Vermont Legislature SmartTranscripts:

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Good afternoon, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Thursday, 02/19/2026 at 01:02 in the afternoon. So we're beginning our day in the committee today with H-two zero five, which is an act relating to agreements not to compete. So we have our legislative councils scoping that meeting with us. Haven't quite gotten to the point yet, have you thought?

[Sophie Sedatney (Office of Legislative Counsel)]: No. We're getting there, though. So, good afternoon, Sophie Sedatney for the Office of Legislative Council. Can I go ahead and share my screen? Yes. We're on Draft 4.2, and this incorporates changes that were discussed when the committee last took the bill out last week. So, again, this bill covers would add two sections to the Fair Employment Practices Act, one dealing with agreements not to compete and the other with stay or pay provisions. I'm assuming you're all pretty familiar with it at this point, so I'm just gonna move forward to where the changes are. So there was a change to the health care provider definition. A person licensed, certified or authorised by law to provide professional health care services in the state to an individual during the individual's medical care, treatment or confinement. There had been a question raised about device, the previous definition we had in there. Non solicitation agreements. So again, non solicitation agreements are not agreements not to compete. There's a one year duration. They have to be You can't solicit or recruit your former employers, employees, or steal their customer list and do direct solicitation. And then there's an exception on the non solicitation piece. And it provides now it is limited just to health care providers. Before, it had other categories in here. But now it just simply provides that for employees separating health care provider employees separated from their employment, they're permitted to provide notice of their change of employment to the individuals that they previously provided direct health care to. And the notice will include the fact that they're continuing to practice their profession, their new professional contact information and the individual's right to choose a provider. So again, the big change there is less on that, but just the fact that it's now focused solely on the health care provider.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: I I it seems to my concern is someone can meet these guidelines and then proceed into a solicitation.

[Justin McCabe (General Counsel, OnLogic)]: Is that something we're dealing with later in the bill? Or

[Sophie Sedatney (Office of Legislative Counsel)]: I think the general solicitation is prohibited. This is simply just allowing health care providers just to notify those individuals that they have a direct patient provider relationship with that they've now you know, they're now operating out of this particular building or practice. I think the concern was that often people go, they see a provider, they show up for their appointment, and they're told that provider is no longer here. Well, where are they? What are doing? We can't tell you. You know? So it's it's more that experience that it's seeking to address so that if you have a direct relationship with a patient, you are permitted under this to notify them. But, again, this is not it's just a shame that it wouldn't be a violation to let those individuals know. Not that you could, again, take the full client database of your previous employer and send

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: them no solicitation is just established in general for everything. Right.

[Sophie Sedatney (Office of Legislative Counsel)]: You can have a non solicitation. Right. And then this gets into so, again, we have exceptions. This is the prohibition on noncompete agreements, and then there's a list of exceptions. And, again, some of these have not changed at all. But, again, if you're selling an individual's ownership interest in a business, dissolution of a partnership, dissolution of a limited liability company, a severance agreement, again, provided that it's reasonable in its scope. And then there's a new subsection five. This is an agreement permitted under rules approved by the Securities and Exchange Commission. There was a concern around financial advisers, when they leave their employment, if they're retiring, that there are agreements not to compete. If they're retiring, they have to, like, retire in order to continue to receive commissions and names. So this would cover agreements that are permitted under rules approved by the Securities and Exchange Commission. And then number six is the one that we've been the committee's been going back and forth with many times. The number has changed, but this now provides, again, for an exempt employee, so this doesn't you're not allowed to have an agreement not to compete with with non exempt employees, which again are your lowest paid, typically hourly workers. But with an exempt employee, you can have an agreement not to compete if it meets each of the following criteria. So it's individually negotiated. The employee earns at least 250% of the state minimum wage, which currently would put it at around $75,000. And then this is the new language: the agreement is necessary to protect a significant business interest of the employer other than an interest in preventing ordinary competition where the employee's subsequent employment would inherently result in a material risk to the employer's business. And then you would have the same catch all that, again, it has to be reasonable in time, geographical area and scope as laid out in the previous subsection. So that's I mean, this is one of the sort of more hotly contested pieces of the bill. So that's where it currently is. Just if there's any Questions on that?

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: Is is ordinary competition a broadly understood notion?

[Sophie Sedatney (Office of Legislative Counsel)]: I really can't answer that. This is just proposed language that's being provided. I think the notion is that you can't stop somebody, have a non compete in order to prevent someone from just opening up a similar business or whatever. This is more The challenge has been, I think, with this particular language is around how do we balance individuals that are highly compensated. They're in a position to do individual negotiation. They're sophisticated people, they can negotiate contracts with also people that are lower paid but are working for a start up or have this very key information but maybe don't have the high salary. Because a lot of states will have a salary threshold just say you can have a non compete if someone's earning above a certain amount. And I think that's where the committee's been wrestling, is how to tackle this.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: It's not a phrase that is very common elsewhere in statute. But that's sort of

[Sophie Sedatney (Office of Legislative Counsel)]: the question there.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: As far as

[Sophie Sedatney (Office of Legislative Counsel)]: I know, it's statute. Yes. Not that I'm aware of.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: And

[Sophie Sedatney (Office of Legislative Counsel)]: then again, there were some tweaks around the health care providers. There is, notwithstanding subdivision d, notwithstanding all those exceptions, this essentially provides that you cannot have agreements not to compete in health care services. So and then the language was tweaked a little bit, which is a lot of providing in. But regarding the provider's provision of health care services in this state shall be void and unenforceable and against public policy if the contract or agreement includes any restriction of the right of such health care provider to provide health care services in any geographical area for any period of time after the termination of such partnership, employment or professional relationship with respect to such restriction and makes the agreement subject to the laws of another state, or requires any litigation arising out of the agreement to be conducted in another state. And again, this is focused solely on healthcare providers at this point. And then these are just technical corrections with the change in the numbering. Before there was language, this is the definition of a stay or pay provision. There was some language before in terms of other contracts, and that language has now gone away. So the and is added in here. So it it's a more restricted there was a concern about loans that could be made to employees, you know, who work for banks, etcetera. So now a stay or pay definition includes training repayment provisions, educational repayment contracts, quit fees, damages clauses, sign on bonuses, relocation expenses, and other types of cash payments tied to a mandatory stay period, but it removes the more general language that was was previously in the bill. And I believe that did all of them. Yep. Alright.

[Rowan Halper (Policy Director, Vermont Department of Labor)]: Good afternoon. Good to see everybody. Thank you very much for having me here. I'm for the record, I'm Rowan Halper. I'm the policy director at the Department of Labor. And my understanding is you've asked me here just to talk a little bit about rating workplace posters, which is what the department does. We have a partnership with the attorney general's office. They very frequently enforce a lot of the posters that we have that we've created that employers are required to post in their workplaces. So we have a partnership in that sense, we're the ones who create them. Typically, what we do is and in this case, we'll do is before July 1, which is when would go into which is when this would be enacted if it were passed, we gather all the information on the two different subjects, both the agreed not to compete and then the stay or pay provision. Our wage and hour division would distill it to make sure it's accessible, make sure it's understandable by the public, by employees in workplace. We create a poster. It would go through, you know, multiple revisions. We'd have to make sure the commissioner is okay with the poster, make sure all the information is accurate. And then we typically post it to our website. And so it meets all accessibility concerns. It's the employer's duty to print it out and make sure it's in their workplace. We're that's not part of our jurisdiction is ensuring that it's in the workplace. However, if we do get a complaint by someone saying that, hey, this poster isn't in our workplace, we would handle that. We'd usually just reach out to the employer and say, hey. You need to post this. If there's any concerns after that, we would probably refer them to the attorney general's office, or we'd have a back and forth with the employer. But for the most part, we don't get pushback. It's mostly just an employer maybe not noticing or not thinking that they have to post it. There's a place on our website where we have all of the mandatory posters, and it's all part of one packet. An employer could go online, print it all out, and post it all at the same time so that they know that they have all the posters on there. And that's pretty much it, honestly. It's a pretty easy process. Any questions? Fantastic. Thank you.

[Patrick Leduc (Chief Operating Officer, VSAC)]: Afternoon. Good afternoon. Thank you for having me.

[Justin McCabe (General Counsel, OnLogic)]: My name is Justin McCabe. I'm the general counsel of OnLogic. So OnLogic is based in South Burlington. It's where we have our global headquarter. We are an industrial computer manufacturer based in, that focuses on, small computers. So not the kind of things you're using now or the kind of things you would run Windows on, but the kind of things that are found in dirty, dusty, cold, hot environments. Right? We are a niche player in the in the IPC market, a niche business much like many other Vermont businesses with a global reach. So we understand and acknowledge that we have a lot of IP, we have a lot of technology to protect. We also have individuals within our organization that have a lot of information. Right? I'll give you one example. One example is myself. Right? So I'm not only the general counsel, I have also served as roles as the CFO of OnLogic, and I've also served as our global head of sales. So not only do I know the legal parts of our business, but I've also been heavily involved in the back end, understanding how our supply how our supply chain is built, how our costs are built. I understand all of our key customers, and I know them, many of them personally. And, obviously, my leaving OnLogic would be very detrimental to its business. We use non competes very surgically at OutLogic. And mainly what I mean by that is we focus on our executive team, those people who understand our future plans and our road maps, as well as our key sellers. Right? The people with key customer relationships that would ultimately pose a material risk to us losing them and potentially going to a direct competitor. Unless we think this isn't really a thing, like, our sellers are getting calls on a routine basis from our competitors trying to enter The US market. We're fortunate in that we are the leader in the in North America in terms of providing them for computers. And as such, we're a target. Right? So many of our sellers are considered targets. We also understand that overuse of noncompete is a problem. Like, there is a reason that this legislation is put in needs to be put into place and that the what what the I'm gonna be considering in

[Patrick Leduc (Chief Operating Officer, VSAC)]: terms of wage thresholds, we agree with,

[Justin McCabe (General Counsel, OnLogic)]: In terms of the reasonableness factors, we agree with. And in terms of the language that is currently proposed that I reviewed that was just on the board, OnLogic also agrees with. We think we can live within the language that is proposed in that way. So with that, concludes my testimony, but I'm happy to answer any questions if there are any.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Thank you very much.

