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									                     House Calendar
                                  FRIDAY, APRIL 2, 2004
                         88th DAY OF ADJOURNED SESSION


                                TABLE OF CONTENTS
                                                                                         Page No.
                                   ACTION CALENDAR
                                            Called Up
J.R.H. 44 Adoption Awareness Day .......................................................... 678
               Rep. Seibert Amendment ......................................................... 679
               Rep. Shand Amendment ........................................................... 680
                                      Third Readings(s)
H. 397 Operation of Snowmobiles ............................................................. 680
               Rep. Shand Amendment ........................................................... 681
S. 202 Relating to Voting Machines.......................................................... 681
                                      Second Reading(s)
H. 771 City of St. Albans Charter .............................................................. 681
           Rep. Bohi for Local Government
H. 773 Town of Stowe Charter .................................................................. 681
          Rep. Sweeney for Local Government
                                              Rule 52
J.R.H. 51 Homeland Security Grant Program ........................................... 681

                                   NOTICE CALENDAR
                                      Second Reading(s)
H. 31 Notice of Mortgage ........................................................................ 682
         Rep. Bohi for Local Government
               Rep. Marron for Ways and Means ........................................... 687

                                               - 676 -
H. 412 Cleanup of Spills from Aboveground Tanks .................................. 691
               Rep. Valliere for Natural Resources & Energy
               Rep. Anderson for Ways and Means ........................................ 698
H. 715 Municipal Land Records Commission ........................................... 699
               Rep. Kennedy for Government Operations
               Rep. Morrissey for Ways and Means ....................................... 699
S. 247 Banking, Insurance, Securities and Health Care ............................. 700
               Rep. Parent for Commerce
                                          Ordered to Lie
H. 743 Relating to Securities...................................................................... 712
                                  CONSENT CALENDAR
                  (See Addendum to House and Senate Calendar)
H.C.R. 246 In Memory of Sgt. William J. Normandy                                                   712
H.C.R. 247 Middlebury Union H. S. Girls’ Basketball Team                                           712
H.C.R. 248 Joseph Bowen VT Principal of the Year                                                   712
H.C.R. 249 Kathy Buley VT-NEA Award                                                                713
H.C.R. 250 Congratulating Taylor Coppenrath                                                        713
H.C.R. 251 Arlington Memorial H.S. Girls’ Basketball Team                                          713
H.C.R. 252 Honoring Weston Playhouse Theatre Co                                                    713
S.C.R. 50 Honoring Margaret Lucenti                                                                713
S.C.R. 51 Anne Howrigan Mother of the Year Award                                                   713
S.C.R. 52 Congratulating Middlebury College Ski Teams                                              713
S.C.R. 53 Congratulating Catamount Family Center                                                   713




                                                - 677 -
                           ORDERS OF THE DAY

                           ACTION CALENDAR
                                  Called Up
                               J. R. H. 44
  Joint resolution designating April 14, 2004 as Legislative Adoption
Awareness Day.
  Offered by: Representative Wright of Burlington
  Whereas, Governor James H. Douglas proclaimed November 2003 as
Adoption Awareness Month, and
   Whereas, Lieutenant Governor Brian E. Dubie is committed to encouraging
local adoptions and supportive transitional services for adoptive families, and
   Whereas, the National Council for Adoption estimates one to two million
couples in the United States are seeking to adopt a child, a number far
exceeding the number of infants available for adoption, and
   Whereas, numerous Vermonters wait up to three years and spend as much
as $30,000.00 to adopt a child from another country, and
   Whereas, for example, during 1996, in Vermont there were 44 infants
adopted for every 1,000 abortions, and
   Whereas, authorities have not identified a permanent home for 70 children
currently in foster care, and
   Whereas, families willing to adopt children with special needs must be
assured appropriate assistance and support to assure a successful transition
from a foster to a permanent home, and
    Whereas, presenting adoption as a positive option in the family
life-sexuality curriculum in Vermont’s schools would improve awareness and
understanding of adoption alternatives, and
   Whereas, broadcast public service announcements promoting adopting as a
positive option would better serve the needs of children and their families, now
therefore be it
   Resolved by the Senate and House of Representatives:
   That the General Assembly supports continuing efforts to provide sufficient
resources to families willing and able to adopt children with special needs and


                                    - 678 -
to promote adoption as a positive option for an unplanned pregnancy, and be it
further
   Resolved: That the General Assembly recognizes the importance and the
positive choice that adoption presents and designates April 14, 2004 as
Legislative Adoption Awareness Day.
   Amendment to be offered by Rep. Seibert of Norwich to J.R.H. 44
    Moves to amend the resolution by striking all after the title and inserting in
lieu thereof the following:
  Whereas, Governor James H. Douglas proclaimed November 2003 as
Adoption Awareness Month, and
   Whereas, the National Council for Adoption estimates that the number of
couples in the United States seeking to adopt a child far exceeds the
availability of eligible infants and children, and
   Whereas, numerous Vermonters wait up to three years and spend as much
as $30,000.00 to adopt a child from another country, and
   Whereas, the Vermont agency of human services should be congratulated
for its efforts to encourage Vermont families to consider adoption, and
   Whereas, authorities have not identified a permanent home for 70 children
currently in foster care, and
   Whereas, families willing to adopt children with special needs must be
assured appropriate assistance and support to assure a successful transition
from a foster to a permanent home, and
   Whereas, presenting adoption in the family life-sexuality curriculum in
Vermont’s schools would improve awareness and understanding of adoption
alternatives, and
  Whereas, broadcast public service announcements promoting adoption
would serve the needs of children and their families, now therefore be it
   Resolved by the Senate and House of Representatives:
   That the General Assembly supports continuing efforts to provide sufficient
resources to families willing and able to adopt children with special needs, and
be it further
   Resolved: That the General Assembly recognizes the importance of
adoption and designates April 14, 2004 as Legislative Adoption Awareness
Day.


                                     - 679 -
  Amendment to be offered by Rep. Shand of Weathersfield to J.R.H. 44
   Moves to amend the resolution by striking all after the title to read:
  Whereas, Governor James H. Douglas proclaimed November 2003 as
Adoption Awareness Month, and
   Whereas, Lieutenant Governor Brian E. Dubie is committed to encouraging
local adoptions and supportive transitional services for adoptive families, and
   Whereas, the National Council for Adoption estimates that the number of
couples in the United States seeking to adopt far exceeds the availability of
eligible infants and children, and
   Whereas, numerous Vermonters wait up to three years and spend as much
as $30,000.00 to adopt a child from another country, and
   Whereas, the Vermont agency of human services should be congratulated
for its efforts to encourage Vermont families to consider adoption, and
   Whereas, authorities have not identified a permanent home for 70 children
currently in foster care, and
   Whereas, families willing to adopt children with special needs must be
assured appropriate assistance and support to assure a successful transition
from a foster to a permanent home, and
  Whereas, broadcast public service announcements promoting adoption
would serve the needs of children and their families, now therefore be it
   Resolved by the Senate and House of Representatives:
   That the General Assembly supports continuing efforts to provide sufficient
resources to families willing and able to adopt children with special needs, and
be it further
   Resolved: That the General Assembly recognizes the importance of
adoption and designates April 14, 2004 as Legislative Adoption Awareness
Day.
                               Third Readings(s)
                                     H. 397
   An act relating to the operation of snowmobiles.




                                     - 680 -
   Amendment to be offered by Rep. Shand of Weathersfield to H. 397
   Moves to amend the bill as follows:
    First: In Sec. 3, in §3202(a), by striking the period at the end of subdivision
(5) and inserting in lieu there of ―; or‖, and by inserting a new subdivision (6)
to read:
      (6) for emergency use by fire service personnel.
   Second: In Sec. 4, in §3206(b)(22) (C) and (23) (C) following the words
―private individuals‖, by inserting the words ―or emergency use by fire service
personnel‖
                                        S. 202
   An act relating to voting machines.
                          Favorable with Amendment
                                      H. 771
   An act relating to the charter of the city of St. Albans.
   Rep. Bohi of Hartford, for the Committee on Local Government,
recommends the bill be amended as follows:
   By adding a new Sec. 4 to read:
   Sec. 4 EFFECTIVE DATE
      This act shall take effect from passage.
(Committee vote: 7-0-1)
                                    Favorable
                                      H. 773
   An act relating to the charter of the town of Stowe.
   Rep. Sweeney of Colchester, for the Committee on Local Government,
recommends the bill ought to pass.
( Committee Vote: 7-0-1)
                           For Action Under Rule 52
                                   J. R. H. 51
   Joint resolution urging the United States Congress to continue and to fund
at least at the fiscal year 2004 level ―The Guaranteed Minimum Homeland
Security Grant Program.
   (For text see House Journal April 1, 2004)

                                      - 681 -
                           NOTICE CALENDAR
                         Favorable with Amendment
                                     H. 31
   An act relating to a notice of mortgage.
   Rep. Bohi of Hartford, for the Committee on Local Government,
recommends the bill be amended by striking all after the enacting clause and
inserting in lieu thereof the following:
Sec. 1. 27 V.S.A. § 341a is added to read:
§ 341a. SHORT-FORM MORTGAGE
   (a) A mortgage on real property shall be deemed to be recorded at length as
required by section 341 of this title if the mortgagee:
      (1)(A) Records an instrument, known as master mortgage form, that
contains one or more terms, covenants, or conditions and that satisfies the
requirements of subsection (b) of this section; or
         (B) Chooses to rely solely on the mortgage covenants set forth in
subsection (e) of this section; and
     (2) Records a short-form mortgage that conforms to the requirements of
subsection (c) of this section.
   (b) A mortgagee may record in the land records in one or more towns
within the state a master mortgage form that sets forth the terms, covenants,
and conditions to be applicable to a short-form mortgage prepared under
subsection (c) of this section and granted by the mortgagor to the mortgagee.
   (c) To grant a mortgage to a mortgagee who has recorded a master
mortgage form under subsection (b) of this section or who chooses to rely
solely on the mortgage covenants set forth in subsection (e) of this section, the
mortgagor or mortgagee may prepare a short-form mortgage that shall include
the following:
     (1) Such information necessary or appropriate to identify the mortgagor
and mortgagee, together with an address for contacting the mortgagee.
      (2) If applicable, whether the mortgagor will hold the mortgage as a
tenant in common, as a joint tenant with right of survivorship, or as a tenant by
the entirety.
     (3) The street address, town address, and zip code of the mortgaged
property.


