SmartTranscript of House Appropriations - 2024-05-01 - 1:05PM

[Chair]: Every last minute. I would be driving chair. You are live. Thank you. Welcome back to the Vermont health appropriation committee. It's still Wednesday, May first, twenty twenty four. It's a little couple minutes after one o'clock. We are hearing a bill right now. It's, h that's two fifty nine and acclimated to climate change cost recovery. We're gonna hear this bill depending on where we are. We could make enough time to vote it out. Then at two o'clock, we're gonna hear the DMV miscellaneous, department of motor vehicle bill at two o'clock. If we can get that one out so that they can get a committee of conflicts going today, that would be great. And then represent Shai has an appointment at two, and I need to prep for our three thirty meeting across the hall. So as much time I'm giving him, that's all good. Okay. Let's get this rolling. I believe it. Well, I'm looking over. And whenever our our Steenablidge council is ready to go. Actually, I'm trying to see We have we have or should have. That's two fifty nine on our web page and add knowledge of it coming. So I have the fiscal note. Energy, and then environment and energy as a amendment to it, and then we have the as analysis. Is that everything you need? [Michael Grady]: That's correct. Do you want me to just focus on appropriations, or do you wanna overview the bills? [Chair]: Well, this is a bit why don't do we we've got how much time do you have? Where do you have I [Michael Grady]: don't have to be anywhere until two thirty. [Chair]: Okay. So we're gonna we have a GMV bill at two o'clock, so [Michael Grady]: we can [Chair]: split the time between you and things. That's it. Joyce. Okay. Perfect. [Michael Grady]: So Okay. [Chair]: It's eighteen pages, so that's great. [Michael Grady]: So this is Michael Grady with legislative council. S two fifty nine is an act relating to climate change cost recovery. It basically establishes a program to recover from responsible parties the cost to Vermont of covered greenhouse gas emissions that those responsible parties, those companies, were responsible for during the covered period of January nineteen ninety five to December of twenty twenty four. So you'll see right away that there's a new chapter of law established in title ten. And a key part of this program is the definitions because what the program will do is it will issue cost recovery demands to responsible parties to pay for qualifying expenditures related to the cost of climate change. So those are there are multiple definitions in that sentence. And the first is climate change adaptation project. This is one of the projects or one of the qualifying expenditures that could be funded through the Special Fund that, receives payments from the responsible parties. So a climate change adaptation project is designed to respond to avoid, moderate, prepare, or adapt to negative impacts caused by climate change and to assist human and natural communities, households, and businesses in preparing for future climate change driven disruptions. There's then a list or examples. I'm not gonna go ahead and label them, but you will see things like improving infrastructure, flood protection, crop, boss, energy efficiency upgrades, etcetera. So those are the things that would be eligible for funding from the special fund created by this program. The next, I would say important definition to look at is on page three. You line one, what is a cost recovery demand? It's a charge asserted against a responsible party for cost recovery payments under the program for payment to the Fund. And then you will see, there's definitions of covered greenhouse gas emissions. That's generally the one that's used in statute. Cover period is between January one nineteen ninety five, December thirty first twenty twenty four. Crude oil is fairly intuitive. And then we'll stop at entity because an entity is the core of who can be a responsible party. And an entity is pretty much every kind of legal personhood or corporate form. It's any individual trustee, agent, partnership, association, corporation, company, municipality, political subdivision, or other legal organization, including a foreign nation that holds or held ownership interest in a fossil fuel business during the covered period. So what's a fossil fuel business? So first fossil fuels, coal, petroleum products, and fuel gases, and the fossil fuel business is a business engaging in the extraction of fossil fuels or the refining of petroleum products. So responsible parties are entities that own a fossil fuel business. Fossil fuel business are those who are extracting fossil fuels or refining petroleum products. [Chair]: Stop the gas station. [Speaker 2]: Stop [Michael Grady]: the gas station. [Chair]: Gotcha. Yep. Go ahead, ma'am. [Speaker 2]: Our covered period has a ending date of December twenty twenty four. Can you help help me understand that? Are we limiting your scope of the Superfund to handle the damages associated with time period up to the end of this calendar? [Michael Grady]: First, you had to figure out remember that and we'll get to this in a minute, that the the responsible parties are going to be issued cost recovery demands for their share of the damages that occurred during a period. So there it's a formula, and the formula needs an ending. You can't just have and potentially, in the future, you could change that covered period. But for now, in order to calculate what is that response, that cost recovery demand, you're gonna need an end date. [Chair]: Thank you. [Michael Grady]: So moving on to page four, there's a definition of fuel gases fund is the the special fund that's gonna be created. Petroleum product, remember, refinance and petroleum products are the entities that can be responsible parties, and they are refining or rerefining synthetic or crude oil or crude oil extracted from natural gas liquids or other sources. On the next page, page five, line one, you get what is a qualifying expenditure, what an authorized payment from the fund can be used to pay for, and it's going to be authorized to pay for reasonable expenses associated with the administration of the fund and the program. And one of the house energy and environment's amendments is to change that language says that says add as a part of, and it'll just say and to pay for, climate change adaptation projects. It was just that language that's in the bill that passed the senate was confusing, potentially ambiguous. Then you get to what is a responsible party. These are the persons who are going to receive the entities that are going to receive cost recovery demand. It's first that an entity or a successor in interest that during any part of the covered period was engaged in the trade or business of extracting fossil fuel or refining crude oil and is determined by the agency to be attributable to more than one billion metric tons of covered greenhouse gas emissions during the cover period. So it is not just every fossil fuel business, any entity that's refined petroleum products or extracted fossil fuels. They have to be attributable for more than one billion metric tons of covered greenhouse gases during the cover period. It will not mean those persons that the state lacks sufficient contacts over in order to assert regulatory jurisdiction. There are fossil fuel extractors, refiners who may not sell their product into the state or may not sell their product into a national market. And in those instances, Vermont, under