Vermont Legislature SmartTranscripts:

[Rep. Emilie Kornheiser (Chair)]: Here we are at the masons. I hope everyone had a good lunch and floor and all the things. Thank you for your fantastic floor part of the school. It's still April '5. We are working on S327, activating to economic development. Rick, if you want to come on up and take us through the bill. I'm leaving at 02:45 to go talk to Senate Ed and Senate Finance about 09:45, but you all will continue working through this, and we can find a time tomorrow to take a vote.

[Greg Sable (Office of Legislative Counsel)]: All right. Good afternoon.

[Rep. Emilie Kornheiser (Chair)]: Good afternoon.

[Greg Sable (Office of Legislative Counsel)]: Greg Sable with the Office of Legislative Council. Karen, do you like screen share or not? I love it. You love it. Okay, then let me adjust accordingly here. So, we're looking at S-three 27. That is an act related to economic development. There it is. It was referred to House Commerce, which has reported a strike all amendment that you have on the screen, hopefully in your committee page. The first few sections were deleted through the Senate action, not through the House. So sections one through six were appropriations allocations at appropriations, Senate appropriations took out and House Commerce did not put back in. So I don't think we need to go over those if they're deleted, so I'll skip over to section seven. Section seven is a study that will be committed or conducted by the Department of Economic Development for Business Resources and Growth. This was going to be a task force, but the commissioner told the Senate Committee that they would do it, so they're going to do it. And they have a few tasks that they're going to conduct on behalf of the general assembly, mostly creating an inventory of resources for businesses to grow access capital, those kinds of things. The report is due on or before 12/15/2026 to House Commerce and Senate Economic Development. Section eight, last year the General Assembly passed into law the Convention Center Task Force. This bill amends that task force in a couple of ways. It adds one member to the membership and that is the president of UBM or their designee. So there'll be eight people instead of seven. It extends the deadline for the final report to December instead of November of this year, 12/01/2026. It pushes back their existence from 12/01/2026 to 07/01/2027, in case there are questions next session for the group to address about their final report. And they will be allowed to meet more than six times. Currently they're maxed out at six, and I believe they've already met those six meetings. So striking through this part of the law will be more than six times. They can meet a thousand times if they wanted to. However, they really love convention center discussion. However, for reimbursement purposes, the current language limits it to six meetings for reimbursement. This would be updated to 14 for both legislators and non legislators. I think Pat Sitterton is going to come when he's out of appropriations to I believe his testimony will be that they have not requested any of reimbursement from this task force, even though they've met six times. So, we will provide that testimony in case you care. Okay, section nine is something you may care about. So the Senate Committee and the Senate and the House Commerce Committee decided to repeal the perspective repeal of Veggie. So you can see this area of law has been amended several times since 2016 to where you keep pushing back the sunset. The most recent sunset is January 1 of this coming year, 2027, I guess this next year. The bill here would strike through the repeal of the repeal, which means if you like this language, that you would live on indefinitely. So, that's the current bill. Section 10A is a note.

[Rep. Emilie Kornheiser (Chair)]: Come back to Veggie everyone.

[Greg Sable (Office of Legislative Counsel)]: Yeah, was waiting for a chromatic. Section 10A is the Culinary and Hospitality Study. Is a it initially was going be specific to a culinary institute from the Senate side. House Commerce has kind of opened it up a little bit more to be culinary and hospitality education. So the Department of Labor will conduct this study to determine educational opportunities for these areas, if there's something that the state can do to increase the availability of post secondary education in culinary arts and hospitality. Also fun. So they will work with the Chamber of Commerce, which you can't force the chamber to do anything, and I told the committee that they're not a state entity. So, however, they would be in collaboration with the Department of Labor in this study. The stakeholders involve a lot of stakeholders, just various entities, state and non state entities that will help determine how it's going be conducted, these educational opportunities. The report is due on or before 12/01/2026 to House Commerce and Senate Economic Development. Not to be confused, section 10b is the hospitality and culinary apprenticeship pilot. So, this is something that House Commerce added because the Department of Labor also suggested that there be a more focused book, whatever you want to call it, into apprenticeship and how that could possibly help culinary and hospitality workforce development in the state. So the Department of Labor, through their registered apprenticeship program, shall establish and maintain a two year hospitality and culinary apprenticeship pilot. So they would set it up, they would develop any potential connections with employers that might want to serve this need in the state. They will work with the Department of Tourism and Marketing, Department of Economic Development, and a few others. There are details on page 10 about the pilot. Can reserve those plain English. One thing I do want to highlight for you all on page 11, subsection C funding, the department, meaning labor, shall implement the pilot using existing state and federal funds to the extent practical and may seek additional grants or funding as such funds become available. I think that's pretty squishy, that's not really requiring additional funds, but just that they may seek additional funding if it becomes available. A report is due on or before interim on or before December 15 and a final report on or before 12/15/2028. So again, it's a two pilot. Section 11 was a Route 22A study determining how to potentially expand on Route 22A from Burlington to New York that was struck after house transportation took testimony. It was going to be very expensive, not the study but the goal. I think b billion was mostly b billion. Okay, so section 12A, I'll explain this one. So in 2023, the legislature put into the budget this Rural Industries Development Grant Program and they funded it, I think at $5,000,000 House Commerce decided to make some changes to it and because of that, I had the genius idea of putting it into statute. It was hard to find, so if I had trouble finding it, I think people who want the grant money are gonna have a hard time finding it. So I've struck the session law in the budget in 2023, so this is all just repealed. I'll scroll down to the bottom. Okay, so that's appealed, however, it comes back in Title X, which is our conservation and development title, where we put our economic development stuff. And now we put it, same name, into statute. There are a couple of changes. So, it's not just a copy and paste, it mostly is a copy and paste with the changes that House Commerce made. Starting on page 15, subdivision three, this is new. So there was a request to give certain types of properties a beneficial grant amount and these would be properties deemed as federally impacted. And I'll explain what that means here in second. I mean, you can see the definition. I'll explain the additional grant funding here in a second. But these properties must be owned by The US or by any federal agency or a federal instrumentality or under the custody or control of a federally appointed receiver through bankruptcy, trustee or conservator, and includes property subject to federal court jurisdiction.

[Rep. James Masland (Member)]: So that's new.

[Greg Sable (Office of Legislative Counsel)]: This is all the same, the grant considerations that this is ACCD by the way, that ACCD shall consider these various things. Again, this is already in law. This is also in law, section C, eligible applicants. D, eligible activities, adding in the industrial, commercial, federally impacted property, so expanding upon how this grant money can be used. And when this was done, I asked the committee, do you want to change the name of the grant because rural industry development grant program to me does not mean necessarily residential. However, if you read the statute, it's in there that it can be any of these industrial, commercial, or if it's a federally impacted property, residential.

[Rep. Emilie Kornheiser (Chair)]: Is this in the budget?

[Greg Sable (Office of Legislative Counsel)]: It was in 2023. So there's no new appropriation. There's money left over, I believe 2,500,000 is my understanding that's sitting there.

[Rep. Charles Kimbell (Ranking Member)]: Without making it part of Title X, it goes away or what's the

[Greg Sable (Office of Legislative Counsel)]: That's just me. I think it should have been put in the Title X. It's hard to find and I think if it's a grant program that you want to put in the statute, it made sense to me to move it. You guys can disagree, but I might fight back a little bit and say, I think this is to be something that people should be able to find and read and see what they're eligible for. On page 17, again, current law, this is the eligible activities, nothing new here except at the very bottom adding again federally impacted property. That's kind of the main crux of this change. Application process is the same. How you submit the following information, no change to that. Okay, subsection F is where the substantial changes are. So, currently, the award is either the lesser 1,000,000 or 20% of the total project cost, that's within the budget, million or 20%. So, this would increase it to, it would still be a million or 50%. So it's the lesser of those two. So if your project cost is $1,000,000 your award would be $500,000 because that would be 50% of the total project cost. If your total project cost was $10,000,000 then your award would be $1,000,000 because did my math right?

[Rep. Emilie Kornheiser (Chair)]: Yes. How does this relate to the land bank that ACCD is working on?

[Patrick Higley (Joint Fiscal Office)]: Don't know if it does.

[Greg Sable (Office of Legislative Counsel)]: Through my work I didn't make that connection. Can I get back to you on that?

[Rep. Emilie Kornheiser (Chair)]: AmBank? Yeah. It's in somewhere in ACCD. I think I did DHCD, maybe in the CD part of DHCD. Then ACCD. You're just making it funnier? Uh-huh. And there's people who there's someone who's full time job that has to work on that, I think. They came here. Their name is in the street right now. And it's because we told them to do it in statute at some point, probably session long, but I'm not sure. Does that summarize everyone's? Okay.

