The Senate Was Called to Order by the President

Friday, May 5, 2006 1527

Journal of the Senate

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Friday, May 5, 2006

The Senate was called to order by the President.

Devotional Exercises

Devotional exercises were conducted by Senator John F. Campbell of Windsor District.

On motion of Senator Leddy, Senator Campbell’s remarks were ordered journalized and are as follows:

“Heavenly Father,

“Help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

“Help us to remember that the pierced, tattooed, disinterested young man who is having difficulty making change is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

“Remind us, Lord, that the scary-looking bum, begging for money in the same spot every day, is a slave to addictions that we can only imagine in our worst nightmares.

“Help us to remember that the old couple walking annoyingly slow through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.

“Heavenly Father, remind us each day that, of all the gifts you give us, the greatest gift is love. It is not enough to share that love with those we hold dear.

“Open our hearts not just to those who are close to us, but to all humanity. Let us be slow to judge, and quick to forgive, and to show patience, empathy and love.

“Amen”

Pages Honored

In appreciation of their many services to the members of the General Assembly, the President recognized the following-named pages who are completing their services today and presented them with commemorative posters:

Erin B. Banfield of Montpelier

Chelsea Downey of Manchester Center

Paul Fischer of Burlington

Maer Gillespie of Barre

Kelsey Heston of Richmond

Hannah Kornfeld of Norwich

Hillary Laggis of Hardwick

Emily McIntyre of Bomoseen

Caroline B. Pardo of Colchester

Georgie Wilton of Rutland

Joint Resolution Adopted on the Part of the Senate

Joint Senate resolution of the following title was offered, read and adopted on the part of the Senate, and is as follows:

By the Committee on Health and Welfare,

J.R.S. 69. Joint resolution urging Congress to amend the federal Deficit Reduction Act of 2005 to eliminate the financial burden the act imposes on small and rural pharmacies.

Whereas, the federal Deficit Reduction Act of 2005, P.L. 109-171, revises the formula for setting federal upper limit (FUL) drug prices, effective January 1, 2007; and, as a consequence, it reduces significantly Medicaid pharmacy product cost reimbursement for generic drugs, and

Whereas, the Congressional Budget Office estimates that the new limits on Medicaid pharmacy reimbursement will result, nationally, in a $3.6 billion reduction in federal payments to retail pharmacies for prescriptions of generic drugs and approximately $6.3 billion including corresponding reductions in states’ funds, and

Whereas, pharmacy reimbursement for generic drugs dispensed through the Vermont Medicaid program is likely to be reduced an average $6.70 per prescription, and

Whereas, a reduction of that magnitude could drop Medicaid product reimbursement to a level at or below the pharmacies’ costs to acquire the affected drugs, and

Whereas, Vermont’s $4.75 Medicaid dispensing fee, while higher than the average Medicaid dispensing fee nationwide, still covers less than 50 percent of the actual cost to dispense a prescription in the state, and

Whereas, the impact of lower‑than-dispensing-cost dispensing fees could force Vermont’s pharmacies, particularly small independent pharmacies operating in remote and rural areas of the state, to reduce their services, hours, and workforces, or even to close their doors, and

Whereas, reductions in pharmacy hours and services and the closing of a significant number of pharmacies would constitute a threat to the health of all Vermont residents, and particularly to those in the Medicaid program; and it would severely affect the state’s economy, now therefore be it

Resolved by the Senate and House of Representatives:

That the General Assembly urges Congress to amend the federal Deficit Reduction Act of 2005 to eliminate the financial burden the act imposes on small and rural pharmacies, and be it further

Resolved: That the General Assembly urges that to the extent possible, this legislative relief should be enacted before the revised FUL procedures created under the Deficit Reduction Act can take effect on January 1, 2007, and be it further

Resolved: That the Secretary of State be directed to send a copy of this resolution to the Vermont Congressional delegation.

Senator Edward Flanagan Recognized; Remarks Journalized

The Senate welcomed back Senator Flanagan of Chittenden District, upon his return and ongoing recovery from serious personal injuries sustained in an automobile accident last fall.

