DRM | Downs Rachlin Martin PLLC

Competing Visions of Vermont’s Economy
 
Arecent article from The Economistthat was widely circulated last week in the Statehouse suggested that Vermont’s economy is among the worst performing in the nation. The magazine stated bleakly, “As wages grow across America, one state is left behind… Vermont has seen the weakest wage growth of any state in the past decade….” The article gave a somewhat confusing description of the cause of the stagnation, but the impression of a state of malaise was undeniable.

A few days later, however, Vermont economist Art Woolfpublished an articlestating that incomes in Vermont “have been climbing steadily since the end of the recession in 2009 and we’ve seen record-high income every year for the last six years.” Woolf continued, “I predict we will have another record-breaking year for Vermont family income [in 2019], with median income at nearly $90,000.”

If that wasn’t enough to confuse a casual observer of Vermont’s economy, Vermont Business Magazine then published an article with this headline:  “Study:  Vermont’s economy ranked as above average.” The study by Seniorliving.org concluded that Vermont has the number 19 healthiest economy in the U.S.

Perhaps the conflicting reports about the health of the state’s economy explain the legislature’s ambivalent view about whether to do anything to improve it.

The administration has proposed aneconomic development initiativethat has received a jaundiced reception by the House Ways and Means Committee. After hearing from a handful of academics and economists – but no businesses or trade groups – some members of that committee have concluded that Vermont shouldn’t try to compete with other states with economic incentives. The committee is considering another bill,H.640, that would force companies that apply for grants under the state’s Vermont Economic Growth Incentive program to disclose confidential information.

At the same time, the legislature is considering a bill,S.267, that would significantly increase the cost of electric power in Vermont. The state’s relatively high power costs already put many Vermont businesses at a disadvantage. Electric utilities testified on Friday that they could meet the requirement of S.267 that they provide all of their power through renewable sources by 2030 with little impact on rates. But the bill also requires that ten percent of that power come from small-scale, high-priced projects, and that would raise rates by $15-25 million per year for Green Mountain Power alone.

The governor’s recent vetoes of paid family leave and higher minimum wage bills underscore the divergent views of the administration and the legislature on the state of the economy. While Gov. Scott saw both bills as threats, many Democrats viewed them as economic development measures that would draw more workers to Vermont.

Vermont has two problems that almost everyone agrees create huge challenges for businesses:  a shortage of affordable housing, and a shortage of workers. Yet there are few serious proposals under consideration in the Statehouse to address either.

Vermont’s business community – if not voters in general – are likely to take note if the legislature fails to approve the administration’s economic development bills, does not address the issues of worker and housing shortage, and significantly raises the cost of electricity by doubling the required purchase of small-scale renewable power. 

Divided House committee approves Act 250 compromise

After more than a year of work, the House Natural Resources Committee voted 6-3 to approve sweeping changes to Vermont’s landmark land-use law, including a provision redesigning the Natural Resources Board and limiting the authority of volunteer district commissions.

Read more

Bill would ratchet up utility renewable energy standards

The Senate Natural Resources Committee may have been overwhelmed by the complex testimony it received on Friday from several of Vermont’s electric utility companies.

Read more 

Global Warming Solutions Act moves forward

The Global Warming Solutions Act, H.688 was voted out of the House Committee on Energy and Technology on Tuesday after the committee largely rejected last-minute proposed changes from Agency of Natural Resources Secretary Julie Moore.

Read more

Economic disclosure for VEGI: a burden on business or needed transparency for taxpayers?

The House Committee on Ways and Means heard testimony onH.640, in anticipation of the bill making its way to the committee. The bill would require Vermont Employment Growth Incentive applicants to disclose the number of jobs added, capital expenditure that was promised, average wage, and progress made each year towards the goals.

Read more

DRM | Downs Rachlin Martin PLLC

State of Low Drama

The two-year saga over the enactment of paid family leave legislation,H.107, abruptly ended on Wednesday as the House failed by a single vote to override Gov. Phil Scott’s veto. 

The debate over the bill held plenty of intrigue for Statehouse insiders. One of the deciding votes against the override was cast by asupporterof paid leave legislation, Rep. Randall Szott, D-Barnard, who voted no because the bill did not go far enough in providing benefits to workers. 

Rep. Linda Joy Sullivan, D-Dorset, faced an agonizing choice, as she had just announced on Monday her challenge to Auditor of Accounts Doug Hoffer. Her vote not to override will no doubt be a major campaign issue in the upcoming Democratic primary. 

Another legislator, an Independent, spent a long time before the vote in House Speaker Mitzi Johnson’s office, only to emerge and vote no as well (albeit for very different reasons). An anticipated motion to reconsider on Thursday fizzled after no votes could be changed, despite intense arm-twisting by the bill’s supporters.

But the finale was hardly as dramatic as the vote count suggests. Only those with deep investment in the issue seemed to be paying much attention. Rather than demonstrate some kind of dramatic partisan divide, the outcome showed almost the opposite – that Vermont retains the ability to calmly debate even the most hotly contested issues, and move on without fanfare once they are resolved. 

More raging bipartisanship may lie ahead.  Scott has until Monday to sign or vetoa bill to increase the state’s minimum wage. That bill initially proposed an increase to $15 per hour, but ended at $12.55, which disarmed much of the bill’s opposition from the business community. Although Scott refused to tip his hand at his weekly press conference on Thursday, a veto is not expected by most Statehouse observers. 

Republican Scott showed just how unified Vermont is ashe gave his opinionat his press conference on the subject of the President’s impeachment:  “I believe [President Trump] abused his position of power … and … that he shouldn’t be in office.” A topic that threatens to tear many states asunder has Vermont’s body politic speaking in virtual unanimity. 

