Vermont Legislature SmartTranscripts:

[Michael Marcotte (Chair)]: Good morning, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Wednesday, 04/15/2026, our welcome tax day at 09:02 in the morning. So we're beginning our day with S-one 198, which is an act relating to the regulation of tobacco products and tobacco substitutes. We have our legislative counsel with us, Jen Kirby. Jen, if you'd like to join us. We wanted to see if the draft and see if the committee is ready to approve this bill. Thank you for joining us.

[Jen Kirby, Legislative Counsel]: Morning to Anne Hartley from the Office of Legislative Council. We've got a new grant for you that is on Earth permitting. What page know do about changes? Some great collaboration with the General's Office and the Department of Labor and Laboratories. They've been also a tip for advocates, although I'm not sure. So this is an act relating to the regulation of tobacco products and tobacco substitutes. It is a strike all amendment and I'm not shown any changes are highlighted in yellow. Of it is language to just come out of the bill, not necessarily to be struck from the statute for this first section, and you'll see new language is in bold. So first we start off with the chapter on tobacco products, 70 BSA Chapter 40, and start out by striking out of the bill, but not out of law, the definition of tobacco license. And that's just because after discussion, really none of these changes felt appropriate for this definition. So we're proposing to just keep the definition as it is in statute and take this provision out of the bills. Next, we get into, we leave the definitions section and we get into the license required for retail sale. This language would update the expiration date language for tobacco licenses and tobacco substitute endorsements. Current law says they expire at midnight April 30 of each year, which I think used to be the way many or all of the department's licenses work. But for quite a while now, they've all been valid for one year from the date of issue. So this kind of a change to update to in practice. Also, is some discussion we've talked with Bill the first time about decoupling the liquor and tobacco licenses, and there were some additional changes that needed to be made to carry that. So first, we're just striking a reference to if there are licenses being issued under this section because they're issued under a different part of Title VII, and then just making one sentence licenses. List issued under this section will be entitled tobacco license and the endorsements will be entitled tobacco substitute endorsement. Now we have the fees, some additional cleanup language here for a tobacco license or tobacco substitute endorsement. The person still applies to the legislative body of the municipality and pays fees. But under existing law, it says they pay to the Division of Liquor Control, they've took the liquor license fee. Again, we're just looking here to separate liquor licensure entirely from tobacco licensure. Then under existing law also, the fee in its pension is paid to the legislative body of the municipality, which then forwards it to the Department of Liquor and Moderate, actually the Division of Liquor Control to deposit in a particular fund. Since the use of online payment has gotten a lot more straightforward and you don't have to do the paid municipality to give it back to DLL to deposit. So this is again catching statute up with the flow of funds now. So now the version would still apply to the municipality and pay a fee, but they would pay it to the Division of Liquor Control and we're using these same fee increases that were in the bill that came over from the Senate, up to 150 for tobacco license, dollars 75 for tobacco substitute, and getting rid of this requirement in existing law that the municipal clerk forwards fees to the commissioner and instead just using language that tracks the liquor licensure language as well, saying that the fees collected will go into this existing liquor control enterprise fund. But this is largely a cleanup that we are doing in this section. Pause because I see the chairman had a question. So

[Michael Marcotte (Chair)]: when we strike the language out from line one that section A, You're striking out the applicable liquor license fee. Is that somewhere else?

[Jen Kirby, Legislative Counsel]: Yes. So as I understand it currently, if somebody is getting a has both a liquor license and a tobacco license, they pay the liquor license fee. And then they may also pay additional amounts to the municipality. This is just separating those. So the tobacco license fee is the tobacco license fee and liquor is handled separately.

[Michael Marcotte (Chair)]: Okay, and that's in the underlying statute?

