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[Andrew Perchlik (Chair)]: Whatever where everybody else is. No
[Al (Committee Assistant)]: We are live.
[Andrew Perchlik (Chair)]: Okay. We're live. Senate appropriations. It's February 27. We are taking up some bills and taking a break from our budget presentation. We have s one seventy three and senator Keisha Ramhunsdale under the bill and we'll hear alleged counsel.
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: Thank you. For the record, Senator Pedro Hinsdale representing our work on Senate Bill 173 from Economic Development Housing and General Affairs might have also been the lead sponsor. I can't remember why I was uniquely invited. I don't even remember who's reporting it. Senator It's Senator Weeks, but here I am. And we often try to do kind of a miscellaneous labor bill. We aren't a money committee but we do watch the health of the unemployment insurance trust fund and the health of our workers' comp insurance system And, you know, we try to also look at issues that arise in some number that it's worth taking another look at whether or not people are if the system is healthy and working and people are getting the services that they're entitled to or their payments on time was a big issue last year. So on some level, you know, the first part of the bill could have some financial impact to the employer community, and that meant we had a robust discussion about it and we think it will achieve something, is to try and make sure people know of their right to access vocational rehabilitation more proactively. So that's kind of the first part of the bill, and that led us to looking at what's happening with Voc Rehab. They've lost some funds in various programs that serve Vermonter's hireability and others. They, you know, have some thoughts on how to make sure that people are, that our workers' comp system is working sufficiently and that they have the support they need to continue providing sustainable voc rehab services across the state. It's just kind of a dwindling resource, but we know that when someone does get voc rehab, they're able to reenter the workforce more quickly or get a decently paying job if they have to completely switch career paths. So you know that my chair loves a good study committee so for a task force maybe it's a working group. So It's a working it sounds like it's a small amount in terms of having one or two members that would not otherwise be doing it as part of their professional duties and would need a per DEA.
[Michael O’Grady (Office of Legislative Counsel)]: It could
[Andrew Perchlik (Chair)]: be maybe the members that are Appointed. The claimants they might be needing it.
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: Yeah. So we did the we did an interesting I think this was Sophie's suggestion that we have the Director of Workers' Compensation who's a governor's employee, and then we have two representatives from each of three categories and so the thought was the cleanest way to do that is to have each appointment come one from the House, one from the Committee on Committees for claimants, for insurance carriers and employers, and actual voc rehabilitation counselors who I think get lost in the conversation but are now feeling like they need to have a voice in making sure the system works and workers' comp essentially is supposed to be designed to rehabilitate someone. And vocational rehabilitation isn't something we've taken a hard look at in a while on committee.
[Andrew Perchlik (Chair)]: Okay. And there's no limit. Sometimes we have a limit on the number of meetings, so that's not a thing here. Did you guys talk about that?
[Abby Shepherd (Office of Legislative Counsel)]: It's five.
[Andrew Perchlik (Chair)]: Oh, it is five?
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: Yeah. I was like, don't have a discussion on it.
[Michael O’Grady (Office of Legislative Counsel)]: It's in
[Andrew Perchlik (Chair)]: the fiscal
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: Meetings.
[Unknown committee member (senator)]: I see the report.
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: Hopefully, think you could be right.
[Andrew Perchlik (Chair)]: Don't know I know it's in g at the very end.
[Abby Shepherd (Office of Legislative Counsel)]: Okay.
[Andrew Perchlik (Chair)]: For not more. They can meet more than five times, but they just only get paid for not more.
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: So Right.
[Andrew Perchlik (Chair)]: So that limits working to spend money.
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: So, I mean, this this bill has passed separately from our other bills. I imagine you'll strip out the
[Andrew Perchlik (Chair)]: I think for this, let me
[Kesha Ram Hinsdale (Chair, Senate Economic Development, Housing & General Affairs)]: You feel
[Andrew Perchlik (Chair)]: Okay. Testimony from the Department of Labor that can put this into their regular working budgets,
[Unknown staff (DFR or committee)]: and there's not really an appropriation that we need to pull out.
[Al (Committee Assistant)]: Yeah, so if you're going to hear from Dirk, then any questions? No,
[Andrew Perchlik (Chair)]: no, I
[Unknown committee member (senator)]: don't have any questions.
[Andrew Perchlik (Chair)]: Do you want to state your name for the record and just say what you told us
[Unknown committee member (senator)]: before we went live? Sure. Thank
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: you, mister chair. Dirk Anderson, director of workers compensation Vermont Department of Labor. The working group consisting as it does of a few members from the public are gonna be entitled to per diem and potentially mileage if they attend in person. Those are relatively minor costs that I can absorb into my budget, you know, a few thousand dollars at the most, maybe less than 1,000. So I do not have any objection to to to a lack of
[Unknown committee member (senator)]: a lack of another funding.
[Andrew Perchlik (Chair)]: And the Department of Labor was supportive of a working group instead of just being having the department do this work on
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: their own? Are supportive of the working group. We are primarily supportive of the underlying positive action that the bill takes in eliminating the initial screening workers' comp claimants for voc rehab because that's an extra step that workers sometimes get lost in the shuffle in. So that was our initial support of the bill. The working group got added. We did not
[Unknown committee member (senator)]: object to that. We can pay for it. So yes, I have support.
[Andrew Perchlik (Chair)]: Okay. Well, thanks for being here. Any other comments or questions? Does councilors that we have any comments or anything you wanna point out that we might have missed or important for us to know?
[Abby Shepherd (Office of Legislative Counsel)]: Good afternoon. It was at at me for the office of legislative council. Yeah. So I think most of this has been covered. So it originally, this was really dealing with vocational rehabilitation and removing the initial screening and then providing some other additional changes, but just to make sure that workers were informed of their right and that if their carrier, their employer's carrier does not recommend them for a full assessment, then they can move forward with requesting vocational rehabilitation services. In the course of the testimony in front of Senate Economic Development, it was clear there are other other issues with vocational rehabilitation services. And so at that point, Senate Economic Development thought that perhaps a working group to do a deeper dive and then come back with possible legislative recommendations down the road would be helpful. So the goal is really a summer committee well, full committee perhaps, meet starting in August, having a report in December up to five meetings. It's reimbursement of expenses, not per diem. So it'd be a bit cheaper for you.
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: Right.
[Abby Shepherd (Office of Legislative Counsel)]: And so that was that was the goal was, you know, this was a fix to help address a problem right now, but there was a sense that there was more work that needs doing that could be done. And there was language added in, so there's a list of questions for the working group to look at, and one of them is also to look at how to make the system more cost effective. So it would also incorporate input from the employer and the workers' comp carrier side as well as just hearing from the individuals who represent workers' compensation claimants to make sure that whatever solutions have proposed that they're thinking about the cost effectiveness of the system as a whole and not just a one-sided view. Great.
[Andrew Perchlik (Chair)]: Sounds good. Well, if there's no other questions, I'll entertain a motion to pass the bill favorably.
[Anne Watson (Member)]: So moved.
[Andrew Perchlik (Chair)]: The clerk shall clerk away.
[Michael O’Grady (Office of Legislative Counsel)]: That's one seventy three. Senator Perth. Senator Brennan. Yes. Senator Lyons.
[Virginia "Ginny" Lyons (Member)]: Yes.
[Michael O’Grady (Office of Legislative Counsel)]: Senator Norris? Yes. Senator Watson?
[Anne Watson (Member)]: Yes.
[Michael O’Grady (Office of Legislative Counsel)]: Senator Westman? Senator Perchlik?
[Andrew Perchlik (Chair)]: Yes. Great. Reporter?
[Anne Watson (Member)]: Well, think the the labor relations board is my area. Yeah. So which is
[Andrew Perchlik (Chair)]: That's w a t. So
[Anne Watson (Member)]: it's not I mean, maybe somebody else
[Abby Shepherd (Office of Legislative Counsel)]: has got economic development generally. S o n.
[Andrew Perchlik (Chair)]: Too late.
[Anne Watson (Member)]: But I do have a question. I just wanna clarify. So with the the per diems, it's not per diems reimbursements?
[Abby Shepherd (Office of Legislative Counsel)]: Or It was expense. Yeah. Just reimbursement of expenses.
[Anne Watson (Member)]: Okay. I think I should not I shouldn't upgrade because it's compensation reimbursement.
