BILLS THAT PASSED THE HOUSE AND SENATE IN 2018

BUDGET AND TAXES

H.924 - STATE FY19 BUDGET
The FY19 budget bill, H.924, spends just over $5.8 billion and has a growth rate of less than one percent over last year’s budget. The bill passed with overwhelming support in the House by a 117-14 vote and a unanimous Senate vote of 29-0. Click here for a list of the highlights of the bill.

The governor stated publicly that he intends to veto the bill because it relies on revenue from increased statewide property tax rates rather than using one-time funds to keep the statewide property tax rates at last year’s level. Lawmakers chose to direct one-time tobacco money along with general funds toward paying down teacher retirement, paying for opioid treatment and filling reserve accounts, among other things. Click here for a list of the General Assembly’s one-time appropriations.

If the Governor vetoes the bill, lawmakers will have to pass a new budget in the upcoming special session or take other action before the beginning of the new fiscal year starting July 1, 2018 as there is no precedent or authority for Vermont government to operate without a budget.

H.911 - INCOME TAX & EDUCATION FINANCE

H.911, makes a number of changes to Vermont’s personal income tax laws and the education financing system. The governor has stated he will veto the bill because it increases the statewide residential and non-residential tax rates. Those portions of the bill will likely change during the upcoming special session. However, at a recent press conference the governor stated he can live with most of the rest of the bill, including:

• Changes to Vermont’s personal income tax law to shield Vermonters from an estimated $30 million personal income tax increase that would otherwise occur as a result of changes to federal income tax laws. Click here for the personal income tax changes made in H.911.

• Revenue-neutral reallocations to Education Fund and General Fund revenues by eliminating the General Fund Transfer to the Education fund, moving certain Education Fund expenses to the General Fund, and committing 100 percent of the sales and use tax proceeds and 25 percent of the meals and rooms tax to the Education Fund.

• Creation of a Vermont Tax Structure Commission, consisting of three to five members that will work for two years to review Vermont’s income taxes, consumption-based taxes, the education financing system, tax expenditures, and property and asset-based taxes guided by a goal of “a tax system that provides sustainability, appropriateness, and equity.” The commission’s final report will be due in January 2021. $500,000 is in the budget to fund the commission.

• Creation of a Staff-to-Student-Ratios Task Force, which must report by December 15, 2018, on its findings regarding “optimum” staff-to-student ratios.

Click here for a summary of the bill.

BUSINESS REGULATION

S.289 - NET NEUTRALITY
S.289 deals with net neutrality - the concept that internet service providers should not block, throttle or offer paid prioritization for lawful content. The Senate hurriedly passed a version of S.289 early in the session that required companies providing broadband service to state government to be net neutral. The House opted for a version that required the Attorney General’s Office to review the federally required disclosures broadband providers make concerning how they operate their networks and then indicate on its website whether those providers comply with the principles of net neutrality. The conference committee chose to merge the two versions of the bill but pushed the effective date for the procurement piece out to April 15, 2019 or whenever the governor’s executive order on net neutrality is revoked and rescinded, whichever is sooner. This last-minute trigger language could become problematic as the state is likely to face a lawsuit over the executive order and if the order is rescinded as a result of that suit, the language in S.289 would be go into effect. It remains to be seen whether the governor will sign the bill.

H.764 - DATA BROKERS
H.764 passed both chambers on the last day of the session after being revised in a conference committee. The bill is directed at “data brokers,” which are defined as businesses that collect and sell or license information about people, but who do not have a direct relationship with the people whose information they collect, sell or license. The central feature of the bill is a requirement that data brokers register with the Secretary of State and provide various items of information in doing so. Additionally, the bill removes the ability of credit reporting agencies to charge fees for ‘freezing” one’s credit history (which was a response to the Equifax data security breach), prohibits the acquisition of data containing personal information for fraudulent or illegal purposes and imposes technical and operational standards on data brokers relative to maintaining the security of the data they hold from unauthorized acquisition by third parties. Because the bill imposes a new fee Governor Scott has indicated he may veto it.

