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Senate Calendar

monday, april 30, 2007

118th DAY OF BIENNIAL SESSION

TABLE OF CONTENTS

                                                                                                                Page No.

ACTION CALENDAR

UNFINISHED BUSINESS OF THURSDAY, APRIL 26, 2007

House Proposal of Amendment

S. 173     Awarding high school diplomas to veterans of the Vietnam era......... 1199

UNFINISHED BUSINESS OF FRIDAY, APRIL 27, 2007

Favorable with Proposal of Amendment

H. 229    Corrections and clarifications to the health care affordability act....... 1199

                        Health and Welfare Committee Report................................... 1199

                        Finance Committee Report.................................................... 1207

NEW BUSINESS

Third Reading

H. 78      Reconsideration or rescission of votes in local elections.................... 1207

H. 518    Relating to technical tax amendments............................................... 1207

Second Reading

Favorable with Proposal of Amendment

H. 113    Relating to all-age access for tobacco cessation programs................ 1207

                        Health and Welfare Committee Report................................... 1207

H. 520    Conservation of energy & generation of electricity........................... 1208

                        Natural Resources and Energy Committee Report.................. 1208

                        Finance Committee Report.................................................... 1233

House Proposals of Amendment

S. 54       Relating to motor vehicle wreckers.................................................. 1279

S. 78       Cost of picking up & hauling milk paid by the purchaser.................. 1279

S. 91       Relating to dept. of banking, ins., securities & health care admin....... 1281

NOTICE CALENDAR

H. 523    Relating to moving families out of poverty........................................ 1298

                        Sen. Racine amendment......................................................... 1298

Favorable

H. 48      So. Burl. regarding sales, rooms, meals & alcoholic beverage tax..... 1350

                        Government Operations......................................................... 1350

                        Finance Committee Report.................................................... 1350

H. 429    Relating to underground and aboveground storage tanks.................. 1350

                        Natural Resources and Energy Committee Report.................. 1350

Favorable with Proposal of Amendment

H. 449    Relating to foster care services and supports.................................... 1351

                        Health and Welfare Committee Report................................... 1351

H. 521    Relating to miscellaneous substantive tax amendments...................... 1352

                        Finance Committee Report.................................................... 1352

H. 537    Making appropriations for the support of government...................... 1367

      (For text of amendment, see Addendum for Monday, April 30, 2007)

House Proposal of Amendment

S. 39       Health ins. plan reimbursement for naturopathic physicians............... 1367

ORDERED TO LIE

S. 70       Empowering municipalities to regulate application of pesticides......... 1368


S. 102     Decreasing percentage to determine school dist. excess spending..... 1368

S. 118     Fiscal review of high spending districts & special education.............. 1368

JRS 24   Federal “fast track” process for congressional review of international ......       trade agreements          1369

 



 

ORDERS OF THE DAY

ACTION CALENDAR

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

UNFINISHED BUSINESS OF FRIDAY, APRIL 27, 2007

Favorable with Proposal of Amendment

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.)

NEW BUSINESS

Third Reading

H. 78

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

H. 518

An act relating to technical tax amendments.

Second Reading

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.)

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.

NOTICE CALENDAR

H. 523

An act relating to moving families out of poverty.

PROPOSAL OF AMENDMENT TO H. 523 TO BE OFFERED BY SENATOR RACINE ON BEHALF OF THE COMMITTEE ON HEALTH AND WELFARE

Senator Racine moves 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:

* * * Reach First * * *

Sec. 1.  33 V.S.A. Part 2, chapter 10 is added to read:

Chapter 10.  Reach First

Subchapter 1.  Eligibility and Assistance

§ 1001.  Definitions

As used in this chapter:

(1)  “Able‑to‑work” means to be free of any physical, emotional, or mental condition that would prevent the individual from engaging in any combination of the work activities for at least 35 hours per week.

(2)  “Able‑to‑work‑part‑time” means having a physical, emotional, or mental condition that would allow the individual to engage in any combination

of the work activities for at least 10 hours per week but would prevent the individual from engaging in such activities for 35 or more hours per week.

(3)  “Adult” means an individual who:

(A)  is 18 years of age or older, and not a dependent child; or

(B)  is under 18 years of age and:

(i)  is pregnant; or

(ii)  is a parent who is the caretaker for a dependent child.

(4)  “Assessment” means the information‑gathering process, carried out by the department’s established protocol, that identifies an individual’s skills, aptitudes, interests, life and work experience, and barriers, and the determination of how these factors relate to the individual’s current or potential participation in the labor force and his or her family responsibilities.  Where appropriate, this process includes the use of tests, other standardized measurement tools, and referrals to relevant professionals for evaluation or diagnosis.  The department shall use the information gathered as part of this process in developing the individual’s family development plan, as well as, where applicable, assessing the appropriateness and feasibility of the individual’s education, training, and employment goals and determining the individual’s ability to work.  The department shall include a process to determine the development and well‑being of the children in the family.

(5)  “Barrier” means any physical, emotional, or mental condition, any lack of an educational, vocational, or other skill or ability, and any lack of transportation, child care, housing, medical assistance or other services or resources, domestic violence circumstances, caretaker responsibilities, or other conditions or circumstances that prevent an individual from engaging in employment or other work activity.

(6)  “Caretaker” means an individual age 18 or older who is fulfilling a parental role in caring for a dependent child by providing physical care, guidance, and decision‑making related to the child’s health, school, medical care, and discipline.

(7)  “Case management” means the services provided by or through the department to participating families, including assessment, information, referrals, and assistance in the preparation and implementation of a family development plan under section 1007 of this title.

(8)  “Commissioner” means the commissioner of the department for children and families, or his or her designee.

(9)  “Department” means the department for children and families.

(10)  “Dependent child” means a child who is a resident of this state and:

(A)  is under the age of 18 years; or

(B)  is 18 years of age or older who is a full‑time student in a secondary school, or attending an equivalent level of vocational or technical training, and is reasonably expected to complete the educational program before reaching the age of 19 or is not expected to complete the educational program before reaching age 19 solely due to a documented disability.

(11)  “Eligible family” means a family that is determined to be financially eligible for the programs authorized by this chapter, in accordance with rules adopted by the commissioner.

(12)  “Family” means:

(A)  one or more dependent children living with one or both parents or a relative or caretaker of such children; or

(B)  a  pregnant individual.

(13)  “Living with a relative or caretaker” means living with a caretaker or relative in a residence maintained by the caretaker or one or more relatives at his or her or their home.

(14)  “Parent” means a biological parent, stepparent, adoptive parent, or pregnant individual.

(15)  “Participant” or “participating adult” means an adult member of a participating family.

(16)  “Participating family” means an eligible family that participates in the Reach First program.

(17)  “Reach Ahead” means the program established under chapter 12 of this title.

(18)  “Reach First payment” means a short‑term cash benefit as determined in section 1004 of this title.

(19)  “Reach First services” means the service component of the Reach First program consisting of assessment, orientation, case management services, support services, and referrals provided to eligible families to assist them in becoming self‑sufficient.

(20)  “Reach Up” means the program established under chapter 11 of this title.

(21)  “Relative” means a person related to a dependent child, as defined by the department by rule.

(22)  “Resources” means any income and property available from whatever source.

(23)  “Secretary” means the secretary of the agency of human services, or his or her designee.

(24)  “Temporary Assistance to Needy Families” or “TANF” means the block grant provided to this state and established in accordance with Part A of Title IV of the federal Social Security Act, as amended, and the regulations adopted pursuant thereto by the U. S. Secretary of Health and Human Services.

(25)  “Unable‑to‑work” means not able‑to‑work and not

able‑to‑work‑part‑time.

(26)  “Work activities” means the following activities limited to the extent and degree that they are allowed and countable in accordance with

Part A of Title IV of the Social Security Act:

(A)  unsubsidized employment;

(B)  subsidized private sector employment;

(C)  subsidized public sector employment;

(D)  work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector employment is not available;

(E)  on‑the‑job training;

(F)  job search and job readiness assistance;

(G)  community service programs;

(H)  vocational educational training (not to exceed 12 months with respect to any individual);

(I)  job skills training directly related to employment;

(J)  education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency;

(K)  satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate;

(L)  the provision, consistent with the department’s rules applicable to self‑employment, of child care services to an individual who is participating in a community service program;

(M)  attendance at a financial literacy class; and

(N)  any other work activity recognized in accordance with Part A of Title IV of the Social Security Act as amended.

(27)  “Work‑ready” means the participant possesses the education or skills demanded by the local job market or is capable of participating in one or more work activities at the level required by the participant’s work requirement, and is not subject to any barrier.

§ 1002.  Purpose

(a)  The purpose of the Reach First program is:

(1)  To stabilize families in crisis, assess the family’s strengths and needs, and orient families to the programs, services, assistance, and participant responsibilities available to improve self‑sufficiency, attain economic independence, and ensure the well‑being of children.

(2)  To refer families without recent work histories, recognizing individual and unique characteristics, to an appropriate program available to assist the family in obtaining the opportunities and skills necessary for self‑sufficiency and economic independence.

(3)  To assist families with recent work histories by providing short‑term financial support and support services to stabilize the family while the family transitions back to employment. 

(4)  To support parental responsibility and positive parental role models, both custodial and noncustodial.

(5)  To improve the well‑being of children by providing short‑term supports to their families and referrals to appropriate programs and services.

(6)  To conserve state public financial resources by operating the system of human services in a manner that is efficient and avoids federal fiscal sanctions.

(7)  To conform to the federal TANF law.

(b)  The critical elements of developing a short‑term stabilization, assessment, and orientation program that assists families to maintain or attain self‑sufficiency are:

(1)  cooperative and realistic goal‑setting, coupled with individualized case management that addresses each individual’s situation and barriers to

self‑sufficiency;

(2)  a short‑term monetary payment and support services of a limited duration to provide for immediate, short‑term needs of the family until the family attains employment quickly, or transitions to an appropriate program to assist the family in order to ensure the family’s well‑being and success to reaching self‑sufficiency; and

(3)  clear and comprehensive information on available options and appropriate services communicated to families in a simple fashion and easy transition to programs, such as Reach Ahead, Reach Up, the postsecondary education program, and any other solely state‑funded or separate state‑funded programs.

§ 1003.  Eligibility

(a)  A family shall be eligible for the Reach First program if the family’s income and resources do not exceed the limits established for the Reach Up program, and the family resides in Vermont.  All eligible applicants for programs under this chapter or chapter 11 or 12 of this title shall be eligible for an orientation, initial assessments, the Reach First payment, and, if appropriate for the family, in‑depth assessment, a family development plan, and services through Reach First.

(b)  Reach First payments and services shall be available only once every 12 months for a family, except as provided for by rule.  Families who have received Reach First within the past 12 months shall be provided financial assistance and services through Reach Up, the postsecondary education program, or other program appropriate for the family.  Families applying for or participating in other programs may also receive Reach First assessments, payments, or services as provided for by rule.

(c)  The commissioner may use the eligibility rules for Reach Up instead of adopting new eligibility rules for this program.

(d)  An adult who accepts employment after reporting as directed under section 1007 of this title may receive Reach First or Reach Up, provided that the family remains financially eligible for the program in accordance with department rules.

§ 1004.  Reach First Payment

(a)  An eligible family shall receive a short‑term cash payment, which shall not exceed 120 days of Reach Up financial assistance for the relevant family size with the same income.  The family may receive the payment in installments or a lump sum, if needed to avert a crisis as determined in the initial assessment or the family development plan, during the period in which the family seeks immediate employment or participates in assessment and creating a family development plan.  The commissioner may establish by rule exceptions to the limit on the amount of the payment, as long as the exceptions are budget‑neutral to the program.

(b)  The department shall offer every eligible family the option of electronic or direct payment of the family’s housing or other expenses to the person providing the lodging, utilities, or other service as provided for by rule.

(c)  For the purposes of calculating the payment, child support shall be treated as income, except that the first $50.00 amount of child support shall be disregarded from income.

§ 1005.  Required services to participating families

(a)  The commissioner shall provide to all eligible families an orientation and an initial, up‑front assessment to determine which programs, referrals, or services are appropriate.  The orientation shall provide the family with information about services and referrals available to the family, and the programs established under chapters 11 and 12 of this title, including program requirements, participant responsibilities, and incentives for participation and obtaining employment.

(b)  If needed by the family to improve the family’s prospects for job placement and job retention, the commissioner shall provide participating families in‑depth assessments of the full range of services needed by each family, intensive case management or case consultation services, referral to any agencies or programs that provide the services needed by participating families, and transition to other programs establishes under chapters 11 and 12 of this title.  Services or referrals for services shall include:

(1)  Appropriate child care, available at times that will enable employment or participation in services indicated by the participating family’s family development plan.  As used in this subdivision, “appropriate child care” shall not include:

(A)  Child care that the department classifies as legally exempt child care, and that a parent or caretaker determines to be unacceptable; and

(B)  Child care that the department classifies as either a registered family child care home or a licensed child care facility, and that a parent or caretaker determines to be unacceptable when such determination is confirmed by the department.

(2)  Transportation which will enable employment or participation in services indicated by the participating family’s family development plan.

(3)  Career counseling, education, and training, and job search assistance consistent with the purposes of this chapter.

(4)  Vocational rehabilitation.

(5)  Medical and dental assistance.

(6)  Homelessness prevention and housing assistance.

(7)  Family planning education and counseling.

(8)  Assistance with obtaining documentation of an apparent or claimed physical, emotional, or mental condition that reasonably can be presumed to limit or eliminate the individual’s capacity to engage in employment or other work activity.

(9)  Transfer to a state‑funded program under subchapter 3 of this chapter, the Reach Up program, or the Reach Ahead program.

(10)  Any other services identified in the family development plan and determined by the commissioner to be necessary and appropriate to achieve the purposes of this chapter or chapter 11 of this title.

§ 1006.  Case management; family development plans; coordinated services

(a)  If a family needs or requests in‑depth assessment and ongoing services, the commissioner shall provide all Reach First services to these participating families through a case management model.  The case manager, with the full involvement of the family, shall recommend, and the commissioner shall establish and modify as necessary a family development plan for each participating family in need of ongoing services, with a right of appeal as provided by section 1132 of this title.  A case manager shall be assigned to each participating family as soon as the family is determined to be eligible for this program and in need of services.

(b)  The family development plan shall include:

(1)  each parent or caretaker’s employment goal;

(2)  an assessment of each parent or caretaker’s strengths and barriers. The initial assessment shall include a literacy evaluation followed by a referral to an appropriate resource or program;

(3)  an identification of the services, supports, and accommodations needed to overcome any barriers, to enable the family to achieve

self‑sufficiency, and to fulfill each parent or caretaker’s personal and family responsibilities;

(4)  an assignment of responsibilities, family development plan requirements, and activities among the case manager and family members, together with a time schedule for such responsibilities, requirements, and activities.

