Senate advances H.657 to modernize telecom fees, orders further study of right‑of‑way charges

The Vermont Senate on the floor advanced H.657 on a substitute amendment that would change how the state raises money for enhanced 911 and other communications programs and direct a study of charging for use of state rights of way.

Senators substituted the finance committee report with a proposal that divides the bill into three main parts: adopt a flat 72¢ per line contribution to the Vermont Universal Service Fund (replacing a 2.4% charge on voice services), repeal the telephone personal property tax and treat communications property as real property on the grand list, and require VTrans to study how the state’s rights of way are being accessed and how other states charge for that access.

The substitute's sponsor said the fixed per‑line fee would “resynchronize our universal service fee to fund all of our 911 services” and noted the current USF raises just under $6,000,000 annually and has declining revenues as voice services fall out of use. "This bill really has three chunks, designed to modernize our telecommunications revenue models to adapt to the times we now live in," the senator said in floor remarks.

The bill also directs that low‑income Lifeline recipients be exempt from the new flat fee and retains the existing 2.4% charge for prepaid wireless service. The presenter told colleagues the change aims to make funding for enhanced 911, relay services, and the connectivity fund more predictable, and said a 2022 Agency of Administration report recommended similar changes.

Debate concentrated on the second and third parts of the substitute. The substitute would remove a long‑standing telephone personal property tax and require communication service providers to file an inventory with the Property Valuation & Review (PVR) division so that communications property can be valued and taxed as real estate on the grand list. Appropriations would provide $150,000 to PVR to create a valuation model.

Members warned that reclassifying communications equipment as real property raises difficult valuation questions for rapidly depreciating network gear. One senator noted the finance committee removed certain fast‑depreciating items from the substitute because PVR testified it could not reliably appraise those assets.

The third component — a VTrans study of rights‑of‑way access and charging — prompted sustained questioning. Lawmakers and witnesses told the committee that VTrans lacks comprehensive GIS data tying poles and fiber to exact state right‑of‑way boundaries, and that collecting the data could be costly and burdensome for both the state and communications providers. “If we mandated they supply that data in a format that is not easily consumable, it would greatly distract them from their priorities,” the sponsor said, summarizing concerns raised in testimony.

Advocates for moving forward noted that the bill's substitute is deliberately incremental: the statute authorizing rights‑of‑way charges would be studied rather than immediately implemented after substitution. Supporters argued the fixed fee will shore up funding for emergency communications without immediate sweeping compliance requirements for providers.

On the fiscal side, the sponsor said the substitute estimated roughly $8,000,000 of annual revenue from the revised structure and suggested shifting several million dollars over time from the general fund to the Education Fund and other state priorities as classifications change. Members pressed that those figures were estimates and that the real costs of inventory and enforcement remain uncertain.

The Senate agreed to substitute the finance report with the sponsor's amendment and adopted the substitute; senators then ordered a third reading. That action moves H.657 toward final consideration but leaves open the questions about valuation, inventory costs, and the scope of any eventual right‑of‑way fee.

The committee and floor debate indicates lawmakers expect follow‑up work if H.657 proceeds: details on valuation methods, data‑inventory costs, potential protections for proprietary provider data and an implementation timeline are likely to surface in the next stages of consideration.