the due process clause, wouldn't have regulatory jurisdiction of them because they had never availed themselves of Vermont's market. Think, for example, India coal. Coal is a very little used fossil fuel in Vermont, and India coal is in India. And that's very real possibility that their products don't reach Vermont, and they never avail themselves of the national market to reach Vermont. Moving on on page five, you get to the establishment of the Climate Super Fund cost recovery program. It is established at the Climate Office, Action Office of ANR, and the purposes of the program are to secure compensatory payments from responsible parties based on strict liability. Does everyone know what strict liability is? Doesn't matter if the response if the responsible party of the companies knew that they were releasing that damaging greenhouse gases. It doesn't matter if they intended to. Doesn't matter if they were negligent in their release. It's just because who they are and the fact that they did and were attributable to those greenhouse gas emissions. The program will also determine proportional liability of responsible parties. It will also impose the cost recovery demands. People will accept those cost recovery demands. And we'll implement a strategy that will identify and prioritize climate change and adaptation projects and disperse funds for those projects. Page six, line eight, this is where the responsibility or liability of responsible parties is established. Again, a person or responsible party is strictly liable for a share of the cost of the climate change adaptation projects and all qualifying expenditures supported by the fund. There's a language in here about a control group. Does everyone know or do you guys might know what a control group is? Under the IRS, it's when there's a, a corporate umbrella over smaller corporations and for purposes of filing your taxes, the IRS lets that file is what's called a control group. So this is to say that you don't get to escape a responsible party, doesn't get to escape liability responsibility by saying that they were just one entity in the control group or that they were the the umbrella company, and that they never had one billion metric tons. So it's they will be treated as a single entity for the purposes of identifying responsible parties. You can't use that IRS tax specification to try to escape responsibility. Now with respect to each responsible party, the cost recovery ban shall be equal to an amount that bears the same ratio to the cost of the State of Vermont and its residents as calculated by the State Treasurer from the emission of covered greenhouse gases during the covered period as a responsible party's applicable share of covered greenhouse gas emissions spared at the aggregate applicable shares of covered greenhouse gas emissions resulting from the use of [Speaker 3]: fossil fuels extracted or refined during [Michael Grady]: the or refined during the cover period. What does that mean? It means that their share of the cost to Vermont will be the same as their share of the aggregate covered greenhouse gas emissions during resulting period. Their ratio of what they contributed is what their ratio of liability will be or the cost to Vermont. [Chair]: So this just starting with an example. So it's one gallon or, you know, some it's it's proportionate to what they've made available here. [Michael Grady]: Right. So if they had one billion tons of greenhouse gases and there were one hundred billion tons of greenhouse gases emitted by everyone during the applicable period, they pay one percent. On page seven, line four through nine, if a responsible party owns a minority interest in another responsible party, their share will be increased by the applicable share of their ownership in the in the minority interest. The agency uses US EPA's, emissions factors for greenhouse gas inventories, to determine the amount of cover greenhouse gas is attributable to any entity. There is a house environment and energy amendment here on page seven, line eleven, the term best. They received, input from advocates that said that to remove that because that will just allow persons to challenge whether or not they use the best available, publicly available. And instead of allowing for that argument, the term modifier best would be removed. And you'll see a similar amendment on that later on. [Chair]: So did you just take out the the best kept publicly available? [Michael Grady]: It says let me say let me make sure I get it exactly correct. It it takes out best publicly available. So it will read as applied to the fossil fuel volume data for the purposes of our concern. [Chair]: Go ahead. [Representative Dolan]: I have a question going back to [Michael Grady]: line [Representative Dolan]: four, page seven. Is that referred to shareholder [Chair]: from the company? [Michael Grady]: It it may. It may. If there's an entity that owns a sufficient amount of ownership interest in a company, it's possible. Yes. [Chair]: You know, ten percent of ExxonMobil would be [Michael Grady]: But remember, they have to be an entity. They have to be an entity. Entity. [Representative Mahali]: Oh, it's an individual. [Michael Grady]: Well, it could be. It could be an individual. You have to look at that, and then they have to be a responsible party. You have to look at that. They were an entity that's a responsible party. That means that they had one billion metric tons attributable to them during the covered period. I don't know if any shareholders like Warren Buffett. I don't think they're gonna get to Warren Buffett because he could probably make an argument that it wasn't attributable to his Berkshire Hathaway. [Representative Dolan]: So you made me think Well, that or or maybe a retirement. [Chair]: Maybe like a mutual fund that has [Representative Dolan]: funds. Yeah. [Michael Grady]: It's, you know, I I can't say never. I can't say no. Yeah. You have to you're gonna have to look at it. They're gonna have to look at it. They're gonna have to see if it's attributable. They're gonna have to assess that liability. [Chair]: A mutual fund would ten percent something in that. My guess is that's highly unlikely that mutual fund itself would not even even a big company like Shawano, Vanguard, they have lots of different mutual funds, and so I don't know if any necessarily have exact. First, let me know if Harrison has [Representative Dolan]: a question. No. It was on the same line, and I think clarification of this. I'm just trying to I'm trying to go at the mutual fund end because yes. If they were, then the value mutual fund might increase or a way in which then flipping back the individual or the mutual fund. I mean, it's way above my table. I asked, you know, [Michael Grady]: There is data available to attribute the greenhouse gases to responsible parties and then determining the ownership interest of those responsible parties and and who ultimately will be responsible. That that's that's just an expansion of that of that graph. Right? I I don't know how to answer that for you because it's gonna depend on each individual responsible party and and how their current corporate form or their successor is is owned. I I I can't answer that. [Representative Dolan]: Is the safe path to go after all the responsible party or can they put in choose, you know, one or two and and and kind of a division? [Michael Grady]: This this isn't for the purposes of the entire program joint and several. This isn't like CERCLA where the where the