Vermont Legislature SmartTranscripts:

[Chair Amy Sheldon]: We're reconvening our morning meeting, shifting gears back to the bottle bill, which we walked through yesterday with our legislative counsel, and we have Matt Chapin in from the Agency of Natural Resources here to share his thoughts on our draft 1.1 of the updates to the beverage container recycling system. Welcome back, Matt.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Thank you for having me. So for the record, Matt Chapin. I am the director of the Waste Management Prevention Division with the Department of Environmental Conservation. So I guess part of at least why I was asked to come in, is to answer questions generally. I mean, can certainly speak at a high level. I don't have sort of alternate language ready to to sort of pass out on what the very, what I would say, limited number of changes the agency thinks needs to happen to the drafting request that's before you right now. And so I'll start with that, and then we can sort of transition to any questions or issues or things that have arisen so far from testimony you get that you heard yesterday. The the first change and probably the largest change is is clarifying in the proposal how the Department of Liquor and Lottery is handled with respect to liquor containers. I think that there was, generally speaking, an agreement that the department would maintain the status quo, that they functionally operated as a their own commingling agreement. They collect primarily from liquor facilities, that there wasn't gonna be sort of a a major disruption. I'm not sure that sort of conversation happened late in the process, and I don't know that we ever sort of went back and went into any detail on how we could make sure the DLL was sort of put aside. So I'm working with the department right now to try and make sure that what I think maintains the status quo does that, and then I'll have language that I can share with the committee as soon as that gets wrapped up. But that would be the intent there. So that's sort of the the first recommendation the agency would have. The second Folks have questions. Yeah. I'll stop there.

[Chair Amy Sheldon]: Not seeing any answers. Okay.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: It would be helpful if we go. The second change, and this is pretty simple. So the proposal has a labeling change in it that allows for a deviation away from the current labeling structure. We currently if you look at the top of your can, it says VT 5¢ or 5¢, and it has VT listed there. We had talked when there was a conversation about sort of a floating deposit having more flexibility around how that labeling would work. In the absence of that, I think there's consistent there have been comments that having that transparency in what the deposit amount is on the container makes more sense than having something like VTRV, which people may not know what that means and and and so forth. So, basically, it would be reverting to the language that exists currently in the statute and just keeping the 5¢ label on there. Yeah.

[Chair Amy Sheldon]: Good.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Alright, so let me just scan through here quickly. I mean, were, I think, the major ones. I guess just turning back a little bit to some of the testimony yesterday, I guess the last major change or clarification is making it very clear that when a producer responsibility organization has been stood up and is effective, that the handling fee would not apply to the containers at that point for beverage brands participating in the producer responsibility organization.

[Chair Amy Sheldon]: Walk us through then what happens at a particularly an existing redemption center. How do they get compensated? So Let's

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: talk about a couple of different scenarios, because I think that's the challenge that we face. We're dealing with a system that exists, and there's a lot of variability in that system, depending on where you're at and what, if any, investments have been made in that system. And I'll just speak purely in hypotheticals, though I'm actually thinking about real redemption centers in this. Let's say you're a redemption center in a rural Northeast Kingdom community that doesn't have a lot of redemption or retail opportunities associated with your facility, and you have a relatively low throughput. Because I guess it's probably worth me taking a step back and talk about some of the cost drivers that are just out there generally on redemption. And I have been told by redemption centers, and it's been our experience through the cost analysis that we've done, that the costs for redemption centers are driven largely by throughput. The more throughput they have, the less it actually costs for them to manage that system because they're basically getting more containers through. The other pressure that exists is space. So the more space they have to devote of their retail location to basically store boxes or bags of cans or bottles, That's less space for retail and more cost to the redemption process. So those are the two things. For simplicity's sake, I know that labor obviously comes in as well. So if you're a rural Northeast Kingdom redemption center with low throughput and limited opportunities, I can imagine the PRO not having other options coming to you and saying, Will you continue doing this at 3.5¢? And they may say, No, I want $04 $05 more because the cost of them running that redemption center is higher than, say, someplace in St. Albans or Burlington that has much, much higher throughput into that system. I think in other situations, can see the PRO coming to some place with higher volumes but not investments made into it, offering investments in equipment that lower labor costs and pay a reduced handling fee in turn for having those capital investments made in the building and or equipment being used there. So to some degree and I guess the last sort of scenario that I can see, there have been some redemption centers who have made investments in equipment and other things. And I can see the PRO compensating those redemption centers for the investments that they've made in various different ways, whether that be a straight up infusion capital investment or whether that's a higher handling fee to cover the cost of that equipment over time. So those are the sorts of scenarios, and those are probably just a small cross section of the scenarios that could play out. I guess the point in going through that is I think that there's a lot of variability in this state as far as the costs associated with running a redemption center. I guess the other point I would make is if you look across all of the EPR laws that we administer in the state of Vermont, none of them actually set the value that we pay for the collection of what's being collected. In all of those situations, it requires fair compensation for the person doing the collection and sets the agency up as the person who is the arbiter of fairness. And so I heard the comment yesterday that there might be a desire to see guardrails. I'm not opposed to there being guardrails, and I'm not opposed to the agency being the one who steps in and ensures that there's not an abuse of power dynamics or relationships between these entities. We can step in if something's grossly unfair and say, Look, you need to step back and rethink this.