[Robert Norris (Member)]: Are they Allstate employees or?
[Abby Shepherd (Office of Legislative Counsel)]: No, I anticipate it would be a couple of individuals who represent employers and workers' compensation carriers, a couple of folks that represent workers' compensation claimants, and then a couple of vocational rehabilitation representatives who have firsthand experience. The current issue with the initial screening is that it's done by people in Dale, but who aren't familiar with workers' compensation. And so, again, there were just a lot of questions that were raised about the way the system currently operates.
[Michael O’Grady (Office of Legislative Counsel)]: So the expenses just managed, basically, or, like, at their lunch?
[Abby Shepherd (Office of Legislative Counsel)]: Yes. I think so. Okay.
[Andrew Perchlik (Chair)]: You can look up 32 PSA ten ten and see what
[Abby Shepherd (Office of Legislative Counsel)]: be They motivated to get it done in fewer than five meetings.
[Michael O’Grady (Office of Legislative Counsel)]: Okay. I appreciate that distinction. Expenses instead of Perdue. Okay. Thank you, Senator Watson,
[Andrew Perchlik (Chair)]: for reporting in. Thank you, Senator.
[Al (Committee Assistant)]: Thank you.
[Abby Shepherd (Office of Legislative Counsel)]: Thank you very much.
[Michael O’Grady (Office of Legislative Counsel)]: Thanks. So we can take
[Andrew Perchlik (Chair)]: a look at 02/23. We already have the bill. Are you presenting this bill on the floor?
[Anne Watson (Member)]: I will not be the one presenting it on the floor, but happy to speak to You're the sponsor? I was cosponsored. It was just senator Bondgaard's note.
[Andrew Perchlik (Chair)]: Oh, right.
[Anne Watson (Member)]: So it'll be senator Bondgaard's who reports it. Happy to jump in. That's Yeah. Okay. So s two twenty three is just a study bill. Now to be fair, it is studying an issue that has been longstanding and I think really deserves, this study. This is not the the kind of situation where, you know, we could have or should have been doing, on policy. This is a complicated situation that, I think deserves to be resolved by a group of stakeholders, which is why this bill exists. And so to get into what this is about, the Clean Water Act, I believe it is, requires that the state have a classification of waters. And that classification depends on the cleanliness of those waters or how pristine those waters are. And so A is the highest quality water that you can have, and then B is less than that, etcetera. But things are really just either a or b. That's how it works. But there and I think there might be, like, gradations of, like, b plus, you know, something like that. But there are there there's this stipulation with the classification that if you have class a waters, let's say, that that comes with regulation. Like, you can't develop in such a way that would pollute those waters so that it becomes more polluted than the threshold for A, if that makes sense. You can't degrade the waters. So this is an it's an anti degradation policy that goes along with this. And so Vermont, just by the way that it unfolded, most of Vermont's waters are Class B by default. Though many of them could be Class A, but people are very hesitant to reclassify or go through the process of reclassifying waters because that comes with additional regulation. Fair enough. That's a sticky wicket. So I understand it, and Michael Grady would be able if he was here, he'd be able to say this probably more cleanly. But my understanding is that the Agency of Natural Resources has has been they they're supposed to come up with rules around the the anti degradation policy and reclassification of waters, and for twenty years has not
[Andrew Perchlik (Chair)]: Not the rules at all.
[Anne Watson (Member)]: Right. And so it's not even it's yeah. Right. Like, it's this is not like a Republican Democrat issue. Like, it has been a long standing problem.
[Abby Shepherd (Office of Legislative Counsel)]: And
[Anne Watson (Member)]: there but there's also some instances where so just as an example, this is probably more information than you need. But just as an example, there are there are some developments in, the watersheds of these, high quality waters that that are class a. People want and these houses, let's say, want to go in together on a collaborative wastewater system, but which would be better for the lake, but because it's a thousand gallons and that's one of the thresholds, you can't that that kind of, system would be prohibitive, under these rules. So there's some reasons at this point to to look at the rules. I think people would like to both, have the waters reclassified at their proper level. If they're high quality, we should reclassify them as the quality that they are, and we should figure out how to allow development in such a way that does not ultimately produce pollution. So there's a a number of stakeholders that are in conversation about this, and it seems like there is progress that could be made on this front, for hopefully both sides, so to speak. So, the hope is that this study group will get folks together, find a path forward with some recommendations for regulation for an anti degradation policy. So there we are. And so that's that's sort of the the background of what's happening in this bill. And so it's there's 11 members. There are, two senators and two representatives on it, and a number of people from industry and advocates, etcetera. And so all that we are looking at in terms of of financial implications here are is the per diems, which we do have a fiscal note on that and 14,000. It's 14,000.
[Andrew Perchlik (Chair)]: What is the per diem? Do they really hear me? It's the per diem that
[Michael O’Grady (Office of Legislative Counsel)]: we that we did?
[Andrew Perchlik (Chair)]: Like, whatever that is?
[Abby Shepherd (Office of Legislative Counsel)]: No. Looks like
[Andrew Perchlik (Chair)]: 69 is a different per diem. Yeah. Do you know what it is?
[Abby Shepherd (Office of Legislative Counsel)]: $50.
[Andrew Perchlik (Chair)]: $50 for the $50. We get, like,
[Robert Norris (Member)]: two thirds of the day going out.
[Abby Shepherd (Office of Legislative Counsel)]: I know. Okay.
[Anne Watson (Member)]: Yeah. That's that's the study group.
[Andrew Perchlik (Chair)]: Yeah. And I was just looking through here about the last bill that we talked about. This is the same statutory reference, thirty two ten ten. I don't really see where it yeah, it says right in the statutes. I don't really see the difference where it it talks about expenses.
[Anne Watson (Member)]: Oh, like reimbursements?
[Abby Shepherd (Office of Legislative Counsel)]: Yeah. No. I don't think it has that. Oh, in this bill? Yeah. Does it? No.
[Andrew Perchlik (Chair)]: This bill says per diem business. Per diem and expenses as per thirty two ten ten.
[Anne Watson (Member)]: Oh, it does say reimbursements and expenses.
[Michael O’Grady (Office of Legislative Counsel)]: And so but what I'm
[Andrew Perchlik (Chair)]: just wondering in the last bill that we just passed where it said reimbursement of expenses. But it said reimbursement of expenses as allowed in ten ten, you know, 32, can you say ten ten?
[Abby Shepherd (Office of Legislative Counsel)]: Is that only for legislators? The reimbursement maybe?
[Andrew Perchlik (Chair)]: No. This
[Abby Shepherd (Office of Legislative Counsel)]: No? Or is it everything?
[Andrew Perchlik (Chair)]: VSA thirty two ten ten is for all boards. Any board that oh, there's a list of boards, and then there's not any boards that has been granted per diem by the general assembly.
[Abby Shepherd (Office of Legislative Counsel)]: So the people representing business development who aren't isn't part of their regular job.
[Andrew Perchlik (Chair)]: Yeah. Talk about Yeah. But it doesn't really talk about expense per se. Separate question. We doing any questions? Yes.
[Philip Baruth (Member)]: Of course. I mean, it's it's not it's policy. Yeah.
[Michael O’Grady (Office of Legislative Counsel)]: Know how sometimes you you feel about that here.
[Andrew Perchlik (Chair)]: Yeah. I'm not we can ask that.
[Philip Baruth (Member)]: I'm just wondering what what the benefit from somebody that was well, most of them are classified in the b. What benefit do they get by being brought up to the a other than it could hinder or limit Mhmm. Development?
[Anne Watson (Member)]: Just protection of the quality of the of the lake. Yeah. Yeah. So it keeps it high quality.
[Philip Baruth (Member)]: And it's all lakes like Champlain, I
[Unknown committee member (senator)]: would assume.
[Anne Watson (Member)]: That's a good question. I'm not sure about Lake Champlain. They that would be a good Michael Grady question.
[Andrew Perchlik (Chair)]: Okay. I mean, I don't He's not as well. I have
[Philip Baruth (Member)]: to ask that question because it's got nothing but, like,
[Andrew Perchlik (Chair)]: front and front.
[Abby Shepherd (Office of Legislative Counsel)]: I'm not sure.