agency, the state can just go find the biggest corporate entity that is responsible and sue them for all of the cost. And then that corporate entity has to then file what are called contribution actions to get compensation from the rest of the responsible. That that that is not what this does. First, it doesn't it won't reach people that the state doesn't have regulatory contacts with. [Representative Dolan]: They work through the Internet. [Michael Grady]: Right. Or or or it could be national. There might be national entities that don't have regulatory contacts with the state. Second, it's only theirs they're only assessed their share. Remember? They don't get everyone's share. They get their share. [Speaker 6]: So if I understand it, [Representative Dolan]: it will say New York. [Speaker 6]: So if I can't it was at [Speaker 3]: the end of the day, [Representative Dolan]: they didn't distribute their product. [Michael Grady]: So [Representative Dolan]: but we couldn't sue that. [Chair]: Is that correct? [Michael Grady]: If if if they can show that they didn't distribute their products into Vermont, then then I think that that the state would not have regulatory contact. One of the things that I did when I first looked at this bill, I said, well, how how do is there regulatory contacts for some of these entities? And and I was like, well, maybe these gas stations don't have agreements with with refiners. I I tried to find gas stations that that I could determine didn't have, and I'm I honestly I I could only find one that I wasn't sure if it had an agreement with the refiner. The rest most of them are are franchise service stations that have agreements with refineries, whether it's, you know, Valera or Exxon or or etcetera. Those are distribution systems. That is how they have veiled themselves of the market. [Chair]: Mhmm. Yeah. K. But let me let [Representative Dolan]: me just throw this to him up. Irving is a refiner. [Michael Grady]: SARPULUS? Irving. Irving. [Representative Dolan]: Yeah. Okay. And they're Canadian based. I have no idea what the refiners are. They're probably in [Michael Grady]: Nova Scotia or Quebec or somewhere. [Representative Dolan]: But they distribute their pride into Vermont. So would they be subject to this bill? [Michael Grady]: They are. The definition of entity includes it includes foreign entities. Okay. And the the fact that they avail themselves of the market subjected themselves to the regulatory jurisdiction of the state, and there's things called dichotomy and and other international provisions that regulate the account. [Chair]: Thank you. Representative Bahai, please. [Representative Mahali]: So just help me understand this. Let's go one step further and say Exxon sells oil to a refined is Exxon liable? And how how do we afford since the state has to distribute, has to make demands, and those demands have to add up to one hundred percent of the, covered [Michael Grady]: Not that those demands don't double demands. So how do of all, I I don't know if the demands will add up to one hundred percent of the cost of Vermont. [Representative Mahali]: No. No. One hundred percent of the coverage. And in other well, let let me ask it another way. How do we deal with oil company x that sells to refiner y and they sell into Vermont? Is the oil company liable or just the refiner? And how do we deal with double counts? [Michael Grady]: I I mean, that that is that is gonna have to be something that that the, treasurer and ANR will have to figure out how to calculate and measure because some of the petroleum markets are regional markets. You sell your product to a rack, and that rack is in Springfield or somewhere else. And the companies that are selling in Vermont go to the rack to get the product and take it back. But there is case law that says when you avail yourself of the national market and you know that that national market, your product will ultimately, in that national market, reach the jurisdictional state and the state jurisdiction of question, but that is sufficient. Think of Amazon. Think of Wayfair. Think of they knew that even though they're located in North Dakota or wherever they are, that they're abailing themselves of of customers in Vermont. And by doing so and knowing that they were putting their products into the national market, they are subject to regulatory jurisdiction about the states. [Representative Mahali]: I guess, let me ask one more question. Let us I I might be not be using the right terms. But let us say, if you have the universe of greenhouse gases emitted by companies that are that reach the billion ton threshold. And that universe is a hundred units big. It's the contemplation of this that the state will send out demand letters that equal one hundred units. We will we will make demand letters to the universe of [Michael Grady]: You're gonna make the damn letters to the universe of responsible parties for their share. [Representative Mahali]: Their share. Yeah. [Michael Grady]: But their share is not necessarily going to add up to the hundred units. The agency's gonna determine what they what was attributable to all the cost recover all the responsible parties and that should cost the demands for that. There may not be cost recovery demands that add up to one hundred units. [Representative Mahali]: Thank you. [Chair]: Welcome. [Representative Mahali]: And it's it's clear this is a complex rulemaking effort, Chris. [Michael Grady]: There's gonna be rulemaking, and we'll get to that. [Representative Dolan]: Yeah. K. [Chair]: And and this may wait for the rule. [Speaker 2]: I'm trying to understand where the dividing line is. If [Chair]: you run a farm and you have a methane, [Speaker 2]: one of those producers on your farm that's capturing the off gassing for the purposes of generating power, Would that count? Because they're producing energy work. [Michael Grady]: So you're not refining a petroleum product because that's not a crude petroleum. [Chair]: That Like, a [Michael Grady]: It counts as I'm sorry. What? [Speaker 2]: It was on page four. [Michael Grady]: It's listed as a fuel gas. [Speaker 2]: So fuel gases are not Right. [Michael Grady]: So if they were extracting fuel gas, and that was determined to see one billion metric tons during the covered period of greenhouse gas emissions. [Chair]: Yeah. Okay. You think there's that's not [Representative Dolan]: Yeah. [Michael Grady]: I I don't think it would ever Yeah. [Chair]: Thank you. That would say, like, I think it was a good rich farm. It's all for the Yeah. And after [Speaker 2]: Thank you. And maybe this I'm getting ahead of myself with all sorts of the rule, maybe. But let's just take tropical storm Irene where you have impacts impacts. The federal government through FEMA covered a portion of those covered dollars. What is the intent here to capture the percentage of the state costs? And would that state cost include individual costs as well as public assistance costs, the the non federal match just to save it up? That would also be permissible cost fixing? [Michael Grady]: This bill does not get into that level of detail. [Representative Mahali]: That's true. I think that's That []: would all be under [Michael Grady]: our That there is on page twelve, line one in the directive for the agency to do rulemaking. They have to adopt methodologies, to identify responsible parties and determine their applicable share of cost of of covered greenhouse gas emissions. And then, basically, it come up with requirements for issuing the