[Greg Sable (Office of Legislative Counsel)]: And also I'm not hating on trying to put those

[Rep. Emilie Kornheiser (Chair)]: names somewhere in for a computer.

[Greg Sable (Office of Legislative Counsel)]: And I don't want to hate on session law, by the way. I feel like I'm hating on session law.

[Rep. Emilie Kornheiser (Chair)]: I didn't at all think you were hitting on session law.

[Greg Sable (Office of Legislative Counsel)]: Didn't notice it. Totally great. Great time for the budget and came into a fight. So in this case, it makes sense. It's ready. Okay, so again, it's going from 20% to 50% And these are also brand new. So an award may exceed 1,000,000, but Sean and I exceed 2,000,000 if the property is classified as a federally impacted property and the secretary certifies that the project is located in Definitely a designated downtown development district, that's required. And then one of the other two, and a reef zone, which is a rural economic area partnership program or a federally declared natural disaster area, right, a declaration was made not more than five years from the application date. So, it's got to be in a designated downtown district and then one of those other two to get that higher award. And it's up to the secretary to make that determination.

[Rep. Emilie Kornheiser (Chair)]: This all sounds great. Two

[Greg Sable (Office of Legislative Counsel)]: and three are the same. Okay, G is new. So, because I'm making my life harder by doing this, there is a request also from the House Committee that if you had gotten a previous grant, that session law in the budget says that if you then sell the land or sell the property, any profit goes back to the state, kind like a revolving. They didn't use that phrase, but it was set up as a revolving loan fund, even though it's called a grant. Problematic, But that's the way it worked. So in this case, there have been four of these grants issued to my knowledge.

[Rep. Emilie Kornheiser (Chair)]: Did you call David Hall to complain about things the deeper you arrived?

[Greg Sable (Office of Legislative Counsel)]: No, I didn't. I would never complain to him. But you're right, he used to blame things.

[Rep. Emilie Kornheiser (Chair)]: I would call him in.

[Greg Sable (Office of Legislative Counsel)]: You should, yeah.

[Rep. Emilie Kornheiser (Chair)]: I think the chair should

[Rep. Charles Kimbell (Ranking Member)]: call him.

[Rep. Emilie Kornheiser (Chair)]: I'm not going to, but this is fine. Okay.

[Greg Sable (Office of Legislative Counsel)]: So that current law, session law, and the budget says that if you sell the property, any profit you make must go back to the state, into that grant fund, which actually also the fund was not created, Not a problem with this area. Okay, there

[Rep. Emilie Kornheiser (Chair)]: is no fund? Well, it

[Greg Sable (Office of Legislative Counsel)]: didn't say in the law that a fund was so I added that. I'll show you.

[Rep. Emilie Kornheiser (Chair)]: It's okay to not make special funds sometimes. I just go in and out.

[Greg Sable (Office of Legislative Counsel)]: No, all I did was this.

[Rep. Emilie Kornheiser (Chair)]: I didn't make a special for that.

[Greg Sable (Office of Legislative Counsel)]: It was just never called out as a bond. We can find it to call itself instead of just money laying around. Okay, back to my stumbling of this section. The session law says, I said it already, that if you must get the money back, house commerce did not like that and the bill now says that if you have that deed restriction, that you must return the state of principal or percentage of your profit is void. So, those four awards that have been distributed, if they do have that deed restriction from the grant, that would be void. It would not be in solicitable. H is also new. I want to make it clear, and I have a suggested amendment for this by the way, because this was done yesterday in committee, I'm typing it as I talk about it, is that there was a request that if a person who had been previously awarded a grant wants to retroactively get that 50% instead of 20%, So, this would allow that to happen. So, the person that gets the award and let's say their project cost is a million dollars, so they get 200,000, 20%. This would allow them to get $500,000 but then subdivision two says they can't get an increased award. So, I have a suggestion to clean this up because there was a misunderstanding as to what the intent was of this request. If there's gonna be an amendment, have a suggestion to fix this and the fix would be to not have this section, subsection.

[Rep. Charles Kimbell (Ranking Member)]: At all, H?

[Greg Sable (Office of Legislative Counsel)]: Yeah, unless you Yeah, it's up to you all, but I think the committee was confused and I was confused about what they wanted. They thought the way that it worked was not the way it actually works, this fund. Something about getting reimbursed for expenses. Okay, any questions about that very clear walkthrough of the grant program? Okay.

[Rep. Emilie Kornheiser (Chair)]: Yes.

[Rep. James Masland (Member)]: I have two questions. One, maybe for downfall or something. Yeah. But the culinary apprentice pilot, over the years that I've been here, from time to time, there have been discussions of apprenticeships and pilots. Were you aware maybe I need to answer the committee where it came from if if they're tagging on something that been tried in the past or if this was something that they came up with through working through the bill. And if you don't know the answer, I'll ask.

[Greg Sable (Office of Legislative Counsel)]: Well, we have the reporter of the bill, representative Duke here, that may be able

[Rep. Emilie Kornheiser (Chair)]: to help with that. Sure. For the record, I'm gonna give the representative for our own. So this is the Department of Labor is interested in doing a pilot for a registered apprenticeship. It is built based on the registered apprenticeship model that they use for other professions, but they have not had a registered apprenticeship for pulmonary So the idea is that they want to stay at home in a location.

[Rep. James Masland (Member)]: That's very helpful. Thank you. And then on the industry development grant program, I'm not sure. So, the funds come out of somebody else's, well, it's grant, I guess you'd say, but they've passed the run through RDCs and then through their their boss, which is that program that I'm just trying to learn more about it, and maybe I shall I should ask ask caveat side of room or something so I can understand more about it. I think it's a it's a good idea, but I'd be more comfortable if I understood more about how it's working.

[Greg Sable (Office of Legislative Counsel)]: It is true. You have to be a local development corporation. You have to be incorporated as one of those entities. Yeah. The money's already been appropriated and at some point there might be more money that's appropriated, but there was 5,000,000 in 2023. To my knowledge, there's still 2,500,000 left over in that pot that's just kind of sitting there. So House Commerce is hoping that this would incur more of use of that money.

[Rep. James Masland (Member)]: Okay, excellent explanation, thank you very much. Okay,

[Greg Sable (Office of Legislative Counsel)]: I will continue then on to section 13A, which again, if the committee will consider an amendment, I have a proposed amendment here, just a typo. This is a nickel rounding provision that was in a different bill. They got put into this bill. My suggestion is the purpose statement, it's not the purpose of the act, it's the purpose of section 13B. Didn't have time to correct that, but yeah, so it should be a typographical correction if you didn't obtain that. So the purpose is to authorize a rounded and behind transactions to nearest 5¢ where 1¢ coins are unavailable or aren't practical. So I want to believe that this is not my bill. I'll say that again on the next one. This was Cameron Wood, however, I think it's pretty simple and I can explain what's going on here. It is optional. So, we have definitions that are important. Cash means coins or paper currency. Cash transaction means the sale of goods or services where payment is made entirely of personal cash. Rounding means adjusting the final total amount due after taxes and fees to the nearest $05 increment. A person or business engaged in cash transaction may round the final amount due to the nearest $05 as follows. If it's $1.02, 6, or $07 final digit, it's rounded down to the nearest visible amount by five. If the final digit of the amount due is $3.04, 8¢, or 9¢ rounded up to the nearest amount visible by five. I believe that's intended to avoid a business always having it on the high end or low end, to always have a round up or round down. That's I believe the intent of that, right, if you might be able to clarify that. If a person or business rounds a cash transaction under the section, any cash refund of the amount paid shall be issued to the purchaser and the exact amount initially paid for the goods or service. Exclusions, this section shall not apply to electronic and other non cash payments, payment of wages, rebates or cash disbursements, and transactions governed by federal rules that prohibits rounding. Rounding under this section shall not constitute an unlawful price increase surcharge unfair or deceptive act in commerce or discrimination. Okay, I would have another amendment for subsection E just to kind of make a couple of fixes here. On or before 07/01/2026, this is your notice requirements. The Commissioner of Liquor and Lottery shall prepare and provide individuals and businesses with a model notice pursuant to the sections that, at minimum, include a reference to the Vermont Consumer Assistance Program. The notice provided by the commissioner shall be available for free. My suggestion for this

[Rep. Charles Kimbell (Ranking Member)]: is That's to specific. It's just the commissioner of liquor and lottery about the rounding. Okay? Yeah, it's not but for any businesses that have cash transactions. Right, I can't tell you why that

[Greg Sable (Office of Legislative Counsel)]: entity was chosen. Assume there's a reason, but do you recall?

