Vermont Legislature SmartTranscripts:

[Sen. Alison Clarkson (Chair)]: Of April fools. Stop the rant. Keep our lives. Okay. Great. Welcome, everybody, to Southern Economic Development, Housing, and General Affairs. It is April fools day. I'm bellowing the loss of the lack of April Fool's thus far. So I welcome I welcome our creative selves. And maybe our two committee members are coming up with some great April Fool's joke. Anyway, we are going to start. We've just launched the day with our fair housing hearing as we celebrate the beginning of fair housing month, which is April. And we are turning to another equity issue in some ways, which is our ticketing bill, age five twelve. And, our legislative council we were gonna begin with our legislative council, but we're not going to be listening online. We have everybody online today because they're either in The UK or in California two very disparate time zones. Or Rutland. Oh, we have one in Rutland. Oh, great. Oh, have the Paramount. Do we have the Paramount today? We do. We have Eric. Great. So we're going to start with Adam, who I believe is in England. Is that correct? That's correct. Hello. Adam, welcome. And we're going to begin with you. For all of you, we're just going to introduce ourselves first, although they're only, they're three fifths of us, and we'll have Tom and Kesha introduce themselves when they arrive. David, do

[Unidentified speaker (introductions segment)]: you wanna start? Good morning, guys. Good morning. Dave Weeks representing Rutland County. Randy Brock representing Franklin County and Northern Grand Isle County.

[Sen. Alison Clarkson (Chair)]: And Alison Clarkson representing the Windsor District on the East Side Of Vermont. Welcome to you all. It's great to have you as we address this issue, which is of the matters to all of us in one way or another. So Adam, welcome.

[Adam Webb (FanFair Alliance, UK)]: Hello. I've prepared, well I prepared a very long presentation, but I've been cutting it down drastically. So how long have I got?

[Sen. Alison Clarkson (Chair)]: Well, know, sort of five, ten minutes. We have, I think, an hour on this and you're sharing people. We have an hour and fifteen minutes. So ten minutes and then we'll ask questions.

[Adam Webb (FanFair Alliance, UK)]: Perfect. I'll try and do it in five.

[Sen. Alison Clarkson (Chair)]: So You actually, you know, we're delighted Zooming in for me. And Kesha and Tom have arrived, so we're just gonna add their introductions. Here we are. Kesha, introduce Kesha Ram

[Sen. Kesha Ram Hinsdale (Member)]: Hinsdale, Chittenden.

[Sen. Alison Clarkson (Chair)]: Go on

[Sen. Thomas Chittenden (Member)]: Chittenden, same district.

[Sen. Alison Clarkson (Chair)]: Correct. Adam, go for

[Adam Webb (FanFair Alliance, UK)]: Thank you for having me as well. Just one word of warning before I start as well, I'll make reference to various secondary ticketing platforms. There's some complication though in terms of via GoGo in The UK is StubHub in The US, but we also have another StubHub in The UK. It's slightly complicated.

[Sen. Alison Clarkson (Chair)]: That's a little complicated. But it's also known as GoGo.

[Adam Webb (FanFair Alliance, UK)]: But via GoGo.

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

[Adam Webb (FanFair Alliance, UK)]: So when I talk about via GoGo, that is your equivalent of StubHub, it's the same operators and owners. So just as a little bit of background, so Famfare Alliance was formed nearly ten years ago now. It was originally founded by The UK's Music Managers Forum, which is an advocacy group for music managers, and then four managers in particular representing artists including Mumford and Sons, Arctic Monkeys, One Direction and Radiohead, all came together to to to form this campaign against industrial scale online ticket touting. We had a lot of successes in the pre pandemic, which I which I won't go into now because I think they're probably less

[Sen. Alison Clarkson (Chair)]: What what's the objective of the Fanfare Alliance? Give us your purpose.

[Adam Webb (FanFair Alliance, UK)]: Two two things two things really. First of all, to to push back against large scale online ticket touting or ticket scalping. And then, first of all, in The UK we had some new consumer laws came in in 2015 that provided some very light touch regulation around resale of tickets. So, you resell a ticket on via Google or StubHub in The UK, you have to provide the seat number, the row, the block, you have to provide the original face value, you have to provide information around restrictions on the use of the ticket, and there's other consumer laws as well around the identity of traders. So, if you're a business reselling a ticket, you have to make your identity known. So, there was a whole bunch of laws, none of which were being complied with when we started the campaign. So, that was one thing was to get those laws enforced, and then the second thing, more importantly I think long term, was to promote the idea of capped consumer friendly resale. So mechanisms where if you buy

[Sen. Alison Clarkson (Chair)]: a ticket,

[Adam Webb (FanFair Alliance, UK)]: you can resell that ticket for the price you originally paid, and then another consumer can buy that ticket, and then the seat gets filled at

[Tucker Andersen (Legislative Counsel)]: a show.

[Sen. Alison Clarkson (Chair)]: And what is your cap that is now law in England?

[Adam Webb (FanFair Alliance, UK)]: The cap that we've been promoting, and actually this is now, it's not yet launched in The UK, but it's but the government proposals have been published. So, effectively, it's looking for consumers, a 0% cap. So, basically, you can sell a ticket for the price you originally paid, so the face value plus all the fees, give and then someone else can then buy the ticket. Importantly, the Government has also picked up on another of our recommendations that the platforms themselves should also have a cap on their service fee, and that cap should be around between 1015%, we believe. So if you're buying with that resold ticket, you're not going to pay more than, say, 15% of the original cost price. Obviously, we agree there's a cost

[Sen. Alison Clarkson (Chair)]: $1.05 or $5.00?

[Adam Webb (FanFair Alliance, UK)]: $1.05.

[Sen. Alison Clarkson (Chair)]: Okay. Great. Tom has a question, and I'll let you get to your testimony. Sorry.

[Sen. Thomas Chittenden (Member)]: Did I hear you say it's not current yet law? It's something that's being considered. Is that correct?

[Adam Webb (FanFair Alliance, UK)]: That's correct. Yeah. There's some so so last November, the government made a massive announcement saying I mean, fact if you read their press release you would you might be mistaken for thinking that they've already done this, but it basically says government bans ticket touting. So they've so they've they've published their proposals and then we now need primary legislation to be to be laid down. We have a king's speech scheduled for the May 13, and that will hopefully provide the opportunity for that legislation to, you know, be laid down. If if that happens, we're probably looking at twelve to eighteen months before it's law, though.

[Sen. Alison Clarkson (Chair)]: So I interrupted you, launch into your pep run, I apologise for interrupting you.

[Adam Webb (FanFair Alliance, UK)]: Thank you. So I'll kind of cut to the chase, so that was the kind of the foundation of Fanfare. Had, like I said, we had a lot of successes pre pandemic getting the law enforced. We had Ticketmaster who previously, like they do in The US, have uncapped resale, so obviously ticket touts, ticket scalpers, listing tickets for huge profits. They closed those businesses down in The UK, so in The UK now all of the primary ticketing companies offer capped resale. So that is, you know, the model is there, it's in existence, we're now talking about tackling the black market and the exploitative secondary ticketing. So in late twenty twenty three, after the pandemic, we kind of relaunched our campaign around three main goals. One of which was new laws to cap ticket resale prices. Secondly, was to push Google in particular to stop promoting touting businesses and to support venues and artists and help themselves tickets. And then thirdly, was to push the music industry itself to up its game and to get better at marketing the cat resale services which they will be launched, so to try and make them more appealing to consumers and get more awareness of what those services are. So, the UK Labour Party seemed very receptive to this, the party leader Kesha Ram Hinsdale made a big public speech adopting this idea, it was in the manifesto, and then just taking us up to where we were speaking just now, November there was a big public letter which I helped organise which artists like Radiohead, The Cure, Coldplay, Dua Lipa and about 30 or 40 others all signed up to and then the following week Government announced what they're planning to do and that's basically four things. So, ticket resale above face value will be illegal and they're defining face value as the price of the ticket plus all the fees. Service fees charged by resale platforms will also be capped. Resale platforms I. E. Via GoGo StubHub will have a legal duty to monitor and enforce compliance with the cap. At the moment, these companies are very bad at monitoring anything on their platforms. And then individuals will also be banned from reselling more tickets than you're entitled to buy in the initial ticket sale. If a show says you can only buy four tickets or you can only resell four tickets, you can't resell 400 tickets. So, like I say, we're now in this process now where the Government have published its proposals, we're now just waiting for confirmation on when this law is going to get the parliamentary time to go through the legislative process. Obviously, we're pushing for that to happen in the King's Speech in May, but we'll have to wait and see how that goes. I think the things I just wanted to probably share with you quickly, having been in this area for about ten years now, scarily enough, is that we've got, I think, some advantages over other countries, that we've got more transparency on what goes on on these websites. So, unlike the folks in The US, we can see, you know, we've got much better sight of where tickets are situated when they're listed on secondary platforms. We can see seat numbers, we can see block row etc. We could also look the identity of sellers as well. So, I think that that's given us some quite good observations and insights in terms of what this market is and how it operates. So, the first thing I'd probably say is that this is not a consumer to consumer market built on supply and demand, this is very much a business to consumer market. And when I say business, I mean scalper to consumer market. Our Competition and Markets Authority, the business regulator, they did a big investigation of Vigogo and StubHub in 2021, and from looking at the actual figures, and I'm just going to point from their report, it said that Vigogo's largest resellers account for the majority of their sales, with those in the top desal accounting for more than 70% of platform GTV'. So, it's absolutely unequivocal that these businesses are absolutely crucial, a top set of huge sellers. That's what makes their business run, it's not consumers. Most of the value comes from a small subset of large scale sellers. Our own research at Fanfare always demonstrates this, so I do a lot of research for the media, for politicians, for regulators, again to try and show what's happening on this market. Nearly all of the time around 80% or 90% of tickets listed for shows, particularly high demand shows, will be listed by scalpers and touts, not by consumers. I did some research for the Daily Record newspaper in Scotland in October, that looked at over 5,000 tickets listed on for events in Edinburgh and Scotland. The results of that research showed that all of the tickets being resold on ViaGoGo were for above face value. Only 2.5% were being listed by consumers and 97.5 were being listed by touts. So, you're talking about actors who are creating

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Correct.

[Adam Webb (FanFair Alliance, UK)]: And the rules of supply and demand are kind of not this isn't kind of some natural supply and demand. These are people who are entering the market, hoovering up tickets, and then creating their own demand. Of those 97.5 touts, only 15% were based in The UK, 60% were based in The

[Tucker Andersen (Legislative Counsel)]: US. Obviously, these

[Adam Webb (FanFair Alliance, UK)]: are events in Scotland. You found one ticket tout based in Ohio who was listing 2,616 tickets for one event, and that was in a room with a 700 capacity. The name of that business was called Legit Tickets. We also found numerous tickets which are listed speculatively, and again this is an endemic problem on the secondary sites, where you'll see tickets listed on via Gogo and the exact same seat numbers that we listed on Ticketmaster, so they're reselling tickets which have not yet even been sold in the first place.

[Sen. Alison Clarkson (Chair)]: Tickets that don't exist.

