The House took up S.5 on Thursday to override the Governor’s veto of the bill.

Representative Beck presented the bill on the floor Monday. Major changes from the Senate involved a slightly increased average tax increase and a reduction in the tax newly-created reserve to help buffer property taxes in FY2025. In the Senate version, this fund was reduced from $22M to $13M.

As the 2023 legislative session is winding down, legislators are rushing to give themselves a pay raise and a new benefits package. The effort would bring Vermont legislative pay closer to the $31,775 median for legislators across the country. We reported on this when the bill passed the Senate, at the time it looked like the bill would likely wait until next year, but the House is posturing to move aggressively on it.

The Senate Finance Committee reconvened on Wednesday to review their changes to H.492, which sets the annual property tax rate calculation. The draft changes would decrease the income yield to $17,537 and the property value yield to $15,443. It’s worth noting that decreasing the yield will increase local tax rates. The non-homestead property tax rate would be increased from $1.388 to $1.391.

Tuesday

The House Government Operations Committee took up the legislative compensation bill, S.39, on Tuesday, reviewing the Senate version of the bill.

Josalyn Williams (Policy Specialist, National Conference of State Legislatures) joined the Committee to provide testimony on legislative compensation across the country. Legislative salaries range from $0 to nearly $120k annually. The median pay is around $31,775 per year. However, for part-time legislatures, this number drops to $13,111 in annual compensation.

On Thursday morning, the House Environment & Energy Committee returned to review their committee amendment to the bill. The changes included the recommended amendment by Commissioner Hanford from the previous day. The amendment also included the language requested by Green Mountain Power, as well as a study on the distribution of utility projects, where they were occurring, and what permits were required. Finally, the amendment would change the 5-5-5 rule to a 10-5-5 framework.

Wednesday afternoon, the House Environment & Energy Committee returned to hear from Josh Hanford (Commissioner, Department of Housing & Community Development) on a draft amendment related to the appeals process in Act 250 that allows 10 unrelated persons to petition for an appeal. The language that he was proposing, and that the VNRC and others had agreed to, would prevent such a group from appealing if some component of the project included affordable housing. The previous language that the Committee had passed would allow any “aggrieved” person to appeal except for affordable housing projects.

After lunch on Tuesday, the House Environment & Energy Committee continued their work on S.100. They now had a Draft 5.1 from Legislative Counsel to review.

The new draft of the bill includes a section signaling a major policy shift. The new language would call for the Natural Resources Board to work with the Vermont Association of Planning and Development Agencies to develop a framework for delegating the Administration of Act 250 permits to municipalities. The Committee expressed interest in asking for consultation with an “environmental organization,” state agencies (presumably the Agency of Natural Resources), and possible public hearings.

On Monday, the House Environment & Energy Committee took up S.100, which is the main housing bill this session. The Committee was reviewing Draft 4.3 of the bill with Legislative Counsel. A number of provisions in the bill would override local zoning regulations that some consider discriminatory and may discourage growth.

On Tuesday, Chairman Campion brought up H.483 for the Senate Education Committee to see where members are at with the bill. He noted that the provisions related to discrimination were addressed in the 2200 rule series and “seemed to be working effectively.” He added that people had been asking about the moratorium on new schools receiving approval status. He thought it might make sense to move forward on that piece and then “assess” next year “how many [schools] are in the queue.”

Governor Scott has already promised to veto the Clean Heat Standard (S.5) passed by the Senate on Thursday. Senators voted 20-10 to concur with the House version of the bill that would create a carbon-pricing system for heating fuels based on their carbon intensity. This was one vote short of being able to sustain a veto, so one Senator would need to shift their position on the bill in order to Scott's veto to be successful.

In preparation for the vote, Campaign for Vermont sent a letter to the Senate Appropriations Committee explaining why the "check-back" provision was weak and they should strengthen it. One of the bill sponsors acknowledged in the floor debate that the original version of the bill "fully implemented the Clean Heat Standard,” and that the check-back was an afterthought. Essentially, the bill allows the Public Utility Commission to implement key pieces of the system prior to legislative approval and exercise enforcement powers for non-compliance.

