Final Day

On the final day of this year’s session we got an unexpected but a good surprise. The Conference Committee report on H. 264, a DUI bill, contains H. 79, the uniform adult guardianship and protective proceedings jurisdiction act. This was a bill that passed the House earlier this year but it did not appear that the Senate would act on it until next year. Members of our Elder Law, Disability Law and Probate and Truest Sections, should be very pleased by adoption of this Report.
On the property law front, we will not see enactment of H. 272, the private roads maintenance bill or S. 98, the licensed lender bill. Both will be on the top of our agenda to work on next year.
The VBA Board, at its meeting today, appointed Bill Dakin to represent the real estate bar on the energy audit disclosure working group created in H. 56. They also appointed Penny Benelli to represent the family bar in a study committee on child support enforcement created in S. 101.
There will be two more appointments dealing with probate matters for study committees created in H. 264, again, the DUI bill.

Thursday Morning Update

There are two updates this morning. The first is that the energy bill, H. 56, has passed both chambers. Included in that bill is a study committee to address the issues contained in the energy audit disclosure bill, H. 57. The VBA does have seat on that committee which has an extensive charge. Here is the language as passed:

Sec. 20d. WORKING GROUP ON BUILDING ENERGY DISCLOSURE
(a) Creation of working group. There is created a working group on
building energy disclosure to study whether and how to require disclosure of the energy efficiency of commercial and residential buildings in order to make data on building energy performance visible in the marketplace for real property and inform the choices of those who may purchase or rent such property.
(b) Membership. The building energy disclosure working group (the
working group) shall be composed of the following members:
(1) A member of the senate appointed by the committee on committees.
(2) A member of the house appointed by the speaker of the house.
(3) The commissioner of public service or designee.
(4) The secretary of commerce and community development or
designee.
(5) A real estate broker licensed in Vermont appointed by the governor
from a list of three names recommended by the Vermont association of
realtors.
(6) A representative of an entity appointed pursuant to 30 V.S.A.
§ 209(d)(2) to deliver energy efficiency services to multiple utility service
territories, designated by the entity.
(7) A real estate appraiser licensed in Vermont appointed by the
governor.
(8) A building construction contractor appointed by the governor.
(9) A representative of the Vermont homebuilders and remodelers
association designated by the association.
(10) A person who is an accredited provider of energy rating services
under the process adopted by the department of public service pursuant to
21 V.S.A. § 267, appointed by the governor.
(11) A person with expertise in energy policy appointed by the
governor.
(12) A person who is an active member of a local energy committee that
is part of the Vermont energy and climate action network, appointed by the
governor from a list of three names recommended by that network.
(13) A representative of a financial institution appointed by the governor
from a list of three names submitted by the Vermont bankers association and the association of Vermont credit unions.
(14) A representative of the Vermont housing finance agency designated
by the agency.
(15) A member of the Vermont Bar Association with experience in the
conveyance of real property designated by the association.
(16) A representative of the heating service industry designated by the
Vermont Fuel Dealers Association.
(c) Structure; decision-making. The working group shall elect two
co-chairs from its membership, one of whom shall be a legislative member.
The provisions of 1 V.S.A. § 172 (joint authority to three or more) shall apply to the meetings and decision-making of the working group.
(d) Issues. The working group shall consider the following:
(1) Whether there should be requirements to disclose building energy
performance, that is, to disclose the energy use of buildings in a standardized manner that allows comparison and assessment of energy use among multiple buildings.
(2) Requirements for disclosure of building energy performance that
have been adopted in other jurisdictions and model codes or statutes that have been published relating to such disclosure.
(3) If requirements to disclose building energy performance as described
in subdivision (1) of this subsection were to be adopted:
(A) To whom should such disclosure be made (e.g., prospective
buyers, prospective renters, the general public, the state).
(B) When such disclosure, if any, should be required (e.g., time of
offer for sale, execution of contract for sale, at regular intervals).
(C) Which properties, if any, should be exempt from such
requirements.
(D) For which markets (e.g., residential property, commercial
property, purchase of property, rental of property) such disclosure, if any,
should be required, and whether there should be a phase-in of any requirements for disclosure.
(E) What type or types of building energy ratings and audits should
be employed.
(F) Whether the state should subsidize the cost of energy audits (e.g.,
for low income housing) and what sources of funding would be used to support the subsidy.
(4) Any other issue relevant to the question of disclosing building
energy performance as described in subdivision (1) of this subsection.
(e) Report. On or before December 15, 2011, the working group shall
submit to the general assembly its recommendation on whether the state of Vermont should adopt requirements on disclosure of building energy
performance and recommended legislation on such disclosure if the general
assembly were to choose to adopt such requirements.
(f) Assistance. For the purpose of its study of the issues identified in
subsection (d) of this section and the preparation of its recommendation
pursuant to subsection (e) of this section on whether the state should adopt requirements on building energy performance, the working group shall have the administrative, technical, and legal assistance of the department of public service and of the agency of commerce and community development. For the purpose of scheduling meetings and preparing its recommended legislation pursuant to subsection (e) of this section, the working group shall have the assistance of the office of legislative council.
(g) Meetings; term of working group; reimbursement. The working group
may meet no more than four times during adjournment of the general
assembly, and shall cease to exist on July 1, 2012.
(h) Reimbursement. For attendance at meetings during adjournment of the
general assembly, legislative members of the working group shall be entitled to compensation and reimbursement for expenses as provided in 2 V.S.A. § 406; and other members of the working group who are not employees of the state of Vermont and whose participation is not supported by their employment or association shall be reimbursed at the per diem rate set in 32 V.S.A. § 1010.
The costs of reimbursement of members of the working group who are not
legislative members shall be allocated among the budgets of the department of public service and the agency of commerce and community development.
(i) Appointments. Within 30 days of this section’s effective date, each
entity required to submit a list of names to the governor pursuant to subsection (b) of this section shall make such submission. Within 60 days of this section’s effective date, the appointing or designating authority shall appoint or designate each member of the working group under subsection (b) of this section and shall report the member so appointed or designated to the office of legislative council.


The second update is the private roads bill. Here is the language of the bill as voted out of the Commerce Committee last night. It is on today’s Notice Calendar and could well pass the House this week. It will probably be January before the Senate acts on it however.

NOTICE CALENDAR
Favorable with Amendment
H. 272
An act relating to maintenance of private roads
Rep. Kupersmith of South Burlington, for the Committee on Commerce
and Economic Development, recommends the bill be amended by striking all
after the enacting clause and inserting in lieu thereof the following:
Sec. 1. LEGISLATIVE FINDINGS AND INTENT
The general assembly finds that:
(1) Fannie Mae (the Federal National Mortgage Association) is both a
major purchaser of residential mortgage loans on the secondary market and an
organization that sets the standards for the underwriting and legal requirements
for loans sold on the secondary market.
(2) The current Fannie Mae appraisal form contains a section for the
appraiser to comment on off-site improvements—including private streets—
and to indicate whether the improvements are publicly or privately maintained.
If a property is located on a community-owned or privately owned and
maintained street, Fannie Mae requires a legally enforceable agreement or
covenant for maintenance of the street.
(3) On January 31, 2008, Fannie Mae issued Announcement 08-01,
which specifies that Fannie Mae will permit the delivery of mortgage loans for
properties for which there is no such maintenance agreement or covenant,
provided that the property is located in a state that has statutory provisions
defining the responsibilities of property owners for the maintenance and repair
of private streets. Prior to this act, Vermont had no such statutory provisions.
(4) Since the mortgage crisis, Fannie Mae has become stricter in its
underwriting standards and in enforcing the private street maintenance
agreement requirement. Because the ability to sell mortgages to Fannie Mae
on the secondary market is critical to most mortgage lenders, this has delayed
mortgage closings and created uncertainty for Vermont homeowners
throughout the state.
(5) When a conflict arises among persons who share a private road but
lack an express agreement concerning the maintenance of that road, the
Vermont supreme court has applied common law equitable principles to
apportion the cost of maintaining the private road. In the reported decision
Hubbard v. Bolieau, 144 Vt. 373 (1984), the supreme court held that “when
several persons enjoy a common benefit, all must contribute rateably to the
discharge of the burdens incident to the existence of the benefit.”
(6) Vermonters have a long history of working together to share the
costs of maintaining private roads. Nothing in this act is intended to disturb
the many working arrangements that exist between neighbors in Vermont.
Instead, this act codifies a standard drawn from established principles of
Vermont law, and the act will apply to resolve conflicts regarding maintenance
of private roads only in the absence of a legally enforceable agreement. The
term “rateably” as used in this act follows the existing common law standard,
and continues to give courts the flexibility to examine the facts and
circumstances of each case.
(7) This act will facilitate the sales of real property, promote the
availability of secondary mortgage market financing, and reduce uncertainty
for Vermont homeowners.
Sec. 2. 19 V.S.A. chapter 27 is added to read:
CHAPTER 27. PRIVATE ROADS
§ 2701. DEFINITIONS
As used in this chapter:
(1) “Maintenance” includes activities related to the upkeep of a private
road in its usual condition or that are necessary to allow safe passage.
“Maintenance” shall not be construed to include an expansion of the private
road.
(2) “Private road” means a road or street other than a highway as
defined in subdivision 1(12) of this title that is owned by one or more persons
and used by more than one owner or holder of a recorded easement as a means
of access to one or more parcels of land.
§ 2702. PRIVATE ROAD MAINTENANCE
In the absence of a legally enforceable agreement—including obligations
established by covenants and requirements contained in deeds, state and local
permits, and land development and subdivision bylaws—regarding the
allocation of costs for the maintenance of a private road, the owners of
property that utilize a private road for access and the holders of recorded
easements with a right to use a private road for access shall contribute rateably
to the payment of the expenses for maintenance of the private road on account
of the common benefit enjoyed by each owner and easement holder.
§ 2703. ENFORCEMENT
If an owner or easement holder fails to pay after demand his or her rateable
share of maintenance costs as required under section 2702 of this chapter, an
owner or easement holder who suffers damage as a result may bring an action
in the civil division of a superior court where the private road is located for
damages or injunctive relief or both.
Sec. 3. EFFECTIVE DATE
This act shall take effect on July 1, 2011.
( Committee Vote: 10-1-0)

