Vermont Legislature SmartTranscripts:

[Senator Anne Watson (Chair)]: Wednesday, February 11. This is joint village council. Hello. Good morning. We had a new draft S-three 25, at least in part related to things that we heard yesterday.

[Ellen Czajkowski, Office of Legislative Counsel]: Though just to frame this,

[Senator Anne Watson (Chair)]: so I'm sure you have as well, but I certainly have been hearing things about how implementation of Act 21 is going, and it seems as though there is an opportunity to, as with any major bill, do some

[Ellen Czajkowski, Office of Legislative Counsel]: tweaking, course correcting

[Senator Anne Watson (Chair)]: in terms of trying to hold to the vision of what Act 181 was intended to do. And so this draft that we are looking at is intended to do just that, to look at places where maybe we could use some more time, places that were maybe ambiguous that could be clearer, and as things are playing out, make adjustments so that hopefully we can do both things of building more homes in places where we know what makes sense and protecting the environment, especially the places that are sensitive, critical natural resources. So, that's sort of what leads us to the intent section. And I also want to note that there are things in this draft that we might want to continue to examine and tweak. And there may be things that are not in this draft that we may want to bring in. And so, is a starting point. Having said all of that, I'm going turn it over to legislative council.

[Ellen Czajkowski, Office of Legislative Counsel]: Ellen Chakowski, Office of Legislative Council. So yeah, I'm here on a committee amendment to S-three 25. You saw S-three 25 as introduced last week in your committee bill that was about a study committee related to model bylaws. The amendment you have today is draft 1.2 dated to 10/2006. That language is not in here. This is a strike all that replaces all of that language with, like as Senator Watson just said, language regarding action. So, Section one is an intense section. The General Assembly finds that twenty twenty four acts of resolves for 01/1981 represented a substantial restructuring of Vermont's land use review framework. This act is intended to provide technical clarification, transitional certainty, and implementation alignment consistent with the intent of 2024 Act 181 without altering its underlying policy goals. Section two starts amendments to Act two fifty. So the first couple of changes are related to the debates in the interim housing exemption, exemptions plural. So, but first on page two is the road rule. What has been called the road rule, but is actually a jurisdictional trigger on activity related to the construction of private roads greater than 800 feet. The change

[Senator Anne Watson (Chair)]: Tactical. There

[Ellen Czajkowski, Office of Legislative Counsel]: once was a road rule, that is gone. It's been reincarnated as a law. On page two is the first change. So currently, as it was enacted in Act of 81, The length of the road construction, don't begin the jurisdiction under the road rule until 07/01/2026. So roads constructed after 07/01/2026 may be subject to the jurisdictional trigger. The language on Line four pushes that back to 07/01/2027. Further down is where we do start to see the language regarding the interim housing sections. So the first one is regarding priority housing projects. So currently, there is an exemption for priority housing projects under Act two fifty. If they meet the qualifications in this section, any number of priority housing projects are exempt from Act two fifty until currently 01/01/2027. This does a couple of things. It pushes the date back until 06/01/2027, and then it adds, it's the construction of priority housing projects for a related subdivision located entirely within a designated downtown neighborhood development area or growth center. And areas with permanent zoning and subdivision bylaws that have been mapped as downtown centers, village centers, village areas, or planned growth areas, or within one and a half mile around such designated center with permanent zoning subdivision bylaws to certify public sewer and water services or soil that are adequate for disposal. Well, yes, I'm going to explain it.

[Senator Ruth Hardy (Member)]: You've got it. Well, this is the

[Ellen Czajkowski, Office of Legislative Counsel]: proposed language I was given. So currently the definition of priority housing project needs to, it needs to be an affordable housing project built in a designated area. There are new designated areas that are transitioning from the old designations to the new designations. This is also adding, though, that PHPs can be in mapped areas using the terms under the future land use maps, downtown centers, village, shattered village areas, planned growth areas. It is unclear to me, I don't know just how divergent that is from the designated areas. To some extent, they should be.

[Senator Anne Watson (Chair)]: I don't know.

[Ellen Czajkowski, Office of Legislative Counsel]: And the existing definition of priority housing project should maybe be altered. Also, is just a jurisdictional trigger. So, you will have to make decisions, I think, the future about the definition of priority housing project regardless.

[Senator Anne Watson (Chair)]: So you may want to put that too.

[Senator Seth Bongartz (Member)]: So on line 13, what is related to self decision?

[Senator Ruth Hardy (Member)]: I didn't draft this line of interest.

[Ellen Czajkowski, Office of Legislative Counsel]: So think it is referring to that

[Senator Ruth Hardy (Member)]: when you're going through the development process, you may need to subdivide plots in order

[Ellen Czajkowski, Office of Legislative Counsel]: to create housing. And so the subdivision of land can trigger Act 50 if it's more than six lots or more than 10 lots.

[Senator Anne Watson (Chair)]: So I think this is looking to have an additional exemption from subdivision. So it's

[Senator Seth Bongartz (Member)]: related to our vision for the purpose of of that thing, but I but how's whatever he has to put it. Okay. That's that's it.

[Michael O’Grady, Office of Legislative Counsel]: That's

[Senator Seth Bongartz (Member)]: Okay. So let's just okay. You wanna make that clear with you? Yeah. Okay.

[Ellen Czajkowski, Office of Legislative Counsel]: It's related subdivision or okay.

[Senator Seth Bongartz (Member)]: Yeah. Yeah. So so let's then make sure we understand, but but that's what we started with with line 15. What are we actually doing? Or are we really saying that the addition to existing areas, once the maps go, it it will go into effect.

[Ellen Czajkowski, Office of Legislative Counsel]: So this exemption is intended to sunset when those maps take effect. So I don't know what the intent, I don't know

[Senator Anne Watson (Chair)]: about this slide, you'll need to hear. We have people who can speak. Okay.

[Senator Ruth Hardy (Member)]: Okay.

[Ellen Czajkowski, Office of Legislative Counsel]: Next, on page three, there was just a tango on line three that's being fixed. Section three, still within the exemptions, but a different aspect. So, ten days a 6,081 is the one of the exemption sections for Act two fifty. So language was added in Act 101 that is being struck at the bottom of page three. Upon receiving notice and a copy of the permit issued by the appropriate municipal panel under 4,460 gs, a previously issued permit for a development or subdivision located in a tier 1A area shall remain attached to property. And so, you will recall that areas that have been designated as tier one A status will have a full exemption from Act two fifty. Part of the review to determine if they need be Act two fifty is if the municipality has robust zoning bylaws that are somewhat akin to what the criteria review under Act two fifty is, so the municipality is taking over the review of the development. The question came at that, when we were working on this, of what happens to the existing Act two fifty permits since they are under statute, they exist in perpetuity. So what happens if Act two fifty, if a whole area is exempted by Act 50 jurisdiction, this sets up in this section and then in 40 four-sixty gs that the municipality will take over the enforcement of the permits and permit conditions by virtue of being in charge of the municipal zoning permit. Language was added here that says, Neither the board, the Land Use Review Board, nor the agency of natural resources shall enforce Act two fifty permits for a certain amended jurisdiction on land unless the designation revoked or the municipality has not taken any reasonable action to enforce the conditions of the permit. So this was setting up that if it was a tier one area, ANR and the LERP have no jurisdiction anymore, they can't do the enforcement, the municipality in charge of enforcing permit conditions. This is getting rid of that to have lower BIN A

[Senator Anne Watson (Chair)]: and R still do enforcement of Act two fifty for purposes of series. He's good. Until?

[Ellen Czajkowski, Office of Legislative Counsel]: No, it's just being struck.

[Senator Seth Bongartz (Member)]: Okay, so I

[Ellen Czajkowski, Office of Legislative Counsel]: Oh, until what?

[Senator Seth Bongartz (Member)]: Until there's a permanent method.

[Ellen Czajkowski, Office of Legislative Counsel]: Until there's a current amendment. So the language in 44 gs, which we're going talk about in section five, is on H7 in section five, is there's a process in Board of Board sixty gs that sets up that when a municipality makes an amendment to a municipal permit, they are to incorporate the existing Act two fifty permit conditions into that permit so that they can enforce them. That language is remaining. This is about the between and in between sort of until that happens and

[Senator Anne Watson (Chair)]: the municipality incorporates the conditions, ANR and the board shall still have the choice of member. Okay. Thank you.

[Ellen Czajkowski, Office of Legislative Counsel]: On to page four. So these are the rest of the interim housing exemptions. And I guess I do want to, well, interim housing exemptions are in DD, but there's just two other temporary provisions under Act two fifty. So the first one, there's a temporary exemption for the construction of one accessory dwelling unit for a single family home, and that under this bill is, currently that expires 07/01/2028. The dates in this bill push them all out six months, So that would be 01/01/2029. And then same for the next one, CC, which is for converting a structured unit for commercial purpose into 29 or fewer housing units 01/01/2029. I don't know if you want, I'm just going to point out that all of the days in this section are different. So you may want and these two are not in the other section, so perhaps they are different and have different issues you want

[Senator Ruth Hardy (Member)]: to consider. This is all very confusing the way that this is playing out. Don't know, whose language is this and where did it come from and why are we doing this now before we actually got testimony on all the questions that were raised yesterday and some short story of how we got where we got. This is just really confusing. It's a short- Yeah, but that's fair. And it makes me really uncomfortable to have our attorney say, She didn't draft this language. I don't know where this came from. So who is drafting the language that we have in front of us?

[Senator Anne Watson (Chair)]: Sure. So it was a collaboration of a handful of stakeholders. So some things we're going to

[Senator Ruth Hardy (Member)]: hear from and live next. So including the chamber as well as the universe. Okay. Yeah. It would be great if the committee could actually draft, which is for stakeholders at August. Thank you.

[Senator Anne Watson (Chair)]: We're gonna keep going for now and then we'll hear what you want.

[Ellen Czajkowski, Office of Legislative Counsel]: So on page four, the interim housing exemptions. This first one in Subdivision 1, this is for the construction of 75 or fewer units within a new town center, growth center, or neighborhood development area, that's being pushed out until 01/01/2028.

[Senator Ruth Hardy (Member)]: On to page five, the

[Ellen Czajkowski, Office of Legislative Counsel]: development of 50 or fewer units of housing when located in a village area and within one quarter mile around it, it has to permit its own subdivision bylaws, or areas within the census designated urbanized area with over 50,000 residents and within onefour mile of the transit route. That is being extended until 01/01/2028. It's also adding that similar language is required for the subdivision or the construction of housing projects and mixed use development. The next one at the bottom of page five, again, still for interim housing exemptions. So these are for those that are located within a downtown. So there's no cap on the number that can be constructed in a downtown that would be exempt. That's being put down to June '7, and it's for the subdivision four or the construction

[Senator Ruth Hardy (Member)]: of housing projects and misused development in town towns.

[Ellen Czajkowski, Office of Legislative Counsel]: So next on page six, the tier three rule making. So in ACT 181, the tier system was created, tiers 1A and 1B, and then tier three. Tier three has a rulemaking process for the land use review board to work with ANR to define what is included in tier three. The date for the finishing of those rules is being pushed back because currently in statute, it's currently in this provision, it says that they need to submit the proposed final rule to LCAR on or before 02/01/2026. It's being pushed back to 2027. And it's facing the name of the committee. On page seven, so the language on page seven is section five twenty four BSA 4,460, which I was already talking about. Subsection G says that this process for municipalities to go through when a development already has an Act two fifty permit and they're needing a municipal permit or an amendment to a municipal permit, this goes through the process that they need to use to determine if the Act two fifty permit conditions need to be transferred to the municipal permit. That language is not changing in G, but it's helpful context for the change which is happening on page eight, which is striking H, and it relates to what we already saw previously, which is currently H in a tier 1A area. The appropriate municipal panels, it was usually the development review board or whoever structures, whatever structure they're using to issue permits, shall enforce any existing Act two fifty permit that has not had its permit condition transferred to a municipal permit pursuant to subsection G. So as we discussed, it's getting rid of this provision that's the municipality who's taking over. Municipality is now under this note taking for enforcement after there has been an amendment.

[Senator Anne Watson (Chair)]: Thank you.

[Ellen Czajkowski, Office of Legislative Counsel]: And then on page nine, section six, tier one A area guidelines. You may need to hear what the actual proposal is here, but the Ladies Review Board did issue guidelines for municipalities to follow when they're making their application for a tier 1A area. This is adding language that says on October, the land use report shall update its tier one A area guidelines to set procedural standards to ensure consistent application of requirements across municipalities.

[Senator Anne Watson (Chair)]: Do you want me to comment on that?

[Ellen Czajkowski, Office of Legislative Counsel]: Do you have something to add? Well,

[Senator Anne Watson (Chair)]: think one of the things that we may want to hear about is how the consistency has been going in terms of the application of the creation of tier one maps.

[Ellen Czajkowski, Office of Legislative Counsel]: Section seven is changing effective dates from Act 181. So currently in Act 181, sections twelve, thirteen, and 21, those take effects at the end of this year, 12/31/2026. They're being pushed back to 07/01/2027. Section 12 Section 13 is the new criterion force blocks and contact connectors. That is being pushed back. And so section 12, which are the definitions associated with

[Senator Anne Watson (Chair)]: that section, also being pushed back.

[Ellen Czajkowski, Office of Legislative Counsel]: And section 21 is the section that establishes the tiers. So that's also getting pushed back.

[Senator Ruth Hardy (Member)]: Where is Rick Hardy?

