House Commerce & Economic Development committee advances study of data-broker registry, delays consumer opt-out

The House Committee on Commerce & Economic Development heard testimony Jan. 30 on H.211, a bill that would expand Vermonts data-broker registry and add consumer controls. Deputy Secretary of State Lauren Hibbert told the committee her office houses the registry and supports studying an opt-out mechanism rather than immediately taking on that function.

"We really wanna make sure that the data-broker structure that Vermont has built ... is as strong as possible before we start adding additional responsibilities in our office," Hibbert said, asking the committee to include a study and a report-back timeline rather than immediate implementation.

David Hall, director of the Business Services Division in the Secretary of States office, told lawmakers that Californias implementation illustrates the technical and financial challenges of an opt-out portal. Hall said Californias system cost about $4,000,000 to build over two years and that the identity-verification component (to confirm residency for Internet access) is a primary engineering hurdle.

Hall described a change the bill would make to timeliness of registration: replacing the current one-year lookback with a 30-day duty to register and an annual July affirmation. He said the shorter reporting period would provide more timely data for regulators and the public.

The Secretary of States office said its business-services team is small (currently six staff handling business registrations statewide) and that adding consumer-facing functions such as opt-out support would meaningfully increase service volume. Hibbert and Hall asked the committee to authorize a study committee that would include the Agency of Digital Services and a legislative member and to budget funds to hire a consultant to evaluate costs and mechanisms, with tentative report-back in 2028 or 2029.

The Attorney Generals Office testified in support of the bills direction and outlined enforcement pathways. An assistant attorney general from Tom Dalos office said enforcement has relied on media reports, advocacy referrals and multistate actions, and emphasized auditing the registry to identify unregistered actors. James Lehman, assistant attorney general in the Consumer Protection Unit, described the AGs practical toolset: subpoenas to out-of-state entities seeking written responses about activities, outreach to compel registration, and, when necessary, penalties or assurances of discontinuance.

The AGs office supported removing the cap on penalties and backed a bonding requirement in the draft bill. The draft bond amount discussed in committee was roughly $20,000; AG staff said the bonding and an increase in registration fees would help Vermont recoup administrative and enforcement costs without resorting to protracted litigation.

Committee members pressed witnesses on administrative details: whether the registry should maintain live links to hundreds of external data-broker deletion pages (Hall urged caution because links change frequently), whether a standardized consumer "email/letter template" for contacting brokers would help, and how fee or bill-back authority could be structured so regulated entities bear enforcement costs. Witnesses said these matters should be part of the proposed study.

Lawmakers also discussed the bills definition of "data broker." AG staff and committee members said the draft broadens the definition to include entities that repackage or sell data acquired from others (not only data collected directly), a change intended to make enforcement more effective.

At the end of the hearing a committee member briefly asked about H.205, a separate noncompete bill, and whether noncompetes attached to out-of-state employers of traveling nurses would be enforceable in Vermont; witnesses advised consulting hospital contracting experts and said the noncompete provision likely would not apply to nurses while they work in Vermont.

The committee directed staff to keep working with legislative counsel, the Secretary of States Office and the AGs Office to refine H.211, add study language and funding, and provide interim updates to the committee as the cross-state technical options and cost estimates become clearer. The committee indicated it would seek interim reports and expects further draft language before the next stage of consideration.