 And we are going to start with S-89, which is Recollective Health Benefits Center. Yes, we're going to walk through it today. We walked through it yesterday. And we put it on for a vote yesterday. And is there further discussion, amendments? This is our be prepared in case the feds do something again. Senator Farrakhan has been quite passionate about this issue, is he around? I don't know. And the question was, was it in the same center, said in two years, or just for a little bit? No, no, no, no, this is, that one was voted out. I'm reporting that. This is the reflective plans for when they do away with silver loading. Okay, we've got to get the right to the phone sheet. The reflective plans. Yes. And what this does is it says that we're going to stay on still reloading as long as we're allowed to, but if the feds say we can't, which would be for the 2021 budget, but those plans, those plans are already, will be submitted a year from now. So this would say, if that happens, then the cost will get spread over the silver and bronze plans, and that there will be reflective plans for those that don't qualify for a subsidy. All right. Is there any discussion? Is there a motion? Is there an amendment? No, it is a straight up. They got it right the first time. I move we vote S89 favorably. Okay, Senator Pearson has motion that we vote S89 favorably. Further discussion, if not, all those in favor say aye. Aye. Opposed say no. Okay, that is 6-0-1. Okay. Everybody likes this. The advocates like it. I don't like it. If you have to do something, you don't want to. I'm sorry, am I saying it is a less objectionable. Yes, but then I'll turn to that. I, I. If we have to do something bad, this is the best bad we can do. All right. They are literally on their way. They are literally on their way. I have had further discussions with Senator Kitchell. They're still a little iffy about whether or not they need to have fees put in this bill. Oh, S89, I got more. A reporter. Oh, a reporter. Yes, who wants to report? It's a rocket. It's a rocket. I did that once to Welch. And it was in the end. Mr. Momu. And I voted against it. So I couldn't report it. No one else wanted to report it. So we made him report it. Is he here? Who? He is. He is around. He's not here. Yay. No, I, he paid issues. I'll report this one. Oh, that's good. You are crushing my mellow. I know. Okay, that one's done. Thank you. So anyway, Stephanie's done some work on pricing out the board. We know there's money in the fee fund from Medical Marijuana. We start looking at all those listings of fees in all those other towns. This bill will not come out of here. Not by crossover. So what I told them was we can decide on a tax rate. We will vote it out. They can look at it, but they will have it to look at. They can price out the board because there's proposals to change the size and the salaries and decide how much money they need. And then if they feel they need fee put in there, tell us. And I think they'll know that by the first part of next week and we can then work on doing the floor amendment with the fee, with fees, but the bill will be moving and we'll make it. Because this is one that the other body has never done a tax and regulate bill. We have. They've done a just make it legal bill. Oh, so they never. And they have. But they have untaxed money. They've never been on consumer safety. So we think they're going to need some time to think this through. And we will see what they can do. There's a lot of new members too. Yes. Who will need to know this. So that right now is the moving it forward plan. Stephanie can tell us some of the pricing she has put on it, but it's whether or not the money people over there, how much surety they need to make the interdepartmental, what is it? Payment in anticipation of revenue. Just a procedural question is, since we're talking about tax here in the building, gosh, should that originate the house revenue in here? We went through this last year and I remember last time this, I asked that same question. Bloomer told me that in a way, the tax is incidental to the program. So it is a consumer safety. It is a regulation program that has a tax. It is not. I mean, in public parliaments, it's always referred to as tax of regulation. Tax has always put first. Sure. And that's been his ruling. This came up with opioids or something. It came up last year. This issue, because we did it last year. And I think it's revenue bills and it's how you define revenue bills. The budget definitely has to start in the other part. And any major tax. That was Bloomer's. The landgain's tax would be okay because it was trying a lot of behavior. Right. Not make money. Okay. So, they're on their, what, they're not here? They're right here. Perfect timing. So anyway, the tax bill, the tax department asked for some scheduling and they wanted to be paid their processing fee for the local option tax, which when the league was here, they said it was fine with them. But they will have to collect it and remit it. But there were technical corrections and I told Anthea to just wrap them up. This was just seeking like the regular reporting periods with their reporting periods, but just so we had something to look at and we'll find out if there was anything objectionable. But off the top of my head, I didn't see anything that stood out. I think there's one thing that will be interesting. Oh, okay. A satanic thing will be three one day. There's one thing. All right. It's a simple little bit. I'm pretty sure I did when I did the walkthrough, but y'all have a copy of this. We do. Yeah, we do. To the file somewhere. Yeah. This is the time when I passed up when we did a walkthrough of what I just did. For the record, Michelle's title, it's Office of Legislative Counsel. And then the extra paper. We're taking a look at draft 1.1 Senate Finance, Individual Instance of Amendment to S54. Remember, we should have a copy. And I'm just gonna talk just briefly about the first instance of amendment. This is just a technical amendment. So something changed that the committee government operations recommended to committee on judiciary that they incorporated into their amendment was that with regard to board appointments that the bills introduced had two governor appointees. Seneca Vox recommended to judiciary that it be one governor, one treasurer appointee. And that was changed, but there was a provision in a second section where I forgot to just bring that through. And so this is just a technical change because we're already approved there. And so I just wanted to catch it here rather than do it on the floor. Better here. Okay. So I was planning on just walking through these one at a time if that works for you. That's great. Okay, so the second instance of amendment, the Department of Taxes requested that there be a specific definition section for chapter 207, which is the new chapter on the cannabis taxes, both excise and local in title 32. All of the definitions are already defined terms either in new title, new language to title seven or existing language in title 32, except for and on the amendment on page two. Subdivision seven retail sale is just a pared down version of the retail sale definition from the sales and use tax chapter in title 32. And this will get slotted in if you're looking at your bill as amended by Senate judiciary at the sort of bottom of page 51, top of page 52. Okay, then there's a definition section. So the third amendment is doing two things. One, and I'll do the end of that first, is it's just pulling out where it previously it's at that term is defined in subdivision, et cetera, and it's defined under seven BSA pulling that out. Because since we now have a definition section, we don't need to cite back to the other definitions. This is also leaving just as a placeholder in case you guys do want to change what the excise acts is. This would happen in this third instance of amendment where there are the question marks. So the question marks are ours for sale. All right, something above 10 or below 37. All right, so that's about as precise as we can get. All right, the fourth amendment, and now if you're in your amended bill is on page 53, we previously had said that one of the things that was exempt was sales for resale, but that's already now included in the retail sale definition that you have included in your definition section. And just to provide the utmost clarification, it has been swapped for the different sales that could happen between the licensees, your cultivator, your producer, your manufacturer before you get to the retail point. So this language in the fourth amendment and in the sixth amendment is the same because you have that language in both your excise tax section and your local option tax section. The sales, all right, so this accepts those sales from the excise tax. Correct. The excise tax will be collected once at the final sale to the consumer. And it's just basically defining what is not the final sale. Yeah, right, but I'm assuming that at some point there are going to be fees attached to these different, and licensure, and application, and they'll pay. Yes, so there will be paying to have the license and one establishment could have multiple licenses of different types, but this is so there's not, if you have someone who's growing that is then selling to someone who's gonna do the rest of the process and turn it into cookie. Babe, it's the brownies. The cookie is what's passed when it's sold to the actual consumer. Right, similar to all other manufacturers. And similar to how we sort of treat our sales and use tax. Right, yes, but this is not a sales and use tax. So, yeah. Canvas excise tax here. Right, okay. The fifth amendment is again one of those where we're just pulling out as the term has been defined since we don't need that since we have a definition section. The seventh one is giving the Department of Taxes the ability to collect an administrative fee per return. The number that is in there now is $5.96, which is what's for the other local option tax. I think the Department of Taxes is still trying to figure out if they think $5.96 fee would cover that, but it would be on the monthly returns and it would be deducted from what the municipalities would be getting back. There's also some language in here that the Department of Taxes wanted added in, which addresses the destination basis for taxation, which could come into play if there are deliveries in the future, which is not something that this bill contemplates, but they wanted that language in there to be clear. Yes. We just sipped through the processing fee. That's for the existing local option tax. The $5.96 is what is the administrative fee for the existing local option tax? We're just duplicating it here. But we're not duplicating the tax because the amount to be raised is the same no matter where it takes place. The Department came in for that fee. It was because some towns were the tax tax. This rate, other towns were the different rate and we gave them some money to deal with that difference, but in this bill, there's no difference. There is no difference. That was what, I think we heard testimony from the league as well on the 70-30 split. This is only going to the municipality where the local option tax is collected if there's a retail establishment. It's not meant to be divvied up to other municipalities. All this is doing, the only change this is doing is instead of having all of the money go back to the municipality with the retail sale, it's all the money, less an administrative thing. But there's no share. What's the administrative fee for if there's no split rate that they have to administer? I understand your question, and I think the Department of Taxes is probably better suited to say what is involved in their administrative costs. My memory was that, let's say, Montpelier has a retail outlet, so the retail outlet remits whatever it is, monthly or to the tax department, and then the tax department has to do a calculation and send 2% of that back to the city of Montpelier. So that fee... I'm mistaken because I thought, yesterday's testimony was that the local option was whether or not they were gonna sell it, but now we're saying if you vote to sell it in your town, then you get to keep the 2%. It's more like if you are selling it, then you get 2%, and so the fee... My question goes away. Okay. You were talking about the previous behavior. Thank you. This is the same fee. It's unfortunate