Vermont Legislature SmartTranscripts:

[Sen. Alison Clarkson (Chair)]: Everybody does everything they do in such short period of time. Are live. Welcome. Welcome back to Senate Economic Development, Housing, and General Affairs, where we are turning our attention back to our economic development bill s three twenty seven. And with us, we have Linda Rossi, who is our well, she's gonna introduce herself, and I we're going to be addressing sections of sections 13. So we have Linda Rossi and we have Emma Paradis. And then we're going to address section seven and the redrafted section seven and eight. So I think that is what we're going to do until noon. Linda, welcome back and it's yours.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Well, good morning. Thank you so much invitation to join you and for accommodating my schedule. Know you had some testimony last week on it. I was out of state in Washington, D. C. For the record, my name is Linda Rassey. I'm the state director of Vermont Small Business Development Center. I really appreciate the committee's support of the Vermont SBDC as outlined in S-three 27. I did not provide remarks or a slide deck ahead. I figured I'd have a conversation with you. I want to hit three topic areas and really give time for what is important to you, what questions you have, and then I'm happy to package any responses with some notes back to you if you want that as reference material on this note. The first point is really why now? Why is it critical to have this increase? I want to touch on that now. A little bit of context. The SVDC, and some of this may be refresher, but I know since I saw you all last year, you had a lot of material, a lot of conversation from a variety of people as evidenced by what's on the board that you're amazing. SBDC in Vermont is part of a national program. It is really built on a partnership that is a cooperative agreement. The funding is a combination of federal dollars and non federal dollars as the match to that. And our host, which is our employer, is the higher education system, Vermont State Colleges, Vermont State University. So that's the three legs of the stool that combine to be the SVDC program. And so the SVDC is required to have one to one non federal match to our federal dollars.

[Sen. Alison Clarkson (Chair)]: So it's what's what's the match again? And it's section three, not 13, so I apologize. There is no yeah. Correct. Okay. What is what's the match requirement again?

[Linda Rossi (State Director, Vermont Small Business Development Center)]: So one to one What? Nonfederal to federal, and at least 50% of that has to be in cash. And this is where we could certainly go down, you know, the rabbit hole of match that is not cash, but it can be in kind and waived indirect. I'm happy to give you lots of details when and if you would like it. The cash match has always come from and is typical to come from the state in all SVDCs, and we have been very grateful for that for the past thirty three years of our organization's existence. The funding that is proposed in s 03/27 will allow us to accept the full federal award for Because 2020 we let me just clarify that. Sure. We have on line '21. We have $689,000 Right.

[Sen. Alison Clarkson (Chair)]: Of which that is the full federal match. That is what the feds are giving you this year.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: So the federal amount that has been confirmed is $833,000.

[Sen. Alison Clarkson (Chair)]: So it is lower than the federal match.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Right. But I will have the ability to have some in kind and waived indirect Got it. From our host to the tune of approximately $200,000 or so.

[Sen. Alison Clarkson (Chair)]: So this would enable you to actually meet your dollar for dollar.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Yes. And otherwise, we would be leaving federal dollars not able to be drawn down. That has not happened in our thirty three year history, so I'm really grateful that you see the value. You have this bill with this proposed increase. The governor suggested budget at that base of $3.88, $8.89, we would be short, to draw that down. While we are incredibly grateful for the state's support, and I say support in a lot of ways, it's the funding, but it's the true partnership of being there through floods, through pandemics, through business issues, economic and demographic challenges. However, over the last eleven years, our state base level has only increased $31,000 while our federal How many years? Eleven years. So the gap in terms of our federal dollars going up slightly, you know, to keep pace with some increased demand and COLA and so forth. The state side has has not been able to. And so So you've left money on the table. We have not. You never have. We never have because we were at last year, these numbers. Seven seven seven seven seven seven was our federal number, and we had three eight eight, you

[Sen. Alison Clarkson (Chair)]: know, is exactly half. And so you

[Linda Rossi (State Director, Vermont Small Business Development Center)]: figured out how to how to supplement what and and we could talk about how I go about doing that. But in a nutshell, what I'm able to do besides our core full time advising team that are employees covering all counties of Vermont is going out to the private sector and securing consultants who have a higher market rate than what I pay them under contract. We're able to track that count, some of that as in kind. So, I'm always willing to do all elements of managing the budget, but we definitely want to make sure that we're not in a situation of leaving federal money out there that we cannot match. So, again, our host, our fiscal sponsor and agent, the Vermont State University, part of the Vermont State College System, they don't contribute cash. They provide administrative shared services. So, our payroll benefits, IT, they do provide some office space in a few locations of their campus sites around the state. We look at that as a great opportunity in the future to leverage bringing the community of business owners to the campus to have meetings with us one on one. And

[Sen. Alison Clarkson (Chair)]: to recruit students.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Exactly. So one thing just as a a reminder that the per federal statute, the SBDCs are not allowed to charge for our services. Right. So unlike some other organizations where you could have a fee for something that you're doing, we don't have that availability to charge for the advice and services. So that's sort of the first, it's sort of the why now, why it's critical, a little bit on the financial side. I do want to focus on why it makes good return on investment sense for all of you, and for the state. You know, I think, from my past conversations, the proven track record. Thirty three years of service to Vermonters, just as a snapshot, and I'll provide this so you'll have it. Operating budget last year, dollars 1,200,000.0 resulted in four forty five individual Vermont owners who are our clients being served. That they secured $9,700,000 in new capital. Started Nine point what? Nine point seven million. They started 24 new businesses, created and retained over 200 jobs. This is across 148 individual Vermont towns. Yeah. So I know when we talk about statewide, it it's helpful to really share with you that we're talking about across, you know, out of two fifty one towns, 148 of them were represented in our clients last year. There's additional services that we have, people who just call us and have quick questions or seeking guidance that don't become clients in those larger numbers, but that we do some triage and warm introductions and handoffs to other entities that might be the better fit for them. I think the point about return on investment is we are not able to put our results out there as outcomes unless the client verifies them and attributes them to our work. So, it's very tight. I mean, results are more than what I'm sharing with you because we only are allowed to claim that the client said, yes, I was able to get this $40,000 loan or this half $1,000,000 deal That's right. Because of your advising. And we do have nationwide and independent third party economists that conducts a study every year. It looks at our clients who have more than five hours of advising. And what it concludes is that clients of the Vermont FPDC have greater increases in sales and employment levels than the general small business population.