[Jen Kirby, Legislative Counsel]: Yes, it's in the liquor statutes in Title VII. Okay, Thank you. Wholesale dealers, I think there's just one small change here, which is, and you heard testimony from the department last week that the license fee should be equal. So this would now have both wholesaler license, the license fee would be $15.45 dollars annually for each other. Subsection C, penalties for sales without a license, we noticed as I was walking through this the other day, have to look at maybe what it says in the existing tax law, but it should be that somebody who is selling without a license is subject to civil penalties and you can't be a licensed dealer selling without a license. So struck licensed here. And then keeping the language the same as we saw for the retailers around the term of the wholesaler license. So each license will be valid for one year from date of issue under the existing regulation of wholesale dealers by the tax department. They just get a license. There's no charge for the license and they get it once they treat it. So this would be a bit different, but keep the wholesale licensure for the tobacco wholesalers under TLL consistent with the retailers. Right, next we get to section 1,005. This is where it was removing the prohibitions and penalties for persons under 21 years of age who possess, purchase, or attempt to purchase tobacco products. Main change here is just changing and sort of consistent throughout. We're talking about what can only be an individual human, changing persons to individuals, recognizing that under Title I, person can move entity. So again, I'm gonna need that same team chair. There was some discussion offline that I think is going to come up in the Human Services Committee around how to address confiscation of items that may be possessed by minors if there is no prohibition on their possession. So that's maybe a conversation for upstairs. Wanted to flag that that is still under consideration. The penalties for selling to a minor, this is arguably a substantive change. So I wanna flag it here. This is changing from a person that sells or furnishes these items to someone under 21 years of age being subject to a civil penalty to an individual. There was discussion that in practice, this penalty is imposed on the clerk because of the traffic ticket. It's brought in the same manner as a traffic violation. And so this is reflecting that practical reality. Although I think there may still be again some discussion in committees to come. I'm not sure that was a universally agreed upon change. Yeah, I guess- And it may not be what this committee wants either, but some of the advocates I know were not involved.

[Unidentified Committee Member]: Yeah, so I have a pause here because I'm wondering if a business, so a person that has a number of individuals who end up with tickets, how does that work? And is that addressed anywhere? So if the

[Jen Kirby, Legislative Counsel]: business Sort of repeat violations? Yes. Yes, that is language I think is what gets cleaned up in the next subsection. Just trying to make that a little bit clearer that once there's a second violation on the same premises, they start to incur the multiple offenses against the retailer.

[Unidentified Committee Member]: Okay, but an individual, the first offense is against an individual and multiple offenses are against business.

[Jen Kirby, Legislative Counsel]: I think many times, so I may want the department, maybe I'll just go to the department to weigh on this one. There's always a ticket for the clerk who sells to a minor, but there may also be penalties for multiple violations against the retailer or something else.

[Hannah (Department of Liquor and Lottery)]: I'm happy to explain. So let hand it over to the fair and moderate. There's a couple of different environments that we're talking about in town as Kevin. 1007

[Jen Kirby, Legislative Counsel]: is a noncompliance check environment. So it's when

[Hannah (Department of Liquor and Lottery)]: it's in the wild, I guess. It's the clerk if an agent, sorry. If an individual in this case, if individual sells people minor, they receive what becomes essentially a traffic ticket. It's issued to a clerk. What is not contained in statute in 1007 is an administrative penalty that the Board of Liquor and Library has the authority to also assess to the licensee.

[Rose Kennedy, Assistant Attorney General]: So if a clerk makes a sale

[Hannah (Department of Liquor and Lottery)]: to a buyer, they get a ticket, the licensee also gets defined. What's contained in 1,007 is that compliance check environment, and that's I'll let Jen walk through that before we discuss. But I want to be clear that 1,007 is ticketing the individual that makes a sale just because it doesn't also statute really define the violation penalty for the licensee. It doesn't exist. It's just

[Jen Kirby, Legislative Counsel]: under the discretion of the board. That's helpful. Yep. Thank you. And so there had been in the language that came over from the Senate, like this is highlighted, but with nothing else, it had struck the not more than $500 for any subsequent events. So this is putting that back in. I think that was based on my misunderstanding of who the subsequent penalties were applied to. So this would now say that an individual who sells or furnish these items to a minor subject to a civil penalty of not more than $150 for a first offense and not more than $500 for any subsequent offense. And it's taking out what was going to be added about the retailer, even though that's still in there, but just because we're talking about two different parties. Again, it uses the judicial bureau and the traffic ticket, traffic violation process. And then in trying to create some more clarity, it says in addition to the civil penalty imposed against an individual for violation under sub division one, or any subsequent violation, the licensee may be subject to an administrative penalty and license suspension or revocation as set forth in subdivision fee two. Trying to create a little bit more awareness of who's subject to what. Then just changing some person, most of these changing person to individual does not have any substantive impact because the prohibition is on, you can only have individuals 21 years of age.

[Michael Marcotte (Chair)]: But when we say persons, persons can also be duration too.