With the paid leave and minimum wage bills soon to be dispensed with, there are few highly partisan bills looming on the horizon. Lawmakers have settled in to the largely mundane task of dealing with the state’s problems, large and small. Most voters are likely just fine with their legislators leaving the drama to Washington

Under pressure, committee adopts hybrid to Act 250 appeals process

The House Committee on Natural Resources, Fish, and Wildlife appears to have reached agreement on a controversial section of a bill to modernize Act 250, paving the way for legislation to be voted out of committee. 
 
Read more

Commerce staff promote Governor’s economic development bill 

Senior staff members from the Agency of Commerce and Community Development made a compelling case this week before several legislative committees forH.641, a bill that modifies and expands the state’s incentive programs for businesses. 

Read more 

Committee approves non-compete restrictions

The House Commerce and Economic Development Committee voted on Thursday to approve a bill,H.1, that imposes limits on the use of non-compete agreements. 

Read more

DRM | Downs Rachlin Martin PLLC

Incentives Matter

Gov. Phil Scott’s economic development officials made the rounds to numerous Statehouse committees this week in an early effort to sell the administration’s weighty set of more than20 different economic development initiatives. While most committees listened politely – and some even indicated support for the proposals – one committee may be laying the groundwork to challenge the fundamental premise of state support for economic development incentives.
 
The governor’s proposals include a wide range of funding that most legislators will embrace, including housing renovation, downtown historic preservation, arts and festival funding, tourism and clean grid modernization. The governor has also proposed an expansion of the Vermont Economic Growth Incentive Program, a program that some Democrats, including Auditor of Accounts Doug Hoffer, have long challenged. They have argued that businesses will invest in Vermont regardless of incentives.
 
To buttress that argument, House Ways and Means Chair Janet Ancel, D-Calais, held testimony this week from two George Mason University Mercatus Center Research Fellows who argued that economic development subsidies are bad public policy and should be phased out entirely. That committee has long been skeptical of the so-called “but for” test that underlies VEGI grants. In response to the testimony, Ancel said, “It has always seemed to me that spending money on training is money well spent. Spending money on job retention, location, those kinds of things -– you might as well just burn it.”
 
In reality, Vermont spends very little on economic incentives, and state development experts are convinced that the state’s few programs are essential to attracting and retaining businesses. The professors acknowledged that Vermont spends only .04 percent of its gross state product on incentives, a fraction of what many other states spend and among the lowest in the country. They also said that Vermont ranks well in transparency and holds companies accountable for grant commitments.
 
The reaction to the professors’ testimony was more muted in the Senate Finance Committee, where members cited the importance of Tax Increment Financing Districts to downtown development. Most committee members represent communities that have experienced dramatic growth from TIF districts.
 
Finance Committee members acknowledged the obvious reality that individual states can ill afford to unilaterally abandon any effort to provide economic development incentives to spur business growth. The answer to unilateral disarmament, said the professors, is interstate compacts between states, to which Committee Chair Ann Cummings, D-Washington, responded, “I don’t see New York agreeing to this any time soon.”
 
Scott has put the weight of his Administration behind efforts to counter Vermont’s stagnant job growth. Democratic lawmakers will likely be arguing among themselves for the next several months about how to respond.

Governor vetoes Paid Family Leave bill

As expected, Gov. Phil Scott has vetoed a paid family leave bill that was passed by the legislature. In aveto statementthat he issued on Friday afternoon, he reiterated that he would not support a mandatory paid family leave program that includes a payroll tax.

Read more

Agreement finally reached on employee misclassification bill

The 2019 legislative session ended without a compromise between the Senate and House conference committee members on S.108, a bill to increase penalties on employers for misclassifying employees.

Read more

Act 250 district commissions safe for now

The House Committee on Natural Resources, Fish, and Wildlife continued its deliberations this week on reforms to Act 250, Vermont’s landmark land use law.

Read more

Workforce Development Report presented

At his weekly press conference on Thursday, Gov. Phil Scott put a spotlight on a report prepared by the state’s Regional Development Corporations.

Read more

 

A Party of One

While the two major political parties battle for the soul of the nation in Washington, D.C., Vermont has all but abandoned the two-party system. Gov. Phil Scott now provides the lone statewide voice for Republican moderation in what is otherwise a supermajority in support of the major social, environmental and economic issues on the left.

That overwhelming lack of disagreement was on full display in the Statehouse this week, starting with a budget address from the governor that proposed increased funding for education, downtowns, climate change and health care. The address elicited virtually no Democratic dissent. That followed his state-of-the-state address two weeks ago that included only one new policy initiative: universal after school programs.

The budget proposed only modest spending growth and no tax increases, but that is hardly a framework to which Democrats could object.

Two longstanding Democratic priorities moved closer to enactment this week. An agreement between the House and Senate on paid family leave legislation, H.107, passed the House on Thursday by a vote of 89-58. That margin is not quite enough to overcome an expected veto by Gov. Scott, but a handful of Progressives voted no because they don’t believe the bill goes far enough. They may join with Democrats in supporting an override vote, which promises to be very close.

An agreement to increase the minimum wage to $12.55 in 2022 passed the House today by a similar margin of 93-54. Although Gov. Scott had promised to veto earlier iterations of the bill, this increase is much smaller than previous versions. There was speculation in the State House that he might sign this more modest bill.

The challenge facing the state GOP was underscored by the recent creation of an “Agri-publican” group that is an offshoot of sorts of the state party. One of that group’s candidates was denounced this week by former Democratic gubernatorial candidate Christine Hallquist for making transphobic and demeaning comments.

As if the party needed to be further divided, it has been unable to reconcile its competing Trump and anti-Trump factions. While the statewide party apparatus remains loyal to Pres. Trump, few of its elected members, including Gov. Scott, have any allegiance to Trump or his policies. 

