Vermont Legislature SmartTranscripts:

[Sen. Richard Westman (Chair)]: So I think we're our Tuesday, the seventh. This is Senate Transportation. We are here with Amy and Leonard, and we are back on the mileage based user fee pieces. And, Damian, you're on.

[Damian Leonard, Office of Legislative Counsel]: Good. Thank you. For the record, I'm Damian Leonard from the office of legislative council. So I think committee members have a printed copy of draft 3.1 in front of them. There is a slight update.

[Sen. Richard Westman (Chair)]: 3.2.

[Damian Leonard, Office of Legislative Counsel]: Okay. So you I see 3.1

[Sen. Richard Westman (Chair)]: in front

[Damian Leonard, Office of Legislative Counsel]: of senator Brennan. I have 3.2. Okay. I have three point

[Sen. Richard Westman (Chair)]: Alright. So which one would we be working?

[Damian Leonard, Office of Legislative Counsel]: 3.2 would be the one to work from. There is a one line difference between them, and I'll point out where it is. So if you have 3.1, don't mean to worry about it.

[Sen. Rebecca “Becca” White (Vice Chair)]: And can you tell us a little bit about where this draft it comes from?

[Damian Leonard, Office of Legislative Counsel]: This is the markup from our last section. Okay. Beautiful. So and continued work with Patrick at the request of the committee on updating language. I know there's additional input from the agency too, but I'll walk you through the changes. So I've updated the findings. Everything in yellow is new or revised. So I went back to the history of the gas tax in Vermont to give it some context there. The and then provided that because the limited variety of mass produced vehicles available when it was adopted, gas tax, and the labor adopted diesel fuel tax served as use fees that required drivers of light duty motor vehicles to contribute to the state's transportation fund in an amount that reflected the amount of miles that each vehicle was driven on Vermont's surface transportation system. I would note that back in 1923, it wasn't called the transportation fund, but I don't think we need to get that technical probably. Since 1923, the variety of vehicles, has expanded greatly resulting in a wide variety of internal combustion engine types and designs with significant differences in fuel efficiency. Improvements in fuel efficiency among light duty motor vehicles and the increasing adoption of hybrid, plug in hybrid, and battery electric vehicles is leading to reduced fuel consumption among newer vehicles. Battery electric vehicles do not require gasoline and diesel fuel, and the $89 annual infrastructure fee paid by owners and lessees of those vehicles is less than the average amount of fuel taxes collected in relation to light duty motor vehicles. As a result of the differences, between different types and ages of light duty motor vehicles, the current system for funding Vermont's surface transportation system has become inequitable when considering the miles traveled by each vehicle. And that as I'm reading that paragraph, I realized that might be a little clunky. In contrast to the current system, a mileage based user fee imposes a per mile fee for usage of the state's highways and ensures that owners and lessees contribute to the transportation fund in an equitable manner. Vermont's taxes on gasoline and diesel fuel were last increased in 2014, and the federal taxes were last increased in 1993. Reduced fuel consumption and unchanged tax rates resulted in have resulted in stagnant fuel tax revenues that have not kept pace with inflation or the needs of the transportation system. In addition to stagnant fuel tax revenues, Vermont's demographic constraints and changes in vehicle ownership and usage have limited the growth of fee revenues to transportation funding. Yeah.

[Sen. Andrew Perchlik (Member)]: The question on I mean, I hate to talk about my names, but what what does it mean in this context of demographic?

[Sen. Richard Westman (Chair)]: Oh, yeah. This is

[Damian Leonard, Office of Legislative Counsel]: Okay. We discussed this last time as well. Demographic constraints we have an aging demographic and a population that is stagnant or shrinking. So those constraints mean that you're not seeing increases in vehicle registrations and the associated fees. This language was lifted directly from JFO's presentation on the transportation fund at the beginning of the year. I'm happy to change it since it seems to have Yeah.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah. We first talked about I thought it

[Sen. Wendy Harrison (Clerk)]: was saying, like, older people do different things with their

[Sen. Rebecca “Becca” White (Vice Chair)]: vehicles there. What they were saying is there's just less people. Well

[Sen. Andrew Perchlik (Member)]: So in the in the road, the miles of roads are the same. Yeah.

[Sen. Rebecca “Becca” White (Vice Chair)]: That was kind of bad.

[Sen. Andrew Perchlik (Member)]: Maybe less people you have less work you need, but they just get old anyway. I'm fine with it. We don't need to study more than 100%.

[Sen. Wendy Harrison (Clerk)]: Did you want comment on who goes on?

[Sen. Richard Westman (Chair)]: We're trying to get through it to get a final draft. So if you've got something you want changed, embarrass me now.

[Sen. Wendy Harrison (Clerk)]: Okay. So it's back on the first page. Yep. But it's a pretty quick thing. We're probably line 17 or 18, we were talking about the variety of mass produced light duty motor vehicles. I think this is great to point this out and start it 1923, but it's more than just the engine types, it's also the vehicle types. I mean there's such a huge variety of weight mainly and that's what impacts the roads. So just saying, just including vehicle types.

[Damian Leonard, Office of Legislative Counsel]: Making changes as you speak. So

[Sen. Wendy Harrison (Clerk)]: Do you want to

[Damian Leonard, Office of Legislative Counsel]: I got it.

[Sen. Wendy Harrison (Clerk)]: Okay. And then on page two, line two, I think VEV should be spelled out the first time you use it.

[Damian Leonard, Office of Legislative Counsel]: Yes. Sorry.

[Sen. Wendy Harrison (Clerk)]: And then, line nine or 10. You ready? Okay. This one actually is debatable, but on line 10, I think it should say the current system for funding Vermont surface transportation system through the gas tax has become inequitable.

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

[Sen. Wendy Harrison (Clerk)]: You can even just

[Damian Leonard, Office of Legislative Counsel]: Through fuel taxes?

[Sen. Wendy Harrison (Clerk)]: Yeah, through fuel intensive gas tax.

[Damian Leonard, Office of Legislative Counsel]: Yeah, because we have diesel fuel taxes.

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

[Sen. Wendy Harrison (Clerk)]: And then I was

[Damian Leonard, Office of Legislative Counsel]: Okay. Just trying to find where you are.

[Sen. Wendy Harrison (Clerk)]: And then, surface transportation inequitable when considering the mile traveled, think it's the impact, more than the miles. I mean I know the miles relate to the impact but it's the miles plus the size and weight. It's the impact of each vehicle or the variety of impact or something like that.

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

[Sen. Wendy Harrison (Clerk)]: And I won't have this many going on. And then I would just say, on line 13, just there's a distinction between drivers and lessees. Let me think about it. Okay, then I think this is fine. I'm sorry. This should be fine because the drivers are not the ones who pay the MBUF. The MBUF is paid by the owners or the lessees. So that should be owners and lessees.

[Sen. Richard Westman (Chair)]: Okay. So I'm caught up now.

[Damian Leonard, Office of Legislative Counsel]: Okay. Thank you. Let me just changes. Thank you for those.

[Sen. Wendy Harrison (Clerk)]: Welcome. Thank you for receiving.

[Damian Leonard, Office of Legislative Counsel]: Alright. Okay. And now where we left off, the July 2025 consensus forecast finding is unchanged. The inflation under the NHCCI finding is unchanged. I added owners or lessees of electric vehicles in intent paragraph one to reflect that it's not the vehicles that contribute. Paragraph two is new. It says it's the intent of the general assembly to ensure that owners and lessees of all light duty motor vehicles contribute to the transportation fund in amount that reflects the annual miles traveled by each vehicle by expanding the mileage based user fee to highly efficient light duty motor vehicles, such as plug in hybrids, hybrids, and vehicles with efficient internal combustion engines on or before 01/01/2029, and to all light duty motor vehicles on or before 01/01/2031.

[Sen. Andrew Perchlik (Member)]: Thanks. And

[Damian Leonard, Office of Legislative Counsel]: third, revised paragraph three, say it's the intent of the general assembly to develop and implement mileage based user fee in a manner that does not discourage ownership and use of BEVs and highly fuel efficient vehicles consistent with the intent of the Global Warming Solutions Act and the state's climate action plan.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah. If you can tell

[Sen. Wendy Harrison (Clerk)]: me a little bit more about that.

[Damian Leonard, Office of Legislative Counsel]: So

[Sen. Rebecca “Becca” White (Vice Chair)]: because I don't think it's the intent. It is the requirement.

[Damian Leonard, Office of Legislative Counsel]: So I work with Ellen on this language. Okay. So hold up. The e email from Ellen. So She had two options. One is develop and implement, the fee in a manner that is consistent with the requirements, and that does not discourage ownership and use. The other is consistent with the intent. So I'm happy to go with either way. She felt that both were accurate statements.

[Sen. Rebecca “Becca” White (Vice Chair)]: Then I would be thank you. I appreciate that. Then I I'm okay with it if that feels like that does speak to if those are interchangeable thoughts, I'm fine.

[Damian Leonard, Office of Legislative Counsel]: Yeah. She felt that both were were an accurate statement. The in talking to her, she raised some concerns that the there are broader requirements in the Global Warming Solutions Act and Climate Action Plan than just vehicles than one part of that. But she said either would be accurate to say. I I went with intent because they're both broader than that, but I I'd be happy to say requirements. It would still be an accurate statement.

[Sen. Rebecca “Becca” White (Vice Chair)]: I'm fine with the answer.

[Sen. Richard Westman (Chair)]: I don't think either one sounds fine to me. Okay.

[Sen. Rebecca “Becca” White (Vice Chair)]: Thank you for taking the time.

[Damian Leonard, Office of Legislative Counsel]: Oh, no problem at all. Thank you for pointing that out. Alright. Let's see.

[Sen. Rebecca “Becca” White (Vice Chair)]: I think it's a really well written finding section.