[Jen Kirby, Legislative Counsel]: Right, so that's why, the one that is arguably substantive is up here where it goes from person to individual. The rest of these, I skew as more cleanup changes because you may not have a corporation 21 thirds of age prohibited from purchasing. I don't understand that to be any type. And then this is striking in Subdivision B2. So let me just give context. Subdivision B1 is directing the Division of Liquor Control to do compliance tests of tobacco licensees and as frequently as necessary to ensure statewide compliance with prohibition and get at least 50% compliance for buyers between 17 and 20 years of age. And then in Subdivision B2, any violation by a tobacco licensee of subsection 1,003 A, which is the prohibition on selling to minors, or this section after a sale violation or so subsequent violation or during a compliance test. And this would strike out the six month window and just say after a previous violation. So it widens the scope of that compliance test shall be considered a multiple violation and results in, the department requested that this be an administrative penalty, not a civil penalty. So it results in the following administrative penalties and minimum license suspensions for revocation. And then it has the same, everything the same as what was in, what came in from the Senate, except it's changing from an administrative penalty. And it's saying not less than, so it's setting a floor for the penalty, not less than $1,000 for a second violation and going up through the multiple violations. So the changes again are changing from civil penalty to an administrative penalty and setting the penalty amounts as a floor rather than a specific fixed dollar amount.

[Herb Olson (Member)]: In any of the other committees, would you have any consideration given to optional penalty, administrative penalty?

[Jen Kirby, Legislative Counsel]: No, because so far these have been set dollar amount penalties, so there was no floor or ceiling.

[Herb Olson (Member)]: Right. But now we're changing it to the floor. I guess, yes.

[Jen Kirby, Legislative Counsel]: So that would be so no other committee has discussed it. This committee could discuss it.

[Michael Marcotte (Chair)]: Thank you. So that means that there's a floor but not ceiling. Right. So then it's up to to determine if it warrants a higher penalty. Yes.

[Jonathan Cooper (Member)]: The other thing is fifth violation, it's a revocation of the license, means at that point, you're no longer licensed. So there's no licensee defined, so to speak.

[Jen Kirby, Legislative Counsel]: Not after that. Right. Yes, so this committee could make different choices. I think this was the recommendation from the stakeholders I was working with or many of them. So moving back to the committee, we'll keep going. Contraband and seizure, just making for the editors some medical punctuation updates. Otherwise note to expire. Section ten ten is the ban on internet sales. And so this is attempting to get a little bit more clarity on what was, the change that came over from the Senate means. So first it's just saying except as provided in subdivision two, no one can cause any of these items to be shipped or ordered online to be shipped to anyone other than a licensed wholesale dealer. And under current law, it says retail dealer. And the bill has came up with the Senate strikes retail dealer. And then subdivision two here says that prohibition does not apply to a licensed wholesale dealer. So Vermont licensed wholesale dealer shipping directly to a Vermont licensed retail dealer in the state. So if Vermont to Vermont in the state want to do some of that work online. This is not prohibiting that. Then we get to section 10.13, deceptive tobacco products and tobacco substitutes prohibited. And this first is adding to what is prohibited, possessing for sale in addition to offering for sale. So small distinction, but that a retailer should not have on premises. No person should possess for sale these deceptive items. And a conforming change to say subsection. And then this is language that the Office of the Attorney General had requested for enforcement. And it is somewhat similar to the online sales enforcement language. This says in addition to or in lieu of any other civil or criminal remedy provided by law, on determining that someone has violated this section, the attorney general can impose a civil penalty in an amount not to exceed $5,000 for each violation. And for purposes of this subsection, each instance of all of those prohibited activities constitutes a separate violation. And in any action brought under this section, the state is entitled to cover the costs of the investigation, expert witness fees and the action itself and reasonable attorney's fees. Also has a person who violates this section committing an unfair and deceptive practice in commerce, in violation of the Consumer Protection Act. And in addition to the penalties and remedies described in subdivisions one through three, the Attorney General has the same authority as provided under the Consumer Protection

[Unidentified Committee Member]: So, sorry, we talked about possession, not possession for sale. So can these devices be confiscated? No, not under this. I mean,

[Jen Kirby, Legislative Counsel]: they can if they're contraband and they have been possessed for sale and violation of ten thirteen that is in here, but somebody walking down the street with one of these, no, would not have it confiscated. It would be illegal to market, promote, label, brand, advertise, distribute, possess for sale, offer for sale, or sell. So it's all commercial.

[Michael Marcotte (Chair)]: I think there will be a discussion in the human search. I'm not sure why Individual that should be possession. And confiscation. Jonathan? Do you help

[Jonathan Cooper (Member)]: me understand a little bit those possessed for sale, office for sale or sell? Help me understand the differences between those three.