[Devon Green (Vermont Association of Hospitals and Health Systems)]: Good afternoon. Thank you for having me here. I think this is my first time in the committee this year. Devin Green, Vermont Association of Hospitals and Health Systems. We represent all of Vermont's hospitals, all of which are nonprofit. I can tell you, in terms of non compete clauses, our hospitals do not use them, so this bill won't have an impact in that area. I think the only we are comfortable with the language here for the pay to stay provision and the health care specific language. I think the only potential change we'd like to see is in the section around the pay to stay. Section three of the bill, four ninety five r c five, so the very, very bottom of page eight, that has the we can only require repayment of a stay to pay benefit if the employee voluntarily separates from employment or is terminated for cause. I that makes sense to me. The only thing we'd like to add there is or is term terminated during their probationary period, because and that could be a reasonable probationary period of six months or something along those lines. But my understanding is if someone's terminated under that time, we we would potentially you know, we don't want to pay a big cash payment, and then someone may just not be the right fit. And they're not necessarily terminated for a cause, but they're just not fitting into the organization, that would be a tough outcome for the hospital.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Be a risk that any business is taking when they hire someone and they bring them through training and they find out they're not a fit?

[Devon Green (Vermont Association of Hospitals and Health Systems)]: Yeah, but I think normally we would have that in the contract of this benefit occurs if you meet your probationary period, and this legislation is taking that ability away from us.

[Unidentified Committee Member]: This is relocation and sign on bonus mainly? Right. Yes.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: We'll have to ask Sophie. I'm just wondering, within a contract, so if you have employment contract and you're saying we're providing you with this, but if you're not a good fit, then you have to pay us back?

[Devon Green (Vermont Association of Hospitals and Health Systems)]: During the probationary period. Right. Yeah.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Is that how your contracts are currently written?

[Devon Green (Vermont Association of Hospitals and Health Systems)]: I don't know about all the hospital contracts, but I also think think it could be administratively burdensome for hospitals to have to document a for cause piece when someone's released during their probationary period, when that's specifically a period where, you know, they're not on permanently. It's, we're testing things out. Usually, if it just doesn't work out, the hospital's able to let them go without having to make the case that it was for calls, And I think we'd want the same flexibility too.

[Sophie Sedatney (Office of Legislative Counsel)]: I guess it's really a policy decision for the committee to and understand the burden to the hospital, guess it's part of the intent, as I understand it, behind this legislation is folks that aren't in a position to repay things, and so I just wonder about the ability of somebody to repay it.

[Devon Green (Vermont Association of Hospitals and Health Systems)]: I would say, in particular, a sign on bonus. Could understand

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: But you don't pay your sign on bonus?

[Devon Green (Vermont Association of Hospitals and Health Systems)]: During the probationary period? It

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: might be in the contract, it may be a year after. If you stay with us a year, the years you sign off of it. Because I can see somebody or even six months, once you've completed your probationary period, we're gonna pay you sign off over But the I don't know that any business would pay it upfront because then they lose the ability to really collect it again.

[Devon Green (Vermont Association of Hospitals and Health Systems)]: I mean, I've definitely seen desperate times falling for desperate measures in the hospital space.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Yeah, we can I guess we need to move a little bit, so I think it's it's part of being part of the desperation that we're in, right? I think it's just a hospital. All the business is trying to bring people in, if they make a choice to pay, say they're gonna pay a sign on bonus and they pay it upfront, that's a risk that they're taking.

[Devon Green (Vermont Association of Hospitals and Health Systems)]: The risk of not vetting. Employees will. Right. And again, currently, we could contract to say, we're paying you up front, but if you are let go during your probationary period, we ask that it be paid back, and this would take that ability out of our hands.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: So any of the hospitals that currently do this and that's happened, are they able to get the money back? Do they actually go after the employee, the former employee?

[Devon Green (Vermont Association of Hospitals and Health Systems)]: They generally do not go after the former employee, but in egregious cases, they would like that ability.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Well, if there's an egregious and it's for cause?

[Devon Green (Vermont Association of Hospitals and Health Systems)]: No. I guess an egregious case would be like they sign they sign on, and it's you know, the next day, we have a issue with the employee that's not necessarily for cause. It's just a culture issue or, something that isn't designed for the probationary period.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: Yes, I answered it already. So are the contract structures so that the payments made during the probationary period? Or I would get a grasp on your contract.

[Devon Green (Vermont Association of Hospitals and Health Systems)]: Yeah, there's no set. Each hospitals might have a different approaches to contracts. So they could structure it all different ways at this point, but this would take some of that ability away from them.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: Just seems to get structured. The contract to deal with the issue should be quick. I I but we'll talk about it.

[Devon Green (Vermont Association of Hospitals and Health Systems)]: By saying you don't get paid I mean, a sign on bonus to a lot of employees feels like I'm signing on. Yeah.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: If they know what's going on, they're not getting into after their probationary period that they wanna be a good employee. Okay, for us to think about. Okay,

[Devon Green (Vermont Association of Hospitals and Health Systems)]: thank you. I appreciate it.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: The non solicitation piece that's in there for the medical?

[Devon Green (Vermont Association of Hospitals and Health Systems)]: Yeah. We are okay with the nonsolicitation piece as long as and this is already covered by HIPAA, but we don't want employees, you know, farming patient data and contracting them. So I think that's the only concern we've had.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: When I had a procedure done, surgeon that I had left the hospital went to another and they notified me. The hospital notified me that the surgeon left. You can either get a new surgeon here or you can, here's where he's at.

[Unidentified Committee Member (addressed as “Julie”)]: Right,

[Devon Green (Vermont Association of Hospitals and Health Systems)]: right. And it's all okay with the patient's permission, right? You know, the provider says to the patient, is it okay if I contact you about this? That's fine.

[Unidentified Committee Member (addressed as “Julie”)]: Okay. All right. Thank you. You.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: Good afternoon, everyone. Thank you for the invitation. Appreciate it. First of all, illuminating to be with you. I talked to Calvin Cutler earlier, and he said, No way could he testify. So I said, I'll take the bullet. So maybe I should start with, for the record, my name's Jay Barton. I'm the Vice President and General Manager of WCAX Channel three and WYCI, which are two TV stations, websites, etcetera, serving hopefully all of you every day. But in terms of the overall language that I've seen in this bill, especially when I compare it to, as introduced to, the most recent revisions from this morning, it it from where I sit, seems to be pretty thoughtful. In thirty seconds, the way that we employ, service contracts for personnel, there's essentially two tiers, one which is for on air talent because their likeness is going to be representative of the organization, and then for, sales talent because, obviously, they're gonna have access to financial information. So the preservation of NDAs, non solicitation, I feel like that language, at least in our industry, seems to be, consistent with the way that we would behave anyway. Pardon me. I'm still my still growing up. My voice is changing here. But I did have a question about compensation. I I like the idea of the percentage sliding scale as opposed to as introduced when it was a flat $100,000, because I would have questioned, you know, why not $9.99? Why not 10 o one? So I like the I like the sliding scale percentage. My question, though, and you may have had this discussion already, so I apologize for my ignorance, but was the conversation at any point the value of the additional benefits, four zero one k match, those types of things, which are expensive to the employer, and they are a part of the compensation. Right? Like, just as much as I expect maybe a signing bonus like you were just talking about or, moving expenses, or my actual paycheck, god forbid. I also you know, if I'm engaging in a full time role, is there anybody here who would accept one without, you know, medical benefits without, at a at a bare minimum? And then, like in our case, we offer a four zero one k match, which is a cash investment to the, to the employee. So my question is, has that discussion been had or considered? And I apologize if I'm bringing up something that is, that's already been settled.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: I can I can say something? So we, we discussed it, and we chose to include, basically, salary, retirement contributions to retirement included, not necessarily employer match, but the the employee's contribution to retirement accounts, things like bonuses, commission, but not the benefits. The idea we were really putting thought into setting a salary floor that was a reasonable wage. So something that don't know enough that we were capturing higher paid individuals.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: Yeah. My sense, just doing the math on the $2.50, is that that puts it right into this sort of

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: 75,000.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: Yeah. Exactly. So the median income for the state right now would be in that range. So yeah.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: That was the thought process.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: Okay. So so I think I think my only note would be, there are employers who are making a hard cash benefit. If I donate, yeah, let's say, 3% of my income to my four zero one k, your your income increases by 3%. You just can't access it until retirement time. So that is included? Okay. Great. Apologies again for my

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Attributions, I guess, would be the employers. I have the the language also.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: Yeah. My very close reading, obviously, of this document. Thank you. The lawyers love this. The the thanks, Jess. Let's see. So so, generally, I otherwise haven't really seen anything here that that caused me significant pause. The conversation that was just had, with regard to the health care space is the only other item that that kind of triggered something for me in the moment, which was moving expenses. We are often, in our industry, whether it is taking somebody who, for instance, lives in Brattleboro and we're moving them to South Burlington or vice versa, There might be moving expenses to that, and then often we have talent who are coming from other places, and we are bringing them in. So I would I would be interested in in maybe making sure that if there are any signing bonuses that are allowed to be recouped, that that we make sure that we don't accidentally remove that because sometimes that can be a relatively costly thing, and it's a regular practice for, all media. And that's a hard upfront cost, and there's no way around it, right, because they can't start working until they move here. We hope. So, anyway, so so those are sort of my 2¢, looking at it from from where we are because I think, generally, we wanna create a good work environment where people don't wanna leave and, do wanna stay. So so having having reasonable restrictions on when a noncompete can be enacted does not seem incongruous with what we're already trying to do with employment. So that's that's what I have to say. So I don't know if there are any other questions.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: I'm trying to explain the concern. Was it the things like moving expenses, stuff like that? Was that in the context of the stay or pay provision or non compete provision?

