Vermont Legislature SmartTranscripts:

[Andrew Perchlik (Chair)]: We are live.

[Unidentified Senator (Member)]: We're live. Senate appropriations per day, April 22. We're gonna go through a couple bills since we got the '27 budget out. First, we're gonna go to the miscellaneous tax bill h nine three three. The GFO or the legislature council wanna go. Take over first. Okay.

[Ernie (Legislative Counsel)]: Afternoon. Let's say the appropriations. Perfect. And let's say the council. Talk about taxes. First, we're going to connect. So I have a I have a summary document section by section and also the bill itself. There's close to 70 sections. You have a preference to whether you wanna walk through the summary or develop? Definitely the summary.

[Unidentified Senator (Member)]: So that's on here. SPS summary.

[Andrew Perchlik (Chair)]: Side by you sent the two documents by most

[Ernie (Legislative Counsel)]: Did did my 2010 show up for you?

[Unidentified Senator (Member)]: No.

[Unidentified Senator (Member)]: Which summary which is a better document? The side by side, the

[Ernie (Legislative Counsel)]: APD. The longer one is what I plan to walk through that has all the sections. Side by side only has changes set by. But it's helpful if you do wanna know only what's been changed in the.

[Unidentified Senator (Member)]: The side effects are six pages. Other one on the screen

[Ernie (Legislative Counsel)]: will go six they're gonna go six

[Unidentified Senator (Member)]: pages for our.

[Unidentified Senator (Member)]: So I'm sorry. Which document?

[Unidentified Senator (Member)]: It's all the side effects. It's SPS.

[Andrew Perchlik (Chair)]: Okay. So we are doing sides.

[Unidentified Senator (Member)]: I think so.

[Christopher Rupe (Joint Fiscal Office)]: That's six pages.

[Unidentified Senator (Member)]: They only go three.

[Unidentified Senator (Member)]: Yeah. K. Alright.

[Unidentified Senator (Member)]: They both have them all. Maybe just something. This is good. Just get it as.

[Andrew Perchlik (Chair)]: Still not coming up for me. I sent you a follow-up email, and it it it, like, from to my page to make sure. There.

[Unidentified Senator (Member)]: Did you get the cookies?

[Unidentified Senator (Member)]: We did. I did. Okay.

[Unidentified Senator (Member)]: We sniffed Yes. Oh, oh, they sure did. They sure did. I know.

[Unidentified Senator (Member)]: Good job. And Amy made. Yeah. No.

[Andrew Perchlik (Chair)]: Most of them usually, like, join the wrong day or something. Like, I sent the wrong day. You'll get an email. It's like, oh, someone's trying to join a Zoom. I didn't get that email. I Alright. Chris wrote. Chris is able to get it.

[Ernie (Legislative Counsel)]: So we got it.

[Andrew Perchlik (Chair)]: No. I like I said, I

[Ernie (Legislative Counsel)]: Oh. Seem like It acted like I joined at one point.

[Andrew Perchlik (Chair)]: Sorry. You're not in my meeting room.

[Unidentified Senator (Member)]: Oh, you can do it. Most of us have our laptop. We can follow

[Andrew Perchlik (Chair)]: along. You

[Ernie (Legislative Counsel)]: know, old school.

[Unidentified Senator (Member)]: Yes. So it's

[Ernie (Legislative Counsel)]: so the document I'll be looking at is six pages. It is page nine thirty three, text bill, section s section. So section one of h nine ninety three I'll try to flag for you, by the way, this the senate finance change units do that. So you can just assume that most of the stuff I'll be walking through is from the house, and further, most of the content of the bill came from Northwest Federal Department of Taxes that are more of the housekeeping and district. So section one is a repeal of denial of tax credits for S corporations or taxes paid to other states. This was a cleanup. Going back to the '90, the Department of Taxes apparently lost a case involving this issue with an s corporation and as what's been described by the department as a form of remnant, they asked the legislature to not allow credit for taxes paid on other states for s corporations, and they'd like to fix that now. Currently, other password entities like partnerships and LSVs are allowed to do this, So so making this change would allow corporations that same treatment. Section two grants the department authority to investigate whether a bona project or tenant relationship exists for purposes of applying higher property transfer tax rate. If you remember from a couple of sessions ago, there was a new higher rate added that was aimed at transfers of what would be second homes. Part of that relied on a landlord certificate as eliminating the properties that were going be used for long term rentals, private practice attorneys in Vermont picked up on a pretty obvious loophole there, which was if you can set this up where you rent it to yourselves or to a family member, then you don't have to pay the higher rate. So this language gives the department taxes the ability to kind of look through those sorts of transactions and apply the higher rate as we said.

[Unidentified Senator (Member)]: This is for the buyer. So the buyer has to apply to

[Ernie (Legislative Counsel)]: The the buyer has to attest that it can be ripped out, and then one way to look at that is whether in the next year a landlord certificate was filed.

[Unidentified Senator (Member)]: They don't have to do that at the time. Say it.

