Vermont Legislature SmartTranscripts:

[Senator Anne Watson (Chair)]: Okay, we're good? Looks like we're Okay, good morning. This is Center of Natural Resources and Energy, and it is Wednesday, March 25. Oh my goodness. Make sure you're really good. Okay, and so we are starting the morning with our legislative council because we have We know that there's likely multiple amendments to S-three 25, which is on the floor today, and we're going to talk at least about one of these amendments, we would love to understand it. I'm pausing right now because I'm thinking about why you're here, because I just got sent to another one, do we talk about that one too? Let's just take it one of them. Let's go to this amendment that came from Senator. I'll take out the applicant's legislative council.

[Ellen (Legislative Counsel)]: So you heard from Senator Hackman yesterday? Yes. So this is, the amendment is draft 2.1. It was posted yesterday and today. It's dated 03/18, which feels like a long time ago. I agree. So it only does two things. First, if you're looking at the draft that your committee voted out, was draft 6.1, if you have that, you can look back. Otherwise, section one, all it does is change the date from 2028 to 2029. In the tier three, you will make a section. So it pushes out when Caledonia needs to file the tier three rules with LCAR. Your version has 2028, pushing out to 2029. Okay. Do have a second? And the second system amendment is then amending section seven, which is the effective date. And so it's amending the effective date for tier three. You're going to have it again, 06/30/2028, which is before turning it out to 01/01/2030. So in my notes on this section in a previous draft, I've written down that this section was the jurisdictional trigger for tier two and tier three, but maybe I'm wrong about that. Yes. Is there a jurisdictional trigger for tier two? No. Okay. So it's just the jurisdictional trigger for tier three, or is it Tier two and tier three are at the of each section. Okay. Section seven is effectively the implementation starting point for tier three. Section seven in your bill does multiple things. The amendment here is only pushing out the date for tier three. Okay. Okay. Thank you.

[Senator Anne Watson (Chair)]: Just to chat about this briefly, we would, I would love to get a shot on this, thoughts that folks have. I'll just start by saying, I don't think this is necessary. I think the longer we wait for two, three, the longer we jeopardize critical natural resources, or not to do it. Other thoughts?

[Senator Scott Beck (Clerk)]: I'm not even sure Senator Hepburn and his father was. Okay. Okay, okay. Well, okay, yes. So, LORD did ask us for more time. They did.

[Senator Anne Watson (Chair)]: And because of math and stuff. And their recommendation, we actually have, I was looking at this last night actually. Our recommendation is actually six months after their recommendation.

[Unidentified Senator (committee member)]: So 2027, maybe? '28. '28. Yeah. So it's, like, June 28. The recommendation was January 1.

[Unidentified Senator (committee member)]: We did that because we really thought through the rule making.

[Unidentified Senator (committee member)]: Yeah. We gave an extra plus. Also, you for reminding us of that, because that's

[Senator Anne Watson (Chair)]: what I thought. Was like, I think that we can push it

[Unidentified Senator (committee member)]: out further than what Observe asked for. Yes.

[Senator Anne Watson (Chair)]: I mean, my concern about pushing the tier three out is that it's just gonna continue to confuse people. And so having it,

[Unidentified Senator (committee member)]: having the rules done, then people will know what they're talking about, and it will be easier for people to understand and

[Senator Anne Watson (Chair)]: plan, or just be okay.

[Unidentified Senator (committee member)]: So one possibility is that, so

[Senator Anne Watson (Chair)]: in light of what you're saying, Senator Beck, it's not for that Senator Hepburn is even going to offer this.

[Michael O’Grady (Legislative Counsel)]: Or even intended to offer.

[Senator Anne Watson (Chair)]: Sure. So one possibility is, because I think there's going to be more amendments. Anytime in Great. Well, we are going to be debating an amendment, likely call it recess so that we can chat together. It actually, I'm not sure that it makes sense to take a struggle on this right now, especially if we

[Unidentified Senator (committee member)]: don't know. Yeah. If this is going to be offered,

[Senator Anne Watson (Chair)]: and just know that that would be a part of the process on the floor should any other amendments come up. I did get an email from Senator Benson about another amendment. Though he is not here, I'm hesitant to just try to pivot to do that on fly right now. And we have other Thank

[Senator Scott Beck (Clerk)]: you. Well,

[Unidentified Senator (committee member)]: let's see where we're gonna

[Senator Anne Watson (Chair)]: much time do you think it will take to talk through this and then the medicines and the Yeah. I mean, it's a little

[Unidentified Senator (committee member)]: bit longer than this one, but not much longer.

[Senator Anne Watson (Chair)]: Is it on our website now? No, I just got it. Oh, but do have it. Gina, I just, don't have it. It's only plus on the page. Oh, so,

[Unidentified Senator (committee member)]: yes. Okay.

[Senator Anne Watson (Chair)]: Well, so my thought was that, just so folks know, we're going to be talking about a wholly different topic shortly, which might be nice to get our brains doing something else. We're going to be committing to a bill that I'm anticipating is coming to this committee, and we're going start that with Representative Sheldon to introduce it and she's not here. She's on her way. Okay. Senator Will. If we can get Senator Bennington in here and we need to come to all.

[Unidentified Senator (committee member)]: Do you want me to talk through it?

[Ellen (Legislative Counsel)]: Yes, let's, no, let's have, let's, it would be nice to know, if you can tell us what it does, then we can ask him about the rationale. Sure, so, Ben's and I went to drop 1.1 dated last night, threetwenty four. It's making three changes to the same area of law. It's in your section four, which is the income housing exemptions. And so it's amending first, D in 6081 is the interim housing exemptions. So in the first instance of amendment, it is striking out the requirement that they, two A, that there be requirement for them to have permanent zoning and subdivision bylaws. Oh, sorry. Let me take that as a minute. Hold on. Sorry, that's not what this is doing. This is striking about the requirement that the construction of 50 or fewer units, which are exempt under this provision, is straightening the requirement that they be on 10 acres or less. Wait, what is this? What is this? I'm sorry. I know, I just said that really poorly. There is an exemption for up to 50 units of housing in either village centers or along transit corridor, and it's for breaking out the requirement that it would be on 10 acres or less. Okay, so it can be on there. Basically the requirement right now is that the desk this would strike, and would it replace it with a need? No, not the first amendment. Okay. The second and third amendments are doing the same thing to each other, not as the first one. It's adding language that for, again, these exemptions for the 50 units of housing, it's striking out the requirement that they have permanent zoning and subdivisions bylaws, And then adding that the language would say it could be within a quarter mile, served by public sewer and water services or soil that are adequate for wastewater disposal, or extending the terminus of the area, served by public sewer and water services beyond the one quarter mile area. So, is this exemption Sorry,

[Unidentified Senator (committee member)]: do you have your bill?

