Legislative Wrap Up, Issue 17

Legislative Wrap Up, Issue 17

Legislative Wrap Up, Issue 17

Author:Jane Clifford | Organization:EJC Consulting

Legislative Wrap Up Issue 17

In one of the most bizarre adjournments in recent history the 2019 Legislative session came to end, officially, Wednesday afternoon, May 29.  However, the House and the Governor had adjourned on Friday May 24, when Speaker Johnson realized there would not be an agreement reached on either paid family leave or the minimum wage between the House and the Senate.

Both the paid family leave and minimum wage bills had been priority legislation for the Democrats.  With the Democrats holding a super majority in both chambers and not delivering on key legislation what will the January 2020 legislative session look like?? 

BILLS THAT PASSED THIS SESSION

Below is a brief review of bills that were passed this session that pertain to agriculture, forestry, water quality, financing and employment.

If you are interested in a bill that is not listed you can go to the legislative website to see where that bill is at.  This is the end of the first year of the biennium, so if a bill did not pass it may come back next year.

H-82 An act relating to the taxation of timber harvesting equipment  

This bill exempts the sales and use tax on parts for or accessories sold with timber harvesting equipment. The Department of Taxes will publish guidance relating to the application of this exemption.  The Governor signed this bill on May 23 and it went into effect when it was signed.

H-514 An act relating to miscellaneous tax provisions

This bill makes numerous changes to Vermont’s tax laws. The bill permits the creation of merged property assessment districts to match merged school districts. The bill moves the collection and administration of the fire safety insurance tax, the direct placement insurance tax, and the surplus lines tax from the Department of Financial Regulation to the Department of Taxes. The bill makes numerous other changes, including changes to the current use lien system, the definitions of household income and homestead, tobacco taxes, and higher education investment plans. The bill clarifies the sales tax exemption for veterinary supplies and medication to include prescription medications, durable medical equipment and veterinary supplies. The bill also changes Vermont’s corporate income tax apportioning methodology for intangible sales to market-based sourcing, from cost-of- performance).

Fiscal Impact:

JFO estimates that this bill will generate an additional $170,000 in Fiscal Year (FY) 2020 and in future fiscal years. This revenue is split between the following funds.

  • General Fund: $190,000
  • Education Fund: -$20,000

In future fiscal years, the additional revenue for the General Fund is expected to grow to approximately $910,000 when the apportionment changes, in the corporate income tax, are fully realized.

H-525 An act relating to miscellaneous agricultural subjects

  • Amends the eligibility provisions for farm-to-school grants to provide that organizations administering or assisting the development of farm-to-school programs are eligible for grant assistance from the Farm-to-School Program.
  • Clarifies what constitutes good standing under the Agency of Agriculture enforcement authority for agricultural water quality requirements.
  • Amends the time frame by which nutrient management plans shall be required to be completed by a certified nutrient management technical service provider.
  • Establishes a Regenerative Farming; Vermont Environmental Stewardship Program at the Agency of Agriculture
  • Establishes a State conservation reserve enhancement program and an ecosystems incentive program at the Agency of Agriculture
  • Establishes an Agricultural Environmental Management Program  

o provides the farms of Vermont with State financial assistance to alternatively manage their farmstead, cropland, and pasture in a manner that will address identified water quality concerns

