Download this document in MS Word format


AutoFill Template

Senate Calendar

friday, april 27, 2007

115th DAY OF BIENNIAL SESSION

TABLE OF CONTENTS

                                                                                                                Page No.

ACTION CALENDAR

UNFINISHED BUSINESS OF WEDNESDAY, APRIL 25, 2007

Second Reading

Favorable with Proposal of Amendment

H. 518    Relating to technical tax amendments............................................... 1072

                        Finance Committee Report.................................................... 1072

UNFINISHED BUSINESS OF THURSDAY, APRIL 26, 2007

House Proposal of Amendment

S. 173     Awarding high school diplomas to veterans of the Vietnam era......... 1073

NEW BUSINESS

Third Reading

H. 274    Relating to adult foster care............................................................. 1073

H. 368    Relating to regulation of professions and occupations....................... 1073

H. 380    Relating to the regulation of health care facilities............................... 1073

Second Reading

Favorable

H. 88      Relating to education property tax rate adjustments.......................... 1073

                        Finance Committee Report.................................................... 1073

H. 529    Establishing the town line between Burke and Kirby........................ 1073

                        Government Operations Committee Report............................ 1073

Favorable with Proposal of Amendment

H. 78      Reconsideration or rescission of votes in local elections.................... 1073

                        Government Operations Committee Report............................ 1074

H. 91      Relating to the Rozo McLaughlin farm to school program................. 1074

                        Education Committee Report................................................. 1074

H. 229    Corrections and clarifications to the health care affordability act....... 1074

                        Health and Welfare Committee Report................................... 1075

                        Finance Committee Report.................................................... 1082

JRS 24   Relating to federal “fast track” process for congressional review of ..........                   international trade agreements       1083

                        Ec. Dev., Housing and General Affairs Committee Report...... 1083

Senate Resolution for Action

S.R. 17   National Victims of Crime Week in Vermont................................... 1084

NOTICE CALENDAR

Favorable with Proposal of Amendment

H. 113    Relating to all-age access for tobacco cessation programs................ 1085

                        Health and Welfare Committee Report................................... 1085

H. 520    Conservation of energy & generation of electricity........................... 1085

                        Natural Resources and Energy Committee Report.................. 1085

                        Finance Committee Report.................................................... 1110

H. 531    Relating to ensuring success in health care reform............................. 1156

                        Health and Welfare Committee Report................................... 1156

House Proposals of Amendment

S. 54       Relating to motor vehicle wreckers.................................................. 1177

S. 78       Cost of picking up & hauling milk paid by the purchaser.................. 1177

S. 91       Relating to dept. of banking, ins., securities & health care admin....... 1179

ORDERED TO LIE

S. 70       Empowering municipalities to regulate application of pesticides......... 1196


S. 102     Decreasing percentage to determine school dist. excess spending..... 1196

S. 118     Fiscal review of high spending districts & special education.............. 1196

Concurrent Resolutions for Action

(For text of Resolutions, see Calendar Addendum for April 26, 2007)

HCR 123  In memory of Elizabeth Daley Jeffords............................................ 203

HCR 124  Congratulating the Vermont Frost Heaves....................................... 204




 

ORDERS OF THE DAY

ACTION CALENDAR

UNFINISHED BUSINESS OF WEDNESDAY, APRIL 25, 2007

Second Reading

Favorable with Proposal of Amendment

H. 518

An act relating to technical tax amendments.

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

The Committee recommends that the Senate propose to the House to amend the bill as follows:

     First:  By striking out Sec. 4 in its entirety and inserting in lieu thereof a new Sec. 4 to read as follows:

Sec. 4.  32 V.S.A. § 5941(a) and (b) are amended to read:

(a)  The court shall include in any judgment a notice that any unpaid amounts shall amount of a fine, penalty, surcharge, or fee, but not damages, may be certified to the department for a setoff on the judgment debtor’s income tax refund and property tax adjustment under chapter 154 of this title, and the notice shall explain how the judgment debtor may challenge the certification.

(b) Sections 5934(c) and 5936 of this title, relating to the procedure for contesting the debt, shall not apply to a court seeking information setoff from a judgment debtor under this subchapter.

     Second:  In Sec. 9, 32 V.S.A., §6061 in the first line of subsection (14), by striking through the word "municipality's" as follows:  "municipality's"

     Third:  In Sec. 9, 32 V.S.A. §6061 subsection (14) by striking out the word “subdivsion” and inserting in lieu thereof subdivision

(Committee Vote: 6-0-1)

(No House amendments)


UNFINISHED BUSINESS OF THURSDAY, APRIL 26, 2007

S. 173

An act relating to awarding high school diplomas to veterans of the Vietnam era.

The House proposes to the Senate to amend the bill in Sec. 1, by striking the following: from February 28, 1961 through May 7, 1975

NEW BUSINESS

Third Reading

H. 274

An act relating to adult foster care.

H. 368

An act relating to the regulation of professions and occupations.

H. 380

An act relating to the regulation of health care facilities.

Second Reading

Favorable

H. 88

An act relating to education property tax rate adjustments.

Reported favorably by Senator Condos for the Committee on Finance.

(Committee vote: 7-0-0)

(For House amendments, see House Journal for February 15, 2007, page 191.)

H. 529

An act relating to establishing the town line between Burke and Kirby.

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

(Committee vote: 5-0-0)

(No House amendments)

Favorable with Proposal of Amendment

H. 78

An act relating to reconsideration or rescission of votes in local elections.

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

The Committee recommends that the Senate propose to the House to amend the bill in Sec. 1, 17 V.S.A. § 2661, by striking out subsection (e) in its entirety and inserting in lieu thereof a new subsection (e) to read:

(e)  At a meeting duly warned for the purpose, the voters of a municipality may require that a majority vote in favor of reconsideration or rescission shall not be effective unless the number of votes cast in favor of reconsideration or rescission exceeds a certain percentage of the number of votes cast for the prevailing side at the original meeting.  A vote to require a percentage, or increase or decrease a percentage, shall be in substantially the following form:  “Shall the (name of municipality) require that the percentage of votes cast in favor of reconsideration or rescission exceed (percentage) of the number of votes cast for the prevailing side at the original meeting?”  Once the voters of a municipality have voted to require a percentage, that percentage shall remain in effect until the voters of the municipality vote to increase or decrease the percentage.

(Committee Vote: 5-0-0)

(For House amendments, see House Journal for April 4, 2007, page 501.)

H. 91

An act relating to the Rozo McLaughlin farm-to-school program.

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

The Committee recommends that the Senate propose to the House to amend the bill in Sec. 2, 6 V.S.A. § 4722, by designating the existing paragraph as subsection (a) and by adding a subsection (b) to read as follows:

(b)  For the purposes of this section and section 4723 of this title, the secretary may provide funds to one or more technical assistance providers to provide farm to school education and teacher trainings to more school districts and to assist the secretary and commissioner of education to carry out farmer and food service worker trainings.

(Committee Vote: 5-0-0)

(For House amendments, see House Journal for April 4, 2007, page 504.)

H. 229

An act relating to corrections and clarification to the health care affordability act of 2006 and related legislation.

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

The Committee recommends that the Senate propose to the House to amend the bill as follows:

First:  By striking out Sec. 11 in its entirety and inserting in lieu thereof a new Sec. 11 to read:

Sec. 11.  33 V.S.A. § 1974(b) and (c) are amended to read:

(b)  VHAP‑eligible premium assistance.

* * *

(3)  The agency shall determine whether it is cost‑effective to the state to enroll an individual in an approved employer‑sponsored insurance plan with the premium assistance under this subsection as compared to enrolling the individual in the Vermont health access plan. If the agency determines that it is cost‑effective, the individual shall be required to enroll in the approved employer‑sponsored plan as a condition of continued assistance under this section or coverage under the Vermont health access plan, except that dependents who are children of eligible individuals shall not be required to enroll in the premium assistance program.  Notwithstanding this requirement, an individual shall be provided benefits under the Vermont health access plan until the next open enrollment period offered by the employer or insurer.  The agency shall not consider the medical history, medical conditions, or claims history of any individual for whom cost‑effectiveness is being evaluated.

(c)  Uninsured individuals; premium assistance.

* * *

(5)  The agency shall determine whether it is cost‑effective to the state to require the individual to purchase the approved employer‑sponsored insurance plan with premium assistance under this subsection instead of Catamount Health established in section 4080f of Title 8 with assistance under subchapter 3a of chapter 19 of this title.  If providing the individual with assistance to purchase Catamount Health is more cost‑effective to the state than providing the individual with premium assistance to purchase the individual’s approved employer‑sponsored plan, the state shall provide the individual the option of purchasing Catamount Health with assistance for that product.  An individual may purchase Catamount Health and receive Catamount Health assistance until the approved employer‑sponsored plan has an open enrollment period, but the individual shall be required to enroll in the approved employer‑sponsored plan in order to continue to receive any assistance.  The agency shall not consider the medical history, medical conditions, or claims history of any individual for whom cost‑effectiveness is being evaluated.

Second:  By striking out Sec. 24 in its entirety and inserting in lieu thereof new Secs. 24 and 24a to read:

Sec. 24.  22 V.S.A. § 903 is added to read:

§ 903.  HEALTH INFORMATION TECHNOLOGY

(a)  The commissioner shall facilitate the development of a statewide health information technology plan that includes the implementation of an integrated electronic health information infrastructure for the sharing of electronic health information among health care facilities, health care professionals, public and private payers, and patients.  The plan shall include standards and protocols designed to promote patient education, patient privacy, physician best practices, electronic connectivity to health care data, and, overall, a more efficient and less costly means of delivering quality health care in Vermont.

(b)  The health information technology plan shall:

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

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

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

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

(5)  recommend funding mechanisms for the ongoing development and maintenance costs of a statewide health information system, including funding options and an implementation strategy for a loan and grant program;

(6)  incorporate the existing health care information technology initiatives in order to avoid incompatible systems and duplicative efforts;

(7)  integrate the information technology components of the blueprint for health established in chapter 13 of Title 18, the global clinical record, and all other Medicaid management information systems being developed by the office of Vermont health access, information technology components of the quality assurance system, the program to capitalize with loans and grants electronic medical record systems in primary care practices, and any other information technology initiatives coordinated by the secretary of administration pursuant to section 2222a of Title 3; and

(8)  address issues related to data ownership, governance, and confidentiality and security of patient information.

(c)(1)  The commissioner shall contract with the Vermont information technology leaders (VITL), a broad‑based health information technology advisory group that includes providers, payers, employers, patients, health care purchasers, information technology vendors, and other business leaders, to develop the health information technology plan, including applicable standards, protocols, and pilot programs.  In carrying out their responsibilities under this section, members of VITL shall be subject to conflict of interest policies established by the commissioner to ensure that deliberations and decisions are fair and equitable.

(2)  VITL shall be designated in the plan to operate the exclusive statewide health information exchange network for this state, notwithstanding the provisions of subsection (g) of this section requiring the recommendation of the commissioner and the approval of the general assembly before the plan can take effect.  Nothing in this section shall impede local community providers from the exchange of electronic medical data.

(d)  The following persons shall be members of VITL:

(1)  the commissioner, who shall advise the group on technology best practices and the state’s information technology policies and procedures, including the need for a functionality assessment and feasibility study related to establishing an electronic health information infrastructure under this section;

(2)  the director of the office of Vermont health access or his or her designee;

(3)  the commissioner of health or his or her designee; and

(4)  the commissioner of banking, insurance, securities, and health care administration or his or her designee.

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

(1)  Objectives of the pilot program shall include:

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

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

(2)  Objectives of the pilot program may include:

(A)  determining whether and how best to expand the pilot program on a statewide basis;

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

(C)  ensuring patient data confidentiality at all times.

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

(g)  On or before January 1, 2007, VITL shall submit to the commission on health care reform, the secretary of administration, the commissioner, the commissioner of banking, insurance, securities, and health care administration, the director of the office of Vermont health access, the senate committee on health and welfare, and the house committee on health care a preliminary health information technology plan for establishing a statewide, integrated electronic health information infrastructure in Vermont, including specific steps for achieving the goals and objectives of this section.  A final plan shall be submitted July 1, 2007.  The plan shall include also recommendations for self‑sustainable funding for the ongoing development, maintenance, and replacement of the health information technology system.  Upon recommendation by the commissioner and approval by the general assembly, the plan shall serve as the framework within which certificate of need applications for information technology are reviewed under section 9440b of Title 18 by the commissioner.

(h)  Beginning January 1, 2006, and annually thereafter, VITL shall file a report with the commission on health care reform, the secretary of administration, the commissioner, the commissioner of banking, insurance, securities, and health care administration, the director of the office of Vermont health access, the senate committee on health and welfare, and the house committee on health care.  The report shall include an assessment of progress in implementing the provisions of this section, recommendations for additional funding and legislation required, and an analysis of the costs, benefits, and effectiveness of the pilot program authorized under subsection (e) of this section, including, to the extent these can be measured, reductions in tests needed to determine patient medications, improved patient outcomes, or reductions in administrative or other costs achieved as a result of the pilot program.  In addition, VITL shall file quarterly progress reports with the secretary of administration and the health access oversight committee and shall publish minutes of VITL meetings and any other relevant information on a public website.

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

(j)  The commissioner, in consultation with VITL, may seek any waivers of federal law, of rule, or of regulation that might assist with implementation of this section.

(k)  VITL, in collaboration with the commissioner, health insurers, the Vermont Association of Hospitals & Health Systems, Inc., and other departments and agencies of state government, shall establish a loan and grant program to provide for the capitalization of electronic health records systems in blueprint communities and at primary care practices serving low income Vermonters.  Health information technology acquired under a grant or loan authorized by this section shall comply with data standards for interoperability adopted by VITL and the state health information technology plan.  An implementation plan for this loan and grant program shall be incorporated into the state health information technology plan.

Sec. 24a.  HEALTH INFORMATION TECHNOLOGY INTERIM FUND AND ELECTRONIC HEALTH RECORD PILOT PROGRAM

(a)  Purpose.  It is the intent of the general assembly that use of electronic health records for all Vermonters shall be promoted and encouraged.  The general assembly recognizes that the use and sharing of electronic health records have the potential to improve the quality of care delivered to Vermonters and, in the long term, to help contain increases in the costs of medical care.  Since many providers, especially primary care providers serving low income Vermonters, lack the capital to acquire the information technology necessary to implement electronic health records for their patients, a financing program is needed to facilitate the adoption of electronic health record use by providers. 

(b)  For the purposes of this section:

(1)  “Commissioner” shall mean the commissioner of the department of information and innovation.

(2)  “Department” shall mean the department of information and innovation.

(3)  “Pilot site” shall mean a blueprint community and primary care providers serving low income Vermonters in other communities. 

(c)  Vermont information technology leaders shall establish a health information technology fund which shall be used only during the duration of the electronic health record pilot program described in this section.  The interim fund shall be used for the purposes of:

(1)  encouraging and facilitating the development and utilization of electronic health records by pilot sites; and

(2)  promoting the sharing of electronic health records using the Vermont health information infrastructure created and managed by the Vermont health information technology leaders. 

(d)  VITL and the secretary of administration shall engage in activities designed to achieve the goal of raising at least $1 million for the interim fund created by this section and shall seek to raise these funds from a broad range of stakeholders who would benefit from electronic health records, including commercial health insurers, in relation to the number of insured and self‑insured lives each services in Vermont, the Vermont Association of Hospitals & Health Systems, Inc., self‑insured employers, other payers, and other sources.  On or before September 1, 2007, VITL and the secretary of administration shall report the results of the fundraising activities to the house committee on health care, the senate committee on health and welfare, and the commission on health care reform. 

(e)  On or before October 1, 2007, VITL shall issue a request for proposals:

(1)  to provide computer software or systems, or both, in connection with the development and implementation of a system to enable electronic health records use by pilot sites; and

(2)  for implementation‑consulting vendors to assist pilot sites with related training and system configuration support and upgrades to enable the implementation and use of electronic health record systems.  

(f)  On or before November 1, 2007, VITL shall establish criteria and award conditions for the selection of pilot sites. 

(g)  On or before January 1, 2008, VITL shall commence awarding pilot sites licenses to implement electronic health record systems, making use of the vendors selected in the process described in subsection (e) of this section. 

(h)  VITL shall include in the annual report required pursuant to section 9417 of Title 18 information concerning the interim fund and pilot program created pursuant to this section and shall additionally provide that report to the commissioner of health.  Information in the report concerning this program shall include:

(1)  an assessment of progress in implementing the provisions of this section including the acceptance of electronic health record use by providers, patients, and payers;

(2)  recommendations for additional funding and legislation required; and

(3)  an analysis of the costs, benefits, and effectiveness of the health information technology fund.   

(i)  VITL may use a portion of the interim fund for its costs in implementing and managing the electronic health record pilot program.

Third:  In Sec. 27, 21 V.S.A. § 2002(6) by striking out the figure “25” and inserting in lieu thereof the figure 30

Fourth:  By adding four new sections to be numbered Secs. 32, 33, 34 and 35 to read as follows:

Sec. 32.  3 V.S.A. § 2222a(c)(2) is amended to read:

(2)  The Vermont health information technology project pursuant to section 9417 of Title 18 903 of Title 22.

Sec. 33.  18 V.S.A. § 9416(a) is amended to read: 

(a)  The commissioner shall contract with the Vermont Program for Quality in Health Care, Inc. to implement and maintain a statewide quality assurance system to evaluate and improve the quality of health care services rendered by health care providers of health care facilities, including managed care organizations, to determine that health care services rendered were professionally indicated or were performed in compliance with the applicable standard of care, and that the cost of health care rendered was considered reasonable by the providers of professional health services in that area.  The commissioner shall ensure that the information technology components of the quality assurance system are incorporated into and comply with the statewide health information technology plan developed under section 9417 of this title 903 of Title 22 and any other information technology initiatives coordinated by the secretary of administration pursuant to section 2222a of Title 3.

Sec. 34.  18 V.S.A. § 9437 is amended to read: 

§ 9437.  CRITERIA

A certificate of need shall be granted if the applicant demonstrates and the commissioner finds that:

* * *

(7)  if the application is for the purchase or lease of new health care information technology, it conforms with the health information technology plan established under section 9417 of this title 903 of Title 22, upon approval of the plan by the general assembly.

Sec. 35.  18 V.S.A. § 9440b is amended to read: 

§ 9440b.  INFORMATION TECHNOLOGY; REVIEW PROCEDURES

Notwithstanding the procedures in section 9440 of this title, upon approval by the general assembly of the health information technology plan developed under section 9417 of this title 903 of Title 22, the commissioner shall establish by rule standards and expedited procedures for reviewing applications for the purchase or lease of health care information technology that otherwise would be subject to review under this subchapter.  Such applications may not be granted or approved unless they are consistent with the health information technology plan and the health resource allocation plan.  The commissioner’s rules may include a provision requiring that applications be reviewed by the health information advisory group authorized under subsection 9417(c) of this title section 903 of Title 22.  The advisory group shall make written findings and a recommendation to the commissioner in favor of or against each application.

(Committee Vote: 6-0-0)

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

The Committee recommends that the Senate propose to the House to amend the bill by as recommended by the Committee on Health and Welfare and recommend that the bill be further amended in Sec. 27, 21 V.S.A. § 2002(3) by striking out the following:  “under either a private or a public plan” and inserting in lieu thereof the following:  under either a private plan or any public plan that is not supported by state funding

(Committee Vote: 6-0-0)

(For House amendments, see House Journal for April 4, 2007, page 507.)

J.R.S. 24

Joint resolution relating to the federal “fast track” process for congressional review of international trade agreements.

Reported favorably with recommendation of amendment by Senator Illuzzi for the Committee on Economic Development, Housing and General Affairs.

The Committee recommends that the resolution  be amended by striking out all after the title and inserting in lieu thereof the following:

Whereas, the State of Vermont benefits greatly from international trade, which is responsible for a greater percentage of its gross state product than is the case for any other state, and

Whereas, to a considerable degree, the state’s success in international trade is tied to the fact that the character, beauty, and environment of the state itself, the Vermont brand and Vermont products are internationally recognized to be of high quality, and

Whereas, Vermont laws developed by generations of sensible and independent civic-minded citizen legislators are a major reason why the products produced within the state achieve that quality and why the state itself remains attractive and open to foreign visitors, service providers, and investors alike, and

Whereas, as international trade has evolved in recent years as supervised by Congress under the so-called “fast track” authority by which it reviews international trade agreements, which is due to expire on June 30, 2007, significant and troubling questions have developed with respect to the continuing ability of states to retain their character, environmental controls, and quality of life, and to assure the continued quality of their products, and

Whereas, despite the variety of significant impacts that trade and investment agreements have been demonstrated to have on state governance, taxation authority, environmental protection, land use regulation, and many other areas of intense state interest, states and local governments have not yet received assurances that their concerns will be adequately addressed in any “fast track” renewal process, now therefore be it

Resolved by the Senate and House of Representatives:

That “trade promotion authority” should be amended by Congress to provide states with meaningful and substantive input and involvement in the negotiation of trade agreements, and be it further

Resolved:  That federal legislation should clarify the negotiating agenda of the United States Trade Representative in a way that establishes a much stronger role for states, which in turn must be prepared to do their part to communicate with the federal executive branch and the Congress with respect to state concerns, and be it further

Resolved:  That the following requirements must be included in any trade legislation governing future international trade agreements:

1.  Each state must be provided with better economic data and trade impact‑related information from the federal government, together with resources for its own studies regarding the likely effects of a particular trade agreement on the laws, people, businesses, and natural resources of the state, while trade agreements are being developed;

2.  Each state desiring to do so must have meaningful input and an actual seat at the table, regarding provisions trade agreements should include and subjects they should address;

3.  Federal legislation on trade, in general, and agreements entered under that authority must be revised to acknowledge explicitly that facilitating international trade is not the only goal of federal policy, and must be crafted to assure that other important state and local values are accorded due consideration and respect, and be it further

Resolved:  That the Secretary of State be directed to send a copy of this resolution to Vermont Governor James H. Douglas, Vermont’s Congressional delegation, the National Conference of State Legislatures, the legislative leaders of the other 49 states, and the United States Trade Representative.

(Committee vote: 5-0-0)

Senate Resolution for Action

S. R. 17

Senate resolution honoring victims of crime and designating the week of April 22-29 as National Victims of Crime Week in Vermont.

(For text of Resolution, see Senate Journal for April 26, 2007, page 634)


NOTICE CALENDAR

Favorable with Proposal of Amendment

H. 113

An act relating to all-age access for tobacco cessation programs.

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

The Committee recommends that the Senate propose to the House to amend the bill by in Sec. 1, 18 V.S.A. § 9503(b) by striking out “by Quitline” and inserting in lieu thereof a quitline approved by VDH

(Committee Vote: 6-0-0)

(For House amendments, see House Journal for February 6, 2007, page 146.)

H. 520

An act relating to the conservation of energy and increasing the generation of electricity within the state by use of renewable resources.

Reported favorably with recommendation of proposal of amendment by Senator Lyons for the Committee on Natural Resources.

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:

* * * Renewable Energy Goal * * *

Sec. 1.  10 V.S.A. § 579 is added to read:

§ 579.  25 BY 25 STATE GOAL

(a)  It is a goal of the state, by the year 2025, to produce 25 percent of the energy consumed within the state through the use of renewable energy sources, particularly from Vermont’s farms and forests.

(b)  By no later than January 15, 2008, the commissioner of public service, in consultation with the secretary of agriculture, food and markets and the commissioner of forests, parks and recreation, shall present to the committees on agriculture and natural resources and energy of the general assembly a plan for attaining this goal.  Plan updates shall be presented no less frequently than every three years, thereafter, and a progress report shall be due annually on January 15.

(c)  By no later than January 15, 2008, the department of public service shall present to the legislative committees on natural resources and energy an updated comprehensive energy plan which shall give due consideration to the public engagement process required under 30 V.S.A. § 254 and under Sec. 2 of No. 208 of the Acts of the 2005 Adj. Sess. (2006).  By that time, the department of public service shall incorporate plans adopted under this section into the state comprehensive energy plan adopted under 30 V.S.A. § 202b.

* * * Act 250 Definition of Farming * * *

Sec. 2.  10 V.S.A. § 6001(22) is amended to read:

(22)  “Farming” means:

(A)  the cultivation or other use of land for growing food, fiber, Christmas trees, maple sap, or horticultural and orchard crops; or

(B)  the raising, feeding, or management of livestock, poultry, fish, or bees; or

(C)  the operation of greenhouses; or

(D)  the production of maple syrup; or

(E)  the on‑site storage, preparation and sale of agricultural products principally produced on the farm; or

(F)  the on‑site production and sale of fuel or power from agricultural products or wastes principally produced on the farm; or

(G)  the raising, feeding, or management of four or more equines owned or boarded by the farmer, including training, showing, and providing instruction and lessons in riding, training, and the management of equines.