[Sen. Alison Clarkson (Chair)]: That's great. So our

[Linda Rossi (State Director, Vermont Small Business Development Center)]: clients, 16% sales increase, general population,

[Sen. Alison Clarkson (Chair)]: 3%.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Employment increase, 21%. General population, 1% increase. This isn't about any sort of patting ourselves on the back. It's really to demonstrate to you, because I know from here, there's appropriations conversations and others, it'll be crossing over and we'll be talking to the House Committee about this. I want to assure you that money invested in the SBDC has a solid return on investment when you're making choices. We have to be accredited every five years nationally to continue to receive money. It's a rigorous process, and we're gonna be having ours this June, so I'm getting ready for that. So, again, the first was why is it so critical now? The second was it's a solid investment with ROI for you. The third is really to share with you my thoughts for what this increased money will go to. I am always open to being an ear on the ground, to being adaptable and using money in a flexible, nimble way for what businesses need and gathering that input along the way. So this isn't rigid, but it is a plan. And there are two top economic and demographic factors that we're poised to use the increase for. And again, our advice, one on one, confidential, no fee. First is the increased demand from business ownership transition. Know you've talked So about succession Vermont's aging population, as we all know, means Vermont small business owners are also in that group. And so creating a plan prior to selling so that we have legacy businesses that transition to employees, plural, employee, family, outsiders. It takes a long runway, and it's intensive, and we want to spend more time on that because we know that that is a critical point right now. Part of that is also thinking about our next generation and being available to them to buy businesses, work in businesses, apprentice in businesses. We have a close relationship with the Vermont Career and Technical Education Centers, I see a natural fit between the trades and the technical skills that are being taught in our schools to a natural entrepreneurial endeavor down the road. So business succession planning, and if there is one area of advising that has risen to the top during the pandemic, through the floods, and remains, that is accounting and financial literacy or having a strong sense of your numbers. A lot of our partners, other service providers, we talk to each other and we try to tackle who's going to do education, who's doing one on one, so that we're not duplicating in this arena. But when entrepreneurs and business owners understand their financials, they're better equipped to make informed decisions. We see over and over people going after money that is quick access, high interest rate as a real burden, their debt increases. And so we really feel like that is another area statewide across sectors and not just startups, but existing business owners who really could benefit from extra advising. So I think the part of of the bill that talks about the task force, I just wanted to say, I think you know this.

[Sen. Alison Clarkson (Chair)]: There's new language on

[Linda Rossi (State Director, Vermont Small Business Development Center)]: that too. Oh, okay. All I was gonna say at this point, I have not seen or heard any language, but that I welcome the opportunity to be a contributor in whatever way is helpful. Again, I see that as a a mechanism to ensure leveraging the way that we provide services across stages, topics, industries, so that again, we're reducing duplication. For now, I guess my final sort of thoughts are, I I really do understand that you balance a lot of priorities. Well, and sadly,

[Sen. Alison Clarkson (Chair)]: this year we our our sandbox is is so shrunk. And so the your ability to draw down more feminine dollars is very appealing and is a great help in our justifying this ask. So in addition to all your incredible data on how helpful you are to Vermont businesses.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Thank you. I would say, and I know that this is my perspective, but I'm also a taxpayer, I've been a mom, I've been involved in school board education. And so when I think about the small business support system and economic development, we know small businesses are the backbone. We know they're the community anchors. There's no question about that. But strong small businesses support education, housing stability, public health, local tax revenue. So I know that when I think about when we prioritize small businesses being successful, we are investing in the rest of the systems that's staying for Vermont.

[Sen. Alison Clarkson (Chair)]: I think this committee appreciated Yes. That Which is why we have really limited this, a lot

[Linda Rossi (State Director, Vermont Small Business Development Center)]: of this bill to supporting and helping grow small business. So thank you for your time, for your consideration. I'm happy to answer questions or follow-up with any data or things that would be useful to you as background, backup. Too many questions for Linda, David?

[Sen. Alison Clarkson (Chair)]: We're in Kesha, if you could get us the data, that would be terrific. Just remind us, your operating budget is 1,200,000.0. You so you raise the rest. You get, Ideally from the feds, you'll get

[Linda Rossi (State Director, Vermont Small Business Development Center)]: eight Yes. Eight thirty three. I wrote it down so have that. Yeah.

[Sen. Alison Clarkson (Chair)]: And so you'll raise the rest from your various

[Linda Rossi (State Director, Vermont Small Business Development Center)]: So at least 50% has to be cash. Right. And at this point, there's no other source of the cash other than the state of the The rest, I will figure out and work with the Vermont State College System on the indirect that they are willing to waive and continue on the how to round out given these priorities of the demographics and these these top tier issues. If I need to enlist that same strategy, I will continue to pull in some in kind from those private sector sources that are willing to do work under contract for us at less than their market rate. So always willing to do whatever it takes to get to that one to one required man.

[Sen. Alison Clarkson (Chair)]: Well, because you're your own entrepreneur. Thanks. Well, that and remind us how many you employ. Seven point

[Linda Rossi (State Director, Vermont Small Business Development Center)]: five FCEs are our business advisors covering all 14 counties of Vermont, and our leadership team is myself and an associate director who does all the grants, financial compliance. That's that's gone. That is Heather Gagne. Okay. She is a behind the scenes person, very critical, and we have a half time administrative assistant. Wow. That's a great one.

[Sen. Alison Clarkson (Chair)]: That's a lot of work, and then you work with all sorts of other people to provide

[Linda Rossi (State Director, Vermont Small Business Development Center)]: these things. And, you know, I will say, we there is not anything that we do in a silo. I mean, we we do everything in partnership. It only makes sense. If there's a tool like developing a road map on how to sell a business, how to buy a business, it's it's not, you know, a handout for do it yourself, but we do create materials and resources with our SPDCs around the country. If we're a leader in disaster recovery, which We have seen. Have seen, and others are a leader in the use of AI or cybersecurity, We share so that we're not wasting limited resources and time developing things that are already available and could be just tailored to Vermont. No. It's one

[Sen. Alison Clarkson (Chair)]: of the great pieces. I mean, you're one of the great small business resources, but you're also a small business resource that has federal and national opportunities for cooperation, which is terrific. Yeah.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: I will follow-up with this material.

[Sen. Alison Clarkson (Chair)]: Yeah. No. It would be that would be great. So we're so grateful. Thank you, Linda, for all your work. Thank you. And we will welcome Emma up for Yes,

[Linda Rossi (State Director, Vermont Small Business Development Center)]: sir. Yes.

[Sen. Alison Clarkson (Chair)]: Thank you. Yes. Thank you very much. You.

[Emma Paradis (Co-Director, Common Good Vermont)]: Good morning. Thanks so much for having me. It's my first time here in the session.

[Sen. Alison Clarkson (Chair)]: It's have you met all of us?

[Emma Paradis (Co-Director, Common Good Vermont)]: I think yeah. Last year. Okay. Great.

[Sen. Alison Clarkson (Chair)]: Great. Well, and we have here Pritchenden. Excellent. Alright.

[Emma Paradis (Co-Director, Common Good Vermont)]: So, thank you for having me in. For the record, my name is Emma Paradise. I'm the co director of Common Good Vermont for a statewide program of United Way of Northwest and the third Vermont nonprofit sector.

[Sen. Alison Clarkson (Chair)]: Rich, we'll remind we I don't think we all need to be reminded that our nonprofits are businesses.

