Vermont Legislature SmartTranscripts:

[Rep. David Durfee (Chair)]: Right. Moving on now to an overview of 181 of 2024. It says Act two fifty up there, which is true. In 2024, we passed Act 181, which is a large, very large all encompassing bill that made many changes to Act two fifty and called for a couple of reports. Mentioned this yesterday. And we've asked legislative council to come in and tell us give us some context because we're gonna be looking at the report itself later in in a week, I think, or maybe next week. And in order to understand what we're looking at, it seemed like it'd be helpful to go back and review the statute that asked for the report. So with that, I'll turn it over to you, Ellen.

[Ellen Tchaikowski, Office of Legislative Counsel]: Thanks. Ellen Tchaikowski, Office of Legislative Counsel. And so I'm here today to talk to you a little bit about wood products manufacturers and their treatment under Act two fifty. So you will recall that last year I did come in and give you all a presentation on the basics of Act two fifty, the state land use and development law. My PowerPoint on the quick big parts of it are on your website under my name. So if you want to flip back to that at any point, it's the basics of how to determine if you need a permit and then what are the requirements. And so that's already up here. And so here's a few more specifics about wood product manufacturers under Act two fifty. So under act two fifty, logging and forestry below 2,500 feet in elevation is exempt from act two fifty. I think of this similar as a similar way that farming is treated under act two fifty. So not to open any other can of worms, but under Act two fifty, logging and forestry is exempt under 2,500 feet and so is farming. And so in the past, you looked at issues with when something becomes slightly more than farming, sort of value added or other commercial aspects of a farming that might trigger Act two fifty jurisdiction, and you've worked on accessory on farm businesses and how to treat them under Act two fifty. This is the corollary for logging and forestry. So the basic, the primary action of taking the logs out of the woods and processing them, that is exempt from Act two fifty. But then there's a second step with the value added process that has treatment under Act two fifty under these definitions of wood products manufacturers. So I have the definitions here. So we're talking about wood products and then those who use them. So wood products manufacturer is a manufacturer that aggregates wood products from forestry operations and adds value through processing or marketing in the wood product supply chain or directly to consumers through retail sales. It includes sawmills, veneer mills, pulp mills, pellet mills, producers of firewood, wood chips, mulch and fuel wood, log and pulp concentration yards. It does not include the facilities that purchase, market, or resell finished goods such as furniture, pellets, milled lumber without receiving them directly from the forestry operation. So forestry operation to a wood products manufacturer, that's what we're talking about, but not the next step of the retail person who hasn't been actually doing the value adding themselves. And wood products includes logs, pulpwood, veneer wood, boltwood, wood chips, studwood, poles, pilings, biomass, fuel wood, maple sap, and bark. So those definitions are used in Act two fifty, and there's been a few of these changes to Act two fifty related to these things in the last few years. So in 2017, you added this provision for small sawmills. So when one of these facilities applies for Act two fifty permit, it will be treated as application. So a minor application under Act two fifty has a much faster timeline to get their permit processed. And this is for a sawmill that produces 3,500,000 board feet per year annually or less, or an operation that involves primary processing of forest products of commercial value that annually produces 3,500 cords or less of firewood or cordwood, or 10,000 tons or less of bullwood, whole tree chips, or wood pellets. So this is for just these types of facilities. They go through the minor application process by default, and it's a much quicker turnaround than a major application would get.

[Rep. David Durfee (Chair)]: I remember having you in, I think, two years ago, maybe when we were looking at this and having a conversation about bowl wood. And I think representative Lipsky was able to enlighten us a little bit because it's not a term that we normally use. Yeah, it was lost.

[Rep. John O'Brien (Member)]: Yeah. I actually don't

[Rep. David Durfee (Chair)]: put my door plates. I think it was two years ago. Yeah.

[Rep. Jed Lipsky (Clerk)]: It was small diameter short wood that often were used for manufacturing, a little flag that has a wooden finial on the end that might be this long. Okay. That used to we had all sorts of tongue depressors, and it's made out of bulb, white patch typically. Toothpick might come out of gold. Easy peasy.