[Rep. Emilie Kornheiser (Chair)]: Why the print lobby would do the ws? Yes. Think they not sure. Not sure why it was done.

[Greg Sable (Office of Legislative Counsel)]: So my recommendation would be, and again this was kind of done at the last second, it's my mistake removing this phrase at minimum. So instead it would see with a model notice pertaining to the section that also shall include a reference to the Vermont Consumer Assistance Program. Ed, you can maybe see what you think when I draft it. Second instance here and also another proposed amendment that you'll take it. Number two, a person or business rounding transactions under the section shall post the model notice developed pursuant to subdivision one of the subsection. There was language in there that said that the business must post it in a visible place. I'll read it to you. Developed pursuant to subdivision one of the subsection in a clear and conspicuous manner at the point of sale or at the entrance of the business. That was in the bill. It was mistakenly removed when we were shuffling things around. So I can show that to you all tomorrow and you can decide what you think about that. Number three, no change here, no recommended change. The Secretary of Agriculture, Food and Markets may issue a penalty for the failure to provide notice required under the subsection of the with six VSA six eighty seven. Taxes and fees. All taxes and fees shall be calculated and remitted based on the pre rounding amount.

[Rep. Charles Kimbell (Ranking Member)]: We've two different agencies in there, Water and Agriculture Food Market.

[Greg Sable (Office of Legislative Counsel)]: Okay, next we have the C PACE program, which also was not originally my bill, but it got put in, so now I have ownership of it. It is S-one 138 if you want to follow the history of S-one 138. It passed the Senate and I think it went to House Energy and Digital Infrastructure and then House Commerce put it into the Economic Development Bill. So this is, CPA stands for commercial property assessed clean energy. It is a somewhat of a nationwide program, various states have it. Vermont has a residential program that is very similar to the commercial program, but this obviously would allow a legislative body to enact a commercial property assessed clean energy program. So, it's pretty straightforward as far as the legislative body must first approve of this ability to issue these, I guess I'll call them, I don't call them a loan, but it's a way of financing a project. So once that vote has happened, the municipality gets approved, the municipality shall allow for the imposition of a special assessment to secure private financing for property owners of commercial or industrial buildings within the boundaries of the municipality for renewable energy projects. Commercial or industrial building means any building other than a residential dwelling with fewer than five units. A district means a commercial property, assessed clean energy district, which includes the entire municipality. Resilience means the ability of interconnected ecological, social, physical, and economic systems to anticipate, adapt, withstand, respond, and thrive in the face of current and future conditions and disasters. Water conservation improvement means measures, equipment, or devices that decrease the consumption of or demand for water, address state drinking water, or eliminate lead from water use for breeding or cooking. So, the vote allowing these types of agreements to be enacted, there is an analysis performed subsection B, which must take after 01/01/2020 So you have about six months before these can actually go into effect, these agreements. A property owner shall have analysis performed that includes the following components. And so you have various things that the property owner must do in order to request the special assessment. You can read these, I'll find it to bring it to you word for word. The agreement shall provide that the length of time allowed for the property owner to repay the assessment shall not exceed the life expectancy of the impedance. In instances where multiple improvements have been installed, the length of time shall not exceed the average lifetime of all improvements weighted by cost. This subdivision is fairly important here. Notwithstanding any other provisional law, a lien under this section is a first and prior lien on the property, so not the person's property, supported only to a lien for property taxes from the date on which the notice of special assessment is recorded until the assessment interest or penalties paid and runs the land and that portion of the assessment under the assessment contract that is not yet due shall not be accelerated or extinguished by foreclosure of a property tax lien or any other So, if there is a foreclosure in Submission B, payments, still must be made, it's not going to go away. The special assessment lien is not going to be removed just because of a foreclosure. It must be paid for the time of transfer.

[Rep. Emilie Kornheiser (Chair)]: Can I ask a question? What page are you talking about?

[Greg Sable (Office of Legislative Counsel)]: I am on page 25. I'm sorry.

[Rep. Emilie Kornheiser (Chair)]: That's where I thought you were. I am completely lost. Could you start, where does the section begin?

[Greg Sable (Office of Legislative Counsel)]: So the C PACE there are six or seven sections, it's all 14. On page 22 is where it starts, 14a.

[Rep. Emilie Kornheiser (Chair)]: Commercial property assessed clean energy districts. Right. What does this section do?

[Greg Sable (Office of Legislative Counsel)]: It allows a municipality to enter to allow commercial property owners in that municipality to finance certain clean energy projects using this construct that is in statute.

[Rep. Emilie Kornheiser (Chair)]: Okay, the municipality needs to approve that? Yes. Does a bank need to approve it? Where does the money come from?

[Greg Sable (Office of Legislative Counsel)]: It comes from a lender, and I don't know how that is arranged. Again, I don't have experience with this bill. However, maybe as we read it, we'll find out exactly how that is. Yeah.

[Rep. Emilie Kornheiser (Chair)]: Sure. I can jump in quickly. The basic idea is that it's a financing tool for a business to take out a longer term loan or a clean energy project or a resiliency project. And then the mechanism is municipality based, creates a special district. The business borrows money from a bank. There's also an administrator, which could be the municipality or another administrator, that connects the loan payment to the property tax. So when the business pays the property tax, part of that is the loan payment for the split energy project and they're able to finance the project for a longer period of time, say twenty years instead of five years, and the loan is connected to the property. So if they sell the property, the loan goes with the property. That makes sense? So it's a funding mechanism for a longer term loan and this is why on the economic development side we were interested in this, it allows the business to finance something that will have a very long term return on investment, but commercial loan products, you couldn't do a twenty year month. These loans are typically for twenty years? It depends on the project, the size of the project. The important parts are that it's connected to the property tax payment mechanism and it's a first lien. So is, and this is in the bill, it's very important that the banks all have consent to this. It is a Is this one of those where this property tax gets diverted? What does the property tax have to do with it? It's just that when they pay, when you pay the property tax, you're also paying an increased amount to go towards this loan And then the administrator sends that money to the loan, but it does not convert anything from property tax. And it doesn't impact property tax. It is just a mechanism to tie the loan to the property so that that loan can go, so the property is securing the loan for the life of the loan.

[Rep. Charles Kimbell (Ranking Member)]: Which show up in the property tax bill that that property receives.

[Rep. Emilie Kornheiser (Chair)]: That's right, and show up in the property tax bill. So this property tax bill would be property tax plus the loan payment. And then the property member pays it, and then the loan payment goes to the lender, and the property tax payment stays with

[Greg Sable (Office of Legislative Counsel)]: the tax. Representative

[Rep. James Masland (Member)]: Holcombe, do still have a question?

[Rep. Emilie Kornheiser (Chair)]: Yeah, actually, I'm curious about this because I think one of the challenges of some clean energy technologies is the delivery of development is so flat that often about the light side isn't a long life cycle. And many of these So energy so house energy did it. And so the important piece is that the lender and administrator are separate. And this exists in 41 states, I believe in all states. And the length of the bone can't be longer than the average lifespan is in relation to the lifespan. Just a follow-up, is there a reason that these physicians can't set up a compound and do this without the municipality? Which they need to have municipality to do this. They need a municipality to do So put it that way, and that is the mechanism that allows the banks to loan it for a longer period.

[Rep. James Masland (Member)]: Chris, do you have representative Branagan speeding up? What we have? Okay,

[Rep. Emilie Kornheiser (Chair)]: so there's nothing that diverts any money from the Ed fund. Or Ed Fund still gets its That's right. That's right. If municipality administers this, they can charge to administer it. So they're not doing anything but free. It doesn't seem like that great a deal for the guy building the property. So he's gotta pay his tax and he's gotta extra charge due to the town and then he's got the something else. It benefits the developer. Let's say you're a business, you're operating your industrial facility and you have a booth that you could put solar panels on and the bank says sure I'll give you a five year loan to put the solar panels on, but through this program you could do a twenty year loan and tie it to your property, that's the benefit, is a longer term loan for the project and the bank sees that as a product stimulus. I'd see why the bank would to withdraw that because they're going to get payments for forgot who's building the building, they use paying for twenty years instead of five. But their payment is over.

[Rep. Charles Kimbell (Ranking Member)]: Schmuck, I didn't recommend that. The person that is making the renovation may not find financing immediately available to do this type of improvement, and the improvement is paying for itself. And I say, we're not going to finance that, but you can get it through this other program and you don't have to take out an additional loan, they're going to provide the infrastructure and you're going get repaid through this extra pay money property.