                                     - 682 -
      (4) A description of the obligation secured by the mortgage, and any
terms, covenants, conditions, other obligations, or future advances that are not
included in the master mortgage form filed under subsection (b) of this section.
     (5) A legal description of the collateral encumbered by the mortgage,
which may be provided by attaching a schedule, exhibit, or rider.
      (6) A reference to the master mortgage form filed under subsection (b)
of this section, and a statement that the referenced master mortgage form is
incorporated into the short form mortgage. The reference to the master
mortgage form shall include the volume and page of the land records of the
town in which the master mortgage form is filed.
       (7) An acknowledgement by the mortgagor of the application of the
terms and conditions of the master mortgage form filed under subsection (b) of
this section and incorporated into the short-form mortgage.
       (8) The signature of a mortgagor, the signature of any co-mortgagor, and
the date of any signature; however, the omission of the date of the signature
shall not render the mortgage void.
      (9) The name and signature of one witness to the mortgagor’s signature
of the short-form mortgage.
     (10) An acknowledgement by a town clerk, notary public, master,
county clerk, judge, or register of probate.
      (11) An acknowledgement by the mortgagor of receipt of the master
mortgage form filed under subsection (e) of this section and receipt of the
short-form mortgage prepared under this subsection.
       (12) A statement that the short-form mortgage incorporates the master
mortgage form and is a full and valid security instrument that has the same
effect as if the provisions of the master mortgage form had been set forth in
full in the short-form mortgage.
   (d) Nothing in this section shall limit the form or format of a valid state of
Vermont mortgage to the short-form mortgage provided for in subsection (c) of
this section. Any security instrument that satisfies the common law and
statutory requirements of a mortgage shall be an effective mortgage whether or
not such mortgage complies with this section.
   (e) If a short-form mortgage meets the requirements of subsection (c) of
this section but fails to provide a reference to a master mortgage form recorded
under subsection (b) of this section containing the terms and conditions of the
mortgage or if a mortgagee elects to rely solely on the covenants set forth in
this subsection, the mortgagor and mortgagee named in the short-form

                                     - 683 -
mortgage shall be deemed to incorporate the following covenants into the
terms and conditions of the short-form mortgage:
      (1) The mortgagor covenants and agrees to pay the debt described in and
secured by the short-form mortgage as described in the instrument, creating the
debt or if the obligation secured is not a debt for money owed, the mortgagor
shall perform such agreements and covenants as are secured by the mortgage
in the manner described in the instrument or agreement setting out the terms
and conditions of the obligation secured.
      (2) If the property described in the short-form mortgage is improved
with insurable improvements, the mortgagor shall obtain and maintain during
the life of the mortgage casualty and liability insurance in an amount that
insures the full replacement value of the improvements on the mortgaged
property.
      (3) If the property described in the short-form mortgage is assessed for
taxes or assessments by any entity lawfully authorized to make such
assessments and the taxes or assessments shall be or may become a lien on the
property described in the short-form mortgage, the mortgagor shall pay such
taxes or assessments in full on or before the due date thereof directly to the
party assessing such taxes or assessments. For the purposes of this provision,
taxes or assessments include property taxes, utility charges payable to utility
companies authorized by statute or town charters to provide services which
may be enforced by automatic liens in the nature of tax liens, and common
interest community liens, but only to the extent such common interest
community liens have priority over the mortgage granted by the short-form
mortgage.
      (4) The mortgagor shall maintain the mortgaged property in a manner
sufficient to keep the mortgaged property from becoming a hazard to health or
property and shall maintain the mortgaged property in compliance with permits
and approvals issued by the state and the municipality applicable to the
mortgaged property.
       (5) In the event the mortgagor fails to obtain or maintain in force and
effect the insurance specified in subdivision (1) of this subsection, or fails to
pay the taxes or assessments specified in subdivision (2), or fails to maintain
the mortgage property as required by subdivision (3), the mortgagee shall be
entitled, but shall not be obligated to obtain or pay for insurance on the
mortgaged property, pay the taxes or assessments, or perform such
maintenance as is described in subdivision (3) of this subsection. If the
mortgagee undertakes any of the corrective or curative measures provided in
this subdivision, the mortgagee may add the reasonable cost of such corrective
or curative measures to the debt secured by the mortgage and the mortgagor
                                    - 684 -
shall pay such costs within 60 days of the date the mortgagee sends the
mortgagor an invoice for the cost of such corrective or curative measures. If
the mortgagee elects to take any action authorized by this section, such actions
by the mortgagee shall not cure or correct the default by the mortgagor, and the
mortgagee may still have the remedies provided in the mortgage or in this
section.
   (f)(1) If a mortgagor performs the covenants set forth in a short-form
mortgage under subdivision (c)(4) of this section and set forth in the master
mortgage form as recorded under subsection (b) of this section and
incorporated into the short-form mortgage or, in the absence of a master
mortgage form recorded under subsection (b) of this section, performs the
mortgage covenants set forth in subsection (e) of this section, the short-form
mortgage created pursuant to this section shall be null and void and of no
further force or effect, and the mortgagee shall provide a discharge of such
mortgage in the form and in the manner as provided in this chapter.
      (2) If a mortgagor fails to perform the covenants set forth in a
short-form mortgage under subdivision (c)(4) of this section or set forth in the
covenants of the master mortgage form as recorded under subsection (b) of this
section and incorporated by the short-form mortgage or, in the absence of a
master mortgage form recorded under subsection (b) of this section, fails to
perform the mortgage covenants set forth in subsection (e) of this section, the
mortgagee shall have the right to declare the entire balance of all of the
monetary obligations and the performance of all nonmonetary obligations
secured by the mortgage to be due and payable immediately. Thereafter, the
mortgagee may begin foreclosure of the mortgage. If the mortgagee initiates a
foreclosure action, the foreclosure shall be governed by the requirements of
chapter 163 of Title 12.
   (g)(1) A town clerk shall record in the land records any master mortgage
form required by subsection (b) of this section to be recorded with the town. A
town clerk shall receive $5.00 for each reference by a short-form mortgage to a
master mortgage form.
      (2) A town clerk shall record in the land records a short-form mortgage
required to be recorded with the town by subsection (c) of this section. A town
clerk shall receive $75.00 for recording a mortgage deed of six pages or less
and $8.00 per page for each additional page of a mortgage that exceeds six
pages.
   (h) Substantial compliance with the requirement of this section for creating
a short-form mortgage is sufficient for the creation of a full and valid
mortgage, and mortgages created under this section should be presumed valid
and effective.
                                   - 685 -
Sec. 2. 32 V.S.A. § 1671 is amended to read:
§ 1671. TOWN CLERK
   (a)(1) For the purposes of this section, a "page" is defined as a single side
of a leaf of paper on which is printed, written, or otherwise placed information
to be recorded or filed. The maximum covered area on a page shall be 71/2
inches by 14 inches. All letters shall be at least
one-sixteenth inch in height or in at least eight point type.
      (2) Unless otherwise provided by law, the fees to town clerks shall be as
follows:
        (1)(A) For recording a trust mortgage deed as provided in section
1155 of Title 24, $10.00;
        (2)(B) For filing or recording a copy of a complaint to foreclose a
mortgage as provided in section 4523(b) of Title 12, $6.00 per page;
         (3)(C) For examination of records by town clerk a fee of $5.00 per
hour may be charged but not more than $25.00 for each examination on any
one calendar day;
        (4)(D) For examination of records by others a fee of $2.00 per hour
may be charged;
         (5)(E) Town clerks may require fees for all filing, recording and
copying to be paid in advance;
         (6)(F) For the recording or filing, or both, of any document that is to
become a matter of public record in the town clerk's office, or for any certified
copy of such document, a fee of $7.00 $8.00 per page shall be charged;
          (7)(G) For uncertified copies of records and documents on file, or
recorded, a fee of $1.00 per page shall be charged, with a minimum fee of
$2.00; however, copies of minutes of municipal meetings or meetings of local
boards and commissions, copies of grand lists and checklists and copies of any
public records that any agency of that political subdivision has deposited with
the clerk shall be available to the public at actual cost;
          (8)(H) For survey plats filed in accordance with chapter 17 of Title
27, a fee of $6.00 $15.00 shall be charged.
                                       ***
(Committee vote: 8-0-0)