[Ellen Czajkowski, Office of Legislative Counsel]: I'm on page nine, section seven, line eight. I

[Senator Ruth Hardy (Member)]: see section 12, oh, and 21. Can

[Senator Anne Watson (Chair)]: you say again what section 12

[Ellen Czajkowski, Office of Legislative Counsel]: The definition section associated with force blocks and have five figures. And 13 is the new criterion AC. Yep.

[Senator Ruth Hardy (Member)]: No compact development.

[Senator Terry Williams (Vice Chair)]: Sure. Top one, bottom one.

[Ellen Czajkowski, Office of Legislative Counsel]: Is the jurisdictional trigger for the new tiers?

[Senator Anne Watson (Chair)]: It's all getting pushed back. Yes.

[Ellen Czajkowski, Office of Legislative Counsel]: Line 10 to 11. This is Section 19 is the road jurisdictional trigger. It's currently set to take effect 07/01/2026. This is being pushed back to 07/01/2027, as in the section earlier in the bill. Next, on page nine, section eight, tier 1B appeals report. So on our report January 2027, the Land Use Review Board, after consultation with the Vermont Association of Planning and Development Agencies, the Vermont Legal Cities and Towns, the Vermont Natural Resources Council and the Vermont Planners Association shall report to the General Assembly on recommendations for how to limit the number of appeals of municipal zoning permits that can be brought against housing projects located within tier 1B areas. The board shall identify mechanisms for limiting appeals that allow municipalities to address legitimate concerns with the project of the page 10. Clear reports shall also identify the most commonly raised issues on appeal, evaluate statutory or procedural tools to limit duplicative and non material appeals, and recommend legislative action needed, if any. The report shall be submitted to the House of Media on Environment and

[Senator Ruth Hardy (Member)]: the Scientific Environmental Resources and Energy.

[Senator Anne Watson (Chair)]: So one thought about this section is that it is very, thinking about where this bill started as the Let's Build Homes proposal, but that is one way to think about limiting appeals. This is just broader than that, to think about what are options that we might have

[Senator Ruth Hardy (Member)]: in terms of the bidding of appeals. And we just got this report. We just got a report from them about appeals. So

[Senator Anne Watson (Chair)]: I guess I'm thinking about that report as about transferring the process for appeals for Act two fifty to the LERD. So this is thinking about other options like certificates of compliance or

[Senator Ruth Hardy (Member)]: pre approved kind of like the eight zero two MOMS models where

[Senator Anne Watson (Chair)]: certain aspects are pre approved and so not applicable. So there's other options. So it's looking at essentially some other options for limiting.

[Ellen Czajkowski, Office of Legislative Counsel]: Section nine is the effective date takes effect on passage. And then finally, I'm on page 10 of the title of this bill will change after passage to an accolade to your jurisdiction

[Senator Anne Watson (Chair)]: or something else to more match what's going on with info. Great, thank you. All right, super. I'm sure there's still lots

[Senator Ruth Hardy (Member)]: of questions and we'll just unpack it. So thank you

[Senator Anne Watson (Chair)]: so much. All right, and we're going to move on to hearing from Megan Sullivan from the Vermont Chamber of Commerce.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: Good morning. Megan Sullivan, Vice President of Government Affairs for Vermont Chamber of Commerce. Thank you for having me back two days in a row. So yesterday was sort of high level written remarks on what we were seeing out there and we're hoping for specifically on the extensions of some of the timelines. And so I want to dig in a little bit more. I will say, we've been collaborating for three years now on this process and continue to collaborate as the stakeholder process move forward and worked with other folks to say, all right, massive build pass, changed a lot in the last few weeks, expected that we're going need some tweaks as we're going through. What are some of those tweaks that generally different perspectives can agree on? So I put those on paper. I will say, I don't think we've drafted the language, but just drafted ideas of, here are some things we work on. I am not a lawyer, and I go, right. Whoever do you intend to draft the language. I was just going to talk about some of the areas that we really see as important, and I think some of this language addresses it, and then some of it maybe we needed to be a little bit more clear in what we were actually trying to get at. So the first piece on extending the interim exemptions, so, and I think this has to go hand in hand with looking at what's going on with the applications for 1A and 1B, and I think there's bringing communities in, whether it's BLCT, but those homes is very active in the guidelines around 1A, but bringing some of those groups in to say, what are we seeing? What are maybe some of the limiting factors? And do we need to address them, right? If we're not seeing as much uptake on these exemptions as we thought, why is that, and what do we need to do? And extending those interim exemptions out in recognition that we have a housing crisis, and for better or worse, Act two fifty is a limiting factor, frankly, people try to avoid it. And so if there are folks who are saying, We want to get one in, but we have to get our ducks in a row to make sure our town meets all the criteria, and that's going to take longer than this initial timeframe, that we have those interim exemptions longer, so that while that work is getting done, those communities are still accessing that exemption, so those housing projects moving forward. Senator Hardy yesterday, you asked, what's that struggle between the extension? And I think part of it is things might be getting planned with the anticipation that a community was going have 1A. So like, well, we've got the interim exemptions now, and then there's going to be 1A, so they'll be exempt anyways. And if that community is not going for 1A, it creates this, okay, well, we thought we had certainty, and now we have uncertainty. Should we move forward? Should we not move forward? I think if there's that date that said, you know, by 2030, we're going to know, like, is the community just saying we don't want 1A, or it's going to take us time? Working on that in advance enough for a housing project that takes years in Vermont to get done, we'll have some date search to find for. That's our intention there. Again, I think bringing in some of the folks to talk about what's going on with applications for 1A and 1B is important to hear more about that, but that I think is why we're, we would like a date closer to 2030 than what's in the draft before you come for that. It just seems like any time, just pushing the date out, unless there's other criteria in there, is not going to create certainty, I don't think, because what happens with these things? Nothing ever sounds like smothered. And people will come back again and

[Senator Anne Watson (Chair)]: be like, oh, you have another project that's stranded, we need

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: to push the data out. And so I'm really skeptical about those kinds of things unless, I mean, understand. Yeah. And I also think just pushing the date out isn't going to give the certainty. I would rather be like, okay, these are the things that you need to do. These are

[Ellen Czajkowski, Office of Legislative Counsel]: the things that are going

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: to happen. These are the things you need to do, and this is the deadline, you know? And then a deadline is a deadline. And I mean, I'm all for trying to create flexibility in the extension, but just extending a date. You're going to be back here, I guarantee it. You're going to be back here next year

[Senator Seth Bongartz (Member)]: asking for anything.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: I mean, I have to be back here next year. Or I'm two for dinner.

[Ellen Czajkowski, Office of Legislative Counsel]: I've been here a long

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: time for myself. I know. People and I could list the- I know. And so that's what I want

[Ellen Czajkowski, Office of Legislative Counsel]: to- Well, I think that second part,

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: I would agree, is incredibly important. It's not just about extending the date, but also getting that information of like, okay, when we did this, we thought communities were going to want to be a 1A community, want to be a 1B community. And if now that we're in it, they're like, No, thanks. Like, what is the reason they're saying, No, thanks. And how do we address that? Or do we not Is that sort of like, okay, well, I guess our communities really don't want this? I think we are in a housing crisis, so I don't think it's inappropriate for the state to say in the next three years, we're going to say, housing could be built there, whether you like it or not. Though there's a lot of other letters comes out to push back on that. But we need to get a little bit more information about what is happening, communities not wanting to opt in, and is it they need for us to support them better, or is it just Yeah, and I think that's two different issues, the stranded projects and the wider community's not on a peak tier one. The exception of, I think there are some There could be projects that are getting planned because they're anticipating, well, obviously,

[Senator Anne Watson (Chair)]: and I don't want to pick

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: on any town in particular on the record, obviously that town, city would be 1A, Eric. So we can be planning a project knowing the exemptions are in place now, and if it takes us years to get there, the exemptions will be in place in the future. I mean, now they're not going to be on any, so we're not going to be exempt. Well, what do we do? So maybe it's an ethic language about projects that have started in this time period. I am. And what that start means. What the start means and then when the end date is, not just pushing the date out. I think

[Senator Seth Bongartz (Member)]: there's not that I want to report for Alan.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: I was just gonna be funny when

[Michael O’Grady, Office of Legislative Counsel]: he was

[Senator Anne Watson (Chair)]: saying it.

[Ellen Czajkowski, Office of Legislative Counsel]: Mean, this the fact that the

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: committee working on the language together is preferable because then we can work out the language and No, because want that conversation. Yeah, yeah, yeah. Well,

[Senator Anne Watson (Chair)]: I hear you and I'm hoping that this could be a place to start.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: And if there's, you know, once a community, if they get that 1B status, if they get that 1A status, is there a way, maybe that's more appropriate in rulemaking than in law making, to say, once you have it in place, like these inter extensions of government, in case borders don't line up or whatever it is, if there's saying, it's until this day or when your community hasn't approved that, That really is challenging to do, just for an update. I'm going to talk about priority housing projects a little out of order just because I think it's more pertinent to this, but the priority housing project conversation is related to that 1B in that we certainly hope that communities are not saying we are going to avoid 1B because we don't want affordable housing in our communities. That that's not the rationale for saying uniformity. Priority housing projects have been a game changer for being able to build affordable housing in a lot of different types of communities. And so continuing to allow that incentive, even if a community says, We don't want 1B, it's important to say, Okay, well, you're making that choice not to have 1B, priority housing projects are still going to

[Senator Seth Bongartz (Member)]: be allowed,

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: incentivized around F-two 50. So I think the intent around the priority housing project plan was less about what is the date of priority housing projects and more just saying, if a place is mapped for a 1A or 1B and they choose not to move forward with that designation, then priority housing projects can still be applicable in those areas. So that this isn't about saying no to a affordable housing. We should create one C. Think this falls from there to here.

[Ellen Czajkowski, Office of Legislative Counsel]: Okay, great.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: That's a

[Senator Seth Bongartz (Member)]: great thing. Here we go. Yeah.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: So that was the thinking behind what the proposal was, arrests, very bus capacity, just making sure that affordable housing continues to be allowed in communities as that has been a game changer.

[Senator Anne Watson (Chair)]: On the

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: dates for tier three and the road rule specifically, I think members of the Men Use Review Board may not feel like they need an extension for those, right? That they're on track for the dates that are in there. What I think is critically missing and maybe is causing some of the higher anxiety around tier three and the Roan Rule, when we were in these committees in 2024, a lot of the conversations, I shouldn't say a lot, there were specific conversations that if the only trigger was one of these new things, if the only trigger was an ADC trigger, or the only trigger was the roadblock, so you've built something that otherwise would not be an active 50, but for the length of the road, do you need to go through 32 criteria? Because it's extensive to go through that 32 criteria if we only think is the length of the road, and the road is really about forest fragmentation and idea was that Land Use Review Board would be able to, in their rule making, say, Here are the criteria, if that is the only trigger, that you need to look at, which takes a lot of the pressure off of Boeing direct IPV, sort of beast, right? That is, all right, we just want to check these two, three things, because this is what's going to be impacted by this development, and we want to see if we can do it in a way that really is more harmonious with our natural resources. My understanding is Land Use Review Board's attorneys said that is not what is in the language, that they can't do that type of limiting those factors. So even though most of the folks I talked to, that was the understanding of the legislative intent, the landing sort of reward is saying, based on the language, we can't actually do that. I think that is a more conversation to have of saying, if that's the only trigger, right, if it's a major development that, like, 17 things for the reason it's an activity, you've got to go through the whole process. But if it's just that one thing, how do we limit what needs to be done to ensure that we're reviewing things that are important to review, but not saying, okay, those two houses would get a study on what is your impact on traffic. Get a study on what is your impact on schools. Get a study on what the impact on the communities. Two houses, it's unlikely those things are really going to be impacted. How do we limit it? And I think clarification for the Land Use Review Board that they can review those things is important, and in doing so, that's going to take time, more time that we have in the current deadlines, and so an extension in order to do that work is important.

[Senator Anne Watson (Chair)]: And if I might add, that idea to clarify that the Ladies Review Board has that ability is not in here. And I think it's something that I think we might want to add.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: But yes, do you have

[Ellen Czajkowski, Office of Legislative Counsel]: any questions? I actually have

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: a question for Senator Bongartz, because we've been doing this longer than any of the other of us. Was that the intent? Was there at some point, some kind of risk

[Senator Seth Bongartz (Member)]: can't of do better, but I wanna look at the past and see if it doesn't apply to the it should be. And I I frankly think we should have a discussion, but that makes it might make sense. So I can I can mumble my question? Wish I was here.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: Something like if or how

[Senator Anne Watson (Chair)]: Hey. Just

[Senator Seth Bongartz (Member)]: passed. Yeah. Because it's seen if it's occurred or less of what was implied.

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: But I think part of the question was, was it your memory that that was something that was discussed in 2020?

[Senator Seth Bongartz (Member)]: I can't, I actually don't remember that, bill. My conversation with chair Sheldon is still that. She remembers that part of it. And it makes Yeah. That makes sense. And so

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: Yeah. And I think it defeats

[Senator Terry Williams (Vice Chair)]: I guess the budget

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: changes. But in order to do that, I think those dates need to move out so that that work can happen because we're making those take a while. I believe the Landy Certificate Board is not saying to do rule making on tier two, they're just going to provide guidance and this would require ruling.