cost recovery demands. Part of so so we're kinda skipping around here. Yeah. So part of what is required under the bill is that the state treasurer is going to do a report on the cost to Vermont of the covered greenhouse gas emissions during the covered period. [Chair]: So Thank you. [Michael Grady]: Representative Dolan, your questions could be answered there. They could be answered in A and R's rulemaking and the and adoption of the methodologies and how to identify responsible parties and their liability. So there's a couple of opportunities for issues like avoiding double counting or double, cost recovery to be addressed. Okay. [Representative Dolan]: I think [Chair]: No. I don't know if you've seen this, but the senate voted wait. Did I get twenty six of three? Yeah. That's good. On the bill? They [Representative Mahali]: had a vote. Mhmm. [Chair]: It's a pretty good meeting. Okay. [Speaker 3]: I don't know. [Chair]: Keep going with everything. [Michael Grady]: I'm just trying to find where I am. [Chair]: Yeah. Bigger and only getting a post. [Speaker 2]: My system's a revenue generator [Chair]: as well as suggesting needs. Nice. We were I don't keep up on every little thing, although I could swear I could listen to our pledge council speak on any bill all day long. So thank you. [Representative Mahali]: Okay. We've [Representative Dolan]: done all of those. [Michael Grady]: On on page seven, line fifteen, the agency may adjust the cost recovery demand, if they can determine that there is double counting. So you'll see page seven, nine nineteen going on to page eight if a portion of the cost recovery demand was attributable to another responsible party or it it was accounted for when Unfortunately, [Chair]: you're not getting into the dump. Last night, I read this up to page six between six and eight something half the time, but I didn't get to finish. So darn. [Michael Grady]: Okay. On page eight, the agency issues its cost recovery demands six months after it adopts the necessary rules. And then the responsible party either pays their cost recovery demand in one payment six months after they receive the demand, or they are allowed to pay twenty percent down and then the rest over nine installment payments, annual installment payments. One of the amendments that you'll see in house environment is at the bottom of page eight. They were going to amend that subdivision g, two c to allow for the agency to charge interest for those installment payments or any other delayed payments and or to adjust the cost recovery demand based on the CPI. So just, you know, theoretically, if the cost of construction concrete, for example, drops dramatically over the course of an installment period, the agency can, adjust the demand to reduce it because the cost of Vermont would have dropped because the cost of concrete for infrastructure would have dropped. That allows you to go to, I would say page nine, nine fourteen. The agency deposits all the cost recovery payments in the climate super fund cost recovery program fund. And then you get to the appeal rights for any responsible party. First, they are given the opportunity to petition the agency to reconsider their cost recovery demand. It's actually something that's pretty common in some of the agency programs to before you have to appeal to a court and appeal to the secretary to reconsider, the agency's determination. The House Environment and Energy Committee, extended the period by which reconsideration can be sought from fifteen days to thirty days to give that responsible party some more time to consider whether or not they want to have the reconsideration. After reconsideration, if the party is still aggrieved or if they don't even ask for or if they, if they continue to be aggrieved, they can appeal to the Superior Court of Washington County. And nothing in the section, nothing in the bill shall be construed to supersede or diminish in any way remedies available to a person at common law or under statute. And that is actually language from the House Environment and Energy Amendment. They cleaned up the the language as passed by the senate. So it should read nothing shall be construed to supersede or diminished in any way. Any other remedies available to a person as that term is defined in one BSA one twenty eight, at common law or under statute. So that's a house environment and energy amendment. Then you get to the fund. As we've already talked about, the cost recovery payments go into the fund, and the Fund may be used on page ten going on to page eleven to pay for qualified expenditures for climate change adaptation projects. We've already talked about the definitions of what those two things are. It can also be used to pay reasonable administrative expenses of the program, including the auditor to hire technical experts to do the audit that you will see that the auditor is required to do. And it is also authorized to implement climate change adaptation, actions identified in the state hazard mitigation plan and to implement community resilience and disaster mitigation grant program established pursuant to twenty BSA section forty eight forty nine. That is not a real thing right now. That's in a bill. That's in s three ten, and I have to make sure that s three ten is enacted. [Chair]: Oh, we're hearing it tomorrow. [Speaker 3]: Right. It's [Chair]: our part of it. So Which what is that three? [Michael Grady]: What That is subdivision three, page eleven. It's lines eight and nine. Yep. I do not believe that it has been, enacted or passed yet by the house. So [Chair]: No. It doesn't. We have it tomorrow. We're gonna hear it. [Michael Grady]: Okay. So at some point, depending on what you the house does, I might have to amend the bill. And then on page eleven, line thirteen, there are reports from the agency in consultation with the treasurer to submit to you on or before January of next year the feasibility and progress of carrying out the requirements of the chapter, including any recommendations for improving administration. And then you get to the rulemaking to which we've already addressed a little bit of. First, on page twelve, line one, you're gonna adopt methodologies for assessing, identifying responsible parties, and determining their applicable share of covered greenhouse gases. Remember how I told you there was another amendment to remove the modifier best? That is a h twelve line one. It would remove just the words the best. So it'd be adopting methodologies using available [Chair]: Just removes the best. [Michael Grady]: Yep. It just removes the best. One thing, important part of the rules that I haven't touched on yet is that it will require the adoption of the resilience implementation strategy, which ANR is already working on adopting and which will identify practices use utilizing nature based solutions to stabilize water lanes, etcetera, practices to adapt infrastructure to the impacts of climate change, practices needed to build out early warning mechanisms and support effective response to climate related best practices that support economic and environment sustainability and criteria and procedures towards prioritizing climate change adaptation projects. They will consult with multiple, interested parties, including the other state agencies and departments that have a role in adaptation and vulnerability response from climate change. They will page thirteen identify major potential proposed and ongoing climate change adaptation projects, identify opportunities for alignment with