Vermont Legislature SmartTranscripts:

[Carol Ode (Member)]: Good morning. It's Thursday, May 14. We are continuing this is the way the means committee

[Emilie Kornheiser (Chair)]: for I'm sure everyone in this room knows that already. We're gonna take some more testimony on 09:49 today. And then in the middle of all that, we are also taking testimony on H-six 48, which is an act related to banking, insurance, and securities. That is a commerce bill that came to us once, went to the Senate, came back. And then there's a friendly amendment from Representative Olson that the Commerce Committee accepted that he is gonna bring to us on 06:48. And then at 10:15, we're going go back to the yield fill. Tomorrow morning, we're going get a walkthrough of miscellaneous tax and vote.

[Maria Royal (Legislative Counsel)]: Oh, I don't know if we need to

[Carol Ode (Member)]: Miscellaneous tax. Nope, transportation, miscellaneous transportation.

[Emilie Kornheiser (Chair)]: Thank you so much for that. And then we're gonna do the cannabis bill and maybe S-one 190. Thank you. Tomorrow, folks know that there's like two floors tomorrow. Yeah.

[Carol Ode (Member)]: I just wanted to follow-up on something we discussed yesterday. In your history with this committee, has this committee ever modeled for prototypical taxpayers the impact of eliminating income sensitivity? And the only reason I ask is if it costs $0.13 on the tax rate, it would be interesting to know who is paying more taxes because we have the program versus whether the majority of people actually benefit from self help. Yeah, that was something that we I think there

[Emilie Kornheiser (Chair)]: was some analysis of that for the Committee of Conference on the education bill last year, actually. And then the summer committee on income based education tax, I think, has a lot of analysis of that. But that's maybe five years old.

[Carol Ode (Member)]: It's about I'm saying, for 10,000,000, and if you think about how much benefit people really are getting under the program, I just wonder which one would be better. It really depends

[Emilie Kornheiser (Chair)]: on the prototypical, like it sounds like is no, I think there is no prototypical taxpayer in that, it's, yeah. Will you be able

[Carol Ode (Member)]: to tell where in the distribution people Yes.

[Emilie Kornheiser (Chair)]: This morning, we're doing circuit breaker, and we're going to hear from another part of the conversation that the Senate opened up with the rental credit, which is basically the question of how general fund dollars impact the yields and property taxes. And so, Karen, if you wanna come join us, that would be great. Thank you. And then after we hear H648, John Gray and Patrick Tibberton are gonna share some analysis about the circuit breaker.

[Carol Ode (Member)]: Morning. Good morning. How are you?

[Karen Lafayette]: Thank you for being here so late in the session. How long do you think you're going to go?

[Emilie Kornheiser (Chair)]: We don't talk about that.

[Karen Lafayette]: My name is Karen Lafayette. I'm testifying today not only as an advocate for low and moderate income Vermonters, but as a taxpayer in the City Of Burlington. I also represented the city of Burlington for many years as a lobbyist, and I am a former representative that served on Ways and Means Committee when we passed the Equal Educational Opportunity Act, known as Act 60. I testified last session on the education restructuring legislation that you passed as Act 73. At the time, I and others were advocating for a move towards an income based educational financing system and to update the current income sensitivity to provide immediate relief for low and moderate income Vermonters who have been paying a burdensome increasing percentage of their income on property taxes. Today, because you've passed Act 73, today I will comment briefly on the changes in income sensitivity in Act 73 with the replacement of the property tax credit with the homestead exemption for the education tax and the current burden on homeowners and renters without an update to income sensitivity in the current system, especially for those seniors on fixed incomes and for families with low and moderate incomes that happen to live in high value property towns with high municipal taxes as well. And I'll use the city of Burlington as an example. Currently, low and moderate income Vermonters pay a higher percentage of their income in property taxes than wealthier Vermonters. The current income sensitivity first passed in Act 60 has not been updated to reflect the dramatic growth in property values. There's a $400,000 cap on the amount of the house that's income set aside. It used to be $500,000 That has been reduced even as prices and values have gone up. The income qualifications to be eligible for municipal tax credits are still under $47,000 of household income. That's been thirty years. It's been that same income qualification. And the caps on education and municipal property tax credits are at 5,600 for education and 2,400 for municipal. Oh, okay. You look like you wanted to ask a question.

