Vermont Legislature SmartTranscripts:

[Speaker 0]: Good afternoon, Friday, 03/20/2026 in house transportation. We are going to be walking through or at least being updated on the and means amendment to our T bill. I'd also like to have the JFO come up and go through our fiscal note since we actually haven't seen it officially yet. I don't know if it's still in draft format or if it went to final yet on that. So we'd go from Damian over to Logan. For the committee's benefits, our bill out of our bill went to ways and means. It was heard. It was voted out nine-one-one and came back to the floor and went to House appropriations, where this morning it was presented in House appropriations at 08:00 this morning. And it passed out of House appropriations eleven-zero. So it came back. It will come back to the floor on Tuesday, barring unless we get involved or what we could be as early as presentations Wednesday. But I don't know that for sure. I have no direction from the speaker where we might want to go to Wednesday or to Thursday to do it or what the timings might work in that perspective. So it went out eleven zero, went over and then was amended, and then went out nine-one-one, and then went down to appropriations, and came out eleven-zero out on appropriations.

[Unidentified committee member]: I guess I want to ask who would sublime, but what was the objection?

[Speaker 0]: That there wasn't my interpretation of the reason that there was one no vote in the ways and means was that there was if I get it wrong, it was a very quick move. It came in and came out in the same day. And there wasn't much it came out of here. And there was one the next day. There was basically a nice move. Then the next day, so the Beltway was too fast. And the issue around the town, the highways, and pilots, I believe it specifically is that I think there should be at least one no vote to highlight to people there's something worth looking into here, is what I believe that representative said. You can go back and look at the video.

[Chris Keyser (Member)]: I understand. Yes. I really understand it. Didn't they change some things more about That's

[Speaker 0]: what we're going see right now.

[Unidentified committee member]: So maybe that's right.

[Speaker 0]: We're going to see what they did to it. I was in the room, so were some other people. But it's on the video. You can they went the entire morning, most of the morning over the mileage based user fee, came back after lunch, and then made an amendment to the bill and sent it out. That took less time than the full review of most of the amendments related to the Milerspace user fee, but some of the bigger key portions may be the other area.

[Unidentified committee member]: Representative, why?

[Unidentified committee member]: I just have a question

[Candice White (Member)]: on process. Because I don't remember ways and means and appropes last year, and perhaps I'm just not remembering correctly. But so after a committee amends our bill, like ways and means made amendments, and does it always go directly to appropes, does it come back to the committee respond to the amendment and then go to

[Speaker 0]: It does go to approves Directly front of always go back.

[Candice White (Member)]: Doesn't always go

[Speaker 0]: They don't usually they have a pretty full docket. It doesn't always skip to the front of the line, but it does go from it does not come back here.

[Unidentified committee member]: Okay.

[Speaker 0]: But it I would say that most I can't say the T bill. Most bills, they have the straw poll. If the Ways and Means amends it, usually the appropriation has the straw poll from the committee as to what they thought of the Ways and Means amendment. But in this case, it was brought up, and it was chose that it was not relevant, whether we did or didn't thumbs it up or down, to their vote on what they were going to see. Plus, we were not going to have possession of it, so they specifically said it didn't I don't wanna say the wrong quote, but it pretty close. It didn't affect their ability to do their work, probably somewhat of a weave or a straw pull it, whether it they did ask me what I thought, and I said that was pretty it was unanimous and sent over with full support. It's come back with a would have come came out with a significant change. Suspect there will be some significant reservations as we were very uniform in our support of town highways. But I suspect that they I said I suspect that it would still it would likely get a favorable overall straw poll. They did ask that, but somebody asked that, not the chair. The chair said they would be moving forward without that straw poll.

[Unidentified committee member]: But on the floor, when it's reported and the amendment comes up, it will come the question will come to transportation. And on Right? Yes. And on Tuesday, we

[Speaker 0]: will take the straw poll vote so that we will have that for the floor. Today, because we don't have everybody, we're gonna hear it all. They can watch the video and look at the documents, but we're gonna hear it. And then on Tuesday, we'll vote our straw vote. That's our plan.

[Chris Keyser (Member)]: So to that point, you've asked me to do the pilot. So that's gonna be in our building. We're gonna present.

[Speaker 0]: So when it goes to

[Chris Keyser (Member)]: the floor out there.

[Speaker 0]: Well, I yes. And we may I may very many make some change to that. But and I'll make that decision to let you know when time to we will still do our presentation of our bill, and then Ways and Means will get up and present Got an amendment. Their amendment. And then we'll go back to the entire bill whether and then they'll ask us what that will speak to the amendment. Right. And then the body will vote on the amendment, and then they will vote on the underlying bill without whether the amendment passes or not. That sound right? Anybody that's got more sense of Our resident historian partial parliamentarian is not with us there, but I'll do my best. We only do one bill a year. We're not quite as experienced

[Damian Leonard (Office of Legislative Counsel)]: as others. Yeah. Generally, happens is you report the committee reports the bill, then each other committee reports its amendments, if any. And then you go in reverse order and vote on the amendments. And you can vote down one committee's amendment but still vote on the other pieces. So and that has happened to some of my bills in the past where there's been a committee report that's gotten voted down. And then you have to figure out how all the other pieces fit together.

[Candice White (Member)]: And appropriations did not make an amendment. They just approved the Ways and Means Amendment.

