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Journal of the House ______SATURDAY, JUNE 4, 2005 At nine o'clock and thirty minutes in the forenoon the Speaker called the House to order. Recess Thereupon, the Speaker declared a recess until the fall of the gavel. At ten o’clock and forty-five minutes in the forenoon, the Speaker called the House to order. Devotional Exercises Devotional exercises were conducted by Representative Mary Morrissey of Bennington. Message from the Senate No. 80 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered a bill originating in the House of the following title: H. 545. An act relating to authorizing Vermont Yankee to go before the Public Service Board to seek permission for dry cask storage. And has passed the same in concurrence with proposals of amendment in the adoption of which the concurrence of the House is requested. The Senate has on its part adopted Senate concurrent resolutions of the following titles: S.C.R. 40. Senate concurrent resolution extending best wishes to former Representative Curt McCormack and Nicole Dewing as they embark on a new path as Peace Corps volunteers in Senegal. S.C.R. 41. Senate concurrent resolution congratulating Woodbury College on its 30th anniversary. The Senate has on its part adopted concurrent resolutions originating in the House of the following titles: 148 JOURNAL OF THE HOUSE 149 H.C.R. 153. House concurrent resolution congratulating Burr and Burton Academy on its 175th anniversary. H.C.R. 154. House concurrent resolution congratulating Linda Wheatley and Suvannee Promchan for their roles in the Montpelier High School students’ 2005 excursion to Thailand. H.C.R. 155. House concurrent resolution congratulating the 2005 Project Citizen winners from Twinfield Union School. H.C.R. 156. House concurrent resolution congratulating Betty Hatch on being named the 2005 Martha H. O’Connor Friend of Education. H.C.R. 157. House concurrent resolution congratulating Abigail Swan on her designation as the 2005 Vermont State Boys & Girls Clubs Youth of the Year. H.C.R. 158. House concurrent resolution congratulating Cathy Howland of Springfield on her receipt of commendations as a registered nurse. H.C.R. 159. House concurrent resolution congratulating the 2004 Lamoille Union High School Lancers Division II championship girls’ soccer team. H.C.R. 160. House concurrent resolution honoring former Representative Hazel Prindle of Charlotte for her decades of outstanding civic and community service. H.C.R. 161. House concurrent resolution commemorating the history of the town of Sterling. H.C.R. 162. House concurrent resolution honoring Stacie Lee Blake for her work on behalf of refugees and immigrants in Vermont. H.C.R. 163. House concurrent resolution congratulating the Vermont Arts Council on its 40th anniversary. H.C.R. 164. House concurrent resolution congratulating the Catalyst Theatre Company’s Thumbs Up! Showcase on its tenth anniversary gala. H.C.R. 165. House concurrent resolution in memory of the American military personnel who have died in service of their nation in Iraq since January 5, 2005. H.C.R. 166. House concurrent resolution congratulating the Harwood Union High School student producers of the video documentary “Common Ground: The Stories of Waterbury to Warren”. 150 SATURDAY, JUNE 4, 2005 H.C.R. 167. House concurrent resolution congratulating Sonnax Industries Inc. of Bellows Falls on its designation as the Vermont International Business Council’s Exporter of the Year. H.C.R. 168. House concurrent resolution in memory of Allison Hansen, Joshua Nutbrown, and Justin Nutbrown. H.C.R. 169. House concurrent resolution commemorating the 100th anniversary of the establishment of the Daughters of the Charity of the Sacred Heart of Jesus religious order in the United States. H.C.R. 170. House concurrent resolution congratulating Walter Weaver of Northfield on winning the grades 3-5 division of the secretary of state’s 2005 poster contest. H.C.R. 171. House concurrent resolution commemorating the dedication of the Robert T. Stafford United States Navy Memorial on Lake Champlain. H.C.R. 172. House concurrent resolution congratulating Tomomi Shimabukuro on her designation as the 2005 Capital Division’s girl basketball player of the year. H.C.R. 173. House concurrent resolution recognizing Debora Price’s outstanding educational leadership as principal of the Beeman Elementary School in New Haven. H.C.R. 174. House concurrent resolution congratulating the town of Jamaica on its 225th anniversary. Message from the Senate No. 81 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered the reports of the Committees of Conference upon the disagreeing votes of the two Houses upon Senate bills of the following : S. 66. An act relating to the welfare of animals S. 159. An act relating to updating and clarifying education law S. 171. An act relating to agricultural water quality And has accepted and adopted the same on its part. The Senate has considered House proposal of amendment to joint resolution of the following title:

JOURNAL OF THE HOUSE 151 J.R.S. 36. Joint resolution relative to federal policy concerning MTBE. And has concurred therein. Committee Bill Introduced H. 549 Rep. Sweaney of Windsor, for the committee on Government Operations, introduced a bill, entitled An act relating to international trade; Which was read the first time and, under the rule, placed on the Calendar for notice tomorrow. Bill Referred to Committee on Ways and Means S. 165 Senate bill, entitled An act relating to economic advancement tax incentives and economic development; Appearing on the Calendar, affecting the revenue of the state, under the rule, was referred to the committee on Ways and Means. Bill Referred to Committee on Appropriations H. 547 House bill, entitled An act relating to adjustments to the retirement systems of state employees and teachers; Appearing on the Calendar, carrying an appropriation, under rule 35a, was referred to the committee on Appropriations. Remarks Journalized On motion of Rep. Keogh of Burlington, the following remarks by Rep. O’Donnell of Vernon were ordered printed in the Journal: “Madam Speaker: In anticipation of today being our last day, I would like to mention that the member from Milton will not be with us in January because he is being called to duty. Rep. Metzger, we are proud of you, we wish you God speed, we will keep you in our hearts and prayers until you return to us.” 152 SATURDAY, JUNE 4, 2005

Rules Suspended; Report of Committee of Conference Adopted H. 163 On motion of Rep. Sunderland of Rutland Town, the rules were suspended and House bill, entitled An act relating to criminal abuse, neglect, and exploitation of vulnerable adults; Appearing on the Calendar for notice, was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the Senate recede from its proposals of amendment, and that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following: Sec. 1. FINDINGS The General Assembly finds: (1) Vulnerable adults are one of the most abused segments of our population. The 1998 National Elder Incidence Study reported that 449,925 elders experienced abuse or neglect in noninstitutional settings. About 84 percent of these cases were never reported. During the past five years, there has been a 41 - percent increase in the number of reports of abuse of vulnerable adults made to adult protective services in the Vermont department of aging and independent living. During that same period, there has been a 66 - percent increase in the number of protective services provided to vulnerable adults. (2) Nationally, statistics show that more than 90 percent of people with developmental disabilities will experience sexual abuse at some point in their lives. Only three percent of sexual abuse cases involving people with developmental disabilities are ever reported. (3) Crime victimization is a major problem among persons with severe mental illness (SMI). In their report “Crime Victimization in Adults with Severe Mental Illness: Comparison with the National Crime Victimization

JOURNAL OF THE HOUSE 153 Survey,” researchers at Northwestern University’s Department of Psychiatry and Behavioral Sciences documented that: (A) More than 25 percent of persons with SMI had been victims of violent crimes within the past year, more than 11 times the rate for the general population even after controlling for demographic differences. (B) For the types of violent crimes analyzed (various degrees of rape/sexual assault, robbery, and assault), the rates of occurrence for persons with SMI ranged from six to 23 times greater than the rates among the general population. (4) According to a 2002 General Accounting Office report on nursing home resident abuse, there is increasing concern that nursing home residents are abused by the very people who are supposed to care for them. In 1999, over 25 percent of nursing homes nationwide were cited by state survey agencies for conduct that harmed residents or put them at risk of death or serious injury. Reports of sexual and physical abuse often are not made promptly, and existing state and federal safeguards do not adequately protect residents from potentially abusive nursing home employees. (5) Prevention services, training, and education are critical components in reducing abuse, neglect, and exploitation of vulnerable adults. The more frequently and efficiently that education, prevention, and training services and other early interventions are employed, the greater likelihood that fewer vulnerable adults will be subject to abuse. For example, reports to adult protective services increased by 18 percent during and immediately following a six-month 2004 public education campaign conducted by the Vermont Center for Crime Victim Services to educate vulnerable adults, the elderly, caregivers, and the general public about the issues of elder abuse, neglect, and exploitation in Vermont. Such a significant and immediate increase underscores the clear need for more public education and training about the crimes committed against this vulnerable segment of our population. (6) While this act enhances the ability to prosecute persons under criminal law who abuse vulnerable adults, it is also the intent of the General Assembly to focus attention on the crucial role that prevention and training services can play to intervene at an early stage and ensure that vulnerable adults are not abused at all. Sec. 2. 13 V.S.A. chapter 28 is added to read: CHAPTER 28. ABUSE, NEGLECT, AND EXPLOITATION OF VULNERABLE ADULTS 154 SATURDAY, JUNE 4, 2005 § 1375 . DEFINITIONS As used in this chapter: (1) “Bodily injury” means physical pain, illness, or any impairment of physical condition. (2) “Caregiver” means: (A) a person, agency, facility, or other organization with responsibility for providing subsistence, health, or other care to a vulnerable adult, who has assumed the responsibility voluntarily, by contract, or by an order of the court; or (B) a person providing care, including health care, custodial care, personal care, mental health services, rehabilitative services, or any other kind of care which is required because of another’s age or disability. (3) “Lewd and lascivious conduct” means any lewd or lascivious act upon or with the body, or any part or member thereof, of a vulnerable adult, with the intent of arousing, appealing to, or gratifying the lust, passions, or sexual desires of the person or the vulnerable adult. (4) “Neglect” means intentional or reckless failure or omission by a caregiver to: (A)(i) provide care or arrange for goods, services, or living conditions necessary to maintain the health or safety of a vulnerable adult, including, but not limited to, food, clothing, medicine, shelter, supervision, and medical services, unless the caregiver is acting pursuant to the wishes of the vulnerable adult or his or her representative, or an advanced directive as defined in chapter 111 of Title 18; or (ii) make a reasonable effort, in accordance with the authority granted the caregiver, to protect a vulnerable adult from abuse, neglect or exploitation by others. (B) Neglect may be repeated conduct or a single incident which has resulted in or could be expected to result in physical or psychological harm, as a result of subdivisions (A)(i) or (ii) of this subdivision (4). (5) “Serious bodily injury” means bodily injury which creates a substantial risk of death or which causes substantial loss or impairment of the function of any bodily member or organ or substantial impairment of health or substantial disfigurement. (6) “Sexual act” means conduct between persons consisting of contact between the penis and the vulva, the penis and the anus, the mouth and the

JOURNAL OF THE HOUSE 155 penis, the mouth and the vulva, or any intrusion, however slight, by any part of a person’s body or any object into the genital or anal opening of another. (7) “Sexual activity” means a sexual act, other than appropriate health care or personal hygiene, or lewd and lascivious conduct. (8) “Vulnerable adult” means any person 18 years of age or older who: (A) is a resident of a facility required to be licensed under chapter 71 of Title 33; (B) is a resident of a psychiatric hospital or a psychiatric unit of a hospital; (C) has been receiving personal care and services from an agency certified by the Vermont department of aging and independent living or from a person or organization that offers, provides, or arranges for personal care; or (D) regardless of residence or whether any type of service is received, is impaired due to brain damage, infirmities of aging, or a physical, mental, or developmental disability that results in some impairment of the individual’s ability to: (i) provide for his or her own care without assistance, including the provision of food, shelter, clothing, health care, supervision, or management of finances; or (ii) protect himself or herself from abuse, neglect, or exploitation. § 1376. ABUSE (a) A person who engages in conduct with an intent or reckless disregard that the conduct is likely to cause unnecessary harm, unnecessary pain, or unnecessary suffering to a vulnerable adult shall be imprisoned not more than one year or fined not more than $1,000.00, or both. (b) A person who commits an assault, as defined in section 1023 of this title, with actual or constructive knowledge that the victim is a vulnerable adult, shall be imprisoned for not more than two years or fined not more than $2,000.00, or both. (c) A person who commits an aggravated assault as defined in subdivision 1024(a)(1) or (2) of this title with actual or constructive knowledge that the victim is a vulnerable adult shall be imprisoned not more than 20 years or fined not more than $10,000.00, or both. § 1377. ABUSE BY UNLAWFUL RESTRAINT AND UNLAWFUL CONFINEMENT 156 SATURDAY, JUNE 4, 2005 (a) Except as provided in subsection (b) of this section, no person shall knowingly or recklessly: (1) cause or threaten to cause unnecessary or unlawful confinement or unnecessary or unlawful restraint of a vulnerable adult; or (2) administer or threaten to administer a drug, a substance, or electroconvulsive therapy to a vulnerable adult. (b) This section shall not apply if the confinement, restraint, administration, or threat is: (1) part of a legitimate and lawful medical or therapeutic treatment; or (2) lawful and reasonably necessary to protect the safety of the vulnerable adult or others, provided that less intrusive alternatives have been attempted if doing so would be reasonable under the circumstances. (c) A person who violates this section shall: (1) be imprisoned not more than two years or fined not more than $10,000.00, or both. (2) if the violation causes bodily injury, be imprisoned not more than three years or fined not more than $10,000.00, or both. (3) if the violation causes serious bodily injury, be imprisoned not more than 15 years or fined not more than $10,000.00, or both. § 1378. NEGLECT (a) A caregiver who intentionally or recklessly neglects a vulnerable adult shall be imprisoned not more than 18 months or fined not more than $10,000.00, or both. (b) A caregiver who violates subsection (a) of this section, and as a result of such neglect, serious bodily injury occurs to the vulnerable adult, shall be imprisoned not more than 15 years or fined not more than $10,000.00, or both. § 1379. SEXUAL ABUSE (a) A person who volunteers for or is paid by a caregiving facility or program shall not engage in any sexual activity with a vulnerable adult. It shall be an affirmative defense to a prosecution under this subsection that the sexual activity was consensual between the vulnerable adult and a caregiver who was hired, supervised, and directed by the vulnerable adult. A person who violates this subsection shall be imprisoned for not more than two years or fined not more than $10,000.00, or both. (b) No person, whether or not the person has actual knowledge of the

JOURNAL OF THE HOUSE 157 victim’s vulnerable status, shall engage in sexual activity with a vulnerable adult if: (1) the vulnerable adult does not consent to the sexual activity; or (2) the person knows or should know that the vulnerable adult is incapable of resisting, declining, or consenting to the sexual activity due to his or her specific vulnerability or due to fear of retribution or hardship. (c) A person who violates subsection (b) of this section shall be: (1) imprisoned for not more than five years or fined not more than $10,000.00, or both, if the sexual activity involves lewd and lascivious conduct; (2) imprisoned for not more than 20 years or fined not more than $10,000.00, or both, if the sexual activity involves a sexual act. (d) A caregiver who violates subsection (b) of this section shall be: (1) imprisoned for not more than seven years or fined not more than $10,000.00, or both, if the sexual activity involves lewd and lascivious conduct. (2) imprisoned for not more than 25 years or fined not more than $10,000.00, or both, if the sexual activity involves a sexual act. § 1380. FINANCIAL EXPLOITATION (a) No person shall willfully use, withhold, transfer, or dispose of funds or property of a vulnerable adult, without or in excess of legal authority, for wrongful profit or advantage. No person shall willfully acquire possession or control of or an interest in funds or property of a vulnerable adult through the use of undue influence, harassment, duress, or fraud. (b) A person who violates subsection (a) of this section, and exploits money, funds, or property of no more than $500.00 in value, shall be imprisoned not more than 18 months or fined not more than $10,000.00, or both. (c) A person who violates subsection (a) of this section, and exploits money, funds, or property in excess of $500.00 in value, shall be imprisoned not more than 10 years or fined not more than $10,000.00, or both. § 1381. EXPLOITATION OF SERVICES Any person who willfully forces or compels a vulnerable adult against his or her will to perform services for the profit or advantage of another shall be imprisoned not more than two years or fined not more than $10,000.00, or 158 SATURDAY, JUNE 4, 2005 both. § 1382. DEFERRED SENTENCE Notwithstanding the limitation of subsection 7041(a) of this title, a court may, on the motion of a party or on its own motion, with or without the consent of the state’s attorney, defer sentencing for a misdemeanor violation of this chapter and place the defendant on probation upon such terms and conditions as it may require. § 1383. ADULT ABUSE REGISTRY A person who is convicted of a crime under this chapter shall be placed on the adult abuse registry. A deferred sentence is considered a conviction for purposes of the adult abuse registry. Sec. 3. 13 V.S.A. § 5301(7) is amended to read: § 5301. DEFINITIONS As used in this chapter: * * * (7) For the purpose of this chapter, “listed crime” means any of the following offenses: * * * (Z) burglary into an occupied dwelling as defined in section subsection 1201(c) of this title; and (AA) the attempt to commit any of the offenses listed in this section; and (BB) abuse (section 1376 of this title), abuse by restraint (section 1377 of this title), neglect (section 1378 of this title), sexual abuse (section 1379 of this title), financial exploitation (section 1380 of this title), and exploitation of services (section 1381 of this title). Sec. 4. 33 V.S.A. § 6913 is amended to read: § 6913. PENALTIES; DEFERRED SENTENCING; CRIMINAL SEXUAL ACTIVITY BY CAREGIVER; ABUSE; NEGLECT; EXPLOITATION; MANDATORY REPORTER’S FAILURE TO REPORT (a) Any person who engages in abuse, as defined in subdivision 6902(1)(B) or (C) of this title shall be fined not more than $10,000.00 or be imprisoned not

JOURNAL OF THE HOUSE 159 more than 18 months, or both. (b) Any person who willfully engages in exploitation as defined in subdivision 6902(6)(A), (B) or (C) of this title, shall be fined not more than $10,000.00 or be imprisoned for not more than 18 months, or both. (c) Any caregiver who purposely, knowingly or recklessly neglects a vulnerable adult as defined in subdivision 6902(7) of this title shall be fined not more than $10,000.00 or be imprisoned for not more than 18 months, or both. (d) Any caregiver who engages in abuse of a vulnerable adult in violation of subdivision 6902(1)(D) of this title shall be fined not more than $10,000.00 or be imprisoned not more than two years, or both. (e) Any mandatory reporter as defined in subdivision 6903(a)(1), (2), (3), (4) and (5) of this title that willfully violates subsection 6903(a) of this title shall be fined not more than $500.00 or be imprisoned for not more than one year, or both. (f) Notwithstanding the limitation of 13 V.S.A. § 7041(a), a court may, on the motion of a party or on its own motion, with or without the consent of the state’s attorney, defer sentencing and place the defendant on probation upon such terms and conditions as it may require. (g) Whenever the commissioner finds, after notice and hearing, that a person has committed sexual abuse as defined in subdivision 6902(1)(D) of this title, sexual exploitation as defined in subdivision 6902(6)(D), exploitation as defined in subdivision 6902(6)(A) or (B) in an amount in excess of $500.00, abuse which causes grievous injury to or the death of a vulnerable adult, or neglect which causes grievous injury to or the death of a vulnerable adult, the commissioner may impose an administrative penalty of not more than $10,000.00 for each violation, except as provided in subsection (h) of this section. The commissioner shall notify the office of professional regulation, or any other professional licensing board applicable to the violator, of any decision made pursuant to this subsection. (h)(b) Whenever the commissioner finds, after notice and hearing, that a mandatory reporter, as defined in subdivisions 6903(a)(1), (2), (3), (4), and (5) of this title, has willfully violated the provisions of subsection 6903(a), the commissioner may impose an administrative penalty not to exceed $500.00 per violation. For purposes of this subsection, every 24 hours that a report is not made beyond the period for reporting required by subsection 6903(a) shall constitute a new and separate violation, and a mandatory reporter shall be liable for an administrative penalty of not more than $500.00 for each 24-hour 160 SATURDAY, JUNE 4, 2005 period, not to exceed a maximum penalty of $5,000.00 per reportable incident. (i)(c) A person who is aggrieved by a decision under subsection (g)(a) or (h)(b) of this section may appeal that decision to the superior court where either party may request trial by jury. Sec. 5. 13 V.S.A. § 5401(10) is amended to read: (10) “Sex offender” means: (A) A person who is convicted in any jurisdiction of the United States, including a state, territory, commonwealth, the District of Columbia, or military, federal, or tribal court of any of the following offenses: * * * (iv) sexual activity by a caregiver as defined in 33 V.S.A. § 6913(d) abuse of a vulnerable adult as defined in section 1379 of this title; * * * Sec. 6. 33 V.S.A. § 6906(a) is amended to read: § 6906. INVESTIGATION (a)(1) The commissioner shall cause an investigation to commence within 48 hours after receipt of a report made pursuant to section 6904 of this title. (2) The commissioner shall keep the reporter and the alleged victim informed during all stages of the investigation, and shall: (A) notify the reporter, the victim, and the victim’s legal representative, if any, in writing if adult protective services or the division of licensing and protection decides not to investigate the report. The notification shall be provided within five business days after the decision is made and shall inform the reporter that he or she may ask the commissioner to review the decision. (B) notify the reporter, the victim, and the victim’s legal representative, if any, in writing if adult protective services or the division of licensing and protection refers the report to another agency. The notification shall be provided within five business days after the referral is made. (C) notify the reporter, the victim, and the victim’s legal representative, if any, in writing of the outcome of the investigation. The notification shall be provided within five business days after the decision is made and shall inform the reporter that he or she may ask the commissioner to review the decision. Sec. 7. 33 V.S.A. § 6912 is amended to read:

JOURNAL OF THE HOUSE 161 § 6912. PUBLIC EDUCATION AND DISCLOSURE OF RIGHTS AND DUTIES; POSTING OF NOTICE (a) The department, within available appropriations, shall conduct a publicity and education program to encourage the fullest degree of reporting of suspected abuse, neglect, or exploitation of vulnerable adults. (b) All agencies, facilities or institutions providing care and services to elderly or, disabled, or vulnerable adults shall inform their employees of their right and duty to report suspected incidents of abuse, neglect, or exploitation and the protections afforded them by this chapter, and shall establish appropriate policies and procedures to facilitate such reporting. (c)(1) All agencies, facilities, or institutions providing care and services to vulnerable adults shall post in a prominent and accessible location a poster describing the protections afforded to vulnerable adults by this chapter and by chapter 28 of Title 13. The poster shall include, at a minimum, the following: (A) A statement that abuse, neglect, and exploitation of vulnerable adults is unlawful. (B) A statement that it is unlawful to retaliate against a person for filing a complaint of abuse, neglect, or exploitation or for cooperating in an investigation of abuse, neglect, or exploitation. (C) A description and examples of abuse, neglect, and exploitation. (D) A statement of the range of consequences for persons who commit abuse, neglect, or exploitation. (E) If the agency, facility, or institution has more than five employees, a description of the process for filing internal complaints about abuse, neglect, and exploitation, and the names, addresses, and telephone numbers of the person or persons to whom complaints should be made. (F) The complaint process of the appropriate state and federal agencies and directions as to how to contact such agencies. (2) Except as provided in subdivision (3) of this subsection, the poster required by this subsection shall be posted in a location where it would ordinarily be viewed by vulnerable adults. (3) An agency, facility, or institution which provides home-based services shall: (A) display the poster required by this subsection in its principal place of business; and 162 SATURDAY, JUNE 4, 2005 (B) provide a written notice which includes all information contained on the poster to each vulnerable adult for whom services are provided. Sec. 8. 13 V.S.A. § 5405 is amended to read: § 5405. COURT DETERMINATION OF SEXUALLY VIOLENT PREDATORS (a) The general assembly finds that some sexual offenders should be subject to increased sex offender registry and community notification procedures. It is the intent of the general assembly that state’s attorneys utilize the provisions in this section to petition the court to designate those offenders who pose a greater risk to the public as sexually violent predators to ensure that those offenders will be required to register as sex offenders for life, and that they will be among those offenders who are included on the state’s internet sex offender registry. (b) Within ten 15 days after the conviction of a sex offender, the state may file a written request petition with the court requesting that the person be designated as a sexually violent predator. (b)(c) The determination of whether a person is a sexually violent predator shall be made by the court at the time of sentencing after reviewing the recommendations of at least two experts in the behavior and treatment of sexual offenders. (d) The court shall order a presentence investigation which shall include a psychosexual evaluation of the offender. (c)(e) In making a determination of whether the person is a sexually violent predator, the court shall examine the following: (1) the person’s criminal history; (2) any testimony presented at trial, including expert testimony as to the person’s mental state; (3) the person’s history of treatment for a personality disorder or mental abnormality connected with his or her criminal sexual behavior; (4) any mitigating evidence, including treatment history or, evidence of modified behavior, or expert testimony, which the convicted sex offender wishes to provide to the court prior to the determination; and (5) any other relevant evidence. (d)(f) The standard of proof when the court makes such a determination shall be clear and convincing evidence that the convicted sex offender suffers

JOURNAL OF THE HOUSE 163 from a mental abnormality or personality disorder that makes the person likely to engage in predatory sexually violent offenses. (g) The court shall determine whether the offender was eligible to be charged as a habitual offender as provided in section 11 of this title or a violent career criminal as provided in section 11a of this title and shall make findings as to such. (e)(h) After making a determination its determinations, the court shall issue a written decision explaining the reasons for its determination determinations and provide a copy of the decision to the department within 10 days. (i) A person who is determined to be a sexually violent predator shall be subject to sex offender lifetime registration and community notification and inclusion on the internet sex offender registry as provided in this subchapter. Sec. 9. 13 V.S.A. § 2602 is amended to read: § 2602. LEWD OR LASCIVIOUS CONDUCT WITH CHILD (a) A person who No person shall wilfully and lewdly commit any lewd or lascivious act upon or with the body, or any part or member thereof, of a child under the age of sixteen 16 years, with the intent of arousing, appealing to, or gratifying the lust, passions, or sexual desires of such person or of such child, shall be imprisoned for the first offense, not less than one year nor more than five years, or fined not more than $3,000.00, or both; for the second offense, not less than two years and not more than ten years, or fined not more than $5,000.00, or both; and for the third or subsequent offense, not less than three years and not more than 20 years, or fined not more than $10,000.00, or both. (b) A person who violates subsection (a) of this section shall be: (1) For a first offense, imprisoned not less than one year and not more than 15 years or fined not more than $5,000.00, or both. (2) For a second offense, imprisoned not less than two years and not more than 30 years or fined not more than $10,000.00, or both. (3) For a third offense, imprisoned not less than three years and up to and including life or fined not more than $25,000.00, or both. Sec. 10. 13 V.S.A. § 3253 is amended to read: § 3253. AGGRAVATED SEXUAL ASSAULT * * * (b) A person who commits the crime of aggravated sexual assault shall be punishable by a maximum sentence of life imprisonment imprisoned up to and 164 SATURDAY, JUNE 4, 2005 including life or a fine of fined not more than $50,000.00, or both. No person who receives a minimum sentence under this section shall be eligible for early release or furlough until the expiration of the minimum sentence imposed. Sec. 11. APPROPRIATION – FUNDING FOR EVALUATIONS The amount of $50,000.00 is appropriated from the general fund in fiscal year 2005 to the department of corrections for the purpose of funding psychosexual evaluations as a part of presentence investigations conducted by the department in cases involving a petition to have a person designated as a sexually violent predator as provided in 13 V.S.A. § 5405 or in sentencing for the crimes of lewd and lascivious conduct with a child as defined in 13 V.S.A. § 2602, aggravated sexual assault as defined in 13 V.S.A. § 3253, and second offense u se of electronic communication to lure a child as defined in 13 V.S.A. § 2828. This appropriation shall be used only for the purposes defined in this section, and any unexpended balance of this appropriation shall carry forward and not be reverted to the general fund. The department of corrections shall include in its annual budget proposal for fiscal year 2007 and thereafter an allocation to fund these evaluations. The annual allocation shall be estimated based on the need for such evaluations experienced in the current and previous two fiscal years. Sec. 12. REPORT (a) On or before January 15, 2006 and on or before January 15 of each year thereafter, the secretary of the agency of human services shall submit a report to the following committees: the house and senate committees on judiciary, the house committee on human services, and the senate committee on health and welfare. The report shall include: (1)(A) The number of reports of abuse, exploitation, and neglect: (i) received by adult protective services (APS) within the department of aging and independent living during the preceding year, and the total number of persons who filed reports. (ii) investigated by APS during the preceding year. (iii) substantiated by APS during the preceding year. (iv) referred to other agencies for investigation by APS during the preceding year, including identification of each agency and the number of referrals it received. (v) referred for protective services by APS during the preceding year, including a summary of the services provided. (B) For each type of report required from APS by subdivision (1)(A)

JOURNAL OF THE HOUSE 165 of this section, a statistical breakdown of the number of reports according to the type of abuse and to the victim’s:

(i) relationship to the reporter; (ii) relationship to the alleged perpetrator; (iii) age; (iv) disability or impairment; and (v) place of residency. (2) A complete description of the types of services offered by APS in response to reports of abuse, exploitation, and neglect, including identification of the funding sources for each service, past trends, and future projections for funding, and whether the current and anticipated funding is adequate to meet the service needs. (3) A complete description of the notification which APS provides to persons who make reports of abuse, exploitation, and neglect, and the notifications provided to the persons when APS determines to investigate or not to investigate a report, to conclude an investigation, to substantiate or not to substantiate a report, or to refer the report to another agency. (b) The report submitted on January 15, 2006 shall include: (1) A description of any costs incurred by the department of aging and independent living as a result of meeting the requirements of this act. (2) An update on coordination and communication between the department of aging and independent living and the department for children and families with respect to the adult abuse registry established under section 6911 of Title 33 and the child abuse registry established under section 4913 of Title 33. The update shall include how information on the registries is shared between state personnel and private employers, and whether employers are required to make separate requests from each registry or whether one request automatically produces information from both registries. (c) On or before January 1, 2006, the attorney general shall report to the house and senate committees on judiciary on whether any issues or difficulties have resulted from removing the requirement that the adult be receiving services “for more than one month” from the definition of “vulnerable adult” in subdivision 1375(8)(C) of Title 13. Sec. 13. EFFECTIVE DATE 166 SATURDAY, JUNE 4, 2005 Sec. 11 shall be effective upon passage.

Committee on the Part of Committee on the Part of The Senate The House Sen. Richard Sears Rep. William Lippert Sen. John Campbell Rep. Maxine Jo Grad Sen. Kevin Mullin Rep. Michael Kainen Pending the question, Shall the House adopt the report of the Committee of Conference? Rep. Sunderland of Rutland Town demanded the Yeas and Nays, which demand was sustained by the Constitutional number. The Clerk proceeded to call the roll and the question, Shall the House adopt the report of the Committee of Conference? was decided in the affirmative. Yeas, 133. Nays, 0. Those who voted in the affirmative are: Adams of Hartland Donovan of Burlington Johnson of South Hero Allaire of Rutland City Dostis of Waterbury Kainen of Hartford Allard of St. Albans Town Dowland of Holland Keenan of St. Albans City Ancel of Calais Dunsmore of Georgia Kennedy of Chelsea Aswad of Burlington Edwards of Brattleboro Keogh of Burlington Atkins of Winooski Emmons of Springfield Kilmartin of Newport City Audette of S. Burlington Errecart of Shelburne Kiss of Burlington Baker of West Rutland Evans of Essex Kitzmiller of Montpelier Barnard of Richmond Fallar of Tinmouth Klein of East Montpelier Bartlett of Dover Fisher of Lincoln Koch of Barre Town Bohi of Hartford Frank of Underhill Komline of Dorset Bostic of St. Johnsbury French of Randolph Krawczyk of Bennington Botzow of Pownal Grad of Moretown Kupersmith of S. Burlington Branagan of Georgia Green of Berlin Larocque of Barnet Brooks of Montpelier Haas of Rochester Larson of Burlington Canfield of Fair Haven Head of S. Burlington LaVoie of Swanton Chen of Mendon Heath of Westford Lawrence of Lyndon Clark of St. Johnsbury Helm of Castleton Leriche of Hardwick Clark of Vergennes Hosford of Waitsfield Lippert of Hinesburg Clarkson of Woodstock Houston of Ferrisburgh Livingston of Manchester Condon of Colchester Howard of Rutland City Lorber of Burlington Copeland-Hanzas of Howrigan of Fairfield Louras of Rutland City Bradford Hube of Londonderry Maier of Middlebury Corcoran of Bennington Hudson of Lyndon Malcolm of Pawlet Cross of Winooski Hunt of Essex Marcotte of Coventry Darrow of Dummerston Hutchinson of Randolph Marek of Newfane Deen of Westminster Jerman of Essex Marron of Stowe Donahue of Northfield Jewett of Ripton Martin of Springfield

JOURNAL OF THE HOUSE 167 Martin of Wolcott Nitka of Ludlow Schiavone of Shelburne McAllister of Highgate Nuovo of Middlebury Seibert of Norwich McCullough of Williston Obuchowski of Rockingham Severance of Colchester McFaun of Barre Town O'Donnell of Vernon Shand of Weathersfield McLaughlin of Royalton Orr of Charlotte Sharpe of Bristol Metzger of Milton Otterman of Topsham Shaw of Derby Milkey of Brattleboro Parent of St. Albans City Smith of New Haven Miller of Shaftsbury Partridge of Windham Smith of Morristown Minter of Waterbury Peaslee of Guildhall Sunderland of Rutland Town Molloy of Arlington Perry of Richford Sweaney of Windsor Monti of Barre City Peterson of Williston Tracy of Burlington Mook of Bennington Potter of Clarendon Valliere of Barre City Morley of Barton Pugh of S. Burlington Westman of Cambridge Morrissey of Bennington Randall of Troy Winters of Swanton Myers of Essex Reese of Pomfret Winters of Williamstown Nease of Johnson Rodgers of Glover Zuckerman of Burlington Niquette of Colchester Rusten of Halifax Those who voted in the negative are: None

Those members absent with leave of the House and not voting are: Brennan of Colchester Johnson of Canaan Trombley of Grand Isle DePoy of Rutland City Larrabee of Danville Wood of Brandon Donaghy of Poultney Masland of Thetford Wright of Burlington Endres of Milton Miller of Elmore Young of Orwell Flory of Pittsford Pellett of Chester Gervais of Enosburg Pillsbury of Brattleboro

Rules Suspended; Report of Committee of Conference Adopted H. 523 On motion of Rep. Sunderland of Rutland Town, the rules were suspended and House bill, entitled An act relating to the state’s transportation program; Appearing on the Calendar for notice, was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the Senate recede from its proposal 168 SATURDAY, JUNE 4, 2005 of amendment and that the bill be further amended by striking all after the enacting clause and inserting in lieu thereof the following: Sec. 1. TRANSPORTATION PROGRAM (a) The state’s proposed fiscal year 2006 transportation program appended to the agency of transportation’s proposed fiscal year 2006 budget, as amended by this act, is adopted to the extent federal, state, and local funds are available. (b) As used in this act, unless otherwise indicated, the term “agency” means the agency of transportation, and the term “secretary” means the secretary of transportation. As used in this act, the table heading “As Proposed” means the transportation program referenced in subsection (a) of this section; the table heading “As Amended” means the amendments as made by this act; the table heading “Change” means the difference obtained by subtracting the “As Proposed” figure from the “As Amended” figure; and the term “change” or “changes” in the text refers to the project- and program - specific amendments, the aggregate sum of which equals the net “Change” in the applicable table heading. * * * Finance and Administration * * * Sec. 2. FINANCE AND ADMINISTRATION Total authorized spending in the finance and administration program is modified as follows: FY06 As Proposed As Amended Change Total 10,263,348 10,219,348 -44,000 Source of Funds State 9,715,292 9,671,292 -44,000 Federal 548,056 548,056 0 * * * Policy and Planning * * * Sec. 3. POLICY AND PLANNING (a) Total authorized spending in the policy and planning program is modified as follows: FY06 As Proposed As Amended Change Personal Services 2,641,670 2,641,670 0 Operating 492,908 492,908 0 Grants 4,090,769 4,140,769 50,000

JOURNAL OF THE HOUSE 169 Total 7,225,347 7,275,347 50,000 Source of Funds State 1,796,692 1,806,692 10,000 Federal 5,428,655 5,468,655 40,000 Total 7,225,347 7,275,347 50,000 (b) These changes are made: (1) to fund the youth corps program with $200,000 of federal enhancement funds in lieu of $200,000 of other federal funds; and (2) to add $50,000 to fund the grant to the Northwest Regional Planning Commission provided for in Sec. 4 of this act. Sec. 4. ST. ALBANS FEDERAL STREET EXTENSION Notwithstanding 19 V.S.A. § 10j(e), the sum of $50,000 is authorized for the Northwest Regional Planning Commission to augment the Federal Street Extension scoping study done by the commission in 1995 to include additional intermodal connections for freight and passenger transportation and for engineering in preparation for construction of the extension from the St. Albans state highway to Federal Street. * * * Public Transit * * * Sec. 5. 24 V.S.A. § 5092 is amended to read: § 5092. REPORTS The agency of transportation, in cooperation with the public transit advisory council, shall develop an annual report of financial and performance data of all public transit systems that receive operating subsidies in any form from the state or federal government, including but not limited to subsidies related to the elders and persons with disabilities transportation program for service and capital equipment. Financial and performance data on the elders and persons with disabilities transportation program shall be a separate category in the report. The report shall be modeled on the Federal Transit Administration’s national transit database program with such modifications as appropriate for the various services, including the guidance found in the most current short-range public transportation plans and the most current state policy plan. The report shall describe any action taken by the agency pursuant to contractual authority to terminate funding for routes or to request service changes for failure to meet performance standards. The report shall be available to the general assembly by January 15 of each year. 170 SATURDAY, JUNE 4, 2005 Sec. 6. PUBLIC TRANSIT PROGRAM (a) Total authorized spending for the public transit program is amended to read: FY06 As Proposed As Amended Change Other 14,763,893 14,888,893 125,000 Total 14,763,893 14,888,893 125,000 Source of Funds State 5,671,599 5,796,599 125,000 Federal 9,092,294 9,092,294 0 (b) These changes are made: (1) to provide $50,000 in transportation funds as one-half of the nonfederal match for up to $400,000 in federal funds for the public transit new starts program in the event such federal funds are allocated to the new starts program under Sec. 65 of this act; and (2) to provide $75,000 in transportation funds to be disbursed in the discretion of the secretary to public transit providers in financial distress. Sec. 7. RURAL PUBLIC TRANSIT PREVENTIVE MAINTENANCE (a) A new project, the rural public transit preventive maintenance project, is added to the public transit program. The project shall be administered by the agency in accordance with federal transit administration regulations. (b) The public transit program is modified as follows. Federal funds in the amount of $500,000 proposed for use in the new starts program are reallocated to the rural public transit preventive maintenance project. Project spending authority shall be allocated to each transit provider in the state, other than the Chittenden County Transportation Authority (CCTA), according to the percentage of operating assistance funds that each provider was reimbursed from the statewide total of operating assistance funds in fiscal year 2005, excluding assistance received by CCTA, from the state operating assistance program and the following federal grant programs: 5307, 5311, 5311 elderly and disabled, job access reverse commute, and congestion mitigation air quality operating assistance, as detailed in the provider’s most recent audit. (c) In the event federal funds are allocated to a transit provider pursuant to this section and the provider does not have the local matching funds which are required to draw down the full amount of allocated federal funds, or the provider does not have federally eligible preventive maintenance expenses to

JOURNAL OF THE HOUSE 171 utilize fully the allocated federal funds, the unutilized federal funds shall be reallocated to the other transit providers receiving funds under the project in accordance with the formula set forth in subsection (b) of this section adjusted to exclude the transit provider unable to utilize the federal funds. (d) Any funds provided by this section to a transit provider in fiscal year 2006 s hall not be used to reduce the amount of locally generated funds committed by the provider for use in fiscal year 2006 as a condition to receiving state assistance. Sec. 8. CHITTENDEN COUNTY TRANSPORTATION AUTHORITY PREVENTIVE MAINTENANCE A new project, the Chittenden County Transportation Authority (CCTA) preventive maintenance project, is added to the public transit program. In the event the Chittenden County Metropolitan Planning Organization (CCMPO), with respect to any CCMPO area project in which the spending of federal funds is authorized in the fiscal year 2006 transportation program, approves of a reduction in the authorized spending of federal funds and reallocates the unspent federal funds to the CCTA preventive maintenance project within the CCMPO transportation improvement plan (TIP), the reallocated federal funds in the TIP up to a total of $500,000 shall be allocated to the CCTA preventive maintenance project. Upon the CCMPO’s amendment of the TIP as described in this section, the agency shall make such funds available to the CCTA. * * * Maintenance * * * Sec. 9. MAINTENANCE PROGRAM (a) The agency shall identify the segments of the state highway system on which there is a significant volume of bicycle traffic and direct the maintenance districts, within the constraints of authorized spending and in coordination with state highway maintenance work, to sweep and repair the shoulders of such segments to improve the shoulder paths available to bicyclists. Whenever possible, the maintenance districts shall coordinate with the bike and ped coalition to identify bicycle rides and events which could benefit from pre-ride maintenance of state highways. (b) The sum of $25,000 in transportation funds is authorized for the shoulder maintenance work described in subsection (a) of this section. The agency shall allocate the spending authority among the maintenance districts, taking into consideration the volume of bicycle traffic on different state highway segments and the condition of the shoulder paths along such segments which are available to bicyclists. 172 SATURDAY, JUNE 4, 2005 (c) Total spending authority for the maintenance program, including the changes made in subsections (a) and (b) of this section, is amended to read: FY06 As Proposed As Amended Change Personal 29,352,669 29,352,669 0 Operating 24,446,617 24,471,617 25,000 Grants 987,800 987,800 0 Total 54,787,086 54,812,086 25,000 Source of Funds State 54,079,586 54,104,586 25,000 Federal 707,500 707,500 0 Total 54,787,086 54,812,086 25,000 Sec. 10. MAINTENANCE DISTRICTS The agency’s maintenance districts shall provide the same level of service or better to the public and district municipalities as in prior fiscal years. By January 15, 2006, the secretary shall report by letter to the house and senate committees on transportation on the configuration of management and administrative personnel in the agency’s nine maintenance districts and on the level of service provided by the maintenance districts to the public and district municipalities. * * * Aviation Program * * * Sec. 11. AVIATION PROGRAM (a) The following modifications are made to the program development – aviation projects program: FY06 As Proposed As Amended Change PE 300,000 0 -300,000 Construction 350,000 0 -350,000 Other 250,000 0 -250,000 Total 900,000 0 -900,000 Source of Funds State 230,000 0 -230,000 Federal 670,000 0 -670,000 Total 900,000 0 -900,000

JOURNAL OF THE HOUSE 173 (b) The aviations operations program is changed to the aviation program, and total authorized spending is modified as follows: FY06 As Proposed As Amended Change PE 300,000 600,000 300,000 Construction 907,500 1,257,500 350,000 Other 7,164,916 7,414,916 250,000 Total 8,372,416 9,272,416 900,000 Source of Funds State 1,992,416 2,222,416 230,000 Federal 6,380,000 7,050,000 670,000 Total 8,372,416 9,272,4160 900,000 (c) These changes are made to eliminate aviation projects as a line item within program development and to consolidate all aviation projects within the aviation program. * * * Rest Areas * * * Sec. 12. REST AREAS CONSTRUCTION PROGRAM (a) The Hartford I-91 rest area sewer line project is authorized to proceed provided the state’s share of the project cost is limited to 10 percent of the costs determined by federal authorities to be eligible for federal cost share participation. Subject to the 10 percent limitation, if the total cost of the project exceeds the amount determined to be eligible for federal cost share participation, the project may proceed if the department of buildings and general services determines that funding to cover the project costs not eligible for federal participation is or will be available from sources other than the transportation fund. (b) From the point where the current Hartford town sewer line terminates north of the I-91 rest area in Hartford on U.S. Route 5, south to the rest area, sewer connections shall not be authorized, except for buildings existing at the time of passage of this act, until the town of Hartford amends its zoning bylaws to conform with the zoning amendment recommendations found in the Route 5 south study dated May 2001. (c) The agency and the department of buildings and general services are directed to confer with the town of Hartford on all phases of the upgrades to the rest areas on the north- and southbound portions of I-91 in Hartford. 174 SATURDAY, JUNE 4, 2005 Sec. 13. WELCOME CENTER AND REST AREA MONUMENTS The sum of $25,000 in transportation funds is authorized for expenditure by the agency to fund the construction of monuments honoring the builders of Vermont’s interstate system to be located at welcome centers and rest areas at entry points to the state. Sec. 14. REST AREAS AND INFORMATION CENTERS The department of buildings and general services is directed to design a basic rest area and design a basic information center which shall serve as the models for future construction of these facilities. These designs shall provide the public with necessary facilities, and shall minimize the cost of providing these services. The designs and cost information shall be presented to the house and senate committees on transportation by January 15, 2006. * * * Transportation Buildings * * * Sec. 15. TRANSPORTATION BUILDINGS (a) Total authorized spending in the transportation buildings program is modified as follows: FY06 As Proposed As Amended Change PE 200,000 150,000 -50,000 Construction 1,047,548 1,147,548 100,000 Total 1,247,548 1,297,548 0 Source of Funds State 1,247,548 1,297,548 0 (b) These changes are made (1) to reduce funding for development and evaluation by $50,000 in transportation funds and (2) to increase funding for central garage repairs by $100,000. * * * Dressler Barn * * * Sec. 16. CONVEYANCE OF DRESSLER BARN SITE TO TOWN OF WINDSOR (a) Notwithstanding 22 V.S.A. § 743(1) (historic preservation; cooperation of agencies), the secretary of transportation, as agent for the state of Vermont, is authorized to convey the historic Dressler Barn site, adjacent to the agency of transportation’s Windsor maintenance facility, to the town of Windsor.

JOURNAL OF THE HOUSE 175 (b) Notwithstanding 19 V.S.A. § 10k(b) (statement of policy; asset management; sale of state property), the conveyance authorized by this section may be for nominal consideration. However, the town of Windsor shall be responsible, at its own expense, for obtaining any needed surveys and subdivision approvals. * * * Spring Projects * * * Sec. 17. Sec. 69b of H.143 of 2005 is amended by adding the following project to the list of projects: Program Project name Route Project number Paving Bolton-South I-89 south IM-089-2(36) Burlington * * * Program Development - State Bridge * * * Sec. 18. PROGRAM DEVELOPMENT - STATE BRIDGE The following modifications are made to the program development - state bridge program: (1) The following project and its associated funding as approved or amended by this act is moved to the bridge maintenance program: System Project Project Number Description State Cambridge BHF 030-2(19)S Rehab BR20, Lamoille River (2) Total spending in the state bridge program, including the changes made in subdivision (1) of this section, is authorized as follows. FY06 As Proposed As Amended Change Total 26,868,884 26,347,832 -521,052 Source of Funds State 4,769,674 4,665,464 -104,210 Federal 22,099,210 21,682,368 -416,842 Total 26,868,884 26,347,832 -521,052 * * * Program Development - Interstate Bridge * * * Sec. 19. PROGRAM DEVELOPMENT - INTERSTATE BRIDGE The following modifications are made to the program development - interstate bridge program: 176 SATURDAY, JUNE 4, 2005 (1) Authorized spending for the Putney IM 091-1(31) interstate project (Bridge No. 17, I-91 under US 5) is amended to read: FY06 As Proposed As Amended Change Construction 2,257,756 0 -2,257,756 Total 2,257,756 0 -2,257,756 Source of Funds State 225,776 0 -225,776 Federal 2,031,980 0 -2,031,980 Total 2,257,756 0 -2,257,756 (2) Authorized spending on interstate bridge development and evaluation is amended to read: FY06 As Proposed As Amended Change Other 410,000 204,500 -205,500 Total 410,000 204,500 -205,500 Source of Funds State 41,000 20,450 -20,550 Federal 369,000 184,050 -184,950 Total 410,000 204,500 -205,500 (3) The following projects and their associated funding as approved or amended by this act are moved to the bridge maintenance program: System Project Project Number Description Interstate Bolton IM 090-2(29) Rehab BR#51, I-89 Bolton Interstate Putney IM 091-1(31) Rehab bridge #17, I-91 (4) Total spending in the interstate bridge program, including the changes made in subdivisions (1) through (3) of this section, is authorized as follows. FY06 As Proposed As Amended Change Total 5,581,764 204,500 -5,377,264 Source of Funds State 558,177 20,450 -537,727 Federal 5,023,587 184,050 -4,839,537

JOURNAL OF THE HOUSE 177 Total 5,581,764 204,500 -5,377,264 * * * Enhancements * * * Sec. 20. POULTNEY LIGHT PROJECT Authorized spending for the Poultney STP EH00(20) project is amended to read: FY06 As Proposed As Amended Change Construction 12,500 31,250 18,750 Total 12,500 31,250 18,750 Source of Funds Federal 10,000 25,000 15,000 Local 2,500 6,250 3,750 Sec. 21. VERMONT LOCAL ROADS (a) Total authorized spending in the Vermont local roads program is amended to read: FY06 As Proposed As Amended Change Grants 783,700 783,700 0 Total 783,700 783,700 0 Source of Funds State 643,700 333,867 -309,833 Federal 140,000 449,833 309,833 (b) These changes are made to replace transportation funds with federal enhancement funds in the amount of $309,833. Sec. 22. ENHANCEMENT FUNDS Notwithstanding 19 V.S.A. § 38, in fiscal years 2007 and 2008, the youth corps program and the clean and clear initiative of the Vermont local roads program shall be funded with enhancement funds. * * * Cancellation of Projects * * * Sec. 23. CANCELLATION OF PROJECTS Pursuant to 19 V.S.A. § 10g(h) (legislative approval for cancellation of projects), the general assembly approves cancellation of the following projects: 178 SATURDAY, JUNE 4, 2005 (1) Addison (Chimney Point) STP EH99(17) (construction of dock for sail ferry) (cancellation requested by sponsor town); (2) Chelsea STP EH02( ) (construction study for sidewalks in Chelsea village) (cancellation requested by sponsor town); (3) Derby Line Village STP EH02( ) (study of sidewalks in Derby Line village) (cancellation requested by sponsor town); (4) Hinesburg STP EH99(10) (construction of sidewalks/crosswalks in Hinesburg village) (cancellation requested by sponsor town); (5) North Hero STP EH02( ) (rehabilitation of existing town hall for visitor center) (cancellation requested by sponsor town); and (6) Richmond STP EH 97(15) (acquisition of scenic easement near I - 89, Exit 11 in Richmond) (cancellation requested by sponsor; property owner no longer interested in granting easement). * * * Program Development - Park and Ride Program * * * Sec. 24. MUNICIPAL PARK AND RIDE GRANT PROGRAM The sum of $100,000 is authorized for use by the agency of transportation for the purpose of implementing the program established in Sec. 61 of No. 160 of the 2003 Adj. Sess. (2004). Sec. 25. PARK AND RIDE PROGRAM The following modifications are made to the program development - park and ride facilities program. Fiscal year 2005 funding for construction of the Ferrisburgh CMG Park (15) facility in the amount of $310,000 in state funds shall carry forward and be utilized in the fiscal year 2006 transportation program. Construction of the facility shall proceed over a two - fiscal - year period. * * * Program Development – Roadway * * * Sec. 26. PROGRAM DEVELOPMENT − ROADWAY PROGRAM The following modifications are made to the program development − roadway program: (1) Spending authority for the Hardwick ST 030-3(4) project (bank stabilization along VT 15 in landslide area easterly of Hardwick village) is added to read: FY06 As Proposed As Amended Change Construction 140,000 140,000

JOURNAL OF THE HOUSE 179 Total 140,000 140,000 Source of Funds State 140,000 140,000 (2) Fiscal year 2005 funding for construction of the Hubbardton ST 0161(23) project (reconstruction of VT 30 to prevent periodic flooding of roadway) in the amount of $300,000 in state funds shall carry forward and be utilized in the fiscal year 2006 program development program. (3) Spending authority for the Hubbardton ST 0161(23) project is added to read: FY06 As Proposed As Amended Change Construction 700,000 700,000 Total 700,000 700,000 Source of Funds State 140,000 140,000 Federal 560,000 560,000 (4) Due to anticipated scheduling delays, spending authority for the Cabot-Danville FEGC F 028-3(26)C/1 is amended to read: FY06 As Proposed As Amended Change PE 50,000 50,000 0 Construction 500,000 0 -500,000 Total 550,000 50,000 -500,000 Source of Funds State 27,500 2,500 -25,000 Federal 522,500 47,500 -475,000 Total 550,000 50,000 -500,000 (5) Funding for the North Bennington STP 9646(1) S project (reconstruction of Water Street/TH 2/VT 67A) is added to read: FY06 As Proposed As Amended Change Construction 637,756 637,756 Total 637,756 637,756 Source of Funds 180 SATURDAY, JUNE 4, 2005 State 125,776 125,776 Federal 511,980 511,980 Total 637,756 637,756 (6) The Old Bennington STP 1400(5) project (reconstruction of Monument Avenue) shall be included in the federal fiscal years 2005-2007 state transportation improvement program (STIP) with federal funding scheduled in the federal fiscal years during such period as determined by the secretary. (7)(A) Spending authority for the Bennington Bypass South NHF 019-1(4) project is amended to read: FY06 As Proposed As Amended Change PE 1,131,485 300,000 -831,485 ROW 0 300,000 300,000 Total 1,131,485 600,000 -531,485 Source of Funds State 226,297 360,000 133,703 Federal 905,188 240,000 -665,188 Total 1,131,485 600,000 -531,485 (B) For fiscal year 2006, the funds authorized for the Bennington Bypass South NHF 019 - 1(4) shall be used for design work necessary to identify sites for the cost-effective disposal of earth borrow resulting from the construction of the Bennington Bypass North project north of Vermont Route 9 and for the acquisition of earth borrow disposal sites so identified. (C) In the event the funds authorized for right-of-way acquisition are insufficient to maintain the approved schedule for advancement of the Bennington Bypass North NHF 019-1(5) project, the secretary, after consultation with the joint transportation oversight committee, is authorized to allocate the funds required to maintain the approved schedule. (8) The following projects have received federal earmark funds and are added to the roadway program – statewide development and evaluation for fiscal year 2005 and fiscal year 2006: (A) Windsor – Industrial Access Road: $1,000,000 from the federal Transportation and Community and System Preservation Program (TCSP);

JOURNAL OF THE HOUSE 181 (B) Swanton – Missisquoi Wildlife Refuge: $500,000 from the federal Public Lands Highway Program (PLH); (C) Norwich – Silvio Conte National Fish and Wildlife Refuge Educational Outreach Center: $1,000,000 from the federal Public Lands Highway Program (PLH); (D) Johnson STP 030-2( ): $1,984,000 from the Section 117 Federal Highway Administration Surface Transportation Funds for improvements on VT 15; (E) Essex Junction STP 5300( ): $496,000 from the Section 117 Federal Highway Administration Surface Transportation Funds. Sec. 27. REPEAL Sec. 11 of No. 160 of the Acts of the 2003 Adj. Sess. (2004) (restrictions on Bennington Bypass South project) is repealed. * * * Program Development – Safety and Traffic Operations * * * Sec. 28. PROGRAM DEVELOPMENT - SAFETY AND TRAFFIC OPERATIONS All highway projects in which safety is a dominant feature, including projects in which the construction of a roundabout is an option, shall be listed and considered as part of the safety and traffic operations program. * * * Program Development – Multimodal Facilities * * * Sec. 29 BELLOWS FALLS MULTIMODAL FACILITY Notwithstanding 19 V.S.A. § 10j(e), transportation funds authorized for expenditure on the Bellows Falls multimodal facility may be used to purchase the Bellows Falls train station located on real property owned by the state. * * * Rail Program * * * Sec. 30. RAIL PROGRAM (a) The following modifications are made to the program development – rail projects program. These changes are made to eliminate rail projects as a line item within program development and to consolidate all rail projects within the rail program. FY06 As Proposed As Amended Change PE 686,111 0 -686,111 Construction 1,125,000 0 -1,125,000 182 SATURDAY, JUNE 4, 2005 Other 635,000 0 -635,000 Total 2,446,111 0 -2,446,111 Source of Funds State 1,186,111 0 -1,186,111 Federal 1,260,000 0 -1,260,000 (b) Spending authority for the Bellows Falls railroad tunnel project is added as follows. In the event federal earmark funds are secured for the project, any state funds not required to match the federal funds and any state funds expended on the project which are reimbursable from the federal funds shall be so reimbursed, and the total of such available funds shall be used, in the discretion of the secretary, to match federal funds pursuant to Secs. 64 and 65 of this act. FY06 As Proposed As Amended Change Total 700,000 700,000 Source of Funds State 700,000 700,000 (c) Spending authority for the purchase of interstate passenger rail service is amended to read as follows. This change is made to adjust authorized spending to anticipated contract obligations. FY06 As Proposed As Amended Change Total 3,000,000 2,700,000 -300,000 Source of Funds State 3,000,000 2,700,000 -300,000 (d) Authorized spending in the rail program, including the changes made in subsections (a) through (c) of this section, is amended to read: FY06 As Proposed As Amended Change PE 89,273 775,384 686,111 Construction 1,375,000 3,200,360 1,825,000 Other 6,161,458 6,496,458 335,000 Total 7,626,091 10,472,202 2,846,111 Source of Funds State 6,535,818 8,121,929 1,586,111

JOURNAL OF THE HOUSE 183 Federal 1,090,273 2,350,273 1,260,000 Total 7,626,091 10,472,202 2,846,111 Sec. 31. SUNDERLAND RAILROAD BRIDGE In connection with the Albany-Bennington-Rutland-Burlington (ABRB) project, the Sunderland Rail 04-9044 C/2 project (replacement of Vermont Railway Bridge No. 63 over Mill Brook at MP 17.93) shall be considered specifically authorized for purposes of chapter 58 of Title 5 of the Vermont statutes. Sec. 32. LAMOILLE VALLEY RAIL CORRIDOR From the net cash proceeds received by the state from the Lamoille valley railroad salvage project, the sum of $75,000 shall be reserved and utilized for the maintenance of the Lamoille valley rail banked corridor. * * * Vermont Rail Authority Summer Study * * * Sec. 33. VERMONT RAIL AUTHORITY STUDY COMMITTEE (a) A summer study committee is established, consisting of two members of the house committee on transportation and one member of the house committee on ways and means, designated by the speaker of the house; two members of the senate committee on transportation and one member of the senate committee on finance, designated by the committee on committees; the state treasurer or designee; the secretary of administration or designee; the secretary of transportation; two representatives from a rail organization as designated by the governor; one representative from the regional planning commissions as designated by the Vermont association of planning and development agencies; a representative of the metropolitan planning organization; and a representative of the Vermont rail advisory council designated by the council. The secretary of transportation shall serve as chair of the committee. Legislative members of the committee shall be entitled to per diem compensation and expense reimbursement as provided in 2 V.S.A. § 406(a). Other members of the committee who are not state employees shall be entitled to per diem compensation and expense reimbursement as provided in 32 V.S.A. § 1010. (b) The committee shall make recommendations regarding the advisability of creating a rail authority in the state of Vermont for the primary purpose of developing additional capacity to move freight more effectively for the economic benefit of the state of Vermont. The committee shall consider the following: 184 SATURDAY, JUNE 4, 2005 (1) Advantages and disadvantages of transferring responsibility for management of state-owned railroad properties from the agency of transportation to an authority; (2) Essential components of a business plan for an authority, including how an authority would operate, identification of funding mechanisms for both project delivery and routine operations, and how it will have an impact on the transportation fund and the state's bond rating; (3) Efficient planning, development, and delivery of railroad projects; (4) Identification of priority rail projects and identification of rail corridors for priority projects; (5) Efficient coordination of adjustments to railroad facilities required by highway construction projects; (6) Impact on railroad operators; (7) Support of economic development activity in the state; and (8) Regulatory jurisdiction of the transportation board over highway-rail crossings, farm crossings, fences, and other matters involving railroads. (c) The agency of transportation, with the assistance of the legislative council and the joint fiscal office, shall provide administrative support for the committee. (d) The committee shall submit a report of recommendations to the house and senate committees on transportation by January 15, 2006, at which time the committee’s existence shall terminate. * * * Town Highway Bridge Program * * * Sec. 34. TOWN HIGHWAY BRIDGE PROGRAM The following modifications are made to the town highway bridge program: (1) Spending authority for the Leicester BRF 0160(3) S project (replacement of Bridge No. 6 over Otter Creek on Leicester Junction Road/TH 1) is added to read: FY06 As Proposed As Amended Change PE 5,500 5,500 Construction 1,200,000 1,200,000 Total 1,205,500 1,205,500 Source of Funds

JOURNAL OF THE HOUSE 185 State 120,550 120,550 Federal 964,400 964,400 Local 120,550 120,550 (2) Authorized spending for the Morrisville BRZ 1446(15) project is amended to read: FY06 As Proposed As Amended Change Construction 378,531 0 -378,531 Total 378,531 0 -378,531 Source of Funds State 37,853 0 -37,853 Federal 302,825 0 -302,835 Local 37,853 0 -37,853 (3) The following projects and their associated funding as approved or amended by this act are moved to the bridge maintenance program: System Project Project Number Description Town Johnson BHO 1448(18) Rehab BR6 Town Montpelier BHM 6400(25) Rehab BR11 Town Norwich TH2 9625 Rehab BR46 (4) Notwithstanding 19 V.S.A. § 309a, the local share of the Bethel BRF 0241(33)C/2 project in all its phases through construction of a replacement bridge shall be five percent. Fiscal year 2006 spending authority for the project is amended to read: FY06 As Proposed As Amended Change Construction 2,500,000 2,500,000 0 Total 2,500,000 2,500,000 0 Source of Funds State 250,000 375,000 125,000 Federal 2,000,000 2,000,000 0 Local 250,000 125,000 -125,000 Total 2,500,000 2,500,000 0 186 SATURDAY, JUNE 4, 2005 * * * Town Highway Class 2 Roadway * * * Sec. 35. TOWN HIGHWAY CLASS 2 ROADWAY Total authorized spending in the town highway class 2 roadway program is modified as follows. In the discretion of the secretary, up to $250,000 of the authorized funds may be reallocated to the town highway structures program. FY06 As Proposed As Amended Change Grants 4,248,750 4,748,750 500,000 Total 4,248,750 4,748,750 500,000 Source of Funds State 4,248,750 4,748,750 500,000 * * * Town Highway Emergency Fund * * * Sec. 36. TOWN HIGHWAY EMERGENCY Total authorized spending in the town highway emergency program is modified as follows: FY06 As Proposed As Amended Change Grants 750,000 57,129 -692,871 Total 750,000 57,129 -692,871 Source of Funds State 750,000 57,129 -692,871 * * * Vermont Local Roads * * * Sec. 37. VERMONT LOCAL ROADS PROGRAM (a) Total authorized spending in the Vermont local roads program is modified as follows: FY06 As Proposed As Amended Change Grants 783,700 783,700 0 Total 783,700 783,700 0 Source of Funds State 643,700 333,867 -309,833 Federal 140,000 449,833 309,833 (b) These changes are made to replace transportation funds with federal enhancement funds in the amount of $309,833.

