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Senate Calendar

tuesday, april 3, 2007

91st DAY OF BIENNIAL SESSION

TABLE OF CONTENTS

                                                                                                                Page No.

ACTION CALENDAR

CALLED UP

S. 196              Failure to insure for workers’ compensation coverage............... 427

                              Pending Action:  Third Reading of the bill

                              Sen. Illuzzi amendment ...................................................... 427

UNFINISHED BUSINESS OF THURSDAY, MARCH 29, 2007

Third Reading

S. 190     Establishing a brownfields advisory committee................................... 430

NEW BUSINESS

Second Reading

Favorable

H. 51      Amendments to the charter of the village of Newbury........................ 430

                              Government Operations Committee Report........................ 430

H. 97      Ability of unified towns & gores of Essex county to incur debt............ 431

                              Government Operations Committee Report........................ 431

Favorable with Recommendation of Amendment

Second Reading

S. 115     Transparency of prescription drug pricing and information.................. 431

                              Health and Welfare Committee Report............................... 431

                              Finance Committee Report................................................ 439

                              Sen. Condos amendment................................................... 443

S. 121     Relating to autism.............................................................................. 443

                              Education Committee Report............................................. 444

                              Appropriations Committee Report..................................... 446

NOTICE CALENDAR

Favorable

H. 81      Amendments to the charter of the city of Burlington........................... 448

                              Government Operations Committee Report........................ 449

H. 169    Amendments to the charter of the town of Williston........................... 449

                              Government Operations Committee Report........................ 449

Favorable with Recommendation of Amendment

S. 94       Energy conservation & decreasing generation of greenhouse gas........ 449

                              Natural Resources and Energy Committee Report.............. 449

                              Finance Committee Report................................................ 466

S. 102     Decreasing percentage to determine school dist. excess spending....... 470

                              Education Committee Report............................................. 470

                              Finance Committee Report................................................ 475

S. 118     Fiscal review of high spending districts & special education................ 475

                              Education Committee Report............................................. 475

                              Finance Committee Report................................................ 479

                              Sen. McCormack amendment............................................ 479

S. 177     Child poverty in Vermont.................................................................. 479

                              Health and Welfare Committee Report............................... 479

                              Appropriations Committee Report..................................... 480

S. 191     Financing, reappraisal & infrastructure-tax increment fin. dist.............. 480

                              Ec. Dev., Housing and General Affairs Committee.............. 480

                              Finance Committee Report................................................ 480

Favorable with Proposal of Amendment

H. 360    Employment protection & training for VT national guard.................... 486

                              Government Operations Committee Report........................ 486

ORDERED TO LIE

S. 70       Empowering municipalities to regulate application of pesticides........... 487

S. 194     Firefighters and cancer caused by employment.................................. 487




 

ORDERS OF THE DAY

ACTION CALENDAR

CALLED UP

S. 196

An act relating to failure to insure for workers’ compensation coverage by employers and contractors.

PENDING ACTION:  Third reading of the bill.

AMENDMENT TO S. 196 TO BE OFFERED BY SENATOR ILLUZZI, ON BEHALF OF THE COMMITTEE ON ECONOMIC DEVELOPMENT, HOUSING AND GENERAL AFFAIRS, BEFORE THIRD READING

Senator Illuzzi, on behalf of the Committee on Economic Development, Housing and General Affairs, moves to amend the bill, before third reading, by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  21 V.S.A. § 690 is amended to read:

§ 690.  CERTIFICATE, FORM; COPY OF POLICY

(a)  An employer subject to the provisions of this chapter who has taken out insurance under sections workers’ compensation insurance coverage pursuant to section 687 or 689 of this title or as provided in subdivisions (a)(1) or (a)(2) of section 687 of this title shall file or cause to be filed with the commissioner, in form prescribed by him, a certificate of the insurance carried by such employer in a form prescribed by the commissionerSuch The certificate shall set forth include the policy number, effective date, date of expiration, operations covered and such other information as the commissioner may require and requests.  The certificate shall be signed by a duly authorized representative of the insurance or guarantee company which has that issued such the insurance coverageSuch Upon request, the insurance or guarantee company shall file with the commissioner, if required by him, a copy of the contract or policy of insurance so issued.

(b)(1)  Upon written request, the commissioner may request from a building or construction industry contractor engaged in the business of nonresidential building or construction a workers’ compensation compliance statement on a form provided by the commissioner.  For the purposes of this subsection, a contractor includes subcontractors and independent contractors.  The form shall require all the following information:

(A)  The number of employees employed during the entire workers’ compensation policy term or the previous year if no policy was in effect or partially in effect prior to the request.

(B)  The total number of hours for which compensation was paid.

(C)  Designation of the hours that were the basis of the appropriate National Council on Compensation Insurance (NCCI) classification code.

(D)  The name of the workers’ compensation insurance carrier, the policy number, and the agent, if any.

(2)  Any contractor who fails to comply with this subsection or falsifies information on the compliance statement may be assessed an administrative penalty of not more than $5,000.00 for each week during which the  noncompliance or falsification occurred and any costs and attorney fees required to enforce this subsection.  The commissioner may also seek injunctive relief in Washington superior court.

(3)  A compliance statement shall be a public record, and the commissioner shall provide a copy of a compliance statement to any person on request.  An insurance company provided with a compliance statement may investigate the information in the statement.  Based on evidence that a contractor is not in compliance with this chapter, the commissioner shall request a compliance statement or an amended compliance statement from the contractor, investigate further, and take appropriate enforcement action.  No contractor shall be required to provide more than one workers’ compensation compliance statement per year, unless requested by the commissioner.

Sec. 2.  21 V.S.A, § 692(a) and (b) are amended to read:

(a)  If after hearing under section 688 of this title, the commissioner determines that an employer has failed to comply with the provisions of section 687 of this title, the employer shall be assessed an administrative penalty of not more than $50.00 $100.00 for every day the employer neglected to secure liability, but in no case shall the fine be more than $5,000.00.

(b)  Additionally, an employer who fails to comply with the provisions of section 687 of this title for a period of five days after notice from the commissioner shall be assessed an administrative penalty of not more than $150.00 $250.00 for every day after five days that the employer fails to secure workers’ compensation coverage as required in section 687 of this title.  The commissioner may, after giving notice and after the expiration of the five-day period, post a notice at a conspicuous place on the premises of the employer informing the employees that their employer has failed to comply with the provisions of section 687 of this title and ordering the premises closed until workers’ compensation insurance is secured.

Sec. 3.  21 V.S.A. § 696 is amended to read:

§ 696.  CANCELLATION OF INSURANCE CONTRACTS

Such a A policy or contract shall not be cancelled within the time limited in such the policy or contract for its expiration, until at least 45 days after a notice of intention to cancel such the policy or contract, on a date specified in such the notice, has been filed in the office of the commissioner and provided to the employer.  Such The notice shall be filed and provided by certified mail or certificate of mailing.  Such The cancellation shall not affect the liability of an insurance carrier on account of an injury occurring prior to such cancellation.

Sec. 4.  21 V.S.A. § 697 is amended to read:

§ 697.  NOTICE OF INTENT NOT TO RENEW POLICY

An insurance carrier who does not intend to renew a policy of workers’ compensation insurance or guarantee contract covering the liability of an employer under the provisions of this chapter, 45 days prior to the expiration of such the policy or contract, shall give notice of such the intention to the commissioner of labor and to the covered employer.  Such The notice shall be given by certified mail or certificate of mailing.  An insurance carrier who fails to give such notice shall continue the policy or contract in force beyond its expiration date for 45 days from the day such the notice is received by the commissioner.  However, this latter provision shall not apply if, prior to such expiration date, the insurance carrier has offered to continue the insurance beyond such the date by delivery of a renewal contract or otherwise or if the employer notifies the insurance carrier that he the employer does not wish the insurance continued beyond such the expiration date, or if the employer complies with the provisions of section 687 of this title, on or before the expiration of the existing insurance or guarantee contract.

Sec. 5.  21 V.S.A. § 708 is amended to read:

§ 708.  PENALTY FOR FALSE REPRESENTATIONS

(a)  Action by the commissioner of labor.  A person who willfully makes a false statement or representation, for the purpose of obtaining any benefit or payment under the provisions of this chapter, either for her or himself or for any other person, after notice and opportunity for hearing may be assessed an administrative penalty of not more than $1,000.00 $5,000.00 total, and shall forfeit all or a portion of any right to compensation under the provisions of this chapter, as determined to be appropriate by the commissioner after a determination by the commissioner that the person has willfully made a false statement or representation of a material fact.

(b)  Action by the commissioner of banking, insurance, securities, and health care administration.  An employer who willfully makes a false statement or representation for the purpose of obtaining a lower workers’ compensation premium, after notice and opportunity for hearing before the commissioner of banking, insurance, securities, and health care administration may be assessed an administrative penalty of not more than $5,000.00 in addition to any other appropriate penalty.  In addition to any other remedy provided by law, the commissioner of banking, insurance, securities, and health care administration may pursue the collection of the administrative penalty imposed by this section in Washington superior court.

Sec. 6.  PROOF OF INSURANCE; STUDY; COMMISSIONER OF LABOR

The commissioner of labor shall study the feasibility and cost associated with making the National Council on Compensation Insurance proof of coverage services available to the public as a workers’ compensation coverage verification through the department of labor’s website.  The commissioner shall present findings and recommendations to the senate committee on economic development, housing and general affairs and to the house committees on commerce and on general, housing and military affairs on or before January 15, 2008.

UNFINISHED BUSINESS OF THURSDAY, MARCH 29, 2007

Third Reading

S. 190

An act relating to establishing a brownfields advisory committee.

NEW BUSINESS

Second Reading

Favorable

H. 51

An act relating to approval of amendments to the charter of the village of Newbury.

Reported favorably by Senator Coppenrath for the Committee on Government Operations.

(Committee vote: 5-0-0)

(No House amendments)

H. 97

An act relating to the ability of the unified towns and gores of Essex county to incur indebtedness.

Reported favorably by Senator Coppenrath for the Committee on Government Operations.

(Committee vote: 5-0-0)

(No House amendments)

Second Reading

Favorable with Recommendation of Amendment

S. 115

An act relating to increasing transparency of prescription drug pricing and information.

Reported favorably with recommendation of amendment by Senator Racine for the Committee on Health and Welfare.

The Committee recommends that the bill be amended as follows:

First:  In Sec. 1, by striking out 33 V.S.A. § 1998(a)(7) and inserting in lieu thereof a new subdivision (7) to read:

(7)  A plan to inform Vermonters of the availability of health services provided by federally qualified health centers (FQHC) and FQHC look-alikes, including that prescription drug pricing is more affordable, focusing on participants in the Medicaid and Medicaid waiver programs, state employees, individuals under the supervision of corrections, individuals receiving workers’ compensation benefits if applicable, and any other state or publicly funded purchaser of prescription drugs.

Second:  In Sec. 1, by striking out 33 V.S.A. § 1998(c)(1) and inserting in lieu thereof a new subdivision (1) to read:

(c)(1)  The director may implement the pharmacy best practices and cost control program for any other health benefit plan within or outside this state that agrees to participate in the program.  For entities in Vermont, the director shall directly or by contract implement the program through a joint pharmaceuticals purchasing consortium.  The joint pharmaceuticals purchasing consortium shall be offered on a voluntary basis no later than January 1, 2008, with mandatory participation by state or publicly funded, administered, or subsidized purchasers to the extent practicable and consistent with the purposes of this chapter, by January 1, 2010.  If necessary, the office of Vermont health access shall seek authorization from the Centers for Medicare and Medicaid to include purchases funded by Medicaid. “State or publicly funded purchasers” shall include the department of corrections, the division of mental health, Medicaid, the Vermont Health Access Program (VHAP), Dr. Dynasaur, Vermont Rx, VPharm, Healthy Vermonters, Healthy Vermonters Plus, workers’ compensation, and any other state or publicly funded purchaser of prescription drugs.

Third:  In Sec. 1, 33 V.S.A. § 1998(f)(6), by striking out the following:  reference to “(a)(8) and inserting in lieu thereof the following (c)(1)

Fourth:  In Sec. 2, 33 V.S.A. § 1998(g), by striking out the following: “, such as the Oregon Health and Science University Drug Effectiveness Review Project (DERP),

Fifth:  In Sec. 3, 33 V.S.A. § 2005(a)(3), by inserting the words and the office of Vermont health access after the words “department of health” where they firstly appear

Sixth:  In Sec. 5, 33 V.S.A. § 2010(b) by striking out the words “or may adopt its own standards by rule

Seventh:  In Sec. 5, by striking out subsection 33 V.S.A. § 2010(d) in its entirety and inserting in lieu thereof a new subsection (d) to read:

(d)  When a manufacturer of prescription drugs dispensed in this state reports the information required under subsection (a) of this section, the president, chief executive officer, or a designated employee 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.  A designated employee shall be an employee who reports directly to the chief executive officer or president and who has been delegated to make the certification under this section.

Eighth:  In Sec. 6, 33 V.S.A. § 2003, after subsection (b), by inserting the following:

(c)  As used in this section:

(1)  "Beneficiary" means any individual enrolled in either the Healthy Vermonters program or the Healthy Vermonters Plus program.

(2)  "Healthy Vermonters beneficiary" means any individual Vermont resident without adequate coverage:

(A)  who is at least 65 years of age, or is disabled and is eligible for Medicare or Social Security disability benefits, with household income equal to or less than 400 percent of the federal poverty level, as calculated under the rules of the Vermont health access plan, as amended; or

(B)  whose household income is equal to or less than 300 percent of the federal poverty level, as calculated under the rules of the Vermont Health access plan, as amended.

(3)  "Healthy Vermonters Plus beneficiary" means any individual Vermont resident without adequate coverage:

(A)  whose household income is greater than 300 percent and equal to or less than 350 percent of the federal poverty level, as calculated under the rules of the Vermont health access plan, as amended; or

(B)  whose family incurs unreimbursed expenses for prescription drugs, including insurance premiums, that equal five percent or more of household income or whose total unreimbursed medical expenses, including insurance premiums, equal 15 percent or more of household income.

