Tag Archives: Vermont 2016 legislative session

In the cards: Vermont captive insurance tax break

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Vermont’s specialized captive insurance businesses just got a gift in the form of a tax break from the State legislature. Captives are registered to be run out of Vermont, a few US states, Cayman Islands, Malta and Panama. The company we keep.inthecards

Now wouldn’t you think if a legislator gave out a break it would make headlines? Well this one will get a few, but likely most of them only in the sheltered world of corporate captives.

Vermont lawmakers Friday gave final approval to legislation to clarify that certain types of captives, such as sponsored and industrial insured captives that are not writing any business be allowed to enter a dormant status, exempting the captives from Vermont’s minimum annual premium tax.

The measure, H. 538, also allows for cells to be converted from a protected cell to an incorporated cell, allows cells to be transferred or sold, and allows cells to be converted to stand-alone captives of any type.

Vermont regulators provide a host of advantages to large corporations and wealthy families that form captives for modest licensing fees a small tax on premiums. But its  tough to compete with Panama and Malta for business .So now with this “house cleaning” legislation, the state is exempting their annual premium tax in some situations–discounting revenue the state would otherwise get from the captives. 

Corporations not only lower their insurance costs by forming captives but gain tax shelters and special tax benefits for them. A year ago the IRS took notice and placed some captive insurance on their “Dirty dozen” list of abusive tax scams. Commenting on corporate tax shelter benefits, a lawyer specializing in captives said: “[…] those are the icing on the cake – the cake is the numerous other non-tax advantages of captives”

But this cozy type of regulatory accommodation – tax break and rule adjustment on request is exactly what JV at the VPO says  Republican candidates Phil Scott and Randy Brock want to promote here in Vermont.

And Phil Scott is fond of saying “Imagine if we had a governor’s office that treated every sector in the same way”

For those who may have forgotten or may not know: A captive insurance business is a specialized company set up by (and captive to) a larger business to handle their own liability risk insurance needs. Essentially, an enterprise forms and manages its own insurance company as a subsidiary, and the enterprise’s other operating subsidiaries purchase insurance from the captive. 

Nice business if you can get it or make it — and get the state legislature to “protect” its benefits from the state’s own tax laws. And who is on the hook for every dime these “captives” don’t pay in taxes? Why, of course! It’s the rest of us taxpayers.

Dog Pack on the Hunt for Lt. Gov.

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There is already almost half a dozen members of the pack in the hunt, by my count, and now one more will try to fit their collar and tags in the clutch to run for Lt. Governor. And now perhaps sniffing an opportunity Sen. John Rodgers (D-Essex/Orleans) is considering it.

The NEK’s Rodgers wants to see if a run for Lt. Gov. makes sense: “I’ve got some folks looking at numbers and figuring out a path forward. If it looks doable and feasible I’ve got to figure out if it fits into my personal life.”

The field as of today – Randy Brock will as of now is the only Republican. Boots Wardinski of Newbury will be running as a Progressive and Dr. Louis Meyers who is new to politics will run as an Independent.hatnring

On the Democratic side, current office holders Sen. David Zuckerman P/D,  Rep. Kesha Ram D have announced their candidacies. Brandon Riker of Marlboro who has never held elected office is reportedly also running. Earlier former Politico.com editor Garret Graff explored making a run but dropped out. The former Montpelier resident’s plans were disrupted when — to his shock — he discovered that he did not meet eligibility rules, after a ten-year absence from Vermont — a state he claims as his “mental home.”

Maine and New Hampshire are two of five states that find no reason to have an office of Lt. Gov. at all, but here in Vermont people are falling all over themselves to run for the part-time job. The official duties are limited but include being acting governor in the governor’s absence and being President of the Senate, except when exercising the office of Governor. And of course, in the event of the death of a serving governor, the Lt. Gov takes over.

Significant in terms of the Senate, the Lt. Gov. also serves as the third member on the powerful Committee on Committees. The three-member leadership Committee on Committees hand-picks senators to serve as chair-people on standing committees. The chairs in turn influence much of what gets a hearing in the legislative sessions. Currently the C of C’s is made up of alleged Democrats Dick Mazza (Grand Isle) and Senate President Pro Tem John Campbell (Windsor) and their BFF, Republican Lt. Gov. Phil Scott.

Although he may not be well known outside of the Northeast Kingdom, Senator Rodgers previously served in the State House for 8 years. He achieved some notoriety around the state in 2015 when he introduced legislation to designate the beagle the official state dog of Vermont.

In the Senate, his “Beagle bill” was called “a source of amusement if nothing else.” However PETA (People for Ethical Treatment of Animals) expressed concern over whether naming a specific breed was “a step backwards” and worried the designation would encourage the growth of “puppy mills.”

Senator Rogers defended the bill and explained how else he intends to spend his time in the Senate:

“the Beagle Bill” that I introduced for a constituent. I assure you that it literally took about two minutes. If you want to talk about a waste of time let’s talk about the new gun control proposal that I am busy trying to stop. […].

In addition to shouldering the burden of naming a state dog and stonewalling gun control, Senator Rodgers sits on the Senate Committee on Natural Resources and Energy, as well as being vice chair of the Committee on Institutions. According to the American Conservative Union, Rodgers is one of two highest-rated Democrats on conservative issues. At 43% he is a top conservative dog compared to other Democratic senators, to whom the ACU inaccurately refers as a “coalition of the radical left.”

