Vermont Legislature SmartTranscripts:

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

[Sen. Richard Westman (Chair)]: And we are Tuesday, March 10, and this is Senate Transportation Committee, and we have someone new from the transportation agency and why don't you introduce yourself and tell us what your job is and so we'll know who you are when you're sitting on our bench.

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: Thank you. Good morning. I'm Amy Patko. I'm the Director of Communications and Public Outreach. And my responsibility at the agency is to handle all of the external and internal communications. And so that includes, of course, all of our press inquiries, our press releases, social media posts, and our paid communication campaigns.

[Sen. Andrew Perchlik (Member)]: And the highway signs.

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: I actually do not get to do that, right?

[Sen. Richard Westman (Chair)]: The most fun component is not actually my shop. Did you at one point? I thought you touched No, on that's

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: always been in the highway safety team. Yeah. Maybe

[Sen. Andrew Perchlik (Member)]: we just asked you about it.

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: I'm often asked about And

[Sen. Andrew Perchlik (Member)]: how many years have you been?

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: I just had my seven year anniversary, this is my first and only so far position with the state. And our paid communications right now are focused on Drive Well Vermont, our highway safety behavioral change program and also on the rail trails, the four rail trails that we own and manage. We have a pretty robust outreach program to promote those. And then internally, I work very closely with our civil rights team because they have a team of outreach ambassadors to support recruitment and to promote the agency, particularly down maintenance and highway positions. But I also try to carve out time to do what I can just to keep a positive focus on the great people who work at the agency and the projects and programs that they're doing. So we have a quarterly program called Inside AOT where I interview someone for an hour over the lunchtime as others kind of listen and then ask questions at the end. And that's a really nice spotlight to put on our people. And then recently we started AOT News, which is our newsletter. It's short and sweet, just a couple of pages with a lot of photos and a little bit of text to highlight all the good work that's being done. So that's what brings me here today. Michelle had the idea to do the March issue on the legislative process, what the focus has been so far this session, where we are in the process and the key players at AOP who spend their time here working with all of you. Okay. So thank you.

[Sen. Andrew Perchlik (Member)]: And is that an internal newsletter?

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: Is internal. Yeah. It's emailed for the whole agency, and I would be happy to share this issue with all of you. Yeah. Yeah. We were hoping for all of them,

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: but we

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: got this next issue. Well, see, I believe you can access SharePoint Sometimes

[Sen. Andrew Perchlik (Member)]: only our own event. Okay,

[Amy Tatko (Director of Communications & Public Outreach, Vermont Agency of Transportation)]: well, we do have an archive and I'd be happy to share more issues if you'd like to see them. Oh, I mean, we could be signed up for it, you know, going forward. Right? Yeah, yeah. Yep.

[Sen. Andrew Perchlik (Member)]: Sure.

[Sen. Richard Westman (Chair)]: Thank you so much. Sure. Thanks. Damian did hand out and the document you have is based on the our second attempt, not the bill that went out, but the strike all amendment. And I did speak with the chair of finance and tell her that here's what our intention was. And so they're gonna go through and finance the amendment, not the bill itself. Okay. We should have that taken care of. And today, we are talking about mileage based user fee and I'm hoping that we can we're going to understand what we need to do for January and provoke a conversation about what going forward in the future might look like for MBUC and mileage. And we're gonna spend a lot of time this week on that.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: You're on. Thank you, Mr. Chair. For the record, Patrick Murphy, State Policy Director, the Agency of Transportation. I'm just waiting for her.

[Sen. Rebecca "Becca" White (Vice Chair)]: Oh, you're there yet.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: I did sign in. Okay. It's working as well at that clock.

[Sen. Richard Westman (Chair)]: Did you figure out that clock, Dan? I'm close. You're close?

[Sen. Rebecca "Becca" White (Vice Chair)]: Got a lot of technical challenges.

[Sen. Andrew Perchlik (Member)]: Only twelve hours

[Sen. Richard Westman (Chair)]: It deserves my full attention. Challenges.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: It says this meeting is scheduled for tomorrow. Yeah.

[Sen. Rebecca "Becca" White (Vice Chair)]: Well, you have to come back then.

[Sen. Andrew Perchlik (Member)]: Did you also assign the sections? Did you Yeah. Was that a handout?

[Sen. Richard Westman (Chair)]: I think But I'll redo it, and I'll Megan will get it out to you. Okay.

[Sen. Rebecca "Becca" White (Vice Chair)]: Sent you another one. I'm sorry.

[Sen. Richard Westman (Chair)]: You're where?

[Sen. Rebecca "Becca" White (Vice Chair)]: I'm twenty three till the end, which I understand. So I think that would make me now

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: I think you were

[Sen. Andrew Perchlik (Member)]: the only one that got sick. I know.

[Sen. Richard Westman (Chair)]: We didn't. Yeah.

[Sen. Wendy Harrison (Clerk)]: I think I had the

[Sen. Richard Westman (Chair)]: I have all the Let me let me read that, and I'll have Megan send it out personally this afternoon.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Okay. So what I'll do today is just kind of you did get a presentation from UDM Transportation Research Center, who is a group that worked with the agency on providing the analysis and recommendation for a modest based user fee rate. But I'll just go through quickly again for you all how we can do that and what we're trying to do. And then Damien is here to walk through the draft that's been shared with the House. There are definitely things that, you know, will be changed within the existing draft, but to give you a sense of the overall framework of what you'll be seeing in a couple of weeks. So the starting point for this is the intent language that you all approved last year in act 43, the transportation bill, to get to the point where you have electric vehicles paying roughly what an average gas vehicle is paying in the state of Vermont. And so what I wanted to do is provide some context for that. I've taken four different Ford 150s, one of the more popular vehicles in the state of Vermont. One from 2013, the gas tax that was last updated. And then three from 2025, the most recent model. So all have the very similar impact upon the roadway network, but paying very different amounts. In 2013, Ford 150 was paying about $270 based on the fuel economy of that model year. And then, you know, that sort of updated version in 2025 was paying just 185 So you can see just the increase in fuel efficiency of the same exact vehicle has led to a dramatic increase on a per vehicle basis of particular models. The hybrid version of that is closer to what the actual average fleet economy is, 23 miles into the gallon. And so it's paying about $153 And that's roughly what so $89 is the infrastructure fee, that's what the electric version of Ford Lightning is paying. What we're trying to do is to bring these electric vehicle models into closer parity with the average vehicle, the average gas vehicle. So we proposed a rate based on UVM Transportation Research Center's recommendation of one point four deaths per mile. Originally, in our 2024 implementation plan, related report, to we had a rate of one point seven eight cents per mile, and that had included administrative costs, which are higher for a mileage based user fee and included It was based upon a fuel efficiency of the fleet back in 2013 when the gas tax was last updated. In effect, trying to recoup what has been lost in the past decade plus. But UVM TRC had made a good argument about why, you know, the proposal that they've made has been more aligned with what the legislature had sought last year with its language. And so we proposed 1.4¢ per mile.

[Sen. Andrew Perchlik (Member)]: Is there a reason that you based it on trucks, not on higher mileage?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: No, it's just to give you it's not based on a truck.

[Sen. Andrew Perchlik (Member)]: Based on 23 miles per gallon.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: It's based on 20 it happens to align with this particular chart. Why not just do it

[Sen. Andrew Perchlik (Member)]: with the average player car and feature?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: It is 23. 23 is Yeah, that's it's just a coincidence that it's aligned with this model. But in the report that UVM submitted, they found the distance weighted average fuel economy was 23 miles per The distance weighted. Yeah. Not

[Sen. Andrew Perchlik (Member)]: just all the registered vehicles. It would take their stick their MPG and average in that. Yeah. Would that

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: be higher, I see. I don't know. It would probably be slightly higher, maybe about 23.7 miles per gallon or 28,000 how the vehicles are actually used, which is based on real registration and odometer data that they look through, that's where you get the 23 miles per gallon.

[Sen. Andrew Perchlik (Member)]: And I assume every year it goes up, just as newer vehicles, more efficient vehicles.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: That's right. Yeah. So back in 2013, it was about '19 miles per gallon.

[Sen. Wendy Harrison (Clerk)]: So I know you had a question.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah. Go

[Sen. Richard Westman (Chair)]: ahead. But then I have a question.

[Sen. Rebecca "Becca" White (Vice Chair)]: Oh, no. It was just I found the answer It's in the report. So

[Sen. Wendy Harrison (Clerk)]: are we proposing to change the amount annually, the sheet?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So the language that was approved by the legislature is to sunset the infrastructure fee for battery electric vehicles upon implementation of a mile space to make it.

[Sen. Wendy Harrison (Clerk)]: But would the MVA amount change according to some metric each year?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yes. So we're going to get to That has also been a part of the recommendation. Okay. To have the inflation adjustment. Great. Yeah. Well,

[Sen. Rebecca "Becca" White (Vice Chair)]: I'm just saying I appreciate you running through this. I know that you've been spending a lot of time in the house on it. So if there's any commentary about the house's reaction and how likely the actual language is, if that's a part of your presentation today, that would be helpful as well. Because I, although I fully follow where you are on this, and the process of events that led us to this recommendation, I want to understand what the changes were that for concerns you heard in the

[Sen. Richard Westman (Chair)]: house as well at some point. So Damian has drafted language. Yep. The language that he has drafted will reflect what they're doing. Okay. And I did ask them when they because the House has had one meeting on this Okay. And they haven't put it on the table. But I ask them as soon as they know what is being proposed that in my mind give me a side by side of what's there and that.