JOURNAL OF THE HOUSE 187 * * * Town Structures Program * * * Sec. 38. Sec. 254 of No. 122 of the Acts of the 2003 Adj. Sess. (2004) is amended to read: Sec. 254. Transportation - town highway structures Grants 3,494,500 3,944,500 Source of Funds Transportation fund 3,494,500 3,944,500 (a) Notwithstanding any other provision of law, in fiscal year 2004, the sum of $3,500,000.00 shall revert to the transportation fund from the town highway structures account, account # 8100000300. (b) Notwithstanding any other provision of law, in fiscal year 2005, the sum of $492,122.00 shall revert to the transportation fund from the town highway structures account, account # 8100000300. (c) Of the above appropriation, $450,000 is requested as a supplemental appropriation in accordance with 19 V.S.A. § 306(e) to fund additional costs for projects the agency has previously committed to and shall not be awarded as new grants. Sec. 39. Sec. 258 of No. 122 of the Acts of the 2003 Adj. Sess. (2004) is amended to read: Sec. 258. Transportation – town highway bridges Personal services 3,610,000 3,610,000 Operating expenses 16,903,263 16,453,263 Grants 418,000 418,000 Total 20,931,263 20,481,263 Source of Funds Transportation fund 7,129,406 6,679,406 Local match 1,384,030 1,384,030 Federal funds 12,417,827 12,417,827 Total 20,931,263 20,481,263 * * * Central Garage * * * Sec. 40. 19 V.S.A. § 13(c) is amended to read: 188 SATURDAY, JUNE 4, 2005 (c) There shall be established and maintained within the central garage fund, a separate transportation equipment replacement account for the purposes stated in subsection (b) of this section. Beginning in In fiscal year 2002 2006, $1,400,000.00 and in fiscal year 2007 and thereafter, an amount equal to two-thirds of one percent of the prior year transportation fund appropriation, but not less than $1,400,000.00, shall be transferred prior to August 1 from the transportation fund to the central garage fund and allocated to the transportation equipment replacement account, and beginning in fiscal year 2001, and thereafter, an amount not less than the sum of equipment depreciation expense and net equipment sales from the prior fiscal year, shall be allocated prior to August 1 from within the central garage fund to the transportation equipment replacement account. All expenditures from this account shall be appropriated by the general assembly and used exclusively for the purchase of equipment as authorized in subsection (b) of this section. Sec. 41. AGENCY VEHICLE FLEET Pursuant to 19 V.S.A. § 13(b), the agency is authorized to add one plow truck to the fleet to service an increase in lane mileage in district 1 and one aerial lift truck for signal repair and maintenance. Sec. 42. PROGRAM DEVELOPMENT VEHICLE FLEET The program development program is modified to eliminate the proposed addition of two vehicles, one for use by the materials and research program and one for use by the bridge inspection program. Spending authority is reduced by the amount of $60,000 in transportation funds. * * * Transportation Funds * * * Sec. 43. 19 V.S.A. § 11a is amended to read: § 11a. TRANSPORTATION FUNDS APPROPRIATED FOR SUPPORT OF GOVERNMENT For fiscal year 2006 and thereafter, the The maximum amount of transportation funds that may be appropriated for the support of government, other than for the agency of transportation, the transportation board, transportation pay act funds, the cost of maintaining and staffing rest areas, construction of transportation capital facilities used by the agency of transportation, and transportation debt service, for fiscal year 2006 shall not exceed 18.5 18.0 percent of the total of the prior fiscal year transportation fund appropriations and for fiscal year 2007 shall not exceed $38,221,563.00. * * * Joint Transportation Oversight Committee * * * Sec. 44. 19 V.S.A. § 12b(b) is amended to read:

JOURNAL OF THE HOUSE 189 (b) The committee shall have authority to meet during adjournment and for official duties, members. Members shall be entitled to compensation and reimbursement pursuant to 2 V.S.A. § 406. The committee shall have the assistance of the staff of the legislative council and the joint fiscal office. Sec. 45. 19 V.S.A. § 12b(d) is added to read: (d)(1) In coordination with the regular meetings of the joint fiscal committee, the joint transportation oversight committee shall meet in mid-July, mid - September, and mid-November. At these meetings, the secretary shall report on the status of the state’s transportation finances and transportation programs, including a report on contract bid awards versus project estimates and a detailed report on all known or projected cost overruns, project savings and funding availability from delayed projects; and the agency’s actions taken or planned to cover the cost overruns and to reallocate the project savings and delayed project funds with respect to: (A) all paving projects other than statewide maintenance programs; and (B) all projects in the roadway, state bridge, interstate bridge, or town bridge programs with authorized spending in the fiscal year of $500,000.00 or more with a cost overrun equal to 20 percent or more of the authorized spending or generating project savings or delayed project available funding equal to 20 percent or more of the authorized spending. (2) In addition , at the July meeting of the joint transportation oversight committee, the secretary shall report to the committee on the agency’s plans to adjust spending to any changes in the consensus forecast for transportation fund revenues. Sec. 46. 19 V.S.A. § 13(i) is added to read: (i) Each year at the September meeting of the joint transportation oversight committee called pursuant to 19 V.S.A. § 12b(d), the agency shall present to the joint transportation oversight committee a report detailing: (1) activity within the central garage fund during the prior fiscal year; (2) the calculation of equipment rental rates approved by the agency to be charged by the central garage; and (3) the condition of the vehicle fleet, including plans for upgrading the fleet to optimal condition. Sec. 47. FALL REPORTS 190 SATURDAY, JUNE 4, 2005 At the summer and fall meetings in 2005 of the joint transportation oversight committee pursuant to 19 V.S.A. § 12b(d), the secretary shall report on project funding decisions made pursuant to Secs. 62 through 64 of this act. * * * Connecticut River Bridge Advisory Commission * * * Sec. 48. CONNECTICUT RIVER BRIDGE ADVISORY COMMISSION (a) 19 V.S.A. § 36 (Connecticut River bridge advisory commission) is repealed. (b) This section shall take effect on the date that the same or similar provisions are enacted in New Hampshire. (c) The agency of transportation shall annually by January 15 submit to the house and senate committees on transportation a report on the status of all Connecticut River bridge projects. * * * Emergency Repairs to Existing Facilities * * * Sec. 49. 19 V.S.A. § 518(a) is amended to read: (a) For purposes of this section, the term “minor alterations to existing facilities” means: (1) activities Activities which qualify as “categorical exclusions” under 23 C.F.R. § 771.117(c) and the National Environmental Policy Act of 1969, as amended, 42 U.S.C. §§ 4321-4347, and do not require a permit under 10 V.S.A. chapter 151 (Act 250); or (2) Activities involving emergency repairs to or emergency replacement of an existing bridge or culvert, even though the need for repairs or replacement does not arise from damage caused by a natural disaster or catastrophic failure from an external cause; provided, however, that the activities do not require a permit under 10 V.S.A. chapter 151 (Act 250). Any temporary rights under this subdivision shall be limited to 10 years from the date of taking. * * * Prefabricated Bridges * * * Sec. 50. PREFABRICATED BRIDGES In the fiscal year 2007 transportation program, the agency shall identify potential candidates on the state, interstate, and town highway bridge systems for development and construction utilizing prefabricated components and construction techniques.

JOURNAL OF THE HOUSE 191 * * * Municipal Equipment Loan Fund; Salt and Sand Sheds * * * Sec. 51. MUNICIPAL EQUIPMENT LOAN FUND; EXPANSION OF FUND PURPOSES; SALT AND SAND SHEDS (a) The state treasurer and the state traffic committee, as administrators of the municipal equipment loan fund established in 29 V.S.A. chapter 61, are directed to examine the possibility of expanding the use of the loan fund to cover the costs of municipal salt and sand sheds. Section 39 of Title 19 currently requires the agency of transportation to work with municipalities to “… provide assistance in designing effective low cost enclosures for salt or sand storage, including off-the-shelf designs that incorporate economical construction materials to the extent allowed by the multisector general permit (MSGP) issued for Vermont by the United States Environmental Protection Agency.” The treasurer and traffic committee shall confer with the secretary of natural resources in developing recommendations which address: (1) The cost to municipalities of acquiring salt and sand sheds which conform to the specifications resulting from assistance provided in 19 V.S.A. § 39. (2) Increases to the loan fund necessary to implement an expansion of fund purposes to include salt and sand sheds. (b) The treasurer and traffic committee shall submit a report to the house and senate committees on transportation by January 15, 2006. * * * Fund Transfer Authority * * * Sec. 52. 32 V.S.A. § 706 is amended to read: § 706. TRANSFER OF APPROPRIATIONS Notwithstanding any authority granted elsewhere, all transfers of appropriations shall be made pursuant to this section upon the initiative of the governor, or upon the request of a secretary or commissioner. (a)(1) With the approval of the governor, the secretary of administration may: (1)(A) Transfer balances of appropriations not to exceed $50,000.00 made under any appropriation act for the support of the government from one component of an agency, department, or other unit of state government, to any other component of the same agency, department, or unit; (2)(B) Transfer balances of code classifications, as defined in any appropriation act for the support of the government, of all departments and agencies when deemed necessary; 192 SATURDAY, JUNE 4, 2005 (3)(C) Advance $1,000.00 to the central surplus commodity revolving fund. (b)(2) Except as specified in subsection (a) subdivisions (1) and (4) of this section, the transfer of balances of appropriations may be made only with the approval of the emergency board. (c)(3) For the specific purpose of balancing and closing out fund accounts at the end of a fiscal year, the commissioner of finance and management may adjust a balance within an account of an agency or department in an amount not to exceed $100.00. (4) With the approval of the governor, the secretary of transportation may transfer balances of appropriations made under any appropriation act from one department or unit of the agency of transportation to another department or unit of the agency of transportation for the specific purpose of funding authorized transportation projects which have been approved by the federal government for advance construction in which the expenditure of state funds will be reimbursed by federal funds when the federal funds become available, and the transfer is limited to funds which have been approved for reimbursement. Upon such reimbursement, the transferred funds shall be transferred back to the original department or unit of the agency of transportation from which the initial transfer for purposes of funding the advance construction was made. When any appropriation is transferred pursuant to this subdivision, the secretary of transportation shall report the transfer to the house and senate committees on transportation when the general assembly is in session, and when the general assembly is not in session, to the joint transportation oversight committee at one of the meetings scheduled pursuant to 19 V.S.A. § 12b(d). * * * Project Prioritization * * * Sec. 53. 19 V.S.A. § 10g(l) and (m) are added to read: (l) The agency shall develop a numerical grading system to assign a priority rating to all program development paving, program development roadway, program development safety and traffic operations, program development state and interstate bridge, town highway bridge, and bridge maintenance projects. The rating system shall consist of two separate, additive components as follows. (1) One component shall be limited to asset management-based factors which are objective and quantifiable and shall consider, without limitation, the following:

JOURNAL OF THE HOUSE 193 (A) the existing safety conditions in the project area and the impact of the project on improving safety conditions; (B) the average, seasonal, peak, and nonpeak volume of traffic in the project area, including the proportion of traffic volume relative to total volume in the region, and the impact of the project on congestion and mobility conditions in the region; (C) the availability, accessibility, and usability of alternative routes; (D) the impact of the project on future maintenance and reconstruction costs; and (E) the relative priority assigned to the project by the relevant regional planning commission or the Chittenden County metropolitan planning organization. (2) The second component of the priority rating system shall consider, without limitation, the following factors: (A) the functional importance of the highway or bridge as a link in the local, regional, or state economy; and (B) the functional importance of the highway or bridge in the social and cultural life of the surrounding communities. (m) The annual transportation program shall include an individual priority rating pursuant to subsection (l) of this section for each highway paving, roadway, safety and traffic operations, and bridge project in the program along with a description of the system and methodology used to assign the ratings. * * * Vehicle Inspection Certificates and Revenue * * * Sec. 54. 23 V.S.A. § 1230 is amended to read: § 1230. FEES CHARGE For each inspection certificate issued by the department of motor vehicles, the commissioner shall be paid $0.50 $3.00; provided that state and municipal inspection stations that inspect only state or municipally owned and registered vehicles shall not be required to pay a fee. Sec. 55. 23 V.S.A. § 1222(b) is amended to read: § 1222. INSPECTION OF REGISTERED VEHICLES * * * (b) If a fee is charged for inspection, it shall be based upon the hourly rate charged by each official inspection station or it may be a flat rate fee and, in 194 SATURDAY, JUNE 4, 2005 either instance, the fee shall be prominently posted and displayed beside the official inspection station certificate. In addition, the official inspection station may disclose the state inspection certificate charge on the repair order as a separate item and collect the charge from the consumer. A person shall not operate a motor vehicle unless it has been inspected as required by this section and has a valid certification of inspection affixed to it. The month of next inspection for all motor vehicles shall be shown on the current inspection certificate affixed to the vehicle. Sec. 56. ALLOCATION OF VEHICLE INSPECTION CHARGE REVENUE All vehicle inspection certificate charge revenue collected under 23 V.S.A § 1230 shall be allocated as follows: In fiscal year 2006, to the transportation fund; in fiscal year 2007 and thereafter, to the transportation fund but with one-half reserved for use in the bridge maintenance program established in 19 V.S.A. § 40. * * * Vermont Bridge Maintenance Program * * * Sec. 57. 19 V.S.A. § 40 is added to read: § 40. VERMONT BRIDGE MAINTENANCE PROGRAM The Vermont bridge maintenance program is hereby created. The objective of the program is to maximize the useful life of Vermont’s bridges at least cost through a systematic program of asset management which will eliminate avoidable deterioration costs and maximize the availability of resources for all transportation purposes. The following types of projects shall be eligible for funding from the bridge maintenance program: (1) Bridge painting, particularly projects that will remove lead - based paints and improve the protective capacity of the structural steel coatings system; (2) Deck membrane replacements of deteriorating membranes with new higher performance membranes and pavement; (3) Deck replacements of structurally deficient decks where the remaining structural components of the bridge are in fair to good condition; (4) Large culvert rehabilitation, including the insertion of culvert linings to extend the useful life of large culverts; and (5) Substructure repairs where deterioration has affected the structural stability of the bridge. Sec. 58. BRIDGE PROJECTS INCLUDED IN THE BRIDGE

JOURNAL OF THE HOUSE 195 MAINTENANCE PROGRAM The following bridge projects are included in the bridge maintenance program: System Project Project Number Description Interstate Bolton IM 090-2(29) Rehab BR#51, I-89 Bolton Interstate Putney IM 091-1(31) Rehab bridge #17, I-91 State Cambridge BHF 030-2(19)S Rehab BR20, Lamoille River Town Johnson BHO 1448(18) Rehab BR6, Lamoille River Town Montpelier BHM 6400(25) Rehab BR11, north branch Winooski River Town Norwich TH2 9625 Rehab BR46, Ompompanoosuc River * * * New Projects * * * Sec. 59. NEW PROJECTS (a) The South Burlington Airport Drive reconstruction project shall be added to the program development – roadway program, provided the Chittenden County Metropolitan Planning Organization’s (MPO) approves of the project for inclusion in the MPO’s current transportation improvement plan (TIP) by September 1, 2005. (b) Upon request of the Addison County regional planning commission, the secretary may add the Bristol South Street bridge (bridge No. 31) project to the town bridge program. * * * Reallocation of Funding * * * Sec. 60. 19 V.S.A § 10g(h) is amended to read: (h) Should capital projects in the transportation program be delayed because of unanticipated problems with permitting, right-of-way acquisition, construction, local concern, or availability of federal or state funds, the secretary is authorized to advance projects in the approved transportation program, giving priority to shelf projects. The secretary is further authorized to undertake projects to resolve emergency or safety issues. Should an approved project in the current transportation program require additional funding to maintain the approved schedule, the agency is authorized to allocate the necessary resources. However, the secretary shall not delay or suspend 196 SATURDAY, JUNE 4, 2005 work on approved projects to reallocate funding for other projects except when other funding options are not available. In such case, the secretary shall notify the members of the joint transportation oversight committee. With respect to projects in the approved transportation program, the secretary shall notify, in the district affected, the regional planning commission, the municipality, legislators, and members of the senate and house committees on transportation of any significant change in design, change in construction cost estimates requiring referral to the transportation board under 19 V.S.A. § 10h, or any change which likely will affect the fiscal year in which the project is planned to go to construction. No project shall be cancelled without the approval of the general assembly. Sec. 61. TRANSPORTATION FUND STABILIZATION RESERVE To the extent that transportation funds are insufficient to obligate under federal regulations any federal funds that become available in federal fiscal year 2005 or 2006, the secretary may withdraw funds from the transportation fund budget stabilization reserve up to a maximum amount which leaves the remaining balance of the stabilization reserve equal to three and one-half percent of the prior year appropriations of transportation funds and use such funds to obligate the federal funds. * * * Interest on Transportation Fund Stabilization Reserve * * * Sec. 62. 32 V.S.A. § 308a(e) is added to read: (e) Commencing in fiscal year 2007, interest earned on funds in the transportation fund budget stabilization reserve shall be credited to the transportation fund. * * * Discretionary Spending Authority * * * Sec. 63. MATCHING FUNDS Spending authority in the amount of $566,338 in transportation funds shall be allocated by the secretary to satisfy matching requirements for federal funds pursuant to Secs. 63 and 64 of this act. Sec. 64. DISCRETIONARY SPENDING AUTHORITY (a) Spending authority in the amount of $1,258,730 in federal funds shall be allocated in the discretion of the secretary to advance projects in the state’s fiscal year 2006 transportation program in the safety and traffic operations, paving, roadway, town bridge, or bridge maintenance programs or which are listed as shelf projects. In making funding allocation decisions, the secretary shall consider the projects identified in subsection (b) of this section. If the secretary decides not to allocate funds pursuant to this subsection to a project

JOURNAL OF THE HOUSE 197 listed in subsection (b) of this section, the secretary shall explain the decision in writing addressing the factors which support the prioritization of other projects receiving funds as compared to the listed project. The secretary shall deliver copies of the written explanation promptly to members of the house and senate committees on transportation and the members of the joint transportation oversight committee after making the funding decision. (b) The projects referred to in subsection (a) of this section are as follows. In the event the available funds are not sufficient to advance all of the projects in a cost efficient manner, the secretary shall allocate the available funding to selected projects on the list so as to ensure the effective utilization of available resources. Program Project Name Project No. Roadway Lunenburg STP2301(1)S Roadway Waterbury Main Street FEGC F013-4(13) Roadway Old Bennington STP 1400(5)S (Monument Avenue) Paving Cambridge-Belvidere VT 109 STP 2219(1)S Town Bridge Barton (Orleans) BRO 1449(29) Safety & Traffic Operations Middlebury NHG 019-3(52S) * * * Additional Federal Funds * * * Sec. 65. ADDITIONAL FEDERAL FUNDS (a) To the extent federal funds become available beyond the funds authorized in fiscal year 2006 in the state’s transportation program, the secretary shall apply the funds, consistent with federal rules, as follows: (1) Subject to 19 V.S.A. § 10h(a), to cover cash flow shortages on projects due to increased costs or faster than anticipated progress, or to obligate federal fiscal year 2006 funds to state fiscal year 2007 paving projects currently planned for advance construction in federal fiscal year 2006 (summer of calendar year 2006) and conversion in federal fiscal year 2007. (2) To advance projects in the state’s fiscal year 2006 transportation program in the safety and traffic operations, paving, roadway, town bridge or bridge maintenance programs or which are listed as shelf projects. In making funding allocation decisions, the secretary shall consider the projects identified in subsection (b) of this section. If the secretary decides not to allocate funds 198 SATURDAY, JUNE 4, 2005 pursuant to this subsection to a project listed in subsection (b) of this section, the secretary shall explain the decision in writing addressing the factors which support the prioritization of other projects receiving funds as compared to the listed project. The secretary shall deliver copies of the written explanation to members of the house and senate committees on transportation and the members of the joint transportation oversight committee promptly after making the funding decision. (b) The projects referred to in subdivision (a)(2) of this section are as follows. In the event the available funds are not sufficient to advance all of the projects in a cost efficient manner, the secretary shall allocate the available funding to selected projects on the list so as to ensure the effective utilization of available resources. Program Project Name Project No. Public Transit New Starts Roadway Lunenburg STP2301(1)S Roadway Waterbury Main Street FEGC F013-4(13) Roadway Old Bennington STP 1400(5)S (Monument Avenue) Paving Cambridge Belvidere VT 109 STP 2219(1)S Town Bridge Barton (Orleans) BRO 1449(29) Safety & Traffic Operations Middlebury NHG 019-3(52S) Committee on the Part of Committee on the Part of The Senate The House Sen. Richard Mazza Rep. Richard Westman Sen. Peter Welch Rep. Albert Audette Rep. Timothy Corcoran Which was considered and adopted on the part of the House. Rules Suspended; Report of Committee of Conference Adopted S. 15 On motion of Rep. Sunderland of Rutland Town, the rules were suspended and Senate bill, entitled An act relating to voyeurism;

JOURNAL OF THE HOUSE 199 Appearing on the Calendar for notice, was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill, respectfully reports that it has met and considered the same and recommends that the House recede from its proposals of amendment and that the bill be amended by striking all after the enacting clause and inserting in lieu thereof the following: Sec. 1. SHORT TITLE This act may be referred to and cited as “The Safe Communities Act.” Sec. 2. 13 V.S.A. § 2638 is added to read: § 2638. VOYEURISM (a) As used in this section: (1) “Bona fide private investigator or bona fide security guard” means an individual lawfully providing services, whether licensed or unlicensed, pursuant to sections 3151 and 3151a of Title 26. (2) “Female breast” means any portion of the female breast below the top of the areola. (3) “Circumstances in which a person has a reasonable expectation of privacy” means circumstances in which a reasonable person would believe that his or her intimate areas would not be visible to the public, regardless of whether that person is in a public or private area. (4) “Intimate areas” means the naked or undergarment-clad genitals, pubic area, buttocks, or female breast of a person. (5) “Place where a person has a reasonable expectation of privacy” means: (A) a place in which a reasonable person would believe that he or she could disrobe in privacy, without his or her undressing being viewed by another; or (B) a place in which a reasonable person would expect to be safe from unwanted intrusion or surveillance. 200 SATURDAY, JUNE 4, 2005 (6) “Surveillance” means secret observation of the activities of another person for the purpose of spying upon and invading the privacy of the person. (7) “View” means the intentional looking upon another person for more than a brief period of time, in other than a casual or cursory manner, with the unaided eye or a device designed or intended to improve visual acuity. (b) No person shall intentionally view, photograph, film, or record in any format: (1) the intimate areas of another person without that person’s knowledge and consent while the person being viewed, photographed, filmed, or recorded is in a place where he or she would have a reasonable expectation of privacy; or (2) the intimate areas of another person without that person’s knowledge and consent and under circumstances in which the person has a reasonable expectation of privacy. (c) No person shall disseminate any image recorded in violation of subsection (b) of this section. (d) No person shall intentionally conduct surveillance or intentionally photograph, film, or record in any format a person without that person’s knowledge and consent while the person being surveilled, photographed, filmed, or recorded is in a place where he or she would have a reasonable expectation of privacy within a home or residence. Bona fide private investigators and bona fide security guards engaged in otherwise lawful activities within the scope of their employment are exempt from this subsection. (e) This section shall apply to a person who intentionally views, photographs, films, or records the intimate areas of a person as part of a security or theft prevention policy or program at a place of business. (f) This section shall not apply to: (1) a law enforcement officer conducting official law enforcement activities in accordance with state and federal law; or (2) o fficial activities of the department of corrections, a law enforcement agency, the agency of human services, or a court for security purposes or during the investigation of alleged misconduct by a person in the custody of the department of corrections, a law enforcement agency, the agency of human services, or a court.

JOURNAL OF THE HOUSE 201 (g) This section is not intended to infringe upon the freedom of the press to gather and disseminate news as guaranteed by the First Amendment to the Constitution of the United States. (h) It shall be an affirmative defense to a violation of subsection (b) of this section that the defendant was a bona fide private investigator or bona fide security guard conducting surveillance in the ordinary course of business, and the violation was unintentional and incidental to otherwise legal surveillance. However, an unintentional and incidental violation of subsection (b) of this section shall not be a defense to a violation of subsection (c). (i) For a first offense, a person who violates subsection (b) or (d) of this section shall be imprisoned not more than two years or fined not more than $1,000.00, or both. For a second or subsequent offense, a person who violates subsection (b) or (d) of this section shall be imprisoned not more than three years or fined not more than $5,000.00, or both. A person who violates subsection (c) of this section shall be imprisoned not more than five years or fined not more than $5,000.00, or both. Sec. 3. 13 V.S.A. § 5401(10) is amended to read: (10) “Sex offender” means: (A) A person who is convicted in any jurisdiction of the United States, including a state, territory, commonwealth, the District of Columbia, or military, federal, or tribal court of any of the following offenses: (i) sexual assault as defined in 13 V.S.A. § 3252; (ii) aggravated sexual assault as defined in 13 V.S.A. § 3253; (iii) lewd and lascivious conduct as defined in 13 V.S.A. § 2601; (iv) sexual activity by a caregiver as defined in 33 V.S.A. § 6913(d); (v) second or subsequent conviction for voyeurism as defined in 13 V.S.A. § 2638(b) or (c); and (vi) an attempt to commit any offense listed in this subdivision. * * * Sec. 4. 13 V.S.A. § 1061 is amended to read: § 1061. DEFINITIONS As used in this subchapter,: 202 SATURDAY, JUNE 4, 2005 (1) “Stalk” means to engage in a course of conduct which consists of following or, lying in wait for, or harassing, and: (A) serves no legitimate purpose; and (B) causes the would cause a reasonable person to fear for his or her physical safety or causes the would cause a reasonable person substantial emotional distress. (2) “Course of conduct” means a pattern of conduct composed of two or more acts over a period of time, however short, evidencing a continuity of purpose. Constitutionally protected activity is not included within the meaning of “course of conduct.” (3) “Following” means maintaining over a period of time a visual or physical proximity to another person in such manner as would cause a reasonable person to have a fear of unlawful sexual conduct, unlawful restraint, bodily injury, or death. (4) “Harassing” means a course of conduct actions directed at a specific person, or a member of the person’s family, which would cause a reasonable person to fear unlawful sexual conduct, unlawful restraint, bodily injury, or death, including but not limited to verbal threats, written, telephonic, or other electronically communicated threats, vandalism, or unconsented to physical contact without consent. (5) “Lying in wait” means hiding or being concealed for the purpose of attacking or harming another person. Sec. 5. 13 V.S.A. § 1063 is amended to read: § 1063. AGGRAVATED STALKING (a) A person commits the crime of aggravated stalking if the person intentionally stalks another person;, and: (1) such conduct violates a court order that prohibits stalking and is in effect at the time of the offense; or (2) has been previously convicted of stalking or aggravated stalking; or (3) has been previously convicted of an offense an element of which involves an act of violence against the same person; or (4) the person being stalked is under the age of 16 years; or (5) had a deadly weapon, as defined in section 1021 of this title, in his or her possession while engaged in the act of stalking.

JOURNAL OF THE HOUSE 203 (b) A person who commits the crime of aggravated stalking shall be imprisoned not more than five years or be fined not more than $25,000.00, or both. (c) Conduct constituting the offense of aggravated stalking shall be considered a violent act for the purposes of determining bail. Sec. 6. 13 V.S.A. § 1024 is amended to read: § 1024. AGGRAVATED ASSAULT (a) A person is guilty of aggravated assault if he the person: (1) attempts to cause serious bodily injury to another, or causes such injury purposely, knowingly, or recklessly under circumstances manifesting extreme indifference to the value of human life; or (2) attempts to cause or purposely or knowingly causes bodily injury to another with a deadly weapon; or (3) for a purpose other than lawful medical or therapeutic treatment, he the person intentionally causes stupor, unconsciousness, or other physical or mental impairment or injury to another person by administering to him, the other person without his the other person’s consent, a drug, substance, or preparation capable of producing the intended harm; or (4) with intent to prevent a law enforcement officer from performing a lawful duty, he the person causes physical injury to any person; or (5) is armed with a deadly weapon and threatens to use the deadly weapon on another person. (b) A person found guilty of violating a provision of subsection subdivision (a)(1) or (2) of this section shall be imprisoned for not more than 15 years or fined not more than $10,000.00, or both. (c) A person found guilty of violating a provision of subsection subdivisions (a)(3) or, (4), or (5) of this section shall be imprisoned for not more than five years or fined not more than $5,000.00, or both. (d) Subdivision (a)(5) of this section shall not apply if the person threatened to use the deadly weapon: (1) In the just and necessary defense of his or her own life or the life of his or her husband, wife, civil union partner, parent, child, brother, sister, guardian, or ward; (2) In the suppression of a person attempting to commit murder, sexual assault, aggravated sexual assault, burglary, or robbery; or 204 SATURDAY, JUNE 4, 2005 (3) In the case of a civil or military officer lawfully called out to suppress a riot or rebellion, prevent or suppress an invasion, or assist in serving legal process, in suppressing opposition against him or her in the just and necessary discharge of his or her duty. (e) Subsection (d) of this section shall not be construed to limit or infringe upon defenses granted at common law. Sec. 7. 20 V.S.A. § 1932 is amended to read: § 1932. DEFINITIONS As used in this subchapter: * * * (12) “Violent Designated crime” means any of the following offenses: (A) assault and robbery with a dangerous weapon as defined in subsection 608(b) of Title 13 a felony; (B) assault and robbery causing bodily injury as defined in subsection 608(c) of Title 13; (C) aggravated assault as defined in section 1024 of Title 13; (D) murder as defined in section 2301 of Title 13; (E) manslaughter as defined in section 2304 of Title 13; (F) kidnapping as defined in section 2405 of Title 13 or its predecessor as it was defined in section 2401 of Title 13; (G) first degree unlawful restraint as defined in section 2407 of Title 13; (H) maiming as defined in section 2701 of Title 13; (I) first degree aggravated domestic assault as defined in section 1043 of Title 13 where the defendant causes serious bodily injury to another person; (J) sexual assault as defined in 13 V.S.A. §§ 3252(a)(1), (2) and (4), and 3252(b) or the predecessor offenses as defined in section 3201 of Title 13; (K) aggravated sexual assault as defined in section 3253 of Title 13; (L) lewd and lascivious conduct as defined in section 2601 of Title 13; (M) lewd or lascivious conduct with a child as defined in section 2602 of Title 13;

JOURNAL OF THE HOUSE 205 (N) sexual activity by a caregiver with an elderly or disabled adult, as defined in 33 V.S.A. § 6913(d), where the sexual activity is exploitation as described in 33 V.S.A. § 6902(7)(D); (O) sexual exploitation of children as defined in 13 V.S.A. §§ 2822, 2823 and 2824; (P) burglary as defined in 13 V.S.A. § 1201; (Q) unlawful trespass of a residence as defined in 13 V.S.A. § 3705(d); (R) an attempt to commit any offense listed in this subdivision; or (S)(C) any other offense, if, as part of a plea agreement in an action in which the original charge was a crime listed in this subdivision and probable cause was found by the court, there is a requirement that the defendant submit a DNA sample to the DNA data bank. Sec. 8. 20 V.S.A. § 1933 is amended to read: § 1933. DNA SAMPLE REQUIRED (a) The following persons shall submit a DNA sample: (1) every person convicted in a court in this state of a violent designated crime on or after the effective date of this subchapter; and (2) every person who was convicted in a court in this state of a violent designated crime prior to the effective date of this subchapter and, after the effective date of this subchapter, is: (A) in the custody of the commissioner of corrections pursuant to 28 V.S.A. § 701; (B) on parole for a violent designated crime; (C) serving a supervised community sentence for a violent designated crime; and (D) on probation for a violent designated crime. (b) A person serving a sentence for a violent designated crime in a correctional facility shall have his or her DNA samples collected or taken at the receiving correctional facility, or at a place and time designated by the commissioner of corrections or by a court. (c) A person serving a sentence for a violent designated crime not confined to a correctional facility shall have his or her DNA samples collected or taken 206 SATURDAY, JUNE 4, 2005 at a place and time designated by the commissioner of corrections, the commissioner of public safety, or a court. Sec. 9. 20 V.S.A. § 1940 is amended to read: § 1940. EXPUNGEMENT OF RECORDS AND DESTRUCTION OF SAMPLES (a) If a person’s conviction of a violent designated crime is reversed and the case is nolle prosequi or dismissed or the person is granted a full pardon, the court with jurisdiction or, as the case may be, the governor, shall so notify the department, and the person’s DNA record in the state DNA database and CODIS and the person’s DNA sample in the state DNA data bank shall be removed and destroyed. The laboratory shall purge the DNA record and all other identifiable information from the state DNA database and CODIS and destroy the DNA sample stored in the state DNA data bank. If the person has more than one entry in the state DNA database, CODIS, or the state DNA data bank, only the entry related to the dismissed case shall be deleted. The department shall notify the person upon completing its responsibilities under this subsection, by certified mail addressed to the person’s last known address. * * * Sec. 10. 20 V.S.A. § 1946 is added to read: § 1946. REPORT FROM COMMISSIONER The commissioner of public safety shall report annually no later than January 15 to the senate and house committees on judiciary regarding the administration of the DNA databank, any backlogs in processing samples, and staffing and funding issues related to any backlog. Sec. 11. FUNDING FOR DNA DATABANK EXPANSION There is a general fund appropriation of $30,000.00 plus available matching funds in H.516 which shall be used to address the DNA processing associated with this act. This funding includes hiring additional staff at the Vermont crime lab. Sec. 12. 24 V.S.A. § 1940 is added to read: § 1940. TASK FORCES; SPECIALIZED INVESTIGATIVE UNITS; BOARD; GRANTS (a) A task force or specialized investigative unit organized and operating under section 1938 of this title may accept, receive, and disburse in furtherance of its duties and functions any funds, grants, and services made available by

JOURNAL OF THE HOUSE 207 the state of Vermont and its agencies, the federal government and its agencies, any municipality or other unit of local government, or private or civic sources. (b) A specialized investigative unit grants board is created which shall be comprised of the attorney general, the secretary of administration, the executive director of the department of state’s attorneys, the commissioner of the department of public safety, the executive director of the center for crime victim services, and the executive director of the Vermont League of Cities and Towns. Specialized investigative units organized and operating under section 1938 of this title for the investigation of sex crimes, child abuse, elder abuse, domestic violence, or crimes against those with physical or developmental disabilities may apply to the board for a grant or grants covering the costs of salaries and employee benefits to be expended during a given year for the performance of unit duties as well as unit operating costs for rent, utilities, equipment, training, and supplies. Grants under this section shall be approved by a majority of the entire board and shall not exceed 50 percent of the yearly salary and employee benefit costs of the unit. (c) The board may adopt rules relating to grant eligibility criteria, processes for applications, awards, and reports related to grants authorized pursuant to this section. The attorney general shall be the adopting authority. Sec. 13. 13 V.S.A. § 5411a is amended to read: § 5411a. ELECTRONIC POSTING OF THE SEX OFFENDER REGISTRY * * * (l) If a sex offender’s information is required to be posted electronically pursuant to subdivision (a)(2) of this section, the department shall list the offender’s convictions for any crime listed in subdivision 5401(10) of this title, regardless of the date of the conviction or whether the offender was required to register as a sex offender based upon that conviction. Sec. 14. 13 V.S.A. § 5412 is amended to read: § 5412. ACTIVE COMMUNITY NOTIFICATION BY THE DEPARTMENT OF PUBLIC SAFETY, THE DEPARTMENT OF CORRECTIONS, AND LOCAL LAW ENFORCEMENT; IMMUNITY (a) The department, the department of corrections, any authorized local law enforcement agency, and their employees shall be immune from liability in carrying out the provisions under this subchapter except in instances of gross negligence or willful misconduct, provided that the agencies complied with the rules adopted pursuant to this subchapter. 208 SATURDAY, JUNE 4, 2005 (b) Nothing in this subchapter shall be construed to prevent the The department, the department of corrections, and any authorized local law enforcement agency from notifying are authorized to notify members of the public who are likely to encounter a sex offender who poses a danger under circumstances that are not enumerated in this subchapter. (c) Notification of the community beyond those persons likely to encounter a sex offender shall be authorized only under circumstances which constitute a compelling risk to public safety and only after consultation with the Vermont crime information center and the department of corrections. (d) Active community notification regarding registered sex offenders who may pose a danger to members of the community is an important public safety tool which the general assembly intends for authorized agencies to use at their discretion in accordance with this subchapter. Sec. 15. NOTICE OF AUTHORITY FOR ACTIVE COMMUNITY NOTIFICATION (a) When the general assembly created the sex offender registry through the adoption of No. 124 of the Acts of the 1995 Adj. Sess. (1996) , it granted authority to the department of public safety, the department of corrections, and local law enforcement agencies to notify actively members of the public of any registered sex offender who might pose a danger to them in the community. The general assembly finds that this authority has been utilized inconsistently among agencies statewide. (b) In No. 157 of the Acts of the 2003 Adj. Sess. (2004), the general assembly required the department of public safety to establish and conduct, in cooperation with the department of corrections, a comprehensive training program to inform and instruct law enforcement and corrections personnel on the operation of the sex offender registry and sex offender community notification, including authority to conduct active community notification. The general assembly appropriated $25,000.00 for the training. (c) Amendments in this act to 13 V.S.A. § 5412 are clarifications of existing law and intended to dispel any ambiguities as to the authority of designated agencies to notify when appropriate the public of sex offenders who are living in the community. (d) The department of public safety shall send notice of the amendments to sex offender laws in this act to all law enforcement agencies in the state, and of their authority to engage in active community notification in accordance with subchapter 3 of chapter 167 of Title 13. The department of corrections shall send notice of the amendments to sex offender laws in this act to all probation and parole officers in the state, and of their authority to engage in active

JOURNAL OF THE HOUSE 209 community notification in accordance with subchapter 3 of chapter 167 of Title 13. This notice shall be sent no later than September 1, 2005. Sec. 16. 13 V.S.A. § 5411b is amended to read: § 5411b. DESIGNATION OF HIGH-RISK SEX OFFENDER * * * (d) The department of corrections shall identify those sex offenders under the supervision as of the date of passage of this act who are high-risk and shall designate them as such no later than September 1, 2005. Sec. 17. SEX OFFENDER COMMUNITY REENTRY; CIVIL COMMITMENT (a) The House Committee on Judiciary finds that the vast majority of convicted sex offenders eventually returns to the community, either on probation, parole, community sentence, or having reached their maximum sentence. It is essential that policymakers determine the appropriate manner to maximize Vermont resources to have the greatest impact on public safety with regard to sex offenders. (b) Testimony indicates that a very small number of dangerous sex offenders, estimated at one to two offenders a year by the department of public safety, poses a particularly high risk to community safety. The committee recognizes the need to address not only these particularly dangerous offenders, but the return of all sex offenders to Vermont communities. (c) In order to address the risks that convicted sex offenders may pose in the community, the House Committee on Judiciary shall meet in the summer and fall of 2005 to continue its consideration and examination of current public safety and corrections policy regarding sexual violence and the return of sex offenders to our communities. These meetings shall include consideration of civil commitment and other policy alternatives. (d) The committee has taken considerable testimony on the option of civil commitment of sex offenders and strongly believes that more information is needed. Proposals submitted to the committee on behalf of the administration lacked essential information regarding implementation of such a program, funding needs and resources, staffing requirements and resources, and treatment plans. Without such details, it is impossible for the committee to determine whether such a program is the best approach to community safety and whether such a program would be constitutional as applied. (e) The committee shall also consider the best practices with regard to investigation, prosecution, sentencing, and prison treatment of sex offenders. 210 SATURDAY, JUNE 4, 2005 Issues shall include special prosecution units, presentence investigations, presentence risk assessment and psychosexual evaluations, enhanced criminal penalties, and successful treatment models. (f) The committee is authorized to meet five times during the summer and fall of 2005 and shall have the assistance and cooperation of all state and local agencies and departments. The legislative council and the joint fiscal office shall provide professional and administrative support for the committee. (g) Committee members shall be entitled to per diem compensation and reimbursement for expenses in accordance with 2 V.S.A. § 406. (h) The commissioner of health, commissioner of public safety, and commissioner of corrections shall jointly submit a report to the house committee on judiciary regarding the administration’s proposals for civil commitment of sex offenders. The report shall be submitted no later than August 1, 2005. (i) The report shall address the administration’s three options, including out-of-state placement, a Vermont facility-based program, and a module-based program. The report shall address, at a minimum, the following: (1) Capacity. (2) Staffing. (3) Treatment. (4) Program and capital costs. (j) The report shall include findings regarding community based out-patient civil commitment and address 24-hour staff supervision of offenders, GPS monitoring, and viability of staffed halfway houses. (k) The report shall include findings regarding which states will accept Vermont sexually violent predators who have been civilly committed, the cost, the duration, and number of offenders. (l) The report shall include the impacts of dedicating a wing of an existing Vermont correctional facility, including the cost of displacing Vermont inmates to an out-of-state facility, as well as capital costs for retrofitting a designated wing for sexually violent predators. Sec. 18. CRIMINAL CODE STUDY COMMITTEE Subsections (c) and (d) of Sec. 293 of No. 122 of the Acts of the 2003 Adj. Sess. (2004) are amended to read: (c) The committee shall consist of the following members:

JOURNAL OF THE HOUSE 211 (1) two three members of the senate appointed by the committee on committees, one of whom shall be the chair of the committee on judiciary; (2) two three members of the house of representatives appointed by the speaker, one of whom shall be the chair of the committee on judiciary; * * * (d)(1) The committee shall consider the following: * * * (2) The committee shall also consider whether Vermont should establish a permanent sentencing commission. The committee shall make recommendations with regard to the mission and obligations of such a commission, the members of the commission, and the administration of the commission. Sec. 19. EFFECTIVE DATE Sec. 18 shall take effect upon passage. and that the act be renamed “An Act Relating to Community Safety” Committee on the part of the House Committee on the part of the Senate William Lippert Richard Sears Maxine Grad John Campbell Michael Kainen Kevin Mullin

Which was considered and adopted on the part of the House. Rules Suspended; Report of Committee of Conference Adopted S. 56 On motion of Rep. Sunderland of Rutland Town, the rules were suspended and Senate bill, entitled An act relating to restructuring the agency of natural resources.; Appearing on the Calendar for notice, was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and 212 SATURDAY, JUNE 4, 2005 considered the same and recommends that the House recede from its proposals of amendment and that the bill be amended by striking all after the enacting clause, and inserting the following: Sec. 1. LEGISLATIVE FINDINGS AND PRINCIPLES The general assembly finds: (1) The lives of all Vermonters are affected by the agency of natural resource’s ability to carry out its duties to protect and responsibly manage Vermont’s precious natural resources for the benefit of current and future generations. (2) The following obstacles currently prevent the agency of natural resources from consistently meeting its statutory obligations: (A) Agency of natural resources programs in the three agency departments (the department of environmental conservation, the department of fish and wildlife, and the department of forests, parks and recreation) are not always sufficiently well integrated. (B) A significant number of agency of natural resources staff work in regional offices throughout the state. These staff are familiar with and focused on meeting the unique natural resources challenges of their regions. However, there is also a need to ensure that the practices implemented in the regions are connected to basic agency-wide policies and to the agency management system. If coordination between regional and central agency staff is insufficient, inconsistent application of agency policies may result. (C) The following examples attest to the challenges faced by the agency of natural resources in meeting state and federal statutory mandates in a timely manner: (i) The agency has not completed the basin planning requirement in state and federal law. (ii) The agency has not completed basic, minimal groundwater mapping for aquifers serving public water systems as required by state law. (iii) The agency has not completed implementation of key components of the federal Clean Water Act, such as developing total maximum daily loads (TMDL) and developing an antidegradation implementation policy. (D) Public and agency attention to simplifying and streamlining the permitting process for applicants should be accompanied by commensurate progress in measuring the effectiveness of the regulatory process in protecting

JOURNAL OF THE HOUSE 213 the interests of others and in determining and tracking the status and the health of the natural resources that it is the agency’s mission to protect. (E) The problems faced by the agency of natural resources may be the result of a lack of agency resources, complex and interwoven statutory programs established at different times and often in response to different federal laws, restrictions on the use of federal funds, an inefficient allocation of existing resources, inefficiencies in the agency management structure, or any combination of these and other factors. (F) Currently, there is not a clear and consistent connection between the agency’s own policy, planning, and implementation work and core environmental issues that are being addressed to some degree by other state agencies (including state long-range transportation planning, energy planning, and planning to address global climate change). (3) Good policy and planning are vital to any large agency’s ability to efficiently carry out its responsibilities. The agency’s planning and policy efforts must be well connected, based on the law, and communicated to the staff who implement these policies. The agency’s internal policy must be coordinated with planning efforts in the individual departments. (4) The agency must have a clear, well articulated vision to implement the state’s environmental policy as established by law. This must be done in a manner that connects to the work of all the departments and guides staff implementation. Sec. 2. RESTRUCTURING PROCESS (a) A statewide advisory group, the Natural Resources Re-organization Committee (NRRC), is created to advise the secretary on the design of a restructured agency. It shall consist of no more than 13 members, who shall be appointed as follows: two members of the house appointed by the Speaker of the House, two members of the senate appointed by the President Pro Tem; nine members appointed by the secretary of natural resources, in consultation with the Speaker of the House and the President Pro Tem, as follows: one representing regulated business and development interests; one representing environmental organizations; one representing fish and wildlife interests; one representing the interests of forests and parks; one representing recreational interests; one representing local government; one representing the regional planning commissions; one representing the Vermont State Employees Association; and one representing citizens’ groups. Appointments shall be made no later than June 15, 2005, and shall be for terms of one year. 214 SATURDAY, JUNE 4, 2005 (1) The secretary shall convene the first meeting of NRRC no later than July 1, 2005, at which point the committee shall select its own officers. (2) The NRRC shall hold public hearings with respect to the functions of the agency, and the issues identified in this act, in each of the agency’s five administrative districts, provide public notice of each public hearing, and inform the secretary and the legislative committees on natural resources and energy and on government operations of their recommendations. (3) The NRRC shall establish a process to solicit input from agency staff. For purposes of this act only, the provisions of the collective bargaining contract article on whistle blower, as printed in the agreements between the State of Vermont and the Vermont State Employees’ Association, are extended to all employees in the agency not covered by these agreements. (4) Members of the NRRC not receiving compensation for service on the advisory group from another source are entitled to compensation under section 1010 of Title 32. (b) The secretary shall engage in the following process as preliminary steps in a potential restructuring of the agency: (1) In order to implement state environmental policy for the benefit of current and future generations, the secretary, with the assistance of a consultant and in consultation with the NRCC, shall: (A) Collaborate with agency staff, advocacy groups, other state agencies, municipalities, and other stakeholders to receive input on organizational models and the design of the agency. This process may include focus groups, public meetings, newsletters, surveys, and the use of a website. (B) Collaborate with agency staff, advocacy groups, other state agencies, municipalities, and other stakeholders to determine specific accountability indicators needed to measure agency restructuring, both with respect to the reallocation of agency resources and personnel, but also with respect to the agency’s ability to perform its duties to protect the state’s natural resources. (C) Examine areas where consultation may be needed, such as information technology design, federal cost allocation, and organizational development. (D) Identify and implement staff development programs necessary to assist the agency staff to carry out their responsibilities in the restructured agency.

JOURNAL OF THE HOUSE 215 (2) The secretary shall examine functions, such as administrative support and supervision, and space requirements necessary to ensure the agency’s ability to be responsive and helpful to permit applicants, neighbors, and others interested in and affected by the permitting process. (3) On or before January 15, 2006, the secretary shall prepare a draft report on restructuring, provide the draft report to the NRRC for review and comments, make any appropriate revisions to the draft report, and submit a final report to the legislative committees on natural resources and energy and on government operations and to the house committee on fish, wildlife, and water resources. (A) The report shall contain recommendations to restructure the agency, and a progress report on the procedures followed and on administrative actions that have been taken or that are being taken to complete the process. The report shall list persons and organizations who have participated in the process, and shall include: (i) Identification of resources and agency action that would be required to implement fully and adequately state and federal natural resources law. (ii) A plan for making the agency’s permit process, enforcement actions, planning, and other functions more accessible in order to be more effective, efficient, transparent, integrated, and accountable. This shall include resources required and a recommended time frame needed for implementation of the plan; (iii) Accountability mechanisms to ensure that alleged permit violations are forwarded to the agency’s enforcement division, that there is a sufficient enforcement presence to give the natural resources the protection anticipated by the pertinent underlying legislation and that those who do not comply with the law are not given an unfair advantage over those who do; (iv) Provision of policy guidance from the agency’s planning efforts to coordinate between the agency’s departments and divisions in a manner that protects the state’s resources while responding to legitimate interests of applicants and others involved in the permitting process; (B) The report shall include any draft legislation necessary to eliminate contradictions that have been identified to date in existing statutes, and to allow progress in any reorganization proposed by the agency; (C) The report shall explain the anticipated budgetary impacts and transitional costs of the proposed restructuring; and 216 SATURDAY, JUNE 4, 2005 (D) The report shall include recommendations for improving coordination of functions that are shared with, or that overlap with, those of other state agencies and units of local government. Sec. 3. APPROPRIATION The sum of $50,000.00 is appropriated from the general fund to the agency of natural resources in fiscal year 2006 for the purpose of hiring a consultant - facilitator to assist in implementation of this act. Committee on the part of the House Committee on the part of the Senate Jim Masland Virginia Lyons Joseph Krawczyk Susan Bartlett Jim McCullough Diane Snelling Which was considered and adopted on the part of the House. Rules Suspended; Senate Proposal of Amendment Concurred in H. 545 Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town, the rules were suspended and House bill, entitled An act authorizing Vermont Yankee to go before the public service board to seek permission for dry cask storage; Was taken up for immediate consideration. The Senate proposed to the House to amend the bill as follows: First: In Sec. 2, 10 V.S.A. § 6523(a)(1)(A), before the word “docket” by adding the words public service board Second: In Sec. 2, 10 V.S.A. § 6523(a), by striking subdivision (3), and by striking out subsection (d) in its entirety and inserting in lieu thereof a new subsection (d) to read as follows: (d) Expenditures authorized. (1) This fund shall be administered by the department of public service to facilitate the development and implementation of clean energy resources. The fund shall not be used to meet costs of administration. (2) The department shall assure an open public process in the administration of the fund for the purposes established in this subchapter. (3) By January 15 of each year, commencing in 2007, the department of public service shall provide to the house and senate committees on natural

JOURNAL OF THE HOUSE 217 resources and energy, the senate committee on finance, and the house committee on commerce a report detailing the revenues collected and the expenditures made under this subchapter, together with recommended principles to be followed in the allocation of funds and a proposed five-year plan for future expenditures from the fund. (4) Projects for funding may include the following: (A) projects that will sell power in commercial quantities; (B) among those projects that will sell power in commercial quantities, funding priority will be given to those projects that commit to sell power to Vermont utilities on favorable terms; (C) projects to benefit publicly owned or leased buildings; (D) renewable energy projects on farms; (E) small scale renewable energy in Vermont residences and businesses; and (F) effective projects that are not likely to be established in the absence of funding under the program. (5) If during a particular year, the department determines that there is a lack of high value projects eligible for funding, as identified in the five-year plan, or as otherwise identified, the department may consult with the board, and shall consider transferring funds to the energy efficiency fund established under the provisions of 30 V.S.A.§ 209(d). Such a transfer may take place only in response to an opportunity for a particularly cost effective investment in energy efficiency, and only as a temporary supplement to funds collected under that subsection, not as replacement funding. Third: By adding a new section to be numbered Sec. 3 to read as follows: Sec. 3. REPORT ON USE OF CLEAN ENERGY DEVELOPMENT FUND By no later than January 15, 2006, the department of public service shall present to the house and senate committees on natural resources and energy, the senate committee on finance, and the house committee on commerce a report containing recommendations with respect to how best to implement the clean energy development fund. The report shall include: (1) draft legislation, if necessary, with respect to implementation of the clean energy development fund; (2) a proposed plan for allocations from the fund; 218 SATURDAY, JUNE 4, 2005 (3) proposed rules to manage expenditures from fund, the application process, equity among the various regions of the state, equity among competing technologies, equity among applicants who may be competitors with each other, and other matters that the commissioner deems appropriate to address by means of rule. Which proposal of amendment was considered and concurred in. Rules Suspended; Action Ordered Messaged to Senate Forthwith and Bills Delivered to the Governor Forthwith On motion of Rep. Sunderland of Rutland Town, the rules were suspended and action on the bills were ordered messaged to the Senate forthwith and the bills delivered to the Governor forthwith. H. 163 An act relating to criminal abuse, neglect, and exploitation of vulnerable adults; H. 523 An act relating to the state’s transportation program; H. 545 An act authorizing Vermont Yankee to go before the public service board to seek permission for dry cask storage; Bills Messaged to Senate Forthwith On motion of Rep. Sunderland of Rutland Town, the rules were suspended and the following bills were ordered messaged to the Senate forthwith: S. 15 An act relating to voyeurism; S. 56 An act relating to restructuring the agency of natural resources.; Joint Resolution Recommitted to Committee J.R.H. 47 Joint resolution, entitled Joint resolution related to National Guard deployment; Appearing on the Calendar for action, was taken up.

JOURNAL OF THE HOUSE 219 Thereupon, Rep. Condon of Colchester moved that the resolution be recommitted to the committee on Appropriations. Rep. Zuckerman of Burlington moved that the rules be suspended to permit consideration of a non-debatable question, which was disagreed to. Pending the question, Shall the resolution be recommitted to the committee on Appropriations? Rep. Brooks of Montpelier demanded the Yeas and Nays, which demand was sustained by the Constitutional number. The Clerk proceeded to call the roll and the question, Shall the resolution be recommitted to the committee on Appropriations? was decided in the affirmative. Yeas, 91 Nays, 40. Those who voted in the affirmative are: Adams of Hartland Helm of Castleton Molloy of Arlington Allaire of Rutland City Houston of Ferrisburgh Monti of Barre City Allard of St. Albans Town Howard of Rutland City Mook of Bennington Atkins of Winooski Hube of Londonderry Morley of Barton Audette of S. Burlington Hudson of Lyndon Morrissey of Bennington Baker of West Rutland Hunt of Essex Myers of Essex Barnard of Richmond Hutchinson of Randolph Niquette of Colchester Bartlett of Dover Jerman of Essex Nitka of Ludlow Bohi of Hartford Jewett of Ripton O'Donnell of Vernon Bostic of St. Johnsbury Johnson of South Hero Otterman of Topsham Branagan of Georgia Kainen of Hartford Parent of St. Albans City Canfield of Fair Haven Keenan of St. Albans City Peaslee of Guildhall Chen of Mendon Kennedy of Chelsea Perry of Richford Clark of St. Johnsbury Keogh of Burlington Peterson of Williston Clark of Vergennes Kilmartin of Newport City Potter of Clarendon Clarkson of Woodstock Komline of Dorset Reese of Pomfret Condon of Colchester Krawczyk of Bennington Rodgers of Glover Copeland-Hanzas of Kupersmith of S. Burlington Schiavone of Shelburne Bradford Larocque of Barnet Severance of Colchester Corcoran of Bennington LaVoie of Swanton Shand of Weathersfield Cross of Winooski Lawrence of Lyndon Shaw of Derby Dostis of Waterbury Leriche of Hardwick Smith of New Haven Dunsmore of Georgia Livingston of Manchester Smith of Morristown Emmons of Springfield Louras of Rutland City Sunderland of Rutland Town Endres of Milton Marcotte of Coventry Sweaney of Windsor Errecart of Shelburne Marron of Stowe Valliere of Barre City Evans of Essex Martin of Springfield Westman of Cambridge Fallar of Tinmouth McAllister of Highgate Winters of Swanton Frank of Underhill McFaun of Barre Town Winters of Williamstown Green of Berlin Metzger of Milton Young of Orwell Heath of Westford Miller of Shaftsbury Those who voted in the negative are: Ancel of Calais Aswad of Burlington Botzow of Pownal 220 SATURDAY, JUNE 4, 2005 Brooks of Montpelier Kiss of Burlington Nease of Johnson Darrow of Dummerston Kitzmiller of Montpelier Nuovo of Middlebury Deen of Westminster Klein of East Montpelier Obuchowski of Rockingham Donovan of Burlington Larson of Burlington Orr of Charlotte Dowland of Holland Lippert of Hinesburg Partridge of Windham Edwards of Brattleboro Lorber of Burlington Pugh of S. Burlington Fisher of Lincoln Maier of Middlebury Randall of Troy French of Randolph Malcolm of Pawlet Rusten of Halifax Grad of Moretown Marek of Newfane Seibert of Norwich Haas of Rochester McCullough of Williston Tracy of Burlington Head of S. Burlington McLaughlin of Royalton Zuckerman of Burlington Hosford of Waitsfield Milkey of Brattleboro Howrigan of Fairfield Minter of Waterbury Those members absent with leave of the House and not voting are: Brennan of Colchester Johnson of Canaan Pellett of Chester DePoy of Rutland City Koch of Barre Town Pillsbury of Brattleboro Donaghy of Poultney Larrabee of Danville Sharpe of Bristol Donahue of Northfield Martin of Wolcott Trombley of Grand Isle Flory of Pittsford Masland of Thetford Wood of Brandon Gervais of Enosburg Miller of Elmore Wright of Burlington

Rep. Fisher of Lincoln explained his vote as follows: “Madam Speaker: Healthy open debate is a basic part of our democracy. The tension between our military and civilian worlds require such open public debate even when it is difficult.” Rep. Haas of Rochester explained her vote as follows: “Madam Speaker: Two of the towns I represent voted for a version of the original resolution seeking ways to better support the Vermont National Guard. I worry anytime this body votes to stifle a conversation with the citizens of Vermont.” Rep. Jerman of Essex explained his vote as follows: “Madam Speaker: I voted to recommit this resolution to committee not because of my opposition to the content of the resolution, but because any risk, real or perceived, to the continued operation of the Vermont Air Guard is simply unacceptable” Rep. Zuckerman of Burlington explained his vote as follows:

JOURNAL OF THE HOUSE 221 “Madam Speaker: The committee on appropriations has already reviewed this resolution. Make no mistake, this resolution will not return to the floor if this vote is affirmative. I believe we all hope our occupation of Iraq and the use of our Guard will be over by January, I doubt it. But in either case, the impact on our Guard families, our communities and our State are profound. It is a disservice to all to not have a discussion of this issue and a vote on this resolution to show our constituents our support for our guard members and their families. What are we afraid of?” Recess At twelve o’clock and twenty minutes in the afternoon, the Speaker declared a recess until the fall of the gavel. At three o’clock and thirty minutes in the afternoon, the Speaker called the House to order. Message from the Senate No. 82 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered the report of the Committee of Conference upon the disagreeing votes of the two Houses upon House bill of the following title: H. 130. An act relating to executive branch fees. And has accepted and adopted the same on its part. Message from the Senate No. 83 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered the reports of the Committees of Conference upon the disagreeing votes of the two Houses upon House bills of the following titles: H. 516. An act making appropriations for the support of government. H. 521. An act relating to miscellaneous tax amendments. And has accepted and adopted the same on its part. 222 SATURDAY, JUNE 4, 2005 Message from the Senate No. 84 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered the reports of the Committees of Conference upon the disagreeing votes of the two Houses upon Senate bills of the following titles: S. 15. An act relating to voyeurism. S. 56. An act relating to restructuring the agency of natural resources. And has accepted and adopted the same on its part. Message from the Senate No. 85 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered bills originating in the House of the following titles: H. 86. An act relating to shortened property tax redemption period. H. 314. An act relating to agricultural economic development. H. 325. An act relating to Workers’ Compensation compensability of heart attacks suffered by firefighters and police officers. And has passed the same in concurrence. Message from the Senate No. 86 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered the report of the Committee of Conference upon the disagreeing votes of the two Houses upon House bill of the following title: H. 540. An act relating to the agricultural and forest land use value program. And has accepted and adopted the same on its part.

