 Welcome everybody. It is Thursday morning and we are here with our attorney David Hall, who's going to take us through the statutory provisions in age 273. I think we're going to everyone can read the first 19 pages or so that are that are findings or that are the historical issues that were discussed in the last time we took up this bill. But I wanted to have David take us through age 273. Again, starting on page. I don't have it open yet, but of the current draft. Thank you. And so David, please, if you could take us through the the bill as as what you have, that would be great. Sure. Good morning, David. I'll legislative council on age 273. I apologize for hopping in and out. The Senate committee wanted to hear what you did on 157 and I was trying to quickly explain that to them. In addition to an omnibus housing bill. So what's going on? Would you like me to pull this up on the screen or just talk? Can you pull up on the screen please? Sure. Are we working with this? I have the amendments. Yes, if you could, if you could put the amendment up and also, you know, share that. Did we share that already? Can we share that? Well, let's put it up and then if you could share it with Ron and then we'll post it because we just have as introduced right now. Sure. Thank you. Absolutely. And let us know when it's posted, that would be great. So I've just emailed that to the committee, which I run you, I believe you're on that group list, right? And yes, I have it. Great. And he should have it. So let me just pause on page one because I don't want there to be any confusion. So again, the bill number is age 273. And this bill was introduced after it was introduced. There had been some more work in refinement on some of the pieces of it. And that's why it takes the form of a draft 1.1 committee amendment. I mean, obviously, it doesn't commit you to doing anything as a committee. It's just the format at this point is a strike all amendment to have what is the most current language in the proposal. The other reason I'll pause here on page one before I skip to 19 is to note that as the chair indicated, there are statements of legislative intent and a significant amount of findings included in the draft. You will have noticed both in the bill is introduced also in the strike all version of it before you and these findings are extensive and you know, you'll definitely want to pay some attention to those should you decide to move ahead. We have talked about findings in the past and what function they serve. And I sort of the way I presented it to you previously is to sort of bifurcate findings into two worlds. One is, you know, findings that are based on whatever you did in your committee time or the sponsor had and they just sort of give sort of a general explanation and background. Maybe they try to make the case to other members why you're doing what you're doing, etc. But, you know, legally they may not have much of any necessity per se for a bill and its viability as a law. There are other contexts, however, in particularly in context that raise constitutional concerns where findings can be necessary and important if the law is subsequently challenged. And that is because there are lots of different provisions in, you know, that would, you know, the constitution that would serve as the basis for a legal challenge to a law that require court to make the state as defender of the law and a court as finder of fact and law to make a decision of what the state's purpose was and whether it was legitimate, etc. So for instance, the contracts clause, you know, if someone, if you passed a law that impaired the right of contract after the contract had been signed, the federal contracts clause says you can't do that unless there's a legitimate public purpose and, you know, the harm, the public benefit outweighs the private harm that will be caused by the abrogation of the contract, etc. It's a balancing test and findings in the bill that becomes law that abrogates an existing contract are part of what the court would look at to determine what was the state's purpose when it adopted this law and violated the contract right, does that legitimate public purpose outweigh the harm to private parties. Um, you know, frankly, this bill raises the specter of potential constitutional issues because, you know, it does deal explicitly with decision making that either in letter of law or in implementation may be based on race or other class distinctions that can be, you know, sometimes the basis of challenges under the Equal Protection Clause. There have been, and we have talked about this before, there have been cases in the past, you know, 20, 30 years from about government contracting and reserving allocations of contracting or spending for businesses that are owned by, you know, certain races or by certain genders. There have been district court challenges recently to some of the federal spending that has come down in the COVID era. Some of that, some of the federal legislation has earmarked or reserved out certain pots of money to be used, for instance, for, you know, black farmers or for women owned businesses, etc. And those have been the subject of court challenges and have at this point, to my knowledge, there's two or three I've seen and they have all found those provisions to be unconstitutional because it's based on class distinction, not on an economic distinction. So the way that the state would have to address what we call strict scrutiny in a court case that brings an Equal Protection Challenge is that it would have to demonstrate that there is a significant state public interest that the law that you've created is narrowly tailored as possible to address directly a discreet harm suffered