Vermont Legislature SmartTranscripts:

[Sen. Ann Cummings, Chair, Senate Finance Committee]: We are alive. We are alive. And today, I have been assured that the miscellaneous tax bill will be voted out of appropriations without meddling in our jurisdiction? Now once they do that, we will vote out the budget without meddling in their jurisdiction. We'll see how well that works. So we are gonna start with miscellaneous tax. Administrator alright. We have already voted that out, but Rebecca no. We can hear you. Okay. You had you had some concerns about something in this Yeah. Well, I'm gonna talk about a a timing. What I understood. Because this will have to be a floor of it. Sure.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: Yeah. Happy to kick us off by the Sam Brown, deputy commissioner. This is my first time wearing my full go to legislature vest.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yeah. Is cool. Good to see her. Wow. We do. We launch your Yeah,

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: so one of the components in the miscellaneous tax bill that's kind of brought into this conformity package is a policy to decouple from the federal like, some preferential federal treatment for qualified small business stock. Yes. At the federal level, this is, like, up to traditional previously up to 10,000,000, but now expanded by ATAR one. Up to $15,000,000 can be excluded at the federal level if you hold stock that meets, like, certain criteria. This exclusion is taken by entrepreneurs, founders, early investors, and companies that speak to a small business, which I think is like 75,000,000 or smaller, is the federal measure for small. And that was also increased by HR one, the One Big Beautiful Bill Act. And so the the pack the conformity package in the miscellaneous tax bill decouples from the federal this federal treatment, but goes further than just decoupling from the expansion in HR one. It actually decouples from the entire underlying treatment. So this federally excluded income will become taxable in Vermont, you know, when the state comes law. Right. The timing of that change was kind of packaged with all the conformity stuff as retroactive to tax year '25. This is a and I think the retroactive timing for much of the conformity package just makes a lot of sense because you wanna, you know, kind of provide a smooth experience for taxpayers, for the department. It, like, makes a lot of sense in in most cases. But this is, like, something new. It's kind of like a a new for Vermont policy, it's not really part of like, goes beyond just the conformity discussion. And for for many reasons, but, you know, administratively, for sure, I think it'd be really beneficial to have this start a little more prospectively for tax year '26. I I'll acknowledge that this is still a little retroactive because we're in the middle of tax year '26 right now, but no one's filed a return yet. You know? Mhmm. Whereas tax year '25, you know, the the filing date's already passed for for timely filed returns and payments too. So that's, you know, it's like deep, deep way in the past retroactive provisions. So so administrative and and the reason why I'm bringing this up now, despite all the, you know, kind of, like, intersecting fiscal impacts is because, you know, because of some weird timing with the dynamics of this retroactive provision, this could actually be implemented for tax year '26 without changing the fiscal note. This is I mean, we have Pat here who can say more about the why, but I think the the fiscal note was actually done pretty thoughtfully and correctly acknowledging that, you know, we have a big retroactive tax change like this, which I believe that it this is gonna in the first year of implementation, we've raised about $2,400,000, just decoupling from the qualified small business stock. If this happens, if this, you know, continues to be a retroactive provision for tax year '25, the tax year that's passed, You know, we've already gone through the April filing deadline with, you the taxpayers, you know, knowing that this this activity would retroactively be taxable. And so, you know, when when this becomes law, we're talking, like, maybe, like, a matter of, like, six weeks or something before the fiscal year changes. So we're not gonna you know, realistically, the taxpayers and the department aren't gonna be able to, like, magically realize all this income. It's gonna take a little digging for the first year, certainly in a in a retroactive first year. So because the revenue is booked that way and it's not booked until fiscal twenty seven, we actually we could move the implementation of this policy to tax year '26. And with the benefits being giving taxpayers a heads up, you know, that this is coming, giving our department time to actually, like, map the federal fields to let us administer this cleanly, it's a very it'd be a very manual process for us to track down this tax year '25 money. And I should say that generally, or two and three years after any given tax year, we get really solid, comprehensive data from the IRS that lets us do a number of automated audit and compliance programs. This would get scooped up in that. No problem. But that's two and three years down the road. For an implementation in tax year '26, we could actually be a little more proactive and make sure we have the federal return fields mapped, which means that, like, when we get an electronic submission of a federal return along with our state return, we can we can, in our system, you know, proactively do the development work to to map those fields and actually proactively create some return rules. So, like, once a return comes in the door, our system's checking, oh, did you have this qualified small business stock income? Is it being reported on the proper Vermont form line? If not, you know, we can kick it back or have a a taxpayer services colleague do an adjustment. Thanks, Rebecca. I'm following your argument,

[Sen. Ann Cummings, Chair, Senate Finance Committee]: but I'm not following which part of the bill. Is there a draft? Oh, think this this is couple. So

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: let me look at our our colleagues here.

[Sen. Randy Brock, Member, Senate Finance Committee]: Section 55.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Section 55. And Oh, it's one of the really long just the things that just references federal law?

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: It's the one that references federal law at section 12 o two's. Okay.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: So bad. Oh. And mean,

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I guess it's the question for Pat. But this doesn't have a fiscal impact.

[Pat Davidson, Joint Fiscal Office]: Pat Davidson, Joint Fiscal Office. Think Rebecca talked through some of the cash flow and how they would actually need to go about recouping this money if it's not, you know, if we don't adjust so if we don't adjust the effective date, how they actually go about collecting it, you know, just looking at the calendar.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Uh-huh. So what the way it is in the bill right now is it's supposed to take effect for tax year '25, which basically happened two weeks ago or whatever. And your proposal is to make it for tax year '26, which would be this year, but next April. Right.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: Right. When most of it's due. I mean, my my feeble held dream would be for their magically to, like, emerge $2,400,000 from out elsewhere so we can stay linked up to the federal code

[Sen. Ann Cummings, Chair, Senate Finance Committee]: in this space. Yeah. Deeper dream.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: But Okay. It's more of like a medium dream medium level dream of mine, but I'm I

[Sen. Ann Cummings, Chair, Senate Finance Committee]: think I'm coming coming with a

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: reasonable administrative proposal, you know, assuming that that policy decision has been made by this body and this committee, you know, you passed this out already.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: But it it would have a 2,400,000 impact? No. That's what I'm gonna do.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: No. Sorry. That was that if you eliminate it.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: If you have a lot of this day, stay linked up to the Fed Oh, I see. Always our preference. Okay. But given that we are decoupling, it would just it would not have

[Pat Davidson, Joint Fiscal Office]: Like like, practically speaking, this will result in less revenue being collected for sales that happened in that calendar year. The reason it's not changing what's in the note there is, you know, I think with the system that the department currently has in place, it certainly would have been going to be a big lift, and by all intents and purposes, maybe not quite totally possible to be comprehensive about, you know, up in compliance with it. And just to know, when I say compliance, it's not willful noncompliance. It's more of an educational thing. Rebecca talked a little bit about the audit information we'll get later on. There's not a practical way to think about spreading that money we're not anticipating to come this year, this fiscal year, over the next few years. So, when looking at the note, it does, in some ways, represent somewhat of a conservative estimate. With the thinking about when this money would actually technically come in, we have no good way of saying, and also no way of knowing how close to 100% compliance you get to. For lot of those reasons, it doesn't change the tables in the fiscal note. It doesn't change sort of how this construct with all the interconnectedness between the budget and the T bill and the Ed fund. So when you're thinking about this change from that perspective, this effective date change would not affect that construct.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Because the line in your table, table two in your in your Yes. You have this memorized, I'm sure, Pat. Table two, it's decoupled from qualified business stock gain exclusion. That's one that I have. Yep. And it's $2,800,000 have it booked at one point seven. Why it

[Joe Valenti, Director of Policy, Department of Financial Regulation]: doesn't happen.

[Pat Davidson, Joint Fiscal Office]: This effective date moving forward one year, which also allows time to set up the system, that's when we sort of felt more comfortable that we'd actually start seeing revenue that we

[Sen. Ann Cummings, Chair, Senate Finance Committee]: could potentially count on. Got it. Okay. I think that was helpful. In actuality, all of these numbers are estimates.

[Pat Davidson, Joint Fiscal Office]: That's absolutely true.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I mean, depending on the markets and what's going on, we could be right up the money, we could be way high or way even low, and we won't know, like most tax revenues, what it's going to be. It's an informed estimate.

[Pat Davidson, Joint Fiscal Office]: And practically speaking, it's gonna be applying to a very small number of tax barriers, so there's gonna be some inherent vulnerability from that perspective.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: And Senator Chittenden, this answers It does. Concern of your constituents. Okay. Any questions? This will have to be a floor amendment because we don't have this. Okay. So I need to get that drafted, and then I can yeah. I'm presenting the bill so I can present this floor amendment. And then can you go straw poll? Is there anyone opposed to doing this? Okay. No one's opposed to. The backrestrial. And I'll just present it on the floor and say you've heard it before.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: I really appreciate that.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yes. It's a technical fix that will allow the tax department to function sanity and allow the taxpayers

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: to comply without having to go back to the last year. Yeah, my expectation is this will feel much more fair also from a taxpayer perspective. Mean, understand we're already in the middle of 2026, and folks may have already made some decisions, but, you know, 2025 being completely over and into having the tax book closed. We're deeply retroactive than I think necessary in this case.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: So it's okay. Thanks. Thank you.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: I really appreciate that, and I'll be standing by and request to do that, and we'll be members have before that.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I was just told has come out

[Sen. Randy Brock, Member, Senate Finance Committee]: Miscellaneous tax.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Miscellaneous tax. Miscellaneous tax. We should never do those two bills together. Miscellaneous tax is out of appropriations without Unaltered. Unaltered. So that means it'll be on notice tomorrow and on the floor the presentation on Tuesday. So if I can get an updated section by section and an amendment, I will greatly appreciate it. It will go forward. Okay. Thank you. Alright. We are going back to 09:40. Yeah. Okay. We do have the appropriations bill on. I am sorry. So we will keep going. We are going back to the transportation bill. And we have Jeff Jeff. Jeff is here. Okay. One of the other add ons. That I don't know if senator had asked him since he made the amendments to add this on. Yes. Basically, he said he could tell us why he added it, but not why it might be a good idea. So we we are just trying to get some information. This was apparently added on late in the game. And the floor is yours. Just introduce yourself to the record and tell us who you've represented. Absolutely.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: I thank you all for your time today. I did prepare remarks and I shared it with the committee assistance. So you should have it. I'm gonna read those through these and then answer any questions that you might have. Chairman Cummings and members of