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: Really around the stay or pay. Stay. Really around that idea that if we're gonna dissolve a contract Right. Because this is starting to expand to to have some of those kind of ramifications. I just wanna make sure it isn't unintentionally delimited from from something that might be you know, because let's say I I moved a person and I I gave them $5,000, and then they immediately flame out for some reason. I think health care is actually pretty analogous to the amount of you know, it's a sort of a the pay is not great, but at least the hours stink, you know, that kind of thing. So so sometimes these things happen, and and you just get it to a place where we wanna be able to tell people upfront, Here's the expectation. Either way, we hope you'll succeed and we're gonna support you succeed. But if it's for whatever reason, that one time in a 100 where it goes the wrong way, and we just for whatever reason can't, I think similar to health care, we don't enforce a lot of these provisions in full all the time. Instead, you reserve the sordidamicles for significant people, there is still a human making a decision. It's not mechanical, I guess, is what I'm saying. I just don't want that to be lost. I

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: think the concept stated that you said, they are okay. Mhmm. As long as you meet, you know, certain conditions. Yep. One of those included the employee just sat with shot with it. To lead over this, things are hard working out. That's not a good idea to move on. So in those kinds of circumstances, the way I'm reading it, it would be everything under an understanding kind of provision, because that would be accepted. That would be part of the deal.

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: Yeah, so that would Okay.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: All right. So because I will say that I was trying to parse the kind of the most recent revisions, and and they were sent over to me, and I I was looking at an older version. Quickly. That's right. I was I was too slow. I was reading an older version, unfortunately. Yeah. Alright. But that but that's it. So I I think I think to your point, very likely this language has already sort of opened up that area and and made it something that we can do. Because I'm not by and large, I understand the intent of this, and I think from our perspective, it's it's not unreasonable. So Appreciate it.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Yeah. So Questions. Okay. Thank you very much.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: Chris?

[Chris D’Elia (President, Vermont Bankers Association)]: Good afternoon, mister chairman, committee members. For the record, Chris De O'Leary, president for Mount Bankers Association. Once again, sorry I can't join you, but best not to share what, continues to be, sicknesses in my family that like to like to make the rounds.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Appreciate that.

[Chris D’Elia (President, Vermont Bankers Association)]: Yeah. Well, I or maybe congress is killing me this year. I'm not sure which, but we'll see.

[Carrie Allen (Association of Vermont Credit Unions)]: I apologize, Chris.

[Chris D’Elia (President, Vermont Bankers Association)]: No. No. No. All all good. I did get the I did get the draft around quarter to one, so I'm scrambling to look through three eighty five and get ready for 02:00. But on h 02:05 05:00

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: now.

[Chris D’Elia (President, Vermont Bankers Association)]: Oh, no. I've gotta be in judiciary at 02:00 today.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Oh, that's right. You do.

[Chris D’Elia (President, Vermont Bankers Association)]: So on on h 02/2005, I just wanna say that I I truly appreciate where the committee has come from and the work that you've done, Herb and Abbey working with all of the interested parties. I think that, this bill has really come a long way to try and strike a balance. You folks have been, kind to listen to me and take into consideration my issues. And it and at some point, as we know in these processes, you've gotta kinda draw the line and and make the decision to move a bill or not. And you're probably at that point now, and that makes sense. Probably on page three c, we'll continue to garner some comments along the way. That would be my my guess. And I will say that if I hear anything from my members and their perspective on any of the bill as it continues to make its way through the process, I will certainly keep you folks updated. But again, I thank you for, what you've done on this draft and how far we've come with, developing a non compete bill.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Any questions for Chris? Hey, Chris, thank you.

[Chris D’Elia (President, Vermont Bankers Association)]: No problem. Good luck.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Thank you. Get better.

[Carrie Allen (Association of Vermont Credit Unions)]: Good afternoon, everyone. It's nice to see you again. Carrie Allen from the Association of Vermont Credit Unions. I'm happy to report that credit unions are generally supportive of this bill. It isn't a practice significantly to have used non compete clause in our employment practices. Generally, this would apply as it relates to severance agreements. We're particularly supportive of the language around non solicitation of employees. That would be an important clause for us. And so we appreciate the work that's been done, but we're happy to say that credit unions are supportive of this language. So thank you.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Thank you. Any questions for care? Great. Thank you. Take it.

[Rowan Halper (Policy Director, Vermont Department of Labor)]: Good afternoon.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Good afternoon. I'm

[Megan Sullivan (VP Government Affairs, Vermont Chamber of Commerce)]: Megan Sullivan, vice president of government affairs for the Vermont Chamber of Commerce. Thank you, mister chair, members of the committee for the opportunity to testify. I wanna start, because I think it's my first time with you this year, with a bit of broader context and, because I think it matters for how we're evaluating this. When we look at Vermont's regulatory environment through both the Vermont Chambers Business Climate Survey and the Vermont Competitiveness Dashboard, that was developed by the Vermont Futures Project, a consistent picture emerges. Vermont employers are operating in a state that is struggling with economic momentum and and where regulation is already a significant concern. On the Vermont Competitiveness Dashboard, Vermont ranks last in the nation and economic momentum, reflecting slow growth in population, workforce, and overall economic activity. That lack of momentum affects employers' ability to expand and attract talent and make long term investments. On the same dashboard, Vermont ranks seventh nationally for regulatory burden, placing us amongst the more heavily regulated states in the country. Those macro indicators align closely with what employers told us directly in the Vermont chamber's most recent business climate survey. When asked about top challenges facing their businesses, regulation and regulatory burdens ranked among the top concerns alongside workforce availability, housing, and rising costs. Employers cited the cumulative effect of regulation as a factor that makes operating in Vermont more difficult and less competitive. That context matters because regulation itself is not inherently bad. But when the state is already last in economic momentum and regulation is one of the top concerns raised by employers, it is especially important that new regulation are clearly tied to well defined Vermont problems and are narrowly tailored to address it. In this case, I wanna be clear that we have heard compelling testimony that a real problem exists in the healthcare sector across, access to care and patient choice are critical issues for Vermont. And the Vermont chamber appreciates the legislature taking those concerns seriously. The healthcare provisions in the bill are well grounded and respond to a clearly articulated need. Outside of healthcare, I wanna directly acknowledge concerns that representative Boutin has raised asking what problem is this bill solving? Because it's a fair question and it deserves space in the conversation. Outside of health care testimony we heard, are we convinced that the bill is solving a distinctly Vermont problem that ex that existing Vermont case law is not already handling when it comes to non compete agreements? Frankly, we aren't, given that Vermont courts have long applied a reasonableness standard that is limited overreach and protected employee mobility without broad statutory prohibition. On that, I think it's important to be precise about examples that are used in this discussion. We have all heard the sandwich shop example. For the record, that was a Jimmy John's in New York in 2016, not a Vermont restaurant. I would be remiss if I did not stand up for the rep restaurants that we represent and make it clear that this is not something we understand to be occurring or even in the realm of consideration at all in Vermont's restaurant industry. All that said, I am here to represent my members, not elected to make policy decisions or choose priorities. This issue has been under discussion for many years. It has been a clear priority for many years, and it was a defined intention to move on this legislation this year. When that happened, the Vermont Chamber believes it is better to be at the table helping shape legislation than standing outside the room simply voicing opposition. In that regard, I want to commend this committee for the process you have followed on this over the last biennium and prior. The level of engagement with local stakeholders and impacted party is a shining example of how legislation should be developed when multiple interests are involved. You have been inclusive and invited everyone to the table in working through challenges in and out of the committee. That process was done with intention and has meaningfully improved the bill. At this point, the Rowan chamber believes H two zero five is generally in a good place with one remaining area that we would like to see some additional refinement. That issue is subsection six c on page five. And this has been one that's been going back and forth for a while. See Abbey smiling.

[Sophie Sedatney (Office of Legislative Counsel)]: Thank you.

[Megan Sullivan (VP Government Affairs, Vermont Chamber of Commerce)]: As drafted, the requirement that an employer demonstrate that an employee's subsequent employment would inherently result in a material risk to the employer's business may be extremely difficult to meet even when there is a real risk. That word material, I think, is the challenge. I think a modest clarification that ties the standard more clearly to the employee's level of responsibility or creates different thresholds use or rather than and would resolve the concern while preserving the bill's intent and safeguards.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: Do you repeat that?

[Megan Sullivan (VP Government Affairs, Vermont Chamber of Commerce)]: Okay. So instead of it being and for the and this and this and this, g, fat, and or. Oh.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: I hear

[Megan Sullivan (VP Government Affairs, Vermont Chamber of Commerce)]: Or A, B, D or C. So that is our one area that I'd like to mention. In closing, we appreciate the thoughtful work that has gone into this bill, and thank you for your time and consideration.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: To be clear, we we did have examples from a lot of employees who were caught under they weren't they weren't on the restroom, anything other, they were some professionals and But it is happening. Okay. I don't know to what extent, but And sometimes, although the courts are open, there's people that can't afford a higher attorney. So we really don't It's hard to get a full extent problem here.

[Megan Sullivan (VP Government Affairs, Vermont Chamber of Commerce)]: But we appreciate the process that this has gone through. Inclusive, it's been. So thank you.