[Chair Amy Sheldon]: So help me understand what that would look like, because the comment was made and it sounds like you heard that these are small businesses. They would be negotiating with this PRO that potentially had more firepower or understanding. So is there an inequity there that makes it hard for them to negotiate with?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I guess my perception is that depending on where you are, the power balance may be different. Again, if you're in a situation where there's no options for the PRO, you're, as the retail redemption center, the one with the power to negotiate because the alternative for the PRO is to go out and buy a commercial center and open up their own redemption center. So I think that it's gonna be very variable, but and I think that there are probably other there are there is a situation in sort of northern Northwestern Vermont where there are three redemption centers in the same town. I don't I think that there's a possibility that there may not need to be three redemption centers. They've actually fought with each other for their slice of bottles and cans in that community. So I think that there may be some efficiency to not having free in those communities. Don't know if that answers your question, but I think that there's going to be different power balances between the PRO and the retail redemption facilities, depending on where we're at. And I do think that I certainly don't have a problem making sure that people who are maybe not sophisticated actors in the world of negotiation have the state standing there as an arbiter of relatively to make sure that there's not too much of a weight on the PRO side and that we could step in. And I guess I would say again, pointing back to another situation, we in the electronics waste program did get involved in collection center compensation and basically sat down between the person doing the collection and the people, both the locations collecting it, had a conversation about what constituted fair compensation. So we have played that role historically. It's not something I wanna do, but it but it is something that, frankly, we could do if there's a gross power imbalance between and and sort of unfairness taking place.

[Chair Amy Sheldon]: So we have that language in other EPR's section of statute that we could look to?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: There is. And I think there's, generally speaking, it has to be fair compensation. I think you can certainly put something in that says you know, that the agency people can I think it's always the case, but people can complain to the agency if they believe that the the compensation's unfair? I guess to the extent the committee, and I'm happy to reflect on this as well, wants to put more guardrails guideposts on what constitutes fair compensation, I'm happy to contemplate or think about what that would look like and have more detail in statute if that is where the committee would like to go.

[Chair Amy Sheldon]: Representative Satcowitz?

[Rep. Larry Satcowitz (Ranking Member)]: Yeah. It would be this is interesting. I because I don't think we've really talked about this in much detail before. I'm I'm wondering if you said that there's examples from other EPR programs that we are currently engaged in, like fluorescent bulbs, right, and batteries would be examples. Is that correct? Resin bulbs, batteries, e waste. And I guess I would be really interested to know sort of in a little more detail, and probably not able to give this to us now, but at some point, like, how it's actually sort of worked out for those different programs, what the negotiations have been kind of been like if you've needed to step in or just just get a better sense of, like, how that has actually worked out in the in the marketplace between the various stakeholders.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Sure. I mean

[Rep. Larry Satcowitz (Ranking Member)]: because this is a really different market in a lot of ways because we've treated it so differently historically. And if we're looking at changing that relationship, it'd be great to know how it would compare to these other situations, which we do have experience working our way through.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Sure. I mean, we can certainly look into the other models and see what information we have. I I will tell you, in a lot of situations, especially where there's retail collection taking place, the retailers have viewed this collection opportunity as an opportunity to get people into the door in the door and into the retail space. And then when you're taking back your can of paint, you buy a can of paint. When you're taking back some light bulbs to the hardware store, you're in there and you pick up the few things that you needed anyway. And I've heard the same with respect to redemption centers. Right? Part of the reason they offer redemption services is because people get three fifty out of the bottles and cans they bring back, and then they turn around and they buy a six pack of whatever beverage they like. But I'm happy to look in to see I know when we're talking about the swimmies, there is some compensation that takes place there, and I'm happy to take a look at that. Guess just the other thing just to and sorry, I don't want to belabor this too much but I think the other thing one needs to think about in this is that we're expecting that the PRO will make investments in these facilities that will lower these facilities' labor costs. And if there's no benefit to making those investments, then we're not setting the right signals in the program to make the program as good as we make it. If I put an investment in your facility, you reap the benefit, but you don't pay any of the costs. As the PRO, it doesn't make me want to make any optional investments in the system because I don't reap any benefit from making those investments. So I think that you want to the reason the agency's supporting moving away from the handling fee is because if the PRO is going to make the investments, we think they ought to reap some of the benefit of those investments. You could shift the model and have the expectation beyond the retail redemption centers to make the investments in the system. I I don't think that's honestly a good model. So and keep the handle or increase it.

[Chair Amy Sheldon]: So, representative North, are you on the same topic? Where are you moving?

[Rep. Rob North (Member)]: I am, yeah. On the same topic, not specifically about PRO's investment. That's what you mean by the topic, but

[Unidentified Committee Member]: certainly on the bottom of the topic. Yeah.

[Chair Amy Sheldon]: Following up on how the redemption centers are compensated, because I think I had one.

[Rep. Rob North (Member)]: So

[Chair Amy Sheldon]: does the language we have now related to the compensation of the redemption centers,

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: is it satisfactory? So I guess there are two things to consider. One is that I think there needs to be clarity that when the PRO is in effect that the handling fee doesn't apply. And then two, and this is I think I'd leave it I'm happy to look at it. I haven't thought about it in advance of this testimony that right now the law says that redemption centers need to be fairly compensated. If we want to provide more detail around what fair compensation means, I'm happy to think about how you flesh that fair compensation out so that there's more detail of what we need to look at.

