Vermont Legislature SmartTranscripts:

[Speaker 0]: Good morning. This is House Committee on Commerce and Economic Development. Today is Tuesday, March 31 at 09:03AM. And this morning, we're gonna start our week off with House Bill eight thirty seven, an act relating to rounding cash transactions. We're starting here with Cameron Wood, our legislative counsel from the office of the legislative counsel. And good morning, Cameron.

[Cameron Wood (Office of Legislative Counsel)]: Good morning. For the record, Cameron Wood, Office of Legislative Counsel. We're going to do a quick walk through of 08:37. I know you have quite a few witnesses lined up. So 08:37, an act related to rounding cash transactions. So the first two sections here, have a title and a purpose statement. Short title, the act may be cited as the Nickel Rounding for Cash Transactions Act. In that purpose statement, the purpose of this act is to authorize the rounding of cash transactions to the nearest $05 or $01 cents points are unavailable or impractical while ensuring legal clarity and consumer fairness. So this would go in Title IX, very beginning of Title IX. As you can see, we're going to create a new section two. So there already is a chapter one for money of accounts. And then there is a section one just identifying the money for transactions in the state is going to be the dollar sent in the mill. And so we're going to add a new section two here at the top of Title IX for nickel rounding. Have a few definitions to start with. Cash, coins are paid for currency in The United States, cash transactions, sale of goods or services where payment is made entirely or partially in cash. So first thing to note, and we'll get there here further, we're not talking about electronic transactions. So if somebody's using a debit card or a credit card or some other transaction that is occurring electronically, this is really only going to address transactions that are done in cash. So then we have rounding, adjusting the final total amount to do after taxes and fees to the nearest $05 increment. And then we get into the meat of the section, which is really sub B, which is authorization. A person or business engaged in a cash transaction may round the final amount due to the nearest zero five dollars as follows. Then it has the A and the B, where if the transaction ends in a one, two, six, or seven, it would be rounded down to the nearest unbounded visible by five.

[Anthony "Tony" Micklus (Member)]: So if you're right to a zero, it's a five.

[Thomas Weiss (Resident of Montpelier)]: So if we look at this

[Cameron Wood (Office of Legislative Counsel)]: for three, four, eight, or nine, would

[Anthony "Tony" Micklus (Member)]: be rounded up to the

[Cameron Wood (Office of Legislative Counsel)]: nearest unbounded by five, so down to the nearest nickel. Then we have sub two here. If a person or a business is rounding for a cash transaction, the refund of the amount paid shall be issued to the purchaser in the exact amount initially paid. So if the business is grounding a transaction, at the conclusion of the transaction, then someone comes back. And once a refund of that amount, the business has to refund the same amount that was paid at the end of the transaction that was rounded. So the business wouldn't be able to provide the exact amount back based on the time of the sale before rounding. We're getting to the top of page three. We have a few exclusions here. So as mentioned, does not apply to electronic and other non cash payments. It wouldn't apply to the payment of wages. So businesses that are paying individual employees the amount that they're due can't round up or down depending on those amounts that are required to be paid. It doesn't apply to rebates or cash disbursements. It does not apply to transactions governed by federal law that prohibit rounding. We have an application. Notwithstanding any law or the contrary, rounding under this section shall not constitute an unlawful price increase surcharge, unfair, deceptive, active practice practice in in commerce, or discrimination. I think this section somewhat begs the question of whether this is a necessary statutory change, anticipating that question potentially. I don't know that it is. I'm not aware of anything in the consumer protection laws of Vermont that would prohibit a business from doing this now. Businesses have the ability to set their own prices. And if a business wants to go in because of a shortage of at present and because of the discontinuing of the creating and dispersing of pennies. If a business wanted to go in and just set all of their transactions or all of their price points to equal something that ended in a nickel, I don't know that there's any prohibited business from doing that now, because I'm not aware of one. But I do think this could help signal the public that this is something that is specifically authorized. And this section would state that an individual wouldn't be able to bring some sort of claim of discrimination or consumer protection argument that the business was discriminating or doing some unfair, deceptive act by mounting a transaction at the end? So I do think there could be some value in it. I'll say that there are many other states that have introduced similar pieces of legislation. There are a few states that have passed them, a few governors that have signed them. I can give you a list if you're interested. They're all pretty similar to what you have here with some slight differences, some more detailed, some less detailed. But in general, most of the bills that I've seen anyway are very similar to what we have here. There was some language introduced at the federal level. Currently, I don't remember off the top of my head where it sits exactly, but there was some legislation that was introduced in Congress. But I don't think it's gone very So you do have a lot of states that are passing similar types of

[Jeremy Bilden (Vermont Chamber of Commerce)]: In fact, in the exclusions, you had transactions governed by a federal law that prohibits frowning. Are you aware of any?

[Cameron Wood (Office of Legislative Counsel)]: I'm not aware of federal law that would prohibit rounding, my understanding, from the sponsor and where the bill was coming from. That was really intended to similar to what we have regarding wages, you can't round when you're paying someone wages. There are certain disbursements that are made from different programs at the federal level. You all know I'm very familiar with unemployment insurance. Unemployment insurance is technically, those payments are already mounted with state law and law is under federal law, but we use these under the circumstances where you pay individual $0.30 out if they have an overpayment, for example, or if they were reporting wages and could end up with sent transactions. And so many different federal programs that exist, as you all know, different housing programs, different assistance programs, etcetera, etcetera. So if there are any programs that would look around the transaction, that section is considered so that you don't want to

[Maggie Boutin (Vermont Retail Grocers Association)]: have some sort of conflict.