Ironically, the absence of any political apparatus backing Gov. Scott has given him the freedom to look beyond the party to a broader base of support. Unlike most national Republicans, Scott can appeal to the middle, and not a conservative base, for political support. That has proven to be a winning political formula. According to one poll, Scott is the third most popular governor in the country, behind only Massachusetts Gov. Charlie Baker and Maryland Gov. Larry Hogan – two other moderate Republicans who govern blue states.

All of this is good news for Scott’s reelection prospects, but terrible for the GOP as a whole. The bench of potential statewide Republican candidates is virtually empty, while the Democratic bullpen is packed with ambitious and experienced candidates.

Inside the State House, Democrats continue to have the unilateral ability to determine the outcome of legislation, limited only by the prospect of an occasional veto if they veer too far left.

Global Warming Solutions Act: asking for too much or not enough?

The House Committee on Energy and Technology took testimony this week on the The Global Warming Solutions Act. University of  Vermont Professor Jon Erickson stressed that Vermont needs to transition away from “old economy thinking” and embrace “new economy thinking.”

Read more

Minimum wage conference committee finds agreement

A conference committee on minimum wage legislation, S.23, reached a compromise this week. The Committee of Conference Report passed the House on Friday by a vote of 93-54 and is expected to easily pass the Senate as well.

Read more

Paid family leave on its way to the governor

The Paid Family Leave bill Committee of Conference Report, H.107, was voted on in the House on Thursday and passed on an 89-58 vote.

Read more

Is there a problem with Act 250 district commissions?

The House Committee on Natural Resources, Fish, and Wildlife continued hearing testimony on a proposed package of changes to Act 250 offered in collaboration between the Scott Administration and the Vermont Natural Resources Council, and in competition with a committee bill introduced last session.

Read more

DRM | Downs Rachlin Martin PLLC

Session Opens with Conciliatory Spirit

The legislature reconvened this week in an atmosphere noteworthy for its lack of rancor or partisanship. The placid environment is perhaps a reaction to the ongoing political chaos in Washington, D.C. Whatever the cause, the signs of peace and harmony were everywhere:
 

•	The Governor’s staff joined with environmentalists in proposing a surprisingly aggressive set of reforms to Act 250, Vermont’s revered land use statute – reforms that have eluded countless previous governors, commissions and legislators.
•	House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ashe made clear that they’ve made amends and put their high-profile disagreement from last session behind them.
•	Senate Minority Leader Joe Benning, R-Caledonia, said he would consider endorsing progressive Democrat Tim Ashe in his candidacy for Lieutenant Governor.
•	Most significantly, the Governor’s annual State-of-the-State address was entirely devoid of any partisan or even controversial initiatives.

The Governor’s speech, in addition to its lack of partisanship, differed from most previous addresses in its lack of any real policy agenda. He understandably highlighted the state’s growing demographic crisis, which is exacerbated by an economy that is increasingly divided between a handful of thriving urban areas and a long list of “have not” communities suffering from declines in virtually every measure of success: jobs, residents, wages and property values.

As the legislature heard in a separate report this week, by 2020 one in four Vermonters will be over the age of 65. The state has had a zero percent growth rate in the last decade. Gov. Phil Scott failed to propose any new initiatives to reverse that trend, likely because there seem to be few policy options available.

While the Governor’s address was mostly a recitation of his administration’s successes, he did propose one major new initiative that got the attention of Democrats:  the creation of a universal afterschool network that would align students’ days with the length of the workday. House and Senate Education Committees will almost certainly embrace the offer to come up with a way to create this new program.

There will, of course, be controversy in the months ahead, and there were plenty of signs of what that might look like. The Governor’s address was interrupted for fifteen minutes by a crowd of climate change protesters in the House chamber. That is a precursor of future Statehouse discord on the issue of climate change legislation. Both the House and Senate are considering ambitious climate change bills, but Scott counseled caution, saying he “simply cannot support proposals that will make things more expensive” for Vermonters.

A handful of holdover disputes from last year are likely to be resolved soon, but without the acrimony that accompanied them last year. These include bills to create a medical monitoring cause of action; to create a mandatory paid family leave benefit; and to increase the minimum wage. In addition, the legislature will continue its work to create a tax-and-regulate system for marijuana – an effort that Scott would be happy to see go away.

None of these issues are going to create anything close to the harsh partisanship that exists in Washington. And that is something for which all Vermonters can be grateful.

Act 250 compromise brings strange bedfellows together

In a rare demonstration of compromise on Act 250, the Scott administration and Vermont’s environmental groups have agreed on a comprehensive package of changes to the state’s iconic land use law.

Read more

Paid family leave heads to conference committee

The paid family leave bill, H.107, was pulled off the legislative calendar on the first day of the session and sent back to the House General, Housing, and Military Affairs Committee.

Read more

Minimum wage moves to conference committee

Legislation to increase the state’s minimum wage, S.23, was taken off the House Calendar this week and moved back to the General, Housing, and Military Affairs Committee for further action.
  
Read more

DRM | Downs Rachlin Martin, PLLC

November 21, 2019

Strict Liability/Medical Monitoring Bill – S.37

Bill Status: Delivered to the Governor’s desk on 6/11 and he vetoed the bill. People anticipate the Legislature will attempt to override this veto when they return in January.

HBRA Legislative Activity:  Without the work of members of Home Builders and Remodelers working with HBRA’s lobbying team this bill would not have protections that clearly exempt our industry from liability for medical monitoring damages due to toxic substance exposure. House Judiciary Committee members made it clear that they took our concerns into consideration when redrafting this Senate bill. Our lobbyists worked with members of the Senate to ensure their acceptance of these changes and HBRA was able to prevail through all stages of this bill’s passage in the House and Senate.

