Vermont Legislature SmartTranscripts:

[Speaker 0]: We are

[Speaker 1]: live. We are live. And committee, welcome to our crossover suite. We've got a heavy agenda that seems to be getting heavier momentarily. I'm gonna go through these bills as quickly as I can, and I'm going to try and hold us to I failed in the child care bill, but I'm gonna try and hold us to our section of the bill, including to the I voted against in health and welfare and could well. But we're looking at fees for in here. We're going to start with S327, which

[Speaker 2]: is

[Speaker 1]: an act relating to economic development, and Brittany's here to give us a walkthrough.

[Speaker 2]: Good afternoon. Afternoon. Rick Segal with the Office of Legislative Council. So yes, ma'am, I'm Chair S-three 27, enacting the economic developments. I'm gonna share my screen in case you don't want me Okay. So you just mentioned the committee going over the sections that you have jurisdiction over.

[Speaker 1]: No, I do like a 2,000 foot walk Sure.

[Speaker 2]: So this is a bill that there's a few things. There's, I believe, 11 sections, 12 sections. Most of it allocates money

[Speaker 1]: through the This one is going across the hall.

[Speaker 2]: It is. That'll be there at 02:30 if you wanna follow me over there. There are a couple sections that would affect finance of the state, but I will kinda keep the I'll go in order and focus more than ones that directly affect your jurisdiction. Section two is just one of those sections. This is the Vermont Downtown and Village Center Tax Credit Program. The committee recommended of course, it's in statute, that the number be increased from 3,000,000 annually as far as the amount that can be, credited tax credits awarded annually from 3,000,000 to 4,000,000, an increase of 1,000,000 annually.

[Speaker 1]: We have consistently gone up in that, haven't we?

[Speaker 3]: It's been through

[Speaker 2]: so I don't normally handle this as it normally curvy. We communicate about this section, however, my understanding is that it's not been changed at least in the last two, three years since I've

[Speaker 1]: Okay. Maybe, I know for a while during COVID we did some significant increases and then we just kind of pulled back because this is a tax expense. It is generally bank franchise taxes that we do not collect. They end up with prime buyer of these credits. I think insurance companies can also buy them, right?

[Speaker 2]: Not my

[Speaker 1]: That's right.

[Speaker 2]: Not your piece. Sorry. But having your credit, if you'd like to have heard me give you Or maybe even Elle

[Speaker 1]: These are bought by financial institutions that provide the money for the down account development.

[Speaker 2]: It is an economic incentive, right? Development incentive. That's that's the extent I know about, who utilizes it. I also know that it's mostly new stuff every year, that they allocate the full 3,000,000. That's my understanding. So that's the one section that affects your jurisdiction. Section three is all allocations, appropriations, and it's really about small business. I'm sure center appropriations will inform how to handle this, but various amounts are allocated. In this case, you have the Vermont Small Business Law Center. You have the Vermont Small Business Development Center. You have the micro business support through DCAP, the Vermont Community Action Partnership. You have the professionals of color network. Section four is Vocque Gulick, the Vermont Outdoors Recreation Economic Collaborative, another allocation for them to conduct a study that would, provide stated information on how it can better support its $2,100,000,000 outdoor recommendation industry. Section five is the International Business or Trade Office, the Montreal office that ACC East maintains. So it should allocate $150,000 to continue that office's work with Montreal. Section six is Brownfields allocation, 3,000,000 would be allocated for Brownfields remediation and redevelopment.

[Speaker 1]: And this is an allocation, it goes through regularly, if not every year. Is this an increase in the allocation?

[Speaker 2]: So this is structured differently, Madam Chair, this would be money that's not appropriated, money that's already been, it's money already in the account of these agencies. So what's gonna happen is this money will have to come from somewhere, and especially if $3,000,000

[Speaker 1]: So it will come out of something, another program Or this will savings within the agency. Right.

[Speaker 2]: Or money, yeah, will be appropriated in the budget to fund these programs. Fund that. Yes. I

[Speaker 1]: think we should try and get this out today, because I

[Speaker 2]: We're halfway through.

[Speaker 1]: Yeah, I think we're gonna find a challenge across the hall. Section

[Speaker 2]: seven is a study to be conducted by Economic Development and Development of Business Resources and Growth. They're gonna provide the general assembly with methods that businesses can utilize to grow and stay in the state and create jobs, otherwise produce economic development within the state. This one is cost neutral, it's just a study. Okay, section eight is a amending of a task force that was created last year. It's adding one member to the task force, so there's now a eighth member, and increasing their ratings, they've already met the six times, so allowing them to meet up the 14 to complete their work for the rest of the calendar year. The other section that directly confines its jurisdiction is section nine. This is the veggie repealed. So you have a bill on your wall, s t two five, that

[Speaker 1]: has a

[Speaker 4]: bag of mail like that.

[Speaker 1]: Yeah. You didn't take that up because I was told that the same issue was being dealt with in economic development, and if we did it, it would just go there.

[Speaker 2]: So here it is. It's really striking through recession law that was, goes back to 2016, actually, when it was first put into this law.

