Vermont Legislature SmartTranscripts:

[Rep. Matthew Birong, Chair]: Alright. Good afternoon, everyone. It is shortly after 1PM on Tuesday, February 24, starting off our week here in house government operations and military affairs with h one zero three, an act relating to prohibited practices or services involving veterans benefits. We're gonna start with legislative council. There's been a lot of work over the past weeks, if not months, by Representative Morgan and other interested parties. So you're going to hear from counsel on what the new words on the page look like. Good morning, counsel.

[Sophie Zdatny, Office of Legislative Counsel]: Good afternoon. Sophie Zidatney for the Office of Legislative Council. I'm just waiting for permission to share.

[Rep. Michael Morgan, Member (bill sponsor)]: We love that. I was telling him about it.

[Unidentified Committee Member]: I'm just on the way in.

[Rep. Matthew Birong, Chair]: Yeah. Counsel, the table is yours.

[Sophie Zdatny, Office of Legislative Counsel]: Okay. So before I walk through this, let me just quickly do a quick recap from the bill that was introduced last session. So that bill was to prohibit folks that are not accredited by the Veterans Administration to provide assistance for benefits veterans. This bill is different than that was, so I just want to make sure that's understood upfront. Under federal law, it is actually illegal for folks to help veterans with benefits and charge them compensation, but there's a loophole in the law. So, a lot of companies have started providing assistance to veterans to help them get their benefits, but for compensation. So, essentially, what this bill would do is it would provide some guardrails around those folks. I just want to be clear that people understand this is a different bill than the one that was introduced last year. This is now looking at making sure that those companies that do assist veterans, there are some guardrails in place. So, I just wanted to make sure everyone was clear on that. This is quite a different bill. It's still looking at consumer protection, if there are violations of the bill. That hasn't changed. They would still be looking at other consumer protection laws to follow-up on any violations of this bill as drafted.

[Rep. Lisa Hango, Vice Chair]: So,

[Sophie Zdatny, Office of Legislative Counsel]: I have not highlighted the bill, because there really were too many changes. So, I'm going to go through them, but it's not highlighted, because it's quite different. So again, the intent has now shifted. So it's the intent of the General Assembly to regulate the practices of persons seeking to receive compensation for advising, consulting, or assisting any individual regarding a veteran's benefits matter as defined in this chapter, and to protect veterans, their dependents, and survivors from unfair and deceptive practices. Under the definitions seventeen fifty two, definitions one and three have not changed, but this adds in the definition of a person. So under state law, a person is a natural person, but it's also a corporation or a business. And rather than being repetitive throughout the bill on carving out organizations that are officially recognized as accredited agents and attorneys. This just puts right in the definitions that person does not include those folks. So a person means any natural person, corporation, partnership, or other legal entity that but for purposes of this chapter, person does not include an accredited representative of a recognized organization or an accredited agent or attorney pursuant to the federal regulations. So as you go through this, just be aware there's that carve out. So this is dealing with those entities that are not accredited by the Veterans Administration. And then there's no change to the Veterans Benefits Matter definition. Under prohibited conduct, some of these were in the previous bill, and then some have changed. So prohibited conduct is that no person shall act as an agent or attorney with respect to a veteran's benefits matter unless the person has been recognized for such purpose by the Secretary of the US Department of Veterans Affairs. Right? So that's what we understand the case to be. No person shall receive compensation for referring individuals to another person for advice, consultation, or assistance with regard to any veterans benefits matter. No person shall guarantee, either directly or by implication, that any individual is certain to receive specific veterans' benefits or that any individual is certain to receive a specific level, percentage, or amount of veterans' benefits. Then this is a new piece here: No person shall use an individual's personal login, username or password information to access an individual's medical, financial or government benefit information. I would just add in here that some of the changes that are incorporated into this bill are based on a Tennessee law that was passed in 2025, and there are there is some differences between them, and one of them is that under the prohibitions under the Tennessee law, is that you won't use I think it's an international calling center, you know, for for veterans handling veterans affairs. So there may be something else you might want to consider from the Tennessee bill to include in here, but that's was not part of this. 1754, so this, again, this is where these kinds of guardrails are in place, so and really providing transparency for the veterans because or their their family members that are eligible to receive these benefits to make sure that they understand what they are dealing with here. So this provides any person advising, assisting, or consulting with an individual on a veterans benefits matter she'll provide the individual with the following written disclosure prior to entering into a business relationship. And so this disclosure really spells out that the business is not sponsored by or affiliated with the US Department of Veterans Affairs, the Vermont Office of Veterans Affairs, or any congressionally chartered veteran service organization. This business does not act as your agent or attorney with respect to your veterans' benefits matter and does not represent you before the U. S. Department of Veterans Affairs. And then it explains that other organizations, such as the Vermont Office of Veterans Affairs and congressionally chartered veteran service organizations, may be able to provide you with this service free of charge. Products or services offered by this business are not endorsed by the US Department of Veterans Affairs, the Vermont Office of Veterans Affairs, or a congressionally chartered Veterans Service Organization. You may qualify for other veterans benefits beyond this benefit for which you are receiving assistance from this business. And then in subsection b, this provides that the written disclosure that's required be printed in not less than 12 boldface type of uniform font, and that the individual seeking assistance with the benefits matter has to sign the document containing the written disclosure acknowledging receipt of the disclosure. And then the person who's providing the assistance, the services, they would retain a copy of the signed written disclosure for at least one year following the termination of the service relationship. And then subsection requires that the services be memorialized, all the terms be memorialized. So, a person seeking to receive compensation for advising, consulting, or assisting an individual with a veteran's benefits matter shall, before rendering service, memorialize all terms regarding the amount of payment for services to be rendered in a written agreement signed by both parties. Subsection puts a cap on compensation, so compensation for services rendered shall be contingent upon the individual receiving an increase in the amount of veterans benefits awarded, so if there is no increase, there would be no payment made. A person advising, consulting, or assisting on a veteran's benefits matter shall not charge an initial fee. And a person shall not charge an individual more than five times the amount of the monthly increase in benefits awarded on the veteran's benefits matter claim. So, for example, if somebody gets an increase of $1,000 in their monthly benefits awarded, they would then be paying $5,000 to the entity that's assisting them. This is a new section, seventeen fifty five, providing for a background check that any person advising, assisting, or consulting on veterans benefits matters shall obtain a criminal background check, and then it cross references to 21 VSA section four ninety five, which lists out when you can request information about someone's criminal background. But each employee has access to the medical or financial information of any individual receiving such services prior to the employee having access to such information. And then the bill concludes with, section seventeen fifty six. And, again, this bit is unchanged. This is a reference back to the consumer protection statutes in in, title nine. A violation of this chapter is deemed to be a violation of The United States a twenty four fifty three, and the attorney general or a state's attorney has the same authority to make rules, conduct civil investigations, enter into assurances of discontinuance, bring civil actions, and private parties have the same rights and remedies as provided under nine VSA chapter 63, subchapter one, and then the date has been updated to be going to effect this 07/01/2026.