[Ellen Tchaikowski, Office of Legislative Counsel]: Great. So then another, change that you all made in 2022, this provision was added specifically to give specific permit conditions for wood products manufacturers. So, first, when issuing a permit, so when a district commission issues a permit, they almost always attach some basic conditions, and those conditions are attached to address some of the criteria under Act two fifty, so to address or mitigate issues that may come up with the facility. And so first, it says that the District Commission shall account for the seasonal, weather dependent, land dependent, and varied conditions unique to this industry, so asking them to recognize that this is often a very seasonal industry that depends on the weather and getting trees out of the forest. Subsection adds that a permit condition that sets hours of operation for a wood products manufacturer shall only be imposed to mitigate an impact under criteria one, which is air pollution and noise, five, which is traffic, or eight, which is aesthetics, which also includes noise. And so those are generally the criteria that you set hours of operation to address anyways. So for some businesses, it's pretty typical for there to be a condition that says you have to operate within standard hours of operation because your facility is quite noisy and you have neighbors and they would like that to be quiet at night. So that's fairly typical, but it goes on to say, If an adverse impact would result, a permit with condition shall allow the manufacturer to operate while allowing for flexible timing of deliveries of wood products from forestry operations to the manufacturer outside permitted hours of operation, including nights, weekends, holidays for the number of days demonstrated by the manufacturer as necessary to enable deliveries not to exceed ninety days per year. So going through this process, the manufacturer can say to the district commission, We need to have deliveries outside normal business hours, including nights, weekends, and holidays, because it really is weather and seasonally dependent for us to get these forestry products so that we can then use them in business. So up to ninety days per year, they can request that they operate outside of standard business hours.

[Rep. David Durfee (Chair)]: And deliveries here, or maybe this is obvious, but it's referring to incoming raw materials.

[Ellen Tchaikowski, Office of Legislative Counsel]: Yeah. Yep. But then C also touches on a different issue with fuel. So there's also this permit conditions for delivery on wood heat fuels, so a permit with conditions issued to a wood product manufacturer that produces wood chips, pellets, hoard wood, or other fuel wood used for heat shall allow for flexible delivery of that fuel from the manufacturer to the end user outside of permanent hours of operations, including nights, weekends, and holidays from October 1 to April 30 of each year. Permits with conditions shall mitigate the undue adverse impact while enabling deliveries by the manufacturer. So again, these businesses produce products that are used to heat homes, and so this again recognizes that their permits can allow them to deliver outside of normal business hours on nights, weekends, holidays from October 1 to April 30 of each year.

[Rep. David Durfee (Chair)]: And we're talking here about, just a reminder, Act two fifty permits. Goal is correct. The Act two fifty permits. Okay.

[Rep. John O'Brien (Member)]: Senator O'Brien. Yeah. Just along those lines, can you just give us a quick tutorial on the district commissions are under the Landry's review board or the agency of natural resources and then environmental courts, which came up yesterday just how this sort of works in state government.

[Ellen Tchaikowski, Office of Legislative Counsel]: Sure. Sure. So Act two fifty is the state land use and development law. The agency that administers it is called the Land Use Review Board. A slightly unusual system compared to other permitting systems where they have oversight and administration and create rules, but below them are the district commissions. There's nine of them. They largely correlate to the different counties in the state. Those are made up of three members, basically volunteer members from each community where that district is located. So we're in Montpelier right now. We're in Washington County. We're in District 5 of Act two fifty. So Montpelier and the surrounding towns have a district commission that's made up of people who live nearby, and they are not controlled by the LERB. They review when someone wants to build something in District 5, they submit an application, it is reviewed by the District Commission, and they either do a minor permit where it takes fourteen or so days to issue the permit or they do a major hearing major permit and they hold a hearing on it. When they issue that permit, the LERB has no say. Right now, they're just an administrative body. If someone would like to challenge that permit, that permit appeal goes to the environmental source from the District Commission. So the Agency of Natural Resources is not involved at all, unless the Agency of Natural Resources thinks there's an environmental issue that they are going to weigh in on.

[Rep. John O'Brien (Member)]: So in this case, the chair was introducing us yesterday too about this whole farming and wraps thing at the certain level came up through the environmental court side of things. So same thing here that if a municipality did not, wanted to somehow oppose one of these permits, it would end up in environmental court?