[Ernie (Legislative Counsel)]: It would be his perspective or what how it would be used for the next year. Okay. But in this case, an apartment could get a little more certificate and say, wait. Like Right. Bill Smith Holding Company is renting to Bill Smith's. Let's take a look at this. Right. So sections three and four would have keep so there's a situation with current use where if a portion of a parcel being developed, there was a resolution years ago at this point, and those worked out where it's changed so that when a portion of a parcel that's enrolled in current use is unenrolled, the valuation for purposes of calculating life exchange tax is done by valuing that portion that's either developed or being unrolled by itself as its own parcel. So that requires extra work for the assessing conditions, and some municipalities don't have the capacity to do that very quickly. Occurrences of taxpayers trying to own the land or they develop land and they're waiting to know how much land exchange tax they but the municipality is just not able to do the assessment. So so the changes in sections three and four, after if thirty days has passed, PVR can step in and do the evaluation themselves. There's also language there saying that if PVR does that, then the process for the municipality to get caught up in the tax money doesn't happen because they didn't do their work. So that's basically that with the intent of trying to speed the process up for a tax payer so that you know how much tax to the student. Sections four a through four c were things that were added by Singing Finance. The first one all three of these came at the request of the apartment while the building was suspended. Four a changes one of the statute relating to current use by changing it from when it comes to a force management plan that has to be submitted every year. Under current law, the department's interpretation is it's written in a way that requires if there are multiple owners, that every owner needs to sign that force management plan. So this this change, clarifies that one owner can sign the Forest Management Plan, and it also adds some links saying that a Forest or on behalf of the owner can sign the Forest Management Plan. So that's the challenge. In four B, there's a change for when a third party is filing an objection to a property valuation appeal. There's a process for that under current law and the fourteen days that's given for that objection to be made is extensive to thirty days. DVR had testified that because of the mail being slower these days and other reasons, that sometimes the window closes before people get much of a chance. So this this just opens that up. Four six repeals a section in Act 73 that relates to some changes to the grand list of contents. We'll cover this in section 20 later, but basically, that that language from Act 73 is being replaced here. It's it has nothing to do with the other reforms things and act 73. It has to do with data collection for the purpose of state the state doing mapping. The language is improved upon in section 20 here, so the department asked to repeal that other section. Just as a note, the ed reform bill that's that's making its way through the house also repeals this section because it's it's known that it's gonna be replaced for detention's rent. Funds. Section five changes the calculation for payment to municipalities for municipal property taxes, loss due to flooded or flooded development properties. This change is for that municipal stabilization program that was totally created. There's a calculation for reimbursing the towns under the laws it's written, so it would be used at current year's tax rates to do that. That becomes administratively difficult, so change here would be used to previous year's tax rates, which makes it in line with other similar competitions that have been on with them. Section six has provisions addressing cases where a communication service provider felt suspended for the PVR for property valuation. This is also some housekeeping related to recent change. In the last few sessions, there's been a transition from what was the telephone personal property tax to having PVR value communications property impacting the tax through the property tax system. When that transition was made in statutes, the provisions that exist for municipalities to apply penalties for taxpayers who don't put who aren't already playing along and spending inventories. So so there's language here adding those same penalties, and it's penalty of $100 for not complying. Another change that was made in this section was maintenance and finance clarifying on top of the law's pretty clear, but it's expressly clarifying that one way broadcasters like one way radio or one way television communications are not to be valued using this methodology.

[Unidentified Senator (Member)]: Valued using some other methodology? Yeah. The the current law.

[Ernie (Legislative Counsel)]: There was never an intention for this. This is meant for two way communication like like Telma. There's there was never any attention for a radio to fall under the same Cell towers, I think, do fall under communication. The this came up in Senate Finance because EDR is in the midst of starting its first inventory to start taking out its work, and they sent letters to some broadcasters. And I think that they sent those letters out trying to just kinda find out the lay of the land, and those broadcasters did not respond very well to being told that they might be caught up in something that they thought they were not caught up in, and attorneys told them that they did not apply to them, submitted a misunderstanding. PVR did testify that they would be willing for those inventories they sent out to accept inventory stating, We don't have this property. So that's my understanding, is that even if TBR sends out a request for an inventory that a taxpayer could respond to that, we don't have the biggest property. They wouldn't have the inventory all there just to prove that. But that is why CIM-five is making that clarification. Section seven clarifies the treatment of CHIP sites to be the same as TIF districts for purposes of the equalization study. This is just when CHIP was created, there wasn't any change to equalization study and how that's to be done when we want to do off future in CHIP. So this is clarifying that when PVR does the equalization study, they'll do CHIP to sample these values for the property value CHIP. Section eight is for purposes of the equalization study, it requires PVR to use 100% of the CLA when determining tax rates for municipalities that doesn't need a natural appraisal. Current law, there's a formula that PVR has to use for those municipalities. So let's say your municipality just did a natural appraisal. You might logically think that that means watch the OA will be 100 because it was just redone, but actually the professional formula that can result in something other than 100 even though there was a fresh master appraisal. This is just changing it so that it is always 100. Masters, like, in that year, I think,

[Unidentified Senator (Member)]: just When they say that just completed, does that mean it has to be

[Ernie (Legislative Counsel)]: completed in that year? In the previous year. Sections nine and ten extend the Health IT Buds sunset for five more years to 2031. Sections 11 through 14 go into education finance chapters and make some technical changes, changing inflators for use in various places for education finance. It changes the references from the NEEP inflator to NIFA. NEEP is an inflator that no longer exists, and practically speaking, NIPAs are being used for that as a replacement. Section 15 allows the property tax credit to be calculated using 100% of the property tax liability of the party to a separation of divorce who's living in the homestead even if the other party is still an owner. This was the only request this year that came from the taxpayer advocate, Department of Taxes. Under current law, if someone's going through a divorce, that means one of the parties is maybe living in the homestead, one of the parties is looking somewhere else. The way that that's calculated under our law is that only 50 of the credit would be available for the person living there because one of the owners stopped there. I think that's what's originally set up is where there were multiple owners, only one. Yeah. So in these cases, that they will fix it. They have a mechanism to fix it. Suggested, why don't you exchange the law rather than be having to fix these as they come in. Section 16 aligns the estate tax filing threshold with the tax liability threshold so the taxpayer shall require a follow-up return when the tax is due. Under current law, a taxpayer has to submit an estate tax return. I think the threshold is at 2,000,000 value of a state file, but there's no tax liability if the state's worth less than 5,000,000. So the department has asked, we would rather not receive so many returns that have no estate tax due because there's nothing we can do with it, and it's just something we process. I think originally that that was created to give the department the chance to look into estates when they think that there might be a problem. The department has said, we're not doing that and these zero returns are at least on back to Anderson. Section 17 extends the down payment assistance program to 2,031 and it also increases the maximum total award amount for the first year credit allocations from 350,000 to 350,000. So you may be familiar with the down payment assistance program, something that exists, the credits are awarded to a taxpayer, and then spread across five years. And there was a there was a request from department of one of the housing. DHF. DHF. The DHF, Vermont Housing. So they request the change in demands of the housing agreement. Sections eighteen and nineteen deal with a new federal tax credit that was created by HR1 last summer, the big tax bill, the big federal tax bill. That law created a tax credit of up to $1,700 per individual for contributions made to scholarship granting organizations. Part of that program and the participation of that program relies on each state identifying the scholarship granting organizations within the state and submitting it to the US Secretary and Treasury. If a state does not identify any STOs, then then there would be none for that state, which means that taxpayers would not be able to take a credit for contributing to any organization within the state. Vermont if if Vermont did not send the list, Vermonters could still contribute to an SGO in another state and take the federal tax credit. So but a lot of the state decision making around this is about whether Vermont will participate and whether Vermont will add additional requirements beyond the federal requirements for what an SGO has to do. There's been a few iterations of this throughout the session. It started with housewives and me saying Vermont's just not gonna participate. One of the concerns they had was that even though the federal law is passed, it's gonna come into effect in 2027. There's a mandate the IRS adopts the rules for this and those IRS regulations are not in existence yet. So, partly, like the landscape wasn't known. Like, one open question is, will those IRS regulations prevent states from limiting this program any further? So just does Vermont have the power to say, you know, we'll allow this, but we're only gonna recognize SGOs that focus certain types of students or students attending certain types of schools and so so that's kind of still an open question until the IRS dump those regulations to China until later this year. So Yeah. Said, we're not going to participate. Then there was a floor amendment in the house that that was accepted, the the past that changed it to Vermont could participate, but it's going to be through legislative enactments. And every year, legislature will pass a bill naming the SGOs and deciding what they want. So so it's the legislature giving itself to the power to determine that because the default will be that the governor would list the SGOs for this. So that passed the house, came to Senate Finance. The Department of Taxes testified that they would like it changed. The senate did have an existing bill proposed on this in s three twelve from senator Baumgartz that was passed out of senate education that would keep the SGO appointment authority with the governor, but place a few extra requirements on SGOs for them to be recognized and promoted. And Senate Finance took that version and put it in the amendment that you have, and also Senate Finance added a lot of reporting requirements and some extra requirements on top of what Senate Education has done. In addition to that, they added a provision trying to address the house's concern about the IRS regulations. So this so the version before you also has a provision stating that if the the Attorney General's Office will be charged with with following as a federal letter, If there's a federal enactment, federal regulation, or a judicial decision that invalidates any provision of the Vermont statute on this, then Vermont won't participate until the General Assembly amends the statute and Brexit. So the idea is that if IRS regulations say, no, Vermont, you cannot tailor this the way you used to do. Then it means that temporarily at least Vermont will not participate and not simply list. So that's the feedback. Okay. Sections 21 through 23 were a change that were those made always means, and and these sections haven't been changed since then. This limits the Department of Mission Wildlife's fee setting authority for licenses, including admission for certain uses, and prohibits the license for public access. It also repeals the department's regulation regarding fees for use of department lands and properties. That repeal would be next year, though. So under this language, the fees that exist under department regulation will be repealed next summer. Between now and then, the department will report back to the general assembly for suggested fees for access to their lands, and the general seemed to put those fees in the statute. So, we're moving away from department having the setting authority to the legislature having that he said in Florida.