[Sen. Andrew Perchlik (Member)]: Yes. We've worked a

[Damian Leonard, Office of Legislative Counsel]: lot on it. So alright. The next change in the definitions, you'll see that what I did is I got rid of the definition of the covered vehicles. I looked at the EEV and just change it to covered vehicle. What this allows us to do is it allows us to update the bill in the future without having to change every section throughout the MyLeadPage user fee. So it gets rid of those statutory revision sections that I had in the original version. Good. And it just means that for 2029 and 2031, you can just change the definition of covered vehicles. Hopefully, that works. So you'll see covered vehicle highlighted through. Now it's been it's replacing BEV every place you see us. The next change that's different from that is finding six on line seven of page or excuse me. Definition six, mileage reporting period on line seven through nine or seven through 10 on page five, required annual inspections instead of just annual inspections. And then going forward in and this is the change in between 3.1 and three point two and forty three zero three a a one. 43.1 had a subdivisions a through d because I'd accidentally left in the flat fee. The agency is asking that the flat fee be taken out initially When we get to their proposed update to the transition, you'll see why there is actually a flat fee in there that's then applied towards your mileage based user fee. And then it's back to a report on a flat fee option in the future as we expand to other vehicles. So there were concerns that the $225 flat fee 100 and was not enough and and may have created some incentives to not participate in the program by the folks who drive large mileage or high annual mileage.

[Sen. Rebecca “Becca” White (Vice Chair)]: So you lowered it to $2.25?

[Damian Leonard, Office of Legislative Counsel]: No. So the annual fee of $2.25, which was in there, and the prior version is now from this version.

[Sen. Rebecca “Becca” White (Vice Chair)]: Oh, it's still in my version.

[Damian Leonard, Office of Legislative Counsel]: That's 3.1.

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay. Can we please have So

[Sen. Richard Westman (Chair)]: 3.2. Yeah.

[Sen. Rebecca “Becca” White (Vice Chair)]: Oh, I don't have it on the website. It oh, it is on the website? Yeah.

[Sen. Andrew Perchlik (Member)]: Oh, yeah. Okay. Yep.

[Sen. Wendy Harrison (Clerk)]: But can you tell me where the So

[Damian Leonard, Office of Legislative Counsel]: it's it's line 10.

[Sen. Richard Westman (Chair)]: Okay. Delete. Delete. It's gone.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: That's gone. Got it.

[Damian Leonard, Office of Legislative Counsel]: So And that's

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

[Sen. Wendy Harrison (Clerk)]: change. Do you see it?

[Sen. Richard Westman (Chair)]: Yeah. This one?

[Damian Leonard, Office of Legislative Counsel]: Okay. That is the only change. That was the minor error that Patrick pointed out to me this morning that I had missed. And so that's why I sent a new version. I had deleted it everywhere else and missed that. I apologize. That was my mistake. I'm sorry. I didn't explain that as clearly as I could have.

[Sen. Richard Westman (Chair)]: No. That's I didn't agree.

[Sen. Rebecca “Becca” White (Vice Chair)]: I just wanna understand. Yeah.

[Damian Leonard, Office of Legislative Counsel]: So there should be only on line 10 of 3.1, Line 10, page six. What page? Page six, line 10 of draft 3.1 should be struck.

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

[Damian Leonard, Office of Legislative Counsel]: On page six of draft 3.2, there is no line. That Line 10 is gone. So Subdivision A 1 is gone. Okay. Okay. Yeah.

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay. So no. So wait. I do not if I if can I tell you what I think you're doing? And then tell you if that's wrong, you correct me. I believe you're fully taking out the fee option.

[Damian Leonard, Office of Legislative Counsel]: So flat fee opt in the way that this construct is proposed to work, and AOT will speak to why, they asked to have the flat fee removed as part of this draft.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: The

[Damian Leonard, Office of Legislative Counsel]: the transition would require a flat fee of $89 paid with your registration that's then credited towards your mileage based user fee as folks transition into the program. So you're not getting a bill, a big bill all at once. Instead, you're continuing to pay what's currently the infrastructure fee and would be called road usage charge at this when you register your vehicle, and that's then credited at the end of your mileage reporting period as you transition into the program towards your bill. So you're for your first two years. The study language that has them coming back with a fleshed out flat fee option for 2029 that you can then choose to implement or not at that point. So

[Sen. Rebecca “Becca” White (Vice Chair)]: I guess I'm just a I'm a little confused because I don't remember anyone in the committee asking for this language, and it sounds like like, I literally don't remember anyone asking for that. So if someone did, I apologize. I did hear it. And then it seems like, if I'm understanding correctly, folks won't know what the flat fee is until we get something presented to us by AOT. So I would prefer if we went back to having that in there, even if it's complex. As I think of myself as a driver, I'm already getting uneasiness with this and I could see us pushing all of the dates back, especially for BEVs because it doesn't seem like it's all worked out yet and this is being rushed. And this is one of those pieces that was really fundamental that I thought we had voiced. The flat fee would be an option that many people would prefer because it's administratively less burdensome. So I guess I'm confused about like what direction we're going and where you're saying that this was just added because AOT had said that they wanted to take it out?

[Damian Leonard, Office of Legislative Counsel]: When I was working through the draft with AOT, the last piece that I was waiting on was an updated amount from AOT. There is no updated amount. The they asked that it be taken out of the draft and that they be allowed to present their reasoning for that. I asked the chair how he would like me to proceed. He said, take it out of this draft for now. They can present their reason. Obviously, it's a committee decision at the end of the day. So I do wanna be clear. This wasn't a unilateral Okay. Act on my part.

[Sen. Rebecca “Becca” White (Vice Chair)]: That makes

[Sen. Richard Westman (Chair)]: me wonder.

[Sen. Rebecca “Becca” White (Vice Chair)]: Just because you work together to come up with

[Damian Leonard, Office of Legislative Counsel]: So I met with the chair yesterday and

[Sen. Wendy Harrison (Clerk)]: Oh, okay.

[Damian Leonard, Office of Legislative Counsel]: Gave him an update on what I have and what it didn't have.

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay. Yeah. Especially since there seems to not be, like it's not called out that that was taken out of the draft. Now I'm, like, feeling a little bit of concern about, like, even one point to two point because it's, like, it's not called out. So I'm just I guess I'm feeling a little bit of anxiety that things are being changed without participation of the committee. So if that's the only change like that

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

[Sen. Rebecca “Becca” White (Vice Chair)]: That would make me

[Damian Leonard, Office of Legislative Counsel]: That is I tried to call out everything with highlighting. I was rushed this morning to get you draft 3.2 to correct that error, and I forgot to highlight that.

[Sen. Rebecca “Becca” White (Vice Chair)]: That's okay. Yeah. I thought for some reason we were getting it yesterday, so I just carved out some time.

[Damian Leonard, Office of Legislative Counsel]: I did send a draft late yesterday

[Sen. Rebecca “Becca” White (Vice Chair)]: Oh.

[Damian Leonard, Office of Legislative Counsel]: To everyone.

[Sen. Richard Westman (Chair)]: Oh, I don't because I don't know which whether it was in or out.

[Damian Leonard, Office of Legislative Counsel]: It was out of that draft except for this one line 10, which Patrick caught this morning. So I sent a corrected draft. The draft was sent to the committee yesterday at 04:42PM. I apologize for not getting

[Sen. Rebecca “Becca” White (Vice Chair)]: it Oh, I didn't even

[Damian Leonard, Office of Legislative Counsel]: out sooner. I finished it as quickly as I could and got it to the editors, and they finished it as quickly as they could.

[Sen. Rebecca “Becca” White (Vice Chair)]: Oh, I didn't even see it. So thank you. I had thought that so that's really helpful. Okay. Oh, this is not that draft. This is an updated draft.

[Damian Leonard, Office of Legislative Counsel]: This is an updated draft. When I got in this morning, I had a note from Patrick that said you you missed an instance of the flat fee. And on that page and I quickly deleted it, moved the or to the other clause. I highlighted the or, but I forgot to highlight the period there to show where I made a change. I apologize for that. That's my oversight rushing this morning. If at any time you're concerned about the language, I'm happy to do a side by side comparison or a compare document showing every change that I've made from draft to draft.

[Sen. Rebecca “Becca” White (Vice Chair)]: No. I mean, no. I appreciate that. I think I just am not comfortable with getting rid of the flat fee at this point. So I I I would prefer

[Sen. Richard Westman (Chair)]: We're gonna hear from Patrick. He's gonna talk about it.

[Damian Leonard, Office of Legislative Counsel]: Yeah. And I like I said, it is the committee's decision. So if if the committee wants to put it back in

[Sen. Richard Westman (Chair)]: I did say Yes. To Damien that we should put and have them in the future After this first step, they should present a flat fee to us for the whole piece, but Patrick will speak to what his their recommendation, and I think it's UVM people made a recommendation, so but he can address all of that. Okay.

[Sen. Rebecca “Becca” White (Vice Chair)]: Based on that alone, I'm not

[Sen. Wendy Harrison (Clerk)]: going explain it until it

[Sen. Richard Westman (Chair)]: goes back in, guess. So

[Sen. Rebecca “Becca” White (Vice Chair)]: I'm wondering what the process is for you. Are we voting to put this into the T Bill? Like what's the timeline

[Sen. Richard Westman (Chair)]: We're on going keep going through this and when we get through that specific piece and if there are other specific pieces that have been recommended by the agency have changed, That's the only thing that I really talked to Damien about yesterday that I had heard from them. But they worked through the whole draft. When we get through the whole draft, we're gonna put Patrick in the chair to discuss anything else that is changes for that. Okay.

[Sen. Rebecca “Becca” White (Vice Chair)]: Are you willing to hear from the EB folks on this language before we make a decision? Because I know there's been a couple of letters sent to us. So are we planning to take any testimony from outside state I

[Sen. Richard Westman (Chair)]: think that will be up to the whole committee and and we'll see where we are. Okay. Let's get through the draft, then we'll get Patrick in the chair, and then we'll make a decision about where we need to go from there. Okay. So

[Damian Leonard, Office of Legislative Counsel]: the next the next large number of changes are just swapping BEV for covered vehicle until we get down to section forty three zero six, which is found on page 12. That will be Well, Yep. Should be aligned 15 or 16 of page 12. So the first update is in the section name because it includes failure to obtain an inspection. This language, because the flat fee previously, it was the flat fee of $225 if you didn't get your inspection. This goes back to the ninety eighth percentile construct because we those are the two alternatives we've considered here. And without the flat fee, this is the alternative we have. Although, again, it's up to the committee. If you went back to the flat fee, you have the choice of either doing the flat fee or ninety eighth percentile here. You can always set this at a flat rate as well instead of the ninety eighth percentile. And this is essentially if the commissioner can't determine how far you've traveled because you haven't gotten your car inspected or filed a report, this would be what's charged to the individual. Right now, it's estimated to be $375 So again, that's why this language reverted to this point because I don't have another option that the committee's considered at this point. So I'll to

[Sen. Richard Westman (Chair)]: you a clue if you have to speak to this.