[Adam Webb (FanFair Alliance, UK)]: Tickets that don't exist, and again like I say, because we've got more transparency in The UK, we can see these things a lot clearer I think. Obviously in The US you don't have any of these details, so you're completely blind about what the tickets are and who's selling them. So, my conclusion is there is a totally unregulated black market. It's a totally insidious form of dynamic pricing, and if you scratch beneath the surface you'll find a complex of offshore funds, discourse, underground financing, it's pretty murky stuff beneath it, and effectively turning culture into a commodity market. So, that's the first thing in terms of what the conditions are. In terms of the competition dynamic, again, you've listened to the pro scalper spokespeople who mostly talk about supply and demand and the market price of tickets, and I kind of sound like economics professors, but the real dynamic in this market is actually between scalpers and the platforms. So, the platforms want the biggest scalpers and the scalpers want to use the platforms that are going to give them the best incentives and the best prices etc. So, that's actually the dynamic that's going on here. There are a couple of prosecutions in The UK which I can send you details of, but I think that they illustrated very, very well how this market works and that was basically two groups of touts who were arrested by national trading standards in The UK. They went through to prosecution, they went to prison facing forfeiture orders. In both cases, the individuals were basically involved in acts of mass fraud, in terms of how they obtained ticket, using multiple identities, multiple credit cards, specialised software. So, all obtained tens of thousands of tickets which they resold for millions of pounds. The platforms themselves are in collusion with this. If you're being generous, you could say that they just don't ask any questions. So, if someone's listing, you know, tens of thousands of tickets, they're not questioning where those people got those tickets from and if they were required lawfully. But obviously they'll also profit from this as well and actually the BBC reports on one of these cases which is involving a guy called Peter Hunter, they estimated that just from his ticket sales alone, the four main platforms that were operating then would have made around £8,800,000 in service fees. So there's absolutely organised crime at the heart of this and this is what the platforms are benefiting from.

[Sen. Alison Clarkson (Chair)]: Adam, thank you. We have a question here, and I think we have have you sent your testimony to our committee assistant, Kiera? And if not, would you be kind enough to do so? I'll

[Adam Webb (FanFair Alliance, UK)]: definitely do that. It was hastily written this morning, so I will definitely do that later.

[Sen. Alison Clarkson (Chair)]: Well, thank you. And Thomas has a question for you.

[Sen. Thomas Chittenden (Member)]: Adam, I appreciate your testimony. I agree with you that this is an insidious market with dynamic speculative pricing that just not does not feel right. So I'm fully on board with a lot of the good things in this bill. Where my pause, what I'm trying to wrestle with is the price gap. So I'd just like to ask mechanically, how do you anticipate this bill that's under consideration in The United Kingdom to really be translated into action? So if I bought a thousand dollar ticket to see Taylor Swift and I paid $200 in service fees, that's $1,200 And then the first resell, I think you said you're contemplating allowing a 15% charge on that. So would I then, if that gets resealed again, so that'd be $1,200 plus another $180 Now we're at $13.80 paid in fees so far in the second resale. When I then compound that and I could do 15% on that $13.80 and the platforms will be required to just monitor how many times the tickets get resold. Or do you see another mechanism where I, as the original purchaser, will just have to eat that 15% and take less money than what I actually paid because I have to pay for the transfer of the of the tickets on the platform?

[Adam Webb (FanFair Alliance, UK)]: So the way the way I mean I mean, effectively, what the cap is gonna do in The UK is kinda legislate how the market's currently working. So in The UK, caps retail is now standard. So if you buy a ticket through through Ticketmaster, for instance, you can resell that ticket for what you bought it for or less, and then Ticketmaster when you resell they'll charge to cover their service.

[Sen. Alison Clarkson (Chair)]: There's a bunch of other services which will actually charge less, a smaller service fee, there is some

[Adam Webb (FanFair Alliance, UK)]: competition dynamic in the market, but again it's a very the market dynamics though are very, very different to the secondary market. It is genuine fan to fan, it's not business to fan. Obviously appreciate though, you some of those, I mean you mentioned say a Taylor Swift ticket, obviously at large stadium events, you know, ticket prices in primary can be really, really high. So again, I think that that's something where, you know, again the market itself is probably going to have to evolve and there'll be, you know, caps on those resale fees. So again, maybe it shouldn't be 15%, maybe it should be 15% or no more than, you

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

[Sen. Thomas Chittenden (Member)]: Does The United Kingdom mandate that event venues take returns of tickets up to seven days prior to the event? Is there any regulation on those Ah,

[Sen. Alison Clarkson (Chair)]: that's a good question. No. I mean, not I

[Adam Webb (FanFair Alliance, UK)]: mean, that's not really standard practice in music.

[Sen. Alison Clarkson (Chair)]: I mean, it is certain venues, maybe more theatre and arts venues, but I

[Adam Webb (FanFair Alliance, UK)]: think in terms of consumer law, I think as long as you're giving I mean the basic advice we've had from regulators is as long as you're giving consumers a fair deal in the first place, in terms of providing them with all the transparency and information they need on fees etc, that there just should be some mechanism. So, it's either resale or refund. I don't think refund is standard in music, whereas it might be in certain other arts.

[Sen. Alison Clarkson (Chair)]: Okay. Adam, we're gonna have to we'll have follow-up, and it would be great if you're able to stick around for the rest of the conversation because we have some very interesting takes that may be slightly different. We'd love your input if you're able to stick around. Okay.

[Adam Webb (FanFair Alliance, UK)]: Thank you.

[Sen. Alison Clarkson (Chair)]: But at the moment, we're gonna shift to Eric Mallett, the executive director of the Paramount in Rutland. So in real time, Eric, welcome.

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: Hi. Good morning. How is everyone?

[Sen. Alison Clarkson (Chair)]: We are well. We're looking at we're well. It's good to see you.

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: Good to be here. So can everybody hear me okay? Wanna make sure. I know sometimes Zoom calls Okay. Can be Great. It's not lost me the first two fellows talking today are lacking hair up top. So Adam, good to see you. Senator Weeks, thank you for also sharing in the same haircut. So as we shared, my name is Eric Millet and I do serve as the executive director here at the Paramount Theatre in Rutland. And I am here today in absolute strong support of H512. This is not a minor issue. Resale websites are designed to look like legitimate venue sites and extreme ticket price inflation are actively preying on Vermonters every day who simply want to experience live events. These resale websites are threatening Vermont's local economies, as well as a health of arts organizations like the one that I run. Venues like the Paramount, we're a lot more than just big windowless boxes with lots of chairs. We're economic engines for our communities, often very singular in our respective regions. There's not a lot of folks that do what I do within a reasonable driving distance of the front doors of the theater. The Paramount generates almost $3,000,000 a year and growing in regional economic impact every year. Overall, the creative economy contributes an estimated 1,200,000,000.0 to the Vermont economy annually. All this matters because every show brings people into downtown. They support restaurants, shops, hotels, and all sorts of other local businesses. The ripple effect of our events help sustain jobs, attract visitors, and strengthen the overall vibrancy of our cities and towns. Short to say, Vermont's art venues are a vital part of the state's economy, not just its culture. But these deceptive ticketing practices are threatening that ecosystem in real time every day. When scalpers exploit fans with inflated prices or misleading websites, this is reducing attendance. It's draining money that should be staying in Vermont and it's weakening the economic benefits that venues like the Paramount and my colleagues across the state create. These are dollars that could support local businesses. Instead they flow out of state to anonymous resellers. And this erodes both the cultural and financial foundation of our communities. I could go on for days sharing with you heartbreaking examples. Grandparents that were duped into paying three to five times the face value to see their grandchild perform in The Nutcracker. These are families really just trying to celebrate important moments and they're being taken advantage of because this market is not regulated. There's no protection for these people. Our box office hears these terrible stories every single day and I promise this committee that is not hyperbole. This loss of trust I'm sharing with you doesn't just hurt the ticket buyer in that moment. An organization like the one I represent appears to be out of touch with the realities of our communities with thanks to these wildly overpriced tickets being marketed by scalpers, it's very simple. Donors walk away. Donors stop donating. I operate a mission driven organization. I have a responsibility to make sure that the organization that I oversee has its doors open to as many people in our community as possible. As we lose these donors because they feel we are out of touch because of the overpriced ticketing, that mission becomes more and more difficult to achieve. I want to be clear. Patrons want this bill to pass. H512, it protects Vermonters by keeping tickets fairly priced and accessible like we've been talking about, but it takes away the profit incentive from the predatory resellers. At the same time, as I was just describing to you, it helps safeguard the long term sustainability. I want to talk about the price cap because there's been a lot of discussion about this. In my opinion, a 10% cap on resale pricing is the most straightforward practical solution. It still allows patrons to sell tickets when plans change, but importantly, it removes the financial incentives for bad actors to exploit fans and continue to manipulate the market. There's no other way. They're not doing this because they want to see which reseller can sell the most tickets next month. They're doing this to generate as much revenue as possible. If we can take them out of the knees by reducing what that margin can be, they will stop. Live events are a lifeline for Vermont communities. I don't think there's a single person in this room that would disagree with Venues like the Paramount, we're at the heart of that system. If we don't act, we are normalizing exploitation. We're hurting local businesses and we're weakening the cultural and economic fabric of our state. Never mind the fact that we're undermining the trust that audiences and donors rely on when supporting the work that folks on my team here do every day. H512 is a measured essential step to protect audiences, support local economies, as I mentioned, and safeguard the future of some of Vermont's most treasured organizations.

[Sen. Alison Clarkson (Chair)]: Thank you. Eric, I'm going to ask you, and then Tom has a question, I know. I'm gonna ask you, what are you at the Paramount doing to promote your legitimate ticket buying website? What are you doing to drive people and make it clear that you are the trusted source for the primary ticket?

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: So the best we can do is communicate. So we talk with our buyers twice a week through a weekly email blast. Our marketing all is very clear that you have to look for what we refer to as the Heritage Family Credit Union online box office. So we communicate, I think, as effectively as possible, but the noise that we have to break through is just so vast. I've heard conversations being shared about you should put language on your website saying this is where you need to go to buy tickets. I appreciate generosity or the simplicity of that, but if you're already on the website that sells the tickets me telling you you're on the website is sort of, I don't know, it's like putting your blinker on after you've already taken the exit. Our staff has been given the task of again communicating as regularly as possible that the only place you go is paramountvt.org.

[Sen. Alison Clarkson (Chair)]: And do you not also have as a backup calling the box office? I mean, quite honestly, the for me, the the the best defense on this is direct communication with the box office. If people have questions, they should be calling the box office and saying, is this really the price of this ticket? I mean, if they can scan so Tom has a question too.

[Sen. Thomas Chittenden (Member)]: Do do you use staggered ticket releases with demand adjusted pricing based on what you see in the first wave? Do you have house seats and allocation amounts, or do you release all tickets for sale at a standard price for every event, every time at the same time?

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: The latter.

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

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: Yeah. We do not participate in dynamic pricing.

[Sen. Thomas Chittenden (Member)]: And another concern I have with the price cap is I would expect the market to react that if a third party reseller starts to bundle tickets with say a bottle of water or a limousine ride or something else, then they can start to circumvent any cap we put into place and price it however they so desire. Is that something that's been contemplated in your advocacy or discussions on this bill?