Bill Description:  The bill proposes to establish a private right of action for medical monitoring damages incurred due to exposure to a toxic substance. It would affect companies with 10 or more employees.

 

Contractor Registry Bill – S.163

Bill Status:  Passed the Senate and is on the House calendar for action in January. 

HBRA Legislative Activity:  Our lobbying team worked collaboratively with people from the Attorney General’s Office and from the Office of Professional Regulation as they participated in drafting the Contractor Registry bill and then worked together as this bill moved through the legislative process. HBRA was committed in making sure the requirements included in this Registry bill were limited and didn’t expand in scope through legislative amendments. We were very successful in this effort and, given the fact the bill didn’t pass in the last days of the session, we will be back to this work in January.

Paid Family Leave – H.107

Bill Status:  House and Senate failed to come to an agreement and move this bill. It will be reconsidered in January.

HBRA Legislative Activity:  HBRA board members testified regarding the problems an expansive paid family leave bill would impose on the contracting industry. Workforce shortages remain one of our biggest challenges and this bill would exacerbate that struggle.  The original bill, with expansive benefits, was pared down in the last few weeks of the session. This is a top priority for the democrats so will most assuredly pass in some form next year. The challenge for the legislative majority is bringing a bill that the Governor will sign or getting enough of their members to override a veto.

Bill Description:

Funding:

· 0.2% payroll tax split evenly employer / employee

Benefit:

· 12 weeks for a new child

· 6 weeks to care for a family member

Salary Example: $1000 / week salary

· Portion of salary at or below 55% of VT avg weekly salary = $477.38

· Portion of salary above 55% of VT avg weekly salary = $258.27

· Total benefit = $735.65

Note in timing / rollout:

·     if the Commissioner is able to identify an insurance carrier that can provide the required benefits in a more cost-effective manner than would be possible if benefits were provided by the State, the Commissioner shall enter into a contract with that insurance carrier to administer the Program and provide the benefits required by this act beginning in October of 2020; and

·     if the Commissioner is unable to identify a suitable insurance carrier, the Program shall be administered by the Department of Labor in coordination with the Departments of Financial Regulation and of Taxes, and benefits shall become available beginning in July of 2021.

Employee Misclassification – S.108

Bill Status:  This bill is in a Committee of Conference where the House and Senate each appoint three members and they negotiate a compromise. Failing that the bill dies. They did not come to an agreement by adjournment but should reconvene the committee in January.

HBRA Legislative Activity:  Our lobbying team successfully worked with legislators to provide compromise language limiting the scope of this bill. Our team will pick up where they left off and continue to work with our allies to limit the burdens this bill could add to our employers.

Bill Description:  This bill would permit the Attorney General to enforce complaints of employee misclassification under the workers’ compensation and unemployment insurance laws. The Department of Labor currently does this work, and this would allow a dual process which is a concern for employers. The House Commerce Committee worked to address concerns raised by Home Builders and Remodelers Association along with other associations. They made changes to the language clarifying that the Department of Labor would only refer cases to the Attorney General’s Office in specific cases of repeat or large number of misclassifiers.

Hydrofluorocarbon Ban – S.30

Bill Status: The Governor signed this bill and it became law on July 1, 2019.  

HBRA Legislative Activity: The President of HBRA provided compelling testimony to House Natural Resources as to the problems an early enactment date, limiting the sale in Vermont of many insulation products, would cause for contractors. While the committee thought his testimony was impressive, they dismissed HBRA’s concerns. Our lobbying team worked with the committee members individually to drive home the points made by Jim Bradley. In a last-minute push, we were able to get the bill returned to committee in order for them to delay the implementation date. Our team then had to work with Senators to make sure they finally agreed with this change. We were able to claim success and the effective date for selling product in Vermont has been moved to January, 2021 so we can be assured that manufacturers will be able to ramp up production to meet demand.

Bill Description:  This bill originally proposed to regulate the use of hydrofluorocarbons (HFCs) and includes a section that proposes to ban rigid polyurethane applications and spray foam, flexible polyurethane, integral skin polyurethane, flexible polyurethane foam, polystyrene extruded sheet, polyolefin, phenolic insulation board and bunstock.

Building Enforcement Working Groups and Weatherization - H.63

Bill Status:  The Governor signed this bill and it became law in July 1, 2019.

HBRA Legislative Activity: Jim Bradley testified to the Senate Natural Resources Committee on an earlier version of the bill (S.171).  HBRA testimony focused on RBES and the fact that the current law of the land is not enforced thus creating disparities in building energy efficiency. He encouraged the committee to consider enforcement of RBES as part of the work of two proposed building energy labeling groups – a residential group and a commercial group.  Homebuilders and our lobbyists also worked with House and Senate members to propose an RBES enforcement group, or for RBES enforcement to be part of the charge of the building energy labelling groups. Our lobbyists will now work with the Public Service Department’s Commissioner to ensure that Homebuilders is named to the membership of both of those working groups.

Bill Description:  What began as a small change to the bottle bill (H.63) grew into an expansive effort that included a long-time initiative of Sen Chris Bray’s to move forward on building energy labeling and benchmarking.

The bill channels several funding sources towards increased weatherization. It allows for the use of Efficiency VT carryforward balances to be used for moderate income (defined as 80% to 120% of area median income) weatherization efforts to the tune of $4M for 2019 and 2020.  $350K additional came from the General Fund towards Efficiency VT.  Additional funding may also come from VLITE dividends.

The bill orders the PUC to open a docket exploring the creation of an all‑fuels energy efficiency program with a preliminary report due in January 2020.  Finally the bill authorizes the Treasurer to use up to $5M of credit facility for accelerated weatherization program - loans to nonprofit groups, not individuals – until 2021.

