Vermont Legislature SmartTranscripts:

[Speaker 0]: You're live. I know. Welcome. Welcome back to center economic development housing and general affairs. It is Wednesday, January 14. Oh, how exciting. Good reminder that it's the fourteenth. And we're going to begin with f one ninety eight, and that's relating to the regulation and taxation of tobacco products and tobacco substitutes. And I'll remind everybody, we are the committee that not over only oversees economic development, we oversee consumer protection. We This is one of our key consumer protection bills we'll be looking at this year. Thank you, Thomas. And so to begin our discussion of this, we're going to turn to the lead sponsor of the bill, Ginny Senator Lyons, take it away. Well thank you for having me

[Sen. Ginny Lyons]: in, Senator Ginny Lyons. Am sponsoring S-one 198 along

[David Weeks (Committee Clerk)]: with the chair

[Sen. Ginny Lyons]: and obviously I've talked from the public health perspective in this bill and the importance of restricting access of nicotine particularly for pre adolescents and adolescents which is integrated within the bill itself. I understand also there are provisions in the bill that we have worked on previously for example purchase use and possession eliminating that. Also, added position that's funded through the fund, the tobacco fund based on fines that would be a limited position for investigation of violations of the of the law relating to tobacco and tobacco substitutes. So just as a a pre just looking at this, the amount of nicotine that is consumed by adolescents and preadolescents can have a significant effect on brain development. We know that. We know that up until the age of 25, our neural pathways are developing. They understand that the effect on that development, it can result in behavioral changes if nicotine is consumed. And they also know that there can be long long term changes. Well, we know about cognitive impairment. We know about mood disorder. We know that one of the long term events is impulse control. So the more that we can do to understand how much nicotine is in some of the tobacco products and tobacco substitutes, the better off we are in terms of limiting access for adolescents. Right now, tobacco substitutes don't have the tobacco stamp on them that cigarettes do and other tobacco products have, and so one of the things that this bill will do will will add the stamp for a fee dependent on the level of nicotine in the product. So if it's five milligrams or less, one level of payment. If it's five mill higher than five milligrams, another payment. So the tax stamp will be dependent upon the content within this tobacco substitute. And so why is this important? One cigarette contains about two milligrams of nicotine. Our tobacco substitutes contain anywhere

[Sen. Randy Brock (Vice Chair)]: from

[Sen. Ginny Lyons]: five or two up to fifty seven or fifty nine milligrams of nicotine. It's a huge ball up in dose that if when kids are exposed to this can cause and result of addiction. So anything that we can put in place that helps us understand how much nicotine is there and adds a regulatory oversight, which would be would would include the investigator position that I talked about earlier and allow wholesale dealers to purchase and put the stamp on the product, make sure it's there. Those are all things that are included within the within the bill. And as you go through the bill, I hope that you will consider the importance of what I'm saying in terms of limiting access, but also not blaming the child. Rather, it is the access through purchasing that someone is selling to kids who are minors and they're so it's it's not the kid who should be punished for this, rather it's the the seller. And so that's implicit within the purchase use of possession removing that those sections of statute that currently there.

[Jennifer Carbee (Legislative Counsel)]: I don't know what else to say

[Sen. Ginny Lyons]: here because as you go through the bill and Jen will go through the bill in detail with you and there's a lot of detail. Yeah. That that's more pertinent to your committee, but bottom line is what are we trying to do. And for me, it's trying to ensure that access remains at the adult level. As long as we have this stuff out there, keep it at the adult level. There are some there's some marketing issues within the bill because right now, vape products are very attractive to teenagers. They look like pencils or they look like pens, and

[David Weeks (Committee Clerk)]: I

[Sen. Ginny Lyons]: can

[David Weeks (Committee Clerk)]: share experiences with you. I'm sure we all can

[Sen. Ginny Lyons]: do that. We know that there are certain types of electrified vape products that will result in greater vaporization. So there's an increased rate of absorption. So it takes ten to twenty seconds to get nicotine from cigarettes into the into the brain. That's a short time with vape products that's it's sort of variable, but when kids inhale vape, they're also inhaling heavy metals and other other products. So I'll stop there. I think

[Speaker 0]: we have a question Kesha Ram.

[David Weeks (Committee Clerk)]: So this is great

[Sen. Kesha Ram Hinsdale]: since we don't have the bill in front of us I want to make sure I understand this incorporates our committee had done some work last biennium to reduce or remove the penalty entirely from kits. Purchase use of the kits.

[Jennifer Carbee (Legislative Counsel)]: And so this

[Sen. Kesha Ram Hinsdale]: accomplishes that and goes further and sort of makes up the revenue potentially by seeking consumer information labeling. Right it is

[Sen. Ginny Lyons]: a consumer protection piece I mean if you consider kids are consumers of these products which is unfortunate We're trying to the adult brain is less affected in the way that I was describing about with with nicotine but kids brains vary.

[David Weeks (Committee Clerk)]: And we think this came up a lot of

[Sen. Kesha Ram Hinsdale]: sick and with commissioner Knight, but they had wanted an online regulator, like a forensic, I don't know, digital oversight because a lot of the nicotine liquids are like some dark part of the Internet you can buy them on.

[Jennifer Carbee (Legislative Counsel)]: We have we have Internet proficient within the bill.

[Sen. Ginny Lyons]: Okay. You know, so you can look at that with Jen.

[David Weeks (Committee Clerk)]: Yeah. Okay. We'll go through that

[Speaker 0]: with Jen. We're getting the bill now to walk through. I mean how are we controlling how successful and maybe this is a question for your own rubs because it would be interesting to know how successful we are controlling access at the moment. I'm not sure.

[Sen. Ginny Lyons]: I think what would be helpful to you would be to have some school teachers in and ask how successful. Because what I hear from my local folks is that kids are becoming nervous, agitated, jumping up, going to the restroom so that they can going to the bathroom so that

[David Weeks (Committee Clerk)]: they can quickly get grab

[Sen. Ginny Lyons]: a vape. The vapes that they own look like pencils or pens, and so they can hide beautifully. This is this is like contraband within schools, so this is rampant. And if you just walk down the street, you can see the tapes being used. And the and the and the liquid vapes that are purchased at the stores, you know, we don't know how much nicotine is in those. And we don't know what the we do know stuff in the vapers.

[Speaker 0]: Well, thank you. Jay, any other questions for Jenny? I think we have some great data.

[Sen. Randy Brock (Vice Chair)]: Will there testimony on your actual statistics on you?

[Speaker 0]: I think that's what's coming up. Yeah, that's probably

[Sen. Ginny Lyons]: a good idea. DOH can help or BMS can help with that. The the marketing piece, I think, you know, you're gonna have a discussion about that. My committee may wanna just do a little flyby on on some of this.

[Speaker 0]: Great. Thank

[Jennifer Carbee (Legislative Counsel)]: you. You for getting it. And Yes.

[Speaker 0]: Jen, come join us. And Tom, I assume you want to see it on computer. And, David, would you like a copy of it? Copy of it. I'll give you a copy. Okay.

[Jennifer Carbee (Legislative Counsel)]: Entitled an Accrediting to the Regulation and Taxation of Tobacco Products and Tobacco Substitutes. The bill starts in the chapter in Title VII on tobacco products and makes a number of changes in that chapter starting with definitions and expanding the scope of what is meant by tobacco license to include not just retail sales but also licenses that permit someone to engage in importation distribution wholesale sale or retail sale or combination and add to the types of products so not just tobacco products but tobacco substitutes which is statutes speak for e cigarettes and nicotine pouches and a number of things you'll see in the next definition. Substances containing nicotine or otherwise intended for use with a tobacco substitute or tobacco paraphernalia. All that comes under the scope of what our licensee may be selling. Definition of tobacco substitute some of this is changed for clarity, some of this is expanded to try to capture some emerging products. So tobacco substitute under existing law or particularly as the law was originally created on this topic was looking at e cigarettes but the scope of the products available is expanded and so we're defining the definition here to say a tobacco substitute is any product that meets all of the following conditions. Some of this is also necessary to do some of the tax changes. So the product is manufactured from, derived from, or contains tobacco or nicotine whether natural or synthetic including nicotine alkaloids and nicotine analogs which are some of the natural and synthetics. The product is intended for human consumption by smoking, chewing, inhaling, sucking, absorbing, or consuming in any other manner and the product is not a tobacco product as defined in this section. So it's not your sort of cigarettes, cigars, things like that. The term tobacco substitute includes and now we're getting into existing law electronic cigarettes and other electronic or battery powered devices that contain or are designed to deliver nicotine or other substances into the body through the inhalation of vapor and have not been approved by the FDA for tobacco cessation or other medical purposes. And it also the term tobacco substitute includes nicotine pouches and any liquids whether nicotine based or not and delivery devices sold separately for use with a tobacco substitute. So tobacco substitute comes up a lot in this bill so I want to make sure we're all clear in the definition. And then there's also an existing carve out saying cannabis products and tobacco cessation products are not tobacco substitutes. Cannabis products are dealt with under the cannabis statutes and tobacco cessation products are not specifically regulated in the state.