[Andrew Perchlik (Chair)]: Know why it wouldn't be? Because it's a because it's a Inter
[Philip Baruth (Member)]: interstate. Interstate.
[Anne Watson (Member)]: Yeah. Oh, good. Here you go.
[Philip Baruth (Member)]: Stay by the bell.
[Anne Watson (Member)]: Good question for you.
[Andrew Perchlik (Chair)]: You can join us here. There's a question I write it for.
[Philip Baruth (Member)]: I'll let you put your books down first. Relax. I was just asking if Lake Champlain is encompassed in this.
[Anne Watson (Member)]: In Class B or Class A or anti degradation?
[Michael O’Grady (Office of Legislative Counsel)]: Yes, the short answer is yes. Because they're state waters and they fall underneath the state's water quality standards. And so to order to manage to those standards, have to classify those. They're all class b.
[Unknown committee member (senator)]: They're all class b at this Yeah.
[Michael O’Grady (Office of Legislative Counsel)]: Can I ask another Yeah?
[Philip Baruth (Member)]: What do they have to do to be brought up to class a? Is it water testing? Or
[Michael O’Grady (Office of Legislative Counsel)]: Yeah. Well, there's partly water testing, and and some of the standards are also narrative there, such as aesthetics sets, you don't necessarily measure. We don't
[Philip Baruth (Member)]: have any at this point?
[Michael O’Grady (Office of Legislative Counsel)]: We have Class A waters, but we but there's many waters that qualify for Class A, that's why we're here, that are not being reclassified. And part of that is why, part of the study.
[Anne Watson (Member)]: And a follow-up question to that. My guess is that Lake Champlain is not one of the bodies of water that would potentially be eligible for reclassification to A.
[Michael O’Grady (Office of Legislative Counsel)]: Right now it's impairment stage. And so the first goal for that is to come up to Class B standards.
[Anne Watson (Member)]: It's not even Class B.
[Michael O’Grady (Office of Legislative Counsel)]: Right. Look. It's impaired. Like
[Anne Watson (Member)]: it. Okay.
[Michael O’Grady (Office of Legislative Counsel)]: Mean, it is classified as Class B, but it's not meeting those standards, so you have to bring it back. Senator Norris? Yes. Every time we deal with one of
[Robert Norris (Member)]: these ANR regulations or rules or whatever else, there's an impact to landowners. Anybody else is gonna be some new rules, regulations, cost. How is this gonna affect landowners? In fact, we move all these proportion of these waters up to say Class A, camps on the lake
[Michael O’Grady (Office of Legislative Counsel)]: or whatever else. I do think if you move a water to Class A, there could be additional considerations that ANR has to take into place for the use of land. I can't say exactly what they're going through, but I also can't say that it never will happen. It could happen that that the use you wouldn't put, say, a coal pit next to a class a water because the runoff from that will turn that Class A water into well below Class B quicker. So, I mean, there's criteria considerations you have to take to maintain the quality of that water.
[Robert Norris (Member)]: So I'm just looking at Franklin County, A lot of dairy farms
[Andrew Perchlik (Chair)]: out there. A lot
[Michael O’Grady (Office of Legislative Counsel)]: of tributaries, rivers, and so on and
[Robert Norris (Member)]: so forth. Is this gonna take you one step above? Okay. Once a lake is classified as class, then all of a sudden has to where they happen to spread their manure or whatever. So there's gonna be limitations on tributaries on the on on the rivers. There's gonna be a there's gonna be an effect on us, Mike. There's gonna be
[Michael O’Grady (Office of Legislative Counsel)]: a cost effect to us.
[Robert Norris (Member)]: I think we all realize this.
[Unknown committee member (senator)]: Well,
[Michael O’Grady (Office of Legislative Counsel)]: I don't want to overstate this point, and so I would have to condition it on me confirming, but I don't think any of the waters in Franklin County major waters in Franklin County are, I'd say, eligible, but I have to confirm that. Because this
[Robert Norris (Member)]: appears to be a study group, but they're gonna come out with findings and so on and so forth, and then go back to ANR and say, okay. This is
[Andrew Perchlik (Chair)]: what we need to have
[Michael O’Grady (Office of Legislative Counsel)]: done, recommendation to ANR. But, yes. I mean, the the recommendations from the study group are both legislative, potentially legislative and regulatory rules. Because right now, in order to reclassify water, you have to go through rulemaking.
[Anne Watson (Member)]: If I can add to Please do. Right now, the situation is if they get reclassified as class a, the the rules are such that it's it's pretty problematic for the folks that are there. And I think part of the goal here is to find find solutions for that that work for the developments in that are in class a waters.
[Michael O’Grady (Office of Legislative Counsel)]: You can develop in class a waters. Yes. You can. It makes it more It's the entire watershed for that? Well, that's partly one of the things you have to take into account is the use going to potentially degrade the Class A water, use further up in the watershed, use the coal pit as an example, you don't want acid mine drainage going into Class A water. So, I mean, that's part of the consideration. It's part of what they're supposed to be doing right now, but it's not transparent that they are because there is what's called the anti degradation policy. And that policy is you manage a water to protect its current condition or quality. So you don't allow uses that let it degrade. And that's what they're supposed to be doing now. And so but they don't have a rule for how they're implementing that policy. They have been told to do a rule by statute since
[Unknown committee member (senator)]: I think I started here in 2004,
[Michael O’Grady (Office of Legislative Counsel)]: and they haven't adopted that
[Andrew Perchlik (Chair)]: rule. So
[Michael O’Grady (Office of Legislative Counsel)]: how are they do they have a policy, which they say is enough and
[Philip Baruth (Member)]: which they say that they
[Michael O’Grady (Office of Legislative Counsel)]: do. It's not transparent how
[Andrew Perchlik (Chair)]: they do it. And where where does the rubber hit the road on the zone from the apartment? Or is it an act two fifty permit or even like a
[Michael O’Grady (Office of Legislative Counsel)]: local zoning? It's usually just the ANR permit, the ANR discharge permit. It can give get brought into Act two fifty if you were in an Act two fifty triggering development. The cumulative impacts analysis includes a general valuation of the effect of development on water. And so they would look at that. Does it reflect any wastewater? They would say, oh, this is a class A water. What is the runoff? What is the discharge? We'll have an effect on a headwater of the class A water because those are all criteria in the water. But if it's a homeowner just like building
[Andrew Perchlik (Chair)]: or or second house or, like, building a garage, would they need to get a Yeah. Firm?
[Michael O’Grady (Office of Legislative Counsel)]: So if you're just an individual home individual structure builder, you usually don't trigger Act two fifty unless you're in a white acre town. Let's just say we're not in a white Usually, acre all you need is your your well and your wastewater permit and your local zoning and municipal permit. In your local zoning and municipal permit, they have ability to to adopt shorelands bylaws, buffer bylaws, wetlands bylaws. That's what you would need to comply with. But if local, when
[Andrew Perchlik (Chair)]: they get their wastewater permit, they would
[Michael O’Grady (Office of Legislative Counsel)]: ANRs and their wastewater permit, they have standards in their rules about siting already within a distance of certain waters.
[Philip Baruth (Member)]: So are you saying that the municipality has planning and zoning and they've gotten the permits from that and actually have, it doesn't matter probably with stormwater, sewer and everything. Do they still need ANR to weigh in on that project?
[Michael O’Grady (Office of Legislative Counsel)]: If you're not triggering any of ANR's permits, you don't need ANR approval. Or Act two fifty. So one of the things that ANR does have a permit for, if you're going to disturb a half an acre or more of land, And that's just a disturbance. You're probably going to do that when you're constructing one structure. But what you need to do is just put in stormwater management control measures, and there's a general permit for that. You don't even need to apply for that permit. You just need to do what it says and then notify ANR that you are doing what it says underneath that permit.
[Robert Norris (Member)]: But they're come and inspect it afterwards,
[Michael O’Grady (Office of Legislative Counsel)]: or They have authority to inspect. But you've all seen what what that requirement is. It's the orange fences. It's the hay bales. It's the it's the big black felt logs. You know, that that's the kind of thing that you do to control the runoff when you're disturbing a
[Unknown committee member (senator)]: half acre.
[Michael O’Grady (Office of Legislative Counsel)]: So what agency issues the AC permits for your septic system? What agency? ANR. ANR. The Department of Environmental Conservation, Groundwater and Fishwater Division.