[Cameron Wood (Office of Legislative Counsel)]: So back to the sub E here, optional use. So the section does not prohibit a customer from tendering the exact cash, including $01 coins, unless the person or business is provided notice that the person or business rounds transactions in accordance with the section. So this is all permissible here. It's not a requirement. It wouldn't mandate that businesses do this. Section shall not require a person or business to accept cash if the person or business has posted a policy stating that the business does not accept cash. Some notice requirements. Business has to post a disclosure. And if there is its term, it can count on sales or on customer receipts. One thing I pointed out to the sponsor of the bill, and I'll point out here, if you're wanting to require a notice, it may not make sense to put the notice on the receipt because that could be after the transaction actually occurs if you're wanting to ensure that the customer is fully aware. So just a point that I mentioned there, because this is an or, but the business could do either. I've seen the required notice in the other bills that seems to be pretty standard. Taxes shall be calculated and remitted based on a pre grounding amount. You don't want to have additional tax being charged and remitted to the state based on the rounding amount that occurs at the individual transaction. Then finally, an effective date 07/01/2006.

[Anthony "Tony" Micklus (Member)]: Any questions?

[Monique Priestley (Clerk)]: Maggie? Yep.

[Maggie Boutin (Vermont Retail Grocers Association)]: Did you say my name?

[Monique Priestley (Clerk)]: I did not.

[Maggie Boutin (Vermont Retail Grocers Association)]: I didn't hear my name. Oh, I thought I heard Abbey. I was like, what? Maggie. It's close. It's close.

[Chris D’Elia (President, Vermont Bankers Association)]: That would be something I would say.

[Monique Priestley (Clerk)]: And good morning, Abbey. Good morning, Maggie.

[Maggie Boutin (Vermont Retail Grocers Association)]: Good morning, everyone. Maggie Boutin here on behalf of the Vermont Retail Grocers Association. I think I'm not going to be late by reading my full testimony. It's posted so you guys can read it. I'll just say we worked with Rep Casey over the summer and fall to get this introduced. This was formed from the retail grocers out of just a lack of security around offering guidance to their members. Members are asking if they can or cannot round up or down. The Retail Brokers Association, just at this point, until this is a formalized practice, does not feel comfortable giving guidance to businesses and there is some confusion on the ground. Could this be considered an unfair and deceptive practice, etcetera? So we felt like this was a good model to use. They used this model for a while in Canada, sometimes referred to in Swedish rounding. It is, I think, looking into various systems. Doing a voluntary or non mandated approach seemed to be the best fit. There are some states that are requiring this. I mean, we statute, and we felt like it would be better to make it optional for businesses, but just to, the purpose is to formalize practice that businesses are using now and just to give them the confidence that what they're doing is not going result in the lawsuit. So that's really the basis. I think it's pretty straightforward. Bill really hope to get this done this session, maybe into economic development or something.

[Unknown Committee Member]: Hi. Thanks. So I think you pointed out that it's not a mandatory requirement. It it's it's voluntary, and that I I take it some groceries are already doing this. So if folks can do it already,

[Cameron Wood (Office of Legislative Counsel)]: what's

[Anthony "Tony" Micklus (Member)]: the purpose of the work?

[Maggie Boutin (Vermont Retail Grocers Association)]: There is a real question whether it could be considered an unfair deceptive practice under the Consumer Protection Act. The association would just like businesses have absolute certainty and security with this practice, which is going to have to be used more and more frequently as pensions are disappearing. They just want security so that they know this is allowed.

[Unknown Committee Member]: Have you had some legal sort of analysis of why the practice might be

[Maggie Boutin (Vermont Retail Grocers Association)]: unwelcome? We haven't done our own, no. But to legislative council's point, other states are also passing these It really does seem like there's a question beyond your remarks

[Anthony "Tony" Micklus (Member)]: about

[Maggie Boutin (Vermont Retail Grocers Association)]: the laws, that this is something that is creating uncertainty. And I also think putting it in statute so it signals to businesses that it's okay, and I think creates hopefully a little bit more uniformity around the practice that's being used. I think this really is the nickel rounding up and down is the most fair system of the patent statute, I think, will help create a more uniform approach on the patent. Thank you.

[Monique Priestley (Clerk)]: You mentioned that we're trying to get at this before it's a real problem. Can you talk about inconsistencies across the state? Are you aware of inconsistencies across the state where some businesses are having issues already and others are not? Or do we not have an issue getting pennies yet, and we're trying to make sure that when we do have a problem, we're covered?

[Maggie Boutin (Vermont Retail Grocers Association)]: It's inconsistent. There certainly are members who have reached out because they have had a lack of they've had trouble making change, and they wanted to know how to respond to those. And then there are some members who were surprised this was an issue because they haven't. So it is inconsistent. I'm not really sure what the members that

[Speaker 0]: who the members are that

[Maggie Boutin (Vermont Retail Grocers Association)]: have have issues, issues. But but yeah, yeah, that that was was a a good good one.