[Emma Paradis (Co-Director, Common Good Vermont)]: Nonprofits are businesses. Right. Yes. And also the many very small. Many are very small. And so we support organizations in all parts of the state across all different mission areas, and this is just a great representation of all the organizations by county and mission area. And so, I just want to start by saying, I know this is a really difficult FYPCA year, and that there's many competing priorities that you're considering, so I really appreciate the opportunity to talk about this proposal to strengthen Vermont's nonprofit sector at this very critical time. Our goal is really to provide timely and strategic intervention while building long term resilience for the sector. But we're really flexible as to what that might look like. We're happy to work with you to see if there may be a funding path and to make sure that any new program offerings are not additive and not duplicative. So really, at its core, this proposal is about preparedness, federal policy changes, and funding uncertainty are affecting nonprofits across the country.

[Sen. David Weeks (Clerk)]: I apologize, but is this related to a specific sanction?

[Sen. Alison Clarkson (Chair)]: No, Emma has asked us to consider including this in this bill. I'm just wondering. That is where we're going.

[Emma Paradis (Co-Director, Common Good Vermont)]: Yes.

[Sen. Thomas Chittenden (Member)]: We don't have language that we're considering right now.

[Sen. Alison Clarkson (Chair)]: No. I don't think we have language at the moment.

[Emma Paradis (Co-Director, Common Good Vermont)]: The time. Oh, I appreciate it. I welcome you to questions. Feel free to Right. And so, this isn't in the bill yet. We do, I shared on your community page, there's a full outline of the proposal and I'll walk you through that as well today.

[Sen. Alison Clarkson (Chair)]: But yes, this is really to fill the gap in funding for Yes. And you have money appropriated for the last several years.

[Emma Paradis (Co-Director, Common Good Vermont)]: We have never received public deposit before the secretary. Got it. We are entirely funded. Okay.

[Sen. Alison Clarkson (Chair)]: Well, you're gonna get how you're funded and what you're okay.

[Emma Paradis (Co-Director, Common Good Vermont)]: Yeah. So currently, we are entirely funded through program fees, membership dues, and private philanthropy. And so we do run educational offerings and certificate programs, webinars, and we just launched a membership program in 2025. So those are our big sort

[Sen. David Weeks (Clerk)]: of big There are, correct me, Vermont, there are some fairly substantial state, support for nonprofits who could work for on behalf of the state.

[Emma Paradis (Co-Director, Common Good Vermont)]: There is no public specific That's for

[Sen. David Weeks (Clerk)]: a nonprofit. Yes. Did they have a contract?

[Emma Paradis (Co-Director, Common Good Vermont)]: I think they provided specific, training for childcare providers. There are some you know, what we call hub organizations who serve maybe certain subsectors, but that's not necessarily peppering every single nonprofit in the state.

[Sen. David Weeks (Clerk)]: Right, no, I get that. But that is a revenue source for nonprofits.

[Emma Paradis (Co-Director, Common Good Vermont)]: Oh, sorry. Sorry, sorry. Yeah, so many nonprofits do receive state and federal funding. However, CommonGood as the capacity builder for the sector does not receive any state or federal funds to provide these services for nonprofits. And so, yes, at this time when federal policy changes can fund uncertainty are really affecting nonprofits across the state, the question before us is really, do we want to allow those impacts to unfold in a fragmented and reactive way, or do we want the state to partner with the sector to really plan ahead, coordinate, and reduce risks to Vermonters and the state budget? And this proposal is really not about growing programs or preserving the status quo. It is about making sure that federal conditions change, Vermont avoid service disruptions, job losses, and emergency interventions that cost more and healthier people. It's also aligned with the recommendations made by the treasurer's task force on the federal transition described in their 2025 final report, and you'll see I submitted a supporting letter from the treasurer as well.

[Sen. Alison Clarkson (Chair)]: So just to give us a big picture, because as nonprofits, our businesses, they are also able to go to the Small Business Development Center to you don't have to be for profit business to use your resources.

[Emma Paradis (Co-Director, Common Good Vermont)]: Correct? You to become a client of the SBDC, you are a for profit. You have to be profit. However, I was just gonna say we have provided educational sessions that include nonprofits because in that respect, we're allowed to do so. So, again, always trying to work with partners to figure out where

[Sen. Alison Clarkson (Chair)]: the gaps are. And the common good as a an umbrella service organization for the nonprofit sector can give us a big picture of the nonprofit business sector? How many businesses, what the economic impact is on Vermont and what the needs are?

[Emma Paradis (Co-Director, Common Good Vermont)]: Yes, I have a slide jumping right into that.

[Sen. Alison Clarkson (Chair)]: Because we have

[Emma Paradis (Co-Director, Common Good Vermont)]: about enrollment. Okay, perfect. And so I just wanna highlight that our proposal that we're requesting includes 295,000 in one time funding, and that would really focus on helping nonprofits navigating federal cuts, executive orders, and policy shifts that affect service delivery. We also have a base proposal for 267,000, which would improve nonprofit capacity, financial management, and compliance, and really builds on the work we've been doing with the state over this past year on improving state grant contract systems. And so we have more than 50 organizations who have signed on in support of this proposal and are ready to work to ensure public investment in our sector will have a long lasting impact. And so, yes, I wanted to highlight that nonprofits really are economic drivers. There are 6,400 nonprofits, 4,500 of those are charitable organizations. So what we're generally speaking about when we're talking about nonprofits

[Sen. Alison Clarkson (Chair)]: Sorry. Sorry. Say those numbers again. I was sort of thinking about something.

[Emma Paradis (Co-Director, Common Good Vermont)]: So it's 6,400, all five zero one c organizations, but public charities, are a subset of five zero one(three)s are the primary folks that we're working with, and there's 4,500 of those esteemed. Many of them are small. We tend to work with the ones that are small to mid size. There are also, you know, very large human service organizations we work with, but also state hospitals and education institutions are included in that as well. But nonprofits are tenants, they're purchasers of goods and services, they're major employers employing one in five Vermont workers. Do you have

[Sen. Alison Clarkson (Chair)]: a total on how many? On how many jobs?

[Emma Paradis (Co-Director, Common Good Vermont)]: I think it's 63,000. It's huge. Huge. And so, one in five remote workers, everything from health care, housing, child care, arts and culture. And they make our communities better places to live, work, and play. So whether it's an arts and culture organization that's attracting visitors to a community where folks are gonna spend money at local businesses, or whether they are creating opportunities for folks to rejoin the workforce through childcare services, or providing health care, outdoor recreation opportunities. We're really, really critical to our amongst economy and many fronts, and we famously operate on tight margins. When I think actually we have some of them. I think one of

[Sen. Alison Clarkson (Chair)]: the highest per capita non of nonprofits in the country. Second. Yeah. Second.

