Updates
February 23, 2018

Vermont Legislative Update 2-23-2018

An analysis from DRM's Government & Public Affairs Team

Vermont Legislative Update Quick Links

Administration and Public Urge Slowdown of House Education Finance Plan

Businesses Argue for Flexibility in Energy Efficiency Programs

Where’s the Money?

House Committee Supports Targeted Act 250 Clarification

Strict Joint and Several Liability Bill on the Move

Committee to Approve Right to Repair Study

Bill Would Cap Credit Card Machine Lease Prices

Surety Companies, Agents Object to Transportation Bond Proposal

House Panel Undecided on Mental Health Funding Proposals

Hospitals and Insurers Support Bill-Back Proposal

Panel Receives Pushback on ASC Oversight

VITL Given a Lifeline

Panel Passes Bill to Expand Health Screenings Providers

Panel Advances Medicaid Credentialing Bill

Administration and Public Urge Slowdown of House Education Finance Plan

Tax Commissioner Kaj Samsom urged the House Ways and Means Committee on Tuesday to slow down its pursuit of a tax plan that would reduce the residential property tax rate for education, end income sensitivity for residential property taxes and create an education income tax. Samsom’s perspective was echoed by a parade of witnesses at a public hearing at the Statehouse.

Samsom said the proposed income tax, which would raise each tax bracket by an average of 1.65 percentage points, would increase the state’s marginal tax rate to the second highest in the country after California. He said the administration is concerned about attracting and retaining workers and outside investment, since the tax would apply to non-residents earning income in the state as well as residents.

After Wednesday’s hearing, the committee worked late in the week to redraft its proposal. Despite the opposition this week, it expects to move a bill by crossover.

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Businesses Argue for Flexibility in Energy Efficiency Programs

GlobalFoundries in Essex Junction would like more flexibility in how it invests in its state-required energy efficiency program. OMYA in Pittsford wants to manage its own program, and the Agency of Commerce and Community Development wants to establish a self-managed energy efficiency program for up to 20 non-residential consumers. The proposals have been under review over the past two weeks in the House Energy and Technology Committee as it considers H.739.

Energy efficiency is funded by an eight percent surcharge on electric bills, and spending is currently managed by Efficiency Vermont. GlobalFoundries and OMYA are the two largest consumers of electricity in the state and effectively manage their own programs. Their request to the legislature has a common element: each would like to count investments in productivity – more widgets produced per unit of energy used – as acceptable investments under the SMEEP program. The committee is expected to move a bill by the end of next week.

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Where’s the Money?

Revenue from a sales tax on aviation jet fuel has fallen from $1.7 million in fiscal year 2014 to $514,000 in fiscal year 2017 while enplanements statewide have remained relatively constant. Officials at the Vermont Department of Motor Vehicles are trying to find out why.

The data were revealed to lawmakers this week while they consider changing from a six percent sales tax on aviation fuels to a 28 cents-per-gallon excise tax to comply with federal law, which requires associated tax revenues to be spent on airport-related expenses. “Local option” sales taxes in some cities that host airports have accrued to the municipality, and the system needs to be corrected, according to the Federal Aviation Administration.

Aviation service companies have paid the tax on fuel sold to individual aircraft owners and most private companies; but lawmakers learned this week that more than five million gallons of jet fuel per year is delivered to major airlines at the Burlington International Airport without collecting a tax. The fuel is delivered by a service company that transports it from terminals in Albany but never owns the fuel. The fuel is purchased under a collective purchasing agreement among major airlines. Heritage Aviation is paid a service fee for delivery, but does not collect for the cost of the product or any taxes due.

The House Transportation Committee held a hearing on the matter on Friday morning, where Burlington airport officials and executives from Heritage Aviation explained their roles. The airlines were not represented. The committee asked for more information about the taxing situation of the major airlines within three weeks.

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House Committee Supports Targeted Act 250 Clarification

The House Natural Resources, Fish and Wildlife Committee appears poised to support a narrow bill that clarifies that brownfields under active remediation are exempt from new permit requirements and review by Act 250 regional commissions.

At issue is the cleanup of the former Jones & Lamson Co. campus in Springfield, a 500,000 square foot former machine tool manufacturing facility that is falling in on itself as the roof erodes, threatened to spread a mixture of toxic contaminants that already pollute the land under it. The Springfield Regional Development Corporation was about to embark on a cleanup covered by a corrective action plan when it was advised by the Act 250 District Coordinator that it would need an Act 250 permit to proceed.

State Brownfields Administrator Trish Coppolino told the committee on Friday that brownfield remediation projects are complex and often change. She said requiring new permits every time cleanup plans change would be hard to manage and impede the timely remediation of brownfield sites.