S.101 passed both chambers

The Senate yesterday concurred with the House proposal of amendment to this bill dealing with child support. Of special interest to family division practitioners is Section 2 which creates a child support enforcement study group to make recommendations for next year's sesison. Here is the authorizing language:

Sec. 2. CHILD SUPPORT ENFORCEMENT WORKING GROUP
(a) A working group composed of the director of the office of child
support, the administrative judge, the commissioner of the department of
corrections, the executive director of the department of state’s attorneys and sheriffs, the defender general, and a representative of the family law division of the Vermont bar association shall develop recommendations and a legislative proposal regarding:
(1) how the state can assist willing obligors to comply with child support orders;
(2) the use of civil and criminal contempt and any other strategies for
unwilling obligors;
(3) an approach to address arrearages due to the custodial parent, both
the large amounts that will likely never be paid and the small amounts that
keep an obligor from being in compliance;
(4) the value of license suspension as it relates to child support
noncompliance;
(5) the use of presumptive orders, alternatives, and strategies to develop an appropriate order when a noncustodial parent does not appear at a hearing;
(6) whether child support should continue to terminate at age 18 or
whether it should be extended if a child is still in college; and
(7) the feasibility of a family problem-solving docket that could address
issues of child support.
(b) The working group shall present its findings and recommendations to
the office of legislative council no later than November 1, 2011, and the
legislative council shall draft a bill implementing the proposal for
consideration by the senate and house committees on judiciary.

This morning Judges Gerety and Tomasi appeared before the Senate Judiciary Committee for their confirmation hearings. Judge Mello is expected to visit with the Committee next week. The hearings went quickly and were without any controversy. Due to the press of Senate business as the session winds down, neither interview lasted for more than 15 minutes and both were conducted before two or three of the five committee members. I’m sure the confirmation votes will be unanimous once the other members are briefed on the conversations. Each judge was asked a different set of questions though. Judge Gerety was asked about sitting in the family division and about consistency in sentencing. Judge Tomasi was asked about what becoming a judge requires one to ‘give up”. He was also asked about bias in favor of the state because of his tenure as an assistant attorney general. He assured the committee that is not an issue.
I mentioned S. 101 in yesterday’s post. I can report that the House Judiciary Committee voted the bill out with a small amendment designed to remove any doubt in a paragraph dealing with the court’s authority in waiving part of a surcharge. It will pass the House and I’m confident the Senate will concur.
Thanks for reading. Have a great spring weekend. The session will resume on Monday afternoon in what we all hope is the last week.

H. 88 UCCJEA

The Senate a few minutes ago adopted the House proposal of amendment on the uniform child custody jurisdiction and enforcement act. The bill will shortly go to the governor for signature meaning Vermont will join the other 48 states that have already adopted the UCCJEA. That leaves only Massachusetts.

I’ve waited long enough to update this blog; so here’s where I think we are as of now. I really hoped to have some final actions on bills to report but, as often happens, we’re still going back and forth between chambers. For example, the House amended H. 88, the UCCJEA as I wrote last week but it’s still on the Senate calendar. I’m hoping to hear the Senate concur this afternoon. Also, in late March the Senate passed S. 101, the child support bill that reduces the surcharge from 12 to 6% and creates a working group to examine child support enforcement. The bill went to House Judiciary where everyone, including me, forgot about it. I remembered it yesterday; brought it to the attention of House Judiciary; the court administrator; the administrative judge; and OCS. Everyone supports it and this morning, at my request, the committee reviewed it and I hope it will be out later today.
Two bills of interest to members of the Property Law Section are S.98, the licensed lender bill and H. 272, the private roads maintenance bill. Again, I had hoped to report on passage of both but I can’t. S.98, which came to the House well after the crossover date remains in the House Rules Committee. H. 272 is still in the House Commerce Committee. Enactment of either this year is now doubtful.
Yesterday the Senate Finance Committee agreed to add VBA property lawyer to the committee that will study the energy rating/audit issue and whether it should be mandated and disclosed as part of a sale. This was the thrust of H. 57 which remains in the House General Committee. The study committee language will appear in H. 56, the energy bill. Finally, H.21, the Uniform Limited Cooperative Associations (now “mutual benefit enterprises”) remains in the Senate Finance Committee for consideration in 2012.
Sorry I don’t have better or more complete news right now. Thanks for reading.

It’s always difficult to predict how the last weeks and days of a legislative session will go. For example, yesterday the Senate Institutions and the Senate Transportation Committees released their versions of the capital and transportation bills respectively. Normally each would then go to the Appropriations Committee for review and emerge days or weeks later. But yesterday, in a flurry of rules suspensions, the bills were taken up before they appeared on the calendar; were committed to Appropriations; reviewed and came back to the floor; and finally were read the second time, amended and are on track for passage today. Also, the Senate Finance Committee released the health care bill which was also committed to Appropriations. I don’t know if it will move as fast but as soon as it is out, along with the budget bill and the tax bill, the Senate will vote and return them to the House. The House will refuse to concur and all five bills will then go to committees of conference to work out the final versions. If all of that can happen by this Friday, adjournment can and should occur within two weeks, most likely Saturday May 7th. That’s not a prediction though!
Clearly, a lot is going on in the background and in informal conversations. The VBA still has some bills of interest either in transit between chambers or on the calendar. Yesterday, the Senate gave final approval to H. 88, the UCCJEA. A minor amendment was made in the Senate which the House will now react to. Our position is to move the amendment to another section; if the House chooses not to, we can live with the current version and perhaps revisit the bill next year. Passage is the priority this year.
The Senate may take up as early as this morning S. 98, the amendment to the licensed lender law. The amendment would ease the restriction on seller financing of commercial property and expand the definition immediate family members. But another broader fix, meaning seller financing of residential property not within current law, will have to be done at the federal level. See my post of last Friday; our congressional delegation is willing to help if we can get them some suggested language.
H. 56, the energy act has been amended in the Senate Natural Resources and Energy Committee to include a working study group to address the issues raised during testimony on H. 57, the energy audit bill. As you recall, four members of our Property Law Section testified in opposition to what was contained in H.57. Two weeks ago I had a conversation with a member of House General which has H. 57 and briefed him on how the VBA reacted to the Bianchi decision. Many of you may recall that we put together a committee that included all the parties with an interest in that case and worked out a draft bill for introduction the next January. I suggested that the same approach be used for the subject matter of H. 57. So that is what was added to H. 56. The only problem is that the VBA was left of the working group!. I brought that to the attention of Senate Natural and was asked to draft an amendment and present it today. I don’t think anyone opposes our participation. I know the Chair of the House Committee on General Affairs insists we be included.
The House Commerce Committee still has possession of H. 272, the private roads maintenance bill while it has seen passage of H.21, the limited cooperative associations act. That now sits in a Senate Committee for action in 2012. There are a number of other items of interest to the VBA that are in the pipeline. H. 79, the adult guardianship and protective proceedings act is in Senate Judiciary. The foreclosure “clean up” bill (H. 403) and the uniform principal and income act (H 327) are both in House Judiciary. We are trying to get some time during the final two weeks when conference committees are hard at work to brief the judiciary committee with an overview of both bills if we can. That will set the table for the next session. We also expect to see introduction of a rewrite of our nonprofit corporation statute next January. Again, we hope to brief the Commerce Committee before adjournment. Finally, the uniform collateral consequences of conviction act (S.38) remains on the senate calendar under the status of “ordered to lie”. In a sense it’s been tabled but can be called up by any senator with one day’s notice.
I’ll update you soon; thanks for reading.

I was away all week at ABA Day in Washington with VBA President Teri Corsones; President Elect Jim Carroll; ABA State Delegate Fritz Langrock; and VBA Delegate to the ABA Rich Cassidy. We did our annual visits with members of our congressional delegation presenting issues of concern to the ABA and to the VBA. The usual top issue for the ABA is funding of the Legal Services Corporation. This year they a request for support on a new bill calling for tax intercepts of unpaid judicial fines. The VBA presented our congressmen the issues our property bar is facing under the licensed lender law and the federal SAFE Act. They were unfamiliar with the issue but all three expressed concerns about its effect on Vermonters. We were invited by each to submit our drafts of amendments to either the bill or the proposed HUD regulations, which we’re told will be out in early May to address the issue. I’ve shared this with Property Law Section Chair Hall Miller and would invite any of you with suggestions to forward them to me or to Hal.
The House has passed the Uniform Limited Cooperative Associations Act and the Senate is due to take up the UCCJEA today. The private roads bill is still in Committee with some more testimony due early next week. I’ll update this blog next week on things that I need to investigate further before reporting. I heard this morning that the Senate morning committees which includes Judiciary will stop meeting after next Tuesday. The “big” bills are due to hit the Senate floor next week which will limit all committee time: appropriations; taxes; capital construction; transportation; and health care.
Thanks for reading; sorry for the delay in posting.

