Vermont Legislature SmartTranscripts:

[Representative Jill Krowinski (Speaker of the House)]: Will the house please come to order and members kindly take their seats. Good afternoon. Devotional today will be led by Theo Novak of Charlotte who is the Vermont Poetry Out Loud twenty twenty six finalist and a student at Champlain Valley Union High School.

[Theo Novak]: Hello. Hello. I'm Theo Novak. I'm a sophomore at Champlain Valley Union High School. And today, I'll be reading a poem that deeply resonates with me. Come, let us be friends by Sarah Leigh Brown Fleming highlights the dire need for compassion in today's time. For a moment, think about how much more united this world could be if we decided to work together rather than work against each other. Although published over a hundred years ago, this poem's message remains strong. Here's the poem. Come, let us be friends, you and I. Even though the world doth hate at this hour, Let's bask in the sunlight of a love so high that war cannot dim it with all its armed power. Come, let us be friends, you and I. The world hath her surplus of hatred today. She needeth more love. See, she droops with a sigh where her axis doth slant in the sky far away. Come. Let us be friends, you and I, and love each other so deep and so well that the world may grow steady and forward fly, lest she wander towards chaos and drop into hell. Remember the differ remember the difference joy and friendship can make. As this day resumes, take every chance you get to share joy. It makes a difference. And echoing Fleming's words, come, let us be friends. Thank you.

[Representative Jill Krowinski (Speaker of the House)]: Are there any announcements? Member from Charlotte.

[Representative Chea Waters Evans]: Madam speaker, Theo Novak is a sophomore at Champlain Valley Union High School and represented the school in the, poetry out loud state finals this year. And I also had the pleasure of attending a Harkness workshop with him last week at CVU. And his efforts to connect with other people and to help other people connect with each other is really admirable. And I would appreciate a nice welcome for him today.

[Representative Jill Krowinski (Speaker of the House)]: Will the guest of the member from Charlotte please rise and be recognized? Are there any other announcements? Member from Weitzfield.

[Representative Karen Dolan]: Madam speaker, on behalf of the member from Ferrisburg and the member from Shelburne, We wanted to extend an invitation to freshman legislators. We will be having an impromptu gathering at Bartholomew this afternoon after the floor, half an hour after the floor. And not to be exclusive, but it's a pretty big group and we got together a few times last year and haven't done so this year and thought it would be a a fun gathering. So freshman legislators including those who are very new and have just joined, please feel free to join us tonight. Thank you.

[Representative Jill Krowinski (Speaker of the House)]: Are there any further announcements? Member from Westminster.

[Representative Leslie Goldman]: Thank you madam speaker. I wanted to make a preliminary announcement that tomorrow, Ben Partridge and his mother, former representative Carolyn Partridge, are coming to the chamber. And Carolyn asked that I give the warning a day ahead of time because her son plays the bagpipes, and not everybody loves that.

[Representative Jill Krowinski (Speaker of the House)]: Are there any further announcements? The chair has one. I'd like to remind members that the corporate cup is today. There will be road closures happening, so we are making adjustments to the calendar today, to ensure that, members do not get stuck here until 7PM. Are there any further announcements? Seeing none, orders of the day. Members, we will begin with senate bill two zero eight which is an act relating to standards for law enforcement identification, Member from Essex Junction. Madam speaker, I move that we postpone action on s two zero eight for one legislative day. The member from Essex Junction moves that we postpone action on senate bill two zero eight for one legislative day. Are you ready for the question? If so, all those in favor, please say aye. Aye.

[Representative Leslie Goldman]: All those opposed, please say nay.

[Representative Jill Krowinski (Speaker of the House)]: Aye. The ayes appear to have it. The ayes do have it, and you have postponed action on senate bill two zero eight until tomorrow. Now we'll take up senate bill two twelve, which is an act relating to potable water supply and wastewater system connections, member from Ferrisburg.

[Representative Matthew Birong]: Madam speaker, following suit, I also would like to ask move, I make a motion to, delay action on s two twelve by one legislative day. We're still working on a couple amendments.

[Representative Jill Krowinski (Speaker of the House)]: The member from Ferrisburg moves that we postpone action on senate bill two twelve for one legislative day. Are you ready for the question? If so, all those in favor, please say aye. Aye.

[Representative Leslie Goldman]: All those opposed, please say nay. Aye.

[Representative Jill Krowinski (Speaker of the House)]: The ayes appear to have it. The ayes do have it, and you have postponed action on senate bill two twelve until tomorrow. Next is house bill six ninety six thirty nine, which is an act relating to genetic data privacy. Member from Starksboro?

[Representative Caleb Elder]: Yes. Madam speaker, I move to postpone action on h h six thirty nine for one legislative day.

[Representative Jill Krowinski (Speaker of the House)]: The member from Starksboro moves that we postpone action on House Bill six thirty nine for one legislative day. Are you ready for the question? All those in favor please say aye.

[Representative Leslie Goldman]: Aye. All those opposed please say nay.

[Representative Jill Krowinski (Speaker of the House)]: Aye. The ayes appear to have it. The ayes do have it and you will postpone action on House Bill six thirty nine until tomorrow. Next is house bill six forty eight which is an act relating to banking, insurance and securities. The bill passed the senate in concurrence with a proposal of amendment that is printed in today's calendar. The member from Starksboro will offer a further amendment there too that is printed in today's calendar, member from Starksboro.

