 All right, everybody. Welcome back to the House government office. It's very fair as committee. We're here this afternoon to hear a walkthrough of the Senate proposal of amendment to H270. Thanks for being with us, Michelle. So good afternoon, Michelle Trial's Office of Legislative Council. And because this has not yet passed the Senate, you'll be taking a look at the Senate Economic Development Committee strike all amendment that you should have as well as an individual instance of amendment from Senate Finance and then Senate Appropriations voted it out without amendment. So I'm going to first just walk you through the Senate Economic Development Amendment and I'm just going to focus on the changes. So going to the first change is on H2, sorry, H3, sorry. So there is a new section 3 that was added. This was requested by the Cannabis Control Board. This is just a technical amendment. So this is amending the language for the Cannabis Regulation Fund. So remember that's the fund where all of your licensing fees, application fees and such go into and for FY24 and 25, you're having excise tax money go there too just because the fees are not covering everything in terms of the rollout. And this is just a technical amendment you'll see in line 16 and 17 is that it just refers to currently that it's the monies from the fees from the cannabis establishments, the adult use market that goes in there, but it's actually supposed to be for the medical registry and the dispensaries as well. And so I think that that was just an oversight at some point. So that's just a technical. Next change is on page 5, section 5. And so this is amending the section with regard to regulation by local government and there's just some clarifying language that has been added. And if you look at page 6, there's two things that this is doing in subsection C. You'll see that prior it says that prior to issuing a license to a cannabis establishment, the board has to ensure that the applicant is obtained a local control license for the municipality if that's required. And the new language adds unless the board finds the municipality has exceeded it's a 30 under this section. So municipalities have very limited authorities with regard to regulation of the of a licensed cannabis establishments that is regulated by the board and that's already set forth in statute and that this is not changing it with respect to that. However, you'll see there's some language that has been added to clarify in subsection D where it says in current law, municipality shall not prohibit the operation of a cannabis establishment within the municipality through an ordinance or a bylaw. And that was adopted in 2020 when you set up the adult use system. And the idea was that when you enumerated the things that a municipality could do, you wanted you wanted to clearly set forth in statute that it was not within their purview to essentially prohibit these establishments if they met the requirements under state law and could be licensed under state law. And what the board has seen and they can speak to this a little more is that while some towns may not be putting it directly in their local laws to say these types of businesses are prohibited, they are creating requirements within their bylaws or ordinances that effectively prohibit them. So if you're creating such a high bar that they can't meet that then it's kind of enforced and it's having the effect of banning them without specifically saying that they're prohibited within the municipality. And I think the board can talk to you if you want to talk to you a little bit more about that. So I so subdivision D1 in that added language is just a clarification of the existing language because that wasn't that D1 originally the intent was that not just that you can't say specifically in your ordinance cannabis establishment is prohibited. It's that you can't through the use of your ordinances and bylaws effectually prohibit them through creating such restrictive bylaws and ordinances that they can't comply. That's representative. Who's the ultimate authority in deciding whether or not that is the case or that's been done? I'm sorry I didn't hear the second half. Who's the ultimate authority in deciding whether or not that's happened in this case? Well this is so there's two layers so if the local if the local municipality decides to regulate within what they're allowed to do under current law then the the licensee would have to get whatever local license or permits at the local level. And then right now the way that it is is that the board CCB would have to ensure that they've obtained any required local permits before they issue the state permit. And what this is doing is saying that that the board up in subsection C is that if the board determines that the municipality has exceeded its authority under the statute and has gone beyond what they are permitted to do under statute then the board can go ahead and issue the state license. So that really takes the some zoning authority away from town that they currently have or could. I mean I think this is section is not changing their authority so it's not changing what they can do. It's just saying that and you know I don't want it it might be best if you want to talk perhaps to the board about what they're seeing and and the concern about whether or not some municipalities are complying with the spirit of the law currently. Other questions about this I think these questions about municipal control are tricky because we're saying that like a liquor control board the municipalities can have cannabis control but what we're really saying here doesn't really have to do with that it's about the use of their ordinances and bylaws to just make it impossible for. Exactly so if you created such a high bar that nobody so if you said you have to have a 200 foot setback you can't have any odor at all at the property line. If you like if you say you can't you if you if they create such a burden on there that it's essentially impossible to run a cannabis business and comply with those provisions and the the and you're effectively prohibiting them through having such onerous provisions then then the the that's not allowed under D under existing law with that clarification and then in subsection C if the board finds that the municipality has exceeded its authority in what it can do like if it's perhaps adopted something that says you know there's certain putting certain requirements that they're not that they don't have authority under this provision of state law to do then the fact that they didn't get a local license at the is not going to prevent them from getting a state license if the board feels as though they've exceeded their authority under statute. That's very clear. Questions about that from the committee? So next section is section 6 and this was added to the Senate Economic Development Amendment at the recommendation of Senate Agriculture. So last year the General Assembly provided certain benefits to small cultivators so cultivators of thousands per feet or less and they get certain benefits of farming without getting the whole panoply of benefits and what section 6 does is it expands that to apply to all outdoor cultivators and so if you look at page 8 you'll see the language on subsection F right now it's limited to small cultivators but that is striking the word small but it still is only applying to outdoor cultivators not to indoor cultivators and so you'll see the benefits on page 9 around ability to enroll in current use something that's changed there is that under current law the land already has to be enrolled in current use that wouldn't apply if if this language passed they wouldn't be regulated by municipal by-law in the same manner that RAPs are not regulated by municipal by-law they'd be regulated in the same manner as farming so they'd be exempt from Act 250 and then also they get certain sales tax benefits and then you'll see in subdivision 5 they're they're entitled to a rebuttable presumption that cultivation doesn't create a nuisance under the right to farm law there is a fiscal note on this I don't know if Andrea has has a link to that but you can probably find that either on a house I mean senate appropriations or senate finance a website and link to that for folks so the testimony was that by increasing it from small cultivators to include all outdoor cultivators excuse me that it would be an increase of about eight additional acres statewide so it's that's at least eight yes sorry and I have allergies I'm not copying COVID so that's that provision and so that