[Rep. Matthew Birong, Chair]: That's the run through committee. Any questions for counsel? Perhaps no.

[Unidentified Committee Member]: How precisely will the term veterans benefit matter be interpreted in practice? Will that also include things like helping with an online application? So this is a definition. There have been

[Sophie Zdatny, Office of Legislative Counsel]: a number of states that have been looking at passing laws like this. This is kind of the standard general language that's being used. It's very similar to what's in the Tennessee bill as well. So, it's the preparation, presentation, or prosecution of a claim affecting an individual. And again, an individual, it might be not just the veteran, particularly if it's deceased or whatever. So an individual throughout this bill is referring to someone that's seeking to obtain veterans benefits. So this would be who's filed or expressed an intent to claim file a claim for a benefit program, service commodity function, or status. To be honest, I don't remember exactly where this language came from, as it's been probably eighteen months since this was initially drafted, but this is sort of the general language that's being used in these statutes. I don't remember which specific one it came from. Are you concerned it's not comprehensive enough?

[Unidentified Committee Member]: No, I was just making sure it was. It looks like there's stuff listed there, like the program service, just so that we're covering all of the faces so that people can't weasel out and say, oh, it wasn't a benefit. I was advertising a service that may let you know, just making sure it's tight enough. And then in the disclosure requirements, is there standard language that's either proposed in this bill, or are you seeing from other states who have passed the bill to avoid confusion among service providers?

[Sophie Zdatny, Office of Legislative Counsel]: This was the language that was requested that is largely drawn from the Tennessee bill if it passed. And again, I think the goal of these guardrails is to make sure that if someone is using a service to access benefits, that they fully understand what they're getting into.

[Rep. Lisa Hango, Vice Chair]: So I think that's the purpose of

[Sophie Zdatny, Office of Legislative Counsel]: the disclosure, to make sure it's as transparent as possible.

[Rep. Matthew Birong, Chair]: Any other questions from the table? No. Thank you very much, counsel. So I wanna shift next over to one of both of the sponsors of DeVille. If you just wanted to, like, offer any suggestion or just any feedback on the process and your sentiment on the changes? Yeah. Would you like to join us, sir?

[Rep. Michael Morgan, Member (bill sponsor)]: I don't have much to say other than I've looked at the changes, find them, and maybe the initial you know, that which all of us submitted. It goes a little further than what we had submitted, it adds to what we actually have. I'm very appreciative of the committee making this up, as well as representatives. Thank you very much on behalf of all veterans that.

[Rep. Matthew Birong, Chair]: Thank you for that representative. So, now for interested parties. I have Josh diamond and John. How are you gentlemen doing? Good afternoon.

[John Blumstrom, Veterans Guardian]: Mister chairman, good afternoon.

[Joshua Diamond, Attorney (on behalf of Veterans Guardian)]: Joshua Diamond for the record and John Blundstrom for the record. And we'll be both here on behalf of Veterans Guardian. I'll turn it

[John Blumstrom, Veterans Guardian]: over to John for comments. Thank you. Chairman Birong, members of the committee, I want to thank you for the opportunity today to provide testimony in support of H103. As I stated, my name is John Blumstrom. I'm a United States Marine Corps veteran. Currently work in the veteran benefits policy space on behalf of Veterans Guardian. Veterans Guardian assists and guides veterans as they submit their initial disability benefits claim at the United States Department of Veterans Affairs. We provide a passionate team that is focused on serving our nation's veterans. I appreciate the thoughtful engagement from Representative Morgan, Representative Page and Labor, and Mr. Burke of the Vermont Office of Veterans Affairs. This collaborative approach taken here reflects the seriousness of this issue and the shared goal of protecting Vermont's veterans. H-one 103, with its proposed amendments, provides meaningful consumer protections while not eliminating options. The bill with the proposed amendments establishes consumer protections for any business that chooses to operate the benefit veteran benefit space, including no upfront fees, compensation only if they if there's successful increase. And where I want to be very clear about that is that providers like ours that work ethically and in the best interest of the veteran ensure that we are not leaving a veteran worse off than when they came to work with us. If we are not successful in a veteran getting an increase, we do not charge them anything. If a veteran cannot afford to pay us, we work with them on any payment plan. So again, we are focused on ensuring transparency through disclosure and ensuring that a veteran knows all of their options to include the free services. In fact, I want to be very clear about this. We implore them to use the free services before using a service like ours. It's very important that they know that free services are available. We actually tell them to go and use those services before picking up a service like ours. We want us to be the last option, not the first. We also require clear written agreements, disclosure of the free services, prohibitions on misleading representations, privacy protections, and background checks, enforcement through Vermont's consumer protection framework. We feel that these are reasonable and substantive protections. I want to be very clear also here that the VSOs are the free services veterans are encouraged to use. As amended, H103 would require providers like ours to disclose to a veteran that said free services are available. And again, according to the data of Vermont's VSO capacity, approximately nine VSOs statewide serving roughly 4,300 veterans per representative with over 100 1,100 pending claims, 40.9% claims, pending longer than one hundred and twenty five days. I say all that to say this: when veterans encounter delays or complexity, some choose to seek additional assistance. That choice should not be prohibited or categorically eliminated. It should be regulated to protect veterans. H-one 103 is amended to achieve those twin goals of providing consumer protections and choice. There's been discussion nationally about whether private assistance violates federal law. The governing statute restricts veterans who act as an agent or attorney, This distinction is critical. Acting as an accredited agent or attorney is federally regulated. Providing preparatory assistance or advising support without acting as an agent of record is not prohibited under current federal statute. H-one 103 represents that boundary. It explicitly carves out credit agents and attorneys regulated by the U. S. Department of Veterans Affairs, and it does not attempt to interfere with federal accreditation. It does not redefine a federal authority. It simply regulates consumer conduct within Vermont. What this bill is and is not. What it does not require a veteran to pay anyone. I want to be very clear about that. It does not eliminate free services. It does not undermine the VSOs. And more importantly, it does not fear with, accredited attorneys ensuring that those options are still first and foremost available to Vermont veterans. What it does is protect veterans from bad actors, preserve freedom of choice, require transparency, impose accountability. This bill recognizes reality. Some veterans file a loan, many use VSOs. The answer is not to eliminate one pathway. The answer is to regulate responsibility responsibly, pardon me. H103 is a thoughtful, balanced approach that protects veteran Vermont veterans while providing meaningful choice in the marketplace. Respect for your interest and support. Thank you for your time and commitment to Vermont's veterans. I'll conclude with saying that I really appreciate the time today, but I also appreciate those on this committee who have served both in and out of uniform and appreciate the time and opportunity today to speak before you. Thank you. Thank you.

