Download this document in MS Word format


AutoFill Template

Journal of the Senate

________________

Tuesday, April 29, 2008

The Senate was called to order by the President.

Devotional Exercises

Devotional exercises were conducted by the Reverend Robin Junker of Randolph.

Consideration Resumed; Bill Amended; Third Reading Ordered

H. 885.

Consideration was resumed on Senate bill entitled:

An act relating to developing consistent measurement standards for economic growth.

Thereupon, pending the question, Shall the bill be read the third time?, Senator Illuzzi moved to amend the Senate proposal of amendment in Sec. 12, in subsection (c), after the words “Vermont Green Building Network”, by striking out the following:  “the Lake Champlain Chamber of Commerce; the Vermont Chamber of Commerce; the Greater Burlington Industrial Corporation” and inserting in lieu thereof the following:  the Lake Champlain Regional Chamber of Commerce; the Vermont Chamber of Commerce; the Greater Burlington Industrial Corporation (GBIC)

Which was agreed to.

Thereupon, pending the question, Shall the bill be read the third time?, Senator Illuzzi moved to amend the Senate proposal of amendment by adding a new section to be numbered 13a to read as follows:

Sec. 13a.  TASK FORCE; HYBRID ELECTRIC AND ALTERNATIVE POWERED VEHICLES

     (a)  There is hereby created a task force to develop, encourage and create opportunities to build or assemble components in Vermont for plug-in hybrid electric vehicles, or vehicles using other fuel sources, such as hydrogen and compressed natural gas, and to use those vehicles in Vermont and surrounding areas.

     (b)  The task force shall be compromised of the lieutenant governor, who shall chair the task force, the commissioner of public service, and the secretaries of commerce and transportation.

     (c)  The task force shall:

          (1)  identify incentives available;

          (2)  identify obstacles present; and

          (3)  recommend statutory and regulatory changes to the General Assembly and executive branch agencies to remove obstacles, facilitate the use of incentives, and to otherwise encourage these activities in Vermont.

     (d)  To implement the goals of this task force, the referenced department and the agencies, with the advice and guidance of the task force, and notwithstanding any provision of law to the contrary, are each authorized to:

          (1)  accept in-kind contributions and grants from manufacturers and suppliers capable of assembling, manufacturing and deploying these components or vehicles, with the approval of the Joint Fiscal Committee;

          (2)  apply for and utilize federal funds from any source as authorized by the funding source, with the approval of the Joint Fiscal Committee;

          (3)  develop and enter into necessary alliances and protocols;

          (4)  spend a portion of their respective budgets to accomplish these objectives with the approval of the Joint Fiscal Committee;

          (5)  enter into agreements; and

          (6)  develop and implement one or more pilot projects;

     (e)  The task force may engage:

          (1)  institutions of higher education to include the Center For Transportation and the Center For Emerging Technology, both at UVM; and

          (2)  technical education centers and STEM education in Vermont secondary schools.

Which was agreed to.

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

House Proposal of Amendment to Senate Proposal of Amendment Concurred In

H. 94.

House proposal of amendment to Senate proposal of amendment to House bill entitled:

An act relating to retail sales and taxing of specialty beers.

Was taken up.

     The House proposes to the Senate to amend the Senate proposal of amendment by striking out Sec. 3 and inserting in lieu thereof the following:

Sec. 3.  STUDY OF FLAVORED MALT BEVERAGES; DEPARTMENT OF LIQUOR CONTROL

(a)  The department of liquor control shall study and identify best practices for the marketing, sale, and taxation of malt-based beverages containing other ingredients such as flavored distilled spirits, and “alcohol energy drinks,” which are malt beverages containing other ingredients such as caffeine. 

(b)  The department shall complete the study and issue a written report of its findings, conclusions, and recommendations on or before January 15, 2009.  The report shall be provided to the house committees on general, housing and military affairs, and on ways and means and the senate committees on economic development, housing and general affairs and on finance.

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

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

S. 350.

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

An act relating to energy independence and economic prosperity.

Was taken up for immediate consideration.

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

* * * State Agencies * * *

Sec. 1.  3 V.S.A. § 838(c) is amended to read:

(c) The economic impact statement shall analyze the anticipated costs and benefits to be expected from adoption of the rule. Specifically, each economic impact statement shall, for each requirement in the rule:

(1) list categories of people, enterprises and government entities potentially affected and estimate for each the costs and benefits anticipated;

(2) compare the economic impact of the rule with the economic impact of other alternatives to the rule, including no rule on the subject or a rule having separate requirements for small business;

(3) include a flexibility statement. The flexibility statement shall compare the burden imposed on small businesses by compliance with the rule to the burden which would be imposed by alternatives considered under section 832a of this title.

(4)  include a greenhouse gas impact statement.  The greenhouse gas impact statement shall explain how the rule has been crafted to reduce the extent to which greenhouse gases are emitted.  The secretary of administration, in conjunction with the secretaries of agriculture, food and markets, natural resources, and transportation, and the commissioner of public service shall provide a  checklist which shall be used in the adoption of rules to assure the full consideration of greenhouse gas impacts, direct and indirect.

* * *

Sec. 1a.  3 V.S.A. § 2291(c) is amended to read:

(c)  The secretary of administration with the cooperation of the commissioners of public service and of buildings and general services shall develop and oversee the implementation of a state agency energy plan for state government.  The plan shall be adopted by June 30, 2005, modified as necessary, and readopted by the secretary on or before January 15 of each fifth year subsequent to 2005.  The plan shall accomplish the following objectives and requirements:

(1)  To conserve resources, save energy, and reduce pollution.  The plan shall devise strategies to identify to the greatest extent feasible, all opportunities for conservation of resources through environmentally and economically sound infrastructure development, purchasing, and fleet management, and investments in renewable energy and energy efficiency available to the state which are cost effective on a life cycle cost basis.

(2)  To consider state policies and operations that affect energy use.

(3)  To devise a strategy to implement or acquire all prudent opportunities and investments in as prompt and efficient a manner as possible.

(4)  To include appropriate provisions for monitoring resource and energy use and evaluating the impact of measures undertaken.

(5)  To identify education, management, and other relevant policy changes that are a part of the implementation strategy.

(6)  To devise a strategy to reduce greenhouse gas emissions.  The plan shall include steps to encourage more efficient trip planning, to reduce the average fuel consumption of the state fleet, and to encourage alternatives to solo-commuting state employees for commuting and job-related travel.

(7)  To provide, where feasible, for the installation of renewable energy systems including solar energy systems, which shall include equipment or building design features, or both, designed to attain the optimal mix of minimizing solar gain in the summer and maximizing solar gain during the winter, as part of the new construction or major renovation of any state building.  The cost of implementation and installation will be identified as part of the budget process presented to the general assembly.

* * * Agency of Agriculture, Food and Markets * * *

Sec. 2.  6 V.S.A. § 1(c),(d), and (e) are added to read:

(c)  The secretary shall provide data and funding recommendations to the Vermont climate change oversight committee with regard to:

(1)  Funding and implementing state conservation programs in order to increase carbon sequestration.

(2)  Providing cost-share assistance for farmers to purchase manure injection equipment to retrofit existing manure spreaders or purchase new equipment.

(3)  Providing cost-share assistance for farms to develop and implement nutrient management plans for smaller dairy farms and continuing to provide annual assistance so that existing plans on medium-sized farms continue to be implemented.

(4)  Providing cost-share assistance under the farm agronomic practices program so that farms implement cover crops and other soil erosion and land cover practices.

(5)  Other ways to create incentives for carbon sequestration on farm and forest land, Vermont’s “green bank.”

(d)  The secretary shall continue the agency’s methane capture program and shall collaborate with the Vermont climate change oversight committee  with regard to the availability of additional funds for these purposes.  The goal of the methane digester portion of the program shall be to digest and use 15 percent of the state’s dairy cattle manure by 2012, and 50 percent by 2028.  The goal of a second aspect of this emissions reduction program shall be to increase the percentage of poultry and nondairy livestock manure composted to 25 percent by 2012, and 50 percent by 2028. 

* * * Air Quality * * *

Sec. 3.  10 V.S.A. § 552 is amended to read:

§ 552.  DEFINITIONS

As used in this chapter:

* * *

(11)  “Greenhouse gas” means any chemical or physical substance that is emitted into the air and that the secretary may reasonably anticipate to cause or contribute to climate change, including, but not limited to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

Sec. 3a.  10 V.S.A. § 578 is amended to read:

§ 578.  GREENHOUSE GAS REDUCTION GOALS

(a)  General goal of greenhouse gas reduction. It is the goal of the state to reduce emissions of greenhouse gases from within the geographical boundaries of the state and those emissions outside the boundaries of the state that are caused by the use of energy in Vermont in order to make an appropriate contribution to achieving the regional goals of reducing emissions of greenhouse gases from the 1990 baseline by:

(1)  25 percent by January 1, 2012;

(2)  50 percent by January 1, 2028;

(3) if practicable using reasonable efforts, 75 percent by January 1, 2050.

(b)  Climate change action plan Vermont climate collaborative.  The secretary will coordinate with the governor's commission on climate change established by executive order and will consult with any interested members of Vermont's participate in the Vermont climate collaborative, a collaboration between state government and Vermont’s higher education, business, agricultural, labor, and environmental communities, in developing a climate change action plan state programs to reduce greenhouse gas emissions in ways that are permanent, quantifiable, and verifiable.  The secretary shall notify each member of the general assembly of the development of this plan and of the general public that the collaborative is developing greenhouse gas reduction programs and shall provide meaningful opportunity for public comment on program developmentThis plan Programs shall be developed in a manner that implements state energy policy, as specified in 30 V.S.A. § 202a.  Not later than September 1, 2007 January 15, 2009 and January 15, 2010, the secretary shall present this plan report on program development to the committees of the general assembly having jurisdiction over matters relating to the environment, agriculture, energy, transportation, commerce, and public health.

(c)  Implementation of climate change action plan state programs to reduce greenhouse gas emissions.  In order to facilitate the state's compliance with the goals established in this section, all state agencies shall consider, whenever practicable, any increase or decrease in greenhouse gas emissions in their decision-making procedures with respect to the purchase and use of equipment and goods; the siting, construction, and maintenance of buildings; the assignment of personnel; and the planning, design and operation of programs, services and infrastructure.

(d)  Advocacy for cap and trade program for greenhouse gases.  In order to increase the likelihood of the state meeting the goals established under this section, the public service board, the secretary of natural resources, and the commissioner of public service shall advocate before appropriate regional or national entities and working groups in favor of the establishment of a regional or national cap and trade program for greenhouse gas emissions.  This may take the form of an expansion of the existing regional greenhouse gas initiative (RGGI), or it may entail the creation of an entirely new and separate regional or national cap and trade initiative that includes a 100 percent consumer allocation system.

Sec. 4.  10 V.S.A. § 580 is added to read:

§ 580.  GREENHOUSE GAS INVENTORIES; REGISTRY

(a)  Inventory and forecasting.  The secretary shall work, in conjunction with other states or a regional consortium, to establish a periodic and consistent inventory of greenhouse gas emissions.  The secretary shall publish a Vermont greenhouse gas emission inventory and forecast by no later than June 1, 2010, and updates shall be published annually until 2028, until a regional or national inventory and registry program is established in which Vermont participates, or until the federal National Emissions Inventory includes mandatory greenhouse gas reporting. 

(b)  Inventory updates.  To develop the inventory under this section, the secretary, in coordination with the secretaries of administration, transportation, agriculture, food and markets, and commerce and community development, and the commissioner of the department of public service, shall aggregate all existing statewide data on greenhouse gas emissions currently reported to state or federal entities, existing statewide data on greenhouse gas sinks, and otherwise publicly available data.  Greenhouse gas emissions data that is more than 36 months old shall be updated either by statistical methods or seeking updated information from the reporting agency or department.  The information shall be standardized to reflect the emissions in tons per CO2 equivalent, shall be set out in the inventory by sources or sectors such as agriculture, manufacturing, automobile emissions, heating, and electricity production, shall be compatible with the inventory included with the governor’s commission on climate change final report and shall include, but not be limited to, the following sources:

(1)  information collected for reporting in the national emissions inventory, which includes air toxics, criteria pollutants, mobile sources, point sources, and area sources;

(2)  in-state electricity production using RGGI and state permit information;

(3)  vehicle miles travelled and vehicle registration data; and

(4) agricultural activities, including livestock and crop practices.

(c)  Forecast.  The secretary shall use best efforts to forecast statewide emissions for a five- and ten-year period based on the inventory data and other publicly available information.

(d)  Registry.  The secretary shall work, in conjunction with other states or a regional consortium, to establish a regional or national greenhouse gas registry.

(1)  Any registry in which Vermont participates shall be designed to apply to the entire state and to as large a geographic area beyond state boundaries as is possible.

(2)  It shall accommodate as broad an array of sectors, sources, facilities and approaches as is possible, and shall allow sources to start as far back in time as is permitted by good data, affirmed by third-party verification.

(e)  Rules.  The secretary may adopt rules to implement the provisions of this section and shall review existing and proposed international, federal, and state greenhouse gas emission reporting programs and make reasonable efforts to promote consistency among the programs established pursuant to this section and other programs, and to streamline reporting requirements on greenhouse gas emission sources.  Nothing in this section shall limit a state agency from adopting any rule within its authority.

* * * Pollution Abatement Facilities * * *

Sec. 5.  10 V.S.A. § 1278(a) is amended to read:

(a)  Findings.  The general assembly finds that the state shall protect Vermont’s lakes, rivers, and streams from pollution by implementing programs to prevent sewage spills to Vermont waters and by requiring emergency planning to limit the damage from spills which do occur.  In addition, the general assembly finds it to be cost-effective and generally beneficial to the environment to continue state efforts to ensure energy efficiency in the operation of treatment facilities.

* * * Solid Waste Planning * * *

Sec. 6.  10 V.S.A. § 6604(a) is amended to read:

(a)  No later than April 30, 1988 the secretary shall publish and adopt, after notice and public hearing pursuant to chapter 25 of Title 3, a solid waste management plan which sets forth a comprehensive state-wide strategy for the management of waste, including whey.  No later than July 1, 1991, the secretary shall publish and adopt, after notice and public hearing pursuant to chapter 25 of Title 3, a hazardous waste management plan, which sets forth a comprehensive statewide strategy for the management of hazardous waste.