[David Weeks (Committee Clerk)]: So put

[Sen. Kesha Ram Hinsdale]: it to Fed, is it federal definition for a cessation product? I would

[Jennifer Carbee (Legislative Counsel)]: say the FDA, products approved by the U. S. Food and Drug Administration for tobacco cessation and other medical doses are just federally regulated.

[Sen. Kesha Ram Hinsdale]: Yeah I just want to make sure it's not some loophole for like I don't believe so.

[Jennifer Carbee (Legislative Counsel)]: If it's FDA approved then it's not for tobacco cessation or medical purposes not FDA approved as in they recognize it as a tobacco. So it's too correct. Yeah. All right. So we have the existing provisions around required licensure so nobody is allowed to engage in a retail sale of tobacco products, tobacco substitutes or tobacco paraphernalia without a tobacco license and there are some existing provisions that are not changing but one that is changing on in Subdivision 81 here is that there is currently the tobacco license is incorporated into the liquor license forms and applications so there's sort of a single process that includes the liquor license and this bill is decoupling liquor from tobacco licensing. So somebody who wanted to sell both in their establishment would need separate licenses not a. You can see in the next subdivision is striking out the option for a liquor tobacco license there. Two separate licenses of this business. Also under existing law there are requirements to for someone seeking a license or tobacco substitute endorsement to apply to the legislative body of the municipality where their thousand is located and pay certain fees. So this increases the fees for that get paid to the legislative body of the municipality from $110 to $1,000 for a tobacco license or removal of tobacco license and from $50 to $1,000 for a tobacco substitute endorsement. So some increases to those fees that get paid locally.

[Sen. Thomas Chittenden]: 50 to $1,000?

[Speaker 0]: Indeed. Well it's a major squeeze. Annually?

[Jennifer Carbee (Legislative Counsel)]: I believe these are annual licenses.

[Speaker 0]: So you're going to try and restrict access, you're going make it harder to provide.

[Jennifer Carbee (Legislative Counsel)]: Yes I know and I have to look to see the last time these things were updated. But And

[Speaker 0]: that would be helpful to find out what what when the last Yes. And I

[Jennifer Carbee (Legislative Counsel)]: don't know if the witnesses know. Happy to look at it. Okay. I think you're gonna hear more from the attorney general's office, the other witnesses about some of the rationale behind these changes. And then there's an existing penalty for someone who sells tobacco products, tobacco substitutes, or tobacco paraphernalia without the appropriate license or license endorsement and under the existing law it's a misdemeanor and a fine of up to $200 for a first offense and $500 for a second offense. This takes it out of the criminal realm and says it's a civil penalty and increases that from $200 for a first offense to $2,000 and from $500 for subsequent expense to $5,000

[Speaker 0]: So again really ramping up access

[Jennifer Carbee (Legislative Counsel)]: Right so that's the penalty for selling without the appropriate license for retail sale without the appropriate license. And then it again specifies that nobody can engage in the importation distribution wholesale sale or retail sale or a combination unless they're either a licensed wholesaler as defined in the tax statutes or has purchased them from a licensed wholesale dealer. Starting on the top of page seven this is what Senator Ram Hinsdale was asking about. This is repealing entirely the section prohibiting and putting some penalties on minors possessing or purchasing use or goes along with the possession is not what it's specifically called out. Just that section would be repealed and by the way reminder that age at this point is 21 years. And there are some increases to the penalties for furnishing tobacco to individuals that change from persons to individuals needs to be more consistent with their language and the penalties for that.

[Sen. Randy Brock (Vice Chair)]: I

[Jennifer Carbee (Legislative Counsel)]: think I'm going let the advocates tell you why they

[Speaker 0]: I think it goes to what Katie was saying we'll hear more from Rose and Jill and Tina but I think the focus of this bill is removing punishing young people and really trying to descript the accident.

[Jennifer Carbee (Legislative Counsel)]: And that's what I've heard in past years on this as well is not to, the interest is in not punishing migrants who might be as a result of for minors in possession. Currently a 25 civil penalty brought in the same manner as a traffic ticket so the judicial bureau

[Speaker 0]: would eliminate that. Minors who

[Sen. Randy Brock (Vice Chair)]: engage in sale.

[Jennifer Carbee (Legislative Counsel)]: So there are this does not change the prohibition on selling without a license or penalties on furnishing tobacco to other individuals.

[Speaker 0]: So there are consequences.

[Jennifer Carbee (Legislative Counsel)]: Right, there are consequences for selling or giving to others. There would not be consequences for personal use by men.

[Sen. Randy Brock (Vice Chair)]: Is this congruent with alcohol? The same philosophy? I'm just I don't know the law about alcohol.

[Jennifer Carbee (Legislative Counsel)]: It's not very uncovered but I don't believe I believe there are still penalties for minors in possession penalties for furnishing tobacco to minors is what increased the civil penalty from $100 for a offense and $500 for a second offense to a thousand dollars for first offense and then a civil penalty and license suspension or revocation some of which is consistent with existing law of defense what's set out on page nine. So a subsequent violation or after a sale during a compliance test conducted within six months after a previous violation is considered a multiple violation. There are civil penalties and minimum license suspensions or revocations. So this changes in some cases it's clarifying the language in some cases it's making some modifications. Under existing law two violations is two weekdays suspension this clarifies that that is two consecutive weekdays and adds a $1,000 civil penalty. Under existing law third violation is suspension for fifteen days and again this is clarifying the past consecutive days and it adds a $2,000 civil penalty. The fourth violation is currently suspension for ninety days again clarifying ninety consecutive days and adding a $3,500 civil penalty and then fifth violation this increases from a one year suspension to a revocation of the license and as a $5,000 civil penalties. So it's

[Speaker 0]: really putting much more muscle around Yes. Access and paying attention to

[Jennifer Carbee (Legislative Counsel)]: Yes. Access. Exactly. The next section is partly some updating, so under existing law any cigarettes or other tobacco products that are sold, offered, or possessed in violation of certain sections of the statutes are subject to being, are contrabanded subject to being seized

[David Weeks (Committee Clerk)]: by

[Jennifer Carbee (Legislative Counsel)]: the Department of Labor

[David Weeks (Committee Clerk)]: and Moderate or Department of

[Jennifer Carbee (Legislative Counsel)]: Taxes and destroyed. So a couple of additions here. First is to add tobacco substitutes in because they're not in the existing law. The second is adding references to items that may have been sold, offered, or possessed in violation of adding in the online sales prohibition that's section ten ten of this title and then section ten thirteen that you'll see in a moment is a new section on deceptive products. So it's categorizing all of those as contraband as well as existing provisions expanding and clarifying a little bit that seizure may be by commissioner or an agent of the commissioner of liquor and lottery or taxes and then most specifically here at the end of this subsection is that the items will be destroyed at the expense of the violator so whoever is violating has to pay for it and that the disposal would be in compliance with the Agency of Natural Resources laws on hazardous regulations on hazardous waste management. It also adds that to the penalties, the fines, that those are per item, so not just a single penalty but a per item penalty.

[Sen. Randy Brock (Vice Chair)]: Is it cigarette, pack, carton, box, truckload, what's an item?

[Jennifer Carbee (Legislative Counsel)]: I think I would defer to the enforcers on this about what the per item is

[Speaker 0]: Right now? No. When you come up, I would get to that. Alright.

