Vermont Legislature SmartTranscripts:

[Speaker 0]: Yep.

[Sen. Rebecca "Becca" White (Vice Chair)]: That's long.

[Speaker 0]: Yeah. Yeah. Okay. Thank you.

[Sen. Rebecca "Becca" White (Vice Chair)]: You're live.

[Sen. Richard Westman (Chair)]: This is Senate Transportation, and we are resuming our testimony. And we have here with Logan, and he is going through the about the DNP miscellaneous bill.

[Speaker 0]: For the record, Logan Rivera with the Joint Fiscal Office. I believe I am discussing s two eleven, which is an act related to the motor vehicle inspections. Uh-huh.

[Sen. Andrew Perchlik (Member)]: You better coordinate with the chair.

[Sen. Richard Westman (Chair)]: Okay. It does say inspections, and I'm red wrong. I'm corrected.

[Speaker 0]: No worries. Just wanna make sure I'm hearing the right thing. So, yes, you show a fiscal or not a fiscal, a preliminary fiscal impact to this bill that I'll walk you through. And then there's a chart that I put together in the hopes that it would help clarify where some of the numbers are going from. We'll see if I accomplished that. Just joining now, and then I'll put it up on the screen. So, as you all know, this bill proposes to change the required vehicle registration or vehicle inspection from an annual to a biannual process. So, instead of every year, every other year, it would also increase the fee collected from an issued inspection sticker from $8 to $16 And the first two paragraphs under that fiscal impact are essentially just saying that there are still some outstanding questions that I'm working with DMV and Legis Council to clarify, some which might have a fiscal impact. I've noted those below. I can mention those, but this is not a complete analysis of the potential fiscal impacts, but I will share with you I see as probably the largest impact that we know of right now. So, in this third paragraph, well, I guess I'll start with some assumptions. So, in trying to estimate the revenue impact from this change, I had to make a number of assumptions and I worked with DMV and coming up with these. The first major assumption is that currently the bill has an effective date of 07/01/2026. You heard from the DMV that they feel like they can't get that implemented until 01/01/2027. So, my estimation is taking that into account. I also think there is a fiscal reason why it would maybe be prudent to push that out to at least 01/01/2027, which I can speak to. This analysis also uses an average of three year inspection data ranging from 2023 to 2025 and assumes that all variables remain constant over time, so that what we had over three year average continues. And then additionally, it assumes full compliance with the stated inspection requirements. So, people get their inspections when they need to get their inspections. And that inspections happen in an equal monthly distribution. And the chart that I have here breaks that out, and I can speak to why that has to be the case. So, the third paragraph there is the fiscal impact. So, as a result of these changes, it's estimated that additional revenue of roughly $2,000,000 will be generated in FY 'twenty seven, 900,000 in FY28, and then 300,000 in FY29 and beyond. And I will explain why. So, trying to figure out which is the easiest way. I'll read it here and then we can switch to the chart, which might make more sense. So, part of the revenue generated in the FY27 and the FY28, and then all of the revenue generated in FY29 and beyond comes from transit buses, school buses, and heavy trucks, which will not be impacted by the two year inspection, but will be required to pay the new $16 fee. So, they'll still be getting, as it's currently written, they will still be getting yearly inspections, but they will be paying $16 per inspection period instead of $8 as it is now. So that's where some of the revenue is coming from.

[Sen. Wendy Harrison (Clerk)]: Not, I just want to be honest I with have not that implication, you. Although I do think it is serving a purpose revenue wise in the fiscal note. And I'm not saying one way or the other on my perspective on that.

[Speaker 0]: That was first flagged by the DMV, so I should give them credit for that. But yes, that is something you may want to discuss, whether that was the intent of the bill or not. So then the remaining revenue generated in '27 is due to the nature of the transition, which I'll walk through from yearly inspections to every other year. So essentially in FY '27, one half of all vehicles inspected will pay the current $8 fee and receive a one year inspection. And the other half of vehicles will pay $16 and receive a two year inspection. But that has to do with when we're implementing it and making it so that we sort of shift the cost pressures between fiscal years. So, what you get from the first year is one and a half times our yearly revenue, which is roughly $4,000,000 So, this would equal about $6,000,000 in the first year due to that transition period, the gain of about $2,000,000 And then in FY '28, the increased revenue is due to new vehicle inspections. So, vehicles new to Vermont that are not fitting into one of the current cohorts that we have, as well as those previously mentioned buses and trucks. And then before I jump to the charts to walk you all through this, I just wanna make note of a couple potential unknown physical impacts, but that I'm working with DMV and they are talking with the vendor to get some data on is costs associated with changes to the physical inspection sticker, whether we need to change it in any way, make it stickier or something like that, that could pass costs. There was a question of whether we'd have to buy back some of the existing stickers that have been issued to the vendor after the move. I don't know if that'll be a case. And then changes to the vendor contracts. All these, I think they're speaking with the vendor this week, I heard. So hopefully by next week, be able to gear on some of these things. And then some other ones I just mentioned, I don't know that these will have fiscal impacts. Changes to inspection material or inspection training. That'd be a question for DMV. I don't know that that is the case yet. And then you heard yesterday from some people related to the EPA and the SIP plan. So, I have to reach out to them and see if they have any expectation of increased costs related to any changes related to emissions testing or modeling and stuff like that. So, those are the ones that I know of now. And then if it'd be helpful, I can quickly walk you through this chart that sort of lays out how inspections might look when we do this switch.

[Sen. Richard Westman (Chair)]: Go ahead.