  • Requires commercial slaughterhouses to maintain records and would authorize the Secretary of Agriculture, Food and Markets to access records at a commercial slaughterhouse
  • Regulates raw milk when used as commercial feed/animals
  • Changes the regulations for the sale of raw milk
    • Off-farm sale and delivery of raw milk (not required to have pre-sale at farmer’s market)
    • New sign language required reading
      • “Consuming raw unpasteurized milk may cause illness, particularly in children, seniors, persons with weakened immune systems, and pregnant women.”
    • Seeds sold in Vermont containing genetically engineered
      • For agricultural seeds sold in Vermont, the manufacturer or processor distributing the seed in Vermont shall report annually on or before February 15 to the Secretary on forms supplied by the Secretary regarding the quantity of treated article seed and the quantity of untreated seed sold in Vermont during the previous calendar year
    • Requires a Clean Water Audit that includes the assessment of the capacity of the Department of Environmental Conservation to effectively administer and enforce agricultural water quality requirements on farms in the State
    • Provides the use of “pump out tanks” at fairs and other facilities that are not used more than 28 days in any calendar year
    • Creates a Legislative Study Committee on Wetlands to clarify State wetlands statutes and permitting under the statutes.
    • Creates the maximum fee, for the construction of any water quality improvement project in any Class II wetland or buffer, $200.00 per application.
      • As used in this subdivision, “water quality improvement project” means projects specifically designed and implemented to reduce pollutant loading in accordance with the requirements of a Total Maximum Daily Load Implementation Plan or Water Quality Remediation Plan, or pursuant to a plan for reducing pollutant loading to a water-body.
    • Creates Wetland Scientist Licensure Requirements

H-541 An act relating to changes that affect the revenue of the State

Bill Summary

This bill makes numerous changes to various state revenue sources. These include:

  • Limiting the capital gains exclusion to $350,000 in total capital gains exclusions. This would effectively limit the exclusion to capital gains of $875,000 or less.
  • Creating a new deduction for medical expenses within the personal income tax. Taxpayers could deduct any medical expenses beyond Vermont’s standard deduction and personal exemptions. This deduction would be limited for entrance and monthly fees for continuing care retirement communities.
  • Increasing the estate tax exclusion over two years. Beginning January 1, 2020, the estate tax exclusion rises from $2.75 million to $4.25 million. On January 1, 2021, the exclusion rises to $5 million.
  • Expanding the cap on the Affordable Housing Tax Credit and the First Time Homebuyer Tax Credit by $125,000 each.
  • Expanding the cap on the Downtown and Village Center Tax Credit program from $2.4 million to $2.6 million.
  • Changing the definitions of “operator” and “rent” to include online travel agencies (OTAs) and their associated transaction fees or commission
  • Expanding the tax base for the Property Transfer Tax and Clean Water Surcharge to include transfers of controlling interests in a property. This would include property transfers where a business or entity takes a majority ownership stake in a property without a title change.
  • Making significant changes to the Land Gains Tax such that it would apply to a small number of land transfers. Only land subdivided by the transferor within six years prior to the sale or exchange would be subject to the tax. This section also exempts land transferred in a downtown development district, a village center, or new town center development.

Fiscal Impact

This bill would generate an additional $4.83 million in total State revenues in FY20. This revenue impact is spread across different funds:

  •  $2.14 million in General Fund revenues.
  •  $930,000 in Education Fund revenues.
  •  $1.76 million in special fund revenues

H-542 An act relating to making appropriations for the support of government

BUDGET SUMMARY

Addresses Climate Change

  • The Legislature has made available approx. $17M to Weatherization Programs with $2.3M in the budget bill.
  • The Budget adds $2.9 million for EVs and charging stations; $1.7M* for Electric Vehicles and emissions incentive for low and moderate income individuals, adds funds for charging stations,
  • Provides $500K* for acquisition and conservation of forestlands that are important for carbon absorption and provides a legacy for future generations of Vermonters.
  • Extends the agreement between BGS and EVT for energy efficiency programs in State buildings.

Promotes Workforce and Economic Development

  • Adds $7.4M, including $5.8M base and $1.6M* one-time funds, for Childcare to support families and providers, including system investments* and workforce incentive pilots*.
  • Reserves $2M* for economic development and $1.54M* of funding for broadband investments, both determined in concurrent bills.
  • Restores $1M to VHCB base funding.
  • Funds a variety of forest and agriculture development programs including:
    • Grant writing assistance $75K*,
    • Working lands $1M* with half for the Dairy industry,
    • Farm-to-School $50K,
    • VOREC $100K*,
    • Logger safety and value-added forest products $120K*.
  • Vermont State Colleges supported with increase of $2.5M in base and $500K* one-time funds, 2+2 scholarship $18K, and $200K* associate degree pilot. Provides opportunities for students following alternative paths with Advancement Grants of 500K* through VSAC and adds $150K for DOL Summer Youth Employment Program.
  • Adds $100K* micro-business development, $5K* for Arts Council, and $25K* for USS VT. Adds $70K to provide services to New Americans through the Department of Labor.