[Emilie Kornheiser (Chair)]: But I just have a cold, so I

[Karen Lafayette]: have a my face is cold enough. Hearing aids are okay, but sometimes they don't work so well. It's caller. Act 73 has some dramatic changes and a number of ongoing issues that still need to be worked out with respect to the redistricting and consolidation and specific funding formula and mandates, each tremendously important changes in education policy, but the changes made to the income sensitivity will have a profound effect on taxpayer equity and folks' ability to pay. Act 60 was about equity for schools and for taxpayers, equal access to education funds for schools across the state, and equal tax burdens for equal per pupil spending. Three fourths of Vermonters could choose to pay their property taxes based on their income and not the value of their home. And towns could raise the same amount of funds for 1¢ of taxation, whether they were property rich or property poor towns. It remains to be seen with the return of the foundation formula and or spending mandates and caps and excess spending if we will continue to be able to provide equal access to education, financing and opportunity. But the promise of Act 60 of equal taxes for equal spending and basing your taxes on your ability to pay and not the value of your property will not be true for many Vermont taxpayers. Vermont has had income sensitivity for fifty six years now. Even before Act 60, Vermont provided income sensitivity for both municipal and education taxes for seniors and low income households. If you were below a certain amount of income, you could pay your property taxes based on your income and not the value of your property. The break on municipal taxes continued under Act 60, called the Super Circuit Breaker, for seniors and low income Vermonters under $47,000 of household income. When the circuit breaker was first implemented in 1970, it was only for seniors over 65, and then it was expanded a few years later to include low income folks as well as seniors, and the credit was delivered as a credit against your income tax liability and for an amount of property taxes that didn't exceed 7% of household income for both education and municipal taxes. And there was also 30% of allowable rent. The maximum credits were very low. There was a cap of $300 and an income cap of $4,200 Over the years, up until the passage of Act 60, the qualifying income limits changed, increasing for the most part, and the income percentages were adjusted for different income levels, but still sort of a combined six to 7% of household income for both education and municipal taxes. There were caps on the maximum rebates amounts that increased, but there's so many different iterations. What I include in the testimony that I passed is a couple of links to the historical documentation of how many changes there were with respect to income sensitivity since 1970. If you were over a certain age, it was prorated. Property tax relief was delivered in different ways. Reduction of income tax liability or rebate to the homeowner, direct payments to the town, bring us up just before act 60 in 1995, household income cash was raised to $47,000 where it stands now. And the maximum rebate increased to 1,500 Income sensitivity was expanded under Act 60. Act 60 that passed in 1997 and implemented in 1999 created a statewide property tax and expanded income sensitivity to those Vermonters above $47,000 and under $75,000 of household income. This allowed more Vermonters to pay for their education taxes based on their income. Across the state, equal per pupil expenditure locally voted on meant that an equal tax rate against your property value or an equal income tax rate. The legislation created a prebate system for homeowners under 75,000 for education and property tax relief and maintained the existing rebate system for property owners and renters with household incomes under $47,000 of household income. I think caps at that time on the amount were eliminated, but I'm not sure exactly when that happened and when they came back in. As they stand now, it's a cap of $8,000 total for education and municipal tax. Income sensitivity was determined on a prior year income and the House equalized value, and there was a flat 2% you would pay income for your education tax. But that was adjusted depending on what you spent over the 2% locally. The circuit breaker income percentage for those 47 was based on a sliding income percentage, anywhere from 1.5% of your income to 5%, depending on your income under $47,000 And that was for your total property taxes. The income eligibility for education taxes and the value of the house site that is income sensitized has changed since implementation, and subsequent laws were passed with adjustments. In 2010, the income eligibility was $90,000 and the cap on the house value that could be sensitized was $500,000. It is four now. Those households above 90 could see a reduction in education taxes, but on a reduced value, two fifty, two twenty five of house value. In 2018, the house site value eligible for adjustment was reduced to $400,000 and the homeowner rebate was split into education and municipal components with a cap of $2,400 for municipal and $5,600 for education taxes. Act 73 replaces income sensitivity with a homestead exemption. It moves from income sensitivity for education taxes to a homestead exemption. Although the exemptions are calculated based on your income, the household income, and depending what bracket you are in, it would exclude a certain portion of the home value from taxes. It is not the same as income sensitivity. These changes are going to go into effect in a few years, even before we know the effect of spending and tax rates and whether or not savings will be achieved through the restructuring bill. Act 73 does maintain a municipal tax credit for incomes under $47,000, set at 3% of income that a household is expected to pay for municipal taxes. But there has been no adjustment to qualifying income, and the cap of $2,400 remains, which does nothing to address the soaring increase in property values or rising municipal costs in many areas of the state. I'm speaking for the most part to low and moderate income taxpayers who live in towns with high property values and high municipal taxes, and they will continue to pay a higher percentage of their income for property taxes as they do now. Also, homeowners with same incomes but different house values in districts with the same per pupil spending will not pay the same taxes as intended under the original law. There has been no update of income sensitivity. We have reduced the equity among taxpayers because we haven't updated the income sensitivity at a time when property values have soared and affordable housing options are scarce. We have reduced the value of the house that is income sensitized from 500 to 400. We increased the qualifying income of those who could benefit from from sensitivity over the years, but did not increase the qualifying income who could receive a property tax credit for municipal taxes. That has remained at 47 for three decades now, and there is an $8,000 cap on the current property tax. Again, 5,600 for education, 2,400 for admissible. Even when there has been a buy down to reduce tax rates in the past few years, it has been an across the board buy down, and it has not been targeted to those who need it the most and need the most relief. I'm going to talk a little bit about the effects on caps on the tax credits. The effects of the caps on certain groups of people, especially lower income persons with property values over $400,000 even though their town income tax rate for financing might be 2.5% of their income and 3% for municipal taxes, they are often paying double that percentage for their property taxes because of the cap on the value of the house that is income sensitized and or the amount of credit that is allowed. Moderate and lower income Vermonters will continue to pay a higher percentage of the income than those with the most ability to pay. This is really, really tough for many, many seniors. Seniors are needing to age in place. There's no affordable or available downsizing options, and the market value of homes in many areas do not reflect a senior's ability to pay, and their equity is in the value of the house, not in an accessible bank account. Property values in the city of Burlington and Chittenden County and other parts of the state. This is just an example. A typical home in the South End Of Burlington has increased value from under $300,000 to over $500,000 This is pretty much the norm. Even though they have been adjusted for the CLA over the year, since the 2021 reappraisal, there has been a dramatic shift from commercial to residential and from some neighborhoods to another. So by law, when you do a reappraisal, you can't raise more money, but you can shift where that money comes from. And that's been a significant problem in the city because there was a real shift from commercial to residential. So although it's been adjusted over the years to reflect fair market value, that doesn't take into consideration the changes in where the money comes from within a town.

[Emilie Kornheiser (Chair)]: Hoping that's something that's really improved by the regional assessment district work that we did last year.

[Karen Lafayette]: Yeah, don't know exactly how that's going to work, but I'm interested to find out. I know that the Senate was also looking at regionalizing the value of the House for income sensitivity. But I don't know how that piece works.

[Emilie Kornheiser (Chair)]: We changed the procedure for property appraisals, so that it will be done regionally rather than town by town. And so it should create greater equity across the

[Karen Lafayette]: And that will affect the values of the houses that are income sensitized?

[Emilie Kornheiser (Chair)]: It'll address all property values so that there's more consistency between towns. It will not solve the problem of the fact that our residential property value has been growing and our non profit value has been decreasing. That's a-

[Karen Lafayette]: Different issue.

[Emilie Kornheiser (Chair)]: It's a very different issue.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: That's not

[Emilie Kornheiser (Chair)]: really a tax issue. It's more of a question of the state of the economy. Right.