[Anthony "Tony" Micklus (Member)]: I think it's the larger retailers that are having a hard time getting them to Japan. Then smaller, that's what I found, where, you know, the Walmarts and Shaw's and businesses are having a harder time and they're fast, where they're instituting the round up, round down, then it doesn't matter. I generally don't have a thousand different types of small stores.

[Maggie Boutin (Vermont Retail Grocers Association)]: I'm going to say we definitely heard some small numbers as well, so not that that's incorrect, that larger retailers are struggling, but there has been outreach.

[Anthony "Tony" Micklus (Member)]: Right. She's going for large council, but this would be It's not a statute, it's not forcing anyone to give more guidance than anything else, but how does that get us away from the issue of failure of self refute practice?

[Maggie Boutin (Vermont Retail Grocers Association)]: Well, wouldn't be in statute, so I think it isn't just guidance. I think it's suffering security, but at the end the day, I think it would be enough. It would go beyond guidance.

[Anthony "Tony" Micklus (Member)]: So what happens to a business if they choose to do it a different way? Then does that open them up to possible suit on unfair and deceptive business practices? You mean,

[Maggie Boutin (Vermont Retail Grocers Association)]: if this bill was passed and then they round it a different way? Yeah. I don't think I can answer that question. I'm not a lawyer. I'm not sure, to be honest. I could try to get an answer for you, Abbey.

[Anthony "Tony" Micklus (Member)]: I'm just wondering, does it make sense to this guidance or is it mandatory?

[Maggie Boutin (Vermont Retail Grocers Association)]: But we'll see, I think we're not locked into this approach, really. The result that we're looking for is just some security clarity so that the regional roasters association can feel confident giving guidance to their members, to businesses feel confident.

[Anthony "Tony" Micklus (Member)]: I just worry that we had something and someone deviates from that. Does that open their mind? I think that's a good question. I think we should focus on, I mean, you're rounding or you're not. And if you're not, then no problem, that's the way it's been done for years. If you are, this is the statute. You have to use this formula if you're going around. What worries me is if we just use this as guidance or if it's actual law that this is the way you are going to do it, I think it should be optional to round, but if you're not, but if you are rounding, you should be required to use this method. Well, you don't have pennies, buy option, right? Credit cards and it's still accepting checks, that's one thing that when we're working with CAT, it still has no penalties anymore. It's the option to try.

[Monique Priestley (Clerk)]: So then, Maggie, probably it's going to be helpful for us, for you to get feedback. If this is not optional, how do the retail grocers associate it? If

[Maggie Boutin (Vermont Retail Grocers Association)]: the bill was changed so that this was the mandatory system for the boundary? I'm listening to all support for this urgent. No one has pushed back on this, so I feel pretty off the ball. I can get an official.

[Anthony "Tony" Micklus (Member)]: Well, it'd be nice to know, too, should there be a phase in or not? Right? Or should this just go live July 1? Or do we need more time to prep the GPR community?

[Maggie Boutin (Vermont Retail Grocers Association)]: I don't know if they were invited in, I certainly don't want to volunteer them for it, but I've had some informal conversations with the AG's office. It may be interesting to hear from them. I'm not sure if they have any official questions.

[Anthony "Tony" Micklus (Member)]: Question? Michael? This is not a question for you, actually.

[Cameron Wood (Office of Legislative Counsel)]: There's nothing new under the sun, so I'm sure that this has happened in the past where lower denomination has been weeded out.

[Jeremy Bilden (Vermont Chamber of Commerce)]: Trying to think if we had a half cent.

[Anthony "Tony" Micklus (Member)]: The

[Cameron Wood (Office of Legislative Counsel)]: mill, as it's called, does exist and it is a thousandth of a dollar,

[Anthony "Tony" Micklus (Member)]: I believe it's a tenth of

[Cameron Wood (Office of Legislative Counsel)]: a penny. Typically, there's something going to come up in electronic transactions. So the lowest there were half cents that were made at one point in time. My It's understanding, and if my research when I was doing the bill initially, it's accurately coming to my mind. But currently the lowest denomination of physical currency is the pin. Hope that's answering your question. Well, I'm just, I mean, it was the target to see their potential we are now. It would be interesting to know if there were how it's been dealt with in the wherever phasing out a quorum.

[Anthony "Tony" Micklus (Member)]: I think the Roman era, they used to cut them in half. I don't remember.

[Maggie Boutin (Vermont Retail Grocers Association)]: That was

[Unknown Committee Member]: kind of rude. That's not what I meant by that.

[Anthony "Tony" Micklus (Member)]: Actually, what they used to do

[Cameron Wood (Office of Legislative Counsel)]: is shave a little bit off. That was the inflation.

[Maggie Boutin (Vermont Retail Grocers Association)]: You're gonna get some chunky scissors.

[Cameron Wood (Office of Legislative Counsel)]: Wasn't it the cost of the copper in it?

[Anthony "Tony" Micklus (Member)]: Anything else from Matthew? Thank so much. Nearly?

