Vermont Legislature SmartTranscripts:

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

[Sen. Richard Westman (Chair)]: It is Thursday, February 12. Is Senate Transportation, and we are talking on continuing our little education about local option taxes, charter changes, and we have Tucker Anderson from Lexington.

[Tucker Anderson, Legislative Counsel]: Well, good morning, everyone. Tucker Anderson, legislative counsel. From what I understand, the committee this morning wanted to go through three big picture subject areas related to local option taxes. The first was some of the history of '24 VSA section one thirty eight, which is the local option statute that is incorporated into Vermont's general municipal law, and then to talk about, the chartering procedures and the adoption of local option taxes through charters, which is a practice that has large largely faded away because of some updates, just over the last year and a half to the local option tax statute that authorizes municipalities to adopt local option taxes without going through the charter procedure and without having to qualify under these former requirements of 1997 act 60. And finally, we can wrap up with some discussion about what happened after those recent updates. I can even show you a map that your talented and hardworking Center for Geographic Information has put together that shows you the map of the local, often taxed municipalities. So while I am in a very tardy way joining the Zoom meeting and getting ready to share my screen, I'll give you some background on how Vermont's municipal law operates. So in the legal hierarchy in our state under the Vermont constitution, the general assembly controls all of the powers that a municipal corporation has. Dillon's rule. That is correct. Although, we will get to Dillon's rule in about ninety seconds. The first thing that you need to note is that under section six of the Vermont constitution, the general assembly, as part of its supreme legislative authority, has the power to constitute towns, cities, and boroughs. That means, effectively, all municipal corporations, from your counties to your districts, to your towns and cities, all the way down to the smallest incorporated villages, and even the unincorporated unified hounds and gores of Essex County. So Just Essex County. Just Essex County. That's where the UTGs are. There are other gores that exist, but the unified fountain gores are just in

[Sen. Richard Westman (Chair)]: Since you're at least one or two in the South There are. Bennington or They're not

[Tucker Anderson, Legislative Counsel]: I live about five minutes from Agora that's actually Well, that's the fuel score. Yes. But in the South, it was, like, Flossington. Mhmm. And there's one that relates to Wilmington, which might be what you're talking about. What's the difference between Agora and Unified? The UNIFIED GOREs have a unified governmental body called the Board of Governors. And the Board of Governors operates all of their quasi municipal government administration, whereas all the other GOREs are assigned an individual supervisor by the governor.

[Sen. Richard Westman (Chair)]: An individual supervisor? That is correct. How many of those are there? Three. Three. Which

[Sen. Rebecca "Becca" White (Vice Chair)]: And they're gonna have to

[Sen. Richard Westman (Chair)]: pay We know Eddie his girlfriend.

[Tucker Anderson, Legislative Counsel]: Lewis or Fernand. Lewis and Fernand are part of the UTGs, I believe. Okay. Yeah. So

[Sen. Wendy Harrison (Clerk)]: that there's a contact for every entity, I guess.

[Tucker Anderson, Legislative Counsel]: Yes. It allows for property tax to be collected.

[Sen. Wendy Harrison (Clerk)]: Oh, there we go. It's not a hi, how are you? Give us a reminder.

[Tucker Anderson, Legislative Counsel]: There are basically no municipal services. It is just an individual who is there to assess property.

[Unidentified DMV representative]: Okay, tax myth.