[Emma Paradis (Co-Director, Common Good Vermont)]: I'm sorry. After on Canada. Okay. And so on these tight margins, nonprofits really struggle. When they struggle, the impacts show up quickly. Workers are laid off, services are refused, and municipalities start to feel that pressure, and state agencies are asked to stop it. What we're seeing now is really not a theoretical risk. Nonprofits are delaying hiring, pausing initiatives, making contingency plans because federal funding streams they rely on are becoming less predictable, and in some cases, we're already seeing program closures and layoffs. And the cost of the state reacting to these failures after they occur is almost always greater than planning ahead.

[Sen. Alison Clarkson (Chair)]: So when you talk about uncertainty of funding, that's primarily federal funding? Yes.

[Emma Paradis (Co-Director, Common Good Vermont)]: And And how many in general. Sorry.

[Sen. Alison Clarkson (Chair)]: And can you give us a notion of the 4,500 businesses you work with? How many of those 4,500 would you say are dependent on federal funding?

[Emma Paradis (Co-Director, Common Good Vermont)]: I would say between at least two to 400, I would say, of the larger human service community development organizations. Well, and

[Sen. Alison Clarkson (Chair)]: the cuts to the arts and to the humanities. Yes. Those are all the colors of these.

[Emma Paradis (Co-Director, Common Good Vermont)]: And we've seen yeah. It is huge. So I

[Sen. Alison Clarkson (Chair)]: think we all appreciate that this this is a very challenging time for particularly cultural and art outcomes.

[Emma Paradis (Co-Director, Common Good Vermont)]: Across the board, really. And so, we really see this proposal as a way to address real and widespread gap, and this conclusion that I'm showing here is supported by the treasurer's task force. And the task force didn't recommend creating new programs. It recommended proactive convening and coordination across sectors because of the shared risks that are evolving quickly. And right now, nonprofits are dealing with these challenges largely on their own. Some have the capacity to plan, but many do not, and no single organization really has visibility into how these pressures are playing out in other regions or service areas. And this gap is not a result, not a lack of effort. The gap is a absence of a structured statewide way to identify shared risks early, compare notes, and coordinate responses before problems escalate. And I also wanna call out that cross sector collaboration in this moment is really critical. Nonprofits sit at the intersection of fitness and government. While they may not while they have much in common and work in partnership with these entities, they also have many unique structures and a purpose that requires specific expertise and skill set in order to be managed effectively. And so without adequate structures in place, Vermont really risks a chaotic contraction of nonprofit capacity rather than an orderly transition that protects jobs and services. So getting into the meat of the proposal, in the short term, the most important thing this proposal for Widmer is is technical assistance. It does include a task force to identify cross equity, but really the focus is on this technical assistance program that will help organizations who are navigating funding cuts. So we're trying to determine what the impact of changes from Medicaid will be on their organization to assess what changes in housing and rental assistance programs need for their organization and clients, to obtain legal guidance when federal directives conflict with their missions or their operations. For a lot of organizations, this expertise does not exist in house. In a lot of cases, the outcome may not be survival at all costs. This technical assistance would also be able to support things around collaboration, mergers, consolidations, and where appropriate, an orderly wind down of certificates. And so that kind of planning is really difficult, but it's also really important right now. And it will rarely happen well without outside support. And are you able to provide all this? We have a robust network of consultants who we work with. And we also have two initiatives that we are working on with partners. One is a nonprofit legal hub, and we're working How does that is that different from the law school's small business legal center? This is really designed to skill up lawyers in the area of nonprofit law. We've seen the nonprofit law center is a partner on this project as well, but we are to see there is not enough capacity or resources to get nonprofits the support they need in this moment. The other piece of that is a shared services initiative to help organizations explore cost savings and other ways to amplify their impact through collaboration. And the two of those entities, later this year, we're launching a nonprofit help desk, which will be a one stop shop for organizations to come, connect with, submit an inquiry, connect with a real person who can understand their challenges and connect them with a wide range of expertise consultant trainings, educational resources that already exist throughout the day. So it's really leveraging existing infrastructure and putting resources into that.

[Sen. Randy Brock (Vice Chair)]: Terms of the resources that you draw upon, do you have any kind of estimate as to what percentage of those are for profit organizations and those that are non profit organizations that you use to consult the resources that you draw upon to do what you do?

[Emma Paradis (Co-Director, Common Good Vermont)]: A lot of our funding is private philanthropy. We do receive some funding through businesses or sponsorships.

[Sen. Randy Brock (Vice Chair)]: I'm interested in your spending.

[Emma Paradis (Co-Director, Common Good Vermont)]: In our spending.

[Sen. Randy Brock (Vice Chair)]: Yes. When you go to look for a service for a non profit organization, are you bringing in other non profits who may specialize in that area, or are you buying in other market, whether it be accounting services or consulting services of one kind or another?

[Emma Paradis (Co-Director, Common Good Vermont)]: Generally it's, yes, coaching through a consulting service.

[Sen. Randy Brock (Vice Chair)]: So it's generally a for profit organization that you're hiring to provide you with the advice or consulting in a particular area.

[Emma Paradis (Co-Director, Common Good Vermont)]: Yeah, many are very small independent consultants who have worked in nonprofits throughout their life and are now

[Sen. Alison Clarkson (Chair)]: Do they have a nonprofit right now?

[Emma Paradis (Co-Director, Common Good Vermont)]: Yes. We do in our membership program. We have a directory of consultants who offer two hours of free service to our members, which is one of the benefits. And, I think we would be able to negotiate so

[Sen. Alison Clarkson (Chair)]: that at some point they do get free service time.

[Emma Paradis (Co-Director, Common Good Vermont)]: Through a hard membership program.

[Sen. Randy Brock (Vice Chair)]: Well, terms of your accounting records or information to be made public to the public, you have a breakdown of where your spending goes so that you can identify if purchasing consulting services, etcetera, that would go to a for profit as opposed to benefits or gifts that you've received from other non profit organizations that may have a specialty that could be just moved to one or four of your vendors?

[Emma Paradis (Co-Director, Common Good Vermont)]: Yes, a lot of times we are the ones connecting them with the consultant, so the organization will be contracting directly with the consultant as it's currently stand.

[Sen. Randy Brock (Vice Chair)]: And so the organization provides the benefit that your member needs, but may purchase it on the market to provide it.

[Emma Paradis (Co-Director, Common Good Vermont)]: Right. So And that comes

[Sen. Randy Brock (Vice Chair)]: out of the revenues that you have, your organization, is that correct?

[Emma Paradis (Co-Director, Common Good Vermont)]: They don't, they're generally just contracting directly with the consultant. We'll do an intake conversation with them, understand what sort of supports they need, identify Who pays the consultants? Generally the organization.

[Sen. Randy Brock (Vice Chair)]: By the organization, you mean your organization? Do you mean the company or whoever's

[Emma Paradis (Co-Director, Common Good Vermont)]: If an arts organization comes to strategic planning support, we would connect them with a few different consultants, and then they would work directly with that consultant.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: And then they would be the ones

[Sen. Randy Brock (Vice Chair)]: that would pay the consultant as opposed to your organization?