All the actual and potential candidates a for Lt. Governor stress the agenda-setting capacity of the job. If Rodgers chooses to run he might be the perfect boutique candidate for Democratic beagle fans with a strong conservative bent.

It’s not clear what kind of state dog might be favored by Committee on Committee heads Senators Mazza and Campbell. For now at least, there is a wide array of possible future Lt. Governors seeking to wear the collar.

How I Learned to Stop Worrying and Love the VT Senate Rules Committee

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Wednesday’s Vermont Senate Rules Committee meeting on ethics and disclosure ended in a minute and huff. Well maybe it ran longer than a minute — but it did end in a huff. The meeting, called  to discuss new ethics disclosure rules for those serving in the Vermont Senate, ended with an abrupt adjournment on Wednesday.

The finger-pointing, heated conclusion to the Senate Rules Committee meeting came after an exchange between two of the chamber’s leaders, Sen. Philip Baruth, D-Chittenden, and the Senate President Pro Tem, John Campbell, D-Windsor, who was backed up by veteran and influential Sen. Richard Mazza, D[?] -Grand Isle/Colchester.

The dust-up between the party leaders peaked when Baruth, the Senate Majority Leader, felt the other two Democrats were not taking him seriously, while Campbell, who holds the most powerful post, and Mazza, a senator for more than 30 years, were offended and thought Baruth was accusing them of “hiding something.”

Senate President Pro Tem, John Campbell, D-Windsor walked out after a “dust-up “with Senator Phillip Baruth.

Said Campbell: “Wait. I didn’t say it’s laughable,” Campbell shot back, then talking over Baruth said. “No, no, don’t. You have reporters here. Do not, Do not…”

VTethicsbowl

Campbell’s unease at openly discussing ethics and financial disclosure with reporters present recalls the classic admonition from Dr. Strangelove “Gentlemen, we can’t fight here: this is the war room.”  We can’t discuss disclosure — you have reporters here.

The fact that the discussion, limited as it was, is taking place at all perhaps shows Senate leader Campbell’s views may have evolved since 2014. When asked then to react to actions the Vermont House successfully took to formalize ethics guidelines Senator Campbell saw no need to make similar efforts in the Vermont Senate. “I think most people are ethical,” Campbell said “Hopefully, you elect people you trust.”

Sure, Senator Campbell, hopefully most people are ethical but, gentlemen, this is the Senate rules committee isn’t it?

Just another tool in the police toolbox?

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The Vermont Senate Judiciary Committee will be dealing with a variety of issues in the upcoming session and one of them is an omnibus privacy bill that attempts to update laws and regulations that haven’t kept pace with technology. Under consideration will be limits on cell phone and license plate reader data collection. The regulation of drones or unmanned aerial vehicles (a term the UAV industry lobby wants used to avoid the negative images “drones” often carry) is also targeted. Previously attempts were made on all of this during in past sessions with mixed success and some proposed drone regulations banning weapons were redlined out of a recent bill as passed.

Specific to drones, Committee Vice Chairman Senator Joe Benning (R-Caledonia) previews some of what the Judiciary Committee now wants. For the average person, the bill prevents the owner or operator of a drone from attaching a weapon to it. Otherwise, civilian drone use would be governed by the rules created by the Federal Aviation Administration, which will require drone owners to register their crafts with the administration beginning in February.

The bill would prohibit law enforcement from using a drone without a warrant. If a warrant is granted to police to use a drone, police may only collect information on the subject of the warrant and may not collect data on any other home, person or area.

Yearly notification requirements and limits on the length of time collected data can be kept are also included. But at least in this recent news article, no mention is made about how or if the Judiciary Committee will deal with law enforcement arming drones with weapons of the lethal or “non-lethal” kind.

Well, Vermont lawmakers had better define “weapon” very, very thoughtfully. Look at what happened in North Dakota when they tried to tackle legislation on law enforcement drones.taserdrones

With the passage of a new law earlier this year [2015], North Dakota has become the first state to legalize law enforcement use of armed drones.

Though the law limits the type of weapons permitted to those of the “less than lethal” variety — weapons such as tear gas, rubber bullets, beanbags, pepper spray and Tasers — the original bill actually aimed to ensure that no weapons at all were allowed on law enforcement drones.

With eyes wide shut, that state passed a landmark law that did require warrants for police drone surveillance. But perhaps, in an attempt at balancing privacy and tools for law enforcement, the ND law included rules that allow rubber bullets, beanbags, and Tasers and tear gas canisters (non-lethal weapons) on drones. Many of these non-lethal weapons can maim and kill people.

Meanwhile back in Vermont, limiting average (non-law enforcement) people from arming drones gets a big thumbs-up from the VT Fish and Wildlife Department. Notably, an earlier VT Senate effort S.18 (sponsored by Senators Tim Ashe D/P-Chittenden and Joe Benning) sought an outright ban on weapons on all drones, as well as the law enforcement use of facial recognition technology, except to locate a person subject to a warrant. If the Judiciary committee has designs to attempt a blanket weapons ban on law enforcement drone weapons (non-lethal or not so non-lethal)they have chosen to be very quiet about it.

About the 2016 legislative session, Committee vice Chairman Sen. Benning says : “ […] the lawmakers look to strike a balance between personal privacy and giving police the tools they need to do their job” Let’s hope North Dakota’s landmark drone weapon law hasn’t tipped the balance for Vermont to follow. Put many more tools in that law enforcement tool box and they’ll need a tank to move it around.