[Representative Caleb Elder]: Madam speaker, your committee on commerce and economic development has considered the proposals of amendment offered by the senate to h, six forty eight. This is an act relating to banking, insurance, and securities. The committee has also considered further proposals of amendment to the bill. The senate proposals of amendment can be found starting on page twenty eight forty eight of today's house calendar. The further proposals of amendment, proposed by the house committee on commerce and economic development can be found also starting on page, two twenty eight forty eight of today's House calendar. First, in in connection with the Senate proposals of amendment, the Senate's first proposal of amendment would correct an oversight in the bill as passed by the House by continuing to make uniform the changes in statutory terminology from registered entities to licensed entities, in particular in connection with consumer litigation funding companies. The senate's second proposal of amendment would clarify a provision in the bill as passed by the house relating to who must file consumer reinvestment reports. The senate proposal makes a change from requiring, quote, any person to file the report to requiring that these reports by, quote, financial in institution, which is consistent with current law. The senate's third proposal amendment would extend the moratorium on new cryptocurrency kiosk until 2027 based on continuing concerns about the unlawful use of these kiosks to fraudulently steal the assets of consumers, especially seniors, as well as other illicit activities such as money laundering. The Committee on Commerce and Economic Development has a further proposal of amendment to address these same concerns. The Senate's fourth proposal of amendment, simply corrects a cross reference to the requirement that federal covered securities are subject to the notice filing provisions of Vermont law. The committee viewed favorably all these senate proposal amendment on a straw poll vote of nine zero two. Madam speaker, during the committee's consideration of the senate proposals of amendment, the committee considered two further proposals of amendment. The first and second fur further proposal of amendment would replace the senate's second proposal of amendment by amending Vermont statutes relating decreased cryptokios. Cryptokios are machines slash devices where customers can use their own cash to purchase cryptocurrency. Under an existing Vermont law, there is a moratorium on the establishment of new crypto cure kiosks until July 1. The existing single crystal crypto kiosk operator in this state is regulated by the Department of Financial Regulation in terms of disclosures to consumers, and consumers have limited refund rights in the case of fraud. The cryptocurrency provisions of the first further proposal of amendment in the first, second, and third instances of amendment essentially prohibit the operation of cryptocreas devices after July. As a technical drafting matter, while effectuating the ban on crypto kiosks, further proposal of amendment will keep in place a certain amount of current law, for example, ongoing fraud, refund obligations, and the commissioner's authority to review past transactions for compliance. These provisions are retained in order to protect consumers who have engaged in or may engage in transactions despite the ban, and who may be hurt after the effective date without the ban of the ban without retaining this regulatory structure. Madam speaker, the committee heard testimony both last year and this year that crypto kiosks are inherently dangerous to the financial interests of consumers. They are frequently used in scams to fraudulently steal consumers' money, and seniors in particular are vulnerable to these scams. CryptoKios are the perfect tool for those engaged in fraud or other illicit activities, because once the consumer feeds their money into the kiosk, it's gone. The nature of the crypto transaction is such that the money deposited into the end recipient crypto wallet holder is untraceable, and the money is never seen again. CryptoKios are a favorite tool of drug dealers since they are very efficient money money laundering tools to escape, detection by law enforcement. The FBI reported in 2023 that more than 69 Vermonters complained of more than $5,000,000 in losses in con in conjunction with cryptocurrency. The attorney general opines that this is extremely conservative estimate because many more Vermonters are loathe to complain for one reason or another. The consumer assistance program of the AG's office reports that they received 45 complaints of cryptocurrency fraud between 2022 and 2024, resulting in the loss to Vermont consumers of over $3,000,000. The essential problem with the crypto kiosk model of cryptocurrency purchase is it's just too easy to perpetrate the fraud. There's no time for rational thinking by the consumer. The money is fed into the machine through the inducement of the person committing fraud, frequently facilitated by QR codes, and it's gone. No amount of scrolling through notices and, other disclosures can ensure that an instantaneous transaction is a well considered one. The bottom line from the attorney general is the perspective that the risk to Vermont Vermont consumers from allowing devices prone to fraud, fraud, and other illicit activity far outweigh the benefits, especially where crypto customers have many less fraud means of engaging in these types of transactions. The FBI also reports that CRISPO k crypto kiosks enable criminal activity beyond fraud through money laundering, drug dealing, and extortion. In August an August 2025 report of the Treasury's Department's Financial Crimes Enforcement Network states that transnational criminal organizations and others are increasing use of certain crypto kiosks because they enable rapid international funds transfers as an alter and as an alternative to bulk cash smuggling. The committee heard testimony from AARP of Vermont. AARP supports the banning of crystal crypto PS from Vermont because they can be so easily used to victimize, individuals of a scam. In the case of older Vermonters, they can have a lifetime of savings lost through remand scams, government impersonation scams, and more. AARP pointed to an FBI report finding increased tragic tried complaints and 389,000,000 in losses nationally in 2025. AARP believes that a crypto kiosk fraud is vastly unreported by seniors due to feelings of shame and discomfort by the victim. Last year, at the request of the Committee on Commerce and Economic Development, the Department of Financial Reg Regulation is issued a report on crypto kiosk. Only three crypto crypto kiosks were operating in Vermont in twin in 2025. They were only two now. The small number of crypto kiosks operating in Vermont is probably the primary reason why relatively few Vermonters have been harmed recently. CryptoKiosks are increasingly heavily regulated in other states. The department testified that many have adopted the regulatory approach enacted in Vermont last year. More