Vermont Legislative Update 02-21-2020
An analysis from DRM's Government & Public Affairs Team
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New Act 250 board proposal is gutted
The House Committee on Ways and Means voted 9-1 this week in favor of an amendment to strike increases in permit fees proposed in H.926, the Act 250 reform bill. The fee increases, most notably an additional $3 dollars per $1,000 of project construction costs, were necessary to fund the operations of the new board model and appeals process. Today’s vote effectively terminates the controversial plan for a new Natural Resources Board.
After months of testimony and discussion in the House Committee on Natural Resources, Fish and Wildlife, the bill designed to modernize Vermont’s landmark land-use law finally made its way to the Ways and Means Committee. Committee Chair Janet Ancel, D-Calais, said that while there were many good parts to the bill, the sections proposing changes to district commissions and a new board were not ready for deliberation.
Working in coordination with the Natural Resources Committee, agreement was made to strike the increased fees from the bill and return it to Natural Resources, where that committee is expected to strike the language for the new board, leaving the current Act 250 district commissions, appeals process and Natural Resources Board in place.
The Scott Administration, in cooperation with Vermont environmental groups, began this session pushing for the new board, certain exemptions for transportation and exemptions for trails -- none of which are in the current bill. Increased protections for critical resource areas and exemptions from Act 250 process for designated development areas still remain, but it is doubtful that these changes will survive the gutting of the remainder of the bill.
Cloud tax: committee likes tax-followed-by-study route
On a straw poll, the House Committee on Ways and Means has shown support for draft language that imposes the sales tax on vendor-hosted prewritten computer software, and also calls for a study committee to report on the issue.
Rep. Scott Beck, R-St. Johnsbury, introduced an amendment to create a sales tax exemption for “digital manufacturing” similar to the traditional world of manufacturing. Currently, Vermont manufacturers are exempt from paying a sales tax on goods that are used in the manufacturing of tangible property. Coming up with a definition of tangible personal property created with software has been difficult for the committee. Rep. Beck offered the example of a graphic designer: “The Adobe Illustrator software they use to create a logo would not be subject to sales tax. The QuickBooks they pay a monthly subscription fee for would be.”
Ultimately, the committee showed support for adopting the sales tax as of June 1, 2020, and for the creation of a study committee to estimate the fiscal impact of exempting the digital industry’s purchases of vendor-hosted prewritten computer software.
Transportation committees consider per kWh fee for EV charging
The House and Senate Transportation committees are considering per kWh electric vehicle charging fees. VTrans and the Department of Public Service have proposed language in the Transportation Bill to study the statewide implementation of a kWh fee for electric vehicle charging and to conduct a pilot of the fees at public charging stations. Michele Boomhower the Director of Policy, Planning and Intermodal Development for VTrans explained that the state must strike a balance while in the early stages of EV adoption so that revenue raising policies do not disincentivize adoption. Under the proposal, a mandated fee would be triggered when 15 percent of registered cars are EVs -- expected to be around 2025.
Utility reactions to the proposal have been largely divided along urban and rural lines. Urban utilities have already implemented or are in the process of implementing special charging rates. Meanwhile, rural utilities suffer from lack of broadband, making the use of software or apps to manage load difficult or next to impossible. The kWh fee also requires either a separate meter or a Level 2 charger at the home which presents a barrier to customers and a cost that utilities would have to subsidize. Collecting data from charging stations also comes at a cost, as third party EV charger companies are not regulated by the PUC, and utilities may be required to buy the data.
Addressing the complexity and novelty of these major reforms, Senate Transportation Committee Chair Dick Mazza said, “We’re learning every day.”
Energy Efficiency Modernization Act
The Senate Finance Committee took testimony this week on S.337, the “Energy Efficiency Modernization Act.” The bill establishes a three-year pilot for efficiency utilities to work in the thermal and transportation sectors using up to $2 million per year from the energy efficiency charge. It would not increase Efficiency Vermont’s budget. Utility representatives, the Department of Public Service and Efficiency Vermont all testified in support of the bill.
Rebecca Foster Director of Efficiency Vermont testified that one of Efficiency Vermont’s strengths is looking at supply chain issues, identifying leverage points and figuring out incentives to spur the market. She believes they can do the same for the transportation sector. Families in Vermont spend 10-20 percent of their household incomes on energy costs and within that, transportation is 45 percent, thermal is 35 percent and electricity is 20 percent. Foster testified that S.337 would enable Efficiency Vermont to spur an additional 6,000 electric vehicle sales, 750 weatherized homes and 750 heat pumps, or the equivalent of 5,000-6,000 metric tons of greenhouse gas emissions reductions.
Distribution utility representatives spoke in support of the bill but said that any spending or programmatic changes should count towards existing regulatory requirements.
VEGI program under fire in House Ways & Means
Hostility towards the state’s only significant economic development program continued this week in the House Ways & Means Committee. In a mid-week straw poll, nearly half of committee members showed support for putting the Vermont Economic Growth Incentive Program on hold for a year.
The committee took testimony on a bill, H.640, that would require the Vermont Economic Progress Council (which administers VEGI) to disclose confidential information about businesses that receive grants. Committee Chair Janet Ancel, D-Calais, said, “If you can’t make this public, maybe we shouldn’t do this program. This is taxpayer money.”