[Sen. Rebecca “Becca” White (Vice Chair)]: Can I just speak about these sections? I'm not comfortable with suspension for refusal registration at this point. I mean, we don't allow someone's home to go up for tax sale if there's less than a thousand dollars owed to property taxes. This is potentially like at most $375 if I'm understanding correctly, worth of lost tax revenue and we are potentially taking someone's vehicle. That is a huge problem for me. That is not acceptable. That is potentially someone's literal home, their access to their job, their access to everything in their life. So I don't think I'm and I mentioned this every time we've talked about this draft, not being comfortable with it, and there haven't been changes to soften it. There haven't been changes to address my concerns. So I'm just not comfortable at this point with this language. Like, is if I'm understanding correctly, my car could be taken from me if I okay. Then explain it to me.

[Damian Leonard, Office of Legislative Counsel]: You're you would not be able to register your car. So then There's nothing in here that contemplates civil forfeiture or seizure of a car.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yes. But is it legal for me to drive an unregistered vehicle? Yes. Yeah. Exactly. Like, so that's what you're doing. Like, that's what you're doing. You might not be physically taking someone's car, but you're setting them up to be pulled over. You're setting them up to not be able to drive that car for work. Like, it yeah. I just I'm at this point, like, with can we take those sections out?

[Sen. Richard Westman (Chair)]: Think we're

[Sen. Rebecca “Becca” White (Vice Chair)]: going go through the

[Sen. Richard Westman (Chair)]: draft. I think this is their recommendation and we'll listen to what Patrick has, and then as a committee, we can make

[Sen. Andrew Perchlik (Member)]: a decision. Is there any difference now with inspections? I see the inspection part. That makes two With the inspection,

[Damian Leonard, Office of Legislative Counsel]: if you fail to get an inspection, you can get a traffic ticket for that. If you fail to pay your registration fee Can you get it registered if

[Sen. Andrew Perchlik (Member)]: you don't have inspection? Yes. But you can get it inspected if you don't have

[Damian Leonard, Office of Legislative Counsel]: They don't check to see if it's been inspected when you go register your vehicle.

[Sen. Wendy Harrison (Clerk)]: I thought they did.

[Sen. Andrew Perchlik (Member)]: But the other way around, if you check your registration when you get inspected, that's what they don't Yes.

[Sen. Wendy Harrison (Clerk)]: Okay.

[Damian Leonard, Office of Legislative Counsel]: Yeah. You can't get it inspected without a valid registration. But you can't register your car without having the inspection done because people's inspections and registration don't necessarily line up under the current system. The if you fail to pay your registration fees or you bounce a check or your charge doesn't go through and you don't make good on that, they can suspend your registration or refuse to renew it. And that's current law. For failing to get it inspected, you would get a ticket. The ticket amount is quite low before you get to judicial bureau fees, but judicial bureau fees bring it up over a $100. So But this

[Sen. Andrew Perchlik (Member)]: would change it then that if don't get it inspected,

[Damian Leonard, Office of Legislative Counsel]: you could register it, basically. Yes. If you don't get it inspected and you don't pay the fee that comes with that, whatever that rate is, This would provide that the commissioner would, with two weeks notice and the right to a hearing to contest it, suspend your registration or refuse to renew it. So that that is provided in here. Again, this is a policy choice for you. This is not, you know, I'll let the agency speak to the language.

[Sen. Richard Westman (Chair)]: Yeah. This is this is their proposal, so we'll let the agency get in the chair. And I will say to you, Patrick, it would be helpful for us to what were the what were the things considered when you recommended it. Sure.

[Damian Leonard, Office of Legislative Counsel]: K. K. The mass changes occur in the transition section, which is found on page 16. K. So covered vehicles that have a valid Vermont registration on 12/31/2026. So that's changed from that are registered in Vermont. And I think the question that came up last time, if I remember right, was what about vehicles who have an expired registration, but their last registration was in Vermont? And this could include a vehicle that's been taken off the road or vehicles that have moved to another state where the individual hasn't registered in that state. And so the request was to or to specifically focus on valid Vermont currently registered vehicles. During calendar years of 2027 and 2028, this is on line 19, owners and lessees, the proposal from the agency here is that they would pay an additional road usage charge of $89 per year per year of registration when registering or renewing registration of a covered vehicle. So in other words, if you register for one year, it's $89. If you register for two, just like now under the, infrastructure fees, that would be a $178.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: The

[Damian Leonard, Office of Legislative Counsel]: road usage charges paid would be applied as a credit to reduce the amount of the mileage based user fee following the conclusion of the first mileage reporting period. Any remaining amounts would be carried forward and applied as a credit to reduce the amount of future mileage based user fees due in relation to the vehicle. So if you had a two year registration, $178, and then you drove the average 11,000 miles. So your mileage based user fee was only a $154. The remaining $24 would be applied to your next mileage based user fee. So you get a $0 bill at the end of your first mileage reporting period, and then the next year, you'd have 24 credit to reduce your next mileage based user fee.

[Sen. Richard Westman (Chair)]: And

[Damian Leonard, Office of Legislative Counsel]: then covered vehicle has the same definition as in the statute. Questions on that?

[Sen. Rebecca “Becca” White (Vice Chair)]: This is confusing already.

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

[Sen. Rebecca “Becca” White (Vice Chair)]: Just like the idea of doing a true up process for your taxes, essentially. Are there other places that that happens?

[Damian Leonard, Office of Legislative Counsel]: Estimated taxes for income tax.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah. Okay. And so that's a good one. Yeah.

[Sen. Wendy Harrison (Clerk)]: And this is only for two

[Sen. Richard Westman (Chair)]: years, right?

[Damian Leonard, Office of Legislative Counsel]: It's just for '27 and '28. So I'll let the agency speak to why they're asking for this model. My understanding is it relates to ensuring that there's income coming into the transportation fund.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah. I just don't see why not wait. You know? Like, it seems like we're rushing it already. If we're having come up with this very complex process to, like, true up past bills, like, why not just wait until we start fresh with a new thing so that people have time to know not to register for two years, for example, versus one year? Like, if that's a decision that I'm, like for me, I've already paid a two year registration. So it feels a little bit wonky to have to go through this whole administratively complex process rather wait to do EMBA for BEV, for example, until we can inform people when it's happening and they can make an informed registration decision. But that's just my perspective.

[Sen. Richard Westman (Chair)]: I think Patrick will be in the chair and Patrick is going to have to step us through this and walk us through it why they recommend.

[Damian Leonard, Office of Legislative Counsel]: The next section is the Outreach and Education and User Experience language that the committee requested, and so this would require the agency of transportation to develop and implement public outreach education and communication strategy regarding the MVAB, build public awareness and understanding, and to solicit public feedback regarding the program. The strategy would be required to include written materials, web based materials, mailings, local media outreach that describes the purpose of the fee, the transportation funding challenges that the fee is intended to help address, and how the fee will be implemented with respect battery electric vehicles and later on other light duty vehicles. It needs to include informational materials mailed directly to owners and lessees of electric vehicles that are currently registered in Vermont that outline the goals of the program, set forth the timeline for implementation, and provide information regarding compliance, including options that will be available to each owner and lessee, and provide information on how to obtain additional information, including how to obtain informational resources provided by the agency, the availability of user support resources, and how to determine how the fee may apply to the user's specific circumstances. Further requires prior to initial implementation, in January 2027, agency engagement with owners and lessees of various types of light duty motor vehicles registered in Vermont to obtain feedback on the design of the user experience with particular attention to universal accessibility and specific needs for translated materials and services. Requires survey and focus group work following implementation with owners and lessees whose vehicles are subject to the fee to aid in evaluating the implementation of the initial phase of the fee and in developing recommended programmatic and statutory changes, and requires ongoing engagement and collaboration with relevant stakeholders, including the Vehicle and Automotive Distributors Association and Drive Electric Vermont to obtain feedback on the fee program and to educate members of the public about mileage based user fee and program design. And it's worth noting that including does not limit it to those two groups. Finally, it requires the agency on or before this coming September 15 to submit to the Joint Transportation Oversight Committee a report summarizing the public education outreach and communication strategy required under this section. So you would have an initial report coming to JTAG, which would be publicly available this coming September, and then the program would have the components that were outlined above. Are there questions?

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

[Sen. Andrew Perchlik (Member)]: Yeah, think this is report. It's summarizing outreach, education, and communication strategy in a, I guess that calling it communication strategies, including like, the survey and focus group following implementation even with that that board under a little a. So

[Damian Leonard, Office of Legislative Counsel]: I I called it a public education outreach education and communication strategy. NA and then required the strategy to include the survey and focus groups and ongoing. So do you think

[Sen. Andrew Perchlik (Member)]: that everything you need isn't fired in the report? I guess that was my question. Or is it clear that it's not? Yeah.

[Damian Leonard, Office of Legislative Counsel]: I I think so.

[Sen. Andrew Perchlik (Member)]: Yeah. That one that is included or is not?

[Damian Leonard, Office of Legislative Counsel]: Yes. I I think it's all included in there. Okay. It specifically says the strategy shall include the following. So when you reference that strategy, you're referencing everything that's included in the strategy.

[Sen. Andrew Perchlik (Member)]: And so by September, they'd

[Damian Leonard, Office of Legislative Counsel]: be able to do all this and report. I guess that's a question for Patrick.

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

[Sen. Andrew Perchlik (Member)]: that's a question for Patrick. And then also at the beginning on slide 15 on page 17. Written materials, does that mean printed materials? Like the web based material, mailings, or book

[Damian Leonard, Office of Legislative Counsel]: Printed materials might be a better word for it. I'm happy to change that. So I was trying to think of how to phrase that, and that's what I came up with, but this might be Okay. Probably a better better way to phrase it. So I will make that change for the next round. Drew, you repeat anything? Were there other questions?

