Journal of the House

________________

FRIDAY, JUNE 3, 2005

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

Devotional Exercises

Devotional exercises were conducted by Mr. Michael Sherman of Montpelier.

Message from Governor

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

Madam Speaker:

I am directed by the Governor to inform the House that on the second day of June, 2005, he approved and signed bills originating in the House of the following titles:

H. 48      An act relating to wine auctions by nonprofit organizations;

H. 198    An act relating to gift certificates;

H. 504    An act relating to appraisals and education finance.

Pages Honored

In appreciation of their many services to the members of the General Assembly, the Speaker recognized the following named Pages who are completing their service today and presented them with corsages:

                             Page Kassandra Dunsmore of St. Albans

                             Page Mary Lacy of Jericho

                             Page Elise Barry of Brookfield

Committee Bills Introduced

     Committee bills of the following titles were severally read the first time and, under the rule, placed on the Calendar for notice tomorrow.

H. 547

Rep. Sweaney of Windsor, for the committee on Government Operations, introduced a bill, entitled

An act relating to adjustments to the retirement systems of state employees and teachers;

H. 548

     Rep. Adams of Hartland, for the committee on Fish, Wildlife and Water Resources, introduced a bill, entitled

     An act relating to personal watercraft safety.

Joint Resolution Referred to Committee

J.R.H. 51

Reps. Hube of Londonderry, Adams of Hartland, Allaire of Rutland City, Allard of St. Albans Town, Baker of West Rutland, Bohi of Hartford, Bostic of St. Johnsbury, Branagan of Georgia, Canfield of Fair Haven, Chen of Mendon, Clark of St. Johnsbury, Clark of Vergennes, Condon of Colchester, Corcoran of Bennington, Darrow of Dummerston, Deen of Westminster, DePoy of Rutland City, Donaghy of Poultney, Dostis of Waterbury, Dunsmore of Georgia, Endres of Milton, Errecart of Shelburne, Flory of Pittsford, Green of Berlin, Helm of Castleton, Houston of Ferrisburgh, Hudson of Lyndon, Jerman of Essex, Jewett of Ripton, Johnson of Canaan, Kainen of Hartford, Kilmartin of Newport City, Klein of East Montpelier, Komline of Dorset, Krawczyk of Bennington, Larocque of Barnet, Larrabee of Danville, LaVoie of Swanton, Livingston of Manchester, Louras of Rutland City, Marcotte of Coventry, Marron of Stowe, McAllister of Highgate, McFaun of Barre Town, Miller of Elmore, Morley of Barton, Morrissey of Bennington, Niquette of Colchester, Obuchowski of Rockingham, Parent of St. Albans City, Peaslee of Guildhall, Pillsbury of Brattleboro, Rodgers of Glover, Rusten of Halifax, Schiavone of Shelburne, Shaw of Derby, Smith of New Haven, Smith of Morristown, Sunderland of Rutland Town, Valliere of Barre City, Westman of Cambridge, Winters of Swanton, Winters of Williamstown, Wright of Burlington and Young of Orwell offered a joint resolution, entitled

Joint resolution expressing disappointment to U.S. Senator Hillary Rodham Clinton for her support of the proposed tire test burn at the International Paper Company plant in Ticonderoga, New York

Whereas, the International Paper Company (IPC) is proposing to burn processed tires at its plant in Ticonderoga, New York which is located on the shores of Lake Champlain directly across from Vermont, and

Whereas, the air contaminants that will result from this test burn will have a detrimental impact on individuals who live, and farms that are situated, downwind from the plant on the Vermont side of the lake, and

Whereas, on October 24, 2003, Governor Douglas stated that he could not support the test burn “unless I receive assurances that the test could be conducted with no adverse impact to Vermont’s air quality,” and

Whereas, at the time, based on IPC’s own data, the Vermont department of environmental conservation concluded preliminarily that the proposed test burn would release zinc admissions into the air that exceed the state’s air quality standards, and

Whereas, IPC has yet to file a complete application to conduct the burn that will enable both the Vermont and New York departments of environmental conservation to determine more definitively if the test burn will be harmful to humans, farm animals, and crops, and

Whereas, while the economic viability of the IPC 's plant at Ticonderoga, New York is important for the region, the health of Vermonters must be the highest priority, and

Whereas, Senator Jeffords has joined Governor Douglas in expressing his opposition to a test burn without convincing statistical evidence that it will not harm the health of Vermonters, and

Whereas, despite the serious public health question that the test burn raises, and which remains unanswered, on April 13, Senator Hillary Rodham Clinton wrote to Denise M. Sheehan, Acting Commissioner, New York Department of Environmental Conservation, urging her “to approve International Paper’s (IP) Title 5 Air Permit application,” and

Whereas, on April 27, Governor Douglas wrote to Senator Clinton expressing “deep disappointment” for Clinton’s endorsement of a proposal to burn tires at the International Paper plant in Ticonderoga, and

Whereas, Senator Clinton’s support for the test burn is not in the best interests of Vermonters and makes assumptions that the burn will not have any negative health consequences, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly joins with the governor in expressing its disappointment to U.S. Senator Hillary Rodham Clinton for her support of the proposed tire test burn at the International Paper Company plant in Ticonderoga, New York, and requests her, in the strongest possible terms, to withdraw her support for the proposed test burn, and be it further

Resolved:  That the secretary of state be directed to send a copy of this resolution to U.S. Senator Hillary Rodham Clinton, Acting New York Environmental Commissioner Denise Sheehan, and to Governor Douglas.

Which was read and, in the Speaker’s discretion, treated as a bill and referred to the committee on Natural Resources and Energy.

Senate Proposal of Amendment Concurred in

H. 352

     The Senate proposes to the House to amend House bill, entitled

     An act relating to interstate insurance product regulation compact;

     By adding Secs. 3, 4, 5, and 6 to read as follows:

Sec. 3.  9 V.S.A. § 42(a)(4) is amended to read:

(4)  the reasonable cost of creditor life or disability insurance, or of a debt protection agreement as set forth in section 10405 of Title 8, if agreed to by the borrower;

Sec. 4.  8 V.S.A. § 10405 is added to read:

§ 10405.  DEBT PROTECTION AGREEMENTS

(a)  Debt protection agreements that meet the requirements of this section, including without limitation requirements related to necessary disclosures, prohibited activities, and to the sale, transfer, and assignment of such agreements are not insurance as defined by section 3301a of this title and are not governed by the insurance laws of the state of Vermont.

(b)  For purposes of this section:

(1)  “Debt protection agreement” means a loan term or contractual arrangement that may be part of, or separate from, the loan agreement or retail or motor vehicle installment contract that modifies the loan or retail or motor vehicle installment contract terms governing the extension of credit under the loan agreement, or retail or motor vehicle installment contract, and under which the creditor agrees to provide one or more of the following protections:

(A)  debt cancellation, which is an agreement to cancel all or part of a borrower’s obligation to repay an extension of credit from that creditor upon the occurrence of a specified event and shall include a guaranteed asset protection waiver agreement wherein the creditor agrees to cancel all or part of a borrower’s obligation to repay an extension of credit to the extent that there is an outstanding balance on the loan or retail or motor vehicle installment contract after application of property insurance proceeds in the event of total physical damage or theft of the property; or

(B)  debt suspension, which is an agreement to suspend all or part of a borrower’s obligation upon the occurrence of a specified event.

(2)  The term “creditor” shall include:

(A)  the lender in a credit transaction;

(B)  any “retail seller” or “seller” of “motor vehicles” or of other “goods” and “services” that provides credit to “retail buyers” or “buyers” of such motor vehicles or goods and services as those terms are all defined in 9 V.S.A. §§ 2351 and 2401, respectively; provided that such entities comply with the provisions of this section, including without limitation the provisions of subdivisions (c)(1) and (2) of this section; and

(C)  the assignees of any of the foregoing to whom the credit obligation is payable. 

(3)  The term “borrower” shall include a debtor, retail buyer of a motor vehicle or other good or service, or other person who obtains an extension of credit from a creditor.

(4)  The term “actuarial method” shall mean the method of allocating payments made on a debt between the amount financed and the finance charge pursuant to which a payment is applied first to the accumulated finance charge and any remainder is subtracted from or any deficiency is added to the unpaid balance of the amount financed.

(c)  Requirements:

(1)  In the case of credit granted by a seller or retail seller of motor vehicles or of other goods and services that is not required to be licensed under chapter 73 of this title, such retail seller or seller of motor vehicles or of other goods and services, shall, within 15 business days sell, assign, or otherwise transfer the loan agreement, motor vehicle installment contract, or retail sales installment contract, together with the related debt protection agreement, in accordance with the provisions of subdivision (2) of this subsection. 

(2)  All assignments, sales, or transfers of a loan agreement or motor vehicle or retail installment contract to which a debt protection agreement relates and the related debt protection agreement, shall be to a financial institution as defined in subdivision 11101(32) of this title, a credit union or an entity licensed under subdivision 2201(a)(1) or (3) of this title to engage in lending or sales financing.  

(3)  In the event that a retail seller or seller of motor vehicles or of other goods or services cannot within 15 business days sell, assign, or otherwise transfer the loan agreement or motor vehicle or retail sales installment contract and the related debt protection agreement as required by subdivision (1) of this subsection, or in the event that an assignment is made contrary to subdivision (2) of this subsection, the provisions of subsection (a) of this section, shall not apply and the product shall be considered to be insurance governed by the insurance laws of the state of Vermont.

(4)  The debt protection agreement forms a part of the loan agreement or sales contract and must be assigned, sold, or transferred together with any assignment, sale or transfer of the loan agreement or retail or motor vehicle installment contract to which it was originally related.

(5)  A creditor shall disclose in writing:

(A)  that neither the extension of credit, the terms of the credit nor the terms of the related sale in the case of a motor vehicle or other good or service are to be conditioned upon the purchase of a debt protection agreement;

(B)  the charge for the debt protection agreement; and

(C)  the terms and conditions of coverage, including without limitation the eligibility requirements for coverage, conditions, or exclusions associated with the contract, a clear representation of the parties to the agreement, procedures for making a claim under the agreement, and the length of term of coverage.  Such disclosures shall be conspicuous, readily understandable, and designed to call attention to the nature and significance of the information provided.

(6)  The buyer signs or initials an affirmative written request to purchase a debt protection agreement after receiving the disclosures specified in this subsection.  Any buyer in the transaction may sign or initial the request.

(7)  Neither the extension of credit, the terms of the credit, nor the terms of the related sale in the case of a motor vehicle or other good or service are to be conditioned upon the purchase of a debt protection agreement.

(8)  The fees charged for debt protection agreements shall not vary as between individual borrowers except in relation to the amount and maturity date of the underlying loan or extension of credit. 

(9)  Creditors may not offer debt protection agreements where the products contain terms that allow the creditor to modify unilaterally the contract, unless the modification is favorable to the borrower and is made without additional charge to the borrower, or the borrower is notified of the proposed change and can cancel the debt protection agreement without penalty.

(10)  Creditors cannot offer debt protection agreements where the terms require a lump sum, single payment, for the contract payable at the outset and the product is for a residential mortgage loan, including primary or secondary residences and including first or subordinate liens.  Periodic payments made in relation to a residential home loan must be evenly distributed over the same term as the term of the residential home loan. 

(11)  The borrower may cancel the debt protection agreement at any time and for any reason.  In the event of termination or cancellation of the contract, the creditor must refund any unearned fee according to a formula fully disclosed to the borrower at the time of entering into the debt protection agreement, unless the contract provides otherwise.  A debt protection agreement that does not provide for a refund may only be offered if an offer is also made of a bona fide option to purchase a comparable contract that provides for a refund.  The refund must be fair and reasonable, and the method of calculating the refund must be at least as favorable to the borrower as the “actuarial method”; provided, however, that if such method produces a result of less than $5.00, no refund shall be required.  Notwithstanding the foregoing, if cancellation by the borrower occurs within 30 days of entering into the debt protection agreement, the borrower shall receive a full refund. 

(12)  The creditor must manage the risks associated with debt protection agreements in accordance with safe and sound financial principles.  The creditor must establish and maintain effective risk management and control processes over its debt protection agreements.  Such processes include appropriate recognition and financial reporting of income, expenses, assets and liabilities, and appropriate treatment of all expected and unexpected losses associated with the products.  The creditor also should assess the adequacy of its internal control and risk mitigation activities in view of the nature and scope of its debt protection agreement programs.

(13)  Debt protection agreements, as defined in this section, shall not state that the borrower does not have a right to bring an action to enforce the terms of the debt protection agreement or otherwise challenge the denial of a claim, or that any civil action brought in connection with a debt protection agreement must be brought in the courts of a jurisdiction other than Vermont.

(14)  Any other requirements prescribed by the commissioner, in order to further the purposes of this section, by rules adopted pursuant to this section.

(d)  The commissioner may conduct an examination of any creditor, as defined under this section, for the purpose of determining compliance with this section and may make such investigation, as the commissioner deems necessary.  To the extent necessary for such examination or investigation, the commissioner may, without limiting the foregoing, compel the production of all relevant books, records, documents, other evidence, or the attendance of witnesses, and may issue subpoenas with respect to the foregoing.  The expense of any such investigation or examination shall be paid by the entity being examined or investigated.  Nothing contained herein shall limit any other examination or investigation authority of the commissioner contained in Title 9 or this title.

(e)  The commissioner may take any action reasonable, necessary, or desirable for the enforcement of this section, or any rule adopted pursuant to this section, or the enforcement of any order issued under this subsection and may:

(1)  Order the creditor to cease and desist from offering debt protection agreements.

(2)  Revoke or suspend the license or authority under this title of any person including creditors offering debt protection agreements.

(3)  Impose a penalty of not more than $1,000.00 for each violation that the commissioner finds to exist.

(4)  Order the creditor to make restitution to the borrower.

(f)  The powers vested in the commissioner under this section are in addition to any other powers of the commissioner to enforce penalties, fines, or forfeitures authorized by law with respect to a violation of any other law under Title 9 or this title. 

Sec. 5.  9 V.S.A. § 2355(f)(4) is amended to read:

(4)  The amount, if any, for insurance including the cost of credit life insurance at a rate authorized by rate schedules then in effect and on file with the commissioner of banking, insurance, securities, and health care administration, the cost, if any, of physical damage insurance specifying the type or types and the term of coverage, and the cost, if any, for service contracts as defined in section 4247 of Title 8, and the reasonable cost, if any, for a debt protection agreement as set forth in section 10405 of Title 8;

Sec. 6.  9 V.S.A. § 2405(g)(4) is amended to read:

(4)  The amount, if any, included for insurance, if a separate identified charge is made therefore, specifying the coverage and cost of each type of insurance at rates authorized by rate schedules then in effect and on file` with the commissioner of banking, insurance, securities, and health care administration, and the cost, if any, for service contracts as defined in section 4247 of Title 8, and the reasonable cost, if any, for a debt protection agreement as set forth in section 10405 of Title 8;

     Which proposal of amendment was considered and concurred in.

 

Senate Proposal of Amendment Concurred in

H. 403

     The Senate proposed to the House to amend House bill, entitled

     An act relating to basic needs budget calculations to determine livable wages;

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

Sec. 1.  2 V.S.A. § 505 is added to read:

§ 505.  LIVABLE WAGE ANALYSIS; BASIC NEEDS BUDGET CALCULATION; REPORT

(a)  Every other year beginning January 1, 2007, the joint fiscal office shall issue a report on or before January 15.  The report shall be updated as needed on or before January 1 of the interim year to reflect any significant economic, policy, or statutory changes that substantially affect the information in the report issued the previous January 15.  The report shall include a computation of baseline data of the cost of living in Vermont and the current wage levels within various sectors of the economy using the methodology used by the livable income study committee in its report issued on November 9, 1999.  The report shall include:

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

(2)  Any changes in the federal minimum wage and in the minimum wage rates of surrounding and comparable states.

(b)  Recommendations for changes or revisions in the methodology used to determine the basic needs budget calculations as needed shall be approved by the joint fiscal committee.

(c)  The report and any revisions shall be presented to the house committee on general, housing and military affairs and the senate committee on economic development, housing and general affairs.

Pending the question, Shall the House concur in the Senate proposal of amendment? 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 House concur in the Senate proposal of amendment?  was decided in the affirmative.  Yeas, 102.  Nays, 26.

Those who voted in the affirmative are:


Adams of Hartland

Ancel of Calais

Aswad of Burlington

Atkins of Winooski

Audette of S. Burlington

Barnard of Richmond

Bohi of Hartford

Bostic of St. Johnsbury

Botzow of Pownal

Branagan of Georgia

Brooks of Montpelier

Chen of Mendon

Clark of St. Johnsbury

Clarkson of Woodstock

Condon of Colchester

Copeland-Hanzas of Bradford

Corcoran of Bennington

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

Donahue of Northfield

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

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

Koch of Barre Town

Komline of Dorset

Krawczyk of Bennington

Kupersmith of S. Burlington

Larocque of Barnet

LaVoie of Swanton

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

Metzger of Milton

Milkey of Brattleboro

Miller of Shaftsbury

Minter of Waterbury

Molloy of Arlington

Monti of Barre City

Mook of Bennington

Morrissey of Bennington

Myers of Essex

Nease of Johnson

Niquette of Colchester

Nitka of Ludlow

Nuovo of Middlebury

Obuchowski of Rockingham

O'Donnell of Vernon

Orr of Charlotte

Partridge of Windham

Pellett of Chester

Peterson of Williston

Potter of Clarendon

Pugh of S. Burlington

Randall of Troy

Reese of Pomfret

Rusten of Halifax

Seibert of Norwich

Severance of Colchester

Shand of Weathersfield

Sharpe of Bristol

Smith of New Haven

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Westman of Cambridge

Wright of Burlington

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

Canfield of Fair Haven

Clark of Vergennes

Donaghy of Poultney

Endres of Milton

Errecart of Shelburne

Houston of Ferrisburgh

Hube of Londonderry

Kennedy of Chelsea

Kilmartin of Newport City

Larrabee of Danville

Lawrence of Lyndon

Livingston of Manchester

Marcotte of Coventry

Morley of Barton

Otterman of Topsham

Peaslee of Guildhall

Perry of Richford

Schiavone of Shelburne

Shaw of Derby

Sunderland of Rutland Town

Winters of Swanton

Winters of Williamstown


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


Brennan of Colchester

DePoy of Rutland City

Dunsmore of Georgia

Flory of Pittsford

Heath of Westford

Helm of Castleton

Hudson of Lyndon

Johnson of Canaan

Kainen of Hartford

Larson of Burlington

Louras of Rutland City

Marron of Stowe

McAllister of Highgate

Miller of Elmore

Parent of St. Albans City

Pillsbury of Brattleboro

Rodgers of Glover

Smith of Morristown

Valliere of Barre City

Wood of Brandon

Young of Orwell


 

     Rep. Kilmartin of Newport City explained his vote as follows:

“Madam Speaker:

     I vote no because the study will produce useless findings, create false expectations, and further ratify a flawed and ideologically biased actuarial method.  It also creates a diversion of scarce resources and impairs the integrity and credibility of the House and fiscal office.”

Message from the Senate No. 76

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

Madam Speaker:

     I am directed to inform the House that the Senate has considered a bill originating in the House of the following title:

H. 540.  An act relating to the agricultural and forest land use value program.

And has passed the same in concurrence with proposals of amendment in the adoption of which the concurrence of the House is requested.

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

H. 543.  An act relating to long-term care waiver.

And has concurred therein.

The Senate has on its part adopted a joint resolution of the following title:

J.R.S. 39.  Joint resolution supporting the application of the Village of Enosburg Falls Electric Light Department to the Public Service Board for a rate cost shift.

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. 40.  Joint resolution authorizing the commissioner of forests, parks and recreation to self designated state lands.

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

The Senate has considered House proposal of amendment to Senate bill entitled:

S. 56.  An act relating to restructuring the agency of natural resources.

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

The President announced the appointment as members of such Committee on the part of the Senate:

          Senator Lyons

          Senator Snelling

               Senator Bartlett

Recess

At ten o’clock and forty minutes in the forenoon, the Speaker declared a recess until the fall of the gavel.

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

Message from the Senate No. 77

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

Madam Speaker:

     I am directed to inform the House that the Senate has considered the report of the Committee of Conference upon the disagreeing votes of the two Houses upon House bill of the following title:

H. 524.  An act relating to universal access to health care in Vermont.

And has accepted and adopted the same on its part.

Message from the Senate No. 78

     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 considered the report of the Committee of Conference upon the disagreeing votes of the two Houses upon House bill of the following title:

H. 523.  An act relating to the state’s transportation program.

And has accepted and adopted the same on its part.

Committee of Conference Appointed

S. 56

     Pursuant to the request of the Senate for a Committee of Conference on the disagreeing votes of the two Houses on Senate bill, entitled

     An act relating to restructuring the agency of natural resources;

     The Speaker appointed as members of the Committee of Conference on the part of the House:

   Rep. Masland of Thetford

   Rep. Krawczyk of Bennington

               Rep. McCullough of Williston 

Rules Suspended; Senate Proposal of Amendment Not Concurred in;

Committee of Conference Requested and Appointed

H. 540

Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town,  the rules were suspended and House bill, entitled

An act relating to agricultural and forest land use value program;

Was taken up for immediate consideration.

     The Senate proposed to the House to the bill by striking Sec. 2 in its entirety and inserting in lieu thereof the following:

Sec. 2.  32 V.S.A. § 3752(14) is amended to read:

(14)  “Farm buildings” means all farm buildings and other farm improvements which are actively used by a farmer as part of a farming operation, are owned by a farmer or leased to a farmer under a written lease for a term of three years or more, and are situated on land that is enrolled in a use value appraisal program or on a housesite adjoining enrolled land; but “farm.  “Farm buildings” shall include up to $100,000.00 of the value of a farm facility processing farm crops, a minimum of 75 percent of which are produced on the farm and shall not include any dwelling other than a dwelling in use during the preceding tax year exclusively to house one or more farm employees, as defined in section 4469 of Title 9, and their families, as a nonmonetary benefit of the farm employment.  This subdivision shall not affect the application of the definition of “farming” in subdivision 6001(22) of Title 10 or the definition of “farm structure” in subdivision 4413(d)(1) of Title 24.

Pending the question, Will the House concur in the Senate proposal of amendment? Rep. Zuckerman of Burlington moved that the House refuse to concur and ask for a Committee of Conference, which was agreed to, and the Speaker appointed as members of the Committee of Conference on the part of the House:

Rep. Botzow of Pownal

Rep. Winters of Williamstown

Rep. Malcolm of Pawlet

Rules Suspended to Interrupt Orders of the Day

Rep. Sunderland of Rutland Town moved to suspend the rules to interrupt the Orders of the Day to permit introduction of J.R.S. 39, which was agreed to.

Joint Resolution Adopted in Concurrence

J.R.S. 39

     By Senators Illuzzi, Campbell, Collins and Kittell,

Joint resolution supporting a petition of the Village of Enosburg Falls Trustees to the Public Service Board for an electric rate reduction for Franklin Foods Inc.

Whereas, the fragile economic livelihood of the village of Enosburg Falls has already been damaged this year due to a major fire in the village’s center, and

Whereas, the potential departure of Franklin Food s Inc. from the village would deprive Enosburg Falls of a long‑established local manufacturer of cream cheese and other specialty cheeses that currently employs 83 persons, and

Whereas, one of the decisive factors in determining the company’s remaining and possibly expanding in Enosburg Falls, or relocating outside Vermont, is the cost of electricity which is currently approximately 12.8 cents per kilowatt hour, and

Whereas, it has been estimated that Franklin Foods Inc.’s electric costs would be lowered approximately four cents per kilowatt hour, should the proposal be implemented, and

Whereas, the village trustees have agreed to petition the Public Service Board for an electric rate reduction if Franklin Foods Inc. agrees to remain in Enosburg Falls, and

Whereas, authorization of the rate reduction will save potentially 83 jobs in Enosburg Falls, and it may create additional employment opportunities, should the company’s proposed expansion occur in Enosburg Falls and not at an

out-of-state location, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly urges the Public Service Board to support a  petition of the Village of Enosburg Falls Electric Light Department for an electric rate cost shift intended to lower the cost per kilowatt hour that the village utility charges Franklin Foods Inc., and be it further

Resolved:  That the secretary of state be directed to send a copy of this resolution to the Public Service Board, to the Village of Enosburg Falls Electric Light Department, and to Timothy Smith at the Franklin County Industrial Development Corporation in St. Albans.

Was taken up read and adopted in concurrence.

Rules Suspended; Report of Committee of Conference Adopted

S. 174

Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town,  the rules were suspended and Senate bill, entitled

An act relating to home health agencies;

Was taken up for immediate consideration.