[Speaker 0]: Correct. There was no amendment. Generally, And this is a case where I will defer over here. There was a significant discussion from the chair, and I believe chair and JFO had a discussion about a lot of times, some of our because our money is a big is a small a small chunk of the overall budget, but it's whatever, 9% of the state budget. Some things will get handled in the budget, the big bill, and not in transportation. And there was a discussion about whether they I didn't think it had not been determined when we were done this morning whether they were or we're gonna have some other parts pulled out and put into the big bill. So I that seemed like that wasn't happening, but it wasn't that's not set yet.

[Unidentified committee member]: So And that would be an amendment. They would change the bill. Let's say they wanna take out a small section of funding and just put it in the big bill.

[Speaker 0]: Then we would have an amendment

[Unidentified committee member]: to our bill. It has to be in the big bill somewhere anyways.

[Unidentified fiscal/appropriations staff]: That's exactly right. The Appropriations Committee did not amend the T bill. What we'll do, and just to sort of go backwards, the T bill is typically an authorizing bill, it's not an appropriations bill, so that's why both bills need to intersect, is that the T bill gives the permission, but

[Damian Leonard (Office of Legislative Counsel)]: it doesn't actually give you

[Unidentified fiscal/appropriations staff]: the money. So we've all made very few changes to the money sections, but what we'll work into the big bill is some references to the electric agreements made of transportation funds for like Drive Electric, Vermont, and things like that. And they'll show up as just one line, it'll be a sentence, but the Appropriations Committee did not make any changes, so that's in the middle. We'll be working over the weekend just to make sure all the technical stuff lines up, You'll see all the transportation related stuff end up on the budget. But that's just to transact what we're all authorized to the T Bill. And I think they decided to keep the interfund transcendental language of the T Bills community.

[Speaker 0]: Does that answer the questions that are in the process of what we're going through? So we're coming back. We have Patrick on the Zoom because of significant fortunate amendments that's related around mileage based user fee. Let's get it up and take a look. Guess tell us let's tell tell us what they did. Great.

[Damian Leonard (Office of Legislative Counsel)]: For the record, I'm Damian Leonard from the Office of Legislative Counsel. I'm pulling up the amendment here, which should be on the website as well. So the first there are four instances of amendment in the Plays and Means amendment. The first strikes out the pilot special fund. Two sections related to the use of the excess local option tax revenues going to the pilot special fund for general state aid for town highways. So that is sections fourteen and fifteen. They'll just be replaced with a deleted annotation. The second instance of amendment strikes out the mileage based user fee chapter that was in your bill and replaces it with a new chapter 43, which is now called road usage charges, and you'll see why in a moment. Subchapter one of that is the mileage based user fee. The purpose has stayed the same. The definitions have stayed the same. The big change or the biggest change is that there is now only one method for calculating the mileage based user fee in here. It is the end of the year accounting of how many miles did you travel between the two inspections or between your inspection and terminating event. The Ways and Means Committee eliminated the pay in advance or newly registered vehicles and the corresponding transition provision for vehicles that for any vehicles that wouldn't have had their first mileage reporting period covered by their infrastructure fee. In lieu of that later on, we'll see that there is an interfund transfer that covers at least some of the potential missing revenue. JFO is a better pair to talk to about that. I think as Logan mentioned the other day, any revenues are highly speculative at this point because we don't know how many newly registered vehicles we'll have and so forth. So that's the big change here is there's one reporting method initially. Later on, we'll also see that there is a report back with a plan to implement a pay as you go option, but that's not in the initial program.

[Unidentified committee member]: So one reporting in that previously that we left open the idea that you could self report, they might develop

[Damian Leonard (Office of Legislative Counsel)]: Pay as you go. That is not in the bill. What is what or that is not in their amendment. What is in their amendment is a requirement that AOT come back with a proposal to implement the self reporting pay as you go option and that they present legislative language as part of that next year so that the legislature can review it and then approve that as an option going forward.

[Unidentified committee member]: So this runs into rep Keyser's same issue. He'll be if I report this section, I'll be reporting on something in the bill that's not there. That will then get changed. Yeah. Okay. Then get changed. Okay. Yes. Yeah.

[Speaker 0]: And I want to be fair. I want to walk through this. Yes, put it. Get it there. We will study it. We will come back to it on Tuesday and Wednesday for more information as the details. I am anxious to make sure that the agency has a chance to work on it. If there are problems, there's very limited There's significant changes. I don't know how much they've been reviewed.

[Damian Leonard (Office of Legislative Counsel)]: I'll try to solve something. Yep. So the next.

[Candice White (Member)]: So, Damian, that's $43.00 3 mileage based user fee. That looks like

[Damian Leonard (Office of Legislative Counsel)]: Yep. That's it used to be subsections a, b, and c for three different

[Candice White (Member)]: Yep.

[Damian Leonard (Office of Legislative Counsel)]: Calculation options. The estimated fee upfront for newly registered vehicles, which has been removed. The pay as you go option or self reporting as representative Pouech referred to it, which has been taken out and replaced with a report back. And then the end of the mileage reporting period, where you've got your two different odometer readings and they measure the difference, which is left in, that's what you see as subsection A. So the the from a practical impact on this, it means that all EVs are on the same reporting method initially under the mBUF. It also means that in f y twenty seven, there will be no mBuff revenues because your mileage reporting periods will be starting, but you won't have any completed until midway through FY twenty eight. So And there is an interfund transfer later that relates to that a little bit. But again, I'll let you talk with JFO about the dollar amounts and look at that and hear from AOT on their thoughts on that.