(c)  The initial family development plan shall be completed within 30 days of the first meeting with the case manager.  The case manager shall establish a schedule for periodic review of the family development plan.

(d)  The commissioner shall adopt rules, consistent with research on best practices, establishing maximum caseloads for case managers.

§ 1007.  REQUIRED PARTICIPATION

(a)  Each participating adult in a family receiving Reach First services shall participate in necessary assessments and developing a family development plan, if applicable, unless good cause exists for such noncompliance as defined by the commissioner by rule.  The commissioner may use the same rules applicable to good cause as established in the Reach Up program.

(b)(1)  If an adult does not comply with the following requirements without good cause, the department shall initiate the conciliation process to determine the reason that the adult has not complied with the requirements and shall modify the requirements, if necessary, or provide the adult with a second opportunity to comply:

(A)  The single parent or caretaker in a family who has no barriers to obtaining and maintaining a job and a recent and stable work history, including receiving wages for his or her most recent job that, when annualized, equal or exceed 150 percent of the federal poverty level applicable to the family, shall report to the department of labor for an immediate job search within two working days of having filed an application.

(B)  The able‑to‑work adult in a two‑parent family (when the other parent is able‑to‑work‑part‑time or unable‑to‑work) who has no barriers to obtaining and maintaining a job and a recent and stable work history, including receiving wages for his or her most recent job that, when annualized, equal or exceed 150 percent of the federal poverty level applicable to the family, shall report to the department labor for an immediate job search within two working days of having filed an application.

(C)  The adult in a two‑parent family (when both parents are able‑to‑work) who is not the primary caretaker of the children shall report to the department of labor for an immediate job search within two working days of having filed an application.

(2)  The Reach First payment may be withheld during the conciliation process and until the adult complies.

(3)  If the adult does not report without good cause to the department of labor after the second opportunity, the adult shall be denied Reach First and Reach Up. 

(c)(1)  If an adult does not comply with the following requirements without good cause, the department shall initiate the conciliation process to determine the reason that the adult has not complied with the requirements and shall modify the requirements, if necessary:

(A)  Each participating adult shall participate in the development of his or her family development plan.

(B)  Each participating adult who is not referred to the department of labor pursuant to this subsection shall report as directed by the department for assessment and evaluation activities.

(C)  Each participating adult shall begin to comply with his or her family development plan requirements as soon as possible, and no later than 10 days following identification of initial requirements at the initial family development plan meeting.  Each participating adult shall continue to comply with such family development plan requirements until such time as the family is ineligible or transferred to Reach Up or Reach Ahead.  If a family is transferred to another program, the rules of that program apply.

(2)  If conciliation is unsuccessful, the department may apply the Reach Up sanctions and transfer the family to the Reach Up program for further case management and other services.

Subchapter 2.  Administrative Provisions

§ 1011.  Transition to other programs

(a)  The department shall transfer the family to Reach Up, a separate state program, or a solely state‑funded program established under chapter 11 if, after four months of receiving support in Reach First or sooner at the department’s discretion, a family is assessed to need ongoing financial assistance and the family is financially eligible for Reach Up, a separate state program, or a solely state‑funded program established under chapter 11 of this title, unless the family chooses not to participate.

(b)  If a family finds unsubsidized employment meeting or exceeding the work requirements for Reach Up for the family’s size and composition, but is financially eligible for Reach Up, the department shall transfer the family to Reach Up, unless the family chooses not to participate.  A family transferring from Reach First to Reach Up shall be treated as a recipient for the purposes of income calculation.

(c)  If a family finds unsubsidized employment meeting or exceeding the work requirements for Reach Up for the family’s size and composition, is not financially eligible for Reach Up, and is eligible for the Reach Ahead program, the department shall transfer the family to Reach Ahead, unless the family chooses not to participate.  A family transferring from Reach First to Reach Ahead shall be treated as a recipient for the purposes of income calculation.

(d)  A family transferring to another program under subsections (a) through (c) of this section shall not be required to complete a new application.  Verification of income or other documentation may be required as provided for by rule.

(e)  Transitional medical assistance of up to 36 months shall be provided to families with a working adult who leaves Reach First and is not eligible for Reach Up as provided for in the Vermont Medicaid rule M302.21 in effect on May 1, 2007.

§ 1012.  Notice and Appeal

A participant may appeal decisions in accordance with section 3091 of Title 3.  The commissioner shall provide notice to each participant of the standards and procedures applicable to such appeals.  All federal and agency of human services rules regarding conciliation, notice, hearing, and appeal shall be followed in connection with such appeals.

* * * Reach Up * * *

Sec. 2.  33 V.S.A. § 1101 is amended to read:

§ 1101.  DEFINITIONS

As used in this chapter:

(1)  “Able‑to‑work” means to be free of any physical, emotional, or mental condition that would prevent the individual from engaging in any combination of the work activities, identified in subdivisions 1101(27)(A) through (E) of this title, for at least 35 hours per week.

(2)  “Able‑to‑work‑part‑time” means having a physical, emotional, or mental condition that would allow the individual to engage in any combination of the work activities, identified in subdivisions 1101(27)(A) through (E) of this title, for at least 10 hours per week but would prevent the individual from engaging in such activities for 35 or more hours per week.

(3)  “Adult” means an individual who:

(A)  is 18 years of age or older, and not a dependent child; or

(B)  is under 18 years of age and:

(i)  is pregnant; or

(ii)  is a parent who is the caretaker for a dependent child.

(4)  “Assessment” means the information‑gathering process, carried out by the department’s established protocol, that identifies an individual’s skills, aptitudes, interests, life and work experience, and barriers, and the determination of how these factors relate to the individual’s current or potential participation in the labor force and his or her family responsibilities.  Where appropriate, this process includes the use of tests, other standardized measurement tools, and referrals to relevant professionals for evaluation or diagnosis.  The department shall use the information gathered as part of this process in developing the individual’s family development plan, as well as, where applicable, assessing the appropriateness and feasibility of the individual’s education, training, and employment goals and determining the individual’s ability to work.  The department shall include a process to determine the development and well‑being of the children in the family.

(5)  “Barrier” means any physical, emotional, or mental condition, any lack of an educational, vocational, or other skill or ability, and any lack of transportation, child care, housing, medical assistance or other services or resources, domestic violence circumstances, caretaker responsibilities, or other conditions or circumstances that prevent an individual from engaging in employment or other work activity.

(6)  “Caretaker” means an individual age 18 or older who is fulfilling a parental role in caring for a dependent child by providing physical care, guidance, and decision‑making related to the child’s health, school, medical care, and discipline.

(7)  “Case management” means the services provided by or through the department to participating families, including assessment, information, referrals, and assistance in the preparation and implementation of a family development plan under section 1107 of this title.

(8)  “Commissioner” means the commissioner of the department for children and families, or his or her designee.

(9)  “Department” means the department for children and families.

(10)  “Dependent child” means a child who: is a resident of this state;: and

(A)  is under the age of 18 years; or

(B)  is 18 years of age or older who is a full‑time student in a secondary school, or attending an equivalent level of vocational or technical training, and is reasonably expected to complete the educational program before reaching the age of 19 or is not expected to complete the educational program before reaching age 19 solely due to a documented disability.

(11)  “Eligible family” means a family that is determined to be financially eligible for the programs authorized by this chapter, in accordance with rules adopted by the commissioner.

(12)  “Family” means:

(A)  one or more dependent children living with one or both parents or a relative or caretaker of such children; or

(B)  a pregnant individual.

(13)  “Financial assistance” means cash, payments, vendor electronic or direct payments for a family’s housing or other expenses, and other forms of benefits designed to meet a family’s ongoing basic needs that are available through the Reach Up program.  A family’s ongoing basic needs include food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses.

(14)  “Job‑ready” means possessing the education or skills demanded by the local job market, and not being subject to any barrier.

(15)(14)  “Living with a relative or caretaker” means living with a caretaker or relative in a residence maintained by the caretaker or one or more relatives as his or her or their home.

(16)(15)  “Parent” means a biological parent, stepparent, adoptive parent, or pregnant individual.

(17)(16)  “Participant” or “participating adult” means an adult member of a participating family.

(18)(17)  “Participating family” means an eligible family that participates in the Reach Up program.

(18)  “Reach Ahead” means the program established in chapter 12 of this title.

(19)  “Reach First” means the program established in chapter 10 of this title.

(19)(20)  “Reach Up program” means the program administered by the department that assists and enables eligible families to become self‑sufficient by providing financial assistance and Reach Up services.

(20)(21)  “Reach Up services” means the service component of the Reach Up program consisting of case management services, support services, and referrals provided to eligible families to assist them in becoming self‑sufficient.

(21)(22)  “Relative” means a person related to a dependent child, as defined by the department by rule.

(22)(23)  “Resources” means any income and property available from whatever source.

(23)(24)  “Secretary” means the secretary of the agency of human services, or his or her designee.

(24)(25)  “Subsidized job” means a job with an employer for which at least 25 percent of the wages are provided by diversion of TANF funds employment for which the employer receives a subsidy from TANF funds or other public funds to offset some or all of the wages and costs of employing a participant.

(25)(26)  Temporary Assistance to Needy Families” or “TANF” means the block grant provided to this state and established in accordance with Part A of Title IV of the federal Social Security Act, as amended, and the regulations promulgated pursuant thereto by the United States Secretary of Health and Human Services.

(26)(27)  “Unable‑to‑work” means not able‑to‑work and not able‑to‑work‑part‑time able‑to‑work‑part‑time.

(27)(28)  “Work activities” means the following activities limited to the extent and degree that they are allowed and countable in accordance with Part A of Title IV of the Social Security Act:

(A)  unsubsidized employment;

(B)  subsidized private sector employment;

(C)  subsidized public sector employment;

(D)  work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector employment is not available;

(E)  on‑the‑job training;

(F)  job search and job readiness assistance;

(G)  community service programs;

(H)  vocational educational training (not to exceed 12 months with respect to any individual);

(I)  job skills training directly related to employment;

(J)  education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency;

(K)  satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate;

(L)  the provision, consistent with the department’s rules applicable to self‑employment, of child care services to an individual who is participating in a community service program;

(M)  attendance at a financial literacy class; and

(N)  any other work activity recognized in accordance with Part A of Title IV of the Social Security Act as amended.

(28)(29)  “Work‑ready” means the earlier of:

(A)  not subject to a barrier and capable of participating in a single work activity or any combination of work activities determined by the commissioner by rule as acceptable to meet the work requirements of section 1113 of this title; or

(B)(i)  having received 12 cumulative months of financial assistance; or

(ii)  having received at least 13 but no more than 18 cumulative months of financial assistance and having been granted an extension of the 12‑month work readiness rule in accordance with subsection 1113(b) of this title the participant possesses the education or skills demanded by the local job market or is capable of participating in one or more work activities at the level required by the participant’s work requirement, and is not subject to any barrier.

Sec. 3.  33 V.S.A. § 1102 is amended to read:

§ 1102.  PURPOSE OF AID

(a)  The purpose of the Reach Up program is:

(1)  to assist families, recognizing individual and unique characteristics, to obtain the opportunities and skills necessary for self‑sufficiency.

(2)  to encourage economic independence by removing barriers and disincentives to work and providing positive incentives to work.

(3)  to support parental nurturing.

(4)  to support parental responsibility and positive parental role models, both custodial and noncustodial.

(5)  to measure the success of the system by what is best for children.

(6)  to protect improve the well‑being of children by providing for their immediate basic needs, including food, housing and clothing.

(7)  to respect the dignity of individuals and families receiving assistance by providing employment, education, and other services through social service delivery systems available to all Vermont citizens residents and by encouraging the private sector to integrate families receiving assistance into the mainstream of the employment market.

(8)  to recognize the challenges facing many families receiving assistance by minimizing structural financial disincentives to increased earnings and the abrupt termination of assistance before parents are fully integrated into the employment market.

(9)  to conserve state public financial resources by operating the system of aid in a manner that is efficient and avoids federal fiscal sanctions.

(10)  to conform to the federal TANF law.

* * *

Sec. 4.  33 V.S.A. § 1103 is amended to read:

§ 1103.  AID; ELIGIBILITY AND BENEFIT LEVELS

(a)  Aid Financial assistance shall be given for the benefit of a dependent child to the relative or caretaker with whom the child is living unless otherwise provided.  The amount of aid financial assistance to which an eligible person is entitled shall be determined with due regard to the income, resources and maintenance available to that person and, as far as funds are available, shall provide that person a reasonable subsistence compatible with decency and health.  The commissioner may fix by regulation maximum amounts of aid financial assistance, and act to insure that the expenditures for the programs shall not exceed appropriations for them consistent with section 101 of this title.  In no case may the department expend state funds in excess of the appropriations for the programs under this chapter.

(b)  Aid Financial assistance may include the maintenance of one or both parents, if in need and in the dependent child’s home, or a relative or caretaker with whom a dependent child is living, if the relative or caretaker is without sufficient means of support.

(c)  The commissioner shall adopt rules for the determination of eligibility for the Reach Up program and benefit levels for all participating families that include the following provisions:

(1)  No less than the first $150.00 $200.00 per month of earnings from an unsubsidized job and 25 percent of the remaining unsubsidized earnings shall be disregarded in determining the amount of the family’s financial assistance grant.  The family shall receive the difference between countable income and the Reach Up payment standard in a partial financial assistance grant.

(2)  No less than the first $90.00 per month of earnings from a subsidized job shall be disregarded in determining the amount of the family’s financial assistance grant.  The family shall receive the difference between countable income and the Reach Up payment standard in a partial financial assistance grant.  Earnings from subsidized jobs shall qualify for federal and state earned income credit if the family is otherwise eligible for such credit.

(3)  Incentive payments shall be provided to participating families for completing parenting education programs or related volunteer work required under a family development plan  Each family development plan shall provide for an incentive payment to be paid to the participating family for completing a required activity or task.

* * *

(5)  The value of assets accumulated from the earnings of adults and children in participating families and from any federal or Vermont earned income tax credit shall be excluded for purposes of determining continuing eligibility for the Reach Up program.  The asset limitation shall be increased from $1,000.00 to $2,000.00 for participating families for the purposes of determining continuing eligibility for the Reach Up program.

* * *

(h)  The department shall offer every eligible family the option of electronic or direct payment of financial assistance for the family’s housing or other expenses to the person providing the lodging, utilities, or other service as provided for by rule.