[David Nickenburg (Working Vermont)]: Afternoon. David Nickenburg here on behalf of working Vermont. Generally, are working Vermont okay with the current draft. We have one suggested change in on page five, section six b. We like the framework as it currently exists, and the only change that we would suggest is around the total compensation number, which is currently set at 250 of the state minimum wage, and we would suggest that go to 300%. So under the current proposal that which this council said that would be around $75,000. That's $25,000 less than as introduced, which was set threshold at a $100,000. And it's about $75,000 less than the Federal Trade Commission suggested, which was a little over a $151,000, which was a nationwide ban on noncompetes. And I actually appreciate the income threshold being tied to a percentage of minimum wage for allow for adjustments over time even though those adjustments are often very incremental as the minimum wage moves up very slowly. So if we're really trying to help working Vermonters, which I think we all are here, and I very much appreciate this bill and the work that's gone into it and everyone's participation in it, from our perspective, we should be as expansive as reasonably possible. And when we look at what it actually costs for people to live in Vermont, particularly if they have children, someone trying to make it make it in Vermont financially is actually much higher than the 250% of the of the minimum wage. You know, we're talking about a livable wage. It would be higher. The minimum wage is set at $14.42. And so for somebody, for instance, I looked at the MIT's livable wage calculator for Vermont. Person with one child would be required to make $97,000 to meet their basic needs. That's taking into account health care, child care, and all those factors. For modern living with two children would be required to a single parent living with two children would be required to make around a $134,000 to meet their basic level of needs. So and I think we're intending to protect the ability of working Vermonters to gain new employment and prevent limitations of their employment options. We should just be reasonable. You know? It's a suggestion. I understand where we are in this process. This is the first opportunity I've had to weigh in on that particular piece since it changed from a 100,000 to $2.50. And one of the anyway, I'll stop there. So appreciate it. If you just for your information, if you were to go to 300%, it would be somewhere in the $90,000 would be the threshold. So it's still below the 200 and the $100,000 threshold set in the original version. If you were to decide to split the difference and go to $2.75, it would be around $82,000, which seems reasonable. This would put Vermont somewhere in the middle of states, places like Oregon and Washington. Their thresholds are in the 130, 150, you know, other states much higher. Some other states are lower. So I feel like going to 300% or two seventy five would be put Vermont somewhere in the middle, with states with similar provisions. So that would be my one request to change. Other than that, I think, as others have said, I participated in this process through the summer and fall in good faith. I think we've done a lot of good work, and really appreciate where you've landed in this draft. And I really do appreciate your effort to protect Vermonters' freedoms, frankly, to go seek employment that works for them. So thank you.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Questions for David? Alright. David, thank you. Thank you. Request. People. Like to hear from Kirk and Abbey, you're the ones that really get to work and do it. Yeah.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: We'll make sure. Sure. We did work on it together. I think we worked pretty hard to try to, I mean, are so many different businesses who have their own structure and category, and understandably, they had different perspectives trying to fit something like this into their own business. I've trying to hear from other folks, especially around that six C, I guess it is, around how you apply that and trying to fit it into that particular business. I think I'm hearing that we managed to accommodate at least most of the concerns. I heard, I'm sorry, Jamie's not here, but, so I think we tried to do that, I think we did well. I'm comfortable with that language. I mean,

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: I think,

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: wage threshold itself, I'm comfortable with distract. I definitely appreciate the testimony that David just provided. And I'm thinking about, I know the chiropractor situation was a lower amount, I think it kind of illustrative of the kind of problems you get into where someone who is salaried, but may not be able to, you know, really assert her rights, you know, in terms of whether that was fair or not. Whatever the committee wants to do on that level, I'm comfortable with, but I definitely appreciate that particular aspect of it. What else should we tell you?

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Yeah, can I go in there? Yeah, go ahead. So I think, I mean, we put a lot of work into that C one, trying to think through various scenarios and how it would apply. I mean, I appreciate Megan's point about material risk, but I don't know, the conversations we had, I think that language fits the kinds of agreements that we want to cover. And then the wage threshold, I'm comfortable $2.50. I'm also comfortable with 300 percent. I think That was a scenario where we were trying to think of that startup scenario in the tech sector where there's highly technical, small team. Maybe they're starting out at a little bit below wage. That was why we moved it to the 250%. And then the third piece was, this was one that I had not thought of, so I think I want to understand, think about that a little bit, was the stay or pay provision about whether or not it could be repayable if it's within the probationary period. My initial reaction is they can just set up a contract where you get paid at the end of the probationary period. I understand moving expenses is an upfront cost. So I think that is really worth thinking about. Maybe we should but maybe we define what a probationary period has to we'd have to define what a probationary period is. And so those are my thoughts. Yeah, and on that

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: one, I mean, I totally understand that concern, putting on a lawyer contract drafting hat. I would think that a lawyer would be able to figure out a contract to deal with that kind of situation. But that was just my initial take on.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Yeah, because you think in a during a, like it's a little extra paperwork, but during a probationary period, you could also document it to terminate her homes.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: But not only that, but

[Unidentified Committee Member (addressed as “Julie”)]: you gotta I mean, the

[Unidentified Committee Member]: issue with the probationary period is it gives you that ability to terminate without having to document. And if it's not a good fit, it's very hard to document. But that's what that's designed for. So understand that probationary period piece. I go with probationary period not longer than six months. Something like that could be reasonable in there. That makes sense. The rest of it. Know that, I mean, people, businesses can pay 20 to $50,000 to move somebody. That's a expense. It's a big expense. And you're doing it for an employee to fit a specific role because you think that they're gonna be a good fit. But you don't know until they're with you every

[Unidentified Committee Member (addressed as “Julie”)]: day. Because Yeah, maybe.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: It makes sense. It does make sense. It's just sort of a scenario we hadn't thought of when we were working on this.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: People okay with the six month probationary period? Yeah, I would just say, well, make sure we don't follow-up either end of the blog. And, you know, what's the potential for abuse? Can somebody, maybe it's not good cause, but they just don't get along and say, sorry. I mean, what I think of is when someone goes through the time and expense to move here and maybe it doesn't work out and, oh, by the way, not only do you not have a job, but you're gonna pay us back $10.15, $20,000 for our moving expenses. What's that gonna do to this poor person who just came here? There's two sides to the coin, right? There is. On the other side, the business is in good faith, is negotiated and believes that this is going to be, might be a good fit based on interviews and everything. Then when it comes down to brass tacks, and they start working, find out that their work ethic may not be valid, or they just don't get along with the other employees. There could be a whole host of different issues. I think that's why it's a probationary period. Hopefully there's, I would assume that there's something in the employment contract that would say that during the probationary period, if it doesn't work out, you're responsible to pay back relocation expenses or whatever. I think it's, I'm okay with it if it's disposed. I'm just gonna make sure that I don't It

[Unidentified Committee Member (addressed as “Julie”)]: would be

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: very clear. It would need to be at that individually negotiated contract. So

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: is that something you can add in, Sophie?

[Sophie Sedatney (Office of Legislative Counsel)]: Yeah, so on the bottom of page eight, lines 20 one-twenty two, so it would be only required if you change between employee bonds, already separated from employment, or is terminated during their probationary period, or is terminated for courts in that probationary period, they would specify that that was up to six months.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Do we want to define that needs to be that the employer needs to disclose?

[Sophie Sedatney (Office of Legislative Counsel)]: So just on that, I mean, in order to have a stable pay provision that would be permitted under this, there again, are a number of criteria. So one of them is the employee voluntarily agrees to the provision of exchange for benefit, the repayment amount is reasonable and does not exceed the cost to the employer of the benefit received by the employee, the repayment amount is specific and provided to the employee before the employee agrees to the provision, the length of the stay period, payment is reasonable based on a number of factors, sets the cost of the benefit bestowed, value of the benefit to the employee, and whether the repayment amount decreases over the course of the stay period, and then the provision only requires repayment if the employee voluntarily separates, is terminated for cause, or if it's during the probationary period. So it would be transparent to the employee.

[Unidentified Committee Member (addressed as “Julie”)]: I guess what I'm thinking also is, this is no big on anybody, what if there are issues with management or with the company with regards to I mean, I'm sure there would be potential for things like obligatory behavior and things like that. But I'm also thinking about when we have fit, oftentimes that can be coded for racism or sexism or gender discrimination or bobia transphobia. So I'm trying to weigh that. I'm just gonna

[Sophie Sedatney (Office of Legislative Counsel)]: put that on the table. Just trying

[Unidentified Committee Member (addressed as “Julie”)]: to weigh that. Glad you called it

[Unidentified Committee Member]: out that way. Doesn't work.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Other request that we had, what are people thinking? Are we comfortable with 250%? Is that a yes? A three?

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: I'll click it.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Yeah. Okay. And the question that may have been raised on material? Yep.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: She suggested doing an or between C and D. Or a new period. Yeah. I mean, I don't what is what is a lawyerly difference between material risk or just risk? Does that change the meaning if we take out material? I just don't- I suppose, I mean, lawyers always try to put

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: material Yeah, in maybe

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: Sophie has a thought of that. It always has to be material, I would think, because it has to relate to the competitive interest and what you're trying to protect and stuff. What do you think, Stephanie?

[Sophie Sedatney (Office of Legislative Counsel)]: Yeah, mean, don't have material in that, and it could just be a minimum risk or Really, yeah, got it. Yeah, yeah,

[Unidentified Committee Member (addressed as “Julie”)]: No mix.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: I don't see it as a material. That's kind

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: of a

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Seems like the whole point of this is that there's some kind of a risk, is that there is an actual risk.