[Jen Kirby, Legislative Counsel]: I will give you my thoughts and then you may wanna hear from the department or the attorney general's office on what they So to me, possession for sale doesn't necessarily mean it's out of the floor. It doesn't mean it's distributed. It may be in the back room, but available to be sold. Offer for sale could be whether it's advertising on the shelf and then actual sale is Transaction selling. Okay. Great. Alright. Anything else on Just

[Michael Marcotte (Chair)]: on

[Herb Olson (Member)]: subdivision, I'll leave there, I guess. By saying that person evaluates, etcetera, I'm very dissent. The whole structure of it looks like it's attorney general enforcement only. I wasn't sure whether that Subdivision 3 is consistent with that concept.

[Jen Kirby, Legislative Counsel]: I'll leave a name for the attorney. I mean, the attorney general's office enforces the consumer protection.

[Herb Olson (Member)]: Well, there are also provisions for other people to enforce

[Michael Marcotte (Chair)]: the act, I think, too. I think what we've heard from liquor lottery is that if their investigation turns up anything, they then turn it over to the Attorney General's office. I understand. But it's also open to any legal remedies that DLL has as well as the attorney general does.

[Jen Kirby, Legislative Counsel]: Right. This is in addition to or in lieu of any other civil or criminal remedy provided

[Michael Marcotte (Chair)]: by law. We'll we'll hear if we can the interim.

[Jen Kirby, Legislative Counsel]: Great. Then we just have section number changes around the judicial bureau. Section three is a new section, so I didn't necessarily highlight the entire thing. I just put new and then I'm making changes here. These are some additional conforming changes requested by the department to clean up some of the provisions of their statute. I'll let them explain to you more what that is. The first is just, I think clarifying that sometimes it's the control commissioners, these are the municipal labor control commissioners as applicable or the Board of Liquor and Lottery having the power to suspend or revoke any permit or license. And the rest of this is all existing law. And then this is largely taking the tobacco pieces out. So talking about it under existing law, a tobacco license may not be suspended or revoked for a first time violation. And while that may still be incorporated, it doesn't need to be addressed in this part of the statutes. And then in subsection B, the interesting language says, in addition to the authority to suspend or revoke any permit or license, the board of the current lottery can impose an administrative penalty. And I think this panel was referring to before that the board has this discretion to impose an administrative penalty against holders of various licenses. So this adds a holder of any tobacco license or a violation of the conditions of the license or this title or any board rule. And then this would strike the language, specific language around tobacco licensees. So the fact that the board may also impose an administrative penalty under this subsection against a holder of tobacco license of up to $250 for a first violation and up to $2,500 for subsequent violations. In chapter 40 on the tobacco licensees. So that is what the department is wanting to focus those on. And then striking language saying for the first violation during a tobacco or a compliance check during any three year period, the licensee or permit shall receive a warning if you're required to attend a division server training class. And I haven't left the department telling you that one because I don't think

[Jonathan Cooper (Member)]: we talked about it.

[Jen Kirby, Legislative Counsel]: So I don't know if you wanna hear from them now or when. Going. I think that may actually be the end of changes. Is that true? Yes. That was the end of the changes.

[Michael Marcotte (Chair)]: Thank you, Jen. Any questions for Jen? Thank you. That's a great question. Anna, would you like to join me?

[Rose Kennedy, Assistant Attorney General]: Morning.

[Michael Marcotte (Chair)]: Good morning. Morning.

[Jen Kirby, Legislative Counsel]: Good So

[Hannah (Department of Liquor and Lottery)]: again, I'm Chomaine, Department of Liquor and Moderey. I'm joined by our deputy chief of enforcement for anything. Thanks, John, for the great walkthrough. Don't think I have anything particularly substantive to add. Happy to answer questions. I do want to talk about the changes to 02:10 that Ben just touched on. So for those following along closely, you'll notice that the penalty amounts that are proposed in 1007 are in excess of what is constrained in 02/10, which caps it at $2,500

[Michael Marcotte (Chair)]: for a

[Hannah (Department of Liquor and Lottery)]: subsequent violation. The proposed amounts in this bill are in excess of that, so we thought that it was perhaps good to have consistency amongst our statutes. Pieces that you've is really clean up. The enforcement paradigm of the department is rooted in education as prophylaxis. We do a ton of education. We have an education department. We have trainings and pamphlets and flyers, and that is really the core of the enforcement work that we do. However, we don't believe that training should be a replacement for accountability in the case of a violation. So that is the rationale for the requested appeal of the striking for the first violation during a tobacco or compliance strike during any three year period, a licensee or permittee shall receive a warning and be required to attend the division server train unless licensees are already required to attend a variety of trainings. Other than that, the two ten changes are really just clean up, clarifying that the Board of Liquor and Lottery may impose an administrative penalty of up to $7,500 so there is a sink, on any of our licensees, including first, second, or third class liquor licensees, a

[Jen Kirby, Legislative Counsel]: holder of a tobacco license, or holders of wholesale dealer licenses, which you would have for any tobacco wholesalers.