* * * Agriculture Development Funds * * *

Sec. 3.  6 V.S.A. § 4710(g)(3) is amended to read:

(3)  Assistance from the agricultural economic development special account shall be available for:

(A)  Business and technical assistance for research and planning to aid a farmer or a group of farmers in developing business enterprises that harvest biomass, convert biomass to energy, or produce biofuel;

(B)  Implementation Cost‑effective implementation assistance to leverage other sources of capital to assist a farmer or group of farmers in purchasing equipment, technology, or other assistance to produce agricultural energy, harvest biomass, or convert biomass into energy, or enable installation and usage of wind, solar, or other technology that relies on a resource that is being consumed at a harvest rate at or below its natural regeneration rate pursuant to 30 V.S.A. § 8002(2); and

* * *

* * * Commercial Building Energy Standards * * *

Sec. 4.  21 V.S.A. § 268 is amended to read:

§ 268.  COMMERCIAL BUILDING ENERGY STANDARDS

(a)  Definitions.  For purposes of this subchapter, “commercial buildings” means all buildings that are not residential buildings as defined in subdivision 266(a)(2) of this title or farm structures as defined in 24 V.S.A. § 4413.

(1)  The following commercial buildings, or portions of those buildings, separated from the remainder of the building by thermal envelope assemblies complying with this section shall be exempt from the building thermal envelope provisions of the standards:

(A)  Those that do not contain conditioned space.

(B)  Those with a peak design rate of energy usage less than an amount specified in the commercial building energy standards (CBES) adopted under subsection (b) of this section.

(2)  These standards shall not apply to equipment or portions of building energy systems that use energy primarily to provide for industrial, or manufacturing, or commercial processes.

(b)  Adoption of commercial building energy standards.  Commercial building construction with respect to which no state or any local building permit application or application for construction plan approval by the commissioner of public safety pursuant to 20 V.S.A. chapter 173 has been submitted on or after January 1, 2007 shall be designed and constructed in substantial compliance with the standards contained in the 2005 Vermont Guidelines for Energy Efficient Commercial Construction, as those standards may be amended by administrative rule adopted by the commissioner of public service.

(c)  Revision and interpretation of energy standards.  On or about January 1, 2009, and at least every three years thereafter, the commissioner of public service shall amend and update the CBES by means of administrative rules adopted in accordance with 3 V.S.A. chapter 25.  At least a year prior to final adoption of each required revision of the CBES, the department of public service shall convene an advisory committee to include one or more mortgage lenders,; builders,; building designers,; architects; civil, mechanical, and electrical engineers; utility representatives,; and other persons with experience and expertise, such as consumer advocates and energy conservation experts.  The advisory committee may provide the commissioner of public service with additional recommendations for revision of the CBES.

(1)  Any amendments to the CBES shall be:

(A)  Consistent with duly adopted state energy policy, as specified in 30 V.S.A. § 202a.

(B)  Evaluated relative to their technical applicability and reliability.

(2)  Each time the CBES are amended by the commissioner of public service, the amended CBES shall become effective upon a date specified in the adopted rule, a date that shall not be less than three months after the date of adoption.  Persons submitting an application for any state or local permit authorizing commercial construction, or an application for construction plan approval by the commissioner of public safety pursuant to 20 V.S.A. chapter 173, before the effective date of the amended CBES shall have the option of complying with the applicable provisions of the earlier or the amended CBES.  After the effective date of the original or the amended CBES, any person submitting such an application for any state or local permit authorizing commercial construction in an area subject to the CBES shall comply with the most recent version of the CBES.

(3)  The advisory committee convened under this subsection, in preparing for the CBES updates, shall advise the department of public service with respect to the coordination of the CBES amendments with existing and proposed demand‑side management programs offered in the state.

(4)  The commissioner of public service is authorized to adopt rules interpreting and implementing the CBES.

(5)  The commissioner of public service may grant written variances or exemptions from the CBES or rules adopted under this section where strict compliance would entail practical difficulty or unnecessary hardship, or is otherwise found unwarranted, provided that:

(A)  Any such variance or exemption shall be consistent with state energy policy, as specified in 30 V.S.A. § 202a.

(B)  Any petitioner for such a variance or exemption can demonstrate that the methods, means, or practices proposed to be taken in lieu of compliance with the rule or rules provide, in the opinion of the commissioner, equal energy efficiency to that attained by compliance with the rule or rules.

(C)  A copy of any such variance or exemption shall be recorded by the petitioner in the land records of the city or town in which the building is located.

(D)  A record of each variance or exemption shall be maintained by the commissioner, together with the certifications received by the commissioner.

(d)  Certification requirement.  Commercial

(1)  The design of commercial buildings shall be certified by the primary designer as compliant with CBES in accordance with this subsection.  A except as compliance is excused by a variance or exemption issued under subdivision (c)(5) of this section.  If applicable law requires that the primary designer be a licensed professional engineer, licensed architect, or other licensed professional, a member of a pertinent licensed profession shall issue this certification.  Otherwise, a certification may be issued by a builder, a licensed professional engineer, or a licensed architect.  If certification is not issued by a licensed professional engineer or a licensed architect, it shall be issued by the builder.  Any certification shall be accompanied by an affidavit and shall certify that the designer acted in accordance with the designer’s professional duty of care in designing the building, and that the commercial construction meets building was designed in substantial compliance with the requirements of the CBES.  The department of public service will develop and make available to the public a certificate that lists key features requirements of the CBES, sets forth certifying language in accordance with this subdivision and requires disclosure of persons relied upon by the primary designer who have contracted to indemnify the primary designer for damages arising out of that reliance.  Any person certifying under this subdivision shall use this certificate or one substantially like it to certify compliance with CBES satisfy these certification obligations.  Certification shall be issued by completing and signing a certificate and permanently affixing it to the outside of the heating or cooling equipment, to the electrical service panel located inside the building, or in a visible location in the vicinity of one of these three areas.  The certificate shall certify that the building has been constructed in compliance with the requirements of the CBES.  The person certifying under this subsection shall provide a copy of each certificate to the department of public service and shall assure that a certificate is recorded and indexed in the town land records.  A builder may contract with a licensed professional engineer or a licensed architect to issue certification and to indemnify the builder from any liability to the owner of the commercial construction caused by noncompliance with the CBES.  In certifying under this subsection, the certifying person may reasonably rely on one or more supporting affidavits received from other persons that contributed to the design affirming that the portions of the design produced by them were properly certifiable under this subsection.  The certifying person may contract for indemnification from those on which the person relies pursuant to this subdivision (1) against damages arising out of that reliance.  This indemnification shall not limit any rights of action of an aggrieved party.

(2)  The construction of a commercial building shall be certified as compliant with CBES in accordance with this subsection, except as compliance is excused by a variance or exemption issued under subdivision (c)(5) of this section.  This certification shall be issued by the general contractor, construction manager, or other party having primary responsibility for coordinating the construction of the subject building, or in the absence of such a person, by the owner of the building.  Any certification shall be accompanied by an affidavit and shall certify that the subject commercial building was constructed in accordance with the ordinary standard of care applicable to the participating construction trades, and that the subject commercial building was constructed substantially in accordance with the construction documents including the plans and specifications certified under subdivision (1) of this subsection for that building.  The department of public service will develop and make available to the public a certificate that sets forth certifying language in accordance with this subdivision, and that requires disclosure of persons who have been relied upon by the person with primary responsibility for coordinating the construction of the building and who have contracted to indemnify that person for damages arising out of that reliance.  The person certifying under this subdivision shall use that certificate or one substantially like it to satisfy these certification obligations.  Certification shall be issued by completing and signing a certificate and permanently affixing it to the outside of the heating or cooling equipment, to the electrical service panel located inside the building, or in a visible location in the vicinity of one of these three areas.  In certifying under this subdivision, the certifying person may reasonably rely on one or more supporting affidavits received from subcontractors or others engaged in the construction of the subject commercial building affirming that the portions of the building constructed by them were properly certifiable under this subdivision.  The certifying person may contract for indemnification from those on which the person relies pursuant to this subdivision (2) against damages arising out of that reliance. This indemnification shall not limit any rights of action of an aggrieved party.

(3)  Any person certifying under this subsection shall provide a copy of the person’s certificate and any accompanying affidavit to the department of public service.

(4)  A certificate issued pursuant to subdivision (1) of this subsection and a certificate issued pursuant to subdivision (2) of this subsection shall be conditions precedent to issuance by the commissioner of public safety (or a municipal official acting under 20 V.S.A. § 2736) of any final occupancy permit required by the rules of the commissioner of public safety for use or occupancy of a commercial building that is also a public building as defined in 20 V.S.A. § 2730(a).

(e)  Action Private right of action for damages against a certifier.

(1)  Except as otherwise provided in this subsection, a person aggrieved by noncompliance with this section another person’s breach of that other person’s representations contained in a certification or supporting affidavit issued or received as provided under subsection (d) of this section, within ten years after the earlier of completion of construction or occupancy of the affected commercial building or portion of that building, may bring a civil action in superior court against a person who has the an obligation of certifying compliance under subsection (d) of this section alleging breach of the representations contained in that person’s certification.  This action may seek injunctive relief, damages arising from the aggrieved party’s reliance on the accuracy of those representations, court costs, and reasonable attorneys’ fees in an amount to be determined by the court.  As used in this subdivision, “damages” means:

(A)  includes costs incidental to increased energy consumption; and

(B)  labor, materials, and other expenses associated with bringing the structure into compliance with CBES in effect on the date construction was commenced.

(2)  A person’s failure to affix the certification as required by this section shall not be an affirmative defense in such an action against the person.

(3)  The rights and remedies created by this section shall not be construed to limit any rights and remedies otherwise provided by law.

(4)  The right of action established in this subsection may not be waived by contract or other agreement.

(5)  It shall be a defense to an action under this subsection that either at the time of completion or at any time thereafter, the commercial building or portion of building covered by a certificate under subsection (d) of this section, as actually constructed, met or exceeded the overall performance standards established in the CBES in effect on the date construction was commenced.

(f)  Violation of section State or local enforcements.  Any person who falsely certifies knowingly makes a false certification under subsection (d) of this section, or any builder party who fails to certify under subsection (d) of this section when required to do so, shall be subject to a civil penalty of not more than $250.00 per day, up to $10,000.00 for each year the violation continuesEach violation shall constitute a separate offense, and each day that the violation continues shall constitute a separate offense.

(g)  Title validity not affected.  A defect in marketable title shall not be created by a failure to record a variance or exemption pursuant to subdivision (c)(5) of this section, by a failure to issue certification or a certificate, as required under subsection (d) of this section, or by a failure under that subsection to:  affix a certificate; or provide a copy of a certificate to the department of public service; or record and index a certificate in the town records.

* * * Smart Metering * * *

Sec. 5.  SMART METERING INVESTIGATION

(a)  The public service board shall investigate opportunities for Vermont electric utilities cost‑effectively to install advanced “smart” metering equipment capable of sending two‑way signals and sufficient to support advanced time‑of‑use pricing during periods of critical peaks or hourly differentiated time‑of‑use pricing. 

(b)  The scope of the investigation shall include the following:

(1)  The current status of implementing either advanced time‑of‑use rate designs or advanced metering by Vermont utilities.

(2)  Analysis of experience from other state jurisdictions and individual utility experience in planning and implementing programs that promote advanced time‑of‑use rate designs or advanced metering.

(3)  Opportunities for exploring ways to design pilot programs and share experience among Vermont utilities with the deployment of advanced meters and rate designs.

(4)  Analysis of all costs and benefits of installing advanced metering equipment, giving due consideration to the circumstances that differentiate Vermont utilities.

(5)  Analysis of opportunities for reducing rates in the short and long term or mitigating rate impacts of investments in advanced metering and ancillary equipment through advanced time‑of‑use rate designs enabled by these investments.

(6)  Analysis of constraints or barriers to implementing this subsection, or opportunities presented by further deferring plans or commitments toward advanced metering equipment or rates.

(7)  Analysis of all supporting and ancillary equipment, equipment standards, and efficiency programs necessary to ensure that customers are adequately and effectively empowered to use and respond cost‑effectively to price signals made possible through advanced metering equipment.

(c)  After investigation, in utility territories where the board concludes it appropriate and cost‑effective, the board shall require each Vermont utility to file plans for investment and deployment of appropriate technologies and plans and strategies for implementing advanced pricing with a goal of ensuring that all ratepayer classes have an opportunity to receive and participate effectively in advanced time‑of‑use pricing plans.

(d)  By January 15, 2008, the public service board shall report to the senate and house committees on natural resources and energy with regard to interim progress in its investigation and measures already implemented under this section.

(e)  By June 15, 2008, the board shall issue a final report and plan for implementation. 

* * * Conservation Rates * * *

Sec. 6.  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. 

(1)  To implement the requirements of this subsection, the public service board shall host one or more workshops to examine the following:

(A)  the parameters for residential inclining block rate designs;

(B)  alternative rate designs, such as critical peak pricing programs or more widespread use of time‑of‑day rates, that would encourage more efficient use of electricity;

(C)  the possible inclusion of exemptions from otherwise applicable inclining block rates or rate designs to encourage efficiency for situations in which special health needs or another extraordinary situation presents such a significant demand for electricity that the board determines use of those rates would cause undue financial hardship for the customer;

(2)  By June 15, 2008, the board shall issue a report and plan for implementation based upon the results of its investigation.  The plan shall require each retail company to upgrade its rates as necessary to implement  new rate designs appropriate to encourage efficient energy use, which shall include residential inclining block rates, if the board determines that those rates would be appropriate, by a specified date, or as part of its next rate‑related appearance before the board, or according to a timetable otherwise specified by the board.  In implementing these rate designs, the board shall consider the appropriateness of phasing in the rate design changes to allow large users of energy a reasonable opportunity to employ methods of conservation and energy efficiency in advance of the full effect of the changes.

* * * Net Metering * * *

Sec. 7.  30 V.S.A. § 219a is amended to read:

§ 219a.  SELF‑GENERATION AND NET METERING

(a)  As used in this section:

(1)  “Customer” means a retail electric consumer who uses a net metering system.

(2)  “Net metering” means measuring the difference between the electricity supplied to a customer and the electricity fed back by a net metering system during the customer’s billing period:

(A)  using a single, nondemand meter or such other meter that would otherwise be applicable to the customer’s usage but for the use of net metering; or

(B)  on farm or group systems, using multiple meters as specified in this chapter.  The calculation will be made by converting all meters to a nondemand, nontime‑of‑day meter, and equalizing them to the tariffed kilowatt‑hour rate.

* * *

(4)  “Farm system” means a facility of no more than 150 250 kilowatts (AC) output capacity, except as provided in subdivision (k)(5) of this section, that generates electric energy on a farm operated by a person principally engaged in the business of farming, as that term is defined in Regulation 1.175‑3 of the Internal Revenue Code of 1986, from the anaerobic digestion of agricultural products, byproducts, or wastes, or other renewable sources as defined in subdivision (3)(E) of this subsection, intended to offset the meters designated under subdivision (g)(1)(A) of this section on the farm or has entered into a contract as specified in subsection (k) of this section.

(b)  A customer shall pay the same rates, fees, or other payments and be subject to the same conditions and requirements as all other purchasers from the electric company in the same rate‑class, except as provided for in this section, and except for appropriate and necessary conditions approved by the board for the safety and reliability of the electric distribution system.

* * *

(f)  Consistent with the other provisions of this title, electric energy measurement for net metering farm or group net metering systems shall be calculated in the following manner:

(1)  Net metering customers that are farm or group net metering systems may credit on‑site generation against all meters designated to the farm system or group net metering system under subdivision (g)(1)(A) of this section.

(2)  Electric energy measurement for farm or group net metering systems shall be calculated by subtracting total usage of all meters included in the farm or group net metering system from total generation by the farm or group net metering system.  If the electricity generated by the farm or group net metering system is less than the total usage of all meters included in the farm or group net metering system during the billing period, the farm or group net metering system shall be credited for any accumulated kilowatt‑hour credit and then billed for the net electricity supplied by the electric company, in accordance with the procedures in subsection (g) of this section.

(3)  If electricity generated by the farm or group net metering system exceeds the electricity supplied by the electric company:

(A)  The farm or group net metering system shall be billed for the appropriate charges for each meter for that month, in accordance with subsection (b) of this section.

(B)  Excess kilowatt‑hours generated during the billing period shall be added to the accumulated balance with this kilowatt‑hour credit appearing on the bill for the following billing period.

(C)  Any accumulated kilowatt‑hour credits shall be used within 12 months or shall revert to the electric company without any compensation to the farm or group net metering system.  Power reverting to the electric company under this subdivision (3) shall be considered SPEED resources under section 8005 of this title.

(g)(1)  In addition to any other requirements of section 248 of this title and this section and board rules thereunder, before a net metering farm or group net metering system including more than one meter may be formed and served by an electric company, the proposed net metering farm or group net metering system shall file with the board, with copies to the department and the serving electric company, the following information:

(A)  the meters to be included in the farm or group net metering system, which shall be associated with the farm buildings and residences owned or occupied by the person operating the farm or group net metering system, or the person’s family or farm employees, or other members of the group, identified by account number and location;

(B)  a method for adding and removing meters included in the farm or group net metering system;

(C)  a designated person responsible for all communications from the farm or group net metering system to the serving electric company, for receiving and paying bills for any service provided by the serving electric company for the farm or group net metering system, and for receiving any other communications regarding the farm or group net metering system net metering; and

(D)  a binding process for the resolution of any disputes within the farm or group net metering system relating to net metering that does not rely on the serving electric company, the board, or the department.

(2)  The farm or group net metering system shall, at all times, maintain a written designation to the serving electric company of a person who shall be the sole person authorized to receive and pay bills for any service provided by the serving electric company, and for receiving to receive any other communications regarding the farm system, the group net metering system, or net metering.

(3)  The serving utility shall implement appropriate changes to the farm system or group net metering system within 30 days after receiving written notification from the designated person.  However, written notification of a change in the person designated under subdivision (2) of this subsection shall be effective upon receipt by the serving utility.  The serving utility shall not be liable for action based on such notification, but shall make any necessary corrections and bill adjustments to implement revised notifications.

(4)  Pursuant to subsection 231(a) of this title, after such notice and opportunity for hearing as the board may require, the board may revoke a certificate of public good issued to a farm or group net metering system.

(5)  A group net metering system may consist only of customers that are located within the service area of the same electric company.  Various buildings owned by a municipality may constitute a group net metering system.  If it determines that it would promote the general good, the board shall permit a noncontiguous group of net metering customers to comprise a group net metering system.

(h)(1)  An electric company:

(A)  Shall make net metering available to any customer using a net metering system, group net metering system, or farm system on a first‑come, first‑served basis until the cumulative output capacity of net metering systems equals 1.0 2.0 percent of the distribution company’s peak demand during 1996; or the peak demand during the most recent full calendar year, whichever is greater.  The board may raise the 1.0 2.0 percent cap.  In determining whether to raise the cap, the board shall consider the following:

(i)  the costs and benefits of net metering systems already connected to the system; and

(ii)  the potential costs and benefits of exceeding the cap, including potential short and long‑term impacts on rates, distribution system costs and benefits, reliability and diversification costs and benefits;

(B)  Shall allow net metering systems to be interconnected using a kilowatt‑hour meter capable of registering the flow of electricity in two directions or such other comparably equipped meter that would otherwise be applicable to the customer’s usage but for the use of net metering;

(C)  May, at its own expense, and with the written consent of the customer, install one or more additional meters to monitor the flow of electricity in each direction;

(D)  Shall Except as otherwise provided in this section, shall charge the customer a minimum monthly fee that is the same as for other customers of the electric distribution company in the same rate class, but shall not charge the customer any additional standby, capacity, interconnection, or other fee or charge;

(E)  May require a customer to comply with generation interconnection, safety, and reliability requirements, as determined by the public service board by rule or order, and may charge reasonable fees for interconnection, establishment, special metering, meter reading, accounting, account correcting, and account maintenance of net metering arrangements of greater than 15 kilowatt (AC) capacity;

(F)  May charge, if the capacity of the distribution system is insufficient for the designed generation, subject to determination by the board, a reasonable fee to cover the cost of electric company improvements necessary to distribute power;

(G)  May require that all meters included within a farm or group net metering system be read on the same billing cycle;

(H)  May book and defer, with carrying costs, additional incremental costs, to the extent that such costs are not recovered through charges, authorized in subdivisions (D), (E), and (F) of this subdivision (1), directly related to implementing net metering of greater than 15 kilowatt (AC) capacity;

(I)  Shall receive from a farm system, which is designed to produce less energy than the total annual load of the meters identified in subdivision (g)(1)(A) of this section, any tradeable renewable credits for which the farm  system is eligible.  All other farm systems shall retain any tradeable renewable credits for which the farm is eligible;.

(2)  All such requirements shall be pursuant to and governed by a tariff approved by the board and any applicable board rule, which tariffs and rules shall be designed in a manner reasonably likely to facilitate net metering.

* * *

(j)  Notwithstanding the provisions of this section that define a net metering system as being of no more than 15 kilowatts (AC) capacity, the board may allow net metering for up to ten 15 systems per year for customers that produce more than 15 kilowatts (AC) capacity, but do not produce more than 150 250 kilowatts of power and are not farm systems.

(k)  Notwithstanding the provisions of subsections (f) and (g) of this section, an electric company may contract to purchase all or a portion of the output products from a farm or group net metering system, provided:

(1)  the farm or group net metering system obtains a certificate of public good under the terms of subsections (c) and (d) of this section;

(2)  any contracted power shall be subject to the limitations set forth in subdivision (h)(1) of this section;

(3)  any contract shall be subject to interconnection and metering requirements in subdivisions (h)(1)(C) and (i)(2) and (3) of this section;

(4)  any contract may permit all or a portion of the tradeable renewable energy credits for which the farm or group net metering system is eligible to be transferred to the electric company;

(5)  the output capacity of a system may exceed 150 250 kilowatts, provided:

(A)  the contract assigns the amount of power to be net metered;

(B)  the net metered amount does not exceed 150 250 kilowatts; and

(C)  only the amount assigned to net metering is assessed to the cap provided in subdivision (h)(1)(A) of this section.

* * * Temporary Meteorological Stations * * *

Sec. 8.  30 V.S.A. § 246 is added to read:

§ 246.  TEMPORARY SITING OF METEOROLOGICAL STATIONS

(a)  For purposes of this section, a “meteorological station” consists of one temporary tower, which may include guy wires, and attached instrumentation to collect and record wind speed, wind direction, and atmospheric conditions.

(b)  The public service board shall establish by rule or order standards and procedures governing application for, and issuance or revocation of, a certificate of public good for the temporary installation of one or more meteorological stations under the provisions of section 248 of this title.  A meteorological station shall be deemed to promote the public good of the state if it is in compliance with the criteria of this section and the board rules or orders.  An applicant for a certificate of public good for a meteorological station shall be exempt from the requirements of subsection 202(f) of this title.

(c)  In developing rules or orders, the board:

(1)  Shall develop a simple application form and shall require that completed applications be filed with the board, the department of public service, the agency of natural resources, and the municipality in which the meteorological station is proposed to be located.

(2)  Shall require that if no objections are filed within 30 days of the board’s receipt of a complete application and the board determines that the applicant has met all of the requirements of section 248 of this title, the certificate of public good shall be issued for a period that the board finds reasonable, but in no event for more than five years.  Upon request of an applicant, the board may renew a certificate of public good.  Upon expiration of the certificate, the meteorological station and all associated structures and material shall be removed, and the site shall be restored substantially to its preconstruction condition.

(3)  May waive the requirements of section 248 of this title that are not applicable to meteorological stations, including criteria that are generally applicable to public service companies as defined in this title.  The board shall not waive review regarding whether construction will have an undue adverse effect on esthetics, historic sites, air and water purity, the natural environment, and the public health and safety.

(4)  Shall seek to simplify the application and review process, as appropriate, in conformance with this section.

(d)  A proposal for decision shall be issued within five months of when the board receives a completed application for a certificate of public good for the temporary installation of one or more meteorological stations under the provisions of section 248 of this title.

* * * Renewable Energy Pricing and Portfolio Standards * * *

Sec. 9.  30 V.S.A. § 8002(4) is amended to read:

(4)  “New renewable energy” means renewable energy produced by a generating resource coming into service after December 31, 2004.  This may include the additional energy from an existing renewable facility retrofitted with advanced technologies or otherwise operated, modified, or expanded to increase the kwh output of the facility in excess of an historical baseline established by calculating the average output of that facility for the 10‑year period that ended December 31, 2004.  If the production of new renewable energy through retrofitting expansion involves combustion of the resource, the system also must result in an incrementally higher level of energy conversion efficiency or significantly reduced emissions.  For the purposes of this chapter, renewable energy refers to either “existing renewable energy” or “new renewable energy.”

