Vermont Legislature SmartTranscripts:

[Senator Ann Cummings (Chair)]: But I think we're going to have to have an amendment on this bill because we don't Senate and we're gonna end up with the House bill. And if Senate decides they wanna do this, then they could substitute what they've already done.

[Senator Scott Beck (Member)]: I am not. Okay.

[Senator Ann Cummings (Chair)]: No. But well, they have they have created the work we just saw. They gathered, they bottlenecked over whether or not at the end it was mandatory to merge. And we just went through. It's not mandatory to merge, but if you don't, you have to live within the foundation formula and you have to meet the education standards. If you can do that, it's more power to you, I guess.

[Senator Randy Brock (Member)]: Larry, are you going over it?

[Senator Scott Beck (Member)]: He's going over it.

[Senator Martine Larocque Gulick (Member)]: You want me to

[Maria Royal (Office of Legislative Counsel)]: share my screen for you, Senator Beck?

[Senator Scott Beck (Member)]: Yeah, could you?

[Beth St. James (Office of Legislative Counsel)]: Yeah, will you just send me what

[Senator Martine Larocque Gulick (Member)]: you want, Sharon? I'm happy to get it.

[Senator Scott Beck (Member)]: Yeah, it wasn't you at all. Okay.

[Senator Ruth Hardy (Member)]: Ruth has chocolate. I have chocolate now. Charlotte.

[Senator Ann Cummings (Chair)]: Own little chocolate. I have one beef stick. I'm good until midnight.

[Senator Scott Beck (Member)]: The

[Senator Randy Brock (Member)]: He doesn't let us or

[Senator Thomas Chittenden (Vice Chair)]: be sensible. Hope. We're hungry.

[Senator Ann Cummings (Chair)]: We'll stop messing around. Okay.

[Senator Scott Beck (Member)]: Do you need to tell me?

[Senator Ann Cummings (Chair)]: What are we doing? We're we're getting it up on the street. There are finance things in here. If this gets and it ends Senator Ann is going to hear it tomorrow morning at eight and then we will see where they go with it. But we should at least know what it is and see what the finance parts are. But this is, again, they're completely different than what's said and yeah. It has put together. It's eating much. Enough? No.

[Senator Scott Beck (Member)]: I know.

[Senator Ann Cummings (Chair)]: I didn't say anything.

[Senator Scott Beck (Member)]: Just send me your. I'll send it as well. I don't know what it would. Oh, there we go. Done? Yeah. I had to pick the file. Yeah. Even that, I'm not sure why it was enough.

[Senator Martine Larocque Gulick (Member)]: Alright. Do you happen to share

[Maria Royal (Office of Legislative Counsel)]: this PDF on the screen?

[Senator Scott Beck (Member)]: That'd be great. Thank you.

[Senator Ann Cummings (Chair)]: Yeah. We got them. Blow that up a little bit so we can all see where our accounts are.

[Senator Randy Brock (Member)]: Because that's the first thing we're gonna get.

[Senator Scott Beck (Member)]: That's the first thing that I get. Okay. What is this? So 30,000 feet, what would happen under this proposal is that every existing school district would be turned into an attendance zone. What? I call before I call it attendance zone. Zone. Zone that includes basically the same lines to every school district, just an attendance zone instead of a school district. Attendance zone. Okay? And each attendance zone would have an advisory board. I call it a local education advisory board They would be responsible for communicating with the school district as to what the needs of those schools and those children are. They would be responsible for determining whether they tuition or not and for what rates they tuition. Are they elected? They will be elected. Yep. And and they would also have the power to disagree with any school district that tried to close a grade in any of the public schools within their attendance zones. And I included in language where if the school district and each of these bigger blog is a school district, If the school district decided to close a grade at a public school in their district, that would require a three quarters lower of the school board. And that local advisory board could disagree. And if they did, those would go to AOE for decisions. So each of the attendance zones are assigned to one of these districts up here. Up there represented by one of those 11 solid colors would be a school district. Each school district would be composed of a number of different attendance zones based on the existing school districts. Okay? Why have these been chosen? For scale, but predominantly what this map allows for is that every child in Vermont would now be part of a school district that operates at least one CTE center. And so every kid would have clear access to a CTE center. And none of this, a kid's in a school district, school district doesn't have a CTE center, it can be difficult to get the kid to a CT center. Okay? And that's kind of where, that's kind of the way the lines are drawn along those lines. Existing tech centers. The existing tech centers that we have right now. That's right. Yes. Okay. If you could scroll up to Chittenden County.

[Senator Thomas Chittenden (Vice Chair)]: You just said they would be in an existing would it be in a school district?

[Senator Scott Beck (Member)]: Yes. School the attendance zones would qualify as a district? No. The greater the greater the the colors up here are each a school district.

[Senator Ann Cummings (Chair)]: Did you have choice within that school district?

[Senator Scott Beck (Member)]: I would. Yes. Kids would all have inter district choice within that school district, any public school. If they're in an attendance zone that currently tuitions, then those kids would be able to pick amongst independent schools or even public schools outside of the school district. In Boston. Oh yeah, of course. So

[Senator Randy Brock (Member)]: Scott, it gets around, I'll take Georgia for example. Okay, Georgia. It's in that top

[Senator Scott Beck (Member)]: Canton District. I'll point to it. I'll

[Senator Ann Cummings (Chair)]: lot of the It's Georgia,

[Senator Scott Beck (Member)]: to okay. Yeah.

[Senator Randy Brock (Member)]: Some of the students there come down to Milton, go on down to Essex, South Burlington. Under your proposal, those students would still be able to

[Senator Scott Beck (Member)]: That's correct, yeah. So Georgia would be an attendance zone because Georgia is an existing school district, and the kids from Georgia, they operate a public school up through grade eight, when they hit nine through twelve, don't operate a high school. So at that point, those kids could go to, I don't know, closest, they could go to a lot of different places, but the closest is St. Albans and maybe Fairfax or Milton. They could still go to those schools just like they do now. They could still go to a school outside of the supervisory Outside of the school district, outside of the Northwest Area District. Just like they do now. Okay? Now what's going on in Chittenden, why diagonal strikes? I like the part of Chittenden County is just a little, they have eight high schools, 22,000 kids approximately, but they only have two CTE centers. And so I didn't you know, If you make it more than two districts, somebody's not gonna have a CT center, right? So what I put in the language here was that what would happen in the Chittenden County Grand Isle area is that they would you know, upon passage of this act, they would form a task force of people from that area to recommend two things. One

[Maria Royal (Office of Legislative Counsel)]: Okay.

[Senator Scott Beck (Member)]: That they could divide themselves in up to four different school districts. And two, if they organize themselves in such a way that some of their school districts do not have a CTE center, They have a plan in place so that every kid in that entire area has equal access to CTE and not you know, right now we have districts without CTE and sometimes they get closed out and that every kid has equal access to CTE, but they could organize themselves into as many as four school districts. So that means we would end up with anywhere between, if Chittenden County said, we're just gonna be one big school district, which probably not very likely, but maybe we would have 12 school districts, 12 I

[Senator Ann Cummings (Chair)]: see this district. These are attendance zones.

