Journal of the Senate

________________

Friday, June 3, 2005

The Senate was called to order by the President.

Devotional Exercises

A moment of silence was observed in lieu of devotions.

Bills Referred

House bills of the following titles were severally read the first time and referred:

H. 325.

An act relating to workers’ compensation compensability of heart attacks suffered by firefighters and police officers.

To the Committee on Economic Development, Housing and General Affairs.

H. 361.

An act relating to chemical sensitivities in state buildings.

To the Committee on Institutions.

Rules Suspended; House Proposal of Amendment Not Concurred In; Committee of Conference Requested; Committee of Conference Appointed; Bill Messaged

S. 56.

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

An act relating to restructuring the agency of natural resources.

Was taken up for immediate consideration.

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

Sec. 1.  LEGISLATIVE FINDINGS AND PRINCIPLES

The general assembly finds:

(1)  The lives of all Vermonters are affected by the agency of natural resource’s ability to carry out its duties to protect and responsibly manage Vermont’s precious natural resources for the benefit of current and future generations.

(2)  The following obstacles currently prevent the agency of natural resources from consistently meeting its statutory obligations:

(A)  Agency of natural resources programs in the three agency departments (the department of environmental conservation, the department of fish and wildlife, and the department of forests, parks and recreation) are not always sufficiently well integrated.

(B)  A significant number of agency of natural resources staff work in regional offices throughout the state.  These staff are familiar with and focused on meeting the unique natural resources challenges of their regions.  However, there is also a need to ensure that the practices implemented in the regions are connected to basic agency-wide policies and to the agency management system.  If coordination between regional and central agency staff is insufficient, inconsistent application of agency policies may result.

(C)  The following examples attest to the challenges faced by the agency of natural resources in meeting state and federal statutory mandates in a timely manner:

(i)  The agency has not completed the basin planning requirement in state and federal law.

(ii)  The agency has not completed basic, minimal groundwater mapping for aquifers serving public water systems as required by state law.

(iii)  The agency has not completed implementation of key components of the federal Clean Water Act, such as developing total maximum daily loads (TMDL) and developing an antidegradation implementation policy.

(D)  Public and agency attention to simplifying and streamlining the permitting process for applicants should be accompanied by commensurate progress in measuring the effectiveness of the regulatory process in protecting the interests of others and in determining and tracking the status and the health of the natural resources that it is the agency’s mission to protect.

(E)  The problems faced by the agency of natural resources may be the result of a lack of agency resources, complex and interwoven statutory programs established at different times and often in response to different federal laws, restrictions on the use of federal funds, an inefficient allocation of existing resources, inefficiencies in the agency management structure, or any combination of these and other factors.


(F)  Currently, there is not a clear and consistent connection between the agency’s own policy, planning, and implementation work and core environmental issues that are being addressed to some degree by other state agencies (including state long-range transportation planning, energy planning, and planning to address global climate change). 

(3)  Good policy and planning are vital to any large agency’s ability to efficiently carry out its responsibilities.  The agency’s planning and policy efforts must be well connected, based on the law, and communicated to the staff who implement these policies.  The agency’s internal policy must be coordinated with planning efforts in the individual departments.

(4)  The agency must have a clear, well articulated vision to implement the state’s environmental policy as established by law.  This must be done in a manner that connects to the work of all the departments and guides staff implementation.

Sec. 2.  RESTRUCTURING PROCESS

The secretary shall engage in the following process as preliminary steps in a potential restructuring of the agency:

(1)  In order to implement state environmental policy for the benefit of current and future generations, the secretary, with the assistance of a consultant, shall:

(A)  Collaborate with agency staff, advocacy groups, other state agencies, municipalities, and other stakeholders to receive input on organizational models and the design of the agency.  This process may include focus groups, public meetings, newsletters, surveys, and the use of a website.

(B)  Collaborate with agency staff, advocacy groups, other state agencies, municipalities, and other stakeholders to determine specific accountability indicators needed to measure agency restructuring, both with respect to the reallocation of agency resources and personnel, but also with respect to the agency’s ability to perform its duties to protect the state’s natural resources.

(C)  Examine areas where consultation may be needed, such as information technology design, federal cost allocation, and organizational development.

(D)  Identify and implement staff development programs necessary to assist the agency staff to carry out their responsibilities in the restructured agency.


(E)  Hold public hearings with respect to the functions of the agency, and the issues identified in this act, in each of the agency’s five administrative districts and provide public notice of each public hearing.

(F)  Establish a process to solicit input from agency staff.  For purposes of this act only, the provisions of the collective bargaining contract article on whistle blower, as printed in the agreements between the State of Vermont and the Vermont State Employees’ Association, are extended to all employees in the agency not covered by these agreements.

(2)  The secretary shall examine functions, such as administrative support and supervision, and space requirements necessary to ensure the agency’s ability to be responsive and helpful to permit applicants, neighbors, and others interested in and affected by the permitting process.

(3)  On or before January 15, 2006, the secretary shall prepare and present a report on restructuring to the legislative Committees on Natural Resources and Energy  and on Government Operations.

(A)  The  report  shall contain recommendations to restructure the agency, and a progress report on the procedures followed and on administrative actions that have been taken or that are being taken to complete the process.  The report shall list persons and organizations who have participated in the process, and shall include:

(i)  Identification of resources and agency action that would be required to implement fully and adequately state and federal natural resources law.

(ii)  A plan for making the agency’s permit process, enforcement actions, planning, and other functions more accessible in order to be more effective, efficient, transparent, integrated, and accountable.  This shall include resources required and a recommended time frame needed for implementation of the plan;

(iii)  Accountability mechanisms to ensure that alleged permit violations are forwarded to the agency’s enforcement division, that there is a sufficient enforcement presence to give the natural resources the protection anticipated by the pertinent underlying legislation and that those who do not comply with the law are not given an unfair advantage over those who do;

(iv)  Provision of policy guidance from the agency’s planning efforts to coordinate between the agency’s departments and divisions in a manner that protects the state’s resources while responding to legitimate interests of applicants and others involved in the permitting process;


(B)  The report shall include any draft legislation necessary to eliminate contradictions that have been identified to date in existing statutes, and to allow progress in any reorganization proposed by the agency;

(C)  The report shall explain the anticipated budgetary impacts and transitional costs of  the proposed restructuring; and

(D)  The report shall include recommendations for improving coordination of functions that are shared with, or that overlap with, those of other state agencies and units of local government.

(E)  Notwithstanding the appropriate focus on the department of environmental conservation, in preparing the report, the secretary shall accord an adequate proportion of attention and resources to an evaluation of the potential reorganization of the department of fish and wildlife, and the department of forests, parks and recreation.

Sec. 3.  APPROPRIATION

The sum of $50,000.00 is appropriated from the general fund to the agency of natural resources in fiscal year 2006 for the purpose of hiring a consultant‑facilitator to assist in implementation of this act.

Thereupon, pending the question, Shall the Senate concur in the House proposal of amendment?, on motion of Senator Lyons, the Senate refused to concur in the House proposal of amendment and requested a Committee of Conference.

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

                                         Senator Lyons

                                         Senator Snelling

                                         Senator Bartlett

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

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

Rules Suspended; Proposal of Amendment; Third Reading Ordered; Rules Suspended; Bill Passed in Concurrence with Proposal of Amendment

H. 540.

Appearing on the Calendar for notice, on motion of Senator Welch, 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.

Senator Kittell, for the Committee on Agriculture, to which the bill was referred, reported recommending that the Senate propose to the House to amend the bill by striking out 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.

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

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

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

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

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


Rules Suspended; Proposal of Amendment; Third Reading Ordered; Rules Suspended; Joint Resolution Adopted in Concurrence with Proposal of Amendment

J.R.H. 40.

Appearing on the Calendar for notice, on motion of Senator Welch, the rules were suspended and joint House resolution entitled:

Joint resolution authorizing the commissioner of forests, parks and recreation to sell designated state funds.

Was taken up for immediate consideration.

Senator Giard, for the Committee on Institutions, to which the joint resolution was referred, reported recommending that the Senate propose to the House to amend the joint 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.

And that the resolution ought to be adopted in concurrence with such proposals of amendment.

Thereupon, the joint resolution was read the second time by title only pursuant to Rule 43, the proposal of amendment was agreed to, and third reading of the joint resolution was ordered.

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

Thereupon, the joint resolution was read the third time and adopted in concurrence with proposal of amendment.

Rules Suspended; Third Reading Ordered

J.R.S. 39.

Appearing on the Calendar for notice, on motion of Senator Welch, the rules were suspended and joint Senate resolution entitled:

Joint resolution supporting the application of the Village of Enosburg Falls electric light department to the public service board for a rate cost shift

Was taken up for immediate consideration.

     Senator Ayer, for the Committee on Finance, to which the joint resolution was referred, reported recommending that the joint resolution be amended by striking out the joint resolution in its entirety and inserting in lieu thereof the following:

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.

And that the resolution ought to be adopted when so amended.

Thereupon, the joint resolution was read the second time by title only pursuant to Rule 43, recommendation of amendment agree to and third reading of the joint resolution was ordered.

Thereupon, on motion of Senator Mazza, the rules were suspended and the bill was placed on all remaining stages of its adoption forthwith.

Thereupon, the joint resolution was read the third time and adopted on the part of the Senate.

Rules Suspended; House Proposals of Amendment to Senate Proposal of Amendment Concurred In

H. 543.

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

An act relating to long-term care waiver.

Was taken up for immediate consideration.

The House concurs in the Senate proposal of amendment with the following amendment thereto:

First:  By striking out Sec. 1 in its entirety and inserting in lieu thereof a new Sec. 1 to read as follows:

Sec. 1.  LONG-TERM CARE MEDICAID 1115 WAIVER

(a)  The department of aging and independent living shall implement the long-term care Medicaid 1115 waiver by rule in fiscal year 2006 upon approval from the Centers for Medicare and Medicaid Services.  The rules for operation of the 1115 waiver shall include criteria and standards for eligibility, levels of assistance, assessments, and reviews, and the appeal and fair hearing process.  Final proposed rules filed pursuant to this act shall be filed with the chair of the health access oversight committee created in Sec. 13 of No. 14 of the Acts of 1995.  If the long-term care Medicaid 1115 waiver is included in a broader Medicaid waiver, including the “global commitment,” the provisions of this act shall apply to the relevant portions of that waiver.

(b)  Outside the legislative session, the health access oversight committee shall have oversight for the development, implementation, and ongoing operation of any long-term care Medicaid waivers applied for and received by the agency of human services.  The secretary of human services shall report to the committee upon its request and annually to the general assembly by January 15.

(c)(1)  If the long-term care Medicaid 1115 waiver is approved, the department shall implement the waiver in such a manner as to assure that any individual receiving services on the date the waiver becomes effective shall continue to receive appropriate services.  The process for reassessing entitlement for services for individuals under this subdivision is as follows:

(A)  The individual shall first be assessed under the new level of care criteria established under the waiver to determine entitlement to services.

(B)  If the individual is no longer entitled to services under the new criteria, the individual shall be assessed under the Guidelines for Nursing Home Eligibility adopted in April 1997, which is the level of care criteria in effect prior to the waiver.  If the individual is entitled to services under the Guidelines, the individual shall continue to receive services.

(C)  If the individual is not entitled to services under subdivision (A) or (B) of this subdivision (1), the individual shall no longer receive services, but shall be treated appropriately under the new rules.

(2)  The department shall adopt by rule a process by which an individual who is eligible for, but not entitled to, services and who is in the high needs group as defined by the waiver may apply for an exception to the entitlement rule if the individual has a critical need for long-term care services due to special circumstances. 

(3)  The department shall develop and maintain waiting lists both of applicants categorized by need level for whom there is insufficient funding to provide services under the long-term care Medicaid 1115 waiver and of individuals applying for long‑term care services under state-funded programs.

(d)  The department shall adopt by rule a process by which individuals entering the long-term care system are assessed and informed of their options prior to entering a nursing home.  The rule shall ensure that the assessment and information is provided in a timely manner so as not to delay discharges from
hospitals and shall include provisions for emergency admissions to nursing homes.

(e)  The department shall prioritize the provision of homemaker services to individuals who have high needs as defined under the long‑term care Medicaid 1115 waiver and are on the waiting list for long-term care services.

(f)  If a modification in the rules is necessary outside the legislative session to ensure that the funding for entitled individuals is not jeopardized, the department shall file recommended modifications to the health access oversight committee.  After the review and recommendation of the health access oversight committee or within three weeks of filing, whichever is earlier, the department may adopt interim changes by rule under the expedited rulemaking process set out in Sec. 27(b) of H.537 [Medicaid budget]. 

(g)  Any savings realized due to the implementation of the long-term care Medicaid 1115 waiver shall be retained by the department and reinvested into providing home- and community‑based services under the waiver.  If at any time the agency reapplies for a Medicaid waiver to provide these services, it shall include a provision in the waiver that any savings shall be reinvested.

(h)  “Long-term care” means care or services received by an individual in a nursing home, or through home- and community‑based services designed to assist older Vermonters and people with disabilities to remain independent and avoid inappropriate institutionalization.  “Home- and community‑based services” include:

(1)  services funded through a long-term care Medicaid 1115 waiver;

(2)  services provided to individuals with traumatic brain injury through a Medicaid waiver;

(3)  services provided in residential care homes and assisted living residences;

(4)  assisted community care services;

(5)  attendant services;

(6)  homemaker services;

(7)  services funded through the Older Americans Act;

(8)  adult day services;

(9)  home health services;

(10)  respite services for families including an individual with Alzheimer’s disease;


(11)  services provided by the Home Access Project of the Vermont Center for Independent Living;

(12)  programs providing meals for young people with disabilities;

(13)  services provided by the Sue Williams Freedom Fund of the Vermont Center for Independent Living;

(14)  living skills services from the Vermont Association for the Blind and Visually Impaired;

(15)  services under the Program for All-Inclusive Care of the Elderly (PACE);

(16)  services under the Home Share Vermont program; and

(17)  transportation services.