                                      - 686 -
   Rep. Marron of Stowe, for the Committee on Ways and Means,
recommends the bill be amended by striking all after the enacting clause and
inserting in lieu thereof the following:
Sec. 1. 27 V.S.A. § 341a is added to read:
§ 341a. SHORT-FORM MORTGAGE
   (a) A mortgage on real property shall be deemed to be recorded at length as
required by section 341 of this title if the mortgagee:
      (1)(A) Records an instrument, known as master mortgage form, that
contains one or more terms, covenants, or conditions and that satisfies the
requirements of subsection (b) of this section; or
         (B) Chooses to rely solely on the mortgage covenants set forth in
subsection (e) of this section; and
     (2) Records a short-form mortgage that conforms to the requirements of
subsection (c) of this section.
   (b) A mortgagee may record in the land records in one or more towns
within the state a master mortgage form that sets forth the terms, covenants,
and conditions to be applicable to a short-form mortgage prepared under
subsection (c) of this section and granted by the mortgagor to the mortgagee.
   (c) To grant a mortgage to a mortgagee who has recorded a master
mortgage form under subsection (b) of this section or who chooses to rely
solely on the mortgage covenants set forth in subsection (e) of this section, the
mortgagor or mortgagee may prepare a short-form mortgage that shall include
the following:
     (1) Such information necessary or appropriate to identify the mortgagor
and mortgagee, together with an address for contacting the mortgagee.
      (2) If applicable, whether the mortgagee will hold the property as a
tenant in common, as a joint tenant with right of survivorship, or as a tenant by
the entirety.
      (3) The street address and town address of the mortgaged property.
      (4) A description of the obligation secured by the mortgage, and any
terms, covenants, conditions, other obligations, or future advances that are not
included in the master mortgage form filed under subsection (b) of this section.
     (5) A legal description of the collateral encumbered by the mortgage,
which may be provided by attaching a schedule, exhibit, or rider.
      (6) A reference to the master mortgage form filed under subsection (b)
of this section, and a statement that the referenced master mortgage form is
                                    - 687 -
incorporated into the short form mortgage. The reference to the master
mortgage form shall include the volume and page of the land records of the
town in which the master mortgage form is filed.
       (7) An acknowledgement by the mortgagor of the application of the
terms and conditions of the master mortgage form filed under subsection (b) of
this section and incorporated into the short-form mortgage.
       (8) The signature of a mortgagor, the signature of any co-mortgagor, and
the date of any signature; however, the omission of the date of the signature
shall not render the mortgage void.
      (9) The name and signature of one witness to the mortgagor’s signature
of the short-form mortgage.
     (10) An acknowledgement by a town clerk, notary public, master,
county clerk, judge, or register of probate.
      (11) An acknowledgement by the mortgagor of receipt of the master
mortgage form filed under subsection (e) of this section and receipt of the
short-form mortgage prepared under this subsection.
       (12) A statement that the short-form mortgage incorporates the master
mortgage form and is a full and valid security instrument that has the same
effect as if the provisions of the master mortgage form had been set forth in
full in the short-form mortgage.
   (d) Nothing in this section shall limit the form or format of a valid state of
Vermont mortgage to the short-form mortgage provided for in subsection (c) of
this section. Any security instrument that satisfies the common law and
statutory requirements of a mortgage shall be an effective mortgage whether or
not such mortgage complies with this section.
   (e) If a short-form mortgage meets the requirements of subsection (c) of
this section but fails to provide a reference to a master mortgage form recorded
under subsection (b) of this section containing the terms and conditions of the
mortgage or if a mortgagee elects to rely solely on the covenants set forth in
this subsection, the mortgagor and mortgagee named in the short-form
mortgage shall be deemed to incorporate the following covenants into the
terms and conditions of the short-form mortgage:
      (1) The mortgagor covenants and agrees to pay the debt described in and
secured by the short-form mortgage as described in the instrument, creating the
debt or if the obligation secured is not a debt for money owed, the mortgagor
shall perform such agreements and covenants as are secured by the mortgage
in the manner described in the instrument or agreement setting out the terms
and conditions of the obligation secured.
                                     - 688 -
      (2) If the property described in the short-form mortgage is improved
with insurable improvements, the mortgagor shall obtain and maintain during
the life of the mortgage casualty and liability insurance in an amount that
insures the full replacement value of the improvements on the mortgaged
property.
      (3) If the property described in the short-form mortgage is assessed for
taxes or assessments by any entity lawfully authorized to make such
assessments and the taxes or assessments shall be or may become a lien on the
property described in the short-form mortgage, the mortgagor shall pay such
taxes or assessments in full on or before the due date thereof directly to the
party assessing such taxes or assessments. For the purposes of this provision,
taxes or assessments include property taxes, utility charges payable to utility
companies authorized by statute or town charters to provide services which
may be enforced by automatic liens in the nature of tax liens, and common
interest community liens, but only to the extent such common interest
community liens have priority over the mortgage granted by the short-form
mortgage.
      (4) The mortgagor shall maintain the mortgaged property in a manner
sufficient to keep the mortgaged property from becoming a hazard to health or
property and shall maintain the mortgaged property in compliance with permits
and approvals issued by the state and the municipality applicable to the
mortgaged property.
       (5) In the event the mortgagor fails to obtain or maintain in force and
effect the insurance specified in subdivision (1) of this subsection, or fails to
pay the taxes or assessments specified in subdivision (2), or fails to maintain
the mortgage property as required by subdivision (3), the mortgagee shall be
entitled, but shall not be obligated to obtain or pay for insurance on the
mortgaged property, pay the taxes or assessments, or perform such
maintenance as is described in subdivision (3) of this subsection. If the
mortgagee undertakes any of the corrective or curative measures provided in
this subdivision, the mortgagee may add the reasonable cost of such corrective
or curative measures to the debt secured by the mortgage and the mortgagor
shall pay such costs within 60 days of the date the mortgagee sends the
mortgagor an invoice for the cost of such corrective or curative measures. If
the mortgagee elects to take any action authorized by this section, such actions
by the mortgagee shall not cure or correct the default by the mortgagor, and the
mortgagee may still have the remedies provided in the mortgage or in this
section.
  (f)(1) If a mortgagor performs the covenants set forth in a short-form
mortgage under subdivision (c)(4) of this section and set forth in the master
                                     - 689 -
mortgage form as recorded under subsection (b) of this section and
incorporated into the short-form mortgage or, in the absence of a master
mortgage form recorded under subsection (b) of this section, performs the
mortgage covenants set forth in subsection (e) of this section, the short-form
mortgage created pursuant to this section shall be null and void and of no
further force or effect, and the mortgagee shall provide a discharge of such
mortgage in the form and in the manner as provided in this chapter.
      (2) If a mortgagor fails to perform the covenants set forth in a
short-form mortgage under subdivision (c)(4) of this section or set forth in the
covenants of the master mortgage form as recorded under subsection (b) of this
section and incorporated by the short-form mortgage or, in the absence of a
master mortgage form recorded under subsection (b) of this section, fails to
perform the mortgage covenants set forth in subsection (e) of this section, the
mortgagee shall have the right to declare the entire balance of all of the
monetary obligations and the performance of all nonmonetary obligations
secured by the mortgage to be due and payable immediately. Thereafter, the
mortgagee may begin foreclosure of the mortgage. If the mortgagee initiates a
foreclosure action, the foreclosure shall be governed by the requirements of
chapter 163 of Title 12.
   (g)(1) A town clerk shall record in the land records a short-form mortgage
required to be recorded with the town by subsection (c) of this section. A town
clerk shall receive $80.00 for recording a short-form mortgage deed of six
pages or less that references a master mortgage form recorded in the land
records of a town under subsection (b) of this section.
      (2) A town clerk shall not charge a fee to record a master mortgage form
recorded in the land records of a town under subsection (b) of this section.
   (h) Substantial compliance with the requirement of this section for creating
a short-form mortgage is sufficient for the creation of a full and valid
mortgage, and mortgages created under this section should be presumed valid
and effective.
Sec. 2. 32 V.S.A. § 1671 is amended to read:
§ 1671. TOWN CLERK
   (a)(1) For the purposes of this section, a ―page‖ is defined as a single side
of a leaf of paper on which is printed, written, or otherwise placed information
to be recorded or filed. The maximum covered area on a page shall be 71/2
inches by 14 inches. All letters shall be at least one-sixteenth inch in height or
in at least eight point type.