[Rep. Jonathan Cooper (Member, House Commerce & Economic Development)]: Yes.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: The other point that Megan raised around changing the and for more, I'm not sure. That's, I think, unintentionally maybe a really big deal. Yeah.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Right now, have to have all three. Right.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: And D is important. D needs to It has to

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: be D.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: D has to be included because that says that the agreement is reasonable in time, geographic.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: So you said it could be D or C. But you have to have C and D as well.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Okay, have to have D as

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: a must.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: D as a

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: So

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: the or would be, yeah,

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: and, and, and. Yeah, I think the question is just do we change any of the words in C? I think that really is Yeah, I think you need all. You need A, B, and D, you need.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: I could have thought we were trying to construct a standard under which statutorily, what's a reasonable non compete. And I think the way we were thinking about it is there are a bunch of different which is separated from that as

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: A through D. And they're really included in case law. Both that is c and d, I think, included in case law.

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: My turn? Were you looking at me for that? No.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: I was looking at Sorry. Herb was looking at Sophie's I

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: mean, I'm going to be the person that's dragging my feet on this. I'm really concerned that our businesses, that the climate survey that the chamber did, it said regulatory is a problem. And Megan did mention, we're top seven in the regulatory issues, which has been a problem that I've heard a lot about. If we could somehow make it so that the businesses could sign on, that would be it would certainly make me feel better about it. But I just as everybody knows from the beginning, I've been super hateful of this bill. I think that no competes for people that you don't feel comfortable making salary. Okay, fine. It's just really a problem for me. That's what I'm going to say.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Do you not like the salary level or which part of

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: it is part

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: of it?

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: I don't think we should be I personally don't I'm not overly thrilled about regulating it anyway because it's contractual law. And if I sign a contract, that's on me and the business. And with that being said, I can feel comfortable with if you're a business and you're not willing to put somebody on salary, I feel comfortable with the idea of doing the no competes. But when we start getting into that salary issue and you become an exempt employee, to me, it just changes the field on responsibilities, on what you're expected to do, whether or not you have access to information. That's where I stand on that. Could you get me to a place where I swallow my indigestion on it and vote for it? Probably. When I'm hearing from people that are doing business in Vermont, who economic development, that's what we are. We're supposed to be helping economic development. You're right, you're right. Just, I'm not And I get that. I'm not sure that there's, I'm not positive there's a lot of issues. It's just me, Mike, honestly, and Michael, sorry.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: Can just

[Sophie Sedatney (Office of Legislative Counsel)]: put some other?

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: You can. Understand

[Unidentified Committee Member (addressed as “Julie”)]: what you're saying, and I understand what the metrics are. I do get the conversation about Vermont and business and difference. But I also think that that survey also talked about employee retention, employee satisfaction. And I think that the flip side of this is that it may make the employment relationship a little more stable for people. It might actually make these jobs more attractive if they know that there's a little bit more give and take.

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: I get it. And I'll also state that I know how far the bill will go beyond this committee. And we also have to take that into consideration. And when the business community is concerned about it, we should try to pass a bill out of here that everybody's like, you know what? This is a good bill. But it's just my opinion, and you guys have heard it over and over again, I apologize.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: There has been The business community has been deeply involved in this bill, deeply involved. And there's one little piece that may not be crazy about, but I think for you to say that the business community now is gonna come out and try to stop this bill, I don't see that. We have businesses here now that said they're comfortable. I

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: was gonna repeat part of that. We've worked really hard to try to bring you people and we really try to be sensitive to what their individual and they're all kind of this inspired. We try to be sensitive and try to put something out. But let me let me put it at the freedom freedom and liberty level. You know, which is all about a free market economy. Right? And have free market economy got competition. So, and I think courts and everybody kind of agrees with that. This is this is just so so these kind of agreements, you know, inherently are sort of anticompetitive, but we're saying for good reasons, that's okay. If you if you put restraints on on competition, and we've tried to tailor it, you know, then be as accommodated as possible to different end. So that's that's my pitch on our our liberty and and freedom.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Great. I'll just say something real quick, is I was an employer for twenty one years, and I had the experience of having, that I can think of, at least three employees leave to go to a direct competitor. And I understood they were offered, honestly, better jobs. And that is part of the deal is competing. You need to compete for you to compete. And then later, as my business was more mature, we hired people who came from competitors, same thing. I was able to offer them a better job. And I had one employee left, started a business, and then solicited my customers. That was a bummer,

[Unidentified Committee Member (addressed as “Julie”)]: but I didn't have a non solicitation

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: agreement with them. But that was a lesson learned, should have. So I'll just say, I think that as a former employer, I would have been comfortable with this. If I had an employee who was making more than $90,000 and was, you know, talking to my key employees, then that isn't or key customers and had, you know, deep knowledge of things about the business. That is the point where I think it's appropriate to be able to have that noncompete. But I think that that's also part of the risk of being an employer is that you need to compete for just like you're competing for customers, you're competing for employees, and you're providing the best jobs that you can. And so this, to me, strikes a good balance. And we did work very closely with many members of the business community, and I think came to a good place that maybe is not exactly what people had, but is pretty close.

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: I just need to be clear, because I saw you guys there until 06:00 at night. You guys were working hard, and I don't want you to think that that's what I'm saying. I'm so far to the other side on this that to get me anywhere close, it's difficult. It's difficult. And you know what? We're all different.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: And I don't have a problem with that. What I have a problem with is that you're saying that the business community now is doing this for nothing, because when it goes out on the floor, the business community is going to come out and they're going to try to stop the film. We're not hearing that because we work closely. I think what you heard from Megan was that you're actually grateful that we were working closely with them. I mean, to say that is probably maybe disingenuous. I understand where you're coming from and that's your opinion, but I don't unless you know something that the rest of us don't know, then I A lot of things. But

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: I apologize for the comment of saying that the business community has a problem with the bill. Let me rephrase it. I think there's still some lingering concerns. That's And I get that. I apologize for not specifying it. And

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: I think that generally when we get a bill out, we know a bill is good as when not everyone is totally satisfied.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Or maybe nobody's satisfied.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: So, I think we're at a good place. We've made a lot of concessions to everyone. And I think, you know, really to Sophie and to Abbey and to her for really working hard on this bill. I mean, we started this, I think in 2018 or 2019. And, you know, we finally got to a place where I think people can live with this, then we can protect Vermonters that need the protections and still protect the business community that need the protections as well from non disclosures, non competes and non solicitations and protect them too when it comes to pay or stay or pay. So, I mean, I think we've done our jobs and I commend everybody. Sophie, if you can make those changes.

[Sophie Sedatney (Office of Legislative Counsel)]: I have made that you want to see them.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: I need to get to UVM and to our state colleges because we're doing budget right now. Are you available after the floor? Yeah. So let's see if we can move two bills today.

[Unidentified Committee Member]: Yeah. Wow. So

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: let's put this on ten minutes after the floor, and then we'll do 08:39 after that. Try to move that. Okay. Thank you. Everybody, thank you. Thank you for working with us. We really appreciate it.

[Rep. Kirk White (Ranking Member, House Commerce & Economic Development)]: Gosh. Know?

[Unidentified Committee Member (addressed as “Julie”)]: That's what we're gonna do. We get overly in trend.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: For sure.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Yeah. Happens a lot. Absolutely. Good when there's not a lot of options. Yeah. Exactly. It's like, it's

[Unidentified Committee Member (addressed as “Julie”)]: a six or eight. Okay?

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Remember everyone was still on live? Oops.

[Rep. Michael Boutin (Member, House Commerce & Economic Development)]: Oh, well.

[Unidentified Committee Member]: Such a great job.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: So we're switching gears. We're going back to budget discussions. We have UVM and our state colleges and Bisac with us this afternoon. So we have Wendy with us from UVM. Wendy, thank you for coming in with us. Other discussion we'd like to have is what's UVM looking at over and above your regular allocation in the budget. We'd like to know how the Green Mountain retention program is going, how much dollars are left in there. And, you know, if things are starting to percolate there, maybe that's another place where we would recommend more dollars going to if that seems to be working, depending on what the data shows. Okay.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: Wendy Conig, director of government relations for the University of Vermont. Thanks for having me in. So our our budget asks this year, president Trump sort of laid them out a little bit when she was here, but we've asked for a 3% increase to our general fund appropriation. We've asked for a million dollars a year for five years for the Vermont Cancer Center. That ask is specifically to help them roll out rural health care programs related to cancer

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: in county.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: And then something that we discussed and and talked about a little bit at length when we were here before is the governor's recommend of $15,000,000 for a state investment in completing our multipurpose center. So those are the things that are on the table that that were in the governor's budget that we've we've discussed before. I'll mention two other things that I think are are relevant to this committee, and then I'm happy to answer any questions. But one is the tech hub. This committee was very generous in offering us funding for the tech hub last year, which has really helped us to I think everybody is aware that we had received a $24,000,000 federal grant to, an award to start the tech hub program. That award was rescinded, with a change in administration, And the Department of Commerce has now reopened the tech hub competition. And so the University of Vermont has resubmitted our application. We've made it to the second round, which is really good news. And we have five different sections of that application. All five have been accepted. We just finished the questionnaire part for round two. So we are expecting that we'll have an answer on that tech hub program probably by April. But part of what the investment that the state put in and some other private dollars that we received from a foundation have helped us do is to start that program rolling and start building up the technology that we need to get it up and running. So it's not, at the scope that the federal dollars will allow us to do, but, the money that you all were generous in helping us receive has has helped us to to still be moving it forward. If we do receive that federal award, it'll be $30,000,000. So it's really it will really jump start the work that we do, particularly with development of of, technology for Vermont companies related to GAM.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: I'm just curious what the timeline is just finding out. I think we're gonna