[Andrew Perchlik (Chair)]: So that's where this would when they go to issue the wastewater program, they might say like, well,
[Michael O’Grady (Office of Legislative Counsel)]: how far are you away from this? That's another division, that's the water quality division. They have I mean, they have the water quality standards and you have to meet the water quality standards. There are, depending on what you're discharging, comes into play and what goes into your permit. If you're gonna be discharging certain types of contaminants Which is household septic system. Household septic system, that's already there's rules already for that. But do they look at the degradation rule? Do they think, oh, you're 50 feet from this pond. This pond is a Sure. So they are set up in a way, the current wastewater and water systems, to basically comply with with water quality laws for anti degradation. There are some provisions written in the statute that you can't have something, a system that's more than 6,500 gallons per day that's located within within a class a. And and that that is 100 feet within a certain distance? I can't remember exactly. But it's
[Andrew Perchlik (Chair)]: a fifty, hundred, whatever. Right. Right.
[Michael O’Grady (Office of Legislative Counsel)]: But that that is something that ANR has been seeking to eliminate. And and part of their logic is once you eliminate that, it will be easier to reclassify Class B to Class A because you won't have certain limitations on development. And the ANR can establish conditions and permitting that would achieve greater, similar or greater benefits as the 6,500 limitation. I mean, that's an argument and other people said, well, but you'll be able to build x amount of units, and how are you going to ensure that it it it meets the same I mean, it's a it's a it's it's a debate. Yeah.
[Andrew Perchlik (Chair)]: Well, that's what we do here.
[Michael O’Grady (Office of Legislative Counsel)]: Good, bad or indifferent. Any other questions for you? I just wanna say nothing regulatory or binding comes from the study. You would have to act or the agency would have to go to runway.
[Andrew Perchlik (Chair)]: This is to get more information. Try to try to break the login. Right.
[Anne Watson (Member)]: It's it's really to bring stakeholders together to see what compromise or progress can be made to, you know, to for everybody's ends. So
[Abby Shepherd (Office of Legislative Counsel)]: I'm I'm remembering Bill Bartlett and David Dean and me. And
[Andrew Perchlik (Chair)]: there's, like, there's house members, there's senate members, which I've been remember speaker in committee on committees, and the other members was some appointed by the governor anyway? One.
[Michael O’Grady (Office of Legislative Counsel)]: Federation of Lakes and Ponds.
[Unknown committee member (senator)]: Yeah.
[Robert Norris (Member)]: So my how would this affect the townships that do have the one acre roof, which my hometown does?
[Michael O’Grady (Office of Legislative Counsel)]: So you're potentially active 50 jurisdiction, unless you're exempt, you're engaging in development, then you're in active 50 and then part cumulative impacts analysis, they're going to look at your impact on water. Okay. Thank you. And they're doing that now? Yeah. This one changed. Right. Exactly. And and, you know, you're not you're in Franklin. Right? You're not in apparently, the Act two fifty coordinator up there is, like, the star of the show and and works really well with people. And I was gonna say
[Robert Norris (Member)]: We do that well in Franklin County. We work with people now. So They don't dictate what they should
[Michael O’Grady (Office of Legislative Counsel)]: be doing. I can't remember I can't remember her name, but she's pretty, pretty well
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: respected. Okay.
[Andrew Perchlik (Chair)]: Well, if there's no other question on the bill, I'd like the committee to consider an amendment that I had Mr. Green draft. Even though the cost is only $14,000 I think it's best practice for the committee that would pull the money out of the pull the appropriation out of the bill. Then we can look at all appropriations, whether they're 14,000 or $400,000 together. And when you're looking at the budget, we'll try to find this 14,000 and put back in there.
[Michael O’Grady (Office of Legislative Counsel)]: So did you send the different ones? So I I did send, I think I sent it to you and Al. Did you get it?
[Al (Committee Assistant)]: Yes.
[Michael O’Grady (Office of Legislative Counsel)]: There were two versions. There is the one that does just a simple contingency, the whole thing doesn't go forward unless there is money for it. But I also wrote one that just kills the compensation and reimbursement, but lets the committee go forward. What did you think
[Andrew Perchlik (Chair)]: about that the law requires them to get paid? Did you think that's Well, that's because we just say they don't get paid even though
[Michael O’Grady (Office of Legislative Counsel)]: You can say that.
[Andrew Perchlik (Chair)]: You said notwithstanding that they get paid, they're not gonna get paid, they're not gonna get paid.
[Michael O’Grady (Office of Legislative Counsel)]: I mean, your your predecessor did that pretty
[Andrew Perchlik (Chair)]: regularly. Yeah. So notwithstanding that Yeah. 32 PSA ten ten You don't get it. There's not an appropriation, they won't get it. Correct. And they could decide whether, you know, they wanna do it without the appropriation or not. Yeah. Right. And it is there a reason that we wouldn't do it that way
[Unknown committee member (senator)]: that you could think of?
[Abby Shepherd (Office of Legislative Counsel)]: I'm not paying people for being a well, I think it also depends on the type of board. There may be members that, you know, it's difficult for them to participate in a in a task force or something, so you would wanna compensate them. Right. I don't know if that's the case since
[Andrew Perchlik (Chair)]: she But I guess they would you'd have to tell them, like, we're pointing you this board, but right now, there's no money for it. So you're not gonna get your $50 in louch because that's what they would be giving you, $50.
[Anne Watson (Member)]: Can I make a proposal Yeah? About that? I I would propose that we go with the version where it just takes out the money and then and have the conversation together with the budget about whether or not we wanna include it. And then if we don't include it in the budget that is a part of the budget, we amend the bill to say, you can still do this, but you
[Abby Shepherd (Office of Legislative Counsel)]: I like the suggestion you
[Michael O’Grady (Office of Legislative Counsel)]: So you're
[Abby Shepherd (Office of Legislative Counsel)]: not gonna get that. Can
[Andrew Perchlik (Chair)]: can we put the can you can you put them up on the screen so we can see the language?
[Michael O’Grady (Office of Legislative Counsel)]: Sure. I don't know if the pertinent one I sent you is there.
[Abby Shepherd (Office of Legislative Counsel)]: Do you want both?
[Andrew Perchlik (Chair)]: Would be good to see both if you can.
[Anne Watson (Member)]: Elle, I was just seeing the one. Do we They
[Al (Committee Assistant)]: should both be up
[Anne Watson (Member)]: now. Oh, okay. Good. Oh, I see them.
[Unknown committee member (senator)]: That's the bill.
[Andrew Perchlik (Chair)]: This amendment is the one that considers this contingency funding, which is
[Michael O’Grady (Office of Legislative Counsel)]: says the duty to implement section one shall be contingent on modern appropriation. Right. And that's the default that we're using for that that Brandon JFO came up with Right. To basically stop the funding until you go through the process.
[Andrew Perchlik (Chair)]: They could still do it without being told to do it, I guess. But the duty or whoever that whoever's in charge of doing the committee, which
[Michael O’Grady (Office of Legislative Counsel)]: I assume is DC. ANR calls the first meeting, then the body of the group elects a chair from the legislative leaders. And then that basically ledge counsel and ANR run the working group. I guess
[Andrew Perchlik (Chair)]: the the when we take away the duty to do
[Michael O’Grady (Office of Legislative Counsel)]: it without appropriation, they could still go ahead and meet. Like, there wouldn't be any They but they just couldn't get any per diem or expenses. They they could. The question would be whether or not you would have any duty to appoint anyone.
[Andrew Perchlik (Chair)]: Yeah. We would. Right. Okay. Or the because section one includes all of that. Right. Appointing people, the meeting, the structure,
[Michael O’Grady (Office of Legislative Counsel)]: the goals. Yeah. Section one is basically the whole bill.
[Andrew Perchlik (Chair)]: Yeah. Without section one so there's all the duties to do section one would be reserved. Mhmm. So you can remove the duties to do it, say, to to John appropriations, or you can just say we're removing the appropriation. If you remove their appropriation, they could still just basically say they'll still be appointed.
[Unknown staff (DFR or committee)]: Mhmm. Mhmm.
[Andrew Perchlik (Chair)]: They they could still meet. They still have to do a report, but they won't get any money. So they're gonna so but I think in the past, I don't know if they've had complaints about it, but I think CFOs or councils.