[Jeremy Bilden (Vermont Chamber of Commerce)]: Morning. Morning. Thank you for having me in. For the record, Jeremy Bilden with the Vermont Chamber of Commerce. So I wanted to start off by thanking you all for having me and for your attention to the 8.37 to Brown's cash transactions. This will particularly affect retailers and restaurants when they're making their cash transactions. So it's around $0.5 Considering that pennies are no longer being minted and that the value of the penny over time has continued to decrease, we believe it's a solid option to pursue moving forward. So the fact that the bill makes penny rounding optional is a really good aspect of this bill. It allows businesses that wish to adopt this, that haven't yet adopted it, to adopt it on their own timeline. So they're able to update their point of sale systems. They're able to take the time needed to get that signage and to indicate to consumers that this isn't a policy that they are implementing within their stores, similar to the only accept cash, we only accept credit, credit card minimums, similar signage to that. And so this really only applies to cash transactions And the fact that it applies to after taxation also helps keep it really simple. And so for those reasons, encourage you all to consider adding this to whatever economic development bill that

[Cameron Wood (Office of Legislative Counsel)]: you all are working on.

[Chris D’Elia (President, Vermont Bankers Association)]: Thoughts on mandatory versus optional that we

[Anthony "Tony" Micklus (Member)]: were just talking about? What are your thoughts on that?

[Unknown Committee Member]: Yeah, I

[Jeremy Bilden (Vermont Chamber of Commerce)]: think optional is the better way to go with this, just because as businesses are looking to implement this, some might not find it to be the practice that they want to pursue, others might. And it might be that over time, over the course of a few years, more businesses do decide to use this as a tool in their toolkit. I don't know that in Canada, when they first implemented it in 2013, that was implemented as optional and has since seen widespread adoption. But having the opportunity for businesses to slowly implement that as the penny

[Cameron Wood (Office of Legislative Counsel)]: perhaps becomes rarer and rarer over the

[Jeremy Bilden (Vermont Chamber of Commerce)]: next decade, couple decades, just allows businesses to take it at their own pace.

[Unknown Committee Member]: Other questions? Thanks for coming. I'm curious, in terms of your members, if they're worried about that they won't have enough pennies, you know, to complete a transaction. Maybe this is a very naive question, but why why wouldn't they if they're worried about that, why don't they just post a price that has either, you know, up or down,

[Jeremy Bilden (Vermont Chamber of Commerce)]: doesn't require pennies? As in the post the price and then like the pre the post tax number is? No, no, I'm

[Unknown Committee Member]: just saying, you think it is something that's $199.97 Why not just post it at 95 or why could I guess I get it, maybe that's the answer. You don't want to post it at $200, but it just seems like it's an issue that maybe retailers have the means to address.

[Jeremy Bilden (Vermont Chamber of Commerce)]: Well, I think this affects more than just retailers too. Could see restaurants that are impacted by and then you have, with local option taxes and meals and rooms taxes being different in every location, just having the consistency of, especially if a business has location in Burlington, and then they

[Chris D’Elia (President, Vermont Bankers Association)]: have a location in a

[Jeremy Bilden (Vermont Chamber of Commerce)]: place without a whole option tax, and then they have a spot somewhere else in the state with a different tax policy. Just having the consistency to be able to set those prices and to be able to determine that, I think, is an important thing to consider.

[Anthony "Tony" Micklus (Member)]: Okay, thanks. Yeah,

[Unknown Committee Member]: I would follow-up. One of the things that this is the final digit. Even after tax because you could do, you know, $5.99, which makes people wanna buy it more than if it was $6. Yeah. But if it was $5.99, or if it was $6, you add that tax on there, better yet, if it's a buck, and then you add the tax, which becomes a dollar 6. And that's where the rounding happens in the legislation. So it because there's no way to to well, there is a way. I mean, you could charge it like a 96¢ or 92¢ and automatically that would probably be more difficult for folks, I would suspect. But I think that's

[Chris D’Elia (President, Vermont Bankers Association)]: I get it. Am I correct

[Jeremy Bilden (Vermont Chamber of Commerce)]: on that? Yeah, and that would also require businesses to calculate that out for each location that they have to get that final price to be that five or that zero. So just with shifting prices and with shifting taxes in each area. With each individual product, whenever a product's price goes up or down, or whenever they're trying to figure out what they want at the end of sale, it would have to be

[Cameron Wood (Office of Legislative Counsel)]: every product, they wouldn't

[Jeremy Bilden (Vermont Chamber of Commerce)]: have to calculate that once they get it to that five or zero.

[Unknown Committee Member]: Yeah, I understand.

[Anthony "Tony" Micklus (Member)]: Other questions? Does the membership in the chamber don't have the same unfair and deceptive business practice that the retailers have. So be more interested in seeing it optional instead of paying the door.

[Jeremy Bilden (Vermont Chamber of Commerce)]: Yeah, think the unfair and deceptive business practices is definitely something that some of our membership would that would also be a part of the impetus for this bill. But I think that it's also another way of looking at it is another tool in the toolbox for businesses to be able to utilize in today's day and age. So it would be kind of that reassuredness of being able to use this tool and knowing that it's something that they can do.

[Anthony "Tony" Micklus (Member)]: Well, I mean, if you have pennies, you don't have to worry about it. But if you do run out of pennies, then you need something to fall back on. So this is the way the state of Vermont says, this is how you're going to do it. And you're following back on you tell your customers, this is how the state says we have to do this. And it takes that issue of unfair and disruptive business practice right off the table.