[Andrew Perchlik (Chair)]: A question. Are we gonna be like, is now the time, or do you think that we're gonna be talking more about each one of these sections?

[Unidentified Senator (Member)]: Well, we gotta talk about sections, again, if they come up with fiscal. So if you wanna talk about it now, then I'll Well, in

[Unidentified Senator (Member)]: that case.

[Andrew Perchlik (Chair)]: So that what you're just describing, as I'm reading here, is broader than what I had understood because the, so I just wanna make sure that I'm understanding. It repeals all of their ability. I guess that is something I've had thought about. But the, so it removes all of their ability to set fees. So any fee that they have that is not in statute otherwise, unless we act, is going away. Right, they would not be even charged. Everything would be one free if we if we didn't have.

[Ernie (Legislative Counsel)]: Between now and the end of next session, you have to ask. Mhmm. And and it's just the fees for like, the regulation on this, I wouldn't say it's more of a certain thing. It's for certain properties that they're interested in the fees associated with accessing properties. Michael Grady is the better person to talk in-depth about these things, because this is certainly his area. My understanding is this partly came out of a desire for the department to charge access fees for things like kayaking, things that are other than hunting or fishing or something, and that's why

[Unidentified Senator (Member)]: We took testimony on that, but what we did to make testimony on is what other piece that they have with this patent.

[Andrew Perchlik (Chair)]: And I'm also interested in that, in the description it includes the word tuition, so presumably that's like, you know

[Ernie (Legislative Counsel)]: People bring out a conservation camps?

[Andrew Perchlik (Chair)]: Okay.

[Unidentified Senator (Member)]: Yeah. So

[Unidentified Senator (Member)]: The deputy secretary of ANR did come by and say, they understand they lost the argument in finance about water access fee, but they didn't want it to be for all of their authorities. And do other agencies have these authorities? Parks and Rec is really

[Ernie (Legislative Counsel)]: the only significant one. They do have have They similar fees, think, of course. Yeah, earlier in the session, I looked at this and there are some other places where departments, agencies have a little bit of leeway in determining fees, but not not to this extent. I think it's far scarf. It's definitely comparable.

[Unidentified Senator (Member)]: So do you know, were they within? Reports. So in the bill itself, what was in the bill itself? Was it a recommendation to remove all fees or this is added, these sections were added in finance? House created. No house created needs yet?

[Ernie (Legislative Counsel)]: It came from ways and means. The finance did consider changing this and there was testimony

[Andrew Perchlik (Chair)]: The guy leaving.

[Ernie (Legislative Counsel)]: And so finance ended up deciding on just to leave the house originally.

[Unidentified Senator (Member)]: And it was all about putting a sticker on canoes and kayaks when they used the fishing access ring ups and so they've taken away all their authority as you saw it. Sorry.

[Unidentified Senator (Member)]: Yeah. That's the basic.

[Unidentified Senator (Member)]: That's the people at the same speed either way.

[Unidentified Senator (Member)]: Yes. Don't know. It's all the same way. What what if anything are we doing in here about this? And or did we change anything? Or Because you guys want to take that. We could entertain the amendment in our proposal that would limit the appeal just to access. Just to keep their authority for whatever else it is that they have to use on it.

[Unidentified Senator (Member)]: Question about that. If we took that out, we had because they can't charge anything from ramps, from nonfishing or without a license. That would not allow for them to put a sticker on the goose and gaiads that used to be absolutely.

[Unidentified Senator (Member)]: We could. We put the money in the budget as if they were certain we're not gonna be able to charge it.

[Unidentified Senator (Member)]: That's okay. But why would we just tell them we can't do it in the future?

[Unidentified Senator (Member)]: By all honesty, we could I would say it's not appropriations. More of a policy.

[Unidentified Senator (Member)]: It is policy. Did

[Unidentified Senator (Member)]: you guys have this?