to call the local option in a way because it is not the same as what you think the option is whether or not to sell. The other option is whether or not to tax. This one, we're saying if you tell, this is the tax you will get. Right. Well, when it was changed to up to 2%, so municipality could choose to have a lower... Lower. Yeah, it's the option tax. The town next door has a retail, we might have a little price for it going on. So is this 70% share also in here? No. No. So now we're back to it being different. No. There's no, the town that doesn't, it's not going into the pilot fund and being dispersed to the towns like the local option tax. This one, the town says yes, and they then get the right to do a local option tax. On marijuana. On marijuana. They do that tax, and they get to keep all of the money that is generated in their town by that tax. Except for five bucks. Except for five bucks. And that's what the bill before us says. What? And as the finance committee, we'd like to weigh in on the policy of whether or not to send 70% to other towns. We're not sending 70% when we wait. Well, that's what he's asking. Well, do you want to send 70%? Well, that's, we decide stuff like that. Yeah. I'd like to send 70%. Like we do with the sales tax. This isn't the sales tax. It's whatever we say. Okay. I'm confused as to where you're going. And we've been drafted by someone who's not the finance committee. He doesn't want having the other local option be charged in bond failure. So his people pay it and they don't get the benefit of it, but they do if they have a salt shift. Because if you have any state property, that gets paid out to those towns. That's been an ongoing issue for 20 years. Ever since we've had a local option tax and collected money where the local towns get a share of that money, we also send another share to a pilot. Yes. And that's a decision for us to decide whether we wanna do that or we don't. Right. And whoever you have to develop was. Is that a motion? Pardon me. I do move that we treat it similar and that we send 70% to the pilot. So they don't only keep 30% minus five bucks, five, nine, six. Same as since next. I believe the testimony from a league is that they would like it shared equally. So that it not be divided up. I have a motion that. Sure. It means the town is gonna keep all the money the way the bill is written. I'm not trying to believe. That's of course that would be their position. They said it should go to all the towns. Yeah. Yeah. Which is 70%. But all the towns can vote. So I don't know. So can I just clarify, can you help us with that? Yeah. I just wanted to remind people of the way that it works is the proposal of the bill is introduced and the strike off from judiciary has municipalities have an opt out. So automatically it's everybody can participate. If a town chooses to say we are not going to allow a cannabis business in our town. They have. Any kind of. It could be any cannabis establishment. So I need the five licensees. Oh. So they can be a producer. You could write. So they could say we're fine with a cultivator but we don't want a retailer. Okay. Or we're fine with a product manufacturer but we don't want a farm. Whatever it is. And so they can choose and they can put that but they would have to put that before the voters at an annual meeting or a special meeting. And so if they don't want to participate they have to have a vote to opt out and therefore prohibit and that's the only way that they can prohibit a licensed cannabis establishment from operating in the municipality. They can't do it through trying to use zoning or new suits or bylaws or things like that. So they would have to have a vote to opt out. And so if they opt out the way that judiciary structured this was that if they choose to opt out and the bill is providing this opportunity for the local tax that if you put it and say we don't want to participate then they should not share in the local auction revenue. But obviously. Okay. If I vote to have farms and manufacturers but I don't want to retail establishment because the only one is across the street from my middle school, you know, the county store and that's the one place that's available. Do I share in the tax if I don't have retail sales? I didn't think so. But on the sales tax, you do. On the sales tax, you share in the tax if you have a state facility. So if they're while you already get money if there's a state farm. So if the state has a garage or a salt shed or they own property in your town, you get a prorated share. Of this 70% and if you get to keep 30%. If no, you get to keep, that's another one. You get to keep, I'll leave this to South Burlington but they have a local option tax. They keep 30%. They keep 30% of that extra 10 cents I pay on the dollar. 70% goes to the pilot. And 70% goes to all the other towns that have. Pilot. Pilot. And they get it to the tax department because it's very big. Pilot for those that are uninitiated is payment in lieu of taxes. So this bill doesn't share any of it. Except for a little fee with the tax department. What has come to our attention. The league has asked, frankly, to share with literally everything. Your motion is to share with pilot fund. The same as the sales tax. The same as what? The same as the local option, sales tax. Thank you. Those are, I think, to my mind, the three things that have been discussed. So that would be my. The motion is that the local option tax here be treated the same as any other local option tax. Which is that if 30% would stay with the town and 70% would be shared with the pilot towns. But that is not all towns. So in terms of this motion in your role, I think is that 30% that the individual town keeps based upon the sales in that town. Yes. Yes, just like the sales tax. So what was the league was saying they want all, whether it's 30% or 100% of that 2% local tax, they want all of that to be collected and distributed to 240. Right, and I don't. Even if you don't have a retail. Right. Or anything. Same as the sales tax. No, the sales tax is not distributed to all towns. The league said they wanted all towns to share in the benefit, but that was as far as it went. We don't have a mechanism set up right now to do that. So that would definitely require a higher fee from the tax department. Unless you piggyback the. Once you've done it, it might be easier than going town by town as to what your collections are. They already, if you. Do that now. That's what is suggested in the bill. The bill suggests that all in the bill, and I know if you were here for that part, the, any money the town raises stays in the town on that local auction section. Yeah, town by town. Town by town. So if you choose, this is an incentive to have an establishment. If you choose to have an establishment, you keep your local auction tax, which you vote and you have to vote out if you don't want to. You keep the 2% minus $5 and 96 cents. Why does that one just say six dollars? Make their job easier. They make you round in a B2, the tax department because they will collect all the taxes and send your 2% back to you. Maybe it's easiest to think about if you want to have a big incentive or a little bit. I didn't want a big incentive. Okay, I have a motion to treat this local option as we do the others, which means it would be divided 3070 between the host town with the tax and 70% minus the $5 and 96 cents would go into the pilot program, which means universities and assault ships. Is there further discussion on that? If not, all those in favor say aye. Aye. All those opposed say no. And once again, the large towns will take the money and the small towns will be left out. Actually, I think the biggest place is going to be the small towns in the Connecticut River Valley because that's where it's not legal across the river. All right, all right, so we're off that one. Eight. So the eight is the Department of Taxes requested. Even though there is language in here saying that all of the sales and use tax provisions apply if they're not inconsistent, they wanted to specifically reference the penalties section for sales and use tax. Which means if I failed to send it in, they can do bad things to me. And that doesn't complicate the fact that we're not counting those sales and use tax. No, it's just so that you don't have to duplicate a lot of language for an administrator. They don't send theirs in, they get the same penalties if I don't send in my sales tax. Okay, so the ninth amendment, one is a pretty small administrative thing, the tax department requested that the returns be due on the 25th day of the month so that it wind up with other taxes that was previously the 15th day. And then this is the one that would be a change from what the bill has, which is it would specifically give the commissioner taxes the ability to prevent remittances in cash. So that would be an addition. And I know they have brought that to us before. There were no medical folks paying cash were there? No. They have not had to set up a vault or arrange for army car deliveries. So how do you check? Yeah, I think we heard there was at least one major financial institution that is statewide pretty much that you could get financial services from. You might have to open it up. I'm saying to create a reflective deposit plan so that the government changes that requirement and creates a prohibition, which is not necessarily unlikely to revert back to a requirement that banks cannot would make sense to have a fallback position that doesn't have to come back to the legislature. If the federal government were to? If the federal government were to prohibit those institutions that are providing credit service or provide banking services from doing so. Well, it's May. Much more. It's May require. May require. So it gives us a recognition. May require, right. May prohibit the revisions. If the feds made a change, they may not require it. So if you've got one little mom and pop store coming in with a couple hundred dollars in an envelope, you're fine. It's just something that we ought to do. I agree, I agree. That's a good point. We can't look through that. Okay. Okay, so the 10th one is just provided clarification even though the rules of statutory interpretation, the specific would, if there is a conflict with any of the other bundling transaction provisions applicable to another tax, because they have regulations on bundle transactions, this language would apply for the cannabis bundle transactions. Okay. What's a bundle trend? Oh, this is like if you were gonna buy a t-shirt and an envelope. Okay, got it. You're gonna get the t-shirt and yeah. And they wouldn't say that the cookie cost a dollar and the t-shirt cost $49. $5, right. And then you're only getting the excise transaction. Yes, all right. This is the keeping everybody on the space. Okay, yeah. Okay, the 11th one, this is, it looks like you're adding two sections, subsection B already existed and subsection A is just giving the commissioner the authority to adopt rules through the administrative procedures act. 12. He's got overarching rulemaking authority anyway. Belts and suspenders, okay. That is the third time I've either used that today or heard. It was pretty standard around here for quite a while. That is what Michelle told me. Stillness. So 12th is another one where we're striking out some as defined that we no longer need because we have a definition section. And then whenever you have, I'm on to the 13th amendment. Whenever you have an exemption, you need to justify or explain the expenditure, the not collecting. And since we changed the language of our exemption, changed the language of the expenditure. So now it's saying you're avoiding taxing when purchased cannabis or cannabis product is intended to be incorporated into a new product. So that you're only taxing at that by sale. The 14th amendment, even though we are exempting cannabis and cannabis products from all the other taxes, we're now specifically saying these are the only taxes that apply. It's the cannabis excise tax and the cannabis local option tax. So even though we're in the sales and use tax section of title 32, we're saying this doesn't apply to cannabis and cannabis products. We're specifically saying these are the only taxes that apply to cannabis and cannabis products. So someone has sent the finance committee a bill that it does not send money to the end fund. And that's what we're looking at. This is saying in two different ways, these