Yesterday afternoon the Senate finally chose its three members of the Judicial Nominating Board. They are Senators Ashe, Campbell, and Westman. Now that membership is complete, the Board can hold its organizational meeting and the court administrator can send out the notice of vacancy for the seat presently held by Judge Keller.
The Senate advanced a couple of bills yesterday also. S. 77, the bill relating to testing of private water wells, passed. Also, the Senate passed S. 52, a bill to protect employees from abuse at work. As passed the bill calls for a committee to study the issue of workplace bullying. The VBA has been named as a member of the committee.
This morning the Senate Judiciary Committee completed its work on H. 88, the UCCJEA and recommended its passage on a 5-0 vote. They made a couple of minor changes which I am certain will be acceptable to the House. Then the governor’s signature will leave Massachusetts as the only state to not enact this law. Finally.
The House Commerce Committee is still working on H. 272, maintenance of private roads while its uniform limited cooperative associations bill (H. 21) was sent to the Ways and Means Committee for its review. Those entities are being renamed “mutual benefit enterprises” though.
I spoke with Senator Ann Cummings about S. 98, the licensed lender bill; she chairs the Senate Finance Committee where the bill was referred almost two weeks ago. She seemed surprised to know the bill was still there, so we should see it on the calendar soon. She did say that she has a deadline on next Friday, April 15 to get bills out. I assume that means all committee chairs are looking at that date. Finance has their hands full, though, with the tax bill and eventually the health care bill. That committee is meeting nights this week and next.
A subcommittee of our Business Associations Law Section is working on a rewrite of our non-profit corporation statute. That draft, in bill form, should be done this summer in plenty of time for introduction in January 2012. I’ve asked the Commerce Committee chair for an hour for some members of that working group to present an overview of what will no doubt be a pretty expansive piece of legislation. He seemed favorable and just asked that I stay on top of their calendar so we can get it in when there is an opening.
I’m trying to get H. 79, the adult guardianship jurisdiction act on the Senate Judiciary calendar soon; also, we’re trying to get the House Judiciary Committee to set aside some time before adjournment to get a briefing on the foreclosure statute “clean up bill” that was introduced again this session. Stay tuned for more on both of these.
Thanks for reading.

Yesterday I notified members of the Property Law Section about H.272 and the Employment Law Section about H. 450. Both bills are worth reading if you occasionally dabble in these areas. Here is a link to 272: http://www.leg.state.vt.us/docs/2012/Bills/Intro/H-450.pdf and here is the link to 450:http://www.leg.state.vt.us/docs/2012/Bills/Intro/H-450.pdf . H.272 is a bill that would meet Fannie May’s requirement that each state have a statute regarding allocation of costs for maintenance of private roads. Testimony this morning in the House Commerce and Economic Development Committee revealed that some loans were denied due to the lack of a written agreement among the owners of a private road and the lack of a statute that governed. Existing written agreements would still control if this bill is passed. The bill codifies what the Vermont Supreme Court ruled in Hubbard v. Bolieau, 144 Vt. 373 (1984).
Hal Miller was scheduled to testify but had to be rescheduled due to illness. The Vermont Bankers’ Association President Chris D’Elia; rep. Willem Jewett; Peoples United loan officer Christy Mitchell; Vermont Association of Credit Unions President Joe Bergeron; Addison County Realtor Claire Wallace; and Vermont Mortgage Bankers’ Association President Jason Pidgeon all testified in overwhelming support of the bill.
I doubt the committee will be getting back to the bill this afternoon their calendar seems pretty full. More time is set aside for tomorrow morning. Actually, that conflicts with scheduling for the Senate Judiciary Committee when it returns to the UCCJEA- the child custody bill. I’ve been planning on being there tomorrow morning but will now try to divide my time and report back to you in the afternoon.
H.450 is being introduced today as a committee bill. That means it goes on the Notice Calendar for tomorrow and to Action on Friday, if it is not committed to another committee. Again, I’ll keep you posted as this moves along.
I’ll report when I have news. You should know that, as we approach the end of the session, much happens in the background and I either don’t have any news to share or I may not have news that I can share at that time. But I am keeping track of the issues and bills we’ve been concerned about. As always, thanks for reading.

The House General Affairs Committee returned to a bill we thought had seen its last days- H.57, the bill that would require energy ratings or energy audits before property could be sold. The results of the rating/audit would be delivered to the buyer before property could be sold and those results could be grounds for the buyer to cancel the contract of sale.
The VBA’s Property Law Section has been clear in its opposition to the bill and its harmful impact on conveyancing. The bankers’ and realtors’ associations oppose it. I don’t think this bill will move this session but it could well arise in January.It’s worth your keeping an eye on it and communicating with any of the members of that committee that you may know. Here is a list of members and contact information:
Head, South Burlington (862-2367) helen@helenhead.com
Moran of Wardsboro (896-9408) jmoran@leg.state.vt.us
Savage of Swanton (868-3566) bsavage@leg.state.vt.us
Andrews of Rutland (747-6916) mandrews@leg.state.vt.us
Bouchard of Colchester (879-2522) bbouchard@leg.state.vt.us
Ram of Burlington (881-4433) kram@leg.state.vt.us
Smith of New Haven (877-2712) hsmith@leg.state.vt.us
Stevens of Waterbury (244-4164) tstevens@leg.state.vt.us
The Joint Assembly on Retention is just finishing. Here are the results:
CJ Reiber 156-1
Dooley, J. 128-31
Johnson, J. 146-11
Skoglund, J. 149-7
Burgess, J. 155-1


The Superior Judge votes were:
Bent, J. 149-6
Corsones, J. 155-1
Devine, J. 151-5
DiMauro, J. 151-4
Eaton, J. 154-2
Kupersmith, J. 133-22
Levitt, J. 146-7
Rainville, J. 151-2
Wesley, J. 147-8

As always thanks for reading.

Now that the House has advanced the tax bill, the health care reform bill, and the appropriations bill over to the Senate there is plenty of committee time and work awaiting. The breaks in the schedule will be on Wednesday afternoon when the joint session to vote on retention will happen and perhaps all day Thursday when both the capital and transportation bills will hit the House floor.
This morning started in House Commerce where the committee returned to H. 21, the uniform limited cooperative associations act. The entity will be renamed “mutual benefit enterprise” both the distinguish them from coops as we know them and to meet the objections of some food coops. The committee hopes to have the bill out this week and passed over to the Senate. The Senate had its own version of the bill introduced at the beginning of the session (S.7); it is really the exact same language and, in fact, the Senate Finance Committee has heard some testimony on it earlier in the year. So even though the bill did not make the “crossover” date it could still pass and be enacted into law this year.
The House Judiciary Committee now has H. 258, a bill passed out of the Committee on Natural Resources and Energy that has the following statement of purpose:
Statement of purpose: This bill proposes to require the secretary of natural
resources, the land use panel, or the natural resources board to provide at least 20 days during which an aggrieved person may comment on a draft assurance of discontinuance or administrative order. The bill also requires a draft assurance of discontinuance or administrative order to be published for notice on the relevant website of the secretary of natural resources, the land use panel, or the natural resources board. In addition, the bill would prohibit the environmental division from signing an assurance of discontinuance or administrative order until any additional filings or proceedings are complete, including those filings or proceedings subsequent to a timely motion for intervention. The bill would also allow for public notice and comment on certain environmental tickets issued by the secretary of natural resources.
Witnesses lined up for today were:
David Mears, Commissioner, Department of Environmental Conservation, Agency of Natural Resources
Thomas Durkin, Environmental Judge, Vermont Superior Court, Environmental Division
Karen Horn, Director, Vermont League of Cities and Towns
John Hasen, General Counsel, Vermont Natural Resources Board
Gary Kessler, Director, Department of Environmental Conservation
Warren Coleman, General Counsel, MacLean, Meehan and Rice
Louis Porter, Lake Champlain Lakekeeper, Conservation Law Foundation


The Chief Justice and Justice Dooley were finally able to testify before the Senate Appropriations Committee this afternoon on the Court’s FY2012 budget. I reported on their House testimony on February 24th. Today’s testimony was very similar and equally well received. The CJ did state his concern for some backlogs that have developed; he blamed that on the courts’ continued furlough days. He wants to “buy them back” if money could be found in the general fund. His fear is well place- that furloughs become the norm and the court never gets out of this cycle. Justice Dooley responded to a question from the Chair about e-filing and its roll out. He said the court had signed a three year contract with the developers and that contract expires at the end of 2012. So, although that was the target for complete implementation of e-filing, he said it may not be fully implemented until the end of FY2012- June 30, 2012. Finally, Senator Illuzzi reported some constituent complaints about delays in the family division. He offered to work with the court on increasing the budget allocation for retired judge time in order to find the people to move some cases. he invited the court to return with its ideas.
BTW, tomorrow morning the House General Affairs Committee will be returning to H. 57, the energy audit bill. I reported a the Mid Year Meeting that seemed to be dead as it missed the crossover deadline; I’m not sure what is up with it but will report to you as soon as I know. Also, for property law practitioners I’m hearing from legislators whoa re hearing from their constituents about licensed lender law problems. As these stories spread around the statehouse many more people are becoming aware of the restriction on seller financing of residential real estate and how that’s affecting conveyances that most of you have been handling for years. The solution is still to be found but rest assured that the issue becomes more real every day. I’ll keep you posted.
Thanks for reading.

Today was the first day this week that I felt I had something worth reporting. If you follow what happens under the golden dome you’re aware that the House spent just about all week in floor debate. First it was the tax bill; then the health care reform bill was up next, keeping the House in session until 12:45AM today. third reading of health care will happen this morning followed by the appropriations bill later. The speaker anticipates a 9 or 10PM adjournment tonight. So, house committees really have not met. The Uniform Limited Cooperative Associations Act was up for consideration in House Commerce but that was delayed.
On the Senate side, Rich Cassidy was back on Tuesday to respond to some amendments to the Uniform Collateral Consequences of Conviction Act; then this morning Senator Illuzzi brought the Senate Judiciary Committee a host of amendments so extensive that they include re-titling the bill. This will no doubt cause some delay on the Senate side.
The licensed lender bill, S. 98, will also be delayed because an amendment, also by Senator Illuzzi; that sent the bill back to the Senate Finance Committee. The amendment can be found in today’s Senate Calendar on page 334.
Administrative Judge Amy Davenport and VBA Board member Amber Barber testified in the judiciary committee this morning on H. 88, the UCCJEA; both urged the legislature to act quickly on the bill.
As always thanks for reading.