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends

First:  In Sec. 2, by striking subparagraph 2 in its entirety and by inserting in lieu thereof the following:

(2)  The existing home health system has been highly successful at providing:  (A) universal access to medically necessary home health services regardless of ability to pay or location of one’s residence; (B) high levels of access to home health services by Medicare-eligible beneficiaries; and (C) high levels of supportive services under Vermont’s home- and community‑based waiver program, while maintaining one of the lowest average costs per visit of any state in the nation.

Second:  In Sec. 6, 18 V.S.A. § 9446, in the first sentence, after the words “the commissioner” by adding the following:  , in consultation with the commissioner of aging and independent living,

Third:  In Sec. 8, 33 V.S.A. § 6305(b), after the words “the commissioner” by adding the following:  , the commissioner

Committee on the part of             Committee on the part of

the Senate                                     the House

Sen. James Leddy                        Rep. Janet Ancel

Sen. Sara Branon Kittell              Rep. Francis McFaun

Sen. William Doyle                      Rep. Virginia Milkey

Pending the question, Shall the House adopt the Committee of Conference report? 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, Pending the question, Shall the House adopt the Committee of Conference report?  was decided in the affirmative.  Yeas, 132.  Nays, 0.

Those who voted in the affirmative are:


Adams of Hartland

Allaire of Rutland City

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

Bartlett of Dover

Bohi of Hartford

Bostic of St. Johnsbury

Botzow of Pownal

Branagan of Georgia

Brooks of Montpelier

Canfield of Fair Haven

Chen of Mendon

Clark of St. Johnsbury

Clark of Vergennes

Clarkson of Woodstock

Condon of Colchester

Copeland-Hanzas of Bradford

Corcoran of Bennington

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

DePoy of Rutland City

Donaghy of Poultney

Donahue of Northfield

Dostis of Waterbury

Dowland of Holland

Edwards of Brattleboro

Emmons of Springfield

Endres of Milton

Errecart of Shelburne

Evans of Essex

Fallar of Tinmouth

Fisher of Lincoln

Frank of Underhill

French of Randolph

Grad of Moretown

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Hube of Londonderry

Hudson of Lyndon

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Kainen of Hartford

Kennedy of Chelsea

Keogh of Burlington

Kilmartin of Newport City

Kiss of Burlington

Kitzmiller of Montpelier

Klein of East Montpelier

Koch of Barre Town

Komline of Dorset

Krawczyk of Bennington

Kupersmith of S. Burlington

Larocque of Barnet

Larrabee of Danville

Larson of Burlington

LaVoie of Swanton

Lawrence of Lyndon

Leriche of Hardwick

Lippert of Hinesburg

Livingston of Manchester

Louras of Rutland City

Maier of Middlebury

Marcotte of Coventry

Marek of Newfane

Marron of Stowe

Martin of Springfield

Martin of Wolcott

Masland of Thetford

McAllister of Highgate

McCullough of Williston

McFaun of Barre Town

McLaughlin of Royalton

Metzger of Milton

Milkey of Brattleboro

Miller of Shaftsbury

Minter of Waterbury

Molloy of Arlington

Monti of Barre City

Mook of Bennington

Morley of Barton

Morrissey of Bennington

Myers of Essex

Nease of Johnson

Niquette of Colchester

Nitka of Ludlow

Nuovo of Middlebury

Obuchowski of Rockingham

O'Donnell of Vernon

Orr of Charlotte

Otterman of Topsham

Parent of St. Albans City

Partridge of Windham

Peaslee of Guildhall

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

Schiavone of Shelburne

Seibert of Norwich

Severance of Colchester

Shand of Weathersfield

Sharpe of Bristol

Shaw of Derby

Smith of New Haven

Sunderland of Rutland Town

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Valliere of Barre City

Westman of Cambridge

Winters of Swanton

Winters of Williamstown

Wright of Burlington

Young of Orwell

Zuckerman of Burlington


 

Those who voted in the negative are:

None


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


Brennan of Colchester

Donovan of Burlington

Dunsmore of Georgia

Flory of Pittsford

Gervais of Enosburg

Helm of Castleton

Houston of Ferrisburgh

Howrigan of Fairfield

Johnson of Canaan

Keenan of St. Albans City

Lorber of Burlington

Malcolm of Pawlet

Miller of Elmore

Pellett of Chester

Pillsbury of Brattleboro

Smith of Morristown

Wood of Brandon


 

Rules Suspended; Report of Committee of Conference Adopted

S. 52

Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town,  the rules were suspended and Senate bill, entitled

An act relating to renewable energy portfolio standards, appliance efficiency standards, and distributed electricity;

Was taken up for immediate consideration.

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the House recede from its proposals of amendment and that the bill be amended by striking all after the enacting clause and inserting in lieu thereof the following:

* * * I.  Renewable Portfolio Standards * * *

Sec. 1.  30 V.S.A. § 8001(a) is amended to read:

§ 8001.  RENEWABLE ENERGY GOALS

(a)  The renewable energy programs authorized under this chapter shall be designed and implemented to achieve the following goals:

(1)  Air and water quality shall be protected and promoted in renewable energy programs.

(2)  The continued acquisition of cost-effective end-use energy efficiency measures shall be preserved and enhanced in renewable energy programs.

(3)  Programs shall, to the extent practicable, support development of renewable energy and energy efficiency industries and infrastructure in Vermont, while still sustaining existing renewable energy infrastructure.

(4)  Programs shall, to the extent practicable, be designed and implemented in a manner that balances program benefits and costs, and rates.

The general assembly finds it in the interest of the people of the state to promote the state energy policy established in section 202a of this title by:

(1)  Balancing the benefits, lifetime costs, and rates of the state’s overall energy portfolio to ensure that to the greatest extent possible the economic benefits of renewable energy in the state flow to the Vermont economy in general, and to the rate paying citizens of the state in particular.

(2)  Supporting development of renewable energy and related planned energy industries in Vermont, in particular, while retaining and supporting existing renewable energy infrastructure.

(3)  Providing an incentive for the state’s retail electricity providers to enter into affordable, long-term, stably priced renewable energy contracts that mitigate market price fluctuation for Vermonters.

(4)  Developing viable markets for renewable energy and energy efficiency projects.

(5)  Protecting and promoting air and water quality by means of renewable energy programs.

(6)  Contributing to reductions in global climate change and anticipating the impacts on the state’s economy that might be caused by federal regulation designed to attain those reductions.

Sec. 2.  30 V.S.A. § 8002 is amended to read:

§ 8002.  DEFINITIONS

For purposes of this chapter:

(1)(A)  “Renewable pricing” shall mean an optional service provided or contracted for by an electric company:

(i)  under which the company’s customers may voluntarily either:

(I)  purchase all or part of their electric energy from renewable sources as defined in this chapter; or

(II)  cause the purchase and retirement of tradeable renewable energy credits on the participating customer’s behalf; and

(ii)  which increases the company’s reliance on renewable sources of energy beyond those the electric company would otherwise be required to provide under section 218c of this title.

(B)  Renewable pricing programs may include, but are not limited to:

(i)  contribution-based programs in which participating customers can determine the amount of a contribution, monthly or otherwise, that will be deposited in a board-approved fund for new renewable energy project development;

(ii)  energy-based programs in which customers may choose all or a discrete portion of their electric energy use to be supplied from renewable resources;

(iii)  facility-based programs in which customers may subscribe to a share of the capacity or energy from specific new renewable energy resources.

(2)  “Renewable energy” means energy produced using a technology that relies on a resource that is being consumed at a harvest rate at or below its natural regeneration rate.

(A)  For purposes of this subdivision (2), methane gas and other flammable gases produced by the decay of sewage treatment plant wastes or landfill wastes and anaerobic digestion of agricultural products, byproducts, or wastes shall be considered renewable energy resources, but no form of solid waste, other than agricultural or silvicultural waste, shall be considered renewable.

(B)  For purposes of this subdivision (2), no form of nuclear fuel shall be considered renewable.

(C)  For purposes of this chapter, the only energy produced by a hydroelectric facility to be considered renewable shall be from a hydroelectric facility with a generating capacity of 80 200 megawatts or less.

(D)  After conducting administrative proceedings, the board may add technologies or technology categories to the definition of “renewable energy,” provided that technologies using the following fuels shall not be considered renewable energy supplies:  coal, oil, propane, and natural gas.

(3)  “Existing renewable energy” means all types of renewable energy sold from the supply portfolio of a Vermont retail electricity provider that is not considered to be from a new renewable energy source.

(4)  “New renewable energy” means renewable energy produced by a generating resource coming into service after December 31, 2004.  This may include the additional energy from an existing renewable facility retrofitted with advanced technologies or otherwise modified or expanded to increase the kwh output of the facility.  If the production of new renewable energy through retrofitting involves combustion of the resource, the system must result in an incrementally higher level of energy conversion efficiency or significantly reduced emissions.  For the purposes of this chapter, renewable energy refers to either “existing renewable energy” or “new renewable energy.”

(5)  “Qualifying SPEED resources” means contracts for in-state resources in the SPEED program established under section 8005 of this title that meet the definition of new renewable energy under this section, whether or not renewable energy credits are attached.

(6)  “Nonqualifying SPEED resources” means contracts for in-state resources in the SPEED program established under section 8005 of this title that are fossil fuel-based, combined heat and power (CHP) facilities that sequentially produce both electric power and thermal energy from a single source or fuel.  In addition, at least 20 percent of a facility’s fuel’s total recovered energy must be thermal and at least 13 percent must be electric, the design system efficiency (the sum of full load design thermal output and electric output divided by the heat input) must be at least 65 percent, and the facility must meet air quality standards established by the agency of natural resources.

(7)  “Energy conversion efficiency” means the effective use of energy and heat from a combustion process.

(8)  “Tradeable renewable energy credits” means all of the environmental attributes associated with a single unit of energy generated by a renewable energy source where:

* * *

(9)  “Retail electricity provider” means a company engaged in the distribution or sale of electricity directly to the public.

Sec. 3.  30 V.S.A. § 8004 is amended to read:

§ 8004.  RENEWABLE PORTFOLIO STANDARDS FOR SALES OF

               ELECTRIC ENERGY

(a)  The public service board shall design a proposed renewable portfolio standard in the form of draft legislation.  The standard shall be developed with the aid of a renewable portfolio standard collaborative.  The renewable portfolio standard collaborative, composed of representatives from the electric utilities, industry, renewable energy industry, ratepayers, environmental and consumer groups, the department of public service, and other stakeholders identified by the board, shall aid in the development of a renewable portfolio standard for renewable energy resources, as well as requirements for implementation of and compliance with that standard.  The proposed renewable portfolio standard shall be applicable to all providers of electricity to retail consumers in this state.  The proposed renewable portfolio standard developed by the board will be presented to the house committee on commerce, the house and senate committees on natural resources and energy, and the senate committee on finance in the form of draft legislation for consideration in January 2004.

(b)  In developing the renewable portfolio standard, the board shall consider the following goals, which shall be afforded equal weight in formulating the standard:

(1)  increase the use of renewable energy in Vermont in order to capture the benefits of renewable energy generation for Vermont ratepayers and citizens.

(2)  maintain or reduce the rates of electricity being paid by Vermont ratepayers and lessen the price risk and volatility for future ratepayers.

(a)  Except as otherwise provided in section 8005 of this title, in order for Vermont retail electricity providers to achieve the goals established in section 8001 of this title, no retail electricity provider shall sell or otherwise provide or offer to sell or provide electricity in the state of Vermont without ownership of sufficient energy produced by renewable resources as described in this chapter, or sufficient tradeable renewable energy credits that reflect the required renewable energy as provided for in subsection (b) of this section.  In the case of members of the Vermont Public Power Supply Authority, the requirements of subsection (b) of this section may be met in the aggregate through all requirements contracts pursuant to section 4002a of this title, or in the aggregate otherwise as approved by the board.

(b)  Each retail electricity provider in Vermont shall provide a certain amount of new renewable resources in its portfolio.  Subject to subdivision 8005(d)(1) of this title each retail electricity provider in Vermont shall supply an amount of energy equal to its total incremental energy growth between January 1, 2005 and January 1, 2012 through the use of electricity generated by new renewable resources.  The retail electricity provider may meet this requirement through eligible new renewable energy credits, new renewable energy resources with renewable energy credits still attached, or a combination of those credits and resources.  No retail electricity provider shall be required to provide in excess of a total of 10 percent of its calendar year 2005 retail electric sales with electricity generated by new renewable resources.

(c)  The requirements of subsection (b) of this section shall apply to all retail electricity providers in this state, unless the retail electricity provider demonstrates and the public service board determines that compliance with the standard would impair the provider’s ability to meet the public’s need for energy services after safety concerns are addressed, at the lowest present value life cycle cost, including environmental and economic costs. 

(d)  The public service board shall provide, by order or rule, the regulations and procedures that are necessary to allow the public service board and the department of public service to implement and supervise further the implementation and maintenance of a renewable portfolio standard.

(e)  In lieu of, or in addition to purchasing tradeable renewable energy credits to satisfy the portfolio requirements of this section, a retail electricity provider in this state may pay to a renewable energy fund established by the public service board an amount per kilowatt hour as established by the board. As an alternative, the board may require any proportion of this amount to be paid to the energy conservation fund established under subsection 209(d) of this title.

(f)  Before December 30, 2007 and again before December 30, 2009, the public service board shall file a report  with the Senate Committees on Finance and on Natural Resources and Energy and the House Committees on Commerce and on Natural Resources and Energy.  The report shall include the following:

(1)  the total cumulative load growth in Vermont from 2005 through the end of the year that precedes the date on which the report is due;

(2)  a report on the market for tradeable renewable energy credits, including the prices at which credits are being sold;

(3)  a report on the SPEED program, and any projects using the program;

(4)  a summary of other contracts held or projects developed by Vermont retail electricity providers that are likely to be eligible under the provisions of  subsection 8005(d) of this title;

(5)  an estimate of potential effects on rates, economic development and jobs, if the target established in subsection 8005(d) of this section is met, and if it is not met;

(6)  an assessment of the supply portfolios of Vermont retail electricity providers, and the resources available to meet new supply requirements likely to be triggered by the expiration of major power supply contracts;

(7)  an assessment of the energy efficiency and renewable energy markets and recommendations to the legislature regarding strategies that may be necessary to encourage the use of these resources to help meet upcoming supply requirements; and

(8)  any recommendations for statutory change related to this section, including recommendations for rewarding utilities that make substantial investments in SPEED resources. 

Sec. 4.  30 V.S.A. §§ 8005 and 8006 are added to read:

§ 8005.  SUSTAINABLY PRICED ENERGY ENTERPRISE

              DEVELOPMENT (SPEED) PROGRAM

(a)  In order to achieve the goals of section 8001 of this title, there is created the Sustainably Priced Energy Enterprise Development (SPEED) program.  The SPEED program shall have two categories of projects:  qualifying SPEED resources and nonqualifying SPEED resources.

(b)  The SPEED program shall be established, after notice and hearing, by the public service board by January 1, 2007.  As part of the SPEED program, the public service board may:

(1)  name one or more entities to become engaged in the purchase and resale of electricity generated within the state by means of qualifying SPEED resources or nonqualifying SPEED resources;

(2)  allow the developer of a facility that is one megawatt or less, and is a qualifying SPEED resource or a nonqualifying SPEED resource, to sell that power under a long term contract that is established at a specified margin below the hourly spot market price;

(3)  encourage Vermont’s retail electricity providers to secure long‑term contracts for renewable energy that are anticipated to be below the long‑term market price, over the lives of the projects.  The board may create a competitive bid process through which to select a portion of those contracts;

(4)  maximize the benefit to rate payers from the sale of renewable energy credits or other credits that may be developed in the future, especially with regard to the projects approved under subdivision (3) of this subsection;

(5)  encourage retail electricity provider sponsorship and partnerships in the development of renewable energy projects;

(6)  make available to Vermont retail electricity providers for purchase through the SPEED program, on a pro rata basis, a specified portion of the power generated under subdivisions (2) and (3) of this subsection.  A retail electricity provider that chooses not to purchase a pro rata share of power generated under subdivision (3) of this section must establish, to the satisfaction of the board, that the purchase would impair the provider’s ability to meet the public’s need for energy services after safety concerns are addressed at the lowest present value life cycle cost, including environmental and economic costs;

(7)  establish a method for Vermont retail electrical providers to obtain beneficial ownership of the renewable energy credits associated with any SPEED projects, in the event that a renewable portfolio standard is in effect under the provisions of section 8004 of this title;

(8)  create a mechanism by which a retail electricity provider may establish that it has a sufficient amount of renewable energy, or resources that would otherwise qualify under the provisions of subsection (d) of this section, in its portfolio so that equity requires that the retail electricity provider be relieved, in whole or in part, from requirements established under subdivision (6) of this subsection that would require a retail electricity provider to purchase SPEED power;

(9)  provide that in any proceeding under subdivision 248(a)(2)(A) of this title, a demonstration of compliance with subdivision 248(b)(2) of this title, relating to establishing need for the facility, shall not be required if the facility is a SPEED resource and if no part of the facility is financed directly or indirectly through investments, other than power contracts, backed by Vermont electricity ratepayers; and

(10)  take such other measures as the board finds necessary or appropriate to implement SPEED.

(c)  Developers of qualifying and nonqualifying SPEED resources shall be entitled to classification as an eligible facility under 10 V.S.A. chapter 12, relating to the Vermont Economic Development Authority. 

(d)(1)  The public service board shall meet on or before January 1, 2012, open a proceeding, and issue findings determining the amount of qualifying SPEED resources that have come into service or are projected to come into service during the period of time between January 1, 2005 and January 1, 2013.  If the board finds that the amount of qualifying SPEED resources coming into service during that time exceeds total statewide growth in demand during the period of time between January 1, 2005 and January 1, 2012, or if it finds that the amount of qualifying SPEED resources exceeds 10 percent of total statewide load for calendar year 2005, the portfolio standards established under this chapter shall not be in force.  The board shall make its determination by July 1, 2012.  If the board finds that the goal established has not been met, one year after the board’s determination the portfolio standards established under subsection 8004(b) of this title shall take effect.

(2)  For the purposes of the determination to be made under this subsection, electricity produced at all facilities owned by or under long-term contract to Vermont retail electricity providers, whether it is generated inside or outside Vermont, that is new renewable energy shall be counted in the calculations under subdivision (d)(1) of this section.

(e)  By no later than September 1, 2006, the public service board shall provide, by order or rule, the regulations and procedures that are necessary to allow the public service board and the department of public service to implement, and to supervise further the implementation and maintenance of the SPEED program.

§ 8006.  TRADEABLE CREDITS

(a)  The public service board shall establish or adopt a system of tradeable renewable energy credits for renewable resources that may be earned by electric generation qualifying for the renewables portfolio standard.  The system shall be designed to be consistent with regional practices.

(b)  The public service board shall ensure that all electricity provider and provider-affiliate disclosures and representations made with regard to a provider’s portfolio are accurate and reasonably supported by objective data.  Further, the public service board shall ensure that providers disclose the types of generation used and whether the energy is Vermont‑based, and shall clearly distinguish between energy or tradeable energy credits provided from renewable and nonrenewable sources and existing and new sources.

Sec. 5. 10 V.S.A. § 212(6) is amended to read:

(6)  “Eligible facility” or “eligible project” means any industrial, commercial, or agricultural enterprise or endeavor approved by the authority that meets the criteria established in the Vermont sustainable jobs strategy adopted by the governor under section 280b of this title, including land and rights in land, air, or water, buildings, structures, machinery, and equipment of such eligible facilities or eligible projects, except that an eligible facility or project shall not include the portion of an enterprise or endeavor relating to the sale of goods at retail where such goods are manufactured primarily out of state, and except further that an eligible facility or project shall not include the portion of an enterprise or endeavor relating to housing.  Such enterprises or endeavors may include:

* * *

(L)  a captive or commercial insurance underwriter, a mortgage, commercial, or consumer credit provider, or an entity engaged in underwriting or brokering services; or

(M)  qualifying Sustainably Priced Energy Enterprise Development (SPEED) resources or nonqualifying SPEED resources, as defined in 30 V.S.A. § 8002; or

(N)  any combination of the foregoing activities, uses, or purposes. An eligible facility may include structures, appurtenances incidental to the foregoing such as utility lines, storage accommodations, offices, dependent care facilities, or transportation facilities.

* * * II.  Distributed Generation and Energy Efficiency * * *

* * * Combined heat and power and efficiency utility cap  * * *

Sec. 6.  30 V.S.A. § 209(d) and (e) are amended to read:

(d)(1)  The public service department, any entity appointed by the board under subdivision (2) of this subsection, all gas and electric utility companies, and the board upon its own motion, are encouraged to propose, develop, solicit, and monitor energy efficiency and conservation programs and measures, including appropriate combined heat and power systems that result in the conservation and efficient use of energy and meet the applicable agency of natural resources’ air quality standards.  Such programs and measures, and their implementation, may be approved by the board if it determines they will be beneficial to the ratepayers of the companies after such notice and hearings as the board may require by order or by rule.

(2)  In place of utility-specific programs developed pursuant to section 218c of this title, the board may, after notice and opportunity for hearing, provide for the development, implementation, and monitoring of gas and electric energy efficiency and conservation programs and measures including programs and measures delivered in multiple service territories, by one or more entities appointed by the board for these purposes.  The board may include appropriate combined heat and power systems that result in the conservation and efficient use of energy and meet the applicable agency of natural resources’ air quality standards.  The board may specify that the implementation of these programs and measures satisfies a utility’s corresponding obligations, in whole or in part, under section 218c of this title and under any prior orders of the board.

* * *

(4)  The charge established by the board pursuant to subdivision (3) of this subsection shall not exceed the amount needed to provide $17,500,000.00 to support all energy efficiency programs for Vermonters authorized by the board by rule or order pursuant to subdivision (2) of this subsection in any fiscal year. No more than $17,500,000.00 of financial support for energy efficiency programs for Vermonters shall be authorized by the board by rule or order pursuant to subdivision (2) of this subsection in any fiscal year be in an amount determined by the board by rule or order that is consistent with the principles of least cost integrated planning as defined in section 218c of this title.  As circumstances and programs evolve, the amount of the charge shall be reviewed for unrealized energy efficiency potential and shall be adjusted as necessary in order to realize all reasonably available, cost-effective energy efficiency savings.  In setting the amount of the charge and its allocation, the board shall determine an appropriate balance among the following objectives:  providing efficiency and conservation as a part of a comprehensive resource supply strategy; providing the opportunity for all Vermonters to participate in efficiency and conservation programs; and the value of targeting efficiency and conservation efforts to locations, markets or customers where they may provide the greatest value.  The board, by rule or order, shall establish a process by which a customer may apply to the board for an exemption from some or all of the charges assessed under this subdivision.  The board shall establish criteria by which these applications shall be measured.  Any such exemption shall extend for a period of time not to exceed one year.  In addition, the board may authorize exemptions only if, at a minimum, a customer demonstrates that, during the preceding year, it implemented an extraordinary amount of cost‑effective energy efficiency at the customer’s own expense or incurred extraordinary costs on those measures and the customer did not and will not receive reimbursement for those measures from the entity designated by the board under this section.

(e)  The board shall:

* * *

(14)  Consider the impact on retail electric rates of programs delivered under subsection (d) of this section.

Sec. 7.  STANDARDS FOR INTERCONNECTION OF DISTRIBUTED

             GENERATION

On or before September 1, 2006, the public service board shall establish by rule or order standard provisions, including applicable fees that are required to cover the total cost of interconnection to be paid by the qualified distributed generator, for agreements providing for interconnection between the facilities of a retail electricity provider under the jurisdiction of the board and the facilities of a qualified distributed generator.  The applicable safety, power quality, and interconnection requirement rules adopted by the board pursuant to section 219a of Title 30 shall be utilized in addition to any other requirements necessary to protect public safety and system reliability.  The board may provide that such interconnection agreements may be conditioned in instances where interconnection would cause electric instability on the facilities of the local distribution grid.  For the purposes of this section, “qualified distributed generator” means an electrical generator that has a capacity of less than 50 megawatts or a lower megawatt capacity established by the board in order to avoid federal preemption, and that is either:

(1)  a renewable generator as defined in section 8002 of Title 30; or

(2)  a generator that is part of a combined heat and power application providing an overall energy conversion efficiency of 65 percent or greater.