[Sen. Richard Westman (Chair)]: There are some things that are universal Yes, in

[Tucker Anderson, Legislative Counsel]: and land that becomes municipalities. So within that, there's also the power to grant charters and incorporation in section six, subject to section 69 of the Vermont constitution, which was adopted in 1937. And under section 69, the state retains the authority to, through special law, incorporate individual municipal corporations. There's actually a list of what is known as private l m f ella Mazinari corporations that follow municipal government. In section 69, the general assembly retained the authority to create those corporations through special law as well. So what is a special law? Special law impacts one individual entity, and you refer to them colloquially as charters. So that is where the chartering authority that the general assembly has is retained, is in section 69. Now, started by saying all of the power that municipal corporations exercise has to come through this branch of government. That is because you sit in a position of patronage and control. That's the phrase that the constitution uses over those municipal corporations. And county and local governments are granted zero authority or power under the Vermont constitution, which means they are purely creatures of statute. Every single shred of authority that a municipal corporation has or exercises comes through the passage of an act by this branch of government. And because of that, we are a pure Dillon's rule state. And the Supreme Court of Vermont has adopted Dillon's rule in its strictest sense, stating that municipal corporations only have those powers that are expressly granted by the terms of an act of the general assembly or that are inherent as part of that delegated authority. There is this phrase that is used in Dylan's role as well, which is that because you have the authority to abridge the authority of a municipal corporation, you also have the supreme authority, not only to create and amend, but also to destroy. You breathe life into the municipal corporation and steal that life back. And if the legislature was capable of so great a folly, you could wipe all of the municipal municipal corporations often have with a single swipe of the legislative pen. That is all part of the decision by justice John Boris Dillon. Who was later incorporated into his treatise on municipal corporations. Alright. So that's the scope of your authority. Taxing authority at the local level has to be delegated by the General Assembly. It has to be sufficiently expressed and specific in order, for it to survive judicial scrutiny under Dillon's rule. As a component of local taxing authority, the general assembly created 24 BSA section one thirty eight delegating to a limited subset of municipalities in 1997 act 68, the authority to adopt a 1% local option tax. There were qualifications built into 24 BSA section one thirty eight, and this was referred to as the gold tenants. There were approximately 50 to 60 qualifying municipalities at the time. They were granted discretionary authority because of tax impacts under act 60 at the local level to adopt a 1% local option tax on rooms and meals, alcoholic beverages, sales, and I believe that's it, but we'll pull up to employee and sales and business. That is it. Sales, meals, alcoholic beverages, and a one percent room stacks. Now they could choose all three, or they could choose just one, but that was the entire scope of their authority. Procedurally, at the local level, this had to be proposed first by the legislative body of the municipality, and then it had to be approved at an annual or special meeting by the voters of the municipality. The voters had to consent to the application of the tax. Once that happened, the towns that qualified under the statute would certify to the Department of Taxes that the vote had been approved, that the local option tax is gonna be implemented, and ninety days or at the beginning of the next quarter, and at a minimum ninety days from the date of the vote, the Department of Taxes would start collecting and administering the local option tax on the behalf of the municipality. There is a split built into the statute, say seventy thirty split. 70% of the income derived from the tax, excuse me, the revenue, see a JFO in the back of the room, so I have to be careful with my nerves, goes to the municipality. 30% goes to the pilot clause, payment in lieu of taxes. I'm sure that you're all intimately familiar with this process by now. As you all likely know as well, there is a separate process set aside in 24 b s a section one thirty eight for the collection and administration of tax on aviation jet fuels. And if you have questions about that, I saw Damien's head pick up in the back. I'm sure that he'd be happy to talk you through the use of the revenue from the tax on aviation jet fuel. Over time, municipalities that did not qualify under the statute realized that they didn't have to qualify because under 17 BSA section twenty six forty five, they could petition the general assembly, if they followed the appropriate procedure and got consent of the voters, to have the general assembly grant them a charter. It would include a local option tax. The reason that this works legally is that as a special law, the charter is both more specific and later enacted, and therefore controls over the provisions of general law. So even if the municipality didn't qualify under the formula in 24 BSA section one thirty eight, They could qualify simply by proposing a charter and having it approved by the general assembly. Now this happened for approximately twenty years. So from the early two thousands all the way into just a couple years ago, that was the primary way that municipal corporations that did not qualify under the original formula adopted a local option tax. And to this day, if you were to do a search for local option tax in the title 24 appendix database on the legislative website, you would find that, yes, many of these chartered municipal corporations adopted their charters specifically Yeah. To get a local option tax. Within that realm, municipal corporations developed some interesting procedures and requirements for their local option taxes by charter. They focused on specific bases for the tax, so they might only apply it to rooms in the town of Elmore. They might apply it to all three, but dedicate the revenue that they receive, the 70% share, to a specific fund. It was something that was very common for a long time in the chartered local option taxes. Few years ago, 24 VSA section one thirty eight was adopted, as I said, to allow any municipality in the state to hold a vote to adopt a local option tax. There was a soft limit put on this, which is the Department of Taxes had to receive the results of the vote and approve the implementation of the local option tax, and the Department of Texas was granted authority to limit the annual number of new local option taxes to five municipalities. I don't know if that has been the practice over the last year, but that is what was built into the new provisions of They're allowed to

[Patrick "Pat" Brennan (Member)]: or it is in our opinion?

[Tucker Anderson, Legislative Counsel]: They are allowed to, cap

[Patrick "Pat" Brennan (Member)]: at Wait. I'm just saying you gotta wait. If even if down

[Sen. Richard Westman (Chair)]: We're gonna have the tax department in because they have a list of who potentially, and they can give us a picture and maybe a history of what they've done, whether they've held down to five or not.

[Patrick "Pat" Brennan (Member)]: It's not mean, it's they can have to have five. They don't have to.

[Tucker Anderson, Legislative Counsel]: That is correct. It is discretion.

[Patrick "Pat" Brennan (Member)]: I think there's seven in front of them. Right now.

[Tucker Anderson, Legislative Counsel]: Right now. Okay.

[Patrick "Pat" Brennan (Member)]: Yeah. So there's those titles that were originally paid and just do it often times. They don't have to come

[Tucker Anderson, Legislative Counsel]: to the legislature because they're not doing the charter.

[Patrick "Pat" Brennan (Member)]: But then the other tenant has to do the charter and the charter has

[Tucker Anderson, Legislative Counsel]: to be approved. So with the changes, they would have to vote, send it to Texas now. So the formula that was initially adopted under act 60 is no longer. It's just all of the municipal corporations in the state are capable of adopting this approval for Texas.

[Patrick "Pat" Brennan (Member)]: Just the Department of Tax and not the legislation. Correct. But unlike other charter changes that need our approval.