existing programs, consult with the stakeholders, consider components of the Vermont Climate Action Plan and whether that can be incorporated, and conduct public engagement in areas and communities that have significant exposure to the impacts of climate change. Nothing under this act limits the ability of any person or the state to regulate greenhouse gas emissions or establish strategies or adopt rules to mitigate climate risk and build resilience to climate change. So A and R is starting for air pollution rules, programs that they already have are not limited by the pro by this bill. There's an audit on page fourteen, January one twenty thirty one, and every five years thereafter, the state auditor audits the effectiveness of the program and makes recommendations to the agency and to you on ways to increase the efficacy and cost effectiveness of the program. The state treasurer's costs are reimbursed from the climate superfund cost recovery program. Then you get to the important part of this, in my opinion, page fourteen, line twelve, the report from the treasurer on or before January fifteen twenty twenty six. Treasurer's office is going to report to you an assessment of the cost to the state of Vermont and its residents of the emission of covered greenhouse gases for the period that began on January one nineteen ninety five and ended December thirty first twenty twenty four. Remember, that's gonna be a significant part of the cost recovery formula because, remember, the cost recovery formula assesses a percentage of that responsible party's liability to the cost of Vermont. There will be, in that report, a summary of the various cost driving effects, of greenhouse gas emissions on the state of Vermont, a categorized calculation of the cost, that have been incurred in the past and are projected to be incurred in the future and a categorized calculation of the costs that have been incurred and projected to be incurred in the future to abate the effects of covered greenhouse gas emissions. There's an implementation section on how the rules get issued and when there is debate on whether or not the agency needed more time. So instead of, providing for too soon dates, the Senate said the agency has to file initially with I CAR and then, file final rules with, the secretary of state. So the initial rules for the the adoption of the resilience implementation strategy, they have to be filed with I CARP before July one twenty twenty five, and then they have to be filed with the secretary of state by July one of twenty twenty six January one twenty twenty six. And then same ICAR for the rest of the rules by July one twenty twenty six, secretary of state by January one twenty twenty seven. Now we come to a couple of sections that are related to your committee's jurisdiction. There's three hundred thousand from the general fund in f y twenty five, for the personal services identified in section five, which is a position at A and R, in carrying out the program, and then the sum of three hundred thousand is appropriated from general fund to the treasurer for the purpose of for hiring consultants and third party services for the purposes of his report. This language says that notwithstanding the authorized uses of the Climate Superfund Recovery Program, the first three hundred thousand deposited in the fund shall be used to reimburse the general fund for the funds appropriate to the Charter. Now the Senate Appropriations Committee looked at this language. They knew about these appropriations. They knew about the position. It's my understanding they're not in the big bill [Representative Mahali]: right now. [Chair]: No. This well, that's it. Okay. Right. [Michael Grady]: So just back [Chair]: in when we talk about position. [Representative Dolan]: It's [Michael Grady]: Section six is a technical amendment that adds this program to ANR's enforcement authority, Then section seven is, like, the date of July one twenty twenty four. And I basically have covered all of oh, no. The house environment and energy, amendment does amend the effective date to clarify that it is retroactive in application. Yeah. There are sections in title one that say laws are generally perspective in nature unless you dictate otherwise, and, environment and energy clarify that. [21 seconds of silence] []: Good afternoon, everyone. I'm Joyce Manchester with the Joint Fiscal Office. Thanks to Mike for doing a good job of presenting, including the little bits of appropriations. So I'm not going to talk about the build summary. You've just heard all that. We can just go right to the two different kinds of fiscal impacts. So I think of this as a short term fiscal impact and a long term fiscal impact. Of course, the short term is what happens in FY fiscal year twenty twenty five. And that has to do with the three hundred thousand dollars appropriation to the treasurer's office and the three hundred thousand dollars appropriation to the, Agency of Natural Resources. [Chair]: Oh, three hundred thousand and three hundred thousand? Yes. []: Two Two appropriations of three hundred thousand each. And, you may have just heard, but I'll say it again, that the three hundred thousand to the Agency of Natural Resources will cover one position. It's a three year limited service position to implement various pieces of this bill. It would also cover costs of administration, technical and legal support, consultants and experts, and so forth. So so that's a one year appropriation. And then the the general fund to the office of the state treasurer would cover consultants, third party services. So they're going to need a lot of help in estimating cost to the state and so forth. So as you just mentioned, this these two appropriations are not included in the budget. However, I understand that they are part of the overall big picture of what's happening to money in the state for FY twenty twenty five. So I think this committee has the choice of leaving things as they are and trusting that in the end, the six hundred thousand will be covered. Or you could change change the bill and try to put the six hundred thousand into the budget directly. [Chair]: Yes. Go ahead. [Speaker 6]: Joyce, at the end of your question, we talked about the long [Chair]: Oh, yes. Impact. Oh, yeah. [Representative Dolan]: Obviously, very hard. I [Representative Mahali]: guess, I'm concerned. [Representative Dolan]: I don't know how this all works, but if the state were to sue a variety of Buffalo fuel companies, I've heard speculation that it could be years in court, all the various scenarios, the the state laws, etcetera. But it sounds like here, when you think of the state loses, we would not only have our own costs that we incurred over those years, but we could also be liable for other defendant's costs. Is that Oh. That mean that right? []: I do not know. I don't have enough legal understanding to know if that's the case or not. I [Speaker 3]: do [Representative Dolan]: said refiners would be expected to sue the state to cover its rights to demand cost recovery payments. Right? []: So so in my mind, I was thinking that the state would send their demand letters to these fossil fuel companies. Correct. And the fossil fuel companies would then say, we're not gonna pay this. And so they would sue the state and say, we don't have the right to to extract payment from us. So that that's what was in my mind. I am open to other other scenarios. [Representative Dolan]: But I I [Michael Grady]: I I think Joyce identified the real possibility