Sec. 10.  30 V.S.A. § 8003 is amended to read:

§ 8003.  RENEWABLE ENERGY PRICING

(a)  Upon petition of an electric company subject to this title, upon request of the department of public service, or on its own initiative, the public service board may approve one or more renewable pricing programs for one or more electric utilities; provided, however, in the case of a municipal plant or department formed under local charter or chapter 79 of this title, or an electric cooperative formed under chapter 81 of this title, any renewable pricing program approved by the board shall also be approved by a majority of the voters of a municipality or cooperative voting upon the question at a duly warned annual or special meeting held for that purpose.  Unless the board finds good cause to exempt a utility, by no later than July 1, 2008, each electric utility, municipal department formed under local charter or chapter 79 of this title, and each electric cooperative formed under chapter 81 of this title shall implement a renewable energy pricing program under this section for its customers, or shall offer customers the option of making a voluntary contribution to the Vermont clean energy development fund established under 10 V.S.A. § 6523.  Such renewable energy pricing programs may include, but are not limited to, tariffs, standard special contracts, or other arrangements whose purpose is to increase the company’s reliance on, or the customer’s support of, renewable sources of energy or the type and quantity of renewable energy resources available.

* * *

(f)  Renewable pricing programs offered by a company shall be available to such customer classes as the board may determine.

(g)  The board shall consider the following factors in deciding whether and upon what conditions to approve a proposed renewable energy pricing program:

(1)  minimization of marketing and administrative expenses;

(2)  auditing or certification of sources of energy or tradeable renewable energy credits;

(3)  marketing and promotion plans;

(4)  effectiveness of the program in meeting the goals of promoting renewable energy generation and public understanding of renewable energy sources in Vermont;

(5)  retention by the program of renewable energy production incentives, tax incentives and other incentives earned or otherwise obtained by energy resources acquired pursuant to or as part of a renewable energy pricing program approved under this section to reduce the cost of any premiums paid under this section; and

(6)  costs imposed on nonparticipating customers arising on account of the implementation of the voluntary renewable energy pricing program.

Sec. 11.  30 V.S.A. § 8004(e) is amended to read:

(e)  In lieu of, or in addition to purchasing tradeable renewable energy credits to satisfy the portfolio requirements of this section, a retail electricity provider in this state may pay to a renewable energy fund established by the public service board the Vermont clean energy development fund established under 10 V.S.A. § 6523 an amount per kilowatt hour as established by the board.  As an alternative, the board may require any proportion of this amount to be paid to the energy conservation fund established under subsection 209(d) of this title.

* * * SPEED Program * * *

Sec. 12.  30 V.S.A. § 8005 is amended to read:

§ 8005.  SUSTAINABLY PRICED ENERGY ENTERPRISE DEVELOPMENT (SPEED) PROGRAM

* * *

(b)  The SPEED program shall be established, by rule, order, or contract, by the public service board by January 1, 2007.  As part of the SPEED program, the public service board may, and in the case of subdivisions (2) and (3) of this subsection shall:

* * *

(2)  allow the developer of a facility that is one megawatt or less, and is a qualifying SPEED resource or a nonqualifying SPEED resource, to sell that power under a long term contract that is established at a specified margin below the hourly spot market price determined by the board to be adequate to promote SPEED resource development while remaining consistent with the principles of least‑cost energy services under section 218c of this title.  For purposes of this section, a long‑term contract should be 15 years or greater unless the board finds good cause for a shorter term;

(3)  encourage Vermont’s retail electricity providers to secure long‑term  contracts, at stable prices, for renewable energy that are anticipated to be below the long‑term market price, over the lives of the projects qualifying SPEED resources.  The board shall create a standard contract price, or a set of maximum and minimum provisions, or both, for qualifying SPEED resources over 1 MW of capacity.  In setting a standard contract price for a qualifying SPEED resource, the board shall consider the goal of developing qualified SPEED resources, least cost provision of energy service under section 218c, and the impact on electric rates.  The board may create a competitive bid process through which to select a portion of those contracts;

* * *

(d)(1)  The public service board shall meet on or before January 1, 2012, and open a proceeding, and issue findings determining to determine the total amount of qualifying SPEED resources that have come into service or are projected to come into service during the period of time between January 1, 2005 and January 1, 2013 been supplied to Vermont retail electricity providers or have been issued a certificate of public good.  If the board finds that the amount of qualifying SPEED resources coming into service during that time or having been issued a certificate of public good after January 1, 2005 and before July 1, 2012 equals or exceeds total statewide growth in electric energy usage retail sales during the period of time between January 1, 2005 and January 1, 2012 that time, and in addition, at least five percent of the 2005 total statewide electric retail sales is provided by qualified SPEED resources, or if it finds that the amount of qualifying SPEED resources equals or exceeds 10 percent of total statewide electric energy usage retail sales for calendar year 2005, the portfolio standards established under this chapter shall not be in force.  The board shall make its determination by July 1, 2012 January 1, 2013.  If the board finds that the goal established has not been met, one year after the board’s determination the portfolio standards established under subsection 8004(b) of this title shall take effect.

(2)  A state goal is to assure that 20 percent of total statewide electric retail sales before July 1, 2017 shall be generated by speed resources.  The public service board shall report to the house and senate committees on natural resources and energy and to the joint energy committee by December 15, 2012 with regard to the state’s progress in meeting this goal.  In addition, the board shall report to the the house and senate committees on natural resources and energy and to the joint energy committee by December 15, 2014 with regard to the state’s progress in meeting this goal and, if necessary, shall include any appropriate recommendations for measures that will make attaining the goal more likely.

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

* * *

* * * Assistance * * *

Sec. 13.  REPORTS ON OMBUDSMAN AND TECHNICAL ASSISTANCE FOR COMMUNITIES

Technical assistance.  By no later than January 15, 2008, the public service department, after consultation with the public service board and the clean energy development fund investment committee established under 10 V.S.A. § 6523(e)(1)(B), shall report to the legislative committees on natural resources and energy with a recommended program by which the state may best:

(1)  Establish and fund an office of ombudsman, which would be charged with assisting those who desire to develop renewable energy projects in dealing with the regulatory process.  In developing the proposal, the department shall consult with the agency of natural resources with respect to how to assist individuals seeking a certificate of public good for a mini‑hydroelectric facility and those seeking water quality certification, and shall consider how best to coordinate services with the ombudsman for renewable energy at the agency of agriculture, food and markets.

(2)  Establish and fund a program to provide communities with assistance in assessing their renewable energy resources and the potential for development of those resources, and in evaluating, selecting, and implementing reasonable alternatives for financing the construction of those renewable energy resources.

* * * Biodiesel * * *

Sec. 14.  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, department of public service, and agency of transportation jointly shall submit a report to the house and senate committees on institutions, 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. 

(1)  The portion of the report prepared by the department of buildings and general services shall contain:

(A)  A summary of the current use of biodiesel blends in state office buildings.

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

(C)  A summary of any obstacles to increasing biodiesel use in state buildings.

(D)  A proposed work plan to increase biodiesel use.

(2)  The portion of the report prepared by the department of public service shall contain:

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

(B)  Recommendations for increasing biodiesel fuel production, storage facilities, and distribution facilities.

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

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

(E)  A proposed work plan to increase biodiesel use.

(3)  The portion of the report prepared by the agency of transportation shall contain:

(A)  A summary of the current use of biodiesel blends in state garages and the state transportation fleet.

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

(C)  A summary of any obstacles to increasing biodiesel use in state garages and the state transportation fleet.

(D)  A proposed work plan to increase biodiesel use.

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

* * * Wind‑Powered Electric Generating Facilities * * *

Sec. 15.  32 V.S.A. § 5401(10)(J) is added to read:

(10)  “Nonresidential property” means all property except:

* * *

(J)  Buildings and fixtures subject to the tax on wind-powered electric generating facilities under section 5402c of this title.

Sec. 16.  32 V.S.A. § 5402c is added to read:

§ 5402c.  WIND-POWERED ELECTRIC GENERATING FACILITIES TAX

(a)  A facility certified by the commissioner of public service as a facility which produces electrical energy for resale, generated solely from wind power, which has an installed capacity of at least five megawatts, which was placed in service after January 1, 2007, and which holds a valid certificate of public good issued under 30 V.S.A. § 248, shall be assessed an alternative education property tax on its buildings and fixtures used directly and exclusively in generation of electrical energy from wind power.  The tax shall be imposed at a rate of $0.00001 per kWh of electrical energy produced by the certified facility, as determined by the public service department for the six months ending April 30 and the six months ending October 31 each year, but in no case shall the tax imposed for any six month period be less than an amount equal to 15% of the installed capacity of the facility multiplied by the rate per kWh imposed by this subsection.  Until a facility is certified under this subsection, it shall remain subject to taxation under section 5402 of this title.

(b)  The tax imposed by this section shall be paid to the commissioner of taxes by the person or entity then owning or operating the certified facility, by December 1 for the period ending October 31 and by June 1 for the period ending April 30, for deposit into the education fund.  A person or entity failing to make returns or pay the tax imposed by this section within the time required shall be subject to and governed by the provisions of sections 3202 and 3203 and subchapters 8 and 9 of chapter 151 of this title.

(c)  Buildings and fixtures subject to the education property tax under this section shall not be taken into account in determining the common level of appraisal for the municipality.

Sec. 17.  MUNICIPAL PROPERTY TAXES UNAFFECTED

Application of alternative education property tax to a wind-powered electric generating facility under 32 V.S.A. § 5402c shall have no effect upon the assessment of municipal taxes upon that facility by any municipality in this state.

* * * Business Energy Credit * * *

Sec. 18.  32 V.S.A. § 5822(c)(1)(B) and (d) are amended to read:

(c)  The amount of tax determined under subsection (a) of this section shall be:

(1)  increased by 24 percent of the taxpayer’s federal tax liability for the taxable year for the following:

* * *

(B)  recapture of federal investment tax credit and increased by 76 percent of the Vermont‑property portion of the business energy credit component of the federal investment tax credit recapture for the taxable year; this shall be computed based on the federal investment tax credit as it existed in taxable year 2007;

(d)  A taxpayer shall be entitled to a credit against the tax imposed under this section of 24 percent of each of the credits allowed against the taxpayer’s federal income tax for the taxable year as follows:  elderly and permanently totally disabled credit, investment tax credit, and child care and dependent care credits.  A taxpayer shall also be entitled to a credit against the tax imposed under this section of 76 percent of the Vermont‑property portion of the business energy credit component of the federal investment tax credit allowed against the taxpayer’s federal income tax for the taxable year under Section 48 of the Internal Revenue Code; provided, that this shall be computed based on the federal investment tax credit as it existed in taxable year 2007.

Sec. 19.  32 V.S.A. § 5930z is added to read:

§ 5930z.  Pass‑Through of Federal Energy Credit for Corporations

(a)  A taxpayer of this state shall be eligible for a credit against the tax imposed under section 5832 of this title in an amount equal to the Vermont‑property portion of the business energy credit component of the federal investment tax credit allowed against the taxpayer’s federal income tax for the taxable year under Section 48 of the Internal Revenue Code; provided, that this shall be computed based on the federal investment tax credit as it existed in taxable year 2007. 

(b)  Any taxpayer who has received a credit under subsection (a) of this section in any prior year shall increase its corporate income tax under this chapter by the amount of the Vermont‑property portion of the business energy credit component of the federal investment tax credit recapture for the taxable year; provided, that this shall be computed based on the federal investment tax credit as it existed in taxable year 2007.  

Sec. 20.  EFFECTIVE DATE OF BUSINESS ENERGY TAX CREDITS

Secs. 18 and 19 of this act (business energy tax credits) shall apply to taxable years 2008 and after.

* * * Mini‑Hydro Reports * * *

Sec. 21.  PUBLIC SERVICE BOARD REPORT ON PERMITTING MINI‑HYDROELECTRIC PROJECTS

Prior to December 15, 2007, the public service board shall report to the house committee on fish, wildlife and water resources and the senate committee on natural resources and energy with a recommendation for a simple, predictable, and environmentally sound process, other than the process set forth in subsection 248(j) of Title 30, for issuing a certificate of public good under section 248 of Title 30 for mini‑hydroelectric projects.  The report shall:

(1)  Recommend criteria for determining what constitutes a mini‑hydroelectric facility, including the allowable maximum amount of output capacity at the facility and the type of eligible facilities, natural features, or other sites.

(2)  Address permit application requirements, including ownership of the facility and structural safety of the mini‑hydroelectric project.

(3)  Address additional uses of the mini‑hydroelectric project such as flood control; fish and wildlife habitat; recreation; water supply; historic resource; and structural grade control for infrastructure, roads, bridges, and houses.

(4)  Address the use of flashboards to increase upstream flooding.

(5)  Address measures to prevent fish from entering turbines and penstocks.

(6)  Address the size of authorized diversions and penstocks.

Sec. 22.  AGENCY OF NATURAL RESOURCES REPORT ON WATER QUALITY CERTIFICATION FOR MINI‑HYDROELECTRIC PROJECTS

Prior to December 15, 2007, the secretary of natural resources shall report to the house committee on fish, wildlife and water resources and the senate committee on natural resources and energy with a recommendation for a simple, predictable, and environmentally sound procedure for completing a water quality certification review of mini‑hydroelectric projects as required by Section 401 of the federal Clean Water Act.  The report shall:

(1)  Recommend, after consultation with the public service board, criteria for determining what constitutes a mini‑hydroelectric facility, including the allowable maximum amount of output capacity at the facility and the type of eligible facilities, natural features, or other sites;

(2)  Address bypass flows for mini‑hydroelectric projects.

(3)  Address the need for monitoring of dissolved oxygen at mini‑hydroelectric facilities.

(4)  Address seasonal flows in bypasses at run‑of‑river facilities. 

(5)  Address the need for new fish or flow studies for mini‑hydroelectric projects. 

Sec. 23.  REPORT ON STATUS OF SPEED PROGRAM

By no later than January 15, 2008, the public service board shall report to the legislative committees on natural resources and energy with an evaluation of the likelihood of qualifying SPEED resources coming into service in time to meet the standards established in 30 V.S.A. § 8005(d), as amended by this act.

* * * Plumbing * * *

Sec. 24.  26 V.S.A. § 2173(a) is amended to read:

§ 2173.  RULES ADOPTED BY THE BOARD

(a)  The plumber’s examining board may, pursuant to the provisions of 3 V.S.A. chapter 25 (Administrative Procedure Act), make and revise such plumbing rules as necessary for protection of the public health, except that no rule of the board may require the installation or maintenance in a private residence of a water heater at a minimum temperature.  To the extent that a rule of the board conflicts with this subsection, that rule shall be invalid and unenforceable.  The rules shall be in effect in every city, village, and town having a public water system or public sewerage system and apply to all premises connected to the systems and all public buildings containing plumbing or water treatment and heating specialties whether they are connected to a public water or sewerage system.  The local board of health and the commissioner of public safety shall each have authority to enforce these rules.  The rules shall be limited to minimum performance standards reasonably necessary for the protection of the public against accepted health hazards.  The board may, if it finds it practicable to do so, adopt the provisions of a nationally recognized plumbing code.

Sec. 25.  26 V.S.A. § 2192a(g) is added to read:

(g)  The department of public safety and the plumber’s examining board shall work with representatives from the Vermont solar energy industry to create a solar water heating specialist license and shall allow experienced solar thermal installers who have completed necessary course work to be eligible for the hydronic heating specialty license examination without the requirement of an affidavit from a master plumber.

* * *Affordability * * *

Sec. 26.  30 V.S.A. § 218(e) is added to read:

(e)  Notwithstanding any other provisions of this section, the board may approve a rate schedule, tariff, agreement, contract, or settlement that provides reduced rates for low income electric utility consumers to better assure affordability.  For the purposes of this subsection, “low income electric utility consumer” means a customer who has a household income at or below 150 percent of the current federal poverty level.  When considering whether to approve a rate schedule, tariff, agreement, contract, or settlement for low income electric utility consumers, the board may take into account the potential impact on, and cost-shifting to, other utility customers.

(Committee Vote: 5-0-0

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

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.  DESIGNATION OF ACT

This act shall be referred to as “Vermont’s sustainable future: efficiency and energy act.”

Sec. 2.  LEGISLATIVE FINDINGS

The general assembly finds that:

(1)  Global climate change, which is threatening our environment and perhaps ultimately our existence, has been caused in part by an energy policy that is largely dependent on the burning of fossil fuels.

(2)  In order to slow or stop climate change, it is essential that we reduce or eliminate our dependency on fossil fuels by significantly improving energy efficiency and shifting to nonpolluting benign forms of energy such as wind, sun, and water power.

(3)  In order for Vermont to meet the greenhouse gas reduction goals set by the conference of the New England governors and Eastern Canadian premiers’ climate change action plan, Vermont needs to provide effective weatherization services, energy audits, green building practices, and installation of renewable energy systems.

(4)  The “Vermont energy efficiency potential study for non-regulated fuels” recently completed by the department of public service indicates that Vermont has cost-effective potential energy savings of $486 million over the next ten years with 63 percent of those savings from building shell improvements.  In order to meet these savings goals, a ten-fold expansion of capabilities to deliver services to as many as 10,000 buildings a year is essential to meet these savings goals.

(5)  Workforce development in the field of green building, renewable energy, and energy efficiency an essential component of the battle to combat global climate change, has not kept pace with the growth of this industry.  New business are being created, innovated energy systems are being designed and manufactured, but there are few trained applicants to fill the new well-paying jobs being created in this field.

(6)  Next generation report stated that Vermont must implement strategies to expand its skilled workforce and approach the future by integrating economic development, workforce development, and education policies.

* * * Renewable Energy Goal * * *

Sec. 3.  10 V.S.A. § 579 is added to read:

§ 579.  25 BY 25 STATE GOAL

(a)  It is a goal of the state, by the year 2025, to produce 25 percent of the energy consumed within the state through the use of renewable energy sources, particularly from Vermont’s farms and forests.

(b)  By no later than January 15, 2008, the commissioner of public service, in consultation with the secretary of agriculture, food and markets and the commissioner of forests, parks and recreation, shall present to the committees on agriculture and natural resources and energy of the general assembly a plan for attaining this goal.  Plan updates shall be presented no less frequently than every three years, thereafter, and a progress report shall be due annually on January 15.

(c)  By no later than January 15, 2008, the department of public service shall present to the legislative committees on natural resources and energy an updated comprehensive energy plan which shall give due consideration to the public engagement process required under 30 V.S.A. § 254 and under Sec. 2 of No. 208 of the Acts of the 2005 Adj. Sess. (2006).  By that time, the department of public service shall incorporate plans adopted under this section into the state comprehensive energy plan adopted under 30 V.S.A. § 202b.

* * * Act 250 Definition of Farming * * *

Sec. 4.  10 V.S.A. § 6001(22) is amended to read:

(22)  “Farming” means:

(A)  the cultivation or other use of land for growing food, fiber, Christmas trees, maple sap, or horticultural and orchard crops; or

(B)  the raising, feeding, or management of livestock, poultry, fish, or bees; or

(C)  the operation of greenhouses; or

(D)  the production of maple syrup; or

(E)  the on‑site storage, preparation and sale of agricultural products principally produced on the farm; or

(F)  the on‑site production and sale of fuel or power from agricultural products or wastes principally produced on the farm; or

(G)  the raising, feeding, or management of four or more equines owned or boarded by the farmer, including training, showing, and providing instruction and lessons in riding, training, and the management of equines.

* * * Agriculture Development Funds * * *

Sec. 5.  6 V.S.A. § 4710(g)(3) is amended to read:

(3)  Assistance from the agricultural economic development special account shall be available for:

(A)  Business and technical assistance for research and planning to aid a farmer or a group of farmers in developing business enterprises that harvest biomass, convert biomass to energy, or produce biofuel;

(B)  Implementation Cost‑effective implementation assistance to leverage other sources of capital to assist a farmer or group of farmers in purchasing equipment, technology, or other assistance to produce agricultural energy, harvest biomass, or convert biomass into energy, or enable installation and usage of wind, solar, or other technology that relies on a resource that is being consumed at a harvest rate at or below its natural regeneration rate pursuant to 30 V.S.A. § 8002(2); and

* * *

* * * Commercial Building Energy Standards * * *

Sec. 6.  21 V.S.A. § 268 is amended to read:

§ 268.  COMMERCIAL BUILDING ENERGY STANDARDS

(a)  Definitions.  For purposes of this subchapter, “commercial buildings” means all buildings that are not residential buildings as defined in subdivision 266(a)(2) of this title or farm structures as defined in 24 V.S.A. § 4413.

(1)  The following commercial buildings, or portions of those buildings, separated from the remainder of the building by thermal envelope assemblies complying with this section shall be exempt from the building thermal envelope provisions of the standards:

(A)  Those that do not contain conditioned space.

(B)  Those with a peak design rate of energy usage less than an amount specified in the commercial building energy standards (CBES) adopted under subsection (b) of this section.

(2)  These standards shall not apply to equipment or portions of building energy systems that use energy primarily to provide for industrial, or manufacturing, or commercial processes.

(b)  Adoption of commercial building energy standards.  Commercial building construction with respect to which no state or any local building permit application or application for construction plan approval by the commissioner of public safety pursuant to 20 V.S.A. chapter 173 has been submitted on or after January 1, 2007 shall be designed and constructed in substantial compliance with the standards contained in the 2005 Vermont Guidelines for Energy Efficient Commercial Construction, as those standards may be amended by administrative rule adopted by the commissioner of public service.

(c)  Revision and interpretation of energy standards.  On or about January 1, 2009, and at least every three years thereafter, the commissioner of public service shall amend and update the CBES by means of administrative rules adopted in accordance with 3 V.S.A. chapter 25.  At least a year prior to final adoption of each required revision of the CBES, the department of public service shall convene an advisory committee to include one or more mortgage lenders,; builders,; building designers,; architects; civil, mechanical, and electrical engineers; utility representatives,; and other persons with experience and expertise, such as consumer advocates and energy conservation experts.  The advisory committee may provide the commissioner of public service with additional recommendations for revision of the CBES.

(1)  Any amendments to the CBES shall be:

(A)  Consistent with duly adopted state energy policy, as specified in 30 V.S.A. § 202a.

(B)  Evaluated relative to their technical applicability and reliability.

(2)  Each time the CBES are amended by the commissioner of public service, the amended CBES shall become effective upon a date specified in the adopted rule, a date that shall not be less than three months after the date of adoption.  Persons submitting an application for any state or local permit authorizing commercial construction, or an application for construction plan approval by the commissioner of public safety pursuant to 20 V.S.A. chapter 173, before the effective date of the amended CBES shall have the option of complying with the applicable provisions of the earlier or the amended CBES.  After the effective date of the original or the amended CBES, any person submitting such an application for any state or local permit authorizing commercial construction in an area subject to the CBES shall comply with the most recent version of the CBES.

(3)  The advisory committee convened under this subsection, in preparing for the CBES updates, shall advise the department of public service with respect to the coordination of the CBES amendments with existing and proposed demand‑side management programs offered in the state.

(4)  The commissioner of public service is authorized to adopt rules interpreting and implementing the CBES.

(5)  The commissioner of public service may grant written variances or exemptions from the CBES or rules adopted under this section where strict compliance would entail practical difficulty or unnecessary hardship, or is otherwise found unwarranted, provided that:

(A)  Any such variance or exemption shall be consistent with state energy policy, as specified in 30 V.S.A. § 202a.

(B)  Any petitioner for such a variance or exemption can demonstrate that the methods, means, or practices proposed to be taken in lieu of compliance with the rule or rules provide, in the opinion of the commissioner, equal energy efficiency to that attained by compliance with the rule or rules.

(C)  A copy of any such variance or exemption shall be recorded by the petitioner in the land records of the city or town in which the building is located.

(D)  A record of each variance or exemption shall be maintained by the commissioner, together with the certifications received by the commissioner.

(d)  Certification requirement.  Commercial

(1)  The design of commercial buildings shall be certified by the primary designer as compliant with CBES in accordance with this subsection.  A except as compliance is excused by a variance or exemption issued under subdivision (c)(5) of this section.  If applicable law requires that the primary designer be a licensed professional engineer, licensed architect, or other licensed professional, a member of a pertinent licensed profession shall issue this certification.  Otherwise, a certification may be issued by a builder, a licensed professional engineer, or a licensed architect.  If certification is not issued by a licensed professional engineer or a licensed architect, it shall be issued by the builder.  Any certification shall be accompanied by an affidavit and shall certify that the designer acted in accordance with the designer’s professional duty of care in designing the building, and that the commercial construction meets building was designed in substantial compliance with the requirements of the CBES.  The department of public service will develop and make available to the public a certificate that lists key features requirements of the CBES, sets forth certifying language in accordance with this subdivision and requires disclosure of persons relied upon by the primary designer who have contracted to indemnify the primary designer for damages arising out of that reliance.  Any person certifying under this subdivision shall use this certificate or one substantially like it to certify compliance with CBES satisfy these certification obligations.  Certification shall be issued by completing and signing a certificate and permanently affixing it to the outside of the heating or cooling equipment, to the electrical service panel located inside the building, or in a visible location in the vicinity of one of these three areas.  The certificate shall certify that the building has been constructed in compliance with the requirements of the CBES.  The person certifying under this subsection shall provide a copy of each certificate to the department of public service and shall assure that a certificate is recorded and indexed in the town land records.  A builder may contract with a licensed professional engineer or a licensed architect to issue certification and to indemnify the builder from any liability to the owner of the commercial construction caused by noncompliance with the CBES.  In certifying under this subsection, the certifying person may reasonably rely on one or more supporting affidavits received from other persons that contributed to the design affirming that the portions of the design produced by them were properly certifiable under this subsection.  The certifying person may contract for indemnification from those on which the person relies pursuant to this subdivision (1) against damages arising out of that reliance.  This indemnification shall not limit any rights of action of an aggrieved party.