As you know by now both Judges Kupersmith and Levitt made it through the retention committee with unanimous votes of 8-o. Judge Keller, however, decided to withdraw his request for retention after losing the support of the committee in its 6-2 vote against his retention. The joint assembly vote will be held on Wednesday, March 30th beginning at 1PM.
Although I was attending our Mid Year Meeting last Thursday and Friday and therefore away from Montpelier I can report on what took place on matters of interest to VBA members. First the Senate Judiciary Committee advanced a committee bill on child support that does contain language for study of child support enforcement. It should appear on the Senate Calendar this week.
The Uniform Collateral Consequences of Conviction Act has passed second reading in the Senate and may see final action there tomorrow. Then it’s off to the House.
I know members of our Property Law Section are concerned about restrictions in the licensed lender law against holding mortgages on residential property unless you hold a license. S. 98 addressed some of the problem but it excludes residential property. BISHCA has successfully argued that adverse consequences would result if the Vermont licensed lender changes to be in conflict with the federal SAFE Act. The bill was pulled off the calendar at the end of the week at the request of the Chair of the Senate Finance Committee Ann Cummings. The Committee considered it briefly and reported it back to the full Senate without amendment. It seems that any further changes, at least in the Senate, will not happen.
Also of interest to property lawyers is S. 77 on the Senate Action Calendar. It is a bill that requires testing of water wells after initial construction. So I’m sure the first question readers will ask is what will happen if this requirement is not complied with; here’s the answer (note the delayed effective dates of parts of the bill):
Sec. 3. 27 V.S.A. § 616 is added to read:
§ 616. PRIVATE WELL TESTING; DISCLOSURE OF EDUCATIONAL
MATERIAL
(a) Prior to the execution of a purchase and sale agreement for a property
not served by a public community water system, the seller shall provide the
buyer with informational materials developed by the department of health
regarding:
(1) the potential health effects of untreated well water; and
(2) the buyer’s opportunity under the agreement to test the potable water
supply.
(b) Noncompliance with this section shall not affect marketability of title.

Sec. 4. DEPARTMENT OF HEALTH; EDUCATION AND OUTREACH
ON SAFE DRINKING WATER
The department of health, after consultation with the agency of natural
resources, shall revise and update its education and outreach materials
regarding the potential health effects of contaminants in private sources of
drinking water in order to improve citizen access to such materials and to
increase awareness of the need to conduct testing of private water sources. In
revising and updating its education and outreach materials, the department
shall update the online safe water resource guide by incorporating the most
current information on the health effects of contaminants, treatment of
contaminants, and causes of contamination and by directly linking users to the
department of health contaminant fact sheets.

Sec. 5. EFFECTIVE DATES
This act shall take effect upon passage, except that 10 V.S.A. § 1981(a)
(testing of new wells) and 10 V.S.A. § 1981(d) (well test reports) shall take
effect on January 1, 2013.
After having spoken with Judge Tim Tomasi at the Mid Year Meeting last week I was reminded that he and Judges Mello and Gerety are still awaiting confirmation hearings in the Senate. I’m going to ask this week when the Senate Judiciary Committee plans to hold those hearings.
So this is a short update; I’ll add to it as I get caught up on last week’s events. As always thanks for reading.

We are still waiting for the Senate to select its members of the Judicial Nominating Board but the Governor has appointed his two choices. They are Kathy Pellett and Joseph Watson. They join house members Tim Jerman, Bill Lippert and Joe Acinapura. You have already chosen Peg Flory, John Kellner and Water Judge as the bar’s representatives.
Last night’s judicial retention hearing was probably the most difficult one I have sat through since 1987. The committee decided to put off the joint assembly vote until Wednesday, March 30th from next Thursday, the 24th. They did so because, although last night was to be the meeting at which votes on retention were to be taken, they did not vote on all the judges. They withheld decision on Judges Keller, Kupersmith, and Levitt; they will reconvene Thursday at 4:30. They did however unanimously approve the retention of everyone else, three with one abstention in each vote. Here are the votes in summary form:
Justices Burgess, Johnson, Reiber, and Skoglund; 8-0
Justice Dooley: 7-0-1
Judges Corsones, Devine, DiMauro, Rainville, Wesley: 8-0
Judges Bent and Eaton: 7-0-1
The committee did not get to discuss Judges Kupersmith or Levitt last night instead spending all its time on Judge Keller. The committee seems badly divided on his retention. His detractors are many, but he also has a number of supporters, many who are members of the bar. There really was no criticism of his judicial knowledge, preparedness, scholarship, etc. All the criticism goes to his demeanor. He is described as rude and as a “bully” in the courtroom. Some of the committee members also complained of his conduct before their committee in each of his two appearances there. One senator said he was troubled that the judge “misrepresented” the Judicial Conduct Board reprimand. For another take on this, check today’s Burlington Free Press as there was a reporter present.
I expect the vote will be taken Thursday. I will be out of the building at our Mid Year Meeting in Burlington. I can report the vote when I learn it but won’t be able to report more fully than that.

I haven’t reported to you since the Town Meeting break as I was away last week at the ABA Bar Leadership Institute. So I missed the legislature’s first week back. The "crossover” deadline has passed and today’s calendars from both chambers are full. What that means is that as of last Friday, all bills were required to be out of the primary committee of jurisdiction and appear on the Notice Calendar. The exceptions are the money bills- budget, transportation, capital, and tax bills. With such full calendars it’s likely that each chamber may spend as much or more time on the floor as in committee as they work through their calendars.


We did make some progress on issues we have been following and some we are supporting this year. The adult guardianship bill has passed the House and is in a Senate Committee. Rich Cassidy was successful in moving the Uniform Collateral Consequences of Conviction bill out of Senate Judiciary; it’s on the calendar for action this week. Vermont could be the first state in the country to adopt it! The House has already passed UCCJEA; so we’re three for three on uniform bills.

Property law practitioners will be happy to hear that H. 57 (energy audits) did not make it out of committee while they may be unhappy to hear that the licensed lender issues are still up in the air. The Family Law Section had a discussion last week about a draft bill advocated by the Office of Child Support. Section Chair Penny Benelli will testify tomorrow morning on the comments made by Section members. Judge Robert Bent was in Senate Judiciary this morning to comment on the draft child support bill. As this is or will be a committee bill it does not yet have a bill number; one will only be assigned if the committee advances the bill to the floor. (Last week we circulated the draft to members of the Family Law Section; if you are not Section member and would like to see it contact me and I can email a copy).

Here is what the draft purports to do:

Statement of purpose: This bill proposes to reduce the surcharge on unpaid
child support, and provide a mechanism for the court to discharge all or part of a surcharge upon a finding that the obligated parent lacked the ability to comply with the underlying support obligation, if it serves the interest of justice; allow child support orders to be extended until the child is age 22 if the child is enrolled in college; and establish a new combined process of civil and criminal contempt of a child support order.

Judge Bent’s concern was the combination of civil and criminal contempt; he prefers having the sanction of criminal contempt as a tool and didn’t want to have it become ineffective. I think the committee is heading towards a more comprehensive review of child support enforcement, perhaps after a study group makes recommendations for consideration next January. But there appears to be support for lowering the surcharge (from 12 to 6% not compounded). I’ll update this tomorrow after the morning testimony.

Tonight at 4:30 the Judicial Retention Committee is scheduled to meet and vote on the retention of all 15 candidates. However there is plenty of talk about two of the judges and a possible delay in the vote. I’ll fill you in tomorrow on what happens tonight. The joint assembly vote is set for Thursday, March 24th at 10:30. That may or may not be pushed back too.

Thanks for reading; sorry for the dry period but I’ll be trying to keep you up to date regularly now, well, maybe after this week’s Mid Year Meeting at the Hilton this Thursday and Friday. See you there.

Yesterday Bennington County Assistant Judge Jim Colvin reported to both judiciary committees as required by H. 470 on the effects of restructuring on county budgets. He began by saying that the November elections resulted in 12 new assistant judges- an unusually high number. Naturally, much training needs to be done to bring them all up to speed and he credited the judiciary, especially Pat Gabel, for the efforts made to so that. He did hand out an interesting report that showed that the savings predicted during the debate last year actually happened. For example, due to the transfer of county employees to the state payroll county budgets have decreased by $2 million. The counties lost about $450,000 in small claims revenue so the result will be a reduction in county taxes of about $1.5 million. All things considered, the promises made were largely fulfilled. There are now eight assistant judges hearing judicial bureau cases; five hearing uncontested divorces; and four hearing small claims. Of the twelve newly elected judges, eleven have indicated an interest in taking traffic and uncontested divorce cases.


The House yesterday selected its members to the Judicial Nominating Board. They are Representatives Tim Jerman; Joe Acinapura; and Bill Lippert. They join our members- Walter Judge; John Kellner; and Peg Flory. I believe the governor has selected his two appointments although I do not have those names yet; the Senate has yet to appoint its three members.

At last nights’ retention public hearing most of the judges under consideration heard nothing. Judges Corsones, Bent and Wesley never heard their names mentioned. The same was true for Justices Dooley, Skoglund and Johnson. Chief Justice Reiber was praised by Environmental Division Docket Clerk Kathleen Loot for his handling of the restructuring process last year. She told the committee how he presided over a “open” process where everyone was treated with respect.

Two relatives (sister and sister in law) of a criminal defendant tried for the third time and recently sentenced to a long sentence criticized Judge Michel Kupersmith for his “bias” and the way in which he handled a jury that claimed to be deadlocked. He is said to have repeatedly interrupted the defendant’s testimony and one of the witnesses complained that the judge not only told the defendant that he was in denial but apparently said “your family is in denial too”. Finally, a father who lost primary parental rights and responsibilities raised issues with the Supreme Court’s knowledge of family law, alleging they do not understand the complexities of family relationships. He urged them, and particularly, Justice Burgess to take some training in family law. He also complained about the role of the Vermont trial Judges’ Association participation in recommending trial judges to sit on the Judicial Conduct Board. Lastly a victim of a crime complained about the conduct of the proceedings he was party to, even though the presiding judge has now retired. The Chair of the committee, Sen. Alice Nitka, was very patient with letting this witness tell his story. He ended by connecting it to the present group of judges standing for retention by saying that there is a “culture in the courts” that continues and allows people such as he to be mistreated.