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah, just had a thank you for putting it in outreach language because I know we talked extensively about that. I just want to

[Sen. Wendy Harrison (Clerk)]: say thank you. Thank you. This is a very tight schedule. You can talk about that Patrick, but I think, on page 18, line 18 online, is the 3.1 is the survey and focus group work should also be before and following the implementation because, we need to hear from people before we send things out.

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

[Sen. Wendy Harrison (Clerk)]: And I guess another question I have is, which you probably won't know is when the outreach would start.

[Damian Leonard, Office of Legislative Counsel]: Yeah, this does not specifically say it says prior to implementation, agency engagement to obtain feedback And then but it does not for one and two, so that could be clarified, say, prior to implementation, particularly with two, which is the informational materials.

[Sen. Wendy Harrison (Clerk)]: Right. And then DMV is obviously a partner, but they're part of the agency.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Yes. So

[Sen. Wendy Harrison (Clerk)]: Okay, thanks.

[Damian Leonard, Office of Legislative Counsel]: And I can say the agency and consultation are agency and the DMV, if that works better. It helps structure it, that's good. Yeah, well, you should, in this outline, it's the timetable that this passed and it happened and

[Sen. Richard Westman (Chair)]: when you envision everything so people have an idea.

[Sen. Rebecca “Becca” White (Vice Chair)]: How much of the surf brand you can use for this?

[Damian Leonard, Office of Legislative Counsel]: I don't know. I'll top my head to Patrick. Okay.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah, like how much are we talking about is going to go towards this? Because you get a total of 3,000,000. Maybe we can even is it alright for us to specifically put in the draft language an amount? Because I just no. They're shaking their head. No. You cannot. Can we?

[Damian Leonard, Office of Legislative Counsel]: I don't know.

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

[Sen. Wendy Harrison (Clerk)]: We could. I I can I

[Sen. Rebecca “Becca” White (Vice Chair)]: respond to that, she? Well, I was just gonna ask, like, can we put it?

[Damian Leonard, Office of Legislative Counsel]: I don't know the limitations on the search grant and whether there are limitations on how that can be said.

[Sen. Richard Westman (Chair)]: I thought they said they had earmarked around 800,000 for this, but I might be wrong.

[Sen. Wendy Harrison (Clerk)]: I'd rather focus on what we want them to do because even if rather than telling them how much we need to use. I mean to me that's a secondary thing. Also I'm going to ask Patrick if we could send things out to the towns. For example, like a good way to get word out is to send things to the town meetings and this is a very big deal.

[Sen. Richard Westman (Chair)]: Right now I've got three big areas that he needs to talk about Okay. And start in this. He's next in chair. Yep. So

[Damian Leonard, Office of Legislative Counsel]: I'm getting close. We're almost done with all. We're, like, 4,000 words into our 5,100 word section of language. Page 20, middle of the page, sub subdivision b. In the prior draft, I had a SIP system of differential rates based on fuel economy. The agency in working with Patrick indicated that, it would be easier to do that as, fuel tax credits that go into the bill where they figure based on your mileage driven and your approximate fuel economy based on your EPA rating, you get a credit for a certain amount worth of mileage driven, and then rather than having it show more complicated calculations on the bill. So but it the net here is that the same thing that happens for someone who has a vehicle that burns, fuel as well as, the a hybrid. Yeah. I'm struggling this morning. For someone who has a hybrid, you'll get a credit against the gas tax that you purchase so that you don't end up worse off. Same thing with a regular fuel efficient internal combustion engine. Basically instruct you to do a slight cascade

[Sen. Wendy Harrison (Clerk)]: of water. Exactly.

[Damian Leonard, Office of Legislative Counsel]: The committee last night asked for tracking of costs, and so beginning at the bottom of page 21, subsection requires the agency and department to track implementation costs, operating expenses, and revenues generated by the fee for fiscal years 2027 through 2031. The requires an annual report of those amounts to this committee, finance, and your house counterparts on or before each December 31 beginning on 12/31/2027, which would be so that they have to within six months after the finish of the fiscal year report on the operating expenses and revenues from the fiscal year, which will allow time for billing and other things to happen. The next changes are renumbering and then in subdivision B, they're supposed to provide by 01/31/2027, an initial plan and recommendations for legislative action. And this again gets back to the flat fee. This would be adding a requirement that they include a recommendation for an option to pay an annual flat fee in lieu of driving vehicle miles traveled. Again, this is only necessary if you don't do a flat fee initially.

[Sen. Rebecca “Becca” White (Vice Chair)]: And we could also potentially change to say an adjusted fee for the future, set one now, but then they have the opportunity to adjust it later, that would be a direction.

[Damian Leonard, Office of Legislative Counsel]: Yeah. And that's something they can request at any time.

[Sen. Wendy Harrison (Clerk)]: Yeah. And it would be based on their, particular experience. AMTs. No, the individuals. No. No, the flat fee

[Sen. Rebecca “Becca” White (Vice Chair)]: should be saying, the flat fee would be set by AOT. Right, okay, I guess what

[Sen. Wendy Harrison (Clerk)]: I was thinking is if you knew what a person had used over the previous year, you could better establish a flat fee for that person. But we're talking about one flat fee for everybody, I guess, we'll talk.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah, that was just the fourth option.

[Damian Leonard, Office of Legislative Counsel]: That was the prior in the last version we looked at, there was a flat fee for everyone option, which is like a a default that you could pay in lieu of tracking, which I Yeah. So that was set at $2.25, which was approximately just under a 150% of the estimated average, and that was a placeholder amount there. So, again, I'll I'll let them speak to the They're gonna

[Sen. Richard Westman (Chair)]: have to run through all of that. I hear what you're saying in Like, an e cost we're looking for is a fee in the future. You know? What you're basically talking about reminds me of what I do with my income tax. I pay quarterlies based upon the year workforce estimate. Exactly. You know, I'm just gonna let them speak to what they wanna do or what they're envisioning.

[Damian Leonard, Office of Legislative Counsel]: Yeah. And we will either like it or won't. So So the on line one of page 23, I'm not sure if that

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

[Damian Leonard, Office of Legislative Counsel]: Yep. Oh, actually, it's it's line 19 for those of you looking at draft 3.1 of page 22. It's a last time it said she'll submit a copy of the plan. They asked that it be a draft copy since the plan is in due till that fall, and they are not likely to have it finalized. So they'd like to submit a draft, and, we'll allow the legislature to provide feedback on the final. The other change was to update the date from

[Sen. Andrew Perchlik (Member)]: I

[Damian Leonard, Office of Legislative Counsel]: believe it was 09/30/2028 to September 15, and that's on the top of page 23 for those of you looking at draft 3.1 Okay. And line four for those of you looking at draft 3.2. Okay. That's great. Going into the next sections, this is where I made the update. So the first is the expansion of highly fuel efficient vehicles. The big change that you'll see here is that in lieu of replacing battery electric vehicle with highly fuel efficient vehicle, we've just changed the definition of covered vehicle to be what we had defined the highly fuel efficient vehicle as before. Still adding a definition of hybrid electric and definition of plug in electric vehicle, which were both in the last draft.

[Sen. Andrew Perchlik (Member)]: You're saying that highly fuel efficient vehicle is designed somewhere else?

[Damian Leonard, Office of Legislative Counsel]: Yep. It the covered vehicle definition is what we the previous draft had called highly fuel efficient vehicle. We got different versions. And then by going with covered vehicle, it saves us from having to revise every section Yeah. In the chapter. We can just update that definition. Do you know why we chose 25 miles per gallon? 25 miles per gallon is what Virginia Yes. Headset. There's that. I believe the average fuel economy is 22 or 23, Patrick. So you just Not a

[Sen. Andrew Perchlik (Member)]: good thing. Me, it is slightly above the average, and that must be highly.

[Damian Leonard, Office of Legislative Counsel]: What's Oh. Your bad max? So you'll notice we don't call it highly fuel efficient anymore. So previously

[Sen. Andrew Perchlik (Member)]: It says covered

[Damian Leonard, Office of Legislative Counsel]: vehicle means a electric car with an estimated fuel economy of at least 25 miles per gallon. I'm on page 23 e one. Line one.

[Sen. Andrew Perchlik (Member)]: What's that? He's looking at the definite Where are they? Page 0.3.

[Damian Leonard, Office of Legislative Counsel]: Okay.

[Sen. Richard Westman (Chair)]: Yep. And it says 20 minus 25.

[Damian Leonard, Office of Legislative Counsel]: I can just change that to fuel efficient vehicle or to efficient vehicle, it's differentiating it from other light duty vehicles. So it's above average fuel efficiency.

[Sen. Andrew Perchlik (Member)]: Yeah, you can say

[Sen. Richard Westman (Chair)]: above average. The the gas, because Patrick's

[Sen. Wendy Harrison (Clerk)]: can you leave this definition for something else?

[Damian Leonard, Office of Legislative Counsel]: I do use that in the report. Mhmm. So I can change that, though, to just fuel efficient vehicle. Would you prefer that or to just well, it includes also plug in electric vehicles and hybrid electric vehicles. So what what would you love?

[Sen. Andrew Perchlik (Member)]: Well, average. I don't I I I would guess. No.

[Sen. Richard Westman (Chair)]: That okay.

[Damian Leonard, Office of Legislative Counsel]: How about I just

[Sen. Wendy Harrison (Clerk)]: take efficient. You take highly off.

[Sen. Richard Westman (Chair)]: But why don't we Yeah. Yeah. Why don't we let them comment on this too, and then we'll make a decision. I thought we originally instead of 25, it was 23, but I you know

[Damian Leonard, Office of Legislative Counsel]: I think we've discussed 23 as the average in the state, but the proposal in every draft has been at least 25. And if I apologize if that was a mistake on my part.

[Sen. Richard Westman (Chair)]: That's that's fine. We'll So

[Sen. Andrew Perchlik (Member)]: so you would change it on some page twenties?