[Rep. Emilie Kornheiser (Chair)]: What I really care about is that I don't want to divert any more loans from the income. That doesn't happen.

[Rep. James Masland (Member)]: Right. Representative of them.

[Rep. Emilie Kornheiser (Chair)]: But I'm curious, it's about a fiscal note. Is the fiscal note going be updated to include his thoughts before we vote? That's right. So

[Patrick Higley (Joint Fiscal Office)]: Patrick Higley joined the fiscal office. It's not included in the fiscal note for two reasons. Very short timeline to put something very complicated in there. Two, there is not actually a fiscal impact to the state. This is purely a broad program that's being conducted on the municipal level. The representative mentioned that there are ways for them to make sure that their administrations of this program does not leave them wanting. And from an athletic level, is no physical impact to the state.

[Rep. Emilie Kornheiser (Chair)]: I just have a process check, and this is not for anyone that's fine. One of the things I wonder about is when we talk about fiscal impact, we only talk about impact on the state budget. But when do we look at the ROI of projects? For example, multiple states have done convention centers, and it actually most have doesn't have a cost, but if you create a program and then start putting money into it, it is a cost, and it may be a way we actually evaluate whether a particular investment is achieving whatever our economic goals are, and those aren't actually written here. I ask that broadly because I know that for a long period, the apprenticeships and career pathways were about supporting development in high growth, high wage sectors. And I'm wondering, how did we decide culinary was the way to do that? I'm not saying it's not valuable, but it's not a high wage sector. And I worry about creating more sectors where people, this is a place where the college has already collapsed because it couldn't financially sustain itself. And I worry about creating a need for credentials in a place where people are gonna be underwater trying to pay it back because the wages aren't high. And I just don't know where those conversations happen.

[Rep. Charles Kimbell (Ranking Member)]: For us, for our committee

[Rep. Emilie Kornheiser (Chair)]: It's not relevant to us, but it is relevant to how we learn. We had that conversation with the committee at that time and this is why we deliberately changed this idea of the original plan we did here the Senate was a study to create a culinary institute and he said, know, kind of what you said, you know, that a culinary institute actually is not financially feasible and certainly, certainly the banking model wasn't because you are with the amount somebody pays in tuition, can't pay back the loans. And so, there is very clear workforce need in our tourism and hospitality development. So, in certain parts of the state, there is a shortage of trade folks and the culinary hospitality professionals. And so the purpose of both the pilot program and the study are actually to look at ways to develop those skills and professions in a cost effective way, for the government and for the students.

[Rep. James Masland (Member)]: Yeah, a couple of comments in following your comments. We used to have NECHY in the model, which was very successful until it wasn't. I mean, it turned out some remarkable graduates, guess we could say. We've also had back a couple decades ago, during the school to work, school to career days, apprenticeship programs. Some of them were centered around the hospitality and chance to be made, went away or whatever. So, I see this as a good effort, and whether it's intended or not, it's recreating stuff that we had that was really quite successful that is, I don't know, for lack of a better term, frittered away or less than financial. It's these little shivers and bottles that we had a couple decades. So and so even though it may seem like an oddball out of place, I think it's very much part and part and parcel of what we are as we do. So carry on. Yeah. Representative Page. Just

[Greg Sable (Office of Legislative Counsel)]: a quick question.

[Rep. Charles Kimbell (Ranking Member)]: Do we not any longer have these culinary and hospitality

[Greg Sable (Office of Legislative Counsel)]: programs within our high schools with career centers? So are we reinventing the wheel here?

[Rep. James Masland (Member)]: So

[Rep. Emilie Kornheiser (Chair)]: that is why BAC10 and CTEs are an important part of that study, but what we don't have is if you graduate from high school and gone through a culinary program in high school, we do not have post secondary training opportunities. We use our test facilities that those graduates are going out of state to further their education and maybe often staying out of state. So the idea is, and we had, it was Judy from CTE who was very helpful talking through some thoughts about how do we utilize infrastructure that we have, for example, in CTD centers and also apprenticeships and also look at what are the certifications, what are the pathways for the post secondary training, not necessarily institute, right, we're not necessarily a degree, but what are the post secondary training pathways? How can we do a better job of training those people for the docs that exist?

[Greg Sable (Office of Legislative Counsel)]: Great. Okay, back to me. Back to some pace. Yes. So I am on page 26 or in subsection C, the written agreement between the municipality and the property owner. A capital provider shall disclose to participating property owners each of the following. The risks associated with participation in the program, including risk of failure of participating property owners to make payments and the risk of foreclosure. The red provisions of subsequent H that pertains to prepayments of the assessment. The notice of an agreement shall include at least each of the following: name of the property owner, its grantor, the name of the municipality as grantee, date of the agreement, and other details, common contracts. Prior to entering into the written assessment contract, the property owner shall obtain and furnish to the municipality a written statement executed by each holder of a mortgage or date of trust on the property, securing indebtedness in their sole and absolute discretion that consents to the assessment and indicates that the assessment does not constitute an event of default under the mortgage or deed of trust. The combined amount of the assessment plus any outstanding mortgage obligations for the property shall not exceed 90% of the appraised property value. Subsection G, with respect to an agreement question.

[Rep. James Masland (Member)]: So

[Rep. Emilie Kornheiser (Chair)]: who's holding the paper on this? Is it the bank?

[Greg Sable (Office of Legislative Counsel)]: Well, there's a capital lender, right, who is, I guess that question I'm not the best to answer, right, as to how that works behind the scenes. The town approves of the entire process being able to take place, and they can either be the administrator or they can hire an entity to be the administrator of the program. The lender offers the loan through property tax, a property tax basically lien. It might be a

[Rep. Emilie Kornheiser (Chair)]: On line 10 here on page 26, it says the name of the municipality as grantee. Isn't the grantee the person who's holding the liability? Am I right on that? Bridget, I don't know. You're a banker, right? It's not insured out there.

[Patrick Higley (Joint Fiscal Office)]: It's an

[Rep. Emilie Kornheiser (Chair)]: investment banker. But it would depend on how all this is. We're going next. So I'm going go.

[Rep. Charles Kimbell (Ranking Member)]: I would think in this concept, the name of the grantor is that the person that's allowing a lien on their property being given to the municipality. They received the lien.

[Rep. Emilie Kornheiser (Chair)]: Okay, I'm going to stop, we're going to talk about this tomorrow, right? I am tired, it's the end of the day, I do not get this at all. I have a feeling like there's something here that I shouldn't like. Okay. He's doing this voluntarily, though. It's not like a storm water assessment or something where there's flooding. We have an involuntary one, if you will, in our neighborhood where the town says you had to do more stormwater in a specific neighborhood and you had not much choice but to agree that this was something different. So this is something that the business owners would want and so they're opting into. They don't have to do it if they don't want to. Yeah, that's true. Okay, so I'll call it a tool for them. I'm going to stop asking questions. Sorry. Okay. Go ahead. I may

[Rep. James Masland (Member)]: have said this the other day, but I think I thought it, but didn't say it. That the first PACE legislation that we passed here was when Mark Machini was district mate, and she was very interested in PACE as a, at that point, fairly simple way of finding extended timeline on financing of solar projects on individual properties. And since then, the concept has been used a couple of times and it's become considerably more sophisticated. This bill is certainly an example of something that's more sophisticated, a little more complicated. The principle is the same, though, as Rep. Kimbell has been saying. It's mechanism to provide a longer timeline for a loan for a renewable energy project. And in concept, I support it wholeheartedly, and like other members here, we're trying to learn the particulars to that to the extent that it's what it means jurisdiction. It seems that, Rick, you and and the committee of jurisdiction have thought it through pretty carefully. But by necessity, it gets more complicated every time we try a new iteration. So I might

[Greg Sable (Office of Legislative Counsel)]: that by Ellen Chittenden followed the bill in the Senate and knows committee, just be fair to you all. I know the words on the page. That's about the extent of what I know. It might help to have some background about why the Senate passed it, what happened in House energy, why he gets into Congress. I think Greg Duke was able to speak a little bit about that, but I think Ellen would be able to give you a better picture of what's going on here.

[Rep. Emilie Kornheiser (Chair)]: Used in other states. You can look at what other states experience. It's not unusual. Okay.

[Rep. James Masland (Member)]: Let's get it done to one person at a time, Jim.