* * * III.  Transmission and Distribution * * *

* * * Regulatory policy * * *

Sec. 8.  ADVOCACY FOR REGIONAL ELECTRICITY RELIABILITY

             POLICY

It shall be the policy of the state of Vermont, in negotiations and policy‑making at the New England Independent System Operator, in proceedings before the Federal Energy Regulatory Commission, and in all other relevant venues, to support an efficient reliability policy, as follows:

(1)  When cost recovery is sought through regionwide regulated rates or uplift tariffs for power system reliability improvements, all available resources – transmission, strategic generation, targeted energy efficiency, and demand response resources – should be treated comparably in analysis, planning, and access to funding.

(2)  A principal criterion for approving and selecting a solution should be whether it is the least-cost solution to a system need on a total cost basis.

(3)  Ratepayers should not be required to pay for system upgrades in other states that do not meet these least-cost and resource-neutral standards.

(4)  For reliability-related projects in Vermont, subject to the review of the public service board, regional financial support should be sought and made available for transmission and for distributed resource alternatives to transmission on a resource-neutral basis.

(5)  The public service department, public service board, and attorney general shall advocate for these policies in negotiations and appropriate proceedings before the New England Independent System Operator, the New England Regional Transmission Operator, the Federal Energy Regulatory Commission, and all other appropriate regional and national forums.  This subdivision shall not be construed to compel litigation or to preclude settlements that represent a reasonable advance to these policies.

(6)  In addressing reliability problems for the state’s electric system, Vermont retail electricity providers and transmission companies shall advocate for regional cost support for the least cost solution with equal consideration and treatment of all available resources, including transmission, strategic distributed generation, targeted energy efficiency, and demand response resources on a total cost basis.  This subdivision shall not be construed to compel litigation or to preclude settlements that represent a reasonable advance to these policies.

* * * Transmission and Distribution Planning * * *

Sec. 9.  30 V.S.A. § 218c is amended to read:

§ 218c.  LEAST COST INTEGRATED PLANNING

* * *

(d)(1)  Least cost transmission services shall be provided in accordance with this subsection.  Not later than July 1, 2006, any electric company that does not have a designated retail service territory and that owns or operates electric transmission facilities within the state of Vermont, in conjunction with any other electric companies that own or operate these facilities, jointly shall prepare and file with the department of public service and the public service board a transmission system plan that looks forward for a period of at least ten years.  A copy of the plan shall be filed with each of the following:  the house committees on commerce and on natural resources and energy and the senate committees on finance and on natural resources and energy.  The objective of the plan shall be to identify the potential need for transmission system improvements as early as possible, in order to allow sufficient time to plan and implement more cost‑effective nontransmission alternatives to meet reliability needs, wherever feasible. The plan shall:

(A)  identify existing and potential transmission system reliability deficiencies by location within Vermont;

(B)  estimate the date, and identify the local or regional load levels and other likely system conditions at which these reliability deficiencies, in the absence of further action, would likely occur;

(C)  describe the likely manner of resolving the identified deficiencies through transmission system improvements;

(D)  estimate the likely costs of these improvements;

(E)  identify potential obstacles to the realization of these improvements; and

(F)  identify the demand or supply parameters that generation, demand response, energy efficiency or other nontransmission strategies would need to address to resolve the reliability deficiencies identified.

(2)  Prior to the adoption of any transmission system plan, a utility preparing a plan shall host at least two public meetings at which it shall present a draft of the plan and facilitate a public discussion to identify and evaluate nontransmission alternatives.  The meetings shall be at separate locations within the state, in proximity to the transmission facilities involved or as otherwise required by the board, and each shall be noticed by at least two advertisements, each occurring between one and three weeks prior to the meetings, in newspapers having general circulation within the state and within the municipalities in which the meetings are to be held.  Copies of the notices shall be provided to the public service board, the department of public service, any entity appointed by the public service board pursuant to subdivision 209(d)(2) of this title, the agency of natural resources, the division for historic preservation, the department of health, the scenery preservation council, the agency of transportation, the attorney general, the chair of each regional planning commission, each retail electricity provider within the state, and any public interest group that requests, or has made a standing request for, a copy of the notice.  A verbatim transcript of the meetings shall be prepared by the utility preparing the plan, shall be filed with the public service board and the department of public service, and shall be provided at cost to any person requesting it.  The plan shall contain a discussion of the principal contentions made at the meetings by members of the public, by any state agency, and by any utility.

(3)  Prior to the issuance of the transmission plan or any revision of the plan, the utility preparing the plan shall offer to meet with each retail electricity provider within the state, with any entity appointed by the public service board pursuant to subdivision 209(d)(2) of this title, and with the department of public service, for the purpose of exchanging information that may be relevant to the development of the plan.

(4)(A)  A transmission system plan shall be revised:

(i)  within nine months of a request to do so made by either the public service board or the department of public service; and

(ii)  in any case, at intervals of not more than three years.

(B)  If more than 18 months shall have elapsed between the adoption of any version of the plan and the next revision of the plan, or since the last public hearing to address a proposed revision of the plan and facilitate a public discussion that identifies and evaluates nontransmission alternatives, the utility preparing the plan, prior to issuing the next revision, shall host public meetings as provided in subdivision (2) of this subsection, and the revision shall contain a discussion of the principal contentions made at the meetings by members of the public, by any state agency, and by any retail electricity provider.

(5)  On the basis of information contained in a transmission system plan, obtained through meetings held pursuant to subdivision (2) of this subsection, or obtained otherwise, the public service board and the department of public service shall use their powers under this title to encourage and facilitate the resolution of reliability deficiencies through nontransmission alternatives, where those alternatives would better serve the public good.  The public service board, upon such notice and hearings as are otherwise required under this title, may enter such orders as it deems necessary to encourage, facilitate or require the resolution of reliability deficiencies in a manner that it determines will best promote the public good.

(6)  The retail electricity providers in affected areas shall incorporate the most recently filed transmission plan in their individual least cost integrated planning processes, and shall cooperate as necessary to develop and implement joint least cost solutions to address the reliability deficiencies identified in the transmission plan.

(7)  Before the department of public service takes a position before the board concerning the construction of new transmission or a transmission upgrade with significant land use ramifications, the department shall hold one or more public meetings with the legislative bodies or their designees of each town, village, or city that the transmission lines cross, and shall engage in a discussion with the members of those bodies or their designees and the interested public as to the department’s role as public advocate.

Sec. 10.  INVESTIGATION OF REGIONAL POTENTIAL OF ENERGY                            CONSERVATION AND EFFICIENCY PROGRAMS

(a)  On or before January 1, 2006, the department of public service shall investigate the following issues and report to the House Committees on Natural Resources and Energy and on Commerce, and to the Senate Committees on Finance, and on Natural Resources and Energy:

(1)  The extent to which an aggressive region-wide implementation of energy efficiency and renewable energy programs might affect the price of spot market power in the New England ISO through the effect of such programs on bid prices, where the clearing price of the electric market is reduced due to reduced electric demand.  The extent to which these measures could affect the total cost of power for Vermont and New England.  The extent to which it is possible to use these programs to mitigate risk associated with fossil fuel price variability.

(2)  The potential for such an aggressive regional approach to be integrated with and complement distribution and transmission least cost planning, as well as regional efforts to reduce greenhouse gas emissions and other air pollution.

(3)  The obstacles and opportunities for development of an effective system of Energy Efficiency Credits analogous to the tradeable Renewable Energy Credits for which there is now a regional market.

(4)  A comparison of the policy options facing Vermont if there is a trading system for carbon emission allowances for electric power in New England.

(5)  The options being considered by Vermont’s retail electricity providers and transmission companies for meeting Vermont’s electric supply requirements in light of the expiration of long‑term supply contracts.

(b)  The analysis and report required in this section may be included in other studies and efforts by the department, including revisions to the Twenty Year Electric Plan, a new Comprehensive Energy Plan, studies on the extent of cost-effective energy efficiency potential in Vermont, or the Biennial Report to the Legislature.

* * * IV.  Regulatory Policy: performance based ratemaking * * *

* * * Performance based ratemaking * * *

Sec. 11.  30 V.S.A. § 218d(a) is amended to read:

(a)  Notwithstanding section 218 and sections 225-227 of this title, upon petition of an electric or natural gas company, upon request of the department of public service, or on its own initiative, the public service board may, after opportunity for hearing, approve alternative forms of regulation for an electric or natural gas company; provided, however, in the case of a municipal plant or department formed under local charter or chapter 79 of this title or an electric cooperative formed under chapter 81 of this title, any alternative forms of regulation approved by the board shall also be approved by a majority of the voters of a municipality or cooperative voting upon the question at a duly warned annual or special meeting held for that purpose.  Before doing so, the board shall find that the proposed form of alternative regulation will:

(1)  establish a system of regulation in which such companies have clear incentives to provide least-cost energy service to their customers;

(2)  provide just and reasonable rates for service to all classes of customers;

(3)  deliver safe and reliable service;

(4)  offer incentives for innovations and improved performance that advance state energy policy such as increased increasing reliance on Vermont‑based renewable energy and decreasing the extent to which the financial success of distribution utilities between rate cases is linked to increased sales to end use customers and may be threatened by decreases in those sales;

(5)  promote improved quality of service, reliability, and service choices;

(6)  encourage innovation in the provision of service;

(7)  establish a reasonably balanced system of risks and rewards that encourages the company to operate as efficiently as possible using sound management practices; and

(8)  provide a reasonable opportunity, under sound and economical management, to earn a fair rate of return, provided such opportunity must be consistent with flexible design of alternative regulation and with the inclusion of effective financial incentives in such alternatives.

* * * V.  Efficiency Standards * * *

* * * Commercial Building Energy Standards * * *

Sec. 12.  COMMERCIAL BUILDING ENERGY STANDARDS

(a)  The department of public service is directed to develop a proposal for statewide commercial building energy standards (CBES), after consulting with the following:

(1)  Efficiency Vermont;

(2)  Burlington Electric Department;

(3)  Vermont Gas Systems;

(4)  the commercial building design community;

(5)  the commercial building development and construction community; and

(6)  other interested persons.

(b)  No later than January 31, 2006, the commissioner of public service shall recommend to the legislature guidelines for the content of a statewide commercial building energy standard.  The standard will recommend energy efficiency standards for commercial building systems including:

(1)  Lighting;

(2)  Heating, ventilation, and air conditioning (HVAC) equipment;

(3)  Building envelope (wall, roof and floor insulation, windows, doors, cellar);

(4)  Motors;

(5)  Transformers;

(6)  Controls;

(7)  Water usage and hot water.

(c)  These guidelines shall be consistent with the requirements of federal law that all states have a statewide commercial energy code that meets or exceeds the efficiency level of ASHRAE 90.1-2001. 

(d)  The commissioner will work closely with the International Code Council (ICC) and the New Buildings Institute (NBI), as well as other code support agencies, to develop the code in a way that is appropriate for the state.

Sec. 13.  PUBLIC SERVICE BOARD REPORTS

(a)  By no later than January 15, 2007, the public service board shall report to the general assembly on the status of implementation of 30 V.S.A. § 218d(a), relating to alternative forms of regulation.  The report shall be filed with the House Committees on Commerce and on Natural Resources and Energy and the Senate Committees on Finance and on Natural Resources and Energy.  It shall include an explanation of the results of any alternative form of regulation approved by the board, and if no such form has been approved, an explanation of why no such form has been approved.

(b)  The public service board by January 15, 2007, and biennially thereafter up through January 15, 2013, shall report to the house committees on commerce and on natural resources and energy and the senate committees on finance and on natural resources and energy with its recommendations on how the state might best continue to meet the goals established in 30 V.S.A. § 8001, including whether the state should meet its load growth over the succeeding 10 years, up through 2023, by a continuation of the SPEED program.

Sec. 14.  30 V.S.A. § 3007 is amended to read:

§ 3007.  MEMBERS, QUALIFICATIONS

Each incorporator of a cooperative shall be a member thereof, but no other person may become a member thereof unless such other person uses electric energy or other services, goods, or products furnished by the cooperative when they are made available through its electric distribution facilities, or a person may become a member by purchasing and paying the cooperative for renewable energy certificates or other environmental attributes associated with the generation of electricity.  A member of a cooperative who ceases to use electric energy shall cease to be a member if he or she does not use electric energy supplied by the cooperative within six months after it is made available, or if electric energy is not made available by the cooperative within two years after he or she becomes a member or some lesser period as the bylaws of the cooperative may provide.  Two or more owners or occupants of property served by a cooperative may hold a joint membership in a cooperative.  Membership in a cooperative shall not be transferable, except as provided by the bylaws.  The bylaws may prescribe additional qualifications and limitations in respect to membership.

Sec. 15.  DEPARTMENT OF PUBLIC SERVICE AND BOARD REPORTS

(a)  By January 15, 2006, the department of public service shall report to the house and senate committees on natural resources and energy, the house committee on commerce, and the senate committee on finance with respect to recommended procedures and efforts and initiatives to date concerning the involvement of the public in the development and siting of wind energy facilities.

(b)  The department of public service is directed to study and make recommendations on the feasibility of establishing grant programs for new renewable generation systems on farms.

(c)  The public service board and the department of public service shall report to the house and senate committees on natural resources and energy, the house committees on commerce and on ways and means, and the senate committee on finance by no later than January 15, 2006 and again by no later than January 15, 2007 with respect to the net revenue loss and the net revenue gain to Vermont ratepayers, utilities, and Vermont-based generators as a result of any tariff relating to locational generation capacity; and the options available to mitigate the cost impacts of any such tariff.

The committee further recommends that upon passage, the title of the bill be amended to read:  “AN ACT RELATING TO RENEWABLE ENERGY, EFFICIENCY, TRANSMISSION, AND VERMONT’S ENERGY FUTURE”

Committee on the part of                  Committee on the part of

the Senate                                         the House

Sen. Virginia Lyons                          Rep. Robert Dostis

Sen. Mark MacDonald                    Rep. Joyce Errecart

Sen. Ann Cummings                          Rep. Tony Klein

Pending the question, Shall the House adopt the committee of conference report? Rep. Sunderland of Rutland Town 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 adopt the committee of conference report?  was decided in the affirmative.  Yeas, 112.  Nays, 21.

Those who voted in the affirmative are:


Adams of Hartland

Allaire of Rutland City

Ancel of Calais

Aswad of Burlington

Atkins of Winooski

Audette of S. Burlington

Barnard of Richmond

Bohi of Hartford

Bostic of St. Johnsbury

Botzow of Pownal

Branagan of Georgia

Brooks of Montpelier

Canfield of Fair Haven

Chen of Mendon

Clark of St. Johnsbury

Clark of Vergennes

Clarkson of Woodstock

Condon of Colchester

Copeland-Hanzas of Bradford

Corcoran of Bennington

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

DePoy of Rutland City

Donahue of Northfield

Dostis of Waterbury

Dowland of Holland

Edwards of Brattleboro

Emmons of Springfield

Errecart of Shelburne

Evans of Essex

Fallar of Tinmouth

Fisher of Lincoln

Frank of Underhill

French of Randolph

Grad of Moretown

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Hudson of Lyndon

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Kainen of Hartford

Keenan of St. Albans City

Kennedy of Chelsea

Keogh of Burlington

Kilmartin of Newport City

Kiss of Burlington

Kitzmiller of Montpelier

Klein of East Montpelier

Koch of Barre Town

Komline of Dorset

Krawczyk of Bennington

Kupersmith of S. Burlington

Larson of Burlington

Lawrence of Lyndon

Leriche of Hardwick

Lippert of Hinesburg

Livingston of Manchester

Maier of Middlebury

Marek of Newfane

Marron of Stowe

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

Morrissey of Bennington

Myers of Essex

Nease of Johnson

Niquette of Colchester

Nuovo of Middlebury

Obuchowski of Rockingham

O'Donnell of Vernon

Orr of Charlotte

Parent of St. Albans City

Partridge of Windham

Perry of Richford

Peterson of Williston

Potter of Clarendon

Pugh of S. Burlington

Randall of Troy

Reese of Pomfret

Rusten of Halifax

Schiavone of Shelburne

Seibert of Norwich

Severance of Colchester

Shand of Weathersfield

Sharpe of Bristol

Smith of New Haven

Sunderland of Rutland Town

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Valliere of Barre City

Westman of Cambridge

Wright of Burlington

Young of Orwell

Zuckerman of Burlington


Those who voted in the negative are:


Allard of St. Albans Town

Baker of West Rutland

Bartlett of Dover

Donaghy of Poultney

Endres of Milton

Hube of Londonderry

Larocque of Barnet

Larrabee of Danville

LaVoie of Swanton

Louras of Rutland City

Marcotte of Coventry

McAllister of Highgate

Metzger of Milton

Morley of Barton

Nitka of Ludlow

Otterman of Topsham

Peaslee of Guildhall

Rodgers of Glover

Shaw of Derby

Winters of Swanton

Winters of Williamstown


 

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


Brennan of Colchester

Donovan of Burlington

Dunsmore of Georgia

Flory of Pittsford

Gervais of Enosburg

Helm of Castleton

Houston of Ferrisburgh

Howrigan of Fairfield

Johnson of Canaan

Lorber of Burlington

Malcolm of Pawlet

Miller of Elmore

Pellett of Chester

Pillsbury of Brattleboro

Smith of Morristown

Wood of Brandon


 

Rules Suspended; Senate Proposal of Amendment Concurred in

J.R.H. 40

Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town,  the rules were suspended and Joint resolution, entitled

Joint resolution authorizing the commissioner of forests, parks and recreation to sell designated state lands;

Was taken up for immediate consideration.

     The Senate proposed to the House to amend the resolution by striking out all after the title and inserting in lieu thereof the following:

Whereas, pursuant to 10 V.S.A. § 2606(b), subject to the approval of the general assembly, which may be by resolution, the commissioner of forests, parks and recreation may exchange or lease lands under the department’s jurisdiction, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly authorizes the commissioner of forests, parks and recreation to enter into the following transactions, subject to the stated conditions:

First:  In the town of Stowe, to sell or exchange a parcel of up to 2.5 acres of the Blush Hill Block of the Mt. Mansfield State Forest that is part of the so-called “Moscow Shop” property located adjacent to the town’s vehicle storage facilities in Moscow.  The parcel is currently under license to the town for use as a training site for public safety personnel.  The conveyance shall be limited to the open and developed portion of the Moscow Shop property and shall not include the riparian areas adjacent to Miller Brook and the Little River.  The state’s consideration for this property shall be based on the property’s fair market value as determined by an independent appraiser.  Any property offered by the town in exchange for the parcel shall be subject to the approval of the secretary of natural resources and shall have an appraised fair market value equal to or greater than the appraised fair market value of the Moscow Shop parcel.  Survey and appraisal costs for both the properties shall be evenly divided between the town and the department.  Notwithstanding the provisions of 29 V.S.A. § 166, the net proceeds of this sale shall be deposited with the state treasurer for placement in the agency of natural resources’ land and facilities trust fund.

Second:  In the town of Westmore, in the Willoughby State Forest, to issue a request for proposals (“RFP”) for the purpose of leasing for a term of up to 20 years the so-called Cheney House and not more than 5 acres surrounding the house for uses such as a camping or an educational facility to promote use of the facility by Vermont citizens and by visitors from outside of Vermont.  The department shall report to the house and senate committees on institutions regarding responses received to its RFP and is authorized to enter into a contract to lease the Cheney House only after obtaining the approval of these committees; and be it further

Resolved:  That if, pursuant to 30 V.S.A. § 248, the public service board finds that an expansion and relocation of the transmission line between the towns of Duxbury and Stowe will promote the general good of the state, and if the board further finds that rerouting a portion of the proposed line and the existing line to run behind existing homes in Waterbury Center immediately to the north of Waterbury Reservoir in a manner that would require a new right-of-way through state-owned real property at that location will also promote the general good of the state and not result in undue adverse impacts, then, notwithstanding 10 V.S.A. § 2606(b), the commissioner of forests, parks and recreation is directed to convey to the company or companies that will undertake such relocation a right-of-way sufficient to allow the relocation in exchange for abandonment of the section of the existing right-of-way and the removal of the existing line on that right-of-way within state-owned real property.  In considering whether to authorize such rerouting of the line, the board shall give due consideration to the recommendations of the commissioner of forests, parks and recreation.  The right-of-way, if approved by the public service board, shall be located with the approval of the commissioner of forests, parks and recreation.

     Which proposal of amendment was considered and concurred in.

Bills Messaged to Senate Forthwith

On motion of Rep. Sunderland of Rutland Town, the rules were suspended and the following bills were ordered messaged to the Senate forthwith:

H. 540

An act relating to agricultural and forest land use value program;

S. 52

An act relating to renewable energy portfolio standards, appliance efficiency standards, and distributed electricity;

S. 174

An act relating to home health agencies;

Rules Suspended; Report of Committee of Conference Adopted

H. 524

Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town,  the rules were suspended and House bill, entitled

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

Was taken up for immediate consideration.

Rep. Peterson of Williston in Chair.

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill and respectfully reports that it has met and considered the same and recommends that the bill be amended by striking all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  FINDINGS

The general assembly hereby finds that:

(1)  Costs.  Health care costs are rising at an unsustainable rate, causing hardships to individuals, families, businesses, taxpayers, and public institutions and making the need for comprehensive health care reform urgent.

(A)  Health care costs have risen an average of 9-10 percent per year over the past 30-40 years, with the rate rising to 10-11 percent in more recent years.  These figures are well above the Consumer Price Index and, moreover, exceed by far the state’s capacity to pay for health care costs as measured against our gross state product and personal income.  For example, between 1996 and 2002, health care spending in Vermont rose 63 percent, while personal income rose 41 percent and the gross state product rose 35 percent.

(B)  In 2006, it is projected that Vermont will spend $3.8 billion on health care.  That amount has doubled since 1998.  If the trend continues, health care spending will double again in eight years.  In other words, for every year Vermont fails to address the health care crisis, health care costs will rise by at least another $350 million.

(C)  Over one-half of bankruptcies nationally are associated with high medical expenses.  In approximately three-quarters of health-related bankruptcies, the patient had insurance.

(D)  In 2005, the state of Vermont will spend an estimated $5,700.00 per capita on health care, more than any nation -- except the United States itself -- when measured as a proportion of gross domestic product. 

(E)  Vermont’s health care spending was 14.7 percent of the gross state product in 2003.

(F)  The cost of health care has a strong and negative impact on the ability of Vermont businesses and employers to compete in national and international markets.

(2)  Access.  There is a large and increasing number of people who have no health insurance or who are underinsured.  For this growing population, health care is unaffordable and, as a result, often not received in the most timely and effective manner.  The existing disparities in coverage result in an irrational rationing of available health care services.

(A)  Over 60,000 Vermonters have no health insurance.  Lack of insurance is associated with an increased rate of illness and a shorter life expectancy.

(B)  Premium cost increases have contributed to the growing rate of underinsurance, with more and more Vermonters purchasing high‑deductible and less comprehensive plans.

(C)  The costs of health services provided to individuals who are unable to pay are shifted to others.  Of the $2.1 billion charged by hospitals in 2005, $88 million was not collected as follows:  $37 million in charity care and $51 million in bad debt.  Those who bear the burden of this cost shift have an increasingly difficult time affording their own health care costs, including premiums.

(3)  Inequity in financing.  The current financing of health care is complex, fragmented, and inequitable, resulting in inefficiencies and placing administrative burdens on health care professionals, in particular. 

(A)  The financing is accomplished through a patchwork of public programs, private sector employer-sponsored self-insurance, commercial insurance, and individual payers. 

(B)  There are two fundamental inequities in the insurance-based financing system:  (i)  premiums are not based on ability to pay, and (ii) deductibles and coinsurance place a financial burden on those with serious illness.

(C)  In general, costs fall disproportionately on those with serious health conditions and those with moderate and lower incomes.

(D)  At any particular point in time, approximately 10 percent of the Vermont population generates approximately 70 percent of all health care spending.

(4)  Quality.  Although the quality of health care services in Vermont is generally very good, there is a need to improve quality, efficiency, and safety.  Improvements in health care quality will result in improved health and reduced costs.  The existing payment system, because it is based on the amount of care provided, does not tie reimbursement to improved health.

(A)  There are an unacceptable number of adverse events attributable to medical errors.  According to the Institute of Medicine report entitled “To Err is Human:  Building a Safer Health System,” nationwide, the right care is given to the right person at the right time only about half the time.

(B)  In addition, our health care infrastructure and services tend to be “disease‑focused” rather than “health-focused,” resulting in missed opportunities for less costly and more effective forms of care.

(5)  Vermont currently does not have a clearly defined, integrated health care “system.”  Fragmentation and disorganization at both the regional and statewide levels lead in some instances to excessive care or inadequate care and create barriers to coordination and accountability among health care professionals, payers, and patients.  In addition, the ability of the system to respond to rapid changes in technology and medical advances and to provide the highest quality of care to the greatest number of people is compromised.