JOURNAL OF THE HOUSE 223 The Senate has considered a bill originating in the House of the following title: H. 541. An act relating to appointment of a sergeant major and a chief master sergeant in the Vermont National Guard. And has passed the same in concurrence.

Rule Suspended; Report of Committee of Conference Adopted; Rules Suspended; Action on Bill Ordered Messaged to Senate Forthwith and the Bill Delivered to the Governor Forthwith H. 130 Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town, the rules were suspended and Senate proposal of amendment to House bill, entitled An act relating to executive branch fees; Was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill, respectfully reports that it has met and considered the same and recommends that the House accede to the Senate’s First and Second proposals of amendment, and that the Senate recede from its Third proposal of amendment, and that the bill be further amended as follows: First: By adding new Secs. 18 - 28 to read as follows: Sec. 18. 20 V.S.A. § 1815 is amended to read: § 1815. AVAILABILITY OF PHOTOGRAPHIC PRINTS OR PHOTOSTATIC COPIES (a) Photographic prints taken by the department of public safety or photostatic copies of investigation reports or other material on file relating to motor vehicle accidents or fires, may be furnished to any interested person. 224 SATURDAY, JUNE 4, 2005 (1) Photographic prints related to accidents or fire investigations shall be $5.00 $8.00 per print, and discs shall be $20.00 per disc. (2) The commissioner of public safety is authorized to collect fees sufficient to recover the costs associated with the processing of photographic films for criminal justice agencies. Such costs include the cost of materials, labor and machine time related to the processing of films by the department. (3) Copies of fire investigation reports shall be $15.00 $20.00 per report. If the reports contain audiotape or videotape, the fee for each audiotape or videotape shall be $15.00 $20.00. (4) Investigation reports unrelated to fires or motor vehicle accidents may be furnished at the discretion of the commissioner when in his or her opinion the release of such material would not be detrimental to the best interests of the department. The fee for such reports shall be $15.00 $20.00. If the reports contain audiotape or videotape, the fee for each audiotape or videotape shall be $15.00 $20.00. (5) Officers' reports of motor vehicle accidents which do not require a report to the commissioner of motor vehicles pursuant to 23 V.S.A. § 1129 may be sold for $10.00 $20.00 per report. (b) Fees collected under this section shall be credited to the sale of photos and reports special fund and shall be available to the department to offset the cost of providing the services. (c) If a photostatic report furnished under this section exceeds 20 pages, the additional pages shall cost $0.05 per page and $0.33 per minute for staff time in excess of 30 minutes. * * * Agency of Agriculture, Food and Markets * * * Sec. 19. 6 V.S.A. § 324(b) is amended to read: (b) No person shall distribute in this state a commercial feed which that has not been registered pursuant to the provisions of this chapter. Application shall be in a form and manner to be prescribed by rule of the secretary. The application for registration of a commercial feed shall be accompanied by a registration fee of $50.00 $70.00 per product. The registration fees, along with any surcharges collected under subsection (c) of this section, shall be deposited in the special fund created by subsection 364(e) of this title. Funds deposited in this account shall be restricted to implementing and administering the provisions of this chapter title and any other provisions of the law relating to fertilizer, lime, or seeds. If the secretary so requests, the application for registration shall be accompanied by a label or other printed matter describing the product.

JOURNAL OF THE HOUSE 225 Sec. 20. 6 V.S.A. § 364(e) is amended to read: (e) The registration and tonnage fees, along with any deficiency penalties collected pursuant to sections 331 and 372 of this title, shall be deposited in a special fund. Funds deposited in this fund shall be restricted to implementing and administering the provisions of this chapter title and any other provisions of law relating to feeds and seeds. Sec. 21. 6 V.S.A. § 918(b) is amended to read: (b) The registrant shall pay an annual fee of $75.00 $92.00 for each product registered which, and that amount shall be deposited in the special fund created in section 929 of this title, of which $5.00 from each product registration shall be used for an educational program related to the proper purchase, application, and disposal of household pesticides, and $5.00 from each product registration shall be used to collect and dispose of obsolete and unwanted pesticides. The annual registration year shall be from December 1 to November 30 of the following year. Sec. 22. 6 V.S.A. § 929(a) is amended to read: (a) There is hereby created a special pesticide monitoring revolving fund. Monies collected pursuant to section subsection 918(b) of this title shall be deposited in the fund. The secretary may use monies deposited in the fund for the following purposes: (1) for For the purpose of monitoring pesticides, conducting pesticide educational activities, researching alternatives to the use of pesticides for pest control, and implementing pesticide reduction strategies pursuant to the provisions of 6 V.S.A. § 1110;. (2) to To pay salaries of full and part-time employees involved in monitoring pesticides;. (3) to To purchase necessary pesticide monitoring and analytical equipment;. (4) to To defray the cost of necessary operating expenses;. * * * (7) To implement and administer the provisions of this title and any other provisions of law relating to pesticides. * * * Victims’ Compensation Fund * * * 226 SATURDAY, JUNE 4, 2005 Sec. 23. 13 V.S.A. § 7282(a) is amended to read: (a) In addition to any penalty or fine imposed by the court or judicial bureau for a criminal offense or any civil penalty imposed for a traffic violation, including any violation of a fish and wildlife statute or regulation, violation of a motor vehicle statute, or violation of any local ordinance relating to the operation of a motor vehicle, except violations relating to seat belts and child restraints and ordinances relating to parking violations, the clerk of the court or judicial bureau shall levy an additional fee of: * * * (6) For any offense committed after June 30, 2003: (A) For any offense or violation committed after June 30, 2003, but before July 1, 2005, $21.00, of which $13.75 shall be deposited into a special fund account to be known as the victims’ compensation special fund, and $2.25 shall be deposited into the criminal justice training council special fund established in section 2363 of Title 20; and. (7) For any offense or violation committed after June 30, 2005, $22.00, of which $14.75 shall be deposited into the victims’ compensation special fund and $2.25 shall be deposited into the criminal justice training council special fund established in section 2363 of Title 20. (B)(8) For any offense or violation committed after June 30, 2003, an amount equal to 15 percent of the fine imposed for the offense, rounded upward to the nearest whole dollar, which shall be deposited into the crime victims’ restitution special fund established by section 5363 of this title. * * * Department of Environmental Conservation * * * Sec. 24. LEGISLATIVE INTENT It is the intent of the general assembly that aquatic nuisance control stickers issued by the secretary of natural resources in accordance with this act be marketed as a voluntary program for those who wish to increase public awareness of the state’s interest in controlling aquatic nuisances, and that the stickers not be in any way sold as, or implied to be, required or mandatory. Sec. 25. 10 V.S.A. § 924 is added to read: § 924. AQUATIC NUISANCE CONTROL STICKER PROGRAM; AQUATIC NUISANCE CONTROL SPECIAL FUND CREATION (a) The department of environmental conservation may develop an aquatic nuisance control sticker for voluntary mounting on motorboats, personal

JOURNAL OF THE HOUSE 227 watercraft, paddlecraft, or other vehicles or areas of display. The department, as part of any program developed under this section, shall select a graphic design or designs for the sticker that will enhance the public awareness of the state’s interest in controlling aquatic nuisance species. (b) The commissioner of environmental conservation shall have the authority to sell and distribute the stickers. The charge for an individual aquatic nuisance control sticker sold by any person shall be $10.00. The department is authorized to sell stickers at a cost of $9.00 per sticker if sold for resale. The department of environmental conservation shall use monies collected under this section and any gifts, grants, or contributions received by the department for the purpose of aquatic nuisance control to implement the programs authorized by this section and sections 921, 922, and 923 of this title. (c) The aquatic nuisance control special fund is established in the state treasury pursuant to subchapter 5 of chapter 7 of Title 32. The fund shall be administered by the department of environmental conservation to implement programs authorized by this section and sections 921, 922, and 923 of this title. The fund shall consist of gifts, donations, fees collected by the department for aquatic nuisance stickers, and appropriations by the general assembly. Sec. 26. REPORT TO THE GENERAL ASSEMBLY The department of environmental conservation shall provide an accounting of the revenue raised by the aquatic nuisance sticker program established under 10 V.S.A. § 924 every three years at the time the agency of natural resources is required to report all fees to the general assembly pursuant to 32 V.S.A. § 605. * * * Executive Branch Fee Study * * * Sec. 27. EXECUTIVE BRANCH FEE STUDY The department of finance and management, in consultation with the legislative council and the joint fiscal office, shall study the process under which executive branch agencies of the state submit proposed fees to the General Assembly for review as required under 32 V.S.A. § 605 and shall recommend whether this process should be amended to more accurately specify the justification for a proposed fee. The study shall review and evaluate agency compliance with the requirements of 32 V.S.A. § 605 to describe the services or product provided for the fee and the regulatory function performed. The study shall include a specific emphasis on whether agencies sufficiently justify the proposed fee or proposed change in fee and reasonably relate the fee or change in the fee to the cost to the agency of the service provided. The study shall also include an evaluation of whether additional justification provided by agencies for a proposed fee, such as a 228 SATURDAY, JUNE 4, 2005 comparison to similar governmental or non - governmental charges in Vermont or in other states, is necessary and should be included in submission of proposed fees to the General Assembly. For purposes of this study, the “cost to the agency” may include reasonable and directly related costs of administration, maintenance, and other expenses incurred in providing a service or product or performing a regulatory function. The recommendations of the department shall include proposed legislation. The study and the recommendations shall be reported to the house committee on ways and means and the senate committee on finance by January 15, 2006. * * * Effective Dates * * * Sec. 28. EFFECTIVE DATE This act shall take effect on July 1, 2005, except that: (1) Sec. 3d shall take effect on July 1, 2006. (2) 10 V.S.A. § 4132(e) in Sec. 10 shall take effect on January 1, 2006. Committee on the Part of Committee on the Part of The Senate The House Sen. Ann Cummings Rep. Mary Peterson Sen. Claire Ayer Rep. Carolyn Branagan Rep. Johannah Donovan Which was considered and adopted on the part of the House. On motion of Rep. Sunderland of Rutland Town, the rules were suspended and action on the bill was ordered messaged to the Senate forthwith and the bill delivered to the Governor forthwith. Addendum to the Report of Committee of Conference Adopted S. 156 The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that their report of the committee of conference be amended by striking Sec. 25 in its entirety and inserting in lieu thereof a new Sec. 25 to read as follows: Sec. 25. 13 V.S.A. § 1028a is amended to read:

JOURNAL OF THE HOUSE 229 § 1028a. ASSAULT OF CORRECTIONAL OFFICER; ASSAULT WITH BODILY FLUIDS * * * (b) No person shall intentionally cause blood, vomitus, excrement, mucus, saliva, semen, or urine to come in contact with: (1) Any person lawfully present in a correctional facility unless the person’s presence within the facility requires the contact; or (2) An employee of a correctional facility acting in the scope of employment unless the employee’s scope of employment requires the contact. (c) A person who violates subsection (b) of this section shall be imprisoned not more than two years or fined not more than $1,000.00, or both . (d) A sentence imposed for a conviction of this section shall be served consecutively with and not concurrently with any other sentence.

Committee on the Part of Committee on the Part of The Senate The House Sen. Richard W. Sears Jr. Rep. Michael R. Kainen Sen. John F. Campbell Rep. Richard J. Marek Sen. Wendy L. Wilton Rep. John S. Rodgers Which was considered and adopted on the part of the House. Rules Suspended; Report of Committee of Conference Adopted H. 540 Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town, the rules were suspended and Senate proposal of amendment to House bill, entitled An act relating to agricultural and forest land use value program; Was taken up for immediate consideration. The Senate proposes to the House to amend the bill as follows: The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and 230 SATURDAY, JUNE 4, 2005 considered the same and recommends that the House accede to the Senate proposal of amendment and that the bill be further amended by adding three new sections, to be Secs. 3, 4, and 5 to read as follows: Sec. 3. 32 V.S.A. § 3752(1)(C)(iii) is amended to read: (iii) exceptions to these income requirements may be made in cases of orchard lands planted to fruit producing trees, bushes or vines which are not yet of bearing age. For the purposes of this subdivision section, the term "farm crops" also includes animal fiber, cider, wine and cheese produced on the enrolled land or on a housesite adjoining the enrolled land from agricultural products grown on the enrolled land. Committee on the Part of Committee on the Part of The Senate The House Sen. Sara Kittell Rep. Bill Botzow Sen. Claire Ayer Rep. John Malcolm Which was considered and adopted on the part of the House. Rules Suspended; Report of Committee of Conference Adopted H. 516 Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town, the rules were suspended and House bill, entitled An act relating to making appropriations for the support of government; Was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following: Sec. 1. SHORT TITLE (a) This bill may be referred to as the BIG BILL - Fiscal Year 2006 Appropriations Act. Sec. 2. PURPOSE

JOURNAL OF THE HOUSE 231 (a) The purpose of this act is to provide appropriations for the operations of state government during fiscal year 2006. It is the express intent of the general assembly that activities of the various agencies, departments, divisions, boards, and commissions be limited to those which can be supported by funds appropriated in this act or other acts passed prior to June 30, 2005. Agency and department heads are directed to implement staffing and service levels at the beginning of fiscal year 2006 so as to meet this condition unless otherwise directed by specific language in this act or other acts of the general assembly. Sec. 3. APPROPRIATIONS (a) It is the intent of the general assembly that this act serve as the primary source and reference for appropriations for fiscal year 2006. (b) The sums herein stated are appropriated for the purposes specified in the following sections of this act. When no time is expressly stated during which any of the appropriations are to continue, the appropriations are single- year appropriations, and only for the purpose indicated, and shall be paid from funds shown as the source of funds. If in this act there is an error in either addition or subtraction, the totals shall be adjusted accordingly. Apparent errors in referring to section numbers of statutory titles within this act may be disregarded by the commissioner of finance and management. (c) Unless codified or otherwise specified, all narrative portions of this act apply only to the fiscal year ending June 30, 2006. (d) The balance of any appropriations remaining unexpended and unencumbered at the end of the fiscal year shall revert to the appropriate fund balance unless otherwise specified in this act or other acts of the general assembly. Refunds of expenditures and reimbursements shall be credited to the appropriate fund and to appropriation accounts in the current fiscal year. Sec. 4. DEFINITIONS (a) For the purposes of this act: (1) "Encumbrances" means a portion of an appropriation reserved for the subsequent payment of existing purchase orders or contracts. The commissioner of finance and management shall make final decisions on the appropriateness of encumbrances. (2) "Grants" means subsidies, aid, or payments to local governments, to community and quasi-public agencies for providing local services, and to persons who are not wards of the state for services or supplies, and cash or other direct assistance, including pension contributions. 232 SATURDAY, JUNE 4, 2005 (3) "Operating expenses" means property management, repair and maintenance; rental expenses; insurance, postage, travel, energy and utilities, office and other supplies; equipment, including motor vehicles, highway materials and construction, expenditures for the purchase of land, and construction of new buildings and permanent improvements; and similar items. (4) "Personal services" means wages and salaries, fringe benefits, per diems, and contracted third-party services; and similar items. Sec. 5. Secretary of administration - secretary's office Personal services 445,340 Operating expenses 51,583 Grants 400,000 Total 896,923 Source of funds General fund 846,821 Transportation fund 50,102 Total 896,923 (a) The secretary of administration and the state archivist are directed to jointly develop a comprehensive strategy for the management of all records created by state agencies, including but not limited to the following areas: (1) appraisal of all current records management programs required under 3 V.S.A. § 218; (2) the use and management of electronic records; (3) the development of records management training. (b) The secretary of administration shall develop a preliminary plan of implementation of the comprehensive strategy in subsection (a), including proposed, phased time lines for the implementation, by January 1, 2006. The comprehensive strategy shall be based on actual retrieval histories and applicable statutory mandates. (c) The secretary of administration and the state archivist shall report to the house and senate committees on government operations and appropriations on this initiative on or before January 15, 2006, and recommend any statutory changes that will reduce the amount of records maintained and stored by state agencies. (d) Of the above appropriation $400,000, is for grants to the 11 existing regional marketing programs (RMP). These funds plus additional funds appropriated in this act for regional marketing activities shall continue to be distributed by the existing formula. RMP funds shall be used on the following

JOURNAL OF THE HOUSE 233 marketing activities (in no specific order): regional websites, consumer/trade shows, packages/itineraries, regional publications and guides, toll free phone lines and fulfillment, public relations, advertising, familiarization tours, welcome center promotion, joint projects, and administration. Sec. 6. IN-STATE TRAVEL REDUCTION (a) The secretary of administration is directed to reduce in-state travel budgets, thereby reducing operating expense appropriations by $300,000 in general funds throughout the executive branch of state government and in place of this funding, encourage departments and agencies to utilize Vermont interactive television for meetings. The secretary shall report to the house and senate committees on appropriations by the end of December 2006 on the use of Vermont interactive television by state agencies and departments during fiscal year 2006. Sec. 7. Information and innovation - GOVnet Personal services 567,046 Operating expenses 189,353 Total 756,399 Source of funds Internal service funds 756,399 Sec. 8. Information and innovation - communications and information technology Personal services 3,482,819 Operating expenses 563,177 Total 4,045,996 Source of funds Internal service funds 4,045,996 (a) The commissioner of information and innovation shall, with the cooperation of the legislative director of information technology, report to the general assembly by January 15, 2006 on the potential for conversion of the current legislative e-mail service to the same system used by the executive branch. The report shall include direct savings and costs associated with such a conversion, a time line for such a conversion and how customer service, training, privacy, and security concerns would be addressed in such a conversion. (b) The commissioner of information and innovation shall report to the general assembly by January 15, 2006 on the potential for conversion of the current telephone system to a voice-over internet protocol (VOIP) based system. The report shall include the estimated cost of such a conversion, the 234 SATURDAY, JUNE 4, 2005 potential savings a VOIP system may provide, and consideration of customer service concerns from both the state employee and state citizen perspective. Sec. 9. Finance and management - financial operations Personal services 2,139,003 Operating expenses 1,203,059 Total 3,342,062 Source of funds Internal service funds 3,342,062 (a) Pursuant to 32 V.S.A. § 307(e), financial management fund charges not to exceed $4,295,964, plus the costs of fiscal year 2006 salary increases bargained as part of the State/VSEA agreement, are hereby approved. Of this amount, $867,229 will be used to support the HRMS system that is operated by the department of human resources. Sec. 10. Finance and management - budget and management Personal services 908,332 Operating expenses 128,752 Total 1,037,084 Source of funds General fund 816,881 Transportation fund 111,313 Interdepartmental transfer 108,890 Total 1,037,084 (a) The department of finance and management shall propose to the general assembly on January 15, 2006 the necessary statutory language and process changes required to consolidate at least 20 percent of the special funds currently in the statewide accounting system. Sec. 11. Human resources - operations Personal services 1,606,082 Operating expenses 314,842 Total 1,920,924 Source of funds General fund 1,281,126 Transportation fund 347,778 Interdepartmental transfer 292,020 Total 1,920,924 Sec. 12. Human resources - HR workforce planning & employment services Personal services 841,435

JOURNAL OF THE HOUSE 235 Operating expenses 301,357 Total 1,142,792 Source of funds General fund 708,084 Transportation fund 199,708 Special funds 235,000 Total 1,142,792 Sec. 13. Human resources - employee benefits & wellness Personal services 1,448,884 Operating expenses 355,564 Total 1,804,448 Source of funds Internal service funds 1,804,448 Sec. 14. Human resources - information technology Personal services 515,184 Operating expenses 370,605 Total 885,789 Source of funds Internal service funds 885,789 Sec. 15. Libraries Personal services 1,881,114 Operating expenses 1,573,421 Grants 70,000 Total 3,524,535 Source of funds General fund 2,328,186 Special funds 227,820 Federal funds 812,529 Interdepartmental transfer 156,000 Total 3,524,535 Sec. 16. Tax - administration/collection Personal services 11,477,404 Operating expenses 2,684,071 Total 14,161,475 Source of funds General fund 13,167,874 Transportation fund 213,601 Tobacco fund 58,000 236 SATURDAY, JUNE 4, 2005 Special funds 542,000 Interdepartmental transfer 180,000 Total 14,161,475 Sec. 17. Buildings and general services - administration Personal services 1,438,892 Operating expenses 109,308 Total 1,548,200 Source of funds Interdepartmental transfer 1,548,200 Sec. 18. Buildings and general services - engineering Personal services 1,876,190 Operating expenses 444,472 Total 2,320,662 Source of funds General fund 2,173,473 Transportation fund 102,189 Interdepartmental transfer 45,000 Total 2,320,662 Sec. 19. Buildings and general services - information centers Personal services 3,294,693 Operating expenses 1,177,513 Grants 370,000 Total 4,842,206 Source of funds General fund 42,914 Transportation fund 4,799,292 Total 4,842,206 Sec. 20. Buildings and general services - purchasing Personal services 704,895 Operating expenses 169,370 Total 874,265 Source of funds General fund 656,618 Transportation fund 217,647 Total 874,265 Sec. 21. Buildings and general services - public records Personal services 863,949

JOURNAL OF THE HOUSE 237 Operating expenses 701,543 Total 1,565,492 Source of funds General fund 1,071,612 Transportation fund 182,620 Special funds 311,260 Total 1,565,492 Sec. 22. Buildings and general services - postal services Personal services 599,500 Operating expenses 142,952 Total 742,452 Source of funds General fund 40,000 Transportation fund 30,000 Internal service funds 672,452 Total 742,452 Sec. 23. Buildings and general services - copy center Personal services 788,629 Operating expenses 215,702 Total 1,004,331 Source of funds Internal service funds 1,004,331 Sec. 24. Buildings and general services - supply center Personal services 246,376 Operating expenses 132,601 Total 378,977 Source of funds Internal service funds 378,977 Sec. 25. Buildings and general services - federal surplus property Personal services 63,749 Operating expenses 70,299 Total 134,048 Source of funds Enterprise funds 134,048 Sec. 26. Buildings and general services - state surplus property Personal services 58,930 Operating expenses 65,680 238 SATURDAY, JUNE 4, 2005 Total 124,610

Source of funds Internal service funds 124,610 Sec. 27. Buildings and general services - property management Personal services 1,240,936 Operating expenses 2,606,448 Total 3,847,384 Source of funds Internal service funds 3,847,384 Sec. 28. Buildings and general services - all other insurance Personal services 59,648 Operating expenses 11,739 Total 71,387 Source of funds Internal service funds 71,387 Sec. 29. Buildings and general services - general liability insurance Personal services 223,314 Operating expenses 38,632 Total 261,946 Source of funds Internal service funds 261,946 Sec. 30. Buildings and general services - workers' compensation insurance Personal services 958,583 Operating expenses 152,019 Total 1,110,602 Source of funds Internal service funds 1,110,602 (a) Pursuant to 32 V.S.A. § 307(e), workers' compensation fund charges not to exceed $8,664,387, plus the costs of fiscal year 2006 salary increases bargained as part of the State/VSEA agreement, are hereby approved. Sec. 31. Buildings and general services - fee for space Personal services 10,385,701 Operating expenses 9,960,599 Total 20,346,300 Source of funds Internal service funds 20,346,300

JOURNAL OF THE HOUSE 239 (a) Pursuant to 29 V.S.A. § 160a(b)(3), facilities operations fund charges not to exceed $20,346,300, plus the costs of fiscal year 2006 salary increases bargained as part of the State/VSEA agreement, are hereby approved. (b) The following 6 (six) classified positions with any incumbents shall be moved from the department of health – Vermont state hospital to the department of buildings and general services: Custodian I (position numbers 740652, 740684, 740716, 741010), Custodian III (position number 740651), and VSH Housekeeper (position number 740650). Sec. 32. Geographic information system Grants 393,957 Source of funds Special funds 393,957 Sec. 33. Auditor of accounts Personal services 1,866,196 Operating expenses 103,338 Total 1,969,534 Source of funds General fund 468,742 Transportation fund 59,317 Special funds 54,455 Internal service funds 1,387,020 Total 1,969,534 Sec. 34. State treasurer Personal services 2,158,253 Operating expenses 329,009 Grants 25,000 Total 2,512,262 Source of funds General fund 837,580 Transportation fund 104,035 Special funds 1,475,133 Private purpose trust fund 95,514 Total 2,512,262 (a) Of the above general fund appropriation, $25,000 shall be transferred into the armed services scholarship fund established in 16 V.S.A. § 2541.

Sec. 34a. 32 V.S.A. § 436 is amended to read: 240 SATURDAY, JUNE 4, 2005 § 436. INTERFUND BORROWING Notwithstanding any provisions of law, the state treasurer, with the approval of the governor, may borrow from any funds heretofore or hereafter created by the legislature such available amounts as he or she may determine to be necessary or desirable for the purpose of defraying the expenses of government, including the payment of notes issued for such purposes. Such borrowing may be only made twice a year; first, during the period commencing 15 business days prior to the end of the state's fiscal year and ending 15 business days after the end of the state's fiscal year, and second, during the period commencing on December 10, or the preceding Friday if December 10 shall fall on a Saturday or Sunday, and ending on January 10 of the succeeding year. During the period commencing with the first day of the state's succeeding fiscal year and ending on a date not more than 15 business days thereafter, No later than the last day of the period during which the funds were borrowed, the state treasurer shall transfer to any such fund from which such initial borrowing has been made an amount equal to such borrowed amount, together with interest thereon at such rate as the state treasurer in his or her sole discretion shall determine. Sec. 34b. COMMISSION ON FUNDING THE STATE TEACHERS’ RETIREMENT SYSTEM OF VERMONT PENSION ACCUMULATION FUND (a) A commission is created to make recommendations for funding an adequate, sustainable, and actuarially sound retirement benefit plan for the state teachers’ retirement system of Vermont. The commission shall be comprised of the following 13 members: (1) two members of the house of representatives, appointed by the speaker of the house; (2) two members of the senate, appointed by the committee on committees; (3) the chair of the board of trustees of the Vermont state teachers’ retirement system; (4) the commissioner of finance and management; (5) the commissioner of education; (6) the state treasurer, who shall chair this commission; (7) two members of the Vermont national education association, appointed by the association;

JOURNAL OF THE HOUSE 241 (8) one member of the Vermont superintendents’ association, appointed by the association; (9) one member of the Vermont school boards’ association, appointed by the association; and (10) one public member with pension and benefit experience, appointed by the governor. (b) The commission shall file a report of its recommendations with the governor and the general assembly on November 15, 2005. (c) Legislative members shall be entitled to per diem compensation and expenses as provided for in section 406 of Title 2. Sec. 35. State treasurer - abandoned property Personal services 541,534 Operating expenses 242,188 Total 783,722 Source of funds Private purpose trust fund 783,722 Sec. 36. Vermont state retirement system Personal services 20,448,159 Operating expenses 729,324 Total 21,177,483 Source of funds Pension trust fund 21,177,483 Sec. 37. Municipal employees' retirement system Personal services 1,427,518 Operating expenses 213,732 Total 1,641,250 Source of funds Pension trust fund 1,641,250 Sec. 38. State labor relations board Personal services 157,439 Operating expenses 40,128 Total 197,567 Source of funds General fund 187,100 Transportation fund 4,597 Special funds 5,870 242 SATURDAY, JUNE 4, 2005 Total 197,567 Sec. 39. Executive office - governor's office Personal services 1,158,112 Operating expenses 369,756 Total 1,527,868 Source of funds General fund 1,206,200 Transportation fund 157,483 Special funds 3,185 Interdepartmental transfer 161,000 Total 1,527,868 Sec. 40. Executive office - national and community service Personal services 191,634 Operating expenses 121,871 Grants 1,745,415 Total 2,058,920 Source of funds General fund 56,528 Federal funds 2,002,392 Total 2,058,920 Sec. 41. VOSHA review board Personal services 31,652 Operating expenses 8,542 Total 40,194 Source of funds General fund 20,097 Federal funds 20,097 Total 40,194 Sec. 42. Use tax reimbursement fund - municipal current use Grants 6,898,455 Source of funds General fund 4,569,542 Transportation fund 2,328,913 Total 6,898,455 Sec. 43. Lieutenant governor Personal services 118,723 Operating expenses 17,649

JOURNAL OF THE HOUSE 243 Total 136,372 Source of funds General fund 117,089 Transportation fund 19,283 Total 136,372 Sec. 44. Legislature Personal services 2,925,702 Operating expenses 2,191,219 Total 5,116,921 Source of funds General fund 4,414,316 Transportation fund 702,605 Total 5,116,921 Sec. 45. Legislative council Personal services 1,685,880 Operating expenses 136,604 Total 1,822,484 Source of funds General fund 1,588,701 Transportation fund 233,783 Total 1,822,484 (a) The amount of $30,000 in general funds that are carried forward in this appropriation shall revert to the general fund in fiscal year 2006. Sec. 46. Legislative information technology Personal services 309,186 Operating expenses 254,227 Total 563,413 Source of funds General fund 563,413 (a) The amount of $20,000 in general funds that are carried forward in this appropriation shall revert to the general fund in fiscal year 2006. Sec. 47. Sergeant at arms Personal services 438,870 Operating expenses 62,909 Total 501,779 Source of funds General fund 461,044 244 SATURDAY, JUNE 4, 2005 Transportation fund 40,735 Total 501,779 Sec. 48. Joint fiscal committee Personal services 1,045,988 Operating expenses 72,385 Total 1,118,373 Source of funds General fund 982,901 Transportation fund 135,472 Total 1,118,373 Sec. 48a. REPEAL (a) Sec. 4 of No. 119 of the Acts of 2000 is repealed. No further report on the basic needs budget calculation pursuant to this section shall be required. However, the report shall be updated as needed on or before January 1 of the interim year, 2006, to reflect any significant economic, policy, or statutory changes that substantially affect the information in the report issued the previous January 15. Sec. 49. Lottery commission Personal services 1,279,592 Operating expenses 1,057,167 Total 2,336,759 Source of funds Enterprise funds 2,336,759 (a) The lottery commission shall not reduce funding for the responsible gambling program. (b) The lottery commission shall transfer $130,000 to the department of health, office of alcohol and drug abuse programs, to support the gambling addiction program. (c) Notwithstanding any other provision of law, all rules necessary to implement the Tri-State Triple Play game shall be promulgated by the Tri- State Lotto Commission, including those portions of the rules that are specific to the operation of the Tri-State Triple Play game in the state of Vermont. Sec. 50. Payments in lieu of taxes Grants 2,500,000 Source of funds General fund 600,000 Special funds 1,900,000

JOURNAL OF THE HOUSE 245 Total 2,500,000 (a) The above appropriation is for state payments in lieu of property taxes under subchapter 4 of chapter 123 of Title 32, and the payments shall be calculated in addition to, and without regard to, the appropriations for PILOT for Montpelier and correctional facilities elsewhere in this act. Sec. 51. Payments in lieu of taxes - Montpelier Grants 184,000 Source of funds General fund 184,000 Sec. 52. Payments in lieu of taxes - correctional facilities Grants 40,000 Source of funds General fund 40,000 Sec. 53. Total general government 125,912,602 Source of funds General fund 39,130,842 Transportation fund 10,040,473 Special funds 5,148,680 Tobacco fund 58,000 Federal funds 2,835,018 Enterprise funds 2,470,807 Internal service funds 40,039,703 Pension trust funds 22,818,733 Private purpose trust funds 879,236 Interdepartmental transfer 2,491,110 Total 125,912,602 Sec. 54. Protection to persons and property - attorney general Personal services 5,356,126 Operating expenses 924,563 Total 6,280,689 Source of funds General fund 2,822,155 Transportation fund 69,615 Special funds 1,112,209 Tobacco fund 290,000 Federal funds 617,000 Interdepartmental transfer 1,369,710 246 SATURDAY, JUNE 4, 2005 Total 6,280,689 (a) Of the above appropriation, $25,000 shall be reserved by the attorney general for payment of expenses incurred by towns in defense of grand list appeals engaged in litigation with the Washington electric cooperative. (b) Notwithstanding any other provisions of law, the office of the attorney general, Medicaid fraud control unit is authorized to retain one-half of any civil monetary penalty proceeds from global Medicaid fraud settlements. All penalty funds retained shall be used to finance Medicaid fraud and residential abuse unit activities. Sec. 54a. 33 V.S.A. § 2005(a) is amended to read: § 2005. PHARMACEUTICAL MARKETERS (a)(1) Annually on or before January 1 December 1 of each year, every pharmaceutical manufacturing company shall disclose to the office of the attorney general the value, nature, and purpose of any gift, fee, payment, subsidy, or other economic benefit provided in connection with detailing, promotional, or other marketing activities by the company, directly or through its pharmaceutical marketers, to any physician, hospital, nursing home, pharmacist, health benefit plan administrator, or any other person in Vermont authorized to prescribe, dispense, or purchase prescription drugs in this state. Disclosure shall include the name of the recipient. Disclosure shall be made on a form and in a manner prescribed by the office of the attorney general and shall require pharmaceutical manufacturing companies to report the value, nature, and purpose of all gift expenditures according to specific categories. The office of the attorney general shall report annually on the disclosures made under this section to the general assembly and the governor on or before March 1 April 1. (2) Annually in the month of October on October 1, each company subject to the provisions of this section also shall disclose to the office of the attorney general, the name and address of the individual responsible for the company’s compliance with the provisions of this section, or if this information has been previously reported, any changes to the name or address of the individual responsible for the company’s compliance with the provisions of this section. * * * Sec. 54b. COMMISSION ON SOCIAL SECURITY NUMBER USAGE AND OTHER PRIVACY ISSUES (a) The Social Security Usage Study Commission is hereby created to study the usage of Social Security numbers and other privacy issues in the

JOURNAL OF THE HOUSE 247 public and private sector. The commission shall consist of the following members: one representative from the agency of administration, one representative from the attorney general’s office, one representative from the agency of human services, one representative from the agency of commerce and community development, one representative from the department of banking, insurance, securities, and health care administration, one representative from the department of labor, the state archivist, two members of the senate chosen by the committee on committees, and two members of the house of representatives chosen by the speaker of the house. The commission shall be chaired by the attorney general’s office. The commission shall solicit participation from the Vermont League of Cities and Towns and any other interested affected parties. The commission shall study the use of Social Security numbers by both public and private entities and develop proposals for reducing such use wherever possible and protecting privacy and security when the numbers must be used. In addition, these entities shall study the costs and benefits of document destruction. Assessment of the appropriate implementation periods, investigation of any potential secondary effects, and prohibiting the following shall be considered by the commission: (1) printing of an individual’s Social Security number on any card required for the individual to access products or services provided by the entity; (2) requiring that an individual transmit his or her Social Security number over the internet, unless the connection is secure or the Social Security number is encrypted and requiring an individual to use his or her Social Security number to access an internet website, unless a password or unique personal identification number or other authentication device is also required to access the internet website; or (3) printing of an individual’s Social Security number on any materials that are mailed to the individual, unless state or federal law requires the Social Security number to be on the materials. (b) The commission shall also study the issue of security breaches experienced by collectors of personal information about consumers, and shall develop proposals for effectively notifying consumers about such security breaches. (c) The commission shall prepare recommendations and report to the senate committees on judiciary and finance and the house committees on commerce and judiciary on or before January 15, 2006. (d) Legislative members shall be entitled to compensation and reimbursement as provided in section 406 of Title 2. 248 SATURDAY, JUNE 4, 2005 Sec. 54c. EXTENSION OF SUNSET; CONFIDENTIALITY AND NONCOMMERCIAL DISTRIBUTION OF CERTAIN TAX RECORDS AND DATA Sec. 6 of Act No. 158 of the Acts of 2004 is amended to read: Sec. 6. SUNSET This act shall expire on June 30, 2005 2006, and sections of the Vermont Statutes Annotated which are amended by this act shall revert to the language in effect prior to the effective date of this act. Sec. 55. Vermont court diversion Grants 1,525,071 Source of funds General fund 981,093 Transportation fund 143,978 Special funds 400,000 Total 1,525,071

Sec. 56. Center for crime victims services Personal services 1,035,455 Operating expenses 220,612 Grants 7,425,277 Total 8,681,344 Source of funds General fund 1,018,644 Special funds 3,541,155 Federal funds 4,058,345 Interdepartmental transfer 63,200 Total 8,681,344 (a) The center shall explore credit card use to facilitate restitution payments from offenders. Sec. 57. State's attorneys Personal services 7,807,300 Operating expenses 1,203,460 Grants 45,000 Total 9,055,760 Source of funds General fund 6,856,903 Transportation fund 369,310

JOURNAL OF THE HOUSE 249 Special funds 146,375 Federal funds 5,000 Interdepartmental transfer 1,678,172 Total 9,055,760 Sec. 58. Sheriffs Personal services 2,752,546 Operating expenses 307,269 Total 3,059,815 Source of funds General fund 2,489,576 Transportation fund 570,239 Total 3,059,815 (a) Of the above appropriation, $15,000 shall be transferred to the state's attorneys’ office as reimbursement for the cost of the executive director's salary. Sec. 59. Defender general - public defense Personal services 5,681,340 Operating expenses 636,231 Total 6,317,571 Source of funds General fund 5,200,918 Transportation fund 495,230 Special funds 502,502 Interdepartmental transfer 118,921 Total 6,317,571 Sec. 60. Defender general - assigned counsel Personal services 2,734,829 Operating expenses 52,850 Total 2,787,679 Source of funds General fund 2,448,441 Transportation fund 239,238 Special funds 100,000 Total 2,787,679 Sec. 61. Military - administration Personal services 450,746 Operating expenses 152,035 250 SATURDAY, JUNE 4, 2005 Grants 200,000 Total 802,781 Source of funds General fund 802,781 (a) Of the above appropriation, an amount not to exceed $200,000 shall be disbursed to the Vermont student assistance corporation to replenish the amount available for the national guard scholarship program established in 16 V.S.A. § 2856 to a level of $200,000. At the end of fiscal year 2006, any part of the $200,000 appropriation not transferred to the Vermont student assistance corporation shall be reverted to the general fund. (b) Total disbursements by the Vermont student assistance corporation under 16 V.S.A. § 2856 shall not exceed $200,000 in fiscal year 2006. Sec. 62. Military - air service contract Personal services 3,838,895 Operating expenses 837,681 Total 4,676,576 Source of funds General fund 322,658 Federal funds 4,353,918 Total 4,676,576 Sec. 63. Military - army service contract Personal services 2,692,018 Operating expenses 5,780,134 Total 8,472,152 Source of funds General fund 110,470 Federal funds 8,361,682 Total 8,472,152 Sec. 64. Military - building maintenance Personal services 883,960 Operating expenses 383,512 Total 1,267,472 Source of funds General fund 1,267,472 Sec. 65. Military - veterans' affairs Personal services 246,316 Operating expenses 108,740

JOURNAL OF THE HOUSE 251 Grants 121,165 Total 476,221 Source of funds General fund 476,221 (a) Of the above appropriation, $15,000 shall be used for continuation of the Vermont Medal Program, $40,000 shall be used to provide assistance to the survivors of casualties in the War on Terrorism, $10,000 shall be used for the expenses of the governor's Veterans' Advisory Council, and $15,000 shall be used for the Veterans’ Day Parade. (b) Of the above appropriation, $5,000 shall be granted to the Vermont state council of the Vietnam Veterans of America to fund the service officer program. Sec. 66. Labor and industry Personal services 3,149,401 Operating expenses 719,650 Grants 75,000 Total 3,944,051 Source of funds General fund 836,000 Special funds 1,968,559 Federal funds 1,139,492 Total 3,944,051 Sec. 67. Criminal justice training council Personal services 873,949 Operating expenses 880,979 Total 1,754,928 Source of funds General fund 902,574 Transportation fund 281,919 Special funds 500,435 Interdepartmental transfer 70,000 Total 1,754,928 Sec. 68. Liquor control - enforcement and licensing Personal services 1,557,469 Operating expenses 155,685 Total 1,713,154 Source of funds Tobacco fund 289,768 252 SATURDAY, JUNE 4, 2005 Enterprise funds 1,423,386 Total 1,713,154 Sec. 68a. DEPARTMENT OF LIQUOR CONTROL; THIRD CLASS CABARET LICENSE; REFUND AUTHORITY (a) Upon request of a holder of a third class cabaret license, the department of liquor control shall refund the fee paid for the third class cabaret license prorated from the date of the request until the expiration of the license, provided the cabaret license was acquired for the purpose of permitting smoking in the cabaret licensed area. Sec. 69. Liquor control - administration Personal services 1,250,029 Operating expenses 352,646 Total 1,602,675 Source of funds Enterprise funds 1,602,675 Sec. 70. Liquor control - warehousing and distribution Personal services 716,954 Operating expenses 165,065 Total 882,019 Source of funds Enterprise funds 882,019

Sec. 71. Vermont racing commission Personal services 2,076 Operating expenses 2,924 Total 5,000 Source of funds General fund 5,000 Sec. 72. Secretary of state Personal services 3,603,036 Operating expenses 2,746,911 Total 6,349,947 Source of funds General fund 583,525 Special funds 3,691,422 Federal funds 2,000,000 Interdepartmental transfer 75,000

JOURNAL OF THE HOUSE 253 Total 6,349,947 (a) Of the above special fund appropriation, the corporation division of the secretary of state's office represents $456,403, and these funds shall be from the securities regulation and supervision fund in accordance with 9 V.S.A. § 4230(b). Sec. 72a. Sec. 12(a) of No. 108 of the Acts of 2004 is amended to read: (a) 26 V.S.A. § 1724 (formulary committee) shall be repealed in its entirety on December 31, 2005 July 1, 2006. Any formulary in effect on this date shall remain in effect unless or until a process for adopting a new formulary is authorized by law. Sec. 72b. REPEAL 26 V.S.A. § 1728b (disclosure of information by optometrist) is repealed. Sec. 73. Banking, insurance, securities, and health care administration - banking Personal services 1,141,527 Operating expenses 248,745 Total 1,390,272 Source of funds Special funds 1,390,272 (a) Notwithstanding 9 V.S.A. § 4230(b), in fiscal year 2006, the commissioner of banking, insurance, securities, and health care administration may transfer up to $200,000 from the securities regulation and supervision fund to the banking supervision fund established in 8 V.S.A. § 19(f). Sec. 74. Banking, insurance, securities, and health care administration - insurance Personal services 3,017,341 Operating expenses 530,135 Total 3,547,476 Source of funds Special funds 3,547,476 Sec. 75. Banking, insurance, securities, and health care administration - captive Personal services 2,565,519 Operating expenses 387,214 Total 2,952,733 Source of funds 254 SATURDAY, JUNE 4, 2005 Special funds 2,952,733 Sec. 76. Banking, insurance, securities, and health care administration - securities Personal services 519,436 Operating expenses 130,100 Total 649,536 Source of funds Special funds 649,536 Sec. 77. Banking, insurance, securities, and health care administration - health care administration Personal services 3,609,269 Operating expenses 358,002 Total 3,967,271 Source of funds General fund 469,832 Special funds 3,397,439 Interdepartmental transfer 100,000 Total 3,967,271

Sec. 77a. 18 V.S.A. § 9405a is amended to read: § 9405a. COMMUNITY NEEDS ASSESSMENT AND STRATEGIC PLANNING On or before January 1, 2005, each hospital shall conduct a four-year community needs assessment. The assessment shall identify and prioritize the health care needs of the service area or patient population for which a hospital provides services, and engage the public in the hospital’s strategic planning process. It shall be accomplished in collaboration with community members, including other health care professionals in the community, local government officials, community organizations, and local businesses. The process for assessing the community’s health care needs shall include at least one public meeting held solely for soliciting public comment, notice for which shall be provided pursuant to section 174 of Title 1. The needs assessment shall be prepared in a uniform format approved by the commissioner and shall be summarized in the hospital’s community report. In addition, each hospital shall develop a mechanism for receiving ongoing public comment, including an annual public meeting, regarding the community needs assessment and for revising it biannually so that the assessment will continue to project a four-year vision. Subsequent community needs assessments shall be conducted every four years thereafter, beginning March 1, 2009.

JOURNAL OF THE HOUSE 255 Sec. 77b. 18 V.S.A. § 9405b(b) is amended to read: (b) On or before January 1, 2005, and annually thereafter beginning on June 1, 2006, the board of directors or other governing body of each hospital licensed under chapter 43 of this title shall publish on its website, making paper copies available upon request, its community report in a uniform format approved by the commissioner, and in accordance with the standards and procedures adopted by rule under this section, and shall hold one or more public hearings to permit community members to comment on the report. Notice of meetings shall be by publication, consistent with section 174 of Title 1. Hospitals located outside this state which serve a significant number of Vermont residents, as determined by the commissioner, shall be invited to participate in the community report process established by this subsection. Sec. 77c. 18 V.S.A. § 9432(7) is amended to read: (7) “Health care facility” means all persons or institutions, including mobile facilities, whether public or private, proprietary or not for profit, which offer diagnosis, treatment, inpatient, or ambulatory care to two or more unrelated persons, and the buildings in which those services are offered. The term shall not apply to any institution operated by religious groups relying solely on spiritual means through prayer for healing, but shall include but is not limited to: * * * Sec. 77d. 18 V.S.A. § 9435(c) is amended to read: (c) The provisions of subsection (a) of this section shall not apply to offices owned or, operated, or leased by a hospital or its subsidiary, parent, or holding company, outpatient diagnostic or therapy programs, kidney disease treatment centers, independent diagnostic laboratories, cardiac catheterization laboratories, radiation therapy facilities, ambulatory surgical centers, and diagnostic imaging facilities and similar facilities owned or operated by a physician, dentist, or other practitioner of the healing arts. Sec. 77e. 18 V.S.A. § 9440 is amended to read: § 9440. PROCEDURES * * * (c) The application process shall be as follows: * * * (3) The commissioner shall review each letter of intent and, if the letter contains the information required for letters of intent as established by the 256 SATURDAY, JUNE 4, 2005 commissioner by rule, within 30 days, determine whether the project described in the letter will require a certificate of need. If the commissioner determines that a certificate of need is required for a proposed expenditure or action, an application for a certificate of need shall be filed before development of the project begins. (4) Within 15 days or, in the case of review cycle applications under section 9439 of this title, within 30 days of receipt of an application, the commissioner shall notify the applicant that the application contains all necessary information required and is complete, or that additional information is required. * * * Sec. 77f. 18 V.S.A. § 9456(c) is amended to read: (c) Individual hospital budgets established under this section shall: * * * (5) include a finding that the analysis provided in subdivision (b)(10) (b) (9) of this section is a reasonable methodology for reflecting a reduction in net revenues for non-Medicaid payers. Sec. 77g. SUSPENSION OF CERTIFICATE OF NEED “GAP” JURISDICTION (a) The requirements of subsection 9434(d) of Title 18 are suspended through June 30, 2007. As part of their annual budget reviews, hospitals shall report any projects that otherwise would have required a letter of intent to the commissioner of banking, insurance, securities, and health care administration under subsection 9434(d). Sec. 78. Banking, insurance, securities, and health care administration - administration

Personal services 922,370 Operating expenses 48,000 Total 970,370 Source of funds Special funds 970,370 (a) Notwithstanding any provision of law to the contrary, the commissioner of BISHCA is authorized to take immediate action to remedy air quality problems that have resulted in chemical toxicity to one or more department employees; the commissioner may in his or her discretion authorize telecommuting or off-site work locations for employees who have documented

JOURNAL OF THE HOUSE 257 medical problems which have been, or may be, related to workspace air quality that has resulted in chemical toxicity; and the commissioner may use funds appropriated to the department of buildings and general services to implement any necessary improvements, as approved by the secretary of administration. Sec. 79. Public safety - administration Personal services 1,502,205 Operating expenses 27,548 Grants 48,000 Total 1,577,753 Source of funds General fund 1,577,753 (a) The department of public safety shall provide business manager services for the Vermont criminal justice training council. (b) The department of public safety shall submit a plan for development of a statewide public safety communications system to the house and senate committees on appropriations and government operations and the joint fiscal committee. No funds are to be expended for design, acquisition, or implementation of a new statewide public safety communications system pending review by the aforementioned committees and approval by the joint fiscal committee. (c) The law enforcement advisory board is requested to include comments and recommendations on the proposed statewide public safety communications system in its next report to the governor and the general assembly. (d) The commissioner of public safety and the commissioner of health shall work cooperatively to transition the forensic alcohol program from the Vermont department of health to the department of public safety as soon as administratively possible and shall report to the general assembly on the status of the transition during the 2006 legislative session. In addition, the commissioner of buildings and general services and the commissioner of public safety shall submit a plan for the design and construction, including funding requirements of a new forensics laboratory, to the general assembly by January 15, 2006. (e) Of the above appropriation, $26,000 shall be used for a grant to the Essex County sheriff department. (f) In order to achieve better coordination of all law enforcement resources in the state, the law enforcement advisory board created pursuant to 24 V.S.A. § 1939 shall study the relationship between the state police and local coverage 258 SATURDAY, JUNE 4, 2005 to ensure effective coverage in a cost-effective manner for Vermonters. Specifically it shall: (1) Develop a list of the duties of the department of public safety that cover the entire state such as the crime lab, special investigations, and the mission and duties of the state police; (2) Review the state police coverage and state and local public safety relationships in other states such as New Hampshire and Connecticut, including a review of models that require communities with over 3,500 in population to provide or pay for their law enforcement; (3) Develop ideas for several pilot projects that use local law enforcement to enhance day-to-day coverage and free the state police to focus on its mission and statewide responsibilities; (4) Submit recommendations to the house and senate committees on judiciary and appropriations as part of its annual budget submission to the general assembly in January 2006. Sec. 80. Public safety - homeland security Personal services 851,441 Operating expenses 974,324 Grants 11,771,817 Total 13,597,582 Source of funds General fund 363,007 Federal funds 13,217,575 Interdepartmental transfer 17,000 Total 13,597,582 Sec. 81. Public safety - Vermont state police Personal services 36,221,326 Operating expenses 6,337,277 Grants 1,759,547 Total 44,318,150 Source of funds General fund 17,388,274 Transportation fund 18,555,988 Special funds 3,369,661 Federal funds 4,458,538 Interdepartmental transfer 545,689 Total 44,318,150

JOURNAL OF THE HOUSE 259 (a) The above appropriation for personal services provides funding for 316 state troopers, including 10 “corridor” troopers. Three additional troopers are funded in the homeland security section for a total of 319, the same number as in fiscal year 2005. The above appropriation for operating expenses includes $1,042,000 for the purchase of replacement vehicles. (b) Of the above appropriation, $35,000 in special funds shall be available for snowmobile law enforcement activities and $35,000 in general funds shall be available to the southern Vermont wilderness search and rescue team, which comprises state police, the department of fish and wildlife, county sheriffs, and local law enforcement personnel in Bennington, Windham, and Windsor counties for snowmobile enforcement. (c) Of the $230,000 allocated for local heroin interdiction grants funded in this section, $190,000 shall be used by the Vermont drug task force to fund three (3) town task force officers. These town task force officers will be dedicated to heroin and heroin-related drug (e.g. methadone, oxycontin, crack cocaine, and methamphetamine) enforcement efforts. The remaining $40,000 shall remain as a "pool" of money available to local and county law enforcement to fund overtime costs associated with heroin investigations. Any unexpended funds from prior fiscal years shall be carried forward. (d) In the event that federal funding currently supporting the Vermont drug task force is reduced, the department shall redirect any other federal funds that may be utilized for this purpose, including the methamphetamine grant, and shall redirect available state resources to maintain the activities of the task force. Sec. 81a. 24 V.S.A. §1939(a) is amended to read: (a) A law enforcement advisory board is created within the department of public safety to advise the commissioner of public safety, the governor, and the general assembly on issues involving the cooperation and coordination of all agencies which exercise law enforcement responsibilities. The board shall review any matter which affects more than one law enforcement agency. The board shall comprise the following members: (1) the commissioner of the department of public safety; * * * (11) the executive director of the Vermont criminal justice training council; and (12) the defender general or his or her designee; and 260 SATURDAY, JUNE 4, 2005 (13) one employee-representative of the Vermont state police, appointed by the director of the Vermont state employees’ association. Sec. 82. Public safety - criminal justice services Personal services 4,933,618 Operating expenses 3,585,669 Grants 3,969,200 Total 12,488,487 Source of funds General fund 280,000 Transportation fund 4,100,407 Special funds 1,256,685 Federal funds 6,272,395 Interdepartmental transfer 579,000 Total 12,488,487 (a) Of the above general fund appropriation, $30,000 plus available matching funds shall be used to address the DNA processing associated with S.15 of the 2005 legislative session. This includes hiring additional staff at the Vermont crime lab. Sec. 83. Public safety - emergency management Personal services 1,495,775 Operating expenses 532,443 Grants 630,012 Total 2,658,230 Source of funds Transportation fund 63,969 Special funds 367,903 Federal funds 2,223,858 Interdepartmental transfer 2,500 Total 2,658,230 Sec. 84. Public safety – emergency management - radiological emergency response plan Personal services 548,205 Operating expenses 271,030 Grants 496,112 Total 1,315,347

Source of funds Special funds 1,315,347

JOURNAL OF THE HOUSE 261 (a) Of the above appropriation, the grants to the department of health are increased by $13,911 over fiscal year 2005 and are level-funded for other state agencies. (b) Of the above appropriation, $87,028 is provided to establish a western reception center. This is subject to selection and approval of a site by the commissioner of public safety and VEM/RERP in collaboration with officials of the Emergency Planning Zone (EPZ). (c) The radiological emergency response plan (RERP) functions and funding shall be a separate appropriation in fiscal year 2006 and henceforth. (d) In fiscal year 2006, the division of emergency management in collaboration with the state agencies, the management of the nuclear power plant, the selectboards of the municipalities in the emergency planning zone, the Windham regional planning commission, and any other municipality or EPZ entity defined by the state as required to support the RERP shall develop the budget for expenditures from the radiological emergency response plan fund for fiscal year 2007 following the provisions of 20 V.S.A. § 38(a). From the fund, each town within the emergency planning zone shall receive an annual base payment of no less than $5,000 for radiological emergency response related expenditures. Additional expenditures by the municipalities in the emergency planning zone, the Windham regional planning commission, and any other municipality or EPZ entity defined by the state as required to support the plan shall be determined during the budget development process established by this section. (e) Of the above special fund appropriation, up to $30,000 shall be available to contract with any radio station serving the emergency planning zone for the emergency alert system. Sec. 85. Public safety - fire safety Personal services 3,356,644 Operating expenses 1,099,628 Total 4,456,272 Source of funds General fund 582,688 Transportation fund 80,964 Special funds 3,481,236 Federal funds 92,384 Interdepartmental transfer 219,000 Total 4,456,272 262 SATURDAY, JUNE 4, 2005 (a) Of the above general fund appropriation, $50,000 shall be granted to the Vermont rural fire protection task force for the purpose of designing dry hydrants. Sec. 86. Agriculture, food and markets - administration Personal services 880,196 Operating expenses 453,668 Grants 342,004 Total 1,675,868 Source of funds General fund 1,409,035 Special funds 117,216 Federal funds 91,004 Interdepartmental transfer 58,613 Total 1,675,868 Sec. 87. Agriculture, food and markets - food safety and consumer protection Personal services 2,360,887 Operating expenses 281,572 Grants 2,901,492 Total 5,543,951 Source of funds General fund 1,381,891 Transportation fund 38,862 Special funds 3,344,115 Federal funds 772,083 Interdepartmental transfer 7,000 Total 5,543,951 Sec. 88. Agriculture, food and markets - agricultural development Personal services 816,602 Operating expenses 504,152 Grants 1,049,421 Total 2,370,175 Source of funds General fund 609,472 Special funds 1,571,703 Federal funds 189,000 Total 2,370,175 Sec. 89. Agriculture, food and markets - laboratories, agricultural resource management and environmental stewardship

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Personal services 3,003,076 Operating expenses 554,576 Grants 616,000 Total 4,173,652 Source of funds General fund 1,805,695 Special funds 1,497,845 Federal funds 598,324 Interdepartmental transfer 271,788 Total 4,173,652 Sec. 90. Agriculture, food and markets - state stipend Grants 175,000 Source of funds General fund 175,000 Sec. 91. Agriculture, food and markets - mosquito control Personal services 20,000 Operating expenses 70,000 Total 90,000 Source of funds Special funds 90,000 Sec. 92. Public service - regulation and energy Personal services 4,464,769 Operating expenses 631,466 Grants 800,000 Total 5,896,235 Source of funds Special funds 4,713,435 Federal funds 1,157,800 Interdepartmental transfer 25,000 Total 5,896,235 (a) As part of its report on the use of the clean energy development fund as required by section 3 of H.545 of 2005, the department of public service shall consider efforts to support development and increased use of cogeneration and biomass technologies including the possible dedication of at least $250,000 annually for this purpose. Sec. 93. Public service - purchase and sale of power 264 SATURDAY, JUNE 4, 2005 Personal services 10,600 Operating expenses 2,215 Total 12,815 Source of funds Special funds 12,815 Sec. 94. Enhanced 9-1-1 board Personal services 2,020,257 Operating expenses 397,331 Total 2,417,588 Source of funds Special funds 2,417,588 Sec. 95. Public service board Personal services 2,380,294 Operating expenses 310,000 Total 2,690,294 Source of funds Special funds 2,690,294 Sec. 96. Judiciary Personal services 24,276,133 Operating expenses 6,576,667 Total 30,852,800 Source of funds General fund 24,803,705 Transportation fund 3,028,595 Special funds 622,500 Tobacco fund 40,000 Federal funds 333,000 Interdepartmental transfer 2,025,000 Total 30,852,800 (a) The court administrator shall submit to the house and senate committees on appropriations and judiciary, no later than January 1, 2006, a plan and budget for the staffing and provision of court security services throughout the state. The plan and budget should be based on the recommendations of the Supreme Court’s “Court Security Advisory Committee.” (b) The establishment of two (2) new exempt positions – one (1) Judicial Bureau Docket Clerk and one (1) Guardian ad Litem Volunteer Coordinator – is authorized in fiscal year 2006.