Addresses the Needs of Children, Families, and Vulnerable Vermonters

  • Expands Medicaid dental coverage for adults beginning Jan. 1, 2020 to allow for two annual cleaning visits and a $1,000 annual cap on dental services. $1.08M total funding.
  • $1.4M investment in the child welfare system addresses caseload pressures including new social workers and other positions in addition to a rate increase for foster care.
  • Adds $1.3M for Parent Child Center master grant funding for the services they provide to young families.
  • Mental Health: Provides $1.5M (all funds) to place complex mental health patients in appropriate community placements, reducing the stress on hospitals. Funds operation of 12 new acute beds at the Brattleboro Retreat to come online in late 2020. Funds statewide peer support program $60K*.
  • Adds $2.5M to provide a benefit increase in the Reach Up Program.
  • Provides Families with a disabled parent an additional $38 a month.
    Adds $250K for nursing home residents to increase the personal needs allowance $25 a month, starting Jan. 1, 2020.
  • Maintains school support program for LGBTQ youth with $60K and provides funding for the Ethnic and Social Equity and Campus Sexual Harm bills.
  • Adds $50K for fentanyl testing strips.
  • Provides $85K for Human Right Commission outreach position, $89K for Deaf and Deaf/Blind services position, $25K for VT Legal Aid caseloads, $94,000 to address caseload pressures in public defense, and $85K for Court Interpreters in the Judiciary.

Shores Up Critical Provider Systems

  • Provides a $5.2M increase across entire system of mental health and developmental services and $1.5M* to begin the development of an electronic medical records system.
  • Provides $2.1M for a 2% increase for home and community service providers in the Choices for Care program. Adds funds for the SASH program to transition administration to the ACO as more Medicare lives are attributed.
  • Provides $375K* to the Department of Mental Health for emergency room security in small hospitals.
  • Funds $445K for Court Diversion.
    Provides $1M* for infrastructure improvements at the Parent Child Centers with report language.
  • Provides 5% increase for court security services
  • Provides $243K for a rate increase to local ambulance (EMS) service providers.

Maintains Basic Government Functions

  • Adds $500K* for statewide IT network upgrades and security investment through ADS.
  • Adds $948K* to support known State match requirements for past emergencies, floods, etc.
  • Adds $50K* Funds for mosquito control for total funding of $135K.
  • Funds Dual Enrollment program 50% from EF and 50% from the GF. Adjusts State-Placed Student line item to reflect funding needs in FY19 and FY20.
  • Funds Retirement/OPEB obligations for State employees and teachers of approx. $200M in general funds.

S-11 An act relating to limiting senatorial districts to a maximum of three members

This bill was passed and signed by the Governor on April 9 of this year.  The bill states that for the upcoming legislative reapportionment—which must occur during the 2021–2022 biennium—the Legislative Apportionment Board will be required to propose a Senate reapportionment plan with not more than three members in each Senate district, and the final Senate plan enacted by the General Assembly is to adhere to that three-member maximum.

S-58 An act relating to the State hemp program

This bill proposes to amend the requirements of the State hemp program to conform to federal requirements for the cultivation of hemp.

The Secretary shall establish and administer a State Hemp Program to regulate the growing, processing, testing, and marketing of industrial hemp and hemp products in the State.

S-96 An act relating to the provision of water quality services

The House and Senate voted overwhelmingly to support S-96 and now the bill will go to the Governor for his signature.  This bill provides funding that includes

6% of the room and meals tax                         $8 million

Property transfer tax                                       $6.1 million

Escheats (bottle redemption)                          $1 million

S-96 also provides a focus on water quality planning and targets.  The bill reorganizes the way non-regulatory funding is distributed for clean water projects and also works to provide more” on the ground” decision making.  Below is an outline of what S-96 contains.