[Damian Leonard, Office of Legislative Counsel]: Yes. I'll I'll search the other ones out and make the changes.

[Sen. Andrew Perchlik (Member)]: So

[Sen. Wendy Harrison (Clerk)]: question on that. So, is the EPA the agency that provides it this, estimate when you buy a car?

[Damian Leonard, Office of Legislative Counsel]: Yeah. It's the EPA rating.

[Sen. Richard Westman (Chair)]: Okay. So I'm gonna Window when you buy it.

[Sen. Wendy Harrison (Clerk)]: Right. So I just wanna make sure that was that. But then if, you know, cars get better through time, but this would be when the car is purchased or or new. It would have that that number.

[Sen. Andrew Perchlik (Member)]: And the average will change, so that's another problem with drawing it. Highly or even average, because the average could go up and you can have more than four.

[Damian Leonard, Office of Legislative Counsel]: It's worth knowing that this is not going into statute. This is a three year study requirement, and the language only applies internal to that study and does not apply to any other provision of law or ongoing statute in Vermont. So they're not defining what a highly fuel efficient vehicle is going forward. It's just for purposes of carrying out these studies and reports to the legislature. But I will change it to

[Sen. Andrew Perchlik (Member)]: Or just fuel efficient. Just

[Damian Leonard, Office of Legislative Counsel]: fuel efficient?

[Sen. Richard Westman (Chair)]: Yeah. Moderate pain better. Okay. Sounds good.

[Damian Leonard, Office of Legislative Counsel]: Changes in the the next set of changes, down on page 25, expansion to all light duty vehicles. The expansion to light duty vehicles means that this would also cover trucks with a gross vehicle weight rating of not more than 10,000 pounds and irregardless of fuel economy. So covered vehicle would mean a motor vehicle with a gross vehicle weight rating of not more than 10,000 pounds, and motor vehicle does include any vehicle that has onboard motive tran motive power, so whether that's an EV or a fuel cell or anything else.

[Sen. Andrew Perchlik (Member)]: The other option is to change between 25% to a higher number, like an inside.

[Damian Leonard, Office of Legislative Counsel]: That is a policy choice for you as to what kind of vehicles you wanna cover. If you wanna cover a higher fuel efficiency, then I'll make that change. But that came from where did

[Sen. Andrew Perchlik (Member)]: you say? Virginia?

[Damian Leonard, Office of Legislative Counsel]: So this was the proposal to that I believe I'm actually not sure who came up with 25 miles per gallon, but that's what Virginia uses for their prorated amounts.

[Sen. Richard Westman (Chair)]: Think we had testimony that said the 1.4¢ relates more to 23, but we've got Patrick here. We're gonna put Patrick in the chat, and the UVM people are feeding in the wings to speak to so we can you know, because he worked with them to film off the.

[Damian Leonard, Office of Legislative Counsel]: Yep. So that is it for the changes from the last draft to this draft. I just wanna flag again that there is a decision point on page 26 that would be the including an inflation adjustment after all light duty vehicles are added, and there's a question of whether one, whether you want an inflation adjustment baked in from 2031 forward, and two, whether you want to cap the max inflation. That language is bracketed.

[Sen. Wendy Harrison (Clerk)]: I see. Okay.

[Damian Leonard, Office of Legislative Counsel]: In there, you could cap it at a certain percentage, which is left blank until you make a decision on that.

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay, so if we're at that point with this language, I'd love to hear what the possible percentages are, like what's a good percentage to choose from. And then I also would like to update the language to make sure that this inflator doesn't go into effect in 2032. If it's not if I want the vehicles all to be there. So if 2032 comes and, oh, we don't actually have what happened supposedly in 2031 with FOB added, it wouldn't just go into effect for the vehicles that are participating.

[Damian Leonard, Office of Legislative Counsel]: So,

[Sen. Rebecca “Becca” White (Vice Chair)]: so I think you could just add 2032 or when all vehicles are subject when all covered vehicles are subject.

[Damian Leonard, Office of Legislative Counsel]: Yeah. So make that a contingent effective date.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah. That's kinda what I would like to say.

[Sen. Wendy Harrison (Clerk)]: Because I think that's the

[Sen. Richard Westman (Chair)]: point of it. Yeah. Was the intention. Yeah.

[Sen. Rebecca “Becca” White (Vice Chair)]: I think, yeah.

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

[Sen. Wendy Harrison (Clerk)]: And then I don't know what the percentage would be.

[Sen. Richard Westman (Chair)]: I think that would be more of a question for the Okay. Okay, Patrick, I think you heard most of the questions, Dan. The avianity is waiting, and I think they're listening. You're welcome to let them in. Probably not. Let's do it. That's up to Patrick.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Yeah, it's Yeah, you could go with them then.

[Sen. Richard Westman (Chair)]: Right, he wants help. He wants

[Sen. Rebecca “Becca” White (Vice Chair)]: There's no bus behind you this time. I

[Sen. Richard Westman (Chair)]: just want you to know, I don't I'm glad I'm facing towards you and not moving out.

[Sen. Andrew Perchlik (Member)]: It's beautiful.

[Sen. Rebecca “Becca” White (Vice Chair)]: It's really great. It is more snow. It's a blowback.

[Sen. Richard Westman (Chair)]: Yeah. I've had enough snow.

[Sen. Wendy Harrison (Clerk)]: I know. It's April. Past Easter.

[Sen. Richard Westman (Chair)]: I've had enough snow. Alright. We're I think, which one of the questions do you want to

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: start with, Patrick? Okay. For the record, Patrick Murphy. State Policy Director with the Agency of Transportation. I'll just start by thanking Damien for the work that he's done with us to get the language to the point it is right now, which I think is, you know, very reflective of what the agency had intended to propose, but also the discussion that has happened here in the committee over the past week or so. Our intent was really to make the payment options for users be as simple as possible. So the language that we have in here right now with the transition essentially because the system will not have historical data on odometer readings and because people are in different parts of their inspection and registration cycles that don't always necessarily align. It's not gonna be simplest to have people continue to pay an $89 flat fee until such time as you have a completed mileage reporting period within the system starting from January 2027. And so you don't get these a lot of these edge cases that can come about because of someone being in a vastly different place in their registration cycle, but then having completed an inspection period or the other way around, you've almost completed two inspection periods before you get to your registration because you're on a two year cycle. So people would experience it the same way they do now when they go to the registration renewal. If they don't have that data in yet, which is the start of an inspection and then the close of that upon reinspection, then they would just be paying an $89 fee. Once that has transitioned over to where you have a completed mileage reporting period, then that last $89 fee would just be applied to the first mileage reporting period. In effect, applying a credit to a fight has already been started. So there's no situation in which an owner of a battery electric vehicle is overpaying for for a particular time frame that might overlap between when they paid for a registration surcharge to the point that they began their revised reporting period. Any

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

[Sen. Rebecca “Becca” White (Vice Chair)]: Well, why not just wait? Why not just wait to not make it mandatory, make it voluntary first so then people who you know? Like, this is only happening because you're trying to start it soon. Think You would just tell people not to register for two years or you'd say, oh, register for two years, but don't register again, start the AMBA this next time.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Well, I think this is a more natural way for people to be on board in the system because you're gonna just continue to follow what you're expecting, which is your what where you are in your registration cycle and where you are in your inspection cycle.

[Sen. Wendy Harrison (Clerk)]: So why wouldn't you just

[Sen. Rebecca “Becca” White (Vice Chair)]: wait to have people who naturally just wait to start MBUF until you're done with that registration?

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Well, in the meantime, then people are still paying into the system to be able to support our infrastructure.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah, why would you just keep the infrastructure fee? Like, I think I'm just trying to think of like, as a driver, this is confusing to me.

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

[Sen. Rebecca “Becca” White (Vice Chair)]: why not just wait until you have groups of people who have completed their registration and then they start the MBUF program? Hawaii had it as a voluntary program for like four years and we're giving people about six months, is my understanding, before it's mandatory and a confusing credit Passover thing that

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: So this is modeled exactly on Hawaii's system.

[Sen. Rebecca “Becca” White (Vice Chair)]: They had a voluntary system for four years, so I don't think that's accurate. They started at what? I wrote it down. Started their program in 2025 and it's not mandatory until 2028. So that is not the same.

[Damian Leonard, Office of Legislative Counsel]: Three years.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: But the way they're doing it is exactly the same. So, what they have is a- can either pay $50 or you pay the Mindspace music fee. What we're saying is you're continuing to pay an $89 fee just like you would expect, just as other people have paid in starting in January 2025. And then you're not losing that. That's being credited to your first mileage reporting period. So you're experiencing it the same. When you get to registration renewal in sometime in 2027, you're going to be paying $89 fee because there won't have been the opportunity to close that first MIDAS reporting period. So no one within the calendar year of 2027 will be paying what is a reconciled mileage based user fee. Everybody's paying an $89 fee just like they're doing right now in 2026. When you get to 2028 is when you start to have mileage reporting periods close, and then that fee that has already been paid is credited to what's going to be owed for the full mileage reporting period.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah, I still think it doesn't make sense to make it mandatory when Hawaii, like you're saying you're basing it off Hawaii, they're still not mandatory. We're rushing a program with a really confusing startup. So I just don't see the benefit of this other than it sounds like the agency maintaining consistent revenue is the main benefit. So to the consumer, I'm

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: That's just the long term idea. The short term idea is to make it as convenient as possible to your users. Whenever you started, you're gonna have

[Sen. Andrew Perchlik (Member)]: the same same problem. If we started in '28, that's probably would be the same whether we started in '26. Because you're gonna have one year where you paid $89 then you have to wait.

[Sen. Richard Westman (Chair)]: Oh, right. Right now refund it or not refund it.

[Sen. Wendy Harrison (Clerk)]: Well, why not

[Sen. Richard Westman (Chair)]: Right now, you might have somebody that pays In their receipt. Right now, or July 1, somebody pays pays for a two year fee, they're going have a credit.

[Sen. Wendy Harrison (Clerk)]: Now, okay. We need scenarios. You know, probably scenarios of this, but just a little, you know, like

[Sen. Richard Westman (Chair)]: a snapshot.