[Michael Marcotte (Chair)]: Nope. Here?

[Hannah (Department of Liquor and Lottery)]: Randy, do you

[Herb Olson (Member)]: any questions? Do you have any? Yeah. So we're if changing it to administrative penalty with four, one would be considering having some sort of maximum amount, do you have any suggestion?

[Hannah (Department of Liquor and Lottery)]: So we already have a maximum amount in sector in 02/10, it's only $500 I believe that the rationale of giving the board some discretion to set the penalties was that it is within the authority of the board to cut discretion to second. So I

[Unidentified Committee Member]: don't want to speak for our

[Jen Kirby, Legislative Counsel]: Board of Liquor and Legrand,

[Herb Olson (Member)]: what they would

[Hannah (Department of Liquor and Lottery)]: consider to be a rational sealant.

[Herb Olson (Member)]: So I guess, guess, what is the 75,000, 7,500?

[Hannah (Department of Liquor and Lottery)]: It's in seven BSA two ten.

[Herb Olson (Member)]: 21077? Yes. Okay. Thank you.

[Michael Marcotte (Chair)]: Good question. And in page 15, the whole consumer protection piece that have been put forth by the Attorney General's office?

[Hannah (Department of Liquor and Lottery)]: I would really refer her to the Attorney General's office, but

[Michael Marcotte (Chair)]: I don't believe. Okay. Just want to make sure that DLOs are fit in support of

[Hannah (Department of Liquor and Lottery)]: We look forward to continuing our great relationship with you.

[Michael Marcotte (Chair)]: Any other questions for Hannah? Okay. Where should we go in?

[Rose Kennedy, Assistant Attorney General]: So Rose Kennedy, Assistant Attorney General.

[Michael Marcotte (Chair)]: We anticipate Come right up, Rose. Okay. Thank you.

[Rose Kennedy, Assistant Attorney General]: So section three, we anticipate that functioning pretty much like the online sales work functions. So we get cases from DLL all the time. And then we pursue civil matters and we have authority under the delivery sales ban statute and the consumer protection statute. So to the extent your question, if there's other folks who have authority under the consumer protection that wouldn't interfere with it, but that's how we envision these cases rolling, like investigations probably stemming from DLL or phone calls from schools. And we have our own investigators and sort of pursuing cases that way. So if, no, Parent, sorry.

[Herb Olson (Member)]: You sold some market, would they have an opportunity to litigate under the Consumer Protection Act?

[Rose Kennedy, Assistant Attorney General]: I think there's an argument that they do. We would hope they'd come to us and let us do it.

[Herb Olson (Member)]: Cheaper, nothing else. Great.

[Michael Marcotte (Chair)]: Okay. I think, Herb, your other question was maximum Well, whether or not DLL has authority as well. Maybe, Hannah, you can So what under this retailer that's that's caught up in what the AG's office is under consumer protection. But are there other laws under under liquor control that you also can apply, which I believe can?

[Hannah (Department of Liquor and Lottery)]: Believe they would be in violation of the terms of their license. So they would assess the associated Yeah, I

[Rose Kennedy, Assistant Attorney General]: mean, maybe there's a way to make that clear about selling a deceptive device is in violation of the license agreement. But I think that's our working knowledge. That's how DLL would go after them, but it'd be a violation of their license agreements and sell these products that are banned.

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: Yeah, Brandon King. I'm the Deputy Chief of Enforcement at Lindbergh Laundry. Just to clarify, for an illegal activity, we have a rule that says licensors cannot obviously conduct illegal activity. And under this provision, a sale of an item that is prohibited would be illegal. So we have a fine for that that would be assessed to the licensee for anybody that is licensed towards the department. And

[Michael Marcotte (Chair)]: then referred to the AG's office for further investigation prosecution possibly.

[Herb Olson (Member)]: Yeah, and I think that's what someone was referring to, section seven ten. That seems to deal with licensees, whereas some of the provisions of bill talk about individuals. So, again, I'm not concerned. I'm just, you know, just structure of whether there should be any maximum administrative penalty with instructor.