[Jennifer Carbee (Legislative Counsel)]: In existing law under Internet sales there are provisions on on internet sale of tobacco products and tobacco substitutes tobacco paraphernalia. Under existing law the prohibition says no one shall cause these items ordered or purchased by mail or by computer telephone or other electronic network to be shipped to anyone other than a licensed wholesale dealer or retail dealer in the state and it's Stripe's retail dealer so it can only be sold online to or electronically to a wholesaler. And then this does talk about in the bottom of page 11, the age shipment or transport of

[Speaker 0]: Do we know what this is a question for the applicants? Next

[Jennifer Carbee (Legislative Counsel)]: is a new section on the top of page 12 a tobacco product or tobacco substitute by imitating a product that is a tobacco product or tobacco substitute including a food or brand of food commonly marketed to minors and this he says including candy, desserts, cereal, and beverages. You can't have a product that that imitates food or beverages or that imitates school supplies commonly used by minors like erasers, highlighters, pens, and pencils that imitates portable devices including smartphones, smart watches, video games, rehearsals and inhalers and any product based on or depicting a character personality or symbol known to appeal to minors like a celebrity, a character from comic book, movie, television show, video game, or a mythical creature, or a product that conceals the nature of the tobacco product or substitute, or using items for describing or depicting a product described in subdivision one. So that's a new provision. We have a new section on enforcement giving the Department of Liquor and Lottery the same powers and authority to enforce the provisions of this chapter as it has to enforce the liquor laws. New section ten fifteen of this chapter is on the use of funds for licensing fees, penalties, and settlements and says all penalties collected from violations of this chapter, monies the state receives from settlements based on violations or alleged violations of tobacco laws, and all revenue generated from licensing fees in this chapter that are more than the amount necessary to administer and enforce the chapter would go into the tobacco trust fund, an existing special fund and used for tobacco cessation and prevention. Then there are some conforming changes in sections two and three of the bill. One relating to the three generals complex litigation special fund and talking about settlement monies that go into that fund and carving out those that are appropriate for that transfer or appropriated for other uses pursuant to and adding in that transfer to the tobacco settlement fund, the tobacco trust fund, and similarly adding to the language on the tobacco trust fund in section three that money would be going into it from this new And

[Speaker 0]: currently the tobacco settlement fund sees an annual revenue of $23,000,000 $20,000,000 We got $23,000,000 left here and it's in perpetuity right? It's not

[Sen. Thomas Chittenden]: Is that gradually declining as tobacco

[Sen. Randy Brock (Vice Chair)]: use is?

[Sen. Ginny Lyons]: Yeah, I'm not gonna speak to that.

[Speaker 0]: Right we'll tag that. I just wanted to give people a perspective on the decline.

[Jennifer Carbee (Legislative Counsel)]: That's a declining record. Alright section four is on confidentiality of tax records and this adds to the list of recipients to whom the Commissioner of Taxes may provide tax returns or return information and this adds to the Department of Liquor and Lottery if that is for purposes of investigating potential violations of and enforcing the tobacco statutes. The next several sections deal in large part with moving tobacco substitutes to be taxed like cigarettes. They're currently taxed like in the category of other tobacco products which includes things like snuff and roll your own tobacco and things like that. This is first clarifying the definition of cigarette and some of this is to be more consistent with existing provisions in title 33 and the master settlement agreement that the state entered into with the cigarette manufacturers a number of years ago. Right now we're not fully consistent with that definition that would make the definition consistent here.

[Sen. Kesha Ram Hinsdale]: Is this like a streamlined sales tax definition?

[Jennifer Carbee (Legislative Counsel)]: No I don't believe so. Think this is the definition from the Master Settlement Agreement of the and the cigarette manufacturers.

[Sen. Kesha Ram Hinsdale]: Okay so there are a number

[Sen. Ginny Lyons]: of states though that you Yes.

[Jennifer Carbee (Legislative Counsel)]: Well Yes. We adopted it in the context of the Master Settlement Agreement implementation statutes. We have not put that same definition into our tax statutes. So we're in the tax statutes now and so using a consistent definition in various parts of the statutes. This adds tobacco manufacturers of tobacco substitutes to the definition of manufacturer for purposes of the tax statutes. Again a lot of this is part of moving the taxation of tobacco substitutes to be aligned with the taxation for cigarettes including as Senator Ryan just saying the stamping requirements. This defines or modifies the definition of other tobacco products partly to pick up some of the newer definitions of tobacco substitute based on the different ways that people are ingesting tobacco and nicotine, so including inhaling, sucking, absorbing, or crushing it in any other manner, but carving out tobacco substitutes because we are treating them like cigarettes. Same thing with wholesale dealer you'll see a lot of the changes in here are adding tobacco substitutes in with the list of cigarettes, little cigars, while we were on some others. Wholesale outlet and wholesale price again adding tobacco substitute and then tobacco substitute we're just saying look at that fairly extensive Title VII definition that's being consistent between the two chapters. So again adding into on the license requirement this is adding in tobacco substitutes.

[Sen. Randy Brock (Vice Chair)]: Tobacco substitutes,

[Jennifer Carbee (Legislative Counsel)]: It was included in the definition of other tobacco products in this chapter, although not it is not treated in the same way in the tobacco statutes because it was being taxed like those other tobacco products. Now because we're moving it into taxation like cigarettes, It's being paid out so it has been, the use of tobacco is like chewing tobacco so it has its own definition but this is the so yes it has been treated sort of as both for different purposes under the tobacco regulation and the taxation statutes now it's being pulled in to be taxed like cigarettes and so it's specifically carved out. All of it will be taxed like cigarettes. The same manner the rates are different so you'll see when we get to the out. Tax rates. Section six adding tobacco substitutes to the wholesale licensure requirement. Section seven adding tobacco substitutes to the penalties for sale without a license and increasing so changing from the terminology of criminal law using fine to civil law, civil penalty or a violation and increasing those from $25 for a first offense and not more than 200 or less than 25 for subsequent events to 2,000 for a first offense and not more than 2,000 for first offense not more than 5,000 for each subsequent offense.

[Sen. Thomas Chittenden]: So this would still apply to minors, so if a minor broke this rule they would get this fine?

[Jennifer Carbee (Legislative Counsel)]: Well this is any licensed wholesale dealer. I think I don't

[Sen. Kesha Ram Hinsdale]: know how backed up JFO is but I think we need a fiscal note a request now so that it's ready for vote or something.

[Speaker 0]: Sponsor Judy worked on that? I

[David Weeks (Committee Clerk)]: don't think so generally they

[Sen. Kesha Ram Hinsdale]: While we're in this section is little cigars like

[Jennifer Carbee (Legislative Counsel)]: They're fine in title seven. Yeah. I'm fine in

[Speaker 0]: here as well. Yeah. Okay.

[Jennifer Carbee (Legislative Counsel)]: This is some of the stamping language and there's more stamping language coming out later, but adding the tobacco substitutes in. I've done a little bit. I tried to be fairly minimal, but a little bit of enough language in here trying to get rid of the needle needs and getting a little bit more modern.

[Speaker 0]: Your favorite

[Sen. Ginny Lyons]: on our

[Jennifer Carbee (Legislative Counsel)]: technical side. Exactly. Exactly. Screen. There could be a lot more left done, but I'm just scrolling through for something else. That's okay. Alright. Here we go with the tax rates. The first two look different, but they are not. This is modernizing our language around the tax tax language for cigarettes and little cigars

[Speaker 0]: and then section 12?

[Jennifer Carbee (Legislative Counsel)]: This is in section yes. I think we're in section 12. Yeah. 23. So under existing law we use the term mils which is based on a very old form of currency and calculation so this 154 mils is $0.154 so we are just using language that in here that after consultation with the tax department that people are more familiar with and then spelling it out separately for oil and tobacco just because the calculation is based on ounces as opposed to per unit so A and B are not changing. C and D on the top of page 21 are new so the taxes for tobacco substitute with a nicotine concentration of less than five milligrams per gram is 92% of the wholesale price of the tobacco substitute. I believe that is consistent with the way they are taxed now at the rate as far as the rate is concerned as an other tobacco product. For a tobacco substitute with a nicotine concentration of five milligrams per gram or higher will be a 100% of the wholesale price of the tobacco substitute. So separating those out based on nicotine content. Then we get into some more adding in tobacco substitutes throughout the stamping language and making some minor updates to the language. Alright. We're getting there. So one fairly small ish, but under seizure here, in addition to this is kind of an analog to the seizure and contraband language in title seven. We're on page 45. We are on yes. Bottom of 25. So, again, adding in to that, those substitutes. Also adding in the commissioner's input and lottery or their employee, agent or employee, so consistent with what's in Title VII they're just recognizing who is authorized to do the seizure and then using the term law enforcement officer rather than a peace officer and putting in the language around disposition is at the expense of the violator and has to be in compliance with ANR's hazardous waste management regulations. Alright so section 17 this is the investigator provision deposition that Senator Lyons was mentioning and we are close to the end of the bill. This same language except updated with dates was included just versus historical background in S18 of 2023 that was built, it was vetoed so you have all or have seen that language in an earlier iteration but it was not enacted. So this is adding a new permanent classified position of investigator at the Department of Liquor and Lottery to enforce and investigate potential violations of Vermont laws related to direct to consumer sales and delivery of alcohol and tobacco products. So this is broader than just tobacco in this bill and we're looking at having an investigator for direct to consumer sales and delivery. It would appropriate $160,000 to the Department of Liquor and Lottery from the Tobacco Litigation Settlement Fund in fiscal year twenty twenty seven for that position. It provides legislative intent that that position be funded from the Tobacco Litigation Settlement Fund for fiscal years twenty seven and '28 and that starting in fiscal year twenty nine the funding will be built into the base funding for the Department of Labor and Lottery's budget with the person effectively generating the revenue for their positions based on their activities in investigating and enforcing violations to the general fund with the remainder going into the general fund. So we don't really have to specify that some

[Sen. Kesha Ram Hinsdale]: of that is online? Some of their enforcement and investigation is online.