Second:  By adding two new sections to be numbered Secs. 1a and 1b to read as follows:

Sec. 1a.  TASK FORCE ON THE FUTURE SUSTAINABILITY OF NURSING HOMES

The commissioner of aging and independent living shall convene a task force to assist the commissioner in developing statewide recommendations on the future of nursing homes, including the Vermont Veterans’ Home, in Vermont.  The recommendations shall address the transition issues for nursing homes as more individuals use home- and community‑based long‑term care services, how nursing homes can convert the services offered to provide

long-term care services differently, unmet needs for nursing home services for individuals, accessibility for individuals with disabilities in nursing homes, and the methods which nursing homes can use to become more resident‑centered in the provision of long-term care.  The task force shall include representatives from providers of long-term care and organizations representing individuals receiving long-term care.  The department of aging and independent living shall chair the task force and shall provide administrative support.  The department of aging and independent living shall report to the house committee on human services and the senate committee on health and welfare on the recommendations developed under this section by January 15, 2007.

Sec. 1b.  MORTALITY REPORT

The commissioners of the department of aging and independent living and the department of health, in consultation with other individuals and organizations and the state long‑term care ombudsman, shall develop a plan for annually reporting, reviewing, and analyzing deaths of individuals who receive long‑term care. The department of health shall provide public health statistics and consultation from the chief medical examiner. The commissioners shall report the plan to the house committee on human services and the senate committee on health and welfare by January 15, 2006. For the purposes of this section, “long-term care” shall have the same meaning as in 33 V.S.A.

§ 7051(1).

Third:  By adding a new section to be numbered Sec. 3a to read as follows:

Sec. 3a.  NURSING HOME RATES

(a)  Any change in the method for calculating nursing home rates to a calculation based on a certain number of nursing home bed days shall follow the process established in chapter 25 of Title 3.

(b)  The agency of human services shall amend the Medicaid Payment Rates for Long Term Care Facilities Rules to include the following criteria to be considered by the agency when determining eligibility for a special rate under Rule 10.3:

(13)  the ratio of individuals receiving care in a nursing facility to individuals receiving home- and community‑based services in the county in which the facility is located.

Fourth:  By striking out Sec. 5 in its entirety.

Thereupon, the question, Shall the Senate concur in the House proposals of amendment to the Senate proposal of amendment?, was decided in the affirmative.

Rules Suspended; Bills Messaged

On motion of Senator Mazza, the rules were suspended, and the following bills were ordered messaged to the House forthwith:

H. 540; H. 543.

Rules Suspended; Joint Resolutions Messaged

On motion of Senator Mazza, the rules were suspended, and the following joint resolutions were ordered messaged to the House forthwith:

J.R.S. 39; J.R.H. 40.


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

H. 524.

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

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

Was taken up for immediate consideration.

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

To the Senate and House of Representatives:

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

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

Respectfully reports that it has met and considered the same and recommends that the bill be amended by striking out 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 VermontTo 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.


                                                                        ANN E. CUMMINGS

                                                                        JAMES P. LEDDY

                                                                        PETER F. WELCH

                                                                 Committee on the part of the Senate

                                                                        JOHN P. TRACY

                                                                        HARRY I. CHEN

                                                                 Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative on a roll call, Yeas 18, Nays 7.

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

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bartlett, Campbell, Collins, Condos, Cummings, Flanagan, Giard, Illuzzi, Kitchel, Kittell, Leddy, Lyons, Mazza, Miller, Sears, Welch, White.

Those Senators who voted in the negative were: Coppenrath, Doyle, Maynard, Mullin, Shepard, Snelling, Wilton.

Those Senators absent and not voting were: Dunne, Gander, MacDonald, Scott, Starr.

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

Recess

On motion of Senator Welch the Senate recessed until the fall the gavel.

Called to Order

At 12:45 P.M. the Senate was called to order by the President pro tempore.

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

H. 523.

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

An act relating to the state’s transportation program.

Was taken up for immediate consideration.

President Assumes the Chair

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

To the Senate and House of Representatives:

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

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

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

Sec. 1.  TRANSPORTATION PROGRAM

(a)  The state’s proposed fiscal year 2006 transportation program appended to the agency of transportation’s proposed fiscal year 2006 budget, as amended by this act, is adopted to the extent federal, state, and local funds are available. 

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

* * * Finance and Administration * * *

Sec. 2.  FINANCE AND ADMINISTRATION

Total authorized spending in the finance and administration program is modified as follows:

              FY06                  As Proposed     As Amended           Change  

              Total                     10,263,348      10,219,348            -44,000

            Source of Funds

              State                       9,715,292        9,671,292            -44,000

              Federal                      548,056           548,056                      0


* * * Policy and Planning * * *

Sec. 3.  POLICY AND PLANNING

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

              FY06                  As Proposed      As Amended          Change  

              Personal Services    2,641,670        2,641,670                      0

              Operating                   492,908           492,908                      0

              Grants                     4,090,769        4,140,769             50,000

              Total                       7,225,347        7,275,347             50,000

            Source of Funds

              State                       1,796,692        1,801,692               5,000

              Federal                   5,428,655        5,473,655             45,000

              Total                       7,225,347        7,275,347             50,000

(b)  These changes are made:

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

(2)  to add $50,000 to fund the grant to the Northwest Regional Planning Commission provided for in Sec. 4 of this act.

Sec. 4.  ST. ALBANS FEDERAL STREET EXTENSION

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

* * * Public Transit * * *

Sec. 5.  24 V.S.A. § 5092 is amended to read:

§ 5092.  REPORTS

The agency of transportation, in cooperation with the public transit advisory council, shall develop an annual report of financial and performance data of all public transit systems that receive operating subsidies in any form from the state or federal government, including but not limited to subsidies related to the elders and persons with disabilities transportation program for service and capital equipment.  Financial and performance data on the elders and persons with disabilities transportation program shall be a separate category in the report.  The report shall be modeled on the Federal Transit Administration’s national transit database program with such modifications as appropriate for the various services, including the guidance found in the most current short‑range public transportation plans and the most current state policy plan.  The report shall describe any action taken by the agency pursuant to contractual authority to terminate funding for routes or to request service changes for failure to meet performance standards.  The report shall be available to the general assembly by January 15 of each year.

Sec. 6.  PUBLIC TRANSIT PROGRAM

(a)  Total authorized spending for the public transit program is amended to read:

              FY06                  As Proposed      As Amended          Change  

              Other                    14,763,893      14,888,893           125,000

              Total                     14,763,893      14,888,893           125,000

            Source of Funds

              State                       5,671,599        5,796,599           125,000

              Federal                   9,092,294        9,092,294                      0

(b)  These changes are made:

(1)  to provide $50,000 in transportation funds as one-half of the

nonfederal match for up to $400,000 in federal funds for the public transit new starts program in the event such federal funds are allocated to the new starts program under Sec. 65 of this act; and

(2)  to provide $75,000 in transportation funds to be disbursed in the discretion of the secretary to public transit providers in financial distress.

Sec. 7.  RURAL PUBLIC TRANSIT PREVENTIVE MAINTENANCE

(a)  A new project, the rural public transit preventive maintenance project, is added to the public transit program.  The project shall be administered by the agency in accordance with federal transit administration regulations.

(b)  The public transit program is modified as follows.  Federal funds in the amount of $500,000 proposed for use in the new starts program are reallocated to the rural public transit preventive maintenance project.  Project spending authority shall be allocated to each transit provider in the state, other than the Chittenden County Transportation Authority (CCTA), according to the percentage of operating assistance funds that each provider was reimbursed from the statewide total of operating assistance funds in fiscal year 2005, excluding assistance received by CCTA, from the state operating assistance program and the following federal grant programs: 5307, 5311, 5311 elderly and disabled, job access reverse commute, and congestion mitigation air quality operating assistance, as detailed in the provider’s most recent audit.

(c)  In the event federal funds are allocated to a transit provider pursuant to this section and the provider does not have the local matching funds which are required to draw down the full amount of allocated federal funds, or the provider does not have federally eligible preventive maintenance expenses to utilize fully the allocated federal funds, the unutilized federal funds shall be reallocated to the other transit providers receiving funds under the project in accordance with the formula set forth in subsection (b) of this section adjusted to exclude the transit provider unable to utilize the federal funds.

(d)  Any funds provided by this section to a transit provider in fiscal year 2006 shall not be used to reduce the amount of locally generated funds committed by the provider for use in fiscal year 2006 as a condition to receiving state assistance.

Sec. 8.  CHITTENDEN COUNTY TRANSPORTATION AUTHORITY PREVENTIVE  MAINTENANCE

A new project, the Chittenden County Transportation Authority (CCTA) preventive maintenance project, is added to the public transit program.  In the event the Chittenden County Metropolitan Planning Organization (CCMPO), with respect to any CCMPO area project in which the spending of federal funds is authorized in the fiscal year 2006 transportation program, approves of  a reduction in the authorized spending of federal funds and reallocates the unspent federal funds to the CCTA preventive maintenance project within the CCMPO transportation improvement plan (TIP), the reallocated federal funds in the TIP up to a total of $500,000 shall be allocated to the CCTA preventive maintenance project.   Upon the CCMPO’s amendment of the TIP as described in this section, the agency shall make such funds available to the CCTA.

* * * Maintenance * * *

Sec. 9.  MAINTENANCE PROGRAM

(a)  The agency shall identify the segments of the state highway system on which there is a significant volume of bicycle traffic and direct the maintenance districts, within the constraints of authorized spending and in coordination with state highway maintenance work, to sweep and repair the shoulders of such segments to improve the shoulder paths available to bicyclists.  Whenever possible, the maintenance districts shall coordinate with the bike and ped coalition to identify bicycle rides and events which could benefit from pre-ride maintenance of state highways.

(b)  The sum of $25,000 in transportation funds is authorized for the shoulder maintenance work described in subsection (a) of this section.  The agency shall allocate the spending authority among the maintenance districts, taking into consideration the volume of bicycle traffic on different state highway segments and the condition of the shoulder paths along such segments which are available to bicyclists.

(c)  Total spending authority for the maintenance program, including the changes made in subsections (a) and (b) of this section, is amended to read:

              FY06                  As Proposed     As Amended             Change

              Personal                29,352,669      29,352,669                      0

              Operating              24,446,617      24,471,617             25,000

              Grants                        987,800           987,800                      0

              Total                     54,787,086      54,812,086             25,000

            Source of Funds

              State                     54,079,586      54,104,586             25,000

              Federal                      707,500           707,500                      0

              Total                     54,787,086      54,812,086             25,000

Sec. 10.  MAINTENANCE DISTRICTS

The agency’s maintenance districts shall provide the same level of service or better to the public and district municipalities as in prior fiscal years.  By January 15, 2006, the secretary shall report by letter to the house and senate committees on transportation on the configuration of management and administrative personnel in the agency’s nine maintenance districts and on the level of service provided by the maintenance districts to the public and district municipalities.

* * * Aviation Program * * *

Sec. 11.  AVIATION PROGRAM  

(a)  The following modifications are made to the program development –aviation projects program:

              FY06                  As Proposed      As Amended          Change  

              PE                             300,000                      0          -300,000

              Construction              350,000                      0          -350,000

              Other                         250,000                      0          -250,000

              Total                          900,000                      0          -900,000

            Source of Funds

              State                          230,000                      0          -230,000

              Federal                      670,000                      0          -670,000

              Total                          900,000                      0          -900,000

(b)  The aviations operations program is changed to the aviation program, and total authorized spending is modified as follows:


              FY06                  As Proposed      As Amended          Change  

              PE                             300,000           600,000           300,000

              Construction              907,500        1,257,500           350,000

              Other                      7,164,916        7,414,916           250,000

              Total                       8,372,416        9,272,416           900,000

            Source of Funds

              State                       1,992,416        2,222,416           230,000

              Federal                   6,380,000        7,050,000           670,000

              Total                       8,372,416      9,272,4160           900,000

(c)  These changes are made to eliminate aviation projects as a line item within program development and to consolidate all aviation projects within the aviation program.

* * * Rest Areas * * *

Sec. 12.  REST AREAS CONSTRUCTION PROGRAM

(a)  The Hartford I-91 rest area sewer line project is authorized to proceed provided the state’s share of the project cost is limited to 10 percent of the costs determined by federal authorities to be eligible for federal cost share participation.  Subject to the 10 percent limitation, if the total cost of the project exceeds the amount determined to be eligible for federal cost share participation, the project may proceed if the department of buildings and general services determines that funding to cover the project costs not eligible for federal participation is or will be available from sources other than the transportation fund.

(b)  From the point where the current Hartford town sewer line terminates north of the I-91 rest area in Hartford on U.S. Route 5, south to the rest area, sewer connections shall not be authorized, except for buildings existing at the time of passage of this act, until the town of Hartford amends its zoning bylaws to conform with the zoning amendment recommendations found in the Route 5 south study dated May 2001.

(c)  The agency and the department of buildings and general services are directed to confer with the town of Hartford on all phases of the upgrades to the rest areas on the north- and southbound portions of I-91 in Hartford.

Sec. 13.  WELCOME CENTER AND REST AREA MONUMENTS

The sum of $25,000 in transportation funds is authorized for expenditure by the agency to fund the construction of monuments honoring the builders of Vermont’s interstate system to be located at welcome centers and rest areas at entry points to the state.


Sec. 14.  REST AREAS AND INFORMATION CENTERS

The department of buildings and general services is directed to design a basic rest area and design a basic information center which shall serve as the models for future construction of these facilities.  These designs shall provide the public with necessary facilities, and shall minimize the cost of providing these services.  The designs and cost information shall be presented to the house and senate committees on transportation by January 15, 2006.