[Pat Davidson, Joint Fiscal Office]: the Senate Finance Committee, good

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: afternoon, my name is Jeff Bartley. I'm the Director of Innovation and Marketing at the Patrick Leahy Grocery International Airport. In addition to Innovation and Marketing, I handle airline negotiations and business development at the airport as well. I do want to start by saying sincerely, we are grateful for this committee, the transportation committees, the administration, the agency of transportation, and all members of the general assembly, particularly one from Fairfax, who is my wife. The collaborative spirit amongst all of us matters. It is part of what makes the Vermont aviation industry successful. It is in that spirit of why I'm here today. We are not just here as partners and joint stewards of travel, transportation, and tourism in Vermont. We are here because we care deeply about getting this right and because we believe Vermont's aviation future is a shared interest. In summary, we want to be a part of the solution. What what we are asking for today is simply that the Senate Finance Committee remove the 2% jet fuel surcharge from H-nine 44 because we believe this particular mechanism added without industry input carries meaningful risk to our airport success, growth and momentum. I wanna begin my notes with good news because I think it's important for the context with everything that I'm gonna say. Lehi VTV is not just an airport. It's an economic engine for the entire state. Our most recent economic impact assessment tells a remarkable story of growth. Since 2018, we have seen a 14.4% increase in total jobs supported by the airport, bringing that total of 5,645 for monitors whose livelihoods are tied to aviation at our airport. Total payroll has grown by 91% to 325,400,000 in annual income. The combined airport regional value included economic output and existing replacement value now stands at $1,900,000,000 or 80% increase in over eight years. Annually, we generate 1,000,000,000 in economic outputs and the state and local taxes generated by the airport have grown 81% from 34,500,000 in 2018 to 62,500,000 today. That growth is not accidental. It is the result of strategic investments, partnerships, entrepreneurial drive, and commitment to meeting the evolving demands of Vermont's economy and tourism sector. That foundation, that is a foundation we are building on and the foundation that is genuinely genuinely at risk if we make Vermont a significantly more expensive fuel market as it relates to aviation. In late March, we opened a new terminal, a transformational upgrade that has been years in the making, funded in large part by a $34,000,000 congressional allocation. The new terminal includes four new jet bridges that can accommodate larger aircraft, significantly expanded passenger waiting areas, and providing modern amenities. And it was built, and we're very proud about this, built with sustainability in mind. Mass timber, geothermal is heating and cooling the building, and future solar arrays are part of this project as well. NPR ran a national story covering the opening just three weeks ago, noting that Lathie BTV is actively positioning itself attract a greater share of our regional market or catchment area. Currently, only half of those travelers choose Burlington, meaning 1,500,000 flyers are still choosing other airports. Our goal is to change that. We want our local dollars to stay local. We are actively engaged in conversations with approximately a dozen airlines about expanding service. And this summer, we will reach the second highest level of commercial service at Lahey BTV. And we now have more direct flights than at any point in our airport's history with 19 destinations, including Atlanta, Charleston, Charlotte, Chicago, Detroit, Denver, Fort Myers, Minneapolis, New York, JFK, LaGuardia, Orlando, Philadelphia, Raleigh, Durham, Tampa, Washington DC, and Washington Dulles, and starting May 23, new nonstop service on United to Houston, and there is more to come. I'll add a national context for small hub airports like ours has rarely been more favorable. Large hub airports face growing congestions, a shortage of air traffic controllers, and projections of continued passenger growth still, all of which will create an opening for a well positioned smaller airport like ours to attract more service. Aviation analysts have noted that airlines build networks to serve the most profitable routes, of course, which means enticing airlines to spread their routes to smaller hubs is not an easy sell. It requires Vermont to be competitive on every metric that airlines evaluate. Cost, especially related to commodities, is one of the most important metrics. The FAA projects activity at large hub airports will still grow at about twice twice as fast as small hub airports over the next two decades. Even as those hubs face real congestions and the shortages, that creates an opening for airport like ours. We're not just a Vermont story. We're part of a national conversation about how small airports can take pressure off of places like Boston, who we currently lose about 35% of our market to still, and carry more of the load. The demand is there and it is not going away. The aviation industry is dynamic and highly competitive. As we manage the second busiest airfield in New England in terms of operations, we are also working to meet the needs of our region's business tourism economy and general aviation community. As amended, this bill would add a permanent 2% surcharge on jet fuel on top of Vermont's existing 6% sales tax and South Burlington's 1% local auction tax. At Leahy BTV, that would mean the total tax rate on aviation jet fuel would be 9%. It would make it the third highest in the nation. This is in addition to the region already having the highest average price per gallon in the country on Jet A 100 LL and SAF, which is sustainable aviation fuel, which we are very proud that we were the first airport in New England to have. For more context, Maine taxes jet fuel at about 4¢ a gallon. New Hampshire and New York are each around half a penny. Some states don't tax at all. We will be less competitive with such high fuel costs. That gap matters because aviation fuel demand is price sensitive. Airline and operators compare fuel costs across markets, and when prices diverge, they adjust, sometimes by tankering, which is carrying extra fuel specifically to avoid buying at expensive locations or, in some cases, not transporting the fuels to late EV TV at all. A higher rate applied to a shrinking volume base doesn't necessarily produce more revenue. It can produce less. Last year, just over 2,000,000 was collected in jet fuel taxes, down from 2,700,000 in 2022, telling a story about global fuel prices normalizing after an unusually high period, not about declining activity. As I stated, employments and the size of aircraft have never been more stable at Lady BTV and they're growing. Case in point, last October, we had over 160,000 passengers total come and go through Lady BTV. We have never hit that mark before in any month in the history of the airport. It was a 6% growth year over year, and we are now projecting the second busiest year out of Lake EBTV in our history. This new task, it risks the momentum and growth we are seeing at Lake EBTV because this proposed surcharge is substantially targeted at the APTV users, passengers, airlines, and general aviation. We do find it unfair to continue to tax our users to offset the cost of the transportation bill. Additionally, a vast majority would end up the vast majority who end up bearing the final burden of the tax will not be users of the other state airports that will not benefit from this. There's also something worth understanding about this tax, how this tax actually flows. The legal taxpayer isn't the airline. It's the fuel distributor upstream in the supply chain. By the time fuel reaches the airport, the tax is already embedded in the price. Airlines pay it, but indirectly, and then it is passed on to the end user, the passenger. Operationally and in most cases, the FBO is not selling the fuel itself, they are providing into plane service. The airline typically owns the fuel through its own supplier contract, and then, in our case, Heritage Aviation, charges a service fee for handling, storage, and delivery. The tax and the FPO service component are entirely separate. We now know Vermont receives between 2 and 3,000,000 annually in aviation fuel tax revenue, depending on the cost of the fuel. A lion's share of that revenue is generated at Lady BTB. Yet our annual state appropriation is capped at $500,000 These funds are vital and we deeply we are deeply grateful for the state's investment. We are not asking for an increase in the cap at this time, but we have made transportation committees in the House and the Senate aware that in the future we will be advocating for an increase. However, as requested in February in the House Transportation and mentioned in the Senate Transportation Committee yesterday, we respectfully request that the committee ensure this allocation is not restricted solely to capital matching grants as part of the airport improvement program or AIP entitlement funds, but instead adjust the statute to align with federal statute, specifically 49 US Code section forty seven thousand one thirty three, that allows funds to be used for either capital or operating costs at the airport. Why is this critical? We are allowed to pay the AIP entitlement funds, and we may not draw down on the appropriation for a couple of years. The reason for this is we are planning a very large environmental protection project that will allow us to recycle the glycol, the de icing chemicals on the airplanes, and we'll recycle it and we'll be able to reuse it. This additional burden placed on us by the state, as we understand it, occurred as part of the 2018 transportation bill. As far as we can tell, no other appropriation from aviation jet fuel revenues in Vermont are as restrictive as they are at our airports. We are strongly advocating for legislative language that removes the restriction, and it is our interpretation that if we do not if we do bank the AIP entitlement funds as allowed, the state would not appropriate the $500,000 reinvestment from the aviation jet fuel taxes generated at our airport. In conclusion, this simple two percent surcharge that is believed to be able to generate 600,000 a year is not simple. It's not guaranteed to generate more revenue. It might cost less revenue for various reasons outlined above. H nine forty four would direct the revenue to the state transportation aviation related infrastructure. While it's not clear whether that revenue will be used what that revenue will be used for and who ultimately is responsible for paying for the tax, including the passengers. We respectfully ask that you remove the aviation fuel charge language. I understand the Senate Transportation Committee is moving forward with an amendment on the floor. We do feel it is better to resolve these things in committee, though, which is why I'm here. And more broadly, we want to be in these conversations earlier. In the future, if there are ideas about how to fund transportation, give us a call. We'll show up. Our goal is simple, to ensure that the Vermont's primary aviation gateway has the flexibility and support necessary to continue driving economic growth, supporting thousands of jobs, and connecting our state to the world. Vermont Aviation is in a great place right now, and we'd love to keep it that way. So thank you, and I'm happy to answer any questions.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Any questions? I do have a question. It's not necessarily related exactly to this, but I heard this morning actually that the federal administration's cutting in

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: another $372,000,000 from rural airports. I'm assuming Burlington is not considered a rural airport?

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Well, I don't believe we are. We're considered a small hub airport. Okay. So I don't well, I have not heard of any impact to us on that.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Probably more like nap. Well, heard

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: that Brooklyn is gonna be effective. Yeah. Yeah.

[Sen. Randy Brock, Member, Senate Finance Committee]: Pretty different.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: But we figured it from there. Thank you, madam chair. Thanks, Jeff. I hear you loud and clear about the things that are in the current transportation bill but you mentioned something from previous years and I couldn't follow you. We're talking fast.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: I'm sorry.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Have do that

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: one right. That's okay. I'm very passionate

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: about this. I've understood.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I'm trying to find it in your in your testimony. I've never had a testimony, but what did you

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: So in 2018, as part of the Transportation Builders, other conversations and and personalities involved with this, When they capped our contribution at 500,000, it used to be a long one. They also said you have to use this 500,000.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Your contribution to what? Your The state gives us 500,000.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: I see.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Okay. You're recovering from one. Okay.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Gave me million. I think now it cut it to 500,000 about eight years ago. Okay. Okay.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: And with that, there was also the restriction that those funds had to be used to match AIP grants. So when we get an entitlement from the FAA, they'll cover 90%, we have to cover 10%, and so the legislation said we have to use these funds to cover that 10%.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I see.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Where we are going to be banking it for this LICOL project, so therefore, the state would not appropriate those funds and we need those because it frees up other funds for operating replacements, etcetera.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: So you want us to get rid of the language that says that it has to match the federal funds. Is that what you're asking? Correct. Yes. Okay.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Because the federal law, as it relates to jet fuel, says those taxes have to be reinvested in the aviation industry. And because the state has an aviation program, a majority of those funds are taken and are used for the state airports. Yep. And that's where our $500,000 allocation comes. But the federal law, very specifically states, it can be used for operating or capital costs. Okay.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: And so we want to match federal law. I see. Okay. That's helping out our stand.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Okay. So consider my Well, that that might be a little bit outside. I was gonna say, is that our jurisdiction to do? It's a gray area. And at this point, we're gonna mess in this bill enough in our area. I would like to give transportation a chance to look at that. I don't think it's critical that it right now, is it it could be done next year?

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: I I I think so. Okay. We well, we we will be pushing very hard on that next year because we are gonna start banking.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Did you talk to the transportation community this year?

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Yes. Both the house and the senate. And they didn't do it? Honestly, we went to the house. It was a little too late in the game when we started.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: But the senate didn't put anything. I talked to him

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: yesterday for the first time. Okay.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: So it'll be too late. After the bellwether Yeah. Committee he's late in the game. But on the the bill that we have before us, it's just essentially removing section 44. Right. There's a tax object. Taxes are in our domain. It was added on, I think, because they were trying to raise money anywhere. But given the state of the cost of jet fuel right now and especially the shakiness of a lot of airlines and the rising cost, I don't think it would be helpful to add a cost, an additional cost. This just like, it wouldn't be really helpful to raise the gasoline tax this year.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: If I could give an example, Breeze Airways, is a low cost carrier, they're doing very well at our airport. They try to keep their costs at a minimum. They fly the largest planes and they go the furthest, and this will severely impact their ability to operate, and we are in conversations with them about expanding service, and that will not occur.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Would it also drive more shorter hops so they might not might avoid fueling up in Burlington? Yes.

