Journal of the House

________________

THURSDAY, APRIL 21, 2005

At eight o'clock and thirty minutes in the forenoon the Speaker called the House to order.

Devotional Exercises

Devotional exercises were conducted by Representative Carolyn Partridge of Windham.

Senate Bill Referred

S. 164

Senate bill, entitled

An act relating to elections and voter registration;

Was taken up, read the first time and referred to the committee on Government Operations.

House Resolution Adopted

H.R. 8

Reps. Flory of Pittsford, Kiss of Burlington and Partridge of Windham offered a House resolution, entitled

House resolution welcoming the delegation of Brazilian state legislators to Vermont;

     Whereas, the República Federativa do Brasil (the Federative Republic of Brazil) is one of the largest nations on earth, encompassing a land mass of 3,286,470 square miles on the South American continent and with an estimated population of 186,000,000 persons, and

     Whereas, Brazil has followed the example of the United States embracing the concept of federalism, and its governmental structure includes a federal government, located in the federal district and capital city of Brasilia, and 26 state governments, each with its own state capital and legislature, and

Whereas, the United States Department of State, through its International Visitors’ Program, invites officials from around the world to view our system of government in action and to exchange ideas with American federal, state, and local officials, and

     Whereas, in this spirit of international understanding and through the local sponsorship of the Vermont World Affairs Council, a delegation of Brazilian state legislators from across the breadth of that nation and representing the range of Brazilian political parties is visiting the Vermont General Assembly to witness how legislation is debated and laws created in the Green Mountain State, and

     Whereas, these individuals, not unlike the members of this chamber, have a diverse set of academic and professional backgrounds, including architecture, journalism, law, medicine, and music, and

     Whereas, this outstanding delegation of state legislators and their home Brazilian cities or states are Jose Tasso Oliveira De Andrade of Vitoria, Rômulo José De Gouvea of Campina Grande, Wilson Nunes Martins of Teresina, Sonia Maria Fontes Moreira of Salvador, Laurez da Rocha Moreira of Palmas, Luciano Nunes Santos Filho of Piaui State, Ciro Carlos Emerim Simoni of Porto Alegre, and Maria Aparecida Campos Straus of Rio de Janerio, and

     Whereas, accompanying the group and providing expert linguistic services are state department interpreters Joseph McGovern, Edmea McCarthy, and Robin Testa, now therefore be it

     Resolved by the House of Representatives:

     That the members of this legislative body extend the warmest of welcomes to their Brazilian state legislative colleagues and their interpreters who are visiting the Vermont State House, and be it further

     Resolved:  That the clerk of the house be directed to present a copy of this resolution to each of the named Brazilian state legislators and their interpreters. 

Which was read and adopted.

Bill Committed

H. 527

House bill, entitled

An act relating to agricultural water quality;

Appearing on the Calendar for action, was taken up and pending second reading of the bill, on motion of Rep. Zuckerman of Burlington, the bill was committed to the committee on Fish, Wildlife and Water Resources.

Recess

At eight o’clock and fifty-five minutes in the forenoon, the Speaker declared a recess until the fall of the gavel.

At ten o’clock and forty minutes in the forenoon, the Speaker called the House to order.

Consideration Interrupted by Recess

H. 524

House bill, entitled

An act relating to universal access to health care in Vermont;

Was taken up and pending third reading of the bill, Reps. DePoy of Rutland City, Allaire of Rutland City, Bartlett of Dover, Bostic of St. Johnsbury, Branagan of Georgia, Brennan of Colchester, Canfield of Fair Haven, Clark of St. Johnsbury, Clark of Vergennes, Donaghy of Poultney, Donahue of Northfield, Endres of Milton, Flory of Pittsford, Helm of Castleton, Houston of Ferrisburgh, Hube of Londonderry, Hudson of Lyndon, Johnson of Canaan, Kainen of Hartford, Kennedy of Chelsea, Kilmartin of Newport City, Koch of Barre Town, Komline of Dorset, Krawczyk of Bennington, Larocque of Barnet, Larrabee of Danville, LaVoie of Swanton, Livingston of Manchester, Marcotte of Coventry, Marron of Stowe, McAllister of Highgate, Metzger of Milton, Miller of Elmore, Morley of Barton, Morrissey of Bennington, Otterman of Topsham, Parent of St. Albans City, Peaslee of Guildhall, Schiavone of Shelburne, Shaw of Derby, Smith of New Haven, Sunderland of Rutland Town, Valliere of Barre City, Winters of Swanton, Winters of Williamstown, Wright of Burlington to H. 524

     Moved to amend the bill by striking all after the enacting clause and inserting in lieu thereof the following:

* * * PART I.  PRESCRIPTION FOR A HEALTHY VERMONT * * *

Sec. 1.  FINDINGS AND PRINCIPLES FOR HEALTH CARE REFORM

     (a)  Findings.

          (1)  Vermont faces two significant challenges to our health care system: unsustainable health care inflation and a growing number of uninsured Vermonters.  These challenges are interrelated:  unsustainable health care inflation results in more uninsured Vermonters; and more uninsured Vermonters increase the cost of uncompensated care paid for by those who are insured.

          (2)  Health care spending in Vermont and the nation is increasing at an unsustainable rate, and per capita spending by Vermonters on health care has been increasing faster than per capita health care spending in the nation.

          (3)  Higher health care costs are likely to result in reduced private and public capacity to offer coverage, reduced employee participation rates, and greater numbers of uninsured. 

          (4)  Most of the uninsured are connected to the workforce, either as employees or as dependents of employees.  Workers in firms with fewer than 25 employees have the greatest difficulty gaining access to coverage.

          (5)  The largest group of uninsured Vermonters (about 43 percent) is potentially eligible for Medicaid, based on their household income, but have not enrolled in the Medicaid program.  For this group of uninsured Vermonters, care could be provided and paid for under the Medicaid program.

          (6)  Another group of uninsured Vermonters (about 23 percent) has household income over 300 percent of the federal poverty level.  These households most likely could afford to purchase health insurance.

          (7)  About 24 percent of uninsured Vermonters have household income between 150 percent and 300 percent of the federal poverty level.  These Vermonters are ineligible for a Medicaid program and, because of their income, might have difficulty affording commercial health insurance coverage.

          (8)  Expansion of Medicaid eligibility or the creation of some other public health care coverage program is not a realistic solution to the challenges of health care inflation and the uninsured because:

               (A)  The Vermont Medicaid program is projected to have a deficit of $60 to 70 million in fiscal year 2006 if the design of the program remains the same.

               (B)  Medicaid expansion results in worse inflation for private sector premiums because of the “cost shift.”  Vermont’s Medicaid program pays hospitals and doctors at a low reimbursement level, and as a result, any unpaid costs are shifted to commercial insurance premiums and paid by businesses and individuals.

               (C)  Approximately 25 percent of Vermonters are enrolled in some form of Medicaid or other state-funded program.  Even as Vermont Medicaid programs have expanded, the percentage of Vermonters who are uninsured has grown.

          (9)  Increased regulation is not a panacea for the challenges facing Vermont’s health care system.  There is a legitimate role for reasonable regulation to contain health care costs, but Vermont already has one of the most comprehensive regulatory systems of any state in the nation, including a stringent certificate of need program, a rigorous annual process to review and restrain hospital budgets, and strict regulation of health insurance quality and premiums.

(b)  Principles for health care reform.  The goals of a health care reform plan for Vermont should be:

(1)  Universal access to affordable, equitable, and comprehensive health care for all Vermonters.

(2)  Consumer choice, with the patient and the patient’s health care provider at the center of decision-making.

(3)  A competitive and efficient private health insurance market.

(4)  Financial sustainability of public programs and private health insurance premiums.

(5)  A combination of short-term and long-term efforts, as part of a comprehensive, systematic plan to reduce costs, maintain and increase access, and improve health care quality and safety for all Vermonters.

* * * Premium Assistance Program * * *

Sec. 2.  8 V.S.A. § 4062d is added to read:

§ 4062d.  PREMIUM ASSISTANCE PROGRAM

(a)  Beginning in January 2006, the secretary of human services shall establish the premium assistance program within the office of Vermont health access for the purpose of providing uninsured low and moderate income Vermonters with financial assistance to enroll in or purchase health care coverage.  Financial assistance shall be in the form of

(1)  a reduced premium obligation of an eligible individual; and

(2)  in the case of an approved high deductible plan, a reduced deductible payment obligation for the eligible individual.

(b)  Financial assistance to eligible individuals shall be as follows:

(1)  For eligible individuals with household income greater than 150 percent of the federal poverty level and equal to or less than 200 percent of the federal poverty level:

(A)  Premium assistance shall be a $65.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with single-person coverage; a $105.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with two-person coverage; and a $155.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with family coverage; provided that in no event shall the discount be greater than 60 percent of the eligible individual’s share of group plan coverage; and

(B)  Cost sharing assistance in connection with an approved high deductible health insurance plan shall be 60 percent of the individual’s deductible expenditures.

(2)  For eligible individuals with household income greater than 200 percent of the federal poverty level and equal to or less than 250 percent of the federal poverty level:

(A)  Premium assistance shall be a $45.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with single-person coverage; a $70.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with two-person coverage, and a $105.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with family coverage; provided that in no event shall the discount be greater than 40 percent of the eligible individual’s share of group plan coverage; and

(B)  Cost sharing assistance in connection with an approved high deductible health insurance plan shall be 40 percent of the individual’s deductible expenditures.

(3)  For eligible individuals with household income greater than 250 percent of the federal poverty level and equal to or less than 300 percent of the federal poverty level:

(A)  Premium assistance shall be a $25.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with single-person coverage; a $35.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with two-person coverage; and a $55.00 discount from the monthly cost of participation in or purchase of an approved group or nongroup health benefit plan with family coverage; provided that in no event shall the discount be greater than 20 percent of the eligible individual’s share of group plan coverage; and

(B)  Cost sharing assistance in connection with an approved high deductible health insurance plan shall be 20 percent of the individual’s deductible expenditures.

(c)  Annually on or before October 1 of each year, the commissioner of banking, insurance, securities, and health care administration, after public hearing and an opportunity for comment by interested parties and the public, shall order the adjustment of the premium discount and cost sharing assistance amounts established in subsection (b) of this section to account for anticipated medical inflation for the next calendar year, as determined by the commissioner in his or her sole discretion.

(d)  The secretary shall adopt rules for the premium assistance program.  Such rules shall include:

(1)  Rules governing the operation of the premium assistance program by the nonprofit organization formed pursuant to section 4062e of this title;

(2)  The form and manner of an individual’s application for assistance authorized by this section;

(3)  Criteria for a group or nongroup health benefit plan to be approved for participation in the premium assistance program;

(4)  Standards and procedures for participating health insurers to be compensated for the premium discounts, cost sharing assistance, and other approved costs associated with the premium assistance program; and

(5)  Any other rules necessary to carry out the purposes of this section.

(e)  Any health insurer or self-insured plan may participate in the program.  The commissioner of banking, insurance, securities, and health care administration, after notice and an opportunity to be heard, may require one or more health insurance companies, hospital or medical services corporations, or health maintenance organizations covering at least 15,000 lives in this state to participate in the program if the commissioner determines that such designation is necessary to carry out the purposes of this section. 

(f)  As used in this section:

(1)  “Approved group or nongroup health benefit plan” means an insured or self-insured health benefit plan that satisfies the secretary’s criteria for participation in the premium assistance program.

(2)  “Approved high deductible health insurance plan” means a high deductible health benefit plan with deductible amounts no less than and no greater than the deductible amounts required of a high deductible health insurance plan under Section 223 of the Internal Revenue Code (health savings accounts).

(3)  “Eligible individual” means an individual who:

(A)  is a Vermont resident;

(B)  has applied for assistance on a form and in a manner prescribed by the secretary;

(C)  has not been enrolled in a health benefit plan during the 12 months prior to application, except that the rules adopted by the secretary shall include criteria for waiver of the waiting period provided for in this subdivision if the individual has lost health insurance coverage for reasons beyond the control of the individual; and

(D)  has household income greater than 150 percent of the federal poverty level, and less than or equal to 300 percent of the federal poverty level, and is not eligible for the Medicaid program, the state children’s health insurance program, or any other similar state-funded program of health care coverage.

(4)  “Secretary” means the secretary of the agency of human services.

(g)  The secretary may adopt the initial rules required or permitted by this section by emergency rule so as to permit the premium assistance program to begin on January 1, 2006.

(h) The secretary may apply to the federal government to include the program authorized by this section as a Medicaid program or a state children’s health program, if the secretary determines that it is cost-effective to do so.

* * * Nongroup Reinsurance Program * * *

Sec. 3.  8 V.S.A. § 4062e is added to read:

§ 4062e.  NONGROUP REINSURANCE PROGRAM

(a)  The commissioner shall establish the nongroup reinsurance program for the purpose of lowering the cost of, and thereby increasing access to, health care coverage in the nongroup health insurance market.

(b)  The nongroup reinsurance program shall include a reinsurance mechanism permitting nongroup carriers to transfer all or a portion of the expenses and risk associated with certain individuals, based on the actual or anticipated expenses of such individuals, in accordance with rules adopted by the commissioner.  Such individuals shall remain enrolled policyholders, members, or subscribers of the carrier’s plan and shall be subject to the same terms and conditions of coverage, premiums, and cost sharing as any other policyholder, member, or subscriber. 

(c)  The commissioner may develop the nongroup reinsurance program in a manner that permits the program to be eligible for a federal grant to administer the plan, including a grant under the federal Trade Adjustment Act.

(d)  The commissioner may adopt rules for the nongroup reinsurance program relating to:

(1)  The creation of a private, nonprofit organization to operate the program, and the appointment of individuals to govern the organization.

(2)  Criteria governing the circumstances under which a nongroup carrier may transfer all or a portion of the expense and risk associated with individuals insured by the nongroup carrier to the reinsurance mechanism.

(3)  Eligibility criteria for providing financial support to nongroup carriers under the reinsurance mechanism, including nongroup carrier expenses eligible for financial support, standards and procedures for the treatment and management of chronic conditions, and any other eligibility criteria established by the commissioner.

(4)  Rules for operation of the reinsurance mechanism and the program.

(5)  Any other standards or procedures necessary or desirable to carry out the purposes of this section.

(e)  As used in this section:

(1)  “Nongroup carrier” means a health insurance company, a hospital or medical service corporation, or a health maintenance organization which is a nongroup carrier registered under section 4080b of this title.

(2)  “Program” means the nongroup reinsurance program established by this section.

(f)  The commissioner may adopt the initial rules required or permitted by this section by emergency rule so as to permit the nongroup reinsurance program to begin on January 1, 2006.

* * * Small Business Health Insurance Tax Credit * * *

Sec. 4.  32 V.S.A. § 5830e is added to read:

§ 5830e.  TAX CREDITS; SMALL BUSINESS HEALTH INSURANCE

                 CREDIT

(a)  Beginning in taxable year 2006, an eligible employer shall be entitled to a refundable health insurance credit against the tax imposed by section 5822 or 5832 of this title in an amount equal to $600.00 per year per approved employee policy, or $50.00 per month per approved employee policy for policies in force for less than a full year.

(b)  Eligibility for the credit established by this section shall terminate following the fifth consecutive year after the credit is first claimed.

(c)  The credit authorized by this section shall be allocated on a pro rata basis among the members of a pass-through entity.

(d)  Annually on or before October 1 of each year, the commissioner of banking, insurance, securities, and health care administration, after public hearing and an opportunity for comment by interested parties and the public, shall order the adjustment of the credit amount established in subsection (a) of this section to account for anticipated medical inflation for the next calendar year, as determined by the commissioner in his or her sole discretion.

(e)(1)  The commissioner of taxes shall adopt by rule standards and procedures necessary to carry out the purposes of this section.

(2)  The commissioner of taxes may adopt the initial rules required or permitted by this section by emergency rule so as to permit the standards and procedures necessary to carry out the purposes of this section to be adopted by January 1, 2006.

(f)  For purposes of this section:

(1)  “Approved employee policy” means an insured health benefit plan offered by a small group carrier registered under section 4080a of Title 8 providing single, two-person, or family coverage that:

(A)  covers eligible preventive care which meets the requirements of Section 223 of the Internal Revenue Code (health savings accounts), as amended, notwithstanding any deductible amount; and

(B)  has deductible amounts no greater than the deductible amounts required under a high deductible health insurance plan which meets the requirements of Section 223 of the Internal Revenue Code (health savings accounts), as amended.

(2)  “Eligible employer” means any employer, including private nonprofit organizations, which:

(A)  employed 25 or fewer full-time-equivalent employees, on average, for the three months preceding January 1 of the taxable year;

(B)  pays in the taxable year at least 50 percent of the cost of premiums for an approved employee policy, pro-rated for a part-time employee as a portion of the workweek of a full-time employee of the employer; and        

(C)  has been an employer at least 24 months and has not paid any portion of employee health insurance premium costs in the preceding 24 months; provided that the commissioner of banking, insurance, securities, and health care administration shall adopt small business affordability criteria to permit employers currently offering employee health insurance coverage to be considered an eligible employer, notwithstanding the provisions of this subdivision (C), if the commissioner of finance and management determines that funds are available for these purposes.

(3)  “Full-time-equivalent employee” means the sum of hours worked in one week by all employees of the employer, divided by 40.  For purposes of this calculation, no individual employee’s hours during the week in excess of 40 shall be included in the sum.