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: That's the first I've heard of it, but I would imagine that those that are looking for a night out with a limo and dinner are much smaller in total than just a couple looking to go buy tickets to a show. So I I hear you and I think that those are some loopholes.

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

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: But I know when my wife and I go to the theater, we're not looking to get in the limo. I would expect that would sell for a premium.

[Sen. Thomas Chittenden (Member)]: Sure. Thanks.

[Sen. Alison Clarkson (Chair)]: Yeah. Thank you. Eric, thank you. If you stick around and would you be kind enough to send your testimony to Kara and to me, that would be great, and we'll get it up on the website. If you would stick around, if you and Adam may have input on the rest of our witnesses. But I think given our time frame, I'm gonna shift to Joe Freeman. Joe, are you there at?

[Joe Freeman (VP Government Relations, SeatGeek)]: Good morning, madam chair. Thank you so much, senator.

[Sen. Alison Clarkson (Chair)]: Joining us from California?

[Joe Freeman (VP Government Relations, SeatGeek)]: Southern California. I need to let senator Hinsdale know my son was a Santa Monica Viking right about the same time she graduated. That's a subject for another day.

[Sen. Alison Clarkson (Chair)]: Okay. Well

[Sen. Kesha Ram Hinsdale (Member)]: I would say go Vikings, but I never liked our mascot. I think finally changed it.

[Sen. Alison Clarkson (Chair)]: Yeah, it is a little odd to have the Vikings on the West Side.

[Joe Freeman (VP Government Relations, SeatGeek)]: Wrong ocean, agreed.

[Sen. Kesha Ram Hinsdale (Member)]: But I love my ice ball.

[Sen. Alison Clarkson (Chair)]: Yeah, God forbid. Joe, welcome. If you'd introduce yourself and go for it.

[Joe Freeman (VP Government Relations, SeatGeek)]: Thank you, Senator. Joe Freeman, Vice President of Government Relations at SeatGeek. There's so much I want to say and I know time is limited. I really want to stress what a different lane SeatGeek occupies in this ecosystem. I have profound respect for Mr. Webb, Mr. Mallett. I agree with so much, Eric, if I may, we're both handsome bald men, of what you just have to say about your theater being a local icon. I tried to get to a show a few weeks ago. I didn't get to the state and time. It was the Lyle Lovett show. I'm so sorry I missed it. I hear from friends in the community how beloved a theater it is. We only want you to flourish. Two seconds on Seageeks background. We started three college roommates down the I-eighty 9 and across the Connecticut River from where you folks are sitting today started this company in around 2009 in their college dorm. Started off as an aggregator like Kayak, then became a resale platform akin to a StubHub, and then about ten, eleven years ago, we had the brilliant idea to take on Ticketmaster directly in ticketing, The strategy being let's align as directly as possible with rights holders and give fans, give consumers more choice and get more people going to live. It's as simple as that. Trying to take on Ticketmaster directly, We've had yay much success. I'll talk about it in a sec. It's also been an avalanche of antitrust headaches. Our CEO testified for a full day in federal court two weeks ago in the antitrust case going on against Live Nation Ticketmaster. I know we're not here to talk about that. A big shout out to General Clark's office for being one of the remaining state attorneys general in that case. It's gonna, assuming a jury verdict comes in as most people hope, it's gonna make the live entertainment ecosystem in The United States so much more competitive and consumer friendly. In terms of aligning with rights holders, we focus on larger arenas and stadiums, quite frankly. We ticket about six NFL teams, three NBA teams, two NHL teams. We do really well in soccer. There's no concert threat there coming from Live Nation. It's a separate conversation. Why do I mention all those things, and why do I

[Sen. Alison Clarkson (Chair)]: Lots of Broadway and Off Broadway and Off Off Broadway tickets.

[Joe Freeman (VP Government Relations, SeatGeek)]: We we used to have a primary relationship with one of the leading houses on Broadway. Not anymore, but we're yeah. That's that's for that benefit for business reasons mutually agreed upon. We stepped away from that, we're based in New York City. We're a big part of that ecosystem as well. Thanks for the call out. The reason I bring up our aligning with rights holders, we actually have a footprint in the Vermont live entertainment ecosystem. We are proud to be the verified ticket partner of the University of Vermont, and I've had a couple of really enlightening friends, a couple of very friendly, enlightening conversations with Jeff Schulman, the AD at the university. I'm in no way here to talk on behalf of the university. We actually don't have a signed contract with the university because we have a signed contract with a national ticketing services provider, a company called Packiolin, that's a leading ticketing services provider for intercollegiate sports. Through them, Packiolan is able to offer its clients like UVM a resale option in which the back end is integrated and local fans, local students, and alum have a viable, safe resale option to get rid of or buy tickets, whatever the choice may be leading up to events. So it's only been a two year partnership so far. We feel deeply invested in the community, and frankly, we've sold a heck of a lot more tickets than one would imagine for a single university in a smaller, predominantly rural state. So we're thrilled to have that indirect presence. It's also taught us a lot about compliance back end interoperability, and what it means to be able to give consumers the most transparent, fan friendly ticketing choice. We see so much that we support in H512. We have a fundamental philosophical, I would respectfully submit principle disagreement with Mr. Webb, with Mr. Mallett on the issue of price controls, of retail price caps. In our experience, they just don't work. I've attached to my written testimony just a quick collection of articles from The UK, from other jurisdictions where for the type of business we focus on, the amount of fraud when high demand events do not have safe resale platforms such as SeekGeek is pretty astronomical. We're not in resale in The UK parenthetically. We do ticket on a white label basis of close to half of The UK We Premier spend enough time trying to fight for our existence against Ticketmaster, quite frankly, that it's just not something we've been able to look at or invest in. I have a ton of respect for what Mr. Webb is saying and trying to accomplish because it's about protecting fans and helping the industry to flourish. I am hopeful that we can get through the conversation today without too much name calling or pejorative, sometimes offensive terminology.

[Sen. Alison Clarkson (Chair)]: Thank so much here in this state. Just one question before we go to Kesha. Kesha has a question. What percent of your business now at SeatGeek is resale and what percent is primary ticket sale?

[Joe Freeman (VP Government Relations, SeatGeek)]: It's a great question. I don't know if we publicly state that. I can tell you roughly it's probably, please don't hold me to this, it might be as much as fiftyfifty. I don't have that exact number and I don't think it's something we report, but it's somewhere in that range is my understanding.

[Sen. Alison Clarkson (Chair)]: The expectation.

[Sen. Kesha Ram Hinsdale (Member)]: So I just Googled UVM athletic tickets just to see, like, what happens. Right? Because I think this is where most people start to go off the rails, including myself. Like, where do I actually get a ticket? And, you know, to, like, to everyone's credit, uvmathletics.com is the first thing that shows up, and it has a drop down that takes up most of the screen for where to get basketball or student tickets, women's basketball. Like, it looks like they put their most popular the most popular search functions at the top. The second two websites are Packio.

[Sen. Alison Clarkson (Chair)]: So I haven't haven't clicked yet.

[Sen. Kesha Ram Hinsdale (Member)]: What I'm seeing is promising, even though it says uvmathletics.evenue.net, the contact information is still the UVM ticket office and the UVM ticket. Absolutely.

[Joe Freeman (VP Government Relations, SeatGeek)]: Yep.

[Sen. Kesha Ram Hinsdale (Member)]: I'll just say, like, I know athletic events, at UVM, we're not loved, loved by Alma Mater, but we're not, you know, UConn, UCLA.

[Joe Freeman (VP Government Relations, SeatGeek)]: Not yet.

[Sen. Kesha Ram Hinsdale (Member)]: What we're getting there was soccer. I mean,

[Sen. Alison Clarkson (Chair)]: we're getting-

[Joe Freeman (VP Government Relations, SeatGeek)]: Your soccer, your soccer team is, but go My

[Sen. Kesha Ram Hinsdale (Member)]: mother accepted UVM and took her part in twenty twenty five when they beat Syracuse.

[Sen. Thomas Chittenden (Member)]: 2005.

[Sen. Alison Clarkson (Chair)]: What did I say? Oh, yeah.

[Sen. Kesha Ram Hinsdale (Member)]: 2005. Yeah. Okay. But this without looking deeper, I would say I would think this is the kind of best practice we're looking for where the websites that even are legitimized are not subsuming or eclipsing the original venue's website. They're pointing people back to the website when there's tickets available. They're not engaging in the same deceptive practices that concern us about the fully illegal and illicit market. Right? Like we want What I don't like, personally, is struggling to even find the right website I don't get tickets in my own state, you know, knowing full well that it's like, I have to remember flintix.org or something, so I don't get sent somewhere else, no matter how savvy I am at navigating that event.

[Joe Freeman (VP Government Relations, SeatGeek)]: I think those are perfectly valid that I emphatically embrace. No consumer, I think we should all agree should ever buy a ticket thinking they're buying from the venue box office when they're not period full stop. I would argue that in any instance where that is happening, whether it's through a deceptive URL or other misleading marketing practices, that's already a violation of consumer protection laws. It's a misleading and deceptive business practice. Thankfully Seekieq has established a name for itself and we've built our business on not mimicking the box office to the exact contrary, we're trying to align with rights holders. I had hoped Senator Hinsdale that if I, the sports season is largely over at the university, what I had hoped to show and I got onto the site too late was to show a purchase flow of how you would land on SeatGeek through the university authorized channels. But the other point I really wanted to make, frankly, is the issue of compliance in the event of a price cap. A business like ours that's trying to do resale right. Right now we don't even have access to what the original or face prices for the university because we have that back end integration, it probably could be developed. But I'll tell you this, we're looking at a scenario where frankly, the company that's looking to invest in the ecosystem and align with rights holders might be the only one that can actually comply with the law. In so many other cases, we simply have no way of knowing what the initial face price is. I didn't mean to pick on the Paramount because frankly I really want to get there one day, but I'm a lot of love it fanatic. I'm a strange guy that way. He played at the Paramount, I think on March 7. I wish I could have gotten him on Pellier into Rutland that day, but when I fooling around online, I came to the Paramount site. I think I put some screenshots in my submitted materials, and the Paramount Theatre, to its immense credit, first had a very visible page about resale notices and who you know Mr. Mallard thinks consumers should be buying from, entirely within his purview best practice web page. At the same time though that show was sold out and at the bottom and I highlighted this in my paperwork, I think at the bottom it said something like no more tickets available at the box office. There was no indication of what the pricing was. A site like ours, assuming we were trying to do calisthenics and leap through hoops and be strictly compliant with you know whatever law one day is enacted or not, no way of knowing what the face price is, let alone the need for a back end integration. The last thing I want is to upset you Eric, we're trying to align as much as I put in the screenshot, this is one consumer's experience. But I also want to add, and I included the screenshot while there was nothing left at the box office on the day of the show because it's a great act, I'm sure they were amazing. I found a ticket on Sea Geek, and it was for I think $200. I have the screenshot of my materials. I don't understand why in that very, very common occurrence where someone is looking for a ticket last minute that isn't at the box office. Whether the event sold out, whether someone's motivated to get a front row ticket or a last row ticket, why we should be looking to restrict consumer choice.