[Maria Royal (Legislative Counsel)]: So,

[Karen Lafayette]: the property tax calculation I've used are based on the city of Burlington, and the rates over the past few years with no lag year taken into consideration and no statewide buy down of the tax rate. The summaries include the education and municipal tax combined to provide the total percentage of income some Vermonters are paying. And Burlington is very similar to many towns in Chittenden County and many towns in Windsor County and others that have those high property values. So this is an example, a house of $525,000 value. The municipal tax rate is $0.86 and that there is a tax credit for under $47,000 and you're expected to pay 3% of your household income. Education tax rate is 1.62 adjusted for the CLA. Household income rate on the education is, household income percentage is 2.5% on the first $400,000 of a house value. So taxes on a $525,000 house are total $13,020 That's $85.05 for education and $45.15 for municipal. And so I will submit this to you so I don't have to go through all the numbers. But bottom line, I looked at a person of $40,000 income and of $60,000 income under the current law without an update to income sensitivity and then under Act 73, how would work. I think my figures are correct, but Let's go check them. What it comes down to is this. A person of $40,000 income living in that house will pay 5.28% of income on their municipal taxes and 7.56% of income on their education taxes. That's a total of municipal and education tax rate is 12.85% of income, which is basically double what you would expect them to be paying. That's because of the caps. That's because of the household value that is income sensitized. And the eligibility comes into play with that as well. A person of $60,000 income, now they don't qualify for a municipal tax credit. So they're paying 7.52% of their income for municipal taxes, and they're paying 5.87% on education. So they have a total tax rate that's actually higher of income than the person at $40,000 of 13.39% of income. So when Act 73 passed, if you take those two taxpayer categories, a person that's $40,000 income, because remember now, they're going to get a break of anywhere from 95% to, I can't remember what it goes down to, the reduction in the household value. It doesn't matter in terms of what your income is. It's just a flat rate. So there's more cliffs created with that type of system. The person of $40,000 will pay 5.2 percent of municipal tax and 5.77% on the education tax. So there is a slight reduction from the current system, but only because we haven't updated income sensitivity. If you add $1,000 of income to that person, then they end up going up to, instead of paying 11.6% of their income, they end up paying 12.45% of their income. The person at $60,000 ends up paying 13.66% of their income. Under current law, that's what they pay. And if you add $1,000 more, they end up paying 14.57% of their combined income. So a lot of numbers, I know, but I just wanted to give you a sense. All the

[Emilie Kornheiser (Chair)]: numbers, it's nice to be able to see them.

[Maria Royal (Legislative Counsel)]: Can you send that? I am gonna submit it. You.

[Karen Lafayette]: Yes. I'm very sorry I didn't have it.

[Emilie Kornheiser (Chair)]: No, no, you don't need to apologize. Just wanna make sure that

[Karen Lafayette]: Yeah, no, I meant to, but I tend to, after I speak, I tend to wanna go back over because I know there's things that were, Oh, that wasn't right. So I kind of edit before I submit it. So in summary, without an update to the income sensitivity in the current law and without an adjustment to Act 73 as passed, true taxpayer equity will no longer exist, not only from town to town, but even among taxpayers within a town with the same incomes. In each of the above scenarios, the people that live in that $525,000 house are paying more than the intended percentage of income, which in this case would have been 3% of income for the municipal tax and then 2.5% of income for the education tax. Again, and that's because of the caps and the value of the house that's income sensitized. Currently, lower and moderate income homeowners would benefit from lower taxes, fairer taxes, by updating income sensitivity, especially in the interim before any of the new law goes into effect, whether under income sensitivity for both municipal and education property taxes, the current system, or under the new homestead exemption system for education in Act 60 for the education law. Increasing or eliminating the caps on the property tax credits to reflect more closely the intended percentage of income that is called for in statute or the income percentage voted on in a town to reflect the increased cost and growth of property values. Act act 73 is passed, the cap on the education property tax no longer exists because it's a straight exemption off the value of the property on the first $425,000 value. So that cap goes away. It's the value there that is income sensitized for people who live in a house over $425,000 of household income. I think on the joint fiscal chart, just to give you a sense, this is a specific situation for people that live in those over $500,000 houses. But I think the numbers, to Joint Fiscal and maybe they have some numbers when I counted it, looking at people under that income who live in the houses over $500,000 look to be somewhere around 2,500 or maybe more people. I don't know if they count them all. That was just one line on their chart that seemed to indicate these are the people who and I don't know how that was calculated. So that's something that maybe needs to be asked is how many people are in that situation. Number two, increase the income qualifying amount for the property tax credit. The $47,000 income qualifier has been the same for thirty years. Act 73 does call for looking at the upper income limit for education tax, but not at the lower income levels for the municipal tax or the credit income limit. I know the committee is I know the group that's meeting with joint fiscal to discuss this is looking at that. And I think there was a comment by one of the financial people that the $47,000 of income is comparable to like $108,000 in today's dollars. So that's something to look at. The other item to look at, the third item, is increasing the value of the house for the education tax calculation that is income sensitized or which the homestead exemption would be applied to under Act 73 to reflect the growth in property values and or adjust the values regionally to reflect the differences in areas of the state which you are doing. Although an update of the income sensitivity for both education and municipal taxes is more equitable and profitable, hopefully the legislature will reexamine changes in Act 60 on taxpayer equity and the homestead exemption and adjust as necessary to make them fairer. In the interim, income sensitivities should be updated. Instead of an across the board buy down of the tax rate, target reduction in education to those least able to pay. It is critical to look at the effect of the combined education and municipal taxes on low and moderate income housepayers as a percentage of the income. H. Nine forty nine is passed by the Senate. In the yield bill, the legislation uses a portion of the buy down funds to update the renter rebate by increasing the cap on the tax credit. Low and moderate income homeowners who live at high municipal property tax towns and whose values have increased dramatically over the past few years have been paying a much higher percentage of their income. But you could do with homeowners what the Senate did with the renter rebate is to consider increasing the property tax credit for the municipal property tax credit. Something you know, start it off, go up to 3,400 instead of 2,400. If anything, it would give you And what the Senate did with it, it's only for that one year. And the municipal tax credit is General Fund dollars. It's $17,000,000 right now.

[Emilie Kornheiser (Chair)]: So you're recommending that we increase the amount of the credit rather than the income threshold for the credit? Rather than? The threshold for the credit.

