A briefing on legislative, regulatory, and policy developments in Vermont and beyond.
July 10, 2025
End of an Error? When Vermont lawmakers directed the Public Utility Commission (PUC) to design a Clean Heat Standard in 2023, they likely didn’t anticipate it would be stopped before it ever took effect. So, when the legislature refused to implement the complex credit system earlier this year, the PUC had to figure out how to wind it down. They have taken action by dismissing the Technical and Equity Advisory Groups, who helped design the policy, and have shut down the fuel dealer registry. In a memo released on Monday, the PUC states that since the legislature did not adopt or modify the policy, the terms of service for members of both advisory groups will end on July 15, 2025.
Does this mean the Vermont Clean Heat Standard is officially dead? Not necessarily. A Climate Action Plan adopted in late June by the Vermont Climate Council includes a modified Clean Heat Standard. More about that here.
News from DC: Summary of Big Bill
June 20, 2025
Gone Home Despite opposition from many Democrats and widespread concern across the public education system, lawmakers in Montpelier mustered enough support to send a sweeping K-12 education overhaul to Governor Phil Scott on Monday. This was the last piece of legislation before lawmakers adjourned. For a complete overview CLICK HERE to review the Meadow Hill View Session Summary.
Housing Bill Signed Governor Scott has signed S.127, the omnibus housing bill. With an estimated 41,000 new housing units needed by 2030—and current production meeting just a quarter of that—demand continues to vastly outpace supply. The key driver of investment is the Community and Housing Infrastructure Program (CHIP), which is designed to finance housing-supportive infrastructure using incremental tax revenue. The CHIP program is a $2 billion infrastructure program that will boost Vermont's Education Fund by up to $38 million per year, while adding a new tool to address the state's housing crisis. Click here for more on CHIP.
Truck Money The Vermont Diesel Emissions Reduction Financial Assistance Program is back. This program provides financial incentives for investments that reduce emissions from diesel-powered vehicles. Funds are available for those who want to replace an old diesel-powered heavy-duty vehicle with a newer diesel truck. The application deadline for this round of grants is DUE BY Monday, June 23, 2025. Learn more and apply at MeadowHillMedia.com/truckmoney.
Tax Time As of July 1, the tax on gasoline sold in Vermont will decrease by four-tenths of one cent. This is because the Vermont Motor Fuel Transportation Infrastructure Assessment Fee (MFTIAF) on gasoline fluctuates with the price per gallon. While prices were down slightly, so were sales, by about 1% over last year. Diesel sales, on the other hand, were up 2.5% over last year. Check out the Vermont Fuel Index for more details. And learn more about the taxes and fees on gasoline and diesel here.
VTBuys is Going Live The new streamlined and centralized procurement system will launch on July 1. If you sell anything, including fuel, to a state government agency, you will want to attend our webinar on Tuesday, June 24, at 2 pm. VTBuys will replace Vermont's existing manual system and will be the primary platform for doing business with the State of Vermont. CLICK HERE to register and learn more.
Gas and Diesel Ban Repealed, Lawsuit Filed President Trump signed into law two joint resolutions from Congress that eliminate California’s authority to ban gasoline and diesel-powered vehicles. Vermont adopted the same “California Rule” three years ago, which requires that 35% of new light-duty vehicles plug-in rather than gas up. It was set to take effect later this year and quickly scale up to require 100% EVs over the next decade. Vermont also passed a similar rule for medium and heavy-duty vehicles, which effectively banned diesel trucks. Hours after the ban was lifted, Vermont Attorney General Charity Clark joined her counterpart in California to file this lawsuit against the Trump Administration in order to reinstate the mandates. While all of this plays out in the courts, the EV mandates in Vermont will not be enforced. That's because Governor Phil Scott issued an Executive Order last month that effectively pulled the plug on the regulation for at least eighteen months. Watch more on that here.
PUC Rules on Registry The Vermont Public Utility Commission issued a ruling on May 27 about the Clean Heat Standard. The order states that “ The Commission cannot take further action on the Clean Heat Standard .” When it comes to the Fuel Dealer Registry, the commission stated that existing law (30 V.S.A. § 8124(b)(1) requires dealers to file and for the PUC to collect information on June 30 every year. But there are no plans to do so and no effort to enforce compliance. According to the ruling: “a bsent a legislatively approved Clean Heat Standard, the Commission will not process fuel dealer registrations, update its website of fuel dealer registrants, or enforce against non-registration.” Download the document at CleanHeatVT.com .
Help for Vets Lawmakers passed a tax relief bill that includes a long-sought exemption for military pensions. Vermont is one of the few states that still taxes military retirement income. Exempting these pensions could help retain and attract skilled veterans to the state’s workforce. The legislation will fully exempt military pensions from state income taxes for retirees with adjusted gross incomes up to $125,000, with partial exemptions for those earning up to $175,000. About half of Vermont’s 3,593 military retirees would qualify for the full exemption, with another 627 receiving partial relief.
Action Plan The Vermont Climate Council is backing a sweeping set of recommendations focused on reducing greenhouse gas emissions. At the center of the proposal is a recommendation for Vermont to join a regional cap-and-invest program that would impose new costs on gasoline, diesel, and home heating fuels. If cap-and-invest fails to deliver required emissions cuts, the Council suggests adopting a modified Clean Heat Standard or new fuel mandates, policies that could drive up costs for heat, hot water, and cooking fuel for Vermonters, especially in rural areas. The Council also proposes a massive public investment in weatherizing 79,000 additional homes, electrifying heating systems, and expanding charging infrastructure for electric vehicles.
Transportation Legislation Vermont’s FY2026 Transportation Bill (H88) includes several provisions relevant to auto and truck dealers, particularly around electric vehicles, vehicle identification, and regulatory streamlining. Other parts of the transportation budget emphasize emission reduction strategies, vehicle miles traveled (VMT) policies, and alternative modes of travel—but of particular note is the state's continued investment in Drive Electric Vermont, funded with up to $325,000 to support EV infrastructure and education efforts. The law also includes minor but important “Dig Safe” changes that extend the timeline for marking underground utilities from 48 to 72 hours, for businesses engaged in excavation or facility work. Finally, the Agency of Transportation is tasked with evaluating local transportation aid systems, including how funds are distributed to towns for road and bridge work, a potential concern for dealers dependent on rural infrastructure.
Sorting out EV Fees The State of Vermont currently assesses an Electric Vehicle (EV) Infrastructure Fee in addition to the standard vehicle registration fee for all Plug-in Hybrid Electric Vehicles (PHEVs) and Battery Electric Vehicles (BEVs) registered in the state. Revenue generated from this annual fee ($44.50 for PHEVs and $89 for BEVs) supports the development and maintenance of EV charging infrastructure throughout Vermont. This system will remain in place until a Mileage-Based User Fee (MBUF) is implemented to reflect road usage by electric vehicles more accurately. The Vermont Agency of Transportation (VTrans) and the Department of Motor Vehicles (DMV) are actively working to implement the MBUF program for BEVs. The program is now tentatively scheduled to launch on January 1, 2027.