[Sen. Alison Clarkson (Chair)]: Right, Thomas, then we're gonna move to Jason. Sure, I very

[Sen. Thomas Chittenden (Member)]: much appreciate your testimony and I'm increasingly in agreement with a lot of what you said and so what I'd like to just validate, my impression is if we put this price gap into place and I have two tickets I bought for my 16 year old, which turned 16, two very expensive tickets to Katy Perry in Boston. And I've had those tickets and I own those tickets, but if I couldn't use them for whatever reason, and I wanted to resell them, but I couldn't get more than what I paid, but it's sold out. And I know there's people out there that love Katy Perry. I'm gonna go to another way. I'm gonna go on Craigslist. I'm gonna put an ad, mention it to other people, maybe advertise and I'm gonna wanna sell it at a premium because that's just my market incentive. If And I'm doing it, there's gonna be others doing it. I see a lot of your articles talking about how these black markets come online when there's price caps in play. My question to you is, where can I point to existing jurisdiction, provinces, states that had a price cap and then repealed them because of just this effect? I see all these articles, but how much how could I validate that that's the likely outcome based on previous experience in other jurisdictions?

[Joe Freeman (VP Government Relations, SeatGeek)]: If you try

[Sen. Alison Clarkson (Chair)]: that, Adam too, because I think we have some international data on that for international So

[Joe Freeman (VP Government Relations, SeatGeek)]: Senator Chittenden, have a really specific direct answer. If you travel a little further down the interstate, you're gonna get to the Commonwealth of Massachusetts, and in November '4, I believe, they rescinded their one hundred plus year old resale price cap law, period, full stop. I spent a lot of time in Boston on that, had a lot of conversations with Attorney General Campbell's office in Boston, and compliance was virtually impossible. Enforcement resources were seen as being better dedicated to other areas, and the experience was frankly that in the vast, vast, vast majority of instances that did not involve a misleading or deceptive business practice, it simply wasn't a law in which folks felt violated. Have a deal with Major League Baseball, so Red Sox season ticket holders as with the university. Red Sox season tickets Jovan,

[Sen. Alison Clarkson (Chair)]: finish your thought and then we're gonna need to ship.

[Joe Freeman (VP Government Relations, SeatGeek)]: Yeah, I apologize. Red Sox season ticket holders like a UVM season ticket holder can automatically resolve through a back end integration to our site to sell a ticket in a transparent, secure, immediately verified manner. That's what we've bet our business on. That's our hope for the future. We really appreciate your attention to these issues.

[Sen. Alison Clarkson (Chair)]: Yeah. Thank you. Thank you. If you stick around, we're open we'll open it up, I'm gonna turn to Jason Webb. So I have two webs at one point. It is amusing, and we have webs here in Vermont, so it's just that you see all these webs all over the place. Jason, are you joining us from California also?

[Jason Webb (Co‑founder, Tixel)]: Yes. Joining from California despite the accent. Chairperson and members of the committee, thank you for the opportunity to testify. So on the other web on this call, my name is Jason Webb. I'm speaking on behalf of Tixl, which is a global fan to fan ticket exchange that partners closely with promoters, venues, and artists to keep ticket trading fair, transparent, and safe. Tixl exists to help fans attend more shows and to help artists and venues build healthier and more sustainable live ecosystems. Since I cofounded Tixl eight years ago in Australia, we've operated a ticket resale marketplace with built in consumer protections that include strict price cap tied to the original purchase price, proactive blocks on speculative tickets, and technology and partnerships designed to align our incentives with the people who create and host live events, not against them. Importantly, this is not theoretical for us. Our entire business operates successfully with a price cap of a 110% of the original purchase price in place. We are a commercial scalable marketplace that facilitates millions of dollars each year in ticket resell across several continents, under these conditions. We process hundreds of thousands of tickets ticket exchanges each year within a price capped environment, and the marketplace is growing. The idea that price caps make resell markets unworkable is not it's it's not consistent with our experience. We actually see the opposite. Sorry? Was there a question?

[Sen. Alison Clarkson (Chair)]: No. I I I think at that price, at a 110%, if people can trust that that's the top resale value that that's where you sold at, I think that that develops trust that you won't be completely scammed into paying 10 times what the original ticket price is. I mean, if you know what, then it's capped that amount.

[Jason Webb (Co‑founder, Tixel)]: Yeah. Well, that's the idea behind the business and the genesis of the business.

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

[Jason Webb (Co‑founder, Tixel)]: Yeah. So what what we've seen is is that price caps create healthier and more trusted marketplaces that real fans are more willing to use. For the last twelve months so we the business is originally from Australia. I'm I'm in Los Angeles. And and for the last twelve months, we've partnered with one of your local venues in Vermont, a venue called Pie Around as their official fan exchange partner.

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

[Jason Webb (Co‑founder, Tixel)]: On both on both shows at the venue itself and the outdoor summer series at at the Sheldon Museum. And together, we actually enforce a 15% price cap right now on those shows, and that allows the transaction to account for fees and so the seller can recover their money. And we've successfully enabled the transfer of thousands of tickets, and we've made sure that fans get in to that venue safely. The bill before you is a pragmatic pro fan, pro artist framework, and it combines the several provisions that we've seen work together. So there's the price cap of a 110 percent of the purchase price, the ban on the speculative listings, the protections against deceptive websites, and the misuse of intellectual properties. And then really importantly, and perhaps, Joe, this is why, the Boston bill, didn't work in its repeal. This this bill, includes enforcement through existing unfair trade practices laws. And we strongly support all these measures. In particular, I'd like to focus on the price gap because a philosophical concern about the government setting prices can sometime exist. But in practice, governments already set guardrails on pricing in many markets where consumer harm is likely from anti gouging laws during emergencies to regulations and utilities, insurance, and financial services. And it's important to say that ticks that tickets are actually a really unique product. They are access to they are access rights to an event, and they're often sold in very limited qualities, and they're highly vulnerable to artificial scarcity and speculative behavior. Without guardrails, they actually become financial instruments rather than access to live experiences that they're supposed to be. And so the role of the price cap in this context is not to control the market broadly, but to prevent clearly identifiable consumer harm from taking place. A modest cap like 10% above the original press purchase price does not distort the market. It simply ensures that resell serves its original purpose, which is helping fans who can no longer attend transfer their tickets to other fans around about the cost that they paid for them or lower rather than enabling large scale profit extraction. From an operational perspective, a 10% cap works because it aligns incentives across the entire market. It allows sellers or the original ticket holders to recover their costs, including all the fees, without creating a meaningful profit motive that attracts large scale speculative behavior. At the same time, it keeps prices within reach for genuine fans, which maintains demand on the platform. And that balance is critical because if the the cap is too low, then the sellers disengage. And if it's too high, the market attracts professional resellers and prices quick quickly escalate. At a 110% of face value, we consistently see strong participation from real fans on both sides of the transaction without the distortions that lead to scalping. We see this clearly in our own data, and the vast majority of tickets resold on Tixl are listed within within because of normal life circumstances, such as conflicts in their in people's schedule or illness. Buyers are typically fans who missed out on the initial sale. And when prices are capped, more fans can afford to attend more shows. That translate to stronger outcomes for venues, artists, and local economies. And so the concrete example is when a $50 ticket is resold for $500, one fan goes to one show. If that same ticket is resold for $55, that fan can go to multiple shows. And Eric spoke about the the the wider economic impact of these shows. And if you can get 10 times the attendance by eliminating the the lift in ticket prices, then that's a great thing for the local economy. That means more notes out, more more spending at venues, and more support for local culture. And so the price caps actually redis redistribute demand back into the live into the live ecosystem rather than concentrating it in the hands of just a few professional resellers. Now in terms of seeing price caps worked effectively in multiple jurisdictions, across Australia, where our business is founded, 10% price caps are widely enforced. And despite this, resell remains active and fraud is extremely low, and fans trust the system. And these aren't just our platform policies. They have government legislative protections in major states in Australia, such as New South Wales, Western Australia, South Australia, and then for major events in Victoria. So that covers over 80% of the Australian population. One example is that during the Australian leg of Taylor Swift's Era's Tour, which is basically the largest tour of the decade and the most popular event of all time and everyone's referencing, the Australian consumer competition and consumer commission scam watch only received 273 reports relating to falsely advertised tickets despite total attendance exceeding 600,000 across the seven shows, and there are also millions of people wanting to attend the show. This small number of reports illustrates that strong resale regulation can coexist with very low levels of fraud even in the most extremely high demand event conceivable. For lower demand events, fraud is close to nonexistent, which is which is why very little hard data is published on this matter. Adam spoke at length about The UK and how they are in the process of introducing nationwide bans on the markup of resale tickets. Pixel has been operational in The UK for over five years, and we're experiencing steady growth in the region under the price cap model alongside other marketplaces. From our perspective, as an operator, the combination of a price cap, speculative ticket ban, and the clear enforcement and clear enforcement is what makes this system work. And removing the price cap weakens that framework and enables the very behaviors the rest of the bill is designed to pretend prevent. So what does success look like for Vermont? More fans accessing live events at fair prices. Price capture protects fans without disrupting legitimate resell activity. A resell market that is safe, transparent, and trusted. Stronger local venues and cultural ecosystem, and clear rules that reward responsible operators and deter bad acts bad actors. DCSEL supports this bill because we already operate within these parameters every day. We know that 110% cap is workable, sustainable, and beneficial to fans, artists, and venues alike. On behalf of Tixall, I urge you to pass this legislation and establish a fair, balanced race market in Vermont where ticket where tickets remain what they are meant to be, access to live experience and not vehicles for excessive profit. Thank you for your time and consideration.

[Sen. Alison Clarkson (Chair)]: Thank you, Gracie. Wow. It's great to have, Commonwealth so well represented here in this in this witness today in Vermont. Okay. We have this great group of people. Great resources. Thank you all. Questions. We have people attending from The UK, from Australia via LA, and LA and Rutland. Questions. I have a I have a question which I'm gonna apologize for in advance, which is I understand how you might access resale tickets and how that active market could exist. How do you access the tickets, the original tickets, which I'm a little puzzled by? Are there agreements the Seat Geek, for example, when you used to sell and I know that you're not doing that as much in New York, but as a former theater producer, did the the box office did you have your did your agreement give you know, let you sold were sold x number of tickets that you could then sell? How does how do you how do you have access to the original ticket? How are you able to sell original tickets to a show? To any show?

[Joe Freeman (VP Government Relations, SeatGeek)]: Sure. A big part of Seageek's business is having developed a what we think is a best in class ticketing services software solution. So we install our solution in the box office. We are the engine of whether it's the Broadway Theater, whether it's the Dallas Cowboys, Cleveland Cavaliers, we power the venue box office in a way, know directly head on with Ticketmaster. All the different venues anywhere have some kind of ticketing software system that they use. Some are older, a little more archaic, some are incredibly technologically sophisticated. We like to think ours is a lot closer to the latter, but you're installing a software, a pretty complex ticketing system, into the building to power their ticket sales.

[Sen. Alison Clarkson (Chair)]: So you're embedding that by agreement, by contract with the producer of those shows and with the box office and the owner of that theater?

[Joe Freeman (VP Government Relations, SeatGeek)]: Correct.

