Vermont Legislature SmartTranscripts:

[Sen. Randy Brock (Vice Chair)]: Senator Clarkson is not going to be with us today except visually and oral age, so she's going to be with us 100%, and I'll be chairing this morning's meeting. To begin today, if you take a look at our agenda, the first item that we have on the agenda today is an act regarding genetic data privacy, and that's H639. And today's agenda is largely reviewing new bills that we're going to be looking at as we're going forward. So we will talk first with the the introducer of the bill in this case, his representative Olsen from Bristol, Lincoln, Moncton, and Starkville, and I used to live just south of you in Ripton. Yeah. There we go.

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: Where do you want me

[Sen. Randy Brock (Vice Chair)]: to don't you sit up?

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: I don't want to turn my back to the senator. Believe me, she's looking at you. Oh, okay. She

[Sen. Randy Brock (Vice Chair)]: looks at everything.

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: Yes, all seeing. All seeing. All seeing.

[Sen. Randy Brock (Vice Chair)]: So why don't you start off by just introducing you Yes.

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: What people are. My name is representative Burr Altsund. I do represent the towns hill towns of Bristol, Lincoln, Starkville, and Moncton, high up in the hills, just under the Green Mountains. And I'm not the introducer, but I am the reporter of the bill. Okay. The introducer, the primary sponsor of the bill was Representative Chittenden, but the committee took great interest in the bill. It's part of a continuing effort, I think, of the committee to focus on issues of privacy for Vermonters, and this is of particular interest because we felt, and I think a lot of Vermonters feel that not only is privacy, the privacy of their personal information really, really important, but genetic data, know, that goes to the core of who we are, right? So this is particularly important. Do we think we put together a pretty good bill? Sure, you can make improvements if you want, but we're happy with what we did and we think that this would appeal, which is an act that would be a real, real strong concern for protection. I'll focus maybe on some of the core features of the bill.

[Sen. Randy Brock (Vice Chair)]: Sure, if you could give us the overview. Obviously, we have let's call it someone here, sort of go over the bill in detail with us after

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: And that's why I figured, you know, I just hit some of the high points. I think the core of the bill is its consent provisions, and the nature of that consent, and it touches on, I think, really some of the key things that Vermonters are concerned about, how the data's gonna be, genetic data's gonna be used, who will have access to that data, how it's gonna be shared, and for what purpose the data is gonna be used. Anything beyond the purpose, people sign up for, to get genetic testing, they have a particular purpose in mind. But then that data can be stored and potentially used for other purposes. So in consent provisions, the consumer would have the ability, actually not just the ability, the company must allow the consumer to opt in in order to do do these particular functions. I think it's a very different kind of structure than what we usually see, you know, the 100 page document. Come on, blood eye. You know, and you're trying, number one, you're trying to read it. Number two, know, call up your lawyer and say what it means. And then sort of globally, yeah, I can set that up. This has a different structure. It itemizes the particular items that are important in terms of genetic privacy, use, storage, transfer purposes, all that sort of stuff, and it says that the consumer must opt in to each specific area, which is a much stronger kind of construct than if you just globally, you know, put the bottom the page, oh, I can send out a little bit. So that, I think that's really, you know, kind of the core feature. Oh, also, the bill also provides that consumer can revoke their consent once given. And that method of doing that should be, you know, it's easy to do the mechanism of how you revoke consent should be sort of on par with how you gave consent. The beginning of it had some provisions about security measures. This whole issue came alive in the national consciousness, I think, when one of the data, one of the genetic testing companies had their data breach. So, you know, it's obvious way to think about, well, let's make sure you have reasonable protections around the detective, not that you can guarantee these days anything like that, but, you know, put in place some some reasonable protections for for security. So sort of side like kind of things can't be used for insurance company information or employers. They have their own conscience. Insurance companies, the one that I'm familiar with, where they have regulations that constrain what they can do, what they can ask their policy managers to do. And so, you know, I'm comfortable with that, but the, so we're talking about data, the genetic testing company itself, and it says you can't do that. That has

[Sen. Randy Brock (Vice Chair)]: to be on our consumer to insurance company basis. That, or is there an absolute prohibition for insurance companies to use that data, or is it just simply not a requirement?

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: It's prohibition on the genetic testing company getting that information in the insurance company. They could get the same sort of information, but they need to have that specific relationship and agreement pursuant to state and federal regulations. It also doesn't deal with medical kinds of issues. If your doctor needs some testing around this area in order for diagnosis, treatment, whatever, that's, this bill doesn't apply to that. Just in terms of generally the framework, the regulatory framework, it's made part of, I think it's entitled lobbying, and so it's part of the general rubric of consumer protection issues in terms of, basically, attorney general is responsible for that. They can create the rules, enforce the provisions, and stuff like that. And it also allows the conservatives to dip in there too, something that's pretty useful. Does any other state have legislation like this that you're aware of? Other states have similar legislation. I don't have a list. I think Rick can probably help you out. Colorado comes to mind. California comes to mind. Really, not too many, and again, I think one of the reasons for that is the headlines came about when the data in the genetic testing company was breached, I think it was 2023. I think it's, Tyler, to answer your question, there are great, great confineers, I think, of which states it's at.

[Sen. Randy Brock (Vice Chair)]: Madam Smitty, any questions for the rep service?

[Sen. Thomas Chittenden (Member)]: I want to apologize, Representative Wilson. I have to leave in a moment to go present a bill upstairs with House committees.

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: There's a lot of bills

[Cameron Wood (Office of Legislative Counsel)]: flying out. Yeah, indeed.

[Sen. Thomas Chittenden (Member)]: Thanks for your hesitation.

[Sen. Randy Brock (Vice Chair)]: Again, thank you very much for coming in Yes.

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: And giving us the overview. I'm always pleased to come into this. And it's alright. Good. Good. I I did my mister Smith goes to Washington in between just before the election that the session before I was elected. And this was always a very gracious, truly listening committee. That's just a, you know, ordinary woodchuck up at the heels coming down and talking to, but I got a sound. So very welcoming, so I appreciate it.

[Sen. Alison Clarkson (Chair)]: Randy, may I ask a question? You. Herb, thank you so much. It's great to have you in our committee. I guess I'd just like to ask this sort of elephant in the room question, which is we've noticed such strong lobbying efforts on all our data privacy bills. What was the most challenging opposition to this bill?

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: Geez, I can't pick, in terms of the committee members, it was a tenone vote. Okay. It was really pretty much well received. That being said, the genetic testing I keep mixing up bills sometimes the genetic testing companies were looking for a provision that would allow them an opportunity to have a cure period. I think they were focused, to be fair, think they were focused on what they thought might be technical issues that they should be allowed the opportunity to cure before some sort of enforcement action was taken. What we, the committee as a whole, was convinced was that there's really, there's not much that's technical. Even the things that might deal with notice issues or whatever, well notice is pretty important in order to give concern, in order to allow consumers to understand what their rights are in terms of opting out, the opting out, it's, opting in, excuse me, is the main provision. That's where we came around. The attorney general was, I thought you should probably hear from them more particularly about why or not, I'm sorry, that period of time wouldn't be helpful. The other issue that came up, I think maybe some people misunderstood the relationship between bill and insurance companies. And so you might want to ask some people about that as well. I think we misinformed as to actually what was in the bill, because it really does, I believe, like I said, allow folks to do their job, just separate from this whole genetic testing data collection.

[Sen. Randy Brock (Vice Chair)]: Great, sure. Well, again, thank you very, very much for coming in. Thank you. We'll see you take

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: care Have a good day. And a lot more.

[Sen. Randy Brock (Vice Chair)]: You. Bye now.

[Sen. David Weeks (Clerk)]: Great. You're welcome to Tom and are playing tag team.

[Sen. Randy Brock (Vice Chair)]: I understand that you're gonna be out at what, 10:30 or there, 09:30 Right? Or Yeah. Hoping he'll be back by then.

[Rep. Emily Duncan (House Commerce)]: I can also throw a lot of advice that are on sale.

[Committee staff (name not stated)]: I'm sorry? I can also try to bring the presenter on

[Rep. Emily Duncan (House Commerce)]: the sale, but we do have to leave.

[Sen. Randy Brock (Vice Chair)]: Yeah, and when he does leave, we do need the four of them. Allison, you're gonna be here for the entire morning, are you?

[Sen. Alison Clarkson (Chair)]: Yeah. Absolutely. We're we're on until eleven. Yep. And do we have a quorum now?

[Sen. Randy Brock (Vice Chair)]: We have a quorum now with you.

[Sen. Alison Clarkson (Chair)]: Oh, right. I keep forgetting I'm

[Sen. Randy Brock (Vice Chair)]: here. Right. That's why I asked. Okay, good. We're ready to go, right?

[Rick Olson (Office of Legislative Counsel)]: Good morning. Morning, Cycle with the Office of the Legislative Council. You all can still, by the way, you don't have to have quorum to continue. You just can't take action without a quorum. You know,

[Sen. Randy Brock (Vice Chair)]: I'd like to have a quorum because it's a good A minority of this committee could do very dangerous things.

[Rick Olson (Office of Legislative Counsel)]: Well, I

[Sen. Randy Brock (Vice Chair)]: think it's a quorum to actually

[Rick Olson (Office of Legislative Counsel)]: take action. Actually, this is my minority. Mean, I just want to clarify, you are

[John Gray (Office of Legislative Counsel)]: welcome to continue. You don't have to

[Rick Olson (Office of Legislative Counsel)]: stop recording if you don't have a quorum. Thank you.

[Sen. Alison Clarkson (Chair)]: That's a good reminder, you know, we always think we can't do anything without

[Sen. Randy Brock (Vice Chair)]: the quorums.

[Sen. Alison Clarkson (Chair)]: That's a good point.

[Sen. Randy Brock (Vice Chair)]: We always like to have one number. Understood, understood.

[Rick Olson (Office of Legislative Counsel)]: Okay, I know time is tight, so I just want you to go offline just because you have two. Well, we have a reasonable amount of time to go through the bill,

[Sen. Randy Brock (Vice Chair)]: and as I understand, there are some complexities with the bill, so we want to try and have a reasonably good understanding of it by the time we finish this morning.

[Rick Olson (Office of Legislative Counsel)]: Senator Clarkson, do want me to share my screen so you can see the bill?