[Sen. Rebecca "Becca" White (Vice Chair)]: Okay, thank you. That's helpful. So there is already we're going to get some kind of proposal with all of this from the House is the most likely outcome.

[Sen. Andrew Perchlik (Member)]: That's right.

[Sen. Richard Westman (Chair)]: Okay. But they've only had one meeting Okay. On

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

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Sure. So this is just to provide some context for, you know, what an average gas vehicle is paying. So in the state of Vermont, we're very much in the middle of the pack in terms of our gas taxes, pretty much in line with a lot of New England states that surround us. I've just noted New York and Connecticut. Can you say that again?

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, love that. New York. That was great.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Say which part again.

[Sen. Richard Westman (Chair)]: You're getting closer all the time. The New York part. So

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: and, anyway, so New Hampshire, New York, Connecticut, they're all paying less in gas taxes than the state of Vermont. But both New York and Connecticut have this sales taxes in addition to it. So, effectively, their tax rate is higher. So it's just a note. So although and this this ranking of twenty fourth is based on the just that simple excise tax and not the sales tax. So actually, it's kind of further off in the middle. At any rate Does

[Sen. Andrew Perchlik (Member)]: this include our TIP? This includes the TIB portion Yeah, this is the full, yeah, zero three two, roughly.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: On the other hand, in much of the country there are not charging fees for EV charging stations. So this is the kind of frame, you know, one of the questions that did come up in the House Committee is around border travel, interstate travel, and the fairness of applying a miles based user fee on all miles traveled in a given year. So with the gas vehicle, you have gas taxes in other states. So you're still paying some amount of gas tax, whether it be in Vermont or New Hampshire or Quebec or wherever. You don't have that same dynamic with wheat. So you're not necessarily paying, unless you make it all the way down to Pennsylvania, you're not necessarily paying a EV charging tax or per kilowatt hour tax in other states. And so they're really, right now, in this moment that we're in, isn't much of a danger of the double taxation. And here, again, is a sense of the average cost to charge within the country. And Vermont is, you know, on the lower side within the New England states, but definitely compared to New Hampshire, but very much within the average Is

[Sen. Andrew Perchlik (Member)]: this public or This is at public charging stations, yeah. And so it includes those taxes for those that have This isn't the tax. This is the total.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So they include This the total cost, yeah. So it would include any taxes.

[Sen. Wendy Harrison (Clerk)]: So they're regulated and can only charge this, is that?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: No. This is just an average.

[Sen. Richard Westman (Chair)]: Oh, an average. Okay. So some are charge in these different places.

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

[Sen. Wendy Harrison (Clerk)]: no. But but so in Vermont, can can they charge what they wanna charge?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah.

[Sen. Richard Westman (Chair)]: So it's Yeah.

[Sen. Wendy Harrison (Clerk)]: Wow. Okay. Do we know what the range is of of those?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Depends on what you're talking about, whether it's level one charging, level two charging.

[Sen. Wendy Harrison (Clerk)]: Well, level three is what they put in.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah. Level three charging that might be anywhere from, you know, like $0.35 up to $0.60 per kilowatt hour.

[Sen. Wendy Harrison (Clerk)]: Do we have a way of knowing what they're doing, or do we have

[Sen. Richard Westman (Chair)]: to go and check? Weights and

[Sen. Rebecca "Becca" White (Vice Chair)]: Measures regulates it. They're doing a whole entire thing on it right now.

[Sen. Andrew Perchlik (Member)]: But I don't know if they go away the cost.

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

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Weights and Measures doesn't regulate the price.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah. But they do know the price. They take a price per kilowatt hour, right? Isn't that the whole point of the report, Richard?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Weights and measures have to verify that the price is displayed properly. So on a per kilowatt hour basis and that all the fees are properly displayed.

[Sen. Andrew Perchlik (Member)]: And every kilowatt is being spent. Yeah.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: And it's more, yeah, weight and measure. It's more about the measure of the electricity actually being dispensed.

[Sen. Wendy Harrison (Clerk)]: But we don't know what they're charging. I

[Sen. Richard Westman (Chair)]: don't think so.

[Sen. Rebecca "Becca" White (Vice Chair)]: Do we know what gas is? So

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: we do. I mean, Yeah. Do

[Sen. Rebecca "Becca" White (Vice Chair)]: Like we well, do we?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So the price has to be clearly displayed. And that is one of the things that is covered by the regulation.

[Sen. Richard Westman (Chair)]: Displayed to the customer? Yes. Okay. Yeah. That's sort of

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: a, you know, something rates and measures would be checking. And then for all of the charging stations that have been deployed by the state and will be deployed by the state using our NEVI funds and other funds, we have price controls in place. Okay, right. They have to submit what their price is going to be, and then if they intend to raise it above inflation, they would have to request that. For how long?

[Sen. Andrew Perchlik (Member)]: For how long? Is that just part of their grant agreement Yes, or is it in

[Sen. Richard Westman (Chair)]: that's in captivity. So it's a part of the contract for the just at high level, remind me how many charging stations are out there that are we subsidized versus not?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So to date, I mean, we're in the process of a couple of others, but to date we only have one operational charging site that's in Bradford, but there are several in progress in Randolph and other places.

[Sen. Wendy Harrison (Clerk)]: Those are the ones that the state does. But, I mean, there's three massive banks of chargers, private chargers in my town alone. I mean, Tesla, right, which And has then there's two others.

[Sen. Rebecca "Becca" White (Vice Chair)]: There's a great math. I drive electric

[Sen. Wendy Harrison (Clerk)]: for markets. Yeah. And I

[Sen. Richard Westman (Chair)]: hope those are accurate. That might be our best data source. And so the average is the point

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: three two five.

[Sen. Richard Westman (Chair)]: It's just what the debt that's what they get showed their charge now and there's what percent and then that includes the six percent sales. Yes. Yeah. Okay. Yeah. So I'm questioning the inclusion of the slide.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: But this is really just to drive home that, you know, the average EV driver is paying roughly the same amount, whether they're traveling in, you know, within Vermont or in border states. And so and there aren't these, you know, per kilowatt hour fees outside of Vermont until you get to a place like Pennsylvania. This is just going back to comparisons that you've seen between the different programs that you've heard from. And, you know, where we ended up in terms of 1.4 per mile. Utah is now lower at 1.1¢, but had been at 1.5¢ per mile. They lowered it because they have a voluntary program, and they were trying to encourage more people to enroll. But they started off at 1.5. Oregon is at 2¢ and was hoping to increase that. Hawaii, as we've talked about, is at just a fraction of the cent. They also have the ability to, for their regional DMVs, to also apply a modest base user fee. So although the gas tax is much lower at about $0.18 $0.19 per gallon in Hawaii for the state, their regional gas taxes bring that effective tax rate to almost, I think, 40¢ per gallon. And then Virginia was at about 1.9¢ per mile. So again, pretty well in the middle towards the lower end of fees for electric vehicles. This is to give a sense of, you know, if you traveled a big chunk of your time outside the state of New Hampshire, what would be the real difference in annual payment versus someone who just traveled within the state of Vermont? So on the average, going back to the Ford 150s, you'd maybe be paying, you know, 185 in Vermont only, but 167. So just a minor difference if you traveled like 40% of your time in New Hampshire on board. Although, you know, if were traveling in the state of New York where you have taxes that are actually higher, you'd be paying slightly less as an EV than an average gas vehicle in that area. So it's, you know, you'll give some a little on the border, you'll get some in other parts of the state. And it's very much like how the gas tax is right now, where people might fill up in one state, drive in another, and it's more fluid than you might expect at the border.

[Sen. Andrew Perchlik (Member)]: And why 11,000 miles? Is that the average 11,000 miles? I thought we were higher.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So when it's yeah, we're at about 11,000. And when you take into account a lot of the less fuel efficient vehicles, they tend to drive many fewer miles. And so that kind of shrinks the average. But for all pleasure cars, it's

[Sen. Andrew Perchlik (Member)]: 11,000 miles is the average.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So this is the and I've included, again, your site, just the two pager that UVM developed. So you don't have to go back to the 40 page report. But this is taken from that. And it's looking at it, instead of just taking because the gas tax can fluctuate on a number of different factors, It's taking a five year average of that gas tax. And then, as I said before, looking at the distance weighted average for light duty vehicles of the fuel economy, which is 23 miles to the gallon.