* * * Transportation Buildings * * *

Sec. 15.   TRANSPORTATION BUILDINGS

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

              FY06                  As Proposed      As Amended          Change  

              PE                             200,000           100,000            -50,000

              Construction           1,047,548        1,147,548           100,000

              Total                       1,247,548        1,297,548                      0

            Source of Funds

              State                       1,247,548        1,297,548                      0

(b)  These changes are made

(1)  to reduce funding for development and evaluation by $50,000 in transportation funds and

(2)  to increase funding for central garage repairs by $100,000.

* * * Dressler Barn * * *

Sec. 16.   CONVEYANCE OF DRESSLER BARN SITE TO TOWN OF WINDSOR

(a)  Notwithstanding 22 V.S.A. § 743(1) (historic preservation; cooperation of agencies), the secretary of transportation, as agent for the state of Vermont, is authorized to convey the historic Dressler Barn site, adjacent to the agency of transportation’s Windsor maintenance facility, to the town of Windsor.

(b)  Notwithstanding 19 V.S.A. § 10k(b) (statement of policy; asset management; sale of state property), the conveyance authorized by this section may be for nominal consideration.  However, the town of Windsor shall be responsible, at its own expense, for obtaining any needed surveys and subdivision approvals.


* * * Spring Projects * * *

Sec. 17.  Sec. 69b of H.143 of 2005 is amended by adding the following project to the list of projects:

      Program        Project name             Route               Project number

      Paving           Bolton-South             I-89 south        IM-089-2(36)

                               Burlington                                     

* * * Program Development - State Bridge * * *

Sec. 18.  PROGRAM DEVELOPMENT - STATE BRIDGE

The following modifications are made to the program development - state bridge program:

(1)  The following project and its associated funding as approved or amended by this act is moved to the bridge maintenance program:

System        Project          Project Number      Description

State            Cambridge    BHF 030-2(19)S   Rehab BR20, Lamoille                                                                 River

(2)  Total spending in the state bridge program, including the changes made in subdivision (1) of this section, is authorized as follows.

              FY06               As Proposed                   As Amended          Change

              Total                  26,868,884                     26,347,832       -521,052

            Source of Funds

              State                    4,769,674                       4,665,464       -104,210

              Federal              22,099,210                     21,682,368       -416,842

              Total                  26,868,884                     26,347,832       -521,052

* * * Program Development - Interstate Bridge * * *

Sec. 19.  PROGRAM DEVELOPMENT - INTERSTATE BRIDGE

The following modifications are made to the program development - interstate bridge program:

(1)  Authorized spending for the Putney IM 091-1(31) interstate project (Bridge No. 17, I-91 under US 5) is amended to read:

              FY06                  As Proposed     As Amended           Change  

              Construction           2,257,756                  0           -2,257,756

              Total                       2,257,756                  0           -2,257,756

            Source of Funds

              State                          225,776                  0              -225,776

              Federal                   2,031,980                  0           -2,031,980

              Total                       2,257,756                  0           -2,257,756

(2)  Authorized spending on interstate bridge development and evaluation is amended to read:

              FY06                  As Proposed     As Amended           Change  

              Other                         410,000           204,500          -205,500

              Total                          410,000           204,500          -205,500

            Source of Funds

              State                            41,000             20,450            -20,550

              Federal                      369,000           184,050          -184,950

              Total                          410,000           204,500          -205,500

(3)  The following projects and their associated funding as approved or amended by this act are moved to the bridge maintenance program:

System        Project       Project Number         Description

Interstate     Bolton        IM 090-2(29)           Rehab BR#51, I-89 Bolton

Interstate     Putney        IM 091-1(31)           Rehab bridge #17, I-91

(4)  Total spending in the interstate bridge program, including the changes made in subdivisions (1) through (3) of this section, is authorized as follows.

              FY06               As Proposed             As Amended                Change

              Total                    5,581,764                    204,500          -5,377,264

            Source of Funds

              State                       558,177                      20,450             -537,727

              Federal                5,023,587                    184,050          -4,839,537

              Total                    5,581,764                    204,500          -5,377,264

* * * Enhancements * * *

Sec. 20.  POULTNEY LIGHT PROJECT

Authorized spending for the Poultney STP EH00(20) project is amended to read:

              FY06                  As Proposed      As Amended            Change

              Construction                12,500             31,250             18,750

              Total                            12,500             31,250             18,750

            Source of Funds

              Federal                        10,000             25,000             15,000

              Local                             2,500               6,250               3,750

Sec. 21.  VERMONT LOCAL ROADS

(a)  Total authorized spending in the Vermont local roads program is amended to read:

              FY06                  As Proposed      As Amended          Change  

              Grants                        783,700           783,700                      0

              Total                          783,700           783,700                      0

            Source of Funds

              State                          643,700           333,867          -309,833

              Federal                      140,000           449,833           309,833

(b)  These changes are made to replace transportation funds with federal enhancement funds in the amount of $309,833.

Sec. 22.  ENHANCEMENT FUNDS

Notwithstanding 19 V.S.A. § 38, in fiscal years 2007 and 2008, the youth corps program and the clean and clear initiative of the Vermont local roads program shall be funded with enhancement funds.

* * * Cancellation of Projects * * *

Sec. 23.  CANCELLATION OF PROJECTS

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

(1)  (1)  Addison (Chimney Point) STP EH99(17) (construction of dock for sail ferry) (cancellation requested by sponsor town);

(2)  Chelsea STP EH02( ) (construction study for sidewalks in Chelsea village) (cancellation requested by sponsor town);

(3)  Derby Line Village STP EH02( ) (study of sidewalks in Derby Line village) (cancellation requested by sponsor town);

(4)  Hinesburg STP EH99(10) (construction of sidewalks/crosswalks in Hinesburg village) (cancellation requested by sponsor town);

(5)  North Hero STP EH02( ) (rehabilitation of existing town hall for visitor center) (cancellation requested by sponsor town); and

(6)  Richmond STP EH 97(15) (acquisition of scenic easement near I‑89, Exit 11 in Richmond) (cancellation requested by sponsor; property owner no longer interested in granting easement). 

* * * Program Development - Park and Ride Program * * *

Sec. 24.  MUNICIPAL PARK AND RIDE GRANT PROGRAM

The sum of $100,000 is authorized for use by the agency of transportation for the purpose of implementing the program established in Sec. 61 of No. 160 of the 2003 Adj. Sess. (2004).


Sec. 25.  PARK AND RIDE PROGRAM

The following modifications are made to the program development - park and ride facilities program.  Fiscal year 2005 funding for construction of the Ferrisburgh CMG Park (15) facility in the amount of $310,000 in state funds shall carry forward and be utilized in the fiscal year 2006 transportation program.  Construction of the facility shall proceed over a two‑fiscal‑year period.

* * * Program Development – Roadway * * *

Sec. 26.  PROGRAM DEVELOPMENT − ROADWAY PROGRAM

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

(1)  Spending authority for the Hardwick ST 030-3(4) project (bank stabilization along VT 15 in landslide area easterly of Hardwick village) is added to read:

              FY06                  As Proposed      As Amended          Change  

              Construction                                  140,000                140,000

              Total                                             140,000                140,000

            Source of Funds

              State                                             140,000                140,000

(2)  Fiscal year 2005 funding for construction of the Hubbardton ST 0161(23) project (reconstruction of VT 30 to prevent periodic flooding of roadway) in the amount of $300,000 in state funds shall carry forward and be utilized in the fiscal year 2006 program development program.

(3)  Spending authority for the Hubbardton ST 0161(23) project is added to read:

              FY06                  As Proposed      As Amended          Change  

              Construction                                  700,000                700,000

              Total                                             700,000                700,000

            Source of Funds

              State                                             140,000                140,000

              Federal                                          560,000                560,000

(4)  Due to anticipated scheduling delays, spending authority for the Cabot-Danville FEGC F 028-3(26)C/1 is amended to read:

              FY06                  As Proposed      As Amended            Change

              PE                               50,000             50,000                      0

              Construction              500,000                      0          -500,000

              Total                          550,000             50,000          -500,000

            Source of Funds

              State                            27,500               2,500            -25,000

              Federal                      522,500             47,500          -475,000

              Total                          550,000             50,000          -500,000

(5)  Funding for the North Bennington STP 9646(1) S project (reconstruction of Water Street/TH 2/VT 67A) is added to read:

              FY06                  As Proposed      As Amended            Change

              Construction                                  637,756                637,756

              Total                                             637,756                637,756

     Source of Funds

              State                                             125,776                125,776

              Federal                                          511,980                511,980

              Total                                             637,756                637,756

(6)  The Old Bennington STP 1400(5) project (reconstruction of Monument Avenue) shall be included in the federal fiscal years 2005-2007 state transportation improvement program (STIP) with federal funding scheduled in the federal fiscal years during such period as determined by the secretary.

(7)(A)  Spending authority for the Bennington Bypass South NHF 019-1(4) project is amended to read:

              FY06                  As Proposed      As Amended            Change

              PE                          1,131,485           300,000          -831,485

              ROW                                   0           300,000           300,000

              Total                       1,131,485           600,000          -531,485

            Source of Funds

              State                          226,297           360,000           133,703

              Federal                      905,188           240,000          -665,188

              Total                       1,131,485           600,000          -531,485

(B)  For fiscal year 2006, the funds authorized for the Bennington Bypass South NHF 019 - 1(4) shall be used for design work necessary to identify sites for the cost-effective disposal of earth borrow resulting from the construction of the Bennington Bypass North project north of Vermont Route 9 and for the acquisition of earth borrow disposal sites so identified.

(C)  In the event the funds authorized for right-of-way acquisition are insufficient to maintain the approved schedule for advancement of the Bennington Bypass North NHF 019-1(5) project, the secretary, after consultation with the joint transportation oversight committee, is authorized to allocate the funds required to maintain the approved schedule.


(8)  The following projects have received federal earmark funds and are added to the roadway program – statewide development and evaluation for fiscal year 2005 and fiscal year 2006:

(A)  Windsor – Industrial Access Road:  $1,000,000 from the federal Transportation and Community and System Preservation Program (TCSP);

(B)  Swanton – Missisquoi Wildlife Refuge:  $500,000 from the federal Public Lands Highway Program (PLH);

(C)  Norwich – Silvio Conte National Fish and Wildlife Refuge Educational Outreach Center:  $1,000,000 from the federal Public Lands Highway Program (PLH);

(D)  Johnson STP 030-2( ):  $1,984,000 from the Section 117 Federal Highway Administration Surface Transportation Funds for improvements on VT 15;

(E)  Essex Junction STP 5300( ):  $496,000 from the Section 117 Federal Highway Administration Surface Transportation Funds.

Sec. 27.  REPEAL

Sec. 11 of No. 160 of the Acts of the 2003 Adj. Sess. (2004) (restrictions on Bennington Bypass South project) is repealed.

* * * Program Development – Safety and Traffic Operations * * *

Sec. 28.  PROGRAM DEVELOPMENT  - SAFETY AND TRAFFIC OPERATIONS

All highway projects in which safety is a dominant feature, including projects in which the construction of a roundabout is an option, shall be listed and considered as part of the safety and traffic operations program.

* * * Program Development – Multimodal Facilities * * *

Sec. 29  BELLOWS FALLS MULTIMODAL FACILITY

Notwithstanding 19 V.S.A. § 10j(e), transportation funds authorized for expenditure on the Bellows Falls multimodal facility may be used to purchase the Bellows Falls train station located on real property owned by the state.

* * * Rail Program * * *

Sec. 30.  RAIL PROGRAM

(a)  The following modifications are made to the program development – rail projects program.  These changes are made to eliminate rail projects as a line item within program development and to consolidate all rail projects within the rail program.

              FY06                  As Proposed      As Amended          Change  

              PE                             686,111                      0          -686,111

              Construction           1,125,000                      0       -1,125,000

              Other                         635,000                      0          -635,000

              Total                       2,446,111                      0       -2,446,111

              Source of Funds

              State                       1,186,111                      0       -1,186,111

              Federal                   1,260,000                      0       -1,260,000

(b)  Spending authority for the Bellows Falls railroad tunnel project is added as follows.  In the event federal earmark funds are secured for the project, any state funds not required to match the federal funds and any state funds expended on the project which are reimbursable from the federal funds shall be so reimbursed, and the total of such available funds shall be used, in the discretion of the secretary, to match federal funds pursuant to Secs. 64 and 65 of this act.

              FY06                  As Proposed      As Amended          Change  

              Total                                                  700,000           700,000

            Source of Funds

              State                                                  700,000           700,000

(c)  Spending authority for the purchase of interstate passenger rail service is amended to read as follows.  This change is made to adjust authorized spending to anticipated contract obligations.

         FY06                  As Proposed      As Amended          Change  

              Total                       3,000,000        2,700,000          -300,000

            Source of Funds

              State                       3,000,000        2,700,000          -300,000

(d)  Authorized spending in the rail program, including the changes made in subsections (a) through (c) of this section, is amended to read:

              FY06                  As Proposed      As Amended          Change  

              PE                               89,273           775,384           686,111

              Construction           1,375,000        3,200,360        1,825,000

              Other                      6,161,458        6,496,458           335,000

              Total                       7,626,091      10,472,202        2,846,111

            Source of Funds

              State                       6,535,818        8,121,929        1,586,111

              Federal                   1,090,273        2,350,273        1,260,000

              Total                       7,626,091      10,472,202        2,846,111


Sec. 31.  SUNDERLAND RAILROAD BRIDGE

In connection with the Albany-Bennington-Rutland-Burlington (ABRB) project, the Sunderland Rail 04-9044 C/2 project (replacement of Vermont Railway Bridge No. 63 over Mill Brook at MP 17.93) shall be considered specifically authorized for purposes of chapter 58 of Title 5 of the Vermont statutes.

Sec. 32.  LAMOILLE VALLEY RAIL CORRIDOR

From the net cash proceeds received by the state from the Lamoille valley railroad salvage project, the sum of $75,000 shall be reserved and utilized for the maintenance of the Lamoille valley rail banked corridor.