[Sen. Wendy Harrison (Clerk)]: And I apologize for arriving late, so perhaps you've already addressed this. But since the way the bill is drafted is 07/01/2026, how difficult would it be for you to look at that for and instead implement implementation date based on, I think the DMV said it was like January or 2020.

[Sen. Richard Westman (Chair)]: '30. Yeah.

[Sen. Wendy Harrison (Clerk)]: Good. Yeah. How difficult would it be for you to

[Sen. Richard Westman (Chair)]: To assent you this assumption in the second paragraph, he said, because of testimony he went to.

[Speaker 0]: Yeah. My analysis assumed that you'd be starting January 1. I thought that made sense. And also, there is a sort of a fiscal prudence to doing it within the middle of the fiscal year. Obviously, that would maybe change in the bill for it to activate action, I assumed that at the end of the You

[Sen. Wendy Harrison (Clerk)]: know, well done.

[Speaker 0]: So then I'll just jump quickly to What else? It should look like a screen. Right? Do have a second? Apologies.

[Sen. Rebecca "Becca" White (Vice Chair)]: So are you going to a different topic or the

[Speaker 0]: same topic? Same topic. I'm gonna go to the chart. Okay. Hopefully that will So I've put together this chart that you have in front of you and then I'll explain how this all works out. We'll see how well I did. So up there at the top, these are the three year average per inspection. And these are the numbers that I got from the DMV and that Renee presented to you. So, I just took the average and then I rounded so that it is easier numbers because inspections aren't exact. Numbers, they will fluctuate in future years, but for the analysis. So, essentially what we have starting in FY27 at the top there, we'll call it 42,500 inspections every month is the estimate. So, if this switch happens in January 2027, you'll have six months where 42,000 people every month will be getting a one year inspection and paying $8 Then you'll have half of vehicles getting a two year inspection and paying $16 So, if you do that math, it comes out to about one and a half times our current revenue, which is $4,000,000 so $6,000,000 It'd be an increase of 2,000,000 over current. So then you have, after FY 'twenty seven, you'll have approximately half of the Vermont complete on the two year cycle. Starting in FY 'twenty eight, you'll get that other half who will switch onto the two years. They'll be paying $16 and then you'll get not nothing, but you'll get a smaller portion of, this would be the buses, transit buses, heavy trucks, and then also new vehicles to Vermont that are coming in in these months and needing to register and get inspected. So, the estimation for that is around 8,500. This could fluctuate a little bit, but I think this is a good estimate. When you do this math, we get about $900,000 above our current revenue, so 4,900,000.

[Sen. Wendy Harrison (Clerk)]: Sorry, but what was 2026, I guess? So, you're saying 6,000,000 is a bump up potentially.

[Speaker 0]: Yeah, so estimated current revenue, three year average I did was about $4,000,000 Okay. Or what it should be, Actual revenue is a little different than what, for various reasons that I can get into later. But if you do the rough math, it's about $4,000,000 If you do all of our vehicles, expected at $8 for a one year inspection. So then, in FY '29, you sort of have all vehicles on this two year cycle. So, in the first half of the year, it'll still be those new vehicles and then the buses and trucks, as I mentioned. Then you'll have that first two year cohort, that their second year will be coming up, so they will get renewals. It equals out to about a $300,000 increase. And then going forward, it's the same with just sort of that shifting pattern. And by having the program start on January 1, we can sort of separate it out. So, half of people are getting a new year, and then half there'll be a lesser amount. If you did it at the beginning of fiscal year, you would have a year where it'd just be a very small amount of people getting an inspection. So, this way you break it up by fiscal year, which helps lessen the impact.

[Sen. Andrew Perchlik (Member)]: On your bottom row of each fiscal year, the year inspections, so 01/28/8500 of the yearly inspections of the trucks are plus these.

[Speaker 0]: Plus the sort of estimated new new vehicles new to Vermont inspections. So these are vehicles that you bought one in Florida and you moved to Vermont and got the 500. That's in that 8,500.

[Sen. Andrew Perchlik (Member)]: So why would the trucks and bus be in the yearly inspections every year? Like for January 29, would they?

[Speaker 0]: So the trucks and buses would still be subject to the one year inspection cycle, so they would have to get inspected every year.

[Sen. Andrew Perchlik (Member)]: Is their number added into the 36,600?

[Speaker 0]: The trucks and buses, yes.

[Sen. Andrew Perchlik (Member)]: Okay, so I was just expecting to see him on that

[Speaker 0]: bottom line. Yes, I just added them.

[Sen. Andrew Perchlik (Member)]: Does that help you? Totally, yeah.

[Sen. Rebecca "Becca" White (Vice Chair)]: Thank you. So, you. It'd be good to know the impact specifically on the buses and the school buses.

[Speaker 0]: So, that's sort of the revenue that we've gained in FY '29 and beyond that 300,000 delta, that is coming from the trucks and the buses, the heavy trucks.

[Sen. Rebecca "Becca" White (Vice Chair)]: Right. But to know them individually or at least know- What each one would be. Well, it's 30,000 units total, roughly, then I could do that math.

[Speaker 0]: Right, I could send you that as well.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, because I'm just saying, especially with transit, maybe not for the school buses, but the state's gonna end up paying that.

[Sen. Andrew Perchlik (Member)]: It's a thousand buses, transit buses.

[Sen. Rebecca "Becca" White (Vice Chair)]: Right. I see that. But then I don't know. Yeah. So maybe it's just the extra 16.

[Speaker 0]: For being For eight. Eight. Eight. So Yeah.

[Sen. Richard Westman (Chair)]: I think there are other questions. I think, at this point, Megan, if you could take us offline. Okay. Okay.