[Ellen Tchaikowski, Office of Legislative Counsel]: Potentially, yes. I mean, a municipality can participate in an Act two fifty proceeding. They don't often do that because there is also the municipal zoning system that is its own system. So Act two fifty is the state land use law, but individual towns that have adopted zoning have a municipal land use system that they issue permits for. So everything I've been talking about is just Act two fifty. The towns themselves have their own sets of regulations through their zoning that would apply potentially to these facilities.

[Rep. John O'Brien (Member)]: And then individual Vermonters, if they sued, say, a sawmill because there's light traffic, that would end up in environmental. Yes. Those two. Yep.

[Ellen Tchaikowski, Office of Legislative Counsel]: And then finally on this slide, just to wrap up this little part, typically under Act two fifty, when a permit is issued with conditions, permit holder can't just ask for those conditions to be changed. However, the language in the statute included this special provision that says, in recognition that you changed and established these specific permit conditions for wood products manufacturers, there's a it waves the requirement to go through Act two fifty rule 34E, which is the rule that sets the procedure for changing conditions. So wood product when this was adopted in 2022, wood product manufacturers that were already existed could just bypass rule 34E and just ask that the board to update permit to reflect these default conditions. So that was a little shortcut you also gave them for that.

[Rep. David Durfee (Chair)]: You did say the date. We can't see it on the

[Ellen Tchaikowski, Office of Legislative Counsel]: Oh, it's 2022.

[Rep. David Durfee (Chair)]: 2022. Okay. Sorry.

[Ellen Tchaikowski, Office of Legislative Counsel]: Okay. And then coming up to what you did in act one eighty one. So in act one eighty one, which is in 2024, you created this provision for Primag soil mitigation. So I I haven't talked to you about Primag soil mitigation this year, but I've been in here a few times on it. Under Act two fifty, one of the criteria is to demonstrate whether or not the construction would damage primary agricultural soils on the site. If so, there is a formula and statute for how there's a requirement that you mitigate the harm to those primary agricultural soils either by conserving other soils elsewhere or paying a modification fee so that VHCb can purchase comparable soils elsewhere to be conserved. And so there is a formula in statute that requires more land with primag soils to be conserved than those are being destroyed, and so it generally results in a ratio between two:one to three:one, depending on where the soils are located and what number on the prime scale they are. This provision set that for wood product manufacturers, if they are going to be causing damage to primag soils, the mitigation ratio is one to one. So it lowers the fee that wood products manufacturers would need to pay, but still requires them to do some conservation. And then the other thing in Act 181 was this requirement for the report that you're going to hear. So, 35 of Act 181 out of this provision. So, the Land Use Review Board, in consultation with the Department of Forests, Parks and Recreation, shall convene a stakeholder group to report on how to address the Act two fifty permitting process to better support wood products manufacturers and their role in the forest economy. The group shall examine the Act two fifty permitting process and identify how the minor permit process that I showed you in 6084 gs has been working and whether there are shortcomings or challenges. The group may look at permitting holistically to understand the role of permits from the Agency of Natural Resources, which may have their own permits that could apply municipal permits, like zoning permits where they apply and Act two fifty permits and develop recommendations to find efficiencies in the entire process or recommend an alternative permitting process for wood products manufacturers. And that report was due December 14, but I don't think they issued they were a little bit late with it, so it has been released.

[Rep. Jed Lipsky (Clerk)]: December 2024? Yes,

[Ellen Tchaikowski, Office of Legislative Counsel]: but I don't think it came out until this summer. And they were quite busy with all the changes that had been happening.

[Rep. David Durfee (Chair)]: We were kept up to date last year. There was a couple of delays and I, at one point, had hoped that we would have the report and be able to look at it last year. It came out in June, I think, and it should be on our page. And a good time to plug, I think very helpful if all of us took the opportunity when we're not in the room here to just look at that report ahead of time before we get the presentation. That would be a good idea. It's more than a page. You'll need to set aside a little bit of time to look at it, but won't go on and on forever. Did you have anything else? That's it. Alan? Okay, questions.

[Rep. John O'Brien (Member)]: John? Our wood product manufacturers, do they come under the

[Rep. David Durfee (Chair)]: three acre rule for refrigeration? No,

[Ellen Tchaikowski, Office of Legislative Counsel]: because that's an ANR water rule, so I don't work on that.