[Senator Scott Beck (Member)]: The colors are school districts. The colors are school districts. There are attendance So

[Senator Ann Cummings (Chair)]: where are the attendance zones?

[Senator Scott Beck (Member)]: Well, you can it you have to know your area.

[Senator Ann Cummings (Chair)]: I thought these were attendance zones you were showing.

[Senator Scott Beck (Member)]: No. No. The colors are school districts. Within the school districts, there are attendance zones.

[Senator Ann Cummings (Chair)]: Okay. So you are dividing the state into what?

[Senator Scott Beck (Member)]: 12 to 15 school districts.

[Senator Martine Larocque Gulick (Member)]: Mandated, mandatory?

[Senator Scott Beck (Member)]: Yep, this would be the map, This would be what we do. So for example, in in your area, Senator Cummings, you would have I think it's called the ones at Washington.

[Beth St. James (Office of Legislative Counsel)]: Central Area.

[Senator Scott Beck (Member)]: Central Area district in your current u 32 district, that would be an attendance zone. And, Barry would be if that Barry School District Barry, you would be an attendance zone. And Montpelier School District would be an attendance zone. But they would all be within the school Well, an attendance zone is responsible for advising the school district.

[Senator Ann Cummings (Chair)]: But you're making our current school boards

[Senator Scott Beck (Member)]: Our current school districts. Advisory. Yeah. Making them advisory.

[Senator Ann Cummings (Chair)]: And there's one elected school School board

[Senator Scott Beck (Member)]: above yes.

[Senator Ann Cummings (Chair)]: Okay. I thought the map was showing this attendance. No.

[Senator Scott Beck (Member)]: What's happening in the lower area of the Caledonia District? I see there's different calls there. That's an interstate school district. Okay. Yeah, the lower one, right? Thought, yeah. Right there, interstate. Okay. That's Rivendell. I

[Senator Ruth Hardy (Member)]: thought that we decided that we were working on the finance section

[Senator Ann Cummings (Chair)]: the bill. Is way up. It is, and we are not taking any further testimony.

[Senator Scott Beck (Member)]: Right. It's an issue of failure. It's failure.

[Senator Ann Cummings (Chair)]: So everyone gets chance to be heard. It's being presented to education tomorrow. They will have their say as to this. I assume that's if we get the bill out on the floor tomorrow.

[Senator Scott Beck (Member)]: Which bill are you referring to?

[Senator Ann Cummings (Chair)]: The educate nine fifty five.

[Senator Scott Beck (Member)]: Oh, I don't think it's gonna be on the floor tomorrow. Well,

[Senator Ann Cummings (Chair)]: we're good. It's we're gonna we're supposed to have it out of here tomorrow.

[Senator Scott Beck (Member)]: Right. But it won't be out of four tomorrow.

[Senator Ann Cummings (Chair)]: No. Okay. Well, unless they Okay. Move things.

[Senator Scott Beck (Member)]: So that's the that's the high. The state is in anywhere from 12 to 15 school districts, on what Chittenden County does. Every kid has a clear path to CTE. And within each of those school districts, there are 119 attendance zones for the 119 school districts, and they have some things that they do. Yeah.

[Senator Martine Larocque Gulick (Member)]: Thank you. Thanks, Scott. Clear path to CTE. I'm just questioning that statement. This week, when we were on the task force last summer, we looked at doing CTE districts and we found that when we dug into the data that actually they're not equitably, geographically placed around the state and 're woefully inadequate meeting the needs of every kid who wants CTE.

[Senator Scott Beck (Member)]: Because they're all different.

[Senator Martine Larocque Gulick (Member)]: I don't understand, and they have different programming as well.

[Senator Ann Cummings (Chair)]: They're already spending kids on the Caledonia. I guess

[Senator Martine Larocque Gulick (Member)]: I just don't understand

[Senator Scott Beck (Member)]: that. Well, mean, I think that's, know, this is not, you know, this doesn't, I mean, I think we do need to build more CTs, but I don't think, you know, like, I think I think should probably have a c a CT. And I don't I mean, if your point is is that if somebody lives in, Barrie City, that it's easier for them to access CTE than it is from, say, a kid in Waterbury, like, your point is well taken. Yeah. I

[Senator Martine Larocque Gulick (Member)]: mean Yeah.

[Senator Scott Beck (Member)]: Well, I

[Senator Martine Larocque Gulick (Member)]: mean, I think we found out the placement of CTEs were were political decisions way back when, and it was like whoever had the political power in this building got the CTE. It wasn't based on, like, geographic equity. I don't I don't recall

[Beth St. James (Office of Legislative Counsel)]: that I

[Senator Ann Cummings (Chair)]: think I'm gonna move this along because I'm not getting into political decisions in the 1930s. All

[Senator Scott Beck (Member)]: I need by clear path is that there's not a district line between a kid and a CT.

[Senator Ann Cummings (Chair)]: Okay, so

[Senator Scott Beck (Member)]: That's all. That's what Okay. We're

[Senator Ann Cummings (Chair)]: I think we need to go forward and find out how we're gonna save money.

[Senator Scott Beck (Member)]: Okay, so on the spending side, on the finance side, what I propose is that we do not move forward with the Act 73 Foundation And instead, what we do is we adopt S two twenty, 112% in What's S two twenty? Where we did 112% in FY twenty excess spending threshold.

[Senator Ann Cummings (Chair)]: Okay. And Okay.

[Senator Scott Beck (Member)]: We'll go

[Senator Martine Larocque Gulick (Member)]: to that.

[Senator Scott Beck (Member)]: Where these these districts would stand up, start operating on July 1, so for FY thirty. Okay? So a hundred and twelve, FY twenty eight seven or FY '28, FY '29. And then when we hit FY '30, tip down 01/2011 and go down 1% a year until we hit 01/2005. And that'd be the okay. Why did I why did I pick 105? Because 105 is the average district spend in the state of Vermont this year. And the only other thing I really did on the finance side was to put in the language here, I've a chance for you get is that there would be a four, and that that that base at the excess spending threshold is shy too. Across the halls. You could not spend less than 90% of that number. And we do have about a dozen school districts that are spending less than that. And so for those dozen school districts, they would get But pulled up to basically everybody would be sitting between ninety and one hundred and five. If a district wanted to go above 105, they certainly could do that, but they would hit the excess spending

[Senator Ann Cummings (Chair)]: pressure What about with those the city of Barrie or Springville or up in your area in The Kingdom? There

[Senator Scott Beck (Member)]: are some districts that would be pulled up. Well, their spending would be pulled up, with their tax rate, right? Not necessarily because if you're bringing these high spenders down

[Senator Ann Cummings (Chair)]: Okay. So South Burlington's gonna be brought down.

[Senator Scott Beck (Member)]: They're not actually nice numbers. What do

[Senator Martine Larocque Gulick (Member)]: you do about capital debt? Do you deal with that?

[Senator Scott Beck (Member)]: The new district would assume the capital debt for the district. That would probably be a factor in what a Chittenden County decides to elect.

[Senator Ann Cummings (Chair)]: Okay and that would be mandatory.

[Senator Scott Beck (Member)]: That they come together into one school district? Yeah. Yes.