* * * Vermont Rail Authority Summer Study * * *

Sec. 33.  VERMONT RAIL AUTHORITY STUDY COMMITTEE

(a)  A summer study committee is established, consisting of two members of the house committee on transportation and one member of the house committee on ways and means, designated by the speaker of the house; two members of the senate committee on transportation and one member of the senate committee on finance, designated by the committee on committees; the state treasurer or designee; the secretary of administration or designee; the secretary of transportation; two representatives from a rail organization as designated by the governor; one representative from the regional planning commissions as designated by the Vermont association of planning and development agencies; a representative of the metropolitan planning organization; and a representative of the Vermont rail advisory council designated by the council.  The secretary of transportation shall serve as chair of the committee.  Legislative members of the committee shall be entitled to per diem compensation and expense reimbursement as provided in 2 V.S.A.

§ 406(a).  Other members of the committee who are not state employees shall be entitled to per diem compensation and expense reimbursement as provided in 32 V.S.A. § 1010. 

(b)  The committee shall make recommendations regarding the advisability of creating a rail authority in the state of Vermont for the primary purpose of developing additional capacity to move freight more effectively for the economic benefit of the state of Vermont.  The committee shall consider the following:

(1)  Advantages and disadvantages of transferring responsibility for management of state-owned railroad properties from the agency of transportation to an authority;

(2)  Essential components of a business plan for an authority, including how an authority would operate, identification of funding mechanisms for both project delivery and routine operations, and how it will have an impact on the transportation fund and the state's bond rating;

(3)  Efficient planning, development, and delivery of railroad projects;

(4)  Identification of priority rail projects and identification of rail corridors for priority projects;

(5)  Efficient coordination of adjustments to railroad facilities required by highway construction projects;

(6)  Impact on railroad operators;

(7)  Support of economic development activity in the state; and

(8)  Regulatory jurisdiction of the transportation board over highway-rail crossings, farm crossings, fences, and other matters involving railroads. 

(c)  The agency of transportation, with the assistance of the legislative council and the joint fiscal office, shall provide administrative support for the committee.

(d)  The committee shall submit a report of recommendations to the house and senate committees on transportation by January 15, 2006, at which time the committee’s existence shall terminate.

* * * Town Highway Bridge Program * * *

Sec. 34.  TOWN HIGHWAY BRIDGE PROGRAM

The following modifications are made to the town highway bridge program:

(1)  Spending authority for the Leicester BRF 0160(3) S project (replacement of Bridge No. 6 over Otter Creek on Leicester Junction Road/TH 1) is added to read:

              FY06                  As Proposed      As Amended            Change

              PE                                                     5,500                    5,500

              Construction                               1,200,000             1,200,000

              Total                                          1,205,500             1,205,500

            Source of Funds

              State                                             120,550                120,550

              Federal                                          964,400                964,400

              Local                                             120,550                120,550

(2)  Authorized spending for the Morrisville BRZ 1446(15) project is amended to read:


              FY06                  As Proposed      As Amended            Change

              Construction              378,531                      0          -378,531

              Total                          378,531                      0          -378,531

            Source of Funds

              State                            37,853                      0            -37,853

              Federal                      302,825                      0          -302,835

              Local                           37,853                      0            -37,853

(3)  The following projects and their associated funding as approved or amended by this act are moved to the bridge maintenance program:

      System       Project                               Project Number      Description

      Town         Johnson                              BHO 1448(18)      Rehab BR6

      Town         Montpelier                          BHM 6400(25)      Rehab BR11

      Town         Norwich                             TH2 9625              Rehab BR46

(4)  Notwithstanding 19 V.S.A. § 309a, the local share of the Bethel BRF 0241(33)C/2 project in all its phases through construction of a replacement bridge shall be five percent.  Fiscal year 2006 spending authority for the project is amended to read:

              FY06                  As Proposed      As Amended            Change

              Construction           2,500,000        2,500,000                      0

              Total                       2,500,000        2,500,000                      0

            Source of Funds

              State                          250,000           375,000           125,000

              Federal                   2,000,000        2,000,000                      0

              Local                         250,000           125,000          -125,000

              Total                       2,500,000        2,500,000                      0

* * * Town Highway Class 2 Roadway * * *

Sec. 35.  TOWN HIGHWAY CLASS 2 ROADWAY

Total authorized spending in the town highway class 2 roadway program is modified as follows.  In the discretion of the secretary, up to $250,000 of the authorized funds may be reallocated to the town highway structures program.

              FY06                  As Proposed      As Amended            Change

              Grants                     4,248,750        4,748,750           500,000

              Total                       4,248,750        4,748,750           500,000

            Source of Funds

              State                       4,248,750        4,748,750           500,000


* * * Town Highway Emergency Fund * * *

Sec. 36.  TOWN HIGHWAY EMERGENCY

Total authorized spending in the town highway emergency program is modified as follows:

              FY06                  As Proposed      As Amended            Change

              Grants                        750,000             57,129          -692,871

              Total                          750,000             57,129          -692,871

            Source of Funds

              State                          750,000             57,129          -692,871

* * * Vermont Local Roads * * *

Sec. 37.  VERMONT LOCAL ROADS PROGRAM

(a)  Total authorized spending in the Vermont local roads program is modified as follows:

              FY06                  As Proposed      As Amended          Change  

              Grants                        783,700           783,700                      0

              Total                          783,700           783,700                      0

            Source of Funds

              State                          643,700           333,867          -309,833

              Federal                      140,000           449,833           309,833

(b)  These changes are made to replace transportation funds with federal enhancement funds in the amount of $309,833.

* * * Town Structures Program * * *

Sec. 38.  Sec. 254 of No. 122 of the Acts of the 2003 Adj. Sess. (2004) is amended to read:

Sec. 254.  Transportation - town highway structures

              Grants                           3,494,500        3,944,500

            Source of Funds

              Transportation fund       3,494,500        3,944,500

(a)  Notwithstanding any other provision of law, in fiscal year 2004, the sum of $3,500,000.00 shall revert to the transportation fund from the town highway structures account, account # 8100000300.

(b)  Notwithstanding any other provision of law, in fiscal year 2005, the sum of $492,122.00 shall revert to the transportation fund from the town highway structures account, account # 8100000300.

(c)  Of the above appropriation, $450,000 is requested as a supplemental appropriation in accordance with 19 V.S.A. § 306(e) to fund additional costs for projects the agency has previously committed to and shall not be awarded as new grants. 

Sec. 39.  Sec. 258 of No. 122 of the Acts of the 2003 Adj. Sess. (2004) is amended to read:

Sec. 258.  Transportation – town highway bridges

Personal services                     3,610,000                    3,610,000

Operating expenses               16,903,263                  16,453,263

Grants                                        418,000                       418,000

          Total                                     20,931,263                  20,481,263

Source of Funds

Transportation fund                 7,129,406                    6,679,406

Local match 1,384,030           1,384,030

Federal funds                        12,417,827                  12,417,827

          Total                                     20,931,263                  20,481,263

* * * Central Garage * * *

Sec. 40.  19 V.S.A. § 13(c) is amended to read:

(c)  There shall be established and maintained within the central garage fund, a separate transportation equipment replacement account for the purposes stated in subsection (b) of this section.  Beginning in In fiscal year 2002 2006, $1,400,000.00 and in fiscal year 2007 and thereafter, an amount equal to

 two-thirds of one percent of the prior year transportation fund appropriation, but not less than $1,400,000.00, shall be transferred prior to August 1 from the transportation fund to the central garage fund and allocated to the transportation equipment replacement account, and beginning in fiscal year 2001, and thereafter, an amount not less than the sum of equipment depreciation expense and net equipment sales from the prior fiscal year, shall be allocated prior to August 1 from within the central garage fund to the transportation equipment replacement account.  All expenditures from this account shall be appropriated by the general assembly and used exclusively for the purchase of equipment as authorized in subsection (b) of this section.

Sec. 41.  AGENCY VEHICLE FLEET

Pursuant to 19 V.S.A. § 13(b), the agency is authorized to add one plow truck to the fleet to service an increase in lane mileage in district 1 and one aerial lift truck for signal repair and maintenance.

Sec. 42.  PROGRAM DEVELOPMENT VEHICLE FLEET

The program development program is modified to eliminate the proposed addition of two vehicles, one for use by the materials and research program and one for use by the bridge inspection program.  Spending authority is reduced by the amount of $60,000 in transportation funds.

* * * Transportation Funds * * *

Sec. 43.  19 V.S.A. § 11a is amended to read:

§ 11a.  TRANSPORTATION FUNDS APPROPRIATED FOR SUPPORT OF GOVERNMENT

For fiscal year 2006 and thereafter, the The maximum amount of transportation funds that may be appropriated for the support of government, other than for the agency of transportation, the transportation board, transportation pay act funds, the cost of maintaining and staffing rest areas, construction of transportation capital facilities used by the agency of transportation, and transportation debt service, for fiscal year 2006 shall not exceed 18.5 18.0 percent of the total of the prior fiscal year transportation fund appropriations and for fiscal year 2007 shall not exceed $38,221,563.00.

* * * Joint Transportation Oversight Committee * * *

Sec. 44.  19 V.S.A. § 12b(b) is amended to read:

(b)  The committee shall have authority to meet during adjournment and for official duties, members.  Members shall be entitled to compensation and reimbursement pursuant to 2 V.S.A. § 406.  The committee shall have the assistance of the staff of the legislative council and the joint fiscal office.

Sec. 45.  19 V.S.A. § 12b(d) is added to read:

(d)(1)  In coordination with the regular meetings of the joint fiscal committee, the joint transportation oversight committee shall meet in mid-July, mid‑September, and mid-November.  At these meetings, the secretary shall report on the status of the state’s transportation finances and transportation programs, including a report on contract bid awards versus project estimates and a detailed report on all known or projected cost overruns, project savings and funding availability from delayed projects; and the agency’s actions taken or planned to cover the cost overruns and to reallocate the project savings and delayed project funds with respect to:

(A)  all paving projects other than statewide maintenance programs; and

(B)  all projects in the roadway, state bridge, interstate bridge, or town bridge programs with authorized spending in the fiscal year of $500,000.00 or more with a cost overrun equal to 20 percent or more of the authorized spending or generating project savings or delayed project available funding equal to 20 percent or more of the authorized spending.

(2)  In addition, at the July meeting of the joint transportation oversight committee, the secretary shall report to the committee on the agency’s plans to adjust spending to any changes in the consensus forecast for transportation fund revenues.

Sec. 46.  19 V.S.A. § 13(i) is added to read:

(i)  Each year at the September meeting of the joint transportation oversight committee called pursuant to 19 V.S.A. § 12b(d), the agency shall present to the joint transportation oversight committee a report detailing:

(1)  activity within the central garage fund during the prior fiscal year;

(2)  the calculation of equipment rental rates approved by the agency to be charged by the central garage; and

(3)  the condition of the vehicle fleet, including plans for upgrading the fleet to optimal condition.

Sec. 47.  FALL REPORTS

At the summer and fall meetings in 2005 of the joint transportation oversight committee pursuant to 19 V.S.A. §12b(d), the secretary shall report on project funding decisions made pursuant to Secs. 62 through 64 of this act.

* * * Connecticut River Bridge Advisory Commission * * *

Sec. 48.  CONNECTICUT RIVER BRIDGE ADVISORY COMMISSION

(a)  19 V.S.A. § 36 (Connecticut River bridge advisory commission) is repealed.

(b)  This section shall take effect on the date that the same or similar provisions are enacted in New Hampshire.

(c)  The agency of transportation shall annually by January 15 submit to the house and senate committees on transportation a report on the status of all Connecticut River bridge projects.

* * * Emergency Repairs to Existing Facilities * * *

Sec. 49.  19 V.S.A. § 518(a) is amended to read:

(a)  For purposes of this section, the term “minor alterations to existing facilities” means:

(1)  activities Activities which qualify as “categorical exclusions” under 23 C.F.R. § 771.117(c) and the National Environmental Policy Act of 1969, as amended, 42 U.S.C. §§ 4321-4347, and do not require a permit under 10 V.S.A. chapter 151 (Act 250); or

(2)  Activities involving emergency repairs to or emergency replacement of an existing bridge or culvert, even though the need for repairs or replacement does not arise from damage caused by a natural disaster or catastrophic failure from an external cause; provided, however, that the activities do not require a permit under 10 V.S.A. chapter 151 (Act 250).  Any temporary rights under this subdivision shall be limited to 10 years from the date of taking.

* * * Prefabricated Bridges * * *

Sec. 50.  PREFABRICATED BRIDGES

In the fiscal year 2007 transportation program, the agency shall identify potential candidates on the state, interstate, and town highway bridge systems for development and construction utilizing prefabricated components and construction techniques.

* * * Municipal Equipment Loan Fund; Salt and Sand Sheds * * *

Sec. 51.  MUNICIPAL EQUIPMENT LOAN FUND; EXPANSION OF FUND PURPOSES; SALT AND SAND SHEDS

(a)  The state treasurer and the state traffic committee, as administrators of the municipal equipment loan fund established in 29 V.S.A. chapter 61, are directed to examine the possibility of expanding the use of the loan fund to cover the costs of municipal salt and sand sheds.  Section 39 of Title 19 currently requires the agency of transportation to work with municipalities to “… provide assistance in designing effective low cost enclosures for salt or sand storage, including off-the-shelf designs that incorporate economical construction materials to the extent allowed by the multisector general permit (MSGP) issued for Vermont by the United States Environmental Protection Agency.”  The treasurer and traffic committee shall confer with the secretary of natural resources in developing recommendations which address:

(1)  The cost to municipalities of acquiring salt and sand sheds which conform to the specifications resulting from assistance provided in 19 V.S.A. § 39. 

(2)  Increases to the loan fund necessary to implement an expansion of fund purposes to include salt and sand sheds.

(b)  The treasurer and traffic committee shall submit a report to the house and senate committees on transportation by January 15, 2006.