Ninth:  In Sec. 7, in 18  V.S.A. §9472, by striking out subdivision (a)(1) in its entirety and inserting in lieu thereof a new subdivision (a)(1) to read:

(a)  Unless the contract provides otherwise, a pharmacy benefit manager that provides pharmacy benefit management for a health plan shall:

(1)  Discharge its duties with reasonable care and diligence and be fair and truthful under the circumstances then prevailing that a 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.  In the case of a health benefit plan offered by a health insurer as defined by subdivision 9471(2)(A) of this title, the health insurer shall remain responsible for administering the health benefit plan in accordance with the health insurance policy or subscriber contract or plan and in compliance with all applicable provisions of Title 8 and this title.

Tenth:  In Sec. 7, in 18 V.S.A. §9472 by striking out subsection (c) in its entirety and inserting in lieu thereof a new subsection (c) to read:

(c)  Compliance with the requirements of this section is required for pharmacy benefit managers entering into contracts with a health insurer in this state for pharmacy benefit management in this state.

Eleventh: In Sec. 7, by striking out 18 V.S.A. § 9473 in its entirety and inserting in lieu thereof a new § 9473 to read:

§ 9473.  ENFORCEMENT

(a)  Except as provided in subsection (d) of this section, 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.  Except as provided in subsection (d) of this section, 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.

(c)  The commissioner may investigate, examine, or otherwise enforce a violation of this subchapter by a pharmacy benefit manager under section 9412 of this title as if the pharmacy benefit manager were a health insurer. 

(d)  The commissioner shall have the exclusive authority to investigate, examine, and otherwise enforce the provisions of this subchapter relating to a pharmacy benefit manager in connection with the pharmacy benefit manager's contractual relationship with, and any other activity with respect to, a health insurer defined by subdivision 9471(2)(A) of this title.

(e)  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.

Twelfth:  In Sec. 8, in 18 V.S.A. § 9421, by striking out subsections (b) and (c)(1) in their entirety and inserting a new (b) and (c)(1) to read:

(b)  In accordance with rules adopted by the commissioner, pharmacy benefit managers operating in the state of Vermont and proposing to contract for the provision of pharmacy benefit management shall notify health insurers when the pharmacy benefit manager provides a quotation that a quotation for an administrative-services-only contract with full pass through of negotiated prices, rebates, and other such financial benefits which would identify to the health insurer external sources of revenue and profit is generally available and whether the pharmacy benefits manager offers that type of arrangement.  Quotations for an administrative-services-only contract shall include a reasonable fee payable by the health insurer which represents a competitive pharmacy benefit profit.  This subsection shall not be interpreted to require a pharmacy benefits manager to offer an administrative-services-only contract.

(c)(1)  In order to enable periodic verification of pricing arrangements in administrative-services-only contracts, pharmacy benefit managers shall allow access, in accordance with rules adopted by the commissioner, by the health insurer who is a party to the administrative-services-only contract to financial and contractual information necessary to conduct a complete and independent audit designed to verify the following:

(A)  full pass through of negotiated drug prices and fees associated with all drugs dispensed to beneficiaries of the health plan in both retail and mail order settings or resulting from any of the pharmacy benefit management functions defined in the contract;

(B)  full pass through of all financial remuneration associated with all drugs dispensed to beneficiaries of the health plan in both retail and mail order settings or resulting from any of the pharmacy benefit management functions defined in the contract; and

(C)  any other verifications relating to the pricing arrangements and activities of the pharmacy benefit manager required by the contract if required by the commissioner.

Thirteenth:  In Sec. 12, 18 V.S.A. § 4622(a),after the following: “attorney general,” by inserting the following:  the University of Vermont area health center program, and the office of Vermont health access

Fourteenth:  In Sec. 12, 18 V.S.A. § 4622(c), by striking out the following “, such as the Oregon Health and Science University Drug Effectiveness Review Project (DERP)

Fifteenth:  By striking out Sec. 13 in its entirety and inserting in lieu thereof a new Sec. 13 to read:

Sec. 13.  REPORT ON NEW HAMPSHIRE CONFIDENTIALITY OF PRESCRIPTION INFORMATION LAW

The staff of the legislative council shall report to the house committee on health care and the senate committee on health and welfare on the status of New Hampshire’s law prohibiting the commercial use of prescriber-identifiable data contained in prescription data no later than November 1, 2007.  The report shall include a summary of any court decisions and status of the litigation on this law currently pending in New Hampshire and any related information provided by the state of New Hampshire. 

Sixteenth:  By striking out Secs. 14, 15, and 16 in their entirety

Seventeenth:  By striking out Sec. 17 in its entirety and inserting in lieu thereof a new Sec. 17 to read:

Sec. 17.  18 V.S.A. chapter 91, subchapter 5 is added to read:

Subchapter 5.  Unconscionable Pricing

§ 4651.  Purpose

The purpose of this subchapter is to ensure Vermonters affordable access to prescription drugs necessary for the treatment of certain health conditions determined to be a serious public health problem in the state.

§ 4652.  DEFINITIONS

For purposes of this subchapter:

(1)  “Affected party” means any person directly or indirectly affected by unconscionable prices of prescription drugs, including any organization representing such persons or any person or organization representing the public interest.

(2)  “Most favored purchase price” means the price offered with all rights and privileges accorded by the seller to the most favored purchaser in Vermont.

(3)  “Purchaser” means any person who engages primarily in selling drugs directly to consumers.

(4)  “Seller” means any person who trades in drugs for resale to purchasers in this state.

§ 4653.  UnconsCionable Pricing PROHIBITED

A manufacturer of prescription drugs or its licensee shall not sell, supply for sale, or impose minimum resale requirements for a prescription drug necessary to treat a serious public health threat provided for in section 4654 of this title that results in that prescription drug being sold in Vermont for an unconscionable price.

§ 4654.  SERIOUS PUBLIC health THREAT

(a)(1)  The commissioner of health may issue a declaration that a health condition or disease is prevalent in Vermont to such an extent as to constitute a serious public health threat.

(2)  The attorney general may request a determination by the commissioner of health on whether a health condition or disease meets the criteria in this section.  If the attorney general makes a request under this subdivision, the commissioner of health shall consider the request.

(b)  At minimum, the commissioner shall consider the following factors when declaring that a health condition or disease is a serious public health threat:

(1)  if a large number of Vermonters suffer from the health condition and the condition is life-threatening in the short term or has a severe consequence to health in the short term, or if the condition is highly contagious and threatens a large number of Vermonters;

(2)  if the costs to the state, employer-sponsored insurance, and private insurers of treating the health condition with prescription drugs would be expensive without intervention allowed for under this chapter;

(3)  if the cost of a prescription drug or a class of prescription drugs used to treat the health condition is prohibitively expensive, to the extent that information is available;

(4)  whether a prescription drug or class of prescription drugs is essential for maintaining health or life;

(5)  whether consumers affected with the health condition are unable to afford the prescription drug at the current price; and

(6)  other relevant factors as determined by the commissioner.

§ 4655.  Unconscionable pricing; PRIMA FACIE CASE

(a)  A prima facie case of unconscionable pricing as prohibited in section 4653 of this title shall be established where the wholesale price of a prescription drug in Vermont is over 30 percent higher than the prices available to federal agencies under the federal supply schedule, the prices available through the Healthy Vermonters program, or the most favored purchase price.

(b)  If a prima facie case of unconscionable pricing is shown, the burdens of providing evidence and of proving by a preponderance of the evidence shall shift to the defendant to show that a prescription drug is not unconscionably priced by showing the demonstrated costs of invention, development, and production of the prescription drug, global sales and profits to date, consideration of any government‑funded research that supported the development of the drug, and the impact of price on access to a prescription drug by residents and the government of Vermont.

§ 4656.  consumer fraud ACTION

The attorney general or state’s attorney shall enforce the provisions of this section under the Vermont consumer fraud act in chapter 63 of Title 9.  All rights, authority, and remedies available to enforce the consumer fraud act shall be available to enforce the provisions of this subchapter.

§ 4657.  Civil Action

(a)  Any affected party shall have standing to file a civil suit in a court of competent jurisdiction for a violation of this chapter and to seek a remedy, including declaratory and injunctive relief.

(b)  Whenever an affected party, other than the attorney general, brings an action pursuant to this chapter, a copy of any pleadings shall be served on the attorney general pursuant to Rule 5 of the Vermont Rules of Civil Procedure. Failure to comply with this provision shall not affect the validity of the proceedings commenced under this section.

§ 4658.  Remedies FOR CIVIL ACTIONS

If in an action brought by an affected party under section 4657 of this title, a court determines that any person has violated this chapter, the court is authorized to render:

(1)  temporary, preliminary, or permanent injunctions to enjoin the sales of prescription drugs in Vermont at unconscionable prices;

(2)  an order of damages, including treble damages;

(3)  an order requiring reimbursement to the state of Vermont for the reasonable value of its services and its expenses in investigating and prosecuting the action;

(4)  costs and reasonable attorney’s fees; and

(5)  any other relief deemed appropriate by the court.

Eighteenth:  By striking out Sec. 19 in its entirety and inserting a new Sec. 19 to read as follows:

Sec. 19.  9 V.S.A. § 2466a is added to read:

§ 2466a.  Consumer Protections; Prescription Drugs

(a)  A violation of section 4655 of Title 18 shall be considered a violation under this chapter.

(b)  As provided in section 9473 of Title 18, a violation of section 9472 shall be considered a violation under this chapter.

(c)(1)  It shall be a violation under this chapter for a manufacturer of prescription drugs to present or cause to be presented in the state a regulated advertisement if that advertisement does not comply with the requirements concerning misbranded drugs and devices and prescription drug advertising of federal law and regulations under 21 United States Code, Sections 331 and 352(n) and 21 Code of Federal Regulations, Part 202 and state rules.  A warning or untitled letter issued by the U.S. Food and Drug Administration shall be prima facie evidence of a violation of federal law and regulations.

(2)  For purposes of this section:

(A)  “Manufacturer of prescription drugs” means a person authorized by law to manufacture, bottle, or pack drugs or biological products, a licensee or affiliate of that person, or a labeler that receives drugs or biological products from a manufacturer or wholesaler and repackages them for later retail sale and has a labeler code from the federal Food and Drug Administration under 21 Code of Federal Regulations, 2027.20 (1999).

(B)  “Regulated advertisement” means the presentation to the general public of a commercial message regarding a prescription drug or biological product by a manufacturer of prescription drugs that is broadcast on television, cable, or radio from a station or cable company that is physically located in the state, broadcast over the internet from a location in the state, or printed in magazines or newspapers that are printed, distributed, or sold in the state.

(d)  No person shall sell, offer for sale, or distribute electronic prescribing software that advertises, uses instant messaging and pop-up advertisements, or uses other means to influence or attempt to influence the prescribing decision of a health care professional through economic incentives or otherwise and which is triggered or in specific response to the input, selection, or act of a health care professional or agent in prescribing a specific prescription drug or directing a patient to a certain pharmacy.  This subsection shall not apply to information provided to the health care professional about pharmacy reimbursement, prescription drug formulary compliance, and patient care management.

and by renumbering all Secs. to be numerically correct

(Committee vote: 6-0-0)

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

The Committee recommends that the recommendation of amendment of the Committee on Health and Welfare be further amended as follows:

First:  By striking out the Seventeenth recommendation of amendment in its entirety and inserting in lieu thereof the following:

Seventeenth:  By striking out Sec. 17 in its entirety and inserting in lieu thereof a new Sec. 17 to read:

Sec. 17.  18 V.S.A. chapter 91, subchapter 5 is added to read:

Subchapter 5.  Unconscionable Pricing

§ 4651.  Purpose

The purpose of this subchapter is to ensure Vermonters affordable access to prescription drugs necessary for the treatment of certain health conditions determined to be a serious public health problem in the state.

§ 4652.  DEFINITIONS

For purposes of this subchapter:

(1)  “Affected party” means any person in Vermont directly or indirectly affected by unconscionable prices of prescription drugs, including any organization representing such persons or any person or organization representing the public interest.

(2)  “Most favored purchase price” means the price offered with all rights and privileges accorded by the seller to the most favored purchaser in Vermont.

(3)  “Purchaser” means any person who engages primarily in selling drugs directly to consumers.

(4)  “Seller” means any person who trades in drugs for resale to purchasers in this state.

§ 4653.  UnconsCionable Pricing PROHIBITED

A manufacturer of prescription drugs or its licensee shall not sell in Vermont for an unconscionable price a prescription drug necessary to treat a serious public health threat provided for in section 4654 of this title.

§ 4654.  SERIOUS PUBLIC health THREAT

(a)(1)  The commissioner of health may issue a declaration that a health condition or disease is prevalent in Vermont to such an extent as to constitute a serious public health threat.

(2)  The attorney general may request a determination by the commissioner of health on whether a health condition or disease meets the criteria in this section.  If the attorney general makes a request under this subdivision, the commissioner of health shall consider the request.

(b)  At minimum, the commissioner shall consider the following factors when declaring that a health condition or disease is a serious public health threat:

(1)  the number of Vermonters that suffer from the health condition;

(2)  the costs to the state, employer-sponsored insurance, and private insurers of treating the health condition with prescription drugs;

(3)  the cost of a prescription drug or a class of prescription drugs used to treat the health to the extent that information is available;

(4)  whether a prescription drug or class of prescription drugs is essential for maintaining health or life;

(5)  whether consumers affected with the health condition are unable to afford the prescription drug at the current price; and

(6)  other relevant factors as determined by the commissioner.

§ 4655.  Unconscionable pricing; PRIMA FACIE CASE

(a)  A prima facie case of unconscionable pricing as prohibited in section 4653 of this title shall be established where the price of a prescription drug in Vermont is over 30 percent higher than the prices available to federal agencies in Vermont under the federal supply schedule, the prices available through the Healthy Vermonters program, or the most favored purchase price available in Vermont.