[Tucker Anderson, Legislative Counsel]: So one thirty eight says They're not even charter changes at all. They're just local votes to approve the enforcement of a local option tax. But then get certified to Those towns. But for

[Patrick "Pat" Brennan (Member)]: the other towns? For all

[Tucker Anderson, Legislative Counsel]: the other towns? All the towns? All Yeah. All the charter change? Not a charter change. No. It's general authority. Except for Separate name on the

[Sen. Richard Westman (Chair)]: drop linkage. They're golden. So

[Tucker Anderson, Legislative Counsel]: what we're starting to get into is the confusion about the overlap of charters and the general law. Yeah. Any municipal corporation in the state under 24 b s a section one thirty eight right now can adopt a local option tax under the general procedures. Now there are municipalities that have language in their charters that is more specific, and they would have to amend their charters if they were going to deviate from those more specific procedures, dedication of funds, or expand the bases beyond what is specifically dictated in their charter. And, Rutland and Burlington both have local option tax provisions in their charters.

[Sen. Richard Westman (Chair)]: To allow and and, you know, it specifically Burlington, New York, is above the 1% on quite a number of things.

[Tucker Anderson, Legislative Counsel]: Mhmm. There are a handful of special taxing provisions that are built into the Burlington Charter, and I'd be happy to send those to the committee, but they have some discretionary fee and tax provisions that other charter municipalities do not have. Bring that up because as other

[Sen. Richard Westman (Chair)]: communities begin to consider that without some order to all of this, I think it becomes hard to say, well, you're doing a charter change instead of living underneath the general law when we already have communities that are already outside of that. So if you're gonna be consistent, how do you say no to one unless we start to create some order of this before too many more get started? That's just kind that's of for to throw it out here.

[Tucker Anderson, Legislative Counsel]: The policy mindset at the table. Yes. The last municipality that I'm aware of that proposed a charter to increase the local option tax beyond the 1% was the City of South Burlington. That was 2018, 2019. Something like that. They passed the charter proposal, but it did not move through the House.

[Sen. Richard Westman (Chair)]: Go ahead. So, can you

[Sen. Wendy Harrison (Clerk)]: talk more about the restrictions in Act 144? Does it say you can only do certain taxes up to a certain amount?

[Tucker Anderson, Legislative Counsel]: You're talking about the changes to the general local option tax?

[Sen. Wendy Harrison (Clerk)]: Yes, yes. So what's available to municipalities currently?

[Tucker Anderson, Legislative Counsel]: The same basis that was in Act 68, so they can adopt a 1% sales tax, 1% meals and alcoholic beverage tax, and 1% drink rooms tax. So it's only 1%? The shift was really procedurally. Okay. You no longer had to qualify under the calculations for 1997 through 1999 depending on fiscal impacts or impacts on the tax base from Act 60. Now it's just open to any municipal corporation.

[Sen. Wendy Harrison (Clerk)]: Okay. So so if a municipality wanted to do a higher a larger tax?

[Tucker Anderson, Legislative Counsel]: That would it's not contemplated by sectional Okay.

[Sen. Wendy Harrison (Clerk)]: And then they would need a charter,

[Sen. Richard Westman (Chair)]: which is what we heard Burlington do. Which Burlington already has. Right.

[Patrick "Pat" Brennan (Member)]: Is that the only option to do a charter? Could they also just say we could pass a law, obviously?

[Tucker Anderson, Legislative Counsel]: You could, yes. Yeah. But there's no other way. Correct.

[Patrick "Pat" Brennan (Member)]: And we had a testimony that some had option tax on entertainment or amusement, I think they called it.

[Tucker Anderson, Legislative Counsel]: So that might be another reference to fee authority that is built into the city of Burlington's charter.

[Patrick "Pat" Brennan (Member)]: It wasn't Burlington. Can't remember. But I wondered if it was a charter change, like, they allowed it to do it on on what they called amusement.

[Tucker Anderson, Legislative Counsel]: So the I'll talk about Burlington's because that's what I'm familiar with with the amusement. You know? It's labeled as a tax, but it is, in essence, a permitting and licensing fee that is attached to certain privileges granted to businesses in the city. And the city of Burlington Charter is interesting in that way because all of that authority is taken verbatim from general municipal law 24 BSA section twenty two ninety one. It's available to all municipal corporations in the state, but they added in express tax fee making provisions into all of that authority that does not exist in the general law, at least under its express terms. Yeah. Because in in tax presentation, you have two counts of that something that Yeah. Routland and. But that doesn't have an argument in.

[Sen. Richard Westman (Chair)]: Oh, he he gave the list, but, you know, we're not. And the the list is enough, so it takes me a couple of times to hear it.

[Tucker Anderson, Legislative Counsel]: Remember that with the charters, Dillon's rule is still gonna control, and the terms that are used in those city charters and even in the general law is somewhat antiquated. And there could be questions about what what's the scope of that authority when the term that is used is amusements and menageries and services. Does that extend to clubs? I don't know. Menageries and I'll Open a club and put up a menagerie in the front window.

