Vermont Legislature SmartTranscripts:

[Rep. Robin Scheu (Chair)]: Good afternoon. This is the House Appropriations Committee. It's Wednesday, 03/11/2026. It's just after No, it's not quite 02:30 in the afternoon. We took a quick break, and we're back to talk about age nine fifteen relating to an extended producer responsibility program for beverage containers. So we have Mike O'Grady from Legis Council. I'll have you go first, and then we'll have Ted talk about the fiscal note. We have Representative Morris from House Committee on Environment for other questions. So thanks for coming.

[Michael O'Grady (Office of Legislative Counsel)]: Sherik, how much detail do you want me to go into, and should I focus on the bill or section by section?

[Rep. Robin Scheu (Chair)]: Let's do this section by section. Sorry, that's the higher level. We'd like to give you a

[Rep. Eileen "Lynn" Dickinson (Member)]: little bit higher level.

[Michael O'Grady (Office of Legislative Counsel)]: All right. So generally, this bill would require manufacturers and distributors of beverage containers to form an extended producer responsibility program, those programs that are responsible for collecting and managing and disposing, recycling of materials that they sold but are no longer in use. This bill does not expand the scope of the current beverage container redemption system. You may recall a couple of years ago, was a bill that would have done that. This does not do that. It maintains that universe of containers as it is today. It also does not raise the deposit on the existing containers. It remains $05 for most containers and $0.15 for liquor. And it effectively shifts the responsibility for the management of those containers from any retailer, redemption center that is selling or is in the business of being a redemption center to the manufacturers and distributors may have requirements for collection, collection convenience, disposition, and such. Why the bill is in here is because it would move for four years money from the clean water funds to the solid waste management assistance account and the waste management assistance fund for grants to the producer responsibility organization that is going to run the extended producer responsibility program. Million dollars in the first two of those fiscal years, $750,000 in those last fifteen. And that money is going to be used to build out the infrastructure for collection disposition management underneath the producer responsibility plan.

[Rep. Robin Scheu (Chair)]: So this is moving money between special funds and no general fund is involved?

[Michael O'Grady (Office of Legislative Counsel)]: No general fund. It is taking that revenue that goes into the clean water fund. You know the multiple sources that go into it, and then redirecting how it would be used. Okay. That's generally what the bill does.

[Rep. Robin Scheu (Chair)]: Great. And we'll get the details on the money. So

[Michael O'Grady (Office of Legislative Counsel)]: section one is really amending all of the beverage container redemption chapter that's in existence today. The first change are the definitions. Again, beverage is what defines the scope of this chapter. It is not changing. It is remaining the same. Container is changing because right now there's an out. If you are made of biodegradable material, you technically are not subject to the container redemption system. And that's creating some peculiar containers. And so that's being removed. So all containers that contain a jurisdictional beverage are subject to the requirements. Distributor and manufacturer, I put the definition into the section by section just for your information. They are not changing. Then you get to section fifteen twenty two, the beverage container deposit. Again, it's not changing. There is a technical change right now. It says the deposit will be not less than 5¢, which makes people think

[Rep. Christy Morris (Springfield)]: it could

[Michael O'Grady (Office of Legislative Counsel)]: be more than 5¢. So we're striking the not less than, and it's just gonna say the deposit is 5¢ for that majority of beverage containers. One of the things that is changing is increasing the handling fee. Do you know what the handling fee is? So when the consumer goes to the retailer, the re the consumer pays the retailer that $05 The retailer has already paid the manufacturer the 5¢ for the deposit. When the consumer comes back, that 5¢ that the retailer collected from the consumer goes back to the consumer, and the retailer redemption center has that that used container. When the manufacturer and distributor comes to pick up that used container, they pay that retailer or redemption center a fee, and that fee is called the handling fee. And there are two amounts for the handling fee. One is when co mingle, when multiple manufacturers, distributors have agreed to allow for their containers to be commingled in production, and then the non commingled, where they're not part of that commingling agreement. Your redemption center has to individually sort the container at From the same redemption. Yes.

[Rep. Robin Scheu (Chair)]: Wayne, do you have a question about that? Yeah.

[Rep. Wayne Laroche (Member)]: Obviously, all the genes and bottles get collected. So the first $05 goes from somebody to somebody. So all those that don't get redeemed, who keeps that money? Where does that money reside?

[Michael O'Grady (Office of Legislative Counsel)]: So a few years ago, you addressed the sheets or the unclaimed beverage container deposits, and the responsibility for remitting that amount is on what's called the deposit initiator. It's effectively the manufacturer, the distributor is the one because they they initiate the deposit. They sell that container that has the deposit on it, pass it down to the consumer, and then pass it back up to them. And that is who pays the unclean beverage container. So it's paid to the treasurer, and the treasurer pays it into the clean water. Okay. So it's

[Rep. Wayne Laroche (Member)]: Oh, it goes into clean water fine?

[Rep. Robin Scheu (Chair)]: Yeah. Okay.

[Michael O'Grady (Office of Legislative Counsel)]: Can you move on?