JOURNAL OF THE HOUSE 265 (c) The court administrator shall develop a preliminary plan of implementation of a comprehensive strategy for the management of all public records of all courts, including proposed, phased time lines for the implementation, by January 1, 2006. The management strategy will be based on actual retrieval histories and applicable statutory mandates. (d) The court administrator shall report to the house and senate committees on government operations and appropriations on the records storage reduction initiative on or before January 15, 2006, and recommend any statutory changes that will reduce the amount of records maintained and stored by state agencies. Sec. 96a. 12 V.S.A. § 5540a is amended to read § 5540a. JURISDICTION OVER SMALL CLAIMS; ASSISTANT JUDGES; ADDISON, BENNINGTON, CHITTENDEN, FRANKLIN, GRAND ISLE, LAMOILLE, ORANGE, ORLEANS, WASHINGTON, WINDHAM AND WINDSOR COUNTIES * * * (e) This section shall be repealed effective on July 1, 2005 2008. Sec. 96b. CASH ADVANCES; COUNTY CLERKS (a) Notwithstanding the provisions of 32 V.S.A §§ 469 and 470, cash advances to county clerks shall be administered in the same manner as advances for district courts under the provisions of 32 V.S.A § 466. Sec. 97. 10 V.S.A. § 6618(b) is amended to read: (b) The secretary may authorize disbursements from the solid waste management assistance account for the purpose of enhancing solid waste management in the state in accordance with the adopted waste management plan. This includes: * * * (7) a portion of the costs of administering the waste facility panel established under subchapter 5 of chapter 151 of this title environmental court established under chapter 27 of Title 4. The amount of $120,000.00 per fiscal year shall be disbursed for this purpose; * * * Sec. 98. Human rights commission Personal services 353,523 Operating expenses 84,182 Total 437,705 266 SATURDAY, JUNE 4, 2005 Source of funds General fund 278,014 Federal funds 159,691 Total 437,705 Sec. 98a. 9 V.S.A. § 4553(a)(6)(D) is amended to read: (D) costs and reasonable attorney’s fees associated with the investigation and enforcement of actions; any such costs or fees recovered by the human rights commission under this chapter shall be deposited in the commission’s special fund and shall be available to the commission to offset the costs of providing legal services; Sec. 98b. 9 V.S.A. § 4551(a) is amended to read: (a) The human rights commission is hereby established. It shall consist of five members to be appointed by the governor, with the advice and consent of the senate, who shall designate one member to be its chair. No more than three members shall be of the same political party. At least one member shall be of a racial minority. Sec. 99. Total protection to persons and property 219,880,467 Source of funds General fund 78,248,797 Transportation fund 28,038,314 Special funds 51,738,826 Tobacco fund 619,768 Federal funds 50,101,089 Enterprise funds 3,908,080 Interdepartmental transfer 7,225,593 Total 219,880,467 Sec. 100. Human services - agency of human services - secretary's office Personal services 3,746,236 Operating expenses 1,245,070 Grants 7,633,936 Total 12,625,242 Source of funds General fund 4,507,196 Tobacco fund 1,375,845 Federal funds 5,742,201 Interdepartmental transfer 1,000,000 Total 12,625,242

JOURNAL OF THE HOUSE 267 (a) Notwithstanding any other provisions of law, workers employed by persons who receive assistance from the agency of human services to procure attendant, personal care, or respite services or who utilize a qualified intermediary service organization providing services on behalf of the state shall not be considered state employees, except for purposes of 21 V.S.A. chapter 17. (b) Notwithstanding any other provisions of law, the state may provide workers' compensation coverage to workers employed by persons who receive assistance from the agency of human services to procure attendant, personal care, or respite services, and the state shall not be considered their employer. The state may also either permit a qualified intermediary service organization to purchase group insurance policies for persons served by their organization, or deem such persons to be members of an association and eligible for self- insurance under 21 V.S.A. § 687a for purposes of providing workers' compensation. This provision is intended solely to reduce costs of providing workers' compensation and shall not be considered for any other purpose. (c) Notwithstanding 32 V.S.A. § 706, the secretary may transfer funds allocated for the “high risk pool” and costs related to juvenile justice as outlined in this section as well as the substance-abuse-related allocations in subsection (i) outlined in this section to the departments in the agency of human services designated to provide these services. (d) Of the above tobacco settlement funds, $49,000 shall be used to provide a grant to the project against violent encounters for a statewide program for substance abuse prevention and mentoring program for youth. (e) Of the above tobacco fund appropriation, $100,000 shall be used for a grant to Lamoille County people in partnership for wrap-around services for at- risk youth. (f) Of the above tobacco fund appropriation, $100,000 with any corresponding federal matching funds shall be for comprehensive treatment services and $15,000 for safe housing provisions for at-risk youth. (g) Of the above general fund appropriation, $30,000 shall be granted to Prevent Child Abuse Vermont for a comprehensive health education and violence prevention curriculum for seventh and eighth grade students. (h) Of the above general fund appropriation, $8,000 shall be granted to the Vermont council of girl scouts, of which $5,000 shall be used to support a girl scout special project to assist girls with incarcerated mothers and $3,000 shall be used to support a school vacation program. 268 SATURDAY, JUNE 4, 2005 (i) Of the above appropriation, a total of $4,004,547 consisting of $1,838,720 in general funds, $811,845 in tobacco funds, and $1,353,973 in federal funds shall be used for the comprehensive substance abuse prevention and treatment component of the drug education treatment enforcement and rehabilitation program (DETER). (1) The amount of $1,440,660, of which $619,677 is from general funds and $141,682 is tobacco funds, shall be used to support the outpatient treatment, case management, and drug court component of the program. Of the general and tobacco funds, $189,831 shall be allocated to the Rutland County drug court and shall be reserved to provide appropriate drug testing, case management, and other outpatient and inpatient treatment consistent with the design of the Rutland County drug court. These are the state funds the agency of human services shall use as match for year 2 federal funds from the 2003 Department of Justice drug court implementation grant award. (2) The amount of $439,316, of which $202,808 is from general funds and $141,120 is from tobacco funds, shall be used to fund student assistance counselors. (3) The amount of $599,067, of which $518,010 is from general funds and $45,000 is from tobacco funds, shall be used for residential treatment programs, including transitional halfway house programs, including the serenity house program. (4) The amount of $345,000, of which $95,000 is from general funds and $250,000 is from tobacco funds, shall be used for recovery centers as follows: (A) $240,000 shall be distributed to recovery centers in Springfield, St. Johnsbury, Rutland, Burlington, Bennington, and Barre in the amounts of at least $35,000, but not more than $40,000, per fiscal year to each center; (B) $25,000 to the recovery center in White River Junction; (C) $80,000 to the department of health for grants to two new recovery centers and for development of and assistance to recovery centers, and programming and evaluation of recovery centers. (5) The department of health shall be advised by an executive council of Vermont’s recovery center network on an ongoing basis to prioritize service needs, to assist with the review of recovery center funding proposals, and to provide recommendations for disbursement of funds to the recovery centers. This executive council will consist of the director of the upper valley substance abuse foundation, a representative from the department of health, the director

JOURNAL OF THE HOUSE 269 of FOR-VT, and four members elected by the recovery leadership network, which is comprised of a representative from each of the recovery centers. (6) The amount of $1,180,504, of which $403,255 is from general funds and $234,022 is from tobacco funds, shall be used for opiate treatment programs, including buprenorphine and methadone and treatment for pregnant and postpartum women. (j) Of the above tobacco fund appropriation, $200,000 along with available matching federal funds shall be available for services required for petitions filed by the agency under 33 V.S.A. § 5517(e). (k) The agency of human services shall report to the joint fiscal committee prior to January 1, 2006 on all existing information and referral lines across the agency and the lines that they propose to consolidate with the 2-1-1 program. The report shall also include an update on the status of the 2-1-1 information line. (l) The secretary of the agency shall implement master contracts with community providers as described in the agency of human services strategic plan dated February 2005, as soon as administratively feasible for the agency and the providers. (1) The secretary shall consult with all agency of human services commissioners and the commissioner of education to coordinate master contracts. (2) The secretary of human services shall ensure that the funds allocated in the department budgets for programs provided by the Lund Family Center can be transferred across programs of the Lund Family Center and may modify definitions and program criteria as necessary to allow the transfer. (m) The administration and the Vermont council of developmental and mental health services have agreed that in state fiscal years 2007 and 2008, a 7.5 percent state funding increase will be recommended for the designated agencies. The agency of human services and Vermont council of developmental and mental health services will work collaboratively with consumers, families, and advocates to make a recommendation in each fiscal year as to how this increase will be allocated. (n) Of the above general fund appropriation, $30,000 plus available matching federal funds shall be granted to Vermont legal aid for the purpose of providing cost of living increases to staff. Sec. 101. Rate setting Personal services 632,040 270 SATURDAY, JUNE 4, 2005 Operating expenses 92,395 Total 724,435 Source of funds Interdepartmental transfer 724,435 Sec. 102. Human services board Personal services 278,443 Operating expenses 40,298 Total 318,741 Source of funds General fund 129,693 Federal funds 134,679 Interdepartmental transfer 54,369 Total 318,741 Sec. 103. Developmental disabilities council Personal services 110,310 Operating expenses 27,237 Grants 350,838 Total 488,385 Source of funds Federal funds 488,385 Sec. 104. Office of Vermont health access – administration Personal services 27,263,444 Operating expenses 681,014 Total 27,944,458 Source of funds Special funds 13,585,633 Federal funds 14,358,825 Total 27,944,458 (a) The office shall transfer $100,000 of the above special fund appropriation to the department for children and families for the purpose of hiring additional quality assurance staff to review eligibility for long-term care services in the Medicaid program. (b) With the approval of the secretary of administration and the secretary of human services, the office of Vermont health access is authorized to identify and convert two (2) classified positions to two (2) exempt positions and create one (1) new exempt position. (c) Of the above special fund appropriation, $1,500,000 is to be used for increased administration expenses for actuarial needs required by the federal

JOURNAL OF THE HOUSE 271 government, increased cost associated with conversion of existing pharmacy to wrap around services of the Medicare Part D benefit and for direct support of the coverage and services management and for global clinical record systems. These funds shall be matched with federal funds. The office may add at least ten (10) new positions which shall be transferred and converted from vacant positions in the executive branch of state government. (d) If the office of Vermont health access has insufficient funds to meet the outreach efforts required by the plan developed under Sec. 316(c) of this act regarding the implementation of Medicare part D, the office may seek authorization from the emergency board to expend additional funds necessary to ensure that the outreach plan provides meaningful and sufficient information to Vermonters. Sec. 104a. Office of Vermont health access – Medicaid program Grants 589,599,773 Source of funds Special funds 243,284,425 Federal funds 346,315,348 Total 589,599,773 (a) The office of Vermont health access shall implement the following provisions relating to provider payments from the appropriations in this section. (1) The office of Vermont health access shall reduce base Medicaid spending for hospital services by $16,500,000. In fiscal year 2006, the reduction in spending may be accomplished through a reduction in hospital reimbursement, an offset with payments from the hospitals made to the office in anticipation of the final settlement of outpatient costs for prior years, or a combination of both. The offset shall be the payment amount above the anticipated settlement of $1,900,000, which the office has already included in its fiscal year 2006 outpatient projection, but the offset shall not offset spending reductions by more than $5,000,000. Payments by hospitals shall be considered provisional and shall be adjusted as necessary based on final outpatient cost settlements. In fiscal year 2006, Vermont hospitals shall be allowed to increase charges to the extent necessary to offset the reduction in reimbursement that results from this section. (2) Home health agency fees shall be reduced by $500,000. (3) Dentists’ fees shall be amended, and other strategies, including a reduction to the cap on adult services, may be employed to reduce spending by $243,309. To the extent possible, the reduction shall be targeted to health 272 SATURDAY, JUNE 4, 2005 services received by adults to minimize the impact on dental services for children. (4) The amount of $2,400,000 in reductions shall be made in reimbursement rates to providers who use Current Procedural Technology (CPT) codes, but shall be implemented to minimize the impact on primary care services. Sec. 104b. FUND APPROPRIATION AND TRANSFER (a) The sum of $78,104,989 is appropriated and transferred from the general fund to the health access trust fund in fiscal year 2006. (b) The sum of $17,250,000 is appropriated and transferred from the tobacco litigation settlement fund to the health access trust fund in fiscal year 2006.

Sec. 104c. OTHER MEDICAID APPROPRIATIONS; TRANSFER; REPORT (a) In addition to the appropriations in this act, all other appropriations of state, federal, and special fund amounts for Medicaid programs and purposes made in the fiscal year 2006 general appropriations act, or any other act appropriating funds in fiscal year 2006, shall be transferred to the health access trust fund established by section 1972 of Title 33 for use in fiscal year 2006 by the agency of human services for purposes of the trust fund. The agency shall submit reports on any transfers made in accordance with this section to the joint fiscal committee on July 1, September 1, and November 1 for committee review and consideration at its July, September, and November 2005 committee meetings. Sec. 105. Health - administration and support Personal services 5,606,480 Operating expenses 1,477,930 Total 7,084,410 Source of funds General fund 1,864,184 Special funds 1,701 Federal funds 5,214,525 Interdepartmental transfer 4,000 Total 7,084,410 Sec. 106. Health - health protection Personal services 3,561,696

JOURNAL OF THE HOUSE 273 Operating expenses 680,062 Grants 1,574,400 Total 5,816,158 Source of funds General fund 1,165,201 Special funds 942,000 Federal funds 3,321,732 Interdepartmental transfer 387,225 Total 5,816,158 Sec. 107. Health - health surveillance Personal services 7,258,188 Operating expenses 1,900,115 Grants 2,461,560 Total 11,619,863 Source of funds General fund 3,562,198 Special funds 1,254,750 Federal funds 6,672,515 Permanent trust funds 10,000 Interdepartmental transfer 120,400 Total 11,619,863 (a) The amount of $250,000 of the above general fund appropriation and at least $50,000 of the above federal fund appropriation shall be appropriated to the Vermont AIDS service organizations for client-based support services. The grants in this section shall be awarded equitably on a per-client basis and shall be used for services. No more than 15 percent may be used for the administration of such services by the Vermont AIDS service organizations. The method by which AIDS service organizations’ clients are counted shall be determined by mutual agreement of the department of health, the AIDS service organizations, and the HIV/AIDS service advisory council (HASAC). The department of health AIDS program shall be guided and advised by HASAC on an ongoing basis in prioritizing service needs in the disbursement of these funds. The department of health AIDS program shall meet at least quarterly with HASAC and shall provide HASAC with current information and data relating to service initiatives. (b) The amount of $175,000 of the above general fund appropriation shall be used for all aspects of the HIV/AIDS medication assistance program (AMAP), including costs of prescribed medications, related laboratory testing, nutritional supplements, and maximum cost-effectiveness for the program. Any remaining AMAP general funds at the end of the fiscal year shall be 274 SATURDAY, JUNE 4, 2005 equitably distributed to Vermont AIDS service organizations as provided for under subsection (a) of this section. (c) The amount of $100,000 of the above general fund appropriation shall be appropriated to the Vermont AIDS service organizations and other Vermont HIV/AIDS prevention providers for community-based HIV prevention programming which are currently not supported by federal funds due to federal restrictions. These funds shall be used for HIV/AIDS prevention purposes, including, but not limited to, improving the availability of confidential and anonymous HIV testing; prevention work with at-risk groups such as women, intravenous drug users, and people of color; anti-stigma campaigns; and promotion of needle exchange programs. No more than 10 percent of the funds may be used for the administration of such services by the recipients of these funds. The method by which these prevention funds shall be distributed shall be determined by mutual agreement of the department of health, AIDS service organizations, the HIV/AIDS Service Advisory Committee (HASAC), and the Community Planning Group (CPG). The department of health AIDS program shall be guided and advised by HASAC and CPG on an ongoing basis in prioritizing prevention service needs in the disbursement of these funds. (d) The secretary of human services shall immediately notify the joint fiscal committee if, at any time, there are insufficient funds in AMAP to assist all eligible individuals. The secretary shall work in cooperation with persons living with HIV/AIDS to develop a plan to continue access to AMAP medications until such time as the general assembly can take action. (e) The secretary of human services shall work in conjunction with the AMAP advisory committee, which shall be comprised of no less than 50 percent of members who are living with HIV/AIDS. The committee shall make recommendations regarding the program’s formulary of approved medication, related laboratory testing, nutritional supplements, and eligibility for the program. Sec. 108. Health - health improvement Personal services 8,355,130 Operating expenses 1,155,320 Grants 9,362,086 Total 18,872,536 Source of funds General fund 3,545,034 Special funds 733,502 Tobacco fund 3,481,423

JOURNAL OF THE HOUSE 275 Federal funds 11,105,577 Interdepartmental transfer 7,000 Total 18,872,536 (a) The department of health may carry forward any unspent portion of funds designated for health professional loan repayment. These funds may be used either alone or to match federal National Health Service Corps loan repayment funds, local funds, or private funds, and shall be made available to primary care providers, dentists, licensed nurses, and dental hygienists who agree to practice for a prescribed period of time in the state or at an accredited hospital within 10 miles of the Vermont border, serving a portion of the state designated as a health professional shortage population, or other rural or underserved areas. Educational scholarships, loan repayment grants, loan deferment payments, and payments of taxes due on the award may be considered for payment. (b) The above tobacco fund appropriation in this section shall be utilized according to the provisions of 18 V.S.A. chapter 225 as follows: (1) community-based programs - $1,023,624; (2) media and public education - $1,007,799; (3) tobacco cessation programs - $1,130,000; these funds may also be used to provide tobacco cessation counseling services to persons incarcerated in Vermont correctional facilities, and $80,000 shall be used to make nicotine replacement therapies available to all persons enrolled in tobacco cessation counseling; (4) surveillance and evaluation activities - $320,000. Sec. 109. 18 V.S.A. § 10 is amended to read: § 10. EDUCATIONAL ASSISTANCE; INCENTIVES; NURSES * * * (f) This section shall be repealed effective June 30, 2005. Sec. 110. Health - community public health Personal services 11,727,467 Operating expenses 1,620,114 Grants 11,782,520 Total 25,130,101 Source of funds General fund 4,138,477 Special funds 477,110 276 SATURDAY, JUNE 4, 2005 Federal funds 20,362,014 Interdepartmental transfer 152,500 Total 25,130,101 Sec. 111. Health - alcohol and drug abuse programs Personal services 2,391,227 Operating expenses 836,119 Grants 18,725,833 Total 21,953,179 Source of funds General fund 5,772,374 Special funds 157,000 Tobacco fund 3,171,266 Federal funds 12,394,539 Interdepartmental transfer 458,000 Total 21,953,179 (a) For the purpose of meeting the need for outpatient substance abuse services when the preferred provider system has a waiting list of five days or more or there is a lack of qualified clinicians to provide services in a region of the state, a state-qualified alcohol and drug abuse counselor may apply to the department of health, division of alcohol and drug abuse programs, for time- limited authorization to participate as a Medicaid provider to deliver clinical and case coordination services, as authorized. (b)(1) In accordance with federal law, the division of alcohol and drug abuse programs may use the following interim criteria to determine whether to enroll a state-supported Medicaid and uninsured population substance abuse program in the division’s network of designated providers, as described in the state plan: (A) The program has the ability to provide the quality, quantity, and levels of care required under the division’s standards, licensure standards, and accreditation standards established by the commission of accreditation of rehabilitation facilities, the joint commission on accreditation of health care organizations, or the commission on accreditation for family services. (B) Any program that is currently being funded in the existing network shall continue to be a designated program until further standards are developed, provided the standards identified in subdivision (1) of this subsection are satisfied. (C) All programs shall continue to fulfill grant or contract agreements.

JOURNAL OF THE HOUSE 277 (2) The provisions of subdivision (1) of this subsection shall not preclude the division’s “request for bids” process. (c) Of the above interdepartmental transfer, $130,000 shall be used to support the gambling addiction program, $90,000 of which will be used to support the existing program. Prior to expending the additional $40,000 of this allocation, the department shall develop a comprehensive gambling addiction services plan that identifies the need for services, states the goals to be achieved by the gambling addiction program, and outlines the use of these funds and future appropriations to achieve these goals. The plan shall be submitted to the general assembly by January 15, 2006. (d) Of the funds appropriated above and in Sec. 100 of this act, $110,000 shall be used for drug court programs in Bennington, Chittenden, and Rutland counties. The sum of $35,000 is allocated for Chittenden to be used for court coordination. The sum of $25,000 is allocated for Rutland to be used for treatment, case management, court coordination, and screening services as needed. The sum of $25,000 is allocated for Bennington for court coordination, and an additional $25,000 is allocated for Bennington to be used for case management, treatment, and screening services as needed. (e) Of the above general fund appropriation, $35,000 shall be used to increase the daily rate to $20.00 for substance abuse halfway house services, including the Grace House program. (f) The office of alcohol and drug abuse programs shall report to the general assembly by January 15, 2006 on the fiscal status of all residential substance abuse programs supported by state appropriations. This report shall include the types of services provided, the cost of providing these services, and the sources of funds available at each of the respective residential programs. Sec. 112. Health - mental health Personal services 3,404,696 Operating expenses 507,616 Grants 106,674,609 Total 110,586,921 Source of funds General fund 44,492,587 Special funds 6,945,611 Federal funds 55,125,950 Interdepartmental transfer 4,022,773 Total 110,586,921 278 SATURDAY, JUNE 4, 2005 (a) Of the above appropriation, $40,000 shall be used to maintain the Burlington downtown outreach program to develop a model program for expansion to other areas of the state. Sec. 113. Health - Vermont state hospital Personal services 16,580,497 Operating expenses 1,813,522 Grants 3,000 Total 18,397,019 Source of funds General fund 2,417,915 Special funds 110,000 Federal funds 572,426 Interdepartmental transfer 15,296,678 Total 18,397,019 Sec. 113a. 13 V.S.A. § 4815(b) is amended to read: (b) The order for examination may provide for an examination at any jail, or correctional center, or at the state hospital designated by the commissioner of health for forensic examinations pursuant to chapter 177 of Title 18, or at such other place as the court shall determine, after hearing a recommendation by the commissioner of developmental and mental health services. Sec. 113b. 13 V.S.A. § 4815(g) is amended to read: (g)(1) Examination Inpatient examination at the state hospital or a designated hospital. Before ordering the examination to take place at the state hospital, the court must determine that the state hospital is the least restrictive setting in which the examination may appropriately be conducted The court shall not order an inpatient examination unless the designated mental health professional determines that the defendant is a person in need of treatment as defined in 18 V.S.A. § 7101(17). (2) Before ordering the inpatient examination to take place at the state hospital, the court shall also determine what terms, if any, shall govern the defendant's release from custody under sections 7553-7554 of this title once the examination has been completed. (3) An order for inpatient examination at the state hospital shall provide for placement of the defendant in the custody and care of the commissioner of developmental and mental health services for not more than 30 days from the date of the order, and the defendant shall be returned to court for further appearance as soon as the examination has been completed, if ordered by the court. If a return to court is ordered, such return shall occur within 48 hours of

JOURNAL OF THE HOUSE 279 the commissioner's request. The commissioner shall have the authority to determine the most clinically appropriate designated hospital for the examination and, based on the most clinically appropriate determination, may transfer the defendant between designated hospitals at any time while the order is in effect. (4) If a return to court is not ordered and the defendant is not in the custody of the commissioner of corrections, the defendant shall be returned to the defendant's residence or such other appropriate place within the state of Vermont by the department of developmental and mental health services at the expense of the court. (5) If it appears that an inpatient examination at the state hospital cannot reasonably be completed within 30 days, the court issuing the original order, on request of the commissioner and upon good cause shown may order placement at the state hospital extended for additional periods of 15 days in order to complete the examination, and the defendant on the expiration of the period provided for in such order shall be returned in accordance with this subsection. (6) Persons committed to the state hospital care and custody of the commissioner for purposes of examination or examined elsewhere under this section shall be given medical care and treatment in accordance with accepted standards of medical care and practice, to the extent facilities and personnel are available for this purpose. Sec. 113c. SUNSET (a) The amendments in Secs. 113a and 113b shall terminate on July 1, 2006 and 13 V.S.A. § 4815(b) and (g) shall revert to the prior statutory text. Sec. 113d. STUDY COMMITTEE (a) The commissioner of health shall convene a work group to address issues relating to forensic mental health patients and defendants. The work group shall consist of the commissioner or designee, the defender general or designee, the court administrator or designee, a representative from the mental health law project of Vermont legal aid, the department of sheriffs and states attorneys, the Vermont association of hospitals and health systems, a representative of the Vermont Council on Developmental and Mental Health Services, the Vermont state employees’ association, and a designee of Vermont Psychiatric Survivors. The department of health shall provide administrative support to the work group. 280 SATURDAY, JUNE 4, 2005 (b) The work group shall report to the house committee on human services and the senate committee on health and welfare no later than January 31, 2006 and shall address the following issues: (1) transfers between hospitals, including standards, procedures, and rights of patients; (2) determination of the least restrictive setting for the forensic evaluation; (3) disposition of the defendant if it is determined after admission that the defendant does not meet the standards for hospitalization; (4) legal representation of defendants and the state in hospitalization hearings; and (5) other issues as determined by the work group. Sec. 113e. VERMONT STATE HOSPITAL; REPLACEMENT PLAN (a) The general assembly adopts the principles in the May 31, 2005 draft report from the department of health for restructuring the delivery of mental health services currently received in the Vermont state hospital, including the following: (1) The current state hospital facility should be replaced with a facility or facilities with fewer than 54 beds and with meaningful programmatic integration of medical and community mental health services. (2) As the replacement occurs, the operations and human resources in the state hospital should be supported and enhanced to ensure safety, and the clinical programming should effectively support recovery. (3) The capacity and network of community support services should be expanded to meet patient needs in a clinically appropriate manner consistent with system values. (b) When the general assembly is not in session, the department of health shall seek and receive approval from the mental health oversight committee on specific programmatic recommendations, plans, or implementation steps to achieve the principles in the May 31, 2005 draft report prior to implementation. The mental health oversight committee shall approve or deny the recommendations and steps within two weeks of submission and shall oversee the implementation of the restructuring of the delivery of mental health services currently received in the Vermont state hospital. (c) The commissioner of health shall report to the mental health oversight committee upon request in order to meet the requirements of this section.

JOURNAL OF THE HOUSE 281 Sec. 114. HUMAN SERVICES CASELOAD RESERVE TRANSFER/LOAN (a) From the human services caseload reserve, $1,300,000 shall be transferred to the general fund to offset caseload and transition expenditures for services at the Vermont state hospital. The secretary of administration and the secretary of human services shall ensure that these funds are repaid to the caseload reserve on or before July 1, 2008. Sec. 115. Health - medical practice board Personal services 669,764 Operating expenses 130,309 Total 800,073 Source of funds Special funds 800,073 Sec. 116. Department for children and families - administration & support services Personal services 26,563,475 Operating expenses 5,025,540 Grants 1,414,675 Total 33,003,690 Source of funds General fund 13,926,443 Special funds 1,401,422 Federal funds 17,675,825 Total 33,003,690 Sec. 117. Department for children and families - office of child support Personal services 8,220,005 Operating expenses 2,797,032 Total 11,017,037 Source of funds General fund 1,550,424 Special funds 638,014 Federal funds 8,721,499 Interdepartmental transfer 107,100 Total 11,017,037 (a) Medical coverage is presumed to be available to a parent at a reasonable cost only if the amount payable for individual insurance or a health benefit plan premium is five percent (5%) or less of the parent’s gross income. The court, in its discretion, retains the right to order a parent to obtain health insurance coverage even if the cost exceeds five percent (5%) of the parent’s 282 SATURDAY, JUNE 4, 2005 gross income if the cost is deemed reasonable under all the circumstances after considering the factors pursuant to 15 V.S.A. § 659. Sec. 118. Department for children and families - child development Personal services 2,412,885 Operating expenses 468,401 Grants 45,178,245 Total 48,059,531 Source of funds General fund 19,269,419 Transportation fund 60,732 Special funds 1,230,722 Federal funds 27,272,906 Interdepartmental transfer 225,752 Total 48,059,531 (a) Of the above appropriation, $50,000 shall be granted to the Vermont center for the book. (b) The department for children and families in conjunction with the department of education shall track and report quarterly expenses and receipts for the family infant toddler program. (1) The first report shall include final expenses and receipts by source for fiscal year 2005 (through June 30, 2005) which shall be broken out by quarter and include enrollment data. (2) For fiscal year 2006, the quarterly reports shall include: (A) the number of enrolled children; (B) expenses; and (C) receipts by source, including federal part C dollars, Medicaid receipts, state general funds, and any other sources of funding. (3) The department for children and families shall submit these reports to the house and senate committees on appropriations, senate committee on health and welfare, and house committee on human services or to the joint health access oversight committee when the general assembly is not in session. (c) Of the above appropriation, $290,000 shall be used to increase the subsidy rate and $30,000 shall be used for incentives to increase child care quality. Sec. 119. Department for children and families - family services Personal services 18,261,673

JOURNAL OF THE HOUSE 283 Operating expenses 2,870,402 Grants 62,032,908 Total 83,164,983 Source of funds General fund 38,442,431 Special funds 1,306,152 Tobacco fund 75,000 Federal funds 43,341,400 Total 83,164,983 (a) Of the above general fund appropriation, $70,000 shall be used for a grant to the prevent child abuse Vermont program. Sec. 120. Department for children and families - Woodside rehabilitation center Personal services 2,361,201 Operating expenses 432,306 Total 2,793,507 Source of funds General fund 2,738,615 Interdepartmental transfer 54,892 Total 2,793,507 (a) Of the above appropriation, $5,000 shall be used to maintain the arts program. (b) The director of the Woodside rehabilitation center shall work with the commissioner of finance and management and the executive director of the state’s attorneys and sheriffs to identify if utilization of the sheriff’s office for transportation services could result in saved overtime costs at the center. Sec. 121. Department for children and families - disability determination services

Personal services 3,337,193 Operating expenses 495,020 Total 3,832,213 Source of funds Federal funds 3,587,068 Interdepartmental transfer 245,145 Total 3,832,213 Sec. 122. Department for children and families - aid to aged, blind and disabled 284 SATURDAY, JUNE 4, 2005 Personal services 1,365,966 Grants 9,336,901 Total 10,702,867 Source of funds General fund 10,702,867 Sec. 123. Department for children and families - general assistance Grants 4,326,260 Source of funds General fund 3,214,939 Special funds 1 Federal funds 1,111,320 Total 4,326,260 (a) Of the above appropriation, $527,000 in federal TANF funds is allocated specifically for rental or mortgage arrearage assistance to families who demonstrate they are faced with a reasonably preventable loss of housing and who meet state requirements for category I assistance, as established by regulation. Assistance under this provision is not an entitlement and shall cease upon expenditure of these allocated funds. (b) Of the above appropriation, an amount not to exceed $150,000 ($75,000 federal TANF funds and $75,000 general funds) may be expended for temporary housing assistance to individuals and families that have reached the 28-day maximum allowed under department regulations and have a continued need for this type of emergency assistance. Assistance shall be limited to an additional 56 cumulative days beyond the current 28-day maximum. Assistance under this provision is not an entitlement and shall cease upon expenditure of these allocated funds. Sec. 124. Department for children and families - reach up Grants 43,217,279 Source of funds General fund 14,290,063 Special funds 2,200,000 Federal funds 26,727,216 Total 43,217,279 (a) If the governor’s fiscal year 2007 proposed budget includes a ratable reduction for reach up benefits that is below 50 percent, the department for children and families shall report to the house and senate committees on appropriations the cost of achieving a 50 percent ratable reduction.

JOURNAL OF THE HOUSE 285 (b) Of the above appropriation, up to $55,810 is to be used for the Lund family center’s learning edge program to serve women who are pregnant and/or reach up eligible. Sec. 125. Department for children and families - home heating fuel assistance/LIHEAP Personal services 20,000 Operating expenses 90,000 Grants 10,146,117 Total 10,256,117 Source of funds Special funds 10,256,117 (a) Of the funds appropriated for home heating fuel assistance/LIHEAP in this act, no more than $350,000 shall be expended for crisis fuel direct service/administration exclusive of statewide after-hours’ crisis coverage. Sec. 126. HOME HEATING FUEL ASSISTANCE/LIHEAP (a) All federal funds granted to the state for home heating fuel assistance under the Low Income Home Energy Assistance Program (LIHEAP) or other similar federal program in fiscal year 2006, and all unexpended LIHEAP funds granted to the state in fiscal year 2005, are hereby transferred to the home heating fuel assistance trust fund for the provision of home heating fuel assistance, including program administration, under 33 V.S.A. chapter 26. (b) For the purpose of a crisis set-aside, seasonal home heating fuel assistance through December 31, 2005, and program administration, the commissioner of finance and management shall transfer $2,550,000 from the home weatherization assistance trust fund to the home heating fuel assistance trust fund to the extent that federal LIHEAP or similar federal funds are not available. An equivalent amount shall be returned to the home weatherization trust fund from the home heating fuel assistance trust fund to the extent that federal LIHEAP or similar federal funds are received. Should a transfer of funds from the home weatherization assistance trust fund be necessary for the 2005-2006 crisis set-aside and seasonal home heating fuel assistance through December 31, 2005, and LIHEAP funds awarded as of December 31, 2005 for fiscal year 2006 do not exceed $2,550,000, subsequent payments under the home heating fuel assistance program shall not precede January 30, 2006. Notwithstanding any other provision of law, payments authorized by the office of home heating fuel assistance shall not exceed funds available, except that for fuel assistance payments made through December 31, 2005, the commissioner of finance and management may anticipate receipts into the home weatherization assistance trust fund. 286 SATURDAY, JUNE 4, 2005 Sec. 127. Department for children and families - food stamp cash out Grants 6,141,229 Source of funds Federal funds 6,141,229 Sec. 128. TANF EXEMPTION (a) The commissioner may exempt all individuals domiciled in the state of Vermont from the implementation of Sec. 115(a) of Public Law 104-193 through June 30, 2006. Sec. 129. Department for children and families - office of economic opportunity Personal services 261,733 Operating expenses 89,517 Grants 5,035,390 Total 5,386,640 Source of funds General fund 890,147 Special funds 80,012 Federal funds 4,165,408 Interdepartmental transfer 251,073 Total 5,386,640 (a) Of the above general fund appropriation, $485,000 shall be granted to community agencies for homeless assistance by preserving existing services or increasing resources available statewide. These funds may be granted alone or in conjunction with federal McKinney emergency shelter funds. Grant decisions shall be made with assistance from the coalition of homeless Vermonters. (b) Of the above general fund appropriation, $25,000 shall be granted to the Vermont campaign to end childhood hunger for food stamp outreach. Sec. 130. Department for children and families - OEO - weatherization assistance Personal services 150,478 Operating expenses 39,950 Grants 7,079,010 Total 7,269,438 Source of funds Special funds 5,991,517 Federal funds 1,277,921 Total 7,269,438

JOURNAL OF THE HOUSE 287 (a) Of the above special fund appropriation, $400,000 is for the replacement and repair of home heating equipment. Sec. 131. [Deleted] Sec. 132. Aging and independent living - administration and support Personal services 20,691,990 Operating expenses 3,450,004 Total 24,141,994 Source of funds General fund 8,005,169 Special funds 823,719 Federal funds 14,045,169 Interdepartmental transfer 1,267,937 Total 24,141,994 (a) Notwithstanding Sec. 288(a)(8) of No. 122 of the Acts of 2004, the department of aging and independent living may use $400,000 of the funds appropriated in Sec. 288(a)(8) of No. 122 of the Acts of 2004 to address fiscal year 2005 long-term care waiver funding needs. The remaining $600,000 shall be used for community-based service infrastructure needs, including up to $70,000 for data system updates needed to implement the waiver. Sec. 133. Aging and independent living - advocacy and independent living Grants 20,577,895 Source of funds General fund 9,162,065 Transportation fund 422,692 Special funds 851,981 Federal funds 10,064,157 Interdepartmental transfer 77,000 Total 20,577,895 Sec. 134. Aging and independent living - blind and visually impaired Grants 1,359,000 Source of funds General fund 564,064 Special funds 145,000 Federal funds 649,936 Total 1,359,000 Sec. 135. 21 V.S.A. § 504 is amended to read: § 504. INCOME FROM VENDING FACILITIES AND MACHINES 288 SATURDAY, JUNE 4, 2005 (a) All net income from a vending facility on state property shall accrue to the blind or visually impaired person licensed to operate that facility. (b) All net income from vending machines not placed within vending facilities on state property shall accrue to the division. (c) Income which accrues to the division under this subchapter shall be used to: (1) maintain or enhance the vending facilities program; and (2) provide benefit programs, including, but not limited to, health insurance or pension plans for licensed blind or visually impaired persons who operate vending facilities; (3) provide vocational rehabilitation services for persons who are blind or visually impaired. Sec. 136. Aging and independent living - vocational rehabilitation Grants 5,402,643 Source of funds General fund 1,599,195 Special funds 40,000 Federal funds 3,564,061 Interdepartmental transfer 199,387 Total 5,402,643 Sec. 137. Aging and independent living - TBI home- and community-based waiver Grants 2,749,010 Source of funds General fund 1,129,843 Federal funds 1,619,167 Total 2,749,010 Sec. 138. Aging and independent living - developmental services Grants 103,600,138 Source of funds General fund 41,434,699 Special funds 841,980 Federal funds 60,262,628 Interdepartmental transfer 1,060,831 Total 103,600,138

JOURNAL OF THE HOUSE 289 (a) The secretary of the agency of human services and the commissioner of the department of aging and independent living shall ensure the programs funded through this appropriation meet the following requirements: (1) A minimum of 219 individuals under emergency caseload and a minimum of 23 individuals under public safety shall be funded. (2) A minimum of 65 new “June graduates” shall be served. (3) The funding level available to the flexible family funding program shall be at least equal to the amount available to this program in fiscal year 2005, which was $1,086,890, including any federal match. If federal receipts are gained through the Global Commitment, eligibility for flexible family funding will require eligibility for Medicaid; the department may make exceptions to this on a case-by-case basis. The anticipated waiting list for developmental services will be 31 or fewer, depending on the number of graduates who exit school. (b) The commissioner of finance and management, the secretary of human services, and the commissioner of aging and independent living shall report to the joint fiscal committee at its September and November meetings as to the fiscal and program implications of meeting the requirements of subsection (a) of this section. The report shall include a review of the fiscal year 2006 inflationary increase available to the designated provider agencies for developmental services and the impact on any other division or department with the agency. (c) The department of aging and independent living shall report quarterly applications and enrollments for developmental services, tracking the fiscal implications of the requirements of subsection (a) of this section, compliance in doing so, and remaining need. In particular, these reports will include: (1) The number of new individuals entering the developmental services system in 2006, the types of services needed, and the cost per person. (2) The expected annualization in fiscal year 2007, based upon services provided to date. (3) The number of individuals on the waiting list for flexible family funding. (4) The number of individuals who have requested and meet the basic requirements to qualify for services under the “Vermont state system of care plan for developmental services,” who have been denied services due to funding constraints (June graduates and others). 290 SATURDAY, JUNE 4, 2005 (5) The department of aging and independent living shall submit these reports to the house and senate committees on appropriations, senate committee on health and welfare, and house committee on human services or to the joint health access oversight committee when the general assembly is not in session. Sec. 139. Corrections - administration Personal services 2,109,825 Operating expenses 322,087 Total 2,431,912 Source of funds General fund 2,270,042 Federal funds 65,000 Interdepartmental transfer 96,870 Total 2,431,912 (a) The department of corrections shall report to the joint corrections oversight committee at each of its meetings on the status of the health services contract. The report shall include expenditures made year-to-date and the department’s assessment of the quality of the services provided by the contractor. (b) The commissioner of the department of corrections shall research the viability of developing community mapping technologies in Vermont. The research shall include reviewing the system developed for Connecticut by the Council of State Governments. The commissioner shall report to the general assembly by January 15, 2006 on the cost, applicability to Vermont, and potential efficiency of assigning community supervision resources as well as other community-based human services resources based on a community resource mapping system. Sec. 140. Corrections - parole board Personal services 232,722 Operating expenses 65,555 Total 298,277 Source of funds General fund 298,277 Sec. 141. Corrections - correctional education Personal services 3,164,224 Operating expenses 343,662 Total 3,507,886 Source of funds

JOURNAL OF THE HOUSE 291 General fund 3,110,736 Interdepartmental transfer 397,150 Total 3,507,886 (a) The general assembly finds that the state of Vermont funding level for special education services in the department of corrections meets special education requirements. Vermont will add additional resources to corrections special education pursuant to the federal government funding special education at the level required by federal law. Sec. 142. Corrections - correctional services Personal services 68,370,252 Operating expenses 30,657,454 Grants 2,054,500 Total 101,082,206 Source of funds General fund 97,380,792 Transportation fund 1,153,658 Special funds 549,500 Tobacco fund 87,500 Federal funds 1,829,710 Interdepartmental transfer 81,046 Total 101,082,206 (a) Of the above general fund appropriation, $87,000 shall be used as a grant to Dismas House of Vermont, Inc. (b) Of the above appropriation for transitional housing, the amount of $35,000 shall be granted to Morningside House, Inc. which serves homeless citizens in southern Vermont. The funds shall support a pilot project between the department and Morningside House, Inc. jointly to develop and implement a plan to house between three and five offenders referred by the department to the shelter. (c) Of the above appropriation $20,000 shall be used for an employment placement and retention program expansion in Bennington County for individuals reentering the community under the supervision of the department. (d) The establishment of seven (7) new classified community supervision and support positions – four (4) caseworkers, two (2) community corrections officers, and one (1) administrative position – is authorized as of October 1, 2005, contingent upon the out-of-state bed census being, on average, at or below 400 during the months of May, June, and July, excluding the impact of the renovations at the St. Albans correctional facility. These positions shall be 292 SATURDAY, JUNE 4, 2005 transferred and converted from existing vacant positions in the executive branch of state government. Of the above appropriation, $318,750 shall be used to support these new positions. (e) All other funds associated with a reduction of 45 out-of-state beds from the total included in the submitted budget in this appropriation shall be used for correctional services needs as directed by the commissioner of corrections which may include hiring up to four (4) mental health counselors. Sec. 142a. INTENT FOR FUNDS FROM ADDITIONAL OUT-OF-STATE BED SAVINGS (a) To the extent the number of out-of-state beds funded in Sec. 142 of this act falls from the budgeted level of 399, the savings of allocated funds associated with the first 50 out-of-state bed reduction shall be used first to fund five (5) new community supervision positions: three (3) caseworkers and two (2) community corrections officers, and the remaining funds shall be used for corrections services. (b) For every additional increment of 50 beds that the out-of-state bed need is reduced, the savings associated with the reduction shall be used equally to fund additional community supports or supervision and other correctional services needs which may include hiring up to four (4) mental health counselors if they were not hired pursuant to Sec. 142(e) of this act. Sec. 143. DEPARTMENT OF CORRECTIONS; OVERCROWDING (a) It is the intent of the general assembly that the department of corrections should not operate any of the state correctional facilities at a level that exceeds the rated capacity of the facility. (b) The commissioner of corrections shall determine the rated capacity of each correctional facility to include only bed space designated for the general population and shall not include bed space used for segregation, isolation, or medical or mental health treatment, or high security bed space used for disciplinary or administrative purposes. (c) When the population housed in any facility exceeds the rated capacity of that facility, the commissioner of corrections may transfer appropriate offenders to another facility, including contracted facilities in another state; provided, however, that the commissioner shall strive to minimize transfers in order to avoid disruption of inmate programming. (d) It is also the intent of the general assembly that if the total population housed in Vermont exceeds the rated capacity of the Vermont facilities, this excess shall be limited to 50 beds, and that these 50 beds shall be proportionately distributed throughout the Vermont facilities.

JOURNAL OF THE HOUSE 293 (e) On a quarterly basis, the commissioner shall report to the joint legislative corrections oversight committee setting forth the number of inmates housed in each correctional facility for the previous three - month period and providing detailed information of the dates and length of time any facility exceeded 105 percent of its rated capacity. Sec. 143a. STUDY; WOMEN OFFENDERS; SUBSTANCE ABUSE (a) There is created a committee to explore recommendations relating to women offenders contained in the August 19, 2004 report of the governor’s commission on corrections overcrowding. The committee’s work shall include consideration of community-based alternatives to incarceration for women offenders and options for treating nonviolent women who are incarcerated primarily for substance-abuse-related reasons. After reviewing and evaluating successful models in other states, the committee shall develop a proposal for one or more pilot programs addressing the needs of women offenders. (b) On or before January 15, 2006, the committee shall report to the senate committee on health and welfare, the house committee on human services, and the house and senate committees on appropriations, institutions, and judiciary regarding its research and recommendations under this section, including associated costs and the anticipated nonstate sources of funding for the proposed pilot program or programs. (c) Members of the committee shall include: (1) The commissioner of corrections, or the commissioner’s designee. (2) The defender general or the defender general’s designee. (3) The adult community mental health program director, division of mental health, department of health, agency of human services, or the director’s designee. (4) The deputy commissioner for the division of alcohol and drug abuse programs, department of health, agency of human services, or the deputy commissioner’s designee. (5) The administrative judge for trial courts or the judge’s designee. (6) The coordinator of offender services for the Howard Center for Human Services at the Chittenden County drug court or the coordinator’s designee. (7) A substance abuse provider offering services to women at the Dale correctional facility, to be selected by the commissioner of corrections. 294 SATURDAY, JUNE 4, 2005 (8) The coordinator of the community justice center in Burlington or the coordinator’s designee. (9) One additional member may be selected by the committee based upon experience working with women offenders, women with substance abuse issues, or other women in crisis. One additional member who represents female former offenders, may be selected by the commissioner of corrections. Sec. 144. Corrections - correctional facilities- recreation Personal services 518,212 Operating expenses 473,986 Total 992,198 Source of funds Special funds 992,198 (a) The department shall study and implement either a prepaid phone card system for inmates’ telephone service or another system that reduces inmates’ telephone costs during fiscal year 2007. The department shall report to the general assembly on the fiscal impact of this change on the inmate recreation fund. Sec. 145. 28 V.S.A. § 816 is amended to read: § 816. INMATE RECREATION FUND The department shall accept monies generated by commissions on telephone services, commissary sales, and sales of vended items at its correctional facilities and shall establish with such monies an inmate recreation special fund. The fund shall be used to provide postage to inmates in a manner consistent with department policy. The fund may be used for costs associated with the oversight and accounting of inmate cash accounts. The fund may be used, at the discretion of the commissioner, to hire persons or purchase services, equipment, and goods to establish or enhance recreation activities for inmates confined in any of the department’s facilities, and for voluntary inmate contributions that promote the restoration of crime victims or communities. The inmates, through a process established by the inmate recreation fund committee, may also choose to create a loan fund, the operation of which shall be governed by rules adopted pursuant to chapter 25 of Title 3, from which offenders may borrow in order to help them obtain housing upon release from incarceration. Sec. 146. Corrections - Vermont offender work program Personal services 1,391,272 Operating expenses 1,731,740 Total 3,123,012

JOURNAL OF THE HOUSE 295 Source of funds Internal service funds 3,123,012 Sec. 147. Department for children and families - children’s trust fund Grant 340,891 Source of funds General fund 100,651 Special funds 70,000 Federal funds 170,240 Total 340,891 (a) Of the above amount, at least 65 percent will be awarded for community-based program activities for the broad range of child abuse and neglect prevention activities. Sec. 147a. Sec. 159 of No. 122 of the Acts of 2004 is amended to read: Sec. 159. Children’s trust fund Department for children and families - children’s trust fund Grant 310,651 Source of funds General fund 100,651 Special funds 70,000 Federal funds 140,000 Total 310,651 * * * Sec. 148. Commission on women Personal services 194,319 Operating expenses 61,102 Total 255,421 Source of funds General fund 250,421 Special funds 5,000 Total 255,421 Sec. 149. Retired senior volunteer program Grants 131,096 Source of funds General fund 131,096 Sec. 150. Vermont veterans’ home - care and support services Personal services 12,833,472 296 SATURDAY, JUNE 4, 2005 Operating expenses 3,128,718 Total 15,962,190 Source of funds General fund 912,495 Special funds 10,239,126 Federal funds 4,810,569 Total 15,962,190 (a) Notwithstanding 32 V.S.A. § 706(a)(1), the Vermont veterans’ home may transfer, with the approval of the secretary of administration, funds up to an amount equal to the general fund appropriation, to the health access trust fund for purposes of facilitating a Medicaid rate adjustment. (b) Notwithstanding 32 V.S.A. § 706(a)(1), the Vermont veterans’ home may transfer to the agency of human services’ secretary’s office, with the approval of the secretary of administration, funds to cover the costs of the contract for an interim administrator of the veterans’ home. Sec. 150a. VERMONT VETERANS’ HOME; REGIONAL BED CAPACITY (a) The agency of human services shall not include the bed count at the Vermont veterans’ home when recommending and implementing policies that are based on or intended to impact regional nursing home bed capacity in the state. Sec. 151. Total human services 1,502,442,843 Source of funds General fund 421,074,741 Transportation fund 1,637,082 Special funds 305,954,266 Tobacco fund 25,441,034 Federal funds 718,911,145 Permanent trust funds 10,000 Internal service funds 3,123,012 Interdepartmental transfer 26,291,563 Total 1,502,442,843 Sec. 152. Employment and training Personal services 18,317,440 Operating expenses 4,568,929 Grants 1,615,210 Total 24,501,579 Source of funds General fund 1,395,248

JOURNAL OF THE HOUSE 297 Special funds 866,000 Federal funds 19,472,969 Interdepartmental transfer 2,767,362 Total 24,501,579 Sec. 153. Total employment and training 24,501,579 Source of funds General fund 1,395,248 Special funds 866,000 Federal funds 19,472,969 Interdepartmental transfer 2,767,362 Total 24,501,579 Sec. 154. Education - finance and administration Personal services 4,533,633 Operating expenses 1,377,940 Grants 10,620,000 Total 16,531,573 Source of funds General fund 3,166,006 Special funds 63,697 Federal funds 1,968,752 Interdepartmental transfer 11,333,118 Total 16,531,573 (a) Notwithstanding 16 V.S.A. §§ 563(21) and 3448(a)(5)(E), of the above appropriation, up to $17,000 is available for a grant to Bradford school district to make up for delays in making a final school construction payment after completion of the final audit in fiscal year 2006. Sec. 154a. Sec. 166 of No. 122 of the Acts of 2004, as amended by Sec. 52 of No. 6 of the Acts of 2005, is further amended to read: Sec. 166. Education – finance and administration Personal services 4,029,861 4,029,861 Operating expenses 1,273,159 1,273,159 Grants 11,216,066 11,816,066 Total 16,519,086 17,119,086 Source of funds General fund 3,045,720 3,034,720 Special funds 20,088 20,088 Federal funds 2,213,164 2,213,164 Interdepartmental transfer 11,240,114 11,840,114 298 SATURDAY, JUNE 4, 2005 Total 16,519,086 17,119,086 Sec. 155. Education - education programs Personal services 12,107,019 Operating expenses 1,981,112 Grants 108,322,608 Total 122,410,739 Source of funds General fund 7,132,600 Transportation fund 524,846 Special funds 1,139,188 Federal funds 112,461,461 Interdepartmental transfer 1,152,644 Total 122,410,739 Sec. 156. Education - technical education Grants 9,836,396 Source of funds Education fund 9,836,396 (a) The appropriation in this section shall be authorized, notwithstanding 16 V.S.A § 1564. Sec. 157. Education - special education: formula grants Grants 116,120,000 Source of funds Education fund 116,120,000 (a) Of the appropriation authorized in this section, and notwithstanding any other provision of law, an amount not to exceed $3,001,131 shall be used by the department of education in fiscal year 2006 as funding for 16 V.S.A. § 2967(b)(2)-(6). In addition to funding for 16 V.S.A. § 2967(b)(2)-(6), up to $153,720 may be used by the department of education for its participation in the higher education partnership plan. Sec. 158. Education - state-placed students Grants 12,500,000 Source of funds Education fund 12,500,000 (a) The Independence Place program of the Lund family center shall be considered a 24-hour residential program for the purposes of reimbursement of education costs.