H.593 - AUTOMATIC RENEWAL
H.593 would require companies offering consumer contracts to make the consumer sign a separate agreement in order for the contract to renew automatically. It would also require businesses to provide consumers with notice when the automatic renewal date is approaching. The bill would affect numerous businesses and services both in Vermont and nationally as most consumer contracts have automatic renewal provisions in the internet age. It would also affect business to business contracts as businesses included in the definition of “consumer” in Vermont law.

TRANSPORTATION

S.272 - DMV MISCELLANEOUS
S.272, the DMV Miscellaneous bill, typically a sleeper of a bill, was one of the last bills to pass this year as it was held up over the issue of primary enforcement of the adult seat belt law - the same issue that held up the T-Bill (H.917) as described above. The final DMV Misc. bill is not available as of this writing but a few highlights include:

• Changes to Vermont’s motor vehicle safety program including limiting it to parts or systems that are relevant to the safe operation of a vehicle and requiring DMV to adopt rules on the issue.

• A provision that deletes “cash price” from a motor vehicle dealer record or sales form.

• Amendments to Vermont’s lemon law related to recreational vehicles and stating that certain standard vehicle manufacturer contract provisions related to a consumer’s rights under Vermont’s lemon law and lemon law settlements are deemed void as contrary to public policy.

H.917 - T-BILL
The annualtransportation spending bill is usually a relatively non-controversial piece of legislation. It authorizes the Agency of Transportation to implement the transportation program and includes miscellaneous transportation issues like buying new vehicles for the fleet and naming bridges. The T-bill rarely provokes partisan politics and the only time in recent history the T-bill stirred up controversy was during the debate a few years back on whether to raise the gas tax. For these reasons it came as a surprise that H.917, the 2018 version of the T-Bill, almost died in the final days of the session. The uncharacteristic volatility of H.917 stemmed from a strong disagreement between the House and Senate Transportation committees on the seatbelt law. Since January the House Transportation committee stated publicly that it intended to make violation of the seatbelt law a primary offense, meaning police could pull a motorist over for not wearing a seatbelt. Currently the seatbelt law is a secondary office. You can get a ticket for not wearing a seatbelt, but only if you’ve been pulled over for another offense. The Senate Transportation committee was adamantly opposed to changing the law and the disagreement resulted in the two sides refusing to even meet with each other to negotiate the bill until the final days of the session. Ultimately the Senate prevailed and the seatbelt law remains a secondary offense. H.917 passed and authorizes a $612 million transportation program that includes $104 million in paving, $95 million in bridge work and $29 million for public transit.

LABOR & EMPLOYMENT

S.40 - MINIMUM WAGE
This bill proposes to increase the minimum wage to $15 per hour by 2024. Governor Scott has said that increasing the minimum wage does not fit within his “affordability agenda” and he is expected to veto S.40. Click here for the text of the bill as it passed the House and Senate.

H.196 - PAID FAMILY LEAVE
H.196 establishes the Parental and Family Leave Insurance Program, funded by a payroll tax of 0.136 percent on the first $150,000 of an employee's wages. The revenue funds the Parental and Family Leave Insurance Special Fund that allows Vermont employees of businesses with 10 or more employees who work for an average of at least 30 hours per week to take up to 12 weeks of paid family leave for the birth or adoption of a new child or six weeks for family illness. Employees would receive 70 percent of their normal salary during qualifying leave. Governor Scott has indicated that he is likely to veto H.196.

H.294 - PAY HISTORY
H.294 prohibits employers from asking a prospective employee about their current or past compensation. It does not prohibit a prospective employer from inquiring about a prospective employee’s salary expectations or requirements, or from providing information about the wages, benefits, compensation, or salary offered in relation to a position. Governor Scott signed H.294 into law on May 11. The final version of the bill can be read here.

HEALTHCARE

S.175 - DRUG REIMPORTATION

S.175, signed into law by Governor Scott on May 16, 2018, allows the state to import drugs from Canada. This has been a priority for Senator Sanders for years. The Senator believes it is one way to ensure Vermonters are able to obtain the cheapest drugs available. While the law creates the framework for the reimportation of drugs from Canada it does not grant the state the authority to start to do so until the state obtains a waiver from the federal government. Given the current environment in DC no one is expecting that permission will be granted from the federal government anytime soon. Click here for a link to the text of the bill.