[Rep. Matthew Birong, Chair]: Any questions for our guests on their perspective and role within this conversation? Seeing no items? Thank you for the time, if anything. Yes. Mr. Chairman, thank you. Thank you, girl. Definitely refer to the gallery if anything pops up for you. Next, Ray Polis, please. Just waiting for. Waving in support. Alright. That was a very efficient utilization of table time. Thank you, sir. Mister Burke.

[Joshua Diamond, Attorney (on behalf of Veterans Guardian)]: I'm gonna get his phone now.

[Rep. Lisa Hango, Vice Chair]: I always drink.

[Robert Burke, Director, Vermont Office of Veterans Affairs]: Good afternoon, everyone. Robert Burke, director of the Vermont Office of Veterans Affairs for the record. So I work closely with senator Morgan and and Woodman to look at different modifications and improvements to just build, all of which have come out in the final version, I guess, let's say. So the the data presented is correct. I have four service officers, and they are carrying about 1,100 cases per, as they everywhere from taking POA, doing an intent to file, all the way up to a decision, appeal, possibly, yeah, and it is long, the long and winding road. I think that this strikes a balance between regulation and consumer protection. I think it's a compromise. A lot of it is, as Legis Council said, taken from the Tennessee bill. So a lot of the verbiage that you see in the legislation from different states is very similar. It does provide an avenue for people who are not accredited, who are not agents or attorneys, and certified by the United States Department of Veterans Affairs to advise and assist in veterans filing claims, not to file on their behalf, not to have access to the records system, benefit management system that the federal VA runs. So they they are they are consultants, advisers. And and I think that that's as Legion Council broke out, a bit of a compromise, because the federal statute is very clear on accreditation and the ability to represent individuals, veterans, or their surviving spouses, family members, before the Department of Veterans Affairs. So, I am in support of it. A lot of other states have chosen to prohibit it, but just for an example, Louisiana's recent attempt was struck down by the Supreme Court as being unconstitutional, and not allowing companies the ability to advise and assist. So that's just a piece of piece of data.

[Unidentified Committee Member]: Okay. Yes, representative. And a clarity slash sort of a question to both Bob and John is that in the end, utilizing, for instance, Veterans Guardians assistance, you all don't submit the claim. Yep. They advise, well, give your spiel on

[John Blumstrom, Veterans Guardian]: that. Yeah. I mean, the long history, hear that. Mister Burke is right. The the Louisiana law was a little overreaching and violated the supremacy clause as well as the what's the word?

[Adam Greshin, Commissioner of Finance & Management]: Supremacy clause? Yeah,

[John Blumstrom, Veterans Guardian]: there we go. And the fact that the Louisiana law forgot to carve out accredited agents or attorneys, and so as a result was deemed unconstitutional. The consumer protections were not, but the fact that the Louisiana law neglected to carve out and tried to govern federal agents or attorneys was what the court deemed problematic. So we're fully in support of that law, you know, being struck down because again, this this these consumer protections should not apply to accredited agents or attorneys, and mister Burke is absolutely correct in that.

[Unidentified Committee Member]: But when the day is done, you all advise assist, but the veterans still responsible for submitting it themselves?

[Rep. Matthew Birong, Chair]: That is correct. Yes. Just want people to be clear on that.

[Unidentified Committee Member]: They don't assemble all the papers and go, here you go, Department of Veterans Affairs, individual the the onus is still on the member or the the veteran.

[Rep. Matthew Birong, Chair]: They're there as a resource to, like, guide the process, but the responsibility to put the request forward is still exists within the hands of the veteran plus credit benefit.

[Unidentified Committee Member]: Yeah. Just wanna be clear on that, that people didn't come away with the understanding that they would be this unlike, BSOs will orchestrate, help you assemble, and go, Yay verily, here you go, Patrick, Department of Education.

[Robert Burke, Director, Vermont Office of Veterans Affairs]: Because my service officers are accredited through the VA to take power of attorney and then represent those clients' power of attorney fully through the process up to and including appeals, and then we use, it's a group down in Virginia and VLSP, and so they are lawyers that if you get to the Court of Veterans' Appeals point, you want a lawyer. Correct.

[John Blumstrom, Veterans Guardian]: Yeah. Period.

[Unidentified Committee Member]: Oh, yeah.

[Robert Burke, Director, Vermont Office of Veterans Affairs]: You don't want a service officer. You don't want an adviser. You want

[Rep. Matthew Birong, Chair]: a lawyer. And you actually just deepened into my power of attorney question, so thank you for that. Yeah. All right. But it seems like all of the interested parties are agreeable right now with the amended language and the proposal. So, thank you everyone for everyone's work on this. I know there's a lot of effort that went into this. So, across the board, I just want to say I'm appreciative. Any other questions for Mr. Birong?

[Adam Greshin, Commissioner of Finance & Management]: Okay.

[Rep. Matthew Birong, Chair]: So I guess that's where this leaves us with this one is we have some time between now and its next scheduled conversation, which I believe is Friday morning at 10:45 for a committee committee discussion and vote. So that gives us a little bit of time to marinate on it. But what I'm hearing from everyone seems pretty crisp for us to get it out the door this week.

[Rep. Lisa Hango, Vice Chair]: Yes.

[Rep. Matthew Birong, Chair]: But

[Rep. Lisa Hango, Vice Chair]: it makes sense to combine this with our other Veterans Affairs bills as one Yeah,

[Rep. Matthew Birong, Chair]: we talked about that, and this one's a little bit more unique from it. So within that conversation, we felt like keeping up with two separate things. We were discussed with Morgan and we discussed in with MK. And we discussed while we were doing agenda planning and things of that nature of the plan, they keep these two bills.