[Ellen Czajkowski, Office of Legislative Counsel]: And on the study of municipal, when use

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: decisions, or the appeals, municipal appeals,

[Ellen Czajkowski, Office of Legislative Counsel]: Glad to see that is

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: included. I wonder if the Land Use Review Board is the best place to house that. I think this is a important conversation about not just how to reactively respond to appeals, but how to proactively lessen municipal appeals, and that that might be, you know, having them in the group could be important, but that the leadership of that group

[Senator Seth Bongartz (Member)]: may be better suited to another Could

[Megan Sullivan, Vice President of Government Affairs, Vermont Chamber of Commerce]: be And I know Huntsville Homes is actively already working on some of this, so having them as part of this group, I think, would also be helpful to ensure that that work that they're doing is being brought into this conversation, but having it. We can't create work for BAFTA either, but I think they may be, they're maybe better at home. So when we move that conversation to ensure that it's not just about who is reviewing appeals, but what are all of the different ideas that we produce. Okay. Appreciate the guidance on how are things going. That's in there. I think that is incredibly important. We are hearing some challenging things from communities about how things are going on the ground right now. It's a hard time for things to get any worse when they're trying to do this really transformative work. So I'm leave it there unless there's some more questions for me.

[Senator Anne Watson (Chair)]: No, I'm just going be talking. All right, thanks. So we'll meet you. All right, we'll meet Lauren welcome.

[Lauren Pearl, Executive Director, Vermont Natural Resources Council]: So much having me in. For the record, my name is Lauren Pearl, and I'm the Executive Director of Veteran on Natural Resources Council. And I know you've been hearing regularly from a number of the MNRC team members, and happy to provide some initial reactions to the new draft of S-three 45. Of course, we've only been out for a few hours, so we'll definitely feel a lot more about it and back with more detailed input. Just in response to Senator Hardy's question, just from the NRC's perspective, we've been really, as you know, I've been deeply involved with ACT 181 for many years, all the stakeholder processes have been trying to really listen and understand what are the various issues that are coming up as this monumental land use change is being rolled out and implemented, and trying to understand really, first and foremost, are there issues where, and kind of tying into S-three 25, where potentially we might want more time so we can get it right, or there's some time sensitive clarity that can be put in to make sure that it's working as intended. And it was like so many years of effort. So we've been trying to just be helpful. Like there's things that are, I would say other people's priorities that we're just trying to say, okay, here's like a way you could do it that we could live with, but I wouldn't say that's something, you know, so we're trying to just kind of be team players. There's a lot of chatter and it's been a lot of requests from a lot of legislators. It's not like stakeholders are like, we must do this. It's more a lot of legislators have been asking us, some of your colleagues, some colleagues in the house. So it's really trying to be responsive to those requests of trying to get some thoughts, not like drafted legislative language, but just hopefully can be a resource as people are thinking through how do we make this huge change to our land use laws actually work in practice as we roll it out? And so really just fundamentally, we're still kind of coming in with this premise of believing that ACT 181 is setting up the great framework where we can have abundant affordable housing, working farms before it to help the environment and resilient communities. And so we're kind of looking at the range of ideas that are coming out this year. Again, this, are there areas where more time plus do the work better and more thoughtfully and get it right? And are there areas where clarity in short term can help us successfully implement the law? So we're gonna be opposing amendments that fall outside of that scope if people are trying to change the fundamental balance or underlying premise. I really like the way the legislative intent is laid out and aligns with how we're thinking of it as well. And really, as we're in the midst of this process, trying to do clarity and take time to do it right makes a lot of sense to me. Continuing to tinker with a change in underlying policy is just gonna delay, add confusion. It's gonna mean that all of this takes more time. And I know that we want certainty and we wanna get things going. I think as we get back, the full scope of work is all of this mapping, all the rules and regulations are developed, then we'll have a much better sense of, okay, we can look at it comprehensively and say, what's working? Is this working in all parts of Vermont? Can we assess, like, are there more substantive changes that might make sense now that we see, how did this actually play out on the ground for planning all across the state? So that's, I think, gonna be an important next phase of this, but I don't think that's where we are in this moment. The proposals in S-three 25, I think, generally do make sense to us in that vein of timelines and clarifications. So extending the timelines for tier three and road rule, but I do think more time, given how it's playing out, more time for education, listening, outreach, really listening, conceding the rule thoughtfully. I think the conversation that Megan was referencing about looking at the criteria and things like that, certainly open to that conversation. That was our understanding of the law as enacted, was that we could potentially consider looking at which criteria makes sense in the vein of that tier is supposed to be protecting critical natural resources, that's what we want to do. So if we can do that and really thoughtfully, then great, that's the goal of it. So do support extended timelines for those. We've also supported a potential extension for criteria and 8C rulemaking, was not reflected in here. Something you all could consider. So that is the four criteria in had in was also completed in next week one. That was the piece that's not strictly the language is played out, the profession is especially Good. Then great. Enough. Missed that and it could brief. For extending the interim exemptions, I think, especially given the conversation today, definitely interested in looking at how could that be shaped. I think our goal has always been, we're going be transitioning to this permanent new structures and these permanent areas where active duty will no longer apply. Syncing up the timelines and the process so that we have, in the short term, technology we have this housing crisis and trying to jumpstart things, but the point is to transition to the long term permanent areas of exemption and then the other, the tier three and all that. So, and then making sure that we're lining that all up and that times are gonna work would be a different goal. And so, if that, if we've been open to that we might need more time than we initially thought, but think Senator Hardy's point is we're afraid this is just keep in thinking, but try to get it right to get the path.

[Laura Gillen, Senior Program & Policy Manager, Breast Cancer Prevention Partners]: So

[Lauren Pearl, Executive Director, Vermont Natural Resources Council]: we'll look at that more closely, have you think about that more. We support the amendment related to the administration of Act two fifty permits in Tier 1A areas. I think it's just this gap and you just gotta make the program work, so that seems reasonable. We will have some input on the tier 1A area guidelines that are required, but again, we just need a little more time to think about that. We can come back to you with some thoughts there. We support the inclusion of the appeals report. This is really more focused on municipal appeals. So the first report that came out was really looking primarily at Act two fifty appeals. So to us, this is a good plot of a next phase of looking at the different set of issues and concerns that are coming up. And certainly interested to keep thinking about who's the right entity to conduct, help convene that report and correct state. There's already some good ideas that's suggested over that conversation, but I think doing that report will be valuable and hopefully it

[Senator Ruth Hardy (Member)]: could be something that could

[Lauren Pearl, Executive Director, Vermont Natural Resources Council]: be actionable with the timeline and process could be set for action and share at the legislature and the recommendations. One issue not included here that you might consider adding is allowing municipalities to apply for tier 1B designation at any time, independent of regional plan approval processes. This is something we've been hearing as towns are not opting into tier one B as much as people thought, that if to wait, if they miss this round and have to wait for the next approval process, there might be some towns that get their docs for over couple of years, there'd be another time to do that. So we would support that. So just ask

[Senator Ruth Hardy (Member)]: a question about that. So as it is right now, it's every n years they do them in the original plans and can opt into 1B?

[Lauren Pearl, Executive Director, Vermont Natural Resources Council]: Understanding is they wouldn't necessarily have to wait until the next full update, but the RPCs are concerned that they would still have to go through many of the steps of a regular regional plan update getting approved by the other

[Senator Ruth Hardy (Member)]: prior to the Okay. Full So it would just be

[Lauren Pearl, Executive Director, Vermont Natural Resources Council]: a lot of time and resources on the regional planning commissions for it

[Senator Seth Bongartz (Member)]: to say something. I see. Okay. So good there. B, one eligible, and then the kind of compacted, but I've already popped it, and then it's gonna subsets. Yeah.

[Lauren Pearl, Executive Director, Vermont Natural Resources Council]: So was, those are the initial thoughts. Really appreciates the time and effort you all are putting into this. Appreciate your consideration. Super.

[Senator Anne Watson (Chair)]: Thank you so much. Any other questions at this point?

[Senator Seth Bongartz (Member)]: I'll just say about the simplest level, giving the board more time to do its work and then bringing the extensions to the same business. Yeah. Which I I didn't think is the extension signing. So it makes it's kind of my self logical.

[Senator Terry Williams (Vice Chair)]: Yeah. Just a matter of getting 445.

[Senator Seth Bongartz (Member)]: Yep. Pretty good. So, and getting it right is for One thing is we do all over the Midwest is that a year comes and a year comes.

[Senator Anne Watson (Chair)]: Super. Well, you so much.

[Lauren Pearl, Executive Director, Vermont Natural Resources Council]: Thank you so much. All right.

[Senator Anne Watson (Chair)]: So we're going come on that topic. We're going to switch topics. Now we're going to switch over to S-one 138 on commercial pace. We're joined this morning by Mr. Steelea, welcome. For

[Chris D’Elia, President, Vermont Bankers Association]: the record, Chris Steelea, President of Vermont Bankers Association. Madam Chair, how would you like to proceed because I listened to a computer hearing last week, looked up to a lot of questions. Yes. Can try and answer some of those questions or just keeping my opinion on the bill and what I mean, what

[Michael O’Grady, Office of Legislative Counsel]: you pepper me or

[Senator Ruth Hardy (Member)]: something. Well,

[Senator Anne Watson (Chair)]: think we should go in that room. Let's start with your thoughts on the bill and then we can move to the

[Chris D’Elia, President, Vermont Bankers Association]: questions. So my background goes all the way to when we did residential PACE, most obviously in the building when we did that and worked with folks over at DFR. I think you know the history of residential PACE, but I'm happy to shed some more light on that if you have questions. In this particular bill, in this particular draft, which I'm looking at 3.1, which we went through last week, the language that for us is most critical and is in there is found on page six lines two through seven. And that's where the entity wishing to take out an assessment or apply for an assessment has to go to an existing lien holder, mortgage holder to seek their approval to obtain such an assessment. That's critical because the commercial lender as with residential as well, we need a priority position in front of other lien holders aside from property taxes, which is of giving in Vermont, it's for commercial property, residential property. So to have somebody who's got a lien on a property, all of a sudden go and get another loan that sits in front of ours. And in the case of commercial, could be talking large stone money, unlike the residential, which typically was tended to 1,000, you're really gonna be talking, I mean, on the project several 100,000. And that does not work for your commercial land groups in Vermont. So this language that you've got here is absolutely vital. It is the property owner, the commercial entity, an opportunity to have a conversation with their lender. The lender may look at all of the circumstances of what they wanna do and make the loan available to them without having to go through PACE. There may be such a small de minimis amount we left on the loan that the lender said, sure, have added. I think the other thing that's important here is by giving us this consent, we're also helping to preserve the position of the Vermont Economic Development Authority, which often we partner with on commercial loans. They sit in second position behind the bank and without this consent theoretically, they go to third position and they do want to do that. So this language is critical and we appreciate seeing it in the building.

[Senator Anne Watson (Chair)]: Absolutely. I'm wondering if you can speak to, I don't know if you are familiar with PACE in other states, PACE in other states and if that is common, we can ask other people this question as well, but-

[Chris D’Elia, President, Vermont Bankers Association]: If the language is common?

[Senator Anne Watson (Chair)]: This kind of provision is common

[Senator Ruth Hardy (Member)]: in other states commercial base?

[Chris D’Elia, President, Vermont Bankers Association]: I have not looked at all 38 states of the overwhelming majority to have this consent language in including our leaders in New Hampshire, which works well because a number of our banks serve New Hampshire as well. So they're commonality in the market, this type of program.

[Senator Anne Watson (Chair)]: Super, any other questions? Yes, go ahead.

[Senator Ruth Hardy (Member)]: Hey Chris. So I just fundamentally don't quite understand this program. Might maybe lift into my overall confusion, like why would somebody use this program and why would a municipality do it? And isn't it, with all the things of the, you can contract with another entity to administer it and everything, why wouldn't somebody just go to a commercial lender? Right.

[Chris D’Elia, President, Vermont Bankers Association]: So the concept behind PACE is critical to have the municipal involvement because they're the only ones that have the meaning authority is contemplated in the bill. In other words, it's gonna run with the property. You're making a loan not to the property, you're making a loan to the entity that owns the property. So if that is the mechanism that the legislature wishes to use as repayment, we've got to have a municipality involved in that way. In hearing your comments, what ultimately happened in the residential piece was municipalities did not have the capacity to initiate a piece program. So for residential, they went with efficiency laws. They handle all of the mechanics behind the scenes and basically municipality just created the district and they utilize their lean authority to establish the lean on the side. But the municipalities didn't want the risks of taking out that we don't get repaid with property tax payers in that community, you're still on the look for that money so that goes away. What you've got here is the concept of contracting with the third party, which is important because again, I don't think you're gonna have many municipalities in that class to do it. But you do need a municipality to create that mechanism for repayment when you're attaching to the properties. Okay. Could you go to a commercial lender today? Yes. But you have to understand a commercial lender is gonna look at all of the circumstances of the borrower and all of the underwriting criteria that they have at their disposal to make a determination whether that borrower, whether the credit risk with that borrower is low enough to warrant making the loan and that repayment will occur.

[Senator Ruth Hardy (Member)]: Right.

[Chris D’Elia, President, Vermont Bankers Association]: That can happen today, but I will assure you that there will be some projects that don't pencil out.

[Senator Ruth Hardy (Member)]: Right, but so then if that happens, they go to a bank and try to get a loan and the bank says no, and then they try to do PACE because the lien goes with the property, the risk is worth it because there's a lien on the property.