[Al (Committee Assistant)]: I am sharing, though, the original long range.
[Andrew Perchlik (Chair)]: Okay. Sometimes their concern is that's not as straightforward maybe. It's like, here's all
[Michael O’Grady (Office of Legislative Counsel)]: the stuff you gotta do.
[Andrew Perchlik (Chair)]: And you only have to you won't get any money for it. But we're still, like
[Abby Shepherd (Office of Legislative Counsel)]: Yeah. I mean, that's
[Michael O’Grady (Office of Legislative Counsel)]: So this is just the required payment. It's not it's not it's contingent upon an appropriation. So the rest of sec one would go for but then the second one is that the the entire duties Right. Sec one.
[Anne Watson (Member)]: So if we go with this language,
[Abby Shepherd (Office of Legislative Counsel)]: the appointments would still all happen.
[Michael O’Grady (Office of Legislative Counsel)]: The appointments would still all happen. Yeah. This is the required thing.
[Andrew Perchlik (Chair)]: So this one has basically section one still happening Right. But there's no payment. The other option is section one is basically you don't have to do anything in section one unless unless there's an impingement. And if there's a payment, then you don't have to go back and fix it. By by paying it, you're in active section one. That makes
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: sense. Mhmm.
[Anne Watson (Member)]: Mean, my So no. I was
[Abby Shepherd (Office of Legislative Counsel)]: just gonna say this one is good because suppose we put in less than $14,000, they could decide to meet fewer times or something like that.
[Michael O’Grady (Office of Legislative Counsel)]: I mean, that's a good point. It goes towards senator Watson's point. They could take everything out now and then revisit the appropriations bill if you wanna just take away some of the payments, some of the meetings, etcetera. Yeah. Then you could Because you've had study groups that that meet their meeting total for compensation and then just keep on meeting. I know.
[Abby Shepherd (Office of Legislative Counsel)]: But sometimes they
[Anne Watson (Member)]: don't need to be. Well, and I think the the deadline for this bill, the report back is actually relatively quick. Yeah. So
[Unknown committee member (senator)]: Yeah.
[Anne Watson (Member)]: They're gonna have to get after it.
[Abby Shepherd (Office of Legislative Counsel)]: That's a lot of meetings for
[Anne Watson (Member)]: A lot of meetings. That amount. Yeah. Really.
[Andrew Perchlik (Chair)]: Well, as the sponsor of the bill, senator Watson, do you do you have a recommendation on the amendment?
[Anne Watson (Member)]: I mean, my sense is to well, actually, I guess I have a question. So if we went with this language, do you have a litigious ai?
[Andrew Perchlik (Chair)]: And do we have to admit
[Michael O’Grady (Office of Legislative Counsel)]: the notwithstanding language? This is the this is the the section a section one stops for all of section one. That's that's what this Oh, yeah. This one this
[Anne Watson (Member)]: This one stops all section one.
[Andrew Perchlik (Chair)]: Just do you wanna show? Yeah. This is
[Anne Watson (Member)]: Oh, okay.
[Andrew Perchlik (Chair)]: I was.
[Anne Watson (Member)]: Yes. So this is the required payment.
[Michael O’Grady (Office of Legislative Counsel)]: I mean, it For
[Andrew Perchlik (Chair)]: this one, do you want to know?
[Michael O’Grady (Office of Legislative Counsel)]: It's made, it's worthwhile to put an office standing in there. You don't necessarily need it because this, the legislative intent clears that they're not gonna get paid. But if you wanna take away that question, you will put the notwithstanding.
[Andrew Perchlik (Chair)]: Just at the beginning, you
[Michael O’Grady (Office of Legislative Counsel)]: said now outstanding 32,000. Yeah. The required payment.
[Anne Watson (Member)]: I think my my sense is to go with this language, and I would like for it to be considered as a part of the budget. Yeah. And think that also gives me some time to check-in with the rest of the, you know well, with senator, a prime sponsor of this bill, to see what sort of flexibility he has, you know, a sense of but would love to at least preserve the possibility that they can't pay.
[Andrew Perchlik (Chair)]: I think there's some value in that, especially with this kind of group. I think some groups we wouldn't want to meet, so we wouldn't wanna do it. We're also trying to, like, have the same language at the time. But I think, in this case, it's okay with me to allow them to meet if they want to meet, we don't come up with a 14 or we only have $10,000 at the end of the day. We just have to keep we just have to remember
[Anne Watson (Member)]: Yeah.
[Andrew Perchlik (Chair)]: That we would want to change. I know we put it in the budget, but we might need if we're gonna change kind of their structure, have to put that in the budget here.
[Anne Watson (Member)]: Sure. Sure. Or the number of meetings.
[Abby Shepherd (Office of Legislative Counsel)]: Right. That's the thing. Yeah.
[Andrew Perchlik (Chair)]: Because you didn't have number of meetings.
[Anne Watson (Member)]: I think we did.
[Abby Shepherd (Office of Legislative Counsel)]: Eight. We did. Yeah. Okay.
[Andrew Perchlik (Chair)]: Is that a motion, Senator Watson to amend the bill and
[Michael O’Grady (Office of Legislative Counsel)]: pass favorably with this amendment? Yes. Vote the notwithstanding language. I
[Andrew Perchlik (Chair)]: think ideally. Sure. Just so it's not there's no argument about it. Mhmm.
[Anne Watson (Member)]: So together with notwithstanding.
[Andrew Perchlik (Chair)]: Just put notwithstanding in front of that. Is that something you could just print out right now?
[Michael O’Grady (Office of Legislative Counsel)]: Yeah. I can go do it right now.
[Andrew Perchlik (Chair)]: Okay. Well, do you have any questions on what this amendment is? Like, creating printing it up. Do you feel you could throw down the bill and then put this amendment?
[Unknown committee member (senator)]: I think we can take the amendment around.
[Robert Norris (Member)]: Most things not a large amount of money.
[Andrew Perchlik (Chair)]: Right. Well, that's usually the way it happened.
[Robert Norris (Member)]: I still need a little discussion on this. Mike was saying that there's there's somebody's supposed to be doing this already. Yes. But they're not. So now we're coming up with a bill here. And with all due respect to the presenter of the bill and and the officer of the bill, we're getting in inundated with half baked bills up in Franklin County already between the wetlands and and the road lakes and whatever else. I just don't feel comfortable on the bill itself, and it and it could be a perfectly good bill. Don't get me wrong. I don't feel comfortable supporting you. I'll tell you that.
[Andrew Perchlik (Chair)]: Well, that's okay. And you can you can do two things as far as the vote in here, which is supposed to be mostly about the appropriations of the bill, which we're taking out. You can vote no because you're just the bill offends your senses.
[Michael O’Grady (Office of Legislative Counsel)]: Or you could be comfortable with the bill. I'm not
[Robert Norris (Member)]: saying I dislike it's entirety.
[Andrew Perchlik (Chair)]: Right. I'm all about clean water.
[Robert Norris (Member)]: It's not what I'm saying. Like, I know regulations and more rules coming down the road here.
[Andrew Perchlik (Chair)]: You could say I'm gonna vote for the bill to get it out of appropriations because we took the money out and this is what we're doing here. But I'm not voting for or I'm not committing to voting on the floor. Don't get my yes vote to get the bill out of committee as I'm supporting the bill.
[Michael O’Grady (Office of Legislative Counsel)]: Sometimes people say that. I've said
[Andrew Perchlik (Chair)]: that before in here. I'm voting to get it out on appropriating it, but I'm gonna vote no or not.
[Robert Norris (Member)]: So we are gonna appropriate the money or we're pull it out.
[Andrew Perchlik (Chair)]: We're gonna pull the money.
[Abby Shepherd (Office of Legislative Counsel)]: Pulling the money out. Yeah.
[Unknown committee member (senator)]: Yeah. Okay.
[Robert Norris (Member)]: I can go that route.
[Michael O’Grady (Office of Legislative Counsel)]: Okay. And yeah, and you can vote however you want.
[Andrew Perchlik (Chair)]: I just wanna make sure people feel comfortable with what we're voting on without just seeing the language on the screen and seeing it in front of us.
