Vermont Legislature SmartTranscripts:

[Unidentified legislator]: All right.

[Unknown co-chair]: It's June 13. This is the H450 four conference committee. And we've just been handed

[Unidentified legislator]: from the House, I think. Kind of have some

[Unknown co-chair]: Be connected to what we gave you yesterday.

[Unidentified legislator]: Yes.

[Kirby Keaton, Office of Legislative Counsel]: So,

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: by way of context, appreciate the time for us to consider where we are and where we want to be. In that time, we were really able to step back from a fairly narrow portion of the bill that we've been focused on. And remember that we are all here again for all of the kids in Vermont for them to have a better education and for really the significant amount of tax changes that we have in this bill and want to make sure that we are really still at the table with you for the day. Because on some, on a whole, we still really believe that Vermonters will be better off kids, taxpayers, on the other side of this full bill. And so we have a little bit of language here, but we're also, given that this is our final day of doing this together, Megan is printing up the complete bill as well for us to really, like, recenter ourselves on and try to finish up. We think in this narrower language, which we believe is the language that's really still open, we are meeting you three quarters of the way on these pieces that and really appreciate that yesterday you sort of took where we were and walked towards us with it and appreciate that we have continued to narrow here and that we've gotten a lot done together already in the last week or two or five or fifty, however long we've been all doing this together. So Did I miss any context?

[Unknown Senate conferee (likely committee lead)]: That's great. What we're going to do now is have legislative council walk us through this. We may stop and talk about those changes that we put in there or just continue on through. But Legislative Council is on Zoom this morning and we may start to walk through.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And something that we totally forgot to say yesterday, and I'm very sorry that all of that lead in language that you shared yesterday was fantastic. Thank you.

[Beth St. James, Office of Legislative Counsel]: You ready for me?

[Unknown co-chair]: Yes.

[Beth St. James, Office of Legislative Counsel]: Okay. Beth St. James, Office of Legislative Counsel. Would you like me to share my screen?

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Yes, please.

[Beth St. James, Office of Legislative Counsel]: How's that size wise?

[Unknown Senate conferee (likely committee lead)]: Very good.

[Beth St. James, Office of Legislative Counsel]: Okay. So we're gonna, I got the day right today. This is the House's Friday counterproposal. We're going to walk through the sections that appear in this 11 page document. Language that is highlighted in yellow represents language that the House is proposing, and language that is highlighted in green is still language that the House is proposing, but it is language that the Senate originally proposed. So the first section that appears in this document is Section 11 on Line one. And what the House is proposing, this is the school closure language. The House is proposing to remove this section altogether.

[Unknown Senate conferee (likely committee lead)]: I just want to pause a moment here and talk a bit about that. This has been an odd section of this bill, because we had our language, you had your proposal, we accepted your proposal fully, and then we were having to defend your proposal against your desire to change it. However, given your uncomfortableness with this, and in the spirit of moving us closer together, we have agreed to delete this section completely, despite our concerns about what may happen going forward. And but I just would like to flag that as it's a lot there's a lot more there than just the word deleted.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Thanks, Beth.

[Beth St. James, Office of Legislative Counsel]: The next section is section 21, an amendment to section eight twenty eight, title 16, tuition to approve schools. The House is proposing again, all the language in white is being proposed to be kept, and the House is proposing here that there be a requirement for approved independent schools in order to be eligible to receive tuition. They have at least 25%, which is a number that the Senate originally proposed. But the Senate of its student enrollment attending the school on a public tuition basis, but the House is proposing to tie that 25% to the entire student enrollment.

[Unknown Senate conferee (likely committee lead)]: Again, in the spirit of moving us closer together, we were at 51%. We moved to 40%. You were at 25%. We have joined you at 25%. We have never found acceptable that it'd be 25% of Vermont students because we just if the if the sort of view here is that we are trying to recognize independent schools that have traditionally filled the role of a public school, we feel this is a better representation of that than quarter of the Vermont students that could be a tiny percentage of the larger student body. To to us, that does not represent the kind of vision that we're talking about here in terms of an independent school that is in the place of a a public school where none exists. Thank you, Beth.

[Beth St. James, Office of Legislative Counsel]: Next section that we're going look at is Section 27 of the bill, is an amendment to Section eight twenty three, which is formerly elementary tuition, this bill has this serving as the tuition statute for all grades. So again, subsection A has remained the same in both the House passed version and the Senate passed version of this bill. Essentially the money follows the student. The base in weight for each student would be the tuition that a receiving school would receive and that the district would pay. On page four, we have a new Subsection B, which would allow a receiving school to charge an additional fee for high school grades, and we'll just walk through the language. So in addition to the tuition amount calculated in Subsection A, a receiving school may charge an ascending school may be required, shall be required to pay an additional fee in the amount of the product of the base amount and up to point zero five for each student attending the receiving school in grades nine, and I will delete that S nine through 12 only if the following conditions are met. And so that would be 5% on top of the base. And the conditions are that the receiving school has received approval from the State Board of Education to charge the additional fee under this subsection B, which approval shall be granted in accordance with rules adopted by the State Board. And the electorate of each school district with at least one student attending the receiving school has approved supplemental district spending for the purpose of the subsection and an amount sufficient to cover the additional fee authorized under this subsection.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And then the goal Sorry about that. The goal here is to make sure that there is sufficient money to cover it for the district. And that the money is needed for the purposes that are described. In thinking this through, given the supplemental district spending that is functioning and would function in a fully operating district, a district would be able to do this for a high school in a fully operating district and really try to parallel it as closely as possible to that.

[Unknown co-chair]: Would would a public high school in order to that, would that have to go through the state board as well?

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: To do supplemental district spending?

[Unknown co-chair]: Or to or to charge money to a high school. That would have to go through the state board process as well if it were public.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Oh, no, I guess it wouldn't.

[Unknown Senate conferee (likely committee lead)]: Okay. Okay. Oh, I was actually a question for legislative council.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Oh, yes. Thank you. That would be a good question, Okay.

