent or an annual rate of 12 percent and shall not be compounded.  All surcharges shall be deemed principal and not interest.  Payments received for child support obligations shall be allocated and distributed as follows:

(1)  first to current support obligations;

(2)  second to arrearages; and

(3)  third to surcharge arrears.

Sec. 5.  15 V.S.A. § 650 is amended to read:

§ 650.  Legislative findings and purpose

The legislature finds and declares as public policy that after parents have separated or dissolved their marriage it is in the best interests of their minor child to have the opportunity for maximum continuing physical and emotional contact with both parents, unless direct physical harm or significant emotional harm to the child or a parent is likely to result from such contact.  The legislature further finds and declares as public policy that parents have the responsibility to provide child support and that child support orders should reflect the true costs of raising children and approximate insofar as possible the standard of living the child would have enjoyed had the marriage not been dissolved family remained intact.  

Sec. 6.  15 V.S.A. § 658(b) is amended to read:

(b)  A request for support may be made by either parent, by a guardian, or by the departments department of social and rehabilitation services or social welfare prevention, assistance, transition, and health access, or by the office of child support, if a party in interest.  A court may also raise the issue of support on its own motion.

Sec. 7.  15 V.S.A. § 660 is amended to read:

§ 660.  MODIFICATION

* * *

(f)  Notwithstanding the provisions of this section to the contrary, the court, in its discretion, may modify an order as to past support installments which accrued subsequent to the date of a non-custodial parent’s incarceration within the confines of a correctional facility.

Sec. 8.  15 V.S.A. § 661 is amended to read:

§ 661.  CHILD SUPPORT MAINTENANCE supplement

(a)  A party may request a child support maintenance supplement to be paid while a child support obligation arising out of an action for divorce support exists.  After considering the respective financial circumstances of the parties, including gross income, assets, liabilities, including tax liabilities, and the obligation to pay child support, the court shall order payment of a child support maintenance supplement to the custodial parent obligee to correct any disparity in the financial circumstances of the parties if the court finds that the disparity has resulted or will result in a lower standard of living for the child than the child would have if living with the noncustodial parent.

(b)  Any sum awarded under this section shall be taken into consideration in making an order under section 752 of this title.

(c)  On motion of either parent or any other, a person to whom a child support maintenance supplement has previously been granted or any, a person previously charged with paying a child support maintenance supplement, and upon a showing of a real, substantial, and unanticipated change of circumstances, the court may annul, vary, or modify a supplement order, whether or not the order is based on a stipulation or agreement.  A real, substantial, unanticipated change of circumstances shall be deemed to exist if the proportion of income of the parties varies more than 15 percent from the time the order was issued, or if either parent’s gross income changes by more than 15 percent.

(d)  This section shall not apply to orders or modifications made prior to April 1, 1987.

Sec. 9.  15 V.S.A. § 787 is amended to read:

§ 787.  EMPLOYER’S RESPONSIBILITY; COMPENSATION

* * *

(c)(1)  Any employer who fails to withhold wages pursuant to a wage withholding order within 10 working days of receiving actual notice or upon the next payment of wages to the obligor, whichever is later, shall be liable to the obligee in the amount of the wages required to be withheld. 

(2)  No employer who withholds wages from the obligor shall, without good cause, fail to forward payment to the registry for more than 30 days.  An employer who violates this subdivision shall be assessed a civil penalty of not more than $100.00 for a first violation and not more than $1,000.00 for a second or subsequent violation.  

(3)  A proceeding pursuant to this section shall be heard by the family court judge.

Sec. 10.  33 V.S.A. § 3902(f) is added to read:

(f)  If a support order has been entered and the legal custodian and obligee relinquishes physical responsibility of the child to a caretaker without modifying the physical rights and responsibilities order, the office of child support may change the payee of support upon the caretaker’s receipt of reach up family assistance (RUFA) from the department of prevention, assistance, transition, and health access.  The obligor’s obligation under the support order to pay child support and medical support continues but shall be payable to the office of child support upon the caretaker’s receipt of RUFA and shall continue so long as the assignment is in effect.  The office of child support shall notify the obligor and obligee under the support order, by first class mail at last known address, of the change of payee.

Sec. 11.  33 V.S.A. § 115 is amended to read:

§ 115.  Access to financial records of deposit accounts AND INSURANCE SETTLEMENTS of individuals who owe overdue child support

(a)  As used in this section:

(1)  “Claimant” means a Vermont resident who is entitled to receive a payment or settlement from an insurer in an amount not less than $3,000.00.

(2)  “Depositor” means an owner of an account in a financial institution and includes “share account holders” of credit unions.

(2)(3)  “Financial institution” means a trust company, savings bank, industrial bank, commercial bank, savings and loan association, or credit union organized under the laws of this state or authorized to do business in this state.

(4)  “Insurer” means a company licensed to issue policies of insurance for personal injury liability or workers’ compensation benefits.

(3)(5)  “Match” means an automated comparison by name, Social Security number, and, if available, date of birth of a list of obligors provided to a financial institution by the office and a list of depositors of a financial institution a comparison of delinquent child support obligors and a list of depositors in the case of financial institutions or a list of claimants in the case of an insurer.  The automated comparison shall occur by name, Social Security number, and, if available, date of birth.

(4)(6)  “Obligor” means a person who owes child support.

(5)(7)  “Office” means the office of child support.

(6)(8)  “Overdue support” means a debt of one-quarter of the annual support obligation or more for maintenance and support of a child or children and the obligor had prior notice of the debt and a prior opportunity to contest the amount owed.  “Overdue support” includes spousal support or alimony being collected in conjunction with child support.

(b)  Upon written request from the director of the office of child support and provided the financial institution or insurer has the technological capacity to perform a match, a financial institution or insurer shall perform a match of obligors who owe overdue child support.  The office shall make its computerized information necessary for a match available in a form that is compatible with the technology used by the financial institution or insurer that will perform the search.  A financial institution shall not be required to perform a match under this section more often than once every quarter.  An insurer shall perform a match under this section prior to issuing any personal injury liability or workers’ compensation insurance payment or settlement to a claimant and shall, within one business day, notify the office of child support if a claimant is found to owe overdue child support.  If the insurer determines from the automated comparison that the claimant does not owe overdue support, the insurer may make the payment to the claimant. 

(c)  After completing a match requested under subsection (b) of this section, a financial institution or insurer shall notify the office of child support if a depositor or claimant is found to owe overdue support.  The notification shall contain the following information, if available to the financial institution or insurer through its matching procedure, for each account identified:

(1)  The full name, date of birth, and address of the obligor.

(2)  The Social Security number of the obligor.

(3)  The obligor’s account number or the claimant’s claim number.

(4)  The amount of deposits contained in the obligor’s account or the amount of the pending insurance payment or settlement.

(d)  A financial institution shall send a match list compiled under this section to the office at the address designated by the office. If a financial institution or insurer finds through a match that overdue child support is owed by a depositor or claimant, it shall forward the funds to the office in compliance with attachment procedures set forth in 15 V.S.A. § 799(c).

(e)  The financial institution shall not provide notice in any form to a depositor contained in a match list submitted to the office under subsection (d) of this section.  Failure to provide notice to a depositor shall not constitute a violation of the financial institution’s duty of good faith to its customers.

(f)  A financial institution or insurer may charge the office a fee for services provided under this section; provided, that the fee shall not exceed the actual costs incurred by the financial institution or insurer.

(g)  The information provided by the office to a financial institution or insurer under this section shall be confidential and shall be used only for the purpose of carrying out the requirements of this section.

(h)  This section shall not apply to that portion of a claim resulting in payments on behalf of the claimant issued to a third party where there is documentation showing that the third party has provided or agreed to provide the claimant with a benefit or service related to the claim, including the services of an attorney or a medical doctor or to any portion of a claim based on damage to or loss of real property.

(i)  Notwithstanding any statute or regulation to the contrary, no financial institution or insurer or the agents, employees, or directors shall be liable for disclosure under this section or for any other action taken in good faith in accordance with this section.  Immunity shall also extend to any fees, interest, and penalties that would otherwise be imposed.

(j)  Insurers shall have until July 1, 2005 to comply with this section.

Sec. 12.  33 V.S.A. § 4103 is amended to read:

§ 4103.  REGISTRY

(a)  The office of child support shall establish a registry for the following purposes:

* * *

(4)  Notifying employers in cases involving wage withholding of the amounts to be withheld for support, the amount of income exempt from withholding, and the dates for beginning, reducing, increasing, and terminating withholding pursuant to the terms of the support order.  The office shall accommodate employer withholdings based upon the employer’s payroll period and shall provide return envelopes to the employer for sending the payment to the office.

Sec. 13.  1 V.S.A. § 317 is amended to read:

§ 317.  DEFINITIONS; PUBLIC AGENCY; PUBLIC RECORDS AND DOCUMENTS

* * *

(c)  The following public records are exempt from public inspection and copying:

* * *

(34)  affidavits of income and assets as provided in 15 V.S.A. § 662 and Rule 4 of the Vermont Rules for Family Procedure.

Sec. 14.  STUDY

(a)  The house committee on judiciary shall convene while the general assembly is out of session for the purpose of examining the family court system and the laws relating to child support, child custody, parent‑child contact, and any other issues the committee finds relevant to creating a comprehensive, fair, and functional family court system.  The committee shall, at a minimum, review the following issues:

(1)  existing programs in family court, including the use of parent-child coordinators, panels, and mediators, as well as the funding of such programs;

(2)  existing certification requirements for resources used in family court;

(3)  the current policy of ordering sole custody to one parent when one parent objects to shared custody and related matters concerning custody such as parenting plans;

(4)  existing training of judges, court staff, pro se litigants, and attorneys;

(5)  the use of contempt charges for enforcement of payment of child support arrears and whether an updated criminal nonsupport statute is needed;

(6)  whether an automatic cost of living adjustment should be added to child support obligations and matters relating to the child support guidelines;

(7)  when a child support obligation should terminate in situations involving termination of parental rights, voluntary relinquishment, or adoption;

(8)  the role of family evaluations and how they should operate;

(9)  the role of guardians ad litem, attorneys appointed to represent the best interests of the child, and related issues;

(10)  supervised visitation programs;

(11)  domestic violence issues in family court, including whether a conviction for domestic violence should create a presumption against awarding custody;

(12)  whether the office of child support should enter into reciprocal arrangements on behalf of the state with authorities from other jurisdictions to establish and enforce support obligations;

(13)  employer responsibilities with respect to child support obligations;

(14)  whether the court should have the discretion to order an obligor to attend employment‑, educational‑, or training‑related activities if the court finds that participation in such activities would assist fulfilling a child support obligation, and whether the court should have the discretion to order an obligor to attend substance abuse or other counseling if the court finds that such counseling may assist the parent to achieve stable employment;

(15)  the advisability of establishing an automatic cost of living adjustment to child support orders; and

(16)  the match of child support arrears against insurance settlements and the subsequent attachment procedures.