[Robert Norris (Member)]: So we're voting on pulling the appropriations out and setting a bill for the floor.
[Andrew Perchlik (Chair)]: The required payment will be pulled out. Okay. They could still meet, but there there's no guarantee they'll get their per deed. So that's $14,000. And my escort is out
[Robert Norris (Member)]: of support necessarily of the bill in general.
[Anne Watson (Member)]: Right. Just about pulling out the appropriations.
[Andrew Perchlik (Chair)]: I can do that. And passing the bill.
[Anne Watson (Member)]: Sure. Agreeing that the group should be appointed.
[Andrew Perchlik (Chair)]: Just that the bill should pass. And so which means that there's a group being created, but there's not gonna be any appropriation. No, you just confused me.
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: You had them, you had them. And passing
[Andrew Perchlik (Chair)]: the bill, you said. Well, passing the bill out of committee,
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: so I
[Andrew Perchlik (Chair)]: mean, moving the bill to the floor, not passing the bill to the senate. And the the motion is to pass it out, paperically, with no monies or no money.
[Abby Shepherd (Office of Legislative Counsel)]: Taking the money out
[Andrew Perchlik (Chair)]: But you're
[Abby Shepherd (Office of Legislative Counsel)]: still passing bill. The language of the bill. Right.
[Andrew Perchlik (Chair)]: We're still passing the bill. Yeah.
[Abby Shepherd (Office of Legislative Counsel)]: We're we're passing to the full senate for consideration.
[Michael O’Grady (Office of Legislative Counsel)]: That'd be nice.
[Abby Shepherd (Office of Legislative Counsel)]: And you can consider it on the floor of the senate anytime you want.
[Unknown committee member (senator)]: I don't know exactly what you're talking about. Alright.
[Robert Norris (Member)]: I can compromise.
[Andrew Perchlik (Chair)]: So the way I understand it, there's a motion on the floor center wants to pass the bill favorably as amended Yeah. With this contingency language.
[Anne Watson (Member)]: And the notwithstanding.
[Andrew Perchlik (Chair)]: Which will add the notwithstanding language to the law saying that they shall be paid. Mhmm. We're making sure that they won't get paid. Okay. Are there any other questions? Questions of the presenter of the amendment? No, I'm gonna go with the passing it up, but not necessarily support the bill on the floor. Okay. Can There's no discussion on it. You could say yes or no with explanation and then give a speech. No, let's just do it.
[Robert Norris (Member)]: Okay. Senator Baruth, Senator Brennan, yes. Senator Lyons, yes. Senator Norris, yes, without explanation.
[Philip Baruth (Member)]: Perfect. Senator Watson, yes.
[Michael O’Grady (Office of Legislative Counsel)]: Senator Westman? Senator Perchlik? Yes.
[Andrew Perchlik (Chair)]: Okay.
[Anne Watson (Member)]: Yes, yep. I can't present that. You got
[Abby Shepherd (Office of Legislative Counsel)]: it.
[Michael O’Grady (Office of Legislative Counsel)]: You can do this. But
[Andrew Perchlik (Chair)]: you're not the presenter.
[Anne Watson (Member)]: I'm not the presenter.
[Andrew Perchlik (Chair)]: I like it better when you're not presenting.
[Michael O’Grady (Office of Legislative Counsel)]: You're just reporting for appropriate. Right.
[Unknown staff (DFR or committee)]: But we
[Andrew Perchlik (Chair)]: made you do that. Okay. Since Vanguard is presenting a bill. Yeah. We presented. First one here.
[Unknown staff (DFR or committee)]: And once
[Andrew Perchlik (Chair)]: we get the amendment in, I'll take a quick look at it and make sure grading our circuits. Okay. With that, we can move back to years and fiscal year twenty seven budget presentation. Commissioner Sampson, if you wanna join us and
[Anne Watson (Member)]: Hopefully they can.
[Andrew Perchlik (Chair)]: You can have others can either join you up there or you can
[Michael O’Grady (Office of Legislative Counsel)]: Thank you for joining us. Welcome. Thanks for I'll let
[Andrew Perchlik (Chair)]: you introduce yourself for the record and give us your presentation.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Yep. Kai Sampson, Commissioner of Department of Financial Regulation.
[Unknown staff (DFR or committee)]: David Cameron, Administrative Services Director of
[Andrew Perchlik (Chair)]: the Department of Financial Regulation.
[Michael O’Grady (Office of Legislative Counsel)]: We're here to present our budget. Do you know people around
[Andrew Perchlik (Chair)]: the room who would like to introduce themselves?
[Michael O’Grady (Office of Legislative Counsel)]: So Alente is our director of policy,
[Kai Sampson (Commissioner, Department of Financial Regulation)]: and we probably have a couple or all of our deputies online. So Aaron Farrance is the banking deputy, Amanda Smith is the securities deputy. Christine Brown is the tactics deputy.
[Andrew Perchlik (Chair)]: Okay. And do you know the senators here? I do. Okay. Yeah. Good. Thank you.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: So and Joe will be there it is. Wonderful. Thank you, Joe. You're driving today?
[Anne Watson (Member)]: Yes.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Okay. So, in summary, first page there, two, we're up 2.9% this year. Almost well, 86% is in salaries and benefits of the increase overall. The total budget is 83% in salaries and benefits. It's essentially a level of service budget. So we're not proposing or funding any programs or initiatives. This is just continuing doing what we're doing is what we see in this budget. Other highlights are we've relaunched our financial literacy grant program. We're authorizing statute to collect up to 15% of enforcement actions against regulated entities to be deposited into a special fund, which we can use for two things, restitution, which is very legally prescribed, and we've been able to provide several $100,000 of restitution over the last several years to folks that have a valid claim against a regulated entity that is not able to provide the compensation ordered. And then the other piece of that fund, which we're in the middle of now, is grant review, now application review, is grants for financial services education and kind of anti fraud education, that sort of thing. We have Joe actually is on the team that is looking at applicants there. So that's just a nice note there that we've had that grant program authority and we're able to kind of relaunch that. And by April, I believe, Joe, we will be awarding some of those grants up to $50,000 per entity. So those are
[Michael O’Grady (Office of Legislative Counsel)]: going to Vermont
[Kai Sampson (Commissioner, Department of Financial Regulation)]: nonprofits, but schools, nonprofits, etcetera can apply for a grant in those areas. So, and that's an important part of our mission, obviously, not just regulating financial services, but empowering Vermonters to navigate that world because it can be a scary and dangerous world.
[Andrew Perchlik (Chair)]: And maybe you're gonna do this later, which you don't have to answer now. But on that first sheet, you had the challenges. And I wondered if you could say kind of what the salaries what are you mean? What what do you mean when you say salaries and benefits are a challenge?
[Michael O’Grady (Office of Legislative Counsel)]: That's a big piece of
[Kai Sampson (Commissioner, Department of Financial Regulation)]: our budget. So, you know, keeping up with that, keeping up with the industry. So Is it like a recruitment problem? Like, it's hard. We do we do have some recruitment. I don't say problems, but challenges. Yeah. So, you know, we do compete directly with the in terms of salary with the industries that we regulate. So when you're looking at people with actuarial knowledge, CPAs for a lot of our exam functions, and combining that with knowing insurance or securities or banking, specialized fields specialized fields with not the the largest talent pool in Vermont. So it's about recruiting people into Vermont or recruiting people away from generally higher paying jobs in in the industries that we're regulated. So
[Andrew Perchlik (Chair)]: So that salary the challenges of salary and benefits does connect with recruiting and finding recruiting and retention. Yeah. So you probably also get the people and train them, and then they go off private. Yep. Private entity where they can make more money.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Right. Yep. That happens. And then, you know, sometimes we're able to recruit recruit back or recruit from those same entities, you know, with the
[Andrew Perchlik (Chair)]: and IT modernization challenges is just is that the cost? I'm assuming that Yeah.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Not not in this budget, but, you know, we we do have we are behind on on certain areas. So we have we have kind of discovery projects at this point with agents. So it's something we'll have to you know, once we things are priced out, you know, we'll we'll see how we'll go go about funding them. But we need to upgrade some of our licensing databases. And I I think document management is a big challenge for us. So all those things are in early stage exploration with ADS, what the price tag will be, it's kind of an anticipated much for us.