[Karen Lafayette]: There's three pieces. There's the house value that's income sensitized. There is the income qualifying, the $47,000 of household income. And there is the caps on the tax credit. So there's three pieces. Even if, let's say, you increase the house value that's income sensitized, you still had a $5,600 cap, it wouldn't help because once the person reaches that cap, they're cut off. The municipal municipal taxes, the house value doesn't come into play in terms of what's income sensitized, just straight what your income is or so. So, by increasing the cap, you do help municipal tax owners. It's gonna be one moment.

[Emilie Kornheiser (Chair)]: Perfect, it's just gonna be one moment. Okay. Thank you.

[Karen Lafayette]: Those are the three pieces. Think by doing something like that, even if it's only for one year, just to judge how many people would take advantage of it and what that would cost. Because I don't think we have any idea. But it seems to be terrifically unfair for the lowest income people to be paying the highest percentage of their income. We have always allowed higher income earners to pay based on the tax rate because that's always been lower than what an income sensitized version would be or something like that. But we don't allow that same choice to low income earners.

[Emilie Kornheiser (Chair)]: Representative Ode, and then we're gonna hear from Joint Fiscal after we do this other bill.

[Carol Ode (Member)]: I've heard the idea in the building that maybe the benefits that people get with current use and with rebates and so forth could become a lien against the property. So there'd be help all the way along the way, then

[Karen Lafayette]: You mean a deferment, a tax deferment?

[Emilie Kornheiser (Chair)]: I think the tax firm brought that to us as an idea last year, actually, and we rejected Okay,

[Carol Ode (Member)]: well, I'd like to know what you think about that, because I'm-

[Karen Lafayette]: The one problem with the tax deferment is and they do use it in other states and that that would be where you don't pay your taxes, you defer it. And then the house gets sold, gets paid back or something like that. A lot of seniors now, because they've lived in their houses for a long, long time and there's no affordable places to go, they're having to resort to doing a reverse mortgage. And I don't think you can do a deferment when you have a reverse mortgage.

[Carol Ode (Member)]: It's not saying a deferment of your property taxes. Okay. Anyway, I'm saying whatever the benefit is that you are getting to help you pay property taxes, at those amounts, that's what I understood the idea, not the one from the tax department. I'm not sure what that idea was the problem. But that you would, it's not tax permits, if you were helped to the tune of $2,800 that goes onto land records as a lien against the property when you sell it. I think

[Karen Lafayette]: that would still interplay with

[Emilie Kornheiser (Chair)]: reverse mortgage. Reverse mortgage might have the

[Carol Ode (Member)]: first lien, and a second could be better.

[Karen Lafayette]: I'm not a financial expert, but I know people have discussed that.

[Carol Ode (Member)]: And just I wondering if you have a reaction to that.

[Maria Royal (Legislative Counsel)]: I guess

[Karen Lafayette]: my reaction is this: It all depends on whether you really want to align property taxes like people do their income taxes based on your ability to pay. It seems unreasonable for me that you're taking that step when you could just simply align property taxes with income sensitivity, with your ability to pay.

[Emilie Kornheiser (Chair)]: Thank you. And I think we need to keep our focus on things that are germane to the committee of conference for now. Mean, I have heard a discussion. So I guess next year can be exciting. Karen, thank you so much for joining us today. Really appreciate it so much.

[Karen Lafayette]: I'll submit that opportunity and get your focus on this,

[Emilie Kornheiser (Chair)]: and I am hopeful that maybe we can

[Karen Lafayette]: Have you discussed at all what the Senate did with the renter rebate?

[Emilie Kornheiser (Chair)]: We're doing that right after this. Right after this and then that. Thank you so much. Thank you. So we're gonna stop thinking about the Education Fund for five minutes. That's an exaggeration. It'll be about forty five minutes. And we are gonna talk about H648. Representative Olson, if you wanna join us, please, has an amendment to that bill that I believe the Commerce Committee found favorable. And then Maria and Pat and Department of Financial Regulation are gonna talk us through it as well. Hi.

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: Good morning, good So, yes, the H six forty eight is part of a really long bill, but mostly very technical stuff, making changes to the laws concerning banking. You know, the Department of Financial Regulation regulates banks, credit unions, insurance companies, securities, a whole bunch of stuff. The Senate proposals of amendment had four. Three of them were very just technical, a cross reference here, whatever. There was one provision in that bill that proposed to expand the moratorium on what I call crypto kiosk. And so they proposed that. It came into the Commerce Committee after they did their work, and we considered the technical changes, thought that was good. We had two further proposals of amendment. The first had to do with going beyond the extension of the moratorium on cryptocurrency, and instead, ultimately, a majority of the committee said, These devices are too much of a threat to our seniors, to law enforcement in terms of illicit activities, and following in line with a few other states who are reconsidering the regulatory approach, saying, It's just not worth The benefits in terms of commerce and terms of individuals just don't outweigh what the majority ultimately viewed was an inherently dangerous activity. So, there's a first proposal of amendment and a second. The first proposal of amendment would propose after July, to ban these devices as not promoting the public good of the state. I can go on to the second proposal amendment, if you wish.

[Emilie Kornheiser (Chair)]: Oh, sure. I mean, I think the first proposal is why you're here,

[Karen Lafayette]: but what's the second proposal?

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: Well, I just came in because your good assistant told me to come.

[Patrick Titterton (Joint Fiscal Office)]: Thought

[Emilie Kornheiser (Chair)]: No, what does it tell us? What's the second proposal amendment? Thank you.

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: So, second? Yeah, thank Yeah, the second proposal amendment, since the time that committee's, the Congress committee's work went over to the Senate, there were increasingly a new phenomena that unlicensed lenders are offering credit to small businesses. And, they do so in a way that not all of them, but certainly a lot of them are doing so in a way that the small business owner just they don't know what they're getting. They need some capital right away. There's really very little in the way of disclosure. There are issues around the interest rates and terms, things like that. So, we decided to replicate, I guess. We have a licensed lender statute in the books, which involve lenders that aren't banks, credit unions, that kind of thing, but they loan to individuals, mainly because the individual might not have the credit scores and risks suitable for the banks to really take that on. So, they are a little bit out there, but it was pretty much determined that they should be permitted to exist, but under some regulatory structure. So, that's on licensed lenders for personal loans. In terms of what we're adding in the second proposal of amendment is really kind of to duplicate, I call it regulation light, but it's to duplicate that structure that we use for licensed lenders for personal loans and also included for these commercial transactions. Again, it's for smaller businesses. We're talking about folks lending under a million dollars. I mean, it sounds like a lot, but it's not all that much. That's the same threshold for the licensed lender statute. And really, the framework is very similar, of keying into some of the usury rates, a fairly long list, not a long list, You gotta have notice. So, the business owner, there is an example of a landscaper doing work and needed some capital. And they accepted the terms of this lending opportunity without really understanding what the landscape was getting into. This would require the notice and really kind of duplicate that. We actually didn't get into the fee issue, but I know Joe Delaney with the Department of Financial Regulation is here. My understanding that it really kind of duplicates what we do in the license lender sphere, and that there really isn't any change in structure, but that's for you to talk about with, I think, as far as some actuators.

