Vermont Legislation Session Summary — June 2024
Below is a summary of legislation passed this biennium in Vermont . Not everyone will be returning to the Statehouse in January.
Tax & Spend
Vermont will spend $8.5 billion over the next fiscal year. While Governor Scott signed the budget into law, he disagreed with how to pay for it. In the end, the legislature won. They successfully overrode the Governor’s veto of the Yield Bill (H.887), increasing the average Vermonter’s property tax payment by about 14%. The state spends about a third of its budget on public schools, and property taxes are the largest source of revenue for the education fund. A summer study committee has been tasked with figuring out how to spend less. While a 14% bump in property taxes may be more than many Vermonters can afford, it's less than what was projected earlier this year. A new 3% tax on short-term rental housing, a new tax on cloud-based software, and $25 million from a one-time state budget surplus helped “buy down” the sharp increase.
As part of a broader Act 250 reform bill, the legislature passed a 3.4% property transfer tax on anyone buying a second home. The 2-cent per gallon fuel tax on heating oil, propane, kerosene, and dyed diesel was reauthorized for another five years, and the exemption on the sales tax for wood boilers was extended another three years. And a new 0.44% payroll tax passed last year will take effect on July 1.
Energy & Environment
Lawmakers passed first-of-its-kind legislation to add up the cost of climate change on Vermont's infrastructure and ask large oil production and refining companies to foot the bill. The legislation (S.259) spends $600,000 to tally up the damage and determine who should pay hundreds of millions into a “Vermont Climate Superfund.” The Governor allowed this legislation to become law without his signature. It will almost certainly result in a legal challenge. Lawmakers also passed a Renewable Energy Standard (H.289) that requires Vermont’s electric utilities to purchase 100% of their energy from renewable sources by 2030. The requirement is expected to increase the average Vermonter’s household electric bill by about $162 annually. The Legislature’s Joint Fiscal Office says it could cost a half billion dollars due to increased power supply and transmission investments. The Governor vetoed this bill, but two-thirds of the legislature voted to override.
Also now law is a study (S.253) examining whether and how Vermont can enforce building energy codes. Another law (S.305) allows Efficiency Vermont to spend up to $2 million a year on thermal and transportation programs while removing the authority of the Public Utility Commission (PUC) to review how they spend the money. Lawmakers passed a Clean Heat Standard last year that will eventually require heating fuel dealers to sell their customers less fuel or pay someone else to get them to use less. This year, the legislature made minor changes to the law. They moved the annual dealer registration and reporting deadline from January to June and clarified that confidential information would not be available to the public. The earliest the Clean Heat Fee could be implemented is on January 1, 2026, according to a PUC order. Learn more about what it is and how much it could cost at CleanHeatVT.com.
Transportation
The Governor also signed an $879 million transportation spending plan passed by lawmakers. The legislation (H. 868) sets aside about $150 million for fixing state and town roads. There is $56 million for public transit programs, $1.1 million to electrify state-owned fleet vehicles, and $70,000 in e-bike incentives. There are also new fees for electric vehicles (EVs) and plug-in hybrids (PHEVs), which will go into effect on January 1, 2025. EV owners will pay an extra $89 annually, and PHEVs will pay $44.50. Given the number of electric cars on the road, this is expected to raise $1.7 million in 2026. Money from the fees on EVs will be set aside to fund more electric vehicle chargers. None would go to fix Vermont’s roads. At least not until the state creates a Mileage-Based User Fee (MBUF), which won’t happen until at least 2026. The Agency of Transportation will have to figure out how to roll out an MBUF and what regulations are needed to ensure EV chargers work correctly. The legislature also clarified in law that vehicles over fifteen years old that have not changed ownership since January 1, 2024, are exempt from needing a title. Starting on July 1, 2026, EV owners must have the letters “EV” stamped on their license plates to alert firefighters, beginning July 1, 2026. That is the same deadline for removing aftermarket tint on front side windows (if greater than 30%) to pass inspection. On January 1, 2024, a 20% increase in DMV fees went into effect. Starting on July 1, 2025, used vehicle dealers must get their customers to sign a form acknowledging when the vehicle was last inspected at the point of sale. While an increase in the gas tax was discussed briefly, no action was taken.
