 the afternoon committee meeting of house appropriations and we are continuing with our CRF funding and we have with us Michael Grady and we've received I believe yesterday or the day before the senate proposal for expenditures in agriculture. So Mike do you have that or for a highlight sheet. Thank you Mike and so welcome Mike we're oh I've got to just get Marty in here and and here we are. So Mike if you want to join us you have the floor to do the quick walkthrough and then we can see the differences between the senate version. Okay um so generally the senate well step back framework for you is the house committee's proposal was to establish a grant program for milk producers and dairy processors. They had in that program a $50 million award to be reduced according to any percentage that that you recommended. The senate proposal includes an assistance program for milk producers and dairy processors but also includes an assistance program for other farmers, commercial processors, commercial slaughterhouses and farmers markets. The senate was working with a $30 million total number so $19 million is appropriated for milk producers. 3.8 is appropriated for dairy processors and 7 million would be appropriated for the non-dairy sector the other farmers and commercial processors, commercial slaughterhouses etc. In addition as 351 appropriates $192,000 to the BHCB for additional services that the BHCB can provide post-COVID for business services, food and farm services and mental health services all of which have increased since or the demand for which has increased since the COVID-19 public health emergency. Did you say BHCB is addressing mental health services? Yes they are going they hire contractors they are experiencing when farmers are seeking their assistance they are identifying that those farmers are experiencing distress other trauma and they want to be able to provide some necessary services to those farmers in addition to their business and other technical services that they provide. I'm not questioning the need for mental health services I'm questioning why BHCB would be charged with that that's what I was that that's just in we can learn that as you walk through the bill but sure well it's it's really not much more detailed than it's actually less detailed than what I just told you in the bill it's it's really about them being on the farm and them interfacing with the farmer and wanting to be able to provide those resources when they think they're appropriate and they're not providing them themselves they would would do it through a contractor okay so you could just start out with the the first section this would be the dairy assistance program this bill was drafted well before the template came out but you're supposed to follow so it does not follow the template the key definition would be dairy processor on page two as really those persons or businesses that that produce dairy products economic harm which is right below that the milk producer dairy processors expenses are lost revenue or both related to COVID-19 then you can go on to the next page and look at the definition milk producer under subdivision nine the person partnership corporation that owns or controls dairy cows dairy goats or dairy sheep and sells her offers for sale apart or all their milk produced by the animals then you get the program establishment at the bottom of that page to provide financial assistance to milk producers and dairy processors you get the eligibility requirements they must be currently producing milk or dairy products they must be in good standing and this is different from the house committee's proposal good standing as defined in this bill means that they don't have an active enforcement and violation brought against them by the agency of agriculture or the agency of natural resources but since this bill was passed the senate a question has come up that's probably a broad application to all CRF grants and it's administrative bulletin five and that has a good standing provision in it that says you can't be in default on your state taxes you can't be in default on your child support and the state can set off any money owed to you under this program for any liability owed to the state so what you should be aware of is administrative bulletin five is going to reduce the number of people who are eligible under this program and probably under any other CRF program where an individual or a business is going to receive a direct award are you saying that Mike that that language is going to be universal in all the CRF bills well what i am saying is that administrative bulletin five applies to any state grant program it's it's issued by the secretary of human service human resources for for or a secretary of administration for every grant that a state agency issues and there are mandatory terms and conditions and one of those is you must be in good standing with the state on your taxes you must be good standing on your child support and any liability you owe the state maybe set off in an award from the state so what that's going to mean is that for instance a farmer who hasn't been able to pay their state income tax is not going to qualify for this program we have go ahead i'm sorry we have two questions when you're done a restaurant that didn't play pay its rooms wheels alcohol tax may not qualify for a CRF program so so you need to realize that it really only came up when a farmer raised the issue with senator hardy after this bill was passed and i said well yes those are just the the the default terms and conditions of any state grant and it follows logically because you don't normally want to give money to people who are violating the law right and that's that's a concept or a policy that runs throughout grant programs at the state level at the federal level but here for taxes or a set off the potential recipients they may not have had any ability to pay their taxes this may not have been in an intentional withholding of taxes or intentional non-payment they may have no income to pay whether it's a restaurant or a farm or other business and do you want to disqualify them because they are not in good standing with their state taxes okay we have a few questions we have Mary Chip bob and diane i think you've clearly said this but let me just make sure so it's not that they can receive it and then have to use it to pay back whatever their obligation or their penalty is with the state it is they may not get into the program period yes that you have to certify that you're in good standing and if you are not you may not qualify the granting agency um has some discretion to waive that requirement but it is it is supposed to be case by case so you're kind of weaving a determination of eligibility based on this to whomever the grant entity granting entity would be so it's it's uh you know normally this is such a default issue that it that most people didn't even think of it but um because you it's just good policy not to give money to people that are violating the law or owe the state taxes but this may be a different policy decision for you as a body so the governor said to people who had trust fund obligations so rooms meals sales tax etc you do not have to pay your taxes until i think mar uh july 15th maybe