S.261 - CHILDHOOD ADVERSITY

S.261, An act relating to ensuring a coordinated public health approach to addressing childhood adversity and promoting resilience, addresses the issue of “childhood adversity,” defined as experiences that are traumatic to children such as experiencing violence. The bill creates the position of Director of Trauma Prevention and Resilience Development within the Agency of Human Services “for the purpose of directing and coordinating systemic approaches across State government that build childhood resilience and mitigate toxic stress by implementing a public health approach.” The bill begins to link these AHS childhood adversity efforts with the healthcare system, including with the Blueprint for Health and Accountable Care Organizations. Here is the link to the text of the bill.

H.912 - GREEN MOUNTAIN CARE BOARD BILL

H.912, An act relating to the health care regulatory duties of the Green Mountain Care Board (GMCB), amends the statutes that govern the GMCB, including the Certificate of Need (CON) statutes. The bill contains a directive to Accountable Care Organizations (ACOs) to implement fair and equitable payments between comparable participating providers across all practice settings, under certain conditions. The bill revises the GMCB bill-back formula. Finally, the bill directs the Agency of Human Services to create a working group to develop recommendations regarding whether and to what extent freestanding health care facilities, such as ambulatory surgical centers and urgent care clinics, should be licensed and regulated. Click here for a link to the text of the bill as it passed the House and Senate.

S.165 - PRE-EMPLOYMENT SCREENING FOR HOSPITAL EMPLOYEES

S.165 amends the license requirements for hospital that require all employees to have a pre-employment screening. Previously, employees were required to have a pre-employment screening by a licensed physician. S.165 adds licensed physician assistants and licensed advanced practice registered nurses, or a designee acting under the direction of one of the licensed healthcare professionals to the list of people who can perform pre-employment screenings.

GUN LEGISLATION
The centerpiece of the 2018 legislative session was the enactment of gun safety legislation and the impassioned debate that preceded it. Prompted by the tragic events in Parkland, Florida, and events averted in Vermont, the legislature passed and Governor Scott signed three bills that imposed regulations on firearms and allowed for the seizure of weapons in certain domestic violence and extreme risk situations. The governor and many lawmakers received heavy criticism for their support of the legislation. They also received praise from many who don’t traditionally support conservative politicians. It will be interesting to see how the gun debate will impact the 2018 election.

S.55 was by far the most controversial of the gun safety bills. S.55 requires background checks for private gun sales. Exchanges between family members are exempt. The bill also raises the age at which a person can purchase a firearm to 21, bans “bump-stocks” and limits handgun and rifle magazines to 15 rounds and 10 rounds respectfully.

S.221 allows law enforcement officials to seize weapons from individuals deemed to be an “extreme risk” to themselves or others. Upon receiving an extreme risk order from a judge, the weapons can be held for up to 60 days.

H.422 allows law enforcement officials to seize weapons from someone charged with domestic violence. A court order is not required.

ENERGY & ENVIRONMENT

S.260 - WATER QUALITY
S.260, which deals with water quality, went back and forth between the Senate and House four times before being passed on the final day of the session. The bill started out in the Senate providing for studies as to how to sustainably fund the state’s efforts to improve water quality once the currently available funds from last year’s capital budget appropriation are spent. The House then amended the bill to affirmatively raise the state’s rooms and meals taxes. The House also added provisions authorizing ANR to deem a water body to be in crisis and to take immediate steps to alleviate the crisis, and designating Lake Carmi to be in crisis. The Senate then removed the House’s increase to the rooms and meals tax and instead added language extending the existing one penny fee on motor fuels and the existing fee on underground storage tanks, both of which go to the the petroleum cleanup fund, by another ten years. The House accepted those changes, but added language from another bill concerning mercury containing components in motor vehicles, which the Senate then accepted. The fact the bill went through so many changes is due to governor Scott’s indication that not only would he veto any bill containing new or increased taxes and fees, but that he would also not accept any study about new or increased fees and taxes in the future.

H.739 - SMEEP
H.739 makes updates to the self managed energy efficiency program (SMEEP), which is designed for large users of electricity.

S.285 - SOLID WASTE & UNCLAIMED DEPOSITS
S.285, makes numerous changes to Vermont’s universal recycling law and other solid waste laws. The bill also has the state take the unclaimed bottle bill deposits from the beer and soda distributors and others such as Vermont brewers who sell their own beer. Those Vermont businesses have used the unclaimed deposits to partially cover their operating costs for implementing Vermont’s bottle bill. The bill directs the funds be used for water quality initiatives. The text of the bill is not available online at this time.