[Speaker 1]: Well, think we strike through it every

[Speaker 2]: year. I can give you the timeline, 2016, 2022, 2023, 2024. So each year, you either push it back a year, push it back two years. So currently, Veggie is set to, and let me record this correctly, Veggie itself will not be repealed, but Veggie cannot accept new Veggie applications. So, current Veggie award winners will continue They're three fourth year, right, that's a several year program. So, starting January 1, Pepsi could not accept a new Veggie application, so this program is slowly

[Speaker 5]: fizzled up.

[Speaker 2]: So the Economic Development Committee struck through this law, meaning that veggies would live on indefinitely.

[Speaker 1]: They did away with all

[Speaker 6]: the nonsense. But what if

[Speaker 1]: you did that last, three years ago? Sounds familiar.

[Speaker 2]: It was put, this, what you're looking at is what you did.

[Speaker 1]: She tried to do it.

[Speaker 2]: The 01/01/2027 was done a couple years ago.

[Speaker 1]: Yeah. Yeah. I think that was the compromise to keep it from dying. That sounds correct.

[Speaker 2]: Two more sections. Section 10 is another study. This is for the Office of Workforce Strategy and Development, a newer office created last year, that would conduct a study to look into a culinary institute, being established in the state. They would work with stakeholders, private and public, to determine if it's possible. We make sure that

[Speaker 1]: it goes in Montpelier.

[Speaker 2]: That is not English language.

[Speaker 1]: It might be. Montpelier has hurt since nagging clothes. Yeah. Booty. Yes. There

[Speaker 2]: is language that says, one, research suitable office for the location, Madam Chair. Do you want me to change that to Just my food. Requirement here?

[Speaker 1]: I'll think about it.

[Speaker 2]: Okay. Happy to entertain

[Speaker 1]: I'm not sure I've got the votes. I think Chittenden County. As

[Speaker 6]: long as we can satellite.

[Speaker 1]: We're running the antidescence at one point.

[Speaker 3]: National life. Pretty good.

[Speaker 6]: Yeah. So, at some point, can you We could not necessarily be a committee, but I'd like to know what happened at that key because it was there and it wasn't I know why. Senator Clarkson would be glad to have it. Okay.

[Speaker 1]: I think she's very interested. Okay.

[Speaker 2]: I believe it was good.

[Speaker 1]: That's interesting. All right.

[Speaker 2]: That's what I

[Speaker 3]: was told by Senator Clarkson.

[Speaker 1]: Any money attached to this?

[Speaker 2]: No, this is a cost neutral study.

[Speaker 6]: Okay.

[Speaker 2]: How many studies and reports we have there on this bill? Well, we have one more. There are three. There are three. Plus the task force, which is was passed last year. Amending that, I remember adding more meetings. But the third study is this this was a so this was a bill. This is s I'm gonna butcher the bill number. Senator Weeks had it, well, introduced that would have had AOT conduct a study into the 22A options, limited access highway rail.

[Speaker 1]: We can't spin issue for a long time.

[Speaker 2]: So this was a compromise as far as it's getting cost neutral. It is the Vermont Association of Planning and Development Agencies that will conduct the study along with stakeholders that are thinking later that will look at really

[Speaker 5]: Let me speak to this a little bit. If you live in Chittenden County and you go to New York City or Albany, you know 22 A. It's just, it's the trucking route, it's the route taken, it just needs some love, it needs some more passing lanes, it needs some wider shoulders, it just needs more attention. So this is to draw that attention to it, the largest economy of the state, the largest economy in

[Speaker 3]: the country, and that traffic route.

[Speaker 7]: Chittenden's around. Now it's very, very dangerous. Yes. Accident rates, fatality rates, so like, like I And

[Speaker 1]: then you've got Route 7 that's not

[Speaker 5]: You get off Route 7.

[Speaker 7]: Yeah, go on. Okay.

[Speaker 2]: So the study would look at the current conditions of the road, severity, and rate of accidents. That's one. Two, a potential route for a new limited access highway to connect Bromington to Interstate 87 in New York, and the estimated costs associated with constructing such a route. And then three, the feasibility of a rail system that would connect

[Speaker 3]: the two states. Looking

[Speaker 2]: at the two, the rail the rail plan and the freight plan that AOT has.

[Speaker 1]: A

[Speaker 2]: lot of stakeholders, AOT, ANR, I don't like the same word, so land use for the board. Vermont Chamber, Vermont Chamber and the RDCs would be the stakeholders. So, like I said, sections two and nine, Veggie and the down half tax credit, I think, are the two that you would maybe care about. Those would take effect July 1. The only ones taking effect on passage is the Convention Center because they currently exist. That is s three twenty seven.

[Speaker 1]: Questions? Yep. These are not newer issues. I think they it's this committee regularly. I know the downtown's tax credit hits annually. My question, and Patrick is next, is that's a million dollars that won't be collected. It won't be going to the general fund. So before I've Exactly. Given away, I think we should get a report on what is happening across the hall. But because this is money that the downtowns can use all the help they need, and you can use it for flood proofing. But, again, I think it's really small towns like the one we heard about this morning don't have the capacity to even

[Speaker 3]: It does.