[Sen. Alison Clarkson (Chair)]: Actually, I'm happy to just listen to you.

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

[Sen. Alison Clarkson (Chair)]: Because it's never big enough for me to be able to see it in the first place, and I can pull it up, so I'm Yeah,

[Sen. Randy Brock (Vice Chair)]: I would prefer if you would do the screen, because that way, we're talking about we're all looking at the same thing that we make sure.

[Sen. Alison Clarkson (Chair)]: And our online audience also, it's very helpful for them. So, good point, Randy.

[Rick Olson (Office of Legislative Counsel)]: I will share my screen. So first, I'll give you Ripples, and I think they did a good job of explaining the high level, what the bill does, what the committee heard, and some of the issues that came out. So this is a consumer protection bill. It's very narrow in scope. So what this bill does, it regulates these so called direct to consumer genetic testing companies. There are some named brands you've probably heard of, Ancestry23andMe, the companies that you pay, the consumer pays for the service. You submit to them a saliva sample in the mail and you pay whatever the fee is, and they come back with either that ancestry information or genetic information, and it's kind of a and you can pay a monthly subscription if you want to have updates. Someone else submits their sample, different part of the world, they're related to you, you may get a notification like, Hey, so and so is related to you. So that's what this bill, those kind of companies. And also their service providers. So if a genetic testing company has another company works with to either analyze the genetic data or something with a storage, that would be a service provider they're also regulated. Okay, so this bill is also gonna be known as, if it were to pass as written, the Genetic Information Privacy Act. The question came up, how many states have this type of bill? Several. I don't think it's quite half of the country, but this bill is largely based on California's version of the bill which was passed a couple years ago. Some other states had 36 bills. So, it's it is a wrong type of legislation. So, I'm not gonna read word for word, but I'm gonna highlight certain definitions to start off with that I think are important to the bill. So number two on page one, biological sample means any material part of the human discharged therefrom or derivative thereof, such as tissue, blood, urine, saliva, known to contain deoxyribonucleic acid, DNA, is what I would call it from now on. Biometric data is data generated from the technological processing of a consumer's unique biological, physical, or physiological characteristics that allow or confirm the unique identification of the consumer, including their iris or retina scans, fingerprints, facial or hand mapping, geometry or templates, paint patterns, voice prints or vocal biomarkers, and dates or other personally identifying physical movement or patterns. It does not include a digital or physical photograph, an audio or video recording, or any data generated from any of those items. This is pretty much how the other privacy goals define biometric data, so nothing surprising about that definition.

[Sen. Randy Brock (Vice Chair)]: A consumer

[Rick Olson (Office of Legislative Counsel)]: is an individual who resides in Vermont. A dark pattern is a user interface designed or manipulated with the substantial effect of subverting or impairing user autonomy, decision making, or tools. Okay, number six, this is an important definition. This is how the bill defines what a direct to consumer genetic testing company is. It's one of the major is regulated in the bill. It means an entity that, A, sells, markets, interprets, or otherwise offers consumer initiated genetic testing products or services directed to consumers. That's gonna be your main kind of coverage here, those companies that do those things. Analyzes genetic data obtained from a consumer, except to the extent that the analysis is performed by a person licensed in the human arts, which is doctors, dentists, people that are licensed medical professionals, or collects, uses, maintains, or discloses genetic data that is collected or derived from a direct consumer genetic testing product or service, or directly provided by consumers. So if a company meets one of those three agencies, they would be determined a genetic direct to consumer genetic testing company. Skipping to Express Consent, this is the opt in that Rick Olson kept referring to. It needs the consumer's affirmative authorization to grant permission in response to a clear, meaningful, and prominent notice regarding the collection, use, maintenance, or disclosure of genetic data for a specific purpose. Expressed consent cannot be inferred from an action. Agreement obtained through the use of dark patterns does not constitute express consent, So you can't trick a consumer, basically, into a grain of terms. It must be very, again, clear, meaningful, and prominent, and you ask for the consent. Okay, genetic data. This is the type of information to be protected in the building. It means any data, regardless of its format, that results from the analysis of a biological sample, remember saliva, tissue, flood, or from another element enabling equivalent information to be obtained and concerns genetic material. This includes DNA, ribonucleic acids, RNA, genes, chromosomes, I forget every time alleles, how that word's pronounced, genomes, alterations or modifications to DNA or RNA, single nucleotide polymorphisms, SNPs, uninterpreted data that results from the analysis of the sample, and any information extrapolated, derived, or inferred there properly. It does not include de identified It means, and that means, that it cannot be used to infer information about, or otherwise be linked to, a particular individual, provided the business possesses the information, takes reasonable measures to ensure that the information cannot be associated with the consumer or not.

[Sen. Alison Clarkson (Chair)]: Rick, can I just ask a question there?

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

[Sen. Alison Clarkson (Chair)]: Thanks. De identified data. Does the bill require that you give consent that if the data is de identified, you're happy to share it, or you're willing to share it?

[Rick Olson (Office of Legislative Counsel)]: Well, so kind of indirectly, because if the genetic data is de identified, then it doesn't kind of fall into the definition of protected genetic data, if that makes sense.

[Sen. Alison Clarkson (Chair)]: Okay, so it doesn't, you don't explicitly have to say I'm okay with it if it's de identified. I'm not saying if it's being shared, like for big studies and stuff.

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

[Sen. Alison Clarkson (Chair)]: I can see many people wanting to have their data shared in that way to help advance medicine and advance research. So, I mean, I think people want to be helpful with their data, but just not identified by their data.

[Rick Olson (Office of Legislative Counsel)]: Yeah, and so most privacy bills have this aspect that companies that have your data, if they de identify it, and there's methods to do this. Once they de identify it in a proper way, that means the data is anonymous, and at that point, the argument is that the consumer no longer has a reading to require privacy because that data is no longer associated with them.

[Sen. Randy Brock (Vice Chair)]: Is there anything specific in the bill that addresses that and clarifies that so we're that reading to know that?

[Rick Olson (Office of Legislative Counsel)]: I think that we're looking at the definition of what de identified data is, and it means data that cannot be used to infer information about or be linked to a person. You know, we can certainly if you are curious about that, I think testimony from a privacy expert to kinda discuss how that works would be helpful.

[Sen. Randy Brock (Vice Chair)]: Yeah, would be helpful, also helpful to know how other states deal with that, if they do anything different than what it's supposed to do.

[Rick Olson (Office of Legislative Counsel)]: Yeah, most, so I will say most privacy bills, not just genetic, have this component, where a company does de identify it, then the consumer no longer really has to worry about that because now, you see here also the company must maintain a de identified, they cannot re identify it. Maybe if I continue, it'll make more sense here. So I, takes reasonable, this is the company that has the data, they take reasonable measures to ensure that the information cannot be associated with a consumer or household as a de identified data. Public commits to maintain and use the information only in de identified form and not attempt to re identify the information, except the business may periodically attempt to re identify solely for the purpose of determining whether its de identification process satisfies the requirements in the bill, on the express condition that the business does not use or disclose any information re identified in this process and destroys that re identified information. And three, still de identified, contractually obligates any recipients of the information to take reasonable measures to ensure the information cannot be associated with the consumer or household and to commit to maintaining and using the information only in de identified form and not to re identified information. I think it's pretty clear, but again, maybe a privacy expert can tell you if they can be improved or genetic data does not include data or a biological sample to the extent that it is collected, used and maintained, disclosed. These are all basically research exemptions. If the data is used for scientific research through the U. S. Government Association, it's gonna be exempted. These are not consumer profit companies. These are usually universities or government associated entities that are doing research on genetic data, the consumer's not buying the service, they are doing the service either on a volunteer basis, or they are willingly giving their data to a research company for research into human medical issues. That's what I, to I, are doing. We don't consider that to be genetic data. Genetic testing means any laboratory test of a biological sample from a consumer for the purpose of determining information concerning genetic material contained within the biological sample or any information extrapolated derived or inferred from. Okay, this bill, me, before I define it, publicly available information, the bill at the very end says it does not affect publicly available information. That's the only time it's used. So what that means is if a certain piece of information is publicly available, that does not fall into the scope of what is considered protected from the consumer. It's not really gonna be a huge concern because most people don't make their genetic data publicly available. Maybe some people do, maybe some people share it on the internet. So it means information that is made available through federal, state, or local government records, or to the general public from quietly distributed to Vietnam. So yeah, if you publish your genetic information online, you no longer have a privacy because you've never left out. However, it does not include biometric data collected by a business about a consumer. Information that is collated and combined to create a consumer profile, information that is made available for sale, and inference that is generated from those previous two categories, any obscene visual depiction, personal data that is created through the combination of personal data with publicly available information, Genetic data, unless otherwise made publicly available to a consumer. Information provided by a consumer or on a website or online service for free or for a fee, where the consumer has maintained a reasonable expectation of privacy in the information, such as by restricting the information to a specific audience. So that's one maybe exception here. If you publish your genetic information on a Facebook page, are you restricting that to certain people who are your friends? Are you making it just a publicly a public post on Instagram or Facebook? So that's one way that exception is narrowed. Or intimate images, authentic or computer generated, known to be nonsensual.

[Sen. Randy Brock (Vice Chair)]: This issue of the consumers maintaining a reasonable expectation of privacy by restricting information to a specific audience, If you were to think about that, at least based on what you see in this bill, if someone posted it on Facebook and said, I only want my friends to look at it, as opposed to putting some other technical barriers, would the former act at all or would it There must be some sort of barrier, and if so, what could that look like?

[Rick Olson (Office of Legislative Counsel)]: Well, I look at the term reasonable expectation of privacy. Would a reasonable person doing that expect that information to stay within their close proof

[John Gray (Office of Legislative Counsel)]: of rent? Yes.

[Rick Olson (Office of Legislative Counsel)]: It would be a

[Sen. Thomas Chittenden (Member)]: case by case judgment by court. Literally sharing. You're sharing with friends, but once you share with friends, you're not putting any stipulations of it.

[Sen. Randy Brock (Vice Chair)]: And if you're sharing it with the public, by putting it on an open Facebook page without doing something to say there's a reasonable expectation of privacy, trying to understand what that would look like. You do it on a private webpage, if you restrict the number of people who can look at your webpage or your Facebook page, and sure, well, that is possible.

