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VT LEG #380307 v.2
H.265 1
Introduced by Representative Headrick of Burlington 2
Referred to Committee on 3
Date: 4
Subject: Municipalities; utilities; online payment; convenience fees prohibited 5
Statement of purpose of bill as introduced: This bill proposes to prohibit a 6
municipal utility from imposing a convenience fee on utility bills paid through 7
an online payment method. 8
An act relating to prohibiting the imposition of convenience fees on online 9
municipal utility payments 10
It is hereby enacted by the General Assembly of the State of Vermont: 11
Sec. 1. SHORT TITLE 12
This act shall be known and may be cited as the “Fair Access to Online 13
Utility Payment Act.” 14
Sec. 2. FINDINGS AND INTENT 15
(a) The General Assembly finds that: 16
(1) Online payment methods provide a convenient, accessible, and 17
efficient way for ratepayers to pay municipal utility bills. 18 BILL AS INTRODUCED H.265
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(2) Processing and convenience fees charged for online payments create 1
barriers for ratepayers, particularly for low-income individuals, and discourage 2
the use of electronic payment methods. 3
(3) Municipalities are able to integrate the costs of online payment 4
systems into their general operating expenses without unfairly burdening 5
ratepayers. 6
(b) It is the intent of the General Assembly to promote equitable access to 7
online payment systems, ensure transparency and accountability in municipal 8
finances, and encourage adoption of cost-efficient online payment solutions. 9
Sec. 3. 24 V.S.A. § 1585 is added to read: 10
§ 1585. PROHIBITION OF CONVENIENCE FEES FOR ONLINE 11
PAYMENTS 12
(a) A municipality shall not impose a processing fee, convenience fee, 13
surcharge, or other additional cost on a ratepayer for paying a municipal utility 14
bill or other fee through an electronic payment method, including an online 15
portal, mobile application, or credit card transaction. 16
(b) The prohibition in subsection (a) of this section shall apply regardless 17
of whether the municipality contracts with a third-party service provider to 18
facilitate online payments. 19 BILL AS INTRODUCED H.265
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(c) Notwithstanding any provision of law to the contrary, a municipality 1
shall absorb any costs associated with providing online utility payment options 2
into the municipality’s general operating expenses. 3
(d) A municipality shall include in its annual budget a disclosure of the 4
costs associated with online payment systems and identify any rate increases 5
directly attributable to covering these costs. A rate increase resulting from the 6
cost of providing an online payment system shall be directly proportional to 7
the actual costs incurred for such system. 8
(e) As used in this section, a “utility” means an electric, water, wastewater, 9
or communications retail service provider. 10
Sec. 4. 32 V.S.A. § 583 is amended to read: 11
§ 583. CREDIT CARD PAYMENTS 12
* * * 13
(e) A municipality that accepts electronic payments for providing electric, 14
water, wastewater, or communications service shall not impose a processing 15
fee, convenience fee, surcharge, or other additional cost on the payer for the 16
use of such electronic payment method. A municipality shall provide 17
justification for a proposed rate increase resulting from the cost of an 18
electronic payment system in its annual financial report. 19 BILL AS INTRODUCED H.265
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Sec. 5. ENCOURAGEMENT OF EFFICIENCY IN ONLINE PAYMENT 1
SYSTEMS 2
(a) The State Treasurer shall provide guidance and support to 3
municipalities for negotiating cost-effective terms with third-party payment 4
processors and explore fee-free payment methods such as Automated Clearing 5
House (AHC) transfers. 6
(b) The Secretary of State or designee, in consultation with the State 7
Treasurer and the Vermont League of Cities and Towns, shall design a grant 8
program to assist municipalities with the transition to modern, cost-efficient 9
online payment systems. On or before December 15, 2025, the Secretary’s 10
findings and recommendations for such grant program shall be submitted in 11
writing to the Senate Committees on Finance and on Government Operations 12
and to the House Committees on Energy and Digital Infrastructure and on 13
Government Operations and Military Affairs. 14
Sec. 6. EFFECTIVE DATE 15
This act shall take effect on July 1, 2025. 16