[Speaker 1]: Apply to do it for flood proofing. And Yeah. So we will see where that goes. Do we have any questions? Rick, at this Alright. You you guys Okay. Patrick can't be here until 02:00 or later or later. So, we're tenting Tucker are not here. So, let's talk about Veggie Committee. I don't even remember what we did last year with Veggie. We didn't get it out of here. Alright. That is our down that is our business development program. It is close to getting through the state.

[Speaker 5]: I hear it's not really overly utilized, and it's not it doesn't cost us something because it's only money money because it's only given when it's actually earned. But what's most important that I hear about veggies is just when you are an RDC and you're trying to court or attract businesses to invest in the state, we have to have

[Speaker 2]: a veggie program because all of

[Speaker 5]: our neighbors do so that they can at least pursue it. So I'm I'm glad to see that we're, continuing to keep this as part of our state policy to grow our economy. You said you want to kill time,

[Speaker 2]: so I just

[Speaker 7]: want to I

[Speaker 1]: think that's good. I was just wondering if there's anybody have an interest, what would you like to do looking for

[Speaker 3]: what this does?

[Speaker 5]: I was like, you think you wanted a motion, but you wanna wait for Patrick to drop through the downtown.

[Speaker 1]: I I wanna know. Yeah. I'd like to get him. I'm assuming he's tied up in another meeting of the house. Well, you wanna explain how it works. Maybe Rick does. I could try. Or maybe. Okay. Because I I think I've got the latest remuneration. No. That's for the

[Speaker 6]: That would a good program.

[Speaker 1]: Does anyone know?

[Speaker 3]: I know.

[Speaker 2]: Benji or the downtown tax credit?

[Speaker 1]: Should still have all. You got time for the downtown?

[Speaker 2]: I don't know the downtown tax credit. Benji is they're similar in ways because it's deferred tax. So it's I didn't see did did Patrick post the his fiscal note? Okay. I don't wanna walk through because I had nothing to do with it. But in his note, he says the veggie program in 2023 was 2,200,000.0 as far as the incentives that they've handed out. So that's for revenue, right, that veggie is costing the state.

[Speaker 6]: From the general front? That would be in the

[Speaker 2]: general front?

[Speaker 3]: It's Well,

[Speaker 2]: not so this is where I get confused by. It's not money does not get appropriated for Veggie. It is the tax department that is gosh. How do

[Speaker 7]: you add that? Is it credited to its earned? Right.

[Speaker 4]: It's Right. It's

[Speaker 3]: for my brother.

[Speaker 2]: For, yeah, it's the best way I can describe It's not a tax person. That's the best way I can describe it. Okay. And it's you apply to being Veggie, and you have to show famously the blood forward that you're with the money you're getting from Veggie, would not have gotten but for the Veggie application and the Veggie award. So the Pepsi reviews the applications and they either approve it or don't approve it, and then you must show during the three or four years of the award that you are meeting your application. The parameters you set in your application. Either payroll, there's a payroll performance that you can meet. Towards the Capital investment. Investment. Capital

[Speaker 1]: you have to show, but for this, frequently you gotta build something and then you hire people. The theory is, and this has been through more than one iteration since I've been here, that you don't get anything until you actually produce what you say you're going to do. So you start up, you pay your taxes, and there is an algorithm and a computer that this all goes through for the buck for. And the theory is that you hire 20 people, they are paying income tax, they're paying, you know, sales tax, they are putting money into the state coffers. You pay your taxes. When you reach you have then go in and say, we created 15 jobs. Therefore, you get the money you paid in back. So it's a tax credit in that sense.

[Speaker 7]: And that's probably around quite a long time. The major change was somewhere around 2007. Because up to that point, we paid the money out in advance based on the approval of the VEPSI application and their entry into the program. And what we found in a number of cases in years before was that although it was approved that the hiring didn't occur, didn't occur in a timely fashion, something happened to the business. And as a result, we didn't get the money. But what happened is the money had already been paid out and it couldn't go back and easily collect it.

[Speaker 6]: So

[Speaker 7]: the law was changed to say everything had to be after the fact, after we could demonstrate that they did what they said they were going to do, and that jobs or whatever it is that were required were in fact done. Biggest that people had with it is- Because the auditor did an analysis. I don't know if you're

[Speaker 6]: going to speak to that at all,

[Speaker 1]: but I remember a few years back, there

[Speaker 6]: was an analysis done. Sorry, go ahead.