[Chris D’Elia, President, Vermont Bankers Association]: You're changing, theoretically you're changing the terms of the loan as far as repayment of those funds,

[Senator Anne Watson (Chair)]: which

[Chris D’Elia, President, Vermont Bankers Association]: is going to be for a longer period of time than you're going to find on the co commercial loans, seven, ten, fifteen years. So when you can go out beyond that, the repayment amount is less on a annual basis. And I don't know what aside from the testimony of that national group, I don't know what they might be able to obtain from the interest rate, which may or may not be a little bit lower than what the typical market is, so maybe that helps as well. But ultimately at the end of the day is if a commercial vendor was looking at it, we're looking at all of those circumstances and underwriting to say, are you a good credit risk?

[Senator Ruth Hardy (Member)]: Yeah.

[Chris D’Elia, President, Vermont Bankers Association]: This just gives a little more flexibility on repaying the job.

[Senator Ruth Hardy (Member)]: Do you know, I mean, maybe we should have that efficiency in Vermont in, but do you know how did it work well for the residential program?

[Chris D’Elia, President, Vermont Bankers Association]: Well, in my opinion, it didn't work well for a couple of reasons. One, in looking at the issue of energy efficiency improvements in your home, to me the best model that was out there at the time that I looked at it was NeighborWorks down in Rutland because they, if you will, held your team through the whole process. Yeah. They said, here's an opportunity for you. Here are the contractors, here are the steps you're gonna have to go through. We don't hear anything within a few weeks, they're on the phone calling me up, hey, how's it going? You need that.

[Senator Ruth Hardy (Member)]: A community based in person navigator.

[Chris D’Elia, President, Vermont Bankers Association]: Good point. Yeah. You need that to stimulate somebody to move in that direction because you have people who don't, aren't thinking about it, don't have the capacity to think about it, have the money, but don't care, whatever it may be. That was the best model out there. Absent that you had communities who adopted the case and without that claimful, then you nobody to You with also had the complexity, again in my opinion, developed by the Department of Financial Regulation that was more akin to traditional underwriting standards that you would find in the market. Whether it's efficiency, Vermont and municipalities, you have to have sound underwriting standards to ensure that we are not putting Ruth Hardy in the water with the loan that she's getting on the And all of that changed because residential base was pre the financial crisis. All of that changed during financial crisis because now the highest criteria that we're required to look at is ability to repay. You don't have an ability to repay. We're probably not doing that well on the mortgage side.

[Senator Ruth Hardy (Member)]: Commercial side. Yeah, so I guess I'm concerned that if, I don't know, I just can't wrap my head around this one. I'm not sure why the municipality would take the risk of having a lien on a property. I mean, will this, could this potentially harm a municipality if they participate in them?

[Chris D’Elia, President, Vermont Bankers Association]: If it's structured with a third party and that third party is funding the loan and the obligation to repay is, let me rephrase that, if the losses are going to be absorbed by that third party, then I think there's less risk to municipality. If the municipality were creating a loan and lending out the monument and there were losses, the municipality is gonna be obligated to repay those funds to wherever they got the money from.

[Senator Ruth Hardy (Member)]: Yeah.

[Chris D’Elia, President, Vermont Bankers Association]: That's where I think the real risk is to municipality. The municipality theoretically under this bill, if I'm reading it correctly, could go to the voters and say, we want this block in our town to be a district and we are going to contract with whoever decides to step up and be the party to work with the municipality, that entity is gonna assume all of the obligations to run the program, risk of the program. At that point, the municipality is only providing their property tax lien mechanism to get the funds repaid. At least that's how I'm reading. Okay. Bill, as you've got it.

[Senator Ruth Hardy (Member)]: Yeah, mean, originally I think it was the other

[Chris D’Elia, President, Vermont Bankers Association]: way because the

[Senator Ruth Hardy (Member)]: municipality took the risk and it's like,

[Chris D’Elia, President, Vermont Bankers Association]: why would I don't agree that, I can probably count on one game, the municipality might wanna do that under the old scenario. I think he's less than that concern here in this stuff. Okay. That said, a municipality should know what they're getting.

[Senator Anne Watson (Chair)]: Yeah, and a lot of our municipalities are not that sophisticated.

[Senator Ruth Hardy (Member)]: They just don't have the staff to deal with it

[Chris D’Elia, President, Vermont Bankers Association]: or staff resources to work.

[Senator Anne Watson (Chair)]: You. Any other questions? Okay, super. All right, thank you

[Senator Ruth Hardy (Member)]: so much. Thank you.

[Senator Anne Watson (Chair)]: So we're going to go to Mr. Polum, who is joining us virtually, I believe from Connecticut. Mr. Polum is the managing director, head of PACE ratings and analytics at Counterpoint Sustainable Real Estate. Can you hear us? Seems like maybe the answer is no. Oh, sorry.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: I was on mute. Yes, I can hear you and there I am.

[Senator Anne Watson (Chair)]: Super. Thank you for joining us.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Thank you for having me.

[Senator Anne Watson (Chair)]: Would love to hear any thoughts that you have about, in general, how PACE works in Connecticut. I'm sure

[Senator Ruth Hardy (Member)]: we, well, I'm sure I have questions about how

[Senator Anne Watson (Chair)]: it works, but would love to give you the floor.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Great, thank you. Yeah, Kirk Pollum at Counterpoint Sustainable Real Estate. Counterpoint is one of the oldest providers of C PACE capital in the nation going back to 2014. I was at Counterpoint in 2016 to '18, took a detour, came back here two years ago. So I've been involved with PACE for a very long time. We are not just a capital provider, we are a PACE administrator in California, Florida and Chicago. So we have experience also on the administration and servicing side. We are backed by MassMutual. So we actually invest really solely right now for MassMutual as a life insurance company and and originating PACE investments for them. We are just C PACE, though originally our founder Eric Alini was involved with R PACE and the tax lien business in Florida. And I did yeah, I was listening to Chris's comments. I did watch last week's meeting just to understand where you are with the bill and what your concerns were. And, you know, they're they're important ones to consider. I will say the one issue on the municipality and their involvement, you know, largely we have 40 states. Right? So we have, at this point, PACE is a pretty mature financing vehicle for energy and resiliency improvements across The United States. And typically municipalities these days don't have really any involvement other than their involvement with creating the tax lien that goes on the tax rolls. And there are two ways to collect the tax of the assessment payments. Really, you can do it as as you do the real estate taxes, which is it's on your tax bill, you pay it to the municipality, and then they pass the the assessment payment to the investor. And then there's in the minority of states right now, there's a direct billing that happens where really they're not involved at all. Even even with collecting the assessment, it's direct direct payment to the to the investor. And so the involvement really with the city, municipality is just opting in.

[Chris D’Elia, President, Vermont Bankers Association]: If you

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: pass the legislation, the city opt in, doesn't opt in, or they they do a an opt in agreement, an ordinance passing pace in their in their district. And then the program administrator would handle really the rest. And I'm saying that from experiences. We were actually one of the first administrators in Florida and California, were pioneers in PACE. California was the birthplace of PACE. And so I think that is something that largely I don't think would be a concern here with passing the legislation. And the other issue that I that I heard, is understandable is why why don't banks do this? Right? And getting back to what PACE does, which is it's it's helping to fund these energy and resiliency improvements there. It's meant to roughly tie to the duration of those investments, right? So you are funding a long term investment and the piece itself is a long duration asset that's created. And so, you know, banks don't generally, I mean, they can do twenty, thirty year long type loans and and, you know, but the PACE is an exception that way. So that also factors in into the pricing. I know that's probably an issue. You know, PACE can be a lower rate, but that's also balanced with the fact the long duration assets. So you are going further out just the pricing mechanics. But if you're if you're a long long duration asset, you're you're tying that to say the thirty year, the twenty year treasury. So that impacts what the rate might be similar similar to a mortgage. But the other important issue is that is that what you've talked about, which is the pace doesn't accelerate, right? It's tied to the owner of really the tax parcel. It's tied to the tax parcel. So, if that owner decides to sell, pay, the assessment stays with the property, they can pay it off, they don't have to. If there's a foreclosure, if there's a non payment, you know, that's handled just like non payment of taxes. So it doesn't, the whole assessment doesn't accelerate. It just, you're just going back assessment as you would with the property taxes and you're doing this with the existing mechanisms that are in place for unpaid taxes within the state. I'm going to stop there and see if there are questions.

[Senator Ruth Hardy (Member)]: Yeah, sure. Go ahead. Thank you. This is helpful. Two questions. One, does your company charge the municipality anything to manage the program?

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: It's actually the other way around.

[Senator Ruth Hardy (Member)]: Okay. Yeah.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: So, you know, if the municipality is involved, it depends on each state is different. That typically if we'll take Florida as an example, maybe not the best example, but because they, you know, the fees are an issue. They charge to collect assessment and pass it along to us. Okay. And I will say those fees are paid by the property owner as part of the assessment.

[Senator Ruth Hardy (Member)]: Okay. I don't know if you've ever been to Vermont, but our towns are tiny. And I'm very concerned about putting them at risk if they end up doing this or costing them any money. Right.

[Ellen Czajkowski, Office of Legislative Counsel]: What, you've been doing this for a long time, do

[Senator Ruth Hardy (Member)]: you have any data on the sort of default rates on these loans? Or is that not a thing because it's tied to the lead?

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Oh no, it's a thing, and we can get into, you know, all the credit aspects of this. I'm gonna back up though and tell you I am a Vermont resident Manchester Center. Yeah.

[Senator Ruth Hardy (Member)]: So awesome.

[Chris D’Elia, President, Vermont Bankers Association]: Yes.

[Senator Ruth Hardy (Member)]: You have been to Vermont then.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: I'm I'm yes. Well, obviously these days I'm in Connecticut during the week, on the weekends I'm in Vermont where my daughter is there permanently going to school there. But yes, so you get into sort of the credit aspects of how we look at pace. And I know this is one thing that came up in the bill, which is what are the limits on pace? I know you have in there that it's an all in LTV of 90% and that's fine. I see that's pretty common type limit. But when you look at pace and where it sits generally, and I can tell you our own underwriting criteria, are that of our competitors too, is we're not more than say 30% of the property's value. And because I'm doing commercial pay sets, that's income producing value of that piece of real estate. So we really look at the ability of the not just the current property owner, but, you know, future property owners and what that property is to be able to hand pay any assessment. In addition, of course, the taxes and other operating expenses and a mortgage if they have a mortgage. And that gets back to lender consent, which I can tell you is standard. Lender consent is you need to have that, you know, it's kind of Chris reiterated that, but it's it's very common and necessary because PACE is going to be senior priority to the mortgage, typically pari pursue with the real estate taxes. And so we we generally I mean, I can tell you our defaults, which is, you know, we have, we service 9,000 assessments all in. We have a rather large book approaching a billion. And think we've had like one or two that were a problem. So that goes back to our rigor as how we invest. We are investing, like I said, for a live company. So we're pretty strict in how we underwrite pace within the relationship to not just the property, but also the rest of the capital stack with the mortgage lender. I can tell you that mortgage lenders evolve, which they mostly are, they're the ones that decide how much leverage is on an asset and what they're comfortable with and where PACE fits with that.

[Senator Anne Watson (Chair)]: Okay, thank you. Yes, go ahead. Have another question.

[Senator Terry Williams (Vice Chair)]: Kind of protections are available for safeguards for the people being involved?

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: What are the safeguards? Yeah. On the commercial side or

[Senator Terry Williams (Vice Chair)]: No. First, on the residential.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Well, resident well, I see. So I we're not experts at residential. We haven't been involved with residential PACE since well, before it's 2016. That has absolutely been an issue. I mean, the the problem that happened in California and Florida was there was widespread spread abuse. Right? And California enacted consumer protection laws just for that reason. You know, it was people were taking advantage of of homeowners who didn't realize what they were signing. Right? They were like, oh, I'm getting this great solar installation. They didn't understand that their property tax bill was going up by two, three, four fold. Right? And so consumer protection laws in residential PACE, I think are important to prevent that from happening again. We don't see that, we don't, it's not really a consideration in commercial pace. We are, you know, we're dealing with institutional capital for the most part in, well, not for the most part, all the money coming from C PACE is institutional capital that is, you know, in our case, we're actually by the SEC. We're an RIA. So you're not you're not gonna see any abuse from us on the commercial side. And, you know, we can talk about I know there was question of, well and I understand why PACE is important for, you know, the smaller homeowners and business owners in Vermont. We do small, we do PACE as low as well sub million and we'll do that for small apartment complex owners. We'll do it for small businesses that are, you know, putting solar or other improvements into their property because it's an important alternative source of capital for them. The upfront cost, because we'll finance up to a 100% of the solar or the HVAC or the heat pumps. The fact that you can amortize that over 30 or that the useful life, right, And effectively spread that cost over the useful life of what you're putting on the property is very useful. And, you know, I think there was also the question on, well, how do the payments work? It's really simple. It's it's a level pay amortizing fixed P and I payment. It's a schedule that's it's set and put into the assessment contract and the financing agreement that are signed and memorialize the the SMS, the assessment that's being put on on the tax rolls. And so there's PACE is also very passive. So we don't have short of like a default. We just sit back and collect the payments and don't don't have any involvement.

[Senator Terry Williams (Vice Chair)]: Okay.

[Senator Anne Watson (Chair)]: And you know this, this is just about

[Senator Ruth Hardy (Member)]: commercial mix. Correct. Yeah.

[Senator Anne Watson (Chair)]: Okay, any other questions? So I would actually love to hear a little bit more about how, because you, it sounds like you're working in a variety of states, and maybe this question has basically been answered, but I just want to revisit it about how this works for very small municipalities that don't have a lot of capacity. Mean, if you're here at least some of the time, you know that like some of our towns, they may only have a town clerk. They may not have any other staff.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Right.