that was income if they have not paid on that day they would not be eligible for the grant programs that follow well they so here's i'll read to you the the taxes due to the state requirement it says party understands and acknowledges responsibility if applicable for compliance with state tax laws including income tax withholding for employees performing services within the state payment of use tax on property used within the state corporate and or personal income tax on income earned within the state so that one's really you're just acknowledging your responsibility but then you have to say party certified under the pains and penalties of perjury that as of the date of the agreement assigned the party is in good standing with respect to or in full compliance with a plan to pay any and all taxes due to the state party understands a final payment may be withheld that the commissioner of taxes determined that the party is not in good standing with respect to or in full compliance with the plan to pay any and all taxes due to the state so you have to certify under perjury that you're in good standing and if the department of taxes determines that you're not they may withhold the award okay okay Mary are you finished uh Chip and Bob and Diane Diane you're okay I keep having more questions as as Mike talks but I'll just stick with this one for the moment um so we all know that a corporation is a person what or and some businesses are set up as partnerships so if you're not a sole proprietor you are an LLC or a partnership or something is the entire how will that be addressed if the entire business is not um defaulted on some or is not in good standing I should say in some way but only one member what happens then well it's it's going to be whoever the corporate entity is that's applying right if if the corporate entity is in this case a farm it'll be about how that farm is is registered with the agency of agriculture um and so that corporate entity needs to be in in good standing with the state on its taxes okay um so in some other instance let's say a restaurant um there's an LLC um as long as the LLC is in good standing it doesn't matter if um one of the owners is uh you know in a rears on child support or something well child support is a different different condition but let me do something else but you know is um um hasn't paid their own personal income tax or you know is in some way not in good standing right so it's about the party and the party is the applicant and and and but for just to answer the child support question they make a distinction there for child support they say if the applicant is a natural person and not a corporation or partnership the party needs to state that they are in good standing with their child support so you see the distinction there it's like it's it's a if the party is going to be that business entity they're going to use the business entities standing with the state not the individual you know members or shareholders I guess that makes sense well obvious now that you've said it thanks we may have to come back and revisit this issue um Bob and Marty two quick questions because we have less than 15 minutes to finish walk the walkthrough of the bill because we have the health care bill on the floor so I am going to I'm going to stand down okay in the name of time okay we'll have to we're going to have to come back to this Marty the same thing I was going to talk about that particular issue but we can talk about that later okay we'll come back and um let's go back to the bill and see okay well actually from this point in the dairy processing program to the end of the dairy um assistance program it's the same as the house except for the amounts so if if Theresa you can go to page five at the bottom of the page the senate working with that 19 million dollars for the dairy assistance per small farms for the milk producers they came up with these maximum amounts for the different categories of farms and then if you go on to the next page you'll see that for dairy processors working with a 3.8 million dollar appropriation for all dairy processors they came up with those maximum amounts for the different tiers of dairy processors so this is a key difference between the house committee's proposal and the senate's proposal because the senate was working off of that 19 million slash 3.8 million dollar breakdown for the different producers and processors and the house committee was working off of that 50 million dollar um administration proposal and the amounts underneath that proposal so moving on from there most of the rest of this information is but basically about administration of the program including applications and um some of the default terms compliance with the CARES Act etc i'm going to take you therefore to the next program which is going to be section three on page 10 on section three you'll see the agricultural producer or processor assistance program and so one of the things that the senate committee on agriculture looked at they looked at what percentage of farming slash agricultural industry is dairy and what percentage is non-dairy and they heard from the agency of agriculture that dairy is about 70 percent of the agriculture industry and everything else is about 30 percent so using their breakdown or their appropriation of 30 million they set aside seven million for an agricultural producer processor assistance program for that other 30 percent and so the first definition that's important is agricultural producer at the bottom of page 10 it's a farmer who's not eligible underneath section one so a farmer that's not eligible as a milk producer or as a dairy processor and then you'll see that who also is eligible are commercial processors and those are people who process meat products in the state commercial slaughterhouses those who are engaged in the business of slaughtering and then on page 12 farmers markets are also the ones are also eligible under this program and it's not um the each individual stall in the farmers market it's the farmers market entity the those who are registered and defined under 11 vsa section 991 and so those who are eligible under this program an important difference in this program from the milk producer and dairy processor is that on page 13 line 11 through 13 these businesses cannot have had a net profit between march 1 2020 and august 1 2020 there was some concern that some of these businesses have actually been doing very well during this time frame because of the demand for or the increased demand for more local food or the increased demand for more slaughtering because slaughter in other states has shut down and so the the senate didn't want to award businesses that are doing well just because they had a cost or expense that was related to covet 19 so if they've had a net profit in that period they don't qualify underneath this program then you get to the maximum awards on page 14 they based these awards on annual gross sales and so they looked at a usda census document to determine these breakdowns of what is small what is medium etc and then using the seven million dollars they backed into these numbers using nolan at jfo and playing with some assumptions about how many farms are in each class and usda census information