Sec. 5.  33 V.S.A. § 1105(b) is amended to read:

§ 1105.  CHILD SUPPORT PAYMENTS

* * *

(b)  Notwithstanding any other provision of law, if aid financial assistance to a participating family is terminated due to receipt of child support, minus the first $50.00 per month in such payments, that in combination with other countable income is in excess of the financial assistance cash payment tandard, and the family again becomes eligible for aid financial assistance within the following 12 calendar months solely because the family no longer receives excess child support, aid financial assistance shall be paid as of the date of the family’s reapplication.

Sec. 6.  33 V.S.A. § 1106 is amended to read:

§ 1106.  REQUIRED SERVICES TO PARTICIPATING FAMILIES

The commissioner shall provide participating families case management services, initial assessment of the full range of services needed by each family, periodic reassessment of service needs and the family development plan, and referral to any agencies or programs that provide the services needed by participating families to improve the family’s prospects for job placement and job retention, including the following:

(1)  Appropriate child care, available at times that will enable employment or participation in services indicated by the participating family’s family development plan.  As used in this subdivision, “appropriate child care” shall not include:

(A)  Child care that the department of social and rehabilitation services’ child care services division classifies as legally exempt child care, and that a parent or caretaker determines to be unacceptable; and

(B)  Child care that the department of social and rehabilitation services’ child care services division classifies as either a registered family child care home or a licensed child care center facility, and that a parent or caretaker determines to be unacceptable when such determination is confirmed by the child care services division department.

* * *

(9)  Services for teen parents through the teen parent education program established in cooperation with the department of education.

(9)(10)  Any other services identified in the family development plan and determined by the commissioner to be necessary and appropriate to achieve the purposes of this chapter.

Sec. 7.  33 V.S.A. § 1107 is amended to read:

§ 1107.  CASE MANAGEMENT; FAMILY DEVELOPMENT PLANS; COORDINATED SERVICES

(a)  The commissioner shall provide all Reach Up services to participating families through a case management model informed by knowledge of the family’s home, community, employment, and available resources.  Services may be delivered in the district office, the family’s home, or community in a way that facilitates progress toward accomplishment of the family development plan.  Case management may be provided to other eligible families.  The case manager, with the full involvement of the family, shall recommend, and the commissioner shall establish and modify as necessary a family development plan established under the Reach First or Reach Up program for each participating family, with a right of appeal as provided by section 1132 of this title.  A case manager shall be assigned to each participating family as soon as the family begins to receive financial assistance.  If administratively feasible and appropriate, the case manager shall be the same case manager the family was assigned in the Reach First program.  The applicant for or recipient of aid financial assistance, under this chapter, shall have the burden of demonstrating the existence of his or her condition.

(b)  The family development plan shall include:

(1)  each parent or caretaker’s employment goal;

(2)  an assessment of each parent or caretaker’s strengths and barriers. The initial assessment shall include a literacy evaluation followed by referral to an appropriate resource or program;

(3)  an identification of the services, supports and accommodations needed to overcome any barriers, to enable the family to achieve self‑sufficiency, and to fulfill each parent or caretaker’s personal and family responsibilities;

(4)  an assignment of responsibilities, family development plan requirements, and activities among the case manager and family members, together with a time schedule for such responsibilities, requirements, and activities.

(c)(b)  The initial family development plan shall be completed within 30 days of the first meeting with the case manager.  The case manager shall establish a schedule for periodic review of the family development plan that includes personal contact with the participant at least once per month.  In addition, the case manager shall review, and modify if necessary, the plan in the following circumstances:

(1)  There is a lack of satisfactory progress in achieving the goals of the plan;

(2)  The parent or caretaker has lost unsubsidized or subsidized employment;

(3)  A family member has failed to comply with a family development plan requirement or a work requirement;

(4)  Services required by the plan are unavailable;

(5)  At least 30 days prior to when the parent or caretaker would become work‑ready or would otherwise be deemed work‑ready on the basis of 12‑cumulative‑month receipt of financial assistance;

(6)  A deferment or modification of the work requirements imposed by section 1113 of this title has been requested or is due for review;

(7)  Within 30 days of when the parent or caretaker has started an unsubsidized or subsidized job; or

(8)  Changes to the plan are needed to protect the well‑being of the children.

* * *

Sec. 8.  33 V.S.A. § 1108 is amended to read:

§ 1108.  OBLIGATION TO ASSIST ELIGIBLE FAMILIES WITH DEPENDENT CHILDREN

Except as specifically authorized herein, the commissioner shall not adopt any rule that would result in the termination of aid financial assistance to a participating family, including a dependent child, on the basis of an adult family member’s having received TANF‑funded aid financial assistance, as an adult, for 60 or more months in his or her lifetime.  This provision shall not prevent the commissioner from adopting rules that impose limitations on how many months that families, including a parent who has received an associate or bachelor’s degree while receiving support from the postsecondary education program authorized by section 1121 of this chapter, may receive aid financial assistance authorized by this chapter in the five‑year period immediately following the receipt of such associate or bachelor’s degree.

Sec. 9.  33 V.S.A. § 1112 is amended to read:

§ 1112.  FAMILY DEVELOPMENT PLAN REQUIREMENTS

(a)  Each participating adult in a family applying for or receiving financial assistance shall comply with each Reach Up family development plan requirement provided for in the family development plan, unless good cause exists for such noncompliance as defined by the commissioner by rule.

(b)  The family’s receipt of the full financial assistance amount allowable and avoidance of fiscal sanctions are contingent on compliance with the following family development plan requirements: the participating adult assisting in the development of his or her family development plan and engaging in the family development plan activities for the number of hours per week that the activities are scheduled and available, unless good cause exists for not doing so as defined by the commissioner by rule.

(1)  The single parent or caretaker in a family who has no barriers to obtaining and maintaining a job and a recent and stable work history, including receiving wages for his or her most recent job that, when annualized, equal or exceed 150 percent of the federal poverty level applicable to the family, shall report to the department of labor for immediate job search within two working days of having filed an application for financial assistance.

(2)  The able‑to‑work adult in a two‑parent family (when the other parent is able‑to‑work‑part‑time or unable‑to‑work) who has no barriers to obtaining and maintaining a job and a recent and stable work history, including receiving wages for his or her most recent job that, when annualized, equal or exceed 150 percent of the federal poverty level applicable to the family, shall report to the department labor for immediate job search within two working days of having filed an application for financial assistance.

(3)  The adult in a two‑parent family (when both parents are able‑to‑work) who is not the primary caretaker of the children shall report to the department of labor for immediate job search within two working days of having filed an application for financial assistance.

(4)  Any adult who is referred to the department of labor pursuant to this subdivision and who without good cause fails to report shall be denied financial assistance for his or her family.

(5)  An adult who accepts employment after reporting as directed under this subdivision may receive Reach Up services, provided that the family is eligible for such services in accordance with department rules.

(6)  Each participating adult shall participate in the development of his or her family development plan.

(7)  Each participating adult who is not referred to the department of labor pursuant to subdivisions (1), (2) or (3) of this subsection shall report as directed by the department for assessment and evaluation activities.

(8)  Each participating adult shall begin to comply with his or her family development plan requirements as soon as possible, and no later than 10 days following identification of initial requirements at the initial family development plan meeting.  Each participating adult shall continue to comply with such family development plan requirements until such time as the adult is complying with the work requirement provided for under section 1113 of this title, or the family is determined to be ineligible for or is no longer receiving financial assistance.

(9)  Participants shall engage in their family development plan activities for the number of hours per week that the activities are scheduled and available, unless good cause exists for not doing so as defined by the commissioner by rule.

Sec. 10.  33 V.S.A. § 1113 is amended to read:

§ 1113.  WORK REQUIREMENTS

(a)  Each participating adult in a family receiving a financial assistance grant shall fulfill a work requirement in accordance with this section.  Subject to the provisions of this chapter, and provided that all services required by this chapter are offered when appropriate and are available when needed to support fulfillment of the work requirement, an adult having a work requirement shall obtain employment or participate in one or more work activities, and shall work in accordance with the requirements of this section, in order to maintain continued eligibility for financial assistance and to avoid fiscal sanctions.

(b)(1)  The work requirement shall become effective as soon as the participating adult is job or work‑ready, or upon the family’s receipt of 12 cumulative months of financial assistance, whichever is sooner, unless at the end of the 12‑cumulative‑month period the participant’s case manager concludes that the participant is unable to meet the hours of the applicable unmodified work requirement, as established in subsection (c) of this section. In such cases, the case manager shall prepare a written request on behalf of the participant for an extension of up to six months.  The request shall identify the particular reasons why the participant is unable to meet the work requirement and the remedial actions and services to be provided to the recipient to enable fulfillment of the requirement.  The request shall be submitted to the district director and the family services director commissioner for approval.  The request shall be approved unless the participant is able to meet the work requirement or a modified work requirement established in accordance with section 1114 of this title.

(2)  A participant may meet the work requirement through a combination of work activities until the participant has received 24 months of financial assistance.  After that time, the participant shall meet the work requirement through employment.

 (c)  The hours of the work requirement shall be as follows:

(1)  In two‑parent families in which both parents are able‑to‑work:

(A)  The parent who is not the primary caretaker of a dependent child, referred to in this subsection as the “principal‑earner parent,” shall work no less than full‑time in unsubsidized employment or in one or more work activities and accept unsubsidized employment with scheduled hours up to 45 hours per week;

(B)  As used in this subdivision, “full‑time” means 40 hours per week. A position requiring no fewer than 35 hours per week that the employer defines as full‑time shall be deemed full‑time employment.

(C)  The requirements of this subdivision may be satisfied if both parents secure employment or work activities with combined hours equal to or exceeding 40 hours per week, if such shared fulfillment of the work requirement commences within 30 days of application for financial assistance or within 30 days of the onset of the unemployment of the principal‑earner parent.  Parents who have successfully established a shared work requirement shall have 30 days to re‑establish the arrangement in the event one of the parents becomes unemployed.

(2)  The primary caretaker of a dependent child in a two‑parent family in which both parents are able‑to‑work shall have no work requirement, provided that the principal‑earner parent complies with the work requirement and is not sanctioned in accordance with section 1115 of this title. In the event that the principal‑earner parent in a two‑parent family is sanctioned for failing to meet the work requirement, the primary caretaker shall be deemed work‑ready and subject to subdivision (1) of this subsection.  Within 30 days of the effective date of the principal‑earner parent’s sanction the primary caretaker shall report to the family’s case manager, complete an assessment, modify the family’s family development plan, and comply with the requirements of subdivision (1) of this subsection.

(3)  All other able‑to‑work participants and able‑to‑work‑part‑time participants who are not subject to the work requirement established by subdivision (1) of this subsection, or exempted from the work requirement in accordance with subdivision (2) of this subsection, shall comply with the following requirements:

(A)  If the family includes two parents, and one parent is able‑to‑work and the other parent is able‑to‑work‑part‑time or unable‑to‑work, the able‑to‑work parent shall work in unsubsidized employment or participate in one or more work activities for no fewer than 30 hours per week, and shall accept unsubsidized employment with scheduled hours up to 35 hours per week; and

(B)  If the family includes two parents and both parents are able‑to‑work‑part‑time:

(i)  If one participating parent has been determined able‑to‑work‑part‑time at least 30 hours per week, that parent shall work in unsubsidized employment or participate in one or more work activities for no fewer than 30 hours per week and shall accept unsubsidized employment with scheduled hours up to 34 hours per week, provided that the scheduled hours do not exceed the number of hours the parent has been determined able‑to‑work‑part‑time;

(ii)  If neither participating parent has been determined able‑to‑work‑part‑time at least 30 hours per week but the parents, in combination, have been determined able‑to‑work‑part‑time 30 hours per week, both parents shall work in unsubsidized employment or participate in one or more work activities for which the sum of the hours is at least 30 hours per week and shall accept unsubsidized employment with scheduled hours up to 34 hours per week, provided that the scheduled hours do not exceed the number of hours the parents, in combination, have been determined able‑to‑work‑part‑time; or

(iii)  If the participating parents, in combination, have been determined able‑to‑work‑part‑time fewer than 30 hours per week, the parents shall work in unsubsidized employment or participate in one or more work activities for the number of hours that the two parents, in combination, have been determined able‑to‑work‑part‑time.

(C)  If the family includes two parents and one parent is able‑to‑work‑part‑time and the other parent is unable‑to‑work:

(i)  If one participating parent has been determined able‑to‑work‑part‑time at least 30 hours per week, that parent shall work in unsubsidized employment or participate in one or more work activities for no fewer than 30 hours per week and shall accept unsubsidized employment with scheduled hours up to 34 hours per week, provided that the scheduled hours do not exceed the number of hours that the parent has been determined able‑to‑work‑part‑time; or

(ii)  If one participating parent has been determined able‑to‑work‑part‑time fewer than 30 hours per week, that parent shall work in unsubsidized work or participate in one or more work activities for the number of hours that the parent has been determined able‑to‑work‑part‑time.

(D)  If the family includes only one adult (parent, relative, or caretaker) who is able‑to‑work and no child is under the age of six years, the participant shall work in unsubsidized employment or participate in one or more work activities for no fewer than 30 hours per week, and shall accept unsubsidized employment with scheduled hours up to 35 hours per week.

(E)  If the family includes only one adult (parent, relative, or caretaker) who is able‑to‑work‑part‑time and no child is under the age of six years:

(i)  If the participant has been determined able‑to‑work‑part‑time at least 30 hours per week, the participant shall work in unsubsidized employment or participate in one or more work activities for no fewer than 30 hours per week and shall accept unsubsidized employment with scheduled hours up to 34 hours per week, provided that the scheduled hours do not exceed the number of hours that the participant has been determined able‑to‑work‑part‑time; or

(ii)  If the participant has been determined able‑to‑work‑part‑time fewer than 30 hours per week, the participant shall work in unsubsidized work or participate in one or more work activities fewer than 30 hours per week for the number of hours that the participant has been determined able‑to‑work‑part‑time.

(F)  If the family includes only one adult (parent, relative, or caretaker) who is able‑to‑work and a child under the age of six years, the participant shall work in unsubsidized employment or participate in one or more work activities for no fewer than 20 hours per week and shall accept unsubsidized employment with scheduled hours up to 24 hours per week.