[Beth St. James, Office of Legislative Counsel]: Yes. This section is not specific to any school. So any receiving school.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Oh, thank you. Yes, I'm sorry. I misunderstood your question.

[Unknown co-chair]: Receivance.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Yes, this applies to all. All receiving. All the rewards. It's not like we're independent.

[Unidentified legislator]: Yesterday,

[Unknown Senate conferee (likely committee lead)]: we had put in more boundaries on this in our original proposal. What you all described as that old chestnut of meeting educational quality standards in order to meet the test to have this happen, is a little bit more important to folks than just sort of that old chestnut. There is a strong feeling out there. These are public dollars and should have public rules. So I just want to flag that we have removed that in a spirit of compromise, and it is a way to get us moving closer together.

[Beth St. James, Office of Legislative Counsel]: Also included in subsection B is this language starting on line six that will make sense as we continue to walk through and that is for the purposes of this subsection. A receiving school shall not include an approved independent school in Vermont functioning as an approved area career and technical center. There's a separate provision for that that we'll walk through in a second.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: In order to meet what you sent us previously.

[Beth St. James, Office of Legislative Counsel]: Subsection C, this is language that the House proposed yesterday. Receiving school that elects and is eligible to charge an additional fee pursuant to Subsection B of this section shall charge the same additional fee for each student attending on a publicly funded tuition basis pursuant to Chapter 21. A receiving school is prohibited from charging different fees pursuant to the section to different school districts.

[Unknown Senate conferee (likely committee lead)]: I just want to interrupt for a second and just remind all of us that this only happens if a study comes back and shows that there is a high school weight that we fail to implement, period. I just wanna remind us all that this is not necessarily a reality unless you make it a reality. Thank you, Beth.

[Beth St. James, Office of Legislative Counsel]: Subsection d, the house is proposing that we keep this language as proposed from the senate yesterday, notwithstanding subsections a, b, and c of this section or any other provision of law to the contrary. The district shall pay the full tuition charge to students attending an approved independent school in Vermont functioning as an approved area career and technical center.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And as you said yesterday, Senator Beck, there's a We have existing We have lots of different ways we do CTE in Vermont. And until we make the significant decisions we're gonna need to meet next year on CTE, we all of We those wanna make sure all of those CTEs can have their services paid for. Hopes maybe that would even just add some I have concerns that that would crash the entire foundation formula if we don't act, and maybe that will be enough of an incentive to finally get it done this coming year. Beth, thank you.

[Beth St. James, Office of Legislative Counsel]: I'm just going to go over the effective dates while we're here so that there's context. So subsection A, the tuition, the base plus the weights for every student. And subsection D, the tuition that an approved independent school functioning as a CTE center could charge. Those two subsections would take effect contingently on 07/01/2028 under the same contingencies as the foundation formula itself. And that would be new school districts are operational, you've received the 45A report or reports, and you have been given an opportunity to enact legislation based on that report. Subsections B and C, which are the subsections related to the additional fee, would also contingently take effect on 07/01/2028, but they have different contingencies. Those contingencies would be school districts are operational, the 45A report or reports have come back with evidence supports the theory that it costs more to educate a student in grades nine through 12, and the legislature has failed to enact secondary student weight.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: This is all what we proposed, and then you maintained and what you shared with us yesterday. Thank you, Beth.

[Beth St. James, Office of Legislative Counsel]: We're going to keep Section 28, the conforming repeals. No changes there. This is language that the House proposed yesterday, adding a new Section 28A, State Board of Education Tuition Fee Rules, which requires the State Board of Education on or before 07/01/2027, to adopt rules to govern the approval process for a receiving school to charge an additional fee pursuant to Section eight twenty three. The Board's rule shall require a receiving school to demonstrate that an additional fee is necessary to educate the specific students the fee is being applied to, and that

[Unknown co-chair]: the fee will be used to

[Beth St. James, Office of Legislative Counsel]: educate such students and not used to shift costs elsewhere within the applicable school's budget.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And again, this is just as there are certain areas where we know this is also a problem for public schools who are receiving students from other districts.

[Beth St. James, Office of Legislative Counsel]: Section 32. Let me explain this before

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: you jump in, Beth. We have heard concerns that the scale of the appropriation to JFO for these studies was so low that perhaps not enough people would, not enough contractors would bid on it. And it would be sort of a done deal. And so are increasing the appropriation to JFO so that they might have a wider pool of bidders and change the language slightly so that they might be able to hire two different contractors, maybe one for CTE and one for high school if that was appropriate. Beth, thank Thanks.

[Beth St. James, Office of Legislative Counsel]: So I'll jump out of order just in line with what Rep Kornheiser was saying. So the Section 45A report previously required JFO to contract with a contractor, and so we've modified that language here to say one or more contractors. And everywhere the singular contractor appeared in this section, I've updated it to just be plural. The additional substantive changes in this section were suggested by the House yesterday, and that is requiring the contractor contractors to include in their recommendations recommendations for whether it costs more to educate a secondary student than an elementary student, and if so, what's an appropriate way to capture that cost differential, and how to account for the provision of CTE within the foundation formula. The changes on the language highlighted at the very bottom of page seven and then at the top of page eight just reflect that the language changed, although the substance didn't. It was just I reworded things in order to make this section flow. And then here is the additional appropriation to JFO. It was previously $150,000 and this is now $400,000 And then to square that, Section 32 has been updated. This is the large appropriation to the Agency of Education, which is now the sum of $2,865,000 which would be used again $200 to support school board transitions, 562,500 for positions, and then $2,102,500 for contracted services for the enumerated reasons. And these numbers were updated to reflect that new appropriation amount to JFO for the 45A report, is 400,000. And then those are all the substantive changes in this proposal today, the effective dates. We've taken Section 11 out of here totally, so it doesn't appear at all because you've deleted that section. And then just reflecting the contingencies that we've already gone over. Sections A and D in tuition calculation would take effect contingently along with the foundation formula. And then Section eight twenty three subsections B and C, the additional fee would take effect on the contingently on the same date, but with the different contingencies.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Thank you. And so we asked staff to put together all of the different pieces that we have all preliminary agreed to into one big conference report as a show of faith that we are going to finish this today, and that we have come very close to that thus far in this process. And I think that will be done printing at some point soon, but it is posted. I can go grab it and we'll start about making the right.