was the recommendation of senate agriculture and it says senate economic development accepted that amendment I will tell the committee while we're on the section I spoke to chair kornheiser the and chair shelbin who all signaled that that they were comfortable with this number of acreage so out for a grow and that purpose and shelbin brought up in a conversation that it might actually encourage for people to be out to grow outdoor and some of having you know energy intensive indoor I don't know if that's really the case but it's at least one and one benefit is that it just gets treated as agriculture in the way that most other crops have to grow and treated okay so next changes are on page 13 and this is in the accessibility of records for the ccb and there were just a couple technical amendments that's an economic development made in consultation with um and I'm sorry I'm not going to remember their name but the public records person at the secretary I don't remember the names the new name of the I'm sure y'all do hear from her panya sorry uh panya marshal yeah I was going to say straight arguments but isn't it a different name now for the office or something but um so they worked with her because she wanted to just speak the language so you'll see that there's new language and subsection that is just the way in terms that we phrase that uh that the record is confidential or not and so it's just been changed to shall be available for public inspection and copying under the public records but there's no policy changes in here from what from what you passed out page 15 section 12 this is just a new section um identifying the time period for the implementation of the new propagation license so remember that you added a new propagation kind of a nursery license category and this is just saying that excuse me the board has to issue those on or before July 1st of next year okay next changes are going to be in your medical section so there are some changes that um were made at two section 954 with regard to caregivers um it's going down page 20 and I didn't highlight anything on there but um what you had on caregivers remember you're changing from a fingerprint supported CIC check to a Vermont um conviction record thank you um and a check of both of the protection registries the child abuse and the adult protection registry and um you directed both of those agencies to adopt rules for how they would release those records to the ccb but there's already statutes in title 33 are ready for who they can release those records to so instead we've taken up the provision around rules and directed them to release those records and so that's in section 954 you have a new subsection e that's just a statement of the way that it is currently which is that Medicaid funds are not to be used to support caregivers we're going to have to get a glass of water we can take a break I have a couple of parts that I would ask chair pepper if he's going to jump in while we last Michelle hi for the record uh James pepper chair the cannabis control board um I'm happy to answer a question or pick up where Michelle left off um the the amended language um in this medical section was a request of dcf and dale they're authorized to share records with certain people by statute and they just wanted us to be added to that list of people that they can share records with the original language said that they had to come up with rules in order to share and they didn't want to go through any sense of rulemaking process um so you just added a statutory provision that allows them to share these abuse and neglect registry results and the um child sexual exploitation results as well with the cannabis board you know it's good to have me back chair pepper um in a few weeks since we were on this while the senate was working on this bill um I was going to ask specifically to going back to um the biggest change here policy-wise since the the ag which and so I just was going to ask your kind of the um board's position on that so you know it we supported the ag amendment your control on whether act 250 should apply to outdoor cultivation um we really think that's a policy choice for you know the legislature to decide um you know it it will certainly allow existing farmers to use their existing farm equipment um and their existing farm structures to cultivate cannabis um kind of narrow so I think it is in line with the intent of the bill which is to support small local farmers um and so I know we don't know you know we're not 250 experts so we don't know the full scope of what that could do but it was determined by both agriculture communities I think uh to to the outdoor cultivation should be exempt from two things um with respect to um the question around does the change is here um you know the ability for the board to issue a license um even if we don't have all local permits um really it's a very narrow set of circumstances where we would be allowed to do that and it's really if we find that a ordinance that was passed locally had the effect of prohibiting cannabis cannabis cultivation within their municipal borders um and you know you wrote in the original legislation that municipalities cannot do this but we're seeing that they're finding clever ways of making generally applicable ordinances that have the effect of prohibiting cannabis cultivation within their borders and the order was uh was a good one you could say no odor at the border of you know at any property line um that sounds like a generally applicable that it would apply to all agricultural odors but in fact you know because of the right to farm exemptions it only applies to cannabis so and then even even further than that it only applies to high THC cannabis because it doesn't apply to them at the same point so really um I think that amendment is in line with the intent of what you guys passed you know in 2020 that exposes the floor any questions for pepper about those pieces represented waters edits thank you I just have one question about what you just said so the difference in THC in a plant would not affect smell in any way I would say no I mean maybe it's slightly more pungent if it's about three percent but really a hemp plant in a high THC a low THC hemp plant is flowering when it reaches that point three percent so the odor is present uh at that point and then you know maybe it's present at a higher level potentially you know if you're growing it's 15 percent to you but um you know we're talking about maybe like a very short window you know when it's growing maturing from point three percent to 15 percent it's complicated you know it is but just a normal person driving by couldn't tell the difference no okay thank you um the medical section made um the the senate made a so a couple substantive amendments to the medical um that you know we asked for people that are on the medical registry with incurable or lifelong conditions like ms or parkinsons need only reapply for their medical card once every five years as opposed to annually um and again doctors you know healthcare professionals that are citing the form are just attesting that this is a patient in their care and they have this condition not recommending cannabis not prescribing cannabis they're just verifying that that condition exists in the patient that's in their care um the senate felt that that should be reduced to once every three years as opposed to once every five years the annual it won't be an any it'll be once every three year renewal as opposed to what this committee passed which is once every five years um and then they asked for a report back on the medical program um you know I think there was some they heard a lot of the same testimony you did around are the are these the right qualifying conditions are they not is you know should there is there any information about dosing proper dosing and kind of people's tolerances to cannabis especially products that sort of types of conditions may benefit from they wrapped all that into a report and asked us to come back uh with recommendations about the future of the medical program all right so it sounds like the fear of what we had put in there has kind of remained but the knocked down five years three on the registration for those particular patients with crack and life on conditions right all right um I wanted to ask you the line down word I think this is where uh Michelle was just getting to around that's the way it is now right are we just kind of like putting a finer point on it yes okay it's wanted to be very clear all right but no that's not a substance to change the policy