[Chair Amy Sheldon]: Yeah. I mean, I think what's important is that intention that you just mentioned of if the PRO is making this investment, somehow they need to both benefit from that.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Right. I mean, again, I think I think some of the objective, and I think it's a shared objective, is that these retail centers, these retail redemption facilities that are providing this service are compensated in a way that they're making you know, recovering their costs and making a reasonable return on the the service they're providing as a part of the system. Right? And I think that that everyone should be able to agree on that. And I think the question then becomes, you know, what's what does that number look like and how how does it get equated? Because it again, it's more expensive in some parts of the state to provide that service than others. It's yeah. So related. Representative North.

[Rep. Rob North (Member)]: That exact topic. So what in in your mind thank you. Matt, thank you. In your mind, what what is the source of the funding for the compensation? Or or your model expecting that the sheets would be given to the PRO to be the source of compensation?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: It does not. I mean, it it basically Where does it come from? It's coming from the manufacturer distributors that are administering the program. And I think that it's Additional costs

[Rep. Rob North (Member)]: for them?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I think it's in lieu of the handling fee. If you have a 3.5¢ charge for every container passing through the system, that's a fairly significant amount of money annually that passes through.

[Rep. Rob North (Member)]: It's still essentially a handling fee. It's just not coming from The States,

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: coming from the PRO. Well, the distributor yeah. The the manufacturer's distributors pay the handling fee today. Right? So they're if you think about each container, they're basically paying 8 and a half cents. Five of it is the nickel that travels, and then the 3 and a half is the handling fee. Now we all pay that nickel, and the nickel travels through, but the 3 and a half comes straight from the the pocket of the the manufacturer and and distributors. Right? And it's intended to cover the cost of of the collection and management of these. And and, basically, what we're saying is do it differently. Right? Like, if you're gonna make investments in the system, rather than paying that 3 and a half cents just as a payment to the store, you're now gonna be in charge of basically building a system that provides more convenience and accessibility to consumers, but you may not have to pay that 3 and a half cents. It's a different

[Rep. Rob North (Member)]: skill that handles it. It's it's Sure. Relabeled, renamed.

[Chair Amy Sheldon]: Well, it is. I mean,

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I think it's I think of it rather than being a statutorily created 3 and a half cents per container, that it's a it's a cost yeah. On Exactly. And it's also a cost on manufacturers to create a system that's convenient for the public.

[Rep. Rob North (Member)]: But I guess you answered the main question, is are you assuming that the sheets are gonna be used for that? The answer is no. No. I still come from the state in Europe.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: And I guess the the last thing I should say, and I'm in no way prepared today to talk about it in any detail, is I, generally speaking, agree with some of the comments that have been made that there needs to be a time bound state overseeing infusion of capital equipment based funds into the system to start this system up and to fray some of the startup costs to the system. We haven't made investments in it, and we're wanting to see a significant amount of investments in a relatively short term. I think it makes sense to have a portion of these sheets for a limited period of time be diverted to maybe the Solid Waste Management Assistance Fund, where a grant program is administered by the solid waste program to support, on a reimbursable basis, capital investments made by the PRO. But some of those conversations are happening. They're just I'm not prepared to talk about where they've landed today.

[Chair Amy Sheldon]: When can we expect you to be prepared to talk about that?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I'm working on it. I'm hopeful that within the next week or two, I should be able to have something back to the committee. Thanks.

[Chair Amy Sheldon]: We all set, representative.

[Rep. Rob North (Member)]: I was prepared to go on a different line of questioning if if we're ready to do that, but if we wanna continue with the presentation, that's fine too.

[Chair Amy Sheldon]: I think we're into questioning. Oh, okay. Go ahead.

[Rep. Rob North (Member)]: Great. We heard some really interesting testimony last year from, like, 100% sure how to pronounce her name, Diehl or Diehl? Diehl? Yes. One of the things she said was that if you add the redeemable material that goes that is redeemed, plus that that gets collected through the blue wind system, plus that that goes into the landfill, they're trying to account for it all. Within Vermont, we if you add that all up, it's 16% more than the amount of stuff sold in Vermont. I

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: thought that

[Rep. Rob North (Member)]: was very interesting, which means given the fact that we're surrounded by states that don't have systems, a lot of stuff's coming in, I think, was our primary point of that. A, do you agree with that that assessment?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I think that it is a it's fair to assume that there is cross know there's cross border redemption from New Hampshire along the Connecticut River. And we've I think sometimes it's unintentional. Like, somebody from St. Osbury goes and does their shopping in New Hampshire, they bring their cans back and they redeem them in Vermont. And I also am aware that we've had some conversations with New Hampshire municipalities who thought it was a great way to raise money by collecting cans in New Hampshire and redeeming them in Vermont. So then we told them how that's not okay.

[Rep. Rob North (Member)]: Okay. So assuming those numbers are approximately correct, what is your assessment of that third category? How much of redeemable material is actually ending up in the land?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: So that's in the and I apologize, I don't have those numbers right at my fingertips. It is in the study that was done by RSS that was provided. We've both done a both that study and then we've done a waste composition. I'm happy to get those numbers back to you. I mean, it's you know, it's you know, I'll I'll just pause and say we should all be proud of ourselves. It's for honors and the work that we do to basically divert material from going to landfill. I think we do a pretty good job, especially with beverage container material, disposing of it in a landfill. But we still it's probably in the range between 20 10 to 20% of those containers go in. So it's not inconsequential, but it's it's a lot better than a lot of other states are doing.

