HBRA

FINAL LEGISLATIVE REPORT 2017

What a difference an election makes.

When Republican Phil Scott sailed into the governor’s office with a strong 52-44 win over Democrat Sue Minter, it set the stage for the current political environment we see today.

The Governor demanded a no new taxes budget from the Democratically-controlled legislature. He got it. Why? Because Scott has made an impressive case that Vermonters are with him and NOT the Democrats who want to raise taxes to increase social services.

If the election had been closer, Scott could not have driven such a hard bargain.

Now the governor is pushing his advantage. He is picking a fight with the Democrats over his proposal to remove health care negotiations from local schools and have it done at the state level. It was a skilled move, forcing Democrats to choose between their loyalty to the teachers union or their loyalty to Vermonters wanting a property tax cut.

Governor Scott has pledged to veto the budget over this standoff and so far Vermonters are with him. Even if he backs off at the last minute and does NOT veto the budget, he has won. He has made his point. And right now, Governor Scott is in control of Vermont politics and policy in Vermont.

What does this mean in a larger context? It means a more business friendly state government. It means the legislature will be less brazen in their attempt to control the business climate. It means the legislature will be looking for ways to work with Scott to get things done.

The other major reason for Scott’s political advantage besides the election is the inexperience of the legislative leadership. Senate President Tim Ashe and House Speaker Mitzi Johnson are new to their jobs and have been out-maneuvered by the Governor at every turn.

This will change as these leaders find their footing next year. But for now, there is a major opportunity for the business community to turn this political environment into a business opportunity.

H.39

Patrick O'Brien testified against H.39, the bill that lowers the threshold for operational stormwater permits. House Natural Resources Chair Rep. David Deen, D-Putney, the lead sponsor of this bill, consented to only one change recommended by the Agency of Natural Resources, which was the exclusion from this bill of redevelopments or expansions. The agency had also asked for a delay in implementation until 2020, but that request was denied. It passed out of House Natural Resources Committee in time for the crossover deadline on a 7-3 vote. Because it involved revenue, it was then committed to the House Ways and Means Committee. They discussed it only briefly and it squeaked by with a 6-5 vote. Chairwoman Rep. Janet Ancel, D-Calais, made the decision not to release it to the floor with such a weak committee vote. We have successfully lobbied Ways and Means to ensure the vote for H.39 remained weak, essentially buying time to work on the bill’s next stop, Senate Natural Resources. The makeup of that committee is more conservative than its House counterpart, and we have a much better chance at affecting the outcome with this committee.

ACT 250

The Senate and House supported a bill to review the state’s land use law, Act 250. The bill, H.424 will create a group called the “Commission on Act 250: the Next 50 Years” composed of seven legislators — three from each of the Legislature’s chambers, and one member of either chamber who is appointed jointly by the Committee on Committees and the House speaker.

The commission will be charged with three tasks:

1) Review Act 250’s goals while considering a variety of information and statistics to evaluate how well the law has worked since its passage in 1970.

2) Seek input from Vermonters “on their priorities for the future of the Vermont landscape, including how to maintain Vermont’s environment and sense of place.”

After that, the panel will write a report recommending changes to improve the law.

3) Receive advice from a group of executive branch members, including representatives of the Agency of Commerce and Community Development; the Agency of Agriculture, Food and Markets; and the Agency of Transportation. 

This group will deliver a report on its recommendations for Act 250 by October 2017.

Another group would also attend the commission’s meetings and offer advice. It would consist of planners, a professor, an environmental advocate, a developer, an environmental attorney.

S.135

The Miscellaneous Economic Development passed the Senate and the House on the last day of session. S.135, which has more than a dozen sections, creates a legislative study committee to review raising the minimum wage and what impacts it would have on the so-called benefits cliff, in which low-income people are discouraged from getting raises if it means losing benefits like subsidized health care and child care. Lawmakers agreed to allow six additional tax increment financing (TIF) districts, a tool that allows towns and cities to keep some property tax revenue to pay for public improvements. The new rules limit the number of new TIF districts to two per county.

The $35 Million Housing Bond was folded into the budget bill that the governor is threatening to veto. This way, in order to veto the budget, the Governor will be "killing his own puppy". 

The housing conferees agreed to extend for 10 years an existing property transfer tax that funds water-quality efforts. The first $1 million of next year’s revenue from the tax will pay the debt service on the housing bond. 

