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Senate Calendar

tuesday, march 29, 2005

84th DAY OF BIENNIAL SESSION

TABLE OF CONTENTS

                                                                                                                Page No.

ACTION CALENDAR

UNFINISHED BUSINESS OF FRIDAY, MARCH 25, 2005

S. 101     Requiring carbon monoxide detectors in housing................................... 352

                        Sen. Illuzzi amendment.............................................................. 352

NEW BUSINESS

Third Reading

H. 118    Amending the charter of the city of Burlington..................................... 352

Second Reading

Favorable with Recommendation of Amendment

S. 56       Relating to restructuring the agency of natural resources..................... 353

                        Natural Resources committee report........................................ 353

                        Appropriations committee report.............................................. 359

Committee Bill for Second Reading

S. 157     Relating to rulemaking for Vermont origin.......................................... 359

NOTICE CALENDAR

Favorable with Recommendation of Amendment

S. 63       Transfer of certain functions from Dept. of Labor & Industry............. 359

S. 113     Authorizing nonprofit hospitals to convert charitable assets................. 360




 

ORDERS OF THE DAY

ACTION CALENDAR

UNFINISHED BUSINESS OF FRIDAY, MARCH 25, 2005

S. 101

An act relating to requiring carbon monoxide detectors in housing.

Pending Question:  Shall the bill be amended as recommended by the Committee on Economic Development, Housing and General Affairs?

Text of recommendation of amendment of the Committee on Economic Development, Housing and General Affairs is as follows:

The committee recommends that the bill be amended by striking out Sec. 3 and inserting in lieu thereof the following:

Sec. 3.  EFFECTIVE DATE; TRANSITIONAL PROVISIONS

(a)  This act shall take effect on July 1, 2005.

(b)  Compliance with Sec. 2 of this act:

(1)  Relating to buildings in which people sleep, shall be effected no later than October 1, 2005.

(2)  Relating to public commercial buildings in which people do not sleep, shall be effected no later than November 1, 2006.

AMENDMENT TO S. 101 TO BE OFFERED BY SENATOR ILLUZZI ON BEHALF OF THE COMMITTEE ON ECONOMIC DEVELOPMENT, HOUSING AND GENERAL AFFAIRS

     Senator Illuzzi, on behalf of the Committee on Economic Development, Housing and General Affairs, moves to amend the bill in Sec. 1, 9 V.S.A. §2883(a) after the words “certify to the buyer” by adding the words at the closing of the transaction

NEW BUSINESS

Third Reading

H. 118

An act relating to amending the charter of the city of Burlington.


Second Reading

Favorable with Recommendation of Amendment

S. 56

An act relating to restructuring the agency of natural resources.

Reported favorably with recommendation of amendment by Senator Bartlett for the Committee on Natural Resources and Energy.

The Committee recommends that the bill be amended 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 agency of natural resources affects the lives of all Vermonters in carrying 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 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.  The lack of coordination between regional and central agency staff can result in the inconsistent application of agency policies.

(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)  Appeals of agency decisions reveal that, on occasion, those decisions are inconsistent with state law.

(E)  The problems faced by the agency of natural resources may be the result of a lack of agency resources, an inefficient use 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 being addressed by other state agencies (including state long-range transportation planning, energy planning, and planning to address global climate change).

(G)  State agencies, in general, fail to comply with the “Act 200” planning requirements of 24 V.S.A. § 4302.  Therefore, it is difficult for the agency of natural resources:

(i)  to assure that it acts in a manner consistent with its own Act 200 plans;

(ii)  to coordinate its plans with the Act 200 plans of other agencies; and

(iii)  to assure that its actions are consistent with the Act 200 goals. 

(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 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 will be done in a manner that connects to the work of all the departments and guides staff implementation.

Sec. 2.  TIMELINE AND PROCESS

The secretary shall engage in the following process as part of a restructuring of the agency:

(1)  In order to implement state environmental policy for the benefit of current and future generations, the secretary 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 and shall continue through December 2005.

(B)  Collaborate with agency staff, advocacy groups, other state agencies, municipalities, and other stakeholders to determine specific accountability indicators needed to measure the success and performance of agency restructuring.

(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)  Compile all procedures and rules that govern any part of the agency and publish them on the agency website by July 1, 2006, along with a user-friendly index and table of contents.