* * * Fund Transfer Authority * * *

Sec. 52.  32 V.S.A. § 706 is amended to read:

§ 706.  TRANSFER OF APPROPRIATIONS

Notwithstanding any authority granted elsewhere, all transfers of appropriations shall be made pursuant to this section upon the initiative of the governor, or upon the request of a secretary or commissioner.

(a)(1)  With the approval of the governor, the secretary of administration may:

(1)(A)  Transfer balances of appropriations not to exceed $50,000.00 made under any appropriation act for the support of the government from one component of an agency, department, or other unit of state government, to any other component of the same agency, department, or unit;

(2)(B)  Transfer balances of code classifications, as defined in any appropriation act for the support of the government, of all departments and agencies when deemed necessary;

(3)(C)  Advance $1,000.00 to the central surplus commodity revolving fund.

(b)(2)  Except as specified in subsection (a) subdivisions (1) and (4) of this section, the transfer of balances of appropriations may be made only with the approval of the emergency board.

(c)(3)  For the specific purpose of balancing and closing out fund accounts at the end of a fiscal year, the commissioner of finance and management may adjust a balance within an account of an agency or department in an amount not to exceed $100.00.

(4)  With the approval of the governor, the secretary of transportation may transfer balances of appropriations made under any appropriation act from one department or unit of the agency of transportation to another department or unit of the agency of transportation for the specific purpose of funding authorized transportation projects which have been approved by the federal government for advance construction in which the expenditure of state funds will be reimbursed by federal funds when the federal funds become available, and the transfer is limited to funds which have been approved for reimbursement.  Upon such reimbursement, the transferred funds shall be transferred back to the original department or unit of the agency of transportation from which the initial transfer for purposes of funding the advance construction was made.  When any appropriation is transferred pursuant to this subdivision, the secretary of transportation shall report the transfer to the house and senate committees on transportation when the general assembly is in session, and when the general assembly is not in session, to the joint transportation oversight committee at one of the meetings scheduled pursuant to 19 V.S.A. § 12b(d).

* * * Project Prioritization * * *

Sec. 53.  19 V.S.A. § 10g(l) and (m) are added to read:

(l)  The agency shall develop a numerical grading system to assign a priority rating to all program development paving, program development roadway, program development safety and traffic operations, program development state and interstate bridge, town highway bridge, and bridge maintenance projects.  The rating system shall consist of two separate, additive components as follows.

(1)  One component shall be limited to asset management-based factors which are objective and quantifiable and shall consider, without limitation, the following:

(A)  the existing safety conditions in the project area and the impact of the project on improving safety conditions;

(B)  the average, seasonal, peak, and nonpeak volume of traffic in the project area, including the proportion of traffic volume relative to total volume in the region, and the impact of the project on congestion and mobility conditions in the region;

(C)  the availability, accessibility, and usability of alternative routes;

(D)  the impact of the project on future maintenance and reconstruction costs; and

(E)  the relative priority assigned to the project by the relevant regional planning commission or the Chittenden County metropolitan planning organization.

(2)  The second component of the priority rating system shall consider, without limitation, the following factors:

(A)  the functional importance of the highway or bridge as a link in the local, regional, or state economy; and

(B)  the functional importance of the highway or bridge in the social and cultural life of the surrounding communities.

(m)  The annual transportation program shall include an individual priority rating pursuant to subsection (l) of this section for each highway paving, roadway, safety and traffic operations, and bridge project in the program along with a description of the system and methodology used to assign the ratings.

* * * Vehicle Inspection Certificates and Revenue * * *

Sec. 54.  23 V.S.A. § 1230 is amended to read:

§ 1230.  FEES CHARGE

For each inspection certificate issued by the department of motor vehicles, the commissioner shall be paid $0.50 $3.00; provided that state and municipal inspection stations that inspect only state or municipally owned and registered vehicles shall not be required to pay a fee. 

Sec. 55.  23 V.S.A. § 1222(b) is amended to read:

§ 1222.  INSPECTION OF REGISTERED VEHICLES

* * *

(b)  If a fee is charged for inspection, it shall be based upon the hourly rate charged by each official inspection station or it may be a flat rate fee and, in either instance, the fee shall be prominently posted and displayed beside the official inspection station certificate.  In addition, the official inspection station may disclose the state inspection certificate charge on the repair order as a separate item and collect the charge from the consumer.  A person shall not operate a motor vehicle unless it has been inspected as required by this section and has a valid certification of inspection affixed to it.  The month of next inspection for all motor vehicles shall be shown on the current inspection certificate affixed to the vehicle.

Sec. 56.  ALLOCATION OF VEHICLE INSPECTION CHARGE REVENUE

All vehicle inspection certificate charge revenue collected under 23 V.S.A

§ 1230 shall be allocated as follows:  In fiscal year 2006, to the transportation fund; in fiscal year 2007 and thereafter, to the transportation fund but with

one-half reserved for use in the bridge maintenance program established in

19 V.S.A. § 40.

* * * Vermont Bridge Maintenance Program * * *

Sec. 57.  19 V.S.A. § 40 is added to read:

§ 40.  VERMONT BRIDGE MAINTENANCE PROGRAM

The Vermont bridge maintenance program is hereby created.  The objective of the program is to maximize the useful life of Vermont’s bridges at least cost through a systematic program of asset management which will eliminate avoidable deterioration costs and maximize the availability of resources for all transportation purposes.  The following types of projects shall be eligible for funding from the bridge maintenance program:

(1)  Bridge painting, particularly projects that will remove lead‑based paints and improve the protective capacity of the structural steel coatings system;

(2)  Deck membrane replacements of deteriorating membranes with new higher performance membranes and pavement;

(3)  Deck replacements of structurally deficient decks where the remaining structural components of the bridge are in fair to good condition;

(4)  Large culvert rehabilitation, including the insertion of culvert linings to extend the useful life of large culverts; and

(5)  Substructure repairs where deterioration has affected the structural stability of the bridge.

Sec. 58.  BRIDGE PROJECTS INCLUDED IN THE BRIDGE MAINTENANCE PROGRAM

The following bridge projects are included in the bridge maintenance program:

      System       Project          Project Number         Description

      Interstate    Bolton           IM 090-2(29)           Rehab BR#51, I-89 Bolton

      Interstate    Putney           IM 091-1(31)           Rehab bridge #17, I-91

      State          Cambridge    BHF 030-2(19)S      Rehab BR20, Lamoille                                                              River

      Town         Johnson         BHO 1448(18)         Rehab BR6, Lamoille                                                                River

      Town         Montpelier     BHM 6400(25)         Rehab BR11, north branch                                                       Winooski River

      Town         Norwich        TH2 9625                 Rehab BR46,                                                                           Ompompanoosuc River

* * * New Projects * * *

Sec. 59.  NEW PROJECTS

(a)  The South Burlington Airport Drive reconstruction project shall be added to the program development – roadway program, provided the Chittenden County Metropolitan Planning Organization’s (MPO) approves of the project for inclusion in the MPO’s current transportation improvement plan (TIP) by September 1, 2005.

(b)  Upon request of the Addison County regional planning commission, the secretary may add the Bristol South Street bridge (bridge No. 31) project to the town bridge program.


* * * Reallocation of Funding * * *

Sec. 60.  19 V.S.A § 10g(h) is amended to read:

(h)  Should capital projects in the transportation program be delayed because of unanticipated problems with permitting, right-of-way acquisition, construction, local concern, or availability of federal or state funds, the secretary is authorized to advance projects in the approved transportation program, giving priority to shelf projects.  The secretary is further authorized to undertake projects to resolve emergency or safety issues.  Should an approved project in the current transportation program require additional funding to maintain the approved schedule, the agency is authorized to allocate the necessary resources.  However, the secretary shall not delay or suspend work on approved projects to reallocate funding for other projects except when other funding options are not available.  In such case, the secretary shall notify the members of the joint transportation oversight committee.  With respect to projects in the approved transportation program, the secretary shall notify, in the district affected, the regional planning commission, the municipality, legislators, and members of the senate and house committees on transportation of any significant change in design, change in construction cost estimates requiring referral to the transportation board under 19 V.S.A. § 10h, or any change which likely will affect the fiscal year in which the project is planned to go to construction.  No project shall be cancelled without the approval of the general assembly.

Sec. 61.  TRANSPORTATION FUND STABILIZATION RESERVE

To the extent that transportation funds are insufficient to obligate under federal regulations any federal funds that become available in federal fiscal year 2005 or 2006, the secretary may withdraw funds from the transportation fund budget stabilization reserve up to a maximum amount which leaves the remaining balance of the stabilization reserve equal to three and one-half percent of the prior year appropriations of transportation funds and use such funds to obligate the federal funds.

* * * Interest on Transportation Fund Stabilization Reserve * * *

Sec. 62.  32 V.S.A. § 308a(e) is added to read:

(e)  Commencing in fiscal year 2007, interest earned on funds in the transportation fund budget stabilization reserve shall be credited to the transportation fund.


* * * Discretionary Spending Authority * * *

Sec. 63.  MATCHING FUNDS

Spending authority in the amount of $566,338 in transportation funds shall be allocated by the secretary to satisfy matching requirements for federal funds pursuant to Secs. 63 and 64 of this act.

Sec. 64.  DISCRETIONARY SPENDING AUTHORITY

(a)  Spending authority in the amount of $1,258,730 in federal funds shall be allocated in the discretion of the secretary to advance projects in the state’s fiscal year 2006 transportation program in the safety and traffic operations, paving, roadway, town bridge, or bridge maintenance programs or which are listed as shelf projects.  In making funding allocation decisions, the secretary shall consider the projects identified in subsection (b) of this section.  If the secretary decides not to allocate funds pursuant to this subsection to a project listed in subsection (b) of this section, the secretary shall explain the decision in writing addressing the factors which support the prioritization of other projects receiving funds as compared to the listed project.  The secretary shall deliver copies of the written explanation promptly to members of the house and senate committees on transportation and the members of the joint transportation oversight committee after making the funding decision. 

(b)  The projects referred to in subsection (a) of this section are as follows.  In the event the available funds are not sufficient to advance all of the projects in a cost efficient manner, the secretary shall allocate the available funding to selected projects on the list so as to ensure the effective utilization of available resources.

Program                                    Project Name                     Project No.

Roadway                                   Lunenburg                          STP2301(1)S

Roadway                                   Waterbury Main Street       FEGC F013-4(13)

Roadway                                   Old Bennington                   STP 1400(5)S

                                                       (Monument Avenue)

Paving                                       Cambridge-Belvidere          VT 109 STP

                                                                                                 2219(1)S

Town Bridge                              Barton (Orleans)                 BRO 1449(29)

Safety & Traffic Operations       Middlebury                         NHG 019-3(52S)

* * * Additional Federal Funds * * *

Sec. 65.  ADDITIONAL FEDERAL FUNDS

(a)  To the extent federal funds become available beyond the funds authorized in fiscal year 2006 in the state’s transportation program, the secretary shall apply the funds, consistent with federal rules, as follows:

(1)  Subject to 19 V.S.A. § 10h(a), to cover cash flow shortages on projects due to increased costs or faster than anticipated progress, or to obligate federal fiscal year 2006 funds to state fiscal year 2007 paving projects currently planned for advance construction in federal fiscal year 2006 (summer of calendar year 2006) and conversion in federal fiscal year 2007. 

(2)  To advance projects in the state’s fiscal year 2006 transportation program in the safety and traffic operations, paving, roadway, town bridge or bridge maintenance programs or which are listed as shelf projects.  In making funding allocation decisions, the secretary shall consider the projects identified in subsection (b) of this section.  If the secretary decides not to allocate funds pursuant to this subsection to a project listed in subsection (b) of this section, the secretary shall explain the decision in writing addressing the factors which support the prioritization of other projects receiving funds as compared to the listed project. The secretary shall deliver copies of the written explanation to members of the house and senate committees on transportation and the members of the joint transportation oversight committee promptly after making the funding decision. 

(b)  The projects referred to in subdivision (a)(2) of this section are as follows.  In the event the available funds are not sufficient to advance all of the projects in a cost efficient manner, the secretary shall allocate the available funding to selected projects on the list so as to ensure the effective utilization of available resources.

Program                                    Project Name                     Project No.

Public Transit                             New Starts                        

Roadway                                   Lunenburg                          STP2301(1)S

Roadway                                   Waterbury Main Street       FEGC F013-4(13)

Roadway                                   Old Bennington                   STP 1400(5)S

                                                 (Monument Avenue)

Paving                                        Cambridge Belvidere          VT 109 STP

                                                                                            2219(1)S

Town Bridge                              Barton (Orleans)                 BRO 1449(29)

Safety & Traffic Operations       Middlebury                         NHG 019-3(52S)

                                                                        RICHARD T. MAZZA

                                                                        PHILLIP B. SCOTT

                                                                        PETER F. WELCH

                                                                 Committee on the part of the Senate


                                                                        RICHARD A. WESTMAN

                                                                        ALBERT AUDETTE

                                                                        TIMOTHY R. CORCORAN II

                                                                 Committee on the part of the House

Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference?, was decided in the affirmative on a roll call, Yeas 24, Nays 0.

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

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bartlett, Campbell, Collins, Condos, Coppenrath, Cummings, Doyle, Flanagan, Giard, Kitchel, Kittell, Leddy, Lyons, Maynard, Mazza, Miller, Mullin, Sears, Shepard, Snelling, Welch, White, Wilton.

Those Senators who voted in the negative were: None.

Those Senators absent and not voting were: Dunne, Gander, Illuzzi, MacDonald, Scott, Starr.

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

Recess

On motion of Senator Welch the Senate recessed until the fall the gavel.

Called to Order

At 6:00 P.M. the Senate was called to order by the President.

Message from the House No. 85

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

Mr. President:

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

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

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

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

                                         Rep. Botzow of Pownal

                                         Rep. Winters of Williamstown

                                         Rep. Malcolm of Pawlet

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

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.