[Speaker 7]: Yeah, well, that's it. The analysis had to show there had to be a damage linked to the but for condition that is placed. Now, some would argue it's very difficult to say that the jobs that were created were the cause of the actions that the company planned to take and did in fact take. And there's always that debate, you can't really prove it effectively other than somewhat subjectively. But you could say, for example, that we wouldn't have light in this room unless we had torn down the building that was blocking the light. But at the same time, you could also say, Yeah, well lightning could obstruct and burn the building down. Anything could have happened. The issue is the building is gone and we have light in this room and so, therefore, we accomplish. So, that again is one of the arguments that But if there are programs like this that you said you can't definitively prove that because you did A, B happened because something else could have happened. And, you know, and we look at right now what happened in Saint Albans, for example, in which the downtown of Saint Albans is so materially different than it was fifteen or twenty years ago. You could have said, like, could have struck, gotten rid of all those old buildings, energized people to go downtown and spend money, and so on. But the point is, it happened, and Veggie did a lot of things that were related to making it happen.

[Speaker 6]: Veggie or Chipp or both? This

[Speaker 7]: was Veggie that I'm talking about now.

[Speaker 1]: In St. Albert. Yeah. Yeah. Okay. I think the best explanation I heard was at an NCSL conference. It was one of those discussions around the table. And the conclusion was every state hates doing this because you can't prove it. I'm investing state money, but every state does it and everybody's afraid to be the first one to say no. The fact is that New York has a lot better incentive programs, including that they target their cheap diagra power to industrial development, which is always an issue with global boundaries.

[Speaker 7]: At the same time, in terms of designing the particular benefit and how it's going to be applied, we have a lot of flexibility in saying, what is the benefit that is needed, for example, to make St. Albans attractive to a business account? You do that by talking to people, by talking to people who want to invest, by talking to and so on, and you develop a plan. And that's essentially what we do. My sense is it's been very, very successful in places that's been used.

[Speaker 1]: I'm gonna give you bets that because the argument with this and yeah. Any kind of downtown tax credit is you wouldn't have gotten the Hampton well, the Hampton Inn would have gone somewhere out in the interstate. Did he go crazy? But you got it downtown. So I really failed to get the Hampton Inn downtown because they were peeled. There's a new hotel going in up at the Berlin Interstate Interchange. So the state, I'm willing to bet, it's a Hampton Inn. State's gonna get its motel and its tax benefits, but the city of Montpelier is not going to get all those residents walking around downtown, eating in the restaurant, shopping in. That money is well, it's probably gonna go to Burlington and Stowe. But the Barry Montpelier areas are not and we do have a lot of short term rentals because there's minimal and almost no really affordable kind of overnight accommodations in the capital city.

[Speaker 3]: Wasn't there going to be one? Then people are not really parted off or

[Speaker 1]: Three people with the backings from an outside person.

[Speaker 6]: So this bill's contemplating raising the tax credits from 3,000,000, 4,000,000. Correct. That yeah. This

[Speaker 1]: one this one is the And this this removes the sunset. Right? Right. So unless we take action after how many years? Almost twenty years, VEGI will continue until unless we take action and say it won't.

[Speaker 7]: Well, then there's nothing that forces us. There's nothing that forces us on an annual basis to allocate any money to that. That is the decision that the legislature makes on an annual basis for whoever else. The point is we don't go back and argue the basis for it for two days of legislative time on something that we repeatedly have renewed every two years or three years for the past thirty years.

[Speaker 1]: And there haven't been issues now with people not producing because if they don't produce, they don't They don't get any money. Yeah, it's a refundable tax credit.

[Speaker 6]: Do we know what the typical annual expenditure is?

[Speaker 7]: It should be in the report that we have from JFO.

[Speaker 1]: It sounds Eric Patrick can't be here until at least two, so we're waiting for that.

[Speaker 2]: His his this one that is on the website.

[Speaker 1]: Yeah. He's on your website.

[Speaker 2]: So the 2023 so there's no there's no appropriation. Right? So it's a 2,200,000.0 effect, the revenue of the state through tax credits.

[Speaker 1]: Okay. But we don't know.

[Speaker 2]: And so there's no cap on it either, right? Some also consider I'm not sure there ever has been a cap. There has been a cap. Okay. So they're not currently in statute?

[Speaker 7]: I don't even remember right now how it's structured today.

[Speaker 3]: It's the income tax credit in Hawaii, how you understand it. Basically, it's for building that's in downtown

[Speaker 1]: downtown or village. The village center.

[Speaker 3]: Village center downtown, designated downtown. If you have a building project that sits facade,

[Speaker 1]: code work It's facade code.

[Speaker 3]: Life safety work. Flood. Yeah. It's flood fees. Blood risk later. Then you apply for a credit. You you you submit your project and then they they select you. It depends on what kind of work you're doing, but it's you get between 2550% of the tax credit towards the cost of the project. You finish the project, you get the tax credit, and the building gets, you know, renovated.

[Speaker 6]: So it could be it's not necessarily new construction, I think. No. It's existing. Not new.

[Speaker 3]: It's existing. That's the re rehabilitation of exist. Yep.

[Speaker 6]: Is that what happened in Saint Jude with that brick building out of the corner? Is that a

[Speaker 7]: Yeah.

[Speaker 3]: There was there was some downtown tax credits in

[Speaker 1]: that building. Yeah.

