Committee reviews S.323, a wide rewrite of agriculture law including municipal limits, Act 250 exemptions and move of hemp oversight to Cannabis Control Board

A legislative committee spent its session on a section‑by‑section review of S.323, a sprawling agriculture bill that would change municipal zoning authority for farming, adjust program thresholds and exemptions under Act 250, revise seed labeling and reporting requirements, consolidate the Vermont Agricultural Credit Program into the state authority, and move hemp regulation from the Secretary of Agriculture to the Cannabis Control Board.

Bradley Shman of the Office of Legislative Council, who presented the unofficial Senate version, told members the bill’s early sections (1–3) amend 24 VSA §4413D to restrict municipal regulation of plant production — covering food, fiber and Christmas trees — and to revise the ‘‘wraps’’ eligibility thresholds. The bill would raise the income threshold tied to wraps from $2,000 to $5,000 and allow sales and charitable donations of crops on farms of four contiguous acres or more to count toward eligibility, Shman said.

Shman also described proposed changes to how livestock are treated under the wraps. The Agency of Agriculture would have authority to regulate some livestock operations on parcels between one and four contiguous acres when the land supports appropriate nutrient and waste management. For animals kept on less than one acre — or between one and four acres within municipalities that lack bylaws — the bill would allow the Secretary to hold a hearing and determine whether wraps should apply when there are "significant water‑quality impacts," Shman said.

The committee examined an Act 250 change (section 4) that would expand a limited permitting exemption for accessory on‑farm businesses. Under the current formulation, the exemption applies when more than 50% of processed or qualifying products sold by the business are produced on the farm. The bill would add an alternate test: the exemption could apply when not more than $250,000 in gross sales (adjusted for inflation from fiscal year 2026) of products sold by the business are produced off‑farm. Committee members sought clarification about whether the $250,000 figure is calculated on sales price or production cost; Shman said it applies to sales — the amount charged — and that the statute uses the CPI‑U to index the base year amount.

Shman flagged a technical correction to the milk‑producer hearing statute (section 5): the bill would correct wording so that a milk producer, not a purchaser, may request a hearing if a purchaser backs out of an oral or written contract; until the hearing decision, the purchaser’s refusal would not be operative.

On the farm‑to‑school program (section 6), the bill would permit the Agency of Agriculture to provide grants or contracts to help Vermont schools develop farm‑to‑school programs. Shman noted grants and contracts differ in reporting and administration and recommended agency testimony to explain the policy rationale.

Multiple technical changes address seed law (sections 9–14): the bill replaces the terms "sell" or "sale" with a broader definition of "distribute," expands definitions (including flower and treated seeds), and tightens labeling requirements for treated seeds and bulk seed displays. It would require annual registration for distributors ($85) and a $10 per‑ton fee for containers over 10 pounds; distributors must file annual reports on or before February 15 that disclose the quantity of seeds distributed, including genetically engineered, treated and untreated seeds, Shman said.

The bill consolidates the Vermont Agricultural Credit Program into the state authority (VA). The draft moves the program into VA’s statutory subchapter, replaces references to the Vermont Agriculture Credit Corporation with "Authority," and authorizes VA to administer and, if necessary, dissolve the corporation. Shman said the program’s loan standards largely move over without substantive change, but the committee asked staff to provide more background about historic funding and how the program has been administered.

A substantial portion of the meeting focused on hemp (section 22 and following). The bill transfers regulatory responsibility for hemp from the Secretary of Agriculture to the Cannabis Control Board while continuing to treat hemp as an agricultural product. Producers, processors and other hemp businesses would be required to register or obtain licenses from the CCB; the board would be authorized to adopt rules for testing THC levels, labeling, commercial insurance, and bans or limits on hazardous additives and flavors intended to appeal to minors. The draft tightens registration for products estimated to contain more than 0.4% THC and raises some processor fees (Shman cited a processor fee increase from $100 to $500 while removing several grower fees under prior law). It also broadens administrative enforcement and allows civil collection in Superior Court for unpaid administrative penalties.

Other, smaller provisions include repealing an inactive interstate pest compact, removing retake limits and some fees for pesticide applicator examinations, and permitting the National Resource Conservation Council to apply for mortgages to purchase land. Committee members repeatedly described the bill as "technical" and noted it draws from existing agency language in many places; they asked for the Agency of Agriculture and the Cannabis Control Board to return for detailed testimony, especially on hemp and on the agricultural credit restructuring.

No formal motions or votes were taken during the session; committee leaders directed staff to schedule follow‑up briefings and to consider dividing sections for member reporting. The committee said it would bring Bradley Shman back for a deeper, section‑by‑section review at a later meeting and asked agency witnesses to appear to explain policy tradeoffs and fee changes.

The committee’s next procedural step is additional review and testimony on specific sections (notably hemp and the credit program); members did not set a final reporting date during the recorded session.