Act 250

The legislature established a formal committee to spend two years traveling the state, hearing from stakeholders and recommending updates to Act 250. This past January the House Natural Committee took up the work of the Act 250 Commission: The Next 50 Years. Our lobbying team joined a packed room every day for the first few months of the session as interested parties anticipated a lot of action. As it turned out the issues were so vast that the committee members struggled to make headway. In the end no action was taken with regard to Act 250. Given the time spent on this topic we anticipate the committee opening this subject up again in January. Prior to the start of the session our lobbyists will be working with people from the Governor’s administration and key committee members to see if we can get some changes made that can positively impact the home building industry.

DRM | Downs Rachlin Martin PLLC

Governor, Legislative Leaders in Uneasy Truce as Session Approaches 

Two years ago, Gov. Phil Scott and legislative leaders ended the session locked in battle over state spending. Last year’s session ended with Democratic leaders warring among themselves over minimum wage and paid family leave. As lawmakers enter the second year of the biennial session, leaders in both parties and both branches are showing more interest in compromise and less desire for conflict than at any time since Gov. Scott’s election in 2016.
 
One sign of truce is the quiet that has pervaded Montpelier since June. There have been virtually no press conferences or political jousting between or among the parties. House Speaker Mitzi Johnson and Sen. President Tim Ashe appear to have buried the hatchet; at a joint press conference on Thursday they made clear they had patched up their very public disagreement from last spring. Surprisingly, they took no shots at Gov. Scott as they matter-of-factly described the several bills that he is certain to veto.
 
Similarly, Scott has generally avoided calling out his many disagreements with the Democratic legislature in his periodic press conferences. Everyone seems willing to resolve their disputes relatively amicably and move on.
 
One of the first disagreements to resurface will be S.37, a bill Scott vetoed last spring that would create a new cause of action for individuals who have been exposed to toxic chemicals and claim they may suffer future harm. At yesterday’s press conference, Ashe seemed open to a compromise with the governor. There is a bit of game theory involved, as neither side has an interest in negotiating if they know they can prevail in an override vote in January. Moderate Democrats who opposed the bill in May know the leverage they now hold as both sides seek to firm up their votes.
 
On both of the highly contested issues of paid family leave (H.107) and minimum wage (S.23), the House appears to have acceded to the Senate. But a gubernatorial veto has been promised, and overrides are unlikely. 
 
Prior acrimony over the minimum wage bill may have faded as a result of Vermont’s strengthening job market, which has given workers more leverage to bargain for higher wages. The state’s unemployment rate of 2.2 percent is the lowest in the country.
 
The flip side of the low unemployment rate is the scarcity of new workers available to employers. The shortage of workers is a certain contributor to the state’s sluggish job growth, which is far below the national average. Political leaders seem to recognize that Vermont’s employers are more concerned about finding workers than they are about having to pay them more than $10.78 per hour.
 
Democrats and Republicans would surely find common ground if either party could devise a workable plan to attract or retain more young workers.
 
Several other previously-divisive issues seem amenable to compromise in 2020:
 

•	Budget. The state’s three major funds – the general fund, transportation fund and education fund – are all on track to meet projections. There will still be significant pressures for new spending, but no areas of major disagreement have yet surfaced.
•	Act 250 Reform. This issue been a thorny source of conflict between the business community and environmentalists for years. But administration staff members are optimistic that they may reach an agreement on reforms that have eluded the legislature for decades.
•	Gun Violence Prevention. Ashe and Johnson said that they hope to find areas of agreement with the governor
•	Marijuana. Johnson and Scott are already in general agreement on this issue, so it seems unlikely to become a partisan debate.

 

•	Housing. Perhaps no issue in Vermont has greater consensus than the need for more housing. Senate Democrats want to use more state bonding to fund housing development, but fellow Democrat Beth Pearce remains their biggest obstacle.
•	Economic Development. Legislative and administration leaders have worked cooperatively over the past month on a variety of measures to promote economic development.

The pre-session sense of calm and cooperation will no doubt change as new issues and priorities arise. But as partisan acrimony rips Congress apart, the civility of debate in Vermont looks more and more like a quaint throwback to a bygone era.

Paid Family Leave

A bill to require paid family leave, H.107, was left on the legislative calendar upon adjournment last May, a result of a stalemate between House and Senate leadership. 

Read more

Minimum Wage

As with the paid family leave bill, S.23 sits on the legislative action calendar. Legislators anticipate the bill will pass the General Assembly, but anticipate that it will be vetoed. 

Read more

Global Warming Solutions Act 

The issue of climate change is almost certain to receive heightened attention in the upcoming session. In the House, the focus will be the Global Warming Solutions Act (H.462), which is modeled after legislation that was approved in Massachusetts. 

Read more

Three-acre Rule

In 2015, the legislature approved a requirement that all properties that are three acres or larger obtain a stormwater permit. 

Read more

Builder Contractor Registry

A bill that creates a new registration for home builders was expected to pass fairly quickly last session, but hit a number of speed bumps. 

Read more

Independent Contractors

A recently-passed California law that greatly restricts the ability of employers to classify workers as independent contractors could revive a decades-long debate over how such workers are classified in Vermont.

Read more

DRM | Down Rachlin Martin PLLC - November 21, 2019  

Strict Liability/Medical Monitoring Bill – S.37

 Bill Status: Delivered to the Governor’s desk on 6/11 and he vetoed the bill. People anticipate the Legislature will attempt to override this veto when they return in January.