[Unknown Senate conferee (likely committee lead)]: Why don't we take some time to go through it?

[Unknown co-chair]: And if you could grab it, that'd be great, maybe.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Also, as SAB has put everything back together again, they found places where they would just, like, personally, professionally wanted to rephrase a few sentences. And so those are highlighted as well to make sure that you didn't think, you know, someone caught it. It would be awkward. So I also don't think it's gone through editing. Yeah. It hasn't gone through editing yet, so there would be a few more updates after that as well. Okay.

[Unknown co-chair]: Thank you.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: So is it helpful

[Beth St. James, Office of Legislative Counsel]: to have staff walk us through the

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: whole Sure again?

[Unknown co-chair]: Yeah. It's Okay. The dangers or things to peer in. Yeah. Yeah. Sure. Great.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Beth, are you still in there? Hi. Thanks. Can you take us through from the top, then we can transition to John on line for me?

[Unknown Senate conferee (likely committee lead)]: And to the best of your ability, Beth, if you could flag areas that were differing in the beginning, but that we have agreed to since then, and we'll try to do the same thing as well.

[Beth St. James, Office of Legislative Counsel]: You are asking an awful lot.

[Unknown Senate conferee (likely committee lead)]: Yeah, we'll do so.

[Beth St. James, Office of Legislative Counsel]: I will do my best.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Okay, thank you.

[Beth St. James, Office of Legislative Counsel]: You're welcome. And I'm gonna share my screen. And I will just This is in the format of a report of committee of conference. It is still labeled House proposal, and it is unedited. So there will be further tweaks made even if you don't make any substantive changes. Language, there is highlighting in here. It's primarily highlighted for our editing staff to be able to know what the differences are between what they last edited. But for the purposes of this walkthrough, language that is edited here would be different from the House's draft 3.1 proposal that we started with on Wednesday. And I'm not going to walk through all of the language. I'm going to summarize each section. Does that work?

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Gosh. Thank you so much. Section

[Beth St. James, Office of Legislative Counsel]: one, findings. This is a great example of an area that I personally, professionally wanted to clean up, and that is just that we referred to a legal court opinion without an actual full citation to begin with. It appeared later on, so I've just bumped it up here. And then the intent section, all, you know, it is the General Assembly's intent next year to enact larger school districts to update CTE governance and funding, to begin the process of creating voting wards, to establish an appropriate rate for pre k and figure out what the funding source should pre k be, to ensure that all of the staffing and resources necessary to allow for a special election for initial school board members to occur in November 2027 is out there and to provide the necessary staffing to ensure that school districts staffing and resources to ensure that school districts are operational on 07/01/2028. That's all language that has appeared in various different iterations and I believe is all agreed to at this point. What is new but I believe is also agreed to is the intent language that the Senate proposed that essentially summarizes the bill's attempts to mitigate or reduce property taxes. And it's essentially a summary of everything the bill does. Section two are amendments to the Commission on the Future of Public Education. The House version included the subcommittee on the district boundary proposals. The Senate version pulled the subcommittee out of the commission and created a standalone committee. The House's proposal at this point also keeps gets rid of the subcommittee. So the membership remains the same. The charge of the commission is largely to recommend what roles, functions, or decisions should be a function of local control and what should be a function of state control with three specific points. The recommendations should include necessary updates to the roles and responsibilities of school district boards in the electorate, including the sections that govern each of those responsibilities, Whether there should be a process for a community served by an elementary school to have a voice in decisions regarding school closures and recommendations for what that process shall entail. And then a process for monitoring implementation of the Act in a manner that is transparent and public facing. The rest of the Commission's current charges have been removed, although you do keep the allowance for the Commission to consider anything else that deems relevant its work. The final report is due on 12/01/2025. This is a

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: significant narrowing.