[Rick Olson (Office of Legislative Counsel)]: Would be an interesting case. Okay, then we have service provider. This is the other group that is regulated specifically in the bill. It is basically any type of entity that is involved in the collection, transportation, or analysis of a consumer's biologic sample or extracted genetic material that is on behalf of a direct to consumer genetic testing company on behalf of any other company that collects, uses, maintains, or discloses genetic data that is collected or derived from a direct to consumer genetic testing company, product or service, or that is directly provided by a consumer. So they're not quite a third party. There are third parties that are involved, but typically this is a company that has a contract with the direct consumer company that does some type of specific service on behalf of the direct consumer genetic testing. Okay. Now we're on to the requirements of the bill. So first of all, privacy. Basically, that a company shall provide clear and a direct consumer, excuse me, that the company shall provide clear and complete information regarding the company's policies and procedures for the collection, use, maintenance, and disclosure of genetic data. We shall include a summary of its privacy practices that includes information about a company's collection, use, maintenance, and disclosure of genetic data, a prominent and easily accessible privacy notice that includes complete information about the company's data collection, etcetera, And a notice that consumers de identify genetic or phenotypic information may be shared with or disclosed to third parties for research, because this is the human research protection that certain, usually, universities get when they do research. Okay, number two is a key part of the bill. This is the opt in portion. So a genetic testing company shall obtain a consumer's expressed consent for the collection, use, and disclosure of the consumer's genetic data, including at minimum, separate and express consent for each of the following. The use of the genetic data collected through the genetic testing product or service offered to the consumer, including who has access to the data, how it may be shared, and the specific purposes for which the data will

[Sen. Randy Brock (Vice Chair)]: be collected and used to disclose.

[Rick Olson (Office of Legislative Counsel)]: Consent for the storage of the consumer's biological sample after the initial testing request of the consumer has been fulfilled. So once you do your test, you submit this saliva sample, that's usually what they accept. Of course, they're going to store it during the short term to provide that service, but once they send you back the results, they would need your consent to keep that same book in their laboratory, keep that sample somewhere else that they have sufficient. Each use of genetic data or the biological sample beyond the primary purpose of that service. Each transfer or disclosure of the consumer's genetic data or sample to a third party other than the service provider, including the name of the third party to which the consumer's genetic data or sample will be transferred and the intended purpose of transfer, except that the company shall not require a consent in order to receive the services ordered from the company. So if you order genetic testing, am I going develop Alzheimer's? And you submit that, obviously you were providing consent for that specific purpose to conduct that test, to send it to a third party, a PB, but then once that service is over, then they would consent to store it, to transfer it somewhere else, and etcetera. Finally, consent for the marketing or facilitation of marketing to consumer based on the consumer's genetic data or the marketing or facilitation of marketing by a third party based upon the consumer having ordered, purchased, received, or used a genetic testing product or service. B, there's an exception here. So what I just read does not require a direct to consumer company, genetic testing company, to obtain a consumer's consent to market to the consumer on their own website or app. So if you buy from company X, the service, company X is able to market to you on their own website. Or their mobile application, however they use their service. If the content of that does not depend on any information specific to that consumer. Nothing in the subdivision alters, limits, or negates requirements of any other anti discrimination law or targeted advertising. Any ad of a third party product or service that is on the genetics as a company's website or app shall be prominently labeled as advertising content and be accompanied by the name of any third party that has contributed to the placement of the ad. If applicable, the ad should also clearly indicate that the advertised product or service have not been verified or endorsed by the company. So that's the consent piece. Those things that I read, those are the specific times where a genetic testing company will need the express consent of the consumer. The consumer can also revoke consent if they gave it. This is subsection C. A direct consumer genetic testing company shall provide effective mechanisms for a consumer to withdraw consent. That is at least as easy as the mechanism by which the consumer provided consent, and is one of which utilized the primary medium through which the company communicates with consumers, so either email

[Sen. Thomas Chittenden (Member)]: or Sorry to interrupt you. I just want Trying to catch his attention to being a cut you off. Oh, yeah. So I always worry when there's a patchwork of regulatory functions. So can you tell me that and

[Rick Olson (Office of Legislative Counsel)]: if you said this before

[Sen. Thomas Chittenden (Member)]: I entered the room, I'd love to just go back and watch the tape. But is this inspired by any sort of model legislation that you've seen elsewhere, is this from, what is it, old cloth, so discordant?

[Rick Olson (Office of Legislative Counsel)]: So this largely based on California's very similar bill. Several states have enacted this type, but it's not a majority yet, but more and more states are looking into this mostly because of the threat. I think the news story was 23andMe that was they turned bankruptcy, and there weren't any state laws, or federal law, that protected consumers' privacy in that type of transfer of assets. So the fear was if this happens to a smaller company or another company, and I believe 23andMe actually handled it the correct way as far as consumer privacy is concerned, but not because it's stable. They just did it because their own policy was followed. However, this bill would be meant to prevent another company from selling its assets or a data breach. Right? So that that ensured a.

[Sen. Randy Brock (Vice Chair)]: Is there any legislation that is pending or at least being discussed with federal government or where it's? It's a

[Rick Olson (Office of Legislative Counsel)]: good question. There there is always some type of privacy legislation that's been introduced in congress, but to my knowledge where, it's not a topic of debate.

[Sen. Thomas Chittenden (Member)]: They've bigger partners right now.

[Sen. Alison Clarkson (Chair)]: Yeah, Randy, if I may, just to I think Thomas, Rick said this was based on California, but that almost half of the states have enacted some form of genetic privacy.

[Sen. Thomas Chittenden (Member)]: Okay. Is this similar to California or is California outlier in this case as they so many times harder?

[Rick Olson (Office of Legislative Counsel)]: This is pretty consumer friendly, as far as the the terms of the bill. So I I know I I acknowledge in every bill that does this, but California was more consumer friendly from this aspect.

[Sen. Randy Brock (Vice Chair)]: One of the issues, though, of this multi state issue is a company that does business in multiple states may be subject to consumer protection laws, including privacy laws, of each of the states in which they do. How, as a practical matter, do you reconcile the requirement of a company to be subject to 50 states and whatever federal laws, as well as a variety of other laws for each type of privacy that we deal with, each of which seems to be dealt with slightly differently by almost each state, you need a 33 volume document attached to it for people to understand the privacy is. Has anybody dealt with that issue?

[Rick Olson (Office of Legislative Counsel)]: I assume you'll hear from these companies that are their view. I agree with you that from a lawyer's perspective, if I work for this company, this is a headache because you have to figure out, you know, twenty, thirty different bills that are similar, but not exactly the same, but this is kind of the way it's being done, without Congress acting. Each day covers what they can.

[Sen. Randy Brock (Vice Chair)]: The issue that I think about when we look at this type of villa, this is not the first one of these that we've seen in which Vermont has its own law, who enforces this and how do you do it? What kind of mechanism do you have to do that other than private rights of action which have their own problems? Right.

[Rick Olson (Office of Legislative Counsel)]: Well, so the attorney general has enforcement and they support the bill, and you'll hear from them, assume. How many

[Sen. Randy Brock (Vice Chair)]: people will they need to add to the enforcement mechanism?

[Rick Olson (Office of Legislative Counsel)]: Well, have a pretty, they have consumer protection over there. Don't, that's it. It's just a fair question.

[Sen. Thomas Chittenden (Member)]: Relatedly, I think this is to the bill, Who would apply? Would it be a Vermonter that inquires or opens the account from within Vermont that has a Vermont residence? What where is the jurisdictional authority on when these rules would apply? How do you qualify as a Vermonter or somebody that would follow Vermont's state standard?

[Rick Olson (Office of Legislative Counsel)]: So consumer is a Vermonterist, know, address basically.

[Sen. Thomas Chittenden (Member)]: So if you live in another state, have this genetic material over there, but then move to Vermont, then it's now protected because they're a Vermont resident and this applies?

[Rick Olson (Office of Legislative Counsel)]: So it's whenever the cause of action arises. So if you buy the service in New Hampshire and you move to Vermont and that's where the data issue arises where either there's a breach or there's some type of violation by the company at that point are you in Vermont, you in New York, are you in

[Sen. Thomas Chittenden (Member)]: So these companies will have to track residency to conform to the different state rules when they're a consumer.

[Rick Olson (Office of Legislative Counsel)]: So when you buy so if you're in a different state, let's say you're in a state that does not have this, like Vermont right now, and you buy the service and you agree to the terms that they're there, you would agree to the terms that are Okay. Of Vermont. However, if Vermont now passes this law and it's September 2026 and it's now in effect, if there is a violation that occurs to that, for example, let's say, we haven't gotten everything here, but let's say there's an issue with their storage, and there's some type of transfer without alerting it, At that point, they would be in violation because you're a Vermont resident, you're now in a state that has a law that protects consumers. The argument from the company would be, well, we can bother property. We're not protected by the Vermont law. So that might get a little messy, but I think the courts were able to figure out the cause of action arose after the law was in place. So therefore, there is a politician.

[Sen. Randy Brock (Vice Chair)]: Well, if the company is based in Maryland, let's say, and you're here in Vermont, the company create some sort of disclaimer that said, regardless of where you are in the world, this agreement will be construed under the law, reviewed under the laws and said it thoroughly.

[Rick Olson (Office of Legislative Counsel)]: So they'll have their own policy, Well, they'll have, if you sign up with the company X, you will agree probably to all these terms, arbitration, these different things you agree to. And then this bill does not that. The companies can this bill does not affect that. They can still have you sign these policies as far as your rights when you become a good customer of company. However, specific things like your privacy would be even if the policy differed, this law would take effect over the policy. So if it said, you waive your right to sue, or you waive your right to this law, they couldn't do that. That makes sense.

[Sen. Randy Brock (Vice Chair)]: So the company would operate itself at Ameren's resolve.

[Rick Olson (Office of Legislative Counsel)]: Right, but they would still themselves in Vermont, and they would be in Vermont subject to loss. Just like how most corporations are in Delaware, right, for various reasons. However, when you operate in Vermont, even over the internet, you were doing business in Vermont. So you should actually be a foreign entity. You should have registered with the Secretary of State. You should have an agent that can be served in a lawsuit. Pretty typical. Just

[Sen. Thomas Chittenden (Member)]: to beat this to force a little bit. It's a terrible question. If you're a Vermonter, you open this account, you're protected by these things and you move somewhere else which doesn't have these protections. Then there's that that's where it also gets messy as well. That's where the patchwork gets really problematic. Wish we had

[Rick Olson (Office of Legislative Counsel)]: a more functional federal government to apply some. And when we face the things

[Sen. Randy Brock (Vice Chair)]: like Franklin, think of many of the things that are-

[Sen. Alison Clarkson (Chair)]: When we take this up, we can certainly address that more fully.