[Sen. Wendy Harrison (Clerk)]: Yeah, of a certain person doing this and showing what would happen in the different years and then a different kind of driver or different vehicle type, you know, when that would start? I mean, we just need some scenarios.

[Sen. Richard Westman (Chair)]: But I was right now, this very mid April, if you pay two years, you're going into this with a credit.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah, but couldn't we just wait until that two years is up and have the person start the program that year?

[Damian Leonard, Office of Legislative Counsel]: Yeah, the same problem then.

[Sen. Rebecca “Becca” White (Vice Chair)]: But why? Because then you don't need to have paid $159 or $89 You start and then you register. You know, like why would you

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Everyone is in a different place with their registration. Yes. Everyone's in a different place with their inspection. And so this is all coming to happen gradually. But to the user, you're still gonna the predominant readings are taken in the background. As long as you're getting your vehicle inspected, there's nothing additional that you need to do. You're that is just now being reported from the ABIC system, the vehicle safety inspection system,

[Sen. Richard Westman (Chair)]: to the registration. You have that issue of the first the first inspection is the first time you report the mileage. It's the first time

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: that you get a data point within the system, and so you need a second data point to close that mileage reporting period. And so until you have everybody into the system with that full amount of data where you can actually assign a fee, We're just saying, let's keep it simple and have them continue to pay an $89 fee. And then once there's any sort of overlap, that $89 fee is applied to the first MIDAS reporting period.

[Sen. Rebecca “Becca” White (Vice Chair)]: How will you be able to inform people of this in that six month period?

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Well, so that's a good question.

[Sen. Rebecca “Becca” White (Vice Chair)]: Because I'm fine. It's confusing, but it sounds like that's the way you wanna know and there's not an argument and I don't have consensus I

[Sen. Richard Westman (Chair)]: think the scenario idea is to good up a good one so we can

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Yeah, and you can

[Sen. Richard Westman (Chair)]: I'm just trying to figure out how I'm supposed to get the starting point and that seems to me is your first inspection after this goes into place and I can't charge you for miles until I have a starting point. So, yeah, I think the scenario would be good.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Yeah. Yeah, and UVM folks have talked with me about, like, putting together They're good.

[Sen. Richard Westman (Chair)]: They're behind you

[Sen. Wendy Harrison (Clerk)]: on Yeah, the

[Sen. Richard Westman (Chair)]: and they're thinking about it right now. If they like to weigh in, raise your hand. If he

[Sen. Andrew Perchlik (Member)]: so I think of some kind of like date chart that shows it's WAN inspection one registration and I think of some kind of data visualization would

[Damian Leonard, Office of Legislative Counsel]: be pretty helpful because it seems confusing, but I think I've made my attempts here.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Yeah. So that's why they'll they'll be supported.

[Sen. Wendy Harrison (Clerk)]: Yeah. Like a flowchart. Like a flowchart.

[Sen. Andrew Perchlik (Member)]: Yeah. Like a flowchart.

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

[Sen. Richard Westman (Chair)]: Or any flowchart. Do you see clamshells? What? Clamshells. You have your hand up? Have

[Claire Nelson, UVM Transportation Research Center]: Hi, so Claire Nelson at the UBM Transportation Research Center for the record. Patrick had asked us about a week ago to put together some infographics with the exact scenarios that you're talking about. So these are gonna look like timelines with points on them for registrations and inspections that cover different scenarios based on when people get registered, if there's a one or two year registration, when they get inspected, and then what they're expected to pay at different times for these different scenarios. So we should have those together for you within the next week. We just want to make sure we're confirming with the agency that they're as accurate as possible, so we're not giving you any

[Sen. Richard Westman (Chair)]: I would say we need it as quickly as possible. Okay. We have to have this bill out of committee by the seventeenth. So the Wednesday before Okay. We really need to be done. So I'm if you, by the end of this week would be, important move it along. Thank you.

[Claire Nelson, UVM Transportation Research Center]: Yeah, absolutely. We'll work with Patrick this week to put those together for you.

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

[Gregory “Greg” Rowangould, Director, UVM Transportation Research Center]: And I think, I mean, I yeah. Well, you know, we we've been trying to, yeah, create these Instagram, but, know, it's obviously everything's a moving target. So we'll now that we've heard all this, I think we can get you what you need. I think also just to maybe help, maybe it's helpful to try to just restate a little bit of what Patrick said, but I think the issue here, and it's been sort of mentioned, like no matter when we decide to implement this mileage fee program, we have this startup issue. And the issue is we've been collecting DMV records and mileage data for research for AOT and CCRPC for a number of years now. It takes, right, we need two subsequent inspections to be able to estimate how much someone drove over some period of time, right? We need an inspection to get initial odometer reading And then after some period of time, nominally a year, we get another inspection reading. And then with those two, we can figure out how far someone drove. And the way that my understanding is with the IT infrastructure in place at DMV and that's being set up for all this accounting, That collection of that initial odometer reading is going to start on in 2027, January 1, like when this is set up. And so we'll get that first reading. Of course, it's going to slowly roll out as people get their cars inspected over time and then right we'll have to get the second one and so that just has to happen to be able to charge people the per mile fee. So how this and and so what I what sounds my understanding what the agency is proposing is we just keep paying the the flat fee that we have in place now. And when there is enough odometer reading, you know, when each individual has had two odometer readings, which will take about a year or so, then we'll know how much they actually drove and then you'll either pay a little more or you'll get a credit. And I don't know the ins and outs of what AOT is proposing, I assume that credit if you had one could just roll over to your next year. But this is basically, this is how like, right, we our income taxes that we all need to pay by, you know, next week. Quirk is where we're paying every every week out of our paychecks and estimated tax payment at the end of the year. We all chew up, We either get cut a check from IRS or we owe them. And that's exactly how this program works is you're prepaying, you're paying an estimated cost after the counting's done, then you're either going to get some money back or you're gonna pay up the difference. And I think to the way that I understand it's being set up is to the user, to the driver, all of this is like behind the scenes and you're not really doing anything different. You're getting inspections and you're registering your vehicle as you always have. And, you know, what you're gonna see when you go to pay is eventually going to reflect fee based on what you drove, but initially it's just going to be what people are doing. So I don't think there's a lot of complexity to Vermonters. I think, there's complexity behind the scenes with DMV and the systems they've been setting up, but I think they've been working on that. Anyways, that's, I don't know if that's helpful, but we'll create some graphics that show you the different types scenarios of how people may under overpay and how it all eventually settles into a system that

[Sen. Richard Westman (Chair)]: So we'll be looking for your graphics and we're gonna have to come back to this. The next big question in the front was the setting, a yearly fee, you don't wanna do that at least initially, so why don't you speak to that? And I think that young people will chime in with this too and tell us what your big key is on that. And then I'd like to put Damian up to have him throw out there some ideas on the purchase and use tax that So we

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: very quickly, the idea of a flat fee is sort of made redundant by way of proposed to transition vehicles because you've got a flat fee in effect for the first year at least of $89 I don't see there being any point to have this other flat fee that people wouldn't opt into if it's much higher than the $89 When you get further along, having a higher flat fee, it doesn't really provide all that much convenience because you're already having to take your vehicle in to get it inspected. You're already expected to re register your vehicle. As Professor Rohnbuch had mentioned, all this stuff is happening in the background, but you're only necessarily seeing it once to be able to have a fee that's generated and that's paid. So that's why we wanted multiple options, because some people would rather pay just at the end once they've driven all the miles and you have an exact number. There's no reason then to have some other flat fee that doesn't accurately account for what people's usage of the infrastructure is. Conversely, some others might want to be able to just pay upfront and forget about it until there is that reconciliation at

[Sen. Richard Westman (Chair)]: the

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: end of the year. But others, we've wanted to provide the option for those maybe of more limited financial means to be able to space those payments out in a way that more accurately reflects how people are paying the gas tax now. And for those, households who are saying, you'll be able to pay, based on an estimated amount and space those payments out on either a quarterly or or a monthly basis. That is an option. It's not what people need to do. So they feel confused or, you know, off put by that, then they can choose to pay at the end once all the miles are traveled. There's some question about this having a higher flat fee in place in the event that people aren't able to pay. In And the event that people don't have any dominant readings within the system. This is the means for compliance with the whole thing. When you have a gas vehicle, if you want to talk about parity between gas vehicles and electric vehicles, when you have a gas vehicle and you don't pay the gas tax, it's because you don't pay for gas at all, and so you aren't able to use your vehicle. There's no mechanism for that sort of instant compliance that exists for an electric vehicle. So we have to put something in place. And that's where there's a default higher flat fee so that people will be encouraged to be getting their car inspected so that there are, in fact, data points within the system that a fee can be applied to. But if there's an absence of data, there also exists that flat fee to be able to pay and still have the option of re registering their vehicle. So that's the logic that we saw in having a higher flat fee, 98 percentile being something that would cover most situations without getting into the very extreme sort of outliers at the higher end as being the fairest way to do things.

[Sen. Rebecca “Becca” White (Vice Chair)]: Are you moving up to another point?

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Sure. Go ahead.

[Sen. Rebecca “Becca” White (Vice Chair)]: Well, just wanna say I'm not arguing because I want this to not happen. I'm arguing because there are holes in the plot. And I think it's important if we're going to roll something out that we have a very clear understanding of it so we can explain it to our constituents and so that it works for people and they sign up. Because I think we're not, I think, especially with the idea of having someone's vehicle being unable to be registered because they can't pay at what, at most $89 or they can't figure out how to go on my DMV, go on a website and fill out a form, or they don't go into consistent inspection station every year. Maybe go to there's all these complications where there are Vermonters who are driving electric vehicles now, are going to fall through the cracks and potentially have the inability to register their car. And that's why these programs were voluntary for years in other states and are not even mandatory in states like Hawaii that have been practicing this for years. So I am extremely concerned that we have an enforcement mechanism in a bill like this. And I just want to ask, it's under the discretion of the commissioner. So what does that look like? What what when you think about if that's the logic behind it, like, how many vehicles would you say can't be registered to prove the point that you need to get the MBUF paid for? Like, what is a reasonable amount of vehicles? How often do you see the commissioner using this? Like, what is this going to look like? Are we going to see people with a leaf get their vehicle not being able to be registered because they couldn't figure out my DMV to pay for it? It's like, how what is the discretion that you think the commissioner will be using?