(G)  If the family includes only one adult (parent, relative, or caretaker) who is able‑to‑work‑part‑time and a child under the age of six years:

(i)  If the participant has been determined able‑to‑work‑part‑time at least 20 hours per week, the participant shall work in unsubsidized employment or participate in one or more work activities for no fewer than 20 hours per week, and shall accept unsubsidized employment with scheduled hours up to 24 hours per week, provided that the scheduled hours do not exceed the number of hours that the participant has been determined able‑to‑work‑part‑time; or

(ii)  If the participant has been determined able‑to‑work‑part‑time fewer than 20 hours per week, the participant shall work in unsubsidized work or participate in one or more work activities fewer than 20 hours per week for the number of hours that the participant has been determined able‑to‑work‑part‑time.

(4)  Except as provided in section 1133 of this title, in computing the cumulative 12‑month period of financial assistance for determining the effective date of a participating adult’s work requirement under subsection (b) of this section, the calculation shall not extend to times prior to the effective date of this section.

(5)(4)  A pregnant individual who is employed shall continue such employment unless there has been a medical determination that the individual is unable‑to‑work, or the individual is exempt from the work requirement based on other criteria established by the commissioner by rule.  A pregnant individual shall not be required to begin new employment.

* * *

(e)  The commissioner may require a participant to participate in job search, coordinated by the commissioner, for the number of hours per week that corresponds to the participant’s work requirement hours under subsection (c) of this section, or a lesser amount that in combination with the participant’s unsubsidized paid employment equals the participant’s work requirement hours under subsection (c) of this section, and during the following periods:

(1)  For a two‑week period immediately following the family’s application for benefits, or reapplication for benefits following a period of non‑receipt lasting at least 30 days, or during the period a decision on application or reapplication is pending, whichever period ends later, and as long as consistent with subdivisions 1112(b)(1), (2), or (3) of this title;

(2)  For a period of two weeks at any time when the participant is deemed to be job‑ready by the commissioner;

(3)  For the first two weeks of the 13th calendar month for which financial assistance is received; and

(4)  For a period of two weeks following the loss of paid employment.

(f)  If a participant is job‑ready and no unsubsidized job is available, or if the participant is work‑ready but not job‑ready, the participant shall accept a subsidized job, community work experience, job search, other work activities, or any combination of these activities, as deemed appropriate by the commissioner that equals the number of hours of the participant’s work requirement per week, or a lesser amount that, in combination with the parent’s unsubsidized paid employment, equals the number of hours of the participant’s work requirement.

(g)(f)  Notwithstanding any other provision of this chapter, a participant’s hours of unpaid work activities that are not primarily education, job search, job readiness activities, or training shall not exceed the levels established by the Fair Labor Standards Act.  Adjustments required to conform with the Fair Labor Standards Act shall be made pursuant to calculation standards established by the commissioner by rule.

* * *

Sec. 11.  33 V.S.A. § 1114 is amended to read:

§ 1114.  DEFERMENTS AND, MODIFICATIONS, AND REFERRAL

(a)  The commissioner shall establish by rule criteria, standards, and procedures for granting deferments from or modifications to the work requirements established in section 1113 of this title, in accordance with the provisions of this section and for referring individuals with disabilities to the office of vocational rehabilitation.

* * *

(b)  The work requirements shall be either modified or deferred for:

* * *

(3)  A participant who is able‑to‑work‑part‑time or is unable‑to‑work.  Such participants shall be referred for assessment and vocational and other services in accordance with the provisions of his or her family development plan.  Participants with disabilities that do not meet the standards used to determine disability under Title XVI of the Social Security Act shall participate in appropriate rehabilitation, education, or training programs.

(4)(3)  A primary caretaker parent in a two‑parent family in which one parent is able‑to‑work‑part‑time or unable‑to‑work, a single parent, or a caretaker who is caring for a child who has not attained 24 months of age for no more than 24 months of the parent’s or caretaker’s lifetime receipt of financial assistance.  To qualify for such deferment, a parent or caretaker of a child older than the age of six months but younger than 24 months shall cooperate in the development of and participate in a family development plan.

(5)(4)  An individual who has exhausted the 24 months of deferment provided for in subdivision (4)(3) of this subsection and who is caring for a child who is not yet 13 weeks of age or a primary caretaker parent in a family with two parents who are able‑to‑work if the primary caretaker is caring for a child under 13 weeks of age and is otherwise subject to a work requirement because the other parent in the family is being sanctioned in accordance with section 1116 of this title.

(6)(5)  A participant who is needed in the home on a full or part‑time basis in order to care for an ill or disabled parent, spouse, or child.  In granting deferments, the department shall give deference to the participant’s preference as to the number of hours the participant is able to leave home to participate in work activities.

 (7)(6)  A participant who is under 20 years of age, who is a single head of household or married, and who maintains satisfactory attendance at secondary school or the equivalent during the month, or participates in education directly related to employment for an average of 20 or more hours per week during the month.

(8)(7)  A participant who has attained 20 years of age and who is engaged in at least 25 hours per week of classes and related learning activities for the purpose of attaining a high school diploma or general educational development (GED) certificate; provided that the participant is making satisfactory progress toward the attainment of such diploma or certificate; and provided further that a deferment or modification granted for this purpose does not exceed six months.

(9)(8)  A participant who is enrolled in, attending, and making satisfactory progress toward the completion of a full‑time vocational training program that has a normal duration of no more than two years and who is within 12 months of expected completion of such program.  Such deferment or modification shall continue until he or she has completed the program, he or she is no longer attending the program, or the 12‑month expected completion period has ended, whichever occurs first.

(10)(9)  A participant for whom, due to the effects of domestic violence, fulfillment of the work requirement can be reasonably anticipated to result in serious physical or emotional harm to the participant that significantly impairs his or her capacity either to fulfill the work requirement or to care for his or her child adequately, or can be reasonably anticipated to result in serious physical or emotional harm to the child.

(11)(10)  Any other participant designated by the commissioner in accordance with criteria established by rule.

(c)  A participant who is able‑to‑work‑part‑time or is unable‑to‑work shall be referred for assessment of the individual’s skills and strengths, accommodations and support services, and vocational and other services in accordance with the provisions of his or her family development plan.  The work requirement hours shall reflect the individual’s ability to work. Participants with disabilities that do not meet the standards used to determine disability under Title XVI of the Social Security Act shall participate in rehabilitation, education, or training programs as appropriate.  A participant who qualifies for a deferment or modification and who is able‑to‑work‑part‑time shall have his or her work requirement hours modified or deferred.  In granting deferments, the department shall give deference to the participant’s estimation of the number of hours the participant is able‑to‑work.

 (c)(d)  Absent an apparent condition or claimed physical, emotional or mental condition, participants are presumed to be able‑to‑work.  A participant shall have the burden of demonstrating the existence of the circumstances or condition asserted as the basis for a deferral or modification of the work requirement.

(d)  A participant who qualifies for a deferment or modification under subsection (b) of this section and who is able‑to‑work‑part‑time shall have his or her work requirement hours modified instead of deferred.

* * *

Sec. 12.  33 V.S.A. § 1116(f)(2) is amended to read:

(2)  The commissioner shall provide the housing costs by vendor electronic or direct payment directly to the vendor person to whom housing costs are owed.  Any balance of financial assistance remaining after the vendor electronic or direct payment has been deducted shall be paid in two payments, the first to be paid within the first half of the calendar month and the second to be paid within the second half of the calendar month.

Sec. 13.  33 V.S.A. § 1116(h) is amended to read:

(h)  To receive payments during the fiscal sanction period, an adult who is the subject of the sanction shall meet no less than once each month to report his or her circumstances to the case manager or to participate in assessments as directed by the case manager.  In addition, this meeting shall be for initial assessment and development of the family development plan when such tasks have not been completed; reassessment or review and revision of the family development plan, if appropriate; and to encourage the participant to fulfill the work requirement.  Meetings required under this section may take place in the district office, a community location, or in the participant’s home.  Facilitation of meeting the participant’s family development plan goals shall be a primary consideration in determining the location of the meeting.  The commissioner may waive any meeting when extraordinary circumstances prevent a participant from attending.  The commissioner shall adopt rules to implement this subsection.

Sec. 14.  33 V.S.A. § 1121 is amended to read:

§ 1121.  AUTHORIZATION TO SEGREGATE STATE FUNDS AND CREATE SEPARATE STATE AND SOLELY STATE-FUNDED PROGRAMS

(a)  Consistent with the purposes of this chapter, the commissioner shall structure payment of appropriated TANF funds and, state “maintenance of effort” funds, and general funds to create separate state and segregated fund solely state‑funded programs to aid families eligible for the financial assistance.  For purposes of this chapter:

(1)  “Separate state program” means a program in which state funds are used to fund the program, and these funds are counted toward the state’s maintenance‑of‑effort requirement under TANF.

(2)  “Solely state‑funded program” means a program in which state funds are used to fund the program and are not counted toward the state’s maintenance‑of‑effort requirement in order to maintain flexibility.

(b)  The commissioner shall establish by rule standards, requirements, and criteria for the administration of any program established pursuant to this section that requires rules different from the financial assistance program.

(c)  Programs and payment structures created pursuant to this section shall accomplish one or more of the following purposes:

(1)  To provide work supports and assistance to working families while preserving their ability to receive financial assistance beyond the federal TANF 60‑month lifetime limit.

(2)  To foster parental nurturing of children in their own homes.

(3)  To stabilize families in crisis.

(4)  To preserve financial assistance options beyond the federal TANF 60‑month lifetime limit for families addressing multiple issues relating to

self‑sufficiency.

(5)  To preserve eligibility for financial assistance for certain parents who are under 18 and legal aliens whom federal law makes ineligible for

TANF‑funded assistance.

(6)  To provide for the transition of families in the welfare restructuring project to the Reach Up program.

(7)(6)  To ensure that the state complies with the federal TANF program requirements and is able to avoid federal fiscal sanctions.

(d)(1)  The following separate state solely state‑funded programs shall be established, in accordance with rules adopted by the commissioner:

(1)(A)  The separate state postsecondary education program established under section 1122 of this title.

(2)  A program for families in which the adult (parent or caretaker) or adults (parents) are not involved in work activities at a TANF‑countable level, limited to the number of families necessary to meet federal TANF participation rate requirements.

(3)(B)  A program for families with a single parent, a caretaker, or two parents with one parent who is able‑to‑work‑part‑time or unable‑to‑work that have a primary caretaker of a child under 24 months of age who chooses pursuant to subdivision 1114(b)(4) subsection 1114(b) of this title to defer the work requirement and to remain at home caring for the child, provided that the deferment is limited to any 24 months over the primary caretaker’s lifetime, and the elimination of such work requirement is not a state option under TANF.

(C)  A program for the following vulnerable families:

(i)  a minor parent who is not meeting the TANF requirements;

(ii)  families who have received TANF‑funded assistance for over 60 months and do not qualify for the hardship exemption as provided for by rule;

(2)  Solely state‑funded programs may be established, in accordance with rules adopted by the commissioner, for the following individuals:

(A)  families in which the parents or caretakers are ineligible immigrants, who are considered work eligible under federal law, but are unable to meet the number of hours in work activities required for the family to be counted as meeting the work requirement under federal law;

(B)  adults who have been in sanction for more than three months;

(C)  families in which the parents have disabilities;

(D)  families in which one or more child has a disability and in which a family member is considered a work‑eligible individual;

(E)  families in which the parents or caretakers have an application pending for Supplemental Security Income; and

(F)  two‑parent households who are unable to meet the number of hours in work activities required for the family to be counted as meeting the work requirement under federal law, unless the federal law allows the state to exclude these families from the work participation rate or provides for an achievable work participation rate as determined by the commissioner.

(e)  The Reach Up Ahead program shall include a segregated funds be a separate state program structured to pay appropriated state maintenance of effort funds to families in which the parent or caretaker is engaged in unsubsidized employment for the number of hours that meets the applicable TANF participation rate requirement and provided there are sufficient general funds to fund the separate state programs established in subdivisions (d)(1) through (3) of this section.  If there are insufficient general funds to pay these families, then they shall be paid from TANF funds.  For self‑employment to be considered unsubsidized employment under this subdivision, average net weekly earnings shall equal or exceed the minimum wage multiplied by the applicable number of TANF‑countable hours.

(f)  The commissioner may establish other separate state and solely state‑funded programs necessary to meet the goals established in this chapter.

(g)  In furtherance of the policy goals of this section and in order to establish an excess of maintenance‑of‑effort state funds, the commissioner shall maximize maintenance‑of‑effort state funds in the reports to the U.S. Administration for Children and Families.

Sec. 15.  33 V.S.A. § 1122 is amended to read:

§ 1122.  POSTSECONDARY EDUCATION PROGRAM

(a)  The commissioner shall establish by rule a separate state solely state‑funded program to provide living expense stipends financial assistance equivalent to the Reach Up financial assistance amount the family would receive if it were participating in the Reach Up program and support services to enable parents in eligible families to pursue undergraduate postsecondary degrees in fields directly related to employment.

(b)  The program authorized by this section shall be administered by the commissioner or by a contractor designated by the commissioner, and shall be supported with funds other than federal TANF block grant funds provided under Title IV‑A of the Social Security Act.

(c)  The Financial eligibility for the program and the amount of the program’s living expense stipend financial assistance shall be determined using Reach Up financial assistance rules with the following modifications:.  The commissioner may use Reach Up rules for the postsecondary education program with the exception of rules inconsistent with this section or related to the work requirements.  

(1)  The amount of the living expense stipend shall be determined at the time of the financial eligibility determination for admission into the program, and annually thereafter within 90 days before the beginning of the participant’s academic year.

(2)  The maximum living expense stipend for a family with three or fewer members shall be the amount that is equal to the ratably reduced sum of the Reach Up basic needs allowance for a household of three, plus the maximum monthly housing allowance for the county in which they reside.

(3)  The maximum living expense stipend allowed for a family with more than three members shall be the amount that is equal to the ratably reduced sum of the Reach Up basic needs allowance for a household of four, plus the maximum housing allowance for the county in which they reside.

(d)  To be financially eligible to participate in the postsecondary education program, the family must meet the following applicable income test:

(1)  In two‑parent families, the family’s gross income minus the participating parent’s earnings shall not exceed 150 percent of the federal poverty level for a family of four or fewer members as established by the commissioner by rule, or 150 percent of the federal poverty level for a family of five, provided the family included five or more members as established by the commissioner by rule the appropriate family size.

(2)  In single‑parent families, the gross income of the family shall not exceed 150 percent of the federal poverty level for a family of three, provided the family includes three or fewer members as established by the commissioner by rule, or 150 percent of the federal poverty level for a family of four, provided the family includes four or more members as established by the commissioner by rule.

(3)  All program participants shall demonstrate financial eligibility at the time of application, for the calendar year preceding application, and within the 90‑day period prior to the beginning of each academic year of the institution in which the participant is enrolled.

(4)  Verification of all income amounts required by this subsection shall be provided in accordance with Reach Up program rules.