[Sen. Alison Clarkson (Chair)]: At venue?

[Joe Freeman (VP Government Relations, SeatGeek)]: Yes.

[Sen. Alison Clarkson (Chair)]: So all of the Thanks. The retail market. How do people How do you advertise to consumers who, like Tom may have bought a ticket and want to resell it, but of course don't want to gouge anyone else with the resale. How do you promote yourself to the resale market?

[Joe Freeman (VP Government Relations, SeatGeek)]: Well, depends whether we're the primary ticketing service provider or not. Typically, in an instance, say, let me give an example of the university, even though we're not the primary ticketing services provider there, we do have the back end integration resale agreement with their primary ticketing company. Had it still been the sports season I could have easily navigated to a SeatGeek link on the university's website that would have been you know labeled to fans or to ticket holders as you know the university authorized channel to do resale. We'll also do standard web advertising, but we've built this company over time by developing a reputation for being a safe secure place to do business. So frankly, one of the reasons we invest so heavily on the primary side is, if we're, for example, the primary ticketing company for the Dallas Cowboys, whatever you're doing in the Dallas Fort Worth Metroplex, you've got some brand association with us being a reliable, trustworthy partner.

[Sen. Alison Clarkson (Chair)]: Great. Eric, and then with

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: Yeah. I'd like to just address a couple of points that are being made here. We're we're talking quite a bit about the idea of these more authorized relationships like mister Freeman is talking about these relationships with with UVM, I believe, was one of the examples he he gave in some Broadway theaters. I think that is one conversation. The conversation that I would like to be having more more and more loudly is the idea that these are individual actors that are using these platforms. Those are the struggles that I think my organization and ones like mine are experiencing with the current growth in the secondary marketplace. It's not the official relationships that mister Freeman is talking that seat geek has with these venues. It's the platform that they have created that allows folks to sell these tickets at exorbitant prices. It's the platform that I struggle with. While I have the floor, may I just say a couple more things? I'll be careful with

[Sen. Alison Clarkson (Chair)]: time We we are pretty much out of time. So a couple more things and that Okay. So If we need to ask you all to come back at another point.

[Eric Mallette (Executive Director, Paramount Theatre, Rutland)]: So real quickly, just to thank you for that. Real quickly, just so the committee understands, I understand, I can appreciate the romanticism behind the idea that how great it is somebody gets to go in and buy a ticket after the show is sold out, as the example is that the gentleman from Seat gave. That show is listed as sold out because the secondary market has swooped in instead on a bunch of tickets and is now selling them for three to four times the price. That $200 example that was shared was an $85 ticket. So I I take exception to the idea that the secondary marketplace is helping folks get to the theater. It's doing the exact opposite. It's it's it's a hindrance. And also, we haven't touched on this a lot, but I think it's important that we do say it out loud at least once. This idea of the speculative market. I I took the liberty of going on, and I'm I'm I'm I'm sorry, Joe. I don't mean to pick on you, but I went on to SeatGeek. Right now, there are dozens of tickets that are listed as available for purchase on your platform. The platform that I hear is is really sort of cutting edge in terms of fraud prevention. There are tickets listed for sale on the platform for two to three times of face value. I went into our system and looked, the tickets that are listed for sale have not been sold from our system yet. So if these major reseller outlets are unable to prevent that sort of speculative, fraudulent heavy behavior, I have no faith that they really are here to protect the consumers.

[Sen. Alison Clarkson (Chair)]: Thank you, Eric. Thank you all. This was terrific. And we may reach out to you for further testimony, but this has really been extremely helpful. Thank you very much as we navigate the shoals of H512 and Shoals and Opportunities. So thank you very much.

[Adam Webb (FanFair Alliance, UK)]: Thank you.

[Sen. Alison Clarkson (Chair)]: And we're going to pivot to our Miscellaneous Alcohol bill. Our Liquor and lottery bill. Our liquor and miscellaneous bills. So thank you very much. We shall see you anon. And to Tucker, Lucy, why don't you come take the seat? And we're gonna pivot to eight 09:21. Our miscellaneous alcoholic beverages bill. What

[Tucker Andersen (Legislative Counsel)]: are your new police?

[Sen. Alison Clarkson (Chair)]: He told you.

[Sen. Thomas Chittenden (Member)]: I call it a booze bill.

[Sen. Alison Clarkson (Chair)]: The booze bill. I think you have any lobbying aspects to it. It's all alcohol.

[Tucker Andersen (Legislative Counsel)]: It's just for breakfast.

[Sen. Alison Clarkson (Chair)]: Liquor. It's all liquor.

[Sen. Kesha Ram Hinsdale (Member)]: Doing great.

[Sen. Alison Clarkson (Chair)]: Welcome, Lucy. It's a it's a big shift. It's for here from tickets to well, actually, it's a. Anyway, welcome.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: For the record, Lieutenant Chimarroville, the Royal Three, the GE President, the Propagas Government Operations and Military Affairs Committee. And here to talk about H921, which relates to alcoholic beverages and proposes to amend various provisions of Title VII relating to the Board of Liberty and Lottery for collection licenses, manufacturers of alcoholic beverages, special events permits, and special venue serving permits. I know you're gonna walk through Tucker, but then I might highlight a couple sections of the bill.

[Sen. Alison Clarkson (Chair)]: You'll give us the overall purpose of the bill, what to if it's a miscellaneous bill, and the sections that you think are most important. Totally.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Yeah, it still comes as a result of some off session conversations between legislators and the Department of Legrandatory, the Brewers Association, the Grape of War and Council, and the Distilled Spirits Council of Vermont to

[Sen. Alison Clarkson (Chair)]: support the industry and also support public safety. I'm aware of that offer, I'm one, so I'm interested to keep the rest of it. Great.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: So I'll jump around a little bit and just highlight a couple of sections. I'll start with section two, which specifies the aggregate total for amounts

[Sen. Alison Clarkson (Chair)]: of

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: a board class licensee and distribute for consumption at a tasting room and retail shop. It also increases the number of workplace licensed locations operated by a licensee that can sell products from other licensed manufacturers to not more than 10. These locations can sell by the unopened container or distribute by glass, malt beverages, minus organic drink spirits beverages produced by other licensed manufacturers. Not more than seven licensed manufacturers of spirits are employed by wines. Yeah.

[Sen. Kesha Ram Hinsdale (Member)]: So I know we should, you

[Sen. Alison Clarkson (Chair)]: know, we'll

[Sen. Kesha Ram Hinsdale (Member)]: get into Tucker. We'll get into with Tucker and Wendy, like, 04:00 licenses. Who's that? What have you accomplished? But could you just tell us, for the record, like, who you heard from and any concerns that were raised or ignored?

[Sen. Alison Clarkson (Chair)]: And then mine has what the fourth class I didn't work case

[Tucker Andersen (Legislative Counsel)]: you all

[Sen. Kesha Ram Hinsdale (Member)]: the way. Yeah. I mean, the learning's like fourth class. I can always hate the numbers. Right. Yeah.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: So the licenses do get a little tricky, but our course class licensed locations are I believe correct me if I'm wrong, if I'm getting this wrong structure, but our retail locations also offer async

[Sen. Alison Clarkson (Chair)]: a system experience.

[Sen. Kesha Ram Hinsdale (Member)]: They so what other licenses do they have?

[Sen. Alison Clarkson (Chair)]: Well, that I'll let them have.

[Sen. Kesha Ram Hinsdale (Member)]: So, right. Yeah. Mean, that's just yeah. One of those ones that's, like, gotta be partnered with a better license.

[Sen. Alison Clarkson (Chair)]: So that came to us a private. What else is a priority?

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Section six, we are looking to include licensed manufacturers and being able to operate up to two licensed establishments that are located at the licensed manufacturing facility or on property that is owned by the licensee and is contiguous with the parts of land on which the licensed manufacturing facility is located. So this would have been parity to our malt manufacturing.

[Sen. Alison Clarkson (Chair)]: So that's aligning, sort of making similar opportunities for the forward-

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Yep, so malt folks already have this allowance. This would also grant its finance. Then within this section, we also allow a licensed manufacturer of malt beverages to distribute an annual total of not more than 3,000 barrels of malt beverages directly directly to holders of first or second class licenses.

[Sen. Alison Clarkson (Chair)]: So, self distribution. Is that also in section six? Yes, subsection G. Got it. Oh, right.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Then within section seven, we are looking two years into the future in some setting, section G of section six, the direct distribution. This is more of a government accountability measure for an electorate to check back in within two years, see how everything's going. Do we need to adjust the barrel number? Do we need to make any adjustments? Sections nine and ten, similar to what I just commented on, this removes the 2026 sunset of the inclusion of retail establishments within the special venue survey permit from Act 156 of 2024. We heard from the Department of Labor and Lottery that they reported no safety concerns of expanding this permit, the special venue survey permit, so looking to keep that within statute.

[Sen. Alison Clarkson (Chair)]: Got it.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: The vote out of committee was eleven-zero-zero. It passed through the floor on 2nd and third meetings on a voice vote, unanimous support, and a puppy that'll let you go through

[Sen. Alison Clarkson (Chair)]: the witness list. That's okay. We'll get it from What's the name of your committee assistant? Nick. Nick. That's right. Nick. We'll we'll get it. Nick. Thank you very much. Terrific. Tia. Okay. Tucker. You wanted to report the mayor? You wanna conclude the end of the table and walk us through this?

[Tucker Andersen (Legislative Counsel)]: I'll come to the end of the table. Sorry. I'm

[Sen. Alison Clarkson (Chair)]: Sorry. Welcome, Tucker. I just wanna remind everybody, we're lucky to have Tucker today. Today is Tucker's last name before his parental leave.

[Tucker Andersen (Legislative Counsel)]: You have the last hour. Because we have

[Sen. Alison Clarkson (Chair)]: the last hour. Actually,

[Sen. Kesha Ram Hinsdale (Member)]: he's You look supposed like you're really slouch of torts. No.

[Sen. Alison Clarkson (Chair)]: It is yeah. And and we have a very modest token of our of our deep esteem and expectation of this. It's charming addition to your threesome. It looks like a bundle or the bundle. It's the right size for a

[Sen. Thomas Chittenden (Member)]: They do.

[Sen. Alison Clarkson (Chair)]: Small baby. No. Baby did not arrive. It's As tomorrow.

[Tucker Andersen (Legislative Counsel)]: Morning. The record, Tucker Andersen Legislative Counsel, you should have in front of you h 09:21. I'll be working off of the as passed by house verging. I will give you an overview of the sections of the bill, and where appropriate, some background in the context of the law in title seven, where these amendments are taking place. And if there are any questions, I'm happy to answer those that I can in the seat, but also provide any research that you need to contextualize what you're dealing with in the context of alcoholic beverage regulation. And I'd also note that the secondary attorney will be covering during my

[Sen. Alison Clarkson (Chair)]: leave by Rebecca Zapacula, Rick Sagal. Rick is going to be covering Linus, all things alcohol related and lottery related. That's right. Great. Glad he's got my back. Great. See, I'm on the back. Yeah, know, we have both. Right.