[Unidentified Committee Member]: It should stand alone, I think, because it's very unique. Mean, the other things I'll have their uniqueness too, this one's very,

[Rep. Matthew Birong, Chair]: I'm not an attorney, I'm not coming up with the here.

[Unidentified Committee Member]: Long term throw me a lifeline. Anyway, yeah, I just think it's, there's some things that need to stand alone, I think this is one of those because of the way the language is in it such, just my opinion. I

[Rep. Lisa Hango, Vice Chair]: can add a little bit to that. It's not just talking about governmental agencies, like some of the other pieces of the omnibus bill are. This is actually talking about a company, private company. So, it's probably better not to muddy up one big bill with extra pieces.

[Rep. Matthew Birong, Chair]: Any other conversation on this one? How does this happen? Oh,

[Adam Greshin, Commissioner of Finance & Management]: I'm sorry.

[Unidentified Committee Member]: More testimony. I just looked into the, the Tennessee bill's only been enacted for half of a year and some of the loopholes. I just want to make sure, sorry to keep harping on about this, but the part that I asked about on a veterans benefits matter, there is some concern that people are now masquerading as coaches and not saying that they're representatives and that's how they're skirting around this language. So I just want to make sure that if that language is directly pulled from Tennessee, that's one of the areas that they've said that they're having issues with. People are like, it says, advise, assist or consult. So they're not calling themselves consultants and they're not calling themselves advisors and they're not using the word assist. They're saying, we're coaching you, but they're doing the same stuff. So I just want to make sure that our language is super tight on that so that we're not running into the issues that Tennessee is running into right now.

[Rep. Matthew Birong, Chair]: I think that's very valid. That's good.

[Sophie Zdatny, Office of Legislative Counsel]: If we

[Joshua Diamond, Attorney (on behalf of Veterans Guardian)]: add some more words. I

[John Blumstrom, Veterans Guardian]: actually can. So we've been working with the Did

[Rep. Matthew Birong, Chair]: you just let me identify yourself?

[John Blumstrom, Veterans Guardian]: Oh, yes. I'm sorry. Would you like me to come back

[Robert Burke, Director, Vermont Office of Veterans Affairs]: and say,

[Rep. Matthew Birong, Chair]: let's share it? Yeah. My pleasure. Yeah.

[John Blumstrom, Veterans Guardian]: For the record, John Plumstrom, Chairman. So we've been working through our trade association, the National Association for Veterans Rights. As soon as states are passing these consumer protection laws, our trade association is working with the consumer protection divisions for each AG's office in said state. So North Carolina, Tennessee, South Dakota, Oklahoma, Florida. The first step we do is go to, the AG's office and very clearly help define what all of these, to your point, advise, assist, consult. And we help close any language loopholes so that somebody, you know, your point, can't say like, oh, I'm a, you know, I'm a coach. It's less about the title for for the the veteran than it is about the practice, and which is where the consumer protection guardrails come in. That's where we see the the real nefarious actors, where it's like charging in perpetuity. There's an actor out there that will essentially they'll if you decide to work with somebody else, there's a clause within their contract states that they still get paid even though they didn't do the work. That's legislated out here as part of disclosure language. And again, we are more than happy and willing to come to the table and help clearly define that. Our trade association is very stringent in terms of its certification process. The head of our trade association is a former VA chief of staff and acting secretary. So very aware of the practices that are predatory, did a lot of work with their OGC as well as the OIG at VA, But more importantly, has identified these practices and this is what we are trying to proactively legislate out. So that, again, to your point, there's no ambiguity in this and that we close the door. So the first thing, when it, you know, H103 passes, our first calls to be the AG Clark's office and their consumer protection division. And we will get hot on ensuring that any loopholes, which there really aren't any, but identifying those practices that may not be covered by statute.

[Rep. Lisa Hango, Vice Chair]: That covers that. Okay.

[Rep. Matthew Birong, Chair]: Yeah. That's a

[Unidentified Committee Member]: good question. Glad we didn't have to get players in the room.

[Rep. Matthew Birong, Chair]: Yeah. Absolutely.

[John Blumstrom, Veterans Guardian]: Don't tell me what's a good time to come back up to

[Rep. Matthew Birong, Chair]: We've touched Brad, Josh, as you know. Off the record.

[Joshua Diamond, Attorney (on behalf of Veterans Guardian)]: I've had conversations with Todd Palos about this legislation, but not had a sit down with the channel herself.

[Rep. Matthew Birong, Chair]: Okay, but the conversation was had with Todd. Okay. So they're aware. Are there opportunity to review the new language?

[Joshua Diamond, Attorney (on behalf of Veterans Guardian)]: I don't know if I've sent the most recent update. Certainly when we disclosure to your committee, there were efforts at language modifications back in December, leave a copy of that bill receptive time, but not the most recent.

[Unidentified Committee Member]: The blue line would be what had originally.

[Adam Greshin, Commissioner of Finance & Management]: And the last question.

[Rep. Matthew Birong, Chair]: Rep. So,

[Unidentified Committee Member]: we have them in? Just because they're going be charged with enforcement, think it makes sense to have people who are doing the work.

[Rep. Matthew Birong, Chair]: My head was on the same. That gives us, like I said, I didn't schedule it for Friday in case we didn't want to hear from other folks or have any changes while we had this conversation. Hearing from them, we'll put that on the standard report vote. Mr. Chair? Oh, I'm sorry. Yeah. Mr. Chair.

[Robert Burke, Director, Vermont Office of Veterans Affairs]: So, hey, it's Bob Berk. I'll submit it the speaker. So as John had explained and Rutland's concerns, I think the aggregating offenders are gonna come up with any sort of terminology that's not in a bill to try and skirt the requirements. So you can't come you you can't include every potential Scenario. Scenario Word. Word, synonym. People are always the bad players are always going to press the issues. So I think it's up to the attorney general's office to really understand the intent, which I think is fairly clear here, so that you can't say, I'm just a coach. I'm not advising. I'm not consulting. I think it's pretty clear from a legal standpoint that it's all inclusive by by reading.

[John Blumstrom, Veterans Guardian]: Mister chairman, if if I may, I was just gonna add to that. The other part of our engagement with the consumer protection divisions for the ED's office is identifying actors in the space that do not that aren't currently in compliance with H103 wear and mask.