are the only taxes that apply. We're saying all these other taxes don't apply. And we're saying these are the only two taxes that do apply. The end result of that is you're saying that the sales and use tax doesn't apply. No money is going to the end fund. So that would be something that we might want to weigh in on. It might be. So the inclusion of this language is not the only thing that is making money not go to the end fund. What's making money not go to the end fund is this language and the language that says it's exempt from the sales and use tax. We're just saying it. Right, it is an excise tax. And that was done to make sure that the money goes to the general fund. And not the end fund. And not the end fund. So it isn't that bad. Right. I think we get back to the, yeah, to the concerns that there is quite a prevention bill headed this way. We got our first look at it this morning. That, and it does look at this money, but that we want to make sure that there's not, the expenses, if any, will hit the general fund. So it's just the third bill we've had this year. Last year we set the rules for sales and use tax and the perceptions of what to do at the end fund. This is the third bill we've got this year, which not withstanding last year's establishment of the end fund begins to, is this becoming a pattern now? It's always a pattern. No, we used to have a general fund transferred a year after a year after a year after a year. But then we put other things into the end fund to pay. Correct. All right. When there's not enough money, we find ways to manipulate. It's one of the things we do. You need to add it to your list. It's regulated, but it's not withstanding. Is there, of course, these businesses are subject to other taxes with holding taxes. Yes. That we don't worry about. This is the product itself. Yeah, yeah. And it's the only other part of the retail sale. This is a new product. We are choosing in this bill by calling it an excise and not a sales and use tax to ensure that the money from this new product will go into the general fund, at least for now. That does not mean that in the future, once we see what the costs and the revenues of this program turn out to be, that we might not go back to a sales tax. We play with the alcohol taxes on a fairly regular basis. We value it with the cigarette taxes on an almost annual basis. Is this a sales tax? No. This is. The way in which the bill is written that says it performs a function of not withstanding last year's tax. We're not gonna. Oh, it's also a bigger number, right? It's not. Right. It's not just buying sales tax to six percent. We could add the six percent on top. In this draft, we have XXX for the total tax rate. We could do the 10, six percent of the XXX, shall be sales tax like we do for beer and the other things that we could, sales tax. You could do the 10% in the bill. You, the six percent and up to a two percent local option. And we would still come in under 20. Yeah, absolutely. So that's the 16, so I'm sorry, manager, that's a few total, that's 16? 18. 18. 10, six, and two, right? I think I could still add. I mean, it is, or I have six. I hear what you're saying. I think there is a choice. Do you want to have some of this money go to the iPhone or not? And the choice currently is no, we do not. We haven't said that yet. Well, that's people who drafted the bill have said that. Right, that's what we're discussing. Which is what we're discussing. I hear what you're saying about the structure from last year, if you want some money to go to the iPhone, make the case. Six percent of the tax rate on cannabis should be sales tax and the rest would not be. Is there a reason that the drafters or presenters of this bill decided not to put a sales tax? We can discuss that somewhere. Okay, but let them go. Well, I mean, I would say that a couple of things. One is the reality of the Ed fund with the Amazon tax and now the phase two of that marketplace, what are we talking about? You know, we're seeing that change that was made last year come in with higher revenue than maybe we expected. So there was not a motivation to further accelerate that impact on the Ed fund. The testimony in here last year of what appropriations asked us to make that. And this committee said, that looks like the it's gonna get squeezed and it's gonna come in short. And the appropriation said, yes, it's gonna come in short, but we're confident that the two things that you just mentioned will be there next year. And we did put rooms and meals in to make sure that it was as equal in exchange. However, even with that, the projections in November was for a flat tax rate. And that included with our three year rolling average that the grand list was going up, which was a large part. If we give the 6%, arguably we might be able to lower property taxes. And with that said, the sales tax will go down. So. But the internet, right, so, you know, I think it's a fair argument to have and a policy discussion to have, whether I would think of it as, do we want some of this money to be sort of slotted for the Ed fund? That's not where I'm coming from. Is there any other reason to do it? Is there any mechanical reason to apply the sales tax to this as opposed to and bifurcate an excise tax and a sales tax? I don't, not that I'm aware of, but. Questions, do you want the money to go to the Ed fund? Or don't you, that's the question. Yeah, this is percent is set on the sales tax. So if we're going to do a different sales tax amount, I think that's why they went to an excise tax because it's not, it's greater than 6%. Lows you flexibility. Right. Remember, we're going to be learning things in the coming year before we collect them down. And so, if you, so. And you could put a 6% sales tax on there, which is going to take a heck of a time. And we could learn in the upcoming year and we could change it. Absolutely, and you also, if you, given that sales tax means one thing, it's 6% and it means two things. And to the Ed fund, you're sort of locked into that. This allows more flexibility. Locked you out. One way locks us in, the other way locks us out. But when you choose an excise tax at the point of sale, you have a lot of flexibility of is it 2% or 10% or is it 18%? We're either going to send it to the Ed fund or that's right. So that's the thing and we'll see if the council will send it to the small towns. We'll get it, back to the pattern. To the general fund, back to the pattern. I don't think this has got anything to do with big towns or small towns. It's what the big towns always say when each time there's an opportunity to have the small towns send one into the big towns. That's what happens in each time we're told that that wasn't the intention. We just have to. Okay, committee. Tips. All right, I don't think I've got a motion. Can I ask a question? So talking about opting in and opting out, is there any, if a town doesn't elect opt out, is there anything else? Do all zoning laws or permanent laws apply to a retail establishment and even a growing establishment as with an ordinary legal business? Yes, they have their authority, their inherent authority under title 24 and to be able to regulate the way that they would otherwise exist. And in terms of the taxes, does the public have any idea when they buy the, when I think in a liquor store there's some, on your bill or something that identifies the taxes being applied to the block? Yeah, there's language in here that specifically says you would put out both the X, Y, and X, and Y blocks. And there's a reference back. And was there any reason, I mean the original draft of 10 and two, was there any discussion about who's doing the most work or what the money would be needed for? I mean, I guess as an example, I would be 11, 193. If you're looking to do it. And working with the original sponsors, and particularly with Senator Sears and the way that he was envisioning it structured as introduction and also as it came to you, is that so the fees would be supporting the regulatory scheme solely and that the tax revenue he wasn't looking at as something kind of like a windfall, more that money, do you try to separate it at something that would then go to general fund and then appropriations could decide how to allocate that money to address things that might be impacts from the industry. And so he was trying to pick a number. That's more articulate than what I was trying to say, but I was trying to say, is the burden on the state envisioned to be proportional to that tend to do, I suppose, what are the responsibilities of Cal that they're getting? What are the burden that they're getting that they're justifying 1% or 2% added traffic? They did take testimony from folks in Massachusetts that have it from staff boards. Their testimony was that they really weren't seeing any impacts at this point other than some, addressing some parking issues with their dispensaries. But I think, I don't know, I think you probably would want to speak with the sponsors directly about that. I think if the bills introduced was a 1% local option and Senate government operations recommended to judiciary to increase it to up to two, so they give them a little more leeway so they could have a little bit of a higher to actually watch the bill. That was another question. So in the bill, it says, I think we have a very local option rates in the state. Yes. And that's a government operation. That was a recommendation from the government operations to judiciary and they included it into their money. Is that more of their jurisdiction than yours? The local ordinances in zoning would be in GovOps, yep. We just raised money. So we can go, we've got the tax rate, which has a placeholder of 10, excise, pure and simple, going to the general fund. That's the proposal and up to a 2% local option. We can change any one of those rates. We can say, no, we want to do the regular sales tax, but that would take any money out of the general fund, which needs it. We could choose to just say, as we do with alcohol, there will be an excise tax and there will be a sales tax and many other states do that. We wanted to come in below Massachusetts, which is at 20%, this gets us to 18 if we do all of that. Which is not as below as other people would like us to be below, but it's below. Is the local option tax a variable tax around the state right now? Well, it doesn't exist in every municipality. Well, I know, but where it does. I believe it is just 1%. Yes. Okay. And then there's the meals and rooms tax. We have flexibility, like I feel like Burlington has a higher restaurant. Oh, but your Burlington is the exception. When, trust me, as Montpelier tried to do this 20, some over 22 years ago. And South Burlington's trying to do it right now. Well, South Burlington, yeah, but Burlington in their original charter had the right to regulate places eventually. And they therefore, that was interpreted as that they could do rooms and meals taxing. The city of Montpelier's charter did not make that reference. So we had to go through a charter change, which for 18 years, so the big cities do lose sometimes. Never even got a hearing in this party. So Burlington is different. I believe the state law when we did the state, the school property tax, that's when the argument that, well, we were taking some of the town's tax and power because that was all they controlled. The state was taking that, we should share some of ours. And that's when this somewhat limited ability of towns, it started out only towns that were paying into the Ed Fund could do it. But I think that just limits it to no more than one. It's limited to one percent. I don't know that anyone's gone to a half percent or three quarters of one's just easier. I think that's where we are. I haven't heard of any variability. Maybe it moves in meals and alcohol, there is. But I haven't heard of any in sales tax. They're two different taxes. I've already canceled hemp for the day. Big dreams that we're not, I'm sorry. But we're not going to get through this in time. I don't think hemp is good. I just canceled it about two minutes ago. We're not going to get through that. I have a question. How do other people feel about the variable local option taxes? I think that gets confusing to the fat, like one town, two percent by the time they were sent. Confusing to who? What's that? Who is that confusing to? He says me. Are you going to be raising your consumption on the local portion of the town? I have to