[Rep. Robin Scheu (Chair)]: Yes. So

[Michael O'Grady (Office of Legislative Counsel)]: that handling fee for the non commingled is being increased

[Rep. Wayne Laroche (Member)]: from $04 to

[Michael O'Grady (Office of Legislative Counsel)]: $05 to incent manufacturers and distributors to go into a commingling program where the handling fee is only 3 and a half cents. And so that and it's just temporary because once the standard producer responsibility program is set up, there's not gonna be a handling fee. We'll talk about that in a minute. So there's, in section fifteen twenty two a, there's current rulemaking for the agency and specifics that they have to address. That's being repealed because it's no longer really relevant to the program, and it's definitely not gonna be relevant once the PRO, the extended responsibility program, is set up. Section fifteen twenty three is it changes to the requirements for acceptance of containers. Generally, the manufacturer distributor has a responsibility to pick up their containers and shall not refuse them unless there's an exemption that ANR issues. Those exemptions are there for a retailer to refuse to redeem beverage containers. So the stewardship plan meets the requirements of the act and that the retailer has 5,000 square feet or less. Once there's a plan, if you're in a small store, you don't need to redeem any. You also don't need to redeem if you are a manufacturer distributor yourself, and you are selling directly to the consumer, and you have 5,000 square feet or less. A vineyard, a small brewery, if they're selling directly and they're 5,000 square feet or less, they don't have to redeem. Okay. There's also changes to labeling. Generally, right now, you have to have a 5¢ that's that's indicated on your container plus the a designation of d t or Vermont. That is being clarified. One of the things ways that's being clarified is right now, it has to be on the top of the container. But you've probably seen containers like that water bottle right there that are aluminum that have small caps on top of that you can't fit all the information that's necessary on top of the cap in this in the size that is required. So they're allowing the label on the side or another approved method by ANR. And then another big one to help with redemption processing sorting is that every container will need to have a UPC code and barcode on it, which will allow for easier use of automatic equipment and automatic redemption. Section fifteen twenty seven looks like all new language related to liquor redemption. It's new language, but it's not new requirements. This is how DLL has been implementing liquor redemption. It's just nowhere in statute that this is what they do. So this is adding into statute what they are doing. They run their own redemption. They are required to go and collect the redeemed liquor bottles. They are required to pay 15¢ on the liquor bottle, and they are required to pay 3.5¢ in handling on the liquor bottle. That is not changing. It's just actually putting it in law. One of the things that is changing under this statute, it allows DLL, once the product stewardship organization is set up and they're implementing a plan, DLL can negotiate with that PRO, the product responsibility organization, to collect DLL's bottles. So if you have this infrastructure that's collecting all the other beverage containers and DLL thinks it's more effective, either cost effectively, manpower, human power, they can negotiate with the PRO to collect the liquor bottles for DLL. It's not a requirement. It's