[Sen. Andrew Perchlik (Member)]: And then did you talk on your slide that had the caps? Did you talk about that because I'm not paying attention? About the rock cap that some states have. And I assume NA means we don't have a cap, not that it's not applicable. It's not applicable because we don't have

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: a Because they're not applicable anymore. Yeah. And did you talk about why you joined now? So, yeah, we did talk about that, but we can talk about it again. So, you know, all these other programs are or have been voluntary. And even Hawaii is still voluntary. The caps have been used in a way to try to encourage more vehicles to participate in the Miles Phase two fifty by ensuring that vehicle doesn't pay any more than a certain amount. But I can go Yes, that's fine. I can show a different slide that basically visually what it does for the revenue projections if you put a cap in place effectively. Anybody driving or expected to drive more than the average or wherever the cap is set would choose that over a mild space use of it. So that's the difference that we've really learned from these other states in implementing a mandatory program in STOH. So this is the language, and Damian will walk through it in a little bit, but of how we get to the per mile calculation. And then addressing Senator Harrison's question, we're also proposing an inflation adjustment on an annual basis. What makes the most sense to us because of what is really driving the cost within our transportation program is the National Highway Construction Cost Index, which is managed by FHWA, and it's based on real cost data that state DOTs face. So it's not just based on, you know, a sample basket of goods, it's actual contracts and the markups and everything else that happens in the solicitation process. So we feel that it's an accurate representation of what the real costs are that are being experienced by the agency. That's been about UPM calculated actually based their projections that you all have seen in the report. And the policy brief on this index, which is I think the average was 4% in the past year.

[Sen. Andrew Perchlik (Member)]: Your box there, do sales tax automatically change to prices if the price doesn't change? And then are you saying it doesn't need that EV charge would have

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: to be manually increased by an index? So if like a sales tax, if the cost of something is rising, then it's naturally What if it doesn't rise? Then you're not adjusting. And do you think it should be if price doesn't rise? Do I think Well, it should be adjusted manually if the price doesn't rise over a twenty year period, ten year period If the cost of construction doesn't rise?

[Sen. Andrew Perchlik (Member)]: No, the cost of fuel. So what I think you're saying in that box, tell me if I'm wrong, is saying because gas tax isn't connected to the price, at least part of it, not by the gallon, that it doesn't need to be adjusted?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: No, I'm not making an argument one way or the other about adjustment of the gas tax. It's just that, you know, the gas tax mainly is not a sales tax, and so there's no way for it to adjust. There's a

[Damian Leonard (Office of Legislative Counsel)]: Just a small portion of it.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: You know

[Sen. Andrew Perchlik (Member)]: I thought this was to make the argument why the EB 1.4¢ needs to be indexed. No.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: It's, you know, the reality is that we expect much of the fleet to transition over the next several decades towards electric. And so, you know, what we've shown in our transportation funding study was that just the gas tax indexing as a measure does not provide a lot of benefit over time because you still have that same dynamic of, you know, you're taxing fewer and fewer gallons of gas because of increased fuel efficiency. And so you're going to see a decline even as the price increases. That dynamic is not true for a biospace user fee where it will increase over time because you've got

[Sen. Andrew Perchlik (Member)]: But are recommending to index the user fee. Yes, yes.

[Sen. Wendy Harrison (Clerk)]: So this index versus just a general index, like an inflation. That's what

[Sen. Richard Westman (Chair)]: This is what we're proposing.

[Sen. Wendy Harrison (Clerk)]: Yeah. Yeah. I think those really discrete indexes are helpful. I mean, there's a solid waste line. We just have to hope that the

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: government keeps them. Yeah. And Damien's added language in here that's, you know, the National Highway Class Construction Yeah. Index or the Successor Index.

[Sen. Rebecca "Becca" White (Vice Chair)]: Thank you, Mr. Chair. Yeah, I like this selection of your options that you've chosen for indexing. My main issue, and I feel like I'm a broken record on this, is if you look at it, that's we're not gonna get the money we need unless we also index the gas tax at the same time we're doing this. And so you're not making that suggestion.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Is that a question?

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

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: No. We're not Yes. Taking

[Sen. Rebecca "Becca" White (Vice Chair)]: So is there any so but so I guess that's really that's where I'm a no. Like, that's just where I'm gonna be a no on this. It's like, just doesn't logically make sense to add an index to a tax for a specific demographic of drivers to fill a gap when we're not doing that for the majority of drivers. Know, that's I don't think that's a fair taxation policy to index one subsection and not the other, and then expect that index, which this is like, if we're thinking of the Goldilocks of what the index options were, this is like the middle porridge, if I remember from Logan's presentation, this isn't the highest possible index. But to not also suggest that feels disingenuous to a lot of climate work we've done as well. So I have a lot of strong thoughts about that. Although I agree generally with your selection of the indexing, and I think that's the correct outcome based on the UVM report we got, they also still suggested that we index the gas tax, and that's not here. So do you see a world in which you would be able to propose a type of index for the gas tax in this language.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Well, I'm not the governor and I'm, you know, facing a recommendation off of what the legislature asked us to propose back to you.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yes, but like you're going off of their report and they're, you're saying we're doing this all because we have their report from UVM and they made these suggestions and that's why we're doing it, but you're missing out on one of the biggest parts of their report.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Well, don't think we are. If you take the graph that you're holding out

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, without with no mileage being indexing, we

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: would And you look need at and so there's multiple scenarios there. And what is the second highest scenario?

[Sen. Rebecca "Becca" White (Vice Chair)]: On top of having

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Generating revenue over time, it's a mileage fee for battery electric vehicles indexed.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yep, that

[Sen. Richard Westman (Chair)]: percentage would

[Sen. Rebecca "Becca" White (Vice Chair)]: go down if you didn't index. So that's built my understanding of the report and maybe I'm misunderstanding it. So please correct me is that that money that getting us up to 55 or so million dollars of revenue is built off of if there was no mileage fee in the indexed. If that's not correct, then you're looking at only 35. Maybe I'm misunderstanding it. I'm truly like that's this is a lot of information in context. So I'm not trying to be adversarial if it's a true misunderstanding. But it seems like with no mileage fee indexing is what they're building off of. So if you would, you're only going to get 35,000,000 or something if you're I might be misunderstanding that, I'm sorry. That's important.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So I don't know if you can see this. Yes.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, that's exactly what Okay.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So just so everyone is understanding what we're talking about here, This chart is looking at multiple scenarios. One is if we didn't have any mileage Oh, okay. Speed at

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

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: The second least is if we just had a mileage fee for battery electric What's the y axis? Revenue? This is revenue in millions. Okay. In $20.23 dollars The third is if we had a mileage fee for

[Sen. Richard Westman (Chair)]: all. Then

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: we have if we have just no mileage fee, but the gas tax per index. Yes. The second highest here, in terms of revenue generation over time, because it is looking at how the fleet changes over time, and this is based on the federal model, the MOOES model, that was designed with inputs prior to the Biden administration. So it was before there was any, you know, of the what had been proposed as much higher fuel efficiency standards before NEBI, before federal tax credits and the rest of it. So it's based on a very conservative EV adoption scenario. That produces the second highest amount of revenue. It's mileage fee for battery electric vehicles indexed. And the reason is because although EV drivers are right now in the minority, and it's important to recognize that the fee is on vehicles and their impact to the road, not on drivers, but because EVs right now are in the minority doesn't mean it's going to be so in ten, twenty, thirty years. And the expectation is that a huge part of the fleet will transition to electric over time. And so that's one piece of it. The second piece of it is that, you know, indexing allows you to actually, contrary to, you know, what happens with the gas tax, if you index it, which goes down over time, it will still decline, it will maintain pace with inflation. And so that's a lot of what we've lost in the past decade plus, is due to inflation, not just fuel economy. There's the electrification, which is probably about two million dollars two point five million dollars this year that we're losing. Fuel economy might be somewhere around 6 to 7 to $8,000,000 that we're losing because of fuel efficiency that has changed since 2013. But then inflation is in the couple of dozens of millions. So we do think that indexing, what is going to become the system and what the legislature itself has said will become the system, not just for electric vehicles but for all vehicles, that starting now, in the beginning with an index, will be an important part of developing what we think is a sustainable transportation funding solution.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, I just don't know. Yeah, I'm just never going to be able to vote for one specific index on an EV driver over an index gas tax being also in the competition. It just doesn't make sense to me because you have it. So and I understand

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

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

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: What this chart shows is that

[Sen. Rebecca "Becca" White (Vice Chair)]: And I understand where I'm missing.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: You would then be shooting yourself.

[Sen. Rebecca "Becca" White (Vice Chair)]: It doesn't show that.

[Sen. Andrew Perchlik (Member)]: Because what's not on here is if you did both. If you had a

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

[Sen. Andrew Perchlik (Member)]: You had an index mileage fee and an index gas tax. That's options.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yes, exactly. You would get what we're looking around $40,000,000 with it's about $40,000,000 if we do just indexing without a mileage fee.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: I'm saying if you don't adopt an index factor for the mileage based user fee for electric fee cost, then over time you will see this much lower

[Sen. Rebecca "Becca" White (Vice Chair)]: Yes, and I'm saying we need

[Sen. Andrew Perchlik (Member)]: to Senator White is saying, I do both.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah. And are you open to that language? And your response was talk to the governor, basically, if I understood correct.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: That's not what the administration is proposing.

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

[Sen. Richard Westman (Chair)]: Let me ask this, and this is my simple minded, what we're doing now fair?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: What we're doing now, fair? No. And that's why we proposed something different. We have vehicles that aren't paying, you know, what their fair share would be.