recently, states such as Indiana, Tennessee, and Minnesota have enacted bans on the operation of crypto kiosk, reasoning that no amount of regulation can sufficiently protect their consumers. Minnesota, in particular, noted that despite enacting strong consumer protections in 2024, the year after enactment of those provisions, 2025 was the worst year yet for consumer losses. The Vermont Department of Financial Regulation further noted that contrary to most other forms of money transfer available to retail operators in Vermont, there are no oversight, monitoring, or store or support staff at the kiosk. Again, it's just too easy for perpetrators to commit fraud or other illicit activities. The committee did hear testimony from the sole crypto kiosk operator in Vermont that there have been only 410 cryptocurrency transactions since additional record light regulations were put in place last year, with only one tribe complaint, and which was resolved. The committee also heard testimony that the low number of consumer complaints in Vermont is probably more a function of the fewer crypto kiosks operating in Vermont, leading to skepticism that the number of complaints is solely attributable to current regulations. The anticipation is that the addition of more kiosks in Vermont, even if subject to regulation, will greatly increase the likelihood of fraud and other criminal activity. At the end of the day, the committee faced the question of whether or not any amount of regulation provide adequate protections for Vermont consumers and deter unlawful criminal activity. Expanding consumer fund refund rights in the case of fraud was considered, but ultimately considered insufficient. Would imposing strict or absolute liability on operators be enough? But the operator is also very limited in their ability to screen and prevent such transactions. Is the daily transaction limit effective in reducing fraud? Perhaps to some extent, but it the operators but seniors in particular can be victims of fraud that extend over a much longer period of time. The question is raised as to whether it's feasible to require kiosk operators to conduct know your customer verification, similar to banking transactions, to weed out improper transactions. But we know that criminal elements are always one step ahead of game in terms of the regulatory and legal approaches. The committee also considered whether it's fair to the only crypto operator in Vermont, who by all accounts is complying with the law, have their have their, them cease their further business activities so soon after recently enacting additional regulation. However, the legislation we passed here last year through the provision extending the moratorium actually contemplated that the legislature would and could and would be revisiting the moratorium this year. In the end, a majority of the committee decided that no amount of additional information could provide more clarity on the question of whether crypto kiosk failed to promote promote the public good of the state. And as a result, an additional period of moratorium would serve no useful purpose. Additionally, no amount of additional regulation would provide consumer protections for Vermonters and against and guard against, using of these devices for money laundering. Accordingly, the committee recommends protecting Vermont consumers by ceasing to permit this inherently harmful activity in Vermont. The second further proposal of amendment in the first instance of amendment would create a licensing requirement for merchant cash advance providers. Vermont already has a regulatory program for licensed lenders administered by the Department of Financial Regulation. These are not financial institutions such as banks or credit unions, but they conduct personal lending transactions in amount under a million dollars. The second further proposal of amendment would create a similar regulatory program in the Department of Financial Regulation for relatively small commercial financing. The commercial financing proposed to be regulated here is often used to bridge the gap for businesses that cannot meet the credit risk standards of traditional lending lenders, or they need capital in an expedited manner. This is a fast growing market that is currently unregulated, leaving small businesses exposed to unscrupulous actors. Section 60 of the bill in section twenty two forty seven contains the core provisions of the merchant cash advance commercial finance licensing program. Subsection twenty two forty seven contains definitions. The key definitions are factoring transactions and sale based financing transactions. So see, these are the typical, basis for the loans. While traditional loans rely on strong credit history and physical collateral, The alternative financing authorized and regulated here relies more on the value of the business's future revenue. Subsection twenty two forty seven b establishes certain requirements for license commercial financing under the program, including the license requirement that they be licensed as a lender, requirement not to solicit borrowers without a license, Certain transactions are exempt from licensures, including state and federal local governments, regulated financial institutions, and loans, over $1,000,000. Automatic debits from the borrower's deposit account is prohibited unless the lender has a perfected security interest under the Uniform Commercial Code. Confessions of judgment are unenforceable, and lawsuits over the transaction must be brought within the state of Vermont. Disclosures are key elements, including the amount financed, the finance charge, annual percentage rate, and other, essential terms. There is a penalty provision that mirrors the license lending program for personal loans. There we go. The, licensing requirements would not take effect until 07/01/2027, and the commissioner of, DFR is authorized to adopt reg rules for the licensing program before the program takes effect. Madam speaker, the committee heard from the president of the Association of Vermont Credit Unions, the director of the consumer assistance program for the attorney general's office, the president of the Vermont Bankers Association, the government relations director for Primer Piper, Eggleston and Kramer, the deputy commissioner of banking of Vermont business owner, the associate state director of AARP of Vermont, the senior vice president and general general counsel of coin flip, and assistant general counsel with the department of financial regulation, a staff attorney with the department of financial regulation, legislative counsel of the office of legislation legislative counsel, the president of William Schuldis and Associates, the deputy commissioner of of securities, and the director of policy for the department of financial regulation. Madam speaker, on a straw poll of six three two, the committee viewed favorably these further proposals of amendment. On behalf of the committee on commerce and economic development, I ask the body to concur with the senate proposal of amendment together with these further proposals of amendment.