[Jennifer Carbee (Legislative Counsel)]: No, okay. They don't believe me.

[Sen. Kesha Ram Hinsdale]: It was really specific

[Jennifer Carbee (Legislative Counsel)]: last year the year before. And then if the revenue generated by their activities is not enough to cover their position in the future then liquor and lottery is directed to propose eliminating that position as part of its next budget or budget adjustment presentation to the Journal Senate. Basically get them funding from tobacco litigation settlement plan for the first two years to get it going, the position going, then hopefully they're self sustaining with potentially additional revenue coming in. If they're not then you want Liberum to come back and let you know they're not making enough to cover that position this year. And then it calls for a couple of updates by 03/15/2027 Liberum Lottery would provide an update to various committees including this committee on the status of its implementation of the new position with an annual report on the impact of their activities on compliance with Vermont's laws. Section eight of the tax report, the Department of Tax and the Lottery to look at the existing processes for regulating in tax and cigarettes and tobacco products and look at whether responsibility for the taxation and licensure of wholesale dealers should be transitioned from the tax department to liquor and lottery for next January to GOVAS committees and the health committees and the ways and means in finance. And finally the act would take effect on July 1 with the first report on the activities of the the investigator at Lake Room Library due by 12/15/2020.

[Sen. Ginny Lyons]: Sir, what's the report?

[Jennifer Carbee (Legislative Counsel)]: Is not going to use whether whether responsibility for taxation and licensure or wholesale dealers, wholesale tobacco dealers should transition from tax to liquor and lottery.

[Sen. Ginny Lyons]: I suppose we don't need to see that.

[Speaker 0]: That's going to fuck it.

[Jennifer Carbee (Legislative Counsel)]: It seems like more of a goss and ways and means finance issue than and economic development. Great, but Jen thank you very much. Sure. Just in the interest

[Speaker 0]: of time I'm gonna move us along because if we if we're gonna take this off we will dive into many of those details. Yeah. And Rose who do you think tees up the why most? Jill first and then Rose?

[Sen. Ginny Lyons]: Yeah, we

[Speaker 0]: may need to give you fifteen minutes so I apologize but it's important to do all these pieces.

[David Weeks (Committee Clerk)]: Jill welcome. Good morning. I'm Jill Szentrop Garin, I'm representing the Coalition

[Speaker 0]: for Tobacco Free Vermont. And we have your piece from you I believe. Yeah. Let me just

[Jennifer Carbee (Legislative Counsel)]: So

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: I'm just gonna start off by framing it and saying that this is you know, we are have been in a game of whack a mole with the tobacco manufacturers and so every time you pass a policy that gets at trying to protect public health, protect the consumer, new products emerge and then we're in a new game of what do we need to do now. And so this bill is really an increase of staff on how do we modernize our tobacco regulatory system so that we are helping the regulators, helping the retailers, helping the consumer understand what's going on and help protect our kids who are using at

[Speaker 0]: a huge level. So if that data in that youth survey every year are we seeing when you say our youth are using at a huge level?

[Jennifer Carbee (Legislative Counsel)]: I've got

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: some slides on that. What I thought I'd do is just talk about,

[Jennifer Carbee (Legislative Counsel)]: because we're in the economic environment,

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: maybe talk a little bit about how much we spend on health care costs in tobacco related disease. And that's annually Vermont spends $4.00 4,000,093.7 of that is Medicaid costs. That turns out to be around a thousand dollars per household and us bearing the cost of tobacco related healthcare and then 176,000,000 annually in productivity losses at work so

[Speaker 0]: huge impact on our clients

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: yes it's still the number one killer in Vermont so a thousand deaths annually and it's the number one cancer killer no it's the twenty eight twenty nine point eight of Vermont cancer deaths are attributable it's the number one killer of Vermonters in this Chicago okay so when we're talking about, you know, we need a better regulated system, we're talking about preventing a huge avalanche of healthcare costs that are coming at us with these new generations of nicotine users. So just a bit on marketing. The tobacco industry spends about 8,500,000,000.0 annually on marketing. In Vermont, that's 15,800,000.0 on marketing. And we spend, the state contributes 2,700,000.0 into tobacco control and then like we said before, we have the master settlement dollars that was really aimed at tobacco control and we contribute a portion of that. And then we approximately bring in around 75,000,000 in capital tax revenue. Part of what we're trying to do with this bill too is make sure that because the wholesale level is where the tax is applied, make sure that that is being paid equally because right now with the online we're questioning that. So here's some of the products.

[Sen. Ginny Lyons]: So this picture of

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: the high nicotine disposable base actually came from Franklin County Schools from our friend Amy Burmer. I'm sure you know her, Senator Brock. Jenny said, nicotine levels are exploding and I have a slide on that coming up too. Nicotine pouches, the use of these products in Vermont has tripled over the last two years and just anecdotally Burlington Bars have said that they're using snow shovel to remove the pouches at the end of the night. Are somewhere from their bar, the floor of

[Speaker 0]: the bar. Good. Gross right? That's a gross image. Yeah. Thank you.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: So here's some of these smart vapes data. Do we

[Sen. Kesha Ram Hinsdale]: have any data on how much that rate of growth is with young people versus yeah, we do.

[Speaker 0]: So this is just three times growth in what in how many years? Two. Two years. And that's all users not?

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: That's actually the young adult users. Okay. Eighteen to twenty five years old. Eight to nine And the bars are young adults. The eighteen to nine months. Yeah. The deceptive the marketing provision of this bill is really aiming to get at some of the phones in this next picture, which look like toys. There are ones that look like their smartphone. You can text from some of them. They can connect to Bluetooth. They can be a speaker. You can listen to music through them. Video games are a pop to play. So you want to keep playing, you keep popping, you keep using their product. How insidious. This next one is these new products which we're really struggling to understand are they're nicotine free but they're synthetic and you saw it in the definitions our attempt to get at these products because there is a chemical which I don't Tina and

[Sen. Ginny Lyons]: you never know name

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: of it. It's a long name so I won't even say it but Six Six methyl methyl Yeah. So anyway, it's supposed to be more potent than nicotine and highly addictive and we don't know what it

[Sen. Kesha Ram Hinsdale]: does in the body right like because whether or not it's addictive the resin in your lungs is its own yeah

[Sen. Ginny Lyons]: a huge health issue but it

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: gives you that feeling that's nicotine free. So I'm gonna go into the data on use.

[Sen. Randy Brock (Vice Chair)]: Are there any scientific evidence or any data studies showing that they they attracted this particular chemical?

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: Yes. And I have data on that, but just in the

[Speaker 0]: interest of the It's maybe what you're

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: gonna bring up, can definitely share that with you. We also have we had a great presentation yesterday from this study out of this publication of dates and there's testing around that and so I can give you any information you want on that that we Yeah. Let's finish moving to the So this is actually very recent data out of November 2025 and this is with Doctor. Valanti from Rutgers and she works with the Department of Health to create these very, they're small cohorts but they are, they're largely tobacco users that are working with this study and so when you see these numbers, it's 12 25 are the ages and so there's some really high percentage numbers here that are pretty concerning. This is

[Sen. Randy Brock (Vice Chair)]: being that twenty two to twenty five is labeled why does the data set?

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: Because young adults is defined as 18 25 and so that's what we track that for the Department of Health we track that in terms of the users, the ALL tracks that

[Jennifer Carbee (Legislative Counsel)]: in terms of sales, it's

[Sen. Randy Brock (Vice Chair)]: just a basic There's job for 12 21.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: Yes and I'm going to get to that. Okay. And so then I have the flyer BS, like every two years, and that's the self reported. So yeah.

[Jennifer Carbee (Legislative Counsel)]: And so this is from 2023, the most

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: recent. So the high school average rate of e cigarettes is sixteen percent and then you can see where it says that any tobacco use and then you have it broken down in terms of are

[Speaker 0]: those additive

[Sen. Kesha Ram Hinsdale]: or does the 16 fit into the 18?

[Sen. Ginny Lyons]: The 16 fits into the 18.