[Rep. Emilie Kornheiser (Chair)]: To the extent the committee

[Rep. James Masland (Member)]: chair is interested, it might be a good idea to have Alan in briefly, but I can vote for the bill without having her in. I understand. It's committees privilege, I think, apparently. Senator Kimbell has made the notation.

[Greg Sable (Office of Legislative Counsel)]: Okay. Thank you. Okay.

[Rep. James Masland (Member)]: Alright. Are you

[Rep. Emilie Kornheiser (Chair)]: voting on it tonight?

[Greg Sable (Office of Legislative Counsel)]: No. No.

[Rep. Emilie Kornheiser (Chair)]: When Representative Duke comes back, can we ask her to speak to the rural industry development grant to you? I'm trying to figure out if they couldn't extend the resources, how do we decide whether to just keep it going or divert it to a higher ROI?

[Rep. James Masland (Member)]: I what you're say.

[Greg Sable (Office of Legislative Counsel)]: I'm back.

[Rep. Emilie Kornheiser (Chair)]: Okay.

[Greg Sable (Office of Legislative Counsel)]: So I spoke about subjection F, the itemized amount shall exceed 90% of the appraised real property value of the property, subsection G. With respect to an agreement under the section, these settlements to be impeached, violate various consumer protection laws we have on interest, non ESA 41A, 43, 44, and 46, four fifty. The maximum length of time for the owner to repay the assessment shall exceed thirty years. I assume that took up the most mortgage in thirty years, but my assumption. H, for project under subchapter two, which that is the residential piece of this, which is in law, There shall be no penalty or premium for prepayment of the outstanding balance of an assessment under this subchapter if the balance is prepaid in full. Projects under this subchapter, three, C PACE, are not subject to these provisions, but shall be subject to the private agreement for the financing of improvements. Property may be eligible for financing if otherwise qualified improvements were completed and operational not more than thirty six months prior to submission of the application to the program. Waivers to the thirty six months requirement may be granted any sole discretion of the program administrator. Okay, so 3277, we're still in the same sub chapter, now talking about the administrators of the program. An entity that administers the commercial property sets clean energy program, C PACE, shall be referred to as a program administrator. You can either have a municipality, a public agency or a private entity be a program administrator. Municipalities that have adopted the district through a vote may enter into a contract with an entity to serve as the program administrator or serve as the program administrator itself to administer the functions of the C PACE, including entering into the agreements with the commercial property owners and collecting C PACE assessments. An entity may enter into a contract with the C PACE municipality where the entity shall serve as the program administrator and collect fees as necessary to administer the program. Other than the fulfillment of its obligations specified in the CPC agreement, either the administrator or municipality has any liability to a commercial property owner for or related to energy savings or resiliency improvements financed by their CPAs program. The remaining sections, 14b through I think g, are technical adjustments because you're adding in a commercial program under the current residential program. So 3,263, cost of operation of a district. Adding the sentence, a municipality may charge fees to cover the operation of the C PACE program under subject. Adding in, coordinating language to the CPACE programs,

[Rep. Charles Kimbell (Ranking Member)]: nothing special there.

[Greg Sable (Office of Legislative Counsel)]: Section 14D liability of municipality. C, a municipality that enters into a written agreement with a property owner under Subtracture III, C PACE shall not incur any indebtedness or otherwise finance project under this chapter, nor shall be liable for the failure of the performance of the project, nor shall pledge the full faith and credit of the municipality.

[Rep. Charles Kimbell (Ranking Member)]: That's specific, the municipality is not going to go out and borrow money to fund it.

[Greg Sable (Office of Legislative Counsel)]: That's how I read that, yes. Yeah.

[Rep. Charles Kimbell (Ranking Member)]: It's the administrator.

[Greg Sable (Office of Legislative Counsel)]: Right, this only applies to municipalities. 14E, again updating the language including adding some chapter three to the, it's a lien language in A and B. Section 14F, the collection of assessments, liens. Adding in this sentence towards the end, a lien for an assessment under sub chapter three shall be exempt from the provisions of the section and upon receipt of consent from lenders pursuant to subsection 3276E of this title shall not be subordinate to all liens on the property in existence at the time the lien for the settlement is filed within the land records. So again, this is under the residential program adding in the language for the commercial program.

[Rep. Charles Kimbell (Ranking Member)]: On line 14 to 15, upon receipt of consent from lenders, so if there's already

[Greg Sable (Office of Legislative Counsel)]: an existing mortgage on it, have to agree to allow it to become. Yes and there's language in here that dealt with that too. Yeah, e, prior to entering into the written contract, the property owner shall obtain and furnish to the municipality, written statement executed by each holder of a mortgage or deed of trust property. There's In still an absolute description that can sense the assessment and indicates the assessment is not a constant event of default to the mortgage or date of trust. I guess that's not the mortgage four. That's the mortgage e.

[Rep. James Masland (Member)]: Representative Masland. Rick, the language you were just on does not constitute a default. At the very end? Well, you were just there a minute ago.

[Greg Sable (Office of Legislative Counsel)]: Is that typical

[Rep. James Masland (Member)]: of this kind of agreement?

[Greg Sable (Office of Legislative Counsel)]: Like, I don't know. Okay. Yes. I'm

[Rep. James Masland (Member)]: sorry. No. It's okay. I just find found it not being a banker or a financier. Okay. Qualification of something Johnson and and Johnson

[Rep. Charles Kimbell (Ranking Member)]: and Johnson and it's not subordinate to other deeds, and so it constitutes default Johnson if you allowed someone to get in front. So this is where it's a written agreement saying yes, we're

[Rep. James Masland (Member)]: not That makes sense, thank you.

[Greg Sable (Office of Legislative Counsel)]: Okay, subsection, sorry, section 14 gs, it's the last one for the effective dates. We are in the exceptions, a nine VSA 46. Obligations incurred for commercial property, system energy projects, sorry, reading language here. Section 43 of the title relating to deposit requirements and Section 45 of this title relating to prepayment penalties shall not apply and the parties may contract for a rate of interest in excess of the rate provided in Section 41A of this title in case of obligations incurred for CPAs projects pursuant to this new sub chapter you are creating.

[Rep. Charles Kimbell (Ranking Member)]: So there's a lot to unpack in this Yes. That just matches CPE's. Nickel rounding, you've probably spent some time on that.

[Greg Sable (Office of Legislative Counsel)]: And I'm thinking even with

[Rep. Charles Kimbell (Ranking Member)]: veggie, because it removes the sunset from a tax credit and we typically have a sunset on a tax credit program. So we'll need to discuss if a five or 10 or no sunset is required.

[Rep. James Masland (Member)]: I've got a question. Is there any language in here that makes sure that this program is offered evenly around the state, not like one particular county?

[Greg Sable (Office of Legislative Counsel)]: The CH program? Yes. So any municipality can can vote to do it. Right. Yeah. There's no incentive for those yeah.

[Rep. James Masland (Member)]: And one developer get on board and take off and use up the whole program.

[Greg Sable (Office of Legislative Counsel)]: Well, there wouldn't be any using up of the program. Are you saying in each municipality? I guess I don't think that.

[Rep. James Masland (Member)]: Well, I'd say in one county. In one county, okay.

[Greg Sable (Office of Legislative Counsel)]: I mean, think so. I think if a municipality decides to open itself up to these types of agreements, the municipality still has to agree to each project. It is one of the parties to the agreement that must be part of that agreement. So, I don't think there's any issue with one developer or one town getting some kind of monopoly or some kind of think that's what I understand your question to be. Nothing in the bill would seem to stop or encourage that.

[Rep. James Masland (Member)]: Rebecca Holcombe.

[Rep. Rebecca Holcombe (Member)]: Okay, be taking your words too. For sure. Given the extraordinary workforce shortages right now, VEGI is employment expansion, What's the impact of investing in creating new jobs when we already don't have enough people for the jobs we haven't saved?

[Rep. Charles Kimbell (Ranking Member)]: Great question for the Committee of Jurisdiction. I would say that we've got in statute $10,000,000 credit limit on the amount of veggie grants that can be awarded on a yearly basis. We haven't bumped up against that in a long time. So there's not that many new veggie applications right now because of what you just said.

[Rep. Rebecca Holcombe (Member)]: Yeah, and so again, my question is the opportunity cost. Like what are we not doing because we're doing this?

[Rep. Charles Kimbell (Ranking Member)]: It's a good question, I can't answer it, yeah. The average cost of the

[Rep. Rebecca Holcombe (Member)]: state is about $17,000,001,000,000 dollars a year, Am right? This is our total economic development investment. Isn't there a committee that runs Veggie,

[Greg Sable (Office of Legislative Counsel)]: the

[Rep. Emilie Kornheiser (Chair)]: head guy, or the head guy in to answer those questions?