[Wendy Koenig (Director of Government Relations, University of Vermont)]: I mean, it's always they'll never tell us a specific date, but the applications were the second round of application questionnaire was due this week. So we are hearing April for the disbursement of awards. What we hear on the ground from DC from different folks in the delegation and folks on commerce committee staff is that there's a good chance that the six that were awarded last time and then rescinded are likely to get them again. We've had to make some changes to them based on the program changing slightly, but we've all done that. And I think that unless there's something really strange going on, I think it's there's a good possibility that the six that were funded before will get funded in this round. And there may be more that are funded in this round, but I think the folks that have received those awards will probably get funded. Tech Hub is one. Then the second thing is Green Mountain Jobs and Retention. We're right now in year three of that program. And I spoke to I think many of you in here know Tricia Coates who used to work for the state colleges and now runs the Leahy Center at the university. Her shop is in charge of of Green Mountain Jobs and Retention. We're also partnering with on that. They've been really helpful to us, especially in the build out of of that program. It has not fared as well as we had hoped it would. We've spent a great deal of time, efforts marketing the program on the radio, in every school system in the state, nationally, at all the colleges. We put it out to lots of different places. And our expectation was that we would be able to fund 400 folk people each year for it. And the highest uptake rate we've had is 240. So there is still money left that we are still distributing to folks. So I I think that it was a really amazing idea. It's been harder to get people to take it up than we had envisioned. And I think that we've talked before about the fact that in a lot of programs, we see, at least from our experience at UVM, that it's more effective to give people scholarship dollars upfront than it is to give loan forgiveness or other programs on the back end. And I think that, you know, we've I know that there are other programs in the state that have done better than this one that are targeted at specific professions like nursing. So the nursing loan forgiveness program seem to have a lot of uptake and do really well. This one that has been more general has been harder to fill. So that's the honest answer about how that program is going. Do you think it has any marketing

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: of it? I don't think I hope I wouldn't think through the colleges, but through the business community.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: So we've we've worked with the business community too, and they've really hit it with everything they can do in terms of the marketing and even I if I'm remembering correctly, consulted with a firm about helping them with it. And so they've really tried very hard at the marketing part. And, you know, the businesses have been good about doing it too, but it doesn't really seem to be attracting people in the way that

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: we thought it would. Well, think, I mean, it was a nice pilot project. Absolutely. And I think we did capture some people staying here that probably wouldn't have stayed. Yep. So it's good to know that we should think of other things that we can do that can provide more in other areas that will help keep people here.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: Michelle Carris has been in here before, and Tricia has been in here before. I talked to both of them about it in anticipation of this. One of the things that they were suggesting is maybe it would be better to house it in the Department of Labor. And maybe just given the work that they do, maybe they would have better luck getting people to take it. And so that's one idea. And I don't I mean, I'll leave that to the committee to to think about. But if you have further questions about it, please let me know.

[Patrick Leduc (Chief Operating Officer, VSAC)]: Thank you.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: We will we will continue to support the folks that have signed up for it and until

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: we come much money is left approximately?

[Wendy Koenig (Director of Government Relations, University of Vermont)]: I don't, but I'll find out for you. Yeah. Sure.

[Unidentified Committee Member]: Sorry. Is is a partner in this. Right?

[Wendy Koenig (Director of Government Relations, University of Vermont)]: VSAT is a partner with us. They absolutely helped us, in particular, set it up and manage the flow of the dollars. Yep.

[Unidentified Committee Member]: I'm just I'm thinking about, you know, BZAC knowing mostly who has loans. Right? There are loans that other people have in other places too. As people graduate, it would make sense for VZAC to be reaching out to folks to say, if you have a job in Vermont and are living in Vermont, you are now eligible for this as a way to pay off your That seems like a no brainer marketing piece or informational piece.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: Do you know if that's happening? I mean, that very well could be happening, and I just don't know that detail about it.

[Patrick Leduc (Chief Operating Officer, VSAC)]: I don't believe that's happening. The bargaining has been largely on the outside.

[Unidentified Committee Member]: Would you take that back to VISA, please? Thank you.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Just remember that this didn't flow through VISA. It could flow through the Office of Engagement. VISA volunteered to help the Office of Engagement provide this, but I think it may be a good idea that Patrick and Yeah. And Scott, Maybe they can put something together. The rest of money out, and then we can see if that really helps pick it up. Mhmm. Oh, dear. Questions for Wendy? One thought, we were having discussion yesterday with commissioner Jensen about the Montreal trade office that we have. We were also thinking it may be wise for us to start thinking about trade office in The Pacific Rim or in Asia because of, you know, us becoming the tech hub. Absolutely. UVM, gold foundries in Indiana. It may be wise for us to invest money there to start seeing if we can get some of those businesses over this way.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: I think that's an excellent idea, especially I think we've talked in here before that the only other place that's really doing any GAN work is Taiwan. Yeah. Yeah.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: The idea actually came up last week when we had the director general from the Boston office of Taiwan. I think he was talking with us. And

[Wendy Koenig (Director of Government Relations, University of Vermont)]: Yeah. I think that that sounds great, and I will take that back and share that with Kirk because I'm sure that that he would be happy to help support that in any way too.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Any other questions for Wendy? Okay. Wendy, thank you. Thank you very much.

[Wendy Koenig (Director of Government Relations, University of Vermont)]: Thanks for letting me show up

[Unidentified Committee Member]: for a few lines on the floor.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Thank you. Patrick.

[Patrick Leduc (Chief Operating Officer, VSAC)]: Good afternoon.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Good afternoon.

[Patrick Leduc (Chief Operating Officer, VSAC)]: I'm Patrick Leduc. I serve as the Chief Operating Officer of Vermont Student Assistance. Thank the committee for the opportunity to share our budget testimony today. You have in your packet slide deck, I think in the essence of time, I'm gonna skip around a little bit. I would start by just thanking the committee for all the work that this committee has done to help build the advancement grant program and to support all the loan forgiveness programs that we've been administered for the last few years. I think results of that if we've helped a number of Vermonters pursue their education and add to the workforce. So we really appreciate the support of this particular committee. I won't go through all the different supporting programs that VZAC runs. I'll skip probably those for a second. I'll stop on slide four around what's happening with higher education, which I'm sure this committee is fully aware of, but obviously a lot of things happening within the post secondary space. I'm sure Beth and others can talk about more fluently, but particularly for the lens that VisaCoC has, we know that there's changes to the federal loan programs, which is going to challenge some Vermonters to pursue their education with new limits on caps on plus parent loans, as well as the elimination of the grad program. So we're actively working with colleges in Vermont to help navigate that path and see how we can be of service to Vermonters. There'll also be new initiatives coming out of the federal government, about institutional accountability that will also have similar pressures that'll impact students about their ability to pay for education. So we're watching all of that as we move forward. Jumping ahead a little bit to the slide seven, before we get into the specific budget, I just wanna share with the committee a really exciting thing that we've been able to do. We, as you know, have three different federally funded grant programs where we work with middle school kids, high school kids, and Vermonters across the state to help navigate their post secondary experience. One of the challenges we have at every level, whether they're adults or high school students is when they get those award letters from five or six institutions, it's really hard to figure out what they all mean. They don't use the same language and they're all very challenging. And there's a lot of positivity to that, right? The schools get to post their offer in a way that makes sense for them and that's appropriate, but it still creates a challenge when they all look different. So we built a tool called Award Advisor that anybody can download for free. There's no advertisements and you don't have to play a bubble game for thirty seconds before you can use the tool. So you sign up very simply, and all it allows you to do is scan those award letters, and then we built a machine learning engine behind the scenes that translates all those terms into common language, and then we present it back to the student or that parent or that school counselor, so they can look at these award letters in a way that they use common terms across all five of them. Also has some built in comparison features, so that within the tool, they can compare different award letters and see which one is better for them. So it really simplifies that process quite a bit. It's gonna hopefully help parents and families navigate that and make good choices for themselves around the right education, and hopefully help school counselors not do that kind of grunt work, but be talking with their students at a higher level about what's the right choice for them. So, this will be a product that will be being used in Vermont this spring, we hope reactively and we've got a number of partners across the country that'd be rolling it out as well. Excited about that. On our budget request, which is on slide eight, we are requesting a 3% increase to our base funding. As an update, this past year, we have awarded every dollar that was appropriate to these EC out to students and families to pursue education or training programs. So that includes the grant program for traditional college, that's full time and part time as well as the advancement grant and the trades program. So we have kind of just recently stopped accepting applications for those programs because we've expended all the funds. So we really appreciate that appropriation so we could help Vermonters. So that's a 3% increase of about $812,000 In addition, we are requesting the aspiration program, which is a unique program that we've created with Vermont institutions, where we go in for three or four years and help that school navigate some of their challenge areas around aspirations and post secondary attainment and training program access. We have authority now to use 300,000 out of our base, so this is not additional money, there's authority to use a $100,000 more for that program so they can continue to help schools. That's been at 300,000 for a couple of years now. So the cost of that program is growing just a little bit and we wanna be able to support schools appropriately. The dual enrollment college stipend, 84,000, we're requesting level funding for that. We have enough carry forward this last year that we think we can cover dual enrollment stipends for the year without any increase in funding. Although we are seeing more students taking dual enrollment classes, which is great. And then we get into the Vermont Nursing Forgivable Loan Incentive Program. Last year you appropriated about $3,000,000 We were looking for an increase in that and that was what we presented to the governor. Obviously, we've got some challenges here with what's happening with Rural Health Transformation Grant. So we're actively talking with AHS and DOH about that. And so we've got these funds that may or may not be needed depending on how that all plays out. This is gonna be a transition year in some form. So we are still kind of figuring out if this is a year where we may still want to request some funding for these programs to help the students that are already in that particular pipeline, not fall out of that pipeline and be lost into some other program they don't understand or something else. So we're still working with AHS and DOH on how to navigate all of that together. I'm sure one of us will be coming back or perhaps both of us with some updates on that program.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: You've talked to the healthcare committee too?