(2)  A statewide advisory group, the Agency Reorganization Committee (ARC), is created to advise the secretary on the design of the restructured agency.  It shall consist of no more than 12 members, who shall be appointed by the legislative oversight committee, in consultation with the secretary of natural resources, as follows: two representing regulated business and development interests; two representing environmental organizations; one representing fish and wildlife interests; one representing the interests of forests and parks; one representing recreational interests; one representing local government; one representing regional government; one representing the Vermont State Employees Association; and two representing citizens’ groups.  Appointments shall be made no later than June 1, 2005, and shall be for terms of one year.  The secretary shall convene the first meeting of ARC no later than July 1, 2005, and establish regular meetings thereafter.  The ARC shall 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.  The secretary and the consultant, in consultation with ARC, shall 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.  Members of the ARC not receiving compensation for service on the advisory group from another source are entitled to compensation under section 1010 of Title 32.

(3)  The secretary shall examine functions, such as administrative support and supervision, and space requirements necessary to establish an agency that is responsive and helpful to permit applicants, neighbors, and others interested in and affected by the permitting process.

(4)  On or before December 1, 2005, the secretary shall prepare and present a draft report to the ARC on natural resources restructuring for review and comment. ARC members shall provide comment based on review no later than December 15, 2005.

(5)  On or before January 15, 2006, the secretary shall prepare and present to the legislative oversight committee on natural resources restructuring established in Sec. 2 of this act:

(A)  a report containing initial recommendations for restructuring the agency, including:

(i)  a plan for making the agency’s permit process, enforcement actions, and other functions more accessible in order to increase efficiency, transparency, and accountability.  This shall include a detailed articulation of the resources and time frame needed for implementation of the plan;

(ii)  agency action to meet statutory obligations under 10 V.S.A. § 1253(d) regarding basin planning including plan updates every five years;

(iii)  standardization and integration of the agency’s permit programs to make them more user‑friendly to applicants and to others concerned with natural resource management and the environment, while at the same time protecting the state’s natural resources to the full extent of the law;

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

(v)  documentation procedures to ensure that agency decisions are made in compliance with applicable law and that they adhere to sound, generally accepted scientific principles and methods; and

(vi)  provision of policy guidance from the agency’s planning efforts to coordinate between the agency’s many 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)  draft legislation necessary to eliminate contradictions in existing statutes and to authorize the reorganization proposed by the agency;

(C)  a report on the budgetary impacts and transitional costs of restructuring; and

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

Sec. 3.  THE LEGISLATIVE OVERSIGHT COMMITTEE ON NATURAL RESOURCES RESTRUCTURING

(a)  There is created the legislative oversight committee on natural resources restructuring to oversee the restructuring of the agency of natural resources.  The committee shall be composed of four members from the house of representatives to be appointed by the speaker of the house, not all from the same party, and four members from the senate to be appointed by the committee on committees, not all from the same party.  Initial appointments shall be made by July 1, 2005. 

(b)  The committee shall review whether agency restructuring achieves the goals of this act effectively and efficiently.  Specifically, the committee shall:

(1)  solicit input from the ARC and from individuals served by the agency, whether as permit applicants, neighbors, or persons who use and enjoy the state’s natural resources;

(2)  monitor the restructuring process and timeline; and

(3)  measure the efforts of the agency against the goals and principles described in this act.

(c)  The committee may meet up to six times per year while the general assembly is not in session to perform its functions under this section.

(d)  The secretary of the agency of natural resources shall report to the committee as required by the committee.

(e)  Members of the committee shall be entitled to compensation and reimbursement for expenses under section 406 of Title 2.

(f)  The committee may prepare and propose draft legislation which amends the Vermont Statutes Annotated to conform to the restructuring of the agency.