[Sen. Wendy Harrison (Clerk)]: Then are there restrictions on what towns can use the funding for?

[Tucker Anderson, Legislative Counsel]: Not in the general law. Okay. So some like I said, some of the chartered municipalities and in my time here, hearing a lot of testimony about it, it seems like that was a way to convince the voters Yes. To vote for it was to dedicate the local option tax funding to specific purposes. Right. So think of proposal that

[Sen. Richard Westman (Chair)]: general proposal that was put out on the table here, Damian drafted and it has it says specific that the money is getting used for education. Is that So I think there's a freedom on the municipal side, but there is that restriction and it got put in the language that got put on the table here specifically because we thought we were tracking what was existing. Is that correct?

[Tucker Anderson, Legislative Counsel]: I would have to scan back through, which is what I'm doing right now, section one thirty eight to see if there's a restriction on the use of the revenues beyond those that come from aviation jet fuel.

[Sen. Richard Westman (Chair)]: Well, and I do have a question about Aviation Jet Group because the place that would produce any kind of real money is the Burlington Airport. It's owned by the city of Burlington, but it's in South Burlington. So just to be clear, the taxing authority under that is South Burlington or Burlington?

[Tucker Anderson, Legislative Counsel]: South Burlington because that's where the property is located, but there are restrictions to how that can be used because there's federal requirements. Anytime there's a tax or fee associated with airport airport grounds that the money be reinvested into that specific operation. It can't go into general funds or enterprise funds outside of that property. And you are correct that in subsection d in 24 b s a section one thirty eight, there is a general restriction that the revenues that are acquired by the municipality be used for municipal services and not education expenditures. And

[Patrick "Pat" Brennan (Member)]: you can also impose your own restrictions. Like I know Colchester did a local option tax and any monies used to have to be approved by the voters, which is probably different than anything you've seen before. But yeah, we can't spend any of that money without voter approval. So a town should pass this like, it was that's what that's. Other towns, I assume, would want to do this because they get a 100% of the revenue, but they're just not there again because we'd likely don't let them. We left we left Burlington and Rutland for whatever reason when those were passed. Do Is that or is there another reason they would or it's not a legal question?

[Tucker Anderson, Legislative Counsel]: I Yeah. Don't wanna speak on behalf

[Patrick "Pat" Brennan (Member)]: of So there's no other legal framework that's preventing them from doing it other than approval of the legislation? Correct.

[Sen. Richard Westman (Chair)]: So do we collect the money for Burlington and Rutland? Mhmm.

[Tucker Anderson, Legislative Counsel]: So it depends on what we're talking about. Because if we're talking about the local option tax that is applied in those cities, yes, the Department of Taxes collects those. If we are talking about the other taxes or fees that are authorized by the charter, those are completely separate from the local option tax procedures that require collection and administration by the corporate taxes. And just to make sure I get this. So if you have a charter and we are collecting, do they live with the same split that that all of the other communities? Or or because they're a chartered town and they have done this outside of the general procedure, do they have how does that work? They live with the same procedures and the same split. So either they refer directly to 24 VSA section 138, which is about half of the charter provisions, or the charter is silent, which means that the general law controls and department of tax collects and does the split anyway. There's a minority of municipal charters that expressly state we have the seventy thirty split. Burlington was one of them. Now last year, if you remember the emergency management bill that was passed by the passed out of the gov ops committees changed the split to seventy five twenty five. Mhmm. And there were five sections of that bill to go into the municipal charters that specifically require the 7030 split to clean that up and instead just track 24 b s a one thirty eight so that if there are any changes in the future, the charters will automatically update.

[Patrick "Pat" Brennan (Member)]: But if the if the municipality passed the grocery sheet stacks, like Burlington did, so you don't have to buy buy that because it's not a local option back. Correct. They could call it a local fund tack.

[Tucker Anderson, Legislative Counsel]: Now there might be other procedures in title 32 that they're required to follow, but they would not have to follow the specific procedures in 24 VSA section 138 that require the per return fee of the 75 all the admin.

[Patrick "Pat" Brennan (Member)]: That money is remitted from the business that collects it directly to the municipality in that case. In the latter case. In the latter case.

[Sen. Rebecca "Becca" White (Vice Chair)]: I knew a lot of this already. We've got an offer to spend quite a bit of time on this topic, so I guess I'm just wondering like, there's nothing that I've heard from Tucker that makes me think that anything that we've talked about isn't still feasible within the STOW extra second percent piece, but

[Sen. Richard Westman (Chair)]: No, I I think

[Sen. Rebecca "Becca" White (Vice Chair)]: kind of context.

[Sen. Richard Westman (Chair)]: Well, yes, there's four of us on the committee that don't sit on pub senate. Haven't heard this before. So, and I think it's good that we are all on the same page and

[Sen. Rebecca "Becca" White (Vice Chair)]: Just waiting for a fucking gun that somehow we can't use them for transportation funds or something weird. This is what think. So there's nothing like that. There's no

[Sen. Richard Westman (Chair)]: multiple figures.