On Friday, lawmakers and state officials agreed that properties being remediated under corrective action plans have never required a new land use permit or an amendment to an existing permit. The committee agreed to support a bill, H.881, that would clarify the intent.

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Strict Joint and Several Liability Bill on the Move

The Senate Judiciary Committee reviewed another redraft of S.197 on Tuesday, and Committee Chair Sen. Dick Sears, D-Bennington, has scheduled a markup of the bill on Wednesday. The new draft contains a series of options regarding medical monitoring for the committee to consider. Interested parties are invited to comment on elements of the draft during Wednesday’s markup.

As introduced, S.197 would create strict, joint and several liability for damage to persons and property for anyone who releases a harmful substance into the environment, even if the release was permitted by law and not known to be harmful at the time of the release. The bill would also create a new cause of action for a person to recover the costs of medical monitoring for potential diseases.

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Committee to Approve Right to Repair Study

Responding to pressure from independent electronic repair companies, the Senate Economic Development, Housing and General Affairs Committee is close to passing a bill, S.180, that would create a task force to consider issues relating to legislation that would require manufacturers to make public the design of their products.

The task force would be charged with considering the scope of products to be included in a future bill; the economic costs and benefits of a right-to-repair law; costs to consumers; intellectual property concerns; and litigation risks.

The committee will consist of five members: two from the legislature, two from the administration and the Attorney General. It will be charged with meeting five times and submitting a report by Dec. 15.  

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Bill Would Cap Credit Card Machine Lease Prices

After hearing complaints from small business owners about lease prices and terms for credit card swipe machines, the Senate Economic Development, Housing and General Affairs Committee is close to passing a bill, S.206 that would impose a price cap on such leases. The bill would likely be the first time the legislature has imposed price regulation on a business-to-business transaction.

The bill would also impose a variety of disclosure requirements for such leases, including whether the consumer has an option to purchase the equipment; a disclaimer that the lessee may be able to purchase the equipment from another source; and contact information for questions, payments and repairs. Lessees would have the right to rescind a lease within three months from the date of receiving a copy of the executed lease.

The committee is expected to approve the bill next week.

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Surety Companies, Agents Object to Transportation Bond Proposal

The Agency of Transportation has proposed a significant reduction in the bonding requirement for state transportation projects. Under current law, private contractors are required to post a surety bond for any project of $100,000 or more. The AOT proposal would increase the bond threshold requirement to $1,000,000.

The national Surety and Fidelity Association argued in testimony before the House Transportation Committee this week that the higher bond threshold would place Vermont far above the required threshold of every other state, and would place the state at significant financial risk in the event of contractor default. The proposal is also opposed by the Vermont Insurance Agents Association.

AOT staff and Transportation Committee members expressed a willingness to consider alternative proposals.

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House Panel Undecided on Mental Health Funding Proposals

The House Committee on Health Care is still considering its position on the Department of Mental Health’s proposal to allocate $1.5 million to build a temporary forensic unit, although comments late Friday by Rep. Mary Hooper, D-Montpelier, suggested that the proposal may be rejected. The unit would house patients requiring hospital-level care who are being referred for a competency or sanity evaluation, those who have been found incompetent to stand trial or not-guilty by reason of insanity, and inmates who need psychiatric inpatient care.

DMH and mental health advocates say the unit is needed to reduce pressure on current facilities and waiting times for treatment beds and services. DMH Commissioner Melissa Bailey told the committee that hospitals struggle to deal with combined populations of forensic and civil mental health patients because best practices are different for the two populations. She said that having a separate forensic facility would allow for better staff training and patient treatment.

Committee Chair Rep. Bill Lippert, D-Hinesburg, questioned whether limited mental health care funding should be spent on a temporary forensics unit, which would necessitate further spending on a permanent facility in the future. He would also like to explore the option of expanding the number of Level One psychiatric inpatient beds in the state and will be working with the House Committee on Institutions to craft a proposal for his committee to review.

The committee has also not yet decided if it will support DMH’s proposed $400,000 appropriation for increased outreach services, but it will likely support expanding the number of secure residential beds from seven to 16, partially to avoid a federal funding claw-back. Final DMH budget recommendations to the House Appropriations Committee will be made next week.

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Hospitals and Insurers Support Bill-Back Proposal

The House Committee on Health Care this week agreed to support the Green Mountain Care Board’s proposed changes to the board’s authority to bill back the costs of certain regulatory activities to the entities it regulates after being told by the Vermont Association of Hospitals and Health Services, Blue Cross/Blue Shield, and MVP Health Care that they all “cautiously approve” of the proposal.The new shifted allocations require that accountable care organizations participate in the assessment now that the board has oversight of ACO budgets.