BUSINESS

S.85 - SMALL BUSINESS PORTAL
S.85 tasks the Secretary of State, in consultation with the Secretary of Commerce and Community Development and the Secretary of Digital Services to submit, by December 15, 2018, a plan for enhancing the Secretary of State’s existing web portal for businesses. The goal of the effort is to provide for “one stop shopping” for businesses that need to interact with state government relative to business registration in the state, paying taxes and fees and otherwise obtaining information such as permitting requirements.

H.710 - BEER FRANCHISES
This bill allows a “small” brewer, defined as a brewer making not more than 50,000 barrels of beer per year and whose products consist of 3 percent or less of its distributor’s annual sales by volume, to terminate a franchise agreement with its distributor for “no cause” if the brewer pays the distributor “compensation.” Currently the statute requires the brewer to show “good cause” to terminate a franchise agreement. The bill applies to new franchise agreements entered into after the effective date of the act (1/1/19) immediately, but doesn’t apply to retroactively to existing franchise agreements that were in effect on the effective date of the act until July 1, 2022, to allow for a transition period. Click here for the text of the bill.

S.105 - CONSUMER CONTRACTS
S.105 - an act relating to consumer justice enforcement - provides that certain, specified types of contract provisions, such as a waiver of one’s right to seek punitive damages, are presumed to be unconscionable and thus unenforceable. Entities that include these clauses in their agreements face a $1,000 penalty per violation. Businesses and entities from the the technology, telecommunications, outdoor recreation and non-profit community have raised concerns about the S.105’s prescriptive and all-encompassing nature.

ACT 127 (H.333) - GENDER NEUTRAL BATHROOMS
Effective July 1, 2018, any “single-user toilet facility,” which is defined as a single-occupancy restroom with an outer door that can be locked by the occupant, that is in a public building or a place of public accommodation must be made available for use by persons of any gender. A single-user toilet facility may be identified by a sign, provided that the sign marks the facility as a restroom and does not indicate any specific gender. Here is a link to Act 127 that the Governor signed into law on May 11, 2018.

MISCELLANEOUS

S.269 - BLOCKCHAIN
S.269 deals with blockchain technology. The bill establishes the concept of personal information protection companies - businesses that are organized for the primary purpose of providing personal information protection services to customers; directs the Department of Financial Regulation to review the potential application of blockchain technology to the provision of insurance and banking; creates a corporate entity called a blockchain-based limited liability company (BBLLC); and allows the Agency of Commerce and Community Development to organize and hold a fintech summit to explore opportunities to promote the technology. Click here to read the final version of S.269.

H.859 - LEASE LAND
H.859 deals with so-called “lease land,” which are a historical anachronism dating from the time before Vermont became a state in 1791. Beginning with New Hampshire Colonial Governor Benning Wentworth in the mid 1700s and continuing into the late 1700s when new towns were chartered, certain portions of them were granted to what were hoped to be public institutions such as county grammar schools. However, while such lands were technically conveyed to a public institution they were subject to perpetual leases (leases with terms that literally ran as long as “grass grows and water runs”) that could be bought and sold like ordinary real estate. The idea was that people who acquired a leasehold interest in lease land would effectively control the land, but have to pay annual rent such as $0.25 per acre that supported the public institution that “owned” the land. In the early 1800s towns were given charge of these lands and it has been over 150 years since anyone has paid rent. Instead, people who “own” lease land generally have no idea that, technically speaking they do not own the land, but instead own a perpetual leasehold interest in the land. H.859 provides that unless a town Selectboard votes otherwise beforehand on January 1, 2020 full title to leaseland will vest in the person(s) who hold the perpetual leasehold interest in the given parcel of land. In essence, the bill will wipe out the public institution’s ownership (subject to a perpetual lease) of the land unless a the town where the land is located votes to “keep it.”