[Sen. Randy Brock (Vice Chair)]: Outstanding. This point, when we're taking it off, what's in the bill and what does it do and what does it do for us to build that? I think that's what we're trying to do, not necessarily adjudicate the rules.

[Sen. Alison Clarkson (Chair)]: We're just walking through it today, but I think these are great questions for us to identify that we want to further, because once you've signed us, a good question to go to Thomas' concern, is, in whatever jurisdiction you sign it, does that then hold for the rest of the life of your data with that company? So those are all good questions for us to, I think, explore when we take the bill up. We're just walking through it, I think,

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: at the moment.

[Rick Olson (Office of Legislative Counsel)]: I think I have a good analysis on Virginia. So let's say you buy a car, buy a Honda Yep. And then you drive it, you move to Florida. Yep. So you bought the car here. Yep. That that's where the transaction occurred. Let's say the car has some type of issue in Florida and then explodes. Something something hold on. It's about it. Hold So would you sue Honda in Vermont or in Florida? Honda's an African company. They operate in every state. Yeah. So you'd sue them in Florida, right, because that's where the that's where the incident happens. It's these types of laws are different because they're so intangible, right? Your genetic data, even though there's obviously there's a sample involved, the data is just electronic, it's not as tangible as your car or yourself getting injured because of the product. So this is kind of product liability where you are, the product falls to consumer. And so if you buy it here, you go to Florida, the injury occurs or the violation occurs in Florida, then you would likely file a lawsuit against Florida as a Florida resident.

[Sen. Thomas Chittenden (Member)]: I just think that I appreciate that. I just see that the difference though is we're asking these companies to maintain active stewardship on data depending on the residency of the consumer involved and that just seems like an impossible task.

[Rick Olson (Office of Legislative Counsel)]: I wouldn't say possible but you know, it it it is a argument on the side of these companies that say we cannot run a company with 50 different laws that affect us in

[Sen. David Weeks (Clerk)]: place. That's the reality. Said it. There aren't many other states that have a law like this. Perhaps during test maybe.

[Rick Olson (Office of Legislative Counsel)]: Yep. See how those laws

[Sen. Randy Brock (Vice Chair)]: are forcing out in terms of prosecution. Okay. So, please go ahead.

[Rick Olson (Office of Legislative Counsel)]: Yeah and hopefully, it should be a rare thing, right? Yep. This time of law is not something that you would hope is is litigated every week in Vermont. You hope it's like rarely ever used but it's there presumably though in case something were to happen. Okay. So beyond, we're on the revoking consent. If the consumer revokes consent, the company shall honor that revocation within thirty days of the consent. So if you consent to your DNA to be stored after the service is done, you could revoke that consent, and they would have to destroy it within thirty days of their request. If the revocation here's I spoke too soon. If the revocations will live in storage, they shall destroy the consumer sample not live in thirty days. Okay, data security and access. A direct to consumer genetic testing company shall implement and maintain reasonable security procedures and practices to protect a consumer's genetic data against unauthorized access to drug use modification disclosure, develop procedures and practices to enable a consumer to easily access their data, delete their account and their data except for when that data is required to be retained by the company to comply with applicable legal and regulatory requirements, and request to have their biological samples distributed. A direct consumer test testing company shall, on a request from a consumer to delete their data or destroy their sample, notify any third party, including service providers, that have received that data to also delete it. So if you you are working with company x, you don't know who company x works with, their third party service purpose. So because you don't know, when you request from company x, hey, delete my stuff, company x is responsible to tell their third party's customer X says we have to delete their citizenship.

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: That makes them

[Rick Olson (Office of Legislative Counsel)]: speak. Thirty days after the divorce. Genetic data and biological samples of consumers shall not stored within the territorial boundaries of a country currently sanctioned in any way by the US Office of Foreign Assets Control or designated as a foreign adversary. This is a list, exhaustive list of countries. I think Iran, Cuba, and Venezuela. These are countries that have been designated as a foreign adversary

[Sen. Randy Brock (Vice Chair)]: in federal and federal law.

[Rick Olson (Office of Legislative Counsel)]: Three, genetic data or biometric data of consumers shall only be transferred or stored outside The US with the expressed consent of the consumer. So those are different. You can never store them in these really countries that we deem to be foreign average citizens. However, you can store them in Canada, Mexico upon expressed consent of the consumer. And presumably, that would be included in whatever document the consumer signs, giving the authorization to go ahead. As long as it's, you know, the consumer can tell what your brain is. Remember how we define express consent, it's very specific, right? The consumer must be, you know Okay, contracts. A contract between a direct consumer geneticist company and a service provider shall prohibit the service provider from retaining, using, or disclosing the sample, genetic data, or any information regarding the identity of the consumer, including whether that consumer has exited or received genetic testing b) and associating or combining the biological sample, data, or any information, etcetera, etcetera, with information the service provider has received from or on behalf of the person or persons or has collected from its own interaction with consumers or as required by law. Upon the termination of a contract between a consumer testing company and a service provider, the service provider shall immediately destroy all genetic data that they retain during that period of contract and not disclose transfers or sell genetic data to a third party before it sells that genetic data. So if a company X works with company Y to handle these testing services and their contract terminates company Y, third party company has to destroy everything because they're no longer, they no longer have a contract, and they would not be subject to the bill, the bill's regulations. Discrimination. A person or public entity, government, shall not discriminate against a consumer because the consumer exercised any of the consumer's rights under the subcapture by denying goods, services, or benefits to the consumer charging different prices or rates for goods and services, including the use of discounts or other incentives, imposing penalties. Provide a different level of quality of goods, services, or benefits to the consumer, suggesting the consumer will receive a different price or rate for goods, services, or benefits for a different level or quality of goods, services, or benefits, and considering the consumer's exercise of rights under the subchapter as a basis for suspicion of criminal long viewing or unlawful conduct. Mr. Breach?

[Sen. David Weeks (Clerk)]: So just out of curiosity, because I assume you followed this bill through your house. So this one about discounts, incentives, such, where does that come from and why is it germane to to adapt to this bill?

[Rick Olson (Office of Legislative Counsel)]: So this, that specific one came up in commerce about, I think there was some confusion on what this means. So the, what this section, the discrimination section is meant to do is that the consumer says, delete my stuff. I don't want you to have my data. I don't want you to have my sample, whatever. That that company where the consumer exercised their rights should not charge a different price because that consumer did that, exercised their rights to have it deleted. Nondisclosure and warrant requirement. So notwithstanding any other provision in this section, a direct consumer genetic company shall not disclose a consumer's genetic data to any entity that is responsible for administering or making decisions regarding health insurance, life insurance, long term care insurance, disability insurance or employment, or to any entity that provides advice to an entity that is responsible for performing those functions.

[Sen. David Weeks (Clerk)]: Paragraph one assumes that this genetic data being provided is not provided for the express reason of health care, long term care, or disability insurance, etcetera. How do we make sure there's not a friction between what, how this data is actually intended to be used in that scenario versus the generic, oh, you know, what's my ancestry kind of

[Rick Olson (Office of Legislative Counsel)]: information. So is the question

[Sen. David Weeks (Clerk)]: that's expressly given for issues related to health care, related to health insurance, Paragraph one seems to be you know, I understand the intent of paragraph one, but maybe counter to some applications or genetic data that the consumer intends to be used for as opposed to being So protected

[Rick Olson (Office of Legislative Counsel)]: if the consumer wants to disclose that, if they have the testing done through one of these for profit companies and they want to submit that test result or information to one of these entities they can. It would just be the direct consumer testing company that would not be able to do. So it doesn't stop the consumer from doing that on their own, but the company can't do it on the consumers behalf.

[Sen. David Weeks (Clerk)]: Give it to the lady hospital or healthcare, somebody that actually needs the data for that client's healthcare decision?

[Rick Olson (Office of Legislative Counsel)]: So I don't see, I see insurance, I don't see hospital, I don't see medical provider, I see employer, but I don't think this would stop, okay? I

[Sen. David Weeks (Clerk)]: just want to make sure that you're not overextended response. I don't think

[Rick Olson (Office of Legislative Counsel)]: so, but happy to have testimony if they Okay, clear that out. That's

[Sen. Randy Brock (Vice Chair)]: fine. We only got five minutes or so, and then we'll go back to the page. Almost done.

[Rick Olson (Office of Legislative Counsel)]: They also shall not disclose, these testing companies, any information about a consumer to a government entity, including the consumer's genetic data or name, without a search warrant issued by a court on a finding of probable cause, or unless the consumer whose information is sought provides express consent to the disclosure upon being notified by the direct consumer testing company. Enforcement, this bill is under the Vermont Consumer Protection Act that Rick Olson talked about, giving the AG the right to adopt rules, conduct some investigations, bring civil actions, and yes, consumers as well, under the Consumer Protection Act, can bring in action for the Anti Anti damages for that purpose. Applicability 24.21D, the provisions of the Subtraffic shall not reduce a direct consumer genetic testing company's duties, obligations, requirements, or standards under any applicable state and federal law for protection of privacy, and if there is some kind of conflict, the law that provides the greatest protection for provided privacy consumers will control. And finally, this subchapter, the entire bill shall not apply to Submission one is HIPAA, so actually, I think the first couple are related to HIPAA, so it's protected health information. If it's already governed by HIPAA, the sub chapters not apply to that because federal law will supersedes state law. Two is also a HIPAA exemption. Three is a HIPAA exemption. Four, a little bit different, scientific research, this is the ethical human research exemption, scientific research or educational activities conducted by a public or private nonprofit, post secondary educational institution, health insurance, basically a university that does scientific research, will be exempt from the mill until. Five, tests conducted exclusively to diagnose whether an individual has a specific disease, to the extent that all persons involved in the conduct of the test maintain, use, and disclose genetic information in the same manner as medical information or protect health information. And six, nothing in the subcapture shall be construed to affect access to publicly available information, which I explained earlier, how that was important. And the after taking effect July 1 should be found the same.