Program Director Megan Sullivan responded that Vermont already has one of the most transparent programs in the country and the legislature already has access to the data the bill would make public. She provided the committee with data on the jobs the program has created.
Committee members continue to be skeptical about provisions in a separate bill, H.641, that would expand VEGI to authorize grants to large manufacturers that make significant capital investments in Vermont.
Finance Committee pares back renewable energy standards bill
The Senate Finance Committee took testimony on S.267, a bill that would increase the renewable portfolio requirement for electric utilities. Utilities would be required to procure all of their power from renewable sources by 2030. Of that amount, twenty percent would have to be generated from more expensive, small-scale renewable sources.
Witnesses from Green Mountain Power presented a more detailed and shocking analysis of the bill’s potential cost than they had in prior hearings. According to GMP, the bill would increase electric costs in Vermont by as much as $1 billion over ten years. About half of those costs would result from required upgrades in the state’s transmission system to accommodate a dramatic increase in solar generation. The state would have to produce more than 1200 MW of solar power by 2032 – far in excess of Vermont’s current peak demand of about 900 MW.
GMP said if the bill is amended to allow for flexibility in the procurement of renewable power, it could meet the requirement for 100 percent renewable generation. In addition to requiring 100 percent renewable generation, the bill includes two provisions that could dramatically drive up costs: utilities could not increase their procurement of large hydropower beyond one-third of their supply (or beyond their existing supply if it exceeds 33 percent); utilities would be required to double their so-called Tier 2 power - small-scale utility power that significantly exceeds market prices.
GMP urged the committee to allow flexibility for procurement of large hydro, and to meet a doubling of the Tier 2 requirement through new renewable power of different types and sizes, located in Vermont or elsewhere in New England.
Committee members appear receptive to modifications in the bill that would minimize its rate impacts. The committee is expected to finish work on the bill next week.
PFAS under scrutiny in Senate committee
The Senate Health and Welfare Committee took testimony on Friday on S.295, a bill that would ban the use of perfluoroalkyl and polyfluoroalkyl substances, or PFAS, in firefighting foam, food packaging and residential rugs and carpet. PFAS would also be designated under the law as “chemicals of high concern to children.”
Witnesses from Seventh Generation, Professional Firefighters of Vermont and Conservation Law Foundation submitted testimony describing the adverse health effects that can result from exposure to PFAS.
Sen. Ann Cummings, D-Washington, raised questions about the scope of the bill as well as concerns about whether affordable replacement products would be available. Legislative Counsel acknowledged that the bill defines PFAS very broadly to include “a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.”
The committee is expected to continue taking testimony on the bill, and may consider broadening the categories of products that are subject to the ban.
Builder contractor registry bill hits a wall
Vermont news outlets have reported numerous stories of unsuspecting homeowners who hire contractors who turn out to be disreputable, either performing poor quality work or taking large deposits and disappearing. The Senate took steps last session to address the problem by passing S.163, a contractor registry bill. This registration was endorsed by many organizations, including the Vermont Home Builders and Remodelers Association. This was the last bill left unaddressed on the House calendar when the legislature adjourned last May.
A contractor registry is the foundation upon which the state can enforce Renewable Building Energy Standards. Witnesses have testified that without a registry, there is no reliable method to inform contractors about new and updated energy requirements, hold builders accountable for their work and provide the public with a resource for finding reputable builders.
Climate change, energy efficiency and weatherization continue to be leading matters in Montpelier. Housing stock, both existing and new construction, are important components in addressing concerns related to these top issues. The fact that this bill is currently in limbo is a mystery to many in the State House.
Solutions proposed to address health care workforce shortage
The House Committee on Health Care heard testimony this week on the shortage of health care workers plaguing Vermont. The committee learned that clinical educator shortages are a portion of the problem due to the cut in pay that educators receive compared to practicing nurses and the advanced education requirement that clinical educators must have.
Many witnesses supported the Office of Professional Responsibility’s bill that would remove that education requirement. Multiple scholarship programs, existing or proposed, will incentivize medical students to work in Vermont if they accept the scholarship, or, scholarships will revert to loans if the student decides to work elsewhere after graduation. Loan repayment programs, loan refinancing, and streamlining education requirements for students were also proposed.
A workforce subcommittee has proposed more scholarship programs to incentivize health care students to work in Vermont, lowering the education requirement for clinical educators, and lowering the age requirement for licensed practical nurses to 17. For a more detailed overview, see the DRM Health Care Update for Feb. 21, 2020.
Panel looks to mandate Transportation Demand Management
Representatives of the VNAs of Vermont, the Vermont Association of Hospitals and Health Systems, and the Vermont Health Care Association appeared before the House Transportation Committee on Thursday to oppose a proposal that would require all employers with 50 or more employees to design and implement a transportation demand management plan. They said health care is not an industry that lends itself easily to telecommuting with 24/7/365-days-a-year operations. With limited transportation options in rural communities where most health care providers are located, public transit is often not available beyond normal working and business hours.
VNAs of Vermont Executive Director Jill Mazza Olson said the bill is nonsensical for the work her members provide, which is delivering care to people at home. Olson said massive workforce shortages are impacting every aspect of healthcare. The staff in these facilities wear many hats and this would be another program that someone would have to design and oversee.
Olson said telehealth technology is being implemented and is critical in addressing a workforce shortage. Telehealth also has the added benefit of positively impacting carbon emissions goals.
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