[Greg Sable (Office of Legislative Counsel)]: If we need to, because

[Rep. Charles Kimbell (Ranking Member)]: it's Vermont Economic Progress Council, and it's all Hartley bound. Jessica, Jessica. And we do have a report on our page, I think, from them last year from a VEGI report. On, Rick, for the CPAs, even though you're not the one to draft it, is there any liability to the municipalities? There's no liability to the state, and there's no liability to the municipalities as you described it.

[Greg Sable (Office of Legislative Counsel)]: So the liability, do you mean financial? Yes. The lien runs with the property and if it's foreclosed, if property owner that initially got the loan sells the property or goes under, falls under bankruptcy, whoever bought that property would have to take on that lien or pay it. So I think that whole is covered, but is there another way for the municipality to incur some type of liability? I can't think of one.

[Rep. James Masland (Member)]: Representative Holcombe asked a question from Representative Duke Nachin. Just

[Rep. Rebecca Holcombe (Member)]: given how tight our labor market are, we just don't have people here to do the jobs, to grow businesses the way we need. Benji is focused on employment growth. What's the opportunity cost of creating focus and creating new jobs as opposed to creating a workforce for the jobs to be had? I think that's a good question and I think it speaks to right now, I think that she does have limited flexibility. We don't. I'm on biopsy and I think there's one application in the works. It's a very, the idea that is veggie is best four times higher. And so, but that doesn't mean, there's a small number of employers that it's appropriate for right now but that may be different in five years it may be different in ten years but veggies works for very specific in very specific situations but it certainly does not work for all employers partially because of what they're taught. So did the committee discuss, given that we had, and I'm not questioning whether that's he does a great job with the parameters that we've required to follow, but are we near time of revenue for economic development in this program? Did the committee discuss other uses of that revenue that might be more appropriate for a particular moment that we find ourselves in, which is can't find hands. Yeah, understood. Yes, so what we have talked about is that there are likely other economic development programs that could be more appropriate for this moment, but nobody has come forward with them. We asked in the report from AED to identify gaps in programs and identify gaps in what businesses need. But also what we discussed is this only ties up revenue if there's an appropriate project So, think a limited $10,000,000 and it's $2,200,000 I think that goes to show that there's very limited projects that are that work right now, more veggies and more. And so my hope, think our committee's hope, is that for next year there will be some ideas of economic development programs that could fit the needs of businesses that we want to see. For example, we hear from manufacturers who struggle to finance more equipment, especially equipment for automation, to replace jobs, but to improve jobs and go through profitability or through their ability to compete in their market. We do not have a program right now really that works for that. So there are some ideas for the future, but in the meantime our committee's thinking is that veggie works really well for British Chamber of Commerce. If it's not an appropriate project and if it's not a three year standard revenue is not different. That's the thought process.

[Rep. James Masland (Member)]: Okay,

[Rep. Emilie Kornheiser (Chair)]: And likewise, when you're out the rural industry development grant programs, the explanation was that we haven't expensed those funds, is why this is not an appropriation. What are the changes that we're making in that program that you think will lead to expenditure this time frame, as opposed to the opportunity cost of different things. Yeah, understood. So, by increasing the percent of the project, opens up more potential projects. Then the other piece is really, the other piece is increasing the award to a full brand up to a million dollars. It's a federally impacted property. And we hear testimony from two projects specifically that this could be a trouble for. One is the Newport downtown, the empty lot that like that because it's considered a federally impacted property and others to not go to the post office. So that is the rationale behind those two things And the idea is that money is not being deployed quickly because it's performing and by increasing it from 20% to 15% that could increase the uptake of the money.

[Rep. William Canfield (Vice Chair)]: This is probably a question for Representative Duke as well. I talked to Representative Mark Higley about, I believe, in particular Section nine, the Rutland section area, and is that what you're looking for in the committee, whole piece about the sunset?

[Rep. Emilie Kornheiser (Chair)]: The whole Section nine, yes. Our predisposition is to feel upset so that they can just

[Rep. William Canfield (Vice Chair)]: It's a little confusing the way it was

[Rep. Emilie Kornheiser (Chair)]: It's very confusing, like repeal over repeal. Right,

[Rep. William Canfield (Vice Chair)]: you're good.

[Rep. Emilie Kornheiser (Chair)]: So that was what the sentence it's sentenced to down the people on our social support.

[Rep. William Canfield (Vice Chair)]: Okay, thanks.

[Rep. Emilie Kornheiser (Chair)]: Do we have more questions for Rick, because we can also have Abby sit there. Sorry. Go ahead, Jim. Represent Masland, do wanna ask Abby a question?

[Rep. James Masland (Member)]: Yeah. Not a question for Rick, but I think

[Rep. Emilie Kornheiser (Chair)]: Is it a question for Abby? No. Does anyone have any other questions for Abby?

[Greg Sable (Office of Legislative Counsel)]: Question.

[Rep. James Masland (Member)]: It's we had I think it

[Rep. Emilie Kornheiser (Chair)]: was What was it a question for? I know I just jumped in, but I'm trying to get everything clear again.

[Greg Sable (Office of Legislative Counsel)]: Okay. In

[Rep. Emilie Kornheiser (Chair)]: my own mind.

[Rep. James Masland (Member)]: It's a question for the committee. Okay.

[Rep. Emilie Kornheiser (Chair)]: So let's hold it for a minute.

[Greg Sable (Office of Legislative Counsel)]: Okay.

[Rep. Emilie Kornheiser (Chair)]: I'll Okay. To do that. Okay. Questions for Abby? Representative Duke, excuse me. Thank you, Representative Duke.

[Greg Sable (Office of Legislative Counsel)]: Had a

[Rep. Emilie Kornheiser (Chair)]: balance of information today. On the convention center task force, what information would your community review on this? And just in terms of the, I think you're just studying feasibility, but if you study feasibility as the assumption that you're

[Rep. James Masland (Member)]: going to be coming back next

[Rep. Emilie Kornheiser (Chair)]: year with an answer to the state that's financial? And if so, what was the evidence that you looked at with respect to the return on state investments at convention centers? Gotcha. So task force met, which I'm on, met six times this past year and the committee reviewed the report. There's an interim report that the task force submitted, which is on our page, so you can see that item.

[Rep. Abby Duke (House Commerce; reporter of S.327)]: Was really the big takeaway from that report was that competitive center is most appropriate for Burlington, specifically based on Burlington for a number of reasons that are outlined in the report and the idea of a performance venue could be appropriated multiple, know, there's a number of, that is not necessarily info.

[Rep. James Masland (Member)]: I would

[Rep. Abby Duke (House Commerce; reporter of S.327)]: say that was the biggest. We came really focused on what is the need, where could it be, started getting into a little bit into the financial feasibility, but the purpose of the task force for the second year is to really look at financial models, financial feasibility, where would the money come from? It is very clear from testimony we got from a number of convention centers around the country that convention centers are, they do not pay for themselves directly. So that you need some kind of an entity, some kind of a funding structure that pays both for the building of the convention center and the ongoing running of the convention center. And so the next phase of the task force is to look at funding models, if that could conceivably, I would say it would not mean an appropriation from the state most likely, but it could mean the state allowing a funding mechanism to occur, whether it is a surcharge on hotel rooms, whether it is some kind of tourism district. In most states, convention centers are funded and run by counties, which we do not have. And so that's the other piece is that we've been very clear in the task force, this could not be a municipal run entity. This has to be a regional, whether it's a state or a region that creates a way to fund it because, and then again, there's financial analysis being done that for much to the Lake Champlain chamber is working with the consultant separately, funding and paying for a consultant, 100 partners to do feasibility and financial analysis of the convention center in Burlington. And that includes what are the tax implications if this convention center happens, what would be the resulting increase in revenue from hotel rooms, from taxes, from a variety of sources and from economic activity where the convention center occurred. So it's really more, not so much about saying what would the state investment be, but what are potential things that the state could enable to create a regional, more statewide funding, ongoing funding for the pregnant?

[Rep. Emilie Kornheiser (Chair)]: Does that all make sense? Thanks. Before we turn to Pat, I have a question about the rounding language. Sorry, I don't know how much time you lost time on the rounding language. Did it align with the NCSL model guidance on rounding that was issued earlier this year? Oh. I

[Greg Sable (Office of Legislative Counsel)]: did not draft that.

[Rep. Emilie Kornheiser (Chair)]: Who drafted the rounding?

[Greg Sable (Office of Legislative Counsel)]: My colleague, Cameron Wood.