[Unidentified Senator (Member)]: We did. We did talk about

[Andrew Perchlik (Chair)]: this, there were some strong opinions, diverging directions, and so the thought was that the line which we were looking at now talked about as, was a compromise to do the report and come back to tell us about peace that they want us. But

[Unidentified Senator (Member)]: Is there a report of language in the book? Yes. Yeah. You can. Was trying to make I'm

[Ernie (Legislative Counsel)]: I'm seeking another temper now.

[Unidentified Senator (Member)]: Have you ever seen the language that I'm talking about from ANR? About I'm aware of it.

[Ernie (Legislative Counsel)]: My understanding of the language from ANR is one of the main goals of that seems to be to avoid situation where their regulations get repealed and then they have to make new points. And so it helps them skip the administrative rules process. But I've yeah. And then the general assembly can do whatever it wants.

[Andrew Perchlik (Chair)]: I could see that so

[Ernie (Legislative Counsel)]: the the thing that people had

[Andrew Perchlik (Chair)]: a problem with was charging for the ramp access. And it does seem that this removing their ability to set these is some kind of broader than the past few fishing and if that's where the conundrum lies, I'm happy to try to limit it to that.

[Unidentified Senator (Member)]: I guess another option your committee proposal on the floor saying your understanding was it was going to be limited to the one issue that you don't score the floor. Yeah. That that's not a bad idea, but there are can't speak for other people. Personally, I I have problems with the whole concept. Right. And for many reasons, and I don't know if we wanna get into those today right now, but, you know, those access areas, they're paid for with Robert monies specifically for those uses, and that's why they're trying to capture the people that aren't paying the. And I get that. I'm in favor of that. The whole thing, the whole concept,

[Unidentified Senator (Member)]: I'd like to eat. But

[Unidentified Senator (Member)]: the second part where they're taking away the future, I guess it gets into some policy of fish and wildlife, which we would have to take testimony to fish and wildlife. So I'd rather have a community jurisdiction than than get up. Yeah. This is our origin. And I would prefer to see Michael Brady or

[Ernie (Legislative Counsel)]: There

[Unidentified Senator (Member)]: could be other amendments that further change it. Because we're originally from the money point, we were like, we would rather charge fees than we got back up general funds. I'm not giving them. Okay. So

[Andrew Perchlik (Chair)]: So I'll I'll forward back on how that goes.

[Unidentified Senator (Member)]: You'll assume I think we'll have kind of a pile of the bills on the floor. We'll have to put it into miscellaneous tax bill, deal bill. Don't I know what order.

[Unidentified Senator (Member)]: You'll have some time. Sorry. You do not. I've gotta keep you at this point. Because all of them need to move relatively quickly.

[Unidentified Senator (Member)]: Yeah. So instead of us holding enough credit schedule testimony to come up, we'll look for a slower inspection. Did you ever have the bill agreement, or did just talk about that issue?

[Andrew Perchlik (Chair)]: No, we talked about it as part of our budget letter, but then we decided to not include anything about it in the letter. It says, Let it stand

[Unidentified Senator (Member)]: as bus protection.

[Christopher Rupe (Joint Fiscal Office)]: So I

[Unidentified Senator (Member)]: think it's appropriate to talk about it on the floor since you didn't have it in your committee. Have

[Unidentified Senator (Member)]: you looked, has your committee looked at the language, or will you look at the language?

[Andrew Perchlik (Chair)]: We have not. We had the commissioner in to talk about it as a consequence. Before this time. Before this time. Was actually

[Unidentified Senator (Member)]: after.

[Unidentified Senator (Member)]: Right. It was it

[Andrew Perchlik (Chair)]: was after they had discussed it. So we have not actually looked at how I can change.

[Unidentified Senator (Member)]: Can I just ask if this is skull that I wrote true? Somebody told me that there was a.

[Christopher Rupe (Joint Fiscal Office)]: Or these for bird walkers? No. No.

[Andrew Perchlik (Chair)]: So that was that's odd. And we in the rollout of this idea, it got I think that was how it's characterized, and that's not out here.

[Unidentified Senator (Member)]: Oh god.

[Unidentified Senator (Member)]: Look, you're standing on the phone line, looking at a river, white light, and getting in your kayak, they could say. You have to pay three.

[Unidentified Senator (Member)]: You need to stick for anything. Yes.

[Unidentified Senator (Member)]: What say, it's another in a flip changing of rules, it's another thing where people do this all the time, kick the general fund around because we end up holding everybody's back. Right. And so from that point of view, I would argue that this really is one of those things that it it's happening all the time.

[Unidentified Senator (Member)]: The 50,000 that we backfilled, it was one time. We did it one time since didn't know it in the bill, and we didn't know it was so it's done better to backfill it. But that would be extra money we'd have at the bottom line later. It changes the policy. Well, I'm worried about people in the future too. You know?

[Unidentified Senator (Member)]: It's It's worse. Worse.

[Ernie (Legislative Counsel)]: Okay. Moving on. 24 through commotion. Yes. We've got a big chunk that we

[Sean (Joint Fiscal Office)]: can take care of real

[Ernie (Legislative Counsel)]: quick. There's it's '20 four through 48 are conforming changes that remove the brand list submission date from April 1 to January 1. This is to happen kind of in line with the regional assessment district's concept that's happening with the reform bill. The idea is that having the Grand Isle Smith as of January 1 instead of April 1 we'll get more time for the appeals process and other things to take place, sort of gives more breathing room to that, so I'm told, probably that goes through the process. So again, that would not happen until the future. Section 49 removes the statutory language powering the director of PVR to supervise the collection of delinquent taxes by municipalities. This is some holdover provisions from with EVR's own department essentially and had other duties. So the department testified that EVR's not really doing this, and we'd like to statute. So that's where we've removed. Sections 50 through 53 or some sections related to taking the fees or not the fees, but the the expenses that are being paid for right now out of the general fund for EBR to reimburse municipalities for different costs related to maintaining the brand list and helping the equalization study to having that paid for out of the final submission fund. There were some members who were not big fans of that on the house floor, and there's an amendment to remove those sections, and that passed. So those sections are gone. There's no touching of the pile special fund or PVR related expenses. Section 54 is a study, a ten year study on Vermont taxes to be conducted by JFO. It's an appropriation of a 100,000 for that study. If you have questions about all the JFO will study, I'll leave it to them.

[Unidentified Senator (Member)]: You said you do it every 10 every year, but it's pretty good every so you do it every ten years. Every ten years. They do it.

