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Leonine: End of session gambit

Submitted by tim on

BREAKDOWN

Leonine Public AffairsThere is a storm brewing between Governor Scott and legislative leaders over how to bring the legislative session to a close.Bucking the custom since the early 1990’s, legislative leaders announced this week they do not intend to schedule a veto session in June for lawmakers to come back to Montpelier to try to override any gubernatorial vetoes. If the Governor vetoes the budget and the tax bill and no override session is scheduled, the Governor would be forced to call lawmakers back for a special session. A special session would be necessary because the state cannot deficit spend and without a property tax yield set by law there would be an estimated $400 million hole in the Education Fund. Significantly, in an override session lawmakers are limited to considering only those bills that are vetoed, while a special session allows lawmakers to start from scratch on bills and they can consider any topic they choose.

Not to be outdone, the Governor this week suggested lawmakers not adjourn until mid-June to give them time to consider and pass the education finance proposal the administration unveiled this week. With just the last days of this week remaining in the 18-week legislative session, it still remains unclear exactly how all this will shake out. What is clear however, is that tensions are high, and there’s no obvious path to a resolution that satisfies all parties.

Meanwhile, both the House and Senate have spent much of last week on the floor trying to work through all of the bills that are still moving. To cap it off, former speaker Shap Smith returned to the statehouse Friday to debate Governor Phil Scott’s chief of staff, Jason Gibbs. The debate was scheduled after a Twitter spat between the two over the governor’s proposed education tax plan. The much-hyped debate was broadcast on WDEV from the statehouse in front of a group of interested onlookers. Opinions on who won vary depending on the political persuasion of who you ask. Most agreed on the fact that all of what was said was predictable.
SENATE PASSES BUDGET
Last Tuesdaythe Senate gave its unanimous approval to a $5.85 billion budget for FY2019. The Senate-passed budget includes a two percent increase to home and community based providers, funding for the Brattleboro Retreat to make capital improvements to add 12 forensic mental health beds, $4.3 million to increase compensation to mental health clinical and direct service staff at the Designated Agencies and pays down the retired teachers’ pension liability by $10 million which the Treasurer says will save $30 million in interest payments. For a more extensive list of the highlights from the Senate budgetclick here.
INCOME TAX BILL
On Friday, by a 26-3 vote, the Senate gave preliminary approval to H.911, a bill related to personal income taxes and education finance. The bill makes changes to Vermont’s income tax laws in order to avoid collecting approximately $30 million more from Vermonters as a result of President Donald Trump's "tax cut" law. The Senate removed a $10,000 cap on a tax credit for charitable donations that the House added to Governor Scott’s proposed budget. The Senate also rejected the House’s proposal to add an education income tax surcharge that raised an estimated $59 million for the education fund. Instead, the Senate proposes to raise the statewide property tax rate to fill a hole in the education fund. Here is acomparisonof the income tax proposals from the governor, House and Senate.

AUTOMATIC RENEWAL
The House amended a bill that would change the way contracts and subscriptions are regulated in Vermont. H.593 is an omnibus bill that includes various provisions related to consumer protection. Sections one and two of the bill establish requirements about how contracts and subscriptions can be renewed. The bill has passed both the House and the Senate, and when the House amended the bill on the second go-around they added another consumer protection bill - H.482 - which was never released from the Senate Rules Committee. This move, along with a very minor amendment that would delay the auto renewal provisions six months, caused the Senate to call for a committee of conference. Conferees have yet to be appointed.

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 are included in the definition of “consumer” in Vermont law.
CONTRACTS BILL PASSES HOUSE
The House gave approval to an amended version of S.105 after considerable debate and discussion. The bill 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. A floor amendment exempting contracts drafted by members of Vermont’s outdoor recreational industry failed by a narrow vote. The bill will now go back to the Senate for its consideration of the changes made by the House.
CLEAN WATER
The House gave preliminary approval on Friday to S.260, a water quality bill. The House voted 84-55 to: (1) raise the rooms and meals tax by a quarter of a percent (from 9 to 9.25 percent), which would generate $4.55 million annually, and (2) take the unclaimed bottle deposits from beer and soda distributors who currently use them to partially cover their costs of operating the bottle bill, which is projected to raise $1.94 annually. In an attempt to skirt a veto, the bill delays these tax increases for one year so they will start in FY2020. This delay also gives a working group created in the bill time to come up with alternative taxes as many of those members voting "no" claimed there is not a nexus between unclaimed deposits or rooms and meals taxes and water pollution. Here is thefiscal note on S.260.
TRANSPORTATION BILL
H.917, the transportation bill, will be up for action on the Senate floor early next week. The Senate Finance and Senate Appropriations Committees approved the bill this week. The text of bill as the Senate Transportation, Finance and Appropriations Committees advanced it can be found starting on page 3065 of theSenate Calendarfor Friday, May 4.
FAIR REPAIR TASK FORCE
This week the House passed S.180, An act relating to the Vermont Fair Repair Act. The bill is aimed at making it easier for consumers to repair “consumer electronic products” such as replacing cell phone screens or batteries at independent repair shops rather than by the manufacturer of the products. The bill creates a Task Force consisting of a House member, a Senator, the Attorney General or designee, the Secretary of Commerce and Community Development or designee and the Secretary of Digital Services or designee. The Task Force is required to report its findings and recommendations for legislation to lawmakers byJanuary 15, 2019, including the scope of consumer electronic products that should be included and a review of legal issues, such as intellectual property, trade secrets and potential for conflict with federal law, among other things.
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Source: Leonine Public Affairs, Montpelier, Week 17. 5.4.2018.leoninepublicaffairs.com.Through a special arrangement with Leonine, Vermont Business Magazine republishes Leonine's weekly legislative report on vermontbiz.com.leoninepublicaffairs.com