[Speaker 0]: Okay so it's it's but they don't

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: middle school is seven percent and

[Sen. Ginny Lyons]: I didn't have can give

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: you information on that too. In all of my slides, I will give you the citations because there's so much data that I can share with you on this, but I can give you all my citations. This 37% of the high school students who report use of e cigarettes daily is the real concerning part because that shows true addiction. These are the young adult rates, the 18 to 25 years old, and you'll see where that real jump in the pouches shows up. You'll also see extremely high rates, right? Use any of the above products is all in over a third of our young adults. Do we ask if they vape without nicotine?

[Sen. Kesha Ram Hinsdale]: Yes. Okay. But that's not here. Did I miss her?

[Speaker 0]: You're getting. It's not in the There is. There's one here. It says use electronic vape containing nicotine, but it doesn't have one that says No. But I

[Sen. Kesha Ram Hinsdale]: can do that. Okay. I just would have hope we're not omitting that and making it seem like it's a healthier choice by not asking that question.

[Jennifer Carbee (Legislative Counsel)]: I think that's in the data set.

[Sen. Randy Brock (Vice Chair)]: So the 37% on the slide, I'm not sure what slide it is. Go to the next slide and it's got a used electronic based products containing 19. There it's 27% on a monthly basis, once a month, at least once in a month. 37% every day, is that a good 37%

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: of the students who

[Jennifer Carbee (Legislative Counsel)]: So I included this and this

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: goes back to what Ginny was saying in terms of the dopamine and so when we think about dopamine like we get dopamine every time we get extra or bestie right so we're all getting that dopamine. Now you have potential with these discrete emerging products to get dopamine over and over again. Right? You're getting it from the video game. You're getting it from the nicotine, and then you're getting a culturated dopamine. When kids go to school, they get more cravings and they have a harder time. It's just we'd set up this reward system for them where quitting becomes so intensely difficult and then

[Speaker 0]: we have the nicotine, the

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: high nicotine levels. This is a study that I was talking about. So this is from a public health research group

[Sen. Ginny Lyons]: that works with the Department of Health

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: in Southern Vermont and they went to schools across Vermont and asked them to give them their confiscated vape products so they over two years, 2023 to 2025, they confiscated five twelve nicotine vapes and vaping products which include cannabis products as well from high schools and middle schools and out of the five twelve, five ten were flavored. Just keep that in mind. We're not standing flavors in this bill but just for you to know.

[Speaker 0]: Of the five twelve, five ten were flavored.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: So here's the first beer you can see the real winner this loom is 34.7% of the confiscated products 99% of them were flavored. The THC baits, that's 10% of the collection, that's quite a bit too, but this loom is important in this study and I can have her come testify or I can ask her if I can share the full presentation because check out what's happening in Vermont at the same time somehow Loom is a favorite of the retailers in Vermont. Loom is what? Loom Max is an e cigarette product that was complicated and it was the highest percentage that showed up in that first year 2023 to 2024 and it also is the favorite in the retailer so when you think about the retail environment influencing what youth are using this is clear impact right? That's a good name but other than

[Sen. Kesha Ram Hinsdale]: that is there are they like a New England company or something like they're

[Sen. Ginny Lyons]: out of Minnesota and for some reason Minnesota and Vermont have very similar patterns as far as living by.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: So in the second year, and this goes right to the bill, 40% of the confiscated vapes are the speak bar. And the speak bar has way more nicotine in it. It also has a light up display. It also has the most amazing website and there are games you can play. I mean, is, it's very fun and pretty. Yeah. So,

[Speaker 0]: I'm sorry. Yeah, yeah.

[Sen. Kesha Ram Hinsdale]: I guess maybe others can help answer this, but I mean, the most recent experience we've had with enforcement in terms of advertising to younger ages was sports betting, and like some of this seems like very obvious attraction to kids.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: And kids code, right? Yeah, kids code. Yeah, so like Do we have laws on the

[Sen. Kesha Ram Hinsdale]: books that allow us to enforce and say this is way too obviously oriented towards young people?

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: That is a good question probably for Rose.

[Jennifer Carbee (Legislative Counsel)]: Yeah. We like stronger language.

[Speaker 0]: Yeah. Okay. Well

[Sen. Kesha Ram Hinsdale]: with sports betting when we have that discussion and maybe it was last Friday I can't remember, you know it's are you advertising on college campuses or is the you know is the advertising so specifically, you know, geared towards games that young people play or what like we did have there is like existing laws of their art or you know there should be something we can enforce it with the right language we do it in every other category like joking yeah

[Speaker 0]: I'm almost done with the

[Sen. Ginny Lyons]: whole thing I need to have

[Speaker 0]: you finish this and then we're gonna have you back because there

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: are So nine months of do you want me to continue?

[Speaker 0]: Yeah, why don't you finish quickly because we have had a rating.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: Okay, so this slide, and you can take a look at this. This is crazy how much nicotine is in this Geek Bar. And there aren't prices on this slide, but I took a look and found that you can actually buy this Pulse for $15 online. There's 15,000 puffs in this vape and then the Peak Bar Pulse has 45,000 and you can see the nicotine content. It's just through the roof and as Jenny said, you know, mostly when you smoke a cigarette, you get between one point eight and two milligrams, and these kids are getting a lot.

[Sen. Kesha Ram Hinsdale]: And Is that the 900?

[Speaker 0]: Yeah. So it's much more intense in that. Absolutely, yeah. I mean, yeah.

[Sen. Kesha Ram Hinsdale]: Okay, great. Would we I didn't really understand fully in the tax definition changes. Would we then be taxing things that have much higher content at a much higher

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: rate, like we do with

[Speaker 0]: alcohol. Yes.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: Okay. I just want to go

[Speaker 0]: through this really quickly because I

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: think your next question would be, you know, how are kids getting at these products? And so the perceived access for 21, 61% say getting these products is easy, very easy, sort of easy. And alcohol was on her slide too as a comparative. Then you have the purchasing behavior, so that's where it really takes

[Speaker 0]: So it takes easy to order to get it.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: So that's what this breaks down for you and so I think what you know a lot of this is it's around it's the convenience store, the gas station, and then on the internet. So when we have the compliance investigator, that's part of their work, the idea is that that online compliance investigator is helping brick

[Speaker 0]: and mortar retailers as well. Just

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: going through the retailer compliance data, this I just pulled last night, this is active right now at 90% compliance rate.

[Speaker 0]: We have it on our website under reports, under reports, the liquor lottery.

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: Jen alluded to this, the reason for separating the tobacco and alcohol licenses, we're the only state that has a two for one on that. And right now with these products, we feel like there really needs to have that separation. The sales

[Jennifer Carbee (Legislative Counsel)]: of right,

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: the data point around what's selling is really around the cigarettes. And so another thing is to really think about the wholesale tax and making sure that we're equalizing that across all of the products. And then I just gave you, this is actually from 2021, but just giving you some evidence that the online retail compliance investigator is very helpful in going after these companies bringing back money for the state and then just going back to the law that's a huge priority for

[Sen. Randy Brock (Vice Chair)]: us is to review Question about the online, Is it correct that the online is absolutely prohibited on a direct consumer to sale?

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: 2019 you did that.

[Speaker 0]: I'm sorry? We didn't disclose the evidence. Correct.

[Sen. Randy Brock (Vice Chair)]: And so for anyone not just people under age there should be no direct sales whatsoever?

[Sen. Thomas Chittenden]: Yes. Is this happening?

[Jill Sudhoff-Guerin (Coalition for a Tobacco-Free Vermont)]: Absolutely. Absolutely. Mean it is not hard.

[Sen. Ginny Lyons]: And DLL in my office meet work together to sort of combat

[Speaker 0]: that but it's So we're gonna have that. Okay. Obviously, it's one of our big consumer protection issues that we're gonna be addressing, but I we're already now almost ten minutes into roses, but thank you very much for taking this up for us. Yeah. We Rose and Jill, love you and Tina, and back in soon, and thank you so much for sort of to important stuff. Thank you, guys. Thank you. This was a terrific tee up. Thank you. I

[Sen. Ginny Lyons]: did bring some printouts for folks. I'm sorry. They're not double sided, so they look really thick and scary. But if you would like these to be one night, then I take you in half.

[David Weeks (Committee Clerk)]: Oh, okay. Sorry. Heard some

[Sen. Ginny Lyons]: more. I'm great. Save them

[Speaker 0]: for your next exhibit. So

[Sen. Ginny Lyons]: I'm happy to join so I can share the slides. If you just give me one second. Thank you. Good morning everybody. For the record, Heather Pelham, I'm the Commissioner of the Department of Choice and Marketing and really appreciate the time this morning to give you an update on all the amazing things that we've been doing.