[Ernie (Legislative Counsel)]: Not to be confused with, you know, the tax commission and things like that. This is this is a different study that's done by staff. Section 55 is a very big part of the bill. Is the primary place where Vermont would be decoupling from some areas of federal law that at least impartially relate to the changes that were done to federal income tax laws last summer for HR one. One of the changes is to decouple from federal treatment for bonus depreciation on qualified production property. HR1 had changed the things so that non residential properties that are used for agricultural factories and chemical factories could, the owners depreciate the value of those as a deduction and do it all in one year. Usually, for real property like that, it would be depreciated across thirty nine years other federal taxes. So this this change allows for that's what, you know, bonus depreciation means is to be able to do it all at once, and that was gonna be something that does flow through to Vermont and have a revenue impact here. So thought that we should

[Unidentified Senator (Member)]: be comfortable from that one. As expected. Tax year '25. Tax year. Tax year. From this.

[Ernie (Legislative Counsel)]: This is all all of these changes are designed to not have a gap between when they take the test separately and when they look at Vermont. So so we're we linked out to tax year '25. So all of these decoupling changes as written would link up at best in the same budget. '25. Yes. That's the link up. So so that's one change. Oh, I do wanna step back, though, when when talking about this, remind you that there were over a 100 tax sections in HR one, many changes, and that's not counting the energy credit sanctions, which also just has. So I'm talking about the things that are being decoupled from the response, but and there's a handful of those things. Everything else that was changed in federal level, Vermont is coupling to here, and so that might not be immediately obvious. So to help with the context, these are the few things that that decision was made that Vermont will not have flow through on the Vermont income taxes. That's one. Second is there's a federal deduction for domestic research and experimental procedures. The change that was made so there was a change made in this area under the Tax Cuts and Jobs Act where those domestic there's domestic and there's foreign deduction for each of categories those of expenditures for research and experimental procedures. H. R. One, Texas and Jobs Act, I'll say first, changed it so that those expenses on returns had to be amortized over five years for domestic, for foreign, they're actually fifteen years. HR1 has changed it back to how it was before, where those expenses can be fully deducted in the year in which there was the cost, and that was something that would flow through the front. So the house solution, so to speak, was for smaller businesses, and this is using federal definitions, a business that has $31,000,000 in assets or less, they would allow, they would basically promote continuity for for that. But for businesses larger than that, they would have to continue to amortize the effective research for enrollment procedures over five years. And there was a lot of drafting in here, a lot of probably some of the most legalese we now have in all of

[Sean (Joint Fiscal Office)]: our

[Ernie (Legislative Counsel)]: statutes, because we had to take into account what happens when a business goes from small to large, large to small. There was also a part of this where, so for the past few years, they've had to amortize. Well, what do we do about that? Because the Feds were going to allow the small business companies, 31,000,000 access small business companies, they were gonna let them catch up all at once, and in the first year, take all the expenses for even the previous year so they haven't gotten the pay yet. So there's a lot of language in here to account for all of those possibilities, including some changes that were made in Senate Finance because for at least one or two type of issues, we had to be that as a clarifying language. And as the one came out of the house, after our work in the tax department, we decided that that we needed even even more clarification. That's what the overall approach is though, which you have on that. There's federal deductions for foreign sourced income. So at the federal level, under Tax Cuts and Jobs Act, before Tax Cuts and Jobs Act, I'll say, that when it came to certain types of income that were from foreign controlled corporations, like corporations that exist in another country, but most of the ownership is actual, like domestic taxpayers here in The US, It used to be that basically the income that came that came out of those that type of business would get taxed when that money comes back to The US than ever does. And one of the problems was that the Tax and Jobs Act tried to address was through a lot of tricks, we'll say, that money can perpetually just stay outside The US's reach. Tax Cuts and Jobs Act made changes and started taxing basically a new type of income. Some of are guilty, there's something called FDDI.

[Unidentified Senator (Member)]: We don't need to know all.

[Ernie (Legislative Counsel)]: You don't to know all that.

[Unidentified Senator (Member)]: It's scary what you're saying. All this money going out of The United States when that

[Ernie (Legislative Counsel)]: was It was it's stuff like you you you could take intellectual property, for instance, and you could put it in a corporation that's in another country, and then the income from that intellectual property starts to be be sourced to that country. And so yeah. And there was an element of this where intangible property was an issue. Uh-huh. So the first iteration or tax cuts to jump back, I promise I'm gonna try to listen to George Foxman. But the first iteration of it trying to pretend to get at that at that intellectual property through some, like, kind of proxy math, they stopped pretending with HR one that this is about only about intangible property, and so the map relating to that was changed. There were a lot of changes. Long story short, under HR1, this type of income, changed some of the deductions that were available because there is some recognition that some of this income is actually legitimately foreign. So they changed some of the calculations so the deductions were not as generous as they've been, but there's a tax credit or tax paid to another country that was increased federally. Well, for Vermont, the deduction part of it would have flowed flown through, and it would have meant a slight increase in revenue from Vermont that does not. And the tax credit, though, part that's available federally does not flow through. When when looked at all of this, they thought the reason these deduction deductions that do exist for this type of income, they exist out of recognizing federal election by level, at least partially, that not all of this is US. So we're gonna allow deductions. What your bill does here, what your language does, is Vermont does not allow those deductions at all anymore. So it's not a direct response to what was happening in HR one. It was more of a taking a look at the whole picture and saying, we in in Vermont, we have single sales factor portion when when it comes to corporate income taxes. And that means that we are we do already have a process to kinda narrow down what part of this income is Vermont income based on sales into Vermont, using Vermont as the market. Allowing a deduction to try to separate out what's US, what's foreign isn't necessary was the logic. The logic was we are going to let our apportionment sorted out and we're not going to allow these deductions anymore. And so that will delay you says that you have. And has the numbers on it, but this is this is one of the changes that creates the most revenue sensitive, these changes in the event. So it's yeah. I talk long enough to my computer. Last one. Aside from there's a lot of clarifying provisions and a lot of drafting stuff in here, but the last big policy change was it's only for personal income taxes because this is something that only relates to personal income taxes. At the federal level, there's something called qualified small business stock that going back more than ten years, the federal level, there's an exclusion that exists for gains from something called qualified small business stock. How this typically goes is there's a startup corporation that's just getting off the ground. They need investors, and then they can issue something called qualified small business stock, and should try to get that additional capital. The only corporations that can issue this stock, before HR one, they had to have 50,000,000 in assets or less. HR one what they made HR one made several changes to expand this solution. One of them is to say that now we're gonna consider them a small business signature of the stock if they have 75000000¢ or less. But if you as an investor put money into this or give them the stock at the federal level each year, you can sell the stock after you've held it for at least five years. You could sell it, and your gains would not be taxed at all up to 15,000,000 in gains, and that's for each issuer. So if you're investing in several of these, then then you could have more than that. That 15,000,000 in gains was something that was increased by HR one. Before, it was 10,000,000 for that. So so there's a lot of lot of areas where was expanded. Anyways, the language you have is saying, you know what? Vermont is going to actually this this exclusion has up until now been flowing through Vermont. But language you have would decouple Vermont from the exclusion altogether and just say that taxpayers that have those gains, those are going to be treated like capital gains like anything else and for all taxes going forward.