(1)(A)  The plans shall be based upon the following priorities, in descending order:

(A)(i)  the greatest feasible reduction in the amount of waste generated;

(B)(ii)  reuse and recycling of waste to reduce to the greatest extent feasible the volume remaining for processing and disposal;

(C)(iii)  waste processing to reduce the volume or toxicity of the waste stream necessary for disposal;

(D)(iv)  land disposal of the residuals.

(B)  Processing and disposal alternatives shall be preferred which do not foreclose the future ability of the state to reduce, reuse and recycle waste. In determining feasibility, the secretary shall evaluate alternatives in terms of their expected life-cycle costs.

(2)  The plans shall be revised at least once every five years and shall include:

(A)  methods to reduce and remove material from the waste stream, including commercially generated and other organic wastes, used clothing, and construction and demolition debris, and to separate, collect, and recycle, treat or dispose of specific waste materials that create environmental, health, safety, or management problems, including, but not limited to, tires, batteries, obsolete electronic equipment, and unregulated hazardous wastes.  These portions of the plans shall include strategies to assure recycling in the state, and to prevent the incineration or other disposal of marketable recyclables.  They shall consider both the current solid waste stream and its projected changes, and shall be based on:

(i)  an analysis of the volume and nature of wastes generated in the state, the sources of those wastes, and the current fate or disposition of those wastes;

(ii)  an assessment of the feasibility and cost of recycling each type of waste, including an assessment of the feasibility of providing the option of single source recycling;

(iii)  a survey of existing and potential markets for each type of waste that can be recycled;

(B)  a proposal for the development of facilities and programs necessary at the state, regional or local level to achieve the priorities identified in subdivision (a)(1) of this section.  Consideration shall be given to the need for additional regional or local composting facilities, the need to expand the collection of commercially generated organic wastes, and the cost effectiveness of developing single stream waste management infrastructure adequate to serve the entire population, which may include material recovery centers.  These portions of the plan shall be based, in part, on an assessment of the status, capacity, and life expectancy of existing treatment and disposal facilities, and they shall include siting criteria for waste management facilities, and shall establish requirements for full public involvement.

* * * Transportation * * *

Sec. 7.  19 V.S.A. § 10b is amended to read:

§ 10b.  STATEMENT OF POLICY; GENERAL

(a)  The agency shall be the responsible agency of the state for the development of transportation policy.  It shall develop a mission statement to reflect state transportation policy encompassing, coordinating, and integrating all modes of transportation, the need for transportation projects that will improve the state’s economic infrastructure, as well as the use of resources in efficient, coordinated, integrated, cost effective, and environmentally sound ways.  The agency shall coordinate planning and education efforts with those of the Vermont climate change oversight committee and those of local and regional planning entities:

(1)  to assure that the transportation system as a whole is integrated, that access to the transportation system as a whole is integrated, and that statewide local, and regional conservation and efficiency opportunities and practices are integrated; and

(2)  to support employer or local or regional government-led conservation, efficiency, rideshare, and bicycle programs and other innovative transportation advances, especially employer-based incentives.

(b)  In developing the state’s annual transportation program, the agency shall, consistent with the planning goals listed in 24 V.S.A. § 4302 as amended by No. 200 of the Acts of the 1987 Adj. Sess. (1988) and with appropriate consideration to local, regional, and state agency plans:

(1)  Develop or incorporate designs that provide integrated, safe, and efficient transportation and promote economic opportunities for Vermonters and the best use of the state’s environmental and historic resources. 

(2)  Manage available funding to:

(A)  give priority to preserving the functionality of the existing transportation infrastructure, including bicycle and pedestrian trails regardless of whether they are located along a highway shoulder; and

(B)  adhere to credible project delivery schedules.

* * *

Sec. 8.  19 V.S.A. § 10e is amended to read:

§ 10e.  STATEMENT OF POLICY; RAILROADS

(a)  The general assembly recognizes that rail service, both passenger and freight, is an integral part of the state’s transportation network and that it must be fully integrated into the state’s transportation network as a whole.  Accordingly, it is hereby declared to be the policy of the state of Vermont:

(1)  to To provide opportunities for rail passenger services by cooperating with the federal government, other states, and providers of those services, with priority to be given to the services likely to complement the state’s other transportation resources and Vermont’s economic development efforts and to meet the needs of the traveling public;.  Goals to increase passenger rail use will be in accordance with the agency’s rail plan.

(2)  to To preserve and modernize for continued freight railroad service those railroad lines, both within the state of Vermont and extending into adjoining states, which directly affect the economy of the state or provide connections to other railroad lines which directly affect the economy of the state;.  Goals to increase freight rail use will be in accordance with the agency’s rail plan.

(3)  in In those cases where continuation of freight railroad service is not economically feasible under present conditions, to preserve established railroad rights-of-way for future reactivation of railroad service, trail corridors, and other public purposes not inconsistent with future reactivation of railroad service; and.

(4)  to To seek federal aid for rail projects that implement this section’s policy goals.

(5)  To maintain and improve intercity bus and rail and freight and commuter rail services, and the necessary intermodal connections, and to increase the efficiency of equipment and the extent to which equipment selection and operation can limit or avoid the emission of greenhouse gases.

(6)  To plan for increased ridership with city‑to‑city and commuter rail service, and for increased coordination of rail service with bus service,

car-pooling, and ride-sharing opportunities.

* * *

Sec. 9.  19 V.S.A. § 10f is amended to read:

§ 10f.  STATEMENT OF POLICY; PUBLIC TRANSPORTATION

(a)  It shall be the state’s policy to make maximum use of available federal funds for the support of public transportation.  State operating support funds shall be included in agency operating budgets to the extent that funds are available. It shall be the state’s policy to support the maintenance of existing public transportation services, to assure the rapid replacement of any unplanned decrease in service, and to support the creation of new service that is accessible and affordable to those who use these services.

(b)  The agency of transportation shall develop and periodically update a plan for investment in public transportation services and infrastructure as part of an integrated transportation system consistent with the goals established in 24 V.S.A. § 5083, and regional transportation development plan proposals and regional plans as required by 24 V.S.A. § 5089.

(1)  The plan shall include components that shall coordinate rideshare, public transit, park and ride, interstate, and bicycle and pedestrian planning and investment at the state, regional, and local levels, and create or expand regional connections within the state, in order to maximize interregional ridesharing and access to public transit.

(2)  The agency shall develop and make available to the traveling public an integrated, statewide online service that coordinates transportation options and provides web-based access to information that will allow the traveling public integrated, convenient, affordable, and dependable access to alternative transportation modes sufficient to allow efficient, cost-effective, and timely travel throughout the state.


Sec. 10.  19 V.S.A. § 2310 is amended to read:

§ 2310.  PAVEMENT OF HIGHWAY SHOULDERS

(a)  Notwithstanding the provisions of section 10c of this title, it is the policy of the state to provide paved shoulders on major state highways with the intent to develop an integrated bicycle route system and make the shoulders safer for pedestrian traffic.  This shall not apply to the interstate highway and certain other limited access highways.

(b)  Any construction, or reconstruction, including upgrading and resurfacing projects on these highways, shall include paved shoulders unless the agency deems certain sections to be cost prohibitive maintain or improve existing access and road surface conditions for bicycles and pedestrians along the shoulders of these highways, unless the area is adequately served by bicycle and pedestrian paths that are not located along the shoulders of these highways, or unless the agency deems it to be cost-prohibitive.

* * * Zoning Regulations * * *

Sec. 11.  24 V.S.A. § 4414 is amended to read:

§ 4414.  ZONING; PERMISSIBLE TYPES OF REGULATIONS

Any of the following types of regulations may be adopted by a municipality in its bylaws in conformance with the plan and for the purposes established in section 4302 of this title.

* * *

(14)  Green development incentives.  A municipality may encourage the use of low‑embodied energy in construction materials, planned neighborhood developments that allow for reduced use of fuel for transportation, and increased use of renewable technology by providing for regulatory incentives, including increased densities and expedited review.

* * * Combined Heat and Power * * *

Sec. 12.  30 V.S.A. § 202(i) is added to read:

(i)  It shall be a goal of the electrical energy plan to assure, by 2028, that at least 60 MW of power are generated within the state by combined heat and power (CHP) facilities powered by renewable fuels or by nonqualifying SPEED resources, as defined in section 8002 of this title.  In order to meet this goal, the plan shall include incentives for development and strategies to identify locations in the state that would be suitable for CHP.  The plan shall include strategies to assure the consideration of CHP potential during any process related to the expansion of natural gas services in the state.


* * * Least-Cost Planning * * *

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

(a)(1)  A “least cost integrated plan” for a regulated electric or gas utility is a plan for meeting the public’s need for energy services, after safety concerns are addressed, at the lowest present value life cycle cost, including environmental and economic costs, through a strategy combining investments and expenditures on energy supply, transmission and distribution capacity, transmission and distribution efficiency, and comprehensive energy efficiency programs.  Economic costs shall be determined with due regard to:

(A)  the greenhouse gas inventory developed under the provisions of 10 V.S.A. § 580;

(B)  the state’s progress in meeting its greenhouse gas reduction goals; and

(C)  the value of the financial risks associated with greenhouse gas emissions from various power sources.

* * *

Sec. 13a. INVESTIGATION OF DISTRIBUTED GENERATION

The commissioner of public service shall hold workshops concerning distributed generation and what barriers exist to the development throughout the state of distributed generation.  The commissioner shall present recommendations on these matters by no later than January 15, 2009, to the legislative committees on natural resources and energy, commerce, and finance.

Sec. 14.  VERMONT CLIMATE CHANGE OVERSIGHT COMMITTEE

(a)  The Vermont climate change oversight committee is established, to consist of nine members who shall not be members of the general assembly at the time of appointment.  Members shall include the state treasurer or a designee together with one member appointed by the speaker of the house, one member appointed by the committee on committees, and two members appointed by the governor, one of whom shall be a board member of the Vermont climate collaborative.  In addition, there shall be a chair and a vice chair appointed by joint action of the speaker of the house, the committee on committees, and the governor, and two additional public members appointed in this manner.  Members shall be appointed who have skills and knowledge that will support the needs of the committee, which may include persons with knowledge of business, “green” business and technology, economics, public health, public utilities, agriculture, ecological science, carbon trading, municipal planning,  transportation and land use planning and development, forestry and ecology, waste management, and education. 

(b)  The powers of the committee are vested in its members, and a quorum shall consist of five members.  No action of the committee shall be considered valid unless the action is supported by a majority vote of its members.  The committee shall be entitled to staff assistance from the natural resources board and from the agency of natural resources, which shall coordinate any requested assistance from state agencies and departments.  The committee shall invite public input, form task forces, work with stakeholder groups and state entities, work with local, state-based, and national interest groups, and take other appropriate steps to gather information and develop its recommendations.

(c)  The primary mission of the committee shall be to consider the recommendations of the governor’s commission on climate change and its plenary group and the recommendations of the Vermont council on rural development:

(1)  to identify barriers to be overcome in reducing the greenhouse gas emissions of the state;

(2)  to identify areas that merit priority consideration in this regard because of their ease of implementation and their potential to reduce greenhouse gas emissions;

(3)  to develop recommendations for ways to overcome those barriers;

(4)  to identify resource needs and funding options; and

(5)  to facilitate state and private entities in addressing these issues.

(d)  In this process, the committee shall work with the Vermont climate collaborative and other interested persons and groups.

(e)  The committee shall present a report to the general assembly by no later than January 30, 2009. 

* * *  Weatherization Program * * *

Sec. 15.  33 V.S.A. § 2502(b) is amended to read:

(b)  In addition, the director shall supplement, or supplant, any federal program with a state home weatherization assistance program providing:

* * *

(3)  funding for the installation of solar domestic hot water systems and other renewable energy systems on eligible homes, where cost effective and consistent with other program needs.


* * * Methane Digesters * * *

Sec. 16.  REGIONAL DAIRY METHANE DIGESTERS

The secretary of natural resources shall review and make appropriate regulatory revisions or recommend appropriate statutory amendments to its regulatory programs that may be preventing the use of wastes, such as food processing wastes, whey, and brewers’ waste, in farm-based methane digester systems.

Sec. 17.  STATUS REPORT ON VEHICLE EMISSIONS LABELING

By no later than January 30, 2009, the secretary of natural resources shall provide to the house and senate committees on transportation a status report with regard to the implementation of the vehicle emissions labeling program for new motor vehicles, established under 10 V.S.A. § 579.

Sec. 18.  REPORT ON INCENTIVES FOR EFFICIENT

TRANSPORTATION

By December 15, 2008, the agency of transportation, in collaboration with the University of Vermont transportation research center and the agency of natural resources, 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) An analysis of the role of motor vehicles in creating and contributing to air contaminants in Vermont, and a determination of what portion of overall statewide energy consumption is due to the use of motor vehicles.

(2) Recommendations regarding policy options that would encourage and reward efficient transportation, reduce the amount of greenhouse gases generated by the transportation sector, and support alternative modes of transportation.

(3) Recommendations for public education regarding clean and efficient transportation.

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

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


Rules Suspended; Reports of Committees of Conference Accepted and Adopted on the Part of the Senate

H. 748.

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

An act relating to permitting students to possess and self-administer emergency medication.

Was taken up for immediate consideration.

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

To the Senate and House of Representatives:

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

H. 748.  An act relating to permitting students to possess and self-administer emergency medication.

Respectfully reports that it has met and considered the same and recommends that the House accede to the Senate’s proposal of amendment, that the Senate accede to the House’s further proposals of amendment, and that the bill be further amended as follows:

First:  In the House’s third proposal of amendment, in Sec. 1, § 1387(c), by striking out the words “doing so” and inserting the words distribution or notification

Second:  In the House’s third proposal of amendment, in Sec. 1, § 1387(c), after the final sentence, by adding a new sentence to read:  The written plan shall become part of the student’s health records maintained by the school.