[Rep. Jed Lipsky (Clerk)]: I have known no relief from this three acre. No relief? I am I'm not aware of any relief. We've had testimony in here by LSF Forest Products, outlet called Fletcher, a lot of money and time. And if it wasn't for he had known the cost, he allowed that particular patient, and that would have started with snow.

[Rep. John O'Brien (Member)]: But interesting that's a permit for that would have to go through, I are totally not one of these.

[Rep. David Durfee (Chair)]: And the language in 01/1981 there requesting the report, calls for a review not just of the Act two fifty permitting process, but more holistically, right? So ANR permitting, but also municipal permitting, theoretically. And we so these are two different topics, really. But yesterday, when we were looking at the municipal the Supreme Court ruling on municipal regulation of ag, we saw the statute, and you may have noticed that that's part A. And then part B of the statute is municipalities also can't regulate forestry operations, and C is silviculture. But wood product manufacturers are neither of those things. So if possible for towns also to be involved in permitting for sawmills or ship manufacturers.

[Rep. Jed Lipsky (Clerk)]: Alan, I guess we're not running low on time. I think it was your second slide

[Ellen Tchaikowski, Office of Legislative Counsel]: Oh, sure.

[Rep. Jed Lipsky (Clerk)]: Where you define sawmill as small sawmills wanna produce three and one half million board feet annually or cordwood producers who I just would like to see that. Sure.

[Rep. John O'Brien (Member)]: Yeah. So that thoughts. Yeah.

[Ellen Tchaikowski, Office of Legislative Counsel]: Right. So this is a specific and I'm not saying that that term is used any it's not used anywhere else in statute that these are small, but this was, in 2017, looking for how what were small operations that could go through a faster Act two fifty process? Okay. So

[Rep. Jed Lipsky (Clerk)]: let's say there are 2,000 or or 5,000 firewood producers in Vermont. Most of them are between 10 cords and a 100 cords. There are a few that do over 3,000, maybe two, Some of it do way most do way less than 3,500. So it's a big difference between a homeowner or an extended family or who made fireworks with a small splitter, sell it to their neighbor. All of those I mean, this is to get to your municipal law, bylaws. It's very easy for a neighbor to say, you know, I even can't stand the sound of a chainsaw in the morning. And they they could be subject not just under the short review by 02:50, but could also be impacted by a municipal noise ordinance or times to operation. By the way, there are tens of thousands of Vermonters typically higher to lower income that rely on cordwood and burning, You know? So some some of these to invest in a firewood processor, now it's wouldn't some $150,000, some are 90,000, some are 50,000. Invest in that, take a little and make a real operated on. The risk of being shut down, act two fifty, it's not like it's a big deal, but that law that we for the testimony on the wraps, you know, know, you're very vulnerable to a disgruntled neighbor or a town that's of some, you know, very repressive leadership. It's just an observation that Active fifty isn't the only devil in the world or the only potential threat to wood producers.

[Rep. David Durfee (Chair)]: So if while you've got it back up again, then if you would just, could you just go to Act 181, which is there, going to the report. Shall convene a stakeholder group to report on how to address permitting process. The groups will examine activity permitting and identify how the minor permitting process has been working. You may look at permitting holistically to understand the role of permits from ANR, this permits, I mean, see here, and actually 50 permits and develop recommendations. So this came out of those of us who were on the committee two years ago or on an adjacent committee will perhaps remember that we spent some time looking at ways to provide some relief to the products manufacturers for the Act two fifty process. And this was what came out of that. I remember. So yeah, again, I would say everybody take a look at that report when you have a chance, and then we'll be hearing quite a bit more about it from L. R. B, from the Land Use Review Board initially, and then we'll be hearing from other stakeholders too. Just, you know, for the record, I recall the World Caucus

[Rep. Jed Lipsky (Clerk)]: delivered testimony to exempt these three small categories. And I believe they went to the environment committee and that exemption was not there was no buy in by them. But this language is what came out of the environment committee and into what ultimately was act one eighty one, which we're still trying to get a handle on.

[Rep. David Durfee (Chair)]: Well, have Ellen here. Any questions, any other questions related to this topic? Representative Brian.

[Rep. John O'Brien (Member)]: So a new sawmill being built into town, looks like you might potentially need permits from all three of

[Ellen Tchaikowski, Office of Legislative Counsel]: those groups, right? Potentially, yes.