[Ellen (Legislative Counsel)]: I don't have the 6.2. I have to go for that. I'm looking up at 5.2 right now and it's got the same length. Yes. Okay. So there's this exemption for village centers and the area one quarter mile around the village center, if they have permanent zoning, it's under 15 mile miles currently, and adequate wastewater or soils. This is getting rid of the requirement that the village center needs to have zoning. And it's also saying that if the area beyond that onefour mile has sewer and water, the exemption is extended to that as well. It's getting rid of the requirement for zoning and expanding the area with up to 50 units of housing in village centers. If it's getting rid of the requirements for zoning, would F-two 50 apply then if there's no zoning? No, this is an exception. I'm actually Okay, I'm sorry, I'm just trying to understand.

[Unidentified Senator (committee member)]: Well, your exception is a good one because it would mean you don't have to have no regulation.

[Ellen (Legislative Counsel)]: There would be nothing. Yeah. We're extending the terminus of areas that are by water and sewer beyond one quarter mile would I, it's almost like trying to make a sentence. Like it's, it's I would say it's confusing because because it's got to be constructed or maintained, da da da da, located entirely within areas of a designated village center, yada yada, and served by public water and sewer, and then to say, or extending the terminus of the area if beyond one quarter mile area. So that in my mind doesn't place any, As it's saying, it has to be entirely within this area, but then this is going beyond that area. So it's almost like it has no limits. At least that's how I read it. Is that a pin of drug? No, think you stated it accurately. You're already in the statute creating a, you're getting rid of the area because of the village area and a quarter mile around it. And so this is, I guess, attempting to further establish. Oh, we can, how about five minutes? Okay. Thank you. I think I am understanding that, or at least in my mind, I feel like is a conflict there. Let's move on to the third one, then we'll hear from Senator Madsen. This does the same thing for the exemption for the construction of housing within Downhounds. It's getting rid of the requirement to have permanent zoning and subdivisions bylaws for this exemption, and then also adding that same language about extending the terminus of the area served by public sewer water services beyond the area of the downtown development district. And so unlimited exemption for Act two fifty for housing in downtowns, but you do have this requirement in the statute that they have permanent zoning laws. So, sorry, for the second instance of amendment was just for? Village areas. Village areas, yeah, okay. Designated village centers. Okay, sorry. Okay. They have, so village centers, and the third one is for downtowns. Yep. And it's doing the same thing. But in downtown, to be designated as a den, it must have zoning already? No. No. Okay. But the downtown, they only have downtown friendly that doesn't have zoning. Okay. Okay.

[Senator Scott Beck (Clerk)]: Where's that? Westford.

[Ellen (Legislative Counsel)]: Okay. Right. Thank you. Any other questions for Ellen at this point? Okay, great.

[Senator Anne Watson (Chair)]: I have Senator Bennington with us. I would love to hear your rationale. Welcome.

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: Welcome. Well, thank you. So what really spurs this is, of course, we're all trying to deal with the housing issue. And we know some will disagree, but that Act two fifty creates a big hurdle for, to get there. And in my district, there is one community that does not have permanent zoning and subdivision bylaws, that's Scott and Williamstown. And they have a couple of projects they want to move forward. And I talked actually to the chair of their select board last night just to find out where they are and they're about ready to pull the plug on the project because they got a ruling from the District Commission that the project will be subject to Act two fifty. They're talking about 8,000 units in the downtown, has water, has sewer, has all of the amenities, but the cost and the time frame to go through the process is just not making the project viable. So what this is trying to do is take that impediment out of those communities so that they can move forward with housing just the same as a community that does have permanent zoning and subdivision bylaws. I heard the comment, well then there's no rules. Well, that's not true. All of the technical permits still apply. It's still legal water wastewater permit. They still need to deal with storm water erosion control, they still need to get an access permit to come on to either a state highway or a town highway. So there are a number of items that applies. And if we look at Act two fifty, Act two fifty doesn't ask, do you comply with zoning or subdivision bylaws that asks, do you comply with the down plan? And so it's town plan and the town plan looks at those areas in the village centers as well the areas, and we're only talking about housing, we're not talking about commercial development, industrial development, this is housing, something the state really needs. And so, say my amendment has to allow those communities that don't have the permanent zoning and subdivision bylaws to be treated on the same level as the old San Diego. That's basically the

[Unidentified Senator (committee member)]: Well, I want

[Senator Anne Watson (Chair)]: to thank you for bringing this. I love that it's a specific example. I love that you're problem solving for your community. And this is the kind of thing that I would, I would love to like chat more about and, see what we can do. I will just say, I think the way that this is framed, unfortunately doesn't create the kind of boundary that

[Unidentified Senator (committee member)]: I

[Senator Anne Watson (Chair)]: think works for the statute, because it's saying it has to be entirely within this boundary, but then the language is saying it can be outside that boundary. So having said that, if we were to straw poll it, I don't know on a straw poll, but that's not to say that I don't appreciate that problem and would love to think some more about how we can

[Unidentified Senator (committee member)]: find some solutions for

[Senator Anne Watson (Chair)]: the millions to come. And let's, I would invite, like let's talk, let's talk some

[Unidentified Senator (committee member)]: more. Yeah. Yes, and part of

[Unidentified Senator (committee member)]: my process here was to get accounts, get to the meetings, so that's part of it. And that's why I've been sort of planning grants were there, it's all kind of tied together.

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: Unfortunately we can't force them.

[Senator Anne Watson (Chair)]: Yeah, right. Fair enough.

[Unidentified Senator (committee member)]: Right. Yeah.

[Senator Anne Watson (Chair)]: Okay. Thank you so much. I really appreciate it. I'm sorry, I'm just, I don't, I'm

[Unidentified Senator (committee member)]: just confused what's going to happen now.

[Senator Anne Watson (Chair)]: Is this gonna be offered? Because I mean, agree with the chair, it feels like this is a problem we could try to solve, but Prefer we're reading? But maybe if we can get enough information, because also we were just told that only one town doesn't have zoning and that's Westbrook. So that's why I'm thinking Sorry, about sorry. That was downtowns. I'm sorry. Kind of village center. Okay.

[Unidentified Senator (committee member)]: So I guess I

[Senator Anne Watson (Chair)]: would just like to understand the implications one and see if we can figure it out. But I, without understanding it, I don't want to vote for it if I don't understand understand it. It. Will Well, do. And it's the kind of thing too, I think if we were going to change it for all village centers, that would be a big deal. And so that's something that I'm not sure that we would have sufficient time to fully vet by, even by third reading. So are you planning to offer this amendment?

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: That was the plan.

[Michael O’Grady (Legislative Counsel)]: Okay. That's why

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: I wanted to go to so this committee could review it and we could talk about it.

[Senator Anne Watson (Chair)]: Well, appreciate that. Thank you. We could do a straw poll, but it also seems like we're, I think we kind of know where we're at.