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: I guess I don't think about it in that way. There's a circumstance, there's no data because the vehicle hasn't been inspected. So there's a default flat fee option. You know For

[Sen. Rebecca “Becca” White (Vice Chair)]: the first year. And that's going away.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: That's in any any circumstance from year one, two, three, four. That if if people don't get their vehicle inspected, so therefore, is no data on which to face how much mileage somebody's driven in a given year. What else would you propose to be able

[Sen. Rebecca “Becca” White (Vice Chair)]: Sure. Calculate the I'm just saying, but why have an enforcement mechanism on top of that? Like, why not just say, for the first few years, if it doesn't happen, it doesn't happen. You don't get your car unregistered.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: I think that most people, I think a lot of people, not all, but a lot of people will interact with this through MyDMV.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yes, I hear a presentation So frequently

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: if they're interacting with the system through MyDMV and there is an unpaid balance or there is an absence of abdominal reading data to even be able to generate a fee, then the only way that person would be able to move forward in the registration process is by paying that flat fee. I don't see there being any other sort of mechanism for people to still have the option of registering their vehicle despite not having taken the other option of having their vehicle inspected in the way that it was required. It's the only way that somebody could continue to move forward and actually register their vehicle.

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay, so just more people will not have registered vehicles. That's I think the reality. We were so worried about people having their credit card denied, that they might not be able to register their vehicle. This is that problem in another area.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: So we have an $89 infrastructure fee in place right now.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yes.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: And I'm not sure that there's been any instance of somebody not being able to move forward with their registration because they didn't pay the, you know, they weren't able to pay the $89 fee.

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay, great. Well, that would be, if that's true, that's really good information. But a new system where someone now has to make sure they're getting inspected at a certain time, maybe go to a different inspection station for, they have to make choices.

[Sen. Richard Westman (Chair)]: They have to go to a place that's further away

[Sen. Rebecca “Becca” White (Vice Chair)]: to get in time.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: I just wanna clarify. There's no there's no new inspection requirement here. This is an existing inspection requirement. So somebody who's had an inspection in October 2026 will still need to get their vehicle inspected in October 2027 or thereabouts. There's no new requirement being imposed here.

[Sen. Andrew Perchlik (Member)]: What if they do get it before? What time is your, oh, my infection's coming up, but I'm already at my car at the shop, so I'm gonna get it inspected now. I would do that now. What would that happen? Would you say, like, well, there's three weeks out of the year that you we don't know how many miles of your roof, so you have to go get it inspected.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Which is no. I mean, you'd have a closed inspection period.

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

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: It would have this that many fewer miles, but you're you're gonna have that many more miles in the next inspection period. So

[Sen. Andrew Perchlik (Member)]: it's better if it's a little late or a

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: little late. So all of this is like, you're not getting trued up until the point of registration and in many cases you still might be behind,

[Sen. Richard Westman (Chair)]: Look at the trouble. Not

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: a perfect system unless you're proposing to completely revamp, like when inspections and registration We might take

[Sen. Rebecca “Becca” White (Vice Chair)]: did with inspections, if we send over a bill, that did pretty much completely revamp inspections. So it does feel a little bit

[Sen. Andrew Perchlik (Member)]: But the time frame is the same. Then flat fee, you don't like it because you just think you'll lose money.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: Well, there's a couple of things. I mean, there doesn't seem to be a need for it. If somebody wants to pay just

[Damian Leonard, Office of Legislative Counsel]: Ahead of time.

[Sen. Richard Westman (Chair)]: One time,

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: they could just pay one time. It would just be based on actual miles traveled versus some arbitrary number. What we've seen in our initial research and elsewhere is just a strong preference of people to pay a mileage based user fee because they feel it's fair. Once then you get into trying to set a flat fee, yeah, no matter what the rate is, unless you set it at 98%, you're gonna be losing a substantial amount of revenue because people and maybe this is good time for the folks.

[Damian Leonard, Office of Legislative Counsel]: Yeah. She's Just being too

[Sen. Richard Westman (Chair)]: bad. Right.

[Claire Nelson, UVM Transportation Research Center]: Hi, guys. So I do wanna jump in here too with Greg and I have both done pretty extensive public polling and research. We've on flat fees and mileage fees and just perceptions about the gas tax. So I I do wanna say that we saw through a New England survey that included a a pretty large sample of people from Vermont, there is a general preference for mileage fees over flat fees, especially after the public is educated about the purpose of collecting these fees and presented with estimates of what their annual payments would be. So we kind of did like a stage survey where we asked people's original opinion. We then gave them some information about what gas tax funding is used for and transportation funding generally, and then gave them an estimate based on their vehicle mileage and fuel economy based on their make and model of their car. We gave them an estimate of how much they would pay with the gas tax, with a flat fee, and with a mileage fee. We found that people were generally more supportive of the mileage fee than the flat fee, especially when their mileage was being collected using odometer readings, which is what Vermont is suggesting we'll do. And we found that generally people felt a flat fee was more unfair. So if you're, you know, catering to public support and public opinion, what Patrick was saying does hold true when we did some random sampling of the New England populace in addition to the national populace. I can answer more questions about that too.

[Gregory “Greg” Rowangould, Director, UVM Transportation Research Center]: I would just add real quick too, you know, the one in those studies, our national work and Northern New England work, the one thing we didn't do, of course, we didn't pull on an option where like you, you have an option to do one or the other in the program. Were conceived as alternatives to the gas tax, a flat fee or a mileage fee. But know, if you were forced to pick one or the other, the mileage fee was more popular than the flat fee. And I think an issue with the flat fee option is to collect enough revenue. You have to set it, you know, higher than what the average person you have to set it set it relatively high in and then you're making people play a game where they have to guess how much they're gonna drive next year to figure out if they're going to save money with pay per mile or pay, you know, an all inclusive fee essentially. And we don't right? It's anyone's guess exactly how many people choose to pay per mile or pay a flat fee that might and most likely would result in them paying higher fees than they need to. And it requires people to do that calculation and math each year. And I I don't I think that is amount of complexity and stuff that, you know, that would be a drawback of that type of voluntary system where it seems to be flexible, but it's putting people in this game type situation that I don't, you know, could result in in adding complexity.

[Sen. Rebecca “Becca” White (Vice Chair)]: Well, I just don't think we're gonna take the time to do that. You know, like, think the standard deduction every year, even though I know if I went through all my donations, I would probably be donating a lot more than the standard deduction. I just don't do that because it's a mental load. It's a time I have to take. You know? So I think the comparison you're making, Greg, of, like, people are going to be entering a game where they're gonna be choosing to count up their mileage and consider their mileage. I think that the person who chooses the flat fee option is just trying to avoid any of that and probably has a general like, it's not like they're gonna be counting up their mileage. I think if anything, it's gonna be like what people do with the standard deduction where they go, boom, I know I donate a lot. Whether or not I donate more than that, I'm not going take the time to review.

[Claire Nelson, UVM Transportation Research Center]: We can comment here based on the results of our public polling, which directly speaks to that question. We found that the majority of people, three out of every five people, highly, highly valued cost savings. So, most people, it seems, will be doing that deduction. I think there's a bit of a contradiction here of if you're simultaneously worried about additional charges for certain drivers and then saying that people won't be considering where they will be saving money and taking the time to save money. I think those things can't exist in the same world. So, does that make sense?

[Sen. Andrew Perchlik (Member)]: Think that

[Sen. Rebecca “Becca” White (Vice Chair)]: No, think it's different people. I think they do live

[Claire Nelson, UVM Transportation Research Center]: in the

[Sen. Rebecca “Becca” White (Vice Chair)]: same world because it's different people. Like, you could look out for different groups of people in different ways.

[Claire Nelson, UVM Transportation Research Center]: So it's Absolutely. And that's why a flat fee alternative for those who value the convenience or potentially privacy or whatever it is of a flat fee, absolutely an option. I think that just to set that at a fair rate that is incentivizing people to participate in this mileage fee program where people are fairly charged for the portions of travel that they're putting on the road and that wear and tear. I think that that fee needs to be set high enough to incentivize people to join a mileage fee program, which we found is the more equitable and supported in terms of public policy option. So I think a flat fee is absolutely a good option and all other states who have mileage fees also have flat fee alternatives. But what other states have failed to do is set that high enough to increase mileage fee program enrollment. And I think that's what Vermont is intending to do, I believe.

[Sen. Andrew Perchlik (Member)]: Well, we're deciding that. Then did you do any polling on those that drive gasoline vehicles, whether they want to pay an input?

[Claire Nelson, UVM Transportation Research Center]: Yeah, so all of our surveys that we did went out to everybody. They weren't just battery electric vehicles. For the results I was just sharing with you, I just pulled the battery electric vehicle subset of that data, but we have two published papers, one from the national study and one from a New England study that walk through how people of all different walks of life feel about mileage fees. Generally, we found that if somebody was saving money, they were much more likely to opt into the program and support it. However, we also found that people even who were losing money with a mileage fee program were more likely to support it after education about what the mileage fee system how the mileage fee system functions. So people who felt that a mileage fee system was more fair than the gas tax were more likely to support it even when they were losing money. So spending, you know, maybe 20 to $30 more a year or something like that.

[Sen. Andrew Perchlik (Member)]: Because the ceiling and the billing is that it's highly unpopular with those addressed gas. Without the what?

[Gregory “Greg” Rowangould, Director, UVM Transportation Research Center]: Yeah. So our the statement was that mileage fee is unpopular to people that pay the gas tax. Our research disc contradicts that. And there's plenty of people that feel that way. It's not like it was unanimous, but how it worked is we did poll people nationally and in Northern New England asking them exactly that sort of questioning. How do you feel about a mileage fee and a flat fee compared to the gas tax? Because again, we're talking to everyone, not just EV owners. And it's not hugely leaning one way or the other, but there was majority support for continuing with the gas tax. We then provided information about what the gas tax actually is, that it funds a fund that goes to road repairs. We talked about the history of the gas tax and how vehicles used to all get about the same fuel economy and all these types of issues. We then had a second wave of the questioning and after, right, and we had test questions to see if people under understand the the information they provided, and then we get so then support for a mileage fee for the gas tax increased and and it to a point where there was majority support for it.