[Jeremy Bilden (Vermont Chamber of Commerce)]: Right, and I think that's

[Maggie Boutin (Vermont Retail Grocers Association)]: up to 10. I'm sorry, Bennington, on behalf of the Michael Boutin Association, I just want to clarify because I think it sounded like you said we were asking for the inventory, but we're very happy with this version of the bill.

[Anthony "Tony" Micklus (Member)]: Yeah, I'm just having a hard time making something optional, that if you're worried about unfair and deceptive business practice and you deviate from that, from that option, We'll talk with the Ledge Council, we'll talk with the AG's office as well. Any other questions for Chairman? Thank you.

[Zach Tomanelli (VPIRG, Consumer Protection Advocate)]: Good morning. For the record, Zach Tominelli. I'm the consumer protection advocate for BPIRG. The committee was us in. This was not something that was very much on our radar until a few days ago when we got invited, but I appreciate being invited to try and give a consumer perspective and I'm willing to do that on anything that's affecting consumers. I'll just start by saying that generally we're favorable toward this. I dug in on this a bit yesterday to see what sort of the consumer impacts would be. And it's not zero consumer impact. I'll touch on some of the research on that in a second. But generally speaking, and as you've already heard, this is the approach that more and more places are taking toward this as the elimination of penny becomes an issue. Canada eliminated their penny in 2012. This is the approach that they've taken in Canada. So it's the symmetrical rounding concept. And it's probably the fairest way in terms of addressing rounding. I could see how businesses could be interpreting right now with the lack of this sort of guidance that they might be. This is what I think was happening in Canada until they got this guidance that companies would round down because they did not want to potentially be liable for saying, we're always rounding up or if we're rounding up, that could be price discrimination, that sort of thing. And what happens there is then the businesses are absorbing the entirety of the elimination of penny cost and that can add up. This is the fairest way, and I say fairest with an asterisk there. There has been some research into this. The Richmond Federal Reserve looked at this and because most prices, and you've already observed this, often end in eights or nines, 9.99, And in the areas where there isn't a tax involved on that particular transaction, most, not a significant amount, but most transactions tend to actually round up under the system. So what they estimated is if you put this in nationwide, on average a year, it would be a transfer of $6,000,000 from consumers to businesses. That might sound like a big number, but nationwide a year, that's actually pretty modest. I bring this up not to oppose the bill or I just want the committee to maybe be aware of what research has been done on this and what's available. This is all in my written testimony. We appreciate that it contains some important consumer guardrails. Although I did know and ledge counsel brought this up and I didn't catch this, that it says that the notice could be point of sale or on the receipt. Think that would be a sensible change to just have it be at point of sale. If anything, it could create more confusion or more angst if somebody got the receipt after they've already paid and realized that it was revenue up or down. I think having that be at point of And then this question that just came up, this is not in my written testimony, but just the issue of optional versus mandatory. I think this gets a little confusing and I think Micklus actually addressed that whether or not you round being optional, I think makes sense. If you feel like you're going to have pennies and you're tracking that, I don't think that you have to round. But if you choose to round, having this be the method, I think maybe presents the most clarity for consumers, for businesses. Because you're right, in the absence, you say rounding is optional and you say this method is optional. If a business were to choose if they were choose to consistently round down, they would be eating losses, I don't think any consumer would bring soup. But if business chose to consistently round up, I think you could make the argument that that would be price discriminatory and a problem. So I think probably the way to approach it is making rounding optional, but if you choose to round, this is the method that the state of Vermont says that we've blessed basically. That would allow if it would actually then make it clear, think if a business choose to round and consistently round up that that is in fact actually an unfair and deceptive practice because they're going outside of what we said is the method for rounding. So that's probably how I would approach that.

[Thomas Weiss (Resident of Montpelier)]: Happy to take any questions. Questions for Zach?

[Unknown Committee Member]: I have a question. I don't know

[Speaker 0]: if specifically for Zach, but just in general. When we talk about it being optional, I mean, yes, I think that's great. But I mean, at what timeframe is it optional? As in, when I opened business at 07:00 this morning, I had a bunch of pennies, but I was out by 02:00 this afternoon, so now I'm going to switch to rounding?

[Unknown Committee Member]: Well, I think it's a

[Zach Tomanelli (VPIRG, Consumer Protection Advocate)]: fair question. So because this requires point of sale notice, I think you have to be prepared and make that clear that, okay, we're counting. So however you introduce that notice, I think would matter. So it could be, I guess, as simple as a sign that you put out at the till saying, We are now rounding. It's an interesting question to think, is it something that you're bouncing back and forth over the course of day? I would imagine, and this is where you would want to talk to business owners, it probably is just easier for them to just make a decision, are we a business that rounds or not, and have that consistency, just have that policy because you have to train your staff, your cashiers, wait staff, or whatever. So I think bouncing back and forth over the course of the day would probably be difficult, I would think.

[Anthony "Tony" Micklus (Member)]: Michael? I

[Unknown Committee Member]: would agree with you. The point of sale is the best way to do it. Plus, could reference that. Think of the credit card situation where folks were charging extra because of credit card. So the Treasury Department did provide guidance, which is what's in the legislation based on rounding.

[Anthony "Tony" Micklus (Member)]: We could even put something together working with the DFR, so actually put that into the bill as well. Here's how you post Other questions for Zion?