S.136

Senate Finance built a committee bill that, among other provisions, attempted to make contracts for commercial construction work worth more than $5,000 mandatory. Bart Frisbie from the Home Builders testified in front of House Commerce against this provision, and we successfully removed this section in its entirety from their version. After a week of fraught conference committee discussions, we remained firm and the bill finally passed the Senate and the House with this language removed.

SUNRISE REVIEW, INDEPENDENT CONTRACTOR LEGISLATION

HBRA met at the  VT DOL offices with Commissioner Lindsay Kurrle and her senior staff followed by a meeting with the Speaker of the House.  Attended:  Maureen Connolly, Denis Bourbeau, Bob Schwartz, Ellis Mills team.  The group was also able to meet informally with Chair of House Commerce, Rep. Bill Botzow, D-Bennington, while in the State House.

We briefed the Commissioner and Speaker about HBRA stance on pending employee misclassification legislation. Both meetings succeeded in laying the groundwork for a successful relationship between the Homebuilders and lawmakers/influencers. Both the Commissioner and the Speaker were sympathetic to the burdens created by a lack of clarity in the current employment classification statutes.

The media blitz created by HBRA’s press release and media pitches about the Vermont Supreme Court win for Great Northern Construction directly resulted in House Commerce taking up three pending independent contractor bills and scheduling two days of testimony. 

H.119, H.223, H.323

Employee misclassification bills were being discussed concurrently within House Commerce.  Denis Bourbeau testified on behalf of the HBRA. He advocated for language similar to last year’s H.867, clarification of independent contractor criteria in statute, and against the concept of a so-called tech/construction carve out. Mike Plageman of Structural Energy Corporation testified in favor of a carve out between tech and construction. He also encouraged the committee to delay their decision making on such a complex issue. David Mickenberg, a lobbyist for Working VT and Dan Barlow, Director of Public Policy at Vermont Businesses for Social Responsibility were among others who testified generally to the problems that workers potentially face when employers misclassify them.  They were both supportive of the language in H.223 and H.323 that tracks the Fair Labor Standards Act criteria for determining employee status. As none of these bills passed before the crossover deadline, the committee began work on a committee bill to define independent contractors for the purposes of unemployment insurance and workers compensation claims.

The committee bill was taken off the table abruptly after Cathy Lamberton testified against a carve out for mandatory workers comp on construction sites. Chairman Rep. Botzow had grown frustrated with the stakeholders inability to compromise and scrapped the entire thing. Rep. Poirier, I-Barre, threw a fit upon hearing that work was over, stormed out of committee, asked for reassignment, and never returned. We are supporting his request for reassignment.

We met with Tayt Brooks, now the Governor's Director of Affordability and Economic Initiatives, to go over our position on independent contractor legislation, the sunrise review, etc. We have followed up with him since re: the Sunrise Review, and our work on independent contractor bills. He is hoping to begin some rule writing this year to circumvent the legislature altogether. We have promised him a summary of recent incidents with the DOL harassing Home Builder’s, and await that information from your association to pass along to him.

At the request of the Attorney General’s office, Senate Finance sent a letter to the Secretary of State’s office requesting a Sunrise Review of Home Improvement Contractors this summer. A Sunrise Review is an investigation into a particular occupation or industry to evaluate whether or not there is a need for licensing and/or regulations. It’s conducted by Professional Regulation within the Secretary of State’s office, and it MUST go forward once the report is requested.  The AG’s office had their sights on this from the beginning, and we weren't able to prevent the request. However, the process begins by assuming said industry doesn’t need regulating, and the burden of proof is on those who will try to prove that it does. We met with the man in charge of this review, Colin Benjamin, and he has agreed to work closely with us during this process. We will have the chance to weigh in with our concerns over the summer. Both Colin Benjamin and Secretary of State Jim Condos have told us that they have no desire to take on this review.

CANNABIS

A Senate proposal of an amendment to a fentanyl bill legalizing home cultivation of marijuana and creating a commission to create tax and regulate legislation passed both the Senate and the House. It legalizes the cultivation of two mature marijuana plants and possession of up to an ounce, beginning in July, 2018. The commission must have their legislative language reported to the general assembly by November of this year. Whether or not the Governor will veto, sign, or let pass without his signature remains to be seen.

NEXT STEPS:

Legislative meeting with HBRA and Ellis-Mills set for Tuesday, May 23.