(b)  Members of the committee shall serve only while in legislative office.  A substitute shall be appointed for a legislator who no longer serves in such capacity.  Vacancies shall be appointed in the same manner as original appointments.

(c)  The committee shall have the assistance and cooperation of the judiciary and the administration.  The legislative council and the joint fiscal office shall provide professional and administrative support for the committee.  The committee may hold public hearings.

(d)  Members of the committee shall be entitled to per diem compensation and reimbursement for expenses in accordance with 2 V.S.A. § 406.  The committee is authorized to meet up to five times to accomplish its work under this section.

(e)  The committee findings and recommendations, including proposals for legislative action, shall be presented to the general assembly and the governor no later than December 15, 2005.  The committee shall issue a brief interim report on the insurance matter provided in subdivision (a)(16) of this section no later than January 15, 2005.

Sec. 15.  EFFECTIVE DATE

Secs. 9 and 12 of this act shall take effect September 1, 2004. 

                                                                        RICHARD W. SEARS

                                                                        BERNIER MAYO

                                                                        JEANETTE K. WHITE

                                                                 Committee on the part of the Senate

                                                                        MARGARET FLORY

                                                                        MICHAEL KAINEN

                                                                 Committee on the part of the House

Thereupon, pending the question, Shall the Senate accept and adopt the report of the Committee of Conference?, on motion of Senator Bloomer the Senate refused to accept and adopt the report of the Committee of Conference and requested a second Committee of Conference.

Thereupon, pursuant to the request of the Senate, the President announced the appointment of

                                         Senator Campbell

                                         Senator Bloomer

                                         Senator Sears

as members of the second Committee of Conference on the part of the Senate to consider the disagreeing votes of the two Houses.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Rules Suspended; Committee Relieved of Further Consideration; Bill Committed;

H. 412.

On motion of Senator Welch, the rules were suspended, and H. 412 was taken up for immediate consideration, for the purpose of relieving the Committee on Rules from further consideration of the bill.  Thereupon, pending entry on the Calendar for notice tomorrow, the House bill entitled:

An act relating to assessing a fee of one-half cent per gallon of heating oil sold in the state to be used to finance the cleanup of spills from aboveground storage tanks.

On motion of Senator Welch, was committed to the Committee on Natural Resources and Energy.

Thereupon, pending entry on the Calendar for notice, on motion of Senator MacDonald, the rules were suspended and the bill was taken up for immediate consideration.

Thereupon, on motion of Senator MacDonald the rules were suspended and the bill was referred to the Committee on Finance with the report of the Committee on Natural Resources and Energy intact.

Rules Suspended; Proposals of Amendment; Point of Order; Third Reading Ordered; Rules Suspended; Bill Passed in Concurrence with Proposals of Amendment; Bill Messaged

H. 412.

Pending entry on the Calendar for notice, on motion of Senator MacDonald, the rules were suspended and House bill entitled:

An act relating to assessing a fee of one-half cent per gallon of heating oil sold in the state to be used to finance the cleanup of spills from aboveground storage tanks..

Was taken up for immediate consideration.

     Senator MacDonald, for the Committee on Natural Resources and Energy, to which the bill was referred, reported recommending that the Senate propose to the House to amend the bill by adding a new Sec. 4 to read as follows and by renumbering the remaining sections to be numerically correct:

Sec. 4.  10 V.S.A. § 1922(14) is added to read:

(14)  “Bulk storage tank” means any aboveground petroleum storage tank at a facility required to have a Spill Prevention Control and Countermeasure (SPCC) Plan pursuant to 40 CFR section 112.

And that the bill ought to pass in concurrence with such proposal of amendment.

Senator MacDonald, for the Committee on Finance, to which the bill was referred reported recommending that the bill ought to pass in concurrence with proposal of amendment.

Thereupon, the bill was read the second time by title only pursuant to Rule 43, and the proposal of amendment was agreed to.

Thereupon, pending the question, Shall the bill be read the third time?, Senators Condos and Sears moved that the Senate propose to the House to amend the bill by adding a new section to be numbered Sec. 6 to read as follows:

Sec. 6.  24 V.S.A. § 138(a) is amended to read:

(a)  Local option taxes are authorized under this section for the purpose of affording municipalities an alternative method of raising municipal revenues. to facilitate the transition and reduce the dislocations in those municipalities that may be caused by reforms to the method of financing public education under the Equal Educational Opportunity Act of 1997.  Accordingly,

(1)  the local option taxes authorized under this section may be imposed by a municipality only during calendar years 1999 through 2004;

(2)  a municipality opting to impose a local option tax may do so prior to July 1, 1998 to be effective beginning January 1, 1999, and anytime after December 1, 1998 a local option tax shall be effective beginning on the next tax quarter following 30 days' notice to the department of taxes of the imposition; and all authority to opt to impose a local option tax under this section shall terminate September 1, 2003, and all authority to impose a local option tax shall terminate on December 31, 2004; and

(3)  a local option tax may only be adopted by a municipality in which:

(A)  the education property tax rate in 1997 was less than $1.10 per $100.00 of equalized education property value; or

(B)  the equalized grand list value of personal property, business machinery, inventory, and equipment is at least ten percent of the equalized education grand list as reported in the 1998 Annual Report of the Division of Property Valuation and Review; or

(C)  the combined education tax rate of the municipality will increase by 20 percent or more in fiscal year 1999 or in fiscal year 2000 over the rate of the combined education property tax in the previous fiscal year For any municipality which imposes a local option tax under this section, the tax shall be effective beginning with the next tax quarter following 30 days’ notice to the department of taxes of the imposition. 

Thereupon, pending the question, Shall the Senate propose to the House to amend the bill as moved by Senators Condos and Sears? Senator MacDonald raised a point of order under Sec. 402 of Mason’s Manual of Legislative Procedure on the grounds that the proposal of amendment offered by Senators Condos and Sears was not germane to the bill and therefore could not be considered by the Senate.

Thereupon, the President sustained the point of order and ruled that the proposal of amendment offered by Senators Condos and Sears was not germane to the bill in that the proposal of amendment, dealing with local option taxes, was not sufficiently related to the subject matter of the bill, which dealt with petroleum clean-up fund and assessments for clean-up of spills from above-ground storage tanks.

Thereupon, Senators Sears moved that the rules be suspended ant that the Senate be allowed to consider a non-germane amendment, which was disagreed to on a roll call, Yeas 10, Nays 17.

Senator Sears having demanded the yeas and nays, they were taken and are as follows:

Roll Call

Those Senators who voted in the affirmative were: Condos, Cummings, Doyle, Dunne, Gander, Maynard, Miller, Sears, Shepard, White.

Those Senators who voted in the negative were: Ayer, Bartlett, Bloomer, Canns, Collins, Gossens, Greenwood, Kittell, Lyons, MacDonald, Mayo, Mazza, Mullin, Munt, Scott, Snelling, Welch.

Those Senators absent and not voting were: Campbell, Illuzzi, Leddy.

Thereupon, the recurring question, Shall the bill be read the third time?, was decided in the affirmative on a roll call, Yeas 26, Nays 2.

Senator Sears having demanded the yeas and nays, they were taken and are as follows:

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bartlett, Bloomer, Canns, Collins, Condos, Cummings, Doyle, Dunne, Gander, Gossens, Greenwood, Illuzzi, Kittell, Lyons, MacDonald, Maynard, Mayo, Mazza, Miller, Munt, Scott, Shepard, Snelling, Welch, White.

Those Senators who voted in the negative were: Mullin, Sears.

Those Senators absent and not voting were: Campbell, Leddy.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was placed on all remaining stages of its passage in concurrence with proposals of amendment forthwith.

Thereupon, the bill was read the third time and passed in concurrence with proposals of amendment.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Point of Order; Bill Passed in Concurrence with Proposal of Amendment; Bill Messaged

H. 201.

House bill entitled:

An act relating to a farm viability program.

Was taken up.

Thereupon, pending third reading of the bill, Senator Illuzzi moved that the rules be suspended to permit consideration of a non-germane proposal of amendment.

Thereupon, the question, Shall the rules be suspended to permit consideration of a non-germane amendment?, was decided in the negative on a roll call, Yeas 17, Nays 12. (the necessary 3/4 vote not being attained)

Senator Mazza having demanded the yeas and nays, they were taken and are as follows:

Roll Call

Those Senators who voted in the affirmative were: Ayer, Campbell, Condos, Cummings, Dunne, Gander, Gossens, Illuzzi, Kittell, Lyons, MacDonald, Miller, Munt, Sears, Snelling, Welch, White.

Those Senators who voted in the negative were: Bartlett, Bloomer, Canns, Collins, Doyle, Greenwood, Maynard, Mayo, Mazza, Mullin, Scott, Shepard.

Those Senators absent and/or not voting were: Leddy.

Thereupon, the recurring question, Shall the bill pass in concurrence with proposal of amendment?, was decided in the affirmative.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Senate Resolution Adopted

S.R. 31.

Senate resolution entitled:

Senate resolution urging the United States Congress and the United States Food and Drug Administration to work cooperatively to implement the necessary federal statutory and regulatory changes to permit physicians to prescribe marijuana for palliative purposes.

Having been placed on the Calendar for action, was taken up and adopted.

Appointments Confirmed

Under suspension of the rules (and particularly, Senate Rule 93), as moved by Senator Welch, the following Gubernatorial appointments were confirmed together as a group by the Senate, without reports given by the Committees to which they were referred and without debate:

     Susan Davis of Shelburne – Travel Information Council – October 22, 2003, to February 28 ,2005.

     Steven Goodrich of North Bennington – Plumbers Examining Board – December 15, 2003, to June 30, 2007.

     Caryn Feinberg of Shelburne – Vermont State Housing Authority – July 14, 2003, to February 28, 2008.

Recess

On motion of Senator Welch the Senate recessed until 5:00 P.M.

Called to Order

At 6:35 P.M. the Senate was called to order by the President.

Message from the House No. 81

     A message was received from the House of Representatives by Mr. MaGill, its First Assistant Clerk, as follows:

Mr. President:

     I am directed to inform the Senate the House  has considered Senate proposal of amendment to House bill of the following title:

H. 201.  An act relating to a farm viability program.

And has refused to concur therein and asks for a Committee of Conference upon the disagreeing votes of the two Houses;

And the Speaker has appointed as members of such committee on the part of the House

                                         Rep. Smith of New Haven

                                         Rep. McAllister of Highgate

                                         Rep. Dunsmore of Georgia

The House has considered the report of the Committees of Conference upon the disagreeing votes of the two Houses on House bills of the following titles:

H. 272.  An act relating to nutrition policy in Vermont schools.

H. 294.  An act relating to a contractor’s lien for labor or materials.

And has adopted the same on its part.