[Emilie Kornheiser (Chair)]: Thank you. Any questions? Thanks for coming in. Really quick.

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: Well, always enjoy it coming up into the rarefied air. If it's okay-

[Carol Ode (Member)]: It's certainly thinner.

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: Yeah, I struggle with it. I should probably go down to my committee, but Joy, thank you. Your assistant has my number.

[Emilie Kornheiser (Chair)]: Yes. Thank

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: you. Thanks very much.

[Carol Ode (Member)]: Thank you. Nice to see you, Maria. It's been a while. It's so nice to be

[Maria Royal (Legislative Counsel)]: back in this committee room. Maria Royal, legislative counsel. Herb did a great job explaining the two substantive proposals. Do you want me to share my screen and access the document?

[Emilie Kornheiser (Chair)]: Okay.

[Maria Royal (Legislative Counsel)]: Okay, great. So, yes, the DFR, annual DFR bill, banking insurance securities, passed the House, went to the Senate. They came back with mostly technical amendments. One substantive proposal about these virtual currency kiosks, or crypto kiosks, and their proposal was to extend the existing moratoriums on new kiosks for another year. The current moratorium would have ended this July. So commerce reconsidered the whole industry, the good and the bad, related to these ATM like machines, and ultimately decided to just prohibit them altogether.

[Unidentified committee member (Ways & Means)]: Prohibit them altogether or prohibit new

[Maria Royal (Legislative Counsel)]: ones being licensed? Prohibit all of them. So there are currently two kiosks. I just

[Emilie Kornheiser (Chair)]: heard that yesterday, but it

[Maria Royal (Legislative Counsel)]: was in Brattleboro. In the state, one in Brattleboro. Think the other one's in Willesden, maybe? SXV? SXV? SXV extension. Thank you. Yeah, so there are only two. And their registrations would terminate on July 1. So the first three instances of amendment are really just conforming amendments to that prohibition. It's a lot of strike through of existing law. What is left, though, in terms of substantive language sorry for all the scrolling but what the department wanted to do is to retain some oversight over the existing entities to make sure that they maintain all of their records. So there's a records retention, at least until 2031. So if there are any problems with past transactions, there would be records, so there could be refunds if necessary, so just continuing oversight to the extent necessary. And then to the extent if there are any violations, if there are transactions that do occur, they don't shut down immediately, there's just a provision proposing penalties for violations. So there's some residual department oversight. And so that's pretty much it with respect to the crypto kiosks. And then the second

[Unidentified committee member (Ways & Means)]: Before you go on?

[Maria Royal (Legislative Counsel)]: Yeah, sure.

[Unidentified committee member (Ways & Means)]: I remember being on Commerce when we put this authorization in place for crypto kiosks. So how long ago was that? Was that four years ago?

[Maria Royal (Legislative Counsel)]: Think it was in 2024. It wasn't that long ago. I think it was only a couple of years ago, where you had the initial moratorium and regulations, and then you, last year, enacted additional consumer protections, extended the moratorium a year. So there was an attempt to try to mitigate some of the concerns about their usage. So there's two things, we get rid of both the kiosks, they're no longer functioning, and we hang on to the records for some number of years in case there's fraudulent or problems. I think it's one outfit, Point Flip, that owns both of the kiosks, they do business internationally, so they would be required to retain any transaction related information. So just those two things, all Section one does. Correct. Representative? Here,

[Carol Ode (Member)]: can you tell us what the real issue is around those kiosks? I think we're gonna hear from DFR,

[Emilie Kornheiser (Chair)]: and we can hear from AARP as well, etcetera. Great. Yeah, sure. If they consent.

[Maria Royal (Legislative Counsel)]: And BFR did, there was a report, there was, well, I just think I asked for them to do a study on crypto kiosk, what the issues, concerns are, so very familiar with their impact on communities.

[Emilie Kornheiser (Chair)]: And then the second one? So the second one,

[Maria Royal (Legislative Counsel)]: there's just one instance of amendment. Actually, maybe two. Which just starts on page 19. And as Herb mentioned, these are new licensing and regulation requirements that apply to non traditional commercial financing, sometimes called merchant cash advances. So if a company is trying to bridge the gap, they don't have enough money to pay their bills, they can't get a traditional loan, either they don't have the credit history or it's going to take too long, Their business doesn't have the history to demonstrate that they can meet the payments of a loan. They might go to a nontraditional lender who is willing to give them the money up front in return for some of their earnings. So they either get a percentage of sales, or they get paid back based on a schedule of the business, or they take over any of the invoices, basically, the receivables. So there are two different mechanisms that are referred to here. So because this kind of lending arrangement is considered not really a loan, but a purchase of assets almost. That's why it doesn't fall under the existing license. So the proposal here is to say, no, no, we want you to comply with similar provisions of existing loan.

[Patrick Titterton (Joint Fiscal Office)]: Almost sounds like little shark type business.