[Chair Amy Sheldon]: So I'm finding I did find that paragraph that you're referring to representing North. Mhmm.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: But to follow-up on that, how could we have a sheets building up in an account if that's

[Chair Amy Sheldon]: the case? Like, if there's so much fraud happening, why would we have more not so many bottles not getting redeemed? It doesn't add up.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: So I I to agree. I mean, I think that the argument that I have heard from the other that there is some degree of that our redemption rate is actually lower than the 70 something percent that we see, that some of that redemption rate is because of cross border redemption that's coming in from from containers that are not. And I and I think that's probably true. Can I tell you what that percentage is? No. I can't.

[Chair Amy Sheldon]: Our sheets are still accruing at a significant rate, which they do seem to be. How significant could that really be? It's not like it's a negative number. Anyway, go ahead. Do you

[Rep. Rob North (Member)]: have further questions? Yeah. So if the whole if the big problem that we're trying to solve, I think maybe you're this is what we heard yesterday, or the day before yesterday, and I think you're implying today that the big problem we're trying to solve is increasing that percentage, that ratio less stuff on the line. What data do you have to indicate that increasing accessibility to redemption centers is truly gonna change people's behavior, and they're not still just gonna chuck it and interrupt.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Well, I I think that the data that we've seen, and it's a correlation. Right? It's not I don't have the level that I would like to have as far as but we've seen the number of certified redemption centers decrease over the past five or six years, and the amount of escheats and the redemption rates. So in other words, just looking at the the redemption rates going down, the escheats are going up. Right? And it's those are marginal numbers, but I think that, you know, as as we sort of discussed, there's concern about an erosion in the system. The more we hear from redemption centers that there are too many sorts, it's too much space, it's not enough compensation, And we get these larger areas of the state where in Central Vermont, you've got to drive from Montpelier, you've got to drive twenty minutes and wait in a line for an hour to redeem your containers. And then you have to make a judgment about whether it's worth that or whether you just take them and deposit them

[Rep. Rob North (Member)]: in your blue bed. Just trying to figure out how we convince representative Morris' friends from, you know, checking there. We're dealing both ends of them. Having center a mile down the road as opposed to 20 miles down the road is gonna make any difference.

[Rep. Kate Logan (Member)]: Representative Logan. We could also look to other states, for example, like Oregon, that have adopted programs similar to the one that we're talking about, and their rates of redemption Yes. Evidence as well, I would imagine.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I think that's fair. I mean, you know, you you would you I mean, Oregon's a great example. Oregon's very different. Right? It's it's also you know, because they basically have it's very different in the way they do it, but they also get really good rates of redemption within their system. And so certainly, this moves us closer to that Oregon model of how things are done.

[Chair Amy Sheldon]: Yeah, agreed. I guess one of the topics I want to get to is reporting. So this draft bill brings over some goals not reporting, redemption rates brings over goals from the previous iteration H-one 158. Just like your thoughts on that. What's a realistic expectation of increase in redemption? We had a consensus that bottom two were perhaps overly ambitious without an increase in other the deposit amount of amount of, you know, the 10¢ going to 10¢.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I mean, I think that these goals are aggressive. I guess, let me just say a few things. One is these these are redemption rates. Right? So they're not you're only looking at beverage containers of the bottle bill. So it's not looking to sort of cannibalize other parts of the recycling system through this. So putting that out there. I think that these are very aggressive goals, and I think they're incredibly aggressive, especially when we get to the twenty threeseven, 2040 goals. That being said, they're goals, and it's intended to spur an evaluation system to see what parts of the system can be improved and what we can do to enhance the system to get closer to reaching those goals. Mean, certainly I have not gone through and done an analysis of whether we should make adjustments to these, but I think it's reasonable to make adjustments to those if the community so chooses.

[Chair Amy Sheldon]: So I think it's in my final, and I know you have a question, but there's a

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: lot of reporting in this. There is. And I guess I would like you to help us identify which are gonna be the most helpful parts of it versus because I think a lot of it related to the fact that we were going to also be changing the types of material coming in, and and I wanna make sure that we're actually getting the reporting we need for the part we're standing up now and the auditing both. Seemed like Sure. So I guess I'll say that I think that the reporting this in the proposed section fifteen thirty three of the program in fiscal audit portion of this so the fiscal audit we have a fiscal audit in every EPR program that we administer. Every year. It's just kind of something that they do. And my experience is on the nonprofit boards that I sit on, it's pretty common to have the books audited and a fiscal audit by an accountant come in, and that's shared, in this case, with the agents as well. So I don't think that that's either a huge lift or something that we would want to do away with. I think a five year program audit, again, makes sense. Having a third party look at the efficacy of the program itself to see whether it's doing what you want it to do. And I think that and whether it's achieving its goals and whether there have been improvements that we haven't been focused on that could be made to the program. So I I think that also makes some sense. Let me move through. So the section three report on the status of the recycling system. When we were working with we tried to do the majority of what is in this report with the report that you just received. To some degree, we tried to both take what was in here and also what the agency felt it needed as far as the fiscal analysis of the bottle bill system. So hopefully much of what is in that report you already have sitting on your desk with respect to the RSS report that was put there. So I think that report could come out. To some of the commentary on looking towards other program enhancements, I. E. Expansion or or other program element changes, I actually think that comes through both the program audit and the agency's sort of biennial set of recommendations with respect to the redemption goals. But if you want to call it out to some degree, that's fine to do as well.