[Sen. Rebecca "Becca" White (Vice Chair)]: There'd be an infrastructure fee?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: And so even at $89 if we go back to the first slide here with Ford 150, is this fair? Same exact vehicle, roughly the same weight, if it's driven the same amount of miles, is it fair that, you know, in 2013 it was paying $271 and now $185 And if you just compare vehicles in this time, is it fair that one vehicle is paying $185 and another 89

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, you can make the same argument though for a fuel efficient gas car that you're making about EVs though. Is it fair that I have a more fuel efficient vehicle? This is a zero this is the most fuel efficient vehicle. So that's why most folks made the financial decision to purchase that vehicle is the most fuel efficient, because it doesn't use that type of fuel. But

[Sen. Richard Westman (Chair)]: ultimately, would be the fairest system that we could pay for? People are paying according to how they use the system? Which would be vehicle miles traveled for everyone.

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

[Sen. Richard Westman (Chair)]: from my point of view, what we're doing now is not fair. But the fairest system we could do is one where we set ourselves up to get to a place where everybody was vehicle miles traveled, and we were moving the Vermont fleet away from

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: fuel taxes. Right now, we don't have a fair system. We're trying to get to a fair system. But the fair system that you described, we can't get to right now. You have to take steps to do it. And so the first step is what we've outlined in multiple reports and what we've put into language now, is to start with what we know, but the group of vehicles that we know are not paying what they should be, that reflect the impacts on the roadway network.

[Sen. Richard Westman (Chair)]: I'm to say from my vantage point, what I hear at the table is angst about the unfairness of the system on both sides now and taking steps. But ultimately, the fairest thing that we could do is get everyone to a vehicle miles traveled sister.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yes. And can I just raise exactly my concern is we're going to endeavor down this pathway, we're going to pressure EV drivers with an index cost going up, and gas drivers are not going to be paying more? We're actually going to be in a situation where the cost is going up greater for drivers than it is for gas drivers. So it doesn't, and we're not going to make the switch to gas drivers in the course of time to actually right that ship. Like we're not going to every plan I've seen that we've had states present to us, they aren't even at the gas vehicle side of things yet, for the most part, they're not there yet. And we're talking five to ten years of development. And we're not even we haven't even rolled out a plan. So if we're going to have five to ten years of an MBA program with an indexed fee on EV drivers, and no change to the gas tax, that feels like a missed opportunity. And in fact, potentially costing EV drivers to hold the brunt of the lost revenue from the gas tax. So that's my main concern is once we start to play with that lever, they're a very easy group for people to target as elitist, to target as wealthy, to use all of those things to raise that tax. Yeah. I just worry if we're not gonna be doing these simultaneously, it feels not equitable. So I appreciate you, your calling. Well, I

[Sen. Richard Westman (Chair)]: certainly don't think where we are now. And the question is in over time, how do we get to a place that is fair to everyone. Also recognizing that we do have a pretty significant portion of our gas tax that comes from out of state. So how do we compensate for that in that?

[Sen. Andrew Perchlik (Member)]: Go ahead. And the other thing

[Sen. Richard Westman (Chair)]: I just remembered about the model, it might

[Sen. Andrew Perchlik (Member)]: have been before NEVI funds and increased tax credits, but it probably based on clean cars and a requirement that manufacturers ramp up EV manufacturing pretty drastically. No, because it's a national model. It That's wasn't a national, whatever, most states, California Not most states.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: About 15 or 17 states. Right. So they were the model is, and we can, you know, I think there will be testimony by UBM TRC, and you can ask the question, but I believe that that national model is based on the EPA fuel efficiency standards for the country, not California's labor for those. Well,

[Sen. Andrew Perchlik (Member)]: would be surprised if they didn't include the Californian in the states that signed on to clean cars. That would be a pretty poor model if they did, since it's a large percentage of the population.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah, but what I'm saying is that it was done before Vermont had adopted Advance Clean Cars two, which would have had a much higher EV adoption projection. I guess we'll have

[Sen. Andrew Perchlik (Member)]: to ask them what

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: those projections are. Because we had these discussions as they were doing their work, and I was clear that what we didn't want was an optimistic scenario where, you know, just it was 2035, everything was going to be EV sales. We wanted to make sure that it reflected where we are actually now, which is a completely different place than a couple of years ago. Right. And so that's why we instead went backwards to the moves model that was in place before a lot of the Yeah.

[Sen. Andrew Perchlik (Member)]: Would be interesting to see what the model is for EV adoption in veranda and other places. So also, there this is an increase tax for the certain drivers, right? So if you're paying $89 your tax will go up. Depending on

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: how much you got. If you did on the average. Yes, if you drive on average, it will go up to about

[Sen. Andrew Perchlik (Member)]: 154. And the Governor is okay with that tax increase?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah, because I think it's, you know, the argument that has been made is that they're not now paying what the average gas vehicle is paying. That for many years there weren't any taxes being paid in this transportation fund, at least through fuel taxes and mileage taxes. So we've got to a point where I think you all approved $89 for battery electric vehicles and $44.5 for plug in hybrids knowing full well that that is not, you know, necessarily what EVs are traveling on average and reflective of, you know, the full impacts to the roadway network. I think it was done at a lower rate because we didn't have the ability necessarily in six months' time to go and space those payments out. And that's been a key part of MIDAS based use of these from the start, from our road usage chart study in 2021, is that we want people to be able to pay more in line with how people pay the gas tax. So not one big income payment that we've seen in other states that have been, you know, more punitive. You know, some several $100 right up front is the registration fee. We didn't want to go there. We want to be able, with the mild space user fee, to have people elect to pay on a frequency that they can fit within their budgets, which might mean monthly or quarterly or even pay as you go. And so if we weren't able to do that with a flat fee, which is exactly why we didn't come to a flat fee in the first place through that study, because we felt that was unfair, that a mileage based user fee was the fairer way to go because it's based on what people actually do about public infrastructure.

[Sen. Rebecca "Becca" White (Vice Chair)]: The other point I would just raise that I really appreciate in the study is that they did break out to your point around like New Hampshire, New York, they did also break out if you're a driver in rural Vermont versus a driver in suburban or urban Vermont, the highest increased household looks to be the two electric vehicle households in rural Vermont, where they go from $178 to $400 in cost per year. So it seems counterintuitive to the years of work that we've done to promote rural electric vehicle driving, to then have them be the most directly increased group of people for their household budget.

[Sen. Wendy Harrison (Clerk)]: So I'm wondering if you

[Sen. Rebecca "Becca" White (Vice Chair)]: could square a little bit.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So I want to be clear on this point because when you look at, you know, who knows where gas taxes are today, but where they were at least yesterday, the gas tax is about roughly a tenth of what somebody might pay per gallon right now. So you're paying $3.2 a gallon, it's going to be about 32¢ a tenth of what people are paying. Every gallon of gas you don't buy, you're saving nine tenths of that gallon of gas, the cost of a gallon of gas. Whether you're in a, you know, fully electric vehicle, a plug in hybrid, a hybrid, even a fuel efficient vehicle. Every gallon of gas that you buy, you are saving nine tenths of that. And all we're saying is instead of saving 10 tenths, you're going to pay that one tenth of that gallon gas to be able to pay for the roads that you're driving on. And that's really the point, is to get people up to paying roughly the same amount based on, you know, how they're actually using the infrastructure.

[Sen. Rebecca "Becca" White (Vice Chair)]: I guess what would be really helpful for me would be to see to help me feel comfortable with your proposal, I would need to see what would the index amount most likely be in ten years, in five years, individually for the cost of folks, because what I'm getting from the report tells me that it's going to be a substantial $200 plus, a $222 increase for certain households. But I'm not going to see that increase for my constituents who have gas vehicles. So I need to understand, at what point does it become that we're actually charging EV drivers more than just one tenth? You know, so if there and maybe

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: think it a different way. The JFO last year, last spring presented on what is the current purchasing power of transportation fund dollars So right we're getting $0.32 a gallon roughly. And they looked at how does that compare in $20.25 dollars? How does that compare to years past? And so the last time the gas tax was updated in twenty thirteen-twenty fourteen, If you look at it in $20.25 dollars it would be about like $0.42 Okay. Terms of purchasing power. And then if you keep going, you have to go all the way before stock market crashed in 1929 to find a point in time at which people are paying less than what they are now.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yes, and that's why we should index the gas then. Because wasn't that the whole argument that was made before is you're paying a much lower percentage now than you ever were since, like, the 1970s. Isn't that the point?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: That's what Logan Yeah.

[Sen. Rebecca "Becca" White (Vice Chair)]: I would say that's even more so an argument for the

[Sen. Wendy Harrison (Clerk)]: gas tax index.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: That's certainly prerogative thing. You're

[Sen. Andrew Perchlik (Member)]: thinking about saving nine tenths of the cost because you're not buying gallon gas, but you're buying the electricity. So you're not saving it sounds like you're not paying that money.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Well, you're in a hybrid, yeah, you're if you save a gallon of gas, then you're not paying for that gallon of gas.