Water Quality Implementation Targets

  • By not later than November 1, 2023, ANR shall adopt a schedule for implementing the requirements of this section in all other previously listed impaired waters not set forth in subdivision

Quantification of Pollution Reduction; Clean Water Projects

After listing a water as impaired, ANR shall publish a methodology for calculating pollution reduction values for a clean water project in that water. Pollution reduction values set by ANR are the exclusive method for determining a value.

Clean Water Service Provider; Responsibility for Clean Water Projects

  • ANR shall adopt rules to assign a clean water service provider to each basin in the Lake Champlain and Memphremagog basins to achieve the pollutant reduction values established by ANR and maintain clean water projects
  • ANR shall adopt guidance on a clean water service provider’s obligations. At a minimum, the guidance shall address how the service provider prioritizes and selects projects, how to account for co-benefits, how to manage administrative costs, and maintenance of projects.

Grant Programs

Water Quality Restoration Formula Grant Program

Water Quality Enhancement Grant Program

Developed Lands Implementation Grant Program

Municipal Stormwater Assistance Grant Program

Technical Assistance

ANR shall give technical assistance, upon request, to persons who receive a grant or subgrant to implement a clean water project.

Regional Planning Commission Authority

  • Amends the enabling statue for regional planning commissions to provide that RPCs shall have the authority, if designated as a clean water service provider under 10 V.S.A. § 924, to provide for the identification, prioritization, development, construction, inspection, verification, operation, and maintenance of clean water projects in an assigned watershed basin.

Clean Water Projects

  • When selecting clean water projects, RPCs shall prioritize projects identified in the basin plan and shall consider the pollutant targets provided by ANR and the recommendations of the basin water quality council.

Recommendations on Nutrient Credit Trading

  • On or before July 1, 2022, ANR shall submit to the General Assembly recommendations regarding implementation of a market-based mechanism that allows the purchase of water quality credits by water quality and other entities.
  • The report shall include information on the cost to develop and manage any recommended program.

Transition

  • Provides that until November 1, 2021, ANR shall implement the existing ecosystem restoration funding delivery program and shall not make substantial modifications to the manner in which that program has been implemented.
  • Until the plan required by 10 V.S.A. § 923(d)(2) has been fully implemented, ANR shall provide additional weight to geographic areas of the State not receiving a grant pursuant to 10 V.S.A. § 925 when making funding decisions for Enhancement Grants.

Land and Water Conservation Study

Requires ANR to convene a Land and Water Conservation Study Stakeholder Group to develop a recommended framework for statewide land conservation. On or before January 15, 2020, the Secretary shall submit the Stakeholder Group’s recommended framework for statewide land conservation to the General Assembly.

Investment Report

  • Beginning January 2023, requires the annual Clean Water Investment Report to include a summary of the administration of the grant programs established under this bill.
  • The report shall include a summary of whether the grant programs in S.96 adequately fund implementation of the Clean Water Initiative and whether the funding limits for Water Quality Enhancement Grants should be amended to improve implementation of the Clean Water Initiative.

Report of Secretary of Administration

Water Quality Report of Farms

On or before January 15, 2020, the Secretary of Administration, as the chair of the Clean Water Board, shall, after consultation with the Secretary of Natural Resources and the Secretary of Agriculture, Food and Markets, submit to the House Committees on Natural Resources, Fish, and Wildlife and on Agriculture and Forestry and the Senate Committees on Natural Resources and Energy and on Agriculture a report regarding the administration and funding of water quality projects on farms as part of the Clean Water Initiative.