[Speaker 3]: Yeah. Yeah. So it's it's just a way of somebody doing a project to increase, you know, to make the building better. Yep. And you get a tax credit. It's it's something in lot of cases, it's making that 2nd or 3rd Floor inhabitable. Got You know? Because they need an elevator or they need a sprinkler. Because that's down over

[Speaker 1]: on the shops. Yeah. We had to put an elevator in. Yep. None of those 2nd Floors meet any kind of disabilities ADA. Christopher Mattos

[Speaker 3]: and Caitlin Cork and St. Ann's program, they could come in and show us a return, and the returns are really good. Mean, it's really strong return.

[Speaker 1]: It's a good I think the question is, do we have the money?

[Speaker 3]: To increase it from 3,000,000 to

[Speaker 6]: 4,000,000. Yeah. Well, do we know when the last time was it? It was increased?

[Speaker 3]: It was increased pretty significantly two or three years ago, I think.

[Speaker 1]: It was during COVID. It was Yes. Increased. They

[Speaker 3]: have a more in the end for the program that they've been able to be taken over the gas. Yeah. They'll get it.

[Speaker 5]: So yeah. And they when a project doesn't get approved,

[Speaker 3]: then they come back the next year, and so they evaluate the progress. So can

[Speaker 8]: I ask Yeah? Is this bill doing anything with this besides just getting rid of this? Something about

[Speaker 3]: changes the amount. She's talking about vegetables. You're talking about Oh, yeah.

[Speaker 8]: The sunset. The

[Speaker 3]: downtown tax credit program that increases it from 3,000,000 a

[Speaker 1]: year to 4,000,000. 4,000,000. So this. This

[Speaker 8]: downtown tax credit, these are the tax credits that you can that often get sold to other places? They all

[Speaker 1]: get sold. They all get sold. Okay. They get sold generally. I it's limited. I may be mixing it up because we also do a housing tax credit. They get sold to banks usually. Yeah. They sold

[Speaker 3]: to You've been yourself. You sell

[Speaker 1]: Generally, bank. We added insurance companies. It's so it there's a deferral basically of the bank taxes. But the we get a good they we get cash to put it in downtown. Yeah. Just wanna make sure

[Speaker 8]: I have the right program in my yard.

[Speaker 1]: That's that one. The other one is Veggie, which is basically the state doing a refundable tax credit for agreed upon fund for through the algorithm with the either jobs or capital improvements. Got it. Okay? I'm gonna let

[Speaker 2]: Can I have two updates for you all? Yep. One correction. Let me share my screen so I can show you them. First, with the Downtown Village Center 2020 Act 154, the I think it's the big bill. It was updated from 2,600,000.0 to 3,000,000.

[Speaker 4]: So that was, you know, six

[Speaker 2]: years ago. The other I misspoke earlier about the the cap. Veggie does have a cap. Very end of the Veggie statutes and it's 15,000,000 for the initial awards for each calendar year. So I don't know if they come close to that end and come close in 2023 with the chief of what chief of you.

[Speaker 1]: And the emergency board, I can remember at least once we have opt that if there are there were several sort projects in the works, and I didn't wanna lose one, but there is a cap on it.

[Speaker 2]: Yes. So Subsection b, you can increase it by 5,000,000 if governor applies.

[Speaker 1]: Okay. We need to have come in and talk to us. If they could get someone over here this afternoon, it'd be great. But if not, tomorrow and Rick's already late across the hall.

[Speaker 2]: No. 02:30. I'm I'm good.

[Speaker 1]: Ah, okay. Good. So we're surprised that Venue Inn, downtown tax credits. Do wanna hear from them?

[Speaker 3]: Well, I think what what they can inform us on is how much unmet demand is there. That would be, you know

[Speaker 1]: That's Chris. Backwards. His last name.

[Speaker 3]: Chamberlain Corrigan's or Chris Coffer? Chris Coffer.

[Speaker 1]: Yeah. We manage the program. He's the manager. And we will be happy. And if he could be here

[Speaker 3]: He's usually in the building this time of year.

[Speaker 1]: Yeah. He's pretty smart. He's in this building. Soon as we can get him, the end of the day today. Okay. We're gonna go on and going on to enact the remaining public libraries and the Department of Libraries. And I've got Kent first.

[Speaker 0]: Yes, madam chair. I originally was more tightly scheduled, but I have more flexibility, so if you would like Tucker to go first

[Speaker 1]: You'd probably help us know what you're talking about if we had Tucker go first. Okay.

[Speaker 4]: All right, good afternoon. Attorney Tucker Anderson, Legislative Counsel, how would you like me to proceed? Would you like me to walk through the bill on the screen? Walk

[Speaker 1]: through the bill. Okay. The distance yeah. Just walk through the bill and tell us why we have it. It has to be. There's another one that has to go across the hall. I'm gonna try and get those all out of here.

[Speaker 4]: Alright. Well, I'm gonna be working from draft 3.2 of the Senate Education Committee's strike all, and then this is the report that they voted out in favor. And I will tell you what has happened in each of the sections, but I probably can't tell you why it has ended up here, just because I'm not a member of the censorship.