(e)  All financially eligible families who apply to participate in the postsecondary education program will be considered for admission provided that they meet all of the following criteria:

(1)  No more than one parent per family may participate at the same time.

(2)  If the participating parent is in a two‑parent family, the nonparticipating parent shall, if able‑to‑work, be working full‑time; if able‑to‑work‑part‑time, shall be working at least the number of hours per week that he or she has been determined able‑to‑work‑part‑time; or, if unable‑to‑work, may be unemployed.

(3)(A)  The participating parent has not already received a postsecondary undergraduate degree;

(B)  The participating parent has already received a postsecondary undergraduate degree and the occupations for which it prepared the participating parent are obsolete;

(C)  The participating parent, due to a disability, is no longer able to perform the occupations for which the degree prepared him or her; or

(D)  The preparation for occupations that the participating parent received through the postsecondary undergraduate degree is outdated and not marketable in the current labor market.

(4)  The participating parent shall be a matriculating student in a two‑year or four‑year degree program as provided for in the postsecondary education plan.

(5)  The participating parent has been determined to be eligible for financial assistance from the Vermont student assistance corporation, and can demonstrate that he or she has the ability to cover tuition costs.

(6)  The participating parent agrees to limit employment to no more than 20 hours per week when school is in session.

(7)  Participating families who are eligible for Reach Up financial assistance shall agree to accept the program living expense stipend in lieu of a Reach Up financial assistance grant.

(8)  For a period of five years beginning with the date of a parent’s receipt of a postsecondary education degree due to successful completion of this program, the parent and the parent’s family, if financially eligible, shall receive no more than 12 cumulative months of Reach Up financial assistance, and the participating parent shall comply with the following conditions:

(i)  The parent shall engage in job search at a TANF‑countable level for the first four weeks of the family’s receipt of a financial assistance grant;

(ii)  Unless employed full time, the parent shall engage in approved work activities at a TANF‑countable level during all months following the initial job search that the family receives financial assistance; and

(iii)  Parents who have not been sanctioned since receiving their postsecondary education degree, have not left an unsubsidized degree‑related job without good cause since receiving their postsecondary education degree, and have followed through, satisfactorily, on all referrals to degree‑related jobs since receiving their postsecondary education degree shall only have to accept unsubsidized jobs related to their degree during the first three months following receipt of their degree. Parents who have been sanctioned since receiving their postsecondary education degree, have left an unsubsidized degree‑related job without good cause since receiving their postsecondary education degree, have not followed through, satisfactorily, on all referrals to degree‑related jobs since receiving their postsecondary education degree, or have not, after receipt of three cumulative months of financial assistance, obtained a job in a field related to their postsecondary degree, shall accept any unsubsidized job that is offered.

(B)  The limitation on receiving no more than 12 cumulative months of Reach Up cash assistance established under subdivision (A) of this subdivision (8) shall not apply if:

(i)  the parent who received the postsecondary education degree has not been offered a full‑time, unsubsidized job;

(ii) all parents in the family have become so severely disabled that they are precluded from being employed;

(iii)  in the case of a single‑parent family, a child in the family has become so severely disabled that the parent is precluded from being employed; or

(iv)  a catastrophic family event precludes the parent’s employment, as determined by the commissioner.

(9)(6)  The participating parent establishes and follows a postsecondary education plan that has been approved by the commissioner or his or her designee.  Each postsecondary education plan shall include the following:

(A)  the occupation that the parent proposes to pursue;

(B)  a schedule that assures the participating parent will complete the coursework necessary for a two‑year degree within three years and for a four‑year degree within five years.  The commissioner shall establish by rule criteria for exceptions to such time limits.  Such criteria shall be based on circumstances beyond the parent’s control;

(C)  a schedule reflecting that, when an applicant has at least 15 credit hours of course credits that can be applied to the degree being pursued, four months for every 15 credit hours of coursework that can be applied to the degree has been deducted from the three‑year time period allowed for a two‑year degree or the five‑year time period allowed for a four‑year degree; and

(D)  a schedule reflecting that, when a parent who has already obtained a two‑year degree through participation in the program authorized by this section is pursuing a four‑year degree, the time period that was used to obtain the two‑year degree has been subtracted from the five‑year time period allowed for a four‑year degree.

(10)(7)  The family and the participating adult maintain financial eligibility for the program and uninterrupted residency in Vermont for the duration of participation in the postsecondary education program.

(11)(8)  The participating parent maintains good academic standing at the college.

(f)  Participation in the program authorized by this section may be denied to parents meeting the eligibility criteria if program funds are insufficient to allow all eligible applicants to participate. When funds are insufficient to allow all eligible applicants to participate, priority shall be given to those individuals with no postsecondary education who:

(1)  have demonstrated the ability to be successful in college, have already accumulated credits that can be applied to a college degree, and qualify for financial assistance;

(2)  have no postsecondary education and qualify for financial assistance;

(3)  have demonstrated the ability to be successful in college, have already accumulated credits that can be applied to a college degree, and qualify for services but not financial assistance;

(4)  have no postsecondary education and qualify for services but not financial assistance.

(g)  Continued participation in the postsecondary education program is contingent on the participating parent:

(1)  maintaining compliance with all program criteria in subsections (d) and (e) of this section; and

(2)  remaining a member in good standing of the college and making progress toward a degree.

(h)  For the purposes of this section:

(1)  “Full‑time” means 40 hours per week or a position requiring no fewer than 35 hours of work per week that the employer defines as

full‑time.

(2)  “Parent” means either a biological parent, stepparent, or adoptive parent who has custody of and resides with a dependent minor child.

Sec. 16.  33 V.S.A. § 1133 is amended to read:

§ 1133.  TRANSITION FROM WELFARE RESTRUCTURING PROJECT TO REACH UP PROGRAM OTHER PROGRAMS

(a)  The commissioner shall restructure the system of Aid to Needy Families with Children in accordance with the provisions of this chapter.  The restructuring shall be carried out on a statewide basis.  The restructured program shall be reconstituted as the Reach Up program.

(b)  The commissioner shall ensure that representatives of participating families, representatives of community agencies, and representatives of the department staff play an active role in the planning, implementation, and evaluation of the restructuring required by this chapter.

(c)  The commissioner shall develop a plan and adopt rules to phase current members of the existing ANFC caseload into the new Reach Up program.

(d)  Notwithstanding any other provision of law, able‑bodied single parents and able‑bodied parents in two‑parent families in which one parent is incapacitated who are receiving Aid to Needy Families with Children (“ANFC”) and have their families’ eligibility for and amount of ANFC benefits determined in accordance with welfare restructuring project rules that include a work requirement, in accordance with Sec. 10(a) of Act No. 106 of 1994 shall be deemed work‑ready as follows:

(1)  Parents in families who have received 28 or more cumulative months of ANFC benefits before November 1, 2000, shall be deemed work‑ready as of January 1, 2001.

(2)  Parents in families who have received their 28th cumulative month of ANFC benefits during the period beginning November 1, 2000, and ending on April 30, 2001, shall be deemed work‑ready as of the first day of the 30th cumulative month of having received ANFC benefits.

(3)  Two months prior to being deemed work‑ready in accordance with subdivisions (1) and (2) of this subsection, parents shall work with their case manager, if necessary, to prepare or include in their family development plan their participation in TANF‑countable work activities, as specified by rule, that are sufficient to meet their weekly hours of work requirement.

(4)  During the period from November 1, 2000, through June 30, 2001, the parents subject to this subsection shall also be subject to the exemption policies defined in Sec. 11 and the sanction policies defined in Sec. 12 of Act No. 106 of 1994.

(e)  Notwithstanding any other provision of law, able‑to‑work and able‑to‑work‑part‑time parents and caretakers in families in which one or both of the ANFC children’s parents are absent and able‑to‑work and able‑to‑work‑part‑time parents in two‑parent families in which one parent is unable‑to‑work shall be deemed job‑ or work‑ready as follows:

(1)  Parents and caretakers in families who, subsequent to June 30, 1994, have received at least 22 cumulative months of ANFC benefits by July 1, 2001, shall be deemed job‑ or work‑ready no later than September 1, 2001.

(2)  Parents and caretakers in families who, subsequent to June 30, 1994, have received at least 16 cumulative months of ANFC benefits by September 1, 2001, shall be deemed job‑ or work‑ready no later than November 1, 2001.

(3)  Parents and caretakers in families who, subsequent to June 30, 1994, have received at least 10 cumulative months of ANFC benefits by November 1, 2001, shall be deemed job‑ or work‑ready no later than January 1, 2002.

(4)  Parents and caretakers in families who, subsequent to June 30, 1994, have received at least 10 cumulative months of ANFC benefits by January 1, 2002, shall be deemed job‑ or work‑ready no later than March 1, 2002.

(5)  Parents and caretakers in families who, subsequent to June 30, 1994, have received at least 10 cumulative months of ANFC benefits by March 1, 2002, shall be deemed job‑ or work‑ready no later than May 1, 2002.

(f)  Notwithstanding any other provision of law and effective May 1, 2001, able‑bodied parents who are not the primary caretaker in two‑parent families that have received ANFC benefits for at least 10 cumulative months shall be deemed job‑ or work‑ready as of July 1, 2001.

(g)  All parents and caretakers deemed job‑ or work‑ready, as provided in subsections (e) and (f) of this section:

(1)  Shall work with their case manager during the two months prior to being deemed job‑ or work‑ready to complete their assessment and prepare a family development plan that requires their participation in TANF‑countable work activities, as specified by rule, that are sufficient to meet the parent’s or caretaker’s work requirement as specified in section 1113 of this title; and

(2)  Shall be subject to the deferments and modifications provisions of section 1114 of this title, and the work incentive and sanctions provisions of section 1116 of this title.

(a)  The department shall transfer the family to Reach Up, a separate state program, or a solely state‑funded program established under chapter 11 if, after four months of receiving support in Reach First or sooner at the department’s discretion, a family is assessed as needing ongoing financial assistance and the family is financially eligible for Reach Up, a separate state program, or a solely state‑funded program established under chapter 11 of this title, unless the family chooses not to participate.

(b)  If a family finds unsubsidized employment meeting or exceeding the work requirements for Reach Up for the family’s size and composition, but is financially eligible for Reach Up, the department shall transfer the family to Reach Up, unless the family chooses not to participate.  A family transferring from Reach First to Reach Up shall be treated as a recipient for the purposes of income calculation.

(c)  If a family finds unsubsidized employment meeting or exceeding the work requirements for Reach Up for the family’s size and composition, is not financially eligible for Reach Up, and is eligible for the Reach Ahead program, the department shall transfer the family to Reach Ahead, unless the family chooses not to participate.  A family transferring from Reach Up to Reach Ahead shall be treated as a recipient for the purposes of income calculation.

(d)  A family transferring to another program under subsections (a) through (c) of this section shall not be required to complete a new application. Verification of income or other required documentation may be required as provided for by rule.

Sec. 17.  33 V.S.A. § 1134 is amended to read:

§ 1134.  PROGRAM EVALUATION

(a)  On or before January 31 of each year, the commissioner shall design and implement procedures to evaluate, measure and report to the governor and the general assembly the department’s progress in implementing the Reach First, Reach Up program, and Reach Ahead and achieving the goals of the program programs provided for in section sections 1002, 1102, and 1202 of this title.  The report shall include:

(1)  The types of barriers facing Reach Up families seeking economic self‑sufficiency, the number of families with each type of barrier, and the frequency of occurrence of each type of barrier, and how support services and incentives assist in overcoming barriers.

(2)  Documentation of participant outcomes, including specific information relating to the number of persons employed, by occupation, industry and wage; the types of subsidized and unsubsidized jobs secured by participants; any available information about outcomes for children who have participated in the Reach Up program programs, including objective indicators of improved conditions; and the number of participating families involved in training programs; and whether the support services and incentives assist in keeping families employed.

(3)  A description of the case management system and the training of case managers.

(4)(3)  Data about the food stamp participation of households who have left Reach Up the programs during the last fiscal year, including the number of households, adults and children participating in the food stamp program three months after termination of their Reach Up benefits leaving the applicable program, broken down by reason for Reach Up termination or leaving, and the department’s plan to identify and assist eligible households to apply for food stamps.

(5)(4)  Data about the enrollment of individuals who have left Reach Up the programs during the last fiscal year in a health care assistance program, including the number of adults and children enrolled in a health care assistance program three months after termination of their Reach Up benefits leaving the applicable program, broken down by reason for Reach Up termination or leaving, and the department’s plan to identify and assist eligible households to apply for health care assistance.

(6)(5)  A summary of all interim and final reports submitted by independent evaluation contractors to the agency or the department relating to the Reach Up program programs.

(6)  A description of the work participation rates, including the method of calculating the caseload reduction credit, for the most recent federal fiscal year.

(7) A description of the current basic needs budget and housing allowance, the current maximum grant amounts, and the basic needs budget and housing allowance adjusted to reflect an annual cost‑of‑living increase.

(8)  A summary of the analysis done under subsection (b) of this section. 

(b)  On or before January 15, 2001, the commissioner of education, with the assistance of the commissioner, the commissioner of disabilities, aging, and independent living, and the commissioner of labor shall report to the senate and house committees on health and welfare and education the progress they have achieved in developing and implementing the comparable and reciprocally recognized literacy assessment protocols as described in subsection 1107(e) of this title.  On or before January 15, 2010 for the analysis of Reach First and on or before January 15, 2012 for the analysis of all programs, the department shall analyze the effectiveness of the programs and shall consider the following indicators:

(1)  For Reach First, the types of crises presented by applicants; the type and duration of case management necessary to respond to a crisis; and the impact of the services on the family, including the actual and perceived outcomes and material indicators of stability.

(2)  For Reach Up, the type and duration of case management provided; and the impact of the services on the family; the family’s achievement of the goals in the family development plan; the types of employment engaged in by families; the duration of employment; and actual and perceived outcomes and material indicators of stability and well‑being.

(3)  For Reach Ahead, the types of employment engaged in by families; the duration of employment; the type and duration of services necessary to maintain employment; the duration of time the family received food assistance and services in the program; and the impact of the services on the family, including the actual and perceived well‑being of the family and material indicators of well‑being.

(4)  Whether the programs are effectively integrated and transitions between programs are simple, and the number of families who choose not to participate, and why.

(c)  [Repealed.]