The House has considered Senate proposal of amendment to House bill of the following title:

H. 412.  An act relating to assessing a fee of one-half cent per gallon of heating oil sold in the state to be used to finance the cleanup of spills from aboveground storage tanks.

And has concurred therein.

Pursuant to the request of the Senate for a second Committee of Conference upon the disagreeing votes of the two Houses on House bill of the following title:

H. 35.  An act relating to child support, custody, and visitation.

The Speaker has appointed as members of such committee on the part of the House

                                         Rep. Flory of Pittsford

                                         Rep. Kainen of Hartford

                                         Rep. Lippert of Hinesburg

Rules Suspended; Report of Committee of Conference Accepted and Adopted on the Part of the Senate; Bill Messaged

H. 764.

Pending entry on the Calendar for notice, on motion of Senator Welch, the rules were suspended and the report of the Committee of Conference on House bill entitled:

An act relating to the state’s transportation capital program and project development plan.

Was taken up for immediate consideration.

Senator Mazza, for the Committee of Conference, submitted the following report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon House bill entitled:

H. 764.  An act relating to the state’s transportation capital program and project development plan.

Respectfully reports that it has met and considered the same and recommends that the Senate recede from its proposal of amendment and that the bill be further amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  TRANSPORTATION CAPITAL PROGRAM FOR 2005; PROJECT DEVELOPMENT PLAN FOR 2006-2009; APPROVAL OF PROJECT CANCELLATIONS

(a)  The transportation capital program for fiscal year 2005 and project development plan for fiscal years 2006-2009, appended to the agency of transportation’s proposed fiscal year 2005 budget, as amended by this act, are adopted to the extent federal, state, and local funds are available.  The transportation capital program and project development plan hereby adopted supersede all previous transportation capital programs and project development plans.

(b)  As used in this act, unless otherwise indicated, the term “agency” means the agency of transportation and the term “secretary” means the secretary of transportation.  As used in this act, the table heading “As Proposed” means the transportation capital program and project development plan referenced in subsection (a) of this section; the table heading “As Amended” means the amendments as made by this act; the table heading “Change” means the difference obtained by subtracting the “As Proposed” figure from the “As Amended” figure; and the term “change” or “changes” in the text refers to the project- and program-specific amendments, the aggregate sum of which equals the net “Change” in the applicable table heading.

* * * Program Development – Paving * * *

Sec. 2.  PAVING PROGRAM

(a)  Total authorized spending in the program development – paving program is modified as follows:

     FY05                          As Proposed          As Amended                   Change

     Total                              32,535,000            32,892,683                 357,683

     Source of Funds

     State                                8,480,500              7,578,183                -902,317

     Federal                          24,054,500            25,314,500              1,260,000

(b)  These changes are made:

(1)  to adjust for the shifting of $1,200,000 in transportation funds from fiscal year 2005 to fiscal year 2004 to initiate paving work in the spring of 2004; and

(2)  to add $297,683 in transportation funds and $1,260,000 in federal funds for the Waterbury Interstate 89 paving project and, at the discretion of the secretary, other approved projects in the paving program in the fiscal year 2005 transportation capital program.

* * * Program Development – Roadway Program * * *

Sec. 3.  PROGRAM DEVELOPMENT – ROADWAY PROGRAM

The following modifications are made to the program development – roadway program:

(1)  Due to scheduling delays, funding for the Burlington Riverside Avenue MEGC 5000(15), page 2, is amended to read:

     FY05                          As Proposed          As Amended                   Change

     PE                                                                                                             0

     ROW                                                                                                        0

     Construction                    2,700,000              1,818,000                -882,000

     Other                                             0                            0                            0

     Total                                2,700,000              1,818,000                -882,000

     Source of Funds

     State                                     60,000                   33,540                  -26,460

     Federal                            1,900,000              1,062,100                -837,900

     Local                                  740,000                 722,360                  -17,640

(2)  Due to scheduling delays, funding for the Burlington southern connector MEGC M 5000(1) project within the development and evaluation program is reduced by $16,170 in transportation funds, $512,050 in federal funds, and $10,780 in local funds. 

(3)  In fulfillment of the state’s obligations with respect to the siting of the southeastern Vermont correctional facility, the Springfield STP 0136( ) project shall be prioritized within the roadway development and evaluation program in fiscal year 2005 to the extent required to develop the project to shelf project status for construction in fiscal year 2006 by the time the agency presents its proposed fiscal year 2006 transportation program to the general assembly.

(4)  Within the funds authorized for program development roadway development and evaluation, the agency shall allocate $50,000 to initiate scoping for the Route 5 Putney Road project STP 2000( ).

(5)  A new project is added to the SFY 2004 and SFY 2005 development and evaluation section:  The following project has received earmarked Federal Highway Administration Surface Transportation Funds in the amount of $1,000,000.00 for the necessary construction of a new road, “Market Street,” in the city of South Burlington.  This project shall appear as follows:

South Burlington Market Street  STP 5200( )  Construction of Market Street

(6)  A new project is added for state FY 2005 as follows:  Project Colchester TCSP TCSE(007) has received a Transportation Community System Preservation (TCSP) earmark in the amount of $994,100 for the design and construction of the Campus Connector Road.  This road starts from the intersection of VT 15 and Johnson Avenue in Colchester extending northeasterly approximately 3,000 feet to its intersection with Barnes Avenue in the former Fort Ethan Allen.  This project shall appear as follows:

Colchester Campus Road TCSP TCSE(007) – Design and Construction of Campus Road.

(7)  Funding for the Bennington Bypass South NHF 019-1(4) project within the development and evaluation program is reduced by $48,000 in transportation funds and $192,000 in federal funds.  Funding for the project is authorized in Sec. 11 of this Act.

(8)(A)  The schedule for Williston-Essex IR 089-2(12) & NH 033-1() project (hereafter the “Circ”) is modified as follows:

     FY05                          As Proposed          As Amended                   Change

     PE                                                                                                             0

     ROW                                                                                                        0

     Construction                  21,933,930                            0           -21,933,930

     Other                                             0                            0                            0

     Total                              21,933,930                            0           -21,933,930

     Source of Funds

     State                                4,386,786                            0             -4,386,786

     Federal                          17,547,144                            0           -17,547,144

     Local                                             0                            0                            0

(B)  The funds scheduled for expenditure on the project in fiscal year 2005 and any funds authorized for expenditure on the project in the prior fiscal year and unspent as of May 15, 2004 shall be reallocated in the following order of priority:

(i)  First, up to $3,700,000 for the Circ;

(ii)  Second, up to $6,600,000 for the Winooski downtown redevelopment project;

(iii)  Third, up to $3,000,000 for projects in the Chittenden County Metropolitan Planning Organization (CCMPO) area, as selected by the secretary in cooperation with the CCMPO; and

(iv)  Fourth, all remaining funds to shelf projects outside the CCMPO area or to accelerate projects outside the CCMPO area in the state’s fiscal year 2005 transportation capital program and project development plan in the paving and bridge programs as selected by the secretary.

(C)  The secretary of transportation shall submit by June 30, 2004 to the members of the House and Senate committees on transportation a list of the projects for FY04 and 05 to be funded and shall provide a two-week period for the committees to respond.

* * * Bike and Pedestrian Facilities * * *

Sec. 4.  BIKE AND PEDESTRIAN FACILITIES

The following modifications are made to the bike and pedestrian facilities program.

(1)  The schedule for the Royalton STP BIKE(40) project is amended to read:

     FY05                          As Proposed          As Amended                   Change

     PE                                          4,500                            0                    -4,500

     ROW                                                                                                        0

     Construction                                                                                              0

     Other                                                                                                         0

     Total                                       4,500                            0                    -4,500

     Source of Funds

     State                                          500                            0                       -500

     Federal                                   4,000                            0                    -4,000

(2)  The schedule for the Bennington STP WALK(13) project is amended to read:

     FY05                          As Proposed          As Amended                   Change

     PE                                        45,000                            0                  -45,000

     ROW                                                                                                        0

     Construction                                                                                              0

     Other                                                                                                         0

     Total                                     45,000                            0                  -45,000

     Source of Funds

     State                                       5,000                            0                    -5,000

     Federal                                 40,000                            0                  -40,000

(3)  Authorized spending for the development and evaluation of new projects in the bicycle and pedestrian facilities program is modified as follows:

FY05                          As Proposed          As Amended                   Change

     Total                                     45,000                   90,000                   45,000

     Source of Funds

     State                                       5,000                   10,000                     5,000

     Federal                                 40,000                   80,000                   40,000

* * * Public Transit * * *

Sec. 5.  PUBLIC TRANSIT

The following modifications are made to the public transit program.  Federal surface transportation program funds in the amount of $150,000 are added to the public transit authorization to be used in the 49 U.S.C. § 5310 program.  Funding for public transit is modified as follows:

     FY05                          As Proposed          As Amended                   Change

     PE                                                                                                             0

     ROW                                                                                                        0

     Construction                                                                                              0

     Other                               9,367,432              9,517,432                 150,000

     Total                                9,367,432              9,517,432                 150,000

     Source of Funds

     State                                5,041,182              5,041,182                            0

     Federal                            3,480,000              3,630,000                 150,000

     Local                                  846,250                 846,250                            0

* * * Town Highway Bridges * * *

Sec. 6.  TOWN HIGHWAY BRIDGE PROGRAM

(a)  Total authorized spending in the town highway bridge program is modified as follows:

     FY05                          As Proposed          As Amended                   Change

     Total                              19,157,867            20,931,263              1,773,396

     Source of Funds

     State                                5,785,154              7,129,406              1,344,252

     Federal                          12,141,877            12,417,827                 275,950

     Local                               1,230,836              1,384,030                 153,194

(b)  These changes are made to add $1,344,252 in transportation funds, $275,950 in federal funds, and $153,194 in local funds, to be allocated by the secretary to approved projects in the town highway bridge program in the fiscal year 2005 transportation capital program.

* * * Rail Program * * *

Sec. 7.  RAIL PROGRAM

(a)  Total authorized spending in the rail program is modified as follows:

     FY05                          As Proposed          As Amended                   Change

     Total                              11,850,236            10,670,236             -1,180,000

     Source of Funds

     State                                7,613,236              6,433,236             -1,180,000

     Federal                            4,237,000              4,237,000                            0

     Local                                             0                            0                            0

(b)  These changes are made:

(1)  to reduce funding for passenger rail service by $700,000 in transportation funds to adjust authorized spending to anticipated contract obligations; and

(2)  to reduce funding for rail infrastructure projects by $500,000 in transportation funds.  These funds are anticipated to be restored as provided in Sec. 56 of this act.  To the extent the funds are not restored, the secretary is authorized to reduce spending on rail infrastructure projects as required.