[Speaker 1]: There's either fee, an implied fee, a possibility of

[Speaker 4]: There's the use of funds, there's no grant programs, is affected by amendments in the bill.

[Speaker 1]: Well, I'm first sure either.

[Speaker 4]: I skipped right through the findings because they're your findings and I never cover them in my testimony because they be accurate. They are on the findings, John. That's okay. Section two establishes Vermont Library's Day is the third Monday in the month of October. Right. Second three, this is one of those grant programs that is effective. And in fact, Senator, were discussing this just this morning, Senate Health and Wellness. This is the Universal After School and Summer Special Fund. And this is where the cannabis sales tax money goes. That is correct.

[Speaker 1]: Okay, as apart from the excise tax, which goes to education, money back and back. That is correct.

[Speaker 4]: Now you've already knew that in my testimony this morning.

[Speaker 3]: Yes. It wasn't from any

[Speaker 4]: specific research.

[Speaker 1]: So this is, the funds that go into this fund come from the cannabis sales tax revenue, and this got very challenging on the floor maybe three years ago because Jane Kitchell was here because that was agreed upon. It took cannabis six years, it took cannabis a long time to go through this body. This was in the law before we changed the sales tax to go into the education fund. So this was seen as an exception to that because it preexisted, but it did cause consternation. Okay. So what's it doing to that fund now?

[Speaker 4]: Well, currently the fund is administered by the Agency of Education and they get recommendations from an advisory committee that's established later on in the section. What the amendments in section three propose to do is to split off some of the funds from or used by the Department of Libraries. So you'll see that the reference to the fund being met just simply by the agency is struck in subsection a, and as we go further down, new language states that 95% of the cannabis sales tax revenue deposited in this fund is to be used by the agency of education, and all of the current programming language is kept exactly the same. In the new subdivision 5% of that revenue that is deposited in the fund will be used by the Department of Libraries to support after school and SARA programs at libraries. And then subdivision three clarifies that all of the current requirements apply to the programs, it will be operated by the agency and the department independently. The other change that takes place is in subsection B, relating to the composition of the advisory committee, and the state librarian is added as a member of the advisory committee.

[Speaker 8]: Chittenden? Yeah, I just wanted you all to know and I I let the chair know earlier. This language has the this the 955% split was put in by the agent or by the Senate Education Committee. The administration is not happy about it. I've been working with Senator Bongartz and Senator Perchlich on an amendment that will hopefully satisfy everybody and make sure that libraries, right now, libraries have never gotten any of this funding even though they've tried to apply and they have provided tons of after school and summer programming. That's kind of their their jam. Here we are. Everybody who has kids have gone to the library probably with their kids in the summer especially but also after school for these programs. And they've tried to apply especially the really small libraries have had a really hard time because the application process is extremely difficult and like it's like a 20 page application and these tiny little libraries that are maybe applying for $1,200 or something. It's really onerous for them. And they've never gotten any of this funding. And so that's, I think, why the education committee came up with the five percent saying, hey, we are just gonna give 5% to libraries and so be it. I think there's concern from the administration that it will set a precedent that everybody's gonna come in on a percentage Yeah. Their own specific percentage. So this was my bill, and senator Chittenden and Gulick are are cosponsors of it. So, trying to come up with compromise that still provides a good path for libraries to apply and get some of this money to support their summer and after school programming but not designate a certain percentage. So Tucker's working on that. It's not ready yet. I I also need to run it through, obviously, Senator Bongards, who's the chair of the education committee, and Senator Perchlegg, who's chair of approves and has done

[Speaker 1]: a lot of work with after school programming or funding it. So Two thirty two boys. Not on my list from the from office as one that has to go approach.

[Speaker 8]: Oh, really? I I think the assumption is that it would go to a probes, but maybe not. It might

[Speaker 1]: be because we got it last week. I don't know.

[Speaker 8]: So I think I think senator Perulick assumes it's coming to his committee because he and I talked this morning and said, oh, we'll just do the he was like, we can just do

[Speaker 1]: the amendment in approves. Okay. And if We check on that before Yeah. We vote it out of here and find out it goes to the floor. Right. Yeah.

[Speaker 8]: That would be good. And I've gotten some suggested language from the administration that I'm, you know, we're try I'm trying to come to something that everyone can live with and that doesn't blow up on the floor, but that library gets some support for the program they've been doing for, like over a

[Speaker 1]: century. Okay, submitting. I don't know why this bill is here, except it, well,

[Speaker 4]: it is changing allocation of tax revenue. And in section four, expanding the use of grants from the early education fund. Fund,

[Speaker 1]: which is tax revenues. So

[Speaker 4]: And at the end, repealing an existing fund, the audio visual revolving fund, which as it turns out, collects money from postage or delivery charges to the department of commission libraries collects when it mails audio visual materials. So that is the

[Speaker 5]: new company replaced.

[Speaker 1]: But not a lot. Yeah. Yeah. Okay. Yeah. I'm I'm sure they did a lot more in the day, but now you just push a button and it goes.