provided a general estimate of how many farms are in each class and so then the rest of this is again that administration and application of the program not a significant difference from the milk producer and dairy processor assistance program that you can go to page 17 one thing i should have noted for both the milk producer dairy processor program and this program you'll see it on the bottom of page 17 going on to 18 that any funds that aren't appropriated um expended by november 1st shall revert to the agency for reallocation under either the dairy processor assistance program or underneath this agricultural producer so if you haven't if you've appropriated money it's been granted but it hasn't been expended that needs to go back to the agency for reallocation the agency wants to make sure that this money is going out and being spent as soon as possible moving on from there there needs to be education and outreach in section five regarding these programs and the availability of the financial assistance and then there is a report on page 18 line 17 through 21 so the senate wanted the report monthly they're a little concerned that the agency may focus more on the milk producer and dairy processor assistance program than the than the other program the agricultural producer program and because of that reversion language i just walked you through they want to make sure that the agency is implementing the agricultural producer assistance program diligently so that they don't just take that seven million dollars on um october 1st and and reallocate it they want to make sure both programs are being implemented appropriately and therefore they're asking for a monthly report section six there was some testimony about informing farm workers of the risk of the public health risks of COVID-19 apparently BOSHA has developed information about that section six requires the agency of agriculture to produce that information the BOSHA information on the agency's website and to post it in english and spanish section seven is that appropriation to v8cb that i discussed at the beginning of the meeting 192 000 from the crf for business financial and mental health assistance to farm and food businesses that suffer losses due to COVID-19 um and then section eight this amends v8cb's general overall corporate authority to clarify that they have the powers of a nonprofit corporation they have been applying for funds that are or grants that are only available to nonprofits and they've been receiving some resistance as to whether or not they are a nonprofit they would like it to be clear in their authority that they are a nonprofit this will allow them to access more funds for their programs and then on page 21 line eight through 21 this just kind of formalizes some corporate authority that dhtb is likely already exercising um for example making publishing rules and regulations with regard to its housing programs making it legal and documents necessary for exercise of its powers they just want that authority set forth clearly in statute it's likely authority they're already exercising uh and that really takes you to the page five page 24 section nine um a few years ago you created something called the rural economic development initiative um it was effectively an approach creation to v8cb for a staff person to um work with municipalities and and who do not have grant writing ability um and to help those municipalities and similar entities access grants um that they otherwise wouldn't have the capacity to navigate so that program with the $75,000 appropriation has been drawing down I think it's drawn down over four million dollars to date for municipalities in its three years of existence um so the senate would like to repeal the proposed sunset of the program and just to make it a permanent programs because it has been very successful considering the amount that's being put into it and everything takes effect on passage I'm muted I'm sorry I was muted thank you Mike we have a few minute three minutes before we go to the floor and I know we're going to have no questions that are in three minutes and we may need to have you Mike back Mike I don't know your schedule tomorrow just so that Mike um has some things that he can come back and talk to us about and we can in excite questioning are there topics that we would like Mike to be able to come back and explain to us we do know that there were questions regarding the good standing on taxes language so that is that's a piece Mike that we will continue with other questions that he needs to be prepared um that wouldn't go to CHIP and wouldn't go to the work group but that we need Ledge Council to talk about Mary the I I don't know who gets it but I would be curious to know how many entities will be affected by these provisions and how much in grants are they likely to see my my guess is somebody did a kind of a back of the envelope analysis no actually uh JFO Nolan did a pretty detailed analysis I've got a Google spreadsheet that I can send you um the the milk producer and dairy processor program is designed so that all of those processors and producers will get it will are intended to get a grant whereas the agricultural producer and processor program there's likely more of those entities basically the money's going to run out of that program um so there may be people that don't receive an award it's going to be a first come first serve program okay I'd love to see the spreadsheet and if it shows the grant amounts that would be terrific yeah he's he's got it all broken down I'll send it to Teresa right now thank you Mike are there other questions that you have that you would like Mike to be prepared for um when he comes back chip is going to start conversations with um house ag and senate ag this afternoon so make sure if you have thoughts on directions you believe this should go that you get your thoughts to chip today is that they will talk today and I'm sure tomorrow I doubt they'll have a a proposal for us by the end of the day they seem to be um a bit far apart okay we need to go to the house floor Mike thank you and Teresa um I've got to yeah I we need you back in for another I would say half hour Mike tomorrow if you have time okay well I'm also drafting forest uh economy stabilization grant program I will what I have language for that already it doesn't have all the default language all the necessary expenditure attorney general all that language in it but um it has the base of the program in it and should I send it to the department and have them and you went out Mike should you send it to the department and you froze Mike just when we needed to hear that I think a chip has asked you to review to do that like chip is that the language that you were talking to us earlier about today yeah so you were going to send it to the department of forest and parks and I'll send it to representative conquest and then you can let me know if you want me to walk through it tomorrow thank you okay Teresa I'm going to jump off I might need to be on the floor yep we all need to go to the floor and Teresa you'll do that schedule and I'll see everybody tomorrow at 8 30 and we have another bill school construction uh that we need to put on our list of to to get gone all right uh thank you