That pretty much sums up the news. As you know the session will be in recess next week for Town Meeting. That’s a good time for any of you that may run into senators and representatives at Town Meeting or just around town to let them know that extending the sales tax to legal services is harmful to access to justice.

Thanks for reading this blog.

Here’s the follow up from yesterday’s hearing in House Appropriations. The court’s budget request is in line with the governor’s proposal for 2012. The request is a budget of $39,348, 918. As all budgets in departments and branches do, it contains a line item labeled “vacancy turnover savings”. That line should total $2,999,180 in order to make the budget meet its target. The court, however, said it would fall short of that target by $167, 180. That shortfall is a result of the restructuring bill of 2010 (H.470) which was not fully funded. The largest part of the savings line-$1,113,000- comes from the 12 furlough days the court has scheduled for FY12. So, we know that each court day costs about $100,000. Justice Dooley told the Appropriations Committee that if the court could add anything to the budget it would be to “buy back” some court closing days.


There was much discussion of the results of restructuring and its effect on staffing. Bob Greemore told the committee that before restructuring the judiciary had 356 state funded positions and 43 county paid positions for a total of 399 employees. Now it has 358 positions, all paid for by state funds. Most of the county staff merged into the state employee pool with a few exceptions: 2 resigned; 19 took voluntary retirement; and 5 were demoted into lower positions than they previously held. None were laid off.

As far as filling vacancies go, it is unlikely that an authorized judicial spot that has never been filled will be anytime soon. There are open positions in Windham County (probate register) and one in Chittenden (caseload coordinator). The position held by recently retired Judge Katz will likely not be filled before July 1 at the earliest if then.

Bennington County Assistant Judge Jim Colvin will be addressing both Judiciary Committees later this morning about the AJ’s report on restructuring; I’m planning to get to both presentations and will update you later. Don’t forget that tonight is the second and last public hearing on the retention of the justices of the Supreme Court as well as Judges Cortland Corsones, Robert Bent and Jon Wesley. It’s at 7PM in Room 11.

Two bills of interest will be introduced today. The first, H. 327 is the uniform principal and income act. The second, H.325, amends the procedure for small claims. Here is its statement of purpose:

Statement of purpose: This bill proposes a number of measures intended to simplify and reduce the costs associated with small claims procedures. The bill proposes to require that: (1) the plaintiff send a demand letter to the defendant specifying the amount of compensation sought before filing a small claims lawsuit in court; (2) the summons to the defendant include the date of the initial court hearing, which must be at least 21 days after the date that the summons is served; (3) the defendant be served with the summons and complaint, although all subsequent transmissions of documents in the case may be sent to the defendant by first class mail; and (4) the court enter default judgment for the plaintiff if a defendant who has been served with notice of the lawsuit fails to appear at the hearing.

This one is brand new to me; I’ll see where it goes from here.

Here is a quick update on the licensed lender issue. We had a very short hearing at the Senate Committee on Economic Development last evening. Although it was to begin at 4:30, the Senate scheduled a floor session for that time so we waited until about 5PM. Then, three of five senators had to leave so the hearing was abbreviated. BTW, thanks to Tom Dailey who offered to drive up from Bennington; I’m glad he didn’t as it was hardly worth the effort. Anyway, I was able to briefly present the problems as you have been discussing them on the list serve. I was followed by Tom Candon of BISHCA who was accompanied by Steve Knudson. Their main point was compliance with the SAFE Act and any state deviation would result in federal licensing of mortgage servicers. The committee seems anxious to solve the problem, maybe trying to be a test case or maybe just taking the gamble that nothing bad will happen. They are definitely interested and will continue to work on this. Steve said that many of the problems you are facing come from a lack of understanding the current law! So here’s where things ended: I was asked and am now asking everyone one of you to share your experiences with failed conveyances or delayed conveyances with resulting increased costs because of the current law. I need to collect your stories this week or at the latest early next week; share them with BISHCA; and return to committee during the week after the Town Meeting break. Feel free to email me directly (bpaolini@vtbar.org).


Today began with the Senate Judiciary Committee returning yet again to S. 38, the collateral consequences bill. Since its last hearing, the Office of Professional Regulation at the Secretary of State’s Office has voiced some concerns that licensing boards may lose some of their authority. There is also controversy over who should be delivering information to a defendant. The bill leaves that to the prosecutors; they objected arguing that it would be giving advice to an opposing party. So today’s draft asks the court to do it; they now object! The Attorney General’s Office appeared today and objected to being named as the host of a website where all collateral consequences would be listed; their objection- increased workload. They argued further that it will increase the workload and the number of hearings for the courts. Committee chair Dick Sears will return to consideration of the bill after the Town Meeting recess, most likely on Wednesday, March 2nd. One of the committee’s issues to resolve will be the effective date of the bill; there may be talk of delaying it a year. Much more to come on this.
I just returned from the House Appropriations Committee where the Chief Justice, Justice Dooley and Bob Greemore presented the judiciary’s FY12 budget. they were well received. I’ll post more detail on that tomorrow.

Friday February 18, 2011

After resting in the House Judiciary Committee for nearly four years, the new child custody jurisdiction and enforcement act (H.88) is on its way to the Senate. Later today the judiciary committee will return to H. 79, the adult guardianship bill. Uniform law commissioner Stephanie Willbanks will return and present what we hope is a work out of the objections/questions raised last Friday.


For those of you that practice in the area of medical malpractice you should be aware of H.266 introduced yesterday. It’s a bill that would establish screening panels to review med mal claims upon filing. The bill bears reading; it can be found here.

The real property bar had a small victory this week when the Tax Department re-posted the fillable PTTR on its website. It’ll remain there and can be used until March 31st. Please attend our Mid Year Meeting for an important session on use of the ePTTR effective April 1st. on Tuesday next at 4:30 the Senate Economic development committee will set aside some time to address the licensed lender issues many of you have either had first hand experience with or are trying to understand. I do have a copy of a draft bill that is not on the legislature’s website yet as it has no bill number. I can send anyone a copy if you’d like to read it. Also, today, S. 77 was introduced by the Senate Natural Resources Committee; it would require private well testing as a condition of sale.

Really the main focus of this week for me has been on judicial retention. On Tuesday evening Justice Dooley, and Judges Wesley and Levitt appeared before the committee to support their retention and answer comments made in the legislative questionnaires. All judges use this process as a time of reflection on what they have accomplished and where they intend to go if retained for six more years. Justice Dooley spoke to the changes being made in the judicial branch and his increasing role in administration of the courts, including budgeting. He did point out that the supreme court has cut about one month off the time frame for releasing decisions in 5 judge cases. Approximately 50 to 55% of its caseload is, however, handled by 3 judge courts.

Judge Wesley responded to some criticism in the surveys that labeled him as “impatient”. He spoke at length of cases he’s seen that involved foreclosures. Judge Levitt had to respond to criticisms that she “prejudges cases”; that she is biased against criminal defendants; and that she is biased against men (in family cases). She readily admitted she could have handled a particular case differently. The night went quickly with no serious issues raised.

On Thursday night the first of two public hearings was held to give anyone the opportunity to speak to the committee about the candidates for retention. Last night the committee focused on the following: Judges Kupersmith, Keller, Levitt, Eaton, Rainville, Devine, and DiMauro. All were present except Judge Rainville. No comments were made about Judges DiMauro, and Devine; only passing comments of support for Levitt and Rainville. The focus of the night was the negative survey results of Judges Kupersmith and Keller and the 12 witnesses spoke to either or both of them. All were supportive of retention with one glaring exception: two pediatricians from FAHC accused Judge Keller of failing to protect a child victim of physical abuse. “He showed a lack of judgment in cases of abuse of children and puts kids’ lives at risk”, said the first doctor. The second witness presented the committee a letter opposing retention signed by 7 doctors; I haven’t asked to read the letter nor do I know much about the case or cases they were talking about.

The rest of the night was taken up by favorable testimony from lawyers and court staff; here’s a quick list. Dan Albert, Kurt Hughes, Jim Murdoch, court operations manager Barb Hungerford, victim services provider Ann Atkins and court officer Debbie Stevens supported Judge Keller. Superior Court Clerk Christine Brock supported Judge Kupersmith as did Maryanne Kampmann, Bud Allen, Superior Court Clerk Gaye Paquette; all also mentioned support for Judges Keller and a few added Judges Levitt and Rainville.
Thanks for reading; have a good weekend.

Update at 2:34:
H. 79- adult guardianship bill

After last Friday’s hearing at which Stephanie Willbanks explained the bill to the House Judiciary Committee some questions were raised by a VLA lawyer with the Disability law Project. Those questions were discussed and settled between VLA, Professor Willbanks and Probate Judges Belcher and Balivet. A few minutes ago Section Chair Devon Green, appeared before the committee to present a few amendments that arose from that discussion. The committee approved the bill on a straw vote and will have a member of the committee meet with and explain it to the House Human Services Committee next week; then they will take a vote and send it to the floor. The straw vote was unanimous, by the way.

Tuesday, February 15, 2011

Today was an interesting day in the tax on services issue. After having been away last week, I returned to see that H, 243, a committee bill containing the recommendations of the Blue Ribbon Tax Structure Commission was introduced by the House Ways and Means Committee. Normally when a committee introduces a committee bill, it goes directly on the calendar for action the next day. In this case the bill was introduced and then committed back to the Ways and Means Committee. Here’s the statement of purpose as it appears in the bill:


Statement of purpose: This bill proposes to begin the tax reform process
recommended by the Vermont Blue Ribbon Tax Structure Commission for
creating transparency in Vermont’s tax system by providing for a high level of
ongoing scrutiny of the multiple exemptions embedded in Vermont’s major tax
structures. This process would be implemented by an initial, prospective sunset of nearly all tax incentives in the personal income tax, sales tax, meals and rooms tax, and property tax. It is not the intent of the commission to actually repeal all of the tax incentives set out in this bill, but by these prospective repeals, to ensure that the legislature does scrutinize each of these incentives and make an active decision as to whether to continue each incentive. This bill also proposes to implement the commission’s recommendation to extend the sales tax to services provided at the retail level.