Sec. 4.  RESTRUCTURING; AUTHORIZATION

After filing the report required in subdivision (5) of Sec. 2 of this act, the secretary of natural resources shall have the authority to restructure the agency of natural resources, including the authority to make organizational changes according to the goals, principles, and processes set forth in this act.  For the purposes of this act:

(1)  The secretary may transfer appropriations within the agency in order to carry out the purposes of this act, provided that the total amount appropriated to the agency shall remain the same.  The secretary shall not transfer an appropriation without the approval of the joint fiscal committee.  Prior to transferring an appropriation, the secretary shall submit a written proposal for the transfer to the legislative oversight committee on natural resources restructuring and to the joint fiscal committee.  The legislative oversight committee shall have up to 45 days to review the proposal and provide its recommendation on the proposal to the joint fiscal committee.  The joint fiscal committee shall meet within 30 days of the date of its receipt of the recommendations from the legislative oversight committee to review and act upon the proposal.  However, the joint fiscal committee shall not act upon the proposal until it receives a recommendation from the legislative oversight committee or after the passage of 45 days from the date of its receipt of the proposal.  The transfer shall be deemed approved by the joint fiscal committee and the secretary may implement the transfer if:

(A)  the joint fiscal committee fails to act within its 30-day period for review, in case a timely recommendation is received from the legislative oversight committee; or

(B)  if the joint fiscal committee fails to act within 75 days of receipt of the proposal, in the absence of a timely recommendation from the legislative oversight committee.

(2)  The secretary may transfer or reallocate personnel, functions, and programs consistent with this act, subject to personnel laws, rules and contracts.  The secretary shall identify personnel laws and rules, and contracted services which affect the agency’s ability to meet the goals and principles set forth in this act.

(3)  The secretary may use pilot programs or action research initiatives to facilitate the development of agency protocols.

Sec. 5.  STRATEGIC PLAN

On or before May 1, 2006, the secretary shall prepare a strategic plan to implement state environmental policy, which shall be updated biennially and presented to the general assembly and to members of the house and senate committees on natural resources and energy.  The strategic plan shall set and clarify goals; describe the process for engagement of agency staff, permit applicants, advocacy groups, advisory groups, and other affected agencies; provide an ongoing assessment of the effectiveness of the plan in implementing state environmental policy; and establish and describe milestones for development of the plan.

Sec. 6.  APPLICATION

Nothing in this act, nor any action taken pursuant to this act, shall affect the validity of agency of natural resources rules in effect, assets owned, or contracts or other agreements entered into by the agency.  Rules in effect on the effective date of this act shall remain in effect until amended or repealed by the secretary.

Sec. 7.  SUNSET

Sec. 2, subdivision (2) (ARC), Sec. 3 (legislative oversight committee on natural resources restructuring), and Sec. 4 (restructuring authorization) of this act are repealed on July 1, 2008.

Sec. 8.  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.

Sec. 9.  EFFECTIVE DATE

This act shall take effect upon passage.

(Committee vote: 5-0-0)

Reported favorably by Senator Bartlett for the Committee on Appropriations.

(Committee vote: 5-0-2)

Committee Bill for Second Reading

S. 157

An act relating to rulemaking for Vermont origin.

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

NOTICE CALENDAR

Favorable with Recommendation of Amendment

S. 63

An act relating to the transfer of certain functions from the Department of Labor and Industry to the Department of Public Safety.

Reported favorably with recommendation of amendment by Senator Shepard for the Committee on Government Operations.

The Committee recommends that the bill be as follows:

First:  By adding a new section, to be numbered Sec. 6a, to read as follows:

Sec. 6a.  21 V.S.A. § 143 is amended to read:

§ 143.  LICENSE REQUIRED

No person shall erect, construct, wire, alter, replace, or maintain any conveyance located in any public building in this state unless the person is licensed as an elevator mechanic, except that person who is licensed as a lift mechanic may erect, construct, wire, alter, replace, or maintain any conveyance located in any public building.  An apprentice or helper may perform any of the activities described in this section only when a mechanic licensed under this chapter is physically present and is immediately available to direct and supervise that apprentice or helper.

Second:  By adding a Sec. 6b to read as follows:

Sec. 6b.  24 V.S.A. § 2792(a)(5) is amended to read:

§ 2792.  VERMONT DOWNTOWN DEVELOPMENT BOARD

(a)  A “Vermont downtown development board,” also referred to as the “state board,” is created to administer the provisions of this chapter.  The state board members shall be the following permanent members, or their designees:

* * *

(5)  The commissioner of labor and industry public safety;

* * *

(Committee vote: 6-0-0)

S. 113

An act authorizing nonprofit hospitals to convert charitable assets.

Reported favorably with recommendation of amendment by Senator Cummings for the Committee on Finance.