(b)  If a prima facie case of unconscionable pricing is shown, the burdens of providing evidence and of proving by a preponderance of the evidence shall shift to the defendant to show that a prescription drug is not unconscionably priced by showing the demonstrated costs of invention, development, and production of the prescription drug, global sales and profits to date, consideration of any government‑funded research that supported the development of the drug, and the impact of price on access to a prescription drug by residents and the government of Vermont.

§ 4656.  consumer fraud ACTION

The attorney general or state’s attorney shall enforce the provisions of this section under the Vermont consumer fraud act in chapter 63 of Title 9.  All rights, authority, and remedies available to enforce the consumer fraud act shall be available to enforce the provisions of this subchapter.

§ 4657.  Civil Action

(a)  Any affected party shall have standing to file a civil suit in a court of competent jurisdiction for a violation of this chapter and to seek a remedy, including declaratory and injunctive relief.

(b)  Whenever an affected party, other than the attorney general, brings an action pursuant to this chapter, a copy of any pleadings shall be served on the attorney general pursuant to Rule 5 of the Vermont Rules of Civil Procedure. Failure to comply with this provision shall not affect the validity of the proceedings commenced under this section.

§ 4658.  Remedies FOR CIVIL ACTIONS

If in an action brought by an affected party under section 4657 of this title, a court determines that any person has violated this chapter, the court is authorized to render:

(1)  temporary, preliminary, or permanent injunctions to enjoin the sales of prescription drugs in Vermont at unconscionable prices;

(2)  an order of damages, including treble damages;

(3)  an order requiring reimbursement to the state of Vermont for the reasonable value of its services and its expenses in investigating and prosecuting the action;

(4)  costs and reasonable attorney’s fees; and

(5)  any other relief deemed appropriate by the court.

Second:  By striking out the Fifteenth recommendation of amendment in its entirety and inserting in lieu thereof the following:

Fifteenth:  By striking out Sec. 13 in its entirety and inserting in lieu thereof a new Sec. 13 to read:

Sec. 13.  18 V.S.A. § 4634 is added to read:

§ 4634.  Pharmaceutical Marketer Prescription Information Disclosure Program

(a)  When a pharmaceutical marketer engages in any form of prescription drug marketing directly to a physician or other person authorized to prescribe prescription drugs, the marketer shall disclose to the physician or other prescriber any identifiable prescription information, relating to the physician or other prescriber, accessible to the pharmaceutical marketer.  If the information is available to the marketer, disclosure shall include the name of the prescriber, name of patient, name of the drug, date of the prescription, and amount of the drug prescribed.  The marketer shall also provide the prescriber with an information sheet describing any program that the manufacturing company participates in that collects, assembles, transfers, or reviews identifiable prescription information for commercial purposes.  Such programs shall include sales force effectiveness programs. 

(b)  The marketer shall provide the prescriber with a form that would enable the prescriber to opt in to the program, creating identifiable prescription information relating to the prescriber for commercial purposes.

(c)  The disclosures, information sheets, and opt‑in required under this section shall be on a form and in a manner prescribed by the office of the attorney general.  The attorney general may adopt rules to implement the provisions of this section.

(d)  In addition to any other remedy provided by law, the attorney general after consultation with the commissioner of banking, insurance, securities, and health care administration and the commissioner of health may file an action in superior court for a violation of this section or of rules adopted under this section.  In any such action, the attorney general shall have the same authority to investigate and to obtain remedies as if the action were brought under the consumer fraud act, chapter 63 of Title 9.  Each violation of this section or of rules adopted under this section constitutes a separate civil violation for which the attorney general may obtain relief.

(e)  As used in this section:

(1) “Commercial purpose” shall include advertising, marketing, promotion, or any activity that is intended to be used or is used to influence sales or the market share of a pharmaceutical product, to influence or evaluate the prescribing behavior of an individual health care professional, to market prescription drugs to patients, or to evaluate the effectiveness of a pharmaceutical detailing sales force. 

(2) “Pharmaceutical manufacturing company” is defined by subdivision 4632(c)(5) of this title.

(3) “Pharmaceutical marketer” is defined by subdivision 4632(c)(4) of this title.

Third:  That the bill be amended in Sec. 21 (recodification), in subdivision (a), after the word “section” where it secondly appears by striking out the number “4634” and inserting in lieu thereof the number 4535

(Committee vote: 5-1-1)

AMENDMENT TO S. 115 TO BE OFFERED BY SENATOR CONDOS

Senator Condos moves to amend the first amendment of the Committee on Finance (amending the seventeenth amendment of the Committee on Health and Welfare), in §4655(a), after the words “established where the” by inserting the word manufacturer’s

S. 121

An act relating to autism.

Reported favorably with recommendation of amendment by Senator Nitka for the Committee on Education.

     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.  FINDINGS

The general assembly finds:

(1)  Autism is identified as a pervasive developmental disorder in the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV).  Pervasive developmental disorders include: autistic disorder; Asperger’s disorder; pervasive developmental disorder, not otherwise specified; Rett’s disorder; and childhood disintegrative disorder.  These disorders are often referred to as autism spectrum disorders (ASD).

(2)  Although this act pertains to ASD, it is noteworthy that autism is a neurologically based developmental disorder that can have profound lifelong effects in social interaction, the ability to communicate, imagination, and the establishment of relationships.

(3)  Children are diagnosed with autism spectrum disorders by psychologists, developmental pediatricians, psychiatrists, and neurologists.

(4)  In 1992, only 13 Vermont children with autism spectrum disorders received special education in Vermont.  According to the preliminary December 1, 2006 child count, 582 children with autism spectrum disorders are currently receiving special education in Vermont.

(5)  There is no single intervention that will be effective for all individuals with autism spectrum disorders or for the same individual across his or her lifespan.

(6)  National Research Council findings suggest that up to 48 percent of young children with autism spectrum disorders make marked progress when they receive intensive early intervention.

Sec. 2.  INTERAGENCY INITIATIVE TO ENHANCE SERVICES FOR INDIVIDUALS WITH AUTISM SPECTRUM DISORDERS

(a)  ASD Initiative.  On or before January 15, 2008, the secretary of human services and the commissioner of education shall develop a state plan for and begin implementation of a comprehensive initiative designed to sustain and enhance services provided by existing public and private entities to Vermonters with autism spectrum disorders (ASD) and their families.  The plan shall include detailed budget projections, a feasibility analysis for a structured fee schedule, and estimated appropriation requirements for each year of implementation.  The agency of human services, through the department for children and families, the department of health, and the department of disabilities, aging, and independent living, shall assume primary responsibility for the ASD initiative.  The secretary of human services and the commissioner of education shall enter into an interagency agreement detailing their respective responsibilities on or before August 15, 2007.  Subject to receipt of sufficient appropriations as outlined in the initiative plan, the ASD initiative shall be fully implemented by November 15, 2012.  

(b)  Advisory board.  The Act 264 advisory board’s responsibilities are expanded to include serving as the advisory board for the ASD initiative. 

(c)  Services.  In an effort to improve the consistency of both access to and quality of services across the education and human services systems:

(1)  The agency shall enter into contracts with existing and new public and private providers of developmental, mental health, and early intervention services to:

     (A)  Expand the existing capacity for early and accurate diagnosis of ASD by facilitating the sufficient availability of specialists to all regions of the state.

     (B)  Provide technical assistance and training to primary care physicians on screening protocols.

     (C)  Provide training, technical assistance, and consultation to schools, local agencies, and other providers of developmental, mental health, and early intervention services.

(2)  The department of education shall:

(A)  Award grants pursuant to 16 V.S.A. § 2967(b)(3) to the Vermont interdisciplinary team for intensive special education to expand the team’s capacity to serve individuals with ASD and their families.

(B)  Award grants to parent resource centers and other parent organizations offering support to families of individuals with ASD to provide training and technical assistance, to maintain a web-based clearinghouse of resources, including public and private funding opportunities, and strategies for navigating provider services, and to create and expand support groups.

(3)  The agency, the department, or both, may enter into contracts with state or national experts to provide training required by this act and may coordinate with existing entities, such as the higher education collaborative, private autism collaboratives, and early education providers.

(4)  The agency and department shall plan for the gradual development of model regional resource centers at existing locations of developmental services, mental health, and other local agency providers, with satellite sites in other areas of the state.  The purpose of the regional resource centers is to provide consultation, training, technical assistance, and otherwise create a hub of information regarding effective strategies in supporting individuals with ASD and their families.

(d)  Evaluation and report.  Annually, the agency and the department shall evaluate the effectiveness of the initiative, identify unmet needs, and modify the program to address the unmet needs.  The agency and the department shall file a written report of their evaluation with the governor, the house and senate committees on education, the senate committee on health and welfare, and the house committee on human services on or before January 15 of each year through 2012.

and that, upon passage, the bill’s title shall be:  “AN ACT RELATING TO AUTISM SPECTRUM DISORDERS”

(Committee vote: 5-0-0)

Reported favorably with recommendation of amendment by Senator Miller for the Committee on Appropriations.

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.  FINDINGS

The general assembly finds:

(1)  Autism is identified as a pervasive developmental disorder in the Diagnostic and Statistical Manual of Mental Disorders (DSM‑IV).  Pervasive developmental disorders include: autistic disorder; Asperger’s disorder; pervasive developmental disorder, not otherwise specified; Rett’s disorder; and childhood disintegrative disorder.  These disorders are often referred to as autism spectrum disorders (ASD).

(2)  Although this act pertains to ASD, it is noteworthy that autism is a neurologically based developmental disorder that can have profound lifelong effects in social interaction, the ability to communicate, imagination, and the establishment of relationships.

(3)  Children are diagnosed with autism spectrum disorders by psychologists, developmental pediatricians, psychiatrists, and neurologists.

(4)  In 1992, only 13 Vermont children with autism spectrum disorders received special education in Vermont.  According to the preliminary December 1, 2006 child count, 582 children with autism spectrum disorders are currently receiving special education in Vermont.

(5)  There is no single intervention that will be effective for all individuals with autism spectrum disorders or for the same individual across his or her lifespan.

(6)  National Research Council findings suggest that up to 48 percent of young children with autism spectrum disorders make marked progress when they receive intensive early intervention.

Sec. 2.  PLAN FOR AN INTERAGENCY INITIATIVE TO ENHANCE SERVICES FOR INDIVIDUALS WITH AUTISM SPECTRUM DISORDERS

(a)  ASD Initiative Plan.  On or before January 15, 2008, the secretary of human services and the commissioner of education shall develop a proposed state plan for a system of care to address the needs of Vermonters with autism spectrum disorders (ASD) and their families, that is consistent with the Vermont Interagency White Paper on Autism Spectrum Disorders: Report to the Act 264 Board, issued March 2006.  The agency of human services, through the department for children and families, the department of health, and the department of disabilities, aging, and independent living, shall assume primary responsibility for developing the proposed plan.  The agency, together with the department of education, shall engage families of individuals with ASD and members of the Act 264 advisory board in the planning process.

(b)  The proposed plan shall include:

(1)  A review of supports and services currently available to individuals with ASD and their families.

(2)  Strategies for enabling access to early and accurate diagnosis of ASD.

(3)  Identification of deficiencies in the current system of care, regarding both the types of services provided and the availability of services in all areas of the state.

(4)  Projections of the future needs of individuals with ASD in Vermont. 

(5)  Identification of the additional support and services needed for an effective system of care for individuals with ASD and identification of potential federal and other funding sources for this system.

(6)  Strategies for the use of existing and new resources to provide training, technical assistance, information dissemination, and consultation to families, schools, local agencies, and other providers of developmental, mental health, and early intervention services.

(7)  A review of the current role of schools in connection with the provision of ASD-related services, including the financial impact that the provision of these services has on school budgets.

(8)  Recommendations for any change in the role of schools in connection with the provision of ASD-related services, including the financial impact that the recommended changes might have on school budgets.

(9)  Consideration of:

(A)  Whether the current allocation of costs for the provision of ASD-related services between the education system and the agency of human services is appropriate.

(B)  How the current and potential costs of ASD-related services provided by schools might be assumed by the agency of human services and whether such assumption would be appropriate and advisable.

(10)  Strategies for encouraging collaboration with higher education programs to provide a sufficient number of well‑trained professionals to provide ASD‑related services in all regions of the state.

(11)  A process by which the proposed plan for a system of care will be implemented, including consideration of how existing resources might be used or redirected to support the system.

(12)  Recommendations for how unmet needs might be satisfied, including any proposals for amendments to legislation or rules.

(13)  Provisions ensuring regular review and revision of the proposed system of care.

(c)  The agency and the department shall file a written plan consistent with this section with the governor and the general assembly on or before January 15, 2008.

and that, upon passage, the title of the bill be amended to read:  “AN ACT RELATING TO AUTISM SPECTRUM DISORDERS”

(Committee vote: 6-0-1)

NOTICE CALENDAR

Favorable

H. 81

An act relating to approval of amendments to the charter of the city of Burlington.

Reported favorably by Senator Flanagan for the Committee on Government Operations.

(Committee vote: 5-0-0)

(No House amendments)

H. 169

An act relating to approval of amendments to the charter of the town of Williston.

Reported favorably by Senator Flanagan for the Committee on Government Operations.

(Committee vote: 5-0-0)

(For House amendments, see House Journal for March 16, 2007, page 334)

Favorable with Recommendation of Amendment

S. 94

An act relating to greenhouse gas reduction, the efficiency utility, assessing an efficiency nega-rate charge on heating fuels, and other matters relating to building efficiency.