[Chair Amy Sheldon]: I just want to also clarify the benefits. I mean, the manufacturers have testified they want this material. So do they end up with this material currently and or under the PRO?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Well, so the PRO, which is effectively the beverage distributors and manufacturers, would have control over the commodity through this system. So as it gets collected and we have aluminum, glass, PET collected through the system, they can direct where they want that material to go in the marketplace. So today, that's not the case because no one really controls the system. Now I will tell you, my understanding is most aluminum goes back to being made into aluminum, But glass and PET, it's highly variable, on where they go. And we don't have incredible data on the beverage redemption material that's being collected today and where it goes and what its ultimate endpoint is. We started getting that data. Told Tamara that they needed to start reporting as a recycler through our reporting system, but we don't have a long history of data like we do with the materials recovery facilities that are in the BlueBin system. That material goes to a number of different reuses, from glass bottles being made into glass bottles to other various applications.

[Chair Amy Sheldon]: Under the PRO, do you imagine more of it would get recycled?

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: I think all of it gets recycled, I should say. There's the notorious illegal disposal enforcement case that we took. But setting that to the side that it's been addressed, I would say it's most, if not all, of the material that comes back into our system. Our disposal or waste rates within the the MRF process and through the the beverage redemption process are very low by comparison to other states and other jurisdictions especially, but even just sort of in an aggregate number. So most of that material is recycled. Is that material going to be recycled into what it was? I mean, you know, my objective as the waste director is that this material was recycled or reused. I'm not I don't care as much about the purpose that it goes to. Right? Like, I I don't I don't know. I think it's valuable for glass. We have a project that we're working on to turn it into an alternative form of septic stone. It decreases the cost of putting in the septic system, and it's a good reuse of that material. And I you know, is it better than turning it into a bottle? I guess, you know, there are real climate impacts in taking glass and putting it on a truck or a train and shipping it to a place that has a foundry to turn it back into a glass bottle. So I think you have to weigh all of those different things when you think about recycling and reuse of some of this material. And I don't think we should automatically jump to its return to its previous use as being the highest and best use of these materials. But that's my perception as the director of the waste management division and others, obviously, disagree. So Representative

[Chair Amy Sheldon]: Tagliavia.

[Rep. Michael "Mike" Tagliavia (Member)]: A couple questions. You said redemption rates were going down, but these sheets were going up. Is that correct? Right. Okay. So that's good for the Clean Water Fund. Clean Water Fund likes that. The MERFIN does like that. Why are we looking to decrease clean water fund? Number one. Number two, do we have any statistics from any of the MRFs to show that that material is still getting recycled. And if we know that, especially these stuff that's the eschetes, then these eschetes are actually worth more because you're getting somebody's getting paid twice for that stuff. I'm trying to figure out, this seems like a solution in search of

[Rep. Rob North (Member)]: a problem here.

[Rep. Michael "Mike" Tagliavia (Member)]: The other thing is, I think the PROs have stated to your agency that they want the material. The people who operate the MRFs also want the material. Why are we stepping in to decide who gets it? As long as it's being recycled.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: So I will just say from the agency's perspective that and I guess I'll inject a little bit of my longevity. So I've been doing this for, like, twenty five years. And, in that twenty five years, I've seen both the legislature and the agency look to see, whether we should get rid of the bottle and just have a 100% blue bin system, and there's not been the political support to do that. And I've looked at the legislature wanting to expand the bottle bill and increase the deposit, and there hasn't been the political support, gubernatorial support to do that. And, you know, I think from the agency's perspective, if we're going to have a bottle bill, we want that bottle bill to work for consumers in Vermont and not have people feel that the bottle bill that that they don't have an opportunity to get the nickel back. Right? That it that it's just a a tax on them as opposed to a system where they pay a deposit and there's an easily accessible nickel on the back end of the system. And so that is really the purpose of what we're trying to do here is if we're committed as a state to having a bottle bill, then we should make sure that that system works well for monitors and provides sort of an efficient system. So I'm not going weigh in today on expansion and getting rid of it. Mean, we've certainly looked at all of those things, and I appreciate the different perspectives over time with respect to those. But that's a much larger policy consideration if the committee wants to take it.

[Chair Amy Sheldon]: Thanks for your testimony this morning and joining us on short notice.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: You're welcome.

[Chair Amy Sheldon]: It's a very helpful use of our time.

[Unidentified Committee Member]: Alright. Get that.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Yeah. Thank you.

[Chair Amy Sheldon]: Our next witness is joining by Zoom, and he is joining our Zoom room now. Shifting back to Wildlands. Good morning, Michael.

[Michael Kellett, Executive Director, Restore the North Woods]: Good morning. Morning.

[Chair Amy Sheldon]: You are now joining us live in our committee room. Welcome to the House in Vermont Legislature's House Environment Committee.

[Michael Kellett, Executive Director, Restore the North Woods]: Thank you very much. I really appreciate the opportunity to talk to you.

[Chair Amy Sheldon]: Okay. So, hold on one second. You may be our first Zoom witness of the session but we're having a little bit of a hard time hearing.

[Michael Kellett, Executive Director, Restore the North Woods]: Okay.

[Chair Amy Sheldon]: Yeah, let's see if it's on our end and can you try speaking again?

[Michael Kellett, Executive Director, Restore the North Woods]: How is that? Is that better?

[Chair Amy Sheldon]: A little better, yes. Is that the highest it goes? Oh, a couple more. Great. As high it goes. Yeah. Alright. Go ahead.