[Unknown Committee Member]: Thank you.

[Thomas Weiss (Resident of Montpelier)]: Thank you.

[Chris D’Elia (President, Vermont Bankers Association)]: Morning for the record, Christelia, President of Vermont Bankers Association, a crowd for a discussion of pennies. You're here to thank, some of your infinite wisdom made the decision down in Washington to implement a program without any thought as to fall out or repercussions of that implementation. Much. Isn't that amazing?

[Cameron Wood (Office of Legislative Counsel)]: We do feel Some like

[Chris D’Elia (President, Vermont Bankers Association)]: of the concerns about access to the pennies has already played out in the marketplace, although it is getting better. So if we all go home and grab our pennies and bring them to your bank or credit union and get them back in circulation, this might be a little less problematic. The challenge that we ran into is obviously they stopped minting pennies because it was costing close to 4¢ for the penny, which is not economical, gonna save about $56,000,000 to not mince pennies. When that decision was made, the Federal Reserve and their cash distribution centers started to stop the circulation of the penny, even though it is still legal tender. 119 of 165 centers, money circulation centers stopped circulating. That created the penny shortage in the marketplace for a lot of folks, retailers in particular. We did have situations in Vermont where financial institutions were struggling to get pennies delivered, and therefore merchants were not getting access to pennies to conduct transactions. So a bill like this would seem to make sense as you heard it is being discussed in other states and implemented in some states. The financial services committee in the house has passed a bill similar to what you have here, but it hasn't gone anywhere yet. They've been preoccupied with other issues, but there is at least a bill that was passed out of the committee down there. It's still got a long way to go, but that would have set some national guidance instead of state by state guidance, which is what we're facing right now. Think your discussion about discrimination, non discrimination an important one is and what are the mechanics of implementing this? Have no policy position on this bill, whatever you choose to do to support the business community out there, it would seem to be reasonable to put something on the table for them. I wouldn't call it guidance. I think they need something in Saskatchewan. Guidance is a little bit more open ended. Highlight Micklus here, folks, voluntary make the decision whether you want a round or not, and then if you are, you've got this policy to follow. But I think it's important to put this on the table because I can see where an individual who's got an EBT card goes in and pays one price, same classification, I don't wanna use classification, but the same characteristics of another individual who doesn't use an EBT card, but uses cash and goes in and pays, and pays a different price, I could see where somebody without some guidance could say, Hey, you're discriminating against me, even though I'm just like an individual. So I think it could be very helpful to send a signal out there. How you craft it ultimately in the end, you've got a very good start, but we would certainly not see any issues with you creating such a policy for my strategy.

[Unknown Committee Member]: Because it would be

[Cameron Wood (Office of Legislative Counsel)]: Are you suggesting, not suggesting anything, but

[Unknown Committee Member]: suggesting that it applies across the board versus just cash?

[Chris D’Elia (President, Vermont Bankers Association)]: Nope. I'm just making sure in response to the concerns about whether it's deceptive or not. If you and I are in the same income bracket, we have EBT cards, but you pay cash and I pay with an EBT card, okay? You might get rounded in a way that's not to your favor. Are you gonna say that you're being discriminated against because you paid with cash and I paid with an EBT card. So I think without some policy in place, that's just potentially an example as to why you need to view something to give the merchants and others clear a clear structure to follow so that they don't fall into that term.

[Anthony "Tony" Micklus (Member)]: And I

[Thomas Weiss (Resident of Montpelier)]: can go both ways. The gender means Correct. But

[Unknown Committee Member]: I mean, pointing that out, though, I I think that

[Cameron Wood (Office of Legislative Counsel)]: whether or not we should make it across the board versus just cash versus to avoid any confusion, electronic or cash, it's just round. You round it.

[Anthony "Tony" Micklus (Member)]: The the penny is in play if you're you're doing electronic transaction. Not in play with the use of cash.

[Unknown Committee Member]: Correct. But what I'm saying is that, I mean, if we we provide statute on it, we could do it so that it's both.

[Anthony "Tony" Micklus (Member)]: I don't know if Bank of America would agree to that or Citibank or any of the other national banks.

[Cameron Wood (Office of Legislative Counsel)]: Well, it it's taken care of at the point of sale, though.

[Monique Priestley (Clerk)]: Why don't we hang on to that question for AG or Ledge Council or something like that to talk about how that plays out?

[Anthony "Tony" Micklus (Member)]: So

[Unknown Committee Member]: how does the federal, the congressional finance committee bill compared to this?

[Chris D’Elia (President, Vermont Bankers Association)]: It's similar in taking what's called a symmetrical approach to rounding.

[Anthony "Tony" Micklus (Member)]: Nearest. One, two round, and three, four round off. Okay, thank you. Other questions for Kirk?

[Thomas Weiss (Resident of Montpelier)]: Thanks.