[Beth St. James, Office of Legislative Counsel]: Assistance compensation, meetings, information all remains the same. School District Redistricting Task Force is kind of an amalgamation of House language and Senate language, although it was the Senate's idea for a standalone task force. The membership is taken from the subcommittee that the House proposed, which includes five non legislative members, two appointed by the Speaker of the House, two appointed by the Committee on Committees, one appointed by the Governor. All of them should be some combination of retired superintendents, retired retired or former superintendents, school board members, or school business managers. And this highlighting is another example of where I just didn't think the wording worked, so I've updated that a little. Then there would be six legislative members, three from the House, three from the Senate. They can't be from the same political party nor from the same school district. Again this is just language editing on my part. The powers and duties are essentially to recommend school district boundaries to you all. One of those boundary proposals needs to include supervisory unions, supervisory districts, allow for the continuation of the tuitioning system and to split geographic areas that contain non operating districts. That is a kind of combination of House and Senate language. And then what the new school district boundary proposals need to include or consider as a true compromise between the Senate and the House language. I will hit some highlights here. To the extent practical, the new school district should have an average daily membership of not fewer than approximately 4,000 and not more than 8,000 pre k through grade 12 students. To the extent possible they need to balance gram less people count, they need to be demographically equitable, logistically feasible, and create the least amount of disruption to students. And then aside from those two charges, boundaries also need the task force needs to consider the following. I won't read through all of them, but everything from the House and the Senate and your different iterations of these task forces and subcommittees is all represented here. The task force is required to work in collaboration with the Commission on the Future of Public Education's public engagement process to maximize input. The Task Force has the assistance of the Agency of Administration, the Agency of Digital Services, and the Department of Taxes. Their deliverable PUR on or before 12/01/2025 are a report essentially detailing their methodology for their boundary proposals and then map. And the maps need to include certain things. And again this is a combination of Senate and House requirements. Meetings need to start on or before August 1. They're going to have this task force is going to have co chairs and they have to one has to be a member of the House and one has to be a Senate, so your legislative members. The task force is going to cease to exist on 06/30/2026. Compensation and reimbursement, normal allocation here. This language is highlighted because it conflicted in the previous draft between who was getting the appropriation and who the monies were appropriated to. And so this is just to true that. Dollars 50,000 goes to the Agency of Administration for the hiring of one or more facilitation consultants. Dollars 100,000 goes to the Agency of Digital Services to cover costs associated with supporting the Task Force, which would include, if necessary, the hiring of a consultant. Dollars 10,000 is going to the Agency of Administration for nonlegislative compensation and reimbursement, and $10,000 is going to the General Assembly for legislative reimbursement. The School District Voting Award Task Force Section four, this is a concept that came from the House and largely remains unchanged. It is made up of the Secretary of State, three members appointed by the Municipal Clerk Treasurer Association, two members appointed by the School Boards Association, and the Director of the BCGI. On or before 10/15/2025, this working group needs to get together and consult with the school district redistricting task force, figure out if they've narrowed their work down to something that would allow the working group to start working on voting awards, proportional representation in the new school districts. The working group is contemplated to keep working through the session. And so if at any point it appears clear that the General Assembly is narrowing, they've either enacted legislation or they've narrowed their focus to one set of boundaries, the working group is required to focus their work on those set of boundaries. They need to recommend the optimal number of school boards and boundaries with proportional representation. They're going have the assistance of the Secretary of State's office. And there's also an appropriation to the Office of Legislative Counsel to hire a contractor, essentially a mapping specialist, the software resources necessary to create voting wards. Those resources could be used both by the legislative by the general assembly as well as this working group should the need arise. Class size minimums. I'm going to skip all of these small intent sections. Class size minimums. I believe what you all have arrived at is that oh, we have not updated this. We're going to exclude my understanding is you're excluding kindergarten. Is that correct?

[Unknown Senate conferee (likely committee lead)]: Correct.

[Beth St. James, Office of Legislative Counsel]: Okay. So this is something that we will update in the next edited draft that you all get. So kindergarten is going to be excluded, but first grade will be 10 students, grades two-five 12, grades six-eight in all content areas 15, and grades nine-twelve in required content areas 18. And then you'll see in addition to Pre K and the rest of these specific courses or areas, kindergarten will be excluded from class size minimum requirements. There's a waiver process and then a process for the State Board to take action should someone not be compliant with class size minimum. And that action would not occur unless the noncompliance is occurring over three consecutive school years, and it's a may not a shall.

[Unknown Senate conferee (likely committee lead)]: Those were class size minimums and the two things you just mentioned were proposals that were in the Senate proposal.

[Beth St. James, Office of Legislative Counsel]: Correct. Failure to comply with education quality standards, state board action. This section is just saying that if the state board does take action and they want to say, okay, in order to remedy your failure to comply with class size minimums, we're going to do some amount of consolidation. If that consolidation would result in school construction costs in excess of the applicable district's capital reserve, then that consolidation option for state board action is off the table. Section eight requires the State Board of Education to initiate rulemaking to update the education quality standards to ensure compliance with class size minimums and to adopt statewide standards for graduation requirements.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: I'm sorry. I just want to sort of flag in the previous section. It's just, I think a useful place to say that we haven't spent very much time talking about capital reserves or district debt. And that's going be a big project for next year.

[Unidentified legislator]: Big project for next year.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Alright. Back to you, Beth.

[Beth St. James, Office of Legislative Counsel]: Section eight, updating education quality standards to comply with class size minimum standards, statewide graduation requirements. The house originally had proficiency based graduation requirements, and that language has been removed. And then a requirement to update the 2,200 series, which governs independent schools approval to also require compliance with class size minimums and to create a process for what happens if an approved independent school is not complying with class size minimums that shall be substantially similar to the opportunities that the State Board provides a public school to come into compliance.

[Unknown co-chair]: Just to be clear, so the idea is that it would mirror the public. Okay.

[Beth St. James, Office of Legislative Counsel]: Reporting requirement, the state board of education shall submit a report to the House and Senate committees on education for both standards for what it means to be for school to be small by necessity. I believe that language passed both the House and the Senate. And then at some point along the way, the House is suggesting I believe it's the House suggested adding a requirement that the State Board also propose standards for what it means for school to be sparse by necessity.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: I feel like that was the Senate too, but I could be wrong. Someone

[Beth St. James, Office of Legislative Counsel]: somewhere proposed it. Agency of Education. This is asking the Agency of Education to recommend statewide graduation requirements to the state board that they would then take into consideration and update the 2,000 series rules. Requires the Agency of Education to come up with a statewide calendar And then various different reporting requirements to you all on or before 12/01/2025 from AOE. And these reporting requirements, I believe, pass both the House and the Senate and have not been updated. Section 10 is the sunset review of the State Board of Education rules along with the $200,000 appropriation to AOE in order for the State Board to hire a contractor to review the rules, figure out and recommend which rules are no longer necessary and come up with a plan on how to update the rules that are still necessary. I'm going to skip through this is dated school construction Section 12, the statement of policy Section 13 is the School Construction Program. This is essentially the Agency of Education's responsibilities. Section 14 is the creation of the State Aid for School Construction Advisory Board. The State Aid for School Construction program itself would not take effect until 07/01/2026, but the Advisory Board would take effect on 07/01/2025. So it can start advising the agencies that starts creating that department within itself. Section 15 is the prospective repeal of the advisory board. Section 16 is the School Construction Aid Special Fund. I believe both the House and the Senate versions had the fund funded by, in addition to what you see here, MMOF transferred or appropriated to it by the General Assembly. And then interest earned on the fund, it also had supplemental district spending reserve transferred to it. That language has been removed because that money will be used for different purposes. And John will go over that. But there's no highlighting to represent that because it was removed language. Approval and funding of school construction projects. This is the analysis that goes into and the amounts appropriated for or awarded for school construction projects themselves. Again, this language passed both the House and the Senate. There was one change as recommended by the Treasurer's Office, and that is to reflect it's this language here, Amounts shall be awarded annually and are subject to an annual appropriation for the purposes of this program. I believe this language is meant to reflect the fact that this is not I'm going to let John say that if he wants to speak out from the sidelines. I'm sorry. Is he trying to do?