test how much my Tesla gets in terms of mileage. I want to drive to say that one percent. And I just don't know why we'd have so many different. I thought this was set at two percent. Oh, so you're local town. And they're all going to take two percent. Yeah. You know what I mean? So they want to say two percent. We can do that. Okay, I think because Massachusetts sends out two, three percent. State, county, town. So I didn't know it was at two percent. In New York City, you've got a state sales tax. And there you have a county sales tax. And then you have a New York City's sales tax. And you get three tiers. We have not done that in a while. And in the recent 10 or 15 years since that 60, the large towns have begun to do that. And the large towns can because they have votes. And every time they do it, they always have reason for doing it. But that's what the big towns do. Little towns, how do you find a big town? Why is that an injustice? A lot of people from the surrounding area come and use services in Montpelier. There's a burden to Montpelier. That's why you will jumpstart your car. Pilot funds that burden. Pilot makes up for the kittens of tax dollars that Montpelier gets because they host all this public land, public infrastructure. We're having a different argument. You have the votes to do this. And each time in the local small communities can't compete, each time you vote to do it, it makes them even more difficult to compete. We're off of that subject. That is pilot. And that is not this discussion. The discussion here is, what tax are we going to put on cannabis? Are we going to put an excise tax? And how much are we going to do a local option tax? And how much, and are we going to do any other tax, such as the sales tax on this? And we've been talking about 10, 2, and 6 in that order, right? Yes. The sales tax is new today. The sale is about the 10 and 2. We've also discussed wanting to come in lower. And massive huge. Because we want, well, we also want to cut out the black market. I think there's something to say that the illegal market. So you go 8, 6, 6, 2, and you're down to 16. What about the small towns? Just kidding, just joking. So can we take them one at a time and talk about should it be 2 or up to 2 or just 1? I do. All right. It makes Michael look, can I get your vote if you get 2? You're going to get hands on what? I don't know. I vote on 2. I'm going to make the motion, I don't know. OK, let's do a straw poll. Do we want to just say a local option tax of 2? Yes. All right. Why not? There was one on the news. He hasn't seen it yet. You know, one of the things I, and you'll hear me say this a lot, I'm in a different place with you on the sales tax. Of course. No, not because of, of course. Because I don't think, just because we put the sales tax to the education fund, that there's a big change in the scope of that tax that we have to be locked in to give a certain percentage to the education fund. That's a policy, and I'm sorry, we may have to not understand. But we have all these new things we didn't expect, and that shouldn't just enrich the education fund. Well, I will point out, we are not lowering tax rates yet. So the education fund is arguably not enriched. It has really nothing to do with this bill. OK. It doesn't. It's a theory. It doesn't. The question is, it only has something to do with the bill. The bill doesn't include it. This bill has a 10% excise tax. Similar, we have an excise tax on alcohol. We also have a sales tax on alcohol. So your option is, we just do not put a sales tax on. We put a 6% sales tax, because that is a set amount. I don't think we want to have different sales tax amounts, and we will be like the big cities. Or do I think the big question right now is, if we add the sales tax, then 6% of these sales, an additional 6%, will go to the ed fund. It will keep the general fund whole, as per the other bill. And we could go back to the original 1% in local option tax, and just say that. I'm feeling the census around 10, 2, and 6 myself, but I could be misreading people. It's just 18. No, I got one no, and I'm not sure. I got one hard bird here. Thank you. You can make, if you want to go to 16, you build from within. If you want to build from below, 6, you're up to 18%. But that's a choice. I'll say, I don't see a particular burden on the ed fund from this policy. There is some argue a health benefit or a health burden that comes out of the general fund. Some would argue there is a law enforcement implication that comes out of the general fund. Until you tell me what schools are going to change based on having this, I'm not interested in it going to that fund. I think there's a lot of integrity and back for it not to go to that fund. I'm sorry, I thought that you wanted to just to enhance you know, opportunities and things like that. I didn't know that there was a nexus being made between, because I don't see, I agree with Senator Pearson. I fully agree with Senator Pearson. There isn't anything else that goes into the ed fund that there's a burden on the ed fund from this. I would go with the 6% sales tax provided that doesn't go to the ed fund. Well, that's sort of what we're doing with the Exxon. That's my theory. So let's just do the Exxon tax. Right. That's 16%. No, the Exxon tax is at 10. We had talked about raising it, perhaps, because 10 is exceptionally low nationally. He's proposing to make it 16, is that correct? Well, if we're trying to get to about 18, if that's a number that we've been thinking about, then we've been out of it. No, the question is we would be the lowest in the nation on total tax if we go with the 10 and the 2. The next lowest is Massachusetts, which is also the closest, which is at 20. I personally haven't fought the property tax wars in this room for many years, would not mind. Nothing says it wouldn't be a good thing to lower or make it possible to lower property taxes. By doing this. By doing the sales tax. But I understand the other arguments. And this bill has a long way to go. We just have a quick question up. Senator Rocking, you're opposed to it going to get from Mass Boy. So he's trying to pull it apart a little bit. Oh, yeah, I probably haven't explained it lower. My opposition is to what we did last year, that people believe that every major change we did in terms of sales, like the Amazon, and that brings in millions and millions of dollars. It changes the amount of money. There's a big pump to the end for it. It's not what I envisioned that we're locked into that every dollar of the sales tax, no matter what happens to the sales tax, goes to the end fund. And this is a new, potentially very valuable resource to the state of Vermont. And I don't want to be locked in by that word. I can see the normal of the data of the sales tax from a year to a year. Fine, but if you get a whole new thing like, Sir Brock and I have this, you know, that's the truth. The rooms and meals tax that we raised from the RBO, you know, the Joint Fiscal comes back and it's like $4 million in the out here. They're taking 25% out of that and for education fund or something like that. Oh, that was the rooms and meals that went in to make sure that there was enough money. That can come out. We could change that. I just don't want, I don't think what we did last year should tie our hands when there's a big change. It doesn't. The question though right now is there is no sales tax. If you put a sales tax on, you will be benefiting the end fund. If you want to make more money for the general fund to do things you would like to do, then you opt the excise tax. Right, my argument is, So what's your motion? It's a theoretical argument. Yes. The answer to it is just to do the excise tax. Madam Chair, would you like that? Yes. Yes. When the, in the 2003, 2004, 2005, 2006 when appropriation, excuse me, appraisals were going up, the end fund was generating more money than it had in a couple years and when x60 passed, 80% of our monitors paid their school education taxes based on an income on the houses, on the houses they lived in they paid based on income and the threat that the top rate for paying based on income was $75,000 and we used some of the additional revenues because the 80% of people who paid based on income had shrunk to the low 60s and was continuing to shrink year after year and we took some of the increased revenues from the property tax and we put back to the 80% of our monitors paying their school taxes based on income and today, in the demonstration here yesterday morning, we're back down to about two thirds of our monitors pay their local education taxes based on income. Not 80%, now it's only like 67%, if the, and each year the number of people who pay based on income shrinks as the, as our overall income comes to life and we don't make an adjustment on the 75,000 and up to 90,000, 90,000 with a cliff and we're going to squeeze the people who pay based on income and make them throw them off the formula if we don't make some changes and the way you make changes is when you have some extra income. I think the short of it is that we could, the Ed Fund could use that extra money. So then you go back to have 80% of people in Vermont who work for folks would pay their school taxes based on income, again, other institutions. Would it be helpful if we, we've locked in 2% local, would it be helpful for us to land on a total tax of 18% or whatever and then to inform if there's a division of all that? See how we divide it up. Okay. So what's the argument for the low tax? Why 10? Well, I'm looking at you, Senator Pearson, because you're the sponsor. Yeah, I think it was in part a reaction to the 26% that the governor's commission came out with and why just, that seems a little high. You know, here's another alternative and figure that you kind of wrestle at. It's not set in cement. It is far from set in cement. It's barely anything. So the total tax, given that we wanna see if we can't discourage illegal sales or purchases and that we wanna be competitive. Our nearest neighbor and the lowest in the country is a 20 total. And that's, I think, sales, local option and some excise, some mix, it's all that thing. So again, I saw the doctor, I'm not gonna mention. Are we ready? Yeah. So I hear two people say 18%. I say 16% excise tax, 2% local option tax. What was your proposal? 16% excise tax, 2% local option tax. That gets to your 18% free. Deferred and trade over glass of water. This thing was not... Okay, see you. Sorry, you. I mean, I didn't really think that was a struggle. You know, so I got to go to school, I paid for my school. I'm good. I'm an administrator. Okay, we are still waiting on an amendment. Most of it, there's going to be a question mark for the tax rate. Most of it is just technical changes that the tax department asked for. We do not have that yet. We're waiting for it. So we are going to start with S-89, which is Recollective Health Benefits. Yes, we walked through it yesterday. And we put it on for vote yesterday. And is there further discussion, amendments? This is our be prepared, in case the feds do something again. Senator Schrocken has been quite passionate about this issue. Is he around? I don't know. And the question was, was the same set in two years? No, no, no, no, no, no, no. That one was voted out. I'm reporting that. This is the reflective plans for when they do away with silver loading. Okay, we've got to get the rights. Reflective plans. Yes. Silver. And what this does is it says that we're going to stay still reloading as long as we're allowed to, but in the feds say we can't, which would be for the 2021 budget. But those plans. Those plans are already, you know, will be submitted a year from now. So this would say if that happens, then the cost will get spread over the silver and bronze plans and that there will be reflective plans for those that don't qualify for a subsidy. All right. Is there any discussion? Is there emotion? Is it an amendment? No, no, it is a straight up. They got it right the first time. I move we vote S89 favorably. Okay. Senator Pearson has motion that we vote S89 favorably. Further discussion. If not, all those in favor say aye. Aye. Opposed say no. Okay. That is 6-0-1. Okay. Everybody likes this. The advocates like it. I don't like it. If you have to do something, you don't want to. I'm sorry if I say it is a less objectionable. Yes. Turn to that. If we have to do something bad, this is the best bad we can do. All right. They are