                                                                        ALICE W. NITKA

                                                                        HAROLD W. GIARD

                                                                        WILLIAM T. DOYLE

                                                                 Committee on the part of the Senate

                                                                        GREGORY S. CLARK

                                                                        GARY GILBERT

                                                                        DENIS B. BARNARD

                                                                 Committee on the part of the House

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

H. 806.

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

An act relating to public water system.

Was taken up for immediate consideration.

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

To the Senate and House of Representatives:

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

H. 806.  An act relating to public water system.

Respectfully reports that it has met and considered the same and recommends that the House accede to the Senate proposal of amendment

                                                                        ROBERT M. HARTWELL

                                                                        RICHARD J. McCORMACK

                                                                        DIANE B. SNELLING

                                                                 Committee on the part of the Senate

                                                                        DEXTER RANDALL

                                                                        ROBERT LEWIS

                                                                        JIM McCULLOUGH

                                                                 Committee on the part of the House

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

Rules Suspended; Bills Messaged

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

H. 94, H. 748, H. 806, H. 885.

Recess

On motion of Senator Shumlin the Senate recessed until 3:00 P.M.


Called to Order

At 3:20 P.M. the Senate was called to order by the President.

Message from the House No. 64

     A message was received from the House of Representatives by Ms. Wrask, its Second Assistant Clerk, as follows:

Mr. President:

I am directed to inform the Senate the House has considered a bill originating in the Senate of the following title:

S. 220.  An act relating to the confidentiality of library patron records.

And has passed the same in concurrence.

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

S. 340.  An act relating to mammography patient cost containment.

And has passed the same in concurrence with proposals of amendment in the adoption of which the concurrence of the Senate is requested.

     The House has considered Senate proposals of amendment to House bills of the following titles:

     H. 599.  An act relating to boating while intoxicated and driving while intoxicated.

     H. 783.  An act relating to home improvement fraud.

And has concurred therein with further proposals of amendment in the adoption of which the concurrence of the Senate is requested.

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

H. 560.  An act relating to elimination of the offender work programs board.

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

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

                                         Rep. Fallar of Tinmouth

                                         Rep. Myers of Essex

                                         Rep. Browning of Arlington

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

H. 859.  An act relating to increasing substance abuse treatment, vocational training, and transitional housing for offenders in order to reduce recidivism, increase public safety, and reduce corrections costs.

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

                                         Rep. Lorber of Burlington

                                         Rep. Emmons of Springfield

                                         Rep. Rodgers of Glover

Pursuant to the requests of the Senate for Committees of Conference upon the disagreeing votes of the two Houses on Senate bills of the following titles, the Speaker has appointed as members of such committees on the part of the House:

S. 114.  An act relating to enhancing mental health parity.

                                         Rep. Fisher of Lincoln

                                         Rep. French of Randolph

                                         Rep. Morrissey of Bennington

S. 168.  An act relating to operating a motor vehicle under the influence of alcohol or drugs.

                                         Rep. Lippert of Hinesburg

                                         Rep. Grad of Moretown

                                         Rep. Flory of Pittsford

S. 250.  An act relating to decreasing the amounts of cocaine and heroin required to be possessed to trigger drug trafficking penalties.

                                         Rep. Lippert of Hinesburg

                                         Rep. Grad of Moretown

                                         Rep. Flory of Pittsford

S. 281.  An act relating to end-of-life care and pain management.

                                         Rep. Frank of Underhill

                                         Rep. McAllister of Highgate

                                         Rep. Keenan of St. Albans City

S. 311.  An act relating to the use value appraisal program.

                                         Rep. Deen of Westminster

                                         Rep. Clarkson of Woodstock

                                         Rep. Winters of Williamstown

S. 345.  An act relating to lowering the cost of workers’ compensation.

                                         Rep. Kitzmiller of Montpelier

                                         Rep. Shand of Weathersfield

                                         Rep. Clerkin of Hartford

S. 357.  An act relating to domestic violence.

                                         Rep. Marek of Newfane

                                         Rep. Sharpe of Bristol

                                         Rep. Acinapura of Brandon

S. 364.  An act relating to a comprehensive vertical audit and reliability assessment of the Vermont Yankee nuclear facility.

                                         Rep. Dostis of Waterbury

                                         Rep. Edwards of Brattleboro

                                         Rep. Klein of East Montpelier

The House has considered the report of the Committee of Conference upon the disagreeing votes of the two Houses on Senate bill of the following title:

S. 241.  An act relating to the special veteran and gold star registration plates.

And has adopted the same on its part.

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

H. 888.

Pending entry on the Calendar for notice, on motion of Senator Shumlin, the rules were suspended and House bill entitled:

An act relating to miscellaneous tax amendments.

Was taken up for immediate consideration.

     Senator Cummings, for the Committee on Finance, to which the bill was referred, reported recommending that the Senate propose to the House to amend the bill as follows:

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

Sec. 3.  32 V.S.A. § 3757(e)(3) is amended to read:

(3)  of any transfer of ownership.  A transfer of ownership, alone, will not affect eligibility of the parcel, and no new maps will be required solely because of a transfer, but failure to provide maps, a new application, or transfer information to the division of property valuation and review within 30 days of a request being sent by certified mail by the director will result in removal of the parcel from the program.

     Second:  By striking out Secs. 19 and 20  [property tax adjustment information is public]

     Third:  By striking out Sec. 25 [refund appeal is deemed denied if not granted within six months]

     Fourth:  By striking out Sec. 26 [W&M review of three tax credits in 2012]

     Fifth: By striking out Sec. 29 [JFO study of tax expenditures to repeal]

     Sixth:  By striking out Sec. 36 [Essex CLA]

     Seventh:  By striking out Sec. 37 and inserting in lieu thereof a new Sec. 37 to read as follows:

Sec. 37  RATIFICATION OF ENROLLED VERSION OF H. 521 IN ACT NO. 81 OF 2007

The enrolled version of No. 81 of the Acts of 2007, as published by the Secretary of State in the publication entitled “Acts and Resolves passed by the General Assembly of the State of Vermont, sixty-ninth biennial session, 2007, is hereby expressly ratified as the correct version of Act No. 81 of the Acts of 2007.  This ratification shall not constitute a re-enactment of Act No. 81, and shall have no effect upon the effective dates in that act.

     Eighth: By striking out Sec. 42 [late-filed property tax adjustment claim]

     Ninth:   By renumbering Sec. 43 as Sec. 113

     Tenth:  By adding Secs. 43 and 44 to read as follows:

* * * Disclosure of Tax Return Information * * *

Sec. 43. Sec. 1.  32 V.S.A. § 3102(d) is amended to read:

(d)  The commissioner shall disclose a return or return information:

* * *

(5)  to the attorney general , if such return or return information relates to Chapter 205 of Title 32 or subchapters 1A and 1B of Chapter 19 of Title 33, for purposes of investigating potential violations of and enforcing Chapter 40 of Title 7, Subchapter 2A of Chapter 173 of Title 20; and subchapters 1A and 1B of chapter 19 of title 33.

Sec. 44.  32 V.S.A. § 3102(e) is amended to read:

(e)  The commissioner may, in his or her discretion and subject to such conditions and requirements as he or she may provide, including any confidentiality requirements of the Internal Revenue Service, disclose a return or return information:

* * *

(14)  to the office of the state treasurer, only in the form of mailing labels, with only the last address known to the department of taxes of any person identified to the department by the treasurer by name and social security number, for the treasurer’s use in notifying owners of unclaimed property.

     Eleventh: By adding Sec. 45 to read as follows:

Sec. 45.  32 V.S.A. § 3802(17) is added to read:

§ 3802.  PROPERTY TAX

The following property shall be exempt from taxation:

* * *

(17)  Real and personal property operated as a skating rink, owned and operated on a nonprofit basis but not necessarily by the same entity, and which, in the most recent calendar year, provided facilities to local public schools for a sport officially recognized by the Vermont Principals’ Association.  Property exempt under this subdivision shall not require a vote under subdivision 3832(7) of this title.

     Twelfth:  By adding Sec. 46 to read as follows:

Sec. 46.  24 V.S.A. § 138(a) is 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 only during calendar years 1999 through 2008;

(2)  a municipality opting 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 aA local option tax adopted under this section shall be effective beginning on the next tax quarter following 30 days’ notice to the department of taxes of the imposition; and all authority to opt to impose a local option tax under this section shall terminate September 1, 2007, and all authority to impose a local option tax shall terminate on December 31, 2008; 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.

     Thirteenth:  By adding Secs. 47 through 49 to read as follows:

Sec. 47.  32 V.S.A. § 5930b(g) is added to read:

(g)  Employment growth incentive for environmental technology business.

(1)  For purposes of this subsection, an “environmental technology business” means a business that is subject to income taxation in Vermont and whose current or prospective economic activity in Vermont for which incentives are sought under this section is certified by the secretary of commerce and community development to be primarily research, design, engineering, development, or manufacturing activity related to any one or more of the following:

(A)  Waste management, including waste collection, treatment, disposal, reduction, recycling, and remediation.

(B)  Natural resource protection and management including water and wastewater purification and treatment, air pollution control and prevention or remediation, soil and groundwater protection or remediation, and hazardous waste control or remediation.

(C)  Energy efficiency or conservation.

(D)  Clean energy, including solar, wind, wave, hydro, geothermal, hydrogen, fuel cells, waste-to-energy, or biomass.

(2)  Any application for a Vermont employment growth incentive under this section for an environmental technology business shall be considered and administered pursuant to all provisions of this section, except that:

(A)  the “incentive ratio” pursuant to subdivision 5930b(a)(11) of this title shall be set at 90 percent; and

(B)  the “payroll threshold” pursuant to subdivision 5930b(a)(17) of this title shall be deemed to be 20 percent of the expected average industry payroll growth as determined by the cost-benefit model.

Sec. 48.  32 V.S.A. § 5930b(a)(9) and (23) are amended to read:

(9) "Full-time job" means a permanent position filled by an employee who works at least 37 35 hours each week.

(23) "Vermont gross wages and salaries" means Medicare wages as reported on Federal Tax Form W2 to the extent those wages are Vermont wages , excluding income from non-statutory stock options.

* * * Repeal 2011 Limitation on

Sales Tax Exemption for Aircraft Parts * * *

Sec. 49.  REPEAL

     Secs. 7a and 7b of No. 81 of the Acts of 2007 (sales tax exemption for aircraft parts limited to commercial aircraft only, beginning July 1, 2011) are repealed.

     Fourteenth:  By adding Sec. 50 to read as follows:

Sec. 50.  TAX CREDIT FOR HISTORIC BUILDING REHABILITATION

     An owner awarded a tax credit under the provisions of section 5930n of title 32 for a historic rehabilitation project, who transfers the rehabilitated building to an entity which is tax-exempt under Internal Revenue Code section 501(c)(3), shall not be liable for the recapture penalty under section 5930n(f)(4)(A), but instead, shall be subject to the recapture penalty under section 5930ff(2).

     Fifteenth:  By adding Sec. 51 to read as follows:

Sec. 51.  24 V.S.A. §5204 is amended to read:

§ 5204. PAYMENT OF FEES

(a) An impact fee or obligation for offsite mitigation shall be a lien upon all property and improvements within land development for which the fee is assessed in the same manner and to the same effect as taxes are a lien upon real estate under section 5061 of Title 32.

(b) A municipality may require payment of an impact fee or accept offsite mitigation before issuance of a zoning or subdivision permit.

(c) A municipality may accept fees on installment at a reasonable rate of interest.

(d) A municipality may require a letter of credit to guarantee future payment of an impact fee or offsite mitigation.

(e)  Notwithstanding the provisions of 16 V.S.A. § 4029(b), a municipality may require that a fee certified as a school impact fee by the general counsel of the department of education shall be paid directly to the school district.

     Sixteenth:  By adding Sec. 52 to read as follows:

Sec. 52.  32 V.S.A. § 6071(b) is amended to read:

(b)  In any case in which it is determined that a claim is or was excessive, the commissioner may impose a ten percent penalty on such excess and if the claim has been paid or credited against property tax or income tax otherwise payable, the credit shall be reduced or canceled, and the proper portion of any amount paid shall be similarly recovered by assessment as income taxes are assessed and such assessment shall bear interest at the rate per annum established from time to time by the commissioner pursuant to section 3108 of this title from the date of payment or, in the case of adjustment of a property tax bill under section 6066a of this title, from December 1 of the year in which the claim is filed, until refunded or paid.

     Seventeenth: By adding Sec. 53 to read as follows:

Sec. 53.  Sec. 5 of No. 213 of the Acts of 1892, as amended by No. 357 of the Acts of 1906, is amended to read:

     Sec. 5.  Said corporation shall have power to purchase and receive for the charitable purposes herein indicated, by gift, bequest, devise or otherwise, real and personal property, and the same to hold, for such purposes only, and to sell and convey the same or any part thereof when expedient in the judgment of the Directors.  No more than fifty thousand dollars in Up to $500,000.00 of the value of the property of said corporation which is used directly as a nonprofit elder residential care home shall be exempt from municipal and education property taxation, and such property, to be so exempt from taxation, shall be located in said Brattleboro.

     Eighteenth:  By adding Secs. 54 through 57 to read as follows:

* * *Health Care Provider Provisions* * *

Sec. 54.  33 V.S.A. § 1953(a)(1) is amended to read:

(1)  Beginning July 1, 2005 January 1, 2008, each hospital's annual assessment, except for hospitals assessed under subdivision (2) of this subsection, shall be 6.0 5.5 percent of its net patient revenues (less chronic, skilled, and swing bed revenues) for the hospital's fiscal year as determined annually by the director from the hospital's financial reports and other data filed with the department of banking, insurance, securities, and health care administration.  The annual assessment shall be based on data from a hospital's third most recent full fiscal year.

Sec. 55.  33 V.S.A. § 1955(a) is amended to read:

(a)  Each Beginning January 1, 2008, each ICF/MR’s annual assessment shall be six 5.5 percent of the ICF/MR’s total annual direct and indirect expenses for the most recently settled ICF/MR audit.

Sec. 56.  33 V.S.A. § 1952(f) is added to read:

(f)  If a health care provider fails to pay its assessments under this subchapter according to the schedule or a variation thereof adopted by the director, the director may deduct these assessments arrears and any late‑payment penalties from Medicaid payments otherwise due to the provider.  The deduction of these assessment arrears may be made in one or more installments on a schedule to be determined by the director.