* * * Transportation Buildings Program * * *

Sec. 8.  TRANSPORTATION BUILDINGS PROGRAM

The following modifications are made to the transportation buildings program:

(1)  The schedule for Ferrisburgh Maintenance and DMV Facility, page 6, is amended to read:

     FY05                          As Proposed          As Amended                   Change

     PE                                          4,000                     4,000                            0

     ROW                                                                                                        0

     Construction                       500,000                 220,000                -280,000

     Other                                                                                                         0

     Total                                   504,000                 224,000                -280,000

     Source of Funds

     State                                   504,000                 224,000                -280,000

     Federal                                                                                                      0

     Local                                                                                                         0

(2)  Funding for the Bridport Shared Facility project is added to read:

     FY05                          As Proposed          As Amended                   Change

     PE                                                                                                             0

     ROW                                                                                                        0

     Construction                                                     280,000                 280,000

     Other                                                                                                         0

     Total                                                                 280,000                 280,000

     Source of Funds

     State                                                                 280,000                 280,000

     Federal                                                                                                      0

     Local                                                                                                         0

* * * Policy and Planning * * *

Sec. 9.  POLICY AND PLANNING

(a)  Total authorized spending in the policy and planning program is modified as follows:

     FY05                                Proposed          As Amended                   Change

     Personal Services             3,260,021              3,185,021                  -75,000

     Operating Expenses            504,783                 504,783                            0

     Grants                             4,080,769              4,130,769                   50,000

     Total                                7,845,573              7,820,573                  -25,000

     Source of Funds

     State                                1,707,221              1,742,221                   35,000

     Federal                            6,138,352              6,078,352                  -60,000

(b)  These changes are made:

(1)  to reduce funding of personal services and operating expenses by $15,000 in transportation funds and $60,000 in federal funds, the reductions to be made at the discretion of the secretary;

(2)  to fund the youth corps program with $200,000 of federal enhancement funds in lieu of $200,000 of other federal funds; and

(3)  to add $50,000 in transportation funds to fund the grant to the Northwest Regional Planning Commission provided for in Sec. 28 of this act.

* * * Additional Federal Funds * * *

Sec. 10.  ADDITIONAL FEDERAL FUNDS

(a)  To the extent federal funds become available beyond the funds authorized in fiscal year 2005 in the state’s transportation capital program and project development plan, the secretary is authorized to use such funds, consistent with federal rules, in the following order of priority:

(1)  First, subject to the requirements of 19 V.S.A. § 10h(a), to cover cash flow shortages on projects due to increased costs or faster than anticipated progress.

(2)  Second, to shelf projects or to accelerate projects in the state’s fiscal year 2005 transportation capital program and project development plan in the paving and bridge programs.

(3)  Third, to accelerate other projects in the state’s transportation capital program and project development plan.

* * * Bennington Bypass * * *

Sec. 11.  BENNINGTON BYPASS

Sec. 12 of No. 64 of the Acts of 2001 as amended by Sec. 27 of No. 56 of the Acts of 2003 is amended to read:

Sec. 12.  BENNINGTON BYPASS

The agency of transportation is directed to complete the conceptual design of highway project Bennington Bypass South NHF 019 1(4).  The agency shall not incur expenditures for conceptual design in excess of $200,000.00 in any fiscal year for the Bennington Bypass South project.  Right of way for this project shall not be acquired without the approval of the general assembly.  All design activity on the Bennington Bypass North project south of Route 9 shall be postponed until approved by the general assembly.

(a)  Activity on the Bennington Bypass South NHF 019-1(4) and the Bennington Bypass North NHF 019-1(5) project south of Vermont Route 9 shall be for:

(1)  design work necessary to identify sites for the cost‑effective disposal of earth borrow resulting from the construction of the Bennington Bypass North project north of Vermont Route 9;

(2)  the acquisition of earth borrow sites so identified; and

(3)  the acquisition of right-of-way qualifying as hardship under federal rules.

(b)  In fiscal year 2005, the expenditure of up to $450,000, consisting of $250,000 authorized in and notwithstanding Sec. 28 of No. 56 of the Acts of 2003 and $200,000 in fiscal year 2005 funds, is authorized for the purposes specified in subsection (a) of this section.

* * * Cancellation of Projects * * *

Sec. 12.  CANCELLATION OF PROJECTS

Pursuant to 19 V.S.A. § 10g(f) (legislative approval for cancellation of projects), the general assembly approves cancellation of the following projects:

(1)  program development – bike and pedestrian facilities program:

(A)  Royalton STP BIKE (40);

(2)  program development – roadway program:

(A)  Morgan STP TA02(11).

* * * State Highway System * * *

Sec. 13.  DELETIONS TO STATE HIGHWAY SYSTEM

Pursuant to 19 V.S.A. § 15(2), approval is granted for the secretary of transportation to enter into an agreement with the town of Newport to relinquish to the town’s jurisdiction a segment of Vermont Route 100, approximately 800 feet in length, between approximate mile markers 3.12 and 3.27, which is located between the intersection of Vermont Route 100 with Vermont Route 14 and Vermont Route 14 approach.  

* * * Central Garage * * *

Sec. 14.  CENTRAL GARAGE FUND

Notwithstanding 19 V.S.A. § 13(c), in fiscal year 2005, the requirement to transfer an amount equal to one percent of the prior year’s transportation fund appropriation to the central garage fund shall be suspended.

Sec. 15.  CENTRAL GARAGE EQUIPMENT REPLACEMENT PROGRAM

The agency of transportation in cooperation with the department of finance and management and the joint fiscal office shall analyze the performance and status of the central garage equipment replacement program.  The objective of this program is to establish an annual budget system that adequately and efficiently accounts and provides for the present and future equipment replacement needs of the agency.  The agency shall submit a report along with its recommendations regarding the program to the members of the House and Senate committees on transportation by January 15, 2005.

* * * Transportation Fund Support for General Government * * *

Sec. 16.  19 V.S.A. § 11a is amended to read:

§ 11a.  TRANSPORTATION FUNDS APPROPRIATED FOR SUPPORT OF GOVERNMENT

The For fiscal year 2006 and thereafter, the maximum amount of transportation funds that may be appropriated for the support of government, other than for the agency of transportation, transportation pay act funds, the cost of maintaining and staffing rest areas, construction of transportation capital facilities used by the agency of transportation, and transportation debt service, shall not exceed 19 18.5 percent of the total of the prior fiscal year transportation fund appropriations.

Sec. 17.  CONDITION TO ADJUSTMENT OF TRANSPORTATION FUNDS USED FOR SUPPORT OF GOVERNMENT

Section 16 of this act shall take effect provided that, at the July 2004 or January 2005 emergency board meetings pursuant to 32 V.S.A. § 305a, the official fiscal year 2006 available general fund revenue forecast is increased by at least one percent from the official forecast adopted in January 2004.

* * * Town Highway Programs * * *

Sec. 18.  19 V.S.A. § 306(e) and (h) are amended to read:

(e)  State aid for town highway structures.  There shall be an annual appropriation for grants to municipalities for maintenance, including actions to extend life expectancy, and construction of bridges, culverts, and other structures, including causeways and retaining walls, intended to preserve the integrity of the traveled portion of class 1, 2, and 3 town highways.  The appropriation shall be allocated by the secretary after consideration of applications submitted by the towns. Each fiscal year, the agency shall approve qualifying projects with a total estimated state share cost of $3,490,000.00 at a minimum as new grants.  The agency’s proposed appropriation for the program shall take into account the estimated amount of qualifying invoices submitted to the agency with respect to project grants approved in prior years but not yet completed as well as with respect to new project grants to be approved in the fiscal year.  In a given fiscal year, should expenditures in the town highway structures program exceed the amount appropriated, the agency shall advise the governor of the need to request a supplemental appropriation from the general assembly to fund the additional project cost, provided that the agency has previously committed to completing those projects.

(h)  Class 2 town highway roadway program.  There shall be an annual appropriation for grants to municipalities for resurfacing, rehabilitation, or reconstruction of paved or unpaved class 2 town highways.  The appropriation shall be allocated by the secretary after consideration of applications submitted by the towns Each fiscal year, the agency shall approve qualifying projects with a total estimated state share cost of $4,240,000.00 at a minimum as new grants.  The agency’s proposed appropriation for the program shall take into account the estimated amount of qualifying invoices submitted to the agency with respect to project grants approved in prior years but not yet completed as well as with respect to new project grants to be approved in the fiscal year.  In a given fiscal year, should expenditures in the town highway class 2 roadway program exceed the amount appropriated, the agency shall advise the governor of the need to request a supplemental appropriation from the general assembly to fund the additional project cost, provided that the agency has previously committed to completing those projects.

* * * Transportation Bonding * * *

Sec. 19.  GENERAL OBLIGATION BONDS

(a)  Subject to subsection (b) of this section, the state treasurer, with the approval of the governor, is authorized to issue general obligation bonds in the amount of $1 million for the purpose of funding the appropriations of Sec. 20 of this act.

(b)  The state treasurer, with the approval of the governor, shall determine the appropriate form and maturity of the bonds authorized by this section consistent with the underlying nature of the appropriation to be funded.

(c)  The state treasurer shall allocate the estimated cost of bond issuance or issuances to the entities to which funds are appropriated pursuant to this section and for which bonding is required as the source of funds pursuant to 32 V.S.A. § 954.

(d)  It is the intent of the general assembly that future debt service for bonds authorized by this section shall be paid from the transportation fund.

Sec. 20.  TRANSPORTATION BONDS; APPROPRIATION OF BOND PROCEEDS

The sum of $1 million is appropriated to the agency from the bond revenue generated in Sec. 19 of this act, and the secretary shall allocate the funds to the  Alburg-Swanton BRF 036-1(1) project (VT 78, replacement of Bridge No. 2 over Missisquoi Bay of Lake Champlain), to defray part of the state share of right‑of-way and construction costs: 1,000,000.00

Sec. 21.  TRANSFER OF FUNDS; APPROPRIATED BOND FUNDS

The secretary of transportation, with the approval of the secretary of administration, may transfer any unexpended funds appropriated under Sec. 20 of this act to other approved projects in the fiscal year 2005 transportation capital program.

Sec. 22.  AVAILABILITY OF BOND PROCEEDS

The sums appropriated and the spending authority authorized by Secs. 19 through 21 of this act shall be continuing and shall not revert at the end of the fiscal year.