[Tucker Andersen (Legislative Counsel)]: We will start on section one, under the radar assistant setting for the term line for members of the Board of and Lottery. This amends seven BSA Section 101 to change the term for members of the Board of Liquor and Lottery for over three years. And this was proposed by Vitol? This was proposed, I believe, by the Department of Liquor and Lottery, and

[Sen. Alison Clarkson (Chair)]: was continued Yeah, against so we'll hear from the Commissioner about why they want Introduced by Under

[Tucker Andersen (Legislative Counsel)]: the reader assistant setting for fourth class licenses serving and other license limits, this amends seven BSA section two twenty four related to fourth class licenses, and I'll start with just a description of what this license is and who holds it. Senator Ram Hinsdale brought up that she thought that this is one of those licenses where you have to have another license. That is correct. Fourth class licenses are issued to manufacturers and rectifiers that are licensed in the state of the art, and these are either on premises or satellite tasting locations. There's a limit on the number of licenses that can be issued to an individual manufacturer. There are also serving limitations for how much of a particular type of alcoholic beverage can be served at a fourth class licensed location. It is included in a bundle of licenses that manufacturers are permitted to acquire under Vermont law. Manufacturers are also permitted to acquire first or third class licenses depending on the type of alcohol or beverages they produce to refresh your recollection. First class licenses are on premises consumption licenses that are issued to bars and restaurants. Manufacturers can have a first class license location at their manufacturing site. Third class licenses allow for on premises consumption of spirits and fortified wines, and a manufacturer could hold that, either they're a distiller or a ventured base fortified wines. Manufacturers can also acquire second class licenses, which are licenses for the retail sale of closed containers of alcohol effectiveness. There are a few others that manufacturers require, but I'll leave those off to the side. So that's at least four? Right. So first, second, third, Right. Okay. And so this enables them to do? This amends their fourth class license statute. If you move on to page two, you'll see where the amendments are. It's been increased for specific types of fourth class license locations, the volumes of alcoholic beverages that can be provided to an individual consumer. First, this Subdivision 1 is divided up so that there are specific limitations, those in current law that will apply for farmer's market locations. So I'll walk you through what the current limitations are. Two ounces of all beverages, wine, and beverages, RTDs with a total of eight ounces, and one quarter ounce of spirits per serving, with a total of one ounce for the entire encounter between the consumer and OrthoClox licensee. That's for farmers' permits. Status quo stays in place for farmers' permit applications. At a tasting room and retail shop here at the limits, in Romanette 1, an aggregate total of 16 ounces of malt beverages or hard cider. Romanette 2, an aggregate total of 12 ounces of finest beverages or RTPs, and in Roman Ed III, one quarter ounce of spirits, a fortified bar, is a total of two. So that aligns tasting rooms with Parker's ingredients? It allows the fourth class license holder to serve more of an alcoholic beverage to a consumer at one of these tasting room or retail child locations. Typically, these are going to be satellite locations that are open to I have to check, again, on the contiguous Subsection C, there is an increase in the number of fourth class licensed locations where the manufacturer may serve by the unopened container or distribute by the glass beverages. So, it increases from one to 10. In subdivision A, the number of locations where alcoholic beverages from other manufacturers can be served, that's the university we're working in here, is increased to 10, all beverages, wines, beverages, or RTDs, produced by other licensed manufacturers or rectifiers, and for, in subdivision B, on page three, spirits with fortified wines, produced by not more than seven additional licensed manufacturers. So there's a limit on the number of licenses that can be issued, and the number of locations where the alcoholic beverages produced by other manufacturers can be served at the same co located retail location covered by the board of desk lists.

[Sen. Kesha Ram Hinsdale (Member)]: I think I heard from the chair that it is limited to other manufacturers or rectifiers in Vermont.

[Tucker Andersen (Legislative Counsel)]: That is because manufacturers, licensed manufacturers, manufacturing locations in Vermont.

[Sen. Kesha Ram Hinsdale (Member)]: Okay. So, just want to remind myself that that still that can still get beyond craft market if somebody owns something in Vermont or they combine a lot

[Tucker Andersen (Legislative Counsel)]: of other in a manufacturing location and pull a license from the DLL, then yes.

[Sen. Kesha Ram Hinsdale (Member)]: It's not we we always we're careful about, like, vineyards versus wineries, you know, because one is producing in Vermont. One's not, you a little bit of a nuance there. So Mhmm. Just has no nuance.

[Tucker Andersen (Legislative Counsel)]: This is just whoever has gotten this type of license from DLL, and there's a reason

[Unidentified speaker (introductions segment)]: for that.

[Tucker Andersen (Legislative Counsel)]: Mhmm. And we haven't had an opportunity to spy any biennium to do a deep dive on some of the constitutional scope of alcoholic beverages regulation, but there's a US Supreme Court decision, Grant Olmpey, held that applies the commerce laws of The United States Constitution to alcoholic beverage regulations at the state home. So if you are going to have favorable statutes that call out Vermont licensees, or provide privileges to Vermont licensees in a way that discriminates against out of state producers, you're going to find yourself a fit of a constitutional amendment. Grant won't be held, dealt specifically with interstate sales by shipment, direct to consumer of For wine. Highness beverages. Yeah. But the same principle applies. It's been upheld by a few other decisions since the time Graham Holt was decided, and in fact, the scope of constitutional demands that apply to state level alcohol and beverage regular regulation has broadened. So that manufacturers also are given some First Amendment protections against the twenty first Amendment powers the states over alcoholic beverages.

[Sen. Alison Clarkson (Chair)]: What's the name of the decision again? Grant Holm? Grant Holm. Held. I you could

[Tucker Andersen (Legislative Counsel)]: send the committee along with some memos that legislative counsel, Damian Leonard, produced back when I was a law clerk here, and from what I understand, the committee may also want a primer at some point about Vermont's three d tier system and tied house laws, and maybe Vermont's control state model in general. Of that stuff. Useful. I think it's around pressure. The primers and refreshers that Legge Council has produced.

[Sen. Kesha Ram Hinsdale (Member)]: And I think I think I heard from representative Weeks that House gov ops didn't necessarily talk about Tide House.

[Tucker Andersen (Legislative Counsel)]: That is correct. A lot. It didn't come up in detail.

[Sen. Alison Clarkson (Chair)]: Yeah, that was, I think However, the A lot of people are stuck on some of these things.

[Tucker Andersen (Legislative Counsel)]: The primary materials are were provided to the committee. I don't know that they made it into the testimony of any of the individual witnesses or your diligent hardworking legislative council, but, I did share all of the legislative council's past research, including Danden's lovely and blow chart. That would be Yeah, against the bright snow chart. Used to be on

[Sen. Alison Clarkson (Chair)]: the wall back there. We can put it back up. Print it out.

[Tucker Andersen (Legislative Counsel)]: We'll get somebody to make a poster size. He's right there. Maybe we'll get David to frame it. Okay. We're in subdivision two, page three, line four. A licensed manufacturer or rectifier may submit to a any class licensing. There were constraints, there are constraints in the current version of the fourth class license statute around how many other manufacturers you can feature at a fourth class license location. The amendments that I just walked through before we went on our little Grand Humpy Hill excursion, these amendments expand the number of other manufacturers that can be featured by a fourth class licensee, and it allows any Vermont manufacturer to sell their products to fourth class licensees for those fourth class licensed locations, so it gets rid of the artificial cab. Excuse me. It's very much a real cab, and subdivision too. Section three, the removal of permit specific hours of sale. You may remember during the COVID response that there was the creation of a new permit program for first, second, and third class licensees to sell alcoholic beverages for delivery or curbside pickup. That was codified in seven BSA section two thirty, and it was codified just as it had been developed during the COVID emergency response provisions. And there were specific limitations on the hours of sale for that permit during COVID that made its way into the codified version in seven BSA section two thirty. This repeals those permit specific limitations on the hours of sale, or these programs allowing the sale of alcoholic beverages for all of the premises consumption. Now, that does not open this up to any hour of the day sale, because in seven BSA Section 62, first, second, third, and fourth class licensees all have limits on their hours of sale that are set by a general statute of the system. So now the licensees who get this permit will default back to the hours of sale that govern their underlying license. Under the Reader Assistance heading for conforming revisions, local control requirements, 7DSA two fifty two is amended to include a reference to approval by the local control commissioners. This is being added in because the definition in 7BSA Section two for this type of license states expressly that approval is required under local control commissioners, but somehow that didn't make it into the statute that governs the individual license. So it's brought over here so that both the definition and the statutory section refer to approval by the law. Page four, under the reader assistance setting for the notice period for retail facing permits, seven BSA, section two fifty five, and subdivision A1, the notice period that is required for an applicant to get this retail alcoholic beverage tasting permit, it is decreased from five days to one business day. So the licensee provides one business day of notice to the DLL when pulling this permit.

[Sen. Alison Clarkson (Chair)]: Does that Well, we'll hear from the Commissioner if that gives them enough time to actually process the permit. Anticipated, we'll find the answer to

[Tucker Andersen (Legislative Counsel)]: your question, David, if it's a question for DLL. Alright, under the Reader Assistant setting on line 15, page four, Distribution by Mall Beverage Manufacturers and a 2028 sunset. We're gonna start in the current year, 2026, in seven BSA section two seventy one governing the manufacturer's rectifier's license, and if you move on to page five, adds a new subsection to this section governing the manufacturer's license. It states that a licensed manufacturer of malt beverages specifically may distribute an annual total of not more than 3,000 barrels of the manufacturer's malt beverages directly to holders of first or second class licenses. This subsection has a few details that I'll point out for you. First, this allows for direct distribution just by mall beverage manufacturers, limited by beverage alcohol category. Second, the distribution is going to first or second class licenses. First class licenses, as we cover in bars and restaurants that serve malt or vinous beverages, or ready to drink spirits beverages, and second class licenses, retail locations that sell closed containers for off premises consumption of those would be your grocery stores, gas stations, and other retail alcohol and beverage outlets. One storage. Quickly note for you, that the volume limitation is by barrel. There are many industry terms, and a barrel, I believe, is 51 gallons, so you're looking at, 153,000 gallons if you're doing the volume contribution per check.

[Sen. Alison Clarkson (Chair)]: And maybe this is a question for the commissioner, but why why do we need a limit on that? Why can't it be as much as

[Tucker Andersen (Legislative Counsel)]: you can tell? That is a policy question, and not something for me to answer. Okay.

[Sen. Kesha Ram Hinsdale (Member)]: Another Let's still be here.

[Sen. Alison Clarkson (Chair)]: Yeah, I can listen.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: We've heard testimony from the Vermont Brewers Association that our neighboring states of New Hampshire and Maine also allow self distribution. If I have my notes, I believe Maine has a burial limit of 30,000 and New Hampshire it's 5,000 to 15,000. We originally had the burial limit as 5,000 and the committee, just through testimony, felt like we should do 3,000, but I think it's up

[Sen. Alison Clarkson (Chair)]: near where Sorry, you said Maine is what?

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Maine is 30,000. And

[Tucker Andersen (Legislative Counsel)]: New Hampshire?

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: It is 5,000 to 15,000.

[Sen. Alison Clarkson (Chair)]: 5,000? To 15,000. Oh that's a range. Okay. Thank you.