[Sen. David Weeks (Clerk)]: Any questions? It's a comment, more for the committee. The collection of chromatometric and genetic information is kind of previous slide. It's very important for law enforcement and national intelligence collection. And at the very least, I'd like to have a minimum like a Vermont state police law enforcement in here to testify that, okay, this language, good to go. Just to make sure, because it sounds good, you know, the warrant, you know, makes a problem. Seems good, but I just wanna, I would like to really validate so you don't box ourselves in the porn or Well, we

[Sen. Randy Brock (Vice Chair)]: also have the attorney general and as well, I that applies to the attorney general responsibilities as well, you know, from other things we've talked about here.

[Sen. Thomas Chittenden (Member)]: I agree. And if it's a fly by with judiciary or here, then I'd certainly support that. The other question I'm gonna have this bill continues to move forward, is I'd like to normalize that we in the healthcare system, which is heavily regulated, the consumers have the similar protections if they wanted their materials to be deleted? And so if my doctor in the hospital has things, can I call them and say, I want you to get rid of all that? But if not, that's just I want to know and we're putting this expectation on this private company and that could be a fair difference.

[Sen. Randy Brock (Vice Chair)]: Well, there's a lot of things to be done. Clearly, privacy area, every time we touch the privacy area, also talk about the responsibilities of each person or organization that is involved, and each of which seems to have different The last time we talked about privacy legislation and we looked at some disclaimers that folks had written, they went on pages and pages and pages and pages, and the thing that we're always concerned about is it looks great on paper, but to the consumer, they're not going read all that stuff. Particularly where there's not standardization, whether there are different states that have different applications, whether the federal rules do or do not apply, whether it's HIPAA, whether it's HIPAA, it's that, and it's very complex. That's, again, just something to think about. It doesn't necessarily have to do with whether or not we think this is a useful thing to have on the books, which it may very well be, but the implications of how is it used and how do people understand what it is. That's So

[Sen. Alison Clarkson (Chair)]: I would encourage people who have witnesses they want to have. I know, David, I hear you on getting Jen Morrison and the law enforcement in, and the AGs obviously, privacy experts. This I think is an important bill. I'm really looking forward to taking it up. And anyway, I appreciate. Rick, thank you. That was a great walk through.

[Committee staff (name not stated)]: Sure. Just add Bridget Morris to testimony because she was very helpful last biennium when we looked at this separately from other data privacy issues and talking about what has happened in other states that's, you know, been where they had to sort of look back at this bill or write a bill and make sure it protected folks. And there's, I mean, there's some interesting pieces about how law enforcement used things like ancestry.com at one time to find suspects and how we feel about that. It's an interesting philosophical question, but it's one that other states have done a lot of experience. Right.

[Sen. Randy Brock (Vice Chair)]: So, I'm gonna move on at this point to the next bill that we're going take a look at. And that bill is, and thank you very, very much for That your bill was 8512 and actuating it was regulation of the event ticketing market. And I can tell that there's much more interest in this than there is a data privacy for the

[Cameron Wood (Office of Legislative Counsel)]: number of people in the room. Yes.

[Sen. Alison Clarkson (Chair)]: I think there's a lot of interest in both.

[Sen. Randy Brock (Vice Chair)]: I think there is too. And so let's start. Representative Duncan,

[Rep. Emily Duncan (House Commerce)]: Alright. Oh. Wine. So, hello. Hi, everybody. Representative Emily Caris Duncan from House Commerce. So, I thought This is a bill that deals with the regulating of the secondary ticket selling market. We and committee heard from a number of Vermont venues, including the Flint in Burlington, Paramount in Rutland, and Stone Church in Pratteboro about how online ticket sellers are using deceptive tactics to steal their intellectual property and mislead customers into buying tickets from sites that are not actually the native site of the venue. This is also leading to incredibly inflated prices. If anybody has attempted to buy tickets in the recent past, you probably have run into some situations that are very reminiscing. So, this bill essentially does a few things. One is that it bans the theft of intellectual property from venues, And that includes, you know, online logos, and it also includes using the words like official to intimidate that you have some sort of connection with the venue itself, you may not. It also has notification requirements for ticket resellers to clearly state that on their websites, this is a ticket selling site, that this is not the original venue, because oftentimes that gets confused too for customers. And then there's also a ban on speculative tickets. So, we've heard about issues where consumers will go to purchase a ticket to an event, and then they get to the event, and that ticket is not scammable, it's not valid, and that pretty much means they bought the ticket from somebody who had advertised for it, and that ticket actually was never in that person's possession to begin with. In those situations, oftentimes the venues are in a position where they have to refund, if there are seats available, they will provide a seat for the consumer, and we're hearing from venues that they're absorbing a lot of costs as far as reimbursing consumers, tracking online data, and making sure that their intellectual property is not being subway, trying to take restorative actions so that they can continue to do their business. And then the last thing that it does is set the 10% price cap on the resell of tickets. So that and that's including the face value and any fees incurred by the original purchaser. This is to ensure that the large inflationary pricing that we're seeing can be kept down and under control, and that we can rebalance retail market. And then any of we also put, you know, for violations, this would be covered by the law of consumer protection statutes because this is something simple.

[Sen. Randy Brock (Vice Chair)]: And Yeah. Any questions? So, your weeks.

[Sen. David Weeks (Clerk)]: Yeah. So, how did you settle on the 10%? How did you settle on the 10% escalation of chicken prices? What what, you know, was there a difference of opinion in the committee or?

[Rep. Emily Duncan (House Commerce)]: There is. We definitely, we did go back and forth about it. There was some concern that the 10% would be too little and to staple things, but then after hearing more testimony on the issues that Vermont consumers and venues were having, felt like 10% was where we should start, and see how that plays out. It gives enough of additional cost to be able to maintain the business without incentivizing student going up.

[Sen. Thomas Chittenden (Member)]: Really appreciate this, Bill, because I've experienced this too. We gotta do something, absolutely. Similarly, and this might be for Legg Council, but I've been curious if you have the answer or thoughts of it. The 10% thing, would that also apply to individuals or is this just for reselling platforms that would cap? But if I have tickets to NOACON this summer and I want to sell it my cousin, could I sell it for more than 10%? Yes,

[Rep. Emily Duncan (House Commerce)]: technically would apply to you, but we did hear from the tech period or the AG's office that their biggest interest is not necessarily neighbor to neighbor sales. Like, their biggest interest is some of these these folks that are really powered by a lot of technology to come and swipe tickets and then go and resell them.

[Sen. Thomas Chittenden (Member)]: So, I can still squeeze my cousin. You can still squeeze your cousin.

[Sen. Randy Brock (Vice Chair)]: Do you know how many other states have laws like this?

[Rep. Emily Duncan (House Commerce)]: I don't know the total amount. I know that Maine has enacted a lot. I'm gonna defer to my friend Susan Abidsofar, just to cut you. Is that all right?

[Sen. Randy Brock (Vice Chair)]: Well, we're just doing an overview at that point, just not going in detail, but just curious as to whether or this is widespread in terms of other states.

[Rep. Emily Duncan (House Commerce)]: I remember correctly, I think there are 85 states that have they're all in varying forms. And then also these laws have been enacted in Ireland, I believe England and their motherhood is in Europe too.

[Sen. Randy Brock (Vice Chair)]: I'm sure it's something that we'll delve into as we you know, pick up the bill and go into his parentheses. Anything else you have to add to to add? The overview, we're going to talk on Legis Council next and we'll get into the details of what's in the bill at that point. Absolutely.

[Rep. Emily Duncan (House Commerce)]: I think that's covered everything. Did

[Cameron Wood (Office of Legislative Counsel)]: very good job.

[Sen. Randy Brock (Vice Chair)]: Okay. Thank you very very much. Appreciate your testimony.

[Sen. Alison Clarkson (Chair)]: And before you leave, Ms. Emily, what was the vote? What was your What was the committee vote?

[Rep. Emily Duncan (House Commerce)]: It was I believe. It was Sorry. Give me just a second.

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

[Rep. Emily Duncan (House Commerce)]: vote was ten zero one.

[Sen. Alison Clarkson (Chair)]: Great, and I guess my, when I understand that this is under consideration in many states at the moment, to go to Thomas', too many people have been scammed to have this not be addressed as a major consumer protection issue. So while Maine may be the first to pass it, I think many people are now considering it, and we'll obviously explore that further when we take it up. So, thank you so much for getting us launched into it.

[Rep. Emily Duncan (House Commerce)]: Absolutely, glad to do it. Thank you.

[Sen. Randy Brock (Vice Chair)]: From elected council? Good morning. Morning. Cameron Wood, Office

[Cameron Wood (Office of Legislative Counsel)]: of Legislative Counsel. We will do a walkthrough of H512 as passed by the house.

[House Member from Colchester (Chittenden-20) — name unclear]: Okay.

[Cameron Wood (Office of Legislative Counsel)]: So we have, a new sub chapter being

[Sen. Alison Clarkson (Chair)]: you make it a little bigger? Hot. Can't. Thank you.

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

[Sen. Randy Brock (Vice Chair)]: Thank you.

[Cameron Wood (Office of Legislative Counsel)]: You're welcome. So this is adding a new subchapter into chapter 63 of Title IX. Chapter 63 is the chapter associated with consumer protection. So new subchapter regarding event tickets, and then one section regarding resale of event tickets. So I think the first thing keep in mind, and I apologize I was just a few minutes late, I missed a little bit of the introduction of bill from the committee, is about resale. So it's not about initial sale. So I know there are current concerns and even litigation ongoing about the initial sale of tickets and potential anomalies on the initial sale of tickets through certain entities, etcetera. We're not dealing with that. We're dealing with the definition, second or subsequent sale of a ticket by any method. So I don't mean to necessarily disagree with representative Carys Duncan, but I do want to just clarify one thing that she says to your if you were to resale your ticket in Vermont at greater than a 110% of the original ticket under this law, it would be illegal. Me personally. You personally as an individual. With cash or otherwise. With cash or otherwise. Resale. My guess. As as you know with any law

[Sen. Thomas Chittenden (Member)]: Which get

[Cameron Wood (Office of Legislative Counsel)]: caught up You you can break the law. Yeah. And then the question is just are there consequences and, you know, is the entity charged with enforcement going to actually take take action? Relatedly, the 110%,

[Sen. Thomas Chittenden (Member)]: I think I something about you probably get through when you walk through it, but can I also charge my cousin fees? So the 110%, can't, like, stack on a cousin fee or a

[Cameron Wood (Office of Legislative Counsel)]: delivery fee. No, sir. You cannot. No, sir. You could mail them to the individual and charge them for the cost of mail.