Sec. 57.  33 V.S.A. § 1954(d) is amended to read:

     (d)  Any nursing home that fails to make a payment to the office on or before the specified schedule, or under any schedule of delayed payments established by the director, shall be assessed not more than $1,000.00.  The director may waive this late-payment assessment provided for in this subsection for good cause shown by the nursing home.  The director may reduce Medicaid claim payments to satisfy all past due provider taxes assessed.

     Nineteenth:  By adding Sec. 58 to read as follows:

Sec. 58.  27 V.S.A. § 1248a is added to read:

27 V.S.A. § 1248a.  ELECTRIC UTILITY COOPERATIVES

     (a)  Electric utility cooperatives organized under or otherwise subject to 30 V.S.A. Chapter 81 shall report capital credits which have been retired and declared payable by the cooperative’s board of directors, but which have not been claimed by the owner in accordance with the provisions of this chapter.   Electric utility cooperatives shall not pay or deliver the unclaimed capital credits to the treasurer.  For purposes of this section, capital credits shall mean those credits to a capital account of a member of an electric utility cooperative which the cooperative is obliged to pay after operating costs and expenses have been paid.

     (b)  The treasurer shall provide notice of unclaimed capital credit properties reported by electric utilities in accordance with the provisions of section 1249 of this title.  In the event of a claim for a capital credit property, the treasurer shall refer the claimant to the appropriate electric utility cooperative who shall evaluate the claim and upon provision of satisfactory proof of ownership shall pay the claimant.

     (c)  The electric utility cooperative shall notify the treasurer of the resolution of all claims for unclaimed property.

     Twentieth:  By adding Secs. 59 and 60 to read as follows:

Sec. 59.  30 V.S.A. §209(d) (7) is amended to read:

(7)  Net revenues above costs associated with payments from the New England Independent System Operator (ISO‑NE) for capacity savings resulting from the activities of the energy efficiency utility designated under subdivision (2) of this subsection shall be deposited into the electric efficiency fund established by this section and be used by the entity appointed under subdivision (2) of this subsection to deliver fossil fuel energy efficiency services to Vermont heating and process-fuel consumers on a whole-buildings basis to help meet the state’s building efficiency goals established by section 581 of this title.

Sec. 60.  30 V.S.A. §209 (e) (15) is amended to read

(15)  Ensure that the energy efficiency programs implemented under this section are designed to make continuous and proportional progress toward attaining the overall state building efficiency goals established by 10 V.S.A. § 581, by promoting all forms of energy end‑use efficiency and comprehensive sustainable building design. The funds made available under subdivision (d) (2) of this section may be used by the efficiency entity appointed under that subdivision to deliver fossil fuel energy efficiency services to Vermont heating and process-fuel consumers on a whole-building basis.

     Twenty-first:  By adding Secs. 61 through 70 to read as follows:

Sec. 61.  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, including administration fees charged by a coordinating agency, finance costs, professional services, and organizational costs such as studies and public notification, but excluding imputed administrative costsAs 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. 62.  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. 63.  24 V.S.A. § 1894 is amended to read:

§ 1894.  POWER AND LIFE OF DISTRICT

(a)  A 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; provided, however, that the education tax increment may not be retained in excess of 20 years beginning on the date of initial indebtedness.  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. 64.  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. 65.  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. Notwithstanding any provision of any 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. 66.  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. 67.  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  of the municipal and education tax increment received in any tax year that exceed the amounts pledged for the payment on principal and interest on the bonds issued for improvements and related costs in the district shall be distributed to 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 , an equal portion of each increment may 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; and any remaining portion of the excess municipal tax increment shall be distributed to 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; and any remaining portion of the excess education tax increment shall be distributed to the education fund.


Sec. 68.  32 V.S.A. § 5404a(f) and (h) are amended and (j) is 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.

(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.

* * *

          (3) Location criteria. Determine that each application meets one of the following criteria:

(A) The development or redevelopment is compact, high density, and located in or near existing industrial areas.

(B) The majority of land in the proposed district is within an approved growth center, designated downtown, designated village center, or new town center.

(C) The development will occur in an area that is economically distressed, which for the purposes of this subdivision means that the area has experienced patterns of increasing unemployment, a drop in average wages, or a decline in real property values.

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

Sec. 69.  24 V.S.A. § 1901 is added to read:

§ 1901.  INFORMATION REPORTING

     Every municipality with an active tax increment financing district shall:

(1)  On or before December 1 of each year, report to the Vermont economic progress council (VEPC) and the tax department all information described in subsection 5404a(i) of Title 32, in the form prescribed by VEPC.

(2)  Report its tax increment financing actual investment, bond repayments, escrow status, and “related cost” accounting to the Vermont economic progress council according to the municipal audit cycle prescribed in section 1681 of Title 24.

Sec. 70.  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 2008.  Thereafter no tax increment financing districts may be approved without further authorization by the General Assembly general assembly.

     Twenty-second:  By adding Secs. 71 and 72 to read as follows:

Sec. 71.  Sec. 2j of No. 184 of the Acts of 2006 is amended to read:

Sec. 2j.  EXISTING TAX INCREMENT FINANCING DISTRICTS; MILTON

     Notwithstanding the limitations under 32 V.S.A. § 5404a, the town of Milton may extend for an additional ten years beyond the initial ten years approved for the two existing tax increment financing districts identified and known as the Husky campus and the Catamount Industrial Park, and collect all state and local property taxes on properties contained wholly or partly within the tax increment financing districts beyond the original taxable value of those properties at the time of the initial approval of the tax increment financing districts and apply no more than 75 percent of the increase in the value and liability assessed under 32 V.S.A. § 5402 state property tax increment, and an equal percent of the municipal tax increment, on new real property improvements to repayment of debt issued to finance improvements within the tax increment financing district and for related costs, upon application by the Town of Milton.

Sec. 72.  Sec. 18(b) of No. 184 of the Acts of 2006 is amended to read:

Sec. 18.  EFFECTIVE DATES

(b)  Those provisions of Sec. 2h adding 32  V.S.A. § 5404a(h)(3)(D) [location criteria] are repealed effective July 1, 2008 2009.

     Twenty-third:  By adding Secs. 73 and 74 to read as follows:

Sec. 73.  FY2008 COMMON LEVEL OF APPRAISAL IN WINOOSKI

     The fiscal year 2008 education property tax liability for the City of Winooski shall be recalculated using a common level of appraisal factor of 1.0952; and any resulting overpayment of education property taxes from the City of Winooski to the education fund in fiscal year 2008 shall be credited to the City of Winooski against its fiscal year 2009 education property tax liability.

Sec. 74.  Sec. 38(3) of No. 159 of the Acts of 2000 is amended to read:

(3)  The excess valuation of property within a tax increment financing district organized and created pursuant to Sec. 37 of this act, to the extent that taxes generated on the excess property valuation are pledged and appropriated for debt service on bonds issued under section 1897 of Title 24 or the funding of reserves under subdivision (2) of this section, shall not be included within the education property tax grand list provided for in section 5404 of Title 32 as taxable property, nor shall the excess valuation of the property be subject to the education property tax imposed under section 5402 of Title 32 until bonds issued under section 1897 of Title 24 are released, discharged, paid, defeased, or fully reserved; provided, however, that 5 2.5 percent of the education taxes imposed annually on the excess valuation of the residential property within the district shall be paid to the education fund.  The tax rate assessed on the excess value of property within the district shall be the same rate assessed on property outside the district. Until the bonds are paid in full or have been fully redeemed or defeased through fully funded reserves and accounts, 100 percent of the municipal taxes assessed against the excess valuation of property within the district shall be pledged and appropriated solely for debt service on the bonds.  For purposes of this act, “excess valuation” means the difference between the current grand list value and the grand list value at commencement of the development.

     Twenty-fourth:  By adding Sec. 75 to read as follows:

Sec. 75.  RETROACTIVE APPROVAL OF BURLINGTON TIF FINANCING   

Municipalities that expanded tax increment financing districts under subchapter 5 of chapter 53 of Title 24 by June 30, 1997, as authorized by No. 60 of the Acts of 1997 shall have authority to apply those state and local property taxes assessed on properties within the tax increment financing district to repayment of certificates of participation and HUD section 108 financing issued to finance public improvements within the tax increment financing district . This authority is retroactive to June 30, 1997, and is applicable to certificates of participation and HUD section 108 financing instruments issued after April 1, 1996, and on or before  March 31, 2006. State education property taxes may be used in accordance with this provision for a period of no more than twenty years from the date the debt was incurred. Refinancing such debt shall not extend the twenty-year period for any portion of the debt.

     Twenty-fifth:  By adding Secs. 76 through 80 to read as follows:

Sec. 76.  24 V.S.A. § 1897(a) is amended to read:

(a) The legislative body may pledge and appropriate in equal proportion any part or all of the state and municipal 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 improvements contained wholly or partly within the district and for related costs; provided, that if any tax increment utilization is approved pursuant to 32 V.S.A. § 5404a(g)(f), no more than 75 percent of the state property tax increment and no less than 75 an equal 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.

Sec. 77.  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  of the municipal and education tax increment received in any tax year that exceed the amounts pledged for the payment on principal and interest on the bonds issued for improvements and related costs in the district shall be distributed to 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 , an equal portion of each increment may 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; and any remaining portion of the excess municipal tax increment shall be distributed to 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; and any remaining portion of the excess education tax increment shall be distributed to the education fund.

Sec. 78.  REPEAL

32 V.S.A. § 5404a(e) (allocations) is repealed.


Sec. 79.  32 V.S.A. § 5404a(g) is amended to read:

(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 and tax Tax increment utilizations approved pursuant to subsections (e) and subsection (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 or 20 years following the date of initial indebtedness, whichever is earlier, 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.

Sec. 80.  32 V.S.A. § 5404a(h)(2) is amended to read:

(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; 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 the amount of expected indebtedness; 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.

* * *

     Twenty-sixth:  By inserting Sec. 81 to read as follows:

Sec. 81.  ENERGY STAR APPLIANCES

     Notwithstanding the provisions of chapter 233 of title 32 and section 138 of title 24, no sales and use tax or local option sales tax shall be imposed or collected on sales from July 14, 2008, through July 20, 2008, to individuals for personal use, of Energy Star appliances with a purchase price of $2000.00 or less.


     Twenty-seventh: By adding Secs. 82 through 112 to read as follows:

Sec. 82.  11 V.S.A. § 3001 is amended to read:

§ 3001.  DEFINITIONS

As used in this chapter:

* * *

(15)  “Operating agreement” means the agreement in writing any form of description of membership rights and obligations under section 3003 of this title, stored or depicted in any tangible or electronic medium, which is agreed to by the members, including amendments to the agreement.

* * *

(19)  “Signed” includes any symbol or electronic schema that may be prescribed by the secretary of state that is executed or adopted by a person with the present intention to authenticate a record.

* * *

(23)  “Document” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.    

(24)  “Writing” means written communications, including letters, faxes, e-mails, or other electronic formats that may be prescribed by the secretary of state.

(25)  “Delivery” means surface mail or methods of electronic transmission the secretary of state may prescribe.

(26)  “Meeting” means any structured communications conducted by participants in person or through the use of electronic or telecommunications medium permitting simultaneous or sequentially structured communications for the purpose of reaching a collective agreement.

Sec. 83.  11 V.S.A. § 3026(f) is added to read:

(f)  An original copy may consist of an electronic communication received by the secretary of state’s office, endorsement may consist of an attached electronic record, and the delivery of a duplicate may be done electronically.

Sec. 84.  11 V.S.A. § 3058(c) is amended to read:

(c)  A company may maintain its records in other than written form if such form is capable of conversion into written form within a reasonable time or into an electronic form that may be prescribed by the secretary of state.


Sec. 85.  11A V.S.A. § 1.20 is amended to read:

§ 1.20.  FILING REQUIREMENTS

* * *

(d)  The document must be typewritten or printed or, if electronically transmitted, it must be in a format that can be retrieved or reproduced in typewritten or printed form or in an electronic format prescribed by the secretary of state.

* * *

(h)  If the secretary of state has prescribed a mandatory form or electronic format for the document under section 1.21 of this title, the document must be in or on the prescribed form.

* * *

(j)(1)  Any of the terms of a plan or filed documents may be made dependent on facts ascertainable outside the plan or filed documents as follows:

(A)  The manner in which the facts operate on the terms of the plan or filed document must be clearly and expressly set forth in the plan or filed document.

(B)  The facts may include without limitation actions or events within the control of, or determinations made by, a part to the plan or filing the filed document or a representative of a party to the plan or filing the filed document. 

(2)  As used in this section:

(A)  “Filed document” means a document filed with the secretary of state under any provision of this title, except chapter 15 or section 16.22 of this title.

(B)  “Plan” means a plan of merger or share exchange.

Sec. 86.  11A V.S.A. § 1.21(a) is amended to read:

(a)  The secretary of state may prescribe the form or electronic format of and furnish on request forms or specifications for formats for:

(1)  articles of incorporation. such form shall note the information required under subsection 2.02(a) of this title, together with a summary of such information or provisions as are permitted by this title;

(2)  an application for a certificate of good standing;

(3)  a foreign corporation’s application for a certificate of authority to transact business in this state;

(4)  a foreign corporation’s application for a certificate of withdrawal; and

(5)  the annual report.

Sec. 87.  11A V.S.A. § 1.23(a) is amended to read:

§ 1.23.  EFFECTIVE TIME AND DATE OF DOCUMENT

(a)  Except as provided in subsection (b) of this section, section subsection 1.24(c) of this title, and section 2.03 of this title, a document accepted for filing is effective at the time of filing on the date it is filed, as evidenced by the secretary of state’s date and time endorsement on the original document:

(1)  at the date and time of filing, as evidenced by such means as the secretary of state may use for the purpose of recording the date and time of filing; or

(2)  at the time specified in the document as its effective time on the date it is filed.

Sec. 88.  11A V.S.A § 1.24(a) is amended to read:

(a)  A domestic or foreign corporation may correct a document filed by the secretary of state if the document:

(1)  is incomplete;

(2)  contains an incorrect statement; or

(3)  was defectively executed, attested, sealed, verified, or acknowledged; or

(4)  the electronic transmission of which was defective.