[Rep. Eileen "Lynn" Dickinson (Member)]: It's not a

[Michael O'Grady (Office of Legislative Counsel)]: ordinary authorities. Section fifteen twenty nine, there's a requirement that if you're a redemption center, you have to re basically redeem more than 250,000 containers per year. Most redemption centers hit that, and it's not enforced, so it's being repealed. Section fifteen thirty one is the the requirement of the establishment of the producer responsibility organization. It provides that no manufacturer or distributor may sell or distribute a beverage container in the state without participating in that producer responsibility organization. And there's a full timeline for all of the dates. I'm not going to go through that, but it is here to roll out this program over time. So on or before 01/01/2027, the manufacturers apply to ANR for to establish the PRO, to establish the organization that's gonna run this program. ANR gets to approve based on the PRO has to be a nonprofit. PRO has to have the capacity to handle the program, and it can't create unreasonable barriers to participation by other manufacturers, which has happened in other programs. They don't like each other. They're like, you can't play in my playground. Like, oh, I want to play in your playground. All right. If you do, you have to pay me $100,000 You can't do that underneath this program. They have to maintain a website that lists all their brands and all the manufacturers under it and each beverage that's covered under it and the size of the container covered. If it doesn't meet the requirements, then ANR can dissolve the PRO. ANR has the ability to just say, you no longer are operating the PRO. And then ANR has authority to establish its own plan. If they establish their own plan, they assess all of the costs to the manufacturers and distributors plus a 10% penalty fee. So that is the incentive for the PROs to run their own program. Because if they don't, ANR dissolves it and charges them, charges them a penalty. Then on page three of the section by section, you come to fifteen thirty two, the stewardship plan and the minimum requirements under the plan. Whatever plan is adopted, it has to meet these requirements. It has to have a convenience of collection standard. And that those standards are at least three points of redemption per county, and at least one of those points of redemption has to provide for immediate return of the deposit. In addition, there has to be at least one point of redemption with in a population a town with a population of 7,000 or more, and that provides immediate return of the deposit. That's effectively the floor. But the plant also has to take efforts to site collection and other points of high population density that might not have 7,000 people. When the last bill went through and you had the debate about the convenience, Northfield was used as an example. It might not be 7,000, but it's still a high population density, especially when you consider students and etcetera. So that would be a site where a redemption collection site would be cited. But ANR has the authority to approve under the plan the reduction of redemption if there is determined to be duplication or redundancy of redemption in certain areas. So if you have say you're in South Burlington, and there's 17 grocery stores on Shelburne Road, ANR can say that all of them have to serve as a redemption site because there's just duplication and redundancy. But ANR has to approve it. If a PRO can't just go out there and stop redemption at a store it doesn't want to, ANR has to approve it. Under the plan, there has to be fair compensation for the redemption sites. Now remember I said there was a handling fee, but the handling fee is going away once the PRO is set up. This is what replaces the handling. This is how the handlers, the redemption setters, are going to be compensated. They will enter into compensation agreements with the with the PRO. And it may be more than what they were receiving under the handling fee. But in certain places, it might be less because of the volume or because of the infrastructure that's there at the ease. It's basically going to be something that will be a site by site or potentially region by region compensation agreement. ANR has to approve it. The PRO can't just go out and lo all of the redemption centers. ANR has to approve the compensation plan. And the PRO is supposed to use maximize the use of existing infrastructure when establishing collection points. Collection points have to meet certain standards. They have to be safe. They have to safely lit. They have to, be managed to ensure safety, and they have to comply with all applicable laws regarding solid waste and management of recyclables. The plan has to provide education to consumers about where collection is, how to engage the collection system, etcetera. The plan has to have a process for consultation with all stakeholders, redemption centers, retailers, solid waste, your municipal solid waste entities. Those will all be consulted as part of the stakeholder process. Then there's a reporting requirement. Manufacturers report no less than annually the PRO reports to ANR. A lot of information about the implementation of the program, its cost, where its collections are, convenience. How is it disposing or managing the containers that it collects? And then it has to manage their disposition. How are they managing environmental impacts, carbon, greenhouse gas emissions, what educational materials they're providing, and any other additional material that the agency requires. There's some timing for, implementation. So within ninety days of receipt of a proposed plan from PRO from the PRO, ANR needs to approve or or disapprove the plan. And then the PRO implements the plan not later than nine months after ANR approval. So you don't have a specific deadline date when this program is gonna be set because it's based on that timing of when PRO submits the plan, when ANR approves it, and then nine months later. But you're probably looking 2028, 2029. So there are audits. As with all EPR programs, there's an audit of how the program's operating and the fiscal aspects of the program. So audit of the program is an annual audit, and the fiscal audit is every five years. And you get that information from the PRO submitted directly to ANR, and ANR submits it to you. There is a a redemption rate goal under section fifteen thirty four. So beginning by 07/01/2029, the goal is to get to 75% of redemption. Right now, you're in that 70 to 72 range. And then by July 2032, the goal is to get to 80%. And then beginning 01/01/2029, ANR reports to you, the legislature, the redemption rate for liquor bottles and all other beverage containers. And at that time, they recommend to you whether or not to increase the deposit or to take any other actions to increase redemption rates. Previously, there was something called the automatic escalator. An automatic escalator automatically increased the deposit if you did not meet the redemption rates. That is not in this bill. Again, the deposit is not increasing underneath this bill. The only thing that could lead to that is ANR's recommendation to you, and then you would have to do that legislatively. Section fifteen thirty five, there's rulemaking. It's general rulemaking for the agency. It replaces the specific rulemaking that was really no longer relevant. Section fifteen thirty six on sec on page six of the section by section. When you have a bunch of people working together and talking about where they're selling or how they're implementing their program, that looks like collusion. And collusion is generally illegal. This allows those manufacturers and distributors to work together to form the PRO and not be subject to state antitrust law. But they are not immune from antitrust liability if they're price fixing or fixing where the product might be sold. So it's immunity for them working together for the PRO, not for anything outside of that. In addition, they always ask for federal immunity as well from federal antitrust laws. You can't provide that. So if somebody asks, well, why aren't they immune from federal law? Because you don't control that. Section two was amending ANR standard notice requirements. As you may know, ANR has different types of notice depending on the different type of permit or plan or activity that they're undertaking. This is going to be a type three notice. It's effectively what's used for general permits. There is, a public comment period, and ANR has to hold a public meeting. So this plan that's going to go out for the PRO is going to be subject to public review, comment, and a public meeting if someone requests the public meeting. Section three is the appropriation. First appropriation section. This is the Clean Water Fund. Fiscal year 2030 and 2031, 1,000,000 is transferred. Fiscal year 2032 and 2033, dollars 750,000 is transferred. Section four is where it is transferred into. There's a Waste Management Assistance Fund. This pays for multiple different types of waste management activities.

[Rep. Robin Scheu (Chair)]: That exists now.

[Michael O'Grady (Office of Legislative Counsel)]: That this exists. This is not a new special fund. So the waste management assistance fund is broken up into three different accounts, the hazardous waste account, solid waste account, and the e waste account. As you probably know, those are really jurisdictions because they don't really have accounts within special funds. But that's how this money is going it's being going to be managed specifically for solid waste management and then specifically for grants to the PRO to set up. And it's gonna be reimbursable grants. It's not proactive grants, reimbursable grants. The money that they're spending to set up the infrastructure for the program, manufacturer distributor has to apply to ANR for reimbursement of that expense, up to $1,000,000 in those first two fiscal years, up to $7.50 in the last two fiscal years. Is section five. There's just a report from the manufacturers and distributors about what they are collecting, the amount they collect, the location of the material, and what products material, the containers were recycled into. And then once the PRO is set up, ANR is no longer going to certify redemption centers. Because remember, the PRO is negotiating with redemption centers of who's going to be their redemption center, what the compensation is going to be. It's all going to be by contractor agreement underneath the plan. So no longer ANR no longer needs to certify those redemption centers. And then the act takes effect 07/01/2026, but then there's the timeline, which I won't go to.

[Rep. Robin Scheu (Chair)]: Wayne?

[Rep. Wayne Laroche (Member)]: What's the problem that this is intended to fix?

[Michael O'Grady (Office of Legislative Counsel)]: I think that depends on your perspective. If you were going to set up a program today to manage beverage containers, you probably wouldn't have

[Rep. Wayne Laroche (Member)]: a bottle deposit system. You would probably just have a

[Michael O'Grady (Office of Legislative Counsel)]: PRO. But when you look at the bottle deposit system, it has social and environmental benefits that are effectively ingrained in how beverage containers are managed today.

[Rep. Wayne Laroche (Member)]: It's a feel thing.