[Andrew Perchlik (Chair)]: Because I saw the ADS fees jumped, but your SLA was down, but I think that we've seen another place that just is that part of just the regular ADS pre org, or is it something Correct.
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: Yeah. Yes. As you probably know, they've changed
[Andrew Perchlik (Chair)]: the way they're charging departments. So it's not something you guys did.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: No. I'm sorry. Yeah. And then also mentioned on that slide is that I hadn't touched on is we we are our kind of our footprint and overall leased space charges have gone down year over year. So
[Andrew Perchlik (Chair)]: Is your office still in the city center? Is that what asking? Yeah.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Declaration of policy, I you know, we you might be used to seeing mission and vision, etcetera, in some of these presentations. I really like what's in statute for us. I think it and I put it in this slide deck. It encapsulates what our obligations and goals are with individual entities, the markets themselves, and then that second piece, the consumer protection and education. I really like our declaration of policy. I think there's no need for me to, as a department, get too much deeper into to vision and mission statements because, you know, it might not be the most flowery, but it it hits all the points of what we try to do as a department. The organizational chart just shows you obviously, it's not everyone. We have a 110 positions in the department, but it shows you, you know, from a divisional point of view how we're organized. Is the 11 still accurate? You wanna check? Yeah. Although we have a retirement today. So but yeah. So we're about 10% vacant at this point versus a budgeted vacancy rate of six and a half percent. So, you know, all of those are either being recruited or being RFR, you know, reviewed. So
[Andrew Perchlik (Chair)]: You have some room within your budget if you're not you're not you don't have to keep them open to meet your budget.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: No. No. And we'll we'll we'll be fine there. We'll we'll hit our vacancy savings budget for sure. But we need to fill those positions. Yeah. Yeah. When we're talking staff, we always like to look at our engagement survey results as we always have. Many of you may know I was deputy commissioner here prior to being away department for eight years, but back then, I remember as well that we always did very well relative to other relative to the state average in terms of engagement survey results. So that you can see here. We do have a very engaged team. I think one of the reasons for that is that the work we do in any of the divisions is pretty easy for anyone in the department to understand how what they do either impacts Vermonters, consumers, or the insurance industry or the captive industry. I think the work is very tangible and that's part of what brought me back to state government. The impact we're having on both the markets and consumers is it's not it's not a difficult thing to explain, I think.
[Andrew Perchlik (Chair)]: William, you're to be commended for these numbers. Sign of the leadership there.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Yeah. I agree. The and just tenure, you know, at all levels of the department, not not just the leadership, but we have a good a good you know, coming back again after eight years. Amazing how many people are the same and still have a lot
[Andrew Perchlik (Chair)]: of energy and enjoy their job. And this was last fall, is that when the survey goes out?
[Michael O’Grady (Office of Legislative Counsel)]: Was earlier. This was before the return to office. That's what I
[Andrew Perchlik (Chair)]: was gonna. I didn't know. And how is that affecting operations. I don't know about morale. But Yeah. I would
[Kai Sampson (Commissioner, Department of Financial Regulation)]: say we probably have, you know, the same challenges that with with some people just with their with their the lifestyle and routines that they've built adapting to this. But overall, I don't know how those numbers would change, but when we do, it's important to note that we do have a good contingent of sizable contingent of examiners that are work from home examiners, always have been. So that portion of our staff was not impacted by the turn of office. Okay. And maintain that. Okay. The next slide shows kind of you'll see two slides who we regulate and how we regulate. This is not an all inclusive list, but just gives you an idea among the four divisions, kind of the volume of different licensees. There's entity licenses in here and of course, individual licensees. A couple of things that jump out probably would be a question, so I'll preempt them as, you know, do we really need 155,000 broker dealers in Vermont? Well, we don't have 155,000 broker dealers in Vermont, but we have 155,000 authorized to do that in Vermont. That and the, like, the next column over agents and adjusters, when you have national companies in these regulated areas, they're gonna license their entire staff in all 50 states. And so a small state like that, like Vermont benefits from that. You know, there's a fee per individual. So from a compliance point of view, if you work for a national insurance company that, you know, does the business of insurance on the phone, you're just gonna register or license your entire phone staff. You're not gonna say, oh, it's Vermont. We'll need have you talk to us. Right. Mister Perchlik. Yeah. Because they they those those attempts have been tried in the past and then there's noncompliance and cost them more. Anyway, that's just an explanation as to why we have, you know, one third of what looks like one third of the Vermont population registered insurance agents. Assure you, the market is not that robust. But, yeah, captive, you know, you see captive insurance in there as well that continues to grow at a steady pace in terms of active licenses and continues to be a good contributor. And Vermont is still considered the number one state for capital Yes, yes.
[Andrew Perchlik (Chair)]: And The Caribbean, was there some efforts by some Caribbean nations that
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Bermuda, Cayman are are still trending and and, you know, competition, if you will. Many states have tried to duplicate what Vermont has in terms of competitive position as a domicile. I think we have scale and history and reputation that is really hard to replicate from scratch. So we kind of enjoy, there's many reasons I think we maintain that position as a sought after domicile and it's not because we're weakly regulated, we're actually very truly, it's a place people want to be because of our regulatory reputation in an alternative insurance market. And that remains true. And so we're still, we still lose folks that other domiciles, that there can be political reasons why a company says, I really got to domicile in a captive in a state where I have more connections, etcetera. But Vermont has the infrastructure, knowledge base, and reputation. So we don't see any threats, major threats on the horizon there. Okay. Good. So that's kind of who we regulate, then the next slide is how we regulate. Again, this is not everything, but it shows you what we do. You know, insurance filings review, that's, we call that rate forms. So all rates and forms being policy forms get reviewed for compliance and then on the rate side, of course, except for health insurance rates that are with the Green Mountain Care Board. But other than that, we're looking at all other insurance rates and forms. Examinations, that's going to be both on the captive end, the insurance end, but also kind of market conduct activity and examinations in securities and banking divisions. What else jumps out there? Consumer appeals and consumer or consumer inquiries and consumer complaints. That's an area you've got five year average numbers there, but we do a lot, you know, in banking and securities and insurance to work directly with consumers that call in and have questions or complaints. And that does feed a lot of our market conduct activities. So we can pick up on patterns there and launch a market conduct exam and deal with some of these issues systemically if there's a kind of specific company or systemic nonviolent violation of several companies.
[Michael O’Grady (Office of Legislative Counsel)]: May I interrupt you? Yes. I have
[Andrew Perchlik (Chair)]: a question for our counselor O'Grady. If you have somewhere else to go, if you're willing to wait for this, but we have the amendment for the bill and we can just look at it and we can contact you if we have any questions.
[Michael O’Grady (Office of Legislative Counsel)]: Thank you. Okay.
[Andrew Perchlik (Chair)]: I want to keep you if we have
[Abby Shepherd (Office of Legislative Counsel)]: anything. Okay.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: And so, yeah, I was talking about market conduct activities. You see a figure here for enforcement, 2,300,000.0. Is that a one year prior year number, Dave? That was one year. Yeah. So we're pretty active in enforcing our laws, again, in all areas, whether it be banking, insurance or securities. And that 2,300,000.0, that's kind of the bucket that some of the money can go into that education and restitution fund, which is at about 4 or $500,000 now. Yeah.
[Andrew Perchlik (Chair)]: Do you do you do any, like, business development kind of work? I guess, is any of the consumer inquiries? I would call it consumer inquiry. If somebody says, like, I do I wanna start a business that would be regulated by agency. You ever get those
[Robert Norris (Member)]: kind of calls? We do, yeah.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: And then we have to kind of be careful not to cross that line where we're giving them advice, right?
[Andrew Perchlik (Chair)]: You would send them economic development or somewhere else.