[Emma Paradis (Co-Director, Common Good Vermont)]: Yes. And our thought is with this program that we would be the ones contracting with the consultant and have a roster of edit purposes.

[Sen. Randy Brock (Vice Chair)]: Would you be consulting with or would you be paying? Basically, your clients or your members need a consulting service, and I'm trying to understand, who pays for it?

[Emma Paradis (Co-Director, Common Good Vermont)]: At this time, they do. We offer some support in house, but we don't necessarily have financial expertise on the same level as the VA or we could provide guidance around board services and things like that, but we're not doing we also we're a small team. We are

[Sen. Alison Clarkson (Chair)]: Yeah. So what's your budget?

[Emma Paradis (Co-Director, Common Good Vermont)]: How many people do

[Sen. Alison Clarkson (Chair)]: you want? We're gonna have to shift in a minute. Yeah. Because I I think that would be helpful. And you primarily refer people. Yeah. I mean, what you are at a clearinghouse for some At

[Emma Paradis (Co-Director, Common Good Vermont)]: this time. Yeah. Our goal is to build up our in house capacity, but we're our budget is 4,500 currently. Yes. And we are a staff of three full time and one AmeriCorps instead of, but we are stuck in New York and Northwest, so they do provide some HR finance admin support.

[Sen. Alison Clarkson (Chair)]: So sorry, your operating budget has to be

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: more than $4,500

[Emma Paradis (Co-Director, Common Good Vermont)]: $400,000

[Sen. Alison Clarkson (Chair)]: And that is funded by membership dues primarily program participation. And he's going to talk to support. Yeah, got it, Thomas.

[Sen. Thomas Chittenden (Member)]: I know you need to move on. What I'd say is that I definitely think this sector needs support. What I'm concerned with is what I want to support is if it was more clearly identifying the opportunities for consolidation. I don't necessarily think the highest per capita number of nonprofits is helping the long term interest of Vermont. And as much as you say you don't want to have redundant services, these organizations acknowledge the treasurer's report have redundant components back office services that could best be achieved through coordinating, connecting, and ultimately merging. I'd love that this moves forward to really be a bridge, a clearinghouse to get these organizations to start to join together as I don't think our current configuration is certainly in our long term interest.

[Sen. Alison Clarkson (Chair)]: I don't like some of our school discussions, which is that so many shared there are so many opportunities for shared services and support in the administration.

[Emma Paradis (Co-Director, Common Good Vermont)]: And I think we are seeing that there's more sort of readiness and accepting of that in the sector at this time. As part of our collab shared services initiative, we're working with UBM students who are conducting research this semester. Our partner that leads the change Vermont have done extensive research. We've been hosting office hours on everything from shared health benefits to back office supports to other forms of collaboration, and we're seeing a lot more examples of this. The Area Associations on Aging are a great, really aspirational model of this, but that would not have been possible without significant grant support. And so, think what we are seeing is that there is a need and a readiness, but there are not resources there to support organizations in making those strategic decisions and explore that further.

[Sen. Alison Clarkson (Chair)]: Thank you. And I have appreciated over the years what was before Common Good now has evolved into Common Good, the training for board members. Not all board members coming on to these nonprofits are equipped really to make be making some of the decisions they have to make. And they do very good board trainings, staff trainings, all sorts of things to make our nonprofits better businesses, which is really helpful. So just to be clear, your ask is two ninety, I wrote it down here, February February in one time funding and $2.67 in base funding. Yeah. And you've never gotten state support before. No. Does, And the treasurer's office doesn't support you in other

[Emma Paradis (Co-Director, Common Good Vermont)]: ways. And But

[Sen. Alison Clarkson (Chair)]: yeah. Right.

[Emma Paradis (Co-Director, Common Good Vermont)]: Not by any way.

[Sen. Alison Clarkson (Chair)]: So thank you, Emma. I really and I think we all really appreciate both the sector that you're trying to support and and this effort. This is a tough year to be a first time funded organization, as you know, and we will certainly discuss this as we go forward. But I and we're so grateful for you taking the time to come and and fill us in on this because it's important work actually and one that serves Vermont and Vermont. The Vermont economy enormously.

[Emma Paradis (Co-Director, Common Good Vermont)]: I really appreciate that and I really appreciate the opportunity to work on that. And I think this is really the moment to do it.

[Sen. Alison Clarkson (Chair)]: Thank you. Well, there's certainly lots of challenges for our nonprofit. Thank you

[Linda Rossi (State Director, Vermont Small Business Development Center)]: very thank you very much, mister Troy. Rick, you wanna come join us?

[Sen. Alison Clarkson (Chair)]: And we have a couple things of one new thing that Rick may chat about. Well, one rewritten thing, and you have the new rewritten proposal on your desk.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Oh, you should stop sharing your Oh, okay.

[Sen. David Weeks (Clerk)]: This is still

[Sen. Alison Clarkson (Chair)]: This is 03/27. So this is, as you recall, Lyle Jepsen and the economic oh, are a gift from house commerce, and they're beignets for Mardi Gras, you know, celebrate Mardi Gras. They are raspberry doughnuts, and anyone is welcome to have some. I got them in half. So people didn't feel they have to have the whole thing, but they're evidently quite good. I have yet to partake one, but I'm told they're quite good. This Good morning. What I think we're seeing is a response to the proposal from the Department of Economic Development to take this important work on. And I also think there may be a suggestion or client that I've been developing later, maybe not. But, anyway, Rick, take it away.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Yes. Well, good to see you all. Rick Segal, I'm so close council. To So draft 1.1 is what you should have in front of you. So you may remember three twenty seven is a committee bill. Was it's still a committee bill. That vote was voted out a couple weeks ago. This draft, if you see yellow, those are the changes from the amendment that the bill committee bill you voted out initially. The chair told you that it was gonna come back. Here it is. Sorry. This is three twenty seven. Happy to walk through it all, madam chair, or maybe highlight the the changes to it. What would you like me to do?

[Sen. Alison Clarkson (Chair)]: I'd like you to highlight the changes.

[Sen. Thomas Chittenden (Member)]: Okay.

[Sen. Alison Clarkson (Chair)]: And, let's walk through oh, so this is the whole

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Just the whole bill? Okay.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: This is

[Sen. Alison Clarkson (Chair)]: the whole bill.

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

[Sen. Alison Clarkson (Chair)]: Great. Slim down considerably as you can see.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: I'm gonna start on page four of the bill.

[Sen. David Weeks (Clerk)]: So just for purposes the first one is

[Sen. Alison Clarkson (Chair)]: purpose. Second section is the down down the village tax credits.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Correct.

[Sen. Alison Clarkson (Chair)]: And you are taking us to I just wanna remind you know, as we go through this and then section three, which we've just been hearing about, expanding supports for small businesses, which were the three key pieces, and we added for discussion the Vermont Professions of Color Network, and that is where we're starting, guess, top of page four.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Yeah, and if you wanted, Madam, to explain the situation, why they weren't placed in the beginning, I believe there was some misunderstanding about how much money they were gonna receive from the governor's recommend. And so they were not initially included in the bill here, but after discussions with, the Vermont Professionals Code Network, it's my understanding that, this is to maybe make up for the lack of funding that the governor's recommend.