of litigation when responsible parties get their cost recovery demands. There might be conflict. There might be objection and and consequently litigation. There will also likely be constitutional challenges, litigation based on the base of this law because there are there are constitutional arguments that can be made and some constitutional arguments that the party assuming wins the prevailing party, then the state would have to pay the cost to those general party. And possibly they're legal. Yes. Which which has occurred before, but we've also won, like, with the annual lately. Yeah. [Representative Dolan]: Okay. No. Thank you. That's helpful. So so there's a potential very huge liability. There's also a potential for a few plants. I mean, we can also take [Representative Mahali]: a million dollars by A lottery ticket. Lottery ticket. A lottery ticket, [Representative Dolan]: you know, in hopes to win a billion dollar jackpot. But and you may have to have a million dollars, but this one is the exact downside here. So, okay, absolutely. []: Highly uncertain, and I I I would say that the timing is also highly uncertain. Right? This could drag on for many years. It's very hard to predict. [Representative Dolan]: And no one has done this before. [Chair]: Go ahead. Well, I mean, there are four states right now where the bills are actively in play. [Representative Dolan]: But No. [Chair]: We did do, you know, the Tobacco Settlement Fund. We're just kind of the same principle. Interesting. I like the law of town thinking as well. Lou, go ahead. [Representative Mahali]: I guess this is thank you, by the way. I guess this is probably more a question for legal counsel, but I'm not sure. Did we in drafting this legislation, did it all come from our collective minds, or did we look at legislation that would take for the development space? Is there any similar? [Michael Grady]: I think it came from all of our collective minds. [Chair]: And that is Were they collaborative? [Representative Mahali]: We we talked to other states. [Michael Grady]: We looked at other states. We looked at how we consider working on other states. We talked to the other people that are in support as best. [Representative Mahali]: What what are the we could you just very quickly tell me what the scenarios are under which we would be on the hook for the legal comp. I think we would lose litigation. [Michael Grady]: So there's, like, maybe the commerce clause challenges. It's like there'll be substantive due process. It's like it could be a procedural due process, and there could be preemption. But anyways, and there could be the build of the finger. [Representative Mahali]: But if we when we lose, if you lost a subsequent process [Michael Grady]: You can you can be held liable. We can [Representative Mahali]: be held liable for change. Okay. Thank you. [Chair]: Don't be thinking about a new career, representative Mahali. We need you here. That's right. But you're free to do figure move about this. Alright. So committee, it is here's what I'm thinking, and I'm just gonna put it out there on the table. There's a couple of questions here I have with this bill. It's just me because it's a senate bill and all these other senate bills when they pass them carry the dollars somewhere. So I have a question. How come about this one? If it passed twenty six to three out of the senate floor. Right? Okay. So that's my question. Where and what are we gonna do? Although things are looking, you know, get revenue upgrades are nicer, but, you know, there's possibilities, but we are spending next week's paycheck right now on some of these things. So I don't see it's impossible to maybe, you know, maybe see in the end, it could be on the contingency list depending on a good passage and, you know, what happens next. I don't know. So I'm I'm not ready to vote on that until I figure out that piece. Does that make sense? Okay. And okay. Good. Alright. Got feeling is it the same? Representative Schein had to go to the dentist and she'll get back. But go ahead, sir. [Representative Mahali]: Oh, just a couple of thoughts. One is I do support Yeah. I do too. For reasons which I don't need to state. I'm sure regardless of how people feel, they under they know them. But on the money side, I just wanted to add And, of course, we could just say to the extent funds are available. [Chair]: Yeah. Well, but you know what? At this late Yeah. No. I'm waiting there we are days. I think if we wait a I'm not waiting to, like, I mean, like, hold it for a couple hours. Now we're holding things just for a little bit of time. So are you I know we're gonna [Representative Mahali]: I just wanna say, madam chair, one thing, which is to me, these not to me, these numbers seem low. [Chair]: The six hundred? [Representative Mahali]: Seem low. Not terribly low, but low. Given the amount of work that's gonna go into this [Chair]: A lot. [Representative Mahali]: But they're probably adequate for fiscal twenty five. Yeah. That's all. [Chair]: Alright. So is this gonna sound alright. This is not me that I'd quote you and say this. You know, I grew up in What's Her, New York, and I it has something to do with this. Right? And so I don't know if it was on PBS or whatever it was the other I caught on the channel. Something that I actually lived through in Western New York at the time in the nineteen eighty, late seventies, early eighties. And it's funny that when you go back and you look at a situation that was happening, then it's actually a documentary kind of a what happened at Love Canal. And and it's called Poisoned Ground, I think. So if you get a chance to watch it, watch it. Yes. I watched it from a perspective of having lived there then. And then when you look back on what was happening, you go, how in the world did we not see them? It was so blatantly badly poisoned that we would've so you something, you know, some of this we don't know, and I often think of some of the good legislation that have passed, and maybe it's because it's the end of the session time, but you know, Mel will tell you about stuff. That we we step our foot forward on some things that maybe it might be the first or could be the last and in the middle of taking on some big stuff early. [Representative Mahali]: If there is, I actually my view is that when there is litigation, because I think miss Manchester is correct. There will be litigation. Oh. When there is litigation at the time it occurs, we will not be alone. There and I don't even think we will probably be the primary object of the litigation. I think there will be bigger fish amongst the states and will be and also included. Not that it won't cost us money. I'm just saying we're not gonna be alone. [Chair]: So good. Alright. And then we'll move to DNB. But joint I'm sorry. If you can thank you. [Speaker 2]: Miss Mathers. Thanks. I just wanted to comment on a couple of things. One was the the billion That's a extra tons number. That really is probably, like, the the largest, let me say, when you look at how many cars that would take. It's well over two hundred million cars to even to accomplish that. And so I think that that magnitude helps to move the confidence with what we explained here. The the other thing that I recognize I think roughly there are five states that are looking into this, and one state has moved pretty far along. But I keep thinking of about situation that I've had my own personal experience in. As a select board member, when state construction people burst our water pipe. Who paid