* * * Railroads * * *

Sec. 23.  APPROVAL OF TRANSACTIONS REGARDING STATE‑OWNED RAILROAD PROPERTY

Upon receiving satisfactory evidence of release of any interest of the Washington County Railroad Company, the secretary of transportation, as agent for the state of Vermont, is authorized to convey to the Vermont Economic Development Authority (VEDA), in consideration of $1.00, a parcel of land in the city of Montpelier between Stone Cutters Way and the Winooski River.  This parcel of land, sometimes known as 575 Stone Cutters Way or the “salt shed property,” shall be conveyed subject to a December 16, 1999 lease, as amended, between the State of Vermont, Agency of Transportation, joined by Washington County Railroad Company and the Pyralisk Arts Center, Inc.  The state’s interest in the existing Pyralisk lease shall be assigned to VEDA.  The secretary, in his or her discretion, may adjust the boundaries of the land to be conveyed to VEDA to accommodate the building plans of VEDA and Pyralisk.  VEDA shall be responsible for obtaining any necessary survey and subdivision approvals.

* * * Authority to Accept Donation of Land * * *

Sec. 24.  AUTHORITY TO ACCEPT DONATION OF LAND

The secretary of transportation, as agent for the state of Vermont, is authorized to accept donation of approximately 0.5 acre of land, in the town of Dover, which is located on the easterly side of VT 100.  The subject parcel, which is designated as #RT014 on the town of Dover tax map, is described in a March 30, 1992 decree of distribution from the estate of Elizabeth B. Forrest to John B. Forrest, Jr., Donald B. Forrest, and Patricia F. Collins, which is recorded in book 198, page 304 of the Dover land records. 

* * * Transportation Infrastructure Study Committee * * *

Sec. 25.  TRANSPORTATION INFRASTRUCTURE STUDY

(a)  The Vermont Transportation Infrastructure Funding Working Group is established to prepare a report to the general assembly that examines:

(1)   all alternatives to future funding opportunities, including, but not limited to, debt instruments such as general obligation bonds and Grant Anticipation Revenue Vehicles (GARVEE bonds); and

(2)  all alternative measures for closing the existing gap between the present and future costs of the state’s commitments to transportation projects and programs and the present and future level of resources projected to be available to meet such commitments to ensure that the state’s commitments and resources remain in balance on a consistent and fiscally conservative basis.

(b)  The working group shall be composed of the following ten members or their designees:  the secretary of administration, to serve as chair; the state treasurer; the secretary of transportation; two members of the Senate appointed by the committee on committees and two members of the House appointed by the speaker; the governor’s appointee to the capital debt affordability advisory committee; and two members from the private sector appointed by the governor, one with a background in transportation and the other in finance.  The committee is authorized to hold up to five meetings, at which point it is terminated.  Legislative members of the committee shall be entitled to per diem compensation and expense reimbursement as provided in 2 V.S.A. § 406(a).

(c)  Administrative support shall be provided by the agency of transportation, the legislative council, and the joint fiscal office with advice from the state's financial advisor.

(d)  The working group shall report its findings and conclusions to the governor, the speaker of the house and the president pro tempore of the senate, and the members of the House and Senate committees on transportation no later than January 15, 2005.

* * * Maintenance - Smart Carts * * *

Sec. 26.  MAINTENANCE

Total authorized spending in the maintenance program is increased by the sum of $45,000 in transportation funds for the purchase of up to nine vehicle speed indicator smart carts which shall be distributed for use by the maintenance districts.  The maintenance districts shall cooperate with municipalities to allow use of the carts at municipal project sites.  The agency shall submit a report to the House and Senate committees on transportation by January 15, 2005 on the use of the smart carts by the maintenance districts and municipalities.

* * * Use of Discarded Tires by Agency of Transportation * * *

Sec. 27.  AGENCY OF TRANSPORTATION USES FOR DISCARDED TIRES

A study group consisting of the secretary of transportation or designee, the secretary of natural resources or designee, and, to be appointed by the governor, a person in the business of selling tires, a person in the business of shredding tires, the chief executive officer of a solid waste district, and a representative of the American Council of Engineering Consultants shall investigate possible cost‑effective uses by the agency of transportation for shredded tires.  The agency of transportation shall identify a project for construction in the state fiscal year 2006 or 2007 in which shredded tires can be incorporated in a cost‑effective manner.  The agency of transportation shall provide administrative support for the study group and shall report by January 15, 2005 to the House and Senate committees on transportation on the feasibility of institutionalizing these practices in the development of Vermont’s projects.

* * * N.W. Regional Planning Commission; Federal Street Extension * * *

Sec. 28.  ST. ALBANS FEDERAL STREET EXTENSION

Notwithstanding 19 V.S.A. § 10j(e), the sum of $50,000 of transportation funds is authorized for the Northwest Regional Planning Commission to augment the Federal Street Extension scoping study done by the commission in 1995 to include additional intermodal connections for freight and passenger transportation and for engineering in preparation for construction of the extension from the St. Albans state highway to Federal Street.

* * * Enhancement Grant Program * * *

Sec. 29.  19 V.S.A. § 38(e) is amended to read:

§ 38.  TRANSPORTATION ENHANCEMENT GRANT PROGRAM

* * *

(e)(1)  For each fiscal year starting with fiscal year 2005, the state’s enhancement grant program for the fiscal year shall be  at the discretion of the secretary:

(A)  at a minimum, four percent of the adjusted amount ascertained by the agency under subdivision (d)(1) of this section; and

(B)  at a maximum, the adjusted amount ascertained by the agency under subdivision (d)(2) of this section.

(2)  The agency shall plan its budget accordingly and advise the general assembly in its recommended budget of the amount of the enhancement grant program:

(A)  if sufficient information is available to determine a sum certain, of the amount of the enhancement grant program; or

(B)  if sufficient information is not available to determine a sum certain, of the range within which the agency estimates the size of the enhancement grant program will be.

* * * Transportation Budget Structure * * *

Sec. 30.  19 V.S.A. § 10g is amended to read:

§ 10g.   ANNUAL REPORT; TRANSPORTATION CAPITAL PROGRAM; PROJECT DEVELOPMENT PLAN; ADVANCEMENTS, CANCELLATIONS, AND DELAYS

(a)  The agency of transportation’s project activities and expenditures in implementing the one-year transportation capital program shall, except for subsection (f) of this section, adhere to the one-year transportation capital program as set forth by the general assembly, transportation shall annually present to the general assembly a multiyear transportation program covering the same number of years as the statewide transportation improvement plan (STIP), consisting of the recommended budget for all agency activities for the ensuing fiscal year and projected spending levels for all agency activities for the following fiscal years.  The program shall include a description and year‑by‑year breakdown of recommended and projected funding of all projects proposed to be funded within the time period of the STIP and, in addition, a description of all projects which are not recommended for funding in the first fiscal year of the proposed program but which are projected to be ready for construction at that time (shelf projects).  The program shall be consistent with the planning process established by Act No. 200 of the Acts of 1988 (1987 Adjourned Session), as codified in 3 V.S.A. chapter 67 and 24 V.S.A. chapter 117, the statements of policy set forth in sections 10b-10f of this title, and the long-range systems plan, corridor studies, and project priorities developed through the capital planning process under section 10i of this title.

(b)  Projected spending in future fiscal years shall be based on revenue estimates as follows:

(1)  with respect to state funds, on the consensus forecast for transportation fund revenue adopted pursuant to 32 V.S.A. § 305a and for later years on other consensus or executive branch estimates of transportation fund revenues; and

(2)  with respect to federal funds, on such federal regulations that apply to the development of the statewide transportation improvement plan (STIP).

(b)(c) The agency shall prepare a project development plan which assists the general assembly in the establishment of the state’s transportation activities over the second through fifth years following the period covered by the one‑year transportation capital program. The program proposed by the agency shall include systemwide indicators developed by the agency to describe the condition of the Vermont transportation network.  The program shall discuss the background and utility of the indicators, track the indicators over time, and, where appropriate, recommend the setting of targets for the indicators.

(c)  The agency shall develop a program for implementing an infrastructure preservation plan which contains performance levels, goals, activities and their costs in the transportation capital program and project development plan.

(d)(1)  In addition to the multiyear transportation program described in subsection (a) of this section, the agency shall annually present to the general assembly an analysis of the balance between the state’s commitments to transportation projects and total available resources for projects over the ten‑year period commencing with the fiscal year of the transportation program.  The analysis shall include, on a current dollar basis, an estimate of the total remaining cost of all projects in construction, development, and evaluation or candidate status in the agency’s proposed multiyear transportation program, including individual estimates and projected schedules for all projects with a total project cost estimate in excess of $10 million, and an estimate, on a current dollar basis, of the total resources projected to be available to cover project expenses during the ten‑year period.

(2)  The projection of available resources called for in subdivision (1) of this subsection shall be determined in the following manner.  Total appropriations to the agency exclusive of internal service funds for each of the five previous fiscal years shall be determined.  From that total for each fiscal year shall be deducted appropriations for annual programs and other noncapital project agency activities.  Appropriations for administration, overhead, and other ongoing agency functions required for the support of capital project activities shall be apportioned on a reasonable basis and added back to the total which shall represent the total of appropriations for and in support of the agency’s capital project activities for that fiscal year.  The resulting appropriations totals of capital project‑related appropriations shall be adjusted for inflation in a procedure approved by the joint fiscal committee.  The resulting inflation adjusted figures for the five previous fiscal years shall be averaged, and the average multiplied by ten shall be used as the estimate of the total resources projected to be available to cover project expenses during the ten‑year period.

(3)  To the extent the estimate of remaining costs exceeds the estimate of available resources, the agency shall submit to the general assembly a plan to bring costs and resources into balance.  The plan shall include recommendations regarding the scheduling, suspension, or cancellation of projects, cost saving initiatives, revenue raising initiatives, and other organizational, project design, project execution, or financial measures or initiatives which shall ensure that the state’s commitments will be adequately and realistically funded.

(e)  In addition to the multiyear transportation program described in subsection (a) of this section, the agency shall annually present to the general assembly a description of all projects with respect to which:

(1)  the total project cost estimate exceeds $5,000,000;

(2)  federal funds are proposed to be used to cover a portion of the project costs; and

(3)  approval of the proposed activity and expenditure of federal funds on the project would expose the state to potential liability to reimburse the federal government in the event the project is subsequently cancelled.

(d)(f)  Each year following enactment of a transportation capital program under this section, the agency shall prepare and make available to the public the one-year transportation capital program and four-year project development plan established by the general assembly.  The resulting document shall be entered in the permanent records of the agency and of the board, and shall constitute the state’s official transportation construction program and project development plan.