[Michael Kellett, Executive Director, Restore the North Woods]: Thank you. I I have a presentation that I wanted to provide for you if I can do that.

[Chair Amy Sheldon]: You may. I wonder if you can you get closer to your mic on your end?

[Unidentified Committee Member]: Thank you.

[Michael Kellett, Executive Director, Restore the North Woods]: How's that?

[Chair Amy Sheldon]: I think that's a little better also. Thanks.

[Michael Kellett, Executive Director, Restore the North Woods]: Okay. I'm trying to oh, okay. Let me, bear with me for just a second here. Okay, can you see that?

[Chair Amy Sheldon]: We

[Michael Kellett, Executive Director, Restore the North Woods]: can. Okay. So I'll I'll try not to go on too long here. I'd be really happy to answer any questions. I'm Michael Kellett. I'm executive director of Restore the North Woods. We're a regional nonprofit and we have members across New England including in Vermont and other New England states. And so I'm I'm pleased to be able to speak in favor of this important bill and I hope I can provide a few insights that might be helpful. So, oops, so, I've worked on this type of legislation in Massachusetts for a number of years, and, there are a lot of similarities actually, so it made me think about what we have learned and what we've, observed with our bills and how that might apply in Vermont. I won't go into, I won't read all this stuff, but I wanted to provide the committee with this kind of information that you can look at at your leisure. So the H 276 has a lot of similarities including, how, wild lands or protected areas are defined, and it's got a very really good, description, I think, of of how those areas should be managed and protected and so forth. It it should be noted that it's that it it still leaves the vast majority of the state on open to active management and so forth. So just like in Massachusetts, we're only talking about a relatively small percentage of the state that would be protected under the act. One of the things that we've addressed in Massachusetts, and I'm sure it's an issue in Vermont that people are thinking about, is what about if you protect these areas as wild lands and you're not going to be doing commercial timber harvesting. What is impact is that going to have on timber supply and on the economy? And as we found in Massachusetts, it's state lands are not a major source of timber and there are plenty of opportunities for timber production on private lands. And in fact, Vermont, the percentage is now only about 1% of timber production comes from state lands. Massachusetts is actually slightly higher because we don't have as much private timberland that's active, but we, you know, not that much is produced in Massachusetts, relatively speaking either. So I know that others have talked about the non timber benefits of wildland protection, biodiversity, climate, human health and well-being. One of the things that I wanted to talk about a little bit is economic diversity and benefits. So, Restore the North Woods, had a a study done a couple decades ago now by Thomas Power, who's, who, the late Thomas Power, who was an amazing resource economist from University of Minnesota or Montana. And he did an analysis of all the counties in that had major national parks in The United States at the time. And they found that that all the economic, indicators, income, population growth rates, diversity, jobs, were better in almost every single county that had a large park or wilderness than in areas that didn't have those. And these we're talking about mostly rural, not major urban areas. So what are the major economic benefits? Visitor spending, visitors spend money for local businesses. Jobs are created as a result of this and other benefits from visitors and tourism. It helps to diversify the local economy by bringing all these people in and new people move in who start new businesses. The reason I'm showing Yellowstone here is because this has been well known for for many, for more than a hundred years that this, these effects are, these benefits accrue when you protect wild lands. Three more economic benefits and and I'm showing New River Gorge National Park And Preserve which is in West Virginia which is a very a conservative state. Certainly not extremely left wing about environmental issues and whatever, but they realized that these economic benefits were important and supported upgrading what was then a national river, which was much less known to a full national park. The other economic benefits, in addition to those other three, are property values have found to increase near protected areas and parks and, new businesses are attracted because of the economic and natural benefits caused by this protection and Public funding and support tends to be higher for areas that are protected like this because the public is more aware of them and is more supportive. So National Park Service annually looks at the benefits of national parks and nationally, it's, you know, almost the equivalent to the entire US population visits national parks each year. And I won't go through all the numbers here, but the overall, the national parks supply about $56,000,000,000 to The US economy each year. In New England, Acadia is our only full national park. It gets 4,000,000 visitors. It provides $745,000,000 in benefits to gateway communities. As you know, is way down east and are pretty far down east. So these are relatively small communities. That's a lot of money to bring benefits. But of course, we're not talking about Acadia right here. We're talking about smaller areas and they're more, you know, they're not national parks we're talking about. However, if you look at say Cotodon Woods And Waters National Monument, which some of you may have visited, it's way up there in Northern Maine. It's not well known. It's new. It's own. It was established in 2016. But this area had already in 2024 brought 35,000 visitors to the area. That's a lot more people than were visiting this remote area before. And it brought $3,400,000 to the local communities, which are small rural towns. I've been up there and you can see the businesses have really benefited from this. So I see H276 as an opportunity for Vermont to accomplish a lot of these same things. It's not like you have no economy in these towns now, I think protecting these areas, it's been shown that the protection of wild lands and bringing it to people's awareness, not just in Vermont, but across New England would, I'm sure, bring increased economic benefits. You've got some areas that are already pretty well known, like Camel's Hump State Park. But also there are places like Lake Willoughby, are beautiful and amazing, but a lot fewer people know about them or visit these areas. This could bring opportunity to both the areas already well known and to areas that are not so well known. So that's my my take on it and thank you for, the opportunity and I'd be happy to answer questions.