[John Gray, Office of Legislative Counsel]: John Graham's Legislative Counsel. So it is not a pledge of the full faith in credit of the state. Just to ensure that you protect the credit of the state. That's the idea.

[Beth St. James, Office of Legislative Counsel]: Thank you. Sorry to put you on the spot there. I'm going to repeat

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: what John said, because I have a feeling the mic's probably didn't pick it up. It's to protect the full faith and credit of the state.

[Beth St. James, Office of Legislative Counsel]: Section 18 is appeal language if you're unhappy with your award amount. 19 is transfer of rulemaking authority from the State Board of Education to the Agency of Education for School Construction. And Section 20 is repeal of current law that would conflict with the changes you're making in the sections that I just went through very quickly. Everything I did not specifically highlight passed both the Senate and the House. Schools eligible to receive public tuition. I just want to say that any sections that we went over in the standalone document just a few minutes ago should be the same in this document. We are working very fast and if there is a conflict it is not intentional and I will fix it at some point. Schools eligible to receive public tuition. Again, this is the section that dictates who a school district is allowed to pay tuition to. So public schools in Vermont, approved independent schools that meet the following criteria. They have to be located in Vermont. They have to also be located within they have to currently be an approved independent school. They have to also be located within a supervisory district that does not operate summer all grades as of 07/01/2024, or an SU with one or more member school districts that does not operate a school for summer all grades as of 07/01/2024. It also has to have at least 25% of its student enrollment composed of students attending on a publicly funded basis and it has to comply with class size minimums. And here you'll see that there is a waiver option here as well as the public schools have. Schools and independent school meeting education quality standards, tutorial programs, and approved education programs also qualify for state also qualify for a school district to pay tuition to it, and as well as public schools located in another state. And then therapeutic approved independent schools can be located in Vermont or another state or country as long as it's approved under the laws of that state or country. And then there's a definition of therapeutic approved independent schools added. Section 22 is a grandfather provision that allows students who are currently enrolled in or who have been accepted for enrollment next year to continue to remain in their school regardless of whether, as long as it qualifies under current law for tuition, regardless of whether the school would remain eligible under the changes to Section eight twenty eight until the student graduates. Again, that's a piece of intent language I'm just going to skip over. Section 24, I believe, passed both the House and the Senate, and this is an update to or a change to who appoints members to the State Board of Education. Currently the Governor appoints all 10 members. Under this change, the Governor would appoint eight members, two student members, and six non student members. The House would have one appointment, and then the Senate would have one appointment. And then there are conforming changes throughout to just make it clear that whenever a term expires, whoever the original appointing authority was, that would be the appointing authority who fills that expired term. Section 25 is an appointment transition provision. Essentially the House would make the first appointment to a vacancy, then the Senate, then the Governor, and then it would follow from there based on appointment authority. And then Section 26, the Governor retains removal authority over each state board member regardless of who the appointing authority was, but the original appointing authority would make the appointment to fill the vacancy created by the removal. Section 27 is the calculation of tuition section. Again, the subsection A passed both the House and the Senate. So that's the student, the money follows the student, the base and the weight for each student essentially would be tuition going forward. And then subsection B is the additional fee that we went over. Subsection C says they have to charge the same fee and Subsection D is the allowance for an approved independent school that's functioning as an area for a technical center to charge its full tuition. Section 28, there's a formatting piece there that we'll make sure that we correct, or just the conforming repeal for the tuition section. Section 28 is the piece of the new addition that we just went over regarding the state board adopting rules to govern the approval process for a receiving school to charge an additional fee. Section 29, again, this language passed both the House and the Senate with one exception that I will flag. And this is asking the Agency of Education to give you all a very detailed report on or before September 1 regarding the provision of special education in this date?

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And this is not this is my understanding is that the agency of education has been working on something like this report since the early fall of last year. So this is not like, we're asking for a huge report and they're going to start tomorrow and it's due in August. Back to that.

[Beth St. James, Office of Legislative Counsel]: Thank you. All of this language remains unchanged from both the House and the Senate with the exception of Subdivision 11. The report needs to include recommendations for reducing the growth and extraordinary special education reimbursement costs, which shall include recommended legislative language to accomplish any such recommendations. Section 30 remains the same as passed both the House and the Senate, which requires the agency to come up with a three year strategic plan for the delivery of special education services in Vermont. They've got a report back to you all on or before December 1 with that strategic plan and then annual updates for the next four years thereafter. And then Section 31 appropriates $150,000 to the Agency of Education to hire a new permanent classified position to support the agency in the development and execution of that implementation of the strategic plan. Section 32 is the Agency of Education Transformation appropriation. We just went over this. These numbers are highlighted to reflect the change from this is language that I should say that this is language that appeared did not appear in the House, did appear in the Senate, was accounted for in the budget, and these numbers are only changed in this draft to reflect the update to the $400,000 appropriation to JFO for the 45A report that we just went over. And then Section 33 are the positions that are referenced in 32 for the Agency of Education for Education Transformation, which would be a Business Operations Support Specialist, Data Integration Support Specialist, Curriculum and Education Quality Standards Integration Specialist, Learning and Teaching Integration Specialist, and School Facilities Field Support Specialist. And I am done speaking now.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Thank you, Beth.