[Sen. Rebecca "Becca" White (Vice Chair)]: Like, did did you have an opportunity to review the language that Sandra Westman has been working on related to the additional second percent being used for a split. Was there any concerns with the creation of that type of?

[Tucker Anderson, Legislative Counsel]: So I have seen that or at least a version of it and no flags for me, but that's more of a question for Damian who has more intimate knowledge of the funds and requirements there? And does transportation have a supporting but not supplanting requirement?

[Sen. Richard Westman (Chair)]: Oh god.

[Matt Russo, Deputy Commissioner, Vermont DMV]: No. Not that I'm aware

[Patrick "Pat" Brennan (Member)]: of. Okay.

[Tucker Anderson, Legislative Counsel]: That's I just had to throw out the one phrase that I knew about.

[Sen. Wendy Harrison (Clerk)]: It's nuts.

[Sen. Richard Westman (Chair)]: It it really is It's just nuts. Totally under understand that someone in the box would you're at a different level than we are on this because we don't deal with this every day. Go ahead.

[Tucker Anderson, Legislative Counsel]: Do you know when that self growth and effort raised it over 1% once? It was 2018. I wanna say there were a few tax proposals that came up around that time raising to 2%, but there was also a proposed 5% tax on rental cars. Okay. And both of those

[Patrick "Pat" Brennan (Member)]: I get that question.

[Tucker Anderson, Legislative Counsel]: Were presented in house ways and means, and I believe one charter. Separate charter proposals. Yes. Me, intentionally. I would just say representative gains. Who poses a big fan of global opposition. The perspective that you're talking about for that particular member reflects the authority of the general assembly, which is that all of this, even if it's being exercised by a subordinate unit of government, like a municipality, is the state's taxing authority and the state's taxing capacity. So, in my early days, that was the phrase that was used here, giving away a piece of the general assembly's taxing capacity.

[Sen. Wendy Harrison (Clerk)]: So it sounds like other towns, smaller towns are would would be able to promote a higher tax than the 1% or a different tax in a charter. Charter change and it sounds like there are very few limits to that. I mean, what can be asked? Have to go through a process.

[Tucker Anderson, Legislative Counsel]: The I mean, the hard limit is The US and Vermont constitutions because the charter can hold all of the authority that this body is willing to delegate to the municipal corporation. So you could delegate the whole of your taxing authority as the general assembly, provided you had sufficient guidance in that delegation of authority to the municipal corporation.

[Sen. Wendy Harrison (Clerk)]: So So I'm just trying to think if there's possibility for a municipality to want to do something that would be in conflict of what we're proposing, and what would happen in that case. I guess the legislature would have to figure it out.

[Tucker Anderson, Legislative Counsel]: That's right, because the charter would still have to come through here and you would have an opportunity, the general assembly would have an opportunity to review the charter proposal and review the potential impacts on the state's general municipal laws. Okay. And I think

[Sen. Richard Westman (Chair)]: in the changing from 70 to 30, but we're in the formula that we're dealing with the charter towns in that to make them comply with overall collection items.

[Patrick "Pat" Brennan (Member)]: Where does the seventythirty, it's set in statute on the first 1%, any town proposed a charter change of the second 1%, do we set that It's seventy five twenty five. Yeah. I mean, 7525. Correct. Do we set the, say, a fifty forty ten split? Who sets that? Do that when we get the charter and approve it. Yes, for

[Tucker Anderson, Legislative Counsel]: the charter and for the general law that we're talking about '24 VSA, 01/1938. So if you were to propose the second percent, you could develop a different split. Okay.

[Sen. Wendy Harrison (Clerk)]: And it would be a different split for different towns. I mean, have, I'm not suggesting that we'd be capricious, but we

[Tucker Anderson, Legislative Counsel]: could be. Yes. Okay. And that is because all of the municipal corporations are creatures of the state. Okay. And so you can treat your creatures differently.

[Sen. Richard Westman (Chair)]: So does does every town have a charter? No. No? How many have charters?

[Tucker Anderson, Legislative Counsel]: Close to 90 now. I haven't done a count recently, but I've guessed 90 of what you would consider to be your traditional municipal corporations, and then there's additional water districts, fire districts, utility districts. So two forty and change Two fifty two. Two fifty two.

[Sen. Richard Westman (Chair)]: There's 90, so it's two thirds 100. Roughly. Yep. A little more than what we have. You know, just we're just doing that.

[Tucker Anderson, Legislative Counsel]: You mathed faster than I possibly could have been.

[Sen. Wendy Harrison (Clerk)]: Yeah. That's exactly in the

[Tucker Anderson, Legislative Counsel]: morning, so I had you took me a second. Had to do fifties first.

[Sen. Wendy Harrison (Clerk)]: Yeah. Let me turn the right way. So, okay, you got me object. But aren't some of the charters, some of the charters are more comprehensive than others.

[Tucker Anderson, Legislative Counsel]: Yes.