The Committee recommends that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  18 V.S.A. § 9420 is added to read:

§ 9420.  CONVERSION OF NONPROFIT HOSPITALS

(a)  Policy and purpose.  The state has a responsibility to assure that the assets of nonprofit entities, which are impressed with a charitable trust, are managed prudently and are preserved for their proper charitable purposes.

(b)  Definitions.  As used in this section:

(1)  “Charitable assets” means the fair market value of a nonprofit hospital.  When a conversion affects only some of the assets of a nonprofit hospital, “charitable assets” means those assets of the hospital that will be so affected.

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

(3)  “Conversion” means a transaction or series of transactions described in subdivision (4) of this subsection.

(4)  “Convert” means to sell, transfer, lease, exchange, option, commit, convey, or otherwise dispose of assets or operations of a nonprofit hospital.  The term does not include transactions occurring in the normal and ordinary course of business for the nonprofit hospital, such as management contracts, vendor contracts, physician-hospital contracts, managed care contracts, financing agreements or ventures such as letters of credit, or cooperative or networking agreements with for-profit providers.

(5)  “Fair market value” means the price that the assets being converted would bring in a competitive and open market under a fair sale with the buyer and seller acting prudently, knowledgeably, at arm’s length, and in their own best interest.

(6)  “Hospital system” means a network of hospitals affiliated with a nonprofit hospital.

(7)  “Nonprofit hospital” means a nonprofit entity, where no part of the net earnings may lawfully be applied to the benefit of any private shareholder or individual, and which is a hospital as defined in section 1902 of this title, or a hospital member of a hospital system; provided, that the term “hospital” does not include any hospital conducted, maintained, or operated by the United States government or the state of Vermont or the duly authorized agency of either.

(8)  “Parties” means the nonprofit hospital and any other person who is a party to a conversion described in the application filed pursuant to subsection (e) of this section, including, without limitation, any person that, pursuant to the plan of conversion, is to receive charitable assets or proceeds as a result of the conversion.  When, in this section, reference is made to liabilities or obligations of the parties, such liabilities and obligations shall be joint and several.

(9)  “Qualifying amount” means an amount that is at least $1 million and represents at least 40 percent of the value of the assets of the nonprofit hospital, or that vests control of the nonprofit hospital in another person or entity.  For purposes of determining whether the threshold requirements of this subdivision have been or will be met, related conversions shall be aggregated.

(c)  Approval required for conversion of qualifying amount of charitable assets.  A nonprofit hospital may convert a qualifying amount of charitable assets only with the approval of the commissioner, and either the attorney general or the superior court, pursuant to the procedures and standards set forth in this section.

(d)  Exception for conversions in which assets will be owned and controlled by a nonprofit corporation:

(1)  Other than subsection (q) of this section and subdivision (2) of this subsection, this section shall not apply to conversions in which the party receiving assets of a nonprofit hospital is a nonprofit corporation.

(2)  In any conversion that would have required an application under subsection (e) of this section but for the exception set forth in subdivision (1) of this subsection, notice to or written waiver by the attorney general shall be given or obtained as if required under subsection 12.02(g) of Title 11B.

(e)  Application.  Prior to consummating any conversion of a qualifying amount of charitable assets, the parties shall submit an application to the attorney general and the commissioner, together with any attachments complying with subsection (f) of this section.  If any material change occurs in the proposal set forth in the filed application, an amendment setting forth such change, together with copies of all documents and other material relevant to such change, shall be filed with the attorney general and the commissioner within two business days, or as soon thereafter as practicable, after any party to the conversion learns of such change.  If the conversion involves a hospital system, and one or more of the hospitals in the system desire to convert charitable assets, the attorney general, in consultation with the commissioner, shall determine whether an application shall be required from the hospital system.

(f)  Completion and contents of application.