[Rep. Matthew Birong, Chair]: Understood. What I want help you.

[Rep. Chea Waters Evans, Ranking Member]: I just had a question that I don't know who it's for. You know, if you have a financial advisor, they have to take like a series of tests and stuff to help people manage their money. There are, you know, certificates that you have to get. Does that apply in this case?

[Rep. Matthew Birong, Chair]: Please. Thank you.

[John Blumstrom, Veterans Guardian]: Thank you, Mr. Chairman. For the record, John Plumstrom. I want to be very clear. So, Mr. Burke was absolutely correct. And that's part of our disclosure saying that we are not accredited. However, I can only speak to our company. I can also speak with good authority with Mr. Holz's company. Part of our training standards are very rigorous. It's eighty hours of instruction by members of our staff that are formerly accredited VA, VSOs, or again, advisors who have done this. So while we may not be accredited, our training and education standards are pretty rigorous, as is our annual audit by the National Association for Veterans. So Peter O'Rourke, who comes in, he's the head of our trade association. He conducts an annual compliance audit, not only on process, but also on training and education, reviews the syllabus to ensure that while we may not be accredited, we're following the letter of the law for accreditation compliance and training is concerned. But it's really comparing apples to oranges. I mean, we're not accredited VSOs, but our personnel go through very similar training to what the VSOs do with a focus primarily on the initial disability claims. I think it's very important to articulate that VSOs run a myriad of functions to include initial disability claims. And Mr. Burke hit the nail on the head. They have to do aid and attendance, pension benefit, you know, death benefits, GI bill. I mean, there are so many other functions that the VSOs perform. We're of the mantra of do one thing and do it well, but do it well transparently. So again, ensuring the most up to date training standards are adhered to, again, under NAVER certification and oversight. And and I I think it's important to contextualize this too that at the federal level, we are working with congress on accreditation reform. And I know we all chuckle at that because it's congress. But, we're working on federal accreditation reform at the federal level so that, companies like ours can become accredited. So we're not sitting here saying we don't wanna become accredited. We're actually working at the federal level with congress to become accredited. So, again, we we've done, we've done this in other states. We'd have no problem, here if it were to come up saying that, you know, once accreditation reform is passed at the federal level, companies that are the operated space have become accredited. We'll be the first ones to raise our hand in pink.

[Rep. Michael Morgan, Member (bill sponsor)]: Thank you.

[Adam Greshin, Commissioner of Finance & Management]: Yes, ma'am.

[Rep. Matthew Birong, Chair]: Any other questions on this topic? Thank you, sir.

[Unidentified Committee Member]: We're more testimony. What's that? We're taking more testimony. I have more questions, but I don't think we have time just about like how they calculate their fees, whatnot, But in the weeds, that's still important.

[Rep. Matthew Birong, Chair]: I honestly, we still have five minutes here. Can do that now. Absolutely. Please, sir. Mr. Chairman, again, for

[John Blumstrom, Veterans Guardian]: the record, John Bloomstrom. So the there are a couple of of there's some background on on the fee structure. So the way that, our fees are modeled is basically after, so the federal, legislation of the Choice Act, which is HR 3132, mandates five times the monthly increase or $12,500, whichever is the lesser of the two. Our typical fee is in the realm of 2,500 to $3,500. Very rarely do we ever get up to that upper echelon. That that's just a I mean, I the it's basically just to align with federal federal law.

[Unidentified Committee Member]: And do you collect those fees before a VA decision is made?

[Rep. Matthew Birong, Chair]: No, ma'am. No.

[John Blumstrom, Veterans Guardian]: No. It's it is all and I I think the beauty of h one zero three is that it's also contingent upon the fee is only collected if it's contingent upon a successful outcome. So if the veteran just not to go too far down into the weeds, as you say, but if a veteran if a veteran receives, let's call it a six point, increase in their disability from eighty seven percent to ninety three percent, they're still being paid at the ninetieth percentile. We don't collect a fee on that because there's no change in the financials. And so I think it's very want to be very clear about that, stating that we, again, we will only charge, once a veteran has received a favorable, RDO.

[Rep. Matthew Birong, Chair]: Great Morgan.

[Unidentified Committee Member]: And I and I and John touched on it earlier, but just to drive home too, and again, we would have to some of this is in good faith, but in talking with his specific organization who he represents, that if somebody is in a financial stature position, that they, at the end, they look at him going, yeah, it's five times what I got, it's $5. Yeah. But he goes, know, that veteran says, me giving you $5, know, between me paying my mortgage for the year or something, then I have to take in good faith that they're going to try to work a less than that position, you're going to try to work at that dream. Want to hear you correctly on that.

[John Blumstrom, Veterans Guardian]: That is a great characterization and I want to be very clear. We will not put a veteran in a worse circumstance than when they came to work with us. We will also work with them on any payment plan. If it's a dollar a month, if it's $10 a month, if it's everything upfront after successful completion, we'll work with them on any payment plan. But we'll never put them in a worse off, situation. We just don't work that way. We also don't work with creditors or debt collectors. We don't have access to their financials. This is a completely voluntary bank.

[Rep. Matthew Birong, Chair]: Thank you. Anything further on this one? A little later? Okay. Thank you, sir. Thank you.

[Unidentified Committee Member]: Okay.

[Rep. Matthew Birong, Chair]: Shifting gears to budget letter. Thank you, counsel. So

[Rep. Michael Morgan, Member (bill sponsor)]: the

[Rep. Matthew Birong, Chair]: user. He wanted to hear from some folks about a couple of line items, and I see mister Gresham is here with us. How are doing, sir?

[Adam Greshin, Commissioner of Finance & Management]: Fine. Thank you.

[Rep. Matthew Birong, Chair]: We'll open up with

[Adam Greshin, Commissioner of Finance & Management]: Is that an invitation?

[Rep. Matthew Birong, Chair]: That is an invitation. You read the tone correctly, sir. Yes. Okay. You don't get to see all that often, didn't you? I think this

[Adam Greshin, Commissioner of Finance & Management]: is a first for me.

[Rep. Matthew Birong, Chair]: Welcome to the new dates.

[Rep. Michael Morgan, Member (bill sponsor)]: So Something else. Nothing else. Else.