(d)  On or before January 15, 2005, January 15, 2006, and January 15, 2007, the commissioner shall report to the house and senate committees on health and welfare and appropriations on families’ receipt of aid authorized by this chapter.  Such reports shall include:

(1)  For the report due on or before January 15, 2005, from among all families receiving TANF‑funded aid during the period from July 1, 2001, through September 30, 2004, the number of families that received such aid for no more than six cumulative months, more than six but no more than 12 cumulative months, more than 12 but no more than 18 cumulative months, more than 18 but no more than 24 cumulative months, more than 24 but no more than 30 cumulative months, and more than 30 cumulative months.

(2)  For the report due on or before January 15, 2006, from among all families receiving TANF‑funded aid during the period from July 1, 2001, through September 30, 2005, the number of families that received such aid for no more than six cumulative months, more than six but no more than 12 cumulative months, more than 12 but no more than 18 cumulative months, more than 18 but no more than 24 cumulative months, more than 24 but no more than 30 cumulative months, more than 30 but no more than 36 cumulative months, more than 36 but no more than 42 cumulative months, and more than 42 cumulative months.

(3)  For the report due on or before January 15, 2007, from among all families receiving TANF‑funded aid during the period from July 1, 2001, through September 30, 2006, the number of families that received such aid for no more than six cumulative months, more than six but no more than 12 cumulative months, more than 12 but no more than 18 cumulative months, more than 18 but no more than 24 cumulative months, more than 24 but no more than 30 cumulative months, more than 30 but no more than 36 cumulative months, more than 36 but no more than 42 cumulative months, more than 42 but no more than 48 cumulative months, more than 48 but no more than 54 cumulative months, and more than 54 cumulative months.

(4)  For each report, an estimate, for federal fiscal years 2008, 2009, and 2010, of the average proportion of the monthly TANF‑funded caseload that will include an adult family member who has received TANF‑funded aid, as an adult, 60 or more months in his or her lifetime.

(5)  When such proportion exceeds 20 percent, an assessment, based on an assumption of level funding in future years, of whether general funds will be sufficient in federal fiscal years 2008, 2009, and 2010, to support aid authorized by this chapter to fund aid for those families in excess of 20 percent while, at the same time, providing aid and services, supported solely by general funds, to other families as authorized by this act.

(6)  When such assessment is that general funds will be insufficient to fund aid for all such families, the modifications in policy, appropriated general funds, or combination thereof that the commissioner recommends to support families receiving aid under this chapter in their achievement of self‑sufficiency and to protect the children in these families.

(e)(c)  Beginning on or before January 15, 2008, and annually thereafter, the commissioner shall report to the house committees on human services and appropriations and senate committees on health and welfare and appropriations on families’ long‑term receipt of aid financial assistance authorized by this chapter.  Such reports shall include:

(1)  the number of families receiving aid financial assistance in the most recent federal fiscal year that included an adult family member who has received TANF‑funded aid financial assistance, as an adult, 60 or more months in his or her lifetime;

(2)  the average proportion of the monthly TANF‑funded caseload during the same fiscal year that such families represent;

(3)  when such proportion exceeds 20 percent, the sufficiency of general funds appropriated to support aid financial assistance authorized by this chapter to fund aid financial assistance for those families in excess of 20 percent while, at the same time, providing aid financial assistance and services, supported solely by general funds, to other families as authorized by this chapter; and

(4)  when appropriated general funds are insufficient to fund aid financial assistance for all such families, the modifications in policy, appropriated general funds, or combination thereof that the commissioner recommends to support families receiving aid financial assistance under this chapter in their achievement of self‑sufficiency and to protect the children in these families.

* * * Reach Ahead * * *

Sec. 18.  33 V.S.A. chapter 12 is added to read:

Chapter 12.  Reach Ahead

Subchapter 1.  Eligibility and Assistance

§ 1201.  DEFINITIONS

As used in this chapter:

(1)  “Adult” means an individual who:

(A)  is 18 years of age or older, and not a dependent child; or

(B)  is under 18 years of age and:

(i)  is pregnant; or

(ii)  is a parent who is the caretaker for a dependent child.

(2)  “Barrier” means any physical, emotional, or mental condition, any lack of an educational, vocational, or other skill or ability, and any lack of transportation, child care, housing, medical assistance or other services or resources, domestic violence circumstances, caretaker responsibilities, or other conditions or circumstances that prevent an individual from engaging in employment or other work activity.

(3)  “Caretaker” means an individual age 18 or older who is fulfilling a parental role in caring for a dependent child by providing physical care, guidance, and decision‑making related to the child’s health, school, medical care, and discipline.

(4)  “Commissioner” means the commissioner of the department for children and families, or his or her designee.

(5)  “Department” means the department for children and families.

(6)  “Dependent child” means a child who is a resident of this state and:

(A)  is under the age of 18 years; or

(B)  is 18 years of age or older who is a full‑time student in a secondary school, or attending an equivalent level of vocational or technical training, and is reasonably expected to complete the educational program before reaching the age of 19 or is not expected to complete the educational program before reaching age 19 solely due to a documented disability.

(7)  “Eligible family” means a family that meets the requirements in section 1203 of this chapter.

(8)  “Family” means:

(A)  one or more dependent children living with one or both parents or a relative or caretaker of such children; or

(B)  a pregnant individual.

(9)  “Food assistance” means a monthly benefit to supplement the family’s food stamp benefit as determined under section 1204 of this chapter.

(10)  “Living with a relative or caretaker” means living with a caretaker or relative in a residence maintained by the caretaker or one or more relatives at his or her or their home.

(11)  “Parent” means a biological parent, stepparent, adoptive parent, or pregnant individual.

(12)  “Participant” or “participating adult” means an adult member of a participating family.

(13)  “Participating family” means an eligible family that participates in the Reach Ahead program.

(14)  “Reach Ahead services” means the service component of the Reach Ahead program consisting of case management services, support services, and referrals provided to eligible families to assist them in maintaining

self‑sufficiency.

(15)  “Reach First” means the program established under chapter 10 of this title.

(16)  “Reach Up” means the program established under chapter 11 of this title.

(17)  “Relative” means a person related to a dependent child, as defined by the department by rule.

(18)  “Temporary Assistance to Needy Families” or “TANF” means the block grant provided to this state and established in accordance with Part A of Title IV of the federal Social Security Act, as amended, and the regulations promulgated pursuant thereto by the U.S. Secretary of Health and Human Services.

§ 1202.  Purpose

(a)  The purpose of the Reach Ahead program is:

(1)  To assist families who have become recently employed to maintain employment by providing work supports and incentives to maximize the opportunity of the family to remain employed and not return to Reach Up.

(2)  To provide families with information and referrals to workforce development options in order to ensure financial stability for the family.  

(3)  To support parental responsibility and positive parental role models, both custodial and noncustodial.

(4)  To improve the well‑being of children by providing time‑limited work supports and food assistance to their families.

(5)  To conserve state and public financial resources by operating the system of aid in a manner that is efficient and avoids federal fiscal sanctions.

(6)  To conform to the federal TANF law.

(b)  The critical elements of developing a work support program that assists families to maintain self‑sufficiency are:

(1)  if necessary, individualized case management that addresses each individual’s situation and barriers to self‑sufficiency and assists that family in maintaining employment;

(2)  food assistance and support services of a limited duration to provide work support for the family;

(3)  easy transition to other programs, such as Reach Up or Reach First, if needed to ensure the families well‑being and success to reaching

self‑sufficiency.

§ 1203.  Eligibility

A family shall be eligible for Reach Ahead if the family resides in Vermont and:

(1)  has left Reach Up or the postsecondary education program within the prior six months for unsubsidized employment that meets the work requirements for the Reach Up program for the family’s size and composition and meets the financial eligibility guidelines for the Vermont Health Access Program;

(2)  is receiving food stamps and has unsubsidized employment that meets the work requirements for Reach Up for the family’s size and composition; or

(3)  is an individual under 21, has a child, is ineligible for food stamps solely because the individual resides with the individual’s parent, and has unsubsidized employment that meets the work requirements for Reach Up for the family’s size and composition.

§ 1204.  Food Assistance

(a)  An eligible family shall receive monthly food assistance equal to $100.00 to be applied to the family’s electronic benefit transfer (EBT) food account for the first six months after the family has become eligible for Reach Ahead.  For the seventh though 12th months, the family shall receive a monthly food assistance of $50.00.

(b)  Food assistance may be used only to purchase eligible food items as defined in the food stamp federal rules and shall be disregarded as income for the purposes of determining food stamp eligibility and the amount of the food stamp benefits.

(c)  An eligible family shall not be required to assign child support to the department, and all child support received by the family shall be disregarded as income.

§ 1205.  Required services to participating families

The commissioner shall provide participating families Reach Ahead services, case management services if necessary, and referral to any agencies or programs, including workforce development, that provide the services needed by participating families to improve the family’s prospects for employment retention.  Reach Ahead services shall be provided for 12 months.

§ 1206.  Case management; family development plans; coordinated services

The commissioner may provide Reach Ahead services to participating families through a case management model.  If a family needs case management, the commissioner may develop a family development plan as provided for in chapters 10 and 11 of this title.  If a case manager is assigned to the participating family who has been transferred from Reach First or Reach Up, if practicable, the case manager shall be the same case manager the family was assigned previously.

Subchapter 2.  Administrative Provisions

§ 1211.  Recertification

A family’s income and hours of employment and other countable work activities shall be verified every six months to determine continuing eligibility for the program.  To the extent possible for families receiving food stamps, income verification may be done at the same time as the food stamps recertification.

§ 1212.  Transition to other programs

If a family loses unsubsidized employment meeting or exceeding the work requirements for Reach Up for the family’s size and composition and is financially eligible for Reach Up, the family shall be transferred to Reach First or Reach Up without an additional application process, unless the family chooses not to participate.  Verification of income or other documentation may be required as provided for by rule. 

§ 1213.  Notice and Appeal

A participant may appeal decisions in accordance with section 3091 of Title 3.  The commissioner shall provide notice to each participant of the standards and procedures applicable to such appeals.  All federal and agency of human services rules regarding conciliation, notice, hearing, and appeal shall be followed in connection with such appeals.

* * * Financial Assistance Amounts * * *

Sec. 19.  STUDY ON CHILD SUPPORT AND ASSISTANCE LEVELS TO CERTAIN FAMILIES

(a)  The department for children and families, economic services division and the office of child support shall analyze whether the state should implement the option for  increasing the amount of child support disregarded for families receiving Reach First and Reach Up allowed under the Deficit Reduction Act of 2005.  The analysis shall identify the cost to the state of implementing the option, the amount of additional income that would be provided to families, and the effect the additional income to the family would have on the amount or eligibility for any other public assistance or benefits received by the family.

(b)  The division and office shall report to the house committees on human services and appropriations, and the senate committees on health and welfare and appropriations no later than November 30, 2007.

* * * Asset Building * * *

Sec. 20.  ASSET BUILDING; STUDY

The agency of human services shall study how to unify the asset limitations across public assistance programs, including Reach Up, separate state and solely state‑funded programs under chapter 11 of Title 33, general assistance, emergency assistance, Medicaid, Supplemental Security Income, low income heating assistance program (LIHEAP), food stamps, and any subsidized housing programs with asset limitations, with the purpose of encouraging low income individuals and families to have a modest savings for emergencies, postsecondary education, the purchase of a home, starting a business, or retirement.  The agency shall report on any waivers of federal law available and necessary to allow individuals to build assets without becoming ineligible for public assistance programs.  The report shall be presented to the house committees on appropriations and human services and the senate committees on appropriations and health and welfare no later than December 15, 2007.    

* * * Child Care * * *

Sec. 21.  LEGISLATIVE FINDINGS; CHILD CARE

The general assembly finds that:

(1)  Today’s young children are tomorrow’s Vermont.  Recent science on early child development shows that there is much we can do today to ensure that all Vermont children grow into solid members of our communities tomorrow.  We now know that early experiences build the architecture of a child’s developing brain, and the quality of those experiences establishes either a sturdy or fragile foundation for all development that follows.  Nurturing, responsive, individualized interactions with caring adults are essential to establishing a sturdy foundation.  Child development is community development as well as economic development, as healthy, capable children are the building blocks of a solid and productive society.

(2)  Vermont’s child care industry plays a significant role in Vermont’s economy.

(A)  The total economic impact of the child care industry in Vermont is approximately $426 million annually.  Every dollar spent on child care in Vermont stays in the Vermont economy.

(B)  It is estimated that the child care industry employs approximately 5,000 people in Vermont and contributes to the creation or support of 2,232 indirect jobs.

(3)  Economic conditions in the United States require that both parents in many families work outside the home.  Nationally, 61 percent of married couples with children under six years of age had both parents in the workforce in 2000.  In 2002, 80 percent of Vermont women with children under the age of six were employed outside the home.

(4)  National studies consistently show a high return on public investment in early childhood development.  For example, every $1.00 spent on quality early childhood services saves in later education, criminal justice, welfare, foster care, and other social services costs.  Estimates of savings range from $2.00 to over $7.00 for each $1.00 spent on quality early childhood services.

(5)  National experts recommend that families spend no more than 10 percent of household income on child care in order to ensure that other basic needs are met.

(6)  For a Vermont family of four with two working parents and two preschool‑age children (ages three and four and one‑half), with a median household income of $62,331.00 the cost of child care, using a registered family child care home, equals $13,000.00 and represents 21 percent of the family’s household budget.

(7)  For a single parent earning $13,500.00 a year, with two preschool age children (ages three and four and one‑half), the same cost of child care ($13,000.00) would represent 96 percent of the household budget if there were no state subsidy.  Child care costs after being reduced by the maximum available child care subsidy would still leave a co‑pay of $3,984.00, which equals 29.5 percent of this single parent’s budget.  Among working families who pay for child care, more than 27 percent of low and middle income families spend more than one‑fifth of their earnings on child care.

(8)  Vermont’s child care subsidy program, administered by the department for children and families, provides financial assistance to low and middle income families for purchasing child care.  The financial assistance is in the form of a subsidy paid to approved child care programs on behalf of eligible families.

(9)  Income eligibility guidelines for the child care subsidy program are based on the 1999 federal poverty guidelines and state median income.  This means that families, who are not currently eligible for the program, would be eligible for financial assistance if the eligibility guidelines were based on current federal poverty and state median income standards.

(10)  According to the department for children and families, there is a significant gap between the current state child care subsidy rates and the prevailing market rates for care for all types of care and all age groups.

(A)  A family earning $28,000.00 with a four‑year‑old child in full‑time child care has a shortfall of $130.00–$200.00 each month, even with a subsidy.

(B)  The monthly maximum income levels for a family to be eligible for subsidy assistance are $2,586.00 for a family of three, $3,115.00 for a family of four, $3,645.00 for a family of five, and $4,176.00 for a family of six or more.  These income levels have not increased since 1999.