by the class. And basically, this is the narrowest and best narrowest and best way that you can directly address that harm. And, you know, that showing has to be made on a case by case basis. So this is all a very long winded way of saying that to the extent a bill that may implicate an Equal Protection Challenge is passed by this body, your findings and your statements of intent would probably serve as a strong basis before a court of why the state acted how it acted, the problems that it has identified, and how this legal action is narrowly tailored to address that problem. That's a lot. Brad, very good. Can I interrupt for a second, please? I still don't have a copy of the amendment. I don't think it's come through. I thought David said he emailed it. I think he's not aware it didn't come through. I haven't restarted it. Well, I've just sent it again to House General Housing listserv. It should be on our latest site of email. Yes. I had another email earlier today, take like 20 minutes to half hour read. I don't have. Yeah, it just hasn't showed up in our email box yet, David. If Ron can receive it. I haven't gotten it either. All right. So if David, David, if you could just scroll through them and please come in and be patient and we'll get it as soon as we get it. All right. So in a nutshell, starting on page the bottom of 23 here, when we get to the substance of the bill, you'll see section three, the purpose of this act to is invest in individual and collective land access and property ownership as a way to move towards greater racial and social equity and wealth distribution. And the way that the bill purports to do that is to create a fund and have a board that manages that funds and to make targeted investments is provided in this act. So the construct is not unlike the working lands enterprise board or ag resources, other boards that you may have seen where we have created a dedicated fund for a specific purpose and then authorized a panel or a board. Some administering authority composed of people specified in the statute who have relevant experience to manage the distribution of those funds. So in 10 VSA 12 here, section four of the bill, we're creating the Vermont land access and opportunity fund. So it's a segregated funds, technically over in the treasury. You'll see on the top of 24 here, the Vermont land access and opportunity board is the entity that would administer the funds. So the money has the fund has the monies appropriated to it by the General Assembly and other public or private monies. The board accepts unexpected balances, earnings, stay in the fund. You have to say that otherwise they revert to the general funds. And then the board shall expend monies from the fund consistent with the powers and duties specified in section 13, which is the next section. So we've got a fund, we've got a board that's going to manage it. So section 13 Vermont land access and opportunity board. It's created. It's attached to a CCD for administrative purposes. As far as its organization, it's rather large. And it's it's composed of executive director of racial equity or designee, five members appointed by Vermont Commission on Native American Affairs, two of whom are Abinaki, two members appointed by Vermont NAACP, a member appointed by Vermont Racial Justice Alliance, three appointed by Vermont Relief Collective, at least one of whom is a farmer, two members appointed by Vermont Every Town Project, at least one of whom is a farmer, a member of financial expertise appointed by a CCD, a member of real estate experience expertise, appointed by DHCD, a farmer appointed by Secretary of Agriculture, social worker with expertise in anti-racism, appointed by the National Association of Social Workers, a licensed marriage and family therapist with expertise in anti-racism, appointed by American Association of Marriage and Family Therapy, two members appointed by the Pride Center or LGBTQ, one member appointed by migrant justice, represents migrant farm market populations, one member appointed by the U.S. Committee for Refugees and Immigrants, who belongs to refugee immigrant communities, one member appointed by the Vermont Developmental Disabilities Council, one member appointed by the Vermont Psychiatric Survivors with lived experience and any other members at large, the graduate commission is necessarily appointed to have the function of the section. So you'll see that the, you know, the composition of the board, and I want to say the focus of the fund in the board and of the bill transcends any one particular racial group. So everything I said about the Equal Protection Clause, et cetera, you know, may or may not come into play depending on how, you know, this law ultimately passes and what the activities of this board and this fund are, just wanted to point out that it's not just simply unlimited to a racially based fund in board and action. So members serve three year terms, appointing authority replaces a member who leaves. When selecting members of the board, appointing authorities shall give priority to and shall seek to appoint a balanced mix of remuners who have historically suffered from discrimination and who have not had equal access to public or private economic benefits due to race, ethnicity, sex, geographies, language preference, immigrant or citizen status, sexual orientation, gender identity, socioeconomic status or disability status. That language is used several times in this bill because that is like the population that would be on the board manage the fund, receive the benefits. And it's again, it's repeated several times in the bill. D, the board can elect officers and make subcommittees. E, the majority is a quorum. Action is by majority action