[Rep. Matthew Birong, Chair]: Buting? Alright. Cool. That's interesting little technical flick up there. So, yeah, we are going over stuff for a budget memo. So we just wanted to reach out and just get a better understanding of, like, the nuance within the request. So thank you for joining us. And for the sake of time, the table is yours, sir.

[Adam Greshin, Commissioner of Finance & Management]: Thank you. Looking first to share. I think you have the budget presentation, for both the lieutenant governor and the governor's office. I thought I could put it up on the screen, but I'm not you're doing something wrong.

[Rep. Lisa Hango, Vice Chair]: Committee may not have it.

[Rep. Matthew Birong, Chair]: I it's on the page. Yeah. I have it up.

[Unidentified Committee Member]: Good. Which one are you looking at first?

[Adam Greshin, Commissioner of Finance & Management]: Let's go for the Lieutenant Governor's Office. If you go to the screen there, you see the, you know, what the goal of the office is, and it shows you the fund sources there. I would be working off of that. And I think the important thing to to cover with the lieutenant governor's office is, this is about a simple budget as it comes. Now there's, two FGBs, and there's an office, a very nice room down on the 1st Floor of the State House with an outer room, I think you're familiar with. So the funding for the lieutenant governor's office is basically the salaries of those two employees, the lieutenant governor and his, assistant, and the various benefits and the like, as well as fee for space for the office, and that's it. Unusually, the lieutenant governor's office or lieutenant governor's budget is down seven and a half percent from the prior year. I say unusually because that's very rare that we have budgets that that, are reduced from the year before. But as you'll see, if you go to the, attachment b, which is, I think, on the next page, I believe, you see an ups and downs. Nope. Do you see the ups and downs? It's a little Excel sheet. Right there. Yeah. So on that sheet, what you'll see is there are two items that's particular, are reduced. One is health insurance, which is down a cool 70% or $36,000, and retirement, which is another line item, which is down 29% or $15,000. That is entirely due to the choices made by the two people in that office. So there times when that goes up if they choose a more expensive health insurance operation, typically if they have a family plan versus a single plan. Or some people opt out. They go with their spouse. So that's, again, entirely essentially a roll of the dice. This year, it turned out to be favorable. So the down in, and retirement will, also vary depending on the choices they make. The exempt employees have the option of a defined contribution plan or defined benefit. Classified employees are defined benefit, employees have an option. And to the extent that they choose a a DC, defined contribution plan, that will be less expensive overall. So that's why you see savings with retirement. So the two of those downs were more than enough to cover, what's a little over 6% increase entirely in payroll, and some operational pressures, but the net was a little over 7%. Are there, instructions in that regard?

[Rep. Matthew Birong, Chair]: Seeing no hands. Alright.

[Adam Greshin, Commissioner of Finance & Management]: And then you also have a executive office presentation. This is a little more complicated, although I will say not really that much more complicated. The executive office is, the office that, includes the governor and his staff, And the executive office budget, is up about 5.3%, which is a combination of a 4.4% general fund increase and an 8.8% increase in I what we call IDT, interdepartment transfer. The net of that is a total of 5.3% up. The, fund mix now remember, the lieutenant governor was all general fund. The fund mix in the, governor's office is a little different. It's predominantly 78% general fund, but it's 22%, interdepartmental transfer, which is a fancy way of saying some departments are you know, he allocates out a portion of his, expenses to agencies and departments that he serves. So that's, makes about 22% of his total budget. So, again, the vast majority is general fund, 78%, 22% is interdepartment transfer. The total is 2,660,000.00 for the governor. This office, has 14 FTEs, 14, in total. That includes the governor, his chief of staff, the secretary of civil and military affairs, and legal counsel, as well as other people with lesser titles. In his budget, if you look at the, same ups and downs, spreadsheet, in his budget, there are small savings in health care, which, again, is entirely choice specific, you know, amongst his staff. There's a small health care savings, and they're also somewhat unusually is a small savings in ADS charges. You don't hear that very often. Generally, you hear the reverse. And this this is actually a little bit of a story, and that is that last year, the governor's office was overbudgeted for the SLA, the service level agreement. Those are bills that are sent out on demand, when, software is used or when services are used that are not typically used across state government, but specific to that department. But the budget for the service level agreement last year was set at $65,000, which was substantially higher than need be. So this year, we set it closer to actuals, which was about $20,000. So about a $45,000 savings in the service level agreement, which was enough to overcome a substantial increase in the ADS allocates and storage. So the net of it is a small savings to ADS charges, combined with a small savings in health care. The only thing I think is really unusual, to point out here is there's substantial increase in vacancy savings in the governor's budget. Vacancy savings are when we anticipate that not all positions will be filled rather than budget for them to be filled, we save that amount, and that shows up as so called vacancy turnover savings. Now the governor's office has 14 full time equivalents. There are currently 10 positions that are filled. And that was actually true last year, and the anticipation is it will be true next year too. So we're budgeting for 10 positions that we anticipate will be filled, and three to four vacancies in that budget. So that's why you'll see that vacancy savings, which were kind of under budgeted last year, this year are being budgeted at what we think is the actual close to the actual amount. So that with that increase as well as smaller savings in health care and ADS, you know, that was somewhat able to offset, other increases, standard salaries, standard operating costs. So I'm out of things to say unless, you folks, again, like I said, it's a fairly simple budget, but I'm happy to answer any questions you might have.

[Rep. Matthew Birong, Chair]: Questions? Yes. Representative Waters Evans.

[Rep. Chea Waters Evans, Ranking Member]: Hi, thanks. So I was just looking at how it says there was an increase in personal services of a total of $130,350

[Adam Greshin, Commissioner of Finance & Management]: Right.

[Rep. Chea Waters Evans, Ranking Member]: And I'm looking at the spreadsheet and even Does that count even with the decreases from the vacancy turnover? I just want you to explain to me what that $130,000

[John Blumstrom, Veterans Guardian]: was for.

[Adam Greshin, Commissioner of Finance & Management]: You're talking about the governor's budget?

[Rep. Lisa Hango, Vice Chair]: Yeah.

[Adam Greshin, Commissioner of Finance & Management]: That would be salaries. That would be typically payroll personal services.

[Rep. Chea Waters Evans, Ranking Member]: Okay. So out of the 10 people who are there, their salary increases totaled $130,350

[Adam Greshin, Commissioner of Finance & Management]: That would be the net increase. Yeah. I don't have that in front

[Rep. Matthew Birong, Chair]: of me, but that sounds about right. Okay. Any other questions for for Russian right now?