(6)  Federal laws and programs, such as Medicaid, Medicare, and the Employee Retirement Income Security Act of 1974 (ERISA) constrain Vermont’s ability to establish immediately an integrated health care system.  Presently, there are 130,000 Vermonters enrolled in Medicaid, 90,000 in Medicare, and 150,000 in private sector employer-sponsored self-insured plans.  Combined, it is projected that these individuals will account for nearly $2.3 billion of the $3.8 billion Vermont will spend on health care in 2006.

(7)  The largest costs of a medical facility are apportioned between fixed costs, such as buildings and equipment (32 percent), and fairly inflexible costs, such as skilled professional staff (52 percent).  Together, these account for 84 percent of a facility’s costs.

Sec. 2.  GUIDELINES FOR HEALTH CARE REFORM

The general assembly adopts the following guidelines, modeled after the Coalition 21 principles, as a framework for reforming health care in Vermont:

(1)  It is the policy of the state of Vermont to ensure universal access to and coverage for essential health care services for all Vermonters. 

(2)  Health care coverage needs to be comprehensive and continuous. 

(3)  Vermont’s health delivery system must model continuous improvement of health care quality and safety. 

(4)  The financing of health care in Vermont must be sufficient, equitable, fair, and sustainable. 

(5)  Built-in accountability for quality, for cost, for access and for participation must be the hallmark of Vermont’s health care system.

(6)  Vermonters must be engaged, to the best of their ability, to pursue healthy lifestyles, to focus on preventive care and wellness efforts, and to make informed use of all health care services throughout their lives.

Sec. 3.  GOALS OF HEALTH CARE REFORM

Consistent with the adopted guidelines for reforming health care in Vermont, the general assembly adopts the following goals:

(1)  Universal Access.  Vermont policy will reflect that universal access to health care is a public good. By 2009, Vermont shall have an integrated health care system that provides all Vermonters, regardless of their age, employment, economic status, or their town of residency, with access to affordable, high quality health care that is financed in a fair and equitable manner.

(A)  In order to reach this goal, the state shall begin by offering limited benefits and shall expand benefits over time after meeting specified benchmarks. A process will be developed to define the benefits, taking into consideration scientific evidence, available funds, and the values and priorities of Vermonters. 

(B)  The benchmarks shall measure the appropriateness and feasibility of a proposed expansion based on its ability to promote the following:

long-term cost savings, increased access, improved quality and delivery, administrative simplification, fair and equitable financing, financial sustainability, and continuity of coverage.

(2)  Cost Control.  It is imperative that health care costs are brought under control.  Likewise, it is essential that cost containment initiatives address both the financing of health care and also the delivery and quality of health services offered in Vermont.  To ensure financial sustainability of Green Mountain Health, the state is committed to slowing the rate of growth of health care costs to seven percent or less by the year 2010. Strategies for containing costs shall include:

(A)  global budgeting of and global payment to hospitals;

(B)  tort reform;

(C)  increased consumer access to health care price and quality information;

(D)  promotion of self-care and healthy lifestyles;

(E)  enhanced prescription drug initiatives;

(F)  funding of the chronic care initiative;

(G)  investments in health information technology;

(H)  alignment of health care professional reimbursement with best practices and outcomes rather than utilization; and

(I)  development of a long-term strategy for integrating the health care delivery system as well as a strategy for integrating health care policy, planning, and regulation within government.

(3)  High Quality.  Vermont’s health delivery system must model continuous improvement of health care quality and safety.  Vermonters must have the tools and resources necessary to make informed use of all health care services. Health care professionals and facilities should have incentives to provide the best and most appropriate care to Vermonters.  The state should also do it’s part to improve quality and safety by coordinating health care policy, planning and regulation.

(4)  Equitable Financing.  The health care system in Vermont should be financed in a fair and equitable manner.  All Vermonters should have access to health care; all Vermonters should contribute to its cost.

* * * Process for Attaining Goals * * *

Sec. 4.  PROCESS FOR ATTAINING HEALTH CARE GOALS;

             COMMISSION ON HEALTH CARE REFORM

(a)  There is established a commission on health care reform.  The commission, under the direction of co-chairs who shall be appointed by the speaker of the house and president pro tem of the senate, shall monitor health care reform and recommend to the general assembly actions needed to attain the health care goals established by this act.

(b)  Members of the commission shall include four representatives appointed by the speaker of the house, four senators appointed by the committee on committees, and two nonvoting members appointed by the governor. 

(c)  Beginning in the interim of the 2005 legislative session through July 1, 2009, the commission shall:

(1)  oversee and monitor Green Mountain Health, propose to the general assembly as described in section 2022 of Title 33 a package of benefits to be covered under that program and, based on an assessment of whether specified benchmarks have been met, make recommendations to the general assembly on expansions to the program;

(2)  develop administrative and operational recommendations for expansions to Green Mountain Health, including residency requirements; treatment of preexisting conditions; the interrelationship between Green Mountain Health, Medicare, Medicaid and any Medicaid waiver programs; the establishment of a global payment for hospital services covered by Green Mountain Health; and payment mechanisms for out-of-state hospital coverage by Green Mountain Health;

(3)  identify and report emerging trends and behaviors among various participants in the health care system;

(4)  assess the effectiveness of cost-containment and quality of care initiatives;

(5)  establish demonstration or pilot projects designed to contain health care costs and improve the delivery and quality of health care;

(6)  direct the studies established under Sec. 27 of this act;

(7)  assess the feasibility of:

(A)  a publicly financed stop-loss insurance policy for all health plans doing business in Vermont;

(B)  organizational structures that integrate the delivery of care and improve the quality of care at both the regional and state level, including developing a plan for creating an integrated, regional delivery system and developing integrated systems of care as described in Sec. 28 of this act;

(C)  a public health care program that incorporates the health benefits covered under workers’ compensation policies; and

(D)  tort reform consistent with the findings and recommendations of the medical malpractice study authorized under Sec. 292 of No. 122 of the Acts of the 2003 Adj. Sess (2004);

(8)  recommend alternative reimbursement mechanisms for health services that encourage cost effectiveness, improve the quality of care,  increase efficiency, reward primary care practices that prevent chronic illnesses, avoid preventable hospitalizations, and reduce long-term costs to the system, including a global hospital payment to each hospital. For the purposes of this section, “global hospital payment” means an amount to be paid to a hospital by each health insurer, employer or the state for services received at that hospital by all individuals covered by a health benefit plan offered by or through that insurer, employer or the state. A global hospital payment may be accomplished through the use of the purchasing pool established in subchapter 7, of chapter 19 of 33 V.S.A. by requiring all public and private health insurers to pay for hospital services using this method to the extent permitted under federal law, or by another mechanism; and

(9)  receive input and make recommendations, generally, to the house committees on health care and ways and means, the senate committees on health and welfare and finance and the general assembly regarding the

long-term development of policies and programs designed to ensure that, by 2009, Vermont has an integrated system of care that provides all Vermonters access to affordable, high quality health care that is financed in a fair and equitable manner.

(d)  The commission shall select, subject to final approval by the speaker of the house and the president pro tempore of the senate, the services of one

full-time director and such other staff as is needed, and shall receive administrative, fiscal, and legal support from the joint fiscal office and the legislative council.  The director shall have expertise in finance, planning, systems analysis, and processes involving weighing competing interests among parties.  In addition, with the approval of the speaker of the house and the president pro tempore of the senate, the commission may retain the services of one or more consultants or experts knowledgeable in health care systems, financing, or delivery to assist in its work and may request funding from the legislative budget.

(e)  The commission may request analysis from the office of Vermont health access, the department of banking, insurance, securities, and health care administration, and other appropriate agencies.  The agencies shall report to the commission at such times and with such information as the commission determines is necessary to fulfill its oversight responsibilities.

(f)  The commission may meet as needed and members shall be entitled to compensation and expenses as provided in 2 V.S.A. § 406.

(g)  The department of buildings and general services shall provide the commission with office space near the state capitol building in Montpelier for three individuals.

Sec. 5.  SCHEDULE AND BENCHMARKS FOR ATTAINING HEALTH CARE GOALS

(a)  On or before January 1, 2006, based on a proposal made by the office of Vermont health access under section 2022 of Title 33, the commission on health care reform shall recommend to the general assembly a package of primary and preventive care health services to be covered under Green Mountain Health beginning July 1, 2006.

(b)  Prior to making recommendations for expansions to Green Mountain Health as described in subsections (c)-(e) of this section, the commission, based on projections in constant dollars, shall find that:

(1)  financing necessary to support the recommendations is cost-neutral or less expensive with respect to the health care system and will not require more money than is projected to be spent in the existing system by Vermont employers and individuals through taxes, premiums, and out-of-pocket expenses;

(2)  administrative bureaucracy and costs will decrease as a percentage of total health care spending;

(3)  quality of care will be improved; and

(4)  the future costs of health care will be less than projected based on progress in implementing the following cost containment measures:

(A)  global budgeting of and global payment to hospitals;

(B)  tort reform;

(C)  increased consumer access to health care price and quality information;

(D)  promotion of self-care and healthy lifestyles;

(E)  enhanced prescription drug initiatives;

(F)  funding of the chronic care initiative;

(G)  investments in health information technology;

(H)  alignment of health care professional reimbursement with best practices and outcomes rather than utilization; and

(I)  additional federally qualified health center’s (FQHC) or FQHC look-alikes.

(c)  On or before January 1, 2007, provided the commission determines that the conditions and benchmarks established under this section are met, the commission shall recommend to the general assembly a plan to make primary and preventive care, or select primary or preventive care health services available to all Vermonters under Green Mountain Health beginning July 1, 2007.

(d)  On or before January 1, 2008, provided the commission determines that the conditions and benchmarks established under this section are met, the commission shall recommend to the general assembly a plan to make hospital care available to all Vermonters under Green Mountain Health beginning October 1, 2008.

(e)  On or before January 1, 2009, provided the commission determines that the conditions and benchmarks established under this section are met, the commission shall recommend to the general assembly a plan to make a minimum common benefit available to all Vermonters under Green Mountain Health beginning July 1, 2009.

(f)  Recommendations by the commission shall be based on data received or proposals made by the office of Vermont health access and the department of banking, insurance, securities, and health care administration as well as on any other relevant public input received by the commission, including all studies established under this act.

(g)  Recommendations by the commission to the general assembly shall be assessed in terms of cost savings; increased access; improvements in quality and delivery; administrative simplification; fairness and equity in financing; continuity of coverage; and financial sustainability.

Sec. 5a.  PUBLIC ENGAGEMENT PROCESS

(a)  In recognition of the importance of public engagement, the house committee on health care and the senate committee on health and welfare shall have six public hearings during the interim of the 2005 legislative session to solicit input from citizens, employers, hospitals, health care professionals, insurers, other stakeholders, and interested parties about health care.

(b)  Throughout the interim, the commission on health care reform at the request of the chairs of the committees shall brief the committees on the commission’s activities and recommendations to date.

(c)  For attendance at meetings, committee members shall be entitled to compensation and expenses as provided in 2 V.S.A. § 406.

* * * Global Hospital Budgets * * *

Sec. 6.  18 V.S.A. § 9456 is amended to read:

§ 9456.  BUDGET REVIEW

(a)  The commissioner shall conduct reviews of each hospital’s proposed budget based on the information provided pursuant to this subchapter, and in accordance with a schedule established by the commissioner.

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

(1)  review utilization information;

(2)  consider the goals and recommendations of the health resource allocation plan;

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

(4)  consider any reports from professional review organizations;

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

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

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

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

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

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

(1)  be consistent with the health resource allocation plan;

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

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

(4)  reflect budget performances for prior years;

(5)  include a finding that the analysis provided in subdivision (b)(10) of this section is a reasonable methodology for reflecting a reduction in net revenues for non-Medicaid payers;

(6)  consider the unified health care budget under section 9406 of this title applicable to hospitals;

(7)  include any physician’s practices owned or operated by the hospital;

(8)  include all revenue received by hospitals; and

(9)  include any charity care plan offered by the hospital.

(d)  For hospital fiscal year 2007 and thereafter, each hospital’s budget shall serve as a spending cap within which hospital costs are controlled, resources directed, and quality and access assured.  The commissioner shall establish the annual rate of growth of each hospital’s costs, taking into consideration utilization rates and any other relevant information.  The rate of growth established for each hospital shall ensure that the total annual rate of growth for statewide hospital costs is not greater than the Consumer Price Index plus the rate of growth of the gross state product.

(d)(e)  Annually, the commissioner shall establish a budget for each hospital by September 15 followed by a written decision by October 1.  Each hospital shall operate within the budget established under this section.

(e)(f)  The commissioner may establish, by rule, a process to define, on an annual basis, criteria for hospitals to meet, such as utilization and inflation benchmarks.  The rule shall permit the commissioner to waive one or more of the review processes listed in subsection (b) of this section, but not for more than two years consecutively.  Tertiary teaching hospitals shall not be eligible for a waiver.

(f)(g)  The commissioner may, upon application, adjust a budget or spending cap established under this section upon a showing of need based upon a significant unbudgeted increase in volume, or exceptional or unforeseen circumstances in accordance with the criteria and processes established under section 9405 of this title.  The department may adopt rules for the development of a voluntary three-year hospital budget process to facilitate long-term planning and to moderate variation in utilization.  The rules shall include a process for annual budget adjustment within the three-year period.

(g)(h)  The commissioner may request, and a hospital shall provide, information determined by the commissioner to be necessary to determine whether the hospital is operating within a budget established under this section.

(h)(i)(1)  If a hospital violates a provision of this section, the commissioner may maintain an action in the superior court of the county in which the hospital is located to enjoin, restrain or prevent such violation.

(2)  After notice and an opportunity for hearing, the commissioner may shall impose on a person who knowingly violates a provision of this subchapter, or a rule adopted pursuant to this subchapter, a civil administrative penalty of no more than $40,000.00, or in the case of a continuing violation, a civil administrative penalty of no more than $100,000.00 or one-tenth of one percent of the gross annual revenues of the hospital, whichever is greater.  This subdivision shall not apply to violations of subsection (d) of this section caused by exceptional or unforeseen circumstances.

(3)(A)  The commissioner shall require the officers and directors of a hospital to file under oath, on a form and in a manner prescribed by the commissioner, any information designated by the commissioner and required pursuant to this subchapter.  The authority granted to the commissioner under this subsection is in addition to any other authority granted to the commissioner under law.

(B)  A person who knowingly makes a false statement under oath or who knowingly submits false information under oath to the commissioner or to the public oversight commission or to a hearing officer appointed by the commissioner or who knowingly testifies falsely in any proceeding before the commissioner or the public oversight commission or a hearing officer appointed by the commissioner shall be guilty of perjury and punished as provided in section 2901 of Title 13.

Sec. 7.  FEDERAL WAIVERS

The agency of human services shall request a waiver of any necessary federal requirements from the Centers for Medicaid and Medicare Services to allow the state to negotiate a global, unified payment to each Vermont hospital for all health care services received in a hospital by individuals covered by Medicaid and Medicare. 

* * * Green Mountain Health * * *

Sec. 8.  33 V.S.A. chapter 19, subchapter 6 is added to read:

Subchapter 6.  Green Mountain Health

§ 2020.  POLICY AND PURPOSE

In order to ensure all Vermont residents have access to key health services and all contribute to the financial sustainability of Vermont’s health care system, Green Mountain Health is established to provide uninsured Vermont residents a defined benefit package of primary and preventive care.  Expansions to the program shall be consistent with recommendations by the commission on health care reform approved by the general assembly.

§ 2021.  DEFINITIONS

As used in this subchapter:

(1)  “Benefits” means primary and preventive care health services.

(2)  “Green Mountain Health” means the plan established under this subchapter.

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

(4)  “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.

(5)  “Office” means the office of Vermont health access.

(6)  “Preventive care” means health services that include screening, counseling, treatment, or medication determined by scientific evidence to be effective in preventing or detecting disease and shall include immunizations.

(7)  “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, not limited by problem origin (biological, behavioral, or social), organ system, or diagnosis and shall include prenatal care.  Primary care services include health promotion, preventive care, health maintenance, counseling, patient education, case management, and the diagnosis and treatment of acute and chronic illnesses in a variety of health care settings.

(8)  “Uninsured” means not having health insurance coverage under either a private or public plan, including Medicaid.

(9)  “Vermont resident” means an individual domiciled in Vermont as evidenced by an intent to maintain a principal dwelling place in Vermont indefinitely and to return to Vermont if temporarily absent, coupled with an act or acts consistent with that intent.  The director of the office of Vermont health access shall establish specific criteria to demonstrate residency.

§ 2022.  BENEFITS DEVELOPED; PRIMARY; PREVENTIVE

(a)  Not later than October 1, 2005, the office of Vermont health access shall propose to the commission on health care reform a package of benefits to be provided uninsured Vermont residents under Green Mountain Health, beginning July 1, 2006.  The commission on health care reform shall recommend for approval benefits to the general assembly by January 1, 2006.

(b)  The office shall ensure that a package of primary and preventive care 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 under this section, the office shall:

(1)  engage in a public process designed to respond to Vermonters’ health care values and priorities;

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

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

(4)  consider health care ethics;

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

(6)  consider revenues anticipated to be available to finance Green Mountain Health;

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

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

§ 2023.  BUDGET FOR PACKAGE OF HEALTH SERVICES

(a)  Beginning January 15, 2006, and annually thereafter, the office shall propose to the general assembly a budget for the benefits covered under Green Mountain Health.  The budget shall include recommended expenditures during the next succeeding state fiscal year broken down by health care sector and region and anticipated revenues available to support such expenditures.

(b)  In developing the proposed budget, the office shall consider the payment methods under section 2024 of this title, the negotiated payment amounts under section 2025 of this title, and cost sharing developed under section 2027 of this title.

§ 2024.  PAYMENT METHODOLOGIES FOR HEALTH CARE

           PROFESSIONALS

(a)  By February 1, 2006, the office shall determine by rule pursuant to chapter 25 of Title 3 the type of payment method to be used for each health care sector which provides health services under Green Mountain Health.  The payment methods shall be in alignment with the goals of this chapter and shall encourage cost‑containment, provision of high quality, evidence-based health services in an integrated setting, patient self‑management, and healthy lifestyles.  In developing the payment methods, the department shall consult with health care professionals prior to filing the draft rules for comment.

(b)  The office shall consider the following payment methods:

(1)  capitated payments;

(2)  incentive payments to the health care professionals based on performance standards, which may include evidence-based standard physiological measures, or if the health condition cannot be measured in that manner, a process measure, such as the appropriate frequency of testing or appropriate prescribing of medications;

(3)  fee supplements if necessary to encourage specialized health care professionals to offer a specific, necessary health service which is not available in a specific geographic region;

(4)  fixed annual payments to health care facilities; and

(5)  fee for service.

§ 2025.  PAYMENT AMOUNTS

(a)  The intent of this section is to ensure reasonable payments to health care professionals and not contribute to the shift of costs between the payers of health services by ensuring that the amount paid to health care professionals under Green Mountain Health is not equivalent to the Medicaid rate if that rate is insufficient payment for the health service provided.  The payment amounts should reflect fair reimbursement for the health services provided under Green Mountain Health.

(b)  The office shall negotiate with hospitals, health care professionals, and groups of health care professionals to establish a payment amount for the health services provided by Green Mountain Health.  The amount shall be sufficient to provide reasonable access to health services, provide sufficient payment to health care professionals, and encourage the financial stability of health care professionals.  In determining the payment amount, the office shall consider:

(1)  the actual cost of the health service;

(2)  expected revenues;

(3)  cost containment targets;

(4)  shared costs between affiliated health care professionals.

§ 2026.  ADMINISTRATION

(a)  Green Mountain Health shall be administered by the office or the administrator contracted with under section 903 of Title 22, or, under an open bidding process, the office shall solicit and receive bids from insurance carriers or third party administrators for administration.  The office may consider bids from out‑of‑state entities as well as Vermont entities to administer Green Mountain Health, but may require that the administrative work for Green Mountain Health occur in a location and facility within Vermont.

(b)  Nothing in this subchapter shall require an individual already covered by health insurance to terminate that insurance, enroll in Green Mountain Health, or contribute to the financing of Green Mountain Health.

(c)  Vermonters shall not be billed any additional amount for health services covered by Green Mountain Health, except as provided for as cost sharing in section 2027 of this title.

(d)  The office or plan administrator shall make available the necessary information, forms, and billing procedures to health care professionals to ensure payment for health services covered under Green Mountain Health.  The office or plan administrator shall use a single, uniform, simplified form to determine eligibility for Medicaid, any Medicaid waiver program, any state‑funded pharmacy program, and Green Mountain Health to ensure that any individual eligible for these programs has the opportunity to enroll.  The office shall provide coverage for health services up to three months prior to the date of application for Medicaid, any Medicaid waiver program, or the state pharmacy programs.

(e)  An individual aggrieved by an adverse decision of the office or plan administrator may appeal to the human services board established under section 3090 of Title 3.

§ 2027.  COST SHARING; WELLNESS DISCOUNT

(a)  As part of the office’s budget, the office shall propose to the general assembly reasonable sliding‑scale deductibles, co-payments, or other cost‑sharing amounts applicable to Green Mountain Health.  The cost-sharing amounts shall not apply to preventive health services covered by Green Mountain Health.

(b)  The office may include also financial or other incentives applicable to Green Mountain Health to encourage healthy lifestyles and patient self‑management.  In particular, the office may establish discounts, rebates, or modifications of applicable cost-sharing amounts in return for an individual’s adherence to programs of health promotion and disease prevention consistent with federal regulations relating to wellness.  If such incentives are included, the office shall adopt by rule standards consistent with the standards and rules adopted under subdivisions 4080a(h)(2)(B) and (C) of Title 8.

* * * Green Mountain Health Financing * * *

Sec. 8a.  32 V.S.A. chapter 151, subchapter 4A is added to read:

Subchapter 4A.  Green Mountain Health Effort Tax

§ 5848.  EMPLOYER HEALTH EFFORT TAX

(a)  There is imposed an employer health effort tax on employers.  The tax shall be equal to:

     (1)  a percentage of the employer’s qualified wages as follows:

     (A)  1.0 percent of the employer’s total qualified wages up to $50,000.00; plus

     (B)  3.0 percent of the employer’s total qualified wages in excess of $50,000.00;                   

(2) reduced by the employer’s health insurance costs, but not reduced below $0.00. 

(b)  For the purposes of this section:

(1)  “Employee” means a person employed full-time or part-time by an employer to perform services in this state.

(2)  “Employer” means a person who is required under subchapter 4 of this chapter to withhold income taxes from payments of income with respect to services; but shall not include the government of the United States or self-employed persons.

(3)  “Health insurance costs” means the amount paid by the employer in the taxable year to provide health care or health insurance or health self-insurance, to its employees in this state and their eligible family members, to the extent deductible by the employer under federal tax law, and includes payments for medical care, prescription drugs, vision care, medical savings accounts, and any other costs to provide health benefits as defined in section 213(d) of the Internal Revenue Code.

(4)  “Qualified wages” means the Medicare Part A wages paid to all employees of the employer during the taxable year.

(5)  “Self-employed person” means the sole proprietor of a business with no employee other than the owner.

(c)  The tax under this section shall be paid in the same manner as the income tax under this chapter and shall be subject to administrative and enforcement provisions of this chapter. 

(d)  Revenues from this tax shall be deposited into the Green Mountain Health trust fund established under 33 V.S.A. § 2028 for the purpose of financing health care coverage under Green Mountain Health, as provided under subchapter 6 of chapter 19 of Title 33.

Sec. 8b.  32 V.S.A. § 5822a is added to read:

§ 5822a.  INDIVIDUAL HEALTH EFFORT TAX

(a)  An individual health effort tax is imposed upon every resident who is subject to income tax under section 5822 of this title.

(b)  The tax shall be in the amount of 1.0 percent of the taxpayer’s federal adjusted gross income for the taxable year, excluding interest on United States government obligations.

(c)  An individual shall be exempt from taxation under this section if the taxpayer and taxpayer’s spouse and eligible dependents were covered by health insurance or government health coverage, other than Green Mountain Health, for at least 274 days in the taxable year.

(d)  The tax shall be paid in the same manner as the personal income tax under this chapter and shall be withheld from the individual’s wages in the same manner as income tax under this chapter, and paid from self-employment income in the same manner as quarterly income tax payments under this chapter; and shall be subject to administrative and enforcement provisions of this chapter.

(e)  Revenues from this tax shall be deposited into the Green Mountain Health trust fund established under 33 V.S.A. § 2028 for the purpose of financing health care coverage under Green Mountain Health, as provided under subchapter 6 of chapter 19 of Title 33. 