                                     - 690 -
      (2) Unless otherwise provided by law, the fees to town clerks shall be as
follows:
        (1)(A) For recording a trust mortgage deed as provided in section
1155 of Title 24, $10.00;
        (2)(B) For filing or recording a copy of a complaint to foreclose a
mortgage as provided in section 4523(b) of Title 12, $6.00 per page;
         (3)(C) For examination of records by town clerk a fee of $5.00 per
hour may be charged but not more than $25.00 for each examination on any
one calendar day;
        (4)(D) For examination of records by others a fee of $2.00 per hour
may be charged;
         (5)(E) Town clerks may require fees for all filing, recording, and
copying to be paid in advance;
         (6)(F) For the recording or filing, or both, of any document that is to
become a matter of public record in the town clerk’s office, or for any certified
copy of such document, a fee of $7.00 $8.00 per page shall be charged;
          (7)(G) For uncertified copies of records and documents on file, or
recorded, a fee of $1.00 per page shall be charged, with a minimum fee of
$2.00; however, copies of minutes of municipal meetings or meetings of local
boards and commissions, copies of grand lists and checklists and copies of any
public records that any agency of that political subdivision has deposited with
the clerk shall be available to the public at actual cost;
         (8)(H) For survey plats filed in accordance with chapter 17 of Title
27, a fee of $6.00 per 11 inch by 17 inch sheet, $8.00 per 18 inch by 24 inch
sheet, and $10.00 per 24 inch by 36 inch sheet $15.00 shall be charged;
         (I) For recording a short-form mortgage deed as provided in
subsection 341a(c) of Title 27, $80.00.
                                     ***
(Committee vote: 9-2-0)




                                     - 691 -
                                    H. 412
   An act relating to assessing a fee of one-half cent per gallon of heating oil
sold in the state to be used to finance the cleanup of spills from aboveground
storage tanks.
   Rep. Valliere of Barre City, for the Committee on Natural Resources
and Energy, recommends the bill be amended by striking all after the enacting
clause and inserting in lieu thereof the following:
Sec. 1. 10 V.S.A. § 1941 is amended to read:
§ 1941. PETROLEUM CLEANUP FUND
    (a) A fund to be known as the petroleum cleanup fund is created in the state
treasury, to be expended by the secretary of the agency of natural resources.
The fund shall consist of licensing fees and petroleum tank fees assessed under
the provisions of this chapter, loan repayments, and disbursements that have
been recovered, except for underground storage tank permit fees and licensing
fees for tank inspectors. The fund shall have two accounts: the motor fuel
account and the heating fuel account. The motor fuel account shall consist of
all moneys deposited into the fund, with the exception of the licensing fees for
heating oil and kerosene described in section 1942 of this title. The heating
fuel account shall consist of all the moneys deposited into the fund from the
licensing fees for heating oil and kerosene sold or used in the state. All
balances in the fund at the end of any fiscal year shall be carried forward and
remain a part of the fund. Interest earned by the fund shall be deposited into
the fund. Disbursements from the fund shall be made by the state treasurer on
warrants drawn by the commissioner of finance and management. The
secretary shall seek to recover from responsible parties costs incurred under
subdivision (b)(8) of this section.
   (b) The secretary may authorize disbursements from the fund for the
purpose of the cleanup and restoration of contaminated soil and groundwater
caused by releases of petroleum from underground storage tanks and
aboveground storage tanks, including air emissions for remedial actions, and
for compensation of third parties for injury and damage caused by a release.
Disbursements under this section may be made only for uninsured costs
incurred after January 1, 1987 and for which a claim is made prior to July 1,
2004 2009 and judged to be in conformance with prevailing industry rates.
This includes:
      (1) costs incurred by taking corrective action as directed by the secretary
for any release of petroleum into the environment from:


                                     - 692 -
         (A) an underground storage tank site after the first $10,000.00 of
costs have been borne by the owners or permittee an underground storage tank
defined as a category one tank after the first $10,000.00 of the cleanup costs
have been borne by the owners or operators of tanks used for commercial
purposes, or after the first $250.00 of the cleanup costs have been borne by the
owners or operators of tanks with capacities equal to or less than 1,100 gallons
used for farms or residential purposes. Disbursements on any site shall not
exceed $990,000.00. These disbursements shall be made from the motor fuel
account;
          (B) an underground heating fuel tank used for on-premise heating
after the first $10,000.00 of the cleanup costs have been borne by the owners
or operators of tanks with capacities over 1,100 gallons used for commercial
purposes, or after the first $250.00 of the cleanup costs have been borne by the
owners or operators of tanks with capacities equal to or less than 1,100 gallons
used for commercial purposes, or after the first $250.00 of the cleanup costs
have been borne by the owners or operators of residential and farm
tanks. These disbursements shall be made from the heating fuel account.
         (C) an aboveground heating fuel storage tank site after the first
$1,000.00 of the cleanup costs have been borne by the owners or operators of
tanks used for commercial purposes, or after the first $250.00 of the cleanup
costs have been borne by the owners or operators of residential and farm tanks.
Disbursements under this subdivision (b)(1)(B) (b)(1)(C) on any individual site
shall not exceed $25,000.00. These disbursements shall be made from the
heating fuel account;
          (D) a bulk storage aboveground motor fuel or heating fuel storage
tank site after the first $10,000.00 of the cleanup costs have been borne by the
owners or operators of tanks used for commercial purposes. Disbursements
under this subdivision (b)(1)(D) on any individual site shall not exceed
$990,000.00. These disbursements shall be made from the motor fuel account;
         (E) where a site is contaminated by petroleum releases from both
heating fuel and motor fuel tanks, or where the source of the petroleum
contamination has not been ascertained, the secretary shall have the discretion
to disburse funds from either the heating oil or motor fuels accounts, or both.
      (2) costs incurred in compensating third parties for bodily injury and
property damage, as approved by the secretary in consultation with the
commissioner of banking, insurance, securities, and health care administration
caused by release of petroleum from an underground motor fuel storage tank
into the environment from a site, up to one million dollars, but shall not
include payment of any punitive damages;