* * * The Health Insurance Access Trust Fund * * *

Sec. 5.  8 V.S.A. § 4062f is added to read:

§ 4062f.  HEALTH INSURANCE ACCESS TRUST FUND

(a)  Beginning with taxes paid in calendar year 2006, all of the revenues raised by the premium tax on health insurers, hospital and medical service corporations, and health maintenance organizations, and carriers for health insurance in any health benefit plan stop loss and excess coverage insurance imposed by subchapter 7 of chapter 211 of Title 32 shall be deposited into the health insurance access trust fund, a special fund to be administered by the commissioner for the sole purpose of providing financial and administrative support for the premium assistance program authorized by section 4062d of this title and the nongroup reinsurance program authorized by section 4062e of this title.  The fund shall be administered in accordance with subchapter 5 of chapter 7 of Title 32, except that interest earned shall remain in the special fund.

(b)(1)  During each fiscal year, the commissioner shall allocate the funds in the health insurance access trust fund between the premium assistance program and the nongroup reinsurance program based on the commissioner’s consideration of:

     (A)  the stability of the nongroup health insurance market and the ability of individuals to purchase a nongroup health insurance policy; and

     (B)  participation rates in the premium assistance program established under section 4062d of this title.

(2)  The commissioner may transfer funds from the health insurance access trust fund in any fiscal year to support the small business tax credit authorized under 32 V.S.A. § 5830e to employers currently offering employee health insurance coverage if the commissioner determines that the remaining funds will be sufficient to support the premium assistance program authorized by section 4062e of this title, and to support the nongroup reinsurance program authorized by section 4062f of this title.

 

Sec. 6.  REVIEW OF HEALTH INSURANCE PREMIUMS AND

             HOSPITAL BUDGETS

(a)  Between July 1, 2005 and December 31, 2008, in connection with any petition or other request for approval of premium rates pursuant to

8 V.S.A. § 4062 by a nonprofit hospital or medical service corporation or a health maintenance organization, the commissioner of banking, insurance, securities, and health care administration shall not approve premium rates that pass through to insureds’ expenses relating to the premium tax imposed by

32 V.S.A. §§ 8551 through 8556 unless the petitioner demonstrates, and the commissioner finds, that the petitioner has taken all reasonable steps necessary to reduce its aggregate expenses in an amount equal to the petitioner’s premium tax obligation, or that failure to approve will have a substantial adverse effect on the financial safety and soundness of the petitioner. In determining the reasonableness of the petitioner’s efforts, the commissioner shall evaluate:

(1)  the petitioner’s efforts to reduce its administrative expenses; and

(2)  the petitioner’s efforts to negotiate lower health care facility and provider charges reflecting less uncompensated care attributable to the uninsured.

(b)  Between July 1, 2005 and December 31, 2008, the commissioner of banking, insurance, securities, and health care administration shall not approve a hospital budget under subchapter 7 of chapter 221 of Title 18 unless the hospital demonstrates, and the commissioner finds, that the hospital has taken all reasonable steps necessary to reduce its aggregate expenses or that failure to approve will have a substantial adverse effect on the financial health of the hospital.  In determining the reasonableness of the hospital’s efforts, the commissioner shall evaluate:

(1)  the hospital’s efforts to reduce its administrative expenses; and

(2)  the hospital’s reduction in expenses reflecting less uncompensated care attributable to the uninsured.

* * * Healthy Choices Insurance Discount * * *

Sec. 7.  8 V.S.A. § 4080a(h) is amended to read:

(h)(1)  A registered small group carrier shall use a community rating method acceptable to the commissioner for determining premiums for small group plans.  Except as provided in subdivision (2) of this subsection, the following risk classification factors are prohibited from use in rating small groups, employees or members of such groups, and dependents of such employees or members:

(A)  demographic rating, including age and gender rating;

(B)  geographic area rating;

(C)  industry rating;

(D)  medical underwriting and screening;

(E)  experience rating;

(F)  tier rating; or

(G)  durational rating.

(2)(A)  The commissioner shall, by rule, adopt standards and a process for permitting registered small group carriers to use one or more risk classifications in their community rating method, provided that the premium charged shall not deviate above or below the community rate filed by the carrier by more than 20 percent (20%), and provided further that the commissioner’s rules may not permit any medical underwriting and screening.

(B)  The commissioner’s rules may permit a carrier, including a hospital or medical service corporation, to establish premium discounts,  rebates, or otherwise modify applicable co-payments, deductibles, or other cost-sharing amounts in return for adherence by a member or subscriber to programs of health promotion and disease prevention, not inconsistent with federal regulations relating to bona fide wellness, approved by the commissioner.

(C)  The commissioner, in consultation with the commissioner of health, shall adopt by rule:

(i)  standards for approved health promotion and disease prevention programs, based on the best scientific, evidence-based medical practices; and

(ii)  standards and procedures for evaluating an individual’s adherence to programs of health promotion and disease prevention.

(3)  The commissioner may exempt from the requirements of this section an association as defined in section subdivision 4079(2) of this title which:

(A)  offers a small group plan to a member small employer which is community rated in accordance with the provisions of subdivisions (1) and (2) of this subsection.  The plan may include risk classifications in accordance with subdivision (2) of this subsection;

(B)  offers a small group plan that guarantees acceptance of all persons within the association and their dependents; and

(C)  offers one or more of the common health care plans approved by the commissioner under subsection (e) of this section.

(4)  The commissioner may revoke or deny the exemption set forth in subdivision (3) of this subsection if the commissioner determines that:

(A)  because of the nature, size, or other characteristics of the association and its members, the employees or members are in need of the protections provided by this section; or

(B)  the association exemption has or would have a substantial adverse effect on the small group market.

Sec. 8.  8 V.S.A. § 4080b(h) is amended to read:

(h)(1)  A registered nongroup carrier shall use a community rating method acceptable to the commissioner for determining premiums for nongroup plans. Except as provided in subdivision (2) of this subsection, the following risk classification factors are prohibited from use in rating individuals and their dependents:

(A)  demographic rating, including age and gender rating;

(B)  geographic area rating;

(C)  industry rating;

(D)  medical underwriting and screening;

(E)  experience rating;

(F)  tier rating; or

(G)  durational rating.

(2)(A)  The commissioner shall, by rule, adopt standards and a process for permitting registered nongroup carriers to use one or more risk classifications in their community rating method.  After July 1, 1993, provided that the premium charged shall not deviate above or below the community rate filed by the carrier by more than 40 percent (40%) for two years, and thereafter 20 percent (20%).  Such rules may not permit, and provided further that the commissioner’s rules may not permit any medical underwriting and screening and shall give due consideration to the need for affordability and accessibility of health insurance.

(B)  The commissioner’s rules may permit a carrier, including a hospital or medical service corporation, to establish premium discounts,  rebates, or otherwise modify applicable co-payments, deductibles or other cost sharing amounts in return for adherence to programs of health promotion and disease prevention, not inconsistent with federal regulations relating to bona fide wellness, approved by the commissioner.

(C)  The commissioner, in consultation with the commissioner of health, shall adopt by rule:

(i)  standards for approved health promotion and disease prevention programs, based on the best scientific, evidence-based medical practices; and

(ii)  standards and procedures for evaluating an individual’s adherence to programs of health promotion and disease prevention.

* * * Consumer Health Care Price and Quality Information * * *

Sec. 9.  18 V.S.A. § 9410(a) and (c) are amended to read:

(a)  The commissioner shall establish and maintain a unified health care data base to enable the commissioner to carry out the duties under this chapter and Title 8, including:

(1)  Determining the capacity and distribution of existing resources.

(2)  Identifying health care needs and informing health care policy.

(3)  Evaluating the effectiveness of intervention programs on improving patient outcomes.

(4)  Comparing costs between various treatment settings and approaches.

(5)  Providing information to consumers and purchasers of health care.

(A)  The program authorized by this section shall include a consumer health care price and quality information system to make available to consumers transparent health care price information, quality information, and such other information as the commissioner determines is necessary to empower individuals to make economically sound and medically appropriate decisions.

(B)  The commissioner shall convene a working group composed of the commissioner of health, health care consumers, health care providers and facilities, the Vermont Program for Quality in Health Care, health insurers, and any other individual or group appointed by the commissioner to advise the commissioner on the development and implementation of the consumer health care price and quality information system.

(C)  The commissioner may require a health insurer covering at least 15,000 lives in this state to file with the commissioner a consumer health care price and quality information plan, in accordance with rules adopted by the commissioner.  Approved plans may include the internet publication of the charges established by health care facilities and health care providers, and other providers of health care services and products, including but not limited to providers of pharmaceutical products and medical equipment, and the reimbursable amounts negotiated with health insurers and payable by the individual in connection with the individual’s deductible or other cost sharing obligations.

(D)  The commissioner shall adopt such rules as are necessary to carry out the purposes of this subdivision.  The commissioner’s rules may permit the gradual implementation of the consumer health care price and quality information system over time, beginning with health care price and quality information which the commissioner determines is most needed by consumers, or which the commissioner determines can be most practicably provided to the consumer in an understandable manner.

(c)  Health insurers, health care providers, health care facilities, and other providers of health care services or products, including but not limited to providers of pharmaceutical products and medical equipment, and governmental agencies shall file reports, data, schedules, statistics, or other information determined by the commissioner to be necessary to carry out the purposes of this section.  Such information may include:

(1)  health insurance claims and enrollment information used by health insurers;

(2)  information relating to hospitals filed under subchapter 7 of this chapter (hospital budget reviews); and

(3)  any other information relating to health care costs, prices, quality, utilization, or resources required to be filed by the commissioner.

* * * Conforming Amendments * * *

Sec. 10.  32 V.S.A. § 8551 is amended to read:

§ 8551.  IMPOSITION; RATE AND BASIS OF TAX

A domestic or foreign insurance company, association or, society, or a hospital or medical service corporation, a health maintenance organization, other than life, or a surety or guaranty company, doing business in this state, shall pay a tax to the state, which is hereby assessed at the rate of two percent per annum on the gross amount of premiums and assessments written on its business in this state, but not including premiums received for reinsurance.  A domestic or foreign life insurance company, doing business in this state, shall pay a tax to the state, which is hereby assessed at the rate of two percent per annum on the gross amount of premiums and assessments collected on its business in this state, but not including premiums received for reinsurance.

Sec. 11.  32 V.S.A. § 8552 is amended to read:

§ 8552.  RETURNS

A domestic insurance company, association or, society, or a hospital or medical service corporation, a health maintenance organization, other than life, or surety or guaranty company shall pay a tax to the state on the gross amount of premiums and assessments written and not taxed in other states and shall pay a tax to the state on the gross amount of premiums and assessments collected and not taxed in other states and shall include such business in its returns.  A domestic life insurance company shall pay a tax to the state on the gross amount of premiums and assessments collected and not taxed in other states and shall include such business in its returns.  The term "taxed in other states" means:

(1)(A)  A tax imposed by another state on premiums and paid directly by the company, association, society, surety, guaranty, or life insurance company to such other state under an insurance premiums tax of the same general kind as found in subchapter 7 of chapter 211 of this title; or

(B)  A corporate income or franchise tax in which the premiums taxed under paragraph subdivision (A) of this subdivision (1) are a factor in the computation thereof; or

(2)  A tax of the same general kind as found in section 5035 of Title 8, imposed by another state upon surplus lines premiums which is paid directly or indirectly to that state by agents or brokers of the Vermont domestic insurer which is not itself authorized to do business in that state.

Sec. 12.  32 V.S.A. § 8553 is amended to read:

§ 8553.  TIME OF PAYMENT

Such tax shall be based upon the business of such company, association or, society, hospital or medical service corporation, or a health maintenance organization during the year terminating with December 31 preceding.  It shall be paid quarterly on or before the last day of the second calendar month following the quarter ending the last day of March, June, September, and December of each calendar year and shall be computed either upon the business of such company, association or, society, hospital or medical service corporation, or a health maintenance organization during the quarter for which the payment is made, or upon an estimated basis predicated upon prior years business, upon forms to be prescribed by the commissioner of taxes.  Where the aggregate tax imposed upon a company, association, or, society, hospital or medical service corporation, or health maintenance organization is reasonably expected to be less than $500.00 for the calendar year it may be paid on an annual basis not later than the last day of February following the close of the year.  Such company, association or, society, hospital or medical service corporation, or health maintenance organization shall annually make a final reconciliation return on or before the last day of February in the manner provided in section 8123 of this title.

Sec. 13.  8 V.S.A. § 4518 is amended to read:

§ 4518.  TAX EXEMPTION

A hospital service corporation shall be exempt from all forms of taxation, except as provided under subchapter 7 of chapter 211 of Title 32.

Sec. 14.  8 V.S.A. § 4590 is amended to read:

§ 4590.  TAX EXEMPTION

A medical service corporation shall be exempt from all forms of taxation, except as provided under subchapter 7 of chapter 211 of Title 32.

Sec. 15.  8 V.S.A. § 4516 is amended to read:

§ 4516.  ANNUAL REPORT TO COMMISSIONER

Annually, on or before the fifteenth day of March, a hospital service corporation shall file with the commissioner of banking, insurance, securities, and health care administration a statement sworn to by the president and treasurer of the corporation showing its condition on the thirty-first day of December.  The statement shall be in such form and contain such matters as the commissioner shall prescribe.  To qualify for the tax exemption set forth in section 4518 of this title, the statement shall include a certification that the hospital service corporation operates on a nonprofit basis for the purpose of providing an adequate hospital service plan to individuals of the state, both groups and nongroups, without discrimination based on age, gender, geographic area, industry, and medical history, except as allowed by subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.

Sec. 16.  8 V.S.A. § 4588 is amended to read:

§ 4588.  ANNUAL REPORT TO COMMISSIONER

Annually, on or before March 15, a medical service corporation shall file with the commissioner of banking, insurance, securities, and health care administration a statement sworn to by the president and treasurer of the corporation showing its condition on December 31, which shall be in such form and contain such matters as the commissioner shall prescribe.  To qualify for the tax exemption set forth in section 4590 of this title, the statement shall include a certification that the medical service corporation operates on a nonprofit basis for the purpose of providing an adequate medical service plan to individuals of the state, both groups and nongroups, without discrimination based on age, gender, geographic area, industry, and medical history, except as allowed by subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.

* * * Access to Out-of-State Insurance * * *

Sec. 17.  8 V.S.A. chapter 107 subchapter 9 is added to read:

Subchapter 9.  Consumer Health Care Options, Improvement,

Choice, and Empowerment Act

§ 4100n.  DEFINITIONS

For the purposes of this subchapter:

(1)  “Commissioner” means the commissioner of banking, insurance, securities, and health care administration.

(2)  “Out-of-state insurer” means a company offering health insurance policies that is domiciled in another state of the United States.

§ 4100o.  OUT-OF-STATE INSURERS

An insurer may not offer a health insurance policy to a resident of the state of Vermont unless it is issued a “certification of insurer” by the commissioner.  The certification shall assure that the following qualifications have been met:

(1)  The out-of-state insurer holds a valid certificate of authority to market individual health insurance in the state of its domicile.

(2)  Any policy for individual health insurance offered for sale in Vermont by an out-of-state insurer domiciled in another state of the United States complies with the applicable individual health insurance laws in the state of its domicile, and the policy is actively marketed in that state.

(3)  The insurance policy offered to Vermont residents is currently being actively marketed in the state of the out-of-state insurer’s domicile.

(4)  The out-of-state insurer maintains minimum capital and surplus requirements and maintains reserves as required by the commissioner.

(5)  The out-of-state insurer meets the commissioner’s requirements of reporting plan information with respect to individual health plans offered for sale in Vermont and discloses to prospective enrollees how the health plans differ from individual health plans offered by domestic insurers in a format approved by the commissioner.  Health plan policies and applications for coverage must contain the following disclosure statement or a substantially similar statement:

“This policy is issued by an out-of-state insurer and is governed by the laws and regulations of the State of (out-of-state insurer’s state of domicile).  This policy may not be subject to all the insurance laws and rules of the State of Vermont, including coverage of certain health care services or benefits mandated by Vermont law.  Before purchasing this policy, you should carefully review the terms and conditions of coverage under this policy, including any exclusions or limitations of coverage.”

(6)  Grievance procedures.  The out-of-state insurer meets the requirements of the state of Vermont grievance procedures with respect to health plans offered for sale in this state.

(7)  Unfair (insurance) trade practices.  Vermont’s provisions apply to the out-of-state insurer.

(8)  Premium taxes.  The out-of-state insurer is subject to applicable premium taxes imposed on insurers marketing individual health insurance in Vermont.

(9)  The out-of-state insurer participates in an insurance insolvency guaranty association to which a Vermont insurer that markets individual health insurance is required to belong in accordance with this title.  An insurance producer may not act as an agent of an out-of-state insurer certified to market individual health insurance pursuant to this bill, unless the producer holds a valid producer license from the state domicile of the out-of-state insurer.

§ 4100p.  VERMONT INSURERS

Notwithstanding any other provision of this title, except as expressly provided, a domestic insurer may offer for sale in this state an individual health plan duly authorized for sale in another state by a parent or subsidiary of the domestic insurer if:

(1)  The parent or subsidiary of the Vermont insurer holds a valid certificate of authority to market individual health insurance in the state of its domicile.