Sec. 8c.  IMPLEMENTATION, EFFECTIVE DATE AND REPORT

(a)  The commissioner of banking, insurance, securities, and health care administration and the commissioner of taxes are authorized to adopt rules and regulations necessary to implement the provisions of this act.

(b)  The health care taxes imposed by Secs. 8a and 8b of this act shall apply to taxable years beginning on or after January 1, 2006.

(c)  The commissioner of banking, insurance, securities, and health care administration shall monitor whether persons who enroll in the Green Mountain Health insurance program were formerly covered by health insurance, and whether former insurance was self-paid or paid by an in-state or out-of-state employer.  The commissioner of taxes shall determine whether technical amendments are necessary for implementation of this act and compliance with the Employee Retirement Income Security Act as determined by the commission on health care reform.  The commissioner of taxes shall report his findings to the commission on health care reform by November 15, 2005, and the commissioner of banking, insurance, securities, and health care administration shall report his findings to the commission on health care reform by January 15, 2007.

* * * Green Mountain Health Trust Fund * * *

Sec. 8d.  33 V.S.A. § 2028 is added to read:

§ 2028.  GREEN MOUNTAIN HEALTH TRUST FUND

(a)  The green mountain health trust fund is hereby established in the state treasury for the purpose of establishing a special fund to be the single source to finance health care coverage for beneficiaries of green mountain health as established under this subchapter.

(b)  Into the fund shall be deposited:

(1)  revenue from the employer health effort tax imposed by section 5848 of title 32 and the individual health effort tax imposed by section 5822a of title 32 and;

(2)  transfers or appropriations from the general fund, authorized by the general assembly; and

(3)  the proceeds from grants, donations, contributions, and taxes and any other sources of revenue as may be provided by statute or by rule.

(c)  The fund shall be administered pursuant to subchapter 5 of chapter 7 of Title 32, except that interest earned on the fund and any remaining balance shall be retained in the fund.  The office of Vermont health access shall maintain records indicating the amount of money in the fund at any time.

(d)  All monies received by or generated to the fund shall be used only for the administration and delivery of health care covered through the green mountain health program administered by the office of Vermont health access under this subchapter.

(e)  To the extent permitted under federal law and any Medicaid waiver, including the global commitment Medicaid waiver, the monies received by or generated to the fund shall be matched by federal funds.

* * * Vermont Health Access Trust Fund * * *

Sec. 9.  33 V.S.A. § 1972(d) is amended to read:

(d)  All monies received by or generated to the fund shall be used only for the administration and delivery of health care covered through state health care assistance programs administered by the department of prevention, assistance, transition, and health access office of Vermont health access, including the Medicaid program, the Vermont health access plan program, the Vermont health access plan-pharmacy program, the VScript program, the VScript‑Expanded program, the state children's health insurance program, the General Assistance program, and any other state health care assistance program administered by or through the department.  To the extent permitted under federal law and any Medicaid waiver, including the global commitment Medicaid waiver, the monies received by or generated to the fund shall be matched by federal funds.

* * * Federally Qualified Health Centers * * *

Sec. 10.  FEDERALLY QUALIFIED HEALTH CENTERS (FQHC)

               LOOK-ALIKES; CAPITALIZATION GRANTS; CASE

               MANAGEMENT

Funds appropriated by Sec. XX of No. XX of the Acts of 2005 (H.516) 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, 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.

* * * Captive Medical Liability Insurer * * *

Sec. 11.  MEDICAL LIABILITY CAPTIVE INSURER REQUEST FOR

               PROPOSALS

The secretary of administration or the secretary’s designee shall invite the Vermont Medical Society to discuss with any captive insurance company licensed to insure medical malpractice risk the possibility of offering such coverage in Vermont.  If after such discussions the secretary determines that such an approach is not possible, the secretary shall prepare and publish a request for proposals to prepare a plan, including a feasibility study, for establishing either a captive insurer, a cell captive, or a risk retention group based in Vermont to provide Vermont health professionals with medical malpractice insurance at the lowest possible cost.  The plan shall include recommendations for state participation in order to reduce the cost of the initial capitalization and facilitate the creation of the insurer.  The plan shall be submitted to the general assembly, the House committees on health care and commerce and the Senate committees on health and welfare and finance on or before January 15, 2006.

* * * Apology by Health Care Provider * * *

Sec. 12.  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 potential adverse outcome occurred made by or on behalf of a health care provider, including one that is made in writing, orally, or by conduct, that is provided within 14 days of when the provider knew or should have known of the consequences of the potential adverse outcome, 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 one that is made in writing, orally, or by conduct, that is provided within 14 days of when the provider knew or should have known of the consequences of the potential adverse outcome, 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” 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.

Sec. 13.  [Deleted]

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

Sec. 14.  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 and ensure for the confidentiality of proprietary information.  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.

* * * Healthy Lifestyles Insurance Discount * * *

Sec. 15.  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 not more than 15 percent of the cost of employee-only coverage, provided that the sum of any rate deviation under subdivision (h)(2)(A) of this section plus any premium discount authorized under this subdivision (h)(2)(B) does not exceed 30 percent of the premium;

(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. 16.  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 not more than 15 percent of the cost of employee-only coverage, provided that the sum of any rate deviation under subdivision (h)(2)(A) of this section plus any premium discount authorized under this subdivision (h)(2)(B) does not exceed 30 percent of the premium;

(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. 17.  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. 18.  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.

Sec. 19.  33 V.S.A. § 2005(a)(4) is amended and (d) is added to read:

(4)  The following shall be exempt from disclosure:

* * *

(D)  scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association; and

(E)  unrestricted grants for continuing medical education programs; and

(F)  prescription drug rebates and discounts.

* * *

(d)  Disclosures of unrestricted grants for continuing medical education programs shall be limited to the value, nature, and purpose of the grant and the name of the grantee.  It shall not include disclosure of the individual participants in such a program.

* * * Pharmacy Best Practices and Cost Control Program * * *

Sec. 20.  33 V.S.A. § 1998(a) is amended to read:

§ 1998.  PHARMACY BEST PRACTICES AND COST CONTROL

              PROGRAM ESTABLISHED

(a)  The commissioner of prevention, assistance, transition, and health access director of the office of Vermont health access shall establish and maintain a pharmacy best practices and cost control program designed to reduce the cost of providing prescription drugs, while maintaining high quality in prescription drug therapies.  The program shall include:

(1)  A Use of a statewide preferred list of covered prescription drugs that identifies preferred choices within therapeutic classes for particular diseases and conditions, including generic alternatives and over-the-counter drugs.  The director of the office of Vermont health access shall encourage all health benefit plans in the state to participate in the preferred drug list by inviting the representatives of each health benefit plan providing prescription drug coverage to residents of this state to participate as observers or nonvoting members in the drug utilization review board, and by inviting such plans to use the preferred drug list in connection with the plans’ prescription drug coverage.

(A)  The commissioner and the commissioner of banking, insurance, securities, and health care administration shall implement the preferred drug list as a uniform, statewide preferred drug list by encouraging all health benefit plans in this state to participate in the program.

(B)  The commissioner of human resources shall use the preferred drug list in the state employees health benefit plan only if participation in the program will provide economic and health benefits to the state employees health benefit plan and to beneficiaries of the plan, and only if agreed to through the bargaining process between the state of Vermont and the authorized representatives of the employees of the state of Vermont.  The provisions of this subdivision do not authorize the actuarial pooling of the state employees health benefit plan with any other health benefit plan, unless otherwise agreed to through the bargaining process between the state of Vermont and the authorized representatives of the employees of the state of Vermont.  No later than November 1, 2004, the commissioner of human resources shall report to the health access oversight committee and the senate and house committees on health and welfare on whether use of the preferred drug list in the state employees health benefit plan would, in his or her opinion, provide economic and health benefits to the state employees health benefit plan and to beneficiaries of the plan.

(C)  The commissioner shall encourage all health benefit plans to implement the preferred drug list as a uniform, statewide preferred drug list by inviting the representatives of each health benefit plan providing prescription drug coverage to residents of this state to participate as observers or nonvoting members in the commissioner’s drug utilization review board, and by inviting such plans to use the preferred drug list in connection with the plans’ prescription drug coverage;

(2)  Utilization review procedures, including a prior authorization review process;.

(3)  Any strategy designed to negotiate with pharmaceutical manufacturers on behalf of individuals under the supervision of the department of corrections, the division of mental health, or the department for children and families, individuals receiving coverage for prescription drugs through Medicaid, the Vermont Health Access Program (VHAP), Dr. Dynasaur, VHAP Pharmacy, VScript, VScript-Expanded, Healthy Vermonters, Healthy Vermonters Plus, and workers’ compensation on behalf of the applicable state agency, and any other insurer, employer, or group covered by a collective bargaining agreement, such as teachers or state employees, who elects to participate, to lower the cost of prescription drugs for program participants, including a supplemental rebate program;.

(4)  With input from physicians, pharmacists, private insurers, hospitals, pharmacy benefit managers, and the drug utilization review board, an evidence-based research education program designed to provide information and education on the therapeutic and cost-effective utilization of prescription drugs to physicians, pharmacists, and other health care professionals authorized to prescribe and dispense prescription drugs.  To the extent possible, the program shall inform prescribers about drug marketing that is intended to circumvent competition from generic alternatives.  Details of the program, including the scope of the program and funding recommendations, shall be contained in a report submitted to the health access oversight committee and the senate and house committees on health and welfare no later than January 1, 2005;.  The program shall be implemented no later than July 1, 2005.

(5)  Alternative pricing mechanisms, including consideration of using maximum allowable cost pricing for generic and other prescription drugs;.

(6)  Alternative coverage terms, including consideration of providing coverage of over-the-counter drugs where cost-effective in comparison to prescription drugs, and authorizing coverage of dosages capable of permitting the consumer to split each pill if cost-effective and medically appropriate for the consumer;.

(7)  A simple, uniform prescription form, designed to implement the preferred drug list, and to enable prescribers and consumers to request an exception to the preferred drug list choice with a minimum of cost and time to prescribers, pharmacists and consumers; and.

(8)  Negotiating a contract with the pharmacy benefit manager that would most further the goals of prescription drug price transparency, safety, quality, and cost-effectiveness.  The office shall consider both proprietary and nonprofit pharmacy benefit managers, as well as the feasibility of  a state-run pharmacy benefit manager.

(9)  Providing information on programs offered by pharmaceutical manufacturers that provide prescription drugs for free or reduced prices.

(10)  Creating a plan to encourage Vermonters to use federally qualified health centers (FQHC) and FQHC look-alikes, focusing on participants in the Medicaid and Medicaid waiver pharmacy programs, state employees, individuals under the supervision of corrections, and individuals receiving workers’ compensation benefits if applicable, including contracting with one or more FQHCs or FQHC look-alikes to provide case management or record management services.

(11)  Any other cost containment activity adopted, by rule, by the commissioner director of the office of Vermont health access that is designed to reduce the cost of providing prescription drugs while maintaining high quality in prescription drug therapies.

* * * PBM Regulation * * *

Sec. 21.  18 V.S.A. chapter 221, subchapter 9 is added to read:

Subchapter 9.  Pharmacy Benefit Managers

§ 9471.  DEFINITIONS

As used in this subchapter:

(1)  “Beneficiary” means an individual enrolled in a health plan in which coverage of prescription drugs is administered by a pharmacy benefit manager and includes his or her dependent or other person provided health coverage through that health plan.

(2)  “Health insurer” is defined by subdivision 9402(9) of this title.  As used in this subchapter, the term includes the state of Vermont and any agent or instrumentality of the state that offers, administers, or provides financial support to state government.  It also includes Medicaid, the Vermont health access plan, the VScript pharmaceutical assistance program, and any other public health care assistance program.

(3)  “Health plan” means a health benefit plan offered, administered, or issued by a health insurer doing business in Vermont.

(4)  “Pharmacy benefit management” means an arrangement for the procurement of prescription drugs at a negotiated rate for dispensation within this state to beneficiaries, the administration or management of prescription drug benefits provided by a health plan for the benefit of beneficiaries, or any of the following services provided with regard to the administration of pharmacy benefits:

(A)  mail service pharmacy;

(B)  claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to beneficiaries;

(C)  clinical formulary development and management services;

(D)  rebate contracting and administration;

(E)  certain patient compliance, therapeutic intervention, and generic substitution programs; and

(F)  disease management programs.

(5)  “Pharmacy benefit manager” means an entity that performs pharmacy benefit management.  The term includes a person or entity acting for a pharmacy benefit manager in a contractual or employment relationship in the performance of pharmacy benefit management for a health plan.

§ 9472.  PHARMACY BENEFIT MANAGERS; REQUIRED PRACTICES

(a)  A pharmacy benefit manager that provides pharmacy benefit management for a health plan shall:

(1)  Discharge its duties with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent pharmacy benefit manager acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

(2)  Provide all financial and utilization information requested by a health plan relating to the provision of benefits to beneficiaries through that health plan and all financial and utilization information relating to services to that health plan.  A pharmacy benefit manager providing information under this subsection may designate that material as confidential.  Information designated as confidential by a pharmacy benefit manager and provided to a health plan under this subsection may not be disclosed by the health plan to any person without the consent of the pharmacy benefit manager, except that disclosure may be made in a court filing under the consumer fraud provisions of chapter 63 of Title 9 or when authorized by that chapter or ordered by a court for good cause shown.

(3)  Notify a health plan in writing of any proposed or ongoing activity, policy, or practice of the pharmacy benefit manager that presents, directly or indirectly, any conflict of interest with the requirements of this section.

(4)  Adhere to the following provisions with regard to the dispensation of a substitute prescription drug for a prescribed drug to a beneficiary:

(A)  With regard to substitutions in which the substitute drug costs more than the prescribed drug, disclose to the health plan the cost of both drugs and any benefit or payment directly or indirectly accruing to the pharmacy benefit manager as a result of the substitution.

(B)  Transfer in full to the health plan any benefit or payment received in any form by the pharmacy benefit manager either as a result of a prescription drug substitution under subdivision (A) of this subdivision (4) or as a result of the pharmacy benefit manager’s substituting a lower-priced generic and therapeutically equivalent drug for a higher-priced prescribed drug.

(5)  If the pharmacy benefit manager derives any payment or benefit for the dispensation of prescription drugs within the state based on volume of sales for certain prescription drugs or classes or brands of drugs within the state, pass that payment or benefit on in full to the health plan, unless the contract between the pharmacy benefit manager and the health plan provides otherwise.

(6)  Disclose to the health plan all financial terms and arrangements for remuneration of any kind that apply between the pharmacy benefit manager and any prescription drug manufacturer, including formulary management and drug-switch programs, educational support, claims processing, pharmacy network fees charged from retail pharmacies and data sales fees.  A pharmacy benefit manager providing information under this subsection may designate that material as confidential.  Information designated as confidential by a pharmacy benefit manager and provided to a health plan under this subsection may not be disclosed by the health plan to any person without the consent of the pharmacy benefit manager, except that disclosure may be made in a court filing under the consumer fraud provisions of chapter 63 of Title 9 or when authorized by that chapter or ordered by a court for good cause shown.

(b)  Compliance with the requirements of this section is required in all contracts for pharmacy benefit management entered into in this state by a health plan in this state.

§ 9473.  ENFORCEMENT

(a)  In addition to any remedy available to the commissioner under this title and any other remedy provided by law, a violation of this subchapter shall be considered a violation of the Vermont Consumer Fraud Act in subchapter 1 of chapter 63 of Title 1.  All rights, authority, and remedies available to the attorney general and private parties to enforce the Vermont Consumer Fraud Act shall be available to enforce the provisions of this subchapter.

(b)  In connection with any action for violation of the Vermont Consumer Fraud Act, the commissioner’s determinations concerning the interpretation and administration of the provisions of this subchapter and any rules adopted hereunder shall carry a presumption of validity.  The attorney general and the commissioner shall consult with each other prior to the commencement of any investigation or enforcement action with respect to any pharmacy benefit manager.  The commissioner may enforce a violation of this subchapter by a pharmacy benefit manager under section 9412 of this title.  Notwithstanding the foregoing, the commissioner and the attorney general may bring a joint enforcement action against any person or entity for a violation of this subchapter.

Sec. 22.  APPLICATION

Sec. 21 of this act applies to contracts executed or renewed on or after September 1, 2005.  For purposes of this section, a contract executed pursuant to a memorandum of agreement executed prior to September 1, 2005 is deemed to have been executed prior to September 1, 2005 even if the contract was executed after that date.

* * * Pharmaceutical Marketer Disclosures * * *

Sec. 23.  33 V.S.A. § 2005(a)(4) is amended and (d) is added to read:

(4)  The following shall be exempt from disclosure:

* * *

(D)  scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association; and

(E)  unrestricted grants for continuing medical education programs; and

(F)  prescription drug rebates and discounts.

* * *

(d)  Disclosures of unrestricted grants for continuing medical education programs shall be limited to the value, nature, and purpose of the grant and the name of the grantee.  It shall not include disclosure of the individual participants in such a program.

* * * Pharmacy Discount Plans * * *

Sec. 24.  33 V.S.A. § 2003 is amended to read:

§ 2003.  PHARMACY DISCOUNT PLANS

* * *

(b)  The Healthy Vermonters program shall offer beneficiaries an initial discounted cost for covered drugs.  Upon approval by the Centers for Medicare and Medicaid Services of a Section 1115 Medicaid waiver program, and upon subsequent legislative approval, the The Healthy Vermonters program and the Healthy Vermonters Plus program shall offer beneficiaries a secondary discounted cost, which shall reflect a state payment toward the cost of each dispensed drug as well as any rebate amount negotiated by the commissioner.

* * *

(n)  The department shall agency may seek a waiver from the Centers for Medicare and Medicaid Services (CMS) requesting authorization any waivers of federal law, rule, or regulation necessary to implement the provisions of this section, including application of manufacturer and labeler rebates to the pharmacy discount plans.  The secondary discounted cost shall not be available to beneficiaries of the pharmacy discount plans until the department receives written notification from CMS that the waiver requested under this section has been approved and until the general assembly subsequently approves all aspects of the pharmacy discount plans, including funding for positions and related operating costs associated with eligibility determinations.

* * * Price Disclosure and Certification * * *

Sec. 25.  33 V.S.A. § 2010 is added to read:

§ 2010.  ACTUAL PRICE DISCLOSURE AND CERTIFICATION

(a)  A manufacturer of prescription drugs dispensed in this state under a health program directed or administered by the state shall, on a quarterly basis, report by National Drug Code the following pharmaceutical pricing criteria to the director of the office of Vermont health access for each of its drugs:

(1)  the average manufacturer price as defined in 42 U.S.C. § 1396r‑8(k); and

(2)  the best price as defined in 42 U.S.C. § 1396r‑8(c)(1)(C).

(b)  The pricing information required under this section is for drugs defined under the Medicaid drug rebate program and must be submitted to the director following its submission to the federal government in accordance with 42 U.S.C. § 1396r‑8(b)(3).

(c)  When a manufacturer of prescription drugs dispensed in this state reports the average manufacturer price or best price, the president or chief executive officer of the manufacturer shall certify to the office, on a form provided by the director of the office of Vermont health access, that the reported prices are the same as those reported to the federal government as required by 42 U.S.C. § 1396r‑8(b)(3) for the applicable rebate period.

(d)  Notwithstanding any provision of law to the contrary, information submitted to the office under this section is confidential and is not a public record as defined in subsection 317(b) of Title 1.  Disclosure may be made by the office to an entity providing services to the office under this section; however, that disclosure does not change the confidential status of the information.  The information may be used by the entity only for the purpose specified by the office in its contract with the entity.  Data compiled in aggregate form by the office for the purposes of reporting required by this section are public records as defined in subsection 317(b) of Title 1, provided they do not reveal trade information protected by state or federal law.

(e)  The attorney general shall enforce the provisions of this section under the Vermont Consumer Fraud Act in subchapter 1 of chapter 63 of Title 1.  The attorney general has the same authority to make rules, conduct civil investigations, and bring civil actions with respect to acts and practices governed by this section as is provided under the Vermont Consumer Fraud Act.

* * *  Health Care Purchasing Pool  * * *

Sec. 26.  33 V.S.A. chapter 19, subchapter 7 is added to read:

Subchapter 7.  Health Care Purchasing Pool

§ 2050.  VERMONT HEALTH CARE PURCHASING POOL

(a)  The office of Vermont health access shall establish a Vermont health care purchasing pool for the purpose of coordinating and enhancing the purchasing power of health care benefit plans for groups and individuals who choose to participate.  It is not the intent of the general assembly to exacerbate cost shifting or adverse selection in the Vermont health care system through the creation of the health care purchasing pool.  In offering and administering the purchasing pool, the director of the office of Vermont health access shall not discriminate against individuals or groups based on age, gender, geographic area, industry, or medical history.  The director shall not administer the purchasing pool under this subsection in a manner that pools the risks of participants.  The provisions of this section shall not affect the rights of any party to a collective bargaining agreement and shall not require that participating health insurance plans have a common benefit plan.

(b)  In administering the purchasing pool, the director may:

(1)  Contract on behalf of participants in the pool with health care providers, health care facilities, and health insurers for the delivery of health care services, including agreements securing discounts for regular bulk payments to providers, global payments to hospitals, and agreements establishing uniform provider reimbursement;

(2)  Consolidate administrative functions through a common contract on behalf of participants in the pool, including claims processing, utilization review, management reporting, benefit management, and bulk purchasing;

(3)  Create a health care cost and utilization database for participants in the pool and evaluate potential cost savings; and

(4)  Establish incentive programs to encourage pool participants to use health care services judiciously and to improve their health status.

(c)  On a voluntary basis, the director may include in the purchasing pool individuals who have health insurance through a nongroup plan and any employer group, association, or trust that chooses to participate in the pool on behalf of the employees or members of the group, association, or trust.  The director may require such portions of the Medicaid caseload, Green Mountain Health, or any other public health care program as the secretary deems proper to participate in the purchasing pool.  Access to medical care or benefit levels for Medicaid recipients shall not diminish as a result of participation or nonparticipation in the pool.

(d)  For the purposes of this section, “global payments to hospitals” means a negotiated amount to be paid to a hospital by the office of Vermont health access for services received at that hospital by all individuals covered by participants in the purchasing pool. The contract for a global hospital payment shall specify the scope of services covered by the payment, and may include a payment adjustment based on performance criteria.

Sec. 27.  ECONOMIC, FINANCING, AND ADMINISTRATIVE STUDIES

(a)  In order to assess more fully the benefits and costs and to prepare and plan for the implementation of full and universal access to health care in Vermont, the commission on health care reform, in consultation with the department of banking, insurance, securities, and health care administration, directs that the following economic impact, financing, and governance studies be undertaken during the interim of the 2005 legislative session.  The commission shall direct its staff or contract for one or more consultants to undertake the economic impact and financing studies authorized by this section.

(1)  Economic impact study.  The economic impact study shall examine the impact of implementing a system of universal access to health care for Vermonters versus the effects of sustaining the current system impact on business and the labor force, the future growth of the economy and the economic competitiveness of Vermont, and the effects on residents and population groups and on current and potential insurers and providers of health care.

(2)  Financing options.  The financing study shall examine the financing options that most effectively achieve the goal of universal access to health care and maintaining its affordability.  The study shall include examination of all financing options and their implications, including the income tax, a payroll tax, premiums or cost-sharing measures, consumption taxes, specific more limited taxes to support parts of the health care system’s financial needs, and other revenue sources including insurance risk pools and insurance assistance and incentives.

(A)  The study shall reference the fact and supporting empirical evidence that many countries have achieved universal access and more affordable health care utilize public financing as a tool to achieve this goal. The study shall consider the strengths and weaknesses of such public financing systems with respect to fairness and adequacy of funding, access to and quality of services.

(B)  The study shall examine how implementation of any public financing options will be offset in corresponding reductions in premiums, other taxes, and individual cost-sharing contributions.

(C)  The study shall examine how any proposed changes in financing or delivery of health care could affect benefits Vermonters currently receive through Vermont employers.

(D)  The study shall address issues involved with federal law and taxation, including ERISA and other areas of preemption; technical proposals to exempt non-resident employees of Vermont businesses; a provision to ensure a soft landing for affected businesses and a recommendation as to the appropriate amount needed in a soft landing provision to mitigate negative effects on business; recommendations on the best method for unemployed individuals to contribute to the financing; a simplified structure based on employee numbers, employer payroll, or a combination for ease of administration and clarity; and the recommendations of the tax department. 

(E)  The study shall analyze methods for recapturing insurance premiums as a result of any reductions in uncompensated care, such as the Dirigo model enacted in the state of Maine, any reductions in insurance premiums resulting from public financing, and for ensuring that all Vermonters contribute to the financing of health care’s fixed costs.