[Sen. Alison Clarkson (Chair)]: Right. So $60,000 we thought was in the budget for, the Professional of Color network was actually a a granted out as I from the department, and it's actually not money going to the network. And so Wee Weeks was here, and she gave testimony last week supporting or asking to continue to be supported at the not at the full range that she has been in the past, but at a an amount of 75. And she came back saying, actually, after her testimony in house of commerce, she is asking for what she really needs. So that is what she real that is what her her testimony was in support of actually this amount, which she is hoping that we will discuss and and support.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: So somewhere there's some detail as to what's in this $200,000 mentioned here. This her detail was in her testimony in in what they in what they do, and it's her her request is for us

[Sen. Alison Clarkson (Chair)]: to continue to support the resource work they do, and she has given sent lots of testimony to us, which we have. And if you don't have it, we can get it. It's on the website. So she was here last week and gave expense to have someone out of all the things that they do and and what they are but what was unclear was what the funding situation was. And so we're just trying to for discussion because we're gonna go through this and decide what we want to do in these sections as we have, as of next week, two weeks to work. So

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: So speaking to senator Brock's team, if you want here to be specific in what the funds can be used for, that's something you can do, you can talk about it. If you want the whatever amount, dollars 200, whatever it is, if you want to say shall be used for these purposes, you can do that. Again, I would probably talk to the network, and see what the specific request is. But this is pretty general language that

[Linda Rossi (State Director, Vermont Small Business Development Center)]: It's it's very general language.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Can can be more narrowed if you wanna speak. Right.

[Sen. Alison Clarkson (Chair)]: And it can be this just to remind you, this was your testimony of last week, which was was it was a it was a relocation grant for another that was a competitive grant that was money through the economic development department. And so it wasn't a grant to them. It was a grant. They they were granting it from their companies to another organization.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Charlotte, we've gone to the

[Linda Rossi (State Director, Vermont Small Business Development Center)]: next change.

[Sen. Alison Clarkson (Chair)]: Yeah. So what you have here, is her ask, and we have we had good testimony from her last week, which we can we can we can I'm happy to review for us as we go through this. And if you wanna do that right now, we can we can look at it, but I think let's look at the all the changes, and

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: then we'll discuss what we wanna do. The next change is, so we have section four, the VORAC, no changes there to the 200,000 allocation for their economic impact study.

[Sen. Alison Clarkson (Chair)]: Yeah, and they're going to come and really clarify what that economic impact study's objective is and how they're gonna do it. Yes,

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: David.

[Sen. David Weeks (Clerk)]: If I could, I'm sure. Just kind of to allow them to prepare. I'm quite interested in why this isn't an organic function within the department already, why they wouldn't make these recommendations.

[Sen. Alison Clarkson (Chair)]: In the Department of Forest, Parks and Recreation.

[Sen. David Weeks (Clerk)]: Correct. And why isn't this already just what they do? I mean, everything we do is about, know, what do they give, we give them funds, what do what do they give back to the state? So this is kind of like kind of a prime function. And I'm wondering if they can just at least address that as, you know, why, why don't they do this already?

[Sen. Alison Clarkson (Chair)]: Yeah. Right. Right. And why isn't Fort Park and Rank doing it on their behalf as their umbrella under which they a lot of their work says? Yes, ma'am. Okay.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Alright. So section five, there is a little bit of a change here. This is the International Business Office in Montreal. The original ask was or in the bill was one fifty. That's been increased to two twenty five because, there's been a request to dedicate money for a new office, for the Vermont and Taiwan relationship. This is something you probably want anteriorly to speak about and how this money would be used, but my understanding is that this would allow them to open up an office specific to the Taiwan relationship.

[Sen. Alison Clarkson (Chair)]: This actually would not be a whole office. This would be not unlike what we do in Montreal, which is basically hiring the services of of a representative in Taiwan who would help us in Taiwan both secure and work with us expanding Vermont businesses into Taiwan market and reciprocally having Taiwan business common invest in Vermont. We have the Taiwan delegation here last week, and they have just been allocated appropriated $250,000,000,000 to invest in American businesses. And the delegation in the New England area are very keen that that that some of that money be funneled into appropriate scale businesses here in Vermont. And Tim then has suggested this as an opportunity for us to really have a stronger liaison and with Taiwan. So we can't afford a whole office, but we working as we have in Montreal with a person who could be representing Vermont is what I believe is what this proposal is about.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: So we'll need to probably work on the word office. If if we're gonna utilize that same term, at least for Montreal, then we can work on some language, and maybe Tim can kinda talk maybe what he envisions this might have used more specifically. Yeah, so we'll get Tim

[Sen. Randy Brock (Vice Chair)]: in the flesh set up. This is higher representation as opposed to what the bill says, creating a new office. Right, right.

[Sen. Alison Clarkson (Chair)]: Who drafted it? Well,

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: we

[Sen. Alison Clarkson (Chair)]: use it in the other one too, even though it's not

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: starting We're not voting today, so happy to change language. No change in the Brownfields allocation. So section seven, major changes. Now, I have the introduced version if we need to go back to this, but section seven in the introduced version was a business resources inventory study to be done by ACCP, basically, Department of Economic Development. You had testimony last week from the commissioner and the deputy saying that not only were they okay with that, but they would like taking on the task force. That was in the next section, Section eight. Section eight was going to be a business growth development task force made up of several members across the government and even in the private sector that would be meeting to come up with various ways to help businesses in all stages of development, to grow access capital, those kinds of things. So, what we've done here is key aspects of the original Section seven, which was the study by ACCD, or DED, and combine that into this additional study that will be done to determine accessing growth, capital, and so forth. So I'll walk through this entire language just so we're sure what's going on here. So Subsection A, Business Growth and Development Study, the Commissioner of Economic Development and Consultation of Stakeholders for the purpose of determining how Vermont can better enable and support business growth through every state development shall identify the in state and out of state resources available to businesses and determine how the resources are currently communicated to businesses, create inventory of resources pursuant to that subdivision that would serve businesses for East State and development, determine how best to market. And so let me stop there. Those first two, that was the original study that the department was gonna conduct. So now the remaining subdivisions are kind of the task force duties that are lumping into this study done by Department of Economic Development. Three, determine how best to market and communicate the inventory of resources to Vermonters and the business community, determine how to improve succession planning for mature businesses, identify what resources are available to businesses to access capital, determine the state of capital access opportunities, including the investment environment in Vermont and the New England region, the availability of tax credits to leverage private capital, and the requirements to maintain Vermont's Tech Hub designation. The last task is to identify investor education opportunities for high net worth individuals interested in investing in Vermont businesses. So, again, I don't believe anything was was removed from the task force. This is just kinda combined We've combined them. Yes. And, again, happy to listen to suggestions.