[Speaker 0]: And you've had some summer, we've been thinking a lot about that.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: We have, we have. I'm gonna start first, take us back to 2024. So as folks probably understand, you know, when we talk about economic impact, it takes some time to get all the data, but this virtual library just sets the stage towards the Vermont big business, 16,000,000 visitors, $4,200,000,000 billing with a b, 9% of our GDP. For comparison, national average is 3%. So, you know, we're three times more dependent on our visitor economy here in Vermont than others. Over 30,000 jobs in the sector, more than 10% of our workforce. And guess what? The state's paid taxes. In fact, they paid almost $300,000,000 in taxes in 2024. So we can talk about that a little bit more, but I just want to set the stage. So when we think about visitation again, 16,000,000 has been fairly steady for the last couple of years, certainly since the rebound after the pandemic. We did see a slight uptick for 2024, perhaps solar cups was a little bit of a help date from that. We'll certainly take that and our visitation is split pretty much evenly between day and overnight visitors.

[Sen. Kesha Ram Hinsdale]: Can I Yeah? Really quickly, like I know we're just like, oh we can't produce an eclipse, but I hope somewhere you're thinking about like what's similarly attractive and how do we build the infrastructure

[Speaker 0]: to support them. I think she is thinking about that all the time.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: If I could move, you know, if that happens I would.

[Sen. Randy Brock (Vice Chair)]: This looks like a plateau from 2022 to 2024. Do you have a notion of whether we're like we've saturated our hotel, our tourist support?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: I would say emphatically no. We have a lot of capacity in our accommodation sector. Our occupancy rate is usually around 65, 70%. We can certainly say good or bad.

[Sen. Randy Brock (Vice Chair)]: It's okay.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: It's not 100%.

[Sen. Randy Brock (Vice Chair)]: Yeah,

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: we so there is capacity obviously it's seasonal so you know it's regional so we can get in a little bit more but in terms of does our infrastructure as it currently stands can we handle quote unquote mortgage station? Absolutely. Third place is business spending is spread across, you know, there's the major categories, you know, obviously lodging, retail, recreation, and so forth. As you see, business spending affects all sectors of the economy. It's spread pretty much directly, especially when you think about indirect supply chain purchases as well as induced from employees with their wages. I mentioned employment briefly. So we are at over 31,000 right now. That is still a about 5.5% decline from pre pandemic, so we're not up to full employment from pre pandemic but it is slowly climbing And again, that employment is spread across the schools, not only but across different sectors. So if I bring you now to this chart, sorry, on page seven, This kind of gives you an idea of how that visitor spending and unemployment is spread across the state. So we see that we have activity in every county. Certainly there are some counties that have additional infrastructure, so you see the large share of state spending in Chittenden County, that's where the airport is, there's a lot of

[Speaker 0]: infrastructure, you would expect that, but you

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: can also see Lemoyle, Rutland, Windsor, Windsor, there's a lot concentration there, you know, based again on the infrastructure we have with the winter recreation, as well as throughout the year. The three counties noted in Blue, Essex, Franklin, Grand Isle, just interesting that we see double digit increases there and I would say that is a gross effect given where those counties are and given that they are relatively small counties to begin with.

[Speaker 0]: So you would see if

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: there was a slight bump, you would see an increase. So that's really encouraging. We will certainly keep watching that and being able to spread out visitors and the economic benefits they

[Speaker 0]: bring is certainly a huge priority for us.

[Sen. Randy Brock (Vice Chair)]: Are you going to expect a reduction in 2025 because of the effect of

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: I'll get it in here then, Justin.

[Sen. Thomas Chittenden]: I get the eclipse if you have, but I'm curious, Moyle Valley Rail Trail, didn't that come online in 2024 too, and doesn't that cut across those

[Speaker 0]: That's three a piece of

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: It does, I think it's a piece of it. I think that that's, There's so much potential there that we have not achieved yet that I don't think I'd see it all from that specifically, but great to be working on. So that brings us to slide eight, which is tax impacts. I don't think I can stress this enough that I would encourage all of us when we are in this climate of where are we gonna find revenue? How are we gonna keep Vermont affordable for our residents? Visitors are temporary taxpayers. I think you've heard me say that before. I say that with all due respect to them, but they literally are bringing revenue into our state. The amount of direct taxes paid by visitors is equivalent of over a thousand dollars per Vermont household. We're on the revenue side of the equation trying to grow the pie for everybody. But depending on that we can come back to that later if you like, but I know we don't, we're short on time so I'm gonna have that power to

[Speaker 0]: This is just to begin, but we have to get some sense of what your need is. Our economic development bill, know, we have to at least have it drafted out by the January so that's one of the reasons because what you're keeping us far coming, we need to make sure we know what, how we can best support you. Thank you

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: and I appreciate that. So

[Speaker 0]: we'll go through quite a bit more in the budget we're going to hear next week. Exactly we'll

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: talk about that next week right so then that brings us to you know it wouldn't be well not 25 I was gonna say it would be 25.5 but we were talking about the Canadian situation. Graph slide on page nine are unfortunately familiar to us all now into what we have experienced unfortunately and how that's been taken by our Canadian neighbors. So, you know, started off the year strong, March we really hit those, you know, 30 plus percent declines. I think we hit bottom in about July. We've seen a slight, the delta has decreased up into October, but if you look at the credit card spending which is in the top right we are down year over year almost half 48% and the bulk of the spending from our Canadian visitors is in the summer so we've really that really hurts very, very hard especially in the northern parts of the state.

[Speaker 0]: So especially northern tier. Exactly. The top northern counties. Yes.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Big impact. Absolutely, big impact. In terms of travel intent going forward, you know, for 2025 there's about 15% of Canadians who indicate that they would be willing to travel to The United States. That's down almost 10 points from last year which was 24%.

[Sen. Randy Brock (Vice Chair)]: So can you quantify the 48% is roughly, what are we looking at, like an average, it's like a million and a half impact, 2,000,000 impact?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Yeah I would say so, Canadian visitation is about 5% of our overall visitors. We usually think it's about 150,000,000 total so I wouldn't I hesitate to put an exact number on how much we've lost. Yeah, it's you know it's many many millions of dollars I know that's not as exact if you want but I can do

[Speaker 0]: a little bit But it would not be 75,000,000. Right, exactly.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: There are still Canadians who are coming and when we look at the next slide about Canadian sentiment, there's no doubt that this is a huge effect, right? So 70% of Canadians say that federal situation impacts their desire to come here, but I've also included a slide that shows that Canadians also do understand that Vermont is different. So 46% of Canadians will put Vermont in a different category. They understand what we have to offer. So I would say that there is hope, and we have not let up on our advertising when it comes to the Canadian markets. On the next slide, I'm just showing you that, you know, over the past summer, we continued all of our advertising into the Canadian markets, basically focused on Quebec, Montreal, DMA. We also did Ontario as well, Eastern Townships, still in Quebec, of course, but, you know, we were really kind of doing our best to present ourselves as that welcoming destination but also understanding that people were real their emotions were very raw and I will just point to we did do a joint promotion with the Vermont Milk Bike Association in August for our free ride day for Canadians. Yes, we saw participation. We also saw a lot of negative comments online that people just weren't ready to play nice, to be honest. So it doesn't mean that we're gonna stop doing what we're doing. But we did then think about, okay, is now as we got into fall, we felt like things were starting to stabilize a little bit. So we did start running what we're calling our 100% Love for Canada campaign. So on page 12, you can see we started digital campaign, a little bit of a soft launch in the fall to really make sure that we were juxtaposing our, you know, some of our great assets, you know, why come to Vermont, the trails, the back roads, the food and so forth, you

[Speaker 0]: know, with just a very hopefully

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: safe statement that we have a 100% love for Canada and we coupled that with we worked with the industry to create special incentives for Canadians which is a great way for us you know we always think you know we're talking the funnel right we're trying to get people to think about coming to the state but we want to make sure that we're bringing that business to our you know our local local downtowns and so forth so putting together our deals program, there are some of the research does show that, you know, a little bit of discount certainly does help. Obviously, the exchange rate is another factor in why Canadians are coming. So that was a way that we were able to put that together to support our local our local businesses as well as hopefully provide some test on her patients. So as we get more data, know, to your point, we'll try to quantify exactly what the loss is and where we are, but right now we really are on the

[Speaker 0]: back foot. And given most of the, some of the, a lot of messaging with Saint Garrison French, I'm assuming that a significant percent of our Canadian visitors are that local, are Quebec croise, are from Quebec. Yeah we find that

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: userlinguin can, yeah I know that coming to an English speaking country, there is a bit of an expectation that many folks as we understand are bilingual, but we find it very important for us to be able to promote our ads in French as well, even if it's just a matter of respect. So we understand that you're bilingual, you know.