[Patrick Leduc (Chief Operating Officer, VSAC)]: We have indeed. Yes, last week we talked to healthcare committee. In addition to that, we suggested that the mental health professional forgivable loan Program, which this committee had a role in standing up, did not receive funding last year. Obviously that is a workforce area that we wanna see more people move into. So putting some funding into that particular program would be helpful as well. Again, there may be some connection to the Rural Health Transformation Grant there, so more to come on that. And then lastly, but probably most importantly, one of the things that we really wanna focus on is the Vermont Freedom and Unity Scholarship that we, in partnership with VTSU on. Last year, we received $1,500,000 in one time funding to pilot that program. We've seen a really nice uptick there this year. I don't have the exact numbers yet because we're just finishing the confirmation of enrollment in this particular semester. So we're still collecting the data, but we've seen a really nice number of students that are now going and receiving education for free at BTA2, at least the base tuition for free, that includes full time and part time students. We are asking to increase that funding and move out of one time to 2.3 and we think we can move the household income level from the current 65,000 up to maybe 75 or $80,000 and really help more Vermont families pursue a full degree at BTSU. Let me stop there and see if there's any questions.

[Devon Green (Vermont Association of Hospitals and Health Systems)]: The award advisor.

[Unidentified Committee Member (addressed as “Julie”)]: Yes. How did that come about? Was that something that you just kind of took upon yourself or something that was funded or piloted?

[Patrick Leduc (Chief Operating Officer, VSAC)]: The exact kind of took it upon itself. We said, Listen, this is a problem that we realize in a communication with our average counselors that we keep hearing the challenge with some of the background that I have and others have in IT in our learning there. Said, wait a minute, this is a problem that actually is not that hard to solve anymore, as opposed to waiting for the federal government or something else to solve the problem. We realized we actually have the technology to solve this. So we went ahead and just built the tool. Cool. Yeah. It is very exciting.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Any questions? Okay.

[Patrick Leduc (Chief Operating Officer, VSAC)]: Thank you very much.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Next slide, please. Beth? Good afternoon.

[Beth Malk (Chancellor, Vermont State Colleges System)]: Good afternoon. Thank you for having me. My PowerPoint was put on the back. Thank you both for inviting us in. I am Beth Malk, the Chancellor of the Vermont State Colleges System. Appreciate being here today. And before I go into my budget ask, I just want to give a little bit of a broader update on the Vermont State Colleges and what we've been up to. I think, as all of you know, the mission of the Vermont State Colleges is for the benefit of Vermont, and that is certainly something that I have taken to heart. It means that we serve Vermont, and what it means is that we want to be that trusted partner throughout Vermonters' lives as their need for higher education ebbs and flows. And we want to ensure that every Vermonter has access to high quality higher education. I have really good news on our numbers. So as most of you know, most of our students are Vermonters. So 83% of the students, both at the Community College of Vermont and at Vermont State University, are Vermonters. In addition, this year, our headcount was up 1.4. So we're still seeing enrollment increases. And even more importantly, our online enrollment was up over 10% this year. And that is showing how Vermonters who maybe aren't close to one of our campuses or centers or who have life experiences that they have to ensure that they have an ability to take college classes online. We've seen a real increase with that. And just as we're talking about some of these enrollment trends, one of the things to really note is the fact that what we know is all generally Vermonters are older. But what we also know is that the average age of our students are older. So while we still serve traditional 18 to 24 year olds on our campuses, In reality, the average age of our students is increasing. Right now, the average age of an on campus student is about 23, and the average age of our part time students is nearly 30. And that's really important to understand that we are seeing just a totally different type of student that's engaging in our campus. And it means that their needs are different. So they need more flexibility. They need this ability for college to wrap around their life and not just for their life to wrap around college. And in doing that, that really has made us have to think more about how it is we're educating students in Vermont. In addition to serving students though, we also have partners all throughout the state. First, I would like to talk about some of our community partnerships. So one of the things that the legislature has always talked to us about is the fact that they want to ensure that we continue to have five vibrant campuses at Vermont State University. And one of the things we've been really looking at is how, as the demographics of our students are changing, we can ensure that the buildings that we have are making sense. And so I'm excited to bring some news of that. So one of the things that happened this year is we've been working in collaboration with Down Street, and we will be getting senior housing up on the Johnson campus this year through a Sanders, CDS and some other funding that they have received. So really excited about that. You might have seen that in the news lately. In addition, on our campus, the Johnson Health Center on the Johnson campus, the Johnson Health Center is working with us right now so that they can move from the flooded area in Johnson up to our campus. That will allow our students to have opportunities not only to have health care that's very close, but also potentially internship opportunities. In addition, in the Linden campus, we are working with a regional education partner who will look to rent the Harvey Building on that campus. Again, looking at how we can surround ourselves with our community and really ensure that we are continuing to have vibrant campuses, but also are serving the needs of our community. And in addition, we've also been developing an apartment complex on the Johnson Campus to see if we can start to have some housing for our students. So if our students have different housing needs, then what we know is that we can't just have our traditional dormitories, but we need also apartment complexes. The nice thing about this is it actually can parallel as community housing so that our students can be there using these apartments if they need them. But if the students aren't using them, we can also rent those out to community members. So in addition to our communities, we also work with regional businesses and statewide businesses throughout the state to ensure that we are really being the workforce engine of the state for Vermont. A couple of programs that we've been working on at CCV, they have a program called Career Pathway Entry Program, or CPEP. Currently, there are 21 employers working with us on that. What's nice about that is it takes Vermonters who maybe haven't had any post secondary education and are looking for a career that might require some. And this allows them to start taking some college classes at CCV. At the same time, they can be trying out a variety of different internships so that they have an ability to see what it is they might like. We also have seen great uptick in our plumbing and electrical apprenticeships at Vermont State University. So very excited about meeting the needs for those trades here in Vermont. And then just very recently, we received word of two congressionally directed spending programs from both Senator Welch and Senator Sanders. Senator Welch has provided us with $2,500,000 for a composite certificate. So composites are the materials that will help us make some of the machines lighter. We're working in collaboration with Beta to determine what the best certificate program is for that, so that we can train folks on how to do it, then they can go to work at Beta or other employers around the state. And Senator Sanders has provided us with funds to really look at some rural health care initiatives. So looking to see how it is we can train nurses around the state, especially in very rural areas where sometimes the numbers just don't always make sense for class size. That the Community College of Vermont is really looking at what are some not only just filling the classes for now, but what are some innovative things that we can try so that we can satisfy those? For our budget ask, we did ask for, and the governor has recommended, a 3% increase to our base budget. In addition, we did ask for one time funding for a micro credential certificates. And I'll talk about that in a little bit. The governor did not recommend that in his budget. But next, we also asked for an increase in our allied health funds. So as you know, the Vermont State Colleges has positions in nursing education, respiratory therapy, dental hygiene. And the salaries for those folks really are a challenge for us to both recruit, but then also retain faculty throughout the state. So these funds help us to do nursing faculty salaries, to do clinical salaries, and also just some training programs around the state. For the last many years, we've gotten $1,500,000 for that. We are asking for a significant increase in that this year. This is a grant, so this is not in our general fund that's coming through Medicare funding. But as we've seen an increased need in nurses and dental hygienists and the increase in the amount of salary that we have to pay them, this is something that would really be of benefit both to us and around the state. And then we have requested through the capital fund a million dollars for help in really looking at how we can get some site work done for the apartment complex in Johnson so that we can get that ready be ready for a capital stack so that we can bring in a private person who can build the apartment building for us. So that was our budget ask. Just a little bit more on the micro credentials, though. So the example I'd like to use is our teacher education program. So I think as many of you know, traditional teacher education programs are four years. Students go to college, they go out and they do a student teaching and pre student teaching experiences. What we know right now is that in the state of Vermont, there are 7,000 teachers that will be needed over the next ten years. And so just looking at teacher preparation in the traditional manner that we've done probably isn't going to hit that mark for us. And so we've been working with the Agency of Education and the Department of Labor on looking at how we can have a program focused on paraeducators and other working adults who have a job somewhere and can start at CCV, perhaps get a paraeducator certificate, which CCV is working on, and do some of the pre service teaching and even student teaching in their actual employer's work a business where they're working. And then what we are looking at doing is then having those students transfer to BTSU. So just looking at how we are looking at these programs differently, it does mean that we sometimes have to change the way curriculum is delivered. So not a different program, but the way curriculum is delivered. Maybe looking at how we can pay some of these apprenticeships. So the teacher preparation one is just one example of many that we would be looking for. And then what we're also doing is we are supporting the SACS request for 2,300,000.0 for the Freedom and Unity Scholarship. That has been a real boost. One thing I just want to mention as we were talking about this, we have noticed a real uptick in the number of students who are online students who are coming to Vermont State University this year already. And what you'll have to remember is that while the traditional path for students is you just come in August or September and then you go through, But when we have non traditional students, they can come in at any point. And we've had, in addition to that August start, we've had an October start and the January start, we'll have a March start. And we are seeing upticks in the number of students who are taking us up on that. And we think that it's not only that online education piece to this, but it really is this ability of us to be able to have the Freedom and Unity Scholarship. And we think that would be a real asset to folks around the state of Vermont, who a lot of times for which the cost of an education really is the biggest barrier to them even entering the education space. And then I also wanted to talk just a little bit about flexible pathways. So for many years, the legislature has supported through the Ed Fund, things like dual enrollment and early college. Those have been real assets to the students in high schools who maybe only have a course or two to go in their senior year in high school. And then it really helps them to be prepared for college and maybe just transfer to college a little bit quicker and with a little bit more ability to be successful. So we know that there have been questions this year, especially about early college. We are excited to be working with folks in the House Education Committee who we really think can help us. We really think we can work together to maybe meet some of the unintended consequences of the early college program. But we're very excited about what has gone on with that. And then my last picture, is a picture of a woman. So this is from a graduation at the Johnson campus in May. And I watched this woman come across the stage, I first couldn't figure out what it was. Her cap and gown seemed funny, But she had her child with her walking across the stage. And this didn't just only happen at Johnson. People from all of our graduations were bringing their children and walking them across the stage. And really, this is why I do what I do. It's so exciting for us to be able to have a transformational experience for our students. And I think when someone wants their child to come and participate in, hey, I did this, I think it really just shows how much it impacted them. So,

[Rowan Halper (Policy Director, Vermont Department of Labor)]: are all

[Beth Malk (Chancellor, Vermont State Colleges System)]: the things. Thank you so much for allowing me to speak today. I'm happy to answer any questions.