literally on their way. They are literally on their way. I have had further discussions with Senator Kitchell. They are still a little iffy about whether or not they need to have fees put in this bill. Oh, S89. I got more. A reporter. Oh, a reporter. Yes. Who wants to report? It's a rocket. I did that once to Welch. And it was an idiot. And I voted against it, so I couldn't report it. No one else wanted to report it, so we made him report it. Is he here today? Who? He is. He is around. He is not here. No, he had issues. I'll report this one. Oh, you are crushing my mellow. I know. Okay. That one's done. Thank you. So anyway, Stephanie's done some work on pricing out the board. We know there's money in the fee fund from Medical Marijuana. If we start looking at all those listings of fees in all those other towns, this bill will not come out of here, not by crossover. So what I told them was we can decide on a tax rate. We will vote it out. They can look at it, but they will have it to look at. They can price out the board because there's proposals to change the size and the salaries and decide how much money they need. And then if they feel they need fee put in there, tell us. And I think they'll know that by the first part of next week. And we can then work on doing a floor amendment with the fees, but the bill will be moving and we'll make it. Because this is one that the other body has never done a tax and regulate bill. We have. They've done a just make it legal bill. Oh, so they've never done a tax bill? They've never done a consumer safety bill. They've never done a consumer safety bill. So we think they're going to need some time to think this through. And we will see what they can do. You guys have a lot of new members too. Yes. Who will need to know this. So that right now is the moving it forward plan. Stephanie can tell us some of the pricing she has put on it. But it's whether or not the money people over there, how much surety they need to make the inter departmental, what is it, payment in anticipation of revenue. Just a procedural question is, since you know, we're talking about tax here. Yes. In the building. Gosh, should that originate the house? We went through this last year. And I remember last time this, I asked that same question. And the Bloomer told me that, in a way, the tax is incidental to the program. So it is a consumer safety, it is a regulation program that has a tax. It is not public problems. It's always referred to as tax of regulation. Tax is always put first. Sure. But that has been his ruling. This came up with opioids or something. It came up last year. This issue because we did it last year. And I think it's revenue bills and it's how you define revenue bills. The budget definitely has to start in the other body. And any major tax. The Bloomer's. The tax. The Landgate tax would be okay because it was trying to modify behavior. Right. Not make money. Okay. So. Cover the expenses. They're on their way. They're not here. They're right here. They're right here. Perfect timing. So anyway, the tax bill, the tax department asked for some scheduling. And they wanted to be paid their processing fee with a local option tax, which when the lead was here, they said it was fine with them. But they will have to collect it and remit it. But there were technical corrections. And I told Anthea to just wrap them up. This was just seeking like the regular reporting periods with their reporting periods. But just so we had something to look at. And we'll find out if there was anything objectionable. But off the top of my head, I didn't see anything that stood out. I think there's one thing that you'll be interested in. Okay. I think we'll be doing one day. There's one thing. It's a simple little bit. I just wanted to check in with y'all. I'm pretty sure I did when I did the walkthrough. But y'all have a copy of this title. We do. Yeah. To the file somewhere. Yeah. This is the timeline I passed up when we did the walkthrough. For the record, Michelle's title, it's Office of Legislative Counsel. We're taking a look at draft 1.1, Senate Finance, Individual Instance of Amendment to S54. We should have a copy. And I'm just going to talk just briefly about the first instance of amendment. This is just a technical amendment. So something changed that the Committee on Government Operations recommended to Committee on Judiciary that they incorporated into their amendment was that, with regard to board appointments, that one, the bill is introduced to have two Governor appointees. Seneca Vox recommended to judiciary that it be one Governor, one Treasurer appointee. And that was changed. But there was a provision in a second section where I forgot to just bring that through. And so this is just a technical change because we're already approved there. And so I just wanted to catch it here rather than go down the floor. Better here. Okay. So I was planning on just walking through these one at a time. Yeah. That works for you? That's great. Okay. So the second instance of amendment, the Department of Taxes requested that there be a specific definition section for Chapter 207, which is the new chapter on the cannabis taxes, both excise and local, entitled 32. All of the definitions are already defined terms, either in new title, new language to title 7 or existing language in title 32, except for and on the amendment on page 2. Subdivision 7 retail sale is just a pared down version of the retail sale definition from the sales and use tax chapter in title 32. Okay. So you can plot it in if you're looking at your bill as amended by Senate Judiciary at the sort of bottom of page 51, top of page 52. Okay. And then there's a definition section. So the third amendment is doing two things. One, and I'll do the end of that first, is it's just pulling out where it previously and said as that term is defined in subdivision, et cetera, and is defined under 7BSA, pulling that out because since we now have a definition section, we don't need to cite that to the other definitions. This is also leaving just as a placeholder in case you guys do want to change what the excise acts is. This would happen in this third instance of amendment where there are the question marks. So the question marks are ours for sale. All right. Something above 10 or below 37. All right. So it's about as precise as we can get. All right. The fourth amendment, and now if you're in your amended bill, is on page 53. We previously had said that one of the things that was exempt was sales for resale, but that's already now included in the retail sale definition that you have included in your definition section. And just to provide the utmost clarification, it has been swapped for the different sales that could happen between the licensees, your cultivator, your producer, your manufacturer before you get to the retail point. Okay. So this language in the fourth amendment and in the sixth amendment is the same because you have that language in both your excise tax section and your local option tax section. All right. So this accepts those sales from the excise tax. Correct. The excise tax will be collected once at the final sale to the consumer. And it's just basically defining what is not the final sale. Right. But I'm assuming that at some point there are going to be fees attached to these different and licensure and application and they'll pay. Yes. So there will be paying to have the license and one establishment could have multiple licenses of different types, but this is so there's not, if you have someone who's growing that is then selling to someone who's going to do the rest of the process and turn it into cookie. Made as the brownies. The cookie is what's passed when it's sold to the actual consumer. Right. Similar to all other manufacturers. And similar to how we sort of treat our sales and use tax. Right. Yes. But this is not a sales and use tax. Yeah. Canvas excise tax here. Right. Okay. The fifth amendment is again one of those where we're just pulling out as the term has been defined since we don't need that since we have a definition section. The seventh one is giving the department of taxes the ability to collect an administrative fee per return. The number that is in there now is $5.96 which is what's for the other local option tax. I think the department of taxes is still trying to figure out I think about 96 feet would cover that, but it would be on the monthly returns and it would be deducted from what the municipalities would be getting back. Okay. There's also some language in here that the department of taxes wanted added in which addresses the destination basis for taxation which could come into play if there are deliveries in the future. Which is not something that this bill contemplates. All right. But they wanted that language in there to be clear. Yes. We just zipped through the processing fee. That's for the existing local option tax. The $5.96 is what is the administrative fee for the existing local option tax? We're just duplicating it here. But we're not duplicating the tax because the amount to be raised is the same no matter where it takes place. And the department came in for that fee. It was because some towns were the tax tax. This rate, other towns were the different rate. And we gave them some money to deal with that difference. But in this bill, there's no difference. There is no difference. That was what I think of her testimony from the league as well on the 70-30 split. Right. This is only going to the municipality where the local option tax is collected if there's a retail establishment. And it's not meant to be divvied up to other municipalities. All this is doing, the only change this is doing is instead of having all of the money go back to the municipality with the retail sale, it's all the money less an administrative thing. But there's no share. What's the administrative fee for if there's no split rate that they have to administer? I understand your question. And I think the department of taxes is probably better suited to say what is involved in their administrative costs. My memory was that, let's say Montpelier has a retail outlet. So the retail outlet remits whatever it is monthly or to the tax department. And then the tax department has to do a calculation and send 2% of that back to the city of Montpelier. So that fee. I'm mistaken because I thought yesterday's testimony was that the local option was whether or not they were going to sell it. But now we're saying if you vote to sell it in your town, then you get to keep the 2%. It's more like if you are selling it, then you get 2%. And so the fee. My question goes away. Okay. You were a previous behavior. Thank you. This is the same thing. I'm going to call the local option in a way because it is not the same as what you think of as well. The option is whether or not to sell. The other option is whether or not to tax. This one we're saying if you tell, this is the tax you will get. Right. Correct. When it was changed to up to 2%, so municipality could choose to have a lower. Lower. The next door hasn't reached out. We might have a little price for going on. Okay. Is this 70% share also in here? No. No. So now we're back to it being different. No. There's no, the town that doesn't, it's not going into the pilot fund and being dispersed to the towns like the local option tax. This one, the town says yes and they then get the right to do a local option tax. On marijuana. On marijuana. They do that tax and they get to keep all of the money that is generated in their town by that tax. Except for five bucks. Except for five bucks. That's what they bill before us. Right. And as the finance committee, we like the policy of whether or not to send 70% to the town. We're not sending 70% when we wait. Oh, that's what he's asking. No. Do you want to send 70%? Well that's, we decide stuff like that. Yeah. I would like to send 70%. Like we do with the sales tax. This isn't the sales tax. It's whatever we say. Okay. I'm confused. He's been drafted by someone who's not the finance committee. The other local option be charged in Montpelier. So his people pay it and they don't get the benefit of it. But they do if they have a salt ship. Because if you have any state property that gets paid out to those towns. That's been an ongoing issue for 20 years. Ever since we've had a local option tax and collected money. Where the local towns get a share of that money. We also send another share to a pilot. Yes. And that's