Scott vetoes Act 250 housing and data privacy bills

by Timothy McQuiston, Vermont Business Magazine Governor Phil Scott on Thursday vetoed the Act 250/housing bill (H.687) and the complex and sweeping data privacy bill (H.121). While he said he supported many of the housing initiatives, he added that the bill would have expanded, not eased, Act 250 measures which would have made it more difficult to develop more affordable housing. Meanwhile, he signed two bills into law, the economic development VEGI update (H.10) and the Uniform Trust Decanting Act (H.279) which updates the alcohol production rules. The Legislature will hold a "veto session" Monday, June 17, which will be headlined by this Act 250 bill, the carbon reduction bill and the property tax "yield bill," which of the three must become law by override or compromise for state government to move forward.

Also see below reaction to Scott's veto of the Act 250 and data privacy bills.

On June 13, Governor Scott signed bills of the following titles: 

  • H.10, An act relating to amending the Vermont Employment Growth Incentive Program
  • H.279, An act relating to the Uniform Trust Decanting Act

 

On June 13, Governor Scott returned without signature and vetoed H.121, An act relating to enhancing consumer privacy and the age-appropriate design code and sent the following letter to the General Assembly:

Dear Ms. Wrask:

Pursuant to Chapter II, Section 11 of the Vermont Constitution, I’m returning H.121, An act relating to enhancing consumer privacy and the age-appropriate design code, without my signature because of my objections herein. This bill creates an unnecessary and avoidable level of risk. 

One area of risk comes from the bill’s “private right of action,” which would make Vermont a national outlier, and more hostile than any other state to many businesses and non-profits – a reputation we already hold in a number of other areas. I appreciate this provision is narrow in its impact, but it will still negatively impact mid-sized employers, and is generating significant fear and concern among many small businesses.

Another area of risk comes from the “Kids Code” provision. While this is an important goal we can all support, similar legislation in California has already been stopped by the courts for likely First Amendment violations. We should await the decision in that case to craft a bill that addresses known legal pitfalls before charging ahead with policy likely to trigger high risk and expensive lawsuits. Vermonters will already be on the hook for expensive litigation when the Attorney General takes on “Big Oil,” and should not have to pay for additional significant litigation already being fought by California.

Finally, the bill’s complexity and unique expansive definitions and provisions create big and expensive new burdens and competitive disadvantages for the small and mid-sized businesses Vermont communities rely on. These businesses are already poised to absorb an onslaught of new pressures passed by the Legislature over the last two years, including a payroll tax, a Clean Heat Standard, a possible Renewable Energy Standard (if my veto is overridden), not to mention significant property tax increases.

The bottom line is, we have simply accumulated too much risk. However, if the underlying goals are consumer data privacy and child protection, there is a path forward. Vermont should adopt Connecticut’s data privacy law, which New Hampshire has largely done with its new law. Such regional consistency is good for both consumers and the economy.

Sincerely,

/s/

Philip B. Scott

Governor

On June 13, Governor Scott returned without signature and vetoed H.687, An act relating to community resilience and biodiversity protection through land use, and sent the following letter to the General Assembly:

Dear Ms. Wrask:

Pursuant to Chapter II, Section 11 of the Vermont Constitution, I’m returning H.687, An act relating to community resilience and biodiversity protection through land use, without my signature because of my objections described below. But first, I want to assure you, there is a path forward and I would respectfully ask the Legislature to pass a replacement bill that will result in more housing while protecting rural communities from additional economic harm.

Despite almost universal consensus, I don’t believe we’ve done nearly enough to address Vermont’s housing affordability crisis. 

H.687 is heavily focused on conservation and actually expands Act 250 regulation. And it does so at a pace that will slow down current housing efforts. Vermonters need us to focus on building and restoring the homes communities desperately need to revitalize working class neighborhoods, reverse our negative demographic trends, and support economic investment in the future.

Specifically, I would suggest a compromise that would achieve more balance and could be passed next week, with the following changes to H.687:

  • Modify removal provisions for the chair and executive director of the Land Use Review Board and ensure some political balance – This measure is critical to ensuring accountability to Vermonters and prevent overregulation that will harm rural communities.
  • Modify the current Road Rule with the Amendment proposed by Senator Sears – The addition of the Road Rule is a significant expansion of Act 250 that will make it harder to build. While I would prefer it be removed entirely, the Amendment proposed by Senator Sears would reduce the harmful impact. That amendment mirrors the recommendations of the Natural Resources Board (NRB) study group consensus report.
  • Extend the timeline to allow for reasonable implementation and more housing – The current timeline for the new regulatory system is not achievable and will delay the permitting process for much-needed projects. Extending deadlines for interim exemptions to 2029 to coordinate with the start of the new system, will ensure Vermonters see the full benefit of the housing package, and a more thoughtful process.
  • Extend the interim exemptions to additional communities in need of housing – Apply interim exemptions to areas serviced by municipal water and wastewater to give smaller, more rural communities the same opportunity for housing.
  • Increase the tools to spark revitalization of blighted units in low-income communities – First, we should reverse the decision to exclude Bennington, Grand Isle and Essex counties from using the property tax value freeze available to every other county. Second, without impacting the FY25 budget, we can redirect new Property Transfer Tax revenue to increase the Downtown and Village Center Tax Credits by $2 million. Third, implement the tri-partisan proposal for a Property Transfer Tax exemption when turning blighted properties into housing.
  • Make the 1B designation easier to achieve for long-term housing solutions – Revert to the Senate-passed provision to automatically map all eligible Tier 1B areas while still enabling municipalities to opt-out of the Tier 1B designation, helping these communities benefit from housing exemptions sooner.  
  • Limit appeals in designated areas to ensure interim exemptions can be used to boost housing – Designated areas indicate that a community wants housing so limiting appeals makes sense and will allow the interim exemptions to have the jump-start effect we’re seeking.

 

To be clear, I would not object to the remaining H.687 provisions if the above changes were made – meaning I’m conceding a significant number of concerns, because I’m committed to a responsible compromise.

Working together on these changes would demonstrate to Vermonters that prioritizing housing wasn’t just a talking point.

Sincerely,

/s/

Philip B. Scott

Governor

Governor's Veto of Housing & Conservation Act 250 Reform Bill Undermines Vermont's Future

On the final day of the legislative session, the Vermont Legislature passed a groundbreaking bill to update Act 250, the state’s landmark development law, to address the duel goals of building more affordable housing and better protecting critical natural resources.

In a dismaying move, Governor Scott vetoed this critical bill (H.687). This veto undermines the unprecedented consensus reached among diverse stakeholders, including representatives of the Scott Administration, and lawmakers committed to modernizing our state’s development framework.

“Despite the repeated declarations from elected leaders at all levels that we need to act boldly to increase housing in environmentally responsible ways, Governor Scott has once again chosen to obstruct meaningful progress for Vermont’s future,” said Brian Shupe, Executive Director of Vermont Natural Resources Council. “The proposed updates to Act 250 in H.687, which were grounded in the comprehensive December 2023 report from the governor’s own Vermont Natural Resources Board, provided an effective pathway for addressing the dual crises of housing scarcity and environmental degradation. We are calling on the legislature to stand behind their tireless work and the efforts of countless Vermonters  to forge a compromise that effectively balances housing development with natural resource conservation and reducing climate pollution.”

Our organization looks forward to working with lawmakers in Montpelier to work to override the governor’s veto of H.687 when the Legislature convenes for a veto session next week. 

Speaker Jill Krowinski and Chair of House Commerce and Economic Development Committee Rep. Michael Marcotte Statement Following the Veto of H.121, Data Privacy and Consumer Protection Bill

“The Governor’s veto of a consumer protection bill that passed the House on a 139-3 tri-partisan vote is disappointing, especially in light of all his discussions around bi-partisan, collaborative work,” said Speaker of the Vermont House, Rep. Jill Krowinski. “We face the misuse and abuse of our personal information each and every day, and I am immensely proud of our commitment to protecting the privacy rights of all Vermonters. The intention of this landmark data privacy bill is to ensure the security and dignity of every Vermonter in the digital age while also making sure that businesses do not face frivolous lawsuits from bad actors.

“Our collective efforts brought forth legislation that not only reflects our commitment to consumer protection from scams and identity theft but also sets a standard for the nation. It is unfortunate that so much misinformation has been spread about this bill, but we know that Big Tech and their deep pockets are fearful of no longer having unrestricted access to Vermonters’ personal information.”

“I am very disappointed that Governor Scott couldn't get past the misinformation that national tech-supported business associations, with support from Vermont business associations, used to spread fear among our Vermont business community,” said Representative Mike Marcotte - Republican, Chair of the House Commerce and Economic Development Committee.  “ H.121 is a balanced approach to Vermont consumer data privacy, giving Vermonters control of who uses their data and how it is used by data brokers and businesses, while still allowing businesses to provide targeted advertising to their customers and function in Vermont. Vermont citizens are the losers today.”

To view a complete list of action on bills passed during the 2024 legislative session, click here.

Governor Scott recently discussed his decision-making approach to the bills passed by the Legislature, highlighting the challenge of balancing benefits, costs and risks, and concerns about the realities of new costs and short timelines for numerous new initiatives coming out of the Legislature. In part, Governor Scott said, “As I’ve always done, I will carefully weigh the good against the bad to make a decision based on whether the benefits outweigh the negative impacts for our entire state. These decisions aren’t easy and they’re not always popular here in Montpelier. But I’ll take that heat when I believe I’m making the right choice for the everyday Vermonter.” Read his full statement here.

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