SHAZAM!
With Town Meeting break and the March crossover dates fast approaching, policy committees in the legislature were engulfed in bill markup this week. Legislation relating to neonicotinoid pesticides, the public library system, vehicle towing, Act 250, regulation of dams, regulation of cannabis and regulation of PFAS are a few of many policy debates heating up across House and Senate committees.
As anticipated, the House and Senate agreed this week to appoint a committee of conference to work on the Budget Adjustment Act (BAA). This is the first step in the negotiation and reconciliation of the BAA between the two chambers. The House has appointed Representatives Diane Lanpher (D-Vergennes), Robin Scheu (D-Middlebury), and Theresa Wood (D-Waterbury) to the conference committee. On the Senate side, Senators Jane Kitchel (D-Caledonia), Andy Perchlik (D/P-Washington), and Richard Westman (R-Lamoille) have been appointed.
EDUCATION SPENDING
The legislature is busy addressing an anticipated 20 percent hike in property taxes. H.850, which passed the House earlier this week and is now being discussed in the Senate Finance committee, seeks to repeal a tax cap that has been identified as a driver of increased education spending and tax burdens across the state. The five percent cap was meant to help more affluent districts make the transition under a new law which redistributes tax capacity to help high-needs districts that have been historically underfunded. But this transition mechanism created unintended consequences resulting in potentially soaring property taxes. H.850 moves this transition mechanism to a targeted approach that sends tax discounts to districts losing tax capacity under the new, more equitable system created by Act 127. The Senate Finance committee approved H.850 on Friday afternoon. The Senate Appropriations committee will need to act quickly to send the bill to the Senate floor for it to be approved in advance of Town Meeting Day, which is Tuesday, March 5.
PRIVACY
The House Commerce and Economic Development committee is currently working on H.121, an omnibus data privacy bill modeled after a similar law in Connecticut, with some key differences. One significant departure from the Connecticut law is the inclusion of a private right of action (PRA), which is a key focus for many stakeholders. The business community has voiced concerns over the potential for frivolous lawsuits, a scenario that has played out in other states with PRAs for data privacy legislation. H.121 also revises Vermont’s data broker statute.
A new draft of H.121 was expected today, but its release has been delayed as the committee works through the bill’s complexities, balancing consumer privacy with business concerns.
TELECOM TAXES
This week the House Ways and Means committee continued to take testimony on H.657, a bill that would increase taxes on telecommunications services. H.657 would establish a new special fund to subsidize public access television stations and create a new tax on utility pole attachments to raise $8 million for the fund. If passed, Vermont would be the first state in the country to assess a tax on wireless services to pay for cable access stations. The bill also increases the Universal Service Fund charge, which appears on the phone bill, by changing it from a 2.4 percent charge to a 72-cent monthly per-line fee. H.657 would include telecommunications property in the grand list starting in FY2026, which would apply the property tax to these facilities. It would also impose fees on telecommunications equipment in state right-of-way corridors.
The Ways and Means committee removed a provision from the bill that would apply the sales tax to prewritten software, commonly referred to as the “cloud tax”. House Chair Emilie Kornheiser said the cloud tax is not appropriate to include in H.657 as it is a telecom bill, but said there is a strong likelihood they will add the cloud tax to another bill later in the session. The House has passed some version of the cloud tax several times in recent years, but the Senate has historically not supported the proposal.
While House Ways and Means contemplated telecommunications taxes, the Senate Finance committee discussed applying a new “streaming tax,” which would impact streaming services such as Netflix and Hulu. The streaming tax is yet another proposal on the table to provide additional revenue to Vermont’s public access television stations.