[Unidentified Committee Member]: A lot of questions. Glad you're here too from ZSAC. So, when we're talking about early college and dual enrollment, what are the metrics that we're tracking and how do we measure whether it's successful? When we design a flexible pathway that's intended to support all kids and only some kids are taking advantage of these, then we're not meeting our goals. And so I'm just wondering who's tracking that and who's getting the reports on how these are working.

[Beth Malk (Chancellor, Vermont State Colleges System)]: So we do supply a report to the legislature every January. We just wrote that, and I can make sure that everybody on this committee gets a copy of legislature gets it as whole, but I don't know exactly how it's distributed. Some of the questions that you have, what we know is that many of the So a great percentage of the students who start in early college then continue on in the next semester. So these percentages of retention are in the 90%. So we know that the students are very successful in the courses that they're taking, and because of the great retention rates. What we also know is that the percentage of students who are on free and reduced lunches, there has been a significant uptick in the percentage of students who are on free and reduced lunch who also are participating in the early college program. Right now, so for this year, about one third of the students who are in the program are eligible for free and reduced lunch. And in addition, students who might be out of that threshold, but are still maybe in thresholds that would be eligible for the eight zero two opportunity, those numbers are also we're seeing increases. So we know that we're seeing increases in students who might not otherwise be able to go to college because of an economic barrier are actually taking us up on this program. What we also know is that a great majority of those students are actually immediately going on to college. So in the early college program at CCV, there's the free degree promise for that. Many of those students go right and stay at CCV for that extra year. But there are a tremendous number of students who are in the early college program that also go on to BTSU. So we know that this is very successful for students and getting them into college. So we have really good success metrics with this program.

[Megan Sullivan (VP Government Affairs, Vermont Chamber of Commerce)]: I guess

[Unidentified Committee Member]: what I'm wondering is, are we missing the kids we've designed these programs for? Or are we just making it easier for the kids who are already driven to go to college? And I don't know how to measure that, and

[Unidentified Committee Member (addressed as “Julie”)]: I don't know who

[Unidentified Committee Member]: can measure that. Right?

[Beth Malk (Chancellor, Vermont State Colleges System)]: Yeah. I suppose right. How would you measure who are maybe the right students for this? I suppose one of the things And so you all should know that in my career, for thirty years, I have worked on early college programs in Pennsylvania and Kansas, and now here in Vermont. One of the things to remember for early college programs is they aren't for every student. And so that's why it's so great that the legislature has designed these programs like this. Typically, there are some students, in this legislation, there's also opportunities for students to go to a CTE or do other programs. And so that's really fantastic. And I would say that the mechanisms that we have, and I certainly could also defer to VSAC on this, for how we're recruiting students, working with guidance counselors. One of the big ways that we would know that a student would be a good fit for this program is through a guidance counselor who actually knows this student and who can help them to say that this is the right choice. But developmentally, just some students this is not the right program for some students. So the goal shouldn't really be that every student in Vermont is taking us up on an early college program. I think really what this program is designed to say is that every student has an opportunity to have opportunities that are important to them. So whether it be early college, whether it be a CTE, whether it's even just, I only have another couple of classes in high school and I can do this. So I think this gives them options is really what the goal is.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Jonathan?

[Rep. Jonathan Cooper (Member, House Commerce & Economic Development)]: Thank you very much. I was I'd like to ask about the housing conversion, which I think is kind of a new take on, I guess, the notion of senior housing on a college campus. My question is if I assume that is expected to be an evergreen revenue generator for the system. Do you have sort of plans for that revenue? Like if it's to support ongoing operations, or if there are other initiatives that you are expecting to use those resources for? Thank you.

[Beth Malk (Chancellor, Vermont State Colleges System)]: Thank you. So on the housing, so on the senior housing component, our goal always has been to take So the building that we will be doing this out of, which is the McClellan Building, actually is slightly down the hill from the overall college. And so it has always been our goal to sell that building off and the land around it, and then down street will own that or whichever entity will own that ultimately. So the only funds we will make out of that is from the sale of the building. The apartment buildings or anywhere else that we might be able to do workforce housing, ultimately, yes, that would be a revenue generator. We don't have a specific plan for how we're going to do this, but the whole idea is to take any kind of revenue generation that we can have and fit that right back into Vermont State University to ensure. And is that for educational programs? Is that for improvement to our campuses? Is it maybe for specialized scholarships? But that ultimately is the idea that that would become a revenue generator and a net contributor to the institution so that we would have an ability to use those funds for things that we know are needed by our students.

[Rep. Jonathan Cooper (Member, House Commerce & Economic Development)]: So in both scenarios then of sale and of longer term sort of resource, the ultimate allocation of those assets has yet to be determined. And that's just, I think is what I'm understanding?

[Beth Malk (Chancellor, Vermont State Colleges System)]: Yes, we're thinking they will be a net contributor. We are going to put them into a fund and then, yes, figure out appropriate uses for those.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Julie?

[Unidentified Committee Member (addressed as “Julie”)]: Thank you so much. That's all really great information. I was curious about I was just looking through the CPAP pathways. I think that's a really interesting and very innovative use of community resources and everything. But I'm also really noticing that a lot of the classes are taking place up in Winansky and Montpelier. So I'm curious about That just led me to think about what kind of relationship do you have with the southern part of the state. And also my other question is, do you have a list of courses by campus?

[Sophie Sedatney (Office of Legislative Counsel)]: Yes.

[Beth Malk (Chancellor, Vermont State Colleges System)]: So to your first question, so we have programs throughout the state, both at all of our centers and our campuses. So the CPAP program is specifically with the Community College of Vermont. And so there are 12 centers throughout the state where there are both on campus and online courses that are taking place at any given time. The reason you'll see those numbers are for two reasons. One, population density, but also this is where a lot of the employers are. So that's why you're seeing those courses there. But students, we also have hybrid options for them and online options, so that students can be anywhere in the state and still be participating in programs like that. And one of the things that's nice for is, potentially, if there's a smaller employer that maybe only has an opportunity to have one or two internships, they have an ability still that the students can be taking classes with everyone else and still be involved in their internship. So that's what's exciting. We do have a list of we don't have a list list. What we do have is, even online, one can go in and actually and I can send to you the link.

[Unidentified Committee Member (addressed as “Julie”)]: Yeah, was trying trying to figure out how to navigate to that and had a hard time getting there.

[Beth Malk (Chancellor, Vermont State Colleges System)]: I have the link on my computer, so I will get it. But yes, you can. You can make choices I'm and

[Unidentified Committee Member (addressed as “Julie”)]: noticing that you have Brattleboro Memorial Hospital, which is very exciting. Yes. But I also noticed that the in person labs are in Montpelier, which I guess I'm concerned about. Or do you all think about just the amount of travel?

[Beth Malk (Chancellor, Vermont State Colleges System)]: Yes, do. We definitely do. And actually, this rural health care grant, the CDS that we just received from Senator Sanders, it is exactly to look at pieces like that. That how is it that we can serve the needs around the state, but in these very rural areas where there sometimes aren't a lot, there is not a big population density, how is it that we're still serving them? And yes, thinking about travel times is one of those. And again, it's also sometimes the numbers. So even potentially if we're talking about Brattleboro Hospital, in order to become a nurse or some of these pieces, you've got to do a lot of different experiences. And so sometimes even smaller hospitals don't have all the opportunities for students at the same time to participate. And so that is one of the things that we're really going be looking even more at with the Senator Sanders CDS.

[Unidentified Committee Member (addressed as “Julie”)]: And with that, is there talk about partnering with CTEs?

[Beth Malk (Chancellor, Vermont State Colleges System)]: Yes, we've done a lot of talk with that as well. Yes. Thank you.

[Unidentified Committee Member]: So we didn't talk about the transition, right? I think this current year that we're in this, the last year of the-

[Beth Malk (Chancellor, Vermont State Colleges System)]: It is, yes. You. Yes. Yes. So this is the last year. So I think as most of the folks in this room know, the legislature has been very generous to the Vermont Psychologist system over the last five years. And we received both an awful lot of funding, including a very large increase to our base budget, which we appreciate. But there was also what we were calling bridge funding. And so we were stepping it down every year. So FY 'twenty six is the last year of that bridge funding. So we received $5,000,000 for this year. As you can see, we are not requesting any additional funding for next year. And while we still probably will need to help VTSU, There are still transitional things to be doing at VTSU. We do not foresee having to come back to the legislature for any other bridge funding that will be able to self support some of the last little pieces of that transformation. So it's a thank you. And I think this is really a way that we can see that the legislature in stepping in and assisting us has really allowed us to not only survive, but really start to thrive in how we're thinking about how we're serving the needs of Vermonters.

[Jay Barton (VP & General Manager, WCAX Channel 3 and WYCI)]: All the updates.

[Rep. Abbey Duke (Member, House Commerce & Economic Development)]: Thank you. Thank you

[Sophie Sedatney (Office of Legislative Counsel)]: so much for having me. Appreciate it. Appreciate it.

[Rep. Michael Marcotte (Chair, House Commerce & Economic Development)]: Let's take a fifteen minute break. Sophie is going to be back at 03:15. She has the language ready. So I think we can start planning a discussion so we can go off live.