[Senator Thomas Chittenden (Vice Chair)]: So I wanna comment and then a question. One You

[Senator Ann Cummings (Chair)]: save money.

[Senator Thomas Chittenden (Vice Chair)]: You really illustrate to me that Chittenden County needs another CTE center. So I'm just gonna say that, but that I'll

[Senator Scott Beck (Member)]: put that I think that could be part of their plan.

[Senator Thomas Chittenden (Vice Chair)]: Yep. But secondly, can you elaborate on your timeline for this governance? Are you building off of work that has been done in the house for standing up these new districts? Because that requires elections, that requires figuring out who's got what proportion meant. How are those new master school districts gonna be online and functioning?

[Senator Scott Beck (Member)]: Know is the they know the end date, which is they have to be up and running on 07/01/2029. Okay? I haven't had a chance to go through the fine tooth, but I think, you know, we would set those guidelines in 2027. This is when you're gonna elect your people. If if we wanted to do a word system, that's where we would do that. I don't know if we want to. But we would make we would make those decisions 2027. Okay. I'm watching the clock. I'm watching I'm done. That's all it is.

[Senator Ann Cummings (Chair)]: That's it. I think this

[Senator Scott Beck (Member)]: That's it.

[Senator Ann Cummings (Chair)]: Needs to go to senate finance. I'll go there and identification. Yep. This may be a decent idea, but it's two years too late. '73 is the law. So we at this point in the session, to jettison everything we've done for two years and then put in something that has yet to be vetted is difficult. I mean this this is a lot of I'm still not sure how anyone's saving money. I mean, say, well, we're gonna forbid you to spend more.

[Senator Scott Beck (Member)]: No. No. You can

[Senator Ann Cummings (Chair)]: Well, no. You'll pay double.

[Senator Scott Beck (Member)]: But you'll pay

[Senator Ann Cummings (Chair)]: That's pretty close.

[Senator Thomas Chittenden (Vice Chair)]: Yeah.

[Senator Ann Cummings (Chair)]: And we're gonna make you spend more.

[Senator Scott Beck (Member)]: Yeah. There's a little bit of spending below 90%. Yeah.

[Senator Ann Cummings (Chair)]: Which in some of your poor communities would raise taxes.

[Senator Scott Beck (Member)]: I

[Senator Ann Cummings (Chair)]: happen to have some of them.

[James Duffy (Joint Fiscal Office)]: No. But they have

[Senator Scott Beck (Member)]: a little trouble down actually.

[Senator Ann Cummings (Chair)]: Along with whatever the general raising. Okay.

[Senator Thomas Chittenden (Vice Chair)]: I do like the departure from the foundation formula restricting local, say. Well, I think what I heard and what you just suggested is using the excess spending threshold in another way, continued way to give the district's continued choice, but with patenting. So that is something that resonates more with what I wanna see in an education system at Vermont. So I'll say that much.

[Senator Scott Beck (Member)]: Okay. Looking for this.

[Senator Ann Cummings (Chair)]: We are two years down the road. Three.

[Senator Scott Beck (Member)]: But this this and I just wanna make this I just wanna make this point is that this is not this is not a contingency check back plan. This is like we're gonna we're gonna do something. The enacting districts. Yeah. We're not gonna do a study. We're just we're gonna do something.

[Senator Ann Cummings (Chair)]: Send to Hardy, and I've got a question for Beth.

[Senator Ruth Hardy (Member)]: It seems to me that your proposal for the districts was something that was very similar to what you proposed in the task force and was not supported by the task force. And that task force did a lot of work in Senator Gulick, you talked this more than me. Eight months ago. Did a lot of work or last fall about districts and consolidation and forced consolidation and what there was an appetite for. I remember reading about your proposal to to do school districts around CPE centers and 12 school districts. I so, I mean, I think that I have concerns with trying to force something that has been studied and been rejected. And and then the in terms of the proposal about sticking with our current formula and just ratcheting down the excess spending threshold, I guess I would ask why did you not propose that in January 2025 before we went down this huge path? And, you know, the governor came out with his proposal. You could have come out with your proposal then, and it actually might have made a difference. But

[Senator Scott Beck (Member)]: Yeah.

[Senator Ruth Hardy (Member)]: As the chair said, we are way down this path right now. And, you know, this proposal may have may have some worth to it, but it's really hard to talk at this eleventh hour or twenty fourth hour, twenty third hour to about this, and it would have been really great if

[Senator Scott Beck (Member)]: If you remember last year, we had a finance plan that came out of senate ed that was supported by senate ed. It was supported by this committee, and it was supported by senate appropriations, and people were fine with it. And then we had a secret squirrel thing going on around here. And something got jammed in there that wasn't vetted that nobody discussed in this committee. So I think that comment brings a little hollow with me.

[Senator Ann Cummings (Chair)]: Okay. We are going It was actually They Mary Bennett. Bottom line is that neither the house nor the senate could get the votes for mandatory systems, and it's been tried either in committee or on the floor. And so to go to a mandatory system now, I think the fallback has been we're going to give you a chance to fix it on your own. But in the end, pick a day. The foundation formula is going in, and you are going to live on the budget. And the budget is set on national standards, and we're still getting studies in on what that must be, and then we'll have to figure out how we will pay for it. But that's where we are. The the mandatory is the money. We did we're agnostic about how you set up your school district, your superintendency, or whatever. As long as you can live within that budget. You can't export your co costs to Chittenden County or a couple ski towns. You will live within it and you will meet enhanced educational standards. You are not gonna be able to graduate kids who can't take their blue and gold scholarships because their schools didn't offer enough classes for them to be accepted into the University of Vermont. Any kid that wants to take those classes is going to have to have the opportunity to take them, and if you get outside of the big cities, they don't. And so this is where we are. We can decide at this point either and I will wait to hear from Ed in the morning, but either we are going to go to conference with the House proposal, which means there's nothing different in the Senate proposal, so you can't bring anything in different in conference. If it's not in either bill, it can't be altered, you're all the same. And whatever we do with finance, or we're going to put the best work, and my question for Beth is, as written, is there a mandatory point at which, was it mergers that the House couldn't agree on, or the Senate had?

[Beth St. James (Office of Legislative Counsel)]: Beth St. James, the Office of Legislative Counsel, I'm not sure I understand the question.

[Senator Ann Cummings (Chair)]: I was told that the work of the education committee, this was their work. They deadlocked at the end of whether something should be mandatory or not. Do you know or can you tell us what that was or what's in the bill?

[Beth St. James (Office of Legislative Counsel)]: Nothing in the bill is either passed by the House or draft 6.2 of Senate Education that makes a school district merger mandatory. There was discussion in Senate Education about that process, but I feel uncomfortable representing the policy positions of the senators on that committee. That means what?

[Senator Ann Cummings (Chair)]: Deadlock, right? Was the mandatory section?

[Beth St. James (Office of Legislative Counsel)]: There were some creative phrases used in positions, so I feel uncomfortable asserting what those phrases stood for, but I think generally speaking, yes. Okay, so if

[Senator Ann Cummings (Chair)]: we do this and put it on, we are putting on what is pretty much the reposition of the education permit, can, as we go forward, discuss whether or not we want a mandatory trigger or we're comfortable with the threat of the fiscal reality of the foundation formula being enough to strongly encourage a decision, or if you are one of those schools that can live on what is nationally an adequate amount of money to produce an excellent, you know, formula said minimal, an excellent education, the more power to you we should have in teaching classes on how to do that. And it gives you some flexibility. We've got several reports coming back, nothing is set in stone until that final trigger is pulled.