[Rep. Emilie Kornheiser (Chair)]: Okay. I'll check-in with him about it.

[Greg Sable (Office of Legislative Counsel)]: So certainly, I can get back to you tomorrow or even via email.

[Rep. Emilie Kornheiser (Chair)]: Just ask him. It's fine.

[Greg Sable (Office of Legislative Counsel)]: Bye. Thanks.

[Rep. Emilie Kornheiser (Chair)]: Cool. Love rounding. So glad that Congress took it on. Thanks so much. Okay. Let's hear from Pat.

[Patrick Higley (Joint Fiscal Office)]: Still is a very total change of headspace for me I from what I usually work

[Rep. Emilie Kornheiser (Chair)]: find it very refreshing, actually.

[Patrick Higley (Joint Fiscal Office)]: There is a fiscal note that I'm going to share with you. It should be posted under my name on this lady's page. People have

[Rep. Emilie Kornheiser (Chair)]: it printed out, which is great.

[Patrick Higley (Joint Fiscal Office)]: So I know great. So on a top level, the only piece in here really that I think is touching on tax policies, tax policies specifically, has to do with that veggie sunset repeal.

[Rep. Emilie Kornheiser (Chair)]: I don't know what's going on either path. Okay. And

[Patrick Higley (Joint Fiscal Office)]: so I pulled from the 2025 report, the tax expenditure of that program in 2023 was 2,200,000. And so one thing to remember, and sort of the range I saw within there, typically the cost of the state in terms of foregone revenue bounces between about two. The high point I saw was maybe 4,000,000 at one point. A key thing to remember with the repeal from Veggie is it's not repealing the program in and of itself. It's repealing their ability to issue new incentives. So it's not like repealing this program would erase anything that's already been awarded. So there would be sort of a tailed effect. And over time, if they were not allowed to grant any new awards going forward, it would sort of slowly ramp down over time. So that was the only piece that had a direct sort of tax implication to state revenues. There were a couple of areas and I'll just note that the business resources and growth inventory study, there is no per diem language in that section. So there's no cost per diem side of things. For the convention task force, they're granted eight additional meetings. There are two legislators and five other individuals who would be eligible for per diems. Rutland can attest to this. I checked in with Scott Moore, who helps legislators with their per diems. And the actual cost of per diems for the study group last year was $0 So if the $9,600 that you see there is sort of the abnormal estimate we would do, obviously people have to ask for their per diems to actually receive them and for there to be a cost.

[Rep. Emilie Kornheiser (Chair)]: So we are not asking for money in this bill for per diem because previous members chose to not pay per diem? I'm not sure if I

[Patrick Higley (Joint Fiscal Office)]: No, so they're still eligible to receive it. Yeah, they're still eligible to receive it

[Greg Sable (Office of Legislative Counsel)]: in this

[Patrick Higley (Joint Fiscal Office)]: language. I can double check with Scott Moore again, but my understanding is that these costs can be accommodated by the legislative budget if they were to be incurred.

[Rep. Emilie Kornheiser (Chair)]: The other thing that happens, and I hear you saying that this is covered by the budget, even if they're all fully taken, a lot of non legislative members, it's there if their employer doesn't pay them for their time, but most employers pay them for their time. So that becomes a weird, just like a shakeout in estimates for dues.

[Patrick Higley (Joint Fiscal Office)]: So we do the estimate for the cost if everyone's taking the per diem as they would be eligible for, but in many cases, people don't end up actually taking them. So they just talk about veggie and that can feel sunset. There is the culinary and hospitality education study, which you saw in here. Again, there is no enabling per diem language in here, so there's no per diem cost for that study. The hospitality and culinary apprenticeship pilot report. So this is just tasking DOL with going out and setting up this pilot. Notably, there is no appropriation language for support of this. So what it is saying is basically the department can either rely on any excess capacity their employees may have, or to the extent that there are grants that they can receive or federal funding available for this type of program, they are able to accept and use that for it. And it's tasking them with coming back with a report about how that process has gone for them. So that's another area where there's no change in fiscal impact for the state. The Rural Industry Development Grant Program, as Rick probably told you, this is moving the language from session law into statute. And as Rev. Deep mentioned, there's two things that are happening with awards. Currently, grants may not exceed $1,000,000 or the lesser of $1,000,000 or 20% of the total project costs. That's being changed to the lesser of $1,000,000 or 50% with the caveat that if they have hit the million dollar cap, but are in a federally affected area, they can go up to $2,000,000 in terms of the grant. It's my understanding that there is some money still in this program for these grants. I haven't gotten back what the actual balance is yet, but when I do have that, I can provide the committee with it. And I do know that in the House construct, I believe it was $2,000,000 was appropriated for this program.

[Greg Sable (Office of Legislative Counsel)]: The nickel rounding.

[Patrick Higley (Joint Fiscal Office)]: I guess basically what I'll say is this is only for cash transactions and the calculation of either of any kind of tax or fee that is associated with that purchase is based on the unrounded amount.

[Rep. Charles Kimbell (Ranking Member)]: Say that again.

[Patrick Higley (Joint Fiscal Office)]: If something costs $2.52 the calculation of tax owed will be on that $2.52 It won't be on the rounded figure. So there are obviously implications there for sales tax.

[Rep. Emilie Kornheiser (Chair)]: And they didn't wade into rounding, the state rounding transactions. That's my knowledge.

[Patrick Higley (Joint Fiscal Office)]: And so that is where the fiscal note does end. Rep Holcombe did notice that the CPAES program was not included in here. Two major reasons for that being very complicated program to add to this fiscal knowledge in a quick manner. The other one being is there is not a fiscal impact to the state of Vermont on this. What it's setting up is an alternative financing mechanism for these commercial projects for people where, as you heard, maybe they are able to get a longer commercial loan than they would have otherwise been able to. Presumably part of the interest on the lender there is that with the loan being connected to the property itself, there's probably a little bit more surety of them recouping the loan that they're putting out rather than having to figure out where in line they are if someone goes bankrupt or sells the property and the person Well, there are a whole slew of different scenarios that could happen, but in terms of whether it's attractive for someone to go this route, With the longer term, the year to year, month to month payments can be lower. So, I mean, there's several different ways it can be structured, but maybe someone opts or decides that that's the more attractive route for them. It could be that they much prefer the shorter term loan, which they do. That's still an option. But again, it's something that municipalities would have to opt into. And again, it's leaving education property taxes out of the conversation. It's basically put on top of the municipal taxes for the purposes of paying the loan.

[Rep. Emilie Kornheiser (Chair)]: On to the municipal tax.

[Patrick Higley (Joint Fiscal Office)]: Yeah, so it's not additive to the education property tax, will go to the state, doesn't touch that at all. The municipality sets the municipal tax rate, and then on top of that amount will be the amount that the property owner has to add to their municipal taxes in order to repay the loan. One way I think about it conceptually is when you're paying a mortgage, oftentimes the lender will add taxes, which they hold in escrow to pay on your behalf. It's not a direct comparison, obviously, but conceptually, that's how I was thinking about it. So really, it's a person with a commercial property who takes out the loan, paying the bank directly. It's tied to the property, which is why you have the municipal property tax entering the inflation and why if that person sells the property, that loan and that payment is still connected to the property and whoever purchases that property assumes that loan. And presumably that would have

[Rep. James Masland (Member)]: to be something

[Patrick Higley (Joint Fiscal Office)]: disclosed during the purchasing process.

[Rep. Emilie Kornheiser (Chair)]: And so how does this affect the municipal tax?

[Patrick Higley (Joint Fiscal Office)]: It's on top of it. It doesn't change how much of the municipal tax the municipality is collecting for its normal operating. It's additive to that when you look at the person's tax bill.

[Rep. Emilie Kornheiser (Chair)]: To the municipal tax.

[Greg Sable (Office of Legislative Counsel)]: The town is just collecting

[Patrick Higley (Joint Fiscal Office)]: it and then paying the lender with it. So it's basically the same money that the person who borrowed the money would be paying to the bank directly, but because it's tied to the property directly, the municipal property tax is the mechanism that ties it there.

[Rep. Emilie Kornheiser (Chair)]: So the town is basically serving a de escrow agent to some degree?

[Patrick Higley (Joint Fiscal Office)]: Conceptually, in my head, that makes sense. I would definitely encourage you to have Alan in to give you the more legal perspective. Thanks.

[Rep. Emilie Kornheiser (Chair)]: I want go back to Venue for a minute. I've been trying to Having a sunset every two years is dumb and annoying for everyone involved. Appreciate the nodding from the benches. And we have this fairly careful process of appropriating every year, and we don't have a process of looking at all our tax expenditures every year. We have tax expenditure reports, which happens cyclically.