[Senator Anne Watson (Chair)]: Can you speak to And maybe it's just this direct billing, it's how it is managed, or are there other considerations that we should be thinking about for various small municipalities?

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Yeah, no, sure, understood. Well, yeah, so we actually, we're national. There's no state or program we don't deal with and invest in. On the, it's interesting, there's a number of ways you can do an opt in on the county level or the city level, town level. And so like if your entire county opts in, you know, then it certainly makes it easier on, as you said, I mean, it's like.

[Senator Ruth Hardy (Member)]: That's how things work in Vermont.

[Senator Anne Watson (Chair)]: Yeah, unfortunately, our county level systems are more or less non existent. It's either the state or it's municipal at this point, unfortunately. It's

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: not, it still wouldn't be like you can have, you have a standard sort of tri party agreement between the municipality, the program administrator and the capital provider. And we have, there are states that have very standard opt in agreement that you take to your town, to your city council or your town clerk, right? And they all vote on it. And that's the other thing. It doesn't involve any sort of widespread vote by your voters. Because this is a one off each property owner decides whether or not they want to utilize PACE to do their energy efficiency projects. And so once the county opts in and the agreement is in place, they've agreed, you know, that they're going to put the assessment on the tax roll and to whatever the collection mechanism and agreement is, then it's like, you know, there's very little to any involvement on the town level.

[Senator Anne Watson (Chair)]: So

[Senator Seth Bongartz (Member)]: banks like to get paid monthly, but municipalities in Vermont collect property taxes usually twice a year.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Yes.

[Senator Seth Bongartz (Member)]: What happens then?

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: That's how it works. We get investors are paid at the same time as well, not the same time. There's usually a grace period and a rough call it a month between

[Senator Ruth Hardy (Member)]: when

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: the assessment payment is due and the investor payment from the assessment. So, yeah, it it coincides with whenever those are are collected, that's how we deal. Know? In California, it's twice a year. In some states, it's once a year. And that's yeah. There's there's no we're not like a mortgage where it's monthly.

[Chris D’Elia, President, Vermont Bankers Association]: Yes,

[Senator Ruth Hardy (Member)]: go ahead. This bill does require the voters to vote on whether or not to have a district. So it would be a vote of the entire town on whether to opt in to have a district is my understanding. Yep. Yeah. Yeah.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: That's gonna be a barrier then. Yeah. That's not something we we see. I mean, I could see it with maybe with our pace, but with c pace, we don't not that's not standard. Yeah.

[Senator Anne Watson (Chair)]: And this that language was left over from the our original draft. So that's something I

[Senator Ruth Hardy (Member)]: think that's worth talking with. But can I

[Senator Anne Watson (Chair)]: ask yes?

[Senator Ruth Hardy (Member)]: Go ahead. Chris, actually, I think it's more for you. Do you have a draft in front of you? Bottom of page 10, top of page 11, this is about the lean.

[Chris D’Elia, President, Vermont Bankers Association]: It

[Senator Ruth Hardy (Member)]: says that lien shall not be subordinate to all other liens on the property in existence at the time the lien for the assessment is filed on the land records. So does that mean the PACE lien is the priority lien?

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Who's being asked that?

[Senator Ruth Hardy (Member)]: I'm asking for Cecilia who's in the room.

[Chris D’Elia, President, Vermont Bankers Association]: Yeah, it would not support it, so it would be in a priority position.

[Senator Ruth Hardy (Member)]: So the case lien would be the priority. Correct. So anybody, any other liens on the property would come second or third or whatever. That?

[Chris D’Elia, President, Vermont Bankers Association]: Well, that's why the 10 languages before it's not made six.

[Senator Ruth Hardy (Member)]: The language that you mentioned. Yeah. That's So that the The bank would, the mortgage would still be first and then Vita maybe second to the pay slope.

[Chris D’Elia, President, Vermont Bankers Association]: You may come to us with a request and we're gonna have a conversation and we're gonna understand your overall circumstances around your borrowing with us. And we're gonna say, Ruth, we're not gonna consent to a PACE loan. It's too risky to our position as a lender. Yeah. We may say, Ruth, you only owe $10. It's a de minimis amount and we don't see where our case loan would be an obstacle. So we're gonna consent to let you take that case loan out. That piece loan with that language that you've referred to on page nine and ten takes a priority position in front of our de minimis amount of $10,000 Oh,

[Senator Ruth Hardy (Member)]: so after you consent, you drop you. Right. You consent to being the lower.

[Chris D’Elia, President, Vermont Bankers Association]: Correct. And that's why it's important for those conversations to happen because if our skin in the game is of you $100,000 or a million dollars, chances of us consenting and running the risk of not getting paid is probably not gonna happen. Yeah. Without the consent language, if this was just to go straight through without any communication of the bank, The responses that I've gotten is commercial lending in those communities with CPAs program will not happen. Yeah, just won't happen. Was too long. Because he got stuff.

[Senator Ruth Hardy (Member)]: All right, thank you, Ruth.

[Senator Anne Watson (Chair)]: That's great. Yes, go ahead.

[Senator Seth Bongartz (Member)]: So remind me why the PACE has to have top priority. Well, because structurally that's your policy, the way you're creating it

[Chris D’Elia, President, Vermont Bankers Association]: in this bill is it's given that priority because you're treating it just like property tests, different than properties. Yes. So if you could have a policy that does something different, that puts it behind a commercial loan, In that case, you wouldn't need lender consent because it's taking less of a priority compared to the commercial owner either.

[Senator Seth Bongartz (Member)]: What would happen to the program viability if we did that rather than? I don't think you're gonna have much success. Okay.

[Senator Anne Watson (Chair)]: Okay. All right, any other questions for either Mr. Paul or Mr. Daley? Okay, great. Thank you so much. Thank you for joining us. Really appreciate your testimony.

[Kirk Polum, Managing Director, Counterpointe Sustainable Real Estate]: Thank you. Appreciate it.

[Senator Anne Watson (Chair)]: Yeah. Okay. And so at this point, I know we are scheduled to go into a new topic, which is 02/24, but I do want to take a quick break. Let's say five minutes.

[Ellen Czajkowski, Office of Legislative Counsel]: Hey, Kevin. Kevin?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Yes. Hi. Good morning.

[Ellen Czajkowski, Office of Legislative Counsel]: Hi, Kevin. How are you on time?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Well, 11:00 we have a scheduled interview. That's why I'm kind of Okay.

[Ellen Czajkowski, Office of Legislative Counsel]: Well, hopefully we'll, we'll be done with, before that because we've got Mike O'Grady coming in at 10:45, but they needed a little stretch break. So, she told them five minutes, but it's been five minutes. So, any moment we should start.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Good, I'm here.

[Senator Ruth Hardy (Member)]: Okay, thank you.

[Ellen Czajkowski, Office of Legislative Counsel]: Hey, one other question, Kevin.

[Senator Anne Watson (Chair)]: Did you

[Ellen Czajkowski, Office of Legislative Counsel]: see the latest draft that I posted this morning?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: That would be 2.1.

[Ellen Czajkowski, Office of Legislative Counsel]: Yes. Yes. Okay.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Thank you.

[Ellen Czajkowski, Office of Legislative Counsel]: No. Kevin?

[Senator Anne Watson (Chair)]: On the mouse,

[Ellen Czajkowski, Office of Legislative Counsel]: a draft that says 4.2.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: I did not see 4.2.

[Michael O’Grady, Office of Legislative Counsel]: We'll have

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: to look for that one.

[Senator Ruth Hardy (Member)]: Sorry. It's okay.

[Chris D’Elia, President, Vermont Bankers Association]: Very well. Okay.

[Senator Anne Watson (Chair)]: We're right, this is Minnesota, Natural Resources and Energy coming back with break, and we are joined remotely by Mr. Burke from A and R. Yes, DEC. Welcome. Excuse me.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Hi, Chair Watson. Hi, committee members. It's nice to be here. The last time I think I joined your committee, was working in the stormwater program here at DEC. I've recently taken a position after our the retirement of our former director, Pete LaFlamme. So I'm now serving as director over the Watershed Management Division.

[Senator Anne Watson (Chair)]: Great. Well, And one of the things in relation to S-two 24, we know that there is a draft rule that has a lot of similar topics to things that are in S-two 24. I'm wondering if you can share with us about that.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Yeah, there's, I mean, the current rule essentially covers municipal delegation. It covers, wake sports. It covers you know, it's basically a reissuance of our rules, taking into account some of the necessary changes to deal with some of the emerging issues. So we think that's really the best place to have a lot of this language that's included in the in the proposed bill. I didn't know if there was anything specific within those rules that you were most interested in.

[Senator Anne Watson (Chair)]: Sure, well there's a part about municipal delegation and there's a portion about wake votes, but if we could talk about, because there's a part that is currently in S-two 24 that I think is going to be coming out, but if you could speak to the municipal delegation aspect.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Yeah. I think I would say that the municipal delegation in the use of public water rules is sort of better better suited to to deal with,

[Senator Terry Williams (Vice Chair)]: you know,

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: designating a municipality. It also involves, you know, through the rulemaking process, it'll also involves, a fair number of stakeholder stakeholders and public comment. I think it's also worth pointing out that, you know, despite municipal delegation, it would not, whether it's in this statute or in the rule, it doesn't give a municipality the authority to make their own rules. And even if it did, the public water rules would not include the ability to regulate fishing. It's really only specific to the types, sizes, speeds of boats. So that that authority with regards to fishing really, remains with fish and wildlife. Our role also, I think, provides a little bit better clarity on some of the roles and responsibilities for a municipality that's seeking delegation. So I think that's one of the other important aspects and the differences.

[Senator Anne Watson (Chair)]: Yep. That's fair. And then can you speak to the aspect that has to do with the the changes relative to wake boats available areas?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Yeah, I think one distinction to make from this bill and the rules, one thing that I think needs to be clarified if this bill was going to include anything on wakeboats is that the prohibition or the you know, essentially, wakeboats are allowed in certain, designated zones, but it's not necessarily a prohibition of wakeboats as a whole. It's really when these boats are operating in what's called wake sports mode. So there's really the bill is in conflict with sort of how the rule speaks to wake boats. So I think that's just an important clarifier because these boats can operate in non wake sports mode, and they wouldn't otherwise be restricted on really any lake so as long as, you know, the lake is permitted for combustion motors.

[Senator Anne Watson (Chair)]: That's interesting to think about wake boats being allowed but not in their wake mode that that effectively, they become a

[Senator Seth Bongartz (Member)]: Just a motorboat.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Motorboat. Yep. Yep. Because the wake boat mode the wake sports mode is a specific mode that then, you know, they use the ballast tanks to create larger wakes.

[Senator Anne Watson (Chair)]: Correct. Did you have

[Senator Seth Bongartz (Member)]: a question? So are we talking about the proposed rules?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: The proposed rules do make the distinguish distinguish wake boat from wake sports mode. So it's really specific to wake boats operating in wake sports mode as opposed to simply prohibiting wake boats or only allowing wake boats to operate in certain areas. It's really only when they're in that mode.

[Senator Anne Watson (Chair)]: Yeah.

[Senator Seth Bongartz (Member)]: Okay. And is there such a thing but how how would we actually regulate that and make sure that water isn't passing through the ballast? Like, there's I guess, theoretically, it doesn't if you're not sport mode, but sounds awfully tend to us if if we're really worried about contaminating water. Yeah.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: I think we're talking about maybe two different things. There's there's restriction on where wake boats can operate because of the larger wake that they

[Senator Seth Bongartz (Member)]: Yes.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Create in that mode, which would be, you know, looking to have them operate in areas where there's plenty of room from the shoreline. There's adequate depth because they do generate a fair amount of wake. And then there's the aquatic invasive species piece of it where, know, if a late if a wakeboat is moving between lakes, there is the need to decontaminate. And, you know, there's a lot there's a number of provisions in this bill that speaks to the home lake rule and puts that back into place. We've we've gone away from that, simply because boats are both coming from out of state and in state. So not necessarily addressing that through DMV would get at,

[Senator Terry Williams (Vice Chair)]: you know,

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: identifying all of the wake boats that might be operating in Vermont, but really just making the requirement that any boat that is moving between waters is properly decontaminated, just like any other boat that would be traveling between waters, but the difference being that wake boats would require a hot, hot water decontamination.

[Senator Seth Bongartz (Member)]: So, are we talking when you say that? So, what what's contemplated in the bill, I think, is that a wake boat would have the home wake, couldn't move without being decontaminated, and a boat could not come in from out of state without having been contaminated. Right.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: There's there's just a real difficulty in tracking to know what wake boat has been decontaminated without you know, there's no sticker. We couldn't necessarily know of all the wake boats through a DMV registration And greeters, for example, that are often at some of these access areas wouldn't have access to any sort of database that's tracking those boats. So it really it it becomes a little bit problematic in terms of how we would track and implement the home lake rule as it is written in the bill, which is why we aim to clarify, you know, rules that simply requiring a decontamination and having some proof of that if you're moving between lakes.

[Senator Seth Bongartz (Member)]: Okay, that that rule is one we share, I guess, so the question is whether we could statute or whether we work out in the polls. Is that in the proposed rule?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: The requirement for decontamination?