(1)  Within 30 days of receipt of the application, or within 10 days of receipt of any amendment thereto, whichever is longer, the attorney general, with the commissioner’s agreement, shall determine whether the application is complete.  The attorney general shall promptly notify the parties of the date the application is deemed complete, or of the reasons for a determination that the application is incomplete.  A complete application shall include the following:

(A)  a detailed summary of the purposes and material terms of the proposed conversion;

(B)  the names and addresses of the parties that have been or will be created as part of the conversion, including a list of all individuals who are or have been chosen as their directors, officers, or board members;

(C)  copies of all organizational documents relating to the parties;

(D)  copies of all contracts and other agreements related to the conversion;

(E)  copies of the most recent audited financial reports of the entities involved;

(F)  a detailed description of all assets of the nonprofit hospital, including the value of the assets and the basis for that valuation.  For assets included in or otherwise affected by the conversion, the following information is also to be included:

(i)  the nature of any restrictions on such assets owned or held by the nonprofit hospital and the purpose or purposes for which such assets were received;

(ii)  a statement as to whether the assets will be converted to cash in connection with or as a result of the conversion; and

(iii)  a detailed description of all proposed changes in control or ownership of the assets and an explanation regarding whether and if, so, how the charitable assets of the nonprofit hospital will continue to be used in a manner consistent with their intended charitable purpose;

(G)  a description of the process by which the decision to undertake the conversion and to select the acquiring party and the type and amount of consideration to be given or received in the conversion, if applicable, was reached by the nonprofit hospital, and all documents relating to that process and decision, including, but not limited to, minutes, committee or special study reports, correspondence, presentations, audits, and other internal or outside reviews or analyses;

(H)  the amount, source, and nature of any consideration to be paid to the nonprofit hospital, its directors, officers, board members, executives, or experts retained by the nonprofit hospital, including prospective employment or consultation;

(I)  a detailed description of the structure and functions of any charitable foundation that will receive proceeds of the conversion, including a description of its assets, its mission, the purposes of the foundation, the expected charitable uses of the assets, how it will be broadly based in, and represent, the community affected by the conversion, and how proceeds from the conversion will be controlled;

(J)  a certified board resolution or other appropriate document evidencing approval of the conversion by each party involved;

(K)  a certification signed by those members, identified by name and title, of the governing body or other person approving the conversion on behalf of the nonprofit hospital that the standards set forth in subsection (j) of this section have been considered in good faith and are met, together with such explanations and other documentation as may be necessary to demonstrate such compliance;

(L)  a separate certification from each member of the governing board, the chief executive officer, and other officers designated in the governing documents of the nonprofit hospital, executed under oath, stating whether that director or officer is then, or may become within three years of completion of the conversion a member or shareholder in, or officer, employee, agent, or consultant of, or may otherwise derive any compensation or benefits, directly or indirectly, from any party.

(M)  a statement from any party specifying the manner in which it proposes to continue to fulfill the charitable obligations of the nonprofit hospital, if applicable; and

(N)  any additional information the attorney general or commissioner finds necessary or appropriate for the full consideration of the application.

(2)  The parties shall make the contents of the application reasonably available to the public prior to any hearing for public comment described in subsection (g) of this section to the extent that they are not otherwise exempt from disclosure under subsection 317(b) of Title 1.

(g)  Notice and hearing for public comment on application. 

(1)  The attorney general and commissioner shall hold one or more public hearings on the transaction or transactions described in the application.  A record shall be made of any hearing.  The hearing shall commence within 30 days of the determination by the attorney general that the application is complete.  If a hearing is continued or multiple hearings are held, any hearing shall be completed within 60 days of the attorney general’s determination that an application is complete.  In determining the number, location, and time of hearings, the attorney general, in consultation with the commissioner, shall consider the geographic areas and populations served by the nonprofit hospital and most affected by the conversion and the interest of the public in commenting on the application.

(2)  The attorney general shall provide reasonable notice of any hearing to the parties, the commissioner, and the public, and may order that the parties bear the cost of notice to the public.  Notice to the public shall be provided in newspapers having general circulation in the region affected and shall identify the applicants and the proposed conversion.  A copy of the public notice shall be sent to the state health care and long‑term care ombudspersons and to the senators and members of the house of representatives representing the county and district and to the clerk, chief municipal officer, and legislative body, of the municipality in which the nonprofit hospital is principally located.  Upon receipt, the clerk shall post notice in or near the clerk's office and in at least two other public places in the municipality.  Any person may testify at a hearing under this section and, within such reasonable time as the attorney general may prescribe, file written comments with the attorney general and commissioner concerning the proposed conversion.

(h)  Determination by commissioner.