                                    - 693 -
                                      ***
       (5) notwithstanding the provisions of subdivision (b)(1) of this section,
costs incurred by taking corrective action as directed by the secretary for any
release of petroleum into the environment after the first $250.00 of costs have
been borne by the owners or permittee for the following underground storage
tanks:
        (A) any size farm or residential fuel oil storage tank used for on-
premises heating;
          (B) all farm or residential motor fuel tanks with capacities of equal to
or less than 1,100 gallons;
        (C) all nonfarm and nonresidential fuel oil storage tanks used for on-
premises heating with capacities of equal to or less than 1,100 gallons;
                                      ***
   (c) The secretary may use up to one-half the amount deposited to the motor
fuel account of the fund from the licensing fees assessed under section 1942 of
this title to capitalize the underground motor fuel storage tank loan assistance
program established by section 1944 of this title and the cost of administering
the program. If the secretary determines that a balance will remain after all
qualifying loan applications have been satisfied, the unneeded balance may be
used for cleanup. The secretary may use up to $250,000 per year the amount
in the heating fuel account of the fund for purposes of funding measures
related to aboveground tanks heating oil and kerosene.
                                      ***
   (e) The secretary shall establish a petroleum cleanup fund advisory
committee which shall meet not less than annually to review receipts and
disbursements from the fund, to evaluate the effectiveness of the fund in
meeting its purposes, the reasonableness of the cost of cleanup and to
recommend alterations and statutory amendments deemed appropriate. The
advisory committee shall submit an annual report of its findings to the general
assembly on January 15 of each year. In its annual report for 2000, the
advisory committee shall review the financial stability of the fund, evaluate the
implementation of assistance related to underground farm or residential heating
fuel oil storage tanks and aboveground storage tanks, and the need for
continuing assistance, and shall include recommendations for sustainable
funding sources to finance the provision of that assistance. The membership of
the committee shall include the following or their designated representative:
      (1) the secretary of the agency of natural resources who shall be
chairperson;
                                     - 694 -
      (2) the commissioner of the department of environmental conservation;
     (3) the commissioner of banking, insurance, securities, and health care
administration;
      (4) a licensed gasoline distributor;
      (5) a retail gasoline dealer;
      (6) a representative of a statewide refining-marketing petroleum
association;
     (7) one member of the house to be appointed by the speaker of the
house;
    (8) one member of the senate to be appointed by the committee on
committees;
      (9) a licensed heating fuel dealer;
      (10) a representative of a statewide heating fuel dealers’ association;
      (11) a licensed real estate broker.
                                      ***
   (g) The owner of a farm or residential underground heating fuel oil storage
tank used for on-premises heating that desires assistance to close, replace, or
upgrade the tank may apply to the secretary for such assistance. The financial
assistance may be in the form of grants or loans of up to $1,000.00 or the costs
of closure, replacement, or upgrade, whichever is less. Grants or loans shall be
made only to the current property owners. To be eligible to receive the grant
or loan, an environmental site assessment must be conducted by a qualified
consultant during the underground heating fuel storage tank closure,
replacement, or upgrade. In addition, if the closed tank is to be replaced with
another underground heating fuel storage tank, the replacement tank and piping
shall provide a level of environmental protection at least equivalent to that
provided by a double wall tank and secondarily contained piping. Grants or
loans shall be awarded on a priority basis to projects that will avoid the
greatest environmental or health risks. The secretary shall also give priority to
applicants who are replacing their underground heating fuel tanks with above
ground heating fuel storage tanks, that will be installed in accordance with the
secretary's recommended standards. The secretary shall also give priority to
lower income applicants. The secretary shall only authorize up to $100,000.00
in assistance grants or loans in any one fiscal year. The owner of a farm or
residential aboveground heating fuel storage tank used for on-premises heating
that desires assistance to close, replace, or upgrade the tank may apply to the
secretary for such assistance. The financial assistance may be in the form of
                                      - 695 -
grants or loans of up to $1,000.00 or the costs of closure, replacement, or
upgrade, whichever is less. Grants or loans shall be made only to the current
property owners. To be eligible to receive the grant or loan, the owner must
provide the previous year’s financial information, and must assure that any
work to replace or upgrade a tank shall be done in accordance with industry
standards (National Fire Protection Association, or NFPA, Code 31), as it
existed on July 1, 2004, until another date or edition is specified by rule of the
secretary. The secretary shall provide these loans or grants to low income
applicants based on eligibility criteria that are consistent with the economic
assistance authorized under the home heating fuel assistance program. The
secretary shall only authorize up to $150,000.00 in assistance for underground
and aboveground heating fuel tanks in any one fiscal year from the heating fuel
account for this purpose. The application must be accompanied by the
following information:
      (1) proof of ownership, including information disclosing all owners of
record of the property;
     (2) for farm or residential aboveground heating fuel storage tank
owners, a copy of the federal income tax return for the previous year;
       (3) identification of the contractor performing any aboveground heating
fuel storage tank closure, replacement, or upgrade;
      (3)(4) an estimated cost of tank closure, replacement or upgrade;
      (4)(5) the amount and type of assistance requested;
      (5)(6) a schedule for the work;
     (6)(7) description of surrounding area, including location of water
supply wells, surface waters and other sensitive receptors; and
      (7)(8)   such other information and assurances as the secretary may
require.
Sec. 2. 10 V.S.A. § 1942 is amended to read:
§ 1942. PETROLEUM DISTRIBUTOR LICENSING FEE
   There is hereby established a licensing fee of one cent per gallon of motor
fuel sold by a distributor or dealer or used by a user in this state and a licensing
fee of one-half cent per gallon of heating oil and kerosene, which will be
assessed against every distributor, dealer or user as defined in 23 V.S.A.
chapters 27 and 28, and which will be deposited into the petroleum cleanup
fund. This fee These fees will be paid in the same manner, at the same time,
and subject to the same restrictions or limitations as the tax on motor fuels.
The fee These fees will be collected by the commissioner of motor vehicles
                                      - 696 -
and deposited into the petroleum cleanup fund. This Prior to January 1 and
June 30 each year, the balance in the petroleum cleanup fund will be evaluated.
If the fund balance exceeds $4.5 million, then the fees will not be collected
until such time as the balance falls below $2 million. These fee requirement
requirements shall terminate on April 1, 2006 2011.
Sec. 3. 10 V.S.A. § 1944 is amended to read:
§ 1944. UNDERGROUND STORAGE TANK LOAN ASSISTANCE
    PROGRAM
   (a) The secretary may make individual loans of up to $40,000.00 for:
      (1) the replacement of underground motor fuel storage tanks used for the
storage of petroleum products and permitted under section 1927 of this title
and in existence on January 1, 1987. Such loans may be made only for the
replacement of motor fuel tanks at a retail gasoline outlet that sells less than
20,000 gallons of gasoline per month or at a municipal facility when the
municipality has a population of less than 2,500 people;
      (2) the replacement or improvement, or both, of piping, tank-top sumps,
and other components of the secondary containment and release detection
systems, for the purpose of reducing the likelihood of a release of regulated
substance to the environment.
   (b) Loans shall be made to the person who owns the existing motor fuel
tanks or will own the new motor fuel tanks. Loans will be in accordance with
terms and conditions established by the secretary which shall include but not
be limited to requirements that:
       (1) loans be made only for the costs associated with the replacement of
an underground motor fuel storage tank or improvement of piping and
ancillary equipment used for the storage of petroleum products and associated
facilities with a tank and facilities conforming to the requirements of this
chapter;
                                      ***
   (g) The secretary may refinance existing loans for motor fuel tanks used for
the storage of petroleum products incurred after July 1, 1987 under the same
terms, conditions, and limitations which apply to initial loans
Sec. 4. IMPLEMENTATION
    Upon passage of this act, the secretary of natural resources is authorized,
during calendar year 2004, to expend funds from the heating fuel account, as
specified in this act, in anticipation of the fees to be collected, assuming there
is adequate money available in the motor fuel account.
                                       - 697 -
Sec. 5. REPORT
   By January 15, 2005, the petroleum cleanup fund advisory committee shall
report to the House and Senate Natural Resources and Energy Committees on
the following:
      (1) Proposed standards for the installation of aboveground heating fuel
storage tanks, or other mechanisms to prevent future releases from
aboveground heating fuel storage tanks.
      (2) Proposed financial incentives to recipients of petroleum cleanup fund
monies whose aboveground heating fuel storage tanks are in compliance with
industry standards (NFPA Code 31).
      (3) The effect of pollution liability insurance exclusions on the
availability of homeowners insurance, and its impact on the petroleum cleanup
fund.
(Committee vote: 10-0-1)
   Rep. Anderson of Woodstock, for the Committee on Ways and Means,
recommends the bill ought to pass when amended as recommended by the
Committee on Natural Resources and Energy and when further amended as
follows:
   First: By striking Sec. 2 and inserting a new Sec. 2 to read:
Sec. 2. 10 V.S.A. § 1942 is amended to read:
§ 1942. PETROLEUM DISTRIBUTOR LICENSING FEE
   (a) There is hereby established a licensing fee of one cent per gallon of
motor fuel sold by a distributor or dealer or used by a user in this state, which
will be assessed against every distributor, dealer or user as defined in
23 V.S.A. chapters 27 and 28, and which will be deposited into the petroleum
cleanup fund. This fee will be paid in the same manner, at the same time, and
subject to the same restrictions or limitations as the tax on motor fuels. The
fee will be collected by the commissioner of motor vehicles and deposited into
the petroleum cleanup fund. This fee requirement shall terminate on April 1,
2006 2011.
   (b) There is assessed against every seller receiving more than $10,000.00
annually for the retail sale of heating oil or kerosene, sold in this state and not
used to propel a motor vehicle, a licensing fee of one-half cent per gallon of
such heating oil or kerosene. This fee shall be subject to the collection,
administration and enforcement provisions of chapter 233 of Title 32, and the
fees collected under this subsection by the commissioner of taxes shall be

                                      - 698 -
deposited into the petroleum cleanup fund. This fee provision shall terminate
April 1, 2011.
   (c) The balance in the petroleum cleanup fund shall be determined as of
January 1 and June 30 each year; and if on the date of the determination the
fund balance exceeds $4.5 million, then the fees under this section shall not be
imposed, but imposition of the fees shall resume if the balance is determined to
have fallen below $2 million. Any cessation or resumption of the imposition
of fees shall take effect in March following a January fund balance
determination or September following a June 30 determination. In determining
the fund balance for this purpose, any moneys from the fund which have, after
April 1, 2004, been appropriated, withdrawn, or otherwise spent for any
purpose other than those set forth in section 1941 of this title shall be deemed
to remain in the fund. The licensing fees imposed by this section shall
terminate April 1, 2011.
   Second: In Sec. 3, in 10 V.S.A. § 1944(a)(1), after ―(1) the replacement‖,
by inserting the words ―or removal‖
(Committee vote: 8-3-0)
                                     H. 715
   An act relating to the establishment of the Vermont Municipal Land
Records Commission.
   (Rep. Kennedy of Chelsea will speak for the Committee on Local
Government.)
   Rep. Morrissey of Bennington, for the Committee on Ways and Means,
recommends the bill be amended as follows:
   First: In Sec. 1, 24 V.S.A § 5403(b), by striking the word ―less‖ preceding
the phrase ―than 10,000 residents‖ and inserting in lieu thereof the word
―fewer‖ and by striking the word ―less‖ preceding the phrase ―than 3,000
residents‖ and inserting in lieu thereof the word ―fewer‖ and following the
phrase ―the Vermont Mortgage Bankers Association for an initial term of four
years‖, by adding the phrase ―; one lister or assessor to be recommended by the
Vermont Association of Listers and Assessors for an initial term of four years‖
   Second: In Sec. 4, following the phrase ― No. 66 of the Acts of 2003 shall
be‖ by adding the phrase ―transferred to the office of the secretary of state and‖
   Third: In Sec. 5, by striking the first sentence of the section in its entirety
and inserting in lieu thereof the sentence, ―The amount of $30,000.00 of the
funds appropriated to the office of the secretary of state in Sec. 78 of H.768 of
2004 shall be allocated to the commission for administrative and research
services, including the hiring of staff or consultants.‖
(Committee vote: 11-0-0)
                                       - 699 -
                                       S. 247
   An act relating to the department of banking, insurance, securities, and
health care administration.
    Rep. Parent of St. Albans City, for the Committee on Commerce,
recommends that the House propose to the Senate that the bill be amended by
striking all after the enacting clause and inserting in lieu thereof the following:
Sec. 1. 8 V.S.A. § 14(a) is amended to read:
   (a) The commissioner shall report annually, on or before June 1, to the
governor as to the conditions of persons regulated by the banking division and.
The commissioner shall report annually, on or before September 1, to the
governor as to the conditions of all insurance companies chartered by or doing
business in this state. The reports may be separate and shall contain statements
as to the financial condition of each institution, and any other information or
recommendations which the commissioner deems appropriate. The report
shall also contain a review of the rules of the department, regardless of the
process for adopting such rules, at a frequency such that each rule is reviewed
at least every five years for efficiency and effectiveness in carrying out the
policies and goals of this state relating to financial institutions, insurance
mechanisms, and the sale of investments.
                              * * * Insurance * * *
Sec. 2. 8 V.S.A. § 3304 is amended to read:
§ 3304. CAPITAL AND SURPLUS REQUIREMENTS
    To qualify for authority to transact the business of insurance, a stock insurer
seeking such authorization after July 1, 1991 shall possess and thereafter
maintain unimpaired paid-in capital of not less than $2,000,000.00 and, when
first so authorized, shall possess and maintain free surplus of not less than
$3,000,000.00. Such capital and surplus shall be in the form of cash or
marketable securities, a portion of which may be held on deposit with the state
treasurer, such securities as designated by the insurer and approved by the
commissioner, in an amount and subject to such conditions determined by the
commissioner. Such conditions shall include a requirement that any interest or
other earnings attributable to such cash or marketable securities shall inure to
the benefit of the insurer until such time as the commissioner determines that
the deposit must be used for the benefit of the policyholders of the insurer or
some other authorized public purpose relating to the regulation of the insurer.
The commissioner may prescribe additional capital or surplus for all stock
insurers authorized to transact the business of insurance based upon the type,
volume, and nature of insurance business transacted.