 HBRA Legislative Activity:  Without the work of members of Home Builders and Remodelers working with HBRA’s lobbying team this bill would not have protections that clearly exempt our industry from liability for medical monitoring damages due to toxic substance exposure. House Judiciary Committee members made it clear that they took our concerns into consideration when redrafting this Senate bill. Our lobbyists worked with members of the Senate to ensure their acceptance of these changes and HBRA was able to prevail through all stages of this bill’s passage in the House and Senate.

 Bill Description:  The bill proposes to establish a private right of action for medical monitoring damages incurred due to exposure to a toxic substance. It would affect companies with 10 or more employees.

Contractor Registry Bill – S.163

 Bill Status:  Passed the Senate and is on the House calendar for action in January. 

 HBRA Legislative Activity:  Our lobbying team worked collaboratively with people from the Attorney General’s Office and from the Office of Professional Regulation as they participated in drafting the Contractor Registry bill and then worked together as this bill moved through the legislative process. HBRA was committed in making sure the requirements included in this Registry bill were limited and didn’t expand in scope through legislative amendments. We were very successful in this effort and, given the fact the bill didn’t pass in the last days of the session, we will be back to this work in January.

 Paid Family Leave – H.107

 Bill Status:  House and Senate failed to come to an agreement and move this bill. It will be reconsidered in January.

 HBRA Legislative Activity:  HBRA board members testified regarding the problems an expansive paid family leave bill would impose on the contracting industry. Workforce shortages remain one of our biggest challenges and this bill would exacerbate that struggle.  The original bill, with expansive benefits, was pared down in the last few weeks of the session. This is a top priority for the democrats so will most assuredly pass in some form next year. The challenge for the legislative majority is bringing a bill that the Governor will sign or getting enough of their members to override a veto.

 Bill Description:

 Funding:

· 0.2% payroll tax split evenly employer / employee

Benefit:

· 12 weeks for a new child

· 6 weeks to care for a family member

Salary Example: $1000 / week salary

· Portion of salary at or below 55% of VT avg weekly salary = $477.38

· Portion of salary above 55% of VT avg weekly salary = $258.27

· Total benefit = $735.65

Note in timing / rollout:

·     if the Commissioner is able to identify an insurance carrier that can provide the required benefits in a more cost-effective manner than would be possible if benefits were provided by the State, the Commissioner shall enter into a contract with that insurance carrier to administer the Program and provide the benefits required by this act beginning in October of 2020; and

·     if the Commissioner is unable to identify a suitable insurance carrier, the Program shall be administered by the Department of Labor in coordination with the Departments of Financial Regulation and of Taxes, and benefits shall become available beginning in July of 2021.

 

Employee Misclassification – S.108

 

Bill Status:  This bill is in a Committee of Conference where the House and Senate each appoint three members and they negotiate a compromise. Failing that the bill dies. They did not come to an agreement by adjournment but should reconvene the committee in January.

 HBRA Legislative Activity:  Our lobbying team successfully worked with legislators to provide compromise language limiting the scope of this bill. Our team will pick up where they left off and continue to work with our allies to limit the burdens this bill could add to our employers.

 Bill Description:  This bill would permit the Attorney General to enforce complaints of employee misclassification under the workers’ compensation and unemployment insurance laws. The Department of Labor currently does this work, and this would allow a dual process which is a concern for employers. The House Commerce Committee worked to address concerns raised by Home Builders and Remodelers Association along with other associations. They made changes to the language clarifying that the Department of Labor would only refer cases to the Attorney General’s Office in specific cases of repeat or large number of misclassifiers.

 Hydrofluorocarbon Ban – S.30

 Bill Status: The Governor signed this bill and it became law on July 1, 2019.  

 HBRA Legislative Activity: The President of HBRA provided compelling testimony to House Natural Resources as to the problems an early enactment date, limiting the sale in Vermont of many insulation products, would cause for contractors. While the committee thought his testimony was impressive, they dismissed HBRA’s concerns. Our lobbying team worked with the committee members individually to drive home the points made by Jim Bradley. In a last-minute push, we were able to get the bill returned to committee in order for them to delay the implementation date. Our team then had to work with Senators to make sure they finally agreed with this change. We were able to claim success and the effective date for selling product in Vermont has been moved to January, 2021 so we can be assured that manufacturers will be able to ramp up production to meet demand.

  Bill Description:  This bill originally proposed to regulate the use of hydrofluorocarbons (HFCs) and includes a section that proposes to ban rigid polyurethane applications and spray foam, flexible polyurethane, integral skin polyurethane, flexible polyurethane foam, polystyrene extruded sheet, polyolefin, phenolic insulation board and bunstock.

 Building Enforcement Working Groups and Weatherization - H.63

 Bill Status:  The Governor signed this bill and it became law in July 1, 2019.

 HBRA Legislative Activity: Jim Bradley testified to the Senate Natural Resources Committee on an earlier version of the bill (S.171).  HBRA testimony focused on RBES and the fact that the current law of the land is not enforced thus creating disparities in building energy efficiency. He encouraged the committee to consider enforcement of RBES as part of the work of two proposed building energy labeling groups – a residential group and a commercial group.  Homebuilders and our lobbyists also worked with House and Senate members to propose an RBES enforcement group, or for RBES enforcement to be part of the charge of the building energy labelling groups. Our lobbyists will now work with the Public Service Department’s Commissioner to ensure that Homebuilders is named to the membership of both of those working groups.

 Bill Description:  What began as a small change to the bottle bill (H.63) grew into an expansive effort that included a long-time initiative of Sen Chris Bray’s to move forward on building energy labeling and benchmarking.

 The bill channels several funding sources towards increased weatherization. It allows for the use of Efficiency VT carryforward balances to be used for moderate income (defined as 80% to 120% of area median income) weatherization efforts to the tune of $4M for 2019 and 2020.  $350K additional came from the General Fund towards Efficiency VT.  Additional funding may also come from VLITE dividends.