[Speaker 5]: Still relatively new around here, but this seems like it's definitely gonna go to approach. My question is, is your amendment more finance related,

[Speaker 2]: or is it more appropriations related?

[Speaker 8]: I I don't know. I mean, it's I think it's in it's in that section that we just went over, the 955% section. So I don't know if that's more approves or more finance. I can go I can go check-in with the secretary to see if he thinks this bill is gonna go to approves if you

[Speaker 1]: would like, before we Well, we could just send an email up there and ask them if this bill is likely to go to

[Speaker 2]: a price. Okay. And

[Speaker 1]: that works. Okay? And then we could be here. Education took testimony. So our only thing is, is it okay with us? Yeah. And I think that

[Speaker 8]: An amendment, Senator Baumgard's might want to approve his committee. My I don't wanna hold up the bill if it is going to approve. Right. It is going there. If it's not going there, then we should

[Speaker 1]: wait to To make sure the adjustments get made rather than have it go all the way through and end up getting beat up. Area of confidence,

[Speaker 3]: does that cannabis money right now

[Speaker 1]: go through the F Fund? No. Well? It goes to this fund, and I was thinking we would have the Department of Education come in.

[Speaker 3]: Right now it goes directly to

[Speaker 1]: It goes directly to AOE for after school programs and other the idea being that if kids aren't hanging out alone on without anything very interesting to do, they might be more inclined to imbibe in something they shouldn't or get into other forms of mischief. So this it's it's prevention money, and it was part of the discussion, I think, between health and welfare and judiciary probably at the church century.

[Speaker 6]: We're not done with it in health and welfare yet. Plus you know? So Well, I'm in favor for what it's worth.

[Speaker 1]: Not a librarian here. We can we as soon as we get a a response from the secretary, we can decide that nobody sounds like strenuously objects to this and send it on its way if it's going across the hall. If it's not going across the hall, we'll put the amendment on. If possible, I would like to hear from the agency of education as to what they are doing with that money and it's all going out and

[Speaker 8]: They they create a report that I've heard is a lit as clear as mud. Okay. Well, let's see if they can come

[Speaker 1]: here and talk to us and find out where that money is going. I know the school bus from 02:32 traditionally stopped in front of the Kellogg Hubbard Library, and many students did their homework there waiting for their parents to pick them up and take them home. And there was some fixing be sitting going, oh, I'm But there are a lot of programs and they're building some kind of a playground equipment down there. There's no playground in that. No. So they are doing that kind of coverage. Okay. Thank you. I've got these all on for a possible quote.

[Speaker 2]: And

[Speaker 1]: we will do that. Okay. Patrick gave us a let me see. Let's take a 10 break and see.

[Speaker 2]: You want to hear stuff?

[Speaker 8]: I hear from Ted's, please.

[Speaker 1]: Wait. Ted. Yes.

[Speaker 5]: Oh, I didn't want your pet.

[Speaker 0]: I appreciate that.

[Speaker 1]: I'm skipping down.

[Speaker 3]: It's easy to remember.

[Speaker 2]: Yeah. I don't know how to enforce it.

[Speaker 1]: Simply be referred to appropriations. Okay. We have it will likely be referred to appropriations. Oh.

[Speaker 8]: That's what that's what he said,

[Speaker 1]: like That's what Melissa said. After the bill is put out of finances and is on the notes calendar, yes, it will likely be referred to appropriations. Which means if we can vote it out, if something goes wrong, we can do a floor amendment. Yes. Okay.

[Speaker 8]: Yeah, we can hold all of those cards, but I mean, I have the word of the chair across the hall that he will work on it, with us on it. But if

[Speaker 1]: he doesn't get it. Right.

[Speaker 8]: If he doesn't get it, then

[Speaker 1]: we will. She'll be a little more say it was our understanding that we were getting it over there ASAP. Okay. So, Ted.

[Speaker 0]: Yes. I am

[Speaker 1]: This is libraries.

[Speaker 0]: District office. I it is libraries. I'm waiting to hop into Zoom or that's fine. It's mostly my main piece in this will be giving you all a picture of the universe of cannabis sales tax revenues and how the 955% split would work. So that context may be helpful for you all just in general I'm finance only.

[Speaker 6]: And follow-up questions before you even start. So because I'm still trying to understand this. The sales tax is completely separate bucket from the excise tax. Correct.

[Speaker 0]: Yes, and it flows into the universal after school and summer special fund. Which? The sales tax. Sales tax. Got it. That is administered by the agency of education to provide grants to programs. They I will defer to them on how they administer it, but they do have a report that I emailed to Charlotte that she will post on the web page to provide context on the number of recipients, how much money they've gotten. From what I understand, they pick, they award to a certain number a cohort each year, and that cohort receives funding for multiple years.

[Speaker 6]: And the excise tax goes to the substance misuse prevention fund?

[Speaker 0]: 30% of it.

[Speaker 6]: 30% of it.

[Speaker 0]: The remaining 70% goes to the general

[Speaker 3]: fund. The cannabis control board gets funded out of It

[Speaker 0]: is, starting this year, it is receiving a general fund of Previously, money was routed to the the the fund, and then they were the balance from the regulation fund. It's the chart. Sure. Yes. It is that's been a moving certainly, you've grown over the years.