[Representative Jill Krowinski (Speaker of the House)]: And now for the committee on ways and means, member from South Burlington.

[Representative Bridget Burkhardt]: Madam speaker, your committee on ways and means, had a walk through of the amendment from the committee on commerce and economic development because the bill will now have potentially a very small impact on the revenues of the state. It is estimated that the moratorium and the rescinding of the ability for kiosks for cryptocurrency to operate in the state will result in a loss of about $1,000 in revenue since there are only two kiosks currently operating. The new requirement that merchant cash advance providers be licensed would result in about a thousand dollars per provider. It is unclear how many of those providers are operating in the state at the moment, so it was hard to estimate the total impact of that change, but the GFO assures us that it will probably be a very small change to the revenue of the state. These revenues would impact the financial institution supervision fund which generates about $4,000,000 per year, so very small impact. We heard from the reporter of the bill. We heard from a senior fiscal analyst from the joint fiscal office. We heard from legislative council, office of legislative council. The director of policy from the department of financial regulation and the Associate State Director for Advocacy and Outreach for AARP Vermont. And on a straw poll of eleven zero zero, the committee supports the amendment from your committee on commerce and economic development.

[Representative Jill Krowinski (Speaker of the House)]: So the question is the the member from Starksboro moves that the house concur in the senate proposal of amendment with further amendment thereto. Are you ready for the question? Member from West Windsor.

[Representative Elizabeth Burrows]: Thank you, madam speaker. I have a question for the presenter of the senate amendment.

[Representative Jill Krowinski (Speaker of the House)]: The member from Starksboro is interrogated.

[Representative Elizabeth Burrows]: Thank you, madam speaker. I must acknowledge upfront that I am not a banking expert, but I wondered whether, you could tell me the committee's rationale for, exempting loans over $1,000,000 in the licensed cash mergers providers section?

[Representative Caleb Elder]: Yeah. Thank you for the question, member. The $1,000,000 threshold is adapted from the the light remember, were talking about this is a new program for commercial lending. We have an existing program for personal lending, and they both have the same cap. The rationale for the cap is that, it is general feeling that once you get into big numbers, a million dollars or more, you're probably a much more sophisticated type of borrower, and so that all these protections are probably not necessary. That would be the answer.

[Representative Theresa Wood]: Thank you, madam speaker.

[Representative Jill Krowinski (Speaker of the House)]: So the question is, shall the house concur in the senate proposal of amendment with further amendment thereto? Member member from Clarendon.

[Representative Thomas Burditt]: Thank you, madam speaker. As a member of Commerce and Economic Development Committee, I participated in this discussion, and I was one of the no votes on this simply due to the fact that I didn't feel we had given the cryptocurrency kiosk business enough time with the newly enacted restrictions that went into effect on July 1. So I exercised my voice and my vote in committee and went down in flames, and I will now be voting in favor of the general good that this legislation will bring, and I urge my fellow house members to do the same.

[Representative Chea Waters Evans]: Are you ready for

[Representative Jill Krowinski (Speaker of the House)]: the question? If so, all those in favor, please say aye. Aye. All those opposed, please say nay. The ayes appear to have it. The ayes do have it and you have concurred in the senate proposal of amendment with further amendment there too. Members, it is my understanding that there may or may not be further amendment on house bill nine forty one so we will bump that to the end of the calendar for today. And that means up next is senate bill two forty three which is an act relating to distributing funds to the Vermont language Justice Project. Please listen to the third reading of the bill.

[House Reading Clerk (unidentified)]: S two forty three, an act relating to distributing funds to the Vermont Language Justice Project.

[Representative Jill Krowinski (Speaker of the House)]: The question is shall the bill pass in concurrence with proposal of amendment? Are you ready for the question? If so, all those in favor, please say aye. Aye. All those opposed please say nay. The ayes appear to have it, the ayes do have it and you have passed the bill in concurrence with proposal of amendment. And now we'll turn to Senate Bill 198 which is an act relating to the regulation of tobacco products and tobacco substitutes. The bill was referred to the committee on commerce and economic development which recommends that the house propose to the senate to amend the bill as printed in today's calendar. The member from Jericho, representative granting will speak for the committee. The bill was then committed to the committee on human services which recommends that the report of the committee on commerce and economic development be amended as printed in today's calendar. The member from Wilkut, representative Noyes will speak for that committee. And then affecting the revenue of the state, the bill was referred to the committee on ways and means which recommends that the bill ought to pass in concurrence with the proposal of amendment recommended by the committee on commerce and economic development when amended as recommended by the committee on human services. The member from South Burlington, representative Burkhardt will speak for that committee. Please listen to the second reading of the bill.

[House Reading Clerk (unidentified)]: S 198, an act relating to the regulation of tobacco products and tobacco substitutes.

[Representative Jill Krowinski (Speaker of the House)]: Member from Jericho.