Reported favorably with recommendation of amendment by Senator Lyons 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:

* * * Expanded Efficiency Utility * * *

Sec. 1.  30 V.S.A. § 203a is added to read:

§ 203a.  HEATING FUEL SAVINGS CHARGE TO FUND EXPANDED EFFICIENCY UTILITY

(a)  Purpose.  The general assembly finds and determines that:

(1)  as specified in section 202a of this title, it is state energy policy to assure the efficient use of energy resources and cost‑effective demand management;

(2)  as is specified in section 202b of this title, a comprehensive state energy plan is to be developed as a way of implementing state energy policy;

(3)  it is appropriate to build upon the work already done by the efficiency utility established under the authority of section 209 of this title in reducing energy costs for Vermonters and to integrate that work into a broader program that will serve the needs of the people of the state in an even better manner;

(4)  under the status quo, since efficiency charges may be assessed by the board only on regulated electricity and natural gas providers, the benefits from programs funded by those charges have not been designed to meet fully the thermal efficiency needs of consumers who rely on heating oil, kerosene, propane, and coal, upon which no efficiency charge yet has been assessed;

(5)  with the growing certainty that global climate change is caused in significant part by human activities that release greenhouse gases into the atmosphere, it is particularly important to reduce the extent to which these emissions result from the inefficient use of carbon‑containing fuels, regardless of the nature of the source;

(6)  it is desirable for the state to lower the risk of high fuel prices and vulnerable supplies, while at the same time strengthening the Vermont economy by establishing a system that will be able to make continuous progress by promoting all forms of energy end‑use efficiency, comprehensive sustainable building design, and integrated renewable energy installations. 

(b)  Heating fuel savings charge.  The board shall establish a heating fuel savings charge, to take effect on January 1, 2008, at a level of one percent of annual gross receipts, or the volumetric equivalent, as adjusted by the board to assure an annual cap of revenue for the first 12 months of $5,000,000.00.   This annual rate may not be increased before July 1, 2009. This heating fuel savings charge shall be assessed as determined by the board, which may be based upon the gross receipts or total volumetric sales of all retail sellers receiving more than $10,000.00 annually for the sale of one or more of the following:

(1)  heating oil, kerosene, or propane, to the extent that none of them are used to propel a motor vehicle or for electrical generation by a company as defined in this title; or

(2)  coal.

(c)  Fund.  Proceeds of the heating fuel savings charge assessed under this section shall be paid to a fund administrator appointed by the board under this section.  Balances in the fund that are derived from this funding source shall be fuel consumers’ funds.  Balances in the fund shall be used to carry out cost‑effective efficiency measures and reductions in greenhouse gas emissions from sectors other than, or in addition to, the electricity use sector, and shall be carried forward and remain in the fund at the end of each fiscal year.  These monies shall not be available to meet the general obligations of the state.  Interest earned shall remain in the fund.  The fund may be managed and implementation of the program shall be overseen by the entity established by the board under this section.  The fund shall be managed subject to the relevant provisions of subsection 209(e) of this title.

(d)  Review of amount of fuel savings charge.  The charge established by the board pursuant to this section shall be reviewed by the board to determine its adequacy to meet the public’s needs for energy services, after safety concerns are addressed.  In this process, due consideration shall be given to the magnitude of the efficiency charge burden imposed on, or the equivalent level of expenditure by, regulated providers of electricity and natural gas, the resources dedicated to efficiency purposes already provided through electric rates, the estimated available cost‑effective investment potential for efficiency investments through comprehensive energy efficiency programs which are designed to meet the public’s need for energy services through efficiency or conservation in all customer classes and areas of opportunity and which are designed to acquire the full amount of cost‑effective savings from those programs.  As circumstances and programs evolve, the amount of the fuel savings charge shall be reviewed, based on an assessment of unrealized energy efficiency potential, and shall be adjusted as necessary in order to realize all reasonably available, cost‑effective energy efficiency savings.  In adjusting the amount of the fuel savings charge and its allocation, the board shall determine an appropriate balance among the following objectives:  reducing the size of future heating fuel purchases; reducing the generation of greenhouse gases; minimizing the expense of purchasing heating fuel; 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; providing that residential and commercial sector benefits generally shall be proportional to sector contributions; and targeting efficiency and conservation efforts to locations, markets, or customers where they may provide the greatest value.

(e)  Limited jurisdiction.  The public service board and the department of public service shall have jurisdiction under this section with respect to retail sellers of heating fuel. That jurisdiction shall be limited to the establishment and revision of the fuel savings charge.  No jurisdiction is created under this section to require these entities to conduct least cost integrated planning under section 218c of this title.

(f)  Consumer notice.  The board shall provide retail providers of heating fuel with written materials for display to consumers regarding how to obtain information about energy efficiency programs approved under this section.  These written materials shall include, at a minimum, a toll free telephone number at which this information may be obtained.

Sec. 2.  30 V.S.A. § 201(c) is added to read:

(c)  As used in this chapter, “fuel savings charge” means an efficiency charge to be assessed by the board under section 203a of this title, at a rate established under that section, in order to limit societal vulnerability to increasing petroleum costs, to build the jobs and the sustainable economy that are tied to greater energy independence, and to finance a reduction in the generation of greenhouse gases from the use of fossil fuels for purposes of heating buildings, by assuring wider availability of weatherization and efficiency programs, regardless of the fuel source of the building.

Sec. 3.  30 V.S.A. § 203 is amended to read:

§ 203.  JURISDICTION OF CERTAIN PUBLIC UTILITIES

The public service board and the department of public service shall have jurisdiction over the following described companies within the state, their directors, receivers, trustees, lessees, or other persons or companies owning or operating such companies and of all plants, lines, exchanges, and equipment of such companies used in or about the business carried on by them in this state as covered and included herein.  Such jurisdiction shall be exercised by the board and the department so far as may be necessary to enable them to perform the duties and exercise the powers conferred upon them by law.  The board and the department may, when they deem the public good requires, examine the plants, equipment, lines, exchanges, stations, and property of the companies subject to their jurisdiction under this chapter.

* * *

(7)  That part of the business of a company which consists of the sale directly to the public of any combination of propane, coal, heating oil, or kerosene (but not any amounts being used to propel a motor vehicle, and not any amounts being used for electrical generation by a company as defined in this title); provided that the company has sales of these fuels, not excluded by this subdivision, totaling more than $10,000.00 annually.  This jurisdiction is only for purposes of assessing and collecting the fuel savings charge authorized by section 203a of this title.

* * * Existing Efficiency Utility * * *

Sec. 4.  30 V.S.A. § 209(d)(2) is amended to read:

(2)  In place of utility‑specific programs developed pursuant to section 218c of this title, the board may shall, 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 appointing one or more entities appointed by the board for these purposes a qualified entity as an energy efficiency utility.  An appointment of an expanded energy efficiency utility shall be made under this section and section 203a of this title, on a schedule that provides the expanded energy efficiency utility adequate time to prepare for the delivery of relevant services no later than January 1, 2008.  Despite this appointment, however, the board may allow the Burlington Electric Department and the Vermont Gas Systems, Inc. to continue to provide efficiency services within their respective service territories.  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 Except with regard to a transmission company, the board may specify that the implementation of these programs and measures appointment of an energy efficiency utility to deliver services within an electric utility’s service territory satisfies a that electric utility’s corresponding obligations, in whole or in part, under section 218c of this title and under any prior orders of the board.

Sec. 5.  30 V.S.A. § 209(d)(5) is added to read:

(5)  Effective January 1, 2009, an energy efficiency utility shall have the same unrestricted term of appointment as is most common for electric and gas utilities in the state.  The board may terminate an energy efficiency utility’s appointment, but only for good cause, such as fraud, material adverse effects upon the general good of the state, or sustained failure to meet the performance targets established in subdivision (e)(2) of this section, and only if so shown after notice and an opportunity for hearing.

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

(e)  The board shall:

(1)  Ensure that all retail consumers, regardless of retail electricity or, gas, or heating fuel provider, will have an opportunity to participate in and benefit from a comprehensive set of cost‑effective energy efficiency programs and initiatives designed to overcome barriers to participation.

(2)  Require that continued or improved efficiencies be made in the production, delivery, and use of energy efficiency services, including the use of compensation mechanisms for any energy efficiency utility that are based upon verified savings in energy usage and demand, and other performance targets specified by the board.  The linkage between compensation and verified savings in energy usage and demand (and other performance targets) shall be reviewed and adjusted not less than triennially by the board.

* * *

(7)  Provide a reasonably stable multiyear budget and planning cycle and promote program improvement, program stability, enhanced access to capital and personnel, improved integration of program designs with the budgets of regulated companies providing energy services, and maturation of programs and delivery resources.    

* * *

(10)  Provide for the independent evaluation of programs delivered under subsection (d) of this section and those delivered under section 203a of this title.

(11)  Require that any entity approved appointed by the board under subsection (d) of this section shall:

(A)  deliver board‑approved programs in an effective, efficient, timely, and competent manner and meet standards that are consistent with those in section 218c of this title, the board’s orders in public service board docket 5270, and any relevant board orders in subsequent energy efficiency proceedings; and

(B)  independently report and recommend to the board, the legislature, and the public measures and policies intended to achieve the purposes of section 202a of this title, and, more generally, the purposes of this title.

(12)  Require verification, on or before January 1, 2003, and every three years thereafter, by an independent auditor of the reported energy and capacity savings and cost‑effectiveness of programs delivered by any entity appointed by the board to deliver energy efficiency programs under subdivision (d)(2) of this section and under section 203a of this title.

* * *

(14)  Consider the impact on retail electric rates of programs delivered under subsection (d) of this section and the impact on fuel prices of programs delivered under section 203a of this title.

(15)  Establish a building efficiency program to be run by the efficiency utility, that shall be designed to make continuous progress by promoting all forms of energy end‑use efficiency and comprehensive sustainable building design.  The program may utilize performance‑based compensation.  The program administrator may secure and administer revenue from other sources.

(16)  Require that any entity appointed by the board under section 203a of this title shall:

(A)  deliver board‑approved programs in an effective, efficient, timely, and competent manner and meet standards that are consistent with any relevant board orders in subsequent energy efficiency proceedings;

(B)  annually report to the general assembly on expenditures under the program and on projected budget needs for the upcoming five years.

(f)  Appointment under this section shall not render such an entity subject to the general provisions of chapters 3 and 5 of this title, except to the degree provided for by the board in such an appointment or specific future order.  Appointment of, oversight of, and revenue determinations for such an energy efficiency utility shall fall within the regulatory powers and jurisdiction of the board and, as is the case regarding the regulation of the revenues, terms and conditions of service and compensation of gas and electric utilities shall not be considered a contractual activity of the state.

(g)  The public service board may prescribe, by rule or order, standards for the labeling of electricity delivered or intended for delivery to ultimate consumers as to price, terms, sources and objective environmental impacts, along with such procedures as it deems necessary for verification of information contained in such labels.  The public service board may prescribe, by rule or by order, standards and criteria for the substantiation of such labeling or of any claims regarding the price, terms, sources and environmental impacts of electricity delivered or intended for delivery to ultimate consumers in Vermont, along with enforcement procedures and penalties.  When establishing standards for the labeling of electricity, the board shall weigh the cost, as well as the benefits, of compliance with such standards.  With respect to companies distributing electricity to ultimate consumers, the board may order disclosure and publication, not to occur more than once each year, of any labeling required pursuant to the standards established by this subsection. Standards established under this subsection may include provisions for:

* * * Coordination with Efficiency Utility * * *

Sec. 6.  30 V.S.A. § 218c(b) is amended to read:

(b)  Each regulated electric or gas company shall prepare and implement a least cost integrated plan for the provision of energy services to its Vermont customers.  In preparing the efficiency portion of an integrated plan, a regulated company shall consult with any entity appointed by the board to deliver energy efficiency programs under subdivision 209(d)(2) of this title or under section 203a of this title.  Proposed plans shall be submitted to the department of public service and the public service board.  The board, after notice and opportunity for hearing, may approve a company’s least cost integrated plan if it determines that the company’s plan complies with the requirements of subdivision (a)(1) of this section.

Sec. 7.  REPORTS ON ENERGY EFFICIENT BUILDING INCENTIVES AND ON PROGRAM INTEGRATION

The department of public service, in consultation with the efficiency utility, shall work with representatives of the buildings trades, architects, real estate sales professionals, bankers, nonprofit housing providers, and other interested persons to develop recommendations to the general assembly with regard to:

(1)  How best to create incentives to encourage the economic development likely to accompany the voluntary use of residential and commercial building practices and material that are best suited to limit the amount of energy consumed and greenhouse gases generated, without creating hardships among the users of the building.

(2)  How to assure or facilitate the installation of appropriate and substantial weatherization, particularly with regard to multiple dwellings, rental property, and other instances in which the owner may lack incentives to weatherize because energy costs are paid by a tenant; including the advisability of creating weatherization requirements that must be met at the time of sale.

(3)  How to encourage or require better disclosure of building energy efficiency and weatherization leading up to the time of sale of the building.

* * * Low Income Weatherization * * *

Sec. 8.  33 V.S.A. § 2501(d)–(i) are added to read:

(d)  This fund shall be used solely for the purpose of funding weatherization services to low income Vermonters.  Borrowing from the fund to provide cash flow assistance to LIHEAP, or enhancement of the LIHEAP program if unmet need is determined to be critical, may be authorized by the general assembly if it is determined that such borrowing will not affect cash flow to the weatherization contractors.  All funds borrowed must be repaid to the fund by the end of the fiscal year in which they were borrowed.

(e)  A full annual accounting of the revenues and expenditures of the weatherization trust fund will be provided by the agency of administration to the house and senate committees on appropriations and on natural resources and energy.