[Senator Thomas Chittenden (Vice Chair)]: So as a matter of fact, I see a lot of merit in your approach, but I'm a realist at heart, and so I don't see either the education committee or this one fully embracing and adopting this. But what I do see is I'm glad they're presenting to senate Ed because I they've probably been knee deep in the district conversation more than us. So I'd love to hear their thoughts or how you presented tomorrow morning. But the second piece of this, does this come forward with more support than just just you? Is this also are you putting forward support from your caucus and the administration regarding the departure from the foundation formula towards leveraging existing structures like the excess spending threshold? Because that has a great deal of merit to me that I'd love to be germane at any community conference where we start to step away from my biggest issue with the trajectory of Act 73, which is where Montpelier dictates how much people get for their schools and how much the taxes they're gonna pay, which is some of the merits of our current system. So is that part of where you sense more support than just yourself? I I should not Yeah. I should not speak for

[Senator Scott Beck (Member)]: the administration. Sure. Come in, speak for themselves, but I would very much welcome to come again and speak to you for this.

[Senator Thomas Chittenden (Vice Chair)]: So the last thing I'll say, if there's a way for us to make germane for continued conversations on this, the notion of a departure from the foundation formula towards the leveraging of the excess spending threshold to reduce millions while still monitoring differences in our community's priorities and and willingness to spend on education. That is the trajectory that's mission of the seventh grade gone in,

[Senator Ann Cummings (Chair)]: and I support. Okay. Need to get your law degree and become a member of

[Senator Scott Beck (Member)]: the I know, but

[Senator Thomas Chittenden (Vice Chair)]: I don't think Brigham was necessary. Is

[Senator Ann Cummings (Chair)]: the law of the land. Despite anything in Washington, This is still The United States, and they are the final arbiter of the constitution until another supreme court changes it.

[Senator Thomas Chittenden (Vice Chair)]: I'm arguing for our current system, which is the excess spending threshold in an adapted approach, which nobody has challenged the brigand compliance of our existing system. Just perfectly compliant. Yeah. It would.

[Senator Scott Beck (Member)]: That's my point.

[Senator Thomas Chittenden (Vice Chair)]: So I like that piece of this. So I think it honors the balance between freedom and unity, not just sound cheap.

[Senator Ann Cummings (Chair)]: So your town's women are happy paying

[Senator Thomas Chittenden (Vice Chair)]: I wanna get much

[Senator Ann Cummings (Chair)]: of this. Taxes.

[Senator Thomas Chittenden (Vice Chair)]: There are differences in priorities and how your communities value public education. I don't want Montpelier dictating what people can spend on

[Senator Ann Cummings (Chair)]: I think you'll find that a lot of those priorities are dictated by the cause and that they would want their kids to have more education, better education, but they can't pay for it. And that's what we've been trying to solve.

[Senator Thomas Chittenden (Vice Chair)]: So a way to make this germane for continued conversation in the community conferences, what I'd be supportive of is the second half of yours. The first half, I really want some of Ed

[Senator Scott Beck (Member)]: to F. Bob's on the last

[Senator Ann Cummings (Chair)]: But that is not in our domain. So we are going to send this bill out with the house, which means nothing about this will get discussed in committee of conference because it's not in either bill. All that will be at odds, it will be no education policy. There will be the financing mechanisms and that will dribble over. I know rules are a pain but they exist.

[Senator Ruth Hardy (Member)]: Well I think Senator Gulick had her hand up first.

[Senator Martine Larocque Gulick (Member)]: Thank you. I agree with you. I have a lot of misgivings about the foundation for me, that's why I didn't vote for four fifty four or 73. That said, excess spending is not grounded in any kind of evidence or research as a good way to fund education. If we're going to stick with the Ed Fund, let's fix the Ed Fund. There are issues with the Ed Fund, but to use excess spending caps, it seems fairly arbitrary because each district has different spending requirements and needs and construction costs and special education and who knows what. And just to say we're just capping you, it seems

[Senator Thomas Chittenden (Vice Chair)]: It's budgetary guidance based on circumstances that evolved year to year, but still giving them the ability to exceed that.

[Senator Martine Larocque Gulick (Member)]: Feels very it feels to me arbitrary and not based in science. It's

[Senator Scott Beck (Member)]: and we excluded capital debt from the threshold that I I exclude capital debt, Jim. Yes, Bill.

[Senator Martine Larocque Gulick (Member)]: I mean, I asked that question. You do exclude it?

[Senator Scott Beck (Member)]: Yes. Yeah. Capital debt is excluded. Just yeah. Just like 02/20 and Yes. What was yeah.

[Senator Martine Larocque Gulick (Member)]: I would say that the current funding formula

[Senator Ruth Hardy (Member)]: is on the table because it is it is what we have right now, and it is what the default is unless all the contingencies for the foundation formula are in place. And there's another bill that has this whole construct of the lowering the excess spending threshold. In fact, you're on that conference committee. You three are. And so that remains an option on the table without sort of blowing up the education bill right now, because the the current funding formula is what's in the law until all the contingencies are met. So I

[Senator Thomas Chittenden (Vice Chair)]: I didn't vote for it either partly because of that. So just because it's in the law in act 73 doesn't mean

[Senator Scott Beck (Member)]: that I support the continuation of it.

[Senator Ruth Hardy (Member)]: And I do, I mean, agree with the chair that, you know, and and senator Gulick that that that this whole concept of, well, my town might wanna spend more and can spend more, so we're gonna double pack ourselves to go over the spending threshold, but other towns are not able to do that because they're not able to pay. Or to to to say that it's okay that one town will spend more and another town will spend less just because of their ability to pay or their views on how they support their their school budget or not. That means that we're just saying we're okay with the inequities in the system and having, you know, the the voters in South Burlington or wherever be able to vote more than the voters and

[Senator Thomas Chittenden (Vice Chair)]: I think our

[Senator Scott Beck (Member)]: values are better

[Senator Thomas Chittenden (Vice Chair)]: than the 180 legislators in this building.

[Senator Martine Larocque Gulick (Member)]: But there constitutional

[Senator Ruth Hardy (Member)]: requirements about an appropriate and equal education. We have to

[Senator Thomas Chittenden (Vice Chair)]: think we balance that.

[Senator Ann Cummings (Chair)]: But I can tell you that there are kids who their schools cannot supply them with the math or science classes that they want because they can't afford Okay. To pay for them. Kids going to school in Ferry, not to mention up in The Kingdom, can get a lot better education in Chittenden County. That is the inequity, and that's the inequity that brought the brigand decision to the Supreme Court that the wealth of the community determines the makes kids have an unequal opportunity for education. They defined it as money.

[Senator Thomas Chittenden (Vice Chair)]: We're not recovering ground we already covered. Right. That's why I

[Senator Scott Beck (Member)]: said we're But we

[Senator Ann Cummings (Chair)]: can't undo the brigadist's decision.