[Eric Allen (Association of Vermont Credit Unions)]: Eric Allen from the Association of Vermont Credit Unions. Thank you so much for having us. As you've heard from around the room, there has been guidance provided by the Treasury Department that is similar to this proposed legislation. I think we've heard that it would be helpful to the retailers and to restaurants to have guidance like this as they work with consumers and for consumers to understand what the process will be for them as opposed to not understanding as they approach the consumer. And so at that point, credit unions would be supportive. Of course, we would look to DFR for additional guidance in terms of how financial institutions would do this in practice. We have been surveying our members regularly to understand the impact of penny production. As you heard from Priestley earlier in late twenty twenty five,

[Maggie Boutin (Vermont Retail Grocers Association)]: the Federal

[Eric Allen (Association of Vermont Credit Unions)]: Reserve stopped distribution for the most part, or stopped honoring a request for coin distribution in terms of pennies. And so what we have seen in the state of Vermont is that in a reaction, consumers brought their pennies in to the coin machines. And so for the most part, credit unions have been redistributing that coin to meet member demands. What we have seen, however, is restrict some of that distribution to retailers. When they come in and request coin, we don't necessarily always have those rolls of pennies to give out so that they can use it in their own businesses. So we certainly anticipate that as this rolls forward over the course of the next several years, that it will become a bigger issue than it is today. But as it stands, we are able to maintain pennies as requested for our membership, and we're processing that in terms of cash distribution in the branches with what we already have on hand. But we are supportive in general of this draft legislation.

[Anthony "Tony" Micklus (Member)]: Questions for Carris? Thank you.

[Monique Priestley (Clerk)]: Thank

[Anthony "Tony" Micklus (Member)]: you. Rhonda, you've asked to weigh in.

[Thomas Weiss (Resident of Montpelier)]: I would like to. Thank you. Good morning. Thomas Weiss, resident of Montpelier. And as you know, one of my concerns in this committee is data protection and data privacy. And I would like to point out one of the requirements in H. Eight thirty seven, as it was introduced, It's on page three of the bill. It's subsection D, Optional Use, number two. This section shall not require a person or business to accept cash if the person or business has posted a clear policy stating that the person or business does not accept cash. I think that's inappropriate for this bill. I don't see how retail businesses that I walk into the store and do not accept valid US legal tender currency for purchases, so I would ask you to remove that subdivision too, so that it's silent on it, but you're not condoning or encouraging businesses who try to not accept US legal cards contenden.

[Maggie Boutin (Vermont Retail Grocers Association)]: Questions for Tom?

[Cameron Wood (Office of Legislative Counsel)]: Is that even legal to say you can't accept

[Thomas Weiss (Resident of Montpelier)]: I was just in a parking garage in New Hampshire yesterday, and they didn't want to let me out because I didn't want to use a credit card there. It said, The credit card's open. So I don't

[Maggie Boutin (Vermont Retail Grocers Association)]: know whether it's legal or not, but it's happening.

[Unknown Committee Member]: No, I was gonna say something snarky, but you know.

[Anthony "Tony" Micklus (Member)]: I'm barely in the way to that.

[Cameron Wood (Office of Legislative Counsel)]: To me? To me? No. I

[Thomas Weiss (Resident of Montpelier)]: do have one other comment. Forty years ago, was working as a civilian on a US military base in Germany. They had their marketing policy in place then because it was too expensive to shipped pennies overseas because none of them came back. There is a segment of the population who has had that experience, probably is still having that experience, with the grapple. It didn't seem to be a big issue. So thank you very much for hitting me in on short notice. Thank you, Tom.

[Anthony "Tony" Micklus (Member)]: Cameron, you'd like to Yeah, well that's about the questions that were raised. I think we will actually ask Deputy Commissioner from DFR to come in, someone from the AG's office to come and chat with us too.

[Cameron Wood (Office of Legislative Counsel)]: A few quick things in response to some of the discussion that's been had.

[Jeremy Bilden (Vermont Chamber of Commerce)]: As I mentioned at the beginning

[Cameron Wood (Office of Legislative Counsel)]: of my testimony, I'm not aware of anything that prohibits a business doing this or rounding in any way they can. I think comments from Ms. Delia outlined a concern that probably could exist. I would have someone who is perceiving at the point of sale some sort of different treatment based on how they're interacting with the purchase. Whether that rises to some discriminatory effect, it's obviously going to depend on the facts of the circumstance and what is the justification for the business and doing what they're doing. The business comes in and says, I'm rounding because physically can't get enough pennies to conduct transactions in pennies, and you're applying that same rounding in every cash transaction regardless of who the individual is on the other end of the point of sale, I think it's probably going to be a hard case to make that the business is somehow discriminating against you as an individual based on some characteristic that gives you protection. Think about discrimination. You need some sort of protective characteristic to be able to argue that you're being discriminated on the basis of that characteristic. I totally understand the fact that there is question out there among the community about whether or not that puts them in some circumstance that the argument could be made. And as you all know, of course, until a court makes that ruling and makes that determination, then it could be an open question. I do think, as it was brought up, if you're going to put something in statute to authorize a business to rat in a particular way, And I do think that then potentially raises a question if the business decides to round in a different way. I think it would interject some question, some legal question that doesn't exist now. A business wanted to round up all transactions to any amount. Somebody could argue, I imagine that there's some sort of hidden fee there and that's an unfair to set it back if you were to round up the transaction is $9.97 and you're like, okay, cost is $20 Where'd that come from? So I imagine if something like that were going on, there's probably a case to be made. I would need to go back and talk to the AG and do some further research on our statutes about potential hidden fees or some sort of deceptive acts there. But again, as I've kind of discussed, the business gets to set its own price as a general matter. So if the business wanted to go through and determine for every single price point in the store to calculate what the taxes would be and set the initial sale price at an amount that after taxes were charged would equate to an amount that rounded to a five or a 10. There's nothing that stops them from doing that. I imagine for a grocery store with I don't know how many hundreds of thousands of items possibly, that could be very difficult to do, especially with prices that go fluctuating daily, weekly, monthly, etcetera. There'd also be

[Anthony "Tony" Micklus (Member)]: a lot of inconsistency for national chains.