(e)(g)  Each year after a transportation capital program as provided by this section has been enacted and before November 1, the agency shall participate in five or more public hearings, during preparation of the transportation program, the agency shall hold five meetings in partnership with Vermont’s regional planning commissions and shall hold at least one statewide hearing, providing an opportunity for input from different areas of the state, to receive public comments regarding the one-year transportation capital program under subsection (a) of this section enacted by the last session of the general assembly, and the corresponding anticipated four-year capital development program under subsection (b) of this section which is proposed by the agency, both programs to be presented in the context of the long-range systems plan as provided by section 10i of this title.  The agency shall provide the board with advance notice of each public hearing and the opportunity for board members to attend overall transportation program.  The meetings may be part of regularly scheduled meetings of the regional planning commissions and shall include discussion of the general trends and direction of the transportation program, progress in management of transportation assets, aspects of specific transportation projects in the geographic area of the region, and other topics as appropriate.  A record of the hearing or hearings meetings, including any recommendations and comments, shall be prepared by the agency of transportation and submitted to the house and senate committees on transportation and used by the agency for future use in its preparation of transportation capital program proposals.

(f)(h)  Should capital projects in the capital transportation program for the current fiscal year be delayed because of unanticipated problems with permitting, right-of-way acquisition, construction, local concern, or availability of federal or state funds, the secretary is authorized to advance projects in the approved capital transportation program and project development plan, giving priority to shelf projects.  The secretary is further authorized to undertake projects to resolve emergency or safety issues.  Should an approved project in the current transportation capital program require additional funding to maintain the approved schedule as outlined in the one-year capital program, the agency is authorized to allocate the necessary resources.  With respect to projects in the approved transportation program, the secretary shall notify, in the district affected, the regional planning commission, the municipality, legislators, and members of the senate and house committees on transportation of any significant change project schedules in the approved one-year capital program in design, change in construction cost estimates requiring referral to the transportation board under 19 V.S.A. § 10h, or any change which likely will affect the fiscal year in which the project is planned to go to construction.  No project shall be cancelled without the approval of the general assembly.

(g)(i)  For the purpose of enabling the state, without delay, to take advantage of economic development proposals that increase jobs for Vermonters, a transportation project certified by the governor as essential to the economic infrastructure of the state economy, or a local economy, may be approved for construction by a committee comprised of the joint fiscal committee meeting with the chairs of the transportation committees, or their designees without explicit project authorization through an enacted transportation capital program and project development plan, in the event that such authorization is otherwise required by law.

(h)(j)  The agency of transportation, in coordination with the agency of natural resources and the division for historic preservation, shall prepare and implement a plan for advancing approved projects contained in the one-year  capital approved transportation program.  The plan shall include the assignment of a project manager from the agency of transportation for each project.  Additionally, the The agency of transportation, the agency of natural resources, and the division for historic preservation shall set forth provisions for expediting the permitting process and establishing a means for evaluating each project during concept design planning if more than one agency is involved to determine whether it should be advanced or deleted from the program.

(i)(k) In implementing the project manager system, the agency shall include, but not be limited to, use of critical path techniques. For purposes of subsection (h) of this section, “emergency or safety issues” shall mean:

(1)  serious damage to a transportation facility caused by a natural disaster over a wide area, such as a flood, hurricane, earthquake, severe storm, or landslide; or

(2)  catastrophic or imminent catastrophic failure of a transportation facility from any cause; or

(3)  any condition identified by the secretary as hazardous to the traveling public; or

(4)  any condition evidenced by fatalities or a high incidence of crashes.

Sec. 31.  19 V.S.A. § 10i is amended to read:

§ 10i.  TRANSPORTATION PLANNING PROCESS

(a)  Long-range systems plan.  The agency shall establish and implement a planning process through the adoption of a long-range multi-modal systems plan integrating all modes of transportation.  The long-range multi-modal systems plan shall be based upon agency transportation policy developed under section 10b of this title, other policies approved by the legislature, agency goals, mission, and objectives, and demographic and travel forecasts, design standards, performance criteria, and funding availability.  The long-range systems plan shall be developed with participation of the public, local, and regional governmental entities, and pursuant to the planning goals and processes set forth in Act No. 200 of the Acts of 1988.

(b)  Corridor studies.  The agency shall develop transportation corridor studies for the highway mode identifying as needed, consistent with asset management policies implemented by the agency, which identify environmental issues, community concerns, and travel projections.  For each corridor, problems shall be identified and ranked according to their criticality and severity.

(c)  Transportation program.  The transportation program shall be developed in a fiscally responsible manner to accomplish the following objectives:

(1)  Managing, maintaining and improving the state’s existing transportation infrastructure to provide capacity, safety, and flexibility in the most cost‑effective and efficient manner.

(2)  Developing an integrated transportation system that provides Vermonters with transportation choices.

(3)  Strengthening the economy, protecting the quality of the natural environment, and improving Vermonters’ quality of life.

(c)(d)  Project identification and scope.  The agency shall identify and develop specific projects pursuant to corridor studies consistent with the objectives set forth in subsection (c) of this section.  For each project, a project scope shall be prepared to identify the problem to be resolved by the project, the preferred alternative, project limits, its conceptual design and estimated costs.  The projects developed according to corridor studies shall be placed in one of the following four program categories:

(1)  System preservation: maintenance of the physical integrity of the existing state transportation system, including the upgrade of design for safety and operational reasons.

(2)  System management: improvements in the movement of people and goods along existing corridors through minor investment and with minimal impact or right-of-way acquisition.

(3)  New capacity: expansion of capacity through the addition of through lanes; construction on new alignment or new interchanges or ramps.

(4)  Local aid: provision of projects and enhancement of local transportation networks.

(d)  Project priorities.  Priorities for projects in each program category established under subsection (c) of this section shall be established based upon selection criteria adopted by the agency.

(e)  Information manual.  An information manual giving a clear description of the planning process shall be prepared for town officials and the public.

Sec. 32.  19 V.S.A. § 10k(a) is amended to read:

(a)  The agency shall develop an asset management plan which is a systematic goal and performance-driven management and decision-making process of operating, maintaining, and upgrading transportation assets cost‑effectively.  At a minimum, the asset management system shall:

(1)  identify transportation system indicators by which the different components of the transportation system may be evaluated;

(1)(2)  list all of the infrastructure assets and their condition, including, but not limited to, pavements, structures, and facilities;

(2)  [repealed]

(3)  include deterioration rates for infrastructure assets; and

(4)  determine, long-term, the annual funds necessary to fund infrastructure maintenance at the recommended performance level.

Sec. 33.  19 V.S.A. § 12a is amended to read:

§ 12a.  TRANSPORTATION BUDGETS PROGRAM PROVIDED TO THE COMMITTEES ON TRANSPORTATION

(a)  The budget for fiscal year 1991 and for each fiscal year thereafter for the agency of transportation and for all transportation expenditures shall be arranged and classified so as to show separately the following estimates and recommendations:

(1)  An operations and administration budget, including

(A)  expenses of administration, operations and personal services;

(B)  deficiencies, overdrafts and unexpended balances in appropriations of former years; and

(C)  all receipts including federal, town and special receipts.

(2)  A capital budget including

(A)  all requests and proposals for expenditures for new projects, new construction, additions and other capital outlay;

(B)  bonded debt, loans and interest charges; and

(C)  all receipts including federal, town and special receipts.

(b)  The transportation capital program and budget request shall be presented to the general assembly each year in a single document including complete project and expenditure information.  A four-year project development plan with estimated project costs shall accompany the transportation capital program request and contain information for planning purposes only. Appropriations made by the general assembly shall be for the ensuing fiscal year only.

(c)  On or before December 31 of each year, the agency shall also present to the house and senate committees on transportation information on the corridor planning process and a summary of resources allocated to programs in the process according to the four programs established under subsection 10i(c) of this title. The transportation program shall be provided by the agency of transportation to the members of the house and senate committees on transportation following the presentation of the state budget to the general assembly by the governor as required by 32 V.S.A. § 306.

* * * Information Center Funding * * *

Sec. 34.  STUDY OF INFORMATION CENTER FUNDING

The department of buildings and general services, in cooperation with the agency of transportation and the agency of commerce and community development, shall analyze the capital construction and operations costs of the state’s information centers with respect to their intended functions for, on the one hand, the provision of facilities for the comfort and safety of the traveling public and, on the other hand, the promotion of local and statewide tourist, cultural, and business activities.  The purpose of the analysis shall be to determine what proportion of the capital and operating costs of the information centers in fiscal years 2006 and thereafter should appropriately be funded from the transportation fund, the general fund, or other funding mechanisms.  The department of buildings and general services shall report its findings and recommendations to the House and Senate committees on transportation and appropriations by January 15, 2005.

* * * Vermont Local Roads Program * * *

Sec. 35.  MANAGEMENT OF VERMONT LOCAL ROADS PROGRAM

The agency of transportation, in cooperation with all interested parties, shall investigate the advantages and disadvantages of various models for operating the Vermont Local Roads Program, including the present model, education institutions with civil engineering departments, the agency of transportation, and others.  The agency shall report its findings and recommendations to the House and Senate committees on transportation by January 15, 2005.

* * * Materials Testing Laboratory * * *

Sec. 36.  MATERIALS TESTING FUNCTIONS

The agency shall analyze alternative models for organizing and performing the agency’s materials testing functions, including outsourcing contracts for all or part of the materials functions to private or public sector entities and other collaborative ventures with private and public sector entities, including municipalities and educational institutions.  The agency shall deliver the report to the governor and to members of the House and Senate committees on transportation by January 15, 2005.

* * * Investigations of DMV Employees and Potential Employees * * *

Sec. 37.  23 V.S.A. § 102(d) is added to read:

(d)  The commissioner may authorize background investigations for potential employees that may include criminal, traffic, and financial records checks; provided, however, that the potential employee is notified and has the right to withdraw his or her name from application.  The commissioner may, in connection with a formal disciplinary investigation, authorize an appropriate background investigation of a current employee; provided, however, that the background review is necessary and relevant to the issue under disciplinary investigation.  Information acquired through a background investigation that may be used as a basis for any disciplinary action must be given to the employee during any pretermination hearing or contractual grievance hearing to allow the employee an opportunity to respond to or dispute the information.

* * * Operation of Bicycles on Bike Paths * * *

Sec. 38.  REPEAL

23 V.S.A. § 1139(c) (requirement for using bike paths) is repealed.

* * * School Bus Inspections * * *

Sec. 39.  23 V.S.A. § 1282(b) is amended to read:

(b)  A school bus shall not be operated in the transportation of children to and from school unless and until it is inspected at an inspection station designated as such by the motor vehicle department.  Such The inspection shall thoroughly cover mechanical conditions, standard equipment, extra equipment and safety and comfort conditions all as provided in section 1281 of this title; and, if the inspected vehicle meets all such of these requirements, the inspection station shall give the owner or operator of the inspected vehicle a signed certificate so stating.  This certificate shall be forthwith exhibited shown as soon as possible by such the owner or operator to a school director in the town in which this vehicle is to be operated, and shall thereafter be carried in some easily accessible place in such the vehicle.  Thereafter, so long as this bus remains in this service, it must be reinspected as provided above in this section during each of the following periods: August July-August, December November-December, and March February-March.  School buses of the pleasure car type, if regularly used in such this service, when transporting school children shall display signs required in section 1281, subdivision (9) subdivision 1281(9) of this title when transporting schoolchildren.