at all no any other questions about that piece that I'm popped out I think what is that so I think do you stick it down through the report that's going to help them look they're recommended this is an economic development and it takes you down to such as 22 and 23 um and these work hand in hand with this kind of finance amendments which uh adds such as 23 a and 23 and this goes to um in turn it's all hopefully once and for all the decoupling of cannabis in back up in statute so I think talked about it a little bit earlier in the year in the BAA there was language that was clarifying that um for tax purposes uh any cartridges that contain cannabis are not to be considered a tobacco substitute in tax at the tobacco rate so when the don't use market was set up in 2020 um there was very clear attempts that cannabis taxes were over here there's 14 percent of size tax for the 6 percent sales tax and that's to be applied to cannabis and cannabis products and that was and then there was no discussion of applying the tobacco taxes to cannabis as well but because of some of the definitions that are embedded in the back of the law so you could read into that that being that somehow cannabis might have been leaked in there and so what you have in section 22 is an amendment to the definition of tobacco substitute uh to clarify that tobacco substitute does not include cannabis products um you have something similar in section 23 which is that other tobacco products as well does not include cannabis products and then for your uh senate finance amendment along the same line section 23a um it's a many definition of cannabis product to clarify that cannabis products don't mean tobacco products or tobacco substitutes or tobacco paraphernalia it also um uh clarifies that uh cannabis product does include any device designed to deliver cannabis to the body through inhalation of paper that's sold at a cannabis establishment and that is to address like like uh the devices that aren't like vapes where they're you're using a canvas oil in a cartridge but to eat something like packs which is to burn flour instead and so it's just these are just uh I think clarification technical clarifications uh in accordance with what the original incentive which the whole assembly was so yeah I think they're just uh at the time honestly nobody was talking about tobacco so I think it didn't even occur to us that you could read into the tobacco laws to think that they were applied to do this I would just add that you know if a cannabis retail establishment wants to sell tobacco in addition to selling tobacco paraphernalia you know they have to get the tobacco license this applies to a subset of people they want to sell that are licensed cannabis establishment that are under our jurisdiction they want to sell cannabis delivery devices cannabis paraphernalia and note it's not going to create an incentive which the current law requires for these folks that are selling pipes because again we have 13 million tourists that visit for moderate retail some number of them are going to cannabis establishments they they don't have any way to kind of consume cannabis uh you know if they're selling a pipe they need under current law they need to get its tobacco license and they can also sell cigarettes into that you want to eliminate that incentive from them to also sell cigarettes and this language this this policy was in the bill that you passed but it just took a little bit of clarification um with the tax department and the department of health and liquor and moderating and the administration to make sure we weren't jeopardizing we weren't messing around with any of my jeopardized federal funding and so the 23 the section that's added in the senate finance amendment is essentially replacing section 14 of what you asked which was the language just trying to say that you know you don't have if you are a license caterer establishment and you're not selling tobacco products you don't need to pay the dll license and through as james mentioned there were a lot of conversations between left counsel ccp department of tax health department dll about trying to get this language right make sure everybody was on the same page and it was really weird to look at the senate finance amendment you look at section 23 b it just says very specifically in there i think that the new officials say that um it doesn't apply to a catered establishment that is licensed to engage in retail sale cannabis products but not in dh and sale tobacco products of tobacco so if there was a catered establishment that shows you also sell b6 or things like that then you need to get a dll license but if you're just selling things that some cannabis products they do not need to go so we've removed the incentive for a retailer that is really just trying to sell cannabis products and cannabis paraphernalia if there's any overlap between the use of that paraphernalia for cannabis and tobacco they don't have to get a tobacco license if they're only selling cannabis in that particular product okay as what our attention was as i recall um so it sounds like we uh are all of those did all of those stakeholders share pepper kind of buy in to that senate finance amendment or is there yes i mean i've got emails from all of them they uh just signing off you know Charles Martin from dll and skyler from dll and big lender it's you know monica hut it's all of them have signed off on the language and will be bigger than general counsel from the tax they're all in the record with me um all right now if we've been talking about this with them because the implication on the tax since september or even during last year um so we've been trying to narrow this language in just takes time to coordinate with that many different agencies are there any sections that we didn't hit at all one more oh because we now we're because we went off into the finance amendment and that's section 24 of the economic development and so that is transferring half a million dollars from the end of this regulation fund which is your fund that is made up of fees but for f y 24 24 25 it's also going to be made up of outside of stacks and so it's moving $500,000 from the regulation fund to the canvas business development fund which is to be used for social equity applicants and then transferring $500,000 um out of the canvas business development fund to the agency members of the development fund so you recall that when I came with the legislation was created there was an original $500,000 appropriation there was also a fee there for integrated licenses to stay on into that fund um it's evolving um so this is one time money um and uh because the excise tax will be going to this fund uh it should be for those two years it should so the the funding source for both of these half a million dollar appropriations is the excise times well there's a it's combined so generally that canvas regulation fund is just made up of application fees licensing fees but because the fees have not been able to carry out all the work of the board as you're building up the agency and adding audience officers and all these other things is that um the general assembly has already um designated that the excise of 14 percent excise taxes that we normally go to the general fund for f y 24 25 are going to be going into the cannabis regulation fund so for two years the tax money plus all the fees will be in that fund and so it's all stored up together so but it's just you know it's not taking it um you know the board is short it's just from the fees normally and so you're adding the actual money going there so you could say it's really just coming from the general fund because you're diverting that excise tax for two years from the general fund to the to the canvas regulation fund anyway yeah i think that the the conversations i've had with chair wood and others uh so the committee is aware of is the you know the anticipation of being able to use more revenues from the sale of cannabis um for the prevention purposes and other things that the many folks in this building are interested in but i think the board needs to be able to stand up to the new market in order to realize that revenue hope is so um this is this facilitates that it sounds like that's right well the the money going the excise tax being going into that fund is that's already inches down looks like questions about that both um our colleagues and other committees are going to be looking at the dollars flowing so i'm less concerned about that than here great well any other questions for chair cupper michelle about the