JOURNAL OF THE HOUSE 299 Sec. 159. Education - adult education and literacy Grants 3,951,017 Source of funds General fund 2,717,398 Federal funds 983,619 Education fund 250,000 Total 3,951,017 Sec. 160. HIGH SCHOOL COMPLETION; ADVISORY COMMITTEE; ADULT EDUCATION AND LITERACY; REPORT (a) A high school completion advisory committee is hereby created. The committee shall consist of a representative chosen by the speaker, a senator chosen by the committee on committees, a representative of Vermont adult learning chosen by the board of directors of Vermont Learning, Inc., a representative of the Vermont school boards association chosen by the association’s board of directors, a principal chosen by the Vermont principals’ association, a superintendent chosen by the Vermont superintendents association, and the commissioner of education or designee. The legislative council and joint fiscal office shall provide staff services to the committee. Members shall be entitled to per diem compensation and expenses. The legislative members shall be responsible for convening the committee. (b) The committee shall develop a recommended mechanism and procedure by which funding for high school completion programs carried out by the adult education and literacy systems, as described in 16 V.S.A. § 4011(f)(2), shall be paid to school districts or supervisory unions, or both. (c) The committee shall develop recommendations regarding: (1) allocation of payments between local school districts and supervisory unions and the statewide adult education and literacy system when programs are provided through contracts with qualified adult education and literacy service providers; (2) methods to ensure that programs are administered in a manner that promotes consistency with statewide standards and procedures; (3) the relationship between a high school diploma and the general equivalency degree that is provided through an adult education and literacy program; (4) mechanisms to ensure coordination between adult education and literacy programs and state requirements for individual education plans; 300 SATURDAY, JUNE 4, 2005 (5) implementation of funding through school districts and supervisory unions in a manner that maximizes the efficient use of existing services for adult education and literacy programs; (6) methods by which school districts and supervisory unions can work with statewide adult education and literacy systems to improve services for students at risk of dropping out of school; and (7) whether funding for adult education and literacy activities should be paid through the current funding mechanism established in 16 V.S.A. § 4011(f) (2) or through a categorical grant program. (d) On or before January 15, 2006, the committee shall submit its recommendations to the senate and house committees on education and appropriations. Sec. 161. EDUCATION - ADULT EDUCATION AND LITERACY (a) It is the intent of the general assembly to appropriate funds for adult education and literacy programs from the education fund, notwithstanding the provisions of 16 V.S.A. § 4025(d) as it was the intent of the general assembly to do this in Sec. 173 of No. 122 of the Acts of the 2003. Neither this appropriation nor the appropriation from Sec. 173 of No. 122 repeals the education property tax. (b) It is further the intent of the general assembly to study the results of the report received pursuant to Sec. 160 of this act and, during the 2006 legislative session, to make a determination regarding how to fund adult education and literacy services for those students described in 16 V.S.A. § 4011(f)(2) in fiscal year 2007 and each year thereafter. Sec. 162. Education - adjusted education payment Grants 966,000,000 Source of funds Education fund 966,000,000 Sec. 162a. Sec. 176 of No. 122 of the Acts of 2004, as amended by Sec. 55 of No. 6 of the Acts of 2005, is further amended to read: Sec. 176. Education – adjusted education payment Grants 910,801,994 910,971,994 Source of funds Education fund 910,801,994 910,971,994 Sec. 162b. EARLY CHILDHOOD EDUCATION SERVICES

JOURNAL OF THE HOUSE 301 (a) School districts may offer early childhood education services through direct provision of services, collaborative programs, or direct contracting with other public or private providers, or any combination of these, and a school district may obtain funding for these services by counting resident early education pupils in its full-time equivalent enrollment pursuant to Vermont State Board of Education Rule 9200.4, as in effect on June 1, 2005. School districts are encouraged to collaborate or contract with existing public and qualified private early education service providers. Sec. 163. Education - essential early education grant Grants 4,379,337 Source of funds Education fund 4,379,337 Sec. 164. Education - transportation Grants 13,496,399 Source of funds Education fund 13,496,399 Sec. 165. Education - small school grants Grants 5,250,000 Source of funds Education fund 5,250,000 Sec. 165a. Sec. 179 of No. 122 of the Acts of 2004, as amended by Sec. 56 of No. 6 of the Acts of 2005, is further amended to read: Sec. 179. Education – small school grants Grants 5,080,383 5,213,383 Source of funds Education fund 5,080,383 5,213,383 Sec. 166. Education - capital debt service aid Grants 450,355 Source of funds Education fund 450,355 Sec. 167. Education - tobacco litigation Personal services 116,151 Operating expenses 25,073 Grants 842,783 Total 984,007 Source of funds 302 SATURDAY, JUNE 4, 2005 Tobacco fund 984,007 Sec. 168. Education - Act 117 cost containment Personal services 969,605 Operating expenses 104,571 Grants 65,000 Total 1,139,176 Source of funds Interdepartmental transfer 1,139,176 (a) Notwithstanding any other provisions of law, expenditures made from this section shall be counted under 16 V.S.A. § 2967(b) as part of the state’s 60 percent of the statewide total special education expenditures of funds which are not derived from federal sources. Sec. 168a. COUNCIL ON EDUCATION GOVERNANCE; APPROPRIATION (a) In Sec. 71 of No. 68 of the Acts of 2003, the general assembly created a Council on Education Governance to develop and implement a process for engaging a broad spectrum of Vermonters in a discussion of effective governance structures for delivery of public education with consideration of the need to address rising costs while maintaining Vermont’s high quality education system. The Council obtained funding from a private foundation and, in 2004, awarded $71,000 in small grants to education communities of Vermont school districts and supervisory unions to help them engage in discussions about reorganization for better service delivery at a lower cost. In their grant applications, several communities requested a workshop on policy governance, so the Council used an additional $7,500 to run one statewide workshop for all who wished to attend. All of these communities have made progress toward productive reorganization and most need another round of small grants to continue and complete their work. (b) Therefore, notwithstanding 16 V.S.A. § 4025(b), the amount of $75,000 is appropriated from the education fund to the commissioner of education for the purpose of enabling the department of education to continue working with the Council on Education Governance to award grants to education communities, and to document the processes, successes, and lessons to be learned from the work of these communities. (c) The commissioner of education shall, at the direction of the Council on Education Governance, issue a request for proposals, choose grant recipients, determine the amounts to be awarded to each recipient, and monitor the progress of each grant recipient for fiscal year 2006. The Council shall report

JOURNAL OF THE HOUSE 303 to the general assembly each January on its progress and any recommendations for legislative change. Sec. 169. MEDICAID REIMBURSEMENT ADMINISTRATIVE SPECIAL FUND - DEPOSIT (a) In addition to deposits into the Medicaid reimbursement administrative special fund in accordance with 16 V.S.A. § 2959a(b), in fiscal year 2006, $1,139,176 of federal Medicaid receipts received for reimbursement of medically related services provided to students who are Medicaid - eligible shall be deposited into the administrative special fund. Sec. 170. FUND APPROPRIATION AND TRANSFER (a) There is appropriated the amount of $259,300,000 in fiscal year 2006 from the general fund for transfer to the education fund. Sec. 171. State teachers’ retirement system Personal services 17,061,408 Operating expenses 842,461 Grants 24,446,282 Total 42,350,151 Source of funds General fund 24,446,282 Pension trust fund 17,903,869 Total 42,350,151 (a) Notwithstanding 16 V.S.A. § 1944(g)(2), the amount of the annual contribution to the Vermont state teachers’ retirement system shall be $24,446,282 in fiscal year 2006. Sec. 172. TAX DEPARTMENT - REAPPRAISAL AND LISTING PAYMENTS (a) The amount of $3,210,000 in education funds is appropriated in fiscal year 2006 to implement the provisions of 32 V.S.A. §§ 4041a(a), relating to payments to municipalities for reappraisal costs, and 5405(f), relating to payments of $1.00 per grand list parcel. (b) The towns currently engaged in litigation with the Washington electric cooperative regarding grand list appeals of the assessment of utility property may submit to the attorney general legal expenditures made by those towns as a result of this litigation, as those values were established by reference to information from the department of taxes, division of property valuation and review. The attorney general shall review the submitted bills and, if reasonable, approve reimbursement. As the litigation may have a substantial 304 SATURDAY, JUNE 4, 2005 impact on the education grand list, $25,000 of the appropriation in this section shall be transferred to the attorney general and reserved for payment of expenses incurred by towns in defense of grand list appeals as provided herein. Expenditures for this purpose shall be considered qualified expenditures under 16 V.S.A. § 4025(c). Sec. 173. Tax department - property tax assistance Grants 118,966,276 Source of funds General fund 7,988,056 Transportation fund 2,378,220 Education fund 108,600,000 Total 118,966,276 Sec. 173a. Sec. 187 of No. 122 of the Acts of 2004, as amended by Sec. 58 of No. 6 of the Acts of 2005, is further amended to read: Sec. 187. Tax department – property tax assistance Grants 98,811,600 104,511,600 Source of funds General fund 5,280,000 8,680,000 Transportation fund 3,520,000 3,520,000 Education fund 90,011,600 92,311,600 Total 98,811,600 104,511,600 Sec. 174. Total general education and property tax assistance 1,696,950,426 Source of funds General fund 304,750,342 Transportation fund 2,903,066 Education fund 1,240,167,487 Special funds 1,202,885 Tobacco fund 984,007 Federal funds 115,413,832 Pension trust fund 17,903,869 Interdepartmental transfer 13,624,938 Total 1,696,950,426 Sec. 175. University of Vermont Grants 39,271,166 Source of funds General fund 39,271,166

JOURNAL OF THE HOUSE 305 (a) The commissioner of finance and management shall issue warrants to pay one-twelfth of the appropriation to the University of Vermont on or about the 15th of each calendar month of the year. (b) Of the above appropriation, $367,965 shall be transferred to EPSCoR for the purpose of complying with state matching fund requirements necessary for the receipt of available federal or private funds, or both. Sec. 176. University of Vermont - Morgan horse farm Grants 5,000 Source of funds General fund 5,000 Sec. 177. Vermont public television Grants 573,832 Source of funds General fund 573,832 Sec. 178. Vermont state colleges Grants 22,532,878 Source of funds General fund 22,532,878 (a) The commissioner of finance and management shall issue warrants to pay one-twelfth of the appropriation to the Vermont state colleges on or about the 15th of each calendar month of the year. (b) Of the above appropriation, $100,000 shall be reserved for use as the state’s fiscal year 2006 contribution toward the growth of the endowment fund for the Vermont state colleges. The state’s funds are to serve as a challenge match to enhance the state colleges’ ability to secure endowment contributions from alumni and other interested parties. The intent is that the fiscal year 2006 appropriation will be the last of five annual appropriations, totaling $500,000. The conditions of this challenge match are that the state colleges are required to raise three dollars for each dollar appropriated by the state. A method for accounting for the state colleges’ share has been agreed to between the state colleges and the commissioner of finance and management. Transfers to the state colleges’ endowment fund shall be under the condition that only the interest accruing to the fund will be available for purposes as designated by the board of trustees of the state colleges. By June 30, 2007, any remaining state appropriations designated for the state colleges’ endowment fund that have not been matched by the state colleges shall revert to the general fund. The funds appropriated for this purpose shall be retained by the state. 306 SATURDAY, JUNE 4, 2005 (c) Of the above appropriation, $414,950 shall be transferred to the Vermont manufacturing extension center for the purpose of complying with the state matching fund requirements necessary for the receipt of available federal or private funds, or both. (d) The balance held by the treasurer in the Vermont state college bond fund (#21010) in the principal amount of $723,850 shall be transferred to the Vermont state colleges for the purposes of a reserve for future debt service. Sec. 178a. VERMONT STATE COLLEGES; COLLECTIVE BARGAINING AGREEMENT (a) With the exception of the early retirement provisions referenced in the decision of the Vermont labor relations board, 28 VLRB 28, the last best offer of the administration of the Vermont state colleges, as recommended by the VLRB to the general assembly, is approved, pursuant to the provisions of 3 V.S.A. § 925(i), and it shall be the collective bargaining agreement between the Vermont state colleges and the Vermont state colleges faculty federation, AFT Local #3180. The early retirement provisions shall be determined in accordance with subsection (b) of this section. (b) The parties to the collective bargaining agreement are directed to re- commence negotiation of provisions regarding the early retirement program and if agreement is not reached and ratified by September 30, 2005, then the provisions shall be submitted for final and binding resolution to a neutral arbitrator selected in accordance with the procedures of and through the American Arbitration Association. Until such time as any new early retirement provisions are determined pursuant to this subsection, provisions of the current early retirement program shall continue in effect. (c) 3 V.S.A. § 925(i) is amended to read: (i) If the dispute remains unresolved 15 days after transmittal of findings and recommendations, each party shall submit as a single package its last best offer on all disputed issues to the board. Each party's last best offer shall be certified as such to the board by the fact-finding panel. The board may hold hearings as it deems appropriate. Within 30 days of the certifications it shall select between the last best offers of the parties, considered in their entirety without amendment. In the case of the state of Vermont or the Vermont state colleges the board shall recommend its choice to the general assembly as the bargaining agreement which shall become effective subject to appropriations by the general assembly. The board shall determine the cost of the package selected and request the appropriation necessary to fund the recommendation. In the case of the University of Vermont or the Vermont State Colleges, the decision of the board shall be final and binding on each party. Nothing herein

JOURNAL OF THE HOUSE 307 precludes the general assembly from enacting laws amending provisions of any collective bargaining agreement involving the state of Vermont or the Vermont state colleges arrived at under this section. (d) S ubsections (a) and (b) of this section, shall be effective on passage. Subsection (c) of this section, shall take effect July 1, 2005. The provisions of subsection (c), amending 3 V.S.A. § 925(i), shall not affect the contract negotiations referenced in subsection (a) which shall be final and binding under the procedures of subsection (b). Sec. 179. Vermont state colleges - allied health Grants 993,527 Source of funds General fund 993,527 Sec. 180. Vermont interactive television Grants 815,331 Source of funds General fund 815,331 Sec. 181. Vermont student assistance corporation Grants 17,771,050 Source of funds General fund 17,771,050 (a) Of the above appropriation, $25,000 shall be deposited into the trust fund established in 16 V.S.A. § 2845. (b) Except as provided in subsection (a) of this section, not less than 100 percent of grants shall be used for direct student aid. (c) The balance held by the treasurer in fund #21385, approximately $62,552, from the amount appropriated in No. 38 of the Acts of 1964 and from such other amounts as may have been appropriated, earned, or otherwise deposited in that account from time to time and not previously expended for student loan default guaranty purposes, is hereby transferred to the trust fund established by 16 V.S.A. § 2845 and held therein and administered by the Vermont student assistance corporation to provide grants for students with remaining financial needs and who are or have been under the custody of the commissioner of the department for children and families, all in accordance with the provisions of section 2845. Sec. 182. New England higher education compact Grants 80,000 308 SATURDAY, JUNE 4, 2005 Source of funds General fund 80,000 Sec. 183. Total higher education and other 82,042,784 Source of funds General fund 82,042,784 Sec. 184. Natural resources - agency of natural resources - administration Personal services 4,138,173 Operating expenses 1,651,001 Grants 90,180 Total 5,879,354 Source of funds General fund 4,324,943 Special funds 1,042,150 Federal funds 338,355 Interdepartmental transfer 173,906 Total 5,879,354 (a) The amount of $400,000 is appropriated from the solid waste management assistance fund to the brownfields revitalization fund in the agency of commerce and community development . These funds are hereby appropriated to match federal funds available through the Environmental Protection Agency for brownfields redevelopment purposes and for grants to specific projects subject to 10 V.S.A. § 6615a(1)(5) and (6). Sec. 184a. 10 V.S.A. § 6615a(l)(5) and (6) are amended to read: (5) Grants. Grants may be issued by the secretary of commerce and community development, with the approval of the secretary of natural resources, as follows: (A) The secretary of commerce and community development They may award an applicant a grant not to exceed $50,000.00 for the characterization and assessment of a site. (B) The secretary of commerce and community development They may award an applicant a grant not to exceed $200,000.00 for the remediation of a site. (C) The secretary of commerce and community development They may make a grant to assist an applicant in purchasing environmental insurance relating to the performance of the characterization, assessment or remediation of a brownfields site in accordance with a corrective action plan approved by the secretary of natural resources.

JOURNAL OF THE HOUSE 309 (D) The secretary of commerce and community development They may use a portion of the brownfields revitalization fund to develop a risk- sharing pool, an indemnity pool, or an insurance mechanism to provide financial assistance to applicants. (E) All reports generated with the assistance of grants awarded under the brownfields revitalization fund, including site assessments, site investigations, feasibility studies, corrective action plans, and completion reports, shall be provided to the secretary secretaries in hard copy and in electronic form. (6) Loans. (A) For the purpose of this chapter, "VEDA" means the Vermont economic development authority, which is authorized to make loans on behalf of the state under this section after the secretary of commerce and community development, in consultation with the approval of the secretary of natural resources, has first determined an applicant eligible to apply to VEDA for a loan. These loans shall be issued and administered by VEDA, pursuant to this chapter, and VEDA's enabling authority, pursuant to chapter 12 of this title. The secretary of commerce and community development, in consultation with the approval of the secretary of natural resources and in consultation with the VEDA manager, shall annually determine the amount of the brownfields revitalization fund available to VEDA for loans under this section. * * * Sec. 185. Connecticut River watershed advisory commission Grants 38,000 Source of funds General fund 22,500 Federal funds 15,500 Total 38,000 Sec. 186. Citizens’ advisory committee on Lake Champlain’s future Personal services 3,800 Operating expenses 3,700 Total 7,500 Source of funds General fund 7,500 Sec. 187. Natural resources - state land local property tax assessment Operating expenses 1,449,000 Source of funds 310 SATURDAY, JUNE 4, 2005 General fund 974,684 Transportation fund 212,816 Interdepartmental transfer 261,500 Total 1,449,000 Sec. 188. Green up Grants 17,196 Source of funds General fund 6,646 Special funds 10,550 Total 17,196 Sec. 189. Fish and wildlife - support and field services Personal services 9,566,015 Operating expenses 4,004,370 Grants 662,453 Total 14,232,838 Source of funds General fund 1,726,853 Transportation fund 367,926 Fish and wildlife fund 12,138,059 Total 14,232,838 (a) The department of fish and wildlife shall obtain approval of the general assembly prior to taking any action that would result in closure or consolidation of fish culture operations. (b) Of the above appropriation, $5,000 shall be used to provide scholarships for children wishing to attend one of the conservation camps administered by the department of fish and wildlife. No portion of any general fund appropriation, tuition payments, donations made, or interest earned on endowment funds for the camps program within the department of fish and wildlife for the purposes of supporting the conservation camps shall be reallocated or used for any other purpose. Sec. 190. Fish and wildlife - watershed improvement Grants 50,661 Source of funds Fish and wildlife fund 50,661 Sec. 191. Forests, parks and recreation - administration Personal services 849,194 Operating expenses 475,239

JOURNAL OF THE HOUSE 311 Grants 1,998,100 Total 3,322,533 Source of funds General fund 983,533 Special funds 1,046,000 Federal funds 1,293,000 Total 3,322,533 Sec. 192. DEPARTMENT OF FORESTS, PARKS AND RECREATION; EMPLOYEES’ GROUP INSURANCE; REPEAL (a) 3 V.S.A. § 631(b) (health insurance plan available to state departments on February 23, 1951) shall be repealed on July 1, 2005. Sec. 193. PARTICIPATION IN A STATE GROUP INSURANCE PLAN (a) Employees of a state department who participate in a group insurance plan under subsection 631(b) of Title 3 and who choose to continue to participate in a state group insurance plan shall choose from among those plans available to state employees no later than 30 days after the effective date of this act. The commissioner of human resources shall assist these employees in the transition to a new health plan. Sec. 194. Forests, parks and recreation - forestry Personal services 4,514,728 Operating expenses 503,152 Grants 353,000 Total 5,370,880 Source of funds General fund 3,484,380 Transportation fund 21,500 Special funds 360,000 Federal funds 1,291,000 Interdepartmental transfer 214,000 Total 5,370,880 Sec. 195. Forests, parks and recreation - state parks Personal services 4,538,235 Operating expenses 1,891,697 Grants 5,000 Total 6,434,932 Source of funds General fund 610,632 Special funds 5,824,300 312 SATURDAY, JUNE 4, 2005 Total 6,434,932 Sec. 196. Forests, parks and recreation - lands administration Personal services 521,610 Operating expenses 237,989 Total 759,599 Source of funds General fund 524,599 Special fund 195,000 Interdepartmental transfer 40,000 Total 759,599 Sec. 197. Forests, parks and recreation - youth conservation corps Personal services 387,133 Operating expenses 25,357 Grants 500,000 Total 912,490 Source of funds Special funds 567,490 Federal funds 95,000 Interdepartmental transfer 250,000 Total 912,490 Sec. 198. Forests, parks and recreation - forest highway maintenance Personal services 222,978 Operating expenses 301,000 Total 523,978 Source of funds General fund 36,920 Transportation fund 487,058 Total 523,978 Sec. 199. Environmental conservation - management and support services Personal services 2,835,084 Operating expenses 823,118 Grants 96,267 Total 3,754,469 Source of funds General fund 1,123,601 Special funds 701,255 Federal funds 1,023,119 Interdepartmental transfer 906,494

JOURNAL OF THE HOUSE 313 Total 3,754,469 (a) Of the above special fund appropriation, $75,000 shall be used to fund a brownfields project manager position. Sec. 200. Environmental conservation - air and waste management Personal services 6,944,360 Operating expenses 6,328,003 Grants 1,706,000 Total 14,978,363 Source of funds General fund 715,896 Special funds 11,147,684 Federal funds 2,944,783 Interdepartmental transfer 170,000 Total 14,978,363 Sec. 200a. FISCAL YEAR 2006; ONE-TIME WASTE MANAGEMENT GRANTS (a) The amount of $150,000 is appropriated from the solid waste management assistance fund and shall be used on a one-time basis for the purpose of providing grants to municipalities for recycling, collection, and proper management of household hazardous waste and waste mercury-added products. Sec. 201. Environmental conservation - office of water programs Personal services 12,236,776 Operating expenses 2,099,391 Grants 2,953,502 Total 17,289,669 Source of funds General fund 6,232,691 Transportation fund 185,182 Special funds 3,717,507 Federal funds 6,616,039 Interdepartmental transfer 538,250 Total 17,289,669 (a) The commissioner shall ensure that $75,000 from the river management grants program is granted to the Vermont youth conservation corps to support a comprehensive river management program. This program shall be coordinated to meet the stated objectives of the streambed restoration plan outlined in the clean and clear program. The Vermont youth conservation 314 SATURDAY, JUNE 4, 2005 corps shall submit a report to the house and senate committees on appropriations and the house and senate committees on natural resources and energy no later than January 15, 2006 on actual streambed restoration outcomes achieved by the Vermont youth conservation corps in context of the clean and clear program’s stated objectives. Sec. 202. Environmental conservation - tax-loss-Connecticut River flood control Operating expenses 40,000 Source of funds Special funds 40,000 Sec. 203. Natural resources board Personal services 2,320,080 Operating expenses 394,264 Total 2,714,344 Source of funds General fund 1,065,127 Special funds 1,649,217 Total 2,714,344 Sec. 204. Total natural resources 78,325,806 Source of funds General fund 21,840,505 Transportation fund 1,274,482 Fish and wildlife fund 12,188,720 Special funds 26,851,153 Federal funds 13,616,796 Interdepartmental transfer 2,554,150 Total 78,325,806 Sec. 205. Commerce and community development - agency of commerce and community development - administration Personal services 1,270,218 Operating expenses 441,401 Grants 236,200 Total 1,947,819 Source of funds General fund 1,947,819 (a) On January 15, 2006, the agency of commerce and community development with the assistance of the department of public service shall report to the general assembly on the status of the state in reaching its

JOURNAL OF THE HOUSE 315 telecommunications coverage goals, specifically in the areas of cellular and broadband service coverage. The report shall address the achievement to date of the telecom infrastructure and service development goals and desired improvement as stated in the Vermont telecommunications plan dated September 2004 and shall report on the agency’s actions taken and planned to help Vermont reach these goals. (b) The Vermont economic progress council shall consider the findings and recommendations of the economic development study committee in Sec. 205c of this act prior to developing the 10-year economic plan for the state. The secretary of commerce and community development shall transfer at least $30,000 of funds appropriated to the department of economic development in Sec. 212 of this act to the Vermont economic progress council for the 10-year economic plan. (c) Of the above general fund appropriation, $186,200 shall be for a grant to the Vermont sustainable jobs fund and $50,000 shall be for a grant to the Vermont council on rural development. Sec. 205a. CHIEF MARKETING OFFICER (a) The establishment of one (1) new exempt position - Chief Marketing Officer - is authorized in fiscal year 2006. This position shall be transferred and converted from existing vacant positions in the executive branch of state government and shall be established within the office of the secretary of commerce and community development, to be appointed by and report to the secretary of the agency of commerce and community development. (b) It is the responsibility of the Chief Marketing Officer (CMO) to ensure consistency and efficiency in the use of state funds for marketing and promotional activities conducted by state agencies. The duties of the CMO shall include, but not be limited to, the following: (1) Consolidate appropriate statewide marketing communications activities of the marketing and promotional (MAP) state agency partners, the department of tourism and marketing, the department of economic development, the agency of agriculture, food and markets, the division of historic preservation, the agency of transportation, the department of forests, parks and recreation, the department of fish and wildlife, and the information centers division. (2) Develop, produce, and place marketing and promotional materials for all MAP agencies. The CMO will work with the MAP agencies to develop annual marketing objectives, plans, and strategies and create objective metrics for evaluating the effectiveness of the centralized marketing approach. 316 SATURDAY, JUNE 4, 2005 (3) Marketing and promotional funds allocated with agency budgets will be retained by the state agencies; however, the expenditure of these funds must first be approved by the CMO. (4) The CMO shall consolidate state marketing and promotional activities with these existing resources in state agencies. The CMO may make recommendations for reallocation through interdepartmental transfer of these resources. Funds may be transferred with the approval of the general assembly or the joint fiscal committee if the general assembly is not in session. (5) The CMO will conduct annual research to assess state agency satisfaction with the centralized marketing department and communicate the benefits of the consolidated statewide approach to all state agencies. (6) The CMO shall report to the general assembly by January 15, 2006 on the potential for licensing a state-owned Vermont brand to state-based companies. This report shall include the statutory changes that will be needed, including the repeal of existing regulations regarding the use of the Vermont name; and the estimated time line for establishing the Vermont brand program. (7) The CMO shall work collaboratively with the higher education community in Vermont upon request by institutions of higher education. (c) The CMO and the secretary of commerce and community development shall make recommendations to redirect state resources from administration and overhead in MAP agencies to marketing and promotional activities.

Sec. 205b. RETROACTIVE APPLICATION OF DEFERRAL AND MITIGATION TO PRIOR AWARDS (a) The deferral and mitigation of disallowance and recapture provisions of section 5930h of Title 32 shall continue in effect to defer and mitigate disallowance or recapture of any economic advancement tax incentive award granted prior to July 1, 2005, with the following modifications: (1) The deferral and mitigation provisions of subsection 5930h(f) of Title 32 shall be available whether or not the curtailment of trade or business resulting in the notice of recapture or disallowance occurred prior to July 1, 2003, the effective date of No. 67 of the Acts of 2003. (2) An application to the council for a deferral relating to an award granted prior to July 1, 2005 must be made within 90 days of the effective date of this act or within 90 days of receipt of written determination of recapture or disallowance, whichever is later.

JOURNAL OF THE HOUSE 317 (3) The deferral period shall be for a nonrenewable period of 36 months, notwithstanding the 12 - month provision prescribed in subsection 5930h(f) of Title 32. (4) The minimum level of restoration of employment necessary within the recapture period shall be 75 percent of the highest annual average number of full-time employees of the applicant during any year in a period of six years after the initial authorization of an incentive by the council. (5) The deferral and mitigation provisions of subsection 5930h(f) of Title 32 shall apply to credits which have been applied against tax liabilities and to carryforward of credits granted but not yet taken. The council may in its discretion mitigate the disallowance or recapture of credits applied against tax liabilities. With respect to disallowance of carryforward of credits, the council shall determine a mitigated amount based on the cost-benefit model analysis of the taxpayer’s actual job creation and performance, and any mitigated amount shall take account of credits applied against tax liabilities. For the purposes of this section, the three - year time limit on notices of deficiency and assessment of penalty and interest under section 5882 of Title 32 shall commence upon conclusion of the 36 - month deferral period allowed by this section. Sec. 205c. ECONOMIC DEVELOPMENT STUDY COMMITTEE (a) There is created an economic development study committee to be composed of six members of the general assembly, three from the senate appointed by the senate committee on committees, one each from the committees on appropriations, finance, and economic development, housing and general affairs; and three members of the house appointed by the speaker, one each from the committees on appropriations, commerce, and ways and means; one person to be appointed by the Vermont league of cities and towns; one person to be appointed by the associated industries of Vermont; one person to be appointed by Vermont businesses for social responsibility; and one person to be appointed by the Vermont natural resources council. (b) The committee may meet following adjournment of the 2005 session of the general assembly as it deems necessary to perform its duties, and for attendance at meetings members shall be entitled to reimbursement for expenses and compensation for services as provided in 2 V.S.A. § 406. (c) The economic development study committee shall have the assistance of the joint fiscal office, the legislative council, the department of taxes, the agency of commerce and community development, and the Vermont economic progress council. With the approval of the joint fiscal committee, the 318 SATURDAY, JUNE 4, 2005 economic development study committee may retain or contract for expert consulting assistance. (d) The committee shall be guided by the general assembly’s support for a strong economic development policy for Vermont which is fiscally responsible and targeted for actual development results and shall consult specifically with representatives of the types of business which the committee determines would be most attractive to Vermont; and by the general assembly’s intent to fulfill the state’s pending obligations to businesses which have been granted economic advancement tax incentives. The committee shall: (1) Analyze whether targeted business incentive grants and nonmonetary business aid such as permit and regulatory assistance or other assistance and increased development of infrastructure would be more successful, efficient, and cost-effective than tax expenditures in encouraging desired economic activity in the state. In analyzing this approach, the committee shall consider: (A) The types of new business Vermonters would like to attract to this state and the kind of business and economic growth Vermonters would find appropriate; (B) The specific grants and nonmonetary assistance which would attract those types of business to Vermont; (C) The best strategy and long-term goals for Vermont economic development and job retention, particularly in light of both domestic and global business competition; (D) Targeting incentives to startup and small businesses and whether these kinds of incentives would advance the long-term goals determined under subdivision (C) of this subdivision (1); (E) Targeting incentives to regions of the state with high unemployment, low wages, or other indications of need for economic development and job creation and whether these kinds of incentives would advance the long-term goals determined under subdivision (C) of this subdivision (1); (F) Vermont tax policies which place Vermont businesses at a competitive disadvantage and how best to address these policies and mitigate their effects; (G) Specific needs for development or improvement of transportation and telecommunications systems;

JOURNAL OF THE HOUSE 319 (H) The types of postsecondary institution expansion or development which would attract research and technology firms; (I) The advisability of designating a single state official to advise and aid businesses in obtaining all necessary permits and other regulatory compliance. (2) Analyze the advantages and disadvantages of privatizing all or a portion of economic development functions of the state. (3) Review the advisability of current law limitations on approval for tax increment financing in downtown development projects and recommend any changes necessary to improve the approval process. (4) Review the advisability of a single, payroll - based tax credit program, and if found advisable, recommend legislation to implement such a program. In reviewing the advisability, the committee shall consider: (A) the utility of a “but for” test and whether it should be abolished; and whether an annual cap or other limitation is appropriate on the total awards to be made; and (B) whether to develop and link economic advancement tax incentives to municipal awards and incentives to municipalities and to account for these. (e) The economic development study committee shall report its findings and recommendations to the senate committees on economic development, housing and general affairs, finance, and appropriations; and the house committees on commerce, ways and means, and appropriations no later than January 15, 2006. Sec. 206. FISCAL YEAR 2006 AGENCY-WIDE GENERAL FUND REDUCTION (a) The secretary of the agency of commerce and community development shall reduce the total general fund appropriations to the agency in fiscal year 2006 by $25,000. Sec. 207. Housing and community affairs Personal services 2,472,749 Operating expenses 301,356 Grants 4,099,340 Total 6,873,445 Source of funds General fund 1,531,188 Special funds 3,663,918 320 SATURDAY, JUNE 4, 2005 Federal funds 1,639,339 Interdepartmental transfer 39,000 Total 6,873,445 (a) Of the above appropriation, no less than $60,000 in general funds shall be granted to the Champlain Valley Office of Economic Opportunity’s mobile home project for the “First Stop” program, which provides assistance to mobile home residents statewide. Sec. 208. Historic sites - operations Personal services 604,583 Operating expenses 275,769 Total 880,352 Source of funds General fund 479,352 Special funds 372,000 Interdepartmental transfer 29,000 Total 880,352 Sec. 209. Historic sites - special improvements Personal services 71,408 Operating expenses 911,408 Total 982,816 Source of funds Special funds 50,000 Federal funds 398,140 Interdepartmental transfer 534,676 Total 982,816 Sec. 210. Community development block grants Grants 8,646,118 Source of funds Federal funds 8,646,118 (a) Community development block grants will carry forward until expended. (b) Community development block grant (CDBG) funds shall be expended in accordance with and in the order of the following priorities: (1) The greatest priority for the use of CDBG funds will be the creation and retention of affordable housing and jobs. (2) The overarching priority and fundamental objective in the use of funds for all affordable housing is to achieve perpetual affordability through

JOURNAL OF THE HOUSE 321 the use of mechanisms that produce housing resources that will continue to remain affordable over time. It is the goal of the state to maintain at least 45 to 55 percent of CDBG funds for affordable housing applications. (3) Among affordable housing applications, the highest priorities are to preserve and increase the supply of affordable family housing, to reduce and strive to eliminate childhood homelessness, and to serve families and individuals at or below 30 percent of HUD Area Median Income and people with special needs as described in the Consolidated Plan. Housing for seniors should be considered when it meets clear unmet needs in the region and when it leverages rental assistance or other public subsidies for the lowest income seniors. (4) Projects which address the ongoing deterioration of the existing housing stock through acquisition, preservation, and rehabilitation of units shall comply with housing quality standards with priority given to lead hazard reduction and energy efficiency. (5) Preference shall be given to projects that maintain the historic settlement pattern of compact village and downtown centers separated by a rural working landscape. Funds generally should not be awarded to projects that promote or constitute sprawl, defined as dispersed development outside of compact urban and village centers, along highways, and in rural countryside. (c) Up to $750,000 may be set aside for brownfield sites after submission of a plan to the joint fiscal committee. Sec. 211. Downtown transportation and capital improvement fund Personal services 40,000 Grants 760,000 Total 800,000 Source of funds Special funds 800,000 Sec. 212. Economic development Personal services 1,759,654 Operating expenses 726,057 Grants 1,634,943 Total 4,120,654 Source of funds General fund 3,467,184 Special funds 455,000 Federal funds 198,470 Total 4,120,654 322 SATURDAY, JUNE 4, 2005 Sec. 213. Vermont training program Personal services 67,050 Operating expenses 26,637 Grants 1,549,013 Total 1,642,700 Source of funds General fund 1,607,700 Special funds 35,000 Total 1,642,700 Sec. 214. Tourism and marketing Personal services 1,804,143 Operating expenses 2,068,315 Grants 337,000 Total 4,209,458 Source of funds General fund 4,209,458 Sec. 215. Vermont life Personal services 719,770 Operating expenses 128,000 Total 847,770 Source of funds Enterprise funds 847,770 Sec. 216. Vermont council on the arts Grants 494,618 Source of funds General fund 494,618 Sec. 217. Vermont symphony orchestra Grants 101,960 Source of funds General fund 101,960 Sec. 218. Vermont historical society Grants 630,653 Source of funds General fund 630,653 Sec. 219. Vermont housing and conservation board Grants 26,246,036

JOURNAL OF THE HOUSE 323 Source of funds Special funds 14,088,426 Federal funds 12,157,610 Total 26,246,036 Sec. 219a. 10 V.S.A. § 321 is amended to read: § 321. GENERAL POWERS AND DUTIES *** (b) The board shall seek out and fund not-for-profit organizations and municipalities that can assist any region of the state which has high housing prices, high unemployment and low per capita incomes in obtaining grants and loans under this chapter for perpetually affordable housing. The board shall administer the “HOME” affordable housing program which was enacted under Title II of the Cranston-Gonzalez National Affordable Housing Act (Title II, P.L. 101-625, 42 U.S.C. 12701-12839). The state of Vermont, as a participating jurisdiction designated by Department of Housing and Urban Development, shall enter into a written memorandum of understanding with the board, as subrecipient, authorizing the use of HOME funds for eligible activities in accordance with applicable federal law and regulations. HOME funds shall be used to implement and effectuate the policies and purposes of this chapter related to affordable housing. The memorandum of understanding shall include performance measures and outcomes that VHCB will annually report on to the Vermont department of housing and community affairs. (c) On behalf of the state of Vermont, the board shall seek and administer federal farmland protection funds to facilitate the acquisition of interests in land to protect and preserve in perpetuity important farmland for future agricultural use. Such funds shall be used to implement and effectuate the policies and purposes of this chapter. (c) (d) The board shall inform all grant applicants and recipients of funds derived from the annual capital appropriations and state bonding act of the following: "The Vermont Housing and Conservation Trust Fund is funded by the taxpayers of the State of Vermont, at the direction of the General Assembly, through the annual Capital Appropriation and State Bonding Act." An appropriate placard shall, if feasible, be displayed at the location of the proposed grant activity. Sec. 220. Vermont humanities council Grants 160,599 Source of funds General fund 160,599 324 SATURDAY, JUNE 4, 2005 (a) Of the above appropriation, $20,000 shall be used to support the connections program. Sec. 221. Total commerce and community development 58,559,998 Source of funds General fund 14,605,531 Special funds 19,464,344 Federal funds 23,039,677 Enterprise funds 847,770 Interdepartmental transfer 602,676 Total 58,559,998 Sec. 222. TRANSPORTATION (a) Transportation fund appropriations made available for the agency of transportation in cooperation with the federal government shall be available until expended and shall not revert. (b) The commissioner of finance and management shall maintain and control transportation appropriations in separate state and federal appropriations, as needed, and may incur overdrafts in personal services and operating expenses pending distribution of payroll and employee charges to other appropriations. Sec. 223. Transportation - finance and administration Personal services 8,155,420 Operating expenses 2,063,928 Total 10,219,348 Source of funds Transportation fund 9,671,292 Federal funds 548,056 Total 10,219,348 Sec. 224. Transportation - aviation Personal services 1,199,104 Operating expenses 8,023,312 Grants 50,000 Total 9,272,416 Source of funds Transportation fund 2,222,416 Federal funds 7,050,000 Total 9,272,416

JOURNAL OF THE HOUSE 325 Sec. 225. Transportation - buildings Personal services 210,000 Operating expenses 1,087,548 Total 1,297,548 Source of funds Transportation fund 1,297,548 Sec. 226. Transportation - program development Personal services 37,671,918 Operating expenses 72,436,634 Grants 37,115,246 Total 147,223,798 Source of funds Transportation fund 28,453,772 Local match 1,898,426 Federal funds 116,871,600 Total 147,223,798 Sec. 227. [Deleted] Sec. 228. [Deleted] Sec. 229. Transportation - interstate rest areas Personal services 80,000 Operating expenses 916,100 Total 996,100 Source of funds Transportation fund 25,000 Federal funds 971,100 Total 996,100 Sec. 230. Transportation – maintenance - state system Personal services 29,352,669 Operating expenses 24,471,617 Grants 987,800 Total 54,812,086 Source of funds Transportation fund 54,104,586 Federal funds 707,500 Total 54,812,086 Sec. 231. Transportation - policy and planning Personal services 2,641,670 326 SATURDAY, JUNE 4, 2005 Operating expenses 492,908 Grants 4,140,769 Total 7,275,347 Source of funds Transportation fund 1,806,692 Federal funds 5,468,655 Total 7,275,347 Sec. 232. Transportation - rail Personal services 743,456 Operating expenses 7,103,746 Grants 2,700,000 Total 10,547,202 Source of funds Transportation fund 8,196,929 Federal funds 2,350,273 Total 10,547,202 Sec. 233. Transportation - public transit Personal services 470,313 Operating expenses 130,240 Grants 14,288,340 Total 14,888,893 Source of funds Transportation fund 5,796,599 Federal funds 9,092,294 Total 14,888,893 Sec. 234. Transportation - central garage Personal services 3,183,942 Operating expenses 9,959,952 Total 13,143,894 Source of funds Internal service funds 13,143,894 (a) Of the above appropriation, $1,400,000 is from the transportation equipment replacement account within the central garage fund in accordance with 19 V.S.A. § 13(c) for the purchase of equipment as authorized in 19 V.S.A. § 13(b). Sec. 235. Department of motor vehicles Personal services 16,324,559 Operating expenses 6,438,943

JOURNAL OF THE HOUSE 327 Grants 156,250 Total 22,919,752 Source of funds Transportation fund 22,286,370 Federal funds 633,382 Total 22,919,752 (a) Of the above transportation fund appropriation, $127,483 shall be transferred to the department of education, education programs to support the driver education program. Sec. 236. Transportation - town highway - structures Grants 3,494,500 Source of funds Transportation fund 3,494,500 Sec. 237. Transportation - town highway - emergency fund Grants 57,129 Source of funds Transportation fund 57,129 Sec. 238. Transportation - town highway - Vermont local roads Grants 783,700 Source of funds Transportation fund 333,867 Federal funds 449,833 Total 783,700 Sec. 239. Transportation - town highway - class 2 roadway Grants 4,748,750 Source of funds Transportation fund 4,748,750 Sec. 240. Transportation - town highway - bridges Personal services 3,650,000 Operating expenses 16,862,175 Grants 43,000 Total 20,555,175 Source of funds Transportation fund 3,892,314 Local match 1,563,678 Federal funds 15,099,183 Total 20,555,175 328 SATURDAY, JUNE 4, 2005 Sec. 241. Transportation - town highway - aid program Grants 24,982,744 Source of funds Transportation fund 24,982,744 (a) The above appropriation is authorized, notwithstanding 19 V.S.A. § 306(a). Sec. 242. Transportation - town highway - class 1 supplemental grants Grants 128,750 Source of funds Transportation fund 128,750 Sec. 243. Transportation - public assistance grant program Grants 200,001 Source of funds Local match 1 Federal funds 200,000 Total 200,001 Sec. 244. Transportation board Personal services 72,795 Operating expenses 10,605 Total 83,400 Source of funds Transportation fund 83,400 Sec. 244a. Bridge maintenance program Operating expenses 4,662,281 Source of funds Transportation fund 959,622 Local funds 61,361 Federal funds 3,641,298 Total 4,662,281 Sec. 244b. Discretionary spending Operating expenses 1,825,068 Source of funds Transportation fund 566,338 Federal funds 1,258,730 Total 1,825,068 Sec. 245. Total transportation 354,117,882

JOURNAL OF THE HOUSE 329 Source of funds Transportation fund 173,108,618 Local match 3,523,466 Federal funds 164,341,904 Internal service funds 13,143,894 Total 354,117,882

Sec. 246. Debt service Debt service 67,461,234 Source of funds General fund 62,968,427 Transportation fund 2,109,547 Special funds 2,383,260 Total 67,461,234 Sec. 247. Total debt service 67,461,234 Source of funds General fund 62,968,427 Transportation fund 2,109,547 Special funds 2,383,260 Total 67,461,234 Sec. 248. RELATIONSHIP TO EXISTING LAWS (a) Except as specifically provided, this act shall not be construed in any way to negate or impair the full force and effect of existing laws. Sec. 249. OFFSETTING APPROPRIATIONS (a) In the absence of specific provisions to the contrary in this act, when total appropriations are offset by estimated receipts, the state appropriations shall control, notwithstanding receipts being greater or less than anticipated. Sec. 250. FEDERAL FUNDS (a) In fiscal year 2006, the governor, with the approval of the general assembly, or the joint fiscal committee if the general assembly is not in session, may accept federal funds available to the state of Vermont including block grants in lieu of or in addition to funds herein designated as federal. The governor, with the approval of the general assembly, or the joint fiscal committee if the general assembly is not in session, may allocate all or any portion of such federal funds for any purpose consistent with the purposes for which the basic appropriations in this act have been made. 330 SATURDAY, JUNE 4, 2005 (b) If, during fiscal year 2006, federal funds available to the state of Vermont and designated as federal in this and other acts of the 2005 session of the Vermont general assembly are converted into block grants or are abolished under their current title in federal law and reestablished under a new title in federal law, the governor may continue to accept such federal funds for any purpose consistent with the purposes for which the federal funds were appropriated. The governor may spend such funds for such purposes for no more than 45 days prior to legislative or joint fiscal committee approval. Notice shall be given to the joint fiscal committee without delay if the governor is intending to use the authority granted by this section, and the joint fiscal committee shall meet in an expedited manner to review the governor’s request for approval. (c) Any agreement, waiver of the federal Medicaid law, or commitment negotiated by the state with the federal government under which funding for the Medicaid program in Vermont is to be transformed from a system of state - federal matching grants to any other system of federal participation, such as global funding commitments or block grants, is conditional upon approval by act of the general assembly, or, if the general assembly is not in session and the speaker and senate president pro-tempore determine that it will not reconvene within the next 30 day period, by a majority vote of the members of the joint fiscal committee upon recommendation of the health access oversight committee. For the purposes of this section, “Medicaid program” means any program for which Medicaid funding is currently spent or is anticipated to be spent, including Medicaid, the Vermont health access plan, VHAP pharmacy, VScript, special education services, home- and community - based services, mental health services, services provided by the state ombudsman programs, or services for the developmentally disabled. For the purposes of this section, “funding for the Medicaid program” also means federal allocations or other funding for the state children’s health insurance program (SCHIP) if such funding is to be included in or accounted for in any negotiated system of federal participation, including a determination of budget neutrality. Sec. 251. DEPARTMENTAL RECEIPTS (a) All receipts shall be credited to the general fund except as otherwise provided and except the following receipts, for which this subsection shall constitute authority to credit to special funds: Connecticut River flood control Department of public service - sale of power Department of taxes - unorganized towns and gores

JOURNAL OF THE HOUSE 331 (b) Notwithstanding any other provision of law, departmental indirect cost recoveries (32 V.S.A. § 6) receipts are authorized, subject to the approval of the secretary of administration, to be retained by the department. All recoveries not so authorized shall be covered into the general fund, or, for agency of transportation recoveries, the transportation fund. Sec. 252. NEW POSITIONS (a) Notwithstanding any other provision of law, the total number of authorized state positions, both classified and exempt, excluding temporary positions as defined in 3 V.S.A. § 311(11), shall not be increased during fiscal year 2006, except for new positions authorized by the 2005 legislative session. Limited service positions approved pursuant to 32 V.S.A. § 5 shall not be subject to this restriction. Sec. 253. APPROPRIATIONS; PROPERTY TRANSFER TAX (a) This act contains the following amounts appropriated from special funds that receive revenue from the property transfer tax. Expenditures from these appropriations shall not exceed available revenues: (1) Notwithstanding Sec. 273 of No. 122 of the Acts of the 2003 Adj. Sess (2004), the sum of $288,000 is appropriated from the property valuation and review administration special fund to the department of taxes for administration of the use tax reimbursement program. Notwithstanding 32 V.S.A. § 9610(c), amounts above $288,000 from the property transfer tax that are deposited into the property valuation and review administration special fund shall be transferred into the general fund. (2) The sum of $13,171,180 is appropriated from the Vermont housing and conservation trust fund to the Vermont housing and conservation trust board. Notwithstanding 10 V.S.A. § 312, amounts above $13,171,180 from the property transfer tax that are deposited into the Vermont housing and conservation trust fund shall be transferred into the general fund. (3) The sum of $3,939,566 is appropriated from the municipal and regional planning fund. Notwithstanding 24 V.S.A. § 4306(a), amounts above $3,939,566 from the property transfer tax that are deposited into the municipal and regional planning fund shall be transferred into the general fund. The $3,939,566 shall be allocated as follows: (A) The sum of $2,757,696 for disbursement to regional planning commissions in a manner consistent with 24 V.S.A. § 4306(b); (B) The sum of $787,913 for disbursement to municipalities in a manner consistent with 24 V.S.A. § 4306(b); 332 SATURDAY, JUNE 4, 2005 (C) The sum of $393,957 to the Vermont center for geographic information. (b) Property transfer tax revenues in fiscal year 2006 shall be distributed pursuant to 32 V.S.A §§ 435(b)(10) and 9610(c), 10 V.S.A. § 312, and 24 V.S.A. § 4306(a) and transferred into the general fund consistent with the provisions of subsection (a) of this section, except that any property transfer tax revenues above $39,801,000, not to exceed $2,500,000, shall be deposited into the Vermont housing and conservation trust fund and appropriated to the Vermont housing and conservation trust board. (c) In fiscal year 2007, the appropriations in subdivisions (a)(1)-(3) of this section shall increase by 4.5 percent. Sec. 254. TRANSPORTATION FUND TRANSFER (a) The amount of $800,000 is transferred from the transportation fund to the downtown transportation and related capital improvement fund established by 24 V.S.A. § 2796 to be used by the Vermont downtown development board for the purposes of the fund. Sec. 255. FISCAL YEAR 2005 GENERAL FUND APPROPRIATIONS AND TRANSFERS (a) In fiscal year 2005, the following amounts are appropriated or transferred from the general fund: (1) The sum of $10,000,000 is transferred from the general fund to the health access trust fund. (2) The sum of $6,220,000 is appropriated to the department of education for state aid for school construction projects pursuant to 16 V.S.A. § 3448 as set forth in Sec. 6 of H.518 of 2005 (the capital construction act of the 2005 session). For the purposes of 32 V.S.A. § 308, this appropriation shall be considered to be made in fiscal year 2006. (3) The sum of $300,000 is appropriated to the department of corrections for expenses related to the former Windsor prison site. (4) The sum of $200,000 is appropriated to the department of taxes for fiscal year 2006 PILOT payments in addition to funds appropriated in Sec. 50 of this act. (5) The sum of $80,000 is appropriated to the department for children and families for a grant to spectrum youth and family services for the downtown education program.

JOURNAL OF THE HOUSE 333 (6) The sum of $55,000 is appropriated to the secretary of state. $10,000 or so much thereof as may be necessary to assist in covering the costs of hiring a licensed land surveyor to conduct a survey of a portion of the boundary between the towns of Burke and Kirby. $45,000 or so much thereof as may be necessary, to assist in covering the costs of hiring a licensed land surveyor who shall conduct a survey of the boundary between the towns of Bakersfield and Fairfield. The general assembly intends that the boundary lines be located and established according to surveys to be conducted by a licensed land surveyor who shall be hired and directed by the secretary of state. Upon completion, the results of the surveys shall be filed with the secretary of state. (7) The sum of $1,964,000 is appropriated for the purposes of achieving health care reform as follows: (A) $725,000 to the legislature as follows: $325,000 to support the activities of the legislative commission on health care reform as established by Sec. 277c of this act; $325,000 for studies as required by Sec. 277d of this act; and $75,000 for health care reform public information and outreach activities of the legislature as described in Sec. 277e of this act. (B) $1,039,000 to the office of Vermont health access to fund the Vermont Blueprint for Health: The Chronic Care Initiative. The goals of the initiative are to: (1) implement a statewide system of care that enables Vermonters with, and at risk for, chronic disease to lead healthier lives; (2) develop a system of care that is financially sustainable; and (3) forge a public- private partnership to develop and sustain the new system of care. On or before January 1, 2006, and annually thereafter, the director of the office of Vermont health access, in consultation with the commissioner of health, shall file a report with the general assembly detailing progress made in reaching these three goals. (C) $200,000 to the department of taxes to assist with implementation expenses for the payroll tax included in H.524. In the event that H.524 is not enacted by July 15, 2005 the funds appropriated in this subdivision shall be appropriated as follows: $100,000 to the department of health for additional grants consistent with the requirements of Sec. 277f of this act, $50,000 to the department of health for additional grants for the development and implementation of 340B pharmaceutical services, and the remaining $50,000 to the legislature for related standing committee expenses. Sec. 256. 32 V.S.A. § 308c is added to read: § 308c. GENERAL FUND AND TRANSPORTATION FUND SURPLUS RESERVES 334 SATURDAY, JUNE 4, 2005 (a) There is hereby created within the general fund a general fund surplus reserve. Monies from this reserve shall not be expended except by specific appropriation of the general assembly. (b) There is hereby created within the transportation fund a transportation fund surplus reserve. Monies from this reserve shall not be expended except by specific appropriation of the general assembly. (c) The general fund surplus reserve created in subsection (a) of this section shall supersede and replace the general fund surplus reserve established in Sec. 277(5) of No. 147 of the Acts of the 1997 Adj. Sess. (1998), as amended by Sec. 88 of No. 1 of the Acts of 1999. Sec. 257. TRANSPORTATION; CONTINGENCY APPROPRIATION AUTHORITY (a) Subject to approval by a special committee consisting of the legislative joint fiscal committee and the chairs of the house and senate committees on transportation, the secretary of administration is authorized to transfer up to $5,000,000 in general funds from the general fund surplus reserve, established pursuant to 32 V.S.A. § 308c(a), to the transportation fund, and that amount of transportation funds is appropriated to the agency of transportation. The special committee approval shall be based on the following: (1) Passage of the federal “Safe, Accountable, Flexible, and Efficient Transportation Equity Act” (SAFETEA) with the result of additional federal funds available for Vermont; (2) A finding by the secretary of administration and a determination by the special committee that: (A) The general fund surplus reserve has sufficient funds; (B) Insufficient state funds have been appropriated for a match to transportation projects that could be done in state fiscal year 2006; (C) Funding additional projects prior to awaiting the budget adjustment process is in the best interests of Vermont; and (D) The general fund budget adjustment needs will be able to be addressed with remaining or other funds. Sec. 258. [Deleted] Sec. 259. [Deleted] Sec. 260. [Deleted] Sec. 261. PERSONNEL EXPENDITURES GROWTH ANALYSIS

JOURNAL OF THE HOUSE 335 (a) As part of the governor’s budget presentation, the administration shall include a comparative analysis of the growth of payroll by fund over the past three years and the growth rates of the source fund. Where payroll is growing faster than fund growth, the administration shall provide an explanation for such growth and its impact on future budgets. Sec. 262. IN-DEPTH BUDGETING PILOT PROGRAM (a) As part of the fiscal year 2007 budget development process, the commissioner of finance and management shall select up to two departments to undergo an in - depth budget review. The commissioner’s choices of agencies to be reviewed shall be submitted for comment to the joint fiscal committee at its July 2005 meeting. Said review(s) when completed shall be submitted in writing no later than January 20, 2006 to the house and senate committees on appropriations along with the governor’s budget proposal. The review shall examine all aspects of the department activities as to mission, goals, and performance measures, the various financial and budgetary systems in place, and specifically shall: (1) Review department organization and finances for the effectiveness of achieving its mission. (2) Evaluate whether there are any measures and specific measurable evidence of the value of the department’s programs and expenditures. (3) Assess the costs and benefits that would occur if a portion of the funds spent were used for other programs that could reduce demand for the department’s services. Sec. 263. FISCAL YEAR 2005 DESIGNATED BALANCE (WATERFALL) (a) At the close of fiscal year 2005, the fiscal year 2005 unreserved and undesignated general fund balance on a budgetary basis, as determined by the commissioner of finance and management on or before July 31, 2005, in order to the extent funds are available: (1) First, shall be transferred to the general fund budget stabilization reserve to the extent necessary to attain its statutory maximum; (2) Second, shall be transferred to the transportation fund budget stabilization reserve to the extent necessary to attain its statutory maximum after the application of 32 VSA § 308a; (3) Third, $1,300,000 shall be appropriated to the agency of human services for Vermont state hospital expenditures in fiscal year 2006; (4) Fourth, up to $3,415,000 shall be appropriated as necessary to the secretary of administration to ensure that said amount is available for fiscal 336 SATURDAY, JUNE 4, 2005 year 2006 general fund pay act obligations. This appropriation shall be made only to the extent necessary to make up the difference from the above amount and that amount appropriated under Sec. 264(a)(2) of this act [fiscal year 2006 contingent appropriation]. (5) Fifth, up to $17,000,000 shall be transferred as necessary to the Vermont health access trust fund to ensure that said amount is available for fiscal year 2006 general fund obligations. This transfer shall be made only to the extent necessary to make up the difference from the above amount and that amount appropriated under Sec. 264(a)(3) of this act [fiscal year 2006 contingent appropriation]. (b) To the extent additional funds are available; $21,096,000 shall be appropriated and transferred to the health access trust fund for the following: (1) First, $14,347,000 to offset postponement of the second disproportionate share payment until fiscal year 2007; and (2) Second, $6,749,000 to provide additional resources for Medicaid expenditures. (c) To the extent additional funds are available $6,824,000 shall be appropriated to the following: (1) First, $4,000,000 to the state teachers’ retirement fund. (2) Second, $2,043,000 to the department of education for state aid for school construction projects pursuant to 16 V.S.A. § 3448 as set forth in Sec. 6 of H.518 of 2005 (the capital construction act of the 2005 session). For the purposes of 32 V.S.A. § 308, this appropriation shall be considered to be made in fiscal year 2006. (3) Third, $250,000 to the department of education for adult education one - time transition costs. (4) Fourth, $531,000 to the department of education for transfer to the department of corrections as needed for special education program expenses. The department of corrections with the department of education shall develop a plan for special education within its corrections system high school program. The plan shall include spending targets and budgets, a description of how short - term and longer - term youth inmates’ needs are to be addressed, and the specific measurable outcomes on which the system will be evaluated. The departments shall submit the plan to the house and senate committees on appropriations and education on or before December 15, 2005. (d) To the extent additional funds are available, $1,325,000 shall be appropriated for the following:

JOURNAL OF THE HOUSE 337 (1) First, $250,000 to the department of health for area health education center activities. (2) Second, $300,000 to the Vermont training program. (3) Third, $75,000 to the department of economic development for grants to regional development corporations. (4) Fourth, $450,000 to the department of environmental conservation for stormwater contracts. (5) Fifth, $250,000 to the department of aging and independent living for grants to area agencies on aging. (e) To the extent additional funds are available, $1,525,000 shall be appropriated as follows for health care reform related initiatives: (1) First, $25,000 to the legislature for interim committee meetings on health care reform. (2) Second, $200,000 to the department of health for use as an additional appropriation to fund free clinics. (3) Third, $700,000 to the department of banking, insurance, securities, and health care administration to carry out the purposes of Sec. 277 of this act, adding 18 V.S.A. § 9417, of which $500,000 is for dollar-for-dollar matching funds to leverage resources necessary to fund the pilot program authorized under subsection 9417(e) of Title 18 and to contract for the development of the health information technology plan and other duties in 18 V.S.A. §9417. (4) Fourth, $200,000 to the department of health for the purpose of providing grants consistent with the provisions of Sec. 277f of this act for federally qualified health center (FQHC) look - alikes. (5) Fifth, $50,000 to the department of health, $20,000 of which shall be used for a grant to the bi-state primary care association for activities related to Vermont FQHC’s and the remainder for grants for the development and implementation of 340B pharmaceutical services. (6) Sixth, $350,000 to the department of health for a pilot program to provide training and capitated payment to primary care physicians treating Medicaid patients with substance abuse diagnoses. (f) To the extent additional funds are available, $200,000 shall be transferred to the emergency relief and assistance fund, which amount is hereby authorized for expenditure by the agency of transportation as state match to municipalities for FEMA public assistance disasters. 338 SATURDAY, JUNE 4, 2005 (g) To the extent additional funds are available, $1,930,000 is appropriated as follows: (1) $500,000 to the secretary of administration to be utilized at the secretary’s discretion for projects including: a) department of taxes to fund preliminary work in creating an automated corporate tax filing system, and b) to the agency of natural resources for a “permit on web” initiative. The legislature’s goal for this initiative is to begin the functional process of bringing transparency and efficiency to the application, processing, and review process. (2) $350,000 to the defender general for upgrading the departmental computer systems. (3) $95,000 to the joint fiscal committee, $80,000 for budget system integration to be developed with consultation of the legislative information technology staff, and $15,000 to be available for transfer to the department of taxes for tax expenditure reporting obligations. (4) $150,000 to the department of public safety for vehicle replacement. (5) $150,000 to the department of health for replacement of datamaster units in the forensic alcohol program. (6) $50,000 to the department of buildings and general services for a direct grant to the Northeast Kingdom Human Services Incorporated for building construction in St. Johnsbury. (7) $50,000 to the department for children and families for the category II rental and mortgage arrearage assistance program. (8) $25,000 to the office of military and veterans affairs for a grant for the purchase of vans for the disabled American veteran’s transportation network. (9) $25,000 to the legislature for requirements under Sec. 205c of this act. (10) $50,000 to the department of health for nursing loan repayment for nursing faculty. These funds shall be used to provide education loan forgiveness or repayment of that debt of up to $10,000.00 per year of service on the nursing faculty of Castleton State College, Norwich University, Vermont Technical College, Southern Vermont College, or the University of Vermont. Eligibility is for nurses with outstanding educational debt acquired in pursuit of an advanced nursing degree provided he or she either incurred such debt after July 1, 2005 or was first employed on the nursing faculty after July 1, 2005. Eligibility for this program shall be determined by the

JOURNAL OF THE HOUSE 339 department of health, in consultation with schools, providers and the Area Health Education Center (AHEC). The commissioner may require certification of compliance with this subsection prior to making an award. In addition, the educational debt forgiveness or repayment program shall be administered in such a way as to comply with the requirements of Section 108(f) of the Internal Revenue Code. (11) $5,000 to the Vermont veterans home for a therapeutic exercise pool study. The Vermont veterans home shall study adding a physical therapy exercise pool to the facility. The home shall study issues of space, access, and its complementary nature to other home activities. Said funds shall be used for the study, with any remainder being held for eventual purchase. (12) $50,000 to the office of economic opportunity for a grant to the community action agencies for individual development accounts (13) $10,000 to the department of public service to be used for a grant to the Vermont public power supply authority to study the viability of a farm methane renewable energy generation project in Enosburg Falls. (14) $200,000 to the department of fish and wildlife for Camp Kehoe capital needs. (15) $10,000 to the Vermont humanities council as a contribution toward the purchase of a building. (16) $25,000 to the Vermont symphony orchestra for the musical instrument purchase program for a concert grand Steinway piano. (17) $50,000 to the secretary of administration for grants to regional marketing programs. These grants shall be distributed in the same manner as other regional marketing grants made by the secretary. (18) $75,000 to the department for children and families for the building bright spaces for bright futures fund. (19) $60,000 to the legislative council for dairy policy contract consultant services. These funds are for the sole purpose of retaining a consultant and supporting activities for the promotion of dairy price enhancement through interstate action. The consultant shall be retained and associated expenditures made at the direction of the chairs of the senate and house committees on appropriations and the chairs and vice chairs of the senate and house committees on agriculture, respectively, with the approval of the president pro tempore of the senate and the speaker of the house. Additional expenditures for this purpose may be made from funds appropriated 340 SATURDAY, JUNE 4, 2005 to the general assembly with the approval of the president pro tempore of the senate and the speaker of the house. (h) For the purposes of securing a line of credit with the Vermont economic development authority, private non-profit “program for all - inclusive care for the elderly” (PACE) programs shall be considered an “eligible project” as defined under 10 V.S.A. chapter 12 § 212(6). Notwithstanding the foregoing, the extension of loans or mortgage insurance pursuant to 10 V.S.A. chapter 12 shall be upon such terms and conditions as the authority may prescribe, including those findings required under 10 V.S.A. chapter 12. VEDA shall consider such a guarantee prior to July 31, 2005. $605,000 shall be appropriated to the office of Vermont health access to provide capitalization grants for Vermont - based PACE centers if the PACE program does not qualify for such a guarantee. (i) Any remaining funds shall be held in the general fund surplus reserve for appropriation during the budget adjustment process. Sec. 264. FISCAL YEAR 2006 CONTINGENT APPROPRIATIONS AND TRANSFERS (a) In the event the official 2006 fiscal year revenue forecast for the available general fund adopted by the emergency board at its July 2005 meeting exceeds $1,015,612,000, not including the first $1,020,000 of any increase attributable to the property transfer tax revenue growth, in excess of the official forecast of January 14, 2005: (1) First, in accordance with Sec. 272 of this act, additional payments of interest received during fiscal year 2006 from the Vermont economic development authority upon the authority’s note to the state dated May 15, 2003, shall be paid into the VEDA indemnification fund created in 10 V.S.A. § 222a. (2) Second, to the extent the forecast is exceeded, up to $3,415,000 is appropriated to the secretary of administration to fund fiscal year 2006 general fund pay act obligations. (3) Third, to the extent the forecast is exceeded, up to $17,000,000 is appropriated to the health access trust fund and shall be considered a “base appropriation” to fund fiscal year 2006 Medicaid obligations. (4) Fourth, to the extent the forecast is exceeded, up to $3,400,000 is appropriated to the tax department to supplement funds in Sec. 173 tax department - property tax assistance, to meet income sensitivity needs in fiscal year 2006.