And has severally adopted the same on its part.

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

H. 163.

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

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

Was taken up for immediate consideration.

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

To the Senate and House of Representatives:

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

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

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

Sec. 1.  FINDINGS

The General Assembly finds:


(1)  Vulnerable adults are one of the most abused segments of our population.  The 1998 National Elder Incidence Study reported that 449,925 elders experienced abuse or neglect in noninstitutional settings.  About 84 percent of these cases were never reported.  During the past five years, there has been a 41‑percent increase in the number of reports of abuse of vulnerable adults made to adult protective services in the Vermont department of aging and independent living.  During that same period, there has been a 66‑percent increase in the number of protective services provided to vulnerable adults.

(2)  Nationally, statistics show that more than 90 percent of people with developmental disabilities will experience sexual abuse at some point in their lives.  Only three percent of sexual abuse cases involving people with developmental disabilities are ever reported.

(3)  Crime victimization is a major problem among persons with severe mental illness (SMI).  In their report “Crime Victimization in Adults with Severe Mental Illness:  Comparison with the National Crime Victimization Survey,” researchers at Northwestern University’s Department of Psychiatry and Behavioral Sciences documented that:

(A)  More than 25 percent of persons with SMI had been victims of violent crimes within the past year, more than 11 times the rate for the general population even after controlling for demographic differences.

(B)  For the types of violent crimes analyzed (various degrees of rape/sexual assault, robbery, and assault), the rates of occurrence for persons with SMI ranged from six to 23 times greater than the rates among the general population.

(4)  According to a 2002 General Accounting Office report on nursing home resident abuse, there is increasing concern that nursing home residents are abused by the very people who are supposed to care for them.  In 1999, over 25 percent of nursing homes nationwide were cited by state survey agencies for conduct that harmed residents or put them at risk of death or serious injury.  Reports of sexual and physical abuse often are not made promptly, and existing state and federal safeguards do not adequately protect residents from potentially abusive nursing home employees.

(5)  Prevention services, training, and education are critical components in reducing abuse, neglect, and exploitation of vulnerable adults.  The more frequently and efficiently that education, prevention, and training services and other early interventions are employed, the greater likelihood that fewer vulnerable adults will be subject to abuse.  For example, reports to adult protective services increased by 18 percent during and immediately following a six-month 2004 public education campaign conducted by the Vermont Center for Crime Victim Services to educate vulnerable adults, the elderly, caregivers, and the general public about the issues of elder abuse, neglect, and exploitation in Vermont.  Such a significant and immediate increase underscores the clear need for more public education and training about the crimes committed against this vulnerable segment of our population.

(6)  While this act enhances the ability to prosecute persons under criminal law who abuse vulnerable adults, it is also the intent of the General Assembly to focus attention on the crucial role that prevention and training services can play to intervene at an early stage and ensure that vulnerable adults are not abused at all.

Sec. 2.  13 V.S.A. chapter 28 is added to read:

CHAPTER 28.  ABUSE, NEGLECT, AND

EXPLOITATION OF VULNERABLE ADULTS

§ 1375.  definitions

As used in this chapter:

(1)  “Bodily injury” means physical pain, illness, or any impairment of physical condition.

(2)  “Caregiver” means:

(A)  a person, agency, facility, or other organization with responsibility for providing subsistence, health, or other care to a vulnerable adult, who has assumed the responsibility voluntarily, by contract, or by an order of the court; or

(B)  a person providing care, including health care, custodial care, personal care, mental health services, rehabilitative services, or any other kind of care which is required because of another’s age or disability.

(3)  “Lewd and lascivious conduct” means any lewd or lascivious act upon or with the body, or any part or member thereof, of a vulnerable adult, with the intent of arousing, appealing to, or gratifying the lust, passions, or sexual desires of the person or the vulnerable adult.

(4)  “Neglect” means intentional or reckless failure or omission by a caregiver to:

(A)(i)  provide care or arrange for goods, services, or living conditions necessary to maintain the health or safety of a vulnerable adult, including, but not limited to, food, clothing, medicine, shelter, supervision, and medical services, unless the caregiver is acting pursuant to the wishes of the vulnerable adult or his or her representative, or an advanced directive as defined in chapter 111 of Title 18; or

(ii)  make a reasonable effort, in accordance with the authority granted the caregiver, to protect a vulnerable adult from abuse, neglect or exploitation by others.

(B)  Neglect may be repeated conduct or a single incident which has resulted in or could be expected to result in physical or psychological harm, as a result of subdivisions (A)(i) or (ii) of this subdivision (4).

(5)  “Serious bodily injury” means bodily injury which creates a substantial risk of death or which causes substantial loss or impairment of the function of any bodily member or organ or substantial impairment of health or substantial disfigurement.

(6)  “Sexual act” means conduct between persons consisting of contact between the penis and the vulva, the penis and the anus, the mouth and the penis, the mouth and the vulva, or any intrusion, however slight, by any part of a person’s body or any object into the genital or anal opening of another.

(7)  “Sexual activity” means a sexual act, other than appropriate health care or personal hygiene, or lewd and lascivious conduct.

(8) “Vulnerable adult” means any person 18 years of age or older who:

(A)  is a resident of a facility required to be licensed under chapter 71 of Title 33;

(B)  is a resident of a psychiatric hospital or a psychiatric unit of a hospital;

(C)  has been receiving personal care and services from an agency certified by the Vermont department of aging and independent living or from a person or organization that offers, provides, or arranges for personal care; or

(D)  regardless of residence or whether any type of service is received, is impaired due to brain damage, infirmities of aging, or a physical, mental, or developmental disability that results in some impairment of the individual’s ability to:

(i)  provide for his or her own care without assistance, including the provision of food, shelter, clothing, health care, supervision, or management of finances; or

(ii)  protect himself or herself from abuse, neglect, or exploitation.

§ 1376.  Abuse

(a)  A person who engages in conduct with an intent or reckless disregard that the conduct is likely to cause unnecessary harm, unnecessary pain, or unnecessary suffering to a vulnerable adult shall be imprisoned not more than one year or fined not more than $1,000.00, or both.

(b)  A person who commits an assault, as defined in section 1023 of this title, with actual or constructive knowledge that the victim is a vulnerable adult, shall be imprisoned for not more than two years or fined not more than $2,000.00, or both.

(c)  A person who commits an aggravated assault as defined in subdivision 1024(a)(1) or (2) of this title with actual or constructive knowledge that the victim is a vulnerable adult shall be imprisoned not more than 20 years or fined not more than $10,000.00, or both. 

§ 1377.  ABUSE BY UNLAWFUL RESTRAINT AND UNLAWFUL CONFINEMENT

(a)  Except as provided in subsection (b) of this section, no person shall knowingly or recklessly:

(1)  cause or threaten to cause unnecessary or unlawful confinement or unnecessary or unlawful restraint of a vulnerable adult; or

(2)  administer or threaten to administer a drug, a substance, or electroconvulsive therapy to a vulnerable adult.

(b)  This section shall not apply if the confinement, restraint, administration, or threat is:

(1)  part of a legitimate and lawful medical or therapeutic treatment; or

(2)  lawful and reasonably necessary to protect the safety of the vulnerable adult or others, provided that less intrusive alternatives have been attempted if doing so would be reasonable under the circumstances.

(c)  A person who violates this section shall:

(1)  be imprisoned not more than two years or fined not more than $10,000.00, or both.

(2)  if the violation causes bodily injury, be imprisoned not more than three years or fined not more than $10,000.00, or both.

(3)  if the violation causes serious bodily injury, be imprisoned not more than 15 years or fined not more than $10,000.00, or both.

§ 1378.  NEGLECT

(a)  A caregiver who intentionally or recklessly neglects a vulnerable adult shall be imprisoned not more than 18 months or fined not more than $10,000.00, or both.


(b)  A caregiver who violates subsection (a) of this section, and as a result of such neglect, serious bodily injury occurs to the vulnerable adult, shall be imprisoned not more than 15 years or fined not more than $10,000.00, or both.

§ 1379.  SEXUAL ABUSE

(a)  A person who volunteers for or is paid by a caregiving facility or program shall not engage in any sexual activity with a vulnerable adult.  It shall be an affirmative defense to a prosecution under this subsection that the sexual activity was consensual between the vulnerable adult and a caregiver who was hired, supervised, and directed by the vulnerable adult.  A person who violates this subsection shall be imprisoned for not more than two years or fined not more than $10,000.00, or both.

(b)  No person, whether or not the person has actual knowledge of the victim’s vulnerable status, shall engage in sexual activity with a vulnerable adult if:

(1)  the vulnerable adult does not consent to the sexual activity; or

(2)  the person knows or should know that the vulnerable adult is incapable of resisting, declining, or consenting to the sexual activity due to his or her specific vulnerability or due to fear of retribution or hardship.

(c)  A person who violates subsection (b) of this section shall be:

(1)  imprisoned for not more than five years or fined not more than $10,000.00, or both, if the sexual activity involves lewd and lascivious conduct;

(2)  imprisoned for not more than 20 years or fined not more than $10,000.00, or both, if the sexual activity involves a sexual act.

(d)  A caregiver who violates subsection (b) of this section shall be:

(1)  imprisoned for not more than seven years or fined not more than $10,000.00, or both, if the sexual activity involves lewd and lascivious conduct.

(2)  imprisoned for not more than 25 years or fined not more than $10,000.00, or both, if the sexual activity involves a sexual act.

§ 1380.  Financial exploitation

(a)  No person shall willfully use, withhold, transfer, or dispose of funds or property of a vulnerable adult, without or in excess of legal authority, for wrongful profit or advantage.  No person shall willfully acquire possession or control of or an interest in funds or property of a vulnerable adult through the use of undue influence, harassment, duress, or fraud.

(b)  A person who violates subsection (a) of this section, and exploits money, funds, or property of no more than $500.00 in value, shall be imprisoned not more than 18 months or fined not more than $10,000.00, or both.

(c)  A person who violates subsection (a) of this section, and exploits money, funds, or property in excess of $500.00 in value, shall be imprisoned not more than 10 years or fined not more than $10,000.00, or both.

§ 1381.  Exploitation of services

Any person who willfully forces or compels a vulnerable adult against his or her will to perform services for the profit or advantage of another shall be imprisoned not more than two years or fined not more than $10,000.00, or both.

§ 1382.  DEFERRED SENTENCE

Notwithstanding the limitation of subsection 7041(a) of this title, a court may, on the motion of a party or on its own motion, with or without the consent of the state’s attorney, defer sentencing for a misdemeanor violation of this chapter and place the defendant on probation upon such terms and conditions as it may require.

§ 1383.  ADULT ABUSE REGISTRY

A person who is convicted of a crime under this chapter shall be placed on the adult abuse registry.  A deferred sentence is considered a conviction for purposes of the adult abuse registry.

Sec. 3.  13 V.S.A. § 5301(7) is amended to read:

§ 5301.  Definitions

As used in this chapter:

* * *

(7)  For the purpose of this chapter, “listed crime” means any of the following offenses:

* * *

(Z)  burglary into an occupied dwelling as defined in section subsection 1201(c) of this title; and

(AA)  the attempt to commit any of the offenses listed in this section; and

(BB)  abuse (section 1376 of this title), abuse by restraint (section 1377 of this title), neglect (section 1378 of this title), sexual abuse (section 1379 of this title), financial exploitation (section 1380 of this title), and exploitation of services (section 1381 of this title).

Sec. 4.  33 V.S.A. § 6913 is amended to read:

§ 6913.  PENALTIES; DEFERRED SENTENCING; CRIMINAL SEXUAL ACTIVITY BY CAREGIVER; ABUSE; NEGLECT; EXPLOITATION; MANDATORY REPORTER’S FAILURE TO REPORT

(a)  Any person who engages in abuse, as defined in subdivision 6902(1)(B) or (C) of this title shall be fined not more than $10,000.00 or be imprisoned not more than 18 months, or both.

(b)  Any person who willfully engages in exploitation as defined in subdivision 6902(6)(A), (B) or (C) of this title, shall be fined not more than $10,000.00 or be imprisoned for not more than 18 months, or both.

(c)  Any caregiver who purposely, knowingly or recklessly neglects a vulnerable adult as defined in subdivision 6902(7) of this title shall be fined not more than $10,000.00 or be imprisoned for not more than 18 months, or both.

(d)  Any caregiver who engages in abuse of a vulnerable adult in violation of subdivision 6902(1)(D) of this title shall be fined not more than $10,000.00 or be imprisoned not more than two years, or both.

(e)  Any mandatory reporter as defined in subdivision 6903(a)(1), (2), (3), (4) and (5) of this title that willfully violates subsection 6903(a) of this title shall be fined not more than $500.00 or be imprisoned for not more than one year, or both.

(f)  Notwithstanding the limitation of 13 V.S.A. § 7041(a), a court may, on the motion of a party or on its own motion, with or without the consent of the state’s attorney, defer sentencing and place the defendant on probation upon such terms and conditions as it may require.

(g)  Whenever the commissioner finds, after notice and hearing, that a person has committed sexual abuse as defined in subdivision 6902(1)(D) of this title, sexual exploitation as defined in subdivision 6902(6)(D), exploitation as defined in subdivision 6902(6)(A) or (B) in an amount in excess of $500.00, abuse which causes grievous injury to or the death of a vulnerable adult, or neglect which causes grievous injury to or the death of a vulnerable adult, the commissioner may impose an administrative penalty of not more than $10,000.00 for each violation, except as provided in subsection (h) of this section.  The commissioner shall notify the office of professional regulation, or any other professional licensing board applicable to the violator, of any decision made pursuant to this subsection.