words on the page i think um this is on notice today so i don't know if it has a rules discussion or when it's coming to us exactly but i wanted to make sure because there were so many changes that we had a little time ago no no no it's on us in the same yeah so they haven't actually it's been through so many committees now that they haven't moved along so i anticipate getting it for your journey but it's class taken yeah um all right well thank you for walking us through this i appreciate do anticipate any other amendments well brin actually just noticed something uh you know the propagation license and this is actually it is somewhat substantive so you may want to hear about it you know in x164 you created six license types uh cultivation you know product manufacturing retail wholesale um and uh a um integrated license right and um you said uh you know there's obviously six license types and then we created a propagation license um so now there's actually going to be seven license types um and the reason why this is relevant is because you also said no one can have more than one of each type so you can't stacks you can't you know one company can't buy six cultivation you know 30 000 foot cultivation licenses and that essentially has you know however much that is that much cultivation so if a propagate the the idea behind a propagation was to allow um us to allow a cultivator to have clean tested source material to have to be able to kind of purchase clones from a cultivated from a propagator and know that those clones that they purchase have been subject to all of the ccb regulations around testing and microbials and mycotoxins and everything else so then the question then becomes do you want cultivators to be allowed to get a propagation license as well if it's if it's if it's a if it's a type of cultivation license then they wouldn't be allowed to get both is there only allowed one in each type of license so if you create a seventh license type identify it as a seventh license type then a cultivator would be allowed to get a propagation license in addition to you know it's a little bit it's very nuanced because of the way our system is set up is one license per entity rule is the first of its kind no other states do this so you have to kind of have that as your framework when you think about can a cultivator it's a licensed cultivator also apply for and get a propagation license and this definition of there shall be six license types means that if we don't change that to seven that means that a propagator will have to be considered a cultivator and then you'll have propagators that are not allowed to also cultivate so will there be an opportunity to have that including right yes that's a yeah so that's it sounds like a floor amendment for the senate i think but this is wouldn't it just be a technical amendment which is just saying that there's a seven type of license or are you guys saying that maybe it shouldn't be well bring just raised it with me when we're sitting here so i i don't know i would see it as like you just should have added say that there's seven license it's just to add as a final one do you have three places add to the add to the list of six i mean i think unless you have a pop unless you have some clear policy reason why you even want someone who's a cultivator to also have a nursery license then i think this is just a technical saying that because we added a seven license it doesn't be a little process it's a very light talk earlier the year about making sure that we got all the processes yeah just different there's no policy reason not to allow that i would i would say no but you know this is a very restrictive area of the law so represent thank you would that mean that somebody could have more plants more not more square footage but more plants it would be more square footage but they're not allowed to submit your cultivation license and you know the largest tier that's open right now is 10 000 square feet you could get a 3500 square foot cultivation waste or propagation license but those plants have to be sold or you know moved to the market once they flap start to flap it um so you can't just say you can't just say i now have 13 500 square feet of canopy you know a portion of that canopy has to be for immature you know juvenile plants that um that then you could sell to other cultivators or to retail the propagation license itself that those are all none of those immature plants so it is more plants because you could make more revenue of it by selling those 3500 acres or whatever it is right yeah i think you know just i'm sure i'll get angry emails about this but you know the the cost of the clone depending on how big it is and how how long you've cultivated it it could be anywhere from like eight to thirty dollars for a claim and then like the price the pound of you know harvested cannabis is significantly more than this is this is really trying to allow people that are really good at making clones provide clones for the entire industry so people can you know just like you would buy tomato start instead of growing from seed you know just purchase a plant that's already in the works representing so shouldn't we then limit cultivators for not being able to be propagators also i think i know it's a policy decision but that's where my mind is going yes well that would probably defeat the entire purpose of having propagator license in practice wouldn't you know it might it might not be a viable business type originally suggested a nursery license we said that the candidate should be unlimited because of the relative cost price of a star seedling clone versus finished flower and so to really you know 3500 square feet you know you might be able to be a viable business type with just that but really i think this is kind of an ad an add-on to the cultivation but again i i believe it's the committee that created this market really like you know gave us the direction to give us direction on this well we um we have some things that are coming up that we'll have to switch gears to um and we have some more time on this i wasn't expecting to take a position but i thought while we had some time on our schedule before things get too hairy at the end here i wanted to at least see what the senate was proposing to us and start sparking the conversation so i think we've done that admirably i will i would just say one one last thing you don't mind you know our largest license site um you know the 10 000 square feet because we voted to close our 15 000 square foot license um is a tier two out of 11 in massachusetts uh massachusetts the largest license site is 100 000 square feet so you know it's always i think important to keep the scale of what we're doing in vermont and i and i would also mention that 77 percent of our cultivators are 1000 square feet or less so the vast majority of our market is being driven by people growing you know plots the size of these tables you know um that's a very important piece of what we're doing differently in vermont compared to any other city uh thank you michelle thank you chair pepper uh we will probably come back to this once we see more progress on this building center so thanks for giving us a preview of coming attractions uh i want to switch gears here and take up h 291 um which is coming right up for us just made sure i'm really correct about where we are in the process but um becky if you want to take the chair to walk us through the senate's changes to our cyber security council bill so this is um from the notice calendar today so this will be up for action tomorrow so we've got our rules to take it up for some reason thank you washington legislative council i did um send uh side-by-side comparison of the two bills that might be posted on your web page so that might be the easiest thing to look at do you want to want me to wait for you all to find it or should i start i'm good okay great um so the senate proposal of amendment made um a few changes as you can see in the side-by-side from the house pass version um so i'll just start with uh section one which is adding um the new chapter on cyber security and title 20 so i've i've separated out the side-by-side into um into sections of the the new sections that were added in that chapter so starting with section one in the new sections four six six on the definitions the change from the house passed version of this bill is that there's a definition added in the senate for essential supply chains and as you uh you recall from this bill that one of the um but this this definition is used throughout because the council