[Senator Scott Beck (Member)]: Right.

[Senator Ann Cummings (Chair)]: We can't allow South Burlington to spend way more than Barry without Barry having to pick up part of that cost.

[Senator Scott Beck (Member)]: Oh, this right. So this is this conversation's proposal, finance proposal is not in the context of the town district. This is 11 school districts close to whatever runs out of Chittenden County. I I think with these bigger districts, you're gonna find that they're probably gonna all land in a pretty pretty close to each other. I mean, you're not gonna have it's not gonna it's not gonna be Barrie and Burlington. It's gonna be the Central Area District and whatever district that Burlington Large economic differences.

[Senator Ann Cummings (Chair)]: There are. And then economic differences between the Northeast Kingdom and Chittenden County are huge.

[Senator Thomas Chittenden (Vice Chair)]: The differences now are too varied because of the size difference. We got micro districts and large

[Maria Royal (Office of Legislative Counsel)]: districts.

[Senator Thomas Chittenden (Vice Chair)]: So consolidating to equally or comparably sized districts of both voters, kids, and grand list is what I do think is what we need to do as a state, and I do see your plan is still getting

[Senator Ann Cummings (Chair)]: to that. The first thing I need is a bill to repeal act 73, and then we can start over. But at this point, Acts 73 is the law of the land. We've been told either we do it or everything else we've done this year is going to get vetoed. I'm trying to find a bill that can move us forward. Anybody can present anything on the floor they want and take their chances, but I'm gonna deal with what the reality that the last this legislature has dealt, and that took a long time. And trust me, some of us were here through June, five to six days a week hammering that one out. And I trust I'm gonna be doing that again this year. Is this on the website? Yes. That's fine. If you got anything that's up there in writing, have that look at it. We've seen it. Yes.

[Senator Scott Beck (Member)]: And I'm willing to sure. I can send the map to Charlotte.

[Senator Ann Cummings (Chair)]: No. It's not the map. I think we need to see the words. Yeah. And the words around I'd

[Senator Scott Beck (Member)]: like to at least be the ones before. Well, And you send it out to nitros? Yes.

[Senator Ann Cummings (Chair)]: Alright. Yeah.

[Senator Thomas Chittenden (Vice Chair)]: So we got both this out tomorrow. So you're gonna present this to senate end. Tomorrow's we'll have that informed this discussion, and we're gonna move a bill out of here tomorrow afternoon.

[Senator Ann Cummings (Chair)]: We are I don't know about that. This has been a little bombshell that's been dropped in the middle of the table.

[Senator Scott Beck (Member)]: I didn't think we were getting the bill today.

[Senator Ann Cummings (Chair)]: I didn't know we were getting the bill today either. I am trying to move the bill forward. So I think we'll go back to our agenda topics and take a look at at where we are and where we left off. You know, I have committee of jurisdiction, which I canceled seven twenty seven because I think they're still trying to do some numbers on there.

[Senator Scott Beck (Member)]: Oh, oh, okay. Seven. Oh, yeah. Wait. That center.

[Senator Martine Larocque Gulick (Member)]: That was not

[Senator Ann Cummings (Chair)]: Section 80. Who gave that to me? Scott, did you I I think I used it. Yeah. Okay. That's fine. Okay. So we're going back to as pass by house.

[Senator Scott Beck (Member)]: Overheaded. Okay. Right. I mean, 27.

[Senator Ann Cummings (Chair)]: 7277. Yeah. We did strike We

[Senator Ruth Hardy (Member)]: did strike all, but I think she's talking about 09:55.

[Senator Ann Cummings (Chair)]: Oh, okay. 950 moved. They're in 27. They it's 727 has come back to us. That's the data centers. Yeah. Remember we sent it over because it was really more land use. We worked on it. The two of us. Yeah, and it's coming over. Apparently there's a fee on there that's causing up to $6,000,000 that's they're trying to get numbers on and it's causing some consternation on the 5th Floor maybe. So if we wait till tomorrow, we'll probably have better numbers. I was gonna let Maria walk us through it today and actually She I still haven't canceled her. So she Oh. She should be on It might be best if we just went to Maria. Okay. Yeah. I just felt you. You're here? Stop. Stop. So we will we will go to 727, and we'll write on time. She's on for 04:00 on The United States. And we will get that one right on the go. But I think we have 6789. I'm hoping most of the bills up there we can knock out. The one bill we need to make a decision on is 248 A extension. So if everybody would let me know where you are and what you like to get anywhere, Now she's just We're gonna do that one. I think we need a break from education. Oh, okay. I'm sorry. I misunderstood you.

[Beth St. James (Office of Legislative Counsel)]: I think it would be

[Senator Ann Cummings (Chair)]: a good break if this was my husband. So we are gonna do 07:27. And we have appointments on there. Are you Get us a list of appointments, and gave it Don't want me to Oh, it's a new appointment. It's new appointment. You're gonna be planning done all day because hours? Okay.

[Senator Ruth Hardy (Member)]: Are we doing that at all? Or we should we

[Senator Martine Larocque Gulick (Member)]: let these guys go? Or are we

[Senator Ann Cummings (Chair)]: are the No. We're done with that. So I think we need to hear from education in the morning until we settle what's happening there. It's not too good.

[Senator Scott Beck (Member)]: Okay.

[Senator Ann Cummings (Chair)]: Maria, let's take a break from education. And let's go on to seventwenty seven.

[Maria Royal (Office of Legislative Counsel)]: Okay, great. Maria Royal with Legislative Council. And I'm going to share my screen so we can walk through the proposed amendment by Senate Natural Resources and Energy.

[Senator Ann Cummings (Chair)]: Is this a strike all?

[Maria Royal (Office of Legislative Counsel)]: It is a strike all.

[Senator Ann Cummings (Chair)]: Okay. Look like everything was underlined.

[Senator Scott Beck (Member)]: Seven twenty seven.

[Maria Royal (Office of Legislative Counsel)]: Oops. Not sure.

[Senator Ann Cummings (Chair)]: We got you. We lost the screen. There we go.

[Maria Royal (Office of Legislative Counsel)]: Okay. Okay. So it is a strike all amendment. The main provisions are still the same. There's still the first portion of the bill that deals with the large load service equity contract. That's the contract between a data center and the electric company, that has numerous requirements to it, that needs to be approved by the PUC, who must find that it serves the general good of the state and also, specific findings that need to be met. And there's still the Act two fifty review, and there are still some requirements related to water consumption and permits that are required. So, and you can let me know what level of specificity you want to go through the bill. I think the reason why it came back to you, under rule 31 is because there's a new charge, what's called an energy transformation payment. So we can go directly to that or we can walk through some of the other provisions.