[Unidentified Senator (Member)]: Sounds good.

[Ernie (Legislative Counsel)]: Sections 56, 57, add a clarifying language relating to apportionment when it comes to personal income tax. I know I'm I'm getting long here, so I'm gonna give you the short version. The way that we do a portion of our corporate income tax has been updated recently, and it's in a

[Unidentified Senator (Member)]: pretty good place. That's all we

[Ernie (Legislative Counsel)]: need to Personal income tax personal income tax in contrast has not been updated recently and has not been updated as remark as decoupled in the personal income tax area. So the way that this statute's written at least has been nonsensical. There's language here that's correct that to make it flow more like corporate. And just say that this change could affect situations in which the person being taxed way too much, they have income outside of Vermont, or taxed way too little, because we're not taking everything that's counting the rest of the law does. I'll just leave it at Section 58 changes the research and development tax credit from twenty seven percent of the federal credit to 75%. What does this take? This is two years out, so does not immediately affect the budget for now. This was a way that we talked about some of that research and development, changes to the research and development deduction here and to put some of the money back towards research and development by putting it into this credit. This is the credit that's only for expenditures in Vermont, so it kinda focuses it there. But it increases the credit amount quite a lot, as you can see, 27 to 75. Next section, section 59, just with the Downtown Village Center Tax Credit, the house version had increased the amount awarded annually for this credit by a million. Senate Finance moved that increased out of 500. Section sixteen sixty one is the annual link up. These are the sections that say everything we didn't decouple from before from HR1 will be your coupling to, coupling to the entire federal code for all of the things that we haven't been commercially taken out. And then section sixty two and sixty three, change some allocations of revenue. So 27 of the purchase and use tax revenue will be changed, will be deposited in the education fund under this language. That's a change from 33% currently. 73% of person in use tax revenue is positive in the transportation fund, so that's an increase from 66. 29% of meals rooms tax revenues is in the education fund, should have changed from 25, and then 65% of meals and rooms tax revenues are positive in the internal fund. Changes to be done. So it's moving. Yeah. We're moving the renal. You know? And moving And surprise.

[Unidentified Senator (Member)]: I'm not talk about this. I'm

[Unidentified Senator (Member)]: pretty

[Unidentified Senator (Member)]: sure need the meals and rooms tax or a percentage of all the two for children in general.

[Ernie (Legislative Counsel)]: Section 63 were changes made in the Senate Finance Act. There's language there that goes through the recent history of the Burlington Waterfront tip, restates the law stating that the city may retain 75% state and 100% municipal taxing terminals and there's also a a sectional review there, sectional law saying that Burlington needs to submit updated vaccine permit financing plan on 11/15/2029. The full intention of this is to just give the legislature's intent and to state the current situation and it's all. Section 64 is your effective dates. I think one that you asked about was at the bottom subdivision a. Yeah. So the decoupling and the annual link up are all happening together and they're retroactive to 01/01/2026 and apply a tax year beginning on and after January 2025. People who filed their taxes this year are filing for tax year 2025. This does affect that. For some of these things, it's possible that people owe more than what they thought they owed and they filed this year. The department will be responsible for conducting outreach to try to correct that. I don't think there's a lot of expectation that a lot of money is going to be the federal government draft, if you like that. But that is how it would probably work, and a lot that's and that has to do with the way we've done and how when Vermont responds to federal changes on a lag, It's reactionary and our lymphocytic sessions starts to change. And that's it unless you have more questions.

[Unidentified Senator (Member)]: Now, I'm going to do physical thing. You.

[Ernie (Legislative Counsel)]: Alright.

[Christopher Rupe (Joint Fiscal Office)]: Well, good afternoon, everyone. Christopher from the Joint Fiscal Office. I will try to be brief and succinct when going to the fiscal note, and let me get into the weeds of the corporate taxes page and answer any questions on that because, apparently, I just start glazing over at the very thought. What we typically do with miscellaneous tax bill is focus the fiscal note on the sections that are particularly interesting or relevant from, you know, a financial perspective. So that's what I'm gonna do. I'm gonna start, though, by just giving you the bottom line up front that the big bill that you all voted out reflects all of this. So there are no conflicts between the big bill that you just put forth and what's in this bill. They are harmonized. The one substantive change that the senate finance committee made to the numbers relative to what came out of the house was on the downtown and village center tax credit by expanding it by half 1,000,000 instead of the fact in section 59. Otherwise, everything else is the same that came over some of the other five. In total of the impacts of all of the tax credit and policy changes and the one time appropriation to JFO to do the ten year tax study, everything breaks out to the numbers at the very bottom of table one. So you all accommodated the reduction of 3,960,000 in FY twenty six and the up in FY twenty seven by slightly adjusting the numbers and how much carried forward from FY twenty six into FY twenty seven. So you can you can see here that the transportation fund benefits from this to the tune of about $10,000,000,000 as a result of that shift of the Nielsen rooms and then purchase and use tax. The education fund is essentially neutral on that. We'll get to it later on that walks through those numbers. But who's gonna fly through here? We're likely to jump in with any questions so I can stop it. I don't wanna prolong this any longer than we have to because

[Unidentified Senator (Member)]: I know you're open to hear.

[Christopher Rupe (Joint Fiscal Office)]: The next couple of sections here, just give a very high level section by section that gives you, in one or two sentences, an idea of what is going on in every section. And we'll leave a little bread crumb here if there's you know, see description means that there's an elaboration further on.