[Maria Royal (Legislative Counsel)]: Maybe not my words, but you raise the point that there can be instances So the company itself is taking on a higher risk because it's completely dependent upon the revenue coming in. There isn't really necessarily collateral or security. But in exchange, they have higher interest fees, so on. And so depending on the desperation of the situation, there may be opportunities for predatory life And I think that's part of the concern. Not necessarily, I'm not disparaging in industry, but concerns that could arise, and so wanting to protect businesses and have some oversight. So there's new license requirements. I don't know whether other fees, maybe examination fees of these entities. I don't know how many entities. I think the department give you more information about that. But also a lot of it is you have to be licensed if you're actually the lender. Disclosures, really specific disclosures about all of the associated fees, so that the company knows what it's going to be charged. So just a lot of consumer disclosures, and prohibiting certain particularly bad conduct. So that's really Oh, the one other thing I will mention, this particular section on the new licensing doesn't take effect until 2027. And part of that is because the Department wanted a little more time to think about what kind of rules they would adopt to implement and enforce. So this language includes a provision where they can initiate the rulemaking process before 2027. But if they move far along in that process, those rules don't take effect until 2027. So it's kind of their discretion at the pace they want to move. Very welcome. Windsor Mesland.

[James Masland (Member)]: Yeah, two part question. Do the fees associated with this compare well with other states?

[Emilie Kornheiser (Chair)]: We'll hear from the Postal Office staff about that.

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: Okay, let me try the other part of

[James Masland (Member)]: the question, which is more in your it may sound kind of askance to compare this with

[Maria Royal (Legislative Counsel)]: JJ Wenders?

[James Masland (Member)]: No, I'm off on the deep edge, but I'll come back and schedule that again.

[Maria Royal (Legislative Counsel)]: Okay.

[James Masland (Member)]: I'll come back in a minute. Sure. I need to bring it back up.

[Maria Royal (Legislative Counsel)]: Anytime. I'm around. Although I do actually have to leave to walk around. I'll be around, but you know where to find me.

[Emilie Kornheiser (Chair)]: Thank you very much, Maria. I appreciate that. You're next up. Thank you.

[Patrick Titterton (Joint Fiscal Office)]: My name is Patrick Tickerton with

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: the Joint Fiscal Office. Patrick.

[Unidentified committee member (Ways & Means)]: Patrick Tips one, I have to open with the other.

[Patrick Titterton (Joint Fiscal Office)]: I think I'll probably be pretty quick. These are actually the first two provisions of the bill that we have identified as having any fiscal impact in the greater bill. It is still very overall technical bill, But there's the two provisions in here that do have some effect on fees. As you heard with the virtual currency operators, there is currently one. They have two kiosks. They're currently subject to a $1,000 annual renewal fee for their license. So with the prohibition, dollars 1,000 would not be being collected.

[Emilie Kornheiser (Chair)]: What are we going to do?

[Patrick Titterton (Joint Fiscal Office)]: I think you'll have

[Unidentified committee member (Ways & Means)]: to ask DFR that.

[Patrick Titterton (Joint Fiscal Office)]: And of course, with that comes any sort of resources on the administrative side of things that DFR has to put towards regulating that space, its bans. That's probably not there. And the second piece has to do with this commercial financing. These operators Currently, they're not really in the fold as being required to be licensed to do what they do. Bringing them in like this will will subject them to the licensed lender fee, which is $1,000 annually. How many? It's a really good question. How many operators are out

[Unidentified committee member (Ways & Means)]: there that are going to

[Patrick Titterton (Joint Fiscal Office)]: be subject to this? If R and I were communicating a little bit yesterday and there's really a lot of uncertainty of how many would choose to continue operating here and start paying this fee. Just sort of talking a little bit with Ted yesterday, thinking maybe like four digits, five digits in terms of dollars. We're talking about thousands of dollars. Just for context, both these fees do go into the financial institution supervision fund, which GFR uses to fund their regulatory work. And we're talking in the context of thousands of dollars here. I think the overall fund in general collects about 4,000,000 a year. Correct me if the magnitude of that statement is wrong, but we're talking really about a sort of overall small impact in the overall scope of what's in the fund. Think I know the answer to the question about other states, but I don't want to be incorrect. So I think I might defer that if DFR has any comments on how we Thank you.

[Emilie Kornheiser (Chair)]: And if not, can you send us a follow-up? Sure. Any questions for Pat?

[Unidentified committee member (Ways & Means)]: So just a second, maybe $1,000 worth of foregone revenue, the first unpredictable licensing revenue side.

[Patrick Titterton (Joint Fiscal Office)]: Yeah, so down 1,000 and one, up of 2,000 and the other.

[Maria Royal (Legislative Counsel)]: Just so I'm clear, that means no fiscal one will be prepared for this or

[Herb Olsen (Legislative Counsel, Office of Legislative Counsel)]: I suppose we

[Maria Royal (Legislative Counsel)]: could. I'm not posing one, I'm just saying that I was a reporter of the bill originally, and if I get asked on the floor, Yeah,

[Carol Ode (Member)]: But just in case, I just need

[Patrick Titterton (Joint Fiscal Office)]: And you can certainly put that in writing, if

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: not a full fiscal note.

[Emilie Kornheiser (Chair)]: What would you Yeah, if you wanted to send an email, that's great.

[Patrick Titterton (Joint Fiscal Office)]: Sure, I would love to send that. Was

[Emilie Kornheiser (Chair)]: there a fiscal note for the original bill?

[Patrick Titterton (Joint Fiscal Office)]: No, because there was no fiscal impact in any of the press. Thank you.

[Emilie Kornheiser (Chair)]: Thanks for joining us. Good

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: morning. Joe Valenti, Director of Policy at the Department of Financial Regulation. First time in this committee, so I'm pleased welcome And you I've been at DFR for just about a year. I was previously working for a federal regulator prior to state service.

[Carol Ode (Member)]: We're happy to have you with state service.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Thank you. I would concur with everything that's been said. We see a very modest fiscal impact in FY twenty seven from the one kiosk operator leaving the market. There would be some additional fees coming in as merchant cash advance providers would seek a license. That license does go into effect 07/01/2027. So we may see some of those dollars falling in the next fiscal year. I would also agree we don't know how many would enter. In general, the provision is really geared toward getting these financing providers within the scope of DFR, and there aren't a ton of substantive provisions on what they do, but they would be under our authority. They would need to provide the appropriate loan disclosures. They would need to estimate an APR, an annual percentage rate on that loan, and basically follow everything that any lender operating in the state would need to do. I can get into some of the policy reasons that were discussed around the kiosks, if that's helpful. So unless you have a question.

[Maria Royal (Legislative Counsel)]: Go ahead.