[Michael O'Grady (Office of Legislative Counsel)]: Well, it's not just a feel good thing. There was an analysis of 2015, was an analysis. There was just a recent analysis done by A and R. And they hire the expert on this subject to review the cost, the effectiveness, the future effectiveness. And that expert basically comes back with, you should probably continue the system with an EPR program. To shift cost, right now, your municipalities are taking on a lot of this cost. Your municipalities, even though the containers go back to redemption centers, a lot of them don't. And they go to your municipality, and your municipality has to manage it.

[Rep. Wayne Laroche (Member)]: So what are the PROs going to do with it?

[Michael O'Grady (Office of Legislative Counsel)]: What is the PRO?

[Rep. Wayne Laroche (Member)]: The new system, how will the when the product the can of bottle is to its final destination, will it be a new destination in a landfill or recycling? Well, mean, products being melted down and made into something new.

[Michael O'Grady (Office of Legislative Counsel)]: Well, ultimately, the the goal for disposition is for reuse, for recycling. But one of the things that and that's part of the plan. They have to identify what they're gonna do with it, and then they have to report to ANR and you about how what they've done with it. So you have monitoring and oversight of that. Most of the aluminum, most of the PET is reusable and recyclable. Glass is where you have a problem if it's dirty or if it's broken. One of the things about the redemption center system is that it it maintains those glass bottles containers in a cleaner form as more readily reusable or recyclable. So that's one thing that moving more into the redemption center and out of your municipal solid waste will be helpful in an environmental way.

[Rep. Wayne Laroche (Member)]: Do they have any assessment of what the additional cost would be to industry? Because obviously, if it costs more, if they have to do more things and it's costing the industry more, they're going pass that on. It's going cost all of

[Michael O'Grady (Office of Legislative Counsel)]: us more. Well, that's partly why you're giving them these reimbursable grants to help set up the system to offset some of the costs for the manufacturers and the producers as they set up the infrastructure. Once the infrastructure gets out there and there's some crazy stuff that's out there right now. It's like you've probably gone to a grocery store and seen the automatic ones where you basically stick your hand in there and you're worried your hand's going to get redeemed. But now they have these ones that are like big commercial washing machines. You open a big door. You just throw a whole bag in there. You close the door. It takes ten seconds, and you get a slip. And you've just redeemed everything. You're not waiting in line. You're not waiting for somebody to go through your stuff and do the sort.

[Rep. Wayne Laroche (Member)]: What's the cost for all that equipment? Do it do ramps or something? Well, PRO is probably going to

[Michael O'Grady (Office of Legislative Counsel)]: want to own that equipment. And so they'll probably work with the redemption centers about agreements on where it is, how it's going to be maintained, etcetera. Obviously, my concern is increasing costs of doing it. For the manufacturer and distributor, it's extra cost. And I don't think anyone denies that. And will it be passed back to the consumer? That's economics. But I will say I've drafted all of the EPR bills. One of the first was the e waste bill. And people were like, televisions are going to be like $500 more in Vermont than they are in New Hampshire. Televisions are like $150 at Costco right now. It didn't shift the market or the price because of the regional nature of that product. It didn't change the price that much, if at all. And you're probably going to have a dynamic here because even though this is just for Vermont, this PRO program, New York has a deposit. Maine has a deposit. Maine has basically a producer responsibility program. Massachusetts has a deposit. Connecticut has a deposit. The product is sold and manufactured on a regional wide region wide basis. New Hampshire is your outlier. Don't yes, it will be assumed by the manufacturer or distributor. Will it be then charged out specifically to Vermont? I don't think so. I think if there's going to be a price increase, it will be a regional increase.

[Rep. Wayne Laroche (Member)]: No testimony from the

[Michael O'Grady (Office of Legislative Counsel)]: No, they testified. They definitely testified

[Rep. Wayne Laroche (Member)]: Oh, I couldn't hear you. From the businesses.

[Michael O'Grady (Office of Legislative Counsel)]: They testified. They are I'm not going to characterize their support, but they are not opposing this. Not opposing.

[Rep. Wayne Laroche (Member)]: Okay, thanks.

[Rep. Robin Scheu (Chair)]: Lynn, do you have a question? Yeah, when we did a few years ago do an upgrade or I'm not sure if passed or not. We talked about modernizing the bottle bill. Been a lot of efforts put in previous to that, a lot of money spent by solid waste collectors or universal recycling program that put a lot of millions of dollars worth of stuff in there. So we don't have to separate stuff at home.

[Rep. Eileen "Lynn" Dickinson (Member)]: You just all fill it in. That's what they were going to do. And the argument at the time, if I recall, was that because that was actually more effective and probably these people who had, I mean, Casella and others, had gone and spent this money to go and modernize the whole recycling process in a way that would be more efficient and better, that the bottle bill was sort of the redemption logic was not exactly the best way to go. It was not going to be more efficient, cleaner, any of that other stuff. Now, did that bomb bill actually go through? Or did I hear you earlier say that it did not pass and we still have what we always have had?

[Michael O'Grady (Office of Legislative Counsel)]: You enacted it. You well, the House and the Senate passed it, the governor vetoed

[Rep. Eileen "Lynn" Dickinson (Member)]: Okay, so it's not in effect.

[Michael O'Grady (Office of Legislative Counsel)]: It's not in effect. But this is different for the rule, and it's different in a couple of different ways, one of which is it's not expanding the scope of the universe of containers, which each one had And tried to that would have diverted a significant amount of material that's managed at the solid waste management level by installers, Kascela and their MRF, Jaduneau County and their MRF. We're the diverted material away from those facilities, those collectors. But that material is not going anywhere because it's not subject to the deposit. It's not going to be part of this program. It's going to still remain in existing collection conditions. Is that the solid waste system?