JOURNAL OF THE HOUSE 341 (b) Any remaining funds after subsection (a) above shall be reserved for appropriations during the fiscal year 2006 budget adjustment process. Sec. 264a. PAY ACT FUNDING (a) In the event that the general fund pay act amount of $3,415,000 is not fully funded in subdivisions 263(a)(3) and 264(a)(2) of this act, the emergency board at its July 2005 meeting shall use its transfer authority to ensure that sufficient funds are available to fully fund the pay act general fund appropriation. Sec. 265. FISCAL YEAR 2006 TOBACCO SETTLEMENT FUND BALANCE (a) Notwithstanding 18 V.S.A. § 9502(b), in fiscal year 2006, the balance in the tobacco litigation settlement fund shall remain in the tobacco litigation settlement fund. Sec. 266. TRANSFER OF TOBACCO TRUST FUNDS (a) Notwithstanding 18 V.S.A. § 9502(a)(3), at the close of fiscal year 2006, the secretary of administration may transfer funds from the tobacco trust fund to the tobacco litigation settlement fund established in 32 V.S.A. § 435a in an amount needed to bring the ending balance of the tobacco litigation settlement fund to $0.00 for fiscal year 2006, but the amount transferred may not exceed the amount withheld from the payment to Vermont by participating manufacturers due in April 2006 under the Master Tobacco Settlement Agreement. Upon release and deposit of the withheld funds into the tobacco litigation settlement fund, an amount equal to the amount transferred under this provision shall be returned to the tobacco trust fund. (b) This section shall not expire June 30, 2006. Sec. 267. 16 V.S.A. § 2969 is amended to read: § 2969. PAYMENTS * * * (b) Reimbursements under sections 2962 and 2963 of this title and for state-placed students under section 2950 of this title for expenditures for the final period of any fiscal year shall be paid from the available funds appropriated for that fiscal year and shall be encumbered for that purpose. (c)(b) For the purpose of meeting the needs of students with emotional behavioral problems, each fiscal year the commissioner shall use for training, program development, and building school and regional capacity, up to one percent of the state funds appropriated under this subchapter. 342 SATURDAY, JUNE 4, 2005 (d)(c) Each fiscal year the commissioner shall use for the training of teachers, administrators and other personnel in the identification and evaluation of, and provision of education services to children who require educational supports, up to 0.75 percent of the state funds appropriated under this subchapter. In order to set priorities for the use of these funds, the commissioner shall identify effective practices and areas of critical need. The commissioner may expend up to five percent of these funds for statewide training and shall distribute the remaining funds to school districts or supervisory unions. School districts and supervisory unions that apply for funds under this section must submit a plan for training which will result in lasting changes in their school systems and give assurances that at least 50 percent of the costs of training including in-kind costs will be assumed by the applicant. The commissioner shall establish written procedures and criteria for the award of such funds. In addition, the commissioner may identify schools most in need of training assistance and may pay for 100 percent of help provided to these schools. Sec. 268. 8 V.S.A. § 80 is amended to read: § 80. INSURANCE REGULATORY AND SUPERVISION FUND * * * (b) Annually, $30,000.00 shall be transferred from the fund to the fire service training council special fund established in 20 V.S.A. § 3157. (b)(c) At the end of each fiscal year, the balance in the insurance regulatory and supervision fund shall be transferred to the general fund. (c)(d) The commissioner of finance and management may anticipate receipts to the insurance regulatory and supervision fund and issue warrants based thereon. Sec. 269. 20 V.S.A. § 3157 is amended to read: § 3157. FIRE SERVICE TRAINING COUNCIL SPECIAL FUND The fire service training council special fund is established. The fund shall be administered by the commissioner of public safety from which payments may be made to support training programs and activities authorized by this chapter, maintenance and operation of any permanent training facilities operated by the council, and the administrative expenses of the council. The fund shall consist of all monies received from tuitions, contributions, capital grants, or other funds received by the council, transfers from the insurance regulatory and supervision fund under subsection 80(b) of Title 8, and assessments of insurance companies under subsection 8557(a) of Title 32, together with monies appropriated to the fund. Monies remaining in the fund

JOURNAL OF THE HOUSE 343 at the end of any fiscal year shall be carried forward and remain in the fund. Disbursement from the fund shall be made by the state treasurer on warrants drawn by the commissioner of finance and management. Sec. 270. 32 V.S.A. § 588(4)(A) is amended to read: (A) All monies to be expended from a special fund shall be appropriated annually by the general assembly, or allocated pursuant to the authority granted by the general assembly to the secretary of administration with regard to excess receipts, except when the state responsibility relative to the special fund is solely for the transference of monies between nonstate entities as determined by the commissioner. No appropriation authorization shall carry forward beyond the fiscal year for which it was granted, except for properly encumbered payments and refunds of prior year expenditures. Sec. 271. REPEAL (a) 16 V.S.A. § 2362 (commissioner of finance and management payments for medical students) is repealed. Sec. 272. Sec. 87f of No. 6 of the Acts of 2005 is amended to read: Sec. 87f. VEDA; INDEMNIFICATION FUND CAPITALIZATION (a) $100,000.00 of the payments of interest received annually during fiscal years 2005, 2006 and 2007 from the Vermont economic development authority upon the authority’s note to the state dated May 15, 2003, shall be paid into the VEDA indemnification fund created in 10 V.S.A. § 222a. (a) Capitalization of the indemnification fund created in 10 V.S.A. § 222a is from the annual interest received from the Vermont economic development authority upon the authority’s note to the state dated May 15, 2003 as follows: (1) In fiscal years 2005 and 2006, $100,000 of the payments of interest received shall be paid into the indemnification fund. (2) In fiscal year 2006, if the available general fund forecast for fiscal year 2006 adopted by the emergency board at its July 2005 meeting exceeds $1,015,612,000, additional interest payments received for fiscal year 2006 shall be paid into the indemnification fund. (3) In fiscal year 2007 and thereafter, the annual interest received shall be paid into the indemnification fund. Sec. 273. 16 V.S.A. § 2885 is amended to read: § 2885. VERMONT HIGHER EDUCATION TRUST FUND * * * 344 SATURDAY, JUNE 4, 2005 (c) In August of each fiscal year, beginning in the year 2000, the state treasurer shall withdraw and divide an amount equal to five percent of the assets equally among the University of Vermont, the Vermont state colleges, and the Vermont student assistance corporation. In this subsection, “assets” means the average of the fund’s market values at the end of each quarter for the most recent 12 quarters, or all quarters of operation, whichever is less. Therefore, up to five percent of the fund assets are hereby annually appropriated allocated pursuant to this section, provided that the amount appropriated allocated shall not exceed an amount which would bring the fund balance below the initial appropriation funding made in fiscal year 2000 plus any additional contributions to the principal. The University of Vermont and the Vermont state colleges shall use the funds to provide nonloan financial aid to Vermont students attending their institutions; the Vermont student assistance corporation shall use the funds to provide nonloan financial aid to Vermont students attending a Vermont postsecondary institution. (d) In August During the first quarter of each fiscal year, beginning in the year 2000, the commission on higher education funding may authorize the state treasurer to make an amount equal to up to two percent of the assets available to Vermont public institutions for the purpose of creating or increasing a permanent endowment. In this subsection, “assets” means the average of the fund’s market values at the end of each quarter for the most recent 12 quarters, or all quarters of operation, whichever is less. Therefore, up to two percent of the fund assets are hereby annually appropriated allocated pursuant to this section, provided that the amount appropriated allocated shall not exceed an amount which would bring the fund balance below the initial appropriation funding made in fiscal year 2000 plus any additional contributions to the principal. One-half of the amount appropriated allocated shall be available to the University of Vermont and one-half shall be available to the Vermont state colleges. The University of Vermont or Vermont state colleges may withdraw funds upon certification by the withdrawing institution to the commissioner of finance and management that it has received private donations which are double the amount it plans to withdraw. * * * Sec. 274. [Deleted] Sec. 275. [Deleted] Sec. 276. WORKING GROUP ON GROWTH CENTERS (a) A legislative working group on growth centers is established to develop proposed legislation to support mixed use development in designated growth centers through local, regional, and state planning, regulatory reforms, and

JOURNAL OF THE HOUSE 345 public investment financial incentives. The working group shall also examine public and private costs associated with development including issues related to agricultural lands mitigation under Act 250. In addition to other information, the working group shall consider the Report of the Governor's Committee on Downtowns and Growth Centers, the planning report of the Vermont Council on Rural Development, the Downtown Development Act, and the provisions of 24 V.S.A. Chapter 117. (b) The working group shall consist of ten members: five members of the senate, appointed by the committee on committees, three coming from the membership of the committee on natural resources and energy, and one each from the membership of the committee on agriculture and the committee on economic development, housing and general affairs; and five members of the house appointed by the speaker, one from the committee on natural resources and energy, one from the committee on agriculture, one from the committee on commerce, one from the committee on transportation and one from the committee on appropriations. The working group shall be entitled to meet six times during the 2005 interim. Members of the working group shall be entitled to compensation and expenses as provided in 32 V.S.A. § 1052. The legislative council and joint fiscal office shall provide professional and clerical services to the working group, and the resources of the executive branch shall be available to the working group as required. The report of the working group shall be presented to the general assembly in the form of draft legislation on or before January 15, 2006. Sec. 277. 18 V.S.A. § 9417 is added to read: § 9417. HEALTH INFORMATION TECHNOLOGY (a) The commissioner shall facilitate the development of a statewide health information technology plan that includes the implementation of an integrated electronic health information infrastructure for the sharing of electronic health information among health care facilities, health care professionals, public and private payers, and patients. The plan shall include standards and protocols designed to promote patient education, patient privacy, physician best practices, electronic connectivity to health care data, and, overall, a more efficient and less costly means of delivering quality health care in Vermont. (b) The health information technology plan shall: (1) support the effective, efficient, statewide use of electronic health information in patient care, health care policymaking, clinical research, health care financing, and continuous quality improvements; 346 SATURDAY, JUNE 4, 2005 (2) educate the general public and health care professionals about the value of an electronic health infrastructure for improving patient care; (3) promote the use of national standards for the development of an interoperable system, which shall include provisions relating to security, privacy, data content, structures and format, vocabulary, and transmission protocols; (4) propose strategic investments in equipment and other infrastructure elements that will facilitate the ongoing development of a statewide infrastructure; and (5) recommend funding mechanisms for the ongoing development and maintenance costs of a statewide health information system. (c) The commissioner shall contract with the Vermont information technology leaders (VITL), a broad-based health information technology advisory group that includes providers, payers, employers, patients, health care purchasers, information technology vendors, and other business leaders, to develop the health information technology plan, including applicable standards, protocols, and pilot programs. In carrying out their responsibilities under this section, members of VITL shall be subject to conflict of interest policies established by the commissioner in the certificate of need regulations to ensure that deliberations and decisions are fair and equitable. (d) The following persons shall be members of VITL: (1) the commissioner of information and innovation, who shall advise the group on technology best practices and the state’s information technology policies and procedures, including the need for a functionality assessment and feasibility study related to establishing an electronic health information infrastructure under this section; (2) the director of the office of Vermont health access or his or her designee; and (3) the commissioner or his or her designee. (e) On or before July 1, 2006, VITL shall initiate a pilot program involving at least two hospitals using existing sources of electronic health information to establish electronic data sharing for clinical decision support, pursuant to priorities and criteria established in conjunction with the health information technology advisory group. Objectives of the pilot program may include: (1) supporting patient care and improving quality of care; (2) enhancing productivity of health care professionals and reducing administrative costs of health care delivery and financing;

JOURNAL OF THE HOUSE 347 (3) determining whether and how best to expand the pilot program on a statewide basis; (4) implementing strategies for future developments in health care technology, policy, management, governance, and finance; and (5) ensuring patient data confidentiality at all times. (f) The standards and protocols developed by VITL shall be no less stringent than the “Standards for Privacy of Individually Identifiable Health Information” established under the Health Insurance Portability and Accountability Act of 1996 and contained in 45 C.F.R., Parts 160 and 164, and any subsequent amendments. In addition, the standards and protocols shall ensure that there are clear prohibitions against the out-of-state release of individually identifiable health information for purposes unrelated to treatment, payment, and health care operations, and that such information shall under no circumstances be used for marketing purposes. The standards and protocols shall require that access to individually identifiable health information is secure and traceable by an electronic audit trail. (g) On or before January 1, 2007, VITL shall submit to the commissioner, the commissioner of information and innovation, the director of the office of Vermont health access, and the general assembly a health information technology plan for establishing a statewide, integrated electronic health information infrastructure in Vermont, including specific steps for achieving the goals and objectives of this section. The plan shall include also recommendations for self - sustainable funding for the ongoing development, maintenance, and replacement of the health information technology system. Upon recommendation by the commissioner and approval by the general assembly, the plan shall serve as the framework within which certificate of need applications for information technology are reviewed under section 9440b of this title by the commissioner. (h) Beginning January 1, 2006, and annually thereafter, VITL shall file a report with the commissioner, the commissioner of information and innovation, the director of the office of Vermont health access, and the general assembly. The report shall include an assessment of progress in implementing the provisions of this section, recommendations for additional funding and legislation required, and an analysis of the costs, benefits, and effectiveness of the pilot program authorized under subsection (e) of this section, including, to the extent these can be measured, reductions in tests needed to determine patient medications, improved patient outcomes, or reductions in administrative or other costs achieved as a result of the pilot. In addition, VITL shall file quarterly progress reports with the health access oversight 348 SATURDAY, JUNE 4, 2005 committee and shall publish minutes of VITL meetings and any other relevant information on a public website. (i) VITL is authorized to seek matching funds to assist with carrying out the purposes of this section. In addition, it may accept any and all donations, gifts, and grants of money, equipment, supplies, materials, and services from the federal or any local government, or any agency thereof, and from any person, firm, or corporation for any of its purposes and functions under this section and may receive and use the same subject to the terms, conditions, and regulations governing such donations, gifts, and grants. (j) The commissioner, in consultation with VITL, may seek any waivers of federal law, rule, or regulation that might assist with implementation of this section. Sec. 277a. 18 V.S.A. § 9437(4) and (5) are amended and (6) is added to read: (4) in the case of a proposal for the addition of beds for the provision of skilled nursing or intermediate care, the number of beds to be approved is not inconsistent with the considerations identified under subsection 9439(e) of this title; and (5) The the proposed new health care project is consistent with the certificate of need guidelines published by the department in accordance with its rules, and is within the portion of the unified health care budget applicable to the proposed health care facility; and (6) if the application is for the purchase or lease of new health care information technology, it conforms with the health information technology plan established under section 9417 of this title, upon approval of the plan by the general assembly. Sec. 277b. 18 V.S.A. § 9440b is added to read: § 9440b. INFORMATION TECHNOLOGY; REVIEW PROCEDURES Notwithstanding the procedures in section 9440 of this title, upon approval by the general assembly of the health information technology plan developed under section 9417 of this title, the commissioner shall establish by rule standards and expedited procedures for reviewing applications for the purchase or lease of health care information technology that otherwise would be subject to review under this subchapter. Such applications may not be granted or approved unless they are consistent with the health information technology plan and the health resource allocation plan. The commissioner’s rules may include a provision requiring that applications be reviewed by the health information advisory group authorized under subsection 9417(c) of this title.

JOURNAL OF THE HOUSE 349 The advisory group shall make written findings and a recommendation to the commissioner in favor of or against each application. Sec. 277c. COMMISSION ON HEALTH CARE REFORM (a) There is established a commission on health care reform. The commission, under the direction of co-chairs who shall be appointed by the speaker of the house and president pro tempore of the senate, shall monitor health care reform and recommend to the general assembly actions needed to attain the health care guidelines and goals set out in H.524 as passed by the house and senate. (b) Members of the commission shall include four representatives appointed by the speaker of the house, four senators appointed by the committee on committees, and two nonvoting members appointed by the governor. (c) Beginning in the interim of the 2005 legislative session through July 1, 2009, the commission shall: (1) identify and report emerging trends and behaviors among various participants in the health care system; (2) assess the effectiveness of cost-containment and quality of care initiatives; (3) establish recommendations to the general assembly for demonstration or pilot projects designed to contain health care costs, improve the quality of health care, and to integrate systems of care that promote: community-based evaluation and planning, improved financial management, information technology systems that advance the management and coordination of health care, governance models at the community level, and patient responsibility for and participation in health care decision making; (4) direct the studies established under Sec. 277d of this act; (5) develop a plan for creating an integrated, regional delivery system and developing integrated systems of care that: (1) reorganize the health care delivery system to improve coordination, reduce medical errors, and reduce redundant or unnecessary care, (2) improve the quality of care in terms of process and outcomes, and (3) encourage alternative reimbursement mechanisms based on outcome-based payments to change the incentives for health care professionals and to control health care costs; (6) make recommendations to the general assembly for a program to provide matching grants for long-term investments in health care systems, 350 SATURDAY, JUNE 4, 2005 technology, and infrastructure in a manner that promotes the establishment of integrated systems of care; (7) assess the feasibility of: (A) a publicly financed stop-loss insurance policy for all health plans doing business in Vermont; (B) a public health care program that incorporates the health benefits covered under workers’ compensation policies; (C) tort reform consistent with the findings and recommendations of the medical malpractice study authorized under Sec. 292 of No. 122 of the Acts of the 2003 Adj. Sess (2004); and (D) a health care purchasing pool as described in Sec. 26 of H.524 as passed by the house and senate; (8) recommend alternative reimbursement mechanisms for health services that encourage cost effectiveness, improve the quality of care, increase efficiency, reward primary care practices that prevent chronic illnesses, avoid preventable hospitalizations, and reduce long-term costs to the system, including a global hospital payment to each hospital. For the purposes of this section, “global hospital payment” means an amount to be paid to a hospital by each health insurer, employer or the state for services received at that hospital by all individuals covered by a health benefit plan offered by or through that insurer, employer or the state. A global hospital payment may be accomplished through negotiations between insurers or employers and hospitals , by requiring all public and private health insurers to pay for hospital services using this method to the extent permitted under federal law, or by another mechanism ; (9) receive input and make recommendations, generally, to the house committees on health care and ways and means, the senate committees on health and welfare and finance and the general assembly regarding the long- term development of policies and programs designed to ensure that, by 2009, Vermont has an integrated system of care that provides all Vermonters access to affordable, high quality health care that is financed in a fair and equitable manner; and (10) cooperate and coordinate with the public engagement process established in Sec. 277e of this act to receive public input on a health care reform plan. (d) The commission shall select, subject to final approval by the speaker of the house and the president pro tempore of the senate, the services of one full- time director and such other staff as is needed, and shall receive administrative,

JOURNAL OF THE HOUSE 351 fiscal, and legal support from the joint fiscal office and the legislative council. The director shall have expertise in finance, planning, systems analysis, and processes involving weighing competing interests among parties. In addition, with the approval of the speaker of the house and the president pro tempore of the senate, the commission may retain the services of one or more consultants or experts knowledgeable in health care systems, financing, or delivery to assist in its work and may request funding from the legislative budget. (e) The commission may request analysis from the office of Vermont health access, the department of banking, insurance, securities, and health care administration, and other appropriate agencies. The agencies shall report to the commission at such times and with such information as the commission determines is necessary to fulfill its oversight responsibilities. (f) The commission may meet as needed and members shall be entitled to compensation and expenses as provided in 2 V.S.A. § 406. (g) The department of buildings and general services shall provide the commission with office space near the state capitol building in Montpelier for three individuals. (h) To staff this commission, the legislature is authorized to establish three (3) new exempt positions – one (1) commission director and two (2) commission research/support staff in fiscal year 2005. Sec. 277d. HEALTH CARE REFORM; ECONOMIC, FINANCING, AND ADMINISTRATIVE STUDIES (a) In order to assess more fully the benefits and costs and to prepare and plan for the implementation of full and universal access to health care in Vermont, the commission on health care reform, in consultation with the department of banking, insurance, securities, and health care administration, shall direct that the following economic impact, financing, and governance studies be undertaken during the interim of the 2005 legislative session. The commission shall direct its staff or contract for one or more consultants to undertake the economic impact and financing studies authorized by this section. (1) Economic impact study. The economic impact study shall examine the impact of implementing a system of universal access to health care for Vermonters versus the effects of sustaining the current system impact on business and the labor force, the future growth of the economy and the economic competitiveness of Vermont, and the effects on residents and population groups and on current and potential insurers and providers of health care. 352 SATURDAY, JUNE 4, 2005 (2) Financing options. The financing study shall examine the financing options that most effectively achieve the goal of universal access to health care and maintaining its affordability. The study shall include examination of all financing options and their implications, including the income tax, a payroll tax, premiums or cost-sharing measures, consumption taxes, specific more limited taxes to support parts of the health care system’s financial needs, and other revenue sources including insurance risk pools and insurance assistance and incentives. (A) The study shall reference the fact and supporting empirical evidence that many countries have achieved universal access and more affordable health care utilizing public financing as a tool to achieve this goal. The study shall consider the strengths and weaknesses of such public financing systems with respect to fairness and adequacy of funding, access to and quality of services. (B) The study shall examine how implementation of any public financing options will be offset in corresponding reductions in premiums, other taxes, and individual cost-sharing contributions. (C) The study shall examine how any proposed changes in financing or delivery of health care could affect benefits Vermonters currently receive through Vermont employers. (D) The study shall address issues involved with federal law and taxation, including ERISA and other areas of preemption; technical proposals to exempt non-resident employees of Vermont businesses; a provision to ensure a soft landing for affected businesses and a recommendation as to the appropriate amount needed in a soft landing provision to mitigate negative effects on business; recommendations on the best method for unemployed individuals to contribute to the financing; a simplified structure based on employee numbers, employer payroll, or a combination for ease of administration and clarity; and the recommendations of the tax department. (E) The study shall analyze methods for recapturing insurance premiums as a result of any reductions in uncompensated care, such as the Dirigo model enacted in the state of Maine, any reductions in insurance premiums resulting from public financing, and for ensuring that all Vermonters contribute to the financing of health care’s fixed costs. (3) Governance and administrative study. The secretary of administration, in consultation with the office of Vermont health access, the department of banking, insurance, securities, and health care administration, and the agency of human services, shall examine and develop a plan for reorganizing their respective offices and functions to further full and universal

JOURNAL OF THE HOUSE 353 access to health care in Vermont and the integration of the health care system. The recommendations shall include personnel, operations, and budgetary requirements and consider the most appropriate and efficient approach to integrating health care policy, planning, delivery, regulation, and defining clear lines of accountability within the health care system. The study shall include also an examination of means to coordinate or integrate a universal health care system with the current workers’ compensation system and the feasibility and merits of authorizing the state to act as an insurer in pooling risk and providing benefits, including a common benefits plan, to participants of the health care purchasing pool. (b) Reports, including findings and recommendations, from each study required by this section shall be submitted to the general assembly not later than January 15, 2006. Sec. 277e. PUBLIC ENGAGEMENT PROCESS (a) In recognition of the importance of public engagement, the house committee on health care and the senate committee on health and welfare shall have six public hearings during the interim of the 2005 legislative session to solicit input from citizens, employers, hospitals, health care professionals, insurers, other stakeholders, and interested parties about health care reform. (b) Throughout the interim, the commission on health care reform at the request of the chairs of the committees shall brief the committees on the commission’s activities and recommendations to date. (c) For attendance at meetings, committee members shall be entitled to compensation and expenses as provided in 2 V.S.A. § 406. Sec. 277f. FEDERALLY QUALIFIED HEALTH CENTERS (FQHC) LOOK-ALIKES; CAPITALIZATION GRANTS; CASE MANAGEMENT (a) Funds appropriated in Sec. 263(e)(4) of this act to the department of health shall be expended for the purpose of providing to federally qualified health center (FQHC) look-alikes funds for initial capitalization and to establish an income - sensitized sliding scale fee schedule for patients of these organizations. In distributing the grants, the department shall consider ensuring the geographic distribution of health centers around the state as well as criteria under federal law. Initial priority shall be given to health centers in Lamoille, Washington, and Windsor/Windham counties, and other counties that demonstrate readiness to achieve look-alike status. The goal shall be to ensure there are FQHC look-alikes in each county in Vermont. Sec. 278. PUBLICLY OPERATED MANAGED CARE ORGANIZATION 354 SATURDAY, JUNE 4, 2005 (a) To enable the state to manage public resources effectively, while preserving and enhancing access to health care services in the state, the office of Vermont health access is authorized to serve as a publicly operated managed care organization (MCO). (b) As the publicly operated MCO, the office of Vermont health access shall be responsible for the overall management of the health care delivery system and for reimbursement of all eligible services as may be provided by state or federal law. (c) The office of Vermont health access shall be exempt from any health maintenance organization (HMO) or MCO statutes in Vermont law and shall not be considered to be an HMO or MCO for purposes of state regulatory and reporting requirements. (d) Upon approval of the global commitment by the federal Centers for Medicare and Medicaid Services and by the Vermont general assembly, the office of Vermont health access shall report to the health access oversight committee and the joint fiscal committee in a manner and at a frequency to be determined by the committees. Reporting shall, at a minimum, enable the tracking of expenditures by eligibility category, the type of care received, and to the extent possible allow historical comparison with expenditures under the previous Medicaid appropriation model (by department and program) and, if appropriate, to the amounts transferred by the department to the office of Vermont health access. Reporting shall include spending in comparison to any applicable budget neutrality standards. (e) In the event the Global Commitment to Health section 1115a Demonstration Waiver is approved by the federal government and requires the creation of a new department, the governor shall create a new department, the department of health access (TDHA), an independent department within Vermont state government. The office of Vermont health access with its current duties will be subsumed by the department of health access. Sec. 279. VHAP PREMIUM ADJUSTMENTS Sec. 147(d) of No. 66 of the Acts of 2003, as amended by Sec. 129 of No. 122 of the Acts of the 2003 Adj. Sess. (2004), is further amended to read: (d) VHAP, premium-based. * * * (2) The department agency shall establish per individual premiums for the VHAP Uninsured program for the following brackets of income for the VHAP group as a percentage of federal poverty level (FPL):

JOURNAL OF THE HOUSE 355 (A) Income greater than 50 percent and less than or equal to 75 percent of FPL: $10.00 $11.00 per month. (B) Income greater than 75 percent and less than or equal to 100 percent of FPL: $35.00 $39.00 per month. (C) Income greater than 100 percent and less than or equal to 150 percent of FPL: $45.00 $50.00 per month. (D) Income greater than 150 percent and less than or equal to 185 percent of FPL: $65.00 $75.00 per month. Sec. 280. DR. DYNASAUR AND SCHIP PREMIUM ADJUSTMENTS Sec. 147(f) of No. 66 of the Acts of 2003 is amended to read: (f) Dr. Dynasaur and SCHIP premium changes. (1) The department agency is authorized to amend the rules for individuals eligible for Dr. Dynasaur under the federal Medicaid and SCHIP programs to require beneficiary households to pay a monthly premium based on the following: (A) for individuals living in households whose incomes are greater than 225 percent of FPL and less than or equal to 300 percent of FPL, and who have no other insurance coverage: $70.00 $80.00 per household per month. (B) for individuals living in households whose incomes are greater than 225 percent of FPL and less than or equal to 300 percent of FPL, and who have other insurance coverage: $35.00 $40.00 per household per month. (C) for individuals living in households whose incomes are greater than 185 percent of FPL and less than or equal to 225 percent of FPL: $25.00 $30.00 per household per month. * * * Sec. 281. REPORTS ON DISENROLLMENT (a) The department for children and families and the office of Vermont health access shall monitor and evaluate and report quarterly beginning July 1, 2005 on the following: (1) The disenrollment in each of the programs subject to premiums; (2) The number of beneficiaries receiving termination notices for failure to pay premiums; (3) The number of beneficiaries terminated from coverage as a result of failure to pay premiums as of the second business day of the month following 356 SATURDAY, JUNE 4, 2005 the termination notice. The number of beneficiaries terminated from coverage for nonpayment of premiums shall be reported by program and income level within each program; and (4) The number of beneficiaries terminated from coverage as a result of failure to pay premiums whose coverage is not restored three months after the termination notice. (b) The department and the office shall submit reports required by subsection (a) of this section to the house and senate committees on appropriations, the senate committee on health and welfare, the house committee on human services, the health access oversight committee, and the Medicaid advisory board at the end of each quarter. Sec. 282. 33 V.S.A. § 1950(a) and (b) are amended to read: (a) The purpose of this subchapter is to establish a revolving fund consisting of assessments from on health care providers, which funds shall be used in the state’s health care program in such a way as to be eligible for federal financial participation. (b) The secretary and the commissioner director shall interpret and administer the provisions of this subchapter so as to maximize federal financial participation and avoid disallowances of federal financial participation. Sec. 283. 33 V.S.A. § 1951 is amended to read: § 1951. DEFINITIONS As used in this subchapter: (1) “Assessment” means a tax levied on a health care provider pursuant to this chapter. (2) “Commissioner” means the commissioner of prevention, assistance, transition, and health access, or a designee. (3) “Core home health care services” means those medically-necessary skilled nursing, home health aide, therapeutic, and persona1 care attendant services, provided exclusively in the home by home health agencies. Core home health services do not include private duty nursing, hospice, homemaker or physician services, or services provided under early periodic screening and, diagnostic services diagnosis, and treatment (EPSDT), traumatic brain injury (TBI), high technology programs, or services provided by a home for the terminally ill as defined in subdivision 7102(10) of this title.

JOURNAL OF THE HOUSE 357 (4)(3) “Department” means the department of prevention, assistance, transition, and health access “Director” means the director of the office of Vermont health access. (5)(4) “Fund” means the Vermont health care access trust fund consisting primarily in part of assessments from health care providers under this subchapter. (6)(5) “Health care provider” means any hospital, nursing home, intermediate care facility for the mentally retarded, or home health agency, or retail pharmacy. (7)(6) “Home health agency” means an entity that has received a certificate of need from the state to provide home health services or is certified by the state to provide services pursuant to 42 U.S.C. § 1395x(o). (8)(7) “Hospital” means a hospital licensed under chapter 43 of Title 18. (9)(8) “Intermediate Care Facility for the Mentally Retarded” (“ICF/MR”) means a facility which provides long-term health related care to residents with mental retardation pursuant to section subdivision 1902(a)(31) of the Social Security Act (42 U.S.C. § 1396a(a)(31)). (10)(9) “Mental hospital” or “psychiatric facility” means a hospital as defined in 18 V.S.A. § 1902(a)(2) or (8) 18 V.S.A. § 1902(1)(B) or (H), but does not include psychiatric units of general hospitals. (11)(10) “Net operating revenues” means a provider’s gross charges less any deductions for bad debts, charity care, contractual allowances, and other payer discounts. (12)(11) “Nursing home” means a health care facility licensed under chapter 71 of Title 33 this title. (12) “Office” means the office of Vermont health access. (13) “Pharmacy” means a Vermont drug outlet licensed by the Vermont state board of pharmacy pursuant to chapter 36 of Title 26 in which prescription drugs are sold at retail. (14) “Secretary” means the secretary of the agency of human services. Sec. 284. 33 V.S.A. § 1952(b) is amended to read: (b) The department office may use not more than one percent of the assessments received under the provisions of this subchapter for necessary administrative expenses associated with this subchapter. Sec. 285. 33 V.S.A. § 1953 is amended to read: 358 SATURDAY, JUNE 4, 2005 § 1953. HOSPITAL ASSESSMENT (a) Hospitals shall be subject to an annual assessment as follows: (1) Beginning July 1, 2004 2005, each hospital’s annual assessment, except for hospitals assessed under subdivision (2) of this subsection, shall be 4.54 6.0 percent of its net patient revenues (less chronic, skilled, and swing bed revenues) for the most recent completed hospital hospital’s fiscal year as determined annually by the commissioner director from the hospital’s financial reports and other data filed with the department of banking, insurance, securities, and health care administration before December 1 of the previous year. The annual assessment shall be based on data from a hospital’s third most recent full fiscal year. * * * (b) Each hospital shall be notified in writing by the department office of the assessment made pursuant to this section. If no hospital submits a request for reconsideration under section 1958 of this title, the assessment shall be considered final. (c) Each hospital shall submit its assessment to the department office according to a payment schedule adopted by the commissioner director. Variations in payment schedules shall be permitted as deemed necessary by the commissioner director. (d) Any hospital that fails to make a payment to the department office on or before the specified schedule, or under any schedule for delayed payments established by the commissioner director, shall be assessed not more than $1,000.00. The commissioner shall director may waive this late payment assessment provided for in this subsection for good cause shown by the hospital. Sec. 286. 33 V.S.A. § 1954 is amended to read: § 1954. NURSING HOME ASSESSMENT (a) Beginning July 1, 2004 2005, each nursing home’s annual assessment rate shall be $3,787.79 per bed licensed pursuant to section 7105 of this title on June 30 of the immediately preceding fiscal year shall be as follows: (1) Until such time as the United States Department of Health and Human Services grants a waiver to the uniform assessment rate, pursuant to 42 C.F.R. § 433.68(e), all licensed nursing home beds shall be assessed at the uniform rate of $3,676.06. (2) At such time as the United States Department of Health and Human Services grants a waiver to the uniform assessment, the assessment shall be

JOURNAL OF THE HOUSE 359 $4,000.00 per bed for privately-owned nursing homes with more than 30 licensed beds, $1,900.00 per bed for privately-owned nursing homes with 30 beds or fewer, and $100.00 per bed for state-owned or operated nursing homes. If a waiver is granted, these rates shall be retroactive to the effective date of this subsection and any difference between the assessments under this subdivision and the payments under subdivision (1) of this subsection shall be reconciled by the collection of underpayments and the refund of overpayments. (3) The annual assessment for each bed licensed as of the beginning of the fiscal year shall be prorated for the number of days during which the bed was actually licensed and any over payment shall be refunded to the facility. To receive the refund, a facility shall notify the commissioner director in writing of the size of the decrease in the number of its licensed beds and dates on which the beds ceased to be licensed. (b) The department office shall provide written notification of the assessment amount to each nursing home. The assessment amount determined shall be considered final unless the home requests a reconsideration. Requests for reconsideration shall be subject to the provisions of section 1958 of this title. (c) Each nursing home shall submit its assessment to the department office according to a schedule adopted by the commissioner director. The commissioner director may permit variations in the schedule of payment as deemed necessary. (d) Any nursing home that fails to make a payment to the department office on or before the specified schedule, or under any schedule of delayed payments established by the commissioner director, shall be assessed not more than $1,000.00. The commissioner shall director may waive this late-payment assessment provided for in this subsection for good cause shown by the nursing home. Sec. 287. 33 V.S.A. § 1955 is amended to read: § 1955. ICF/MR ASSESSMENT (a) Each ICF/MR’s annual assessment shall be six percent of the ICF/MR’s total annual direct and indirect expenses for the most recently settled ICF/MR audit. (b) The department office shall provide written notification of the assessment amount to each ICF/MR. The assessment amount determined shall be considered final unless the facility requests a reconsideration. Requests for reconsideration shall be subject to the provisions of section 1958 of this title. 360 SATURDAY, JUNE 4, 2005 (c) Each ICF/MR shall remit its assessment to the department office according to a schedule adopted by the commissioner director. The commissioner director may permit variations in the schedule of payment as deemed necessary. (d) Any ICF/MR that fails to make a payment to the department office on or before the specified schedule, or under any schedule of delayed payments established by the commissioner director, shall be assessed not more than $1,000.00. The commissioner shall director may waive this late-payment assessment provided for in this subsection for good cause shown by the ICF/MR. Sec. 288. 33 V.S.A. § 1955a is amended to read: § 1955a. HOME HEALTH AGENCY ASSESSMENT (a) Beginning July 1, 2003 2005, each home health agency’s assessment shall be 16.0 18.45 percent of its net operating revenues from core home health care services, excluding revenues for services provided under Title XVIII of the federal Social Security Act. The amount of the tax shall be determined by the commissioner director based on the home health agency’s most recent audited financial statements at the time of submission, a copy of which shall be provided on or before December 1 of each year to the office of Vermont health access. For providers who begin operations as a home health agency after January 1, 2005, the tax shall be assessed as follows: (1) Until such time as the home health agency submits audited financial statements for its first full year of operation as a home health agency, the director, in consultation with the home health agency, shall annually estimate the amount of tax payable and shall prescribe a schedule for interim payments. (2) At such time as the full-year audited financial statement is filed, the final assessment shall be determined, and the home health agency shall pay any underpayment or the office shall refund any overpayment. The assessment for the state fiscal year in which a provider commences operations as a home health agency shall be prorated for the proportion of the state fiscal year in which the new home health agency was in operation. (b) Each home health agency shall be notified in writing by the department office of the assessment made pursuant to this section. If no home health agency submits a request for reconsideration under section 1958 of this title, the assessment shall be considered final. (c) Each home health agency shall submit its assessment to the department office according to a payment schedule adopted by the commissioner director.

JOURNAL OF THE HOUSE 361 Variations in payment schedules shall be permitted as deemed necessary by the commissioner director. (d) Any home health agency that fails to make a payment to the department office on or before the specified schedule, or under any schedule for delayed payments established by the commissioner director, shall be assessed not more than $1,000.00. The commissioner shall director may waive this late payment assessment provided for in this subsection for good cause shown by the home health agency. Sec. 289. 33 V.S.A. § 1955b is added to read: § 1955b. PHARMACY ASSESSMENT (a) Beginning July 1, 2005, each pharmacy’s monthly assessment shall be $0.10 for each prescription filled and refilled. (b) Each pharmacy shall declare and provide supporting documentation to the director of the total number of prescriptions filled and refilled in the previous month and remit the assessment due for that month. The declaration and payment shall be due by the end of the following month. (c) Each pharmacy shall submit its assessment payment to the office monthly. Variations in payment timing shall be permitted as deemed necessary by the director. (d) Any pharmacy that fails to pay an assessment to the office on or before the due date shall be assessed a late payment penalty of two percent of the assessment amount for each month it remains unpaid; but late payment penalties for any one quarter shall not exceed $500.00. The director may waive a penalty under this subsection for good cause shown by the pharmacy, as determined by the director in his or her discretion. Sec. 290. REPEAL OF ASSESSMENT SUNSETS (a) Sec. 205 of No. 49 of the Acts of 1999, as amended by Sec. 18 of No. 65 of the Acts of 2001 and Sec. 311 of No. 66 of the Acts of 2003 (sunset of home health agency assessment), is repealed. (b) Sec. 4 of No. 56 of the Acts of 1993, as amended by Sec. 11 of No. 14 of the Acts of 1995, Sec. 71 of No. 59 of the Acts of 1997, Sec. 198 of No. 49 of the Acts of 1999, Sec. 17 of No. 65 of the Acts of 2001, and Sec. 312 of No. 66 of the Acts of 2003 (sunset of hospital assessment and nursing home assessment), is repealed. Sec. 291. 33 V.S.A. § 1956 is amended to read: 362 SATURDAY, JUNE 4, 2005 § 1956. HEALTH CARE TRUST FUND PROCEEDS FROM ASSESSMENTS (a) The health care trust fund is hereby established in the state treasury is abolished. All remaining assets in the health care trust fund shall be deposited in the Vermont health access trust fund established by section 1972 of this title. All assessments, including late-payment assessments, from health care providers under this subchapter shall be deposited in the Vermont health access trust fund established in section 1972 of this title. The proceeds of other taxes designated by law and donations may also be deposited in the fund. Interest earned on the fund and any remaining balance shall be retained in the fund for the purposes of this subchapter. The department shall maintain records showing the amount of money in the fund at any time. (b) All monies received from or generated to the fund shall be used for the state portion of Medicaid expenditures and for administration of provisions of this subchapter under subsection 1952(c) of this title. Of the net revenues generated by the per bed annual assessment on nursing homes under subsection 1954(a) of this title, the net revenues generated by $200.00 per bed shall be used for home- and community-based Medicaid waiver services and the net revenues generated by $1,768.69 per bed, less the total amount of the state share of the inflation factor adjustments for state fiscal year 2002, as calculated by the division of rate setting pursuant to subsection 905(c) of this title, shall be used solely for Medicaid nursing home reimbursement as follows: (1) Beginning on July 1, 1999, until such time as all cost categories have been rebased pursuant to section 905(c) of this title on a base year no earlier than 2002, wage supplements shall be paid on a schedule to be determined by the commissioner. Such supplements shall be based on the change in expenditures incurred on or after January 1, 1999, as determined by the division of rate setting, for wages, salaries and fringe benefits incurred by nursing homes for direct care staff and for other employee groups in nursing homes, other than owners and administrators (net expenditures). The division of rate setting shall annually calculate the net expenditures for each nursing home. Notwithstanding subsection 905(c) of this title or any other provision of law, the change of base year for any component of the nursing home payment rate shall not be made later than January 1, 2005. (2) The wage supplement shall not be subject to any payment limitations imposed pursuant to section 907 of this title. The aggregate amount of the wage supplements paid to all nursing homes during any fiscal year shall not exceed the net revenues from the nursing home assessments set aside for that purpose for that year plus the federal matching funds for those net revenues. The annual wage supplement payment for a nursing home shall be its

JOURNAL OF THE HOUSE 363 proportional share of the net revenues, based on the ratio of its nursing wages, salaries and fringe benefits paid by the nursing home for direct care staff and for other employee groups, other than owners and administrators, to the total for all nursing homes participating in the Vermont Medicaid program in the 1997 cost reports. (3) After all cost categories have been rebased, wage supplements shall cease. To the extent that total net expenditures by a nursing home are less than the total wage supplement payments to that home, the excess shall be deemed an overpayment and shall be recouped from the home on a schedule to be determined by the commissioner and deposited in the health care trust fund. (4) No wage supplement payments shall be made until such time as the lawsuit filed by nursing homes against the state of Vermont now pending in Washington superior court is dismissed with prejudice. (c) On or before January 1, 2000, the commissioner shall report to the general assembly on the operation of the health care trust fund and wage supplements. (d) No provision of this subchapter shall permit the state to reduce the level of state funds expended on the nursing home Medicaid program in any fiscal year below the level expended in fiscal year 1991 from the general fund for the nursing home Medicaid program. (e) The general assembly shall appropriate funds from the health care trust fund to the department of prevention, assistance, transition, and health access, the department of aging and disabilities, and the department of developmental and mental health services, and such funds shall be transferred to the departments’ Medicaid and administrative appropriations as requested by the departments to carry out the purposes of this subchapter. Sec. 292. 33 V.S.A. § 1957 is amended to read: § 1957. AUDITS The commissioner director may require the submission of audited information as needed from health care providers to determine that amounts received from health care providers were correct. If an audit identifies amounts received due to errors by the department office, the commissioner director shall make payments to any health care provider which the audit reveals paid amounts it should not have been required to pay. Payments made under this section shall be made from the fund. Sec. 293. 33 V.S.A. § 1958 is amended to read: § 1958. APPEALS 364 SATURDAY, JUNE 4, 2005 (a) Any health care provider may submit a written request to the department office for reconsideration of the determination of the assessment within 20 days of notice of the determination. The request shall be accompanied by written materials setting forth the basis for reconsideration. If requested, the department office shall hold a hearing within 20 days from the date on which the reconsideration request was received. The department office shall mail written notice of the date, time, and place of the hearing to the health care provider at least 10 days before the date of the hearing. On the basis of the evidence submitted to the department office or presented at the hearing, the department office shall reconsider and may adjust the assessment. Within 20 days of the hearing, the department office shall provide notice in writing to the health care provider of the final determination of the amount it is required to pay based on any adjustments made by it. Proceedings under this section are not subject to the requirements of 3 V.S.A. chapter 25. (b) Upon request, the commissioner director shall enter into nonbinding arbitration with any health care provider dissatisfied with the department’s office’s decision regarding the amount it is required to pay. The arbitrator shall be selected by mutual consent, and compensation shall be provided jointly. (c) Any health care provider may appeal the decision of the department office as to the amount it is required to pay either before or after arbitration, to the superior court having jurisdiction over the health care provider. Sec. 294. 33 V.S.A. § 1971(3) is amended to read: (3) “Office of Vermont health access” means the division office of Medicaid within the agency of human services. Sec. 295. 33 V.S.A. § 1972 is amended to read: § 1972. VERMONT HEALTH ACCESS TRUST FUND ESTABLISHED (a) The Vermont health access trust fund is hereby established in the state treasury for the purpose of establishing a special fund to be the single source to finance health care coverage for beneficiaries of all state health care assistance programs administered by the department of prevention, assistance, transition, and health access agency. (b) Into the fund shall be deposited: * * * (2) revenue from health care provider assessments collected and deposited into the health care trust fund pursuant to subchapter 2 of chapter 19 of this title;

JOURNAL OF THE HOUSE 365 * * * (c) The fund shall be administered pursuant to subchapter 5 of chapter 7 of Title 32, except that interest earned on the fund and any remaining balance shall be retained in the fund. The department agency shall maintain records indicating the amount of money in the fund at any time. (d) All monies received by or generated to the fund shall be used only for the administration and delivery of health care covered through state health care assistance programs administered by the department of prevention, assistance, transition, and health access agency, including the Medicaid program, the Vermont health access plan program, the Vermont health access plan-pharmacy program, the VScript program, the VScript-Expanded program, the state children’s health insurance program, the General Assistance program, and any other state health care assistance program administered directly or indirectly by or through the department agency. Sec. 296. MEDICAID PROGRAM ADMINISTRATION (a) Twenty-four-hour coverage. The office of Vermont health access shall establish a telephone line, staffed by physicians or nurses, which shall be available, initially, to medically complex beneficiaries at all times, 24 hours each day of the week, to provide appropriate advice to these beneficiaries and to improve communications between these beneficiaries and their caregivers. The office shall take active steps to ensure that these beneficiaries and their providers are knowledgeable about the 24/7 telephone line. (b) Care coordination. The office shall establish a program to assist in improving care by providing coordination among the multiple providers who treat individuals with serious illnesses. Goals of the program shall be collaboration and patient involvement in care, while promoting clinically appropriate and cost efficient services. (c) The office, in collaboration with the department of aging and independent living, shall undertake a study of ways to improve coordination of long - term and acute care for individuals served by the state’s long - term care waiver. (d) The office shall establish a program to improve planning for post- hospital care to be provided during the patient’s hospital stay and to assist in post-discharge care. (e) Sole source authority. Notwithstanding current state laws, including 3 V.S.A. § 222(g), and regulations to the contrary and in order to implement the program changes required by this act during state fiscal year 2006, including system development, actuarial certification, pharmaceutical counter-detailing, 366 SATURDAY, JUNE 4, 2005 preferred drug list data analysis, and outreach services, the secretary of the agency of human services may negotiate sole source contracts to meet the implementation deadlines in this act. Sec. 297. MEDICAID COVERAGE; DENTURES; EYEGLASSES (a) The health access oversight committee of the legislature shall review the costs, benefits, and financing alternatives of including coverage for full dentures, partial dentures, and eyeglasses under the Medicaid program. In this review, the committee shall have the assistance of the office of Vermont health access, the joint fiscal office, and the legislative council. The committee shall report its findings and recommendations to the general assembly no later than January 15, 2006. Sec. 298. CHIROPRACTIC BENEFITS FOR ADULTS (a) The office of Vermont health access shall design a chiropractic trial to begin in state fiscal year 2007. This trial shall be predicated upon and will proceed only if federal financial participation can be secured for the trial. The trial shall include limited diagnoses where chiropractic services, identified by the office of Vermont health access, shall be covered for the duration of the trial. The study period shall include an analysis of both the clinical efficacy of chiropractic treatment for the diagnoses identified along with a comparison to other treatment modalities for the same diagnoses and a financial analysis of the different treatment modalities. At the conclusion of the trial period and upon confirmation from the centers for Medicare and Medicaid services that federal financial participation would be available, a recommendation shall be made to the general assembly for the reinstatement of chiropractic services where positive clinical outcomes and lower overall treatment costs have been shown. This recommendation may be limited by the scope and definitions of the trial. Sec. 299. EMPLOYER SPONSORED INSURANCE (a) The office of Vermont health access with the assistance of the department of banking, insurance, securities and health care administration shall develop a program to provide subsidies for individuals applying for and enrolled in the Vermont health access program and the Dr. Dynasaur program who have employer sponsored health insurance. The office and department shall report to the health access oversight committee, the senate and house appropriations committees, the senate committee on health and welfare and the house committee on human services with a plan for the employer-sponsored insurance program no later than January 15, 2006. The plan shall include recommendations for the subsidy amounts to be provided for each program by relevant income amounts based on federal poverty level, administrative cost

JOURNAL OF THE HOUSE 367 estimates, implementation timelines, existing employer sponsored insurance options, a recommendation on the minimum health insurance coverage to be subsidized, and a recommendation on how to define “affordable” coverage for individuals, families and children by relevant income amounts based on federal poverty level. Sec. 300. CAPITATED PROGRAM FOR TREATMENT OF OPIATE DEPENDENCY (a) As part of the development of the office of Vermont health access’s care coordination initiative, there shall be developed a capitated program for the treatment of opiate dependency. In cooperation with all commercial insurers present in Vermont, the department of corrections, the office of drug and alcohol abuse programs, and office of Vermont health access shall: (1) develop a statewide electronic registry and treatment service assessment of patients with opiate dependency; (2) develop a statewide, integrated protocol for the treatment of opiate dependency; (3) identify the administrative and financial resources necessary to successfully implement and maintain the capitated program for the treatment of opiate dependency; (4) use a capitated payment methodology and set payment rates; and (5) create a plan to measure program outcomes with specific benchmarks. (b) The office shall provide a preliminary report and a recommendation for ongoing funding to the house and senate committees on appropriations, the house human services committee, and the senate health and welfare committee no later than January 15, 2006. Sec. 301. ENHANCED REGIONAL DISEASE SCREENING (a) In collaboration with the Vermont department of health (VDH), the office of Vermont health access shall promote primary disease detection activities in the following manner: (1) heighten awareness of ongoing public health screenings conducted by the VDH such as the Ladies First and Wise Woman programs; (2) procure and analyze Medicaid claims and Center for Disease Control public health data to develop regional disease prevalence rates to help prioritize specific screening programs; and 368 SATURDAY, JUNE 4, 2005 (3) collaborate on joint ventures with the VDH utilizing the twelve district public health offices to implement and coordinate the above stated efforts on a regional basis. Sec. 302. FISCAL YEAR 2006 MEDICAID RELATED RULE-MAKING (a) Nursing homes. The division of rate setting shall amend the rules for establishing Medicaid rates for nursing home services to raise the minimum occupancy used in setting Medicaid rates to 93 percent, effective July 1, 2005. Notwithstanding any other provisions of law, this rule change shall be adopted as soon as practicable after passage of this act and shall be exempt from the procedural requirements of 3 V.S.A. chapter 25, except that the agency of human services shall make reasonable efforts to ensure that the change is made known to persons who may be affected by it. The required rule change shall stay in effect until such time as it is amended pursuant to 3 V.S.A. chapter 25. (b) Emergency rulemaking for July 1, 2005. Authority for emergency rulemaking is granted to the agency of human services in order to control expenditures in the Medicaid program in a timely manner, respond to the fiscal crisis in the Medicaid program, and retain Medicaid funds available to support essential programs for truly needy applicants and recipients. Therefore, the secretary of the agency of human services may adopt emergency rules pursuant to section 844 of Title 3 in order that the changes reflected in Sec. 279 (VHAP premium adjustments), and Sec. 280 (Dr. Dynasaur and SCHIP premium adjustments) of this act may be implemented no later than July 1, 2005. Emergency rules adopted under this section remain in effect until superseded, extended, or amended by the secretary of the agency of human services under the process for adoption of agency rules in chapter 25 of Title 3. (c) Expedited rulemaking. Notwithstanding the provisions of chapter 25 of Title 3, if specifically authorized by the general assembly by law, the agency of human services may adopt rules pursuant to the following expedited rulemaking process: (1) The agency shall file proposed rules with the secretary of state and the legislative committee on administrative rules under 3 V.S.A. §841 after copies are sent to the house committees on appropriations and human services and after publication in three daily newspapers with the highest average circulation in the state of a notice that lists the rules to be adopted pursuant to this process and a seven-day public comment period following publication. (2) The agency shall file final proposed rules with the legislative committee on administrative rules 14 days after the public comment period. (3) The legislative committee on administrative rules shall review and may approve or object to the final proposed rules under 3 V.S.A. § 842, except

JOURNAL OF THE HOUSE 369 that its action shall be completed no later than 14 days after the final proposed rules are filed with the committee. (4) The agency may adopt a properly filed final proposed rule after the passage of 14 days from the date of filing final proposed rules with the legislative committee on administrative rules or after receiving notice of approval from the committee, provided the agency: (A) has not received a notice of objection from the legislative committee on administrative rules; or (B) after having received a notice of objection from the committee, has responded pursuant to 3 V.S.A. § 842. (5) Rules adopted under this section shall be effective upon being filed with the secretary of state and shall have the full force and effect of rules adopted pursuant to chapter 25 of Title 3. Rules filed by an agency with the secretary of state pursuant to this section shall be deemed to be in full compliance with 3 V.S.A. § 843 and shall be accepted by the secretary of state if filed with a certification by the secretary of human services that the rule is required to meet the purposes of this section. Sec. 303. LONG-TERM CARE; FINANCIAL ELIGIBILITY (a) The secretary of the agency of human services is directed to amend the Medicaid rules and procedures related to income, resources, and transfers of assets used to determine eligibility of individuals for long - term care coverage under the expedited rulemaking authority granted in Sec. 302(c) of this act. The amendments to the Medicaid rules made under this section must be in accord with federal law. The agency’s authority to utilize the expedited rulemaking process is limited only to adoption of rules to effect the following changes: (1) To subject long-term care recipients to post-eligibility rules only if the recipients qualify for long-term care as part of the special income group under 42 U.S.C. § 1396a(a)(10)(A)(ii)(VI), or as medically needy under 42 U.S.C. § 1396a(a)(10)(C), or if they are in a medical institution; (2) To require individuals with income above the institutional standard requesting long-term care to spend down to the protected income level; (3) To permit reasonable expenses specified in current rules to reduce to the share of income applied to the cost of long - term care. (For the purposes of this subdivision, “reasonable expenses” do not include long - term care services received during periods of ineligibility for long - term care.); 370 SATURDAY, JUNE 4, 2005 (4) To impose requirements on private contracts for care to limit their use as an excluded resource; (5) To count as a resource a life estate held by the applicant or recipient with a reserved power - to-mortgage (other than the principal place of residence) and value the life estate at the full fair market value of the fee estate, notwithstanding the purported creation of a remainder interest in another party; (6) To treat promissory notes and other similar income-producing resources in the same fashion as annuities and excludable only if certain collateral criteria of eligibility are met; (7) To implement additional tools to determine life expectancy; (8) To penalize transfers beginning on the first day of the month following the date of the transfer. (b) In addition, in order to control expenditures and retain Medicaid funds available to support essential programs for truly needy applicants and recipients, the agency of human services may utilize the expedited rulemaking authority set out in Sec. 302(c) of this act to amend rules related to income, resources, and transfers of assets used to determine eligibility of individuals for long - term care, if required to do so to address ambiguity, omission, or expectations that are providing a way for otherwise ineligible SSI - related medically needy applicants with income above 300 percent of the SSI payment standard for one person in the community pursuant to 42 USC 1396a(a)(10(C) (ii), or optionally categorically needy applicants with income above the protected income level and below 300 percent of the SSI payment standard for one who qualifies as part of the “special income group” pursuant to 42 USC 1396a(10)(A)(ii)(VI), to avoid such asset and financial eligibility rules. Sec. 304. HIV/AIDS HEALTH INSURANCE ASSISTANCE PROGRAM (a) The office of Vermont health access, in cooperation with the department of health, shall operate an HIV/AIDS insurance assistance program. (b) The program shall pay all or a portion of continuation health insurance premiums for those eligible individuals with HIV/AIDS for whom it can be determined that continuation of private insurance coverage is less costly to the state than other alternatives. (c) Eligibility for this program shall be limited to individuals whose household income does not exceed 200 percent of the federal poverty level, after deducting unreimbursed medical expenses and health insurance premiums from gross income, and whose assets, exclusive of the primary residence and

JOURNAL OF THE HOUSE 371 certain other exclusions to be defined by the office of Vermont health access do not exceed $10,000.00. (d) Expenditures under this program shall not exceed $55,000.00 in fiscal year 2006. Sec. 305. PREFERRED DRUG LIST; DRUG UTILIZATION REVIEW (a) Preferred drug list (PDL) revisions. (1) Prescribers shall be required to comply with any changes in the PDL within reasonable time frames prescribed by the office of Vermont health access in consultation with the drug utilization review board. (2)(A) The exemption of certain classes of drugs used to treat certain types of severe and persistent mental illness from inclusion in the prior authorization process may end after the review of the report required in Sec. 5(2)(B) of No. 127 of the Acts of the 2001 Adj. Sess. (2002) as amended by Sec. 128h of No. 122 of the Acts of the 2003 Adj. Sess. (2004) and Sec. 310 of this act is completed, the proposed changes to the preferred drug list have been reviewed by the drug utilization review board, and the health access oversight committee has made any recommendations to the drug utilization review board no later than September 15, 2005. (B) The proposed changes to the preferred drug list shall ensure that adults with severe and persistent mental illness and children with a severe emotional disorder receiving pharmaceuticals under Medicaid or a state pharmaceutical program subject to subchapter 5 of chapter 19 of Title 33 prior to the end of the exemption shall receive the same pharmaceuticals without following the new rules or procedures if: (i) the individual is at risk of psychiatric destabilization from changing to a therapeutically comparable pharmaceutical; and (ii) the risk is certified in a manner established by the drug utilization review board. (b) Drug utilization review revisions. (1) The members of the drug utilization review board are entitled to compensation for services and reimbursement of expenses as provided to members of state boards under 32 V.S.A. § 1010. (2) The director, in consultation with the drug utilization review board, shall establish an advisory panel of three persons with clinical and pharmacological expertise to advise the drug utilization review board on scientific, technical, and clinical issues relating to the clinical efficacy, safety, and cost - effectiveness of drugs considered for inclusion on the preferred drug 372 SATURDAY, JUNE 4, 2005 list. Experts on the panel shall be entitled to compensation for services as provided by contract with the director. (3) The office, in consultation with the drug utilization review board, shall establish a policy to increase the appropriate use of generic drugs. The policy may include education, outreach, and the use of prior authorization whenever a brand is prescribed and a generic drug is available. The policy shall have a target of 95 percent utilization of generic drug prescriptions when generic equivalent drugs are available and 60 percent when generic alternative drugs are available. (4) The office, in consultation with the drug utilization review board, shall identify new therapeutic classes from which savings are possible through the use of a PDL. In order to assist in making this determination, the office shall be provided with comparative information such as that developed by the drug effectiveness review project. (5) The drug utilization review board shall make recommendations to establish criteria for the supply of prescription drugs to be dispensed. Sec. 306. 18 V.S.A. § 4605(a) is amended to read: (a) When a pharmacist receives a prescription for a drug which is listed either by generic name or brand name in the most recent edition of the federal Food and Drug Administration’s “Orange Book” of approved drug products, the pharmacist shall select the lowest priced drug from such list which is chemically and therapeutically equivalent and which the pharmacist has in stock, unless otherwise instructed by the prescriber, or by the purchaser if the purchaser agrees to pay any additional cost in excess of the benefits provided by the purchaser’s health benefit plan if allowed under the legal requirements applicable to the plan, otherwise to pay the full cost for the higher priced drug. Sec. 307. 33 V.S.A. § 1998a is added to read: § 1998a. PHARMACY MAIL ORDER The pharmacy best practices and cost control program shall require consumers to purchase prescription drugs using mail order for selected pharmacy products. Sec. 308. 33 V.S.A. § 1998(f)(1) and (2) are amended to read: (1) The drug utilization review board shall make recommendations to the commissioner director for the adoption of the preferred drug list. The board’s recommendations shall be based upon considerations of clinical efficacy, safety, and cost-effectiveness.