(f)  The low income weatherization program will be guided by a five‑year plan that is drafted with the specific purpose of improving continuously the comfort, safety, and affordability in low income housing and to reduce fuel use and greenhouse gas generation in that housing.  The plan shall describe a five‑year strategy, with a three‑year detailed work plan.  Each year, the strategy and the work plan shall be updated by one year.  The initial plan and subsequent updates will be developed by a weatherization oversight committee, working cooperatively with the office of economic opportunity.  The weatherization oversight committee will be composed of:  three representatives, including two representatives of weatherization contractors and one director of a community action program appointed by the Vermont community action directors association; a representative appointed by the energy efficiency utility provided for in 30 V.S.A. § 209; a low income representative appointed by the Vermont low income advocacy council; a representative appointed by the Vermont housing finance agency; a representative of a local or regional nonprofit land trust that develops affordable housing appointed by the housing and conservation board; a representative from the office of home heating assistance; a member of the Vermont house of representatives, appointed by the speaker of the house; a member of the senate, appointed by the president pro tempore of the senate; a representative of renewable energy installers, to be appointed by renewable energy Vermont; a representative with expertise in climate change reduction appointed by the joint energy committee; a representative of the workforce development council; and a representative of the office of economic opportunity.  The office of economic opportunity shall provide support and full drafting assistance to the weatherization oversight committee in the production of this plan and required updates.  

(g)  The initial plan shall be completed and provided to the general assembly by December 20, 2007.  The plan shall include the following:

(1)  A five‑year strategy to ensure stable financing and capacity‑building in the regional weatherization programs, including a plan for ramp‑up of services consistent with sound management practices.

(2)  A full examination of the effect of the federal Department of Energy rules guiding the federal portion of weatherization funds that now also guide the use of state funds, and steps that could be taken with the state funds to expand the number of units served, the comprehensiveness of services offered, and the greenhouse gas reduction effect of the program.  This will include, where appropriate, the potential for revisions in eligibility, both statewide and by region.

(3)  A comprehensive strategy to use the expanded weatherization program to reduce the rapidly increasing annual requirements for LIHEAP funds.

(4)  A full discussion of efficiencies and improved services to be gained in continuing coordination with Efficiency Vermont, the Burlington electric department and Vermont Gas Systems, Inc. energy efficiency programs, and any other partnerships that could improve the efficiency and effectiveness of the program.

(5)  Full consideration of strategies and documentation that may be required to secure any greenhouse gas cap‑and‑trade revenues for furtherance of the program.

(6)  Strategies for appropriate use of renewable energy technologies to secure long‑term affordability for low income households.

(7)  Financing strategies that might leverage other funds to increase efficiency and renewable energy investment in low income housing.

(8)  Estimation of job training requirements to implement the plan, how they may be met, and the role of weatherization programs in providing training for their own programs, and for the expanded efficiency utility program as well.

(9)  A comprehensive plan for evaluation of the program, documentation of savings and other benefits, and regular reporting to the administration and the general assembly.

(h)  The office of economic opportunity may, with the support of the weatherization oversight committee, implement administrative changes to the operation of the low income weatherization program that are within its authority to make, prior to submitting the plan.  All such changes will be described in the plan.

(i)  The weatherization oversight committee will continue in effect after the initial plan is submitted, and shall meet regularly to provide guidance to the office of economic opportunity in implementing the plan and in formulating annual updates of the strategy and work plan.

* * * Energy Planning * * *

Sec. 9.  30 V.S.A. § 202 is amended to read:

§ 202.  ELECTRICAL ENERGY PLANNING

(a)  The department of public service, through the director for regulated utility planning, shall constitute the responsible utility planning agency of the state for the purpose of obtaining for all consumers in the state proper utility service at minimum cost under efficient and economical management consistent with other public policy of the state.  The director shall be responsible for the provision of plans for meeting emerging trends related to electrical energy demand, supply, safety and, conservation, and continuing reductions in the generation of greenhouse gases in the production or use of energy.

(b)  The department, through the director, shall prepare an electrical energy plan for the state.  The plan shall be for a 20‑year period and shall serve as a basis for state electrical energy policy.  The electric energy plan shall be based on the principles of “least cost integrated planning” set out in and developed under section 218c of this title.  The plan shall include at a minimum:

(1)  an overview, looking twenty 20 years ahead, of statewide growth and development as they relate to future requirements for electrical energy, including patterns of urban expansion, statewide and service area economic growth, shifts in transportation modes, modifications in housing types and design, conservation, the increasing global importance of continual reductions in the generation of greenhouse gases, and other trends and factors which, as determined by the director, will significantly affect state electrical energy policy and programs;

(2)  an assessment of all energy resources available to the state for electrical generation or to supply electrical power, including among others, fossil fuels, nuclear, hydro‑electric, biomass, wind, fuel cells, and solar energy and strategies for minimizing the economic and environmental costs of energy supply, including the production of pollutants and greenhouse gases, by means of efficiency and emission improvements, fuel shifting, and other appropriate means;

(3)  estimates of the projected level of electrical energy demand and the projected level of greenhouse gases generated as a byproduct of the generation of electrical energy;

(4)  a detailed exposition, including capital requirements and the estimated cost to consumers, of how such demand shall be met, and how the generation of those greenhouse gases may be continually reduced, based on the assumptions made in subdivision (1) of this subsection and the policies set out in subsection (c) of this section; and

(5)  specific strategies for reducing electric rates and for reducing the generation of greenhouse gases to the greatest extent possible in Vermont over the most immediate five‑year period, for the next succeeding five‑year period, and long‑term sustainable strategies for achieving and maintaining the lowest possible electric rates and generation of greenhouse gases over the full 20‑year planning horizon consistent with the goal of maintaining a financially stable electric utility industry in Vermont.

(c)  In developing the plan, the department shall take into account the protection of public health and safety; preservation of environmental quality; the potential for reduction of rates paid by all retail electricity customers; the potential for reduction of electrical demand through conservation, including alternative utility rate structures; use of load management technologies; efficiency of electrical usage; utilization of waste heat from generation; and utility assistance to consumers in energy conservation.  The department shall place a premium upon continuing reductions in the generation of greenhouse gases.

(d)  In establishing plans, the director shall:

(1)  Consult with:

* * *

(J)  an entity designated to meet the public’s need for energy efficiency services under subdivision 218c(a)(2) of this title or designated under section 203a of this title;

* * *

(2)  To the extent necessary, include in the plan surveys to determine needed and desirable plant improvements and extensions and coordination between utility systems, joint construction of facilities by two or more utilities, methods of operations, and any change that will produce better service or, reduce costs, or reduce the generation of greenhouse gases.  To this end, the director may require the submission of data by each company subject to supervision, of its anticipated electrical demand, including load fluctuation, supplies, costs, the generation of greenhouse gases and its plan to meet that demand, and those greenhouse gas reductions, together with such other information as the director deems desirable.

(3)  Work in conjunction with the energy efficiency entity designated under subsection 209(d) of this title or under section 203a of this title to develop 20‑year projections for efficiency programs administered by that entity, and to incorporate those projections into the state electrical energy plan.

* * *

(f)  After adoption by the department of a final plan, any company seeking board authority to make investments, to finance, to site or construct a generation or transmission facility or to purchase electricity or rights to future electricity, shall notify the department of the proposed action and request a determination by the department whether the proposed action is consistent with the plan.  In its determination whether to permit the proposed action, the board shall consider the department’s determination of its consistency with the plan along with all other factors required by law or relevant to the board’s decision on the proposed action.  If the proposed action is inconsistent with the plan, the board may nevertheless authorize the proposed action if it finds that there is good cause to do so.  To the extent that the inconsistency entails an excessive generation of greenhouse gases, the board may authorize the proposed action only if it finds that there is compelling reason to do so.  The department shall be a party to any proceeding on the proposed action, except that this section shall not be construed to require a hearing if not otherwise required by law.

* * *

Sec. 10.  30 V.S.A. § 202a is amended to read:

§ 202a.  STATE ENERGY POLICY

It is the general policy of the state of Vermont:

(1)  To assure, to the greatest extent practicable, that Vermont can meet its energy service needs in a manner that is adequate, reliable, secure, and sustainable; that assures affordability and encourages the state’s economic vitality, continuing and substantial reductions in the generation of greenhouse gases, the efficient use of energy resources and cost effective cost‑effective demand side management; and that is environmentally sound.

(2)  To identify and evaluate on an ongoing basis, resources that will meet Vermont’s energy service needs in accordance with the principles of least cost integrated planning; including efficiency, conservation and load management alternatives, wise use of renewable resources, continuing and substantial reductions in the generation of greenhouse gases, and environmentally sound energy supply.

Sec. 11.  30 V.S.A. § 202b is amended to read:

§ 202b.  STATE COMPREHENSIVE ENERGY PLAN

(a)  The department of public service, in conjunction with other state agencies designated by the governor, and in consultation with the efficiency utility designated under subsection 209(d) or section 203a of this title, shall prepare a comprehensive state energy plan covering at least a 20‑year period.  The plan shall seek to implement the state energy policy set forth in section 202a of this title.  The plan shall include:

(1)  A comprehensive analysis and projections regarding the use, cost, supply, and environmental effects of all forms of energy resources used within Vermont and regarding all greenhouse gases generated within the state, including the state’s progress in meeting greenhouse gas reduction goals established in 10 V.S.A. § 578.

(2)  Recommendations for state implementation actions, regulation, legislation, and other public and private action to carry out the comprehensive energy plan.

* * *

(e)  By no later than January 10, 2008, the department shall complete and deliver to the general assembly a comprehensive energy plan, which, in addition to other requirements, shall include a comprehensive set of policy options for reducing greenhouse gas emissions.  The plan shall provide specific recommendations for increasing the energy efficiency of Vermont’s built environment, including strategies to increase the efficiency of new residential buildings, the efficiency of existing residential buildings, and the efficiency of new and existing commercial and industrial buildings, including industrial processes.

* * * Energy Efficiency Mortgages * * *

Sec. 12.  ENERGY EFFICIENCY MORTGAGES

On or before January 15, 2008, the Vermont housing finance agency and the Vermont economic development authority, respectively, shall report to the house and senate committees on natural resources and energy, the house committee on commerce, and the senate committee on finance regarding the feasibility of establishing programs to support energy efficiency residential and commercial building mortgages of up to 15 percent of the appraised value of a dwelling or commercial building for energy saving improvements, weatherization, or energy efficiency for which the monthly mortgage or loan payment does not exceed the likely reduction in utility and heating costs for the dwelling or commercial building.

* * * Inclining Residential Rates and Smart Meters * * *

Sec. 13.  30 V.S.A. § 218(b) is amended to read:

(b)  The department of public service shall propose, and the board through the establishment of rates of return, rates, tolls, charges, or schedules shall encourage the implementation by electric and gas utilities of energy‑efficiency and load management measures which will be cost‑effective for the utilities and their customers on a life cycle cost basis.  The board shall approve rate designs to encourage the efficient use of natural gas and electricity, including consideration of the creation of an inclining block rate structure for residential rate customers with an initial block of low‑cost power available to all residences.  The board shall solicit one or more volunteer municipal companies or cooperatives to conduct one or more pilot projects to establish an inclining block structure for residential rate customers and to establish the optimal role for advanced metering systems used in conjunction with time‑of‑day rates. Costs incurred in conducting these pilot programs shall be recoverable by the companies or cooperatives as specified by the board.  The board shall use the pilot projects to investigate:

(1)  the parameters that might be developed for general applicability in the event that inclining block structures for residential rate customers becomes a general requirement throughout the state; and

(2)  how best to deploy advanced metering systems so as to assure in a timely and cost‑effective fashion that customers throughout the state are empowered to use and respond cost‑effectively to price signals made possible through advanced metering systems.

* * * Act 250 * * *

Sec. 1410 V.S.A. § 6025(f) is added to read:

(f)  The land use panel, in consultation with the efficiency utility established under 30 V.S.A. § 209(d) or § 203a shall adopt rules that update the requirements of subdivision 6086(a)(9)(F) of this title to respond to the evolution of planning in response to climate change and other factors, the development of new and more efficient designs, and increases in fuel prices that lead to shorter payback periods for efficiency measures, and shall thereby assure the updated identification of the best available technology for efficient use or recovery of energy.  Rules adopted under this subsection shall complement building standards accorded presumptive weight under this chapter and shall address areas not covered by those standards.

* * * Biodiesel * * *

Sec. 15.  USE OF BIODIESEL IN STATE OFFICE BUILDINGS, STATE GARAGES, AND THE STATE VEHICLE FLEET

(a)  Definitions.  As used in this section:

(1)  “Biodiesel blend” means a blend of biodiesel fuel and petroleum diesel fuel or petroleum heating fuel that contains at least two percent biodiesel fuel by volume.

(2)  “Biodiesel fuel” means a renewable, biodegradable, mono alkyl ester combustible liquid fuel derived from vegetable oil or animal fat which meets the American Society for Testing and Materials (ASTM) specification D6751‑02 for Biodiesel Fuel (B100) Blend Stock for Distillate Fuel.

(b)  On or before January 15, 2008, the department of buildings and general services shall submit a report to the house and senate committees on natural resources and energy, the house and senate committees on transportation, the house and senate committees on agriculture, the house committee on commerce, the house committee on ways and means, and the senate committee on finance with recommendations on increasing the use of biodiesel blends in state office buildings, state garages, and in the state transportation fleet.  The report shall include:

(1)  A summary of the current use of biodiesel blends in state office buildings, state garages, and the state transportation fleet;

(2)  A summary of the biodiesel fuel production capacity, storage facilities, and distribution facilities currently available in Vermont;

(3)  Recommendations on how to increase the use of biodiesel blends in all state office buildings, state garages, and in the state transportation fleet, wherever feasible, to five percent biodiesel (B5) by December 31, 2008, and increase to at least 10 percent biodiesel (B10) by 2012;

(4)  Recommendations for increasing biodiesel fuel production, storage facilities, and distribution facilities;

(5)  A summary of current information on the performance of biodiesel blends for use as heating fuel and as a motor vehicle fuel;

(6)  A summary of the national and regional quality assurance and quality control measures in use for blending biodiesel fuel;

(7)  A summary of any obstacles to increasing biodiesel use in state buildings, state garages, and the state transportation fleet; and

(8)  A proposed work plan that would implement the recommendations for increasing the biodiesel use outlined in subdivision (3) of this subsection.