[Sen. Wendy Harrison (Clerk)]: So some of them are kind of like a little definite, not little, but a definition of everything that the town does and others are just limited, right?

[Tucker Anderson, Legislative Counsel]: That is correct.

[Sen. Wendy Harrison (Clerk)]: Burlington's a little more. There's this comprehensive Yes. Yeah.

[Tucker Anderson, Legislative Counsel]: Burlington's is the longest and the most comprehensive, and the shortest is the town of Danville, just one section that requires that they vote by Australian ballot at their annual meetings, and there's a proposal to repeal that in the house right now. So they would definitely have the shortest charter because it would just be bracketed repeal notes.

[Sen. Wendy Harrison (Clerk)]: Okay. Yeah. So just because the town has charters, doesn't mean that it's doing anything about option taxes or or any particular item.

[Sen. Rebecca "Becca" White (Vice Chair)]: But but if you have a

[Sen. Richard Westman (Chair)]: charter, it it it you could always amend the charter to do a local option that's separate from a lot easier than total creation.

[Tucker Anderson, Legislative Counsel]: And any municipality in the state could propose to adopt a charter Yep. For the first time.

[Sen. Richard Westman (Chair)]: So Yep.

[Tucker Anderson, Legislative Counsel]: In this conversation, the town of Montgomery is a recent example. Adopted a charter specifically for a local option tax of limited duration that was tied to some to some public sewer projects that they were implementing. So Okay.

[Patrick "Pat" Brennan (Member)]: It's 2019 where Burlington did the tax charter on rental cars.

[Tucker Anderson, Legislative Counsel]: Separate. They had a separate separate bill just for for rental cars.

[Sen. Wendy Harrison (Clerk)]: Well

[Patrick "Pat" Brennan (Member)]: Introduced by all members.

[Sen. Wendy Harrison (Clerk)]: That was a while ago.

[Patrick "Pat" Brennan (Member)]: Because will kill the extra 1% off some people. They were together? They were separated. '29 was separated.

[Sen. Richard Westman (Chair)]: Yeah. But that that's Burlington. South Burlington.

[Sen. Wendy Harrison (Clerk)]: Oh, South Burlington. They're there. Yeah. And that's where all

[Tucker Anderson, Legislative Counsel]: the parts are.

[Sen. Wendy Harrison (Clerk)]: And a lot of states have looked at rental properties.

[Patrick "Pat" Brennan (Member)]: So just to be clear, second 1% they were proposing was wasn't tied in with the 5% rental car? That is correct.

[Tucker Anderson, Legislative Counsel]: They were separate proposals.

[Patrick "Pat" Brennan (Member)]: They were separate.

[Tucker Anderson, Legislative Counsel]: It's not 5%. At

[Patrick "Pat" Brennan (Member)]: least in 2015, they might have tried it in the earlier version. And it was promptly said the ways of me. I go out. It

[Sen. Richard Westman (Chair)]: representative Ansel was a a force unto herself. Yeah. She was my statement. Yes. I I know where she came from. It's like She was good at what she did. I think you've given us a lot to think about today, and it probably won't be the last. This is, at least for some of us on the committee, a learning experience.

[Tucker Anderson, Legislative Counsel]: Well, thank you very much for having me. Do you have any more questions?

[Sen. Richard Westman (Chair)]: Do like to bring Kai.

[Patrick "Pat" Brennan (Member)]: Work on that monarchy. Yes.

[Tucker Anderson, Legislative Counsel]: The Canadian Coal Corporation in Vermont must have a menagerie.

[Sen. Wendy Harrison (Clerk)]: Good luck with that.

[Sen. Richard Westman (Chair)]: We are about to to Matt's.

[Sen. Rebecca "Becca" White (Vice Chair)]: Matt's on Saint Martin's. What? Matt's on Saint Martin's.

[Sen. Richard Westman (Chair)]: And this will be front plates. Matt, are you there?

[Matt Russo, Deputy Commissioner, Vermont DMV]: Yes. Yes.

[Sen. Richard Westman (Chair)]: Good morning. Good morning.

[Matt Russo, Deputy Commissioner, Vermont DMV]: Are we ready to go?

[Sen. Richard Westman (Chair)]: Yep. Are

[Matt Russo, Deputy Commissioner, Vermont DMV]: you ready? Sure. Matt Russo, deputy commissioner for DMV. And this is to talk about the front plates, the memo that we sent over yesterday. DMV is supportive of the removal of the requirement to produce and display the front plates on vehicles in our language in the bill. However, we are opposed to any language language that would direct the issuance of a specialty plate,

[Tucker Anderson, Legislative Counsel]: for a

[Matt Russo, Deputy Commissioner, Vermont DMV]: couple of reasons. The cost to produce small quantities of specialty plates would far outweigh the revenue, and leave it in a deficit in addition to many, many organizations that have already requested this in the past. And it would open the door to having the need to create more specialty plates for every organization that reached out, sort of setting a precedence. So

[Sen. Richard Westman (Chair)]: was the memo from the commissioner?