[Sen. Andrew Perchlik (Member)]: Right, just a more efficient view. Yeah.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: But in terms of, yeah, I mean, can look at it, I guess, if you take sort of drive electric Vermont estimates of about, you know, $1.5 $1.6 for the equivalent of a gallon of gas, then you're charging. So you're saving five tenths of a gallon, saving half the cost. But the point is you're saving, And you're also saving on federal gas tax that you're not paying, which is about half what you pay for the gas tax in the state. So there's, you know, when you actually compare what people are paying to what people are paying in gas vehicles, it's pretty significant.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah, but one of the arguments why we were all sold electric vehicles was you were going to not pay the gas tax, even as a like that was a you're going to pay less in cost for fuel over time. That's why you can pay a larger upfront cost for an electric vehicle. That was the argument that's been sold to many drivers. So I think for me to feel comfortable with this proposal, there's going to be some work that needs to be done to put in place a clear understanding why there's not a negative impact that will happen specifically to this demographic of car driver. And especially since we've made a lot of promises to EV drivers as a state about the value and benefit of them moving in this direction. So it does feel like we need to support them as much as possible as we raise a tax on them, which seems to be an argument that's made in every other world except for with electric vehicle drivers.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: I guess I'll just say, at this point, we're going

[Sen. Richard Westman (Chair)]: to begin to move on and get Damian up and present the language in I'll

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: just wrap up, I think it's being portrayed as we're proposing this on, you know, one certain group of people. I have one vehicle in my own household. It's an electric vehicle. Okay. I still want our road and bridge infrastructure to be maintained in a way that won't damage that vehicle. I also want the bus that I came in on this morning to be running on time and when I need it, so that that vehicle can be used by other people in my household. So I understand what you're trying to say, but there are multiple goals here that we're trying to work away at. And my point is, when you're buying an electric vehicle, you're not only saving on emissions and everything else, but you're saving still on money, even though a fraction of that money that you're saving is going to go back into the infrastructure that we all need, whether you're an EV driver or a gas vehicle driver. So at that, I think

[Sen. Richard Westman (Chair)]: I'll pass it over to him. I think we should go through the language that has been presented.

[Sen. Rebecca "Becca" White (Vice Chair)]: Got me there at the end, Patrick. That was good.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Good morning. Morning.

[Damian Leonard (Office of Legislative Counsel)]: I'm David Leonard from the Office of Legislative Council. So you all should have a what is a rough draft of the mileage based user fee proposal. So I'm going to jump in and

[Sen. Richard Westman (Chair)]: ask you before we get to that Mhmm. Just at a high level because you drafted a lot of this language around us. Where are we? What will happen if we implement this in the piece? It's my recollection that, and I don't see this in the numbers that are presenting, My recollection is when we implement this, that that registration becomes off. And so just remind me of where we are and what the ground is that leads into this. Okay. So

[Damian Leonard (Office of Legislative Counsel)]: the chair was referencing the current registration fees for pleasure cars. And so I'm joining the Zoom meeting now so I can show you the statute. But if you'll remember, the what we call the EV infrastructure fee was set up as an interim while this was developed. So the language here provides there it is. All right. So if we look down here, this is the current language and it provides that in addition to the regular registration fee, there's an annual EV infrastructure fee for a battery electric vehicle equal to the amount of the annual fee collected for registration. So basically, you pay two times your annual registration fee. So if you get a two year registration, it's gonna cost you $326 if you're driving an EV versus a 163 for an internal combustion engine vehicle. If you are driving a plug in hybrid, that's covered in c here. So it's one half the annual fee. So your annual fee would be $89 for internal combustion. For a plug in hybrid, you're adding another $44.50 to that. So you're up to a $133.50, I think. And then with the biennial fee, it's 163 plus an additional $81.50. So you're up to $244.50. So that's the current structure here. We have this flat fee, and you pay that regardless of how much you drive. The way we've set it up in the statute amends that statute to repeal subsection b, which is the EV infrastructure fee, but leaves in the plug in hybrid electric infrastructure fee upon implementation. Because if you remember right, the sub initially implements just for electric vehicles, and we haven't set out stages for what happens beyond that. And the way the effective date works is that amendments shall take effect on the effective date of the mileage based user fee for pleasure cars that are battery electric vehicles. So if you implement the mileage based user fee as proposed in this language for, say, next January 1, on that, as of January 1, the infrastructure fee would come off and the mileage based user fee would come on. So any mileage based user fee amounts you're thinking about, you should adjust that by registration fees will go down, but you'll have this mileage based user fee replacing that. So it won't necessarily be a breakeven scenario, but it's something that should be considered as you're calculating this amount. And I am not the person to project what it would be depending on how much you drive and so forth, but you could see some folks who drive less coming out ahead and some folks who drive more coming out behind. And so it'll be closer tied to how much you actually how many miles you actually put on your electric vehicle.

[Sen. Richard Westman (Chair)]: Alright. So I'm gonna just and this you may not wanna answer, but what it looks like to me is the legislature and the transportation committees took a step on an unequitable system. And what's being proposed is another step in in a in a system. I think

[Damian Leonard (Office of Legislative Counsel)]: that's a fair way to characterize the expressed intent and the around the mileage based user fee in the the past bill. So this has been in this has evolved over several t bills now going back several years where we started with no additional fee on EVs. And then there was the infrastructure fee imposed with a directive to the agency to begin working on mileage based user fee. And now you have the mileage based user fee proposal in front of you, and the intent was expressed as the mileage based user fee would be the next step. And then I cannot remember if the language was in last year's T bill that the intent was eventually the mileage based user fee would apply to all vehicles. Think it was. I know there was a lot of debate over that language. I'm going

[Sen. Richard Westman (Chair)]: to just speak for myself, and we need to go into the proposal and see what but for me, hearing the concerns with this and not in this, what really isn't talked about is how do we ultimately get to the fairest system that we could put in place. And so I would personally like to see this committee have that as a discussion that if this did come in as a step, do we see us getting, and what would it look like to get to a position where we were treating everybody equal?

[Sen. Rebecca "Becca" White (Vice Chair)]: Go ahead. Thank you, Mr. Chair. And I like this creative solutions oriented way of moving on this. I was very grateful for the language that we put in. And we did do it last year with section, I think talked about it in the UVM study. In session 18, the interim step for gradually expanding to all vehicles, I would like very strong language, if possible, in any draft that we do that calls out what is an interim? What exactly is the interim step? How long is that interim step? And when do we get to all vehicles that would provide me with assurances that this isn't just going to be a drawn out increased EV tax. So is there a way in the language and we're going to get it from the house. So it might I don't know what we're doing with this right now. We're not necessarily going make recommended changes to you. But if I wanted to draft language that had specific dates, that it must be all vehicles by 2030. It must be all vehicles by whatever date. Is that something that fits in with that language or how?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Absolutely. Okay.

[Damian Leonard (Office of Legislative Counsel)]: So that is a policy consideration for all of you as to how you want to implement this. The process of drafting it, once you agree on the basic structure for the mileage based user fee, as I go through this with you, you'll see that what it really comes down to for the structure of the fee itself is which vehicles does this apply to. And as you change, you can update that in steps. You can update that all at once. You know? So it can go any number of steps. You can go battery electric vehicles to just plug in electric vehicles, which would include plug in hybrids Mhmm. To all pleasure cars, to all motor vehicles, or you can just go straight to all motor vehicles or any other steps like that. And then you can add in exemptions. For example, we have exemptions for off road use of diesel. And, you know, so you may wanna include exemptions like that. So there there are various ways to create exemptions in here or to create staggered language, and we've done that in lots of other legislation over the years where we show this is where we wanna get to, you initially, and then we've set a timeline to get to point B or C or D down the road.

[Sen. Rebecca "Becca" White (Vice Chair)]: Is there also a way you could put in because I think the CAP ID, although not proposed by AOT is something that I would like to explore, especially if we're indexing it, and then we're going to surpass what a gas driver is basically being charged eventually. Could you create a cap in the language where that could never happen, where the cost would never like, if it got to a point where it went over what a gas tax what the gas tax users are saying, that it would cap it?

[Damian Leonard (Office of Legislative Counsel)]: With caps, there are a couple different ways to draft it. You've seen some of the other states put a a dollar cap on your your maximum fee. So that's certainly something that could be done fairly easily. But there are policy arguments formed against that. With the inflator, we frequently cap the inflator. So for example, the minimum wage is the increase in the CPI or 5%, whichever is less. So if when you have, like we did a few years ago where inflation was really high, there was that insurance piece there for for business owners knowing that their the minimum wage that they would have to pay their employees was only going to go up by 5%.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yes. That's kind of I that would give me some comfort if we could develop some kind of language like that. And maybe I'll talk

[Sen. Richard Westman (Chair)]: to my house and come

[Sen. Rebecca "Becca" White (Vice Chair)]: god. My my folks over there like a Patriot.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. So there there are different ways to do that, and there are probably variations on that too. Those are just two that come

[Sen. Rebecca "Becca" White (Vice Chair)]: And in the language, is there a way to separate out indexing at all? Like, the way that they have it? Could we not index the AMBA?

[Damian Leonard (Office of Legislative Counsel)]: That it's a policy decision for you. Okay. So whether you would index it or not. So for example, our gas tax currently is not indexed, although it does vary a bit based on the per gallon cost. And, again, I'm not the best person to talk about how that whole mechanism works. But you could make the decision to start indexing that. It currently, it doesn't index for inflation, but it does relate a little bit to the per per gallon cost. You can always make the decision to index or not index this. You can also adjust what you index it by. Yeah. So the the agency has proposed the NHCCI, which is tied to state highway construction costs. So and that's you know, so that seems to tie into what are you collecting this to use it for, what does the transportation fund go towards, but that doesn't mean that you have to use that inflator index.

[Sen. Andrew Perchlik (Member)]: We put a floor and a ceiling on the tip, right, for the whole just the tip. Mhmm.