(2)  The construction of a commercial building shall be certified as compliant with CBES in accordance with this subsection, except as compliance is excused by a variance or exemption issued under subdivision (c)(5) of this section.  This certification shall be issued by the general contractor, construction manager, or other party having primary responsibility for coordinating the construction of the subject building, or in the absence of such a person, by the owner of the building.  Any certification shall be accompanied by an affidavit and shall certify that the subject commercial building was constructed in accordance with the ordinary standard of care applicable to the participating construction trades, and that the subject commercial building was constructed substantially in accordance with the construction documents including the plans and specifications certified under subdivision (1) of this subsection for that building.  The department of public service will develop and make available to the public a certificate that sets forth certifying language in accordance with this subdivision, and that requires disclosure of persons who have been relied upon by the person with primary responsibility for coordinating the construction of the building and who have contracted to indemnify that person for damages arising out of that reliance.  The person certifying under this subdivision shall use that certificate or one substantially like it to satisfy these certification obligations.  Certification shall be issued by completing and signing a certificate and permanently affixing it to the outside of the heating or cooling equipment, to the electrical service panel located inside the building, or in a visible location in the vicinity of one of these three areas.  In certifying under this subdivision, the certifying person may reasonably rely on one or more supporting affidavits received from subcontractors or others engaged in the construction of the subject commercial building affirming that the portions of the building constructed by them were properly certifiable under this subdivision.  The certifying person may contract for indemnification from those on which the person relies pursuant to this subdivision (2) against damages arising out of that reliance. This indemnification shall not limit any rights of action of an aggrieved party.

(3)  Any person certifying under this subsection shall provide a copy of the person’s certificate and any accompanying affidavit to the department of public service.

(4)  A certificate issued pursuant to subdivision (1) of this subsection and a certificate issued pursuant to subdivision (2) of this subsection shall be conditions precedent to issuance by the commissioner of public safety (or a municipal official acting under 20 V.S.A. § 2736) of any final occupancy permit required by the rules of the commissioner of public safety for use or occupancy of a commercial building that is also a public building as defined in 20 V.S.A. § 2730(a).

(e)  Action Private right of action for damages against a certifier.

(1)  Except as otherwise provided in this subsection, a person aggrieved by noncompliance with this section another person’s breach of that other person’s representations contained in a certification or supporting affidavit issued or received as provided under subsection (d) of this section, within ten years after the earlier of completion of construction or occupancy of the affected commercial building or portion of that building, may bring a civil action in superior court against a person who has the an obligation of certifying compliance under subsection (d) of this section alleging breach of the representations contained in that person’s certification.  This action may seek injunctive relief, damages arising from the aggrieved party’s reliance on the accuracy of those representations, court costs, and reasonable attorneys’ fees in an amount to be determined by the court.  As used in this subdivision, “damages” means:

(A)  includes costs incidental to increased energy consumption; and

(B)  labor, materials, and other expenses associated with bringing the structure into compliance with CBES in effect on the date construction was commenced.

(2)  A person’s failure to affix the certification as required by this section shall not be an affirmative defense in such an action against the person.

(3)  The rights and remedies created by this section shall not be construed to limit any rights and remedies otherwise provided by law.

(4)  The right of action established in this subsection may not be waived by contract or other agreement.

(5)  It shall be a defense to an action under this subsection that either at the time of completion or at any time thereafter, the commercial building or portion of building covered by a certificate under subsection (d) of this section, as actually constructed, met or exceeded the overall performance standards established in the CBES in effect on the date construction was commenced.

(f)  Violation of section State or local enforcements.  Any person who falsely certifies knowingly makes a false certification under subsection (d) of this section, or any builder party who fails to certify under subsection (d) of this section when required to do so, shall be subject to a civil penalty of not more than $250.00 per day, up to $10,000.00 for each year the violation continuesEach violation shall constitute a separate offense, and each day that the violation continues shall constitute a separate offense.

(g)  Title validity not affected.  A defect in marketable title shall not be created by a failure to record a variance or exemption pursuant to subdivision (c)(5) of this section, by a failure to issue certification or a certificate, as required under subsection (d) of this section, or by a failure under that subsection to:  affix a certificate; or provide a copy of a certificate to the department of public service; or record and index a certificate in the town records.

* * * Smart Metering * * *

Sec. 7.  SMART METERING INVESTIGATION

(a)  The public service board shall investigate opportunities for Vermont electric utilities cost‑effectively to install advanced “smart” metering equipment capable of sending two‑way signals and sufficient to support advanced time‑of‑use pricing during periods of critical peaks or hourly differentiated time‑of‑use pricing. 

(b)  The scope of the investigation shall include the following:

(1)  The current status of implementing either advanced time‑of‑use rate designs or advanced metering by Vermont utilities.

(2)  Analysis of experience from other state jurisdictions and individual utility experience in planning and implementing programs that promote advanced time‑of‑use rate designs or advanced metering.

(3)  Opportunities for exploring ways to design pilot programs and share experience among Vermont utilities with the deployment of advanced meters and rate designs.

(4)  Analysis of all costs and benefits of installing advanced metering equipment, giving due consideration to the circumstances that differentiate Vermont utilities.

(5)  Analysis of opportunities for reducing rates in the short and long term or mitigating rate impacts of investments in advanced metering and ancillary equipment through advanced time‑of‑use rate designs enabled by these investments.

(6)  Analysis of constraints or barriers to implementing this subsection, or opportunities presented by further deferring plans or commitments toward advanced metering equipment or rates.

(7)  Analysis of all supporting and ancillary equipment, equipment standards, and efficiency programs necessary to ensure that customers are adequately and effectively empowered to use and respond cost‑effectively to price signals made possible through advanced metering equipment.

(c)  After investigation, in utility territories where the board concludes it appropriate and cost‑effective, the board shall require each Vermont utility to file plans for investment and deployment of appropriate technologies and plans and strategies for implementing advanced pricing with a goal of ensuring that all ratepayer classes have an opportunity to receive and participate effectively in advanced time‑of‑use pricing plans.

(d)  By January 15, 2008, the public service board shall report to the senate and house committees on natural resources and energy with regard to interim progress in its investigation and measures already implemented under this section.

(e)  By June 15, 2008, the board shall issue a final report and plan for implementation. 

* * * Conservation Rates * * *

Sec. 8.  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. 

(1)  To implement the requirements of this subsection, the public service board shall host one or more workshops to examine the following:

(A)  the parameters for residential inclining block rate designs;

(B)  alternative rate designs, such as critical peak pricing programs or more widespread use of time‑of‑day rates, that would encourage more efficient use of electricity;

(C)  the possible inclusion of exemptions from otherwise applicable inclining block rates or rate designs to encourage efficiency for situations in which special health needs or another extraordinary situation presents such a significant demand for electricity that the board determines use of those rates would cause undue financial hardship for the customer;

(2)  By June 15, 2008, the board shall issue a report and plan for implementation based upon the results of its investigation.  The plan shall require each retail company to upgrade its rates as necessary to implement  new rate designs appropriate to encourage efficient energy use, which shall include residential inclining block rates, if the board determines that those rates would be appropriate, by a specified date, or as part of its next rate‑related appearance before the board, or according to a timetable otherwise specified by the board.  In implementing these rate designs, the board shall consider the appropriateness of phasing in the rate design changes to allow large users of energy a reasonable opportunity to employ methods of conservation and energy efficiency in advance of the full effect of the changes.

* * * Net Metering * * *

Sec. 9.  30 V.S.A. § 219a is amended to read:

§ 219a.  SELF‑GENERATION AND NET METERING

(a)  As used in this section:

(1)  “Customer” means a retail electric consumer who uses a net metering system.

(2)  “Net metering” means measuring the difference between the electricity supplied to a customer and the electricity fed back by a net metering system during the customer’s billing period:

(A)  using a single, nondemand meter or such other meter that would otherwise be applicable to the customer’s usage but for the use of net metering; or

(B)  on farm or group systems, using multiple meters as specified in this chapter.  The calculation will be made by converting all meters to a nondemand, nontime‑of‑day meter, and equalizing them to the tariffed kilowatt‑hour rate.

* * *

(4)  “Farm system” means a facility of no more than 150 250 kilowatts (AC) output capacity, except as provided in subdivision (k)(5) of this section, that generates electric energy on a farm operated by a person principally engaged in the business of farming, as that term is defined in Regulation 1.175‑3 of the Internal Revenue Code of 1986, from the anaerobic digestion of agricultural products, byproducts, or wastes, or other renewable sources as defined in subdivision (3)(E) of this subsection, intended to offset the meters designated under subdivision (g)(1)(A) of this section on the farm or has entered into a contract as specified in subsection (k) of this section.

(b)  A customer shall pay the same rates, fees, or other payments and be subject to the same conditions and requirements as all other purchasers from the electric company in the same rate‑class, except as provided for in this section, and except for appropriate and necessary conditions approved by the board for the safety and reliability of the electric distribution system.

* * *

(f)  Consistent with the other provisions of this title, electric energy measurement for net metering farm or group net metering systems shall be calculated in the following manner:

(1)  Net metering customers that are farm or group net metering systems may credit on‑site generation against all meters designated to the farm system or group net metering system under subdivision (g)(1)(A) of this section.

(2)  Electric energy measurement for farm or group net metering systems shall be calculated by subtracting total usage of all meters included in the farm or group net metering system from total generation by the farm or group net metering system.  If the electricity generated by the farm or group net metering system is less than the total usage of all meters included in the farm or group net metering system during the billing period, the farm or group net metering system shall be credited for any accumulated kilowatt‑hour credit and then billed for the net electricity supplied by the electric company, in accordance with the procedures in subsection (g) of this section.

(3)  If electricity generated by the farm or group net metering system exceeds the electricity supplied by the electric company:

(A)  The farm or group net metering system shall be billed for the appropriate charges for each meter for that month, in accordance with subsection (b) of this section.

(B)  Excess kilowatt‑hours generated during the billing period shall be added to the accumulated balance with this kilowatt‑hour credit appearing on the bill for the following billing period.

(C)  Any accumulated kilowatt‑hour credits shall be used within 12 months or shall revert to the electric company without any compensation to the farm or group net metering system.  Power reverting to the electric company under this subdivision (3) shall be considered SPEED resources under section 8005 of this title.

(g)(1)  In addition to any other requirements of section 248 of this title and this section and board rules thereunder, before a net metering farm or group net metering system including more than one meter may be formed and served by an electric company, the proposed net metering farm or group net metering system shall file with the board, with copies to the department and the serving electric company, the following information:

(A)  the meters to be included in the farm or group net metering system, which shall be associated with the farm buildings and residences owned or occupied by the person operating the farm or group net metering system, or the person’s family or farm employees, or other members of the group, identified by account number and location;

(B)  a method for adding and removing meters included in the farm or group net metering system;

(C)  a designated person responsible for all communications from the farm or group net metering system to the serving electric company, for receiving and paying bills for any service provided by the serving electric company for the farm or group net metering system, and for receiving any other communications regarding the farm or group net metering system net metering; and

(D)  a binding process for the resolution of any disputes within the farm or group net metering system relating to net metering that does not rely on the serving electric company, the board, or the department.

(2)  The farm or group net metering system shall, at all times, maintain a written designation to the serving electric company of a person who shall be the sole person authorized to receive and pay bills for any service provided by the serving electric company, and for receiving to receive any other communications regarding the farm system, the group net metering system, or net metering.

(3)  The serving utility shall implement appropriate changes to the farm system or group net metering system within 30 days after receiving written notification from the designated person.  However, written notification of a change in the person designated under subdivision (2) of this subsection shall be effective upon receipt by the serving utility.  The serving utility shall not be liable for action based on such notification, but shall make any necessary corrections and bill adjustments to implement revised notifications.

(4)  Pursuant to subsection 231(a) of this title, after such notice and opportunity for hearing as the board may require, the board may revoke a certificate of public good issued to a farm or group net metering system.

(5)  A group net metering system may consist only of customers that are located within the service area of the same electric company.  Various buildings owned by a municipality may constitute a group net metering system.  If it determines that it would promote the general good, the board shall permit a noncontiguous group of net metering customers to comprise a group net metering system.

(h)(1)  An electric company:

(A)  Shall make net metering available to any customer using a net metering system, group net metering system, or farm system on a first‑come, first‑served basis until the cumulative output capacity of net metering systems equals 1.0 2.0 percent of the distribution company’s peak demand during 1996; or the peak demand during the most recent full calendar year, whichever is greater.  The board may raise the 1.0 2.0 percent cap.  In determining whether to raise the cap, the board shall consider the following:

(i)  the costs and benefits of net metering systems already connected to the system; and

(ii)  the potential costs and benefits of exceeding the cap, including potential short and long‑term impacts on rates, distribution system costs and benefits, reliability and diversification costs and benefits;

(B)  Shall allow net metering systems to be interconnected using a kilowatt‑hour meter capable of registering the flow of electricity in two directions or such other comparably equipped meter that would otherwise be applicable to the customer’s usage but for the use of net metering;

(C)  May, at its own expense, and with the written consent of the customer, install one or more additional meters to monitor the flow of electricity in each direction;

(D)  Shall Except as otherwise provided in this section, shall charge the customer a minimum monthly fee that is the same as for other customers of the electric distribution company in the same rate class, but shall not charge the customer any additional standby, capacity, interconnection, or other fee or charge;

(E)  May require a customer to comply with generation interconnection, safety, and reliability requirements, as determined by the public service board by rule or order, and may charge reasonable fees for interconnection, establishment, special metering, meter reading, accounting, account correcting, and account maintenance of net metering arrangements of greater than 15 kilowatt (AC) capacity;

(F)  May charge, if the capacity of the distribution system is insufficient for the designed generation, subject to determination by the board, a reasonable fee to cover the cost of electric company improvements necessary to distribute power;

(G)  May require that all meters included within a farm or group net metering system be read on the same billing cycle;

(H)  May book and defer, with carrying costs, additional incremental costs, to the extent that such costs are not recovered through charges, authorized in subdivisions (D), (E), and (F) of this subdivision (1), directly related to implementing net metering of greater than 15 kilowatt (AC) capacity;

(I)  Shall receive from a farm system, which is designed to produce less energy than the total annual load of the meters identified in subdivision (g)(1)(A) of this section, any tradeable renewable credits for which the farm  system is eligible.  All other farm systems shall retain any tradeable renewable credits for which the farm is eligible;.

(2)  All such requirements shall be pursuant to and governed by a tariff approved by the board and any applicable board rule, which tariffs and rules shall be designed in a manner reasonably likely to facilitate net metering.

* * *

(j)  Notwithstanding the provisions of this section that define a net metering system as being of no more than 15 kilowatts (AC) capacity, the board may allow net metering for up to ten 15 systems per year for customers that produce more than 15 kilowatts (AC) capacity, but do not produce more than 150 250 kilowatts of power and are not farm systems.

(k)  Notwithstanding the provisions of subsections (f) and (g) of this section, an electric company may contract to purchase all or a portion of the output products from a farm or group net metering system, provided:

(1)  the farm or group net metering system obtains a certificate of public good under the terms of subsections (c) and (d) of this section;

(2)  any contracted power shall be subject to the limitations set forth in subdivision (h)(1) of this section;

(3)  any contract shall be subject to interconnection and metering requirements in subdivisions (h)(1)(C) and (i)(2) and (3) of this section;

(4)  any contract may permit all or a portion of the tradeable renewable energy credits for which the farm or group net metering system is eligible to be transferred to the electric company;

(5)  the output capacity of a system may exceed 150 250 kilowatts, provided:

(A)  the contract assigns the amount of power to be net metered;

(B)  the net metered amount does not exceed 150 250 kilowatts; and

(C)  only the amount assigned to net metering is assessed to the cap provided in subdivision (h)(1)(A) of this section.

* * * Temporary Meteorological Stations * * *

Sec. 10.  30 V.S.A. § 246 is added to read:

§ 246.  TEMPORARY SITING OF METEOROLOGICAL STATIONS

(a)  For purposes of this section, a “meteorological station” consists of one temporary tower, which may include guy wires, and attached instrumentation to collect and record wind speed, wind direction, and atmospheric conditions.

(b)  The public service board shall establish by rule or order standards and procedures governing application for, and issuance or revocation of, a certificate of public good for the temporary installation of one or more meteorological stations under the provisions of section 248 of this title.  A meteorological station shall be deemed to promote the public good of the state if it is in compliance with the criteria of this section and the board rules or orders.  An applicant for a certificate of public good for a meteorological station shall be exempt from the requirements of subsection 202(f) of this title.

(c)  In developing rules or orders, the board:

(1)  Shall develop a simple application form and shall require that completed applications be filed with the board, the department of public service, the agency of natural resources, and the municipality in which the meteorological station is proposed to be located.

(2)  Shall require that if no objections are filed within 30 days of the board’s receipt of a complete application and the board determines that the applicant has met all of the requirements of section 248 of this title, the certificate of public good shall be issued for a period that the board finds reasonable, but in no event for more than five years.  Upon request of an applicant, the board may renew a certificate of public good.  Upon expiration of the certificate, the meteorological station and all associated structures and material shall be removed, and the site shall be restored substantially to its preconstruction condition.

(3)  May waive the requirements of section 248 of this title that are not applicable to meteorological stations, including criteria that are generally applicable to public service companies as defined in this title.  The board shall not waive review regarding whether construction will have an undue adverse effect on esthetics, historic sites, air and water purity, the natural environment, and the public health and safety.

(4)  Shall seek to simplify the application and review process, as appropriate, in conformance with this section.

(d)  A proposal for decision shall be issued within five months of when the board receives a completed application for a certificate of public good for the temporary installation of one or more meteorological stations under the provisions of section 248 of this title.

* * * Renewable Energy Pricing and Portfolio Standards * * *

Sec. 11.  30 V.S.A. § 8002(4) is amended to read:

(4)  “New renewable energy” means renewable energy produced by a generating resource coming into service after December 31, 2004.  This may include the additional energy from an existing renewable facility retrofitted with advanced technologies or otherwise operated, modified, or expanded to increase the kwh output of the facility in excess of an historical baseline established by calculating the average output of that facility for the 10‑year period that ended December 31, 2004.  If the production of new renewable energy through retrofitting expansion involves combustion of the resource, the system also must result in an incrementally higher level of energy conversion efficiency or significantly reduced emissions.  For the purposes of this chapter, renewable energy refers to either “existing renewable energy” or “new renewable energy.”

Sec. 12.  30 V.S.A. § 8003 is amended to read:

§ 8003.  RENEWABLE ENERGY PRICING

(a)  Upon petition of an electric company subject to this title, upon request of the department of public service, or on its own initiative, the public service board may approve one or more renewable pricing programs for one or more electric utilities; provided, however, in the case of a municipal plant or department formed under local charter or chapter 79 of this title, or an electric cooperative formed under chapter 81 of this title, any renewable pricing program approved by the board shall also be approved by a majority of the voters of a municipality or cooperative voting upon the question at a duly warned annual or special meeting held for that purpose.  Unless the board finds good cause to exempt a utility, by no later than July 1, 2008, each electric utility, municipal department formed under local charter or chapter 79 of this title, and each electric cooperative formed under chapter 81 of this title shall implement a renewable energy pricing program under this section for its customers, or shall offer customers the option of making a voluntary contribution to the Vermont clean energy development fund established under 10 V.S.A. § 6523.  Such renewable energy pricing programs may include, but are not limited to, tariffs, standard special contracts, or other arrangements whose purpose is to increase the company’s reliance on, or the customer’s support of, renewable sources of energy or the type and quantity of renewable energy resources available.

* * *

(f)  Renewable pricing programs offered by a company shall be available to such customer classes as the board may determine.

(g)  The board shall consider the following factors in deciding whether and upon what conditions to approve a proposed renewable energy pricing program:

(1)  minimization of marketing and administrative expenses;

(2)  auditing or certification of sources of energy or tradeable renewable energy credits;

(3)  marketing and promotion plans;

(4)  effectiveness of the program in meeting the goals of promoting renewable energy generation and public understanding of renewable energy sources in Vermont;

(5)  retention by the program of renewable energy production incentives, tax incentives and other incentives earned or otherwise obtained by energy resources acquired pursuant to or as part of a renewable energy pricing program approved under this section to reduce the cost of any premiums paid under this section; and

(6)  costs imposed on nonparticipating customers arising on account of the implementation of the voluntary renewable energy pricing program.

Sec. 13.  30 V.S.A. § 8004(e) is amended to read:

(e)  In lieu of, or in addition to purchasing tradeable renewable energy credits to satisfy the portfolio requirements of this section, a retail electricity provider in this state may pay to a renewable energy fund established by the public service board the Vermont clean energy development fund established under 10 V.S.A. § 6523 an amount per kilowatt hour as established by the board.  As an alternative, the board may require any proportion of this amount to be paid to the energy conservation fund established under subsection 209(d) of this title.

* * * SPEED Program * * *

Sec. 14.  30 V.S.A. § 8005 is amended to read:

§ 8005.  SUSTAINABLY PRICED ENERGY ENTERPRISE DEVELOPMENT (SPEED) PROGRAM

* * *

(b)  The SPEED program shall be established, by rule, order, or contract, by the public service board by January 1, 2007.  As part of the SPEED program, the public service board may, and in the case of subdivisions (2) and (3) of this subsection shall:

* * *

(2)  allow the developer of a facility that is one megawatt or less, and is a qualifying SPEED resource or a nonqualifying SPEED resource, to sell that power under a long term contract that is established at a specified margin below the hourly spot market price determined by the board to be adequate to promote SPEED resource development while remaining consistent with the principles of least‑cost energy services under section 218c of this title.  For purposes of this section, a long‑term contract should be 15 years or greater unless the board finds good cause for a shorter term;

(3)  encourage Vermont’s retail electricity providers to secure long‑term  contracts, at stable prices, for renewable energy that are anticipated to be below the long‑term market price, over the lives of the projects qualifying SPEED resources.  The board shall create a standard contract price, or a set of maximum and minimum provisions, or both, for qualifying SPEED resources over 1 MW of capacity.  In setting a standard contract price for a qualifying SPEED resource, the board shall consider the goal of developing qualified SPEED resources, least cost provision of energy service under section 218c, and the impact on electric rates.  The board may create a competitive bid process through which to select a portion of those contracts;

* * *

(d)(1)  The public service board shall meet on or before January 1, 2012, and open a proceeding, and issue findings determining to determine the total amount of qualifying SPEED resources that have come into service or are projected to come into service during the period of time between January 1, 2005 and January 1, 2013 been supplied to Vermont retail electricity providers or have been issued a certificate of public good.  If the board finds that the amount of qualifying SPEED resources coming into service during that time or having been issued a certificate of public good after January 1, 2005 and before July 1, 2012 equals or exceeds total statewide growth in electric energy usage retail sales during the period of time between January 1, 2005 and January 1, 2012 that time, and in addition, at least five percent of the 2005 total statewide electric retail sales is provided by qualified SPEED resources, or if it finds that the amount of qualifying SPEED resources equals or exceeds 10 percent of total statewide electric energy usage retail sales for calendar year 2005, the portfolio standards established under this chapter shall not be in force.  The board shall make its determination by July 1, 2012 January 1, 2013.  If the board finds that the goal established has not been met, one year after the board’s determination the portfolio standards established under subsection 8004(b) of this title shall take effect.

(2)  A state goal is to assure that 20 percent of total statewide electric retail sales before July 1, 2017 shall be generated by speed resources.  The public service board shall report to the house and senate committees on natural resources and energy and to the joint energy committee by December 15, 2012 with regard to the state’s progress in meeting this goal.  In addition, the board shall report to the the house and senate committees on natural resources and energy and to the joint energy committee by December 15, 2014 with regard to the state’s progress in meeting this goal and, if necessary, shall include any appropriate recommendations for measures that will make attaining the goal more likely.

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

* * *

* * * Assistance * * *

Sec. 15.  REPORTS ON OMBUDSMAN AND TECHNICAL ASSISTANCE FOR COMMUNITIES

Technical assistance.  By no later than January 15, 2008, the public service department, after consultation with the public service board and the clean energy development fund investment committee established under 10 V.S.A. § 6523(e)(1)(B), shall report to the legislative committees on natural resources and energy with a recommended program by which the state may best:

(1)  Establish and fund an office of ombudsman, which would be charged with assisting those who desire to develop renewable energy projects in dealing with the regulatory process.  In developing the proposal, the department shall consult with the agency of natural resources with respect to how to assist individuals seeking a certificate of public good for a  small hydroelectric facility and those seeking water quality certification, and shall consider how best to coordinate services with the ombudsman for renewable energy at the agency of agriculture, food and markets.