[Matt Russo, Deputy Commissioner, Vermont DMV]: Yes.

[Sen. Rebecca "Becca" White (Vice Chair)]: Some I

[Sen. Richard Westman (Chair)]: of us, if we could just take a second to read it.

[Matt Russo, Deputy Commissioner, Vermont DMV]: Sure, yep.

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

[Sen. Rebecca "Becca" White (Vice Chair)]: Sure. Well, thank you so much, Matt, for being here and for the very succinct memo on this topic. So, if I'm understanding correctly, you're not in favor of S-two 34 largely because of the cost deficit that it would create. And if I I'm not fully understanding the the math you've got under the cost implications piece yet, but could you just describe how much it would what that deficit would be, and and what we would be costing the state if we move forward with an individual specialty plate?

[Matt Russo, Deputy Commissioner, Vermont DMV]: I don't know exactly what it would be because it all depends on quantity, and the plate shop would have all that information as far as what quantities would be needed to produce in order to at least break even.

[Sen. Rebecca "Becca" White (Vice Chair)]: I guess I had misunderstood the the previous testimony we had gotten from the treasurer's office at Be Green because it seems like they were actually going to have a surplus of money that they were then going to allocate to a specialty fund. So, I guess that's where I was missing the vote on it. If they had fundraised and raised enough money above and beyond to go to a specialty fund instead, could they use that money to offset the cost difference for DMV and then just have less money go to the specialty outdoor recreation fund they had identified?

[Matt Russo, Deputy Commissioner, Vermont DMV]: I'm not really sure how it would work, what the technicalities would be as far as funding it themselves and paying for it. I don't think I could answer that.

[Sen. Rebecca "Becca" White (Vice Chair)]: Okay.

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

[Sen. Wendy Harrison (Clerk)]: Hi, Matt. So so so you do support removal of the front plate and allow me the public to display front license plates but you don't support DM is it accurate to say you don't support DMV being the producer of the front plate? Is that what you're saying?

[Tucker Anderson, Legislative Counsel]: Correct. Yep.

[Sen. Wendy Harrison (Clerk)]: Someone else would produce the front plate?

[Matt Russo, Deputy Commissioner, Vermont DMV]: So, yeah, there are, companies that that make plates like for dealerships, for instance. They have a front plate that has the dealership name on it. So there are opportunities out there. DMV, we're opposed to DMV producing or or distributing plates.

[Sen. Wendy Harrison (Clerk)]: Okay, so what about having regulations or standards for the front plate?

[Matt Russo, Deputy Commissioner, Vermont DMV]: Yeah, I don't know that I could speak to that. I think limiting people would create some issues.

[Sen. Wendy Harrison (Clerk)]: And not limiting would create issues, is my opinion. But, so, and then a different question, what about safety? Because I don't know how much testimony we've taken, don't remember, but I know I've heard from constituents that they're concerned if we don't have a front plate that cars are less visible. And I think we heard that from law enforcement.

[Patrick "Pat" Brennan (Member)]: Law enforcement had been in this year. Prior years they had.

[Sen. Richard Westman (Chair)]: Law enforcement from the state police were invited and they declined.

[Sen. Wendy Harrison (Clerk)]: Oh, okay. So somebody should be thinking about safety. And there was a reason that we had front plates in the beginning and so I think we should have that conversation before we decide not to have complaints.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah. I would just say I think the other piece that's kind of missing from here is that maybe just the memo doesn't cover it because it's not a very good argument for DMV. But you are still charging the same amount for both plates.

[Sen. Richard Westman (Chair)]: So you are.

[Sen. Rebecca "Becca" White (Vice Chair)]: But, I mean, you you're still you would still be charging the same amount even with one plate being sent to a a purchaser. So I can understand why you're a favorite because it does have the cost savings for you. But what we heard from DOC was the move from two plates to one plate was gonna cause the deficit in their shop. So I'm just wondering if you could respond to that because I I think that's my biggest hang up right now with the proposal is, sure, we might get some savings in DMV potentially. We might have all the safety risks perhaps that we're maybe not gonna hear about, But we are certainly going to have a cost to DOC. So I'm wondering if you have talked to them or if

[Matt Russo, Deputy Commissioner, Vermont DMV]: Yeah. I remember the testimony. I believe that they said it would it could potentially have that impact on them. And I think there were there was other information they needed in order to make that decision, but we haven't spoken with them at length on on what it would cost.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, think my decision on if I would be in favor of the language as proposed from DMV would be if there is a cost deficit to DOC. That would be a key piece of information for me to make a decision. So, don't know how we get that information, but it would be important for me.

[Sen. Wendy Harrison (Clerk)]: Yeah, and I just want to add to that, that I think generally we should, unless there's a really good reason, not have one department subsidizing another department, especially when they're in different funds.

[Sen. Richard Westman (Chair)]: So, I want to be clear. Your language said supports removal of the requirement here and does not directly instruct the department to take the plate off.

[Matt Russo, Deputy Commissioner, Vermont DMV]: I think what we mean by that is that the language that we have in our original bill was just the removal of the front plate. So we're in favor of keeping it that way and having the and having the front plate not be a requirement.