[Damian Leonard (Office of Legislative Counsel)]: Okay. And you you can do that too. Yeah. The there are a variety of ways to to kind of approach this. You can set minimum amounts of the fee and then between this amount, you can also have the fee, you know, if you think about truck registration rates, they change as the truck gets heavier and heavier. There are a variety of ways to approach this. But some of the questions though for you as policymakers are what is going to be, you know, understandable for the public, administratively feasible, and make sense for, you know, the T funds in a way that, you know and provides the sort of support that you want us to provide for the T Fund. So ultimately, you folks have a lot of decisions, but I think within limits, we can draft many of them. What I can't do is, you know, single out some groups for preferential treatment unless there's a legitimate policy sort of basis for that because we do have things like common benefits clause. So I can't say I can't say Lamoille County

[Sen. Richard Westman (Chair)]: will pay

[Damian Leonard (Office of Legislative Counsel)]: us a lower mileage based user fee.

[Sen. Richard Westman (Chair)]: Mean, that would only be paid. Again, we don't have we don't have an interstate. I would say all of the counties that have an interstate should get a lower rate. They begin with w.

[Sen. Rebecca "Becca" White (Vice Chair)]: They're also lower.

[Sen. Richard Westman (Chair)]: So, you know, that doesn't that doesn't narrow up Lamoille County, but that does you know? Yeah. I think we should go through this. I would say in what you are had just articulated in some respects when we had Virginia here they struggled with that. Virginia said if you have mileage that's over 25 miles to the gallon, they make adjustments so you're for your payments. If you're 25, you were in a place and they other Virginia particularly sticks out to me as a place that tried to make adjustments to base upon mileage, tried to be fair to people to be as equitable and none of these systems are going to be perfect. But you know, I would hope that our overall goal at least to start this is how do we set ourselves on the path to get to the fairest system we can that meets the needs of the agency and meets the needs of Vermonters to not end up with pop ups in all their communities. And so why don't we go through this? Because by the time we get through this, it will be lunchtime. Yeah.

[Damian Leonard (Office of Legislative Counsel)]: Cool. But I will try to get you there on time. So turning to the language that you have in front of you. Like I said, this is an initial draft. So I've been working with Patrick on identifying potential changes and potential issues with the language. The house is considering it. What I'm going to do for you is flag the same things I flagged for the house when I walked through it with them last week. They've looked at this once and will be coming back to it this week just like you will. And then presumably, they'll have something in their t bill that they'll send to you and then you'll be able to work on further. So

[Sen. Richard Westman (Chair)]: And I would say at this point, what I have talked to Damien about, what I have talked to people about is if it was the will of this committee to go beyond this, to move more towards a system for everyone knowing that you can't put that in place. It will take two or three years if we went at breakneck speed to do this. What are the things that we would have to do to set ourselves up to look to the future to move towards that system, and put that on the table for discussion.

[Damian Leonard (Office of Legislative Counsel)]: So what this bill does is it it adds one section, which creates a new chapter 43 in title 23, which would be the mileage based user fee chapter. This is the same as we do for gas and diesel tax. They each have their own chapter. It states that the purpose of the chapter is to impose the mileage based user fee for battery electric vehicles, battery electric vehicle pleasure cars. That's approximately equivalent to the average amount collected by the state in fuel tax revenue from the use of non plug in electric vehicle pleasure cars and the combined amount of the electric vehicle infrastructure fee and fuel tax revenue collected by the state for the use of plug in hybrid electric vehicles. Right off the bat, I wanna highlight for you that those two amounts are not actually closely equivalent right now. And so you may want to tweak that language. And the the folks who understand the numbers better can explain that to you. But my understanding is that because of the way that the infrastructure fee and fuel tax revenue relate for plug in hybrid vehicles, their average amount is different than the average amount paid for a driver of an internal combustion engine vehicle. I should just get comfortable saying ICE. We can all start talking in the nomenclature. So forty three zero two creates the definitions. Account manager would be someone a third party that the agency or department contracts with to administer and manage the mileage based user fee. Annual vehicle miles traveled, full number of miles that a vehicle is driven during the mileage reporting period, which is the twelve month period. And we'll get to what that actually includes. BEV is a battery electric vehicle. Mileage based user fee is the fee charged for the annual vehicle miles traveled. The mileage based user fee rate is the per mile usage fee. Mileage reporting period means the time between annual inspections or the time between the most recent annual inspection and the terminating event. Terminating event means either the registering of a battery electric vehicle in a different state. So take your Vermont vehicle, you've moved, you registered in your new state, that's your terminating event. Or it's a change in ownership or lesseeship of the battery electric vehicle. So your lease ends, that's your terminating event. You trade your car in, that's your terminating event, etcetera. The one thing we missed in here, which should be in the next draft is the termination of your registration. So your vehicle is in a crash and gets totaled, you can terminate your registration at that time. Your vehicle is no longer road worthy and you're taking it off the road, you can terminate the registration. Your vehicle is being converted to a farm vehicle. And that was one other thing that you may want to consider is registration for highway use as opposed to farm use. We can talk about ways to deal with things like that. The 4302 is the section where you assess and calculate the rate. So it directs the Commissioner of Motor Vehicles to calculate and assess the mileage based user fee within fourteen days after the conclusion of the mileage reporting period. And then as soon as practical after that, to mail to the registered owner or lessee a statement of the amount of the fee. And as a reminder, last year, we updated the definition of mail to include electronic mail or other digital notice. So if you have a digital account with DMV in the future, things like that. And then this is in addition to any other fees and taxes imposed by this title. This somewhat future proofs this because if you have both fuel tax and a mileage based user fee on a plug in hybrid at some point in the future, this will cover that. And it allows you some flexibility to decide how to implement those things. The payment of the fee. So there are two options here. The first is to, within forty five days after the mailing date of the mileage based user fee assessment, just pay the full amount, similar to the way you pay your registration fee. The other option is to enter into an agreement with the commissioner to pay either in quarterly or monthly installments. So for folks who don't wanna pay, you know, let's say the full $154 if they drove 11,000 miles at the proposed rate all at once, they could break that out into four quarterly installments or 12 monthly installments. The calculation is proposed in subsection C at a 1.4¢ per mile rate. And then the number of miles traveled would be equal to the difference between the mileage shown on the odometer at the end of the mileage reporting period and the mileage shown at the beginning of the mileage reporting period. The subsection D here is the inflation adjustment that was proposed. You'll notice it does not have a cap on it. So if the NHCCI went up by 17%, it could go up by 17%. It does have a floor. If the NHCCI is flat or goes down, the fee does not adjust. So we keep the fee flat. So it doesn't so in other words, your fee can't go down from year to year. That, again, is a policy choice. This is the initial proposal from the agency here. So you can have it adjust up and down. Frequently, we put in floors in our adjustments, but there's nothing that says you have to do that.

[Sen. Rebecca "Becca" White (Vice Chair)]: Even if the price of electric well, okay. I guess it wouldn't be

[Damian Leonard (Office of Legislative Counsel)]: It's not tied to the price of electricity.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So that's Well, let's

[Sen. Rebecca "Becca" White (Vice Chair)]: say the price of electricity like, with the TIB fund, if the price of gas goes way up for d whatever. It wherever the fuel is of no. It goes up. It slightly goes down a little bit, the cost on the tax. Is that correct?

[Sen. Andrew Perchlik (Member)]: Only if it hits the ceiling.

[Sen. Rebecca "Becca" White (Vice Chair)]: But it it doesn't go down if the price goes way up further.

[Damian Leonard (Office of Legislative Counsel)]: I'd have to look at how the

[Sen. Richard Westman (Chair)]: tip on the structure. I mean, I think it would be nice Maybe for Vulcan. Well, what we'll do is we'll get people in here to talk about TIF in that piece. I, later in the week, have also asked that, and that's not on this subject, that we run through all of the programs in exactly how they run for the towns. Okay. So, you know, a little bit of go back to the basics. Did you get that? You. Thank you. We'll have

[Sen. Andrew Perchlik (Member)]: a

[Sen. Richard Westman (Chair)]: day in here where we buff up on all what we do. And

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: you'll

[Damian Leonard (Office of Legislative Counsel)]: see that under exemptions, there's a placeholder there. Just because the, as we were working through the initial draft, we weren't sure what exemptions would make sense in the initial draft, and that becomes a policy choice. So we talked about off road diesel being exempt versus on road diesel. So there are options here for you to to put in an exemptions. There there may need to be an exemption for for federal vehicles, etcetera. So and

[Sen. Wendy Harrison (Clerk)]: we're going to have trucks

[Sen. Richard Westman (Chair)]: if we don't already.

[Damian Leonard (Office of Legislative Counsel)]: Right. So this is battery electric pleasure cars.