[Senator Ann Cummings (Chair)]: Let's walk us through. We haven't been, yeah, this is not the bill that left us, so I think you could walk us through, it's pretty, maybe a 200 foot level. Sure,

[Maria Royal (Office of Legislative Counsel)]: Sure. Happy to do that. So the title, the purpose, essentially the same, just being a little bit more specific, especially in the purpose that this new regulatory framework is done in a manner that financially benefits existing electric rate payers as opposed to just protecting them from additional costs caused by data center deployment. Under the definitions, there's a new definition of electric company, that's really just for conciseness so that when that term is used throughout this new subchapter, in every instance we know that it means the retail electric company that's providing service to the data center or will provide service if the contract is improved. But what is changed under the definition of facility, what was considered and what Senate Natural Resources and Energy proposes to do is in addition to counting a facility that's located on a single site or contiguous or adjacent sites, you'll see on Line 15, Subdivision B, I'm sorry, Is there a question? What page you want? 11? Oh, no. I'm sorry. I'm only I'm on page two.

[Senator Ann Cummings (Chair)]: Page two. Okay. I'm ahead of you. Alright. Thank you. Okay. And so it

[Maria Royal (Office of Legislative Counsel)]: should this should be labeled draft 1.6. Dated May 8, 11:03 a. M. Yeah. So what the committee did is they wanted to include as one facility any equipment or basically smaller data centers that are located on non adjacent sites, so multiple sites, that they would be considered a single integrated operation as one facility for purposes of meeting the 20 megawatt threshold if they operate under a central management system basically. So again, just trying to get at the situation where there might be, you know, multiple sites, but essentially they're functioning as one facility. So that was one kind of big substantive change. In terms of I'm just going on to the bottom of the page where we get into the large load service equity contracts and what the PUC reviews before finding that it meets the demigod of the state. A lot of there's some kind of tweaking with some of the provisions, but most of them have remained the same subdivision three. So we'll start we'll review because it's been a while, but so I'm on subdivision b one. So these are provisions that need to be included in the contract. So there must be a method for allocating the costs equal or proportional to the cost of providing service to the data center, including providing for equitable contributions to the embedded costs and stability, efficiency, and reliability and resiliency of the electricity network. Two, ensuring that ratepayer classes are insulated from all of the costs associated with data center deployment. And then three, specify the duration of the contract. There is a proposal now that the contract be for a minimum of ten years. Subdivision four is largely unchanged, basically that the data center has to pay a minimum amount or percentage based on their projected electricity usage for the duration of the contract. So whether they're operational or not, they are obligated to make that payment under the contract. And that's related to, I'm just going to skip over five for a second. There is still the requirement that the data center provide collateral sufficient to prevent the risk of stranded costs so that if they actually were no longer operational in the state, that any investments in, for example, grid infrastructure would not be passed on to other ratepayers. They would have some collateral, some financial protection for ratepayers and utilities. So then just going back up line 18, that's subdivision five, a reasonable charge for any demand in excess of what their projected electricity demand is at the time of the contract. Subdivision 7, that was changed around a little bit, but the requirements are basically the same, and this has to do with what the data center can do with respect to demand side management. And it cross references, you'll see line five, section two eighty five of this subchapter. And I mention that because that's one of the sections that was substantially rewritten. So we'll go through that in greater detail when we get there. There's also a requirement. This is new Subdivision 8 at line six that the contract address load curtailment procedures and priorities during grid emergencies. This gets to the load shedding issues. If there's too much demand on the system and the utility needs to disconnect customers in order to protect the grid, They have what's called a load shedding plan. And there was some conversations about, well, we want to make sure that the data center is disconnected first. But the committee heard from Velco in particular that much of the load shedding procedures are regulated by FERC, the Federal Energy Regulatory Commission. There are federal requirements that apply to the regional grid operator, which are then passed down to utilities. So there isn't a lot of flexibility here, but they at least wanted to acknowledge that these were things that should be addressed and discussed between the data center and the utility, if there is flexibility in how they would be handled. Subdivision nine on line eight, this was unchanged, basically just ensuring that any gross receipts, taxes, energy efficiency charges, or other fees are collected appropriately. There was no change to that section. And then a general catch all, Substitution 10, no change. Any other terms or conditions required by the PUC. And then subsection C basically collapsed what was subsection C and subsection D all into one section. So there's both the requirement that before the PUC approves the contract, the Commission must first find that it will promote the general good of the state and that its terms satisfy the next few subdivisions. There aren't really substantive changes here. It was just I think it just states things a little bit more clearly all in one subsection. So those findings are that the contract will not adversely affect the stability, efficiency, reliability and resiliency of the electric power system, will result in an economic benefit to the state and its residents, consistent with principles for resource selection that are in the electric company's least cost integrated plan, consistent with the state's electrical energy plan developed by the Department of Public Service, will ensure that the data center is served economically by existing or planned transmission facilities without any undue adverse effect on Vermont utilities or other ratepayers. And finally, are consistent with environmental justice and equity policy as established under Vermont law. What is new is that Subdivision two on line nine requiring that the commission's findings pursuant to this subsection C shall be in writing and shall include a stated rationale for each. So that's new. Then also this subsection D is new, and this is just a requirement that the Commission conduct periodic reviews of the contracts that are approved. And the purpose is to basically verify that the data center is ongoing or that the data center is in compliance with all established contract terms, conditions and regulatory obligations. And these reviews shall be performed at intervals not to exceed two years, but the Commission may initiate a review at any time upon a finding of good cause or when deemed necessary to protect the public interest. Subsection E is the same. This is basically just saying that the data center will pay the energy efficiency charge. They can't, like some other businesses, participate in energy savings accounts or customer credit programs, or can they become a self managed energy efficiency utility? That's the same that was in the that's in the house passed language. So section two eighty five, page six, line one. This will go through a little bit more detail because most of this is new and you haven't seen before. Again, this all has to do with demand side management. So there's a purpose section, Subsection A. The purpose of this section is to minimize any adverse impact of data center operations on Vermont's electric system, other ratepayers, and the environment. It aims to minimize peak demand increases, reduce associated costs, and enhance the grid's stability, efficiency, reliability, and resiliency, while minimizing climate pollution emissions and maximizing benefits to Vermonters. So kind of the first step towards meeting these goals is a site suitability analysis, which shall be conducted by the owner or operator of a proposed data center before an Act two fifty permit application is submitted. And this analysis shall be developed in consultation with the electric company that's going to provide its service as well as Efficiency Vermont. That's the cross reference on lines twelve and thirteen. And then in terms of what's actually in the analysis, that specifies that it shall provide a preliminary assessment of the facility's capacity to comply with the existing commercial building energy standards, the efficiency standards. Also look at the facility's capacity to maximize deployment of on-site renewable energy generation, battery storage and demand response assets, and its capacity to implement a waste heat recovery system capable of providing thermal energy to adjacent municipal or residential buildings. So these are all things that should be considered and assessed and looked at, again, with the electric company and with Efficiency Vermont. And then there's also a project design requirement that's in Subdivision two at the top of page seven. And it specifies that in the design and construction of the data center, the owner or operator shall ensure compliance with state energy efficiency requirements and best practices and shall attempt to maximize the potential of the site and any structures on the site to host renewable energy. Then we get to subsection C related to combustion based backup generation. There's a lot of talk in the data center world about the possibility of data centers relying on diesel backup generators even when it's not an emergency and kind of the detrimental environmental impacts of that. So there's the requirement here is not just for diesel based backup, but any combustion based backup generation. I'm just going to jump down to line 10, subdivision two, about what that means. Combustion based backup generation includes any electrical generation system that emits air contaminants as defined in Vermont law during combustion. So not just diesel, fossil fuel, excuse me, it could be like biodiesel. So kind of a broader definition than what's considered in other states so

[Senator Scott Beck (Member)]: far

[Maria Royal (Office of Legislative Counsel)]: anyway. But then the requirement back up to line six specifies that a data center shall use combustion based backup generation only during emergency situations involving power power failures and interruptions. Otherwise, the data center shall prioritize to the greatest extent practicable the use of battery storage and on-site renewable energy generation. So then we get to subtraction.