[Representative Edye Graning]: Madam Speaker, the Vermont Department of Health has given has driven a significant decades long decline in smoking with adult cigarette smoking falling from 20% in 2011 to 11% in 2023. Despite this, smoking remains the leading cause of preventable death in the state. While traditional cigarette use dropped 50% in the last decade, vaping among our youth and young adults has tripled since 2017. Today, the vape manufacturers had set their sights on the youngest generation, and the Vermont Youth Risk Behavior Survey of 2023 shows that one in fifteen children under the age 13 have tried vaping. Roughly one in five high school students currently use tobacco products. This compares to about one in six adults, a gap that reflects how aggressively the industry is targeting our youth. Tobacco companies spend $15,800,000 marketing their in Vermont annually. The evidence is clear. Their marketing is working, especially on kids. It shapes attitudes, normalizes use, and drives addiction. New vaping devices are being designed specifically to hook young people. Some vapes have built in gaming controllers that reward players with in game points or competitive advantages when they take a nicotine hit, literally conditioning youth to associate vaping with winning. Others sync with social media, pulling up Instagram photos with each puff, embedding nicotine delivery into the scroll habits that already dominate young children's screen time. These gaming and social media integrations make nicotine addiction feel like play. These are not products that accidentally appeal to kids. They are engineered to combine multiple behaviors that are known to be addictive. This is precisely why prevention policy is important. The industry is not slowing down and neither should we. S-one 198 is designed to update our current tobacco laws to include these new products and emerging products to update our licensing for tobacco retailers by decoupling liquor and tobacco licenses and creating licenses for wholesale dealers in Department of Liquor and Lottery, DLL, which will close loopholes that have been allowing unauthorized and untaxed tobacco to be sold in Vermont, and finally, to align Vermont law with current enforcement practice. This bill had stops in multiple committees, so there are areas that I will not include in my report because they will be included in the reports by the member from Wolcott and the member from South Burlington. And now I will take you through the bill. You can find it on page twenty eight seventy three of today's calendar. Section one amends seven BSA chapter 40 to update the definition of tobacco substitute. It now includes products that are derived from or contain tobacco or nicotine and are intended for human consumption by smoking, chewing, inhaling, sucking, absorbing or consuming in any other manner. This includes includes the vapes and pouches, which are an emerging nicotine delivery system that we are seeing proliferating in our state. The bill creates a wholesale license through DLL and defines how the wholesale business will be regulated going forward, limiting sales of products from licensed wholesalers to licensed retailers or other wholesalers. Previously, the license for wholesale dealers was held in the Department of Tax, which created many enforcement loopholes in part due to the issue that tax was unable to share the list of licensees with DLL. This bill creates an annual licensing fee and graduated penalties up to a revocation of license for selling without a license or to or selling to unlicensed entities. This new system will also begin the process to ensure that all tobacco and nicotine products sold in Vermont will be taxed appropriately. Section ten zero five will be covered by the member from Wolcott. Current DLL practice is to find an individual working at a licensed entity that sells tobacco products to an individual under the age of 21. Section 1,007 modifies current law to be in line with this practice and updates the associated civil penalties. The licensed entity is also subject to administrative penalties or license suspension or revocation for repeated offenses. Section ten zero nine ensures that if tobacco products or substitutes are seized due to a violation of this title, that the products are disposed of in compliance with the agency of natural resources hazardous waste management regulations at the expense of the violator. In 2019, Vermont banned the online sale of e cigarettes or vapes after banning Internet sales of tobacco in 2008. Section ten ten clarifies that online sales of tobacco substitutes are allowed from Vermont leased licensed wholesale dealers to other licensed wholesale and retail dealers in the state only. The member from Wolcott will cover section e. We are now on page twenty eight eighty of today's calendar where deceptive tobacco products and tobacco substitutes are banned in section ten thirteen. Tobacco products and tobacco substitutes may no longer resemble school supplies or food products or smartphones or inhalers or video games as they do today. Violations of this section are subject to civil or criminal remedies and each instance of marketing, promoting, labeling, branding, advertising, possessing for sale, or selling one of these deceptive tobacco products or tobacco substitutes shall be considered a separate violation. Section two will be covered by the member from Wolcott. Section three, seven BSA two ten clarifies the power of the control commissioners or the Board of Liquor and Lottery over licensures that we discussed earlier. They can impose administrative penalties, suspend or revoke licenses depending on the severity or repetition of violation. Sections four through 11 cover Title 32 which is taxation and finance and some reporting and those will be covered by rep the representative from Woolcott, sorry, and the representative from South Burlington. Section 12 on page twenty eight eighty five covers the effective dates. The Act takes place on 07/01/2026 except for the provisions moving the wholesale licensure from tax to dep DLL which take place sorry, which take effect on 07/01/2027. Our committee heard from senior fiscal analyst from joint fiscal Office to assistant attorney generals from the Office of the Attorney General, the coordinator of the Franklin Grand Isle Tobacco Coalition, deputy chief counsel from Office of Legislative Counsel, Director of Communications and Legislative Affairs from the Department of Liquor and Lottery, Executive Officer of Compliance and Enforcement from DLL, Commissioner of DLL, lobbyist from the Vermont Retail Grocers Association, director of communications and marketing from the Burlington Partnership for a Healthy Community, student a student assistant professional from Champlain Valley Union High School, the founder of Tobacco Free Vermont, and a professor from Rutgers Center for Tobacco Studies and Rutgers School of Public Health. The vote in our committee was in favor, eleven zero zero, and we ask the body for support.

[Representative Jill Krowinski (Speaker of the House)]: And now speaking for the committee on human services, the member from Wolcott.

[Representative Daniel Noyes]: Thank you, madam speaker. The committee on human services has reviewed the report and respectfully proposes a strike all amendment to the report of the commerce the committee on commerce and economic development. Our changes can be found starting on page twenty eight eighty five of today's calendar. The committee modified the penalty for a minor who presents a fake ID to purchase tobacco products. Rather than mandating community service, the amended language gives the minor the choice of providing up to ten hours of community service or participating in a nationally recognized youth tobacco cessation program to be determined by the Department of Health. The committee believes connecting young people to cessation resources is more consistent with the public health goals than a punitive only approach. The committee added the requirement that the division of liquor control issue a retail tobacco license only after the municipality has approved the application ensuring local oversight proceeds state licensure. The committee added an annual reporting requirement directing the Department of Liquor and Lottery and the Office of the Attorney General to report each January to the House Committee on Commerce and Economic Development and the Human Services Committee I'm sorry, the Human Services and the Senate Committee on Economic Development, Housing and General Affairs and on Health and Welfare on online compliant check activity, referrals for enforcement action, public compliance complaints received and penalties imposed. The committee finds that online sales of tobacco substitutes represent a significant and growing enforcement challenge, particularly with the respect to sales to minors and the legislative oversight is warranted. Finally, the committee added a section directing the Department of Liquor and Lottery in conjunction with the Office of the Attorney General to report in '27 on whether current enforcement staffing is sufficient to meet the compliance targets in statute and to enforce the expanded scope of regulations under this act including the prohibition on deceptive devices, internet sales restriction, and expanded wholesale licensure. The report shall identify unmet enforcement needs and assess whether additional resources at the Department of the Attorney General's Office would, materially improve compliance. The committee found that expanding the regulatory framework without an honest assessment of enforcement capacity is not enough to present public protect public health. We agree with all other aspects of the report of the committee on commerce and economic development. Our voting committee was nine zero two. The committee heard from hang on. Proposer of the amendment, deputy chief counsel, officer of the legislative council, director of communications and legislative affairs, department of liquor and lottery, director of policy and Legislative Affairs, Attorney General's Office, Assistant Attorney General, Office of the Attorney General, Commissioner of Department of Liquor and Lottery, Lobbyist from the Vermont Retail and Grocers Association, Interim Deputy Commissioner Department of Health, Chronic Disease Prevention Chief Department of Health, Assistant Professor Professional, sorry, Champlain Valley High School, Founder of Tobacco Free Vermont, government relations director, American Heart Association, and professor Rutgers Center for Tobacco Studies and Rutgers School of Public Health. Thank you.