[Michael Marcotte (Chair)]: I

[Herb Olson (Member)]: don't have necessarily any particular opinion, just was wondering if you folks had some idea, if you did wanna have a maximum, what would be appropriate for an individual? Yeah, because seven ten does say administrative penalty up to 700. So I think that covers the licensee.

[Rose Kennedy, Assistant Attorney General]: I you know, we haven't had discussions specifically on that, but, obviously, that's in your discretion. We support

[Herb Olson (Member)]: that constitution.

[Michael Marcotte (Chair)]: It's just wanted us Yep. So if we're talking about possession by an individual, or

[Herb Olson (Member)]: sale by an individual, it was that section where they, you know, first, second, third, I think, and change it was individual. Mean,

[Hannah (Department of Liquor and Lottery)]: But that's

[Michael Marcotte (Chair)]: there's also discussion of possessions, which right now, it's not covered in the bill. My understanding is that human services, I think, can be looking at that as well. It's more of an overview than ours.

[Rose Kennedy, Assistant Attorney General]: And as a practical matter, I think if we were looking at an individual, we would use the statutory guidance under the licensee, fax, as guidance as well, the 7,500.

[Herb Olson (Member)]: Okay. That's right.

[Michael Marcotte (Chair)]: Yeah. I don't know that I see the AG's office going after a clerk that sold an illegal paraphernalia that was put out there by their employer. I think the employer is the one that's going to

[Herb Olson (Member)]: take the rat for that one and not the the clerk. Yeah, I would think. Know, I'm just kidding. Yeah. In the weeds, I think about this and trying to get make sure we get it right.

[Jonathan Cooper (Member)]: Further up question, and perhaps, which individual is giving testimony is the best person to answer this. That's ten ten, insurance sales. Yeah. And the inclusion of the two, the prohibition set forth in subdivision one of this subsection shall apply to a licensed wholesale dealership and directly to a licensed retail dealer in this state. Can I just try to understand what is the impact of that, this? Think we

[Rose Kennedy, Assistant Attorney General]: Sorry, I think we wanted to make it really clear what the chain of supply was. And so our concern was that under current law, there could be a lot of retailers potentially getting vapes online. And so by making it very clear that you have to go to a licensed wholesaler and then a licensed retailer, that we will know exactly where this particular bait came from and whether the taxes have been collected. Okay,

[Jonathan Cooper (Member)]: it's so provision for some section one concludes by saying that none of these things, no breach shall cause these to be shipped to anyone other than a licensed wholesale dealer in this state. So those activities continue because it's going to a licensed wholesale dealer who have some knowledge of what they're going to get in our future, that that knowledge continues on.

[Unidentified Committee Member]: So I have questions on that same section, and I'm wondering if we may need to add a sentence about deceptive practice if there is a business person who pretends to be a licensed wholesale dealer online so that there is some kind of clear understanding that there is an extra violation for them. And I don't know if that's necessary or not, but I feel like if we're adding this provision So I think we capture

[Rose Kennedy, Assistant Attorney General]: it because DLL will have the license records. So now if someone This happens where we track a sale from online to Vermont and the defense says they said they were a retailer, we can verify whether or not they were a licensed retailer. So I think we cleaned it up a bit, and I think it secures being able to pin down who's a retailer and who's not.

[Unidentified Committee Member]: Okay. We've had other testimony that anyone can create a website that looks like it's not And what it so it's that piece. I'm assuming you're going to order online. You're not going to make a phone call and order.

[Rose Kennedy, Assistant Attorney General]: But if they're not licensed through DLL, then whether or not they look like a retailer online, well, they're to us.

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: I think that that part with DLL, getting the licensure of wholesalers is really going to help, to your point, right? It's all of our licensed data is publicly facing. If retailer, as an example, has a question about whether they are ordering from a legitimate wholesaler or not, they could come and ask the department and we could say, yes, that seller is actually licensed by us. You're good to order from them. Where right now where the wholesale licensure is under tax, tax considers that kind of private tax data. So that's really not publicly available unless the wholesaler chooses to disclose that on the tax website. So there really is this ambiguity right now with retailers about who is legitimate and who is not in the wholesale tobacco space.