I understand that some members of the committee were not happy with signing on to the bill as it could be interpreted as their supporting various parts of it, including the tax on services. I’m still awaiting my turn to testify before the committee. There’ll be plenty more on this before May
It was just about two years ago when our legislature raised the homestead exemption to $125,000; well, now H. 253 would raise it to $300,000. That bill was just introduced today and it’s way too early to know whether it will even get a hearing.

On the Senate side, S. 68 was introduced today and it would establish an 80% rule for verdicts in civil cases. This is the same language that was introduced in the last two sessions but didn’t go anywhere.
I had the opportunity to sit in on testimony of two of our uniforms law commissioners today. Carl Lisman appeared before the House General Affairs Committee on H. 101, a bill that would authorize a common interest community to change the number of units in the community that may be leased upon a vote of 67 percent of the unit owners. Later in the day, Peter Langrock appeared before the Senate Finance Committee in support of S. 7, the uniform limited cooperative associations bill. This is the same bill as H. 21 being worked on in the House Commerce Committee. That in itself is pretty unusual- the same bill moving forward in each chamber at the same time.

The UCCJEA (H. 88) passed second reading in the House on a voice vote with no opposition. One more favorable vote and it’s off to the Senate. H. 79, the adult guardianship bill I’ve written about before is being worked on outside of committee and should be poised for a move soon- hopefully before the town meeting recess.

Tonight Justice Dooley, Judges Wesley and Levitt are scheduled to be interviewed by the Judicial Retention Committee. Tomorrow, Senate Judiciary will be returning to S. 38, collateral consequences. The licensed lender bill hearing expected for today will be delayed at least a week, while the child support bill won’t get any attention next week. it will most likely see action after the town meeting recess.

Sunday, February 13, 2011

Now that I’m back from the ABA meeting I wanted to do a quick post and update you on what happened while I was away. Of course these reports are not first hand but appear as related to me by people in attendance. First, and perhaps the easiest to report, is that the UCCJEA (H.88) is out of committee and on the House Calendar for action on Tuesday. Also, another two uniform bills may be moving along almost as quickly. On Friday, Prof. Stephanie Willbanks testified on H. 79, the adult guardianship and protective proceedings jurisdiction act, while the day before Rich Cassidy returned to the Senate Judiciary Committee to continue his advocacy on S. 38, the uniform collateral consequences of conviction act. There are other uniform bills in the pipeline. The uniform limited cooperative association bill and, still in the drafting stage, the uniform principal and income act. It’s been a busy session thus far and will only get more complicated as the weeks roll on.


This Thursday will see the first public hearing on the judges and justices facing retention. The next hearing is the following Thursday; both begin at 7PM in Room 11. See my blog post of February 4th for the days each judge and justice will be the subject of the hearing. And please testify if you so desire.

Four of our members appeared before the House General Affairs Committee in opposition to H.57, the bill requiring energy audits before a property can be sold. Those speaking against the bill, so far at least, were Jeff Wick; Bill Dakin; Brian Amones; and Jeff Kilgore. I’ve heard back from some and here is an email that Jeff Kilgore sent me that I am reprinting with his permission:

“There were four of us who testified: in order, me; Brad Cook of Building Performance Services, LLC, an energy auditor from Warren; Peter Tucker, President of VAR; and Brian Amones. I was scheduled last went first. Unlike all that followed, I didn't sugar coat my dislike for the bill, didn't offer assistance. At the end of my presentation when I asked if there were any questions, there was just silence. When I sat back down the lobbyist-attorney for VAR said it was a good presentation-forceful. Cook was very good. Pointed out technical flaws from his professional vantage point. Explained there was a difference between ratings and audits. Almost seemed as if bill wanted a rating, a number you could shop around with (I've got a 8 for 250k, hmmm, I've got a 7 for 260k kind of thing). Said a decent audit was 400 - 650 at least. Forget about the ones for $200-$250. He said "audit going to cost too much money." Average repairs required approx $15k. He pointed out that FL energy legislation a bust; NV inspectors have no training; Austin TX, lots of audits; little in way of upgrading. Tucker of VAR very smooth. He smoothed over any feathers I have ruffled by saying VAR always wants to help; but came out against the bill. Then Brian added a more human touch explaining in his practice, it would have an impact on transactions. In the give and take with the three speakers that followed me it came out that it would take some 60 years at point of sale to audit all homes in VT. It should be made voluntary. Rep Bouchard said Efficiency VT should pay for inspections.”

Friday, February 4, 2011

Here is a summary of the meeting between Jim Knapp, Liam Murphy, myself and the Tax Department that I mentioned in yesterday’s post. This summary was sent by Bill Johnson of the Tax Dept. I haven’t spoken with Liam but Jim Knapp agrees it is an accurate report of the meeting:


Seems to me that yesterday’s meeting was constructive. I think the following summarizes the results of the meeting.

• We would put back up the fillable pdf form (before it is made available again, we will put the disclaimer that the form is only valid until March 31, 2011). I will let Liam know when it is available again.

• Split the functions of the verify / submit button and create two buttons.

• Make it more apparent that they are able to print out a transaction before it is 100% complete and in a format that is the same as the final form (needs something like a DRAFT watermark).

• In addition, we can talk about additional changes including

• Give users an easier way to delete a second buyer (or seller, I would think) if one is accidentally enters.

• On form but not our back end system, include an option for multiple dates for acquisition of the property.

• Add school district name to the SPAN dropdown.

• In the Act 250 Disclosure section, allow users to mark multiple options for D2.

• Give users a button that allows them to go to comment field more easily.

As for these changes, the ability to print out a transaction prior to completion is a difficult one for us and while we will do this and do it in a way that makes it clear that people cannot file these as valid PTTRs, we will monitor how people use the draft form. If too many people actually decide to file the draft form with the Department as a return, we will need to change the draft form in some way that prevents this from occurring. Hopefully, this will be a non-issue. Also, I included the issue of deleting the second buyer/seller above. Because there is already a delete button for this (I believe there is anyway), I’m not sure that this really is an issue – we’ll continue to look into it.

From our perspective, most of the other issues from your memo have either already been fixed or represent educational issues. I think in the last part of our discussion we were able to explain why some of these things are technically non-issues and that when a person understands the system, the perceived problem like the closing date disappears (actually, I believe we structured the closing date logic to try to be responsive to comments that Liam made during our earlier meetings).

We also talked about scheduling the training seminars. Jim Knapp will be the principal instructor and Tom and I agree to have Grace and Michelle attend the two sessions and help Jim. Sessions will be in March. We will need to talk with VIC next week to understand how quickly they can make the two major changes from above.
                                                            *******
I’ve just been told that the House General Affairs Committee wants to take testimony on H. 57, AN ACT RELATING TO DISCLOSURE TO POTENTIAL BUYERS OF A BUILDING’S ENERGY PERFORMANCE. This is something we need to watch. I know the property law list serve has seen a lot of discussion about it and I’ve just been asked to recruit witnesses.

Today the Senate Judiciary Committee, as expected, returned to both child support and to S. 38, the uniform collateral consequences of conviction act. On child support OCS Executive Director Jeff Cohen and Bob Greemore presented the committee a summary of their research and ideas. They were able to respond to the idea of mandating support payments while a child was in college; no state does that. OCS proposed reducing the surcharge to 6% from the present 12%. They are also working on re-wording the “802 notice” to make it very clear that motions to modify can and must be made in a timely way. One idea that intrigued the chair was the waiver of filing fees if a parent were to apply to OCS for services (i.e. making all wage withholding IV-D cases). In that case, OCS, a state agency doesn’t pay the filing fee AND, better still, the federal government reimburses the state 66% of that fee. Everybody seemed to like that outcome!

Anyway, where things were left is that Jeff, Greenie and Michelle Childs, legislative counsel, will be meeting to work up a bill draft by Friday, February 18th with a hearing date on the draft set for Wednesday, the 23rd. This would be introduced as a committee bill. The process is a bit backward from the usual. Instead of a bill being introduced and committee to a committee, a committee bill is written in committee and sent to the floor. I’ve notified the Chair of the VBA’s Family Law Section to be on tap for that date.

Then the committee transitioned to S. 38, the UCCCA. They heard from Assistant AG John Treadwell and Defender General Matt Valerio; the committee ran out of time before hearing from Bob Greemore. The AG’s office says the collection and publication of the consequences of conviction is s good idea but, until a complete “list” is compiled, requiring that they be given to a defendant on multiple occasions will only create problems. He proposed actually compiling that list; that seems close to impossible. Matt Valerio told the committee that the VBA Board has endorsed this bill and he stressed the often lifelong consequences on young people. So, the committee agreed to return to the bill next week on both Wednesday and Thursday.

Finally, the House Judiciary Committee will review H. 78 next week. That’s the uniform adult guardianship and protective proceedings jurisdiction act that’s been endorsed by the VBA Board, the Elder Law Section, and the Probate and Trust Section.

I will be away next week (after Monday) attending the ABA Mid Winter Meeting and unable to report to you. I will be monitoring emails and will respond. Thanks for reading, as always.

JUDICIAL RETENTION SCHEDULE

PRELIMINARY JUDICIAL RETENTION SCHEDULE 2011



Fri. 2/11 First Committee meetings with Justices and Judges

11:00 a.m., Room 11   11:00 a.m. -12:15 p.m.

Hon. Paul Reiber
Hon. Denise Johnson
Hon. Brian Burgess


1:00 p.m. - 2:30 p.m.

Hon. Cortland Corsones
Hon. Robert Bent
Hon. Michael Kupersmith


3:00 p.m. - 4:30 p.m.