[Sen. Randy Brock, Member, Senate Finance Committee]: Yeah. It's

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: It's called a anchoring. I don't support this language. I'm happy to strip it. Thanks, Jeff. Agreed with with taking it out, but did you guys run the numbers on what portion of that 600,000

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: would be Burlington? We don't have a strong ability to find out what the even with the 2,000,000 that Yeah. Looks like last year because there's so few payers. Mhmm.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: It can't

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Lion's share is going to be commercial service on the TV. I would say would guess 95 to 90%.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: It's tax department. If it's fewer than 10 or 20, they can't tell you because then you couldn't figure out the little plus. Okay. Cool. This is just a small number, so we'd all be trying to appropriate. And that's taxpayer confidentiality, so they won't they won't tell anyone.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Just think it's on our numbers of what paid out of We have, maybe Heritage is what we hear.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Yeah, we have a great relationship with Heritage, but it's even hard to figure out how much, because some of it's trucked in and they might pay a lower rate in a different state, and there's so many nuances associated to this that we can't just take how many gallons they pump and then do some math and math. We could probably get more close with some creativity and some assumptions, but I like to do a lot of assumptions.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Just to my previous point, I would fly out of BTB more if there were more longer flights as to the the connector that I usually look at. I'll just go from Montreal or Boston. It's, a couple of bucks. So Yeah.

[Sen. Randy Brock, Member, Senate Finance Committee]: I don't

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: think this moves us in

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: the right direction. We might be in the running for something more westward right now too. Mhmm. You know, one of

[Sen. Randy Brock, Member, Senate Finance Committee]: the questions is as far as competition's concern, what's happening to Montreal and their costs associated with fuel. Yeah. I know where ours are coming from, but I'm not sure what's going on with them. Do you

[Sen. Ann Cummings, Chair, Senate Finance Committee]: have any sense of that?

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: I don't have any sense, but generally speaking, it is more expensive to operate from the airlines out of out of that airport. And our region, because of infrastructure in New England, we have the highest per gallon cost in jet fuel in the nation. Mhmm. Alright.

[Sen. Randy Brock, Member, Senate Finance Committee]: Yeah. Okay. Goodness. And what's the dollar per gallon? It's a six year old, did you say? 600,000. That's the cost of the commissions here.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: That's 600,000 is

[Sen. Randy Brock, Member, Senate Finance Committee]: 628,000 we collected, yes. It's important to note that in any air hockey, fuels about 60% of total cost. It's not incidental.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: And did I hear you say that we are doing alright with air traffic controllers?

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Yes. We have not seen any challenges from the shortages, even during the TSA situations with their pay. We did not really see any operational challenges, and it was great to see the community rally behind our TSA agents. We collected $5,000 in gift cards and over £500 in food that went directly to their families. Okay.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: So Vermont does come through. Is there a fiscal note? I can't find it on the website. There's There's not there's not one listed under fiscal under the I don't know that we've got one. Is it under your name, Chris, or is it under Logan? I can't find it. What do you look like? It was It's weird on this bill. Do know Under Tuesday's date. Oh, Tuesday. Okay. Tuesday's. Okay. Yes. Logan did come in and give us a a fiscal note. I didn't see it. Meredith.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Is is there anything at the airport you do want us to tax?

[Sen. Randy Brock, Member, Senate Finance Committee]: They got second homes there?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: That might be fairly popular in subsections of Burlington. I don't think we have the authority. Do we need a motion, or do we need something? I think what we're going to need is a raster, and we don't have to do this bill today. So we've got more people coming in. If we're agreed that we will delete this tax, then we can get that drafted. We need to delete the section that financed it through money coming in and out of general fund and the Ed Fund because we chose to go with the house solution, which is, in the end, $10,000,000 going forward for transportation And we will we still need to do some more work on some of the, but I think we are finished with Jeff.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: Thank you very much.

[Sen. Randy Brock, Member, Senate Finance Committee]: Chair? Yes. This verbal clarity, I can communicate to alleged counsel so they can get a head start. But my understanding is what you just mentioned is that the committee would wanna remove sections eleven and twelve, which dealt with that purchase and use tax, as well as sections forty four and forty five, which deal with the jet fuel.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I think that

[Sen. Randy Brock, Member, Senate Finance Committee]: At this point.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: At this point where we are. We're gonna be taking more testimony on Enva. Tomorrow? Tomorrow? Yep. Two? And this bill I don't know when we're supposed to have it up, but it's not No. As important as the budget, which, yeah, has to come out today, I am told, so we can have it on the floor on Tuesday.

[Sen. Randy Brock, Member, Senate Finance Committee]: What issue is just as far as this is concerned, this is gonna reduce revenue, not by a huge amount, but are we gonna do anything to make that revenue up overall? Don't know. I wanted to see clarity. Senator, you're asking about the jet fuel. Right?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yep.

[Sen. Randy Brock, Member, Senate Finance Committee]: Yeah. That that proposal was not factored into the f y f l o seven budget. Okay. Good. Well Yeah.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: That was a last minute amendment as it was being voted out. It hasn't

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: But if you wanna raise some taxes, you know, Brock.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: It's fine. And you're hearing it.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I'm get a

[Sen. Randy Brock, Member, Senate Finance Committee]: chance in a couple weeks.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I love that. We are twenty minutes ahead. Do

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: you wanna bring them like a sit

[Sen. Ann Cummings, Chair, Senate Finance Committee]: by now? I know that he would Oh, I'm gonna make sure appointment. I was just gonna say we could do appointments or we could consider voting out the appropriations at all. Yeah, because I hope it's a train later. And then we can get out of here earlier today. You go to the train at Campari. Yes. Yes. All the fun things. Okay. Pizza and ice cream. Do I do my appointments first? Yes. Okay. I I have an appointment to the It's called the Vermont State Infrastructure Bank award, which is operated by BETA in conjunction with the Vermont Agency of Transportation and the Federal Highway Administration to assist in the construction or reconstruction of highways, roads, and bridges, as well as certain facilities related to rail transit. I did not know exist this thing existed, but that's what it's for transportation infrastructure. And and so and also in certain cases, electric vehicle charging stations, natural gas refueling stations available for public use and that are eligible for funding. So this is this board that deals with

[Sen. Randy Brock, Member, Senate Finance Committee]: this

[Sen. Ann Cummings, Chair, Senate Finance Committee]: particular specific in transportation infrastructure, and there was an appointment, Danny Delaney from Brattleboro, and I spoke with her. She was a new appointee. I think she was has been to one meeting. They meet quarterly, and she is currently the assistant director and head of business acceleration at the Brattleboro Development Credit Corporation. And she was great. We had a really nice conversation about her experience. She's also worked for other economic development programs. She grew up in Vermont, left the state for a while, and then moved back eighty years ago. She seems very excited to serve in this role and very I have her resume if anybody is interested in more details. And I told her that she should speak with her senator senator Harrison because Wendy's very excited about transportation infrastructure. That's what this board does, and she has lives in senator Harrison's district. So I would recommend that we recommend her approval to the full Senate as a new appointee to this obscure board. That's why I can read out the right thing. Thank you. Senator Hardy has moved that we approve the appointment of Danny Delaney, different way to spell Delaney, Brattleboro to the as a public member of the State Infrastructure Bank Board. Return, including 01/18/2025 to and including 02/28/2026, and until a successor is appointed. That is So we are appointing her a month ago. Oh, yeah.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: The with the

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yeah. But I so there should be another one Yeah. Coming to appoint her again unless the governor's going.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: I thought that's only if the term runs out that

[Sen. Ann Cummings, Chair, Senate Finance Committee]: It's too it's

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: I thought it's if the term runs out in the initial appointment, then

[Pat Davidson, Joint Fiscal Office]: there has to be another appointment.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: So that's why we

[Pat Davidson, Joint Fiscal Office]: don't Let's So choose

[Sen. Ann Cummings, Chair, Senate Finance Committee]: appoint her and then we'll query the governor's office. So we'll make her legal for the past year.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Because I had

[Pat Davidson, Joint Fiscal Office]: the same thing.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yeah, I mean, we've gotten things from previous governors that just held over this summer. Yeah, and she's not. I mean, she's only been to one There's only been one meeting. This was for one year. Yeah. When they appointed her. Let's vote her out. Okay. We'll get her on the calendar, and then we can query the governor's office about that. Okay. Alright. Is there any further discussion? If or not, let's call the roll. I'll do it. No.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Senator Chittenden. Senator Beck? Yes. Senator Hardy? Yes. Senator Brock? Yes. Senator Eulick?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yes.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Senator Mattos? Yes. Senator Cummings?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yes.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: That's a seven zero zero. Okay.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Senator Hardy, you could take that up. Yep. She do I need the like original things? Okay. Cool. Yeah. Would be great.

[Sen. Randy Brock, Member, Senate Finance Committee]: I know. Okay.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: We are do not have anyone scheduled until 02:30. Right now. But and we got another one? Yeah. This. Oh, yes. Well, that's what I wanted to do. We could look at the budget, and I don't have a director here. Oh, yes. Well, I've got joint fiscal. I'm trying to figure out we weren't gonna do anything to the budget. We weren't even clear why we had it. Right? It was kind of a pro form a stop just in case they were battling in our area. What is the pleasure of the committee? Would we like to hear from people? Would we like to move this forward? I've been told it needs to be out today. They moved to go to this tax bill?

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Yes. They believe they're

[Sen. Ann Cummings, Chair, Senate Finance Committee]: also moved to miss Lane's tax bill.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: I was very clear. Just a haircut. Needle surgery.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Is that a motion?

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: I will move it favorably. The bill has received from appropriations h nine fifty one.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Okay. Senator Chittenden has moved that we approve h nine fifty one as it was sent to us for Senate appropriations. Further discussion, Senator Hart. Thank you. When we got our presentation from joint fiscal, there was an item in it that I do not support. Yes. Told it was not our area of jurisdiction but it is something that I find really unacceptable which is the funding for the University of Vermont basketball stadium that is taken from the student Higher Ed Trust Fund, which is supposed to be for student scholarships, and I can't support Sure. So, I booked that one project. Okay. And anyone who's streamed at Thorben? Okay. Yeah. Unfortunately, it's it's hard to do it to to bills. I think it should be funded through the capital budget. That is where we've done buildings. Mhmm. And had they gone through the appropriate channels and had a request in the capital budget and funded out of capital budget, I think that would have been appropriate to use a funding source that is not meant for this purpose. I think it's really bad fiscal policy and in a year when we can't even fund some of the really basic things that were being asked. I think it's also bad public policy. So, I can't support it. And I'll see about four of them. But thank you, madam chair.

[Sen. Randy Brock, Member, Senate Finance Committee]: The issue, I just just have a question in terms of whether you'd say a treatment funded fund. What is there something in statutes or rules or whatever that dictates what goes into or out of the particular fund that I'm thinking of as opposed to this?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: The higher education trust fund is used for student scholarships for students at all of the Vermont Mhmm. Higher education institutions. So UVM, the state colleges, and the and CCB, the community colleges, I believe. But I think it's just the public institutions. It could be some private. I'm not sure. But but point being is that it's for student scholarships. And what this part of the budget does is takes money from that fund to use to put toward a a basketball stadium.

[Sen. Randy Brock, Member, Senate Finance Committee]: I mean, I understand. I I'm just trying to understand. Is there are some rules, for example, that say what can be taken out of

[Sen. Ann Cummings, Chair, Senate Finance Committee]: that fund. I believe there are. Are.