[Senator Seth Bongartz (Member)]: And proof of proof thereof?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Yes, we haven't developed what that proof would look like but it would be some you know it would be something that they could provide to a greeter or you know, maintain to prove that they have decontaminated. We also have a report that identifies, you know, some of the expanded both boat wash and decontamination stations going forward and also identifying the ones that exist now for a hot decontamination wash. So there is there would be a process for ensuring that if a boat was decontaminated, they would have proof or a receipt from that activity.

[Senator Seth Bongartz (Member)]: But you are saying that you are rocking the the home lake, any kind of home lake move?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Yeah. The home lake rule is is not part of the current rules before ICAR. One

[Senator Ruth Hardy (Member)]: of the

[Senator Anne Watson (Chair)]: possibilities that going to see a new draft soon, something we've talked about is the possibility of having wake votes be identified at the time that they're registered, that the DMV could alter their registration form to include a box to say like, is this a WAPO? And do you have a home life? Am making an assumption, but I'd like to check it with you that that would be useful information for you to have.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: We it it certainly could be useful in terms of identifying boats that are reg wake boats that are registered in Vermont, but, you know, we also have a lot of shoreland property owners that bring boats from out of state and register those boats out of state, so it wouldn't capture that.

[Senator Anne Watson (Chair)]: Sure, but it would capture the ones that are registered in Vermont.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: Sure, it definitely would.

[Senator Ruth Hardy (Member)]: Yeah, yeah.

[Senator Anne Watson (Chair)]: Okay, any other questions? Well, just to get at it, the rules around wake book decontamination, your sense is, your preference would be that that be in rule and not in statute?

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: That would be our preference.

[Senator Ruth Hardy (Member)]: Okay. Okay.

[Senator Anne Watson (Chair)]: Well, thank you very much.

[Chris D’Elia, President, Vermont Bankers Association]: You're welcome.

[Ellen Czajkowski, Office of Legislative Counsel]: All right.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: If you do have any follow-up questions, certainly can provide answers as necessary.

[Senator Anne Watson (Chair)]: Okay. Sounds great. Thank you.

[Kevin Burke, Director, Watershed Management Division, VT DEC (ANR)]: All right. Thank you, everyone.

[Senator Anne Watson (Chair)]: Okay, all right. And actually before we move to Mr. Adreary, I'd like to take a one minute break. Is that okay? It's your insurance. Yeah, yeah. We can take just one minute, that would be great. Can we? Okay, thank you for that super short break. So we have a new draft of two twenty four, and again, not totally done, but wanted to skip a little framework for what we're going to see. So we did hear a lot of feedback about section one, about the municipal delegation that we just heard from Mr. Burke that they have their own section going through rulemaking and that as it was, it would not have We would have had to further amend it to give the municipality the ability to regulate fishing anyway. And so it made sense to me to remove that section, especially if we were going to be addressing that in a different way in section eight. So, or what was, so that is one change that you'll see here, again, responding to, to testimony and feedback. And then the other major change here is, about the, how we deal with the locations of boat washing stations and decontamination stations. And so this language did come from the Department of Fish and Wildlife. Again, this doesn't have to be where we land, but wanted to at least get this in front of the committee. They also have some recommended language about the fishing tournament, which is not here, and we can talk about that separately. But I thought I would at least start here. So Mr. Grady, welcome.

[Michael O’Grady, Office of Legislative Counsel]: Good morning. This is Blake McGray, but the steps council. Do you want me to just walk through your changes?

[Ellen Czajkowski, Office of Legislative Counsel]: Yes.

[Michael O’Grady, Office of Legislative Counsel]: Okay. So you should have draft number 4.2 with the February and the 07:40AM time stamp. And the yellow highlighting throughout recognizes changes that were made between this draft and the previous draft reviewed by the committee. First change, as the chair just referenced, the previous section one on municipal delegation of authority over the use of the water has been removed, it's no longer in the bill. The second change relates on P 1.7 in the reader assistance. We will see later on that there's a section regarding voter registration, and so that term was added to the reader assistance. So moving on from there, the next change is on page two, going on to page three in the section that was in the previous draft related to use of waters by the waitlist. So on page three, lines three through seven, in order to operate a wake boat in the model, the person who owns or controls the wake boat shall, on the vessel registration or validation form, Annually or biannually identify a home length of the repo for the calendar years for which the registration or validation is valid. Okay, so this is the registration form. You can see that vessel type is already something that they ask for identification of, and it includes things like houseboats, open motorboats, pontoon boats. They, the DMV said that it'd be easy. Well, they they'd be willing to add weight boat to this form. Now they do register, as with your car, more than annually. You can register biannually, so that's why it says biannually biannually. In addition, there's something called a validation. It's when you are an out of state vessel and you come into Vermont and you're going to be in Vermont for more than sixty days, you have to fill out, basically it's a temporary registration, they call it a validation so that they know who you are. There would be vessels that come in from out of state that do not need a registration or a validation if their state follows a comparable numbering system or federal numbering system. So yes, there would be way quotes used in the state that would never have to get registration or a validation.

[Senator Ruth Hardy (Member)]: If they're here for more than sixty days, they should be doing the

[Chris D’Elia, President, Vermont Bankers Association]: same.

[Michael O’Grady, Office of Legislative Counsel]: They should be getting On a page three, line 14, where it had previously said existing boat washing stations shall not be considered an agency approved decontamination service. The US said existing be removed. The question is, do you still want ANR to have the ability to approve a boat washing station as a decontamination service. There was proposals from some advocates to strike that unless sprays, but I never received that directive from you.

[Senator Anne Watson (Chair)]: I am, Where are you? I think I've lost where

[Michael O’Grady, Office of Legislative Counsel]: you Page three, lines fifteen and sixteen. Oh wow. It obviously said existing boat watching stage.

[Senator Anne Watson (Chair)]: Okay, this is a little bit funny, but there you have a page three. I do not have a page three. It goes one, two, and then five. Isn't that odd?

[Ellen Czajkowski, Office of Legislative Counsel]: Does anybody else have that, girl?

[Senator Anne Watson (Chair)]: That does Yeah. You have page three. Yeah. That one that one works. Okay. Great. No. No worries. That's just very funny. Okay. Why I couldn't find you? Sorry. So page three.

[Michael O’Grady, Office of Legislative Counsel]: Page three. Line 14, previous step, it said existing road watching station, and then you have that conversation about existing prior to what, and then you have the conversation, well it should just be any road watching station dropping containers decontamination. But then there were advocates who are saying that the agency shouldn't be allowed to approve a boat watching station as a decontamination service. I did not make that change because you did not direct me to the convention.

[Senator Ruth Hardy (Member)]: Thoughts from the committee on that, or do you need it one more time?

[Senator Seth Bongartz (Member)]: We need it one more time. What we're trying to achieve that makes sense to me, to the security, it's

[Michael O’Grady, Office of Legislative Counsel]: a matter of how you're saying it. I think the advocates want decontamination sites to be a totally separate thing from boat washing stations, and they don't want ANR to be able to turn a boat washing station into a decontamination service.

[Senator Ruth Hardy (Member)]: I would count as decontamination.

[Michael O’Grady, Office of Legislative Counsel]: What chances? Right.

[Senator Anne Watson (Chair)]: The yeah. The boat.

[Michael O’Grady, Office of Legislative Counsel]: So the because the the cold water at the boat wash station doesn't count.

[Senator Terry Williams (Vice Chair)]: Right. It's washed. Yeah. It's not a good place to be seen contaminated. Yeah. So there's So

[Senator Seth Bongartz (Member)]: the fear is that the need for the hot water would get Or just site constraints, you know,

[Michael O’Grady, Office of Legislative Counsel]: will a decontamination service have more runoff because of the need for the type of Okay. Treatment. I think that there's some concern about they're they're not a one to one, the advocates would prefer that a boat washing station be separate from the beach and foundation.

[Senator Anne Watson (Chair)]: That makes sense to me to So the idea is to add more specificity on what that means or to just not have it.

[Michael O’Grady, Office of Legislative Counsel]: Or just straighten that phrase unless approved by me, provides information services. Yeah.

[Senator Anne Watson (Chair)]: I agree that like either we need to provide guidance about what a decontamination station consists of or, or to force strike that language. It's, The thing is like, you wash your boat? So I guess if you had a decontamination station, could you wash your boat at that location? Probably, but this is really going the other direction.

[Michael O’Grady, Office of Legislative Counsel]: And I do think that there are probably some washing stations, inspection stations that currently could be a decontamination service or could be retrofitted or outfitted to be decontamination. But do you want the assumption to be the washing stations will become decontamination stations? Think that's part of the anxiety about this.

[Senator Anne Watson (Chair)]: For simplicity, I'm happy to strike it, the unless approved language, but thoughts from promoters.

[Chris D’Elia, President, Vermont Bankers Association]: I like this. You like

[Senator Anne Watson (Chair)]: this language? Like, unless it's approved?

[Senator Seth Bongartz (Member)]: Yes, we have a million quantity that you've identified and then it's that it may not make sense 80% if not to 20% of the time. Might make sense to have a. Mhmm. Issues make clear that the contamination station is set red.

[Michael O’Grady, Office of Legislative Counsel]: You need hot water? You need, like, you need drainage? Absolutely. You need certain to say just to control runoff control and things like that.

[Senator Seth Bongartz (Member)]: Probably not gonna be able to go launch. Are we going to simply say I mean, could we really just say that the section of decontamination station must be certified by

[Senator Ruth Hardy (Member)]: Yeah. Do we need a definition of decontaminated Yeah. On

[Senator Seth Bongartz (Member)]: Is it just a definition and not even a saber? Is there something?

[Chris D’Elia, President, Vermont Bankers Association]: Okay.

[Senator Terry Williams (Vice Chair)]: And you said that you said that your designated agency for the greeters didn't want A and R to be able to often turn their sites into a decon station, Who are we talking about specifically? Does it sound like you got a turf bottle?

[Michael O’Grady, Office of Legislative Counsel]: I received a draft of markup from advocates, water quality advocates, lake advocates, and that's what they were looking to do to not allow ANR to approve a washing station as a decontamination service.

[Senator Terry Williams (Vice Chair)]: For what the intended purpose or what the there's no memory of the others. So

[Michael O’Grady, Office of Legislative Counsel]: But if you added a definition of decontamination services, some of the criteria that you can pause in some bottled water, the ability of drinking at the door, control runoff, sufficient space for treatment, then I think you could turn this language into boat washing station shall not be used as a decontamination service unless it meets the criteria for the MacDean contamination service and it's approved by the secretary for that purpose.

[Senator Anne Watson (Chair)]: I like that.

[Senator Seth Bongartz (Member)]: And it does not interfere with the use of the current bookmark. So

[Senator Terry Williams (Vice Chair)]: who would be the first agency ANR or DFC?

[Michael O’Grady, Office of Legislative Counsel]: ANR, I consider the boat washing and the decontamination to be part of the abiotic nuisance chapter, and that's authority that DEC has authority over.

[Senator Terry Williams (Vice Chair)]: Who would be the agency responsible for defining a decontamination station while waiting. Well, it

[Senator Anne Watson (Chair)]: sounds like we would be doing Yeah. So if Well, we especially based on the the criteria you just mentioned, there'll be feels like at least a good place to start. Right.

[Chris D’Elia, President, Vermont Bankers Association]: Yeah. Yes.

[Michael O’Grady, Office of Legislative Counsel]: You are the supreme policy maker. I know.

[Senator Anne Watson (Chair)]: The

[Senator Terry Williams (Vice Chair)]: biologist know what temperature you have to have with water that we don't really know about. No.

[Michael O’Grady, Office of Legislative Counsel]: They can cut it out. But remember, EDC still approves. EDC still approves that it needs to correct the error.

[Senator Anne Watson (Chair)]: Okay. Thank you for that discussion. Okay.

[Michael O’Grady, Office of Legislative Counsel]: You can skip to page six. And sections five and section six relate to registering your voter vote as a vehicle. And so the first section that's being amended, page six, line three, is the definition sections underneath the chapter, sub chapter, and law related to the vessel registration. And what is being added is on page seven, the definition of a weight boat, motor boat that has one or more valves, tanks, valence bags, and other devices or design features used to increase the size of the motor boats.

[Senator Anne Watson (Chair)]: Can we go back real quick to page six, slide five, unless the context clearly requires a different meaning? It's just interesting that that's being struck.

[Michael O’Grady, Office of Legislative Counsel]: So this is old language.

[Senator Anne Watson (Chair)]: Okay.

[Michael O’Grady, Office of Legislative Counsel]: Under our new drafting manual, we use that language, and when we come across it, we're supposed to cross it out and even if I don't want to cross it out because I think it's going to create a question, the editors will cross

[Chris D’Elia, President, Vermont Bankers Association]: it out.

[Senator Ruth Hardy (Member)]: Okay. So

[Michael O’Grady, Office of Legislative Counsel]: I I don't get to avoid that one. Okay. I try.

[Senator Anne Watson (Chair)]: All right. Thank you. I figured it was something like that, but just wanted to confirm. Sorry, thanks for hearing me.