[Representative Jill Krowinski (Speaker of the House)]: Member from Jericho.

[Representative Edye Graning]: The Committee of Commerce heard the report from the Committee of Human Services and voted eleven zero zero in favor of their amendment.

[Representative Jill Krowinski (Speaker of the House)]: And now speaking for the committee on ways and means, member from South Burlington.

[Representative Bridget Burkhardt]: Madam speaker, s one nine eight was referred to your committee on ways and means because it will have an impact on the revenues of the state. The joint fiscal office has prepared a fiscal note that can be found on our committee's website or the JFO website by searching for the bill number. The main fiscal impact of the bill comes from the changes in fees. There are currently approximately 780 retailers licensed to sell tobacco products in Vermont. 730 of them pay no separate tobacco sales license fee because their tobacco license is coupled with their liquor license. The bill decouples those licenses requiring licensees to pay for separate liquor and tobacco licenses and increases the fee for a tobacco license from $110 to $150 per year. Out of the seven eighty current tobacco licensees, five twenty have an endorsement to sell tobacco substitutes as well. The fee for that endorsement is increasing from $50 to $75 in this bill. The total increase in fee revenue from retail sales licenses assuming no changes in the number of licensees is estimated to be approximately a $125,000 per year. The 40 wholesale tobacco dealers in Vermont currently pay no annual license fee. The bill imposes an annual fee of $1,245 which is in line with wholesale liquor licenses. The increase in the fee would generate roughly $50,000 in additional annual fee revenue. The changes in fee revenue would increase the funds flowing to the Liquor Control Enterprise Fund beginning in fiscal twenty twenty eight. Changes to fines and penalties are also incorporated in the bill as described by the member from Jericho. While fines are not considered revenues of the state, it is important to note that the bill also increases the civil and administrative penalties for selling tobacco or tobacco substitutes without a license or selling them to those under the age of 21. Civil penalties are handled by the Vermont judiciary and funds generated less administrative fees are deposited in the general fund. Administrative penalties are allocated to the liquor control enterprise fund which funds the operations of the Department of Liquor and Lottery. Any funds generated beyond those needed to fund the Department of Liquor and Lottery operations flow to the general fund. Funds recovered by the attorney general support the budget of the attorney general's office, replenish the complex litigation fund, and are distributed to the general fund through a direct app. The f y twenty seven house proposed budget includes a direct app of $2,000,000 from the AG's fees special fund. The joint fiscal office does not estimate the impact of changes to fines and penalties nor recoveries by the AG's office, but I will quickly summarize the changes to fines and penalties to give you a sense of their magnitude. The bill increases the civil penalties for selling tobacco or tobacco substitutes without a license from $200 to $2,000 for a first offense and from $500 to $5,000 for each subsequent offense. The same civil penalties are established for wholesalers who sell without a license as for retailers, namely $2,000 for the first offense and $5,000 for subsequent offenses. The bill removes the fine for those who are caught misrepresenting their age in order to purchase tobacco and tobacco substitute products and replaces the fine with a choice of ten hours of community service or participation in a youth tobacco cessation program. The maximum first time civil penalty for selling tobacco and tobacco substitutes to underage individuals is increased from 100 to $150. Multiple violations for selling products to underage individuals will now carry administrative penalties along with license suspension and potential revocation. For a second violation, not less than $1,000 and a two day license suspension, a third violation not less than $2,000 and a fifteen day suspension, a fourth violation not less than $3,500 and a ninety day suspension, and a fifth violation not less than $5,000 and a revocation of license. The fine for possession of contraband is increased from a minimum of $500 to a maximum of 1,000, and the range has changed to 500 to $1,000 per item. The bill also introduces a new section of title seven that prohibits the sale of deceptive tobacco products and tobacco substitutes. The attorney general may impose a civil penalty of up to $5,000 for each violation of the prohibition on selling deceptive products. The Board of Liquor and Lottery has had the power to impose administrative penalty of up to $7,500 per violation against a holder of a wholesaler's dealer's license under seven VSA chapter nine. The bill extends that to holders of any tobacco license and repeals lighter penalties and current statute for tobacco licensees. The bill also requires two reports as mentioned before, a report from the Department of Liquor and Lottery on the state's capacity to enforce tobacco laws and a report from the Department of Taxes on the most effective way to impose and collect taxes on tobacco substitutes based on nicotine concentration. That report will also study taxes or the continued use and potential expansion of tax stamps to certify tax compliance and the advantages and disadvantages of other potential methods. The committee on ways and means heard from the following witnesses. A senior fiscal analyst from the joint fiscal office, deputy chief counsel, office of legislative counsel, director of policy and legislative affairs, and an assistant attorney general, office of the attorney general, commissioner from the Department of Liquor and Lottery, the reporter of the bill from the House Committee on Human Services, policy director from the Department of Taxes, and the director of communications and legislative affairs from the Department of Liquor and Lottery. On a vote of ten zero one, your committee on ways and means recommends that the bill ought to pass in concurrence with the proposal of amendment as recommended by the Committee on Commerce and Economic Development when further amended as recommended by the Committee on Human Services. On third reading, house ways and means will offer a small amendment to move responsibility for the report on taxing of tobacco substitutes from the Department of Taxes to the Office of the Attorney General. This change was requested by the Department of Taxes.