[Speaker 5]: On that point, how much in the x side how much are we taking in an excise funds and then versus the sales fund of cannabis?

[Speaker 0]: Sure. So in fiscal year twenty seven, I am saying this off the top of my head, but I believe the consensus revenue forecast had 23,600,000.0 in excise tax revenue. And then in this table here, if you do the math to apply that to the 6% sales tax, that's estimated at slightly north of $10,000,000 in sales tax revenue for fiscal year twenty seven. Thank you. Broadly speaking, while we're here talking about cannabis tax, we'll note that for the market has reached something approximating maturity. So we're not seeing compared to previous years where tax collections were really ramping as more retailers were coming online, the market was building out. We're really expecting this thing to pace along something more akin to inflation or some sort of a a lower growth rate compared to what it's been. Yes. And you will see soon coming to this committee a bill where we could talk quite a bit more about Canvas tax revenues because there are quite a few policy changes within the market. So, yeah, this table shows if the 955% split were to be maintained, that is proposed in the bill, the Department of Libraries would be able to use about $500,000 per year for programming that, you know, back to school and summer programming, and that would be the balance for grants in the agency of education. As Tucker the other two pieces, as Tucker noted, we did try and track down the grants that are referred to in the bill. I will say folks at JFO don't have experience with them. We had read about the education or we're waiting on information on these grants are voluntary. It's unclear the volume how much is going out to folks, but would note to the extent the agency of education doesn't make grants to this program. If they've allocated or decided a certain amount of funds, they're available with your grants with increase competition, but these grants are voluntary, so it's unclear whether there's a fiscal impact here. And then, yes, the repeal of the audiovisual revolving fund testimony that I saw in other committee written testimony referred to the fund as no longer relevant.

[Speaker 1]: Can I ask a question? What what do you

[Speaker 6]: mean by to the extent that these

[Speaker 8]: grants are voluntary? What do what do you

[Speaker 0]: think of that? So within statute, the grants are voluntary, so we're not sure what extent the agency of education is actually administering this program. We're gonna get more information from AOE, and I'll provide it to you all in terms of how much funding actually

[Speaker 8]: I mean, they've been working on this bill since the beginning of the session. They don't have this information yet? I know that the committee has asked for it.

[Speaker 0]: We had not we asked more recently. I don't wanna so it, you know, been a day or so, so I don't wanna put them under the gun. But I yeah. In terms of conversation, screen, I'm not sure. But I'm happy to follow-up once we get information on the scale of this grant program. Yes. But we within our on the legislative side and staff offices, we

[Speaker 8]: And they also, according to statute, the department can use $500,000 of the grant or administration technical assistance. So they that's and are they used to know if they're using it for that?

[Speaker 0]: You're referring to within the universal, yes, after school and summer program? Yeah. I'm not sure. I would refer to the administration.

[Speaker 8]: That's also a lot of money to use to administer a grant program of this size.

[Speaker 1]: It's Well, we can have them in. If the bill's gonna sit here, we will have them in to talk to us. That would be good. Okay. So I will try and get them in for and then Okay. This week. Any questions for Ted? That we've got what the breakout would be.

[Speaker 5]: This is can you normalize this notion of 5% of a chunk of things going to one thing? Does that do

[Speaker 0]: we do that commonly? The best example is the property transfer tax. Okay. Yes. Although those statutory percentages are not withstood, the current structure in the budget is roughly reflective of those statutory allocations where the general fund receives 37%, the housing and conservation trust fund receives 50%, and the municipal and regional planning and resilience fund receives 13%. And those are the statutory allocations. For a long time, the actual allocations were different. The general fund received more than their statutory allocations, but as with the changes in act one eighty one, as the real estate market has picked up, current budgetary allocations are similar to that statutory contract. That's the best thing in line of.

[Speaker 1]: Homes and meals, purchased in use. Yes. They all

[Speaker 5]: Is your compromise language attempting to make it easier for libraries to get access to this money to streamline the process so they don't have to fill out plain pages?

[Speaker 8]: Yeah, mean there's part of

[Speaker 1]: the language is the requirement they come up with a

[Speaker 8]: shorter application for small, not just libraries, but small organizations in general.

[Speaker 5]: Yeah. Library as well.

[Speaker 8]: I would love to do that, but if my it adds libraries in the next, I think, and I would love to. I mean, I'm fine with 5% language. I like it because it guarantees libraries the money and they have gotten done. But, yeah, I don't want say too much about it because it hasn't gone through

[Speaker 1]: to the, you know, still working on it.

[Speaker 8]: Exactly. It's still a work in progress.

[Speaker 6]: It's a shame when people work My patients become a barrier to access. Let's do that. Yeah. Okay.

[Speaker 1]: Who can we get? She can be on Zoom at 02:45. At 02:45. That's And that's, okay, on 03:27, that's economic development. Okay. That's the type tax. Why don't

[Speaker 2]: we