[Speaker 0]: So the the percent, I mean, that's some part of the interesting

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: I mean, what we see from engagement, we definitely see more engagement with our advertising from English based speakers, but I wouldn't put that to say that we don't think it's important to do both.

[Sen. Kesha Ram Hinsdale]: I don't know if you were being vague

[David Weeks (Committee Clerk)]: on purpose but I didn't

[Sen. Kesha Ram Hinsdale]: quite understand the comment about people not ready to play nice. You, that's what does that mean? Who wasn't playing nice?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Think that the travel, the sentiment in Canada, there are still very raw emotions of people who feel like they're, they might love Vermont, they might even like the rest of The United States as well but they're not ready to come show that with their cocktails.

[Sen. Kesha Ram Hinsdale]: Okay so they didn't have a bad experience with a Vermonter?

[Speaker 0]: Correct. Okay. More that escape,

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: are a larger context exactly that we are in.

[Speaker 0]: You know the Washington fallout gives us. Yes exactly and so you know

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: there's that one stat which I put in there which shows that you know almost percent of Canadians understand that Vermont is a little bit different but that doesn't necessarily mean that they're going to cross the border to show us. Sure. They believe that.

[Sen. Thomas Chittenden]: Well I have you. One thing that I would love to see and on the token record what I find if I raise these notions that

[Sen. Randy Brock (Vice Chair)]: are good

[Sen. Thomas Chittenden]: ideas to people like yourself, they might gain traction. Amtrak. Now the Ethanol Express in the Vermont Tour. I had the luxury of traveling in Europe a couple of years ago, and I was with my family with three kids. They always had a family bundle. So it would always be so much cheaper when you're traveling with kids. I just got a quote get from New York City up to Vermont. $810 for a family of five. It just doesn't make economic sense because it's just cheaper to rent

[Sen. Randy Brock (Vice Chair)]: a car or just not

[Sen. Thomas Chittenden]: do it. I'm just saying if we could work with our influences with Amtrak to try to at least sell out family bundles, I think more people in bigger cities, now that we have Ethan Allen and the Vermont Tour, will go for the weekend because it's easier to travel with small kids on a trip. And so I just would encourage that. That's an economic development opportunity to try to

[Sen. Randy Brock (Vice Chair)]: expand family friendly pricing models. Yeah.

[Jennifer Carbee (Legislative Counsel)]: Friendliness. Oh my god. And I wish I could the second leave they go back

[Sen. Kesha Ram Hinsdale]: like they're like here's a different

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: line he was helping with your

[Speaker 0]: shoulder here's

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: some toys for your

[Jennifer Carbee (Legislative Counsel)]: children so that is okay well that

[Speaker 0]: is something we all have have to and maybe discuss the band track we're happy to do that

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: yes and do know that they do run discounts, you know, at certain times of the year, clearly not right the second, but great point. Train travel is a wonderful way to go I think it's our messaging

[Sen. Kesha Ram Hinsdale]: family focused as well. Like, you know, I like flying out of Montreal now because it's more family friendly. I don't think they feel the same way about Burlington or The United States. I'm taking my kids to Ottawa in mid February. I know people are going to be nice and I will have walkways that work for strollers. This is such a problem.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: I mean, in terms of, you know, visitors choose to travel, I think those kind of considerations are, you know, extremely important and I think that's why we're lucky that, you know, people have options so they can choose what works for them. In terms of Amtrak messaging, I don't know how much they focus on family versus not, but certainly in terms of our messaging, we try to encourage folks to think about all the different modes of transportation there are. We do have you know a good amount of content about Amtrak on our website.

[Sen. Kesha Ram Hinsdale]: Do you have a family friendly Canada ad?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: We include family in all of our advertising as one of our core messages, yes. Okay.

[Speaker 0]: I need you to keep moving because we're gonna already go over time, but I wanna

[David Weeks (Committee Clerk)]: make sure you get to it. You

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: know, when it comes to how do we promote visitation, you know, slide 13 just shows that we are in a variety of different tactics that we utilize to bring visitors here. We think about not only our particular target markets as well as the different ways we talk to folks.

[Sen. Randy Brock (Vice Chair)]: Question? A lot of our conversation in this committee is about the return on investment. We've had this conversation in the education committee a year in the past. So we see your budget, do we see, do you have any metrics on return?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Let me get through a couple more slides and I'll talk about them directly. We are involved in

[Speaker 0]: the initial note, there is a budget on page 13. Yeah, so that's that was our

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: summer campaign. Some examples of campaign, examples of creative. As we get into slide 16, here's where we start talking about what is the impact of our marketing, what does that look like? So on this slide we were able to do a brand lift study based on a particular tactic we used this summer in the New York City market. Had digital kiosks throughout Brooklyn with video as well as static ads. We also had advertising on the Long Island Railroad and Metro North Railroad. They did a brand list study for us and they were able to report that 50% of visitors were called seeing the ads, which was over benchmark, which is around 41, 43% for travel tourism in general. Particularly of note that, you know, younger adults 35 had a higher rapid recall. What is the impact of that? We found that just folks who were exposed to the ads, we found they had almost a 10% brand lift in how you would rate Vermont as a destination. If folks actually recall seeing ads, we got a 30 lift. Again, over benchmark, which was normally 18. So then moving from just, you know, a little about the destination, would you consider a Vermont? So this is the next slide, because you know it's really about will they actually come? So again, just being exposed to the ad, we've got, you know, a small 2.6% lift. If folks remember seeing ads, we've got an almost a 21% lift in their intent to travel. With all of our advertising, we're always looking at how we can quantify the effects effects and so to the point made earlier about how could we replicate the solar eclipse, well maybe we can't do that specifically, but we have a specific study from Vermont that shows with just a 2.2% brand lift that translates into 400,000 visitors. We saw 175,000 visitors completing those, that's double

[Speaker 0]: the amount, so if we are able

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: to continue our advertising in these very core markets and are able to achieve that kind of brand lift that is bringing visitors here much like we saw with So how does

[Speaker 0]: a consideration lift translate to actual traffic?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: So I'm going to come to that as well. Okay. So there's all sorts of different levels that we can do this, right? So we, you know, we know that a purchase decision doesn't just happen overnight, So part of it is how do we stay on top of mind, then it's how do we actually achieve that intent? I don't have to focus on this, the next slide is just showing that with all of our activities, whether we're bringing reporters here, bringing influencers here, we're filming this season for next season's advertising. We're always trying to make sure that we are all over the state. So that's just a quick math that's just showing that we have enjoyed filming and bringing attention to communities all over the state.

[Speaker 0]: Which is great. Do

[Sen. Kesha Ram Hinsdale]: you track data on how many people struggle to get here or return because of a lack of available flights, hotels, infrastructure, roads, like

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: It's always tricky to know why people didn't come, but it's always easy to ask them why they did come. We tap into a year long visitor intercept survey. I don't have those results in here, but it's really something that I can follow-up on. At the end of that, granted those are people who did come, but we do have a section that says, you know, basically what's your satisfaction? Mostly it's very very high but a few that you know have some dissatisfaction we see maybe single digits of like you know perhaps it

[Sen. Randy Brock (Vice Chair)]: was more expensive. You're not surveying, are you quantifying what they're reacting to like whether it be air travel or you know

[Speaker 0]: hotel quality whatever. Show traffic. We have what they share with us yeah. Are you asking that? Yep we're asking them were

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: they satisfied with the experience.

[Sen. Randy Brock (Vice Chair)]: Not what they satisfied with. These aspects but dissatisfied with these aspects?

[Speaker 0]: If unsatisfied,

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: what happened? If unsatisfied, we provided the opportunity for them to tell us why they were unsatisfied. So it wasn't category like was a business. You have that feedback. Yeah,

[Sen. Randy Brock (Vice Chair)]: that helps us in other committees.

[Sen. Kesha Ram Hinsdale]: You know my anecdotes, but I made my husband like, I was like, am I biased or is every other family we're seeing leaf pee being Indian? So you need to reach out to me because there were so many Indian tourists this fall that I saw and they have very specific ways that they're going to experience things and they really like to travel. That's great to hear.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Yeah. We will have a more complete report on which includes Pearl Passport. We should talk

[Sen. Kesha Ram Hinsdale]: to all the Indian hotel owners and whatnot.

[Speaker 0]: Great packages. Yes, so then I have

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: a couple of slides on our winter campaign last year, again you know the different types of tactics that we employ, some examples of

[Sen. Kesha Ram Hinsdale]: our creative, I want to bring

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: you to slide 22 which is where again how we grew up the title of

[Speaker 0]: the slide because they're not numbered. Okay.