[Sen. Alison Clarkson (Chair)]: And so it will conclude they'll submit a report on December 15

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Yep. Of this

[Sen. Alison Clarkson (Chair)]: year. Of this year, and we they will make their recommendations for legislative action if any is actually needed. What I'm missing in this rewrite is so now okay. So why don't

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: you finish it off? Well, that's so this so that was the end of the you you talked about the report. That's the end of the of the section. I'm happy that it was there something that you think was a group that shouldn't have been? I can give the

[Sen. Alison Clarkson (Chair)]: No. The one thing I'm missing in this is really the work clarifying and really producing

[Sen. David Weeks (Clerk)]: a

[Sen. Alison Clarkson (Chair)]: clear chart of, or I don't know what to call it, but clearly defining each stage of business development. And that's what I like about their flowchart that Nick had was this what I think Abby and I and what we've been trying to identify so that we're clear on what resources are are important for which stage in development. But you could see here they have four well, they you know, they have four stages of business growth. Yes. Start up start up, early stage, maturing, mature. And what I'm missing is they're identifying, really clarifying, identifying, I don't know what the right word is, those aren't the right words, the four stages of business development that they have here. And that I think would be helpful as they go through and identify what resources they're We wanna identify what resources they're for what growth, for what stage of business development they're eating. Does that make any sense? Because I think that's what's missing. That's what I, you know, when we hear companies that are just startups thinking about applying a veggie bowl, they're totally inappropriate for veggie. I mean, they we need to market and be clear to the business community. If you're a startup, this is what's available to you. Right, Linda? I mean, this is and if you're if you're growing, Liz, you have a thought.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: So the only thing I would say is and and I think, you know, this is a great effort to to get started. To to me, having a definition. There there are many different groups that have definitions of what stages are.

[Sen. Alison Clarkson (Chair)]: So, it nice having

[Linda Rossi (State Director, Vermont Small Business Development Center)]: a common language in Vermont about what the stages are, some descriptors, and then a little bit more depth on who does what. I'm assuming they're anticipating doing that.

[Sen. Alison Clarkson (Chair)]: Yes, very much so and building on what they've already done. But I think that's what the objective of this was, was to really what did you use? You used good words there, Linda. So maybe you and Rick could come up with

[Linda Rossi (State Director, Vermont Small Business Development Center)]: the right words for that. Yeah.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: So clearly defining each stage for the purpose of what?

[Sen. Alison Clarkson (Chair)]: For the purpose of

[Linda Rossi (State Director, Vermont Small Business Development Center)]: identifying which resources are appropriate for each and which are available, what resources are available for each stage in business development. And defining that stage because to the lay person they don't necessarily call it ideation. I'm starting a race. So, I think common language definitions and expansion of what is already a good start. Yes, because I think, yeah, David.

[Sen. David Weeks (Clerk)]: I just want to publicly thank Commissioner Jemstin for stepping up and offering services of this department to conduct this exercise as opposed to another child's force. Agree completely and we

[Sen. Alison Clarkson (Chair)]: are very grateful but and think too. It was a it was a team out and I think it was great. And so we're really pleased, but I think we wanna also make sure that we have the the language that we need.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Yep. Any other comments about the duties of the No. I think we're Sorry.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: I mean, I will speak it just I

[Sen. Alison Clarkson (Chair)]: will assume we're all delighted that this section is is has been recalled, and I agree. Thank you, Nick and Lyle, in case you're listening.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Okay. So now from draft 1.1, section eight previously was task force. So section eight on your screen was section nine, in the Infused Virgins. This is the Convention Center task force that was already created last year. This is just allowing them to meet eight more times, because they're apparently has more work to do. That has not changed from the version that was introduced. No change to section nine, removing the Veggie sunset. That would allow Veggie to continue accepting applications indefinitely. Section 10, this is the Veggie Enhanced Incentive for Vermont Employee Owned Companies. One change, and that is on page 11 of page 11 of your draft. So this is in the definition of what an employee owned business is, and you had testimony from,

[Sen. David Weeks (Clerk)]: Matt Crawford,

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: I believe this is him.

[Sen. Alison Clarkson (Chair)]: Yeah.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: From the Vermont Employee Ownership Center, and he testified that there could be an issue with certain companies that aren't organized the way that the definition sets forth, these employee owned companies. So I, communicated with him on what he thought would be appropriate,

[Linda Rossi (State Director, Vermont Small Business Development Center)]: and we

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: added a definitional change in addition to what an employee owned business is. So, the previous language let me go back a little bit here to set up the definition. So a corporate cooperative means, on line 12, on page 10, an eligible worker owned cooperative as defined federal law, a worker cooperative organized under Vermont law, or an organization that meets the following criteria. One, employees of the organization constitute a majority of its membership. Two, members of the organization hold a majority of the voting power. Three, members of the organization have the authority to elect a majority of the board of directors on the basis of one person, one vote, thinking that was on the last bill. Right. And this is the addition that in Matt Lutland, lumps in some other organizations that may not meet the previous, with each member's vote being weighted by the number of years a member has served with the organization or similar calculation. My understanding is that some organizations, it's still member voting, but if you've been there five years compared to one year, that member with five year seniority gets more voting power

[Sen. David Weeks (Clerk)]: than the new member with one year Sid Morgan. Got it. And this is specific to electing their board of directors?

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: This is specific to the board of directors, correct?

[Sen. David Weeks (Clerk)]: I'd be interested in precedent on this. This seems a bit of a future.

[Sen. Randy Brock (Vice Chair)]: It does.

[Sen. David Weeks (Clerk)]: It's kind of anti democratic, but anyway, I understand this is useful.

[Sen. Randy Brock (Vice Chair)]: I'd like to know more about it. I'm Franklin of Congress, a provision of reinterpretation.

[Sen. Alison Clarkson (Chair)]: What, with this new provision in I, was this, did this relate to the chroma? Yes. This related to the chroma challenge that he talked about it, which which I didn't fully appreciate. Right. I mean, I didn't fully I didn't fully understand Thomas.

[Sen. Thomas Chittenden (Member)]: I'm one I agree. It's kinda odd to have it be proportionally based on years, but I wonder if there might be more precedent for vesting. So if you're there for three years, then you get a vote. Well, it's Yeah. So I just agree to look at this language part.

[Sen. Randy Brock (Vice Chair)]: I'm I'm waiting for base on years. Just Yeah. But I'm getting comfortable with

[Sen. Alison Clarkson (Chair)]: that part. Think you're exactly right, Thomas. I think that's what they're trying to get at here. It Your impression.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: So I I sent this to Matt, the email, and he thought it would work, but again, this is flexible, and we want to make sure we get this part right. If there is some other way that this can be boarded, if that is accurate, if it captures what you want to capture, then happy to look more at that.