[Unidentified Senator (committee member)]: Can I

[Unidentified Senator (committee member)]: ask

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: you I a heard what you're concerned were, or is? If the expansion of the additional area beyond the village center were removed, then we just stayed with within those boundaries and eliminating the requirement for zoning and subdivision bylaws, does that make it more tenable? Because those are the areas that are really designated by those communities where they want the growth to to occur.

[Senator Anne Watson (Chair)]: Let's, let's you and I chat offline and we can, can talk

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: to them.

[Unidentified Senator (committee member)]: Does that sound good? Sure.

[Senator Anne Watson (Chair)]: Okay. Great. And actually I'm inclined to not do the straw poll right now. If you, if you operate, we'll call a recess and we'll do a little straw poll and we'll go

[Unidentified Senator (committee member)]: from there.

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: All right.

[Senator Anne Watson (Chair)]: Okay, Thank you very much. Okay. Because we are going to move on. Thank you. And we have the chair of house environment here with us. Welcome. Cheers. Yes. Oh, thank you. So, we're switching gears. Just a deep breath. Clear out, clear out some of the three twenty five energy.

[Representative Amy Sheldon (Chair, House Environment and Energy)]: Bring in an old school, a different topic, environmental relevance that's here for a revamp that we think includes a significant difference. So, we are calling this bottle of redemption, future responsibility. And it is the bill that's closed at 09:15. Yes. We're at thirty today on the floor, but this bill is going to, actually, I've been working on trying to update the bottle redemption system for a long time. And some of the folks in this room have been there a long way also. You might remember a couple

[Unidentified Senator (committee member)]: of years ago, we tried to do a bit of

[Representative Amy Sheldon (Chair, House Environment and Energy)]: a large scale update all at once kind of thing, and that did not, frankly, governor just wasn't ready to go that far. And I think in this duration, we're doing a really logical step, which is to solve the challenges that are before us with the redemption system, and those current challenges are a lack of profitability for the redemption centers who've managed to stay in business all this time, and also a distribution problem. The great example here for Madam Chair is around town, doesn't have a redemption center. So we have redemption deserts, just in our rural areas, but also in our more populated areas. So the bill seeks to shift the burden of bottle redemption onto manufacturers. Frankly, they've been at the table. Their representative is here and has been incredibly helpful and forthcoming, and the bill represents a great coming together of the Agency of Natural Resources, the environmental organizations, and

[Senator Scott Beck (Clerk)]: the

[Representative Amy Sheldon (Chair, House Environment and Energy)]: manufacturers to set up a PRO, which I'm excited about. So Vermont was one of the first jurisdictions in maybe the world to have a bottle redemption system. I'm sure you're all familiar with it, but there's biocincentive deposit, this does not change biocincentive deposit. And it's on classic beverages. Some folks want to expand what it applies to, but I think actually learning the volume of material that currently goes through the redemption system, and the problems with gas that exist, it makes sense to go incrementally. But also I know there's folks who think, oh, why couldn't we just put it all in our glue bins? Again, back to the volume of material that is coming through the bottle system, and folks are drinking more and more beverages, not fewer beverages, right? And what's cool is the material is readily recyclable, and so the manufacturers can use it quickly, turning it right back into new bottles of cans. I was at work. The bill asks the manufacturers to set up a producer responsibility organization that will then have a detailed plan vetted by the agency of natural resources and overseen by them. That's the ideal scenario. In the case that they don't set up their own PRO, the agency has to do it and there's a compensation set up for them to do it if they have to, that's a backstop of the chain. And just another side is that jurisdictions all over the world right now are also who haven't had redemption programs moving in this direction. So if you think, oh, this is an old school system, it's actually an old school system that is becoming popular again. So there are folks around who can help us stand it up. And we've

[Unidentified Senator (committee member)]: heard from them as well.

[Representative Amy Sheldon (Chair, House Environment and Energy)]: So they said they create the plan and then they actually invest in, they utilize the current redemption centers to the extent possible, but they also need to prioritize areas that are underserved today. And that's defined in

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: the bill, we walk through

[Representative Amy Sheldon (Chair, House Environment and Energy)]: that with counsel, I'm sure. But at the end of the day, we get a system that is more efficient and more accessible to the consumers and leads to just more better convenience and modernized collections. I don't know, maybe I'm a policy geek, but I had a lot of fun learning about how people are collecting bottles in different ways, and then also reducing pollution from trucking, if you're curious about that, because these systems, most of these systems would have bottles consolidated and crushed on-site before they got moved. Some of them rely on bags, but most of them actually the bag drops would crush the bottles in the can, separate them and then send them on their way so there's less traffic. I don't know, do y'all have questions?

[Unidentified Senator (committee member)]: Ahead. I remember the last bill, it really helped bring profitability to the retention centers, take care of the prices, do the same thing.

[Representative Amy Sheldon (Chair, House Environment and Energy)]: Well, so this has a temporary increase in the handling fee for non co mango cloud, right? You're not gonna depend on it, but you'll get there. And eventually I think these systems move away from a handling fee, but they are increasing profitability. It's a negotiated contract between the folks who

[Senator Anne Watson (Chair)]: frankly have the real estate and the systems now.

[Representative Amy Sheldon (Chair, House Environment and Energy)]: And I think that, you know, we heard from redemption centers, they're cautious, but they know things need to change. And I'm hopeful that they realize they are in the driver's seat in the locations where redemption centers are happening today and do have the ability to negotiate with this PRO to make a system that is better than the one we have today.

[Senator Anne Watson (Chair)]: Oh, don't have it yet. It's up for a third reading in the house today. So you mentioned the handling fee. Is there anything else that you should flag for us that might be controversial or tricky or anything or things that we should be working on,

[Representative Amy Sheldon (Chair, House Environment and Energy)]: something like that. No, we think it's great to like. Okay,

[Senator Anne Watson (Chair)]: perfect. And then how did it come out of committee? Oh, nine-two, actually yeah. And

[Representative Amy Sheldon (Chair, House Environment and Energy)]: it does rely on a four year kind of allocation from the Clean Water Fund from the Ishiqs, from the returnables, which I get some of that heartache, but I will just say that for us, it's a direct link. Many, many bottle redemption programs rely on infusions from the uncollected deposits, particularly to stand them up. So we are asking for four years of, I think it's about $3,500,000,000 total to invest in modernized redemption programs. And that'll be a grant funded through the Agency of Natural Resources that the PRO has to get the investment approved presumably before they make it. And then it would be partially covered by money from the uncollected deposits and then also from the industry. So thank you for having us.

[Senator Anne Watson (Chair)]: Thank you so much. Okay, great. So we will, thank you. We're going to turn to Mr. Rutland, who's joining us remotely today. Welcome.

[Michael O’Grady (Legislative Counsel)]: Welcome. Thank you and thank you for accommodating me. I appreciate it.

[Senator Anne Watson (Chair)]: Yeah. Absolutely.

[Michael O’Grady (Legislative Counsel)]: Should I put the bill on the screen?