[Sen. Thomas Chittenden (Member)]: Postage fees? So that's a lot. Alright.

[Cameron Wood (Office of Legislative Counsel)]: Just curious. Okay. So One paragraph. Two of that. Very simple.

[Sen. Thomas Chittenden (Member)]: So the first definition I

[Cameron Wood (Office of Legislative Counsel)]: just wanted to point out are the the first two here, resale and reseller. So resale, second or subsequent sale by any method. So this is where you were you're talking about includes in person transactions, telephone, mail, email, any other means in which you're selling, excuse me, reselling a ticket. And a reseller means a person engaged in the resale of tickets, so it includes individuals. And there was some discussion on the house floor about whether or not to have an exception for the circumstances that you're identifying, senator. There was a proposed amendment on the house floor to change the definition of reseller to add in that it does not include an individual who is reselling a ticket purchased for a single event for personal use. That amendment was discussed, ultimately not agreed to by the body. So currently, reseller would include you as an individual are reselling that ticket for some.

[Sen. Thomas Chittenden (Member)]: On that point, if I may, it just seems like we usually have exceptions where individuals that do things very infrequently, not professional or commercial gain, are exempted. Whereas if you do this as a business model, there are different rules. So I'm just surprised the body didn't accept it. So as we take this up, I wanna explore that.

[Cameron Wood (Office of Legislative Counsel)]: And and something you should ask, you know, the advocates of, you know, how that would potentially undermine possibly the the the point of the legislation will not. Okay. We have the definition of a secondary ticket exchange, which is an electronic marketplace enabling the sale, purchase, and resale of tickets. That's gonna be relevant when we get further down into the the substance of the the prohibition. And you have the definition of a speculative ticket, as was mentioned, a ticket that is not in your actual or constructive possession. Then we have a definition of a ticket and a ticket issuer. I'm not gonna go through these line by line. You know, they're in that language that really but it's not explanatory here. So then we get into the notice requirement. A person operating a secondary ticket exchange shall provide a statement in a clear and conspicuous manner informing any customer whether the customer is purchasing the ticket from a ticket issuer or a reseller, as the case may be, and that the resale price of the ticket is limited by subsection c of this section. So if you're operating this secondary ticket exchange so I will use StubHub as the example simply because they've got the Biden committee and provided written and verbal testimony. StubHub, for example. You are purchasing a ticket through StubHub. StubHub would have to provide a statement in a clear and conspicuous manner letting you know that you are purchasing the ticket from a ticket reseller. And they would have to let the individual customer know that there are limitations imposed on the presales price cap. And then we have in the sub two here, if a secondary ticket exchange provides information about the number or percentage of available tickets for a given event, the information shall not mislead customers about the availability of ticket on that platform or on other platforms. Why is that there? There was some discussion in committee about when you go onto these exchange, with this exchange and the exchange, and then they provide information saying there's only two tickets available left for this event. Yes. Maybe that there are only two tickets available on that website, but there may be still tickets available through the initial ticket issuer or tickets available on other platforms. So this language was intended to address that, sorry, to say that if you're going to provide that type of information, you can't mislead the customer. Then we get to c, which is the price cap itself. Ticket reseller shall not sell or offer for sale a ticket at a price greater than a 110% of the price of the original ticket. So that's gonna apply to anyone. So that's where I was getting to the individual circumstance to identify.

[Sen. Thomas Chittenden (Member)]: So I think this was already raised, but as this goes forward, I'd love to normalize that 110%. It's did have other states adopted it. So that comes I always worry, you know, we just pick numbers out of

[Sen. David Weeks (Clerk)]: the state. So I I was gonna say just a good example is auto resale. Here's car. One guy buys it, another guy sells it. What's the markup?

[Cameron Wood (Office of Legislative Counsel)]: I don't have any experience in that whole market. And I did not bring my folder with me. I can say that there are a number of states that have similar types of provisions in place. Usually I've seen them as a percentage gap. I've seen them as a percentage or a dollar figure. And so I could try to pull together some information if you all would find it helpful about what other states have a similar type of cap and what know, just give you kind of a a list of the states and what their caps are if that would be that be.

[Sen. Alison Clarkson (Chair)]: I think that that would be great, Cam.

[Cameron Wood (Office of Legislative Counsel)]: Okay. Will do. Will do. We get to page three, so the top of page three. So the secondary ticket exchange shall not authorize for resale on the exchange a ticket priced at greater than 110%. There was discussion in the committee, and there was testimony from, as I mentioned, some of these exchanges that they're not the reseller, or at least they don't consider themselves the reseller. You as an individual go on to their exchange and resell your ticket. They consider you the reseller. They're just the platform that's authorized the transaction to incur. There's legal arguments to be made. And so one thing that the committee wanted to include was that, Okay, we're going to cap the reseller from being able to sell. But then you, as the exchange, you can't authorize someone to do it. So you can't allow someone to circumvent the requirements of the section. So the reseller would not be able to authorize in Vermont someone selling a ticket for greater than 10%. So if you went on, you would need to hear from those exchanges about how the process works. Not familiar with

[Sen. Randy Brock (Vice Chair)]: how it I consider goes themselves being an auctioneer who's inviting people to the auction. They are simply providing a mechanical service, but the individual decides how much and then acquire it. So you can't do that with a ticket.

[Cameron Wood (Office of Legislative Counsel)]: And that's my understanding of how it would work. Somebody would go on and they go to sell their ticket, they're setting the price, and I'm sure Step Up or whatever the exchange is, is sending you out, here's how much it's gonna cost you, or, you know, potentially, here's the percentage that we're gonna take from the sale. And so what this would do is it would say, you exchange, somebody goes on to sell their ticket, you would have to inform the individual that if they wanted to sell it at greater than a 100 to 10%, you are capped at this amount.

[Sen. Thomas Chittenden (Member)]: Look. You're trying to bring the bill up, but do you define price as including the original fees paid? Because with Oh,

[Cameron Wood (Office of Legislative Counsel)]: my apologies. Yes. My apologies. I I I did miss that. The very first definition. So price means the total amount paid including taxes, fees, and charges. It does not include shipping cost. By the issuer or Ticketmaster? Because Flynn charges fees and the Ticketmaster charges. There's a lot

[Sen. Thomas Chittenden (Member)]: of fees, but this is just all the fees.

[Cameron Wood (Office of Legislative Counsel)]: So it would be what the original cost of that ticket, including its taxes and fees, what was it originally sold for. So if it was sold by the initial ticket issuer itself, the plan, you would have to go find out what the total cost of that original ticket was that was issued from them. These entities can sell initial sales through third parties, Ticketmaster, and so you would need to know what the original ticket cost was through that that sold with the initial offer.

[Sen. Thomas Chittenden (Member)]: And and if I've so the exchange platform, are we limiting what they can charge on that 100 so if I'm reselling on that platform at a 110%, that platform's gonna take it. They're gonna get their spread. I mean, how much are they gonna are we limiting how much they can, you know, manage? So for example percent, I'm still losing money.

[Cameron Wood (Office of Legislative Counsel)]: Okay. For example, the exchange could charge an amount that resulted in the individual receiving in their pocket less than 100 percent of the original ticket value. It would be up to how much the exchange was wanting to charge the individual. We're not regulating that in this bill.

[Sen. David Weeks (Clerk)]: No, it's

[Sen. Randy Brock (Vice Chair)]: not in this bill, my turn.

[Cameron Wood (Office of Legislative Counsel)]: Okay, and so back to page three, there is an exception here under sub three. It says that the price cap doesn't apply to the resale of a ticket if the reseller has a written contract with ticket issuer for the resale of tickets at a price greater than 110%. Why is this here? My understanding from how things operate on the ground, and I would defer to some of the witnesses that you can have come in and speak to this, Venue may have a contract with somebody to sell their initial tickets because they're not large enough to do it themselves. Again, that's not regulated in this bill. The committee also heard testimony that the venue may have a contract with an entity for providing a resale platform, so you could notify your customer, hey, you're purchasing this ticket to this show. If you can't go and you need to resell your tickets, we have an agreement with this entity for reselling the tickets on the platform, and that way the customer knows that if they go here, they know that they're getting a ticket, that they can have some agreement to help provide the customer information to ensure that the customer knows if you're going to buy a resale ticket, you could go to this location and it's gonna be a legitimate ticket. Those exist. The committee heard testimony that some of those contracts currently cap greater than 110%. I believe 120% was the largest one that the committee heard testimony on. My understanding is there's not many of these contracts that exist. There are venues in the state, some venues that have these contracts. There was discussion on the House floor whether or not this section should be struck or whether it should be kept. So something you all may wanna have further discussion on whether or not it will allow this exception. I will also highlight that in talking with the attorney general's office after, you know, as this was being discussed on the floor, if you want to keep this type of exception, I would request you give me the authority to kinda rewrite it to make it more clear. Currently, says that the subsection shall not apply to the resale of the ticket if the reseller has a contract with the ticket issuer. The examples that I was just giving you that gave rise to this language, it's not the reseller that has the contract. The reseller is the individual who bought the tickets. Right? The exchange that has the contract with the initial ticket issuer. So I think this language is okay, but it it could be reworded to better articulate the reason for the exception if you all wanted to.

[Sen. Randy Brock (Vice Chair)]: Bear that in mind. Yes, sir, okay.

