 Welcome back to Capital Beat, a joint project between Orca Media and the Vermont Press Bureau. Joining me as usual is Joshua Gorman of the Vermont Press Bureau. I'm Neil Goswami. This week there was a pretty big pot hearing in the House chamber. House lawmakers were trying to hear from the public about this pending legislation to legalize marijuana. Josh, you were there. What was the scene like in the house and what did they hear? Well, it was no pun intended a joint hearing between the House Judiciary and the House Government Operations Committee. GovOps is probably going to get the bill assuming that it gets out of House Judiciary maybe next week. Okay. So there was roughly about 60 people that offered testimony. Of those, like 34 roughly, I think were in favor, 19 were against, and five were undecided. And of those people that were opposed to it, these are people, many of them, like favored legalization in theory, but we're not happy with the way that the bill is approaching it. For example, the bill prohibits people growing their own for personal use, instead setting up what some people refer to as a monopoly, in which if you have up towards $25,000 for a non-refundable application fee, there's no guarantee you're going to get your license. Right. So this is really, really thinned, they heard, I guess, the people who are going to be able to do this. There are also people who were opposed to the fact that it bans concentrates or tinctures. We heard testimony from a woman from Weston who's a medical marijuana patient, and she uses a tincture rather than smokes. She talked about mixing it with alcohol and making a substance. Yes, yes. So basically, it's THC-infused alcohol, and she said works best for pain management. Okay. And under the terms of this bill, that would be abolished. You would be allowed to do that even as a medical patient. However, in general, people were pretty, pretty positive for sure. They alternated pro and con, pro and con, and the cons ran out long before the pros did. Yeah. So we heard a lot of the same arguments, which is, hey, it's already here, it's already in our state, it's already legal. Let's get some tax revenue and take this money out of the hands of the black market. We heard a lot of the similar contrarian arguments, which are this is bad for our youth, and this is going to make our highways less safe, and there's no way to accurately test to see if somebody's impaired. So those are the arguments that we heard last night, which pretty much mirror the arguments we've been hearing since January when this thing first started out in the Senate. So we're thinking maybe next week, the House Appropriations Committee will actually get down to whether or not it's going to advance. That'd be the judiciary. Sorry. That's what we're looking at. And my understanding was, we were going to take three weeks on it, and now Friday, the end of our second week. Okay. So I think you do need time because roughly we've got about a month left in this session, as I understand it. So it needs time to make its way through the other committees as well. Okay. And very briefly, the House also passed a property tax bill. Without going too far into the weeds, what's going to happen? What's the outlook? Basically, the upside is the residential homestead property tax rate is going to be going up by .2 cents, and the non-residential and commercial is going to be going down by .5 tenths of a cent. All right. Very good. We'll be right back with House Speaker Schaff-Smith to talk about some more issues from this week. Welcome back to Capitol v. Georgia is now, as promised, is House Speaker Schaff-Smith. Great to be here. Thank you. Thank you. Earlier this week, an issue sort of took off when it became widely known that 13 dams on the Connecticut River are being put up for sale by TransCanada, who purchased them in 2005, when the state declined to really make a competitive bid on purchasing them. You have been one of the most outspoken proponents of the state exploring potentially purchasing these dams again. Why is it so important for you and others? The governor has expressed interest. Even Treasurer Beth Pierce has said this is something the state should take a real look at. Why is it so important for the state to explore this possibility? Well, I think it's an incredible asset for the state of Vermont. You don't need to look any further than our neighboring state, New York, that has an authority that owns a fair amount of generation capacity at the hydro level and how it helps them. One, it really creates a green portfolio for them, so their energy is very, very renewable. They use it as an economic development tool. They have low industrial rates, and they are able to attract industry as a result of that. So I think it's an asset that is really worth our looking at. Now, the economics may not work, but I think the last time we looked at it, we had an administration that was skeptical about the idea. I think we may be in a place where we would be more interested in buying it this time. It's basically a once in a generation opportunity. I think that it could define Vermont's economy and its energy portfolio over the next hundred years. There are 13 dams in total, Bellos Falls, Vernon, and Wilder, I believe. I think it's 460 megawatts of total