Christina Sivret introduced herself to the House Government Operations Committee on Tuesday. She talked about the Vermont Ethics Commission and the service they provide. The majority of their current responsibilities relate to training and providing advice; they have ability to receive complaints but not to investigate them. However, they do oversee that State Code of Ethics.

The concept, she explained, is that the State Code of Ethics should apply to all state employees. She discussed the fact that if there can be additional codes of ethics within a state department that may be more stringent than the statewide code.

The bill creating the Clean Heat Standard, S.5, made it back to the Senate Floor on Thursday. Senator Bray went through the differences between the House and Senate versions of the bill:

The Senate Finance Committee had been kicking around the property tax bill, H.492, for a couple weeks and circled back again on Friday. They also had a fresh Education Fund Outlook to look at. The Senate’s version did not include cannabis retail taxes and had a slightly higher average property tax bill. It also had a slightly lower carry-over from the previous year based on the latest projections.

The Senate Finance Committee met on Wednesday to discuss the impact of rapidly increasing housing costs. Chairwoman Cummings teed up the conversation by stating that some towns, like Stowe (as example) are seeing the number of people who qualify for income sensitivity drop, by no fault of their own. In some cases, homes have increased from $400K to $600K two years later (there is a $400k cap on house site value for income sensitivity). She mentioned the legislative goal of 80% of taxpayers being “income sensitized” (meaning they qualify for the property tax credit) and the state is now down to 64%. She was seeking solutions for how to address this long term.

On Thursday, the House Government Operations Committee returned to work on S.32, which would establish a ranked-choice voting (RCV) system for presidential primary elections. Katherine Schad (Chief Administrative Officer, Burlington City) joined the Committee. Chairman McCarthy asks her to comment specifically about operating an RCV system with multiple precincts.

Chairman McCarthy introduced Senator Brock to the House Government Operations Committee on Tuesday, saying that he “loves this bill” as it solves a problem, does not cost much to start up, or to continuing operating, and does not raise taxes. It “actually gives something back to Vermonters,” he claimed. He continued that often they “pass things, we’re the first in the nation to do it. And then we pay the price because we don’t know how to do it,” he quipped.

NOTE: Perhaps this thinking could be applied to other areas.

On Tuesday, C.J. Spirito, Head of School at Rock Point School in Burlington joined the Senate Education Committee to talk about H.483.

Rock Point is a small independent school with students ranging from “high-flying, college-bound students to kids in the hospital because they can't function or are not getting to school.” They are not competing with public schools or larger schools for students, he noted.

He was there to raise concerns about some of the major provisions in the bill and how they would impact his specialty school. He noted that if they “took any kid without an admissions process,” they would not be able to “protect the space for the kids that are here now” and continue to successfully serve them. The bill would put the school in a difficult place because they would have to deny publicly-tuitioned students that they could help, in order to protect the current students.

Dear Senate Appropriations Committee,

While we may differ on whether or not the Clean Heat Standard is the best path forward at this time, it is clear that this is the intention of the legislature. We would like to offer some constructive feedback on aspects of the bill that we believe are problematic to the stated goals of accountability, affordability, and carbon-reduction.

Before we dive into this week's update we need to get something unfortunate out of the way. Last week we had reported that the House had gutted the "check-back" provision in S.5 that requires the Public Utility Commission (PUC) to bring the Clean Heat Standard rules back to the legislature for a vote. This was in fact incorrect. The provision in question had been added in the Senate, not by the House Environment & Energy Committee as we had indicated. Our reporter on the bill didn't catch that provision until the walk-through in that Committee and didn't realize it was in the underlying bill, not the amendment being offered by the Committee. Our apologies for this mistake.

That being said, the provision in question is still concerning because it could potentially allow the PUC to skirt the "check-back" provision in the bill. The House did offer an amendment on the floor in an attempt to address this, but we will encourage legislators to strengthen the check-back provision and limit workarounds.

The bill creating the Clean Heat Standard (S.5) passed the House this week 98-46, two votes shy of a veto override. The bill now moves back to the Senate to see if they will agree with the (relatively minor) House changes or if a Committee of Conference will be called for. The Senate was one vote short of being able to sustain an override when they voted on the bill back in March.