Thereupon, on motion of Senator Leddy, the remarks of Senator Flanagan were ordered journalized and are as follows:

“Mr. President, it's good to be back. You're looking at someone who is grateful to be alive, recovering, and with all of you. I am a living testament to the hard work and dedication of the doctors, nurses, and staff at Fletcher Allen in Vermont and Mt. Sinai Hospital in New York

“I was told, but remember nothing, about what happened five months ago. My car tumbled down a steep hill and ended upside-down in a ravine. I was trapped. I remained there for 18 hours until Jimmy Bisson noticed my car and called police. They quickly came and emergency medical steps were taken, which saved my life. The temperatures which hovered just above freezing slowed my metabolism which was crucial to my surviving. I have no memory of the next six weeks. I started the long and painful journey to consciousness.

“With the help of many of you, I slowly realized the challenge of recovering and regaining myself. You engaged me in the work of my two committees - Health and Welfare and Judiciary - that speeded up my recovery. Now, I'm working hard on fully getting back to my public service for Vermonters. The effects of the accident, like my work here in the Senate, are still challenges to confront. Working with many of you on the personal and political fronts, I look ahead to the future with ever-increasing confidence.

“I'm humbled by my insights about the vulnerability of every Vermonter and the need for comprehensive health insurance. I can't imagine where I'd be without the sustained, intensive rehab therapy that my insurance makes possible. I can't imagine how working Vermont families can stay afloat after an uninsured wage-earner sustains a serious injury or illness.

“This is the challenge that we cannot duck. I salute the efforts of this body to meet this challenge.

“This Senator from Chittenden County stands before you with a deepened appreciation of human life. My experience speaks to the profoundly high stakes of providing adequate health insurance for all Vermonters.

“Thank you to my partner, Isaac Lustgarten, who has been loyal and supportive throughout this ordeal, my family and friends, the Fletcher Allen staff, my colleagues here, and the countless Vermonters who continue to send me encouragement and support. The devotion has been moving. I am proud to be part of a community that has shown such love and support which is typical of Vermont values.

“Mr. President, I'm eager to continue working for Vermonters who are all part of a community that was there for me when I was in need.”

Proposal of Amendment; Third Reading Ordered; Rules Suspended; Bill Passed in Concurrence with Proposal of Amendment; Bill Messaged

H. 843.

Senator Cummings, for the Committee on Finance, to which was referred House bill entitled:

An act relating to miscellaneous tax policy amendments.

Reported recommending that the Senate propose to the House to amend the bill as follows:

* * *Preserves Changes to Cigarette Tax in Health Bill if it is Enacted* * *

First: By adding a new section to be numbered Sec. 3a to read as follows:

Sec. 3a. PRIORITY OF ENACTMENTS

Sec. 3 of this act (amending 32 V.S.A. § 7771 relating to the cigarette tax) shall be subject to and further amended by any amendments to § 7771 in H. 861 which are enacted in 2006, except that the repeal of the sentence at the end of subsection (a)(3) of Sec. 3 of this act, which reads “All taxes upon cigarettes under this chapter are declared to be a direct tax upon the consumer at retail and shall conclusively be presumed to be precollected for the purpose of convenience and facility only.” shall remain repealed.

* *Leaves Sales Tax on Downloaded Software to Begin When SST Begins* *

Second: By striking out Sec. 4 (accelerating the effective date for sales taxation of prewritten computer software in electronic form)

Third: In Sec. 6 (effective date for Sec. 4) by striking out subsection (4)

* * *3% Production Deduction* * *

Fourth: By adding a new section to be numbered Sec. 7 to read as follows:

Sec. 7. 32 V.S.A. § 5811 is amended to read:

* * *

(18) "Vermont net income" means, for any taxable year and for any corporate taxpayer:

(A) the taxable income of the taxpayer for that taxable year under the laws of the United States, without regard to Section 168(k) of the Internal Revenue Code, and excluding income which under the laws of the United States is exempt from taxation by the states:

(i) increased by:

(I) the amount of any deduction for state and local taxes on or measured by income, franchise taxes measured by net income, franchise taxes for the privilege of doing business and capital stock taxes; and

(II) to the extent such income is exempted from taxation under the laws of the United States by the amount received by the taxpayer on and after January 1, 1986 as interest income from state and local obligations, other than obligations of Vermont and its political subdivisions, and any dividends or other distributions from any fund to the extent such dividend or distribution is attributable to such Vermont state or local obligations; and

(III) the amount of any domestic production activity deduction under section 199 of the Internal Revenue Code in excess of 3 percent of qualified income; and

* * *

(21) "Taxable income" means federal taxable income:

(A) Increased by the following items of income (to the extent such income is excluded from federal adjusted gross income):

(i) interest income from non-Vermont state and local obligations;

(ii) dividends or other distributions from any fund to the extent they are attributable to non-Vermont state or local obligations;

and also increased by:

(iii) any amount of capital gain income which was deferred in a prior year under subdivision (B)(iii) of this subdivision (21), to be added in the taxable year of disposition of the taxpayer's interest in the qualified business;

(iv) the amount of any domestic production activity deduction under section 199 of the Internal Revenue Code in excess of 3 percent of qualified income;

* * *Increase of Credit for Higher Ed Investment Plan Contributions* * *

Fifth: By adding a new section to be numbered Sec. 8 to read as follows:

Sec. 8. 32 V.S.A. § 5825A is amended to read:

§ 5825A. CREDIT FOR VERMONT HIGHER EDUCATION INVESTMENT PLAN CONTRIBUTIONS

(a) A taxpayer of this state, including each spouse filing a joint return, shall be eligible for a nonrefundable credit against the tax imposed under section 5822 of this title of five ten percent of the first $2,000.00 $2,500.00 per beneficiary, contributed by the taxpayer during the taxable year to a Vermont higher education investment plan account under subchapter 7 of chapter 87 of Title 16.

(b) A taxpayer who has received a credit under subsection (a) of this section shall repay to the commissioner five ten percent of any distribution from a higher education investment plan account, which distribution is not excluded from gross income in the taxable year under Section 529 of the Internal Revenue Code, as amended, up to a maximum of the total credits received by the taxpayer under subsection (a) of this section minus any amount of repayment of such credits in prior tax years. Repayments under this subsection shall be subject to assessment, notice, penalty and interest, collection, and other administration in the same manner as an income tax under this chapter.

* * *State College Property/VTC “Incubator”* * *

Sixth: By adding two new sections to be numbered Secs. 9 and 10 to read as follows:

Sec. 9. 32 V.S.A. § 3701(1)(A) is amended to read:

(1) “State-owned property” means:

(A) state-owned buildings, including buildings of the Vermont state colleges and which are tax-exempt under section 2178 of Title 16; buildings of the University of Vermont and State Agricultural College used for educational and not commercial purposes; and buildings of the agency of transportation and the department of the military; but excluding the value of land on which the buildings are located, and excluding all highways and bridges and any land pertaining thereto; and

Sec. 10. 16 V.S.A. § 2178 is amended to read:

§ 2178. TAX EXEMPTION

All real and personal property owned by the corporation and used for educational and not commercial purposes shall be exempt from taxation.

* * *Changing Angel Investment Incentive to a Credit* * *

Seventh: By adding three new sections to be numbered Secs. 11, 12 and 13 to read as follows:

Sec. 11. 32 V.S.A. § 5811(21) is amended to read:

(21) “Taxable income” means federal taxable income:

(A) Increased by the following items of income (to the extent such income is excluded from federal adjusted gross income):

(i) interest income from non-Vermont state and local obligations; and

(ii) dividends or other distributions from any fund to the extent they are attributable to non-Vermont state or local obligations;

(B) Decreased by the following items of income (to the extent such income is included in federal adjusted gross income):

(i) income from United States government obligations; and

(ii) 40 percent of adjusted net capital gain income as defined in Section 1(h) of the Internal Revenue Code;