output among them all. In 2005, as we mentioned, they were purchased for $505 million. If you just need basic inflation, we're talking about a significant increase in cost. We're in an economy now where the state revenues are not increasing as much as we'd like and as much as they have in the past. So what are some of the questions that you personally would need to have answered to have this make economic sense for this day? First of all, you need to know the kind of income that this would generate. This is a different type of capital purchase than one that the state would typically make because there is the income generation potential for it. What you need to do is have an understanding of what the valuation of the dams is based on a historical income analysis as well as a forward income analysis. That will really help us understand whether we can even justify putting out bonds for it. I think the other analysis that we need to make is what do the energy markets look like right now and what do they look like on a forward basis? We would be making a bet that there might be a carbon tax in the future. If there was a carbon tax in the future, those assets would increase in value significantly. So I think that what we need is a rigorous analysis. This is not something where you just say, oh well, this seems like a good asset for the state of Vermont. Let's go bond for a billion dollars and buy some dams. It really requires putting pencil to paper and really getting the numbers done. You mentioned bonding. Is that really the only realistic way for the state to move forward with the purchase? I can't see us consummating any sort of transaction like this without significant bonding. It doesn't necessarily have to be entirely state bonding. We have a portfolio of bonds called private activity bonds that we might be able to use in conjunction with a private partner, allowing us to have an interest in the dams but share it with a private partner. So there are a number of different options that we could take in this. I think what's most important is understanding when you have an opportunity and saying we're going to look at that opportunity. What I think happened in 2005 was a half-hearted, forced look at an opportunity that the governor at the time didn't want to take. I think that colored the decision that we made. You're referring to former Governor Jim Douglas, who has been pretty clear that he didn't think it was a crime. He actually, I spoke with him on Thursday and he still says he believes that energy generation and distribution should remain in the private sector. We have a governor now, Peter Shumlin, who expresses interest. A treasurer who has expressed interest. A leader of the house who expresses interest. Who will need to sit down in a room and actually hash out a way to move forward on this? Well, I think that all the people you've identified it will need representatives of the governor, the legislature and the treasurer's office. And then we'll also need a fair amount of support from outside of the building. People who really know how to do a business valuation. And those are the things that we're going to have to do. Now I'd like to just reply to the idea that power should be owned by private entities. We have a long history in the state of Vermont of municipal ownership of generation assets. So the idea and in many instances, we consider it to be a great strength of the state. So, you know, I don't share the view of the former governor that just because it's private ownership, it's good. I also don't believe that just because it's public ownership, it's good. I think in individual instances where there are advantages to the state of Vermont, we ought to see if we can take that opportunity. Now, I'm assuming you and others who are supportive of exploring the purchase will change your minds if it's a losing endeavor in terms of economic outlook. What if it's a break even? Is there a point of sort of return on investment that you would need to see or is breaking even enough of an incentive? I think that if it was a break even proposition on the current set of factors, given the fact that I believe within the next 20 years will probably have some pricing of carbon. I think it's worth taking a risk because I think those dams will have upside potential. And so my sense is tie goes to purchase. Okay, fair enough. There's another issue sort of winding its way through the house right now that's been installed independent contractor bill, which is in essence how employers define who an employee is and who a independent contractor is. There was a pretty overwhelming I think a unanimous vote on the bailout of committee and yet you wanted it recommitted into committee for more time. Some people disagree thinking they did their work, they came to a bipartisan or dry partisan consensus and it should hit the floor. Where are we with this bill and why is it not ready for prime time in your view? Well, so another committee that has potentially has jurisdiction over the issue that's labor related committee had a majority vote against the bill. And so what I saw was a potential conflict between committees coming to the floor. And typically, when that is potentially going to happen, we need to see whether we can reach some sort of resolution between the two