[Adam Greshin, Commissioner of Finance & Management]: Mister chair, I think you had requested some, words from, testimony from Douglas Farnall, our chief recovery officer. And he is, hopefully enjoying himself somewhere warm and pleasant, but he is on vacation this week. So I'm, the secretary of administration said that, since I'm somewhat familiar with what they're doing, and I could at least give you a few words. I think you had some questions regarding the, 07/10/2025 the July twenty five flood Yes. Came a year after the July 24 flood, which came a year after the July. There's something about July 10 that makes us all nervous. So, this was, somewhat unusual, and it it was, very targeted. And you'll recall, that the state had, as we had it passed, was applied for FEMA disaster declaration. We gave them a $1,800,000 estimate, which was well over what, the requirement is for FEMA assistance. And to our surprise, we were turned down. So we appealed the decision, and to our surprise again, we were turned down. So that is final. So, the $1,800,000, disaster estimate, that we filed with FEMA, typically, the way that works is right after a disaster, we reach out as quickly as possible. We go to the affected communities. We with Vermont Emergency Management, often with the agency of transportation because a lot of the damage or some

[Rep. Matthew Birong, Chair]: of the

[Adam Greshin, Commissioner of Finance & Management]: damage anyway is often roads and bridges and the like. And we make first kind of quick estimates. That was the $1,800,000. After the declaration is declared, part of FEMA, they will send their experts who will work with our experts, will have a lot of boots on the ground, and we'll fine tune those estimates. That is what's going on now absent the FEMA folks, but AOT and emergency management are in these communities. And their most recent estimates of damage from the floods are $2,900,000. There are, five communities affected, East Haven, Sutton, Newark, Burke, and Sheffield. By far, Sutton is the most affected of that 2,900,000.0. I think over $2,000,000 is Sutton alone. And these are, traditional you good to say that term, but traditional damages. You have bridges, you have culverts, roads, pavement, and the like. So of that 2,900,000.0 in estimates, a little under 1,000,000 as of, I think, last week was spent by the towns, in part because many communities don't have the luxury of just waiting around for a check to arrive. I mean, if these are important components of the town infrastructure, they need to repair them first, and they worry about how they're going to pay for it later. So that's what's happening. It's been a little under $1,000,000 already spent. AOT, the agency of transportation and Vermont emergency management are working with the, affected towns to fine tune estimates. Again, the current estimate's about $2,900,000, and they're also working with the recovery office to develop a plan for assistance. And the plan is to put recovery needs and potential language, if it requires language, into the fiscal twenty seven budget. So our intention is to feature in the '27 budget. It doesn't currently because when we submitted the governor's proposed budget, we were under the impression that this would be declared a disaster. So how we provide relief and how much relief to provide, I think there are questions this committee will be very interested in. I can assure you why I'm very interested in that too, and that that's an active discussion. That is where it stands. I believe by the time the budget leaves the house and heads to the senate, it will have it in there, or we will propose to have it in there, some relief for the communities.

[Rep. Matthew Birong, Chair]: Representative Hango.

[Rep. Lisa Hango, Vice Chair]: Thank you. Since we're also working on a bill that has to do with emergency management and disaster relief and working on our budget, how do we make a recommendation not knowing what you all can ask for in the budget?

[Adam Greshin, Commissioner of Finance & Management]: I have no good way of answering that. What I will tell you, again, I just keep in mind for context, I'm the the finance guy. So I think about it in terms of digits, and I think the the closest estimate now is for total, 2,900,000.0. However, you know, whether a 100% of that is covered or 50% of that under active discussion. So I think, again, I would maybe provide an estimate for the house appropriations committee just so they have a heads up. They may decide we don't know enough. We'll kick it to the senate. I mean, that they sometimes do that, but I wouldn't provide an estimate. In terms of language, it may be that, you know, we have a nonfederal disaster mitigation fund. It may be that that will require some language if we decide to use that vehicle. There's an emergency relief and financial assistance fund, ERAP. If that vehicle is used, that will require language. And how the relief is sent out to communities? Is it a granting program? Is it just straight appropriation? We we don't know. So that will require language. And, again, all of what we hope is all of this we will have for you in a nice, neat package with a bow wrapped on it.

[Rep. Lisa Hango, Vice Chair]: Appreciate that. So you, giving us the estimate from AOT and VEM because until two minutes ago, my estimate in my head was $1,800,000 So, appreciate you flag that.

[Rep. Matthew Birong, Chair]: Thank you for those details, Commissioner. I think I got what I personally needed. Any questions for Mr. Rushing?

[Rep. Lisa Hango, Vice Chair]: Thank

[Rep. Matthew Birong, Chair]: you so much for the time, sir, and helping us.

[Adam Greshin, Commissioner of Finance & Management]: Thank you for inviting me.

[Rep. Matthew Birong, Chair]: Yeah, pleasure. Appreciate it. And we are going to discuss the budget letter from the Secretary of State's office once the Secretary comes back in. Speaking more to the project at hand with a memo, the goal today is that we complete this project and the recommendations, and then be able to submit this to his convolutions today for them. So, that's why we carved out as much time as we did for this project for the remainder of the working day. So that's the that's the end game, at least as far as the project in front of us. And, yes, we'll just kinda hold for a second. We can wait for the secretary to come back. So

[Rep. Lisa Hango, Vice Chair]: Any thoughts on just taking a position right now on what we just heard for the governor and the lieutenant governor's office so we can check some boxes while we're waiting?

[Rep. Matthew Birong, Chair]: That just knowing that the secretary comes in, that will Yep. A spot for shelter. So I guess we could start off with what was spoken to first, the lieutenant governor's budget. Okay, cost down 7.5%. Take no issue with that. Does anybody have any conversation? Yeah. Okay. So, I guess I'll ask for thumbs on that one favorable.

[Robert Burke, Director, Vermont Office of Veterans Affairs]: Favorable thumbs on the leg of. And

[Rep. Matthew Birong, Chair]: then questions on the governor's office budget that was proposed. Favorable. You don't have to get it. It's the plurality of favorable.

[Rep. Lisa Hango, Vice Chair]: It's not like the race. And

[Rep. Matthew Birong, Chair]: It's just a plurality. Plurality struggle. Alright. Madam secretary, how are you? Yes. Absolutely. Thank you so much for finding the time. You.