for it? The poor small little town had a lot of people. We got very little support of our costs. When you look at now at flood damages, which is our largest impact natural disaster, and much of that has been fueled by climate change, who's paying for that? It's those smaller under resourced community or states such as Vermont. And, we were, I think, smart with the tobacco litigation to sign on to that. We have been unlucky by not signing on to toxics contamination where other states have, and they reaped the benefits when they realized that we weren't getting any compensation for the type of pollution we were experiencing, those externalities. If you [Chair]: watch the the Love Canal piece, when you watch it, you think, oh my goodness. You know, the people they had to fight to actually bring. And you think if how And the And currently, [Speaker 2]: pious, it was. But it's the smaller Just smaller parts of the poorer communities that are suffering because they're receiving all that impact. And so in my mind, this investment here is relatively small, gets us on the right track, helps us develop the information necessary to move forward on accomplishing such a critical need, and that is to internalize the externalities caused by this industry. [Representative Mahali]: Can we, madam, share [Chair]: this I'm just gonna excuse Mike so he can have so he can go because we're just trying so what I'd like to do is be able to do DMV, then then I will say we're gonna we were gonna hold this vote open anyway for her. Then we've got the pay act, and then maybe we'll be ready to do all three if I can. [Representative Mahali]: Yeah. That was my question was given that when we're []: at the end of the session [Chair]: I wouldn't wanna make changes to this right now. Do this. I mean, [Representative Mahali]: you can do this within a day or something like that. [Chair]: Within an hour. [Representative Dolan]: Within an hour. [Representative Mahali]: Okay. Yeah. Yep. [Chair]: Because sometimes the hours now feel like days. Thank you. I'm kind of excited about it. [Speaker 2]: Let's [Speaker 3]: see. This this this [Chair]: come up with the DMV. Is that you, sir? Yeah. Oh, you and Jen. Hi, Jen. Welcome back. Come on over. This is bringing out shift to s three zero nine miscellaneous DMV bill? [Speaker 2]: Yes. [Chair]: Unfortunately, representative Brandon is on for the rest of the week, so we'll have the chief chief of the which already said, representative. You should just love me at that [Speaker 2]: any sort of trust. [Chair]: I don't know how much. I mean, part of part of that statement is alright. [Fran Carby]: Good afternoon. I'm Fran Carby from the Office of Legislative Council. [Representative Mahali]: And Logan Newberry with Joint Place Watts. We are [Fran Carby]: here on s three zero nine, which is the so so hand is the miscellaneous motor vehicle bill. And it is it's related to miscellaneous changes to the laws relating to the different motor vehicles, motor vehicles, and vessels. I believe there's only one section with a general fiscal impact, and that is section thirteen. Is that the one you're gonna want us to focus on? [Chair]: Well, for brevity, it's funny. We I think people think of the why we kind of got familiar with what happens with the miscellaneous DMV, though. It's a lot of miscellaneous DMV things from how many lights can you have on the back end of your nineteen forty nine car solved itself. But if there's anything that that we would like to bring our attention [Speaker 3]: to, I thought I saw somebody who what do you guys thought? They don't like D and [Speaker 2]: B in there? Not everybody. [Chair]: DMV in there. Not everybody. So representative Shah Hey. How are you? Thank you. You're fine right there. So maybe what I could do is ask the legislature counsel to give us a little bit of a highlight of things just quick. But if there's anything that you know that you would like us to, like, say, hey. This is a whole thing that's a part of this, like, you guys might like to know about. Please chime in. Yes. Definitely. [Representative Dolan]: Sorry. [Chair]: Alright. [Fran Carby]: Alright. So there are fifty two sections in this bill. So where I've been I think it makes sense to focus mainly on the one who has the money in it. I told that we're working late to the process, so I'm most familiar with the sections toward the end of the bill because I wrote the [Chair]: So why don't we do there first? Why don't we go right to section thirteen? [Fran Carby]: Section thirteen. Exactly. And I can put the language [Chair]: in there with one. The [Fran Carby]: only case in there with I can put this up on the screen. [Chair]: Well, you know, now that you're reporting this bill [Fran Carby]: maybe my section by section. [Chair]: We're gonna we're gonna count on the fact that representative Shaw is here representing the committee, that if there's anything in here that he feels that we should be enlightened of because either a, it could be it has sensitivity around it and or like, oh my god. Let me point this out to you because it's so cool. Who is willing to do that? Okay. Ma'am, and for ledge houses time, we'll stay to just just the dollars at the moment unless it jumps in. Okay? [Fran Carby]: Great. So section thirteen is the section with the money in it. And this has to do with providing refunds for registrations or plates that are canceled prior to certain periods in the during the year. So, under existing law, the commissioner can cancel the registration of a motor vehicle, snowmobile, or motorboat when the owner returns to the commissioner, either the number plates, if there are any, or the registration certificate. And depending on when in the in the year or term it happens. Now there's two spellings of canceled. I don't know why we're changing from one to the other. But under existing law for registrations canceled prior to the beginning of the registration period or within thirty days after the date of issue, the full amount is refunded less a five dollar charge. Under existing law, there's also if somebody cancels before the beginning of the second year of a two year registration period, they get half of this fee back less a charge of five dollars. And then the new language relates to and we learned some of this during the walk through yesterday in ways and means, relates to the five year registration for trailers. And this sets up a a new kind of, system in statute, although I think this is the way they have been operationalizing it in the very rare instances where this has occurred, where if a registration is canceled before the conclusion of the five year registration period, they would set out full fifths of the amount of the five year fee paid would be refunded less five dollars. You'll see the less the five dollar charge throughout. So four fifths of the amount if it's canceled before the beginning of the second year, three fifths of the fee amount less five a five dollar charge if it's canceled before the beginning of this third year, two fifths If it's, minus five dollars, it was canceled prior to the beginning of the fourth year and one fifth less the five dollars if canceled prior to the beginning of the fifth year. [Chair]: That's the Representative Harrison, do you have a trailer? [Representative Dolan]: No. This is all new. Like, can we do any refunds now? [Fran Carby]: We do refunds for other types of for motor vehicles, snowmobiles, and motorboats. But it's my understanding, and I think Logan heard more of the testimony than I