[Rep. Christy Morris (Springfield)]: Yes. Yes.

[Michael O'Grady (Office of Legislative Counsel)]: So your solid waste management districts will not be losing the PET that they collect from juice bottles or iced tea bottles or aluminum from hard cider or energy drinks that are not carbonated. And so that material remains in that system, as do the abandoned containers that are subject to the deposit remain in that system. Will this provide an incentive for more people to actually redeem those containers that have a deposit? It may. It may be easier, because right now, there are what are called redemption deserts, where you can't redeem something convenient that you have to drive distances and wait in order to redeem. And that takes away an incentive to do it, because it's transportation time, etcetera. With these convenience standards, at least three per county, at least one per population center of 7,000 or more, there should not be redemption deficits. Okay, I'm confused.

[Rep. Eileen "Lynn" Dickinson (Member)]: This bill does not let's go back. We did not have water bottles even in the bottle, some of those things that you mentioned. They were never included in the original bottle bill.

[Michael O'Grady (Office of Legislative Counsel)]: Never included.

[Rep. Eileen "Lynn" Dickinson (Member)]: They were not included after the governor vetoed that bill, although that was one of the goals of that bottle bill. This will not include them either. Correct. Okay. So why are we not including them? Or how is that solving the solid waste issue?

[Michael O'Grady (Office of Legislative Counsel)]: We are not including them because the solid waste management haulers and the solid waste management entity subjected to that the last time you tried to do that.

[Rep. Eileen "Lynn" Dickinson (Member)]: Okay. And their recycling system that they have, the universal

[Michael O'Grady (Office of Legislative Counsel)]: Continues as it is.

[Rep. Eileen "Lynn" Dickinson (Member)]: And they're still doing that, and they will continue to do that under this. Yeah.

[Rep. Wayne Laroche (Member)]: Thank you.

[Rep. Robin Scheu (Chair)]: Probably let Ted talk about the fiscal note. We'll give Mike a break.

[Ted (Joint Fiscal Office analyst)]: Today, I will cover some of the same grounds. Teppro net during fiscal office. Y'all should have a fiscal note. I will jump straight to our fiscal impact section of the note. And the main headline here is the transfers from the Clean Water Fund to the Solid Waste Management Assistance account, and those transfers would be up to $1,000,000 in fiscal years 2030 and 2031 and up to $750,000 in fiscal years 2032 and 2033 for a grand total of up to $3,500,000 right in the clean water fund. That means that within those years, the clean water fund would have less available funds to do various projects. So the one could argue this within a similar jurisdiction. Also want to, in the fiscal note, did spend a little time thinking about whether the system would increase convenience and whether that would decrease the amount of unclaimed bottle deposits. People were claiming those bottle deposits because they had a reduction, I know that was more convenient to them. We all reduced the deserts. In keeping with the report commissioned by ANR, they did not do any modeling on changes in behavior. So we're following that lead. And we'll also note that in the near term, current redemption, there's a goal of 75%. We're currently in the low 70s, so there's not a large forecasted increase, at least in the statutory goals, until you get to 80%. So saying that there could be some reduction in SG revenue from increased convenience, but it's not we weren't able to put a number on it. Would also want to flag that for ANR, if for whatever reason a producer responsibility organization is not formed or ANR felt that the PRO did not meet their standards, they could dissolve it, in which case ANR would be responsible. And within the bill, they would be able to receive compensation from beverage manufacturers and that 10% penalty, and that you would see that the amount that they're charging those producers in their budget request, and that's where it would show up. So just flagging, but then if that were to come to pass, you all would see it in the future, but not a guarantee. And then if we're really dotting our Is and crossing our Ts, although the bill enshrines how Liquor and Lottery currently manages bottles, if the PRO happens to be more efficient than the contractor they currently use, they could see cost savings. So from a budgetary standpoint, that frees up resources they could use in other areas of their budget. Those are kind of the main fiscal impacts. I'm happy to talk about big picture historical SGT revenues, how SGTs fit into the Clean Water Fund, some very high level, the magnitude of the Clean Water Fund budget in fiscal year twenty seven, if that'd be helpful for the committee or they could just be for reference in the fiscal note.

[Rep. Robin Scheu (Chair)]: Yeah I remember having the conversation about Essex when I was in ways and means and what we're going to do it plus we all sat around the Trinity table practicing how to say Essex. I I'm still saying it correctly but I think that's how you

[Michael O'Grady (Office of Legislative Counsel)]: say it. I stopped using it because I was saying it incorrectly. Yeah.

[Rep. Robin Scheu (Chair)]: We had quite the conversation around them. But have they always gone into the Clean Water Fund or did we switch that a few years ago?

[Rep. Wayne Laroche (Member)]: I don't remember. Do you

[Ted (Joint Fiscal Office analyst)]: know the exact date? It was '27. Somewhere in the twenty teens.

[Michael O'Grady (Office of Legislative Counsel)]: Yeah. But yes. Yes, you put it into the Clean Water Fund. There were efforts before then to put it into the Waste Management Fund, but those never passed. But remember, EPA was looking for a dedicated funding source for the TMDL and for Champlain and MethylMAGOD, and you were trying to build enough revenue for the Clean Water Fund for that. And this is one of those sources. Right. And so

[Rep. Robin Scheu (Chair)]: but there's a clear nexus between, because it's his sheets from bottle with his program. So that makes sense to me that that's where you're choosing. And so I'm wondering if it's clear or what the conversation was around what isn't going to get done on the clean water side because this money is going over.