[Sen. Kesha Ram Hinsdale (Member)]: Do we know anything about New York and Massachusetts?

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: I do not.

[Sen. Alison Clarkson (Chair)]: But maybe Wendy does.

[Sen. Thomas Chittenden (Member)]: You heard testimony from somebody advocating for this?

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: The Vermont Brewers Association. We heard from the association themselves and then also many business owners, so directly from brewers themselves who are advocating for this. And

[Sen. Alison Clarkson (Chair)]: they have been for a lot of them?

[Unidentified speaker (introductions segment)]: Are they in the room just to kind

[Sen. Alison Clarkson (Chair)]: of That's put it right. That's why Jess and Emma. And Emma. Right. Counselors, back to you.

[Tucker Andersen (Legislative Counsel)]: Something to hint here as well, because it came up in the House Committee, they want to get background on it, how Vermont deals with distribution franchises. An entire chapter in Title VII that deals with it. I'm happy to send you some of my notes and summary around it, specifically the franchise statutory provisions that apply

[Sen. Alison Clarkson (Chair)]: to brewers. Right. But we're down to, like, one. Two.

[Sen. Kesha Ram Hinsdale (Member)]: We're down to two distributors. Right. So that's a huge concern.

[Tucker Andersen (Legislative Counsel)]: There are provisions in there if there are current contracts that might be impacted. I obviously don't know what the contract provisions are, but there are statutory remedies that come into play when there's a deviation from some of these franchise contracts, and can they want to eat it rare or want some of those.

[Sen. Kesha Ram Hinsdale (Member)]: This is just rare salt. That's just the because we're having this problem with wine, we're buying this beverages too, partly that hear from There's restaurants that just can't get certain products.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Lucy? If I could just refer to some of the testimony that we heard, just overall, we're seeing a large consolidation of our distributors, and so smaller producers tend not to be the most attractive accounts for the medium to larger distributors that we

[Sen. Kesha Ram Hinsdale (Member)]: have within the state. Did our wineries or vineyards get a chance to say they also were interested?

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: They very much testified on the bill. From my recollection, they did not provide testimony on this section of the bill.

[Sen. Alison Clarkson (Chair)]: Okay. Yep. Great.

[Tucker Andersen (Legislative Counsel)]: For other exceptions, yes. Okay. Alright. Now that we've encored that, we'll go throughout the looking glass.

[Sen. Kesha Ram Hinsdale (Member)]: You and Tom, we'll start a greeting card now.

[Tucker Andersen (Legislative Counsel)]: I'd love to.

[Sen. Alison Clarkson (Chair)]: For cannabis and? In section seven, we're in

[Tucker Andersen (Legislative Counsel)]: the paper. This is the perspective review of that subsection G and E, allowing for direct distribution. And later on, we'll see that this is effective 07/01/2028. Alright.

[Sen. Alison Clarkson (Chair)]: So in section nine So this is and who's supposed to track how it's success so that we can evaluate it

[Tucker Andersen (Legislative Counsel)]: in two years? It's a fantastic question. It is not answered within the four corners of

[Sen. Alison Clarkson (Chair)]: the bill. For instance, so that's also a candidate for us, because how the hell are

[Tucker Andersen (Legislative Counsel)]: we gonna evaluate it if we don't keep track of it? Great. Thanks. In section eight, top of page six, seven BSA Section two seventy five is amended to eliminate the certified check payment requirements for the solicitor's license. So, this had a very specific provision, say, required payment of the license with a certified check. That is repealed. It doesn't require payment.

[Sen. Kesha Ram Hinsdale (Member)]: Didn't you try to do

[Sen. Alison Clarkson (Chair)]: that at the hospital?

[Sen. Kesha Ram Hinsdale (Member)]: I feel like I've tried to put certified checks all the way. No, it was the cash list.

[Sen. Alison Clarkson (Chair)]: I think it was cash list.

[Sen. Kesha Ram Hinsdale (Member)]: I think we addressed cash. Everyone take cash.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Never mind.

[Sen. Alison Clarkson (Chair)]: As long as they don't require penalties because that is gonna be addressed later. Yeah.

[Tucker Andersen (Legislative Counsel)]: All right. We are back in the time machine for sections nine and ten, and this is amending 2024 Act 156, Sections three and four, there is a prospective appeal for a 2035 permit that's set to expire 07/01/2026, and this was the expansion of the special venue serving permit to allow any retail establishment to acquire this permit from TLL. So that's staying in place. I guess, under these terms, the prospective repeal is going away, and those retail establishments will continue to be able to fold venue serving purposes. The special venue serving perspective.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: May I ask

[Sen. Alison Clarkson (Chair)]: Commissioner to? Well, she's gonna come up in a minute, so. I'm gonna speak to all of this, all the questions you've had. Okay. So,

[Tucker Andersen (Legislative Counsel)]: Charmin, let's finish up. Effective dates on the very last page, section 11, sections nine and ten, deletes that 2026 sunset take effect on passage. Section seven takes effect on July 2028. That's the perspective or appeal of the make certain that I use the appropriate term here. The direct distribution in 70 BSA Section two seventy one. And, finally, all other sections take effect on 07/01/2026.

[Sen. Alison Clarkson (Chair)]: And the question mark on the yes. '28. Great. Any questions for Tucker before we turn to the commissioner?

[Sen. Kesha Ram Hinsdale (Member)]: Should leave early. Our last ten hours.

[Sen. Thomas Chittenden (Member)]: What's up with that baby?

[Sen. Alison Clarkson (Chair)]: Here's a piece of candy for you. Good luck. Oh. You're need some rest of it.

[Sen. Kesha Ram Hinsdale (Member)]: Yeah. I'm gonna take a child. A piece of candy. Yeah.

[Sen. Alison Clarkson (Chair)]: Gonna I'm Yeah. Some I'm Yeah. Gonna breakfast. I'm

[Tucker Andersen (Legislative Counsel)]: gonna gonna

[Sen. Alison Clarkson (Chair)]: Yeah. Concise. I hear lots of questions, so Wendy Knight, Commissioner of the Department of the Garden Lottery. Really quickly, a lot of these are technical corrections, so I'll just identify that they're technical corrections. The four year term is such technical correction.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: We're trying to be consistent with the commissioner's term, which is four years, so we'd like the four year Let's get into the fourth class license, and Lucy talked about the reasons why. We talked about this probably two years ago in this committee. Who's on the board right now? I can give you the list.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Okay, yeah. How many people have been?

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: There are five, five Five board Five Five board they rotate Staggered. So, class license, as Tucker laid out, it's for manufacturers. It allows them to have farmer's market permit, is a part of the fourth class license, and a tasting room. So, it's really important for our Vermont manufacturers to be able to have opportunities to introduce their products to out of state tourists that come in, second homeowners, other Vermonters that are traveling around the state, and, it's been challenging for some of the Vermont manufacturers because of inflation, the lack of Canadian visitors, so they are really looking for the opportunity to sell their products and to have out of state forest sample them, than to go home to their home states and ask for stores and distributors to carry them. And it's how they are really able to create brand experiences. If you could go to an eight zero two spirit store, you can find Vermont products, but you're not gonna have the same experience as going to a tasting room of a manufacturer. So, is just for spirits? Nope. You know, I think that was my next question. Yes. Yes. Was gonna ask, this is for mom, spirits, and Venus plus the tasting rooms. All Okay. So, we're trying to expand the opportunity for our manufacturers to be able to introduce their product to others. And so, what we do at the department when we're looking at proposed changes and we're talking to stakeholders, if it looks to help grow the economy and support businesses and doesn't have a negative public safety implication, then we are in favor of it. So everything that you see in this bill, we've given test testimony on in the house that we are in support of what's in this bill.

[Sen. Kesha Ram Hinsdale (Member)]: But you've also talked to businesses that feel negatively impacted by changes to Tide House.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Are no impacts to Tide House here. Is we

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: allowed fear to be? So can

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: I go through because I'm happy to give you an outline, the department can send an outline of Tide House? I wanna be really clear that over the years, we have modified certain provisions in the statute, so there is not a clear tithouse. When we say tithouse, we've already We've incorporated We've already what's the word I wanna use? Obliterated? No. We've already modified that. Modified. Based on various stakeholders and various lobbying groups, we've already allowed that. The fourth class license is a great example. Right? There you go. You have a manufacturer that you're allowed to have a tasting room. We allow first class and second, third class license.

[Sen. Kesha Ram Hinsdale (Member)]: So I'm trying to understand understand this, and I don't think we've done this for fear.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: If I can, I would prefer to just go through the bill and then identify the questions you have and either follow-up because I have a hard stop? Then if you're identifying issues that I don't have time to answer. Will have to will come back. We look forward to having you coming back. So we've got to line 14 on page two. So, yes. So I'm at the so the farmers market sampling sizes stay. Yeah. The ask of the stakeholders is to allow some changes to the fourth glass license. So you're allowing not just sample sizes and be able to buy the bottle, they wanna be able to serve by the glass, right? So I go to a tasting room and I'm only allowed a 2% or two ounce pour, whatever it is. They would like to be able to have someone come to their tasting room and sit down with a board of charcuterie and have a glass of wine or a beer or whatever. The other expansion is right now, you are allowed only one of those tasting room locations where you can have more than your own product. You can have multiple Vermont products, okay, and this again has been designed to allow Vermont manufacturers to introduce their products to tourists and others that are coming through. So that's why the expansion going from one to 10, You have other locations right now, it's only one that you can have your various cider, beer, RTDs, and wine to up to 10. And we landed on 10. That's more than It's more than Hans.

[Sen. Thomas Chittenden (Member)]: Okay. I had that same question.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: I don't know, Lucy, I don't remember how we arrived at I think our department's position was there was no, had no understanding of the right or reason why it was one. It could be unlimited. I think it was testimony in the House Committee that decided to limit 10. Lucy?

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Yeah, we had a recommendation from stakeholders for 10. From state? From stakeholders for 10 here. Okay, so we're starting with that.