[Rep. Lisa Hango, Vice Chair]: Plenty of time, just can't figure out where to be at any moment. Circle book Yeah. This And we're your favorite. Of course, always.

[Rep. Matthew Birong, Chair]: Check out.

[Sarah Copeland Hanzas, Secretary of State]: Heart resides here in

[Rep. Michael Morgan, Member (bill sponsor)]: HGL. And

[Rep. Matthew Birong, Chair]: so, just to run through this, we received this on Friday, so we just wanted to speak to your office real quickly as we're wrapping up our budget memo process. So I know you have places to be, so the table is first.

[Sarah Copeland Hanzas, Secretary of State]: I will fly right through this and then take any questions that you might have. I'm Sarah Copeland Hansis, your Secretary of State. There is one change to our initial budget ask that is contained within the letter that you have in front of you. So I will just reiterate that we are asking for the typical $450,000 in support from the general assembly for the conduct of elections. We had initially thought that we also needed to ask you to help backfill some of the missing federal revenue. We typically get around $1,000,000 a year in federal revenue. Last year, was $272,000 So we initially asked if the legislature could help us backfill that. However, good news, happy news. We are about midway through the annual report, season in our business services division, which is the division that, brings in the revenue that the Secretary of State's office runs its elections division and other divisions on. Those revenues are coming in just as strong as they did last year. So knocking on wood if I mean, I'm assuming that the same pace of business filings will continue through the end of this first quarter, in which case we feel confident that we can say we do not need that extra $650,000 that we had asked for in our initial budget ask when we testified to appropriations on February 5. Contained also within our budget ask and within this letter that you have in front of you is the Democracy Media grants. These are grants for the Vermont Access Network, the Community Radio Network, and local journalism. I'm happy to talk in more detail about those programs if you'd like to, but I understand you have a time crunch on finishing up your budget memo, but the Secretary of State's Office does strongly support those grants to help keep our local media infrastructure strong and vibrant in this state. There are a couple of provisions at the end of this letter that don't have a fiscal impact, but that we want the appropriations committee to be made aware of. You created for us a limited service position in 2025. That was to double the size of our municipal services division. We help Vermonters across the state and municipal governments across the state understand how to comply with state law. And we do a fair number of trainings on open meeting law for boards around the state. And so that extra position that you made for us last year, we would like to have that made permanent. We believe that we have the revenue within our Secretary of State funds to cover that. Then we're asking for two full time positions, two new positions. One position at VESARA, a full time position within State Archives and Records Administration. Again, no fiscal ask. We need an extra records and information management specialist to focus on implementing records management for state agencies and departments. And we would also ask for another position in our business services division. This division is a small but mighty division that has a touch point on every single business and nonprofit in the state. And the workload that they bear, particularly during this first quarter of the year, but really throughout the year, is really tremendous. And we feel that we need another position within that division to help manage that workload. And then finally, at the end of the letter, we talk about the creation of a capital IT fund. I know that I've talked about this in front of your energy and digital infrastructure committee. I'm not sure if we've talked about this in front of your committee. But increasingly, the IT systems that we use in the Secretary of State's office and indeed across state government are really the access point, the front door, if you will, where Vermonters can go to get those government services. We want that to be a smooth and seamless process. We want there to be no barrier to people being able to do, whether it's renewing their business registration or getting their nursing license. But these are big and expensive projects. And when I became secretary, we had four existing IT systems that needed to be replaced. That was a really big budget hit across only two budget years. And I think it is, in the best interest of our office and Vermonters that we start putting away a little money each year so that we have a capital fund reserve fund set up so that if we get five or ten years down the road when these systems need to be replaced and we're having a tough budget year, we don't want the quality of service that Vermonters expect, to suffer because we hadn't planned ahead. We know that there's a life cycle for IT systems, and we know that if we can put a little bit aside now, it will lessen the sticker shock when we need to replace these systems in five or ten years, and it feels the fiscally prudent thing to do. So that's the last of the items in our letter that was sent to the committee on Friday, and I'm happy to take questions.

[Rep. Lisa Hango, Vice Chair]: Rebecca? Just for clarification, because I was having trouble keeping up because I've got two different spreadsheets plus the letter. I'm sorry, was talking No, it's fine. Full time position within the business services division, is there a fiscal ask? No. Okay. And same thing with the Visara one? That is correct. In your ask for the, I just want to make sure I'm not helping, the 1,800,000 for the van and then the 90 for the radio don't we already have that on our spreadsheet we do just trying to find what page it's on the second page yeah it is within the Secretary of State's office. So yes, I just want to make sure it wasn't an additional 1.8 and another 90. But just no.

[Rep. Chea Waters Evans, Ranking Member]: They came

[Rep. Lisa Hango, Vice Chair]: to us separately, and the 1.89 contains the 90. And then one other question I have That's fine. I guess whatever it was, it's gone. So, it's okay. And just to be clear, your ask is $450,000 plus $50,000 for the local civic journalism awards and not taking into account the ban request, because we have that as a separate line item. So 500,000, is that

[Sarah Copeland Hanzas, Secretary of State]: I am not sure how your spreadsheets are organized, and so that's why we wanted to put all of the things that our office supports into one memo. So the fiscal impacts are the 450,000 for elections, 1.8 for van, 90,000 for community radio, and 50,000 for

[Rep. Lisa Hango, Vice Chair]: the local journalism grants. So that's where my confusion is, because you just broke out the 90,000 separate from the 1.89. And for whatever reason, I thought the 90,000 was included in the 1.89.

[Sarah Copeland Hanzas, Secretary of State]: I don't have access to the document.

[Rep. Lisa Hango, Vice Chair]: So it is a separate Community Radio ninety thousand is separate from the one point eight nine?

[Rep. Matthew Birong, Chair]: Yes. It's it.

[Rep. Lisa Hango, Vice Chair]: We have a $1,890,000 ask,

[Unidentified Committee Member]: and we have a $500,000

[Rep. Lisa Hango, Vice Chair]: ask. Yes. Okay. That's all we need. Thank you very much.

[Rep. Matthew Birong, Chair]: Anything else from the Secretary? Thank you so much.

[Sarah Copeland Hanzas, Secretary of State]: Pleasure to be with you this afternoon.

[Rep. Matthew Birong, Chair]: Yes. And I want to call for a break till 02:30, and then we'll come back then to pick this up. I need to go make a phone call on another bill. So Nick, take us off till