[Michael O'Grady (Office of Legislative Counsel)]: Well, that's an annual process. Remember, the clean water isn't effectively standalone. It's not like many other special funds where they have the authority to issue grants from the fund. They have the authority to effectively develop a budget from year to year that they recommend to the administration and they recommend to you. And then you choose how those funds are going to be spent in your appropriation process. The effect of that is probably in an appropriation sense. It's one year after each fiscal year because the money comes in. You're paying out in fiscal year 'twenty seven what you have put in from the Clean Water Fund in 'twenty six. And so the effect of this is going to be shifted a year down the road. And how it's spent, what's left in the Clean Water Fund, that will be up to you, what you forgo or not. You usually accept the recommendations of a clean water.

[Rep. Robin Scheu (Chair)]: And they don't spend it all down every year.

[Michael O'Grady (Office of Legislative Counsel)]: There's no No, they don't. At all. They try to keep the reserve. And I don't recall the exact number this year that's in the Clean Water Fund. It?

[Ted (Joint Fiscal Office analyst)]: For fiscal year 'twenty seven, it's $45,200,000

[Rep. Robin Scheu (Chair)]: Got it. 45,200,000.0 Okay. Wayne, as in wind?

[Rep. Wayne Laroche (Member)]: Yes, major projects in that Clean Water Fund. I assume those are going for I think, storm water. It's

[Michael O'Grady (Office of Legislative Counsel)]: agriculture, it's storm water, it's roads.

[Rep. Wayne Laroche (Member)]: All those big things that are really causing us a big problem that we need to deal with.

[Michael O'Grady (Office of Legislative Counsel)]: And programs are statewide. They're not

[Rep. Wayne Laroche (Member)]: just Michael, again, is looking at this and seeing where's the benefit? Where's the big benefit? Where's the cost benefit? And when we get clean water funding, things that we really need to be addressed, that makes me a little nervous. If there was a clear you could say, look, it's going to be cheaper. We're going to save money by doing this, or we're going to take all this out of the stream and it's all going to be recycled in a nice package so that we can get back as new products and give me a letter sheet saying, Okay, here's the estimated profit we're going get out of this. I'd feel better about it, but this seems squishy to me. Well,

[Michael O'Grady (Office of Legislative Counsel)]: I mean, I'm trending a little bit off leash here, but We

[Rep. Robin Scheu (Chair)]: can have a committee member speak about it if that would be more appropriate.

[Michael O'Grady (Office of Legislative Counsel)]: But my my response is, the million dollars in two fiscal years, so moving the fund from 45,000,000 to 44,000,000 for two fiscal years, and then just under or just over 44,000,000 for two fiscal years. And you're setting up a collection and redemption system that has mandatory convenience, mandatory standards, easier redemption because you have UPC and barcode, easier redemption because you're going to have automatic redemption infrastructure. You're shifting costs from the municipalities. And that's effectively what it will do.

[Rep. Eileen "Lynn" Dickinson (Member)]: Liz, and then, Marty, if can. Yeah. Thank you. I'm just trying to find out what the sources of the solid waste fund is.

[Michael O'Grady (Office of Legislative Counsel)]: So there's the solid waste management tipping fee, really a tax.

[Rep. Eileen "Lynn" Dickinson (Member)]: That's over waste collectors.

[Michael O'Grady (Office of Legislative Counsel)]: It's really on what they

[Rep. Wayne Laroche (Member)]: deliver to the landfill.

[Michael O'Grady (Office of Legislative Counsel)]: And then there's a solid waste franchise tax.

[Rep. Eileen "Lynn" Dickinson (Member)]: How much money do they have?

[Michael O'Grady (Office of Legislative Counsel)]: Oh, I don't know how much the Waste Management Assistance Fund has.

[Ted (Joint Fiscal Office analyst)]: I can probably pull it up in thirty seconds.

[Rep. Eileen "Lynn" Dickinson (Member)]: Have concerns about the Clean Water Fund.

[Rep. Robin Scheu (Chair)]: We can't hear you back here because I

[Rep. Eileen "Lynn" Dickinson (Member)]: have concerns about the Clean Water Fund. I know, I work hard to try to get money into that fund, which council members, and I have concerns because I agree with Representative Rush. I live, or I represent St. Aldis Bay, which is a major, major concern of Lake Champlain in our community. And there's a lot of things that we have worked on across all sectors of our area to go and improve that, but there's still a lot to be done. And this whole thing looks, pardon my expression, convoluted. And then you're going to take money from the Clean Water Fund in addition to that. And I'm not sure that

[Rep. Robin Scheu (Chair)]: it's going to make better. That's my understanding. We will have Representative Morris come to the table in advance since the committee had this conversation, but I want finish up further questions before we get them over to you.

[Rep. Thomas Stevens (Member)]: Well, mine is just a confirmation. After the two years of this transfer of money in order to allow the PRA to get moved, do the Essex go back to the Clean Water Fund or they do not go at all?

[Michael O'Grady (Office of Legislative Counsel)]: Oh, they go back.

[Rep. Thomas Stevens (Member)]: But if they continue on their current process. So the Clean Water Fund will get the Isheet's money after this new thing gets Yeah.

[Michael O'Grady (Office of Legislative Counsel)]: Ted, it

[Rep. Robin Scheu (Chair)]: was a

[Michael O'Grady (Office of Legislative Counsel)]: 2.8 the sheets.

[Ted (Joint Fiscal Office analyst)]: It's here. Low threes. Let me see. It is 2.83 or sorry, in actual $2,000,000

[Rep. Thomas Stevens (Member)]: a year.

[Rep. Wayne Laroche (Member)]: So what would be the total dollars that water fund would not get during period of time that

[Rep. Eileen "Lynn" Dickinson (Member)]: Actually, the Gold School is at one point.