(2)  Any policy, contract or certificate of individual health insurance offered for sale in this state by a Vermont insurer complies with the applicable individual health insurance laws in the state or country of domicile of the parent or subsidiary, and the policy is actively marketed in that state.

(3)  The Vermont insurer meets the requirements for reporting plan information with respect to individual health plans offered for sale in this state and discloses to prospective enrollees how the individual health plans of the parent or subsidiary differ from individual health plans offered by domestic insurers in a format approved by the commissioner within 90 days of the effective date of this section.  Health plan policies and applications for coverage must contain the following disclosure statement or a substantially similar statement:

“This policy is issued by a Vermont Insurer but is governed by the laws and rules of the State of (state of domicile of parent or subsidiary of domestic), which is the state of domicile of the parent or subsidiary of the domestic insurer or health maintenance organization.  This policy might not be subject to all the insurance laws and rules of the State of Vermont, including coverage of certain health care services or benefits mandated by Vermont law.  Before purchasing this policy, you should carefully review the terms and conditions of coverage under this policy, including any exclusions or limitations of coverage.”

(4)  The Vermont insurer meets the requirements for grievance procedures with respect to health plans offered for sale in this state.

* * * Appropriations * * *

Sec. 18.  APPROPRIATIONS; POSITIONS AUTHORIZED

The following sums are appropriated in fiscal year 2006 to the commissioner of banking, insurance, securities, and health care administration:

(1)  $3,000,000.00 from the health insurance access trust fund to carry out the purposes of the nongroup reinsurance program.

(2)  $4,500,000.00 from the health insurance access trust fund to be allocated to the secretary of human services to carry out the purposes of the premium assistance program.

(3)  $40,000.00 from the general fund and $60,000.00 from charges allocated to hospitals, nonprofit hospital and medical services corporations, health insurance companies and health maintenance organizations under 18 V.S.A. § 9415 to develop and adopt the initial rules of the nongroup reinsurance program and the consumer health care price and quality information system.

* * *  Effective Dates and Applicability * * *

Sec. 19.       HEALTHY VERMONTERS;  EFFECTIVE DATES                                                            APPLICABILITY

(a)  Secs. 1 through 18 of this act shall take effect July 1, 2005 except that Secs.10 through 14 of this act shall take effect January 1, 2006 and shall apply to taxes paid by nonprofit hospital and medical service corporations and health maintenance organizations on premiums and assessments during calendar year 2006 and thereafter.

(b)  Sec. 17 shall apply to out-of-state insurers and Vermont insurers notwithstanding any other provision of law to the contrary in Title 8 of the Vermont Statutes or otherwise, except where it expressly so provides.

(c)  The commissioner’s requirements of reporting plan information under Sec. 17 with respect to individual health plans offered for sale in Vermont and disclosure to prospective enrollees on differences from individual health plans offered by domestic insurers shall be prepared and approved by the commissioner within 90 days of the effective date of this act.

* * * PART II.  REDEVELOPMENT ZONES * * *

Sec.20.  10 V.S.A. chapter 21A is added to read:

CHAPTER 21A.  REDEVELOPMENT ZONES

§ 511.  DEFINITIONS

As used in this chapter:

(1)  “Redevelopment zone” means an area within a municipality designated to accommodate a significant amount of industrial activity, high technology, or other job-producing activity; it includes one or more industrial facilities that have been vacant or substantially underutilized for more than ten years; and it has at least 15,000 square feet or a minimum of five acres if the site includes an older structure for which there is no economically feasible future business or industrial use.

(2)  “Secretary” means the secretary of commerce and community development.

(3)  “Substantially underutilized” means a property or facility of which less than ten percent has been occupied for uses other than storage or warehousing for at least ten years and for which active and sustained marketing have produced no significant employment.

§ 512.  DESIGNATION OF REDEVELOPMENT ZONES

(a)  The secretary may approve an application from a municipality for designation of a municipal site as a redevelopment zone.  The application to participate in the redevelopment zone program shall include any restrictions or requirements on the type or size of businesses within the redevelopment zone, and any other information that the secretary requires to make a determination, accompanied by evidence from the municipality supporting the following:

(1)  The site is or is part of an existing industrial center, an extension of an existing center, or an industrial facility or industrial property.

(2)  The designation is consistent with the approved regional and municipal plans in accordance with section 2293 of Title 3 and is supported by the applicable regional development corporation and regional planning commissions.  

(b)  A redevelopment zone approved and designated by the secretary shall be in effect for ten years.  A municipality may apply for an extension of this period for no more than an additional ten years. 

(c)  A municipality may restrict access to the redevelopment zone to businesses that have applied to the secretary for eligibility to enter the redevelopment zone.

§ 513.  QUALIFYING BUSINESS

(a)  Any business that intends to locate or expand into a redevelopment zone may qualify for the benefits offered under section 289 of this title, provided the secretary determines the business complies with all the following:

(1)  It is in compliance with applicable local zoning and development criteria for locating in the redevelopment zone.

(2)  It is in compliance with applicable federal, state, and local regulations.

(3)  Within a year of approval, it will have employed at least ten new full‑time employees in positions that are not retail sales.  

(4)  Wages and benefits paid to all full-time employees meet or exceed the prevailing compensation level for that particular employment.

(5)  If locating within a limited local market, it will not have an unfair competitive advantage over other Vermont businesses in the same or similar line of business and in the same limited local market as a result of the benefits available under this chapter.

(b)  Any taxpayer that purchases and redevelops an industrial building in a redevelopment zone for sale or lease to a qualifying business may be eligible for the benefits in subsection 289(a) of this title directly related to the taxpayer’s business activities as a redeveloper, seller, or lessor within the redevelopment zone, provided the secretary determines that the taxpayer satisfies subdivisions (a)(1) and (2) of this section.  Any benefits received by a redeveloper related to the redevelopment, sale, or lease of improved space to a qualifying business within a redevelopment zone shall not also be separately available to a qualifying business that purchases or leases all or part of the facility improved by the redeveloper.

 

§ 514.  BENEFITS FOR BUSINESSES LOCATED IN REDEVELOPMENT

            ZONES

(a)  A qualified business located in a redevelopment zone is eligible for the following benefits:

(1)  A ten-year credit equal to the income tax that would otherwise be due under chapter 151 of Title 32, multiplied first by a fraction, the numerator of which is the total wages, salaries, and other personal service compensation paid during the taxable year to employees for services performed within the redevelopment zone, and the denominator of which is the total of those payments to employees within the state, and second by a fraction, the numerator of which is the average value of all real and tangible personal property within the redevelopment zone, and the denominator of which is the average value of such property within the state.

(2)  A ten-year exemption from the sales tax imposed under 32 V.S.A. § 9771 and the use tax imposed under 32 V.S.A. § 9773 for the building materials, machinery, equipment, or trade fixtures purchased for use in the redevelopment zone.

(3)  Consideration by the public service board of lower rates through economic development agreements for regulated utilities as allowable under 30 V.S.A. § 229.

(4)  A ten-year exemption from the education tax imposed under 32 V.S.A. § 5402 on the incremental education tax on the equalized nonresidential value of the redeveloped property.

(5)  Eligibility for the employment training program in section 531 of this title.

(6)  A workers’ compensation insurance rating transfer, only for an out‑of‑state business that has at least three years of experience and is relocating from a state that participates in the Workers’ Compensation Statistical Plan as developed and overseen by the National Council on Compensation Insurance.  Other businesses may apply to the National Council on Compensation Insurance for an experience rating at lower thresholds than may be available in Vermont.

(7)  Expedited processing of applications for state permits and other state approvals, with all applications being decided, where legally permissible, within 30 days of the receipt of a completed application.

(8)  Priority consideration by any state agency for eligibility for state or federal funding or other aid to industrial development based on a cost-benefit analysis.

(9)  Priority consideration for financing programs available through the Vermont economic development authority in chapter 12 of this title.

(10)  Technical support from the department of public safety for the rehabilitation of older and historic buildings, consistent with the department’s available resources.

(b)  Benefits shall not be available for any of the following:

(1)  Retail sales activities.

(2)  Activities relating to the calculation of benefit amounts or eligibility.

(3)  Relocating a business within Vermont to a redevelopment zone. 

(c)  Benefits under this section shall be available during the first tax year in which the qualified business has made expenditures in the designated redevelopment zone.  A taxpayer claiming an income tax benefit under this section shall submit a copy of the employer’s application to the secretary and the secretary’s written determination along with the first return on which a benefit is claimed.  Annually, beginning no later than 12 months after the secretary’s determination under section 288 of this title, a qualifying business shall submit a written report to the secretary verifying that the business continues to meet all requirements of subsection 288(a) of this title.

§ 515.  TERMINATION OF BENEFITS

Benefits granted to a business in a redevelopment zone may be terminated by the secretary upon determination that the business no longer is in compliance with the requirements of section 288 of this title.  A decision to terminate redevelopment benefits shall not be subject to chapter 25 of Title 3 and shall be final and not reviewable.

§ 516.  RESPONSIBILITIES OF THE SECRETARY

The secretary shall:

(1)  Act as the ombudsman between state agencies, businesses, and municipalities under this chapter.

(2)  Maintain a list of all redevelopment zones and any local restrictions on each.

(3)  Develop and maintain an effective marketing program to inform businesses outside Vermont of the benefits of locating in Vermont and, specifically, in redevelopment zones.

(4)  Provide written notice to the municipality of the secretary’s decision to grant or deny a request for designation of a redevelopment zone.  This determination shall be made within 45 days of receipt of a completed application from a municipality.  The secretary shall state all the reasons for denying the request and the steps that must be taken to bring the municipality’s plan into conformance with the requirements of section 288 of this section.

(5)  No later than 45 days after receipt of a completed application from a business under section 287 of this title, including any additional information requested by the secretary to make a determination, the secretary shall issue a written decision to the business, and, if denied, the reasons for the denial.  A business denied eligibility may submit a new application at any time.

(6)  The secretary shall notify all providers of telecommunications services holding certificates of public good in the state of the establishment of redevelopment zones and encourage their participation in planning for the provision of sufficient telecommunications infrastructure to serve businesses operating in those zones.

§ 517.  PILOT PROJECT

(a)  The secretary may designate two pilot redevelopment zones on or before December 31, 2005, and grant the benefits under this program to businesses that locate in the two pilot zones.

(b)  The secretary, on or before January 15, 2007, and biennially thereafter, shall report to the general assembly on the progress of the two pilot redevelopment zones and the impact of this program on new economic development and the creation of new jobs.

Sec. 21.  24 V.S.A. § 4387(a) is amended to read:

(a)  All plans, including all prior amendments, shall expire every five years unless they are readopted according to the procedures in section 4385 of this title except for that part of a plan creating a redevelopment zone under chapter 21A of Title 10, which shall expire at the end of the term of the redevelopment zone.

Sec. 22.  24 V.S.A. § 4414(13) is added to read:

(13)  A redevelopment zone pursuant to chapter 21A of Title 10.

Sec. 23.  32 V.S.A. § 5404a(a) is amended to read:

(a)  Tax agreements and exemptions affecting the education property tax grand list.  A tax agreement or exemption shall affect the education property tax grand list of the municipality in which the property subject to the agreement is located if the agreement or exemption is:

* * *

(7)  approval of a qualified business pursuant to chapter 21A of Title 10, provided the agreement provides for substantial creation of new jobs and economic activity.

Sec. 24.  32 V.S.A. § 9741(48) is added to read:

(48)  Sales of building materials, machinery, equipment, or trade fixtures incorporated into a redevelopment zone designated pursuant to chapter 21A of Title 10.

Sec. 25.  REDEVELOPMENT ZONES; EFFECTIVE DATE

This section and Secs. 20 through 24 of this act shall take effect on passage.

* * * PART III.  WORKERS’ COMPENSATION * * *

Sec. 26.   21 V.S.A. § 618(a)(1) 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 compensable injury subject to this chapter, the employer or the insurance carrier shall pay compensation in the amounts and to the person hereinafter specified.  For the purposes of this chapter, a compensable injury is an accidental injury, or an accidental injury to a prosthetic appliance, arising out of and in the course of employment requiring medical services or resulting in disability or death and for which the work conditions or events were the major contributing cause of the injury.   The compensation of a person who is under guardianship shall be paid to the person’s guardian.

* * * Fraud * * *

Sec. 27.  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, 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 of Title 21, either for her herself or himself or for any other person, shall be fined not more than $100,000.00 or imprisoned not more than three years, or both 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 chapter 9 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.

* * * Simplification of Compensation Rates * * *

Sec. 28.  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 80 percent of the injured employee’s average weekly wage.  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 80 percent of the employee’s average weekly wage, 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 80 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.  If the disability continues for a period of 14 continuous days, the employer shall utilize medical case management review and intervention, and the injured employee shall cooperate with this medical case management.

* * * Penalty for Late Payment * * *

Sec. 29.  21 V.S.A. § 650(e) is amended 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, in cases in which there is not an ongoing dispute, ten percent of the amount due shall be added and paid to the worker for each day over 30 days in which the benefits are not paid.

* * * Vocational Rehabilitation * * *

Sec. 30.  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 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.

The employer may voluntarily provide vocational rehabilitation services to the injured employee.  In the event these services are not voluntarily provided, the employee may present evidence establishing the employee’s inability to perform suitable work and the need for vocational rehabilitation services.  Upon receipt of this evidence, the employer shall either provide an entitlement assessment or present evidence supporting the denial of vocational rehabilitation services.  The employer shall designate a vocational rehabilitation provider from a list provided by the commissioner to 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.  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 a combination of these, shall be paid for by the employer.  In addition, the employer shall pay reasonable costs of books, tools, and other basic materials required in the rehabilitation process.  Refusal to accept vocational rehabilitation pursuant to an order of the commissioner shall result in loss of compensation for each week of the refusal, if the commissioner so directs.

* * * Compensability of Preexisting Injuries * * *

Sec. 31.  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)  If an otherwise compensable injury combines at any time with a  preexisting condition to cause or prolong disability or a need for treatment, the combined condition is compensable only so long as and to the extent that the otherwise compensable injury is the major contributing cause of the disability of the combined condition or the major contributing cause of the need for treatment of the combined injury.  For the purposes of this subdivision, “preexisting condition” means any injury, disease, congenital abnormality, personality disorder, or similar condition that contributes to disability or need for treatment, provided that:

(A)  Except for a claim in which arthritis is the preexisting condition, the worker has been diagnosed with that condition, or has obtained medical treatment for the symptoms of that condition regardless of diagnosis.

(B)  In a claim for an initial injury or omitted condition, the diagnosis or treatment precedes the initial injury.

(C)  In a claim for a new medical condition, the diagnosis or treatment precedes the onset of the new medical condition.

(D)  In a claim for a worsening condition, the diagnosis or treatment precedes the onset of the worsened condition.

(4)  A preexisting condition, except for preexisting mental conditions, may be compensable only if the work conditions or events constitute the major contributing cause of a pathological worsening of the preexisting condition.

(5)  A preexisting mental condition may be compensable only if work conditions or events constitute the major contributing cause of an actual worsening of the preexisting condition and not just of its symptoms.

(6)  Medical service claims for a preexisting condition are limited to treatment for the worsening of the preexisting condition and not for the entire condition.

* * * Duration of Temporary Total Disability * * *

Sec. 32.  21 V.S.A. § 643 is amended to read:

§ 643.  –PERIOD OF PAYMENTS; LIMITATION

Payments shall not continue after such disability ends.  Notwithstanding any other provision of law, payments made pursuant to section 642 of this title shall not exceed two years.

* * * Cost-of-Living Adjustment for Permanent Total Disability * * *

Sec. 33.  21 V.S.A. § 650(d) is amended to read:

(d)  Compensation computed pursuant to this section for permanent total disability shall be adjusted annually on July 1, so that such compensation continues to bear the same percentage relationship to the average weekly wage in the state as computed under this chapter as it did at the time of injury.  Compensation for temporary total or temporary partial disability, permanent partial disability, or death shall not be adjusted annually.

Sec. 34.  WORKERS’ COMPENSATION; EFFECTIVE DATES.

     This section and Secs. 26 through 33 shall take effect July 1, 2005.

* * * PART IV. MITIGATION OF THE LOSS OF PRIME AGRICULTURAL SOILS * * *

Sec. 35.  10 V.S.A. § 6001 is amended to read:

§ 6001.  DEFINITIONS

When used in this chapter:

* * *

(8)  “Forest and secondary agricultural Productive forest soils” means  those soils which are not primary agricultural soils but which have a reasonable potential for commercial forestry or commercial agriculture, and which have not yet been developed.  In order to qualify as productive forest or secondary agricultural soils, the land containing such soils shall be characterized by of a size and location, relative to adjoining land uses, natural conditions condition, and ownership patterns so that those soils will be capable of supporting or contributing to present or potential a commercial forestry or commercial agriculture operationIf a tract of land includes other than forest or secondary agricultural soils only the forest or secondary agricultural soils shall be impacted by criteria relating specifically to such soils.  Land use on those soils may include commercial timber harvesting and specialized forest uses, such as maple sugar or Christmas tree production.