(C)  If the eligibility guidelines for the subsidy program were set using current federal poverty guidelines and state median income, the monthly maximum income levels for a family to be eligible for subsidy assistance would be $3,850.00 for a family of three, $4,529.00 for a family of four, $5,208.00 for a family of five, and $5,989.00 for a family of six or more.

(D)  The average weekly state child care subsidy rates are $21.40 a week less than the average statewide weekly market rates for registered family home child care and are $20.77 a week less than the statewide average weekly market rates for care at licensed child care centers.  This discrepancy results in co‑payments for families that are receiving the full subsidy benefit, including families eligible for Reach Up.  These co‑payments are cost prohibitive for many families.

(E)  The federal Child Care Bureau has established a standard for states to consider when setting their child care subsidy rates at the 75th percentile of market rates.  The purpose of the standard is to ensure eligible families access to most of the care in a community without prohibitive co‑payments.  The discrepancy between the state’s current weekly subsidy rates compared to the statewide average market rates at the 75th percentile is even greater.  The average weekly state subsidy rates are $32.66 a week less than the statewide average weekly market rate at the 75th percentile for registered family home child care and $31.07 a week less than the statewide average weekly market rate at the 75th percentile for licensed child care centers.  While there have been small incremental increases in funding for the child care subsidy program to increase rates by one‑two percent a year for the past four years, it has not been sufficient to establish the state subsidy rates at a level that ensures access to care for eligible families.

(11)  Recent increases in the federal temporary aid to needy families (TANF) work requirements without concomitant federal resources are putting additional pressures on the state’s child care subsidy program.

(12)  As a result:

(A)  working families who need help paying for child care are not eligible for assistance or get far less than they would be eligible for if the income guidelines were updated.  As a result, the ability of some parents to enter the workforce or to select quality, state‑regulated care for their children is undermined;

(B)  child care providers are more and more reluctant to accept children on subsidy because the subsidy rates lag so far behind market rates; and

(C)  families who have to make up the difference between what the state pays and what providers charge often fall behind in co‑pays.  This results in providers having to absorb losses until they can no longer afford to do so, at which point children end up with disruptions in care while parents struggle to find lower cost care or are forced to stop working.

Sec. 22.  CHILD CARE REPORT

(a)  No later than November 1, 2007, the department for children and families shall report to the house committees on human services and on appropriations and the senate committees on health and welfare and on appropriations with an estimate of the funding needed to bring income eligibility guidelines to current levels; an estimate of the funding needed to bring Vermont into compliance with federal guidelines, suggesting that subsidies should be at least 75 percent of the market rate; an assessment of the positive and negative outcomes from modifying the current statewide subsidy rate to differential rates based on the market rate for the area; and an analysis of possible inflation factors with a recommendation on which factors to use once target funding levels have been met.

(b)  No later than November 1, 2007, the legislative council and joint fiscal office shall provide a summary of innovative ideas from other states for funding investments in quality child care and of any available cost‑benefit analyses of such investments.

Sec. 23.  33 V.S.A. § 3512(b) is amended to read:

(b)  The subsidy authorized by this section shall be on a sliding scale basis. The scale shall be established by the commissioner, by rule, and shall bear a reasonable relationship to income and family size.  The lower limit of the fee scale shall include families whose gross income is up to and including 100 percent of the federal poverty guidelines.  The upper income limit of the fee scale shall be neither less than 80 82.5 percent nor more than 100 percent of the state median income, adjusted for the size of the family.  The scale shall be structured so that it encourages employment.

* * * Technical Provisions * * *

Sec. 24.  RULES

The department for children and families are authorized to adopt rules necessary to implement the provisions of this act.

Sec. 25.  IMPLEMENTATION PLAN

(a)  The department for children and families shall develop a three‑year implementation plan with the goal of establishing Reach First on April 1, 2008, establishing Reach Ahead for families who leave Reach Up as provided for in 33 V.S.A. § 1203(3) on April 1, 2009, and establishing Reach Ahead for all other families as provided for in 33 V.S.A. § 1203 no later than July 1, 2009.

(b)  The plan shall include the estimated amount of appropriations necessary to fund the programs established under this act; an assessment of the information technology requirements and modifications necessary to implement the provisions of this act, including the costs; the operational issues and a time frame for the necessary information technology and other solutions; and target dates for adopting rules or rule modifications necessary to implement the changes in this act.  The plan shall make recommendations where applicable for additional resources and describe the consequences of not providing additional funding to enable the successful implementation of the provisions of this act.

(c)  The plan shall be submitted to the house committees on appropriations and human services, the senate committees on appropriations and health and welfare, and the joint fiscal committee no later than September 15, 2007.  

Sec. 26.  EFFECTIVE DATES; IMPLEMENTATION

(a)  This act shall take effect upon passage for the purposes of adopting rules and rule modifications.

(b)  The amendments to 33 V.S.A. chapter 11 contained in Secs. 2‑13 (Reach Up), 14 (solely state‑funded programs), and 16 (Reach Up Transitions) of this act shall take effect immediately when the rule changes necessary to implement the sections become final, but no later than April 1, 2008.  Until the time that the rule modifications are final, the Reach Up program shall operate under current law.  Any provisions in these sections relating to Reach Ahead shall take effect on April 1, 2009.

(c)(1)  The modifications to the postsecondary education program in Sec. 15 of this act, shall take effect when the rules become final, but no later than April 1, 2008Beginning with the postsecondary education participants for the fall 2007 semester, the department may provide participants with financial assistance in lieu of a stipend, using the rules applicable to calculating financial assistance in the Reach Up program. 

(2)  Participants receiving stipends under the postsecondary education program shall be notified of program changes, including the modified calculation of the financial assistance amount.  The calculation change shall be implemented for that participant after adequate notice and on the anniversary of the date the participant commenced the program.

(3)  Participants receiving a stipend on April 1, 2007 who are continuing in the postsecondary education program shall have the financial assistance amount calculated in the same manner as Reach Up financial assistance, unless there is a reduction in benefits based solely on changing from a stipend to a monthly assistance amount.  Current participants whose financial assistance would be reduced solely due to the change from a stipend to a monthly assistance amount shall be held harmless and shall receive financial assistance at the previous level.  

(d)  Reach First established in Sec. 1 of this act shall be implemented no later than April 1, 2008.  Reach Ahead established in Sec. 18 shall be implemented for families who leave Reach Up as provided for in 33 V.S.A. § 1203(3) no later than April 1, 2009.  Reach Ahead shall be implemented for all other families as provided for in 33 V.S.A. § 1203 no later than July 1, 2009.

(e)  Secs. 19 (child support study), 20 (assets study), 21 and 22 (child care report), 23 (child care technical change), 24 (rules), 25 (implementation plan), and 26 (effective dates) shall take effect upon passage.

Second Reading

Favorable

H. 48

An act relating to approval of amendment to the charter of the city of South Burlington authorizing the imposition of a sales, rooms, meals, and alcoholic beverage tax.

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

(Committee vote: 5-0-0)

Reported favorably by Senator Maynard for the Committee on Finance.

(Committee vote: 6-1-0)

(For House amendments, see House Journal for April 19, 2007, page 654.)

H. 429

An act relating to underground and aboveground storage tanks.

Reported favorably by Senator McCormack for the Committee on Natural Resources and Energy.

(Committee vote: 3-0-2)

(No House amendments)


Favorable with Proposal of Amendment

H. 449

An act relating to foster care services and supports.

Reported favorably with recommendation of proposal of amendment by Senator Lyons 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:

Sec. 1.  33 V.S.A. § 4901 is amended to read:

§ 4901.  STATEMENT OF PURPOSES

The department may cooperate with the appropriate federal agency for the purpose of establishing, extending, and strengthening services which supplement or substitute for parental care and supervision including:

(1)  Preventing, remedying, or assisting in the solution of problems which may result in neglect, abuse, exploitation, or delinquency of children.

(2)  Protecting and caring for homeless, dependent or neglected children.

(3)  Protecting and promoting the welfare of children of working parents.

(4) Otherwise protecting and promoting the welfare of children, including the strengthening of their homes where possible or, where needed, providing adequate care away from their homes in child-care facilities.

(5)  Assisting youth in a successful transition to an independent adulthood, including the avoidance of homelessness, incarceration, and substance abuse.

Sec. 2.  33 V.S.A. § 4904 is added to read:

§ 4904.  FOSTER CARE; TRANSITIONAL YOUTH SERVICES

(a)  For purposes of this section, “youth” means a person between 18 and 22 years of age who either:

(1)  attained his or her 18th birthday while in the custody of the commissioner for children and families; or

(2)  while he or she was between 10 and 18 years of age, spent at least five of those years in the custody of the commissioner for children and families.

(b)(1)  The department shall provide foster care services as described in subsection (c) of this section to:

(A) any youth who elects to continue receiving such services after attaining the age of 18.

(B)  any individual under the age of 22 who leaves state custody after the age of 16 and at or before the age of 18 or any youth provided he or she voluntarily requests additional support services.

(2)  The department shall require a youth receiving services under this section to be employed or to attend an educational or vocational program, and, if the youth is working, require that he or she contribute to the cost of services based on a sliding scale, unless the youth meets the criteria for an exception to the employment and educational or vocational program requirements of this section based on a disability or other good cause.  The department shall establish rules for the requirements and exceptions under this subdivision.

(c)  The commissioner shall establish by rule a program to provide a range of age-appropriate services for youth to ensure a successful transition to adulthood, including foster care and other services provided under this chapter to children as appropriate, housing assistance, transportation, case management services, assistance with obtaining and retaining health insurance or employment, and other services.

(d)  The commissioner shall establish a method for measuring, evaluating, and reporting the outcomes of transitional services provided under this section to the house committee on human services and the senate committee on health and welfare annually on January 15.

Sec. 3.  EFFECTIVE DATE

This act shall take effect upon passage.

(Committee Vote: 6-0-0)

(For House amendments, see House Journal for March 27, 2007, page 427; March 28, 2007, page 431.)

H. 521

An act relating to miscellaneous substantive tax amendments.

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 as follows:

First:  By adding a Sec. 10 to read:

Sec. 10.  32 V.S.A. § 3481(1) is amended to read:

(1)  “Appraisal value” shall mean, with respect to property enrolled in a use value appraisal program, the use value appraisal as defined in subdivision 3752(12) of this title, multiplied by the common level of appraisal, and with respect to all other property, the estimated fair market value.  The estimated fair market value of a property is the price which the property will bring in the market when offered for sale and purchased by another, taking into consideration all the elements of the availability of the property, its use both potential and prospective, any functional deficiencies, and all other elements such as age and condition which combine to give property a market value. Those elements shall include a consideration of a decrease in value in non‑rental residential property due to a housing subsidy covenant as defined in section 610 of Title 27, or the effect of any state or local law or regulation affecting the use of land, including but not limited to chapter 151 of Title 10 or any land capability plan established in furtherance or implementation thereof, rules adopted by the state board of health and any local or regional zoning ordinances or development plans.  In determining estimated fair market value, the sale price of the property in question is one element to consider, but is not solely determinative.

For residential rental property that is subject to a housing subsidy covenant or other legal restriction, imposed by a governmental, quasi‑governmental, or public purpose entity, on rents that may be charged, fair market value shall be determined by an income approach using the following elements:

(A)  market rents with utility allowance adjustments for the geographic area in which the property is located as determined by the federal office of Housing and Urban Development or in the case of properties authorized under 42 U.S.C. § 1437, 12 U.S.C. § 1701q, 42 U.S.C. § 1485, 12 U.S.C. § 1715z‑1, 42 U.S.C. § 1437f, and 24 CFR Part 882 Subpart D and E, the higher of contract rents (meaning the amount of federal rental assistance plus any tenant contribution) and HUD market rents;

(B)  actual expenses incurred with respect to the property as which shall be provided by the property owner in a format acceptable to the commissioner and certified by an independent third party, such as a certified public accounting firm or public or quasi‑public funding agency;

(C)  a vacancy rate that is 50 percent of the market vacancy rate as determined by the United States Census Bureau with local review by the Vermont housing finance agency; and

(D)  a capitalization rate that is typical for the geographic area determined and published annually prior to April 1 by the division of property valuation and review after consultation with the Vermont housing finance agency.

Second:  By adding a Sec. 11 to read:

Sec. 11.  EXTENSION OF GRANDFATHERED EDUCATION PROPERTY TAX EXEMPTIONS FROM 1997

      Property tax exemptions authorized before July 1, 1997, under a municipal tax stabilization agreement, charter provision or vote of a municipality, still in effect on June 30, 2007, and qualified as exemptions affecting the education property tax grand list under 32 V.S.A. § 5404a(a), shall continue to affect the education property tax grand list under that section through June 30, 2008.

Third:  By adding Secs. 12 through 22 to read:

Sec. 12.  32 V.S.A. § 5404a(b) is amended to read:

(b)  An agreement affecting the education property tax grand list defined under subsection (a) of this section shall reduce the municipality’s education property tax liability under this chapter for the duration of the agreement or exemption without extension or renewal, and for a maximum of ten years, subject to the provisions of subsection 5930b(f) of this title. A municipality’s property tax liability under this chapter shall be reduced by any difference between the amount of the education property taxes collected on the subject property and the amount of education property taxes that would have been collected on such property if its fair market value were taxed at the equalized nonresidential rate for the tax year.

Sec. 13.  32 V.S.A. § 5404a(e) is amended to read:

(e)  Allocations.  A municipality on behalf of a person may apply to the Vermont economic progress council for an allocation of the education grand list value for up to ten years, of a portion of the increase in the value and liability assessed under section 5402 of this title on new economic development that is subsequently approved by the Vermont economic progress council pursuant to this section and subsections 5930a(c) and (d) of this title. The allocation may be awarded for up to ten years, subject to the provisions of subsection § 5930b(f) of this title.  Allocation to a municipality pursuant to this subsection shall be in addition to any other payments to the municipality under chapter 133 of Title 16.  If allocated, the allocated portion of the education fund liability shall be used by the municipality for infrastructure that includes wastewater treatment, water supply, transportation, and telecommunications and utility connections.

Sec. 14.  32 V.S.A. § 5930a(b) is amended to read:

(b)  The Vermont economic progress council, within 60 days of receipt of a complete application, shall approve or deny the following economic incentives:

(1)  tax stabilization agreements and exemptions under subdivision 5404a(a)(2) of this title;

(2)  applications for allocation to municipalities of a portion of education grand list value and municipal liability from new economic development under subsection 5404a(e) of this title; and

(3)  the Vermont employment growth incentives (VEGI) under section 5930b of this title.

(4)  the tax increment financing (TIF) district program as established in section 5404a of this title.