                                     - 700 -
Sec. 3. 8 V.S.A. § 3309 is amended to read:
§ 3309. MUTUAL INSURERS TO COMMENCE BUSINESS; WHEN
    A corporation which, according to its charter, is not to have a capital stock
shall not after July 1, 1991 receive authorization to commence business until it
complies with such preliminary requirements for the procurement of an
adequate amount of subscriptions for insurance and possesses and thereafter
maintains unimpaired basic surplus of not less than $2,000,000.00 and, when
first so authorized, shall possess free surplus of not less than $3,000,000.00.
The commissioner in his or her discretion may establish lesser surplus amount
requirements in the case of affiliated corporations jointly conducting the
business of insurance under a pooling agreement. Such surplus shall be in the
form of cash or marketable securities, a portion of which may be held on
deposit with the state treasurer, such securities as designated by the insurer and
approved by the commissioner, in an amount and subject to such conditions
determined by the commissioner. Such conditions shall include a requirement
that any interest or other earnings attributable to such cash or marketable
securities shall inure to the benefit of the insurer until such time as the
commissioner determines that the deposit must be used for the benefit of the
policyholders of the insurer or some other authorized public purpose relating to
the regulation of the insurer. The commissioner may prescribe additional
surplus based upon the type, volume, and nature of insurance business
transacted.
Sec. 4. 8 V.S.A. § 3366 is amended to read:
§ 3366. ASSETS OF COMPANIES
   Such insurer shall not do business in this state unless it has assets of at least
$200,000.00 invested in securities readily convertible into cash, not less than
half of which is invested in cash securities other than real estate mortgages, nor
unless it has assets equal to its outstanding liabilities including reinsurance
reserve, and including the amount of guarantee capital as a liability. Such
insurer authorized to do business in this state shall possess and thereafter
maintain unimpaired paid-in capital or basic surplus of not less than
$2,000,000.00 and, when first so authorized, shall possess and maintain free
surplus of not less than $3,000,000.00. Such capital and surplus shall be in the
form of cash or marketable securities, a portion of which may be held on
deposit with the state treasurer, such securities as designated by the insurer and
approved by the commissioner, in an amount and subject to such conditions
determined by the commissioner. Such conditions shall include a requirement
that any interest or other earnings attributable to such cash or marketable
securities shall inure to the benefit of the insurer until such time as the
commissioner determines that the deposit must be used for the benefit of the
                                      - 701 -
policyholders of the insurer or some other authorized public purpose relating to
the regulation of the insurer. The commissioner may prescribe additional
capital or surplus for all insurers authorized to transact the business of
insurance based upon the type, volume, and nature of insurance business
transacted.
Sec. 5. 8 V.S.A. § 3563 is amended to read:
§ 3563. EXAMINATION OF COMPANIES; FEES
   The commissioner shall thoroughly inspect and examine the affairs of each
domestic insurer to ascertain its financial condition, its ability to fulfill its
obligations and whether it has complied with the provisions of law. Such an
inspection and examination shall be conducted personally or by a competent
person appointed by the commissioner at least every three years and whenever
determined to be prudent by the commissioner. The commissioner upon
application, in his or her discretion, may enlarge the aforesaid three-year
period to five years, provided the insurer making such application is subject to
a comprehensive annual audit during such period of a scope satisfactory to the
commissioner by independent auditors approved by the commissioner. The
examination shall be conducted in accordance with statutory accounting
principles pursuant to guidelines, principles, manuals, instructions, and other
procedures promulgated by the National Association of Insurance
Commissioners, together with any useful or necessary modifications or
adaptations thereof required or approved by the commissioner. The expenses
of the examinations shall be paid to the state by the company or companies
examined and the commissioner of finance and management shall issue his or
her warrants for the proper charges incurred in all examinations.
Sec. 6. 8 V.S.A. § 3564(a) is amended to read:
    (a) At least once every three years and when the commissioner determines
it to be prudent for the protection of policyholders in this state, he or she shall,
in like manner, visit and examine or cause to be visited and examined by some
competent person whom the commissioner may appoint for that purpose, any
foreign or alien insurer applying for admission or already admitted to do
business in this state. The commissioner may upon application enlarge the
aforesaid three-year period to five years. The examination of an alien insurer
shall be limited to its insurance transactions and affairs in the United States
unless otherwise required by the commissioner. The examination shall be
conducted in accordance with statutory accounting principles pursuant to
guidelines, principles, manuals, instructions and other procedures promulgated
by the National Association of Insurance Commissioners, together with any
useful or necessary modifications or adaptations thereof required or approved
by the commissioner. Such insurer shall pay the proper charges incurred in
                                      - 702 -
such examination, including the expenses of the commissioner and the
expenses and compensation of his or her assistants employed therein. Such
examination shall include a computation of the reinsurance reserve.
Sec. 7. 8 V.S.A. § 3661 is amended to read:
§ 3661. CEASE AND DESIST POWERS; PROSECUTIONS AND
         PENALTIES
   (a) When the commissioner believes that an insurer or an officer or agent
thereof, or any other person, has violated the law, an administrative rule of the
department, or an order of the commissioner relating to insurance, or has not
complied with its requirements, he or she:
       (1) may issue an order to cease and desist such violation or activity.
Such an order shall be subject to de novo judicial review in the Washington
superior court, but such review shall not stay the enforcement of the
commissioner’s order while under review, unless the court shall so determine
after a preliminary hearing that a stay of enforcement will not unduly injure the
interests of the people of the state, in which case a stay of execution may be
granted; and
      (2) shall forthwith may report each violation with any information he or
she has relating thereto to the attorney general who shall prosecute therefor if
he or she deems it advisable. The offender shall be fined not more than
$2,000.00 as a result of any such prosecution by the attorney general; and
     (3) may, after notice and opportunity for hearing, impose a civil
administrative penalty of not more than $1,000.00 for each violation, and not
more than $10,000.00 for each willful violation.
   (b) The powers vested in the commissioner by this section shall be in
addition to any other powers to enforce penalties, fines, or forfeitures
authorized by law with respect to violations of the law relating to insurance,
except that the commissioner shall not impose an administrative penalty under
subdivision (a)(3) of this section if the commissioner may impose another
administrative penalty authorized by law for the same violation.
                         * * * Captive Insurance * * *
Sec. 8. 8 V.S.A. § 6008(a) is amended to read:
    (a) At least once in three years, and whenever the commissioner determines
it to be prudent, the commissioner shall personally, or by some competent
person appointed by the commissioner, visit each captive insurance company
and thoroughly inspect and examine its affairs to ascertain its financial
condition, its ability to fulfill its obligations and whether it has complied with
                                     - 703 -
the provisions of this chapter. The commissioner upon application, in the
commissioner’s discretion, may enlarge the aforesaid three-year period to five
years, provided said captive insurance company is subject to a comprehensive
annual audit during such period of a scope satisfactory to the commissioner by
independent auditors approved by the commissioner. The expenses and
charges of the examination shall be paid to the state by the company or
companies examined and the commissioner of finance and management shall
issue his or her warrants for the proper charges incurred in all examinations.
                             * * * Banking * * *
Sec. 9. 8 V.S.A. § 1803 is amended to read:
§ 1803. DETERMINATION OF CONVENIENCE AND ADVANTAGE;
        ANNUAL EXAMINATION PUBLIC GOOD
   Prior to the granting of a charter to a development credit corporation, the
convenience and advantage to the state of Vermont shall be determined by the
commissioner of banking, insurance, securities, and health care administration,
and annually, or more often as, in his opinion shall be deemed necessary, the
affairs of the corporation shall be examined by the commissioner of banking,
insurance, securities, and health care administration or his delegated
representatives at the expense of the corporation commissioner shall find that
such grant shall promote the general good of the state.
Sec. 10. 8 V.S.A. § 2224 is amended to read:
2224. ANNUAL REPORT
   Annually, on or before May April 1, each licensee shall file a report with
the commissioner giving such relevant information as the commissioner
reasonably may require concerning the business and operations during the
preceding calendar year of each licensed place of business conducted by such
licensee within the state. Such report shall be made under oath and shall be in
the form prescribed by the commissioner, who shall make and publish annually
an analysis and recapitulation of such reports.
Sec. 11. 8 V.S.A. § 2403(g) is amended to read:
   (g) At the time it commences business, an independent trust company shall
have, and shall maintain thereafter unimpaired capital in the amount of
$250,000.00 or one-quarter of one percent of the first year’s projected assets
under management, whichever is greater. The unimpaired capital and surplus
of an independent trust company shall be held as security for the faithful
discharge of the fiduciary duties undertaken as well as for the claims of other
creditors. The commissioner may from time to time require or allow
adjustments to capital as deemed necessary or desirable for the protection of
                                    - 704 -
customers and the safety of the trust business. The safety and soundness
factors to be considered by the commissioner in the exercise of such discretion
include:
      (1) the nature and type of business conducted;
    (2) the nature and degree of liquidity in assets held in a corporate or
company capacity;
      (3) the amount of fiduciary assets under management;
     (4) the complexity of fiduciary duties and degree of discretion
undertaken; and
      (5) the extent and adequacy of internal controls.
Sec. 12. 8 V.S.A. § 2509(c) is amended to read:
   (c) If a licensee does not file an annual report on or before May April 1, or
pay its renewal fee by December 1, or within any extension of time granted by
the commissioner, the commissioner shall send the licensee a notice of
suspension. The licensee’s license shall be suspended ten calendar days after
the commissioner sends the notice of suspension. The licensee has 20 days
after its license is suspended in which to file an annual report or pay the
renewal fee, plus $100.00 for each day after suspension that the commissioner
does not receive the annual report or the renewal fee. The commissioner for
good cause may grant an extension of the due date of the annual report or the
renewal date.
Sec. 13. 8 V.S.A. § 2518(c) is amended to read:
   (c) If a licensee does not file an annual report on or before May April 1, or
pay its renewal fee by December 1, or within any extension of time granted by
the commissioner, the commissioner shall send the licensee a notice of
suspension. The licensee’s license shall be suspended ten calendar days after
the commissioner sends the notice of suspension. The licensee has 20 days
after its license is suspended in which to file an annual report or pay the
renewal fee, plus $100.00 for each day after suspension that the commissioner
does not receive the annual report or the renewal fee. The commissioner for
good cause may grant an extension of the due date of the annual report or the
renewal date.
                    * * * Health Care Administration * * *
Sec. 14. 18 V.S.A. § 9434(a)(4), (c)(2), and (d) are amended to read:
       (4) The purchase, lease, or other comparable arrangement of a single
piece of durable medical diagnostic and therapeutic equipment for which the
cost, or in the case of a donation the value, is in excess of $1,000,000.00. For
                                      - 705 -
purposes of this subdivision, the purchase or lease of one or more articles of
diagnostic or therapeutic equipment which are necessarily interdependent in
the performance of their ordinary functions or which would constitute any
health care facility included under subdivision 9432(7)(B) of this title, as
determined by the commissioner, shall be considered together in calculating
the amount of an expenditure. The commissioner’s determination of functional
interdependence of items of equipment under this subdivision shall have the
effect of a final decision and is subject to appeal under this subchapter.
       (2) The purchase, lease, or other comparable arrangement of a single
piece of durable medical diagnostic and therapeutic equipment for which the
cost, or in the case of a donation the value, is in excess of $1,000,000.00. For
purposes of this subdivision, the purchase or lease of one or more articles of
diagnostic or therapeutic equipment which are necessarily interdependent in
the performance of their ordinary functions or which would constitute any
health care facility included under subdivision 9432(7)(B) of this title, as
determined by the commissioner, shall be considered together in calculating
the amount of an expenditure. The commissioner’s determination of functional
interdependence of items of equipment under this subdivision shall have the
effect of a final decision and is subject to appeal under this subchapter.
   (d) A hospital that proposes to develop a project described in subdivision
(c)(1) or (2) of this section which is exempt from the requirements of this
subchapter solely because the cost or value of the proposed project does not
exceed the financial thresholds of those subdivisions shall file a letter of intent
with the commissioner, if the cost or value is greater than $1,500,000.00 or, in
the case of durable medical diagnostic and therapeutic equipment,
$750,000.00. Upon review, the commissioner may require the health care
facility to obtain a certificate of need if, within 30 days of receiving the letter
of intent, he or she finds that the proposed development:
      (1) may be inconsistent with the health resource allocation plan;
      (2) has the potential for significantly increasing utilization or rates;
      (3) may substantially change the type, scope, or volume of service; or
      (4) has the potential to place an undue financial burden on the hospital’s
resources.
Sec. 15. INTENT; APPLICABILITY
   Sec. 14 of this act is intended to effectuate legislative intent in the
enactment of No. 53 of the Acts of 2003. Sec. 14 shall take effect on passage
and shall apply to health care projects on and after July 1, 2003.
Sec. 16. REPEAL
                                      - 706 -
   The following are repealed:
      (1) 8 V.S.A. § 10401 (reports and publication of interest rates).
     (2) Sec. 12 of No. 84 of the Acts of the 1999 Adj. Sess. (2000)
(domestic insurance company investments).
     (3) Sec. 6 of No. 160 of the Acts of the 1997 Adj. Sess. (1998) (report
on genetic testing and insurance).
Sec. 17. 8 V.S.A. § 3750(d) is amended to read:
   (d) The minimum values as specified in subsections (e), (f), (g), (h), and (j)
of any paid-up annuity, cash surrender, or death benefits available under an
annuity contract shall be based upon minimum nonforfeiture amounts as
defined in this section.
      (1)(A) With respect to contracts providing for flexible considerations,
the The minimum nonforfeiture amount at any time at or prior to the
commencement of any annuity payments shall be equal to an accumulation up
to such time at a rate of interest of one and
one-half percent per annum of percentages rates of interest as indicated in
subdivision (C) of this subdivision (1) of the net considerations (as hereinafter
defined) paid prior to such time:
            (i) decreased by the sum of:
              (I)(i) any prior withdrawals from or partial surrenders of the
contract accumulated at a rate of interest of one and one-half percent per
annum rates of interest as indicated in subdivision (1)(C) of this subsection;
and
                (II)(ii) the amount of any indebtedness to the company on the
contract, including interest due and accrued; and
              (iii) an annual contract charge of $50.00, accumulated at rates of
interest as indicated in subdivision (1)(C) of this subsection.
          (ii) increased by any existing additional amounts credited by the
company to the contract.
         (B) The net considerations for a given contract year used to define
the minimum nonforfeiture amount shall be an amount not less than zero and
shall be equal to 87 and one-half percent (87.5 %) of the corresponding gross
considerations credited to the contract during that contract year less an annual
contract charge of $30.00 and less a collection charge of $1.25 per
consideration credited to the contract during that contract year. The
percentages of net considerations shall be 65 percent of the net consideration
                                     - 707 -
for the first contract year and 87 and one-half percent of the net considerations
for the second and later contract years. Notwithstanding the provisions of the
preceding sentence, the percentage shall be 65 percent of the portion of the
total net consideration for any renewal contract year which exceeds by not
more than two times the sum of those portions of the net considerations in all
prior contract years for which the percentage was 65 percent.
      (2)    With respect to contracts providing for fixed scheduled
considerations, minimum nonforfeiture amounts shall be calculated on the
assumption that considerations are paid annually in advance and shall be
defined as for contracts with flexible considerations which are paid annually
with two exceptions:
          (A) The portion of the net consideration for the first contract year to
be accumulated shall be the sum of sixty-five percent of the net consideration
of the first contract year plus twenty-two and one-half percent of the excess of
the net consideration for the first contract year over the lesser of the net
considerations for the second and third contract years.
         (B) The annual contract charge shall be the lesser of
            (i) thirty dollars or
            (ii) ten percent of the gross annual consideration.
      (3) With respect to contracts providing for a single consideration,
minimum nonforfeiture amounts shall be defined as for contracts with flexible
considerations except that the percentage of net consideration used to
determine the minimum nonforfeiture amount shall be equal to ninety percent
and the net consideration shall be the gross consideration less a contract charge
of seventy-five dollars.
          (C) The interest rate used in determining minimum nonforfeiture
amounts shall be an annual rate of interest determined as the lesser of three
percent (3%) per annum and the following, which shall be specified in the
contract if the interest will be reset:
            (i) The five-year Constant Maturity Treasury Rate reported by the
Federal Reserve as of a date, or average over a period, rounded to the nearest
one-twentieth of one percent, specified in the contract no longer than 15
months prior to the contract issue date or redetermination date under
subdivision (iv) of this subdivision (C);
            (ii) Reduced by 125 basis points;
            (iii) Where the resulting interest rate is not less than one percent
(1%); and