Sec. 89.  11A V.S.A. § 1.25(b) is amended to read:

(b)  The secretary of state files a document by stamping or otherwise endorsing recording it as “Filed” together with his or her name and official title and on the date and time of receipt, on both the original and the document copy document and on the record of the receipt for the filing fee.  After filing a document, except as provided in sections 5.03 and 15.10 of this title, the secretary of state shall deliver a copy of the document copy, with the and filing fee receipt (or acknowledgement of receipt if no fee is required) attached, to the domestic or foreign corporation or its representative.


Sec. 90.  11A V.S.A. § 1.27 is amended to read:

§ 1.27.  EVIDENTIARY EFFECT OF COPY OF FILED DOCUMENT

(a)  A certificate attached to a copy of a document filed by the secretary of state, bearing his or her signature (which may be in facsimile) and the seal of this state, is conclusive evidence that the original document is on file with the secretary of state.

(b)  A certificate by the secretary of state that a diligent search has failed to locate documents claimed to be filed with the secretary of state shall be taken and received in all courts, public offices, and official bodies as prima facie evidence of the absence of those documents in the files of the secretary of state.

(c)  The secretary of state’s filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation

A certificate from the secretary of state delivered with a copy of a document filed by the secretary of state is conclusive evidence that the document is on file with the secretary of state.

Sec. 91.  11A V.S.A. § 1.40 is amended to read:

§ 1.40.  DEFINITIONS

* * *

(5)  “Deliver” includes mail or “delivery” means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and electronic transmission.

* * *

(25)  “Electronic transmission” or “electronically transmitted” means a process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval, and reproduction of information by the recipient.

(26)  “Meeting” means any structured communications conducted by participants in person or through the use of electronic or telecommunications medium permitting simultaneous or sequentially structured communications for the purpose of reaching a collective agreement.

(27)  “Sign” or “signature” includes any manual, facsimile, conformed, or electronic signature.

Sec. 92.  11A V.S.A. § 141(b) and (c) are amended to read:

(b)  Notice may be communicated in person; by telephone, voice mail, telegraph, teletype, facsimile, or other form of wire or, wireless, or electronic communication; or by mail or private carrier or other method of delivery.  If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published; or by radio, television, or other form of public broadcast communication.

(c)  Notice to shareholders.  Written notice by a domestic or foreign corporation to its shareholder, if in a comprehensible form, is effective when: 

(1)  mailed first class postpaid and correctly addressed to the shareholder’s address as shown in the corporation’s current record of shareholders; or 

(2)  electronically transmitted to the shareholder in a manner authorized by the shareholder.

Sec. 93.  11A V.S.A. § 6.01 is amended to read:

§ 6.01.  AUTHORIZED SHARES

* * *

(d)  The description of the designations, preferences, limitations, and relative rights of share classes in subsection (c) of this section is not exhaustive  Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with subsection 1.20(k) of this title.

(e)  Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation.

(f)  The description of the designations, preferences, limitations, and relative rights of share classes in subsection (c) of this section is not exhaustive.

Sec. 94.  11A V.S.A. § 6.21 is amended to read:

§ 6.21.  ISSUANCE OF SHARES

* * *

(b)  The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services performed, or other securities of the corporation.  Future services shall not constitute payment or part payment for shares of a corporation.

* * *

(e)  The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits are received.  If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be cancelled in whole or part. 

Sec. 95.  11A V.S.A. § 6.24 is amended to read:

§ 6.24.  SHARE OPTIONS

A corporation may issue rights, options, or warrants for the purchase of shares of the corporation.  The board of directors shall determine the terms upon which the rights, options, or warrants are issued, their form and content, and the consideration for which the shares are to be issued.  The provisions of sections 8.60 through 8.63 of this title apply in accordance with their terms in the case of transactions involving the issuance of rights, options, or warrants for the purchase of shares to directors.  Any transactions involving the issuance of options for the purchase of shares to directors, as such, shall be subject to the approval of the shareholders.

(a)  A corporation may issue rights, options, or warrants for the purchase of shares or other securities of the corporation.  The board of directors shall determine:

(1)  the terms upon which the rights, options, or warrants are issued; and

(2)  the terms, including the consideration for which the shares or other securities are to be issued. 

(b)  The authorization by the board of directors for the corporation to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options, or warrants are exercisable. 

(c)  The terms and conditions of such rights, options, or warrants, including those outstanding on the effective date of this section, may include, without limitation, restrictions, or conditions that: 

(1)  preclude or limit the exercise, transfer, or receipt of such rights, options, or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation or by any transferee or transferees of any such person or persons; or

(2)  invalidate or void such rights, options, or warrants held by any such person or persons or any such transferee or transferees.

Sec. 96.  11A V.S.A. § 7.01 is amended to read:

§ 7.01.  ANNUAL MEETING

(a)  A corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws.

(b)  Annual shareholders’ meetings shall be held in this state, unless permitted in the bylaws of the corporation to be held out of this state.  Annual meetings shall be held at the place stated in or fixed in accordance with the bylaws.  If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation’s principal office.  An annual meeting may be conducted by means of any telecommunications mechanism, including video-conference telecommunication.

(c)  The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporation’s bylaws does not affect the validity of any corporate action, and shall result not in a forfeiture or dissolution of the corporation

Annual shareholders’ meetings shall be held in this state, unless permitted in the bylaws of the corporation to be held outside this state.  Annual meetings shall be held at the place stated in or fixed in accordance with the bylaws.  If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation’s principal office.  An annual meeting may be conducted by means of any electronic or telecommunications mechanism, including video-conference telecommunication.  The failure to hold an annual meeting at the time stated or fixed in accordance with a corporation’s bylaws does not affect the validity of any corporate action.

Sec. 97.  11A V.S.A. § 7.02(c) is amended to read:

(c)  Special shareholders’ meetings shall be held in this state, unless permitted in the bylaws of the corporation to be held out of this state.  Meetings shall be held at the place stated in or fixed in accordance with the bylaws.  If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation’s principal office.  A special meeting may be conducted by means of any electronic or telecommunications mechanism, including video-conference telecommunication.

Sec. 98.  11A V.S.A. § 7.04(a) is amended to read:

(a)  Unless the articles of incorporation preclude the taking of action required or permitted by this title without a shareholders’ meeting, action required or permitted by this title to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action.  Each action must be evidenced by one or more written consents describing the action taken, signed by all the shareholders entitled to vote on the action, and delivered to the corporation for inclusion in the minutes or filed with the corporate records.  For purposes of this section, consent evidenced by electronic communications or an electronic record is written consent.

Sec. 99.  11A V.S.A. § 7.32 is added to read:

§ 7.32.  SHAREHOLDER AGREEMENTS

(a)  An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this title in that it:

(1)  eliminates the board of directors or restricts the discretion or powers of the board of directors; 

(2)  governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations in section 6.40 of this title; 

(3)  establishes who shall be directors or officers of the corporation, ortheir terms of office or manner of selection or removal;

(4)  governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including the use of weighted voting rights or director proxies;

(5)  establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them; 

(6)  transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders; 

(7)  requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event; or 

(8)  otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors, and the corporation, or among any of them, and is not contrary to public policy.

(b)  An agreement authorized by this section shall be: 

(1)  set forth:

(A)  in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement; or

(B)  in a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation; 

(2)  subject to amendment only by the holders of a majority of each class of the corporation’s issued and outstanding capital stock, with each class voting as a separate group, unless the agreement provides otherwise; and

(3)  valid for 10 years, unless the agreement provides otherwise.

(c)  The existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by subsection 6.26(b) of this title.  If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection.  The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it.  Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase.  A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or prior to the time of the purchase of the shares.  An action to enforce the right of rescission authorized by this subsection must be commenced within the earlier of 90 days after discovery of the existence of the agreement or two years after the time of the purchase of the shares. 

(d)  An agreement authorized by this section shall cease to be effective when the corporation becomes a public corporation.  If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation’s articles of incorporation or bylaws, adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it. 

(e)  An agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement. 

(f)  The existence or performance of an agreement authorized by this section shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation, even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement. 

(g)  Incorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this section if no shares have been issued when the agreement is made.

Sec. 100.  11A V.S.A. § 8.03(a) amended to read:

(a)  A board of directors of a corporation which is not a close corporation dispensing with a board of directors pursuant to section 20.08 of this title must consist of three one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws.  If the number of shareholders in any corporation is less than three, the The number of directors may be as few as the number of shareholders increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or the bylaws.

Sec. 101.  11A V.S.A. § 8.20 is amended to read:

§ 8.20.  MEETINGS

(a)  The board of directors may hold regular or special meetings, as defined in subdivision 1.40(26) of this title, in or out of outside this state.

(b)  The board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication, including an electronic, telecommunications, and video- or audio‑conferencing conference telephone call, by which all directors participating may simultaneously hear communicate with each other during the meeting.  A director participating in a meeting by this means is deemed to be present in person at the meeting.


Sec. 102.  11A V.S.A. § 8.40 is amended to read:

§ 8.40.  REQUIRED OFFICERS

(a)  A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws, provided that a corporation shall have a president and a secretary.  Any two or more offices may be held by the same person, except the offices of president and secretary, unless the corporation is a professional corporation organized under chapter 3 or 4 of Title 11.

(b)  A duly appointed The board of directors may elect individuals to fill one or more offices of the corporations.  An officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board of directors.

(c)  The bylaws or the board of directors shall delegate assign to one of the officers responsibility for preparing the minutes of the directors’ and shareholders’ meetings and for authenticating and maintaining the records of the corporation required to be kept under subsections 16.01(a) and 16.10(e) of this title.

* * *

(e)  An individual who holds more than one office may execute, acknowledge or verify in more than one capacity any document required to be executed, acknowledged or verified by the holders of two or more officers.

Sec. 103.  11A V.S.A. § 8.60 is amended to read:

§ 8.60.  DEFINITIONS

For purposes of this subchapter:

(1)  “Conflicting interest” with respect to a corporation means the interest a director of the corporation has respecting a transaction effected or proposed to be effected by the corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) if

(A)  whether or not the transaction is brought before the board of directors of the corporation for action, the director knows at the time of commitment that he or she or a related person is a party to the transaction or has a beneficial financial interest in or so closely linked to the transaction and of such financial significance to the director or a related person that the interest would reasonably be expected to exert an influence on the director’s judgment if he or she were called upon to vote on the transaction; or

(B)  the transaction is brought (or is of such character and significance to the corporation that it would in the normal course be brought) before the board of directors of the corporation for action, and the director knows at the time of commitment that any of the following persons is either a party to the transaction or has a beneficial financial interest in or so closely linked to the transaction and of such financial significance to the person that the interest would reasonably be expected to exert an influence on the director’s judgment if he or she were called upon to vote on the transaction:

(i)  an entity (other than the corporation) of which the director is a director, general partner, agent, or employee;

(ii)  a person that controls one or more of the entities specified in subdivision (i) of this subdivision or an entity that is controlled by, or is under common control with, one or more of the entities specified in subdivision (i); or

(iii)  an individual who is a general partner, principal, or employer of the director.

(2)  “Director’s conflicting interest transaction” with respect to a corporation means a transaction effected or proposed to be effected by the corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) respecting which a director of the corporation has a conflicting interest.

(3)  “Related person” of a director means (A) the spouse (or a parent or sibling thereof) of the director, or a child, grandchild, sibling, parent (or spouse of any thereof) of the director, or an individual having the same home as the director, or a trust or estate of which an individual specified in this subdivision (A) is a substantial beneficiary; or (B) a trust, estate, incompetent, conservatee, or minor of which the director is a fiduciary.

(4)  “Required disclosure” means disclosure by the director who has a conflicting interest of (A) the existence and nature of his or her conflicting interest, and (B) all facts known to him or her respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment about whether or not to proceed with the transaction.

(5)  “Time of commitment” respecting a transaction means the time when the transaction is consummated or, if made pursuant to contract, the time when the corporation (or its subsidiary or the entity in which it has a controlling interest) becomes contractually obligated so that its unilateral withdrawal from the transaction would entail significant loss, liability, or other damage.

(1)  “Control” including the term “controlled by” means:

(A)  having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity whether through the ownership of voting shares or interests, by contract, or otherwise; or

(B)  being subject to a majority of the risk of loss from the entity’s activities or entitled to receive a majority of the entity’s residual returns.

(2)  “Director’s conflicting interest transaction” means a transaction effected or proposed to be effected by the corporation or by an entity controlled by the corporation that at the relevant time the director:

(A)  was a party to; or

(B)  had knowledge of and a material financial interest known to the director; or

(C)  knew that a related person was a party or had a material financial interest. 

(3)  “Fair to the corporation” means, for purposes of subdivision 8.61(b)(3) of this title, that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was:

(A)  fair in terms of the director’s dealings with the corporation; and

(B)  comparable to what might have been obtainable in an arm’s length transaction, given the consideration paid or received by the corporation. 

(4)  “Material financial interest” means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director’s judgment when participating in action on the authorization of the transaction. 

(5)  “Related person” means: 

(A)  the director’s spouse;

(B)  a child, stepchild, grandchild, parent, stepparent, grandparent, sibling, step sibling, half sibling, aunt, uncle, niece, or nephew (or spouse of any thereof) of the director or of the director’s spouse; 

(C)  an individual living in the same home as the director;

(D)  an entity, other than the corporation or an entity controlled by the corporation, controlled by the director or any person specified in this subdivision; 

(E)  a domestic or foreign:

(i)  business or nonprofit corporation (other than the corporation or an entity controlled by the corporation) of which the director is a director;

(ii)  unincorporated entity of which the director is a general partner or a member of the governing body; or

(iii)  individual, trust, or estate for whom or of which the director is a trustee, guardian, personal representative, or like fiduciary; or

(F)  a person that is, or an entity that is controlled by, an employer of the director.

(6)  “Relevant time” means:

(A)  the time at which the directors’ action respecting the transaction is taken in compliance with section 8.62 of this title; or

(B)  if the transaction is not brought before the board of directors of the corporation or its committee for action under section 8.62 of this title, at the time the corporation, or an entity controlled by the corporation, becomes legally obligated to consummate the transaction. 