[Senator Martine Larocque Gulick (Member)]: We

[Senator Ann Cummings (Chair)]: have a question for

[Senator Scott Beck (Member)]: you. Yes.

[Senator Randy Brock (Member)]: Just a quick question on the emergency situation. Isn't the only emergency situation with the data center actually losing power? So wouldn't that Anytime you lose power, it's an emergency for a data center speak to those, Shannon?

[Maria Royal (Office of Legislative Counsel)]: Well, yeah, yes, that's true. That would be an emergency situation. But what there's I think that what the point is they're trying to say before you turn on your generator, your combustion generator, first resort to any storage that you have or any on-site renewable energy generation.

[Senator Randy Brock (Member)]: So they they have UPSs that have battery cabinets that hold the power until the generator kicks on and supplies power. Or is this talking about having a whole mess of Tesla wallpacks or something?

[Maria Royal (Office of Legislative Counsel)]: Well, it's as much as to the greatest extent practicable, right? So I think there's an understanding that they couldn't just prohibit combustion based backup generation, but to try to limit it as much as possible. So, yeah, it wasn't too I didn't want to be too prescriptive about what an emergency situation is, but just that it shouldn't be the go to just immediately fire it up, right? So to the extent that you have storage, to the extent that that's economically feasible to have that level of storage, to have the on-site renewable, that's what should be used as much as possible.

[Senator Ruth Hardy (Member)]: Yeah. Just to provide a little bit more context for this provision. First of all, there's a later provision about virtual power plants that gets to some of the battery stuff later on in the bill. But this, there are some data centers that use just essentially, you know, lining their parking lots with, you know, generators fueled by diesel fuel as their bringing their own power to the to the site. And what we were trying to get at was preventing them from just using diesel generators to power data centers and creating a ton of noise and pollution. So, this was limiting the use of them to just emergency situations to avoid that as their

[Senator Scott Beck (Member)]: targetting power

[Senator Ruth Hardy (Member)]: with the data center and there's more about battery stuff.

[Senator Ann Cummings (Chair)]: Yes, we can keep going. Okay, great.

[Maria Royal (Office of Legislative Counsel)]: So then subsection d line 13 concerns distributed renewable generation, and it specifies that taking into consideration the site suitability analysis and project design requirements that we just went through under subsection B and any other relevant factors. The data center shall maximize the construction and operation of on-site renewable energy generation to the greatest extent technically feasible. And then also specifying that a renewable energy plant that directly emits air contaminants as defined under Title X from fuel combustion does not qualify under this subsection, at least for meeting the goal of trying to maximize on-site renewable energy, so not the diesel generators, for example. And then, line 19, a data center shall transfer any renewable energy certificates or environmental attributes generated from the operation of plants constructed pursuant to this subsection to the electric company. Okay. So then we get to subsection e page eight line three and this is

[Senator Martine Larocque Gulick (Member)]: Oh my god. Here it is.

[Senator Ann Cummings (Chair)]: I'm sorry.

[Maria Royal (Office of Legislative Counsel)]: Okay. Sorry if I if there was a question. I I didn't hear it. So the annual energy transformation payment, so first Subdivision 1, Line 4, Because of the unique and significant demands a data center has on Vermont's electric system, it shall contribute proportionally to state initiatives that reduce fossil fuel consumption and greenhouse gas emissions. Accordingly, a data center shall make an annual payment directly to a fund that's managed by the electric company, and those payments shall be used to finance energy transformation projects as defined in Vermont law. So this could be more efficient kind of electrification projects, could be weatherization. These are all of the projects that are to be funded under the tier three renewable energy standards that apply to utilities. So that's what the citation, the cross reference is there. And to the extent practicable, such projects shall be deployed in the community hosting the data center and the surrounding communities. So then in terms of the amount of the payment, line 12 subdivision two, it shall be equal to 60% of the data center's electricity usage for the prior calendar year and the rate, it must be multiplied by the alternative compliance payment rate established under the Renewable Energy Standards law. And right now that rate, the original base rate when I believe when the law was enacted was $06 per kilowatt hour. It is adjusted by the PUC for inflation, and I believe it's like a little over 7¢ per kilowatt hour. Payment shall be made in advance at the start of each calendar year based on projected electricity usage, and then any difference between the projected and actual usage shall be reconciled in the following year's payment. So in terms of the amount of the annual payment, if a data center operated, had a continuous load, for example, of 20 megawatts for one year, it would be equal to about $7,000,000 a little over $7,000,000 I think typically if the capacity of a data center is 20 megawatts, you probably wouldn't be operating at full capacity continuously, maybe 80% capacity. And if that were the case, then the payment would be about $6,000,000 a little over $6,000,000 a year. And then subdivision three specifies that in the event these funds are used to support projects that are also supported by the electric company under its tier three obligations under the renewable energy standards or by any other regulated entity, the commission shall prorate the reduction of fossil fuel consumption and greenhouse gas emissions credited to the regulated entity. In other words, we can't double count for some of these projects or the electric company can't take credit for the projects that the data center is paying for. And then subsection f, this is a subsection that senator Hardy referenced concerning virtual power plants or a virtual power plant. And we'll just jump down to the definition first. Think it might be a little bit easier. So I'm on line 13, subdivision F2. As used in this subsection, virtual power plant means a network of distributed energy resources such as batteries, demand response assets, renewable energy generation and controllable loads that are coordinated through software to function like a traditional power plant. So basically, being able to respond, instantaneously to any demands, or supply issues in the grid. And so the you know, one of the goals is that it will just lead to greater strain or or I'm sorry, less strain on the electric grid and, greater efficiencies within the grid if a data center is set up as a virtual power plant and has this level of control. However, so we'll go back up to subdivision one,