[Unidentified Senator (committee member)]: I think that

[Senator Anne Watson (Chair)]: would be helpful.

[Unidentified Senator (committee member)]: Two hard copies.

[Senator Anne Watson (Chair)]: We do have well, the hard copy that we have is ads introduced.

[Senator Scott Beck (Clerk)]: On card.

[Senator Anne Watson (Chair)]: If you Yep. Is that what you walk through, or would you be walking through a newer version? Uh-oh.

[Michael O’Grady (Legislative Counsel)]: No. It's it's a committee bill, so it it is as introduced.

[Senator Anne Watson (Chair)]: Okay. Very good.

[Michael O’Grady (Legislative Counsel)]: And as you noted as you noted, it is up for a third reading on the floor today.

[Senator Anne Watson (Chair)]: Okay.

[Michael O’Grady (Legislative Counsel)]: So before this is micrograded legislative council, I'm gonna walk you through an act relating to the extended producer responsibility program for beverage containers. Before I tell you what this bill does, I'm gonna tell you what it doesn't do. It doesn't raise the deposit on any container. It doesn't include an automatic increase of the deposit if recycling goals are not met. It doesn't increase the scope of containers subject to redemption. So it's not going to apply to bottled water. It's not going to apply to bottled iced tea or wine or hard cider. That is what it doesn't do. What it does do is that it creates an extended producer responsibility program for the collection, redemption, and disposition of containers that are currently subject to the bottle deposit law. And it establishes mandates or minimum requirements for the plan that the manufacturers and distributors must implement for that collection, redemption, and disposition, including convenience requirements intended to increase the convenience for collection, especially in those places referred to as redemption deserts in the state. So that is generally what the bill does. And I'll

[Senator Scott Beck (Clerk)]: you know

[Senator Anne Watson (Chair)]: If I can interrupt you, do you have a question?

[Michael O’Grady (Legislative Counsel)]: Hey, Michael. I just have a kind of clarification question. The use of the word disposition of beverage containers, what what does that mean? So it's about if they're recycled, if they're reused, if they potentially are are Go managed in a different way. Like, that's that's what I mean by disposition. I don't like to say disposal, and I don't like to say just recycling because there there are alternatives other than those two. Okay. Thank you.

[Senator Anne Watson (Chair)]: I have that same question actually. I like, wow. Disposition. It's a new usage of this. The question here. Yes. Go ahead.

[Senator Scott Beck (Clerk)]: Well, it's not I heard I think I heard from who's doing a show and say that they're gonna actually process some rounds right on-site.

[Unidentified Senator (committee member)]: Well, they're gonna crush them? Yeah.

[Senator Anne Watson (Chair)]: Some of it? Yeah. Yes. It sounds like that's part of it.

[Senator Scott Beck (Clerk)]: Put it right into the recycle stream.

[Senator Anne Watson (Chair)]: That's a good question. I think we should find out more about it. Okay.

[Michael O’Grady (Legislative Counsel)]: So so I do I do wanna note that the existing MRF system, the the what is called the blue bin system, mixed system, that is that is not being altered by this, except that maybe it will become more convenient for people to use the redemption system rather than the blue bin system. But it but it it doesn't it doesn't do what the last bill did, the last bill that was vetoed by the governor by decreasing the supply of containers going into that blue bin system No. By increasing the scope of the container ship subject to redemption. It does it doesn't do that. This bill is leaving the blue bin system as it is, with the caveat that increased convenience might lead to some decreased supply to the blue bin.

[Senator Anne Watson (Chair)]: Oh, there's another question.

[Senator Scott Beck (Clerk)]: I'm just curious about the redemption side that it's always been told. We should

[Senator Anne Watson (Chair)]: hear from them. Well, we hear from multiple. So speak to that.

[Michael O’Grady (Legislative Counsel)]: And and the the house did hear from multiple redemption centers. I think there's a You're a a variety of positions.

[Unidentified Senator (committee member)]: You guys can pass this if you want us to. So.

[Michael O’Grady (Legislative Counsel)]: What Should I proceed?

[Senator Anne Watson (Chair)]: Yes, please.

[Michael O’Grady (Legislative Counsel)]: So section one is is a large part of the bill. It is amending 10 VSA chapter 53, which is the beverage container redemption system. The first changes are in the definitions, but they do not change the scope. The key definition for the scope is what is a beverage and that is not changing. It's still gonna be beer, small beverages, mineral water, mixed wine drinks, soda water, and carbonated soft drinks. It doesn't add anything else. Liquor is already part of the program, and we'll talk about liquor in a second. The definition of container is changing to be clear that it's pretty much any of those beverages in any type of container. There was an exception for biodegradable material that that wouldn't be subject to the beverage redemption, but that is being replaced. And the only limit now is that carbonated beverage containers with the volume greater than three liters are not going to be part of the program because of the issues with redeeming that size of a bottle or container in with some of the automated equipment. Manufacturers and distributors are the entities that are subject to redemption and will be subject to the producer responsibility requirements. You will see the definitions of those two on page two. And then you get to the beverage container deposit. Again, it is not changing, but there was this strange language in current statute that said that a deposit is not less than 5¢, which made people think that it could be more than 5¢.

[Unidentified Senator (committee member)]: And

[Michael O’Grady (Legislative Counsel)]: so that not less than language was struck.

[Unidentified Senator (committee member)]: Jesus. Wow.

[Michael O’Grady (Legislative Counsel)]: Moving on to page four, you will see that the handling fee on line seven so does everyone know what the handling fee is? I

[Senator Anne Watson (Chair)]: think I do, but I think it's worth explaining nonetheless.

[Michael O’Grady (Legislative Counsel)]: Sure. So when when a manufacturer sells their beverages to a retailer, they collect 5¢ as a deposit. And then the retailer sells that container to a customer, and the retailer collects 5¢ from the customer. Now the retailer's whole, but the customer is out that 5¢ deposit. The customer brings the empty bottle back. The retailer gives the customer 5¢. The retailer provides the container to the retailer or the redemption center provides the container to the manufacturer. The manufacturer gives the retailer redemption center 5¢ plus an additional fee for the retailer redemption center's costs in returning, sorting, and collecting that that container subject to the redemption system. Right now, there's what's called a co mingling system. So multiple brands have entered into an agreement so that their brands can be collected in mixed form that they don't have to be sorted out one by one. But then there are those containers that are not commingled, and that's where a lot of the cost in redemption exists. You have to basically sort the brands by hand at the redemption center, which is labor intensive, time intensive, and to incent those brands to enter the commingling program, you are increasing the handling fee from 4¢ to 5¢ for those retailers and redemption centers that are doing redemption. Does every anyone have a question on that?

[Senator Anne Watson (Chair)]: I feel like I will have more questions, I am gonna need to just, like, absorb this for now and let it percolate.

[Michael O’Grady (Legislative Counsel)]: Okay.

[Senator Anne Watson (Chair)]: We'll talk more about it. So okay. Thank you.