(3)  Governance and administrative study.  The secretary of administration, in consultation with the office of Vermont health access, the department of banking, insurance, securities, and health care administration, and the agency of human services, shall examine and develop a plan for reorganizing their respective offices and functions consistent with the purposes of this act, including recommendations relating to personnel, operations, and budgetary requirements.  The recommendations shall consider the most appropriate and efficient approach to integrating health care policy, planning, delivery, regulation, and defining clear lines of accountability within the health care system.  The study shall include also an examination of means to coordinate or integrate Green Mountain Health with the current workers’ compensation system and the feasibility and merits of authorizing the state to act as an insurer in pooling risk and providing benefits, including a common benefits plan, to participants of the health care purchasing pool.

(b)  Reports, including findings and recommendations, from each study required by this section shall be submitted to the general assembly not later than January 15, 2006.

* * * Integrated Systems of Care * * *

Sec. 28.  INTEGRATED SYSTEMS OF CARE; GRANTS

(a)  The commission on health care reform shall encourage and support integrated systems of care that:  (1) reorganize the health care delivery system to improve coordination, reduce medical errors, and reduce redundant or unnecessary care, (2) improve the quality of care in terms of process and outcomes, and (3) encourage alternative reimbursement mechanisms based on outcome-based payments to change the incentives for health care professionals and to control health care costs. 

(b)  Beginning in fiscal year 2007, as an initial step towards achieving integrated systems of care, the commission on health care reform shall prepare and publish a request for proposals from regional providers for the planning and development of pilot projects.  Proposals may include pilot projects that promote:  community-based evaluation and planning, improved financial management, information technology systems that advance the management and coordination of health care, governance models at the community level, and patient responsibility for and participation in health care decision making.  Pilot projects approved by the commission shall be awarded matching grants by the commission.

(c)  In addition, the commission on health care reform shall direct long-term investments in health care systems, technology, and infrastructure in a manner that promotes the establishment of integrated systems of care.  Investments under this subsection shall be made in the form of matching grants, pursuant to standards and criteria developed by the commission.

(d)  For the purpose of carrying out the goals of this section, it is the intent of the general assembly to invest $20,000,000.00 annually over five years beginning in fiscal year 2007.  To the extent permitted under federal law, funding shall come from the global commitment secured under the Medicaid program.  In addition, the commission may seek grants or other sources of revenue from public or private entities for the purpose of carrying out the provisions of this section.

(e)  The commission on health care reform shall develop measurements for evaluating all projects funded under this section.

* * * Hospital Discount Programs * * *

Sec. 29.  18  V.S.A. § 1905 is amended to read:

§ 1905.  LICENSE REQUIREMENTS

Upon receipt of an application for license and the license fee, the licensing agency shall issue a license when it determines that the applicant and hospital facilities meet the following minimum standards:

* * *

(19)  All hospitals shall submit to the licensing agency a report indicating compliance with the hospital discount program established under section 9420 of Title 18.

Sec. 30.  18  V.S.A. § 9405b is amended to read:

§ 9405B. HOSPITAL COMMUNITY REPORTS

(a)  The commissioner, in consultation with representatives from the public oversight commission, hospitals, and other groups of health care professionals shall adopt rules establishing a standard format for community reports, as well as the contents, which shall include:

* * *

(11)  information on the hospital’s discount program as described in section 9420 of this title. 

* * *

Sec. 31.  18 V.S.A. § 9420 is added to read:

§ 9420.  HOSPITAL DISCOUNT PROGRAM

(a)  The department recognizes that Vermont hospitals deliver extensive free care to Vermonters who are unable to afford hospital services.  For example, in hospital fiscal year 2003, Vermont hospitals provided $22.6 million in charity (free) care.

(b)  As a transitional provision until there is greater access to hospital services, the commissioner shall establish by rule standards and procedures for a hospital discount program for the uninsured, which shall ensure that patients least able to afford hospital services are not charged the highest rates. 

(c)  The rules shall require all licensed hospitals to provide discounts to patients with no insurance.  The hospital charges under the discount policy shall be a rate equivalent to the average discounted rate accepted from third party payers contracting with that hospital The discounted net amount due under the discount policy shall be accepted as payment in full.

Committee on the part of                            Committee on the part of

The Senate                                                          The House

Sen. Ann Cummings                                    Rep. John Tracy

Sen. James Leddy                                       Rep. Harry Chen

Sen. Peter Welch                                        

     Pending the question, Shall the House adopt the report of the Committee of Conference? Rep. Tracy of Burlington 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 adopt the report of the Committee of Conference?  was decided in the affirmative.  Yeas, 79.  Nays, 55.

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

Corcoran of Bennington

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

Grad of Moretown

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Kainen of Hartford

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

Maier of Middlebury

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

Mook of Bennington

Nease of Johnson

Nuovo of Middlebury

Obuchowski of Rockingham

Orr of Charlotte

Partridge of Windham

Perry of Richford

Potter of Clarendon

Pugh of S. Burlington

Randall of Troy

Reese of Pomfret

Rodgers of Glover

Seibert of Norwich

Shand of Weathersfield

Sharpe of Bristol

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Zuckerman of Burlington


Those who voted in the negative are:


Adams of Hartland

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

DePoy of Rutland City

Donaghy of Poultney

Donahue of Northfield

Endres of Milton

Errecart of Shelburne

Hube of Londonderry

Hudson of Lyndon

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

Livingston of Manchester

Louras of Rutland City

Marcotte of Coventry

Marron of Stowe

McAllister of Highgate

Metzger of Milton

Molloy of Arlington

Morley of Barton

Morrissey of Bennington

Myers of Essex

Niquette of Colchester

Nitka of Ludlow

O'Donnell of Vernon

Otterman of Topsham

Parent of St. Albans City

Peaslee of Guildhall

Peterson of Williston

Rusten of Halifax

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


Brennan of Colchester

Dunsmore of Georgia

Flory of Pittsford

Gervais of Enosburg

Helm of Castleton

Houston of Ferrisburgh

Howrigan of Fairfield

Johnson of Canaan

Lorber of Burlington

Malcolm of Pawlet

Miller of Elmore

Pellett of Chester

Pillsbury of Brattleboro

Smith of Morristown

Wood of Brandon


 

     Rep. Green of Berlin explained his vote as follows:

“Madam Speaker:

     I voted to accept the conference committee report because I believe that it is quite simply the best health care reform bill that we can get at this moment.  I am concerned that the bill does not contain a rigorous study of health care administration costs, particularly of providers and insurers, and a comparison of those costs with the administrative costs of existing public sector programs in the State of Vermont and abroad.  I hope this can be incorporated into the program as it goes forward.”

     Rep. Kiss of Burlington explained his vote as follows:

“Madam Speaker:

     I’m committed to single payer universal health care.  H. 524 isn’t universal health care for all but in language throughout the bill I believe we are preserving the opportunity to get us there.  In that spirit I’ll cast my vote again to support H. 524 and toward “civilized medicine.”

     Rep. Wright of Burlington explained his vote as follows:

“Madam Speaker:

     I vote no on this conference report with great disappointment.  Disappointment at political ultimatums and lack of real compromise.  A payroll tax is regressive and taxes those that can least afford it.  Forcing a “veto showdown” was not in the best interest of Vermonters.”

Senate Proposal of Amendment Concurred in

H. 533

     The Senate proposes to the House to amend House bill, entitled

     An act relating to compensation for certain state employees;

First:  By adding Secs. 1a and 1b to read as follows:

Sec. 1a.  32 V.S.A. § 1051(a) is amended to read:

(a)  The speaker of the house and the president pro tempore of the senate shall receive annual compensation of $10,080.00 for the 2005 biennial session and thereafter to be paid in biweekly payments; provided that, beginning on January 1, 2007, the annual compensation shall be adjusted annually thereafter by the cost of living adjustment negotiated for state employees under the most recent collective bargaining agreement.  In addition to the annual compensation, the speaker and president pro tempore shall receive:

(1)  $652.00 a week for the 2005 biennial session and thereafter, to be paid in biweekly payments during the regular and adjourned sessions of the general assembly; provided that, beginning on January 1, 2007, the weekly compensation shall be adjusted annually thereafter by the cost of living adjustment negotiated for state employees under the most recent collective bargaining agreement;

(2)  $130.00 a day during a special session of the general assembly which is called at any time following the 2005 biennial session; provided that, beginning on January 1, 2007, the daily compensation shall be adjusted annually thereafter by the cost of living adjustment negotiated for state employees under the most recent collective bargaining agreement; and

* * *

Sec. 1b.  32 V.S.A. § 1052(a) is amended to read:

(a)  Each member of the general assembly, other than the speaker and the president pro tempore of the senate, is entitled to a weekly salary of $589.00 for the 2005 biennial session and thereafter; provided that, beginning on January 1, 2007, the weekly compensation shall be adjusted annually thereafter by the cost of living adjustment negotiated for state employees under the most recent collective bargaining agreement.  The salary of members shall be paid in biweekly installments.  During a special session, a member is entitled to $118.00 a day for each day of a special session which is called at any time following the 2005 biennial session for each day on which the house of which he or she is a member shall sit.

Second:  In Sec. 12, 3 V.S.A. § 2281, subdivision (4), by striking out the first sentence in its entirety and inserting in lieu thereof a new sentence to read as follows:  to report on an annual basis to the joint fiscal committee at its November meetings on the allocation of funds contained in the annual pay acts and the allocation of funds in the annual appropriations act which relate to those annual pay acts.

Pending the question, Shall the House concur in the Senate proposal of amendment? Rep. Morrissey of Bennington 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 concur in the Senate proposal of amendment? was decided in the affirmative.  Yeas, 76.  Nays, 56.

Those who voted in the affirmative are:


Allaire of Rutland City

Ancel of Calais

Aswad of Burlington

Atkins of Winooski

Audette of S. Burlington

Barnard of Richmond

Bohi of Hartford

Brooks of Montpelier

Chen of Mendon

Clarkson of Woodstock

Copeland-Hanzas of Bradford

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

DePoy of Rutland City

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

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

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

Koch of Barre Town

Kupersmith of S. Burlington

Larson of Burlington

Leriche of Hardwick

Lippert of Hinesburg

Maier of Middlebury

Marek of Newfane

Marron of Stowe

Martin of Springfield

Martin of Wolcott

Masland of Thetford

McCullough of Williston

McLaughlin of Royalton

Milkey of Brattleboro

Minter of Waterbury

Monti of Barre City

Myers of Essex

Nease of Johnson

Nuovo of Middlebury

Orr of Charlotte

Partridge of Windham

Peterson of Williston

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

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Westman of Cambridge

Zuckerman of Burlington


Those who voted in the negative are:


Adams of Hartland

Allard of St. Albans Town

Bartlett of Dover

Bostic of St. Johnsbury

Botzow of Pownal

Branagan of Georgia

Canfield of Fair Haven

Clark of St. Johnsbury

Clark of Vergennes

Condon of Colchester

Corcoran of Bennington

Donaghy of Poultney

Donahue of Northfield

Endres of Milton

Errecart of Shelburne

Grad of Moretown

Hube of Londonderry

Hudson of Lyndon

Kainen of Hartford

Kennedy of Chelsea

Kilmartin of Newport City

Komline of Dorset

Krawczyk of Bennington

Larrabee of Danville

LaVoie of Swanton

Lawrence of Lyndon

Livingston of Manchester

Louras of Rutland City

Marcotte of Coventry

McAllister of Highgate

McFaun of Barre Town

Metzger of Milton

Miller of Shaftsbury

Molloy of Arlington

Mook of Bennington

Morley of Barton

Morrissey of Bennington

Niquette of Colchester

Nitka of Ludlow

Obuchowski of Rockingham

O'Donnell of Vernon

Otterman of Topsham

Parent of St. Albans City

Peaslee of Guildhall

Perry of Richford

Potter of Clarendon

Schiavone of Shelburne

Severance of Colchester

Shaw of Derby

Smith of New Haven

Sunderland of Rutland Town

Valliere of Barre City

Winters of Swanton

Winters of Williamstown

Wright of Burlington

Young of Orwell


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


Baker of West Rutland

Brennan of Colchester

Dunsmore of Georgia

Flory of Pittsford

Gervais of Enosburg

Helm of Castleton

Houston of Ferrisburgh

Howrigan of Fairfield

Johnson of Canaan

Larocque of Barnet

Lorber of Burlington

Malcolm of Pawlet

Miller of Elmore

Pellett of Chester

Pillsbury of Brattleboro

Smith of Morristown

Wood of Brandon


 

 

 

     Rep. Morrissey of Bennington explained her vote as follows:

“Madam Speaker:

     Over two weeks late in the legislative session $800,000 to pay for legislators at the expense of the Vermont tax payers and now we’re technically giving ourselves a pay raise by means of a COLA.  Shame on us again!.”

Report of Committee of Conference Adopted

S. 66

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

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

An act relating to the welfare of animals;

Respectfully reports that it has met and considered the same and recommends that the bill be amended by striking all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  STUDY COMMITTEE OF THE PET MERCHANT INDUSTRY

(a)  A committee is established to study the sale, exchange, and donation of animals by merchants in the state of Vermont under chapters 194 and 199 of Title 20.  The committee shall determine the best approach to long-term regulation of the sale, exchange, and donation of animals by pet merchants in the state of Vermont.  The committee shall study:

(1)  Administration of the licensing or registration of pet merchants, including whether Vermont should follow the regulatory framework utilized in New Hampshire or other states;

(2)  Enforcement of any licensing or registration of pet merchants and any prohibition on the unlicensed sale, exchange, or donation of animals, including whether to require proof of licensing prior to advertising the sale, exchange, or donation of animals;

(3)  Funding available for the enforcement of pet merchant licensing or registration requirements; and

(4)  Delegation of some or all enforcement duties to humane societies, sheriff’s departments, or other local or municipal entities.

(b)  The committee shall consist of the following members:

(1)  The secretary of agriculture, food and markets or his or her designee;

(2)  A member of the senate to be appointed by the committee on committees;

(3)  A member of the house of representatives to be appointed by the speaker of the house;

(4)  The commissioner of taxes or his or her designee;

(5)  A member of the Vermont humane federation appointed by the federation;

(6)  A member of the Vermont sheriffs’ association appointed by the association;

(7)  A veterinarian from the Vermont veterinary medical association appointed by the association;

(8)  A member of the Vermont cruelty task force appointed by the task force;

(9)  A member of the Vermont animal control association to be appointed by the association;

(10)  A representative of the Vermont federation of dog clubs to be appointed by the federation; and

(11)  A registered pet merchant appointed by the secretary of agriculture, food and markets.

(c)  The committee shall be co-chaired by the member of the senate and the member of the house of representatives appointed to the committee.  The legislative council shall provide professional and administrative support for the committee.  The committee may hold public hearings and shall solicit comment or testimony from interested parties, including:

(1)  The commissioner of fish and wildlife or his or her designee;

(2)  The secretary of state or his or her designee;

(3)  The Vermont League of Cities and Towns;

(4)  The Vermont Federation of Sportsmen’s Clubs;

(5)  The American Kennel Club;

(6)  Rabbit breeder associations;

(7)  Animal rescue organizations in Vermont; and

(8)  Pet breeders working from their homes.

(d)  All members of the committee shall serve for the duration of the study unless circumstances dictate a permanent replacement.  Vacancies shall be appointed in the same manner as original appointments.

(e)  The committee shall report its recommendations in the form of proposed legislation by January 15, 2006 to the house committees on agriculture, judiciary, and government operations; and the senate committees on agriculture, economic development, housing and general affairs, judiciary, and government operations.  The report shall include recommendations by the committee for the regulation of the pet merchant industry in Vermont.

Committee on the part of                  Committee on the part of

The Senate                                                   The House

Sen. Claire Ayer                               Rep. Brian Dunsmore

Sen. John Campbell                          Rep. Sara Copeland-Hanzas

Sen. Vincent Illuzzi                            Rep. Mitzi Johnson

Which was considered and adopted on the part of the House.

Report of Committee of Conference Adopted

S. 80

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

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

An act relating to increasing the minimum wage;

Respectfully reports that it has met and considered the same and recommends that the bill be amended by striking all after the enacting clause and inserting in lieu thereof the following: 

Sec. 1.  21 V.S.A. § 384(a) is amended to read:

An employer shall not employ an employee at a rate less than $6.25 an hour, beginning on January 1, 2004 at a rate less than $6.75 an hour, and beginning on January 1, 2005 at a rate less than $7.00 an hour and, beginning January 1, 2006, at a rate less than $7.25, and, beginning January 1, 2007, and on each subsequent January 1, the minimum wage rate shall be increased by the lesser of five percent or the average of: the Consumer Price Index, CPI-U, U.S. city average, not seasonally adjusted, or successor index, as calculated by the U.S. Department of Labor or successor agency for the 12 months preceding the previous September 1, whichever is smaller. The minimum wage shall be rounded off to the nearest $0.01.  An employer in the hotel, motel, tourist place, and restaurant industry shall not employ a service or tipped employee beginning on January 1, 2004 at a basic wage rate less than $3.58 an hour, beginning on January 1, 2005 at a basic wage rate less than $3.65 an hour and thereafter at a rate to be determined when the minimum wage is increased.  For the purposes of this subsection, “a service or tipped employee” means all those, in either hotels, motels, tourist places, and restaurants an employee of a hotel, motel, tourist place, or restaurant who customarily and regularly receives more than $30.00 per month in tips for direct and personal customer service.  If the minimum wage rate established by the United States government is greater than the rate established for Vermont for any year, the minimum wage rate for that year shall be the rate established by the United States government.

Committee on the part of                  Committee on the part of

The Senate                                                   The House

Sen. Mark MacDonald                    Rep. Francis Brooks

Sen. Vincent Illuzzi                            Rep. Helen Head

Sen. Hinda Miller                             Rep. Richard Howrigan

Pending the question, Shall the House adopt the report of the Committee of Conference? Rep. Sunderland of Rutland Town 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 adopt the report of the Committee of Conference?  was decided in the affirmative.  Yeas, 90.  Nays, 44.

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

Bohi of Hartford

Botzow of Pownal

Brooks of Montpelier

Chen of Mendon

Clarkson of Woodstock

Copeland-Hanzas of Bradford

Cross of Winooski

Darrow of Dummerston

Deen of Westminster

DePoy of Rutland City

Donahue of Northfield

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

Grad of Moretown

Green of Berlin

Haas of Rochester

Head of S. Burlington

Heath of Westford

Hosford of Waitsfield

Howard of Rutland City

Hunt of Essex

Hutchinson of Randolph

Jerman of Essex

Jewett of Ripton

Johnson of South Hero

Kainen of Hartford

Keenan of St. Albans City

Keogh of Burlington

Kiss of Burlington

Kitzmiller of Montpelier

Klein of East Montpelier

Koch of Barre Town

Kupersmith of S. Burlington

Larson of Burlington

Leriche of Hardwick

Lippert of Hinesburg

Maier of Middlebury

Marek of Newfane

Marron of Stowe

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

Myers of Essex

Nease of Johnson

Niquette of Colchester

Nitka of Ludlow

Nuovo of Middlebury

Obuchowski of Rockingham

O'Donnell of Vernon

Orr of Charlotte

Partridge of Windham

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

Shand of Weathersfield

Sharpe of Bristol

Smith of Morristown

Sweaney of Windsor

Tracy of Burlington

Trombley of Grand Isle

Valliere of Barre City

Westman of Cambridge

Zuckerman of Burlington


Those who voted in the negative are:


Adams of Hartland

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

Condon of Colchester

Corcoran of Bennington

Donaghy of Poultney

Endres of Milton

Errecart of Shelburne

Houston of Ferrisburgh

Hube of Londonderry

Hudson of Lyndon

Kennedy of Chelsea

Kilmartin of Newport City

Komline of Dorset

Krawczyk of Bennington

Larrabee of Danville

LaVoie of Swanton

Lawrence of Lyndon

Livingston of Manchester

Louras of Rutland City

Marcotte of Coventry

McAllister of Highgate

Metzger of Milton

Mook of Bennington

Morley of Barton

Morrissey of Bennington

Otterman of Topsham

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

Winters of Swanton

Winters of Williamstown

Wright of Burlington

Young of Orwell


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


Barnard of Richmond

Brennan of Colchester

Dunsmore of Georgia

Flory of Pittsford

Gervais of Enosburg

Helm of Castleton

Howrigan of Fairfield

Johnson of Canaan

Larocque of Barnet

Lorber of Burlington

Malcolm of Pawlet

Miller of Elmore

Pellett of Chester

Pillsbury of Brattleboro

Wood of Brandon


 

     Rep. Zuckerman of Burlington explained his vote as follows:

“Madam Speaker:

     I am disappointed that in regards to wages we did less for our working poor than in the last biennium.  But I still vote yes because every penny in increased wages for our working poor helps them pull themselves up by their proverbial bootstraps.”

Rules Suspended; Resolution Amended; Third Reading Ordered;

Rules Suspended; Resolution Read Third Time and Passed in Concurrence with Proposals of Amendment

J.R.S. 36

On motion of Rep. Sunderland of Rutland Town, the rules were suspended and Joint resolution bill, entitled

An act relating to relative to federal policy concerning MTBE;

Appearing on the Calendar for notice, was taken up for immediate consideration. 

Rep. Adams of Hartland, for the Committee on Fish, Wildlife and Water Resources, to which the bill had been referred, recommends the House propose to the Senate to amend the resolution by striking all after the title and inserting in lieu thereof the following:

Whereas, methyl tertiary butyl ether (MTBE) is a chemical additive that since 1979 has been used as an octane booster in crude oil based motor vehicle fuel, and

Whereas, Public Law 101-549 (the Clean Air Amendments of 1990) established a fuel oxygen standard that resulted in more significant use of MTBE as a motor vehicle fuel oxygenate, and

Whereas, because this chemical is extremely soluble in water, when MTBE leaks from storage tanks, it does not bind readily to soil and therefore can contaminate either groundwater or drinking water at a rapid pace, and

Whereas, the U.S. Congress has determined that use of MTBE as an oxygenate for air quality purposes should be terminated by a date certain, and

Whereas, nevertheless, Congress has failed to set a timely, or even a firm, termination date, but rather has provided in Sec. 1504 of the House-passed version of H.R. 6, the National Energy Policy Act of 2005, that national use of MTBE can continue potentially until December 31, 2014, and

Whereas, although section 1504 of H.R.6 does not restrict a state from limiting or prohibiting the use of MTBE in motor fuels within its geographic boundaries, the use of MTBE in states that do not adopt their own bans is allowed until 2014 and that is unacceptable, and

Whereas, section 1502 of H.R.6 creates a fuels safe harbor provision under which MTBE or fuel containing MTBE is not a defective product for purposes of a defective product claim unless it violates a control prohibition imposed by the U.S. Environmental Protection Agency under Clean Air Act § 211, and

Whereas, the Congressional Budget Office anticipates that precluding existing and future MTBE claims would reduce the size of judgments in favor of state and local governments over the next five years, resulting in a cost shift from MTBE producers and big oil companies to the states and local governments in the form of unfunded mandates which the taxpayers will ultimately pay, and

Whereas, in 2003, 14 state attorneys general, including the Attorney General of Vermont, expressed their opposition to the enactment of a safe harbor provision relative to MTBE, such as in section 1502 of H.R.6, and

Whereas, increased reliance on ethanol as a motor fuel replacement for increasingly expensive crude oil and its dangerous MTBE additive has gained new supporters and

Whereas, this new support is based on ethanol’s declining price, the availability of storage facilities capable of handling ethanol, and the impact ethanol could have on reducing the threat to ground water quality even if serving as a blend with traditional crude oil, and

Whereas, despite these factors, ethanol is still not a major component of motor vehicle fuel sold in the United States, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly urges Congress to reject both sections 1502 and 1504 of H.R.6 as currently proposed, and to examine closely the potential for the use of ethanol as an alternative to either MTBE or crude oil, and be it further

Resolved:  That the Secretary of State be directed to send a copy of this resolution to the members of the Vermont Congressional delegation.

Thereupon, the bill was read the second time, report of the committee on Fish, Wildlife and Water Resources agreed to and third reading ordered.

On motion of Rep. Sunderland of Rutland Town, the rules were suspended and the resolution placed on all remaining stages of passage in concurrence with proposal of amendment.  The resolution was read the third time and passed in concurrence with proposal of amendment.

Rules Suspended; Senate Proposal of Amendment Concurred in

H. 532

On motion of Rep. Hube of Londonderry, the rules were suspended and House bill, entitled

An act relating to solid waste facility fees, taxes, and certification;

Appearing on the Calendar for notice, was taken up for immediate consideration. 