[Emilie Kornheiser (Chair)]: Okay. So this

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: was a policy decision that we left open to the legislature. As was stated previously, we had the initial regulation of kiosks a few years ago, and there was a report that DFR had done on kiosks and some of the challenges that have been seen in this market. And just last year, in Act 23, which was our housekeeping bill, we enacted a wide range of consumer protections, refund requirements, disclosures for the use of these kiosks, and we also extended the moratorium one more year. At the beginning of this session, we had only really six months of experience with the kiosks. We didn't know at the time that we were drafting the bill where that was headed, and so we had waited on making a decision there. By the time that the bill had crossed over to senate finance, we had seen greater attention being paid to this issue nationwide. We've had just this year alone, we've had three states that have opted to ban the kiosks entirely, and not necessarily three that you would expect. It was Indiana, followed by Tennessee, and then Minnesota earlier this month. This is all between March and present day. And so we were concerned with the moratorium expiring at the June. We could see an influx of new operators into this market. We didn't know what the effects would be, and so we gave Senate Finance the choice. Do Do you want to extend the moratorium another year? Give us more time to see what's going on in this market, or do you want to consider a ban? I think in the interest of time, they decided to extend the moratorium. House commerce, when the bill came back there, was more interested in, pursuing a ban. They took testimony on that on Tuesday of this week. With regard to the merchant cash advances, this was something that economists have requested that we look into. There was an NPR story back in February. I believe that businesses were being targeted to take out these loans in part to pay their tariff obligations. Going back to the kiosks for a minute, why have states been looking to ban them? As I said, we see we have two kiosks remaining. I think the estimate prior to the moratorium was more on the order of 70. It's not a lot of activity. We estimate that it's a fraction of 1% of the crypto transactions that are taking place in Vermont are taking place at these kiosks. These kiosks are where someone can buy crypto by inserting cash into an ATM. Some of them have cash out provisions as well. Some of them where you can sell crypto. Some of them do not. It's not something that is very widely used. The reason why this has been an issue in multiple states is that it has been seen as a vector for fraud, that you have a scammer who is looking to prey on someone and take their money and will will call them or email, text, and present a scenario where they are in danger if they don't pay a given amount of money or someone close to them is in danger, and the method that they're encouraged to use to resolve this issue is to take cash to one of these kiosks and put it in the ATM, and then it ends up going sort of who knows where. So there there have been issues in a number of states. There have been exposes of these in the media. We wanted to leave that decision up to the committee again about the moratorium or a ban, but we do not feel that if the two kiosks were to go away, that Vermonters would be deprived of a necessary product or service, and it may reduce the likelihood of fraud.

[Unidentified committee member (Ways & Means)]: With those kiosks then, someone could deposit cash and put it in somebody else's crypto account. That's what Okay. Not their own crypto account. And

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: there are lots of ways that someone could buy or sell crypto. It's an unusual way for someone to do it with a cash transaction in person.

[Unidentified committee member (Ways & Means)]: Right there at the bottom.

[Emilie Kornheiser (Chair)]: Representative Masland?

[James Masland (Member)]: Yeah. Thanks. Thank you. You're welcome. In addition to the careful consideration to the bill, I've, for some time, been quite skeptical that crypto is necessarily real. It you got you don't need to comment on that, but there's some the hocus pocus about how it's generated, where it comes from, it's concerned me for some period of time. I don't know if that opposite comment makes sense to you, but we can come back to it. But there's there's there's I've long been let's just summarize. Long been skeptical of cryptocurrency for a number of reasons, Particularly, some people say this is the way for the future, and others say, Jesus, not so sure. So that's all. Thank you.

[Emilie Kornheiser (Chair)]: Just to follow-up on that question, I'm curious, you said that about, I think, 7% is through these kiosks. What are the other ways that it's trading? Oh, it's a

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: fraction of 1%.

[Emilie Kornheiser (Chair)]: Fraction of 1%. So sorry.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: And and that is an estimate of sort of all so we don't we don't follow all crypto activity, but we do follow crypto activity that takes place through money transmitters. And so if you were exchanging cash for crypto with any of the various online services out there, those companies are required to have a money transmitter license in Vermont just as a kiosk operator does. Those would still be able those would still be able to operate. It's just the in person virtual currency kiosks that that would be addressed by this bill.

[Maria Royal (Legislative Counsel)]: Thank you. Representative Jones?

[Carol Ode (Member)]: I just have a quick question that has to do with the records retention. What are the merits of having the company retain the merits versus having them transferred to the state at the time they closed? I assume they're digital.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: They are digital records. I believe the idea would be that someone could still after the moratorium goes into effect, someone could still request a refund, or if it appeared that an entity were still operating in violation, that

[Colin Hilliard (Advocacy Director, AARP Vermont)]: we would be able to

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: be able to appropriately enforce.

[Emilie Kornheiser (Chair)]: Thank you so much for joining us.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Sure. Anything on merchant cash advances that would be

[Emilie Kornheiser (Chair)]: helpful? Thanks. You're welcome to say anything that you want to.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: I would just say, as was said previously, it's sort of an undefined market in terms of volume. I had seen a statistic this morning that it was about 8% of small businesses nationwide were seeking to use this form of financing. We're just trying to get a better handle on what is going on and to ensure that people who are taking this out would have all of the appropriate disclosures and an estimated APR to get a sense of what the cost of that credit was.

[Emilie Kornheiser (Chair)]: And do you anticipate that the revenue, very minor revenue loss, would have any impact on your operations? No. I guess my other question is,

[Maria Royal (Legislative Counsel)]: how will you track these operators down and get them to comply with Brexit? It seems like they're operating under the table. Would it just be because people report to you that they've had some contact with police? So there are a couple

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: of them. One is that we are not the first state to look at some type of licensing or regulation for merchant cash advances. Our language is based on laws that had been passed in three other states. If I recall, it's Virginia, Texas, and New York. And so, we would have a sense if someone came to us or came to one of you and said, Hey, I'm in this financing arrangement that's crippling my business. We could look and we could see if the entity has a valid lender license or not. Currently, because these are very much marketed and labeled as not being loans and they're outside of our authority, we aren't able to take action. Think the other possibility is we do hear about in our partnerships with other state regulators around the country, we may hear about various operators and try to get a sense of whether they're operating in Vermont or not.