(c)  The department of buildings and general services shall consult with the agency of transportation on the development of the report, and shall conduct at least one public hearing to review the draft report, and to solicit comments, prior to finalizing the report.

* * * Transportation * * *

Sec. 16.  STUDY ON INCENTIVES FOR EFFICIENT TRANSPORTATION

(a)  There is established a study committee on incentives for efficient transportation.  The committee shall include a member of the house appointed by the speaker, and a member of the senate appointed by the president pro tempore, who jointly shall convene the committee.  In addition, the speaker of the house and the president pro tempore shall each appoint a representative of an environmental group.  The governor shall appoint two automobile dealers, one specializing in American‑made automobiles, one specializing in foreign‑made automobiles.  Other members shall include individuals appointed by the governor to represent the tax department, the tourism industry, a regional transportation organization, and a Vermont member of the association of automotive engineers.

(b)  By December 15, 2007, the committee shall report to the house and senate committees on natural resources and energy and on transportation, to the house committee on ways and means, and to the senate committee on finance with:

(1)  Draft legislation containing efficiency‑related tax and fee incentives and disincentives among and within vehicle weight classes.

(2)  Recommendations regarding the use of cash subsidies for efficient motor vehicle operation behavior.

(3)  Recommendations regarding state purchase of motor vehicles that favor fuel efficient vehicles.

(4)  Recommendations for public education regarding efficient transportation.

(5)  Other recommendations regarding the wise and efficient use of transportation, including how best to provide additional funds to expedite the use of non-motorized transportation. 

(c)  The committee shall be entitled to administrative support from the  agency of transportation.

(d)  Legislative members shall be entitled to compensation as provided in 2 V.S.A. § 406.  Committee members not employed by the state shall be entitled to compensation and expenses as provided in 32 V.S.A. § 1010.

Sec. 17.  9 V.S.A. chapter 138 is added to read:

Chapter 138.  Right to CONSERVE ENERGY

§ 4481.  LEGISLATIVE FINDINGS AND PURPOSE

The general assembly finds that prohibiting or limiting the ability of people voluntarily to conserve energy is contrary to the public interest. It is the purpose of this chapter to encourage energy conservation by discouraging governmental regulations and practices and private contracts which restrict the use of solar collectors, clotheslines, or other energy savings devices, or that impede non-motorized transportation on state and town highways.

§ 4482.  TRIENNIAL REPORT ON LIMITATIONS ON RIGHT TO CONSERVE ENERGY

By no later than January 1, 2008, and triennially thereafter, the commissioner of housing and community affairs shall report to the house and senate committees on natural resources and energy regarding the extent to which private covenants within the state restrict the use of solar collectors, clotheslines, or other energy saving devices, together with any related recommendations on that issue.

* * *  Contract Addendum with Efficiency Utility * * *

Sec. 18.  CONTRACT WITH EFFICIENCY UTILITY

The board shall provide for the availability of expanded services by the efficiency utility under the provisions of 30 V.S.A. § 203a no later than January 1, 2008.  For the year 2008, this expansion of scope of the efficiency utility shall be in the form of an addendum to the existing contract between the board and the efficiency utility.   The public service board shall direct the energy efficiency utility to prepare a proposal for meeting the objectives of section 203a.   The board shall institute a collaborative process to review the proposal and develop it more fully.  The board shall allow public comment and input on the proposal, as presented by the efficiency utility, or as revised during any collaborative process, shall hold at least  two public hearings on the proposal, and shall either accept or modify it.  Thereafter, the board shall provide for the delivery of expanded efficiency services under the provisions of 30 V.S.A. § 209(d)(2), as amended.

The Committee further recommends that after passage of the bill the title be amended to read as follows:

AN ACT RELATING TO ESTABLISHING AN EXPANDED EFFICIENCY UTILITY AND OTHER MATTERS RELATING TO ENERGY CONSERVATION AND DECREASING THE GENERATION OF GREENHOUSE GASES.

(Committee vote: 4-1-0)

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

The Committee recommends that the bill be amended as recommended by the Committee on Natural Resources and Energy with the following amendments thereto:

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

* * * Energy Efficiency Services Fund * * *

Sec. 1.  30 V.S.A. § 203a is added to read:

§ 203a.  ENERGY EFFICIENCY  SERVICES

(a)  Purpose.  The general assembly finds and determines that:

(1)  it is the policy of the state to assure the efficient use of energy resources and cost‑effective demand management, as specified in section 202a of this title,

(2)  a comprehensive state energy plan, as is specified in section 202b of this title, must be developed to implement this state energy policy;

(3)  it is appropriate to build upon the work in reducing energy costs for Vermonters already done by the existing efficiency utility established under the authority of section 209 of this title, and to integrate that work into a broader program implemented through an expanded energy efficiency utility that will serve the needs of the people of the state in an even better manner;

(4)  current energy efficiency programs are not designed to meet fully the thermal efficiency needs of consumers who rely on heating oil, kerosene, propane, and coal, as they are funded through efficiency charges that may be assessed only on electricity and natural gas providers regulated by the board;

(5)  with the growing certainty that global climate change is caused in significant part by human activities that release greenhouse gases into the atmosphere, it is particularly important to reduce the extent to which these emissions result from the inefficient use of carbon‑containing fuels, regardless of the nature of the source;

(6)  it is desirable for the state to lower the risk of high fuel prices and vulnerable supplies, while at the same time strengthening the Vermont economy by establishing a system to promote all forms of energy end‑use efficiency, comprehensive sustainable building design, and integrated renewable energy installations.

(b)  Energy Efficiency Services Fund.  The public service board shall establish an energy efficiency services fund to be managed by a fund administrator appointed by the board under this section and section 209(d)(2) of this title.  The energy efficiency services fund shall contain such sums as appropriated by the General Assembly or as otherwise provided by law.  Balances in the fund and interest earned shall be carried forward and remain in the fund at the end of each fiscal year.

(c) Use of the fund.  Funds appropriated by the legislature to the energy efficiency services fund shall be used to support the delivery of energy efficiency services to Vermont heating and process fuel consumers of oil, kerosene, propane, coal, and wood; and to carry out cost‑effective efficiency measures and reductions in greenhouse gas emissions from sectors other than, or in addition to, the regulated electricity and natural gas use sectors.  These energy efficiency services shall be provided by the energy efficiency utility appointed by the board under subsection (d) of section 209 of this title and operating within the revised utility efficiency structure established under subsections (g) and (h) of section 209 of this title.

(d)  Review of adequacy of the fund.  On or before January 15, 2011, the public service board shall report to the legislature on the expenditure of funds from the energy efficiency services fund to meet the public’s needs for energy efficiency services.  The report shall be developed through a collaborative process involving representatives of heating fuel dealers, electric and gas utilities, the expanded energy efficiency utility, the department of public service, residential and business consumer representatives, environmental advocates, entities currently engaged in delivering weatherization services, and other stakeholders identified by the board. The report shall address: the need for and availability of alternative revenue sources that may be dedicated to the energy efficiency fund; the resources dedicated to energy efficiency purposes provided through electric and natural gas rates; an evaluation of potential cost‑effective energy efficiency investments and programs designed to meet the need for energy services through efficiency or conservation in all customer classes and areas of opportunity; the amount of funding necessary in order to realize all reasonably available, cost‑effective energy efficiency savings; and other factors to assure consistency with the purposes of this section and the goals of section 202a of this title.  In the report the board shall recommend an appropriate balance among the following objectives: reducing the size of future heating and process-fuel purchases; reducing the generation of greenhouse gases; 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; providing that residential and commercial sector benefits generally shall be proportional to sector contributions to the extent such proportion can be determined; and targeting efficiency and conservation efforts to locations, markets, or customers where they may provide the greatest value.

     Second:  By striking out Sec. 2 in its entirety and inserting in lieu thereof a new Sec. 2 to read as follows:

* * * Revised Efficiency Utility Structure * * *

Sec. 2. 30 V.S.A. § 209(g) and (h) are added to read:

     (g) No later than January 1, 2009, consistent with the provisions of subsections (d) and (e) of this section, the board shall adopt a revised efficiency utility structure in order to:

(1) establish a process for the appointment and revocation of  appointment to serve as the energy efficiency utility similar to those in effect for regulated utilities in Vermont;

(2) provide for regulatory oversight by the board and the department of public service that is appropriate to the structure and purpose of the expanded energy efficiency utility;

(3) base some or all of the expanded energy efficiency utility’s compensation on verified savings in energy usage and demand, and other performance targets specified by the board and consistent with the provisions of section 202a of this title;

(4) clarify the relationship between the energy efficiency utility and the City of Burlington Electric Department and Vermont Gas Systems, Inc. under which the city and the Vermont Gas Systems, Inc. may continue to provide some or all energy efficiency services in their respective service territories if approved by the board;

(5) continue the delivery of electric efficiency programs consistent with the relevant provisions of subsection (e) of this section;

(6) expand the energy efficiency utility’s responsibilities to include thermal efficiency and the development of a comprehensive building efficiency program to promote all forms of energy end-use efficiency and comprehensive sustainable building design;

(7) provide for appropriate notice to customers on means to obtain information about energy efficiency programs approved under this section; and

(8) determine what, if any, regulatory authority over fuel dealers that the board or department of public service, or both, may require in order to implement the expansion of the energy efficiency utility’s responsibilities set forth in this section and section 203a of this title.

(h) A proposed revised efficiency utility structure shall be developed by the board consistent with the provisions of this section and in collaboration with representatives from heating fuel dealers, electric and gas utilities, the energy efficiency utility, the department of public service, consumer representatives, environmental advocates, entities currently engaged in delivering weatherization services, and other stakeholders identified by the board. The proposed revised structure shall be presented in a report to the house and senate committees on natural resources and energy, the senate committee on finance, and the house committee on ways and means with any proposed legislative changes by December 15, 2007.  The report on the proposed revised structure shall include specific recommendations for ongoing funding of the expanded fossil fuel efficiency responsibilities of the energy efficiency utility.  The recommended funding source or sources shall be adequate to provide a minimum funding level for fossil fuel efficiency of six million dollars each for the years 2009 and 2010.  The recommended funding source or sources shall be capable of providing sustained funding of the fossil fuel efficiency measures.

     Third:  By striking out Sec. 3 in its entirety and inserting in lieu thereof a new Sec. 3 to read as follows:

Sec.3. [deleted]

     Fourth:  In Sec. 4, in §209(d)(2), by striking out the date “January 1, 2008” and by inserting in lieu thereof the date January 1, 2009

(Committee vote: 5-2-0)

S. 102

An act relating to decreasing the percentage to determine a school district’s excess spending.

Reported favorably with recommendation of amendment by Senator Collins for the Committee on Education.

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

* * * Excess Spending Percentage * * *

Sec. 1.  32 V.S.A. § 5401(12) is amended to read:

(12)  “Excess spending” means:

(A)  the per‑equalized pupil amount of:

(i)  the district’s education spending, plus any amount required to be added from a capital construction reserve fund under 24 V.S.A. § 2804(b); minus

(ii)  the portion of education spending which is approved school capital construction spending or deposited into a reserve fund under 24 V.S.A. § 2804 to pay future approved school capital construction costs, including that portion of tuition paid to an independent school designated as the public high school of the school district pursuant to 16 V.S.A. § 827 for capital construction costs by the independent school which has received approval from the state board of education, using the processes for preliminary approval of public school construction costs pursuant to 16 V.S.A. § 3448(a)(2);

(B)  in excess of 125 115 percent of the statewide average district education spending per equalized pupil in the prior fiscal year, as determined by the commissioner of education.

Sec. 2.  32 V.S.A. § 5401(13) is amended to read:

(13)  “District spending adjustment” means the greater of: one or a fraction in which the numerator is the district’s education spending plus excess spending as set forth in subdivisions (A) and (B) of this subdivision (13), per equalized pupil, for the school year; and the denominator is the base education payment for the school year, as defined in section 4001 of Title 16.  Excess spending shall be added under this subdivision as follows:

(A)  One‑half of the excess spending in excess of 115 percent but not in excess of 125 percent; plus

(B)  The full amount of any excess spending in excess of 125 percent.

Sec. 3.  16 V.S.A. § 4011(h) is amended to read:

(h)  Annually, by October 1, the commissioner shall send to school boards for inclusion in town reports and publish on the department website the following information:

(1)  the statewide average district spending per equalized pupil for the current fiscal year, and 125 115 percent of that average spending; and

* * *

* * * School Construction * * *

Sec. 4.  16  V.S.A. § 3448(a)(2) is amended to read:

(2)  Approval of preliminary application.

(A)  When reviewing a preliminary application for approval, the commissioner shall consider:

(i)  regional educational opportunities and needs, including school building capacities across school district boundaries, and available infrastructure in neighboring communities;

(ii)  economic efficiencies;

(iii)  the suitability of an existing school building to continue to meet educational needs; and

(iv)  statewide educational initiatives and the strategic plan of the state board of education.

(B)  The commissioner may approve a preliminary application if:

(A)(i)  The project or part of the project fulfills a need occasioned by:

(i)(I)  conditions which threaten the health or safety of students or employees;

(ii)(II)  facilities which are inadequate to provide programs required by state or federal law or regulation;

(iii)(III)  excessive energy use resulting from the design of a building or reliance on fossil fuels or electric space heat; or

(iv)(IV)  deterioration of an existing building;

(B)(ii)  The need addressed by the project cannot reasonably be met by another means; and

(C)(iii)  The proposed type, kind, quality, size, and estimated cost of the project are suitable for the proposed curriculum and meet all legal standards.

* * * Superintendents * * *

Sec. 5.  16 V.S.A. § 241 is amended to read:

§ 241.  APPOINTMENT

(a)  Each supervisory union or supervisory district board, with the advice of the commissioner, may employ a superintendent of schools.