(h)(b)  Whenever the commissioner finds, after notice and hearing, that a mandatory reporter, as defined in subdivisions 6903(a)(1), (2), (3), (4), and (5) of this title, has willfully violated the provisions of subsection 6903(a), the commissioner may impose an administrative penalty not to exceed $500.00 per violation.  For purposes of this subsection, every 24 hours that a report is not made beyond the period for reporting required by subsection 6903(a) shall constitute a new and separate violation, and a mandatory reporter shall be liable for an administrative penalty of not more than $500.00 for each 24-hour period, not to exceed a maximum penalty of $5,000.00 per reportable incident.

(i)(c)  A person who is aggrieved by a decision under subsection (g)(a) or (h)(b) of this section may appeal that decision to the superior court where either party may request trial by jury.

Sec. 5.  13 V.S.A. § 5401(10) is amended to read:

(10)  “Sex offender” means:

(A)  A person who is convicted in any jurisdiction of the United States, including a state, territory, commonwealth, the District of Columbia, or military, federal, or tribal court of any of the following offenses:

* * *

(iv)  sexual activity by a caregiver as defined in 33 V.S.A. § 6913(d) abuse of a vulnerable adult as defined in section 1379 of this title;

* * *

Sec. 6.  33 V.S.A. § 6906(a) is amended to read:

§ 6906.  INVESTIGATION

(a)(1)  The commissioner shall cause an investigation to commence within 48 hours after receipt of a report made pursuant to section 6904 of this title.

(2)  The commissioner shall keep the reporter and the alleged victim informed during all stages of the investigation, and shall:

(A)  notify the reporter, the victim, and the victim’s legal representative, if any, in writing if adult protective services or the division of licensing and protection decides not to investigate the report.  The notification shall be provided within five business days after the decision is made and shall inform the reporter that he or she may ask the commissioner to review the decision.


(B)  notify the reporter, the victim, and the victim’s legal representative, if any, in writing if adult protective services or the division of licensing and protection refers the report to another agency.  The notification shall be provided within five business days after the referral is made.

(C)  notify the reporter, the victim, and the victim’s legal representative, if any, in writing of the outcome of the investigation.  The notification shall be provided within five business days after the decision is made and shall inform the reporter that he or she may ask the commissioner to review the decision.

Sec. 7.  33 V.S.A. § 6912 is amended to read:

§ 6912.  PUBLIC EDUCATION AND DISCLOSURE OF RIGHTS AND DUTIES; POSTING OF NOTICE

(a)  The department, within available appropriations, shall conduct a publicity and education program to encourage the fullest degree of reporting of suspected abuse, neglect, or exploitation of vulnerable adults.

(b)  All agencies, facilities or institutions providing care and services to elderly or, disabled, or vulnerable adults shall inform their employees of their right and duty to report suspected incidents of abuse, neglect, or exploitation and the protections afforded them by this chapter, and shall establish appropriate policies and procedures to facilitate such reporting.

(c)(1)  All agencies, facilities, or institutions providing care and services to vulnerable adults shall post in a prominent and accessible location a poster describing the protections afforded to vulnerable adults by this chapter and by chapter 28 of Title 13.  The poster shall include, at a minimum, the following:

(A)  A statement that abuse, neglect, and exploitation of vulnerable adults is unlawful.

(B)  A statement that it is unlawful to retaliate against a person for filing a complaint of abuse, neglect, or exploitation or for cooperating in an investigation of abuse, neglect, or exploitation.

(C)  A description and examples of abuse, neglect, and exploitation.

(D)  A statement of the range of consequences for persons who commit abuse, neglect, or exploitation.

(E)  If the agency, facility, or institution has more than five employees, a description of the process for filing internal complaints about abuse, neglect, and exploitation, and the names, addresses, and telephone numbers of the person or persons to whom complaints should be made.


(F)  The complaint process of the appropriate state and federal agencies and directions as to how to contact such agencies. 

(2)  Except as provided in subdivision (3) of this subsection, the poster required by this subsection shall be posted in a location where it would ordinarily be viewed by vulnerable adults.

(3)  An agency, facility, or institution which provides home-based services shall:

(A)  display the poster required by this subsection in its principal place of business; and

(B)  provide a written notice which includes all information contained on the poster to each vulnerable adult for whom services are provided.    

Sec. 8.  13 V.S.A. § 5405 is amended to read:

§ 5405.  COURT DETERMINATION OF SEXUALLY VIOLENT PREDATORS

(a)  The general assembly finds that some sexual offenders should be subject to increased sex offender registry and community notification procedures.  It is the intent of the general assembly that state’s attorneys utilize the provisions in this section to petition the court to designate those offenders who pose a greater risk to the public as sexually violent predators to ensure that those offenders will be required to register as sex offenders for life, and that they will be among those offenders who are included on the state’s internet sex offender registry. 

(b)  Within ten 15 days after the conviction of a sex offender, the state may file a written request petition with the court requesting that the person be designated as a sexually violent predator.

(b)(c)  The determination of whether a person is a sexually violent predator shall be made by the court at the time of sentencing after reviewing the recommendations of at least two experts in the behavior and treatment of sexual offenders

(d)  The court shall order a presentence investigation which shall include a psychosexual evaluation of the offender.  

(c)(e)  In making a determination of whether the person is a sexually violent predator, the court shall examine the following:

(1)  the person’s criminal history;

(2)  any testimony presented at trial, including expert testimony as to the person’s mental state;

(3)  the person’s history of treatment for a personality disorder or mental abnormality connected with his or her criminal sexual behavior;

(4)  any mitigating evidence, including treatment history or, evidence of modified behavior, or expert testimony, which the convicted sex offender wishes to provide to the court prior to the determination; and

(5)  any other relevant evidence.

(d)(f)  The standard of proof when the court makes such a determination shall be clear and convincing evidence that the convicted sex offender suffers from a mental abnormality or personality disorder that makes the person likely to engage in predatory sexually violent offenses.

(g)  The court shall determine whether the offender was eligible to be charged as a habitual offender as provided in section 11 of this title or a violent career criminal as provided in section 11a of this title and shall make findings as to such.

(e)(h)  After making a determination its determinations, the court shall issue a written decision explaining the reasons for its determination determinations and provide a copy of the decision to the department within 10 days.

(i)  A person who is determined to be a sexually violent predator shall be subject to sex offender lifetime registration and community notification and inclusion on the internet sex offender registry as provided in this subchapter.

Sec. 9.  13 V.S.A. § 2602 is amended to read:

§ 2602.  LEWD OR LASCIVIOUS CONDUCT WITH CHILD

(a)  A person who No person shall wilfully and lewdly commit any lewd or lascivious act upon or with the body, or any part or member thereof, of a child under the age of sixteen 16 years, with the intent of arousing, appealing to, or gratifying the lust, passions, or sexual desires of such person or of such child, shall be imprisoned for the first offense, not less than one year nor more than five years, or fined not more than $3,000.00, or both; for the second offense, not less than two years and not more than ten years, or fined not more than $5,000.00, or both; and for the third or subsequent offense, not less than three years and not more than 20 years, or fined not more than $10,000.00, or both.

(b)  A person who violates subsection (a) of this section shall be:

(1)  For a first offense, imprisoned not less than one year and not more than 15 years or fined not more than $5,000.00, or both.

(2)  For a second offense, imprisoned not less than two years and not more than 30 years or fined not more than $10,000.00, or both.


(3)  For a third offense, imprisoned not less than three years and up to and including life or fined not more than $25,000.00, or both.

Sec. 10.  13 V.S.A. § 3253 is amended to read:

§ 3253.  AGGRAVATED SEXUAL ASSAULT

* * *

(b)  A person who commits the crime of aggravated sexual assault shall be punishable by a maximum sentence of life imprisonment imprisoned up to and including life or a fine of fined not more than $50,000.00, or both.  No person who receives a minimum sentence under this section shall be eligible for early release or furlough until the expiration of the minimum sentence imposed.

Sec. 11.  APPROPRIATION – FUNDING FOR EVALUATIONS

The amount of $50,000.00 is appropriated from the general fund in fiscal year 2005 to the department of corrections for the purpose of funding psychosexual evaluations as a part of presentence investigations conducted by the department in cases involving a petition to have a person designated as a sexually violent predator as provided in 13 V.S.A. § 5405 or in sentencing for the crimes of lewd and lascivious conduct with a child as defined in 13 V.S.A. § 2602, aggravated sexual assault as defined in 13 V.S.A. § 3253, and second offense use of electronic communication to lure a child as defined in 13 V.S.A. § 2828.  This appropriation shall be used only for the purposes defined in this section, and any unexpended balance of this appropriation shall carry forward and not be reverted to the general fund.  The department of corrections shall include in its annual budget proposal for fiscal year 2007 and thereafter an allocation to fund these evaluations.  The annual allocation shall be estimated based on the need for such evaluations experienced in the current and previous two fiscal years.

Sec. 12.  REPORT

(a)  On or before January 15, 2006 and on or before January 15 of each year thereafter, the secretary of the agency of human services shall submit a report to the following committees:  the house and senate committees on judiciary, the house committee on human services, and the senate committee on health and welfare.  The report shall include:

(1)(A)  The number of reports of abuse, exploitation, and neglect:

(i)  received by adult protective services (APS) within the department of aging and independent living during the preceding year, and the total number of persons who filed reports.

(ii)  investigated by APS during the preceding year.

(iii)  substantiated by APS during the preceding year.

(iv)  referred to other agencies for investigation by APS during the preceding year, including identification of each agency and the number of referrals it received.

(v)  referred for protective services by APS during the preceding year, including a summary of the services provided.

(B)  For each type of report required from APS by subdivision (1)(A) of this section, a statistical breakdown of the number of reports according to the type of abuse and to the victim’s:

(i)  relationship to the reporter;

(ii)  relationship to the alleged perpetrator;

(iii)  age;

(iv)  disability or impairment; and

(v)  place of residency.

(2)  A complete description of the types of services offered by APS in response to reports of abuse, exploitation, and neglect, including identification of the funding sources for each service, past trends, and future projections for funding, and whether the current and anticipated funding is adequate to meet the service needs.

(3)  A complete description of the notification which APS provides to persons who make reports of abuse, exploitation, and neglect, and the notifications provided to the persons when APS determines to investigate or not to investigate a report, to conclude an investigation, to substantiate or not to substantiate a report, or to refer the report to another agency.

(b)  The report submitted on January 15, 2006 shall include:

(1)  A description of any costs incurred by the department of aging and independent living as a result of meeting the requirements of this act.

(2)  An update on coordination and communication between the department of aging and independent living and the department for children and families with respect to the adult abuse registry established under section 6911 of Title 33 and the child abuse registry established under section 4913 of Title 33.  The update shall include how information on the registries is shared between state personnel and private employers, and whether employers are required to make separate requests from each registry or whether one request automatically produces information from both registries.


(c)  On or before January 1, 2006, the attorney general shall report to the  house and senate committees on judiciary on whether any issues or difficulties have resulted from removing the requirement that the adult be receiving services “for more than one month” from the definition of “vulnerable adult” in subdivision 1375(8)(C) of Title 13.

Sec. 13.  EFFECTIVE DATE

Sec. 11 shall be effective upon passage. 

                                                                 RICHARD W. SEARS, JR.

                                                                 JOHN F. CAMPBELL

                                                                 KEVIN J. MULLIN

                                                      Committee on the part of the Senate

                                                                 WILLIAM J. LIPPERT, JR.

                                                                 MAXINE JO GRAD

                                                                 MICHAEL R. KAINEN

                                                      Committee on the part of the House

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

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

S. 52.

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

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

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:

     S. 52.  An act relating to renewable energy portfolio standards, appliance efficiency standards, and distributed electricity.

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 out 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.

                                                                 VIRGINIA V. LYONS

                                                                 MARK A. MACDONALD

                                                                 ANN E. CUMMINGS

                                                      Committee on the part of the Senate

                                                                 ROBERT DOSTIS

                                                                 JOYCE H. ERRECART

                                                                 TONY KLEIN

                                                      Committee on the part of the House

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

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

S. 174.

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

     An act relating to home heath agencies.

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:

     H. 174.  An act relating to home heath agencies.

Respectfully reports that it has met and considered the same and recommends that the Senate accede to the House proposal of amendment with the following additional amendments:

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

                                                                 JAMES P. LEDDY

                                                                 SARA BRANON KITTELL

                                                                 WILLIAM T. DOYLE

                                                      Committee on the part of the Senate

                                                                 JANET ANCEL

                                                                 FRANCIS MCFAUN

                                                                 VIRGINIA MILKEY

                                                      Committee on the part of the House

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

House Proposal of Amendment Not Concurred In; Committee of Conference Requested; Committee of Conference Appointed

S. 16.

House proposal of amendment to Senate bill entitled:

An act relating to campaign finance.

Was taken up for immediate consideration

The House proposes to the Senate to amend the bill as follows:

First:  In Sec. 8, 17 V.S.A. § 2806a, by adding a new subsection (d) to read as follows:

(d)     Any person aggrieved by a civil investigation conducted under this section may seek relief from Washington Superior Court or the superior court in the county in which the aggrieved person resides.  Except for cases the court considers to be of greater importance, proceedings before superior court as authorized by this section shall take precedence on the docket over all other cases.

Second:  In Sec. 13, 17 V.S.A. § 2891, by deleting the word “subchapter” and inserting in lieu thereof the word chapter

Thereupon, pending the question, Shall the Senate concur in the House proposal of amendment?, on motion of Senator Condos, the Senate refused to concur in the House proposal of amendment and requested a Committee of Conference.

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

                                         Senator Condos

                                         Senator White

                                         Senator Doyle

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

Committee of Conference Appointed

H. 540.

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

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

                                         Senator Kittell

                                         Senator Wilton

                                         Senator Ayer

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

Joint Resolution Referred

J.R.S. 40.

Joint Senate resolution of the following title was offered, read the first time and is as follows:

   By Senators Lyons, Campbell, Dunne, Illuzzi, Miller, Sears and Welch,

J.R.S. 40.  Joint resolution relating to international trade and state sovereignty.