is um looking at the impact of cyber security on essential supply chain businesses so the senate added a definition to refer back to for that and the definition that uh it's used this added here is supply chains for the production and sufficient quantities of the following articles so there's medical supplies medicines and personal protective equipment articles essential to the operation manufacturer supply service or maintenance of critical infrastructure articles critical to infrastructure construction after natural or man-made disaster articles that are critical to the state's food systems bringing food supplies for individuals and household and livestock feed as well as articles that are critical to the state's thermal system and fuels and then there is another section that was added in the bill later on that relates back to um possibly amending this definition and i'll i'll get to that in the moment so then um in section one still in section the new section four six six two which is creating the advisory council there was just a small change made in the senate to the purpose of the council so the change is that the council's purpose is to advise in addition to what was in the house's bill on best practices communication protocols and training with respect to cyber security infrastructure and then the next big change is in subsection b of this section with respect to the membership of the council so at the bill that came out of your committee had a house and a senate member on this committee and the senate removed the legislative members of the committee they also made a few changes to the other to the membership the other members of the committee so first um your version of the bill had a representative on the council that uh was from a state electrical public utility appointed by the governor and this was changed to a representative from a state electric electrical public utility sorry to a district distribution or transmission utility appointed by the commissioner of public safety the um appointing authority for the representative do they mean commissioner of the public safety or do they mean public service oh i'm sorry i'm sorry it is public service and it's a mistake on my side by side i'll crush that that happens all the time it's both dps and everything um thanks for noticing that um so the okay the next change is to the appointing authority from the for the representative of a state municipal water system so that was changed from your version to be the secretary of natural resources with respect to the representative from a vermont hospital the senate removed um or an accountable care organization and they also changed the appointing authority to the vermont association of hospitals and health systems and for the person representing a vermont business related to an essential supply chain the appointing authority was changed to the chair of the vermont business round table and in the next um subsection in the section subsection c the powers and duties of the council um so one of the big changes which we'll get to is that your version of the bill had the cyber security council um creating uh standards for critical infrastructure domains the senate has taken out that section which means they that um in this powers and duties of the council they have struck out the power and duty to review and approve those standards because they will no longer be passed with creating them there is a change to um a small change to the language asking them to evaluate statewide's cyber security readiness um and develop and share best practices for policies and procedures and then um the senate also added here so this is on page three of their amendment the a new subdivision uh for the council to conduct an inventory and review of cyber security standards and protocols for critical sector infrastructures and make recommendations on whether improved or additional standards and protocols are necessary and so this new um responsibility is sort of taking the place of the section in your bill that had them coming up with the the cyber security standards and then two more changes were made to their responsibility to um identify and advise on certain opportunities so first um with respect to um the state investigating ways they can implement a unified cyber security communications and response they added in some clarifying language to say this would include recommendations for establishing statewide communication protocols in the event of a cyber security incident and then they also added in a new subdivision on investigating access to cyber insurance including how to increase availability and affordability of that insurance for critical industries any questions the next change is in the meetings section and subsection f so if you're going along in the amendment that's on page five um so the there was a strikeout of subdivision f one which in your bill appointed the the cio as the chair of the council and this was struck out just because it was um duplicative in the membership section of of this section that that individual was named as the chair so it was just repetitive language and then a new subdivision f three was added in their bill and this is speaking to um the authority of this council to enter into executive session and what um matters they were allowed to consider that will you know allow them to go into executive session so the uh it says that in addition to one vsa 313 which is the statutory provision that allows um for public bodies to enter into executive session if they're considering certain matters this council is also authorized to enter into an executive session to consider additional types of testimony so first is testimony from a person regarding details of the cyber security incident or response to that incident the disclosure disclosure of which would jeopardize public safety or any evaluations recommendations or discussions of cyber security standards protocols and incident responses the disclosure of which would jeopardize and then there's a new language in there that also says that members of the council and persons invited to testify before the council shall not disclose to the public information records discussions and opinions stated in connection to the council's work if the disclosure would jeopardize public safety I think this new subdivision is just getting at the fact that the reasons under statute that you can enter into executive session might not cover all the reasons why this particular council would need to keep information confidential with you know in doing their work subsection g so this is on page six of the proposal amendment is the reporting requirement so the senate changed um what would come back in the report so in the house version of the bill the report that will come to the legislature would be on information acquired pursuant to activities required under the powers and duties of the council and the language in the senate bill as the report back would be a status update on the work of the council I think this was also trying to get at making sure that they didn't want to disclose all information acquired during the work of the council because some of that might be confidential section subsection h in your version of the bill was the compensation and reimbursement provision that was up to subsection i in the senate version because a new subsection h was added and this has to do with a public records act exemption so this is um saying that any record or information produced or acquired by the council regarding cybersecurity standards protocols and incidence responses if that disclosure would jeopardize public safety will be confidential and exempt from public inspection or copying under the vermont public records act and there is language that says that this exemption shall continue and is not subject to the repeal review and the new subsection i is just the compensation and reimbursement for the members of the council the change here is that since there are no longer legislative members on the on the council there is that language about legislative compensation and reimbursement was was removed and then finally in still in section one in in 20 vsa force in the new 20 vsa 4663 this was the section in your in your version of the bill that required the council to review and approve cybersecurity standards for critical infrastructure and as i mentioned they the senate struck out that section entirely from the bill representative chase that's the first one that restricts me is maybe really bad changing the yeah that's kind of half the point of the bill but i i want to talk to the