[Sen. Randy Brock, Member, Senate Finance Committee]: I'd like to just read them

[Sen. Ann Cummings, Chair, Senate Finance Committee]: before That's a good question. We don't have much counsel in here, but I believe that there are statutory requirements. If there's

[Sen. Randy Brock, Member, Senate Finance Committee]: a statutory requirement, I would agree with you, but I haven't read anything. I haven't seen anything. It tells me where where

[Sen. Ann Cummings, Chair, Senate Finance Committee]: That's a that's a great point. I just know that that's what that fund has traditionally been used for, and I think it's required that that's what the fund is used for. And then there is the scheme for paying it back over a few years, but that is using money that usually goes to the general fund to pay it back. And as everybody knows, our general fund is in short supply, and we can't even fund some of the basic requests that we've been getting this year. And so, you know, this is a this is a request for money to go toward a building, and that's what our capital budget is used for. And in fact, UBM has a line in our capital budget that is often, you know, I think annually, we give them an amount of money to fund buildings at UVM. And so if this were funded through the capital budget and and and they had come in with that request, I would have found that much more appropriate and and and could support it if it were a capital expenditure. Is the draft you're always watching? Joint fiscal office. Joint fiscal office. Yes. It's just I think the attorney that would do the the Higher Education Trust Fund is is good to John. That or John? Yeah.

[Sen. Randy Brock, Member, Senate Finance Committee]: They've done walkthroughs on the higher interest fund and other committees. And if the committee's interested, if you have your computers, the statute 16 of the essay 28 p.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: And I agree Looking to agree. Yeah.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: To to senator Brock's point, my understanding is this while you're serving with senator Kitchell is that it is common for us to not withstand language. We are doing it this year. I understand with the IT funds and much some children just to move money around based on you see Addison flows. And this too, I think was inspired because of a from the estate taxes, which is very volatile. So rather than count on estate taxes from year to year, you just never know who that's gonna have that amount of money. This past year, there was a very large estate that created a bubble in this fund. And so it was thought to need to be used to support the higher education institution for what I would see as much needed infrastructure to help the flagship institution or university. But I want to acknowledge I have very much that worked for UBM. I bleed green and gold and I just think this is something that should happen. I really like what appropriations has done to build this.

[Sen. Randy Brock, Member, Senate Finance Committee]: I'm just interested in whether or not what's been done is in accordance with the rules associated with each pot of money. That's all I wanna know.

[Pat Davidson, Joint Fiscal Office]: Understood. And it's it's

[Sen. Randy Brock, Member, Senate Finance Committee]: it's discretionary to make that discretionary move, you know, and they won't occur to to

[Sen. Ann Cummings, Chair, Senate Finance Committee]: We can see if we can get appropriations Johnny here. But

[Sen. Randy Brock, Member, Senate Finance Committee]: don't have enough information otherwise.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: The word notwithstanding

[Sen. Randy Brock, Member, Senate Finance Committee]: Yeah.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Allows us so we can say notwithstanding the rule. I'm assuming they did that.

[Sen. Randy Brock, Member, Senate Finance Committee]: They did that.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Okay.

[Pat Davidson, Joint Fiscal Office]: They did it.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: So the budget had a notwithstanding. Mhmm. We do it. There was money there, there was a need somewhere else, we can agree if that's good or not.

[Sen. Randy Brock, Member, Senate Finance Committee]: The judge may call whether it's basketball stadium as opposed to an academic building about that, They have the judgement to to exercise that.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I don't think it's about the building. It's about it it I mean, this fund is supposed to be for academic scholarships for students. And with all due respect on the the quote, unquote need for a basketball stadium, there's a huge need for student scholarships. I have two kids in college right now. I mean, the cost of college education at at public universities, we have the highest public university tuition in the country. And to to take money away from scholarships and put it toward a stadium when there are better funding sources for that. I I find I mean, frankly, I find it defensive that that that we would do that. And and that's why even though it's a relatively small part of a very large budget, I just cannot support a larger budget with this. This we said no to the food bank. We said no to so many nonprofit organizations that provide critical human services. You guys heard all morning in your morning committee about how what the needs were. This is not an appropriate use of this funding. We should be helping kids go to college. And if there's a a quote, unquote, windfall in the in the fund, send more kids to college. Provide bigger scholarships so people have less student debt. Don't use it to fund a basketball stadium. That is a that is an expense that belongs in the capital budget. I remember there was testimony that said enrollment was down. Enrollment in colleges is declining. Baby boom, we're not producing the kids. We've built out. We've lost several small colleges and several more are struggling. And the argument was that this is an investment that would make students more inclined to come here. And that's the money in the past has been that most Vermont students get a scholarship of

[Sen. Randy Brock, Member, Senate Finance Committee]: some field. Well, they do. The vast majority don't pay tuition fees.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: In our state's

[Sen. Randy Brock, Member, Senate Finance Committee]: We give those students more money that they still pay the same amount of money.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: So anyway. I will support everything that my colleagues at our party said. I will add that I'm concerned about the precedent that we're setting for that particular fund. I think there could be a slippery slope there,

[Sen. Ann Cummings, Chair, Senate Finance Committee]: and that concerns me a lot.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: That said, I am going to

[Sen. Randy Brock, Member, Senate Finance Committee]: vote for the budget, though, but

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: I do support every ever since. Okay.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Senator Brock, having been told that they did use the novice standing word budget. Are you feeling comfortable with this?

[Sen. Randy Brock, Member, Senate Finance Committee]: I'm comfortable enough to vote for it. I I do have reservations. And I had some of the same reservations that that senator Hardy has expressed in terms of where where we're we're putting money. But I understand also that this may have a result that he can have spoken about, talked about, and reasons, such as bringing in more students who would otherwise not have come and perhaps without a revenue impact or a cost impact to them individually that may not affect their ability to come. So I'm inclined to vote for it, but I'm not entirely confident. Okay.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Central Chittenden, you made, you made a motion? Yep. Yes. Okay. So we have a motion on board to approve nine fifty one as it was presented to us. Is there any further discussion, amendments, concerns? If not, does the

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: clerk call the motion? Senator Chittenden? Yes. Senator Beck? Yes. Senator Hardy?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: No.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Senator Brock? Yes. Senator Gulick? Yes. Senator Mattos, yes. Senator Cummings? Yes. Six one zero. Okay. And

[Sen. Ann Cummings, Chair, Senate Finance Committee]: who would like to move with them? Okay. That is six one zero. Senator Chittenden will be the recorder. And we are back on schedule, but we have done appointments, and we have done one other thing. So we may get you out of here in time to do other things. We are go we're completely changing course now. You've done well on this committee. We're going to H385, an act relating to remedies and protections for the victims of coercive death. He was what have we heard from

[Sen. Randy Brock, Member, Senate Finance Committee]: her? Under the past.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: She can prove that she's here. Okay. Well, we can stand at ease. Maybe, Maria, you could start walking us through, and then when she gets here, we'll let her tell us what problem this bill was aimed at solving. It was originally referred to the judiciary which has looked at a couple of sections they felt were within their jurisdiction, but then they released it to us because a lot of it has to do with banking regulations, not law or legal. Yeah, we got a Not a problem.

[Pat Davidson, Joint Fiscal Office]: We got

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: a walk through in judiciary, and upon the walk through, had a very, very short discussion and decided this is Sunday beach.

[Jeff Bartley, Director of Innovation and Marketing, Patrick Leahy Burlington International Airport (BTV)]: On the bulk of the findings

[Sen. Randy Brock, Member, Senate Finance Committee]: That part of

[Sen. Ann Cummings, Chair, Senate Finance Committee]: was like 09:40, which is on the calendar and I'm reporting and I said, what is it? And then it's the bill where we voted it out and sent it to natural resources because it was all energy planning and all we did was say, yes, Burlington Electric can continue what it's been doing, and we killed the committee that hasn't met in five years. So we put a very small fingerprint on that bill. I guess it's not sitting on the notice count, but it is in natural resources. And we've had a couple like that that she's rid of. The overlaps have been interesting. So let's take a look at this one. Okay. Maria Weil, counsel. So before I pull up the bill, h three eighty five, I know representative Randy would have done that.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Just to read her name. Randy. Randy. Just kind of big picture. There are actually two substantive provisions of the bill. There's the first part that deals with coerced debt, legal remedies and protections. And then there's a separate section that deals with bank holds in the event there's suspended financial exploitation going on. So, two subs definitions. And then, okay. Oh, good. We're in here. Here. I have just in the and the is the name of the bill. I haven't really done anything yet. Oh, good. So you know what I mean? Yeah. Excellent. Just do you wanna stay up here? Yeah. It's okay. Okay. Yes. Hello. I'm Senate Finance, Eddie Grant, representative of Jericho And Hunter Hill. I'm reporter and the one of the cosponsors of the bill, three eighty five, and it does two things. It provides an avenue for folks who have been hit with coerced debt to get some relief in certain circumstances, and it also provides for transaction holds at banks. So in the bank, if a if a teller in a bank has somebody coming in to get a lot of more money than they normally take out. It gives the banks an opportunity to just say, let's fold on that and get fifteen day kind of waiting period to say, like, let's make sure that money that you don't want, that you're not going to lose because somebody's saying put it in a crypto machine and send it to, you know, wherever it's gonna go. So the bill is based on two studies that were done in the off session last year. It's out of a working group. So they came through. We talked about them before. Why they sound familiar to you? The FR ran both of them and continued to work with banks and with lenders and advocates on both of those issues and brought you a pretty, buttoned up compromise bill on how to navigate this in Vermont going forward. Coerced debt is there seven states that do it now that have avenues for people to get some relief. Ours is, they're very Vermont based with forms and a pretty clear, limited scope on how to do that. Not in all the states, they've been doing it, I think, since 2019. It's been effective in the current states. So, you know, we're, we're not late to the party, but we're not the first ones doing What else? That's it. We're just gonna ask, looking for you to tell us what problem are trying to solve. Oh, great. Yeah. So what we're trying to do is just help people who are really in a horrible space have a way to rebuild their lives. We make sure that there's a provision in there for banks to go after the perpetrators so that they can collect the money. And we're hoping that we can help a few people every year to get that opportunity to restart. And then the transaction holds would stop people from being in these positions where they just gave away a lot of money because they were put in that. Right now right now, get it done. Give us your money, and just give them that time to so we're just trying to make people's financial lives a little bit better. Yeah. Any questions?

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: I'm just curious about the

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: voting committee and on the floor. Was unanimous in committee and with a voice vote on the floor and it

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: sounded pretty darn unanimous. Okay.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: No serious opposition. Yes. Okay, to get there, it was a lot of work. We had a lot of meetings with advocates and on both sides to really find that middle line. I think we did that. Thank you. Great. Thanks, Chittenden. And Maria was outstanding. Okay. As usual. So real. How can walk? Sure. Preference our brains must have me confused with that. The reason why I want to start with a preliminary document that I quickly put together is just the first six pages of the bill are all definitions.