[Chair Amy Sheldon]: Sure. Thanks for your testimony. Can you just, do some of the sort of basics on what is the mission of your organization? And then I would be interested in learning a little bit more about the Massachusetts legislation that you were talking about.

[Michael Kellett, Executive Director, Restore the North Woods]: Yes, we're a nonprofit and our mission is to protect, public lands and parks and forests and wildlife. And our our major, priority is to is land protection to do that. So, we've been involved and we we proposed a Maine Woods National Park 25, whatever year, quite a long time ago and that led to the to the creation of the Katahdin Woods And Waters National Monument which is within the area we originally proposed as a national park. We've also been involved as you've mentioned in helping to to move conceive and and move forward these three bills in Massachusetts, which basically are similar to what your one bill would do on state lands in Massachusetts.

[Chair Amy Sheldon]: And what's the status of those now?

[Michael Kellett, Executive Director, Restore the North Woods]: Those are, they've been, they're in committee. The the committee's doing its thing. They are they have postponed because of calendar and so forth a final decision on whether to move to submit them for to the full legislature or to put put them on in cold storage. And we should know, pretty soon this month which way it's going to go. So right now we're sort of up in the air on where that's what's happening there. There's also a, bond bill, an omnibus bond bill that the governor has submitted, and there's an up there's a possibility of, adding language from our bills to that bond bill. And we don't know whether that's going to happen or not. We've we're talking to committee staff and so forth about that.

[Chair Amy Sheldon]: It's interesting to learn about the national monument. I I have that original map that your organization put out thirty years ago somewhere, for the Maine Woods National Park, so it's nice to hear that that's come to fruition through a national monument.

[Michael Kellett, Executive Director, Restore the North Woods]: Well, in one

[Chair Amy Sheldon]: Do you

[Michael Kellett, Executive Director, Restore the North Woods]: Oh, sorry, Sarah.

[Chair Amy Sheldon]: No, go ahead.

[Michael Kellett, Executive Director, Restore the North Woods]: Oh, well, just one thing to add to that is that at the time we proposed that park, a lot of people and and these are not just like timber industry or other people who seem like they would not be happy with a national park, but people who lived in the local towns were worried that what would this do to the economy? Is this going to, you know, be a Because especially in Maine, the paper industry really has been in the doldrums and people were starting to say, well, maybe we should think about diversifying. But interestingly, when that monument happened, you can't find, you can, you'd be have a hard time finding anybody who opposes the monument and people who live up there say, you know, I'm really glad it happened. I had some doubts but this has really been good for the economy. So, I think there's, you know, we you learn over time that sometimes first impressions are just don't turn out to be what they are. They seem to.

[Chair Amy Sheldon]: Can you share with us other are there other states that you're aware of that have wilderness designations? Well, we know New York has a process for them.

[Michael Kellett, Executive Director, Restore the North Woods]: Oh, state state land wilderness? Yeah. Actually not very many states have this. Michigan does. Ohio has nature preserves, which are basically like what your this bill would do. Although I don't think it's statutory. I think protection just like Maine has ecological reserves, but they're not they're statutory. They're administrative. So there's legislation that authorizes the agency to create them, but there's no statutory permanent protection for them. Massachusetts and Vermont, I believe are the first states that actually would give statutory protection other than well, New York, of course, has constitutional protection for the Preserves, the Catskills and the Adirondacks. But other states don't, you know, they it's administrative. I, California, I may have for some of its net state parks, but it's not it's really a cutting edge thing, which I think is long overdue because you it's easy for things to be lost over time through administrative changes and different administrations that have different visions. It's it's much better if you can, that, that's why they passed the original Wilderness Act, of course, nationally is because the US Forest Service was slipping and areas that were originally protected were open to development or extraction and so forth.

[Chair Amy Sheldon]: Yeah. But I also think you bring up the the important distinction is that California, for example, has a lot of federal wilderness.

[Michael Kellett, Executive Director, Restore the North Woods]: Right.

[Chair Amy Sheldon]: So they they would have less need for a state designation.

[Michael Kellett, Executive Director, Restore the North Woods]: Right. The same with other Western states. They don't. It's not a high priority to worry about. And and their percentage of their land base in state ownership is way less than Eastern states. Do other members have questions?

[Chair Amy Sheldon]: Representative Morris.

[Rep. Kristi Morris (Member)]: Thank you, Sharon. We will now ask a question. Are we are we actually considering or thinking it's even possible to get some of our state lands that we might protect under this bill to be considered a national park?

[Chair Amy Sheldon]: That's not contemplated. No. I think he was just drawing the parallel.

[Rep. Kristi Morris (Member)]: Yeah. I recognize the I recognize the big economic draw that that billboard Yeah. Billboard. I just thought, you know, not in a physical sense, but it call something a national park, boom, you get instant draw.

[Unidentified Committee Member]: You do.

[Rep. Kristi Morris (Member)]: That, I can totally understand the advantages of that. But if we're not so that's why I'm asking, we, A, what's the process to get something declared at national park? I mean, we have Rockefeller Billings as a national historic park, but that's the only other nationally recognized thing we have here at Compromise. What's the possibility even Getting it nationally, a national park.