[Cameron Wood (Office of Legislative Counsel)]: Sub D here is banning the use of deceptive URLs and the improper use of intellectual property, as it's mentioned there on line seven. Unlawful for an exchange reseller or an operator of a website purporting to sell to use a deceptive website address or imply endorsement or ownership of any intellectual property of the venue. So there was some testimony about, you know, you're going online or trying to find sales of a ticket to a given event or tickets to the blimp, and you could have, you know, kind of fraudulent websites that, you know, use intellectual property or the name of a venue or the name of an artist to try to scam individuals to going onto their website and purchasing fake tickets. That section is intended to address. So you can't use a deceptive website or address, and the sub two, you can't state or imply that you are affiliated with or endorsed by a finger team artist. So those would be violations of this section. Sub E, as was mentioned, just a blanket prohibition on speculative tickets. No individual can offer, sell, or offer for sale a speculative ticket. And then you have violations here. A person that violates the condition of the section commits an unfair incentive act of commerce, and effective July '6. And that's one piece I just want to circle back to regarding the individual. As mentioned in the circumstance you identified Senator is, if you were to sell a ticket at greater than 110%, is the Attorney General's office going to come after you as an individual? Probably not, but the Consumer Protection Act also does include a prior right of action here. So somebody could come after you for damages. Is someone going to do that if you charge them? You know? My cousin might. Yeah. That's what I'm pointing out. I'm just letting you know it's there so you're able to make informed decision about how you wanna withhold it with the bill. Again, is it likely that that's gonna happen? Probably not, but if you price gouge somebody and then they find out about it, could they then bring a claim against you for damages for you selling the ticket at greater than 110 percent? Yes, they could. So just making you over.

[Sen. Randy Brock (Vice Chair)]: Chairman, thank you very, very much for the outline and questions. Senator Clarkson, do have anything? Thanks. Anyone else?

[Sen. Alison Clarkson (Chair)]: I think this is going to be an interesting bill for us to dig into, and I appreciate the House's work on this because it ran into some thorny shrubbery that I don't it was sort of anyway, so it will be a good one for us to explore.

[Rep. Herb Olsen (Addison-4) — House reporter for H.639]: Senator Chittenden,

[Sen. Thomas Chittenden (Member)]: as this goes forward, I will need more definition on when Ticketmaster is not a reseller because they do sometimes sell tickets for venues, and then so I just want some clarity on that. And then if Forward is the only entity that can set these prices, the issuing venue or the artists that perform there, where is that authority and then how does it apply to house tickets? So if a venue or that hold on to tickets to then price them if it sells out versus selling lower Because that is a way that the operator can fluctuate relative to market demand and capture more premium.

[Sen. Alison Clarkson (Chair)]: We will go into all that. As we know, many of our smaller venues in Woodstock, I know Pentangle has used in the past other entities to sell their tickets. So we'll go through all of that and clarify those.

[Sen. Randy Brock (Vice Chair)]: Senator Weeks, anything to you? Well, thank you very much again, Emily.

[Sen. Alison Clarkson (Chair)]: So can I just clarify with Cam? So Cam, you and Rick are sharing consumer protection?

[Cameron Wood (Office of Legislative Counsel)]: Consumer protection is within my portfolio, but depending on what the consumer protection item is, it could go into other portfolios. So for example, you have the tobacco bill in this committee that you've been working on this section that was being covered by Jen because it's more of a health care health related item. And then if it is somewhat more of a IT driven or technology driven

[Sen. Alison Clarkson (Chair)]: Like type of the genetic testing Rick's

[Cameron Wood (Office of Legislative Counsel)]: doing. Got it. Those are kind of in Rick's portfolio. So we do overlap.

[Sen. Alison Clarkson (Chair)]: Perfect. Thank you.

[Sen. Randy Brock (Vice Chair)]: You're welcome. Thank you very, very much. And miraculously enough, we're actually on time. Well The next item that we have is on H757, manufactured housing. And Representative Kesha, are you with us? Yes, you are. Yes, sir. Please. Welcome. Please introduce yourself, everybody. Do you know us all about that?

[Cameron Wood (Office of Legislative Counsel)]: We've said

[Sen. Randy Brock (Vice Chair)]: all your stuff. And then we have Senator Clarkson, who is behind you. She's watching everything with the camera in front of you and I'm Senator Rutland.

[House Member from Colchester (Chittenden-20) — name unclear]: Good morning. Galapazo, representative of Chittenden 20, Old Chester. Thank you for the opportunity to speak on H757, Attack Relating to Manufactured Homes and Limited Equity Cooperatives. H757 addresses long standing barriers that have limited the stability and growth of manufactured housing in Vermont. It strengthens existing housing while creating a clearer framework so further developments do not inherit the current challenges. The bill clarifies that manufactured homes should be permitted wherever residential homes are allowed and ensures the consistent use of the term manufactured home rather than mobile home. This distinction recognizes that these homes are permanent or fixed residence rather than mobile structures. Misleading terminology can create barriers financing, influence zoning decisions, and shape public perception in ways that do not reflect the reality of these homes. It also resolves the inconsistent treatment of these homes as personal versus real property, allowing clarification as real property expands access to more affordability, long term mortgage financing, and stronger consumer protections, while preserving personal property financing options when needed. H757 aligns tax policy to manufactured housing with other housing types by reducing sales and use taxes at the point of purchase and clarifying the property transfer tax to prevent double taxation while ensuring consistency across financing methods. The bill strengthens the legal framework for resident owned communities structured as limited equity cooperatives, a nonprofit, democratically governed model that provides long term affordability for low to moderate income households. This model promotes transparency, accountability, and responsible stewardship, preserving affordability in existing communities while creating a clearer path with sustainable new development. Finally, H757 clarifies that LEC's are owner occupied communities where sub leasing is generally prohibited. However, the board may grant limited exceptions in cases of hardship provided that any sublease C is subject to fair market rent caps that protect affordability. Together these changes create a consistent framework that protects current communities while supporting future development. Manufactured housing plays a key role in expanding the brand lift, strengthening the tax base, and supporting economic growth in our communities. Thank you.

[Sen. Randy Brock (Vice Chair)]: Thank you very, very much. Any questions from any member of the committee?

[Sen. David Weeks (Clerk)]: One, we we wrestled. We had a housing bill in here over the first half of the session. And we also wrestled with the with the term manufactured homes, mobile homes, prefabricated homes, those third category. Just for clarity, this is given this chapter title seventy seventy two. This is about mobile homes, specifically, not prefabricated homes.

[House Member from Colchester (Chittenden-20) — name unclear]: Modular. Manufactured mobs. It's all great. Except for one section that has to do with that manufactured mo manufactured prefab and It's modular. Modular. Would be permitted anywhere that any other residential home would be able to be placed.

[Cameron Wood (Office of Legislative Counsel)]: Similar language to what you all had in your housing bills.

[Sen. Randy Brock (Vice Chair)]: Well, thank you very much

[House Member from Colchester (Chittenden-20) — name unclear]: for coming down. Thank you.

[Sen. Randy Brock (Vice Chair)]: Next from legislative council. The other Right back here. Representative. Oh, oh, right. It's right. Okay.

[Cameron Wood (Office of Legislative Counsel)]: For the record, again, Cameron Wood, office of legislative council. I will start, senator Weeks, with your question. Currently Could you make that just slightly larger? Yes, sir. Currently

[Sen. Alison Clarkson (Chair)]: Thank you, Randy. Or perfect. Right.

[Cameron Wood (Office of Legislative Counsel)]: You have sections in statute related to the sale or transfer of what is defined as mobile home. That's in Title IX, commerce and trade. You have in title X a section that governs the mobile home parks, the relationship between the mobile home park owner and the individuals who had a home in the mobile park. The terms that are defined are mobile homes. The these homes are heavily regulated at the federal level. The the development and manufacturing of them, they have to meet all certain all types of of HUD requirements kind of governing the the building code of the homes themselves. At the federal level, they're referred to as manufactured homes. And so one thing I will start with is at the end of this bill, is this section eight, bottom of page 11, the top of page 12, regarding conforming revisions to the statutes. This section gives our office, legislative council, the authority to replace the term mobile home with a manufactured home throughout the statutes as consistency with the act, provided the revisions have no other effect on the statutes. So the

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

[Cameron Wood (Office of Legislative Counsel)]: by this section will go through the statutes. Our office would go through the statutes and replace mobile And systems of so the the consequence of that is that what you typically now would think of as a mobile home would be referred to as a manufactured home moving forward, and that would be consistent with how federal law defines them. Could you have a manufactured home park? It would be manufactured home park at that point in time. And I will start with, it's not in the bill, but I think it's helpful to start with the definition in Title So a mobile home means a structure or type of manufactured home, including the plumbing, heating, air conditioning, all the structures that are within, built on a permanent chassis, designed to be used as a dwelling unit, transportable in one or more sections, at least eight feet wide, 40 feet long, erected as three twenty square feet. So this is meeting the definition a manufactured home under federal law. So that's what we're talking about. We're talking about a manufactured home. Again, that's how the term federal law defines it, historically referred to as home owners. So then you get the question of, okay, well what about all those other things we've talked about? Prefabricated, nodular, etcetera. There's no real definition of those that I found, at least in statute. So to begin with, the bill is going to address mobile homes and or what you historically have referred to. Seems

[Sen. David Weeks (Clerk)]: that some of the antennas don't call the mobile homes anymore. We call manufacture homes. We just blur between three different times.

[Sen. Randy Brock (Vice Chair)]: Yes, sir. Thank you.

[Committee staff (name not stated)]: Four different statutes. Maybe you already said that, but, like, they have they come under different definitions when we're used when we're in different periods of the law.

[Cameron Wood (Office of Legislative Counsel)]: So we would change that definition in Title 10 to be manufactured home, so at that point, I think if wanting to refer to as something different than that, we're specify in statute. Well, other words, I understood correctly what you said, Jack, some things that we call mobile homes today that now will

[Sen. Randy Brock (Vice Chair)]: be called manufactured homes. But do we have some mobile homes we have today that are not manufactured homes as described here? Say, wheels.