to people present. You can have remote meetings. Ha ha. It used to be such a quaint idea or actually a cutting edge idea. Remember when that was first introduced into Title 11A for business corporations like 10 years ago? And we were like, oh yeah, cool. We can meet by phone. What wouldn't that be? Compensation. So private sector members are entitled to per diem compensation. They say 10-10 for expenses. The powers and duties, the board shall have the power and the authority and duty to promote racial and social equity and property ownership for vermonters specified before who suffered historically from discrimination and not had equal access to public or private economic benefits due to race, ethnicity, sex, etc. The board shall award grants for the purchase of a primary residence. The board shall award grants for the purchase of a farm property or land being suitable for regenerative practices. The board shall award grants for land access and stewardship programs. The board shall award funding to new and existing financial education, wealth management, and regenerative national resources programs led by and focused on vermonters in these communities. The board shall in 5A here retain wealth, financial, and natural resource advisors who have vermonters from those communities and B, use the services of those advisors to provide and create education, wealth management, and regenerative natural resources services to grant recipients. 6, the board shall award grants to anti-racist mutual aid networks that support recipients of grants awarded. 7, the board shall award grants to groups proposing to share land to create commons and for collective ownership. 8, the board shall grant funds to the every-town project to purchase and hold land and trust in every municipality in Vermont in order to promote land access and stewardship by vermoners in those communities. 9, the board shall work with the Vermont Housing Finance Agency to explore ways to apply grants to mortgage subsidies and explore ways to overcome the barriers to obtaining a mortgage, including debt to income ratios, redlining, and the impact of algorithmic systems and decision-making. 9, the board shall work with the Department of Taxes to explore ways to provide tax breaks to properties attached to grants. So under 8, the board shall have the authority to adopt rules concerning eligibility criteria for recipients and rules for the use of grant funds, which shall include income guidelines, limits on the amount of grants, and rules governing the transfer of grant-funded property, generational poverty, inheritance, and impact of other assistance already received. And 2, the board shall allocate grants to achieve a balanced, healthy mix of private ownership and collective ownership. Appropriations in section 6 of FY23 from the General Fund, $10 million to the Vermont Land Access and Opportunity Fund for grants and the activities specified in this bill, and the effective date would be July of this year. Questions? To your first, so what I heard from you with respect to the findings is that I mean, we'll make a decision, we'll read it, and we'll make a decision whether to include it as a bill. But in this particular case, this clarifies or this may clarify legislative intent in a way that provides some intellectual background as to why we chose to pass this bill, if it gets that far. Exactly right. Representative Trannell and then Byron. Thank you, Chair Stevens. So there's great specificity in the board members, that the potential board members, and I guess I was wondering when you touched on one of them being someone with financial expertise, would it be anticipated that that individual would be would sort of oversee the investment of this fund? Is that to your knowledge? I don't think so. I think that would be just one member of a large board that would operate by majority rule. Okay. Representative Byron. I guess I'm kind of asking the same question. The chair did this a different way. So does how well does this legislative intent or clarification of it in detail mitigate us from constitutionality exposure, the same way the federal African American farmer will be in program and the same thing happened with the federal restaurant recovery fund, which those payments were frozen under the same, I believe it was the same organization filed suit in both of those federal cases. Yeah. So let me take one big step back and say a few things. First off, you know, the state I said this to you maybe a million times, but I'll say it again, the state has its police powers, which are to regulate the public health safety, welfare, moral, general well being of its state and those those power that power, the police power is limited only by the US Constitution. So, you know, what that really means is that you can pass any law that you want to and it is constitutional unless it violates either your own state's constitution or the federal constitution. And only the only a only a court can decide whether or not something is constitutional. And ultimately, that's obviously the US Supreme Court, which has the final say in that matter. So I can try to help you navigate that, but I can never tell you obviously definitively this is or is not constitutional. I can also not really handicap for you, you know, what your odds are, I can say there is a spectrum. And at one end of the spectrum is very likely this is a problem. And at the other end of the spectrum, very likely that you're in the clear. If this were a bill that were limited to race based preferences, you would be on the problematic end of the spectrum. It is not such a bill. It is not limited just to racial preferences or gender based preferences or any other preferences that it's a