(1)  The commissioner shall consider the application, together with any report and recommendations from staff of the department requested by the commissioner, and any other information submitted into the record, and approve or deny it within 50 days following the last public hearing held pursuant to subsection (g) of this section, unless the commissioner extends such time up to an additional 60 days with notice prior to its expiration to the attorney general and the parties.

(2)  The commissioner shall approve the proposed transaction if the commissioner finds that the application and transaction will satisfy the criteria established in section 9437 of this title.  For purposes of applying the criteria established in section 9437, the term “project” shall include a conversion or other transaction subject to the provisions of this subchapter.

(3)  A denial by the commissioner or failure to timely approve the application shall be considered a final order that may be appealed to the supreme court pursuant to the procedures and standards set forth in section 16 of Title 8.  If no appeal is taken or if the commissioner’s order is affirmed by the supreme court, the application shall be terminated.

(i)  Determination by attorney general.  The attorney general shall make a determination as to whether the conversion described in the application meets the standards provided in subsection (j) of this section.

(1)  If the attorney general determines that the conversion described in the application meets the standards set forth in subsection (j) of this section, the attorney general shall approve the conversion and so notify the parties in writing.

(2)  If the attorney general determines that the conversion described in the application does not meet such standards, the attorney general may not approve the conversion and shall so notify the parties of such disapproval and the basis for it in writing, including identification of the standards listed in subsection (j) of this section that the attorney general finds not to have been met by the proposed conversion.  Nothing in this subsection shall prevent the parties from amending the application to meet any objections of the attorney general.

(3)  The notice of approval or disapproval by the attorney general under this subsection shall be provided no later than either 60 days following the date of the last hearing held under subsection (g) of this section or ten days following approval of the conversion by the commissioner, whichever is later.  The attorney general, for good cause, may extend this period an additional 60 days.

(j)  Standards for attorney general’s review.  In determining whether to approve a conversion under subsection (h) of this section, the attorney general shall consider whether:

(1)  the governing body of the nonprofit hospital exercised due diligence in deciding to engage in the conversion, selecting the acquiring party, and ensuring that the terms and conditions of the conversion are fair and reasonable to the nonprofit hospital;

(2)  the nonprofit hospital will receive fair market value for its charitable assets, and whether the market value of those assets has not been manipulated by the actions of the parties in a manner that causes the value of the assets to decrease;

(3)  the conversion will not result in a breach of fiduciary duty, including any undisclosed or material conflicts of interest related to payments or benefits to officers, directors, board members, executives, or experts employed or retained by the parties;

(4)  the conversion will not result in private inurement to any person;

(5)  the proceeds of the conversion will be used in a manner and place consistent with the public benefit purposes of the nonprofit hospital;

(6)  any foundation established to hold the proceeds of the conversion will be representative of and broadly based in the community served by the nonprofit hospital and will be subject to appropriate public accountability standards;

(7)  the application contains sufficient information and data to permit the attorney general and commissioner to evaluate the conversion and its effects on the public’s interests in accordance with this section; and

(8)  the conversion plan has made reasonable provision for reports, upon request, to the attorney general on the conduct and affairs of any person that, as a result of the conversion, is to receive charitable assets or proceeds from the conversion to carry on any part of the public purposes of the nonprofit hospital.

(k)  Investigation by attorney general.  The attorney general may conduct an investigation relating to the conversion pursuant to the procedures set forth generally in section 2460 of Title 9.  The attorney general may contract with such experts or consultants the attorney general deems appropriate to assist in an investigation of a conversion under this section.  The attorney general may order any party to reimburse the attorney general for all reasonable and actual costs incurred by the attorney general in retaining outside professionals to assist with the investigation or review of the conversion.

(l)  Superior court action.  If the attorney general does not approve the conversion described in the application and any amendments, the parties may commence an action in the superior court of Washington County, or with the agreement of the attorney general, of any other county, within 60 days of the attorney general’s notice of disapproval provided to the parties under subdivision (h)(2) of this section.  The parties shall notify the commissioner of the commencement of an action under this subsection.  The commissioner shall be permitted to request that the court consider the commissioner’s determination under subsection (h) of this section in its decision under this subsection.

(m)  Court determination and order.