[Rep. David Durfee (Chair)]: Good. I don't think this is a question for Ellen, but I wanna when we pick this topic up again, curious to know about this who's actually qualifying for the minor permit process. So Jed, you seem to be suggesting that most firewood manufacturers were under that 3,500.

[Rep. Jed Lipsky (Clerk)]: I wouldn't say a 100% of them, but I'd say 90 foot. Yeah, yeah, yeah. 95%.

[Rep. David Durfee (Chair)]: And I'm wondering about mills, you know, how whether that it's a different number, four feet. Just again,

[Rep. Jed Lipsky (Clerk)]: going back forty five years, someone has produced 3,000,000 feet a year was a pretty good sized sawmill, they likely had a circular blade, there was a lot of flow of logs, all very local, you know, back when there were dozens in every county or hundreds of mills, now we're down to under 20 mills statewide, we've lost 98% of our manufacturing capacity, so those that remain are producing many of them over this. So that's the reality that site needs to disappear.

[Rep. John O'Brien (Member)]: Just, yeah, one more quick one. What was your slide if in the beginning it was defining?

[Ellen Tchaikowski, Office of Legislative Counsel]: These are the definitions that are used in these other provisions. Those defined items are not part of G. Right.

[Rep. John O'Brien (Member)]: But the slide before that. Yeah. So we're always interested in this committee because we have jurisdiction of both, Maplesaf, do you get to pick if you're a, say, representative Burtt and you have 25,000 taps at some point, this is a wood product operation.

[Ellen Tchaikowski, Office of Legislative Counsel]: I think it's farming.

[Rep. Jed Lipsky (Clerk)]: The sap part, think about the sap is a forest product. The syrup is an agronomy. So, I'm just wondering

[Rep. John O'Brien (Member)]: Do you know where that two

[Rep. Jed Lipsky (Clerk)]: fifty permit to put up a shed to the vacuum pump to draw a remote sugar bush?

[Rep. David Durfee (Chair)]: Yeah, I don't know. Not

[Ellen Tchaikowski, Office of Legislative Counsel]: necessarily. Not Put a sugar now.

[Rep. David Durfee (Chair)]: We've asked a question here. Let's let Consul answer.

[Ellen Tchaikowski, Office of Legislative Counsel]: I think I've had this conversation with you all multiple times. I think it's come up, and I think perhaps, you just explained. So, yes, maple sap falls under wood product, but there is a definition of farming, and it does include syrup. So just harvesting sap and turning it into syrup is considered farming. And so that is generally exempt from act two fifty. However, if once you start to get into further value added using that syrup in making a beverage or something, you're starting to get into the accessory on farm business realm. And I don't know if I don't know if anyone is using maple sap and having it not be considered an agricultural product. I don't know if there's someone not going down that route and then they would fall under this definition. I don't know.

[Rep. John O'Brien (Member)]: There are certainly lots of people who collect sap and sell it to somebody who does make it into maple syrup. So if you don't go the whole route to maple syrup, are you essentially in the forest world?

[Ellen Tchaikowski, Office of Legislative Counsel]: Oh, I'm not sure.

[Rep. David Durfee (Chair)]: You're a Christian. You're a

[Rep. John O'Brien (Member)]: You're Accessory health and business for other products, what about taking the Beyond syrup, like candy and sugar in it? Yeah. Is that still the same

[Rep. David Durfee (Chair)]: format? Same product, it's

[Rep. Jed Lipsky (Clerk)]: just a matter.

[Ellen Tchaikowski, Office of Legislative Counsel]: Well, and so agriculture. Yes. We've had we've had this conversation too because if you're using if the SAP you are using to make value added products like candy or something is primarily from your own farm, that then still the the processing and preparation of that into a product falls under farming. But the farther away or if you're from your farm or if you're taking in other people's sap, then that's when it starts to enter the accessory on farm business realm. But last year, you you did pass something to address that. Did make some amendments to that to further extend it. So, yes, we've talked about this.

[Rep. David Durfee (Chair)]: And we will probably talk about it next time you're in. Okay, good. Thank you very much. Will continue to have wood products manufacturers later in the week. And now we're gonna take a little break. We will be here

[Rep. Jed Lipsky (Clerk)]: pop