[Sen. Wendy Harrison (Clerk)]: Understand. But at some point, it's a great way to

[Damian Leonard (Office of Legislative Counsel)]: Yeah. At some point, you could expand it to all motor vehicles. You know, you already have battery electric and plug in hybrid trucks Mhmm. That are on the road, and that technology is obviously evolving too. And so these are all policy considerations. So section forty three zero three. And what I wanna say is from this point on, this language was modeled on the gas and diesel fuel tax. And as you look at this, you should take into consideration that the gas and diesel fuel taxes tax on the distributors. So you're talking about relatively small number of entities that are delivering a relatively large amount of fuel versus the mileage based user fee where you have large number of taxpayers and relatively small amounts. So one thing that I've been looking at with the agency at this point is are there ways that it might make sense to change this language to reflect that reality. And this is something that the house is going to look into more. So this may change significantly before you see it again. But this would require the inspection mechanic to report the mileage shown on the odometer in the manner required by the Commissioner. And then upon the occurrence of a terminating event, requires the owner or lessee to report the mileage at the time of the terminating event in the manner required by the commissioner. So for a vehicle sale, that's already done on the odometer disclosure. But there may be other requirements, for example, if your vehicle is in a crash that totals it, the registration is terminated. How do you report your mileage then? But this leaves discretion for the commissioner to set up options at that point. Failure to file reports or pay the fee when due. So the first piece here is a $10 late fee for failure to file a report when it's due. The second is interest and penalties on failure to pay the actual fee when it's due. So remember, the reports are the odometer disclosure, the inspection report, etcetera. And then so the failure to pay the pay the fee when due would accrue interest at one and a half percent per month, so 18% per year. That's the maximum statutory interest rate on the amount that remains unpaid. And then also a 5% penalty for every 30 that remains unpaid up to a maximum of 25%. This is based, like I said, on the tax penalties. So On on on

[Sen. Richard Westman (Chair)]: tax penalties to Gas and diesel fuel. So

[Damian Leonard (Office of Legislative Counsel)]: this is based on the the way we penalize failure to pay your taxes that

[Sen. Richard Westman (Chair)]: are due on that. But this falls on the individual. Right. Those fall on somebody that is paying at the pump in a business that is doing that. Right. And so if I have

[Damian Leonard (Office of Legislative Counsel)]: a gas station, they pay $10. So what it actually comes down to is it's the distributors who are supposed to be filing the reports and paying the amount due. So it's not actually assessed at the point of sale as I understand it. It's assessed when it's distributed. Yeah. And so that's that's one of the the pieces around us that it may make sense to look at the different ways we address these payments here. For example, there's, you know, penalties for things like sales tax and gas tax, etcetera. And we have a different set of penalties for failure to pay your registration fee, failure to pay your license fee, which we were just looking at in the motor vehicle bill. Where, for example, if your fee your payment doesn't go through for your registration, your registration gets suspended until you pay that fee. Is it a late fee? I don't think so. I have to double check, but it may make sense to compare these things and then consider what makes the most sense and whether it's one or the other or something in the middle.

[Sen. Richard Westman (Chair)]: What I I worry about is when you compare it to the end, it's people that are doing the whole stuff. We must get big checks from big Windsor. This is if I've got all five to 800,000 vehicles that are out there doing this, it may administratively be a nightmare to collect $10.

[Damian Leonard (Office of Legislative Counsel)]: You're doing it every month. So there's there's an administrative cost that comes with us too if you're tracking late fees, etcetera. But this is also it's also just to put in the other piece of this, this is a different

[Sen. Richard Westman (Chair)]: system. I get it, but it just immediately what goes up in my head is even worse collecting $10 Right. Go ahead.

[Sen. Andrew Perchlik (Member)]: It's a different payment system than what? Like Than our registration system.

[Damian Leonard (Office of Legislative Counsel)]: So you don't pay 12 monthly installments for your registration.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Just the For your license.

[Sen. Andrew Perchlik (Member)]: But the system that you're sending it to DMV would be the same. It'd just be we do it quarterly or monthly instead of

[Damian Leonard (Office of Legislative Counsel)]: That's a better question for the agency, how they That would be thing and what

[Sen. Andrew Perchlik (Member)]: because I would think we would compare it more to DMV fees structure, so it'd be interesting to see that comparison.

[Damian Leonard (Office of Legislative Counsel)]: And so my my point here is not to tell you which is better. It's just to highlight that this is different from how we collect This is some late payments on the This

[Sen. Richard Westman (Chair)]: is just questions for people that are not at this table to explain why they chose this and versus something else. And yeah.

[Damian Leonard (Office of Legislative Counsel)]: And this is something that, again, full disclosure, I've been discussing with Patrick as we've been looking through this as, you know, does this make sense or not? Yeah. So and, obviously, the the ultimate decision is is up to you, but we've been looking at the different mechanisms and discussing where some of the language came from in the initial proposal. And, you know, that's the way to think of this is this is your first draft.

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

[Damian Leonard (Office of Legislative Counsel)]: So there is also forty three zero six in here provides for suspension of registration or refusal to renew if you haven't paid your fees, which would be similar to what we have for registration right now. If you don't pay your registration fee, as the Commissioner discussed, I think last week, if you don't make good on that bounced check or that late payment, within thirty days they will suspend your registration. Section 4,307, again, this is something that it requires keeping and retaining records for a period of not less than three years and allows audits. Again, with the tax system where you're talking about relatively large amounts, this is something we commonly do. There's a question of whether this makes sense for the annual fees. Something for you to look at more closely. It it seems like this may again be something where the records and this is something, again, I've been discussing with Patrick. The records are likely already to be with the DMV, the odometer disclosure, the inspection. The only one where there's a question is what happens when the registration is terminated? But that's something where you can provide a process for estimating or getting the the coitus odometer reading. You know, the vehicle is not recoverable, you know, then you may have to set up something where the commissioner can estimate. So but there you know, just considerations. There can be limited instances of vehicle fire where the odometer is destroyed. You know, that allows you to cancel your registration for that vehicle. That would be a terminating event. At that point, how do you estimate that mileage? Yeah.

[Sen. Rebecca "Becca" White (Vice Chair)]: Hopefully, we never have to.

[Damian Leonard (Office of Legislative Counsel)]: Hopefully, you never have to, but it

[Sen. Richard Westman (Chair)]: is Actually, for the first time in my life, this fall, I've seen two vehicle fires. Yeah. One on the interstate when we the day we met in December driving home a car and on the way home I think you saw the same car. And then I saw a school bus about a month ago in the Williston Park in in Williston at the parking lot and all on fire it was like wow.

[Sen. Rebecca "Becca" White (Vice Chair)]: Okay. Well, guess we do need to come up with a plan then. Dang.

[Sen. Richard Westman (Chair)]: I've never seen one before in my whole life. And then I I've I've seen two in the last six months.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah. Yeah.

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

[Damian Leonard (Office of Legislative Counsel)]: It it is a possibility.

[Sen. Rebecca "Becca" White (Vice Chair)]: You can we just say you don't pay the tax? I mean, I

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: don't know. I mean,

[Sen. Rebecca "Becca" White (Vice Chair)]: I think honestly, like, if you if it's you, we don't charge you the tax for the difference between your last payment to when your vehicle Burned. Burned. Like Right. I don't know why we gotta petty pitch someone who just lost a car, I guess.

[Damian Leonard (Office of Legislative Counsel)]: So these these are policy choices for

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

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: You know, the

[Sen. Rebecca "Becca" White (Vice Chair)]: The DMV commissioner angle, we can have them decide what they wanna do.

[Damian Leonard (Office of Legislative Counsel)]: Right. You know, these are these are things where, as we've been going through, we've been identifying potential gaps and points where, you know, with the with that, the records are likely to be with DMV unlike with the gas tax where, you know, the state doesn't keep the inventory and the invoices for, you know, a an a gasoline distributor. So they need to keep their records in case there's question about whether their tax returns were accurate. This is a little bit different scenario. In forty three zero eight, this sets out powers of the commissioner. The What I should highlight before I go through this is with the audit and late payment provisions in there, there is an appeal system that's set up based on the way appeals are done for those taxes versus the way appeals are done if your registration is suspended. Again, depending on how you structure that, some of the language in in this section for powers of the commissioner would be unnecessary if you structure it more like the registration appeals rather than the tax appeals, and I'll get to that. So the general authority is to administer and enforce the section or the chapter. It gives the commissioner rulemaking authority, allows the commissioner to prescribe forms, to contract with an account manager, to with the approval of the governor or and the secretary of transportation, enter into reciprocal agreements with the District of Columbia, Canadian provinces, and other states to provide for reciprocal enforcement of the mileage based user fee. This language in here could probably use a little bit of adjustment just to reflect the way the mileage based user fee is. Again, it was based on the tax law. And we have reciprocal tax law language that's out there, but there may be some some ways we can refine this to make it reflect the the fee. And the the idea with this is that eventually you would, one, be able to allow for other other entities in the agreement to use our courts and we can use their courts to collect unpaid fees when people move. And it would also, once you get to the point where you can geofence, allow you to apportion mileage based user fees based on state. So if you get to that point in the future, understanding that there are all sorts of policy considerations around privacy, etcetera, This would potentially allow you to apportion fees the way we do for commercial trucking where under the international registration plan. And so then five and six here allow the commission to hold hearings, take depositions, administer oaths, compel attendance of witnesses, subpoena records. This is stuff based on the tax appeals where if someone is appealing their taxes, the commissioner can subpoena their records as part of an audit, etcetera. And then the same with C and D. They include penalties of perjury and allows the commissioner to use the courts to compel attendance of witnesses or the subpoena of records. This may not be necessary if you structure this more like a registration fee than like a tax in terms of how the appeals are done. Proceedings to recover unpaid amounts, 4,306. A is a civil enforcement action, which basically allows you to go to court to collect unpaid fees.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: The yeah. Sure.