(1)  Within 45 days of the commencement of an action under subsection (l) of this section, the court shall hold a hearing to determine whether the conversion described in the application and any amendments submitted prior to the attorney general’s notice of disapproval satisfy the standards under subsection (j) of this section that the attorney general identified in the notice of disapproval as not having been met by the transaction described in the application.  The court shall determine the matter within 45 days of the conclusion of the hearing.  The court, for good cause, may extend each of the time periods provided in this subsection for its hearing and determination for an additional 30 days, or for a longer period if agreed to by the parties and the attorney general.  The attorney general shall represent the interests of the public at any hearing under this subsection.  The parties shall have the burden to establish that the application, with any amendments that were submitted prior to the attorney general’s notice of disapproval, meets each of the standards of subsection (j) of this section identified in the attorney general’s notice of disapproval as not having been met by the application.

(2)  If the court finds that the parties have shown that the conversion described in the application meets the standards of subsection (j) of this section identified in the attorney general’s notice of disapproval as not having been met by the application, the court shall set aside the determination of the attorney general, and the parties may proceed under this section as if the attorney general had approved the conversion described in the application.

(3)  If the attorney general substantially prevails in the action, the court may order the parties to reimburse the state for the reasonable value of the attorney general’s services and expenses in defending the action, separate and apart from any amounts the parties are required to pay pursuant to subsection (k) of this section.

(4)  Nothing herein shall prevent the attorney general, while an action brought under subsection (l) of this section is pending, from approving the conversion described in the application, as modified by such terms as are agreed between the parties, the attorney general, and the commissioner to bring the conversion into compliance with the standards set forth in subsection (j) of this section.

(n)  Use of converted assets or proceeds of a conversion approved pursuant to this section.  If at any time following a conversion, the attorney general has reason to believe that converted assets or the proceeds of a conversion are not being held or used in a manner consistent with information provided to the attorney general, the commissioner, or a court in connection with any application or proceedings under this section, the attorney general may investigate the matter pursuant to procedures set forth generally in section 2460 of Title 9 and may bring an action in Washington superior court or in the superior court of any county where one of the parties has a principal place of business.  The court may order appropriate relief in such circumstances, including avoidance of the conversion or transfer of the converted assets or proceeds or the amount of any private inurement to a person or party for use consistent with the purposes for which the assets were held prior to the conversion, and the award of costs of investigation and prosecution under this subsection, including the reasonable value of legal services.

(o)  Remedies and penalties for violations.

(1)  The attorney general may bring or maintain a civil action in the Washington superior court, or any other county in which one of the parties has its principal place of business, to enjoin, restrain, or prevent the consummation of any conversion which has not been approved in accordance with this section or where approval of the conversion was obtained on the basis of materially inaccurate information furnished by any party to the attorney general or the commissioner.

(2)  A conversion entered into in violation of any provision of this section may be voided, upon petition of the attorney general, by the superior court of Washington County or the county in which any party has its principal place of business.

(3)  If a person violates a provision of this section or any lawful order of a court acting pursuant to this section, the court, upon petition of the attorney general, may order that person to pay to the state the value of services and expenses incurred by the attorney general in the investigation and prosecution of the violation, and may:

(A)  order that person to cease such activity or other appropriate injunctive relief;

(B)  order the disgorgement of any private inurement; and

(C)  impose a penalty on that person of up to $1 million.

(4)  In determining whether to grant relief under this subsection, and the nature of such relief, the court shall consider whether:

(A)  the violation was willful;

(B)  any person has derived, or may derive, an economic benefit from the conversion;

(C)  the purposes for which the assets had been held by the nonprofit hospital have been frustrated by the violation; and

(D)  the interests of the public or the community served by the nonprofit hospital would be jeopardized by voiding the contract.

(p)  Conversion of less than a qualifying amount of assets.

(1)  The attorney general may conduct an investigation relating to a conversion pursuant to the procedures set forth generally in section 2460 of Title 9 if the attorney general has reason to believe that a nonprofit hospital has converted or is about to convert less than a qualifying amount of its assets in such a manner that would:

(A)  if it met the qualifying amount threshold, require an application under subsection (e) of this section; and

(B)  constitute a conversion that does not meet one or more of the standards set forth in subsection (j) of this section.