[Candice White (Member)]: Okay. I'm just trying to mark up my printed copy. And I see you've got the annual mileage base. Then it now gets to the commissioner shall in section one. It looks like it's

[Damian Leonard (Office of Legislative Counsel)]: I had to delete some language that referred to other provisions.

[Unidentified committee member]: Okay. Just more. Rid of that. I'm just trying to figure out where this

[Damian Leonard (Office of Legislative Counsel)]: commissioner shall If it's helpful for committee members, I have a track changes version that shows the two m buffs. It starts from what passed this committee, and it goes to and it shows the changes made by ways and means. And I've got that for my own benefit to make sure I got everything and remember everything. But I can I will send a PDF of that to Gabby after I'm finished here? Yeah. And then you can see the differences. Yeah. That way you don't have to try to mark up your own copy.

[Unidentified fiscal/appropriations staff]: Yeah.

[Damian Leonard (Office of Legislative Counsel)]: B is the old subsection D. This is the calculation of the mileage based user fee. This has taken out references to the self reporting or pay as you go option. The mileage based user fee rate is in subsection C now. The exemptions in subsection D, which are found on page four of the Ways and Means Amendment,

[Unidentified committee member]: have

[Damian Leonard (Office of Legislative Counsel)]: added now EVs owned and operated by the state and EVs that are used in short term rentals. And we'll get to that. This is why there is now sub chapters here because we address them in a separate section. That's its own sub chapter. The concern that was raised around them is that because this is tied to registration in the state, you could avoid the mileage based fee if you're a rental company by simply buying the cars and registering them in another state that you operate in and then fifteen days for an individual to appeal the amount of the assessment. Ways and means extended that to forty five days.

[Patrick Murphy (State Policy Director, Agency of Transportation)]: And

[Damian Leonard (Office of Legislative Counsel)]: see, can't remember if you added this or if they did. You added this, so I'll skip over it. The refunds. I know that came in late in the process, but at this point, things are blurring a little bit for me. So the for the failure to pay the fee when due and the interest, they added in two things here. One is the ability to request a waiver of the interest or the amount due at any time, and they changed the language. So in the bill that came out of here, we'd use the phrase that the commissioner may waive some or all of the amount of interest if the commissioner determines that the overdue payment was due to excusable neglect. There was confusion about that term, and I think that was fair. It's not the best term. So they've changed it to be good cause existed for the delay in payment or that requiring repayment would constitute an economic hardship. And it allows the commissioner to either do this upon receiving a request for a waiver or on the commissioner's own motion. But it is up to the commissioner's discretion. So the commissioner can make that determination. You know, was there a good cause for this person not making a payment? Maybe the messages weren't reaching them, etcetera. So the penalty rate stayed the same. Suspension or refusal to renew registration stayed the same. The powers of the commissioner were shortened. And the reason for the shortening was that in in doing further review, we realized that after the general authority to administer and enforce the section, the authority to adopt rules, to adopt forms, and to contract with an account manager, the remaining authorities all mirrored what's already provided in sections 105 to 107 of title 23 and apply to the whole title. So just took that language out as duplicative. For the judicial review section, they added an administrative appeal before you have to go to court. So any decision first can go through a hearing officer before you have to file an action in court. So within forty five days of any decision, order, or finding of the commissioner, you can file an appeal that will go to a hearing officer at the department. And then if you're still not satisfied after that process, you have the option of going to Superior Court for an appeal. And then as I alluded to earlier, there's a new subchapter two, which is the EV rental vehicle road usage charge. So in our purchase and use tax, we have a 9% charge on motor vehicle rentals that replaces the purchase and use tax for those vehicles or rental cars. And so what this would do is add an additional 1% to all of those that then goes straight to the transportation fund. It doesn't go into the purchase and use tax. So it doesn't get divvied up between education and transportation. And so this would be collected by the rental company from the renter in the same way that they currently collect the other 9% charge. And we've tracked the rental charge definition that already exists in purchase and use tax to ensure that we don't end up in a situation where they're having to figure out different amounts to multiply those percentages by. So that's the changes to the mileage based user fee portion.

[Candice White (Member)]: And that rental car piece was added after the pleasure cars?

[Logan North (Joint Fiscal Office)]: Yeah.

[Damian Leonard (Office of Legislative Counsel)]: It's a new subchapter because it's different. It's more of a tax than a usage fee. It well, I guess we're calling it a road usage chart or rental vehicle road usage charge, but it's and it won't won't a 100% reflect road road usage for the rental cars, but it at least gets them paying into the system since they won't be buying gas in the state. Well, that at least was the thinking next door. So questions on the mBuff? Okay. They left the changes to the infrastructure fee the same, but then they struck out the mileage based user fee transition piece and replaced it with a new transition. So because the pay as you go and the upfront payments for new vehicles were taken out,

[Speaker 0]: this

[Damian Leonard (Office of Legislative Counsel)]: provides that your initial mileage reporting fee commences with your first annual inspection on or after January 1. And then if your initial mileage reporting period begins before you're required to renew your registration, so you're still covered by that infrastructure fee, they'll apply this would apply that infrastructure fee to your first mileage reporting MBUF bill if your registration is afterwards or before you actually get your vehicle inspected. So now you've got a registration without the infrastructure fee. There's no infrastructure fee credit applied to that first user fee bill. Does that make sense? So essentially, let's say you have a November 26 or let's say June 26 registration. So that will carry and you paid your infrastructure fee and it's a one year registration carries you to June 27. If your inspection is before June 27, so it's in that period that's covered by that infrastructure fee. Within 2027 versus 2026. Yeah. Yeah. So in 2027, so it's still within that infrastructure fee period. They'll give you a credit for the infrastructure fee you paid on your initial mileage based user fee bill. If instead your inspection is after June, you won't get any credit because you'll have renewed your inspection without any infrastructure fee in 2027. And so then they're gonna start collecting the full amount of the user fee after that point.