Hon. Gregory Rainville
Hon. Theresa Di Mauro
Hon. Mark Keller
Hon. Harold Eaton
Hon. Thomas Devine

Tues. 2/15   5:00-7:00 p.m., Room 10

Hon. John Dooley
Hon. John Wesley
Hon. Linda Levitt


Thurs. 2/17 Public Hearing #1   7:00 p.m., Room 11

Hon. Michael Kupersmith
Hon. Mark Keller
Hon. Linda Levitt
Hon. Harold Eaton
Hon. Gregory Rainville
Hon. Thomas Devine
Hon. Theresa Di Mauro



Thurs. 2/24 Public Hearing #2    7:00 p.m., Room 11

Hon. Paul Reiber
Hon. John Wesley
Hon. John Dooley
Hon. Cortland Corsones
Hon. Justice Denise Johnson
Hon. Robert Bent
Hon. Marilyn Skoglund
Hon. Brian Burgess
Feb. 28-March 4 Town Meeting Week Recess

Fri. 3/11 Follow-up Comm. meetings with Justices and Judges

9:00 a.m. -10:30 a.m.  Room 11
Hon. Justice Paul Reiber
Hon. John Dooley
Hon. Denise Johnson
Hon. Marilyn Skoglund
Hon. Brian Burgess



11:00 a.m. - 12:30 p.m.

Hon. John Wesley
Hon. Cortland Corsones
Hon. Robert Bent
Hon. Michael Kupersmith
Hon. Linda Levitt



1:30 p.m. - 3:00 p.m.

Hon. Gregory Rainville
Hon. Theresa Di Mauro
Hon. Mark Keller
Hon. Harold Eaton
Hon. Thomas Devine


Tues. 3/15 4:30 p.m  Comm. Meeting to deliberate, vote and make reporting assignments
Thurs. 3/24 10:30 a.m. Joint Assembly

Thursday, February 3, 2011

Well, after not contributing to the blog for a couple days it’s time to catch you up on what’s been happening. It was really not an overly busy week for me on the issues the VBA is most interested in. Tuesday and yesterday the House Ways and Means Committee took testimony on the income tax recommendations in the Blue Ribbon Tax Structure Commission report. I’m on the witness list for when they get to extending the sales tax to services.


This morning the House Judiciary Committee took a huge step towards enacting H. 88, the Uniform Child Custody Jurisdiction and Enforcement Act. As I’ve written when it was introduced, this is a bill that’s been around for a few years but never acted upon. Vermont and Massachusetts are the only two states left to enact it. Uniform law Commission Richard Cassidy did a great overview of the bill as well as a section by section explanation that, I’m certain, left no doubt in the minds of committee members both what the bill does and why Vermont needs it. He was followed by Administrative Judge Amy Davenport who began her testimony by saying “no matter what else you do this session, please pass this bill”. She talked about her experiences with interstate issues and made it clear to committee members why the tools in H. 88 would help the process. The last witness was VBA Board member and President-Elect Nominee Amber Barber who spoke as a family division practitioner. She focused on the enforcement tools in the bill and how they will help move cases. Clearly the committee “got it”. They were struggling to find any advocates who might oppose it. The only witness they didn’t get to was a representative of the Vermont Network Against Sexual and Domestic Violence. They will weigh in a later date in full support of the bill. We may finally see this enacted into law!

I just returned from a second meting with Tax Commissioner Mary Peterson and other members of the department along with Jim Knapp and Liam Murphy. Jim and Liam traveled down to Montpelier again to discuss the ePTTR. I think their voices (and the comments many of you made on the Property Law Section list serve) were heard and I think you’ll be seeing some action soon. Liam and Jim will sum up what was accomplished; run it by the tax department; and get it out to the list serve. Since I’m on that list, I’ll copy over the summary here when I get it. BTW, I have a 9 page collection of issues taken from the list serve if any of you (not on that list serve of course) want to see it, just let me know. Also, the VBA will be planning a 2 hour training session at the Mid Year Meeting on March 18th about the ePTTR. We’ll make special arrangements to allow you to bring your real estate paralegal if you have one. We also want to reach out to the family and probate bars and encourage their attendance even if their exposure to conveyancing may be sporadic.

Tomorrow I expect the Senate Judiciary Committee to return to their discussion of child support and to S. 38, the Uniform Collateral Consequences of Conviction Act. I’ll update after those meetings take place. Thanks for reading.

Friday, January 28, 2011

A lot happened today in the statehouse and I’ll try to report it fully. But before I do that I want to report that the results of your voting for lawyer-members of the Judicial Nominating Board have been released. John Kellner and Walter Judge have been re-elected while Peg Flory is the new member from the southern district. Peg has previously served on the JNB as a House member so the bar will be bringing some well needed experience to what may prove a board with many new legislative (as well as gubernatorial appointments naturally) members. No other appointments have yet been made. I believe that will happen on Tuesday.


So, back to today; we’ve finally been successful in getting a hearing on the UCCJEA (H.88) in House Judiciary. The committee will do an overview of the bill next Thursday morning.

S. 1 passed both the House and Senate and is on its way to the governor for signing next week. So, the de novo appeal from probate court (soon to be probate division) to civil division (formerly superior court) will remain in place and not be repealed on February 1st.

For those of you with a civil practice focusing on medical malpractice, be advised that the House Health Care Committee will begin discussion of tort reform (yes, here we go again) next Wednesday afternoon. The VBA, with members on both sides of that courtroom, has sat this out in the past but I will attend and report to you what happens. If anyone reading this would like to weigh in on this, let me know and I’ll try to get you on a witness list.

Senator Illuzzi, Chair of the Senate Committee on Economic Development, Housing, and General Affairs, is working on a draft committee bill dealing with the licensed lender law and the problems with owner financed sales. There is no bill or language yet but we’ve been advised to be ready for a hearing on Tuesday, February 15th. I’ll post more information when I have it and will keep the Property Law Section list serve up to date. Again, witnesses are encouraged to share their experiences with the committee. If you’d like to be heard, let me know.

I spent a good portion of this morning in the Senate Judiciary Committee where two experienced lawyers addressed the committee on different issues. First, David Silver came up from Bennington to testify on S. 16, a bill related to confidentiality of cases accepted by the court diversion project. There was an interesting and engaging discussion among committee members but unfortunately not enough time to really make any headway. I’m sure the committee will return to it when they have the time.

Then Rich Cassidy, one of our uniform laws commissioners, presented S. 38, the uniform collateral consequences of conviction act. This bill also perked up the committee and a good conversation ensued; the committee will get back to it during the week of February 8th. Here’s a brief summary from the Commission’s website:



In 1974, 1.8 million people, or 1.3% or the adult population, had been imprisoned at some point of their life. By 2001 that number rose to number 5.6 million people, or 2.7% of the adult population. The Department of Justice estimates that if the 2001 imprisonment rate remains unchanged, 6.6% of Americans born in 2001 will serve prison time during their lives. In addition to those who have served prison time, an even larger proportion of the population has been convicted of a criminal offense without going to prison. According to a 2003 report of the Department of Justice, nearly 25% of the entire population (some 71 million people) had a criminal record.

Concern about the impact of collateral consequences has grown in recent years as the numbers and complexity of these consequences have mushroomed and the U.S. prison population has grown. Collateral consequences are the legal disabilities that attach as an operation of law when an individual is convicted of a crime but are not part of the sentence for the crime. Examples of collateral consequences include the denial of government issued licenses or permits, ineligibility for public services and public programs, and the elimination or impairment of civil rights. There is a real concern on a societal level that collateral consequences may impose such harsh burdens on convicted persons that they will be unable to reintegrate into society.

The Uniform Collateral Consequences of Conviction Act, promulgated by the Uniform Law Commission in 2009, is an effort to improve public and individual understanding of the nature of this problem and to provide modest means by which people who suffer from these disabilities may, in appropriate circumstances, gain partial relief from those disabilities.

The Act facilitates notification of collateral consequences before, during, and after sentencing. Under the provisions of the Act, states are to create a collection of all collateral consequences, with citations and descriptions of the relevant statutes. At or before arraignment individuals will be advised of the particular collateral consequences associated with the offense for which they are charged. Notice is also to be given at the time of sentencing, and if an individual is sentenced to prison, at the time of release. Formal advisement promotes fairness and compliance with the law

The Act provides mechanisms for relieving collateral sanctions imposed by law. The Act creates an Order of Limited Relief, designed to relieve an individual from one or more collateral consequence based on a showing of fitness for reentry. The Order does not automatically remove the consequence, but does remove the automatic disqualification imposed by law. A state agency retains the ability to impose the consequence on a case by case basis and if public safety would be compromised. The Act also creates a Certificate of Restoration of Rights. The Certificate is granted to individuals who demonstrate a substantial period of law-abiding behavior consistent with successful reentry and desistance from crime. Issuance of a Certificate facilitates reintegration of those individuals who have demonstrated an ability to live a lawful life.

Thursday January 27, 2011

Members of our Property Law Section and our Family Law Section should be especially interested in what was happening today. Earlier this morning I heard that the House Judiciary Committee wants to schedule a hearing on H. 88, the UCCJEA- finally! It may happen as early as next Thursday if some things fall into place. Stay tuned. Downstairs in the Senate Judiciary Committee Jeff Cohen, Director of OCS, appeared and presented the Office’s Challenges for Change report. You can read it here.
He told the committee that OCS is handling about 21,000 support cases and collected $55 million last year. That reflects a compliance rate of about 70%, Jeff said. During his testimony he found himself peppered with questions from committee members especially from Dick Sears, Committee Chair. Sears offered a suggestion that sounded like “amnesty” for non compliance due to the “great recession”. But it wasn’t clear what he meant; it could mean waiving filing fees for motions to modify- motions that should have been filed months ago. It could mean a waiver of surcharges. In fact, Jeff suggested it may be time to revisit the interest rate of 12% given our economic situation. Anyway, the Chair asked Jeff to meet with legislative counsel Michelle Childs and Court Administrator Bob Greemore. He wants them to discuss the “amnesty” as well as a proposal to require that child support continue past 18 for children in college (mandatory versus permissive). He also thought, in light of a decision by Judge Pearson in Office of Child Support ex rel Kylie Brown v. Willis Allaire, that the time may have come to “overhaul…child support collection and enforcement”. I have a copy of that decision if anyone wants it; let me know. This morning’s hearing follows closely upon a conversation had by members of our Family Law Section in the last week or so. This may present some opportunities for the Section to really make a difference.