[Unidentified Committee Member]: I guess I'm coming in from a little bit of a different perspective, which is, yes, now I understand it's better for the businesses that are trying to do the right thing. Totally appreciate that. My concern is that there might be somebody out of state or not licensed selling. And if we have an ABC wholesaler licensed in the state, they could create a website that is very similar to that, that a licensed retailer would buy from and think that they're buying from a place that is not that actual place. That's the kind of thing that I'm wondering if there's another sentence or two that would make sense here. Just don't want to open up a new avenue that we weren't able to see.

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: Think maybe something that might satisfy the intent of what you're trying to do there was you know, say something about wholesalers must present their license on their website or their license number through DLL. I'm not sure exactly what that language would look like, but I think that might help your point a little bit. Think fraud detection in that space with somebody just setting up an illegitimate website is really difficult to address. If somebody's going to do that they're going to do it. And I think yeah, I mean, that's the only thing I can think of right now that may account for that, right? I think, you know, we could certainly once we get licensed to our wholesalers, I do anticipate like we're going have to develop some administrative rules around what we expect from these wholesalers. We don't have that right now because we don't license them. So that could be something that the department looks to do with our administrative rule around our expectations around these new licensees. Like with any liquor or tobacco license that the department issues, they have to post publicly post their license. So in the online space, that's a little more complicated. Maybe we could, as an example, have a rule that says that license has to be available on your website or something to that effect.

[Unidentified Committee Member]: Yeah, which you're going to want to think through that in ways to make sure that it doesn't come off the phone.

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: Yeah, so

[Unidentified Committee Member]: for me, this takes me then to the do we have enough online enforcement? Because that's the piece that I worry the most about and that I hear the most about, that that's where folks are following our laws the least, is by purchasing online. And so I'm hopeful that we can add more online enforcement

[Michael Marcotte (Chair)]: through this process.

[Unidentified Committee Member]: I just see so many ways that this can be misused or worse. I

[Rose Kennedy, Assistant Attorney General]: will tell you, was talking to an attorney yesterday representing a website that sold into Vermont. And she was telling me that she was lecturing her client that Vermont takes its law seriously. And if they had called her beforehand, would have definitely made them look up Vermont's delivery sales ban because she knew we had a reputation of finding folks who sell into our state. So that narrative is out there to some degree, but it's still a big, big online

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: world.

[Rose Kennedy, Assistant Attorney General]: Yeah, it's a huge win. Right.

[Michael Marcotte (Chair)]: One thing I worry about is by posting your license number, it's the same as your driver's license or your social security number or anything. Somebody can steal it and purport to be the company they're doing illegal stuff. There's a lot to think about, I think, when we start saying we need, you know, maybe the last numbers of the license or something, and there's proprietary numbers in between, I don't know. I think those are things that need to be thought about. I don't know that we need any foreign language or not. Maybe talk to Jen about that.

[Rose Kennedy, Assistant Attorney General]: It might be something, not to speak for DLL, but it might be something that goes into their education piece about buying online.

[Michael Marcotte (Chair)]: Yeah, I think retailers will have to be educated to now know who you're buying from. It's kind of like the banks, you need to know your customer. So now you need to know your distributor, especially if you're purchasing online. Because if we have wholesalers that are in other states that become licensed in Vermont to sell vapes, where a retailer can order them, they need to know that that's a licensed distributor. Yeah, there's a lot to think about.

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: Just to be clear, that happens There now, are wholesalers out of state that the tax department licenses.

[Michael Marcotte (Chair)]: Yeah, but I as a retailer wouldn't know that.

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: Correct. In some instances, yes.

[Michael Marcotte (Chair)]: So I think it's

[Unidentified Committee Member]: important. It might just be you have a list and they get the links through your website. And that's the only safe way to get to contact. Might be.

[Brandon King, Deputy Chief of Enforcement, Department of Liquor and Lottery]: Yeah, I think obviously not just me making these decisions, we need to think about this a little bit with this new, and that's why we asked for some time before this goes into effect 07/01/2027 to get us the ability to think through all these problems and develop some rules.

[Michael Marcotte (Chair)]: Else want to testify? Do we want to do we wanna add language? Do you think we can add language? Good. Good. Believe it's rule of education, I guess.

[Herb Olson (Member)]: Herb? So I wouldn't mind some sort of cap on the administrative penalty. I don't know what it should be. There's a reference in the administrative penalties for licensee is 7,500, maybe that's appropriate, just my opinion.

[Unidentified Committee Member]: In which section?

[Herb Olson (Member)]: Let's see. It's one, two, three.

[Michael Marcotte (Chair)]: It's earlier. The one with 11? The violations? No. No.