[Kirby Keaton, Office of Legislative Counsel]: Hello,

[John Gray, Office of Legislative Counsel]: John Gray, Office of Legislative Counsel. Just a sec and I will screen share.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Want Jonathan to bring that up. I just want to I think our hope in going through the whole bill as one big package is to highlight all of the points of agreement that we have come to, and not for any of us to find new spots to disagree on.

[John Gray, Office of Legislative Counsel]: Okay. So right where Beth left off, we're shifting gears a little bit and moving into the education finance section. So we'll start with section 34, which is entitled 16, your state funding of public education. You'll recall, these are just your core foundation formula concepts. It's on page 72, you're gonna see your base amount, that's your 15,033 per pupil, And your educational opportunity payment, that's your base times your weighted long term average check. So nothing new here. Section 35 is your waiting section. This is going to be the change that I think has occurred within this section across the course of the company as per it in this proposal is the addition of a pre K weight, but just to call out the sets of weights you receive here, child with a disability, you get your special education weights divided by category, you get your tiered EL weights based on English language level proficiency and your newcomers life. You're going get your counts of pupils in different grades. The weights themselves will be familiar on page 78, but the one I want to flag here is that pre k weight of a negative 0.54 for pupils enrolled in pre k. Otherwise, just some updates to call out the section headers, economic disadvantage, EL proficiency weights, EL and the campus life, your special education weights based on categorization, and note that there's a report labeled all related to those special education weights. The inputs to the foundation formula, that's your weights, your base amount, and in this case for electricity and transportation reimbursement are to be regularly reevaluated to pick up changes that have happened in the underlying governance structures and the like across the upcoming years. And the other change that you're going see here is that in addition to AOE and JFO working on these figures, they would receive the advice and consultation of a professional judgment panel. Section 36 is just picking up education payments instead of referencing existing in our current education funding system, making sure we pick up EOP supplemental district spending and your support grants. No changes to this section. Section 37, and I'm on page 84 is your support grants for small schools and sparse schools. The shift that you've seen across the course of the conference committee is moving to a sparsity support grant that is more aligned with a sparse school, meaning a tighter geographic area for which that determination is made as against a sparse school district into which schools of various density could fall. So that's what you see on page 84.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Noting that transportation policy decisions are still outstanding for next year.

[John Gray, Office of Legislative Counsel]: And and worth calling out that for both your small school and your sparse school, there's gonna be a required determination from a state board of education. In either case, that smallness or sparsity is by necessity. Same figures as you've seen throughout the course of this for the support grants. At section 38 is just picking up the relevant revenues to your Ed fund. So, that's picking up the supplemental district spending, which is gonna flow up. A portion is gonna be reserved within the reserve, which we're gonna come to. And striking language referencing the existing payments for the statewide PTC, which is repealed letter in the bill. Section 39 is cleanup language to the stabilization reserve. It is non substantive. Section 40 is aligning your payments schedule with the existing structure, right now picking up EOP and SDS and the like, and removing penalties for late budgets as you're moving into a different concept here. Similarly moving archaic concepts that wouldn't exist in the new foundation format structure. Section 41, this is your budget vote, so the form of the ballot that you're going to see. And you can see the actual changes on page 91. New information that's going to be provided. And the feature to call out about this budget vote, which is exclusively on the portion above your EOP, it's your supplemental district spending. So it's voting above that EOP. Within that ballot, you're gonna receive what rate would be required to raise that supplemental district spending. So that's what we see between ninety one and ninety two. Section 42 is your sets of conforming appeals for these sections. The pieces to note that have been added throughout the course of the conference committee, subsections D and E, that's your English language learners services categorical aid and your merger support grants. The English language learners repeal is related to the fact that you're getting a wait for this particular provision now. And then the merger support, those school districts wouldn't mean the same thing in the new construct. Section 43, this is your supplemental district spending reserve. So I noted before that we were modifying the Ed fund to pick up your supplemental district spending tax, and some of it would remain in the Ed fund, some of it would go to this reserve. Recapture is captured here. That's the results of your equalizing measures and the change that Beth was noting earlier on page 93 is in subsection C, funds remaining after you have cleared out any mathematical errors at the end of fiscal year previously would have gone to a school construction aid special fund, and now they are unreserved in the Ed fund to decrease the following year statewide education property tax rate. So they're they're made available to the next year to reduce, the amount that you need to offset. Sections forty three and forty five are sets of reports that have not been in dispute throughout this. So your AOE transportation reimbursement guidelines reports and your GFO reports on inflationary measures and pre K funding. On section 45A, Beth already went through this this morning, so I'm not going to hit hard, but this is your foundation formula report. Section 45B is your EOP and tuition transitions. It's across the first five years, so everyone would be fully transitioned to the new EOP standard tuitioning measures in fiscal year twenty twenty three. You would be gradually moved, as we've discussed many times, from your existing Ed spend toward that EOP. And note that the tuitioning transition that's provided here is just adjusting the tuition to account for that amount by which the EOP is adjusted in those first four years. Section 45C is just delaying the Ed Fund Advisory Committee, so picking up that one year delay. At section 46, shifting gears a little bit, we're jumping out of Title 16, we're going to Title 32. So this is getting into supplemental interest spending and your imposition of a stabilized rate and the supplemental interest expense tax rate. The changes that you're going see in this section on page 100, nothing's highlighted in my sections, I think, because this is all the same as from the proposal before. So it didn't need to be edited again. But the statewide adjustment, just note that that's included here. And the big change that we saw here or correction that we saw here is for picking up the adjusted, creating this concept of an adjusted equalized education property tax brand list. That's just how much property value is made available for taxation for these purposes after accounting for that home setting. Otherwise, for people, SDS recapture school district, the lowest taxing capacity, and SDS remain the same concepts, except note that the cap that's proposed here is that on your supplemental spending, a district cannot approve spending in excess of 5% of product of the base amount and the school district's long term membership. So that cap is an unweighted figure and it's at 5%. Section 46A is a transitionary measure that is specific to the cap that I was just discussing. So across the fifty ten years, I believe, or so, you're gonna hold steady on page 102 at a 10% cap. So a higher cap to start on that supplemental district spending from fiscal years '29 through 02/2033 being the first fiscal year in which school districts are fully transitioned, as mentioned before, to their EOP. And then at the point that they're fully transitioned, you would start knocking that cap on SDS down across the succeeding years so that in fiscal year 2038, you would be at that 5% statutory figure for your cap. Section 47 is the imposition of the statewide tax rates. The piece to note here, we did some cleanup language within what it's covering. This is accounting for forecasted non property tax revenues and any funds unreserved in the Ed Fund. That's that figure we talked about within the reserve that was making those funds available to reduce next year's tax rates. So that's what you see in the lead in for setting the statewide education tax rate. We have the default provision that I know was discussed yesterday a couple of times on page one and three. If there's failure to adopt a statewide education tax rate, it would be 110% of the preceding fiscal year's statewide education tax rate. And those rates would be adjusted in each year based on class. And the thing to note within this classification structure is the removal of the non Olmsted apartment, which is something that I'm sure Harvey will touch on. Conforming changes throughout the remainder of this section, and just note that if we do pick up the statewide adjustment from these sections. It jumped past a lot of things. We don't need weighted rates because there's not going to be varying statewide education taxes. On page 107, you have the imposition of the supplemental district spending tax. We've talked before about the map that's behind that, so I'm not gonna belabor it. Section 48 is your December 1 letter. This is gonna recommend both that statewide education property tax rate that would be adjusted for the different classes and your supplemental district spending yield, which again is built off of that school district with the lowest taxing capacity district, assumptions that would be built in, and then the necessary information for the commissioner with advice to make those determinations. And noting that we're picking up that aggregate adjusted equalized education property tax grant list in determining that whatever property values are actually made available for those purposes. So, accounting for the homestead exemption. Section 48A is your homestead property tax rate transitionary measures. So adjusting in the first years of the foundation formula rollout, adjusting those rates based on where a district's homestead property tax rate falls relative to where it would be under a uniform homestead tax rate for the new foundation formula. And you can see that as part of this, we also have a report proposed on page 112 on or before 12/15/2027, Department of Taxes to submit a report with recommendations and an implementation plan to ensure that education property tax rates do not increase as part of that transition. Sections forty nine and fifty are conforming changes for that statewide tax rate. And shifting gears again on page 113, we jump to property tax credit repeal and to the homestead exemption creation. Section 51 is the statutory purposes for your proposed homestead exemption, continuing this proposal. Then section 52 is a big section because it's amending an entire chapter. This is that PTC repeal and introduction of the homestead exemption. The pieces to note, changes that have occurred in recent days across the course of the conference committee come in section sixty sixty six, which is on page 118, starting on page 118. And the actual changes you're gonna see start on 120. What I wanna call out is while this looks different from the initial house proposal, and there are two changes here, just note that the style of presentation in a table is not a dramatic shift in the house's initial proposal. But the two changes that you will see here are there had been an income bracket on the left side that you see here that was a 47,000 to 50,000 income bracket that's been shifted to be 25 k to 40 k and 40 k to 50,000. So bit cleaner income bracket. And then markedly on the right side, you can see that there's been a cap included. So the homestead exemption is made available against the first 425,000 in house site value.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And perhaps this goes without saying, but this is one of the significant pieces of how we're going to protect against any property tax bill increases throughout the state as a result of the implementation of the foundation formula.