[Michael O’Grady, Office of Legislative Counsel]: So you have that definition of wake up that's consistent with definition of the use of water. And you come to page seven, line 12, section six. This is that section for vessel registration. You will first see page seven, line 18, it's annually or biannually. And then on page I also want to point out page eight, line twenty and twenty one that the registration certificate is pocket size and shall be available at all times for inspection on the motorboat for which it's issued. So if wake vote is added to this form and you identify yourself as a WakeVote, you're gonna have a pocket sized registration that you're supposed to have available with you all the time. So then moving on from there, bottom of page nine, line 19, this is the directive that application forms that the Commissioner of Motor Vehicles provides for registration of vessels shall include a checkbox for an owner to designate a motorboat as a waiter. If the owner designates a motorboat, a waiter, the owners have designated a homemade public main quote on the application form. Now I stop there, you're going to ask well will DMV be able to do that? DMV said they'd be able to do that and I thought when I read the email that they just said they could put the checkbox on here, but no they say that they can put your home link destination on the registration form as well. And remember, you get something that you're supposed to carry around with you that says what's your home link, that says you're registered, so you'll be identified as a wake vote and you will have a wake vote designation on that registration.

[Senator Ruth Hardy (Member)]: Amazing.

[Michael O’Grady, Office of Legislative Counsel]: A D and E said they can do it, they need until twenty eighth to do it. But

[Senator Anne Watson (Chair)]: Still, that's The fact that they can do it, I think, is phenomenal.

[Michael O’Grady, Office of Legislative Counsel]: Well, is the question that I heard Kevin Burke say, how do you get that information to DEC if they're going to enforce the aquatic nuisance requirements and the decontamination requirements? I think you might have answered it that they either need to show proof on their registration that they are in their home lake, or they have to show proof of decontamination, which you already have, by the way, in your reentry and transfer between lakes that have to show through decontamination. So I think there should be an annual report from DMV to DEC so that they know how many wake votes there are and where there are late vote, what their home wakes are. But I think Kevin's concern about Ruth is they either have to show that they are registered in their home link or they show that they have proof of decontamination from an agency in earnest, which you already have in the bill.

[Senator Ruth Hardy (Member)]: Can you say that

[Senator Anne Watson (Chair)]: one more time? All right.

[Michael O’Grady, Office of Legislative Counsel]: So there's two components. There's standard's ability to enforce the decontamination. The one way they enforce it is you show that you are in your home lake and operating in your home lake. And that's on your registration. The other is if you're entering or reentering your home lake or going to another lake, you show proof of decontamination of your way quote at an agency approved decontamination service. And then for ANR or DEC to get the information that it needs to inform its use of water rules or any other regulation, DMV annually sends the number of vessels registered as raincoats and the home lakes that are designated for those three fields.

[Senator Ruth Hardy (Member)]: Questions? Yes. Sir,

[Senator Terry Williams (Vice Chair)]: did he say that the home lakes were not before impact?

[Senator Anne Watson (Chair)]: In their proposed rule. Right.

[Senator Ruth Hardy (Member)]: It says in here. Yep.

[Michael O’Grady, Office of Legislative Counsel]: And your statute, any statute, supersedes a rule that conflicts with statute.

[Senator Anne Watson (Chair)]: Great. Good.

[Michael O’Grady, Office of Legislative Counsel]: I will I have to make some changes to this language based on if you want me to make questions. It's basically about submitting, having the resignation as proof of your own leg, and then the DMV sending EEC. Yes.

[Senator Ruth Hardy (Member)]: So I think that's that's a useful step. Yeah.

[Michael O’Grady, Office of Legislative Counsel]: All right, moving away from rainbows. Yes, go ahead. Michael, how does this intersect with out of state rainboat owners that are traveling under. I think that's probably going to be the hardest part of enforcement for the decontamination because if you can't show your resignation, your Only. Your registration as your own way up, you're gonna have to show your group of decontamination. Okay. And that that will be that might be tense because the the language in here gives the readers the ability to say to a person entering that they need to show proof of decontamination. But as has happened in the past, there are sometimes confrontations between the reader and the vessel owner or operator. They don't always agree. The bill says that the inspection station readers are not law enforcement, and I think that needs to be clear that they're not law enforcement. But they are given the authority to announce that a vessel owner needs to decontaminate their, needs to inspect, needs to dump their ballast, needs to etcetera. They have that ability. You Okay.

[Senator Seth Bongartz (Member)]: Go ahead. I was about to ask a similar question, which is, is there anything we can do to make clear to somebody thinking, contemplating coming to the month for a week with their vote that it must they must with it with it or get your with the. I I I understand the fact that we don't require it, but my guess is many of the sudden don't know it. And so what can we do? So what can we do? I guess, what owner typically go on from our website to go get whether what the pharmacy might be or I mean, actually, because this is this is a major mission. It's the out of state. Well, we're coming in. We both come in and vacating everything we're doing with our own internally. And just thinking about how do we really make clear to people plus we can dominate.

[Michael O’Grady, Office of Legislative Counsel]: I you know, there there's a a level of reliance you're just gonna have to provide to civil contract people trying to learn the law and try to comply with the law. I mean, I go back to did it though and Rutland's not, there's there were there's tons of out of state anglers that come in to to to raid the streams. And as as I said, I I had just bought the old waders at times. Yes. And,

[Senator Seth Bongartz (Member)]: you know, it's like, what what those notices? How can we make sure they really does because required? Because it's harder to imply if you're growing, but you don't really know

[Michael O’Grady, Office of Legislative Counsel]: what you're supposed to. Right. I mean, there's there's the ways that that that typically this kind of thing would be done is the education and outreach. Right? Media campaigns, skips, signage, You know? That that type of thing. Like, a signage at an access area. That's what one thing I was thinking about. I I had to go look at the new federal rules on access areas that are some limitations on signage, but I don't think it should be limited, but I need.

[Senator Anne Watson (Chair)]: That's where my head went with signage, but if there's, you know, but I know Senator Williams had a comment and then

[Ellen Czajkowski, Office of Legislative Counsel]: the votes in the hearing.

[Senator Terry Williams (Vice Chair)]: I'm just thinking that goes back to the definition. Some states may already have the intent of the state, stations that would be out of those. They are doing proof. We need to decide what we need to tell them we have to do to vote on the budget.

[Senator Ruth Hardy (Member)]: There's some things. It seems like also

[Ellen Czajkowski, Office of Legislative Counsel]: for a lot of people, maybe not everybody,

[Senator Ruth Hardy (Member)]: that they would be looking at, if they're coming to Vermont, do they need to buy a fishing license? Do they need to rent a cabin at a state park or whatever? So using our websites too, I mean, I'm just looking at the Department of Fish and Wildlife website, there's a thing about buying a license,

[Senator Seth Bongartz (Member)]: you know?

[Senator Ruth Hardy (Member)]: And so maybe it's also requiring, and there's also a Vermont tourism website and things like that, so just requiring generally that relevant websites have information about it.

[Michael O’Grady, Office of Legislative Counsel]: There's also a continuing issue, rules in the guidance document that's issued with that, but it's it's very instructive, and it's very it's very readable and and open to people.

[Senator Seth Bongartz (Member)]: So have a c g. I

[Michael O’Grady, Office of Legislative Counsel]: would say you wouldn't have a d c DEC duty, you have the secretary, which she has authority over all of them. And you would say something like to inform all users of state waters, including those accessing waters to the state access areas of the requirement to decontaminate a wake load prior to transfer to the water that the secretary creates signage for posting on state access areas to amend the agency website appropriate places to provide notice. Three, amend the Fish and Wildlife handbook. I I can't remember its exact name. That's what I call it. Handbook to inform those persons to to provide information that's in the handbook or go beneath the deep about my. And then whatever else you So

[Chris D’Elia, President, Vermont Bankers Association]: Mhmm. A job.

[Senator Terry Williams (Vice Chair)]: National Association of Legislative Sportsman Caucuses. They do an annual bulletin, many changes in all different states. And we have the Sportsman Caucus. Surgery. So we need to put that note, make sure that because it's something that

[Senator Ruth Hardy (Member)]: Are you thinking that we need blood work too?

[Senator Terry Williams (Vice Chair)]: Okay. Great.

[Chris D’Elia, President, Vermont Bankers Association]: Okay. Okay.

[Michael O’Grady, Office of Legislative Counsel]: So moving on into the access areas language. The chair directed me to meet with the department to see if there was any way to come to some sort of consensus on the use of access areas by inspection stations. And you will see on page 12, line four and five, this would basically, the concept here is instead of inspection stations being an always authorized use of an access area, unless they interfere with another use, that the access, the inspection station needs to be permitted by the commissioner in order to use that access area as an inspection station. So the commissioner will be able to make determinations about whether or not the size of the access area is appropriate, whether or not the environmental site conditions are appropriate. So effectively, there would be a permit for the use of the access area. And the commissioner could establish conditions in that permit for use of the access area and would still require if there was interference with the authorized use of the access area that the inspection station would need to relocate or or stop working until the interference was resolved. I I think this is is consistent with the federal rule. I think whether or not you want to permit an inspection station is something that you, the general assembly, state general assembly can require. And whether or not you make it a a use that and add an access area But you will have those concerns that the department issued about physical control, lack of site conditions, etcetera. It's not gonna make everybody happy. Just so you know that so there will be access areas where people want an inspection station and commissioner's gonna say no. Just

[Senator Ruth Hardy (Member)]: Yes, sir.

[Senator Seth Bongartz (Member)]: Well, what we want, I think, is for stations within. I understand that conflict with the federal. So, we have to grow that for the last thing that what what the stations were more places in the future and we wanted to want the contamination to take priority of the parking. So I understand the issue of the federal rules. Don't understand it, but I know it's there. So but so I I sort of, like, maybe permitted, but I already part of the the.

[Michael O’Grady, Office of Legislative Counsel]: So I I think parking is the issue that creates the most conflict at access areas, but I think you heard from the department that it's not always parking, it's not always the size of the access area, it could be the site conditions. So the one that seems to be the tension here is Joe's Pond and how DEC doesn't want to allow the inspection station because of the runoff into the and the Department of Fish and Wildlife doesn't wanna allow it because of size. How how do you say that they have a priority on that? Yeah. I don't know. And,

[Senator Seth Bongartz (Member)]: you know, actually, we don't want.

[Chris D’Elia, President, Vermont Bankers Association]: We Yeah.

[Senator Seth Bongartz (Member)]: To wetlands or, you know, back to

[Chris D’Elia, President, Vermont Bankers Association]: the

[Senator Seth Bongartz (Member)]: water. So does we're gonna ahead. That would be good.

[Chris D’Elia, President, Vermont Bankers Association]: Very good.

[Senator Terry Williams (Vice Chair)]: Yes. And

[Senator Seth Bongartz (Member)]: he had a couple of blanket recommendations. I don't know if you recall that, Michael, if you're in the room, but I'm just wondering if they're are

[Michael O’Grady, Office of Legislative Counsel]: they incorporated into this in any way? I don't I don't think I ever saw his direct edits.

[Senator Ruth Hardy (Member)]: Was his about the access areas?

[Michael O’Grady, Office of Legislative Counsel]: That that's Yeah. It's specific to access areas and parking versus booking. Doesn't need to be I did see some recommendations to move inspection stations all the way to the top of as the priority use underneath the access area rules. And I I think that would be conflict under the federal rule because we're supposed to use the access areas for their authorized use in their grants, and none of their grants have specific authority for inspection stations. It's just that the rule is broad enough to allow inspection stations, but they're not that in a lot of these. And remember, these grants have been been awarded because some of them of the initial grants are are are 50 years old and five over. But concept inspection stations probably not common. And so you're not going to see a lot of the over access areas with authorized uses that specific, say, inspection station. So that will mean that the the fishing and hunting and motorboat use will always be potentially the priority.

[Senator Anne Watson (Chair)]: Yes, ma'am.

[Senator Ruth Hardy (Member)]: I'm on page 12. It's not about the stuff, but I'm I don't remember such the paragraph three a and b. What does this mean?

[Michael O’Grady, Office of Legislative Counsel]: So there's already a provision in law

[Senator Ruth Hardy (Member)]: Yeah.

[Michael O’Grady, Office of Legislative Counsel]: That says when you are needing a water that you need to drain your vessel except for your live bait.

[Senator Ruth Hardy (Member)]: Yeah.

[Michael O’Grady, Office of Legislative Counsel]: And you need to inspect it for a product nuisance species. And so this is just referencing that.

[Senator Ruth Hardy (Member)]: The section paragraph three?

[Michael O’Grady, Office of Legislative Counsel]: Yeah. So so this section and the rules adopted under the use of the access area should not be construed to mean that a conflict exists between a product nuisance inspection station at a higher priority use when an operator of the station informs the user that they have to decontaminate their repo or inspect the vessel for aquatic nuisance cases.

[Senator Ruth Hardy (Member)]: Okay, I think I don't understand, shall not be construed to mean a conflict exists. Is that a concept in the

[Michael O’Grady, Office of Legislative Counsel]: It's a con it's a concept underneath the states' access area.

[Senator Ruth Hardy (Member)]: Okay. So if somebody says there's a conflict here, the the higher priority gets the priority if they identify a conflict. So this is saying no conflict exists. Right. You can't say my fishing boat access is a higher priority, so I'm not gonna drain it.

[Michael O’Grady, Office of Legislative Counsel]: I don't think we were in the room earlier when I referenced that there has been tension before between readers and and users of access area.

[Senator Ruth Hardy (Member)]: Yeah. I know. That's come up a couple times, actually.

[Michael O’Grady, Office of Legislative Counsel]: When a reader says, hey. You you can't be using this water because, hey. You did a decontaminate or you didn't do your inspection. I could envision certain users calling the board and saying the inspection station is conflicting with my priority.

[Senator Ruth Hardy (Member)]: Right. Okay. That I understand it now. I just did that that phrase, there shall be no conflict with priority. You said I didn't quite understand all that. Okay. Yeah. I mean, I'm concerned about that conflict too, and I brought it up, there was a witness we had that was like, oh, greeters can just enforce this. And I was like, wait, no, no, they're not law enforcement.