(2)  Establish and fund a program to provide communities with assistance in assessing their renewable energy resources and the potential for development of those resources, and in evaluating, selecting, and implementing reasonable alternatives for financing the construction of those renewable energy resources.

* * * Unanticipated Revenues Surcharge * * *

Sec. 16.  32 VSA §8664 and 8665 are added to read:

§8664 UNANTICIPATED REVENUES SURCHARGE

(a) The General Assembly finds that forces in the electric power market have resulted in unanticipated revenues and benefits to certain generators of electric power not all related to the efficiency of plant operation and management. Changes in market conditions, including large increases in total power sale and revenues due to plant uprates, have increased the profitability of power generators.. The overall rise in the price of fossil fuels provides additional revenues to non-fossil fuel generators.  The new forward capacity market mechanism provides a substantial source of new revenues to power producers.  Across the board increases in wholesale power revenues are likely to be realized from the Regional Greenhouse Gas Initiative carbon cap program to be launched in this region.

(b) The General Assembly further finds that energy users in Vermont have experienced dramatic increases in energy costs and should share equitably in the unanticipated revenues accruing to generators of power in the state.

(c)  It is therefore the purpose of the General Assembly to secure benefits for Vermonters through the creation and funding of an energy affordability investment fund consistent with state energy policy set forth in Section 202a of Title 30.

(d) There is assessed upon electric generating plants in the state having a name plate generating capacity of 100,000 kilowatts, or more, a surcharge upon unanticipated revenues from electric energy generated in the state. 

(e) The amount of the surcharge shall be equal to thirty-five percent of the gross revenues received in each quarter of calendar years 2008, 2009, 2010 and 2011 that is in excess of the amount of gross revenues received in each corresponding quarter of calendar year 2003.  In calendar year 2007, the charge shall be thirty-five percent of the gross revenues received in the third and fourth quarters of the calendar in excess of the amount of gross revenues received in the corresponding quarters of calendar year 2003.  In calendar year 2012, the charge shall be thirty-five percent of the gross revenues received in the period from January 1, 2012 to March 21, 2012 in excess of the amount of gross revenues received in the corresponding period of calendar year 2003.

(f) The unanticipated revenue surcharge imposed by this section shall be paid to and collected by the commissioner of taxes.  Payments shall be made on a quarterly basis, and are due and payable on the last day of the month following the end of each quarter or period.  A person or corporation failing to make returns or pay the charge imposed by this section within the time required shall be subject to and governed by the provisions of sections 3202 and 3203 and subchapters 8 and 9 of chapter 151 of  this title.

(g)  The unanticipated revenue surcharge assessed by this section is in addition to any other state or local tax or charge, including all state and local property taxes, general fund and education fund megawatt taxes, and revenues due pursuant to 10 VSA 6522.

(h) Revenues received from the unanticipated revenues surcharge assessed by this section shall be deposited by the commissioner of  taxes in the Vermont energy affordability investment fund established by section 8665 of tile title.

§8665.  VERMONT ENERGY AFFORDABILITY INVESTMENT FUND

     (a)  There is established the Vermont energy affordability investment fund as a special fund to be managed pursuant to the provisions of subchapter 5 of chapter 7 of title 32.

(b)  The fund shall contain all revenues received by the state from the unanticipated revenue surcharge assessed by section 8664 of this title.

(c) Interest and revenues in the fund shall not revert at the conclusion of any fiscal year, but remain in the fund for future fiscal years.

(d) Monies in the fund may be expended only upon appropriation by the General Assembly for purposes consistent with the energy policy of the state set forth in section 202a of Title 30.  

* * * Wind‑Powered Electric Generating Facilities * * *

Sec. 17.  32 V.S.A. § 5401(10)(J) is added to read:

(10)  “Nonresidential property” means all property except:

* * *

(J)  Buildings and fixtures subject to the tax on wind-powered electric generating facilities under section 5402c of this title.

Sec. 18.  32 V.S.A. § 5402c is added to read:

§ 5402c.  WIND-POWERED ELECTRIC GENERATING FACILITIES TAX

(a)  Beginning three years after the facility commences to generate electricity, a facility certified by the commissioner of public service as a facility which produces electrical energy for resale, generated solely from wind power, which has an installed capacity of at least five megawatts, which was placed in service after January 1, 2007, and which holds a valid certificate of public good issued under 30 V.S.A. § 248, shall be assessed an alternative education property tax on its buildings and fixtures used directly and exclusively in generation of electrical energy from wind power.  The tax shall be imposed at a rate of $0.003 per kWh of electrical energy produced by the certified facility, as determined by the public service department for the six months ending April 30 and the six months ending October 31 each year, but in no case shall the tax imposed for any six month period be less than an amount equal to 15% of the installed capacity of the facility multiplied by the rate per kWh imposed by this subsection.  Until a facility is certified under this subsection, it shall remain subject to taxation under section 5402 of this title.

(b)  The tax imposed by this section shall be paid to the commissioner of taxes by the person or entity then owning or operating the certified facility, by December 1 for the period ending October 31 and by June 1 for the period ending April 30, for deposit into the education fund.  A person or entity failing to make returns or pay the tax imposed by this section within the time required shall be subject to and governed by the provisions of sections 3202 and 3203 and subchapters 8 and 9 of chapter 151 of this title.

(c)  Buildings and fixtures subject to the education property tax under this section shall not be taken into account in determining the common level of appraisal for the municipality.

Sec. 19.  MUNICIPAL PROPERTY TAXES UNAFFECTED

Application of alternative education property tax to a wind-powered electric generating facility under 32 V.S.A. § 5402c shall have no effect upon the assessment of municipal taxes upon that facility by any municipality in this state.

* * * Business Energy Credit * * *

Sec. 20.  32 V.S.A. § 5822(c)(1)(B) and (d) are amended to read:

(c)  The amount of tax determined under subsection (a) of this section shall be:

(1)  increased by 24 percent of the taxpayer’s federal tax liability for the taxable year for the following:

* * *

(B)  recapture of federal investment tax credit the Vermont‑property portion of the business energy credit component of the federal investment tax credit recapture for the taxable year; this shall be computed based on the federal investment tax credit as it existed in taxable year 2007;

(d)  A taxpayer shall be entitled to a credit against the tax imposed under this section of 24 percent of each of the credits allowed against the taxpayer’s federal income tax for the taxable year as follows:  elderly and permanently totally disabled credit, investment tax credit the Vermont‑property portion of the business energy credit component of the federal investment tax credit, and child care and dependent care credits. 

Sec. 21.  32 V.S.A. § 5930z is added to read:

§ 5930z.  Pass‑Through of Federal Energy Credit for Corporations

(a)  A taxpayer of this state shall be eligible for a credit against the tax imposed under section 5832 of this title in an amount equal to 24% of the Vermont‑property portion of the business energy credit component of the federal investment tax credit allowed against the taxpayer’s federal income tax for the taxable year under Section 48 of the Internal Revenue Code;

(b)  Any taxpayer who has received a credit under subsection (a) of this section in any prior year shall increase its corporate income tax under this chapter by the amount of 24% of the Vermont‑property portion of the business energy credit component of the federal investment tax credit recapture for the taxable year.

Sec. 22.  EFFECTIVE DATE OF BUSINESS ENERGY TAX CREDITS; PSB REPORT

(a) Secs. 20 and 21 of this act (business energy tax credits) shall apply to taxable years 2008 and after.

(b) By January 15, 2010, the Public Service Board shall report to the General Assembly regarding:

     (1) the utilization and effectiveness of the solar tax credit in promoting the installation by commercial properties in Vermont of customer owned, on site solar electric power, and

     (2) recommendations on any changes to the solar tax credit, including whether it should be restructured to a production based credit, and how many revisions they recommend would be implemented. 

* * * Small Hydro Reports * * *

Sec. 23.  PUBLIC SERVICE BOARD REPORT ON PERMITTING SMALL HYDROELECTRIC PROJECTS

Prior to December 15, 2007, the public service board shall report to the house committee on fish, wildlife and water resources and the senate committee on natural resources and energy with a recommendation for a simple, predictable, and environmentally sound process, other than the process set forth in subsection 248(j) of Title 30, for issuing a certificate of public good under section 248 of Title 30 for small hydroelectric projects that are not eligible for a net metering permit under public service board rule 5.100.  The report shall:

(1)  Recommend criteria for determining what constitutes a small hydroelectric facility, including the allowable maximum amount of output capacity at the facility and the type of eligible facilities, natural features, or other sites.

(2)  Address permit application requirements, including ownership of the facility, interconnection, and structural safety of the small hydroelectric project.

(3)  Address additional uses of the small hydroelectric project such as flood control; fish and wildlife habitat; recreation; water supply; historic resource; and structural grade control for infrastructure, roads, bridges, and houses.

Sec. 24.  AGENCY OF NATURAL RESOURCES REPORT ON WATER QUALITY CERTIFICATION FOR SMALL HYDROELECTRIC PROJECTS

Prior to December 15, 2007, the secretary of natural resources shall report to the house committee on fish, wildlife and water resources and the senate committee on natural resources and energy with a recommendation for a simple, predictable, and environmentally sound procedure for completing a water quality certification review, as required by Section 401 of the federal Clean Water Act, of small hydroelectric projects that are not subject to net metering.  The report shall:

(1)  Recommend, after consultation with the public service board, criteria for determining what constitutes a small hydroelectric facility, including the allowable maximum amount of output capacity at the facility and the type of eligible facilities, natural features, or other sites;

(2)  Address bypass flows for small hydroelectric projects.

(3)  Address the need for monitoring of dissolved oxygen at small hydroelectric facilities.

(4)  Address seasonal flows in bypasses at run‑of‑river facilities. 

(5)  Address the need for new fish or flow studies for small hydroelectric projects. 

(6)  Address the use of flashboards to increase upstream flooding.

(7)  Address measures to prevent fish from entering turbines and penstocks.

(8)  Address the size of authorized diversions and penstocks.

(9)  Include an analysis of the existing permitting process for small hydro projects.

Sec. 25.  PILOT PROJECTS FOR SMALL HYDROELECTRIC GENERATORS

In order to promote the timely development of environmentally sound small community hydro projects, and to help inform efforts to develop new permitting processes, the public service board and the agency of natural resources shall work with communities that are seeking to develop small hydro projects, to facilitate those projects through the existing permit processes.  These projects shall not have more than 2 MW of name-plate capacity, shall have the support and involvement of the communities in which they are located, and shall not include the construction of a new dam.

Sec. 26.  REPORT ON STATUS OF SPEED PROGRAM

By no later than January 15, 2008, the public service board shall report to the legislative committees on natural resources and energy with an evaluation of the likelihood of qualifying SPEED resources coming into service in time to meet the standards established in 30 V.S.A. § 8005(d), as amended by this act.

* * * Plumbing * * *

Sec. 27.  26 V.S.A. § 2173(a) is amended to read:

§ 2173.  RULES ADOPTED BY THE BOARD

(a)  The plumber’s examining board may, pursuant to the provisions of 3 V.S.A. chapter 25 (Administrative Procedure Act), make and revise such plumbing rules as necessary for protection of the public health, except that no rule of the board may require the installation or maintenance in a private residence of a water heater at a minimum temperature.  To the extent that a rule of the board conflicts with this subsection, that rule shall be invalid and unenforceable.  The rules shall be in effect in every city, village, and town having a public water system or public sewerage system and apply to all premises connected to the systems and all public buildings containing plumbing or water treatment and heating specialties whether they are connected to a public water or sewerage system.  The local board of health and the commissioner of public safety shall each have authority to enforce these rules.  The rules shall be limited to minimum performance standards reasonably necessary for the protection of the public against accepted health hazards.  The board may, if it finds it practicable to do so, adopt the provisions of a nationally recognized plumbing code.

Sec. 28.  26 V.S.A. § 2192a (b) is amended to read:

(b)  Specialty fields include the following:

* * *

     (4) Solar System Specialist:  Installation, replacement and repair of residential, industrial or commercial domestic solar heating systems for use as a supplemental or pre-heat source.  Systems shall include; passive or active design, collectors, storage tanks, heat exchangers, piping, safety devices and related materials.  The Solar System Specialist shall only connect to new or existing domestic hot water supply tanks, including instantaneous heaters, as well as tanks or heat exchangers supplementing hydronic space heating systems.  At no time shall a Solar System Specialist install, replace and repair any other part of a domestic hot water supply or hydronic space heating system.

* * *Affordability * * *

Sec. 29.  30 V.S.A. § 218(e) is added to read:

(e)  Notwithstanding any other provisions of this section, the board may approve a rate schedule, tariff, agreement, contract, or settlement that provides reduced rates for low income electric utility consumers to better assure affordability.  For the purposes of this subsection, “low income electric utility consumer” means a customer who has a household income at or below 150 percent of the current federal poverty level.  When considering whether to approve a rate schedule, tariff, agreement, contract, or settlement for low income electric utility consumers, the board may take into account the potential impact on, and cost-shifting to, other utility customers.

* * * Energy Efficiency Services Fund * * *

Sec. 30.  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 are currently assessed only on electricity and natural gas providers regulated by the board;

(5)  with the scientific consensus 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)  Non-electric energy efficiency fund.  The public service board shall establish an energy affordability investment fund to be managed by a fund administrator appointed by the board under this section and subdivision 209(d)(3) of this title.  The 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.  The non-electric 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 209(d) of this title and operating in accordance with section 209  of this title.

(d)  Review of adequacy of the fund. 

(1) On or before January 15, 2011, the public service board shall report to the legislature on the expenditure of funds from the non-electric energy efficiency services fund to meet the public’s needs for energy efficiency services.

(2)  The report shall include a funding adequacy evaluation and funding recommendations which 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, the building industry, entities currently engaged in delivering weatherization services, and other stakeholders identified by the board. 

(3)  The funding adequacy evaluation shall address:  the need for and availability of alternative revenue sources that may be dedicated to the non‑electric 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.

(4)  The funding recommendations shall be developed in a manner that accords 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.

 * * * Revised Efficiency Utility Structure * * *

Sec. 31.  REPORT ON REVISED STRUCTURE FOR ENERGY EFFICIENCY UTILITY

By no later than December 15, 2007, the public service board shall present 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 that contains a proposed revised energy efficiency utility structure, together with any proposed legislative changes that in its judgment will assist in the effective implementation of the revised efficiency utility.  The  board shall develop the proposal in a manner consistent with the provisions of 30 V.S.A. § 209 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, the building industry, entities currently engaged in delivering weatherization services, and other stakeholders identified by the board.  The report shall include options for ongoing funding of the expanded fossil fuel efficiency responsibilities of the energy efficiency utility.

* * * Existing Efficiency Utility * * *

Sec. 32.  30 V.S.A. § 209 is amended to read:

§ 209.  JURISDICTION; GENERAL SCOPE

* * *

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

(2)  In place of utility‑specific programs developed pursuant to section 218c of this title, the board may 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 energy efficiency utility shall be made under this section and section 203a of this title, on a schedule that provides the energy efficiency utility adequate time to prepare for the delivery of relevant services no later than January 1, 2009.  Despite this appointment, however, the board may allow the Burlington Electric Department and the Vermont Gas Systems, Inc., and any successors in interest, to continue to provide efficiency services within their respective service territoriesThe As part of this appointment, the board may shall include as eligible measures 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.

(3)  In addition to its existing authority, the board may establish by order or rule a volumetric charge to customers for the support of energy efficiency programs that meet the requirements of section 218c of this title.  The charge shall be known as the energy efficiency charge, shall be shown separately on each customer's bill, and shall be paid to a fund administrator appointed by the board and deposited into an electric efficiency fund.  When such a charge is shown, notice as to how to obtain information about energy efficiency programs approved under this section shall be provided in a manner directed by the board.  This notice shall include, at a minimum, a toll free telephone number, and to the extent feasible shall be on the customer's bill and near the energy efficiency charge.  Balances in the electric efficiency fund shall be ratepayer funds, shall be used to support the activities authorized in this subdivision, 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 board will annually provide the legislature with a report detailing the revenues collected and the expenditures made for energy efficiency programs under this section.

(4)  The charge established by the board pursuant to subdivision (3) of this subsection shall be in an amount determined by the board by rule or order that is consistent with the principles of least cost integrated planning as defined in section 218c of this title. As circumstances and programs evolve, the amount of the charge shall be reviewed for unrealized energy efficiency potential and shall be adjusted as necessary in order to realize all reasonably available, cost-effective energy efficiency savings. In setting the amount of the charge and its allocation, the board shall determine an appropriate balance among the following objectives; provided, however, that particular emphasis shall be accorded to the first four of these objectives: reducing the size of future power purchases; reducing the generation of greenhouse gases; limiting the need to upgrade the state's transmission and distribution infrastructure; minimizing the costs of electricity; providing efficiency and conservation as a part of a comprehensive resource supply strategy; providing the opportunity for all Vermonters to participate in efficiency and conservation programs; and the value of targeting efficiency and conservation efforts to locations, markets or customers where they may provide the greatest value.  The board, by rule or order, shall establish a process by which a customer may apply to the board for an exemption from some or all of the charges assessed under this subdivision. The board shall establish criteria by which these applications shall be measured. Any such exemption shall extend for a period of time not to exceed one year. In addition, the board may authorize exemptions only if, at a minimum, a customer demonstrates that, during the preceding year, it implemented an extraordinary amount of cost-effective energy efficiency at the customer's own expense or incurred extraordinary costs on those measures and the customer did not and will not receive reimbursement for those measures from the entity designated by the board under this section.

(5)  Effective January 1, 2009, an energy efficiency utility shall have the same unrestricted term of appointment and process for termination of appointment as is most common for electric and gas utilities in the state.

(e)  The board shall:

(1)  Ensure that all retail consumers, regardless of retail electricity or, gas, or heating or process 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.

(3)  Build on the energy efficiency expertise and capabilities that have developed or may develop in the state.

(4)  Promote program initiatives and market strategies that address the needs of persons or businesses facing the most significant barriers to participation.

(5)  Promote coordinated program delivery, including coordination with low income weatherization programs, other efficiency programs, and utility programs.

(6)  Consider innovative approaches to delivering energy efficiency, including strategies to encourage third party financing and customer contributions to the cost of efficiency measures.

(7)  Provide a reasonably stable multiyear budget and planning cycle and in order to 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.    

(8)  Approve programs, measures, and delivery mechanisms that reasonably reflect current and projected market conditions, technological options, and environmental benefits.

(9)  Provide for delivery of these programs as rapidly as possible, taking into consideration the need for these services, and cost-effective delivery mechanisms.

(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 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.

(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.

(13)  Ensure that any energy efficiency program approved by the board shall be reasonable and cost-effective.

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

(15)  Ensure that the energy efficiency utility promotes strategies 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.

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

(1)  establish processes 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 of the expanded energy efficiency utility’s compensation on verified savings in energy usage and demand and on 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., or any successors in interest, under which the city and the Vermont Gas Systems, Inc., or any successors in interest, 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 comprehensive building efficiency strategies 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;

(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; and

(9)  permit the energy efficiency utility independently to report and recommend to the board, the general assembly, 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.

(h)  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. 33.  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 services 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.

* * * Forward Capacity Market Revenues * * *

Sec. 33a.  FORWARD CAPACITY MARKET REVENUES; ENERGY EFFICIENCY UTILITY

Forward capacity market revenues resulting from the activities of the energy efficiency utility of the state (EEU), designated under subsection 209 (d) of Title 30, shall go to the EEU to be used to further the ability to undertake cost effective energy efficiency activities as authorized under that section.

* * * Low Income Weatherization * * *

Sec. 34.  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.  Provisions for repayment of borrowed funds must be made 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 the department of public service; 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 committee on committees 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 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, with energy efficiency programs of the Burlington electric department and Vermont Gas Systems, Inc., and any successors in interest, and with 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 general assembly.

(h)  On or before January 30 of each year, the office of economic opportunity shall make a report to the house and senate committees on appropriations and on natural resources and energy utilizing existing resources within state government available in the office of economic opportunity’s weatherization data management system that compiles performance data available on households weatherized in the past year to include: 

(1)  number of households weatherized;

(2)  average program expenditure per household for energy efficiency;

(3)  average percent energy savings;

(4)  energy and nonenergy benefits combined;

(5)  benefits saved for every dollar spent;

(6)  average savings per unit for heating fuels;

(7)  gallons of oil saved related to equivalent number of homes heated;

(8)  projected number of households to be weatherized in the current program year; and

(9)  projected program expenditures for the current program year ending March 31.

(i)  The office of economic opportunity may 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.

* * * Energy Planning * * *

Sec. 35.  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, environmental impacts, 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, environmental impacts, 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, the projected level of pollution, 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 pollutants, including 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 pollution including 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 pollution including 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 pollution, including 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 pollution, including 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 pollution including greenhouse gases, and its plan to meet that demand and reduce that pollution including greenhouse gas emissions, together with such other information as the director deems desirable.

(3)  Work in conjunction with the energy efficiency utility 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 utility 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. 36.  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 pollution including 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 pollution including greenhouse gases, and environmentally sound energy supply.

Sec. 37.  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, 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 pollution including 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.

* * *

  * * * Biodiesel * * *

Sec. 38.  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, department of public service, and agency of transportation jointly shall submit a report to the house and senate committees on institutions, 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. 

(1)  The portion of the report prepared by the department of buildings and general services shall contain:

(A)  A summary of the current use of biodiesel blends in state office buildings.

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

(C)  A summary of any obstacles to increasing biodiesel use in state buildings.

(D)  A proposed work plan to increase biodiesel use.

(2)  The portion of the report prepared by the department of public service shall contain:

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

(B)  Recommendations for increasing biodiesel fuel production, storage facilities, and distribution facilities.

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

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

(E)  A proposed work plan to increase biodiesel use.

(3)  The portion of the report prepared by the agency of transportation shall contain:

(A)  A summary of the current use of biodiesel blends in state garages and the state transportation fleet.

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

(C)  A summary of any obstacles to increasing biodiesel use in state garages and the state transportation fleet.

(D)  A proposed work plan to increase biodiesel use.

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

* * * Energy Efficiency Mortgages * * *

Sec. 39.  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.

* * * Act 250 * * *

Sec. 40.  10 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.

* * * Transportation * * *

Sec. 41.  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 committee on committees, who jointly shall convene the committee.  In addition, the speaker of the house and the committee on committees 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 department of motor vehicles, the tourism industry, a regional transportation organization, a Vermont small business that relies heavily on the use of motor vehicles for its livelihood, the Alliance of Automobile Manufacturers Association, 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)  Recommendations regarding the use of tax and fee incentives and disincentives among and within vehicle weight classes for consumers to purchase fuel efficient and alternative fuel vehicles.

(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 and alternative fuel vehicles.

(4)  Recommendations for public education regarding efficient transportation.

(5)  Other recommendations regarding the efficient use of transportation services. 

(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.  The committee may meet up to four times.

* * * Right to Conserve Energy * * *

Sec. 42.  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 saving 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.

* * * Green Building, Efficiency, and

Renewable Energy Workforce Development * * *

Sec. 43.  GREEN BUILDING, EFFICIENCY, AND RENEWABLE ENERGY WORKFORCE DEVELOPMENT PLAN

(a)  Legislative Findings.  Vermont must implement a comprehensive green building, energy efficiency, and renewable energy workforce development plan in order to fill the well-paying jobs that will stay in Vermont and are essential to meeting the needs of the renewable energy and energy efficiency industry in order to meet our goals in regard to global climate change. 

(b) Workforce development plan.  The commissioner of labor shall develop a green building, energy efficiency, and renewable energy workforce development plan, in consultation with representatives to include the following:  the apprenticeship program; the building trades; the Vermont workforce development council; the association of weatherization contractors; Efficiency Vermont; Vermont Technical College; the association of general contractors; associated industries of Vermont; Vermont businesses for social responsibility; Vermont fuel dealers association; the coalition for workforce solutions; Renewable Energy Vermont; Vermont small business development centers; the  association of vocational-technical schools; the association of adult service coordinators; Vermont green building network; and the green institute for the advancement of sustainability.   

(c)  Contents of plan.  The plan developed under this section shall be included in a written report that shall be presented on or before March 1, 2008 to the house committees on commerce and on ways and means and to the senate committees on economic development, housing and general affairs and on finance.  The plan shall include:

(1)  Comprehensive recommendations for recruiting and training individuals for employment in the green building and renewable energy and energy efficiency fields.  The recommendations shall include goals for secondary and post-secondary schools, other educational institutions, workforce development organizations, and apprenticeship programs.

(2)  Recommendations for expanding certification programs for green builders and designers and installers of energy efficiency and renewable energy devices and systems.

(3)  Recommendations for incorporating energy efficiency and renewable energy training into apprenticeship and other training programs for electricians, plumbers, and other skilled trades persons.