[Sen. Randy Brock, Member, Senate Finance Committee]: Yeah.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: And it's really hard to understand what these terms mean, what the context is, just diving into a bunch of definitions without understanding more detail about the purpose. So what I'm gonna hand out, and that's also posted online. So I'll just share my screen. Yeah. And also, you can kind of refer to this as needed going forward. So So just again, big picture, getters for purposes of the course debt and citizen avail themselves with some of the legal protections and remedies. These are survivors of domestic abuse, trafficking, human trafficking, or their admirable adults who are survivors of abuse, neglect, exploitation. So, I'm gonna just use the word survivor, but it's of those categories. And in the context of that abuse or trafficking or biotriation, the perpetrator has used your personal information, either without your knowledge, or through the use of threat or intimidation to secure a loan in your name, then you would be considered a victim of coerced status. Kind of a really big identity theft. Yes. It could be, absolutely, because identity theft is when someone uses your personal information without your knowledge. But this this would be in the context of a domestic situation, but you could still file identity theft for personal credit reports

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: and so on. There are avenues that exist.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: But what I wanted to share with you just to be clear on some of the terms specifically regarding the documentation that's necessary that kind of triggers all of these protections. So first off, the debtor, who's incurred the poorest debt, would go to a creditor and submit statement of poorest debt, which is supported by adequate documentation. Both of those terms are defined. We'll go through what the statement is, and then the documentation could be one of any three listed documents. First, with respect to the statement, the debtor's statement of course debt, it has to be in writing. It must be sworn to and either notarized or there must be a self attestation saying, subject to perjury, everything you're putting in the document is accurate and true to the best of your knowledge. It identifies the debt. The statement should describe the circumstances to the best of the debtor's knowledge under which it was incurred. The statement, which also included disclosure that, specific disclosure that you did not willfully enter into the debt. And then provide the identity of the perpetrator and contact information. And there's an exception unless you fear some future needs disclosing that information. So, you can withhold that if you're concerned. So, that's the statement that you would need to file with a creditor, and it could be any creditor. It's actually very generally defined. So you could talk about credit card, card loan, bank loan, whatever. There are some other Okay, well, I'm just gonna say it now instead of waiting. So in terms of the type of debt that is covered, it includes both secured and unsecured loan, but it specifically does not include commercial loans or mortgage loans. In terms of the documentation that you would need to present to a creditor, it could be a police report where you've described the debt and you've also described the circumstances specifically, and that would be subject to penalties. It is a crime to submit false information to a law enforcement agency. If you have been able to secure a court order already, there's finding of coerced debt, certainly would be sufficient documentation. Or, you can submit a sworn certification from a qualified third party professional. So you can kinda see why I'm trying to call out these terms a little bit, because sometimes sworn certification statement, of course, I get a little bit confused. I'm hoping that this just helps to clarify. So you'll see what I've listed here are individuals that could qualify as third party professionals. So it could be an officer of the court, the judge or other court personnel, law enforcement personnel, a court appointed special advocate, which could be a guardian ad litem representing best interest of children in a custody divorce proceeding or abuse proceeding. A crisis worker, it's actually defined in Vermont law. These are individuals, they can be a volunteer, but for purposes of this section, they have to be employed at a program that provides services to victims of domestic violence or sexual assault. Or a licensed attorney or a healthcare provider. And then in terms of the information that that professional would provide, again, it has to be in writing, also sworn to, subject to perjury. You have to specify the professional that they had in person or face to face virtual contact with the debtor in the context of the professional relationship and professional interactions. From that, the professional group has a reasonable basis to believe that the debtor was a victim or survivor of abuse and also that the debt was forced. Just wanted to be clear on those terms because they do get a little bit confusing. So, that's all that is, that document. And I will now pull up the bill it doubled. Okay. Actually, it said their sick date is a definition, but because some of these are pretty long, there aren't that many. We pretty much covered the major definitions. So, again, this is the adequate documentation. I think I've pretty much described it. Police report, the court order, or the sworn certification. Just specifically, it might be helpful to look at the definition of course debt means all or a portion of secured or unsecured debt solely or jointly in a debtor's name that was incurred as a result of domestic abuse, human trafficking, or the abuse, neglect, or exploitation of a vulnerable adult. And the perpetrator's either use of the debtor's personal information without the debtor's knowledge, authorization, or consent, or use of threat of force, intimidation, armed influence, fraud, deception, coercion, or other similar needs against the debt. Again, as I mentioned, it does not include mortgage loans, any loans secured by real estate, and it does not include commercial loans business.

[Sen. Randy Brock, Member, Senate Finance Committee]: Just a question. Why are those two exceptions made?

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: It was just part of the discussions and negotiations between the interested stakeholders. I I think things fair to say that maybe the banks and credit unions Yeah. Were a little bit concerned about mortgage loans, similar like commercial loans. And we're we're here to go back into the credit unions. Yeah. Anyone that wants to talk. Kinda, did you look at you?

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: I did. I did. Yeah. Senator Frost went, that's fine. Vulnerable adult is a term we use often in

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: the health and welfare committee. Is there a definition in statute? There is definitely a definition in statute. And it's referred to in here or cited in here. And actually, was just looking that up myself. If I can read it to you pretty quickly, that'd be helpful. So a vulnerable adult means any person 18 years of age or older, who is, and then there are three different categories. The first is a resident of a facility required to be licensed under chapter 71. I think that might be an living or long term care facility for Mount Staben. Or as a resident of a psychiatric hospital or a psychiatric unit of a hospital. Or separate category, was receiving assistance with personal care services for more than one month from a designated home health agency or from a personal organization that offers provides or arranges for personal care or is be clinically eligible to receive long term Medicaid waiver services. And then finally, regardless of residence or whether any type of service is received, has a physical, mental, or developmental disability, infirmities as a result of brain damage or mental condition, or infirmities of aging resulting in impairment of the individual's ability to independently engage in activities of daily living or instrumental activities of daily living, which provide for some aspect of the adult's own personal care without assistance, or some impairment of the adult's ability to protect the adult from misled life or explanation. Can I ask a question, Maria? Yeah, sure.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: So if we exclude out mortgage loans and commercial loans, it makes sense to me because there's usually a big assistant owner's fault. I'm assuming that or what does this now cover? Is it mostly just on credit cards and credit lines? Are there other types of debt that this is slightly gonna involve?

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Credit cards is a big one. Yeah. Personal car loans.

[Sen. Randy Brock, Member, Senate Finance Committee]: Oh, car loans too. Okay.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Potentially. Yeah. Yep. It will eventually go. Okay. Where personal fear of safety required under the pickup truck for you. So then, domestic abuse is defined under title 15. It, covers everything from stalking and sexual assault, course of bullying behavior. The other thing I'll just mention is it applies to family members or members of the same household. So, if you lived with somebody or are living with or have lived with somebody, you would be considered part of the household or if you were in a dating relationship or if you had a sexual relationship. So, it's a pretty broad term. That was significant because there was concern wanting to make sure that foster children, for example, would be protected if their personal issues were used. If someone was being stalked and the stalker says, I'll go away if Yep. Is is is covered under domestic abuse. Okay. Even if it's not. I've never been in a relationship with this person. I this is just a very sick person who's So it's not a family or household member. Just And not in the context of Yes. Then I just so yeah. Yeah. I don't think that I don't think they're just a victim of yeah. A stranger's talking to you. Yeah. Abuse, again, that comes up in the context of not wanting to disclose perpetrator's identity or information because you're concerned about that future abuse. Good faith comes up in the context of the investigation. Future abuse means abuses except that the abuse need not occur between family or health. Right. That's because it could be a vulnerable adult who's being abused by someone who's not Okay. Would recover the stock. Right. Which is your witness for the purpose of Right. A lurcher. Vulnerable adult. Okay. And then human trafficking, just citing to relevant definitions. So the perpetrator obviously is somebody, who causes or is alleged to have caused coerced death to be incurred by another. We already talked about the qualified third party professional. Again, this only comes up if they're submitting certification on behalf of a debtor. Statement is the debtor's statement that they need to provide to the creditor. So again, they have to identify the fee sworn. They identify the debt, description of the circumstances, statement that they did not willingly authorize the use of their name or personal information to incur such debt. Any other information regarding the debt, including account information, credit card information if applicable, name of any other individuals whose name might have been, the debt might have been currently incurred. Again, the perpetrator's information. Then there's provisions about just ensuring that they also include their preferred language, preferred contact. For example, if they don't want information emailed to their home or they don't give a home address or home telephone number, they can go through a there are safe addresses for the protection of them. In any event okay. So and then what's, I'm just looking at it on page five is just the, the statement has to be notarized or include the self attestation, which is subject to perjury. Sworn certification, I pretty much described it. Again, it's third party professional statement. I have reasonable basis to believe in my professional capacity that this person is a survivor of abuse and has incurred fuller stint. So, then we get into kind of the substance. We're now through the definitions. But what I did want to mention, all of these provisions are a new sub chapter in Title IX under the Consumer Protection Act. What that means is, any violations of these provisions would be subject to the remedies and protection of the Consumer Protection Act, in addition to what's already in here. So, for example, the Attorney General has the authority to conduct investigations if there's been a violation of the Consumer Protection Act. There's also, there's a private action brought in an indentive private action against a perpetrator. They're entitled to recover attorneys fees as well as. So there are, in the broader consumer protection context, there are some protections in place in addition to what you see here. So, line 13, person shall not cause another person to incur coerced debt. Substantiated coerced debt is not enforceable against the debtor. So now we get into the creditor's conduct. So this is if a debtor goes to the creditor, presents statement, and presents the documentation. There's a whole timeline here of what the creditor would have to do. So initially, within ten business days of receiving that information, creditor has to cease all collection activities, not sell the debt or transfer the debt to another entity, Notify the debtor that it completes collection activities, pending further review of the claim. And then if they've already furnished adverse information about the debt to a credit reporting agency, contact the credit reporting agency and say that the debt is being disputed, the accuracy of the debt is being disputed. Subsection B is just if the creditor receives this notification, maybe it receives it orally or maybe it doesn't have all of the information that's required, then within ten business days, the creditor would have to inform the debtor that there's missing information, And to assist with that, they could provide the debtor what's what's referred to as model form a one. And there's a whole provision in here that says what's included in in this model form. But, basically, it's gonna be a document that's DFR of yours in substantially the form in this bill, and it would be a document that's posted on the webpage available. Ideally, if a debtor is working with an advocate, they would find that and maybe use that form initially to know exactly what the requirements are. It's a little less legalese. It's meant to be a little bit more understandable about what the requirements are. In any event, the creditor would then mail that form if they don't have the information that's necessary or provided to the debtor to make sure that that isn't the problem for failing to go through the investigation. So then the creditor would have thirty days to conduct a reasonable investigation of the disputed information, and that includes review of all information provided by the debtor and any other relevant information available to the creditor. And then upon complete completion of the investigation, make a determination as to the accuracy of the claim of the worst debt. Subdivision two is just allows for an extension of the thirty day period by up to fifteen days, if necessary. There's supplementary information filed, etcetera. So then once that determination is made from that thirty day period, the creditor then has five days to notify the debtor of its determination. It has to be in writing. And as part of that determination, must provide a good faith basis for the determination. Then just an assurance that that notice shall not include personally identifiable information of another person, particularly a bank employee, where that is not disclosed. If the creditor determines that the disputed debt is coerced debt, the creditor shall notify the debtor that it is seeking collection activities and contact any consumer reporting agency to which it furnish diverse information about the debtor's coerced debt and request that such information be deleted from the debtor's file and credit report. Or if, the creditor determines the available information does not establish the disputed debt score's debt, the creditor may recommence collection activities but may not sell or transfer the debt. So they would have to maintain the debt. And then subsection e, this has to do with communications from the creditor to the debtor debtor. Just specifies that they shall be made using the debtor's preferred contact method. Predators shall make reasonable efforts to use the debtor's preferred language as identified and the statement of divorce debt. And then in connection with the statement of coarse debt, the creditor shall not disclose contact information that the debtor provides any of the information in the statement without the debtor's express written authorization unless directed or authorized to do so by court order. The creditor may request the identity of the perpetrator and the contact information, but again, there's another opportunity for the debtor to sign a sworn statement specifying that disclosing such information is likely to result in abuse to the debtor or to a member of the debtor's immediate family. Model form a one, I don't think I have to I don't have to go through in detail unless you want me to, but this is, again, the form that DFR will prepare, post on a website, which can be used for purposes of completing the statement. And, again, it's not quite legalese. Do you wanna read through it? What? I never know exactly enough. Okay.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: I don't think need to the form. I don't think I need you