[Emilie Kornheiser (Chair)]: Thank you. Thanks so much. Because

[Unidentified committee member (Ways & Means)]: factoring is a perfectly established method of financing receivables with commercial banks, but you're saying if they're not licensed, that's the issue.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Right. And in some cases, they are relying not on receivables but on the actual receipts. Sometimes it's integrated into the payment processing so the business owner isn't actually they're they're making sales, but they're not actually getting those funds and paying back the obligation. It's being taken beforehand. It's an emerging market. It may have benefits for some customers, but we just want to have a better understanding, and we think that small business owners should have a better understanding of what's going on as well.

[Emilie Kornheiser (Chair)]: Representative Masland.

[James Masland (Member)]: Yeah, thank you. Is there any trend in The US that crypto market folks actually enjoy oversight by states

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: to establish legitimacy of what they're doing? So there are different states that have taken different approaches, I think, and there are In fact, I think today, there is federal legislation being debated to look at the oversight of these products. Mean, are all different debates going on about whether this belongs with the states or the federal government or a combination, but it is something where we have seen interest and oversight at both the state and federal level.

[Emilie Kornheiser (Chair)]: Thanks. Thank you so much for coming in. Really appreciate it. Colin, do you want to join us? You're welcome to.

[Colin Hilliard (Advocacy Director, AARP Vermont)]: Happy to. Okay. Thank you. Appreciate it. Good morning. Colin Hilliard, Advocacy Director for AARP Vermont. I appreciate the opportunity to just speak a little bit about the crypto kiosk portion and the ban proposed. ARP is very supportive of that. We've seen the fraud perpetrated through these machines really increase drastically in the last couple of years. Just to give you a couple of numbers from the FBI's Internet Crime Complete Center annual report, and you have a copy of this in your inboxes as well. In 2025, the most recent data here that just came out about a month ago

[Patrick Titterton (Joint Fiscal Office)]: Can you

[Carol Ode (Member)]: speak slightly more slowly?

[James Masland (Member)]: Yeah. Thank you.

[Colin Hilliard (Advocacy Director, AARP Vermont)]: The FBI saw $389,000,000 in losses in 2025 alone of cryptocurrency related scams. 200 and Nationwide. Nationwide. And we expect that to be vastly underreported as well. We know a lot of folks feel embarrassed. They're scared maybe still of, you know, having gone through this experience and don't wanna report, and also oftentimes don't know who to report to. These kiosks are often located in a gas station or a mini mart. And so we the congress committee heard testimony actually on Tuesday from Waterbury business owner, who their first response upon being a victim of a scam was to call the gas station. The gas station just leases that space, and they don't know how to help that person recover their money or report it. So that data never flows up to DFR, the attorney general's office. These scams are often widely underreported. Why does AARP feel that this is so important? For folks 60, of that $389,000,000 they accounted for $257,000,000 of those losses. Older folks are disproportionately targeted in these scams and also have the most to lose. They have a lifetime of savings to lose, right? That's not to say that people of all ages, of course, can't fall victim to these scams. Just additionally, I wanted to highlight some other kind of federal and notices and attorneys general's investigation. FinCEN, the Treasury Department's Financial Crimes Division, they issued a notice last year as well that talked a little bit about how these are increasingly being used in money laundering, and the DEA is aware of them being a vehicle for cartel

[Unidentified committee member (Ways & Means)]: laundering as well.

[Colin Hilliard (Advocacy Director, AARP Vermont)]: Attorneys general in five states have launched investigations that have found that each of those investigations found that the majority of the money flowing through these machines was due to fraudulent activity, as high as over 90% in some states. Feel that when AARP's been working on this for the past couple of years in a number of states, 29 states have passed legislation, including 11 this year, and of those 11 this year, three passed bans. When this first came out, we were very open to working with industry and passing reasonable consumer protections. I think the scale of the growth in losses to consumers across the country has really shown that it's not a matter of if It's a question of can consumer protections every year keep pace with the fraud and the risk that fraud perpetrated through these machines presents. I think, just to respond to a question earlier too, does it go into someone else's crypto wallet? And essentially, that is how this works. Government impersonation, romance scam, all sorts of different things, will go to one of these machines and put in money and it can be thousands of dollars. We do have transaction limits in the state of $2,000 a day for new customers, 5,000 for existing customers. Oftentimes, scammers will get around that new customer safeguard by opening a crypto wallet in their name, and they'll go in and there'll be an existing customer and they can lose $5,000 up in a single day. And so it's also hard to reverse these transactions. And oftentimes too, it may take months for someone to know that they've been a victim of a scam, an investment scam, where they get sent a fake link that shows that their investment is going up, and they keep telling them to put in more and more money, and then one day poof, it's all gone. I think that's really it for me, but I'm happy to take any questions on this. We're working on relation similar in a number of states phenomenon.

[Emilie Kornheiser (Chair)]: Thank you, and I know that you sent that in. We have that posted on our committee page, so really appreciate you being here.

[Colin Hilliard (Advocacy Director, AARP Vermont)]: Thank you, appreciate it.

[Carol Ode (Member)]: Do you have anything where in Brattleboro is the one?

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: I don't know of that. The one at XX Junction is at a liquor store right next to the Amtrak station.

[Emilie Kornheiser (Chair)]: I knew that. I heard that, but

[Unidentified committee member (Ways & Means)]: I don't know.

[Emilie Kornheiser (Chair)]: Okay. Like in non op hand, could you find out and tell me? Sure. Thanks. Okay.

[Carol Ode (Member)]: Thank you, everyone. Whitney, you'd be curious for what Yeah, your town market

[Emilie Kornheiser (Chair)]: that's definitely I've never even bought a lottery ticket, Mark. Yeah, the good drive away. Okay, we're gonna go back to Yield Building. Oh, we have to No, straw poll. That's the next step. Thanks. Let's do a straw poll on the amendment. All those in favor of accepting it? All those opposed?

[Carol Ode (Member)]: Straw poll is eleven-zero-zero in favor of the amendment. Thanks.

[Emilie Kornheiser (Chair)]: Let's take a break. Doesn't that sound nice? And be back here at 10:28.