[Unidentified committee member]: Yeah. Back to your example of registration in July 2026. Sure. And inspection in April 2027. Yep. So I paid my register my infrastructure fee. I go over. I do get my car inspected. Yes. Get it inspected. And now have a mileage a mileage starting point.

[Logan North (Joint Fiscal Office)]: Yep.

[Unidentified committee member]: And so is that when my end buff starts?

[Damian Leonard (Office of Legislative Counsel)]: It is, but you won't get a bill.

[Unidentified committee member]: The previous couple months because we don't know what it is. So it starts then. And and in this case, I'll I'll get that $89 credit toward the next year. Yeah. And will I be given a I won't be given a bill at that inspection.

[Damian Leonard (Office of Legislative Counsel)]: Nope. It'll be at your next inspection. You'll they'll send a reading to the department. Yep. And the department will send you a bill, not the inspection mechanic.

[Unidentified committee member]: And and I won't be able to pay ahead of time?

[Damian Leonard (Office of Legislative Counsel)]: There is no current pay ahead of time or pay as you go option. We're gonna get to that in the next instance of amendment.

[Unidentified committee member]: So that's a big change. But okay. Yeah.

[Speaker 0]: Now wouldn't that also mean that there's no revenue?

[Unidentified committee member]: Right.

[Damian Leonard (Office of Legislative Counsel)]: There is no revenue coming in in fiscal year twenty twenty seven from the mBuff. Yeah, that is 100%.

[Unidentified committee member]: They're paying it. The EV users are paying it. They just don't have to pay it for the end.

[Speaker 0]: I'm not Yeah. We're out in discussion. But I would say, it doesn't mean that they're not accruing it and that they owe it and that they will pay it. But we're not gonna see

[Unidentified fiscal/appropriations staff]: the T funds anymore. Any

[Speaker 0]: any the time frame is what? Thus, the next section. Yes. Okay. Representative Keyser? There's no provision then

[Chris Keyser (Member)]: that when you purchase the vehicle, that that's when you report mileage?

[Damian Leonard (Office of Legislative Counsel)]: Well, when you purchase a new vehicle No,

[Chris Keyser (Member)]: any vehicle. Anytime you purchase a vehicle, you have to give the mileage.

[Damian Leonard (Office of Legislative Counsel)]: Yes. But for purposes of mBuff, this is talking about vehicles that are owned and registered in Vermont before this starts. Before

[Chris Keyser (Member)]: this starts.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. So representative Pouech, can I use you as an example here? So he, as we all know, owns an electric vehicle.

[Speaker 0]: We all know now.

[Damian Leonard (Office of Legislative Counsel)]: He's he's spoken about it quite

[Unidentified fiscal/appropriations staff]: a quite a bit on the record.

[Speaker 0]: And who remained

[Patrick Murphy (State Policy Director, Agency of Transportation)]: in it.

[Chris Keyser (Member)]: I'm just

[Damian Leonard (Office of Legislative Counsel)]: gonna let myself out. You did give him permission. Yeah. So he currently owns an electric vehicle. Assuming he doesn't raise that in between now and in December 31, this is the transition that applies to him. At his next inspection after January 1, that's when his first mileage reporting period will start. But if he were to go out and trade that in for a new vehicle, let's say, on January 1, because that's a convenient day, they would take the mileage of that vehicle on the day he buys it, and that would be the start of his mileage reporting period as a new vehicle.

[Chris Keyser (Member)]: So we go into March, and we buy a vehicle then. Let's see if I don't think I've got The a next, so January 1, we'll

[Damian Leonard (Office of Legislative Counsel)]: go into March. So a year from now.

[Chris Keyser (Member)]: Throw it up, I guess. So we're still gonna capture the mileage, and then they'll come around in March again, and there'll be an inspection and that mileage that was captured on the sale of the vehicle will be then that. So you're not gonna have to wait for two sessions of inspections. No. You say if it hinges all on inspections or yeah, whatever it is.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. Yeah. So it's it's tied to the sort of when you get a new vehicle, that's when you start. If you're if you have an existing vehicle, it's tied to your inspection schedule, which might be different. If you have a new vehicle, your odometer reading will start. And then when you get to your next inspection, it'll get red and you'll have a panel.

[Speaker 0]: We're gonna dig back into this in a deeper way on Tuesday. We definitely walk through. We can't change this anyway without an amendment to an amendment. So that'd be another big question. But we need preferably walk through understanding is where we're at, not detailed. Go ahead.

[Candice White (Member)]: I just wanna flag that I think when this is presented on the floor, a couple scenarios. Won't be presenting this. Well, m buff is gonna be

[Speaker 0]: We will not be presenting this language. We will present

[Logan North (Joint Fiscal Office)]: our language.