(b)  A superintendent shall be employed by written contract for a term not to exceed five years nor less than one year and shall work the number of hours required by contract, performing the duties designated in the contract or assigned by the board.  A superintendent of schools may be dismissed for cause or as specified in the contract of employment.

(c)  Not later than May 15 of a year in which an incumbent superintendent’s contract of employment expires, the supervisory union board shall meet to renew or act otherwise upon the superintendent’s contract.  If a supervisory union employs a superintendent, it shall be pursuant to subsection (d) of this section and the supervisory union board shall specify and assign the duties of a superintendent.  If the supervisory union board does not hire a superintendent, the board may assign any duties assigned to the superintendent under this title to the school principal or principals in the supervisory union or to other qualified persons designated by the board.

(d)(1)  When a superintendent vacancy occurs, the supervisory union board shall:

(A)  Conduct a needs assessment that addresses whether the existing boundaries of the supervisory union best serve the educational needs of students within the supervisory union and whether an alternative configuration would result in a more efficient and effective way to provide educational and support services to students.

(B)  Forward the completed needs assessment to the commissioner and request permission from the commissioner to hire a new superintendent.

(2)  Within 30 days of receiving the assessment and request from the supervisory union, the commissioner shall inform the supervisory union either that the supervisory union may proceed to hire a new superintendent or that the commissioner will schedule a hearing before the state board regarding the supervisory union’s request.

(3)  If the commissioner schedules a hearing pursuant to subdivision (2) of this subsection, the state board shall take testimony from the supervisory union and shall decide whether:

(A)  The boundaries of the existing supervisory union shall be changed;

(B)  The supervisory union shall be merged with another supervisory union; or

(C)  The boundaries of the supervisory union shall remain the same.

(4)  Any changes made to the boundaries of the supervisory union pursuant to subdivision (3) of this subsection shall take effect on July 1 of the year following the year of the state board’s decision.

* * * Qualifications of Business Managers * * *

Sec. 6.  FINANCIAL MANAGEMENT OF SCHOOL DISTRICTS AND SUPERVISORY UNIONS; MINIMUM CREDENTIALS

(a)  The commissioner of education, in consultation with the Vermont superintendents’ association, the Vermont school boards association, and the Vermont association for school business officials shall:

(1)  Examine the systems of financial management currently used by Vermont school districts and supervisory unions.

(2)  Examine the range of training and expertise currently held by persons responsible for the financial management of Vermont school districts and supervisory unions.

(3)  Examine and assess the training or credentials required of financial managers employed by public schools or school districts in other states.

(4)  Develop proposals to ensure that all school districts consistently use uniform, high‑quality financial management practices.

(b)  On or before November 15, 2007, the commissioner shall submit a report to the senate committee on education outlining the results of the examinations required in subdivisions (a)(1)–(3) of this section and recommending proposals to ensure uniform, high quality financial management practices as required in subdivision (a)(4) of this section.  The report shall include both an analysis of the budgetary impact, if any, of the commissioner’s proposals and drafts of any proposed legislation. 

* * * Mandates * * *

Sec. 7.  UNFUNDED MANDATES; REPORT

The legislative council, the joint fiscal office, the Vermont school boards association, the Vermont superintendents’ association, and the Vermont principals’ association, in consultation with school district administrators and staff, shall examine the requirements placed on local school districts resulting from legislation, regulations, and interagency cost shifts implemented since January 1, 1997.  The examination will identify and quantify associated process requirements, staffing effects, and financial implications.  Legislative council and the joint fiscal office shall prepare a report for submission to the senate committee on education on or before December 1, 2007.

* * * Special Education Cost Study * * *

Sec. 8.  SPECIAL EDUCATION SERVICES PROVISIONS; STUDY

The joint fiscal office, in consultation with the chairs of the senate and house committees on appropriations and education, the chair of the senate committee on health and welfare, the chair of the house committee on human services, the secretary of the agency of human services, the commissioners of the department of education and the department of employment and training, the Vermont superintendents’ association, the Vermont school boards association, and other members of the education community shall study how the agency of human services, the department of education, and the department of employment and training should provide for special education services for eligible persons under 22 years of age in school or out of school.  They shall also:

(1)  assess the extent to which school districts have absorbed service costs for special needs children that were historically paid by other service providers, including the extent to which:

(A)  children formerly admitted to institutional care are now being provided services through special education;

(B)  costs now found in school budgets historically were part of the budgets of nonschool agencies;

(C)  costs now found in school budgets would be attributable to nonschool agencies; and

(D)  Medicaid funds are being used to provide services;

(2)  examine the interagency agreement regarding coordination of special education services entered into pursuant to 20 U.S.C. § 1412(a)(12) to determine if services are currently provided and paid for in the most appropriate and cost-effective ways; and

(3)  report their findings and recommendations to the general assembly on or before November 1, 2007.

* * * Effective Dates * * *

Sec. 9.  EFFECTIVE DATES

(a)  Secs. 1 through 3 of this act shall take effect on January 1, 2010 and shall apply to budgets in the 2010–2011 school year.

(b)  All other sections of this act shall take effect on July 1, 2007.

and, upon passage, the title shall be:  “AN ACT RELATING TO EDUCATIONAL COST CONTAINMENT

(Committee vote: 5-0-0)

Reported without recommendation by Senator MacDonald for the Committee on Finance.

S. 118

An act relating to fiscal review of high spending districts and special education.

Reported favorably with recommendation of amendment by Senator Collins for the Committee on Education.

     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.  16 V.S.A. § 2974 is amended to read:

§ 2974.  SPECIAL EDUCATION PROGRAM; FISCAL REVIEW PANEL OF HIGH SPENDING DISTRICTS

(a)  Annually, the commissioner shall report on:

(1)  special education expenditures by school districts;

(2)  the rate of growth or decrease in special education costs, including the identity of high and low spending districts;

(3)  outcomes for special education students;

(4)  the availability of special education staff;

(5)  the consistency of special education program implementation statewide; and

(6)  the status of the education support systems in school districts; and

(7)  a statewide summary of the special education student count, including:

(A)  the percentage of the total average daily membership represented by special education students statewide and by school district;

(B)  the percentage of special education students by disability category; and

(C)  the percentage of special education students by in‑district placement, day placement, and residential placement.

(b)  The commissioner shall review high spending districts to determine Annually, but no later than October 1, based on the previous year’s expenditures, the commissioner shall notify high spending districts that they have been designated as such.  Each designated district shall respond within 60 days with an explanation of its spending to address whether:

(1)  costs could be decreased while still providing needed special education services;

(2)  the district made reasonable efforts to provide, purchase, or contract for goods or services that are the most reasonably priced yet appropriate for its students;

(3)  the district reported special education expenditures appropriately; and

(4)  all expenditures identified as special education expenditures were properly attributed to eligible students and the services for which the expenditures were made were included in the students’ individualized education plans;

(5)  the district’s special education staff‑to‑child count ratios were higher than the state average, including a breakdown of ratios by staffing categories;

(6)  the number of students in more restrictive environments such as day programs and residential placements was above the state average of special education students in those placements and, if so, information about the categories of disabilities for the students in such placements;

(7)  the district was in compliance with section 2901 of this title; and

(8)  if the district’s proportion of its average daily membership who are enrolled in special education exceeds 20 percent of the statewide average, any unusual community characteristics contributed to this condition.

(c)  The commissioner shall review low spending districts to determine the reasons for their spending patterns and whether those districts used cost‑effective strategies appropriate to replicate in other districts.

(d)  For the purposes of this section, a “high spending district” is a school district that, in the previous school year, spent at least 20 percent more than the statewide average of special education eligible costs per average daily membership.  Also for the purposes of this section, a “low spending district” is a school district that, in the previous school year, spent no more than 80 percent of the statewide average of special education eligible costs per average daily membership.

(e)  For the purpose of advising the commissioner and providing technical assistance to school districts, the state board shall appoint a fiscal review panel of seven people who have expertise in the areas of data collection and finance, and in the fields of special education, business or health and human services. The panel, at the request of a district school board, shall work with the department of education to review spending patterns and provision of special education services in the district and provide advice to the school board and staff concerning cost control mechanisms and cost‑effective practices. In addition, the panel shall make recommendations on what types of data to collect for purposes of the annual report required under subsection (a) of this section, and how the data should be analyzed.  If, after a review of a high spending district’s explanation, the commissioner finds that the explanation is not satisfactory, the commissioner shall conduct a performance review to include one or more of the following:

(1)  a review of the district’s special education student count patterns over time;

(2)  a review of the district’s compliance with section 2901 of this title and any unusual community characteristics that exist;

(3)  an on‑site review to examine a sample of special education student records and related financial and business records;

(4)  a review of the district’s compliance with federal and state requirements to provide a free appropriate public education to eligible students; and

(5)  a review of other factors.

(f)  Within 60 days of completing the performance review, the commissioner shall notify the district in writing of his or her findings and whether the results of the performance review are satisfactory or not satisfactory.  If the results of the performance review are not satisfactory to the commissioner, the commissioner and the school district jointly shall develop a remediation plan.  The district shall have two years to make progress on the remediation plan.  At the conclusion of the two years or earlier, the district shall report its progress on the remediation plan. 

(g)  Within 30 days of receipt of the district’s report of progress, the commissioner shall notify the district that its progress is either satisfactory or not satisfactory. 

(1)  If the district has failed to make satisfactory progress by the conclusion of the remediation plan, the commissioner shall notify the district that in the ensuing year the district will be subject to a withholding of up to 10 percent of its special education expenditures reimbursement under section 2963 of this chapter.

(2)  If the district has failed to make satisfactory progress by the end of the year in which a portion of the special education expenditures reimbursement was withheld under subdivision (1) of this subsection, the commissioner shall notify the district that in the ensuing year the district will be subject to a withholding of up to 20 percent of its special education expenditures reimbursement.

(3)  If the district has failed to make satisfactory progress by the end of the year in which a portion of the special education expenditures reimbursement was withheld under subdivision (2) of this subsection, the commissioner shall notify the district that the state board of education will impose a plan of remediation, which may include administration by the state of the district’s special education program. 

(4)  If the district makes satisfactory progress under any subdivision of this subsection, the commissioner shall release to the district any special education expenditures reimbursement withheld for the prior fiscal year only.

(h)  Within 10 days after receiving the commissioner’s notice under subdivisions (g)(1), (2), or (3) of this section, the district may challenge the commissioner’s decision by filing a written objection to the state board of education outlining the reasons the district believes it made satisfactory progress on the remediation plan.  The commissioner may file a written response within 10 days after the district’s objection is filed.  The board may give the district and the commissioner an opportunity to be heard.  The board’s decision shall be final.  The state shall withhold no portion of the district’s reimbursement before the state board issues its decision under this subsection.

(Committee vote: 5-0-0)

Reported without recommendation by Senator MacDonald for the Committee on Finance.

AMENDMENT TO RECOMMENDATION OF AMENDMENT OF THE COMMITTEE ON EDUCATION TO S. 118 TO BE OFFERED BY SENATOR McCORMACK

Senator McCormack moves to amend the recommendation of amendment of the Committee on Education in Sec. 1, 16 V.S.A. §2974 subsection (g) by striking out subdivisions (1), (2), (3) and (4) in their entirety and by striking out subsection (h) in its entirety.

S. 177

An act relating to child poverty in Vermont.

Reported favorably with recommendation of amendment by Senator Racine for the Committee on Health and Welfare.

The Committee recommends that the bill be amended by as follows:

First:  In Sec. 1, by striking out subdivision (b)(1)(A) and inserting in lieu thereof a new (A) to read:

(A)  the secretary of human services and the secretary of agriculture, food and markets;

Second:  In Sec. 1, by striking out subdivision (b)(1)(G) and inserting in lieu thereof the following:

(G)  one representative each from the Vermont Voices for Children, the Vermont low income advocacy council, Vermont Legal Aid, and the Vermont superintendents’ association. 

and in Sec. 1, by striking out subdivisions (b)(1)(H) and (I)

Third:  In  Sec. 1, by striking out subdivision (b)(2) and inserting in lieu thereof the following:

(2)  The council, at its first meeting, shall elect one of the legislative members as chair or two legislative members as cochairs.  The legislative council and the joint fiscal office shall provide staff support to the council.

(Committee vote: 5-0-1)

Reported favorably by Senator Bartlett for the Committee on Appropriations.

(Committee vote: 5-0-2)

S. 191

An act relating to financing, reappraisal, and infrastructure in tax increment financing districts.

(Sen. Condos for the Committee on Economic Development, Housing and General Affairs). 

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

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

Sec. 1.  24 V.S.A. § 1891 is amended to read:

§ 1891.  DEFINITIONS

When used in this subchapter:

* * *

(6)  “Related costs” means expenses, exclusive of the actual cost of constructing and financing improvements, as defined in subdivision 1751(3) of this title, that are directly related to creation of the tax increment financing district and reimbursement of sums previously advanced by the municipality for those purposes, and attaining necessary to attain the purposes and goals for which the tax increment financing district was created, as approved by the Vermont economic progress council.  As used in this subdivision, related costs are “improvements” as defined in subdivision 1751(3) of this title.

(7)  “Financing” means any type of indebtedness incurred or financial vehicles used by a municipality to pay for improvements in a tax increment financing district.

Sec. 2.  24 V.S.A. § 1893 is amended to read:

§ 1893.  PURPOSE

The purpose of tax increment financing districts is to provide revenues for improvements, located wholly or partly within that serve the district and related costs, which will stimulate development or redevelopment within the district, provide for employment opportunities, improve and broaden the tax base, or and enhance the general economic vitality of the municipality, the region, or and the state.

Sec. 3.  24 V.S.A. § 1894 is amended to read:

§ 1894.  POWER AND LIFE OF DISTRICT

(a)  The municipality may incur indebtedness against revenues of the tax increment financing districts for a period of up to 20 years following the creation of the district.  The 20‑year borrowing period of the district shall commence at 12:01 a.m. on April 1 of the year so voted.  Any indebtedness incurred during the borrowing period may be retired over any period authorized by the legislative body of the municipality under section 1898 of this title.  The district shall continue until the date and hour the indebtedness is retired.