[John Gray, Office of Legislative Counsel]: And we will come to another piece related to the Homestead Extension that tries to get at some of the same concerns shortly. And the upcoming pages, I'm just going to scroll quickly. This is a lot of conforming changes that we've gone through a number of times. Because, again, it's amending the whole chapter and not just the section that sets up the income sensitivity measure. So there's a number of places where we need to remove references to the existing PTC and update to reference the outside exception. I think we can jump to but please stop me if you have questions.

[Unknown Senate conferee (likely committee lead)]: All the way

[John Gray, Office of Legislative Counsel]: Yes, all the way to page 134. This is section 53. Your homestead exception report from the Department of Taxes should be by the end of next year. So the start before the end of the twenty twenty seven legislative session, Department of Taxes would submit a proposal designing a homestead exemption structure. So similar to what you saw above, but with a particular focus on minimizing property tax impacts for homestead property owners under the new structure and minimizing benefit cliffs compared to the existing credit system. The term of taxes would be additionally included that proposal recommendations for inflationary measures appropriate to both the income sensitivity and the house side value measures. An analysis of the implications of moving to income sensitivity measures that recognize households with household income up to 175 ks a year. And then you'll recall that we separately had a section before that was updating the homestead declaration for this newly proposed homestead exception that's been built into this same report. So, trying to get some of the same concerns. Sections 54 through 56 are conforming changes for that PTC repeal. And then section 57, which is I think the last substantive thing I have to speak about, which is on page 136. This is updates to the directives of the Education Fund Advisory Committee to assist with this transformation of the Vermont Education Finance System, making some conforming changes. So updating the weighting factors, this wouldn't reference that formal report. It would now be in line with the updates for the foundation formula. Changes to your income sensitivity levels in subdivision c would be related to a homestead exemption, right, rather than the property tax credit appealed. And then addressing some of the concerns around introduction of the foundation formula. So interest school district effects, including for the use of weighting factors, how to maintain that equity, whether weighted foundation formula payments lead to improved outcomes, and any other factor the committee deems relevant to its work and recommendations. Sections fifty eight and fifty nine of the former proposal have been repealed, and those relate to a future transition to an EdNet phase. And with that, I am done with my section, but happy to answer any questions, please.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Never seen you talk that fast with the quick that one was for John. I hope there was not confusion. No, that's great.