[Michael O'Grady (Office of Legislative Counsel)]: Over four fiscal years it's 3,500,000

[Rep. Robin Scheu (Chair)]: get started. Plus they have all the other money.

[Michael O'Grady (Office of Legislative Counsel)]: So that's that's the same thing. The the the $3.25 and a sheet is what you're giving to the PRO to reimburse their cost to set up the system.

[Rep. Thomas Stevens (Member)]: For the two years?

[Rep. Wayne Laroche (Member)]: For the four years. 3.5 is changing. Okay.

[Michael O'Grady (Office of Legislative Counsel)]: On a total clean water fund

[Rep. Wayne Laroche (Member)]: It's 2.5.

[Michael O'Grady (Office of Legislative Counsel)]: Of, well, 45 per year.

[Rep. Robin Scheu (Chair)]: So 180

[Michael O'Grady (Office of Legislative Counsel)]: total over four years. 3.5 out of 180 over four years.

[Rep. Robin Scheu (Chair)]: All right, I think we can get rep Morris to, don't any of you leave, but rep Morris up here to talk a little bit more about the thinking around this. I leave the Oh, okay. Yeah. Have a Yeah.

[Ted (Joint Fiscal Office analyst)]: Madam chair, before I hop out of the Yes.

[Rep. Robin Scheu (Chair)]: Can just that's fine.

[Ted (Joint Fiscal Office analyst)]: The Waste Management Assistance Fund in fiscal year twenty five received just over $5,000,000 of revenue.

[Rep. Robin Scheu (Chair)]: Okay. From

[Ted (Joint Fiscal Office analyst)]: the tipping fee and franchise tax.

[Rep. Robin Scheu (Chair)]: Okay. Do they spend an amount every year?

[Ted (Joint Fiscal Office analyst)]: They spent a little over 7,000,000 because they received 1 and a half in other sources. I don't know what those other sources are. Yes, the funded problem.

[Rep. Robin Scheu (Chair)]: Down to zero every time?

[Ted (Joint Fiscal Office analyst)]: They ended up with us $800,000 on balance at the '25. So yeah, they're

[Rep. Robin Scheu (Chair)]: They don't have the kind of money the other fund is. Okay.

[Michael O'Grady (Office of Legislative Counsel)]: So you allow transfers between a hazardous waste into a solid waste, solid waste

[Rep. Wayne Laroche (Member)]: is the ocular one because that's

[Michael O'Grady (Office of Legislative Counsel)]: what is used to provide grants to your local solid waste management. Right.

[Rep. Robin Scheu (Chair)]: Okay, thank you. Yeah, don't leave, Representative Morris, thank you for joining us. If you want to introduce yourself and maybe just tell us a little bit about the sort of committee thinking around this bill.

[Rep. Christy Morris (Springfield)]: Thank you, madam chair. For the record, Christy Morris, a representative from Springfield, North Springfield. It's all one community, but North Springfield's kind of partial to their their title.

[Rep. Robin Scheu (Chair)]: They like their special designation. So

[Rep. Christy Morris (Springfield)]: the the thinking of the committee is and I've been listening to the question, and it's correct. There are two systems in the state. The redemption system, and there's the recycle system with the Casellas in the Chittenden County, Murriff, etcetera. Our two system. Arguably, they're both important to our communities, without a doubt. I come from a depressed economy town, Springfield. It has been for years since the machine tool industrial was built. And if you're going to hire one of the trash haulers to pick up your trash, there's a fee for that, and then the recycled materials, blue bins, if I can use that word. There's no cost for that, but you're picking up your trash. And the last I heard, that was like $35 a month. So there's a lot of my community that would struggle with that. And we have egregious properties right now that the town is dealing with trash and litter, not litter so much, but just piles and piles of stuff. So this program is not going to necessarily help that, but I just want to recognize that there's two systems. And if you're in favor of one, you may not be in favor of the other. If it's vice versa, you like the idea of redemption and taking your cans and bottles back to the stores or the redemption centers. And yes, it can be a feel good thing. I heard that comment. But it is keeping the materials of off our roadsides. Is keeping it out of our trash landfill, our one and only landfill. It is keeping materials out. The other thing that we've tried to do with the past two bienniums is that we've tried to assist or stand up redemption centers by Let me back up a step. There's only one way that a redemption center can make more money. And that's through the handling fee that the producer responsibility organization pays or the manufacturer distributors pays them through the bill. So they've been struggling for a number of years. Wages go up, cost of operation goes up. And that's not untrue with the zero sorter or single stream sort, Bluemins. Their costs go up. So here we are with a second entity, the redemption center, that I struggle. And we tried to ask to buy any homes to increase the number of containers, including water bottles, etcetera, juice bottles, etcetera, and that had failed. We tried the last time to increase the deposit amount to 10¢, and and that failed. So the support we've tried to do for our redemption centers has been problematic and a little frustrating for them because some of them, they're saying they can't continue to operate. It's like education. The costs just keep going up, but the revenue is not coming in. Now you do the math on that and some of them can be in danger and some of them have been. So for the interim, increasing the non commingling fee from $04 to $05 is going to help them in the interim. The PRO is charged with setting up this program. Arguably, there could be a cost to that. Absolutely. I think Michael O'Grady spoke very well to what we've seen with other programs, the paint program, the battery program, the electronics program, hazardous material program. And all of those programs have one thing to come. It's putting responsibility back on the manufacturers and distributors. And that's probably where it should be. I'd like to remind the committee that we still only have the one landfill in Coventry, Vermont. And we've heard that that's could be, arguably, close to end of life. Maybe twenty years, maybe whatever. I'm not gonna I'm not gonna guess. So this program is a way of getting more materials, cleaner materials that the industry prefers to have back for recycle reuse. And there are programs that are being stood up around the country, and I'm not familiar with where they all are. The recycle or solid waste districts, they transfer their materials elsewhere. They get collected. And that depends on the market, of course, whether pricing is up or pricing is down. The one advantage they have is if tipping fees go up or if the cost of collection goes up from consumers, they increase their rates. Redemption centers don't have that luxury right now. So this is a way to get the producer responsibility organizations to stand up the program, the stewardship plan, and modernize this hand sorting of containers, which can, we've heard, can be over 150 different sorts, up to 200 different sorts, which is just think about that. If you're the person that's sorting the