                                     - 708 -
             (iv) The interest rate shall apply for an initial period and may be
redetermined for additional periods. The redetermination date, basis, and
period, if any, shall be stated in the contract. The basis is the date or average
over a specified period that produces the value of the five-year Constant
Maturity Treasury Rate to be used at the redetermination date.
        (D) During the period or term that a contract provides substantive
participation in an equity indexed benefit, it may increase the reduction
described in subdivision (ii) of this subdivision (C) by up to an additional 100
basis points to reflect the value of the equity index benefit. The present value
at the contract issue date, and at each redetermination date thereafter, of the
additional reduction shall not exceed the market value of the benefit. The
commissioner may require a demonstration that the present value of the
additional reduction does not exceed the market value of the benefit. Lacking
such a demonstration that is acceptable to the commissioner, the commissioner
may disallow or limit the additional reduction.
       (E) The commissioner may adopt rules to implement the provisions of
subdivision (D) of this subsection and to provide for further adjustments to the
calculation of minimum nonforfeiture amounts for contracts that provide
substantive participation in an equity index benefit and for other contracts that
the commissioner determines adjustments are justified.
Sec. 18. 8 V.S.A. § 6002(b) is amended to read:
   (b) No captive insurance company shall do any insurance business in this
state unless:
      (1) it first obtains from the commissioner a license authorizing it to do
insurance business in this state;
      (2) its board of directors, or committee of managers or, in the case of a
reciprocal insurer, its subscribers’ advisory committee holds at least one
meeting each year in this state;
                                      ***
Sec. 19. 8 V.S.A. § 6006 is amended to read:
§ 6006. FORMATION OF CAPTIVE INSURANCE COMPANIES IN THIS
         STATE
   (a) A pure captive insurance company may be incorporated as a stock
insurer with its capital divided into shares and held by the stockholders, or as a
nonprofit corporation with one or more members, or as a manager-managed
limited liability company.