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

Sec. 1.  3 V.S.A. § 2822(j) is amended to read:

(j)  In accordance with subsection (i) of this section, the following fees are established for permits, licenses, certifications, approvals, registrations, orders, and other actions taken by the agency of natural resources.

* * *

(6)  For solid waste treatment, storage, transfer, or disposal facility certifications issued under 10 V.S.A. chapter 159:

(A)  original and renewal                                $0.75 per ton certified

applications, excluding recycling and                  operational capacity

composting facilities and categorical                              pro-rated and paid on an

solid waste facilities                                                       annual basis over the term

                                                                                    of certification.

(B)  original and renewal                                 $100.00

applications for recycling and composting

facilities., excluding categorical solid

waste facilities that solely manage

recycling or composting solid waste

(C)  original and renewal applications  $0.00

for categorical solid waste facilities managing

solely recycling or composting solid waste

(D)  original and renewal                                $0.00

applications for categorical disposal facilities

(E)  original and renewal                                $200.00 plus $0.41 per applications for facilities, certified                                 cubic yard of certified

pursuant to 10 V.S.A §§ 6605 and 6605b,                   operational capacity above 

that treat, store, or dispose of waste                              15,000 cubic yards

generated solely from mining, extraction, or                   prorated and paid on an

mineral processing                                                        annual basis over the term

                                                                      of the certification.

                                                                      Maximum annual

                                                                      payment, $35,000.00.

(F)  increase in tonnage, excluding                  $0.75 per ton of certified

recycling and composting facilities and               operational capacity

categorical solid waste facilities                         pro-rated and paid on an

                                                                                    annual basis over the term

                                                                                    of certification.

Sec. 2.  10 V.S.A. § 6602(24) is added to read:

(24)  “Municipal solid waste” means combined household, commercial, and industrial waste materials generated in a given area.

Sec. 3.  10 V.S.A. § 6605c is amended to read:

§ 6605c.  EXTENSION OF LANDFILL CLOSURE DEADLINES SOLID WASTE CATEGORICAL CERTIFICATIONS

(a)  Landfills that are not intended to remain open beyond July 1, 1992 may qualify under this section for an extension of certain statutory deadlines.

(b)  Notwithstanding the limitation of subdivision 6605b(c)(7), and subsection 6605a(c) of this title, the secretary shall extend to July 1, 1992 the period for operating and closing an unlined landfill that has capacity available through July 1, 1992, provided the applicant:

(1)  provides a closure plan for the landfill, acceptable to the secretary,

(2)  demonstrates that there is in place, or will be in place at the earliest feasible date, a rate structure and escrow account, or other form of financial security deemed adequate by the secretary, either of which jointly controlled by the secretary, that will accumulate receipts by July 1, 1992 in an amount equal to the projected costs of closure, and

(3)  demonstrates compliance with section 6611 of this title.

(c)  Applications for extensions under this section shall be submitted by August 1, 1989.  By February 1, 1990, the secretary shall approve, conditionally approve, or disapprove applications duly submitted under this section.

(d)  The secretary shall not have joint control of any rate structure, escrow account or other form of financial security that is maintained by a municipality under subsection (b) of this section.  For purposes of subdivision (b)(2) of this section, a municipality shall take official action in a timely manner to meet its closure financial responsibilities by annual budget appropriations, the incurring of debt under 24 V.S.A. chapter 53, the use of a reserve fund created under 24 V.S.A. § 2804, the imposition of rates or surcharges, or by funding post closure monitoring costs as part of the annual operating budget for each applicable year following the landfill closure, or any combination of the above.  The secretary may require a town or solid waste management district that has selected these alternatives to report annually, on a form designated by the secretary, on the status of landfill closure funds and plans.  A violation of an approved closure plan shall be a violation of the provisions of this chapter.  Notwithstanding sections 6605, 6605f, and 6611 of this title, no person may construct, substantially alter, or operate any categorical solid waste facility without first obtaining a certificate from the secretary.  Certificates shall be valid for a period not to exceed five years.

(b)  The secretary may, by rule, list certain solid waste categories as eligible for certification pursuant to this section:

(1)  Solid waste categories to be deposited in a disposal facility shall not be a source of leachate harmful to human health or the environment.

(2)  Solid waste categories to be managed in a composting facility shall not present an undue threat to human health or the environment.

(3)  Solid waste managed at a recycling facility shall be restricted to facilities that manage 400 tons per year or less of recyclable solid waste.

(c)  Certifications for a solid waste management facility pursuant to this section where appropriate shall:

(1)  Specify the location of the facility, including limitations on its development.

(2)  Require proper operation and development of the facility in accordance with facility management plans approved under the certificate.

(3)  Specify the projected amount and types of waste to be managed or disposed at the facility.

(4)  Contain additional conditions, requirements, restrictions, as the secretary may deem necessary to preserve and protect the public health and the air, groundwater, and surface water quality.  This may include requirements concerning recording, reporting, and inspection of the operation of the facility.

(d)  On or before the date of filing any certification application for a facility, the applicant shall send notice and a copy of the application to the municipality where the facility is proposed to be or is located and any adjacent Vermont municipality if the facility is located on a boundary.  The applicant shall furnish the secretary the names of those noticed of the application.

(e)  This section shall not apply to the storage, treatment, or disposal of:

(1)  municipal solid waste;

(2)  sludge;

(3)  septage; or

(4)  mineral processing waste.  For purposes of this section, mineral processing waste means solid waste from an industrial or manufacturing facility that processes materials from a mining activity and where chemicals, as defined by the secretary by rule, are intentionally added as a part of that processing.

Sec. 4.  32 V.S.A. § 5953 is amended to read:

§ 5953.  EXEMPTIONS

The following shall not be subject to the tax imposed by section 5952 of this title:

(1)  wastes delivered to a recycling or composting facility and accepted by the recycling facility for recycling or composting but not wastes generated by that facility;

(2)  septage and or sludge except that septage or sludge delivered to a facility other than a landfill shall be subject to that tax or incinerator;

* * *

(4)  brush, logs, stumps, leaves, and roots but not other wood wastes or products, deposited into a stump dump solid waste delivered to a facility certified pursuant to section 6605c of Title 10;

* * *

(6)  waste delivered to a transfer station for transfer to a disposal facility located inside the state and waste delivered to a facility for storage as defined in 10 V.S.A. § 6602(7);

(7)  solid waste resulting from mining, extraction, or mineral processing operations delivered to a facility certified solely for the treatment, storage, recycling, or disposal of such waste.

Sec. 5.  STUDY OF CALCIUM CARBONATE

In order to review and consider fully the need to retain the tax exemption under 32 V.S.A. § 5953(7), the secretary of natural resources shall require Omya as part of its certification under 10 V.S.A. §§ 6605 or 6605b to finance and complete a study of the human health and environmental effects of Omya’s mineral processing of calcium carbonate in Vermont.  The secretary of natural resources shall require Omya to submit a report of the results of the study on or before January 15, 2008 to the house and senate committees on natural resources and energy, the house committee on ways and means, and the senate committee on finance.  The secretary of natural resources shall require the independent, third-party research study to be conducted by one or more qualified laboratories certified by the National Environmental Laboratory Accreditation Program (NELAP).  In completing the study, the secretary of natural resources may authorize Omya to utilize previously compiled data subject to verification and validation of that data by an independent, third-party university or laboratory.  The study shall include:

(1)  Appropriate site-specific bedrock, aquifer, and groundwater mapping of Omya’s mineral processing facilities, waste disposal facilities, and surrounding area, such as three dimensional groundwater mapping;

(2)  Results from and laboratory testing of groundwater sampling from monitoring wells currently in use at Omya’s mineral processing facilities, waste disposal facilities and surrounding area and any new wells identified as needed by subdivision (1) of this section;

(3)  A complete data packet of the laboratory testing, including methodologies, of the tailings or other waste produced from mineral processing of calcium carbonate at Omya’s mineral processing facilities, waste disposal facilities, and surrounding area in Vermont;

(4)  A toxicological analysis of the tailings or other waste produced from the mineral processing of calcium carbonate at Omya’s facilities in Vermont, including a specific toxicological analysis of tall oil hydroxyethyl imidazoline, other flotation reagents, their constituent compounds, and acetone present in the waste and an analysis of all chemicals present in the waste in accordance with U.S. Food and Drug Administration guidelines;

(5)  Study of dust to determine if Omya is the source of the dust in the area and if so to determine possible health and environmental effects;

(6)  Proof of compliance with any and all applicable quality control and quality assurance measures and protocols including those relating to data validation; and

(7)  Other research or data relevant to the human health and environmental effects of mineral processing of calcium carbonate.

Sec. 6.  SUNSET

32 V.S.A. § 5953(7) (tax exemption for solid waste from mining, extraction, or mineral processing) is repealed on June 30, 2008.

     Which proposal of amendment was considered and concurred in.

Message from the Senate No. 79

     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 considered the reports of the Committees of Conference upon the disagreeing votes of the two Houses upon Senate bills of the following titles:

S. 52.  An act relating to renewable energy portfolio standards, appliance efficiency standards, distributed electricity, and a customer petition for independent status.

S. 174.  An act relating to home health agencies.

And has accepted and adopted the same on its part.

The Senate has considered the report of the Committee of Conference upon the disagreeing votes of the two Houses upon House bill of the following title:

H. 163.  An act relating to criminal abuse, neglect, and exploitation of vulnerable adults.

And has accepted and adopted the same on its part.

Pursuant to the request of the House for a Committee of Conference on the disagreeing votes of the two Houses on House bill entitled:

H. 540.  An act relating to the agricultural and forest land use value program.

The President announced the appointment as members of such Committee on the part of the Senate:

          Senator Kittell

          Senator Wilton

          Senator Ayer

The Senate has considered House proposal of amendment to Senate bill entitled:

S. 16.  An act relating to campaign finance.

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

The President announced the appointment as members of such Committee on the part of the Senate:

          Senator Condos

          Senator White

          Senator Doyle

 

Rules Suspended; Report of Committee of Conference Adopted

H. 156

On motion of Rep. Sunderland of Rutland Town, the rules were suspended and House bill, entitled

An act relating to conservation motor vehicle registration plates;

Appearing on the Calendar for notice, was taken up for immediate consideration. 

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the Senate recede from its proposal of amendment and that the bill be further amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  23 V.S.A. § 304b(a) is amended to read:

§ 304b.  CONSERVATION MOTOR VEHICLE REGISTRATION PLATES

(a)  The commissioner shall, upon application, issue conservation registration plates for use only on vehicles registered at the pleasure car rate and on trucks registered for less than 26,001 pounds and excluding vehicles registered under the International Registration Plan.  Plates so acquired shall be mounted on the front and rear of the vehicle.  The commissioner of motor vehicles and the commissioner of fish and wildlife shall determine the graphic design of the special plates in a manner which serves to enhance the public awareness of the state’s interest in restoring and protecting its nongame  wildlife and major watershed areas.  The commissioner of motor vehicles and the commissioner of fish and wildlife may alter the graphic design of these special plates provided that plates in use at the time of a design alteration shall remain valid subject to the operator’s payment of the annual registration fee.  Applicants shall apply on forms prescribed by the commissioner and shall pay an initial fee of $20.00 in addition to the annual fee for registration.  In following years, in addition to the annual registration fee, the holder of a conservation plate shall pay a renewal fee of $20.00.  The commissioner shall adopt rules under 3 V.S.A. chapter 25 to implement the provisions of this subsection.  The commissioner of motor vehicles and the commissioner of fish and wildlife shall annually submit to the members of the house committees on transportation and fish, wildlife, and water resources, and the members of the senate committees on transportation and natural resources and energy a report detailing, over a three year period, the revenue generated, the number of new conservation plates sold and the number of renewals, and recommendations for program enhancements.

Sec. 2.  CONSERVATION MOTOR VEHICLE PLATES; SUNSET; REPEAL

Sec. 16 of No. 189 of the Acts of the 1995 Adj. Sess. (1996) as amended by Sec. 12g of No. 155 of the Acts of the 1999 Adj. Sess. (2000) (sunset of motor vehicle conservation plate program) is repealed.

Donald E. Collins                                         Michele F. Kupersmith

Hull P. Maynard                               David L. Deen

Robert A. Starr                                            Loren T. Shaw

Committee on the part of the Senate    Committee on the part of the House

Which was considered and adopted on the part of the House.

Rules Suspended; Report of Committee of Conference Adopted

S. 159

On motion of Rep. Sunderland of Rutland Town, the rules were suspended and Senate bill, entitled

An act relating to updating and clarifying education law.

Appearing on the Calendar for notice, was taken up for immediate consideration. 

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the Senate accede to the House proposal of amendment and that the bill be further amended as follows:

First:  In Sec. 16, by striking Sec. 16 in its entirety and inserting in lieu thereof a new Sec. 16 to read:

Sec. 16.  16 V.S.A. § 4011(a) and (c) are amended to read:

(a)  Annually, the general assembly shall appropriate funds to pay for an adjusted education payment for each equalized pupil statewide education spending and a portion of a base education payment for each adult diploma student and student or client in the adult education and literacy program.

(c)  Annually, each school district shall receive an adjusted education spending payment for support of education costs.  Funds distributed under this section shall be allocated on the basis of the equalized pupils in each school district, except for unorganized towns and gores.  An unorganized town or gore shall receive an amount equal to its adjusted education payment for that year for each student based on the weighted average daily membership count which shall not be equalized.  If the district’s adjusted education payment is less than the base education payment, then in fiscal years 2005 and 2006 only, the district shall receive its education spending per equalized pupil plus 40 percent of the excess of the base education payment over the district’s adjusted education payment, but only for deposit in a district’s education reserve fund, authorized in accord with section 2804 of Title 24, for expenditure on legitimate items of education expense.  In fiscal years 2007 and after, no district shall receive more than its education spending amount.

Second:  At the end of the bill by adding two new sections to read:

Sec. 19.  TRANSITION TO FULL IMPLEMENTATION OF ACT 130;                                          FUNDING OF UNION AND UNIFIED UNION SCHOOL

               DISTRICTS

(a)  In this section, “municipality” has the same meaning as in 32 V.S.A.

§ 5401(9).

(b)  In fiscal year 2007, union and unified school districts shall not receive funds under 16 V.S.A. § 4011(c) and shall divide the amount that would otherwise be received under that section in the proportion which the union district’s equalized pupil count from the associated municipality bears to the total number of the union district’s equalized pupil count for that year.  The board of directors of a union district shall present an estimate of the amount to be divided at an annual meeting.  Following a vote to adopt the budget, the board of directors shall compute the share of each member district or associated municipality and give notice of the amount to the legislative branch of the member district or municipality.  Upon receipt by the member district or municipality of the notice of the share in the union or unified district expenses, the share shall become a legal obligation of the member district or municipality without need for further vote of the member district or municipality electorate.  Notwithstanding 16  V.S.A. § 706j(a)(8), in fiscal year 2007, a union school district board of directors may borrow money pending receipt of payments from the member districts or associated municipality by the issuance of its notes or orders payable not later than one year from date.

(c)  In fiscal year 2007, education spending as defined in 16 V.S.A.

§ 4001(6) shall include any assessment for a union school.

(d)  Notwithstanding the provisions of 32 V.S.A. § 5402(a)(2) and (3), for fiscal year 2007, the homestead property tax rate for a municipality which is a member of a union or unified union school district shall not be calculated as required under subsection 5402(e) of Title 32.

Sec. 20.  LAKE CHAMPLAIN REGIONAL TECHNICAL CENTER SCHOOL DISTRICT; TRANSFER OF FUNDS

(a)  Reallocation.  Notwithstanding any provision of law to the contrary, all capital appropriations made in prior legislative sessions to the department of buildings and general services for use by the Lake Champlain Chamber of Commerce, the Chittenden Workforce Investment Board, or the Lake Champlain Regional Technical Center School District (“LCRTCSD”) that remain in any LCRTCSD account shall be transferred to the department of buildings and general services on or before July 15, 2005.  Of the amount transferred, the department shall disburse the sum of $10,000.00 to the Chittenden South Supervisory Union Board as fiscal agent for the purpose of providing consulting services to the steering committee created in subsection (b) of this section.

(b)  Steering committee.  There is created a steering committee to develop a vision for providing technical education in the Chittenden County service region and to determine if a new planning committee should be created under the provisions of 16 V.S.A. § 1572.  The steering committee shall consist of the following members:  the superintendent of schools for the Chittenden South Supervisory Union who shall serve as chair, a member of the Burlington board of school commissioners to be selected by that board, a member of the Essex Union # 46 High School Board to be selected by that board, a high school principal from the service area selected by the commissioner of education in consultation with the principals in the technical center service region, one member selected by the Chittenden Workforce Investment Board, one member selected by the Franklin-Grand Isle Workforce Investment Board, and two teachers chosen by the commissioner of education, one from the Burlington Technical Center and one from the Center for Technology – Essex.   The director of the Burlington Technical Center and the director of the Center for Technology – Essex shall serve as nonvoting members of the steering committee. 

(c)  Access to records and information.  The LCRTCSD shall ensure that all of its records and information relating to its work are made available to the steering committee and comply with all requirements relating to the disposition of public records.

(d)  Recommendations.  On or before November 30, 2005, the steering committee shall provide specific recommendations for implementing its vision, including the process for creating a new planning committee under the provisions of 16 V.S.A. § 1572, if necessary, to the school boards and superintendents for each of the high schools in the region.  It shall submit copies of the recommendations to the house and senate committees on education and on institutions, the commissioners of education and of buildings and general services, the Franklin-Grand Isle Workforce Investment Board, and the Chittenden Workforce Investment Board. 

(e)  Oversight.  The commissioner of education shall monitor the steering committee’s work and shall approve all expenditures of the sums reallocated to the committee in subsection (a) of this section. 

Committee on the part of                  Committee on the part of

The Senate                                                   The House

Sen. Donald Collins                          Rep. George Cross

Sen. James Condos                           Rep. Denise Barnard

Sen. Wendy Wilton                           Rep. Kathy LaVoie

Committee of Conference Appointed

S. 16

     Pursuant to the request of the Senate for a Committee of Conference on the disagreeing votes of the two Houses on Senate bill, entitled

     An act relating to campaign finance;

     The Speaker appointed as members of the Committee of Conference on the part of the House:

   Rep. Bohi of Hartford

   Rep. Clark of St. Johnsbury

               Rep. Hutchinson of Randolph

Rules Suspended; Report of Committee of Conference Adopted

S. 171

On motion of Rep. Sunderland of Rutland Town, the rules were suspended and Senate bill, entitled

An act relating to agricultural water quality;

Appearing on the Calendar for notice, was taken up for immediate consideration. 

The Speaker placed before the House the following Committee of Conference report:

To the Senate and House of Representatives:

The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the bill be amended by striking all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  6 V.S.A. § 4810 is amended to read:

§ 4810.  AUTHORITY; COOPERATION; COORDINATION

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

(1)  “Accepted Agricultural Practices” (AAPs) shall be standards to be followed in conducting agricultural activities in this state.  These standards shall address activities which have a potential for causing pollutants to enter the groundwater and waters of this the state, including dairy and other livestock operations plus all forms of crop and nursery operations.  The AAPs shall include, as well as promote and encourage, practices for farmers in preventing pollutants from entering the groundwater and waters of the state when engaged in, but not limited to, animal waste management and disposal, soil amendment applications, plant fertilization, and pest and weed control.  Persons engaged in farming, as defined in section 6001 of Title 10, who follow these practices shall be presumed to be in compliance with water quality standards.  AAPs shall be practical and cost effective to implement.  The AAPs for groundwater shall include a process under which the agency shall receive, investigate, and respond to a complaint that a farm has contaminated the drinking water or groundwater of a property owner. 

* * *

(b)  Cooperation and coordination.  The secretary of agriculture, food and markets shall coordinate with the secretary of natural resources in implementing and enforcing programs, plans and practices developed for reducing and eliminating agricultural non-point source pollutants and discharges from concentrated animal feeding operations.  The secretary of agriculture, food and markets and the secretary of natural resources shall develop a memorandum of understanding for the non-point program describing program administration, grant negotiation, grant sharing and how they will coordinate watershed planning activities to comply with Public Law 92-500.  The secretary of agriculture, food and markets and the secretary of the agency of natural resources shall also develop a memorandum of understanding according to the public notice and comment process of subsection 1259(i) of Title 10 regarding the implementation of the federal concentrated animal feeding operation program and the relationship between the requirements of the federal program and the state agricultural water quality requirements for large, medium, and small farms under chapter 215 of this title.  The memorandum of understanding shall describe program administration, permit issuance, an appellate process, and enforcement authority and implementation.  The memorandum of understanding shall be consistent with the federal National Pollutant Discharge Elimination System permit regulations for discharges from concentrated animal feeding operations.  The allocation of duties under this chapter between the secretary of agriculture, food and markets and the secretary of natural resources shall be consistent with the secretary’s duties, established under the provisions of section subsection 1258(b) of Title 10, to comply with Public Law 92-500.  The secretary of natural resources shall be the state lead person in applying for federal funds under Public Law 92-500, but shall consult with the secretary of agriculture, food and markets during the process.  The agricultural non-point source program may compete with other programs for competitive watershed projects funded from federal funds.  The secretary of agriculture, food and markets shall be represented in reviewing these projects for funding.  Actions by the secretary of agriculture, food and markets under this chapter concerning agricultural non-point source pollution shall be consistent with the water quality standards and water pollution control requirements of chapter 47 of Title 10 and the federal Clean Water Act as amended.

Sec. 2.  6 V.S.A. § 4812 is amended to read:

§ 4812.  CORRECTIVE ACTIONS

(a)  When the secretary of agriculture, food and markets determines that a person engaged in farming is managing a farm using practices which are inconsistent with practices defined by rules under this chapter subchapter, the secretary may issue a written warning which shall be served in person or by certified mail, return receipt requested.  The warning shall include a brief description of the alleged violation, identification of this statute and applicable rules, a recommendation for corrective actions that may be taken by the person, along with a summary of federal and state assistance programs which may be utilized by the person to remedy the violation and a request for an abatement schedule from the person according to which the practice shall be altered.  The person shall have 30 days to respond to the written warning.  If the person fails to respond to the written warning within this period or to take corrective action to change the practices in order to protect water quality, the secretary may act pursuant to subsection (b) of this section in order to protect water quality.

(b)  After an opportunity for a hearing, the secretary may issue cease and desist orders and institute appropriate proceedings on behalf of the agency to enforce this chapter subchapter.

(c)  Whenever the secretary believes that any person engaged in farming is in violation of this chapter subchapter, an action may be brought in the name of the agency in a court of competent jurisdiction to restrain by temporary or permanent injunction the continuation or repetition of the violation.  The court may issue temporary or permanent injunctions, and other relief as may be necessary and appropriate to curtail any violations.

(c)(d)  The secretary may assess administrative penalties in accordance with sections 15, 16, and 17 of this title against any farmer who violates a cease and desist order or other order issued under subsection (b) of this section.

(d)(e)  Any person subject to an enforcement order or an administrative penalty who is aggrieved by the final decision of the secretary may appeal to the superior court within 30 days of the decision.  The environmental judge shall be a specially assigned superior court judge The administrative judge may specially assign an environmental judge to superior court for the purpose of hearing an appeal.

Sec. 3.  6 V.S.A. § 4813(b) is amended to read:

(b)  Any person engaged in farming that has been required by the secretary of agriculture, food and markets to implement best management practices or any person who has petitioned the secretary of agriculture, food and markets under subsection (a) of this section may appeal the secretary of agriculture, food and market’s decision to the water resources board environmental court de novo.

Sec. 4.  6 V.S.A. § 4815 is added to read:

§ 4815.  WASTE STORAGE FACILITY

(a)  No person shall construct a new waste storage facility or expand or modify a waste storage facility in existence on July 1, 2006 unless the facility meets the standard established for such facilities by the Natural Resources Conservation Service of the U.S. Department of Agriculture or an equivalent standard.  If an equivalent design standard is used, the design and construction shall be certified by the secretary of agriculture, food and markets or a licensed professional engineer operating within the scope of his or her expertise.

(b)  The secretary may require the owner or operator of a waste storage facility in existence on July 1, 2006, to modify the facility to meet the standard set forth in subsection (a) of this section if the facility poses a threat to human health or environment as established by a violation of the state groundwater protection standards.  If the secretary determines that a facility that meets the standard set forth in subsection (a) of this section poses a threat to human health or the environment, the secretary may require the owner or operator of the facility to implement additional management measures.  The costs of initial groundwater monitoring conducted to determine if a facility poses a threat to human health or the environment shall be paid by the secretary.  Within 21 days of a determination under this subsection that a facility poses a threat to human health or the environment, the secretary of agriculture, food and markets shall notify the department of health and the secretary of natural resources of the location of the facility and the name of its owner or operator.