[Unidentified speaker (introductions segment)]: Ten's good though.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Okay. So what that means is for those locations, you can have as many per products available for sale in those tasty rooms. The only limitation is for spirits, that you're only allowed through the bill up to seven additional Vermont spirits, right? That's because Is any one taste or no? Correct. And that's because as a control state, Vermont operates eight zero two Spirit stores. The only place you're able to purchase distilled spirits. We have a kiosk bottle where we are opening them up in more tourist locations, ski resorts, and that's a smaller model where it allows mostly top 50 products, but a lot of Vermont products. The average number of Vermont manufacturers that are sold at those kiosk locations is 14. So we came up with, the department came up with seven half of that. In other words, we don't wanna have the ability of a tasting room to compete with a kiosk model, so we've limited the amount of spirits manufacturers that can be sold with those two Okay. 100 This section two thirty, which Tucker talked about, that's a technical correction. We're eliminating the hours here. They were not consistent with the hours that already exist in statutes, Special event permits, that would be oversight. It was never intended to the No, no, sorry, that's another technical correction. Section four is a technical correction. Correct, that's a technical correction because as Tucker pointed out, this particular permit needs local control and that was an omission when we did that. Yeah. Or it wasn't oversight, yeah. Yeah. Yes, we are applying with One Business Day. We do not process our licenses by paper anymore, and checks, and certified checks, and all that nonsense. We actually have an online licensing portal, and we can process them fairly quickly there. I don't think checks are nonsense. Well, I still write checks, but for business people No, no, I get it. We have a much more efficient modernized process which is Which is great. So that was my only concern is what that I was doing to you for

[Sen. Kesha Ram Hinsdale (Member)]: think we should understand the state of consumer protection around best practice because the payments we're hearing a lot about intercepted, you know, our waste management system was the victim of a $3,000,000 interception run a month maple. So we do have to make sure, I think, we're, like, still on top of best consumer practice around what's happening with bot life payments. I I'm sure that you are, but I think it's, like, where the consumer protection committee We are.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Big area of fraud. It is ever growing, sadly. So we should treat your hashtags. So we're now with line four seventy one on page five, line, as Doctor pointed out, we're adding bindings. That's for parity because what we tried to do with this bill is have parity between the different manufacturers. And that's something that I've been advocating for, I don't know, five years now, guess, maybe longer when I was servicing the marketing commissioner. It's always good that the stakeholders, manufacturers work together and not pit one against the other. So this bill, I think, begins to have some parity with what's already allowed. And then that takes us to G? It takes us to the The subdivision? Okay. So, this is something I heard when I was tourism and marketing commissioner from '17 to '19. It's very hard for small brewers to fill the sellers. If they have a small amount of product, they want to be able to self distribute, as you've heard Lucy talk about. This is another example of parity. To your point, Senator Ram Hinsdale, the wineries are already allowed to self distribute. Okay. So this is another example of priority. We don't have a position on whether it's 30,000 barrels or 3,000 barrels. To your point, Madam Chair, you had said why can't it be unlimited? I think Tucker pointed out that there are some franchise laws. I will point out that there's been tremendous consolidation over the last couple years in the wholesale tier, which means Vermont producers have even fewer options to have their products distributed. That's what this is generating this year, is speaking to that constraint that they have and they're not able to sell their product. Because they can't find a distributor. We had a And you don't distribute bulk beverages? We do not. The state does not. And we

[Unidentified speaker (introductions segment)]: have no concern if we go to 30,000 barrels.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: We'll hear from the Yeah, I don't think we're weighing in on that at all. Not sure if we're able to crack crack that. I think we'll hear from So we're your students. Oh, yeah. We just some of these are just technical corrections, solicitor's license, meetings that are gonna be cheap. So section seven is a technical correction on repeal. That would you say? Section seven? Section seven. That I think is the- Randy Virus license that's being repealed. Barrels, thank you. It's the barrel. It's the self distribution. Yes. That's what that is, I self already talked about, it's at $2.75. Some of these are just technical corrections, obviously we don't need a certified check to clean that up. Section two. Sorry, so the top of page six. Yes. The salivary section two seventy five, those are all just technical corrections. Changing to an individual and getting rid of certified check being payable to us. It helps you out got of payments. 254 is the special venue serving permits. It was never the this is an oversight. This is a technical correction as far as I'm concerned because it was never intended to be two years. Remember Alison this deal? Yeah. In part because we were being very specific about what was here, art gallery, retail establishment, museum. And so this eliminates that, sunset. Yeah.

[Sen. Thomas Chittenden (Member)]: So you do this? This

[Sen. Kesha Ram Hinsdale (Member)]: so this is where I this is where I've brought up that I think we are we have legitimate concerns from people who didn't know they couldn't subsume their retail license to sell, for example, Vinix beverages and have a catered event with alcohol on their premises. Right? So

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: This is not for a licensed manufacturer. This is not for a establishment that has an existing license. So I'd like to add that to this bill because this is for a this is for a Right. A business that does not have a license, a standing license to get You a special have an art gallery. You have a museum. You have a bookstore. They wanna have an opening with an author.

[Sen. Kesha Ram Hinsdale (Member)]: Make it a I get it because I wrote this, but we never contemplated that. I don't remember us contemplating that if you were a wine shop with an with an attached venue space that you could not subsume or whatever the word is, put away for the night your retail license so that you could have a consumption event.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Are you talking about the the the bill or the section that you yes. I don't have that in front of me, so I'm happy to check.

[Sen. Kesha Ram Hinsdale (Member)]: But that's where I would put this because I've tried to say to the rest of the committee, don't think we we don't want them to be able to sell alcohol, sell wine as a retailer, and have a an event at the same time, but they could be being used as an event space without any alcohol sales.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: So, what I will say to, we do not allow co located licenses. Okay? Give us an example. We do not allow two different establishments to have their licenses on the same location. So, the licenses are given by a to a to an entity at a certain location. And I can run, you know, run this through you at another time or in a memo. But this is not that. This is an establishment that does not have a liquor license that wants to pull a special venue permit just to have an event. Yeah. I remember I had

[Sen. Kesha Ram Hinsdale (Member)]: forgotten Right. And I would change that just because I I I think DLL I think some of your staff have seen language from attorneys to try and get us the the question of having putting one license away probably the other, which we now are talking about doing for cannabis.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: So all I'm saying here, this year, is we're repealing the sunset. Right. No, I heard had special sunset. That's all I'm saying.

[Sen. Kesha Ram Hinsdale (Member)]: And we can Do you have an opinion on what I'm talking about?

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: I have to I don't have what you're talking about.

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Okay. I'll read then shit.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Know I'll you've mentioned it to me, but I have not read what you have proposed. I will say That was months ago. Yes. Yes.

[Unidentified speaker (introductions segment)]: Here we go.

[Wendy Knight (Commissioner, Vermont Department of Liquor and Lottery)]: Got it. Mhmm. Right, we'll we'll Here I am. We're trying to do is understand what we have in front of So what I am saying is the department does not issue two dip to one location licenses by different entities. And that's what I think what you're speaking about, senator, is we've had some inquiries over the years of of a of a people that are trying to have events and they're wanting to have them in an existing license Licensing. Establishment, and that is a that's that becomes problematic. And so I'm happy to talk about that specific issue. And you're Oh, we hit about a retailer because we do special events all the time. Yeah. Licensees like, you know, resorts and Correct. Yeah. So I mean, what you're talking about is special events at a retailer. This year? No. Not this year. This year, I would love to come back and talk about let's get that proposal to Wendy. Let's reconsider it, and we'll chat about it. That's that's plan. Let's finish on this bill. So this is just repealing the sunset. Okay. Yeah. It was never intended. This language already exists. This is a long standing statute. Right. I think that's it. Right? And then just the date. And then my question for you is on that reveal on the time frame, who's on sections seven on this self delivery?

[Sen. Alison Clarkson (Chair)]: Who's keeping track of how this succeeds or not? The malt who in you don't distribute, but, Jess, who would who do you envision overseeing and keeping track of how successful this distribution is? And if it's working and how it's not working and whether we should be raising the number of barrels. I think that's a question for us. It's you know, we have this sunset in two years. Well, so what are we gonna be reviewing in two years, and who's keeping track of what data do we want? Isn't that just tax policy? I don't think so. I think it's more than

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: Yeah. Think the intention go ahead, Lucy. No, it's mine. I think the intention here with the sunset is we do a housekeeping miscellaneous alcohol bill almost every session or at least once a bicycle. So, the goal here is that if it's not picked up by the legislature, it would be repealed. So, the goal would be to hear from folks within the industry of how is this going, how is it going for the department, or if they have any involvement in it, and just get the folks. And the same thing with

[Sen. Alison Clarkson (Chair)]: the mean, when we set sunsets, we sort of want to know how the program is that we've just enabled. Yeah. And so, makes some sense for somebody to be keeping track of how successful it is, who's how many of our our our manufacturers are taking advantage of this, how they're doing, if they're selling more as a result. And

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: So I guess it's up for consideration if the department or if somebody I would want to do a would just mention that I think this is just a more common feature within some of the bills, maybe just specifically within house government operations that we work on. That's also why you saw the sunset for the inclusion of retail establishments in the special venue serving permits was we had committee members in the last time we did, this was in 2024, two years ago, that they felt uncomfortable expanding that permitting. So they wanted to check back in in two years and

[Sen. Alison Clarkson (Chair)]: see how And things are

[Rep. Lucy Boyden (House Government Operations & Military Affairs Committee)]: so we heard testimony two years later that things are fine, and that's

[Sen. Alison Clarkson (Chair)]: where we're seeing the repeal of this. Okay, great. Anything else with? So all I will say is the department doesn't distribute So we would not be the ones to write any sort of No. Don't want that. We issue permits. We issue licenses. We we can port on that, and we can report on the spirits, like to go cocktail. So Which is fine. There is an association of all producers. Perfect. They are represented by Jess.

[Sen. Kesha Ram Hinsdale (Member)]: So this speaks though too. Right? Like, I had lost track that we had allowed our what I'm understanding is we've allowed our in state finest beverage manufacturers To self distribute. To self distribute. Right. Doesn't necessarily get at all of the concerns are restaurants and consumption license folks have about having only two distributors in the state and being limited to what they will distribute. So that is a concern that I heard is that they might wanna offer very high particular high end wines that they cannot get through the two distributors of the state. But and how and, like, should we understand that problem better?

[Sen. Alison Clarkson (Chair)]: And I would ask that we consider having the Well We'll just get the blindness The Vermont Wine Council. Right. Exactly. We'll get the wine council and the report on their self distribution and Jessica

[Sen. Kesha Ram Hinsdale (Member)]: I mean, I think what they do is is focused on the Vermont industry, whereas I'm talking about

[Sen. Alison Clarkson (Chair)]: we can control. Well,

[Sen. Kesha Ram Hinsdale (Member)]: we we also what we're hearing is that having two distributors also affects our licensees that provide that have cabaret licenses eventually. Don't know what they call it, but at Princeton. So they can't get the particular wines they want to get. No.

[Sen. Alison Clarkson (Chair)]: I'm I'm harried on that, and I'd love to hear the line at the I don't know if it's a wine You would be looking at a a wine It'd like the restaurants association. Correct. Yeah. The restaurants association. Exactly. Talk about their ability to source products. Yeah. Exactly. From the limited. Yeah. That's the constraint. Ability to source Right. And Jess, we may wanna chat about that with the malt association, malt beverage association as well. Okay. Great. Any other thoughts before we did Tucker ugged you and say

[Sen. Kesha Ram Hinsdale (Member)]: I did eat the candy, didn't it?

[Tucker Andersen (Legislative Counsel)]: Yeah. That had to go down.

[Sen. Alison Clarkson (Chair)]: So you Okay. But you had to, yeah, test it, make sure it was still okay. Great.

[Sen. Kesha Ram Hinsdale (Member)]: Then I think we're gonna call it a day. We wish you well, Tucker. We wish your wife well. We wish you I'm worried about Tucker.

[Sen. Alison Clarkson (Chair)]: I'm worried about Tucker too. I'm worried about all three of you. We're not. And Hank is Hank response to having a baby sibling.

[Tucker Andersen (Legislative Counsel)]: He's a champ, I'll

[Sen. Alison Clarkson (Chair)]: reference it. He's a champ. Okay, great. Anyway, thank you everybody for going offline. Wendy, thanks. No good, thank you. Lucy, thank you very much.