VAHHS noted that the ACO’s will pass through their bill-back to their member hospitals, increasing the amount of bill-back that the hospitals are responsible for, and suggested that the ACO bill-back amount be allocated through the entire regulated industry, rather than have a separate ACO line item. VAHHS and BCBS also urged the committee to require continued review to ensure that the bill-back allocations truly reflect the resources used to regulate the hospitals and ACO’s. Although the committee decided to keep the separate ACO allocation, it agreed to include review language in the bill.

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Panel Receives Pushback on ASC Oversight

The Senate Health and Welfare Committee continued to take testimony this week on S.278, a bill to regulate ambulatory surgical centers. Sen. Claire Ayer, D-Addison, said she believes that ASCs should be regulated in the same manner as hospitals.

Vermont Association of Hospitals and Health Systems Vice President Devon Green testified on hospital regulations. She said there are generally two approaches a state can take to oversight:  health care as a commodity or health care as a public good. States that treat health care as a commodity provide minimal oversight. This approach supports competition, but according to Green can ultimately drive up health care costs. Vermont treats health care as a public good and emphasizes access to quality health services at costs that are affordable.

Department of Vermont Health Access Deputy Commissioner Michael Costa focused his comments on the provider tax section of the bill, which would add ASCs to the current list of providers who pay the tax. Providers pay a tax to the state, which then uses the money as the state’s necessary matching funds to bring in additional federal Medicaid money. Costa said the Scott Administration is opposed to any new taxes and fees. He said assessment of the provider tax is complicated and an analysis would be needed to determine the appropriate tax base, how to keep it revenue neutral, and the impact on provider reimbursement rates.

Kara Newbury and Alison Murphy of the Ambulatory Surgery Center Association testified in opposition to the legislation, saying that many of its provisions  are more limiting than federal regulations. They opposed the establishment of a provider tax and the licensing fees contained in the bill, saying it will make it difficult for ASCs to open in the state and provide a cost-effective option for patients. “The imposition of the provider tax on ASCs as is proposed in SB 278 will threaten their continued economic viability and could lead to higher health care costs for Vermont taxpayers. ASCs offer patients high-quality, cost effective care and many of the provisions outlined in SB 278 will do irreparable harm to any ASC in Vermont,” said Newbury.

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VITL Given a Lifeline

A comprehensive and independent review of the Vermont Health Information Exchange found that it is suffering from serious financial and administrative problems and failing at its core mission – to make patient information available to providers. On Thursday, the House Health Care Committee passed H.901, a bill that holds the Department of Vermont Health Access accountable for the program. The language was recommended by the Scott Administration.

The bill requires a work plan to be delivered by May that defines the goals that DVHA and VITL must achieve for continued funding. It requires the development of a statewide Health Information Technology Plan as well as a contingency plan that would be triggered if DVHA and VITL cannot implement the recommendations outlined in the work plan.

The bill repeals (effective July 1, 2019) the VITL statute and eliminates the exclusivity of VITL as the state’s only option to operate the Vermont Health Information Exchange unless the legislature affirmatively removes the repeal. Kristina Choquette, Chief Operating Officer for VITL, testified in opposition to this section of the bill, saying it will be difficult for VITL to recruit and retain qualified staff if there is a possibility they will no longer be in existence.

The bill extends the portion of the health care claims tax that is dedicated to health information technology to July 1, 2019. This is a 0.999 percent tax on all health insurance claims paid by health insurers for their Vermont members.

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Panel Passes Bill to Expand Health Screenings Providers

The Senate Health and Welfare Committee on Thursday passed S.165, a bill that would expand the categories of licensed health care professionals who can perform pre-employment health screenings for hospital employees. Pre-employment screenings are used to screen individuals for risk factors that may limit their ability to perform a job safely and effectively.

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Panel Advances Medicaid Credentialing Bill

The Senate Health and Welfare Committee on Friday advanced S.282, a bill that requires the Department of Vermont Health Access to complete the screening and enrollment of applicants seeking to be participating providers in the Medicaid program. Since early 2016, providers have experienced significant delays in enrollment in Medicaid. In some cases it has taken many months, which causes delays in payment for providers, who can hold claims, but not be reimbursed until final enrollment is completed. There are also patient care concerns because patients cannot fill prescriptions or be referred to other services until the ordering provider is enrolled as a participating provider.

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DRM’s Government and Public Affairs professionals help the state's critical industries to achieve key objectives involving government, the press and the public. For more information about the content of this Legislative Update, please contact any team member:

 
John Hollar | Trey MartinJoseph Choquette IIILucie GarandRebecca Lewandoski

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