* * * Montpelier-Berlin Walk Project * * *

Sec. 40.  MONTPELIER-BERLIN WALK

When the Montpelier-Berlin walk project is ready for construction, the agency of transportation shall prioritize funding for the project within the limits of total funding allocated to the bicycle and pedestrian facilities program.

* * * Morse Airport in Town of Bennington * * *

Sec. 41.  WILLIAM H. MORSE STATE AIRPORT IN TOWN OF BENNINGTON; RUNWAY EXTENSION; COST-BENEFIT ANALYSIS

The agency of transportation shall suspend all activity on the project for the proposed runway extension at the William H. Morse state airport in the town of Bennington until the town of Bennington and the Bennington County Regional Planning Commission adopt resolutions supporting the proposed extension of the runway.  The Bennington County Regional Planning Commission in cooperation with the town of Bennington shall perform a cost‑benefit analysis of the runway extension project that considers the economic benefits to and impacts on the residents in the vicinity of the airport and the residents of Old Bennington and Bennington’s West End.  A grant to the Bennington County Regional Planning Commission in the amount of $10,000 from the aviation program is authorized for this purpose.

* * * Rutland Rail Yard * * *

Sec. 42.  Sec. 4(4) of No. 141 of the Acts of the 2001 Adj. Sess. (2002) is amended to read:

(4)  The schedule for the rail statewide development and evaluation project, page 13, is amended as follows:  by deleting other and total funds of $1,975,000 and inserting in both instances $2,230,030, and by deleting state funds of $475,000 and inserting $730,030.  The changes are to increase state funding for the Rutland Rail Yard project by $400,000 ($150,000 for the purpose of completing the Act 250 process and $250,000 for the engineering contract), and to decrease $144,970 in state funds for other projects.

* * * Program Development * * *

Sec. 43.  PROGRAM DEVELOPMENT

Total authorized spending in program development is reduced by the sum of $400,000 in transportation funds.  These funds are anticipated to be restored as provided in Sec. 56 of this act.  To the extent the funds are not restored, the secretary is authorized to reduce spending on program development projects as required.

* * * Surplus Real Property * * *

Sec. 44.  DISPOSAL OF SURPLUS REAL PROPERTY

The agency of transportation shall implement a program to dispose of surplus real property owned in fee by the agency on behalf of the state within the course of fiscal years 2005 and 2006.  The agency shall submit a report on its progress in this regard to the House and Senate committees on transportation by January 15, 2005.

* * * Municipal Salt Sheds * * *

Sec. 45.  19 V.S.A. § 39 is added to read:

§ 39.  AGENCY OF TRANSPORTATION ASSISTANCE WITH MUNICIPAL SALT SHEDS

(a)  The agency of transportation shall work with municipalities to provide assistance in designing effective low cost enclosures for salt or sand storage, including off-the-shelf designs that incorporate economical construction materials to the extent allowed by the multisector general permit (MSGP) issued for Vermont by the United States Environmental Protection Agency.

(b)  The agency shall explore opportunities for collocation of state and municipal salt or sand storage facilities where collocation would be appropriate.

(c)  The agency of transportation shall pursue requests for bid for bulk purchases of prototype salt and sand enclosures which would be available to municipalities for purchase.

* * * Enhancement Funds * * *

Sec. 46.  ENHANCEMENT FUNDS

Notwithstanding 19 V.S.A. § 38, the first $341,733 of federal funds allocated to the enhancement grant program for fiscal year 2005 under 19 V.S.A. § 38(e)(1) shall be applied as follows:

(1)  $200,000 to policy and planning for the youth corps program as provided in Sec. 9(b)(2) of this act;

(2)  $40,000 to the bicycle and pedestrian facilities program; and

(3)  $101,733 to the Vermont local roads program for the clean and clear initiative.  The enhancement funds shall be used in lieu of transportation and bond funds which are reduced accordingly.

* * * Aviation – Fixed‑Base Operators * * *

Sec. 47.  GRANTS TO AIRPORT FIXED‑BASE OPERATORS

Within the limits of annual funds authorized for such purpose, the secretary may make grants to fixed-base operators at state airports for the purpose of defraying the expenses of providing an airport manager and other services to the public.

* * * Recreational Trail System * * *

Sec. 48.  STUDY OF RECREATIONAL TRAIL SYSTEM

The agency of natural resources shall conduct a review of previously completed reports regarding the state’s snowmobile trails system.  The review shall list all recommendations made in the previous studies and assess the progress made to implement them.  The agency of natural resources shall forward its review to the members of the House and Senate committees on transportation by January 15, 2005.

* * * Central Vermont Public Transit * * *

Sec. 49.  Sec. 45(a)(1) of No. 56 of the Acts of 2003 is amended to read:

(a)  There is established a Central Vermont Public Transit Advisory Board consisting of:

(1)  an elected official or designee from each municipality in Washington County and from the towns of Orange, Washington, and Williamstown, to be selected by the legislative body of each municipality; and

* * * Repeal of Agency of Transportation Reports * * *

Sec. 50.  REPEAL

The following provisions of law are repealed:

(1)  19 V.S.A. § 12a(c) (corridor planning process and resources allocated to programs in the process);

(2)  19 V.S.A. § 13(g) (report detailing transportation equipment replacement account); and

(3)  24 V.S.A. § 5084(e) (report of public transit advisory council).

Sec. 51.  19 V.S.A. § 306(d) is amended to read:

(d)  State aid for nonfederal disasters.  There shall be an annual appropriation for emergency aid in repairing, building, or rebuilding class 1, 2, or 3 town highways and bridges damaged by natural or man-made disasters.  The secretary of transportation shall file an annual report with the house and senate committees on transportation, detailing the expenditure of funds under this subsection.  Eligibility for use of emergency aid under this appropriation shall be subject to the following criteria:

* * *

Sec. 52.  23 V.S.A. § 1436 is amended to read:

§ 1436.  STATEWIDE MUNICIPAL COMMERCIAL MOTOR VEHICLE ENFORCEMENT FUND

A statewide municipal commercial motor vehicle enforcement fund is created for the purpose of supporting commercial motor vehicle law enforcement initiatives in the state.  The fund shall be administered by the commissioner of motor vehicles.  Municipalities may apply to the commissioner on forms supplied by the department of motor vehicles.  Funds distributed to municipalities, which shall not exceed $12,000.00 annually per municipality under this section, shall be used for training of municipal law enforcement officers for commercial motor vehicle enforcement, temporary replacement officers for those municipal law enforcement officers receiving commercial motor vehicle enforcement training, and other municipal commercial motor vehicle enforcement uses as determined by the commissioner.  The commissioner shall ensure that the activities of the commercial motor vehicle law enforcement initiative are consistent with those of the enforcement plan produced pursuant to section 1435 of this title.  The commissioner shall report annually to the general assembly on or before the second week of January on the expenditures from and activities of the statewide municipal commercial motor vehicles enforcement fund.

Sec. 53.  29 V.S.A. § 735(a) is amended to read:

(a)  On or before the last day of January in each year the authority shall submit a report of its activities for the preceding fiscal year to the governor and to the general assembly.  Each report shall set forth a complete operating and financial statement covering its operations during the year, and shall contain a full and complete statement of the authority's anticipated budget and operations for the ensuing year.  The authority shall cause an audit of its books and accounts to be made at least once in each year by certified public accountants; the cost shall be considered an expense of the authority and a copy shall be filed with the state treasurer.

Sec. 54.  REPEAL

Sec. 22 of No. 154 of the Acts of the 1999 Adj. Sess. (2000) (prioritized roadway improvements on truck network) is repealed.

Sec. 55.  Sec. 47(c) of No. 156 of the Acts of the 1999 Adj. Sess. (2000) is amended to read:

(c)  Up to $500,000 of any state funds returned to the agency of transportation as a result of any claims or litigation by the Marble Valley Regional Transit District concerning the Rutland multimodal transportation center shall be escrowed until July 1, 2010, and used to make satisfactory structural repairs to the Rutland multimodal transportation center.  Notwithstanding any other law to the contrary, any funds returned to the agency of transportation from the above referenced claims or litigation in excess of the escrowed $500,000 shall be deposited in the transportation fund. Escrowed funds shall be used to repair structural damage resulting from design, engineering or construction of the Rutland multimodal transportation center.  Any funds remaining in the escrow fund as of July 1, 2010, including all interest, which shall be credited to the fund, that have not been committed to the repair of structural damage shall be deposited in the transportation fund.  Expenditures from the escrow fund shall require approval from the secretary of transportation and the owner of the Rutland multimodal transportation center.  By January 15 of each year, the agency of transportation shall report to the House and Senate committees on transportation on the status of any litigation funds referred to in the subsection.

* * * General Fund Waterfall * * *

Sec. 56.  ALLOCATION OF GENERAL FUND WATERFALL

(a)  To the extent funds are transferred to the transportation fund pursuant to Sec. 88 of No. 80 of the Acts of 2004, as amended, such funds are authorized for expenditure as follows:

(1)  up to $500,000 to the rail division for rail infrastructure projects as selected by the secretary; and

(2)  up to $400,000 to program development for projects as selected by the secretary; and

(3)  up to $100,000 to the central garage fund as defined in

19 V.S.A. § 13.

(4) up to $365,000 to projects in the paving and bridge programs as selected by the secretary.

(b)  Any funds transferred to the transportation fund pursuant to subsection (a) of this section shall be allocated pro rata among the specified categories.

* * * Public Transit; Local Share Study * * *

Sec. 57.  PUBLIC TRANSIT; LOCAL SHARE STUDY COMMITTEE

(a)  A summer study committee is established, consisting of the secretary of transportation or designee, a representative of the public transit advisory committee appointed by the secretary of transportation, a representative of the Vermont League of Cities and Towns to be selected by the league, a representative of the Chittenden County Metropolitan Transportation Organization Public Transportation Task Force, and two members of the Vermont Public Transportation Association to be selected by the association.

(b)  The committee shall investigate, seek pertinent information from appropriate persons, and make recommendations with respect to long-term sources for funding the local share for public transit projects and programs.  The committee shall further make recommendations regarding the appropriate allocation of funding responsibility for public transit projects and programs among federal, state, and local sources.

(c)  The agency shall provide administrative support for the committee.

(d)  The committee shall deliver its report, including any recommendations for proposed legislation, to the House and Senate committees on transportation by January 15, 2005.