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: to read through the No. It's okay. So it should track everything, all of the requirements that we've already reviewed. So then that brings us all the way to subsection h, and this is on page 13, line 11. And this basically says, so if the course debt is secured by tangible personal property, car, for example, nothing in this sub chapter shall affect the creditor's right to enforce a security interest upon default and then the citation to the appropriate version of the UCC, the universal commercial code, as advice to secure transactions, including repossessions, surrender, or court order seizure of the subject collateral. So the creditor can go after the collateral irrespective of anything that's so far happened. However, a creditor is prohibited from collecting or seeking to collect any deficiency that they don't report back. Any outstanding KNIC city Accreditor collected from the person did the coercion. Yes. Okay. And we're actually about to get to the civil legal remedies, which include the right of action against the perpetrator. There's a finding that forced it. So good timing. So, civil legal remedies. So, a debtor shall not be liable to a creditor for coerced debt. So, if the creditor decides to enforce the debt, they've been presented with the information, they don't find that it supports finding in their opinion of the borrower's debt, they initiate an action to collect the debt from the debtor. The debtor may establish a prima facie case that the debt is coerced by submitting the statement of course debt and adequate documentation. That's so what that basically means is that is sufficient information to prevent the court from dismissing a case. If you provided that information, your claim is not gonna be dismissed and significantly, the next sentence, if the debtor establishes a prima facie case of forced debt, then the burden to the creditor. The creditor shall bear the burden of proving by a preponderance of the evidence that the debt is not overstent. So at the conclusion of the proceedings, the civil proceeding, if the court finds a debt is poorest debt, first of all, the court shall vacate any previous default judgment issued against the debtor on the poorest debt. So for example, if there was a dissolution of marriage and the property was divided and the debtor was responsible in that proceeding, but did not participate in the proceeding, that provision would be vacated with respect to that debt only. Then the creditor shall have a clause of action against the perpetrator. In addition, the debtor shall have a clause of action against the perpetrator for any payments or costs that they incurred already in connection with the coerced debt. So, this section should not be construed to limit or infringe upon any other rights or remedies available under common law or any other provision of law or rule. Subsection d is relates to the debtor not wanting to disclose the perpetrator's information. The creditor may file a motion with the judge in court requesting a hearing to determine the danger of future abuse. So the debtor doesn't want to dispose it, the creditor can then try to compel the disclosure by filing a motion asking the judge to require disclosure. In which case, the debtor shall bear the burden of proving by a preponderance of the evidence that if the information is disclosed, the perpetrator poses a danger of future abuse to the debtor or member of the debtor's immediate family. The court finds the debtor meets this burden, information is not disclosed. If the debtor doesn't meet the burden, the information is disclosed. So there's a court process for that. And then there are other protections, procedural protections in the proceeding subsection e. Upon motion of a debtor, the court may seal court records, redact personally identifiable information, direct the deposition or evidentiary hearings being conducted remotely. The debtor is wants a relief from abuse order. This is just specified in lines ten eleven. They follow the existing statutory procedures for seeking such an order. Marie, can I ask

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: you a question? If the name of the perpetrator is revealed to the creditor, then it'd be is it, like, subject to public availability, or does it kinda be kept confidential

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: by the creditor? Or I don't think I'm I'm trying to think of a provision in here that specifically addresses that information. So if the creditor has the identity of the perpetrator, there might be general banking provisions, financial information. They wouldn't just disclose it. But if you brought you could bring a legal action, and at that point, it would be public. Right. So so I think I'm subsection f just provide that the provisions of this sub chapter apply in any action brought in court of this state, notwithstanding contractual choice of law provision. If you enter into a contract in another state, and typically the other state's laws might apply to the terms of the contract. That would be true except that for purposes of the availability of these remedies, Vermont law would apply to the contract. Nothing in this subject under shall be

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: granted. Yeah.

[Sen. Randy Brock, Member, Senate Finance Committee]: A question on on that. If if two people who are not resident in the state or are here for some reason, a vacation or a long stay, you don't have to be a Vermont resident to file or to be subject to it if you are within the jurisdiction of the state court. Is

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: that right?

[Sen. Randy Brock, Member, Senate Finance Committee]: I'm just trying to think from the

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: interface think of that's right. But you're in Vermont now?

[Sen. Randy Brock, Member, Senate Finance Committee]: Yes.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Okay, but you entered into a contract?

[Pat Davidson, Joint Fiscal Office]: You may have entered into

[Sen. Randy Brock, Member, Senate Finance Committee]: a contract someplace else, or you may have entered into a contract And I'm really actually thinking about it from both directions. Can a nonresident sue under this because of either abuse that happened here in Vermont or because of a contract that was executed in Vermont or because of whatever the subject.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Yeah. So it's a good question, and I can't say I'm very sharp on personal jurisdiction issues. But if a creditor was trying to enforce in a court of the state, obviously, but if you're a debtor and you want to initiate an action against the perpetrator in this state, you're here, the debt's here. I don't know, let me think, I have to think about that a little bit more.

[Sen. Randy Brock, Member, Senate Finance Committee]: You always have a chart.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Yeah, I know, I mean another chart, Oh

[Sen. Randy Brock, Member, Senate Finance Committee]: my gosh.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Okay. And and then I should mention Michelle Child, is our judiciary. And all of these, legal remedies that are enacted was reviewed by house judiciary. They didn't have possession of the bill, but they reviewed once you're there, but she might be able to Okay. More quickly address the judicial issues.

[Sen. Randy Brock, Member, Senate Finance Committee]: So

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: then nothing in the subchapter shall be construed to preclude a creditor from seeking recourse under applicable law for a claim of course death that is knowingly and materially false. Subsection eight just specifies that the perpetrator is not a necessary party to an action between a creditor and debtor under inspection. But if there is a finding of coerced debt, that finding is not binding on the perpetrator, there would have to be another proceeding against the perpetrator where the perpetrator is given an opportunity to defend themselves. So then, the next two subsections have to do with statutes of limitation. The first one has to do with a debtor who might want to bring an action against the perpetrator. It must be commenced within six years after the date the debtor discovered or reasonably should have discovered the poor's debt, which is pretty typical. But it goes on to say, or within six years after the coercion or abuse giving rise to the debt feast, whichever is later. So if you know about it, but you're, not comfortable bringing in action perhaps because of ongoing abuse, the statute of limitations would not toll until you feel that you have an opportunity to abuse this ceased. Similarly, if a creditor wants to pursue an action against perpetrator, they also need to pursue that action within six years after they've received notice of the divorce debt, the debtor statement documentation, or receive notice of the identity of the perpetrator. Because if it's not disclosed and the court doesn't compel disclosure, they might not know. They're not gonna be time barred from bringing in action until they know. Next section, not being due with violations. This is just kind of the trigger, the hook of the Consumer Protection Act. Consumer Protection Act generally applies to unfair and deceptive acts in trade and commerce. This just specifies that a violation of any of the provisions of this subchapter constitute an unfair and deceptive act and would be subject to follow protections and investigative authority of attorney general, etcetera, of the Consumer Protection Act, which is basically somewhat restated in subsection b so that attorney general has the same authority to make rules, conducts investigations, enter into assurances of discontinuance, and bring civil actions as provided on the presumption of that. For confidentiality provisions, so any information, financial, personal, identifying information related to core stem of the debtor shares pursuant to this subgender shall not be disclosed by the recipient of that information without consent and or unless disclosure is authorized by court order. Similarly, if information is subject to privilege under federal or state law, it shall not be disclosed by the recipient unless, again, the debtor expressly waives the provision or the privilege is waived by an express provision of law. And then subsection C has to do with information that might be acquired by a public body. It would not be subject to public represent, public inspection and copy. It would remain confidential. Section two is basically Regarding end of the

[Sen. Randy Brock, Member, Senate Finance Committee]: disclosure, in the event that this results in a court action, that court case, transpacific, would not be confidential with it.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: So parts of it might have been enacted. I'm not familiar with family court or abuse proceedings, but I know there are protections, so there may be, but that all to the extent that's not a parlatory, then that might be considered a waiver of the of the confidentiality. If the creditor is initiating the action against the debtor and the debtor doesn't want that information public, kind of concern, fear, at least. And I think it could be confidential, but not making a motion.

[Sen. Randy Brock, Member, Senate Finance Committee]: Would it be something, for example, I'm just trying to envision litigation that could result from this, could the creditor bring a legal action against the perpetrator or the perpetrators and the debtor? I mean, I'm just trying to figure out what this ought to look like in terms of how the creditor gets made whole potentially in Yeah.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Not in here, but I think maybe what you're getting to. There is a provision that said the perpetrator is not a necessary party. But if you know who the perpetrator is, you might want to impede the perpetrator so that they are party to the action.

[Sen. Randy Brock, Member, Senate Finance Committee]: I would guess if you're trying to get your money back, how would you get it back otherwise if you're the creditor?

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Well, you would bring an action against the perpetrator. You bring an action against the debtor. If the debtor says this is coerced debt and you know who the perpetrator is, then you would try to emplain the perpetrator so that they're made a party and then hopefully have it all resolved as one proceeding.

[Sen. Randy Brock, Member, Senate Finance Committee]: I just looked at the issue of then what confidential is of the paragraphs that we just read.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Well, that's right. Then you might not be able to pursue an action against the perpetrator until you know who the perpetrator is.

[Sen. Randy Brock, Member, Senate Finance Committee]: And if I'm the debtor, I'm who's out of money. And if you now have you know, have have you impeded my ability to recover this lost whatever because you have this argument between two people that I, the debtor, am caught in the middle of.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: If possible. I mean, it would still be a court proceed still the court would have to find that it was coerced it. And, yeah, the burden is on the creditor to prove that it's not coerced it. So it's they're more protective than what you would normally have in a civil enforcement action trying to collect the debt.

[Sen. Randy Brock, Member, Senate Finance Committee]: And you're saying that the creditor now has to prove which of these two parties who may both have signed a document for this debt is responsible and is now limited in terms of who he can discuss this with in order to resolve his case?

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Well, within the court, you could discuss it. The judge would have to be aware of all of the relevant facts that might not be things might be redacted so that they're not publicly available, but within the proceeding itself, my understanding is.

[Sen. Randy Brock, Member, Senate Finance Committee]: I assume the debtor might well have to do his or her own investigation. Yep. Yes. Does this impose limitations on the ability to do that by virtue of the confidentiality it's being imposed?

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Of the debtor? Yeah. Because they couldn't have access to Well,

[Sen. Randy Brock, Member, Senate Finance Committee]: information behind it is to be salted and everything associated with the protections that are being given to the debtor.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Yeah. I think that most of the protections are on the debtor's information. So anything that the debtor knows about the circumstances, like who actually incurred the debt, would presumably, they would know the perpetrator.

[Sen. Randy Brock, Member, Senate Finance Committee]: President Bulutomia, I'm just wondering, there any, as I read this and the other provisions regarding confidentiality, I'm just wondering what the implications are just by the third proof. Yeah, yeah.