[Michael O’Grady (Legislative Counsel)]: But one of the things to understand is that once the producer responsibility organize organization is formed and their plan is being implemented, there will be no handling fee because you will see underneath that plan that the producers are going to enter into compensation agreements with the redemption sites. So it might be more than the handling fee. It might be less than the handling fee depending on volume, but there will be a negotiation of what the compensation will be for redemption centers, albeit that ANR has to approve that compensation framework. Moving on in 1522A, the rules, the rules are being struck here because they're really outdated and antiquated. Later on in the chapter, you're giving ANR general rulemaking authority. Section fifteen twenty three relates to acceptance of beverage containers. Generally, a retailer shall not refuse to do redemption of any brand that it sold, And a manufacturer or distributor shall not refuse to pick up from a retailer that sells its product Okay. Container for redemption.

[Unidentified Senator (committee member)]: And

[Michael O’Grady (Legislative Counsel)]: then but on page six, if a retailer has less than 5,000 square feet and, there is a producer responsibility organization that is operating, they will not be required to do redemption. They may refuse to do redemption. And similarly, if a manufacturer distributor is selling directly to a consumer from a retail location where there is less than 5,000 square feet, that manufacturer refused to redeem. And the concerns there are space. Redemption takes a lot of space, especially if it's a popular redemption site. If there's a PRO that's already set up, the general retailer may refuse. And then manufacturer distributor that's selling directly can refuse just if they have less than 5,000 square feet. Okay. Section fifteen twenty four, line 15 on page six, this changes some of the labeling requirements. The the containers need to be labeled in a certain way to provide notice of the deposit. Right now, the the information needs to be on the top of the container, but that's often hard to do. So on page seven, line three and four, the labels, they'll be on the top, the side, or in a clearly visible location. And then going down on page seven, line sixteen and seventeen, to facilitate redemption, to facilitate the use of the modernized equipment, every beverage container sold or offered for sale in the state shelf contain a UPC product code and a barcode displayed on the container. This will allow easy scanning and sorting and basically allocation of cost to those manufacturers and distributors in the producer responsibility organization. On page seven, line 19, you're gonna see a bunch of language related to the redemption of liquor bottles. This is not changing how liquor redemption is done. It's just that how liquor redemption is done is not transparent in statute. There's no statute really that sets forth the requirements for liquor redemption to this detail. And so it's being put in statute to provide how liquor redemption is done so that it's available to the public. Yep. So you'll see redemption of beverage containers of volume greater than 50 milliliters that contain liquor are subject to the following requirements. They have a 15¢ deposit. They have a 3 and a half cent handling fee. A retailer shall not refuse to accept beverage containers, of liquor or refuse to pay that person the refund value, for any container sold by the retailer that's not broken or is not otherwise exempt. And they shall not the Department of Liquor and Lottery runs redemption of liquor bottlers bottles, and they shall not refuse to pick up beverage containers subject to the section or refuse to pay the refill in value or refuse to pay the handling fee. Now one of the things that is new in for liquor redemption is that once the PRO, the producer responsibility organization is set up, ELL can coordinate with that PRO to collect liquor bottles because maybe it'll be cheaper for the state to do collection and redemption of liquor bottles through the PRO instead of through DLL. So that will be discretionary authority of ZDLL to coordinate and compensate the PRO for collection. Wicker and Lottery has the same performance goals and redemption rates that you will see later in the bill for other beverage containers. And they report to ANR the amount and tonnage of liquor bottles that DILL collects in the previous calendar year and the redemption rate. So ANR can calculate what the redemption rate is for all beverage containers subject to deposit. When you get to the redemption center certification, there's a striking of the fact that they if they redeem more than they have to redeem more than 250,000 containers a year to in order to be certified and or approved in a commingling agreement. That's being struck. It's not enforced. Okay. And and then you come to the creation of the PRO. So the first thing and the the thing that's in every PRO extended producer responsibility program, is that there's a ban. So no manufacturer or distributor may sell or distribute a container in the state without participating in a certain state or

[Unidentified Senator (committee member)]: a producer

[Michael O’Grady (Legislative Counsel)]: responsibility organization. Then on or before January 2027, the manufacturers to distributors apply to A and R to form a producer responsibility organization. And ANR may approve that for a period not longer than ten years provided that the PRO needs to be a nonprofit. It has to have the ability to administer the plan. Mhmm. It can't create unreasonable barriers to other manufacturers joining it.

[Unidentified Senator (committee member)]: And then

[Michael O’Grady (Legislative Counsel)]: after approval, you're now on page 11 line five. The PRO needs to maintain a website that identifies the name and business address of each manufacturer, distributor in their program, the name of each beverage and container in the plan, and for each beverage container subject to the plan, a UPC and barcode. If the PRO fails and properly implement the plan, ANR can effectively dissolve the producer responsibility organization. If the producer responsibility organization is not formed or if ANR dissolves it, ANR has the authority to administer the plan on its own, provided that it will charge each manufacturer and distributor the cost of plan implementation plus a 10% additional cost called a recycling market development assessment that would be deposited in the solid waste management assistance account in order to provide grants to the developed markets to recycle materials. So if the PRO doesn't do it, it doesn't do it appropriately, ANR has the authority to administer the own plan and charge the manufacturers and distributors the cost plus a VIG.

[Senator Anne Watson (Chair)]: And this is the same construct as the household hazardous waste

[Michael O’Grady (Legislative Counsel)]: PR? It's very similar. Yes.

[Unidentified Senator (committee member)]: Okay. Okay.

[Michael O’Grady (Legislative Counsel)]: And then the PRO, normally, in extended producer responsibility programs, the PRO is required to pay ANR a fee for ANR's cost in overseeing the program. Here, the PRO is going to reimburse ANR for the cost of overseeing administration of the programs, and they're gonna do that through the budget process. So ANR annually will submit to you, the general assembly, the cost of overseeing the administration of the program, PRO of thirty days to provide comments to ANR on that requested cost. And then the what the cost will be or what A and R will be authorized to seek reimbursement on has to be approved during the state budgeting process. That is effectively their fee. You, the General Assembly approved fees. That's why you are approving this reimbursement. Page 13, liquor is not subject to the PRO. Remember, DLL runs their own collection and and redemption. So liquor is not subject to it. And then you get to the minimum plan requirements. What each plan or any plan will have to meet in order to be approved by ANR. It has to provide convenient opportunities for consumers to redeem beverage containers. And the plan has to take reasonable efforts to cite points of redemption equitably all across the state and at least three points of redemption per county where at least one of which will provide an immediate return, at least one point of redemption per municipality with a population of 7,000 or more persons that provides an immediate return. And then page 14, how sites of redemption are or will be cited in areas with high population density that may not have 7,000.

[Unidentified Senator (committee member)]: What what is what is the the other three that don't provide an immediate return, what does that mean?