uh and his interpretation of that in chatting with the senate side it sounds like they were getting an awful lot of pushback from businesses that didn't want additional uh layers of that they haven't abide by and it sounds like the way they structured the the inventory and it's an inventory and review yeah would uh is intended to create a plan that everybody could move forward together but at this point it at least establishes the council which is a start um i have to be honest about it but just from a scheduling standpoint since this is up for action tomorrow do you want to wait to take a position on it or i mean i kind of pull the committee once we get through this i mean senate made a lot of changes they had they heard different testimony than we did and they they had some different feelings i think yes um this is on uh what it'll be on the floor tomorrow right so i mean we could we could spend a little time on this tomorrow before we get out on the floor or push it till later in the day and yeah we can do that that'll give me a little time to uh catch up with sean and scott okay representative you know if there was any rest you know for pulling legislators off of this uh i can i don't want to speak for the senate committee so they can um if you know they can speak to that in more detail but i i think the the stated reason and committee that i heard was that um they wanted uh people with expertise on this committee and because there was such sensitive information being discussed they wanted to kind of limit the membership to those who have expertise in this particular area representative chase i this is one of those instances where i had talks with my senate cap counterpart and this thing came up and their position over in senegal ops was that this isn't the kind of council that legislators should be on and my advocacy on behalf of our committee's position was that we know how fast cybersecurity and technology issues are advancing and the ability to have a legislator at the table who could then come back with all the knowledge of those conversations to share in this room in these rooms here over in the general assembly as we need to you know adapt and say this is one of those policy areas where we really should be you know every year looking at multiple things around security and ai and the changing nature of privacy and data and like there's just a whole all the infrastructure concerns and um they were just very adamant that they felt like we shouldn't stick citizen legislators on this council of experts to and i think becky captured what i had heard from uh from the folks from senegal ops pretty well because then she's good and i given my experience um i would feel comfortable being on this sort of a committee but i'm not sure an awful lot of people would particularly care to or and ask legislators we don't have security clearances or anything like that so some of the topics discussed you know there's the smaller the group that holds that information the more secure it is i'm i would rather have us on there but i don't think it's i would not advise the the group go to battle over that in particular remember i appreciate your uh flexibility and diplomacy on that i would suggest that we just for the heck of it put one house number well i so i think in this late and especially in my concern about uh i might be inclined if we had another few days actually that came up with this ahead but um i also think you know in all seriousness we shouldn't shouldn't necessarily be composing this because we know we have somebody who has a lot to offer in this vein you know designing a council for the next few years based on a particular legislator probably isn't the best practice for us even though i i agree absolutely with the spirit of that and uh yeah that that's uh that one's tough too here um i think there were a few you were almost done and then we kind of i got a steep rail like i apologize we should at least get through the walk through here before we put this aside for the day so section two this section in both bills is amending definition that's already in statute for critical infrastructure um and most of this was what was in your version of the bill what they added to this is thermal fuels and systems and the new section three in the bill is a report as i mentioned i started there is that new definition of essential supply chain and um one of the things they would like the council to include in its first annual report that is required under this bill is a recommendation on whether to amend that definition of essential supply chain to include any additional supply chains and that would you know and then the legislature could take action to amend statute section four is the repeal section so this was just section three in your bill they extended the sunset of the council to June 30th of 2028 so they added two years and then finally the effective date is still July 1st 2023 any other questions well thank you um i heard the chair say before we're gonna get the pause button on this conversation for a little bit so i guess we'll free you up to take it off from here yes all right welcome back everybody to the house committee on government operations military affairs um we are here this afternoon to take a look at each 517 uh and an amendment that Tucker has worked on with um the member from Waterbury and Chair Stevens is here with us so i want to welcome you time good to see you um and uh Tucker would you um maybe tee this up and then um we'll hear from the what's from Waterbury yeah represent just quick procedure push are we just doing a walkthrough because i have to get this through the center where am i missing something so i want to i'm curious yeah i was looking at going i uh want to understand what's going on here at Waterbury and then i made beg for a possibility for us to move this quickly if we can help the town of Waterbury out if not okay i'm just curious man you know okay yeah so thank you it's going to take a look and see what see what we do here okay it's a great question because we are in the winning days so Tucker did i have any integrity some legislative counsels for the record each 517 as introduced has two subsections in it it is not very dissimilar from some of the other fire district dissolutions that you've dealt with this year with no exception that i'll get to later so initially subsection a approves the dissolution of what is known as duck street more town fire district number one and memorializes that the voters of the fire district approve the dissolution of the fire district on august 6 2022 background for that i do not have materials to share with the committee that shows what the vote is i only have minutes from that meeting that indicate that the voters excuse me that the fire district is the way that it's phrased approved the dissolution of the district and it appears as though there were perhaps four individuals some representing the prudential committee maybe one person who did not represent the prudential committee at that meeting subsection b states that on the effective date of the act which is on passage that the fire district will cease to exist as a political entity or body corporate this would be similar to the Rutland fire district number three that was dissolved six years ago the exception that that fire district had no assets and no liabilities and no infrastructure and for all purposes only existed legally did not exist physically this is different and typically when you have assets liabilities and infrastructure that has to get transferred to some other corporation which is why there's an amendment uh that is posted on the committee's page to add a subsection c it would transfer assets liabilities property and claims from the fire district to the edward for our utility district pursuant to the vote that was held on august 6 2022 and the minutes reflect that that was a component of the annual meeting of the fire district was the transfer of those things to the efud as it's affectionately referred to within these halls the second sentence states that the efud will have authority to collect any debts or other amounts due that have resulted from services provided to customers of fire district why is that sentence in there well because since 2013 it appears as though first the village of waterbury and then after the 2017 charter enactment the efud has been operating these water services within the fire district uh and continue to operate water services in fire district after the fire district voted to dissolve and walk away which is potentially where the issues that come to