[Sen. Richard Westman (Chair)]: So the per

[Gregory “Greg” Rowangould, Director, UVM Transportation Research Center]: the purpose of our research was that go

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

[Sen. Rebecca “Becca” White (Vice Chair)]: Sorry. We missed that.

[Gregory “Greg” Rowangould, Director, UVM Transportation Research Center]: I I can see why

[Sen. Andrew Perchlik (Member)]: it would work if you do the education part, but there's Yeah. Right now, there's not support for it and that's why it's

[Claire Nelson, UVM Transportation Research Center]: So I can tell you that initial support, because we we gathered their initial support and then educated them. Initial support is not nearly as polarized as people tend to think it is. It's about sixty percent of people who support keeping the gas tax and about 40% of people who would support replacing it with a mileage fee even prior to education. That varies based on the specific group of people that you're looking at, but we did find that generally low income people were more likely to support switching to a mileage fee with no level of education than they were than high income people, which says a little bit something about the equity of this implementation for people with different income groups. We also found that our results are consistent with other polling from different states who have implemented mileage fee public surveying in addition to an ongoing, gosh, almost thirteen year survey from the Moneta Transportation Institute in California. They found that when they started that survey about thirteen years ago, public support was much lower than it is today, only at about that twelve percent. I think that pinion that mileage fees have incredibly low public support is actually just a bit of a relic from when mileage fees were first talked about. And we've seen that that's steadily increased over this thirteen year time span that they've been doing this survey to the point that it closely matches what we found in our survey today, which we did our survey probably what Greg, like three years ago? Yeah. No, the Mineta Transportation Institute has now found that mileage fee support has increased to the point where it's almost a fiftyfifty toss-up. Again, it depends on who you're talking to. It depends on their level of knowledge about gas taxes and about transportation funding generally. But I do wanna clarify that public support is much higher than when mileage fees were first introduced. And with public education, we found that support for mileage fees can be even higher.

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

[Sen. Richard Westman (Chair)]: We're going to have to, at this point, I'm going to put Damien back in the chair, we're going to come back and deal with this. I think what you're hearing is that not all people are the same. Yes. And the flat fee piece, I'm going to speak just for me and not for the committee if this will be a committee decision. This is not a deal breaker at all for me in this one. If I was going to Florida and going to spend five months in the winter and I had to start thinking about paying this monthly, paying this quarterly, paying this I might just say $300, I'm good with this. And so I think what you're hearing is the friction of would someone do something for convenience just to set it and forget it versus doing the system. And so we're going to as a committee come back to this. We'll have to make a decision on this. You know, I think it's important to get your research out on the table and to understand that to do that. Could I make one last one? One last and then I'm going to put some of us have a hard stop at noon and I need to put Damian in the chair for a minute just to lay out on purchase and use to start the conversation.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: I just want to stress that paying your mileage based user fees is not at all the same as filing your income taxes, figuring out deductions and the rest of it. It's fitting in within an existing process, going to an inspection station, getting your reading and then having a fee applied. The way that we've laid this out in terms of the transition, continuing to pay the existing $89 fee allows for a full year's extra amount of time to be able to directly, you know, reach out to the folks that will be impacted by this first phase of implementation and be sure that they fully understand what this fee is all about.

[Sen. Richard Westman (Chair)]: Thank you. You. We'll be back talking about this.

[Damian Leonard, Office of Legislative Counsel]: K. Okay. Yeah. So in front of you is you'll all remember last week, we looked at a purchase and use tax proposal that the chair had asked me to work up. This is two other alternatives. You'll notice it's just for discussion.

[Sen. Rebecca “Becca” White (Vice Chair)]: This is draft 2.1 of nine four four. Just use line.

[Damian Leonard, Office of Legislative Counsel]: Yeah. Just purchase and use tax language for discussion, but 944 is just the reference so I can track track it with that. So this is it's what we call orphan language internally. These are various proposals that are not in the actual draft of nine forty four.

[Sen. Richard Westman (Chair)]: I I think the one thing around the table that I got around the table that was clear that none and none of the rest of it was clear is that the idea in the House's proposal to move money to the Ed Fund, move purchase and use tax back here, the general fund. We've had for at least three years money coming from the general fund over to transportation, to be transportation all with the budget they had. So the start of this is just in this year moving money from the general fund to here. And then after that, this is throwing proposals out there. So they managed to just run through the draft, and then I think we're lunchtime.

[Damian Leonard, Office of Legislative Counsel]: Okay. So option one shows in fiscal year twenty twenty seven, $10,000,000 transfer from the general fund to the transportation fund, which is roughly equivalent to what came over from the house, I believe. I believe house did 9,900,000.0, but I I used 10 as a round number.

[Sen. Andrew Perchlik (Member)]: Did they do a number or is it percentage?

[Sen. Richard Westman (Chair)]: They did a percentage.

[Damian Leonard, Office of Legislative Counsel]: Right. So it was a percentage of the purchase and use tax. So it's actually a fair point that their money is from the education fund. I believe it came out to 9,900,000.0. I used $10,000,000 from general funds. That number is a placeholder and can be adjusted as needed to line up with the bill. There's was an estimate. Their 9.9 is

[Sen. Andrew Perchlik (Member)]: an estimate based on the percentage. So

[Damian Leonard, Office of Legislative Counsel]: could Yes. They adjusted the percentage. Yeah.

[Sen. Richard Westman (Chair)]: And then they adjust the the meals and rooms tax to fill that whole so it's a big circle.

[Damian Leonard, Office of Legislative Counsel]: Right. So the next changes in the education fund funding. So this tracks the governor's recommended proposal, which is dollar amounts, reducing the dollar amounts going from the purchase and use tax to the education fund year over year. This proposal takes the language you saw last week, and because it does the $10,000,000 transfer for f y twenty seven, all that is done in this proposal is the f y twenty seventh transferred dollar amount is removed, and you would start at year two. So you would essentially see a $20,000,000 drop in transfers from the purchase and use tax to the Ed Fund in year two, meaning that $20,000,000 would go to the transportation fund. And a 30,000,000 drop in to the EDGE fund in year three, 40,000,000 in year four, and then 50,000,000 in year five, which is fiscal year 2031. That's not You're saying that This is the governor's recommend.

[Sen. Andrew Perchlik (Member)]: Oh, that's right. Yeah. It's just takes part part of the way.

[Damian Leonard, Office of Legislative Counsel]: It takes this is the governor's recommend with year one being done as just transfer from the general funds to the transportation fund instead of from the ed fund to the transportation fund. Does that make sense? Yes. Okay.

[Sen. Andrew Perchlik (Member)]: But it just just stops in '29.

[Damian Leonard, Office of Legislative Counsel]: Yes. The fiscal year beginning 07/01/2029 is fiscal year twenty thirty. The repeal language for fiscal year twenty thirty one is found on the next page. There would be $0 transferred from the purchase and use tax to the education fund in fiscal year twenty thirty one. Okay.

[Sen. Andrew Perchlik (Member)]: And this is just the dollars regardless of what the percentages end up being?

[Damian Leonard, Office of Legislative Counsel]: Yes. This is just the dollars. So this would this would provide essentially, regardless of what happens with purchase and use tax revenues, this provides guaranteed revenue to the Ed Fund. Your revenues could fluctuate to the transportation fund if the economy goes into a recession. Purchase and use tax revenues are likely to drop significantly.

[Patrick Murphy, State Policy Director, Vermont Agency of Transportation]: K.

[Damian Leonard, Office of Legislative Counsel]: Option two is again the $10,000,000 transfer for fiscal year twenty twenty seven. But then I worked with Chris to re estimate the amounts, and it essentially does a five year step down of the transfer from the purchase and use tax to the education fund after that. So it delays the governor's recommend by an additional year. So option one is five years to fully returning the purchasing used to absolutely transportation fund. Option two is doing it in six years. That's the main difference between the two. And those estimates are based on the current JFO estimates for growth and purchase and new staff revenues. Questions?

[Sen. Wendy Harrison (Clerk)]: I guess just a I don't know. So five years or six years to bring purchase and use fully into transportation?

[Damian Leonard, Office of Legislative Counsel]: Fully back to transportation. Purchase and use was originally all transportation and was used to backfill education.

[Sen. Wendy Harrison (Clerk)]: So, and the way that we're doing that is reducing the amount that the education fund gets. So we're presuming that that goes to transportation. So

[Damian Leonard, Office of Legislative Counsel]: the way the Purchase and Use Tax works is apart from just section in the education fund that says revenues from your purchase and new stacks shall be applied shall be deposited in the transportation fund.

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

[Damian Leonard, Office of Legislative Counsel]: The existing language there says, notwithstanding, the purchase or the transportation fund language that takes all that revenue in, the amount received in the purchase and use tax goes to the education fund. So the education fund currently takes 33% of the purchase and use tax.

[Sen. Richard Westman (Chair)]: The

[Sen. Andrew Perchlik (Member)]: and

[Damian Leonard, Office of Legislative Counsel]: what this does is it gradually steps down that one third.

[Sen. Wendy Harrison (Clerk)]: Okay. So the default is that it goes to the transportation fund?

[Damian Leonard, Office of Legislative Counsel]: Yes. That's the default position for purchasing use. So what what happens I don't remember the exact year, but essentially to address education fund shortfalls in the past, when transportation fund was healthier, that third of the purchase and use tax revenues was transferred over to shore up the education fund.

[Sen. Richard Westman (Chair)]: But the only thing that would happen this year would be the 10,000,000 transfer from the general.

[Damian Leonard, Office of Legislative Counsel]: Right. No money would come out of the education fund this year under either of these options. Both options contemplate the purchase in US tax revenues to the Trent Education Fund diminishing in future fiscal years. So fiscal year twenty twenty eight through either fiscal year 2031 or 2032.

[Sen. Richard Westman (Chair)]: Other questions? Okay. At this point, Dan, I'm gonna break this off for lunch. If you would take us off