(7)  “Required disclosure” means disclosure of:

(A)  the existence and nature of the director’s conflicting interest; and

(B)  all facts known to the director respecting the subject matter of the transaction that a director free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.

Sec. 104.  11A V.S.A. § 8.61 is amended to read:

§ 8.61.  JUDICIAL ACTION

(a)  A transaction effected or proposed to be effected by a corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) that is not a director’s conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, because a director of the corporation, or any person with whom or which he or she has a personal, economic, or other association, has an interest in the transaction.

(b)  A director’s conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, because the director, or any person with whom or which he or she has a personal, economic, or other association, has an interest in the transaction, if:

(1)  directors’ action respecting the transaction was at any time taken in compliance with section 8.62 of this subchapter;

(2)  shareholders’ action respecting the transaction was at any time taken in compliance with section 8.63 of this subchapter; or

(3)  the transaction, judged according to the circumstances at the time of commitment, is established to have been fair to the corporation.

(a)  A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if it is not a director’s conflicting interest transaction. 

(b)  A director’s conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder, or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if:

(1)  the directors’ action respecting the transaction was taken in compliance with section 8.62 of this title at any time; or 

(2)  the shareholders’ action respecting the transaction was taken in compliance with section 8.63 of this title at any time; or 

(3)  the transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation.

Sec. 105.  11A V.S.A. § 8.62 is amended to read:

§ 8.62.  DIRECTORS’ ACTION

(a)  Directors’ action respecting a transaction is effective for purposes of section 8.61(b)(1) of this subchapter if the transaction received the affirmative vote of a majority (but no fewer than two) of those qualified directors on the board of directors or on a duly empowered committee of the board who voted on the transaction after either required disclosure to them (to the extent the information was not known by them) or compliance with subsection (b) of this section; provided that action by a committee is so effective only if:

(1)  all its members are qualified directors; and

(2)  its members are either all the qualified directors on the board or are appointed by the affirmative vote of a majority of the qualified directors on the board.

(b)  If a director has a conflicting interest respecting a transaction, but neither he nor she nor a related person of the director specified in section 8.60(3) of this subchapter is a party to the transaction, and if the director has a duty under law or professional canon, or a duty of confidentiality to another person, respecting information relating to the transaction such that the director may not make the disclosure described in section 8.60(4), then disclosure is sufficient for purposes of subsection (a) of this section if the director (1) discloses to the directors voting on the transaction the existence and nature of his or her conflicting interest and informs them of the character and limitations imposed by that duty before their vote on the transaction, and (2) plays no part, directly or indirectly, in their deliberations or vote.

(c)  A majority (but no fewer than two) of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this section. Directors’ action that otherwise complies with this section is not affected by the presence or vote of a director who is not a qualified director.

(d)  For purposes of this section, “qualified director” means, with respect to a director’s conflicting interest transaction, any director who does not have either (1) a conflicting interest respecting the transaction, or (2) a familial, financial, professional, or employment relationship with a second director who does have a conflicting interest respecting the transaction, which relationship would, in the circumstances, reasonably be expected to exert an influence on the first director’s judgment when voting on the transaction.

(a)  Directors’ action respecting a director’s conflicting interest transaction is effective for purposes of subdivision 8.61(b)(1) of this title if the transaction has been authorized by the affirmative vote of a majority, but no fewer than two of the qualified directors who voted on the transaction after required disclosure by the conflicted director of information not already known by such qualified directors, or after modified disclosure in compliance with subsection (b) of this section, provided that:

(1)  the qualified directors have deliberated and voted outside the

presence of and without the participation by any other director; and

(2)  where the action has been taken by a committee, all members of the committee were qualified directors, and either:

(A)  the committee was composed of all the qualified directors on the board of directors; or

(B)  the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board. 

(b)  Notwithstanding subsection (a) of this section, when a transaction is a director’s conflicting interest transaction only because a related person described in subdivisions 8.60(5)(E) and (F) of this title is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that the conflicted director discloses to the qualified directors voting on the transaction:

(1)  all information required to be disclosed that is not so violative;

(2)  the existence and nature of the director’s conflicting interest; and

(3)  the nature of the conflicted director’s duty not to disclose the confidential information.

(c)  A majority, but no fewer than two, of all the qualified directors on the board of directors or on the committee constitutes a quorum for purposes of action that complies with this section. 

(d)  Where directors’ action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws, or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate.

Sec. 106.  11A V.S.A. § 8.63 is amended to read:

§ 8.63.  SHAREHOLDERS’ ACTION

(a)  Shareholders’ action respecting a transaction is effective for purposes of section 8.61(b)(2) of this subchapter if a majority of the votes entitled to be cast by the holders of all qualified shares was cast in favor of the transaction after (1) notice to shareholders describing the director’s conflicting interest transaction, (2) provision of the information referred to in subsection (d) of this section, and (3) required disclosure to the shareholders who voted on the transaction (to the extent the information was not known by them).

(b)  For purposes of this section, “qualified shares” mean any shares entitled to vote with respect to the director’s conflicting interest transaction except shares that, to the knowledge, before the vote, of the secretary (or other officer or agent of the corporation authorized to tabulate votes), are beneficially owned (or the voting of which is controlled) by a director who has a conflicting interest respecting the transaction or by a related person of the director, or both.

(c)  A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of action that complies with this section. Subject to the provisions of subsections (d) and (e) of this section, shareholders’ action that otherwise complies with this section is not affected by the presence of holders, or the voting, of shares that are not qualified shares.

(d)  For purposes of compliance with subsection (a) of this section, a director who has a conflicting interest respecting the transaction shall, before the shareholders’ vote, inform the secretary (or other officer or agent of the corporation authorized to tabulate votes) of the number, and the identity of persons holding or controlling the vote, of all shares that the director knows are beneficially owned (or the voting of which is controlled) by the director or by a related person of the director, or both.

(e)  If a shareholders’ vote does not comply with subsection (a) of this section solely because of a failure of a director to comply with subsection (d), and if the director establishes that his or her failure did not determine and was not intended by him or her to influence the outcome of the vote, the court may, with or without further proceedings respecting section 8.61(b)(3) of this subchapter, take such action respecting the transaction and the director, and give such effect, if any, to the shareholders’ vote, as it considers appropriate in the circumstances.

(a)  Shareholders’ action respecting a director’s conflicting interest transaction is effective for purposes of subdivision 8.61(b)(2) of this title if a majority of the votes cast by the holders of all qualified shares is in favor of the transaction after:

(1)  notice to shareholders describing the action to be taken respecting the transaction;

(2)  provision to the corporation of the information referred to in subsection (b) of this section; and

(3)  communication of the information that is the subject of required disclosure to the shareholders entitled to vote on the transaction, to the extent the information is not known by them.

(b)  A director who has a conflicting interest respecting the transaction shall, before the shareholders’ vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes, in writing, of the number of shares that the director knows are not qualified shares under subsection (c) of this section and the identity of the holders of those shares.  

(c)  For purposes of this section:

(1)  “Holder” means and “held by” refers to shares held by both a record shareholder, as defined in subdivision 13.01(7) of this title, and a beneficial shareholder, as defined in subdivision 13.01(2) of this title;

(2)  “Qualified shares” means all shares entitled to be voted with respect to the transaction except for shares that the secretary or other officer or agent of the corporation authorized to tabulate votes either knows, or under subsection (b) of this section is notified, are held by:

(A)  a director who has a conflicting interest respecting the transaction; or

(B)  a related person of the director, excluding a person described in subdivision 8.60(5)(F) of this title.

(d)  A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this section.  Subject to the provisions of subsection (e) of this section, shareholders’ action that otherwise complies with this section is not affected by the presence of holders, or by the voting, of shares that are not qualified shares. 

(e)  If a shareholders’ vote does not comply with subsection (a) of this section solely because of a director’s failure to comply with subsection (b) of this section, and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may take such action respecting the transaction and the director, and may give such effect, if any, to the shareholders’ vote, as the court considers appropriate in the circumstances. 

(f)  Where shareholders’ action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws, or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders, in which action shares that are not qualified shares may participate.

Sec. 107.  11A V.S.A. § 12.02(a) is amended to read:

(a)  A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property (with or without the good will), otherwise than in the usual and regular course of business, on the terms and conditions and for the consideration determined by the corporation’s board of directors, if the board of directors proposes and its shareholders approve the proposed transaction A sale, lease, exchange, or other disposition of assets, other than a disposition described in section 12.01 of this title, requires approval of the corporation’s shareholders if the disposition would leave the corporation without a significant continuing business activity.  If a corporation retains a business activity that represented at least 25 percent of the total assets at the end of the most recently completed fiscal year, and 25 percent of either income from continuing operations before taxes or revenues from continuing operations for that fiscal year, in each case of the corporation and its subsidiaries on a consolidated basis, the corporation will conclusively be deemed to have retained a significant continuing business activity.

Sec. 108.  11A V.S.A. § 16.01(d) and (e) are amended to read:

(d)  A corporation shall maintain its records in written form or in another form, including electronic form, capable of conversion into written form within a reasonable time.

(e)  A corporation shall keep a copy of the following records at its principal office (or, if none in this state, then the registered office):

* * *

(5)  all written or electronic communications to shareholders generally within the past three years, including the financial statements furnished for the past three years under section 16.20 of this title;

* * *

* * *E-Business Taxation* * *

Sec. 109.  32 V.S.A. § 5811(26) is added to read:

          (26)  “E-business” means a business entity which, during the entire taxable year:

                    (A) was not a corporation subject to the provisions of subchapter C of chapter of the Internal Revenue Code;

                    (B)  was not a member of an affiliated group or engaged in a unitary business with one or more members of an affiliated group; did not perform any activities in this state which would constitute doing business for purposes of income taxation, other than activities described in subdivisions (15)(C)(i), fulfillment operations, and (ii), Web page or Internet site maintenance, of this section;

                    (C) used mainly computer, electronic, and telecommunications technologies in its formation and in the conduct of its business meetings, in its interaction with shareholders, members and partners, and in executing any other formal requirements.


Sec. 110.  32  V.S.A. § 5911 is amended to read:

§ 5911. TAXATION OF AN S CORPORATION AND ITS SHAREHOLDERS

(a) An S corporation shall not be subject to the tax imposed by section 5832 of this title, except to the extent of income taxable to the corporation under the provisions of the Internal Revenue Code.

(b) For the purposes of section 5823 of this title, each shareholder's pro rata share of the S corporation's income attributable to Vermont and each resident shareholder's pro rata share of the S corporation's income not attributable to Vermont shall be taken into account by the shareholder in the manner provided in Section 1366 of the Code.

     (c)  An S corporation and its shareholders shall not be subject to the tax imposed by section 5832 of this title or to the provisions of this subchapter 10A if the S corporation qualifies as, and elects to be taxed as, an E-business for the taxable year.

Sec. 111.  32 V.S.A. § 5921a is added to read:

§ 5921.  E-business election.

     A partnership or limited liability company and its partners or members shall not be subject to the tax imposed by section 5832 of this title or to provisions of this subchapter 10B if the partnership or company qualifies as, and elects to be taxed as, an E-business for the taxable year.

Sec. 112.  32 V.S.A. § 5832a is added to read:

§ 5832a.  E-BUSINESS FRANCHISE TAX

     (a)  There is imposed upon every business entity which qualifies as, and has elected to be taxed as, an E-business, an annual franchise tax equal to the greater of 0.025% of the current value of the tangible and intangible assets of the company or $250.00, but in no case more than $500,000.00.

     (b)  The franchise tax under this section shall be reported and paid in the same manner as the tax under section 5832(2)(B) of this title.

     Twenty-eighth:  [Effective Dates]  In Sec. 113 (renumbered from the original Sec. 43 in the bill as passed the House), and by striking out subsection (6) (effective date for Secs. 19 and 20); and inserting subsections (12) through (18) to read as follows:

          (12)  Sec. 45 of this act (property tax exemption for skating rinks) shall apply to grand lists for April 1, 2008 and 2009 only.

          (13)  Sec. 48 of this act (amendment of VEGI definitions; “full-time job” at 35 hours and “wages” excluding stock options) shall take effect retroactively from January 1, 2007.

     (14)  Sec. 52 of this act (interest due on repayment of an excessive property tax adjustment) shall apply to property tax adjustment claims filed in 2008 and after.

          (15)  Sec. 53 of this act ($500,000 property tax exemption for the Brattleboro Holton Home) shall apply notwithstanding any other provision of law, and shall apply to property taxes for fiscal years 2006 and after.  This provision shall be added to the annotation for 32 V.S.A. § 3802.

          (16) Sec. 71 of this act (equal percentage of education tax increment and municipal tax increment required to be used by Town of Milton for tax increment financing) shall take effect July 1, 2008. 

          (17) Sec. 76 of this act (proportional use of education and municipal tax in TIF financing) shall apply to tax increment financing districts approved pursuant to 32 V.S.A. § 5404a.

          (18)  Secs.109 through 112 of this act (E-business taxation) shall apply to taxable years 2008 and after.

     And by renumbering the sections of the bill and internal references to be numerically correct.

Thereupon, the bill was read the second time by title only pursuant to Rule 43, the proposal of amendment was agreed to, and pending the question, Shall the bill be read a third time?, Senator McCormack moved to amend the Senate proposal of amendment by adding two new sections to be numbered Secs. 114 and 115 to read as follows:

Sec. 114.  16 V.S.A. § 563 is amended to read:

§ 563.  POWERS OF SCHOOL BOARDS; FORM OF VOTE IF BUDGET EXCEEDS BENCHMARK AND DISTRICT SPENDING IS ABOVE AVERAGE

The school board of a school district, in addition to other duties and authority specifically assigned by law:

* * *

(11)(A)  Shall prepare and distribute annually a proposed budget for the next school year according to such major categories as may from time to time be prescribed by the commissioner. 

(B)  If the proposed budget contains education spending in excess of the Maximum Inflation Amount, and the district’s education spending per equalized pupil in the fiscal year preceding the year for which the budget is proposed was in excess of the statewide average district education spending per equalized pupil in that same fiscal year, as determined by the commissioner of education, then in lieu of any other statutory or charter form of budget adoption or budget vote, the board shall present the budget to the voters by means of a divided question, in the form of vote provided in subdivision (ii) of this subsection.