committees. So I think it's important to understand what this bill is about. To some degree, this redefines the relationship between employers and employees in a country where people haven't had a raise for 15 years when you look at their real adjusted income. And when people are feeling like they're falling further and further behind, and in a country where the employer employee relationship used to define what the social safety net looks like, I don't think we ought to move precipitously in a direction that would redefine that relationship with the possibility that we would cut further holes in the social safety net. And so I want to commend the Commerce and Economic Development Committee, because I think they are taking on an issue that reflects the changing realities on the ground. And I would like to see a bill moving forward. But if we're going to move a bill forward that cuts more holes in the social safety net that we already have, then I don't think that's an acceptable option. So, you know, I've had a lot of conversations with the chair of the Commerce and Economic Development Committee. I went and spoke with them yesterday. It is not unusual for there to be conflict between committees and for a bill to take some time before you have a vote on it to see if there can be some resolution. Ultimately, I'm committed to a solution to the problem, not a statement kind of bill. And what worries me is that some people are more interested in a statement than actually trying to solve the problem. So you do see a path forward for this legislation this year? I am an eternal optimist. And so I always believe that things can go until they can't. All right. We've got five, six weeks perhaps left in this session. Josh sat through a public hearing on marijuana last night. I'll let Josh describe how that was. And perhaps, you know, having attended a lot of these public hearings, I found it to be pretty pretty civil, definitely more civil than the gun debate last year. In general, we heard the same arguments we've been hearing, I think at least since since January. What do you see right now? I understand that this thing might potentially be coming out of House Judiciary next week. Do you understand that as well? Well, I haven't had a chance to debrief with the chair and the vice chair of the committee. You know, I think what you hear from people is an acknowledgement that the policy of prohibition does not work, and that we are likely to move to a legal and regulated market. I think the question that many people have is, is this the time? And is the structure that has been put forth by the Senate the right structure and does it address the concerns that have been raised, particularly about youth use of marijuana as safety on the roads? I think those are the issues that the committee on Judiciary is grappling with. Whether those have been fully resolved, I think it's an open question. I'm going to work with the committee to see whether there's a path forward. As I've said in the press a number of times, I don't think that the bill in its current form has support within the House to get all the way through. Any other surprises coming our way in the next five or six weeks? Well, if they were surprises, I wouldn't tell you the most. Fair enough. Anything we can expect in the next five or six weeks? Well, I think one of the surprises is that we're pretty much on track to get out of here early May. And, you know, with a relatively difficult budget and with some thorny issues like paid sick leave and the marijuana bill, the idea that we were going to be able to get out on time or before actually we were scheduled to be there is a good thing. Last session last year we saw at the end some back and forth over various taxes. Do you see any potential questionable items either in the tax bill or the budget that might cause tension between you, the governor and the Senate? I'm sure that there are. And my sense is that they're not as deep or problematic as the last couple years. And last thing, there's been some bills dealing with tobacco in the House this week. The House voted for 92% excise tax on e-cigarettes. I guess on Tuesday you'll debate raising the age to purchase tobacco to 21. Why so much focus on tobacco stuff this year? Is this just driven by membership? Yeah, there are people who are really concerned about not only increased smoking tobacco use, but the significant increase in the use of smokeless tobacco e-cigarettes. You know, I think that what's important to think about is years ago nobody really thought that PFOA, which is now considered a pollutant, was that significant and it was problematic. And I think people have real concerns about whether the same thing may be true for e-cigarettes. There is some pretty significant chemical content to those particular devices. And I think people are concerned about the health consequences in the future trying to put some price on those items to discourage use. And do you see a path forward on Tuesday for voting in favor of raising the age? I think it'll be close. I don't know whether it'll pass. Alright. House Speaker Shep Smith, thanks for joining us. My pleasure. Alright. And that'll be a wrap for us on Capitol Beat this week. You can tune in and watch it on Orchidmedia.net or vermontpressbureau.com. Thanks again.