 The bill orders the PUC to open a docket exploring the creation of an all‑fuels energy efficiency program with a preliminary report due in January 2020.  Finally the bill authorizes the Treasurer to use up to $5M of credit facility for accelerated weatherization program - loans to nonprofit groups, not individuals – until 2021.

 Act 250

 The legislature established a formal committee to spend two years traveling the state, hearing from stakeholders and recommending updates to Act 250. This past January the House Natural Committee took up the work of the Act 250 Commission: The Next 50 Years. Our lobbying team joined a packed room every day for the first few months of the session as interested parties anticipated a lot of action. As it turned out the issues were so vast that the committee members struggled to make headway. In the end no action was taken with regard to Act 250. Given the time spent on this topic we anticipate the committee opening this subject up again in January. Prior to the start of the session our lobbyists will be working with people from the Governor’s administration and key committee members to see if we can get some changes made that can positively impact the home building industry.

End of Session Wrap Up

Many said that Friday’s "adjournment" was the most unusual in at least 40 years. The fighting between the House and Senate was great theater but not sound legislating. The Senate refused to accept the House's joint adjournment resolution and are expecting the House to come back next Wednesday. Meanwhile the House members gave their speeches, said their goodbyes, packed up their files and left for the year.  It was a sight to behold.

It took an extra week to adjourn.  The legislature is scheduled for eighteen weeks, and last week was number 19.  The biggest blockades to wrapping thing up were differences between the House and Senate on their marquee economic development initiatives –paid family leave for the House and minimum wage increases for the Senate.  Meanwhile, other widely considered initiatives were left by the wayside –likely to be picked up again next session.

Efforts to establish a system to tax and regulate recreational marijuana ran out of time – and political will.  The two bodies agreed on sustainable funding for Lake Champlain clean up.  Efforts to levy a “cloud tax”, i.e. impose sales tax on software accessed via the Internet, and another proposal to increase the rooms and meals tax by 1% faced stiff opposition from stakeholder groups. Instead the revenue committees agreed on funding for clean water that did not raise new money.  They diverted a percentage of rooms and meals tax to water cleanup and will back fill the General Fund with additional revenues generated somewhat unexpectedly this year. 

Contractor Registry Bill – S.163 (Page 2941)

Bill Status – This bill sat on the House action calendar in the last few days and, even if had been up for a vote, time would have run out before it could be approved by the Senate. There were also rumors that the Governor wasn’t supportive and might veto the bill. Work will be done prior to next session to garner his support and the support of others in the House in the hopes that this bill can move quickly in January.

Bill Description - The major changes made in Ways and Means include:

·         $50.00 instead of $75.00 for individual fees every two years.

·         Trigger for a required contract was changed to $5,000.00 instead of $2,500.00. Trigger for registration stays at $2,500.00.

·         OPR can begin taking registrations on December 1, 2019. The registration term will begin April 1, 2020. Pushes back the date for "unauthorized practice" (ie. the date when penalties begin for operating without being registered) by a year to April 1, 2021 which allows more time to get the word out.

·         New language that provides more definition to “residential construction work.”

Strict Liability/Medical Monitoring Bill – S.37 (Page 3046)

Bill Status – The Senate concurred with the House’s changes and voted the bill on a vote of 29-11. There are enough votes to sustain a veto should the Governor decide this bill goes too far. We were successful in mitigating contractors’ risk, but manufacturers are still affected which could impact procurement of materials.

Bill Description - The bill proposes to establish a private right of action for medical monitoring damages incurred due to exposure to a toxic substance. It would affect companies with 10 or more employees. There is also language added by the Governor’s administration that narrows the scope of the strict liability section that was passed by the Senate.

Paid Family Leave – H.107

Bill Status – This bill failed to pass this year as it fell victim to the epic conflict between the House and Senate.  It will no doubt be taken up early next session.

Bill Description - As the bill stands now (there will be changes made prior to passage):

Funding:

·  0.2% payroll tax split evenly employer / employee

Benefit:

·  12 weeks for a new child

·  6 weeks to care for a family member

Salary Example: $1000 / week salary

·  Portion of salary at or below 55% of VT avg weekly salary = $477.38

·  Portion of salary above 55% of VT avg weekly salary = $258.27

·  Total benefit = $735.65

Note in timing / rollout:

·      if the Commissioner is able to identify an insurance carrier that can provide the required benefits in a more cost-effective manner than would be possible if benefits were provided by the State, the Commissioner shall enter into a contract with that insurance carrier to administer the Program and provide the benefits required by this act beginning in October of 2020; and

·      if the Commissioner is unable to identify a suitable insurance carrier, the Program shall be administered by the Department of Labor in coordination with the Departments of Financial Regulation and of Taxes, and benefits shall become available beginning in July of 2021.

Employee Misclassification – S.108

Bill Status – S.108 was still in a Committee of Conference when the House adjourned on Friday. At their last meeting it was clear that the Senate didn’t like the House changes that we had supported. This committee will reconvene in January.

Bill Description - This bill would permit the Attorney General to enforce complaints of employee misclassification under the workers’ compensation and unemployment insurance laws. The Department of Labor currently does this work, and this would allow a dual process which is a concern for employers. The House Commerce Committee worked to address concerns raised by Home Builders and Remodelers Association along with other associations. They made changes to the language clarifying that the Department of Labor would only refer cases to the Attorney General’s Office in specific cases of repeat or large number of misclassifiers.

Hydrofluorocarbon Ban – S.30 (Page 2, 4(A) and (B))

Bill Status – S.30 passed the Senate and is on its way to the Governor’s desk for his signature. We were able to keep the language the House put in for us which pushed back the effective date for selling product in VT to 1/21. There was an effort by some special interest groups to encourage Senate Natural Resources to ignore our request but we prevailed with the help of AGC.