(4)  Curricula for business development training and technical assistance for businesses that include green builders, energy efficiency designers and developers, and manufacturers of renewable energy and energy efficiency products.

(5)  Enhanced training programs for green builders and designers and weatherization professionals, including how to utilize state-of-the-art tools and materials.

Sec. 44.  COMPREHENSIVE ENERGY PLAN UPDATE

As part of the next update to the state comprehensive energy plan required by 30 V.S.A. § 202b, the department of public service shall evaluate and make specific recommendations on:

(1)  How to increase the energy efficiency of Vermont’s built environment, including strategies to increase the efficiency of new and existing residential, commercial, and industrial buildings, including industrial processes.

(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.

(Committee Vote: 6-1-0)

(For House amendments, see House Journal for April 4, 2007, page 527; April 5, 2007, page 533.)

H. 531

An act relating to ensuring success in health care reform.

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

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:

* * * Increasing Access to Affordable Health Care Coverage * * *

Sec. 1.  OUTREACH AND ENROLLMENT PRINCIPLES

In order to achieve the general assembly’s goal that 96 percent of Vermonters have health insurance by 2010, as expressed in subdivision 902(a)(3)(D) of Title 2, an aggressive and innovative outreach and enrollment plan based on the following principles will be necessary and should be applied in all outreach and enrollment efforts conducted for Catamount Health and state health care benefit programs, including premium assistance programs.  

(1)  Outreach for all health care programs, including Catamount Health and state health care benefit programs, should be coordinated throughout state government and be a priority for all agencies that administer such programs.

(2)  Outreach activities should proactively identify potentially eligible Vermonters, and use web‑based tools, an inquiry tracking system establishing a case file for potential applicants at the first point of contact, and professional staff, community volunteers, and organizations to assist with individualized screening, counseling, and application assistance. 

Sec. 2.  ACCESS TO HEALTH CARE PROGRAMS

(a)  The agency of human services shall make available to health care professionals, at the point of health care service or treatment, the necessary information, forms, access to eligibility or enrollment computer systems, and billing procedures to facilitate enrollment for individuals eligible for Medicaid, the Vermont health access plan, Dr. Dynasaur, any Global Commitment for Health waiver program, any state‑funded pharmacy program, Catamount Health, Catamount Health Assistance, or the employer‑sponsored‑insurance assistance program. 

(b)  No later than October 2007, the agency shall provide a single, uniform, simplified form to enable individuals to assess their potential eligibility for Medicaid, the Vermont health access plan, Dr. Dynasaur, any state‑funded pharmacy program, Catamount Health Assistance, or the employer‑sponsored‑insurance assistance programs.  Within a reasonable time frame, the agency shall develop web‑based application tools to ensure that any individual eligible for these programs has the opportunity to apply easily.  The agency shall determine if the individual is eligible and in which program the individual should be enrolled.  The agency shall refer applications for Catamount Health as appropriate. 

(c)  After submission of the application, the agency shall determine if the applicant meets full eligibility requirements.  Beginning January 1, 2008, if the individual is found eligible for the Vermont health access plan, the agency shall, subject to approval from the center for Medicare and Medicaid services, provide payment for any services received by the individual beginning with the date the application was received by the agency. 

Sec. 3.  33 V.S.A. § 1984 is amended to read:

§ 1984.  INDIVIDUAL CONTRIBUTIONS

(a)  The agency shall provide assistance to individuals eligible under this subchapter to purchase Catamount Health.  The For the lowest cost plan, the amount of the assistance shall be the difference between the premium for the lowest cost Catamount Health plan and the individual’s contribution as defined in this section subdivision (c)(1) of this section.  For plans other than the lowest cost plan, the assistance shall be the difference between the premium for the lowest cost plan and the individual’s contribution as set out in subdivision (c)(1) of this section.  

(b)  Subject to amendment in the fiscal year 2008 budget, the agency of administration or designee shall establish individual and family contribution amounts for Catamount Health under this subchapter for the first year as established in this section and shall index the contributions in future years to the overall growth in spending per enrollee in Catamount Health as established in section 4080f of Title 8.  The agency shall establish family contributions by income bracket based on the individual contribution amounts and the average family size.  In fiscal year 2008, for the lowest‑cost Catamount Health plan offered by all carriers, the individual’s contribution shall be as established in subsection (c) of this section.  The agency shall determine the percentages that the amounts in subsection (c) are of the lowest‑cost plan and set the individual’s contribution for any other plan at the percentage for that income level.  In future years, after adjusting the individual premiums in subsection (c) of this section, the same methodology shall be used to determine the individual premiums for any other plans.

(c)(1)  An For the lowest cost plan, an individual’s contribution shall be:

(1)(A)  Income less than or equal to 200 percent of FPL:  $60.00 per month.

(2)(B)  Income greater than 200 percent and less than or equal to 225 percent of FPL: $90.00 per month.

(3)(C)  Income greater than 225 percent and less than or equal to 250 percent of FPL:  $110.00 per month.

(4)(D)  Income greater than 250 percent and less than or equal to 275 percent of FPL:  $125.00 per month.

(5)(E)  Income greater than 275 percent and less than or equal to 300 percent of FPL:  $135.00 per month.

(6)(F)  Income greater than 300 percent of FPL:  the actual cost of Catamount Health.

(2)  For plans other than the lowest cost plan, an individual’s contribution shall be the sum of:

(A)  the applicable contribution as set out in subdivision (1) of this subsection; and

(B)  the difference between the premium for the lowest cost plan and the premium for the plan in which the individual is enrolled.  

* * * Blueprint * * *

Sec. 4.  DIRECTOR OF THE BLUEPRINT

In fiscal year 2008, there is established in the agency of administration one (1) new exempt position, to be titled the director of the blueprint for health, who shall report directly to the secretary or designee.  

Sec. 5.  18 V.S.A. § 702 is amended to read:

§ 702.  BLUEPRINT FOR HEALTH; STRATEGIC PLAN

(a)  As used in this section, “health insurer” shall have the same meaning as in section 9402 of this title.

(b)  In coordination with the secretary of administration under section 2222a of Title 3 the commissioner of health shall be responsible for The director of the blueprint, in collaboration with the commissioner of health, shall oversee the development and implementation of the blueprint for health, including the five‑year strategic plan.  Whenever private health insurers are concerned, the director shall collaborate with the commissioner of banking, insurance, securities, and health care administration.

(b)(c)(1)  The commissioner secretary shall establish an executive committee to advise the commissioner director of the blueprint on creating and implementing a strategic plan for the development of the statewide system of chronic care and prevention as described under this section.  The executive committee shall consist of no fewer than 10 individuals, including the commissioner of health, a representative from the department of banking, insurance, securities, and health care administration; the office of Vermont health access; the Vermont medical society; the Vermont program for quality in health care a statewide quality assurance organization; the Vermont association of hospitals and health systems; two representatives of private health insurers; consumer; a representative of the complementary and alternative medicine profession; and a primary care professional serving low income or uninsured Vermonters; and a representative of the state employees’ health plan, who shall be designated by the director of human resources and who may be an employee of the third party administrator contracting to provide services to the state employees’ health plan.  In addition, the director of the commission on health care reform shall be a nonvoting member of the executive committee.

(2)  The executive committee shall engage a broad range of health care professionals who provide services as defined under section 4080f of Title 18, health insurance plans, professional organizations, community and nonprofit groups, consumers, businesses, school districts, and state and local government in developing and implementing a five‑year strategic plan.

(c)(1)(d)  The blueprint shall be developed and implemented to further the following principles:

(1)  the primary care provider should serve a central role in the coordination of care and shall be compensated appropriately for this effort;

(2)  use of information technology will be maximized;

(3)  local service providers should be used and supported, whenever possible;

(4)  transition plans should be developed by all involved parties to ensure a smooth and timely transition from the current model to the blueprint model of health care delivery and payment;

(5)  implementation of the blueprint in communities across the state should be accompanied by payment to providers sufficient to support care management activities consistent with the blueprint, recognizing that interim or temporary payment measures may be necessary during early and transitional phases of implementation; and

(6)  interventions designed to prevent chronic disease and improve outcomes for persons with chronic disease should be maximized, should target specific chronic disease risk factors, and should address changes in individual behavior, the physical and social environment, and health care policies and systems. 

(e)(1)  The strategic plan shall include:

(A)  a description of the Vermont blueprint for health model, which includes general, standard elements established in section 1903a of Title 33, patient self‑management, community initiatives, and health system and information technology reform, to be used uniformly statewide by private insurers, third party administrators, and public programs;

(B)  a description of prevention programs and how these programs are integrated into communities, with chronic care management, and the blueprint for health model;

(C)  a plan to develop and implement reimbursement systems aligned with the goal of managing the care for individuals with or at risk for conditions in order to improve outcomes and the quality of care;

(D)  the involvement of public and private groups, health care professionals, insurers, third party administrators, associations, and firms to facilitate and assure the sustainability of a new system of care;

(E)  the involvement of community and consumer groups to facilitate and assure the sustainability of health services supporting healthy behaviors and good patient self‑management for the prevention and management of chronic conditions;

(F)  alignment of any information technology needs with other health care information technology initiatives;

(G)  the use and development of outcome measures and reporting requirements, aligned with existing outcome measures within the agency of human services, to assess and evaluate the system of chronic care;

(H)  target timelines for inclusion of specific chronic conditions to be included in the chronic care infrastructure and for statewide implementation of the blueprint for health;

(I)  identification of resource needs for implementation and sustaining the blueprint for health and strategies to meet the needs; and

(J)  a strategy for ensuring statewide participation no later than January 1, 2009 2011 by health insurers, third‑party administrators, health care professionals, hospitals and other professionals, and consumers in the chronic care management plan, including common outcome measures, best practices and protocols, data reporting requirements, payment methodologies, and other standards.  In addition, the strategy should ensure that all communities statewide will have implemented at least one component of the blueprint by January 1, 2009. 

(2)  The strategic plan shall be reviewed biennially and amended as necessary to reflect changes in priorities.  Amendments to the plan shall be reported to the general assembly included in the report established under subsection (d)(i) of this section.

(f)  The director of the blueprint shall facilitate timely progress in adoption and implementation of clinical quality and performance measures as indicated by the following benchmarks:

(1)  by July 1, 2007, clinical quality and performance measures are adopted for each of the chronic conditions included in the Medicaid Chronic Care Management Program.  These conditions include, but are not limited to, asthma, chronic obstructive pulmonary disease, congestive heart failure, diabetes, and coronary artery disease.

(2)  at least one set of clinical quality and performance measures will be added each year and a uniform set of clinical quality and performance measures for all chronic conditions to be addressed by the blueprint will be available for use by health insurers and health care providers by January 1, 2010. 

(3)  in accordance with a schedule established by the blueprint executive committee, all clinical quality and performance measures are reviewed for consistency with those used by the Medicare program and updated, if appropriate. 

(g)  The director of the blueprint shall facilitate timely progress in coordination of chronic care management as indicated by the following benchmarks:

(1)  by October 1, 2007, risk stratification strategies are used to identify individuals with or at risk for chronic disease and to assist in the determination of the severity of the chronic disease or risk thereof, as well as the appropriate type and level of care management services needed to manage those chronic conditions.

(2)  by January 1, 2009, guidelines for promoting greater commonality, consistency, and coordination across health insurers in care management programs and systems are developed in consultation with employers, consumers, health insurers, and health care providers.  

(3)  beginning July 1, 2009, and each year thereafter, health insurers, in collaboration with health care providers, report to the secretary on evaluation of their disease management programs and the progress made toward aligning their care management program initiatives with the blueprint guidelines. 

(h)(1)  No later than January 1, 2009, the director shall, in consultation with employers, consumers, health insurers, and health care providers, complete a comprehensive analysis of sustainable payment mechanisms.  No later than January 1, 2009, the director shall report to the health care reform commission and other stakeholders, his or her recommendations for sustainable payment mechanisms and related changes needed to support achievement of blueprint goals for health care improvement, including the essential elements of high quality chronic care, such as care coordination, effective use of health care information by physicians and other health care providers and patients, and patient self‑management education and skill development. 

(2)  By January 1, 2009, and each year thereafter, health insurers will participate in a coordinated effort to determine satisfaction levels of physicians and other health care providers participating in the blueprint care management initiatives, and will report on these satisfaction levels to the director and in the report established under subsection (i) of this section.

(d)(1)(i)  The commissioner of health director shall report annually, no later than January 1, on the status of implementation of the Vermont blueprint for health for the prior calendar year, and shall provide the report to the house committee on health care, the senate committee on health and welfare, the health access oversight committee, and the commission on health care reform.  The report shall include the number of participating insurers, health care professionals and patients; the progress for achieving statewide participation in the chronic care management plan, including the measures established under subsection (c)(e) of this section; the expenditures and savings for the period; the results of health care professional and patient satisfaction surveys; the progress toward creation and implementation of privacy and security protocols; information on the progress made toward the requirements in subsections (g) and (h) of this section; and other information as requested by the committees.  The surveys shall be developed in collaboration with the executive committee established under subsection (b)(c) of this section.

(2)  If statewide participation in the blueprint for health is not achieved by January 1, 2009, the commissioner shall evaluate the blueprint for health and recommend to the general assembly changes necessary to create alternative measures to ensure statewide participation by health insurers, third party administrators, and health care professionals.

(j)  It is the intent of the general assembly that health insurers shall participate in the blueprint for health no later than January 1, 2009 and shall engage health care providers in the transition to full participation in the blueprint. 

Sec. 6.  Blueprint for Health: Plan for Regulatory Enforcement

(a)  Findings:

(1)  The blueprint for health is based on a voluntary collaborative approach which has to date achieved significant progress toward its goals. 

(2)  If, based on the  director’s annual report required by subsection 702(i) of Title 18, it appears that a voluntary approach is unlikely to meet the goal set forth in subsection 702(j) of Title 18, a regulatory approach will become necessary. 

(b)  The commissioner of banking, insurance, securities, and health care administration is directed to prepare an implementation plan, including recommendations for enhanced authority, outlining the steps necessary to ensure that health insurers will successfully implement the blueprint by January 1, 2009.  The implementation plan need not address Medicaid, the Vermont health access plan, Dr. Dynasaur, any Global Commitment for Health waiver program, any state‑funded pharmacy program, Catamount Health Assistance, or the employer‑sponsored‑insurance assistance program.  This plan should be delivered to the senate committee on health and welfare, the house committee on health care, and the commission on health care reform by January 1, 2008.

* * * Integrating Care Coordination and
Payment Reform into the Blueprint * * *

Sec. 7.  INTEGRATED EARLY IMPLEMENTATION OF BLUEPRINT PROGRAMS

(a)(1)  Findings.

(A)  A core goal of the blueprint for health is to create a greater degree of cohesiveness in the delivery of care to people with chronic conditions.

(B)  Given the complexity of the health care delivery system, it is necessary to test, within a small number of early implementation communities, how to integrate the various key components of the chronic care model.

(C)  Health insurers currently assume the costs (both in claims costs and administrative expenses for existing disease management programs) for care coordination and for provider payment.

(2)  Purpose and intent.  It is the intent of the general assembly that all health insurers, including those who offer the state employees’ health plan or who administer chronic care management for state health benefits programs, shall voluntarily participate in early implementation projects.

(b)  The director shall establish early implementation projects necessary to demonstrate and evaluate best practices in the integration and delivery of chronic care as part of the blueprint for health.  Projects shall include those listed in subsections (e), (f), and (g) of this section.  The director shall develop the projects using the medical home project as the baseline and shall consider the options for community‑based care coordination described in subsection (f) and the options for payment reform described in subsection (g) of this section as options for the final design of the early implementation projects.  The director shall, in designing these early implementation projects, integrate the other components of the blueprint such as patient self‑management, the use of decision support tools such as the chronic care information system, and the development of community resources. 

(c)  Early implementation projects shall meet the following criteria:

(1)  Communities.  The implementation should occur concurrently within one or more of the existing blueprint communities and, if the director approves, in the Vermont rural health alliance.   

(2)  Timetable.  The program design, integration and implementation plan, and selection of the initial community for the early implementation projects should be completed by October 1, 2007.  Implementation in the initial community should be commenced by January 1, 2008.  Implementation into at least one additional community should begin by July 1, 2008. 

(3)  Evaluation.  The implementation plan should include ongoing structured feedback from the major stakeholders to help inform the implementation while it is occurring, and, as part of the annual report required by 18 V.S.A. § 702(i), a more formal evaluation after one year of operation.  During implementation, the director shall consult with the commissioner of banking, insurance, securities, and health care administration to determine whether statewide implementation of the early implementation projects would have an impact on health insurance premium rates, and the extent to which implementation costs would be offset by reduced administration costs or savings in medical claims.  

(d)  For fiscal year 2008, the department of health shall provide a grant to the Vermont rural health alliance for the early implementation projects described in this section upon the approval by the commissioner and upon receipt by the alliance of $185,000.00 of federal grant or other matching funds. 

(e)  Medical home project chronic care management systems integration.

(1)  The director, with assistance from the commissioner of health, the director of the office of Vermont health access, the commissioner of human resources, and the commissioner of banking, insurance, securities, and health care administration, shall establish a medical home project for use with Medicaid beneficiaries, Catamount Health, and the state employees’ health plan.  The director shall also encourage other health insurers to participate in the project and adopt and pay similar care management fees.

(2)  The project shall facilitate provision of accessible, continuous, and coordinated family‑centered care to high‑need populations.  The project shall ensure that:

(A)  Medicaid, Catamount Health carriers, and the state employees’ health plan pay care management fees to primary care providers providing care management under the project and in compliance with subsection (e) of this section;

(B)  incentive payments for demonstrated compliance with established clinical protocols are paid to primary care providers participating in practices that provide services as a medical home.

(3)  The director, with assistance from the commissioner of health, the director of the office of Vermont health access, the commissioner of human resources, and the commissioner of banking, insurance, securities, and health care administration, shall develop a care management fee schedule and shall determine the amount of care management and incentive payments. 

(4)  A primary care provider participating in the project shall:

(A)  Provide ongoing support, oversight, and guidance to implement a plan of care that provides an integrated, coherent, cross‑discipline plan for ongoing medical care developed in partnership with patients and including all other physicians furnishing care to the patient.  

(B)  Use evidence‑based medicine and clinical decision support tools to guide decision‑making at the point of care based on patient‑specific factors.

(C)  Use health information technology, which may include remote monitoring and patient registries, to monitor and track the health status of patients and to provide patients with enhanced and convenient access to health care services.

(D)  Encourage patients to engage in the management of their own health through education and community support systems, including the blueprint healthier living workshops or similar evidence‑based, self‑management tools. 

(5)  The director shall include an evaluation of this project for the previous calendar year, with recommendations for expansion of the project, in the annual report required by 18 V.S.A. § 702(i). 

(6)  To the extent that it is not inconsistent with provisions herein, this section shall be construed in accordance with the terms and conditions of the Tax Relief and Health Care Act of 2006, Pub. L. No. 109‑432, § 204, 120 Stat 2922, 2987–89 (2006) (Medicare Medical Home Demonstration Project). 

(7)  For purposes of this subsection:

(A)  “Coordinated care management” is a system that includes at least the following components:

(i)  population identification processes;

(ii)  evidence‑based practice guidelines;

(iii)  collaborative practice models to include physician and support‑service providers;

(iv)  patient self‑management education, which may include primary prevention, behavior modification programs, and compliance surveillance;

(v)  process and outcome measurement, evaluation, and management; and

(vi)  routine reporting and sharing of information among the patient, primary care provider, ancillary providers, and health insurers.

(B)  “Health insurer” shall have the same meaning as in section 9402 of this title.

(C)  “High‑need population” means individuals with chronic illnesses that require regular medical monitoring, advising, or treatment areas.

(D)  “Medical home” means a primary care provider practice that is responsible for:

(i)  targeting patients for participation in the project; and

(ii)  providing safe and secure technology to promote patient access to personal health information;

(iii)  developing a health assessment tool for the individuals targeted; and

(iv)  providing training programs for personnel involved in the coordination of care.

(E)  “Primary care provider” means a health care provider who:

(i)  is board certified, if applicable;

(ii)  provides first contact and continuous care for individuals under his or her care; and

(iii)  has staff and resources sufficient to manage the comprehensive and coordinated health care of each such individual.

(f)  Community‑based care coordination.

(1)  The director shall encourage the development of community‑based care coordination teams, which will provide local support to primary care providers in a community, particularly those serving as medical homes to patients with chronic conditions.  Such teams will collaborate with the medical home practices to:

(A)  Devise care plans through assessment of current treatments, services, and resources that directly address patients’ needs.

(B)  Ensure patient compliance with the care plan and monitor appropriate emergency room use, hospitalizations, length of stay, and discharge planning.

(C)  Strive to enhance the relationship between the patient and his or her medical home, and to educate patients on how to become more proactive in meeting their own health care needs.

(D)  Utilize community‑based resources, where feasible, to support the formation of care plans, to ensure compliance with such care plans, and to enhance patient education.

(2)  The director, supported by the commissioner of health, the director of the office of Vermont health access, and the commissioner of banking, insurance, securities, and health care administration, and in collaboration with health insurers, as defined in section 9402 of Title 18, shall examine methods of funding, including the use of funds from existing disease management programs, to support community based care coordination teams.

(g)  Chronic care payment reform.  In addition to the care management fee and incentive payments to be made pursuant to the medical home project required by subsection (e) of this section, the director should consider other payment reforms in the early implementation of blueprint programs, such as: 

(1)  A bundled payment provided on a monthly basis that includes 90 percent of the cost associated with providing all evidence‑based preventive services for the applicable chronic disease state, as developed in the blueprint.  Additional payments of up to 10 percent could be provided in cases where all of the recommended evidence‑based preventive services are provided.

(2)  Separate fee‑for‑service payments for office visits (Payments for care management services that fall outside the office visit should not result in a reduction in payments for office visits.).

(3)  Other projects designed to set payment based on the quality of the outcome, which may include projects such as shared savings for reductions in hospitalizations associated with physician‑coordinated care management in the office setting.

* * * Support for Primary Care Providers * * *

Sec. 8.  PRIMARY CARE PROVIDERS; NURSE AUTHORITY STUDY; AHEC APPROPRIATION

(a)  Findings:

(1)  Primary care providers are essential to the success of the blueprint.

(2)  Loan repayment is an essential component of recruiting and retaining a strong primary care provider workforce. 

(b)  No later than September 1, 2007, the commissioner of health, the director of the office of professional regulation, and the board of nursing shall establish a work group to study and make recommendations on the advisability of eliminating the requirement for an advance practice nurse to work in a collaborative practice with a licensed physician, with the goal of evaluating whether advance practice nurses might serve a greater role as primary care providers who provide essential chronic care management.  The work group shall include a representative of the Vermont Nurse practitioner association and a representative of the medical practice board.  The work group shall make its recommendations in a report delivered to the house committee on health care, the senate committee on health and welfare, and the commission on health care reform no later than January 15, 2008. 

Sec. 9.  18 V.S.A. § 9409a is added to read: 

§ 9409a.  Health care insurance reimbursement survey

In order to understand the impact of reimbursement on access to health care, the cost shift, the workforce shortages and recruitment and retention of health care professionals, the commissioner shall annually survey health insurers to determine the reimbursement paid for the ten most common billing codes for primary care health services.  Each insurer shall report the average reimbursement paid for a specific service.  The survey shall be managed by the department of banking, insurance, securities, and health care administration, and any public reports shall be sufficiently aggregated so that they would not enable readers to determine the amount of reimbursement paid for specific services to any particular provider or facility.  No provider‑specific or facility‑specific reimbursement information shall be included in the public survey reports, or be available through public records requests.  When published, survey data will be at least 90 days old.  Only the department will have access to the underlying survey responses.  The department shall provide a copy of the survey results to the house committee on health care and the senate committee on health and welfare.

Sec. 10.  3 V.S.A. § 631 is amended to read:

§ 631.  GROUP INSURANCE FOR STATE EMPLOYEES; SALARY DEDUCTIONS FOR INSURANCE, SAVINGS PLANS, AND CREDIT UNIONS

(a)(1)  The secretary of administration may contract on behalf of the state with any insurance company or nonprofit association doing business in this state to secure the benefits of franchise or group insurance.  Beginning July 1, 1978, the terms of coverage under the policy shall be determined under section 904 of this title, but it may include:

(A)  life, disability, health, and accident insurance and benefits for any class or classes of state employees; and

(B)  hospital, surgical, and medical benefits for any class or classes of state employees or for those employees and any class or classes of their dependents.

* * *

(c)(1)  At least every five years, the secretary of administration shall advertise for bids on the insurance contracts and shall award the contract to the person whose bid or quotation is in the best interest of the state.  The secretary of administration may reject any bids or quotations and may request additional bids.  Upon publication of the request for proposals, health care professional and trade associations may register with the secretary of administration to be provided a list of bidders.  Such associations may then submit information about the business practices of the bidders for the secretary of administration to consider in the course of evaluating bids and request meetings with the secretary to discuss the information. 