[Cameron Wood (Office of Legislative Counsel)]: Potentially. So here is the issue, or here is a little historical issue. You have these mobile homes that were regulated at the state level all the way up until the mid-1970s, at which point the federal government came in and enacted regulations through HUD about regulating manufacturing of those phones. So now in order to be, you know, kind of built, sold, etcetera, they have to meet HUD manufacturing requirements. And HUD, when they put those regulations into effect, define them as manufactured homes. And so do you have mobile homes that currently exist that don't meet the federal definition of manufactured homes? Yes, sir. If they were built initially prior to the mid 1970s when those regulations went into effect. Yes. Okay. The bill, I'm gonna I know we're I'm gonna have to do kind of a higher level longer here because we're gonna probably need to sit down and spend some time about this chapter, chapter 72, which governs the process of transferring ownership of a mobile home or a manufactured home. When you're purchasing it, how are you purchasing it? You can purchase it via a bill of sale. If it's gonna be financed as real estate, the statute requires it to be transferred via a deed. If you have it as a bill of sale because you can go onto a lot that is selling a mobile home or a manufactured home, you can purchase it. If you finance it as real estate, the seller has to transfer it to you via a deed, but the statute doesn't require it to be financed real estate, can finance it essentially as a personal property loan, as you would a car, in which case it gets transferred via a bill of sale. So in that event, what do you do then if you're selling it to someone else later on down the line? The statute currently, depending on how it's being financed, requires it to be transferred via a bill of sale or requires it to be transferred via The current chapter 72 that we're looking at right here governs that transaction, and it has section related to if you're going to sell it via bill of sale, here's all the requirements that have to be met, and here's what you have to go through to effectuate that transfer, and then it has a separate section about if you're going to transfer via a deed, here's all the things that have to be done, and here's how you go about that process. So if you want, at one point, we can come back and do a much deeper dive on that process, if you all would find it helpful. What the first half of this bill is doing is it's making some kind of narrow technical amendments throughout some of these sections. So the first amendment you have is here on page two. In this chapter, there's a definition of what permanently cited means, because this has an impact on whether or not an individual can finance the purchase of a mobile home via a real estate mortgage. They have to be permanently sited. So permanently sited means the mobile home has become affixed to the land. Factors that tend to show that a mobile home is permanently sited includes, and then it has a list here. The House General Committee wanted to add language to state that you need one or more of the following, not all five of them have to be met. So there was concern that some finance institutions, etcetera, are looking at it and saying that all of these conditions have to be met, and the committee wanted to clarify that not all of them need to be met in order for it to be deemed permanently cited. So that's the first change, the next change is gonna be in the next section. As I mentioned, this is the section that governs when you ownership of a mobile home and you're doing it via a deed, you have to comply with this section. Section A, as I mentioned a second ago, if you're purchasing it from a mobile home dealer, it has to be financed. If it's being financed as real estate, has to be transferred via a deed after 2008, so that's statutory requirement of the statistics since then. Subsection B here is saying that if you're purchasing a mobile home from someone else and you're financing it as real estate, then the individual who's transferring it to you has to transfer if he had a deed. And the amendments here are really more technical. They don't have, I wouldn't argue, have necessarily a substantive effect. So when you're looking at B, owner of a mobile home shall, upon financing or refinancing a mobile home as real estate, or selling a mobile home that's being financed as real estate, or will be so financed, clarifying language, then it has to be transferred to that B. And there's a subsection C that talks about what a warranty deed is. There's a subsection D that talks about what a quick claim deed is, so adding language in to clarify each section what it's actually referring to. And then their proposal is to remove the requirement that the owner of the land where the mobile home sits sign off on the deed. Currently, you could purchase a mobile home that sits on someone else's property, could be in a mobile home park, for example. I'm buying a piece of land, I want to buy your home that you're selling that's in Senator Brock's mobile home park. When I do that, if you're transferring it to me via a deed, we would need to get Senator Brock's sign off on the deed because it's on his land and on purchasing it. The proposal here is to remove that requirement so the landowner doesn't need to sign off of it. Mister Sandbridge, any background on why that requirement exists in current law? I don't know the history of why it exists or why it was initially inserted. I can understand the possible reason you would want it. You, as the individual who currently owns the home Again, you're living in Malone Park that Senator Brock owns. You may owe money to Senator Brock in that situation. Lot rent, maybe you're behind on lot rent, and it would give the senator the opportunity to take action in the event that he's going to potentially lose the only security he has of your repaying him money that's owed. So it would allow him the opportunity to take action. I also can imagine these things are not easily movable. They are movable. And so to have someone, tractor trailers coming on to his property to take the house apart and load it and move it and transport it. I can understand the policy argument of wanting to have that individual signing off on that occurring. I can also say that the committee took testimony from individuals, financing institutions that state that they typically don't require it. It's kind of required in the statute, but may not be followed in practice, understanding that it does create a potential barrier for somebody trying to sell a home if you have to then turn around and go get some third party signature. So it's a policy decision of whether you think it's appropriate or not.

[Sen. Randy Brock (Vice Chair)]: Okay, so We've about ten minutes less, five minutes to get upstairs, so we've about six or seven minutes to finish the deal.

[Cameron Wood (Office of Legislative Counsel)]: So moving along, we're on page four, there's some technical amendments in the form that exists. There's model forms that are in the statute if you're transferring via a warranty deed or a quick lien deed. There's some technical amendments in the form itself. Page five, it's a similar removal of the quick claim deed that the owner of the land needs to sign off on it, so just a similar amendment to what we discussed above. That gets us all the way down to page six, and you have the section regarding limited equity cooperatives. If you want to move forward with this bill, it will probably be worth it for me to come in and talk about what a limited equity cooperative is. It's a certain corporate structure that allows individuals to create a corporation to govern a kind of cooperative housing arrangement. And so there's a lot of statutory requirements that go into how limited equity cooperatives work. Really, the primary relevant thing I'll point out is in this page eight. You have cooperative housing types within those. You have what are called limited equity cooperatives, which are a cooperative housing corporation that's designed to serve individuals of low or moderate income, and those two are defined in statute. And what this bill will do is it puts a limitation on a limited equity cooperative that is a mobile home park, so not all limited equity cooperative to just those that are a mobile home park, limits the ability to sublease the units. So there's some statutory language that goes in here, and I'll come in and talk to you in detail if you want to go forward with the bill about the current statutory restrictions on leasing and what this would do differently. There's a section here that states that for a mobile home park that's organized as a limited equity cooperative, so not all of these cooperatives, just those that are a mobile home park, shall be treated for purposes of state funding and grants as if it were a nonprofit. So there's some historical context that I'd be happy to walk through with you all about why this is here. Ways and Means added some language stating that nothing there will alter the tax treatment of the entity. For grants and funding streams that come out through the state and are available, they would be treated as a nonprofit, but it's not intended to impact how they have to pay their property taxes. And then there's language here on section four, page nine, as was mentioned, this similar language is in your housing bill that you will pass. This is kind of clarifying the zoning provisions that mobile homes, modular homes, prefabricated homes have to be allowed in any district that allows year round residential development. You will, like I said, pass similar language to your housing bill. And that's where I pause, and I'm going to turn it over to John to walk you through the remainder sections of the bill. And then just check-in a few thoughts.

[John Gray (Office of Legislative Counsel)]: Morning, everyone. John Gray, I'm the solicitor of the council. Just being sensitive to time, I'll be pretty quick here. The problem that the House was trying to solve in the sections that I'm gonna go through, that as Karen talked about, there's different property tax treatment. There's different property law treatment for manufactured home rights. Some are real property, some are tangible personal property, and because tax treatment follows that property law status, manufactured homes are taxed differently depending on their status. So real property is subject to the property transfer tax under existing law, 1.25% or point 5% on the first 200 k of the two primary residence, but manufactured homes that are, sold as tangible personal property are subject to the sales and use tax, which is at 6%. So quite different economic effects for those two. The problem that House was trying to solve is could we create similar tax treatment or parity across the tax rates for those manufactured homes agnostic as to the property loss status that they have? So that's what this section does, is it tries to create an effective tax rate for manufactured homes that are subject to the sales and use tax that is equivalent to what they would be taxed at, were they taxed under the property transfer tax. So that's the way to think about this. You can see in section five we set out the statutory purposes for sales and use taxes. I could come back and talk about those in more detail, but they're just giving you the purpose of the exemptions themselves. So section six is the real core of this proposal. It is to exempt from the sales and use tax, as you see on the top of page 90% of the receipts from sales of mobile homes and modular housing, and this creates a comparable tax rate to what they would be subject to under the property transfer tax, and we can speak in more detail about that later, including with JFOI titles. The piece that you see on lines five through nine, this is pulled in and existing to create true parity under the property transfer tax, new mobile homes that meet these conditions bear a label evidencing greater energy efficiency under the ENERGY STAR program or that are certified as zero energy ready home, they have a full exemption from the property transfer tax. So to create parity here, the proposal is to insert that same exemption from the sales and use tax. So that's the two pieces you're getting in the sales and use tax exemption, create a comparable tax rate for manufactured homes that are sold as tangible personal property, and then outright exempt mobile homes that would otherwise qualify for a full exemption from the property transfer tax from sales and use tax. So creating parity of tax treatment, but not disrupting the property law statuses of those different manufactured homes. And with that, I can

[Cameron Wood (Office of Legislative Counsel)]: I'm happy to

[John Gray (Office of Legislative Counsel)]: keep going. You want me to just keep going, Scammers?

[Cameron Wood (Office of Legislative Counsel)]: Yeah. Yeah.

[John Gray (Office of Legislative Counsel)]: Yeah. So section seven is just allowing the Secretary of State to update the registration status for limited equity cooperatives to reflect their correct business organization structure, the Houseware testimony that in some instances those records don't matter. They reflect the organization status, so this would allow them to, upon request, update those statuses. Section eight addresses some of the lines that were noted in Rep Gaza's introduction, which were about the confusion of terms and what the appropriate terminology should be. As you've noted throughout the bill itself, we use the word mobile home because that's what's in existing law. This is a conforming revision section to allow our office over the summer when cleaning up to conform all those references to mobile home to update to the preferred term manufactured home. And then on page 12, the effective dates, picks up 07/01/2026, except that the sales and use tax exemption pieces that I talked about would take effect on 01/01/2027, to allow the tax department time to get up to speed on that front, And that is the full of the bill.

[Sen. Randy Brock (Vice Chair)]: You chimed in perfect questions.

[John Gray (Office of Legislative Counsel)]: Very nice.

[Sen. Randy Brock (Vice Chair)]: I'm sure there may be questions, I'm not sure we have maybe five seconds for a question if there is any. When we take this bill up, we're going be looking at it in by 2022. Senator Clarkson, do have any questions before we terminate and move?

[Sen. Alison Clarkson (Chair)]: No, I think John and Cam, you did a great job. It's an interesting bill and I look forward to discussing it further.

[Sen. Randy Brock (Vice Chair)]: Well, please thank you very, very much for coming this morning and for giving us these great explanations. We now have to move on to our next interview, which is upstairs. Yeah. Thanks, George. Yeah.