mix of people with who have, you know, basically had structural and social barriers to the access of economic quality. As the bill outlines, this is all of this is the bill's words, not mine. Obviously, I'm agnostic on everything under the sun. And then the response is to create an investment fund and a board that manages it to try to distribute funds in a way that will address those structural and social harms and barriers. And it's as I said, because I read those words out to you, those communities, those populations that targets is a broad swath of people and there is an economic element to it. So that tells me that you're moving back to the others towards the other side of the spectrum away from strictly, you know, this is just based on race, we don't care what your experience was, we don't care what your income was, if you're a person of color you're in. The Supreme Court has in federal courts have mostly at this point said that type of construct is probably not going to work. But, you know, if that's not the only factor, then you're moving back down that line. And so this bill falls somewhere more towards the middle, I'd say at this point, I have brought up the issue and the concern of, you know, racial preferences and constitutionality for three reasons. First, it's my job. Second, the findings themselves are really more targeted towards the racial history of injustice in housing and land access. So while the remedy is purports to target a broader swath of the communities, the finding an intent language is not quite as broad with respect to some of the other communities. And then the third problem is not problem, but the third reason I brought it up is it is not just the words on the page that can be the basis of a challenge, it is also how a program is implemented. So you could have a facially neutral statute of lots of different varieties, not just this kind. There's a lot of examples, but the widgets are these, facially neutral, but in its effect and implementation, it is discriminatory, then that is equally problematic to facially discriminatory. So those are sort of the landmines. Does that answer your question, Representative Barrow? In great detail, actually. Thank you. No, that was super helpful. Thank you, David. Actually, given the time, I don't think we have time for that discussion. So I'll just wait. Okay. Representative Trama, is that a legacy again? Representative Hango and then Kallaki? Just really quickly, I'm glad that David pointed out the findings because reading back through them as he's explaining to Representative Byron, I realized that the findings are all specifically targeted towards BIPOC community. But my question is section three on the purpose. The individual and collective land access and property ownership, do we know how that could take place? Is this strictly through the sale of property and land to an organization through the use of this fund? So it would be just like any other land transfer, like for instance, what occurs now maybe to the Vermont Land Trust, for instance, something like that, or are there other ways of obtaining ownership and access? Yeah, I think it's a great question. The answer is we don't know, based on the language of the bill. I mean, they have specific authority to provide funding to try to diversify opportunities for access and ownership. The fact of the matter is, I think it may be limited only by this board's creativity. I mean, the legal mechanisms would be several. You could have individual fee simple ownership by a person or by an entity or by a group of people. You could have cooperative housing. You could have cooperative ownership. You could have a structure like you're referring to the Land Trust where somebody's going to own the land, but then there's going to be an access easement that's available to whomever and on whatever terms. I think there's a lot of room for creativity in property law for how that might be structured. But I don't think that this bill yet goes so far as to say exactly how it would manifest. Thank you. I think for future questioning, I would be interested in hearing more about the access portion if a group or an individual were granted access to property that is owned by another entity and how the crafters of this bill foresee that being utilized. So that's just for future. Sure. Thanks. Representative Blackie. Thank you. And thank you, David. I think this is a very compelling idea. But I think I want to understand the investment which seems interesting to me, but where the shared equity is back in as I questioned the governor's proposal for this middle income housing subsidy, I didn't feel there was any give back to the state for kind of permanent affordability. So I think that's the question I have here is, is this, I would have to understand if we can have shared equity and long-term affordability or kind of a shared affordability for when people build assets in this way. We had last spring in a bill that was vetoed, S79, there was a $5 million revolving loan fund that was targeted for communities of color. And that was an interesting way to look at bring the investment up front, but then it's kind of a shared equity long-term that regenerates itself. And here, this jump starts the process, but I'm not sure there's a, I think I've said it, so we'll have to talk about that later on. Now there's a lot of, this is a very broad, there's a lot of broad concepts in here that need to be that. And if as we continue to work on the bill, you know, finding out, talking to working lands folks to see how their funding has worked to answer some of these, some of these questions. And but that's where I think we'll end it today. Thank you for your time, David, and we'll see you soon.