[Unidentified Senator (Member)]: A lot of de

[Christopher Rupe (Joint Fiscal Office)]: Yeah. There's a lot of de minimis and a lot of just technical cleanup that really doesn't have an impact. I'm gonna skip over some of these and really just focus on Great big change. The ones that are most relevant to the committee. So sections I and 10 have to do with the health IT fund and the health care claims tax. I am bringing this up because similar language came over in the gov rec, big bill language, where every few years, the legislature extends the Health IT Fund and the claims tax that funds it. This year, that language is no longer in the big bill because it's in the miscellaneous tax bill, and the extension is for five years. So that just continues status quo. I know given that some efforts here are also on health and welfare, you might find this interesting, I wanted to make sure you knew where it is. The down payment assistance tax credit is proposed to be extended for another period of time at a slightly higher rate of $350,000 in total first year credit allocations. Under current law, that was at 250,000. There is a great little diagram here that BHFA put together that we copied and pasted because it was brilliant and clear. We gave them a credit, but if you look at the green bar, it shows you what the additional impact of this proposal will be in future years. That first year allocation carries forward for five years in each tranche. So you see that as credits roll on and then roll off, the impact of the change fluctuates a little bit over time. But starting in FY '27, that's additional $350,000 of org on revenue, and that shifts a little bit over time. And then we talked about the fish and wildlife issue here. And you all I just wanted to point out that your budget did backfill down to $50,000 in FY twenty seven. Thank you. The ten year tax study, the last time we did that was approximately nine years ago. This would be the fourth one that I had found that JFO has done. We found some going back to the nineties. And just to refresh the committee's memory, every ten years, we do a retrospective deep dive over our, looking at what happened in the ten years since the last study, and look at changes to our tax code, who bears the tax responsibility for our different taxes, how do we compare to other states, we look at some other issues there, but it's a really helpful resource document that it's not like the tax commissions that have happened in the past. This is something that's staff driven, and it's a very big referral. Obviously, often bring in some outside consulting expertise to help us with little pieces So of there's a 100,000 one time appropriation to help us fund those. Oxides expenses are part of it or is it just It's not really part of it, but some of the things that we have done are we've hired accounting firms to run sample returns for, like, different family configurations and business structures so we can sort of put hypotheticals together around who pays and what does our tax responsibility look like. We've also done some graphic design and editing work and things like that. One of the focuses we're gonna look at are, for this year, how does some of our tax credits and tax provisions at the state level interact with eligibility for benefit programs? Some of you have heard this concept of the benefits cliff. And rather than looking at every single program out there, we're going to look at significant programs and how our tax structure might exacerbate or mitigate any of those cliff issues, and are there are there recommendations that will come out of that? Why why don't we look at tax expenditures? Tax expenditures? So separate lift that we do every two years, but that I can see is But

[Unidentified Senator (Member)]: when you do that, that's just listing. Right? This is just more of, like, some analysis of the facts and, like, should we compare some other states and where the burden Yeah.

[Christopher Rupe (Joint Fiscal Office)]: Do you wanna jump into that?

[Sean (Joint Fiscal Office)]: Yeah. So nothing Chris said is incorrect. But, you know, part of the I mean, I'll just use an example. Part of the study will be looking at sales and use, for example. And part of that discussion will be looking at what the base for sales and uses. And of course, it's like exemptions from sales and use tax are subtractions from the base that you put in. So it's not like an explicit study of tax expenditures, but there will be some

[Unidentified Senator (Member)]: Some exploration bigger ones in there.

[Christopher Rupe (Joint Fiscal Office)]: And we are doing the tax expenditure report again also this year too. Right. Yeah. Because we do that every two years.

[Unidentified Senator (Member)]: Right. But that's just kinda list, and I wonder if we ever go through them all, and then you kinda I guess, have to do the legislative stuff. We're looking at all the tax expenditures. It's expenditures. Accounting for

[Christopher Rupe (Joint Fiscal Office)]: Yeah. I mean, we we don't list them. We also quantify them and give you all the statutory references, and then, again, it's up to you all to figure out how move in. Yeah.

[Unidentified Senator (Member)]: Still are still worth doing in life. Okay.

[Christopher Rupe (Joint Fiscal Office)]: Sections 55, sixty, and sixty one all relate to the federal makeup and decoupling that Ernie gave you a exhaustive walkthrough of. That's the

[Unidentified Senator (Member)]: could have been more. So much more.

[Christopher Rupe (Joint Fiscal Office)]: There's some language around the r and d credit as well, but, really, I wanted to bring your attention down to this table here that summarizes all of the tax the effects of the tax policy provisions. So these roll up into that chart on the very, very front page, but this itemizes what each provision does and how Florence moves the needle. So you see some downs and some ups. You know? If you see a negative, that means it is we are we are forgoing revenue to the general fund. A positive is an increase, but when you look at all of it, it shakes out to, you know, a little over $14,000,000 when we go to '27, and when the impact of the R and D tax credit in section 58 hits in FY '28, the number comes down soon. And again, these numbers were all built into your budget spreadsheet. Do you have anything to

[Sean (Joint Fiscal Office)]: If I may, just to give you this committee a little context about why you really care about some of these provisions, why they matter to you. So we've, we had initially, but the the the Department Department of on the effects of HR one that suggested it was going to be very muted. But, you know, after we got more information and we were able to update estimates, if you think about this chart in the fiscal year columns, assuming normal link up and deformity with HR1, For fiscal year twenty six, we've been looking at a $21,000,000 hole that was not accounted for in BAA. And then for fiscal year twenty seven, that would have grown to about a $35,000,000 hole that was not accounted for in the gut wreck. And was less money than was in the consensus forecast. Very much would have offended your work and the money available for building the budget.