[Representative Jill Krowinski (Speaker of the House)]: So the first question is, shall the report of the committee on commerce and economic development be amended as recommended by the committee on human services? Are you ready for the question? If so, all those in favor please say aye. Aye. All those opposed please say nay. The ayes appear to have it. The ayes do have it and you have amended the report of the committee on commerce and economic development. Now the question is shall the house propose to the senate to amend the bill as recommended by the committee on commerce and economic development as amended. Are you ready for the question? If so, all those in favor, please say aye. Aye. All those opposed, please say nay. The ayes appear to have it. The ayes do have it and you have proposed to the senate to amend the bill. Now the question is, shall the bill be read a third time? Are you ready for that question? If so, all those in favor, please say aye. Aye. All those opposed, please say nay. The ayes appear to have it. The ayes do have it and third reading is ordered. Next we'll take up House Bill eight sixteen which is an act relating to the regulation regulating the use of artificial intelligence in the provisions of mental health services. Member from Essex.

[Representative Bridget Burkhardt]: Madam speaker, I move that we delay action on H eight sixteen for one legislative day.

[Representative Jill Krowinski (Speaker of the House)]: The member from Essex moves that we postpone action on House Bill eight sixteen for one legislative day. Are you ready for the question? If so, all those in favor please say aye. Aye. All those opposed please say nay. The ayes appear to have it. The ayes do have it. Inuit postpone action on House Bill eight sixteen for one legislative day. Up next is House Bill nine twenty one which is an act relating to alcoholic beverages. Member from Cambridge. Madam speaker, I move that we postpone action on h nine two one by two legislative days. The member from Cambridge moves that we postpone action on house bill nine twenty one for two legislative days. Are you ready for the question? If so, all those in favor, please say aye. Aye. All those opposed, please say nay. Aye. The ayes appear to have it. The ayes do have it and you have postponed action on House Bill nine twenty one for two legislative days. Next is House Bill nine thirty which is an act relating to addressing and preventing chronic absenteeism. The bill passed the senate in concurrence with proposal of amendment that is printed in today's calendar. Member from Manchester.

[Representative Kathleen James]: Madam speaker, just weeks ago, the house unanimously passed out h nine thirty, an act relating to chronic absenteeism in Vermont. The bill went to the senate education committee where they continued to take testimony. This amendment, therefore, is a strike all bill, but it doesn't really change the essence of the original work. In all their wisdom, the senate education committee made a slight but important substantive substantive change. The house version of the bill would have included a list of the kind of reasons for excused absences a student may have in statute. The senate struck all that in favor of requesting both a model policy and model procedures to accompany the model policy. That work will be completed by the agency of education and partners including Vermont school boards, Vermont superintendents, Vermont independent school association, the National Association of Social Workers, Department for Children and Families and several others. Additionally, the new policy will be reviewed every three years. House education sees this step as much more effective than including a list of possible reasons for missing school. The House Committee on Education found these changes appropriate and important. As I stated in my floor report, this is a national crisis that affects us here in Vermont, one that we need to handle with care and serious intent. The House Committee voted ten zero one in the straw poll in favor of these changes and asked the body to support the bill.

[Representative Jill Krowinski (Speaker of the House)]: The question is, shall the house concur in the senate proposal of amendment? Are you ready for the question? If so, all those in favor, please say aye. Aye. All those opposed, please say nay. The ayes appear to have it. The ayes do have it and you have concurred in the senate proposal of amendment. Members, our final bill on the calendar today is house bill nine forty one which is an act relating to municipal regulation of agriculture. The bill passed the senate in concurrence with a proposal of amendment that is printed in today's calendar And the member from Shaftsbury and others will offer a further amendment there too that the first assistant clerk emailed to members at 01:03PM. This amendment is also posted on the house overview webpage and paper copies are available at the main table. Member from Shaftsbury.