(i)  “Maximum Inflation Amount” in this section means:

(I)  the statewide average district education spending per equalized pupil, as defined in subdivision 4001(6) of this title, in the fiscal year preceding the year for which the budget is proposed, as determined by the commissioner of education, multiplied by the New England Economic Project Cumulative Price Index percentage change, as of November 15 preceding distribution of the proposed budget, for state and local government purchases of goods and services for the fiscal year for which the budget is proposed, plus one percentage point; plus the district’s education spending per equalized pupil in the fiscal year preceding the year for which the budget is proposed, as determined by the commissioner of education;

(II)  multiplied by the higher of the following amounts as determined by the commissioner of education:

(aa)  the district’s equalized pupil count in the fiscal year preceding the year for which the budget is proposed; or

(bb)  the district’s equalized pupil count in the fiscal year for which the budget is proposed.

(ii)  Form of vote.

“School Budget Question #1:

Shall the voters of the         School District approve a total budget in the amount of [$                 ], which includes the Maximum Inflation      Amount of education spending?

“School Budget Question #2:

If Question #1 is approved, shall the voters of the School District also approve additional education spending of [$      ]?”

(C)(B)  At a school district’s annual meeting, the electorate may vote to provide notice of availability of the school budget required by this subdivision to the electorate in lieu of distributing the budget.  If the electorate of the school district votes to provide notice of availability, it must specify how notice of availability shall be given, and such notice of availability shall be provided to the electorate at least 30 days before the district’s annual meeting. The proposed budget shall be prepared and distributed at least ten days before a sum of money is voted on by the electorate.  Any proposed budget shall show the following information in a format prescribed by the commissioner of education:

* * *

Sec. 115.  REPEAL

Sec. 6 (effective date for requiring a divided question when voting for school budgets that exceed the Maximum Inflation Amount) of No. 82 of the Acts of 2007 is repealed.

Thereupon, pending the question, Shall the Senate propose to the House to amend the bill as moved by Senator McCormack?, Senator Illuzzi raised a point of order under Sec. 402 of Mason’s Manual of Legislative Procedure on the ground that the proposal of amendment offered by Senator McCormack was not germane to the bill and therefore could not be considered by the Senate.

Thereupon, the President sustained the point of order and ruled that the proposal of amendment offered by Senator McCormack was not germane to the bill. 

     A motion to amend a bill must be germane to the subject matter of the bill.  H. 888, as passed by the House and as proposed to be amended by the Senate, primarily deals with Vermont’s tax laws as set forth in Title 32. 

     The bill has nothing to do with the manner in which school budgets are to be adopted by our school districts.

     The amendment proposed by the Senator from Windsor would change the manner by which school budgets are to be voted on – and nothing else.  not only would it reverse the action taken in this biennium last year, but also it would unduly expand the scope of this bill.  It would introduce a different topic or subject totally independent from H. 888’s content.  It is not a natural or logical sequence to the subject matter of the original bill or the bill as proposed to be amended.

     A question of germaneness is a judgment call.  In my judgment the amendment proposed by the Senator from Windsor is not germane.  

The President thereupon declared that the proposal of amendment offered by Senator McCormack could not be considered by the Senate and the proposal of amendment was ordered stricken.

Senator McCormack moved that the Senate rules be suspended in order to permit the Senate to consider a non-germane amendment.

Which was disagreed to.

Thereupon, pending third reading of the bill, Senator Illuzzi moved that the Senate propose to the House to amend the bill by striking out Sec. 27 [relating to repeal of the property tax exemption for Civil and Spanish American war veterans] in its entirety.

Which was agreed to.

Thereupon, pending third reading of the bill, Senator Collins moved that the Senate propose to the House to amend the bill by striking out Sec 51. [Impact Fees] and inserting in lieu thereof a new section to be numbered Sec. 51 to read as follows:

Sec. 51.  IMPACT FEES; STUDY

(a)  There is created a school impact fees study committee to analyze whether:

(1)  It is sound economic policy to permit municipalities to collect impact fees for new development despite the continued decline in Vermont public school enrollment.

(2)  The provisions of No. 68 of the Acts of 2003, as amended, permit municipalities to continue to collect and spend impact fees for new development. 

(3)  Notwithstanding 16 V.S.A. § 4029, impact fees levied pursuant to 24 V.S.A. chapter 131 should be available, directly or indirectly, for education expenses.

(b)  The committee shall have the following members:

(1)  The commissioner of education, or the commissioner’s designee.

(2)  The commissioner of economic development, or the commissioner’s designee.

(3)  The commissioner of housing and community affairs, or the commissioner’s designee.

(4)  The executive director of the Vermont housing finance agency, or the executive director’s designee.

(5)  The executive director of the Vermont league of cities and towns, or the executive director’s designee.

(6)  The executive officer of the home builders and remodelers association, or the executive officer’s designee.

(7)  The executive director of the Vermont school boards association, or the executive director’s designee.

(c)  The commissioner of education shall arrange the first meeting of the committee, which shall occur no later than September 1, 2008.  At the first meeting, the committee shall select a chair from among its members.  

(d)  On or before January 15, 2009, the committee shall submit to the house and senate committees on education and on government operations, the senate committee on finance, and the house committee on ways and means a report outlining the details of the work required in subsection (a) of this section, together with recommendations, if any, including amendments to existing law.

Thereupon, Senator Collins requested and was granted leave to withdraw the proposal of amendment.

Thereupon, the recurring question, Shall the bill be read the third time?, was decided in the affirmative.

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

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

House Proposal of Amendment Concurred In with Amendment

S. 284.

House proposal of amendment to Senate bill entitled:

An act relating to the department of banking, insurance, securities and health care administration.

Was taken up.

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

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


Sec. 1.  8 V.S.A. § 2201(c)(14) is added to read:

(14)  nonprofit organizations established under testamentary instruments, exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3), and which make loans for postsecondary educational costs to students and their parents, provided that the organizations provide annual accountings to the probate court pursuant to 14 V.S.A. § 2324.

Second:  By adding five new sections to be numbered Secs. 9–13 to read as follows:

Sec. 9.  8 V.S.A. § 4840(d) is amended to read:

(d)  The commissioner may waive or reduce the requirements of this section for an attorney that is under common ownership or control with a reciprocal insurer.  The commissioner may reduce by 50 percent the bond amount required by this section for an attorney that is not under common ownership or control with a reciprocal insurer if the commissioner finds sufficient evidence of financial responsibility, notwithstanding the reduction of the bond amount.

Sec. 10.  8 V.S.A. § 6006(i) is amended to read:

(i)  The provisions of subchapter 3, and subchapter 3A of chapter 101 of this title, pertaining to mergers, consolidations, conversions, mutualizations, redomestications, and mutual holding companies, shall apply in determining the procedures to be followed by captive insurance companies in carrying out any of the transactions described therein, except that:

* * *

(3)  the provisions of subsections 3423(f) and (h) of this title shall not apply, and the commissioner may waive or modify the requirement of subdivision 3423(b)(4) of this title, with respect to market value of a converted company as necessary or desirable to reflect applicable restrictions on ownership of companies formed under this chapter; and

(4)  an alien insurer may be a party to a merger authorized under this subsection; provided that the requirements for a merger between a captive insurance company and a foreign insurer under section 3431 of this title shall apply to a merger between a captive insurance company and an alien insurer under this subsection.  Such alien insurer shall be treated as a foreign insurer under section 3431 and such other jurisdictions shall be the equivalent of a state for purposes of section 3431; and

(5)  the commissioner may issue a certificate of general good to permit the formation of a captive insurance company that is established for the sole purpose of merging with or assuming existing insurance or reinsurance business from an existing Vermont licensed captive insurance company.  The commissioner may, upon request of such newly formed captive insurance company, waive or modify the requirements of subdivisions 6002(c)(1)(B) and (2) of this title.

Sec. 11.  8 V.S.A. § 6048n is amended to read:

§ 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.

* * *

(4)  The special purpose financial captive insurance company on behalf of a protected cell shall be entitled to assert the same claims and defenses in actions in law or equity as if the protected cell were a corporation established under Title 11A of the Vermont Statutes Annotated, including, but not limited to, claims and defenses in actions at law or equity alleging alter ego, corporate veil piercing, offset, substantive consolidation, equitable subordination, or recoupment.  In connection with the conservation, rehabilitation, or liquidation of a special purpose financial captive insurance company or one or more of its protected cells, the assets and liabilities of a protected cell shall at all times be kept separate from, and shall not be commingled with, those of other protected cells and the special purpose financial captive insurance company, and the assets of one protected cell shall not be used to satisfy the obligations or liabilities of another protected cell or the special purpose financial captive insurance company based on legal or equitable claims or defenses, including but not limited to alter ego, piercing the corporate veil, offset, substantive consolidation, equitable subordination, or recoupment, unless such claims or defenses would apply to such protected cell if it were a special purpose finance captive insurance company without separate cells.

(4)(5)  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)(6)  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)(7)  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)(8)(A)  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 following statement, or such other statement as may be required by the commissioner:

(i)  In the case of a security:  “The holder of such this security and any counterparty to such contract or obligation shall have no right or recourse against the special purpose financial captive insurance company and its assets other than against assets properly attributable to such the designated protected cell. and the special purpose financial captive insurance company’s general account, to the extent permitted by Vermont law.”

(ii)  In the case of a contract or obligation:  “The counterparty to this contract or obligation shall have no right or recourse against the special purpose financial captive insurance company and its assets other than against assets properly attributable to the designated protected cell and the special purpose financial captive insurance company’s general account, to the extent permitted by Vermont law.”

(B)  Notwithstanding the requirements of this subdivision (7)(8) 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 in excess of the limitations provided for in subdivision (12)(E) of this subsection, or against the assets of any other protected cell.

(8)(9)  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 or two or more affiliated ceding insurers, 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)(10)  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)(11)  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)(12)  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.

(A)  Except as otherwise modified in this section, the terms and conditions set forth in chapter 145 of this title pertaining to administrative supervision of insurers and the rehabilitation, receiverships, and liquidation of insurers apply in full to special purpose financial captive insurance companies or any of the special purpose financial captive insurance company’s protected cells, independently, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the special purpose financial captive insurance company or another protected cell that is not otherwise insolvent.

(B)  Notwithstanding the provisions of chapter 145 of this title, and without causing or otherwise effecting the conservation or rehabilitation of an otherwise solvent protected cell of a special purpose financial captive insurance company and subject to the provisions of subdivision (G)(v) of this subdivision (12), the commissioner may apply by petition to the superior court for an order authorizing the commissioner to conserve, rehabilitate, or liquidate a special purpose financial captive insurance company domiciled in this state on one or more of the following grounds:

(i)  embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the special purpose financial captive insurance company intended to be used to pay amounts owed to the ceding insurer or the holders of special purpose financial captive insurance company securities; or

(ii)  the special purpose financial captive insurance company is insolvent; or

(iii)  the holders of a majority in outstanding principal amount of each class of special purpose financial captive insurance company securities attributable to each particular protected cell requests or consents to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter.

(C)  Notwithstanding the provisions of chapter 145 of this title, the commissioner may apply by petition to the superior court for an order authorizing the commissioner to conserve, rehabilitate, or liquidate one or more of a special purpose financial captive insurance company’s protected cells, independently, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the special purpose financial captive insurance company generally or another of its protected cells, on one or more of the following grounds:

(i)  embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the special purpose financial captive insurance company attributable to the affected protected cell or cells intended to be used to pay amounts owed to the ceding insurer or the holders of special purpose financial captive insurance company securities of the affected protected cell or cells; or

(ii)  the affected protected cell is insolvent; or

(iii)  the holders of a majority in outstanding principal amount of each class of special purpose financial captive insurance company securities attributable to that particular protected cell request or consent to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter.

(D)  Except where consent is given as described in subdivisions (B)(iii) and (C)(iii) of this subdivision (12), the court may not grant relief provided by subdivision (B) or (C) of this subdivision (12) unless, after notice and a hearing, the commissioner, who shall have the burden of proof, establishes by clear and convincing evidence that relief must be granted.  The court’s order may be made in respect of one or more protected cells by name, rather than the special purpose financial captive insurance company generally.

(E)  Notwithstanding another provision in this title, regulations adopted under this title, or another applicable law or regulation, upon any order of conservation, rehabilitation, or liquidation of a special purpose financial captive insurance company, or one or more of the special purpose financial captive insurance company’s protected cells, the receiver shall manage the assets and liabilities of the special purpose financial captive insurance company or the applicable protected cell pursuant to the provisions of this subchapter.  The assets attributable to one protected cell shall not be applied to the liabilities attributable to another protected cell, 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.  Recourse to the special purpose financial captive insurance company’s general account in connection with the conservation, rehabilitation, or liquidation of a protected cell shall be limited to the greater of the amount of assets in the general account as of the date such proceeding is commenced or the required minimum capital for the general account as of the date such proceeding is commenced.  Assets attributable to one protected cell or the special purpose financial captive insurance company’s general account shall not be set off against the liabilities attributable to another protected cell or to the special purpose financial captive insurance company’s general account.  Relief shall not be granted nor shall any order be issued based on equitable theories of recovery, including substantive consolidation, equitable subordination, or recoupment, to attach or seize the assets of any solvent protected cell for the benefit of another protected cell or special purpose financial captive insurance company, or to pierce the corporate veil of any protected cell, in connection with the conservation, rehabilitation, or liquidation of a special purpose financial captive insurance company or one or more protected cells, unless such equitable theories, attachment, seizure or corporate veil piercing would apply to such cell if it were a special purpose financial captive insurance company without separate cells.

(F)  With respect to amounts recoverable under a reinsurance contract, the amount recoverable by the receiver of a special purpose financial captive insurance company must not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the ceding insurer, notwithstanding another provision in the contract or other documentation governing the insurance securitization.

(G)  Notwithstanding the provisions of chapter 145 of this title or other laws of this state:

(i)  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 with the ceding insurer, including any payment by a special purpose financial captive insurance company made pursuant to a security issued by a special purpose financial captive insurance company with respect to a protected cell, or any action or proceeding against a special purpose financial captive insurance company or its assets.