JOURNAL OF THE HOUSE 373 (2) The board shall meet at least quarterly. The board shall comply with the requirements of subchapter 2 of chapter 5 of Title 1 (open meetings) and subchapter 3 of chapter 5 of Title 1 (open records), except that the board may go into executive session in order to comply with 2002(c) of this title to consider information relating to a pharmaceutical rebate or to supplemental rebate agreements, which is protected from disclosure by federal law or the terms and conditions required by the Centers for Medicare and Medicaid Services as a condition of rebate authorization under the Medicaid program. Sec. 308a. 1 V.S.A. § 313(a) is amended to read: (a) No public body described in section 312 of this title may hold an executive session from which the public is excluded, except by the affirmative vote of two-thirds of its members present in the case of any public body of state government or of a majority of its members present in the case of any public body of a municipality or other political subdivision. A motion to go into executive session shall indicate the nature of the business of the executive session, and no other matter may be considered in the executive session. Such vote shall be taken in the course of an open meeting and the result of the vote recorded in the minutes. No formal or binding action shall be taken in executive session except actions relating to the securing of real estate options under subdivision (2) of this subsection. Minutes of an executive session need not be taken, but if they are, shall not be made public subject to section subsection 312(b) of this title. A public body may not hold an executive session except to consider one or more of the following: * * * (9) information relating to a pharmaceutical rebate or to supplemental rebate agreements, which is protected from disclosure by federal law or the terms and conditions required by the Centers for Medicare and Medicaid Services as a condition of rebate authorization under the Medicaid program, considered pursuant to 33 V.S.A. §1998(f)(2) and §2002(c) . Sec. 309. 33 V.S.A. § 1999(a)(2) is amended to read: (2)(A) The program shall authorize coverage under the same terms as coverage for preferred choice drugs if the prescriber determines, after consultation with the pharmacist, or with the participating health benefit plan if required by the terms of the plan, that: (i) the preferred choice has not been effective, or with reasonable certainty is not expected to be effective, in treating the patient’s condition; or (ii) the preferred choice causes or is reasonably expected to cause adverse or harmful reactions in the patient. 374 SATURDAY, JUNE 4, 2005 (B) The prescriber’s determination concerning whether the standards established in this subdivision (2) have been demonstrated shall be final if any documentation required at the direction of the drug utilization board has been provided. Sec. 310. MENTAL HEALTH DRUGS; PRIOR AUTHORIZATION Sec. 5(2) of No. 127 of the Acts of the 2001 Adj. Sess. (2002) as amended by Sec. 128h of No. 122 of the Acts of the 2003 Adj. Sess. (2004) is amended to read: (2)(A) Sec. 1, 33 V.S.A. § 1999(d) (prior authorization and drugs used to treat mental illness), shall be repealed on July 1, 2006 amended to read: (d) The program’s prior authorization process shall not apply to prescription drugs prescribed for the treatment of severe and persistent mental illness including schizophrenia, severe depression, or bipolar disorder. The agency may include prescription drugs prescribed for the treatment of severe and persistent mental illness, including schizophrenia, major depression, or bipolar disorder, in the prior authorization process after the health access oversight committee has reviewed the report as provided for in Sec. 305(a)(2) (A) of H-516 of the 2005 legislative session. (B) The commissioner of prevention, assistance, transition, and health office of Vermont health access shall report to the health access oversight committee concerning the drug utilization review board’s analysis of prescribing patterns, literature, and testimony regarding clinical efficacy and outcomes, expenditure trends, and any proposed revisions to the preferred drug list as it pertains to drugs used to treat mental illness no later than September 1, 2005. The commissioner’s director’s report shall include also an assessment of the use of medication algorithms and of the behavioral pharmacy project implemented in the state of Missouri and other such cost - saving alternatives in use in other states that do not include the use of a formulary, preferred drug list, or prior authorization process. Sec. 311. 33 V.S.A. § 2002(b) is amended to read: (b) The commissioner director shall negotiate supplemental rebates, price discounts, and other mechanisms to reduce net prescription drug costs by means of any negotiation strategy which the commissioner director determines will result in the maximum economic benefit to the program and to consumers in this state, while maintaining access to high quality prescription drug therapies. The director may negotiate through a purchasing pool or directly with manufacturers. The provisions of this subsection do not authorize agreements with pharmaceutical manufacturers whereby financial support for medical services covered by the Medicaid program is accepted as

JOURNAL OF THE HOUSE 375 consideration for placement of one or more prescription drugs on the preferred drug list. The January 1, 2003 report of the commissioner pursuant to subsection 2001(d) of this title shall include a cost-benefit analysis of alternative negotiation strategies, including the strategy used by the State of Florida to secure supplemental rebates, the strategy used by the State of Michigan to secure supplemental rebates, and any other alternative negotiation strategy that might secure lower net prescription drug costs. Sec. 312. 18 V.S.A. § 9410(h) is added to read: (h) Data Collection and Information Sharing. (1) All health insurers shall electronically provide to the commissioner in accordance with standards and procedures adopted by the commissioner by rule: (A) their encrypted claims data; (B) cross-matched claims data on requested members, subscribers, or policyholders; and (C) member, subscriber, or policyholder information necessary to determine third party liability for benefits provided. (2) The collection, storage, and release of health care data and statistical information that is subject to the federal requirements of the Health Insurance Portability and Accountability Act (“HIPAA”) shall be governed exclusively by the rules adopted thereunder in 45 CFR Parts 160 and 164. (A) All health insurers that collect the Health Employer Data and Information Set (HEDIS) shall annually submit the HEDIS information to the commissioner in a form and in a manner prescribed by the commissioner. (B) All health insurers shall accept electronic claims submitted in Centers for Medicare and Medicaid Services format for UB-92 or HCFA-1500 records, or as amended by the Centers for Medicare and Medicaid Services. (3)(A) The commissioner shall collaborate with the agency of human services and participants in agency of human services initiatives in the development of a comprehensive health care information system. The collaboration is intended to address the formulation of a description of the data sets that will be included in the comprehensive health care information system, the criteria and procedures for the development of limited use data sets, the criteria and procedures to ensure that HIPAA compliant limited use data sets are accessible, and a proposed time frame for the creation of a comprehensive health care information system. 376 SATURDAY, JUNE 4, 2005 (B) To the extent allowed by HIPAA, the data shall be available as a resource for insurers, employers, providers, purchasers of health care, and state agencies to continuously review health care utilization, expenditures, and performance in Vermont and to enhance the ability of Vermont consumers and employers to make informed and cost-effective health care choices. In presenting data for public access, comparative considerations shall be made regarding geography, demographics, general economic factors, and institutional size. (C) Notwithstanding HIPAA or any other provision of law, the comprehensive health care information system shall not include or disclose any data that contains direct personal identifiers. For the purposes of this section, “direct personal identifiers” include information relating to an individual that contains primary or obvious identifiers, such as the individual’s name, street address, e-mail address, telephone number, and Social Security number. Sec. 313. PHARMACEUTICAL ASSISTANCE PROGRAMS; PREMIUM ADJUSTMENTS (a) On July 1, 2006, the premiums for the pharmaceutical assistance programs established in 33 V.S.A. §2074 shall be increased as follows: (1) In the case of recipients whose household income is greater than the income eligibility level for Medicaid and no greater than 150 percent of the federal poverty level, such premium shall be $15.00 per month. (2) In the case of recipients whose household income is greater than 150 percent of the federal poverty level and no greater than 175 percent of the federal poverty level, the premium shall be $20.00 per month. (3) In the case of recipients whose household income is greater than 175 percent of the federal poverty level and no greater than 225 percent of the federal poverty level, the premium shall be $42.00 per month. (b) On July 1, 2006, the base cost-sharing amount for V-Pharm shall be increased to: (1) $15.00 per month or $180.00 per year in the case of recipients whose household income is no greater than 150 percent of the federal poverty level. (2) $20.00 per month or $240.00 per year in the case of recipients whose household income is greater than 150 percent of the federal poverty level and no greater than 175 percent of the federal poverty level.

JOURNAL OF THE HOUSE 377 (3) $42.00 per month or $504.00 per year in the case of recipients whose household income is greater than 175 percent of the federal poverty level and no greater than 225 percent of the federal poverty level. Sec. 314. 33 V.S.A. chapter 19, subchapter 8 is added to read: Subchapter 8. Vermont Pharmaceutical Assistance Programs § 2071. DEFINITIONS For purposes of this subchapter: (1) “Individual with disabilities” means an individual who is under age 65 and is entitled, under the federal Social Security Act, to disability insurance benefits or is eligible for Medicare. (2) “Maintenance drug” means a drug approved by the FDA for continuous use and prescribed to treat a chronic condition for a prolonged period of time of 30 days or longer and includes insulin, an insulin syringe, and an insulin needle . (3) “Medicare part D” means the prescription drug program established under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, P.L. 108-173, including the prescription drug plans offered pursuant to the act. (4) “OVHA” means the office of Vermont health access. (5) “Pharmaceutical” means a drug that may not be dispensed unless prescribed by a health care provider as defined by subdivision 9402(8) of Title 18 acting within the scope of the provider’s license. The term excludes a drug determined less than effective under the federal Food, Drug and Cosmetics Act. (6) “Pharmacy” means a retail or institutional drug outlet licensed by the Vermont state board of pharmacy pursuant to chapter 36 of Title 26, or by an equivalent board in another state, in which pharmaceuticals are sold at retail and which has entered into a written agreement with the state to dispense pharmaceuticals in accordance with the provisions of this chapter. § 2072. GENERAL ELIGIBILITY (a) An individual shall be eligible for assistance under this subchapter if the individual: (1) is a resident of Vermont at the time of application for benefits; (2) is at least 65 years of age or is an individual with disabilities as defined in subdivision 2071(1) of this title; and 378 SATURDAY, JUNE 4, 2005 (3) has a household income, when calculated in accordance with the rules adopted for the Vermont health access plan under No. 14 of the Acts of 1995, as amended, no greater than 225 percent of the federal poverty level. (b) An individual whose pharmaceutical expenses are paid or reimbursable, either in whole or in part, by any plan of assistance or insurance, other than Title XVIII (Medicare) and Title XIX (Medicaid) of the Social Security Act, shall not be eligible for pharmaceutical assistance under this subchapter. No assistance shall be provided under this subchapter with respect to an individual pharmaceutical purchase that may be covered in whole by Title XVIII. § 2073. V-PHARM ASSISTANCE PROGRAM (a) Effective January 1, 2006, the V-Pharm program is established as a state pharmaceutical assistance program to provide supplemental pharmaceutical coverage to Medicare beneficiaries. The supplemental coverage under subsection (c) of this section shall provide only the same pharmaceutical coverage as the Medicaid program to enrolled individuals whose income is not greater than 150 percent of the federal poverty guidelines and only coverage for maintenance drugs for enrolled individuals whose income is greater than 150 percent and no greater than 225 percent of the federal poverty guidelines. (b) Any individual with income no greater than 225 percent of the federal poverty guidelines participating in Medicare part D, having secured the low income subsidy if the individual is eligible and meeting the general eligibility requirements established in section 2072 of this title shall be eligible for V - Pharm. (c) V-Pharm shall provide supplemental benefits by paying or subsidizing: (1) the actual Medicare part D premium for the standard prescription drug benefit offered by Medicare part D prescription drug programs, except for any late enrollment penalties, provided that OVHA may pay or subsidize a higher premium for a Medicare part D prescription drug plan offering expanded benefits if it is cost-effective to do so; (2) any other cost-sharing required by Medicare part D, except for co - payments for individuals eligible for Medicaid; (3) the following pharmaceuticals if they are not covered by the individual’s Medicare part D prescription drug plan: pharmaceuticals or classes of pharmaceuticals, or their medical uses, which may be excluded from coverage or otherwise restricted under Medicaid under Section 1927(d)(2) or (3) of the Social Security Act; and

JOURNAL OF THE HOUSE 379 (4) pharmaceuticals that are not covered after the individual has exhausted the Medicare part D prescription drug plan's appeal process or the prescription drug plan's transition plan approved by the Centers for Medicare and Medicaid Services, and that are deemed medically necessary by the individual's prescriber in a manner established by the director of the office of Vermont health access. The coverage decision under this subdivision shall not be subject to the exceptions process established under Medicaid. An individual may appeal to the human services board or pursue any other remedies provided by law. (d)(1) The secretary of the agency of human services shall develop by rule the manner by which an individual shall contribute the individual’s cost established in subdivision (2) of this section, except that individuals eligible for Medicaid shall only be subject to the cost-sharing requirements established by Medicaid and Medicare. The rule shall seek to minimize the possibility of inadvertent loss of eligibility for Medicare part D and V - Pharm benefits. Prior to filing the rule, the secretary shall submit the proposed rule to the health access oversight committee established in Sec. 13 of No. 14 of the Acts of 1995, as amended. The health access oversight committee shall review and advise on the agency rules and policies developed under this subsection and shall submit for consideration any recommendations to the joint legislative committee on administrative rules. (2) An individual shall contribute the following base cost-sharing amounts which shall be indexed to the increases established under 42 C.F.R. §423.104(d)(5)(iv) and then rounded to the nearest dollar amount: (A) $13.00 per month or $156.00 per year in the case of recipients whose household income is no greater than 150 percent of the federal poverty level. (B) $17.00 per month or $204.00 per year in the case of recipients whose household income is greater than 150 percent of the federal poverty level and no greater than 175 percent of the federal poverty level. (C) $35.00 per month or $420.00 per year in the case of recipients whose household income is greater than 175 percent of the federal poverty level and no greater than 225 percent of the federal poverty level. (e) In order to ensure the appropriate payment of claims, OVHA may expand the Medicare advocacy program established under chapter 67 of this title to individuals receiving benefits from the V-Pharm program. § 2074. VERMONT-Rx PROGRAM 380 SATURDAY, JUNE 4, 2005 (a) Effective January 1, 2006, Vermont-Rx is established within the office of Vermont health access and shall be the continuation of the state pharmaceutical programs in existence upon passage of this subchapter for those individuals not eligible for Medicare part D. Vermont-Rx is a pharmaceutical assistance program for individuals age 65 or older who are not eligible for Medicare and for individuals with disabilities who are receiving Social Security disability benefits and who are not eligible for Medicare. Vermont Rx may retain the current program names of VHAP Rx, VScript, and VScript Expanded if it is cost-effective to retain the current names in lieu of combining the current programs into one program. (1) The program shall be administered by OVHA which, to the extent funding permits, shall establish application, eligibility, coverage, and payment standards. In addition to the general eligibility requirements established in section 2072 of this title, an individual must not be eligible for Medicare in order to be eligible for benefits under Vermont - Rx. (2) To the extent necessary under federal law, OVHA shall administer Vermont-Rx in such a manner as to ensure that any permissible federal funding may be received to support the program. OVHA may establish a division of the Vermont-Rx program to administer federal Medicaid funds separately in accordance with a federal waiver pursuant to Section 1115 of the Social Security Act. (3) If permissible under federal law, OVHA shall use the same forms and application process for individuals to enroll in Vermont-Rx, regardless of the funding source for the program. (b) Vermont-Rx shall provide: (1) the same pharmaceutical coverage as the Medicaid program to elderly individuals and individuals with disabilities whose income is no greater than 150 percent of the federal poverty guidelines; and (2) maintenance drugs to elderly individuals and individuals with disabilities whose income is greater than 150 percent and no greater than 225 percent of the federal poverty guidelines. (c) Benefits under Vermont - Rx shall be subject to payment of a premium amount by the recipient in accordance with the provisions of this section. (1) In the case of recipients whose household income is no greater than 150 percent of the federal poverty level, such premium shall be $13.00 per month.

JOURNAL OF THE HOUSE 381 (2) In the case of recipients whose household income is greater than 150 percent of the federal poverty level and no greater than 175 percent of the federal poverty level, the premium shall be $17.00 per month. (3) In the case of recipients whose household income is greater than 175 percent of the federal poverty level and no greater than 225 percent of the federal poverty level, the premium shall be $35.00 per month. (d) Any manufacturer of pharmaceuticals purchased by individuals receiving assistance from Vermont-Rx established under this section shall pay to OVHA, as a condition of participation in the program, a rebate in an amount at least as favorable as the rebate paid to OVHA in connection with the Medicaid program. (e) Under Vermont-Rx, a pharmaceutical may be dispensed to an eligible recipient provided such dispensing is pursuant to and in accordance with any contractual arrangement that OVHA may enter into or approve for the group discount purchase of pharmaceuticals. When a person or business located in Vermont and employing citizens of this state has submitted a bid for the group discount purchase of pharmaceuticals and has not been selected, the director of OVHA shall record the reason for nonselection. The director’s report shall be a public record available to any interested person. All bids or quotations shall be kept on file in the director’s office and open to public inspection. § 2075. ASSISTANCE IN ENROLLING IN MEDICARE PART D The agency of human services may act, if permissible under federal law, as an individual’s agent to enroll the individual in a Medicare part D prescription drug plan and a low income subsidy if the individual has not enrolled prior to the application for V - Pharm. The agency shall provide applicants for V-Pharm with information on Medicare part D and the low income subsidy if applicable, and on how to obtain assistance in enrolling in Medicare part D or the subsidy. § 2076. OVER - THE - COUNTER AND GENERIC MEDICATIONS (a) All public pharmaceutical assistance programs shall provide coverage for those over - the - counter pharmaceuticals on the preferred drug list developed under section 1998 of this title, provided the pharmaceuticals are authorized as part of the medical treatment of a specific disease or condition, and they are a less costly, medically appropriate substitute for currently covered pharmaceuticals. (b) All public pharmaceutical assistance programs shall comply with the provisions regarding generic drugs established in chapter 91 of Title 18. 382 SATURDAY, JUNE 4, 2005 (c) OVHA shall seek any waivers of federal law, rule, or regulation necessary to implement the provisions of this section. § 2077. ADMINISTRATION (a) The programs established under this subchapter shall be designed to provide maximum access to program participants, to incorporate mechanisms that are easily understood and require minimum effort for applicants and health care providers, and to promote quality, efficiency, and effectiveness through cost controls and utilization review. OVHA may contract with a fiscal agent for the purpose of processing claims and performing related functions required in the administration of the pharmaceutical programs established under this subchapter. (b) Upon determining that an applicant is eligible under this subchapter, OVHA shall issue an identification card to the applicant. (c) A pharmacy which dispenses a pharmaceutical to an individual eligible for a pharmaceutical program established under this subchapter shall collect payment for the pharmaceutical from OVHA. § 2078. EDUCATION AND OUTREACH The department of aging and independent living shall conduct ongoing education and outreach to inform elderly Vermonters and Vermonters with disabilities of the benefits they may be entitled to pursuant to this subchapter, make available information concerning pharmaceutical assistance programs, and minimize any confusion and duplication of pharmaceutical coverage resulting from a multiplicity of pharmaceutical programs. § 2079. CONSTRUCTION The benefits provided by the pharmaceutical assistance programs established under this subchapter constitute medical services for purposes of section 141 of this title. § 2080. VERMONT PRESCRIPTION DRUG PRICING AND CONSUMER PROTECTION PROGRAM The secretary of the agency of human services shall administer this subchapter in conformity with the pharmacy best practices and cost control program established under subchapter 5 of this chapter to enable the citizens of Vermont to purchase necessary prescription pharmaceuticals at the lowest possible price, to ensure access to such pharmaceuticals, and to support Vermont pharmacies, consistent with the time frames, standards, and procedures established by the general assembly. § 2081. RULES AND LEGISLATIVE OVERSIGHT

JOURNAL OF THE HOUSE 383 (a) The agency of human services shall adopt rules necessary to implement and administer the provisions of this subchapter, including standards and schedules establishing coverage and exclusion of pharmaceuticals and maximum quantities of pharmaceuticals to be dispensed, and to comply with the requirements of the Medicare Modernization Act. The agency of human services shall submit the proposed rule to the health access oversight committee established in Sec. 13 of No. 14 of the Acts of 1995, as amended. The health access oversight committee shall review and advise on the agency rules and policies developed under this subsection and shall submit for consideration any recommendations to the joint legislative committee on administrative rules. (b) OVHA shall report on the status of the pharmaceutical assistance programs established by this subchapter to the health access oversight committee in accordance with Sec. 13 of No. 14 of the Acts of 1995, as amended. Sec. 315. FEDERAL APPROVAL; V-PHARM PROGRAM (a) If required by federal law, the agency of human services shall apply to the Centers for Medicare and Medicaid Services to establish the V - Pharm program established in Sec. 314 of this act as a state pharmaceutical assistance program eligible to provide supplemental pharmaceutical benefits to Medicare beneficiaries and shall apply for any necessary Medicaid waiver in order to secure federal contributions. If allowable under federal law, the agency of human services shall continue to operate all or part of Vermont-Rx under a Medicaid waiver in order to secure federal contributions. Sec. 316. TRANSITIONAL PROVISIONS (a) The programs established under subchapter 8 of chapter 19 of Title 33 shall be the successor to and continuation of the VHAP-Pharmacy, VScript, and VScript Expanded programs. (b) The office of Vermont health access (OVHA) shall develop necessary rules to ensure that individuals do not lose coverage for necessary pharmaceuticals at the beginning of coverage under Medicare part D if the individual: (1) has applied for and attempted to enroll in Medicare part D and has not received coverage for the needed pharmaceutical due to an operational problem with Medicare part D; or (2) has otherwise not received coverage for the needed pharmaceutical; provided such failure to receive coverage is due to good cause shown and 384 SATURDAY, JUNE 4, 2005 presents a hardship to the individual, as good cause and hardship are defined by OVHA. (c)(1) The commissioner of aging and independent living and the director of the office of Vermont health access shall continue to convene the working group of individuals with disabilities, elderly individuals, advocates, and providers established under Sec. 128j of No. 122 of the Acts of the 2003 Adj. Sess. (2004). The working group shall meet monthly or more frequently as needed and shall: (A) revise as necessary and implement a plan which at a minimum shall include outreach, education, and assistance to Vermont Medicare beneficiaries in order to minimize confusion and duplication of coverage caused by the introduction of the new, federally mandated Medicare part D pharmacy program. The plan shall focus on those individuals who may also be eligible for another program which provides supplemental pharmacy benefits, including Medicaid, VHAP - Pharmacy, VScript, VScript Expanded, Healthy Vermonters, or the programs established under this act; (B) plan for the implementation of Medicare part D in the state beginning January 1, 2006. Such planning shall include both monitoring and advocacy on federal policy as it relates to Vermont state pharmaceutical assistance programs with a goal of minimizing any reduction of assistance to these beneficiaries. The plan shall analyze fully the potential gains and losses to Vermont and to its state pharmaceutical assistance beneficiaries resulting from Medicare part D and the balance of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, P.L. 108-173, and shall provide ongoing cost projections and identify sources of funding for holding these beneficiaries harmless from pharmacy benefit cuts once Medicare part D is implemented; and (C) report as requested to the house committee on human services, the senate committee on health and welfare, or, outside the legislative session and on November 1, 2005, to the health access oversight committee. (2) For the purpose of this section, “holding harmless” means the payment of premiums, of cost-sharing, and for pharmaceuticals in drug classes not covered by Medicare part D in an amount sufficient to ensure that Vermonters enrolled in the state’s pharmaceutical programs prior to the implementation of Medicare part D do not have an increased financial burden and have pharmaceutical benefits therapeutically comparable to those offered by the state pharmaceutical programs prior to implementation of Medicare part D.

JOURNAL OF THE HOUSE 385 (d) The agency of human services shall report the number of beneficiaries of VHAP-Pharmacy, VScript, and VScript-Expanded as of January 1, 2006 who did not enroll in V-Pharm by December 31, 2005 or who were ineligible for V-Pharm for failure to enroll in Medicare part D or the Medicare part D low income subsidy. The agency shall report to the house committees on human services and on appropriations and the senate committees on health and welfare and on appropriations not later than February 15, 2006. Sec. 317. MEDICARE PART D; PHARMACEUTICAL BENEFITS FOR NURSING HOME RESIDENTS (a) The agency of human services shall make such rules as are necessary to ensure that residents in nursing homes are held harmless from the transition to the Medicare part D pharmaceutical program and by the consolidation of the state pharmaceutical programs under this act. For the purpose of this section, “held harmless” means that the state shall ensure that Vermonters enrolled in the state’s pharmaceutical programs prior to the implementation of Medicare part D do not have an increased financial burden and have pharmaceutical benefits therapeutically comparable to those offered by the state pharmaceutical programs prior to implementation of Medicare part D. Sec. 318. MEDICARE; CHANGES TO ASSET AND INCOME RULES (a) Subject to any required federal approval, the agency of human services shall eliminate the asset requirements and raise the income limits for individuals who qualify as qualified Medicare beneficiaries (QMB), specified low income Medicare beneficiaries (SLMB), and qualifying individuals (QI) in order to maximize the eligibility of these individuals for the low income subsidy program under Medicare part D, provided that the agency finds that the elimination of the asset test, or the increase in the income limits, or both for each program will be, at a minimum, cost neutral to the state in that the costs of the resulting increased Medicaid participation would not exceed the benefits from greater participation in the low income subsidy program as it relates to the Medicare part D program and any decrease in the administrative savings from simplifying eligibility. The agency shall evaluate the cost neutrality of each eligibility requirement for each program separately to determine which changes to which programs meet this standard. Sec. 319. MEDICARE PART D EMPLOYER SUBSIDY (a) The commissioner of human resources shall investigate and evaluate the costs and benefits of the state’s electing to receive the employer subsidy under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, P.L. 108-173 and, upon expiration of the current collective bargaining agreement, the state’s modifying the state employee and retiree pharmaceutical 386 SATURDAY, JUNE 4, 2005 benefits to wrap around the Medicare part D prescription drug program. The commissioner shall consider the benefits and costs to state retirees, taxpayers, and beneficiaries of the state pharmaceutical programs. The commissioner shall report on the investigation and evaluation to the general assembly no later than January 15, 2006. The report shall include information regarding the current employee and retiree pharmaceutical benefits, the cost-sharing requirements for employees, retirees, and the state, the projected subsidy to be received, and any other information considered by the commissioner in the evaluation. (b) The state treasurer shall report to the general assembly no later than January 15, 2006 regarding the amount of any expected employer subsidy to be received by the state under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, P.L. 108-173 . (c) The state treasurer, in consultation with the Vermont state teachers’ retirement board, shall investigate and evaluate the costs and benefits of electing the employer subsidy under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, P.L. 108-173 and the modification of the teacher retiree pharmaceutical benefits to wrap around the Medicare part D prescription drug program. The treasurer shall consider the benefits and costs to teacher retirees, taxpayers, and beneficiaries of the state pharmaceutical programs. The treasurer shall report on the investigation and evaluation to the general assembly no later than January 15, 2006. The report shall include information regarding the current teacher retiree pharmaceutical benefits, the cost-sharing requirements for retirees, the subsidy to be received, and any other information considered by the treasurer in the evaluation. The treasurer shall report to the general assembly no later than January 15, 2006 with the amount of the subsidy to be received under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, P.L. 108-173 . Sec. 320. STATUTORY REVISION (a) The legislative council shall make such technical revisions to the Vermont Statutes Annotated to reflect the consolidation of the state pharmaceutical programs and the creation of V-Pharm, including revisions to the names of programs and to statutory citations. Sec. 321. REPEAL (a) Subchapter 4 of chapter 19 of Title 33 is repealed as of January 1, 2006. Any other provisions in session law enacted prior to this act which established premiums or other cost sharing for state pharmaceutical programs are repealed by the codification of cost sharing in this act. Sec. 322. EFFECTIVE DATES

JOURNAL OF THE HOUSE 387 (a) This section and Secs. 109, 132(a), 147a, 150(b), 154a, 162a, 165a, 173a, 193, 205c, 250(c), 255, 263, 272, 277c, 277d, 277e, 277f, 279, 280, 302, 303, 307, 315, 317, and 318 of this act shall take effect on passage. (b) Sec. 31(b) shall take effect July 10, 2005. (c) Sec. 169a shall take effect July 1, 2006. Pending the question, Shall the House adopt the report of the committee of conference? Rep. Partridge of Windham demanded the Yeas and Nays, which demand was sustained by the Constitutional number. The Clerk proceeded to call the roll and the question, Shall the House adopt the report of the committee of conference? was decided in the affirmative. Yeas, 95. Nays, 36. Those who voted in the affirmative are: Allaire of Rutland City Grad of Moretown McLaughlin of Royalton Ancel of Calais Green of Berlin Milkey of Brattleboro Aswad of Burlington Haas of Rochester Miller of Shaftsbury Atkins of Winooski Head of S. Burlington Minter of Waterbury Audette of S. Burlington Heath of Westford Monti of Barre City Barnard of Richmond Hosford of Waitsfield Mook of Bennington Bohi of Hartford Howard of Rutland City Nease of Johnson Bostic of St. Johnsbury Howrigan of Fairfield Nitka of Ludlow Botzow of Pownal Hunt of Essex Nuovo of Middlebury Branagan of Georgia Hutchinson of Randolph Obuchowski of Rockingham Brooks of Montpelier Jerman of Essex O'Donnell of Vernon Chen of Mendon Jewett of Ripton Orr of Charlotte Clarkson of Woodstock Johnson of South Hero Otterman of Topsham Condon of Colchester Kainen of Hartford Partridge of Windham Copeland-Hanzas of Keenan of St. Albans City Perry of Richford Bradford Keogh of Burlington Peterson of Williston Corcoran of Bennington Kiss of Burlington Potter of Clarendon Cross of Winooski Kitzmiller of Montpelier Pugh of S. Burlington Darrow of Dummerston Klein of East Montpelier Randall of Troy Deen of Westminster Kupersmith of S. Burlington Reese of Pomfret Donahue of Northfield Larson of Burlington Rodgers of Glover Donovan of Burlington LaVoie of Swanton Rusten of Halifax Dostis of Waterbury Leriche of Hardwick Seibert of Norwich Dowland of Holland Lippert of Hinesburg Severance of Colchester Dunsmore of Georgia Lorber of Burlington Shand of Weathersfield Edwards of Brattleboro Maier of Middlebury Sharpe of Bristol Emmons of Springfield Malcolm of Pawlet Smith of Morristown Evans of Essex Marek of Newfane Sweaney of Windsor Fallar of Tinmouth Martin of Springfield Tracy of Burlington Fisher of Lincoln Martin of Wolcott Trombley of Grand Isle Frank of Underhill McCullough of Williston Westman of Cambridge French of Randolph McFaun of Barre Town Zuckerman of Burlington 388 SATURDAY, JUNE 4, 2005 Those who voted in the negative are: Adams of Hartland Hudson of Lyndon Morley of Barton Allard of St. Albans Town Kennedy of Chelsea Morrissey of Bennington Baker of West Rutland Kilmartin of Newport City Niquette of Colchester Bartlett of Dover Komline of Dorset Parent of St. Albans City Canfield of Fair Haven Krawczyk of Bennington Peaslee of Guildhall Clark of St. Johnsbury Larrabee of Danville Schiavone of Shelburne Clark of Vergennes Lawrence of Lyndon Shaw of Derby Endres of Milton Livingston of Manchester Smith of New Haven Errecart of Shelburne Louras of Rutland City Sunderland of Rutland Town Helm of Castleton Marcotte of Coventry Valliere of Barre City Houston of Ferrisburgh Marron of Stowe Winters of Swanton Hube of Londonderry McAllister of Highgate Young of Orwell Those members absent with leave of the House and not voting are: Brennan of Colchester Koch of Barre Town Myers of Essex DePoy of Rutland City Larocque of Barnet Pellett of Chester Donaghy of Poultney Masland of Thetford Pillsbury of Brattleboro Flory of Pittsford Metzger of Milton Winters of Williamstown Gervais of Enosburg Miller of Elmore Wood of Brandon Johnson of Canaan Molloy of Arlington Wright of Burlington

Rep. Cross of Winooski explained his vote as follows: I have voted yes on this budget bill notwithstanding the fact that section 178a became a part of it without thoughtful and perhaps heated debate on this floor. That void is simply one more example of the democratic process gone haywire. I do want to thank the Appropriations Committee for its very careful work developing a state expenditure. Plan. I also want to thank the House committee on Appropriations and the House Committee on Government Operations for refusing to be drawn into the labor dispute between the full time faculty and the Vermont State College system. It is unfortunate that this wise and farsighted decision was not shared by all. Clearly, a very limited knowledge of the collective bargaining process has today traded a short term gain for 274 full time faculty members for a long- term loss for all 2600 part-time and full-time employees of the State College System and for the 12,000 tuition paying students who attend the colleges, including over 9500 Vermonters, about 65% of whom are first generation college attendees. Rep. Errecart of Shelburne explained her vote as follows: “Madam Speaker:

JOURNAL OF THE HOUSE 389 I cannot support a bill that makes more demands on the Education Fund. Our constituents, school boards and selectboards are facing a property tax crisis. This bill makes the crisis worse.” Rep. Marron of Stowe explained his vote as follows: “Madam Speaker: As a member of the conference committee on H. 516, I think the committee did an excellent job in addressing the needs of Vermonters, including a 3.5% increase for higher education. However, I was unable to sign the conference committee report because of the legislature ‘injecting’ itself into the collective bargaining process at the Vermont State Colleges.” Rep. Kilmartin of Newport City explained his vote as follows: “Madam Speaker: It’s easy to find objectionable parts in a budget of over 1.2 billion dollars, but my no vote is not cast easily or without careful and principled thought. My first objection is to Section 162b. Early Childhood Education Services. By giving exclusive jurisdiction over our children ages 3 to 5 to school districts and supervisory districts/unions, we act immorally and unconstitutionally by making the State and its political subdivisions the “super parent,” and giving the school district the unbridled power to indoctrinate our most innocent, vulnerable, and impressionable minds. There is a very simple answer: trust our citizen, taxpaying parents with vouchers to be used for qualified early education, private or public. Vouchers promote liberty, diversity, and health competition. My second principled objection is to Section 178a. Vermont State Colleges: Collective Bargaining Agreement. We shirk our constitutional and statutory responsibility by sending the “early retirement decision” to mandatory arbitration, an act of supreme legislative cowardice. If we had the courage to do our duty, we would take a vote to either keep the current early retirement program in force and effect or sustain the Labor Relations Board. Finally, Sec. 178a. should have been a separate bill and not hidden in the budget as childish political gamesmanship.” Rep. Sunderland of Rutland Town explained his vote as follows: “Madam Speaker: We’re not getting our legislative work done on time and on budget. In this bill, we’re trying to take on more work that we can’t do well. We cannot micromanage labor management disputes at the Vermont State Colleges and expect the Colleges to provide an affordable education to Vermont students. 390 SATURDAY, JUNE 4, 2005 Rules Suspended; Report of Committee of Conference Adopted H. 521 Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland Town, the rules were suspended and House bill, entitled An act relating to miscellaneous tax; Was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the House accede to the Senate’s Second, Third, Fourth, Sixth, Seventh and Eighth proposals of amendment; and that the Senate recede from its First, Fifth, and Ninth proposals of amendment and that the bill be further amended as follows: First: By striking Sec. 2 and subsection 11(c), and inserting new Secs. 2, 2a, and 2b and subsection 11(c) to read: Sec. 2. 32 V.S.A. § 9741(38) is amended to read: Retail sales and use of the following shall be exempt from the tax on retail sales imposed under section 9771 of this title and the use tax imposed under section 9773 of this title. * * * (38) Tax on the purchase sale or use of a tracked vehicle shall not exceed $900.00 $1,100.00. Sec. 2a. STUDY ON TRACKED VEHICLE SALES TAX CAP The commissioner of taxes shall study the advisability of indexing the tracked vehicle sales and use tax cap for inflation, and shall report his recommendation to the House Committee on Ways and Means and Senate Committee on Finance by January 15, 2006. Sec. 2b. 32 V.S.A. § 9741(38) is amended to read: (38) Tax on the sale or use of a tracked vehicle shall not exceed $1,100.00 adjusted as follows: As of July 1 of each even - numbered year, the commissioner shall adjust the most recent unrounded cap amount by the cumulative inflation index for the prior two calendar years under the Consumer

JOURNAL OF THE HOUSE 391 Price Index for Urban Consumer All Items, and round that amount to the nearest ten dollars, and shall publish this rounded amount as the new cap. Sec. 11. EFFECTIVE DATES (c) Sec. 2 of this act ($1,100.00 cap on sales tax for tracked vehicles) shall apply to sales on and after July 1, 2005; Sec. 2a of this act (tracked vehicle tax cap study) shall take effect upon passage; Sec. 2b of this act (inflation index applied to tracked vehicle tax cap) shall take effect July 1, 2006 and the first adjustment of the cap for inflation shall be July 1, 2006. Second: By striking Secs. 9 and 10 and subsection 11(j). Third: By adding Secs. 26 and 27 to read: Sec. 26. 32 V.S.A. § 312 is added to read: § 312. TAX EXPENDITURE REPORT (a) For purposes of this section, “tax expenditure” shall mean the actual or estimated loss in tax revenue resulting from any exemption, exclusion, deduction, or credit applicable to the tax. (b) Tax expenditure reports. Biennially, as part of the budget process, beginning January 15, 2009, the department of taxes shall file with the House Committees on Ways and Means and Appropriations and the Senate Committees on Finance and Appropriations a report on tax expenditures in the personal and corporate income, sales and use, and meals and rooms tax returns, and education property tax grand lists and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates. The report shall include, for each tax expenditure, the following information: (1) A description of the tax expenditure. (2) The most recent fiscal information available on the direct cost of the tax expenditure in the past two years. (3) The date of enactment of the expenditure. (4) A description of and estimate of the number of taxpayers directly benefiting from the expenditure provision. Sec. 27. TRANSITION REPORTS (a) The department of taxes shall file with the House Committees on Ways and Means and Appropriations, and with the Senate Committees on Finance and Appropriations reports on the following: 392 SATURDAY, JUNE 4, 2005 (1) By January 15, 2006, tax expenditures reported under the personal and corporate income tax with the information required by 32 V.S.A. § 312 for the most recent fiscal year available and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates. (2) By January 15, 2007, tax expenditures reported under the personal and corporate income tax and sales and use tax, with the information required by 32 V.S.A. § 312 for the most recent fiscal year available and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates. (3) By January 15, 2008, tax expenditures reported under the personal and corporate income tax, sales and use tax, meals and rooms tax, and education property tax, with the information required by 32 V.S.A. § 312 for the most recent fiscal year available and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates. (b) For each of the joint fiscal committee’s September 2005, 2006 and 2007 meetings, the joint fiscal office and the tax department shall file a joint report identifying specific tax expenditures or categories of expenditures in addition to those reported to the tax department for which revenue estimates shall be included in the next report or subsequent reports filed with the legislative committees. Committee on the Part of Committee on the Part of The Senate The House Sen. Ann Cummings Rep. David Allaire Sen. Hull Maynard Rep. Robert Rusten Pending the question, Shall the House adopt the report of the committee of conference? Rep. Livingston of Manchester demanded the Yeas and Nays, which demand was sustained by the Constitutional number. The Clerk proceeded to call the roll and the question, Shall the House adopt the report of the committee of conference? was decided in the affirmative. Yeas, 88. Nays, 32. Those who voted in the affirmative are: Adams of Hartland Barnard of Richmond Chen of Mendon Allaire of Rutland City Bohi of Hartford Clarkson of Woodstock Allard of St. Albans Town Bostic of St. Johnsbury Copeland-Hanzas of Ancel of Calais Botzow of Pownal Bradford Aswad of Burlington Branagan of Georgia Cross of Winooski Atkins of Winooski Brooks of Montpelier Darrow of Dummerston

JOURNAL OF THE HOUSE 393 Deen of Westminster Kiss of Burlington Niquette of Colchester Donahue of Northfield Kitzmiller of Montpelier Nitka of Ludlow Donovan of Burlington Klein of East Montpelier Nuovo of Middlebury Dostis of Waterbury Larson of Burlington Obuchowski of Rockingham Dowland of Holland LaVoie of Swanton Orr of Charlotte Dunsmore of Georgia Leriche of Hardwick Otterman of Topsham Edwards of Brattleboro Lorber of Burlington Partridge of Windham Emmons of Springfield Louras of Rutland City Perry of Richford Endres of Milton Maier of Middlebury Pugh of S. Burlington Evans of Essex Malcolm of Pawlet Randall of Troy Fallar of Tinmouth Marcotte of Coventry Reese of Pomfret Fisher of Lincoln Marek of Newfane Rodgers of Glover Frank of Underhill Marron of Stowe Rusten of Halifax French of Randolph Martin of Springfield Seibert of Norwich Green of Berlin Martin of Wolcott Severance of Colchester Haas of Rochester McFaun of Barre Town Shand of Weathersfield Head of S. Burlington McLaughlin of Royalton Smith of New Haven Heath of Westford Milkey of Brattleboro Smith of Morristown Hosford of Waitsfield Miller of Shaftsbury Sweaney of Windsor Howard of Rutland City Minter of Waterbury Tracy of Burlington Howrigan of Fairfield Monti of Barre City Trombley of Grand Isle Hutchinson of Randolph Mook of Bennington Westman of Cambridge Jewett of Ripton Morley of Barton Zuckerman of Burlington Johnson of South Hero Nease of Johnson Those who voted in the negative are: Audette of S. Burlington Hunt of Essex Morrissey of Bennington Baker of West Rutland Jerman of Essex Parent of St. Albans City Bartlett of Dover Kennedy of Chelsea Peaslee of Guildhall Canfield of Fair Haven Keogh of Burlington Peterson of Williston Clark of St. Johnsbury Kilmartin of Newport City Potter of Clarendon Clark of Vergennes Komline of Dorset Sharpe of Bristol Corcoran of Bennington Larrabee of Danville Shaw of Derby Errecart of Shelburne Lawrence of Lyndon Sunderland of Rutland Town Houston of Ferrisburgh Livingston of Manchester Valliere of Barre City Hube of Londonderry McAllister of Highgate Winters of Swanton Hudson of Lyndon McCullough of Williston Those members absent with leave of the House and not voting are: Brennan of Colchester Keenan of St. Albans City Myers of Essex Condon of Colchester Koch of Barre Town O'Donnell of Vernon DePoy of Rutland City Krawczyk of Bennington Pellett of Chester Donaghy of Poultney Kupersmith of S. Burlington Pillsbury of Brattleboro Flory of Pittsford Larocque of Barnet Schiavone of Shelburne Gervais of Enosburg Lippert of Hinesburg Winters of Williamstown Grad of Moretown Masland of Thetford Wood of Brandon Helm of Castleton Metzger of Milton Wright of Burlington Johnson of Canaan Miller of Elmore Young of Orwell Kainen of Hartford Molloy of Arlington 394 SATURDAY, JUNE 4, 2005

Rep. Livingston of Manchester explained her vote as follows: “Madam Speaker: Local option taxes were made available through Act 60 to those townie who bear an unusual burden of resort and retail traffic to help with municipal expenses. These towns not only provide the bulk of consumption tax revenues to the state, but also support other towns, like Montpelier, through the pilot programs. This bill should be providing for an expansion of that option, and it is only an option, to all towns, as it is a dependable resource in Vermont tax policy”

Rules Suspended; Action Ordered Messaged to Senate Forthwith and Bill Delivered to the Governor Forthwith On motion of Rep. Sunderland of Rutland Town, the rules were suspended and action on the bill was ordered messaged to the Senate forthwith and the bill delivered to the Governor forthwith. H. 516 An act relating to making appropriations for the support of government; H. 521 An act relating to miscellaneous tax; H. 540 An act relating to agricultural and forest land use value program; Rules Suspended; Report of Committee of Conference Adopted Rules Suspended and Bill Ordered to the Senate Forthwith S. 156 On motion of Rep. Sunderland of Rutland Town, the rules were suspended and House bill, entitled An act relating to corrections; Appearing on the Calendar for notice, was taken up for immediate consideration.

JOURNAL OF THE HOUSE 395 The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and considered the same and recommends that the bill be amended by striking all after the enacting clause and inserting in lieu thereof the following: * * * Findings * * * Sec. 1. FINDINGS The general assembly finds that: (1) Even if the general assembly takes no action to reduce prison overcrowding by releasing additional offenders, thousands of inmates leave Vermont correctional facilities and reenter the community every year. For example, during FY04, approximately 600,000 individuals were released from prisons in the United States and 10,000,000 were released from jails. During that same period, Vermont released 4,875 incarcerated individuals back into the community. (2) It is crucial that decisions of the legislative, judicial, and executive branches aggressively advance the mission of the department of corrections to work with and gain the support of community members to achieve the successful reintegration of offenders into the community. (3) Although the total incidents of reported crime in Vermont have declined steadily since the early 1990s, the overall level of serious crime has remained fairly constant. Drug-related offenses have quintupled during the last five years. (4) The number of women arrested in Vermont increased 59 percent in seven years, rising from 3,774 arrests in 1995 to 5,966 arrests in 2002. The number of women incarcerated in Vermont has increased from 29 inmates in 1995 to more than 140 today, most of whom are incarcerated for nonviolent substance-abuse-related offenses. (5) One of every five men in Vermont between the ages of 21 and 23 has been convicted of a criminal offense and sentenced to some form of supervision by the commissioner of corrections. (6) The rate at which Vermont incarcerated individuals convicted of crimes more than doubled in a ten-year period, rising from a daily average of 989 in FY95 to a daily average of 1,992 in FY04. In one generation, the 396 SATURDAY, JUNE 4, 2005 average number of individuals incarcerated on any one day rose from 559 (in FY85) to 1,992 (in FY04). (7) The cost of housing and supervising incarcerated individuals in Vermont more than doubled during the same period, increasing from $44 million in FY95 to $98 million in FY04. The FY04 figure was more than 6 - 1/2 times the cost of housing and supervising the incarcerated population in FY85, when that expense was $15 million. (8) The growth in available corrections beds has not kept pace with the growth of Vermont’s sentenced and detained population, and the state has been forced to transfer inmates to facilities outside Vermont. Despite the addition of 350 corrections beds at the newly-opened Southern State Correctional Facility in Springfield, an average of 429 offenders was housed in an out - of - state correctional facility on any given day between July 1, 2004 and March 15, 2005. (9) The number of offenders released to the community under the supervision of the commissioner of corrections has doubled in the last ten years. On a typical day in 2004, 12,372 Vermonters were living in the community under some form of supervision of the commissioner. Of that number, 849 individuals were on conditional reentry status, 888 were on preapproved furlough, 795 had been released on parole, 73 had received a supervised community sentence, and 9,767 were on probation. (10) The number of offenders convicted of violent felonies (such as sexual assault, domestic assault, aggravated assault, and other felonies against persons) who are supervised in the community has increased by 33 percent during the last eight years, rising from 984 in FY96 to 1,317 in FY04. (11) The number of correctional officers supervising offenders in the community has not kept pace with the growth in supervisees, increasing only 67 percent since 1993. (12) The number of individuals detained pending resolution of criminal charges increased by 300 percent between FY93 and FY03. As of June 30, 2004, detainees represented 382 of the 2,033 individuals incarcerated in and out of state. Pretrial detainees occupy 24 percent of the approximately 1,600 corrections beds available in state. (13) On a typical day in 2004, approximately 130 inmates who had served their minimum sentence and were otherwise eligible for release into the community remained incarcerated because of their inability to obtain suitable housing, resulting in an annual cost of at least $2,275,000 to house other offenders in out-of-state facilities.

JOURNAL OF THE HOUSE 397 (14) In its report dated August 19, 2004, the governor’s commission on corrections overcrowding determined that the above trends, if continued, will: (A) Likely cause the state to increase its reliance on out-of-state prison beds or to build more correctional facilities within Vermont. (B) Result in unsustainable spending to provide adequate space for and supervision of offenders; (C) Compromise the state’s ability to provide humane and enlightened services and ensure safe and secure correctional facilities and communities. (15) The total capital costs of siting the Southern State Correctional Facility in Springfield were $34,600,000.00. (16) In its August 19, 2004 report, the governor’s commission on corrections overcrowding also determined that the overcrowded conditions in state correctional facilities and the increased use of the facilities for pretrial detainees have: (A) Compromised the department’s statutory mission. (B) Increased personal danger to inmates and staff. (C) Caused unacceptable hardship for offenders and families of offenders who are in out-of-state institutions. (D) Resulted in excessive and out-of-control cost at the expense of other worthy governmental efforts. (E) Disrupted the reasonable and well-designed program of treatment by the thoughtful integration of offenders into the community upon completion of their sentences. (F) Resulted in unhealthy and unwholesome practices in the correctional facilities. (G) Damaged staff morale. (H) Contributed to the death of inmates. (I) Resulted in public dissatisfaction and decreased credibility for the department of corrections and the entire criminal justice system. (J) Prohibited a range of palliative programs from being applied efficiently or effectively, which results in the loss of important opportunities to assist inmates to achieve necessary personal change and which, in turn, adds to the already remarkable cost of the corrections system. 398 SATURDAY, JUNE 4, 2005 (17) In its report dated August 19, 2004, the governor’s commission on corrections overcrowding recommended a range of solutions to reduce overcrowding, including the provision of grants to communities and private organizations to help establish supervised transitional housing and the creation of alternatives to incarceration for many of the state’s female offenders. (18) It is equally imperative both that the three regional facilities be used for their intended function as reintegration facilities for offenders preparing for imminent reentry into the community and that prisoners housed in out-of-state facilities be brought home to Vermont. (19) In its August 19, 2004 report, the governor’s commission on corrections overcrowding cogently stated: “The problem [in corrections] has grown over two decades and has greatly accelerated in the last 4 years. The problem is now to the point where solutions required must be bold in order to have a noticeable impact. Marginal and incremental changes are welcome and will over time help, but they must be anchored by actions that are significant enough that change is real and substantial.” * * * Good Time * * * Sec. 2. REDUCTIONS OF TERM (a) Retrospective award. Each individual in the custody of the commissioner of corrections who is serving a term of incarceration on July 1, 2005 shall be awarded all reductions in the minimum and maximum terms to which that inmate is entitled as of the end of the day on June 30, 2005, consistent with those provisions of 28 V.S.A. § 811 that were in force when the inmate’s crime was committed. (b) Prospective award. Notwithstanding any provision of law to the contrary, each individual in the custody of the commissioner of corrections who is serving a term of incarceration for a crime committed on or before June 30, 2005, shall, for purposes of calculating reductions in that inmate’s term of confinement subsequent to June 30, 2005, prospectively be awarded, in total, all reductions in the minimum and maximum terms of confinement to which that inmate would potentially be entitled in the future under the system that was in place at the time his or her crime was committed; provided that this subsection shall not apply to reductions pursuant to 28 V.S.A. § 811(d) (work camps) as that subsection appears before July 1, 2005, which shall be awarded at the time the reductions are earned under the system that was in place at the time the crime was committed. (c) The department shall apply the provisions of subsections (a) and (b) of this section as appropriate to persons ultimately convicted of a crime committed before July 1, 2005 at the time of sentencing.

JOURNAL OF THE HOUSE 399 (d) Pursuant to 13 V.S.A. § 5305, the department shall notify victims of the impact this section has on the minimum and maximum terms of incarceration for all pertinent inmates. The department shall also provide notice to each inmate regarding the impact this section has on that inmate’s minimum and maximum terms of incarceration. Sec. 3. REPEAL 28 V.S.A. § 811 (reduction in term for good behavior) is repealed. Sec. 4. 28 V.S.A. § 811 is added to read: § 811. WORK CAMPS; REDUCTION OF TERM A reduction of up to 30 days in the minimum and maximum terms of confinement may be made in accordance with a policy established by the director of a work camp in which an inmate is confined for each month during which the inmate demonstrates, beyond the level normally expected, consistent program performance or meritorious work performance. Sec. 5. WORK CAMP; GOOD TIME (a) Except as provided in subsection (b) of this section, for each inmate serving a term of incarceration in a work camp on or after July 1, 2005 who has been convicted of a crime committed between July 1, 2000 and June 30, 2005, a reduction of up to 30 days in the minimum term of confinement and up to 15 days in the maximum term of confinement may be made in accordance with a policy established by the director of the work camp in which the inmate is confined for each month during which the inmate demonstrates, beyond the level normally expected, consistent high program performance or meritorious work performance. (b) Subsection (a) of this section shall not apply to any inmate who receives a prospective award, in total, of all reductions to which that inmate would potentially be entitled in the future pursuant to Sec. 2(b) of this act, who is subsequently transferred to a work camp. * * * Furlough * * * Sec. 6. 28 V.S.A. § 808 is amended to read: § 808. FURLOUGHS GRANTED TO OFFENDERS AND INMATES; MEDICAL FURLOUGH (a) The department may extend the limits of the place of confinement of an inmate at any correctional facility if the inmate agrees to comply with such conditions of supervision the department, in its sole discretion, deems 400 SATURDAY, JUNE 4, 2005 appropriate for that inmate’s furlough. The department may authorize furlough for any of the following reasons: * * * (7) When recommended by the department and ordered by a court. The inmate may be sentenced to serve a term of imprisonment but placed by a court on furlough to participate in such programs administered by the department in the community that reduce the offender’s risk to reoffend or that provide reparation to the community in the form of supervised work activities ; or (8) To prepare for reentry into the community. (A) Any offender sentenced to incarceration may be furloughed to the community up to 90 days prior to completion of the minimum sentence, at the commissioner’s discretion and in accordance with rules adopted pursuant to subdivision(C) of this subdivision (8), provided that an offender sentenced to a minimum term of fewer than 180 days shall not be eligible for furlough under this subdivision until the offender has served at least one-half of his or her minimum term of incarceration. (B) Except as provided in subdivision (D) of this subdivision (8), any offender sentenced to incarceration is eligible to earn five days toward reintegration furlough, to be applied prior to the expiration of the offender’s minimum term, for each month served in the correctional facility during which the inmate has complied with the case plan prepared pursuant to subsection 1(b) of this title and has obeyed all rules and regulations of the facility. Days shall be awarded only if the commissioner determines, in his or her sole discretion, that they have been earned in accordance with rules adopted by the department pursuant to subdivision (C) of this subdivision (8) and shall in no event be awarded automatically. The commissioner’s determination shall be final. Days earned under this subdivision may be awarded in addition to the reintegration furlough authorized in subdivision (A) of this subdivision (8). The commissioner shall have the discretion to determine the frequency with which calculations under this subdivision shall be made provided they are made at least as frequently as every six months. (C) The commissioner may authorize reintegration furlough under subdivisions (A) and (B) of this subdivision (8) only if the days are awarded in accordance with rules adopted pursuant to chapter 25 of Title 3 designed to: (i) Evaluate factors such as risk of reoffense, history of violent behavior, history of compliance with community supervision, compliance with the case plan, progress in treatment programs designed to reduce criminal risk, and obedience to rules and regulations of the facility.

JOURNAL OF THE HOUSE 401 (ii) Ensure adequate departmental supervision of the offender when furloughed into the community. (D) The commissioner may not award days toward reintegration furlough under subdivision (B) of this subdivision (8) if the offender is sentenced to a minimum term of incarceration in excess of five years or is incarcerated for a conviction of one or more of the following crimes: (i) Arson causing death as defined in 13 V.S.A. § 501; (ii) Assault and robbery with a dangerous weapon as defined in 13 V.S.A. § 608(b); (iii) Assault and robbery causing bodily injury as defined in 13 V.S.A. § 608(c); (iv) Aggravated assault as defined in 13 V.S.A. § 1024; (v) Murder as defined in 13 V.S.A. § 2301; (vi) Manslaughter as defined in 13 V.S.A. § 2304; (vii) Kidnapping as defined in 13 V.S.A. § 2405; (viii) Unlawful restraint as defined in 13 V.S.A. §§ 2406 and 2407; (ix) Maiming as defined in 13 V.S.A. § 2701; (x) Sexual assault as defined in 13 V.S.A. § 3252(a)(1) or (2); (xi) Aggravated sexual assault as defined in 13 V.S.A. § 3253; (xii) Burglary into an occupied dwelling as defined in 13 V.S.A. § 1201(c); or (xiii) Lewd or lascivious conduct with a child as defined in 13 V.S.A. § 2602. * * * (e) The commissioner may enter into and execute a contract with authorities in other states for the furlough of any inmate from any facility to another state when, in his opinion, the inmate needs special treatment in the other state or for a particular reason consistent with the rehabilitation of the inmate. [Deleted.] * * * (g) Treatment furlough. The department may place on furlough an inmate who has not yet served the minimum term of the sentence, provided the 402 SATURDAY, JUNE 4, 2005 approval of the sentencing judge is first obtained, who, in the department’s determination, needs residential treatment services not available in a correctional facility. The services may include treatment for substance abuse or personal violence or any other condition that the department has determined should be addressed in order to reduce the inmate’s risk to reoffend or cause harm to himself or herself or to others in the facility. The inmate shall be released only to a hospital or licensed inpatient residential treatment facility that provides services to the general population. The state’s share of the cost of placement in such a facility, net of any private or federal participation, shall be paid pursuant to memoranda of agreement between and within state agencies reflective of their shared responsibilities to maximize the efficient and effective use of state resources. In the event that a memorandum of agreement cannot be reached, the secretary of administration shall make a final determination as to the manner in which costs will be allocated. Sec. 7. EFFECT OF REINTEGRATION FURLOUGH It is the intent of the general assembly that granting the commissioner of corrections the ability to authorize reintegration furlough in Sec. 6 of this act shall have the effect of reducing the total number of Vermont offenders housed in out-of-state correctional facilities. * * * Graduated Sanctions * * * Sec. 8. 28 V.S.A. § 304 is amended to read: § 304. DISPOSITION ALTERNATIVES UPON VIOLATION OF PROBATION (a) If a violation is established by a proceeding conducted in accordance with section 302 of this title, the court may, in its discretion, revoke probation and require the probationer to serve the sentence which was suspended or order that the sentence be served in the community pursuant to the provisions of chapter 6 of this title. (b) As an alternative to revocation and imposition of sentence as provided in subsection (a) of this section, the court, in its discretion, after a violation has been established, may: (1) Continue the probationer on the existing sentence; or (2) Effect, in accordance with subsection 253(b) of this title, necessary or desirable changes or enlargements in the conditions of probation; or (3) Conduct a formal or informal conference with the probationer in order to reemphasize to him or her the necessity of compliance with the conditions of probation; or

JOURNAL OF THE HOUSE 403 (4) Issue a formal or informal warning to the probationer that further violations may result in revocation of probation by the court.; or (5) Continue the probationer on the existing sentence, but require the probationer to serve any portion of the sentence. (c) Prior to ordering either revocation or an alternative sanction for a violation of probation in accordance with subsection (b) of this section, the court shall consider, but has complete discretion whether to follow, sanction guidelines established by the department of corrections pursuant to subsection (e) of this section. (d) No plea agreement shall limit the court’s discretion under this section. (e) The department of corrections shall adopt rules pursuant to chapter 25 of Title 3 that establish graduated sanction guidelines for probation violations as an alternative to revocation and imposition of the original sentence. These guidelines do not grant the department any authority to impose sanctions for probation violations. * * * Deferred Sentences * * * Sec. 9. 13 V.S.A. § 7041 is amended to read: § 7041. DEFERRED SENTENCE (a) Upon an adjudication of guilt and after the filing of a presentence investigation report, the court may defer sentencing and place the respondent on probation upon such terms and conditions as it may require if a written agreement concerning the deferring of sentence is entered into between the state’s attorney and the respondent and filed with the clerk of the court. (b) Notwithstanding subsection (a) of this section, the court may defer sentencing and place the respondent on probation without a written agreement between the state’s attorney and the respondent if the following conditions are met: (1) the respondent is 28 years old or younger; (2) the crime for which the respondent is being sentenced is not a listed crime as defined in subdivision 5301(7) of this title; (3) the court orders a presentence investigation in accordance with the procedures set forth in Rule 32 of the Vermont Rules of Criminal Procedure, unless the state’s attorney agrees to waive the presentence investigation; (4) the court permits the victim to submit a written or oral statement concerning the consideration of deferment of sentence; 404 SATURDAY, JUNE 4, 2005 (5) the court reviews the presentence investigation and the victim’s impact statement with the parties; and (6) the court determines that deferring sentence is in the interest of justice. (c) Entry of deferment of sentence shall constitute an appealable judgment for purposes of appeal in accordance with sections 2381-2390 section 2383 of Title 12 and Rule 3 of the Vermont Rules of Appellate Procedure. Except as otherwise provided, entry of deferment of sentence shall constitute imposition of sentence solely for the purpose of sentence review in accordance with section s of this title . Thereafter the court may impose sentence at any time within five years from and after the date of entry of deferment The court may impose sentence at any time if the respondent violates the conditions of the deferred sentence during the period of deferment. (b)(d) Upon violation of the terms of probation or of the deferred sentence agreement, the court shall impose sentence. Upon fulfillment of the terms of probation and of the deferred sentence agreement, the court shall strike the adjudication of guilt and discharge the respondent. Upon discharge, the record of the criminal proceedings shall be expunged as if an application pursuant to section 5538 of Title 33 had been granted, except that the record shall not be expunged until restitution has been paid in full, absent a finding of good cause by the court. (c)(e) A deferred sentence imposed under subsection (a) or (b) of this section may include a restitution order issued pursuant to section 7043 of this title. Nonpayment of restitution shall not constitute grounds for imposition of the underlying sentence. * * * Conditions of Release * * * Sec. 10. 13 V.S.A. § 7554(a) is amended to read: § 7554. RELEASE PRIOR TO TRIAL (a) Any person charged with an offense, other than a person held without bail under section 7553 or 7553a of this title, shall at his or her appearance before a judicial officer be ordered released pending trial in accordance with this section. (1) The person shall be ordered released on personal recognizance or upon the execution of an unsecured appearance bond in an amount specified by the judicial officer unless the judicial officer determines that such a release will not reasonably assure the appearance of the person as required. In determining whether the person presents a risk of nonappearance, the judicial officer shall consider, in addition to any other factors, the seriousness of the offense

JOURNAL OF THE HOUSE 405 charged and the number of offenses with which the person is charged. If the officer determines that such a release will not reasonably assure the appearance of the person as required, the officer shall, either in lieu of or in addition to the above methods of release, impose the least restrictive of the following conditions or the least restrictive combination of the following conditions which will reasonably assure the appearance of the person as required: (A) Place the person in the custody of a designated person or organization agreeing to supervise him or her. (B) Place restrictions on the travel, association or place of abode of the person during the period of release. (C) Require the person to participate in an alcohol or drug treatment program. The judicial officer shall take into consideration the defendant’s ability to comply with an order of treatment and the availability of treatment resources. (D) Require the execution of a secured appearance bond in a specified amount and the deposit with the clerk of the court, in cash or other security as directed, of a sum not to exceed ten percent of the amount of the bond, such deposit to be returned upon the appearance of the person as required. (D)(E) Require the execution of a surety bond with sufficient solvent sureties, or the deposit of cash in lieu thereof. (E)(F) Require the deposit with the clerk of court of cash bail in a specified amount. (F)(G) Impose any other condition found reasonably necessary to assure appearance as required, including a condition requiring that the person return to custody after specified hours. (2) If the judicial officer determines that conditions of release imposed to assure appearance will not reasonably protect the public, the judicial officer may in addition impose the least restrictive of the following conditions or the least restrictive combination of the following conditions which will reasonably assure protection of the public: (A) Place the person in the custody of a designated person or organization agreeing to supervise him or her. (B) Place restrictions on the travel, association, or place of abode of the person during the period of release. (C) Require the person to participate in an alcohol or drug treatment program. The judicial officer shall take into consideration the defendant’s 406 SATURDAY, JUNE 4, 2005 ability to comply with an order of treatment and the availability of treatment resources. (D) Impose any other condition found reasonably necessary to protect the public, except that a physically restrictive condition may only be imposed in extraordinary circumstances. (3) A judicial officer may order that a defendant not harass or cause to be harassed a victim or potential witness. This order shall take effect immediately, regardless of whether the defendant is incarcerated or released. * * * * * * Parole Board * * * Sec. 11. 28 V.S.A. § 451 is amended to read: § 451. CREATION OF BOARD (a) A parole board of five members is created. The governor, with the advice and consent of the senate, shall appoint five regular members and two alternates for terms of three years in such a manner that no more than three terms shall expire annually. Initial terms may be less than three years. Each member and alternate shall hold office until a successor is appointed and qualified. The governor shall designate the board’s chair. As far as practicable, the governor shall appoint as members persons who have knowledge of and experience in correctional treatment, crime prevention or human relations, and shall give consideration, as far as practicable, to geographic representation of the state. The board shall select one of its members to serve as vice chair of the board. If the chair resigns or is otherwise permanently unable to serve on the board, the vice chair shall serve as interim chair until the governor designates a new chair pursuant to this section. The chair or the executive director may assign alternates to serve on the board in the absence of a regular member and such alternates shall have all the powers and authority of a regular member when so assigned. (b) Three members of the board shall constitute a quorum for the conduct of a meeting. Notwithstanding section 172 of Title 1, the concurrence of a majority of members present at a parole board meeting shall be necessary and sufficient for board action. (c) The chair of the parole board shall be entitled to compensation in the amount of $13,000.00 $20,500.00 annually, effective on the first pay period in fiscal year 2006, which shall be in lieu of any per diem otherwise authorized by law. If the vice chair assumes the duties of the chair for a period in excess of 30 consecutive days, the compensation otherwise payable to the chair during his or her absence shall be paid to the vice chair.