[Rep. Robin Scheu (Chair)]: It's like the mail, the post office. Never thought. Do that in my town.

[Rep. Christy Morris (Springfield)]: Yeah. And the other thing is So this plan would charge them with modernizing it. And that is why the contribution from the Clean Water Fund for four years is to incentivize them to modernize the equipment into our stores. And I think you've all seen the reverse spending machines that Michael was speaking to in your stores.

[Rep. Robin Scheu (Chair)]: Just stick your hand in and

[Rep. Christy Morris (Springfield)]: don't get it out. Thomas got mine out so far.

[Rep. Robin Scheu (Chair)]: We have an extra hand over here, I think, Dave, because

[Rep. Christy Morris (Springfield)]: There are other benefits to the redemption system, redemption center system, and that is the employees that that they have. They're not necessarily high paying jobs, they're limited on staffing that they can get. That's important to income for these people, albeit it may not be to the level that some of us would work for. However, it is a benefit to the number of employees that are employed within the redemption centers around the total state. Charging the PROs with modernizing and enhancing our current locations, as well as putting in new locations. So for instance, we've heard in the Northeast Kingdom, it may be slim pickings to try to find a redemption center within proximal distance. This program is charging them with standing up additional locations using the existing infrastructure, so that's our current redemption centers, and then modernizing them to reduce the number of stores, which is labor intensive, to incentivize co mingling so that distributors and manufacturers enable containers to be bagged together. And then also there's an incentive in there for distributors and manufacturers to pick up the containers more often. That has been problematic in

[Ted (Joint Fiscal Office analyst)]: the past. I think we've all heard that.

[Rep. Christy Morris (Springfield)]: So it is a valuable program if you believe in redemption.

[Rep. Robin Scheu (Chair)]: I'm sorry, all believe in redemption.

[Rep. Christy Morris (Springfield)]: At some point, we're all

[Rep. Robin Scheu (Chair)]: You're not going to vote on that.

[Rep. Christy Morris (Springfield)]: Sorry. The other benefit is we're all aware of local sports teams or scout entities or there's other programs that collect the bottles for deposits to fund them. So if that goes away, who does that fall back on? Your communities or other entrepreneurs or businesses within your town? It's a small benefit, but it is a good benefit.

[Rep. Robin Scheu (Chair)]: For lots of kids groups, yeah, that's a good point.

[Rep. Christy Morris (Springfield)]: So we feel it is important that redemption remain in place. Container redemption remain in place. We're not asking for additional deposit fees on the containers. We're not adding in other containers. And those efforts have failed the last two by any means. And we're hopeful that this is just a small step. Put the responsibility back on the distributors and manufacturers for managing our waste, which has been successful with these other programs that I mentioned earlier.

[Rep. Robin Scheu (Chair)]: Great. Thank you for giving us a little more of that background. Any other questions for folks here? We're not going to vote on this today, but we wanted to hear it all. We'll vote the next, I don't know when. I get my messages from upstairs and their side group are going to vote. They've got a lot of bills they're trying to figure out the timing of. We So often hear bills and then we vote on them a couple of days later.

[Rep. Christy Morris (Springfield)]: I appreciate the opportunity to testify. I happen to think this is the second best room in the State House. Yep. I don't know where the first one is. Thank

[Rep. Robin Scheu (Chair)]: you for coming. We're glad to. Thank you for yourself. Yeah. That they do have a nice view. You have a view. It's the people.

[Michael O'Grady (Office of Legislative Counsel)]: It's the people.

[Rep. Robin Scheu (Chair)]: Mike and Ted, thank you very much. It sounds like we're good. Thank you, Chris. So, I know Tom has to go, but committee I guess we have a couple of minutes. So, tomorrow I need to find the right page. We are going to vote on eightfourteen tomorrow. That was the neuro artificial intelligence. Wayne's coming in with the microchip.

[Rep. Thomas Stevens (Member)]: We may

[Rep. Robin Scheu (Chair)]: vote on the parole board tomorrow. That's five fifty nine, 08:14. We're going to walk through the landlord tenant bill. We're going to hear the greenhouse gas inventory bill. We think we're going to have an amendment and vote on 06:60 in the afternoon. That's the opioid settlement fund. So it's another bill day with breaks built in so you can keep working on your priorities. You can use this afternoon to work on your priorities as well. If you need to go to the floor, that's fine. If you don't need to go to the floor, that's your choice. We aren't required, except if you have constituents or reporting Yeah, your but we're

[Michael O'Grady (Office of Legislative Counsel)]: done here.

[Rep. Robin Scheu (Chair)]: We're done in here for the dinner. Okay, yes. So, I think that's it. And we start tomorrow at what time do we start? 09:45 I don't know how we've discussed I'll text you if we do something at nine or 09:30 That means nobody should be late because it's really late that we're starting