On the property law front, the House General and Military Affairs Committee, to which H. 57 was referred did an overview of the bill and heard from its lead sponsor Margaret Cheney. If you are not familiar with the bill AND do property work, I’d advise a read here.
Here are some relevant portions:

Statement of purpose: This bill proposes to require, at the time a commercial or residential building or unit is offered for sale, the seller or agent to complete a statement of energy performance; to inform potential buyers of their right to obtain the statement; and to supply the statement to a buyer prior to any such sale. The bill also proposes to group these and other provisions relating to building energy and process fuel efficiency found in different titles into one chapter within Title 30 (public service).
§ 72. SCOPE

This subchapter applies to the sale of all new and existing residential

buildings, residential units, commercial buildings, and commercial units, and

real property containing such buildings or units, but does not apply to any of

the following:

(1) A transfer or change of title to real property or the right to possess

real property by reason of inheritance, gift, marriage, or divorce.

(2) An involuntary transfer of title resulting from default on an

obligation secured by real property.

(3) The sale of a low energy use building.

(4) The sale of a building that does not contain conditioned space.

(5) The sale of real property that 1 does not contain a building.

(6) The sale of a building that is used only as temporary living quarters

for persons engaged in the pursuit of game or wild animals.

§ 75. DISCLOSURE OF STATEMENT ON SALE

Prior to the sale of any interest in a building, real property that contains a

building, or a unit that is within the scope of this subchapter, the seller shall

provide the statement of energy performance to the buyer, who shall

7 acknowledge receipt of the statement by signing a copy of the statement.
§ 78. ELECTION NOT TO CLOSE

Notwithstanding any law or contractual provision to the contrary, with

respect to a building, real property that contains a building, or unit that is

within the scope of this chapter, a prospective buyer may without penalty elect

not to close on or take title to the building, property, or unit if the seller has not

complied with this subchapter, and any deposit shall be returned immediately

to the buyer.

I advised the committee chair, South Burlington Representative Helen Head, that the VBA Property Law Section would like to be heard if this bill should come up for committee action. It’s hard to tell right now if that will happen but I’ll keep my eye on it. I’m working with the Vermont Association of Realtors on this and on the tax on services proposal. That bill, H.122, will be introduced at 1PM when the House comes back into session. That’s the bill we need to watch. The VBA Board has lined up against the idea of taxing legal services for years and we’ll get the chance to offer our views soon. Again, I notified the Chair of Ways and Means that I want to testify when they get to that portion of the bill. I sat in yesterday on the testimony of two witnesses, one favoring and one opposing extending the sales tax to services. This is a long long way from happening but it must be monitored.

This afternoon I expect the House will advance S. 1, the quick fix to the judicial restructuring bill, H. 470. I’ll let you know tomorrow where that goes.

Thanks for reading.

The Budget Battle Begins.

I just returned from the Governor’s budget address and can report that he said he is opposed to raising taxes in order to close the budget gap. That’s an important part of the budgeting process for us as we try to avoid having to ask our clients to pay a 4.5% sales tax on all of our invoices. Now it is possible the legislature could send him a bill with the tax increase; but that would set up a battle (showdown?) between the governor and the legislature. That just doesn’t seem likely now does it? I’ll continue to watch the developments here and will keep you posted.

Thanks for reading.

Another lawyer joins the House

Assistant AG Rebecca Ellis of Waterbury was sworn in this morning to replace Sue Minter who left the House to become the Deputy Secretary of the Agency of Transportation. That brings to 13 the number of lawyers in the House. Welcome Rebecca! She will sit on the House Natural Resources Committee.
Also this morning, across the hall the Senate appointed its 4 members to Judicial Retention. They are: Alice Nitka; Joe Benning; Peter Galbraith; and Sally Fox. The committee should begin work soon. I'll post the schedule of meetings and public hearings as soon as I have it.

Sales Tax on Services? Yes, legal services included!

I am reprinting a memo sent to me by VBA member and CPA Steve Schindler that he sent to legislative leaders and members of the Vermont Society of CPAs. This is an important issue that all of us should continue to monitor. Here is Steve's memo:

             The Top 10 Reasons why Vermont should not assess a sales tax on services:

1. Services are Already Subject to the Income Tax. It is not “unfair” to exempt services from the sales tax, because services income is already subject to the income tax, less some relatively minor amount for overhead (assume for argument’s sake that 80% of services income is subject to the income tax). Sales of products, on the other hand, are generally not subject to the income tax, because the cost of the product is deducted as a “cost of goods sold,” and only the markup, less some amount for overhead, is subject to income tax (assume for argument’s sake that 10% of product sales income is subject to the income tax). The sales tax is largely a back-stop to the income tax, because without a sales tax on products, products would move through the system essentially tax free. Imposing a sales tax on services would “double-tax” services income.


2. Sales Tax Should Only Be Imposed at “Point of Sale” Transactions. The sales tax is imposed at “point of sale” transactions, where someone pays a sales price, plus tax, before leaving a store with a product. The types of services that we presently tax are typically incident to a point of sale transaction, like charges for delivery or installation, unless delivery and installation are separately stated on the invoice in which case they are not taxed under current law. Amusement charges, admissions to sporting events and theatres, telecommunications, utility charges, and printing charges, are subject to a sales tax at point of sale because they are an intangible product produced by a seller using the seller’s facilities. Amusement charges, etcetera, are not personal services.


3. Services are Not “Point of Sale” Transactions. Service businesses do not engage in “point of sale” transactions. Instead, service providers do the work, send a bill, and wait for later payment. As any service provider will tell you, sometimes the payment received does not equal the amount billed. If a bill is not paid in full, the service provider will essentially eat the tax on the transaction, and will have to revise its accounting and books to reflect that a different amount of services revenue and tax were received compared to what was billed. Many customers of service providers also pay their bill over time, which would further complicate accounting for, and compliance with, a sales tax on services.


4. A Sales Tax on Services Would Be Very Complicated. The sales tax on products is one of the most difficult and complicated taxes to understand and implement. You only need to review Chapter 233 of Title 32, and go through a sales tax audit with the Vermont Department of Taxes, to see how mind-numbingly complex, and esoteric, the sales tax can be. There are currently no fewer than 66 exceptions (Sections 9741 - 9744) to the sales tax (and its cousin the use tax), and 44 definitions (Section 9701), required to implement the sales tax. Each of those exceptions has already been vetted through the legislature and is therefore worthy. To revisit these exemptions would be a huge undertaking, counterproductive and duplicative. A sales tax on services would be equally as complex, if not more so, and would have to include its own long list of exemptions and exceptions.

5. Tax Compliance Burdens Would Be Very Onerous. For businesses that are service providers and do not sell products subject to the sales tax, the added compliance burden to compute, disclose, collect, report and pay a sales tax on services would be very onerous. Every law firm, accounting firm, engineering firm, handy man, hair dresser, gardener, consultant, delivery service, realtor, instructor, inspector, etcetera, etcetera would have to prepare and file not one, not two, but at least 12 sales tax returns each year (one return each month), along with at least 12 payments. The burdens of assessing, collecting, accounting for, and paying sales tax on services would be a real and heavy burden on service businesses. Not to mention the added burden on the Tax Department to register all these new tax collectors, and process their returns and payments every month. And because the sales tax is a “trust fund” tax, any slip-up and underpayment of tax could be assessed personally against the business bookkeeper or owner with steep penalties and interest.


6. Vermont’s Sales Tax Rate is Already Competitive. Vermont’s sales tax rates are already competitive, and in fact are lower than our surrounding neighbors, except New Hampshire. But, there is little we can do to compete with New Hampshire, short of eliminating the sales tax altogether.


7. Vermont Would Become Uncompetitive Compared to All of Our Neighboring States. Now, we have to compete with New Hampshire’s zero percent (0%) sales tax rate on retail goods, which we know hurts Vermont’s retailers. If we impose a sales tax on services, we will have to compete with New Hampshire, Massachusetts and New York’s zero percent (0%) sales tax rate on services, which is sure to hurt Vermont’s service providers, compared to all of our neighbors, not just New Hampshire.


8. Vermont Would Be Branded as a “High Tax State.” Being the only state in the union to tax services, we would be an obvious target for the label “High Tax State,” and the administrative and compliance burdens of this tax would also render us a “High Burden State.”


9. The Sales Tax is a Regressive Tax. The sales tax, being a flat rate tax, is a regressive tax because its rates do not increase with a taxpayer’s ability to pay, and lower income people tend to spend a higher proportion of their income on day to day expenditures on goods and services, versus savings. Regressive taxes are generally thought to be less fair.


10. A Sales Tax on Services Would Shift the Sales Tax to Vermont Residents. Much of the Vermont sales tax on products is paid by visitors to our state. That is one advantage to having an attractive state with a substantial tourism industry. Payments for services, on the other hand, are largely local transactions utilized by local people, so the burden of a sales tax on services would fall more heavily upon local Vermonters than upon visitors. If the overall sales tax rate were lowered, the affect would be to shift some proportion of the sales tax to local Vermonters.

In short, a sales tax on services in Vermont would be ill-conceived and unworkable. It would be unfair, complicated, burdensome and not competitive. A sales tax on services would not meet the Commission’s Guiding Principles of Fairness, Simplicity, Transparency or Competitiveness. And a sales tax on services would no doubt result in higher taxes as the rate creeps up over time.

I know this is a long post but I thought it important to fully reprint what Steve said. Many thanks to him for his effort.
Thanks for reading.