a decision for us to decide whether we want to do that or we don't. Right. And whoever drafted the bill was. Is that a motion? Pardon me. We moved it and we treated it similar. And we sent 70% to the island. So they didn't only keep 30% minus five bucks. $5.96. Same as. Same things. I believe the testimony from a league is. That they would like it shared. Equally. That it not be divided up. I have a motion that. It means the town is going to keep all the money the way the bill is written. I'm not surprised by the league. That's of course that would be there. They said it should go to all the town. Yeah. Yeah. Which is 70%. But all the towns can vote. So I don't know. Can I just clarify. I just wanted to remind people of the way that it works. Is the proposal of the bill is introduced and the strike off in judiciary. Municipalities have an opt out. So automatically it's everybody can participate. If a town chooses to say we are not going to allow a cannabis business in our town. Any kind of. It could be any cannabis establishment. So I need the five licensees. So they can. You could write. So they could say we're fine with a cultivator, but we don't want a retailer. Or we're fine with a product manufacturer, but we don't want a farm, you know, whatever it is. And so they can choose and they can put that. But they would have to put that before the voters at an annual meeting or a special meeting. And so if they don't want to participate, they would have to have a vote to opt out and therefore prohibit. And that's the only way that they can prohibit a licensed cannabis establishment from operating in the municipality. They can't do it through trying to use zoning or nuisance or bylaws or things like that. So they would have to have a vote to opt out. And so if they opt out, the way that judiciary would structure this, was that if they choose to opt out and the bill is providing this opportunity for the local tax, that if we put it and say we don't want to participate, then they should not share in the local option revenue. If I vote to have farms and manufacturers, but I don't want retail establishment because the only one is across the street from my middle school, you know, the county store. And that's the one place that's available. Do I share in the tax if I don't have retail sales? I didn't think so. But on the sales tax, you do. On the sales tax, you share in the tax if you have a state facility. So if they're, while you already get money, if there's a state farm, so if the state has a garage or a salt shed or they own property in your town, you get a prorated share. Of this 70%. And you get to keep 30%. No, you get to keep, that's another one. You get to keep, I don't leave this to South Burlington, but they have a local option tax. They keep 30%. They keep 30% of that extra 10 cents I pay. 70% goes to the pilot. And 70% goes to all the other towns that have pilot. And they get it to the tax department. Pilot for those that are uninitiated is payment in lieu of taxes. So this bill doesn't share any of it. Except for a little fee with the tax department. The league has asked, frankly, to share with literally everything. Your motion is to share with pilot fund. The same as the sales tax. The same as what? The same as the local option sales tax. Those are, I think to my mind, the three things that have been discussed. So that would be my... The motion is that the local option tax here be treated the same as any other local option tax. Which is that if 30% would stay with the town. And 70% would be shared with the pilot towns. But that is not all towns. So in terms of this motion of the overall thing, is the 30% that the individual town keeps based upon the sales in that town? Yes. Just like the sales tax. So what was the league was saying? They want all, whether it's 30% or 100% of that 2% local tax, they want all that to be collected and distributed to 200. Even if you don't have a retail or anything. No, the sales tax is not distributed to all towns. The league said they wanted all towns to share in the benefit, but that was as far as it went. We don't have a mechanism set up right now to do that. So that would definitely require a higher fee from the tax department. Unless you piggyback. It might be easier than going town by town as to what your collections are. We should do that now. That's what is suggested in the bill. The bill suggests that all in the bill, and I know you were here for that part, any money the town raises stays in the town on that local option section. Town by town. Town by town. So if you choose, this is an incentive to have an establishment. If you choose to have an establishment, you keep your local option tax, which you vote, and you have to vote out if you don't want to. You keep the 2%. Minus $5.96. Let me just say $6. Make their job easier. They make you round in a B2, the tax department, because they will collect all the taxes and send your 2% back to you. Maybe it's easiest to think about if you want to have a big incentive or a little bit of incentive. I didn't want a big incentive. I have a motion to treat this local option as we do to others, which means it would be divided 30-70 between the host town with the tax, and 70% minus the $5.96 would go into the pilot program. Which means universities and assault ships. Is there further discussion on that? If not, all those in favor say aye. All those opposed say no. Once again, the large towns will take the money, and the small towns will be left out. Actually, I think the biggest place is going to be the small towns in the Connecticut River Valley, because that's where it's not legal across the river. All right. So we're off that one. Eight. So the eight is the Department of Taxes requested. Even though there is language in here saying that all the sales and use tax provisions apply if they're not inconsistent, they wanted to specifically reference the penalties section for sales and use tax. Which means if I fail to send it in, they can do bad things to me. And that doesn't complicate the fact that we're not counting those sales and use tax? No, it's just so that you don't have to duplicate a lot of language. They don't send theirs in. They get the same penalties if I don't send in my sales tax. Okay, so the ninth amendment, one is a pretty small administrative thing. The tax department requested that the returns we do on the 25th day of the month so that it'll wind up with other taxes that was previously the 15th day. And then this is the one that would be a change from what the bill has, which is it would specifically give the commissioner taxes the ability to prevent remittance in cash. So that would be an addition. Okay, and I know they have brought that to us before. There were no medical folks paying cash were there? No. They have not had to set up a vault or arrange for army car deliveries. So did you check in the plan? Yeah, I think we heard there was at least a major financial institution that is statewide pretty much that you could get financial services from. You might have to open it up. I was saying to create a reflective deposit plan so that the government changes that requirement and creates a prohibition, which is not necessarily unlikely to revert back to a requirement that banks cannot which makes sense to have a fallback position that doesn't have to come back to the legislatures. If the federal government were to if the federal government were to prohibit those institutions that are providing credit service or providing banking services from doing so. Well, it's a may. Much more explicit. A may require. A may require. So in that case, they may hunker care, right? May prohibit the revisions. Yeah. And the government may have changed a may require. So if you've got one little mom-and-pop store coming in with a couple hundred dollars in an envelope, you're fine. It's just something that we ought to be doing. That's a good point. Good point. We can't help you out, so. Okay. Okay. So the tenth one is just providing clarification even though you know the rules of statutory interpretation, the specific word from the federal, if there is a conflict with any of the other bundling transaction provisions, applicable to another tax because they have regulations on bundled transactions, this language would apply for the cannabis bundled transactions. Okay. What's a bundle transaction? Oh, this is like if you were going to buy a T-shirt and a other T-shirt. Okay. Got it. Okay. Yeah. The deal was small, electric. So that would start with yours. See what you would try to achieve. So for the record, Senator Spring has been counting. And I hear there's people at S-91, happily. Co-sponsors in the room. So keep an eye on things. But the thrust of S-91 was really, well, I know the committee had, I believe, Christine Alfield in a week or two ago. Yeah. So I believe you've had a lot of, again, some of your general conversation already about the challenge. And when I was on this committee before, I did a fair amount of work on telecom, and certainly on telecom authority, and I would just say all that work, a frustrating record of progress, non-progress. Nancy, this chair over here, if you want to move it. Which has all been corroborated just lately by the statewide drive that revealed how much fee blur of the service is that anyone had approached. So basically this just, rather than assert that we know how to do this, it asks the legislature to require the Commission of Department of Public Service to study the feasibility of asking electric companies to provide broadband internet access service using electric distribution and transmission infrastructure. And then there's a short list here of things that might be part of such a feasibility study, including the maturity of the technology, the compatibility of broadband internet access, the existing electrical service, looking at the bottom of page one, the financial investment required energy provision, the integration of conserved and underserved areas of the state, impact on electric rates, and the use of electric companies. So I'll leave some comments, but let me just keep going here. So in performing the study, then it would walk through a process for conducting the study and making recommendations back to the legislature. And then in the closing section, it lays out working definitions for unserved and underserved. And I don't know exactly where it is in law, but council can have colleagues point to it. When we did this work on telecom four years ago, we named it as a naming goal, 100 megabit per second symmetrical service up in debt. We have seen that. And although it was maybe a stretch goal, we didn't realize how stretchy it was. So I think the one thing I noted passing was that these rates discussed in here are asymmetrical, and I hope the committee will keep an eye on that question because from my experience, when we develop asymmetrical service, it's more about download speed than help. We're creating a system that's designed to sell your stuff for the most part. You can watch movies, you can do whatever. But if you want to create a community value, as in telemedicine, remote highly interactive teaching, the best physics professor can teach classes all over the state about high speed symmetrical connections, but not with a asymmetrical connection. So I just wanted to flag that as something that you might want to investigate as you work your way through. We did, Senator McDonald came to GovOps, I think it was two years ago, and we created a legal construct for communication utilities, and I think EC fibers may be the best known one of those. I don't know if really if opening up the opportunity to utilities is a better option for the state than looking for four more digital domains to operate around the state of Vermont and grow homegrown networks. We figured out it's not just herbs. You've got to have community members with a half million dollars to upfront you, and you've got to have the know-how to put this kind of a deal together. And that's something that every community does not have an abundance of riches down there when it started. The other challenge was the likelihood of take-up rates was somewhat diminished in the federal Vermont because of the more prevalence of cable companies, which might also generate some more resistance. The other thing, you know, in utility law, generally, you can't cost up some time, so old gas and electric companies had to be careful to bring them to the gas service, such as their