S-160 An act relating to agricultural development/H-525 An act relating to miscellaneous agricultural subjects

  • Creates a Soil Conservation Practice and Payment for Ecosystem Services Working Group
  • Report on Stabilization and Revitalization of the Vermont Agricultural Industry
    • On or before January 15, 2020, the Secretary of Agriculture, Food and Markets, in consultation with the Vermont Farm-to-Plate Investment Program and industry stakeholders, shall submit to the Senate Committee on Agriculture and the House Committee on Agriculture and Forestry a report with recommendations for the stabilization, diversification, and revitalization of the agricultural industry in Vermont.
  • Dairy Marketing Assessment Report
    • On or before August 1, 2019, subject to available grants or other funding, the Secretary of Commerce and Community Development, in consultation with the Secretary of Agriculture, Food and Markets, shall contract with a qualified marketing consultant to conduct a marketing assessment of the viability of increasing the consumption of Vermont dairy products in major metropolitan markets in New England and the Northeast.
  • Clean Water Affinity Card
  • Vermont Forest Carbon Sequestration Working Group
  • Accident Prevention and Safety Training for Logging Contractors
  • Financial Assistance; Logger Safety; Master Logger Certification; Cost Share
  • Value-Added Forest Products; Financial Assistance
  • Repeal of Sunset of fee for pipelines in wetland

OTHER BILLS THAT PASSED THIS SESSION

H-47 An act relating to the taxation of electronic cigarettes

H-57 An act relating to weatherization, a Public Utility Commission proceeding, and unclaimed beverage container deposits

H-63 An act relating to weatherization, a Public Utility Commission proceeding, and unclaimed beverage container deposits

H-79 An act relating to eligibility for farm-to-school grant assistance

H-205 An act relating to the regulation of neonicotinoid pesticides

H-275 An act relating to the Farm-to-Plate Investment Program

S-40 An act relating to testing and remediation of lead in the drinking water of schools and child care facilities

S-55 An act relating to testing and remediation of lead in the drinking water of schools and child care facilities

S-113 An act relating to testing and remediation of lead in the drinking water of schools and child care facilities

S-169 An act relating to firearms procedures

 

SOME OF THE BILLS THAT DID NOT PASS THIS SESSION

ACT 250 Conservation and development; land use; natural resources; Act 250 revisions

The House Natural Resources committee spent many weeks taking testimony, redrafting, discussing but never could come to any resolve for changes of Act 250.  The committee will be taking up where they have left off in January of 2020 with Act 250.

S-37 An act relating to medical monitoring

This bill passed the Senate but ran out of time on the House side.  It will be taken up in January.

S-23 An act relating to increasing the minimum wage

The House had passed S-23 on a vote of 90-53 on May 15. The bill would have increased the minimum wage to $15 by at least 2026. The bill:

  • would increase the wage by 2.25 times the inflation rate each year, unless there is a recession or an economic downturn (the 2018 inflation rate was 2.4, the average inflation for the last 10 years is 1.55)
  • includes a “pause button” in the event of a recession. If the sales and use tax and the projected general funds revenue drops by 2% at the same time, the rate of wage increase would return to current law – or at the rate of inflation.

The Senate made changes that House did not support and time ran out.  This bill will be back in January.

 

H-107 An act relating to paid family and medical leave

The Senate voted last week 19-10 to pass H-107 – the bill would be a .2% payroll tax, which will be split evenly between employers and employees and would provide up to 12 weeks for parental leave and up to six weeks of family care.  As with minimum wage the House and Senate could not come to any agreement so the paid family leave will have to be relooked at in January.

H-81 An act relating to the definition and sale of milk

This bill proposes to clarify the definition of “milk” to mean the pure lacteal secretion of hooved animals. A product sold as milk that does not conform to the definition of “milk” would be an adulterated product subject to penalty by the Secretary of Agriculture, Food and Markets. The House Ag committee did send a letter Dr. Stephen Ostroff
Deputy Commissioner of Foods and Veterinary Medicine
U.S. Food and Drug Administration asking him to enforce the standards of identity for milk and dairy products as soon as possible.

H-149 An act relating to the valuation of landlocked parcels