H.526 - NOTARIES
H.526 completely replaces the state’s existing notary statutes, which date from the early 1800s and are fairly minimal in nature, concerning the commissioning of notary publics. The bill transfers the responsibility for commissioning notaries from the Assistant County Judges to the Secretary of State’s Office. Instead of four year terms notaries will now have two year terms. A person will now, for the first time, have to take a test in order to become a notary and will be subject to a continuing education requirement to remain a notary. The manner in which a notary is to perform a “notarial act” is specified and conflict of interest rules are spelled out.

COVERAGECO KERFUFFLE
In 2011, Vanu CoverageCo Inc. entered into an agreement with the state to provide wireless telecommunications service in a number of communities throughout Vermont via “roaming” agreements with cellular providers. The state spent several millions of dollars purchasing the radio equipment needed to create small cell sites on utility poles and then leased the equipment to CoverageCo. However, since its inception the CoverageCo network has financially struggled, and late this past winter it informed the state that it would likely cease operations in the near future. This news caused concerns about the loss of cell coverage that would result. In response, the FY2019 budget appropriates $100,000 to the Department of Public Service for its use in covering CoverageCo’s costs for E-911 geolocation service. In addition, the Capital Bill re-appropriates to the Department of Public Service $900,000 that had previously been given to the now disbanded Vermont Telecommunications Authority for the CoverageCo network but which was never spent. The Department will use that money to either fund the completion of the incomplete CoverageCo network or to entice another entity to purchase the network.

H.511 - MARIJUANA
The first bill to pass the House in the 2018 legislative session was H.511, which legalizes the possession of up to one ounce of marijuana for adults 21 years of age and older, and allows individuals to grow up to two mature marijuana plants and four immature plants. The bill does not allow for a tax and regulate system similar to those in Colorado and Washington State. Governor Scott signed H.511 into law on January 22, 2018.

SOME KEY BILLS THAT DIED IN 2018

S.53 - UNIVERSAL PRIMARY CARE
It was quite a roller coaster for S.53 this year. After passing unanimously out of the Senate Health and Welfare Committee the bill was gutted by the Senate Appropriations Committee and full Senate. Once it got over to the House, the Health Care Committee brought the bill back to its original form, only to see it referred to the House Appropriations Committee where it ultimately met its demise. The version of the bill passed by both the Health and Welfare and Health Care committees would have explicitly endorsed universal primary care.

TAX-AND-REGULATE MARIJUANA
An eleventh-hour push to implement a tax-and-regulate model for marijuana failed to pass muster in the House. Lt. Governor David Zuckerman worked behind the scenes to build support for the move, but many Democrats in the House voted against taking up the measure for consideration, despite apparent tri-partisan support for the idea. H.511, which implements a much more modest approach to legalization as outlined above, did pass and will be effective July 1, 2018.

H.143 - TRANSPORTATION NETWORK COMPANIES
H.143, An act relating to automobile insurance requirements and transportation network companies (TNCs), is a bill that proposes to create statewide regulations for TNCs, such as Lyft or Uber. Both companies have been operating in Vermont for the past few years but under a patchwork of municipal regulations. As these regulations can be different in Burlington, Barre, Newport, Rutland and Bennington they create a difficult regulatory environment in which to operate. The bill proposes to bring the entire state under one set of regulations while ensuring municipalities can still establish operating standards such as drop-off and pick-up locations. The bill died on last day of the session because House Republicans refused to suspend rules and take the bill off the notice calendar for action. Regulatory certainity for TNCs operating in Vermont will support statewide expansion of their services, which will be a major benefit to the state given the challenges that exist in finding reliable and affordable transportation in the rural parts of the state.

H.922 - TAX BILL
This bill contains a number of miscellaneous tax provisions. The most controversial provisions are an e-cigarette tax that was in both the House and Senate versions of the bill and a tax on opioids that the Senate added. The Senate passed the bill on Friday, May 11, and sent it to the House. The bill appeared on the House Notice Calendar on Saturday, May 12, and the House never took it up so it died when the House adjourned late that evening.

H.571 - LIQUOR & LOTTERY
Upon the recommendation of a summer study committee, this bill merges the Departments of Liquor and Lottery, a long-standing priority of Governor Scott, and makes changes to the way lotteries are operated by fraternal organizations. A conference committee came to an agreement on the bill and the Senate adopted the conference report on the last day of the session and messaged their action to the House. However, the House failed to act on the bill before adjourning so the bill died.