(2)  The attorney general, in consultation with the commissioner, may bring an action with respect to any conversion of less than a qualifying amount of assets, according to the procedures set forth in subsection (n) of this section.  The attorney general shall notify the commissioner of any action commenced under this subsection.  The commissioner shall be permitted to investigate and determine whether the transaction satisfies the criteria established in subdivision (g)(2) of this section, and to request that the court consider the commissioner’s recommendation in its decision under this subsection.  In such an action, the superior court may enjoin or void any transaction and may award any other relief as provided under subsection (n) of this section.

(3)  In any action brought by the attorney general under this subdivision, the attorney general shall have the burden to establish that the conversion:

(A)  violates one or more of the standards listed in subdivisions (i)(1), (3), (4), or (6); or

(B)  substantially violates one or more of the standards set forth in subdivisions (i)(2) and (5) of this section.

(q)  Other preexisting authority.

(1)  Nothing in this section shall be construed to limit the authority of the commissioner, attorney general, department of health, or a court of competent jurisdiction under existing law, or the interpretation or administration of a charitable gift under section 2328 of Title 14.

(2)  This section shall not be construed to limit the regulatory and enforcement authority of the commissioner, or exempt any applicant or other person from requirements for licensure or other approvals required by law.

Sec. 2.  EFFECTIVE DATE

This act shall take effect upon passage.

(Committee vote: 4-2-1)

CONFIRMATIONS

     The following appointments will be considered by the Senate, as a group, under suspension of the Rules, as moved by the President pro tempore, for confirmation together and without debate, by consent thereby given by the Senate.  However, upon request of any senator, any appointment may be singled out and acted upon separately by the Senate, with consideration given to the report of the Committee to which the appointment was referred, and with full debate; and further, all appointments for the positions of Secretaries of Agencies, Commissioners of Departments, Judges, Magistrates, and members of the Public Service Board shall be fully and separately acted upon.

Kathryn Boardman of Shelburne – Member of the Vermont Municipal Bond Bank – By Senator Ayer for the Committee on Finance.  (3/16)

Ruth Stokes of Williston – Member of the State Board of Education – By Senator Starr for the Committee on Education.  (3/17)

Nancy Price Graff of Montpelier – Member of the Board of Libraries – By Senator Doyle for the Committee on Education.  (3/17)

John Ewing of Burlington – Member of the Vermont Housing and Conservation Board – By Senator Illuzzi for Committee on Economic Development, Housing and General Affairs.  (3/23)

Roy Folsom of Cabot – Member of the Vermont Housing and Conservation Board – By Senator Illuzzi for the Committee on Economic Development, Housing and General Affairs.  (3/23)

Leo O. Larocque of Whiting – Member of the Electricians Licensing Board – By Sen. Illuzzi for the Committee on Economic Development, Housing and General Affairs.  (3/23)

Timothy Watkins of East Middlebury – Member of the Electricians Licensing Board – By Sen. Illuzzi for the Committee on Economic Development, Housing and General Affairs.  (3/23)

Robert Williams of Poultney – Member of the Electricians Licensing Board – By Sen. Illuzzi for the Committee on Economic Development, Housing and General Affairs.  (3/23)

John LaBarge of South Hero – Member of the Travel Information Council – By Sen. Starr for the Committee on Transportation.  (3/29)

Kerry Sleeper of Richmond – Commissioner of the Department of Public Safety – By Sen. Collins for the Committee on Transportation.  (3/30)

Bonnie Rutledge of Waterbury – Commissioner of the Department of Motor Vehicles – By Sen. Scott for the Committee on Transportation.  (3/30)

John Crowley of Rutland – Commissioner of the Department of Banking, Insurance, Securities and Health Care Administration – By Sen. Cummings for the Committee on Finance.  (3/30)

Thomas Pelham of Montpelier – Commissioner of the Department of Taxes – By Sen. Cummings for the Committee on Finance.  (3/30)

David Brown of Williston – Member of the Vermont Economic Development Authority – By Sen. Maynard for the Committee on Finance.  (3/30)

PUBLIC HEARINGS

Thursday, April 7, 2005 House Chamber – 7:00 P.M. – Dry cask storage at Vermont Yankee – Senate and House Committees on Natural Resources and Energy.

Thursday, April 14, 2005 – Brattleboro Union High School Gym, Fairground Road, Brattleboro – 6:00 P.M. – Dry cask storage at Vermont Yankee – Senate and House Committees on Natural Resources and Energy.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us