* * *

(15)  “Primary agricultural soils” means soils which have a potential for growing food and forage crops, are sufficiently well drained to allow sowing and harvesting with mechanized equipment, are well supplied with plant nutrients or highly responsive to the use of fertilizer, and have soil map units with the best combination of physical and chemical characteristics that have a potential for growing food, feed, and forage crops, have sufficient moisture and drainage, plant nutrients or responsiveness to fertilizers, few limitations for cultivation or limitations which may be easily overcome.  In order to qualify as primary agricultural soils, the, and an average slope of the land containing such soils does that does not exceed 15 percent, and such land is.  Present uses may be cropland, pasture, regenerating forests, forestland, or other agricultural or silvicultural uses.  However, the soils must be of a size and location, relative to adjoining land uses, so that those soils will be capable, following removal of any identified limitations, of supporting or contributing to an economic or commercial agricultural operation.  If a tract of land includes other than primary agricultural soils, only the primary agricultural soils shall be impacted by criteria relating specifically to such soils.  Unless contradicted by the qualifications stated in this subdivision, primary agricultural soils shall include important farmland soils map units with a rating of prime, statewide, or local importance as defined by the Natural Resources Conservation Service (N.R.C.S.) of the United States Department of Agriculture (U.S.D.A.).

Sec. 36.  10 V.S.A. § 6086(a)(9)(B) and (C) are amended to read:

(B)  Primary agricultural soils.  A permit will be granted for the development or subdivision of primary agricultural soils only when it is demonstrated by the applicant that, in addition to all other applicable criteria, either, the subdivision or development will not significantly reduce the agricultural potential of the primary agricultural soils; or,:

(i)  the applicant can realize a reasonable return on the fair market value of his land only by devoting the primary agricultural soils to uses which will significantly reduce their agricultural potential the development or subdivision will not significantly interfere with or jeopardize the continuation of agriculture or forestry on adjoining lands or reduce their agricultural or forestry potential; and

(ii)  there are no nonagricultural or secondary lands other than primary agricultural soils owned or controlled by the applicant which are reasonably suited to the purpose of the development or subdivision; and

(iii)  the subdivision or development has been planned to minimize the reduction of agricultural potential by providing for reasonable population densities, reasonable rates of growth, and the use of cluster planning and new community planning designed to economize on the cost of roads, utilities and land usage; and suitable mitigation will be provided for all primary agricultural soils impacted by the development or subdivision, in accordance with section 6093 of this title and rules adopted by the land use panel.

(iv)  the development or subdivision will not significantly interfere with or jeopardize the continuation of agriculture or forestry on adjoining lands or reduce their agricultural or forestry potential.

(C)  Forest and secondary agricultural Productive forest soils.  A permit will be granted for the development or subdivision of productive forest or secondary agricultural soils only when it is demonstrated by the applicant that, in addition to all other applicable criteria, either, the subdivision or development will not significantly reduce the potential of those soils for commercial forestry, including but not limited to specialized forest uses such as maple production or Christmas tree production, of those or adjacent primary agricultural soils for commercial agriculture; or:

(i)  the applicant can realize a reasonable return on the fair market value of his land only by devoting the forest or secondary agricultural soils to uses which will significantly reduce their forestry or agricultural potential the development or subdivision will not significantly interfere with or jeopardize the continuation of agriculture or forestry on adjoining lands or reduce their agricultural or forestry potential; and

(ii)  there are no nonforest or secondary agricultural lands other than productive forest soils owned or controlled by the applicant which are reasonably suited to the purpose of the development or subdivision; and

(iii)  the subdivision or development has been planned to minimize the reduction of forestry and agricultural potential by providing for reasonable population densities, reasonable rates of growth, and the use of cluster planning and new community planning designed to economize on the cost of roads, utilities and land usage the potential of those productive forest soils through innovative land use design resulting in compact development patterns, so that the remaining forest soils on the project tract may contribute to a commercial forestry operation

Sec. 37.  10 V.S.A. § 6093 is added to read:

§ 6093.  Agricultural SOILS mitigation

(a)  Mitigation for loss of primary agricultural soils. Suitable mitigation for the conversion of primary agricultural soils necessary to satisfy subdivision 6086(a)(9)(B)(iii) of this title shall depend on where the project tract is located. 

     (1) Project located in growth area.  A proposed development or subdivision may be located:

(A) in compact, concentrated areas of land development including residential uses, economic growth, or public investment or any combination of those uses designated in a municipal plan duly adopted and approved pursuant to sections 4385, 4382, and 4350 of Title 24, and designated in a regional plan under 24 V.S.A. § 4348a, and consistent with the goals of 24 V.S.A. § 4302.  Such areas may include a downtown development district, village center, or new town center development district duly designated pursuant to chapter 76A of Title 24; or, a business or industrial park designated in a duly adopted and approved municipal plan; or 

(B) in a town that does not have an approved municipal plan, if the town, under 24 V.S.A. § 4349, has adopted the regional plan provisions that identify one or more portions of the town as a growth area, and the project is located in such a growth area, and the area is characterized by a mixture of uses:

(i) that include retail, office, services and other commercial, civic, or residential uses, including affordable housing, recreational activities, and industrial uses in densely compact areas; and

(ii) that result in compact, concentrated areas of land development served by existing or planned infrastructure and capital investment, viable pedestrian circulation, and alternative transportation opportunities.

     (2)  Fee for project located in growth area.  If the project tract is located in one of the growth areas identified in subdivisions (a)(1)(A) or (B) of this section, the applicant shall deposit an offsite mitigation fee into the Vermont housing and conservation trust fund established under section 312 of this title for the purpose of preserving primary agricultural soils of equal or greater value with the highest priority given to preserving prime agricultural soils as defined by U.S.D.A. Any required offsite mitigation fee shall be derived by:

(A) determining the number of acres of primary agricultural soils impacted by the proposed development or subdivision; 

(B) multiplying the number of impacted acres of primary agricultural soils by a factor resulting in a 1:1 ratio; and

(C) multiplying the resulting product by a “price per acre” value, which shall be based on the amount that the secretary of agriculture, food, and markets has determined to be the recent, per-acre cost to acquire conservation easements for primary agricultural soils in the same geographic region as the proposed development or subdivision;  

(3)  Preservation of land for project located outside growth area.   If the project tract is not located in one of the growth areas identified in subdivisions (a)(1)(A) or (B) of this section, the applicant shall be required to provide suitable mitigation either on site or off site, whichever will best further the goal of preserving primary agricultural soils for present and future agricultural use, with special emphasis on preserving prime agricultural soils.  Preservation of primary agricultural soils shall be accomplished through innovative land use design resulting in compact development patterns which will maintain a sufficient acreage of primary agricultural soils on the project tract capable of supporting or contributing to an economic or commercial agricultural operation.  The number of acres of primary agricultural soils to be preserved shall be derived by:

(i) determining the number of acres of primary agricultural soils impacted by the proposed development or subdivision; and

(ii) multiplying the number of impacted acres of primary agricultural soils by a factor based on the quality of those primary agricultural soils, and other factors as the secretary of agriculture, foods and markets may deem relevant, including the soil’s location; accessibility; tract size; existing agricultural operations; water sources; drainage; slope; the presence of ledge or protected wetlands; and the infrastructure of the existing farm or municipality in which the soils are located; and the  N.R.C.S. rating system for Vermont soils.  This factor shall result in a ratio of no less than 2:1, but no more than 3:1, protected acres to acres of impacted primary agricultural soils. 

(b)  Mitigation flexibility.  Notwithstanding any other provision of this section and regardless of the location of the project tract, the district commission, in order to further the goal of preserving primary agricultural soils for present and future agricultural use, may approve suitable onsite or offsite mitigation, including the use of mitigation fees or preservation of primary agricultural soils on other lands owned or controlled by the applicant in the town or district where the project tract is located, in accordance with this section, or some combination of those measures, if that action is deemed consistent with the agricultural elements of local and regional plans, and the goals of section 4302 of Title 24. In appropriate circumstances, the secretary may recommend to the district commission and the district commission may require that specified primary agricultural soils be preserved, with special emphasis on preserving prime agricultural soils, notwithstanding the fact that they are located within a growth area.  However, all factors used to calculate suitable mitigation acreage or fees under this subdivision shall be determined by the location of the project tract.

(c)  Preliminary mitigation agreement. An applicant may enter into a preliminary mitigation agreement with the secretary of agriculture, food, and markets in accordance with this section which shall create a rebuttable presumption of compliance with respect to the requirements of providing suitable mitigation pursuant to subdivision 6086(a)(9)(B)(iii) of this title. The agreement may only address the identification of primary agricultural soils pursuant to subdivision 6001(a)(15) of this title and the provision of suitable mitigation pursuant to the calculations required by this section.  The district commission shall make all final determinations pursuant to subdivisions 6001(a)(15) and 6086(a)(9)(B) and section 6093 of this title.

(d)  Exemption from mitigation for affordable housing in growth areas.  Notwithstanding any other language in this chapter to the contrary, subdivision 6086(a)(9)(B)(iii) of this title shall not apply to a housing development located in one of the growth areas identified in subdivision (a)(1) of this section in which at least 50 percent of the units are affordable housing, as affordable housing is defined under subdivision 4303(1) of Title 24.  All affordable housing units shall be subject to housing subsidy covenants, as defined in 27 V.S.A. § 610 that preserve their affordability for a period of 99 years or longer.

(e)  Housing and conservation trust fund priorities.  Any funds collected pursuant to this section shall be deposited into the Vermont housing and conservation trust fund established under section 312 of this title and shall be administered by the Vermont housing and conservation board in a manner consistent with this section and the Vermont housing and conservation trust fund act.  Priorities for the use of these funds shall include the conservation of primary agricultural soils identified by the town where the proposed development or subdivision is located and may include primary agricultural soils that form or contribute to an effective buffer separating rural areas from more developed areas provided that such soils are capable of contributing to an economic or commercial agricultural operation.

(f)   Housing and conservation trust fund flexibility. If funds collected for offsite mitigation are not used by the Vermont housing and conservation board to purchase development rights and conservation restrictions on primary agricultural soils within the municipality in which the proposed development or subdivision is located, the funds collected for off-site mitigation may be used to purchase development rights and conservation restrictions on primary agricultural soils elsewhere in the geographic area or elsewhere in the state.  However, prior to committing off-site mitigation funds to purchase development rights and conservation restrictions on primary agricultural soils outside the municipality, the Vermont housing and conservation board shall give the municipality a reasonable time, meaning between 6 and 12 months from commencement of construction of improvements in the development or subdivision, to obtain a signed written contract to purchase development rights and conservation restrictions on primary agricultural between the owner and a  qualified holder, as defined in section 821 of this title, with the ability to monitor and enforce conservation  easements in perpetuity.

(g)  Protecting primary agricultural soils by permit conditions and conservation easements.  All primary agricultural soils preserved for commercial or economic agricultural use under subdivision (a)(3) of this section shall, at a minimum, be protected by permit conditions that are issued by the district commission. All primary agricultural soils preserved for commercial or economic agricultural use by the Vermont housing and conservation board pursuant to this section shall be protected by  permanent conservation easements (grant of development rights and conservation restrictions) conveyed to a qualified holder, as defined in section 821 of this title, with the ability to monitor and enforce easements in perpetuity.

Sec. 38.  RULES OF THE NATURAL RESOURCES BOARD

In accordance with 10 V.S.A. § 6025(b), the land use panel of the natural resources board shall adopt rules to implement the regulatory purposes of this act, in order to promote the development of land in a manner that maintains the historic Vermont settlement pattern of compact village and urban centers separated by rural countryside, while preserving primary agricultural soils, with special emphasis on preserving prime agricultural soils. 

 Sec. 39.  SOILS INVENTORY

(a)  The agency of agriculture, food and markets shall work with the federal Natural Resources Conservation Service and the Vermont Center for Geographic Information to develop a state soils inventory.  The soils inventory shall be produced in map form and shall include, in digitized form to the extent available, the location of primary agricultural soils in the state that remain undeveloped.  The agency shall present the inventory to the committees on agriculture and natural resources and energy of the general assembly by January 15, 2006, together with an analysis of options and recommendations with respect to how to treat the state’s remaining prime agricultural soils that are not developed, and how to give a higher priority to the conservation of those soils.  The recommendations shall be developed in consultation with the Vermont housing and conservation board and the regional planning commissions and shall address the means by which information developed in the survey shall be made available to regional and municipal planning commissions.

(b)  The state shall urge the federal Natural Resources Conservation Service to complete the soils mapping of Essex and Caledonia counties and to certify the soils mapping of Chittenden County.

Sec. 40.  AGRICULTURAL SOILS; EFFECTIVE DATES.

     This section and Secs 35 through 39 shall take effect July 1, 2005.

* * * PART V.   TAXATION AND TAX CREDITS ***

* * * Taxation of Corporate Income * * *

Sec. 41  CORPORATE INCOME TAX PHASE OUT

     (a) The rates of the tax on income of corporations set out in 32  V.S.A. §5832 shall be reduced by twenty percent for taxable years beginning on and after January 1, 2006; reduced by twenty-five percent for taxable years beginning on and after January 1, 2007; reduced by thirty-three percent for taxable years beginning on and after January 1, 2008; reduced by fifty percent for taxable years beginning on and after January 1, 2009; and reduced by one hundred percent for taxable years beginning on and after January 1, 2010. 

     (b) Subchapter 3 of chapter 151 of Title 32 (Taxation of Corporations) is repealed effective January 1, 2010.

* * * Payroll based Tax Credit * * *

Sec. 42.  32 V.S.A. § 5930y is added to read:

§ 5930y  PAYROLL BASED TAX CREDIT AGAINST WITHHOLDING

(a)  For the purposes of this section:

(1)  “Application base number of jobs” means the total number of full‑time Vermont jobs, on an annualized basis, held by nonowners at the time of application, including employees that have been laid off or otherwise terminated within six months of the date of application.

(2)  “Application base payroll” means the total Vermont gross wages and salaries paid to full-time, nonowner employees on an annualized basis at the time of application, including employees who have been laid off or otherwise terminated within six months prior to the date of application.

(3)  “Award period” means the consecutive five years during which a business may add qualifying jobs and qualifying capital investments eligible for payroll‑based credits under this section.

(4)  “Base number of jobs” means the total number of full-time Vermont jobs held by nonowners on an annualized basis.

(5)  “Base payroll” means the total Vermont gross wages and salaries actually paid to full-time, nonowner employees.

(6)  “Credit percentage” means the percentage applied to qualifying payroll in order to calculate earned credits.

(7)  “Full-time employee” means an employee who works at least 37 hours each week.

(8)  “Incentive ratio” set at 70 percent is the percentage applied to the net fiscal benefit in order to calculate the maximum award that may be authorized under this section.

(9)  “Incremental payroll” means the portion by which current year base payroll exceeds prior year base payroll.

(10)  “Job threshold” means the number of jobs representing expected growth as determined by the council using the cost-benefit model, above which otherwise qualifying jobs can earn credits under this section.

(11)  “Net fiscal benefit” means the excess of the present value benefit to the state over the present value cost to the state as calculated by the cost‑benefit model.

(12)  “Nonowner” means an employee with no more than 10 percent ownership interest, including attribution of ownership interests of the employee’s spouse, parents, spouse’s parent, siblings, and children.

(13)  “Qualifying capital investment” means projected investment in new facilities, machinery and equipment the value of which is an input to the cost‑benefit model in evaluating applications.

(14)  “Qualifying jobs” means the number of full-time Vermont jobs performed by non-owners in excess of the base number of jobs and the job threshold that meet or exceed wage thresholds established by the council.

(15)  “Qualifying payroll” means actual Vermont gross wages and salaries paid for qualifying jobs in a utilization period year, provided incremental payroll in that year equals or exceeds such gross wages.

(16)  “Utilization period” means the period during which credits can be claimed, and includes each year of the award period plus the four years immediately following each year of the award period.

(17)  “Vermont gross wages and salaries” means Medicare wages as reported on Federal Tax Form W2 to the extent those wages are Vermont wages.

(18)  “Wage threshold” means the minimum annualized Vermont gross wages and salaries paid, as determined by the council, but not less than fifty percent above the minimum wage, in order for a new job to be a qualifying job under this section.

(b)  A business may apply to the council for approval of a payroll-based credit against its withholding tax liability.  In addition to any other information that the Vermont economic progress council may require in order to fulfill its obligations under this section, an application shall include all the following information:

(1)  Application base number of jobs at time of application.

(2)  Total payroll at time of application.

(3)  Application base payroll.

(4)  Projected number of qualifying jobs in the award period.

(5)  Projected qualifying payroll for each year in the award period.

(6)  Projected qualifying capital investment to be made in the award period.

(7)  A statement signed by the president or chief executive officer or equivalent acknowledging that to the extent the applicant fails to meet the minimum capital investment by the end of the award period, any credits remaining to be earned shall be limited, and any credits taken shall be subject to complete or partial reversal, pursuant to subsection (g) of this section.

(c)  The council shall review each application and ascertain, to the best of its judgment, that but for the credit provided for in this section, the proposed economic development would not occur or would occur in a significantly different and significantly less desirable manner.  Applications that do not meet the “but for” test are not eligible for the credit and shall not be further considered by the council.  If the “but for” test is answered in the affirmative, then prior to approving any application, the council shall evaluate the overall consistency of each application with the following guidelines:

(1)  The enterprise should create new, full-time jobs to be filled by individuals who are Vermont residents.  The new jobs shall not include jobs or employees transferred from an existing business in the state, or replacements for vacant or terminated positions in the applicant’s business.  The new jobs include those that exceed the applicant’s average annual employment level in Vermont during the two preceding fiscal years.  The enterprise should provide opportunities that increase income, reduce unemployment, and reduce facility vacancy rates.  Preference should be given to projects that enhance economic activity in areas of the state with the highest levels of unemployment and the lowest levels of economic activity.