[Unknown co-chair]: Very good. One thing. Yes. If I I'm on page 96. Okay. Sections 45 being

[Unidentified legislator]: my question is, tuition in this section, tuition is referenced. But for our receiving schools that are are receiving public schools, they provide districts an announced tuition that the districts pay, but then they also calculate an allowable tuition at the end of the year, which is the actual cost of the education. And they either have to credit or bill back to the district if it's more than plus or minus 3%. So in this section, does tuition mean announced tuition, or does it mean allowable tuition?

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: I think that's still in the zone.

[John Gray, Office of Legislative Counsel]: Yeah, I don't think that I know the answer to this. I would note that I think this subdivision should pick up any changes we're making in the tuition section to make sure that we're accurately capturing this morning's discussion. I don't know if Beth has words she would like to add. She's conscious Yep. That

[Beth St. James, Office of Legislative Counsel]: Beth St. James, Office of Legislative Counsel. There is no more allowable tuition concept in a future state when this language would take effect. So this would be the base and weight for for the tuition.

[Unidentified legislator]: Right. But they're gonna be coming the transition is from their tuition to wait. So when you say tuition here, are they referencing the allowable or the announced?

[Beth St. James, Office of Legislative Counsel]: No. This tuition section, my understanding, and John, please correct me if I'm wrong, the tuition does not begin until the foundation formula takes effect.

[John Gray, Office of Legislative Counsel]: Yes.

[Beth St. James, Office of Legislative Counsel]: So this transition language is occurring in fiscal years 2029 through 2032 under the foundation formula, which means the change to section eight twenty three now makes tuition just the base and weight.

[John Gray, Office of Legislative Counsel]: K. Thank you. And that this if if a change is necessary to this sub b just to capture any conforming changes from this morning, I think the only thing that would be necessary would be for the cross reference, notwithstanding 16 VSA 18 eight twenty three to just add eight twenty three a. But Okay.

[Unknown co-chair]: We we can yeah. I think that's all. Thank you.

[Kirby Keaton, Office of Legislative Counsel]: Good morning. Hi. Kirby Keaton, Office of Legislative Counsel, to finish this off for you. So we're at section 60, where John left off. Sections

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: Page one thirty

[Kirby Keaton, Office of Legislative Counsel]: Sections 60 through 61 c all deal with creating a new property tax classification system. This was early on proposed by the House as it came out of the Senate. There was just a study for this. This includes the house language on tax classifications with some changes. Section 60 has not changed. This is just part of setting it up for the grand list. 61 is the creation of the property classification system. There's a notable change from the house version here where there's only three classifications proposed here. Under current law, there are already two homestead and non homestead. Under this, it would be homestead, non homestead, non residential, and non homestead residential as tax classifications. As a reminder, everything's moved up one year from the house's version of things. So this would take effect at the same time as much of the other stuff that the rest of the system when it comes online that Beth and John went through. So talking 2028. In 61A here, there's just a small change from the house version that removes the reference to the apartment category that's been dropped. In 61B, there is an addition of a subsection B that would have the Department of Taxes report back on some recommended tax rate multipliers to be used for the non homestead residential classification, the new classification. As a reminder, that classification would include or is intended to include second homes, short term rentals, any residential property that's not being used as a homestead essentially. And what to do with creating the multipliers, the department would report back to give you some options for the future for that. One of them is to have a multiplier set that would pay for the homestead exemption that's created here. The other would be proposed multiplier set that could pay for that would mitigate any forecasted property tax increases on homestead property tax payers created by this act. 61 C is also new. I don't believe the Senate conference have seen this, but this is just some intent language that would say that it's the intent of the General Assembly to reevaluate the entire tax classifications concept at the same time that any tax rate multipliers are amended in the future. Under the language you're passing would pass here, there are no differences in the amount of taxes paid based on the classifications yet. So if that were to change, you would also consider everything about tax classifications.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And we would need to vote.

[Kirby Keaton, Office of Legislative Counsel]: Yes, and there's practical things to be worked out. There's a lot of reporting back from the Department of Taxes relating to this concept. It's anticipated that they will have suggested changes in the future. So this intent language is just speaking the practical truth, which is you visiting this in the future. So for the rest of it, the regional assessment districts, the only change that's happened in this process is to move those up a year. So that would be 2029 for where the regional assessment districts would roll out. Otherwise, this is the same language that came out of the Senate.

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: And I don't know if we talked about this, but when we were changing all the dates of the year, we sent all of them through the Department of Taxes to verify that they worked for them. And they made some very specific tweaks around December versus January and all kinds of things.

[Kirby Keaton, Office of Legislative Counsel]: I would say generally, the reporting back actually is not Even though the dates have moved up, a lot of the reporting back from the department is the same when it comes to regional assessment districts. And also the transition dates are actually the same as they were before for practical reasons, because you've got municipalities ordering reappraisals under current law, and they did not want to mess with that process. It's staying actually the same. And then we've got the miscellaneous provisions for sections 64 onward or 65 onward rather. Nothing has changed here from what's passed out previously. And that's the rest of the bill. Thank you, Kirby.

[Unidentified legislator]: Thank you. Questions?

[Rep. Emilie Kornheiser (House Ways & Means Chair)]: I don't have any questions.

[Unknown Senate conferee (likely committee lead)]: We really wanted to walk through the bill in a toll to remind us that despite the fact that we have spent a lot of time and energy on a very narrow slice of this, that this is a really significant piece of reform that I think touches Vermonters in a positive way in so many areas. And that is why we came back, I think made some significant compromises to meet you. And we just are very hopeful that we are at a point where we have reached agreement, and we can say this is a plan and chauvin' honors it does and how it helps.

[Unknown co-chair]: Well, we've approached it the same way. Here we are. We will, why don't we give ourselves until one? Sounds good. 01:00. I don't know what the reason that I've got it Zoom. Have to do it now. In the middle of this unrelated 01:00. So we're all

[Unidentified legislator]: back