(2)  Annually, the secretary of administration shall submit a report to the house committee on health care and the senate committee on health and welfare that includes:

(A)  an assessment of the status of alignment between chronic care management programs provided to state employees through the health coverage benefit and the Vermont blueprint for health strategic plan developed under section 702 of Title 18;

(B)  the results of provider satisfaction assessments, developed in consultation with health care professional and trade associations, the blueprint director, and the commissioner of health, which assessments shall be designed to evaluate whether the contractor for administrative services for health benefits has created and maintained adequate provider networks and has entered into participating provider agreements designed to effectively and efficiently compensate providers for delivering services in a manner consistent with the blueprint for health principles.

(C)  if the secretary determines that provider satisfaction levels are creating a barrier to successful implementation of the blueprint for health for the state employees health plan, an action plan to improve provider satisfaction relative to the blueprint implementation and institute changes to the chronic care management program.  Prior to the secretary’s determination, health care professional and trade associations may request the opportunity to meet with the secretary to review and discuss the results of the provider satisfaction assessments.

(3)  At least annually, the secretary shall hold discussions with established health care professional and trade associations in regard to provider regulation, provider reimbursement, or quality of health care. 

* * *

* * * Health Information Technology * * *

Sec. 11.  22 V.S.A. § 903 is added to read:

§ 903.  HEALTH INFORMATION TECHNOLOGY

(a)  The commissioner shall facilitate the development of a statewide health information technology plan that includes the implementation of an integrated electronic health information infrastructure for the sharing of electronic health information among health care facilities, health care professionals, public and private payers, and patients.  The plan shall include standards and protocols designed to promote patient education, patient privacy, physician best practices, electronic connectivity to health care data, and, overall, a more efficient and less costly means of delivering quality health care in Vermont.

(b)  The health information technology plan shall:

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

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

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

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

(5)  recommend funding mechanisms for the ongoing development and maintenance costs of a statewide health information system, including funding options and an implementation strategy for a loan and grant program;

(6)  incorporate the existing health care information technology initiatives in order to avoid incompatible systems and duplicative efforts;

(7)  integrate the information technology components of the blueprint for health established in chapter 13 of Title 18, the global clinical record, and all other Medicaid management information systems being developed by the office of Vermont health access, information technology components of the quality assurance system, the program to capitalize with loans and grants electronic medical record systems in primary care practices, and any other information technology initiatives coordinated by the secretary of administration pursuant to section 2222a of Title 3; and

(8)  address issues related to data ownership, governance, and confidentiality and security of patient information.

(c)(1)  The commissioner shall contract with the Vermont information technology leaders (VITL), a broad‑based health information technology advisory group that includes providers, payers, employers, patients, health care purchasers, information technology vendors, and other business leaders, to develop the health information technology plan, including applicable standards, protocols, and pilot programs.  In carrying out their responsibilities under this section, members of VITL shall be subject to conflict of interest policies established by the commissioner to ensure that deliberations and decisions are fair and equitable.

(2)  VITL shall be designated in the plan to operate the exclusive

statewide health information exchange network for this state, notwithstanding the provisions of subsection (g) of this section requiring the recommendation of the commissioner and the approval of the general assembly before the plan can take effect.  Nothing in this section shall impede local community providers from the exchange of electronic medical data.

(d)  The following persons shall be members of VITL:

(1)  the commissioner, who shall advise the group on technology best practices and the state’s information technology policies and procedures, including the need for a functionality assessment and feasibility study related to establishing an electronic health information infrastructure under this section;

(2)  the director of the office of Vermont health access or his or her designee;

(3)  the commissioner of health or his or her designee; and

(4)  the commissioner of banking, insurance, securities, and health care administration or his or her designee.

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

(1)  Objectives of the pilot program shall include:

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

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

(2)  Objectives of the pilot program may include:

(A)  determining whether and how best to expand the pilot program on a statewide basis;

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

(C)  ensuring patient data confidentiality at all times.

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

(g)  On or before January 1, 2007, VITL shall submit to the commission on health care reform, the secretary of administration, the commissioner, the commissioner of banking, insurance, securities, and health care administration, the director of the office of Vermont health access, the senate committee on health and welfare, and the house committee on health care a preliminary health information technology plan for establishing a statewide, integrated electronic health information infrastructure in Vermont, including specific steps for achieving the goals and objectives of this section.  A final plan shall be submitted July 1, 2007.  The plan shall include also recommendations for self‑sustainable funding for the ongoing development, maintenance, and replacement of the health information technology system.  Upon recommendation by the commissioner and approval by the general assembly, the plan shall serve as the framework within which certificate of need applications for information technology are reviewed under section 9440b of Title 18 by the commissioner.

(h)  Beginning January 1, 2006, and annually thereafter, VITL shall file a report with the commission on health care reform, the secretary of administration, the commissioner, the commissioner of banking, insurance, securities, and health care administration, the director of the office of Vermont health access, the senate committee on health and welfare, and the house committee on health care.  The report shall include an assessment of progress in implementing the provisions of this section, recommendations for additional funding and legislation required, and an analysis of the costs, benefits, and effectiveness of the pilot program authorized under subsection (e) of this section, including, to the extent these can be measured, reductions in tests needed to determine patient medications, improved patient outcomes, or reductions in administrative or other costs achieved as a result of the pilot program.  In addition, VITL shall file quarterly progress reports with the secretary of administration and the health access oversight committee and shall publish minutes of VITL meetings and any other relevant information on a public website.

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

(j)  The commissioner, in consultation with VITL, may seek any waivers of federal law, of rule, or of regulation that might assist with implementation of this section.

(k)  VITL, in collaboration with the commissioner, health insurers, the Vermont Association of Hospitals & Health Systems, Inc., and other departments and agencies of state government, shall establish a loan and grant program to provide for the capitalization of electronic health records systems in blueprint communities and at other primary care practices serving low and moderate income Vermonters.  Health information technology acquired under a grant or loan authorized by this section shall comply with data standards for interoperability adopted by VITL and the state health information technology plan.  An implementation plan for this loan and grant program shall be incorporated into the state health information technology plan.

Sec. 12.  HEALTH INFORMATION TECHNOLOGY INTERIM FUND AND ELECTRONIC HEALTH RECORD PILOT PROGRAM

(a)  Purpose.  It is the intent of the general assembly that use of electronic health records for all Vermonters shall be promoted and encouraged.  The general assembly recognizes that the use and sharing of electronic health records has the potential to improve the quality of care delivered to Vermonters and, in the long term, to help contain increases in the costs of medical care.  Since many providers, especially primary care providers serving low and moderate income Vermonters, lack the capital to acquire the information technology necessary to implement electronic health records for their patients, a financing program is needed to facilitate the adoption of electronic health record use by providers. 

(b)  For the purposes of this section:

(1)  “Commissioner” shall mean the commissioner of the department of information and innovation.

(2)  “Department” shall mean the department of information and innovation.

(3)  “Pilot site” shall mean a blueprint community and primary care providers serving low and moderate income Vermonters in other communities. 

(c)  VITL shall establish a health information technology fund which shall be used only during the duration of the electronic health record pilot program described in this section.  The interim fund shall be used for the purposes of:

(1)  encouraging and facilitating the development and utilization of electronic health records by pilot sites; and

(2)  promoting the sharing of electronic health records using the Vermont health information infrastructure created and managed by the Vermont health technology leaders. 

(d)  VITL and the secretary of administration shall engage in activities designed to achieve the goal of raising at least $1 million for the interim fund created by this section and shall seek to raise these funds from a broad range of stakeholders who would benefit from electronic health records, including commercial health insurers, in relation to the number of insured and self‑insured lives each services in Vermont, the Vermont Association of Hospitals & Health Systems, Inc., self‑insured employers, other payers, and other sources.  On or before September 1, 2007, VITL and the secretary of administration shall report the results of the fundraising activities to the house committee on health care, the senate committee on health and welfare and the commission on health care reform. 

(e)  On or before October 1, 2007, VITL shall issue a request for proposals:

(1)  to provide computer software or systems, or both, in connection with the development and implementation of a system to enable electronic health records use by pilot sites; and

(2)  for implementation consulting vendors to assist pilot sites with related training and system configuration support and upgrades to enable the implementation and use of electronic health record systems.  

(f)  On or before November 1, 2007, VITL shall establish criteria and award conditions for the selection of pilot sites. 

(g)  On or before January 1, 2008, VITL shall commence awarding pilot sites licenses to implement electronic health record systems making use of the vendors selected in the process described in subsection (d) of this section. 

(h)  VITL shall include in the annual report required pursuant to section 9417 of Title 18 information concerning the interim fund and pilot program created pursuant to this section and shall additionally provide that report to the commissioner of the department of health.  Information concerning this program in the report shall include:

(1)  an assessment of progress in implementing the provisions of this section including the acceptance of electronic health record use by providers, patients, and payers;

(2)  recommendations for additional funding and legislation required; and

(3)  an analysis of the costs, benefits, and effectiveness of the health information technology fund.   

(i)  VITL may use a portion of the interim fund for its costs in implementing and managing the electronic health record pilot program.

* * * Other Provisions * * *

Sec. 13.  33 V.S.A. § 1986(d) is amended to read:

(d)  All monies received by or generated to the fund shall be used only as allowed by appropriation of the general assembly for the administration and delivery of the Catamount Health assistance program under this subchapter, employer‑sponsored insurance premium assistance under section 1974 of this title, immunizations under section 1130 of Title 18, development and implementation of the blueprint for health under section 702 of title 18, and the nongroup health insurance market assistance under section 4062d of Title 8, and for transfers to the state health care resources fund established in section 1901d of this title as approved by the general assembly.

Sec. 14.  33 V.S.A. § 1974(c)(3) is amended to read:

(3)  The premium assistance program under this subsection shall provide a subsidy of premiums or cost-sharing amounts based on the household income of the eligible individual, with greater amounts of financial assistance provided to eligible individuals with lower household income and lesser amounts of assistance provided to eligible individuals with higher household income.  Until an approved employer-sponsored plan is required to meet the standard in subdivision (4)(B)(ii) of this subsection, the subsidy shall include premium assistance and assistance to cover all cost-sharing amounts for chronic care health services covered by the Vermont health access plan that are related to evidence-based guidelines for ongoing prevention and clinical management of the chronic condition specified in the blueprint for health in section 702 of Title 18.  

Sec. 15.  8 V.S.A. § 4080f(f)(1) is amended to read:

(f)(1)  Except as provided for in subdivision (2) of this subsection, the carrier shall pay health care professionals the least of contracted rates for such professionals, billed charges, or, using the Medicare payment methodologies, at a level ten percent greater than for levels paid under the Medicare program in 2006.  Payments based on Medicare payment methodologies under this subsection shall be indexed to the Medicare economic index developed by the Centers for Medicare and Medicaid Services.

Sec. 16.  REPEAL

18 V.S.A. § 9417 (health information technology) is repealed.

Sec. 17.  EFFECTIVE DATE

     Secs. 4 and 15 of this act shall take effect upon passage.  All other sections shall take effect July 1, 2007. 

(Committee Vote: 6-0-0)

(For House amendments, see House Journal for April 4, 2007, page 565.)

House Proposals of Amendment

S. 54

An act relating to motor vehicle wreckers.

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

      First:  In Sec. 1, by striking out 23 V.S.A. § 4(51) and inserting in lieu thereof a new subdivision (51) to read as follows:

(51)  “Single-axle tow dolly” is a vehicle towed by a self-propelled motor vehicle and designed and used exclusively to transport another self-propelled motor vehicle which shall not be required to be registered and upon which the front or rear wheels of the towed self-propelled motor vehicle are mounted, while other the wheels of the towed self-propelled motor vehicle remain in contact with the ground.  These vehicles shall not be subject to registration or titling nor shall they be treated as a separate vehicle when used in combination with another vehicle.  They shall be subject to equipment safety requirements.

     Second:  In Sec. 2, 23 V.S.A. § 4(76) by striking out the word "inoperable"

Third:    In Sec. 2, 23 V.S.A. § 4(77) by adding a new sentence after the period to read as follows:  "The towed vehicle shall not be required to be registered."

S. 78

An act relating to having the cost of picking up and hauling milk paid by the purchaser.

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

Sec. 1.  FINDINGS

The general assembly finds:

(1)  Dairy farmers contribute $1 million a day to the economy of Vermont, provide about 7,500 farm jobs, account for $426 million annually in sales for Vermont businesses that interact with dairy farmers, and support businesses, including veterinarians, grain dealers, equipment sales, farm insurance, and other dairy suppliers;

(2)  In January of 2007, there were 1,137 dairy farms with 142,000 milking cows, generating over $2 billion annually in Vermont’s economy through production, employment, and business interaction.

(3)  Vermont's conventional dairy farmers have lost purchasing power in recent decades because the farm gate price paid for their milk has not kept pace with inflation. In 1980, the average price paid was $13.06, which, when adjusted for inflation, is equivalent to $30.95 in 2006 dollars. The average price for milk in 2006 was $12.88.

(4)  The pricing system for payments to farmers for their milk is broken; farmers continue to receive a price for their milk that is below the cost of production.

(5)  Milk and milk products are used as ingredients in thousands of foods, including baked goods, snack food, baby formula, and pet food.  Milk products are used in sit-down and fast food restaurants.  Dairy products are featured in a large proportion of the space in supermarkets.

Sec. 2.  PURPOSE

The purpose of this act is:

(1) to enable Vermont dairy farmers, processors, and retailers and their supporting infrastructure to achieve a positive return on their labor and investment. 

(2) to ensure the continuing economic vitality of the dairy industry by stabilizing the price received by farmers for their milk at a level allowing them an equitable rate of return.

(3) to achieve an over-order premium that will offset the hauling and stop charges assessed against dairy farmers.

Sec. 3.  VERMONT MILK COMMISSION ESTABLISHING AN OVER ORDER PREMIUM

(a) The Vermont milk commission shall establish by rule, pursuant to its authority under chapter 161 of Title 6, an over order premium on Class I fluid cows’ milk, consistent with accepted pricing mechanisms at the farm gate.

(b) In establishing the over-order premium, the commission shall investigate and ascertain what are reasonable costs and charges for producing, hauling and stop charges, handling, processing and any other services performed in respect to fluid dairy products.

Sec. 4.  6 V.S.A. § 2937 is added to read:

§ 2936.  ANNUAL REPORT

The commission shall report annually on its activities to the house and senate committees on agriculture on or before January 15, beginning in 2009.

Sec. 5.  EFFECTIVE DATE; RULE; REPORT

(a)  This act shall take effect on passage.

(b) The milk commission shall commence the rulemaking process necessary to implement the provisions of this act within 60 days of the effective date.

(c)  The rule shall take effect only if, by rule or legislation, New York and Pennsylvania have enacted substantially comparable provisions for their dairy farmers.

(d)  The milk commission shall report the progress being made on implementing Sec. 3(a) of this act and findings from Sec. 3(b) of this act to the house and senate committees on agriculture on or before November 1, 2007.

and that, upon passage, the title shall read “AN ACT RELATING TO THE VERMONT MILK COMMISSION ESTABLISHING AN OVER ORDER PREMIUM”

S. 91

An act relating to the department of banking, insurance, securities and health care administration.

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

First:  In Sec. 5., in the first sentence, after “directors” by striking “and approved by the commissioner” and inserting in lieu thereof “and approved by the commissioner”

Second:  After Sec. 13, by inserting four new sections to be Secs. 14, 15, 16, and 17 to read as follows:

Sec. 14.  8 V.S.A. § 6001(4) is amended to read:

(4)  “Captive insurance company” means any pure captive insurance company, association captive insurance company, sponsored captive insurance company, industrial insured captive insurance company, or risk retention group, or special purpose financial captive insurance company formed or licensed under the provisions of this chapter.  For purposes of this chapter, a branch captive insurance company shall be a pure captive insurance company with respect to operations in this state, unless otherwise permitted by the commissioner.

Sec. 15.  8 V.S.A. § 6014(c) and (e) are amended to read:

(c)  The annual minimum aggregate tax to be paid by a captive insurance company calculated under subsections (a) and (b) of this section shall be $7,500.00, and the annual maximum aggregate tax shall be $200,000.00.  The maximum aggregate tax to be paid by a sponsored captive insurance company shall apply to each protected cell only and not to the sponsored captive insurance company as a whole.  If a captive insurance company is a special purpose financial captive organized and licensed under subchapter 4 of this chapter and if such captive insurance company is subject to subsection (e) of this section as a captive insurance company under common ownership and control with one or more other captive insurance companies (collectively, the “consolidated group”), the premium tax calculated with respect to the consolidated group under subsections (a) and (b) of this section shall be allocated to each member of the consolidated group in the same proportion that the premium allocable to such member bears to the total premium of all members.  The consolidated group shall pay an aggregate premium tax equal to the greater of the sum of the premium tax allocated to the members and $7,500.00; provided: 

(1)  If the premium tax allocated to a member that is a special purpose financial captive exceeds $200,000.00, the premium tax allocated to such member shall be $200,000.00; and

(2)  If the total of premium tax allocated to all members of the consolidated group that are not special purpose financial captive insurance companies exceeds $200,000.00, the total of premium tax allocated to such members shall be $200,000.00.

* * *

(e)  Two Subject to the provisions of subsection (c) of this section, two or more captive insurance companies under common ownership and control shall be taxed, as though they were a single captive insurance company.    

Sec. 16.  8 V.S.A. § 6035 is amended to read:

§ 6035.  QUALIFICATION OF SPONSORS

A sponsor of a sponsored captive insurance company shall be an insurer licensed under the laws of any state, a reinsurer authorized or approved under the laws of any state, a captive insurance company formed or licensed under this chapter, a broker‑dealer registered with the department pursuant to chapter 150 of title 9, a financial institution as defined under subdivision 11101(32) of this title, or a financial institution holding company as defined under subdivision 11101(33) of this title, including any affiliate or subsidiary of such financial institution holding company, or any other person approved by the commissioner in the exercise of his or her discretion, after finding that the approval of a person as a sponsor is not inconsistent with the purposes of this chapterA risk retention group shall not be either a sponsor or a participant of a sponsored captive insurance company.

Sec. 17.  Subchapter 4 of chapter 141 of Title 8 is added to read:

Subchapter 4.  Special Purpose Financial Captive Insurance Companies

§ 6048a.  Applicable Law

(a)  A special purpose financial captive insurance company shall be subject to the provisions of this subchapter and to the provisions of subchapter 1 of this chapter.  In the event of any conflict between the provisions of this subchapter and the provisions of subchapter 1 of this chapter, the provisions of this subchapter shall control.

(b)  A special purpose financial captive insurance company shall be subject to all applicable rules adopted pursuant to section 6015 of this chapter that are in effect as of the effective date of this subchapter and that are promulgated after the effective date of this subchapter.

(c)  The commissioner may, by order, exempt a special purpose financial captive insurance company from any provision of this chapter or from any rule adopted pursuant to section 6015 of this chapter if the commissioner determines such provision to be inappropriate based on the special purpose financial captive insurance company’s plan of operation. 

§ 6048b.  Existing Licenses

Except as otherwise determined by the commissioner, a captive insurance company that has been licensed by the commissioner pursuant to this chapter as of the effective date of this subchapter and that is engaged in or that will be engaged in an insurance securitization shall be subject to the provisions of this subchapter as a special purpose financial captive insurance company.  The commissioner may require such captive insurance company to take any action that the commissioner determines is reasonably necessary to bring such captive insurance company into compliance with the provisions of this subchapter.  The commissioner may issue an order described in section 6048d(b) with respect to such captive insurance company.

§ 6048c.  Definitions

For purposes of this subchapter:

(1)  “Ceding insurer” means an insurance company approved by the commissioner and licensed or otherwise authorized to transact the business of insurance or reinsurance in its state or country of domicile, which cedes risk to a special purpose financial captive insurance company pursuant to a reinsurance contract.

(2)  “Insolvency” and “insolvent” for purpose of applying the provisions of chapter 145 of this title to a special purpose financial captive insurance company, mean: 

(A)  That the special purpose financial captive insurance company is unable to pay its obligations when they are due, unless those obligations are the subject of a bona fide dispute; or

(B)  The special purpose financial captive insurance company has failed to meet all criteria and conditions for solvency of the special purpose financial captive insurance company established by the commissioner by rule or order.

(3)  “Insurance securitization” and “securitization” mean a transaction or a group of related transactions, which may include capital market offerings, that are effected through related risk transfer instruments and facilitating administrative agreements where all or part of the result of such transactions is used to fund the special purpose financial captive insurance company’s obligations under a reinsurance contract with a ceding insurer and by which: 

(A)  Proceeds are obtained by a special purpose financial captive insurance company, directly or indirectly, through the issuance of securities by the special purpose financial captive insurance company or any other person; or

(B)  A person provides one or more letters of credit or other assets for the benefit of the special purpose financial captive insurance company, which the commissioner authorizes the special purpose financial captive insurance company to treat as admitted assets for purposes of the special purpose financial captive insurance company’s annual report; where all or any part of such proceeds, letters of credit, or assets, as applicable, are used to fund the special purpose financial captive insurance company’s obligations under a reinsurance contract with a ceding insurer.  The terms “insurance securitization” and “securitization” do not include the issuance of a letter of credit for the benefit of the commissioner to satisfy all or part of the special purpose financial captive insurance company’s capital and surplus requirements under section 6048g of this chapter.

(4)  “Management” means the board of directors, managing board, or other individual or individuals vested with overall responsibility for the management of the affairs of the special purpose financial captive insurance company, including but not limited to officers or other agents elected or appointed to act on behalf of the special purpose financial captive insurance company.

(5)  “Organizational document” means: 

(A)  In the case of a special purpose financial captive insurance company formed as a stock corporation, the special purpose financial captive insurance company’s articles of incorporation and bylaws; and

(B)  In the case of a special purpose financial captive insurance company formed as a limited liability company, the special purpose financial captive insurance company’s articles of organization and operating agreement. 

(6)  “Security” shall have the same meaning as defined in 9 V.S.A.

§ 5102(28), and shall also include any form of debt obligation, equity, surplus certificate, surplus note, funding agreement, derivative, or other financial instrument that the commissioner designates, by rule or order, as a “security” for purposes of this subchapter.

(7)  “Special purpose financial captive insurance company” means a captive insurance company that has received a license from the commissioner to operate as a special purpose financial captive insurance company pursuant to this subchapter.

(8)  “Reinsurance contract” means a contract between a special purpose financial captive insurance company and a ceding insurer pursuant to which the special purpose financial captive insurance company agrees to provide reinsurance to the ceding insurer for risks associated with the ceding insurer’s insurance or reinsurance business.

(9)  “Special purpose financial captive insurance company security” means:

(A)  A security issued by a special purpose financial captive insurance company; or

(B)  A security issued by a third party, the proceeds of which are obtained directly or indirectly by a special purpose financial captive insurance company. 

(10)  “Surplus note” means an unsecured subordinated debt obligation possessing characteristics consistent with paragraph 3 of the National Association of Insurance Commissioners Statement of Statutory Accounting Principals No. 41, as amended from time to time and as modified or supplemented by rule or order of the commissioner. 

§ 6048d.  Licensing; authority

(a)  A special purpose financial captive insurance company may reinsure the risks of a ceding insurer only.  A special purpose financial captive insurance company may purchase reinsurance to cede the risks assumed under a reinsurance contract, subject to the prior approval of the commissioner.

(b)  In conjunction with the issuance of a license to a special purpose financial captive insurance company, the commissioner may issue an order that includes any provisions, terms, and conditions regarding the organization, licensing, and operation of the special purpose financial captive insurance company that are deemed appropriate by the commissioner and that are not inconsistent with the provisions of this chapter.  Except as provided in sections 6048l and 6048m of this subchapter, a license issued to a special purpose financial captive insurance company pursuant to this chapter and any order issued to a special purpose financial captive insurance company pursuant to this subsection shall not be revoked, suspended, amended, or modified other than as follows: 

(1)  The special purpose financial captive insurance company consents to such revocation, suspension, amendment, or modification; or

(2)  The commissioner makes a showing of clear and convincing evidence demonstrating that such revocation, suspension, amendment, or modification is necessary to avoid irreparable harm to the special purpose financial captive insurance company or to the ceding insurer.

(c)  To qualify for a license, a special purpose financial captive insurance company shall be subject, in addition to the requirements of subsection 6002(c) of this chapter, to the following:

(1)  The special purpose financial captive insurance company’s plan of operation shall include:

(A)  a complete description of all significant transactions, including reinsurance, reinsurance security arrangements, securitizations, related transactions or arrangements, and to the extent not included in the transactions listed in this subdivision (A), a complete description of all parties other than the special purpose financial captive insurance company and the ceding insurer that will be involved in the issuance of special purpose financial captive insurance company securities and a description of any pledge, hypothecation, or grant of a security interest in any of the special purpose financial captive insurance company’s assets and in any stock or limited liability company interest in the special purpose financial captive insurance company;

(B)  the source and form of the special purpose financial captive insurance company’s capital and surplus;

(C)  the proposed investment policy of the special purpose financial captive insurance company;

(D)  a description of the underwriting, reporting, and claims payment methods by which losses covered by the reinsurance contract are reported, accounted for, and settled; 

(E)  pro forma balance sheets and income statements illustrating one or more adverse case scenarios, as determined under criteria required by the commissioner, for the performance of the special purpose financial captive insurance company under all reinsurance contracts; and

(F)  the proposed rate and method for discounting reserves, if the special purpose financial captive insurance company is requesting authority to discount its reserves. 