[Greg Sable (Office of Legislative Counsel)]: We're writing one this year.

[Rep. Emilie Kornheiser (Chair)]: And sometimes we do a better or worse job at looking at them. And I'm just trying to think through ways we could do a better job with it. We could ask committees of jurisdiction to sort of send tax expenditure letters the way that appropriations on budget asks for budget letters. We could have sunsets on everything that are further off, that have very specific report added to them. That's sort of a I don't know. Do you have any ideas, Pat, before I ask the committee for ideas?

[Patrick Higley (Joint Fiscal Office)]: Well, I would always say that the tax expenditure report's a wonderful tool in helping the legislature inform Great. Themselves on Awesome. It does also include intent, like all the intent language. So when reviewing it, you can find the expense you're interested, look at the intent and think about whether it's achieving that intent.

[Rep. Emilie Kornheiser (Chair)]: How often does the tax expenditure report?

[Patrick Higley (Joint Fiscal Office)]: Every two years. So we wrote one for last year or no, two years ago, regarding this summer for you all to review in January. Thanks.

[Rep. Emilie Kornheiser (Chair)]: Thanks for your time. I like your idea of having people talk to their tax expenditures, not because some of these programs are really felt, but the needs of the state evolve, and there's no routine evaluation that whether this is the best use of this particular tax credit or preserving opportunity cost by Chime up here could be a third party. Anyone else? Representative Masland?

[Rep. James Masland (Member)]: Yeah, I like the idea of asking the committees to review tax expenditures and go to their committee and give us their opinion. Also, Madam Chair, when you're out of the room, Kimbell talked about appealing the issue, appeal of

[Greg Sable (Office of Legislative Counsel)]: what we were talking about.

[Rep. Emilie Kornheiser (Chair)]: Putting in a stick. In our path here,

[Rep. James Masland (Member)]: or our process here, for very good reason, not to repeal things entirely, but to put a sunset out there, in keeping with what you're just saying so that we review whether we want to keep it or not. Once we get rid of it, it's going to be awful goddamn, excuse me, my age, trying to get it back again. So, whether we can say five years or whatever, I think I would prefer to go that way.

[Rep. Emilie Kornheiser (Chair)]: Well, I was trying to tell you a little history, but then I decided not to because it was already ten minutes at four. But there was a time when I remember sitting around the table and we were downstairs in Room 34 and fighting over going up to $10,000,000 because some of us wanted to go to $20,000,000 because the economy was thriving and we needed all kinds of investments like Pepsi because businesses were knocking on the door of the committee and a lot of them weren't, they had to get so far down the line that the money was gone by the time they got their turn to you know, play their case, deal their case. But I decided not to tell that story because it's such a bad thing. But the other thing I wanted to know is, are we the only committee that uses the tax expenditure report? I assume it's possible Senate Finance does. I don't really know. But we can certainly help other committees spend more time on it. Because there's a ton of information in there. And I think even ways and means types don't dip in there enough to really enjoy the beauty of that report. We have a lot of reports that we are not spending enough time in the beauty of. I spent some time with fiscal facts today on the floor. Charlie is reading the Vermont tax study from 2005 to 2015. There are good times happening around here. On what you were just saying about the history lesson that you didn't tell, I think it's been a while since we actually even fully expended the expenditure that's allowable under VEGI. Is that true, Pat? Yes. Okay. So times have changed towards your point, Representative Holcombe. So there's sort of a question about, is this the right program in this moment that we would be making with? I assume that the Commerce Committee spent a great deal of time discussing that this year when they removed the sunset. Do we appropriate 10,000,000 a year for that thing? We accept the loss of money, which is different than appropriating. If we appropriated it, we would never have to talk about veggie ever again. If we could just turn it into a grant program, no one would ever have to have this come through Ways and Teams. Yeah, it's true. But until that happens, I think we should extend the sunset.

[Rep. Charles Kimbell (Ranking Member)]: Yeah, I think there's three tools we have. One is we can adjust the amount of the credit that's available depending on economic times. So that's open to us. The second is that we can always repeal it if we remove the sunset. We can always revisit it when we need to. There's nothing that prevents the legislature from doing that. The third is the sunset is helpful, but I'm worried that five years or ten years from now, somebody says, don't know what the hell this is. But anyway, so I think it's probably appropriate to have that in the distance, but far out. So we don't get into the health IT fund every year trying to sunset every year.

[Rep. Emilie Kornheiser (Chair)]: More than five years? One of the funny things about even if we all forget what's going on, there are all these people that are feeding around the benches to remind us about how important veggie is. Well, they forget about that. So I was thinking more of those ventures, but these guys are paid for that too. Yes? I think that's my point. I'm not saying it's not a fantastic program, I know it's done amazing things for some places. My point is just anytime we create a program, and whether it's an expenditure or appropriation, it's still a program we're creating because we're accepting lost revenue, we create a constituency. But we don't know, We have a really serious economic development problem in the state, and we don't have a lot of cash. And so I think we have to be incredibly disciplined about making sure that when we spend money, and it is taxpayer money, that we are putting it where it's going get the biggest lift. And that's why I worry about things like the culinary college. Not that it's not a great thing, but is that what Vermont needs right now? I don't know, Once we create it, it's out and running. But I sometimes worry that we do so many things, we aren't doing it's making the dollars matter for Vermonters. To me, if you can't expend the money or you can't expend the credit, it does raise questions. And maybe it's that we haven't designed the program well enough to be useful. Maybe it's that right now, it's an amazing program for five years ago, not the amazing program in ten years, but right now we need something different. We just don't know the difference, we just don't

[Patrick Higley (Joint Fiscal Office)]: know how spend anything.

[Rep. Charles Kimbell (Ranking Member)]: We've often talked about that in commerce, you know, during the one kind of economic cycle you need one tool, and a different economic cycle you need a different tool.

[Rep. Emilie Kornheiser (Chair)]: So we have to chew down the pot. Yeah,

[Rep. James Masland (Member)]: starting with a scary thing. Of the things that I learned a number of years ago in a different program was develop a pilot and then go to scale. So, if we're going to do a pilot for because we're proposing here

[Rep. Emilie Kornheiser (Chair)]: For veggie? No. I'm back on

[Rep. James Masland (Member)]: the previous issue of the culinary.

[Rep. Emilie Kornheiser (Chair)]: Oh, I don't know how much jurisdiction we have over the culinary. I'm thinking, I'm also not I'm not going Just a comment just to make a pilot.

[Rep. James Masland (Member)]: With regards to culinary. The important thing that statewide or economic development, or whatever, be looking at is how, if we develop a pilot, where it's developed and works, how do we get that to go to scale to other industries? Because that's really where the issue is, it seems to be a development issue. How do we do that? Not our jurisdiction, I understood the

[Greg Sable (Office of Legislative Counsel)]: whole I

[Rep. Emilie Kornheiser (Chair)]: think one thing that's nice about Veggie is it's definitely not a pilot at this point. I think there's some programs that you could add a sunset to and it would be disruptive to the goals of the program. I think VEGI is also well past that and has sort of accepted. I think having a sunset every two years adds a lot of instability and it's not what we need to be doing. But I think having a sunset so that a future legislature who might not be so into JFO reports remembers to look at the study would be great. Are you talking about lowering the amount since it's not being fully extended?

[Rep. Charles Kimbell (Ranking Member)]: I think it's a tool that we have to remind ourselves as to how much is being requested and how much we've made available. That's a tool that we have, a lever. Right now, it's a lever that's very large in terms of we're not using or bumping up against that. Suggesting you could use either one of those two.

[Rep. Emilie Kornheiser (Chair)]: Anything else, anyone has some veggies? We're talking about all this tomorrow too. I think so, yeah. And I also, I need to catch myself up on this sea paste. Anyone have other questions about sea paste that we should, that I should make sure we get answered tomorrow while answering my other questions? I just need to hear the whole spiel again.

[Patrick Higley (Joint Fiscal Office)]: Generally answering what we're seeing.

[Rep. Emilie Kornheiser (Chair)]: The only thing, I don't know Todd's got this, it is a tool that will work well for some industries, and is higher risk for some others, and I don't know if there's sort of a, I I think the fact that it's optional, you have to assume that businesses are going to use judgment and decide to opt in if it's useful or not if it's not. But is there a case to do with protection? I don't know if it helps people evaluate that. Okay. Thanks, everyone. We are done for the day. See you tomorrow at nine.