Housing & Economic Development
Governor Scott has signed legislation (H.10) that provides a two-year extension of the Vermont Employment Growth Incentive Program. This crucial economic development tool includes job creation, wage lifting, and capital investment programs. The incentives are delivered to businesses only after the Vermont Tax Department confirms that the investments have occurred. The Governor also signed H. 707, which would create a new position in state government to coordinate workforce development efforts and strategies for comprehensive and integrated workforce education and training. Another measure (H.606) allows any individual who meets the standards required by the State to obtain a professional or occupational license or certification, regardless of their immigration status.
Lawmakers also passed several changes to Act 250, Vermont’s half-century-old land use law. The legislation (H.687) integrates environmental reforms with initiatives to increase housing production, such as simplifying the construction permitting process and reducing bureaucracy for developments near more urban areas of Vermont. The exemptions from Act 250 review are only for specific housing projects based on location, which is an attempt to facilitate immediate development in designated areas. However, it creates some uncertainty and imposes even more regulatory authority on rural areas of the state. To prevent “forest fragmentation,” anyone who wants to build a driveway greater than 800 feet on their land must get state approval first. Governor Scott supported the housing provisions but vetoed the bill because it added new environmental regulations that could limit new housing in rural areas of Vermont. The legislature voted to override the Governor’s veto, making H.687 law.
Business Regulations
The legislature failed to override the Governor’s veto of (H.121). The legislation would have prohibited the sale of sensitive data and allowed consumers to file lawsuits against Vermont companies. It would have introduced rigorous and untested regulations impacting businesses of all sizes. Another regulation, S.102, did become law. Employees can leave a company meeting without retribution if they perceive it as political or religious. Also law is H.704, which requires any Vermont employer that advertises an open position to include the compensation range for the job.
Public Safety
Several public safety measures were signed into law by Governor Scott. Widespread concerns over crime led to legislation (S.58) that creates harsher penalties for drug-related offenses. Other actions include a measure (S.195) to increase supervision of people who are accused of crimes before their day in court and a measure (H.563) that would make it a crime to “trespass” in someone’s vehicle. Another proposal (H.534) creates more substantial penalties for retail theft. Currently, anyone caught stealing merchandise valued at less than $900 constitutes only a misdemeanor offense. The law will result in significant fines and potential jail time for repeat offenses.
Communications
Governor Scott signed into law Act 99, designed to support the continued development and success of Communications Union Districts (CUDs) in providing high-quality broadband service to underserved areas. It focuses on enabling mergers and cooperative efforts among CUDs, ensuring they can operate effectively in a competitive market without relying solely on public funding. The law also protects CUDs' business data to maintain their competitive edge. Additionally, the act will allow for consolidating resources and expertise among Vermont's CUDs to enhance their capacity to deliver reliable and fast internet services across rural regions. The law could lead to more efficient service provision and potentially lower costs due to the larger scale of combined operations.
H.657 is also now law. The measure changes the contribution method for the Universal Service Fund, moving from a 2.4% proportional charge on telephone and cellular phone service to a flat, per-line fee of $0.72 per month. The legislation is anticipated to generate $8 million in annual revenue, with 17% (about $1.4 million) allocated to the Vermont Community Broadband Board. The legislation also clarifies that telecommunications equipment is considered tangible personal property for tax purposes and includes physical infrastructure like wires, cables, antennas, poles, and wireless towers. The Public Service Department and Agency of Transportation will also be required to examine how telecom companies use Vermont's public right-of-way (ROW). The legislature wants to know how the ROW is accessed and whether the state should charge these companies.
Municipalities will be required to hold hybrid meetings that the public can attend online or in person under S.55. Members of the Vermont Communications Union Districts Association (VCUDA) asked that CUDs be able to continue to have fully remote meetings and not require a “hybrid” option since many do not have a physical location. While all other entities must have an in-person option for any online meeting starting on July 1, 2024, CUDs were given a six-month extension.
Health Care
H.861 is now law. It mandates that health plans pay the same amount for an audio-only health care visit (i.e., a telephone call) as an in-person visit. Currently, the Department of Financial Regulation requires that an audio-only service be paid at 75% of an in-person visit. H.766 is also law. The measure limits cost containment tools by adding restrictions on Step Therapy drug protocols requiring patients to try therapeutically equivalent, lower-priced medications before moving to higher-cost drugs. Meanwhile, insurance premiums could increase by as much as 19% next year.