Bill Description - This bill originally proposed to regulate the use of hydrofluorocarbons (HFCs) and includes a section that proposes to ban rigid polyurethane applications and spray foam, flexible polyurethane, integral skin polyurethane, flexible polyurethane foam, polystyrene extruded sheet, polyolefin, phenolic insulation board and bunstock.

Association Health Plans – H.524

Bill Status - Language passed on Wednesday that is expected to be signed by Governor, that will enable these plans to continue for existing members as long as federal law allows.

Bill Description - Relevant Section of larger bill:

Sec. 7. 8 V.S.A. § 4079a is amended to read:

§ 4079a. ASSOCIATION HEALTH PLANS * * *

(d)(1) An association health plan that provided coverage for the 2019 plan year may be renewed for coverage of existing association employer members for subsequent plan years, to the extent permitted under federal law. An association health plan that provided coverage for the 2019 plan year shall not enroll any new employer members for coverage after the 2019 plan year; provided, however, that new employees of existing association employer members may enroll in the plan in a subsequent plan year pursuant to an offer of coverage from their employer.

(2) No new association health plans shall be offered or issued for coverage in this State for plan years 2020 and after.

Note: All of the details regarding these bills are subject to change. Nothing is final until the legislature adjourns, which should be next week.

Contractor Registry Bill – S.163 (Page 2941)

Bill Status – This bill just passed out of Ways and Means with their proposed amendment on a vote of 6-5 and should be on the House floor for a vote early next week. Given that the legislative session is most likely down to a couple more days it doesn’t look like this bill will pass this year. If there are any snags in other bills, extending adjournment by a few extra days, we could still get this over the finish line. If not, it will be up for action when the next session convenes in January.

Bill Description - The major changes made in Ways and Means include:

·         $50.00 instead of $75.00 for individual fees every two years.

·         Trigger for a required contract was changed to $5,000.00 instead of $2,500.00. Trigger for registration stays at $2,500.00.

·         OPR can begin taking registrations on December 1, 2019. The registration term will begin April 1, 2020. Pushes back the date for "unauthorized practice" (ie. the date when penalties begin for operating without being registered) by a year to April 1, 2021 which allows more time to get the word out.

·         New language that provides more definition to “residential construction work.”.  

Strict Liability/Medical Monitoring Bill – S.37 (Page 3046)

Bill Status - The bill is on the Senate Calendar and we will be monitoring this closely. The Senate could vote to concur with the changes the House made, or they could call for a Committee of Conference. Calling for this committee would take more time so again, facing the last week of the session, it would appear that their wisest move would be to concur with the House.

Bill Description - The bill proposes to establish a private right of action for medical monitoring damages incurred due to exposure to a toxic substance. It would affect companies with 10 or more employees. There is also language added by the Governor’s administration that narrows the scope of the strict liability section that was passed by the Senate.

The House Judiciary Committee took our concerns seriously and added language to this bill that would mitigate contractor liability.

Paid Family Leave – H.107

Bill Status – The House and Senate are working behind the scenes to try to come to consensus. Influential Senate leaders voted are opposed to this bill. Jane Kitchel (Democrat- Caledonia, Chair of Senate Appropriations) has publicly stated that she believes we need to make sure there is enough money for needed existing programs and would rather put any extra resources into minimum wage increases. There are also enough votes against this new program to successfully sustain the Governor’s veto should he take that step.

Bill Description - As the bill stands now (there will be changes made prior to passage):

Funding:

·  0.2% payroll tax split evenly employer / employee

Benefit:

·  12 weeks for a new child

·  6 weeks to care for a family member

Salary Example: $1000 / week salary

·  Portion of salary at or below 55% of VT avg weekly salary = $477.38

·  Portion of salary above 55% of VT avg weekly salary = $258.27

·  Total benefit = $735.65

Note in timing / rollout:

·      if the Commissioner is able to identify an insurance carrier that can provide the required benefits in a more cost-effective manner than would be possible if benefits were provided by the State, the Commissioner shall enter into a contract with that insurance carrier to administer the Program and provide the benefits required by this act beginning in October of 2020; and

·      if the Commissioner is unable to identify a suitable insurance carrier, the Program shall be administered by the Department of Labor in coordination with the Departments of Financial Regulation and of Taxes, and benefits shall become available beginning in July of 2021.

Employee Misclassification – S.108

Bill Status – S.108 is in a Committee of Conference and the House and Senate conferees will be meeting on Tuesday.  

Bill Description - This bill would permit the Attorney General to enforce complaints of employee misclassification under the workers’ compensation and unemployment insurance laws. The Department of Labor currently does this work, and this would allow a dual process which is a concern for employers. The House Commerce Committee worked to address concerns raised by Home Builders and Remodelers Association along with other associations. They made changes to the language clarifying that the Department of Labor would only refer cases to the Attorney General’s Office in specific cases of repeat or large number of misclassifiers.

Hydrofluorocarbon Ban – S.30 (Page 2, 4(A) and (B))

Bill Status – Jim Bradley and Byron Gokey testified as to the positive attributes of the replacement products but the problem in the timeframe for banning sale of HFC insulation products (1/1/20). Through a number of machinations, we were able to get the date pushed back to 1/1/21. We garnered support from the advocates pushing for the original dates and feel that, should there be a problem in procuring the needed material next year we can revisit this effective date again.

Bill Description - This bill originally proposed to regulate the use of hydrofluorocarbons (HFCs) and includes a section that proposes to ban rigid polyurethane applications and spray foam, flexible polyurethane, integral skin polyurethane, flexible polyurethane foam, polystyrene extruded sheet, polyolefin, phenolic insulation board and bunstock.