[Michael O’Grady (Office of Legislative Counsel)]: Yeah. Or some most of
[Kai Sampson (Commissioner, Department of Financial Regulation)]: the time, it's to an attorney, a regulatory attorney, who can help them navigate it. But, we get we're very available. I'd say probably more available than most state departments just because of our size and the way Vermont does business to talk people through what it would take, you know, to to get started in one of these areas. You know, captives is a little different. Right? They've worked with ACCD. They have a dedicated person for economic development over in in that's Brittany Evans over in ACCD. And, you know, capped is because it it is not consumer facing, it is not consumer direct. It's very much a business to business. Then
[Andrew Perchlik (Chair)]: there
[Kai Sampson (Commissioner, Department of Financial Regulation)]: is more guidance and development there. So you do see more overlap of business development and working with folks who want to set up a captive. Certainly don't see that as much in our regulated areas. The next slide shows the, you know, the DFR revenue, so fees and licensing fees, etcetera, collected by DFR registration fees, tax revenue, which we're not taking credit for the tax revenue here, but this is the tax revenue associated with the different industries we regulate, and then our expenditures. So really, the the first and third column, you know, the net of that is is, you know, what we cost to operate and what we bring in in terms of revenue, which then makes it sort of the general fund for Direct. Direct. Direct. Yeah. And that's, of course, as it says, fiscal '25.
[Michael O’Grady (Office of Legislative Counsel)]: Yeah. Mostly coming from insurance and securities. Yes.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Yeah. Mutual fund fees, I think we're a big one in securities. Insurance is a lot of those 250,000 licensed agents and adjusters. This is just a slide to highlight the multistate affiliations we have. My background is in insurance, I'm very familiar with the NAIC. We recently that's basically 50 states and six jurisdictions, The US territories working together. We're unique. Is the primary regulator for insurance, unlike securities and banking where you have more split regulation. So the insurance model of regulation is very different and requires kind of intense cooperation and coordination with all the other states. That really happens through the NAIC. And they also accredit us. So we have to get essentially a peer review every five years. And happy to say we just completed that and received our five year accreditation in December and very much kind of an error free accreditation. So there were no actions for us to take. And having been through two or perhaps three in my prior role at the department, I think this was the first time that we got through that accreditation without any significant comments whatsoever. We see here also continue to be ranked number one captive domicile. There's different publications and organizations that provide that. And banking, we're part of CSBS, NASCIS securities. So that's our power cells on the back slide. And budget overview, maybe I'll let you answer Yeah. That
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: This is so as you can tell, this is our 27 asked by major object code. But I think this is a good place to kind of stop and see how you'd like to proceed because as you see the rest of it is the ups and downs sheets, and I'm not sure you wanna go through that line by line.
[Andrew Perchlik (Chair)]: We don't. Hopefully, today. But if there's anything in there, like your vacancies is all different, but if there's anything in here, know, you would that we might see later and go, oh, I should have asked about that. Is there anything out of the ordinary? No.
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: I think it's pretty straightforward. The only thing you might
[Andrew Perchlik (Chair)]: Like why was other personal services Correct. So that'd
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: be the one. So that's when we get a position. When we get a position, finance management gives us spending for you and the other personal services line until the position is created. So what you're seeing here They
[Andrew Perchlik (Chair)]: let you hire somebody before the position is created? I'm sorry? They let you hire somebody before the position is created? No. They don't. So they give
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: us the money. It they put that's how we put in our budget for spending for it.
[Andrew Perchlik (Chair)]: Oh, they just put it in
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: their personal services. Yes.
[Andrew Perchlik (Chair)]: It's entirely based budget. I see.
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: And then when the position is created, then it goes into the salary line. So what you're seeing there is we've created the positions. So now it goes the money is going from their other personal services line to those to the salary line. So it's really a net
[Kai Sampson (Commissioner, Department of Financial Regulation)]: net zero. And you why don't
[Andrew Perchlik (Chair)]: they just put it in your salary and wages? I guess they don't put it in there till you they They don't put
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: in for some position created. Okay.
[Andrew Perchlik (Chair)]: I'm not gonna try to figure that
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: out. Why?
[Andrew Perchlik (Chair)]: Maybe you will tell me later.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Recom you they can reconcile their personnel records to the budget somehow
[Michael O’Grady (Office of Legislative Counsel)]: Yeah. Or their person their HR system. Oh, the the people in HR.
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: But I I do believe that would be the only one that kind
[Andrew Perchlik (Chair)]: of Yeah. It seems like the only the only big one. Other than the
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: rent being negative instead of
[Andrew Perchlik (Chair)]: And why was the rent negative? Because we gave up some space at the city center. It's been a Even with the return office.
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: Yeah, it's been a two or three year long process that we've been consolidating our space and we finally completed that in October, I think
[Andrew Perchlik (Chair)]: is when we Did we
[Kai Sampson (Commissioner, Department of Financial Regulation)]: end up with a better per square foot?
[David Cameron (Administrative Services Director, Department of Financial Regulation)]: We did. BGS negotiated better per square foot rate for us as well. I'm good. Yeah.
[Michael O’Grady (Office of Legislative Counsel)]: Well, yeah. Now you're under the governor's 3% target and doing good work.
[Andrew Perchlik (Chair)]: So I don't long as the direct apps keep coming
[Kai Sampson (Commissioner, Department of Financial Regulation)]: over. Understood. Yeah.
[Andrew Perchlik (Chair)]: Any other questions or anything else you wanna tell us about
[Michael O’Grady (Office of Legislative Counsel)]: your work? No. That works for me. Okay. Thanks a lot for your time.
[Kai Sampson (Commissioner, Department of Financial Regulation)]: Yeah. Thank you for
[Andrew Perchlik (Chair)]: your support. Al, can you put up that Grady amendment? I want the committee just to see that to make sure we see the language.
[Unknown committee member (senator)]: The same ones they got on their cars out there.
[Michael O’Grady (Office of Legislative Counsel)]: Oh, yes. It is. Yeah. It just it looks
[Andrew Perchlik (Chair)]: looks when it's clean.
[Robert Norris (Member)]: It's gotta bring you a clean plate, I guess.
[Unknown committee member (senator)]: That was supposed to be something special or something.
[Michael O’Grady (Office of Legislative Counsel)]: Oh, it is.
[Robert Norris (Member)]: That's an antoni on there.
[Abby Shepherd (Office of Legislative Counsel)]: How did you get that?
[Andrew Perchlik (Chair)]: Who told
[Robert Norris (Member)]: us we could order that? Get one free plate there.
[Andrew Perchlik (Chair)]: When when the sergeant arms was in.
[Abby Shepherd (Office of Legislative Counsel)]: Is that the perimeter?
[Andrew Perchlik (Chair)]: No. It's the same plate whether you put it on your car, but she said she'll give it to you. You don't wanna put it on.
[Abby Shepherd (Office of Legislative Counsel)]: Oh, I'm gonna tell her. Oh,
[Unknown staff (DFR or committee)]: I should get one to put on
[Andrew Perchlik (Chair)]: the call.
[Dirk Anderson (Director of Workers’ Compensation, Vermont Department of Labor)]: I know.
[Andrew Perchlik (Chair)]: Definitely. That's all marked down.
[Robert Norris (Member)]: I guess somebody placed a wall. Yeah.
[Andrew Perchlik (Chair)]: This is the amendment to S223. So that we already voted on.
[Unknown committee member (senator)]: Just like we did with the one in the calendar today.
[Andrew Perchlik (Chair)]: Yeah. Yeah, this is a little different. We had a Grady had done it this way. There's another kind of standard contingency where we just pull out the, we just say, you don't have to do this unless there's an appropriation. This language allows them to do it without the appropriations. Like, if they wanna do it and not like, they wanna have their working groups and nobody get paid the per diem. This way they could still do that. So the notwithstanding that first provision, that's the provision that says they shall get paid their per diem. But we're saying, notwithstanding that you have to get paid, you're not gonna get paid unless you put money
[Abby Shepherd (Office of Legislative Counsel)]: in the sentence.
[Anne Watson (Member)]: Right. Okay. But the appointments still happen, like the committee still The
[Andrew Perchlik (Chair)]: committee still gets formed. Right. And then they could decide. I guess the person that gets appointed when they're They should be told that they won't get paid. But it's $14,000 so the hope is that we find the money. But if we don't Pretty high bar.
[Abby Shepherd (Office of Legislative Counsel)]: Still holding up
[Andrew Perchlik (Chair)]: hope. Thousand dollars
[Abby Shepherd (Office of Legislative Counsel)]: And And And then time.
[Andrew Perchlik (Chair)]: So it wasn't has to remember why we're building the budget that we need to put $141,000 reminder. Sure will. Because you're such a supporter of the bill. Okay, there's no questions about that. People are still fine there. So to that, we can adjourn for the week.