(c)  For purposes of this section, “waste storage facility” means an impoundment made for the purpose of storing agricultural waste by constructing an embankment, excavating a pit or dugout, fabricating an in-ground or above-ground structure, or any combination thereof.  This section does not apply to concrete slabs used for agricultural waste management.

Sec. 5.  6 V.S.A. § 4826 is added to read:

§ 4826.  COST ASSISTANCE FOR WASTE STORAGE FACILITIES

(a)  The owner or operator of a farm required under section 4815 of this title to design, construct, or modify a waste storage facility may apply in writing to the secretary of agriculture, food and markets for cost assistance.  Using state or federal funds or both, a state assistance grant shall be awarded, subject to the availability of funds, to applicants.  Such grants shall not exceed 85 percent of the cost of an adequately sized and designed waste storage facility and the equipment eligible for Natural Resources Conservation Service cost share assistance.  Application for a state assistance grant shall be made in the manner prescribed by the secretary.  For purposes of this section, “waste storage facility” means an impoundment made for the purpose of storing agricultural waste by constructing an embankment, excavating a pit or dugout, fabricating an in-ground or above-ground structure, or any combination thereof.  This section does not apply to concrete slabs used for agricultural waste management.

(b)  If the secretary lacks adequate funds necessary for the cost assistance awards required by subsection (a) of this section, the secretary shall appear before the emergency board, as soon as possible, and shall request that necessary funds be provided.  If the emergency board fails to provide adequate funds, the design and construction requirements for waste storage facilities under subsection 4815(b) of this title and the AAPs for groundwater, as they relate to a waste storage facility, shall be suspended for a farm with a waste storage facility subject to the requirements of subsection 4815(b) of this title until adequate funding becomes available.  Suspension of the design and construction requirements of subsection 4815(b) of this title does not relieve an owner or operator of a farm permitted under section 4858 of this title from the remaining requirements of the owner’s or operator’s permit, including discharge standards, groundwater protection, nutrient management planning, and land application of manure.  This subsection does not apply to farms permitted under section 1263 of Title 10 or farms permitted under section 4851 of this title.

Sec. 6.  6 V.S.A. § 4827 is added to read:

§ 4827.  NUTRIENT MANAGEMENT PLANNING; INCENTIVE GRANTS

(a)  A farm developing or implementing a nutrient management plan under chapter 215 of this title or federal regulations may apply to the secretary of agriculture, food and markets for financial assistance.  The financial assistance shall be in the form of incentive grants.  Annually, after consultation with the U.S. Department of Agriculture Natural Resources Conservation Service,  natural resources conservation districts, the University of Vermont extension service and others, the secretary shall determine the average cost of developing and implementing a nutrient management plan in Vermont.  The dollar amount of an incentive grant awarded under this section shall be equal to the average cost of developing a nutrient management plan as determined by the secretary or the cost of complying with the nutrient management planning requirements of chapter 215 of this title or federal regulations, whichever is less.

(b)  Application for a state assistance grant shall be made in a manner prescribed by the secretary and shall include, at a minimum:

(1)  an estimated cost of developing and implementing a nutrient management plan for the applicant;

(2)  the amount of incentive grant requested; and

(3)  a schedule for development and implementation of the nutrient management plan.

(c)  The secretary annually shall prepare a list of farms ranked, regardless of size, in priority order that have applied for an incentive grant under this section.  The priority list shall be established according to factors that the secretary determines are relevant to protect the quality of waters of the state, including:

(1)  the proximity of a farm to a water listed as impaired for agricultural runoff, pathogens, phosphorus, or sediment by the agency of natural resources;

(2)  the proximity of a farm to an unimpaired water of the state;

(3)  the proximity of a drinking water well to land where a farm applies manure; and

(4)  the risk of discharge to waters of the state from the land application of manure by a farm.

(d)  Assistance in accordance with this section shall be provided from state funds appropriated to the agency of agriculture, food and markets for integrated crop management.

(e)  If the secretary lacks adequate funds necessary for the financial assistance required by subsection (a) of this section, the requirement to develop and implement a nutrient management plan under state statute or state regulation shall be suspended until adequate funding becomes available.  Suspension of a state-required nutrient management plan does not relieve an owner or operator of a farm permitted under section 4858 of this title of the remaining requirements of a state permit, including discharge standards, groundwater protection, and land application of manure.  This subsection does not apply to farms permitted under section 1263 of Title 10 or farms permitted under section 4851 of this title.

(f)  The secretary may contract with natural resources conservation districts, the University of Vermont extension service, and other persons and organizations to aid in the implementation of the incentive grants program under subsection (a) of this section and to assist farmers in the development and implementation of nutrient management plans.

Sec. 7.  6 V.S.A. § 4850 is amended to read:

§ 4850.  DEFINITIONS

For purposes of this subchapter:

(1)  “Animal unit” means 1,000 pounds of live body weight of livestock. Animal units are calculated by adding the following numbers: the number of slaughter and feeder cattle multiplied by 1.0, plus the number of mature dairy cattle multiplied by 1.4, plus the number of swine weighing over 25 kilograms multiplied by 0.4, plus the number of sheep multiplied by 0.1, plus the number of horses multiplied by 2.0, for any large farm operation.

(2)(1)  “Domestic fowl” means laying-hens, broilers, ducks, and turkeys.

(3)(2)  “Livestock” means cattle, swine, sheep, or horses.

Sec. 8.  6 V.S.A. § 4851 is amended to read:

§ 4851.  PERMIT REQUIREMENTS FOR LARGE FARM OPERATIONS

(a)  No person shall, without a permit from the secretary, construct a new barn, or expand an existing barn, designed to house more than 700 mature dairy animals, 1,000 cattle or cow/calf pairs, 1,000 veal calves, 2,500 swine weighing over 55 pounds, 10,000 swine weighing less than 55 pounds, 500 horses, 10,000 sheep or lambs, 55,000 turkeys, 30,000 laying hens or broilers with a liquid manure handling system, 82,000 laying hens without a liquid manure handling system, 125,000 chickens other than laying hens without a liquid manure handling system, 5,000 ducks with a liquid manure handling system, or 30,000 ducks without a liquid manure handling system.  No permit shall be required to replace an existing barn in use for livestock or domestic fowl production at its existing capacity.  The secretary of agriculture, food and markets, in consultation with the secretary of natural resources, shall review any application for a permit under this section with regard to water quality impacts and, prior to approval of a permit under this subsection, shall issue a written determination regarding whether the applicant has established that there will be no unpermitted discharge to waters of the state pursuant to the federal regulations for concentrated animal feeding operations.  If upon review of an application for a permit under this subsection, the secretary of agriculture, food and markets determines that the permit applicant may be discharging to waters of the state, the secretary of agriculture, food and markets and the secretary of natural resources shall respond to the discharge in accordance with the memorandum of understanding regarding concentrated animal feeding operations under subsection 4810(b) of this title.  The secretary of natural resources may require a large farm to obtain a permit under section 1263 of Title 10 pursuant to federal regulations for concentrated animal feeding operations.

* * *

(d)  A person seeking a permit under this section shall apply in writing to the secretary.  The application shall include a description of the proposed barn or expansion of animal units livestock or domestic fowl; a proposed nutrient management plan to accommodate the number of livestock or domestic fowl the barn is designed to house or expand to; and a description of the manure management system to be used to accommodate agricultural wastes.

* * *

Sec. 9.  6 V.S.A. § 4852 is amended to read:

§ 4852.  RULES

The secretary may adopt rules pursuant to chapter 25 of Title 3 concerning program administration, program enforcement, appeals and standards for waste management and waste storage, setbacks or siting criteria for new construction or expansion, groundwater contamination, odor, noise, traffic, insects, flies, and other pests in order to implement this subchapter.  In no case shall the rules be stricter than the federal regulations when adjusted where appropriate to 95 percent of the federal threshold governing concentrated animal feeding operations, as set forth in the EPA Guide Manual on NPDES Regulations and in EPA Document 833-B-95-001 of December, 1995.  The siting criteria adopted by the secretary by rule shall be consistent with the standards for the quality of state waters and standards for acceptable agricultural practices pursuant to subchapter 2 of this chapter.  The groundwater contamination rules adopted by the secretary shall include a process under which the agency shall receive, investigate, and respond to a complaint that a farm has contaminated the drinking water or groundwater of a property owner.

Sec. 10.  6 V.S.A. § 4853 is amended to read:

§ 4853.  INFORMATIONAL MEETING

(a)  Upon receipt by the secretary of a permit application for construction of a new barn under this subchapter, the secretary shall establish an advisory group to assist in reviewing the application.  The advisory group shall consist of, in addition to the secretary, the secretary of natural resources or his or her duly authorized representative, a farmer appointed by the governor, and a representative of the legislative body of the municipality in which the proposed facility would be located.  Such representative shall be appointed by the legislative body but need not be a resident of the municipality.  The secretary may establish the advisory group pursuant to this subsection upon receipt of a permit application for expansion of an existing barn under this subchapter.

(b)  The secretary shall conduct an informational meeting in a municipality when there is a proposal to construct a new barn, within the municipality, that would require a permit under this subchapter.

(b)(c)  The secretary may conduct an informational meeting in a municipality in which a barn expansion is sought, if the barn is already subject to permitting requirements under this subchapter.

(c)(d)  The secretary shall upon request prepare in writing the response of the agency to matters raised during a meeting held pursuant to this section, or submitted to the secretary in writing.  Such response shall pertain to considerations required under this subchapter.

Sec. 11.  6 V.S.A. § 4858 is amended to read:

§ 4858.  ANIMAL WASTE PERMITS

* * *

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

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

* * *

(c)(1)  Medium farm general permit.  The owner or operator of a medium farm seeking coverage under a general permit adopted pursuant to this section shall certify to the secretary within a period specified in the permit, and in a manner specified by the secretary, that the medium farm does comply with permit requirements regarding an adequately sized and designed manure management system to accommodate the wastes generated and a nutrient management plan to dispose of wastes in accordance with accepted agricultural practices adopted under this chapter.  Any certification or notice of intent to comply submitted under this subdivision shall be kept on file at the agency of agriculture, food and markets.  The secretary of agriculture, food and markets, in consultation with the secretary of natural resources, shall review any certification or notice of intent to comply submitted under this subdivision with regard to the water quality impacts of the medium farm for which the owner or operator is seeking coverage, and, within 18 months of receiving the certification or notice of intent to comply, shall verify whether the owner or operator of the medium farm has established that there will be no unpermitted discharge to waters of the state pursuant to the federal regulations for concentrated animal feeding operations.  If upon review of a medium farm granted coverage under the general permit adopted pursuant to this subsection, the secretary of agriculture, food and markets determines that the permit applicant may be discharging to waters of the state, the secretary of agriculture, food and markets and the secretary of natural resources shall respond to the discharge in accordance with the memorandum of understanding regarding concentrated animal feeding operations under subsection 4810(b) of this title.

(2)  The owner or operator of a small farm may seek coverage under the medium farm general permit adopted pursuant to this section by certifying to the secretary, in a manner specified by the secretary, that the small farm complies with the requirements and conditions of the medium farm general permit.

(d)  Medium and small farms; individual permit.  Upon determination by the secretary that a medium or small farm may be a significant contributor of pollutants to the waters of the state, the secretary may require the farm to obtain an individual permit in order to continue in operation  The secretary may require the owner or operator of a small or medium farm to obtain an individual permit to operate after review of the farm’s history of compliance, application of accepted agricultural practices, the use of an experimental or alternative technology or method to meet a state performance standard, or other factors set forth by rule.  The owner or operator of a small farm may apply to the secretary for an individual permit to operate under this section.  To receive such a an individual permit, an applicant shall in a manner prescribed by rule demonstrate that the farm has an adequately sized and designed manure management system to accommodate the wastes generated and a nutrient management plan to dispose of wastes in accordance with accepted agricultural practices adopted under this chapter, including setback requirements for waste application.  An individual permit shall be valid for no more than five years.  Any application for an individual permit filed under this subsection shall be kept on file at the agency of agriculture, food and markets.  The secretary of agriculture, food and markets, in consultation with the agency of natural resources, shall review any application for a permit under this subsection and, prior to issuance of an individual permit under this subsection, shall issue a written determination regarding whether the permit applicant has established that there will be no unpermitted discharge to waters of the state pursuant to federal regulations for concentrated animal feeding operations.  If, upon review of an application for a permit under this subsection, the secretary of agriculture, food and markets determines that the permit applicant may be discharging to waters of the state, the secretary of agriculture, food and markets and the secretary of natural resources shall respond to the discharge in accordance with the memorandum of understanding regarding concentrated animal feeding operations under subsection 4810(b) of this title.  The secretary of natural resources may require a medium or small farm to obtain a permit under section 1263 of Title 10 pursuant to federal regulations for concentrated animal feeding operations.  Coverage of a medium farm under a general permit adopted pursuant to this section or an individual permit issued to a medium or small farm under this section is rendered void by the issuance of a permit to a farm under section 1263 of Title 10.

* * * Agency of Natural Resources * * *

Sec. 12.  10 V.S.A. § 1259(f) is amended to read:

(f)  The provisions of subsections (c), (d), and (e) of this section shall not regulate accepted agricultural or silvicultural practices, as such are defined by the secretary of agriculture, food and markets and the commissioner of forests, parks and recreation, respectively, after an opportunity for a public hearing; nor shall these provisions regulate discharges from concentrated animal feeding operations that require a permit under section 1263 of this title; nor shall those provisions prohibit stormwater runoff or the discharge of nonpolluting wastes, as defined by the board.

Sec. 13.  10 V.S.A. § 1263(g) is added to read:

(g)  Notwithstanding any other provision of law, any person who owns or operates a concentrated animal feeding operation that requires a permit under the federal National Pollutant Discharge Elimination System permit regulations shall submit an application to the secretary for a discharge permit and pay the required fees specified in 3 V.S.A. § 2822.  On or before July 1, 2007, the secretary of natural resources shall adopt rules implementing the federal National Pollutant Discharge Elimination System permit regulations for discharges from concentrated animal feeding operations.  Until such regulations are adopted, the substantive permitting standards and criteria used by the secretary to evaluate applications and issue or deny discharge permits for concentrated animal feeding operations shall be those specified by federal regulations.  The secretary may issue an individual or general permit for these types of discharges in accordance with the procedural requirements of subsection (b) of this section and other state law.  For the purposes of this subsection, “concentrated animal feeding operation” means a farm that meets the definition contained in the federal regulations.

Sec. 14.  10 V.S.A. § 1264(e)(2) is amended to read:

(2)  As one of the principal means of administering an enhanced stormwater program, the secretary may issue and enforce general permits.  To the extent appropriate, such permits shall include the use of certifications of compliance by licensed professional engineers practicing within the scope of their engineering specialty.  The secretary may issue general permits for classes of regulated stormwater runoff permittees and may specify the period of time for which the permit is valid other than that specified in subdivision 1263(d)(4) of this title when such is consistent with the provisions of this section.  General permits shall be adopted and administered in accordance with the provisions of subsection 1263(b) of this title.  No permit is required under this section for:

(A)  stormwater Stormwater runoff from farms subject to accepted agricultural practices adopted by the secretary of agriculture, food and markets;

(B)  Stormwater runoff from concentrated animal feeding operations that require a permit under subsection 1263(g) of this chapter; or

(C)  for stormwater Stormwater runoff from silvicultural activities subject to accepted management practices adopted by the commissioner of forests, parks and recreation.

Sec. 15.  AGENCY OF AGRICULTURE WATER QUALITY OUTREACH, EDUCATION, AND TRAINING

(a)  Prior to February 2006, the agency of agriculture, food and markets shall develop educational and training programs and conduct public hearings to inform farmers in Vermont of the requirements of this act, the proposed general permit for medium farm operations, and the federal regulations for concentrated animal feeding operations.  In developing the education programs required by this section, the agency may utilize various types of media, group meetings, on-farm demonstrations, and one-on-one farm visits.

(b)  The agency of agriculture, food and markets, in consultation with the agency of natural resources, shall coordinate the training of staff from the natural resources conservation districts, the University of Vermont extension service, the Natural Resources Conservation Service, and other persons and organizations regarding the requirements of the state animal waste permit program and what may constitute a discharge from a concentrated animal feeding operation.

Sec. 16.  ANNUAL REPORT

(a)  On January 1 of each year, the agency of natural resources shall submit an annual report to the house and senate committees on agriculture, the house committee on fish, wildlife and water resources, and the senate committee on natural resources and energy regarding implementation by the agency of a National Pollutant Discharge Elimination System (NPDES) permit program for farms subject to the federal Clean Water Act regulations for concentrated animal feeding operations (CAFOs).  The report shall include:

(1)  a summary of the status of the federal regulations;

(2)  a summary of the litigation challenging the federal regulations;

(3)  a summary of any revised rulemaking by the U.S. Environmental Protection Agency;

(4)  a recommendation by the agency of natural resources regarding the rules regulating discharges from concentrated animal feeding operations;

(5)  a copy of the memorandum of understanding for concentrated animal feeding operations required by section 4810 of Title 6 and a recommendation by the agency of natural resources regarding any need to amend the memorandum of understanding;

(6)  an assessment of the impact on surface water quality of the implementation of agricultural water quality programs in the state; and

(7)  a summary of the impact on small farms of the implementation of the NPDES permit program, including the number of small farms required to obtain an NPDES permit.

(b)  On January 1 of each year, the agency of agriculture, food and markets shall submit an annual report to the house and senate committees on agriculture, the house committee on fish, wildlife and water resources, and the senate committee on natural resources and energy concerning the status of the state animal waste permit program.  The report shall include:

(1)  an assessment of the adequacy of agricultural waste storage and land application of manure on farms in Vermont;

(2)  an assessment of the extent of the financial and technical resources required to implement successfully the state agricultural water quality program, including the number of nutrient management plans required, the number of waste storage facilities that require upgrading, and an estimate of the appropriations necessary to fund state assistance programs;

(3)  the status of rulemaking for the medium farm general permit;

(4)  the status of any pending or proposed rulemaking for large farms or accepted agricultural practices;

(5)  a summary of the year-to-date funding of the nutrient management planning by the agency of agriculture, food and markets;

(6)  a summary of agency efforts to develop educational programs and conduct public hearings to inform farmers in Vermont of the requirements of this act, the proposed general permit for medium farm operations, and the status of the federal regulations for concentrated animal feeding operations;

(7)  an assessment of the impact of the state agricultural water quality program on small farms in Vermont, including the number of small farms voluntarily entering the program and the number of small farms required to obtain a state animal waste permit;

(8)  a summary of the financial and technical assistance provided to farms, including the type and amount of assistance awarded according to farm size; and

(9)  an assessment of the impact on the groundwater of the state of the implementation of the state agricultural water quality program.

Sec. 17.  SUNSET

Sec. 16 of this act (annual report) shall be repealed on January 2, 2010.

Sec. 18.  EFFECTIVE DATE

This act shall take effect on passage.

Committee on the part of                  Committee on the part of

The Senate                                                   The House

Sen. Sara Kittell                                Rep. David Deen

Sen. Virginia Lyons                          Rep. Mitzi Johnson

Sen. Robert Starr                              Rep. Harvey Smith

Which was considered and adopted on the part of the House.

Bills Messaged to Senate Forthwith

On motion of Rep. Sunderland of Rutland Town, the rules were suspended and the following bills were ordered messaged to the Senate forthwith:

S. 66

An act relating to the welfare of animals;

 

S. 80

An act relating to increasing the minimum wage;

S. 159

An act relating to updating and clarifying education law.

 

S. 171

An act relating to agricultural water quality;

J.R.S. 36

An act relating to relative to federal policy concerning MTBE;

Adjournment

At seven o’clock in the evening, on motion of Rep. Sunderland of Rutland Town, the House adjourned until tomorrow at nine o’clock and thirty minutes in the forenoon.

Concurrent Resolutions Adopted

     The following concurrent resolutions, having been placed on the Consent Calendar on the preceding legislative day, and no member having requested floor consideration  as provided by the Joint Rules of the Senate and House of Representatives, are hereby adopted in concurrence.

H.C.R.  153

House concurrent resolution congratulating Burr and Burton Academy on its 175th anniversary

H.C.R.  154

     House concurrent resolution congratulating Linda Wheatley and Suvannee Promchan for their roles in the Montpelier High School students’ 2005 excursion to Thailand

H.C.R.  155

House concurrent resolution congratulating the 2005 Project Citizen winners

from Twinfield Union School

H.C.R.  156

House concurrent resolution congratulating Betty Hatch on being named the 2005 Martha H. O’Connor Friend of Education

H.C.R.  157

House concurrent resolution congratulating Abigail Swan on her designation as the 2005 Vermont State Boys & Girls Clubs Youth of the Year

 

H.C.R.  158

House concurrent resolution congratulating Cathy Howland of Springfield on her receipt of commendations as a registered nurse

H.C.R.  159

House concurrent resolution congratulating the 2004 Lamoille Union High School Lancers Division II championship girls’ soccer team

H.C.R.  160

House concurrent resolution honoring former Representative Hazel Prindle of Charlotte for her decades of outstanding civic and community service

H.C.R.  161

House concurrent resolution commemorating the history of the town of Sterling

H.C.R.  162

House concurrent resolution honoring Stacie Lee Blake for her work on behalf of refugees and immigrants in Vermont

H.C.R.  163

House concurrent resolution congratulating the Vermont Arts Council on its 40th anniversary

H.C.R.  164

House concurrent resolution congratulating the Catalyst Theatre Company’s Thumbs Up! Showcase on its tenth anniversary gala

H.C.R.  165

House concurrent resolution in memory of the American military personnel who have died in service of their nation in Iraq since January 5, 2005

H.C.R.  166

House concurrent resolution congratulating the Harwood Union High School student producers of the video documentary “Common Ground:  The Stories of Waterbury to Warren”

H.C.R.  167

House concurrent resolution congratulating Sonnax Industries Inc. of Bellows Falls on its designation as the Vermont International Business Council’s Exporter of the Year

H.C.R.  168

House concurrent resolution in memory of Allison Hansen, Joshua Nutbrown, and Justin Nutbrown

H.C.R. 169

House concurrent resolution commemorating the 100th anniversary of the establishment of the Daughters of the Charity of the Sacred Heart of Jesus

 

H.C.R.  170

House concurrent resolution congratulating Walter Weaver of Northfield on winning the grades 3 - 5 division of the secretary of state’s 2005 poster contest

H.C.R.  171

     House concurrent resolution commemorating the dedication of the Robert T. Stafford United States Navy Memorial on Lake Champlain

 

H.C.R.  172

House concurrent resolution congratulating Tomomi Shimabukuro on her designation as the 2005 Capital Division’s girl basketball player of the year

 

H.C.R.  173

House concurrent resolution recognizing Debora Price’s outstanding educational leadership as principal of the Beeman Elementary School in New Haven

H.C.R.  174

House concurrent resolution congratulating the town of Jamaica on its 225th anniversary

H.C.R.  175

House concurrent resolution congratulating the 2005 Black River Union High School girls’ championship snowboarding team

H.C.R.  176

House concurrent resolution honoring Brock Alan Tucker of South Burlington on becoming an Eagle Scout

H.C.R.  177

House concurrent resolution honoring Harvey Sharrow of Charlotte

H.C.R. 178

     House concurrent resolution the Crossett Brook Middle School Odyssey of the Mind team on its outstanding Vermont and world competition performances

H.C.R. 179

     House concurrent resolution congratulating Linda Conrad on her retirement from Dan and Whit’s General Store in Norwich

 

H.C.R.  180

House concurrent resolution congratulating Gail B. Conley on his outstanding career in public education

H.C.R.  181

House concurrent resolution honoring Robert F. Stevens for his outstanding career in public education

H.C.R.  182

House concurrent resolution in memory of former Representative Robert D. Yoder of Springfield

S.C.R. 40

       Senate concurrent resolution extending best wishes to former Representative Curt McCormack and Nicole Dewing as they embark on a new path as Peace Corps volunteers in Senegal.        

 

S.C.R. 41

  Senate concurrent resolution congratulating Woodbury College on its 30th anniversary.

S.C.R. 42

  Senate concurrent resolution honoring Deputy Attorney General J. Wallace Malley for his exemplary public service on behalf of the state of Vermont.

     [The full text of the concurrent resolutions appeared in the Senate and House Calendar Addendum on the preceding legislative day and will appear in the volume of the Public Acts and Resolves of the 2005 Biennial session of the sixty-eighth biennial session]