(2)  The new jobs should make a net positive contribution to employment in the area, and meet or exceed the prevailing compensation level, including wages and benefits, for the particular employment sector.  The new jobs should offer opportunities for advancement and professional growth consistent with the employment sector.

(3)  The enterprise should create positive fiscal impacts on the state, the host municipality, and the region as projected by the cost-benefit model applied by the council under subsection (d) of this section.

(4)  The enterprise should be welcomed by the host municipality, and should conform to all appropriate town and regional plans and to all permit and approval requirements.

(5)  The enterprise should protect or improve Vermont’s natural, historical, and cultural resources, and enhance Vermont’s historic settlement patterns.

(6)  It is desirable for the enterprise to make use of Vermont resources.

(7)  It is desirable for the enterprise to strengthen the quality of life in the host municipality, and to foster cooperation within the region.

(8)  It is desirable for the enterprise to use existing infrastructure or to locate in an existing downtown redevelopment project.

(9)  If the enterprise proposes to expand within a limited local market, then the enterprise should not be given an unfair competitive advantage over other Vermont businesses in the same or similar line of business and in the same limited local market as a result of the economic incentive granted.

(d)  The council shall apply a cost-benefit model in reviewing a business application to determine the net fiscal benefit to the state.  The cost-benefit model shall be a uniform and comprehensive methodology for assessing and measuring the projected net fiscal benefit of proposed economic development activities.  Any modification of the cost-benefit model shall be subject to the approval of the joint fiscal committee.  The council shall perform the cost‑benefit analysis in consultation with the commissioner of economic development.  The cost-benefit analysis shall include consideration of the effect of the passage of time and inflation on the value of multiyear fiscal benefits and costs.

(e)  Except as provided in subsection (h) of this section, the value of the credit will be dependent upon the net fiscal benefit resulting from projected qualifying payroll and qualifying capital investment.  An incentive ratio shall be applied to the net fiscal benefit generated by the cost-benefit model in order to determine the maximum award the council may authorize for each application it approves.  The council shall establish appropriate job and wage thresholds and minimum qualifying capital investment for individual applications the council wishes to approve.  The council shall calculate a credit percentage for each approved application as follows:

Authorized award amount ÷ [Projected average wage × 5 (number of years in award period) × projected number of qualifying jobs over the award period]

(f)  The council shall approve or deny an application in writing within 45 days of receipt of a completed application.  An approval shall specify the application base jobs at the time of the application; application base payroll; total payroll at the time of application; job thresholds for each year of the award period; the projected number of qualifying jobs for each year of the award period; projected qualifying payroll for each year of the award period; the credit percentage; the minimum amount and description sufficient for application of subsection (g) of this section of the nature of qualifying capital investment over the award period upon which approval shall be conditioned; and the amount of the total award.  The council shall provide a copy of each approval to the tax department along with a copy of the application submitted by that applicant.

(g)  A business whose application is approved and meets or exceeds its award year thresholds may claim as a credit against its withholding tax liability under section 5841 of this title an amount equal to the qualifying payroll multiplied by the credit percentage for each year of the utilization period, not to exceed the total award approved by the council.  The tax department shall deny applications for credits in each year during the utilization period in which the award year thresholds are not maintained or have not been reestablished.  The credit is refundable and must be claimed annually on a credit return available from the tax department filed no later than February 28 of each year of the utilization period.  A business that fails to invest the minimum qualifying capital investment specified by the council by the end of the award period shall be liable for repayment of credits taken, plus interest, to the extent credits taken exceed the total award after it is reduced in proportion to the deficiency by which the applicant fails to meet its minimum qualifying capital investment.  The repayment, if any, shall be calculated and remitted with the credit return for the last year of the award period and no further credits may be earned.  The repayment shall be calculated as follows:

Credits taken minus [qualifying capital investments made ÷

minimum qualifying capital investment] × total award

To the extent the minimum qualifying capital investment is not met by the end of the award period but no repayment is triggered, the total award against which future credits may be earned shall be reduced in proportion to the level of deficiency by which the applicant fails to meet the minimum qualifying capital investment.

(h)  Notwithstanding subsection (e) of this section, the council may authorize credits in excess of net fiscal benefit multiplied by the incentive ratio not to exceed an annual authorization established by law. 

(i)  It is the intention of the general assembly to review the incentive ratio every two years and adjust it as necessary to ensure an appropriate positive fiscal impact to the state.  Legislative adjustments to the incentive ratio shall not apply to maximum awards approved prior to the effective date of any such adjustment.

(j)  By May 1, 2006, and by May 1 each year thereafter, the council and the department of taxes shall file a joint report on the payroll‑based tax incentives authorized by this section with the chairs of the house committee on ways and means, the house committee on commerce, the senate committee on finance, the senate committee on economic development, housing and general affairs, the house and senate committees on appropriations, and the joint fiscal committee of the general assembly and provide notice of the report to the members of those committees.  The joint report shall contain the gross and net value of incentives granted during the preceding year, an account of each incentive granted, from inception of the program to the date of the report, including the date and amount of the award, the expected calendar year or years in which the award will be exercised, whether the award is currently available, the date the award will expire, and the amount and date of all incentives exercised.  The joint report shall also include information on economic activity, benefits to the state, and recipient performance in the fiscal year in which the credit was applied.  The council and department may use measures to protect confidential financial information, such as reporting information in an aggregate form or masking the identity of the tax award recipient.

Sec. 43.  PAYROLL BASED TAX CREDIT; EFFECTIVE DATE

     This section and Sec. 42 shall take effect July 1, 2005.

Pending the question, Shall the House amend the bill as recommended by Reps. DePoy of Rutland City, et al?

Rep. Smith of Morristown raised a Point of Order that Sections 20 through 43 are not germane to the bill, which Point of Order the Speaker ruled well taken.

     Thereupon, Rep. Kilmartin of Newport City appealed the ruling of the Speaker.

Pending the question, Shall the decision of the Speaker stand as the judgment of the House? Rep. Kilmartin of Newport City demanded the Yeas and Nays, which demand was sustained by the Constitutional number.  The Clerk proceeded to call the roll and the question, Shall the decision of the Speaker stand as the judgment of the House?  was decided in the affirmative.  Yeas, 99.  Nays, 39.

Those who voted in the affirmative are:


Allard of St. Albans Town

Ancel of Calais

Aswad of Burlington

Atkins of Winooski

Audette of S. Burlington

Baker of West Rutland

Barnard of Richmond

Bohi of Hartford

Bostic of St. Johnsbury

Botzow of Pownal

Branagan of Georgia

Brooks of Montpelier

Chen of Mendon

Clarkson of Woodstock

Condon of Colchester

Copeland-Hanzas of Bradford

Corcoran of Bennington

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

Donovan of Burlington

Dostis of Waterbury

Dowland of Holland

Dunsmore of Georgia

Edwards of Brattleboro

Emmons of Springfield

Evans of Essex

Fallar of Tinmouth

Fisher of Lincoln

Frank of Underhill

French of Randolph

Gervais of Enosburg

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Howrigan of Fairfield

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Keenan of St. Albans City

Keogh of Burlington

Kiss of Burlington

Kitzmiller of Montpelier

Komline of Dorset

Klein of East Montpelier

Kupersmith of S. Burlington

Larson of Burlington

Leriche of Hardwick

Lippert of Hinesburg

Lorber of Burlington

Louras of Rutland City

Maier of Middlebury

Malcolm of Pawlet

Marek of Newfane

Martin of Springfield

Martin of Wolcott

Masland of Thetford

McCullough of Williston

McLaughlin of Royalton

Milkey of Brattleboro

Miller of Shaftsbury

Miller of Elmore

Minter of Waterbury

Molloy of Arlington

Monti of Barre City

Mook of Bennington

Nease of Johnson

Niquette of Colchester

Nitka of Ludlow

Obuchowski of Rockingham

Orr of Charlotte

Otterman of Topsham

Parent of St. Albans City

Partridge of Windham

Pellett of Chester

Perry of Richford

Peterson of Williston

Pillsbury of Brattleboro

Potter of Clarendon

Pugh of S. Burlington

Randall of Troy

Reese of Pomfret

Rodgers of Glover

Rusten of Halifax

Seibert of Norwich

Severance of Colchester

Shand of Weathersfield

Sharpe of Bristol

Smith of Morristown

Sweaney of Windsor

Tracy of Burlington

Westman of Cambridge

Winters of Swanton

Winters of Williamstown

Zuckerman of Burlington


Those who voted in the negative are:


Allaire of Rutland City

Bartlett of Dover

Canfield of Fair Haven

Clark of St. Johnsbury

Clark of Vergennes

DePoy of Rutland City

Donaghy of Poultney

Donahue of Northfield

Endres of Milton

Errecart of Shelburne

Flory of Pittsford

Helm of Castleton

Houston of Ferrisburgh

Hube of Londonderry

Hudson of Lyndon

Johnson of Canaan

Kennedy of Chelsea

Kilmartin of Newport City

Koch of Barre Town

Krawczyk of Bennington

Larocque of Barnet

Larrabee of Danville

LaVoie of Swanton

Lawrence of Lyndon

Marcotte of Coventry

McAllister of Highgate

McFaun of Barre Town

Metzger of Milton

Morley of Barton

Morrissey of Bennington

Myers of Essex

Peaslee of Guildhall

Schiavone of Shelburne

Shaw of Derby

Smith of New Haven

Sunderland of Rutland Town

Valliere of Barre City

Wright of Burlington


Those members absent with leave of the House and not voting are:


Adams of Hartland

Brennan of Colchester

Grad of Moretown

Kainen of Hartford

Livingston of Manchester

Marron of Stowe

Nuovo of Middlebury

O'Donnell of Vernon

Trombley of Grand Isle

Wood of Brandon

Young of Orwell


 

Pending the recurring question, Shall the bill be amended as recommended by Reps. DePoy of Rutland City, et al in sections 1-19? Rep. DePoy of Rutland City demanded the Yeas and Nays, which demand was sustained by the Constitutional number.  The Clerk proceeded to call the roll and the question, Shall the bill be amended as recommended by Reps. DePoy of Rutland City, et al in sections 1-19?  was decided in the negative.  Yeas, 49.  Nays, 86.

Those who voted in the affirmative are:


Allaire of Rutland City

Baker of West Rutland

Bartlett of Dover

Bostic of St. Johnsbury

Branagan of Georgia

Canfield of Fair Haven

Clark of St. Johnsbury

Clark of Vergennes

DePoy of Rutland City

Donaghy of Poultney

Donahue of Northfield

Dunsmore of Georgia

Endres of Milton

Errecart of Shelburne

Flory of Pittsford

Helm of Castleton

Houston of Ferrisburgh

Hube of Londonderry

Johnson of Canaan

Kainen of Hartford

Kennedy of Chelsea

Kilmartin of Newport City

Koch of Barre Town

Komline of Dorset

Krawczyk of Bennington

Larocque of Barnet

Larrabee of Danville

LaVoie of Swanton

Lawrence of Lyndon

Marcotte of Coventry

Marron of Stowe

McAllister of Highgate

Metzger of Milton

Miller of Elmore

Morley of Barton

Morrissey of Bennington

Myers of Essex

Niquette of Colchester

Parent of St. Albans City

Peaslee of Guildhall

Schiavone of Shelburne

Shaw of Derby

Smith of New Haven

Sunderland of Rutland Town

Valliere of Barre City

Westman of Cambridge

Winters of Swanton

Winters of Williamstown

Wright of Burlington


Those who voted in the negative are:


Ancel of Calais

Aswad of Burlington

Atkins of Winooski

Audette of S. Burlington

Barnard of Richmond

Bohi of Hartford

Botzow of Pownal

Brooks of Montpelier

Chen of Mendon

Clarkson of Woodstock

Condon of Colchester

Copeland-Hanzas of Bradford

Corcoran of Bennington

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

Donovan of Burlington

Dowland of Holland

Edwards of Brattleboro

Emmons of Springfield

Evans of Essex

Fallar of Tinmouth

Fisher of Lincoln

Frank of Underhill

French of Randolph

Gervais of Enosburg

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Howrigan of Fairfield

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Keenan of St. Albans City

Keogh of Burlington

Kiss of Burlington

Kitzmiller of Montpelier

Klein of East Montpelier

Kupersmith of S. Burlington

Larson of Burlington

Leriche of Hardwick

Lippert of Hinesburg

Lorber of Burlington

Maier of Middlebury

Malcolm of Pawlet

Marek of Newfane

Martin of Springfield

Martin of Wolcott

Masland of Thetford

McCullough of Williston

McFaun of Barre Town

McLaughlin of Royalton

Milkey of Brattleboro

Miller of Shaftsbury

Minter of Waterbury

Molloy of Arlington

Monti of Barre City

Mook of Bennington

Nease of Johnson

Nitka of Ludlow

Obuchowski of Rockingham

Orr of Charlotte

Otterman of Topsham

Partridge of Windham

Pellett of Chester

Perry of Richford

Peterson of Williston

Potter of Clarendon

Pugh of S. Burlington

Randall of Troy

Reese of Pomfret

Rodgers of Glover

Rusten of Halifax

Seibert of Norwich

Severance of Colchester

Shand of Weathersfield

Sharpe of Bristol

Smith of Morristown

Sweaney of Windsor

Tracy of Burlington

Zuckerman of Burlington


Those members absent with leave of the House and not voting are:


Adams of Hartland

Allard of St. Albans Town

Brennan of Colchester

Dostis of Waterbury

Grad of Moretown

Hudson of Lyndon

Livingston of Manchester

Louras of Rutland City

Nuovo of Middlebury

O'Donnell of Vernon

Pillsbury of Brattleboro

Trombley of Grand Isle

Wood of Brandon

Young of Orwell


 

     Rep. Wright of Burlington explained his vote as follows:

“Madam Speaker:

     There was very little “conversation” about this proposal in the health care committee.  Why?  Because, I believe there was a determination made to go full speed ahead with a government run plan, paid for with gigantic tax increases.”

Recess

At twelve o’clock and twenty-five minutes in the afternoon, the Speaker declared a recess until the fall of the gavel.

At one o’clock and forty minutes in the afternoon, the Speaker called the House to order.

Consideration Resumed;

Bill Read Third Time and Passed

H. 524

Consideration resumed on House bill, entitled

An act relating to universal access to health care in Vermont;

Pending third reading of the bill, Reps. Koch of Barre Town, Allaire of Rutland City, Bartlett of Dover, Branagan of Georgia, Canfield of Fair Haven, Clark of Vergennes, DePoy of Rutland City, Donahue of Northfield, Dunsmore of Georgia, Endres of Milton, Errecart of Shelburne, Flory of Pittsford, Houston of Ferrisburgh, Hube of Londonderry, Hudson of Lyndon, Kainen of Hartford, Kennedy of Chelsea, Komline of Dorset, Krawczyk of Bennington, Larocque of Barnet, Larrabee of Danville, LaVoie of Swanton, Lawrence of Lyndon, Livingston of Manchester, Marcotte of Coventry, Marron of Stowe, Metzger of Milton, Miller of Elmore, Morrissey of Bennington, Niquette of Colchester, Otterman of Topsham, Parent of St. Albans City, Peaslee of Guildhall, Schiavone of Shelburne, Shaw of Derby, Smith of New Haven, Sunderland of Rutland Town, Valliere of Barre City, Westman of Cambridge, Winters of Swanton, Winters of Williamstown to H. 524

Moved to amend the bill by striking all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.    JOINT HEALTH REFORM COMMITTEE; PUBLIC          ENGAGEMENT PROCESS

(a)  In recognition of the importance of public engagement, the house committee on health care, the senate committee on health and welfare, and a nonvoting member appointed by the governor upon passage of this act shall form a joint health reform committee and shall meet as necessary during the interim of the 2005 legislative session to solicit input from citizens, stakeholders, and interested parties for the purpose of developing and proposing a state‑administered package of health services (“the health plan”) to be financed through broad‑based taxes.

(b)  The committee shall engage in the following process:

(1)  have regional public hearings;

(2)  have regional and statewide meetings with stakeholders, such as citizens, employers, hospitals, health care professionals, and insurers;

(3)  solicit information through a survey that shall be available online as well as on paper;

(4)  arrange for facilitated focus groups; and

(5)  maintain a web site.

(c)(1)  In order to obtain a broad range of information and input, the committee shall collaborate with interested parties, agencies, and organizations, including the agency of human services regional partnerships, the Vermont ethics network, and area health education centers (AHEC) in developing and implementing the public process.

(2)  The joint health reform committee shall consider any recommendations received on or before September 15, 2005 by Coalition 21, the coalition of stakeholder groups established in July 2004 to develop a sustainable plan for transforming Vermont’s health care system concerning the health care services that should be covered under a universal access plan for primary/preventive and hospital care.

(3)  The joint health reform committee shall consider the results of the studies under Secs. 2 and 3 of this act in forming and making its recommendations for health care reform.