[Christopher Rupe (Joint Fiscal Office)]: That's important, Sean. We've been we've been talking a lot since the bill since HR one passed in the summer about what impacts will flow through Vermont and what won't. And fortunately, most of the fortunately for us, most of the personal income tax provisions that you've heard a lot about in the news, like no tax on the overtime, things like that, that does not flow through the Vermont because we start our return at linking to the federal definition of adjusted gross income, and all of those other provisions happen below the lump after that's calculated. So states that link up to, like, federal taxable income instead are seeing revenue shortfalls because this is FAST, but we are fortunate that we're not seeing that. One of the few areas where we are seeing the personal provisions is in the child independent care tax credit, because our credit is linked to a percentage of the federal credit. But your predecessors in the legislature were very helpful when they restructured the tax code to decouple considerably from the federal tax code base, the HEI. On the business side, we think it's federal, you know, net income, net taxable income there, so a lot of these changes do end up flowing through, so that's why some actions need to be taken. So the last really substantive thing I wanted to talk about was the Nielsen rooms and purchase and use shift. Just to remind everybody, the gov rec had proposed transferring $10,000,000 yeah. Before I go down, Mr. Robert, let's keep the number $10,000,000. $10,000,000 is the number that needs to go into the transportation fund in f y twenty seven to make the above right of the book, as three of you know. The governor proposed getting that $10,000,000 in by moving 10,000,000 from the general fund to the ed fund and then stepping down the amount of purchase and use tax that goes to the ed fund by $10,000,000 a year. So that would effectively put 10,000,000 additional into the t fund, know, give or take what's in belief, instead of the Ed fund. That would go out over five years at, you know, a $10,000,000 phase down. Of course, that beginning in FY twenty eight, when there's no explicit plan to backfill the Ed fund, that creates a hole in the Ed Fund that, when all else is being equal, is built through Education Property. Which is just the $10,000,000 that's just for the first year. Correct. So what this construct does is gets you to $10,000,000 by shifting the allocation of meals and rooms and purchase and use tax revenue. Nothing about the rate, nothing about the tax changes, it's just what major fund gets how much of the money. So 4% of the meals and rooms tax and, you know, six onethree percent or so of purchase and use shakes out to about $10,000,000 This proposal would make a roughly $10,000,000 shift of revenues a permanent arrangement, not just a one year deal, until a future legislature decides to make a change in that policy. But where you see all the impacts of the major funds net out here is that the T fund is up roughly $10,000,000 a year moving forward. The Ed fund is essentially neutral. And the general fund moves is what the Ed fund gains from those of the room stacks. So that's a $10,800,000 loss beginning in FY twenty seventeen. That is a lot of verbiage to basically move the rough equivalent of $10,000,000 worth of revenue from the general fund into the T fund. Is there a way Do

[Unidentified Senator (Member)]: you want me to complain now or later?

[Unidentified Senator (Member)]: You can complain now. I don't see why we're at

[Unidentified Senator (Member)]: the beginning of time when I very much could be on the edge of the downturn, most of, say, someplace between 4050% of all of the analysis that we could be on the edge of a downturn. We've been moving money from the general fund cash over to the T fund to allow the T fund to put together a new budget. Why would we do this whole construct of changing tax structures that is supporting the general fund, because the general fund is the loser. Why would we change tax structure now when things aren't going? The Ed fund isn't calm because there's a huge fight over the Ed fund, and the T Fund is not calm, and we have to get up. Why would we do that? Why is the General Fund has the money? Wouldn't the General Fund just transfer 10,000,000 to the T Fund to make it whole this year, leave the taxes where they are, and talk about a change in purchasing use starting next year. And that way, you don't adjust the tax structure in a time where our company is on the edge of something. And we've been moving money from, no one has been able to put together a T Bill for the last three years without money coming from the general So why would you change that? Wouldn't you put maybe some next year you could make those adjustments, I see this as the long time to short the general fund in meals and rooms tax that is rightfully grossing, but the long standing general.

[Unidentified Senator (Member)]: Morning, Shears. We're also moving general fund to the education fund every year because we don't got enough money in the education fund for

[Unidentified Senator (Member)]: Then we're we're money And we're that on a one time basis this year. So why would we change our policy when, you know, if I was looking for and everything was said, everything is rosy going forward, And it doesn't let it look like we're at the end. We're in the longest expansion in the history of the country. Fuel prices are up. And why would we if we're gonna do one time transfers over to the general fund, then why would we treat the transportation fund state money in next year as things begin to settle a little bit more in our thinking about everything, and we might have more information about the bond, then you could make a decision about whether you permanently want some taxes from one fund to another. But for right now, just keep doing the same thing we've been doing the last couple of years and make this a permanent decision. I don't want short. My view is the general fund takes care of poor people and this place does not like to take care of poor people. We will not raise taxes to support the less fortunate in our society. Would raise taxes to alleviate the property tax, but we will never commit to take care of the doorstep society.

[Unidentified Senator (Member)]: So you're you wanna just move ten nine from that five to the transportation? Yep. And leave the education fund. And leave

[Unidentified Senator (Member)]: the, and leave, or put it off the ear, whatever you do, and the money that is in here that I most object to the meals and rooms tax and adjusting that tax, okay, from the general.

[Unidentified Senator (Member)]: The issue that this would bring up is that we would now be changing taxes that were set by tax. Well,

[Unidentified Senator (Member)]: would say to them, the effect of everything they do lands right in our budgets.

[Unidentified Senator (Member)]: And I would say that since the general fund is a loser, it's fair game for us to talk about it because it's essentially affecting our ability.

[Unidentified Senator (Member)]: And it's not only affecting our ability to approach right now, it goes on forever. Right. Or can we change it? It keeps happening. And it keeps happening, and if the economy goes down, we're going to be in trouble.

[Unidentified Senator (Member)]: Mr. Chair, I'm not sure what the timeline is in your thinking for this bill, but it seems like a chair to chair discussion that this meeting on that station. I mean, the plan was to see if it could vote it out today. I don't know how important that is to get enough. I I don't think it is myself, especially because of the situation on the budget. How do other committee members feel about committing into this act?

[Unidentified Senator (Member)]: Think it's a good idea.

[Unidentified Senator (Member)]: He wouldn't he wouldn't. Okay. I think we went through all the fiscal impacts. Yeah. The rest

[Christopher Rupe (Joint Fiscal Office)]: of it's just some language explaining what the verbiage around Burlington Waterpark diff is, but he's still facing impact associated with that. Burlington. Never ending.

[Unidentified Senator (Member)]: Never ending. Thank you, and we'll come back to 09:33. We were gonna pick up 09:40, but Alan is, like, spitting us in between many different things. We picture you're around three.

[Unidentified Senator (Member)]: Right. Three. Okay. So we'll have

[Unidentified Senator (Member)]: a quick fifteen minutes of 03:00 to try to vote out at night. Okay. Well, at 03:00. No. 09:47.

[Unidentified Senator (Member)]: That's good.

[Unidentified Senator (Member)]: No. Coming out of

[Sean (Joint Fiscal Office)]: We have to come in

[Unidentified Senator (Member)]: to nine. Let everyone. We're meeting at 09:40.