[Sen. Rebecca "Becca" White (Vice Chair)]: Oh, wait. Can I just can I get clarification? Because I think I'm misunderstanding that. So you're and I've got I've got the yeah. But your point is you still would be sending two plates.

[Matt Russo, Deputy Commissioner, Vermont DMV]: Well, we would we would go to one plate.

[Sen. Rebecca "Becca" White (Vice Chair)]: Okay. Yeah. So it's just getting rid of the requirement and also not sending two plates.

[Matt Russo, Deputy Commissioner, Vermont DMV]: Right. And the production of the the second plate.

[Sen. Richard Westman (Chair)]: Okay.

[Tucker Anderson, Legislative Counsel]: So

[Sen. Wendy Harrison (Clerk)]: so just one more time. So is is the only reason it sounds to me that your only reason for wanting this is because you believe that you would the DMV would save money.

[Sen. Richard Westman (Chair)]: Oh, Did you answer the wrong? I will jump in on this.

[Unidentified DMV representative]: Your call, district DMV. That's not the only reason. Okay. We fully believe and have seen the front plate requirement has not been in effect, and I've said this before since Irene. Since people started using Braun Strowman plates, since we've had the temporary registrations that people will use as real registrations, it just people that have auto registrations are not putting front plates on the vehicle, and it's not getting enforced. So I guess it leads around to this whole conversation of why are we forcing it when we have situations where Vermont Green can go out and produce their own license plate, get 100% of the profits, and sell that, and people can display that on the front of their vehicle, we think this is an excellent opportunity to leverage that. In respect to the safety piece, I've been in conversation with the Ohio State Police, they have not seen any decrease in their enforcement or issues with it. They have obviously the speed tolls and all that, they don't have an issue with it. And then just here in Vermont is a report on the data before, we just don't stop or take it for it, for that violation. So it's bunch of little different buckets. Obviously we were captured some, a

[Sen. Richard Westman (Chair)]: little bit

[Unidentified DMV representative]: of revenue, but I think the bigger opening here is that it will allow organizations to self produce, sell in quite a few of profits, from ours can display differing provinces.

[Sen. Richard Westman (Chair)]: I would I just have to say in this pruning, We've taken a lot of testimony from, the judicial bureau and, Terry Cousins and about the drop of enforcement across the state in almost, not every category, but almost every category. Speeding, cars registered, and not knowing where the state police are, it I it puts me in a place where I'm reluctant. Yeah. You know? And and this and because I'm not sure we, as a committee, get the whole picture. So when we go through this section by section, I I just have to get that out there when when I talk to you about this. Yeah. I'm and I don't I I will say to the committee when we started and we all had safety on our list, I'm a little bit at a loss on now we've got the figures that we've got about enforcement about what we how we bring this up and what we do with the information that we collected and this touches that.

[Sen. Wendy Harrison (Clerk)]: Yes, so I totally agree and the difference, one of the differences between the state having the purview of the licenses the license plates is that you have the vehicle ID on the license plate on the front and that wouldn't happen if we had anybody able to produce license plates. So, I recall when we were learning about the, thing that you have in the northern part of the state, the, it's not radar, but it's, it's a way to

[Unidentified DMV representative]: The weigh station?

[Sen. Wendy Harrison (Clerk)]: No, no, the enforcement of the heavy trucks.

[Unidentified DMV representative]: Yeah, the weigh station, the inroad Yeah. The

[Sen. Wendy Harrison (Clerk)]: truck's tail. Yeah, I'm sorry, weigh station, was thinking about is servicing, but that is especially effective with the front plate. That's how you identify a vehicle, is the front, not

[Sen. Richard Westman (Chair)]: the The

[Unidentified DMV representative]: DOT number on the

[Patrick "Pat" Brennan (Member)]: side of drugs are there.

[Sen. Wendy Harrison (Clerk)]: Okay, but generally those are pretty effective. They're more effective if you have a front plate.

[Unidentified DMV representative]: Mean I can't talk on that. I know in Quebec they have automated speed enforcement cameras and they don't require a front license plate. We'll see. Same with Ohio,

[Sen. Richard Westman (Chair)]: and they did way over there.

[Sen. Wendy Harrison (Clerk)]: Yeah, just seems very, not completely, we don't have enough information at this point at least.

[Sen. Richard Westman (Chair)]: When we get the bill, at this point, I'm gonna say thank you to Matt, and we are supposed to meet the natural resources committee in Room 10 in, actually fifteen minutes, 10:15. And thank you, Matt. Thank you. You will There are paper copies of this document. It should be posted on our website, and we're on it 10:15 with them. So I'm gonna give you a twenty minute break and we'll meet them in there. The issue is Act two fifty in transportation projects, and I think the agency wanted to highlight some projects. So this is mostly going to be about highlighting of the projects. They will have a proposal eventually around, I don't know if they're gonna present that, but what they wanted to do was talk about specific things which they feel is a problem for them and highlight it to communities. So,