(d)  The joint health reform committee shall address topics related to health care reform, including:

(1)  designing a package of health services, including preventive and primary care services to be covered by the health plan by July 1, 2007, hospital services by October 1, 2007, and any other essential health services by July 1, 2009, including consideration of the factors outlined in subsection (e) of this section;

(2)  developing administrative and operational details of the health plan, including any new administrative positions needed, residency requirements, and the treatment of preexisting conditions;

(3)  evaluating the interrelationship of the health plan with Medicaid and any Medicaid waiver programs;

(4)  developing opportunities and making recommendations for reorganizing health care delivery and improving quality;

(5)  developing methods for facilitating a seamless transition to the health plan;

(6)  developing standards and measurements for evaluating the implementation and operation of the health plan;

(7)  determining a method for assessment and evaluation of quality;

(8)  determining the cost of the package of health services appropriate and effective cost containment strategies and any new administration;

(9)  recommending a financing mechanism to fund the reformed health care system;

(10)  recommending whether there should be changes to the procedures for the certificate of need and hospital budget reviews; and

(11)  receiving input from the department of banking, insurance, securities, and health care administration and the agency of human services in order to propose any reorganization of government.

(e)  The joint health reform committee shall ensure that a package of health services will provide a choice of services and health care professionals, contain costs over time, and improve quality of care and health outcomes.  In developing the package of health services, the joint committee shall consider:

(1)  the current range of health services received by Vermonters through public and private benefit packages;

(2)  credible, evidence-based, scientific research and comment by health care professionals, both nationally and internationally, concerning clinical efficacy and risk;

(3)  health care ethics;

(4)  the cost-effectiveness of health services and technology;

(5)  revenues anticipated to be available to finance the package of health services;

(6)  the state health plan and the health resource allocation plan established under section 9405 of Title 18; and

(7)  any Vermont-specific initiatives that would inform the committee.

(f)  With the approval of the speaker of the house and the president pro tempore of the senate, the joint health reform committee may retain the services of one or more consultants or experts to assist in its work.

(g)  The joint committee may meet as needed and shall have such powers as are needed to carry out the purposes of this section.  For attendance at meetings, joint committee members shall be entitled to compensation and expenses as provided in 2 V.S.A. § 406.

(h)  By December 1, 2005, the joint committee shall file a joint report with the general assembly and the governor summarizing its activities and findings and recommending further legislation for health care reform.

Sec. 2.  FISCAL STUDY

The legislative council and the joint fiscal office, in consultation with the department of banking, insurance, securities, and health care administration and the office of Vermont health access, shall oversee the following studies:

(1)(A)  A study of the economic impact of the implementation of a universal access health care plan in Vermont funded primarily by broad-based taxes.  The study shall include the following:

(i)  impacts on existing businesses, including medical businesses, and labor force flexibility, and on the future growth of the economy and the economic competitiveness of Vermont;

(ii)  potential for employment dislocation through changing patterns of service and reductions in system administration;

(iii)  impacts on residents, including possible relocation and demographic change, population groups’ costs of living, and access to care;

(iv)  cost impacts on state and other governmental entities of providing health care coverage through a statewide program;

(v)  specific impacts on the administrative cost by the health care sector (e.g., providers:  hospitals, nursing homes, physicians’ offices, other health care providers, and “payers” insurance companies);

(vi)  impacts on workers’ compensation and other private insurance, including health insurance;

(vii)  implications for health care system fixed and variable costs based on changes in usage due to the universal coverage availability and program design;

(viii)  transitional issues as Vermont moves from the current health care environment to a reformed health system and the package of health services described under Sec. 1 of this act; and

(ix)  impacts of continuing with the current health care system.

(B)  A study of the various financing options and implications for financing the package of health services described under Sec. 1 of this act.  The study shall include the following:

(i)  financing options for consideration, including adjustments to the income tax, a payroll tax, premiums or cost-sharing measures, consumption taxes, and specific more limited taxes to support parts of the health care system financial needs;

(ii)  the tax burdens caused by changing levels of deductibility based on the tax systems contemplated;

(iii)  issues involved with federal law and taxation, including ERISA and other areas of preemption;

(iv)  other revenue sources replaced or tax offsets, including current insurance risk pools, reductions in current and future liabilities, and net costs for public and private entities and individuals due to the new system;

(v)  impacts of tax system change:

(I)  on individuals, households, businesses, public sector entities, and the nonprofit community;

(II)  over time, on changing revenue needs and possible

tax-based decision-making;

(III)  in transition, as the tax system and health care cost structure changes, including methods to avoid double payments during the transition (e.g., premiums and tax obligations).

(2)  The study may be contracted out in all or in part pursuant to the process established in subdivision (5) of this section.  In the case of contracts for services, the legislative council and joint fiscal office may:

(A)  solicit requests for proposals (RFPs) for contracts;

(B)  contract with the University of Vermont;

(C)  contract with one or more actuaries, the state economist, the legislative economist, and a third economist who specializes in health issues to produce a joint product; or

(D)  contract with or solicit, or both, with a combination of any of the above.

(3)  The study description or RFPs shall be developed in draft form and made available to the house committee on health care, the senate committee on health and welfare, the senate committee on finance, and the house committee on ways and means for input.  Draft documents shall also be distributed to those entities indicating interest, including the department of banking, insurance, securities, and health care administration and the office of Vermont health access, and be made available on the legislative web page for public comment.

(4)  The legislative committees designated in subdivision (3) of this section are authorized to meet during the interim of the 2005 session, as necessary to review the study description or RFPs prior to issuance.  The committee members shall also consider how the study process will promote communication and interaction among the various participants to facilitate a coordinated result.  For attendance at meeting, committee members shall be entitled to per diem compensation and expenses as provided in 2 V.S.A. § 406.

(5)  The decisions on the process and selection of service providers shall be done by the legislative council and the joint fiscal office in consultation with the chairs of the committees in subdivision (3) of this section and the chair and vice chair of the joint fiscal committee.  The providers shall present interim reports to the joint health reform committee established in Sec. 1 of this act, the house committee on ways and means, and the senate committee on finance in September and November 2005.

(6)  Final reports shall be issued to the general assembly no later than January 15, 2006.

Sec. 3.  ADMINISTRATIVE STUDIES

(a)  The agency of human services and the department of banking, insurance, securities, and health care administration shall develop recommendations for reorganizing the health care- and health insurance-related functions of these agencies in order to facilitate the integration of the delivery of health care in this state and shall submit those recommendations to the joint health reform committee no later than September 1, 2005.  The preliminary recommendations shall include recommendations relating to personnel, operations, and budgetary requirements.

(b)  The department of banking, insurance, securities, and health care administration shall investigate ways of coordinating or integrating the health plan developed pursuant to Sec. 1 of this act with the current workers’ compensation system and shall make recommendations to the general assembly by January 1, 2006.

* * *Medical Malpractice * * *

Sec. 4.  MEDICAL MALPRACTICE ARBITRATION

(a)  Sec. 50 (effective date) of No. 160 of the Acts of the 1991 Adj. Sess. (1992) is amended to read:

Sec. 50.  EFFECTIVE DATE

Secs. 46, 47, 48, and 49, amending chapter 215 of Title 12 to provide for mandatory arbitration in medical malpractice cases and admission of practice guidelines, shall take effect on the effective date of a universal access health care system enacted by the general assembly on January 1, 2006 and shall apply to cases filed on or after that date.

(b)  Not later than January 1, 2009, the commissioner of the department of health care administration shall review medical malpractice and tort law, and file a report with the general assembly.  The report shall include recommendations for changes to the mandatory arbitration process, if appropriate.  If universal cost‑containment measures affect or place limits on clinical decision‑making, the department shall recommend limitations on the liability of providers who follow practice guidelines, if appropriate.  The commissioner shall seek advice and assistance in developing recommendations under this subsection from an advisory group established under subdivision 9411(3) of Title 18 consisting of representatives of the judicial branch, the health care provider community, the legal community, health insurers, medical malpractice insurers, and health care consumers.  To the fullest extent possible, the recommendations shall be based upon the board’s collection of data specific to Vermont.

Sec. 5.  12 V.S.A. § 1910 is added to read:

§ 1910.  MEDICAL MALPRACTICE ACTIONS; CERTIFICATE OF

              QUALIFIED EXPERT

(a)  In an action based on medical malpractice, the plaintiff shall file a certificate of qualified expert with the complaint.  The plaintiff shall serve a copy of the certificate upon each party to the action.

(b)(1)  A certificate of qualified expert filed under this section shall state:

(A)  The expert’s qualifications, which shall be sufficient to demonstrate a reasonable likelihood that the expert will be permitted to testify about the matter set forth in the complaint if a trial is held.

(B)  The applicable standard of care.

(C)  Facts demonstrating a prima facie departure from the standard of care by the defendant.

(D)  How the departure from the standard of care proximately caused the plaintiff’s injury.

(2)  A separate certificate of qualified expert shall be filed for each defendant.

(c)  This section shall not limit the availability of discovery as to the basis of the certificate, the qualifications of the qualified expert, or any other matter as to which discovery is normally available.

(d)(1)  Except as otherwise provided in this subsection, the court shall dismiss the action without prejudice upon motion by a party if:

(A)  the plaintiff fails to file the certificate of qualified expert required  under the section; or

(B)  the court finds that the certificate of qualified expert fails to meet the standards established under this section.

(2)  The court, upon motion filed at the time the complaint is filed, shall grant an extension of no more than 90 days for filing a certificate of qualified expert if:

(A)  the limitations period applicable to the claim has expired; and

(B)  the plaintiff demonstrates by affidavit that the failure to file the certificate was neither willful nor the result of gross negligence.

(e)(1)  As used in this section:

(A)  “Health care provider” means a medical doctor licensed to practice under chapter 23 of Title 26, an osteopathic physician licensed pursuant to subdivision 1750(9) of Title 26, an advance practice registered nurse licensed pursuant to subdivision 1572(4) of Title 26, or a physician’s assistant certified pursuant to section 1733 of Title 26, acting within the scope of the license under which the health care provider is practicing.

(B)  “Qualified expert” means a health care provider who:

(i)  has had active clinical experience, provided consultation relating to active clinical practice, or taught medicine in the defendant's specialty or a related field of health care within five years of the date of the alleged act or omission giving rise to the action; and

(ii)  is board certified in the same or a related specialty as the defendant, if the defendant is board certified in a specialty.

(2)  Subdivision (1)(B)(ii) of this subsection shall not apply if the defendant provides care or treatment to the plaintiff unrelated to the area in which the defendant is board certified.

(3)  A qualified expert may not devote more than 20 percent of his or her annual professional activities to activities that directly involve testimony in personal injury claims.

(4)  A qualified expert shall not be:

(A)  A party to the action.

(B)  An employee or partner of a party to the action; or

(C)  An employee or stockholder of any professional corporation of which a party to the action is a stockholder.

(f)  This section shall not be construed to expand, limit, or in any way affect the requirements and procedures for expert testimony.

Sec. 6.  12 V.S.A. § 1912 is added to read:

§ 1912.  EXPRESSION OF REGRET OR APOLOGY BY HEALTH CARE                                          PROVIDER INADMISSIBLE

(a)  An expression of regret or apology, or an explanation of how a medical error occurred, made by or on behalf of a health care provider, including an expression of regret, apology, or explanation that is made in writing, orally, or by conduct, does not constitute a legal admission of liability for any purpose and shall be inadmissible in any civil or administrative proceeding against the health care provider, including any arbitration or mediation proceeding.

(b)  In any civil or administrative proceeding against a health care provider, including any arbitration or mediation proceeding, the health care provider, or any other person who makes an expression of regret, apology, or explanation on behalf of the health care provider, including an expression of regret, apology, or explanation that is made in writing, orally, or by conduct, may not be examined by deposition or otherwise with respect to the expression of regret, apology, or explanation.

(c)  As used in this section, “health care provider” shall have the meaning defined in subdivision 1910(e)(1)(A) of this title.

* * * FQHCs *  * *

Sec. 7.  FEDERALLY QUALIFIED HEALTH CENTERS (FQHC)

              LOOK-ALIKES; CAPITALIZATION GRANTS; CASE

              MANAGEMENT

Funds appropriated by Sec. 19 of this act to the department of health shall be expended for the purpose of providing to federally qualified health center (FQHC) look-alike funds for initial capitalization and to establish an

income-sensitized sliding scale fee schedule for patients of these organizations.  In distributing the grants, the department shall consider ensuring the geographic distribution of health centers around the state as well as criteria under federal law.  Initial priority shall be given to health centers in Lamoille, Washington, and Windsor/Windham counties, and other counties that demonstrate readiness to achieve look-alike status.  The goal shall be to ensure there are FQHC look-alikes in each county in Vermont.

* * * Health Care Information Technology * * *

Sec. 8.  18 V.S.A. § 9417 is added to read:

§ 9417.  HEALTH CARE INFORMATION TECHNOLOGY

(a)  The commissioner shall contract with the Vermont program for quality in health care to facilitate the establishment of a health information technology plan for establishing a statewide, integrated electronic health information infrastructure in Vermont by 2010.  The plan shall include standards and protocols designed to promote patient education, patient privacy, physician best practices, electronic connectivity to health care data, and, overall, a more efficient and less costly means of delivering quality health care in Vermont.

(b)  The responsibilities of the Vermont program for quality in health care in establishing a health information technology plan shall include:

(1)  supporting the effective, efficient, statewide use of electronic health information in patient care, health care policymaking, clinical research, health care financing, and continuous quality improvements;

(2)  educating the general public and health care professionals about the value of an electronic health infrastructure for improving patient care;

(3)  promoting the use of national standards for the development of an interoperable system, which shall include provisions relating to security, privacy, data content, structures and format, vocabulary, and transmission protocols;

(4)  making strategic investments in equipment and other infrastructure elements that will facilitate the ongoing development of a statewide infrastructure;

(5)  establishing a method for assessing various stakeholders for ongoing development and maintenance costs of a statewide health information system.

(c)  A health information technology advisory group is created to develop the health information technology plan, including applicable standards, protocols, and pilot programs.  Members of the advisory group shall include the members of the preexisting Vermont information technology leaders advisory group formed by the Vermont association of hospitals and health systems, except for those members who are vendors of information technology.  Vendors of information technology, however, shall be invited to provide input on plan development, as deemed appropriate by the Vermont program for quality in health care.

(d)  The technology advisory group also shall include as a member the commissioner of information and innovation, who shall advise the group on technology best practices and the state’s information technology policies and procedures, including the need for a functionality assessment and feasibility study related to establishing an electronic health information infrastructure under this section. 

(e)  On or before January 1, 2006, the Vermont program for quality in health care shall initiate a pilot program involving at least two hospitals using existing sources of electronic health information to establish electronic data sharing for clinical decision support, pursuant to priorities and criteria established in conjunction with the health information technology advisory group.  Objectives of the pilot program may include:

(1)  supporting patient care and improving quality of care;

(2)  enhancing productivity of health care professionals and reducing administrative costs of health care delivery and financing;

(3)  implementing strategies for future developments in health care technology, policy, management, governance, and finance; and

(4)  ensuring patient data confidentiality at all times. 

(f)  The standards and protocols developed by the Vermont program for quality in health care shall be no less stringent than the “Standards for Privacy of Individually Identifiable Health Information” established under the Health Insurance Portability and Accountability Act of 1996 and contained in 45 C.F.R., Parts 160 and 164, and any subsequent amendments.  In addition, the standards and protocols shall ensure that there are clear prohibitions against the out-of-state release of individually identifiable health information for purposes unrelated to treatment, payment, and health care operations, and that such information shall under no circumstances be used for marketing purposes.  The standards and protocols shall require that access to individually identifiable health information is secure and traceable by an electronic audit trail.

(g)  On or before January 1, 2007, the Vermont program for quality in health care shall submit to the commissioner, the commissioner of information and innovation, and the general assembly a health information technology plan for establishing a statewide, integrated electronic health information infrastructure in Vermont, including specific steps for achieving the goals, objectives, and time frames of this section.  The plan shall include also recommendations for self-sustainable funding for the ongoing development, maintenance, and replacement of the health information technology system.  Upon approval by the general assembly, the plan shall serve as the framework within which certificate of need applications for information technology are reviewed under section 9440b of this title by the commissioner.

(h)  Beginning January 1, 2006, and annually thereafter, the Vermont program for quality in health care shall file a report with the commissioner, the commissioner of information and innovation, and the general assembly.  The report shall include an assessment of progress in implementing the provisions of this section, recommendations for additional funding and legislation required,, and an analysis of the costs, benefits, and effectiveness of the pilot program authorized under subsection (e) of this section.

(i)  The Vermont program for quality in health care is authorized to seek matching funds to assist with carrying out the purposes of this section.  In addition, it may accept any and all donations, gifts, and grants of money, equipment, supplies, materials, and services from the federal or any local government, or any agency thereof, and from any person, firm, or corporation for any of its purposes and functions under this section and may receive and use the same subject to the terms, conditions, and regulations governing such donations, gifts, and grants.

(j)  The commissioner, in consultation with the Vermont program for quality in health care and the health information technology advisory group, may seek any waivers of federal law, rule, or regulation that might assist with implementation of this section.

Sec. 9.  18 V.S.A. § 9437(4) and (5) are amended and (6) is added to read:

(4)  in the case of a proposal for the addition of beds for the provision of skilled nursing or intermediate care, the number of beds to be approved is not inconsistent with the considerations identified under subsection 9439(e) of this title; and

(5)  The the proposed new health care project is consistent with the certificate of need guidelines published by the department in accordance with its rules, and is within the portion of the unified health care budget applicable to the proposed health care facility;

(6)  if the application is for the purchase or lease of new health care information technology, it conforms with the health information technology plan established under section 9417 of this title, upon approval of the plan by the general assembly.