[Speaker 0]: Whoever presents from ways and means is gonna have to explain this. Sorry. I'm sorry. We won't defend or answer this.

[Unidentified committee member]: We'll do We'll have to We'll

[Speaker 0]: Whoever presents for them will

[Candice White (Member)]: have to We'll help you

[Unidentified committee member]: to have that at that.

[Candice White (Member)]: So I think that the more detail

[Speaker 0]: But we're not doing that today. I want you to know what they've done, and I do want the document that shows the side by side. And we certainly do need to understand that, but our representative will not be presenting this or defending it.

[Damian Leonard (Office of Legislative Counsel)]: Just make a note to do a side by side.

[Unidentified committee member]: Any interrogation that comes up will be followed by, I need to speak to the Legislinson. Well, that

[Speaker 0]: was for them to, yeah. Alright. Great. Alright.

[Unidentified committee member]: So

[Damian Leonard (Office of Legislative Counsel)]: clear as mud. We'll move on to the pay as you go implementation plan and report. So what they their final instance of amendment here is they struck out the allocation of f y 27 mileage based user fee revenues because, as we discussed, there will be none. And they've inserted in lieu of that two sections. The first is a direction to the Secretary of Transportation to submit a written report to this committee and your colleagues on the other side of the wall, as well as your senate counterparts regarding the potential for offering a pay as you go option for the mileage based user fee, including a plan for implementation of the program with detailed information regarding anticipated staffing, administration, and information technology necessary to implement and operate it, anticipated costs, and legislative language necessary to enable the pay as you go program. So yeah.

[Unidentified committee member]: I'm confused then. But, potentially, there is income that will come in in 2027 for mileage based user fee. If I buy my car in January 2027 and my inspection sticker is December 2026, I'll come around to December and it'll get inspected and I'll have a model space user fee based on those that

[Damian Leonard (Office of Legislative Counsel)]: That that'll be fiscal year '28, though. Oh, okay. Of the way we count the fiscal years. There theoretically, there could be a very minimal amount of mileage. If someone buys a used EV and it has an inspection date, that's a short period because it's been sitting on the lot.

[Unidentified committee member]: Okay.

[Damian Leonard (Office of Legislative Counsel)]: So there there is that possibility. It's likely to be very minimal if if it occurs at all. But that is a theoretical possibility. Oh, are there other questions?

[Unidentified committee member]: The advantages of all this is a great material for Canberra.

[Unidentified committee member]: I

[Damian Leonard (Office of Legislative Counsel)]: like the silver lining approach in this. It's nice. All right, so the next is I like your

[Speaker 0]: own flat sheet. I wonder why we generally don't get late into the day on Fridays. Keep going.

[Chris Keyser (Member)]: So we're going to get

[Speaker 0]: You got to watch this too. Right.

[Damian Leonard (Office of Legislative Counsel)]: So anyway, the last piece of their amendment is this fund transfer. So notwithstanding the requirements for the use of the transportation infrastructure bond fund or TIB fund to the contrary, In state fiscal year 2027, the amount of $2,200,000 would be transferred from that to the regular transportation fund. Of that amount, 1.7 would be allocated to in state fiscal year 2027 to general state aid for town highways. This is, in addition, would be appropriated along the same formula lines, but be in addition to the base appropriation provided for the general state aid for town highways. You'll notice that there is a $500,000 difference between the transfer and the amount that's allocated to town highways. So my understanding of their intent next door is that this $1700000.0.01 time to general state aid for town highways is in lieu of the pilot fund ongoing transfer that was in sections fourteen and fifteen, and that the 500,001 time that's for general transportation fund purposes is to replace any potentially lost revenues from the the changes to how revenue is collected from the MBUF.

[Unidentified committee member]: Which we had directed to town byways.

[Damian Leonard (Office of Legislative Counsel)]: No. So that was just transportation fund. It is also worth noting that there is this 1% on EV rentals, which I cannot give you an amount on that, but that would be coming in in fiscal year 2027 after January 1. Yeah. Assuming there are EVs that are rented in Vermont. Is

[Unidentified committee member]: there a way? Well, I guess there

[Speaker 0]: would

[Unidentified committee member]: be. Sort of based on the formula, know every town gets a different amount based on their road knowledge, but it would be interesting to know what approximately might go to the raised towns.

[Speaker 0]: We did hear a little bit of testimony of what that might mean before, but I'm sure that JFO can walk us through that pretty quickly or give it to us on Tuesday. When you divide it up amongst all the different parts of our biology, it's not

[Unidentified committee member]: a lot

[Unidentified committee member]: of We're reporting to my town. It'd be nice to say, the way where money would be all of that money would depend

[Speaker 0]: on You heard a million dollars equals x amount.

[Unidentified committee member]: Yeah, I mean it's four percent anyway, it's more.

[Speaker 0]: We'll hear that on that.

[Unidentified fiscal/appropriations staff]: If you want to jump in with paperwork. I was going to say this chair that I'm going to volunteer Logan for this. I'm going to help because I've already done this, but this is not a difficult thing for us to do. VTrans actually has on their website all of the town mileage by class. It's a matter of putting it into an Excel sheet and doing some kind of making it

[Damian Leonard (Office of Legislative Counsel)]: fledging with.

[Unidentified committee member]: Thank you. We'll see a little bump.