[Michael Kellett, Executive Director, Restore the North Woods]: Right. Well, we we are not explicitly calling for these lands to be national park lands. That's that's but we are support supporting new new national parks in New England. And, we we would support the Green Mountain National Forest, which is already federal being converted to a national park. It would totally qualify. Same with the White Mountain National Forest. That's a whole other issue, and that's not what you're talking about. But state lands can be either a part of for example, Boston Harbor Islands National Recreation Area, which some of you have if you've ever flown into Logan Airport, you're flying over those islands. They are not federal lands. There's either state or city or county. I don't know, I guess they're not county, but city or state lands, most of them. So there's a cooperative sort of involvement there. So it's a whole other discussion, but it's not impossible for state lands to become national parklands but it's a whole the legislature and the governor of course have to totally support that. There has to be legislation. It has to be and then the the congress has to weigh in. So, it's a much, it's more complicated and it's, you know, that's it can be done, but it's it's a different issue.

[Rep. Rob North (Member)]: I think we're most

[Chair Amy Sheldon]: But I think to follow-up, I'd be curious if you can just share with us how you did establish the National Monument in Katahdin Woods. What's the land what was the land ownership before it became a national monument?

[Michael Kellett, Executive Director, Restore the North Woods]: Well, that's a good example of how it doesn't have to be it doesn't have to be an existing, say, national forest. That land, was, timberland owned by, companies, mostly corporate timberlands. And when we proposed the national park, and this is why it's important to protect lands under VERA even if it's like at state level, it sets a tone for that people understand that area is really important. And what happened is when we proposed this national park, it really directed a lot of public interest and focus on that area that really hadn't been there before. I mean, is way up there. Most people don't even know the area that well. And what happened is Roxanne Quinby, who is the founder of the Burt's Bees Company and the lip balm company, who she made millions and millions of dollars from that company. She heard about our proposal And she said, you know, I want to buy land in your proposed park and donate it to become a national park. And this was like in the nineteen late 1990s, maybe early 2000s. And we said, sounds good. So she went out and literally bought 87,500 acres next to Baxter State Park. And it shows you how important state protection is because that was a good main reason she picked that area among other things and arranged to donate it to the federal government and President Obama at the time agreed to and this is how a number of national monuments have happened is where, for example, Muir Woods in California. This was acquired by a philanthropist. And then what they do is they they arrange to donate it to the federal government. And then the Secretary of the Interior flips around and and and any it has to be federal to be made a national monument. So it was donated and then President Obama turned around and made it a national monument. So it's federal land now, but it was originally, Timberland, private and corporate, and then it was acquired and then donated.

[Chair Amy Sheldon]: And I think that reminds me of an important piece of this story is that Maine does have Baxter State Park which is functionally managed as a wild area. Right. So tell us a little more about that.

[Michael Kellett, Executive Director, Restore the North Woods]: Well, Baxter State Park, you probably all know at least something about the history of that former governor, Percival Baxter, acquired this that was private. That was mostly great Northern, I think, paper company land. He acquired piece by piece this this 200 plus thousand acre area and wanted the state to make it a state park through the legislature and they declined to do it. And so he finally basically strong armed them into doing and making a state park with a separate it has a it's not a regular state park. It has a separate steering committee that's that's statutorily created that oversees the park. And so even though it's not statutorily protected as wilderness, it it's got a whole layer of protection that that it makes it pretty close to that. And so it's it's really got it's there have been attempts, for example, to do salvage logging after a fire, and that was that was turned down because it was basically at the will of Percival Baxter made it clear. I want this to be forever wild. Here's what, you know, here's the goal, and they've stayed, true to that.

[Chair Amy Sheldon]: Members have further questions? Representative Austin.

[Rep. Sarah "Sarita" Austin (Clerk)]: Yep. I'm just wondering, like, the revenue source from, you know, the recreation industry. Where where do those where do those funds go in terms of like is it sales and use tax that goes to a certain fund? Where how is that money distributed?

[Michael Kellett, Executive Director, Restore the North Woods]: Well, it's basically growth in the in the tourism and related industries. So, it just like any town where the there's an attraction that people are interested in seeing and visiting. You get more people going to that area and what happens is there's a whole quality of life economic theory that people when when an area is put on the map as an as a high quality of life area, more people wanna move there, more people wanna create businesses, those businesses create more jobs, higher, larger tax base. A good example of this is Bozeman, Montana. Now, this is a national park, of course, but Yellowstone National Park and it's apparently, especially after the TV show, Yellowstone, went on, people have been moving to Bozeman, Montana, which is it really its main economy, you know, one hundred years ago was cows. And today it's growing like crazy and because it's near Yellowstone. And so what that's done is a lot lot of companies have moved there. You've got, you know, high-tech companies that don't that they can be anywhere they want, for example, will move to places with high quality of life. And and that brings a lot. That brings money to the economy. So it's it's of course the local towns have to manage that and you otherwise you could you you know just like any place else you you can have growth that's not good. And Vermont is aware of that and trying to manage that. So you do have to do that. But it basically chart, you know, expands the entire economy and but it but this is a sustainable kind of economy too. It's not like, you know, timber and mining and so forth. Not that they should never happen but where they do happen, it's it can be a boom and bust thing and so it it's not that it's not having this kind of an economy add stability and sustainability to the economy.

[Chair Amy Sheldon]: Alright. Thanks so much for joining us and for your testimony.

[Michael Kellett, Executive Director, Restore the North Woods]: Thank you.

[Matt Chapin, Director, Waste Management and Prevention Division, VT Department of Environmental Conservation]: Thank you.

[Michael Kellett, Executive Director, Restore the North Woods]: Appreciate it.

[Chair Amy Sheldon]: With that, are going to break until after lunch at 01:15. So, Kat, would you please take us off live?