[Sen. Randy Brock (Vice Chair)]: They are, what we know by the dates.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Oh okay, thank you, yeah. So slide 20 we're two, talking about again advertising effectiveness. How do we measure what it is that we've been able to accomplish with our advertising? So with this particular study, this is survey based, know, did you see the ads, did you not, what did you think? We were able to generate a 44% awareness with the target mortgage that we were looking at, which was about 4,000,000 winter travelers that we were focused on. If you look at the next slide, here's where we can see that, you know, one, not only were our ads, you know universally received possibly 90% which is over the average of 60, the goal is 75%, that consumers do recall seeing them in multiple avenues which is important because we know that it's all about different touch points, know, impressions that bring someone to actually change their behavior. We can also see that folks who were exposed to advertising stayed longer, they did more things on their trip, and they spent more money. Taking that even one step further, so like what is that actual ROI? So if you want to study any slide in this presentation, that would be slide 24, which is what does that all add up to?

[Speaker 0]: So, just walking through the

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: math here. So we know that some people will come anyway. What we're trying to establish is like what is that travel increment between those who would not necessarily travel but did travel based on our advertising. We have calculated that to be at 3.630.6% may not seem like a lot when you do the math, so we're talking about we received a 44% awareness, you can see this on the slides, with a 3.7 travel increment that's 145,000 trips, this is just from last winter's campaign, of people who came here specifically because of the advertising.

[Speaker 0]: $105,000 145,000

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: specifically because of the advertising. We look at how much do they spend. They spend an average of over $2,000 per trip, that comes out to $300

[Speaker 0]: per person

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: per trip or family unit. That translates into over $300,000,000 economic impact. So considering that we spent 5 and $38,000 on our winter campaign, that's a 574 to one return on investment. Wow. If you think about this specifically, it is for those same 145,000 people. So we're not talking about the 12,000,000 here. We're talking about a 145,000 that I can prove to you came here because of advertising, spent $23,000,000 in taxes. Again, that's a 430 530,000 three to one. Four to three

[Speaker 0]: to one tax. That's pretty damn good. I would like to think so, yes. So what we

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: were doing works. We would love to continue doing more of it and we certainly shall. I will point you to the next slide which is just a little bit of a wake up call which is that we are not alone in this game for temporary taxpayers to support our economy. Towards it's a very competitive landscape, we did do a brand study this year that looked really closely as to where DISTRONOFF fit versus our closest competitors. I can let you look at this more closely, but basically, you know, the study comes out of black and white says, you know, our problem is not that Vermont doesn't like us, it's that we are completely overlooked. We are not on people's radar. There are the states like Maine and Massachusetts are always higher above us in terms of intent to travel. People just aren't familiar with what we do because we do not have the loudest voice, because we do not have the kind of budget behind us that other states do. So if you ask people in the National Survey, they are asked, you know, no Friday or whatever, know, where would you consider going in the Northeast? Less than 15% named Vermont. So we're behind Maine, New York, Boston. We have work to do. This data, this study is, again, is folks who look at destinations all over the country. They're putting in saying that our appeal as a destination is not enough to keep us competitive.

[Sen. Kesha Ram Hinsdale]: Maine just has a great slogan. They also have

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: a $17,000,000 budget that they've had I'm

[Sen. Kesha Ram Hinsdale]: curious out, okay, tell us what's different about Maine. They have a $17,000,000 budget, ours is 8,000,000?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Ours is 4,000,000 for destination marketing. Okay. Actually I think Maine's honestly is more than that but I focus on the fact also that they have had that for twenty years.

[Sen. Kesha Ram Hinsdale]: Right and do they, are they seeing, are they doing better than us in this typical market?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: Yes they do. More people know about Maine, more people think about Maine than they do to Vermont, yes.

[Speaker 0]: Okay, we are now into our break time so I just want to keep

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: So you there's a lot in here so I, again, that's one reason why I want to make sure that these slides have a lot of information. Be happy to come back. The next slide kind of talks about a list very briefly just full list of all the different projects that we've been involved in since we have been the lucky recipients of that federal funding that has now been spent down but we were able to look at research, were able to look at, you know, again these advertising effectiveness studies, we were able to invest in some workforce programs which I can talk about briefly, they're in here. We also were able to create a destination management plan, that's on page 28. We've been working the whole past year on that. Basically it's a blueprint for the industry going forward for the next five to ten years. How can we really sustain the visitor economy? We were able to identify four strategic imperatives. Those are basically focusing on destination marketing. You know, what does it look like to have a resilient tourism sector? How do we think about our tourism infrastructure, and then how do we think about the visitor experience. I don't have time to go through those four imperatives, but each of these imperatives has a set of objectives and within those objectives we have specific actionable initiatives that we will be undertaking with the industry. This is a plan not just for ourselves, but for the industry as a whole. We'll be going around the state over the next couple of months to bring us to different communities. We've already done one session down in the Bennington Manchester area to really talk to our stakeholders, know, what does this mean to you? What do you see in here? Lines with your strategic priorities, you know, some of these objectives are around, I mentioned, you know, spreading folks out around the state. We're also looking at, you know, how do we think about seasonality? How do we think about meetings and conventions? How do we think about diversifying our visitor base? How do

[Speaker 0]: we think about, you know, whether

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: the infrastructure for outdoor recreation or if it's thinking about, you know, making sure we have the right visitor experience for folks with disabilities. There's a lot in here, which I wouldn't do it justice. We will have you look

[Speaker 0]: back after the budget address. Okay. That sounds wonderful. So And in between, we just focus on the three minutes we have left. I'm your asks. Or are you not able to make your asks until after the budget?

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: I think it'll be more productive if we had it after the budget address. So I will in the time I have left, again, there are slides here where we're able to do two specific workforce initiatives with the EDF funding we received, one we were able to fund 12, but to do We still really want to

[Speaker 0]: continue, I think, because of that money evaporates.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: That money is gone. So I would say with, you know, the wrong outdoor business alliance, you know, know that this committee is able to hear from Kelly also on a regular basis. I think she can tell you more about what they have in the future. This was great that we were able to help them develop curriculum that they can do going forward. So the upfront investment has been made and there are outcomes of that program on page 33. We were also able to help launch the hospitality management certificate at UVM. They've run two cohorts of that program already. They have a new cohort starting in February, so again we were able to provide that impetus to get the program off the grounds. Now it should be up and running. And that's a

[Speaker 0]: certificate course available to undergraduates or to

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: To all of anybody, so incumbent workers who might be looking to advance, folks looking to get into the sector would certainly welcome and I know that UVM is looking to actually extend that to current students right now

[David Weeks (Committee Clerk)]: it is continuing education but they

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: are looking to extend that to current students and are working on a new certificate for outdoor recreation and snow sports which they hope to launch in the fall. Online or? They are online. One of the things that's a unique feature about this training is that they all have a capstone internship which is a paid internship that they do at a Vermont location, so either an inn, resort, and so forth. Housing is provided if needed, so they're able to get that on the ground information. Love you too, but I need tea.

[Speaker 0]: So yeah, we're gonna right here, we're gonna have you back after the budget address. Okay. I and at that point, because we're gonna need to just at least have a draft on what

[Sen. Randy Brock (Vice Chair)]: we wanna include anytime we come to go.

[Speaker 0]: Okay. So hard rubber. So maybe you and I can continue this over but offline and can other members of the committee as well. Sure. This is really an impressive and really gratifying report. Thank you

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: and I had to limit myself to 45 slides because there's so much I could tell you.

[Speaker 0]: There is so much and I we are all so grateful and it always reminds us to really appreciate what we all kind of sort of take for granted, but it doesn't happen without the investment and I would remind us that you look at those differences and there we are.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: It is real. I would love to come back, ask Budget Dress the end of this packet. I will just flag up the books if you want to look at it. It's about our relocation program.

[Speaker 0]: So this is a key piece and we'll follow Kevin Chu's report because Kevin Chu as we all know says we need more Vermonters. Right. So Randy, this and I are big into supporting bringing people to Vermont and it happened for a long time this committee has supported that and we really need a strategy for how we do that that incorporates the rest of the legislature because we've had a hard time bringing them along in terms of understanding that we are investing hundreds of millions of dollars in Vermontries. It's not that we're ignoring Vermontries. We need them to ignore Vermonters. Not at all.

[Heather Pelham (Commissioner, VT Department of Tourism & Marketing)]: So So there's information in the packet about in Vermont, which everyone else is about relocation, but it's also about retention to your point about once folks are New Vermonters, need to make sure that they stay. So

[Speaker 0]: So with that