[Unidentified committee member]: Would Yeah, be nice if people might

[Unidentified fiscal/appropriations staff]: Yeah, so when go back at the end, every million you run through the program averages out to be in the neighborhood of about $3,000 but there's a lot of variation.

[Speaker 0]: Think

[Unidentified committee member]: the donuts from the road to

[Speaker 0]: some level, bigger issue is that this is a one time money and what we headed out looking for was some commitment to some ongoing structural change. And I do recognize that improvements, changes in the building happen incrementally, and that's part of why we're not understanding and digesting it. It is a goal of commuting often, and it usually is, to find more help for towns. So I'm supportive of that portion of it. We did not get any sort of systemic or incremental piece. I also want to be clear, this is money that was already in the transportation offers. This is not new money. Is us. Is taking money and allocating money that was that was our was sitting there in a fund unobligated, and we have obligated it. This is not the Ways and Means Committee finding new money for town highways. This is not new money coming from anywhere else. This is already in the agency's coffers, and they are redirecting it to town highways. I just want to be clear that this is not them coming Nobody else in the building is coming to help. Nobody came with new money. We took it from another portion of the transportation budget, or they took it from another transportation portion of the budget. So I do not want anyone to leave here thinking that somebody came up with some new help for Town Highways. But it is going to town highway. It is I'm sorry. Not new money. It is town highway, though money they didn't have before, and that is important to us.

[Unidentified committee member]: Using it because we're notwithstanding the actual use for the TIP funds.

[Damian Leonard (Office of Legislative Counsel)]: The reason we've not withstood that is simply that the transportation infrastructure bond money, its primary use is to pay debt service on bonds, which fortunately we don't have currently. But its secondary usage is to pay for major infrastructure projects, road, bridge, etcetera. And this puts it into the general T fund pot to be used for any purpose. And so that's why we not withstood it because we didn't want to didn't want to force them to try to juggle funds to figure out, well, we can only use this 500,000 for these three specific purposes. So that's why we not withstood it. It's more, we like to say, belts and suspenders, to assure that it can be used easily.

[Unidentified committee member]: I was here when we set up to that front.

[Unidentified committee member]: Okay. Yeah. You know, we we can feel good that the MBUF is new money for the transportation fund. These other things are really shuffling money around. So, you know, it's up to the transportation.

[Unidentified committee member]: Right. There

[Unidentified committee member]: is to continue to find new money rather than

[Unidentified committee member]: some some little bit of structural change. Yeah.

[Unidentified committee member]: No, it's good. It is new money. So that's a good thing.

[Speaker 0]: Patrick, are you still out there?

[Patrick Murphy (State Policy Director, Agency of Transportation)]: I am.

[Speaker 0]: I'm gathering you probably only saw this yesterday, this language piece, or would you be willing to comment on your awareness of these 11 pages and whether the agency has had any opportunity to input on it or a chance to start working on it in any format?

[Patrick Murphy (State Policy Director, Agency of Transportation)]: Sure. For the record, Patrick Murphy, State Policy Director for the Agency of Transportation. These are changes that were made in house ways and means yesterday afternoon. Took some time to work through this morning. You know, it's not an outcome that we were anticipating, and we do have some concerns with the approach. So particularly around the removal of what would be options for people to make things more convenient. So the removal of pay as you go as a potential option for people where it might fit to pay more in line with how others pay the gas tax. Then there is a question just about how revenues will be seen or not in calendar year 2027. So we we knew with this transition that there would be it would be hard to predict what the revenues would be in the first several months because you have a couple of things going on, at least with the original language that was proposed. You have the transition where people can apply their EV infrastructure fees against their future mileage reporting period, but then you also had the ability of people to to select a payment frequency that worked best for them. So whether they were for some people, that's going to be the ability to just pay upfront and forget about it for most of the year. For others, it would be to pay on a quarterly or monthly basis. So we knew in the in the first on ramp of this program that it'd be unpredictable revenues, but that over the long term, this is going to be obviously a net credit to the transportation fund. This language from houseways and means just further extends that unpredictability of revenues. What I understand from the language is that you will now, your reporting period for mileage will begin in 2027. It will end at some point in 2028, and that is when you will be first invoiced for the amount of driving that you've already done. And now you'll have the opportunity to select whether you pay for that upfront or quarterly or monthly basis. So you're extending out into the next year payments for driving that's already been done on the road network, which, you know, phrases different questions. It's certainly not analogous to how people are paying the gas tax, where everything's owed once you put that however many gallons of gas into your tank. But it does set up some situations, I'm sure, that would have to be further figured out what happens in the case when we have this description of a terminating event. What happens when you sell your vehicle? What happens when your vehicle is totaled? Or something happens where you no longer own your vehicle, but you still have a bill that is attached to that vehicle, that could cause some hardship where you need first to be able to pay more of a lump sum than you'd be expected to in this situation, where what we've said is you assessed an estimated amount, and then you have the ability to pay that as you go, and then it's reconciled at the end so that you have only a small amount left to pay or a small amount that's credited towards your next mileage reporting period. I think that's going to work better logistically, and I think it's fair both to the user, but also to transportation fund. So we do have concerns with that. There's other language about rental cars. You know, did reach out to staff at DMV to understand what the development of IT work that would need to happen to allow for that possibility. There is a cost to that with our contractor that might be in the ballpark of $50,000 or more. I don't know how many electric vehicles are currently registered in Vermont that are rental vehicles. Looking into that, not sure what 1% represents in terms of whether it's an adequate proxy for how much mileage is being traveled in those vehicles. Then there were some questions. We did reach out to representatives of the industry to understand how the logistics of a rental car company paying this, so it seems like maybe that's not as big an issue, but those are other things to consider. I think the biggest question is around this complete change in how and when we're going to begin collecting revenue, which is a surprise to us.