(ii)  The commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to a special purpose financial captive insurance company, and any order issued by the court, does not prohibit the payment by a special purpose financial captive insurance company made pursuant to a security issued by a special purpose financial captive insurance company with respect to a protected cell or special purpose financial captive insurance company contract or the special purpose financial captive insurance company from taking any action required to make the payment.

(iii)  A receiver of a ceding insurer may not void a nonfraudulent transfer by the ceding insurer to a special purpose financial captive insurance company of money or other property made pursuant to a reinsurance contract.

(iv)  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 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 issued with respect to a protected cell, or a special purpose financial captive insurance company security.

(v)  In the event of an insolvency of a special purpose financial captive insurance company where one or more protected cells remain solvent, the commissioner shall separate the special purpose financial captive insurance company’s solvent protected cells from the insolvent special purpose financial captive insurance company, shall allow on petition of the sponsor for the conversion of such solvent protected cells into one or more special purpose financial captive insurance companies, and shall issue such orders as the commissioner deems necessary to protect the solvency of the remaining solvent protected cells.  In the event of an insolvency of a protected cell, the special purpose financial captive insurance company’s assets shall be accounted for and managed in compliance with subdivision (E) of this subdivision (12) and the other laws of this state.

(H)  Subdivision (G) of this subdivision (12) does not prohibit the commissioner from taking any action permitted under chapter 145 of this title with respect only to the conservation or rehabilitation of a special purpose financial captive insurance company with protected cell or cells, provided the commissioner would have had sufficient grounds to seek to declare the special purpose financial captive insurance company insolvent; subject to and without otherwise affecting the provisions of subdivision (G)(v) of this subdivision (12).  In this case, with respect to the solvent protected cell or cells, the commissioner may not prohibit payments made by the special purpose financial captive insurance company pursuant to the special purpose financial captive insurance company security, reinsurance contract, or otherwise made under the insurance securitization transaction that are attributable to these protected cell or cells or prohibit the special purpose financial captive insurance company from taking any action required to make these payments.

(I)  With the exception of the fulfillment of the obligations under a special purpose financial captive insurance company contract, and notwithstanding another provision of this title or other laws of this state, the assets of a special purpose financial captive insurance company, including assets held in trust, 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 title for any purpose, including, without limitation, distribution to creditors of the ceding insurer.

Sec. 12.  8 V.S.A. § 3614(a) is amended to read: 

§ 3614.  BOARD OF DIRECTORS

(a)  The board of directors of the association shall consist of not less than five nor more than nine persons serving, at least three of whom shall be persons who are officers, directors, or employees of insurance companies incorporated under the laws of this state, unless there are fewer than three such companies, in which case there shall be one director for each such company.  The directors shall serve terms as established in the plan of operation.  The members of the board shall be selected by member insurers subject to the approval of the commissioner.  Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the commissioner.  Not less than one-half of the directors shall be persons who are officers, directors or employees of insurance companies incorporated under the laws of this state.

Sec. 13.  EFFECTIVE DATE

This act shall take effect July 1, 2008, except for Sec. 2, which shall take effect upon passage.

Thereupon, pending the question, Shall the Senate concur in the House proposal of amendment?, Senator Cummings moved that the Senate concur in the House proposal of amendment with an amendment as follows:

By striking out Sec. 13 in its entirety and inserting in lieu thereof Secs. 13, 14 and 15 to read as follows:

Sec. 13.  33 V.S.A. § 1908a is amended to read:

§ 1908a.  VERMONT PARTNERSHIP FOR LONG-TERM CARE

(a)  The secretary of human services or his or her designee, in consultation with a manner agreed to by the commissioner of banking, insurance, securities, and health care administration, shall establish by rule on or before January 1, 2009 the Vermont partnership for long-term care program.

(b)  The program shall provide Medicaid extended coverage to an individual receiving long-term care services if there is federal participation for such coverage, and if the individual:

(1)  is or was covered by a long-term care insurance policy issued under chapter 154 of Title 8 that provides coverage for three years of long-term care services in an amount which, in combination with other resources available to the individual, is sufficient to permit the individual to pay for the individual's own care while the policy remains in force and that is precertified by the department of banking, insurance, securities, and health care administration pursuant to subsection (c) of this section; and

(2)  meets any other requirements for approval of participation under the program; and

(3)  has exhausted coverage and benefits under the long-term care insurance policy as required by the program.

(c)(1)  The department of banking, insurance, securities, and health care administration shall adopt rules for precertification of long-term care partnership policies, and for the information needed to evaluate the partnership program, and to establish training requirements for producers who sell any long-term care insurance policies.

(2)  The department of banking, insurance, securities, and health care administration shall consider whether all precertified policies should require:

(A)  protection against loss of benefits due to inflation;

(B)  coverage of individual assessment and case management;

(C)  a minimum level of covered benefits, including coverage of longterm care services as defined in subsection (g) of this section;

(D)  the option of a nonforfeiture benefit;

(E)  a level premium;

(F)  information to the purchaser about available consumer information and public education provided by the department of banking, insurance, securities, and health care administration and the office of Vermont health access; and

(G)  program information, using the uniform data set developed by other states with long-term care partnership programs, and reports necessary to document the extent of the Medicaid resource protection offered and to evaluate the partnership for long-term care.

(2)  The department of banking, insurance, securities, and health care administration shall not require all long-term care partnership insurance policies to be federally tax-qualified long-term care insurance policies precertify a policy as a partnership policy only if:

(A)  the policy covers an insured person who was a resident of Vermont at the time coverage first became effective under the policy;

(B)  the policy meets the definition of a “qualified long-term care insurance policy” pursuant to Section 7702B(b) of the Internal Revenue Code of 1986, as amended;

(C)  the policy issue date is subsequent to the date of approval of the state plan amendment establishing the partnership program;

(D)  the policy meets the requirements of the specific components of the National Association of Insurance Commissioners’ long-term care insurance model act and model regulation listed in 42 U.S.C. § 1936p(b)(5), or satisfies such additional components as the commissioner of banking, insurance, securities, and health care administration determines to be beneficial to consumers;

(E)  the policy is consistent with Section 27 of the National Association of Insurance Commissioners’ long-term care insurance model regulation concerning the right to reduce coverage and lower premiums, or satisfies such additional components as the commissioner of banking, insurance, securities, and health care administration determines to be beneficial to consumers;

(F)  the policy includes inflation protection for purchasers aged 61 to 76 and compound annual inflation protection for purchasers under age 61; and

(G)  the issuer of the policy provides regular reports to the secretary, in accordance with regulations of the secretary, that include notification regarding when benefits provided under the policy have been paid and the amount of such benefits paid, notification regarding when the policy otherwise terminates, and such other information as the secretary determines may be appropriate to the administration of such partnerships.

(3)  The department of banking, insurance, securities, and health care administration shall not impose any requirement affecting the terms or benefits of qualified long-term care partnership policies unless the commissioner imposes such a requirement on all long-term care insurance policies sold in this state without regard to whether the policy is covered under the partnership or is offered in connection with such partnership.

(4)  The department of banking, insurance, securities, and health care administration shall adopt rules that require producers who sell any long-term care insurance policies to be trained in and demonstrate understanding of the protections offered to purchasers of long-term care insurance and how the insurance relates to public and private coverage of long-term care.  The rules shall require that every producer selling, soliciting, or negotiating any long-term care insurance complete a one-time training course and ongoing training every 24 months thereafter. The one-time training shall be specific to long-term care insurance and shall be no less than eight hours. The rules shall also require that every producer selling, soliciting, or negotiating any long-term care insurance complete no less than four hours of continuing education specific to long-term care insurance for every 24-month period thereafter as part of the continuing education requirements set forth in chapter 131 of Title 8. The producer training shall at a minimum satisfy the specific requirements set forth in chapters 131 and 154 of Title 8, section 9 of the National Association of Insurance Commissioners’ long-term care insurance model act, and such additional components as the commissioner of banking, insurance, securities, and health care administration determines to be beneficial to consumers. The rules shall also establish standards for producer commissions.

(5)  The department of banking, insurance, securities, and health care administration, in consultation with the department of disabilities, aging, and independent living, shall adopt rules establishing standards for coverage of long-term care services as defined in subsection (f) of this section. The rules shall establish minimum levels and durations of benefits that must be provided in every long-term care insurance policy.

(6)  The department of banking, insurance, securities, and health care administration shall adopt rules establishing procedures for the insured to appeal an adverse determination of the carrier concerning a denial of coverage under a long-term care insurance policy, reimbursement for long-term care services, rejection of an application or renewal of a policy for long-term care insurance, conversion of a long-term care policy, or the availability, delivery, or quality of long-term care services.

(7)  The department of banking, insurance, securities, and health care administration shall adopt rules establishing requirements related to offers to exchange partnership program policies for previously issued policies.

(8)  The department of banking, insurance, securities, and health care administration shall adopt rules establishing requirements for the personal worksheet that issuers of long-term care insurance policies present to applicants pursuant to 8 V.S.A. § 8084b.  The rules shall establish minimum asset levels that the personal worksheet will recommend as the minimum level suitable for the purchase of long-term care insurance.

(9)  The agency of human services through the department for children and families and the department of disabilities, aging, and independent living shall provide information and technical assistance to the department of banking, insurance, securities, and health care administration concerning the department of banking, insurance, securities, and health care administration’s role of assuring that any individual who sells a long-term care insurance policy under the partnership receives training and demonstrates evidence of an understanding of such policies and how they relate to other public and private coverage of long-term care. The department of banking, insurance, securities, and health care administration shall ensure that this information is incorporated into the producer training program.

(d)  The secretary or his or her designee may enter into reciprocal agreements with other states to extend the benefits of the Vermont partnership for long-term care program to Vermont residents who had purchased qualified long-term care insurance policies in other states.

(e)  The agency and the department of banking, insurance, securities, and health care administration shall make available consumer information regarding the long-term care partnership program.  The secretary and commissioner may allocate responsibilities for providing consumer information between the agency and department.

(f)  As used in this section:

(1)  “Long-term care services” includes means necessary or medically necessary diagnostic, preventative, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital. Such services include care, treatment, maintenance, and services:

(A)  provided in a nursing facility;

(B)  provided in a residential care home or assisted living residence;

(C)  provided by a home care services agency, certified home health agency, or long-term home health care program;

(D)  provided by an adult day care program;

(E)  provided by a personal care provider licensed or regulated by any other state or local agency; and

(F)  such other long-term care services as determined by the secretary or his or her designee for which medical assistance is otherwise available under the Medicaid program.

(2)  “Medicaid extended coverage” means eligibility for medical assistance without regard to the resource requirements of the Medicaid program resources in an amount equal to the amount of the benefits paid under the long-term care partnership policy and without regard to the an amount equal to the amount of the benefits paid under the long-term care partnership policy in any recovery of medical assistance from the estates of individuals and the imposition of liens pursuant to the requirements of the Medicaid program; provided, however, that nothing in this section shall prevent the imposition of a lien or recovery against property of an individual on account of medical assistance incorrectly paid.  Nothing in this section shall modify what medical assistance is covered by Medicaid.

Sec. 14.  STATE PLAN AMENDMENT

No later than July 1, 2008, the secretary of human services or his or her designee, in a manner agreed to by the commissioner of banking, insurance, securities, and health care administration, shall submit an application to the Centers for Medicare and Medicaid Services seeking approval of an amendment to the state Medicaid plan pursuant to 42 U.S.C. § 430.12 specifying that an amount equal to the benefits paid by certified long-term care insurance partnership policies shall be disregarded in Medicaid eligibility determinations and exempted from estate recovery.

Sec. 15.  EFFECTIVE DATE

This act shall take effect July 1, 2008, except for Secs. 2, 13, 14, and 15 (this section) which shall take effect upon passage.

Which was agreed to.

Committee of Conference Appointed

S. 133.

     The President announced a change in the membership of the Committee of Conference on the part of the Senate to consider the disagreeing votes of the two Houses upon Senate bill entitled:

     An act relating to the operation of a motor vehicle by junior operators and primary safety belt enforcement.

                                         Senator Scott

                                         Senator Sears

                                         Senator Shumlin


Committees of Conference Appointed

S. 350.

An act relating to energy independence and economic prosperity.

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

                                         Senator Lyons

                                         Senator MacDonald

                                         Senator Hartwell

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

H. 560.

An act relating to elimination of the offender work programs board.

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

                                         Senator Hartwell

                                         Senator Coppenrath

                                         Senator Scott

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

H. 691.

An act relating to executive and judicial branch fees.

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

                                         Senator Ayer

                                         Senator MacDonald

                                         Senator Maynard

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

H. 865.

An act relating to Vermont Milk Commission.

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


                                         Senator Kittell

                                         Senator Starr

                                         Senator Giard

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

H. 870.

An act relating to the regulation of professions and occupations.

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

                                         Senator Coppenrath

                                         Senator Ayer

                                         Senator Flanagan

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

H. 887.

An act relating to health care reform.

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

                                         Senator Racine

                                         Senator Mullin

                                         Senator White

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

H. 890.

An act relating to compensation for certain state employees.

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

                                         Senator White

                                         Senator Doyle

                                         Senator Bartlett

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


Rules Suspended; Bills Messaged

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

S. 133, S. 284, S. 350, H. 560, H. 691, H. 865, H. 870, H. 887, H. 888, H. 890.

Message from the House No. 65

     A message was received from the House of Representatives by Ms. Wrask, its Second Assistant Clerk, as follows:

Mr. President:

I am directed to inform the Senate the House has considered Senate bills of the following titles:

S. 112.  An act relating to victims compensation.

S. 244.  An act relating to self-storage facilities.

S. 246.  An act relating to electronic access to criminal and family court records.

S. 297.  An act relating to clarifying the definition of “stiff hitch” in the motor vehicle statutes.

And has passed the same in concurrence with proposals of amendment in the adoption of which the concurrence of the Senate is requested.

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

H. 885.  An act relating to developing consistent measurement standards for economic growth.

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

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

                                         Rep. Smith of Morristown

                                         Rep. Botzow of Pownal

                                         Rep. Kupersmith of South Burlington

Adjournment

On motion of Senator Shumlin, the Senate adjourned until ten o’clock in the morning.

 



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us