All incentives are subject to application of the incentive ratio as determined under section 5930b(b)(3) of this title and no tax stabilization agreement, exemption or allocation shall be approved except in conjunction with the approval of an incentive under subdivision (3) of this subsection.

Sec. 15.  32 V.S.A. § 5930a(d) is amended to read:

1)        (d)  The council shall apply the cost‑benefit model in reviewing applications under subdivisions (b)(1), (2), and (3) of this section to determine the net fiscal benefit to the state.  The cost‑benefit model shall be a uniform and comprehensive methodology for assessing and measuring the projected net fiscal benefit or cost to the state of proposed economic development activities over the five‑year award period.  Any modification of the cost‑benefit model shall be subject to the approval of the joint fiscal committee.  The cost‑benefit analysis shall include consideration of the effect of the passage of time and inflation on the value of multi‑year fiscal benefits and costs.

(1)  In determining the projected net fiscal benefit or cost of the incentives considered under subdivisions (b)(1) and (2) of this section, the council shall calculate the net present value of the enhanced or forgone statewide education tax revenues, reflecting both direct and indirect economic activity.  If the council approves an incentive pursuant to this section, the net fiscal costs, if any, to the state shall be counted as if all those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the annual authorization for such approvals established by the legislature for the applicable calendar year.

(2)  In determining the projected net fiscal benefit or cost of the incentives considered under subdivision (b)(3) of this section, the council shall calculate the net present value of the enhanced or forgone state tax revenues attributable to the incentives, reflecting both direct and indirect economic activity over the five‑year award period.  If the council approves an incentive, the net fiscal costs, if any, to the state shall be counted as if all of those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the council's annual authorization for approval of economic incentives as established by the legislature for the applicable calendar year.

Sec. 16.  REPEAL

32 V.S.A. § 5930b(a)(12) (definition of “incremental payroll”) is repealed.

Sec. 17.  32 V.S.A. § 5930b(a)(16) is amended to read:

(16)  “Payroll target” means the projected qualifying payroll Vermont gross wages and salaries for qualifying jobs in an award period year as reported on the Vermont employment growth incentive application.

Sec. 18.  32 V.S.A. § 5930b(a)(17) is amended to read:

(17)  “Payroll threshold” means base payroll or application base payroll (if year 1), plus expected average industry payroll growth as determined by the cost‑benefit model.

Sec. 19.  32 V.S.A. § 5930b(a)(21) is amended to read:

(21)  “Qualifying payroll” means actual annualized Vermont gross wages and salaries paid for qualifying jobs created in or carried forward to a utilization period the award period year, provided incremental payroll in that year equals or exceeds such gross wages that:

(A)  award period year base payroll; minus

(B)  Vermont gross wages and salaries paid for new qualifying jobs created in or carried forward to the award period year; equals or exceeds

(C)  prior‑year base payroll minus any carry‑forward of qualifying payroll under subdivision (c)(4) of this section, plus award‑year payroll threshold.

Sec. 20. 32 V.S.A. § 5930b(c) is amended to read:

(c)  Claiming an employment growth incentive.

(1)  A business whose application is approved and, in any year during the award period, meets or exceeds its payroll target and either its jobs or capital investment target may file an annual return claiming incentives pursuant to this section.  Upon approval by the department of taxes, incentive payments will be issued by the department of taxes calculated for each of the five award period years in equal annual installments.  The department of taxes will disburse the incentives over consecutive five‑year periods, beginning with each award period year, provided that the incentive‑triggering award period year payroll and job targets are maintained in each utilization period year for which an installment is claimed.

(2)  Incentives shall be calculated and disbursed as follows:  Qualifying payroll for the utilization award period year, not to exceed the payroll target or targets reduced by the payroll threshold for the incentive‑triggering award period year or years shall be multiplied by the incentive percentage.   Up to one‑fifth of the total incentive amount shall be disbursed in the first of five consecutive utilization period years, to the extent the full amount of qualifying payroll was actually paid in that year.  A full one‑fifth of the total incentive amount shall be disbursed in each of the remaining four consecutive utilization period years, provided that incentive‑triggering targets are maintained.

***

(4)  Qualifying jobs, qualifying capital investment, and qualifying payroll in excess of the jobs, capital investment, and payroll targets for an award year shall be carried forward and counted toward future award period year targets, provided such excess jobs, investment and payroll are maintained.

(5)  A business whose application is approved and, in the first award period year, fails to meet or exceed its payroll target and one out of two of its jobs and capital investment targets shall forfeit all authority to earn and claim incentives under this section.  The department of taxes shall notify the Vermont economic progress council that the first year award period targets have not been met, and the council shall rescind the incentive authorization in its entirety. A business whose incentive authorization is rescinded for failure to meet first‑year award period targets may reapply to the Vermont economic progress council for a new authorization pursuant to this section.

* * *

2)                  Sec. 21. 32 V.S.A. § 5930b(f) is added to read:

(f)  The property of a business whose authority to earn, apply or retain incentives under this section has been revoked is ineligible for property tax stabilization under subdivision 5404a(a)(2) of this title or allocation of property tax value under subsection 5404a(e) of this title for any education property tax grand list after the date of revocation.

Sec. 22.  EFFECTIVE DATE

Secs. 11 through 21 (Vermont Employment Growth Incentive technical amendments conforming to Act 184) of this act shall apply to claims filed in 2007 and after.

Fourth:  By adding a Sec. 23 to read:

Sec. 23.  32 V.S.A. § 5930ee is amended to read:

§ 5930ee.  LIMITATIONS

Beginning in fiscal year 2007 2008 and thereafter, the state board may award tax credits to all qualified applicants under this subchapter, provided that:

(1)  The total amount of tax credits awarded annually, together with sales tax reallocated under section 9819 of this title, does not exceed $1,500,000.00  $1,600,000.00.

* * *

Fifth:  By adding Secs. 24 and 25 to read:

Sec. 24.  32 V.S.A. § 6066a(g) is added to read:

(g)  Upon transfer of a residence, the parties' proration of current‑year taxes shall be based upon the adjusted property tax, unless the parties otherwise agree.  No reimbursement by the transferee to the transferor for any property tax adjustment in the property tax year following the transfer shall be required unless the parties otherwise agree.

Sec. 25.  REPEAL

     32 V.S.A. § 6066(f) (proration of taxes shall be based upon the unadjusted property tax) is repealed as of January 1, 2007.

Sixth:  By striking Sec. 7 and inserting a new Sec. 7 to read:

Sec. 7.  32 V.S.A. § 9741(29) is amended to read:

(29)  Aircraft, including depreciable parts, machinery and equipment to be installed as a capital asset in such aircraft, sold to a person which holds itself out to the general public as engaging in air commerce, for use primarily in the carriage of persons or property for compensation or hire; and parts, machinery, and equipment to be installed in an aircraft.

Seventh:  By adding a Sec. 26 to read:

Sec. 26.  32 V.S.A. § 10002(o) is added to read:

      (o)  Also excluded from the definition of land is the land sold to an organization that qualifies under Section 501(c)(3) of the Internal Revenue Code and also meets the “public support” test of Section 509(a)(2) of the Code, if one of the stated purposes of the organization is to provide affordable housing and if the land is sold by the organization within 12 months of the transfer to the organization to a buyer in a transfer which meets all the requirements of subsection (b) of this section. 

(1)  If the organization fails to transfer the land within 12 months, or transfers it within 12 months but not to a buyer for occupancy as the buyer's principal residence,  then the organization shall become liable for the land gains tax due on the original transfer of the land to the organization and for the land gains tax on the transfer by the organization; and

(2)  If the organization transfers the land within 12 months, but at the time of the transfer by the organization there is no dwelling on the land completed and fit for occupancy, and the buyer fails to complete and occupy a principal residence on the land within two years of purchase from the organization, then the organization shall become liable for the land gains tax due on the original transfer of the land to the organization, and the buyer who purchased the land from the organization shall become liable for the land gains tax due on the transfer from the organization to the buyer.

Eighth:  By adding Secs. 27 and 28 to read:

Sec. 27.  24 V.S.A. § 138(a) and (d) are amended to read:

(a)  Local option taxes are authorized under this section for the purpose of affording municipalities an alternative method of raising municipal revenues to facilitate the transition and reduce the dislocations in those municipalities that may be caused by reforms to the method of financing public education under the Equal Educational Opportunity Act of 1997.  Accordingly:

(1)  the local option taxes authorized under this section may be imposed by a municipality; and

(2)  if a municipality opting opts to impose a local option tax may do so prior to July 1, 1998 to be effective beginning January 1, 1999, and anytime after December 1, 1998 a, the local option tax shall be effective beginning on the next tax quarter following 90 days' notice to the department of taxes of the imposition; and

(3)  a local option tax may only be adopted by a municipality in which:

(A)  the education property tax rate in 1997 was less than $1.10 per $100.00 of equalized education property value; or

(B)  the equalized grand list value of personal property, business machinery, inventory, and equipment is at least ten percent of the equalized education grand list as reported in the 1998 Annual Report of the Division of Property Valuation and Review; or

(C)  the combined education tax rate of the municipality will increase by 20 percent or more in fiscal year 1999 or in fiscal year 2000 over the rate of the combined education property tax in the previous fiscal year.

(d)  Of the taxes Taxes collected under this section, shall be paid as follows:

(1)  70 percent of the taxes shall be paid on a quarterly basis to the municipality in which they were collected, after reduction for the costs of administration and collection under subsection (c) of this section.  Revenues received by a municipality may be expended for municipal services only, and not for education expenditures.  Any remaining revenue shall be deposited into the PILOT special fund established by 32 V.S.A. § 3709.

(2)  The first $2.5 million of any remaining revenue shall be deposited into the PILOT special fund established by 32 V.S.A. § 3709.

(3)  Any then‑remaining revenue shall be deposited 50 percent into the PILOT special fund established by 32 V.S.A. § 3709; and 50 percent shall go to the agency of transportation for state aid to town highways, which amount shall be in addition to the appropriations required by 19 V.S.A. § 306, and which shall be distributed to towns in accordance with 19 V.S.A. § 306(a).

Sec. 28.  EFFECTIVE DATE

Sec. 27 of this act (local option tax authority expanded to all towns) shall take effect upon passage, except the amendments to 24 V.S.A. § 138(d) shall apply to local option revenue payments beginning with the first quarterly payment in calendar year 2008.

Ninth:   By adding Secs. 29 through 38 to read:

Sec. 29.  24 V.S.A. § 1891 is amended to read:

§ 1891.  DEFINITIONS

When used in this subchapter:

* * *

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

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

Sec. 30.  24 V.S.A. § 1893 is amended to read:

§ 1893.  PURPOSE

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

Sec. 31.  24 V.S.A. § 1894 is amended to read:

§ 1894.  POWER AND LIFE OF DISTRICT

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

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

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

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

Sec. 32.  24 V.S.A. § 1896 is amended to read:

§ 1896.  TAX INCREMENTS

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

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

Sec. 33.  24 V.S.A. § 1897 is amended to read:

§ 1897.  TAX INCREMENT FINANCING

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

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

Sec. 34.  24 V.S.A. § 1898(e) is amended to read:

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

Sec.35.  24 V.S.A. § 1900 is amended to read:

§ 1900.  DISTRIBUTION

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

Sec. 36.  32 V.S.A. § 5404a(f), (g), and (h) are amended and (j) and (k) are added to read:

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

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

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

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

* * *

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

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

* * *

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

* * *

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

* * *

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

* * *

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

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

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

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

Sec. 37.  Sec. 2i of No. 184 of the Acts of the 2005 Adj. Sess. (2006) is amended to read:

Sec. 2i.  TAX INCREMENT FINANCING DISTRICTS; CAP

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

Sec. 38.  EFFECTIVE DATES

Secs. 29 through 37 of this act (tax increment financing amendments) shall take effect on July 1, 2007, except 24 V.S.A. § 1896(b) which shall be retroactively effective to July 1, 2006.

Tenth:  In Sec. 9, after the words “This act shall take effect upon passage except”, by inserting  “as provided in Secs. 22, 28, and 38 and subdivisions  (1) and (2) of this section”

(Committee Vote: 7-0-0)

(No House amendments.)

Favorable with Proposal of Amendment

H. 537

An act relating to making appropriations for the support of state government.

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

(For text of amendment, see Addendum for Monday, April 30, 2007)

(Committee Vote: 7-0-0)

(For House amendments, see House Journal for April 5, 2007, page 561; April 6, 2007, page 572.)

House Proposal of Amendment

S. 39

An act relating to health insurance plan reimbursement for covered services by naturopathic physicians.

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.  8 V.S.A. § 4088d is added to read:

§ 4088d.  COVERAGE FOR COVERED SERVICES PROVIDED BY NATUROPATHIC PHYSICIANS

(a)  A health insurance plan shall provide coverage for medically necessary health care services covered by the plan when provided by a naturopathic physician licensed in this state for treatment within the scope of practice described in chapter 81 of Title 26.  Health care services provided by naturopathic physicians may be subject to reasonable deductibles, co-payment and co-insurance amounts, fee or benefit limits, practice parameters,

cost-effectiveness and clinical efficacy standards, and utilization review consistent with any applicable regulations published by the department of banking, insurance, securities, and health care administration. Any amounts, limits, standards, and review shall not function to direct treatment in a manner unfairly discriminative against naturopathic care, and collectively shall be no more restrictive than those applicable under the same policy to care or services provided by other health care providers, but may allow for the management of the benefit consistent with variations in practice patterns and treatment modalities among different types of health care providers.  A health insurance plan may require that the naturopathic physician’s services be provided by a licensed naturopathic physician under contract with the insurer or shall be covered in a manner consistent with out-of-network provider reimbursement practices for primary care providers.  Nothing contained herein shall be construed as impeding or preventing either the provision or the coverage of health care services by licensed naturopathic physicians, within the lawful scope of naturopathic practice, in hospital facilities on a staff or employee basis.

(b)  As used in this section, “health insurance plan” means any individual or group health insurance policy, any hospital or medical service corporation or health maintenance organization subscriber contract, or any other health benefit plan offered, issued, or renewed for any person in this state by a health insurer, as defined by 18 V.S.A. § 9402.  The term shall not include benefit plans providing coverage for specific disease or other limited benefit coverage.

Sec. 2.  EFFECTIVE DATE

This act shall be effective on October 1, 2007.

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.


J.R.S. 24

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

PENDING ACTION:  Second reading of the resolution.

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)

James Ehlers of Colchester - Member of the Vermont Citizens Advisory Committee on Lake Champlain’s Future - By Sen. McCormack for the Committee on Natural Resources and Energy.  (5/1)



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us