[Herb Olson (Member)]: I think it was I don't know. I'm sorry. Maybe it is 11. Should just gotten there. Gotcha, sorry.

[Michael Marcotte (Chair)]: I have to look,

[Herb Olson (Member)]: that's not gonna, why not succulent. And white? Is that for individuals or that's for white space? And why? Oh, is individuals. Yes, you're right. I'm sorry. Yeah. So first, it's changing it from to individual administrative penalties, not less than 1,000, 2,000, 3,500, 5,000.

[Michael Marcotte (Chair)]: Yeah.

[Herb Olson (Member)]: I I don't I don't really have any.

[Jen Kirby, Legislative Counsel]: I have a mask. I say, well, I have a mask on. Well,

[Herb Olson (Member)]: I'm just more comfortable with an administrative agency imposing fines if they know what the families are.

[Michael Marcotte (Chair)]: We just cross reference?

[Jen Kirby, Legislative Counsel]: Yeah, so we've done Kirby legislative council. I'm gonna put the language back up on the screen because I wanna make sure we are all talking about the same

[Herb Olson (Member)]: I don't care if it's higher.

[Jen Kirby, Legislative Counsel]: Because I think there is an existing camp of $500 on the penalty for the individual multiple violations. It's just the, so those penalties with the floor are for the licensee. That's correct. Under, so in the field here, the individual who sells our furnishings, civil penalty, not more than 150, so the person who's not more than 500 out of the house, right? That's not changed from current law. Down here, when we have the compliance testing and then any violation by a licensee shall be considered a multiple violation. And that's where we get into these floors. That's on the licensee, the retailer, not the

[Herb Olson (Member)]: Oh, and that's why seven ten would cover that.

[Jen Kirby, Legislative Counsel]: That's why two ten's 7,500

[Jonathan Cooper (Member)]: Yeah. I think you

[Jen Kirby, Legislative Counsel]: could create more clarity about how this

[Herb Olson (Member)]: That's fine. I was getting confused as to whether those floors were applicable to an individual.

[Jen Kirby, Legislative Counsel]: Not to the clerk.

[Michael Marcotte (Chair)]: Okay. Thank you. Good. What do you I just the only concern I have, and

[Jonathan Cooper (Member)]: it may be out of our jurisdiction, is that we can't confiscate if they find a child or a person that would

[Michael Marcotte (Chair)]: be discussed at the convenience

[Jonathan Cooper (Member)]: of services. Okay. Because I think we should at least I I can't go to Yassup until we can at least confiscate, you know.

[Jen Kirby, Legislative Counsel]: I think the issue was, and what I was discussing with the stakeholders, is there was interest in confiscation language, but it becomes difficult to confiscate something that you have not prohibited possession of. So then you end up undoing the repeal of the prohibition on possession, which was not necessarily universally agreed to. So I think that's, in my mind, those are the questions you have to answer is do you to contestate? In which case I think you need to prohibit possession or somehow make it so that they're not just taking away something that is lawful. Right.

[Michael Marcotte (Chair)]: The perverse way of removing the HCAT.

[Jen Kirby, Legislative Counsel]: Emily? I've been wondering, under the deceptive to death of other ones,

[Rose Kennedy, Assistant Attorney General]: Does any of the language

[Unidentified Committee Member]: in there deal with the buyer's incentive? I'm guessing maybe promoting those. But the repeat incentive programs that a lot of these companies deploy to keep, particularly through, I don't know, points programs or kind of gamifying consumption.

[Rose Kennedy, Assistant Attorney General]: This is Kennedy from the attorney general's office. I think that we attempted to target games and that type, whether or not it targets exactly coupons or promotions. I think it would be an argument whether or not it's sort of linked to the actual device.

[Jen Kirby, Legislative Counsel]: I do think that maybe it's, know, versus saying promotion, so I think that does get potentially a promote, that the person shall promote. Or offer for sale.

[Michael Marcotte (Chair)]: Okay.

[Jen Kirby, Legislative Counsel]: Alright. That was brought up in the discussion last week.

[Hannah (Department of Liquor and Lottery)]: Yeah. I just She has to Yeah.

[Michael Marcotte (Chair)]: Other questions? I need to move this bill onto its next customer.

[Herb Olson (Member)]: In order I just texted her. K.

[Michael Marcotte (Chair)]: We take five. Waiting for representative to come back in. So we can move this bill. We can get it up to human services. If probably can get it over to them today, which would be really helpful. Great. Because I'm walking through it at eleven. Okay.