[Michael O’Grady (Legislative Counsel)]: There's opportunity with some of the alternatives out there that you have accredited to your account or or a card or etcetera. And it it's not necessarily an immediate redemption or compensation, but it's there for you to to get your compensation when you file the process for that.

[Unidentified Senator (committee member)]: Okay. So you get your compensation. You just get it through a different mechanism than Right.

[Michael O’Grady (Legislative Counsel)]: And it's it's not immediate that you get your cash at that that redemption.

[Unidentified Senator (committee member)]: Okay. Let's move forward.

[Senator Scott Beck (Clerk)]: Next is the event. Yeah.

[Senator Anne Watson (Chair)]: That's a that's

[Unidentified Senator (committee member)]: a different Okay.

[Michael O’Grady (Legislative Counsel)]: On on page 14, and this is a pretty significant thing to think about when ANR is approving the VA- Sorry,

[Senator Anne Watson (Chair)]: think I had a second. Yeah. I just wanna clarify though. I mean, this is saying that there has to be redemption centers that do get remediated. So it's not changing that. Like, you can still It's requiring that those still exist.

[Unidentified Senator (committee member)]: Yeah. Yeah.

[Michael O’Grady (Legislative Counsel)]: Right. At least Waterford County and at least in the the populations of 7,000 or more.

[Senator Anne Watson (Chair)]: Yeah, yeah.

[Unidentified Senator (amendment sponsor; referred to as “Senator Bennington”)]: But there may be

[Unidentified Senator (committee member)]: parts of the county that don't have access. We do. But nevertheless, I didn't know that any. Yeah.

[Senator Anne Watson (Chair)]: Yeah. I didn't know that any other options. As in other.

[Unidentified Senator (committee member)]: Credit is to you can

[Senator Anne Watson (Chair)]: get credit in stores and then we'll get to you. Yeah. That makes sense. Okay. Alright. Sorry. Carry on. Thank you.

[Michael O’Grady (Legislative Counsel)]: So when approving the convenience requirement, the secretary may alter the number of points of redemption depending on the adequacy of redemption of service in the area, provided that they shall not reduce the number of redemption points below the levels of three per county and one in population center of 7,000. And I think I I use the example of South Burlington, Shelburne Road, the 17 grocery stores that or redemption that is, like, on that on that strip. Okay. And seventeen's an exaggeration, but there are there are several. A and R could say in approving redemption that not all of them are required, and that the PRO wouldn't need to fund redemption in all of those Then current you get to the fair operation and compensation to redemption centers. The plan shall specify how the locations are gonna be fairly compensated for participation in the program. There shall not be barriers to participation in instruction through redemption center, and the plan shall describe how management and sorting is at Redemption Center is minimized. They'll describe how materials will be picked up from Redemption Center, and they shall maximize the use of existing infrastructure when establishing points of collection under Subdivision 1. So when they're doing those collection points, they will try to maximize existing infrastructure. On page 15, line three, there needs to be standards for collection locations. They need to provide expeditious redemption that limits the need for persons to wait for redemption services. They had to be at sites that are secure, sufficiently lighted, and managed to ensure safety, and they have to comply with all applicable laws related collection transportation and disposition of mandated recyclables. The plan has to provide education to the public

[Unidentified Senator (committee member)]: consumer regarding

[Michael O’Grady (Legislative Counsel)]: redemption and how we've undertaken. And then in developing the plan, have to consult with stakeholders on a regular basis, which shall not be less than annually. And then page 16, at a frequency required by ANR, but not less than annually. The PRO reports to ANR each redemption center and its location, the amount a material beverage container, containers redeemed, the location and amount of beverage container material that was recycled, where it was recycled into, the carbon impacts associated with the administration of the plan, the cost associated with the administration of the plan, description of any improvements made in reporting, the reporting year to increase the ease and convenience for consumers to return, efforts taken by or on behalf of the manufacturers to reduce environmental impacts. Efforts taken by or on behalf of the PRO to improve the environmental outcomes. Description of the educational materials and any additional material for information required by and our. So within ninety days after receipt of a plan submitted by the PRO Secretary shall review the plan and determine whether to approve it or not, They will approve it if it meets all the criteria for the plan and for a PRO. Approval term is not greater than five years.

[Unidentified Senator (committee member)]: Page

[Michael O’Grady (Legislative Counsel)]: 18. The PRO approves the plan. Once the PRO's plan is approved, they have nine months to implement it. So nine months to get the the identify the redemption centers, enter into agreements, put the new equipment into those places.

[Unidentified Senator (committee member)]: And if

[Michael O’Grady (Legislative Counsel)]: they fail to meet the redemption rate in section fifteen thirty four, the secretary may require the PRO to implement additional activities, including additional reset redemption sites or additional redemption opportunities. There's going to be a program audit looking at how the program works every five years and conducted by a third party independent entity. There's going to be a fiscal audit every year, again, by an independent third party looking at the cost of the program and basically the redemption rate, its efficacy. And then those audit results are submitted to ANR, and ultimately, they'll be submitted to you as well. $15.34 is the redemption rate goal. Beginning 07/01/2029, the the goal is 75%. 07/01/2032, it's 80%. Beginning 07/01/2029, ANR reports to the general assembly with the redemption rate in the state for liquor bottles and then all other beverage containers. In that report, ANR will recommend to you whether the beverage container deposit for either of the beverage categories should be increased to improve redemption. There's no automatic escalator. The last time you addressed beverage redemption, you had an automatic escalator if the redemption rates were not met. This does not do that. You would have to legislatively act in order to increase the deposit. Page 20, line seven, this is the rulemaking authority. It's general rulemaking. Page seven, line 10, because the manufacturers and distributors are working together

[Senator Scott Beck (Clerk)]: Yes.

[Michael O’Grady (Legislative Counsel)]: Yes. To establish things like distribution and collection, it looks like collusion. And so you are exempting them from the state's antitrust requirements or prohibitions on collusion. But they can't, on page 22, use that exemption from collusion to set what the price of beverage containers will be or to restrict the geographic area in which consumers can

[Senator Anne Watson (Chair)]: buy beverage containers. Again, this is pretty standard for PR.

[Michael O’Grady (Legislative Counsel)]: Totally standard. It's been approved by the attorney general previously in at least four different EPR programs. Now the manufacturers distributors also want immunity from federal antitrust, but you can't do that.

[Senator Anne Watson (Chair)]: Fair enough. I missed things. Okay. Thank you.

[Michael O’Grady (Legislative Counsel)]: So you're out of the the chapter of law related to beverage container redemption. You're now into ANR's default notice requirements. The plan is going to be subject to public notice and comment. It's gonna go through effectively the public notice and comment that general permits have. There will be an opportunity for the public to comment, and there will be an opportunity for the public to request a public meeting on the plan. Then you get to the money. As you know, I believe you know that the abandoned beverage container deposits often are referred to as the sheets, they are deposited into the Clean Water Fund. But H nine one five would contemplate a transfer

[Unidentified Senator (committee member)]: of

[Michael O’Grady (Legislative Counsel)]: those

[Senator Anne Watson (Chair)]: Yeah.