[Speaker 0]: Okay. On a walk through basis on a bigger general picture, is there any more questions between the agency and our alleged counsel on sort of the language? We're gonna get a either a comparison or what's different, some kind of way of understanding their our alleged counsel. We're going get some kind of way of explaining and seeing the difference between what theirs does and what original language does. I'm going to ask the agency to sort of look at that as well and come back at these issues that you have. Try to outline them for the committee. We'll book some time on Tuesday and potentially Wednesday. That makes me wonder in this question, we're gonna ask our JFO to join the seat now whether this is a question they can answer based on community, what they heard in the House of Appropriations, or we'll go to the speaker's office and get an answer whether they're looking for us to present by Wednesday or whether it'll be Wednesday or a Thursday or when anybody's heard about the timeline yet. This is a pretty substantial 11 pages and we wanna make sure we understand it and that we hear something on potentially more on it. We may not be ready Tuesday or Wednesday. Don't know what the dates might be. I don't know whether that's whether I would like people to know what they have for a time line to be ready to present and or question and defend. So we're gonna have committee time on this Tuesday, Wednesday, find out what we don't know what the floor is. I'll see if I can find out about that, what the plan is. But I also want hear the financial pieces from Logan and Representative Burns.

[Unidentified committee member]: Trying to let you know I have to leave to you.

[Speaker 0]: Definitely, I appreciate that. I'm certainly trying to want to do that. Agree with you. Representative White?

[Candice White (Member)]: I have a question, I think, for Patrick. Did we talk through is there a penalty if you're you're due for your inspection? It's when your mileage based user fee is gonna be calculated, but you don't go in that month. And maybe you don't go for a couple months, which is kinda, you know, not uncommon practice. Is there a penalty for that? I know there's a penalty for, like there's interest if you don't pay within a thirty day time period, and then it continues to compound for the entire year. Just thinking about cash flow, we're thinking there's going to be a lot of money coming in for when inspections are due, but actually they're not happening in a timely fashion.

[Patrick Murphy (State Policy Director, Agency of Transportation)]: I'll defer to Damien on this newer language, but I believe there is a penalty basically on interest. So if you're, basically you're extending your reporting period from twelve to fourteen months, know, that would, so in essence, you'd just be paying more of those miles between month 12 to month 14, right?

[Candice White (Member)]: You're two literal miles, yeah.

[Patrick Murphy (State Policy Director, Agency of Transportation)]: Yeah, that's right. Yeah. Then if And you're, you're not, if you, you haven't paid beyond that, then there's, you know, after the thirty days or whatever it is, you're accruing more interest on that. But the biggest thing is still, if your balance isn't paid when you go to register your vehicle, you're not able to move forward with the registration. And most people are going to want to be able to drive, to use their and vehicle so that is the biggest sort of compliance mechanism.

[Damian Leonard (Office of Legislative Counsel)]: Damian Leonard, Led to Counsel. Just to clarify, there is also the ninety eighth percentile assessment option for the Commissioner. If there is no mileage report in a reasonable time, the Commissioner can send you an assessment for ninety eighth percentile mileage. So your MBUF payment would go up from whatever the actual is, it's averaged roughly $154 to I think the estimate is roughly $375 And that is in both versions, house and waste means, it was not changed.

[Candice White (Member)]: And is there a timeframe Yeah, associated with so it's nebulous. Yes. So we don't know whether it would be assessed if you're a month late or six months late or

[Speaker 0]: Logan, welcome back to the committee.