* * * Hazard Elimination Program * * *

Sec. 58.  FEDERAL FUNDS TRANSFER 

Any federal funds transferred to the 23 U.S.C. § 402 (highway safety) program, pursuant to 23 C.F.R. § 1275.6 (failure of state to enact and enforce repeat intoxicated driver laws), shall be used exclusively by the agency for the 23 U.S.C. § 152 (hazard elimination) program or 402 (highway safety) program.  The governor’s highway safety council shall work cooperatively with the agency in administering these funds.

* * * Official Traffic Control Devices * * *

Sec. 59.  10 V.S.A. § 494(6) and (12) are amended to read:

The following signs are exempt from the requirements of this chapter except as indicated in section 495 of this title:

* * *

(6)  Official green traffic control signs, including signs on limited access highways consistent with the manual on uniform traffic control devices, adopted under 23 V.S.A. § 1025, directing people to other towns, international airports, postsecondary educational institutions; cultural and recreational destination areas; nonprofit diploma granting educational institutions for people with disabilities; and official blue traffic control signs, including signs on limited access highways, consistent with the manual on uniform traffic control devices, adopted under 23 V.S.A. § 1025, directing people to official state visitor information centers.  After having considered the six priority categories in this subdivision, the travel information council may approve installation of a green sign for any of the following:

(A)  Nonprofit museums;

(B)  Cultural and recreational attractions owned by the state or federal government;

(C)  Officially designated scenic byways;

(D)  Park and ride or multimodal centers; and

(E)  Fairgrounds or exposition sites;

provided the designations in subdivisions (A) through (E) are open a minimum of 120 days each year and are located within 15 miles of an interstate highway exit.  Signs erected under this subdivision (6) of this section shall not exceed a maximum allowable size of 80 square feet.

(12)  Directional signs, subject to regulations promulgated by the bureau of public roads Federal Highway Administration with a total surface area not to exceed 4 four square feet providing directions to places of business offering for sale agricultural products harvested or produced on the premises where the sale is taking place.

* * * Parking Restrictions for Persons Using Handicapped Plates * * *

Sec. 60.  23 V.S.A. § 304a(d) is amended to read:

(d)  A person who is blind or who has an ambulatory disability may park without fee for an unlimited period not more than 10 continuous days in a parking zone which is restricted as to the length of time parking is permitted.  This section shall not apply to zones in which parking, standing, or stopping of all vehicles is prohibited, which are reserved for special vehicles, or where parking is prohibited by any parking ban.  As a condition to this privilege, the vehicle shall display the special handicapped plate or placard issued by the commissioner or a special registration license plate or placard issued by any other jurisdiction.

* * * Municipal Park-and-Ride Grant Demonstration Program * * *

Sec. 61.  MUNICIPAL PARK-AND-RIDE GRANT DEMONSTRATION PROGRAM

(a)  The general assembly finds that with increased demand for alternative transportation choices, the need to reduce the number of single-occupancy vehicles, and the need to reduce pollutants dispersed into the air from vehicular traffic, municipalities may need assistance with funding park-and-ride projects.  Accordingly, the municipal park-and-ride grant demonstration program is hereby established.

(b)  Grants awarded under this section shall be used only for preliminary engineering and construction of park-and-ride lots by municipalities.  Any Vermont municipality shall be an eligible applicant.  The agency of transportation shall develop an application for this demonstration program and notify eligible participants of its availability.

(c)  The agency of transportation shall develop criteria for approval of applications which shall include but are not limited to:

(1)  The proposed site must be owned by the municipality or under long‑term lease by the municipality (20 or more years);

(2)  The proposed site must be on or near a state highway or a class 1 town highway;

(3)  The proposed park-and-ride lot must be available for year-round commuter use;

(4)  The proposed site must provide 10 or more parking spaces;

(5)  The proposed site must be maintained by the municipality;

(6)  Activities eligible for grant awards under this section include, but are not limited to, gravel surfacing, paving, lighting, and signing; and

(7)  When existing transit routes are present, municipalities must agree to collaborate with the public-transit providers.

(d)  The sum of $100,000 is authorized for use by the agency of transportation for the purposes of implementing this section.

* * * Issuance of P.O.W., Pearl Harbor, and Purple Heart Plates * * *

Sec. 62.  23 V.S.A. § 304(e) and (j) are amended to read:

(e)  The commissioner shall upon proper application, issue special number plates to former prisoners of war, Pearl Harbor veterans and recipients of the Purple Heart Medal for use only on vehicles registered at the pleasure car rate and on trucks registered for less than 26,001 pounds and excluding vehicles registered under the International Registration Plan.  The commissioner shall determine the design of the special plates and decals.  Applicants shall apply on forms prescribed by the commissioner and the applicant’s status as a former prisoner of war (P.O.W.), Pearl Harbor veteran, or holder of a Purple Heart Medal shall be certified by the Veterans’ Administration or state veterans’ affairs office, respectively.  The prisoner of war (P.O.W.), Pearl Harbor, or Purple Heart number plates shall not be subject to fees applicable to special plates as set forth in subsection (b) of this section.  The plates shall be reissued only to the original holder of the plates or the surviving spouse.  The commissioner shall adopt rules under 3 V.S.A. chapter 25 to implement the provisions of this subsection.

(j)  The commissioner of motor vehicles shall, upon proper application, issue special plates to Vermont veterans, as defined in 38 U.S.C. § 101(2), for use only on vehicles registered at the pleasure car rate and on trucks registered for not more than 8,099 pounds less than 26,001 pounds and excluding vehicles registered under the International Registration Plan.  Applicants shall apply on forms prescribed by the commissioner and the applicant’s status as a veteran shall be certified by the Vermont office of veterans’ affairs or by other documentation as required by the commissioner.  The type and style of the veterans’ plate shall be determined by the commissioner, except that an American flag shall appear on one side of the plate.  A one-time fee of $10.00 shall be assessed in addition to the annual fee for registration; $5.00 of the one‑time fee shall be transferred to the Vermont office of veterans’ affairs.  The plates shall be reissued only to the original holder of the plates or the surviving spouse.  Notwithstanding section 502 of Title 32, the commissioner may charge the actual costs of production of the plates against the fees collected and shall remit the balance to the transportation fund.  The commissioner shall adopt rules to implement the provisions of this subsection.  Except for new or renewed registrations, applications for the issuance of veterans’ plates shall be processed in the order received by the department subject to normal workflow considerations.

Sec. 63.  23 V.S.A. § 304b(a) is amended to read:

(a)  The commissioner shall, upon application, issue conservation registration plates for use only on vehicles registered at the pleasure car rate and on trucks registered for not more than 8,099 less than 26,001 pounds and excluding vehicles registered under the International Registration Plan.  Plates so acquired, shall be mounted on the front and rear of the vehicle.  The commissioner of motor vehicles and the commissioner of fish and wildlife shall determine the graphic design of the special plates in a manner which serves to enhance the public awareness of the state’s interest in restoring and protecting its nongame wildlife and major watershed areas.  Applicants shall apply on forms prescribed by the commissioner and shall pay an initial fee of $20.00 in addition to the annual fee for registration.  In following years, in addition to the annual registration fee, the holder of a conservation plate shall pay a renewal fee of $20.00.  The commissioner shall adopt rules under 3 V.S.A. chapter 25 to implement the provisions of this subsection.

Sec. 64.  23 V.S.A. § 304c(a) is amended to read:

(a)  The commissioner shall, upon application, issue “building bright spaces for bright futures fund,” hereinafter referred to as “the bright futures fund,” registration plates for use only on vehicles registered at the pleasure car rate and on trucks registered for not more than 8,099 less than 26,001 pounds and excluding vehicles registered under the International Registration Plan.  Plates so acquired shall be mounted on the front and rear of the vehicle.  The commissioner of motor vehicles shall utilize the graphic design recommended by the commissioner of social and rehabilitation services for the special plates to enhance the public awareness of the state’s interest in supporting children’s services.  Applicants shall apply on forms prescribed by the commissioner of motor vehicles, and shall pay an initial fee of $20.00 in addition to the annual fee for registration.  In following years, in addition to the annual registration fee, the holder of a bright futures fund plate shall pay a renewal fee of $20.00. The commissioner shall adopt rules under 3 V.S.A. chapter 25 to implement the provisions of this subsection.

* * * Local Match Requirements * * *

Sec. 65.  STUDY OF LOCAL MATCH REQUIREMENTS

The agency of transportation, in consultation with the Vermont League of Cities and Towns, the regional planning commissions, and the Chittenden County Metropolitan Planning Organization, shall develop a system of local match funding requirements based on the principle of functional necessity as described in this section.  Design, component, and materials features of a highway, bridge, or other transportation structure subject to a local match requirement that are required by state standards or that are essential to the functional integrity of the structure shall have a lower local match requirement, with the use of standardized cost-effective designs, components, or materials having the lowest local match requirement.  All design, component, and materials features that are not required by state standards and that are not essential to the functional integrity of a structure shall have a higher local match requirement.  Features that are primarily aesthetic or ornamental in purpose shall have the highest local match requirement.  The agency may propose one or alternative systems for consideration.  Any proposed system shall, in overall structure, be consistent with, but not necessarily bound by, the principles described in this section.  The agency shall analyze the feasibility, equity, and financial implications of any proposed system and submit its findings and recommendations to the House and Senate committees on transportation by January 15, 2005.

* * * Effective Date * * *

Sec. 66.  EFFECTIVE DATE

This act shall take effect from passage.

                                                                        RICHARD T. MAZZA

                                                                        PETER F. WELCH

                                                                        PHILIP B. SCOTT

                                                                 Committee on the part of the Senate

                                                                        FRANK M. MAZUR

                                                                        MICHAEL J. OBUCHOWSKI

                                                                        TIMOTHY R. CORCORAN II

                                                                 Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative on a roll call, Yeas 22, Nays 0.

Senator Sears having demanded the yeas and nays, they were taken and are as follows:

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bloomer, Campbell, Collins, Cummings, Doyle, Dunne, Gander, Greenwood, Illuzzi, Kittell, MacDonald, Maynard, Mazza, Miller, Mullin, Scott, Sears, Shepard, Snelling, Welch, White.

Those Senators who voted in the negative were: None.

Those Senators absent and not voting were: Bartlett, Canns, Condos, Gossens, Leddy, Lyons, Mayo, Munt.

Thereupon, on motion of Senator Welch, the rules were suspended and the bill was ordered messaged to the House forthwith.

Committee of Conference Appointed

H. 201.

An act relating to a farm viability program.

Was taken up.  Pursuant to the request of the House, the President announced the appointment of

                                         Senator White

                                         Senator Ayer

                                         Senator Maynard

as members of the Committee of Conference on the part of the Senate to consider the disagreeing votes of the two Houses.

Adjournment

On motion of Senator Welch, the Senate adjourned until ten o’clock in the morning.