(b)  Notwithstanding subsection (a) of this section, any district created to use education tax increment financing  A municipality that has created a tax increment financing district approved under 32 V.S.A. § 5404a(f) may:

(1)  Incur indebtedness for improvements for the district for a period of up to 20 years provided that the first indebtedness is incurred within five years following approval of the district pursuant to 32 V.S.A. § 5404a(f), and such that the 20 years for incurring indebtedness begins at the time of initial indebtedness.  Prior to requesting municipal approval to secure financing, the municipality shall provide the council with the proposed financing for approval to assure its consistency with the plan approved pursuant to 32 V.S.A. § 5404a(h).  The council shall also assure the viability and reasonableness of any proposed financing other than bonding and least‑cost financing.  A municipality that has not incurred indebtedness within five years following the creation of the district, shall request reapproval from the Vermont economic progress council in order to utilize education tax increment financing following that period.

(2)  The education tax increment may be retained for a 20‑year period,  provided that the 20‑year period commences within five years following approval of the district pursuant to 32 V.S.A. § 5404a(f).  The retention period shall commence at 12:01 a.m. April 1 of the year following the municipality’s notice to the tax department and the Vermont economic progress council.  If a municipality fails to incur debt within the five‑year period but retains the education tax increment, the municipality shall repay the increment in accordance with section 1900 of this title.

Sec. 4.  24 V.S.A. § 1896 is amended to read:

§ 1896.  TAX INCREMENTS

(a)  In each subsequent year, the listers or assessor shall include no more than the original taxable value of such the real property in the assessed valuation upon which the listers or assessor computes the rates of all taxes levied by the municipality, the school district, and every other taxing district in which the tax increment financing district is situated; but the listers or assessor shall extend all rates so determined against the entire assessed valuation of such real property for that year.  In each year for which the assessed valuation exceeds the original taxable value, the municipality treasurer shall hold apart, rather than remit to the taxing districts, that proportion of all taxes paid that year on the real property in the district which such the excess valuation bears to the total assessed valuation.  The amount so held apart each year is referred to in this act as the “tax increment” for that year.  So much of the tax increments received with respect to the district and pledged and appropriated under section 1897 of this title for the payment of debt service on bonds issued for financing for improvements and related costs shall be segregated by the municipality in a special account on its official books and records until all capital indebtedness of the district has been fully paid.  The final payment shall be reported to the lister or assessor, who shall thereafter include the entire assessed valuation of the district in the assessed valuations upon which tax rates are computed and extended and taxes are remitted to all taxing districts.

(b)  Adjustment upon reappraisal. In the event of a reappraisal of 20 percent or more of all parcels in the municipality, the value of the original taxable property in the district shall be changed by a multiplier, the denominator of which is the municipality’s education property tax grand list for the property within the district in the year prior to the reappraisal or partial reappraisal and the numerator of which shall be the municipality’s reappraised or partially reappraised education property tax grand list for the property within the districtIn such a district, the The state education property tax revenues for the district in the first year following a townwide reappraisal or partial town‑wide reappraisal shall not be less than the dollar amount of the state education property tax revenues  in the prior year.

Sec. 5.  24 V.S.A. § 1897 is amended to read:

§ 1897.  TAX INCREMENT FINANCING

(a)  The legislative body may pledge and appropriate any part or all of the tax increments received from properties contained within the tax increment financing district for the payment of the principal of and interest on bonds issued for financing of improvements contained wholly or partly within the district and for related costs in the same proportion by which the infrastructure or related costs directly serve the district at the time of approval of the project financing by the council, and in the case of infrastructure essential to the development of the district that does not reasonably lend itself to a proportionality formula, the council shall apply a rough proportionality and rational nexus test;  provided, that if any tax increment utilization is approved pursuant to 32 V.S.A. § 5404a(g) 32 V.S.A. § 5404a(f), no more than 75 percent of the state property tax increment and no less than 75 percent of the municipal tax increment may be used to service this debt.  Bonds shall only be issued if the legal voters of the municipality, by a majority vote of all voters present and voting on the question at a special or annual municipal meeting duly warned for the purpose, shall give authority to the legislative body to pledge the credit of the municipality for these purposes.  Except as otherwise provided by the municipal charter, the legal voters of a municipality, by a single vote, shall authorize the legislative body to pledge the credit of the municipality up to a specified maximum dollar amount for all debt obligations to be financed with state property tax increment pursuant to approval by the Vermont economic progress council and subject to the provisions of this section and 32 V.S.A. § 5404a.

(b)  A municipality’s pledge of credit for the purpose of issuing a bond financing improvements under this subchapter and 32 V.S.A. § 5404a shall include notice that if the tax increment received by the municipality from any property tax source is insufficient to pay the principal and interest on the debt in any year, for whatever reason, including a decrease in property value or repeal of a state property tax source, unless determined otherwise at the time of such repeal, the municipality shall remain liable for full payment of the bond principal and interest for the term of indebtedness. 

Sec. 6.  24 V.S.A. § 1898(e) is amended to read:

(e)  Prior to the resolution or ordinance of the local governing body authorizing the bonds issued financing under this section, the legislative body of the municipality shall hold one or more public hearings, after public notice, on a financial plan for the proposed improvements and related costs to be funded, including a statement of costs and sources of revenue, the estimates of assessed values within the district, the portion of those assessed values to be applied to the proposed improvements, the resulting tax increments in each year of the financial plan, the amount of bonded indebtedness or other financing to be incurred, other sources of financing and anticipated revenues, and the duration of the financial plan. A municipality that has approved the creation of a district under this chapter may designate a coordinating agency to administer the district to ensure compliance with this chapter and any other statutory or other requirements.

Sec. 7.  24 V.S.A. § 1900 is amended to read:

§ 1900.  DISTRIBUTION

In addition to all other provisions of this chapter, with respect to any tax increment financing district, any municipal tax increment received in any tax year that exceeds the amounts pledged for the payment on principal and interest on the bonds issued any financing for improvements and related costs in the district shall be used to prepay financing, placed in escrow for payment of financing, or distributed to the state education fund, the city, town, or village budget in proportion that each budget bears to the combined total of the budgets unless otherwise negotiated by the city, town, or village. Any state education tax increment received in any tax year that exceeds the amount pledged for the payment on principal and interest on the bonds issued for improvements and related costs in the district shall not be remitted to the municipality but shall be used only for prepayment of principal and interest on the bonds issued, placed in escrow for bond payment, or otherwise used for defeasance of the bonds.

Sec. 8.  32 V.S.A. § 5404a(f), (g), and (h) are amended and (j) and (k) are added to read:

(f)  A municipality that establishes a tax increment financing district under subchapter 5 of chapter 53 of Title 24 shall collect all property taxes on properties contained within the district and apply up to 75 percent of the tax increment as defined in 24 V.S.A. § 1896 to repayment of debt issued to finance financing of the improvements and related costs for up to 20 years pursuant to 24 V.S.A. § 1894, if approved by the Vermont economic progress council pursuant to this section.

(g)  Any allocation approved pursuant to subsection (e) of this section or utilization of tax increment approved under subsection (f) of this section shall be in addition to any other payments to the municipality under chapter 133 of Title 16.  Allocations Except as otherwise provided in this section or chapter 53 of Title 24, allocations and tax increment utilizations approved pursuant to subsections (e) and (f) of this section shall affect the education property tax grand list and the municipal grand list of the municipality under this chapter beginning April 1 of the year following approval and shall remain available to the municipality for the full period authorized and restricted only to the extent that the real property development giving rise to the increased value to the grand list fails to occur within the authorized period.

(h)  Criteria for approval.  To approve utilization of incremental revenues pursuant to subsection (f) of this section, the Vermont economic progress council shall do all the following:

(1)  Review each application to determine that the new real property development would not have occurred or would have occurred in a significantly different and less desirable manner but for the proposed utilization of the incremental tax revenues.  A district created in a designated growth center under 24 V.S.A. § 2793c shall be deemed to have complied with this subdivision.  The review shall take into account:

* * *

(C)  The amount of additional revenue expected to be generated as a result of the proposed development; the percentage of that revenue that shall be paid to the education fund; the percentage that shall be paid to the municipality; and the percentage of the revenue paid to the municipality that shall be used to pay the municipal tax increment bonds financing incurred for development of the tax increment financing district.

(2)  Process requirements.  Determine that each application meets all of the following four requirements:

* * *

(B)  The municipality has developed a tax increment financing district plan, including: a project description; a development financing plan; a pro forma projection of expected costs and a list of previously advanced related costs to be reimbursed; a projection of revenues; a statement and demonstration that the project would not proceed without the allocation of a tax increment; a projection of types and amount of expected financing; evidence that the municipality is actively seeking or has obtained other sources of funding and investment; and a development schedule that includes a list, a cost estimate, and a schedule for public improvements and projected private development to occur as a result of the improvements.

* * *

(4)  Project criteria.  Determine that the proposed development within a tax incentive increment financing district will accomplish at least three of the following five criteria:

* * *

(C)  The project will affect the mitigation remediation and redevelopment of a brownfield located within the district.  For the purposes of this section, “brownfield” means an area in which a hazardous substance, pollutant, or contaminant is or may be present, and that situation is likely to complicate the expansion, development, redevelopment, or reuse of the property.

* * *

(j)  A municipality with an active tax increment financing district shall:

(1)  Provide VEPC and the tax department with all information required for VEPC and the tax department to issue the report required by subsection (i) of this section on or before December 1 each year.

(2)  Report actual investment, financing activity, escrow status, and “related costs” accounting to VEPC according to the current law municipal audit cycle in 24 V.S.A. § 1681.

(k)  The state auditor of accounts shall review and audit all active tax increment financing districts every three years.

Sec. 9.  Sec. 2i of No. 184 of the Acts of the 2005 Adj. Sess. (2006) is amended to read:

Sec. 2i.  TAX INCREMENT FINANCING DISTRICTS; CAP

Notwithstanding any other provision of law, the Vermont economic progress council may not approve the use of education tax increment financing for more than ten tax increment financing districts and no more than one newly created tax increment financing district in any municipality within the period of five state fiscal years beginning July 1, 2006 2007.  Thereafter no tax increment financing districts may be approved without further authorization of by the General Assembly general assembly.

Sec. 10.  EFFECTIVE DATE

This act shall take effect on July 1, 2007, except 24 V.S.A. § 1896(b) which shall be retroactively effective to July 1, 2006.

(Committee vote: 7-0-0)

Favorable with Proposal of Amendment

H. 360

An act relating to employment protection and training period for Vermont national guard members.

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

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

Sec. 1.  21 V.S.A. § 491(a) is amended to read:

(a)  Any duly qualified member of the “reserve components of the armed forces,” of the ready reserve, or an organized unit of the national guard who leaves a position other than a temporary position in the employ of any employer, for state active duty or to receive military training with the armed forces of the United States and who notifies the employer of the date of departure and date of return for purposes of military training 30 days prior to the date of departure or as soon as practical after being called into state service by the governor shall be granted absence with leave with or without pay.  If the employee provides evidence of the satisfactory completion of the training immediately upon return and is still qualified to perform the duties for such position shall upon request be entitled to leaves of absence for a total of 15 days in any calendar year for the purpose of engaging in military drill, training, or other temporary duty under military authority.  A leave of absence shall be with or without pay as determined by the employer.  Upon completion of the military drill, training, or other temporary duty under military authority, the a full-time employee shall be reinstated in that position with the same status, pay, and seniority, including seniority that accrued during the period of absence.

(Committee Vote: 5-0-0)

(For House amendments, see House Journal for February 28, 2007, page 257.)

ORDERED TO LIE

S. 70

An act relating to empowering municipalities to regulate the application of pesticides within their borders.

PENDING ACTION:  Second reading of the bill.

S. 194

An act relating firefighters and cancer caused by employment.

PENDING ACTION:  Second reading of the bill.

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.

Robert Britt of South Burlington - Member of the Vermont Economic Development Authority - By Sen. Condos for the Committee on Finance.  (1/25)

David E. L. Brown of Shelburne - Member of the Board of Libraries - By Sen. Giard for the Committee on Education.  (1/31)

John Rosenthal of Charlotte - Member of the Board of Libraries - By Sen. Doyle for the Committee on Education.  (1/31)

Kenneth Gibbons of Hyde Park - Member of the Vermont Educational and Health Buildings Finance Agency - By Sen. McCormack for the Committee on Finance.  (2/2)

David R. Coates of Colchester - Member of the Municipal Bond Bank - By Sen. Condos for the Committee on Finance.  (2/21)

Paul. Beaulieu of Manchester Center - Member of the Vermont Housing Finance Agency - By Sen. Maynard for the Committee on Finance.  (2/21)

Susan Davis of Shelburne - Member of the Travel Information Council - By Sen. Mazza for the Committee on Transportation.  (3/13)

Jireh Billings of Bridgewater - Member of the Capitol Complex Commission - By Sen. Campbell for the Committee on Institutions.  (3/14)

John LaBarge of South Hero - Member of the Travel Information Council - By Sen. Mazza for the Committee on Transportation.  (3/21)

Susan K. Blair of Colchester - Alternate Member of the Parole Board - By Sen. Mazza for the Committee on Institutions.  (3/23)

William J. Pettengill of Guilford - Member Parole Board - By Sen. Coppenrath for the Committee on Institutions.  (3/23)

Jeffrey Larkin of Duxbury - Member of the Travel Information Council - By Sen. Scott for the Committee on Transportation.  (3/28)

Barbara Zander of St. Johnsbury - Family Court Magistrate - By Sen. Cummings for the Committee on Judiciary.  (4/4)

PUBLIC HEARINGS

Tuesday, April 3, 2007 - Room 11 - 6:00-9:00 - Re:  Public Transit - House Committee on Transportation.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us