[Michael O’Grady (Legislative Counsel)]: Those deposits from the Clean Water Fund to the Solid Waste Management Assistance account for four years. So in fiscal year twenty thirty, it would be a million dollars. Year 2031, it's also a million. In 2032, it's 750,000. And in 2033, it's also 750,000. So that's a total of $3,500,000 over four years. Just for context, the Clean Water Fund has about, say, on average 40,000,000 in it. So that's $3,500,000 out

[Unidentified Senator (committee member)]: of $160,000,000

[Unidentified Senator (committee member)]: for years. Can I ask

[Senator Anne Watson (Chair)]: a question, Mike? I'm not totally following the timeline yet in the bill. I need to absorb it more, but 2030, why does this, the transfer start at 2,030?

[Michael O’Grady (Legislative Counsel)]: Because effectively, that's when the PRO will be setting it up. I do have a timeline document. Awesome. That I can send to the committee if you would like it.

[Senator Anne Watson (Chair)]: That would be great. I love those kinds of things. Thank you.

[Michael O’Grady (Legislative Counsel)]: Okay. Then moving out of the Clean Water Fund, you're into the Waste Management Assistance Fund, and this just recognizes that the solid waste management account will have transfers from the clean water fund in it. This account lists the correct resources. And then you will see that ANR will be authorized to enter grants for bottle bill implementation. The grants will be for four years and reimburse the cost of equipment improvements to infrastructure. And then section five, there's a there's already a requirement that that people that are collecting as part of the blue bin system have to report to ANR how much they're collecting, tonnage, etcetera, in order for the state to determine its its recycling rates. Section five requires the manufacturers and distributors in the PRO to report in the same way the recycled materials that they are recycling, including the amount and containers and tons collected and the location and amount of beverage container material and what products the containers were recycled into. So just putting them on the same level as the entities that work through the blue bin system. And then section six is repeal of ANR's approval of redemption centers. Once the plan is stood up, the manufacturers, the PRO is going to be negotiating with who the redemption centers about who is going to do redemption. ANR doesn't need to certify those redemption centers anymore. There will be contracts between the PRO and redemption centers that will dictate terms. And then you get to the effective dates. It does the first effective date is 07/01/2026, but the timeline is built into the substance of the bill, provided that the UPC label on containers takes effect on 07/01/2027. And the prohibiting the sale of distribution without participation in the PRO takes effect on 03/01/2028.

[Unidentified Senator (committee member)]: And

[Michael O’Grady (Legislative Counsel)]: that's the bill.

[Senator Anne Watson (Chair)]: Okay. I know I'm gonna have more questions as I am, again, also still absorbing it. So thank you. Any other questions at this moment? No. Okay, great. Thank you so much, Mr. O'Grady.

[Michael O’Grady (Legislative Counsel)]: Thank you and thanks for accommodating me.

[Senator Anne Watson (Chair)]: Absolutely. Okay, and so we're going to move to Mr. Chapman. Okay. From DC. DC?

[Unidentified Senator (committee member)]: Yes.

[Senator Anne Watson (Chair)]: Yes. Okay.

[Unidentified Senator (committee member)]: Welcome. Good morning. Good morning. For the record, Matt Chapman,

[Unidentified Senator (committee member)]: I am the director of the Waste and Marathon Prevention Division where the section within ANR that both receives Bob Will. I think just again, stepping back, I'm going to be really truncated in my comments today, mainly because you're just getting into this bill and I'm going to make myself available throughout the process. So as questions come up as we move through it, I'm happy to go back and answer them. I think it's important to understand that the ballot was enacted in 1971. There's been virtually no changes to it since its original enactment.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: You know, as time has passed, we have really changed both the way we recycle materials, but also how we deal with sort of special waste and how we manage it overseas. I think one of the major challenges with the bottle bill is that it's developed organically, and there's never been anyone who has sort of overseen or tried to ensure that there's a consistent level of services for a good distribution of how cans and bottles are collected throughout the state. And so in some degree, that is what was built in, right? So we have seen as the agency over the past several years a decrease in the number of certified redemption centers, so people are getting out of the business of being certified redemption centers, and an increase in the number of escheatsa decrease in the number of bottles we're getting through the system. So we're seeing an increase in sort of what Mike and others refer to as these sort of redemption deserts where people have to drive longer, wait longer, take more time to redeem their beverages. Just to sort of flip a second back, asked about what a point of return or immediate deposit. So the thing that is probably the most likely technology is that there are backdrops that are out there where you basically put the twist side of your bag with a barcode that basically ties to you and you have an app on your phone, you throw the bag into a drop, you get the money back on your app and you can either get it transferred to your bank account or there are donation options to it. That's one of the technologies that may be looked at as a bargain system, but there are things like that. Again, I think a lot of the support of this bill is that the other challenge with it being grown organically is that there hasn't been a whole lot of investment in technology and technology has come on to the scene. So we've certainly seen as a state in part of it is we're just small and we don't have sort of the throughput that other states have, and so there's not a push to invest in some of those technologies. So I guess I'll just sort of pivot a little bit and talk about what's important to the agency. Mean, I think in sort of starting off, the modernization effort at its core is the most important thing, right? I think we're looking at the bottom bill and some people may ask, and it's probably good to just put it out there, expand the bottom, why to make these investments in the bottom bill? And I think that there's a couple reasons. One is certainly when we're talking about glass, I think that everyone agrees the quality of the glass that comes out of the beverage repair systems is better than what we get at MERS, right? I think PET is closer to the line and that PET is about equivalent from the bottle bill system in the MERV, and it's clear that aluminum is equivalent between the bottle bill system and the MERV. There's some conversations about whether PET is sturdier, what type of PET, and how much waste happens in the context between the bottle bill and the MERV system. Think from the agency's position that it's time to make sure that the bottle bill, if we're keeping it, that we make the investments in it so that people can use it, it's not ripe reminders to have a system that puts a 5¢ deposit on containers, and then we don't give them opportunities to actually redeem those containers in. So that's, I think, one of major things, one of the major elements that's sort of driving us towards the same thing and making sure that people have reasonably accessible opportunities to redeem. I think also that we create a mixture of redemption opportunities so that those people who need sort of that immediate money because it helps supplement their incomes and they need it right then, that those opportunities exist and the bill does have provisions that sort of focus those immediate return areas in denser areas where people might be walking or might be unasked, right, and they got litter or they have been walked to where they're going. So we're thinking about those sort of economic justice related issues associated with this as well, But also making sure that there are other forms of redemption available for people who don't want to wait, right? And who would prefer just throwing their bag into a bin and getting credited a couple days later or a week later and you get to much more convenience. System. From the agency's perspective, think there are couple of things that are important. And I guess maybe contractually it's good to say, I think there's a broad agreement on both the elements that are in the bill assets coming out of that house. There are a couple of elements that I think from our perspective that are critical. One of them is giving flexibility to the perspective of handling. And basically we are putting an obligation to update and manage the system onto the beverage distributors. They are going to have capital investment requirements that they will need to meet as a part of this bill, and the people who benefit from this equipment that's going into the redemption centers, that's going to produce both the space that it takes and the labor that it costs are the redemption centers. So the burden is on the distributors, the benefit is on the retention centers, and I think what is critical from the agency standpoint is that we give the PRO the ability to come up with bespoke agreements that recognize the sort of economic transaction that takes place there as opposed to having a save like number for a redemption for AOB.