[Logan North (Joint Fiscal Office)]: Thank you for the record. Logan North, the Joint Fiscal Office. I have a fiscal note for the bill as amended by ways and means, which I presented downstairs this morning. By Tuesday, I will also have there is a draft version of the bill. I think I'll list off this room that would be sort of updated and finalized if you wanna look at sort of what it looked like from your bill versus what it looks like from after being amended. That'll be ready by Tuesday, but I'll just walk you through some of the things in the bill as recommended by the committee next door. Eleven and twelve, those are the same as in your bill. Those are the transportation alternative grants program. Drive Electric is still in there, the one time appropriation. Then the big changes, the mileage based user fee. So, as mentioned, right, the state won't assess its first MVA until at the earliest 01/01/2028. But starting 01/01/2027, we will repeal the EV infrastructure fee to $89 that is currently being levied. So we won't generate any money in fiscal year twenty seven, but we will be losing the revenue from the EV infrastructure fee. I estimated that in fiscal year twenty seven to be around half $1,000,000. Fiscal year twenty eight, right? So, fiscal year starts sort halfway between a calendar year. So we'll get about six months of collections, right? If we start assessing revenues on 01/01/2028, that'll be We'll start collecting money in the second half of fiscal year twenty eight. The issue or the sort of unknown in how much revenue we'll be collecting is that you have options of frequencies in which you can pay. Someone might pay their entire assessment upfront, someone might choose to do it monthly. So, we might get six months of payments, we might get the whole assessment, we might, if you're assessed in May, we might only get one or two months of payments. So, the estimate I came up with last night was between $350,000 to maybe a million, if everyone sort of pays upfront, we get the most in the first six months. Loss from the EV infrastructure around $1,200,000 So even in FY '28, estimated revenue would be Net revenue, if you take these two in account would be a loss somewhere in the range of maybe 200,000 to $850,000 Then in FY '29, we sort of gotten through this transition period and most vehicles or all vehicles should be on this M bucket being assessed for the miles they've driven in the past year. Collections then are estimated at $2,600,000 and then lost EV infrastructure fee revenue is about 1.4. So in '29, and then into the future, would expect to generate positive net revenue from this. I estimated around $1,200,000 in FY '29, and then this will continue to grow as EV adoption also continues to grow. Both of these numbers grow, right? So, as EVs grow, we would have collected more in the EV infrastructure fee, but because the average MBOP is higher than $89 we will sort of gain more and more revenue as this program goes into the future. I'll say that there are a number of unknowns with this. There have been some changes that I have not been fully able to incorporate to the extent of the rigorous analysis that really needs to be. So these are very much just estimates, but sort of give you a general estimate of what we might be seeing for numbers related to that. The road usage charge for the rental vehicles, the EV rental vehicles, this again was analysis I did last night using the current revenue that we generate from the 9% tax, I figured out what 1% of that was, and I did a very rough estimate of how many, the percentage of EVs as a total of all vehicles in the state and said that what if rentals also represented the same amount and got essentially roughly $20,000 give or take some money there. I would obviously wanna actually know how many EVs are in rental fleets to really be able to tell you what that number is, but that was a rough estimate that I came up with. This EV fee is the same as in your bill. This is the other, the plugin one. You all know about that one. And then lastly is this transfer. So it proposes to transfer $2,200,000 from the TIP fund that was sort of left in the bottom of the TIP this year, transferred into the transportation fund, 1,700,000.0 of that will go to town highway aid, as you all know, and then the 500,000 will sort of be left to cushion and make up for this potential revenue loss of half $1,000,000.

[Speaker 0]: As a comment for those preparing, just wanna say in ways and means and in approach, there was questions on of course mileage based user fee but there were questions on Drive Electric on both committees, talked about FYI, September. And also there were questions in both committees on what's transportation alternatives about. So just be aware of that explanation, of course they didn't get necessarily an explanation before they asked their questions, but think about that when you're presenting intersections and they don't deal with it every day and they don't know what the terms mean and whatnot. So they don't know what those programs are supposed to get done. So we have to think about our four members not necessarily understanding that piece. But that's a sign that they're not familiar with the programs, and they already ask questions in those areas. I'd expect those to more ease the piece. Questions on this? Also, just

[Logan North (Joint Fiscal Office)]: make one comment. Representative Chloe reminded me of hers. There is updated, I think, the website versions of the budget on a page and the comparison that reflect what happened next door by Tuesday. I'll also have comparisons for this as it's passed out of this committee and that committee. So if you want to sort of look at all those and compare them, given the turnaround, I have not had time to do all of those yet.

[Unidentified committee member]: Personality? I'm just on the section 23, that is indicated as one time point

[Speaker 0]: But I will say that conversation is out there. You will see if you read legislative reports from the chamber commerce, the chamber of commerce, there's a dialogue going on that's now, we've spent along with many other people driving that dialogue related to the T funds now and here related to the highways and towns and, of course, Pilot. But I am hearing and seeing already the amount of people that are discussing it is up. And that is part of this goal. It's today's goal to get more money for town highways, I suppose, the way that's that is addressed. And also, the goal is to drive the conversation about

[Damian Leonard (Office of Legislative Counsel)]: the need for structural changes to

[Speaker 0]: fund Sustainable funding. To sustain. And we hear that in public transit, which might be what we go next to after, know, there's a meeting next Monday about that.

[Damian Leonard (Office of Legislative Counsel)]: It's something we've been invited to. I

[Speaker 0]: agree. And I also responded to the one that cabinet was working on. I'm asking you to look at it. You can ask more questions if you like, but we need to figure out what we are going to comment and not comment in response to the amendment. And we're going to hear more and update the rest of the members to get updated as they choose. And then we'll take a vote on it. Have to take a vote on Tuesday. As soon as I find out what the floor schedule is for us to have to come, I'm probably trying to ask for it. I don't know what the objective how quick it has to get done. So an extra day would probably be good for our community. But I also, which is the part where we sent it out very unanimously with strength of eleven-zero, so we've got to figure out what does that mean to us. If we

[Unidentified committee member]: were to interrogate those memes on their amendment, maybe the first question is, can you tell us how long you worked on this bill? And list of people who testified for any changes?

[Candice White (Member)]: Yes.

[Speaker 0]: And that is what I, that reality, that question, that exchange, this process is gonna be unusual for us. I haven't been doing this a long time, but this is a little more controversial than our standard, perhaps some of the, I think a couple years ago when I was a new member of the PN, the fee issue was obviously significantly controversial, there was tons of questions on the floor. But overall, I suspect generally the T bill doesn't generate a huge discussion. There is discussion out there.

[Damian Leonard (Office of Legislative Counsel)]: We have to figure out how

[Speaker 0]: we're gonna address it. That's why I appreciate you staying late and or saying, and at least knowing what we're talking about. Yeah. So is there

[Unidentified fiscal/appropriations staff]: other questions?

[Speaker 0]: If not, okay. With all of that