electric ride. So if we're now introducing another level of service that a utility, not the utility's offering, how do we make sure that we're not running a file of cross subsidization so how the rate structures can develop? The other thing is there's questions around rate-based. So with utility, it makes a capital investment and they can build it into their rate-based at a greater return. That's a very unlevel playing field compared to asking some independent or self-funded group to show up and fund their infrastructure investment when they can't rate them, so they have to go out and sell it and make their money in real time. On the serve, it's not a kind of a greater return. When the other thing that came up as issues, as all this kind of work has been done without having the utility, having an ownership or service role, was the issues around make ready, the making in coal ready to carry fiber, even though it's only by somebody else. Sometimes things have to be moved on coal to make space on the coal where the fiber people run there. Make ready has been a bit of a bug of me, so I don't know the current status, but it would be something we're familiar with actually. The other thing is, as drafted, it was really responding to a Kristinaupus idea that we all heard about this summer and fall. So, you know, it's drafted as electric distribution transmission. So, I wonder about, when we say transmissionally, also inviting adult owners to participate as a pure transmission utility, they have, I think, a large fiber backbone type that I don't know if they are allowed or do offer any of their capacity to others. We're asking them to come in and just talk to us about fiber. Even though it's not holes and wires, when I think about something like for my gas, I don't know what kind of communication infrastructure they built out. I don't know if there's any reason to leave other utilities out that might be interested partners. And then last I was thinking about, we do have folks like besides EC-Fiber, Burlington Telecom is another example of someone deciding that they want to build infrastructure. I don't know enough about Burlington Telecom, but the point was to sort of open the discussion to find other partners who might help address this perpetual, underwhelming build-out of infrastructure that provides service. And there wasn't an CSL or a BISOC internet about other states authorizing, so I asked Maria to see if she could find out about that. If there's broadband strung out there, or wire that's, you know, bands that are available, we should know about it. I know that when there's been huge labor, there were maps at that point, I'm sure there must be still, with all of our fiber, AAMs, including how much dark fiber is in unused fiber. I think they used to lay 144 fibers at a time in the signal cable and then, you know, necessarily what they might want. But we're still trying to find out where the fiber is, not about how much it's used. Okay, Senator Pearson. This is intriguing to me and I appreciate your effort. One of the things that I remember from when Christine was in here was this notion that utilities ought to string the fiber but not provide the surface, that it all needs perfectly open access, sort of, to the least. I think that had to do with that guarantee return. Well, I guess I'm wondering, I don't see that itemized here. Do you care, do you have an opinion or anything? No, I mean, I don't know what would make sense as a business model to them, if they would actually build and own the infrastructure and just lease capacity on it or if they might build and sell and somehow offer maintenance to somebody else. She was talking about build because they can get better rates of interest in better terms because they have a guaranteed... And they don't have this... Yeah, but I think that might cross over into some of the cross-subsidization or some of those other issues, but it's worth looking at. So I haven't kept pace with the industry, and I know it changes fast, but I think, as I remember, the sort of default running, quote-unquote, running fine without wide-gown poles involved this bunch of 144 sort of a standard never. Maybe that's not true anymore. But the point was that the utility would want to have communication infrastructure for itself, would have a vast amount of capacity left to sell or lease or whatever it was to somebody else, and maybe it's another income stream that helps in some way reduce costs of service. That was a conversation starting... That's what we're all looking for. Maybe it's interest. Thank you. This is about operating the government. For... Charter changes. Charter changes. We have specialists on that. It's time to get our rubber stamp. Rubber stamp. Thank you very much. Okay, thank you. Maria, do you want to... I don't know if we have... how much research you've had time to do on this one. Is it your bills? No, the next one is mine. Remember, we had the public utility power people in and they need PUC permission to buy a coil of wire or a new high lift, and that's the one that's coming, is that bill. This is... But I did ask Maria to take a look at just an article that popped up on the NCSL today website and it looks like other states who may not have our system are looking at least at... If there's five or out there, why aren't we using it? The floor is yours. Okay. Maria Royal with legislative counsel and just a couple of things I wanted to mention in terms of the study it's at, it's 91. It does contemplate that the co-op or the utility, so it could be an investment utility might provide the service or might lease capacity. So that is included in the study as an option for consideration. So I just wanted to mention that. And then in terms of what's happening in other states you had referenced a particular bill in Georgia, HB 23, which has the House, February 11th in Georgia has not been enacted at this point, which allows electric co-ops to offer broadband either directly or indirectly by contracting with an ISP or establishing a broadband affiliate to operate and provide service. Interestingly, and I did not know this when I first started to look into the issue, under Vermont law currently the electric co-ops are allowed to offer broadband service. I don't believe they're doing it. And that provision of law was enacted I believe in the year 2000. There is a significant prohibition on cross-subsidization which comes up everywhere at this issue of the costs of the broadband service not being allocated to the electric rate painters and making sure that the accounts are separate. The Georgia bill is very clear about that and has all the provisions and there's even a private right of action for members of the co-op who believe that there has been some cross-subsidization. So there are additional protections should you want to go forward that you might want to consider adding to the Vermont law. The only other thing that I will mention because it is significant, there's a lot of federal money available right now for broadband build-out available to the electric co-ops. Under the Vermont law however there is a restriction from the co-ops actually taking money from the universal the rural utility service to finance build-out. Do you know why? I keep speculating. I don't know if it's a competition issue wanting to ensure the providers, broadband providers there isn't some unfair access to federal money public dollars that might... I don't know the answer I'm speculating but that is something... Well if we did that in 2000 the broadband world was very different than it is today. I don't think we've got too many nice flat valleys with towns in them that don't have broadband. I think we're looking at where the old co-op electric utilities took which is the hills and the dales and the places that are harder to get to and it might... People have Washington County electric co-op come in just because they're one of the larger ones and they are definitely rural to see what they have to say because they have a customer base who I think would support this I don't think they can tell us why they haven't done it. And I did look just more generally at the national level how many co-ops right now provide broadband or contract or lease capacity and the figure that I found but I haven't been able to confirm it is about 100 electric co-ops nationwide or current nationally. So about 100. So I'm trying to track down where they are and then I can look more specifically at how those states really... We would think for us that the similar states will probably be the ones on the east coast with mountains and West Virginia, you know, the southern Tennessee those areas, they have more big open flatland than we do because they run east to west and we run north to south right down the middle of the mountains West Virginia is probably the one closest to us but how do we... Yeah, see if anybody can help us figure this out. I'll see what I can find out. The only other thing I was going to say is this study was modeled after a Virginia study that was enacted last year. That study was to be done by the distribution of utilities themselves not the regular utilities. The utilities themselves did this study. Yes, yes. And so several of those reports have been filed to the extent you want to see what some of the responses were from those utilities in Virginia. Is there any enduring themes like it costs too much or why bother? Is anything kind of coming out as a common thread through those? I've only looked at a couple. Two of them. That's not enough. I don't know how many were submitted. I think the big issue is cross-subsidization and then just whether the economics actually work. And then making sure the laws are amended to allow for the... that there are no regulatory sentiments. Yes. I think you were saying that I could be wrong that Topson Telephone and Fairpoint is Telephone and Waitsfield is Telephone Companies. And when you try to go up on those polls it's the Telephone Companies that own the polls, is that correct? As opposed to other towns that the polls might be on like Green Mountain Power or Washington Electric Colour. Is that those two? Yes. I'm not sure what was the question about whether it's being strong now with utilities? If a utility wants to do it to be in the business they have an advantage if they own the polls. Washington Electric would have a different reason for doing it because it's a co-opt in Green Mountain Power. But if you were trying to like E.C. Fiverr that went into an area that didn't have a lot of broadband and was just an advantage they had to make deals with the local telephone companies and not electric companies. And I think that is happening. There are some joint ownership of polls between electric and telephone companies. The central Vermont area that's trying to jumpstart or get started did pretty much Washington Electric polls or Green Mountain Power on the main roads. They're very, but you get up into the hills and up that road that turns into Washington Electric Colour. You kind of go north and west. Different oligarchs would have different interests. Yes. I think this is looking at municipals and at the fact that since the advent of smart meters municipalities have been putting up fiber. And they're only using a couple channels. Perhaps they could write down a few. I think it's looking at what's there already as part of the concept. And I think you reminded me of something that I do now recall from reading some of those reports. I think in Virginia what was not obvious necessarily the method of the study but what became obvious when I looked at the reports what most utilities were contemplating is this access to middle mile fiber. And you're right, a lot of electric utilities in modernizing their grids and allowing for smart meters and installing fiber between all their substations the availability is increasing and it's taking advantage of perhaps the opportunity of not only modernizing the grid system but also opening up access to broadband for customers and oligarchs. Okay. So this bill asks Michael. You said something about there being a lot of federal money available that the co-ops can't access it. So who can access it? Well the co-ops in Vermont. There's a Vermont law that specifically says let's see if I actually have the language. That's a Vermont law. It's a Vermont law. So it says non-electric activities shall not be financed by loans or grants from the RUS for any successor federal agency. And there's about 600 