Sec. 10.  18 V.S.A. § 9440b is added to read:

§ 9440b.  INFORMATION TECHNOLOGY; REVIEW PROCEDURES

Notwithstanding the procedures in section 9440 of this title, upon approval by the general assembly of the health information technology plan developed under section 9417 of this title, the commissioner shall establish by rule standards and expedited procedures for reviewing applications for the purchase or lease of health care information technology that otherwise would be subject to review under this subchapter.  Such applications may not be granted or approved unless they are consistent with the health information technology plan.  The commissioner’s rules shall include a provision requiring applications be reviewed by the health information advisory group established under subsection 9417(c) of this title.  The advisory group shall make written findings and a recommendation to the commissioner in favor of or against each application.

* * * Healthy Lifestyles Insurance Discount * * *

Sec. 11.  8 V.S.A. § 4080a(h) is amended to read:

(h)(1)  A registered small group carrier shall use a community rating method acceptable to the commissioner for determining premiums for small group plans.  Except as provided in subdivision (2) of this subsection, the following risk classification factors are prohibited from use in rating small groups, employees, or members of such groups, and dependents of such employees or members:

(A)  demographic rating, including age and gender rating;

(B)  geographic area rating;

(C)  industry rating;

(D)  medical underwriting and screening;

(E)  experience rating;

(F)  tier rating; or

(G)  durational rating.

(2)(A)  The commissioner shall, by rule, adopt standards and a process for permitting registered small group carriers to use one or more risk classifications in their community rating method, provided that the premium charged shall not deviate above or below the community rate filed by the carrier by more than 20 percent (20%), and provided further that the commissioner’s rules may not permit any medical underwriting and screening.

(B)  The commissioner’s rules shall permit a carrier, including a hospital or medical service corporation, to establish premium discounts or rebates or otherwise modify applicable co-payments or deductibles in return for adherence to programs of health promotion and disease prevention, in accordance with federal regulations relating to bona fide wellness programs.  Under the federal regulations, permissible bona fide wellness programs shall:

(i)  limit any discount, rebate, or waiver of cost-sharing to no more than 20 percent of the cost of employee-only coverage;

(ii)  be designed reasonably to promote good health or prevent disease for individuals in the program, and not be used as a subterfuge for imposing higher costs on an individual based on a health factor; and

(iii)  provide that the reward under the program is available to all similarly situated individuals.

(C)  The commissioner, in consultation with the commissioner of health, shall adopt by rule:

(i)  standards for approved health promotion and disease prevention programs, based on the best scientific, evidence-based medical practices; and

(ii)  standards and procedures for evaluating an individual’s adherence to programs of health promotion and disease prevention.

(3)  The commissioner may exempt from the requirements of this section an association as defined in section subdivision 4079(2) of this title which:

(A)  offers a small group plan to a member small employer which is community rated in accordance with the provisions of subdivisions (1) and (2) of this subsection.  The plan may include risk classifications in accordance with subdivision (2) of this subsection;

(B)  offers a small group plan that guarantees acceptance of all persons within the association and their dependents; and

(C)  offers one or more of the common health care plans approved by the commissioner under subsection (e) of this section.

(4)  The commissioner may revoke or deny the exemption set forth in subdivision (3) of this subsection if the commissioner determines that:

(A)  because of the nature, size or other characteristics of the association and its members, the employees or members are in need of the protections provided by this section; or

(B)  the association exemption has or would have a substantial adverse effect on the small group market.

Sec. 12.  8 V.S.A. § 4080b(h) is amended to read:

(h)(1)  A registered nongroup carrier shall use a community rating method acceptable to the commissioner for determining premiums for nongroup plans.  Except as provided in subdivision (2) of this subsection, the following risk classification factors are prohibited from use in rating individuals and their dependents:

(A)  demographic rating, including age and gender rating;

(B)  geographic area rating;

(C)  industry rating;

(D)  medical underwriting and screening;

(E)  experience rating;

(F)  tier rating; or

(G)  durational rating.

(2)(A)  The commissioner shall, by rule, adopt standards and a process for permitting registered nongroup carriers to use one or more risk classifications in their community rating method.  After July 1, 1993, provided that the premium charged shall not deviate above or below the community rate filed by the carrier by more than 40 percent (40%) for two years, and thereafter 20 percent (20%).  Such rules may not permit, and provided further that the commissioner’s rules may not permit any medical underwriting and screening and shall give due consideration to the need for affordability and accessibility of health insurance.

(B)  The commissioner’s rules shall permit a carrier, including a hospital or medical service corporation, to establish premium discounts or rebates or otherwise modify applicable co-payments or deductibles in return for adherence to programs of health promotion and disease prevention, in accordance with federal regulations relating to bona fide wellness programs.  Under the federal regulations, permissible bona fide wellness programs shall:

(i)  limit any discount, rebate, or waiver of cost-sharing to no more than 20 percent of the cost of employee-only coverage;

(ii)  be designed reasonably to promote good health or prevent disease for individuals in the program, and not be used as a subterfuge for imposing higher costs on an individual based on a health factor; and

(iii)  provide that the reward under the program is available to all similarly situated individuals.

(C)  The commissioner, in consultation with the commissioner of health, shall adopt by rule:

(i)  standards for approved health promotion and disease prevention programs, based on the best scientific, evidence-based medical practices; and

(ii)  standards and procedures for evaluating an individual’s adherence to programs of health promotion and disease prevention.

Sec. 13.  8 V.S.A. § 4516 is amended to read:

§ 4516.  ANNUAL REPORT TO COMMISSIONER

Annually, on or before the fifteenth day of March, a hospital service corporation shall file with the commissioner of banking, insurance, securities, and health care administration a statement sworn to by the president and treasurer of the corporation showing its condition on the thirty-first day of December.  The statement shall be in such form and contain such matters as the commissioner shall prescribe.  To qualify for the tax exemption set forth in section 4518 of this title, the statement shall include a certification that the hospital service corporation operates on a nonprofit basis for the purpose of providing an adequate hospital service plan to individuals of the state, both groups and nongroups, without discrimination based on age, gender, geographic area, industry, and medical history except as allowed by subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.

Sec. 14.  8 V.S.A. § 4588 is amended to read:

§ 4588.  ANNUAL REPORT TO COMMISSIONER

Annually, on or before March 15, a medical service corporation shall file with the commissioner of banking, insurance, securities, and health care administration a statement sworn to by the president and treasurer of the corporation showing its condition on December 31, which shall be in such form and contain such matters as the commissioner shall prescribe.  To qualify for the tax exemption set forth in section 4590 of this title, the statement shall include a certification that the medical service corporation operates on a nonprofit basis for the purpose of providing an adequate medical service plan to individuals of the state, both groups and nongroups, without discrimination based on age, gender, geographic area, industry, and medical history except as allowed by subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.

* * * DRUG UTILIZATION REVIEW BOARD * * *

Sec. 15.  1 V.S.A. § 313(a) is amended to read:

(a)  No public body described in section 312 of this title may hold an executive session from which the public is excluded, except by the affirmative vote of two-thirds of its members present in the case of any public body of state government or of a majority of its members present in the case of any public body of a municipality or other political subdivision.  A motion to go into executive session shall indicate the nature of the business of the executive session, and no other matter may be considered in the executive session.  Such vote shall be taken in the course of an open meeting and the result of the vote recorded in the minutes.  No formal or binding action shall be taken in executive session except actions relating to the securing of real estate options under subdivision (2) of this subsection.  Minutes of an executive session need not be taken, but if they are, shall not be made public subject to section subsection 312(b) of this title.  A public body may not hold an executive session except to consider one or more of the following:

* * *

(9)  Information relating to a pharmaceutical rebate or to supplemental rebate agreements, other than information protected from disclosure by federal law, by the terms and conditions required by the federal Centers for Medicare and Medicaid Services as a condition of rebate authorization under the Medicaid program.

Sec. 16.  33 V.S.A. § 1998(f)(2) is amended to read:

(2)  The board shall meet at least quarterly.  The board shall comply with the requirements of subchapter 2 of chapter 5 of Title 1 (open meetings) and subchapter 3 of chapter 5 of Title 1 (open records), except that the board may go into executive session as provided for in subdivision 313(a)(9) of Title 1 in order to comply with subsection 2002(c) of this title.

* * * Medicare Premium Assistance * * *

Sec. 17.  33 V.S.A. chapter 19, subchapter 5 is added to read:

Subchapter 5.  Premium Assistance Program

§ 2030.  MEDICARE PREMIUM ASSISTANCE PROGRAM

(a)  The office of Vermont health access shall establish a premium assistance program by rule under chapter 25 of Title 3 to assist eligible individuals who are unable to afford Medicare supplemental insurance under section 4062b of Title 8 or Medicare part B premiums.

(b)  The program shall provide a fixed grant of $20.00 per month to eligible individuals who apply until such time as the funds appropriated to support the program are exhausted. This program is not an entitlement.

(c)  An “eligible individual” means an individual enrolled in or applying for Medicare who is not eligible for Medicaid under 42 U.S.C. § 1396a, is under 300 percent of the federal poverty guidelines, and does not have health insurance coverage through a group or association.

Sec. 18.   MEDICARE PART D ELIGIBILITY

(a)  The Office of Vermont Health Access shall take steps necessary to eliminate the asset test from the requirements for eligibility for the Qualified Medicare Beneficiary, Specified Low Income Medicare Beneficiary and Qualified Individuals Medicare Savings programs of Medicare  provided that it finds that it will be at a minimum cost neutral to the state in that the costs of the resulting increased Medicaid participation would not exceed the benefits from greater participation in the low income subsidy program as it relates to the Medicare Part D program.

(b)  If, on or before July 1, 2005, the asset test for eligibility under subsection (a) is eliminated:

(1)  Sec. 17 of this act establishing a Medicare Premium Assistance Program shall not take effect; and

(2) the amount of $250,000.00 of the appropriation for the Medicare premium assistance program under Sec. 19(b) of this act is rescinded.

(3)  the amount of $250,000.00 of the appropriation for the Medicare premium assistance program under Sec. 19(b) of this act is redirected, on a one-time basis, to the Office of Vermont Health Access for the purpose of  providing  information to the public on the low income subsidies for the Medicare prescription drug program and provisions of the Medicaid Modernization Act of 2005.

Sec. 19.  APPROPRIATION

     (a)  Fiscal year 2005.  There is appropriated in fiscal year 2005 the following amounts:

(1)  $425,000.00 from the general fund to the legislature for the following purposes:

               (A)  $125,000.00 for the fiscal study authorized by Sec. 2 of this act.

               (B)  $100,000.00 for actuarial services for the purposes of supporting the studies required by Sec. 2 and other provisions of this act.

               (C)  $50,000.00 for interim committee meetings of the joint health care reform committee established by Sec. 1 of this act.

               (D)  $150,000.00 to support the public engagement process of Sec. 1 of this act.

(2)  $200,000.00 from the general fund to the Department of Health for the purpose of providing to federally qualified health center (FQHC)

look-alike funds under Sec. 7 of this act.

          (3)  $200,000.00 from the general fund to the Department of Banking, Insurance, Securities, and Health Care Administration for the purpose of a health information technology plan under Sec. 8 of this act.

(b)  Fiscal year 2005 designated balance (waterfall).

Sec. 263(a) of H.516 of 2005 is amended by inserting two new subdivisions after subdivision (7) to read as follows:

(8)  Eighth, $200,000.00 shall be appropriated to the department of health for use as an additional appropriation to fund free clinics.

(9)  Ninth, $500,000.00 shall be appropriated to the office of Vermont health access or its successor in interest to fund the Medicare premium assistance program established under 33 V.S.A. § 2030 and Sec. 17 of this act.

and by renumbering the remaining subdivisions to be numerically correct

Sec. 20.  EFFECTIVE DATE

This act shall be effective upon passage.

Pending the question, Shall the House amend the bill as recommended by Reps. Koch of Barre Town, et al? Rep. Nease of Johnson demanded the Yeas and Nays, which demand was sustained by the Constitutional number.  The Clerk proceeded to call the roll and the question, Shall the House amend the bill as recommended by Reps. Koch of Barre Town, et al? was decided in the negative.  Yeas, 57.   Nays, 86.

Those who voted in the affirmative are:


Allaire of Rutland City

Baker of West Rutland

Barnard of Richmond

Bartlett of Dover

Bostic of St. Johnsbury

Branagan of Georgia

Canfield of Fair Haven

Clark of St. Johnsbury

Clark of Vergennes

DePoy of Rutland City

Donaghy of Poultney

Donahue of Northfield

Dowland of Holland

Dunsmore of Georgia

Endres of Milton

Errecart of Shelburne

Evans of Essex

Flory of Pittsford

Helm of Castleton

Houston of Ferrisburgh

Hube of Londonderry

Hudson of Lyndon

Johnson of Canaan

Kainen of Hartford

Kennedy of Chelsea

Kilmartin of Newport City

Koch of Barre Town

Komline of Dorset

Krawczyk of Bennington

Larocque of Barnet

Larrabee of Danville

LaVoie of Swanton

Lawrence of Lyndon

Louras of Rutland City

Marcotte of Coventry

Marron of Stowe

McAllister of Highgate

McFaun of Barre Town

Metzger of Milton

Miller of Elmore

Morley of Barton

Morrissey of Bennington

Myers of Essex

Niquette of Colchester

Parent of St. Albans City

Peaslee of Guildhall

Schiavone of Shelburne

Severance of Colchester

Shaw of Derby

Smith of New Haven

Sunderland of Rutland Town

Valliere of Barre City

Westman of Cambridge

Winters of Swanton

Winters of Williamstown

Wright of Burlington

Young of Orwell


Those who voted in the negative are:


Allard of St. Albans Town

Ancel of Calais

Aswad of Burlington

Atkins of Winooski

Audette of S. Burlington

Bohi of Hartford

Botzow of Pownal

Brooks of Montpelier

Chen of Mendon

Clarkson of Woodstock

Condon of Colchester

Copeland-Hanzas of Bradford

Corcoran of Bennington

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

Donovan of Burlington

Dostis of Waterbury

Edwards of Brattleboro

Emmons of Springfield

Fallar of Tinmouth

Fisher of Lincoln

Frank of Underhill

French of Randolph

Gervais of Enosburg

Grad of Moretown

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Howrigan of Fairfield

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Keenan of St. Albans City

Keogh of Burlington

Kiss of Burlington

Kitzmiller of Montpelier

Klein of East Montpelier

Kupersmith of S. Burlington

Larson of Burlington

Leriche of Hardwick

Lippert of Hinesburg

Lorber of Burlington

Maier of Middlebury

Malcolm of Pawlet

Marek of Newfane

Martin of Springfield

Martin of Wolcott

McCullough of Williston

McLaughlin of Royalton

Milkey of Brattleboro

Miller of Shaftsbury

Minter of Waterbury

Molloy of Arlington

Monti of Barre City

Mook of Bennington

Nease of Johnson

Nitka of Ludlow

Nuovo of Middlebury

Obuchowski of Rockingham

Orr of Charlotte

Otterman of Topsham

Partridge of Windham

Pellett of Chester

Perry of Richford

Peterson of Williston

Pillsbury of Brattleboro

Potter of Clarendon

Pugh of S. Burlington

Randall of Troy

Reese of Pomfret

Rodgers of Glover

Rusten of Halifax

Seibert of Norwich

Shand of Weathersfield

Sharpe of Bristol

Smith of Morristown

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Zuckerman of Burlington


Those members absent with leave of the House and not voting are:


Adams of Hartland

Brennan of Colchester

Livingston of Manchester

Masland of Thetford

O'Donnell of Vernon

Wood of Brandon


 

     Rep. Clark of Vergennes explained his vote as follows:

“Madam Speaker:

     The Vermont citizens spirit of cooperation ever before now, present in this House of the people of Vermont has dissipated and it may take a sorcerer to reassemble its parts.  No compromise on this bill means we aren’t capable of finding common ground and those who pay us and trust us to compromise have lost out once again.”

     Rep. Kennedy of Chelsea explained her vote as follows:

“Madam Speaker:

     This amendment was a perfect opportunity for all parties to come together and move H. 524 ahead in a bi-partisan manner.  Again, a golden opportunity lost.”

     Pending third reading of the bill, Rep. Kainen of Hartford moved to amend the bill as follows:

     By striking all after the enacting clause and by inserting in lieu thereof  the following:

Sec. 1.  FINDINGS

     (a)  The General Assembly finds that:

          (1) There are over 60,000 Vermonters who have no health insurance.

          (2) Vermont as a state has the second lowest rate of uninsured as a proportion of the population.

          (3) The unavailability of primary care may cause conditions to become more acute; the individuals may use emergency room services which is not a timely or effective means of treatment.

          (4) The costs of health services provided to individuals who are unable to pay are shifted onto others.  Those who bear the burden of this cost shift have an increasingly difficult time affording their own health care costs including premiums.

          (5) Most people who have health insurance are satisfied with their coverage.

          (6) Universal health care is the goal of the General Assembly.

Sec. 2.  DEFINITIONS

(1)  “Health care professional” means an individual licensed, registered, or certified in the state of Vermont to provide health services.

(2)  “Health service” means any medically necessary treatment or procedure to maintain, diagnose, or treat an individual’s physical or mental condition, including services provided pursuant to a physician’s order and services to assist in activities of daily living.