Whereas, although the Constitution of the United States places the regulation of trade with foreign countries within the prerogative of the federal government, the primary responsibility for protecting public health, welfare, and safety is left to the states, and

Whereas, the United States Congress has consistently recognized, respected, and preserved the states’ power to protect their health, welfare, and environments and that of their citizens in a variety of statutes, such as the Clean Air Act, Clean Water Act, and Safe Drinking Water Act, and

Whereas, it is vital that the federal government not agree to proposals in the current negotiations on trade in services that might in any way preempt or undercut this reserved state authority, and

Whereas, proposed changes should not, in the name of promoting increased international trade, accord insufficient regard for existing regulatory, tax and subsidy policies and the social, economic and environmental values those policies promote, and

Whereas, statutes and regulations that the states and local governments have validly adopted that are plainly constitutional and within their province to adopt and that reflect locally appropriate responses to the needs of their citizens should not be overridden by federal decisions solely in the interest of increased trade, and

Whereas, states are concerned about retaining a proper scope for state regulatory authority in actual commitments in agreements with one or more United States trading partners, and

Whereas, it is crucial to maintain the principle that the United States may request, but not require, states to alter their regulatory regimes in areas over which they hold constitutional authority, and

Whereas, if the United States makes broader offers later in the negotiations and the legislation is “fast tracked,” there will be little opportunity for states to have improper positions reversed, and

Whereas, it is critical that there be full and effective coordination and consultation with the states before the United States Trade Representative (USTR) makes any binding commitments, and

Whereas, while the state point of contact system was meant to create a clearly marked channel for two-way communications, the reality has not lived up to that intention, and

Whereas, a broader and deeper range of contacts with a variety of state entities, particularly with those bearing regulatory and legislative authority, must be improved and maintained over the next several years, and

Whereas, it is important for state authorities to engage with the USTR in the communications process and to respond to timely requests in an equally timely manner, and

Whereas, as negotiations with other nations continue, they should also be conducted in ways that will avoid litigation in world courts, and

Whereas, the United States is the signatory to the World Trade Organization’s General Agreement on Trade in Services (GATS), and

Whereas, the USTR has published proposals that would apply trade rules under GATS to regulation of electricity by state and local governments, and

Whereas, these proposals would cover regulation of services related to transmission, distribution and access of energy traders to the grid, and, if implemented, might conflict with state energy policy and alter the balance of domestic authority between states and the Federal Energy Regulatory Commission (FERC), and

Whereas, concerns include the impact of market access rules on the structure of Regional Transmission Organizations (RTO), state jurisdiction over utilities that are part of an RTO, RTO contracts for reliability of the electricity grid, and potential roles for the RTO to structure or facilitate wholesale trade and brokering services, and

Whereas, another question is the impact that national treatment rules may have on tax incentives to produce wind energy and market access rules which may have an impact on renewable portfolio standards or alternative regulatory provisions that mandate minimum quotas for acquisition from renewable sources, and

Whereas, a further question is the impact that GATS rules on domestic regulation may have on rate-setting and the public interest standard for exercising regulatory authority by state public utility commissions, and

Whereas, the USTR is considering expanding the services covered by the GATS agreement during the summer of 2005, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly urges the United States Trade Representative to conduct trade negotiations in a manner that will preserve the responsibility of states to develop their own regulatory structures and that will avoid litigation in world courts, and be it further

Resolved:  That the General Assembly urges the USTR to take further steps to enhance the level of consultation before negotiations commence on any trade commitments under the World Trade Organization’s General Agreement on Trade in Services, and be it further

Resolved:  That the General Assembly urges the USTR to disclose to the public the United States’ requests for GATS commitments from other nations, and be it further

Resolved:  That the General Assembly urges the USTR to give prior notice of the next United States’ offer or counteroffer for GATS commitments so that state and local governments have at least three months’ time to discuss its potential impact, and be it further

Resolved:  That the General Assembly urges the USTR to participate in public discussions of trade policy and energy, and be it further

Resolved:  That a copy of this resolution be sent to Senator Charles Grassley, Chair of the Senate Finance Committee; Senator Craig Thomas, Chair of the Senate Subcommittee on International Trade; U.S. Representative Bill Thomas, Chair of the House Ways and Means Committee; Representative Clay Shaw, Chair of the House Subcommittee on Trade; Secretary of Energy Samuel Bodman; U.S. Trade Representative Rob Portman; Vermont Attorney General William Sorrell in his role as president of the National Association of Attorneys General; William T. Pound at the National Conference of State Legislatures in Washington, D.C.; the President of the United States; and the Vermont Congressional delegation.

Thereupon, the President, in his discretion, treated the joint resolution as a bill and referred it to the Committee on Government Operations.

Rules Suspended; Bills Messaged

On motion of Senator Mazza, the rules were suspended, and the following bills were ordered messaged to the House forthwith:

S. 16; H. 163; H. 540.

Rules Suspended; Bills Messaged

On motion of Senator Mazza, the rules were suspended, and the following bills were ordered messaged to the Governor forthwith:

S. 52, S. 174.

Recess

On motion of Senator Mazza the Senate recessed until 7:30 P.M.

Called to Order

At 7:55 P.M. the Senate was called to order by the President.

Message from the House No. 86

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

Mr. President:

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

J.R.H. 40.  An act relating to authorizing the commissioner of forests, parks and recreation to sell designated state lands.

And has concurred therein.

The Governor has informed the House of Representatives 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.

The House has considered the reports of the Committees of Conference upon the disagreeing votes of the two Houses on Senate bills of the following title:

S. 66.  An act relating to the welfare of animals

S. 80.  An act relating to the minimum wage.

S. 159.  An act relating to updating and clarifying education law.

S. 171.  An act relating to agricultural water quality.

And has adopted the same on its part.

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

S. 16.  An act relating to campaign finance.

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

                                         Rep. Bohi of Hartford

                                         Rep. Clark of St. Johnsbury

                                         Rep. Hutchinson of Randolph

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

S. 40.  An act relating reducing fires resulting from the careless use of cigarettes and to other tobacco-related issues.

And has concurred therein.

The House has considered a Joint Resolution originating in the Senate of the following title:

J.R.S. 36.  Joint resolution relative to federal policy concerning MTBE.

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

The House has considered a Joint Resolution originating in the Senate 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.

And has adopted the same in concurrence.

     The House has adopted Concurrent resolutions of the following titles:

     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.

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

     The House has considered concurrent resolutions originating in the Senate of the following titles:

     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.

And has adopted the same in concurrence.

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

H. 545.

Pending entry on the Calendar for notice, Senator Campbell moved that the rules be suspended and that House bill entitled:

An act authorizing Vermont Yankee to go before the public service board to seek permission for dry cask storage.

Be taken up for immediate consideration,

Which was agreed to on a roll call, Yeas 19, Nays 5.

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

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bartlett, Campbell, Condos, Coppenrath, Cummings, Doyle, Kitchel, Kittell, Lyons, Maynard, Mazza, Miller, Mullin, Sears, Shepard, Snelling, Welch, Wilton.

Those Senators who voted in the negative were: Flanagan, Gander, Illuzzi, Leddy, White.

Those Senators absent and not voting were: Collins, Dunne, Giard, MacDonald, Scott, Starr.

Thereupon, the bill was taken up for immediate consideration.

     Senator Lyons, for the Committee on Natural Resources and Energy, to which the bill was referred, reported recommending that the Senate propose to the House to amend the bill be amended as follows:

     First:  In Sec. 2, 10 V.S.A. § 6523(a)(1)(A), before the word “docket” by adding the words public service board

     Second:  In Sec. 2, 10 V.S.A. § 6523(a), by striking out subdivision (3) in its entirety and by striking out subsection (d) in its entirety and inserting in lieu thereof a new subsection (d) to read as follows:

(d)  Expenditures authorized.

(1)  This fund shall be administered by the department of public service to facilitate the development and implementation of clean energy resources.   The fund shall not be used to meet costs of administration.

(2)  The department shall assure an open public process in the administration of the fund for the purposes established in this subchapter.

(3)   By January 15 of each year, commencing in 2007, the department of public service shall provide to the house and senate committees on  natural resources and energy, the senate committee on finance, and the house committee on commerce a report detailing the revenues collected and the expenditures made under this subchapter, together with recommended principles to be followed in the allocation of funds and a proposed five-year plan for future expenditures from the fund.

(4)  Projects  for funding may include the following:

(A)  projects that will sell power in commercial quantities;

(B)  among those projects that will sell power in commercial quantities, funding priority will be given to those projects that commit to sell power to Vermont utilities on favorable terms;

(C)  projects to benefit publicly owned or leased buildings;

(D)  renewable energy projects on farms;

(E)  small scale renewable energy in Vermont residences and businesses; and

(F)  effective projects that are not likely to be established in the absence of funding under the program.

(5)  If during a particular year, the department determines that there is a lack of high value projects eligible for funding, as identified in the five-year plan, or as otherwise identified, the department may consult with the board, and shall consider transferring funds to the energy efficiency fund established under the provisions of 30 V.S.A.§ 209(d).  Such a transfer may take place only in response to an opportunity for a particularly cost effective investment in energy efficiency, and only as a temporary supplement to funds collected under that subsection, not as replacement funding.

     Third:  By adding a new section to be numbered Sec. 3 to read as follows:

Sec. 3.  REPORT ON USE OF CLEAN ENERGY DEVELOPMENT FUND

By no later than January 15, 2006, the department of public service shall present to the house and senate committees on natural resources and energy, the senate committee on finance, and the house committee on commerce a report containing recommendations with respect to how best to implement the clean energy development fund.  The report shall include:

(1) draft legislation, if necessary, with respect to implementation of the clean energy development fund;

(2) a proposed plan for allocations from the fund;

(3) proposed rules to manage expenditures from fund, the application process, equity among the various regions of the state, equity among competing technologies, equity among applicants who may be competitors with each other, and other matters that the commissioner deems appropriate to address by means of rule.

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

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

Thereupon, the bill was read the second time by title only pursuant to Rule 43, and pending the question, Shall the Senate propose to the House to amend the bill as recommended by the Committee on Natural Resources and Energy?, Senator Flanagan moved to amend the proposal of amendment of the Committee on Natural Resources and Energy by striking out Secs. 1 and 2 in their entirety and inserting in lieu thereof a new Sec. 1 to read as follows:

Sec. 1.  INTERIM AUTHORITY UNDER 10 V.S.A. CHAPTER 157

(a)  Findings.  The general assembly finds that the Senate has not had adequate time during the 2005 session of the general assembly to fully consider the advisability of enacting H.545, relating to authorizing the storage of nuclear waste at the Vermont Yankee nuclear power station.  Nevertheless, the owners of the plant maintain that they need legislative authorization under that chapter, during the present session, if they are to be assured of a timely ability to construct that storage capability.

(b)  Interim authority to proceed before the public service board.  Notwithstanding the provisions of 10 V.S.A. § 6503(c), with respect to an application submitted during 2005 for storage of spent nuclear fuel at the Vermont Yankee nuclear power station, the public service board, the department of public service and other state agencies may undertake the certificate of public good process established under 30 V.S.A. § 248, before legislative approval has been obtained under 10 V.S.A. chapter 157; provided however, no such certificate or final judicial appeal, if any, shall become effective until that legislative approval has been obtained.

Thereupon, pending the question, Shall the report of the Committee on Natural Resources and Energy be amended as recommended by Senator Flanagan?, Senator Flanagan requested and was granted leave to withdraw his proposal of amendment.

Thereupon, the recurring question, Shall the bill be amended as recommended by the Committee on Natural Resources and Energy?, was agreed to.

Thereupon, pending the question, Shall the bill be read the third time? Senator White moved that the Senate propose to the House to amend the bill in Sec. 2, 10 V.S.A. §6522(c), at the end of subdivision (5), by adding a sentence to read as follows:

Simultaneously with its filing with the public service board, the applicant shall submit its request for approval for storage of spent fuel derived from the operation of Vermont Yankee after March 21, 2012, to Vermont General Assembly House and Senate committees on natural resources and energy, the House committee on commerce, and the Senate committee on finance.

Which was disagreed to on a roll call, Yeas 4, Nays 20.

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

Roll Call

Those Senators who voted in the affirmative were: Flanagan, Illuzzi, Kittell, White.

Those Senators who voted in the negative were: Ayer, Bartlett, Campbell, Condos, Coppenrath, Cummings, Doyle, Gander, Kitchel, Leddy, Lyons, Maynard, Mazza, Miller, Mullin, Sears, Shepard, Snelling, Welch, Wilton.

Those Senators absent and not voting were: Collins, Dunne, Giard, MacDonald, Scott, Starr.

Thereupon, the pending question, Shall the bill be read the third time?, was agreed to on a roll call, Yeas 18, Nays 6.

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

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bartlett, Campbell, Condos, Coppenrath, Doyle, Kitchel, Kittell, Lyons, Maynard, Mazza, Miller, Mullin, Sears, Shepard, Snelling, Welch, Wilton.

Those Senators who voted in the negative were: Cummings, Flanagan, Gander, Illuzzi, Leddy, White.

Those Senators absent and not voting were: Collins, Dunne, Giard, MacDonald, Scott, Starr.

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

Thereupon, the bill was read the third time and the question, Shall the bill pass in concurrence with proposals of amendment?, was agreed to on a roll call, Yeas 18, Nays 6.

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

Roll Call

Those Senators who voted in the affirmative were: Ayer, Bartlett, Campbell, Condos, Coppenrath, Doyle, Kitchel, Kittell, Lyons, Maynard, Mazza, Miller, Mullin, Sears, Shepard, Snelling, Welch, Wilton.

Those Senators who voted in the negative were: Cummings, Flanagan, Gander, Illuzzi, Leddy, White.

Those Senators absent and not voting were: Collins, Dunne, Giard, MacDonald, Scott, Starr.

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

Adjournment

On motion of Senator Welch, the Senate adjourned until nine o’clock and thirty minutes in the morning.