did. But this trailer cancellation issue hasn't come up much, but it did recently, and they kinda worked this out at the time. And so DMV asked to have this, in statute going forward [Chair]: to address some restrictions. Do with other vehicles. Let them know it show that, JFO was nodding in their head. [Speaker 6]: I know. This is [Speaker 3]: this is [Speaker 6]: very consistent with the current proration that we do for for all sorts of refunds for for vehicles or IT and stuff like that. It's just extending it out to the five year period for those trailer registrations. [Chair]: You identified for the records. [Speaker 6]: Oh, yes. Logan Mabry with the joint fiscal office. []: I think [Speaker 2]: you did. [Chair]: Did you say that, Marissa? I'm sorry. [Speaker 3]: Could you [Representative Dolan]: say it again? [Representative Mahali]: Okay. Of course. [Chair]: It's funny because I I actually had somebody ask me and tell me, it's like, I just paid this for my trailer and it's out. And I don't know. So I'm like, I'm gonna play this as I'm taking this. [Representative Dolan]: You betcha. [Chair]: Yep. Sorry. [Fran Carby]: Oh, thank you. That is it for the money. [Chair]: That's it for the money. Alright. So, committee, here's what we could do. You can hear the rest of the bill in about ten minutes or five minutes, or you can take a break for fifteen minutes because the pay act is coming in at forty five. [Representative Mahali]: I like the latter. Wait. Can we vote on this? We can why don't we hear [Chair]: a little bit more just for five more minutes so that we're and then we're gonna hold it open anyway for when representative Shai comes back to it. Is that alright? And then we'll then we'll hear the packet two forty five. She's saying was [Fran Carby]: right. I'll be here with you for that as well. Are you kind of on every So [Chair]: if we finish this early and take seven minute break, would that help your life? [Fran Carby]: It's fine. Either way is fine. Whatever works really quick. [Chair]: Yeah. Because it might. Okay. Alright. Let's do that. [Fran Carby]: Make sure we get time for anything. Any other super [Chair]: highlights you wanna tell us about? [Fran Carby]: Super highlights. There's lots of additional provisions in here dealing with definitions of it and applications to be a transporter. That's the first and second section. There's some a lot of them are little tweaks to things. Let me tell you some of the bigger ones that we spend more time. There's some provisions around emergency warning lamps and sirens views on certain government owned vehicles without a permit and explicitly prohibit blue lights and flashing lights in a color other than amber unless that's allowed under another statute. [Chair]: Any discussions around blue lights? There's always been [Fran Carby]: Well, this is this would explicitly prohibit blue lights. Blue lights. Blue lights. Yes. [Representative Dolan]: Just as restructuring the whole chapter and that, you know, legislation bringing in a formative with today's crackle. [Chair]: That was representative Shaw, by the way. [Michael Grady]: Excuse me, representative Shaw. [Fran Carby]: Let's see. There are some provisions around airbags. There are some disclosures required for, for licensed dealers who are selling a or who who are yes. Who are selling a used vehicle, used motor vehicle. They have to make some disclosures about the inspection history and status of the vehicles, and then save for two years, a signed record of the disclosure signed by both the buyer and the seller for two years. There's some sections on veterans plates that expand, that aligns with the federal definitions of the different military services and expands the circumstances under which somebody can be qualified in alignment with the federal law to be eligible for a veteran's license plate or veteran's, veteran's ID on their driver's license or non driver identification card, and also it has more of a role for the Office of Veterans Affairs in working with DMV to design license plates for various types of veterans and service connected individuals. It allows for conservation plates on motorcycles. We've had them on leisure cars, but not on motorcycles. There are some provisions around pedestrians, bicycle operators, and vulnerable users updating some of the statutes directing these agency transportation to study and report on Idaho stops, which is, again, I got to learn a ferry because it's been an interesting foray into, into transportation. So in an Idaho stop, it's where a bicyclist can treat a, stop sign as a yield sign and a red light as a stop sign. And some states use these and there are pros and cons, so we're directing agency of transportation and Department of Public Safety and others to look into that and report back on that and some other appropriate updates to laws on the rights and responsibilities of vulnerable road users. There's a couple of sections that would require DMV to start issuing plug in electric vehicle license plates. There are some been identified. There are some potential additional hazards to or dangers to first response to first responders, and they don't know when they're approaching a car and at fresh if it is a plug in electric or not. So this would require starting not later than July first, twenty twenty six that there be special plates that indicate that a car is a plug in, electric vehicle, and then everyone would have to display that not later than July first twenty twenty eight. [Speaker 2]: Nice. [Fran Carby]: Then there's a finally section on distracted driving diversion program and having the community justice unit at the Office of the Attorney General and others look at whether and how we can have a distracted driving diversion program as an alternative to civil penalties and points. Yeah. For people who are texting and drive while driving or handheld cell phone. And then it's basically and any other highlights you wanna know? That was great. There's a larger focus on pressure delay. Okay. Anything [Chair]: else? Anybody that you'd like to ask? Representative Harrison. I'm just looking at De minimis. Yeah. I know. Practice. [Representative Dolan]: The fiscal note, we talk about the de minimis impact on state revenue. Did this have to go to wage and means today so they didn't [Speaker 6]: Yep. We were there yesterday. [Chair]: That's that's why the the house transportation committee and the they're they're ready to go to committee conference they got yesterday. So I told them that we could get this out of here quick because they they need this to to move along, and they didn't know it had to come here. Okay. Maybe it was just by transportation gravity that just There [Fran Carby]: you go. Yes. It was voted out of trans house transportation eleven zero zero and ways and means twelve zero zero. [Representative Dolan]: Depends on the reduction part. [Chair]: Right. I think There will [Speaker 6]: be they because they have to issue a refund, I think, is why it was right here. That's I don't remember who it was exactly, but we're giving money back to someone. We don't. Right. [Representative Dolan]: Yeah. Yeah. Okay. Thank you. [Chair]: Alright. So, Katie, we've got a couple of minutes to take ten minutes to week. Is that okay? I'll regularly come back with those gems connecting me. Hang on. And we get that going right away. I'm gonna go take it quick if I I've got it. Let me go back. [Speaker 3]: Well, [Chair]: what I'm on this. I'm on a

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