[Cameron Wood (Office of Legislative Counsel)]: A price chopper or Hanford, a lot

[Anthony "Tony" Micklus (Member)]: of times they set their prices at least regionally. And if

[Chris D’Elia (President, Vermont Bankers Association)]: you have one town that has a global option tax and the other one doesn't.

[Cameron Wood (Office of Legislative Counsel)]: Well, the global option tax is gonna affect the price regardless. But yes, you would have to factor that in, right, to the initial sale price as you're mentioning. If you have a local option tax or not, and I'm wanting the final price to be at a five or a 10, then I would have to figure that out based on the individual town. Yes, sir, totally understood. And that's my point. It could be very My point is there's nothing stopping them

[Anthony "Tony" Micklus (Member)]: doing that.

[Cameron Wood (Office of Legislative Counsel)]: As far as I'm aware, in statute, business gets to set the price. If they want to set it at a price that where the end of the transaction equates to something that doesn't result in a penny, I think they could. Very problematic, probably very burdensome to do so, depending on the town you're in, different taxes, etcetera. I'm just pointing that out because I do if you then put something in the statute to say, you may round, and you may round in this way, and then a business starts to round in a different way. Let's say if the transaction ends in a one or two and the statute says they should round down, but they start rounding up everything, everything gets rounded up to the nearest nipple instead of any rounding down. Does that then violate the statutory section? I would argue yes. So I do think if you want to go forward in that regard, probably worth having a conversation The talking PAG will ultimately would likely be some sort of enforcer here to determine if you authorize it, have a May of significance, business may round the CAF transaction. But to be very clear, if you both want, if you're going to round the transaction, then it shall be done in this manner to make sure there's no ambiguity there. So I think that may be worth further discussion and possible alterations to the bill just to make sure it's explicitly there. I do think that is a question. The other question I know that came up was about whether you could round electronic transactions. And that is something I would need to do some additional research on. Think you're when you get into that rabbit hole, I think you're probably layering on many more federal laws and federal regulations about electronic fund transactions. And so if you would like,

[Anthony "Tony" Micklus (Member)]: I could start going down the rabbit hole. But

[Cameron Wood (Office of Legislative Counsel)]: I would potentially, at the outset, keep the build away that it does. So if you can stay clear of that minefield, just allow the electronic funds to be transacted in The Philippines because there's no challenge that a business is trying to overcome, at least in relation to the cash transactions that you discussed.

[Anthony "Tony" Micklus (Member)]: Real quick.

[Unknown Committee Member]: I was the only person that asked that question and I don't think you need to spend your time on that. Treasury says that,

[Zach Tomanelli (VPIRG, Consumer Protection Advocate)]: yeah, but it's okay. Even though

[Thomas Weiss (Resident of Montpelier)]: I don't

[Zach Tomanelli (VPIRG, Consumer Protection Advocate)]: think it is.

[Unknown Committee Member]: Do you have time for one more?

[Anthony "Tony" Micklus (Member)]: Real quick.

[Unknown Committee Member]: All right. So is it the case then that there is no de minimis when it comes to consumer protection and that consumer protection goes down to the penny?

[Cameron Wood (Office of Legislative Counsel)]: I'm not sure I follow the question.

[Unknown Committee Member]: The point is that we will create statute to dictate down to the penny level. That's what I'm wondering, is if we have an obligation through statute to to have consumer protection get to this granular a level. That's what

[Zach Tomanelli (VPIRG, Consumer Protection Advocate)]: I'd like

[Unknown Committee Member]: to know.

[Cameron Wood (Office of Legislative Counsel)]: Okay, okay. You mean in the context of the rounding itself? If I'm interpreting your question, I don't think, off the top of my head, I don't think there's anything that would stop you from just saying that a business may round to the nearest nickel and leave it at that. And then businesses may determine it's in their best interest to always round up because they're going to get a few more pennies per each transaction by doing so. So I think it's really a policy decision for you all if you want to mandate that if the final transaction ends in a digit that ends in a one or two, it has to be rounded down, six or seven rounded down, the versa, rounded up. If you wanted to get to that level of detail of what the transaction ends per penny, I think you can. That's what I've seen in the other states. I don't recall seeing one that didn't identify at that level. But ultimately, I think if you wanted to have a broader statement that authorized a business to round to the nearest $05 and do not specify that it needs to be down in certain instances and up in certain instances, I'm not aware of anything that would perhibit people doing that either. I think that answers your question.

[Anthony "Tony" Micklus (Member)]: We have to get to the floor, so we'll come back to this at the end of the week. The AG can have BFR come in chat with us more about it. Think because Maggie had suggested we're looking at s three twenty seven vehicles focused. Any questions, committee, before we go to the floor? So we're on the floor of the much shorter floor committee than we've been accustomed to. And so we'll have lunch, Caucasus lunch and back here at one.