                                     - 709 -
   (b) An association captive insurance company, an industrial insured captive
insurance company, or a risk retention group may be:
     (1) incorporated as a stock insurer with its capital divided into shares
and held by the stockholders;
     (2) incorporated as a mutual insurer without capital stock, the governing
body of which is elected by its insureds; or
        (3) organized as a reciprocal insurer in accordance with chapter 132 of
this title; or
      (4) organized as a manager-managed limited liability company.
                                      ***
   (d) In the case of a captive insurance company:
                                      ***
      (1)(A) formed as a corporation, before the articles of incorporation are
transmitted to the secretary of state, the incorporators shall petition the
commissioner to issue a certificate setting forth the commissioner’s finding
that the establishment and maintenance of the proposed corporation will
promote the general good of the state. In arriving at such a finding the
commissioner shall consider:
                                      ***
         (B) The the articles of incorporation, such certificate, and the
organization fee shall be transmitted to the secretary of state, who shall
thereupon record both the articles of incorporation and the certificate.
                                      ***
       (3) formed as a limited liability company, before the articles of
organization are transmitted to the secretary of state, the organizers shall
petition the commissioner to issue a certificate setting forth the commissioner’s
finding that the establishment and maintenance of the proposed company will
promote the general good of the state. In arriving at such a finding, the
commissioner shall consider the items set forth in subdivisions (1)(A)(i)-(iii) of
this subsection.
                                      ***
   (f) In the case of a captive insurance company:
      (1) formed as a corporation, at least one of the members of the board of
directors shall be a resident of this state; and


                                     - 710 -
      (2) formed as a reciprocal insurer, at least one of the members of the
subscribers’ advisory committee shall be a resident of this state;
       (3) formed as a limited liability company, at least one of the managers
shall be a resident of this state.
   (g) Other than captive insurance companies formed as limited liability
companies under chapter 21 of Title 11 or as nonprofit corporations under Title
11B, captive insurance companies formed as corporations under the provisions
of this chapter shall have the privileges and be subject to the provisions of Title
11A as well as the applicable provisions contained in this chapter. In the event
of conflict between the provisions of said general corporation law and the
provisions of this chapter, the latter shall control.
   (h) Captive insurance companies formed under the provisions of this
chapter:
      (1) as limited liability companies shall have the privileges and be subject
to the provisions of chapter 21 of Title 11 as well as the applicable provisions
contained in this chapter. In the event of a conflict between the provisions of
chapter 21 of Title 11 and the provisions of this chapter, the latter shall control;
or
       (2) as nonprofit corporations under the provisions of this chapter shall
have the privileges and be subject to the provisions of Title 11B as well as the
applicable provisions contained in this chapter. In the event of conflict
between the provisions of Title 11B and the provisions of this chapter, the
latter shall control.
                                       ***
Sec. 20. 11 V.S.A. § 3012(b)(2) is amended to read:
      (2) insurance companies regulated under Title 8, except that captive
insurance companies regulated under chapter 141 of Title 8 may be formed as
limited liability companies.
Sec. 21. ADOPTION OF REVISED MORTALITY TABLE
   Notwithstanding the provisions of 8 V.S.A. § 3784(a)(2)(iii) and
3747a(h)(6) authorizing the commissioner of banking, insurance, securities,
and health care administration to adopt an ordinary mortality table by
regulation, the commissioner may adopt the National Association of Insurance
Commissioners’ 2001 CSO Mortality Table through the issuance of a bulletin.
Such bulletin shall be effective until such time as the commissioner adopts a
final administrative rule relating to the mortality table.
Sec. 22. EFFECTIVE DATE; REPEAL OF SUNSET
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   (a) This act shall take effect July 1, 2004, except for Secs. 18-22, which
shall take effect upon passage. After the effective date of Sec. 17, a company
may elect to apply the provisions of that section of this act to annuity contracts
on a contract-form-by-contract-form basis before the second anniversary of the
effective date of this act. In all other instances, Sec. 17 of this act shall become
operative with respect to annuity contracts issued by the company after the
second anniversary of the effective date of this act.
   (b) Sec. 2 of No. 11 of the Acts of 2003 is repealed effective July 1, 2004.
   (c) Sec. 3 of No. 11 of the Acts of 2003 is amended to read:
Sec. 3. EFFECTIVE DATE
   This act, except for Sec. 2, shall be effective upon passage and shall apply
to all contracts of annuity subject to 8 V.S.A. § 3750 issued after that date.
Sec. 2 shall be effective January 1, 2005.
(Committee vote: 9-0-2)
                                    Ordered to Lie
                                       H. 743
   An act relating to securities.

                           CONSENT CALENDAR
         Concurrent Resolutions for Adoption Under Joint Rule 16
   The following concurrent resolutions will be adopted automatically unless a
member requests floor consideration before the end of today’s legislative
session. Requests for floor consideration should be communicated to the Clerk
of the House or to a member of his staff
(For text of Resolutions, see Addendum to House and Senate Notice
Calendar for Thursday, April 1, 2004)
                                     H.C.R. 246
   House concurrent resolution in memory of Vermont Army National Guard
Sergeant William Joseph Normandy
                                     H.C.R. 247
  House concurrent resolution congratulating the 2004 Middlebury Union
High School Tigers Division I girls’ basketball championship team
                                     H.C.R. 248
  House concurrent resolution congratulating Joseph Bowen on being
awarded his second Vermont Principal of the Year Award
                                        - 712 -
                                H.C.R. 249
   House concurrent resolution congratulating Kathy Buley on her receipt of
the 2004 Vermont-NEA Award for Teaching Excellence
                                H.C.R. 250
   House concurrent resolution congratulating Taylor Coppenrath on winning
his second consecutive Kevin Roberson America East Men’s Basketball Player
of the Year Award
                                H.C.R. 251
   House concurrent resolution congratulating the 2004 Arlington Memorial
High School Lady Eagles second consecutive championship Division III girls’
basketball team
                                H.C.R. 252
  House concurrent resolution honoring the Weston Playhouse Theatre
Company
                                S.C.R. 50.
   Senate concurrent resolution honoring Margaret Lucenti of Montpelier on
her receipt of the 2004 David Curtis award.
                                S.C.R. 51.
   Senate concurrent resolution congratulating Anne R. Howrigan of Fairfield
on being named the 2004 Vermont Mother of the Year.
                                S.C.R. 52.
   Senate concurrent resolution congratulating the 2004 Middlebury College
Panther alpine and Nordic ski teams on winning the Eastern Intercollegiate
Skiing Association (EISA) Championship.
                                S.C.R. 53.
   Senate concurrent resolution congratulating the Catamount Family Center
on the occasion of its 25th anniversary.
                          PUBLIC HEARINGS
  Wednesday, April 7, 2004 – Winooski Senior Center – 115 Barlow Street –
Winooski VT - 3 – 5 PM – House and Senate Committees on Education –
Bullying Prevention in
                        INFORMATION NOTICE
  The following item was recently received by the Joint Fiscal Committee:

                                  - 713 -
   JFO #2150 – Request from the Department of Health to establish one (1)
new limited service position—Public Health Specialist. This sponsored
position is federally funded and associated with a continuing comprehensive
cancer control program grant from the U.S. Department of Health and Human
Services, Centers for Disease Control. The Department was recently awarded
$129,536 in additional funding (approved by the administration via the excess
receipts                                                             process).
[JFO received 03/29/04]




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