[Sen. Andrew Perchlik (Member)]: Yeah. Are the unpaid fees for that owner or do they have to get paid by somebody? So like if you register every year on July 1, but you get rid of the car on June 30, who did you sell it to the new person, the new person have to pay the tax?

[Damian Leonard (Office of Legislative Counsel)]: No. It's the owner of the owner who owed the tax. So the owner

[Sen. Andrew Perchlik (Member)]: They're not filing a new registration, though.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. So if they've terminated so let's say, you know, I was the owner of an electric vehicle under this. What this allows is I have, you know, let's say 20,000 miles and I don't pay the fee on that.

[Sen. Andrew Perchlik (Member)]: Well, no. But my question is, like, if you don't know what the miles are for that year because you haven't had an inspection, your registration inspection kind of lines up. So like a week before the inspection, you sell it.

[Damian Leonard (Office of Legislative Counsel)]: Then there's an odometer disclosure when you sell. And based off that odometer disclosure, your fee is calculated. And then if I don't pay that fee, this allows the state to take me to court to collect that fee. Okay. That's that's what a does. It doesn't go on to the new owner. Right. They're gonna they're gonna pay from that odometer disclosure forward. Okay.

[Sen. Andrew Perchlik (Member)]: Are there any case law from the other states we've talked to about loss of revenue from people moving out of state and just saying, no, no, no, Does it follow, in other words, would it follow them to the next state and be reciprocal? So that's what

[Damian Leonard (Office of Legislative Counsel)]: the language about entering into reciprocal agreements was intended to address. So you could enter into reciprocal agreements with other states as this goes along, them to enforce their amounts due in our state and us to enforce in their state. And then also potentially to apportion. I don't know of any cases right now, and I don't know what the experience is in the other states. That would be a better question maybe to ask them to comment on Yep. What their experience has been. But this is still fairly new, so I'm not sure how much experience there is going on with this.

[Sen. Richard Westman (Chair)]: I'm trying.

[Sen. Andrew Perchlik (Member)]: You go.

[Sen. Wendy Harrison (Clerk)]: Yeah. Go ahead. So I this I don't think we're gonna answer this question, but I just I think at some point, we should talk about how right now when you pay for gas or electricity, you pay for it in advance of using it. And this system has us has people paying after they use it. And they're it's just different because sometimes you just have money for a couple of gallons of gas. And I I'm concerned about making sure that folks are able to pay after they've consumed it. It's just a different mindset.

[Sen. Richard Westman (Chair)]: Well, I it you know, it occurs to me in this, this is all based on exact language usage. And in all of the other states, what they do have had is you can start the year and pay a blanket amount if you don't want to go through any of this and you just pay a blanket amount ahead of time like that and you aren't bothered with any of this. And I could see, you know, but it's a that's a different mindset. Right. And I think most of the states that we looked at had a number that they sat. That's super scary. Yeah. But that leaves it to an individual's choice.

[Sen. Andrew Perchlik (Member)]: Yeah. And the more I think about it, even though I heard Patrick say that they were trying to get people to join so they have a low cap, but I think a higher cap makes sense to me at this point because administrative ease would be if I was the commissioner of DMV, I'd want people to pay up front. I would take a discount to get the money up front and get one lump sum trying to do, you know, monthly billing. It's just like other things. If you pay upfront, you get a discount. So I think there's a value in that, especially as we're doing it.

[Sen. Richard Westman (Chair)]: The Hawaii database amount, Virginia does that.

[Sen. Andrew Perchlik (Member)]: But his argument was that they weren't mandatory, so they were trying to encourage people, but I think there's administrative savings that should be calculated into that. I'm

[Sen. Richard Westman (Chair)]: not disagreeing with you, But this doesn't contemplate a flat fee at the beginning. I personally think that there's some people that instead of going through all this might say even though it was a higher price that they might upfront say I'm going to pay. Would be one of Depends on how high it was. Yep.

[Sen. Andrew Perchlik (Member)]: And with that system, there's no truing up at the end, you're flat B. Yeah, you're flat B. So my worry is, and I shouldn't be saying this because I'm one of those guys, would pay the flat fee and I drive like 24,000 miles a year. I'd be making out the demand. But how many are those? You're kind of a It might be an exception there, but But there's a few.

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

[Sen. Andrew Perchlik (Member)]: Yeah, those

[Sen. Richard Westman (Chair)]: are. I don't even That may be something we just want to talk about.

[Sen. Andrew Perchlik (Member)]: Yeah. Right, we probably know that we know how many does this, like, if we set it up 15,000 miles, how many people do 25,000, how much are we losing there versus the administrative benefit of just making it And on pay to do that, you almost you have to do a lot of driving out of state where you're paying, you're not Right.

[Sen. Richard Westman (Chair)]: Well, know, where we set the fee, we might say it's blank above. Yeah.

[Sen. Andrew Perchlik (Member)]: And, you know, whatever. One other thing about I forgot what else was on my other other point when it's gonna be okay. I forgot.

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

[Damian Leonard (Office of Legislative Counsel)]: Subsection b allows for tax lien, essentially. This is, a question of do these amounts so the the

[Sen. Richard Westman (Chair)]: Thirty days.

[Damian Leonard (Office of Legislative Counsel)]: There's a question here of whether the amounts are big enough to warrant pursuing a tax lien.

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

[Damian Leonard (Office of Legislative Counsel)]: right. Because it that costs money too. So that's the only question that was raised on this is, again, this is designed around when you could put a lien on, like you know, for a large amount of unpaid taxes. It might make sense, but does it make sense if, you know, you're talking about a $175 plus interest? And then c allows for private collection agencies. So this is would be an instance where, you know, the rates past due after a certain point. It would allow the commissioner to use private collection agencies. My understanding is we're getting a little more information from DMV on whether and to what extent they they already worked with private collection agencies and so forth. 4307 allows for judicial review. This is an appeal from the commissioner's decision. At at some point in here, you need to have some sort of due process if there's a dispute over the fee. The question is what's the you know, the policy question for all of you is how much process do you want? This proposes an appeal to the commissioner followed by a final appeal to superior court. The the question is whether maybe it's just an appeal to Superior Court or some other process. And one thing that we can do as we move forward is get you information on what that appeal process looks like or some of the more administrative decisions like registration fees, etcetera. There's a dispute over that with the DMV currently just so you can compare and contrast and make an educated decision. And that's all I've got. So that's the end. And as things get updated upstairs, I can provide you with additional updates on that and so forth.

[Sen. Andrew Perchlik (Member)]: I remembered my question. Can you remind me about the rules? You can't register you can't drive a vehicle here registered in another vehicle in another state. So if you're if you're living in Massachusetts and then moved to Vermont, you couldn't keep it registered in Massachusetts or have, like, your in laws keep it registered in Massachusetts to avoid this fee if you had an EV. That's against the law now. Right?

[Damian Leonard (Office of Legislative Counsel)]: Yeah. You're when you become a resident here, you're supposed to register your car here. I can't speak to Yeah.

[Sen. Andrew Perchlik (Member)]: I've met a constituent talking about the inspection the other day, and they said, well, yeah. My car is registered in the state because it can't pass inspection in Vermont. So I just have my in laws register it. So I don't know how common that is or or how you even try to enforce that. It just looks like another car from Massachusetts.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. So, I mean, the you're supposed to register your car here. It becomes a bit of an enforcement issue. I am aware of folks who have gotten me ticketed in other jurisdictions when they haven't registered their car there. I don't know the extent to which that's happened in Vermont. So they would

[Sen. Andrew Perchlik (Member)]: just know.

[Damian Leonard (Office of Legislative Counsel)]: So it's

[Sen. Andrew Perchlik (Member)]: not like we know you live here. So how is your car registered in another state?

[Damian Leonard (Office of Legislative Counsel)]: So the the example I'm familiar with was an individual who had moved to the District Of Columbia, and their car was parked on the street. And after six months, they got a ticket on their window because they passed the deadline. Yeah. The the cops who came down the street.

[Sen. Andrew Perchlik (Member)]: Right. I've seen this car for Right. Six Okay. And there's a possibility that a constituent like Andy's talking about could it's being registered in another state, he could be driving his in laws car. Well, that's what it basically that that's what they said they were doing. Like, the in laws have it. They were like, just keep registering and messages until I can afford a better car because I can't get it inspected here. So

[Damian Leonard (Office of Legislative Counsel)]: Yeah. And there you get into other issues too, like whose name is the car in?

[Sen. Andrew Perchlik (Member)]: It's not Massachusetts. It's just another state that doesn't have inspections.

[Damian Leonard (Office of Legislative Counsel)]: You have college students who are living here part of the year, but not permanent residents. Right.

[Sen. Andrew Perchlik (Member)]: Right.

[Damian Leonard (Office of Legislative Counsel)]: And so there there are some questions and but we can look at at those penalties too if you'd like. Yeah. But I'm not the best person to answer questions about how that gets No. Enforced to the extent to which it gets enforced.

[Sen. Andrew Perchlik (Member)]: That discussion was sufficient. K.

[Sen. Richard Westman (Chair)]: Okay. You. It seems like lunchtime. Yeah. Perfect.