[Sen. Alison Clarkson (Chair)]: I think that it bears some further discussion with people who know what they're trying to cover and appreciate how we actually try to cover it and how many businesses that would actually impact. If it's just the one business, I'm not sure. Google already had a veggie program. I'm not sure how strong I feel about that. But if if there are other companies where people are vested differently because, you know, there are more people who have more skin in the game and maybe employee owned, but some people who've been there longer, some people who were original founders, they all have a different weighted ownership

[Linda Rossi (State Director, Vermont Small Business Development Center)]: in it. I guess sorry if I missed this. Why can't we be silent on it and just say they have the authority to elect the majority of the board of directors?

[Sen. Alison Clarkson (Chair)]: You could do that.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: It seems like it's saying they might have one person, one vote, or this other alternative, but either way, are we okay to just leave the silent, and they can do whatever they want to elect the majority of the board of directors?

[Sen. Thomas Chittenden (Member)]: I would advise, Lois.

[Sen. Alison Clarkson (Chair)]: Yeah.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: I would encourage you to have that back, but my understanding is that there could be a situation where one of these companies, it's it's owned by one person, and that person has it's one person, one vote, it's one person, and it's an employee owned company, that's how that person is structured with the company. And again, this is something that may not happen, but if you don't close that potential loophole, then then you would allow those one person

[Sen. Alison Clarkson (Chair)]: Oh, one person and which is technically an employee owned Right. Company.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: But I I would encourage you to get more testimony.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: So you're so you're saying, like, a self employed person could elect their board of directors and be the board of directors and then be a a employee owned business unless we're bigger about

[Sen. Alison Clarkson (Chair)]: So are are we not clear that an employee owned business is more than 100?

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: It's, again, this is something,

[Sen. Randy Brock (Vice Chair)]: there are two of them, they could do the same thing, it's the same problem with it. And I gotta think that if this is not the first time this has ever been done, it would be interesting to look at some specimens at other companies that say how it's structured.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: And more research, honestly, also you want to pursue this, I would encourage additional research and testimony and

[Sen. Alison Clarkson (Chair)]: Okay, I think we'll have Matt back, and we might actually ask Oliver to testify who is the professor of business law law school. This might be helpful. Oliver's always helpful. And then have Jessica in. I think that would be helpful. Yes.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: An an alternative is, like, are we that bad if if small businesses with that are, like, sole proprietorship source or self employed? Like, what are we gonna try and determine the size of an employee? I I worry that maybe we just Should we size? Should we do the section if we're not we don't have an employee of business defined. Like, we are now a making business defined definition.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: We've all seen what we're defining what that is, and that's why it's part of that definition.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: But there's no other definition in the martial law?

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: There must be. And Vermont law, there may be, but I think the reason it's structured this way is to capture as much as mossification. So you could just say a ESOP. Like, you could just say that.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: That's And we could reference other statute.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: You could reference federal Or you can reference just the Vermont worker cooperative. That's it. But there are different ways to structure these companies. I think the intent here was to capture as much as possible, but then again, you also don't wanna capture potentially the one person. Okay. Given our time frame, we probably have time. Yeah.

[Sen. Alison Clarkson (Chair)]: Oh, well, we have as we all know, very short time is now twelve. I I would suggest that we keep it broader, perhaps, for the senate and let the house take dig into it further unless we can come up with a simpler way to do this. And we so we I'm happy to give Matt a moment to further explain it and have Jessica in to weigh in on it as well. Anybody else have another thought?

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Because we could also just simplify this. This strikes me. This is this is something that's probably been done thousands of times around

[Sen. Randy Brock (Vice Chair)]: the country. I can't imagine that there are precedents somewhere in other cases, other law, about how a structure at this time is created, which will legal research help do that?

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Or just our own statute? Like, if own, if we need to look at our own employee owned business statute to make sure it's solid, we should do that, not invent new law. We've had this conversation before. I just wanna make sure that if we're referencing something, we're clear about any differences we might be making between where it's defined and so.

[Sen. Alison Clarkson (Chair)]: Could we ask you to look at where employee owned businesses? There is a whole thesis that should about their styles.

[Sen. Thomas Chittenden (Member)]: Yeah.

[Sen. Alison Clarkson (Chair)]: Of course. And we will put this back on for discussion next week. And the other question though is, are you able

[Sen. Randy Brock (Vice Chair)]: to find litigations both here in Vermont or elsewhere that addresses or points to us to some issues or problems associated with the kind of definition we're trying to create.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: And just to make sure we're clear, are we looking at how you want to include an incentive, or are we talking a bigger picture here?

[Sen. Alison Clarkson (Chair)]: No, think incentive I mean, I think there's some support for the incentive. I think we wanted to keep it simple as possible and enabling as much as possible.

[Sen. Thomas Chittenden (Member)]: But I- exploit some considerations for this. But

[Linda Rossi (State Director, Vermont Small Business Development Center)]: also to make sure we don't redefine something without knowing why we're doing that.

[Sen. Alison Clarkson (Chair)]: Right. And to just look at our definition here, as it goes, as it works with what we already have in statute.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: The definition of worker cooperative, because we don't in my understanding, we don't have an employee owned business definition. We have

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Oh, that's what I was asking.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: No. That's why I have it defined this way. Slumpy Van thinks that because you can organize it a few different ways, Vermont. You can organize it under federal law as ESOP. Right. You can organize it as a work of law group. So if you wanna include both those types of businesses, what they think you do, then you have to include that under the umbrella of employee owned.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Which is what you've

[Sen. Alison Clarkson (Chair)]: done here.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: But again, happy to double check and make sure that we're rewriting the concept.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Well, also this shouldn't then we would be deciding that this is the only place in statute where the federal definition of an ESOP lives.

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Not the federal, but the only place where we have an umbrella term of employee owned business.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Why aren't we labor applicable?

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Well, have our labor there may be another place where, in our labor laws, where you reference an ESOP or under Title 32 tax I and don't want to say we don't cross reference it, but as far as what an employee owned business is, there's nothing in, certainly, Veggie, where we discuss that, or at the corporate cooperative in Title 11, we don't talk about employee owned business as this umbrella term.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: Couldn't we just say worker cooperatives, though?

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: You could, but you're gonna miss out

[Sen. Alison Clarkson (Chair)]: on these We're going right

[Linda Rossi (State Director, Vermont Small Business Development Center)]: here. So we're gonna miss out on those who didn't seek state designation as a worker cooperative, but sought federal designation as an ESOP?

[Rick Segal (Legislative Counsel, VT Office of Legislative Counsel)]: Right, or who decided either through identity reasons or tax reasons, right? Are probably different reasons to organize a different way. I don't, I can't pretend to know what those Right.

[Linda Rossi (State Director, Vermont Small Business Development Center)]: I I just I I worry about referencing something that cannot other that not knowing why.

[Sen. Alison Clarkson (Chair)]: Okay. So let's find out more about what's in our statute, and let's have Matt weigh in again, and then we'll make a decision. Sure. Because I'd love to keep it as simple as possible, and then we have our partners in the house. We'll have a lot more time to work on this. Thank you. We're gonna go off live, and we