(2)  The special purpose financial captive insurance company shall submit an affidavit of its president, a vice‑president, the treasurer, or the chief financial officer that includes the following statements, to the best of such person’s knowledge and belief after reasonable inquiry: 

(A)  the proposed organization and operation of the special purpose financial captive insurance company comply with all applicable provisions of this chapter;

(B)  the special purpose financial captive insurance company’s investment policy reflects and takes into account the liquidity of assets and the reasonable preservation, administration, and management of such assets with respect to the risks associated with the reinsurance contract and the insurance securitization transaction; and

(C)  the reinsurance contract and any arrangement for securing the special purpose financial captive insurance company’s obligations under such reinsurance contract, including but not limited to any agreements or other documentation to implement such arrangement, comply with the provisions of this subchapter.

(3)  The application shall include copies of all agreements and documentation described in subdivision (c)(1) unless otherwise approved by the commissioner and any other statements or documents required by the commissioner to evaluate the special purpose financial captive insurance company’s application for licensure. 

(4)  The application shall include an opinion of qualified legal counsel, in a form acceptable to the commissioner, that the offer and sale of any special purpose financial captive insurance company securities complies with all applicable registration requirements or applicable exemptions from or exceptions to such requirements of the federal securities laws and that the offer and sale of securities by the special purpose financial captive insurance company itself comply with all registration requirements or applicable exemptions from or exceptions to such requirements of the securities laws of this state.  Such opinions shall not be required as part of the application if the special purpose financial captive insurance company includes a specific statement in its plan of operation that such opinions will be provided to the commissioner in advance of the offer or sale of any special purpose financial captive insurance company securities.

(d)  The commissioner may grant a license, that shall be valid through the next April 1 following the date of initial issuance and may be renewed annually thereafter, authorizing the special purpose financial captive insurance company to transact reinsurance business as a special purpose financial captive insurance company in this state upon finding that:

(1)  The proposed plan of operation provides for a reasonable and expected successful operation;

(2)  The terms of the reinsurance contract and related transactions comply with this subchapter;

(3)  The proposed plan of operation is not hazardous to any ceding insurer; and

(4)  The insurance regulator of the state of domicile of each ceding insurer has notified the commissioner in writing or otherwise has provided assurance satisfactory to the commissioner that it has approved or has not disapproved the transaction, provided that the commissioner shall not be precluded from issuing a license to a special purpose financial captive insurance company in the event that the insurance regulator of the state of domicile of a ceding insurer has not responded with respect to all or any part of the transaction. 

(e)  The special purpose financial captive insurance company shall provide the commissioner with a copy of a complete set of executed documentation of an insurance securitization no later than 30 days after the closing on the transactions for such securitization.

(f)  Subdivision 6002(c)(3) of this chapter shall apply to all information submitted pursuant to subsections (c) and (e) of this section and to any order issued to the special purpose financial captive insurance company pursuant to subsection (b) of this section.

§ 6048e.  Changes in plan of operation; voluntary dissolution or cessation of business

(a)  Any change in the special purpose financial captive insurance company’s plan of operation shall require prior approval of the commissioner. 

(b)  Any transaction or series of transactions shall be subject to the prior approval of the commissioner if such transaction or series of transactions:

(1)  Is undertaken to dissolve a special purpose financial captive insurance company; or

(2)  Results in the termination of all or any part of a special purpose financial captive insurance company’s business; but no prior approval of the commissioner shall be required for any transaction or series of transactions described in this subdivision (2) if such transaction or series of transactions is done in accordance with a document or agreement described in the special purpose financial captive insurance company’s plan of operation and if the commissioner is notified in advance of such transaction or series of transactions.

(c)  A special purpose financial captive insurance company shall notify the commissioner in advance of any change in the legal ownership of any security issued by the special purpose financial captive insurance company.

§ 6048f.  Formation

(a)  A special purpose financial captive insurance company may be incorporated as a stock insurer with its capital divided into shares and held by its stockholders, or it may be organized as a manager‑managed limited liability company. 

(b)  A special purpose financial captive insurance company’s organizational documents shall limit the special purpose financial captive insurance company’s authority to transact the business of insurance or reinsurance to those activities that the special purpose financial captive insurance company conducts to accomplish its purposes as expressed in this subchapter.

§ 6048g.  Minimum Capital and Surplus

A special purpose financial captive insurance company shall not be issued a license unless it shall possess and thereafter maintain unimpaired paid‑in capital and surplus of not less than $250,000.00.

§ 6048h.  Securities

(a)  A special purpose financial captive insurance company may:

(1)  subject to the prior approval of the commissioner, account for the proceeds of a surplus note issued by the special purpose financial captive insurance company as surplus; and

(2)  submit for prior approval of the commissioner periodic written requests for authorization to make payments of interest on and repayments of principal of surplus notes and other debt obligations issued by the special purpose financial captive insurance company, provided that the commissioner shall not approve such payment if the commissioner determines that such payment would jeopardize the ability of the special purpose financial captive insurance company or any other person to fulfill their respective obligations pursuant to the special purpose financial captive insurance company securitization agreements, the reinsurance contract, or any related transaction.  In lieu of approval of periodic written requests for authorization to make payments of interest on and repayments of principal of surplus notes and other debt obligations issued by the special purpose financial captive insurance company, the commissioner may approve a formula or plan, which shall be included in the special purpose financial captive insurance company’s plan of operation as amended from time to time, for payment of interest, principal, or both with respect to such surplus notes and debt obligations.

(b)  In addition to the provisions of section 6005 of this chapter, no dividend or distribution may be declared or paid by a special purpose financial captive insurance company if such dividend or distribution would jeopardize the ability of the special purpose financial captive insurance company or any other person to fulfill the company’s or other person’s respective obligations pursuant to the special purpose financial captive insurance company securitization agreements, the reinsurance contract, or any related transaction.

(c)  A special purpose financial captive insurance company security shall not be subject to regulation as an insurance or reinsurance contract.  An investor in such a security or a holder of such a security shall not be considered to be transacting the business of insurance in this state solely by reason of having an interest in the security.  The underwriter’s placement or selling agents and their partners, commissioners, officers, members, managers, employees, agents, representatives, and advisors involved in an insurance securitization by a special purpose financial captive insurance company shall not be considered to be insurance producers or brokers or to be conducting business as an insurance or reinsurance company or as an insurance agency, brokerage, intermediary, advisory, or consulting business solely by virtue of their underwriting activities in connection with such securitization.

§ 6048i.  Permitted Reinsurance

(a)  A special purpose financial captive insurance company may reinsure only the risks of a ceding insurer, pursuant to a reinsurance contract.  A special purpose financial captive insurance company may not issue a contract of insurance or a contract for assumption of risk or indemnification of loss other than such reinsurance contract. 

(b)  Unless otherwise approved in advance by the commissioner, a special purpose financial captive insurance company may not assume or retain exposure to insurance or reinsurance losses for its own account that are not funded by: 

(1)  Proceeds from a special purpose financial captive insurance company securitization or letters of credit or other assets described in subdivision 6048c(3) of this chapter;

(2)  Premium and other amounts payable by the ceding insurer to the special purpose financial captive insurance company pursuant to the reinsurance contract; and

(3)  Any return on investment of the items in subdivisions (1) and (2) of this subsection.

(c)  The reinsurance contract shall contain all provisions reasonably required or approved by the commissioner, which requirements shall take into account the laws applicable to the ceding insurer regarding the ceding insurer taking credit for the reinsurance provided under such reinsurance contract. 

(d)  A special purpose financial captive insurance company may cede risks assumed through a reinsurance contract to one or more reinsurers through the purchase of reinsurance, subject to the prior approval of the commissioner.

(e)  A special purpose financial captive insurance company may enter into contracts and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of the reinsurance contract, the insurance securitization, and this subchapter, provided such contracts and activities are included in the special purpose financial captive insurance company’s plan of operation or are otherwise approved in advance by the commissioner.  Such contracts and activities may include but are not limited to:  entering into reinsurance contracts; issuing special purpose financial captive insurance company securities; complying with the terms of these contracts or securities; entering into trust, guaranteed investment contract, swap, or other derivative, tax, administration, reimbursement, or fiscal agent transactions; or complying with trust indenture, reinsurance, or retrocession; and other agreements necessary or incidental to effect an insurance securitization in compliance with this subchapter and the special purpose financial captive insurance company’s plan of operation.

(f)  Unless otherwise approved in advance by the commissioner, a reinsurance contract shall not contain any provision for payment by the special purpose financial captive insurance company in discharge of its obligations under the reinsurance contract to any person other than the ceding insurer or any receiver of the ceding insurer.

(g)  A special purpose financial captive insurance company shall notify the commissioner immediately of any action by a ceding insurer or any other person to foreclose on or otherwise take possession of collateral provided by the special purpose financial captive insurance company to secure any obligation of the special purpose financial captive insurance company.

§ 6048j.  Disposition of Assets; Investments

(a)  The assets of a special purpose financial captive insurance company shall be preserved and administered by or on behalf of the special purpose financial captive insurance company to satisfy the liabilities and obligations of the special purpose financial captive insurance company incident to the reinsurance contract, the insurance securitization, and other related agreements.

(b)  In the special purpose financial captive insurance company securitization, the security offering memorandum or other document issued to prospective investors regarding the offer and sale of a surplus note or other security shall include a disclosure that all or part of the proceeds of such insurance securitization will be used to fund the special purpose financial captive insurance company’s obligations to the ceding insurer. 

(c)  A special purpose financial captive insurance company shall not be subject to any restriction on investments other than the following:

(1)  A special purpose financial captive insurance company shall not make a loan to any person other than as permitted under its plan of operation or as otherwise approved in advance by the commissioner; and

(2)  The commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the special purpose financial captive insurance company unless the investment is otherwise approved in its plan of operation or in an order issued to the special purpose financial captive insurance company pursuant to subsection 6048d(b) of this chapter, as either is amended from time to time.

§ 6048k.  Annual Report; Books and Records

(a)  For purposes of subsection 6007(b) of this chapter: 

(1)  The commissioner shall, by rule or order, establish the form and content of the annual report to be filed by a special purpose financial captive insurance company; and

(2)  A special purpose financial captive insurance company shall report using statutory accounting principles, unless the commissioner requires, approves, or accepts the use of generally accepted accounting principles, in either case with any appropriate or necessary modifications or adaptations thereof required or approved or accepted by the commissioner and as supplemented by additional information required by the commissioner.   

(b)  A special purpose financial captive insurance company may make written application to file its annual report on a fiscal‑year basis.  If an alternative reporting date is granted, the commissioner shall establish the due date and content of any filing required by the special purpose financial captive insurance company in addition to its annual report.

(c)  Unless otherwise approved in advance by the commissioner, a special purpose financial captive insurance company shall maintain its books, records, documents, accounts, vouchers and agreements in this state.  A special purpose financial captive insurance company shall make its books, records, documents, accounts, vouchers and agreements available for inspection by the commissioner at any time.  A special purpose financial captive insurance company shall keep its books and records in such manner that its financial condition, affairs, and operations can be readily ascertained and so that the commissioner may readily verify its financial statements and determine its compliance with this chapter.

(d)  Unless otherwise approved in advance by the commissioner, all original books, records, documents, accounts, vouchers, and agreements shall be preserved and kept available in this state for the purpose of examination and inspection and until such time as the commissioner approves the destruction or other disposition of such books, records, documents, accounts, vouchers, and agreements.  If the commissioner approves the keeping of the items listed in this subsection outside this state, the special purpose financial captive insurance company shall maintain in this state a complete and true copy of each such original.  Books, records, documents, accounts, vouchers, and agreements may be photographed, reproduced on film, or stored and reproduced electronically.

§ 6048l.  LICENSE Suspension and Revocation

(a)  The commissioner shall notify a special purpose financial captive insurance company not less than 30 days before suspending or revoking its license pursuant to section 6009 of this chapter, which notice shall state the basis for such suspension or revocation.  The special purpose financial captive insurance company shall be afforded the opportunity for a hearing pursuant to the provisions of the Vermont Administrative Procedure Act, 3 V.S.A. chapter 25. 

(b)  Notwithstanding subsection (a) of this section and 3 V.S.A. § 814(c), no prior notice or hearing shall be required if the grounds for suspension or revocation of a special purpose financial captive insurance company’s license pursuant to section 6009 of this chapter relate primarily to the financial condition or soundness of the special purpose financial captive insurance company or to a deficiency in its assets.

(c)  For purposes of this subchapter, reference to section 6004 in subdivision 6009(a)(2) shall be construed also as a reference to section 6048g. 

§ 6048m.  Delinquency

(a)  Except as otherwise provided in this section, the provisions of chapter 145 of this title shall apply in full to a special purpose financial captive insurance company.

(b)  Upon any order of supervision, rehabilitation, or liquidation of a special purpose financial captive insurance company, the receiver shall manage the assets and liabilities of the special purpose financial captive insurance company pursuant to the provisions of this subchapter. 

(c)  Amounts recoverable by the receiver of a special purpose financial captive insurance company under a reinsurance contract shall not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to a ceding insurer, notwithstanding any provision in the contracts or other documentation governing the special purpose financial captive insurance company securitization. 

(d)  Notwithstanding the provisions of chapter 145 of this title or any other law of this state:

(1)  An application or petition or a temporary restraining order or injunction issued pursuant to the provisions of chapter 145 of this title with respect to a ceding insurer does not prohibit the transaction of business by a special purpose financial captive insurance company, including any payment by a special purpose financial captive insurance company made with respect to a special purpose financial captive insurance company security, or any action or proceeding against a special purpose financial captive insurance company or its assets;

(2)  The commencement of a summary proceeding with respect to a special purpose financial captive insurance company and any order issued by the court in such summary proceeding shall not prohibit payments by a special purpose financial captive insurance company and shall not prohibit the special purpose financial captive insurance company from taking any action required to make such payments, provided such payments are made: 

(A)  pursuant to a special purpose financial captive insurance company security or reinsurance contract; and

(B)  consistent with the special purpose financial captive insurance company’s plan of operation and any order issued to the special purpose financial captive insurance company pursuant to subsection 6048d(b), as either is amended from time to time. 

(3)  A receiver of a ceding insurer may not void a nonfraudulent transfer by a ceding insurer to a special purpose financial captive insurance company of money or other property made pursuant to a reinsurance contract; and

(4)  A receiver of a special purpose financial captive insurance company may not void a nonfraudulent transfer by the special purpose financial captive insurance company of money or other property: 

(A)  made to a ceding insurer pursuant to a reinsurance contract or made to or for the benefit of any holder of a special purpose financial captive insurance company security with respect to the special purpose financial captive insurance company security; and

(B)  made consistent with the special purpose financial captive insurance company’s plan of operation and any order issued to the special purpose financial captive insurance company pursuant to subsection 6048d(b), as either is amended from time to time.

(e)  With the exception of the fulfillment of the obligations under a reinsurance contract and notwithstanding another provision of this subchapter or other laws of this state, the assets of a special purpose financial captive insurance company, including assets held in trust, on a funds‑withheld basis, or in any other arrangement to secure the special purpose financial captive insurance company’s obligations under a reinsurance contract, shall not be consolidated with or included in the estate of a ceding insurer in any delinquency proceeding against the ceding insurer pursuant to the provisions of this subchapter for any purpose including, without limitation, distribution to creditors of the ceding insurer. 

§ 6048n.  Sponsored Captives

In addition to the provisions of sections 6048a–6048m of this subchapter, the provisions of this section shall apply to any sponsored captive insurance company licensed as a special purpose financial captive insurance company pursuant to this subchapter.

(1)  A sponsored captive insurance company may be licensed as a special purpose financial captive insurance company pursuant to the provisions of this subchapter.

(2)  The special purpose financial captive insurance company shall be subject to the provisions of subchapter 2 of this chapter.  In the event of any conflict between the provisions of this subchapter and the provisions of subchapter 2 of this chapter, the provisions of this subchapter shall control.

(3)  Unless otherwise approved in advance by the commissioner, a participant in a special purpose financial captive insurance company shall be a ceding insurer.  Any change in a participant shall be subject to prior approval by the commissioner.

(4)  Notwithstanding subdivision 6034(1) of this chapter, the special purpose financial captive insurance company may issue securities to any person approved in advance by the commissioner.

(5)  Notwithstanding section 6048g of this subchapter, the special purpose financial captive insurance company shall possess and thereafter maintain unimpaired paid‑in capital and surplus of not less than $500,000.00. 

(6)  The “general account” of a sponsored captive insurance company licensed as a special purpose financial captive insurance company shall mean all assets and liabilities of the sponsored captive insurance company not attributable to a protected cell.

(7)  Any security issued by a special purpose financial captive insurance company with respect to a protected cell and any other contract or obligation of the special purpose financial captive insurance company with respect to a protected cell shall include the designation of such protected cell and shall include a disclosure in a form and content satisfactory to the commissioner to the effect that the holder of such security and any counterparty to such contract or obligation have no right or recourse against the special purpose financial captive insurance company and its assets other than against assets properly attributable to such protected cell.  Notwithstanding the requirements of this subdivision (7) and subject to the provisions of this chapter and other applicable law or regulation, the failure to include such disclosure, in whole or part, in such security, contract, or obligation with respect to a protected cell shall not serve as the sole basis for a creditor, ceding insurer, or any other person to have recourse against the general account of the special purpose financial captive insurance company or against the assets of any other protected cell.

(8)  In addition to the provisions of section 6034 of this chapter, the special purpose financial captive insurance company shall be subject to the following with respect to its protected cells:

(A)  The special purpose financial captive insurance company shall establish a protected cell only for the purpose of insuring or reinsuring risks of one or more reinsurance contracts with a ceding insurer with the intent of facilitating an insurance securitization.  A separate protected cell shall be established with respect to each such ceding insurer, provided that a separate protected cell shall be established with respect to each reinsurance contract or contracts that are funded in whole or in part by a separate securitization transaction; and

(B)  A sale, an exchange, or another transfer of assets may not be made by the special purpose financial captive between or among any of its protected cells without the prior approval of the commissioner.

(9)  All attributions of assets and liabilities to the protected cells and the general account shall be in accordance with the plan of operation approved by the commissioner.  No other attribution of assets or liabilities may be made by a special purpose financial captive insurance company between its general account and any protected cell or between any protected cells.  The special purpose financial captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell and shall attribute the related insurance securitization transaction, including any securities issued by the special purpose financial captive insurance company as part of the insurance securitization, to such protected cell. The rights, benefits, obligations, and liabilities of any securities attributable to such protected cell and the performance under such reinsurance contract and the related securitization transaction and any tax benefits, losses, refunds, or credits allocated pursuant to a tax allocation agreement to which the special purpose financial captive insurance company is a party, including any payments made by or due to be made to the special purpose financial captive insurance company pursuant to the terms of such agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract and the insurance securitization transaction that are attributed to such protected cell.

(10)  For purposes of applying the provisions of chapter 145 of this title to a sponsored captive insurance company licensed as a special purpose financial captive insurance company, the definition of “insolvency” and “insolvent” in subdivision 6048c(2) shall be applied separately to each protected cell and to the special purpose financial captive insurance company’s general account.   

(11)  In addition to the provisions of section 6048m of this chapter:

(A)  The provisions of chapter 145 of this title shall apply to each protected cell of the special purpose financial captive.  Any proceeding or action taken by the commissioner pursuant to chapter 145 of this title with respect to a protected cell of a special purpose financial captive shall not be the sole basis for a proceeding pursuant to chapter 145 of this title with respect to any other protected cell of such special purpose financial captive insurance company or the special purpose financial captive insurance company’s general account.

(B)  The receiver of a special purpose financial captive insurance company shall ensure that the assets attributable to one protected cell are not applied to the liabilities attributable to another protected cell or to the special purpose financial captive insurance company’s general account unless an asset or liability is attributable to more than one protected cell, in which case the receiver shall deal with the asset or liability in accordance with the terms of any relevant governing instrument or contract.

(C)  The insolvency of a protected cell shall not be the sole basis for the commissioner to prohibit payments by the special purpose financial captive insurance company made pursuant to a special purpose financial captive insurance company security or reinsurance contract with respect to any other protected cell or to prohibit any action required to make such payments.

and by renumbering the following sections to be numerically correct.

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. 102

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

PENDING ACTION:  Second reading of the bill.

S. 118

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

PENDING ACTION:  Second reading of the bill.

CONSENT CALENDAR

Concurrent Resolutions for Adoption Under Joint Rule 16a

     The following concurrent resolutions have been introduced for approval by the Senate and House and will be adopted automatically unless a Senator or Representative requests floor consideration before today’s adjournment.  Requests for floor consideration in either chamber should be communicated to the Secretary’s office and/or the House Clerk’s office, respectively.  For text of resolutions, see Addendum to Senate Calendar of Thursday, April 26, 2007.

H.C.R.  123

House concurrent resolution in memory of Elizabeth Daley Jeffords.

H.C.R.  124

House concurrent resolution congratulating the 2007 American Basketball League champion Vermont Frost Heaves.

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)

Celine F. Champine of Newport Center - Member of the Community High School of Vermont Board - By Sen. Starr for the Committee on Education.  (4/6)

Richard Fraser of South Ryegate - Member of the Community High School of Vermont Board - By Sen. Nitka for the Committee on Education.  (4/6)

Blanche Kelley of Rutland - Member of the Community High School of Vermont Board - By Sen. Giard for the Committee on Education. (4/6)

Kathryn  T. Boardman of Shelburne - Member of the Vermont Municipal Bond Bank - By Sen. Condos for the Committee on Finance.  (4/18)

Steven Gurin of Barre - Member of the Educational and Health Buildings Finance Agency - By Sen. Maynard for the Committee on Finance.  (4/18)

Laurie A. Rowell of Rockingham - Member of the Valuation Appeals Board - By Sen. McCormack for the Committee on Finance.  (4/24)

Rene L. Blanchard of Essex Junction - Member of the Transportation Board - By Sen. Mazza for the Committee on Transportation.  (4/27)

R. Keith Armstrong of Bennington - Member of the Fish and Wildlife Board - By Sen. Hartwell for the Committee on Natural Resources and Energy.  (4/27)

Lisa Nolan Birmingham of Stowe - Member of the Natural Resources Board Land Panel - By Sen. Snelling for the Committee on Natural Resources and Energy.  (4/27)

George R. Crombie of Warren - Secretary of the Agency of Natural Resources - By Sen. Lyons for the Committee on Natural Resources and Energy.  (4/27)

George R. Crombie of Warren - Secretary of the Agency of Natural Resources - By Lyons for the Committee on Natural Resources and Energy.  (4/27)

Dana Kittell of East Fairfield - Member of the Fish and Wildlife Board - By Sen. MacDonald for the Committee on Natural Resources and Energy.  (4/27)

Wayne Alan LaRoche of Franklin - Commissioner of the Department of Fish and Wildlife - By Sen. MacDonald for the Committee on Natural Resources and Energy.  (4/27)

Elizabeth McLain of West Berlin - Member of the Natural Resources Board Land Panel - By Sen. MacDonald for the Committee on Natural Resources and Energy.  (4/27)

Eva Morse of Calais - Member of the Current Use Advisory Board - By Sen. Lyons for the Committee on Natural Resources and Energy.  (4/27)

Joan Nagy of Cambridge - Member of the Natural Resources Board Water Panel - By Sen. Snelling for the Committee on Natural Resources and Energy.  (4/27)

Michael Popowski, III of Northfield - Member of the Fish and Wildlife Board - By Sen. McCormack for the Committee on Natural Resources and Energy.  (4/27)

Jeffrey N. Wennberg of Rutland - Commissioner of the Department of Environmental Conservation - By Sen. Snelling for the Committee on Natural Resources and Energy.  (4/27)

Jonathan Wood of Jeffersonville - Commissioner of the Department of Forests, Parks and Recreation - By Sen. Hartwell for the Committee on Natural Resources and Energy.  (4/27)

Peter F. Young, Jr. of Northfield - Chair of the Natural Resources Board - By Sen. Lyons for the Committee on Natural Resources and Energy.  (4/27)

Peter F. Young, Jr. of Northfield - Chair of the Natural Resources Board - By Sen. Lyons for the Committee on Natural Resources and Energy.  (4/27)

R. Tasha Wallis of Stowe - Commissioner of the Department of Buildings and General Services - By Sen. Scott for the Committee on Transportation.  (4/30)

Peter C. Ozarowski of South Burlington - Member of the Parole Board - by Sen. Mazza for the Committee on Transportation.  (4/30)



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us