million dollars of RUSO head. Why aren't those co-ops? We will figure that out maybe the Public Utility Commission could see if they could figure out why we did that. I have the bill final from 2000. Okay, that won't be good. There's a lot of information. So I can learn more from that. Okay. There's a prohibition on this public stuff that was passed shortly after Burlington ran into its financial difficulties. Is that... That may be it. I think this may be pre-dates. It was 2000. Okay. We will figure that out. I want to march in the clock and we still have the captive insurance bill. So we got one more of these. Can I ask one quick question? So how much were you studying like this cost? So there is no... I think that's a great question for the department. I don't know how much it will cost. And there's no appropriation attached to this legislation. It will go to the wall next door if we do something else with it. Okay. Next one. Municipal Utility Capital Investment. We had these folks here earlier. My understanding is that the Public Utility Commission came back with some moderations other than just saying that the original bill I had drafted. So I asked to have that change to reflect the request from the Commission and bring it to you. So at this point... Yes. I think we're... So the draft that you should have in front of you or in your file looks like this. It's actually a proposed committee strike all amendments. They have folks. They have introduced them. So this is basically the bill as introduced and the language that's new that has been proposed by the Public Utility Commission is bolded. It's bolded. That's on the top. Yep. Yep. So just as a reminder, this bill concerns municipal electric companies and the Vermont Public Power Supply Authority which represents at least 12 of the municipal electric companies. It concerns bonding capacity at the municipal level and also through the Vermont Public Power Supply Authority. So... And I know you've heard about this already so I don't want to repeat everything you've heard. But this briefly... So section one concerns the municipal indebtedness generally. And then the proposal is on page three of the bill and it's specific, again to municipal electric companies and this has to do with whether or not they need voter approval because in general when a municipality issues debt it needs to get voter approval at an annual or a special meeting for that purpose. At least over a certain amount. Well the proposal here is to have a threshold below which you would not be required to get voter approval but the legislative body of the municipality can make the decision and the proposal is, you can see under the bottom of page three so notwithstanding the provisions of subsection B which requires voter approval a legislative branch of the municipal corporation as defined, this is the municipal electric companies may authorize by resolution the issuance of bonds in an amount not to exceed 50% of the total assets of the municipal plant without the need for voter approval. If that goes on and this is a proposed amendment by the PUC to specify that nothing in this subsection shall be interpreted as eliminating the requirement for approval from the PUC. So this is voter approval at the municipal level. There's another statute that deals with one of the PUC. And I think we heard that if the PUC doesn't take you up until June then you have to wait until next March or hold a special meeting to which generally no one shows up. And so this would eliminate if PUC gives you permission up to this 50% threshold you won't have to get the second quote. Right, two issues, a timing issue. So actually we can look at it maybe it might be helpful just to jump ahead a little bit. So if you look on page five so this is now in a section of all the concerns to issuance of bonds by all regulated utilities or all companies subject to the jurisdiction of the PUC. And if you look on in subdivision C3 this is what was a bit perceived to be problematic. If the PUC issues are ruling in accordance with subdivision one so if it gives consent to the bond issuance or doesn't rule within a specified period of time municipality must and that existing law is subsequently obtaining voter approval. So the problem that was raised was that having to do with that way as opposed to getting voter approval and then be able to issue bonds as soon as you get that it would help to enable municipalities to take their vote at the annual meeting rather than holding a special meeting if the timing doesn't work out so there's a timing issue there. So this just lets it be either side of the... Correct, yes. So if it's required if you need voter approval because now you don't but with voter approval if you are below the threshold that can happen at any time. So in this committee as you were discussing it says a municipal corporation that means township or a water district or a town that has a municipal electric grid is that what we're talking about? Yep, so it's defined the actual reference is to a municipal plant as defined in title 30 section 2901 those are electric companies municipal electric companies so they're the entities that are being released like being located within a discrete not part of a larger correct, they're service territory or even part of the municipality within a greater town is that what it defines? I don't know all the service territories of the current electric utilities I think we've got a list of... You represent those things? Yeah. Okay. Melissa Bailey from a public power supply authority so we have 12 municipal members do you want me to describe who they are quickly? I'm not sure what questions be asked. Is this what we're discussing? Yes. We're discussing something else. Yes, the electric, the 12 north bill Yeah. Yeah. Thank you. Yes, this is not to be confused. Not to be confused with a central... Central, yeah. No, this is the small municipal municipal but they are generally they are separate they have a separate board of directors and they are revenue based I believe any bonding they do they're enterprise. If I remember correctly. So then so we've just talked about it the timing issue of voter approval that's required so now on page 6 in terms of when you need the PSE's authority or consent we looked on page 6 beginning on line 7 this is a proposal from your PUC you don't need consent if you issue the issue of bonds or notes without the consent provided the amount of the issuance plus the amount of any bond or note issuances during the previous 12 calendar months does not exceed 20% of the municipality's total assets so you're looking back to see how much total debt the municipality might incur can't be 20% of the municipality's total assets and then also after the proposed issuance the total amount of the municipality's outstanding bonds, notes or evidences of indebtedness would not exceed 50% of the total assets so this says that you need to go buy a pickup truck for your municipality utility and you can do that without a both or without PUC permission provided that in the previous 12 months you have not bonded or borrowed for 20% or more of your assets or that your total indebtedness does not exceed 50% at the 50% then you fall back to PUC and voter approval not voter approval this second condition just for the PUC just for the PUC in this provision here it seems to switch to the municipality's assets is that intentional that we're not talking about the utility anymore that is owned by the municipality but their entire assets I believe that's correct and what the verification B we're saying you can't have a total debt load of more 3% total assets and A we're saying in the last 12 months in the past year we'll have a process by the PUC and then the other thing I just didn't mention because we kind of skipped over it but back on page 4 in section 2 this just exempts the Vermont Public House priority altogether from having to get PUC and the approval for their bond issuances and they are the association they are the association similar to a bond bank and they issue their own bonds we will have the representatives and the utility the PUC we'll have you in next week and you can tell us yes no or maybe on this stuff can I just ask a quick clarifying question for you on the bottom page 3 where it talks about the issuance cost shall not in an amount not to exceed 50% total assets that's where avoid the public vote in this draft the very last line there 21 not to exceed 50% of the total assets set in a municipal complaint so that's the utility when we say total assets that measured their debt as well like the debt come off you know if they have assets of 100 million and debts of 20 million do we consider their total assets to be 80 million or see what I'm saying are you now talking about the later the trigger for the munis for no voter approval is that they're not trying to borrow more 50% of their total assets of the municipal plant right so the utility that means I'm assuming plant is BED my question is if BED is carrying out a debt does that get reflected in the term total assets it might make things do any of the interested parties want to testify on this I know there's been a lot of give and take are you we're happy if you want to take two minutes we're happy to do that we're talking about just the municipality so not the overall municipal debt okay Jamie what come up just tell us who I know David Jamie Howard and thank you for this bill was drafted we had some representatives here exactly the line truck time we're talking about the utility condition and so this draft here is sort of a consensus product that will bring them to you for your consideration in essence the two-step sort of provision is really a short term and long term sort of limitation on the borrowing if you recall I think Senators Brock and Sir I can use this utility has no outstanding debt they could bond for a pretty big amount correct and the PUC has the same sort of concern so that's why you have this 20% initial cap looking back 12 months so you're always going to have that 20% limitation so if the utility wants to bond again maybe two years down the road they'll look to see what's outstanding they'll have the 20% immediate cap but the overall cap could not exceed 50% and when they hit 50% then they have to go to the public vote and to the PUC the normal rules will apply they can move that vote around so they can do the vote before they depend on the time of year and what they're doing they can move the vote to a more convenient time In my understanding when counting the total debt or the total assets current liabilities including bonds are not counted I didn't spot that so what we're looking at is that the electric utility and for instance 10 million would be like the midpoint of our 12 matters so if you own 10 million and assets you could borrow up to 5 million so the senator questions the assets don't directly take into account the debt it's a comparison between debt to overall assets it's total debt to total assets so in a year you can borrow up to 20% of your total assets and overall you can borrow up to 50% of your total and just I do not think that there was supposed to be a distinction between a municipal plan defined as the electric company and overall municipality which came up in the amendment but I believe those are supposed to be consistent you're always looking at the electric utilities assets not the overall municipalities assets just with the electric companies it's like water districts within the town municipalities actually unto themselves I think it could be it could be just a difference in the terms that you used in title 24 versus title 30 okay I assume the commission is okay with this since we took your amendments okay alright where did the 50% figure that's a pretty big jump from ass filters for 10 grand to 50% that's a 5 million that strikes me as a pretty big lead I'm curious sure we did do some research nationally around what kind of debt public utilities you have our ranges our utilities carry anywhere from 5% to 65% of indebtedness currently acknowledging that some of the utilities have about a million dollars in assets are smaller ones and so we wanted the discretion so that they can still borrow for equipment like a lot of them it would be in the hundreds of thousands of dollars so it was striking the balance between giving them some latitude to conduct routine utility business and make purchases that are routine without having to burn with debt