[Representative David Durfee]: Thank you, madam speaker. As members may recall, H nine forty one is a committee bill that offers a compromise solution to a problem brought on by an unexpected judicial ruling last spring. Last year, the Vermont Supreme Court overturned many years of precedent and conventional understanding and ruled that cities and towns have the authority to regulate some aspects of farming. And you will recall that farmers, municipalities and our agency of agriculture worked hard during the off session to find a legislative solution that would be agreeable to everyone. And H nine forty one is the outgrowth of those conversations. The bill, in addition, adds a new food sovereignty clause that for the first time establishes for anyone, farmer, non farmer alike, the right to grow vegetables and raise poultry on their property. The other body made some changes to the bill and the members of the Agriculture, Food Resiliency, and Forestry Committee today are proposing a further proposal of amendment in the form of the strike call, which you can find on the House website. The Senate's proposal of amendment is printed in today's calendar. I'll now walk through the sections of the bill. Section one, findings and intent. The Senate amended this section to include more intent language than we originally had. Our amendment makes only conforming changes to the Senate's version. The Senate's version points out that since at least 2004, it's been the understanding that municipalities may not regulate agriculture, agriculture including the construction of farm structures and that the agency of agriculture regulates through the required agricultural practices rule. The court reversed that understanding and held that municipalities may regulate agricultural activities so long as they do not regulate the required agricultural practices rule itself. To avoid unintended consequences of having farms be regulated by both the municipality and the agency of agriculture, this proposal amendment would restore the understanding that municipalities may not regulate farming or the construction of structures with some exceptions. And these exceptions will recognize that farming livestock requires a certain amount of land and that municipalities can regulate farming livestock on smaller sized parcels. And as I noted, the bill also will protect a person's ability to raise a small poultry flock and to cultivate their land to grow plants. Section two repeals the language that the court referred to in its ruling and replaces it with new unambiguous wording. A farm that is required to comply with the required agricultural practices rule can't be regulated locally with several exceptions. This section would permit municipal regulation of raising, feeding or managing livestock on a farm that is less than one contiguous acre even if there is other farming activity that is subject to the R. R. S. In addition, this section would prohibit municipal regulation of raising, feeding, or managing livestock on a farm of one to four contiguous acres only when the secretary of agriculture determines that the farm has a sufficient land base for appropriate nutrient and waste management. The section would permit some municipal regulation of swine waste in designated downtowns and village centers regardless of the size of the parcel. The section further prohibits municipalities from regulating the cultivating of land for growing plants, including plants for food. This specific exception excludes cannabis and hemp, which are regulated elsewhere in statute. Section three prevents towns from using bylaws to prohibit everyday citizens whose operations don't rise to the level of professional farming from raising poultry with the exception of roosters and ratites for their own use or for donation or sale. If you're wondering what a ratite is, think emu or ostrich. Section four amends the threshold criteria for farming activity to be subject to the RAP's rule and therefore exempt from regulation by municipal bylaws. Meeting any one of the criteria makes farming activity subject to the RAP's rule. Generally, the RAP's rule regulates regulates water quality and other farming standards on farms and requires farmers to adopt practices to mitigate adverse impacts to water. The criteria include farming that generates $2,000 at least in farm income or involves a certain number of animals on a farm of at least four contiguous acres or involves growing and harvesting crops on at least four contiguous acres. The section changes the RAP's rule to conform to the statute so that farming livestock on less than one contiguous acre is subject to municipal regulation even if other farming activities are subject to the RAPs. The section also changes to the RAPs to conform to statute so that farming livestock on one to four contiguous acres must have a sufficient land base for the appropriate nutrient and waste management. Growing and harvesting for sale crops on a farm that is at least four acres is another criteria to make a farm subject to regulation by the RAPs. Section five creates a formal stakeholder group charged with studying how to further address municipal regulation of agriculture and reporting back to the legislature in January. And section six is the effective date, which is July 1. Madam speaker, the straw poll in our committee was eight zero zero on this further proposal of amendment and we ask for the body's support.

[Representative Jill Krowinski (Speaker of the House)]: The member from Bury moves that the house concur in the senate proposal of amendment with further proposal of amendment thereto. Are you ready for the question? If so, all those in favor please say aye. Aye. All those opposed please say nay. The ayes appear to have it. The ayes do have it and you have concurred in the senate proposal of amendment with further amendment thereto. Members, that completes the orders of the day. Are there any announcements? Member from Coffin Tree.

[Representative David Durfee]: Thank you, madam speaker. Just a reminder to members of house commerce and economic development, we'll be meeting at 02:45.

[Representative Jill Krowinski (Speaker of the House)]: Member from Waterbury.

[Representative Theresa Wood]: Just a reminder to or not a reminder, an announcement to house human service committee members that we are gonna be meeting at 02:40.

[Representative Jill Krowinski (Speaker of the House)]: Member from Chester.

[Unidentified Representative from Chester]: We've created an opportunity, and I'm going to take it because it may not happen again. Over the last year, I have been at odd times documenting the unique timber framing in the dome above us, and I have permission to take a small group up with me. If

[Representative David Durfee]: you

[Unidentified Representative from Chester]: have not had occasion to go or you just like talking about arcane, nerdy construction techniques, I will be in the Lobby 10 Minutes after we adjourn, or I can meet people along the stairs on the senate end of the building. Thank you.

[Representative Jill Krowinski (Speaker of the House)]: Are there any further announcements? Member from Ferrisburg.

[Representative Matthew Birong]: Thank you, madam speaker. Rising to a second, the announcement that was provided by the member from Weitzfield in the first go around. We might be called freshmen, although maybe we're sophomores now since it's the second year of the of the millennium. But We are nonetheless attempting to have a class gathering this evening at Bartholomew Gin, address 116 Gin Lane here in Montpelier. And I wanna make sure that that is clearly extend that invitation is clearly extended all who were appointed during the the biennium. Please do gather for us. Now I have made a call to Bartholomew Gin, and they don't open until 04:00. So the half an hour after four ends probably is not sufficient. And I don't think they're expecting us until, like, five or 05:30. So I think if we show up at 04:00, we'll just surprise them. But, yeah, we'll hope to see you all there. Thank you.

[Representative Jill Krowinski (Speaker of the House)]: Are there any further announcements? Seeing none, member from Fulton East, can you please offer us a motion to adjourn until Friday, May 15 at 09:30AM?

[Unidentified Member (motion to adjourn)]: Madam speaker, I make a motion this body stand and adjournment until Friday, 05/15/2026 at 09:30AM.

[Representative Jill Krowinski (Speaker of the House)]: You have heard the motion. Are you ready for the question? If so, all those in favor, please say aye. Aye. All those opposed please say nay. Nay. The ayes appear to have it, the ayes do have it and this body stands in adjournment until tomorrow at 09:30AM.