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: Let's No. They're good questions, but maybe think through some of them too a little bit more thoroughly. Yeah. I appreciated them. And I have one. Some people made very bad choices. Some people in relationships. Some people who terribly will make very bad choices either with the same person or with other people. If you find, know, is there a limit on how many times you could run up a $100,000 worth of credit card debt and say, oops, this person made me do it. And then three years later, another person made me do it. And that other person now is long gone. I don't wanna set up another scanning ability. So I think that those those are great questions. I mean, some of these issues were discussed of wanting to provide the protections, but at the same time not allow someone to potentially raise the plane. Ultimately, if there's a pattern Yeah. I think that might be evidence that a court is gonna look at. Right? If if it's shown that the information was submitted falsely, the creditor can pursue an action. Right? So there are protections ultimately. It's it's up to a court to decide. I mean, it would tie in with Randy's question is, are we I can see sheltering the victim of coerced death, but are we also sheltering the perpetrator? Because in the case of coerced death, that's who you'd want to go after. I mean, you could be open to scams. I mean, I could do this a couple times before something caught up. But there's also people who are sexually naive or innocent or maybe of limited ability. That same person probably wouldn't. And it's you know, is there a wait a second here. You know? You can't keep doing this. You've got to get counseling. You've got I suppose the court could order that. The court would definitely well, ultimately, this, it would be after the court in nature. But you're, I mean, you're raising really good points. The bill tries, I know, from the commit you know, try to strike that balance, I mean, right in production, but not also not being unfair to creditors. Whether this is the right balance, that's the policy of the first walk through. And it's it's gonna take a few minutes, you know, to sit down and understand Yep. What each a, b, and c, how it relates. Yeah. Because to understand that. Now I know judiciary looked at the I thought they said they looked at sections such and such. They the section that we just went through, the civil legal remedies. Yeah. That's primarily what they were focused on. Okay. Yeah. Alright. So there's another section? Well, the prior provisions about what the creditor's obligations are. Okay. That's Once the You know, the review, doing the internal review. They didn't really look at that. And then the whole separate substantive provision about bank holds. That's what I that's okay. That's probably where our jurisdiction is. You're that We've been on the list. Yeah. Okay. Send it on. Yeah. I guess I would just remind people that there's a definition of coerced debt, and it's incur part of the definition is incurred as a result of domestic abuse, human trafficking, or the abuse, neglect, or exploitation of a vulnerable adult. So it's not just somebody who's, you know, like, you know, a a sucker or a, you know, or whatever you wanna call it or somebody who's naive. It's it's somebody who could be the victim of domestic abuse, and their spouse or partner or whoever is saying, like, you take out this this loan or I'll beat the crap out of you kinda thing. So they're coerced into a situation as a result of abuse, or they are, you know, a teenager who is being human trafficked and said, you you have to take out this loan in order to pay for your apartment that you have to be in while you're being the victim of a human trafficking. You know, prostitution ring or something. You know, these are not just people who are, you know, in a making bad decisions. These are people who are literally being coerced for abuse and and or a vulnerable adult who is, isn't that maybe not in the situation to be able to tell. So use of threat or force intimidation, and then that has to be determined by this definition that it's coerced then before the protections take place. So it's first, like, is it coerced then? And if it is, then there are these protections for the for the the person who was the victim of it and and whether or not those proceed with all the things. And I think the the confidentiality is to protect the person.

[Sen. Randy Brock, Member, Senate Finance Committee]: No. It could be

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: the victim. And sometimes you won't know who the perpetrator is not because confidentiality, but because they could have, like, skipped town with the with the money or be running prostitution rate, and you're not sure who that is yet or something like that. So Okay. Let's finish walking through it. This is starting to feel like impulse. And what? The transportation. Oh, we don't want it.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: No. But

[Maria Weil, Legislative Counsel (Office of Legislative Counsel)]: that was not Friday, and it was the same kind of just an overload of information Yeah. That is just gonna take some time for our. I think it will help when you hear from the creditors, when you hear from the department, when you hear from the advocates to help kind of flesh out how this is gonna play out. They'll do a better job than I can. You're doing great. And that's for Section two, I'm not gonna spend a lot of time on. This is Vermont's Fair Credit Reporting Act. There's some, like, technical thing, but the only substance provision is basically if the if the debtor wants to go directly to the credit reporting agency, something that's on their credit report and have it removed. Same basic type of thing. They submit their statement, the documentation, and credit reporting agency reinvestigates and then makes a finding. We'll remove it or not. Section three is just a basically a text. It's also under the Fair Credit Reporting Act. And what's on line five there is a reference to the Vermont's identity theft law. It includes more than subsection a. So this is a technical change, not a substantive change. So that's it with respect to coerced. Although the other thing I wanna mention is, I'm just well, I'm not gonna jump ahead. I don't wanna do all the scrolling. But this would take effect on 07/01/2028. So this does not take effect immediately. And then also, just so you know, we talked about what constitute coerced debt. It would apply only to your outstanding coerced debt. So if it was incurred prior to the effective date, just fill out there. Okay, so there's no But that's it would apply to that state. But you can't go back. And you have some say No longer, yeah. Okay. Under this. So now we're getting into the next substantive provision, protections from financial exploitation. So basically, covered entity has a duty imposed by law and contract, this is just in general, to conduct customer directed transactions, banking transactions in a timely manner and in accordance with the customer's instructions. Again, these are findings. Finding number two, customers are increasingly being induced to authorize transactions that are not in their best interests. Therefore, it is the intent of the general assembly to ensure customers have ready access to their funds and provide a covered entity with the tools and protections to intervene in a customer directed transaction when the reasonably believes the transaction presents potential significant risk of harm to the customer. So those are the findings and the intent. And then, more specifically, it is not the intent of the general assembly to impose a duty on a covered entity to contravene the valid instructions of a customer, and nothing in this chapter creates such a duty. So, we'll go through kind of everything, but basically this is saying it's up to the discretion. Also, we're be saying that they let me do it, therefore you are liable for that. Okay. Right. So, again, trying to strike the balance. They're not liable. They don't have duty to do something if it's, you know But if they are feeling really concerned They're concerned. They have a real they they can act according to these provisions. Okay. So, basically any depository account, share custodial trust transaction account held individually or jointly, checking, savings, money market certificate, all of the instruments you would think would be covered. And then the term includes accounts held for the benefit of another, including fiduciary, guardianship, conservatorship, power of attorney, and representative payee accounts to the extent the account is maintained by a rubber entity. So banks, credit unions, trusted companies. Then there's a definition of associated third party, and this comes up in the context of if a bank feels that it would be prudent to contact an associated third party, family member of the customer, for example, or a guardian, then they could reach out and do that. So, the people who would qualify as an associated third party would have been a parent, spouse, adult, child, sibling, or other family member of a customer whom a covered entity reasonably believes is closely associated with the customer, an individual the customer has authorized to be contacted by the customer's covered entity, co owner, additional authorized signatory or beneficiary on an account, or an agent for the customer under a power of attorney, or a licensed attorney, trustee, conservator, guardian, or other fiduciary selected by a court or government agency to then sum or all of the financial affairs of the customer. So again, covered antebank, trust company, savings institution, credit union, and any subsidiaries or affiliates to the extent they provide financial services, and includes the directors, officers, employees of the entity. Customers, what you would think, a person who establishes, maintains, or is a beneficiary of an account with a covered entity, who owns, controls, or has a present or contingent legal or beneficial interest in funds held in the account, whether acting directly or through an agency, fiduciary, or representative. And then in terms of what constitutes financial exploitation for purposes of this provision, it means the wrongful or unauthorized taking withholding appropriation transfer or use of a customer's money, assets, or property, or any act or omission by a person, including by a fiduciary or other representative of the customer, whether acting under a power of attorney, guardianship, conservatorship, trust, or similar authority that obtains or attempts to obtain control over the customer's money, assets, or property through deception, intimidation, coercion, or undue influence, with a purpose or effect of depriving the customer of the ownership that money assets property, or conferreds from misuses such property so as to deprive the customer of the ownership for these events. So, in terms of the protective action that the covered entities can take, if they reasonably believe that a customer is or has been a victim of financial exploitation or attempted financial exploitation. Uh-huh. And such belief is based on information either individually observed or received from a state, local, or law enforcement agency. The coverage entity may take one or more of the following measures to protect the customer's account. Delay or refuse one or more transactions with or involving a customer, and there are limits in the amount of time delay. Delay or refuse to prevent the withdrawal or disbursement of funds contained in the customer's account. Prevent a change in ownership of the account. Prevent a transfer of funds from the account. Refuse to comply with instructions given to the covered entity by an agent or person acting for or with an agent under a power of attorney signed or reported to have been signed by the customer, or prevent a change, prevent or change the designation of the beneficiary. These are all actions that the covered entity can take, but is not as stated subsection B required to take protective action with regard to an account, but may use its sole discretion to determine whether such action is warranted based on the information available to them at the time. If the entity institutes a delay under this section, it expires at the earlier of fifteen business days after the date they initiated the delay, or when the covered entity is satisfied that the transaction will not result in financial exploitation or from court order directing the release of funds. And then, unless otherwise directed by a court, the covered entity may extend the duration of delay for up to an additional fifteen days based on reasonable belief that the financial expectation of the customer may continue. Then, any refusal delay or other action in good faith under this section shall not constitute and then this is just basically a list of all of the kind of UCC banking provisions that basically say, you have to do what the customer tells me to do. Right? All the check clearing, just honor their transactions, so on and so forth. So, your the the covered entity is not violating those provisions if it takes the protective actions here. That's what one, two, and three are basically saying. And then in terms of if the covered entity chooses to notify an associated third party, it can do so If it determines that such disclosure is in the best interest of the customer, that the covered entity may choose not to notify. If it believes that the third party did as well as or may be engaged in the financial exploitation, The disclosures to the third party should be limited to only information necessary to convey its suspicion. And any disclosure is exempt from the privacy protections under Vermont law and to the extent permitted under federal law. The immunity provision is, again, just protection for the covered entities for taking the actions authorized here, provided those acts for omissions are in good faith and do not amount to gross negligence or willful misconduct. Provisions of this chapter this section are construed liberally. There's any ambiguity. And that's pretty much it for the substantive provisions.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: So I'm definitely supportive of moving this bill forward. I just wanna ask if Maria, did you write this from whole cloth, or is this from model legislation that we are trying to adopt here in state of Vermont?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yeah. So there was a working group. I think representative Grady mentioned a couple of working groups, one on first head, one on this, And I'm looking at Chris Delia because he's a member of the working group. And they had put together some information and provided it to me. I'm not exactly sure what the source of all of that information, he can speak to that a little bit more specifically and then how similar or dissimilar to other state laws available. There's a new story on the other night about a gentleman who had run into this very attractive young woman on the Internet and over time invested his life savings. His son caught on actually did the research. The story was they're not even sure she was real. They think she was a fighter. And then we did have a lady come in who had been defrauded in one of those voting sites twice. She came in, you know, send send money up. You know, I'm just saving up so I come and be with you in The States. Would this allow a family member who was getting very concerned about somebody who was sending money to some person overseas on a dating site, which was a known scam or did seem to be investing way more than was prudent with some entity on the internet. Would this allow them to go to the bank and say, look, I am really concerned that my mother or my father or my brother is getting themselves in a financial jam and can you just put a hold on this? Well, don't let her them that they send any more money until I have a chance to do the research and find out if this is scam or real. So it's an interesting question. This doesn't speak to third parties initiating contact. Only It's a third party, though, and bankers and credit unions can address it. If they have concerns, they can I don't see why they couldn't go to a bank and convey their concerns? You know, the bank can't share financial information, so there might be limitations there. But the bank a heads up. They can give a heads up and then do their own, you know, investigation, try to work with the family. Wants to wire up the $200,000 to Nigeria that maybe they could put a hold on it. Yeah. So Okay. It depends on the circumstances. I mean Okay. Family member and it but can't control what family members do unless you think that some protective services are necessary, go to a court, but, you know, stay on his house. Yeah.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: Is he his bill within the confines of domestic abuse or Not that

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Oh, the next Yes. Or the next Yes. This one could be anybody Okay. Walking into a bank

[Sen. Randy Brock, Member, Senate Finance Committee]: Got it.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: And asking for some unusual About the monthly transaction. Okay. Raises concerns. I mean, they do call if they if somebody comes in with a check you've written or larger, a couple $100, and they don't look like your associate, they will call. They have a call. Michelle? We are not taking we were ahead of time, and we took up the testimony from the Burlington And Air when we finish here, I think we're actually going to go home. Okay, well thank you for your help. You will see Patrick tomorrow on Friday? Yes, he'll be in person. Yes, I got finished with the bill. He just took some testimony on January. Okay, thank you, Deputy Attorney. So, these banking, the bank hold provisions would take effect immediately on passage. So, know that. And then, for the next two sections are reporting provisions. Section five is with respect to suspicious transactions. Basically, just asking the commissioner and financial regulator consult with representative from Bank System Credit, just to get a better understanding of the number of instances of suspicious transactions, the dollar amount, circumstances, whatever, collect that data and then report it to the standing committees of jurisdiction. That report will come back next year, January 2027. Kind of a similar report with respect to forest data, of course it's much further up, that would take effect for 2028. Again, just regarding the utilization of these, the course debt protections. Meeting with various stakeholders. And just frequency, of course, to explain, etcetera. Just data about implementation for STEM. So that's pretty much it. Okay. Thank you. Welcome. You know what? People will again take a little while to sort out what you want. But one more, but this might make this