your attention start uh you'll recall from your time with the poll chester his solutions over both this session and last biennium um they usually there's an agreement executed between the corporations for the transfer of assets usually you get some idea formally of what the boundaries and the water lines are and typically the transfer is between at least in the most recent cases municipal entity and a regional entity um in this case some background that you should know about the legal structure of the efud is that the efud is an incorporated utility district that has its own charter the voters of the efud are restricted to those who live within the efud's boundaries within the town of waterbury uh the commissioners of the efud have rate setting authority which is not dissimilar however an issue that this committee has dealt with in the past is that the efud is one of those water districts that sets extra territorial rates which is different from the water districts you've dealt with to biennium where the rate setting is uniform throughout the district and all of the member municipalities have voting rights so that is one thing that is going to be unique about the transfer here from duck spree more town to the efud is that uh the fire district has transferred assets liabilities and legal authority and those customers will no longer have voting rights within the municipality that's going to be um offering them water services representative tucker you know it talks about and see i'll ask us live there was property i mean should there does there need to be things tightened up there as far as adding maybe uh operational degrees or is that just the given once it goes over to that that will be a given and important to note one question that i had and i did some research in the 2017 act that i was one of the first bills that i worked on with legislative council was the formation of the efud in the efud charter um even when the village transitioned to edward utility district they didn't include anything in their transitional provisions about the operating agreements carrying over and the operating agreement that is currently being relied upon with duck spree more town fire district number one is with the village of waterbury at least that's the copy that i got it is not with the edward for our utility district so legally i think it's assumed that once an entity has possession of the infrastructure and the legal authority to apply the rates that they also take operational control i'm seeing mr leitz who's the town administrator uh nodding his head so tucker anything else you want to tell us about the words on the page and then maybe we can have a conversation that takes me testimony from tom thank you very much tucker so mr leitz and good to see you again good to see you sorry sorry for the last last minute um so the village but actually had an agreement with the fire district date back to the nineties where we've essentially operated as ours for that period of time there were conversations before my time here i joined here late last year but there were conversations in the spring and summer of 2022 about combining um and when i started that was still a conversation and i was going to take that up this year um the the fire district spoke to dissolve was not something that anyone here was aware of um and then late in 2022 the chairman of the fire district walked into town call with the check where the president said we dissolved it's all yours and he essentially walked away from it um at first we weren't even sure what to do with the check we eventually created a separate bank account and there it sits and we've operated as if it is ours but in speaking to our council some of the basic things about operating a water system or we cannot do for instance if you've got the link when it counts we have no ability to shut off water we have no ability to conduct a tax sale so there's a need to combine the two and it was the full intent i think of both e-fund and the fire district to combine but we just did not expect them to in essence go to dissolve and not be an active part of the process so here we are yeah could you speak to uh the voting uh decision that that is made i i didn't quite understand that from what Tucker said it sounds like folks aren't going to have a vote that are in that water district um are you talking about the vote to dissolve the district that they held no i'm going forward so going forward um as the bill is written only in essence the only people who can vote um at e-funds annual meeting which incidentally is tonight are uh residents of what is essentially the old village of waterbury so we have town customers who don't who don't vote that are annual meeting and then the that's pretty more town fire district customers once absorbed would also not vote so i think that's pretty a pretty common relationship exactly the same as st albin city and st albin's town where just city residents have a vote on utility related matters so i think the the question that represented higley might really be asking is the voters of the uh that's where more town fire districts did not vote to dissolve their fire districts and merge with the e-fund or sort of get services from the the e-fund right i mean it's it's sort of like they're they're uh it's the um credential committee got together and and voted to dissolve um and not knowing if they have bylaws that allow them to take that kind of action without a vote that's our question i guess yeah and the advice of our council was that only the legislature can dissolve the fire district so that's true but we usually do it um as because you know we we uh as our legislative councils remind us many times we breathe life into these municipal corporations and then you know we can dissolve them when it's gone past the usefulness um but we usually do that uh as a result of a public vote um except for you know i can think of like for instance the um this was kind of similar well in colchester they had a vote so that's that's the only thing that's unusual about this i mean when was is there any historical information about sort of the creation of the dexbury more town fire district and whether the the uh prudential committee had the ability to to dissolve it the way that they did that's yeah none of my fingertips your council may have that and speaking with the who was the gentleman who was the chair of the dental committee um they struggled to have a quorum for years sort of had public involvement and it's a pretty small district about 140 customers and they held their vote at the time they did because he was actually leaving in this great so they wanted to in their minds hold the legal vote what they still had quorum so there was some there was some logic to their process even if wasn't technically correct okay uh so the the reality now is that the dexbury more town fire district number one it is an extraterritorial service area of e-fund correct and the reality is we are operating it we will continue to do so if there's a a waterline break we will go out there we will repair immediately we will continue to bill as we have we're simply not going to abandon those customers um but my understanding is there's in essence no permanent representation on their side of the table represent thank you thank you um um we sort of referred to the situation in saint alvin's and i'm not super familiar with it you must be is this the same situation as the sewer issue in saint alvin's which is really contentious yeah it's not the same so uh tom you may be able to speak to this at length um but what i would say is that the reason it's so contentious or was before the the recent meeting of the green bargain that was struck uh very recently god thanks tom for all of your help leading us up to that because there's a lot more love between the city and the town of saint alvin's now um so the um the issue there was that the city owned the the water had invested in it and um that the the town uh was an extra territorial user um but in order to get access to new hookups the city wanted to charge an affiliation fee um to new customers and so i don't think any of the affiliation fee that was really the thing that was causing all the problems exist here um the the thing that is similar is that you have one municipality that owns the infrastructure provides the service and it is providing that infrastructure to uh for a differential race just on the water service i think tom correct me if i'm wrong to those other um municipalities or you know to customers and other municipalities totally correct there's about a five