(3)  “Primary care” means health services provided by health care professionals specifically trained for and skilled in first-contact and continuing care for individuals with signs, symptoms, or health concerns.  Primary care services include health promotion, preventive care, health maintenance, and the diagnosis and treatment of acute and chronic illnesses.

          (4)  “Vermont resident” means an individual, and any dependent of that individual, who maintains a permanent place of abode within this state for more than an aggregate of 183 days over the previous 12 months.  Relevant factors to determine whether an individual maintains a permanent place of abode within this state include the following:  the individual’s residence for tax purposes; formal and informal statements of the individual; where the individual spends time; the individual’s place of employment and business connections; the location of items of significant value (either monetary or sentimental) to the individual; place of issuance of automobile registration and driver’s license; and previous permanent residency of the individual.

Sec. 3.  FEDERALLY QUALIFIED HEALTH CENTERS (FQHC)

             LOOK-ALIKES; CAPITALIZATION GRANTS; CASE

             MANAGEMENT

Funds appropriated by section 7 of this act to the department of health shall be expended for the purpose of providing to federally qualified health center (FQHC) look-alikes funds for initial capitalization and to establish an

income-sensitized sliding scale fee schedule for patients of these organizations.  In distributing the grants, the department shall consider ensuring the geographic distribution of health centers around the state as well as criteria under federal law.  Initial priority shall be given to health centers in Lamoille,  Washington, and Windsor/Windham counties, but the goal shall be to ensure there are FQHC look-alikes in each county of Vermont.

Sec. 4.  GREEN MOUNTAIN HEALTH CLINICS

     (a) In addition to fully utilizing Federally Qualified Health Clinics (FQHCs) and rural health clinics, there shall be established 12 clinics in areas which do not meet the federal government’s criteria for being medically underserved areas.  These clinics shall provide primary and preventive care for those who do not qualify for service at an FQHC or rural health clinic, or those who live more than 25 miles from such clinic.  Such clinics shall be designated “Green Mountain Health Clinics”

     (b) Eligibility. The Green Mountain Health Clinics shall serve Vermont residents who’s family income is at or below 80% of the median income in the state.

Sec. 5.    DEVELOPMENT OF FURTHER CRITERIA; PACKAGE OF                                           SERVICES AND BUDGET  

     (a)  There is created a joint health reform committee comprised of the House Health Care Committee and the Senate Committee on Health and Welfare.  The committee shall meet during the interim following the 2005 session of the general assembly, and for attendance at meetings members shall be entitled to compensation for services and reimbursement of expenses as set out in 2  V.S.A. §406.

     (b)  The joint committee shall determine the package of health care services to be provided by Green Mountain Health Clinics, and the financing package.  The joint committee shall:

          (1) Determine whether it would be cost effective to require all those on VHAP to utilize services of the clinic if they live in the clinic’s catchment area.

          (2) Determine the appropriate co-pays on a sliding scale basis.

          (3) Considering offering tuition reimbursement at the University of Vermont medical school to those willing to serve in a Green Mountain Health clinic for a period of four years.

          (4) Determine the maximum cost efficient ratio of physicians, physicians’ assistants, and nurse practitioners.

          (5) Consider the possibility of extending sovereign immunity to the Green Mountain Health Clinics and making a claim for negligence against the clinic or doctor a claim against the state.

          (6) Consider establishing a compensation mechanism similar to workers’ compensation for negligence claims by patients.

          (7) Consider whether the state should run the clinics or contract with the private sector for that purpose.

          (8) Consider whether it is feasible to provide pharmaceuticals prescribed at the clinics.

          (9) Explore a funding mechanism to include the following individually or a combination thereof:

               (A) A payroll tax split between employers and employees for those employers who do not provide health insurance (pay or play).

               (B) Examine whether there should be:

(i) An exemption from the payroll tax. for employers who do not provide health insurance to minors who are covered under a parent’s  health insurance plan.

(ii) An exemption from the payroll tax for employers who do not provide health insurance coverage for an employee covered under a spouse’s health insurance plan.

               (C) Provide a contribution from the general fund of the state.

          (10) Consider whether a person  must submit a financial affidavit and receive a Green Mountain Health Care clinic card, or whether a person would be sent to their regional clinic.

          (11)  Examine any other issue necessary for implementation.

     (c)  On or before February 1, 2006 the joint committee in conjunction with the department of health shall submit an implementation proposal for Green Mountain Health clinics to the legislature.

Sec. 6.   Sec. 17.  33 V.S.A. chapter 19, subchapter 5 is added to read:

Subchapter 5.  PREMIUM ASSISTANCE PROGRAM

§ 2030.  MEDICARE PREMIUM ASSISTANCE PROGRAM

(a)  The office of Vermont health access shall establish a premium assistance program by rule under chapter 25 of Title 3 to assist eligible individuals who are unable to afford Medicare supplemental insurance under section 4062b of Title 8 or Medicare part B premiums.

(b)  The program shall provide a fixed grant of $20.00 per month to eligible individuals who apply until such time as the funds appropriated to support the program are exhausted. This program is not an entitlement.

(c)  An “eligible individual” means an individual enrolled in or applying for Medicare who is not eligible for Medicaid under 42 U.S.C. § 1396a, is under 300 percent of the federal poverty guidelines, and does not have health insurance coverage through a group or association.

Sec. 7.  APPROPRIATIONS

     (a)  The amount of $50,000 is appropriated from the general fund in fiscal year 2005 to the legislature to fund the interim activities of the joint interim committee on health care.

     (b)  The amount of $200,000 shall be appropriated from the general fund in fiscal year 2005 to the department of health for the purpose of  providing funding to federally qualified health centers (FQHCs) look-alikes.

     (c)  The amount of $200,000.00 shall be appropriated from the general fund in fiscal year 2005 to the department of health for use as an additional appropriation to fund the Green Mountain Health Clinics.

(d)  The amount of $500,000.00 shall be appropriated from the general fund in fiscal year 2005 to the office of Vermont health access to fund the Medicare premium assistance program established under 33 V.S.A. § 2030 and Sec. 6 of this act.

     Which was disagreed to.

     Rep. Kitzmiller of Montpelier in Chair.

     Thereupon, the bill was read the third time.

     Speaker Symington back in Chair.

Pending the question, Shall the bill pass? Rep. Partridge of Windham demanded the Yeas and Nays, which demand was sustained by the Constitutional number.  The Clerk proceeded to call the roll and the question, Shall the bill pass? was decided in the affirmative.  Yeas, 86.  Nays, 58.

Those who voted in the affirmative are:


Ancel of Calais

Aswad of Burlington

Atkins of Winooski

Audette of S. Burlington

Barnard of Richmond

Bohi of Hartford

Botzow of Pownal

Brooks of Montpelier

Chen of Mendon

Clarkson of Woodstock

Condon of Colchester

Copeland-Hanzas of Bradford

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

Donovan of Burlington

Dostis of Waterbury

Dowland of Holland

Edwards of Brattleboro

Emmons of Springfield

Evans of Essex

Fallar of Tinmouth

Fisher of Lincoln

Frank of Underhill

French of Randolph

Gervais of Enosburg

Grad of Moretown

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Howrigan of Fairfield

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Keenan of St. Albans City

Keogh of Burlington

Kiss of Burlington

Kitzmiller of Montpelier

Klein of East Montpelier

Kupersmith of S. Burlington

Larson of Burlington

Leriche of Hardwick

Lippert of Hinesburg

Lorber of Burlington

Maier of Middlebury

Malcolm of Pawlet

Marek of Newfane

Martin of Springfield

Martin of Wolcott

Masland of Thetford

McCullough of Williston

McFaun of Barre Town

McLaughlin of Royalton

Milkey of Brattleboro

Miller of Shaftsbury

Minter of Waterbury

Monti of Barre City

Nease of Johnson

Nitka of Ludlow

Nuovo of Middlebury

Obuchowski of Rockingham

Orr of Charlotte

Partridge of Windham

Pellett of Chester

Perry of Richford

Pillsbury of Brattleboro

Potter of Clarendon

Pugh of S. Burlington

Randall of Troy

Reese of Pomfret

Rodgers of Glover

Rusten of Halifax

Seibert of Norwich

Severance of Colchester

Shand of Weathersfield

Sharpe of Bristol

Smith of Morristown

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Zuckerman of Burlington


Those who voted in the negative are:


Allaire of Rutland City

Allard of St. Albans Town

Baker of West Rutland

Bartlett of Dover

Bostic of St. Johnsbury

Branagan of Georgia

Canfield of Fair Haven

Clark of St. Johnsbury

Clark of Vergennes

Corcoran of Bennington

DePoy of Rutland City

Donaghy of Poultney

Donahue of Northfield

Dunsmore of Georgia

Endres of Milton

Errecart of Shelburne

Flory of Pittsford

Helm of Castleton

Houston of Ferrisburgh

Hube of Londonderry

Hudson of Lyndon

Johnson of Canaan

Kainen of Hartford

Kennedy of Chelsea

Kilmartin of Newport City

Koch of Barre Town

Komline of Dorset

Krawczyk of Bennington

Larocque of Barnet

Larrabee of Danville

LaVoie of Swanton

Lawrence of Lyndon

Louras of Rutland City

Marcotte of Coventry

Marron of Stowe

McAllister of Highgate

Metzger of Milton

Miller of Elmore

Molloy of Arlington

Mook of Bennington

Morley of Barton

Morrissey of Bennington

Myers of Essex

Niquette of Colchester

Otterman of Topsham

Parent of St. Albans City

Peaslee of Guildhall

Peterson of Williston

Schiavone of Shelburne

Shaw of Derby

Smith of New Haven

Sunderland of Rutland Town

Valliere of Barre City

Westman of Cambridge

Winters of Swanton

Winters of Williamstown

Wright of Burlington

Young of Orwell


Those members absent with leave of the House and not voting are:


Adams of Hartland

Brennan of Colchester

Livingston of Manchester

O'Donnell of Vernon

Wood of Brandon


 

     Rep. Clarkson of Woodstock explained her vote as follows:

“Madam Speaker:

     I vote yes to H. 524 as it not only sets the stage to move forward on containing the escalating costs of health care and providing universal coverage for all Vermonters, but because at its core it supports our Vermont Constitution’s notion of the common benefit.”

     Rep. Donahue of Northfield explained her vote as follows:

“Madam Speaker:

     Because we share so many fundamental principles, and agree on the importance of addressing the problem, it is a sad day when politics dictate that this body chooses to make no rational progress at all.  It is never rational to commit in advance to a plan before an acknowledged need for critical additional information is realized.  I will not vote for an irrational plan.”

     Rep. Endres of Milton explained his vote as follows:

“Madam Speaker:

     This bill represents fundamental change throughout the state.  It completely overturns our current system in the worthwhile effort to provide coverage to the ten percent of Vermonters who do not have health insurance.  I voted no because there are too many unanswered questions.  We cannot set up a new state agency and commit taxpayer dollars until these questions are answered.  I agree that we should have the discussion and make some needed changes, but I cannot support irresponsible legislation like H. 524.”

     Rep. Haas of Rochester explained his vote as follows:

“Madam Speaker:

     I vote in favor of this bill because it presents a blueprint for going forward to provide fair and equitable access to universal health care for all citizens of this state.  I agree with the vision of this bill that the formerly separate issues of cost shifting, cost containment, quality care, preventative care and equal access will best be solved by crafting an integrated health care system.”

     Rep. Jerman of Essex  explained his vote as follows:

“Madam Speaker:

     This body has a rich history of courageous decisions which have led to positive changes in people’s lives.

     The status quo in health care cannot be sustained. I vote yes on H. 524 because it commit us to a process, with many stops more along the way, to begin to bend the curve of cost increases which threaten to wreck our economy.

     As seen in the past two days, it’s a brutally tough journey, but we will make it together as Vermonters always do in the end.”

     Rep. Keenan of St. Albans City explained her vote as follows:

“Madam Speaker:

     I voted yes on 524 in hopes the committee will take the time to work with Vermonters to identify what is working and what is not working in our current system.  I hope they will explore ways to improve upon the already successful, cost saving aspects of our present high quality system provided to Vermonters in a variety of settings.”        

     Rep. Marcotte of Coventry explained his vote as follows:

“Madame Speaker,

As a freshman legislator, I have chosen this first year to observe, listen, and learn, to ask questions and do what I believe is right both in committee and on the floor for my constituents and all Vermonters. I came here well aware of party politics. But I am deeply saddened by what appears to me as a growing atmosphere of an unwillingness to compromise and an unwillingness to work together. As we all know, if this bill passes, the Governor has indicated that he will use his veto power and it is likely his veto will be sustained in this chamber. We then are back to step one-another year has gone by and Vermonters are again left to struggle with the rising cost of health care because of partisan politics. Stop turning the citizens of Vermont into political pawns using health care as the chess game and creating an issue for the 06 election because the stakes in this game are too high and the losers are the very Vermonters which all of us were elected to represent.”

     Rep. Partridge of Windham explained her vote as follows:

“Madam Speaker:

     I cast my vote today for the couple in Rockingham I visited with during the last campaign.  Both with full time jobs, both with chronic illness, and paying $1,000 per month our of their pockets for health insurance.   At that time they told me that they did not think they could afford their health insurance and keep their house.  Two weeks late there was a “for sale” sign on their lawn.  This is wrong.  This is not the Vermont way.  It is time to get control of health care costs and help hardworking Vermonters maintain their quality of life.”

     Rep. Severance of Colchester explained his vote as follows:

“Madam Speaker:

     I voted for the bill because I believe there needs to be a forum for continued discussion and analysis of how Vermonters can have quality health care at an affordable price.  Everyone seems to agree the present system of care is fragmented, inefficient, and costly by any measure with modest outcomes at best.  The crisis in health care is the cost of care the persistent increase making it increasingly unaffordable.  We need to initially concentrate on the cost of care and only secondarily on how to pay for it.  The bill addresses the cost of care but it does much more.  I have considerable reservations about including in this bill a restructuring of state government to plan, coordinate and direct health care for all Vermonters.  In my judgment, that belongs in the bill scheduled for next January, following the studies and the work of the Health Care Committee scheduled for the summer and fall.  Moreover, I believe there is a huge educational challenge as we move forward.  Vermonters need to understand that in health care, as in everything else, there are tradeoffs.  If we are to control the increases in the cost of health care, we cannot provide all the health care that everybody wants whenever they want it.  We can provide what everybody needs.  Also, no proposed program can be successful until all parties are ready to buy into the program – whatever it is.  Major changes do not occur in a few short weeks or a few months.  They can’t hurried, but they must be pursued.  In a sense, this bill is trying to do too much too soon, yet we must address the issues without delay.  Do I believe the process should go forward?  Absolutely.  We need to do the studies.  We need to engage Vermonters of every persuasion.  We need to build consensus and support.  We need to develop the system that will work for all Vermonters.  The bill, as presented, presumes an end result.  But, in my view, just what that system will look like a year or more from now is not at all clear.  Like all complicated issues, the devil is in the details.  Unfortunately, this bill has become highly political.  With the passage of H.524, the train will leave the station but the track ahead is not clear.  Hopefully, there is a sign ahead that will avoid disaster and ultimately serve the well-being of all Vermonters.”

     Rep. Sharpe of Bristol explained his vote as follows:

“Madam Speaker:

     Although this bill does not move Vermont’s health care system forward quickly enough for many Vermonters it is a compromise in the spirit of cooperation. I sincerely hope that this modest effort toward significant reform of a broken system is passed into law.”                

     Rep. Smith of New Haven explained his vote as follows:

“Madam Speaker:

     There has been a lot of attention given in recent years to the issues of outsourcing Vermont jobs overseas.

     It is ironic that many of the same people who criticize outsourcing support this legislation, which could become one of the largest costs driving jobs out of Vermont.

     By taking “bold action” today without first understanding the fiscal impacts could create a prescription for disaster in real health care reform tomorrow.

     For these reasons I voted no.”

     Rep Wright of Burlington explained his vote as follows:

“Madam Speaker:

     I oppose H. 524 because despite our need for health care reform, in this case the cure is worse than the disease. The proponents complain about our concerns as “scare tactics” yet they offer no real rebuttal to them. It is a government run plan, it will cost 2 billion dollars in broad based taxes. No compromise considered, a popularly re-elected Governor’s ideas ignored and a fatally flawed bill heads down the tracks… The Act 60 of Health Care. Those are the facts.”

Message from the Senate No. 51

     A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows:

Madam Speaker:

I am directed to inform the House that the Senate has on its part adopted a joint resolution of the following title:

J.R.S. 28.  Joint resolution relating to weekend adjournment.

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

The Senate has considered a joint resolution originating in the House of the following title:

J.R.H. 25.  Joint resolution relating to civics education forum.

And has adopted the same in concurrence with proposal of amendment in the adoption of which the concurrence of the House is requested.

The Senate has considered a joint resolution originating in the House of the following title:

J.R.H. 33.  Joint resolution commemorating equal pay day.

And has adopted the same in concurrence.

Message from Governor

A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows:

Mr. Speaker:

I am directed by the Governor to inform the House that on the twenty-first day of April, 2005, he approved and signed a bill originating in the House of the following title:

H. 191    An act relating to military wills and military powers of                                                            attorney

Adjournment

At five o’clock and forty-five minutes in the afternoon, on motion of Rep. Sunderland of Rutland Town, the House adjourned until tomorrow at nine o’clock and thirty minutes in the afternoon.