On Tuesday of this week the Herald ran an article relating to the state’s budget woes. The prediction, which we won’t hear until Tuesday of next week, is that there may be a revenue shortfall of $20 million. So how does that affect the judiciary budget, Vermont Legal Aid’s budget, etc? I remember that, during the VBA Board’s discussion on whether to support the court’s fee increase package, one member asked what is to stop the legislature from raising fees and then not giving the judiciary the increases it was seeking. My answer then was “nothing” as the fees don’t go into a special fund. The likelihood of that happening, or an across the board rescission, or not funding the court’s pay act (the cause of this year’s problems) is now higher than ever.

I’m still following the fee bill but now think that any request to strike the “appeal from family court magistrate decision” is hopeless in light of the state’s economic picture. At the request of some members of our tax law section, I am working with them on H. 888, the miscellaneous tax bill. Although their issue doesn’t affect revenues, I happened to be in Senate Finance this past Tuesday when Gallagher, Flynn asked that a provision of the bill be stricken (a capital gains piece, I think). After the witness testified, Ann Cummings, committee chair, said that she’d been told by Shap Smith that making that change would cost the state $1.9, AND that the House had already spent that money in the budget! Needless to say, that’s not going anywhere.

On a brighter note, other items of interest to the VBA do seem to be making some progress. The Senate Finance Committee voted out H. 775, the L3C bill, with some small amendments that should pose no problem for the House. H. 458, digital corporations is back on Finance’s calendar for Friday afternoon, after having been cancelled last Friday because of prolonged floor debate in the Senate. We were able to offer testimony on H.888 last Friday afternoon after the Senate adjourned. Jon Eggleston, John Newman, Paul Hanlon, and Ron Morgan each spoke against a provision in the bill (sec. 25) that would eliminate the automatic appeal to superior court if a request for a refund is not acted upon by the commissioner within six months. I heard the testimony, which the committee “got”; we’re hoping that section 25 will be stricken from the bill. That would give the department and the VBA’s Tax Section the summer to sit down and work out their differences.

I have a commitment from the chair of the House Commerce Committee to take up S. 227, the angel investor bill during the week of the 21 st. According to the chair and the committee’s legislative counsel, there are no problems or issues with it that should prevent easy passage and agreement with the Senate passed version.

I do not yet have a commitment from the chair of House Judiciary to take up the real estate bills that are in that committee. The lawyer members of Judiciary- Peg Flory and Willem Jewett- are asking the chair to set aside the time to work on these. They are priorities for those of you that do real estate work but don’t seem to be priorities for the lay people on the committee. Their interest is more drawn to the juvenile bills and to the domestic violence bill passed by the senate. That bill actually creates other problems in that, in addition to raising the surcharge on tickets and fines from $26 to $39, it raises the filing fee for divorces to $275! We’ve opposed that from the outset, especially considering that the fee bill already contains an increase from $225 to $250.

On Thursday morning Caledonia Probate Judge Toby Balivet returned to the Senate Judiciary Committee as they reviewed additions to the spousal share bill, H. 203. The committee seemed to both approve of the bill and the additions. They will hear from a witness opposed next Wednesday and decide then whether to send the bill to the Senate floor for action. I heard Thursday that Senate committees are being asked to complete their business by next Wednesday; the leadership appears serious about a May 2 nd adjournment. In light of all the talk this week about Vermont’s dismal financial picture, I don’t see it happening. But I guess I don’t see the legislature appropriating itself more money for overtime either. We’ll just wait and see.

Although we had a hearing scheduled on H. 352 on Wednesday, it was cancelled when the Senate Economic Development Committee got hung up on another bill. The hearing has been rescheduled for next week. Andy Mikell did travel to Montpelier to testify about Sec. 21 of the bill which I’ll reprint here:

Sec.21.  18 V.S.A. § 1767 is added to read: 

§ 1767.  TRANSFER OF OWNERSHIP OF TARGET HOUSING;
RISK ASSESSMENT; EMP COMPLIANCE

(a)  At the time a purchase and sale agreement for target housing is executed, the real estate agent and seller shall provide the buyer with materials approved by the commissioner, including a lead paint hazard brochure, materials on other lead hazards in housing, and a disclosure form.  The disclosure form shall include any assurance of discontinuance, administrative order, or court order, the terms of which are not completed, and, if the property is rental target housing, verification that the EMP have been completed and that a current EMP compliance statement has been filed with the department.

(b)  At a closing for the transfer of title of target housing, real estate agents, sellers, and other transferors shall provide the buyer or transferee with any materials delineated in subsection (a) of this section not previously disclosed and a lead‑safe renovation practices packet approved by the commissioner and shall disclose any assurance of discontinuance, administrative order, or court order not disclosed pursuant to subsection (a) of this section, the terms of which are not completed.

(c)  No transfer of title of a rental target housing, building or unit may occur if the building or unit is currently the subject of an assurance of discontinuance, administrative order, or court order unless the assurance or order is amended in writing to transfer to the buyer or other transferee all remaining obligations under the assurance or order. 

(d)  At the time of any transfer of title of rental target housing the real estate agents, sellers, and other transferors of title shall provide the buyer or transferee with information approved by the commissioner explaining EMP obligations. 

(e)  A buyer or other transferee of title to rental target housing who has purchased or received a building or unit that is not in full compliance with section 1759 of this title shall bring the target housing into compliance with section 1759 of this title within 60 days after the closing.  Within the 60‑day period, the buyer or transferee may submit a written request for an extension of time for compliance, which the commissioner may grant in writing for a stated period of time for good cause only.  Failure to comply with this subsection shall result in a mandatory civil penalty.

(f)  This section shall not apply to target housing that has been certified lead free.

(g)  Noncompliance with this section shall not affect marketability of title.

He outlined his testimony as follows: "I have no position on whether the disclosures required of and by the seller are good or bad, BUT bills like this one that impose obligations on sellers (e.g. 'thou shalt disclose a, b & c to the buyer') but which bills conclude by saying 'if you fail to disclose that which we said you had to disclose, it doesn't make your title unmarketable' tend to cause confusion in the marketplace since buyer's attorneys want the disclosures made - to comply with the statute - but seller's attorneys say we don't really have to disclose since it doesn't affect your marketability." Which end is up(?)

This drafting style re: the ‘marketable title issue’ is become very familiar and it is similar to the RBES statute (Residential Building Energy Standards which statute requires all kinds of seller documentation but concludes with "failure to comply is not a marketable title problem"). It is also like 27 VSA Sect. 612 which says missing municipal permits (though required) are not a marketable title problem. Hmmm!”

I’ll be in DC next week and not in the statehouse and will not report to you until the 25 th. Thanks for reading.

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