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: It might be a segue, but to the previous point, I it definitely makes sense with mortgages and commercial loans. I'm surprised a lot of those would still because when I've ever taken out of AutoZone now, my wife is gonna be on it. She needs to be there with the other person. I mean, you can't do that online by credit card. So it makes a lot of sense to buy a credit card, uncollateralized debt. That's easy to take out. But since, there's a lot of checks system before you they give up that asset and sign some. I'm not advocating to exclude that on a loan. I'm just surprised that it hasn't been considered prior to that, but maybe our banker Frank, Chris, speak to that.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: We will Chris with now. I'm gonna just go to Joe. Yeah. It's sitting here patiently. And then Next question. Do we have advocates? I've surely do. Nobody's reached out. Nobody has reached out. I know there's one lobbyist who's very interested, Gail, so maybe we could see if she's got my daughter.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: I got a sick one year old,

[Joe Valenti, Director of Policy, Department of Financial Regulation]: so I have to get my three year

[Sen. Ann Cummings, Chair, Senate Finance Committee]: old from daycare threshold, so

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: I'll be listening.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: They do horrible things if you don't pick children up like that.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Well, the curve.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: All right. Thanks, Candy, don't you?

[Joe Valenti, Director of Policy, Department of Financial Regulation]: Joe Valenti, Director of Policy at EFR. I'll be brief, I know you all would like to go home, and I can tell that we won't get to the bottom of this topic today. But a few things I wanted to point out. First of all, so this bill is in response to the two studies that were in Act 23 last year, the DFR Housekeeping Bill. It was decided that they would both be combined into one bill, in house commerce, for both of the studies. We met twice virtually with the stakeholders that were named. We did have a couple of additional parties that we invited for the second conversation based on feedback. We submitted draft reports for comment before we submitted them, and both of those were submitted here on January 15. I'm happy to they're on the legislative report site, but I'll also, reshare them with, Charlotte so that you'll have access and you can peruse. Neither one of them is striking totally new ground here. The suspicious transaction hold laws exist in about 20 something states, and they vary in their scope and what they cover, what they don't. We also have suspicious transaction holds already in the Vermont securities regulations for securities transactions. So that was another piece that we could rely on. In terms of coerced debt, representative Randy had mentioned seven states that have enacted laws on this topic in recent years. New York was the most recent. They passed a law last December. New York has an unusual process where the governor can sign a bill while asking the legislature to amend it after it's been signed. And so it was amended, and the new language, I think, was signed within the last month or two. So there were some revisions that are not in the report that we published, but New York has a law. Maine has a law. Connecticut, Texas, Minnesota, California. So it's a wide variety of states. I'll say on the course debt piece that they have taken a lot of different approaches in terms of what types of debts are covered To the question about auto loans in particular, there was a witness in house commerce, from an auto dealer, who had expressed some concerns with it. I think the challenge there, for example, Connecticut's law only applies to unsecured credit cards, and that is about as narrow, as these loans get. But that means it's unsecured, it's credit cards only, it's not even including a personal loan or some other type of unsecured piece of it. I think the auto loans, which some states do cover, the rationale was that it is secured, but it is it is something, it is movable property that can be repossessed, that can be seized. It's also one of the largest categories of debt, along with credit cards, that most people have, and it is something where advocates have had particular experience where people have had difficulties being coerced into auto loans. But I would say, overall, in meeting with the study groups on both topics, there was a very clear consensus on suspicious transaction holds. We did not have consensus with the new words debt language. We've we are comfortable with where the bill has landed, but we have been neutral on it on it to date. And it really comes down to this question to use the Donald Rumsfeld term of the unknown unknowns in that a lot of these state laws are fairly new. We don't know at this point sort of how they're faring in terms of the number of claims. I think there is I don't want to speak for other parties, but there is a concern that you could have a large number of people filing coerced debt claims that may or may not be legitimate. There may be instances of of fraud. And, you if you're looking at it from a lending perspective, these could be fairly large unexpected liabilities if you need to answer all of these claims. I think what what we've heard from advocates is that the expectation is that the numbers are likely to be fairly limited. It's people who are in dire financial circumstances. I think the part of the sort of challenge here is some of these loans, particularly the unsecured loans, may have been written off anyway, and if it's possible to collect from a perpetrator, then maybe that's better than the status quo. But there are all of these different factors and variations that we got into in both reports. So I can stop there and take any questions that you might have.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Okay. So it's the first section that you're being neutral on because we don't have enough of a track record to say that this couldn't be used progenically or know, it could turn into a huge yeah. It's it I guess if it's only going forward from the date of an act, that kind of eliminates this idea that you get a huge backlog of unanticipated,

[Joe Valenti, Director of Policy, Department of Financial Regulation]: know, coerced debt. What's also the so the two year I was not involved in determining the effective date.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yeah.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: But having an effective date that's two years out does mean that it gives all parties time to prepare

[Sen. Randy Brock, Member, Senate Finance Committee]: Right.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: And to

[Joe Valenti, Director of Policy, Department of Financial Regulation]: see if circumstances change or I mean, I would like to think that if any one of these states, if they have seen a disastrous result I mean, a lot of these laws, the oldest is from 2019, but a lot of them were in the last sort of two to three years, that if any of these states do see a dramatic result or it seems to be working as intended within the next year

[Sen. Randy Brock, Member, Senate Finance Committee]: or two we would know.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Is it possible that a lending institution could just put at the bottom, I certify that I am not being coerced, this is own very well.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: I'm not an attorney, so I can't advise on how successful that would be. Know that's the point, that is the point that has been raised. I mean, there is also, there's the filing of the claim, and then it is up to the creditor to investigate and validate. And it's possible, they may say this does not have sufficient documentation, and then they can continue collecting on that debt. They just wouldn't be able to transfer or sell. I think the other variation here that makes it complicated is it could be, you know, it could

[Pat Davidson, Joint Fiscal Office]: be a new

[Joe Valenti, Director of Policy, Department of Financial Regulation]: loan where someone is paying as agreed or not making payments, it could also be a debt in collections, it could be with any number of lenders, whether it's state charter, national, you have it, which is also why we have those two study provisions for both parts of the bill at the end, and both of those, they look a little bit clunky because it's requiring us to consult with stakeholders. It's literally because we would not be able to get the data from the institutions that are not in our jurisdiction. And so we sort of have to crowdsource how both of those provisions are going by talking to the people who are privy to that information.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Okay.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: We're gonna be in seven days, everybody went up straight and

[Sen. Ann Cummings, Chair, Senate Finance Committee]: their Everybody eyes are sit up straight and I put my eyeball up. All right, Okay. So there's a risk either way. I mean, the risk is on the consumer one way that there's going to be coerced debt. There's risk on the lenders that they are going to lose money, basically not be able to collect debt, which may result in their being a little more cautious about debt. Probably the big one would be credit cards, which it's really easy to run off of a lot of debt in really short order. And nobody's really as long as I pay $25 a month, I can no. I forget what my credit line is now, but I can run up a whole lot of debt paying off very little. I would say it would be the credit card companies that would be most at risk here. Would they be part of

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: the discussion? So a lot of there are

[Joe Valenti, Director of Policy, Department of Financial Regulation]: probably some credit cards that are issued by Vermont based institutions. I would expect a lot of those are coming from

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Yeah.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: National institutions that are not not based here.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: I think the biggest risk is to the people who are the victims of abuse and that are being coerced into taking debt because of their circumstances as, you know, an abused spouse or partner or, you know, abuse. Mhmm. Like, as I said earlier, and I I think it's it's really important that we hear. Mean, Oh, yeah. We're behind us, but hearing from them about the the instances where this has happened. I think this is a growing problem and people are their lives are being destroyed, one, because of the abuse, and then on top of that, the financial burden of all of this coerced debt. And so, obviously, we wanna have protections in place to make sure that the the finance financial institutions don't incur more Correct. Debt than necessary, but my primary concern is with the potential victims Right. Who are in this horrible, abusive situation. Or being trafficked. Or being trafficked. I mean, we're talking about, in some cases, young girls who are then put in this position where they're, you know, adding to their abuse, that they're they're adding financial obligations on top of it. It's just we're awful situations. We will hear from the advocates, and we will hear from the problems. I think we also need to make sure that we don't make it more difficult for everybody else to Well, think in a lot of cases this gets written off as bad debt, and that so they're they're not protected anyway. And so Only on the pain. No. The I mean, the company is writing off as bad victim is paying off that debt. Yes, I mean if they're paying it off, but in some cases they're put into so much debt they can't pay What it

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: happens to the victim's credit rating in all of this? Does that get white clear? Yeah, that

[Sen. Ann Cummings, Chair, Senate Finance Committee]: was in

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: there. That gets right.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: So it would be flagged as disputed when the claim was filed, and then if that claim was successful, then the creditor would request that information be removed. Again, the structuring of that is because Fair Credit Reporting Act preemption is a very complicated area, and so it's difficult for us to be able to dictate what credit reporting companies can or should do in different situations, but the financial institutions or the lending institutions that are regularly reporting are the ones in the driver's seat with regard to what is reported.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: But this does require that they report to the credit bureaus.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Mr. Zay, I completely agree with you. Mean, that's where I was going at the credit cards is I think it's incredibly easy to open up a credit card that it's vibrant and I could see the abusers using those opportunities to exploit. I just don't know if car loans are as easy to open up without somebody physically being present signing off on. But I'm fine with car loans still being in there. I'm not trying to advocate for it.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Just I said, I know someone who the price of domestic peace wasn't a pickup truck every year. And then They both went. They both signed off, but there was definitely coercion going And part of

[Joe Valenti, Director of Policy, Department of Financial Regulation]: the challenge here too is that these are, you know, these situations sort of fall between the gaps, because, for example, you have a very clear case of identity theft, you have no idea where this theft came from, you know, no idea who took it out, but you see something or you're getting statements. Right? We have procedures for identity theft already. We have procedures for other kinds of situations. We don't have something for, well, technically, your name is on this, but it's really what you were coerced into sign.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: Well, that's why this bill's really exciting, because we get the opportunity to protect victims, and I'm really excited about that.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: So we will hear from everyone, and then we will vote, amend and vote. Okay? Okay? Sounds good.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: Are we doing more?

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Anything else you think we should know, Richard?

[Joe Valenti, Director of Policy, Department of Financial Regulation]: Not for today. I will make sure that you have copies of the reports.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Okay. That would be very helpful. Yeah. That would be helpful. Because this is the first time this committee has dealt with it at all. Mhmm. So it is all I think that went through the house and health and wealth.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance Committee]: This year, and then they funded Yeah.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: She well, this this bill did. The house commerce. Yeah. And so it it didn't come here last year. I don't remember going to health and welfare, so I'm not sure where it went. Well, it last year, we asked for the reports. Right. Yes. The miscellaneous DFR bill. They're not doing that.

[Sam Brown, Deputy Commissioner, Vermont Department of Taxes]: That was in here. Okay.

[Sen. Ann Cummings, Chair, Senate Finance Committee]: Thank you thank you, committee.