[Senator Anne Watson (Chair)]: Can I ask about that? So when you say that Bergen is on the distributor's list, in this context, I I think of the entity that comes to mind for me is Beverage Baron and Barry. Sure. So when you say, because they sell lots, but they're not the distributor.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: They are not. Okay. Make sure. But that's Budweiser. They're the distributor.

[Senator Anne Watson (Chair)]: I mean, I'm so used to like the household hazardous waste or like the battery PRO that we would talk about them as manufacturers. Right. But in this case, it's like they're the distributors are the manufacturers except for that they're also selling.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: So with bottles and with beverage containers, they're franchise distribution networks within the state of Vermont, so we're not going up to the manufacturer. So if it was a manufacturer or a distributor, distributor if there is a franchise distribution network, manufacturer if there's not, we don't have many of those in the list of beverages that we currently manage.

[Senator Anne Watson (Chair)]: Okay, so this is, so even with this product, there is a manufacturer, but we're not talking about them. We're talking about

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: barrels, distributing paper, distributing paper, covers.

[Unidentified Senator (committee member)]: Okay. Okay. Thank you.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: That's And so, and then just again, for context, this is good. Thank you. You're getting into the bottle and like representative Sheldon said, I should have been doing this for the first half of the session over there. So remind me when we need to step back. So yeah, places like the Beverage Baron or Chindi Quik Stop up in the Northeast Kingdom, places that actually take your containers and give you the 5¢, those are the redemption centers that are the ones who hopefully will benefit from some of these investments. Okay,

[Senator Anne Watson (Chair)]: so that's what I wanted to clarify. When you were saying that the burden is on the distributors, not the redemption centers, that's what in the bill, the burden would be on the distribution. Absolutely. And right now it's flipped.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: Well, now, no one's responsible really for

[Senator Anne Watson (Chair)]: it. Oh, I see.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: Right? Mean, kind of, you know, yes, it's a little wild, there's no cohesion to the system. And you know, I think that, you know, we're basically forcing the distributors and the manufacturers into a PRO. That PRO is required to basically look at the map in the state of Vermont make sure that people are being served, Like that there's sufficient collection of cans so that people aren't driving a half an hour, waiting an hour in line in order to return their bottles of cans. And we're looking to them to make equipment and technology upgrades to the system. There are some redemption centers that have made those investments and they would need to be treated, I think, differently than those that have, right? So that's why I think the need to move away from a legislatively mandated handling fee to the boards giving the PRO flexibility is an incredibly critical aspect of the stuff. So that's, and I'm not gonna, there will be people with different opinions sometimes, right? I think that, so that's incredibly important. I think the other thing that's important is giving some resources to the PRO to start the capital investments. You will hear from other witnesses and the distributors actually have someone who's actually looked at what it might cost to and what the future system might look like. And I would encourage you to look at that because that will help inform, I think a lot of the thoughts that you have is to start moving forward in your deliberations, but it's going to be a lot more than the 3,500,000.0 that we're talking about in order to build out the sort of technology infrastructure that's need for the modernized beverage collection system.

[Senator Anne Watson (Chair)]: To the question about the mechanics of the, I

[Unidentified Senator (committee member)]: guess the contracts

[Senator Anne Watson (Chair)]: really. What I heard was that it's the PRO that would end up with some kind of either an MOU or a contract with redemption centers. Now is that, I'm wondering if you could flesh that out a little bit. Is it a single contract naming a whole bunch of entities? Is it individual contracts? Is it a contract? Is it an MOU? I would imagine it's a contract because money would be I'm imagining it's a contract.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: Yes. And I'm imagining that they're probably going be relatively individually tailored. There may be a lot of things that are similar to what all those contracts, but I imagine that compensation components of them will be individually tailored to what the redemption center looks like. I I think it's probably good to appreciate as well that revenue equals the number of cans that pass through your redemption center So plus the A3P, the more volume you have, the more revenue you have. So some places in more densely populated areas or areas that have a lot more cans give more revenue than sort of say a small facility in Newport or frankly maybe even down in Manchester, right? Think those sort of more isolated areas.

[Senator Anne Watson (Chair)]: So the money in the contract, I mean you're citing these couple elements that would be factors. Sure. It's not, and correct me if I'm wrong, it's not, the amount of money would not be predetermined based on say a formula or is it based on a formula?

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: There is no formula that is required. Agency, so your compensation structure has to be a part of the plan. It has to be fair, right? Was that a It is. And that the agency reviews and approves the plan. So I am assuming that if someone during the negotiation process thought that it was unfair or that we would receive comments as part of the approval process noting the issues.

[Senator Anne Watson (Chair)]: Okay, that answers where I was going with this question because I was thinking about, you know, what is to stop someone from negotiating down or up to, you know, to tip the balance somehow. Sure. But if it's got to be, if it has to be fair and that is sort of arbitrated by the DEC, then that's at least a check to be like, if somebody's watching.

[Matt Chapman (Director, Waste Management and Prevention Division, VT ANR/DEC)]: Yes, someone is watching. I think the other thing to remember is that there are minimum subversive facilities that need to be out there, and it's a lot easier to use a facility that exists rather than for the VRO to set up a new facility and build it out themselves, right? So there's a big incentive for the VRO to use the facilities that are already out there. So investment in, so flexibility with the panel would be investment in infrastructure. And then this is not an expansion bill, right? So, and I think that one of the key things is the system needs to be improved, and needs to get off the ground before we think about anything sort of the house, right? I think age 158 that the legislature considered a couple of years ago, the two things that were problematic from the administration's point of view were the increase in the deposits of 10¢ and the increase in the scope of what was covered by the model. So we would not support a bill that had those significant funds. Okay. Those are generally speaking the major like things that I would sort of underline and highlight. I mean, I think it's important to note with lots of conversations I think that it's undermusted. There's a lot of consensus around itself. So I hope they've been sharing that. That's great. Yes. And with that, I'm happy to answer any questions. I'm also happy to go.

[Senator Anne Watson (Chair)]: Oh yes, we are getting to go. Any questions? Yes. And anticipating that we will have more questions for you and really grateful that you were saying at the beginning that you're around and happy to come back and would love to just keep you involved in the process. So very grateful to do all that. Awesome, thank you. We will see Mr. Burns on another day.