[Senator Scott Beck (Member)]: which

[Maria Royal (Office of Legislative Counsel)]: says that the data center shall participate in a virtual power plant managed by the electric company if available and technically feasible. So if that's available, if the electric company offers that or is capable of that, the data center shall participate in that. Otherwise, it shall design and implement a self managed virtual power plant in coordination with the electric company to optimize energy generation and consumption. And then the next sentence just specifies that the funds used by the data center to build the virtual power plant shall not come from the energy transformation payment that it is required to make under subsection E. Those all go into the host community and the surrounding communities. They also should not rely on any ratepayer funded or state funded program that supports the deployment or operation of assets participating in such a virtual power plant, that it should use its own funds, basically. So those are the new demand side management provisions. The quarterly and annual reports are pretty much the same. The quarterly reports are what the data center submits to both the commission and the Department of Public Service. And they include things related to the water and energy consumption, including its peak usage per day. And they also include an itemization of the data center's payments towards shared infrastructure constructed to support the data center. And what was added in Senate Natural Resources is I'm on page 10, lines three and four. So just specification that the reports are subject to public inspection and copying under the Public Records Act. And then the annual report that comes to you, the legislature, is provided by the Department of Public Service beginning in 2028, provided at least one data center has entered into a contract under this subchapter. And what's included in the report are the department's findings and recommendations related to the energy, environmental and economic impacts of data center construction and operation in Vermont, as well as any significant developments within the region, such as significant laws or regulations with respect to data centers enacted or adopted in other states, known data center construction in the region, and any known impact on repairs from such construction in the state or region. Section two eighty seven, just authority for the Commission to adopt rules necessary to implement this subchapter. So that's it for kind of the PUC oversight of the tariffs or the contracts. And then section two, the reference there entitled 10, this concerns Act two fifty. And it's basically by adding to the definition of development what's included there between on lines five through eight. Develop means the construction of improvements on a tract or tracts of land for a data center as defined in what we just went through, subchapter in Title 30, including on land within a Tier 1A area notwithstanding anything to the contrary in Section 6,034 of this title. So Section 6,034 allows the Land Use Review Board to designate certain areas as tier one A areas, which are more dense, more urban areas typically. And municipality can petition or can request that the development occur pursuant to local zoning and ordinances as opposed to the Act two fifty.

[Senator Scott Beck (Member)]: So

[Maria Royal (Office of Legislative Counsel)]: what this is basically saying is that, no, that can't happen with respect to data centers, that they have to go through the full state Act two fifty review. So I'm not going to spend a ton of time on the water use permit requirements, section three. Michael Grady covered this.

[Senator Ann Cummings (Chair)]: And I think we just, that's not our area either.

[Maria Royal (Office of Legislative Counsel)]: Right. Right. So we will then get down to three a is also related to the water permits. Section four, this was in the bill as introduced or as passed the house, excuse me. This is just a report by the commission on the regional renewable energy market and the conditions and projected conditions or availability of renewable electric generation during the years 2027 through 2035. So looking ahead, trying to have a better understanding of what the renewable energy market will be. And then just in preparing the report on page 16, subsection B, just providing the Commission prepares its report, providing an opportunity for written input from interested stakeholders, electric companies, renewable energy developers, regional transmission organizations, consumer advocates, etcetera. And then the commission shall consult with various state and regional entities as appropriate. And just a specification that this proceeding is not subject to contested case procedure. So it's not a formal investigation. It's more informal. But it does require a report back to the standing committees of jurisdiction once the report is ready and the due date is specified at the beginning. So January 15 year, you'll receive this report. And then section five, this is asking for a recommendation data center decommissioning. It's largely that house passed language. And this is a recommendation prepared by the Commissioner of Public Service, a consultation with Secretary of Natural Resources, the Chair of the Land Use Review Board, and the other interested stakeholders to come up with a recommendation in draft form of a regulatory model for data center decommissioning. These are all of the kind of requirements that are to be considered in addition to in subsection B, overall requirement that the plans or the requirements are developed in a manner that protects and preserves the environment and the public health and welfare. So they should address the approval of a decommissioning plan by the appropriate regulatory entity with a clear delineation of authority if more than one entity is involved in the approval process. The plan should provide for regulatory oversight, through site visits and inspections, some kind of bond requirement or financial assurance to ensure that the data center is solely responsible for any of the decommissioning costs. Guidelines for data center for data sanitization. So any information, any data on any of the IT hardware or software is all removed and is unrecoverable. There's a reference line 13 to specific standards. They're called the storage device sanitization and they're contained in the storage device sanitization destruction manual that's prepared by the National Security Agency and the Central Security Service of the US Department of Defense. So that's how they handle data on IT infrastructure that's considered classified information. Very strict standards. Guidelines for environmental compliance, hazardous material handling, remediation and restoration, a timeline, any other matters deemed appropriate, and you will have this recommendation on or before December 15 year. And so this is effective on passage, applies to any data center that's not operational on the effective date of this act as well as to any existing data center. As you know, there are maybe four or so very small data centers currently, this law would apply to them if or to the extent that they seek to expand their capacity and meet the threshold requirements of section one. So, you know, use more than 20 megawatts or minimum of twenty twenty megawatts of power. So that is

[Senator Martine Larocque Gulick (Member)]: a walk through. Okay.

[Senator Ann Cummings (Chair)]: Thank you. It feels longer than when we sent it out. I get it. Which is good because that definitely is not in our jurisdiction. James, you've been able to figure out a fiscal note?

[James Duffy (Joint Fiscal Office)]: Yes, James Duffy joined the fiscal office. There is no new fiscal note to go along with the recommendation that came back to you all from Senate National Resources. Nothing in the committee's recommendation changes the previous fiscal note, which you've all reviewed. What I will note for the committee, as you all heard from legislative council, an estimate that the energy transformation payments paid by data centers to electric companies annually would amount to about 6,000,000 to $7,000,000 depending on what assumptions you make. Public service department has also testified to that amount. We reached out from GFO to public service department, clarified their math and excuse me. That sounds reasonable to the director of the school office. Okay. Excuse me, madam chair. But, yes, can testify that 6 to $7,000,000 is a reasonable assessment of that annual fee paid by data centers. However, those do not represent state funds as they would be paid from data centers to electric companies. Okay.

[Senator Ann Cummings (Chair)]: I heard it at some point, it was said this would benefit rate payers, not just protect them. So I assume that that money going to your electric company would be reflected in their income which would eventually impact the rates that they charge.

[Senator Thomas Chittenden (Vice Chair)]: I think that might, it's

[James Duffy (Joint Fiscal Office)]: a policy interpretation, it might vary, I know you asked, but as I understand it, the funds would be spent on projects to help modernize elements of the electric grid or consumer facing programs, so that that's what I'd like you might hear.

[Senator Thomas Chittenden (Vice Chair)]: That would Okay. Just be on a 20 megawatt plus large data center. Right?

[James Duffy (Joint Fiscal Office)]: Correct. So 6 to $7,000,000 is the estimate for a 20 megawatt data center, which is the minimum threshold for regulation under h seven twenty seven, that annual payment would then scale proportionally as the megawatt nameplate capacity or rather power usage of a data center increases on an annual basis.

[Senator Thomas Chittenden (Vice Chair)]: We have no testimony that you know of. Nope. There hasn't been anybody exploring, putting out feelers about building such a data center in Vermont that you

[James Duffy (Joint Fiscal Office)]: know of these discussions. Legislative council might be able to speak better to this. What we can say for sure is that there are no data centers that are following this threshold as of now. Don't know. Maria, do you have anything to add there?

[Maria Royal (Office of Legislative Counsel)]: I don't actually just I haven't heard. I haven't heard of anything.

[Senator Thomas Chittenden (Vice Chair)]: I'm not gonna go over here, but that's it.

[Senator Ann Cummings (Chair)]: Further discussion or questions? If not, I'm going to give this a little bit of time to percolate. Questions, and we'll see about voting here now tomorrow.

[Senator Scott Beck (Member)]: Okay.

[Senator Ann Cummings (Chair)]: Okay? Okay. Thank you. I think everyone