JOURNAL OF THE HOUSE 407 Sec. 12. 32 V.S.A. § 1010(f) is amended to read: (f) Members of the parole board shall receive $80.00 $100.00 per diem for each day of official duties together with reimbursement of reasonable expenses incurred in the performance of their duties. * * * Director of Parole Board * * * Sec. 13. PAROLE BOARD EXECUTIVE OFFICER; REDESIGNATION OF POSITION Notwithstanding any provision of law to the contrary, the General Assembly authorizes and directs the redesignation, effective July 1, 2005, of the following classified position as an exempt position: one (1) Parole Board Executive Officer, which shall be known after redesignation as the Parole Board Director. Sec. 14. 28 V.S.A. § 455 is added to read: § 455. DIRECTOR (a) The position of parole board director is created. The director shall be appointed by the governor after consultation with the board. (b) The director shall serve for a term of four years commencing on March 1 and continuing until his or her successor is appointed. (c) The director shall be exempt from classified state service. (d) The secretary of human services, in consultation with the parole board and the department of human resources, shall establish the minimum and preferred qualifications, duties, and compensation of the director. * * * Parole Board; Recommendations; Reports * * * Sec. 15. PAROLE BOARD; RECOMMENDED ACTIONS; REPORTS (a) The secretary of human services, in consultation with the chair of the parole board, shall: (1) Revise the interim parole board manual dated November 1, 1997 to provide the parole board, its staff, and the department of corrections with necessary guidance to perform parole-related duties. (2) Develop guidelines to assist the board to make consistent, empirically based decisions. (3) Develop training and orientation for parole board members and staff concerning board policies and procedures. 408 SATURDAY, JUNE 4, 2005 (4) Ensure that all parole board members and staff engage in training programs conducted by entities such as the Association of Paroling Authorities, International (APAI) and the American Probation and Parole Association (APPA). (b) On or before January 15, 2006, the secretary of human services shall report to the senate and house committees on judiciary and institutions and the joint legislative corrections oversight committee concerning implementation of this section. (c) The chair of the parole board shall review and evaluate the size and structure of the board and consider whether an increased membership or an alternative structure, or both, would enhance the board’s effectiveness. On or before January 15, 2006, the chair shall report the results of this evaluation to the house and senate committees on institutions and judiciary together with any proposals for legislative amendments. * * * Transitional Housing * * * Sec. 16. TRANSITIONAL HOUSING; PROPOSAL; STUDY COMMITTEE (a) It is imperative that the department of corrections engage in collaborative or strategic planning to identify specific housing needs by region and type, and the associated needs of offenders returning to the community. The department’s current practice of “buying beds” in the community does not adequately address the challenges, costs, and impacts of developing and operating successful transitional housing. It is the intent of the general assembly that the department develop and sustain new models of supportive, transitional housing. (b) On or before September 1, 2005, the department shall identify, through a statewide public process, at least one community interested in being active in a study committee designed to develop a proposal to provide transitional housing to assist offenders achieve successful reintegration into the community following a term of incarceration. Upon identifying an interested community, the department shall call an initial meeting of the study committee to include the following members: (1) The commissioner of corrections or the commissioner’s designee. (2) The superintendent of the office of probation and parole serving the pertinent community or the superintendent’s designee. (3) A representative of the law enforcement entity that serves the pertinent community.

JOURNAL OF THE HOUSE 409 (4) A representative of the Vermont League of Cities and Towns to be selected by the league’s governing board. (5) A representative of the pertinent community’s governing body. (6) A representative of a local planning commission or if none exists, then a representative of the regional planning commission serving the pertinent community. (7) The state’s attorney serving the pertinent community or the state’s attorney’s designee. (8) A representative of the office of the public defender serving the pertinent community. (9) The director of a community justice center, if one exists, or the director’s designee. (10) The executive director of the Vermont center for crime victim services or the executive director’s designee. (11) The field director of the district office of the agency of human services serving the pertinent community or the field director’s designee. (12) The executive director of the Vermont housing and conservation board or the executive director’s designee. (13) A representative of a local community land trust, if one exists. (14) A representative of a local housing authority, if one exists. (15) A representative of one or more neighborhood associations, if one exists. (16) A representative from the department of employment and training to be selected by the commissioner of the department. (17) Representatives of such other entity or entities as the members of the committee deem appropriate. (c) The study committee may seek information or advice from such other individuals, including former inmates who have successfully reintegrated into the community, or entities as it deems appropriate. (d) On or before January 15, 2006, the study committee shall provide to the house and senate committees on appropriations, judiciary, and institutions, the house committee on human services, and the senate committee on health and welfare a detailed proposal by which the state, acting on its own or in conjunction with community partners, could develop and operate community- 410 SATURDAY, JUNE 4, 2005 based structured transitional housing for offenders, which proposal shall include: (1) An outline of the administrative and operational structure of the facility, including community partnerships, plans to ensure adequate staffing, the criteria under which offenders would be released into and from the transitional housing facility, and the programs and services, which shall include employment and permanent housing assistance and prescription drug continuity, to be offered or the means by which programs and services would be accessed. (2) A budget detailing the cost of initiating and operating the housing, including potential nonstate funding sources and a projection of the financial impact the proposal would have on future state capital and general fund appropriations. (3) A plan for educating and engaging the support of the community for transitional housing. (4) A plan for notifying victims and responding to their concerns. (5) A timeline for the creation and start-up of the transitional housing. (e) At its initial meeting, the study committee shall select a member to serve as chair. The department of corrections shall provide administrative support to the committee. * * * Departmental Mission; Reintegration Plan * * * Sec. 17. 28 V.S.A. § 1(b) is amended to read: (b) The department shall formulate its programs and policies recognizing that almost all criminal offenders ultimately return to the community, and that the traditional institutional prisons fail to reform or rehabilitate, operating instead to increase the risk of continued criminal acts following release. The department shall strive to develop and implement a comprehensive program which will provide necessary closed custodial confinement of frequent, dangerous offenders, but which also will establish as its primary objective the disciplined preparation of offenders for their responsible roles in the open community. The department shall ensure that the comprehensive program required by this subsection includes a process by which each offender sentenced to any term of imprisonment other than for life without parole, within 30 days after receiving his or her sentence, shall begin to develop and implement a plan preparing for return to the community. * * * Corrections Oversight Committee * * * Sec. 18. REPEAL

JOURNAL OF THE HOUSE 411 Secs. 170d and 170e of No. 142 of the Acts of the 2001 Adj. Sess. (2002) (joint legislative corrections oversight committee) are repealed. Sec. 19. 2 V.S.A. chapter 22 is added to read: CHAPTER 22. JOINT LEGISLATIVE CORRECTIONS OVERSIGHT COMMITTEE § 801. CREATION OF COMMITTEE (a) There is created a joint legislative corrections oversight committee whose membership shall be appointed each biennial session of the general assembly. The committee shall exercise oversight over the department of corrections and work with and provide assistance to other legislative committees on matters related to corrections policies. (b) The committee shall be composed of eight members: four members of the house of representatives, who shall not all be from the same party, appointed by the speaker of the house; and four members of the senate, who shall not all be from the same party, appointed by the committee on committees. In addition to one member-at-large appointed from each chamber, one appointment shall be made from each of the following house and senate committees: appropriations, judiciary, and institutions. (c) The committee shall elect a chair, vice chair, and clerk from among its members and shall adopt rules of procedure. The chairmanship shall rotate biennially between the house and the senate members. The committee shall keep minutes of its meetings and maintain a file thereof. A quorum shall consist of five members. (d) When the general assembly is in session, the committee shall meet at the call of the chair. The committee may meet four times during adjournment, and may meet more often subject to approval of the speaker of the house and the president pro tempore of the senate. (e) For attendance at a meeting when the general assembly is not in session, members of the committee shall be entitled to compensation for services and reimbursement of expenses as provided under subsection 406(a) of this title. (f) The professional and clerical services of the joint fiscal office and the legislative council shall be available to the committee. § 802. DUTIES (a) In addition to the general responsibilities set forth in subsection 801(a) of this title, the committee shall: 412 SATURDAY, JUNE 4, 2005 (1) Review and make recommendations regarding the department of corrections’ strategic, operating, and capital plans. (2) Review and make recommendations to the house and senate committees on appropriations regarding departmental budget proposals. (3) Provide general oversight on departmental policy development. (4) Encourage improved communication between the department and other relevant components of the administrative branch and the criminal justice system. (b) At least annually, the committee shall report its activities, together with recommendations, if any, to the general assembly. Sec. 20. INCENTIVES; REPORT The department of corrections and the joint legislative corrections oversight committee shall jointly review and evaluate potential incentive programs and management strategies for use within the state’s correctional facilities to encourage and reinforce good behavior, reduce high-risk behaviors, and encourage participation in programming. The department shall review strategies used in other jurisdictions and recommend to the committee those strategies it finds to be most suitable for use in Vermont. * * * Specialized Programming within Correctional Facilities * * * Sec. 21. SPECIALIZED SUBSTANCE ABUSE AND DOMESTIC VIOLENCE PROGRAMMING (a) In order to provide essential programming to inmates to assist with successful reintegration into the community, the department of corrections shall prepare a detailed proposal to provide specialized substance abuse and domestic violence programming to targeted offenders housed in correctional facilities, which may include out-of-state facilities. (b) The proposal required by this section shall include: (1) Details of the populations to be served, the levels of programming to be offered, and the locations in which the programs will occur. (2) A detailed time line regarding implementation of the proposed programming. (3) Provisions to ensure that programming is available to each eligible offender housed within a correctional facility regardless of whether it is possible that the offender will be released from that facility or transferred to a different correctional facility prior to completion of the programming.

JOURNAL OF THE HOUSE 413 (4) Provisions to ensure that if an offender is released from a correctional facility or transferred to a different facility prior to completion of specialized substance abuse programming, or specialized domestic violence programming, or both, the commissioner shall ensure that the offender is able to continue programming in the community into which the offender is released or in the facility to which the offender is transferred. (5) Provisions to ensure initial and continuing education and certification of department employees necessary to offer the proposed programming. (6) Provisions to ensure that the services of contract providers are used in an efficient and cost-effective manner. (7) A detailed itemization of capital and general fund costs associated with the proposed programming. (8) A detailed evaluation of whether the proposal may have the effect of increasing the total inmate population and suggestions for ways in which this result might be avoided. The department shall work with the offices of the defender general, the state’s attorneys, and the court administrator to conduct the evaluation and develop the suggestions required by this subdivision. (c) The department shall present the detailed proposal to the joint legislative corrections oversight committee on or before November 1, 2005. * * * Ratio of Correctional Field Staff to Offenders in the Community * * * Sec. 22. DEPARTMENT OF CORRECTIONS; RULEMAKING Pursuant to chapter 25 of Title 3, the department of corrections shall adopt rules to ensure that the number of trained correctional field staff be sufficient and, if necessary, increased prior to the release of inmates into the community, and that offenders be released at a rate that permits adequate supervision, both to ensure community safety and to support successful reintegration of each offender. The commissioner of corrections shall report to the house and senate committees on appropriations, institutions, and the judiciary on or before January 15, 2006 regarding implementation of the rule or rules and shall, at that time, also present a draft of any proposed related legislation for the committees’ consideration. * * * Global Positioning System * * * Sec. 23. GLOBAL POSITIONING SYSTEM MONITORING (a) The department of corrections is authorized to implement a pilot program using a global positioning system (“GPS”) or other similar technology within the community pursuant to the terms of the plan submitted by the 414 SATURDAY, JUNE 4, 2005 department to the house committees on appropriations and institutions in January 2005 (the “pilot program”); provided that the pilot program may only involve: (1) 20 offenders at any one time. (2) Offenders convicted of D.U.I. pursuant to Title 23 and nonviolent offenders who might otherwise be incarcerated for violating the conditions of their release. (b) On or before January 15, 2006, the commissioner of corrections shall report to the house and senate committees on appropriations and on judiciary regarding the department’s progress in implementing the pilot program. * * * Indefinite Probation * * * Sec. 24. PROBATION; LENGTH OF TERM (a) On or before January 1, 2006, the department of corrections shall: (1) Identify each offender (the “misdemeanant”), sentenced prior to July 1, 2004, who is serving an indefinite term of probation solely in connection with one or more misdemeanors; (2) Categorize the misdemeanants into three groups by date of sentencing such that, for purposes of this section, the one-third with the earliest dates of sentencing shall be identified as Group A, the one-third with intermediate dates shall be Group B, and the one-third with the most recent dates shall be Group C; (3) Provide the three categorized lists of misdemeanants to the executive director of the office of state’s attorneys and to the Vermont center for crime victims services, restitution unit. (b) On or before July 1, 2006, the probation officers for misdemeanants in Group A shall review the case file for these misdemeanants and: (1) Shall file a petition with the sentencing court requesting discharge from probation for each misdemeanant in Group A for whom the department believes that termination is warranted by the conduct of the misdemeanant and the ends of justice; provided that a petition shall not be filed under this subdivision for any misdemeanant who has not completed programming consistent with his or her special conditions of probation. Simultaneous with filing, notice of the petition shall be given to the state’s attorney who may object and request a hearing on the petition. (2) For each misdemeanant in Group A not included within subdivision (1) of this subsection, shall file a petition with the court requesting the court to

JOURNAL OF THE HOUSE 415 extend the period of probation for a term not to exceed two years unless the court, in its sole discretion, specifically finds after a hearing that the interests of justice require a longer or an indefinite period of probation. Simultaneous with filing, notice of the petition shall be given to the state’s attorney. (c) On or before January 1, 2007, the probation officers for misdemeanants in Group B shall review the case file for these misdemeanants and: (1) Shall file a petition with the sentencing court requesting discharge from probation for each misdemeanant in Group B for whom the department believes that termination is warranted by the conduct of the misdemeanant and the ends of justice; provided that a petition shall not be filed under this subdivision for any misdemeanant who has not completed programming consistent with his or her special conditions of probation. Simultaneous with filing, notice of the petition shall be given to the state’s attorney who may object and request a hearing on the petition. (2) For each misdemeanant in Group B not included within subdivision (1) of this subsection, shall file a petition with the court requesting the court to extend the period of probation for a term not to exceed two years unless the court, in its sole discretion, specifically finds after a hearing that the interests of justice require a longer or an indefinite period of probation. Simultaneous with filing, notice of the petition shall be given to the state’s attorney. (d) On or before July 1, 2007, the probation officers for misdemeanants in Group C shall review the case file for these misdemeanants and: (1) Shall file a petition with the sentencing court requesting discharge from probation for each misdemeanant in Group C for whom the department believes that termination is warranted by the conduct of the misdemeanant and the ends of justice; provided that a petition shall not be filed under this subdivision for any misdemeanant who has not completed programming consistent with his or her special conditions of probation. Simultaneous with filing, notice of the petition shall be given to the state’s attorney who may object and request a hearing on the petition. (2) For each misdemeanant in Group C not included within subdivision (1) of this subsection, shall file a petition with the court requesting the court to extend the period of probation for a term not to exceed two years unless the court, in its sole discretion, specifically finds after a hearing that the interests of justice require a longer or an indefinite period of probation. Simultaneous with filing, notice of the petition shall be given to the state’s attorney. 416 SATURDAY, JUNE 4, 2005 (e) Each victim who has requested timely notification from the department pursuant to 13 V.S.A. § 5305 shall receive notice of a petition filed under this section in connection with that victim’s case. (f) The department shall provide timely notification of each petition filed under this section to the Vermont center for crime victims services, restitution unit. * * * Assault with Bodily Fluids * * * Sec. 25. 13 V.S.A. § 1028a is amended to read: § 1028a. ASSAULT OF CORRECTIONAL OFFICER; ASSAULT WITH BODILY FLUIDS * * * (b) No person shall intentionally cause blood, vomitus, excrement, mucus, saliva, semen, or urine to come in contact with: (1) Any person lawfully present in a correctional facility unless the person’s presence within the facility requires the contact; or (2) An employee of a correctional facility acting in the scope of employment unless the employee’s scope of employment requires the contact. (c) A person who violates subsection (b) of this section shall be imprisoned not more than two years or fined not more than $1,000.00, or both; except that a person who violates subsection (b) who has reason to know that he or she is infected with the human immunodeficiency virus (HIV), acquired immune deficiency syndrome (AIDS), or hepatitis C shall be imprisoned not more than five years or fined not more than $5,000.00, or both where transmission of the disease was possible by the action that occurred. (d) A sentence imposed for a conviction of this section shall be served consecutively with and not concurrently with any other sentence. * * * Use of Savings * * * Sec. 26. REDUCTION IN INCARCERATED POPULATION; USE OF SAVINGS (a) It is the intent of the general assembly that the provisions of this act will result in an eventual decrease in the total incarcerated population, and that offenders housed in out-of-state correctional facilities will be brought home to Vermont. It is also the intent of the general assembly that savings realized in any given fiscal year from the reduction in the incarcerated population will be dedicated to improving correctional services, including the provision of:

JOURNAL OF THE HOUSE 417 (1) Adequate support, programming, and supervision for offenders within the community, including a sufficient number of trained correctional field staff as required by Sec. 22 of this act; and (2) Adequate programming and an adequate number and ratio of trained correctional officers within the correctional facilities. (b) On or before August 15, 2005, and on or before the 15th day of each of the subsequent 11 months, the department of corrections shall provide a report to the joint legislative corrections oversight committee detailing the following: (1) The number of offenders housed in out-of-state correctional facilities during the previous month. (2) The actual expense of housing offenders in out-of-state correctional facilities for the previous month. (3) A breakdown of how any excess allocation, which shall be calculated as the difference between the actual monthly expense and the budgeted monthly expense, shall be spent by the department pursuant to the provisions of subsection (a) of this section. (4) The number of offenders released under reintegration furlough pursuant to 28 V.S.A. § 808(a)(8) during the previous month. (5) Other information that the joint legislative corrections oversight committee may request. (c) On July 1, 2006 and July 1, 2007, the department of corrections shall provide to the joint legislative corrections oversight committee a detailed report that comprehensively analyzes the net increase or decrease in both financial expenditures and staff time resulting from the amendments contained in this act, including the manner in which savings in expenditures and time were redirected, which report shall specifically include: (1) The net gain in staff time resulting from the retrospective and prospective award of good time in Sec. 2 of this act and the repeal of 28 V.S.A. § 811 in Sec. 3 of this act and the purposes to which this gained time has been redirected. (2) The net change in financial expenditures and in staff time resulting from: (A) The creation of reintegration furlough in Sec. 6 of this act. (B) Amendments relating to graduated sanctions for violations of probation in Sec. 8 of this act. (C) Amendments relating to deferred sentences in Sec. 9 of this act. 418 SATURDAY, JUNE 4, 2005 (D) Provisions requiring a reduction in the number of misdemeanants on indefinite probation in Sec. 24 of this act. (3) The purposes to which all savings in financial expenditures and in staff time identified pursuant to subdivision (2) of this subsection have been or will be redirected. * * * Sexual Exploitation of Offenders * * * Sec. 27. SEXUAL EXPLOITATION OF OFFENDERS; WORKING GROUP (a) The following individuals shall form a working group to develop proposed legislation prohibiting the sexual exploitation of individuals within the Vermont correctional system: (1) The commissioner of corrections or the commissioner’s designee. (2) The director of the Vermont state employees’ association or the director’s designee. (3) The director of the prisoners’ rights office of the office of the defender general or the director’s designee. (4) The executive director of the office of state’s attorneys or the executive director’s designee. (5) The director of the Vermont Network Against Domestic Violence or the director’s designee. (6) The executive director of the Vermont commission on women or the executive director’s designee. (7) The executive director of the Center for Crime Victim Services, or the executive director’s designee. (b) On or before September 15, 2005, the working group shall present to the joint legislative corrections oversight committee (“COC”) a draft of proposed legislation, supported by all members of the working group, prohibiting the sexual exploitation of any individual who is in the custody of or confined by the department of corrections or who is being supervised by the department of corrections. The legislative council shall assist the working group to prepare the draft. The working group shall select one or more representatives who shall provide verbal status reports at each of the COC’s meetings held prior to September 15, 2005. (c) The COC shall review the draft proposed by the working group during any committee meetings held on and after September 15, 2005 and shall consider introducing the proposal, with or without amendments, as a bill during the 2006 legislative session. If the working group is unable to reach

JOURNAL OF THE HOUSE 419 agreement on draft legislation as required by subsection (b) of this section, the COC shall prepare a draft bill addressing the issue for introduction during the 2006 legislative session. * * * Effective Date * * * Sec. 28. EFFECTIVE DATE This act shall take effect on July 1, 2005; provided: (1) Offenders convicted of a listed felony shall not be eligible for reintegration furlough under Sec. 6, 28 V.S.A. § 808(a)(8)(A), until completion of the rulemaking process required for that subdivision, which shall be no later than November 1, 2005. (2) Offenders shall not be eligible to earn days toward reintegration furlough under Sec. 6, 28 V.S.A. § 808(a)(8)(B), until completion of the rulemaking process required for that subdivision, which shall be no later than November 1, 2005. Committee on the Part of Committee on the Part of The Senate The House Sen. Richard W. Sears Jr. Rep. Michael R. Kainen Sen. John F. Campbell Rep. Richard J. Marek Sen. Wendy L. Wilton Rep. John S. Rodgers Which was considered and adopted on the part of the House. On motion of Rep. Sunderland of Rutland Town, the rules were suspended and the bill was ordered messaged to the Senate forthwith. Rules Suspended; Report of Committee of Conference Adopted S. 16 Pending entrance of the bill on the Calendar for notice, on motion of Rep. Sunderland of Rutland T own, the rules were suspended and Senate bill, entitled An act relating to campaign finance; Was taken up for immediate consideration. The Speaker placed before the House the following Committee of Conference report: To the Senate and House of Representatives: The Committee of Conference to which were referred the disagreeing votes of the two Houses upon the bill respectfully reports that it has met and 420 SATURDAY, JUNE 4, 2005 considered the same and recommend that the Senate accede to the House proposal of amendment. Committee on the Part of Committee on the Part of The Senate The House Sen. James Condos Rep. Lynn Bohi Sen. Jeanette White Rep. David Clark Sen. William Doyle Rep. Jim Hutchinson Message from the Senate No. 87 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered the reports of the Committees of Conference upon the disagreeing votes of the two Houses upon Senate bills of the following titles: S. 80. An act relating to increasing the minimum wage S. 156. An act relating to corrections And has accepted and adopted the same on its part. The Senate has considered a bill originating in the House of the following title: H. 109. An act relating to reauthorization of the Human Resources Investment Council. And has passed the same in concurrence with proposals of amendment in the adoption of which the concurrence of the House is requested. Message from the Senate No. 88 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has considered the report of the Committee of Conference upon the disagreeing votes of the two Houses upon Senate bill of the following title: S. 16. An act relating to campaign finance. And has accepted and adopted the same on its part. Committee Relieved of Consideration

JOURNAL OF THE HOUSE 421 and Bill Placed on Calendar for Notice H. 249 Rep. Morley of Barton moved that the Committee on Ways and Means be relieved of House bill entitled An act relating to wood products income tax credit and education property tax limitation; Which was agreed to. Thereupon, under the rule, the bill was placed on the Calendar for notice tomorrow.

Message from the Senate No. 89 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has on its part adopted a joint resolution of the following title: J.R.S. 41. Joint resolution relating to final adjournment of the General Assembly in 2005. In the adoption of which the concurrence of the House is requested. Joint Resolution Adopted in Concurrence J.R.S. 41 By Senator Welch, J.R.S. 41. Joint resolution relating to final adjournment of the General Assembly in 2005. Resolved by the Senate and House of Representatives That when the President of the Senate and the Speaker of the House of Representatives adjourn their respective houses on the fourth day of June, 2005, they shall do so to reconvene no later than the third day of January, 2006. Was taken up read and adopted in concurrence. Senate Notified of Completion of House Business 422 SATURDAY, JUNE 4, 2005 Rep. Partridge of Windham moved that the House direct the Clerk to inform the Senate that the House has completed the business of the first half of the Biennial session and is ready to adjourn pursuant to the provisions of J.R.S. 41, which was agreed to. Message from the Senate No. 90 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has on its part completed the business of this part of the session and is ready to adjourn to a day certain, January 3, 2006, pursuant to the provisions of J.R.S. 41.

Message from the Senate No. 91 A message was received from the Senate by Mr. Marshall, its Assistant Secretary, as follows: Madam Speaker: I am directed to inform the House that the Senate has on its part adopted Senate concurrent resolutions of the following titles: S.C.R. 42. Senate concurrent resolution deputy Attorney General J. Wallace Malley for his exemplary public service on behalf of the state of Vermont. The Senate has on its part adopted concurrent resolutions originating in the House of the following titles: H.C.R. 175. House concurrent resolution congratulating the 2005 Black River Union High School girls’ championship snowboarding team. H.C.R. 176. House concurrent resolution honoring Brock Alan Tucker of South Burlington on becoming an Eagle Scout. H.C.R. 177. House concurrent resolution honoring Harvey Sharrow of Charlotte. H.C.R. 178. House concurrent resolution congratulating the Crossett Brook Middle School Odyssey of the Mind team on its outstanding Vermont and world competition performances. H.C.R. 179. House concurrent resolution congratulating Linda Conrad on her retirement from Dan and Whit’s General Store in Norwich.

JOURNAL OF THE HOUSE 423 H.C.R. 180. House concurrent resolution congratulating Gail B Conley on his outstanding career in public education. H.C.R. 181. House concurrent resolution honoring Robert F. Stevens for his outstanding career in public education. H.C.R. 182. House concurrent resolution in memory of former representative Robert D. Yoder of Springfield. Governor Notified of Completion of House Business Rep. Partridge of Windham moved that the Speaker appoint a committee of six to inform the Governor that the House has completed the business of the first half of the Biennial session and is ready to adjourn pursuant to the provisions of J.R.S. 41, which was agreed to.

Rep. Partridge of Windham Rep. Nease of Johnson Rep. Sunderland of Rutland Town Rep. Adams of Hartland Rep. Kiss of Burlington Rep. Martin of Springfield Governor Presented at the Bar of the House The committee appointed to wait upon the Governor retired to the Executive Chamber and returned with His Excellency, Governor James Douglas, and presented him at the bar of the House. The Governor addressed the House and, having completed his remarks, was escorted from the Hall by the Committee. Adjournment Rep. Partridge of Windham moved that the House now adjourn pursuant to J.R.S. 41, which was agreed to. Thereupon, at five o’clock and fifty-five minutes in the evening, the Speaker adjourned the House of Representatives pursuant to the provisions of J.R.S. 41.

FINAL MESSAGES AND COMMUNICATIONS Message from Governor A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: 424 SATURDAY, JUNE 4, 2005 I am directed by the Governor to inform the House that on the fourth day of June, 2005, he approved and signed a bill originating in the House of the following title: H. 530 An act relating to amending the charter of the town of Bennington Message from Governor A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: I am directed by the Governor to inform the House that on the seventh day of June, 2005, he approved and signed bill originating in the House of the following titles H. 71 An act relating to unemployment compensation contribution rate manipulation H. 507 An act relating to the health of Vermont’s fish population H. 510 An act relating to amending the charter of the City of Barre H. 528 An act relating to adjustments to the municipal employees’ retirement system of Vermont H. 531 An act relating to reorganizing the agency of human services Message from Governor A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: I am directed by the Governor to inform the House that on the seventh day of June, 2005, he approved and signed bills originating in the House of the following titles: H. 117 An act relating to the allocation of the assets of the State Teachers’ Retirement System of Vermont, The Vermont State Employees’ Retirement System, and the Vermont Municipal Employees’ Retirement System; H. 133 An act relating to the Governor’s Retirement Funds Integrity Report. Message from Governor

JOURNAL OF THE HOUSE 425 A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: I am directed by the Governor to inform the House that on the thirteenth day of June, 2005, he approved and signed bills originating in the House of the following titles: H. 115 An act relating to advance directives for health care; H. 525 An act relating to approval of the charter of the Rutland County recreation District; H. 543 An act relating to long-term care waiver.

Message from Governor A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: I am directed by the Governor to inform the House that on the fourteenth day of June, 2005, he approved and signed bills originating in the House of the following titles: H. 156 An act relating to conservation motor vehicle registration plates; H. 403 An act relating to basic needs budget calculations to determine livable wages; H. 491 An act relating to notice of a dishonored check by first class mail with an affidavit of service by mailing. Message from Governor A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: I am directed by the Governor to inform the House that on the sixteenth day of June, 2005, he approved and signed bills originating in the House of the following titles: 426 SATURDAY, JUNE 4, 2005 H. 134 An act relating to a legislative information technology committee; H. 532 An act relating to solid waste facility fees, taxes, and certification; H. 533 An act relating to compensation for certain state employees; H. 541 An act relating to appointment of a Sergeant Major and a Chief Master Sergeant in the Vermont National Guard. Message from Governor A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: I am directed by the Governor to inform the House that on the seventeenth day of June, 2005, he approved and signed a bill originating in the House of the following title: H. 325 An act relating to workers’ compensation compensability of heart attacks suffered by firefighters and police officers. Message from Governor A message was received from His Excellency, the Governor, by Mr. Neale Lunderville, Secretary of Civil and Military Affairs, as follows: Madam Speaker: I am directed by the Governor to inform the House that on the eighteenth day of June, 2005, he approved and signed a bill originating in the House of the following title: H. 352 An act relating to the interstate insurance product regulation compact and debt protection agreement. Communication from Governor “June 22, 2005

The Honorable Donald G. Milne Clerk of the House of Representatives State House Montpelier, Vermont 05633-5401

Dear Mr. Milne:

JOURNAL OF THE HOUSE 427 I am returning H.524, An Act Relating to Universal Access to Health Care in Vermont, without my signature because of my objections described herein.

I remain fully committed to working collaboratively with all interested parties to achieve thoughtful and lasting reform of our health care system. Our system does face many complex and difficult challenges, but we must meet these challenges.

Overall health care spending in Vermont and the nation is increasing at an unsustainable rate. Unless we take time to enact contemplative and meaningful reforms, higher health care costs are likely to result in a dramatically reduced public capacity to offer coverage in existing programs like Medicaid. These same pressures are likely to result in reduced employee participation rates, fewer private options and greater numbers of uninsured Vermonters.

Slightly more than 90 percent of Vermonters are insured, and while Vermont’s insured rate is among the highest in the nation, I will not be satisfied until all Vermonters have access to health care coverage they can afford.

There is much that is commendable about Vermont’s health care system— most notably the efforts of our dedicated providers—but there is still much that can be done to improve quality, enhance safety and lower costs.

As we move forward with necessary reforms, it is important that the means chosen to address these problems are consistent with the values and expectations of the people of this state, and are financially sustainable for the employees, employers and families paying taxes.

Accordingly, last year I set forth the principles that should guide efforts to achieve meaningful reform of Vermont’s health care system:

 Our efforts to achieve universal access to affordable health care coverage for all Vermonters must include policies that reduce costs for Vermonters who are currently insured and struggling to keep up with ever-increasing insurance premiums.  Meaningful health care reform must be comprehensive and patient- centered, putting decisions in the hands of doctors and patients, not politicians and bureaucrats.  Our reforms must increase choices and encourage a significant degree of personal responsibility. 428 SATURDAY, JUNE 4, 2005  Reform of both public and private health care coverage systems must be financially sustainable and supportive of a prosperous economy.

I am pleased that the General Assembly agreed with many of my Administration’s initiatives, which will result in real progress and help Vermont turn its attention back toward the need to lower costs.

Two related initiatives included in the fiscal year 2006 budget—the Chronic Care and Health Care Information Technology initiatives—will positively impact both the cost and quality of care delivered in Vermont over time. Both efforts have tremendous promise for improving Vermont’s health care infrastructure.

Two provisions included in H.524—the Healthy Lifestyles Discount and the Consumer Price and Quality Information Program—would provide incentives for individual Vermonters to engage in healthy behavior, give them the tools they need to make cost-effective choices about health care and also help drive down cost and improve quality.

I regret, however, that in most other respects H.524 falls far short of my Administration’s goals and principles for meaningful health care reform.

H.524 would create a new, government-run, taxpayer financed health care program that would lead Vermont toward a system of fewer choices, fewer benefits and fewer health care providers.

H.524 would also impose new payroll taxes on small businesses and non-profit organizations, and a regressive income tax surcharge on the working poor to finance the limited health care coverage it proposes. Such a financing mechanism punishes low and moderate-income workers who are least able to afford these regressive taxes.

This health care tax proposal would be extraordinarily harmful to Vermont’s small businesses and economy, and fails to account for the necessary revenue needed for its intended expansion in future years. Moreover, throughout the legislative process concerns of health care providers, private sector employers, individual residents, and Executive Branch officials were ignored.

The bill also fails to address the so-called Wal-Mart issue.

JOURNAL OF THE HOUSE 429 In fact, the Legislature’s proposal creates a tax scheme that benefits Wal-Mart sized multi-state and multi-national corporations at the expense of Vermont’s small, homegrown businesses.

The measure fails to adequately define key phrases and intent, calls for unrealistic and unfunded demands on government personnel and leaves far too many questions unanswered.

In addition, and somewhat ironically, H.524 calls for a study commission intended to justify the millions of dollars in decisions the Legislature has already made, actions it has already taken and decisions is appears destined to make.

Such a study—with predefined outcomes—does not constitute the collaborative discussion required to achieve meaningful and lasting reform. Such a study is also, if nothing else, an indication that this legislation has been advanced in great haste.

Finally, the bill would impose inflexible caps on our regional hospitals. These caps might well force these important health care and economic resources to reduce services and eliminate jobs.

The bottom line is that the numerous technical deficiencies and conceptual flaws of H.524—including an effort to commandeer Executive Branch functions—render it incapable of achieving its publicly stated goals.

These principal deficiencies are enumerated in greater detail below.

I. H.524 Would Create a Government-Run Program that Limits Health Care Choices H.524 proposes to create a new government-run program to provide taxpayer financed health care coverage to Vermonters. As a first step this program would begin in July 2006 by offering a “bare bones” policy of primary and preventive care for all currently uninsured Vermonters.

The bill’s schedule makes clear, however, that the legislation is intended to offer primary and preventive care for all Vermonters by July 2007, hospital and primary and preventive care to all Vermonters by October 2008, and comprehensive benefits to all Vermonters by July 2009.

430 SATURDAY, JUNE 4, 2005 The result of the legislation would therefore be a system of insurance dominated by the government that competes with, and eventually eliminates, private health insurance options—an outcome with particularly negative consequences for the thousands of Vermonters currently covered by comprehensive private insurance plans.

II. H.524 Would Increase Premiums for Vermonters with Private Insurance and Hurt Providers During the three-year transition from the current coverage system to the full government-run program, Vermonters left in the private market will face higher and higher premiums as more and more costs are shifted from the Legislature’s plan to individuals paying insurance premiums.

If, as expected, the government’s provider payments are less than health insurance provider payments the difference will be cost-shifted to those Vermonters who pay premiums. Such an exacerbation of the cost shift is fundamentally unfair.

Notwithstanding the words in the legislation that promise not to exacerbate the cost shift by providing “reasonable payments to health care professionals,” the history of the Medicaid and Medicare programs demonstrates that a public health care program always underpays health care professionals. Additionally , the word “reasonable” is not defined to guarantee reimbursements that would in fact approach market rates.

The notion that this proposal would reduce the cost shift related to uncompensated care is incorrect. Vermonters paying premiums will see no relief from the extra costs embedded in their premiums to pay for care for the uninsured. The Legislature’s plan will not offer hospital care until 2008 at the earliest, a date subject to available state revenues and contingent upon various conditions and benchmarks established in the bill.

As the Legislature’s proposal expands, less competitive reimbursement rates will make the recruitment and retention of doctors and other health care professionals increasingly difficult. As a result, Vermonters will have fewer options when choosing a doctor or other provider, and greater limitations on treatment and benefits. Sacrificing access to quality care is not an effective or desirable way to reduce costs.

In the end, this proposal would worsen the cost shift, increase costs for Vermonters who are currently insured, and reduce treatment options for

JOURNAL OF THE HOUSE 431 Vermonters. Such results are counter to my goal of lowering costs and increasing access, and therefore unacceptable.

III. H.524 Leads to Health Care Rationing Concentrated power in a dominant government program, combined with the financial pressures to meet the annual costs of coverage, will result in government rationing of health care under this proposal.

While there is some measure of truth in the assertion that all health care coverage systems contain some degree of “rationing” because no system can afford to provide unlimited health care benefits, a system where all participants (including patients, providers, and payers) face constraints and must be accountable to other participants, is far more likely to be responsive than a single government agency with near absolute power constrained only by the General Assembly.

Presumably, the reason for the minimal coverage offered at the outset is because that is all the General Assembly believes it can afford to offer, given the program’s dependence on public financing. However, offering a minimal preventive plan has a limited cost containment benefit considering the fact that a majority of health insurance spending is for specialty care and hospital claims.

Nevertheless, similar decisions and trade-offs regarding the scope of benefits can be expected in the future as the program is forced to reduce benefits and treatment choices to fit expenditures within somewhat unpredictable annual state revenues.

IV. H.524 Hurts Local Hospitals, Reduces the Quality of Care and Costs Regional Jobs One of the primary cost containment tools authorized by H.524 is an inflexible, annual cap on hospital budgets.

Based on the Legislature’s formula, the cap could be as low as 3 percent in some years. This could result in salary freezes and layoffs, as well as the possibility of not allowing any medical technology purchases like new dialysis equipment or other advances that improve quality.

Expenditures, such as financing health care information technology systems that might very well save money, as well as improve quality in the long run, could be prohibited under the spending cap. This is deeply flawed public 432 SATURDAY, JUNE 4, 2005 policy and counter to our efforts to enact reforms that lower costs and increase access.

Since the spending cap is also to be applied on a statewide basis, it will pit hospital against hospital, and region against region every year. It is possible that the largest hospitals would fare the best, winning a disproportionate percentage of the limited resources.

Ironically, the legislation seems to acknowledge some of the flaws identified above by offering the agency charged with administering and regulating the spending cap system the authority to adjust an individual hospital’s spending cap based on “exceptional or unforeseen circumstances,” and a further exception is made for “significant unbudgeted increase in volume.” This sizeable loophole illustrates the failed reasoning behind arbitrary and inflexible caps.

Under the Legislature’s proposal, residents of each region of the state would face the prospect of not knowing from year to year how the hospital they rely on will fare in its annual competition for resources with other regions. If the spending cap is administered as strictly as it appears in the bill, it is likely that hospitals will be forced to dramatically reduce their services—forcing Vermonters to travel long distances for necessary treatment.

V. H.524 May Limit Where Residents Can Go for Care The legislation also proposes a “global hospital payment” and “organizational structures that integrate the delivery of care” on a regional basis.

A global payment would likely require a defined territory for each hospital. Carrying this to its logical conclusion, it would mean that a resident in one region would be required to go to the hospital serving that area, and to a physician practice also located there.

Vermonters want to be able to choose the hospital where their child is born, and where they see their doctor—unfortunately, H.524 fails to account for this.

VI. Ultimately, Cost Increases Would Render the Program Unsustainable It is highly unlikely that the proposed program could achieve any reasonable cost containment without jeopardizing the viability of community hospitals, lowering reimbursements to providers and forcing Vermonters into rationed care plans.

JOURNAL OF THE HOUSE 433 The burden on taxpayers of maintaining the program would as a result become unsustainable. Given the history of Vermont’s other public health care program, this scenario is very possible.

This year Vermont faced an $80 million deficit in the Medicaid program. The structural problems in Medicaid have been apparent for many years, but the General Assembly has been reluctant to act until the problem reaches a crisis level.

Plainly put, it would be irresponsible to impose on Vermonters another government health care system with similarly unpredictable and unsustainable management and structural designs.

VII. Policies of the Past are not the Solutions of the Future For more than a decade, the Vermont Legislature enacted many health care mandates over the objection of state regulators and others who expressed concerns about the cost of health insurance.

Many of these decisions, as predicted by the same regulators, have resulted in fewer choices and higher health insurance costs—moving Vermont further from its goal of universal access to affordable health insurance coverage. In many ways, most notably in the intent to create a new government-run system, H.524 is a continuation of this failed public policy.

VIII. H.524 Imposes Punitive Payroll and Regressive Income Taxes The health care coverage proposed by H.524 is financed by punitive payroll taxes on small businesses and non-profit organizations, and a highly regressive income tax surcharge on individuals who presently cannot afford health insurance.

While the tax rates may seem relatively low at the outset, the legislation makes clear that it will quickly expand its scope and offer broader benefits to all Vermonters by 2009. The Legislature’s proposal would, at a minimum, need new tax revenue sufficient to pay for the cost of their yet to be defined health care benefits in 2009.

The greatest burden imposed by the individual income tax surcharge will be on those uninsured Vermonters least able to afford the tax. While some may not be covered because they have not yet enrolled in Medicaid, most are not covered because they simply cannot afford it. It therefore follows that they cannot afford a tax increase. 434 SATURDAY, JUNE 4, 2005

Many of the uninsured also work for small businesses that cannot afford coverage. It makes little sense to increase taxes on these low and moderate income Vermonters, and offer in return an extremely limited policy that fails to offer some degree of protection from catastrophic health care expenses.

IX. H.524 Helps Wal-Mart Size Business and Hurts Small Homegrown Business Small businesses are a crucial economic engine for Vermont’s economy. They will suffer if unreasonable taxation stifles growth in this sector. Furthermore, imposing a payroll tax on small employers with slim profit margins is likely to result in lower wages for low and moderate-income employees, further exposing the regressive nature of the proposed tax.

Contrary to the oft-stated view of some legislators that large, retail employers are the primary culprits for the plight of uninsured Vermonters, survey data show that small businesses with fewer than 25 employees constitute the bulk of firms which do not offer coverage to their employees.

Consequently, a payroll tax on small businesses that can least afford to offer coverage and least afford to pay the new taxes will very likely force many of them to eliminate jobs, lower wages, or leave Vermont altogether.

Larger firms, like Wal-Mart, if they are even subject to this tax, are far more capable of paying it. As small homegrown companies close, larger multi-state and multi-national corporations stand to benefit significantly from the increase in market share.

State government cannot be all things to all people and still sustain a vibrant economy that allows individuals and small businesses the freedom and flexibility to pursue their own non-governmental pursuits and create jobs.

X. H.524 Jeopardizes Other State Services The fiscal risks of the approach taken in H.524 for taxpayers and non-health care state programs alike are enormous. The Legislature’s proposal would soon follow in the path of Medicaid and become the largest expense in the state budget, absorbing an ever-increasing share of tax revenues and denying resources to other priorities such as the environment, law enforcement and higher education programs, among others.

XI. H.524 Does Not Represent a True Consensus

JOURNAL OF THE HOUSE 435 H. 524 demonstrates a disappointing disregard for the need to collaborate and reach a broad non-partisan consensus.

This bill would have benefited from the expert opinion and point of view of individuals, employers, health care providers and Executive Branch personnel. Instead, the Legislature chose to ignore much of this counsel.

For example, H.524 includes a provision mandating hospitals to charge uninsured Vermonters, no matter how wealthy, no more than the average discount rate of payment received from health insurers and other third party payers. This provision was approved by the General Assembly despite the apparent absence of formal committee testimony and deliberation.

If testimony from hospitals and hospital regulators had been taken, the General Assembly would have learned that there might be more appropriate and effective ways to address what the legislators believe to be a problem.

XII. H.524 Ignores the Technical Concerns and Sets Unrealistic Expectations of Executive Branch Agencies and Departments Many other provisions of H.524 were approved by the General Assembly without serious consideration of the conceptual and technical concerns of the state agencies charged with implementing the bill.

For example, H.524 calls for the Office of Vermont Health Access (OVHA) to take the first steps needed to implement the new program in October 2005, to propose a budget for the plan in January 2006, to adopt payment methodology rules by February 2006, and to offer the benefit plan to uninsured Vermonters by July 2006.

The Tax Department is required by April 1, 2006 to create an entirely new tax system and program for the new payroll tax and the income tax surcharge, including the adoption of rules, the writing and printing of new and expanded forms, outreach and education to individuals and employers who would be paying the new tax, and actual collection of the new taxes.

H.524 calls for the Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) to establish a new regulatory program to implement the hospital spending cap and global budget law, and to develop mechanisms to monitor whether employers are dropping coverage of employees because of the new government program.

436 SATURDAY, JUNE 4, 2005 Each of these agencies repeatedly expressed explicit concerns to the General Assembly that the time lines and expectations imposed by H.524 were unrealistic, and that the agencies charged with implementing the new programs had not been appropriated the resources needed to accomplish the intent of the legislation.

H.524 also includes an extraordinary grant of authority to the Legislative Commission on Health Care Reform. According to the bill, all Executive Branch agencies would be obligated to “report to the Commission at such times and with such information as the Commission determines is necessary to fulfill its oversight responsibilities.” This constitutes unlimited power to demand whatever information, services and analysis the Commission wants from the Executive Branch, regardless of the cost or demands upon staff resources and implications for other essential programs.

These are not issues of health care policy debate, or matters of partisan dispute, yet the General Assembly refused to listen and ignored the facts, choosing instead to push ahead with great haste. XIII. Provisions of H.524 Ignore the Traditional Separation of Powers The Vermont Constitution, Chapter II, Article 3, provides that the Governor and his or her Executive Branch agencies shall exercise the executive power of the State of Vermont. Portions of H.524 appear to cross the line separating the legitimate lawful role of the Legislative and Executive Branches of government.

One section of H.524 confers on the Legislative Commission on Health Care Reform the power to use $20 million in taxpayer funds beginning in 2007 to issue requests for proposals, and to administer grants for the development of “integrated systems of care” pilot projects. This section goes far beyond the traditional and appropriate role of the Legislative Branch.

H.524 also exhibits a desire by the General Assembly to discount the expertise of the Executive Branch in health care policy. The reform of Vermont’s health care system is too important to be left only to the Legislature. Real reform requires the collaboration of the Legislative and Executive Branches of government, employers, health care providers, and individual Vermonters who will be affected.

XIV. H.524 Refuses to Recognize the Role of the Executive Branch in Reform H.524 creates the Legislative Commission on Health Care Reform and delegates to the Commission the critical functions of the Legislature’s plan, in

JOURNAL OF THE HOUSE 437 particular a series of studies intended to justify decisions already made, actions they have already taken and decisions they intend to make.

The studies to be conducted by this Commission are crafted in a manner that would appear to have a preordained result—a new government-run, taxpayer financed health care rationing plan.

The economic impact study directs a comparison of their proposal with the effect of the current system, without including in the comparison more realistic and responsible reforms that have been proposed. Furthermore, it is irresponsible to hastily impose a new system of taxation without first studying its full economic impact.

The financing study is designed to focus on public, taxpayer financing as the preferred means of financing health care in Vermont and suggests a reluctance to consider alternatives.

In addition, the General Assembly had a choice of whether to include on the Commission members appointed by the Governor on an equal footing, and individuals from outside of government. The General Assembly chose to constitute the Commission with eight legislators.

The Executive will appoint two members, but these appointees are considered so insignificant that they are not given any authority to vote on the critical decisions of the Commission. No private individuals or health policy experts were included.

Broad representation and participation is not only fair, but also would have made the process of health care reform far more likely to succeed.

If the General Assembly seeks a health care reform outcome that will be successful, and that reflects a broad consensus among the many individuals and groups affected, it must include all interested parties in the dialogue.

Instead, the General Assembly has appropriated to itself $775,000 to create a legislative bureaucracy and fund a public relations campaign promoting the preordained outcome of its studies.

XV. H.524 Would Not Reduce Administrative Costs Because it Fails to Account for ERISA, Medicare & Medicaid 438 SATURDAY, JUNE 4, 2005 In 2003, 27 percent of Vermonters were insured by ERISA plans that are exempt from state regulation, and 35 percent of Vermonters were insured by Medicare or Medicaid.

Even if the Legislature’s plan offers a comprehensive benefit to all Vermonters by 2009, federal ERISA law still allows large employers to design and fund their own employee benefit plans, and Medicare and other federal coverage programs will still exist.

As a result, there is unlikely to be any reduction in administrative costs at the level anticipated by advocates of new or consolidated government health care programs; a multi-payer system will still exist. For the same reasons, it is likely that cost shifting to other Vermonters will continue to be a problem.

XVI. H.524 Would Lead to Numerous Legal Challenges The sections of H.524 outlining the limited benefit regime provide that “an individual aggrieved by an adverse decision” has a legal right to appeal the decision to the Human Services Board.

While the section lacks a reasonable degree of specificity as to the standards and process for review, presumably this means that any beneficiary who wants a health care service, or services, not covered by the Legislature’s plan may appeal the decision to the eight-member Board.

In addition, any hospital or specialist physician that believes they should be paid more than the Legislature’s plan allows can seek higher compensation through the same process. Likewise, any pharmaceutical company that wants its drugs to be covered by their proposal will also have a legal right to seek a better deal.

Needless to say such a process could result in unnecessary and unreasonable increases in the programs expenditures, and substantially higher legal fees for the state—an observation that further exposes the unrealistic cost containment claims of this proposal.

XVII. Definitions of “Uninsured” and “Resident” are Too Vague In H.524 the definition of “uninsured” is very vague, and the definition of “Vermont resident” is very broad.

An uninsured Vermonter might include someone who decides to drop his or her existing coverage to join the artificially less expensive government plan. As a result, individuals with self-insured and private market plans will

JOURNAL OF THE HOUSE 439 experience higher costs as Vermonters migrate to it. Unfortunately, as the limits of the government plan become apparent to those who switch, there will be fewer and fewer affordable options to return to—eventually the only option for those individuals may be the government’s rationing program.

Also, if Vermonters insured in the private market decide to drop current coverage, or if businesses decide to drop coverage and pay the tax instead, or if residents from out of state decide to move to Vermont in order to receive expensive treatment not covered by insurance in their home state, there may be many more individuals enrolled in the program than estimated, and revenues may be inadequate to pay for their coverage without raising tax rates.

XVIII. The Negotiated Payments Section is Flawed H.524 contemplates that payment amounts will be “negotiated” with hospitals and health care professionals. The section as approved by the General Assembly is an unclear and flawed concept.

What if OVHA and the hospitals, and health care professionals cannot reach an agreement? It does not appear that the legislation delegates to OVHA the authority, at the end of failed negotiations, to set a payment amount.

Does this mean OVHA is obligated to pay providers whatever they want? Or does it mean that OVHA will set a payment amount, but the hospital or health care professional is authorized to appeal the decision to the Human Services Board? Could a basis for appeal be that OVHA failed to adequately consider the “actual costs” of the hospital or health care professional?

If so, this provision has the potential to be the source of significant medical inflation.

XIX. The Payroll Tax is Open to an ERISA Challenge The payroll tax in H.524 is vulnerable to an ERISA challenge.

A plausible and persuasive claim can be made that because, as a practical matter, the tax will be imposed principally on businesses that do not offer health coverage, the tax is nothing less than a legal mandate to offer coverage, or to offer a higher level of coverage than the business would otherwise offer. ERISA prohibits states from requiring employers to offer health care coverage, or from requiring employers to offer a prescribed level of benefits.

XX. H.524 Payroll Tax Revenue Estimates are Incomplete 440 SATURDAY, JUNE 4, 2005 The revenue estimate of the health care tax on employers ($28.3 million in 2006) is a conservative approximation. The analysis is restricted only to private employers offering no health insurance, and should also include the application of the tax on entities that offer a low level of health insurance at a cost less than the 3 percent tax.

In addition, it is difficult to determine how many firms offering health insurance to their employees will be affected by the tax, and how much additional revenue will be collected. More time should be taken, and more in- depth analysis conducted, to evaluate the impact of the payroll tax on Vermont’s small businesses and non-profits, and to develop a more accurate estimate of the revenue that will be raised from the tax.

XXI. H.524 Income Surcharge Tax Revenue is Likely Overstated The administration has found that assumptions of income growth in the uninsured population are too high and the assumed growth in the base due to increases in the uninsured pool is likely to be far too generous. Therefore, the revenue estimate of $15.6 million from the income tax surcharge is very likely overstated.

By utilizing more conservative assumptions of income inflation (1 percent vs. 3.2 percent) and income growth resulting from increases in the number of uninsured (assuming only 80 percent of new uninsured have a positive Adjusted Gross Income), the revenue estimate could be overstated by as much as $2 million.

As with the payroll tax calculations, and other areas of this bill, this legislation would have benefited from a more complete analysis of the income tax surcharge on the low and moderate income Vermonters who would be obligated to pay it. Likewise, the Legislature should have developed a more accurate estimate of the revenue that will be raised from the tax.

A key unresolved question for the income tax surcharge is how it addresses the many individuals who are not required to file income returns. H. 524 would impose a health care tax filing requirement on virtually every resident who is subject to income tax, regardless of whether they are required to file under the current tax code.

Many individuals who work may not have a current requirement to file. Many individuals who file are not required to file except to obtain a withholding refund. Also, many people with low Adjusted Gross Income are required to file because of low thresholds for certain types of income. For example,

JOURNAL OF THE HOUSE 441 married couples are usually not required to file if their gross income is less than $15,900, but a couple with $400 of self employment income is required to file, even if they have no other income. More thought should have been given to these, and other, implications—and the resulting complications—before moving forward with a regressive income tax surcharge on the working poor.

XXII. H.524 Calls for an Unrealistic Insurance Policing System H.524 directs BISHCA to “monitor whether persons who enroll in the Green Mountain Health insurance program were formerly covered by health insurance, and whether former insurance was self-paid or paid by an in-state or out-of-state employer.”

The legislation does not, however, indicate how this monitoring activity is to be accomplished, what resources are available to conduct such activity, or what authority has been conferred on BISHCA to carry out this task.

XXIII. H.524 Contains Many Other Poorly Designed Provisions The Pharmacy Cost Control section of the legislation, proposes a statewide preferred drug list (PDL) to include all Vermont health benefit plans. There is no certainty of any savings here, especially for the Medicaid program, because the number of Vermont-only lives will not generate the same rebates as the Medicaid pool that Vermont participates in that now includes ten states and 3.5 million lives.

In addition, Pharmacy Benefit Managers (PBMs) serving other Vermont insurers may not be able to duplicate rebates for all products in a single, Vermont PDL if they are not able to pool lives from other, out-of-state lines of business.

The legislation also proposes negotiating with manufacturers for lower prices including negotiating supplemental rebates. Approval of Vermont’s supplemental rebates by the federal Centers for Medicare and Medicaid Services (CMS) prohibited using Medicaid to leverage rebates in any other program including publicly funded programs. CMS has since allowed that they will consider permitting the inclusion of publicly funded programs but there has been no response to the formal request, and approval is unlikely for coverage for state employees or coverage under other state programs.

The Pharmacy Benefit Management section of the bill is modeled after legislation enacted in Maine. The Maine law is the subject of a pending 442 SATURDAY, JUNE 4, 2005 lawsuit claiming that the statute violates the federal ERISA law. Litigation in Vermont can therefore be anticipated.

PBMs have been very effective at consolidating consumer and payer bargaining power to achieve cost savings through negotiations with pharmaceutical manufacturers. While many individuals argue that PBMs have abused their market power, PBMs claim that directives such as the Maine law will cost consumers more. It would be more responsible to take the time needed to fully evaluate the impact of this section on Vermont’s health care costs.

Conclusion We are indeed very fortunate to have a medical community that provides high quality care; and when we need them most, they are there for us. The doctors, nurses, nurse practitioners, aides, technicians, and the administrative staffs at our hospitals, practices and clinics are intelligent, competent, hardworking, and dedicated to providing the highest quality patient care possible.

Complementing our primary care system is a family of community health services, and pro bono services so that no one who needs immediate care is turned away for lack of insurance.

Vermont must, however, continue to confront a serious health care crisis. Health care costs are simply too high for many Vermonters. For working families and their employers, insurance premiums have skyrocketed while low cost options are being eliminated as insurance providers abandon Vermont’s burdensome regulatory regime.

Patients are at risk of losing more direct control of their care and government is already failing to reimburse doctors and hospitals for the cost of treating the nearly one in four Vermonters covered by the state Medicaid program. As a result, those costs are shifted to the overwhelming majority of Vermonters who pay escalating private insurance premiums.

Vermont has the second most generous Medicaid program in the nation, and as a result we are headed for an unsustainable, multi-million deficit in the Health Access Trust Fund. This deficit represents a serious threat to the most vulnerable Vermonters who rely on this program and the taxpayers who fund it.

The worst thing we could do is rely entirely on expanded government programs for reform, a course that would cause Medicaid, and perhaps the

JOURNAL OF THE HOUSE 443 health care system as a whole, to crumble under the burden of its own weight. Instead, we must save Medicaid in a responsible way and develop reforms that will lower costs, improve quality and achieve universal access to affordable health care coverage.

True reform must be comprehensive. We need to do more than just change the financing method. If costs continue to increase at the current rate, it won’t matter what pocket the money comes from because they’ll all be empty.

We need to tackle the root causes of rising health care costs, open our system up to low cost options, encourage healthy decisions and preventive care, and attack health concerns at their inception. And we need to maintain a patient- centered system that offers more individual choice and keeps health care decisions in the hands of patients and doctors, not government bureaucrats.

Working together, universal access to affordable health insurance is a goal we can achieve in our state, but H.524 moves Vermont in the wrong direction. Therefore, based on my objections to H.524 as outlined above, and others, I am returning the bill unsigned to the House pursuant to Chapter II, §11 of the Vermont Constitution.

Sincerely, s/sJames H. Douglas Governor”