percent rate differential so none of none of the horrible affiliation fee uh debacle in waterbury moretown ductsbury area okay representative i think to me it reminds me a little bit uh the northeastern kingdom solid waste management district provision in it where in a certain period of time for all the towns to you know vote against what the commission did in a sense and it chose not to so it went through at least there was an opportunity a very small window maybe but an opportunity for us towns to speak out um is there anybody representing so i i i see that uh reps from moretown and ductsbury are co-sponsors of each 517 so i take it the the the those communities are interested in doing away with the spire district as well representative stevens would you like to yeah would you buy us uh getting in on the conversation here thank you thank you representative top students from ordinary village or i'm sorry it's not short and i'm not sure tom if i'm going to be able to vote today um vote so just to give you a quick idea of what where we're talking about if you if you've been in waterbury village and you're heading down towards montpelier you end up going over a bridge where snowfire auto is and where there's a gymnasium and whatnot that's actually moretown and we're talking about a hundred and what's you say tom 140 customers so we're talking about a corner of ductsbury and moretown area which may fit in the 05676 zip code the whatever it's just an area that because we're adjacent and been adjacent to it um when they form the fire they form the fire district to become the customer so that they can have water service they don't get a sewer service that or else they would be part of the village um i don't know how long it's been in effect but it's been for some time and like a like a small municipality which they are the same people ran them for many years and i think that the um the element that we're talking about is people may have felt that they could just close it down and as tom mentioned bring a check to the to the town office and say here's the balance of what we have and please take care of our residents and so these residents would turn it to individual customers much the same way that waterbury where the e-fund sells it to other members in waterbury who are not in the what used to be the village now is determined where the sewer went so anybody outside of the village doesn't have town sewer service um the representatives from moretown and ductsbury did they were the primary sponsors on this at first because um but i don't have any information as to who came to them except to say that this was an issue obviously it's important to keep water flowing to people um tom does the district go as far as the landfill i believe so yeah so the old moretown landfill is you know the the cause for having fresh water was solved or you know when they formed the district and so now again i i have no further information about what the voting um situation was but it's definitely it was definitely municipality that was not running at full steam um and that's why they i believe that would be the the motivation for closing it down that they didn't do it according to whatever their bylaws may be is that issue yeah so essentially it sounds like we're talking about a completely different municipality that serves 140 water customers just over the waterbury line in moretown ductsbury yeah okay um so i i guess my next question would be given that we're in the last couple days of the session what is the the risk of us taking up and sort of trying to wrap this next year versus trying to pull off some kind of very challenging rule suspension procedural maneuver which would yeah between both bodies uh this year so is there a case to be made why why there's urgency here the case i can make is there's uh a few larger customers with pretty substantial delinquencies and as it stands now we have no real ability to collect um in our operational agreement with the district um because they own the lines they've got that legal authority to actually perform a shutoff or to conduct a tax sale as i understand that we do not and so that creates a bit of a financial challenge for us um and the problem is unlikely to get better if we wait a year it's not 140 customers it's a handful of customers just like any utility district but it is nonetheless a challenge for us in one of the customers is the middle school but we will continue to operate the system as we have will continue to make sure the infrastructure works appropriately for everyone if you wait i'm sorry um and tom i started to interrupt you i apologize um the district also includes the middle school um right just not that that's not that that's the biggest customer or anything they have paid their bill not a figure what's that doctor that's duck's very we also have uh customers patients who want to connect that obviously can't happen oh so you couldn't make a new connection right in terms of whenever the session for this time being closes we're not ending the session we are ostensibly not officially but i assume we're going to have to come back in june for various for one or two various reasons would business otherwise be done so it's entirely possible to do this half and then do the other half here i believe for something like this the answer is probably yes we've had some conversations in our committee unrelated to this that might be a sore spot we've just rubbed a little bit now i i appreciate you taking this up um i this was not on my front burner though i knew that the representatives from for more town and uh duck's very we're we're bringing this forward and again it sounds like it's a situation that the the sooner the e-fud if there is a quote unquote easy way with tucker's language to become owners of this a whole system the mechanics of the system that would be beneficial otherwise it'll be tape and duct tape till we until we come back next year and i don't know what it means financially um i mean those payments will pile up and the owners will have to pay them eventually but um obviously all right committee uh we've talked about a lot of things today so we're all getting a little bit punchy um thank you so much um anything else we should know this fire district's was kind of an orphan uh and and it's it's last remaining people just sort of said here you go i'm gonna deal with it yet e-fud i don't think i've ever heard of something like this happening i think you know when we've had long conversations about merger i still get ptsd when i hear that linden and lindenville get to merge in waterbury and waterbury village never did um we created an e-fud instead and um but i i do um in the time that i was on the select board and afterwards i don't think i've ever heard of a fire district just bugging out like this and it's a unique situation to deal with at the end of the year and i appreciate any time that you're able to spend on i think you're representing the students uh so committee uh thanks tom i i especially look to uh my longer ten-year gov spendings for your opinions on what to do in this very unusual situation well um again something like this i don't think would object to suspended rules of opinion so we want to dump that let's see let's go for it all right i think uh helping out mr leitz and uh making sure that the water can keep flowing especially to the crossover middle school is uh important um that's why that's even right now so i would go on for the ride we're gonna do it we're talking about 140 water customers in uh more town in juxtapory and some of them want to be i would uh i would entertain a motion um to uh accept as favorable uh h5171 amended by drafts uh 1.1 take the motion per percent of nugent is moved that we um support h5171 amended by draft number 1.1 there's not there's not a 1.2 out there okay i'm just double-checking it's there's been a lot today all right um so uh any other discussion and the clerk is ready uh would you call the rules okay um yes yes that's in the morning yes that's in pooper grilington yeah that's in markie yes that's in chase yes that's in water seven yes that's in pooper grandall for percent of nugent yes that's in higley yes that's in mccarthy yes 11-01 do you want to report this really just deeply uh representative higley has i really agreed to be in the reporter of this bill um all right everybody uh tom thank you but we'll do our best to move this along as expeditiously as we can um very um have a good one good to see you again all right everybody uh we're due back up on the floor so we'll adjourn and go offline see you up there