[Michael O’Grady, Office of Legislative Counsel]: Not law enforcement. They're authorized in this bill and elsewhere to say, to notify people, but that's where their guardian has. They're if somebody is going to disregard that notification and enter the lake or exit the lake without drainage, it's not the greener's responsibility to enforce They should notify a warden. These are DMV offenses. You can know you can call the state trooper or your local law enforcement. They should have authority to enforce that. They don't. They won't show it. The warden's will, but they would it might take time for the warden to get there.

[Chris D’Elia, President, Vermont Bankers Association]: Yeah. Okay.

[Senator Anne Watson (Chair)]: I just wanna also recognize that it's it's 11:30. We have other folks wondering about if we can put a pin in this Sure. And come back and finish the walk through on this another time.

[Senator Ruth Hardy (Member)]: I know there's not a lot left.

[Michael O’Grady, Office of Legislative Counsel]: No. There isn't, but I just wanna I'm gonna get an outreach and education program that the agency and outdoor resources is gonna do through way both the foundation. I'm gonna meet the weight code registration proof of your ability to operate your weight code in compliance Mhmm. Before you show your decontamination. And then annually DMV sends to DEC the information on weight loads and home and like home late designation.

[Senator Anne Watson (Chair)]: Amazing. Oh, couple comments. Senator Williams and then Senator

[Senator Terry Williams (Vice Chair)]: Collins. I'm going to offer, do I need to give a definition for a meeting examination statement?

[Michael O’Grady, Office of Legislative Counsel]: Oh, yes. It needs to go Oh, yes.

[Senator Ruth Hardy (Member)]: Definition. Yes. Thank you. Yes.

[Senator Anne Watson (Chair)]: Then so

[Senator Seth Bongartz (Member)]: Quickly, we also when we're doing that, it's okay

[Michael O’Grady, Office of Legislative Counsel]: to put the all the mechanisms that we're

[Senator Seth Bongartz (Member)]: gonna the secretary is gonna use, we should also include the obvious switch lakes they can and can't go to. Great.

[Senator Ruth Hardy (Member)]: Okay. Any other questions at this point?

[Senator Anne Watson (Chair)]: So we'll continue with that walkthrough later on. All Thank you so much. Okay, all right. So we are moving to a talk. We haven't talked about recently, that's two forty seven about plastics. So we're going to start with, welcome. Would you like to start If possible, Flora could help. That is perfectly fine. We can start with Ms. Gillian, who is speaking to, I believe, the DHP part of this. So just to refresh our memories, there's three sections to this bill. The part that I am especially interested in talking about this morning would prohibit a certain kind of plastic DHP in, for example, medical IV bags and other medical type products. So just focusing in on that part of it for now. So Ms. Gillian with the Breast Cancer Prevention Partnership, welcome.

[Laura Gillen, Senior Program & Policy Manager, Breast Cancer Prevention Partners]: Thank you so much. Good morning all. I'm Chair Watson and members of the committee. My name is Laura Gillen, and I'm the Senior Program and Policy Manager for Breast Cancer Prevention Partners. And I'm here to testify in strong support of S247. As a former toxicologist and a mother of two children, I applaud this common sense legislation. It is a vital step towards phasing out DEHP in medical devices and addressing the broader crisis of plastic toxicity in our consumer products and waste streams. S247 ensures that medical devices do not expose patients to DEHP, an extremely toxic phthalate used to soften PVC plastic. Because DEHP is not chemically bonded to the plastic, it leaps directly into the fluids, nutrition, and air are being delivered to a patient's body. As a toxicologist, I want to emphasize that DEHP is a known endocrine disrupting compound. It is linked to breast, liver, and lung cancers, as well as reproductive harm. Perhaps most concerning for our work at BCPP is that laboratory studies show DEHP can actually promote breast cancer cell growth and reduce the effectiveness of chemotherapy. These devices can undermine the very treatments they are intended to deliver. Most people would agree it simply does not make sense for a medical device to contain a chemical that interferes with the healing of patients. We understand there may be requests from trade associations to limit the bill strictly to intravenous tubing. However, I must urge the committee to maintain the current language that also covers enteral or feeding and respiratory tubing. Topic exposure does not stop at the vein. Peer reviewed research from as recently as 2024 and 2025 confirms that in respiratory therapy air is often heated and humidified and this heat causes BEHP to volatize and hitch a ride on water droplets directly into the lungs. Studies have found that used energy refill tubes contain significantly less DEHP after use than before, meaning that the chemical is leaching out of the tubing directly into the patient. EHP is highly fat soluble. The lipid rich formula is used in feeding tubes act like a magnet pulling out of the plastic walls. To exempt these devices would be to leave out our most vulnerable patients, including infants in the NICU, unprotected during their most critical stages of development. Vermont is not alone in this effort. BCBV sponsored California's AB 2,300, the first state law of its kind enacted in October 2024. North Carolina followed six months later and similar bills are moving in Washington and being introduced in New York and Michigan. This flurry of activity reflects a deep medical consensus. For over twenty years, major agencies and medical associations have encouraged healthcare providers to consider safer alternatives. In 2002, The US Department Of Health And Human Services highlighted the risk of DHP and medical devices, and the California EPA has classified DHP as a Proposition 65 reproductive toxican. Major organizations, including the American Medical Association and the American Academy of Pediatrics have urged hospitals to reduce and phase out DHP containing PBC. This is especially urgent given that FDA approved safer alternatives have existed on the market for over four decades. Beyond the hospital bedside, 47 addresses the health risks of plastics at both the beginning and end of their life. By expanding the ban on plastic microbeads to include cleaning products and non rinse off items like sunscreen, Vermont is closing a loophole that allows trillions of microplastics to enter our bodies, water streams and our food chain. And section one of this bill is a critical safeguard so called chemical recycling or pyrolysis is a high heat, high emission process. From a public health perspective, these facilities often release the very carcinogens we are trying to remove from consumer products back into the air of surrounding communities. So this is a good bill that could be further strengthened by banning PVC in addition to DHP and medical solution containers in Vermont to protect communities from this poison plastic, which is toxic at every stage of its life cycle. However, as written, it's a massive step forward for public health. So on behalf of BCDP, I urge you to support this important legislation. I respectfully ask for your yes vote on ask two forty seven. Thank you for your time and for the opportunity to testify today. I'm happy to answer any questions you may have.

[Senator Anne Watson (Chair)]: Thank you. Any questions? All right. Super. Well, thank you so much. I appreciate that. And if you have a written testimony, you can send that to our priests. And all right, so we're going to move from there. So should we go to Ms. Jones from Beaver? Welcome. Thank you.

[Ellen Czajkowski, Office of Legislative Counsel]: Hello, I'm Sherwood Watson and residents of the community. This is actually my first time testifying, so thank you for the opportunity to introduce myself. For the record, my name is Alexis Drown. I am an environmental associate at the Vermont Public Interest Research Group. There I work on a number of waste issues, especially those regarding plastic and risk consequences.

[Alexis Drown, Environmental Associate, VPIRG]: I think even in divided times, most people generally agree that there is way too much plastic in spite of these single use plastic waste. This is an issue that really resonates with Vermonters. We see that reflected in the laws that have all been passed out of this legislature. For example, Act 69, some people call it the plastic bag ban. It was also the country's most comprehensive single use plastics ban at the time. Just one of the benefits of that law, we estimate it's eliminated at least eight sixty four million bags since gate passed. We live in a state where people really value the natural beauty of our environment. As a lifelong Vermonter, I grew up in Milton, Vermont. I grew up around compost bins and community gardens, and other childhood dialogue about my carbon. I truly believe that the battle against plastic pollution hits on our port values here. Just to put that problem into perspective, over four fifty million tons of plastic are produced globally every year, and less than 10% of that is typically recycled worldwide. That's a lot of plastic, but not as many people know how much of it is now the plastic is choking our environment, and people often don't

[Senator Ruth Hardy (Member)]: know how toxic much of that is.

[Alexis Drown, Environmental Associate, VPIRG]: The fact is that plastic isn't naturally biodegrading. It's just breaking up over time into smaller and smaller pieces. Toxic plastic chemicals and those little bits of plastic called microplastics then get into our water, our air, our ecosystems, eventually into our bodies. So the science right now is making us aware that plastic's no longer just the litter issue we once thought it was. It's a lot bigger than that. And Vermont's not immune to any of that. Plastic is everywhere. While Vermont has made progress in a lot of ways, chemicals that have been linked to reproductive and developmental harm, neurodegenerative conditions, cardiovascular problems, even increased risk for certain cancers. Those chemicals exist in the plastic that we're all using every single day. It's also microplastics in Lake Champlain, our consumer products. They're in, like Laura said, they're in our air. This is really, really scary stuff. But as I've noted, Vermont is a place where we've already begun to take action. I think right now it's time to take another really step. So that brings me to S-two 47. I think this bill truly navigates the moment that we're in right now. Administrative agencies have limited capacity. The funding is difficult. Common ground can feel really put to fight, and the strength of SB-two 47 is that it doesn't create major administrative burden. It's not really expensive to implement. Each provision represents a tangible step forward for a problem that we're all seeing every single day. What the bill does ask for is a small amount of additional accountability from producers, because they know their products the best, they have the most control over how it's marketed and over what's in them. For many of the questions before you, we can look to other states and the conversations and compromises that have already occurred, and we can see that new steps are taken. S-two 47 does not require Vermont to fight an insurmountable battle right now, because there are modest steps and there are steps that we can take. So to dive more into the specific provisions, there are three provisions in this bill. The first is on chemical recycling. Chemical recycling, as we know it today, simply doesn't work. The data is telling us that when these facilities chemically convert plastic with these heating or burning technologies, the main output that we are seeing is fuel. So many of these technologies are very similar to consideration. It's just under a different name. And that's important to know because the facilities built to chemically recycle plastic are also incredibly expensive. They rely on a lot of public subsidies, and by every standard that we have, they are horrible for the environment and that help those surrounding communities. In Vermont, we've historically said no when we see things that are bad for the people and bad for the environment. Even if our state isn't the main target for a facility like this, I think it's worthwhile to make clear that this law technology isn't right for Vermont. And Vermont's already taken similar action with things like fracking and trash incineration. This legislation would protect Vermonters by recognizing chemical recycling for what it actually is, which is dangerous, deceptive, and ultimately really ineffective. The second prevention, which you all just heard about from Laura, is DEHP in medical devices. Like she said, this is a phthalate, it's used to make PVC more flexible. It's also incredibly toxic. And since it's an unstable chemical, that means it is leaching into the environment and is leaching into patients. I think there are good reasons why DEHP should not be used in medical devices. First of course, it's just the threat itself to human health. That's why other states have already taken action. California and North Carolina test very similar laws. Major manufacturers already produce DEHP and PVC free alternatives for all IV bags and for certain medical tubes. So that means that the manufacturing capacity right now has already expanded significantly. There are also multiple companies that are willing to testify in support of this bill because this change is imperative for people's health, our environment, and it can be cost effective as well. However, without a reason to shift that market in our region of the country, do we really want to assume that it'll just come? So this provision ensures that Vermont is not left behind in an important market shift that prioritizes public health. The third provision addresses microplastics. Microplastics, some of you might already know, really are everywhere. Seems to be a new headline every single day. And we know that they're harmful. Microplastics cross party lines. I think a few people have got their problem right now, even the federal government. Question is, what can we do right this second? So the bill in front of you has a modest expansion of an existing federal law by banning microbeads for non rinse off personal care products and So microbeads are commonly understood to be a specific subset of microplastics, until they're defined federally that are intentionally added to products to provide abrasive or exfoliating properties. There's also already viable and affordable alternatives. We saw California make significant progress in addressing the issue issue of microplastics through a recent bill called AB eight twenty three. That bill was passed in 2024, and while it ultimately did not become law, advocates and legislators engaged in really extensive conversations with the industry. May largely reach a compromise that would regulate this specific subset of microplastics in these products. So it's important to note that the scope of this legislation, as it appears in the bill before you, was generally accepted by various stakeholders, given the health concerns associated with microplastics. Broader regulation will obviously always be really important to consider, but this represents something really tangible and a useful step forward

[Senator Ruth Hardy (Member)]: that we can do right now.

[Alexis Drown, Environmental Associate, VPIRG]: So in closing, this bill, S-two 47, is about providing those tangible solutions to the very real problem of plastic pollution. And it does not and cannot solve every single aspect of the problem, but it is meaningful and worth while and I'd be strongly urge you to support it. So thank you for your time and for considering S-two 47. With that, I'm happy to answer any questions.

[Senator Ruth Hardy (Member)]: Any questions at this point? Anybody has some questions?

[Senator Anne Watson (Chair)]: Well, thank you so much. Okay. And I think that

[Senator Ruth Hardy (Member)]: is it for the day. So if there's no

[Ellen Czajkowski, Office of Legislative Counsel]: other questions or comments, anything, both from saying just generally or anything you've heard so far?

[Senator Anne Watson (Chair)]: On this, seven or two on mute?

[Senator Seth Bongartz (Member)]: Mean, I you hear from businesses and industries, they say, yeah, think

[Michael O’Grady, Office of Legislative Counsel]: the hospital is great.

[Senator Seth Bongartz (Member)]: We make sure that we don't make

[Senator Ruth Hardy (Member)]: their lives more expensive. Yeah, it's a fair enough. Yep.